European Community (Intergovernmental Conferences)

HC Deb 21 November 1991 vol 199 cc436-528

[SECOND DAY]

[Relevant document: Minutes of Evidence taken before the Foreign Affairs Committee on 19th November ( House of Commons Paper 35-i)]

Order read for resuming adjourned debate on amendment to Question [20 November]: That this House, believing it is in Britain's interests to continue to be at the heart of the European Community and able to shape its future and that of Europe as a whole, endorses the constructive negotiating approach adopted by Her Majesty's Government in the Inter-Governmental Conferences on Economic and Monetary Union and on Political Union; and urges them to work for an agreement at the forthcoming European Council at Maastricht which avoids the development of a federal Europe, enables this country to exert the greatest influence on the economic evolution of the Community while preserving the right of Parliament to decide at a future date whether to adopt a single currency, on issues of Community competence concentrates the development of action on those issues which cannot be handled more effectively at national level and, in particular, avoids intrusive Community measures in social areas which are matters for national decision, develops a European security policy compatible with NATO and co-operation in foreign policy which safeguards this country's national interest, increases the accountability of the Commission, enhances the rule of law in the Community including improved implementation, enforcement and compliance with Community legislation, improves co-operation between European governments in the fight against drugs, terrorism and cross-border crime, and through these policies secures the long-term interests of the United Kingdom.—[The Prime Minister.]

Which amendment was: to leave out from "House" to the end of the Question and to add instead thereof: 'regrets that Her Majesty's Government's preoccupation with divisions in its own Party has meant that in the Inter-Governmental Conferences is has not taken the negotiating approach necessary to ensure that the United Kingdom exercises decisive influence on the future of the Community in ways which will help to advance the living and working standards of the people of this country in company with other peoples of Europe; calls upon Her Majesty's Government to work for an agreement at the European Council which ensures inclusion of the Social Charter, qualified majority voting on social and environmental matters, powers for the European Parliament to hold the Commission to account in ways that complement the role of national parliaments, decision-making at the level—local, regional, national or Community—where maximum democratic control is at all times exercised, foreign and security policy co-operation without the development of a European Community military role, widening of the Community as rapidly as practicable, co-operation to combat terrorism and other crime, and strengthened powers for ECOFIN as the politically responsible counterpart to any European Central Bank system; and urges the Government to work to secure agreement to, and adopt policies for, high levels of employment, sustainable non-inflationary growth, balanced regional and national economic development and social cohesion, and for the fundamental reform of the CAP, in order to achieve real economic convergence in the years leading to economic and monetary union and a single currency as the essential foundation for those changes and to safeguard the long-term interests of the people of the United Kingdom.'—[Mr. Kinnock.]

Question again proposed, That the amendment be made.

Mr. Speaker

I have already said that 82 right hon. and hon. Members are seeking to participate. I shall put a limit on speeches between 7 and 9 o'clock, but I ask those who are fortunate enough to be called before that time to bear the 10-minute limit in mind.

Mr. Bob Cryer (Bradford, South)

On a point of order, Mr. Speaker. Yesterday, I raised a point of order about whether an amendment to the amendment in the name of the official Opposition would be eligible to be called before 10 o'clock. Since that now appears on the Order Paper, I should be grateful for your comments.

Mr. Speaker

I have not found it possible to select it.

4.14 pm

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Douglas Hurd)

This debate is crucial for us and it is a crucial part of the debate in the Community. It is natural for the European Community to consider from time to time its institutions and its working methods to see whether they can be bettered, and that is the purpose of the two intergovernmental conferences leading to Maastricht.

My own view is that the conferences come rather too soon after the last one. The previous examination led to the Single European Act, which was signed in 1986 and came into force just four years ago. If we had waited three years longer, the single market would have been up and running, one or two new members might have come in and we would have been able to see more clearly the future shape of eastern Europe. But the Community decided to start last year and, that done, we in Britain, led by my right hon. Friend the Member for Finchley (Mrs. Thatcher), rightly decided that we would take a full and energetic part in the two conferences.

As Mr. Delors often says, Britain is the only member state in which there is a lively and sometimes passionate debate on Europe. That is normal here. We felt it again yesterday and it is an asset to Europe as a whole, but I also think that the weakness of our debate is that it is sometimes too defensive. We too often represent ourselves as in some way under siege, as if we were concerned only about the pace at which we yield to opinions and interests across the channel which are basically unsatisfactory and hostile. That defensive note is well astray if one looks at some of the main decisions of the Community in recent years, many of which owe a great deal to the debate in Britain and to British proposals.

First, there was the Fontainebleau settlement in 1984 where Britain obtained a rebate and the Community got a fairer means of financing itself. The Community's budgetary system is still far from rational in the way in which it distributes resources, but the most glaring injustice of Britain's unacceptable net contribution was resolved by that agreement. My right hon. Friend the Member for Finchley played it right. She argued, she argued hard, and she signed once she had a good agreement for Britain and for Europe.

Mr. Dennis Skinner (Bolsover)

rose—

Mr. Cryer

rose—

Mr. Hurd

I shall get on a bit before I give way to the hon. Member for Bolsover (Mr. Skinner).

Or take the impetus for the single market through the Single European Act to make the job of selling throughout the Community easier for all businesses in the Community, to increase the choice and the quality available to all the Community's 340 million consumers. Once again, my right hon. Friend the Member for Finchley argued, argued hard, and signed once she had a good agreement.

I am told that there were 29 outstanding issues on the day that my right hon. Friend went to the summit in Luxembourg in 1985. She sorted those issues out—perhaps, I do not know, with a little help from her Foreign Secretary of the day—and the agreement was signed. We are still in the arguing stage before Maastricht, but we hope that the rest will follow and the result will be satisfactory.

The last example was the opening up of the Community to the emerging democracies in central and eastern Europe. That began as soon as the east began to choose democracy in 1989. It is now accepted by everybody that we started with trade and co-operation agreements—limited but important access to Community markets to countries which had overnight lost their biggest market in the Soviet Union—but as democracy and the market economy took hold, more help was needed. My right hon. Friend proposed the association agreements. I pressed for an early completion. We obtained a political commitment to finish negotiations in time for their entry into force in the new year, and those negotiations—with Poland, Hungary and Czechoslovakia—are on course.

I have used those three examples because they are examples of undoubtedly good achievements by the Community which stem from our initiatives, and our persistent pressure, in this country.

Mr. Skinner

I think that we ought to have the full picture before the Foreign Secretary concludes what he has to say about initiatives. The truth is that, although we were indeed promised barrel loads of money back when the last Prime Minister went to negotiate about the money, this country has paid more than £14,000 million to the common market since that date. The United Kingdom taxpayer has been handing over money to the tune of £18 a week for every family in Britain to prop up the discredited common agriculture policy. Let us have the full story, not just part of it.

Mr. Hurd

That is the hon. Gentleman's speech. What his party's Front-Bench spokesmen propose would increase the burden substantially, while the actions of my right hon. Friend the Member for Finchley would lighten it substantially. The hon. Gentleman's intervention has proved my point.

The Leader of the Opposition described us as being stuck in the defensive mud. I think that I have proved that that is not true, but I fear that something similar can be said about the amazing speech that the right hon. Gentleman made yesterday. At times, it seemed as though Conservative Members were pouring salvoes into a grievously stricken vessel. Listening to the right hon. Gentleman, I came to the conclusion that we would never hear him make a good speech about Europe, partly because he finds the subject matter confusing—I do not criticise him for that; I often share the feeling—but mainly because he is fatally weighed down by his own past. The vessel is waterlogged before it even leaves the harbour.

Labour has changed its policy on Europe seven times in recent years. It might have been expected that, according to the rules of mere chance, Labour Members would light on some good arguments at some stage. Not at all: they are consistent only in that all their arguments are wrong.

When the Community was anathema to Labour its most attractive facets were the ones that it attacked and detested, such as the commitment to freer trade and competition. Three years ago, the right hon. Member for Manchester, Gorton (Mr. Kaufman) said that the Single European Act was a breathtaking reduction in British sovereignty which the Labour party fought tooth and nail to prevent. Today, he is about to call for a breathtaking reduction in British sovereignty which the Labour party will fight tooth and nail to surrender.

What attract both the right hon. Member for Gorton and the Leader of the Opposition, now that they have learnt to love the Community, are precisely the aspects of some Commissioners' instincts that are the most unlovable and the most dangerous for Britain—the itch to intervene in industry, the itch to regulate at the expense of jobs and the itch to impose worker representatives on company boards. The Labour party rejected the Community for the wrong reasons, and now embraces it for the wrong reasons. That is why Labour is wholly unconvincing on the subject—incredible, even—both at home and abroad.

Mr. Tam Dalyell (Linlithgow)

What is the Foreign Secretary going to do about my itch to bring about a solution to the problem of RECHAR additionality?

Mr. Hurd

I knew that the hon. Gentleman would raise that point, and I am therefore particularly glad that my hon. Friend the Financial Secretary to the Treasury dealt with it at length in his winding-up speech last night. My hon. Friend advised the hon. Gentleman—particularly as a Scottish Member—to address himself to Commissioner Milian, and to try to get him to change his indefensible policy.

Mr. Andrew Faulds (Warley, East)

Will the Foreign Secretary give way?

Mr. Hurd

I would rather get on. The hon. Gentleman has already had a go this afternoon.

While I am being a tiny bit controversial, I should like to add a word on the proposals for a referendum simply to underline the answer given earlier by my right hon. Friend the Prime Minister. Naturally, there have often been arguments in the House about referendums. I am instinctively against them. In our parliamentary democracy, the line of democratic accountability runs from the Government to the House and from the House to those who send us here. If we take ourselves out of that line because the decisions are particularly important or difficult, it seems that we are dodging part of our responsibility.

I respect the counter-argument, although I disagree with those who say that a referendum should be part of our constitution. Those, such as Dicey, who favour that argue consistently that it should be a considered change and that there is no case for introducing a referendum because of a particular issue.

Nowhere has the case against introducing a referendum on a particular issue been argued with more energy than in the House on 11 March 1975 by my right hon. Friend the Member for Finchley. She led us into the Lobby against Harold Wilson's device of a referendum on Europe. In that speech, she quite correctly said that Dicey could he used on both sides of the argument. She also quoted Lord Attlee's saying that the referendum was a device of "demagogues and dictators". I am just a little sad that my right hon. Friend seems to have become a shade wobbly on the subject since then.

Mr. Norman Tebbit (Chingford)

Does not my right hon. Friend understand that, at the time of the discussions on whether we should enter the European Community, it was possible for an elector to vote for a party that had a chance of forming a Government which would reject the proposition or a Government that would accept it? Does not my right hon. Friend understand that at the next general election the voter who wishes to vote against the proposed treaties will not be able to find a party to vote for that has a remote hope of forming a Government?

Mr. Hurd

I do not think that my right hon. Friend is historically correct. In 1975, the leaders of all parties were in favour of a yes vote. Therefore, the position is not as my right hon. Friend the Member for Chingford (Mr. Tebbit) described it.

I am not dismissing the argument, because it is a serious argument that has been suggested seriously. As I have said, I believe that in a parliamentary democracy the line of accountability runs as I have described it. It runs through us and we are responsible to people who can, rightly, throw us out if we pursue policies with which they disagree. However mighty, parties have to pay careful attention to that.

Mr. Ivan Lawrence (Burton)

Will my right hon. Friend accept that since we have already had a referendum on the European Community and referendums on devolution, referendums are now part of the British constitution?

Mr. Hurd

I may be wrong, but I suspect that my hon. and learned Friend the Member for Burton (Mr. Lawrence) may have joined me in voting against the idea of referendums on those matters. For the reasons that I have given, I do not accept that they are part of our constitution. I do not think that it is the right way to proceed in a parliamentary democracy.

We shall face decisions and tough choices at Maastricht. Part of the value of the debate is the chance that it gives to send a signal—I hope a clear signal—of the chief concerns of the British Parliament as we all enter the final stages of this negotiation.

We want to take advantage of the negotiations, not defensively, but to press the Community down the path that we think most sensible. As my right hon. Friend the Prime Minister said, that means putting ourselves at the heart of the Community, persuading different partners on different issues and using a style and a language that make it possible to persuade others of the value of our ideas for the future of Europe. I want to illustrate that with three principles that we regard as necessary for the Community and on which I believe the House will agree. We want to ensure the rule of law and a level playing field, we want to strengthen Europe's voice worldwide and we want an open and liberal Community.

I want first to consider the proper application of Community law. When we agree in this country to do something, we stick by that agreement. When the Community agrees new legislation, we have procedures in this country which turn that legislation quickly into British law and our Government and courts enforce it. One of the main criticisms of the Community often heard in the House, and one that I have heard in my constituency, is that this country acts in that way, but others do not.

Our record in obeying our legal commitments is second to none. The most recent figures released by the Commission show only one European Court of Justice judgment outstanding against us. In delivering a recent judgment, the court referred to Britain's exemplary conduct in complying with EC legislation. We would regard it as progress if others began to compete with our record. Some lag far behind—12 for Germany, 13 for Belgium and 37 for Italy.

At present, the only sanction against a member state that fails to comply with a judgment from the European Court of Justice is to bring that state before the court again. The present draft treaty will give substance to that second appearance by allowing the court to impose a fine on any member state found not to have taken the necessary measures to comply with its earlier judgment. That was our proposal and it is accepted. It will give the court the teeth that it needs to ensure compliance, and none too soon.

Mr. Denzil Davies (Llanelli)

That is an important point and according to a recent judgment, individuals may now be able to sue Governments who fail to carry out directives. What would happen if the House genuinely voted not to accept a directive? Would the British Government then be fined?

Mr. Hurd

A judgment was given against the Italians a few days ago, but I have not yet had an opportunity to study it.

Mr. Nicholas Budgen (Wolverhampton, South-West)

Do not all supranational bodies of an incipiently federal nature have some form of power to enforce the of Neural decisions of the group, whether through an international police force or international army? There is no suggestion that the Community could ever use force to enforce its decisions against a member state.

Mr. Hurd

That is why the proposal that I have just outlined is important. It gives the court the power to fine for the first time. If my hon. Friend is suggesting a corps of Euro Commissioners to enforce that, that would be a new and interesting suggestion, but I am not sure whether he is suggesting that.

We must also strengthen the protection of the citizen. Chancellor Kohl is quite right to argue, as he did at the last European summit, that the European citizen needs better protection against the international criminal, the Mafia, the drug trafficker and the terrorist. When I was Home Secretary, we proposed a European drugs intelligence unit, and that is now being set up. The German Chancellor wanted to go further and establish a Europol. As my right hon. Friend the Prime Minister said yesterday, we agree with that and we will support him. However, there is no need to impose a Community structure on that European work among police forces and agencies. It is important to concentrate on the substance of the matter, which is the protection of the citizen, rather than on the procedure and jurisdiction.

Sir Teddy Taylor (Southend, East)

Will my right hon. Friend give way?

Mr. Hurd

I promise to give way to my hon. Friend later.

One of the most difficult problems that Europe has to cope with is the increase in asylum seekers. In order to protect the sysem and to safeguard genuine refugees, we must prevent abuse of the system—hence my right hon. Friend the Home Secretary's Asylum Bill. In recent years. there has been an increase in such abuse. When an applicant fails in one country, he crosses a frontier and tries again. Last year, intergovernmentally—with agreement between Governments—we agreed the Dublin convention to put an end to that, but we must do more.

The 1951 United Nations convention was not written and ratified to protect the opportunists. The problem is a European problem. We want to see the Twelve better equipped to respond, with better co-ordination, but not central direction.

All that comes within the work of the Trevi group, in which my right hon. Friend the Home Secretary joins. The work of that group shows that intergovernmental co-operation is no less effective and no less European for being outside the framework of the treaty of Rome—outside the jurisdiction of the European Court. The Community—the Commission—does not need competence in order for an initiative to work.

Let us concentrate on the substance. I believe that police forces work best together when they work directly together. In any case, given our differing legal traditions and judicial systems, the case is simply not made for generalised supranational enforcement. Member states need to remain responsible for law and order on their territory. It is certainly right for there to be more intense international co-operation. We have a long way to go before we can be sure that that is adequate.

Sir Teddy Taylor

As my right hon. Friend the Foreign Secretary referred to citizenship, will he say clearly whether the Government support the proposal on page 15 of the Dutch draft article A? It proposes that European union citizenship is hereby established"? It would help the House if the Government would make it clear whether they support or do not support the establishment of European union citizenship for all member states.

Mr. Hurd

It is in addition to, and support does not in any way detract from, British citizenship. The only proposals are ones on which I gave evidence to the Select Committee the other day and which relate to the right of EC citizens in local and European elections, but not in national elections.

Mr. Michael Shersby (Uxbridge)

My right hon. Friend will be aware of the views of some members of the European Parliament that Europol and the work of the Trevi group could be scrutinised by that body. Does my right hon. Friend agree, however, that they are adequately scrutinised by the Select Committees of the House and that that is the right place for them to be scrutinised and for their work to be reported to the House?

Mr. Hurd

Yes, I entirely agree with my hon. Friend. The point I am trying to make in this part of my speech and, indeed, in our negotiations is that it is perfectly possible and often better for that kind of European working together to be based on co-operation between Governments, and therefore based on responsibility to national Parliaments, rather than under the structure of the treaty of Rome. The same principle applies to the strengthening of European foreign policy. We hope that there will be agreement about that at Maastricht.

Already, the practice in the Community goes beyond the co-ordination envisaged and enshrined in the Single European Act. We often commit ourselves—not because of any legal obligation but because of common sense—to joint action in many matters because it makes sense to put the combined weight of Europe behind our shared objectives. Once we have agreed on that in a particular subject, we honour the commitments that we have decided.

There is great advantage for us in that system and in making sure that our partners do the same. There is positive advantage in securing obligations on our partners in cases where we have decided unanimously—by consensus—to work together. That is the essence of the proposal on the table.

There are no grand schemes to do away with national initiatives, and there is no attempt to cast aside the national interest in this sphere, in the hope that an undefined European interest can take its place.

No one, for example, is proposing a system that would prevent Britain from liberating the Falklands, or Belgium and France from sending paratroops to Zaire to rescue their fellow citizens. No one is proposing that any substantial decision on common foreign and security policy should he taken except unanimously. Our aim is a common foreign and security policy on issues where we find that we agree unanimously, always allowing for national freedom of action in other matters.

No one is attempting to foist a foreign policy on us. The principle of joint action decided by unanimity is accepted. What is proposed—this was discussed yesterday by my right hon. Friend the Member for Finchley and by the right hon. Member for Plymouth, Devonport (Dr. Owen) —is that secondary decisions—decisions to implement measures decided unanimously—might be taken by majority voting, to speed things up.

We are not persuaded that the distinction between the original decision, which everyone agrees must be taken unanimously, and the implementing measures can be made to stick. [Interruption.] My hon. Friend the Member for Southend, East (Sir T. Taylor) criticised a proposal, and I am trying to answer the point that he raised.

I endorse the remarks of my right hon. Friend the Prime Minister on that subject yesterday, with which my right hon. Friend the Member for Finchley agreed. He said that there was no satisfactory answer to the question of how one distinguishes between the original measure taken by unanimity and the implementing or secondary measure, adding: The onus must be on those who want to change the existing arrangements to justify that change. Thus far they have not managed to do so."—[Official Report, 20 November 1991; Vol. 199, c. 276.] That is the Government's position, which I explained to our partners when we were negotiating at the Dutch seaside last week.

As to defence, the story is straightforward. My right hon. Friend the Prime Minister spelled it out yesterday. NATO will remain. Europe will not replace or duplicate NATO's arrangements for the defence of Europe. There are, as my right hon. Friend said, still differences on that, but there is also much common ground, and it has increased as a result of the NATO summit a week ago.

Last month, we put forward with the Italians ideas on European defence, proposing that the Western European Union should be vehicle for a European defence identity. That idea is now accepted by our partners. We proposed also ways in which the WEU could be linked to the alliance and to the common foreign and security policy, in order to strengthen Europe's defence capacity within and outside the alliance.

There is not agreement yet on the nature of that policy, and that will be crucial in reaching a general agreement at Maastricht.

Sir Patrick Duffy (Sheffield, Attercliffe)

Yesterday, the Prime Minister confirmed in the House that the Franco-German proposal had suffered a serious rebuff at Rome. Is the Foreign Secretary assured, as a result of further bilaterals with the French, that—even within those parameters that the Prime Minister was largely responsible for drawing up in Rome—the French may not yet return at Maastricht with a further attempt to separate Europe's defence responsibilities from NATO?

Mr. Hurd

I cannot answer that question, but if they do, we shall resist it. The defence principles under which we are operating are absolutely clear. They have been set out several times, including at Rome, by my right hon. Friend the Prime Minister. There are three of them, and I believe that they will serve to reassure the hon. Member for Sheffield, Attercliffe (Sir P. Duffy). First, any common defence policy must be genuinely compatible with NATO. It is not enough simply to say that NATO should be preserved. Any proposals for European forces should not cut across NATO's sole responsibility for the defence of NATO territory.

Secondly, the WEU, which is the instrument of the European defence identity, should be linked in different ways to foreign policy and to the alliance, but be subordinate to neither. My right hon. Friend the Prime Minister emphasised that point yesterday.

Thirdly—this is of particular importance to the United States—European defence co-operation should not marginalise our other allies, or present them with decisions simply to take or to leave. Anyone who knows about such matters—such as the hon. Member for Attercliffe, or my hon. Friend the Member for Southend, East—knows that those points are crucial, and we intend to hold by them.

The third objective of an open and liberal Europe, which I sketched at the beginning of my remarks, is one on which my right hon. and hon. Friends are also wholly at one. To maintain a liberal Europe, we must maintain the free market thrust of existing Community policies—in particular, the preservation of the single market programme, backed by the tough new competition powers, which Sir Leon Brittan is exercising most effectively. If Community competence is to be extended, we must avoid any interventionist tilt.

If we are to maintain an open Europe, we must ensure also that, after Maastricht, the Community maintains and expands a welcoming approach to enlargement. We welcome the prospect of early accession negotiations for Austria and Sweden, which are themselves a powerful reason for concluding the Maastricht conference if we can. I hope that Poland. Hungary, and Czechoslavakia will be in by at least the end of the decade.

Mr. Robin Maxwell-Hyslop (Tiverton)

And Norway?

Mr. Hurd

Norway has not yet made a decision on whether she wants to enter the Community. She held a referendum that went the wrong way, but my hon. Friend is right in thinking that Norway may find an opportunity to reconsider. I do not yet know.

Mr. Michael Grylls (Surrey, North-West)

My right hon. Friend passed rather quickly over the question of the internal market. Will he return to that point for a moment? Many people think that proper enforcement of internal market legislation is of prime importance now. That is what business men want. What concerns me is that the Community appears to he moving on to new programmes before it has successfully completed its existing agenda.

Mr. Hurd

There is a lot of truth in that. That is one reason why I said at the beginning of my remarks that the intergovernmental conference has come too soon. I n two or three years, we shall have completed our work on the single market. I agree that the existing presidency, the next, and the British presidency at the very end of 1992 ought not to forget that the overwhelming need is to complete the single market. I hope that the proposal that I outlined concerning enforcement by the European Court on lagging or non-complying states will help to deal with the problem that my hon. Friend the Member for Surrey, North-West (Mr. Grylls) mentioned.

As to enlargement, Britain benefited after some delay from the fact that the European Community is bound by the treaty of Rome to be open to European newcomers, and we are clear that it is our duty and in our real interest to ensure that the Community's benefits are available to all states qualifying for membership.

Dame Elaine Kellett-Bowman (Lancaster)

Will my right hon. Friend give way?

Mr. Hurd

May I move on just a little, and then give way?

Dame Elaine Kellett-Bowman

The point will have gone by then. Earlier, my right hon. Friend dealt comprehensively with what would happen if Governments failed in the European Court of Justice. My hon. Friend the Member for Surrey, North-West (Mr. Grylls) raised the question of the internal market. How does my right hon. Friend propose to stamp out the fraud that disfigures the Common Market?

Mr. Hurd

That is one area in which we should encourage the European Parliament to be more active. My right hon. Friend the Prime Minister spelled that out yesterday, and I will not follow in his footsteps. However, that issue is one on which the European Parliament could quite properly concentrate its energies. The proposals sketched by my right hon. Friend yesterday are designed to equip the European Parliament in that respect.

Our basic concern in the negotiations is flexibility. We want—this intention is reaffirmed in document after document—to transform relations as a whole among member states into a European union. Peoples grow closer when their Governments remove the barriers between them, not when their Governments try to dissolve into one.

I believe that the House is pretty well at one on that point, which is crucial to the negotiations. Some things are best done by the Community. Others are best done by co-operating between Governments. That distinction is crucial. On 30 September, in the negotiations on political union in which I am involved, there was an important debate on that point. If things turn out right, that debate may turn out to have been a turning point.

At that time, 10 member states, coming to the argument with different ideas, all concluded not to proceed with a draft put forward by the Dutch presidency, based on the proposition that all the changes agreed by the intergovernmental conferences should be agreed under one heading only—the Community, the treaty of Rome, and the institutions of the Community. The Dutch presidency wanted to bring it altogether into one pillar. The Dutch made that proposal in good faith, but a big majority of member states agreed on 30 September that that approach would not lead to a result at Maastricht. That may turn out to have been a crucial meeting.

As my right hon. Friend the Prime Minister said, we accept that in some areas action is best taken by the Community under the treaty of Rome. Such matters include the environment, international transport policy and external trade, which is already undertaken by the Community. But in others—

Sir Russell Johnston (Inverness, Nairn and Lochaber)

rose—

Mr. Hurd

No, I want to get on.

In other areas, however, such as foreign policy and law and order issues, it makes more sense to strengthen co-operation between individual Governments, who have to keep the last word for themselves and their Parliaments. The latest draft, based on the Luxembourg draft, preserves that distinction. It is based on the concept of separate pillars—the Community within the treaty of Rome, co-operation and joint action in foreign and security policy, co-operation in interior and justice matters, all under the guidance of the European Council.

The last draft, which one could call the draft of the pillars, is far from perfect. Many right hon. and hon. Members yesterday correctly drew attention to its imperfections. We cannot accept it as it stands, for several important reasons which were spelled out yesterday by my right hon. Friend the Prime Minister. However, its basic structure is right—and that basic structure creates sadness among true federalists. We saw that in a speech made last week by the President of the European Parliament.

The draft now on the table is not a draft that provides for federalism. That point was made eloquently, after I had sketched these notes, by the President of the European Commission yesterday when he criticised the present state of the negotiations, precisely because they were based on the principle that Europe could work well by means of co-operation between Governments. From our point of view, that is a considerable advance, but it is a sadness to him. The question for Maastricht is whether those two points can be reconciled.

Sir Russell Johnston

rose—

Mr. Hurd

I shall give way to the hon. Gentleman, but this must be the last time.

Sir Russell Johnston

As the Foreign Secretary is talking about central Community institutions, does he agree that a big gap in the Government motion is that there is no reference whatsoever to the European Parliament?

Mr. Hurd

The gap was filled by the Prime Minister's speech yesterday, which spelled out in some detail the role that we foresee for the European Parliament in non-legislative areas, such as dealing with fraud, which was mentioned by my hon. Friend the Member for Lancaster (Dame E. Kellett-Bowman), and the possibility of the negative assent procedure and what that should cover.

The remaining reference to a "federal vocation" which the right hon. Member for Bethnal Green and Stepney (Mr. Shore) criticised yesterday, is an attempt to look forward wistfully to a day when we and others might have changed our minds and be ready to accept federal proposals. We do not ask—we cannot ask—any of our partners to renounce their hopes, but we are not ready to say that we will share them either now or in the future. In Europe there are many mansions and many ways of working together.

Mr. Peter Shore (Bethnal Green and Stepney)

rose—

Mr. Hurd

I shall give way to the right hon. Gentleman because I referred to him.

Mr. Shore

Does that mean that the reference in article W-whatever not only to a federal future, but to a new intergovernmental conference in 1996 for that very purpose, will be expunged?

Mr. Hurd

There are no objections to looking at those matters again—[Interruption.] No. What would be objectionable would be to prejudge that now. Therefore, the present draft of the review clause attempts to prejudge it in a wistful way, and we cannot accept that prejudgment.

My right hon. Friend the Prime Minister covered the subject headings of the negotiations in detail yesterday. I should like to finish with my answer to the question that was asked yesterday by several right hon. and hon. Members. Indeed, they answered it themselves. It is the crucial question, "What kind of Europe do we, the British Government, seek?"

I usually see us as the craftsmen rather than the visionaries of Europe. At meeting after meeting, we are usually concerned with the practicalities, with the next step and the next few years, rather than with the larger scene of the indefinite future, but it is right that, from time to time, we should raise our sights and look into that future. Indeed, a debate of this substance should make us all think of the real interests of the constituents whom we are here to serve. I am quite clear that our constituents want to preserve our distinct character as a nation. Whatever the Opposition may now say, we respect and share that view.

Our constituents have other expectations that they expect us to do our best to realise on their behalf. They want a rising standard of living, brought about by investment and through open markets. They might ask, if not tomorrow then the next day, whether that would be compatible with standing aside while others build an economic system without us. This is relevant to the points made yesterday by my right hon. Friend the Prime Minister about economic and monetary union. Our constituents undoubtedly want Britain to have effective influence in the world. I am clear that, in many but not all sectors, that influence is best exerted in concert with our European partners.

As has often been said in such debates—this was expressed well by my right hon. Friend the Member for Guildford (Mr. Howell)—we have to help forward the new democracies of central and eastern Europe. We have to try to rescue the peoples of Yugoslavia—to the extent that we can—from their present chaos and bloodshed. We have to use any influence that is available to us to prevent the peoples of the Soviet Union going down a similar path towards anarchy and bankruptcy. To be honest, we cannot yet be sure how effective we will be in dealing with those problems by acting together, but one thing is absolutely certain—we shall be ineffective or worse if we try to work apart or in rivalry. For heaven's sake, that is one of the lessons of this century, and it has been dinned into me over and over again by the experiences of the past two years.

