HC Deb 21 May 1992 vol 208 cc509-600

Order read for resuming adjourned debate on amendment to Question [20 May] That the Bill be now read a Second time.

Which amendment was: to leave out from "That" to the end of the Question and to add instead thereof: declines to give a Second Reading to a Bill which keeps the United Kingdom outside the scope of the Protocol on Social Policy, thereby excludes the United Kingdom from the Social Chapter and prevents the people of the United Kingdom from being part of the full social dimension of the European Community to which its eleven partners have agreed in order to facilitate greater protection for employed people in their working conditions, better rights of consultation and information, equality of treatment and opportunities for men and women and the integration into the labour force of long term unemployed people, including disabled workers, deeply regrets the Government's failure to make any attempt to build into the Maastricht Treaty convergence criteria which emphasise the need for balanced development, a high level of employment and sustainable growth in the regions and countries of the Community; deplores the fact that the opt-out provisions of the Treaty on the approach to Monetary Union would mean that neither the European Monetary Institute nor the proposed European Central Bank are likely to be located in Britain; and regrets the fact that the Bill does not include provisions to strengthen co-operation between the sovereign nations of the Community, within a structure of subsidiarity, to enhance political, social, environmental, economic and technological progress throughout Europe and in the developing countries, or to ensure the maximum of democratic accountability of current and future Community institutions to national parliaments and to the European Parliament.

Question again proposed, That the amendment be made.

[Relevant documents:

Treaty of Rome, as amended by the Single European Act (Cm 455)

Treaty on European Union (Cm 1934)

Fifteenth Report from the Select Committee on European Legislation (House of Commons Paper No. 24-xv of Session 1991–92)

Second Report from the Foreign Affairs Committee (House of Commons Paper No. 223 of Session 1991–92) on Europe after Maastricht and Observations by the Government on the Report (Cm 1965)

Third Report from the Health Committee (House of Commons Paper No. 180 of Session 1991–92) on the European Community and Health Policy

Minutes of Evidence taken before the Home Affairs Committee on 5th, 12th and 26th February 1992 (House of Commons Paper No. 215 of Session 1991–92) on Migration Control at the External Borders of the European Community

Minutes of Evidence taken before the Treasury and Civil Service Committee on 19th February 1992 (House of Commons Paper No. 285 of Session 1991–92) on Economic and Monetary Union

Fourth Special Report from the Treasury and Civil Service Committee (House of Commons Paper No. 334 of Session 1991–92) on European Community Finances

The White Paper on Developments in the European Community, July-December 1991 (Cm 1857)

The White Paper on Developments in the European Community, January-June 1991 (Cm 1657).]

Madam Speaker

I must inform the House that there are still a great number of right hon. and hon. Members wishing to speak and that I have therefore had to place a time limit of 10 minutes on speeches between 7 pm and 9 pm. I would appreciate it if those speaking before and after those times would limit their speeches accordingly.

4.7 pm

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

This is the third time that the essential European question has been debated in this Chamber since last November. As the debate moves on, so does the world. The facts of Europe were very different when these debates began more than 20 years ago. There has been a huge increase in the proportion of our trade carried on with our fellow members of the Community; and a huge increase in the number of journeys made by our citizens inside the Community—22 million such journeys last year.

Our companies are increasingly organised to treat the Community as a single market. One thinks of a company such as Airbus Industrie, with its 20 per cent. British share, which was made possible by the Community. It is now the world's second largest manufacturer of civil aircraft.

Mr. Gerald Kaufman (Manchester, Gorton)

Airbus Industrie was competent and active during the 1970s, and the Labour Government were responsible for getting the company to agree to manufacture the wing of the airbus in this country. With all his resources, the right hon. Gentleman ought to be a great deal better briefed.

Mr. Hurd

But we were in the Community in the 1970s. I had forgotton that the right hon. Gentleman was briefly in charge of these arrangements during one of the periods of his European journey, when he was, I think, in favour of our membership of the Community. I stand by what I have said.

These are just a few of the facts of Europe, created mostly not by Ministers or Members of this House but by our constituents. These facts grow daily stronger around us as we negotiate and debate, and they help to account for the magnetic effect of the Community on its neighbours to the north, the south and the east. The proof of that is the lengthening queue of applicants. There are six applications for full membership on the table already, and others will surely follow. These applications are not for membership of some vague future confederation but for membership of the existing Community, with all its failings.

Alongside these facts runs the debate—our debate and that in other countries—about the future of the Community. The Community proceeds by debate, by argument, by negotiation and, we hope, by agreement. We argue because we hope to agree. In democracies, argument is not a disaster or a crisis but a necessary prelude to agreement. Usually, although not always, after we have argued in Europe we agree. That has been true under all three of the Conservative Prime Ministers for whom I have worked on European matters.

This agreement, this Maastricht treaty which we are asking the House to ratify through this Bill, is the product of the same process—18 months of hard and often argumentative negotiation. In the end we have an agreement—this is our case—that is good for Britain and for Europe.

From the speeches yesterday, it is clear that the worry of the doubters on both sides of the House is partly about the treaty itself, but perhaps even more about what might lie ahead. The worry is that Maastricht, like other agreements, will lead us relentlessly to a centralised Europe, in which eventually there will be a single executive holding all worthwhile power, and a single Parliament, with national Parliaments being steadily stripped of substance. Some newspapers have reported a Commission plan to move in this direction without delay. Therefore, it is worth pausing for a moment on this question of the institutions of the Community and its enlargement.

At Maastricht, the European Council, the summit, asked the Commission to write a report on the enlargement of the Community. The Commission met last week to discuss for the first time what that paper might contain. It knows our view, which is widely shared. It is that Sweden, Austria and Finland should be welcomed soon. It is conceivable that one or two others might join at that time—Norway, for example, and, which is becoming more likely, Switzerland. In 1992—that is, during our presidency—we would aim for a mandate prepared by the Commission for negotiations with these countries. In 1993, there would be negotiations, and in 1994 ratification. This first wave would enter the Community in 1995.

The press reports that I mentioned suggested that the Commission would use this opportunity to reopen the Maastricht agreement—the agreement that we are asking the House to ratify—arguing that any enlargement of the Community needed the more centralised institutions, including the stronger executive Commission, that were argued for but not agreed at Maastricht. We have warned against this approach. As my predecessor Ernest I3evin said of something else, if we open this Pandora's box, we will find it full of Trojan horses. We believe that this first wave of new entrants can be accommodated without reopening the main Maastricht discussion before 1996. I hope and believe that this view is increasingly accepted.

As the House knows and welcomes, other new entrants will come later, but not, we hope, much later. We must give a constructive reply to Malta, Cyprus and Turkey. Thinking especially of Turkey, our links should be much stronger than those that exist today. As my right hon. Friend the Prime Minister said, we want Czechoslovakia, Hungary and Poland to join the Community by the end of the century at the latest.

In 1996, as was agreed by Maastricht, there will be a fresh review of institutions. The House will have noticed that, at Maastricht, we successfully held off any attempt to prejudice that review, or any prejudicial prescription of it. Nothing in Maastricht, either in the review clause or in the treaty, dictates the next step.

On the one hand, as my right hon. Friend the Prime Minister set out, Maastricht provides for some wider definition of competence and some extension of qualified majority voting but, on the other hand, the treaty establishes in treaty the worth of intergovernmental co-operation on foreign and security policy and on home affairs. That is to say that the Maastricht treaty recognised that these things do not need to be done centrally, with a common line dictated at the centre and going right across the board. The principle of subsidiarity is likewise established by treaty.

Mr. Mike Hall (Warrington, South)


Mr. David Winnick (Walsall, North)


Mr. Hurd

I am coming to the hon. Member for Walsall, North (Mr. Winnick). First I shall give way to the hon. Member for Warrington, South (Mr. Hall).

Mr. Hall

Article 198a in the original treaty of Maastricht sets up a Committee of the Regions to provide a forum for consultation between local authorities in Europe, the Commission and the Council of Europe. I understand that, subsequent to the original article being signed, the wording has been changed to remove local authority representation. Will the Foreign Secretary make a statement on that issue?

Mr. Hurd

The clause does not specify that those concerned need to be representatives of local authorities. It goes wider than that. The Committee of the Regions will be established—the clause is there—and we, the Government, are now considering how that should be done in United Kingdom terms. Obviously policy needs to be made and an announcement made, but it is a matter for the Government to settle in accordance with the treaty.

Several Hon. Members


Mr. Hurd

I have nothing more to say on that point. I know that, if I start to give way on this subject, I shall have to give way to several representatives of constituencies in different parts of the Kingdom. These interventions started yesterday. This is a legitimate forum and a place for argument but not, I think, on Second Reading.

I shall illustrate the point that I am making about centralising and non-centralising tendencies by saying something a bit more specific about foreign policy and the way that it is made. As the House knows, an enormous amount of foreign policy business is now done among and between the Twelve. We aim to reach agreement and to act together when we can, not because there is a legal obligation to do so but because it usually makes sense to try.

I shall give the House an example. Faced with the confusion and rapid change that we now see in central and eastern Europe, the traditional response of the west European powers 100 years ago would have been to pick sides, choose clients and deepen trouble by transferring their own rivalries to the new scene. That process went on and reached its climax, which was the great war. It arose out of a shooting in Sarajevo.

By contrast, when the Soviet Union was breaking up last year, we discussed in the Twelve how we should act. We agreed to recognise the emerging republics together, and together we accepted Russia as the successor state in the Security Council of the United Nations. They were all difficult problems. What could have taken months of discord was quietly and amicably settled.

I readily acknowledge that it does not always work as well as that. This process among the Twelve depends on agreement by all, and it is therefore sometimes slow and frustrating. Sometimes member states have to decide, and are free to decide, whether to compromise or to go off on their own.

Yugoslavia is an example, and it was often mentioned during the debate yesterday. Once, last summer, we had said a goodbye—a sad goodbye in my view—to the hope that there might still be a Yugoslavia by consent, it was clear that in principle the republics of the former Yugoslavia would become independent. As I said last autumn, the argument from then on was about timing, not principle. Germany recognised Slovenia and Croatia later. Britain and France recognised them earlier than each of us would have preferred. I think it was right, however, to compromise on timing rather than split, take sides and further aggravate the trouble in Yugoslavia.

Listening to the news, reading the news and reading the reports that I receive, my worry now about Yugoslavia is not about who recognised whom and when but about how we can help to bring the tragedy to an end. No country is willing to send in its troops to impose a settlement by force. So we have to keep alive the peacemaking efforts, we have to pile up the pressure on those, particularly the Serbs and the JNA, the national army, who at the moment are mainly responsible for violence, and we have to bind up the wounds with help for the casualties and the refugees.

Sir Michael Marshall (Arundel)

Does not the illustration that my right hon. Friend has just given add force to his earlier comment about the real need for some practical deadline for the admission of countries from central and eastern Europe? In the case of the Czech and Slovak Republic, is there not a worry that, unless there is some firm time in our minds, the problems that my right hon. Friend outlined could, sadly, spread in that direction?

Mr. Hurd

My hon. Friend is right. Under a British initiative, we now have association agreements with Hungary, Czechoslovakia and Poland. During our presidency, I propose to invite all three to a political meeting so that they feel that it is not just a matter of trade concessions, but that from now on they are part of the discussions and they can talk frankly to us about the issues on their minds, even before they are full members. It is for them to decide when to apply for membership, but of course that involves certain obligations that they will take time to meet. We have set a target, and we do not mean to stand still and do nothing in the meanwhile.

Mr. Harry Greenway (Ealing, North)

The question of frontiers must be fundamental to the EC and its individual member states. Should frontier control be a national responsibility or an EC responsibility as a result of the treaty?

Mr. Hurd

My right hon. Friend the Prime Minister dealt with that point when he opened the debate yesterday, and it also arose later. It relates to article 8a of the Single European Act, not of the Bill or the treaty. My right hon. Friend clearly set out why and in what way we intend to argue fiercely, and I believe successfully, on both legal and common-sense grounds for our ability to maintain our arrangements.

I want to return to the argument about the formulation of foreign policy. The centralists argue that the discussions on its substance should be cut short, because they are sometimes slow and frustrating, and the matter resolved by majority voting. I spent much of last year disagreeing with that argument. Currently the EC is discussing Macedonia, one of the republics of the former Yugoslavia, and there are strong feelings in one member state about that.

I am sure that it would be a mistake at the present time to try to ram through by majority voting the recognition of Macedonia, under its present name, against the passionate opposition of Greece. The principle must be one of agreeing and acting together if we can—and if not, member states are free to act separately. That is the principle on which we operate today and the principle that my right hon. Friend preserved at Maastricht.

The CFSP chapter of the treaty is about member states taking decisions by unanimity. There is strictly limited provision for qualified majority voting, tightly defined, over which every member state has a veto. For a decision on implementation to be taken by QMV, all the member states have to agree to that procedure. The principle of unanimity is preserved and will certainly be used on all important decisions.

Mr. David Trimble (Upper Bann)

It is interesting that, when referring to the recognition of Macedonia, the right hon. Gentleman regards the attitude of the Greek Government as reasonable and not to be overridden by a majority. The Greeks are objecting to what they see as a possible territorial claim by Macedonia. Would it not be appropriate for the Secretary of State to apply a similar approach to the Irish Republic?

Mr. Hurd

The hon. Gentleman has discussed with me and other Ministers articles 2 and 3 of the Irish constitution, which have been in place for a long time. They are open to argument and controversy, something in which the hon. Gentleman and his hon. Friends take the lead. I do not think that even his argument would be advanced if I were to act in the way that he suggests.

Nothing in the CFSP stops us acting independently. Indeed, there may well be occasions on which we or other member states feel strongly or need to act quickly, and we can decide to take independent action should we wish to do so. Anyone questioning that should study article J.3.6 of the treaty. Our position on the Security Council is reinforced and that was a satisfactory arrangement that we worked out, particularly with the French. I think that the balance of it is right.

The European Court of Justice came up often during the debate of the past 24 hours, and I should like to deal with that frankly. There is no doubt that, during the past 35 years, the treaties on which the court operated have set out an integrationist approach, and the court's decisions have reflected that. Arguments put by my right hon. and hon. Friends yesterday, which have been reflected in many speeches in the House, suggest that the thrust of the Maastricht treaty is different because of the test of subsidiarity and the rejection over a wide area of the centralising principle.

For example, in the new treaty, we have expressly excluded the Community from taking "harmonising measures" in the new articles on culture, health and education. In the past, that drive towards harmonising legislation has caused many problems, with the Community, and the Commission in particular, trying to inveigle their way into the nooks and crannies of national life.

Now the Community's objectives have been more clearly circumscribed. We have article 3b on subsidiarity. That covers all areas of Community policy and, when the treaty is ratified, it will form a backcloth against which the court will have to make its judgments, particularly in those areas where there is a challenge to the Community taking action at all.

Yesterday, not for the first time, the hon. Member for Newham, South (Mr. Spearing) went over that ground in some detail. He is right to say that the only definition of subsidiarity that matters is the one in the treaty. But he is wrong to claim that, in areas of exclusive Community competence, subsidiarity, whatever its principle and whatever its definition, does not apply.

If the hon. Gentleman looks at the final sentence of article 3b, he will see that it says that: Any action by the Community is covered by the principle. We had a good deal of discussion about that at Maastricht. I am glad that we managed to achieve what we did, and I am drawing it to the hon. Gentleman's attention, because he is always fair-minded.

Over-regulation is now under attack both in the areas where it is accepted that the Community has a role and in those many areas where the Community and member states both have a role to play. Of course, we must test it in practice. Article 3b is a beginning; it is a definition in the treaty. However, the House should not underestimate the importance of the change.

Mr. Nigel Spearing (Newham, South)

We all agree that this is an important matter, and I thank the Minister of State, the right hon. Member for Watford (Mr. Garel-Jones), for what he said earlier this morning. Will the Foreign Secretary review what he has just said? Surely there is no definition of subsidiarity in article 3b, only a reference to the principle, whatever that be. The last sentence to which he has just referred, which I shall not quote because it appears in yesterday's copy of Hansard, and to which the Minister of State referred in the early hours of this morning, talks about what is necessary to achieve the objectives of the treaty. That surely is not coterminous with subsidiarity, because "necessity" and "subsidiarity" are two different words with the jurisdiction of the European Court of Justice in whatever context it is brought to their attention.

Mr. Hurd

Those hon. Members who wish to pursue the argument will have to read article 3b in the quiet of their studies and offices and make a judgment about whether that is important. The article certainly contains a definition of subsidiarity. It says: the Community shall take action … only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States"— and so on. That is a definition of subsidiarity.

Mr. Christopher Gill (Ludlow)

I am grateful to my right hon. Friend for giving way, because I am most interested in the consideration of the difference between subsidiarity and centralisation. I am concerned about article 99, which states that there shall be harmonisation of legislation concerning turnover taxes, excise duties and other forms of indirect taxation". That important matter is of great concern to the House. The whole history of the House and of Parliament has to do with who levies taxes on the people and spends that money. Is it conceded that that will now be controlled from the centre, or can my right hon. Friend give an assurance that it will be put back under the articles of subsidiarity?

Mr. Hurd

The article to which my hon. Friend refers does not contain any change of substance compared with the Single European Act. The principle of unanimity remains. My right hon. Friend the Chancellor of the Exchequer has heard my hon. Friend's remarks, and he may reply to them more fully when he winds up.

It is clear that we are not just talking about an article in the treaty that has no back-up. The Commission is taking the concept of subsidiarity seriously. My right hon. Friend the Prime Minister quoted it yesterday. The President of the EC Commission in particular is on the record in that respect. On French television last weekend, he was asked whether the Commission would propose ceding a number of competences that are now Community competences back to member states. He said: I will do it next year, if I am there. Or it will be in my will and testament if I leave. He cited the example of the environment, and said: I am in the process of preparing all this. It's what is called a more rigorous application of the principle of subsidiarity. That was said by the President of the EC Commission before the treaty has any effect. I am making the point that that is now in the debate and is increasingly accepted as a principle. It is now in the treaty, and I hope that means that over-regulation is going out on the ebb tide.

Mr. Tony Marlow (Northampton, North)

My right hon. Friend says that the European institutions are imbued with the spirit of subsidiarity. If that is the case, why are they seeking to enforce a 48-hour working week on the United Kingdom? Under the Single European Act, we thought that question would be decided by unanimity. Why does not the Community row back on that?

Mr. Hurd

I am saying that there is in the new treaty, which is not yet in force, an article of subsidiarity that is important. I am saying that the President of the EC Commission and other people are increasingly referring to that as a guiding principle, even before it is in effect. They have a long way to go before it is in effect.

As to the 48-hour week, my hon. Friend knows the position. Quite apart from the merits of that proposal, which is bad from the point of view of this country and of Europe, the article on which it is based, from the Single European Act, is inadequate.

The structure of the Maastricht treaty will affect European Court of Justice activity. Although there have been some comments outside the House to the contrary, the pillars—by which I mean foreign policy, justice and home matters—are excluded from the court's jurisdiction. It has no say in those matters. Article L of the treaty is clear about that. The only exception is if member states choose, in any given convention, to ask the court to be the arbiter. That would be a sovereign decision reached by all 12 member states for any given convention.

The Community is an evolving structure. At each step, there is a new framework within which the existing treaty language is to be interpreted.

The European Parliament plays an important part in reinforcing the efforts of national Parliaments and contributing to filling any democratic deficit. We supported changes in Maastricht to give the directly elected European Parliament more control over the Commission and the scrutiny of the Community's finances. My right hon. Friend the Prime Minister spelled out those details.

There were also modest changes that will give the European Parliament a blocking power over certain Community legislation, but with the last say on content being reserved for the Council of Ministers. The European Parliament will not have the power to initiate legislation or to impose laws on member states.

The treaty of Maastricht reinforces the position of national Parliaments, which, as far as I am aware, is a new development in the history of European treaties. It does that in two ways. First, it uses the structure of pillars, limiting the areas of Community legislation and therefore leaving the national Parliaments in charge of the intergovernmental pillars of policy. Secondly, the two declarations made at Maastricht expressly encourage greater involvement of national Parliaments.

It is not for Governments to say how Parliaments are to pursue those opportunities, because each of the 12 Parliaments is sovereign. I hope, however, that the House will continue to give a lead in this regard, not least during our presidency. I note, for example, that in the ratification debate in Paris, the French Assembly secured commitments from the French Government to more rigorous scrutiny arrangements, along the lines of those that we have here.

Mr. Ron Leighton (Newham, North-East)

Under economic and monetary union, what subsidiarity would there be in monetary policy?

Mr. Hurd

I think that I will leave that to my right hon. Friend the Chancellor of the Exchequer, who has conducted those parts of the negotiations. Let me say something that my right hon. Friend cannot say, however. It was a remarkable achievement for him, and our right hon. Friend the Prime Minister, to preserve an absolute freedom to take a full part in the preparation of this project, while reserving for this country the right to decide whether to join stage 3. Uusually one or the other is obtained; to obtain both the freedom to decide at the right time and the right to take a full part in preparation was, as I have said, a remarkable achievement.

Let me say a few words about defence, which has come up quite often in discussion and is in the newspapers today. It is important to be clear about the position. At Maastricht, we reaffirmed the principle that European activity in defence should complement the common defence that we have through NATO. NATO is, and will remain—as Chancellor Kohl has said—the anchor of European security.

At the same time, however—this has been clear in the debate and, indeed, for some years now—the Europeans need to shoulder a greater share of the burden of providing their own security, while keeping the critical link between the transatlantic and the European dimensions of our defence. That is why we agreed at Maastricht to make the Western European Union, with its close treaty link to NATO, the vehicle for developing a genuine European military capability to act in areas where NATO is not engaged or chooses not to be.

In a speech made in London last week, my right hon. and learned Friend the Secretary of State for Defence set out our practical British proposals—which have been widely endorsed by our allies and partners—for giving the WEU that capability and building on what is in the Maastricht treaty, by enabling the WEU to call on a wide range of national or NATO-assigned forces to suit the tasks in hand. NATO would have a prior claim on such forces in any NATO contingencies, but making them available for possible use by the WEU would avoid the need for elaborate separate structures, and is a flexible and realistic way of generating that defence capacity.

As my right hon. and learned Friend said, the forces available to the WEU under those arrangements might include the United Kingdom/Netherlands amphibious force, the new NATO air mobile division and, of course, the Franco-German corps, which is now being discussed at the Franco-German summit. That, we think, would be one of the forces at the disposal of the WEU; we do not think that it makes sense to put all European eggs into a Franco-German basket. We hope that, as the discussion continues, proposals on the lines that we have suggested— our suggestions have been widely welcomed by allies and partners—will be adopted by the WEU Ministers when they meet on 19 June.

Mr. Dennis Skinner (Bolsover)

The Germans—against whom the British fought in two world wars, laying down many lives—are now setting up a super-force to trample all over Europe, and to use their power in a way they have already used it when annexing East Germany. What steps will the Foreign Secretary and the Tory Government take to ensure that the Germans do not arm themselves to the teeth once again?

Mr. Hurd

By continuing and strengthening the membership of NATO, which the hon. Gentleman has consistently opposed, and by continuing the process that he will see in the treaty and the co-operation with Germany and with others on foreign and security policies. That is the right way. It has worked. Even the hon. Gentleman, with his deeply old-fashioned views, will eventually come to realise—or the next generation will come to realise—that that is the way to solve what he and some others still regard as the German problem.

Dr. John Reid (Motherwell, North)

Perhaps I might raise a slightly different point, which I hope will be more helpful to the House than the last one. The relationship between the Western European Union and NATO, as outlined last week in the speech by the Secretary of State for Defence, is a welcome advance by the Government, although it has been long awaited. It deals exclusively, however, with defence in terms of the military proper and military organisations proper. The complex composition of Europe is a much wider matter and has to be dealt with as a security problem rather than just as a defence problem. What was missing from the Secretary of State's speech was the relationship not only between WEU and NATO but between those two organisations and the conference on security and co-operation in Europe. Can the Foreign Secretary say a word about that?

Mr. Hurd

The trouble is that not just a word is needed but a speech. The hon. Gentleman is perfectly right; it is a huge subject. The countries of central and eastern Europe are anxious about their security. They have the CSCE—a large organisation with more than 50 members—but what they do not yet have is a vision and a plan by means of which they could plug into the resources and the will of the organisations of the West, whether that be the European Community, NATO, or the Council of Europe. That is what I hope we can begin to thrash out in a more orderly way than we have done so far at the Helsinki CSCE summit in June. It is a big and important subject, but I do not intend to go any further down that path now, important though it is.

The Maastricht treaty emerged from long, exhaustive negotiations. In a large number of areas—subsidiarity, the rule of law, financial accountability and defence—it reflects our initiatives. It was seen as a success for this country among the press and politicians on the continent. Against that background, a failure to ratify the treaty would be incomprehensible to our partners. It would be a savage blow at the authority of the Government and of the Prime Minister—that is obvious—just at a time when we are particularly well placed to make good use of that authority.