Our constituents want clean air, clean rivers, forests and seas and they accept—overwhelmingly, I believe—that that means new kinds of work with our neighbours who share that air and that water. Our constituents want better protection against the international criminal. They want order to be introduced into the questions of immigration and asylum. Again, that means more intense work together—not under the treaty or the institutions of the Community, but between Community partners with similar problems.

The question is not whether that European work together is needed for our constituents and their interests, but how it should be organised. That is what the negotiations are or should be about. We are looking for the right way of working together, and that right way will vary from sector to sector and from policy to policy. That is the sensible way of looking at the deepening of the Europe of 12. At the same time, we have to prepare urgently to widen that Europe until it becomes a Europe that welcomes all those in our continent who share our commitment to political democracy and the market economy.

Several right hon. and hon. Members have spent more time at Community meetings and at meetings of political co-operation than I have, but I have done enough to have my share of memories of frustration and exasperation as the discussions go on and on, hour after hour, day after day.

I am no blind worshipper of the Community and the way it works, but I recognise that we are trying to do something that is unique in history. There are no precedents in the history of, say, the United States, Germany, the Soviet Union or Canada that can serve us. We are trying, in the interests of our constituents, to bring together ancient and diverse countries. We are trying to find ways of pooling our efforts and our energies without smothering that diversity.

That is difficult. It has never been done before and there are no pathfinders. It is not at all surprising that progress sometimes seems unsteady and that much argument accompanies that progress. But the need to find that way is compelling—in all the sectors that I have mentioned and in others. If we neglect that need or pretend that it does not exist; if we claim that isolation from that common European work is feasible or profitable for us, in my view we are not defending the interests of our constituents, but deserting them. We are not preserving the strength of this country, but weakening it.

I cannot tell the House—no one can—whether we shall succeed at Maastricht. If too much doctrine is pressed upon us, we shall have to say that we cannot accept it, but I am clear that we are right to make the effort, as has been set out in the motion tabled by my right hon. Friend the Prime Minister. We are right to put forward our arguments with all the persuasive force that we can muster and, with the support of the House tonight, we are right to work strenuously for those arguments to prevail.

4.59 pm

Mr. Gerald Kaufman (Manchester, Gorton)

A debate such as this imposes a special obligation on those who take part in it. We must define not simply the position that the Government should take at Maastricht and not simply the outcome that we want. We must define the Europe that we want to see far beyond Maastricht and how we believe that the Maastricht summit can assist in achieving that Europe.

Let us be clear that we should not think merely of the Europe of the Twelve. Twenty years ago, the European Economic Community was the Six. With the adhesion of the United Kingdom, Denmark and Ireland, it became the Nine. Since then, three further countries have joined. Four more have applied to join, including Sweden and Austria. Their membership, which cannot and should not be long delayed, will surely be followed by that of the remaining European Free Trade Association countries. By the middle of this decade, the European Community may be 18. It could soon afterwards be 20 or more.

The narrow European Economic Community of the 1960s is developing into a wider European Community which could eventually stretch from the Atlantic to the Urals, from the Arctic Circle to the Bosphorus. It will be a wider Europe that is a community of sovereign states not artificially welded into a super-state. It will be a wider Europe that is a social Europe, with the protections of the social charter.

It will be a Europe that recognises that transna tional commerce and industry, with all their powers, are tolerable only if there are effective mechanisms to safeguard employed people—men and women, their families and retired people—who might otherwise have no defence against the demands and requirements of vast corporations operating on a continental scale. That wider European Community will be a different Community from the one that we know today. Even if it is desirable, it will not be possible to hold it together through the tight control of a bureaucratic Commission.

National sovereignty and popular sovereignty in a Europe so wide will require not only more effective national Parliaments but Europewide instruments to express and administer Europe. Such a Europe will require more deeply entrenched and pervasive democracy at both national and European levels. That is what the participants at Maastricht ought to think about and what the House should direct the Government to think about.

Mr. Jonathan Sayeed (Bristol, East)

Will the right hon. Gentleman give way?

Mr. Kaufman

I will give way in a moment.

How can an unprecedented association of nations which come together voluntarily govern itself effectively, responsibly and responsively?

Mr. Sayeed

The right hon. Gentleman will be aware that the agenda of the United Kingdom civil service is set by Ministers of the Crown, whereas the European Commission has the sole right of initiative. In other words, an unelected body decides what it will consider. Does the right hon. Gentleman consider that acceptable or democratic? If not, what would the Opposition do?

Mr. Kaufman

It is neither acceptable nor democratic. In a moment I shall say what the Opposition propose. I am grateful to the hon. Gentleman for intervening on that point.

Mr. Tony Marlow (Northampton, North)

I should be grateful for some clarification. I have been looking at the Opposition amendment. I have had a little difficulty with it. It is probably my fault. There are 31 lines in it, which makes it somewhat longer than the Government motion, which the right hon. Gentleman criticised. The Opposition amendment talks about achieving a single currency as an essential foundation. Does that mean that every Opposition Member who supports the amendment tonight is fully in favour of a single currency?

Mr. Kaufman

If the hon. Gentleman would be good enough to read the amendment carefully, he might conceivably understand it. If he does not understand it, I guarantee that if my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) catches the eye of the Chair, even the hon. Gentleman will be fully educated on the matter.

We say that a wider Europe must be a more democratic Europe. It must be more democratic at every level. On agreed and worked-out policies, one country in the ministerial Council should not be able to hold up the progress of the European Community as a whole.

Mr. Tony Favell (Stockport)

Will the right hon. Gentleman give way?

Mr. Kaufman

I will proceed for a moment. If I am not held up too much, I will gladly give way to the hon. Gentleman.

On social and environmental matters, the Labour party believes that there should be qualified majority voting in the ministerial Council, which is composed of a group of men and women already democratically accountable to their national Parliaments.

Mr. Favell

The right hon. Gentleman was a Member of the House in 1975 when the Government, under the leadership of Lord Wilson, recommended a referendum to the people. Indeed, he probably even helped to draft the document "Britain's New Deal in Europe". I believe that at one time he was the Prime Minister's press officer and, indeed, worked in his office. In the document under the heading Will Parliament lose its power?"—

Hon. Members

Reading.

Madam Deputy Speaker (Miss Betty Boothroyd)

Order. The hon. Gentleman is making an intervention. I hope that he will be speedy with it so that we can make progress and that he will not read from the document before him.

Mr. Favell

The document says that no important new policy will be made without the consent of a Minister answerable to the House.

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

The hon. Gentleman is misquoting.

Mr. Favell

I am not misquoting. The Labour party now departs from that. Is not it right that that departure should be put to the people? Why does his party object to a referendum now, when the right hon. Gentleman supported it then?

Mr. Kaufman

The hon. Gentleman's memory of history is wrong. At that time I was a Member of Parliament. I was a junior Minister and I took advantage of the dispensation which enabled me to vote no in that referendum. But, unlike the hon. Gentleman, I accepted the outcome of the referendum. I voted and expressed my view. The result went against the way in which I cast my vote. As a democrat, I accepted the outcome of the referendum and I see no reason for another.

Mr. Budgen

Will the right hon. Gentleman give way?

Mr. Kaufman

No.

The scope of the ministerial Council should be extended. That is why the Labour party believes that common foreign and security policies should be developed. On an ad hoc basis, the Community is already feeling its way towards such common policies. There has been a common approach to South Africa, the middle east and the Salman Rushdie death sentence. Those are contributions towards a common foreign policy. Admirable, if so far unavailing, efforts have been made to end the conflict in Yugoslavia. That approach is an element in the development of a common security policy. It will take some time to work out comprehensive and coherent common foreign and security policies. At that stage, we can consider qualified majority voting on those matters.

The scope of the ministerial Council should not go beyond what is appropriate to the role of the Community and should not usurp the satisfactory work of organisations which already exist. That is why the Labour party opposes a defence role for the Community. First, Europe's defence needs are already satisfactorily met by the North Atlantic Treaty Organisation, which is inherently more effective than any alternative because it includes the transatlantic nations. Secondly, some members of the Community and some applicants—Ireland and Sweden, for example—would find difficulty in being members of a Community with a defence role. Thirdly, a really effective and comprehensive defence structure for the European Community would be viable outside NATO only if it inevitably involved aspirations for a nuclear capacity. The Labour party is opposed absolutely to the creation of a new nuclear power, especially one with 12 or more fingers on the nuclear trigger.

In response to the intervention by the hon. Member for Bristol, East (Mr. Sayeed), a more democratic Europe cannot continue to accommodate a non-democratic Commission. That is why we want to make the Commission democratically accountable. Since it cannot be accountable to national Parliaments, it ought to be accountable to the European Parliament. It might be appropriate to give the European Parliament rights of confirmation for Commissioners, and it could be worth considering giving the Parliament rights of recall of Commissioners as well.

The European Parliament should be given further additional powers: powers to initiate proposals for legislation, which would be considered by the Commission and the Council of Ministers; powers of second reading on social and environmental decisions by the Council of Ministers.

Mr. David Ashby (Leicestershire, North-West)

rose—

Mr. Kaufman

I shall not give way, as I have already done so several times. Mr. Speaker has announced how many hon. Members wish to take part in the debate.

The proposals for the Council of Ministers, the Commission and the Parliament should be part of the negotiating brief for United Kingdom Ministers at Maastricht, as should proposals on economic and monetary union, to which my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) hopes to refer later in the debate. Not only are the proposals right in themselves, but many of them might win support at Maastricht. A positive United Kingdom approach—good for Britain and good for Europe—could win us partners and allies at Maastricht who could support Britain's positive proposals, could associate themselves with us on proposals by others that we oppose, and could be counterparts in the give and take involved in any negotiation.

Mr. William Cash (Stafford)

rose—

Mr. Kaufman

I shall give way because I need a drink of water.

Mr. Cash

The right hon. Gentleman said that, when he went to the European Parliament in 1987, he was, to say the least, a reluctant European. Could he explain how, in the following five or six years, he has made such a massive transformation? Is it because he is hoping that there will be a socialist Europe?

Mr. Kaufman

It is because I accept democratic change. Whether or not I like Acts passed by this Parliament, if it passes them I accept them. The right hon. Member for Finchley (Mrs. Thatcher), in her wisdom, guillotined the Single European Act through the House and it became an Act of Parliament. I accept the law. That is the reason why I have accepted the changes that have taken place.

Our charge against the Government is that they have next to no positive proposals for Maastricht on the subjects that I have mentioned or on any other subjects. Yesterday, the Prime Minister started his speech by announcing that he would specify "what we can accept" at Maastricht. That is not what the United Kingdom will propose, with the intention of winning acceptance from others, but what we will accept, as proposed by others. He then went on to provide a long list, not of items that we could accept, but of items that we could not accept. His speech was a litany of "we will not accept" and "we will not agree". He used that phraseology over and over again.

The hon. Member for Ruislip-Northwood (Mr. Wilkinson) intervened in the Prime Minister's speech and asked him to specify the Government's aims and objectives at Maastricht. The Prime Minister evaded the question and never replied to it. We still do not know what the Government's aims and objectives at Maastricht are.

What about the word "federal"? At Luxembourg in June, the Foreign Secretary got upset when that word was mooted. He said: We've got real problems with this. Last month he changed his attitude. In his offhand way he dismissed "federal" as "only a word". Recently it seems to have been bringing him out in anxiety attacks once again. He skirted warily around it today. He should have seen the face of his right hon. Friend the Member for Finchley when he evaded answering a question about the word "federal". After three ministerial speeches, we still do not know whether the Government would veto a treaty at Maastricht that contained the word "federal". I take it that the Foreign Secretary will give me an answer to that question.

Mr. Hurd

That question has been answered three days running. It was certainly answered by me to the Select Committee, as the right hon. Gentleman, who attended the Committee, will know. It was answered by the Prime Minister yesterday and by me again today. [HON. MEMBERS: "What is the answer?"] We could not accept a treaty that contained either a commitment at the beginning to a federal vocation or a review clause at the end—-this is the question I have just answered—which implied or stated that the result of the review must be a movement towards federalism. It is perfectly clear.

Mr. Kaufman

We still have not heard from the right hon. Gentleman—

Mr. Ian Bruce (Dorset, South)

rose—

Mr. Kaufman

No, for the moment they are the Government and they will be at Maastricht, so let us find out what they will do in three weeks.

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

Will the right hon. Gentleman give way?

Mr. Kaufman

No, I am dealing with the Foreign Secretary, who gave me a circumlocutory reply to a question that I did not ask him. Will the Government veto a draft treaty—[HON. MEMBERS: "Would you?"] This is the Government for the time being. At Maastricht, will the Government veto a treaty that contains the word "federal", yes or no?

Mr. Hurd

We have said yes three times now. The word occurs twice in the present draft and I have explained in some detail why it is not acceptable on either occasion. What would the right hon. Gentleman do in those circumstances? It seemed to be implicit in the speech by the Leader of the Opposition yesterday that the federal vocation is no obstacle to him. Is that true?

Mr. Kaufman

I am not talking about the phrase, "federal vocation". What I asked the right hon. Gentleman—and what he has still not answered—is, would the Government veto a treaty with the word "federal" in it?

Mr. Garel-Jones

Will the right hon. Gentleman give way?

Mr. Kaufman

No.

Mr. Garel-Jones

rose—

Mr. Kaufman

No—not the office boy. There have been three interventions—

Several Hon. Members

Give way.

Madam Deputy Speaker

Order.

Mr. Kaufman

There have been three interventions on this matter but the Foreign Secretary has not said yes or no to the question.

Mr. Garel-Jones

rose—

Mr. Kaufman

No.

Mrs. Edwina Currie (Derbyshire, South)

On a point of order, Madam Deputy Speaker. Surely we should check the microphone system in the House. I do not know what the right hon. Member for Manchester, Gorton (Mr. Kaufman) heard, but I distinctly heard the Foreign Secretary answer yes on several occasions.

Madam Deputy Speaker

That is barely a point of order for me. I can hear most people in the House, including the hon. Lady.

Mr. Kaufman

rose—

Mr. Garel-Jones

rose—

Mr. Kaufman

rose—

Several Hon. Members

Give way.

Mr. Kaufman

If the Foreign Secretary is ready to say that he will veto such a treaty, I shall give way to let him do so. The Minister of State is not yet the Foreign Secretary and there is little time left for him to become Foreign Secretary.

Then there is the problem of qualified majority voting on foreign policy issues. In June, the Foreign Secretary told the House that the Government opposed all extensions of qualified majority voting. In his speech in the debate on the Gracious Speech three weeks ago, he changed his tune. He spoke about not liking majority voting on foreign policy "matters of substance" and on "substantial decisions" in foreign policy. He did not completely rule out qualified majority voting on foreign policy issues.

The right hon. Member for Finchley was right yesterday to express concern from her point of view that the Foreign Secretary was a bit wobbly on majority voting. After his speech today, we still do not know where he stands on that matter—not on the draft to which he was referring but on the principle of extended majority voting.

It is ironic that the right hon. Member for Finchley was pitched out of office a year ago today as a direct consequence of that "no, no, no" with which she infuriated the right hon. and learned Member for Surrey, East (Sir G. Howe). Yet under her successor, the Government have not advanced beyond no, no, no. The negative approach of a year ago is unchanged. The Government have made little progress beyond the position that the right hon. Lady set out.

But there is one basic difference. The right hon. Lady said no, no, no out of firm conviction. She said it because she believed it. She challenged everyone—the Community, Parliament and her own party. It may have been war, but in a way it was magnificent. The present Prime Minister says no, no, no, not out of conviction or courage. He says it not because, like the right hon. Lady, he challenges his party, but because he is afraid of his party—and one could never accuse the right hon. Lady of that.

The motion that the Prime Minister has proposed for decision by the House tonight is intended to be so meaningless that any Tory Member can vote for it while interpreting it to suit himself or herself. The right hon. Member for Chingford (Mr. Tebbit) can vote for it because he is opposed to a single currency, and the right hon. Member for Old Bexley and Sidcup (Mr. Heath) can vote for it while advocating a single currency.

The right hon. Member for Blaby (Mr. Lawson) can vote for it while being reluctant to concede any more sovereignty to the Community, and the right hon. and learned Member for Surrey, East can vote for it because he is in favour of conceding more sovereignty to the Community. It is ironic that those two Members were allies in forcing the Madrid conditions on the exchange rate mechanism on the right hon. Lady and they are now at odds over further developments in the Community, but they can still both vote for this meaningless motion.

Sir Teddy Taylor

rose—

Mr. Kaufman

The chairman of the Conservative party can vote for the motion because he is opposed to a referendum, and the right hon. Lady can vote for it because she advocates a referendum. At Question Time today, the Prime Minister, in ruling out a referendum, boasted that the right hon. Lady in her speech yesterday had premised him her full support. After what he has now said about a referendum, he had better watch out. Not only may she offer him her full support, she may say he is unassailable.

The right hon. and learned Member for Surrey, East said yesterday that he would vote for the Government because the Prime Minister was clearly determined to follow a path that the right hon. and learned Gentleman favoured. The right hon. Member for Finchley said yesterday that she would vote for the Government because they were following a path that she favoured—in precisely the opposite direction.

This is not a clear path to Maastricht that the Prime Minister has set out. It is a maze in which Tory Members wander blindly, from time to time colliding with each other. When tonight those Tory MPs have all voted for the Prime Minister's motion—for different and often conflicting reasons—the Prime Minister will claim that his motion has given him a mandate for Maastricht, when he stands for nothing at all.

It is as though the Prime Minister is trying to paint a canvas in the style of Georges Seurat, if I may be forgiven for referring to a continental artist. It will be recalled that Seurat was a pointillist who filled his canvas with dots. When he stood back, he could see that he had created a superb landscape with figures. The Prime Minister fills his canvas with dots all right, but when he stands back, all he sees is a mass of dots.

The Prime Minister dare not present a clear picture, because such a picture would annoy some group or other in the Tory party. He cannot look our European partners in the face, because he is preoccupied with looking over his shoulder at his own party. His negotiation at Maastricht is not with fellow members of the Community but with fellow members of the Tory party. The deal he seeks to make at Maastricht is not with the Twelve but with the 1922 Committee.

The right. hon. Member for Blaby blurted out the truth on television on Sunday when he said that what the Government were aiming for was what the Conservative party would accept.

Mr. Nigel Lawson (Blaby)

Characteristically, the right hon. Gentleman has totally misquoted what I said. I said I was confident that the Government would come back from Maastricht with something that was acceptable to the Conservative party. [Interruption.]

Mr. Kaufman

Not only has the right hon. Gentleman made an idiot of himself by that intervention, but he has achieved the interesting feat of misquoting himself. The words I quoted— what the Conservative party would accept —come not only from the transcript of "On the Record" but from even holier writ, The Daily Telegraph, on Monday.

The Prime Minister claims that he wants to be at the heart of Europe, but his real objective is a bypass operation. The Prime Minister will brandish his meaningless majority after the Division tonight and claim it as a mandate for Maastricht. But this is a Prime Minister uniquely without a mandate. He is Prime Minister not by the vote of the people but by the votes of 185 Tory Members. I saw yesterday how the Prime Minister winced when the right hon. Member for Finchley said: our authority comes from the ballot box."—[Official Report, 20 November 1991, Vol. 199, c. 291.] Not only have the people never voted for the Prime Minister at the ballot box: they have consistently and persistently voted against him at the ballot box. The Prime Minister has the worst by-election record in British political history. He is the only Prime Minister in the history of the United Kingdom to have lost every by-election during the period of his premiership. Even the right hon. Member for Finchley did better than that.

The Prime Minister goes to Maastricht without a mandate or an agenda. He goes there talking about paper sovereignty, when the country's real sovereignty is increasingly dependent on the actions of our European Community partners. He proclaims a determination to defend our national currency. Yesterday, the Chancellor of the Exchequer had the cheek to intervene in the speech of my right hon. Friend the Leader of the Opposition on the national currency, when this week has shown that the Prime Minister and the Chancellor are powerless to defend our national currency against movements in the markets in Community countries and elsewhere.

Mr. Anthony Coombs (Wyre Forest)

Will the right hon. Gentleman give way?

Mr. Kaufman

No, I shall not give way.

Yesterday's Financial Times reported: An additional factor deterring international investors from becoming involved in UK markets was the perceived disarray in the Conservative party ahead of today's two day Commons debate on Europe". Successive Chancellors have had to acknowledge that, too often, the parity of the pound and the level of interest rates are determined not in the Treasury or even the Bank of England, but in the Bundesbank. What kind of sovereignty is that?

That is the reality of Europe. We in Europe are all increasingly interdependent, and our sovereignty depends not on empty phrases and petty posturing hut on recognition of that interdependent relationship and the part that we play in it. To fail to play a positive part in the deliberations at Maastricht is to surrender Britain's true interests. It is to let others make the decisions while pretending that we are free to stand apart, unscathed and unaffected, when every decision taken without our full participation will affect our country's future, perhaps for generations.

Because the Prime Minister did not have the backbone to call a general election this month, Labour will be absent from Maastricht—[Interruption.] That is the only reason. The Prime Minister did not call an election on 7 November, because he knew that he would lose it then. Some time in the first six months of next year, an election must take place. Even this dithering Prime Minister cannot evade it. A Labour Government will be able, therefore, to play some part in the meetings in Portugal between January and June and they will take the chair at the meetings in the United Kingdom from 1 July onwards. By fighting for the ideal of a strong Britain in a wider, deeper and more democratic European Community, that Labour Government will be fighting for a true and meaningful British sovereignty.

5.34 pm

Mr. Edward Heath (Old Bexley and Sidcup)

The House may think that my views are already well known. If so, it enables me to speak briefly in this great debate and it will avoid the interventions of so many of those who are opposed to me; they already know my views.

When the Prime Minister said, on his appointment, that he wanted Britain to be at the heart of Europe, my heart leaped with joy. That joy was echoed right across Europe. Other European countries said that the new British Government would be positive and co-operative and would put forward proposals for bringing about the completion of the European Community, for which they had been working for the past 40 years. I believe that that is the Prime Minister's intention, which is why I shall strongly support him tonight. I also believe that at the conference he will use all his persuasiveness to enable the European Community to move ahead.

I have no desire to smear or jeer at the Opposition and the fact that they have now declared themselves fully in support of the Community, because that is a matter of intense pleasure to me. They recognise full well that, if that had happened in the 1950s, 1960s or 1970s, the story of this country in Europe and of the Community would have been different. However, that is history. Today we must welcome the fact that the three major parties in this country all agree about the importance of the Community.

I regard it from the point of view of the importance to our people, our country and Europe as a whole. I confess that I sometimes wonder whether the thought of Europe as a whole is in some people's minds, particularly when we discuss our friends in the Community and their actions. Some of them do not always stick to the regulations as we should like. Although we are better than most, we are not entirely immune to that accusation. No development is helped by accusations and counter accusations between members of the Community.

I welcome what the Prime Minister said in his speech. He began by referring back to the summit in Paris in October 1972, when the House had already agreed to our membership but before we had become members. That was to happen on 1 January 1973. He pointed out, quite rightly, that at that summit the Heads of Government had all committed themselves to the future of the Community. He quoted in particular the text of the communiqué on the question of economic and monetary union, where we all affirmed the determination of the Member States of the enlarged European Communities irreversibly to achieve the economic and monetary Union". That was 20 years ago, and what is more, we set the way to achieve it.

The subjects with which we dealt at that time where widespread. We dealt not only with economic and monetary union, but with regional policy. The British were responsible for introducing regional policy, which has been of great benefit to the regions of this country. I am pleased that the Secretary of State for Trade and Industry has now announced that the Government are to have a strategy for industry, which is a suitable vehicle for regional development.

We also dealt with social policy because we believed strongly in it. Herr Brandt wished to include in the communiqué the fact that trade union members of boards would be permitted because it had been so successful in his country, which was already the most successful economy in Europe. We went on to industrial, scientific and technological policy and also dealt with environmental policy. In 1972 at the Stockholm conference, Britain was to take the lead on environmental policy. The then Secretary of State for the Environment led that conference on the protection of the environment.

There was then the question of energy policy and external relations. The communique concluded—this is the point that I wished to make—with the reinforcement of institutions. The final paragraph said: The Heads of State or Government, having set themselves the major objective of transforming, before the end of the present decade"— that was the 1970s— and with the fullest respect for the Treaties already signed, the whole complex of the relations of Member States into a European Union". It was a question not of economic, political or monetary union but of complete European union. That has been the objective of the other countries in the Community ever since.

Mr. Tebbit

I particularly want to help my right hon. Friend recollect what he said in the House on 25 February 1970, which was: What is more, those members of the Community who want a federal system, but who know the views of Her Majesty's Government and the Opposition parties here are prepared to forgo their federal desires so that Britain should be a member and take part in political consultation and co-ordination with them."—[Official Report, 25 February 1970; Vol. 796, c. 1221.] If my right hon. Friend was so keen for the members to forgo their federal destination, why is he now so keen that they should take it up?

Mr. Heath

I shall deal with the question of federalism because I know that it is an obsession of my right hon. Friend.

I welcomed what my right hon. Friend the Prime Minister had to say yesterday. He was right to emphasise that we have had 20 years to examine the issues and make a complete decision on them.

With regard to economic and monetary union, I wish to address the issue of a single currency. My right hon. Friend the former Prime Minister signed the treaty for the single market. It must have been quite clear—any economist could have stated it at the time—that if we had a single market with all the obstructions and difficulties removed, there was no alternative to a single currency. That was quite plain to see at the time.

Mr. Budgen

Rubbish.

Mr. Heath

I am accustomed to my hon. Friend shouting, "Rubbish"—he does it constantly, but what he says bears no resemblance to the truth or the facts of life. No great economy in the world today has more than a single currency. Let us consider the two greatest—the United States and Japan. Both have single currencies. What is more, we have made various suggestions in the past two to three years for avoiding a single currency, not one of which has stood the test of examination—and they will not do so. Therefore, there is bound to be a single currency, and the remaining question relates to the way in which and the time when that single currency is to be introduced.

My right hon. Friend the Prime Minister has said that he will not be bullied or forced into accepting a single currency. He has left the position open so that he is able to accept it willingly. I am glad that he has done so, and the sooner the time comes for us to accept that single currency, the better. One factor that reassures me at present is that various of my friends are talking about a time schedule, which will not exist. It will be shortened at every stage as we make developments in the Community.

It is in the interests of our businesses to have a single currency. Imagine what would happen if the rest of the Community had a single currency, and we were the only country without it. What would happen to our business men and our investment? The consequences would be unthinkable. Our business men are frank and recognise that if they are to take the opportunities that the Community offers, they must be part of that single currency and its machinery.

How can we expect to make the City of London the financial centre of the Community if we are outside a single currency? It would just not be feasible. How can we expect the City of London to be the centre of insurance and other activities in the Community if this country is outside the Community's currency? That would be unimaginable. Those are the facts of life with which we must deal.

Mr. Budgen

Will my right hon. Friend give way?

Mr. Heath

No. Well, if my hon. Friend will refrain from describing my simple utterances as "rubbish", I shall give way.

Mr. Budgen

Perhaps my sedentary remarks were somewhat rude.

Will my right hon. Friend explain how it is that the Japanese financial markets are so successful when they trade in other currencies, and how they find it possible to trade in other countries so successfully?

Mr. Heath

Many foreign exchanges trade in other currencies, but that is not what happens in manufacturing businesses, which have to use the people who trade in the currencies. It would be impossible for London to be the financial centre of a Community if London did not share that single currency.

It is held up that we cannot devote any more sovereignty to such issues. We have pooled sovereignty in the Community. We all knew that in doing so we would have a say over other people's sovereignty. Sometimes a majority decision and sometimes a unanimous one gave us a say in other countries' sovereignty. That process will continue to develop, and rightly so, because it is of benefit to the people of this country. It will help our country, our nation and Europe as whole.

When we joined the North Atlantic Treaty Organisation, of which we heard much earlier today, we gave it the whole of our sovereignty in the case of war. The words in the NATO treaty made it clear that an attack on one was an attack on all. It did not state that a royal commission should be set up to examine the position or that we should have a chat about co-operation. We made a firm commitment that, all the time that we were in NATO, an attack on one would be an attack on all. There cannot be a greater contribution of sovereignty than that, and the Community is not asking for anything like that at present. Let us not continue the perpetual attack on sovereignty as the reason why we should not develop the Community.

I am strongly in favour of more democracy in the Community. I do not agree with the right hon. Member for Manchester, Gorton (Mr. Kaufman) that it is a bureaucratic Brussels—the common cry. We all have bureaucracies, and Brussels happens to have a more competent bureaucracy than most others in the world. We make a considerable contribution to it, which is why it is so successful in making proposals?

Mr. Phillip Oppenheim (Amber Valley)

Will my right hon. Friend give way?

Mr. Heath

No.

How could the Community possibly have made the progress that it has in just 40 years unless it had had a central organisation to put forward proposals? I believe that the European Parliament should be given more powers as soon as possible.

I quite understand that some right hon. and hon. Members may hate the idea of another organisation dealing with the affairs of the Community. However, as the Community has the power and we contribute the sovereignty, it follows rightly and naturally that the European Parliament should have those powers. Those who are opposed to it cannot have it both ways. They cannot accuse the Community of being undemo-cratic while refusing to grant any democratic powers to its organisations. That is why democratic development is necessary.

The Government have taken a firm line on the social charter. I strongly support the Prime Minister in what he is doing at the conference. However, I ask the Conservative party to give a second thought to the social charter. Ever since Disraeli, the Conservative party has been proud of what it has done for the social services. I believe that we should continue that development in Europe. What is more, we have said that the other countries must not compete unfairly.

We must not allow that accusation to be levelled at us. They could say that any capitalist can repress the wages of young workers without limitation and accuse us of unfairness. What happens when, by the time workers are 20 or 21 they are sacked so that firms can take on the next generation of young people? We all have constituency interests in the subject. In my constituency I find that older workers are sacked so that companies can take on lower-paid, young workers—that does not constitute a healthy society. The Prime Minister should take another look at the social charter.

With regard to immigration and similar matters, customs duties are being abolished inside the Community. Immigration inside the Community is covered by free movement and it is up to us in the Community to arrive at an arrangement about immigration into it.

There are undoubted problems. We have the problem of those who want to come from Africa and the Asian continent to this country. Our Community partners, especially Italy and France, have the problem of those in Muslim and African countries who want to cross the Mediterranean and enter the Community. We all face such problems, but they can be sorted out jointly by the members of the Community. There is no reason to say that such matters can be left to one side.

Now for the European Free Trade Association. The British created EFTA in an attempt to break up the Community. Neither the Labour Government nor, in their early years, the Conservative Government were prepared to join the Community and in 1958 we set up EFTA with its seven member countries. It did not break up the Community. The Community laughed at us and the only people who suffered were the British, because the smaller member countries said, "We are poor and weak." But they were much richer than we were. Those countries asked us to do this and that for them. I sat through innumerable EFTA meetings at which that was always the theme.

When we went into the Community, we made a good arrangement for the EFTA countries. Denmark wanted to join, as did Norway, but it was defeated on a referendum. Eire engaged in negotiations. Now the EFTA countries want to join the Community, not because it is a free trade area or because they want to turn it into one, but because they see it as a complete Community. The Swedes, the Austrians and the Swiss—they above all—want a complete Community and do not want to see it disintegrate into a purely free trade area of the type that they are leaving.

How can that be done? As I know only too well, negotiations take time and it cannot be done tomorrow. However, after 1992, negotiations can begin and it should be possible for those countries to become full members. That also has a relationship to defence, with which I shall deal in a moment. The Foreign Secretary has rightly said that central European countries should be welcomed when they are ready. That means economically and politically ready. They must be democratic in the fullest sense of the word, and must be able to take their place in what will be a single market by the time they join.

Those are big requirements for people who have been suppressed for 40 or 50 years and who have no idea at the moment of how to run a market economy. Some of them are finding the utmost difficulty in establishing a democratic political society. People who say, "Bring them in tomorrow or the wall of wealth is being used against them," are talking fantastic nonsense. As I have told the House before, it took us 11 years after the end of the second world war—six years of Labour government and five years of Conservative government—to abolish the restrictions that had been set up to carry on the war. I remember that well because there was a blazing row between Harold Macmillan and Anthony Eden about whether it should be done.

After their dictators died, Spain and Portugal took 10 years before they were able to say that they felt ready to join the European Community. If we asked the central European countries to come in today as full members, they would be swept off the face of Europe. There is nothing that we want to buy from them because those countries have all been under Soviet domination. However, they have seen—as the east Germans saw in west Germany—what is available to the rest of us, and they want to buy it.

The President of the United States is not justified in saying, "Do these things in a year and we will help you." It is not feasible for them to be done in a year. British business men who have been to central European countries and those of us who have travelled to most of them and spoken to their leaders know about the utmost difficulty they are having in changing to a new system. However, there will come a time when we should welcome them to the Community.

Mr. Skinner

I am listening carefully to the right hon. Gentleman. I was here on 28 October 1971 for that important debate on Europe and for the vote. At that time about 500,000 people were out of work in Britain and some of us regarded that figure as fairly high. We had gone through a period since the end of the war when unemployment rarely went above 500,000. I have listened to the wonderful story about the Common Market. There are 2.5 million people out of work in Britain and millions are out of work in this nirvana of the Common Market that the right hon. Gentleman describes. Only 5 million people are employed in manufacturing in Britain. There will soon be more working in shops and hotels. Some of that has happened because for the past 12 years we have had a Tory Government whom the right hon. Gentleman has occasionally supported. When I look at the Common Market now I do not see an economic miracle any more. I see trouble with a capital T and mass unemployment.

Mr. Heath

I do not think that the hon. Gentleman would expect me to go into the history of the past 12 years on this occasion; nor can he blame the European Community for the situation. My Government managed to bring unemployment down to just 560,000 despite the policy that had been overdone by Roy Jenkins, now Lord Jenkins of Hillhead, whose financial policy pushed unemployment up well above 1 million.

Mr. Skinner

The right hon. Gentleman is saying that he does not care about the dole queues.

Mr. Heath

I am saying nothing of the sort. The hon. Gentleman knows that throughout my political life I have worked to bring down unemployment. On this occasion, the hon. Gentleman has gone too far.

Defence is now being discussed, and it must also be treated realistically. NATO and those who are responsible for running it now feel that they have empty hands and are understandably looking for a purpose. I say to the Prime Minister and to the Foreign Secretary that NATO is not justified in turning itself into a purely political instrument or in saying that it will extend its breadth to other parts of the world. I am strongly opposed to that, as, I think, are the majority of hon. Members, and it must not be allowed to come about.

Let us examine the European contribution to NATO. My right hon. Friend the Foreign Secretary knows very well what President Kennedy said to me. He may have said it to others. He said that he wanted two tall, strong towers in NATO—an American tower and a European tower. I said, "You have a tall, strong tower and we have a rather wobbly one"—to use the current expression. He said, "That is why I want Britain in the Community and will do everything I can to help you get into it. I shall be as discreet as possible and you know the way to let me know what you want."

That is not anti-NATO. That is the proper basis for NATO. If the United States, a super-power, is one of the pillars, Europe is perfectly entitled to organise its defence to be the second pillar inside NATO. The Americans do not grumble about that. How could they? How do we form the European tower? There is no doubt that over time the Americans will remove more and more of their forces from Europe if the present situation continues. Therefore, we must be prepared to do more to look after our own defence.

The Western European Union is said to be the answer, but it was formed for one purpose—to bring Germany into the family of European nations, and it was successful. After that, it fell into disuse. I resurrected it on 18 April 1962, so that we could have a discussion that the French would not allow in the Community negotiations, then it fell into disuse again. Now, we are trying to make an institution that had another purpose into one that will deal with defence in Europe. That may be the best way to deal with it at the moment, but I do not believe that, after a time, the Community will continue to exist with these outside organisations dotted about it. This will be particularly so as the European Parliament gains more powers and strength.

What is more, one cannot separate defence from the economy, as we can see at the moment. We cannot separate defence from foreign policy, or foreign policy from the economy. Therefore, the time will come when these things will have to form a unity in exactly the same way as the three communities that used to exist are now one Community. These organisations will develop. It is because I believe that this is bound to happen that I am more optimistic than events give me justification for being.

I shall deal now with the suggestion that there should be a referendum.

Mr. Nigel Spearing (Newham, South)

I can now ask the right hon. Gentleman a question that I have wanted to ask him for 20 years. He has described his commitment to broad political union. Did he have a mandate for the vote mentioned by my hon. Friend the Member for Bolsover (Mr. Skinner)? Did the right hon. Member for Finchley (Mrs. Thatcher) have a mandate for the Single European Act? Does the Prime Minister have a mandate for going to Maastricht next week and agreeing to what is in that treaty?

Mr. Heath

I can answer only for myself; I cannot answer for my right hon. Friends. We had a debate in the House over many days in July and over many days when we returned in October, and at the end we had a vote, in which Conservative Members were free to vote as they wished. It was up to the Labour party to decide how it would allow its Members of Parliament to vote. It decided to put on the Whip, but 72 of its Members abandoned it, with the result that there was a majority of 112 in favour.

Every time that the matter was debated, from my opening speech at the first conference in Paris in October 1961, it was made clear that the purpose was to have an ever-closer union to create a European Community. Every single document—I have quoted some already—has made that clear. I believe that we had complete authority from the House to carry on as we did.

Mr. Spearing

Was that an electoral mandate?

Mr. Heath

From the House.

Mr. Spearing

From the country?

Mr. Heath

Yes, because the country elects the House. That is why I want to deal with the referendum. There are those who say that there must be no infringement of sovereignty, but immediately say that we must have a referendum.

My right hon. Friend the Member for Finchley (Mrs. Thatcher) made a dramatic speech in the debate on the referendum in 1975. Most people know that, when the House debated our entry into the Community, the then Mr. Wilson said that he would not tolerate a referendum, and we both agreed about that. At the end of the debate, there was no decision to have a referendum. However, there was a referendum because one of his Cabinet colleagues put pressure on him and he gave way. Even then, it was rightly said to be an exceptional case and not to be followed by any others.

We are now told that it has become part of the constitution, but I am a simple fellow and I was brought up to believe that we do not have a constitution, so I do not see how a referendum can be part of it.

Mr. Robert Adley (Christchurch)

If my memory of those days is clear, the noble Lord Jenkins was Home Secretary in the then Labour Government and utterly refused to present to the House the Bill to allow a referendum. Is it not true that the noble Lord Jenkins, who is still a leading member of the Liberal Democrats, has done a U-turn, with the rest of his party, on this issue?

Mr. Heath

I think so.

I have here a quote from my right hon. Friend the Member for Finchley, who said in the debate on the referendum: It would bind and fetter parliamentary sovereignty in practice."—[Official Report, 11 March 1975; Vol 888, c. 315.] I agree with her entirely. It would, and I see no reason to change my view, or her view, at this moment or in the future. I do not believe in referendums as a means of government.

Mrs. Margaret Thatcher (Finchley)

I know that I inherited that position from my right hon. Friend, and I loyally upheld it. Now, it looks to me as if three parties will be for a single currency and for sacrificing a great deal of the work that it has previously been the right of Parliament to do. How are the people to make their views known in this absence of choice? That was the particular point. My right hon. Friend will remember that our right hon. Friend the noble Lord Hailsham, made an interesting speech on elective dictatorship.

Hon. Members

Oh!

Madam Deputy Speaker

Order.

Mrs. Thatcher

Therefore, as he has been in the House longer than I have, will my right hon. Friend tell us how people can make their views known when all parties take the same view but each is divided?

Mr. Heath

This is an occasion which constantly occurs in parliamentary history.

Mr. Budgen

Rubbish.

Mr. Heath

What a pity some people have such a limited vocabulary. People can make their views known in a variety of ways, as we know, and can judge candidates on other questions. If all three parties are united on the issue of a single currency—

Mr. Cryer

They are not united.

Mr. Heath

I said if they are united. I am talking about the party as a whole, not about those below the Gangway. If the parties are united, it is open for people to judge, on the merits of the candidates, whom they want to return. The Foreign Secretary quoted Lord Attlee saying that referenda are "for demagogues and dictators". As in so many other things, although he has never had the credit for it, Lord Attlee was right. I strongly support the Prime Minister in his mission and I wish him every success.

6.8 pm

Mr. James Molyneaux (Lagan Valley)

Madam Deputy Speaker—[Interruption.]

Madam Deputy Speaker

Order. Will hon. Members who are leaving the Chamber do so quietly as a courtesy to the right hon. Member for Lagan Valley (Mr. Molyneaux) who has the Floor?

Mr. Molyneaux

I am glad to follow the right hon. Member for Old Bexley and Sidcup (Mr. Heath), even if he, too, is below the Gangway. I share his view of the importance of co-operation with the rest of Europe. He and I are therefore in line with the Prime Minister, who yesterday said: our responsibility … must also be to all the other European countries which are now returning to democracy for the first time in 50 years. He concluded with the words: Our door must be open to them."—[Official Report, 20 November 1991; Vol. 199, c. 281.] I have faith in the Prime Minister's ability to ensure that at Maastricht the rules will not be drawn so tightly as to treat those eastern European nations as second-class Europeans.

The right hon. Member for Finchley (Mrs. Thatcher) yesterday referred to the history of what she correctly termed "the conveyor belt". I want briefly to augment her history lesson. There are some present in the Chamber who can remember Britain's first tentative attempt to gain entry. We had an assurance at that time from the Macmillan Government that the Government were merely engaged in a reconnaissance operation to probe, to see what terms might be on offer, but not to make any kind of commitment. There was no question of making any decision; the House of Commons would consider carefully any terms which might be on offer, but there would be no commitment to entry then.

When the right hon. Member for Old Bexley and Sidcup returned after having done, if I may say so, a good job from his point of view and from the point of view at that time of the majority of his party, we were then asked by the Macmillan Government whether it would be sensible to reject terms which were far better than anything that we had a right to expect.

I am the only surviving Ulster Unionist on this Bench who voted against Second Reading of the European Communities Bill on 17 February 1972. At that time, I was in receipt of the Conservative party Whip. I defied a three-line Whip on that occasion in the Division which gave the Government a majority of eight to take Britain into what was then termed the European Economic Community.

I was not disciplined on that occasion. I was not expelled. That came two years later when I opposed the same Government on the Sunningdale Anglo-Irish agreement. But it would be fair to say in defence of the majority of the 309 who voted for that Second Reading that they never intended that the structure should extend beyond its then title—the European Economic Community. In fairness to most of the 309, it has to be said that, once they became aware of the more sinister designs, they had the courage and integrity to say no, and they still have that courage and integrity. I defend the right of English men and women to say no, even though they occasionally deny the right to Ulster men to say no to the dictation of a foreign Government.

In recent months there has been a parallel awakening throughout the entire United Kingdom electorate. In 1975, in the Wilson referendum, the electorate were prepared to support what was presented at that time as a wider trading bloc, and well we can remember that point being put to us. We were asked whether it would not be a good idea to enter this all-powerful bloc to enable our products to be sold to 250 million customers. That would, for example, benefit the British motor industry which would be able to sell its products to the 250 million customers in Europe, who presumably were thought to be incapable of making their own cars. I do not need to rub in the lesson of what has happened in the interval to the British motor industry.

Whatever the speed of the conveyor belt, we have to accept that the long-term policy was and is one of gradualism. It is a policy which depends on a certain vagueness at all stages during the past 30 years and more and perhaps into the years ahead, but there is a responsibility upon those of us who have no particular vested interest in the outcome of the next general election to probe the intentions of both parties and to bring out the real effects in a way which is difficult for both the Government and the Opposition, for understandable reasons.

Even in the past few months, the electorate have moved from approval in general to opposition in particular. The main cause of that is the way in which the Commission has prematurely shown its hand. The general public may not be greatly motivated by all the technical issues that we have been debating during the past two days which are of legitimate concern to Parliament, but they are incensed by the nooks and crannies meddling, much of it unnecessary and all of it plain daft.

The draftsmen of the European directive are unlikely to call a halt or to suspend production in what is for Britain a pre-election period. By the time we come to that general election, answers will be required of every candidate, not so much on the big issues, as on a range of needling, meddlesome demands. Answers of a kind may be given, but they are unlikely to allay suspicion. Election addresses and manifestos may or may not be unambiguous, but the return of what may be a candidate of conviction does not guarantee that he or she will be able to sustain his or her position in the context of a general election.

The supremacy of the ballot box is subject of the greater supremacy of the party Whips office. Only on rare occasions can a three-line Whip be safely defied. Rebellions have to be rationed. That point is relevant to the exchanges between the right hon. Member for Old Bexley and Sidcup, the right hon. Member for Finchley and the hon. Member for Newham, South (Mr. Spearing).

One example of the breakdown of the supremacy of the ballot box, even of common sense, in the face of the overlordship of the Whips office, is fresh in my memory. It came on the morning of the vote expressing approval of the Anglo-Irish Agreement, when countless right hon. and hon. Members, many of them present in the Chamber this evening, came up to me with words of encouragement which I summarise as follows—"Jim, sorry I couldn't be with you in your Lobby last night, but don't worry, the damn thing won't work anyway."

That attitude did not disillusion me as it might disillusion others. I have been here long enough to be proof against disillusionment. I fully understand why right hon. and hon. Members had to say that. But that is why I have to agree with the right hon. Member for Finchley when she said yesterday: let the people speak."—[Official Report, 20 November 1991; Vol. 199, c. 298.] As a constitutionalist, I have had to conclude, somewhat regrettably, that a referendum is desirable. To those who claim that framing a question would be impossible, I say let them try this for a draft: Do you want to govern yourselves or do you want to be governed by others?

6.18 pm

Mr. Nigel Lawson (Blaby)

The right hon. Member for Lagan Valley (Mr. Molyneaux) has been in the House for a long time, and during that time he has earned its affection and respect. I am pleased to be following him in today's debate, although I must add that I cannot agree with his final remarks.

My right hon. Friend the Prime Minister opened the debate with a particularly well-judged and well-considered speech, and I entirely support what he said. As has been mentioned at least once today, on an earlier occasion my right hon. Friend said that Britain's place was right at the heart of Europe. I endorse that view entirely; but the question that most of us have been addressing in this debate is, what sort of Europe do we wish to be at the heart of?

That is the key issue—the issue of what is to be the constitution of Europe. Such an important issue should be debated openly. It is useless for some right hon. Members to say, "That was decided long ago; you signed up to this, that and the other." That is not so; this is a live issue, a difficult issue and an issue which the House must address seriously—as, in my view, it has done in this debate.

Historians of the future may look back on the debate —or, at least, on one aspect of it—almost with a sense of disbelief. The big event of recent years has been the complete change in the European scene—and, indeed, the world scene—following the collapse of communism and the end of the cold war. As some of my hon. Friends have pointed out, that has had a profound effect on the condition of Europe.

Countries—many of them members of the European Free Trade Association—that had previously felt that their commitment to neutrality prevented them from joining the Community are no longer inhibited, for the ending of the cold war means that the question no longer arises. Now they feel free to join, and wish to do so.

As for the countries of central and eastern Europe—the fledgling democracies—they, too, want to join; but, as we all know, that part of our continent is in crisis. This half, fortunately, is doing reasonably well, but the same cannot be said of the other half. It is experiencing an economic crisis: parts of eastern Europe are on the brink of total economic disintegration. There are also political crises—crises of legitimacy, and the crises involved in accommodating the nationalisms that are emerging in various regions. Those nationalisms could be put to very constructive use, but they could also prove destructive. That is where the problems are; that is the part of Europe to which we should be paying attention today.

Those historians of the future will, I think, be amazed that we are expending so much time, energy and effort on addressing not the half of Europe that is in difficulties, but the half that is not. We are fiddling with western Europe while eastern Europe burns.

Mr. Hugh Dykes (Harrow, East)

I entirely agree with what my right hon. Friend has just said. Is it not encouraging, however, that—as far as I know—not a single eastern European leader has said, publicly or privately, that the Community should slow the developments that it is currently achieving, pending the eventual adhesion of eastern European countries? Despite the difficulties that those countries are experiencing, their leaders all say that they are fully prepared to join at the stage of development that currently prevails.

Mr. Lawson

I now have a fair amount to do with the leaders of those countries, and, unfortunately, they are in a very weak position. But I have heard none of them say that they welcome the treaties or consider them helpful. The Community should be devoting much more attention to what it can do to open its markets to the produce of those countries, especially their farm produce. Their manufacturing sectors are in a very poor state, although there is a world market, and a European market in particular, for the agricultural produce that they are able to generate. The record of France—a prime mover in the current developments in western Europe—is nothing short of scandalous.

Dame Elaine Kellett-Bowman

Trade with eastern Europe has normally been centred on the Soviet Union, which still needs that produce, because it is short of food. Surely it would be more logical—[Interruption.]

Madam Deputy Speaker

Order. The hon. Lady has excellent parliamentary manners and knows that she should address the Chair.

Dame Elaine Kellett-Bowman

Surely it would be more logical to continue the supply of food to the Soviet Union. I have been there recently, and I know that the people there are extremely hungry. If we provided aid, they could consume the food at home rather than putting our farmers out of work.

Mr. Lawson

I am sorry that my hon. Friend takes such a narrow view. The problem with the Soviet Union, or rather the former Soviet Union, relates much more to the distribution of food there than the capacity to produce it. Eastern European countries produce an export surplus, and they desperately need western markets. They want to improve their trading connections with the west, and I think that we should encourage that.

Let me return to the subject of the Maastricht treaties. The Government face a difficult task, which they are handling with considerable skill, but concern is still felt by many right hon. and hon. Members on both sides of the House—including me—about the present position. For 40 years, I have believed that Britain's destiny lies in Europe; ever since the formation of the European Community, I have believed that we should join, and I am only sorry that we did not do so at the beginning.

One of the reasons why I supported the Community was that it struck me as an inspired creation: it provided a means for the most intimate form of co-operation between the various nation states of Europe, without becoming a federation—a single united states of Europe. It got the balance right between the need for the closest possible co-operation and the retention of nation slates. I believe that the latter is not only important historically, but profoundly important to the successful conduct of policy. National loyalty is essential.

We are now being asked to suggest that the careful balance which is the European Community be destroyed —transformed into a federal Europe. There was a time when people said, "There is no such thing; it is just a bogey in the night. Do not worry about a federal Europe, for that is not what it is about." Now, however, the cat is firmly out of the bag, in the preamble to the treaty—the "federal vocation". We know from the prime movers in the exercise that that is their objective; I disagree with it, but there is nothing disreputable about it, and equally no point in concealing it.

Some Liberal Members have said, "What is all this about federalism? Federalism merely means decentralisation." Is it really being suggested that what Mr. Delors wants is less power at the centre and more power for the nation states? Is it really being suggested that what Mr. Mitterrand wants is less power for the Community, and more for Germany and other nation states? On the contrary: the desire exists to create a federal united states of Europe. As I have said, that is an entirely legitimate point of view, although I do not happen to share it.

Why am I opposed to it? First, I believe that that is not what the people of Britain want and I suspect strongly that it is not wanted by those living in most of the other countries that comprise the Community. Secondly, history, including recent history, suggests that multinational federations simply do not work. To try to embark upon them is a road to immense political difficulties and troubles and could lead to a nationalist backlash of the ugliest type. As I have said, nationalism can be channelled to positive purposes, but we all know that it can take an ugly form. That is the danger if we go along that route.

Even those who favour a federal Europe—a united states of Europe—should be concerned at what is in the treaties and the way that things are going. The embryo federation is a much more centralist model than anybody, even those in favour of a federation, could be happy with. It gives powers to the centre which the united states does not require and provides protections for states' rights which are wholly inadequate.

The doctrine of subsidiarity is an attempt to meet the problem, but it is wholly inadequate and feeble. Who is to decide and how are they to decide what it is appropriate for the former nations to have within their responsibility? Who is to decide what should be determined centrally? The idea is that issues should be decided at the appropriate level and, presumably, the Commission will make the proposal as to which that level is. That is nothing like the protection contained in the constitution of the United States, where there are clearly defined and written responsibilities for the federal Government and everything that is not clearly written down is the responsibility of the various states. There is no such protection here.

Moreover, with the constitution-mongering of the Community, we have a constitution that is permanently on the move. That troubles me. I believe in a dynamic society, but that society needs a stable framework. A few years ago, we had the change in the constitution brought about by the Single European Act. Now, further constitutional change is proposed with the Maastricht treaties and we are told that there will be a further constitutional change in 1996, and so on. It is not only undesirable to have a constitution permanently on the move, but with each change there is pressure for more and more power to be given to the centre.

Sir Michael Marshall (Arundel)

Does my right hon. Friend agree that for the future we should think seriously about the six-month presidency? Is it not the nature of things that in each country's turn there is inevitably a trend to be different and to drive on in some other direction?

Mr. Lawson

I agree with my hon. Friend. The issues are rather more fundamental than that, but I agree that the six-month presidency is not helpful and that an annual presidency would be preferable.

I shall give two examples. First, as my right hon. Friend the Prime Minister pointed out, there are the social issues. Nobody is suggesting that social issues such as employment conditions and so on are not a fit subject for legislation. That is not the point. The point is at what level the legislation should be. Should it be national legislation, or should it be Communitywide legislation? It is striking that in the United States, which is a single nation state of a federal nature, it is largely the individual states that decide their own arrangements. They are not centrally imposed.

If we take the latter route, there will inevitably be pressure to push up the level to that of the highest—the Federal Republic of Germany—and there will be huge costs on the whole European economy, particularly the poorer countries of the Community, which could not possibly bear such costs. The countries that benefit will not be in Europe but will be Japan, Taiwan, Hong Kong and elsewhere.

Secondly, majority voting on the environment also concerns me. It is accepted far too readily because there are aspects of the environment that do indeed cross frontiers. I agree that it is appropriate for those aspects to be decided at Community level. However, there is also a range of environmental issues that are perhaps the most local issues of any that we ever deal with as Members of Parliament. The idea that they too should come under an environmental umbrella to be decided at Community level is absurd and offensive. River pollution has been quoted. Of course the Rhine runs through many countries, but there are not many rivers in this country that cross national borders.

Clearly, the key issues are those of foreign policy, security—both external and internal—and currency and all that flows from that. I was interested to hear—it was one of the few clear things that was said by the Opposition spokesman, the right hon. Member for Manchester, Gorton (Mr. Kaufman)—that the Opposition were in favour of majority voting on foreign policy. I had not heard that before. Without wishing to give offence to a great Department of State, I see a danger of a sort of Foreign Office view gaining ground which holds that foreign policy, defence and security are what really matter and that we should not worry about money. [Interruption.] Perhaps my right hon. Friend the Chancellor of the Exchequer recognises that view.

Such a suggestion could not be more wrong. As the EMU treaty makes clear, perfectly logically, a single currency requires a single European central bank and, in a democracy, that in turn must lead to a single Finance Minister and a single Government. Once that is established, independent foreign policy and independent defence policy go out of the window.

In a sense, the game was given away by my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) when he said that a single market requires a single currency. That is erroneous. Tell that to the Americans, Canadians and Mexicans—they have joined up in a free trade area. When he was trying to demonstrate the correctness of what he was saying, he said that we should look at the United States of America. Of course, the United States is precisely what I am describing. It is a single country with a single Treasury Secretary and a single Government.

Mr. Doug Hoyle (Warrington, North)

There is only one dollar in the United States.

Mr. Lawson

That is my point. They all go together —the single currency, the single central bank, the single finance ministry and the single Government. We must be clear that that is the choice facing us.

The idea that we can have an independent European central bank alone, which would be far and away the most powerful institution in the Community with no accountability to anybody, is absolutely bizarre and democratically unacceptable. One of the extraordinary oddities—I put it no stronger than that—of the Opposition's position is that, with the enthusiasm of the convert, they have embraced the single currency and an independent European central bank, but they will not tolerate an independent Bank of England. That is a very strange position for any party, even the Labour party, to adopt.

Mrs. Currie

As my right hon. Friend probably realises, many engineering businesses in Derbyshire which trade in Europe already trade in deutschmarks. How much control and influence does the House have over that?

Mr. Lawson

I have never been engaged in increasing governmental control. I am happy that the Government of whom I was proud to be a member and who were led by my right hon. Friend the Member for Finchley (Mrs. Thatcher) abolished exchange controls. Business men in the constituency of my hon. Friend the Member for Derbyshire, South (Mrs. Currie) and elsewhere are now free to trade in any currency they choose. However, the advantages of having just a single currency are less than my hon. Friend may think.

Mr. George Robertson (Hamilton)

In an article in the Evening Standard last week, the right hon. Member for Blaby (Mr. Lawson) concluded by saying that the Prime Minister should sign the economic and monetary union treaty at Maastricht because it was open to the other 11 members to go ahead with the treaty on their own. I put to the right hon. Member for Blaby, who has an intellectual reputation, a question that was put to the Prime Minister yesterday. If the other 11 were to go ahead on their own, what would be the position of sterling in relation to the single European ecu? Would it be able to float free or would it be forced to shadow the ecu? The right hon. Member for Blaby knows something about that.

Mr. Lawson

I do not believe that the other 11 will go on their own, even though they are free to do so.

There are budgetary consequences, too, of a single currency and they are spelled out in the Dutch draft treaty. It has been said that we do not need those to be spelled out explicitly and that we can rely on market disciplines. In theory that may be the case, but in practice it is doubtful. Market disciplines depend on a no-bailing-out rule under which the Community as a whole would not bail out a country in difficulties, just as a US federal Government would not bail out a state and we would not bail out a local authority. That may lack market credibility even if it is true.

Other important problems such as debt overhang have not yet even been addressed. The various countries that comprise the Community have built up a considerable national debt which they were able to sell and have freely held, because those countries were responsible for their own currencies. Once they cease to be responsible for their own low currencies, the readiness to hold the existing debt, never mind any further debt, would be in doubt in a number of countries, although perhaps not in all.

Several countries would face a critical situation in which they would not be able to borrow any more in the world's markets. Their burden of debt interest would rise considerably and they would have to raise taxes to meet that. There might even be a run on the Government. The market would see it coming and that would begin to affect the financial markets and the markets in that debt well before a single currency came about, if the market thinks that a single currency is on the way.

It is interesting to consider the other half of Europe. The more perceptive analysts of the political economy of the former Soviet Union are increasingly concluding that the only possible way out is to do away with the single currency, the rouble, and, on economic and political grounds, for the various republics to have their own currencies. Experts as far apart as Mr. George Soros and Professor John Williamson have reached that conclusion.

Let us consider the draft treaties. The political union treaty in its present form, for the reasons that I have given and for those given by my right hon. Friend the Prime Minister, is clearly unacceptable. However, I believe that the EMU treaty is something that the Government can sign, now that the stand-aside clause is written into it, and there is the declaration, which is separate from the treaty, of support in principle for the single currency, which we shall not be signing, as my right hon. Friend the Prime Minister made clear. That is very important. I am glad that the declaration is there, because our ability to refrain from signing it demonstrates our position on that issue.

Mr. William Cash (Stafford)

At the beginning of the draft treaty on EMU, there is a treaty obligation under clauses 2 and 3(a) which would commit us to a single currency and fixed exchange rates. Will my right hon. Friend clarify that?

Mr. Lawson

I do not believe that my hon. Friend is right. The treaty clearly states that everything is governed as provided for in this treaty", and the treaty contains the opt-out clause. The convergence conditions in fact make it unlikely that eight or even seven countries will be willing and able to qualify in the event. Those conditions are not an optional extra: they are inherent in the very nature of the enterprise. Germany is conscious of the immense problems that arose in relation to currency union with eastern Germany. Germany is aware that such convergence conditions, or something very much like them, are absolutely essential.