The issues addressed at Maastricht will not go away. In any attempted renegotiations, our position would be diminished, not strengthened. Many of our recent gains would be at risk. Enlargement of the European Community, settlement of the financial issues, reform of the farm policy, now looking brighter—all these prospects would wither. Europe would lapse into months, and I would guess years, of bad-tempered impotence and confusion.

As my right hon. Friend the Member for Shropshire, North (Mr. Biffen) rightly said, Europe is entering a new phase in its history with the collapse of communism. The old, certain dangers with which we lived in this House for so many years are gone. New uncertainties have replaced them. Therefore, the Community, like the other institutions that I listed in answer to the question put to me by the hon. Member for Motherwell, North (Dr. Reid), needs to evolve, especially to meet the challenge of enlargement.

However, the changes do not cast doubt on the fundamental achievements of the Community, or argue for an unpicking of its essential fabric. Maastricht was an important step away from an increasingly centralised, and therefore arthritic, Community towards a new Europe in which Britain has a central place. The day when, last autumn, the negotiators rejected the Dutch draft of the political union treaty, which would have centralised all co-operation between member states in the Community institutions, turned out to have been a watershed.

We have before us an opportunity to take a lead and to promote a clear, coherent view in the period running up to the next intergovernmental conference in 1996, the next time that there is to be a review of the institutions. The ball is at our feet. We have a treaty that more closely—I do not say completely—mirrors British priorities than any of its predecessors. We have a new Government with a firm mandate for a positive but distinctive approach to the Community. We are shortly to take over the six-months presidency of the Community. The Government therefore hope that the House will endorse the treaty and the Bill.

On that foundation, but only on that foundation, this Government, this House and thinking people throughout the country can do what is necessary. We can prepare our minds and our proposals for an enlarged Community of 20 or more members by the end of the decade—a Community that cannot be tightly centralised on those lines but that can and must work together on those matters where Europe must work together, if it is to be effective.

In its most recent report to this House, the Select Committee on Foreign Affairs said: The European union will be a wholly new institution, a unique structure with no equivalents elsewhere in the world. We are building something unique. There are no blueprints. There are no precedents. We are building not a superstate but a Community of member states, upholding diversity and serving rather than dominating its citizens. We now in Britain, at this moment, by good luck and perhaps, along the way, a little good management, have an opportunity to set that course, beginning with a vote for the Bill tonight.

Several Hon. Members


Madam Deputy Speaker (Dame Janet Fookes)

Order. Before I call the right hon. Member for Manchester, Gorton (Mr. Kaufman), may I gently remind Members that many hon. Members have said that they wish to speak in the debate? Those who intervene must stifle the impulse to make full-blown speeches.

4.46 pm
Mr. Gerald Kaufman (Manchester, Gorton)

As the Foreign Secretary pointed out in his last words to the House. the Bill enacts the Maastricht treaty and its protocols into United Kingdom law. Therefore it is to be judged on that basis, but not on that basis alone. The Bill and the treaty must also be judged on the kind of Europe that they will help to produce, and on the kind of Britain that they will help to bring about.

The treaty contains many provisions that the Labour party has advocated for a number of years—in the policy reviews approved by our party conference and in policy statements approved by the Labour party's national executive committee. Some of those provisions have also been advocated by the Government.

For example, there is common ground between the Government and ourselves about the need for subsidiarity, as provided for in article 63b of the treaty. Both parties have advocated interparliamentary contacts. Those appear in the treaty, in the declaration on the conference of the parliaments. Both the Labour party and the Conservative party have called for common foreign and security policies, though without qualified majority voting. Here, too, such policies are provided for in title V of the treaty. However, in its official policy statements, the Labour party has advocated further measures that are to be found in the treaty but that have not been put forward actively by this Conservative Government.

For example, the Labour party has called for an enhanced role for the regions. The Conservatives have been silent on that matter. However, we are very pleased to see, in article 198 of the treaty, that provision is made for a Committee of the Regions. I hope that in Committee the way in which that Committee is to be appointed will be clarified in order to alleviate the misgivings of the local authority associations.

The Labour party called for enhanced voting rights for the citizens of Community countries in local elections and in European Parliament elections. Such voting rights have not been noted as Conservative party policy. Still, they appear in article 68b of the treaty and we welcome them. If, however, there are policies in the treaty that the Labour party has advocated, with Conservative party concurrence, and if there are policies in the treaty that the Labour party has advocated but on which the Conservative party has been silent, there are even more policies in the treaty that the Labour party has actively advocated and that the Conservative party and the Government have actively opposed.

The Labour party has advocated a whole series of new competences for the Community on education, on health, on culture and on various other matters. Eleven months ago, in one of the debates in the House on the Community, the Foreign Secretary declared very clearly and firmly that the Government were against new Community competences. Yet such competences, proposed by the Labour party and opposed by the Conservative party, appear in the treaty and we welcome their presence in the treaty.

Again, the Labour party proposed qualified majority voting in a ministerial council on social and environmental matters. We proposed that some years ago and repeated our advocacy of it on many occasions. When addressing the Confederation of British Industry, the Foreign Secretary said that he opposed what he called significantly extended qualified majority voting. The Minister of State, the right hon. Member for Watford (Mr. Garel-Jones) is not here, but that is understandable in view of the many hours he put in during this long debate, although my hon. Friend the Member for Hamilton (Mr. Robertson), who is doubly or triply conscientious, is here.

The Minister of State, who is not here—we shall not complain about that—nevertheless told the Select Committee on Foreign Affairs that he was opposed specifically to qualified majority voting on the environment. That was the Government's policy. Yet not only does article 130s of the treaty provide for qualified majority voting on the environment, but the treaty contains no fewer than 61 references to qualified majority voting even though the Foreign Secretary said that he was against any significantly extended qualified majority voting". The Labour party has attached great importance to extended regional policies within the Community. The Conservative party opposed such policies, yet there they are, in article 63 of the treaty. The Labour party proposed a greater role for the European Parliament and the Government opposed greater powers for the European Parliament, yet enhanced powers for the Parliament are contained in the treaty.

One of the specific proposals that we made in order to bridge what has been referred to in Euro-jargon as the "democratic deficit" was a system of confirmation of the Commission by the European Parliament. Because the Government were opposed to extended powers for the Parliament, they were opposed to a parliamentary confirmation procedure for the Commission, yet in article 10 of title III, the treaty provides a process of confirmation for the Commission. The Government opposed it but it is there, and we strongly welcome its presence in the treaty.

The Labour party also proposed co-decision powers between the Parliament and the Council of Ministers. The Government opposed co-decision powers yet they are to be found in article 189b of the treaty. We in the Labour party strongly welcome their presence. We proposed a blocking power for the European Parliament. In his speech today, the Foreign Secretary implied somehow that the Government had readily supported the insertion of a blocking power at the Maastricht conference, but on 20 November last year, during the debate in the House before Maastricht, the Prime Minister insisted that any blocking power for the Parliament must cover a far narrower range than that set out in the present Presidency text."—[Official Report, 20 November 1991; Vol. 199, c. 279.] However, at Maastricht the Prime Minister agreed to the specific words that he had opposed and rejected in the House before Maastricht. The Bill asks the House to confirm a treaty that contains the very words that the Prime Minister rejected. The Prime Minister yesterday moved the Second Reading of a Bill that will bring into United Kingdom statute law words that he said he did not want in United Kingdom statute law. The Foreign Secretary seemed to imagine that that was one of the many successes that the Government had gained at Maastricht. Certainly the Labour party regards it as a success, because we wanted those words in the treaty. We are pleased to see them there, but the Government did not want them there.

Not only does the treaty contain provisions that the Labour party and the Conservative party have jointly advocated and not only does it contain provisions that the Labour party has advocated and the Conservative party has not, but it contains even more provisions that the Labour party has advocated and the Conservative party has actively opposed. In fact, the treaty can in some respects be said to contain more Labour party policy than Conservative party policy.

Mr. Richard Shepherd (Aldridge-Brownhills)

It is very interesting to hear that the Government have effected Labour party policy in so many matters and that the treaty is obviously the result of it having converted the Government. Why, then, is the right hon. Gentleman advising his party to vote against the Bill when the Government have clearly been so successful in accomplishing so many of the Labour party's objectives?

Mr. Kaufman

First, I am not advising my party to vote against the Bill. Secondly, I shall outline in some detail the reasons why, despite the fact that there are so many things in the treaty which I support and despite the fact that there are so many things in the treaty which I support and against which the Government for months set their face, I nevertheless cannot vote for Second Reading. I shall explain with, I hope, some clarity.

The Labour party especially welcomes the presence in the treaty of provision for Community decisions to be open to far greater scrutiny and accountability, for qualified majority voting on environmental and social issues, for specified inceased powers for the European Parliament—especially in exercising control over the Commission—for the strengthening of interparliamentary contacts, for stronger regional co-operation, for improved political rights of citizenship and for the development of European political and security co-operation.

If those matters covered the full extent of the Bill, I could cheerfully vote for Second Reading tonight. Indeed, I could vote for it a good deal more cheerfully than could the Prime Minister and the Foreign Secretary, both of whom have spent much of their time vainly attempting to keep out of the treaty provisions that are now contained in it and which will be incorporated in United Kingdom law when the Bill becomes an Act of Parliament.

However—I now respond directly to the intervention of the hon. Member for Aldridge-Brownhills (Mr. Shepherd) —the matters to which I referred do not cover the full extent of the Bill. There is also, for example, the presence in article J.4 of title V provision for what the treaty calls the eventual framing of a common defence policy, which might in time lead to a common defence. The Foreign Secretary did his best today to explain exactly what that meant, although neither he nor anyone else has responded to the trenchant and pertinent questions put to the Government by my hon. Friend the Member for Ilford, South (Mr. Gapes) who spoke in the debate on the Address and highlighted profound inconsistencies between the treaty and what the Government claim to be their interpretation of a common defence.

Let us consider for a moment what the Government have done. I make it clear—this will clarify our position in response to the hon. Member for Aldridge-Brown:hills— that we in the Labour party have firmly opposed a defence role for the Community, and we continue to oppose such a role. We believe that western defence should be left to the North Atlantic Treaty Organisation, and we thought that the Conservative party shared our view. After all, in June the Foreign Secretary insisted: Defence should not be embraced by the European Community."— [Official Report, 26 June 1991; Vol. 193, c. 1011.] I agreed with those words. However, today the Foreign Secretary has commended to the House a treaty which will bring about the eventual framing of a common defence policy, which might lead in time to common defence. That same Foreign Secretary now asks the House to vote for a Bill which provides for defence to be embraced by the European Community. The right hon. Gentleman and his party may feel able to vote for what they so recently opposed, but I cannot and will not vote for that. That is why I shall not vote in favour of Second Reading.

Mr. Tony Benn (Chesterfield)

I have been listening intently to my right hon. Friend's argument. His objection is to the Government's policy, not to the treaty. If a Labour Government were in power, it would be open to them to use the Bill to achieve everything they want: to opt into the social chapter and the single currency and 10 keep out of the defence arrangement. My right hon. Friend is therefore objecting to the Government's policy and not to the Bill. The logic of his argument is that he should invite his hon. Friends to vote for Second Reading.

Mr. Kaufman

My right hon. Friend has simply not been listening. Of course we are debating policy—any Bill is enveloped in policy—but this Bill represents the enactment of a treaty. That treaty includes many policies which are official Labour party policy. My right hon. Friend and one other hon. Friend on our national executive committee opposed that policy, but it was supported by the rest of that committee. Despite such opposition, the Labour party conference decided that that policy should be official party policy, and it did so without any vote being taken.

I am trying to explain why it is right that those many items of official Labour party policy, confirmed by the annual conference and the national executive committee and contained in the treaty should become the law of this country. I shall also explain that, because there are certain things in the treaty which I oppose and others that are not in the treaty, which should be included, I cannot vote for the Bill. My right hon. Friend is entitled to his egregious position on Labour party policy, but it is my job to expound the official policy of the party to whose parliamentary committee I am elected.

Mr. Hurd

I do not wish to intervene on fraternal strife, but I must point out that, if the right hon. Member for Manchester, Gorton (Mr. Kaufman) had had his way, there would have been no official Labour party policy on the treaty of Maastricht and no negotiation. Britain would not have been a member of the Community and we would have been watching these matters from the outside. This is the sixth official Labour party policy with which the right hon. Gentleman has been stalwartly associated.

Mr. Kaufman

If the right hon. Gentleman had had his way, part of the treaty—on which he has imposed a three-line Whip—would not have been brought before the House because he, the Prime Minister, the Minister of State and others have said over and over again that it is wrong, that they oppose it, that it should not appear, and that it is a disgrace. He is now saying that, because he has changed his mind in six months, it is wrong for others to change theirs in 10 years. That is a curious approach.

Mr. Roger Moate (Faversham)


Mr. Kaufman

I shall give way, but in view of your strictures, Madam Deputy Speaker, I shall then proceed.

Mr. Moate

If the only thing to which the right hon. Gentleman takes exception in the treaty is the reference to common defence, why is that not mentioned anywhere in the Opposition amendment?

Mr. Kaufman

If various friendly and constructive interventions had not delayed me, I should now be moving on to other items. If the hon. Gentleman will permit me, I will now proceed to name some which appear in our reasoned amendment.

The Bill opts the United Kingdom out of the third stage of the process to economic and monetary union. Yesterday, the Prime Minister boasted that, if Parliament so decides under clause 2 of the Bill, the United Kingdom could opt back into the third stage of EMU. Clause 2 is purely cosmetic because the Government could, if they wanted, introduce a further Bill next week to repeal that clause. It is not entrenched and there are no such entrenched clauses in British legislation.

At the same time, that cosmetic principle is quite pointless, because the House is being asked to vote for a treaty protocol, which, as the hon. Member for Faversham (Mr. Moate), who studies these matters, will know, is part of the treaty document. The protocol lays down irrevocably—that is the word—that the third stage of economic and monetary union, with the central bank and the single currency, will start on 1 January 1999.

Let us be clear about the treaty protocol, which is not just a decision of the other 11 members of the European Community. From tonight, it will be a decision of this House, and it will be embodied in an Act of the United Kingdom Parliament.

When the third stage of EMU begins in six and a half years from now, at the latest, the United Kingdom will either have to opt in, despite the brave words of the Prime Minister about the right not to go in, or the United Kingdom will have its financial policies decided by the other 11 members without our having any voice whatever in the key decisions, because of the consequences of the derogation protocol contained in the treaty. The only choice on the third stage of EMU that the Government have won for the United Kingdom is the chance to have no choice on the matter.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich)


Mr. Kaufman

I will certainly give way in a minute.

Today, the Foreign Secretary boasted of that as a remarkable achievement. He is right: it is a remarkable achievement.

Mrs. Dunwoody

I hope that this will be a constructive and friendly intervention. Has my right hon. Friend not made an absolutely clear-cut and definite case for Her Majesty's Official Opposition to vote against such a serious and far-reaching treaty?

Mr. Kaufman

I have to say with the greatest affection for my hon. Friend that the answer is no.

It is suggested that the process to the third stage is irrevocable and that the third stage will start at the very latest on 1 January 1999. The present 11 members of the Community, together with Switzerland and Sweden—powerful countries economically—which will be in the Community by then, will take part in that process. If anybody imagines that that third stage can come into operation irrevocably by 1 January 1999 and that the United Kingdom can then operate an independent policy on its own currency, that person, to use Mrs. Thatcher's words, is living in cloud cuckoo land.

There will be a third stage, which will affect the United Kingdom, and the Government say that they may use the opt-in power to opt into that third stage. Meanwhile, over these years the Government are opting our of fighting for the convergence measures that are essential for the third stage—policies to fight unemployment, policies for regional regeneration and for modernising our industrial structure.

Above all, I cannot vote for the Bill because, in the protocol on social policy, it enacts the United Kingdom exclusion from the social chapter of the Maastricht treaty. To hear the Prime Minister yesterday, one would have thought that the social chapter of the treaty was some bizarre eccentricity dreamed up in a hotbed of extremist left-wing thinking such as, for example, the research department of the Fabian Society.

Yesterday, the Prime Minister called the social chapter a triumph of ideology over common sense."—[Official Report, 20 May 1992; Vol. 208, c. 269.] He also said that it is "corporatism at its worst." That is not a very nice way for the Prime Minister to talk about the brainchild of his chum Chancellor Kohl. Also, it is not communautaire to talk in that way about a policy that is supported by all 11 of our Community partners.

What is it about the misguided and twisted thought processes of the other 11 in the Community, at whose heart the Government wish to be, that makes the Government attack them for indulging in a triumph of ideology over common sense and "corporatism at its worst"? If it is that for Britain, why is it not that for Germany, the Netherlands or Luxembourg or any of the other countries? I shall explain why. The other 11 take a far more balanced approach to the Community than do the Government.

Yesterday the Prime Minister described the single market as providing what he called "open and competitive markets". The other 11 recognise what the Government either fail to understand or deliberately reject, which is that open and competitive markets are tolerable only provided that employed people have full protection from what would otherwise be the unrestrained freedom of capital. What is more, such provisions are necessary not only for employed people but for capital as well.

That is why the other 11, especially the Germans, are so insistent on a maximum 48-hour working week. They have the good sense and self-interest to understand that inadequate protection at work for employed people undercuts and damages their employers as well. The other 11 have had the good sense to understand that a sweatshop economy is bad for employed people and for employers wishing to be safeguarded from unfair undercutting and competition. The Secretary of State for Employment has been having that explained to her thoroughly over the past few days.

Mr. Phil Gallie (Ayr)

Will the right hon. Gentleman give way?

Mr. Kaufman

I am sorry, but I will not give way at this stage. I am taking up time and others wish to speak.

That is why the other 11 realise that the single market must be a delicate and necessary balance between capital and those whom capital employs. The Government either fail to understand the need for such a balance or deliberately reject it. So the absence of the social chapter leaves a huge hole at the centre of the Bill, and I cannot vote for it.

The Government's attitude to the treaty shows the Conservative party's narrowness of imagination. The Bill is extremely narrow in scope, and no doubt instructions were given to parliamentary draftsmen to draw it up in a way that would curtail the scope of debate and amendment. Our advice is that there is wide scope for amendment and we shall table every amendment that we regard as necessary to turn the treaty into a document that we could support without reservation.

Yesterday, the Prime Minister spoke about the paramount nature of United Kingdom parliamentary sovereignty and instanced clause 2 as testament to the Government's commitment to parliamentary sovereignty. However, parliamentary sovereignty does not consist simply of the right to vote at the end of a debate; it also entails the right to debate without stringent and oppressive curtailment. Therefore, I notify the Government that if they seek to guillotine proceedings on the Bill, as they did on the Single European Act, we shall oppose such a guillotine and we hope that we shall be joined by all other Opposition parties, regardless of their attitude to the merits of the Bill.

We believe that the Government's approach to the Bill does not relate the treaty to the true nature of the European Community as it is certain to evolve. Even on the basis of the current membership of the Community, the Government do not link the treaty to the nature of the Community as it is now and as the treaty will carry it forward. The Community will have a social chapter regardless of the United Kingdom and it will have a single currency and central bank regardless of the United Kingdom. The United Kingdom needs to be part of those processes, not only for our sake but for the sake of the Community.

There has been a good deal of muttering and worse from the Tory party about the role of Germany—

Mr. Skinner

And from me.

Mr. Kaufman

In so far as the words of my hon. Friend the Member for Bolsover (Mr. Skinner) echo what is being said by the Tory party, I dissociate myself from them, just as I dissociate myself from what is being said in the Tory party. I think that I have a good deal more reason to be hostile to Germany than my hon. Friend has. Nevertheless, it is my belief that the Germans have played a valuable and constructive role within the Community and I am sure that they will continue to do so.

Apart from my hon. Friend the Member for Bolsover, the principal voice attacking the Germans has been Mrs. Thatcher, who has attacked the Germans and everything that they stand for. She seems to be conducting herself like one of those persons one sometimes encounters on a bus; someone who sits there with the seats around them left strategically empty and who, as the journey proceeds, indulges in violent and incoherent imprecations against fellow passengers. I am sure that we have all experienced such people. The Prime Minister is like one of the other passengers; sitting there stiff and embarrassed, desperately trying to pretend that the eccentric person making such a commotion is not really there and is certainly nothing to do with him.

As I have said, in general Germany has played a sober and sensible role in the Community and the best way to ensure that that continues is for the United Kingdom to play an active role commensurate with our political strength within the Community. If Germany is ever likely to be a danger, an active British role is the best way to minimise it. After all, that is what was in Jean Monnet's mind when he first envisaged the European Community. Germany becomes a danger only when the United Kingdom or others relegate themselves to a second tier of membership and allow Germany or others to make the running. That was shown when, in exchange for German assistance on the social chapter opt-out at the Maastricht summit in December, the Foreign Secretary caved in to German insistence on recognition of the Yugoslav republics. In my view, that decision has helped to bring disaster to Yugoslavia.

Germany, or any other European Community country, is liable to be a danger only when left to itself. A second-tier United Kingdom in Europe, which is what the Bill entrenches, cannot immunise us from errors made by the rest of the Community. It merely implicates us in such errors while depriving us of sufficient influence to limit or to rectify them. We shall take our own initiatives instead of reacting to the initiatives of others.

The Community is certain to expand. This week, Switzerland decided to apply for membership. By the 1996 review, which is provided for in title VII of the treaty, the European Community is certain to have at least 17 members. As the Foreign Secretary pointed out today, other applications are on the table. He named some which he said would be welcome in the European Community. I was surprised by the selectivity of those that he mentioned. Since the election, I have been bewildered as to why he has concentrated so much on the role of Turkey in the European Community and in NATO. Today, he singled out Turkey as a country that he would like to see join the Community.

Mr. Hurd


Mr. Kaufman

The right hon. Gentleman certainly said that. If he is now going to correct it, I will gladly give way.

Mr. Hurd

The right hon. Gentleman is wrong about what I said. I chose my words carefully. I said that what we needed—what Turkey needed—was a closer and stronger relationship with the Community than she has now.

Mr. Kaufman

The right hon. Gentleman said that—he can look back on his words—very much within the context of the widening of the Community and applications for membership. It seems perfectly clear from article F of title I—the article on fundamental human rights—that Turkey is ineligible for membership. A country which certainly is eligible, would be strengthened by membership and has applied for membership, is Cyprus. The Foreign Secretary mentioned it, but what he did not say—and what I have been waiting to hear him say since the debate on the address, if not before—is that the Government welcome Cyprus's application and will advocate during the United Kingdom presidency that it should be accepted by the Community. If the right hon. Gentleman wants to intervene to say that he will do that, I will gladly give way again.

As the Prime Minister pointed out yesterday, there is the clear prospect of a Community which includes former communist countries. We welcome that. It inevitably means a change in the nature of the Community, which we welcome. Yet the Government remain stuck in the time warp of seeking how to pick and choose between the processes of a Community of 12, which itself is evolving.

Worst of all, in a way, the Government do not seem to have any concept of the kind of Britain that the Community can help to bring about. Yesterday, the Prime Minister was right on one matter. As the Government pursue even more regressive economic and social policies at home, the Labour party sees the Community as a way in which some of our most vulnerable regions and citizens can be protected from the worst excesses of the Government.

In 1826, Canning said: I called the New World into existence, to redress the balance of the old. Labour unashamedly and unrepentantly believes that, in this further period of Tory government, the Community may help to redress their policies. As I see my constituents in Gorton suffering in their many thousands from grinding poverty of a kind not seen in many other Community countries, I shall certainly see whether there are ways in which the European Community can alleviate their predicament. As my constituents suffer from 25 per cent. unemployment, I certainly want to see whether the Community's regional and social funds can help some of them to find work. As I see the environment of my constituents under threat—for example, from the privatised water authority which is trying to take away the one bit of open countryside available to my constituents—I shall do all I can to call on the Community to protect their environment.

Looking much more widely, as I see countless millions starving in the developing world while the Government cut by half the meagre amount that they provide for overseas aid, I shall certainly welcome Community policies to aid the developing world. For its social provisions, its cohesion fund, its regional and environmental policies and its policies on the developing world, I welcome the increasing role of the European Community, as do tens of thousands of my constituents and millions of others in Britain.

The Maastricht treaty, as agreed by our 11 partners, sets out the framework for a wider, more outward-looking Europe with a social conscience. For that treaty, I could and would vote wholeheartedly, but the Bill offers only parts of that treaty. In voting for our amendment, the Labour party will vote for the real Maastricht treaty—for the kind of Europe that Britain really needs.

5.26 pm
Sir Edward Heath (Old Bexley and Sidcup)

Those who have been Members of previous Parliaments may think that I have already given an indication of my attitudes to the European Community, but perhaps they will forgive me if I say a few words about the proposals before the House and the vote.

I strongly support the agreement that was reached at Maastricht, and of course I strongly urge everybody to vote for the motion. The Prime Minister was positive—and quite rightly so. That should give a clear lead to hon. Members on how they should vote.