I could support stage 2, with the independent national central banks co-operating together, as the Germans would like to see, under the Committee of Central Bank Governors, renamed the European Monetary Institute. That would be perfectly acceptable, but as a stopping point. That is a perfectly adequate constitution for the monetary side of Europe.

But the real purpose behind all this is not economic: it is political. I believe that there is no net economic gain and that the politics is the politics of Europe past, not the politics of Europe future.

6.48 pm

Mr. Merlyn Rees (Morley and Leeds, South)

In the interests of time, and not wanting to abuse Privy Councillors' time, perhaps I should not refer to the speech made by the right hon. Member for Blaby (Mr. Lawson) except in one respect. I found his comments about federalism extremely interesting.

A headline in The Times today states: Delors gives MEPs mocking account of Britain's stance. I simply say to Mr. Delors that I was in Vichy France in 1944 when the French fought each other. I do not mock it: it happened. That was a problem that France faced. If we have old historical problems and old historical ideas based on an unwritten constitution and the fact that we are averse to federalism, I hope that he will not mock. What happened in Vichy France was endemic to France, and our feeling against federalism is something that we have grown up with over the years.

This may be my last speech in a major debate. However, last week I saw a reissue of "The Four Feathers", a colour film which was issued in 1939 and which I paid one and sixpence to see. The film has been reissued, and it is very good. Reissued though the film was, people did not appreciate it in the way in which we younger people would have done in 1939.

I was selected as a parliamentary candidate in 1952, and when I stood in 1955, we were at the beginning of the EEC debate. When I became more active and entered the House after the death of Hugh Gaitskell, it was the greatest problem of the Labour party. My right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) will remember that he was then a research officer at Transport house. The EEC was also the subject of discussion among the Conservative party.

The conflict of views about going into Europe which was led by men whom I respected, such as Ernest Bevin, Attlee and Churchill, was not because they were evil men but because they came from a generation when going into Europe and eschewing the open sea was something that they could not comprehend. Now, with a wider membership and, as the right hon. Member for Blaby said, with what is happening in eastern Europe, with a broadening role in the face of new problems, and with the changes of the war years over, I have come to believe not that we should just be members but that we should play a more positive role not only to influence the future, which is important, but to change the existing system.

I wish to refer to some of the existing institutions of the EC. Beyond Maastricht, we must consider those institutions closely. I look askance at the presidency system. Small countries are initiating discussion and moving forward on matters such as defence and foreign affairs about which they know very little. The Dutch Foreign Minister could draw up a constitution on every subject under the sun every morning before breakfast. Perhaps he could do one for Northern Ireland.

Mr. Molyneaux

William of Orange.

Mr. Rees

The fact that it would not work would make no difference.

We should initiate change in the bureaucratic Commission. The right hon. Member for Old Bexley and Sidcup (Mr. Heath), a former Prime Minister, was not concerned about the bureaucratic Commission.

Mr. David Trimble (Upper Bann)

I take the point that the right hon. Gentleman makes about the presidency. The over-representation of small countries provides a built-in vote in favour of federalism. Does the right hon. Gentleman agree that that applies equally to the weight that they are given in the Council of Ministers and in the Parliament, and that equal representation and equal say, proportionate to size, are important?

Mr. Rees

That subject should surely be examined. The point that I was raising was the six-month presidency, when countries seem to be more determined to show their political virility than to find a way forward. I certainly have no objection to the smaller countries. I was talking about the six-month presidency, which raises problems.

Of course the European Parliament needs more powers, but we should watch it very carefully. Over the years I have noticed some excellent Euro-Members, many of whom have ended up in this place. The aim of many Labour Members of the European Parliament is to come here. The fact that only 30 per cent. of people vote in a European election demonstrates a lack of interest in Euro elections. All parties need to do something about that.

My right hon. Friend the Leader of the Opposition made clear his objection on foreign affairs, to the methods suggested in the treaty. Let us look at the practicalities and at the way in which the EC has behaved over Yugoslavia. The right hon. Member for Brighton, Pavilion, (Mr. Amery), to whom I always defer because he played a major part in a southern Slav country, 40 or 50 years ago—

Mr. Giles Radice (Durham, North)

And Albania.

Mr. Rees

He was there too, but he behaved extraordinarily bravely during the Yugoslavian campaign. Most hon. Members would not appreciate that.

The Germans, with their long-term policy in favour of Croatia and Slovenia, had to have seven divisions in Yugoslavia to hold them down. I played a small part in the air war. Anybody who believes that Yugoslavia could be dealt with as Saddam Hussein's Iraq was dealt with had better look at the terrain. The Serbs, with whom the right hon. Gentleman was fighting, who were fighting in the mountains, held up seven German divisions. The Italians were involved in a divided-up Croatia. The EC was romancing when it talked about dealing with the Yugoslav problem. There is no way of dealing with that country unless one redraws the boundaries, and that would be a difficult task. It is not enough just to have a common foreign policy. A common foreign policy means nothing if it cannot be implemented.

On defence, if America is not involved, Germany or France will become the main nuclear power in Europe. It is important to remember that. There could not be a European defence force that was not a nuclear power. I would prefer America rather than France, Germany or ourselves to be the nuclear power. That raises other issues.

The political side also relates to defence. The first time that I heard of Maastricht was on 12 May 1940, when the RAF was shot out of the sky and knocked on the ground. Fairey Battle squadrons went in to attack bridges over the canal at Maastricht. They were massacred. Politicians of all parties should realise how foolish they can be. Two young men won the Victoria cross at that time. They deserved the VC. The then politicians led them into battle without the right equipment and without a proper defence agreement.

Of course, there was a defence agreement with the French, but what it added up to was mere chat. If there is to be a defence agreement, it must be in terms of integration of weaponry, what the targets are, and the supply of equipment. The day after the Maastricht massacre, the French general commanding the armêe de l'air said, that he was sorry, but they were the wrong targets; that was not where the Germans were. By the time they were located, the Germans were into France.

It is not enough to have a political policy, and it is not enough to have a defence policy just to give it a name. It will not happen that way. Therefore, we must watch matters very carefully.

The decisions will be taken in the next Parliament, when I will not be here. Nor will 60, 70 or even more hon. Members when they lose their seats, plus another 100 or so who will retire. It is not the place of this House to take final decisions. It is up to the new Parliament to take final decisions. We are simply conducting a holding operation. My hon. Friend the Member for Newham, South (Mr. Spearing) advises me, as he always does, that a Bill amending the treaty will be before the House. It is important that we do not hand to our successors decisions made at the end of a dying Parliament; we should leave them to take the decisions in future. We should take it easy and not be led by the nose by the Commission or by the Council of Foreign Ministers. Let us not always be looking for great change. Let us see how it goes. Important changes will also take place in economic affairs, but it is the next Parliament that will matter.

I have tried to end my speech before 7 o'clock, because many other right hon. and hon. Members want to contribute. I will finish by looking back—which, at my age, I do far too often. I have taken my children to the battlefields of north-east France as a result of which their grandfather died because of the foolishness of politicians. We must judge the second world war differently, but let us make sure that we do not repeat the mistakes that so many politicians thoughout Europe made over the past 100 years. They made elementary mistakes for which young men died.

We must think hard. Just after the war, I taught in a grammar school, and one day the French assistance said to me, "This school will clap itself to death." I begin to believe that the House will clap itself to death one day. We think that we are so good and do everything absolutely correctly, but of course we do not. We sneer at the European Parliament, but it is time that we looked at Europe in other than a partisan way—"Ha ha, ha. Did you hear what happened? Did you hear what he said? Wasn't that funny?" We should look to the future, and if we make mistakes young men and women will die. I do not want my grandchildren to do what their grandfather did, or even marginally what I had to do.

Several Hon. Members

rose—

Mr. Deputy Speaker (Sir Paul Dean)

Order. I remind the House that the 10-minute limit on speeches is now in effect.

7 pm

Sir Geoffrey Finsberg (Hampstead and Highgate)

I agreed with much of what the right hon. Member for Morley and Leeds, South (Mr. Rees) said at the beginning of his speech, but I did not go along with his closing remarks.

I want to make one comment about the referendum before dealing with the main subject of my speech. I won a marginal seat and have held it on five successive occasions. I believe that real democracy is allowing voters to decide in a general election and not in a referendum, which is a totally different thing, and one that is alien to my concept of democracy.

My party is a broad church, with room for many shades of opinion. I urge my right hon. and hon. Friends—be they pro or anti-European fanatics—to remember that voters will not support a party that is riven by doubts or dissent. The voters will write off the Opposition, whose policies are now purely hypocritical and do not matter. I appeal to my right hon. and hon. Friends to realise that elections are lost by a party that is divided.

I turn to defence and security issues, and speak as the leader of the United Kingdom delegation to the Western European Union and to the Council of Europe. I much regretted the dismissive attitude taken by my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath), who has clearly totally forgotten that the Western European Union was revitalised, added Spain and Portugal to its ranks, and produced the Hague platform—which provided for the WEU's nine members to defend their borders, with nuclear weapons if need be. It undertook out-of-area activities in respect of minesweeping in the Iran-Iraq war, and of the sanction stopping of ships during the Gulf war. My right hon. Friend cannot write off the WEU as simply and as simplistically as he did.

Recently, both the Franco-German and Italian-British defence proposals were presented, followed by the valuable NATO conclusions. Again, I disagree with my right hon. Friend the Member for Old Bexley and Sidcup in his comments on NATO, which were so childish as to be not worth considering.

I will inform the House of the conclusions of the parliamentary assembly of the Western European Union, which comprises elected members from the Parliaments of France, Germany, Italy, Spain, Portugal, Luxembourg, Belgium, Holland, and the United Kingdom. In December 1990, the parliamentary assembly adopted a position opposed to certain proposals for WEU to be integrated in the European Community, Its view was that, if implemented, these proposals would weaken the Atlantic Alliance and also Europe's ability to play a useful role on the world stage. The Assembly therefore recommended that the Council pursue the reactivation of WEU in order to allow Europe to play a more effective part in NATO. That decision was carried overwhelmingly, with the support of all four of the political parties represented in the WEU.

Subsequently, the presidential committee, which runs the WEU between assemblies, decided to offer advice to both the Council of Ministers and the intergovernmental conference. I was given the task of preparing a document, which was adopted without opposition in March 1991 by all nine nations and all four political parties. I will quote from it, because it is important to do so in the context of the reasons that have been given for not giving the WEU control of defence. WEU could establish a link between a Europe in the process of unification and an Atlantic Alliance in the process of transformation and thus provide the vehicle for a stronger Europe to contribute more to joint security … WEU must be at one and the same time the means of allowing Europe to make its voice heard in a Euro-American dialogue"— it must never be forgotten that Europe must always have an input into that dialogue— of which the Atlantic Alliance is the institutional framework and the instrument for making the most of the European contribution to the defence of the West … This contribution of Europe is the more essential in that the American military presence on the continent of Europe, reduced since the war in the Gulf, will remain below what it was in the past … Defence policy should continue to be made in the organisations which assure collective defence, NATO, and WEU. It should be a task of the European Council to reach conclusions on common foreign and security policy. These would serve as a guideline for co-operation within WEU on defence matters"— not control, but guidelines.

A linked theme, to which my right hon. Friend the Member for Blaby (Mr. Lawson) and others referred is the position of the members of the former Warsaw pact, who desperately want to be accepted and acknowledged as democratic. I had the privilege of leading two teams of Council of Europe observers to elections in east Germany and, recently, Poland, and I have spoken to Bulgarians, Hungarians, and Czechs—the last two are now full members of the Council of Europe.

They realise that their route to the Community can be opened only if their countries are practising real democracy in respect of human rights, and multi-party Parliaments—although I said to my Polish friends, "You can go a bit too far." More importantly, in the light of the events in Yugoslavia, whose guest membership of the Council of Europe is likely to be suspended, those countries must provide proper protection for minorities. The question of protecting minorities is one that will pose a real danger to Europe in the next five years.

It is simplistic to say that one should recognise Slovenia or Croatia. If one did so now, that would unleash some of the most horrible massacres in the other states of what was Yugoslavia. However, I acknowledge the tragedy of not recognising those two states. I do not propose at this stage to try to provide an answer. I only say that it is the route of the Council of Europe that has been recognised by the Community as leading to Community membership itself. That cannot be bypassed, because one cannot have in Community membership countries that do not follow the concepts of democracy and human rights.

I address a final word to my right hon. Friend the Prime Minister and to my hon. Friend the Financial Secretary. When they go to Maastricht, they will face difficult choices and tasks. They should remind their opposite numbers that their own parliamentarians—the French, Germans, and Italians—all subscribed to the view that the defence issue to which I referred should not be brought within the European Community. The Prime Ministers and Foreign Secretaries of France, Germany, Italy, the Benelux or wherever should be reminded that they will have to account to their own Parliament.

I advise the right hon. Member for Morley and Leeds, South that the advantage of organisations such as the Council of Europe and the Western European Union is that they are composed of Members of their own national Parliaments who have roots inside democracies, and that those parliamentarians have spoken and have said no to the inclusion of defence in the competence of the European Community.

I hope that that will be of some help to my right hon. and hon. Friends. It is something on which they can rely and something that their colleagues in other countries will find difficult to deny.

7.9 pm

Mr. Giles Radice (Durham, North)

The European Community is one of the great success stories of the post-war world. As the Soviet Union collapses, the European Community, which is a union of free peoples, gathers strength. It is already a community of 12 members, and it could be a community of 20 by the beginning off the next century. It is the world's greatest trading bloc and, with economic and monetary union, it could have the world's strongest currency. As the Foreign Secretary pointed out this afternoon, it increasingly takes a co-ordinated view of foreign policy issues. It is inconceivable that, by the end of the century, it will not also have a common defence identity.

Whatever we do, the nation states of Europe wil increasingly combine. They will do so of their own volition, which makes the analogy with the Soviet Union or Yugoslavia patently false. The form that that closer union takes will be sui generis. It will be partly federal and partly confederal, but whatever form it takes, go ahead it will, whether we like it or not.

The question for the nation and this House is whether we participate in the process of union or stand aside. I agree with the Prime Minister that we must be at the heart of Europe, working with our partners to build Europe's future. For too long, the British have been reluctant Europeans—for understandable reasons, because our strong sense of national identity has been shaped by our exceptional history. Unlike the other 11 members of the EC, Britain has not experienced serious military defeat, occupation, civil war or revolution for at least 200 years.

At the end of the war, as one of the victors, we still believed in the absolute viability of the independent nation state. Our parliamentary tradition and constitutional development and our system of law have set us apart from the continent. I agree with my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees) that, because of our world empire, we looked outwards, across the Atlantic, rather than to the mainland of Europe.

However, since 1945, our past has proved a poor guide. In the post-war world, our power has been reduced. We are now no more and no less than a medium-sized European power. Sadly, a whole generation of political leaders—and even some of their successors today, if what we have heard in the past two days is right—have failed to face up to that fact. When our decline in influence and shift in interest argued strongly for participation in Europe, they remained ambivalent about those whom they thought of as "unreliable continentals". We have heard some of that from the right hon. Member for Chingford (Mr. Tebbit).

As a consequence, Britain squandered crucial opportunities over the Schuman plan in 1950, over the common market in 1955 and 1957, and over British entry into the European monetary system in the late 1970s and 1980s. In the end, after allowing those proposals to go forward without us, we were forced to join after the terms had been fixed. It was a classic failure of political leadership. We must not make the same mistake again. Therefore, it is the Government's duty to explain why Britain has to be involved in the process of economic and political union which will be launched at Maastricht.

Geographically, Britain is a group of islands off the mainland of Europe. Historically and culturally, it has always been linked to the continent. Strategically, what happens there has always been and is bound to be of vital interest to Britain. Economically, we cannot afford to be excluded from a group that includes most of our main trading partners, including our biggest partner of all, the Federal Republic of Germany.

I believe that the Government understand those inescapable facts. They know perfectly well that we cannot afford to be left out. They know that, if Britain is really to remain at the heart of Europe, we must sign—if not at Maastricht, then soon after. The Government should tell the House the truth about that. They should stop pretending that they are in a position—that the country is in a position—to refuse to sign the treaties. They should stop portraying themselves as doughty defenders of a Britain that is besieged by marauding continentals. That was always the portrait that was painted by the right hon. Member for Finchley (Mrs. Thatcher) and I am afraid that that is occasionally true of the present Prime Minister also. That may go down well with some Euro-sceptics among Conservative Members, but it infuriates our partners and reduces our influence in the Community, as I know only too well.

Equally vitally, the Government are failing to make a positive case for European integration. Listening to the Prime Minister, one gets little idea that a single European currency would end transaction costs for business and tourists; eliminate exchange rate instability; provide a stable environment for growth and be the most powerful currency in the world. One certainly would not understand that the real choice was between de facto membership of a deutschmark zone in which we would have no influence and membership of a single currency system in which we would have a stake.

Above all, the Government have failed to point out that the doctrine of sovereignty, so frequently espoused by the right hon. Member for Finchley, is totally out of date. The British concept of parliamentary sovereignty is basically a hangover from Tudor despotism, with little relevance today. It fails to comprehend the weakness of the House of Commons when the Government have a majority. It fails to guarantee civil rights, as our lamentable record at the European Court of Human Rights shows. It underwrites the British state, which is the most centralised in the whole of the European Community.

Equally important, it does not correspond to the facts of the modern world. For over 40 years, we have shared sovereignty in NATO, as the right hon. Member for Old Bexley and Sidcup (Mr. Heath) rightly pointed out. For the past 20 years, developments in the capital and financial markets have drastically reduced our autonomy in economic management. Since we joined the EC in 1973, we have lost sovereignty in the areas of trade and agriculture. Later, with the Single European Act and British membership of the exchange rate mechanism—the right hon. Member for Finchley took us into that—our sovereignty was further eroded.

For a medium-sized power such as Britain, the best way to maximise our influence is to pool sovereignty by combining with others. Most European nations understand that, which is why they want to be active members of the European Community. The fact is that there is no alternative to working with our partners in the EC. That point has been reinforced in this debate by the total failure of the Euro-sceptics to come forward with any positive idea about Britain's role. We have not heard a single word. They have made interesting and occasionally convincing criticisms, but they have totally failed to suggest an alternative future for this country.

I congratulate my right hon. and hon. Friends on the positive case that they have made on behalf of the Labour party, especially for common environmental policies and for minimum social standards as proposed by the social charter, which has been agreed by 11 other countries. My right hon. and hon. Friends have also rightly emphasised that, if one intends to make Community institutions more accountable, one must increase the powers of the European Parliament. They are right to say that.

Labour's positive agenda opens up the prospect for the first time since we joined the Community in 1973 of Britain participating constructively in the European Community. That is the only way of securing the future of the British people.

7.19 pm

Mr. Norman Tebbit (Chingford)

I shall not take up the argument of the hon. Member for Durham, North (Mr. Radice); it would be unwise to do so. This is a strange debate because, although the motions on the Order Paper tabled by both the Government and the official Opposition parties are long on words, they are short on relevance to the vital questions raised by the draft treaties which will be discussed at Maastricht.

The real issue was put in possibly the best speech that I have heard in this place by the right hon. Member for Chesterfield (Mr. Benn) last night. The question that he put is the right question: are the British people to be governed by those who are accountable to them, or those who are unaccountable or accountable to others? That question is not on the Order Paper. That is why tonight's vote will be interesting but irrelevant.

In a short speech, I shall not attempt to make again the points made so tellingly by others, not least my right hon. Friends the Members for Finchley (Mrs. Thatcher), for Shropshire, North (Mr. Biffen), for Cirencester and Tewkesbury (Mr. Ridley), the right hon. Members for Bethnal Green and Stepney (Mr. Shore) and for Plymouth, Devonport (Dr. Owen) and my hon. Friend the Member for Stafford (Mr. Cash).

In his speech, the Prime Minister set out the weak position from which he negotiates on economic and monetary union. He told us that he would not accept a treaty that was not in Britain's interest. I am sure that that is so, but he also reminded us that, if he vetoed the draft treaty, the 11 other member states would go outside the treaty of Rome and sign a currency agreement of their own, leaving us out. Bonne chance, say I, as did my right hon. Friend the Member for Cirencester and Tewkesbury. But the Prime Minister has declared that that would be unacceptably damaging to us.

Indeed, my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe), in a speech right out of the defeatist book which is kept at the Foreign Office, seemed to declare that a nation with its own currency could not survive in the days of the ecu. Tell that to the marines, and especially the Japanese marines. If the Prime Minister is convinced that we cannot be excluded from the single currency, he cannot afford not to sign the treaty. If that is so, he is not negotiating but pleading for terms.

The Prime Minister says that signing the treaty is merely taking an option on the right to join. But the option has two costs. First, whether in or out, we would bear the cost of supporting the economies which had been made non-viable by the single currency. That is the price of regional aid or structural spending. Secondly, we should have made a moral commitment to the single currency.

Why pass enabling legislation to do what most Members of the House and most voters do not want to do? Why get engaged if we do not truly intend to marry? I remind the House that couples in the intimate atmosphere of engagement sometimes find that pregnancy arises and the shotgun marriage follows.

Leaving aside the issue of sovereignty—not of the House but of the people to self-government—the devil of the single currency is not merely that the economies of the Community are simply not convergent and would be prevented from converging by a single currency, but that they are not all at the same point in their economic cycles.

The exchange rate mechanism is a voluntary prototype for a single currency. That is why, when the French economy was screaming for lower interest rates, President Mitterrand increased them the other day. The German economy and the Bundesbank—independent, I am told —are screaming for higher interest rates. But interest rates are not raised. It would be madness indeed if the ERM was allowed to force an interest rate rise in Britain.

I suspect that there is a deal, spoken or unspoken, which further undermines the Prime Minister's negotiating position. I think Chancellor Kohl has indicated that he knows the risk to the Government's chances of re-election if interest rates have to be raised in Britain. He may have said that there will be no increase in German rates before Maastricht—indeed, hopefully, so long as the treaty is signed, not before our general election. "That, John," says Helmut, "is what European solidarity is about."

But what chance of help if the Prime Minister vetoes the treaty? After all, thinks Helmut, if interest rates rise, perhaps Labour will come in, which is a soft touch not only on the single currency but on political union. [Interruption.] I am glad that the right hon. Member for Islwyn (Mr. Kinnock) follows the joke. It is the only thing that he has followed so far in the debate.

There is only one way for the Prime Minister to strengthen his hand. He should legislate now for a referendum to be held once the negotiations at Maastricht are complete. It should put simple yes or no questions on whether the European monetary treaty—and, if there is one, the political treaty—should be accepted. He should say, "It is not me you must persuade, Helmut, but the British people. In Britain it is they who are sovereign."

In the final minutes available to me, I turn to the proposals for political union. On that matter I stand where my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) stood on 24 May 1971. He said: There are certain administrative arrangements which are handled by the Commission and which are clearly defined in the Treaty of Rome, and they cannot go beyond their powers. But our view is that it is the Council of Ministers, representing member countries, who must take the decisions. He went on to emphasise the importance of the national veto and said: When I urged that there should be democratic control, I had in mind that Ministers are the representatives of their Governments and they are the ones who take the decisions. They are responsible to their own democracies."—[Official Report, 24 May 1971; Vol. 818, c. 43–44.] Amen to that, say I. I have not changed my mind, even if my right hon. Friend has changed his.

A week or so ago I heard—others may have done so, too—Lord Cockfield assert that the British people had no moral right and probably no legal right to resist the demands of a federal Europe. We can argue about what "federal" means, but Chancellor Kohl knows that he is head of a federal state. All the important issues, such as the economy, foreign affairs, defence, immigration and social affairs, are dealt with in Bonn. The rest is left to the provinces. In a federal Europe, that would be the pattern. With England, Scotland, Wales and Ulster seen as provinces like Saxony or Aquitaine, what role would there be for the Government or Parliament of the United Kingdom?

Not only must federalism be stopped in its tracks. The treaty of Rome should be amended to uphold the union of nation state and exclude a federal destiny. In the words of Winston Churchill, who has been much quoted already in the debate: We are with Europe but not of it. We are linked but not comprised. We are interested and associated but not absorbed and should European statesmen address us in the words which were used of old—'Shall we speak for thee to the king or captain of the host?'—we should reply. 'Nay sir, for we dwell among our own people'". That remains my view today.

I repeat that the question on the Order Paper tonight is irrelevant to the question before the House and the country. We might be asked just as well to vote on any three pages picked at random out of "Alice in Wonderland" as on the motions before the House tonight. How can one vote in such circumstances? My right hon. Friend the Foreign Secretary recently came out of his negotiations with, among others, our French partners, and, in his diplomatic way, observed that, like Waterloo, it had been hard pounding. I yield to no one in my admiration for the great Iron Duke himself, but my favourite general of the Napoleonic wars was General Kutuzov. I shall follow his example.

7.29 pm

Mr. Nigel Spearing (Newham, South)

I have disagreed with the political views of the right hon. Member for Chingford (Mr. Tebbit) on many occasions, but he has just highlighted what might be called self-government and he rightly pointed out—[Interruption.]

Mr. Deputy Speaker (Sir Paul Dean)

Order. Will hon. Members who are leaving the Chamber please do so quietly?

Mr. Spearing

The right hon. Gentleman said that the self-government of this country is in peril and, while I disagree with his domestic politics, he is right to point that out.

My hon. Friend the Member for Durham, North (Mr. Radice) has a vision of an international society, but the treaty before us—including the treaty of Rome—is not an international treaty. That is why many Opposition Members have consistently and persistently been against it.

The right hon. Member for Blaby (Mr. Lawson) has said that he was attracted to the treaty of Rome because he thought that it would provide the vehicle to achieve the objectives that he, my hon. Friend the Member for Durham, North and those of us who want a co-operating, international western Europe seek. However, the right hon. Member for Blaby did not say that tonight, because he now realises that it is not a treaty of that sort. Although the right hon. Member for Chingford agreed with his right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) way back in 1972, 1973 and 1974, he has also come to the same conclusion. Some of us, including my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) and my hon. Friend the Member for Newham, North-East (Mr. Leighton) came to that conclusion a long time ago.

The right hon. Member for Finchley (Mrs. Thatcher) has at last realised that perhaps she, too, made some mistakes when she was a member of the Government led by the right hon. Member for Old Bexley and Sidcup. I intervened to ask him what mandate he had, but I should have asked what electoral mandate. Of course, he did not have one; nor did the right hon. Member for Finchley have a mandate for the Single European Act; and nor does the Prime Minister have an electoral mandate to agree what may come out of Maastricht—he has not even got a parliamentary mandate yet. That is why, either in this Parliament or, more probably, in the next, the machinery for giving legal effect to any treaty that may come about will be a Bill which will have to be passed by the House.

The right hon. Member for Finchley is not the only person to have erred on the subject—I shall come to the Prime Minister in a moment. I am glad that the right hon. Lady is here, because no one would deny that she at least has courage, but I doubt whether she has the instinct for parliamentary government, which some of us believe in. She went to Madrid where the principle of the Delors report was up for discussion.

It is not a matter of memory, but a matter of record, that there was no debate on the Delors report before that summit. There had been a debate some time before on the general subject of a single currency, but not on the report. Yet, when she was confronted with a political situation not unlike that confronting the present Prime Minister—to take the least worst solution—she agreed to the principle of economic and monetary union. The question was, by what means and when? The principle was agreed by the right hon. Lady before any mandate had been given by the House, let alone the electorate.

If the right hon. Member for Old Bexley and Sidcup is right, that is the way in which European union works. It does not allow genuine negotiations, but provides a choice between the least worst solutions for leaders of all parties and all Governments. It provides a pattern of coercion and not of co-operation.

Yesterday, the right hon. Member for Finchley drew our attention to the scope and powers of the Community. She said: It is not the case, as is sometimes alleged, that the Single European Act introduced qualified majority voting in the Community—it was already in the treaty of Rome. As my right hon. Friend said, the Act extended it in certain limited areas for the express and sole purpose of completing the common or single market".—[Official Report, 20 November 1991; Vol. 199, c. 292.] I wish that were true. However, as the right hon. Lady knows, or ought to know now, qualified majority voting could operate not in "limited" but in huge and undefined areas under articles 8A and 100A of the treaty. That is very relevant, because it gave away some of the powers of the House. Either the right hon. Member for Finchley knew that that was the case when she drove the Single European Act through the House on a three-line Whip or she did not. If she knew, she did not tell us and if she did not know, someone misled her. The result is that the single market now operates over a huge and almost undefined area.

My hon. Friends ask why that is so and the answer is simple. The single market is defined in the treaty as an area "without internal frontiers". It is not merely a question of lorries being able to go through borders, of barriers coming up and barbed wire boundaries on the map being expunged; it is a question of a legal boundary.

There may be extenuating circumstances. Perhaps the enthusiasm of the right hon. Member for Finchley for market economics led her to say, "Yes, let's have the single market," because she wanted to bring the benefits of market forces to the benighted tribes on the other side of the channel and to drive market economics through. In so doing, she predicated a single market authority and a single Government. As the right hon. Member for Blaby said, a single currency means a single economic policy, which means a single Chancellor of the Exchequer and a single Government. We might end up with government of bankers, by bankers and for bankers. The only way round the problem is a supranational state, which is what the treaty will bring in if we are not careful.

I give no one cause to believe that I am not an internationalist. The speech by my hon. Friend the Member for Durham, North greatly attracted me in some ways. However, the constitution of the European Community—in the treaty of Rome and the treaty before us—is incapable of providing us with what we seek. It is for that reason that I can have none of the treaty before us today.

7.38 pm

Rev. Ian Paisley (Antrim, North)

I also took part in the vote in the House in 1972. It comes ill from the lips of the right hon. Member for Old Bexley and Sidcup (Mr. Heath) to say that he had a mandate to do what he did. I remember the cursing and threats—I saw one hon. Member being hammered over the head with an Order Paper. There was certainly no democracy in the House when it took that vital vote to go into Europe. Every hon. Member who took part in the debate knows that perfectly well.