There is no doubt that Maastricht is a great leap forward. It does not contain everything that I would like, and I may say a word about that in a moment, but what is there is undoubtedly yet another great leap forward by the Community. The deputy at the Foreign Office said when making a speech in The Hague recently—The Hague seems to be a popular rendezvous for speeches—that some of the British do not like great leaps forward: my God, they do not.

I can recall two great leaps forward. The first was the proposal to build Maplin airport on the east coast, which would have given us a superb airport equal to the greatest in the world. We could have done away with all the troubles over London Heathrow and the neighbouring airports. All the plans were made, and what happened? The Labour Government took office in 1974 and Tony Crosland scrapped them. Since then, we have shuffled, shuffled and shuffled. The result is that, to the passenger, Heathrow is chaotic. We increase other little airports bit by bit, but still do not have an airport that is comparable—

Mr. David Wilshire (Spelthorne)

Will my right hon. Friend give way?

Sir Edward Heath

I am sorry, no—unless you own Heathrow, of course. [Laughter.]

Mr. Wilshire

Before my right hon. Friend gives Heathrow away to some place out in the English channel or wherever he wants to put it, will he give a little thought to the 50,000 people who work there and the large number of my constituents who depend on it to earn a living?

Mr. Heath

It is terribly important. They would work at the new airport and would have a fast train service into my hon. Friend's constituency and a major motorway if they wanted to travel by car. They would be infinitely better off.

The second great leap is the channel tunnel. We negotiated the channel tunnel in 1972, and in 1974 the Labour party swept it away. Now we have negotiated again, and the tunnel has actually joined up. But we have no fast link to go with it. For five years, the Government and others have been trying to reach a decision. They have been shuffling along, but they have been shuffling sideways and backwards, and they still have not reached decision about the fast link. I agree with the Minister of State, Foreign and Commonwealth Office that not every Briton likes a great leap forward—but that is what we have got, and we shall carry it through.

I find it sad that the right hon. Member for Manchester, Gorton (Mr. Kaufman) and the Labour party are unable to vote for the motion. As the right hon. Gentleman knows, I have never criticised the Labour party for changing its policy and I have welcomed the fact that its present leader has brought it into the European Community and acknowledged that this country is there to stay and will develop within it.

However, the Opposition amendments are not understood in the Parliaments of our fellow Community members. The word will go across Europe: "The Labour party has turned again. This time it has voted against Maastricht." [HON. MEMBERS: "No."] Oh, yes, that is what people will say. I know them so well. The Labour party could perfectly well have voted for the Bill and then tabled amendments to include the other aspects which it thinks should have been in the Bill, or to delete some of its provisions. That would have been a splendid thing to do, and it would have shown that the great majority of Members of the British Parliament strongly favoured Maastricht. The Labour party's decision is a matter of sadness to me.

However, the criticisms made by the permanent opponents of the Community give me great encouragement. When I hear the right hon. Member for Chesterfield (Mr. Benn) and my right hon. Friend the Member for Shropshire, North (Mr. Biffen) explain how the Community will develop and how terrifying it all is, I feel great confidence in the future. I could not be more delighted. I shall quite understand if those people abstain, or vote against the Bill, or whatever they want to do. But it is rather sad that, after more than 20 years, we are still having the argument about the treaty of Rome, and about whether we should have become a member of the Community.

Is it not terribly sad that we are hearing more talk about the referendum? The right hon. Member for Chesterfield calls for another referendum. He managed to bring about the previous referendum—by twisting the arm of his Prime Minister, who had given an undertaking never to have a referendum. But has the right hon. Gentleman ever accepted the result of that referendum? No, not for a minute. If we had another referendum, he would not accept that decision, either. Why does the right hon. Gentleman want to institute such alien institutions into our procedures? We have centuries of history here, and we do not want to disturb them with ideas gained from afar. There can be no question of a referendum about any of these items.

Mr. Benn

The right hon. Gentleman has the merit of consistency. In the 1970 election, he spoke of the full-hearted consent of the British Parliament and people —and without ever varying from that opinion, he has consistently denied the voters any right to a say in their own future.

Sir Edward Heath

If the right hon. Gentleman had ever been able to secure a majority of 112 in the House of Commons, he would not talk like that. That majority was obtained on an entirely free vote on the Conservative side, and 69 of his right hon. and hon. Friends went against their three-line Whip to support it. That is sufficient standing for this country's relationship with Europe under the treaty of Rome.

Now the right hon. Member for Chesterfield, and others, have a new approach. The world has changed; the Soviet Union has disintegrated; the whole situation is different. Now, apparently, all we need is a little co-operation here and there, and all will be well. "Let us have more co-operation," they say.

Co-operation was tried through the formation of the Council of Europe, which still exists as a forum for discussion—and is very useful. But it was because Europe found that it could not rebuild itself through co-operation that the founding fathers—Jean Monnet has been mentioned—introduced the proposals for the Community. Those proposals were made by the French and accepted by the Germans—full credit to them. Co-operation does not produce the answer; it is not sufficient. I shall say a word or two later about defence and foreign policy.

I am sorry to disappoint the right hon. Member for Chesterfield, but the Community is going from strength to strength. I hope that one day he will appreciate it.

I miss some things. I miss the social chapter, so I am not in total agreement with my colleagues in government on that matter. It would have been better both for ourselves and for the Community if we had accepted the social chapter and then pointed out the parts of it that we could not accept. Such a procedure is commonly used within the Community, and it is right. What I do not accept about the social chapter is its basis of having no arrangements for workers. I do not want this country to become the sweatshop of Europe. I did not say that before the election, and I accept full responsibility for not doing so.

Mr. Moate


Sir Edward Heath

My hon. Friend has captured the habit of another of my hon. Friends, the hon. Member for Wolverhampton, South-West (Mr. Budgen). They both have a limited vocabulary on rubbish.

Mr. Nicholas Budgen (Wolverhampton, South-West)


Sir Edward Heath

No, I am sorry, but both my hon. Friends must retain their rubbish.

I am glad that the new Secretary of State for Employment has taken the matter of working hours in hand. She recognises that the figures produced were entirely bogus and not justifiable by any employer. It is not rationally justifiable to say that it will cost an extra £5 billion if some people reduce their working hours and others do the work. I am glad that the new Secretary of State has recognised that problem at once, and has gone off to tackle it. I wish her every success. My comments apply to the other provisions affecting labour, too. I am sorry about what has happened, but I am sure that, with the new Secretary of State's assistance, we shall be able to solve the problem.

The Government's attitude to open boundaries within the Community also perturbs me. We agreed on boundaries when we signed the treaty of Rome in 1972. The agreement has been there all the time. Some of my hon. Friends seem never to have read the treaty—of course, they must have read it. We intended to open our frontiers to everyone.

Mr. Budgen


Sir Edward Heath

Let me finish my argument about open frontiers—I shall have more to say to my hon. Friend.

As has been said, other countries have other ways of dealing with open boundaries. Why is it so impossible for us to use other ways? It is extraordinary that, because of the unity of the United Kingdom and its former constituent part—now Eire—there are no controls between the two countries. Yet apparently we must have controls on the borders with the rest of the Community. No Minister has given a logical explanation for that.

How do we deal with people coming from Eire? Of course, there are people out of uniform who know perfectly well whom they want to identify, and they act accordingly. Why can we not do that in our relations with the other countries of the Community?

Mr. Budgen

Will my right hon. Friend give way?

Sir Edward Heath

No, I am sorry, but I want to finish.

It would be perfectly possible for us to operate such a system, exactly as the other countries do. Germany has got on top of its terrorists, and so have France and Italy. They did not choose other means. We have not got on top of our terrorists, and we have some open doors. That hardly seems logical. We could use other methods—

Mr. Budgen

Will my right hon. Friend give way?

Sir Edward Heath

No, I have not finished.

We could use those other methods, and deal with the problem satisfactorily. The courts may say, "You have got to do that." Of course there are vested interests. There are vested interests among the corps at the gates who carry out customs checks. They must be re-employed somewhere else, and the same applies to any of those now on check duties who cannot be absorbed.

Mr. William Cash (Stafford)

My right hon. Friend referred frequently to the contents of the European Communities Act 1972 and to the treaty of Rome. He will recall that his own White Paper contained a number of significant promises to the British people, such as the promises that there would not be a federation of provinces in Europe, that essential national sovereignty would be retained and that we should always be able to exercise a veto. That was set out expressing and explicitly in the White Paper. Is my right hon. Friend now telling us, on this important day and in this important debate for which we have not had a White Paper, that he repudiates what was said in the White Paper that he produced in 1971?

Sir Edward Heath

I certainly have regard to the 1971 White Paper. I believe that the social chapter is acceptable to us. If there are points on which we want to make reservations, we have a means by which to do so.

Mr. Budgen

I am grateful to my right hon. Friend for having said so frankly that he had always anticipated that our domestic system of immigration controls would not be possible after 1972. Did he tell the British people that before 1972? I am sure that he understands that those of us who are sceptical about all that has followed 1972 have a lurking suspicion. We have been told time after time after time that we have nothing to worry about, yet we then find that those who have led us into Europe have deceived us and have denied the House of Commons their true belief about the consequences of the steps that have been taken.

Sir Edward Heath

I forgive my hon. Friend his language, because I know how passionately he feels about these things. He has nothing to worry about now. Maastricht means that there is nothing to worry about, because there are other ways in which to deal with the problem. We may now move on and—[Laughter.]

We come to the question of foreign policy and defence. One phrase used by my right hon. Friend the Foreign Secretary slightly worried me. He said that we were "moving away" from what the Community is at present. I do not believe that we are moving away, and I do not believe that it is possible to move away. I will come to the answer in a moment.

In foreign policy, it is not only a question of meeting to discuss events and seeing whether we agree. What has proved to be so necessary and what is lacking everywhere in the United Nations, in the United States and in the Community—is any foresight or pre-planning for events that may occur. That was the case in the Gulf. The danger of President Saddam Hussein should have been foreseen, and we should have recognised that we had supplied him with all the weapons he needed. We should have recognised that there was a permanent feud between Saddam Hussein and Kuwait, and we should have ensured that the war was prevented.

Is there to be a special secretariat, which is purely European, to deal with foreign policy? We have not heard about it. It is said that nothing must be put under the Commission. Very well: there should then be an entirely separate organisation which could do the pre-planning, the analysis and everything else required on a joint basis.

The same applies to defence. I am sorry that the right hon. Member for Manchester, Gorton (Mr. Kaufman) said that defence was not part of the issue. He is labouring under a misapprehension when he says that a European arrangement could interfere with NATO. There is an American pillar in NATO, and we could have a European pillar in NATO. Of course there are vested interests. The hundreds of people we keep in Washington do not like the idea, but that must change, and it will change, because the Americans will withdraw many of their forces from Europe. That is understandable, and I do not complain. We must recognise that it will happen and prepare ourselves for it.

We must also recognise the dangers that still lie towards the east. That is why it is important to have a military element—a defence force—which is European. That has certain consequences. One consequence is that such a force must be organised in a European fashion. The Foreign Secretary says that, under Maastricht, there will be separate columns. It will not be possible to carry on with that, and that is why the fears expressed by the right hon. Member for Gorton give me such encouragement.

One cannot imagine organising any country in the world in which the economic and social section is under Parliament but a separate Foreign Office section is in another part and a separate defence section is in yet another part. No one would dream of doing that. Europe will move towards a position in which, because of the connections between all three sections, all three will be dealt with together. It may be said that the matter can be settled in 1996; I hope it is. We must face reality in all this.

I deal now with the expansion of the Community and with the central European countries. It has been said that we should stretch the Community from the Atlantic to the Pacific, with the inclusion of Russia. That is entirely unrealistic; it is fantasy. We hear about Europe stretching to the Urals. What will happen to the rest of the former Soviet Union east of the Urals where so much of its wealth lay—the gold, the minerals and the timber? No one has a suggestion to make. It is said that the expansion of the Community will be at the top of the agenda for the British presidency. We must be realistic. We cannot say that we like to have lots of friends, so we welcome them all.

I deal first with the European Free Trade Association countries. From the point of view of the economy, I have no doubt that Sweden, Finland, Austria and Switzerland can match the requirements. We should be careful about Switzerland. It has been a federal country for centuries, which is very dangerous. We must sit apart so that we do not get contaminated by federalism.

One essential point in terms of the new defence situation is that those countries cannot be neutral. If they become members of the Community, they must share the defence of the Community and the cost of that defence —[HON. MEMBERS: "The Irish Republic?"] I hope that the Government will accept that and will not merely say, "Come in, we do not mind what you do." I know about Eire. I believe that Eire will be prepared to join a European defence. It has always objected to being tied up in an American-dominated NATO defence.

I now come to the former Soviet countries. It worries me that they are being misled by the things being said. I give two figures. The standard of living of the former Soviet-controlled territories is 32.1 per cent. of the Community average. The figure for Russia is 29.6 per cent. How can those countries be welcomed in, and how can they live on equal terms with the rest of the Community? It is just not possible. What is their maximum possible rate of growth after being suppressed for 50 years under Soviet tyranny? Even if it averaged 4 per cent., like the growth in the Pacific countries, how many years would it take before those countries could match the Community? That is the reality of life; we must deal with that.

I worry intensely about misleading those people and about causing them to think that they can come in after a couple of years. Those countries can be associated with the Community and we can help them in every way possible. However, they do not have democracies. The President of Poland now says that he must have plenary powers so that he can deal with the Polish situation. How does that fit in with the democratic addition to the Community? We must be as helpful as possible, but at the same time as realistic as possible.

I have been absolutely disgusted by the bigoted, xenophobic, rabid statements made about Germany. I do not wish to enter into personalities, as the right hon. Member for Gorton did; I will make only a few general statements about what has been uttered. Those of us who fought through the second world war and across Germany and who helped in the rebuilding of Germany feel ashamed of what has been said. We gave the Germans their constitution—a federal system; it is called the Federal Republic of Germany—so why should we damn federalism? The recovery that the Germans have achieved is incredible, and their contribution to Europe has been immense. It continues today. They have taken complete responsibility for 18 million people in eastern Germany. They are rebuilding it; they have given it democracy—what more could we ask of them?

When the Hungarians opened their gates and the refugees came through, they went into Austria and Germany in their hundreds of thousands. The Germans accepted them and got jobs for them. We did nothing like that; we did not take these people or welcome them. I heard it muttered on the Government Front Bench that we won the cold war and won freedom for all these people. That is not entirely true, and in any case we did nothing to solve their problems for them.

What about the Germans' contribution to the former Soviet countries? We have achieved nothing of the sort. These are the hard facts of life. I do not understand how people can damn the Germans and suggest that we join forces with the Americans to stand against them. I hope that this House will have nothing to do with such sentiments.

The future is clear: the Maastricht treaty will be ratified, the Bill will be passed and we will spend many days discussing it. This has been a well-attended debate, which I understand continued until breakfast time I do not think that the Leader of the House can have read the report of the Select Committee on Sittings of the House recommending that we abandon all-night sittings. Perhaps during the Whitsun recess someone will give him a copy, so that, when we debate amendments to the Bill, we can observe the Committee's wishes.

I congratulate the Prime Minister and the Foreign Secretary on their achievements. Let us continue to be positive and thereby bring about the Community that we all want.

5.52 pm
Sir Russell Johnston (Inverness, Nairn and Lochaber)

It is a great pleasure to follow the Father of the House —[Interruption.]

Madam Deputy Speaker (Dame Janet Fookes)

Will Members who are leaving the Chamber do the hon. Gentleman who has the Floor the courtesy of leaving quietly?

Sir Russell Johnston

It is a great pleasure to follow the Father of the House, whose contribution to the European Community over so many years has been so special, and whose remarks this evening, apart from being sharp and often extremely amusing and direct, were also extremely wise. I hope that Ministers heard them clearly.

I must admit that, after dawn this morning, I had begun to find the call of Morpheus rather more seductive than even the most well-constructed arguments. Nevertheless, I have no hesitation in saying that this has been an excellent debate, with powerful differences forcefully and articulately set out—including some first-rate maiden speeches. I must also pay tribute to the Minister of State, Foreign and Commonwealth Office, who is looking rather pale and not entirely interesting, and to the hon. Member for Hamilton (Mr. Robertson), both of whom summed up in the morning sunshine with a lucidity and humour which, at that hour, I could not match.

My right hon. Friend the Member for Yeovil (Mr. Ashdown) set out our position yesterday and made it clear that, while we will support ratification of the Maastricht treaty and can see no justification in logic for voting against, for supporting reasoned amendments or for abstaining, we also believe that the treaty could and should have gone much further, and that because it did not, it failed the Community and its aspiring members in several ways.

The treaty accentuates the well-rehearsed democratic deficit and enhances the power of national Ministers—the Government welcome that—more than that of European parliamentarians. It advances qualified majority voting far too cautiously. Liberal Democrats want a wider but deeper Europe; not the spurious spectre of the single united states of Europe which Mrs. Thatcher advances, but a decentralised federal Europe of European states, with national sovereignty pooled in the European Council and Council of Ministers, and popular sovereignty pooled in the European Parliament.

Liberal Democrats are federalists, with a long and consistent position on this matter. By federalism, we mean what everyone else in Europe, apart from most United Kingdom Conservatives but including the other European Conservatives, means: a dispersal of government between different levels of democratic authority—supranational, national, sub-national—in which all levels are coordinated but none is subordinated. That is the view taken by the European Conservatives in the European Parliament who have joined a group committed to a federal Europe.

It is strange that we hear so much in this House about federalism meaning centralisation. That is the opposite of what it represents—as the Conservatives' wiser brethen in Strasbourg know. I do not say that British Conservatives are reactionary nationalists opposed to sharing power with foreigners, although some of them are. The problem is that they oppose sharing power with anyone at all. Federalism means devolution of powers and separation of powers. The Conservatives oppose federalism in Scotland and decentralisation in England and Wales. Naturally enough, therefore, they oppose it in Europe.

For many Conservatives, the British state is centralist and authoritarian and sufficient unto itself. Modern forms of democracy, which is what federalism is about, threaten that monopoly of power. Conservatives have long mistaken strong government for single-party government. They oppose electoral systems in which seats won, match votes cast. They oppose citizens' rights written down and asserted in constitutional law, much preferring archaic convention. They oppose democratic decisions in the European Council, preferring the craft of negative consensus—which they call the veto.

Conservatives oppose the widening of the competence of the European Community's jurisdiction, preferring the old-fashioned, diplomatic conventions. They dissemble over sovereignty and puff up their claims that the Westminster Parliament controls matters that it no longer controls. That is certainly true of macroeconomics.

Then they seek to bolster the so-called nation state. What is a nation state? Was Yugoslavia a nation state? It contained six or seven nationalities—Slovenes, Croats, Serbs, Macedonians. Here we have four—the Scots, Welsh, English and Irish. Mrs. Thatcher was very quick to call for recognition of Croatia and Slovenia, and she was right to do so. Incidentally, she agreed on that occasion with Germany. I brought a newspaper today which contains the headline "No substitute for the nation state", accompanied by a picture that launched a thousand vetoes.

There is no consistency in that, because Mrs. Thatcher, like many Conservatives, rejects any devolution within the United Kingdom when there are calls by clearly established majorities for self-government, which is, after all, well short of independence. The really important development is not, although many people talk about it, the revival of nationalism in central and eastern Europe —that is a reaction to the escape from communism—but the burgeoning of cross-border political co-operation. Tomorrow's Europe will be more concerned about whether individuals are Liberals, Socialists, Conservatives or Christian democrats than with whether they are German, Dutch, British or Scots.

Maastricht leaves the so-called common foreign and security policy and the entire dossier of judicial and interior affairs separate from the European Community. The Father of the House has already referred to this. Even though some pragmatic convergence between the Community and the political co-operation procedure is proposed, the union's external arm is left too weak for systematic and decisive action. Many controversial internal matters, such as immigration and asylum, which were mentioned in particular yesterday, are left outside the legal competence of the court of justice and the European Parliament.

The pooling of national sovereignty in both internal and external security matters requires us to call forth the European citizen elector. In place of the secret manipulation of national Ministers and civil servants, we want open government and democratic accountability. What is needed is nothing less than to turn the European Community into a parliamentary democracy. We must have ambitions, ideals and goals, and our ambition is to make the Government of the European Community an improvement on the existing old nation states.

I agree with the right hon. Member for Chesterfield (Mr. Benn)—I am sorry that he is not here—that, with this Bill as with other measures, we are talking about democracy. I would also contend that the Liberal Democrat concept of democracy is much more open, pluralist and decentralist than that of the political forces with which the right hon. Member for Chesterfield has been long associated and whose views he espouses.

We must introduce a uniform electoral procedure in time for the elections of June 1994. There could be no more dramatic way to redeem the United Kingdom's reputation and end its isolation than to enhance the representative capability of the European Parliament by ensuring that seats won are matched by votes cast. I believe that there is support for that reform on both sides of the House.

We must also take urgent action between now and 1994 to build up European Community citizenship in terms of social, cultural, civil and electoral rights, not least the implementation of article 8b of the treaty on the rights of European Community citizens to vote and stand in municipal and European elections. We have to allow people to identify with the communities in which they live. These duties and entitlements must be developed hand in hand with good information policies, with improved access by all to legal redress and with the full accomplishment of freedom of movement of people, to which the Father of the House referred, through the abolition of all internal border controls.

The immigration policy may have to be tough, but it must be based on a common legal base that is also explicitly anti-racist. We normally use the word "racist" in connection with attitudes to people who are black or a particular colour, but one can be racist about the Germans. I endorse every word spoken by the Father of the House on that subject.

At the end of this morning's debate, at about 7 o'clock, the hon. Member for Stamford and Spalding (Mr. Davies) made an extremely interesting speech on mobility within the European Community and external immigration controls. I urge the Minister to look at that speech. After all, the two basic principles of the Single European Act are the free movement of people and mobility of labour.

When Britain signed the Single European Act, she subscribed to these principles. I was exceedingly disappointed to see the Foreign Secretary, who has now left the Chamber, going to Brussels with what amounted to a Thatcherite series of demands, which boil down to an attempt by Britain to retain the full panoply of customs and immigration control.

The Government's justification for this was that it was necessary so as to regulate drugs, the illegal importation of weapons, terrorist activities and the spread of rabies. Rabies is certainly a separate case, and the movement of animals can be separately supervised. However, it is wrong for the Government to imply that drugs and terrorism are effectively controlled at main customs points. If this were the case, as the Father of the House so rightly said, we would not have open borders with Ireland. The control of drugs and terrorist activities depend on much more effective police and security co-operation within the European Community. The Government should be talking about going way beyond the limited co-operation that they established at Trevi.

Immigration control presents serious problems of definition and of common standards of implementation. However, it is in our interests to achieve this rather than to resist it, and the Germans, who have the problem of an enormous number of people flowing in every day, would be our strong allies.

Mr. John Butcher (Coventry, South-West)

Does the hon. Gentleman see any connection between the fact that southern Germany accepted most of these immigrants from eastern Europe and the fact that it is also the place where Die Republikaner, which is a Nazi organisation, has had the most growth and impact in electoral terms? Does he accept that there is a link between immigration in southern Germany and the rise in extremism there?

Sir Russell Johnston

Southern Germany has traditionally been more right-wing than northern Germany, but the hon. Gentleman has a point. If a large number of people flow in, putting pressure on housing and jobs, there will inevitably be a reaction on politics. I do not deny that.[Interruption.] I am not arguing with the hon. Gentleman, but I think that he is missing my point. I am simply saying that the European Community as a whole must sort out a common policy and it must operate, as the hon. Member for Stamford and Spalding said, external borders and ensure consistency of policy. It is much better to spend money on this than on controls within the Community, which will create costs for travellers and businesses.

There was some progress on foreign and security policy, but there was a bit of confusion. Yesterday, the Prime Minister said in reply to a question I put to him: would he"— that is, me— prefer our foreign policy to be determined by the majority vote of other countries? That is not a proposition to which I am prepared to agree on behalf of this country."—[O? cial Report, 20 May 1992; Vol. 208, c. 267.] However, the Maastrict treaty has a number of declarations at the back of it. For example, there is the Declaration on voting in the field of the common foreign and security policy". It reads: The Conference agrees that, with regard to Council decisions requiring unanimity, Member States will, to the extent possible, avoid preventing a unanimous decision where a qualified majority exists in favour of that decision. I should have thought that that and what the Prime Minister said yesterday were at variance. In foreign and security policy, there should be an end to the separation from the judicial and parliamentary processes of the European Community. In 1998, the treaty of Brussels will expire, and the Western European Union should be rolled up inside the EC. Likewise, on interior affairs, the protection of our civil liberty requires decisions to be taken inside the union.

Lastly, we must recognise the financial consequences of Maastricht. Practically nothing has been said about that. The cohesion fund is needed to complement existing structural funds, and both better financial control and better democratic accountability are required in the use of the funds. European monetary union is impossible without greater economic and social convergence. One might well suspect the Government's motives. Are they set already on rejecting the Delors 2 package? We are talking about 21 billion ecu over five years, which is 0.25 per cent. of Community gross domestic product. That is a relatively small percentage.

The burden on the United Kingdom would be eased if we moved from the regressive value added tax to the progressive GDP formula. We must support the Commission—I am sorry, but I must drink some water. Fortunately, I am finishing my speech. Finishing is not the same as finished.

Mr. Brian Sedgemore (Hackney, South and Shoreditch)

It would be dramatic if the hon. Gentleman were to faint.

Sir Russell Johnston

If I fell on the hon. Gentleman, I am sure that I would not be the first thing to fall on him.

All the reforms of which I speak require courage and flexibility. My colleagues and I believe in them and believe that they offer hope. We Liberal Democrats are firmly resolved to continue to work for a new Europe that will inspire its people. We believe such a Europe to be an aim that is fully possible and achievable.

6.11 pm
Sir Rhodes Boyson (Brent, North)

I am grateful to be called, Madam Deputy Speaker, in this interesting and important debate.

Before the Maastricht meeting, I was concerned about three issues and what would emerge following their consideration. First, I was concerned about whether there would be exemption from the social chapter. Secondly, I was concerned whether there would be a single currency to which the United Kingdom would be tied automatically, along with a single bank. Thirdly, I was concerned about where we were going with federalism. I thought that my right hon. Friend the Prime Minister negotiated splendidly on those issues, and that he carried the day. Those of us who are Euro-sceptics, as I am to an extent, owe my right hon. Friend a great tribute for his negotiating skills at Maastricht.

During a general election, there are difficulties when it comes to how one stands on Europe and the attitudes of the parties. The electorate vote on issues other than Europe. In the final week of the campaign, however, my right hon. Friend the Prime Minister said that he did not support a united states of Europe and that he was not a federalist. I believe that that statement was one of the reasons why the Conservative party won the general election.

My right hon. Friend demonstrated his ability to defend the constitution. He said that there would be no proportional representation. He made it clear that he would not have assemblies scattered around the United Kingdom, and nor would he have devolution. He said that there would be no federalism. Conservative Members are sitting on the Government Benches because my right hon. Friend made his position clear on those issues.

I am still concerned about some issues. For example, I am concerned about over-regulation, which seems to be a disease in Europe. It spreads like measles. Over-regulation will be resented by the British people, and it could make economies in Europe uncompetitive with those in the rest of the world. If that happens, the United Kingdom will suffer more than the other countries of Europe. That is because we export and import worldwide to a greater extent than any other country in the Community.

There are growing second-level economies within a free market in the Pacific basin and south-east Asia and we must compete with them. If we burden ourselves with regulations galore, we shall be unable to compete and over 20 years Europe could become a relatively depressed area.

I am still concerned about the social chapter. I am glad that it was cut out, as it were, in the Maastricht treaty, but I do not want it to come back to us in penny numbers. When it came to the number of hours that could be worked in a week, we won the book only to have certain chapters removed from it. The Government seem to be weakening on the 48 hours proposal.

Sir Teddy Taylor (Southend, East)

And on the parental leave directive.

Sir Rhodes Boyson

I do not want to become involved in footnotes and other minutiae. Much as I respect my hon. Friend, I want to confine myself to three or four general principles.

I trust that we are all firm on the basic individual factors that are set out in the social chapter.

I am still concerned about the exchange rate mechanism. I believe that our link with it has stopped us reducing interest rates to the level at which they should now rest. Our emergence from the recession is being delayed because of that. Japan and America seem to be picking up more quickly. Both have real interest rates only 40 per cent. of those which apply in the United Kingdom. We had to reduce the real interest rate, which is what I am talking about, to 2 per cent. to get out of the 1929–31 recession.

It seemed when I listened this morning to "Today" that some progress has been made with the GATT negotiations. However, the fact that we have to pay so much for our food reduces the United Kingdom's competitiveness and handicaps the third world. Trade as against aid is the way in which third-world countries can pick themselves up and become prosperous. We want them to have the ability to grow crops and to sell them here, not Oxfam collections and the rest.

Our financial services are the best in the world. When the GATT negotiations have come to an end, we must ensure that our financial services are allowed to blossom in every way.

Our bit-by-bit movement in Europe is rather like blind men engaging in a tug of war. We have six on one side and six on the other. The person in the middle is the umpire. We are pulled backwards and forwards and suddenly there is the cry, "It has gone—it is over." It seems that at Maastricht we won yet another tug of war. Well, overall we did not win and we did not lose, but there is the opportunity of a Europe with which I could go along.

Sir Teddy Taylor


Sir Rhodes Boyson

I could go along with it. I am not speaking for my hon. Friend, and I would not have the arrogance to do so. He speaks for himself as I speak for myself.

I have always been a referendum man on important issues and I am sorry that we are not having one on the treaty. About 10 or 12 years ago, I wrote a chapter in a paper recommending the use of referendums.

Mr. Tony Marlow: (Northampton, North)

My right hon. Friend can vote for an amendment.

Sir Rhodes Boyson

If there is an amendment on the issue and a Division is called, I shall be sorely tempted. My hon. Friend and I may find ourselves in the same Lobby.

I have made it clear where I stand on the issue that is before the House. I am against federalism, single monetary policy and the social chapter. My right hon. Friend the Prime Minister, with his superb negotiating skills, returned with a package that has caused me to decide—it has taken me several days to work this out—to vote with the Government this evening. I shall do so "on approval," rather as one sometimes buys stamps. That approval will not be confined to a week because I think that we have one or two years to decide these political matters.

My instinct tells me that the United Kingdom is much more sceptical about Europe than it was two or three years ago. It is moving that way. That pulls me in one direction. On the other hand, my right hon. Friend the Prime Minister achieved far more than I expected at Maastricht. Our presidency of the Community begins in July and I shall be fascinated by what happens then. Over the next year or two, I shall have again to make a judgment. I shall do so on each individual occasion, but I have made my judgment for tonight.

6.20 pm
Mr. Giles Radice (Durham, North)

I will not follow the explanations of the right hon. Member for Brent, North (Sir R. Boyson); perhaps I should give my explanation of what I intend to do tonight.

The right hon. Member for Old Bexley and Sidcup (Sir E. Heath) made an impressive speech. He has a real sense of perspective on these occasions. I salute him as one of the architects of the modern European Community, and certainly of Britain's entry into it.

We need to consider these European matters with some perspective. The Maastricht treaty is the culmination of an enormously creative surge of European co-operation and integration. The period that began in 1985 with an agreement on a Single European Act has seen progress in a number of areas—for example, the drive towards a single European market of 324 million people, a number that will be increased through the agreement with the EFTA countries.

There was adoption of the social charter in 1989 by 11 member states, although unfortunately not the United Kingdom. There is now the agreement of the same 11 to the social chapter in the treaty. New EC competences have been adopted in a number of areas, including the environment, transport, aspects of education, culture, public health, consumer protection and the development of co-operation.

There is the staged introduction of economic and monetary union, the development of common foreign and security policies, co-operation in justice and home affairs, and last but not least, new powers for the European Parliament. That is a considerable body of achievements over the past seven years.

There are hon. Members on both sides of the House who, like the right hon. Member for Brent, North, are Euro-sceptics, and they view all those developments as unwarranted interference by the centralising hand of Brussels, which they believe is against the best interests of this country. They are profoundly wrong. The moves towards greater integration have come about not because of pressure from Brussels or from Jacques Delors, whatever his diplomatic skills, but because the representatives of the nation states of the European Community, including the United Kingdom, voluntarily agreed not only to co-operate, but to pool sovereignty. That is what has happened.

The leaders of the nation states have agreed to that pooling of sovereignty because they think that it is in the best interests of their peoples. They all believe that a strong internal European market will create the background to a new economic advance, and that a single European currency will provide the necessary economic and monetary stability.

With the exception of the United Kingdom, those nation states, which include a number of right-of-centre Governments, believe that a framework of social rights will ensure that European employees share in economic prosperity. They also understand that effective environmental policy must be at least Europewide.

The national leaders of Europe rightly consider that the best way to maximise the influence of their particular countries is not by standing alone, but by creating a common foreign and security policy. They also understand that the democratic deficit cannot be repaired nationally. The only effective way to make European institutions more accountable is by increasing the powers of the European Parliament. In other words, the recent astonishing advance of the EC has been the response to the common needs of and the pressures from the peoples and nations of the EC—not the work, as is sometimes suggested by some Conservative and Labour Members, of power-crazed bureaucrats in Brussels.

In the 1990s, the EC will face new pressures and challenges, and the right hon. Member for Old Bexley and Sidcup mentioned some of those. Above all, those challenges and pressures will come from the collapse of the Soviet empire in central and eastern Europe and from the dissolution of the Soviet Union itself. The argument of the anti-integrationists—[Interruption.] Perhaps my hon. Friend the Member for Newham, North-East (Mr. Leighton) would be quiet for a moment; he might then acquire some wisdom.

Mr. Richard Shepherd

It is a measure of the speech.

Mr. Radice

I hope so.

The argument of the anti-integrationists is that reaching out to the peoples of central and eastern Europe will rule out further European integration. That was the argument made by my pair, the right hon. Member for Shropshire, North (Mr. Biffen). That view is profoundly mistaken. Czechoslovakia, Poland and Hungary all want to join the EC by the end of the century, and they are right to hope to do so. The reason that they want to join the EC is not because they believe that they are joining a very loose association of nation states but because the EC is economically, socially and institutionally coherent and dynamic.

Those countries also understand that, if the EC is not to collapse under its own weight, it will have to adapt its institutional framework to a membership that is likely to expand from the current 12 to at least 20 by the end of the century. We must consider the institutional arrangements, and we must have more majority voting. That is the reality. In short, deepening and widening will have to go hand in hand.

Yesterday, the Prime Minister for the first time attempted to set out—albeit in his usual prosaic fashion —a post-Thatcherite agenda for Europe, which was certainly a welcome development. Many hon. Members on both sides of the House will have noted the right hon. Gentleman's affirmation of what he called the core beliefs … of the Community: its commitment to democracy, its framework of law, the creation of a genuine single market and"— I noted his words carefully— the fact that the Community exists to promote the ever closer union of the peoples of Europe. That is a far cry from the nationalistic knee-jerk reaction that we heard so often from Mrs. Thatcher. Many of us appreciated the right hon. Gentleman's recognition of the key role of the EC in managing what he called the biggest transition to democracy in our continent in its entire history."—[O? cial Report, 20 May 1992; Vol. 208, c. 272–3.] Although many of us welcomed the right hon. Gentleman's new tone and his move away from the negative carping of Mrs. Thatcher, the problem that the Bill presents for the Opposition is that parts of it were designed specifically to appease the Thatcherites, and in particular the two opt-outs negotiated at Maastricht. The right to opt out of European monetary union was patently a device to buy Mrs. Thatcher's support and that of a number of Thatcherite Members.

I do not believe that that is necessary any longer. As my right hon. Friend the Leader of the Opposition rightly said yesterday in his excellent speech, the Government will have to decide on their attitude to EMU within the lifetime of this Parliament. The delay in committing ourselves to the principle of EMU creates unnecessary uncertainty—among investors, about the future of the City, and among our European partners.

On the other hand, commitment in principle would show that we were serious about EMU. It would lend credibility to our anti-inflationary strategy and it would strengthen our bargaining position not just on the siting of the Eurofed—we are in a weak position at the moment —but on the crucial question of the timing of the introduction of the third stage and the conditions that should be attached to it. If we could decide on the principle, we would be in a much more powerful position as a country.

The Prime Minister yesterday called the Labour party's objection to the opt-out from the social chapter "a triumph of ideology over common sense". In fact, his phrase accurately described the Government's attitude to the social chapter. As my right hon. Friend the Leader of the Opposition pointed out, the social chapter is about the improvement of the working environment and working conditions, information for and the consultation of individual employees, the equality of men and women and the integration of the long-term unemployed into the work force. So far from being a corporatist tract, as the Prime Minister and, apparently, the leader of the Liberal Democrats seem to believe, it is about improving individual rights. The Liberal Democrats should have a more careful look at what is contained in the social chapter. It might be good for them.

I have been a committed supporter of the EC for at least 30 years, but even so, because the Bill contains the two opt-outs, I cannot support it as it stands. I strongly back the reasoned amendment in the name of my right hon. and hon. Friends, and I shall vote for it tonight.

On the other hand, once the reasoned amendment is rejected, it would be wrong for the Labour party to vote against the Bill, and I am glad that it will not do so. The Bill is about much more than two opt-outs. It enacts a large part of the treaty agreed at Maastricht, including majority voting on environment, youth training and public health, the establishment of a cohesion fund, the strengthening of regional policy and the role of the regions, which has been mentioned by a number of my hon. Friends, the new European citizenship, the entrenchment of subsidiarity—

Mr. Spearing


Mr. Radice

Yes, indeed. However, I shall not get involved in hair-splitting with my hon. Friend, because I know that I would lose.

The Bill also enacts a useful increase in the powers of the European Parliament. Therefore, a vote against the Bill would be seen as a rejection not just of the two opt-outs but of the whole Maastricht treaty, and that would be wrong.

Sir Russell Johnston

Does that mean that, if the hon. Gentleman thought that the reasoned amendment would win, he would not vote for it?

Mr. Radice

No, it does not mean that. I would vote for the reasoned amendment because it is a sensible amendment. It is an amendment, not a vote in principle against the Bill.

A vote against the Bill would be seen as a rejection of the Maastricht treaty and as reversing Labour's hard-won position. I have been a pro-European for many years, and I have watched the Labour party change, so I know that that has taken some time.

If we voted against the Bill, it would cut off the Labour party from our sister parties in the Community, all of which are to vote for the Maastricht treaty. Whatever the provocation for us of the Prime Minister's opt-outs, our sister parties would not understand if the Labour party joined the followers of Le Pen in France, the Republicans in Germany and the Thatcherites in Britain in voting against Maastricht. Those who do so should be aware of the company they are keeping.

There is no salvation for Labour as an anti-European or even a reluctantly European party. We must continue to develop our strategy and our policies within a European framework. Labour's future, like that of Britain as a whole, lies in the European Community.

6.34 pm
Rev. Ian Paisley (Antrim, North)

I listened with great interest to the former Prime Minister, the right hon. Member for Old Bexley and Sidcup (Sir E. Heath), telling of the enthusiasm and freedom with which Members of the House gave a Second Reading to the European Communities Bill.

I was a Member of the House at that time. I have talked to Tory Members whose association chairmen were warned by telephone that there would be serious consequences if they did not vote for the Common Market. I was also present at a meeting when great pressure was put on certain Unionist Members of the House to ensure that they joined the Common Market lobby.

Feelings in the House at that time were as wild as I have ever witnessed, yet the former Prime Minister tells the nation that in that debate there was a wonderful freedom. I saw one Labour Member beating up another Member of the House with his Order Paper. It is wrong, in laughter and as a sort of sneer, for the former Prime Minister to bluff the nation and tell them that we were all willing to go down the Common Market road. I was never a Common Marketeer, and I never will be. My experience after 12 years in the European Parliament convinces me more and more of what Europe is really all about.

When we were going into Europe, the former Prime Minister's great sell was the veto: nothing could be done unless Britain agreed. That was the great hard sell. Many people thought that within Europe we would have the power of veto. We see today how much that power has been diminished. We will lose more and more as the Maastricht treaty comes into operation.

What amazes me is that some of the things that I have heard, especially from the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) today, are not up to date. A new leaflet has just been published telling us what is really about to happen. I attended the European Parliament last week and I was amazed to see huge posters on every pillar and in every nook and cranny of the Palace of Europe saying: European Parliament. Towards a new world partnership. The EC has lifted its eyes far above the nations of Europe; it is now going to take over the world. Jacques Delors is not thinking in simple European terms; he is thinking in terms of the whole wide world. I shall not weary the House with all the nonsense that is in the new leaflet, but one thing that it says is: It is the European Parliament's intention, on the basis of the Community's existing achievements in development co-operation, to initiate a process of fundamental change. So all that we have been talking about tonight is really in the past. The leaflet continues: Thus, through discussion, proposals can be formulated, in the mutual interest of all participants, that would enable Europe to achieve the objectives of its development policy. There will be a new world order.

In addition, the European Parliament intends to set up in association with the United Nations an appeal court representing the conscience of the peoples of the world. That is the great thinking. Some say that it is a dream. To me, it is more like a nightmare. Super-states and super-powers have always represented a menace to individual nations. The House ought to be aware of current European thinking.

We are being asked tonight to set out seal on the treaty. I willingly pay tribute to the Prime Minister for achieving some damage limitation at Maastricht, but when the treaty is implemented, his achievements will soon be whittled away. At the time of Maastricht, he wrote to me: I can assure you that there is no question of my accepting federalism, and I shall continue to negotiate robustly in the interests of the United Kingdom. I accept that. However, centralism and federalism is at the heart of the treaty. In a press interview, Jacques Delors commented that he wanted to tell our Prime Minister that the word "federal" does not matter. Call it by another name, and then it will be all right. He said: The Community is on course to a federal future. The President of the EC Commission made it perfectly clear what he hopes to achieve.

Some right hon. and hon. Members are critical of the United Kingdom's membership of the Community, but it has a good record. Although other members may boast of being good Europeans, they have not dealt with many vital Single European Act directives. Some that boast loudly and criticise our activities fall far short of being good member states themselves.

The United Kingdom's trouble is that it always keeps to the rules, whereas others do not. When a fishing quota was imposed on the south of Ireland, the southern Government turned a blind eye to it, allowed as many tonnes of fish to be pulled out of the Irish sea as possible, and flooded the market.

I asked the then Secretary of State for Northern Ireland, who happened to be a naval man, whether he could turn a blind eye to fish catches in Northern Ireland. He replied, "No, we keep to the rules. Every fishing boat that takes one fish more than its quota will be prosecuted." And that is what happened. European member states should keep to the European rules. No matter what may be the views of individual right hon. and hon. Members, we should not listen to those who would run down the United Kingdom's role in the Community.

To the south of that part of the United Kingdom in which I live there is the Irish Republic. It receives £3 million a day from Europe, and it will receive £6 million a day under the cohesion fund. Who is to pay for that support? We know perfectly well that Britain and Germany are the paymasters. We have only to look at the figures showing Britain's contribution.

We remember the former Prime Minister, Mrs. Thatcher, going to Europe to demand her money back. It was a good thing that she did get part of it back, because otherwise this country would be in an even more grave financial situation. The official EC budget figures published by the United Kingdom central secretariat show that, in 1990, we lost £2,475 million down the drain. Altogether, we have paid out £15,681 million.

We are financing the European set-up, but are criticised for not being good Europeans. There is an old saying that he who pays the piper calls the tune. It is time that this Parliament placed on record the fact that, as its money is involved, it should have some say in how it is used. I have only to consider how much per head my own country has paid into the Common Market to know—this is borne out by answers to parliamentary questions that I have tabled —that it does not get value for money.

What will happen after the treaty is signed? It will give Jacques Delors and those who share his vision even more impetus to push ahead. We may soon find that we have no control over matters over which we have some influence today, as we did when we entered the Common Market. The talk in Europe is that the European Parliament will be the centre of power, and that the other Parliaments of Europe will serve only as small administrative bodies that will have no say—[Laughter.] The hon. Member for Inverness, Nairn and Lochaber is laughing. I know that he has attempted to enter the European Parliament, and perhaps he will do so eventually. I notice that he lost his voice when he came to say something about the Commissioners. When the hon. Gentleman enters the European Parliament, he will learn at first hand what is really happening in Europe, and its attitude to the Parliaments of member states.

We all know that this Parliament has lost power, and that it will lose more. The present European leadership is dead set on introducing the federal concept, which will practically do away with our real decision-making powers. As to the European Court, it always finds in favour of an extension of the powers of the Community. All those matters should concern us when we cast our votes at the end of tonight's debate.

6.49 pm
Mr. Ron Leighton (Newham, North-East)

First, Mr. Deputy Speaker, let me say how pleased I am to see you in the Chair.

The question before us is not whether we are in or out of Europe, or whether we are part of it; of course we are. The question is what sort of Europe we are talking about, and what basis of co-operation will endure. The treaty has been described as a great leap, but I think that it was a great leap in the wrong direction. I know that the words "federal vocation" have been removed; but the people who put those words in the treaty still believe that they should be there, and are determined to get what they want. That is what the debate is about.

I do not think that "federalism" is a very good word. We use it as shorthand for a centralised super-state, but we are really talking more about a unitary state. I think that we use the word "federlism" rather loosely. Some people try to lull us into a sense of false security by telling us that federations push power down to the people and the regions; but what of economic policy? Earlier, I asked the Foreign Secretary whether, under economic and monetary union, there would be any subsidiarity in monetary policy, but he told me to wait for an answer from his right hon. Friend the Chancellor of the Exchequer. I look forward to hearing that answer.

What we know is that all the most important power—the bread-and-butter powers relating to taxing. spending and borrowing—are to be removed from us, and to be raised to Brussels level. The public do not want that: there are large majorities in this country against ceding more powers to Brussels, and large majorities against a single currency.

There seems to be what the psychiatrists call a role reversal in the House. The Conservatives tend to move in a crabwise direction, but they appear to be saying, "We do not want to give away too many powers; we want to decentralise." Labour, meanwhile, seems to be saying—at least from its Front Bench—"Give more powers, and do it more quickly." I am not sure how that came about, but I believe that we, as Members of Parliament, have no right or mandate to surrender the essentials of self-government.

We have no right or mandate to transfer the economic, political and legislative powers of the British people to EC institutions without the consent and agreement of the electorate. What we are really talking about is democracy. It is proposed that most of the important decisions—according to Jacques Delors, 80 per cent. of our economic and social policy—should be decided in the Community, by people whom we do not elect and cannot remove.

Of course, the treaties that we are discussing are not the end of the matter. There is another inter-governmental conference lined up for 1996, and that will mean another big pull on the ratchet. We know—Jacques Delors has said it in public—that the Commission wants a new executive. Delors wants to change the institutions; he wants a sort of putative Government. That is being kept on ice at present, because a referendum is to take place in Denmark on 2 June. What the Commission wants, however, is the centralising of power in the executive.

We know the destination of this train. We know the aim and intention: it is the creation of a super-state. The question is, do we want that? If we do not want it, it is about time we said so. We should get rid of all the "here and there" and all the ambiguity; our Parliament should be absolutely clear that that is not what it wants.

What I find most objectionable and worrying is the question of economic and monetary union. The treaty includes a timetable—a very short timetable and, in my view, a very unrealistic one. We know that the fashions of economic theory come and go. At Maastricht, however, the drafters took the tenets of a particular economic theory —Euro-monetarism—and entrenched those tenets by enshrining them in a treaty that is supposed to endure for all time.

I hear that someone has written a book called "The End of History". This seems to be the end of economics; certainly it is supposed to be the end of debate and discussion about economics. With what I consider breathtaking arrogance, people purport to have devised a blueprint for the future of the continent—or, at least, for half the continent—which is to be put into a monetary straitjacket with permanent deflation. We shall all suffer; there will be hard labour. The objective is to squeeze all of us into a single currency run by an unelected, unaccountable central bank.

I have no doubt that the Father of the House—the right hon. Member for Old Bexley and Sidcup (Mr. Heath), who spoke so eloquently—feels able to support the idea of a community run by bankers. What I do not understand is how those of us who are on the left—members of the Labour party—can support the idea that all our economic policy should be run by an unaccountable central bank.

When stage 1, the exchange rate mechanism, first came up, Labour considered it and laid down four conditions. None of those conditions was met, but—inexplicably— Labour nevertheless accepted and supported ERM entry. I do not wish to be over-rhetorical or to provoke hon. Members, but let me ask this: has anyone observed any benefits resulting from our joining the ERM? Unemployment has risen by 1 million; the economy has not grown, but has shrunk by 2.5 per cent.; investment in the economy is falling. Now we are going to move on: we are coming to the second and third stages.

What does the Labour party say about that? Before Maastricht, Labour issued a statement in the name of the national executive committee. That statement, issued on 29 November 1991, laid down the conditions for convergence that the NEC believed should apply. The treaty said that the objective of the bank was price stability; the criteria are entirely monetary, exactly like those of the Bundesbank. According to Labour, however, that was not enough. Labour said that there must be real convergence: it was necessary to deal with growth and employment.

I agreed with everything that the Labour party0 said in its statement. The point is that none of that is in the treaties. That being the case, I do not see how we can possibly do other than vote against the treaty. Let me quote a couple of sentences from the NEC document: Unfortunately, the Commission and the British Government have concentrated only on the need for nominal convergence, i.e. convergence in the rate of inflation and in interest rates. This is incomplete and unsatisfactory. If it is unsatisfactory, why should we not vote against it?