Sovereignty of the House has been mentioned, but what is that? It is the sovereignty of the people. People give this House sovereignty, and if we do not have the people behind us, we have no sovereignty. We have witnessed the collapse of a great federal empire in the east, an empire which had a single currency and controlled and regimented its inhabitants. It failed because the people were not consulted and were not behind it. It was brought down by people power.

We are now told that we should go down that road. Jacques Delors, with his beckoning hands, is saying, "You must all come down this road." I have the privilege of sitting both in Strasbourg and in this House. I took part yesterday in the debate in Strasbourg. I have often wondered what was the motivation of the people of Europe in wishing to build another super-state. Super-states have been dangerous to the peace of the world. They never brought peace. They brought trouble in their wake.

I got from the Library at Strasbourg a copy of the poster that I am holding up. It is interesting, because it depicts the future of Europe. The picture in the centre is a copy of a painting by a great Belgian painter—[Interruption.] It may be coloured orange, but it is yellow in the centre. It is the tower of Babel. In other words they have chosen to depict the new Europe as the tower of Babel. We are well aware of the European circle of stars, with five pointed stars, one point facing heaven. Hon. Members will note that the poster tries to square the circle—

Mr. Deputy Speaker (Sir Paul Dean)

Order. It would be better if the hon. Gentleman did not use his visual aid.

Rev. Ian Paisley

I have discovered after 45 years of preaching that eye-gate is far more effective than ear-gate. In this poster, the stars are turned upside down. It is wonderful the way in which they turn things upside down and seek to square the circle. We are told that that is the direction we must take.

I listened with interest to the speech of the right hon. Member for Old Bexley and Sidcup. He painted a wonderful picture, but I wondered what he was talking about. I recall him telling the people of Britain that, if they voted for Europe, two things would happen—first that we would solve our unemployment problem and, secondly, that we would retain the veto. We have not solved our unemployment problem. The right hon. Gentleman said that he brought unemployment down. I remember when we called him Mr. Million, unemployment having risen at that time to over a million.

I remember the great things that the right hon. Gentleman said would happen as a result of our joining the Common Market, and I was amazed. In fact, our membership has weakened the economy of the United Kingdom. Food prices are higher and there is a deteriorating balance of trade in manufactured goods with the EC, with the consequent loss of many jobs, especially in manufacturing. There is an adverse effect on United Kingdom exports to non-EC countries. Britain has suffered in its trading activities, and the cost of the CAP has been extravagant, to say the least.

The precious money that we pour into the Common Market budget would be better disbursed, by whatever Government are in power, in this country. Think of the £2,769 million that was paid by this country in 1978 to finance the CAP. That was equal to the cost of building more than 100 much-neeeded NHS hospitals, and 14 times more than the amount spent on all the textbooks in all United Kingdom secondary schools. We have heard in the House today details of a false balance.

I am not opposed to co-operation among the nations of Europe, but the time has come to realise that the future for the European nations lies in co-operation rather than incorporation. It lies in unity and not in uniformity, in national sovereignty and not in international submergence. It should be a federation of nations, a family of nations, and not a federation of nations.

Mr. Andrew Rowe (Mid-Kent)

Will the hon. Gentleman, in his eloquent address, put an estimate on the cost to this country of the efforts that we had to make —when we had, as he believes, our full sovereignty—twice this century to restrain the exercise of national sovereignty by those who are now our partners in Europe?

Rev. Ian Paisley

That is an irrelevant question, because we could have wars again in Europe. Indeed, a bloody conflict is now occurring, yet the EC is not handling that properly. The right hon. Member for Morley and Leeds, South (Mr. Rees), a former Secretary of State for Northern Ireland, gave a warning to that effect. Surely we shall not have wars among ourselves? I thought that the Germans had been regenerated and that the French had been converted. Are we not all good friends and neighbours? It appears that the hon. Gentleman's question is totally irrelevant to the debate.

The British Government need not go cap in hand to Europe. We have five strong bargaining points. First, the United Kingdom is one of the major contributors to the EC budget; secondly, this country is the only net consumer in the EC of many of the agricultural products that are currently in surplus; thirdly, Britain is overwhelmingly a net importer of EC manufactures; fourthly, this country is the most important provider of fishing waters forming the EC's common fishing policy; and fifthly, the United Kingdom is the only EC country sufficient in energy. Those are all vital bargaining counters. In view of that, and the references that have been made to the strength of NATO and Western European Union, we should not be going cap in hand to Europe.

It is regrettable that in this House and Strasbourg there seems to be a desire to divide the people of this nation rather than to strengthen the hands of those who are negotiating for us. When I was in Strasbourg yesterday, the leader of this country's socialists, Mr. Ford, pleaded with the Council not to allow the British Government to dictate terms to the whole of Europe. "Do not let them cripple our common future," was the point of his argument. If Jacques Delors has his way, our nation will be not a cripple but a corpse.

7.49 pm

Mr. John Home Robertson (East Lothian)

It would have been surprising if the hon. Member for Antrim, North (Rev. Ian Paisley) had enthused on anything based on the treaty of Rome. However, it is a happy day for a Member for East Lothian to be able to support a Labour party motion in a debate on the European Community. It has not always been thus, as old friends of John P. Mackintosh may recall.

This interesting debate can perhaps best be described as a re-run of an old debate between little Englanders and British Europeans. In the old days, the debate within the Labour party was between sceptics, who feared that the European Community would remain forever a market for the benefit of the strong and privileged, and the Euro optimists, who believed that Europe could develop into a Community with social priorities. On one occasion, when I got carried away, I expressed the view that, to deal with the problem of multinational capitalism, we needed multinational socialism and that the European Community was the way to achieve it.

Happily, the doubts of the Euro-sceptics—or most of them—in the Labour party have been overtaken by the social charter, regional policy, environmental initiatives and the drive towards a fairer, broader and more democratic Europe. Surely democracy and the need for democratic accountability are crucial to this debate. There cannot be good government in a democratic society without genuine and credible accountability.

There is a growing democratic deficit within the European Community, as collective powers have developed and accumulated within the Council of Ministers and the Commission. We must redress that deficit. At the same time, to the eternal shame of this House, we have lost local, regional and national accountability in Britain as more and more powers have been centralised in Whitehall. In Scotland, that democratic deficit can be summed up as nine uncompromising Tories imposing their will, despite the fact that they are comprehensively outvoted by the other 63 elected members of Parliament from Scotland. That should be regarded as the basis of a constitutional crisis by any standards.

While we are safeguarding the rights of nations within the European Community, we must follow the Germans and Spaniards in providing democratic accountability and safeguards for the nationl and regions within Europe's conglomerate states. I remind the House that Britain is not and never has been a nation. Rather, it is a union of nations, which the Government have not respected in recent years. The principle of subsidiarity must not stop at Westminster but must go further.

Many Conservative Members have drawn great inspiration from the dreadful speech by the right hon. Member for Finchley (Mrs. Thatcher) in Bruges in 1988. The speech included the following passage of awe-inspiring hypocrisy: To try to suppress nationhood and concentrate power at the centre of a European conglomerate would be highly damaging and would jeopardise the objectives we seek to achieve. Europe will be stronger precisely because it has France as France, Spain as Spain, and Britain as Britain, each with its own customs, traditions and identity. It would be folly to try to fit them into some sort of identikit European personality. The right hon. Member for Finchley—the second hammer of the Scots—tried to fit the Scottish nation into an identikit Thatcherite personality that was totally alien and abhorrent to most of our national customs, to our traditions and identity. She spent her premiership concentrating unprecedented power at the centre of her Whitehall conglomerate, yet there she was, whingeing about the supression of nationhood.

The supression of historic nations is a dangerous business, as we see in many parts of Europe today. The House would do well to recognise that, within the next couple of years, Scotland will have its own Parliament for a people who overwhelminghly aspire to have home rule within the United Kingdom and direct access to European institutions on the same basis as the German Lander and Spain's national regions.

I appreciate that this debate must be difficult for many people from all political persuasions in England. It must be difficult for English people to reconcile themselves to sharing powers with other nations after such a long history of independence and, latterly, of dominating other nations. But history is marching on, and not even England can opt out of the reality that is developing in Europe. It can stand on the sidelines while everyone else moves on but it cannot stop the process. This is not the Flat Earth Society but the real world, and we should take part in it.

The House could learn a little from Scotland's experience in 1707, when the rulers of Scotland were persuaded—or perhaps bribed—to enter what was described as "an incorporating union" with England. It was very controversial. There was to be a common market, a monetary union and a political union. It left many important national institutions secure—the legal system, the banks, the Church and the administrative structure, but the one fatal flaw was that we sacrificed our Parliament. Otherwise, that union has been a tremendous success, with shared resources and opportunities, and great achievements over the years. However, the lack of parliamentary accountability over the Executive in Scotland has now degenerated into a running sore, particularly as the political priorities of our two nations have increasingly diverged in the past 50 years.

Increasingly, Scots look to European institutions for protection against the excesses of an unaccountable British Government. This Parliament is supposed to apply democratic scrutiny and accountability to Scotland's national administration, but it does not do so. Under present circumstances, it cannot do so.

The great totem of this debate seems to be the sanctity and sovereignty of this House. It has been described over the years as the Mother of Parliaments but in recent years it would be more appropriate to describe it, for so many of our citizens, as the ugly sister. What sort of mother inflicts a poll tax on its people? What kind of scrutiny system allows a poll tax to be inflicted on a nation? There are lessons to be drawn from that.

There are fundamental flaws in our democratic system, both in the United Kingdom and the European Community. Major constitutional reforms are long overdue and I welcome the fact that the Laour party is leading the debate in those areas. If the House is to rise to the occasion of this debate, it should tell the Prime Minister to go to Maastricht and work positively toward economic convergence and monetary and political union with the European Community, even if it involves going in the direction of federalism. We must also take radical steps to correct the democratic deficit in the European Community and the United Kingdom. The Prime Minister will not do that, but the Labour party will.

7.58 pm

Mr. Julian Amery (Brighton, Pavilion)

There has been a galaxy of talent in this debate from the Front and Back Benches, but the most important speech was made outside the House of Commons yesterday—by Mr. Delors in Strasbourg. The words of my right hon. Friend the Member for Finchley (Mrs. Thatcher) about our being on a conveyor belt to federalism were still ringing in my ears when I picked up the morning papers and read that Mr. Delors had said that Ministers had betrayed everything and that there was no federalism left in the proposals contained in the Council of Ministers' draft. The British had undermined them.

I rubbed my eyes and wondered what it all meant. I then thought that it would be rather fun if MI6 had suborned Mr. Delors and persuaded him—I do not know how—that perhaps he should stop being a federalist. Or was he throwing dust into the eyes of my right hon. Friend the Prime Minister so that he would think that he did not have to work so hard? On analysing the speech, I concluded that it was a real cry of anguish from a man who is a genuine federalist and saw his whole work in danger of being betrayed.

Those of us who are frightened of federalism should take heed of the entirely opposite view expressed by Mr. Delors. He said that the Council of Ministers was betraying the principles of the founding fathers, by whom he meant Jean Monnet and the Demochristian leaders—Adenauer, Gaspari and Schumann—who were genuinely federalist. However, they were not the only founders. Winston Churchill was the man who started the process. He thought of European union as something like the old British Commonwealth as defined in the Statute of Westminster. Why did he think that?

People often forget that, at the beginning of the century, we offered Canada, Australia, New Zealand, South Africa and Newfoundland a federal empire with a single Government, single navy and total free trade—money did not enter the debate, because we were all on the gold standard. Those countries turned down the offer. So we developed the idea of a Commonwealth, although we did not call it that in those days. In the first world war, in the treaty of Versailles, in the slump of 1929–31 and in the second world war, these countries worked together with us to such an extent that we constituted between us a sort of super-power.

De Gaulle shared Churchill's view. He put it in his caustic way that he wanted to see a Europe on English lines but without the British.

Mr. Delors got it wrong. He said that no intergovernmental group had ever been successful. It is curious that a Frenchman should have got it wrong, because, without the Commonwealth, France probably would not have won the first world war and would not have been rescued from the second.

There have been two great strands of European thinking: the federalist and the union of states, represented by the British and the French. I do not believe that either strand will prevail. A balance will be struck between the two, but at present the balance is wrong. The Council of Ministers should be the Cabinet of Europe and the Commission should be its secretariat, with the Parliament supervising the Commission's work.

President Giscard d'Estaing got it about right when he would not let Roy Jenkins come to the Ministers' dinner and said that he had better come for the cigars and coffee afterwards. We have allowed the Commission to get too much power into its hands. My right hon. Friend the Member for Finchley (Mrs. Thatcher) saw the danger clearly, but made a mistake by demonising Mr. Delors. She should have crossed swords not with a civil servant, but with the Chancellor of Germany or the President of France, who were her opposite numbers. She made the mistake of building up the image of Mr. Delors.

We need to strike a balance somewhere in between—we need more institutions than the old Commonwealth had, but certainly not a united states on American lines. As my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) said yesterday when he quoted Churchill, we are planting a tree—I would call it a forest—not putting together a bit of machinery. That tree will grow in its own mysterious way, and when we look back on it we shall be able to say that it is neither a federation nor a confederation, but something new, based on new constitutional forms, which have not yet been devised.

We must remember that behind my right hon. and learned Friend's vision, which I share and hope to try to convey, there is a basic fear. The movement to European union came out of a fear of Germany. That country was down, but there was a fear that it might revive, and revive it has. There are now 80 million—if one includes Austria, not far short of 90 million—Germans. Under de Gaulle and his successors, the French thought that they were the jockey who controlled the German horse. But once the wall fell, all that changed, and we now have not a Paris-Bonn axis, but a Paris-Berlin axis. Is that feasible?

I remember sitting in the gallery of the French National Assembly in 1954. The French Parliament was then a Parliament, not what it is today, and the Assembly would not accept the plans for German rearmament unless Britain also participated in it. Mr. Herriott was a large man—I remember him well—and it was because of his speech, in which he said that the French would not enter the process unless the British also did so, that the British Government made their proposal for the Western European Union. This was the real foundation of Europe.

The problem is to know how to cope with the greater Germany. There are two ways in which to do so. We took the first option in 1954, when we decided to bring Britain more fully into the European combination. The French would not agree to German rearmament without British participation, so we had to play our full part—if Britain, France and Germany came together with the other European countries, that would constitute an important beginning. Beyond that process, the enlargement of Europe is the key. I am not against deepening and strengthening the combination, but we must bring in northern and eastern Europe. This is our "new frontier". We must do everything to encourage eastern Europe into the Community; nothing must be done to exclude it. My impression is that the Government understand those points well, and on that basis I support the Government tonight.

8.7 pm

Dr. Dafydd Elis Thomas (Meirionnydd Nant Conwy)

It is a privilege to follow the right hon. Member for Brighton, Pavilion (Mr. Amery), and I am sure that we all appreciate his historical references: he speaks with the experience of having participated in the processes, particularly the second great European civil war, the starting point of the Community.

Another fascinating aspect of this two-day debate is that there have been interesting divisions of opinion across the Floor of the House which are not reflected in the motions. We can see the different emphases placed on issues by the various parties and the problems faced by them in adjusting to the changes taking place in mainland Europe. Whether we use the metaphors of forests or pillars in the debate about ever closer union, the fact is that there is a moving together of the economic, environmental, social, cultural and political strands towards a greater convergence, and we must decide how we relate to that process.

My passport is in my breast pocket near my heart. It is not there is case I have to leave the country urgently, but because it is smaller than the old British passport and fits there more conveniently. It is a pleasant, burgundy colour, and the first words in it are "European Community". I have no problem with a notion of being a European citizen. That phrase is repeated inside the passport in nine languages, one of which, Irish, I recognise as a Celtic language. It is closely related to one of the languages that I speak, Welsh.

Beneath the words "European Community" the passport states: United Kingdom of Great Britain and Northern Ireland —the name of the state of which I am a member. However, the name of the state does not coincide with the description of my nationality. The machine-readable plastic on the back of the passport states "British citizen". The birthplace of this particular British citizen is given as Carmarthen, although the authority that issued the passport was the passport office in Liverpool.

The complexity of location, identity and administration does not cause me a personal identity crisis. I feel an affiliation simultaneously with all those different centres of administration and levels of government—European, UKanian, British, Welsh and English regional. I have no difficulty with the idea of unity in diversity, which is what I believe the tower of Babel was about—without going into detail on the theological references of the hon. Member for Antrim, North (Rev. Ian Paisley).

Like the hon. Member for East Lothian (Mr. Home Robertson), I have always viewed the political structure of the United Kingdom in a diverse way. The United Kingdom is a multilingual, multinational, multicultural, multi-ethnic state. With its diversity and variety of people, it has always been so. All the people of these islands, including people whose families moved here from the new Commonwealth countries, are citizens of Europe. This is not an island race and never has been.

Europe has changed and will change through population movements and through cultural and social changes. This is a subject on which I can speak with authority, because the Celtic culture of which I and other hon. Members are living exhibits is being celebrated this year at a marvellous exhibition in the Palazzo Grassi in Venice which is entitled "The Celts, the Origins of Europe". The Celtic experience in these islands proves conclusively that languages, identities and cultures can and do survive within state structures in which they are not properly represented.

I would have no fear for the future of the English identity, although some English Members seem to have such a fear, as we move towards greater European unity. Such a unity will be based not on the model of the United Kingdom as a unitary state, but on the model of European federalism. I agree with the points made earlier that the likely outcome of the debate on Europe about federalism and nation statism would fall somewhere between the two.

I mention federalism because part of our difficulty in the debate is an understanding of the terms arising from different political traditions. The debate about European union is seen by probably a majority of British people—and certainly by a majority of British politicians—through our experiences of being inside a unitary state in which political power is seen to be located in one place. If we think, as so many hon. Members do, that political powers exist only in one place—that is, here—then when those powers are transferred or seen to be exercised elsewhere, it appears as a threat to sovereignty. In that sense, the British notion of sovereignty differs from that of our European partners because that definition of sovereignty arises from our parliamentary history and procedure.

Arising from that understanding of sovereignty there is a misunderstanding of the definition of federalism. Those who live not in a federal system but in a unitary state cannot apparently understand the notion that political powers can be organised in other ways. For example, within the German federal model, which was imposed upon Germany by the United States and the other allies, there are clearly defined levels of powers and responsibilities. Each level of government is, as it were, sovereign in its area of competence, and that brings us to that other concept with which the House seems to have difficulty, the concept of subsidiarity.

As the hon. Members for East Lothian arid for Durham, North (Mr. Radice) said, because the United Kingdom is a unitary state, local government—or what is left of it—regional administrations and the national territorial offices, Scottish Office, Welsh Office and Northern Ireland Office, are all creations of the Westminster Parliament and can be abolished by it, as were the metropolitan councils and the Government and Parliament of Northern Ireland.

Mr. Brian Sedgemore (Hackney, South and Shoreditch)

And the GLC.

Dr. Thomas

Yes, and the GLC.

That could never happen in a federal system, because, on the mainland, federal system, the powers of local, regional and national authorities and the powers of state governments at all levels are guaranteed as constitutional rights. Subsidiarity is precisely about that. It is about not carrying out functions at multinational level which can be better carried out at member state level, and about not carrying out functions at that level that can better be carried out at national, regional, or local level.

Subsidiarity is the essential principle of how federalism works, operating according to levels of power. Not surprisingly, as Jacques Delors has said, subsidiarity comes from a moral requirement, a limit to interference from a higher authority vis a vis a person or a community". Of course the term has its roots in the social doctrine of the Catholic Church—the need to disperse human political power in a fallen world. I shall not take that theological debate any further.

It is in those contexts that we need to understand the vocation federale as it appears in the Luxembourg draft. It is a process, an ideal, a desire. The fact that the United Kingdom, with its parliamentary system, has a different culture and tradition arising out of the particular history of the unitary system does not make our traditions morally better or more politically effective or efficient. The principle of parliamentary sovereignty has more often blocked than aided the possibility of popular sovereignty. It has made it difficult for politicians and parties to deal seriously with the relationship between citizens and the state and, in particular, the relationship between different parts of the state and its centre.

I am not the only one who argues that the unitary state in the United Kingdom is the preservation into the 20th century of a constitutional order designed for the 17th century. Tom Nairn beautifully described it when he said: the state is like the advanced passenger train, a 21st century vehicle intended to run on existing tracks. What has been said in the debate about parliamentary sovereignty only covers up what has really happened in terms of Government centralisation and corporate decision-taking elsewhere. Our political traditions themselves are now in crisis, and part of that crisis is reflected in the debate. I ask the House not to prevent us from resolving that crisis by refusing to contribute actively to the political culture of that Europe of which we are an integral part.

8.15 pm

Sir Michael Marshall (Arundel)

I shall not follow the line of the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas) because in a sense he has made one of the points that I would have made, which is simply that he reflects the United Kingdom and the fact that, as part of a union, we should understand some of the arguments in a wider sense than is sometimes suggested in the rather navel-contemplating activities which sometimes characterise our debates.

As a confessed Euro-enthusiast, I came to the House to help secure entry to the Community, but I have my reservations and shall touch on them in a moment. There has been a sense of deja vu about much of the debate. Those in favour of membership of the Community are broadly still in favour and those who are against are still against. In that sense, we have not learnt anything new, I do not share the worries of my right hon. Friend the Member for Chingford (Mr. Tebbit) about the terms of the motion.

As I look at the complexities of what will be considered at Maastricht, I am convinced that we are exceptionally fortunate to have in my right hon. Friends the Prime Minister and the Foreign Secretary representatives of our Parliament and country who will bring back an agreement that is acceptable to the House and the country. However, I should like to draw to the attention of the House and the Government one or two worrying matters. I shall deal first with the role of our Parliament and people and our industry, and then deal with the role of Europe and the wider world beyond.

In terms of the role of our Parliament, I agree with those who feel that it is our responsibility to give leadership and not to fall back on referendums and seek in some way to arouse a great argument in the country which I do not think is there to be aroused. Despite my best endeavours, it is quite difficult in my constituency to attract people to a discussion on the issues before the House. There seems to be a general feeling, in some ways a slight sense of fatalism, that we are in and will not come out. In that sense, some moves are inevitable and we look to our leaders to achieve the best deal that they can—that is the general sentiment.

In considering some of the difficulties, I should like to take into account the views of our business and industrial communities, because little attention has been paid to them in the debate. In the real world, business is years ahead of us in carrying through what the process of being a member of the Community implies. In terms of multinationalism in Europe, we should consider what is happening to large parts of British industry and the effect of flows of inward and outward capital.

We speak in many old-fashioned ways about the British share of the market or about some kind of quota arrangement, but such matters are no longer relevant. I shall take two examples from within or near my constituency, the first of which is Matra Marconi. In its activities, whether in the defence market or the space market, it is difficult to define what is the British share. The shares depend on how the various constituent plants in that company carry out their contractual obligations, and the earnings from these share-outs are spread out across the company and reflected in investment patterns.

In horticulture, which is important in my constituency, joint British and Dutch companies are a major feature. The argument that we have had about the Dutch subsidies for heating and so on begin to drop away when we see the shared resources, shared opportunities and shared employment that can come from such joint ventures. My test of Maastricht is to ask how and in what way will the decisions being made assist the broad industrial development of Europe—naturally that includes Britain —while being realistic about what the multinational industries that we are developing mean to us all.

The House will understand why I now move on to deal with a wider world. I am especially concerned that some of the aspects of the proposals for Maastricht will raise the hurdles and make it more difficult for countries in central and eastern Europe and the Baltic states, quite apart from the EFTA countries which have fewer problems, to accede to the EC. Therefore, I was glad to hear my right hon. Friend the Foreign Secretary speaking about the pace of change. I still think that we have been driven at a faster pace than would have been sensible, and that we should have had an opportunity to bring in slightly wider membership before getting into this rather closed shop.

In that regard, I strongly urge the political case for bringing some of the countries of central and eastern Europe into the Community very soon. I am sure that this view is shared throughout the House. The ending of the cold war must be replaced by an alliance wrapped round with hoops of steel. We want to ensure that those countries that are increasingly moving not only into multi-party, democratic ways of government but into a free market are brought without our system. We can then concentrate on the remaining problems.

I believe that we shall see the accession of EFTA countries, bringing with them in their train, because of their special links, the Baltic states, and the pressures will accelerate. However, that process will be inhibited by some aspects of the Maastricht proposals, and that is why the detailed way in which my right hon. Friend the Prime Minister outlined our position, rejecting and resisting some aspects of those proposals, was helpful.

In that widening of the Community, we are being observed by the newly emerging democracies, not just in Europe but in Africa, Asia and Latin America. We have to find ways within the developments in the Community to assist in the process of democratic and economic development. We have to consider the imbalance of world trade, and we must come back to the GATT question. These are some of the background pieces of the argument that we tend to ignore as we narrow in on what is mainly a domestic debate.

I should have liked to touch on many other aspects of the matter—the future role of the Commission, the European Parliament and, as I said in an intervention, the question whether we are suffering under the six-month rule of presidency moving around—that need to be debated once again. The structure by which we approach some of these questions is far from ideal. However, when we look at the world at large, I hope that we can reflect an outward-looking attitude for Europe, not only towards eastern and central Europe but to the many other questions that remain to be resolved. For example, one third of the world has the problem of too much food and two thirds of it is at or below survival level.

These broader questions must be considered if we are not to be too Eurocentric in our arguments. I have the greatest faith in my right hon. Friends the Prime Minister and the Foreign Secretary. I hope that, even at this late hour, the Opposition will realise, if they see themselves as serious contenders for government, that there is much to be said for all parties coming together. When we travel abroad, parliamentarians across party lines can be effective and punch our weight. Sometimes when we have internal arguments such as those of the past day or two, we lose some force and credibility. With that plea, difficult though it may be in an election year, I thank the House for listening to my speech.

8.25 pm

Sir Patrick Duffy (Sheffield, Attercliffe)

It is always a pleasure to follow the hon. Member for Arundel (Sir M. Marshall). However, I know that he will understand if I do not dwell on his remarks. I wish to recall the speech of the right hon. Member for Blaby (Mr. Lawson), in which he argued that the debate should have a financial approach and should not be guided by Foreign Office or security considerations. He reminded me of Thomas Hobbes's classical work "The Leviathan", in which it is argued that there is no instinct more profound than security in the conduct of human affairs. That is where my concern lies.

I hope that the House will bear with me if I explain my long-standing attachment to Europe. I am one of the few remaining Labour Members of Parliament who defied the party whip on 28 October 1971. However, unlike my hon. Friends who incurred a censure motion or just a rebuke, on a Wednesday night during the following month of November, I had to travel up to Sheffield to face a sacking motion. After a crowded meeting that lasted for more than four hours, I survived by only five votes. That long debate, which had gone on all summer and into the autumn and had been conducted, as some hon. Members will know, in the constituencies as well as here, bit into my soul. I could have regarded the referendum option then as a convenient bolthole, but I did not. I have never doubted that the role of a Member of Parliament worth his salt is to stand his ground, defend his corner and stand by what he believes.

Despite the long-standing attachment to Europe, I now see that a Europe that co-operates whenever possible and agrees to disagree when no common ground can be found is more desirable. I have backed off a federal preference. Because of my experience, I see that we cannot stand on the sidelines while others frame new structures, whether they are economic, political, social or, given my special interest, defence. On the other hand, the difference within Europe on that emerging architecture remain so profound that I can see no alternative to the intergovernmental treaty approach and its implied perception or a European "temple with columns" as against Mr. Delors' "tree with branches".

This preference is confirmed by a brief examination of the prospect for a European community defence policy. We are all aware that the nature of the threat to the security of Europe has changed dramatically. There is a recognition, in the face of potential instability to the east and to the south, of the need for the western alliance to remain strong. It would be dangerous to undercut NATO's sole responsibility for the defence of NATO territory. We need to renew, not replace, the security guarantee that NATO has given us for the past 42 years.

We should also ask ourselves whether we will be prepared to foot the bill for going it alone without the Americans, as if Europe could do so without America's satellite and intelligence network or its transport facilities. I was surprised when the right hon. Members for Yeovil (Mr. Ashdown) and for Old Bexley and Sidcup (Mr. Heath) said that there could be an independent European pillar within the alliance, perhaps within the foreseeable future.

NATO is an alliance which has stood the test of time and also won the confidence of former members of the Warsaw pact. Only a month ago a Soviet figure as senior as Mr. Yuri Deryabin, the Soviet deputy Foreign Minister, was endorsing NATO as the security organisation for all of Europe and seeking formal ties. Yet a clear division has emerged in recent weeks between leading members of the alliance on how a revitalised and reinforced the Western European Union should link NATO and the political arm of the EC.

Most member countries would like to have it both ways —to conserve NATO and its strong links with our north American allies and, at the same time, like the right hon. Members for Old Bexley and Sidcup and for Yeovil—I understand why—they want to give Europe a more pronounced role in its own defence. But the two objectives are not easily reconcilable in practice, as the sharp exchanges over the merits of two rival plans, one British-Italian and the other French-German, have demonstrated.

Britain and Italy want the WEU to be used solely for operations outside the NATO area, thus complementing the alliance and avoiding duplication, while France and Germany have envisaged a corps which might operate both inside and outside—although how that will be done remains unclear.

However, the Rome summit was useful, as the Prime Minister told the House yesterday, in laying down the parameters within which it is feasible for the Europeans to work out their defence co-operation and avoid this particular dilemma. Whether the problem has really been disposed of was the subject of my intervention yesterday in the Prime Minister's speech and today in the Foreign Secretary's speech. Let me explain why.

The Prime Minister played a prominent and commendable part in Rome in devising an agreed framework for a stronger European defence identity within the alliance. He secured agreement among NATO leaders, including Mr. Mitterrand, that NATO had a continuing role to play as the main decision making forum on defence matters in Europe.

But might the isolation of Mr. Mitterrand on this question bode ill for Maastricht when the issue of a common European defence policy will be back on the agenda? The 11: 1 vote in Rome against Mr. Mitterrand on this question is not yet reflected in NATO parliamentary circles, as the hon. Member for Wealden (Sir G. Johnson Smith) who leads the United Kingdom delegation to the North Atlantic Assembly knows.