The document continues: As British experience demonstrates today, it is possible to attain some convergence in inflation and in interest rates between Britain and Germany, but only in circumstances in which the Germany economy is growing at 3.5 per cent. a year and the British economy is shrinking by 2.5 per cent. a year. This Tory policy of convergence by recession is totally unaccceptable. If it is totally unacceptable, will someone please tell me why we should not vote against it?

According to the document, without the conditions that it has laid down, convergence of inflation rates and interest rates can be attained only by recession. That is the Labour party's document, not mine, but I agree with it. If that is the case, I am minded to vote against the Bill; I do not want recession.

The document also says that we must have a strong regional policy on the scale and pattern of transfers involved in national monetary union. There is none of that in the treaty. How on earth can we abstain?

The clock will start ticking away in January 1994. Then we shall start to find out whether countries can join, initially by 1997. We shall have to abandon control of the Bank of England; that is part of it. I do not know how the Labour party will vote for such a development. Clem Attlee, in the post-war Labour Government—knowing what Montague Norman had done for economic policy —said that we would never have that again. We would not allow bankers to run our affairs; it would be nationalised and placed under democratic political control.

We shall be asked to vote for a Bill to end the nationalisation of the Bank of England. I do not know how we can do that. Clem Attlee must be turning in his grave. The central bank would issue the currency and control monetary policy. There would be one interest rate. There is no subsidiarity in monetary policy. There would be one short-term interest rate in Glasgow, Berlin, Lisbon and Naples. That is crazy. Where is the flexibility?

Germany's problem is inflation. Here it is recession. We need different interest rates. Even an 0-level or A-level economics student would surely know that. The central bank is to be even more independent than the Bundesbank. At least the Bundesbank has a Government breathing down its neck, as we saw with reunification. The central bank, though, will have no Government breathing down its neck and will be beyond any democratic control. The people who run the bank will be in situ for eight years —much longer than we are elected for. Nobody can remove them. They will have more power than the politicians.

I shall not run through all the criteria, but the one that upsets me is that the planned or actual central Government deficit—the public sector borrowing requirement—must be no nore than 3 per cent. of gross domestic product. Under a Conservative Government, what is the GDP percentage of our PSBR now? It is 4.5 per cent., and rising. It is nearly 5 per cent. If we were under that regime, we should have to cut our PSBR and the automatic stabilisers. We should prolong the recession and make everything worse in this country.

That is what monetarists propose, but I do not understand how the Labout party can support that proposition. There is nothing about growth in the criteria. As with the Queen's Speech, there is no mention of unemployment in the criteria. Unemployment does not seem to matter these days. It does not matter whether there are 1 million, 2 million, 3 million or 4 million people without jobs. They do not get a mention, either in the Queen's Speech or in the criteria. It would mark an historic break with everything that the Labour party has believed in—all the things that brought most of my hon. Friends and I and people such as Clem Attlee into the Labour party.

My hon. Friend the Member for Islington, South and Finsbury (Mr. Smith) agrees. I am a great fan of his. He writes articles for Tribune. Conservative Members probably do not read Tribune. I am sorry if they form an audience for a discussion within the Labour party, but in other European debates it is the other way round. We are having a democratic debate on these issues. My hon. Friend, in his article in Tribune, referred to the draft of the treaty and said: This quite simply isn't on. We must not allow the European Right to institutionalise monetarism in this way. Economic and monetary union should facilitate growth, not enshrine deflation. My hon. Friend is an Opposition Front-Bench spokesman. If he believes that, I should have thought that he ought to vote against the Bill.

My right hon. and learned Friend the Member for Monklands, East (Mr. Smith) made a speech in this House in November last year in which he said: The Labour party has argued consistently for the bank to operate in a stronger framework of political accountability than the present draft treaty proposes."—[0? cial Report, 21 November 1991; Vol. 199, c. 50.] If the treaty is wrong and is not what we want, why on earth are we not voting against it? We are abstaining. We are saying that we do not have a view, that we do not know, that we cannot make up our minds. What am I supposed to do? When I go back to my constituency and my constituents ask me what the Labour party thinks about this, what shall I say to them? I shall have to tell them that we do not know.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley)

I think that it ought to be made absolutely clear that what my hon. Friend has just said is not the case. The Opposition have tabled a reasoned amendment that deals with a number of the points that he raised. Therefore, my hon. Friend can go back to his constituents and say that that is what we believe in. That reasoned amendment was tabled by the Labour party after three discussions in the parliamentary Labour party, most of which he participated in.

Mr. Leighton

We must not talk about our private meetings. No vote was taken at those meetings. The majority of those who spoke agreed with my point of view. My hon. Friend is always helpful to me. He has given me some advice. If, therefore, I go back to my constituents and say, "We didn't agree with any of this, so we put down a reasoned amendment," they will ask me what happened to it. I should have to tell them that we lost it. Then they would ask, "What did you do then? Did you vote against the motion to which you put down the reasoned amendment?" I should then have to tell them, "We couldn't make up our minds." That is not good enough, is it?

When we say that we are being 200 per cent. communautaire and that the Conservatives are not ceding powers quickly enough, I do not think that that wins us any medals. It did not do so at the last election. That is not a good enough explanation for me to give to my constituents.

Most of the treaty is old hat. It is outdated; it is outmoded. It was drawn up before the Berlin wall came down and before the collapse of communism in the east. Those new democracies are struggling to find their feet. The Father of the House, the right hon. Member for Old Bexley and Sidcup, said openly and honestly—he is one of the few Members who has always been open and honest —that the treaty means that we should have to give up passport control at frontiers. He said that that was clear in 1972. He also said that Poland, Bulgaria, Russia, and Czechoslovakia could not become members of the Community. That is wrong.

We have a great historic opportunity to unite the whole of Europe, but we cannot do it on the basis of this treaty —on the basis of economic and monetary union, with these financial criteria. If the pound is going to be in difficulties under economic and monetary union, what would happen to the lev, the zloti or the rouble? We are raising new economic barriers when the political barriers are coming down. We are turning our back on central and eastern Europe, on Russia and the ex-Soviet countries. Why on earth are we doing that? What is the advantage? I do not understand it, I cannot vote for it, and I shall not do so tonight.

7.6 pm

Sir John Wheeler (Westminster, North)

In my brief speech I shall comment specifically on home affairs matters. I shall not follow the line of the hon. Member for Newham, North-East (Mr. Leighton). I shall support the Government in the Aye Lobby.

Co-operation at European level in the home affairs field, especially in the fight against serious crime and in the prevention of illegal immigration, is highly desirable. That is something that the Home Affairs Select Committee has looked at in a variety of contexts. I refer to its reports on practical police co-operation, hard drugs, policing football hooliganism, safety and security on the channel tunnel, and its aborted work on external frontier controls. These are but examples. I very much hope that when the Select Committees are re-established the Committee may think it appropriate to look again at the question of external frontier controls.

Co-operation does not, however, necessarily mean that the lowest common denominator has to be sought. A good illustration of that is the desirability of maintaining border checks at British ports and airports. Why sacrifice the advantages of being an island in the interests of a piece of Euro-dogma? I very much support the thoughtful and clear speech of my right hon. Friend the Member for Mole Valley (Mr. Baker).

The provisions on co-operation in the spheres of justice and home affairs in the Maastricht treaty are to be thoroughly welcomed. Some of their implications are explained in the Government's evidence, which is referred to on the Order Paper as relevant to today's debate.

The provisions give no new powers of initiative to the Commission on judicial co-operation in criminal matters, or policy co-operation in fighting international crime and terrorism. The European institutions—I refer specifically to the Commission, the European Parliament and the European Court—have new rights in some areas, particularly policy on asylum, frontiers, visas, drug addiction and fraud, but with the exception of visas, the rights of individual member states are fully safeguarded.

I believe that to be correct. The tasks performed by the Home Office and other agents of the system of justice are perhaps the most important manifestations of sovereignty, but I have several specific questions to ask. I appreciate that Ministers may not be able to answer them tonight, but I should appreciate a letter, in the near future, a copy of which could perhaps be sent to the Library.

When is Europol, as envisaged in article A9, likely to be established? How will the growing co-ordination between member states be monitored and the growth of ad hoc groups kept under control? How will reports be made to domestic Parliaments? Under article G of the title, it is envisaged that bilateral co-operation in matters relating to home affairs will continue—is that regarded as likely to be more or less important than Communitywide co-operation?

When are the common visa lists and the common visa format likely to be in place? Are any difficulties being encountered? Are all member states as competent as the United Kingdom in the control of the issue of visas? They are very important questions, and they represent the detail to which the House must be privy and which it must play a part in deciding. There are a number of important issues on which national Parliaments and national Governments should be responsible for making decisions, and I have mentioned some of them.

I welcome the establishment of Europol, provided that it is used as a clearing house for information and does not have operational powers because the best way forward is for the 12 existing member countries and any prospective new member countries to be better equipped to respond to organised or cross-border crime and for there to be better co-ordination but no central direction.

I especially welcome the fact that, when the United Kingdom assumes the presidency of the Commission in a few weeks' time, it will concentrate on four initiatives in respect of home affairs—improving information gathering on terrorist incidents, greater harmonisation of radio communications, increased fingerprint recognition, and developing information on cross-border crime.

On increased fingerprint recognition, we had better put our own house in order as each of the United Kingdom's 52 police forces are seeking automated fingerprint retrieval systems, some of which may not be compatible with each other. Before we consider Europe, we had better make certain that our arrangements are as effective as they should be.

I believe that those arrangements arise better within the work of the Trevi group, although we should not ignore the important contribution to be made within the European section of Interpol and we should continue to monitor the progress of the Schengen agreement. I am concerned that there are, in effect, three intelligence-gathering institutions in Europe—Trevi, Schengen and Interpol. At some point in the fairly near future, we shall have to decide which structure the United Kingdom police system is to regard as the lead organisation.

However, I assert the general principle that police forces and police systems work best together when they work directly together. In any event, the often sharp differences between the two United Kingdom legal systems and those of continental Europe make a general approach to judicial arrangements most unlikely for some time to come.

A further illustration of the importance of subsidiarity in the treaty is the need to maintain our 700-year-old legislation which helps to fight crime through the hallmarking of gold, silver and platinum articles. The system of hallmarking was introduced in 1300 in the reign of Edward I and is one of the oldest forms of consumer protection in existence. That could all change if the European Commission refuses to recognise the value of compulsory hallmarking because it maintains that all member states already protect consumers against false markings and therefore sees no need for an obligatory mark. I do not believe that the Commission has the evidence for such a contention, but our compulsory system of hallmarking has benefited the consumer. I assert that the assay offices fulfil a valuable function which should be allowed to continue.

I conclude on an important practical point about the currency, which will be of particular interest to my hon. Friend the Economic Secretary to the Treasury. As we know, it is for Parliament to decide whether the United Kingdom should opt to participate in a single European currency. Should that course be taken, however, it will be essential to consider in detail and well in advance the practicalities of changing to a new currency.

The experience of decimalisation in 1971 suggests that the changeover will take a long time to implement even once the decision to adopt a common currency has been made. I want the Government to confirm that the Queen's head would remain on the obverse of our coins and on the bank notes and that we would maintain our own designs on the reverse.

7.16 pm
Mr. Alex Salmond (Banff and Buchan)

I do not know whether "humbug" is a communautaire word, but there has certainly been a fair bit of it on display in the past 24 hours. The tone was set by the Prime Minister's introductory speech yesterday, when he claimed that the Maastricht agreement was an enormous success. I could have understood if he had been talking about success in terms of the Tory party's internal management—an attempt to persuade the more naive and gullible Tory Back Benchers that nothing much was happening and postponing the day of decision until after the general election. However, that was not what the Prime Minister was arguing—he was claiming it as a success for the rest of Europe. He argued that the failure to agree certain extended powers for the European Community represented a success for the whole of Europe, which was a quite remarkable argument.

From a European perspective, one can regard Maastricht as an achievement or as a disappointment—a report for the European Parliament regards it as a bit of both. One can regard it as either, but one cannot regard it as a success in the matters in which it was a failure. The Prime Minister should learn to separate what is regarded as an achievement to satiate the appetites of the little Englanders on his Back Benchers from what could be recognised as an achievement in the wider interests of the European Community.

Humbug is not restricted to the Tory party—we also heard a fair amount from the Labour party. I was fascinated by the speech of the right hon. Member for Manchester, Gorton (Mr. Kaufman), who cleverly argued that the social chapter was very important. He said that the Labour party had tabled a good amendment, which the SNP will be more than willing to support, but he went on to argue that, once the amendment had failed—as it almost certainly will—the Labour party's position would be to do nothing.

That is remarkable, because the right hon. Gentleman made a very good case for voting for the principle of the Bill but then went on to make a case for voting against the principal of the Bill. The one argument that he did not successfully make was that for abstention—

Mr. Foulkes


Mr. Salmond

No, I shall not give way, because I have only 10 minutes. The hon. Gentleman and his party have had more than enough time in the past 24 hours.

The negotiations are over, for better or for worse—I think for worse. If the amendment fails, we come to a vote on the principle. One can be either for it or against it, but one cannot sit on one's hands and claim that the matter can be resolved by abstention—even the Labour party has to have a view on this issue.

It is also a bad idea even in terms of internal party management. If the Labour party had decided to vote for or against the Bill, it would no doubt have split two ways. In fact, tonight in the Lobbies, it will split three ways. As a technique of internal party management that displays incompetence.

The sub plot of the debate is how much power will be transferred from this place to the European Parliament. The technique adopted by those on the Government Front Bench has been to pretend to their Back Benchers that not all that much is happening. That argument is not sustainable. So far, the anti-Europeans have carried the argument by demonstrating that the Maastricht agreement and the Bill transfer real powers from this place to the European Parliament.

If hon. Members are in favour of keeping the powers in this place, they should vote against the Bill. If, like me, they think that the removal of powers from this place is not a bad idea, they will be sympathetic to the Bill. I admit that I am attracted by the idea—I make no secret of it—of this place losing powers to the European Parliament, to European institutions and to the people of Scotland. I want to see the Parliament of Westminster squeezed between those two elements. I shall certainly vote for the Bill.

We should not accept the elaborate pretences that have been engaged in by those on the Government Front Bench to the effect that the Bill will change nothing much and that—this is even more fantastic—that the Prime Minister, single-handed, has transformed the direction of the European Community from the rather nasty "F" word "federalism", to the nicer "S" word "subsidiarity". Such pretences are insulting to the intelligence of Conservative Back Benchers—if, like military intelligence, that is not a contradiction in terms.

The anti-Europeans have made a reasonable case in some of their arguments. They are right to be cautious about the implications of economic and monetary union. The irrevocable linking of exchange rates will create major problems. Currencies will have to level out and converge to an extent that goes beyond the financial indicators in the Maastricht agreement. There will also have to be substantial fiscal transfers, which will, I suspect, go beyond the amount in the cohesion fund, also set out in the Maastricht agreement.

However, that problem will not be solved by the Government's opt-out clause. If, in 1997 or after, Europe decides that a single currency cannot be sustained, whatever is in the agreement, the Government's opt-out will become irrelevant. If Europe decides to move ahead and believes that the single currency can be sustained, the Government's position will become untenable, because sterling would have to be umbilically linked to the single currency used elsewhere in Europe. There is no doubt about that.

However, I find the idea that we should fly a flag for economic management, as carried out in the state of the United Kingdom, quite fantastic. In the 1980s, we had two recessions that were arguably created, and certainly made much worse, by the mismanagement of economic and monetary policy within the state of the United Kingdom. The right hon. Member for Chesterfield (Mr. Benn) actually argued that people will take to the streets to defend the right of the Chancellor, the Bank of England or the Treasury to continue to mismanage the United Kingdom economy. I could well see that people would take to the streets to demand the removal of those such as Chancellor Howe or Chancellor Lawson, but I do not see people rushing to the barricades to protect their powers.

The Government's argument is at its shabbiest on the social chapter. The Leader of the Opposition was correct to point out that the dragons that the Prime Minister seeks to slay in the social chapter do not exist. The social chapter is about health and safety, working conditions, providing information to workers and equality between men and women. The only employment that will be protected by the opt-out from the social chapter will be that of lawyers who will have to interpret which areas of social policy are in the treaty of Rome or covered by the Single European Act and which are excluded by the opt-out clause to the social chapter.

It is most insulting to argue that the only way in which the United Kingdom can prosper is for it to have the worst employment conditions in the whole of Europe. That would entrench a cycle of decline, of low productivity, low wages and low skills, instead of creating a virtuous cycle of high wages and high productivity in a highly skilled economy.

It is in the incredible application of the principle of subsidiarity that the Government's greatest hypocrisy is displayed. Subsidiarity has been seized upon as the great principle that makes the Maastricht agreement suddenly acceptable to the Conservative party. Just as the Conservative party believes that charity begins at home, so it believes that subsidiarity stops at home—or at least, in the Westminster Parliament.

The Prime Minister—with the full authority of the Conservative party which speaks for 25 per cent. of the people in Scotland compared with the Scottish National party, which now speaks for 22 per cent.—told me yesterday that my party's views had been rejected by the Scottish electorate. He fails to recognise that it is the Westminster Parliament which is held in disrepute in Scotland.

When we consider the Maastricht agreement from the Scottish perspective, we see that the Government have rejected the social policy through its opt-out clause, when Scotland would have wished to endorse the social chapter. The Government have opted out of the process of economic and monetary union, when Scotland would have wanted to engage in the argument for bringing the Eurofed to our capital city, Edinburgh, and to enter the debate on extending the cohesion fund. We now hear the extraordinary argument that subsidiarity means power for Westminster, but none for anywhere else.

It is time to stop Scotland being misgoverned and misrepresented in Europe. We need real government and real representation in the European Community. The Prime Minister suggests that up to 20 states could be members of the Community by the end of the century. The ancient nation of Scotland will be a full part of that process as an independent state.

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

Order. The hon. Member's time is up.

7.26 pm
Mr. John Butterfill (Bournemouth, West)

Many of my hon. Friends, and other hon. Members, may be enthusiastic about the European ideal, but they have become nervous about the steady accretion of power to the centre in the European Community. It seems to have become an inexorable process for the Commission to find ways to extend its competence, ways that we did not always imagine were possible when we approved treaties in the House.

A good example of that process is the 48-hour week currently being proposed. We thought that that would be subject to unanimity, but apparently it is to be dealt with under health and safety provisions. We thought that frontier controls were subject to the Luxembourg agreement and that member states would be able to retain them, but we are not told that supplements to treaties that were formally signed do not mean anything at all even though their preambles may mean everything. That is cause for considerable concern to hon. Members. If we are to sign another treaty, we need to be sure that we will not be subject to further accretions of power to the centre which we did not envisage at the time of signing.

The other issue of concern is our budget contributions. Again what we thought we had agreed is being attacked. The remedy to that problem is not for us to have to fight for the rebate that we gained under Mrs. Thatcher, but a thorough-going review of the whole system of budgetary contributions. It is absolutely crazy that only two countries—Britain and Germany—have been net contributors to the Community budget when the others, some of whom enjoy high standards of living, have been net recipients. The whole basis of budgetary contributions needs to be renegotiated.

It may be to Britain's advantage to makc common cause with Germany to ensure that the other wealthy countries of the Community make a fair contribution. It has been said that Germany wishes to dominate Europe, but there is no evidence of that. On the contrary, the thrust of German policy has been to subsume its national identity and to gain a European indentity. That is why Germany has been so eager to push us into ever greater union with our Community partners. It has been prepared to pay a heavy price for that in terms of its budgetary contributions.

I am reassured by the treaty because, for the first time, there are changes in the Community's view that everything needs to be centralised. For the first time, alternatives to increasing centralisation are built into the treaty. There are three principal alternatives. First, not all states are required to follow the same path. For example, we can agree or disagree about when or whether to join monetary union and we have decided that we will not be part of the social chapter. Whether hon. Members think that that is good or bad in itself, it must be good that not all members have to agree to everything and follow the centralising path.

Secondly, matters relating to European union do not have to be subject to the competence of the treaties, the Commission and the European Court of Justice. For example, Home Office policies, policies on policing, foreign affairs and defence are now subject to entirely separate agreements between the Governments of member states. That is an encouraging precedent.

Thirdly, there is the principle of subsidiarity under which the interests of member states are paramount. Only if matters cannot be satisfied by the member state are they passed up to the level of the Community. Again, that gives us grounds for optimism. I would prefer it if disputes on subsidiarity were not to be settled by the European Court of Justice. There should be some other body, perhaps a senate of the Parliaments of member states, that would settle such disputes. I believe that that would be more likely to uphold the rights of member states. However, that is for another treaty at another time.

If we are enthusiastic about the new approach, we need to demonstrate that it can be progressed efficaciously. On monetary union we must adopt a rigorous approach to reduce inflation, to improve the elimination of budget deficits and to converge the economies of the Community. However, the latter will become extremely difficult, and I doubt whether it will be possible to achieve it in the time scale suggested in the treaty.

We must take the initiative on cross-border policing, on co-operation between police forces, on hot pursuit and on the competence of courts. There must not be a haven for terrorists or criminals simply by crossing Community borders. On defence, we must act to promote the Western European Union as the European arm of NATO. On foreign affairs we must be much more active in securing joint action when we need to act in crises. Our initial behaviour in the Gulf crisis was poor.

In Yugoslavia, we have been tardy in responding to an enormous crisis. We have been slow in condemning Slobodan Milosevic for the appalling policies that he has pursued in Serbia and the aggression that he has pursued in the other states of the former Yugoslavia. As I am speaking, Sarajevo is under siege. It is defenceless and is being shelled by guns from the former Yugoslav army. We are doing nothing about it. When we are asked for assistance by the democratically elected president of Bosnia, we should provide it. If he needs arms to defend himself, he should get them.

We must ensure that the advances and the new approach being made in the treaty will be enshrined for the future. Only by having the flexibility that is inherent in the Maastricht treaty will we be able to accommodate the expansion of the Community that so many of us wish to see. If we are to take in different states with different traditions and problems, we cannot afford to be hidebound as we have been in the past. The new approach offers great encouragement to those states. Indeed, I believe that it is the reason why some states, such as Switzerland, that have held back in the past now feel able to put themselves forward as members. They see that there is now a flexibility that was not there before. It is entirely appropriate that that flexibility should exist when so many of the emerging democracies in eastern Europe urgently require our assistance.

7.35 pm
Mr. Doug Hoyle (Warrington, North)

I agree with all those who have spoken today that we are in Europe to stay. I part company with some, particularly the Father of the House and ex-Prime Minister and even some of my hon. Friends, because I see a different Europe from that which they often portray. I see a Europe of states which look after their own interests. I do not see the vast corporation that is sometimes described. I realise that we are in Europe to stay because in 1986 we went into the single European market.

We hear hypocrisy and cant from the ex-Prime Minister, the countess of Finchley, and an ex-Member of the House, Norman Tebbit. They now violently oppose what is happening in Europe, yet they voted for the single European market. The ex-Prime Minister called on the Whips to ensure that people went into the Lobby and also applied the guillotine to the debate.

Obviously, once the single European market is accepted, if we are to have the full benefits, a single European currency and central bank follow as night follows day. Yesterday, the Prime Minister tried to pretend that somehow we would not have to accept a single European currency. That is so far removed from reality as to be almost laughable.

The present Prime Minister and the ex-Prime Minister, the countess, took us into the exchange rate mechanism. They took us in at the wrong time, for the wrong reason and at the wrong level. The level is making British industry increasingly uncompetitive and needs at least a 20 per cent. realignment. We are not doing anything about that. The rest of our European partners are moving towards a European currency and a European bank. Once more, it will not be a matter of whether we join but of when we join. On the other precedents which must be taken into account, I am sure that the terms will be detrimental to the country.

I see the new Economic Secretary on the Treasury Bench. I congratulate him on his appointment. We know each other from debates on City affairs. I must tell him that because of the opt-out clause we have lost any chance of having the European central bank located in Britain.

The Labour party is right to say that there cannot be this convergence without other conditions being met. We outline those conditions in our amendment. There must be a balanced development so that we do not have one country which is far ahead of the others, as is the case with Germany now. We must all have a high level of growth and there must be a high level of employment and prosperity in the regions. Agreeing to convergence on any other terms would be a disaster.

To pretend that there will not be a common currency is to avoid reality. We already have a single European currency and a single European bank—the deutsch mark and the Bundesbank. We have little freedom of action. If the Germans decided to increase interest rates tomorrow, despite the fact that we are in a recession we would have to do the same.

I heard the Prime Minister talking yesterday about decentralisation. What a load of poppycock. My hon. Friend the Member for Warrington, South (Mr. Hall), whom I warmly welcome to the House, asked the Foreign Secretary whether elected members of local authorities would be allowed to sit on the committee that will be created by article 198 of the Maastricht treaty and whether there would be decentralisation. He did not get an answer. Members of the committee will be Government appointees. As we have seen with hospital trusts, they will be Tory foot soldiers rather than elected representatives. We can forget any talk of decentralisation.

I do not want impossible terms to prevent other countries from joining the Community. As a supporter of the European Free Trade Association, I look forward to the day when Sweden, Finland, Austria and Switzerland join the Community. They should set the pattern for other countries to join.