Hon. Members from both sides of the House were unable to secure agreement in London a year ago on out-of-area activities—the intended role of the new-look WEU. Nor did they succeed in disposing of the Franco-German proposal at their Madrid meeting before the Rome summit.

Furthermore, Mr. Mitterrand refused formally to acknowledge the primacy of NATO at that summit. Why Not? Neither could he agree to a separate NATO declaration on the Soviet Union and the danger of nuclear proliferation. Why not? At whom was President Bush's admonition directed?

Will it be enough for the Prime Minister at Maastricht, as he implied yesterday, to wave the NATO summit document in Mr. Mitterrand's face if the French leader makes any further move to separate Europe's defence responsibilities from NATO? Clearly, there may be scope and need for further bilaterals before Maastricht.

Thus, whatever pillars may be involved eventually in the construction of the European temple, it is obvious that a defence pillar that is exclusively European cannot be seen as practical and workable. Nor is it considered desirable in eastern Europe and the Soviet Union. Nor is there support anywhere in Europe for a policy which might cut across NATO or duplicate its military structure.

The security structures that we choose must be properly thought through and practicable. They must avoid duplication and must in all forms be complementary to NATO. That approach is not possible in a federal context. It can only be realistically pursued on the basis of intergovernmental treaties.

8.34 pm

Sir Norman Fowler (Sutton Coldfield)

The House listened to the hon. Member for Sheffield, Attercliffe (Sir P. Duffy) with interest and with some admiration, knowing his record on the European issue.

I have listened for almost 13 hours to virtually all the speeches that have been made during the past two days, and they have brought back two memories. First, they have brought back memories of my time as a Minister negotiating in Brussels. The highlight occurred while I was at the Department of Transport. In those days, responsibilities were divided between the Department of Transport and the Department of Trade, which looked after air transport. Thus, when I went to Brussels I went with the then Secretary of State for Trade, my right hon. Friend the Member for Chingford (Mr. Tebbit). Lunch was organised during a break in negotiations and to facilitate discussions a translator was put between myself and my right hon. Friend. This evening, I needed no translator to understand his message.

The second memory was as a Back Bencher in 1971, when I took part in the debate on entry into the EC and voted for entry. We in the 1970 intake took great interest in the views of others elected in that year. It is a simple statement of fact that two of the most vociferous, persistent and eloquent opponents of the EC then are now the Leader of the Opposition and the shadow Foreign Secretary. So we are not entirely prepared to take lectures from the Opposition Front Bench on Europeanism. We hear what they say, but we also remember their opposition to Community entry in the 1970s, their fight to withdraw from the Community in the 1980s and their extraordinary position of subservience today.

Labour's European travels have been one of the greatest political mystery tours of the post-war years. No one knows where the journey is likely to take them next, but one thing that has been made clear by this debate is that no one in his right mind would believe that our negotiations in Europe should be left to the Leader of the Opposition.

I speak as someone who voted for our entry into the Community, who supported and supports the establishment of a free and single market and who, like my right hon. Friend the Prime Minister, believes that the Community can help to secure a lasting peace across the continent.

At the same time, it would be foolish to believe that the British public are not concerned about some of the developments inside the Community. They are concerned about what they see as an unnecessary interference in our national life. They are concerned about lawless acts being taken to prevent legitimate trade. They are concerned about the Commission for ever seeking to extend its operations. That is not an argument for leaving the Community, but it is an argument for the British public being represented by a tough Government who, while committed to the Community, are prepared and able to fight for the kind of Europe that we want, a Europe where the maximum is left to the nation state.

That is why the Government are right to set out their opposition to a federal Europe. I certainly do not want a united states of Europe, and I suspect that few Conservative Members would. That is why my right hon. Friend the Foreign Secretary was so right to say that much can be achieved by pure co-operation in, for example, police work, and why he was also right to set out his opposition to an extension of Community competence in areas such as social policy.

Let it be clear what I say about social policy. For example, I believe that employee involvement is one of the great challenges which stand before British industry. I sit on the board of a major company which has a worker director. I do not believe that that is the work of the devil, but such decisions are best decided at national level. We are saying not that employee involvement is in some way wrong, but that such decision making should be at the national, local or company level and voluntary. If a party wishes, for example, to have a minimum wages policy, let it set that out, as I suspect the Opposition will do, in its manifesto and argue it in an election. But it is completely unnecessary to have a Community policy on such things.

Much of our debate has concerned economic and monetary union, and, in particular, the single currency. What we must decide tonight is not whether to accept a single currency here and now, but whether we should reject it here and now, without further discussion or consideration and without allowing the arguments to develop.

I confess that, over the past few months, I have not stumped the country advocating a single European currency in every constituency, but it strikes me as absurd to walk away at this stage, for several reasons. First, the Government are set to secure an agreement that will allow us to keep our options open in regard to whether we want such a currency and, at the same time, to influence the eventual outcome. That is a substantial negotiating success, on which the Government should be congratulated.

Secondly, industry would think us mad if we simply walked away. I agree with my hon. Friend the Member for Arundel (Sir M. Marshall). One of the advantages that we recycled Cabinet Ministers have is an involvement in industry; of course, some of the unreconstructed Cabinet Ministers have that as well. It is obvious to us that industry now considers Europe to be crucially important: Europe is the home market. We should at least listen when organisations such as the CBI set out the transaction costs of hedging, and all the other costs, and advocate movement towards a single currency. We need not accept the argument in its entirety, but it is certainly an argument against rejection at this stage.

Thirdly, if we walked away now, we should have to accept the probability that the other Community members would form their own agreement. Such an agreement might be outside the terms of the Rome treaty, but it could nevertheless be very effective. That, by definition, would mean that we would play no part whatever in the developments. The Government, surely, are entirely right: by keeping our options open, they preserve our national interests, allowing us to weigh the alternatives when the time comes.

Some now argue for a referendum—and it is fair to add that some proponents of that view do not seek to give voice to a long-held belief in the extension of democratic rights which they have already presented to the country consistently, month by month and year by year; their real purpose is to find a way of killing anything that comes from Maastricht. If that cannot be done in one way, it must be done in another. There was no referendum on the Single European Act, and I personally remember no clamour for such a referendum around the Cabinet table at which I then sat.

I can say with absolute certainty that, over the ensuing months, it will be Parliament which decides. The crucial issue was identified by the right hon. Member for Manchester, Gorton (Mr. Kaufman), who rightly said that what the public must decide was which party best represented their interests. Is it the Labour party, which, over most of the past 20 years, has traditionally expressed antagonism to the Community, and which has now attained the uncritical zeal of the convert? Or is it the Conservative party, which took the country into the Community, helped to create the single market and makes it clear today that it will continue to fight for our national interests?

No one needs a crystal ball to know the outcome. A few days ago, an opinion poll carried out by ICM showed that, by a margin of two to one, the public preferred negotiations to be conducted by my right hon. Friends the Prime Minister and the Foreign Secretary, rather than by the Leader of the Opposition and the shadow Foreign Secretary.

I am convinced of one thing: that margin deserves to be increased still further following this debate. I think that the public will believe that my right hon. Friends the Prime Minister and the Foreign Secretary are exactly the right people to represent our interests in Brussels.

8.44 pm

Mr. Brian Sedgemore (Hackney, South and Shoreditch)

Right on cue, a convert rises.

Undoubtedly, the people in this country who are the most excited about Maastricht are the young. Well they might be, because they have most to gain from the creation of a single European currency and political union. I outlined my views on both those subjects on 15 June 1990 in a 40-minute speech. I shall not attempt to repeat what I said then, for repetition makes bores of us all in the House; I am glad, however, that the scepticism that greeted what I had to say about the benefits of a single European currency has since been replaced by understanding and support in several quarters. The translucent message from the corridors of power, in Europe and in Whitehall, is that a single currency will be established, and that we shall be part of it. The point of no return has been passed.

I consider the idea that the issue should be decided by a referendum nothing short of bizarre. In the run-up to such a referendum, do the Government really intend to put through the letterboxes of Britain 17 million textbooks entitled "Fixed Exchange Rates and the Economic Consequences of EMU, by John Major"? Judging by the speech that the Prime Minister made yesterday, he is as capable of writing seriously about such matters as was Don Giovanni of writing a book entitled "Everything You Wanted To Know About Celibacy ".

Speaking more generally, I suppose that I could sum up the Prime Minister's speech—without rancour—as timid, devoid of national purpose and lacking in inspiration. As he spoke, I asked myself whether the next 100 years of British history were to reflect the barren nature of his personality: the answer must be never, never, never.

In my view, the creation of a single currency will be a major determinant of the course of British history during the next 100 years. I do not think that we should either underestimate or understate the magnitude of its consequences. I believe that monetary union is political union, and that the creation of a single currency is federalism. Indeed, the creation of a single currency is federalism without democracy.

That is why the treaty on political union at Maastricht cannot be seen as some troublesome adjunct to the treaty on monetary union. The treaty on political union must begin to supply the democratic foundations of a devolved democratic federal system of government, without which monetary union will never survive. The one is inconceivable and unworkable without the other.

Recently, an ambassador told me that issues such as defence and foreign policy were surely on a different plane from economic issues, involving as they did considerations of history, culture and identity. That is a plausible thesis; certainly, foreign policy and defence complicate the issue of political union and the directon of federalism.

Let us consider this, however. One does not need to be an economic genius to understand that, when a country goes to war, the value of its currency is threatened, often decimated. Does any hon. Member seriously think that, after Britain has signed up for a single currency, we could go to war on our own and expect the 11 countries who share the same currency to stand idly by and see the value of their currency wrecked, for ever depreciating. just because Britain was in one of its periodic warmongering fits? Of course not. With a single currency in place., that could no more happen than the Government of the United Kingdom could today allow Wales or Scotland to go off and fight a war of its own. With a single currency, a common defence and foreign policy becomes inevitable and inexorable.

One of our tasks in the House is to explain that honestly to the public. I am, of course, conscious that, as a convert to some important aspects of European integration, I risk being impeached for a lack of consistency; however, I am always happy to recall the words of Ralph Emerson, who said: A foolish consistency is the hobgoblin of little minds, adored by little statemen and philosophers and divines. That brings me naturally to the scribblings of the right hon. Member for Chingford (Mr. Tebbit). He provides the intellectual thrust and gravitas of the arguments of those who oppose monetary and political union. He set out his views in May 1990 in that weighty political magazine—I have a copy—The Field. His article is illustrated with huge colour photographs of the white cliffs of Dover in case the alligazoos who read it were tempted to miss the point.

The right hon. Member for Chingford said that he cannot go along with the negotiations at Maastricht because he wants to protect Britain from "rabid dogs and dictators"—some might say from himself. He said: Sterling looks set to be masticated by EM Us, ERMs and ECUs before being made fodder for that monetary successor to the Panzer, the Deutsches Bundesbank. Have you noticed, Mr. Speaker, how the right hon. Gentleman is moderating language and style in his old age? There is no mention of U-boats or the Luftwaffe.

In his ignorance, the right hon. Member for Chingford I have given him notice of this—sees British history as a continuum stretching back to the dawn of time. He is quite unable to understand that the political settlement of 1688 had little in common with what went before, that the post-1832 settlement had little in common with the 1688 settlement and that the political situation today has virtually nothing in common with the post-1832 settlement.

What I cannot understand is that the right hon. Member for Chingford and the Bruges group seem to support the existing system of government in Europe, which I would describe as a huddle of 13 bureaucracies in Brussels. Why do those people not want to bring democracy to a European Government that is currently bureaucratic, elitist, oligarchic and secretive? Perhaps it is because that is precisely the type of Government that the Conservatives developed in Britain in the 1980s.

I believe that political union in Maastricht must put an end to that sort of Government by creating a strong European Parliament at the head of accountable, devolved, democratic federal structures.

There is the question of sovereignty. In an article in The Guardian on 12 November 1991 the right hon. Member for Chingford said—it is a widely held view by those who did not read history at school— Sovereignty cannot be shared or pooled. It is either here in our hands, or elsewhere in those of other institutions. It is possible that, in a period described by historians as the dark ages, sovereignty was indissoluble and indivisible. However, since then we have seen the rise of mercantilism in Tudor times, the rise of capitalism in the 17th, 18th and 19th centuries, and the rise of socialism. Under each of those ideologies, sovereignty has always, to a greater or lesser extent, been pooled between nation states. In short, perhaps for a period of 700 years in British political history, sovereignty has not been to be indissoluble and indivisible.

There is a nasty side to the opposition to the treaty on political union expressed by a species known as Essex men and Essex politicians. They tend to be vulgar, philistine, xenophobic and nationalist. Surely, because we cannot afford those ideas to infest Europe, we need political union and a federal Government as a bulwark for freedom and civilised living.

There is a litmus test for voting tonight. If the right hon. Member for Chingford can support the Government motion, we will know that their motion is fatally flawed. If he rejects it, perhaps it has some merit. The real merit lies in the amendment to the motion in the name of my right hon. Friend the Member for Islwyn (Mr. Kinnock), and I shall be supporting that.

8.54 pm

Mr. Michael Spicer (Worcestershire, South)

The hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) has all the enthusiasm of a convert, and, if he does not mind, I will not follow his line.

For the past four hours, I have been pondering the question asked by my hon. Friend the Member for Surrey, North-West (Mr. Grylls): why we are discussing political union in Europe when we have not achieved an internal market. It is a good question. Part of the answer must lie in the fact that many of the other countries in Europe do not want an internal market.

When I was a Minister responsible for aviation or in the Departments of Energy and the Environment, I frequently went to the Council of Ministers. Invariably, I found an agenda before me on which the first item was often a British motion to extend the internal market and create freedom—whether it be for air fares, investment in other airlines, flying wherever one wanted in Europe or a free flow of energy around Europe. Invariably, that first item was voted down. That occurred because of national interest.

In the case of aviation, it was because the Germans were concerned about their airline. I can recollect an occasion on which the then Secretary of State, my right hon. Friend the Member for Cirencester and Tewksbury (Mr. Ridley) was present. He was so impressed by the protectionism of the German Minister for Aviation that he called him "Herr Lufthansa". The same was true of energy. The Germans were concerned about the ravages that might occur in their country because of cheap French nuclear-based electricity.

The second item, which was often proposed by the French and Germans, was for greater standardisation in Europe. In the case of aviation, it called for Europewide air security or air safety regime and in the case of energy, it called for common standards of energy conservation. The other members of the Council usually voted in favour of that item.

The third item was the press release discussion, when it was decided that the British position was anticommunautaire and that the French and German position was communautaire.

The fourth item was the bribe which was handed out to the Portuguese, Greeks and others who had disagreed with the first item but voted in favour of the second and third items. So my hon. Friend the Member for Surrey, North-West has his answer. We are discussing this rush towards political union largely because other countries do not agree with the internal market and many of the measures associated with it.

I accept that this is a Christmas stocking motion, with presents for everybody. The present that I happily unwrap for myself is the commitment against federalism. I voted in favour of our entry of the EC, and I voted for the Single European Act. I did so on both occasions because I believed that it would be in Britain's interests to be a member of a free trading, confident and outward-looking association of European nations. I did so because I believed, as did other hon. Members, that co-operation between the nations of Europe was better than what had gone before. However, at all times I voted for a common market, not for a common country.

It has been said that the Single European Act was the watershed at which point essential political sovereignty was surrendered. That is not true. The Single European Act was about trade, association and co-operation. The draft Dutch treaty on economic and monetary union is about co-ordination, unity and single government.

I agree that central—not peripheral—to the debate about federalism is the issue of a single currency. The relationship between monetary and economic union and political union is recognised by the draft Dutch treaty on monetary union. That treaty rejoices in the relationship. The point is recognised by the German Government, and it was recognised by my right hon. Friend the Prime Minister when, as Chancellor of the Exchequer, he gave evidence to the Treasury and Civil Service Select Committee.

If there is a single currency, there is political union. The one is part of the other. The reason for that has been made clear on several occasions during our debate. In order to operate a single currency, there must by definition be single monetary, interest rate, budgetary, fiscal and taxation policies. In other words, there must be a single economic authority which in turn must provide the basis for single government. Unless that federal state is to be a tyranny, there must be a single sovereign Parliament with a final say over the raising of taxes.

I am against all that and, I hope, so are the Government. What is more, opinion polls now agree that the majority of the British people are on our side. That is why I will support the Government tonight. The Government are right to negotiate to protect NATO, to constrain the role of the Commission and to insist that other states obey the rules of the internal market as we do. They are right to press forward the development of an outward-looking free trading association of independent states. That is a noble concept. It would give European countries collectively and separately a positive influence on the rest of the world. That is the opposite of a protectionist, introverted, centralised federal state of Europe which is now being proposed by the Opposition and their socialist allies around Europe.

That is ironic, but not surprising. At any rate, the Labour party has barred itself from asking basic questions which one would have thought was the role of a normal Opposition. Perhaps I should ask some of those questions. What is this rush to political union all about? What is in it for us? To what end is it now proposed that we risk the sacrifice of the power of our people, through Parliament, to rule themselves? Are we really sure that a non-electable, non-accountable central bank on the German model is, in the long term, preferable to economic management by elected politicians? Do we seriously believe that the French, Germans and Italians have a secret formula for political stability and sound democracy which we fail to emulate at our peril?

A single currency would be the binding element of a federal state of Europe. I will support the Government tonight. I wish them well in their defence of British interests at Maastricht. However, that will not be the final say. That will come when we know what has been achieved at Maastricht. It will come if and when Parliament is asked to ratify what has been done. I state this clearly to avoid misunderstanding: on the issue of a single currency, there can be no compromise. If Parliament was asked to ratify a treaty which I believed made British accession to a single currency inevitable, I would not vote for it, and many of my colleagues would feel the same. The British public overwhelmingly support such a position.

Several Hon. Members

rose—

Mr. Deputy Speaker

I call Mr. John Smith.

9.3 pm

Mr. John Smith (Monklands, East)

rose—

Sir Russell Johnston (Inverness, Nairn and Lochaber)

On a point of order, Mr. Deputy Speaker. Is it not normal procedure to allow a representative of the Liberal Democrats to contribute during a day's debate?

Mr. Deputy Speaker

I am sure that the hon. Gentleman recognises the difficulties facing Mr. Speaker and the Chair.

Mr. Smith

Over the two days of this important debate, hon. Members have explored almost every nook and cranny, to use a contemporary expression, of the implications for this country and for Europe of the treaty amendments which may emerge from the European Council meeting at Maastricht, itself the culmination of two intergovernmental conferences which have been proceeding throughout the year. There have been echoes of previous debates—the long, sometimes weary saga of the consideration of Britain's place and role in Europe.

It is worth remembering that it is 20 years since the House took the decision to join the European Community. A very great deal has changed since then, although that has perhaps not always been recognised by the regular participants in our national sovereignty debate. We have today and yesterday been back over the referendum ground. Yesterday, the right hon. Member for Finchley (Mrs. Thatcher) aced the Prime Minister with her demand for a referendum. She was not dissuaded by the fact that the Prime Minister had apparently firmly rejected a referendum in a reply to an intervention by my right hon. Friend the Member for Chesterfield (Mr. Benn). Later, the Prime Minister appeared, to use one of the right hon. Lady's phrases about the Foreign Secretary, to "go a bit wobbly".

Late last night, the Financial Secretary to the Treasury, who wound up for the Government, repeated the wobble by saying that we could not now decide whether there would be a possible referendum in 1996. I gather today that prime ministerial sources are trying to roll back to the position that the Prime Minister had before the right hon. Lady sprang her initiative upon him. That is hardly an example of clear, firm government. In its own way, it is a very revealing insight into the influences upon this Administration.

Hon. Members have, as is quite proper and according to their point of view, sought to draw lessons from the history of our relations with the other states of Europe. For my own part, I believe that, in the 1950s, successive British Governments made an incorrect assessment of the strength of the movement to found the European Community. It was believed, first of all, that it would not happen and that, if it did, it would not amount to very much. However, with the perspective of history, we can now see how wrong such a judgment was. One might also note a similar error in judging the potential success of the establishment of the European monetary system in the late 1970s.

I seek to draw the conclusion from those experiences that in this country we have a tendency to underrate the forces behind European integration. We should have learnt that one of the penalties of standing back is lack of influence on the design and development of European institutions which eventually we feel obliged to join. Far from diminishing, the forces behind what we might call ever-closer union are increasing. Within the existing Community we are seeing the establishment of the single market after 1992.

I have little doubt that two of the major reasons why economic and monetary union is more likely to become a reality this time round is that a single market is being established and that nearly all the member states of the European Community are now members of the exchange rate mechanism. Having regard to some of the right hon. Lady's observations yesterday, some might consider it ironic that she was the Prime Minister when the crucial decisions in both those matters were made.

There are other factors of great importance to the debate. Capital movements have been almost entirely liberated over the whole OECD area, creating an entirely new situation from that in which Governments operated exchange controls and restraints on capital movement. In trade and in finance, we live in an increasingly interdependent world, and most certainly in a much more integrated Europe. In those circumstances, it seems to be essential that we are prepared to recognise the limits of theoretical national economic sovereignty which the real world that we live in imposes.

Mr. Bob Dunn (Dartford)

If the right hon. and learned Gentleman were going to Maastricht in a few days' time as a member of a Labour Government, would he give an irrevocable commitment to moving Britain towards a single currency? Will he answer, yes or no?

Mr. Smith

I will deal precisely with that point, but I ask the hon. Gentleman to allow me to develop one or two other aspects as a necessary background to my later comments on the issue that he raises. [HON. MEMBERS: "Oh."] It is the custom to allow the contributors to a debate to make speeches in their own way. I have given an undertaking to answer the question of the hon. Member for Dartford (Mr. Dunn) very directly. If that suits him, it should suit other right hon. and hon. Members

Before I was diverted, I was making the point that there are limits to theoretical economic national sovereignty, which are imposed by the realities of the world in which we live. What is more, we ought to be prepared to help to create a system that restores, at least in part, the influence that Governments should be able to have over economic and monetary policy. That is why Labour favours progress towards economic and monetary union—provided that the United Kingdom economy is made strong enough to gain rather than to lose from that experience, and that there is an adequate framework of accountability.

Mr. Patrick Nicholls (Teignbridge)

rose—

Mr. Smith

I hope that point is clear to the hon. Gentleman.

Mr. Nicholls

I am grateful to the right hon. and learned Gentleman, because he makes a very helpful point. However, I remind him that, on the "Today" programme this morning, he said that he agreed with the proposition that there is no need to make an immediate move towards a single currency. Does the right hon. and learned Gentleman agree that he seems during the last few hours to have come over to the Government's position—which is that there is no need to make an immediate move to a single currency? It appears so, from his remarks on the radio this morning—or does he distance himself from them now?

Mr. Smith

The hon. Gentleman should familiarise himself with the discussions at the intergovernmental conferences.

Mr. Nicholls

The hon. and learned Gentleman should cut the abuse, and try to answer my question.

Mr. Smith

Perhaps the hon. Gentleman will do me the courtesy of listening to the answer that he invited me to give, without shouting at me from a sedentary position in a most boring and discourteous manner.

No one in the whole Community is proposing an immediate move towards a single currency. The draft treaty provides that in 1996, or by the end of 1996 at the latest, the Commission will prepare a report to the Council of Economic and Finance Ministers, and thereafter to the European Council. The final decision that is postponed.

Mr. Marlow

rose—

Mr. Smith

I have already given way a number of times. The final decision—this is the assumption on which those engaged in the debate are operating—will be made in 1996 or 1998—perhaps later, for all I know.

Mr. Lawson

What the right hon. and learned Gentleman just said is absolutely right, but alongside the treaty on economic and monetary union, there is a declaration, which must be decided now. Is it Labour's position that the declaration should be signed, or that it should not be signed?

Mr. Smith

I am not clear whether there is a declaration currently in the discussions. That rather depends on what provision is made for the so-called opt out, as to whether it is general or particular. The declaration that I saw made mention of a fast transition towards a single currency, which is not terribly consistent with the notion of real economic convergence. A single currency—it is surprising that the Prime Minister and other Government Members made little reference to this—would offer Britain some advantages, and I will describe what they could be.

We could achieve a low rate of inflation, low interest rates, and a strong and stable currency—but only if we took steps to achieve real economic convergence, which would mean adopting economic policies that stimulated investment, promoted innovation and new technology, strengthened our regions, and built a world-class work force through a relentless commitment to education and training of the kind for which Labour constantly argues. Those policies are vital for our economic success in the 1990s whatever decisions are taken on economic and monetary union. It is absolutely clear that a country with a strong economy has little to fear from a single currency.

In addition to the vital requirement of real economic convergence, it is equally important to secure a proper framework of accountability for economic and monetary union if it occurs. We have heard nothing from the Government about their participation in the discussions in the economic intergovernmental conference about the accountability of the proposed European central bank and the allocation of responsibilities for economic and monetary policy between the Economic and Finance Ministers and the proposed central bank.

The Labour party has argued consistently for the bank to operate in a stronger framework of political accountability than the present draft treaty proposes. Like the French Government, we believe that ECOFIN—the Council of Economic and Finance Ministers—should play a crucial role in determining overall economic and monetary policy. We believe that it is important, for example, that the setting of the external exchange rate for a single currency should be a matter for ECOFIN.

On those and other matters, we simply do not know what the British Government have argued for or against, because Ministers have not reported back to the House on those issues. It would be appropriate tonight for the Chancellor to set out clearly the Government's position on the framework of accountability, which is one of the main areas of discussion at the intergovernmental conference. To my knowledge, we have not yet heard from Ministers about how the central bank should be controlled or about the role of the Finance Ministers in the proposed new system. Instead, when they last reported to the House in our debates on economic and monetary union in January, the Government told us that the main thrust of their policy was to advance the cause of the hard ecu.

Let us remind the House briefly of the history of the Government's approach to such matters. The Government's early response to the Delors report was totally dismissive. However, once it became clear that there was real impetus behind the initiative, the former Prime Minister, the right hon. Member for Finchley, announced at the Madrid summit in 1989 that there would be a British alternative to the Delors plan. The then Chancellor, the right hon. Member for Blaby (Mr. Lawson), was not present at the Madrid summit, which might help to explain why the Treasury was taken totally by surprise by the Prime Minister's initiative.

On 18 September 1989, writing in the Financial Times, that distinguished commentator, Mr. Samuel Brittan, observed: One very senior British official first heard of Mrs. Thatcher's promise, after the Madrid summit, to table alternative ways of achieving monetary union to that of the Delors Committee on his car radio. Mr. Brittan then said that the official, whom I am reliably informed is now permanent secretary to the Treasury, was so astonished that he nearly drove his car into a tree. That was the genesis of the plan for competing currencies. It did not have a long life. It is, as I recall it, the so-called "market solution", in which currencies would engage in a Darwinian-type struggle for survival. Our Community partners soon put the hems on that one. There was no seconder to the motion.

In the following year, the Government tried again. The then Chancellor, the present Prime Minister, launched the so-called "hard ecu plan". It was first revealed at a lunch meeting when he spoke to the German industry forum on 20 June 1990. The idea was that a 12th currency, a common currency, would be established, which could never be devalued, and which might develop into a single currency—or so some thought.

Whatever else could be said about the hard ecu—about its merits or demerits as an instrument of economic policy —it had its political uses for the Conservative party. It enabled the then Prime Minister to claim that it could not develop into a single currency. It enabled the then Chancellor, the present Prime Minister, to say that, if peoples and Governments so chose, it could develop into a single currency. It even enabled the Financial Secretary to the Treasury to argue before an astonished House of Lords Select Committee: a single currency could actually happen more quickly going down this path. In the January debate, the Chancellor warmed to the theme of the hard ecu. It was his initiative to be taken in the intergovernmental conferences. In that same month, he published detailed proposals, which were available at about the time of the debate. They were called "Economic and Monetary Union: Beyond Stage One." In the months thereafter, the Chancellor told us that there was growing support in the Community for his plan. One country after another was said to be treating with increasing respect this deft and ingenious British plan. How strange it was, therefore, that yesterday the Prime Minister, the veritable architect of the hard ecu, no longer sang its praises. Indeed, nothing has been heard of it since May this year.

Mr. Marlow

Will the right hon. and learned Gentleman give way?

Mr. Smith

Let me finish this point.

In the Financial Times of 13 May, there was a headline: "Hard ecu plan to be reviewed". The story read: Britain may back down in its hard ecu plan. … The proposal will be reviewed by senior UK officials in the next few weeks as a goodwill gesture to Britain's partners. That story was undoubtedly read with pleasure and relief in the capitals of the Community, but the Chancellor was not pleased at the briefing activities of his Treasury officials—his increasingly desperate Treasury officials. Speaking at a conference at the Grosvenor House hotel on 30 May, the Chancellor struck back. He said: I am happy to rebut suggestions that we are abandoning the hard ecu. On the contrary, the ideas which led us to put forward our proposals are making some headway with our partners. … We are often condemned for maintaining our position in the face of widespread disagreement, but we are certainly not so perverse as to throw away a good idea just because our partners agree with us! He put an exclamation mark after it.

Mr. Marlow

Will the right hon. and learned Gentleman give way?

Mr. Smith

No.

With regret I have to tell the House that that last reference by the Chancellor was, I fear, the last known sighting of the hard ecu.

Mr. Marlow

rose—

Mr. Deputy Speaker (Mr. Harold Walker)

Order.

Mr. Smith

In recounting these events, I am reminded of the story of the hunting of the snark, in which that mythical animal was destroyed. Something similar happened to the hard ecu. So I must ask the Chancellor the pertinent questions. Did it die? When did it die? Who killed it? Where is it buried? I hope that the Chancellor can give us a full report on the sad demise of the hard ecu.

It is abundantly clear from the draft treaty that it contains no hard ecu, and no common or 12th currency proposal. There was not even an agreement to harden the existing basket ecu mechanism. For example, the proposal in article 109E of the draft is that the currency composition of the ecu basket will be frozen at the start of stage 2.

The ineluctable conclusion to which one is driven is that the hard ecu was never more than a device to paper over the cracks in the Conservative party. It achieved precisely nothing for Britain's interests in the negotiations. That is a theme which sadly continued to be dominant in the Government's approach to these matters.

In the absence of the crack-covering hard ecu, what do the Government propose by way of amendments, if any, to the current Dutch treaty text? Did they make any proposal on how the central bank should be governed? Are they content with what is proposed? Do they wish to strengthen the role of Economic and Finance Ministers, as I believe would be right? If so, what proposals do they intend to make in the remaining weeks of negotiation?

We believe that ECOFIN should be responsible for setting the Community's overall economic policy. In order to do so, its secretariat needs to be strengthened greatly, with a permanent staff so that it is capable of carrying out the task of surveillance and economic co-ordination. It already has that role, but it could play a greater role in future.

There is one matter on which I agree with what the Prime Minister said yesterday. That is the important question of budget deficits. He said that negotiations were still proceeding on that matter and that there had been no acceptance of a binding element in stages 2 or 3.

As presently drafted, the treaty is far too rigid. The 3 per cent. figure in the protocol seems arbitrary and surely, at the very least, there must be some common definition of what a deficit is considered to be when member states have different Government accounting practices.

Since I am agreeing, in principle, with the line that the Government took on that matter, I hope that the Chancellor can enlighten us further on what the Government propose.

Sir Peter Blaker (Blackpool, South)

Was the right hon. and learned Gentleman present with the Leader of the Opposition at the conference in Madrid in December last year when a policy of a binding minimum rate of taxation throughout the Community was agreed? That agreement clearly referred to direct taxation. Would the right hon. and learned Gentleman care to elaborate on that, because we have not heard much about it from the Labour party?

Mr. Smith

I do not think any more mischievous allegation has been made during these discussions than what the chairman of the Conservative party wrote in the letter that I have here. He explicitly referred to capital taxation; that is absolutely clear from the context of the document.

Since we are delving into such matters, I took the trouble to inquire about another aspect of our relationship with Europe today—the Conservative party's application to join the European People's party parliamentary group as an allied member. I have here a letter from the chairman of the Conservative party to Mr. Wilfried Martens, the president of the European People's party. He says: I would like to take this opportunity to state once again that this application"— that is the application by the Tories to be allowed to tie up with someone; they have never managed it in all the history of the European Parliament, but they are feeling a bit lonely— enjoys my full support and that of the Prime Minister as Leader of the Conservative Party. I was intrigued by the fact that a letter sent on behalf of Conservative Members of the European Parliament says the following: I should like to emphasize that my colleagues fully support, inter alia: The institutional development of the community into a European Union of a federal type". I think that the chairman of the Conservative party would be better employed sorting out a few of those matters before he comes back to the House. I apologise for raising such matters in detail, but it is the duty of the House to do so—[Interruption.] I shall no doubt be corrected and hon. Members can always intervene, but I have it here in writing, and it would be surprising if it were wrong.

Mr. Harry Ewing (Falkirk, East)

On a point of order, Mr. Speaker. Is it not normal in parliamentary debate that, when a serious allegation is made against the Prime Minister, he at least gets up off his bottom and tries to respond to it? Can we not invite the Prime Minister to do so?

Mr. Speaker

Order.

Mr. Smith

I have mentioned our views on the development of economic and monetary union, but one matter that we have not touched upon sufficiently in the debate is the curious view that the Conservative party has on the social charter and the social action programme.

In the remarkable speech by the right hon. Member for Bexley and Sidcup (Mr. Heath) this afternoon, it was as unusual as it was refreshing to hear a Conservative voice talking of the need for equity and social justice within the European Community. The right hon. Gentleman recognised, as we do, that it is hardly consistent to argue for qualified majority voting to create the single market if one opposes it on the social action programme, which gives rights for employees. It is staggering that the Government will apparently take the negotiations at Maastricht to the brink of failure because of their obstinate, dogmatic insistence that they will have nothing to do with competence in the social field or with majority voting in that area.

The Government could change their policy on that precise matter without great difficulty. If they are worried about whether it is the right thing to do, I remind them of an article that the Secretary of State for the Environment wrote in The Times on 29 November 1989, in which he said We paid a heavy price when others designed the common agricultural policy. It would be unforgivable to repeat that mistake in industrial and financial policies. The same argument applies to the Social Charter". That was well said by the Secretary of State for the Environment. I hope that he will speak to the Prime Minister and the Chancellor of the Exchequer and help them to come to a wiser view.

In the course of this debate, we have understood that the real priorities for Europe in the years that lie ahead are for the Community to become wider, more cohesive and more democratic. Those are certainly the Labour party's objectives. We have aims and objectives—the same cannot be said of the Conservative party. In the same Lobby tonight will be those who want a referendum and those who do not, and those who want a single currency and those who do not. Most remarkable of all, walking through the same Lobby will be the right hon. Member for Old Bexley and Sidcup and the right hon. Member for Finchley, thus demonstrating the organised hypocritical disunity that passes for a Conservative party.

That is why it will be not only a duty but a pleasure to vote against the Government tonight.

9.32 pm

The Chancellor of the Exchequer (Mr. Norman Lamont)

This has been an important and historic debate. It has been a remarkable occasion, with some memorable contributions. It is not every day when one former Prime Minister intervenes in the speech of another. We have heard some outstanding speeches on both sides of the House. On the Opposition Benches, the right hon. Member for Bethnal Green and Stepney (Mr. Shore) and the hon. Members for Berwick-upon-Tweed (Mr. Beith) and for Sheffield, Attercliffe (Sir P. Duffey) made outstanding speeches. My right hon. Friends the Members for Blaby (Mr. Lawson), for Worthing (Mr. Higgins), for Chingford (Mr. Tebbit), for Guildford (Mr. Howell) and for Sutton Coldfield (Sir N. Fowler) made powerful contributions.

Obviously, it was right that the House should have an opportunity to express its views and vote on the broad negotiating stance which the Government will take. The motion allows the House to do that. If agreement is reached in Maastricht, the House will have a further opportunity to debate and vote on the detailed proposals in due course.

Tonight, I wish to concentrate largely on monetary union and answer some of the questions raised by the right hon. and learned Member for Monklands, East (Mr. Smith). First, however, may I make some observations on political union? Foreign and security policy is an area in which the Twelve can and do work together. Europe is an increasingly integrated region, and the individual members of the Community are likely to have common interests and many common views, especially on regional questions such as eastern Europe, to which several hon. Members referred, and relationships with the Soviet Union. The Community has a legitimate interest in those issues. At the same time, the individual countries have different histories, worldwide connections and interests. It is essential that we continue to retain the freedom to act alone in our own national interests.

It also goes without saying that foreign and defence policy—questions that can involve issues of peace and war —cannot be subject to mechanistic voting procedures, which would be a recipe for less rather than more agreement. That is why, in the negotiations, my right hon. Friend the Foreign Secretary has placed the emphasis on co-operation between individual states for agreement outside the treaty mechanism and has said that agreement should be by consensus.

Much of the debate in the past two days has been taken up with arguments about the position of this House. We are rightly jealous of the power of Parliament to make laws, to tax and to spend. Of course our institutions and practices must be subject to examination, but we are voting tonight not for ourselves but for those whom we represent. It is my conviction that the British people overwhelmingly wish to reserve those fundamental powers for this House in this country.

Mr. Tony Benn (Chesterfield)

It has long been Government policy that there should be no change in the status of Northern Ireland without a referendum, and that even a merging of sovereignty between Belfast and Dublin could not be entrusted to this House alone. Will the right hon. Gentleman tell the House the difference between that and the issue raised by the demand for a referendum which my right hon. and hon. Friends fully supported when it was made in 1975?

Mr. Lamont

The Prime Minister has made it clear that we do not think that, on the issue whether we should move to single currency—an issue that will not arise for six or seven years—it would be appropriate now to have a referendum. In addition, he made it clear that he did not feel it was appropriate even later for there to be a referendum on this issue.

I was referring to the fact that profound constitutional and political questions are raised in the debate, though they have not been seriously addressed by the Opposition. The Prime Minister has made it clear that we are against the idea of a European Government or a European state, and for that reason the Foreign Secretary has taken a cautious approach to any extensions of Community competence or to proposals to increase the powers of the European Parliament. We reject wide-ranging increases in the legislative powers of the European Parliament.

We are prepared to consider a right for the European Parliament to block legislation approved by the Council. But the scope of such a provision should be strictly limited, and certainly more limited than is the case in the current draft. This negative assent procedure would of course not mean that the European Parliament could initiate legislation, still less impose anything that did not command the requisite support in the Council of Ministers. We have also tabled proposals to increase the accountability of the Commission—asked for by Opposition Members—to the European Parliament, particularly in its management of the Community budget.

A number of my hon. Friends have noted that the draft treaty contains some extensions of Community competence and the scope of majority voting in the Council. Obviously, I cannot go over many of them tonight, but, unlike the Opposition, we are profoundly sceptical about the need for major new extensions of Community competence. There is no need for extended Community competence in issues such as industrial relations and social security. If wide-ranging social policies were imposed throughout the Community, they would increase unemployment and have massive economic costs.

I can understand that Opposition Members take a different view on some of these issues and policies, but, as the right hon. Member for Chesterfield (Mr. Benn) said yesterday, that is not the real issue. The real question is why they want to take away the right of the British people to make the final decision on these matters.

We believe that the political union IGC could deliver a constructive and useful package of reforms of the Community and its institutions, but the Community must not overreach itself. We cannot draw up grandiose, impractical blueprints for a structure that will not stand the weight it would be called on to bear. The consequences of over-ambition would be disastrous for the Community and for Britain, and we could not accept that.

I come to the negotiations about economic and monetary union. While these have been conducted by Finance Ministers separately from those on political union, as my right hon. Friends the Members for Blaby and for Chingford said, nobody can he in any doubt that monetary union, if it happens. is a process with potentially profound political implications.

My right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) made the case for a single currency, which he said could be seen as a logical extension of the single market. He referred to the reduction in transaction costs and exchange rate risks that could increase trade and investment, and promote investment from outside into the Community. Above all, some see it as achieving price stability—not only a single currency zone, but a low-inflation zone. As my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) said, many in industry and the City fear the commercial consequences if Britain were to exclude itself from any future European currency union.

For those reasons, we think that it would have been wrong to stand aside or walk away from the negotiations, but the important potential economic arguments must be balanced against the political consequences and the practicalities. One thing is certain: any attempt to create a single currency in Europe must be based on the prior convergence, not just of inflation and interest rates, but market flexibility throughout the economies of the member states. Without that, there would be enormous and permanent regional imbalances which would have disastrous consequences.

Mr. Stuart Bell (Middlesbrough)

The House will have noticed that the Chancellor of the Exchequer has widened the issue of convergence from the definition given by the Foreign Secretary this afternoon. We now have a better idea about convergence than we did this afternoon. May we have an answer from the Chancellor to the question raised by my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) about the hard ecu?

Mr. Lamont

I shall answer that precise question now if the hon. Gentleman wants. He is wrong—the hard ecu was discussed recently. Incorporating many of the features of the hard ecu, using a common currency to promote convergence and having something similar to the monetary fund that we proposed earlier are all ideas which are still on the table. Other countries wish to see a hardening of the ecu in stage 2. The basic framework of our proposal still applies.

There are few recent examples of countries coming together to form a currency union of independent sovereign states. For that reason, it would be something of a step into the unknown. However we expect the Community to develop, events will no doubt turn out differently. As many of my hon. Friends have said, notably my right hon. Friend the Member for Guildford, over the next few years the current Community could be enlarged into one of perhaps 15 or 20 countries. A single currency would have to be able to accommodate that change, as would the institutions of the Community.

Mr. Marlow

rose—

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

rose—

Mr. Lamont

Several hon. Members have asked questions that I want to answer, because it is important to get the answers on the record. I shall give way soon.

For the reasons that I have given, I believe that my right hon. Friends the Members for Worcester (Mr. Walker), for Blaby, and for Finchley (Mrs. Thatcher) were right to pose the question: is it possible to have a monetary union without also having a political union? They are right to ask whether it is possible to reconcile a single currency with national Governments who keep control of economic policy and maintain the freedom to tax and spend. Those are important questions.

They also raised the issue whether there should be constraints on Government's fiscal policies and freedoms, and if so how far they should go. It was due to the huge issues involved that we have made it clear that we cannot make the commitment to move to a single currency without a separate decision at the appropriate time taken by Government and Parliament. We cannot, and we shall not.

Some of my hon. Friends asked whether the text as it presently stands genuinely enables us to avoid the commitment to move to a single currency. On the basis of all the advice available to me, I can give the House that assurance. My right hon. Friend the Member for Finchley referred to the European Court of Justice. The advice that I have had is quite clear. There can be no question of the United Kingdom being in breach of the treaty for refusing to move to a single currency.

Some of my hon. Friends, especially my hon. Friend the Member for Stafford (Mr. Cash), suggested that articles 2 and 3a of the draft treaty implied a commitment to move to a single currency. It is true that economic and monetary union is part of the Community task set out in article 2, as it was in the preamble to the Single European Act. However, as article 3a makes clear, nothing in these articles overrides the provisions for a form of exemption status which would be without time limit.

Of course we are not committed to one particular draft, and we will need to be absolutely satisfied that the final text is legally watertight. I assure the House that we shall reflect on the points that have been made in the debate and that the Government will settle for nothing less than a treaty that leaves us wholly free to decide whether or not to move to a single currency. "Wholly free" means free to make whatever choice we wish.

Mr. Rowlands

Will the Government sign a treaty which includes an absurd protocol limiting the rate of public expenditure to 3 per cent. of deficit and a central bank whose undemocratic status would not allow any Government to influence its decisions?

Mr. Lamont

I am coming to those precise points.

Mr. Rowlands

Answer.

Mr. Lamont

I intend to answer. One of the hon. Gentleman's right hon. Friends delivered a lesson on manners, but obviously the hon. Gentleman did not hear it.

Some hon. Members have said that, if we sign a treaty that provides for a single currency, then, even if we are not legally committed to move to a single currency, the pressures to adopt it will be there, and a single currency will become inevitable. I say to my hon. Friends who advanced that argument that it shows a lack of confidence in their case. If a single currency cannot work, or cannot be made to work without unacceptable infringement of sovereignty, it will deservedly be rejected by the House.

Because we are not prepared to make a commitment to move to a single currency, monetary, fiscal and economic policy in general will remain firmly in national hands until and unless the decision is made to move to a single currency and to stage 3. This is an extremely important point. It has been my intention throughout to negotiate a treaty which, up to the point of decision, leaves the Government free to continue to run our own economic policy.

For example, in stage 2, monetary policy will remain firmly in national hands. The new European Monetary Institute will have co-ordinating tasks in the same way as the present Committee of Central Bank Governors has. It will oversee the development of the ecu, and the EMI will carry out work in preparation for a possible future move to stage 3.

The EMI will not be a European central bank. It will not take away the freedom of member states to conduct their own monetary policies. A European central bank will not be set up unless and until the Community decides to move to stage 3. Hon. Members may have noticed that, although a country must be a member of the ERM to move to stage 3, ERM membership is not a treaty obligation in stage 2. Monetary policy remains with member states unless and until they choose to participate in the single currency area. The same is true of fiscal policy.

In stage 2 of the Economic and Finance Council would be able to examine a member state's economic or fiscal policies and to make recommendations, but ECOFIN is already empowered to do exactly that. Other organisations such as the IMF and OECD are already engaged in and entitled to do this. The proposed procedure in stage 2 will be more formalised but contains little new. Council action in stage 2 would take the form of recommendations, which are clearly stated in article 189 to have no binding force.

My right hon. Friend the Member for Worthing spoke about the general provision that member states shall avoid excessive budget deficits in stage 2, although he recognised that the draft treaty makes it clear that such an obligation would not be enforceable by infraction proceedings. The Government have pursued, and will continue to pursue, sound fiscal policies, and we think that other member states should do likewise. We are not prepared to accept any binding obligation in this area, and it is my firm objective to amend this provision so that it does not create any such obligation in stage two.

Mr. Marlow

Will my right hon. Friend give way?

Mr. Lamont

I will give way if my hon. Friend insists, but there are many important points to be made about the negotiations, and we shall not have them on the record and the House will not know about them if I am not allowed enough time to set them out.

In stage 3, matters would be very different. A European central bank would have been brought into existence, which would have sole responsibility for monetary policy in those member states that chose to move to a single currency. A number of right hon. and hon. Members—for example, my hon. Friend the Member for Stafford—have pointed out that the European central bank would operate independently of political control. However, it would be accountable for its actions to the Council of Economic Finance Ministers and the President of that Council would be able to attend meetings of the governing board.

The Council would also have an important role in formulating exchange rate policy. The Governor of the Bank of England would he a member of the governing board of the European central bank and would continue to be appointed at a national level, but the European central bank in stage 3 would have to be free to set interest rates without interference. That is the view of every member state. In a Community of 12 countries, it simply would not be practical for 12 Finance Ministers to intervene in the monetary policy decisions of the central bank.

The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) spoke about the binding rules. A number of my right hon. and hon. Friends have noted that the current draft of the treaty also provides for binding rules of fiscal deficits in stage 3. This has been the subject of considerable argument in the debate. There are those who have argued that, if monetary policy is set by the centre, fiscal policy must inevitably be centrally determined; otherwise, there is a risk of monetary financing or inflation. Also, there would be the risk of excessive budget deficits in one country, which would push up interest rates throughout the single currency area.

In my view, the rigid central determination of fiscal policy is neither necessary nor desirable. Even if there were to be one European currency and one European monetary policy, it is our intention that there should still be 12 fiscal policies and 12 Finance Ministers. The Government believe that, even in stage 3, Community action to restrict deficits would be necessary only in the rare cases where it was clear that the deficit was grossly excessive—for example, if it threatened monetary stability throughout the Community.

The hon. Member for Merthyr Tydfil and Rhymney spoke about the 3 per cent. of GDP trigger, a point raised also by the right hon. Member for Bethnal Green and Stepney, my right hon. Friend the Member for Worthing and other hon. Members. The present proposals would entail Council examination of the policies of member states with deficits exceeding 3 per cent. of GDP, but such deficits would not be prohibited. The 3 per cent. criterion would trigger investigation and would lead to further action only if the Council, taking the relevant economic circumstances into account, so decided.

I agree with what has been said on this subject: that the proposals in the treaty are too onerous. We shall be working to ensure that the procedure catches only deficits that are clearly excessive and unsustainable. We shall try to secure in the negotiations rules that ensure that limitations on deficits operate with the lightest possible touch.

Mr. Marlow

We have in a few minutes an important vote coming up, and I am sure that hon. Members will want to get the matter right. Among the 32 lines of gobbledegook that pass for an Opposition amendment, the Government are urged to achieve … a single currency as the essential foundation". Conservative or Labour Members who vote for the amendment will want to know whether this is committing the Opposition to a single currency, come what may, willy-nilly.

Mr. Lamont

I am just as mystified by the Opposition's amendment as my hon. Friend. It will not surprise him to know that I am about to come to that precise point.

The speeches made by the Leader of the Opposition and the right hon. and learned Member for Monklands, East were not up to the seriousness and the gravity of the issues that we have discussed tonight. Our approach to the negotiations has been constructive but cautious: cautious to ensure that British Governments retain the freedom to act in the national interest, but constructive in preparing Community arrangements which are practical and which, if they come into being, will work.

That is the approach of a responsible Government, a Government who seek agreement with their partners but are prepared to say no if the nation's interests are under threat. It is an approach which is in the starkest possible contrast to the Opposition's attitude. There can be no more serious topic than that which we are discussing tonight, but the Opposition have in no way addressed themselves to the issues.

The Leader of the Opposition spent the 1970s saying that membership of the Community was, to use his words, "an absolutely crazy mistake". He spent much of the 1980s demanding outright and immediate withdrawal, but now he proposes to spend the 1990s apparently willing to sign every piece of paper which floats across the English channel.

Having once believed that the Community was entirely bad, the Leader of the Opposition now apparently believes that everything that emanates from Brussels, everything that is proposed there, is unquestionably good. He and his colleagues are prepared and ready to sign away the rights of this Parliament to decide our own social and employment laws. They propose regional policies which would, like so many of their ideas, cost the British taxpayer dear. They are ready to commit Britain to move to a single currency without any further deliberation or decision and without the slightest regard to the economic consequences.

A year ago, the right hon. and learned Member for Monklands, East said that it would not be prudent to commit ourselves to a single currency, but on Tuesday he issued a brief statement saying that the Labour party has made it clear that in principle it favours progress towards a single currency. Yesterday, the House heard me ask the Leader of the Opposition whether at Maastricht he would be prepared to make an irrevocable commitment to move to a single currency. I asked him whether he would sign not just the treaty but the declaration to move to a single currency. Various of my hon. Friends, including my right hon. Friend the Member for Blaby, also asked the right hon. and learned Member for Monklands, East, but we have had no answer whatever.

The Leader of the Opposition said that he would not be looking for an opt-out clause. That surely means that the Opposition are committed to move to a single currency.

That is what I would have thought. It is extraordinary that the right hon. Gentleman should say that he is not interested in that opt-out clause. It is there because we worked hard for it and we have negotiated for it. The right hon. Gentleman is saying that he does not want to take advantage of it. He is prepared to chuck away Britain's interests. Irrespective of having the opportunity, he would commit Britain to move to a single currency.

The right hon. and learned Member for Monklands, East said that the decision does not really arise until 1997, but the declaration which every other country is prepared to sign arises this year, at this moment. Would the Leader of the Opposition sign it? We have had no answer on that point.

It is crystal clear that the Leader of the Opposition is prepared to commit Britain to move irrevocably to a single currency. That is the only conclusion that can be drawn after the speeches that we have heard in the past few days.

The Government have been involved in long and complex negotiations. They have been fighting for vital British interests—the power of the House, the right of Government to take their own taxation and spending decisions, the right of Government to run their own immigration policy. Those on the Opposition Front Bench are prepared to throw that away. The Opposition have allowed themselves to become federalists in all but name. We reject their approach, and I urge my right hon. and hon. Friends to support the Government's policy in the Lobby.

Question put, That the amendment be made: —

The House divided: Ayes 200, Noes 391.

Division No.14]	[10.00
AYES
Adams, Mrs Irene (Paisley, N.)	Corbett, Robin
Allen, Graham	Cousins, Jim
Anderson, Donald	Cox, Tom
Archer, Rt Hon Peter	Crowther, Stan
Armstrong, Hilary	Cummings, John
Ashley, Rt Hon Jack	Cunliffe, Lawrence
Ashton, Joe	Cunningham, Dr John
Banks, Tony (Newham NW)	Dalyell, Tam
Barnes, Harry (Derbyshire NE)	Darling, Alistair
Barron, Kevin	Davies, Ron (Caerphilly)
Battle, John	Davis, Terry (B'ham Hodge H'l)
Beckett, Margaret	Dewar, Donald
Bell, Stuart	Dixon, Don
Bennett, A. F. (D'nt'n & R'dish)	Dobson, Frank
Benton, Joseph	Doran, Frank
Bermingham, Gerald	Duffy, Sir A. E. P.
Bidwell, Sydney	Dunnachie, Jimmy
Blair, Tony	Eadie, Alexander
Blunkett, David	Eastham, Ken
Boateng, Paul	Edwards, Huw
Boyes, Roland	Enright, Derek
Bradley, Keith	Evans, John (St Helens N)
Bray, Dr Jeremy	Ewing, Harry (Falkirk E)
Brown, Gordon (D'mline E)	Fatchett, Derek
Brown, Nicholas (Newcastle E)	Faulds, Andrew
Brown, Ron (Edinburgh Leith)	Field, Frank (Birkenhead)
Caborn, Richard	Fisher, Mark
Callaghan, Jim	Flannery, Martin
Campbell, Ron (Blyth Valley)	Flynn, Paul
Campbell-Savours, D. N.	Foster, Derek
Clark, Dr David (S Shields)	Foulkes, George
Clarke, Tom (Monklands W)	Fraser, John
Clelland, David	Fyfe, Maria
Cohen, Harry	Galbraith, Sam
Cook, Frank (Stockton N)	Galloway, George
Cook, Robin (Livingston)	Garrett, John (Norwich South)

Garrett, Ted (Wallsend)	Meale, Alan
George, Bruce	Michael, Alun
Gilbert, Rt Hon Dr John	Moonie, Dr Lewis
Godman, Dr Norman A.	Morgan, Rhodri
Golding, Mrs Llin	Morley, Elliot
Gordon, Mildred	Morris, Rt Hon A. (W'shawe)
Gould, Bryan	Morris, Rt Hon J. (Aberavon)
Graham, Thomas	Mowlam, Marjorie
Grant, Bernie (Tottenham)	Mullin, Chris
Griffiths, Nigel (Edinburgh S)	Murphy, Paul
Griffiths, Win (Bridgend)	Oakes, Rt Hon Gordon
Grocott, Bruce	O'Brien, William
Hain, Peter	O'Hara, Edward
Hardy, Peter	O'Neill, Martin
Harman, Ms Harriet	Orme, Rt Hon Stanley
Hattersley, Rt Hon Roy	Parry, Robert
Haynes, Frank	Patchett, Terry
Heal, Mrs Sylvia	Pendry, Tom
Healey, Rt Hon Denis	Pike, Peter L.
Henderson, Doug	Powell, Ray (Ogmore)
Hinchliffe, David	Prescott, John
Hoey, Kate (Vauxhall)	Primarolo, Dawn
Hogg, N. (C'nauld & Kilsyth)	Quin, Ms Joyce
Home Robertson, John	Radice, Giles
Hood, Jimmy	Randall, Stuart
Howarth, George (Knowsley N)	Redmond, Martin
Howell, Rt Hon D. (S'heath)	Rees, Rt Hon Merlyn
Howells, Dr. Kim (Pontypridd)	Reid, Dr John
Hoyle, Doug	Richardson, Jo
Hughes, Robert (Aberdeen N)	Robertson, George
Hume, John	Robinson, Geoffrey
Ingram, Adam	Rogers, Allan
Janner, Greville	Rooker, Jeff
Jones, Barry (Alyn & Deeside)	Rooney, Terence
Jones, Martyn (Clwyd S W)	Ross, Ernie (Dundee W)
Kaufman, Rt Hon Gerald	Ruddock, Joan
Kilfoyle, Peter	Sedgemore, Brian
Kinnock, Rt Hon Neil	Sheerman, Barry
Kumar, Dr. Ashok	Sheldon, Rt Hon Robert
Leadbitter, Ted	Smith, Andrew (Oxford E)
Lestor, Joan (Eccles)	Smith, C. (Isl'ton & F'bury)
Lewis, Terry	Smith, Rt Hon J. (Monk'ds E)
Litherland, Robert	Smith, J. P. (Vale of Glam)
Lloyd, Tony (Stretford)	Snape, Peter
Lofthouse, Geoffrey	Soley, Clive
Loyden, Eddie	Steinberg, Gerry
McAllion, John	Stott, Roger
McAvoy, Thomas	Strang, Gavin
McCartney, Ian	Straw, Jack
Macdonald, Calum A.	Taylor, Mrs Ann (Dewsbury)
McFall, John	Turner, Dennis
McKay, Allen (Barnsley West)	Vaz, Keith
McKelvey, William	Walley, Joan
McLeish, Henry	Wardell, Gareth (Gower)
McMaster, Gordon	Wareing, Robert N.
McNamara, Kevin	Watson, Mike (Glasgow, C)
McWilliam, John	Welsh, Michael (Doncaster N)
Mahon, Mrs Alice	Williams, Alan W. (Carm'then)
Mallon, Seamus	Wilson, Brian
Marek, Dr John	Wise, Mrs Audrey
Marshall, David (Shettleston)	Worthington, Tony
Marshall, Jim (Leicester S)	Young, David (Bolton SE)
Martin, Michael J. (Springburn)
Martlew, Eric	Tellers for the Ayes:
Maxton, John	Mr. Eric Illsley and Mr. Jack Thompson.
Meacher, Michael

NOES
Adley, Robert	Ashdown, Rt Hon Paddy
Aitken, Jonathan	Aspinwall, Jack
Alexander, Richard	Atkins, Robert
Alison, Rt Hon Michael	Atkinson, David
Allason, Rupert	Baker, Rt Hon K. (Mole Valley)
Amery, Rt Hon Julian	Baldry, Tony
Amess, David	Banks, Robert (Harrogate)
Amos, Alan	Barnes, Mrs Rosie (Greenwich)
Arbuthnot, James	Batiste, Spencer
Arnold, Jacques (Gravesham)	Beaumont-Dark, Anthony
Arnold, Sir Thomas	Beggs, Roy
Ashby, David	Beith, A. J.