The one thing on which I agreed with the Father of the House—I was pleased to hear a Conservative say this—was the lack of the social chapter. He said that we shall become—indeed, I would say that we are—the sweatshop of Europe. There is no protection for labour, but complete freedom for capital to do as it likes. Nothing has been done for health and safety or for employment. We are still arguing about a 48-hour working week. What kind of country have we become under the Conservatives since 1979? It is certainly nothing to be proud of. We pretend that we cannot afford to implement the social chapter, but poorer nations in Europe are doing so. That is a disgrace.

My right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) spoke against the treaty in its present form. It appears to me that the only logical position for me to take—and many of my colleagues will join me—is to vote against the treaty. I certainly do not think that we can abstain. If we do not vote against the treaty, not only shall we never forgive ourselves: we shall not be forgiven by the people of this country.

7.44 pm
Sir Teddy Taylor (Southend, East)

It was appropriate that, before the debate, we heard a brilliant welcome from the Prime Minister and the Foreign Secretary for the fantastic progress that has been made today in reforming the common agricultural policy. We now have some of the details, although they have not been finalised yet. A dramatic cut has been made in the guaranteed price for cereals of £31 per tonne. A special subsidy for cereals of £32 per tonne has also been agreed. The result is that the extra cost to the CAP will be £3.28 billion, on top of the £28 billion that is already being spent.

I mention this to show that, in all EC affairs, some people have been daydreaming. If we consider agriculture, despite what has been said about stabilisers, quotas and set-aside, the danger is that, despite what the treaty says, some Members are being taken to the cleaners time after time. I accept that a few of us were taken in to some extent and were impressed by the great advances of Maastricht. I was taken in and, as a gesture, for the first time in 20 years did not vote against the Government on an EC issue.

Subsidiarity is mentioned in the treaty. Will it safeguard rights for people? Under the treaty, nothing is guaranteed. Subsidiarity will apply only where the EC does not already have priority and power. The international agreements apply only to new areas of policy. The social opt-out, about which the Labour party is making a great deal of fuss, is just ridiculous. Everything covered by the social chapter is already covered by the Single European Act and the Commission is shoving through the directives one by one under the majority voting system. Even if the opting out of currency and stage 3 were to happen and Britain were linked in the narrow band to a central European currency, the freedom that we would have is the same freedom that the Scots have with the Scottish pound note. There is no freedom from central economic bureaucratic planning.

I warn my hon. Friends not to be misled, as we have been so often, by assurances. We were assured during the passage of the Single European Act that our powers of immigration were secure. We are now being taken to the European Court, and after 1 January our powers will almost certainly fade away.

I hope that hon. Members will consider what the treaty does. Has it extended the powers of the Community? Mr. Michael White of The Guardian answered that question today. In a brilliant exercise, he identified 11 areas of policy where majority voting will apply—visas, youth training, trans-European networks, telecommunications, distortion of industrial competitiveness, health, education, cultural measures, third-world development, consumer protection and cohesion. Majority voting will apply to vast new areas.

I appeal to socialists who want to do something for people—and to Scottish Members in particular—to read article 107 and to ask themselves how they can tell their constituents that they are going to fight for socialist economic policies. The article mentions the European central bank and says that no such body shall seek or take instructions from Community institutions or bodies, from any government of a Member State or from any other body. The Community institutions and bodies and Members of Parliament and Governments undertake to respect this principle.

Members of Parliament, Governments and even Community institutions will therefore be powerless to act on the public sector borrowing requirement, interest rates and other instruments that some people would like to use to make the rights and duties of working people better and to improve society in some way. It will all be run by central bankers. Let us hope that they will be nice central bankers and that they will do the right things. I ask Labour Members, what if those bankers create massive unemployment and misery? What on earth can Members of Parliament do? What are we elected for? I ask Conservative Members the same question. We believe in things, but if we have a central bank and it creates socialist nonsense and mass unemployment, what could we as elected Members of Parliament do? In Britain, if a Government make a mess of things, at least we can do something about it. People can chuck the Government out, or warn them at a by-election. What will we be able to do when all economic policy is being run by a central bank staffed by people appointed for eight years?

I ask hon. Members to think about what we are doing. We are told to comfort ourselves by saying, "We oppose a federal Europe." But why do we oppose a federal Europe? It would be infinitely better than what we are creating under the Maastricht treaty. At least with a federal Europe some things would belong to us—to our Parliament and our people. Under Maastricht, as under previous arrangements, nothing belongs to us. Under the treaties, almost every political and economic activity can fall within the powers of the EC.

I appeal to the Government not to say that they are against a federal Europe, because a federal Europe would be infinitely better than what was created in Maastricht. If hon. Members read the treaty they will know that it creates a unitary state, in which every person in Britain—including the Queen, you, Mr. Deputy Speaker, and all of us—will be a citizen of a European union. Some people may laugh at that idea, and say, "What does it matter?" But when the rights, duties and obligations of citizens are determined by the Council of Ministers, it will matter a great deal.

The next factor is education. Like many other hon. Members, I have children at school. Under article 126, education will have to be changed to give it a European identity. Some hon. Members may laugh at that idea, but it is not so funny. I should like to think that our kids will be educated from a world perspective, thinking in terms of areas of the world such as the far east, and others. To say that everything, including—under article 128—culture, should be linked to a European identity, seems wrong in principle. Surely the content of education should be fixed by Governments, local authorities and parents, not determined by the EC.

I appeal to hon. Members to think of what is happening to our costs. We say that we are worried about money. We say that we spend too much money. Conservatives want to save money. Yet so many areas of activity are covered, including the cohesion fund—which will turn out to be another common agricultural policy. Even though we say that we might not join stage 3, we shall still have to pay for it. I am sure that the Foreign Secretary will be kind, as he always is, and confirm the facts. Although we are not signing up, and say that we shall not join, we shall still have to pay money. The cohesion fund will be a mighty fund. Billions of pounds will pour out, and, as usual, Britain will have to pay a substantial share.

I do not wish to take up too much of hon. Members' time, but I ask them to remember that when—because of the actions that we take now, time after time—democracy is dying, at some stage people will wake up and realise that our power to do anything is fading away. They will be terribly angry. We must ask ourselves, "What should we do?" I ask anyone who intends to vote for the treaty tonight what good they think it will do for Britain. Can they think of any aspect, any article, in the treaty which will make things better for Britain and its people, for its economy, for democracy or for anything else?

Sadly, what we see now is more and more centralisation, more majority voting and more expenditure on waste and extravagance. Even elections are being interfered with. Under article 107d there will be uniform arrangements for the European elections. On the environment, too, our powers are not great. Anything done to protect human health comes under EC arrangements.

At some stage we must ask ourselves, "Is this really the EC that we asked people to join?" At the time of the referendum, we said to people, "Don't worry—your powers will be okay; your Government are still in charge; democracy is okay; all that we are joining is a free-trade area." But what have we joined? We have joined a centralised unitary state, and at some stage we shall have to ask the people, "Do you want to go this way, or do you not?"

What we shall have to do—

Mr. Deputy Speaker


7.55 pm
Mr. George Howarth (Knowsley, North)

I intend to vote for the reasoned amendment and then to vote against the Bill. I shall do so with some difficulty, and have given the matter a great deal of thought—my decision required me to resign a Front-Bench position which I had held for several years. However, I must judge the action that I take tonight in the light of several factors. I have done so, and found that what I intend to do was the only honourable course of action open to me.

A few weeks ago, all Labour Members fought a general election on a specific policy, and I shall remind my hon. Friends, and any Conservative Members who are interested, what we said in the manifesto on which we fought that election: We shall play an active part in negotiations on Economic and Monetary Union. We shall fight for Britain's interests, working for Europe-wide policies to fight unemployment and to enhance regional and structural industrial policy. The elected finance ministers of the different countries must become the effective political counterpart to the central bank whose headquarters should be in Britain. I stand by that. I was happy to fight the general election on it.

There is a wide divergence between the provisions of the Bill and what we said in our manifesto. Before discussing that in more detail, I shall spend a few moments explaining the reasons why I shall go through the No Lobby tonight —perhaps by telling the House about some hon. Members with whom I do not share a common view.

First, I shall not be making common cause with those few hon. Members in the dark recesses of the Conservative party who will go through the No Lobby for scarcely concealed racist reasons. I shall not share a platform or a vote with them. My reasons will be completely different from theirs.

Secondly, although I hold my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) in great esteem, I shall not go all the way along his road. I listened carefully to his speech, and I must say that I enjoyed that speech rather more in 1975 than I did yesterday. Nor will I be going into the No Lobby for the same reasons as will my hon. Friend the Member for Bolsover (Mr. Skinner), who seems still to be fighting world war two—in his head, if not on the ground.

That leaves me in a somewhat isolated position—although I suspect that many of my hon. Friends may share some of my views. I arrive at my conclusion, having supported the paragraph from the Labour manifesto which I quoted earlier, because I cannot see anything for my constituents in the Bill as it stands, given that it omits the social chapter. That left me in severe difficulty.

I shall explain why I feel strongly on the subject. I shall not argue about which constituency is the most deprived —that is a futile argument—but I represent a constituency that still has not recovered from the recession caused by the Conservative Government of the 1980s. In my constituency there are generations who have grown up and have their own teenage children, yet who have never worked—they have never known the opportunity for a job. Without the social option or the social protocol, there is nothing in the Bill for those people.

Many people in my constituency live on benefits. Many elderly people live on the bare minimum of a pension topped up by income support. Without the social option, there is nothing in the Bill for them. My hon. Friend the Member for Liverpool, Broad Green (Mr. Kennedy) will understand when I say that many people in my constituency who are in employment nevertheless have low pay—and there is nothing in the Bill for them, either. On balance, in representing what I perceive to be the strong interests of my constituents, I cannot in all conscience abstain tonight, but must go through the Lobby against the Bill.

I will support the reasoned amendment because it is a good amendment. It reflects very much the style of argument and, in some respects, the points on which we fought the general election a few weeks ago. I am happy to support the amendment, but I cannot support the Bill.

The Government refuse to recognise the extent to which our position within the exchange rate mechanism is prolonging the recession. That also has profound effects on my constituents and on their prospects of obtaining employment or economic justice. I had fond hopes that my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), the shadow Chancellor, would be the Chancellor now and that he would be in the process of negotiating a realignment within the ERM. That was not to be. The Government have shown no eagerness or thought to move in that direction.

No economic justice looms. There is no path out of the recession for my constituents or for many millions of others. We know that 2.75 million people are registered in the official statistics as unemployed. In my own constituency and in the neighbouring constituency of Knowsley, South, more than 12,000 people are unemployed. The Bill offers them no hope.

With some sadness, but with the satisfaction that I am doing the right thing, I will not go along with my Whip tonight. I do not say that as one of life's natural rebels. I have been in the House for almost six years and I have not broken the Whip previously. Before that, I spent 14 years as a Labour member of a local authority and I cannot recall one occasion on which I broke a whip. For the important reasons I have described, I will go through the Lobby tonight with some of my right hon. and hon. Friends, although my reasons for doing so may be different from theirs. My reasons are certainly different from those of some Conservative Members. I will go through the Lobby for what I believe are very good reasons.

8.1 pm

Mr. Nick Hawkins (Blackpool, South)

I rise to make my maiden speech conscious of the very great honour it is for me to represent the constituency of Blackpool, South as only the third Member of Parliament for the constituency in 60 years. I start by paying tribute to my immediate predecessor, Sir Peter Blaker, who served with great distinction in the House for 28 years.

Sir Peter Blaker, as hon. Members of all parties are aware, had a distinguished war record. He served with great distinction as a Minister of State in the Foreign and Commonwealth Office and in the Ministry of Defence. Before his retirement at the general election, he served for some years as the distinguished chairman of the Conservative Back-Bench foreign affairs committee.

I owe a personal debt of gratitude to him for his enormous assistance in the 15 months before the election during which I was the prospective parliamentary candidate, and for his assistance during the general election campaign. While I was the prospective parliamentary candidate and during the election campaign, I became very much aware that he was held in deep and genuine affection throughout the constituency. I met many people whom he had helped, and others whose families he had helped and who had enormous admiration for his work for the constituency as its Member for Parliament.

Blackpool, South, which I have the honour to represent, is well known to hon. Members as part of a town that all hon. Members have visited for party conferences. Hon. Members may have a slightly artificial idea of what Blackpool is like if they have visited it only for party conferences. It is not only a host to all the party conferences, but a place with a substantial amount of manufacturing industry, as well as the tourism of which all hon. Members are aware.

The constituency has successful manufacturing industries involved in the production of children's toys and streeet furniture, and in many other areas—not only the manufacture of seaside rock. I hope that, in representing the constituency, I shall be regarded as a man with "Blackpool" stamped right through me like a piece of Blackpool rock. It was once said of Queen Mary that she wished to have "Calais" engraved on her heart. I hope that I shall be regarded as a man with "Blackpool" engraved on his heart.

I am especially glad to have the opportunity to speak in a debate on such a vital subject in that I have had great opportunity in my career before coming to the House to be involved in European issues. I have had the opportunity to work with European Commission officials in my position as a company lawyer. If I were not in the House today, I would have been attending a meeting of the European Company Lawyers Association, as I have had the honour to represent company lawyers who are members of the Bar as the chairman of the international committee of the Bar Association for Commerce, Finance and Industry for some years. I have sat on the international practice committee of the Bar Council for some years before I came to the House.

Although, like all new Members making their maiden speeches, I am conscious that it is a great mistake to pretend to any expertise, because we are all aware that there are many hon. Members who are more knowledgeable about any subject under the sun than a new Member can be, I point out to hon. Members of all parties that I have had some involvement in European matters. I know that European issues such as those being addressed in this debate are of great importance to my constituents. It is accurate to say that I have had more correspondence in a few weeks on European issues than on any other political subject.

From my involvement in European matters, I believe that I should say that I have great misgivings about the decision I will ultimately make tonight to support the Government and to support the Maastricht treaty. I regard myself as sceptical about the ambition of various Commission officials to move towards a more federal state and to subsume Britain's independence. I would not support that, but I have great faith in my right hon. Friends the Prime Minister and the Foreign Secretary and in what they negotiated at Maastricht. They have managed to get the best that was achievable and they have not sold the pass on Europe. They have maintained our sovereignty, and I have every confidence that they will continue to do so.

I very much supported my right hon. Friend the Foreign Secretary when he said that we must not have European Commission officials interfering in every nook and cranny of British life. I very much support the Government's decision to maintain our frontier controls, and I very much hope that they will continue to do so.

I would not support the Government tonight if I thought that there would be any surrender of British sovereignty. I do not believe that. I believe that the Maastricht treaty is the result of very successful negotiations, and I have every confidence in my right hon. Friend the Prime Minister continuing to maintain British sovereignty. I know that that is very important for my constituents and I have every confidence that the steps that have been taken to increase co-operation on matters such as law and order, which is a cause close to my heart as a lawyer, will be maintained in our future negotiations in Europe.

I am delighted that this country has such a marvellous opportunity to expand its operations in such areas as financial services, with which I have been deeply involved for many years. In financial services we enjoy great opportunities to expand our trade overseas, and I have every confidence that we will continue to do so.

I hope that I have observed the convention of steering away from issues of party controversy, but I promise Labour Members that this may be the last time that I do so.

I believe that one of the main reasons why the treaty deserves support, and why I will support it tonight, is to be found in the successful steps that the Prime Minister has taken to exclude the social chapter and to preserve the progress that the Government have made in cutting down the number of days lost through strikes, in bringing inflation down to German levels and in reducing interest rates.

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

I congratulate the hon. Member for Blackpool, South (Mr. Hawkins) on his first speech, which I found most impressive, not least because he spoke without notes—a prospect that I find daunting even though I have been here somewhat longer than he has. It is alarming to see so many new Members looking as though they ought to be still at school, let alone making maiden speeches without notes. It is all part of the syndrome whereby the policemen get ever younger and the steps ever steeper.

The hon. Gentleman follows a distinguished Member of this House who was greatly respected. I cannot wish him the length of service that Sir Peter Blaker enjoyed here, but I am sure that he will be a fitting replacement for him in the Conservative cause.

This is one of those debates in which one asks not how long it has been going on but how old one was when it started. It is difficult, if not impossible, therefore, to make an original contribution to it, and I feel a little uneasy because I am not going to make one. But since very few other hon. Members have made original contributions, I do not see why I should be feeling guilty.

In his opening speech, the Prime Minister boasted of how he had won the argument during the negotiations at Maastricht—a claim repeated by various Ministers and the Foreign Secretary. The Prime Minister was referring to the two protocols, one removing Britain's obligation to move to stage 3 of economic and monetary union and the second dropping the social chapter from the treaty and appending it as a protocol applying to all member states except the United Kingdom.

I do not see how that can be claimed as a success. I am a simple sort of person, but I had always thought that winning the argument meant persuading everyone else to agree and adopt the same course. That has not happened to me very often—but then it does not in the Labour party. The British Government are to be excluded, and no one else is going with us. That is a strange notion of success. We may have been excluded only temporarily, but we have been excluded nevertheless.

The first protocol deals with our right not to proceed to stage 3 and a common currency. Those who are very pro-Maastricht and those who oppose it strongly are mistaken in saying that we have a valid option to stay out when the other member states go for a single currency. That is not a practical option; it might exist on paper, but we are talking about realpolitik. The very idea is a sham, which the Government and the Prime Minister have dressed up in an attempt to convince their Back Berichers.

The Government are not short of gullible material on their Back Benches. Conservative Members keep jumping up and saying that they did not realise what Maastricht was all about or what the Single European Act was all about. What a gullible bunch they are. How on earth did they ever get elected? If the majority of states decide by 31 December 1996 to set a date for the commencement of stage 3, and the single currency becomes inevitable, we have no chance of opting out without beggaring ourselves.

Opting out of the social aspect of the treaty is a national disgrace. This country, alone among the 12, cannot go along with the social dimension. The Portuguese, Greeks and Spaniards can, but we cannot. The Prime Minister says that if we go along with it, our industry will be diminished, damaged or destroyed. I cannot believe that the Germans, of all people, would willingly agree to destroy their industry—no more would the French or the Italians. So how come one person says that it will happen in this country and 11 others say that it will not happen in theirs? Are they less patriotic, less concerned about their national economic welfare? What we have done displays a pathetic lack of vision on the part of the United Kingdom.

I heard the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) say that we shall be regarded as a sweatshop economy. That is what we already are, compared with some of our European competitors—we have low wages, long hours and lousy social provision in the workplace.

The Prime Minister said that he has restored the rights of employers and employees to work the hours they want to—but when have employers and employees ever agreed on what hours should be worked? Employers want as many hours out of their employees as they can get, for as low wages as possible. The Conservative Government are not serving the interests of the working people of this country or of our unemployed; in line with tradition, they are serving the interests of the bosses.

There are now two rival social chapters—one applying to 12 and the other applying to 11. Various directives are being blocked by the British Government under the one that applies to all 12. After 1 January 1993, the EC will move into the social protocol all the social dimensions that are being blocked by the British Government, who will not even be present to vote, veto or discuss. I am happy about that, because we are one of the great drag anchors hindering the improvement of social conditions in Europe. But employers and companies who have to operate across the whole Community would find it difficult to use one set of rules in this country and another set in other parts of the EC.

I listened with great respect to my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) and to my hon. Friends the Members for Newham, North-East (Mr. Leighton) and for Newham, South (Mr. Spearing). Strange to say, the very things that alarm them encourage me. My convictions were strengthened, if they needed to be, by some words of the former Prime Minister, Mrs. Thatcher: If the EC proceeds in the direction which the majority of member state Governments and the Commission seem to want, they will create a structure that brings insecurity, unemployment and national resentment. All that could easily be said of Mrs. Thatcher's record in government. She certainly created insecurity in my constituency and around the country, she caused unemployment in spades—and there were plenty of people who felt a great deal of resentment toward her. Nevertheless, I am encouraged by her words, because if she thinks that the EC is as bad as that, I think it must be bloody marvellous.

I am not worried about losing sovereignty. The day of the nation state in western Europe is finished, and I am pleased that that is so and that we are moving towards supranational organisations. Nationalism is a curse—we can see the effects of it in eastern Europe and we can now do something about it in western Europe. When the countries of eastern Europe have worked through their problems, they will be lining up to join the European Community, a Community which will stretch from the Atlantic to the Urals. This is our chance, for the first time in history, to redraw the map of Europe peacefully. That is a wonderful objective to go for.

My hon. Friend the Member for Knowsley, North (Mr. Howarth) made a courageous speech. However, he could let the Bill go through on Second Reading, because we could then amend it. Why not give ourselves the opportunity of trying to improve it? If we cannot do that, having set out the arguments, we can vote against Third Reading. Perhaps he should not deny himself that opportunity. On this occasion, I shall be going along with the Labour party. Sometimes I find myself defying the Whips, but today I see no reason for doing so.

8.20 pm
Mr. Michael Spicer (Worcestershire, South)

People have adduced four reasons for voting for the treaty. The first has just been set out by the hon. Member for Newham, North-West (Mr. Banks), who said that nationalism is dead and that nations are dying. The right hon. Member for Yeovil (Mr. Ashdown) made the same point yesterday—that nations are dead and that the treaty will kick them into their grave. The hon. Member for Newham, North-West said that nationalism was a curse.

There are two fallacies in that argument. First, nationalism is not all bad. The nation state has resulted in bad things from time to time—no one denies that. Nor does anyone deny that alliances and trade and getting together and maintaining close links with other countries is a good thing. However, it is foolish to argue that the nation state is intrinsically bad, particularly when one concedes, as one has to, that the nation state is the best entity for establishing democratic accountability, particularly this nation state. The sovereign rights and powers in our Parliament should not be easily and lightly thrown over in preference for some sort of Babel of nations getting together in a talking shop that does not hold the executive accountable.

The second reason for being suspicious of the idea that the nation state is dead is that it is not true. If anything, nationalism is stronger than ever before, and it is dangerous to base one's foreign policy on something that is factually wrong. There are different national interests. Germany, for instance, is a central continental power, with interests to the east and the west. France has certain distinct national interests that are anti-American and protectionist. Britain has strong national interests that are Atlantic as well as European and is, as a result, at the crossroads of much international trade. Heathrow is the busiest international airport and Gatwick the third busiest because we are placed at this crossroads of international trade. If we were to become subjugated within Europe, that would not be the case; we would be on the periphery.

The second argument used for voting for the Bill and the associated treaty is the opposite of the previous argument. People say that the Bill is not about federalism or nationalism, it is just a minor step along the road towards greater co-operation. By and large, that tends to be the Government's position. They feel that they were clever in getting the word "federalism" out of the treaty. That argument does not hold up either. For example, the move towards union citizenship must imply the creation of a new state. One must be a citizen of something, even if it is an embryonic state. The Bill is much more open-ended on this matter than people imagine. Some phrases allow for further development of that concept of union citizenship.

The second and fundamental point in judging whether this is a federalist measure is the central question of the establishment of a single currency. Inevitably, the single currency means, and the treaty provides for, a single, in this case, unelected and unelectable bank to manage the currency. It will have exclusive rights to print the money and the right to take over all foreign reserves.

Mr. Budgen

Will my hon. Friend give way?

Mr. Spicer

I cannot give way, because I have only five minutes in which to finish my speech. If I have time at the end, I will give way.

The single currency implies not just, as some have argued, the narrow concept of money printing. If one is to manage a currency, one has to manage not only the printing of currency, but the fiscal policy around it. Therefore, ultimately one has to manage the taxation and public spending policies associated with the single currency. Indeed, the treaty talks in these terms and provides for the embryonic institutions that will be given total and comprehensive control of all matters concerned with running a single currency. There can be no question but that a move towards a single currency is a move towards a federal united states of Europe.

The third reason people give for supporting the Bill is that it will not work. Their attitude is, "Don't worry—sign it; because it won't work." That is a very un-British thing to do. On the whole, we have been very respectable about that, and have signed treaties because we think that they will work. Therefore, it is logical, proper and moral for us to look at the black and white of the treaty. Furthermore, there are sound precedents for doing so. Only this week we faced the black and white of previous treaties that we have signed and the implications of them.

My right hon. Friend the Member for Mole Valley (Mr. Baker) made a telling point yesterday, when he raised the question of article 8a of the European Single Act, which deals with immigration. Unfortunately, we have already discovered that declarations do not count or are in some doubt, so we have to go to the text, and the text of this treaty is clear on a number of specific issues concerned with setting up institutions that will then have a pull and momentum of their own. There is no point in saying that we will sign the treaty because we think that it will not work, that the Danes will help us and that the French and the Germans do not like it. That is not the point. We shall sign something and, with the assistance of the European court, this black and white legal document will be implemented.

The fourth and final reason given for voting for the treaty is the British opt-out. I agree to this extent with the hon. Member for Newham, North-West. I can imagine, when we have set up the institutions and signed in principle to the treaty, the whips coming up to me and saying, "Look here, Spicer, you are talking about this opt-out as if it were a real option. Have you gone completely out of your mind? We have set up the institutions and everybody is joining them. The whole thing is in place. You are out of date. You have got to go along with us. You can't possibly, under these circumstances, start thinking the whole thing out again. We signed it all in 1992. Weren't you there?" The thing will be set in concrete by then.

What is the point of it all? What are the benefits? I can see certain costs in terms of the threat to our own peculiar —I say that in an admiring way—form of democracy, a form that is not, for example, shared in France. Compared to the British Parliament, the French Assembly does not count for a fig.

I can see certain threats, and to that extent I agree with the Opposition Front Bench. I can see certain security issues arising in future. I accept, of course, that the Western European Union is linked to NATO, but the Americans will not necessarily see things that way. I can see the foundations of NATO beginning to be threatened and ultimately to crumble as a result of the treaty.

I hope that the Opposition will join in some great march in favour of British security, British defence and NATO. We have seen an enormous change in the Opposition's position in this. An interesting point was made by the right hon. Member for Manchester, Gorton (Mr. Kaufman) when he told us where he stands.

Finally, there is the question of economics. We are at the centre of world trade, we are a high-seas trading nation and we gain by being at the centre. Will we start to move towards the periphery? If we do, there will be no gains. I say that the Bill is bad for Britain, and that it should be rejected.

8.31 pm
Mr. Brian Sedgemore (Hackney, South and Shoreditch)

When I woke up on the morning of 10 April to the full horror of the result of the general election, I felt like one of those demonic figures in Francis Bacon's paintings with tangled, sawn-off brains and see-through faces. I wanted to scream. Inwardly, I have been screaming ever since. All of a sudden, however, I feel better.

We are meeting in this historic debate to confess that we now accept that sovereignty is a myth, that national independence is an illusion and that a love of parliamentary democracy is the fashionable excuse of those who so long for yesterday that they cannot face tomorrow. Tonight, we begin to draw a veil over parliamentary democracy as we have know it since 1832; tomorrow, we begin to unveil a new democracy. Our powerful, over-arching and over-centralised system of government is about to give way to a devolved European pluralism.

Thank God, say I, that there are forces greater than this shrivelled Government and beyond this fatally flawed and divided island that will henceforth share in the control of our destiny. A nation such as ours, which has lost its soul and whose politics is as morally and intellectually bankrupt as the smile on the Minister's face, desperately needs tolerant, decent and civilising influences from Europe, inspired by social democratic ideas, to provide the prevailing ethos.

I have always believed that humility is a great virtue. The House is therefore to be congratulated tonight on recognising that what we have here in Parliament is a little theatre. It is a little palace of varieties. Anyone who thinks that I am being unfair should recall the Prime Minister's speech yesterday. I can paraphrase it in two sentences: "Under this treaty the gradual move towards federalism over the past 20 years has been reversed. We are now moving away from a federal goal as fast as we can." What nonsense. What the Prime Minister said was an abuse of language. The words in the treaty cannot possibly bear the meaning that he ascribed to them.

As the Prime Minister spoke, I was reminded of my days at university when we used to discuss the philosophical problem of the theory of the undistributed middle. The question was whether an object can be black all over and white all over at the same time. Yesterday, the Prime Minister answered the question. He said, "Yes, of course it can." I must tell the Prime Minister that, just as it would not be obvious to a member of the British public that something can be black all over and white all over at the same time, so it would not be obvious to a member of the public who read the treaty that it is a determined rejection of federalism. Indeed, giving its words their ordinary and natural meaning, a member of the public would most likely conclude that the treaty is a significant move towards federalism.

We have in Parliament a theatre in which everyone, including the principal actor, can say anything he likes in as boring a fashion as he likes, provided only that he does not tell the truth. Having listened to the debate, I have come to the conclusion that we, the British, have been brought up to believe that the English Channel, log and the inability of foreigners to understand our peculiar ways have cut off the continent from Britain.

As a nation, we bask in the unconscious realisation of our effortless superiority. Whether or not it is true that Jesus was born in Bethlehem—and we doubt it—we know that God is an Englishman, and that, had we not become a secular society He, God, would have gone to Maastricht on our behalf and pulled down the temples of Europe.

In Britain, we understand political theory so little that we easily confuse notions of sovereignty, identity and accountability. In our confusion, we fear the French, the Italians, the Greeks and, above all, the Germans. The recently dethroned Prime Minister, who in her lonely torment is learning that politics is a struggle to be remembered, is afraid of the Germans. She was at it again last week. She has allowed her prejudices to be ignited by Professor Norman Stone, a wayward, besotted and populist historian from Oxford university. He is best known in academic circles for presenting low-grade flights of political fantasy as facts.

Likewise, our current Prime Minister is scared to death of Germany's economic strength. He is so afraid of it that he tries to deny that it exists. It is not so long ago that he was telling us, in an effort to excuse his own enfeebled economic performance, that Germany was in a recession. Looking closely at the gross domestic product data, I conclude that only a hapless economic dunce or someone prone to Freudian wish-fulfilment dreams—the Prime Minister may fit both categories—could conclude that Germany is in a recession or has been in a recession.

So why does our Prime Minister want to talk down the German economy? It is time that he woke up to the fact that such is the scale and nature of our trade with our EC partners today that Britain's export performance now depends crucially on the existence of enterprising and successful economies throughout the EC. I am shocked that there are still Members, including the Prime Minister, who do not understand that, inside a developing Europe with a single currency, there can be no reason and no excuse for beggar-my-neighbour economic attitudes.

In a sense, that is the crunch and that is the problem —Britain's opt-out clause over the creation of a single currency that should provide the economic and political bedrock for stability and prosperity in Europe. Instead of putting distance between ourselves and the creation of a single currency, we should be seeking to produce new ideas on economic accountability and further political union to buttress the new currency.

Our Prime Minister justifies Britain's opt-out clauses on the creation of a single currency and on the social chapter by saying that we, the British, bring pragmatism to the discussions on Europe. I remind the cacophonous dissidents and discordant mavericks on the Opposition Benches who agree with him that pragmatism and hypocrisy go hand in hand and have formed the basis of Tory ideology for 100 years. In my view, Europe needs the dynamic of ideas rather than the pragmatism of the supermarket if it is to advance and provide a bulwark for freedom and civilised living.

Maastricht has barely touched on what is needed in the political sphere. On political union, the treaty represents very much a bits-and-pieces solution to the problem. It lacks a certain coherence. Having said that, Maastricht represents an exciting challenge for socialists in Europe through to the end of the century and beyond. It provides us with new ways of thinking and new ways of viewing the world and politics. Laissez-faire economic principles will be allied to the EC's natural interventionist social and political dynamic. The Bruges Group are not entirely brain-dead; they have sussed this out, and it terrifies them.

So the history of ideology, far from having ended, as we have been told recently, is about to be redefined in the context of a pluralist Europe. I think that is good. I would like to vote in the Aye Lobby tonight, but as one of life's natural cowards, I will do what the Opposition Whips tell me.

8.39 pm
Mr. Ivan Lawrence (Burton)

For those of us who believe that we should be in the European Community because it will be good for Britain but that we do not want to go down the road of a federal super-state, the question is whether Maastricht centralises us and leads us closer to the federal super-state or leads us further away from it.

That question is difficult to answer, so we look for guidance to those who really know about these matters. My right hon. Friend the Prime Minister has said that this treaty is a reversal of the trend towards centralist and federalist control—and I am a great admirer of my right hon. Friend. Our former Prime Minister, Margaret Thatcher, says that the treaty moves us towards central control and federalism—and I am a great admirer of Mrs. Thatcher. So I do not appear to have much guidance from those who should be guiding me.

When we add up all the indicators which show that we are moving closer to federal control, and balance them against the number which show that we are moving further away from central control, we are asking ourselves, what is the meaning of subsidiarity? What will that newly defined concept mean in terms of moving either closer to or further away from centralism? That is the item in the shop window which my right hon. Friend the Prime Minister displayed as the main indicator of moving further away.

According to article 3b: the Community shall take action…only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States and can…be better achieved by the Community. To begin with, that is a very vague concept. If it is thought that it means that any decision should be taken at the lowest possible level, that unfortunately makes me believe that the concept is not all that it is cracked up to be, and for a number of reasons.

First, it should mean—but it does not—that decisions which do not bear on or affect other member states should remain with the nation state or below. Community action will be allowed wherever such "objectives of the proposed action", such as a high level of social protection under article 2, would "be better achieved by the Community". Therefore, the concept of centralisation will apply even where something concerns only one member state if it conforms with the objects of the Maastricht treaty.

Secondly, as the concept is one of devolving powers downwards, inevitably it will be the Community which decides the residue decisions with which it does not wish to deal and which should be devolved downwards—the crumbs from the Community table. That may be challenged by the nation states in the European Court, but, as my right hon. Friend the Foreign Secretary conceded this afternoon, that court has usually reflected integrationist tendencies.

Thirdly, subsidiarity applies only to those areas which "do not fall within the Community's exclusive competence", so it cannot apply to vast areas of law, such as all internal market measures and probably most of the existing social provisions which apply to the workplace. In other words, it has a most limited scope.

Fourthly, although subsidiarity was not defined in the Single European Act, it was certainly understood to be a principle which applied. When the Foreign Affairs Select Committee went around Europe asking how that Act was likely to work, we were told that subsidiarity applied. We kept asking people what it meant, but nobody could tell us.

Sunday trading, for example, is something that one would think was a national matter with the subsidiarity rule applying, yet the Commission has found reason to claim that matter to itself. It says that Sunday Trading will have an effect on the importation of goods. Another example is the social charter, which we are told is a matter for European Community control because of its potential effects on the competitiveness of business. Therefore, although one might think that hours of work would be a matter for internal national control, they will be dealt with by the Community if it can get the subsidiarity principle interpreted in that way.

Fifthly, subsidiarity will not stand in the way of the Community if the institutions want to claim power—as they will. We need only look at the institutions. There are 17 Commissioners, each with a vested interest in making his or her portfolio as important as possible. They are underpinned by civil servants, who are well-known empire builders. That is the institution which will be claiming the subsidiarity principle in its favour.

There is the European Parliament, which no one could deny is power-hungry. There is the European Court of 13 judges who will interpret the rule. They would not be there unless they shared the European ideal and believed themselves to be an integral part of the process of European unity. As my right hon. Friend conceded, they have unashamedly acted as architects of European integration.

Subsidiarity is too vague, and it will be worthless as a protection against expansion to the centre. Subsidiarity may be even worse than worthless because if people of the intellect of my right hon. Friends the Prime Minister and the Foreign Secretary believe that it will be some protection when in fact it will not, that illusion may lead to a great deal more movement to the centre than they would like to see.

I regret that I have to conclude that the omens for retaining national control of vital areas do not look good. If subsidiarity is all that we have to distinguish between the balance struck between those matters which obviously move away from the centre and those which obviously move towards it, subsidiarity does not look strong enough.

My right hon. Friend the Prime Minister said: This decision is too important to be an act of faith—it must also be an act of judgment, and that judgment cannot sensibly yet be made."—[Official Report, 20 May 1992; Vol. 208, c. 265.] Of course, he was talking about the single currency, but it would apply equally to the whole question of subsidiarity and a drift towards central control.

All those matters disturbed me greatly, and I spent yesterday and today worrying about how I should vote tonight. In fact, I have come down in favour of supporting the Government. I am not someone who slavishly supports the Government—if I did, I might have been more fortunate in finding favour with my Front Bench. The fact is, however, that we cannot think of a practical alternative to being in the European Community for the good of Britain at the present time. That is the bottom line. We have to be there for as long as we possibly can for the good of our constituents, our workers and our industries, and to achieve the benefits of peace and security which being part of the EC brings us.

It would have to be a very strong reason indeed to make us take a step which might lead to our having to pull out of the Community. I do not think that the Maastricht treaty is as strong a reason as that. It is not all it is cracked up to be, but I do not think that it should destroy our place in the European Community and our ability to stay there. I believe I owe it to my constituents to support remaining in the Community.

However, I say to my right hon. Friends that I voted for the Single European Act having gone through the same process as I am going through now, and I reached roughly the same conclusion. I have already been told, "Why worry about Maastricht—you sold the pass with the Single European Act." I do not want anybody from my Front Bench or any Whip coming to me in 1996, when I come to consider whether there should be a single currency, a central bank and central control—

Mr. Deputy Speaker (Mr. Michael Morris)


Mr. Lawrence

If I may just finish—

Mr. Deputy Speaker


Mr. Lawrence

I do not want—

Mr. Deputy Speaker

Order. The hon. and learned Gentleman has had his 10 minutes and other hon. Members wish to speak.

8.49 pm
Dr. Jeremy Bray (Motherwell, South)

The treaty of Maastricht and convergence towards economic and monetary union set a steep and challenging path. The Government face a problem. Should they spell out the difficulties and dangers on the path that they have set and the greater difficulties of alternatives, or should they rest thankfully on the majority cross-party consensus that the goal of EMU offers the best path forward? Whatever the Government decide, it is the duty of hon. Members who see the dangers to spell them out clearly. That hon. Members on both sides of the House are doing.

I do see the dangers, but I do not see a way out of them in seeking a realignment, abandoning economic and monetary union or weakening the exchange rate mechanism. So I cannot go along with my hon. Friend the Member for Dagenham (Mr. Gould) and my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore), still less the Euro-sceptics on the Conservative Benches.

There are undoubted advantages to industry, trade and jobs, in exchange rate stability with our principal trading partners and further advantages in interest rates which do not carry a heavy risk premium covering the expectation of a future devaluation.

If British goods can be made more competitive by reducing their price, fine, but devaluation will not achieve that for a long enough period to affect the balance of payments and jobs. Our price and wage determination practices will inflate away the benefit of lower export prices as people try to cope with higher prices of imports and so of goods in the shops. In addition, adjusting the exchange rates has the effect of extending the period which it would take to re-establish belief in the maintenance of the exchange rate, with higher interest rates in the meanwhile.

Certainly these are matters of judgment. Certainly hon. Members, especially Chancellors, must make those judgments. Perhaps price and wage determination practices will change. Perhaps a new national consensus will be reached on an efficient and fair distribution of income and wealth which will remove inflationary tendencies with the nation no longer trying to get a quart out of a pint pot. Certainly we should never give up striving to educate people in the facts, if not of life, at least of our economic circumstances.

I have long believed that it is sensible to look at the record of our success—to examine the evidence. First, there is the industrial evidence. Let me give an example. We are currently trying to increase the United Kingdom share of the European steel market by attracting a new generation new technology steel plant to Hunterston in Scotland to replace the great integrated steel works that my constituency is losing.

The possibility of our success in attracting new industry would disappear if we could not rely on maintaining a large cost advantage not only over British Steel but over Germany. The same would be true of much of the new manufacturing capacity which we must create in this country with today's integration of industrial markets.

Such argument about particular industrial projects may be dismissed as anecdotal, so I have tried to look at the wider economic evidence. Somewhat eccentrically for a Member of Parliament, I have not only run the Treasury model, but joined the London Business School, the National Institute of Economic and Social Research and Oxford Economic Forecasting—the leading modelling and forecasting teams which publish the detail of their work. We published the results shortly before the election as a Warwick university discussion paper. It remains the only systematic comparative examination of the medium-term prospects.

All the forecasts imply persistent current account deficits into the medium term of between 1.5 and 2 per cent. of GDP. Moreover, those deficits arise despite the fact that, in the light of recent increases in exports, all the forecasts increase exports above the levels reflecting world trade and United Kingdom price competitiveness. Those adjustments are, in effect, an assumption of continuing improvement in non-price or technological competitiveness, reflecting the recent improved performance of United Kingdom exports. That has stabilised and slightly increased the share of United Kingdom exports on world trade after three decades of steady decline.

The main implications for policy are that the projections for the current account, even on those optimistic assumptions, are based on some fairly fragile extrapolations. The downside risks for the current balance to the exchange rate during the transition to EMU could be considerable. The longer the delay in recognising the problem of the deficit, the greater the risk that subsequent policy tightening may be so severe as to create another recession in the mid-1990s such as we have been plunged into since 1987.

If the problem is recognised early enough, stronger supply side measures could be taken to improve non-price or technological competitiveness. Although those policies take time to work and are neither costless nor risk-free, they do not have the disadvantage of restrictive demand policies which reduce growth and increase unemployment.

My own estimate from the Treasury model is that we need to increase exports of manufactures by 2 per cent. or some £2 billion per annum faster than would be indicated by world trade and relative prices—that is, by increasing our technological competitiveness. We need to keep up that pace of improvement for a full decade. That conclusion is not out of line with considerations that the Chancellor must have had in mind when, in speaking to the CBI, he called for a rate of inflation not only below the European average, but as low as the best in Europe measured on a comparable basis"— which he quantified as 2 per cent. What the Chancellor did not say is that even that rate of inflation will not be enough unless there is a major improvement in technological competitiveness.

That is a challenging but not unattainable target. It means that supply side policies must be at the heart of the Government's economic and industrial policy as we approach EMU, as it would have been of the Opposition's had we been in Government. Maastricht sets the path, but the mountain that we have to climb is still there whatever path we choose. The prospects for the country depend on our being prepared to climb the mountain.

8.56 pm
Mr. Peter Temple-Morris (Leominster)

I am grateful to you, Mr. Deputy Speaker, for calling me in the nick of time. I am also grateful to both Front-Bench spokesmen for allowing me to eat into their time. I promise that I shall not eat into too much of it and for that reason the House will forgive me if my remarks are somewhat truncated.

Standing here amidst this sea of scepticism, I hope that none of my hon. Friends will have apoplexy if I say that I am at least one hon. Member who will vote for the Bill with great pleasure. I have no hesitation in saying that it represents, as does the Government's attitude to it, very much what I want and, much more important than that, what is best for the country. Having said that, I must tell my hon. Friends that they must come to terms with the decline of national sovereignty in a much smaller and mutually dependent world. That is a generalisation, but it is extremely relevant.

In all the major policy areas—I shall touch on three briefly now—we are effectively coming together anyway because of the extent of our mutual dependency. That goes for financial policy. We can hardly move without our friends and allies. That goes also for foreign policy and, even more so today, for defence policy.

Economic and monetary union will be a reality. Europe will have its ups and downs, convergence may be difficult, and there may be delay—but EMU will come about in 1997 or 1999. It may even be deferred. Rather than go on ceaselessly about national attitudes, the alternative must be faced that, if we were left outside EMU, we would have to follow virtually every move within it. We would be unable to do that, and I do not fancy a Britain that specialises in making Swiss watches or chocolates, or provides eager members of United Nations peacekeeping contingents.

When I arrived in the House more than 18 years ago, an old stager told me that foreign affairs debates were major occasions. I am sure that I will not alarm my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs when I say that, short of a regional war, my right hon. Friend, like me, is well used to addressing the House on a Thursday night on a one-line Whip, or on a Friday morning.

When such debates occur, the Diplomatic Gallery is empty. The old stager told me that, in the days when Britain had influence in the world, the Diplomatic Gallery was full for foreign affairs debates. It is significant that, when my right hon. Friend the Prime Minister made his speech yesterday, not one ambassador or even a diplomat was sitting in the Gallery. There were a few Commonwealth Parliamentary Association and Inter-Parliamentary Union guests present, and we were delighted to see them. I hope that that puts matters into perspective for some of my rather reluctant hon. Friends.

Defence matters must of course be decided by intergovernmental co-operation, and of course America must remain in Europe. NATO must also stay—although it will change within itself. There is such a thing as burden-sharing. Uncle Sam will not go on paying. The name of the game is to reorganise in such a way that we keep Uncle Sam here, but without his feeling that he is paying all the bills. Republicans will not rule for ever. The Democrats live in hope, in the same way that the Opposition do in this country. It may be that America will not be as eager to play an active world role for which, to an almost frightening extent, it is wholly responsible.

Europe seems to be undefined in the treaties. We talk about new states joining Europe, but they are not defined. The criteria are all-important. If the Community enlarges too quickly, it will be in danger of collapsing, and certainly of losing its credibility. It is all very well talking about enlargement, but when we can barely afford convergence, it is a little early to speak of gross enlargement.

As to our national interest—I am not entirely an internationalist—there is a somewhat over-eager rush to help all our friends in eastern Europe for understandable political motives, but that should not be done in such a way that they will make more and more of commodities that we already have in abundance. That is as true of agricultural products as it is of Polish steel. Otherwise, we will be flooded from every direction.

Some of the current applications are easy to consider. I refer to Austria, Finland, Norway, Sweden and Switzerland. The task will be more difficult in respect of eastern Europe and the Baltic states. Some applications will come from countries that arguably are not European states. It is difficult for me to say this, because I have visited Turkey for years, and I am the senior surviving officer of the Russian group in the last Parliament. I do not suggest that we should not have close relations, and the words of my right hon. Friend the Secretary of State in respect of enlargement were significant. However, when it comes to Turkey, the pass was sold in the 1963 association agreement.

We also have the Council of Europe's membership to consider—but the old defence considerations that used to dictate our attitude have largely gone. Applications must be considered in that light, quite apart from democratic qualifications.

Russia is not a wholly European country, and if we were to try to take it on, our political and economic digestion would completely explode. No doubt my hon. Friend the Member for Worcestershire, South (Mr. Spicer) would he very happy to see the Community suitably demised. I am sure that I am agreeing with my hon. Friend now.

This country has a world role, and is a good and worthy world influence. That has been proved again and again. I am pompous and conceited enough to suggest that Europe needs us. It needs us historically, to maintain the power balance that without us would be outweighed by other elements.

I am not getting at Germany in any way; I am merely stating the realities of history. Europe needs us for the power balance, but it is important to remember that we also have an obligation to the smaller countries in the Community. If we were not always looking at our own navel and arguing about whether we want to be in Europe or not, we would recognise that those countries occasionally ask us for a lead, and expect us one day to have the foresight and wisdom to give them that lead.

For that reason alone—quite apart from our future as a country in the world, and the sort of role that we want —we belong in Europe. We certainly should not be languishing outside it.

9.5 pm

Mr. John Smith (Monklands, East)

Yesterday, the House heard a record number of maiden speeches. Many new Members took part in our extended proceedings, and it has been widely agreed that all their speeches were of a very high quality. I was pleased to note the number of excellent speeches made by Opposition Members, but fairness requires me to add that Conservative Members made excellent maiden speeches as well.

Today, we have heard only one maiden speech. It is as if the great desire to speak were held in check by the need for people to recover from yesterday's events. The hon. Member for Blackpool, South (Mr. Hawkins), however, broke his duck today, and we welcome him to the House. He paid the customary but—in this instance—welldeserved tribute to his predecessor, Sir Peter Blaker. He also revealed that he entertained some doubts about voting for the Government tonight, but managed to reassure the Whips by concluding that he would do so none the less.

It looks as though the hon. Gentleman will spend some time in this place, and he has already started off on the right note as far as his political career is concerned. [HON. MEMBERS: "He is a lawyer."] Let me say immediately that it is of no significance that he is a lawyer. There is no clear and convincing evidence that they are any more servile than the rest. That is what lawyers might call a rebuttable assumption.

This debate is but the latest in a series of important debates that have preceded and followed the intergovernmental conferences and, of course, the Maastricht summit. It is right that the House should give the fullest consideration to issues that are of profound importance to the future of the European Community, and to our own future as one of its leading members.

In our debate on 21 November last year, which preceded Maastricht, I made some observations about the history of our approach to Europe. I should now return briefly to that theme, by way of introduction to the matters that we are discussing now. I believe that the constant tendency in this country has been to underrate the forces behind the continuing move towards European integration. It started in the 1950s, when Britain did not even attend the Messina conference which led to the birth of the Community. It was thought that it would not happen or that, if it did, it would not amount to much. I believe that we made a similar error of judgment in assessing the potential success of the establishment of the European monetary system in the 1970s.

With the perspective of hindsight, we can now see how wrong such judgments were. We realised eventually that we could not afford to remain outside the European Community—and, similarly, that it was to our advantage to join the exchange rate mechanism of the European monetary system. The lesson seems to be that we eventually join, but we join late in the day. We should now appreciate that one of the penalties of standing back is lack of influence on the design and development of European institutions that have an enormous impact on our affairs. We should seek not to repeat such errors in the decade ahead.

No one knows for certain whether a single currency will be achieved by the end of this decade, as the treaty proposes, but it is vital to appreciate the impetus behind the movement towards economic and monetary union. Two crucial factors are that by the end of this year the single market will be well established. Every member of the Community, bar one, is already a member of the exchange rate mechanism.

These are reflections of growing financial and economic interdependence, which is of course a worldwide phenomenon but which is particularly noticeable within the European Community. Industry, commerce and finance are increasingly operating across national borders. Capital movements have been almost entirely liberated over the whole Organisation for Economic Co-operation and Development area, let alone within the Community.