Bellingham, Henry	Fearn, Ronald
Bendall, Vivian	Fenner, Dame Peggy
Bennett, Nicholas (Pembroke)	Field, Barry (Isle of Wight)
Benyon, W.	Finsberg, Sir Geoffrey
Bevan, David Gilroy	Fishburn, John Dudley
Biffen, Rt Hon John	Fookes, Dame Janet
Blackburn, Dr John G.	Forman, Nigel
Blaker, Rt Hon Sir Peter	Forsyth, Michael (Stirling)
Body, Sir Richard	Forth, Eric
Bonsor, Sir Nicholas	Fowler, Rt Hon Sir Norman
Boscawen, Hon Robert	Fox, Sir Marcus
Boswell, Tim	Franks, Cecil
Bottomley, Peter	Freeman, Roger
Bottomley, Mrs Virginia	French, Douglas
Bowden, A. (Brighton K'pto'n)	Fry, Peter
Bowden, Gerald (Dulwich)	Gale, Roger
Bowis, John	Gardiner, Sir George
Boyson, Rt Hon Dr Sir Rhodes	Garel-Jones, Tristan
Braine, Rt Hon Sir Bernard	Gill, Christopher
Brandon-Bravo, Martin	Gilmour, Rt Hon Sir Ian
Brazier, Julian	Glyn, Dr Sir Alan
Bright, Graham	Goodhart, Sir Philip
Brooke, Rt Hon Peter	Goodlad, Alastair
Brown, Michael (Brigg & Cl't's)	Goodson-Wickes, Dr Charles
Browne, John (Winchester)	Gorman, Mrs Teresa
Bruce, Ian (Dorset South)	Gorst, John
Bruce, Malcolm (Gordon)	Grant, Sir Anthony (CambsSW)
Buck, Sir Antony	Greenway, Harry (Ealing N)
Budgen, Nicholas	Greenway, John (Ryedale)
Burns, Simon	Gregory, Conal
Burt, Alistair	Griffiths, Sir Eldon (Bury St E')
Butcher, John	Griffiths, Peter (Portsmouth N)
Butler, Chris	Grist, Ian
Butterfill, John	Ground, Patrick
Campbell, Menzies (Fife NE)	Grylls, Michael
Carlisle, John, (Luton N)	Gummer, Rt Hon John Selwyn
Carlisle, Kenneth (Lincoln)	Hague, William
Carrington, Matthew	Hamilton, Rt Hon Archie
Carttiss, Michael	Hamilton, Neil (Tatton)
Cartwright, John	Hampson, Dr Keith
Cash, William	Hanley, Jeremy
Chalker, Rt Hon Mrs Lynda	Hannam, John
Channon, Rt Hon Paul	Hargreaves, A. (B'ham H'll Gr')
Chapman, Sydney	Hargreaves, Ken (Hyndburn)
Chope, Christopher	Harris, David
Churchill, Mr	Haselhurst, Alan
Clark, Rt Hon Alan (Plymouth)	Hawkins, Christopher
Clark, Dr Michael (Rochford)	Hayes, Jerry
Clark, Rt Hon Sir William	Hayhoe, Rt Hon Sir Barney
Clarke, Rt Hon K. (Rushcliffe)	Hayward, Robert
Colvin, Michael	Heath, Rt Hon Edward
Conway, Derek	Heathcoat-Amory, David
Coombs, Anthony (Wyre F'rest)	Heseltine, Rt Hon Michael
Coombs, Simon (Swindon)	Hicks, Mrs Maureen (Wolv' NE)
Cormack, Patrick	Hicks, Robert (Cornwall SE)
Couchman, James	Higgins, Rt Hon Terence L.
Cran, James	Hill, James
Critchley, Julian	Hind, Kenneth
Currie, Mrs Edwina	Hogg, Hon Douglas (Gr'th'm)
Curry, David	Hordern, Sir Peter
Davies, Q. (Stamf'd & Spald'g)	Howard, Rt Hon Michael
Davis, David (Boothferry)	Howarth, Alan (Strat'd-on-A)
Day, Stephen	Howarth, G. (Cannock & B'wd)
Devlin, Tim	Howe, Rt Hon Sir Geoffrey
Dickens, Geoffrey	Howell, Rt Hon David (G'dford)
Dicks, Terry	Howell, Ralph (North Norfolk)
Dorrell, Stephen	Howells, Geraint
Douglas-Hamilton, Lord James	Hughes, Robert G. (Harrow W)
Dover, Den	Hughes, Simon (Southwark)
Dunn, Bob	Hunt, Rt Hon David
Durant, Sir Anthony	Hunt, Sir John (Ravensbourne)
Dykes, Hugh	Hunter, Andrew
Eggar, Tim	Hurd, Rt Hon Douglas
Emery, Sir Peter	Irvine, Michael
Evans, David (Welwyn Hatf'd)	Jack, Michael
Evennett, David	Jackson, Robert
Fairbairn, Sir Nicholas	Janman, Tim
Fallon, Michael	Jessel, Toby
Farr, Sir John	Johnson Smith, Sir Geoffrey
Favell, Tony	Johnston, Sir Russell

Jones, Gwilym (Cardiff N)	Nicholls, Patrick
Jones, Robert B (Herts W)	Nicholson, David (Taunton)
Jopling, Rt Hon Michael	Nicholson, Emma (Devon West)
Kellett-Bowman, Dame Elaine	Norris, Steve
Kennedy, Charles	Onslow, Rt Hon Cranley
Key, Robert	Oppenheim, Phillip
Kilfedder, James	Owen, Rt Hon Dr David
King, Roger (B'ham N'thfield)	Page, Richard
King, Rt Hon Tom (Bridgwater)	Paice, James
Kirkhope, Timothy	Paisley, Rev Ian
Kirkwood, Archy	Parkinson, Rt Hon Cecil
Knapman, Roger	Patnick, Irvine
Knight, Greg (Derby North)	Patten, Rt Hon Chris (Bath)
Knight, Dame Jill (Edgbaston)	Patten, Rt Hon John
Knowles, Michael	Pattie, Rt Hon Sir Geoffrey
Knox, David	Pawsey, James
Lamont, Rt Hon Norman	Peacock, Mrs Elizabeth
Lang, Rt Hon Ian	Porter, Barry (Wirral S)
Latham, Michael	Porter, David (Waveney)
Lawrence, Ivan	Portillo, Michael
Lawson, Rt Hon Nigel	Powell, William (Corby)
Lee, John (Pendle)	Price, Sir David
Leigh, Edward (Gainsbor'gh)	Raffan, Keith
Lennox-Boyd, Hon Mark	Raison, Rt Hon Sir Timothy
Lester, Jim (Broxtowe)	Rathbone, Tim
Lightbown, David	Redwood, John
Lilley, Rt Hon Peter	Renton, Rt Hon Tim
Livsey, Richard	Rhodes James, Sir Robert
Lloyd, Sir Ian (Havant)	Riddick, Graham
Lloyd, Peter (Fareham)	Ridley, Rt Hon Nicholas
Lord, Michael	Ridsdale, Sir Julian
Luce, Rt Hon Sir Richard	Rifkind, Rt Hon Malcolm
Lyell, Rt Hon Sir Nicholas	Roberts, Rt Hon Sir Wyn
Macfarlane, Sir Neil	Robinson, Peter (Belfast E)
MacGregor, Rt Hon John	Roe, Mrs Marion
MacKay, Andrew (E Berkshire)	Ross, William (Londonderry E)
Maclean, David	Rossi, Sir Hugh
Maclennan, Robert	Rost, Peter
McLoughlin, Patrick	Rowe, Andrew
McNair-Wilson, Sir Michael	Rumbold, Rt Hon Mrs Angela
McNair-Wilson, Sir Patrick	Ryder, Rt Hon Richard
Madel, David	Sackville, Hon Tom
Maginnis, Ken	Sainsbury, Hon Tim
Major, Rt Hon John	Sayeed, Jonathan
Malins, Humfrey	Scott, Rt Hon Nicholas
Mans, Keith	Shaw, David (Dover)
Maples, John	Shaw, Sir Giles (Pudsey)
Marland, Paul	Shaw, Sir Michael (Scarb')
Marlow, Tony	Shelton, Sir William
Marshall, John (Hendon S)	Shephard, Mrs G. (Norfolk SW)
Marshall, Sir Michael (Arundel)	Shepherd, Colin (Hereford)
Martin, David (Portsmouth S)	Shepherd, Richard (Aldridge)
Mates, Michael	Shersby, Michael
Maude, Hon Francis	Sims, Roger
Mawhinney, Dr Brian	Skeet, Sir Trevor
Maxwell-Hyslop, Robin	Smith, Sir Dudley (Warwick)
Mayhew, Rt Hon Sir Patrick	Smith, Tim (Beaconsfield)
Mellor, Rt Hon David	Smyth, Rev Martin (Belfast S)
Meyer, Sir Anthony	Soames, Hon Nicholas
Michie, Mrs Ray (Arg'l & Bute)	Speed, Keith
Miller, Sir Hal	Speller, Tony
Mills, Iain	Spicer, Sir Jim (Dorset W)
Miscampbell, Norman	Spicer, Michael (S Worcs)
Mitchell, Andrew (Gedling)	Squire, Robin
Mitchell, Sir David	Stanbrook, Ivor
Moate, Roger	Stanley, Rt Hon Sir John
Molyneaux, Rt Hon James	Steel, Rt Hon Sir David
Monro, Sir Hector	Steen, Anthony
Montgomery, Sir Fergus	Stephen, Nicol
Moore, Rt Hon John	Stern, Michael
Morris, M (N'hampton S)	Stevens, Lewis
Morrison, Sir Charles	Stewart, Allan (Eastwood)
Morrison, Rt Hon Sir Peter	Stewart, Andy (Sherwood)
Moss, Malcolm	Stewart, Rt Hon Sir Ian
Moynihan, Hon Colin	Stokes, Sir John
Neale, Sir Gerrard	Sumberg, David
Needham, Richard	Summerson, Hugo
Nelson, Anthony	Tapsell, Sir Peter
Neubert, Sir Michael	Taylor, Ian (Esher)
Newton, Rt Hon Tony	Taylor, Matthew (Truro)

Taylor, Sir Teddy	Wallace, James
Tebbit, Rt Hon Norman	Waller, Gary
Temple-Morris, Peter	Walters, Sir Dennis
Thatcher, Rt Hon Margaret	Ward, John
Thomas, Dr Dafydd Elis	Wardle, Charles (Bexhill)
Thompson, D. (Calder Valley)	Warren, Kenneth
Thompson, Patrick (Norwich N)	Watts, John
Thorne, Neil	Wells, Bowen
Thornton, Malcolm	Wheeler, Sir John
Thurnham, Peter	Widdecombe, Ann
Townend, John (Bridlington)	Wiggin, Jerry
Townsend, Cyril D. (B'heath)	Wilkinson, John
Tracey, Richard	Wilshire, David
Tredinnick, David	Winterton, Mrs Ann
Trimble, David	Winterton, Nicholas
Trippier, David	Wolfson, Mark
Trotter, Neville	Wood, Timothy
Twinn, Dr Ian	Woodcock, Dr. Mike
Vaughan, Sir Gerard	Yeo, Tim
Viggers, Peter	Young, Sir George (Acton)
Wakeham, Rt Hon John	Younger, Rt Hon George
Waldegrave, Rt Hon William
Walden, George	Tellers for the Noes:
Walker, A. Cecil (Belfast N)	Mr. John M. Taylor and Mr. Nicholas Baker.
Walker, Bill (T'side North)
Walker, Rt Hon P. (W'cester)

Question accordingly negatived.

10.14 pm

Mr. Robert G. Hughes (Harrow, West)

On a point of order, Mr. Speaker. At the beginning of this Session we passed a Sessional Order to enable the byways to be kept clear for hon. Members to get to this House. Clearly something has gone wrong. Where are the other 29 Labour Members of Parliament? Where have they gone?

Main Question put: —

The House divided: Ayes 351, Noes 250.

Division No. 15]	[10.15 pm
AYES
Adley, Robert	Braine, Rt Hon Sir Bernard
Aitken, Jonathan	Brandon-Bravo, Martin
Alexander, Richard	Brazier, Julian
Alison, Rt Hon Michael	Bright, Graham
Allason, Rupert	Brooke, Rt Hon Peter
Amery, Rt Hon Julian	Brown, Michael (Brigg & Cl't's)
Amess, David	Bruce, Ian (Dorset South)
Amos, Alan	Buck, Sir Antony
Arbuthnot, James	Burns, Simon
Arnold, Jacques (Gravesham)	Burt, Alistair
Arnold, Sir Thomas	Butcher, John
Ashby, David	Butler, Chris
Aspinwall, Jack	Butterfill, John
Atkins, Robert	Carlisle, John, (Luton N)
Atkinson, David	Carlisle, Kenneth (Lincoln)
Baker, Rt Hon K. (Mole Valley)	Carrington, Matthew
Baldry, Tony	Carttiss, Michael
Banks, Robert (Harrogate)	Cartwright, John
Barnes, Mrs Rosie (Greenwich)	Chalker, Rt Hon Mrs Lynda
Batiste, Spencer	Channon, Rt Hon Paul
Beaumont-Dark, Anthony	Chapman, Sydney
Bellingham, Henry	Chope, Christopher
Bendall, Vivian	Churchill, Mr
Bennett, Nicholas (Pembroke)	Clark, Rt Hon Alan (Plymouth)
Benyon, W.	Clark, Dr Michael (Rochford)
Bevan, David Gilroy	Clark, Rt Hon Sir William
Blackburn, Dr John G.	Clarke, Rt Hon K. (Rushcliffe)
Blaker, Rt Hon Sir Peter	Colvin, Michael
Bonsor, Sir Nicholas	Conway, Derek
Boscawen, Hon Robert	Coombs, Anthony (Wyre F'rest)
Boswell, Tim	Coombs, Simon (Swindon)
Bottomley, Peter	Cope, Rt Hon Sir John
Bottomley, Mrs Virginia	Cormack, Patrick
Bowden, A. (Brighton K'pto'n)	Couchman, James
Bowden, Gerald (Dulwich)	Critchley, Julian
Bowis, John	Currie, Mrs Edwina
Boyson, Rt Hon Dr Sir Rhodes	Curry, David

Davies, Q. (Stamf'd & Spald'g)	Howell, Rt Hon David (G'dford)
Davis, David (Boothferry)	Howell, Ralph (North Norfolk)
Day, Stephen	Hughes, Robert G. (Harrow W)
Devlin, Tim	Hunt, Rt Hon David
Dickens, Geoffrey	Hunt, Sir John (Ravensbourne)
Dicks, Terry	Hunter, Andrew
Dorrell, Stephen	Hurd, Rt Hon Douglas
Douglas-Hamilton, Lord James	Irvine, Michael
Dover, Den	Jack, Michael
Dunn, Bob	Jackson, Robert
Durant, Sir Anthony	Janman, Tim
Dykes, Hugh	Johnson Smith, Sir Geoffrey
Eggar, Tim	Jones, Gwilym (Cardiff N)
Emery, Sir Peter	Jones, Robert B (Herts W)
Evans, David (Welwyn Hatf'd)	Jopling, Rt Hon Michael
Evennett, David	Kellett-Bowman, Dame Elaine
Fallon, Michael	Key, Robert
Farr, Sir John	Kilfedder, James
Fenner, Dame Peggy	King, Roger (B'ham N'thfield)
Field, Barry (Isle of Wight)	King, Rt Hon Tom (Bridgwater)
Finsberg, Sir Geoffrey	Kirkhope, Timothy
Fishburn, John Dudley	Knapman, Roger
Fookes, Dame Janet	Knight, Greg (Derby North)
Forman, Nigel	Knight, Dame Jill (Edgbaston)
Forsyth, Michael (Stirling)	Knowles, Michael
Forth, Eric	Knox, David
Fowler, Rt Hon Sir Norman	Lamont, Rt Hon Norman
Fox, Sir Marcus	Lang, Rt Hon Ian
Franks, Cecil	Latham, Michael
Freeman, Roger	Lawrence, Ivan
French, Douglas	Lawson, Rt Hon Nigel
Fry, Peter	Lee, John (Pendle)
Gale, Roger	Leigh, Edward (Gainsbor'gh)
Gardiner, Sir George	Lennox-Boyd, Hon Mark
Garel-Jones, Tristan	Lester, Jim (Broxtowe)
Gilmour, Rt Hon Sir Ian	Lightbown, David
Glyn, Dr Sir Alan	Lilley, Rt Hon Peter
Goodhart, Sir Philip	Lloyd, Sir Ian (Havant)
Goodlad, Alastair	Lloyd, Peter (Fareham)
Goodson-Wickes, Dr Charles	Lord, Michael
Gorman, Mrs Teresa	Luce, Rt Hon Sir Richard
Gorst, John	Lyell, Rt Hon Sir Nicholas
Grant, Sir Anthony (CambsSW)	Macfarlane, Sir Neil
Greenway, Harry (Ealing N)	MacGregor, Rt Hon John
Greenway, John (Ryedale)	MacKay, Andrew (E Berkshire)
Gregory, Conal	Maclean, David
Griffiths, Sir Eldon (Bury St E')	McLoughlin, Patrick
Griffiths, Peter (Portsmouth N)	McNair-Wilson, Sir Michael
Grist, Ian	McNair-Wilson, Sir Patrick
Ground, Patrick	Madel, David
Grylls, Michael	Major, Rt Hon John
Gummer, Rt Hon John Selwyn	Malins, Humfrey
Hague, William	Mans, Keith
Hamilton, Rt Hon Archie	Maples, John
Hamilton, Neil (Tatton)	Marland, Paul
Hampson, Dr Keith	Marlow, Tony
Hanley, Jeremy	Marshall, John (Hendon S)
Hannam, John	Marshall, Sir Michael (Arundel)
Hargreaves, A. (B'ham H'll Gr')	Martin, David (Portsmouth S)
Hargreaves, Ken (Hyndburn)	Mates, Michael
Harris, David	Maude, Hon Francis
Haselhurst, Alan	Mawhinney, Dr Brian
Hawkins, Christopher	Maxwell-Hyslop, Robin
Hayes, Jerry	Mayhew, Rt Hon Sir Patrick
Hayhoe, Rt Hon Sir Barney	Mel lor, Rt Hon David
Hayward, Robert	Meyer, Sir Anthony
Heath, Rt Hon Edward	Miller, Sir Hal
Heathcoat-Amory, David	Mills, Iain
Heseltine, Rt Hon Michael	Miscampbell, Norman
Hicks, Mrs Maureen (Wolv' NE)	Mitchell, Andrew (Gedling)
Hicks, Robert (Cornwall SE)	Mitchell, Sir David
Higgins, Rt Hon Terence L.	Moate, Roger
Hill, James	Monro, Sir Hector
Hind, Kenneth	Montgomery, Sir Fergus
Hogg, Hon Douglas (Gr'th'm)	Moore, Rt Hon John
Hordern, Sir Peter	Morris, M (N'hampton S)
Howard, Rt Hon Michael	Morrison, Sir Charles
Howarth, Alan (Strat'd-on-A)	Morrison, Rt Hon Sir Peter
Howarth, G. (Cannock & B'wd)	Moss, Malcolm
Howe, Rt Hon Sir Geoffrey	Moynihan, Hon Colin

Neale, Sir Gerrard	Spicer, Sir Jim (Dorset W)
Needham, Richard	Spicer, Michael (S Worcs)
Nelson, Anthony	Squire, Robin
Neubert, Sir Michael	Stanbrook, Ivor
Newton, Rt Hon Tony	Stanley, Rt Hon Sir John
Nicholls, Patrick	Steen, Anthony
Nicholson, David (Taunton)	Stern, Michael
Nicholson, Emma (Devon West)	Stevens, Lewis
Norris, Steve	Stewart, Allan (Eastwood)
Onslow, Rt Hon Cranley	Stewart, Andy (Sherwood)
Oppenheim, Phillip	Stewart, Rt Hon Sir Ian
Owen, Rt Hon Dr David	Stokes, Sir John
Page, Richard	Sumberg, David
Paice, James	Summerson, Hugo
Parkinson, Rt Hon Cecil	Tapsell, Sir Peter
Patnick, Irvine	Taylor, Ian (Esher)
Patten, Rt Hon Chris (Bath)	Temple-Morris, Peter
Patten, Rt Hon John	Thatcher, Rt Hon Margaret
Pattie, Rt Hon Sir Geoffrey	Thompson, D. (Calder Valley)
Pawsey, James	Thompson, Patrick (Norwich N)
Peacock, Mrs Elizabeth	Thorne, Neil
Porter, Barry (Wirral S)	Thornton, Malcolm
Porter, David (Waveney)	Thurnham, Peter
Portillo, Michael	Townend, John (Bridlington)
Powell, William (Corby)	Townsend, Cyril D. (B'heath)
Price, Sir David	Tracey, Richard
Raffan, Keith	Tredinnick, David
Raison, Rt Hon Sir Timothy	Trippier, David
Rathbone, Tim	Trotter, Neville
Redwood, John	Twinn, Dr Ian
Renton, Rt Hon Tim	Vaughan, Sir Gerard
Rhodes James, Sir Robert	Viggers, Peter
Riddick, Graham	Wakeham, Rt Hon John
Ridley, Rt Hon Nicholas	Waldegrave, Rt Hon William
Ridsdale, Sir Julian	Walden, George
Rifkind, Rt Hon Malcolm	Walker, Bill (T'side North)
Roberts, Rt Hon Sir Wyn	Walker, Rt Hon P. (W'cester)
Roe, Mrs Marion	Waller, Gary
Rossi, Sir Hugh	Walters, Sir Dennis
Rost, Peter	Ward, John
Rowe, Andrew	Wardle, Charles (Bexhill)
Rumbold, Rt Hon Mrs Angela	Warren, Kenneth
Ryder, Rt Hon Richard	Watts, John
Sackville, Hon Tom	Wells, Bowen
Sainsbury, Hon Tim	Wheeler, Sir John
Sayeed, Jonathan	Whitney, Ray
Scott, Rt Hon Nicholas	Widdecombe, Ann
Shaw, David (Dover)	Wiggin, Jerry
Shaw, Sir Giles (Pudsey)	Wilkinson, John
Shaw, Sir Michael (Scarb')	Wilshire, David
Shelton, Sir William	Wolfson, Mark
Shephard, Mrs G. (Norfolk SW)	Wood, Timothy
Shepherd, Colin (Hereford)	Woodcock, Dr. Mike
Shersby, Michael	Yeo, Tim
Sims, Roger	Young, Sir George (Acton)
Skeet, Sir Trevor	Younger, Rt Hon George
Smith, Sir Dudley (Warwick)
Smith, Tim (Beaconsfield)	Tellers for the Ayes:
Soames, Hon Nicholas	Mr. John M. Taylor and Mr. Nicholas Baker.
Speed, Keith
Speller, Tony

NOES
Adams, Mrs Irene (Paisley, N.)	Benton, Joseph
Allen, Graham	Bermingham, Gerald
Anderson, Donald	Bidwell, Sydney
Archer, Rt Hon Peter	Biffen, Rt Hon John
Armstrong, Hilary	Blair, Tony
Ashdown, Rt Hon Paddy	Blunkett, David
Ashley, Rt Hon Jack	Boateng, Paul
Ashton, Joe	Body, Sir Richard
Banks, Tony (Newham NW)	Boyes, Roland
Barnes, Harry (Derbyshire NE)	Bradley, Keith
Barron, Kevin	Bray, Dr Jeremy
Battle, John	Brown, Gordon (D'mline E)
Beckett, Margaret	Brown, Nicholas (Newcastle E)
Beith, A. J.	Browne, John (Winchester)
Bell, Stuart	Bruce, Malcolm (Gordon)
Benn, Rt Hon Tony	Caborn, Richard
Bennett, A. F. (D'nt'n & R'dish)	Callaghan, Jim

Campbell, Menzies (Fife NE)	Hood, Jimmy
Campbell, Ron (Blyth Valley)	Howarth, George (Knowsley N)
Campbell-Savours, D. N.	Howell, Rt Hon D. (S'heath)
Canavan, Dennis	Howells, Geraint
Clark, Dr David (S Shields)	Howells, Dr. Kim (Pontypridd)
Clarke, Tom (Monklands W)	Hoyle, Doug
Clay, Bob	Hughes, John (Coventry NE)
Clelland, David	Hughes, Robert (Aberdeen N)
Cohen, Harry	Hughes, Simon (Southwark)
Cook, Frank (Stockton N)	Hume, John
Cook, Robin (Livingston)	Ingram, Adam
Corbett, Robin	Janner, Greville
Corbyn, Jeremy	Johnston, Sir Russell
Cousins, Jim	Jones, Barry (Alyn & Deeside)
Cox, Tom	Jones, Martyn (Clwyd S W)
Crowther, Stan	Kaufman, Rt Hon Gerald
Cryer, Bob	Kennedy, Charles
Cummings, John	Kilfoyle, Peter
Cunliffe, Lawrence	Kinnock, Rt Hon Neil
Cunningham, Dr John	Kirkwood, Archy
Dalyell, Tam	Kumar, Dr. Ashok
Darling, Alistair	Lambie, David
Davies, Rt Hon Denzil (Llanelli)	Leadbitter, Ted
Davies, Ron (Caerphilly)	Lestor, Joan (Eccles)
Davis, Terry (B'ham Hodge H'l)	Lewis, Terry
Dewar, Donald	Litherland, Robert
Dixon, Don	Livsey, Richard
Dobson, Frank	Lloyd, Tony (Stretford)
Doran, Frank	Lofthouse, Geoffrey
Douglas, Dick	Loyden, Eddie
Duffy, Sir A. E. P.	McAllion, John
Dunnachie, Jimmy	McAvoy, Thomas
Dunwoody, Hon Mrs Gwyneth	McCartney, Ian
Eadie, Alexander	Macdonald, Calum A.
Eastham, Ken	McFall, John
Edwards, Huw	McKay, Allen (Barnsley West)
Enright, Derek	McKelvey, William
Evans, John (St Helens N)	McLeish, Henry
Ewing, Harry (Falkirk E)	Maclennan, Robert
Ewing, Mrs Margaret (Moray)	McMaster, Gordon
Fairbairn, Sir Nicholas	McNamara, Kevin
Fatchett, Derek	McWilliam, John
Faulds, Andrew	Madden, Max
Fearn, Ronald	Mahon, Mrs Alice
Field, Frank (Birkenhead)	Mallon, Seamus
Fields, Terry (L'pool B G'n)	Marek, Dr John
Fisher, Mark	Marshall, David (Shettleston)
Flannery, Martin	Marshall, Jim (Leicester S)
Flynn, Paul	Martin, Michael J. (Springburn)
Foster, Derek	Martlew, Eric
Foulkes, George	Maxton, John
Fraser, John	Meacher, Michael
Fyfe, Maria	Meale, Alan
Galbraith. Sam	Michael, Alun
Galloway, George	Michie, Bill (Sheffield Heeley)
Garrett, John (Norwich South)	Michie, Mrs Ray (Arg'l & Bute)
Garrett, Ted (Wallsend)	Mitchell, Austin (G't Grimsby)
George, Bruce	Moonie, Dr Lewis
Gilbert, Rt Hon Dr John	Morgan, Rhodri
Godman, Dr Norman A.	Morley, Elliot
Golding, Mrs Llin	Morris, Rt Hon A. (W'shawe)
Gordon, Mildred	Morris, Rt Hon J. (Aberavon)
Gould, Bryan	Mowlam, Marjorie
Graham, Thomas	Mullin, Chris
Grant, Bernie (Tottenham)	Murphy, Paul
Griffiths, Nigel (Edinburgh S)	Nellist, Dave
Griffiths, Win (Bridgend)	Oakes, Rt Hon Gordon
Grocott, Bruce	O'Brien, William
Hain, Peter	O'Hara, Edward
Hardy, Peter	O'Neill, Martin
Harman, Ms Harriet	Orme, Rt Hon Stanley
Hattersley, Rt Hon Roy	Paisley, Rev Ian
Haynes, Frank	Parry, Robert
Heal, Mrs Sylvia	Patchett, Terry
Healey, Rt Hon Denis	Pendry, Tom
Henderson, Doug	Pike, Peter L.
Hinchliffe, David	Powell, Ray (Ogmore)
Hoey, Kate (Vauxhall)	Prescott, John
Hogg, N. (C'nauld & Kilsyth)	Primarolo, Dawn
Home Robertson, John	Quin, Ms Joyce

Radice, Giles	Steel, Rt Hon Sir David
Randall, Stuart	Steinberg, Gerry
Redmond, Martin	Stephen, Nicol
Rees, Rt Hon Merlyn	Stott, Roger
Reid, Dr John	Strang, Gavin
Richardson, Jo	Straw, Jack
Robertson, George	Taylor, Mrs Ann (Dewsbury)
Robinson, Geoffrey	Taylor, Matthew (Truro)
Robinson, Peter (Belfast E)	Thomas, Dr Dafydd Elis
Rogers, Allan	Turner, Dennis
Rooker, Jeff	Vaz, Keith
Rooney, Terence	Wallace, James
Ross, Ernie (Dundee W)	Walley, Joan
Rowlands, Ted	Warden, Gareth (Gower)
Ruddock, Joan	Wareing, Robert N.
Salmond, Alex	Watson, Mike (Glasgow, C)
Sedgemore, Brian	Welsh, Andrew (Angus E)
Sheerman, Barry	Welsh, Michael (Doncaster N)
Sheldon, Rt Hon Robert	Williams, Rt Hon Alan
Shepherd, Richard (Aldridge)	Williams, Alan W. (Carm'then)
Shore, Rt Hon Peter	Wilson, Brian
Sillars, Jim	Winnick, David
Skinner, Dennis	Winterton, Nicholas
Smith, Andrew (Oxford E)	Wise, Mrs Audrey
Smith, C. (Isl'ton & F'bury)	Worthington, Tony
Smith, Rt Hon J. (Monk'ds E)	Young, David (Bolton SE)
Smith, J. P. (Vale of Glam)
Snape, Peter	Tellers for the Noes:
Soley, Clive	Mr. Eric Illsley and Mr. Jack Thompson.
Spearing, Nigel

Question accordingly agreed to.

Resolved, That this House, believing it is in Britain's interests to continue to be at the heart of the European Community and able to shape its future and that of Europe as a whole, endorses the constructive negotiating approach adopted by Her Majesty's Government in the Inter-Governmental Conferences on Economic and Monetary Union and on Political Union; and urges them to work for an agreement at the forthcoming European Council at Maastricht which avoids the development of a federal Europe, enables this country to exert the greatest influence on the economic evolution of the Community while preserving the right of Parliament to decide at a future date whether to adopt a single currency, on issues of Community competence concentrates the development of action on those issues which cannot be handled more effectively at national level and, in particular, avoids intrusive Community measures in social areas which arc matters for national decision, devlops a European security policy compatible with NATO and co-operation in foreign policy which safeguards this country's national interests, increases the accountability of the Commission, enhances the rule of law in the Community including improved implementation, enforcement and compliance with Community legislation, improves co-operation between European governments in the fight against drugs, terrorism and cross-border crime, and through these policies secures the long-term interests of the United Kingdom.