It is vital that we should recognise that this is a wholly different economic and political environment from that which existed in the 1960s and 1970s. Our appreciation and assessment must reflect these changes. It seems to me essential that we should recognise the limits of theoretical national sovereignty that the real world we live in impose. Perhaps one of the starkest examples of that reality was the raising of British interest rates to 15 per cent. in October 1989, which followed a decision of the Bundesbank and which occurred more than a year before we joined the exchange rate mechanism. On the day that British interest rates were raised, we had theoretical national sovereignty for about 25 minutes.

The fundamental lesson that I draw from that is that, whatever are the precise financial systems constructed by the Community, whether we participate in them or not, we cannot isolate ourselves from the decisions of others.

Mr. Peter Shore (Bethnal Green and Stepney)

It is just conceivable that my right hon. and learned Friend learned the wrong lesson and drew the wrong conclusion from that experience. The truth of the matter is that the then Chancellor of the Exchequer had the option of either adjusting his interest rates to those of the Germans or taking the strain on the exchange rate. If he had thought it to be in the national interest to have a somewhat lower exchange rate, he could have held his interest rates at that level and let the exchange rate fall. That might have been, in the circumstances of the time, a very good thing to do. The point, however, is that he had the choice, whereas my right hon. and learned Friend is pursuing a line of policy that will leave us with no choice at all.

Mr. Smith

I wonder whether he did have so much of a choice after the Bundesbank had raised its interest rates? It seems to me—this is characteristic of most of his interventions in these debates—that my right hon. Friend is stuck in the world of the 1960s and 1970s and that he has not perceived the changes in the 1980s and 1990s that have arisen from, among other things, the operations of multinational companies and deregulation. My right hon. Friend often argues about the desirability of floating exchange rates. We had these high levels of interest rates when we had floating exchange rates and before we entered the exchange rate mechanism.

Mr. Leighton

Will my right hon. and learned Friend give way?

Mr. Smith

As my hon. Friend probably wants to follow up that point, I shall give way to him.

Mr. Leighton

Is it not the case that, since that historic occasion, the Bundesbank put up its interest rates by 0.5 per cent. and we did not do so?

Mr. Smith

We are now in the exchange rate mechanism. I do not know what conclusion my hon. Friend draws from that. However, when we had a floating exchange rate, our interest rates were very high. Moreover, despite the so-called advantages of floating exchange rates, we also had very high levels of unemployment during that period, though they were caused substantially by the policies that were followed by the Conservative party.

One of the most important tasks is to recapture the influence that Governments ought to have over economic and monetary policy. In a world in which industry and finance operate internationally, Governments—if they are to be effective—must do the same. In order to regain a lost sovereignty, a sovereignty lost by the internationalisation of economics, it is necessary to share it.

Ms. Clare Short (Birmingham, Ladywood)

Will my right hon. and learned Friend give way?

Mr. Smith

In a moment.

That is what I believe lies at the heart of the debate and probably at the heart of all our discussions on the European Community.

Ms. Short

I agree with my right hon. and learned Friend. With the greatest respect, I think that 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)—my honourable comrades if I may call them that—are stuck in the past. We now need Europe to regulate capitalism in the way that we used to seek to use the nation state to regulate it, but I must say to my right hon. and learned Friend that the terms of Maastricht are so deflationary and so monetarist that I am deeply worried that they will cause a blight across Europe with regard to levels of unemployment. Does my right hon. and learned Friend accept uncritically the terms on which we are supposed to enter the Maastricht agreement in respect of economic and monetary union?

Mr. Smith

I do not accept them uncritically, and nor does the reasoned amendment tabled by the Labour party. If my hon. Friend will allow me, I shall develop precisely that point by making criticisms of the arrangements which emerged from Maastricht.

The shared sovereignty of which I speak is reflected in commonly agreed policies and in common institutions. One of the issues which rightly concern us is the question of democratic accountability in the decision-making processes of the Community, especially as it enters new spheres of economic and monetary competence.

In previous debates, we urged the Government to place special importance on that issue, especially in relation to the European central bank and the general policy-making framework for economic and monetary policies. There is, I regret to say, no evidence whatsoever that the Government have shown the slightest interest in that fundamental question from the beginning of the debate on the Delors report right up until today. They have not produced concrete proposals to achieve and maintain a proper system of accountability for the new institutions proposed in the Maastricht treaty.

From the competing currencies plan of 1989, through the hard ecu of 1990 and the opt-out of 1991, the Government have sought ways of avoiding the issue, rather than tackling it. It has been left to others—for example, the French socialist Government—to fight that corner with no help from British Conservatives. It was, for example, Mr. Beregovoy, the former Finance Minister and now Prime Minister of France, who tabled proposal, for greater accountability of the European central bank to Finance Ministers and who also insisted on the Economic and Finance Council being given the responsibility to develop Community economic policy. In the negotiations, the French were forced to compromise and the model for the bank is not what they or, indeed, we find ideal.

Direct accountability to the elected Finance Ministers would have been preferable. However, the French secured a significant limitation to the bank's autonomy by ensuring that decisions about the level of the exchange rate of the proposed single currency are to be made by the Council of Economic and Finance Ministers.

We should like to know—no doubt the Chancellor will tell us--what the British Government were doing during the international economic conference on that matter. No report has been made to the House nor, so far as I know, has there been an attempt by Ministers to deal with it in their speeches. Instead, their approach has been to try to avoid the issues entirely by the opt-out device. We are asked not to bother about the issues because they say that, at the end of the day, Britain is not committed to sign up for the single currency.

The Government used to talk about being opposed to an imposed single currency, but there was never any question of a single currency being imposed on us or of the final decision on whether to join a single currency being made other than in the House. The Government expended their political capital at Maastricht on negotiating the opt-out on EMU and on the social chapter instead of exerting themselves with others to improve the decision-making framework for economic and monetary policy. At present, that framework has been decided without any substantial input—or perhaps any input at all—from the British Government.

Nor did the Government appear to make a great deal of progress on how excessive budget deficits by member states were to be handled. In the pre-Maastricht debate on 21 November, I raised that point directly with the Chancellor of the Exchequer and asked him what the Government's position was on the rules proposed in the draft treaty, which was then before us. The Chancellor replied: 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."—[O? cial Report, 21 November 1991; Vol. 199, c. 517.] As far as I can see, no substantial change was made to the treaty in that respect, although the Chancellor claimed in the post-Maastricht debate that he had achieved the objectives laid down in the previous debate. No doubt he will seek to explain how he claims to have secured a modification of the rules.

Mr. Terence L. Higgins (Worthing)


Mr. Smith

I am terribly pushed for time, but I shall give way to the right hon. Gentleman.

Mr. Higgins

Is not the issue modified considerably by the provisions of the opt-out clause?

Mr. Smith

I was talking about how the system will work, if and when Britain enters into the single currency. I do not believe that the provisions of the opt-out clause are relevant to that.

We do not believe that the policy of the Community on that issue should rest only on the provisions of the protocol on excessive deficits procedure annexed to the treaty—a reference value of 3 per cent. for the public sector borrowing requirement and 60 per cent. for the national debt. More emphasis should be placed on paragraph 3 of article 104 of the treaty, which obliges the Commission to take account of levels of Government investment expenditure and all other relevant factors, including the medium term economic and budgetary position of the Member State. There must be a flexible rather than rigid approach to this matter if it is to work effectively. If not, it will become an artificial impediment to the progress of the whole venture.

We regret, as we made clear in our reasoned amendment, that the convergence criteria set out in the treaty are too narrowly formulated on financial and monetary issues. It would be preferable for the criteria to be expanded to take account of the real economy, including progress on sustainable economic growth and the attainment of high levels of employment—which, after all, are set out as objectives of the Community in article 2 of the treaty. I remind the House that article 2 sets out the tasks of the Community as to promote balanced development … sustainable and non-inflationary growth, respecting the environment, a high degree of convergence of economic performance, a high level of employment and of social protection, the raising of the standard of living and quality of life, and economic and social cohesion and solidarity among Member States. The fundamental flaw in the opt-out strategy has been pointed out in previous debates, but I do not believe that it has yet been answered by the Government. The opt-out is relevant only in circumstances in which the British economy has achieved convergence, because any country that fails to achieve convergence would have been given a derogation from the treaty at the point at which the single currency was formed.

Mr. Budgen


Mr. Smith

I must get on.

It is hard to envisage circumstances in which the United Kingdom could afford to opt out when convergence has occurred and a sufficient number of countries are ready to establish a single currency.

The other important omission from the Maastricht treaty is the Government's decision to opt out of the social chapter. We have consistently supported the concept of a strong social dimension in the European Community. The improvement of the standard of living and the enhancement of personal opportunity for ordinary people who live in the partner countries seems to us to be a basic and highly desirable objective.

In other countries, the interlocking of economic progress and social justice is better understood than it is in this country. It is a sign of the ideological isolation of British Conservatives that they are alone in their dogmatic approach to the social chapter of the treaty. It is worth reminding ourselves that it involves improvement of the working environment to protect health and safety conditions of work, information and consultation of workers, equality between men and women in the workplace and help for the long-term unemployed and disabled. In all those important areas, the result of Britain opting out will be that our people will be disadvantaged in relation to the common progress that will be established in the other 11 member states.

The justification offered by the Government appears to be that there will be economic advantage for Britain if our people are entitled to fewer rights than the citizens of other Community countries. That seems to flow from the British Conservative delusion that we cannot so much compete as undercut, that jobs can be secured and maintained only if wages and conditions are worse and that investment will somehow be attracted if we have a low-tech, low-skill and low-wage economy. The Government are choosing to be a bargain-basement economy on the edge of Europe.

The Labour party believes that analysis to be fundamentally flawed. It is deeply unfair for those of our citizens who are trapped in low wages and poor conditions, and it shows a fatal misunderstanding of what is necessary to create a modern dynamic economy. The Government do not understand that the way forward for Britain is to create a high-tech, high-skill economy that will produce high rewards for our people. Instead of joining the rest of the European Community to achieve that, we ostentatiously turn our face against their joint conclusion—all 11 of them—and choose the cul de sac of opt-out.

My right hon. Friend the Leader of the Opposition pointed out at the beginning of the debate yesterday that Britain's poor record on social progress has not brought us economic success. It has not done so in the past and it is unlikely to do so in the future. We cannot see why decent levels of maternity leave and maternity pay, which could bring such benefit and security to ordinary families, should be regarded as either undesirable or threatening to the basis of our economy. Surely this is a matter upon which we should seek to make common cause with other countries by creating a floor of minimum provisions that would prevent bad employers from obtaining an advantage over the good, with families in every country gaining the benefit of the provisions.

I stress the point about employers, because it is important that the employer who wishes to achieve civilised conditions and good levels of pay for his work force should be protected against the activities of others in this country or elsewhere in the Community who seek to undermine the progress that he is seeking to make. So, while it is a great advantage for people who work for their living, as the majority of people in Community countries do, it is also a significant advantage for those who employ them. I am glad to say that that is understood clearly, particularly by the employers' organisations in the Community. Unfortunately, it is not understood by the British Conservatives.

The Prime Minister said at the beginning of the debate that he thought that the social chapter was about ideology against common sense. And so it is—it is the dogmatic and blinkered ideology of the Conservatives against the common sense of all the other countries of the European Community. It is a triumph of ideology, but the Prime Minister has got it the wrong way round, and not for the first time.

Regrettably, the Government have no ambition for the social progress that the rest of the Community seeks and which is embodied in the protocol attached to the Maastricht treaty. We regret very much that Britain is excluded from that and from the decision taking process in the years ahead. The Government have shown no real understanding of the economic challenges of the decade ahead. Both those tendencies are present in their opposition to the social chapter and in their opt-out mentality.

There is no future in Britain being relegated to the sidelines as the rest of the Community advances in terms of social progress and economic success. That lack of balance—the lack of understanding of the interconnection between social progress and economic advance—flaws the domestic policies pursued by the Government, which are revealed in their stark simplicity compared with the activities and views of other member states, and it is deeply to be regretted that in the Maastricht process, once again, British Conservatives preferred their ideology to the needs of our people and of the wider European Community. For that reason, but also for other reasons, we shall vote for our reasoned amendment.

9.30 pm
The Chancellor of the Exchequer (Mr. Norman Lamont)

As the right hon. and learned Member for Monklands, East (Mr. Smith) observed, this is our third debate on the negotiations at Maastricht. In November, the Government sought in advance the House's endorsement of the key objectives of the negotiations, and after Maastricht we returned and explained fully to the House the results and how we had satisfied the objectives that we had set ourselves. Today, we are debating the Second Reading of the Bill that will enable us to implement the objectives that we set ourselves.

Each of those debates has been significant, and each one more so than the last. This two-day debate has been even more important, but it goes without saying that the most important debate is the one that will eventually decide whether we move to a single European currency.

The result of this process has been that the issues involved have been more widely understood throughout the country before, during and immediately after the Maastricht summit. No other country in Europe has been through the same process as us or had such an open and public debate. It is quite obvious that a number of countries in Europe are beginning to regret that. In Germany, attachment to the deutschmark as a symbol of German economic success is strong, and there are those who question the wisdom of a firm commitment now to move to monetary union in 1997 or 1999 without some form of parliamentary review, as we have negotiated for this country. That is true of France, too, where doubts have been expressed about the political implications of a move to European union. In Denmark, the referendum necessary to accept the treaty may be closer than originally expected.

My expectation is that in all 11 other member states, as here, the Maastricht treaty will eventually be ratified. As President Delors commented, the other member states might well have been better advised to stimulate public discussion before, rather than after, the treaty was agreed.

In the past two days, we have had a remarkable debate. As the right hon. and learned Member for Monklands, East said, some considerable and notable maiden speeches have been made, particularly by my hon. Friend the Member for Blackpool, South (Mr. Hawkins), who expressed scepticism about what he saw as the centralising tendency of the Community and outlined his reasons for so believing.

We heard some remarkable speeches from different viewpoints—the speech of my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath) and, from a different viewpoint, the powerful speech by my right hon. Friend the Member for Shropshire, North (Mr. Biffen). I would not be half as hard as the right hon. and learned Member for Monklands, East was on his poor old friend, the right hon. Member for Bethnal Green and Stepney (Mr. Shore), who made some telling points on which the House would be wise to reflect.

The negotiations leading up to Maastricht were arduous and complex and there were certain key objectives that we had to secure. Above all, we sought a treaty which struck the right balance between co-operation in Europe and national sovereignty and which laid out the road to economic and monetary union without committing Britain to move to a single currency—a treaty that enshrined the principle of subsidiarity, and did not allow economically damaging legislation to be imposed on this country. The treaty to which we agreed at Maastricht satisfies all those objectives.

As my right hon. Friend the Prime Minister said yesterday, the provisions dealing with subsidiarity are, for us, an important part of the treaty—not just for what they say, but because they represent the beginning of a debate about what it is appropriate for the Community to do at its level, and what it is appropriate for nation states to do at their level.

The absence of guidance on that point in the past has led to some damaging measures emanating from Brussels in the name of Europe—centralising, standardising, inefficient and highly bureaucratic measures. With the subsidiarity provisions included in the treaty, of course we have not yet won the argument, but the subject is now firmly on the agenda—and so it should be.

My right hon. Friend the Foreign Secretary set out earlier today the treaty provisions covering co-operation in foreign and security policy, and in justice and home affairs. In response to the right hon. and learned Member for Monklands, East, I shall deal with the subject of monetary union and a European currency. There could not be a more important issue for the House, but, in our view, that issue should not be decided finally and irrevocably today.

We have debated before the potential advantages seen in the idea of a single European currency. First, as my hon. Friend the Member for Leominster (Mr. Temple-Morris) emphasised, there are commercial advantages. There would be reductions in transaction costs both for businesses and for tourists. It would no longer be necessary to change money from one Community currency into another to buy goods or services. Secondly, the elimination of exchange rate risks could provide a significant boost to European trade and investment. Thirdly, substantial potential advantages for Britain's important financial services industry could flow from our participation in a single currency, given the important position of the City of London as an international financial centre.

Perhaps the most important potential advantage that could be held out for a European currency is low inflation. An independent European central bank could be a powerful anti-inflationary force across the whole of Europe.

Mr. Salmond

When the Chancellor of the Exchequer and the Prime Minister go to Edinburgh at the end of this year, they will be welcomed by the new Scottish National party lord provost of that city. Will the Chancellor then be able to say that he has been backing the "Eurofed for Edinburgh" campaign, or will his party back London, as usual?

Mr. Lamont

I shall deal with that point in a minute, if the hon. Gentleman will contain himself for a moment.

Mr. Stuart Bell (Middlesbrough)


Mr. Lamont

I shall continue, if the hon. Gentleman will allow me.

I have described the advantages put forward in favour of a single European currency. On the other hand, as the hon. Member for Motherwell, South (Dr. Bray) said, we cannot ignore the uncertainties that surround a single currency. Unless the economies of Europe are genuinely prepared for it, a single currency could exacerbate regional imbalances and unemployment, necessitating huge transfers of resources between countries. Both those things would be undesirable.

The political implications are even more important. The treaty provides for the irrevocable locking of exchange rates—an irreversible commitment. Such a step involves transferring important powers over economic policy from national Governments to an independent monetary authority.

Yesterday I listened carefully to the speech of the Leader of the Opposition, and greatly admired the clarity and certainty of his conviction, just as I admired the clarity and certainty of his conviction when he used to argue that we should get out of the Community. He asked why we could not decide today on such an important issue. He believes—the right hon. and learned Member for Monklands, East persisted with the point—that we should make that choice today.

We take a different view. A move to a single currency may well not occur until the end of the decade. We cannot precisely predict the future shape of Europe at that time. I entirely accept what my right hon. Friend the Member for Old Bexley and Sidcup said about the countries of eastern Europe and about it taking a long time before their living standards are up to the level at which they can be full members of the Community. That is a powerful point and I entirely agree with it. In the interim, it is in the interests of eastern Europe and of the Community that we should open up our markets to give those countries all the help and encouragement we can. That process should begin now, and some countries in the Community have been far too reticent about doing that.

Whatever the claims, it is impossible for us to say now that a single currency will definitely help to deliver price stability. We do not know what economic conditions will prevail when the time to make a decision comes. We do not even know how many members the Community will then have. I very much hope, and subject to what my right hon. Friend the Member for Old Bexley and Sidcup has said, that in the years to come it will be possible to expand Community membership first to the European Free Trade Association countries and then, when they are ready, to the emerging democracies and emerging market economies of eastern Europe.

Nor do we know how many other Community countries will be moving to a single currency at the time when a decision has to be made. If the move were to take place in 1997, a majority of member states would have to move. If it were to take place in 1999, there would be no minimum—in theory, any number of states between two and 12 would be significant.

The other factor is that there is to be another intergovernmental conference in 1996 which may have some implications for the institutional balance and the development of the Community. Is that not also something that should be taken into account before we make a final decision on the matter?

Mr. Cash

Does my right hon. Friend agree, in the light of what he said in December in the Maastricht debate about there being a price to be paid for a single currency and a central bank, that the price, if we were to accept it, would include the derogation of our democratic principles in the House? Does my right hon. Friend have a comment to make on that? Will he kindly explain that, if we were to hand over those powers to unelected and unaccountable bankers, it would effectively mean the end of the monetary and economic policy that he follows in his high office now?

Mr. Lamont

If my hon. Friend will bear with me, I will come on to precisely that point.

Mr. Bell

Will the right hon. Gentleman give way?

Mr. Lamont

For the reasons I have given, it is the Government's view that a decision of such crucial political importance cannot be prejudged now, rubber-stamped and simply left to some automatic judgment and something called "convergence criteria". It is a bigger decision than that.

I was astonished by the right hon. and learned Member for Monklands, East. His speech was at least memorable when he talked about the "cul de sac" in an opt-out clause, which was a fairly remarkable phrase. The protocol gives us an absolute assurance that the decision will be taken at the right time by the elected Parliament of the day in the full possession of the relevant facts. In our view, that is precisely how it should be. The protocol does not in any way diminish our right to participate in stage 3 on exactly the same terms as other member states. If we meet the convergence conditions, we have an absolute right to join the single currency if Parliament so decides.

One common issue has run through all the debates. It was expressed by my hon. Friend the Member for Stafford (Mr. Cash) in his speech. It was expressed very forcefully by my right hon. Friend the Member for Shropshire, North and it has been expressed by the former right hon. Member for Finchley. The question is: is it possible to have European economic and monetary union without also being obliged to move towards political union—towards the creation of a European state? That is the question that has bothered some of my hon. Friends—how far are monetary union and the single currency compatible with the vision of Europe that the Prime Minister spelled out yesterday—a vision of a more liberal, more open and wider Europe?

The answer to this crucial question depends on the precise terms of the framework of the single currency and how it develops. Clearly, a currency union cannot function without some overall discipline on national budget deficits. A single currency could not work if Governments pursued irresponsible, lax fiscal policies. But having a general fiscal rule is not the same as surrendering control over the levels of taxation and expenditure.

It is, however, clear that a single currency—here I approach the point made by my hon. Friend the Member for Stafford—involves removing control of monetary policy from national Governments. The treaty proposes that it should be handed, not to a European executive, Government or state, but to a monetary authority independent of all national Governments—[HON. MEMBERS: "Unelected."] Indeed, but many countries in Europe and throughout the world have already made such arrangements with their national central banks, and I have often heard hon. Members on both sides of the House argue for an independent central bank even without a commitment to a European currency. These are profound issues, and it was awareness of them that dictated our objectives at Maastricht.

Mr. Bell

The European central bank seems to be dominating the debate. Would it not be more desirable for this country to participate in a European central bank on whose board the Governor of the Bank of England would serve and involving accountability through ECOFIN than to attend on the decisions of the Bundesbank, which affect the whole of Europe? Are we not better off controlling our own destiny through such a bank than allowing the Bundesbank to control it for us?

Mr. Lamont

That is precisely the issue that I am trying —no doubt somewhat laboriously—to deal with. I am trying, to the best of my ability, to sum up the pros and cons.

Although some member states would have preferred a more substantial stage 2, we argued that, unless and until a decision on a single currency had been made, responsibility for economic policy—this is the result of the treaty—should remain unambiguously in national hands. The treaty makes it clear that in stage 2 member states will have the freedom to pursue their own economic policies as they judge right in their own circumstances. That applies not just to Britain by virtue of its protocol but to every other country in Europe—but only because we negotiated and pressed for it.

Mr. Benn

Let us suppose that an independent bank imposes, through its power, deflationary policies that cause mass unemployment in the name of price stability. What remedy will be available to the electorate or the Government to prevent a repetition of the tragedy of the 1930s, when we had mass unemployment, with political consequences that everyone in this country and Europe still remembers?

Mr. Lamont

Unlike the right hon. Gentleman, I believe that tough anti-inflationary policies are more likely to generate jobs than their alternative. I know that he does not agree, but if I had to choose between submitting to the discipline of an independent bank or submitting, after mistakes has been made, to the disciplines and letters of Mr. Witteveen of the IMF, I know what I would choose.

What I said of stage 2 is true of both monetary and fiscal policy. In stage 2 of economic and monetary union, the Community will be able to offer economic advice to member states over budget deficits, but it cannot interfere with their right to tax, spend and borrow as they see fit.

Our third objective was to ensure that, whatever our reservations about a single currency, if a monetary union were to come into being, it should be practical and it should work. Therefore, it was important that it be founded on lasting economic convergence. A monetary union or a single currency based only on mounting fiscal transfers between countries or on sharply rising unemployment would be unsustainable and undesirable. The convergence conditions set out in the treaty are intended to be demanding and to make that less likely.

To be eligible to move to the third stage of EMU, a member state will need to bring its interest rates and inflation rates closely into line with the best performing states in the Commumnity. That is essential if a monetary union is to be workable.

Yesterday, the right hon. Member for Bethnal Green and Stepney referred to what I said to the CBI. The point that I was making there was that, whether or not we eventually move to a single currency, the convergence criteria, for us at least, are a useful goal for macro-economic policy. A firm exchange rate, firm budget disciplines and low inflation are valuable in themselves, regardless of whether or not we are a member of a future single currency zone.

The right hon. Gentleman made an elegant and powerful speech and gave the House much on which it will wish to reflect. However, to be frank, he was less persuasive when he simply objected to these policies because he disagreed with the objectives. We pursue the aims of low inflation and sound finance not because of the treaty or any obligations but because we have chosen to do so and because they are the right objectives.

Our fourth objective was to establish the principle that, even within an eventual currency union, member states —here I come to another point raised by the right hon. Gentleman—should have the maximum possible freedom to pursue their own economic policies, particularly fiscal policy.

Mr. Rhodri Morgan (Cardiff, West)

Will the right hon. Gentleman give way?

Mr. Lamont

I am addressing a point made by the right hon. Member for Bethnal Green and Stepney.

As I have already conceded, in a currency union some general overall discipline on budget deficits nationally is clearly required. Our objective was to see that, even in stage 3, any Community-level discipline operated with the lightest possible touch. As the right hon. Gentleman recognised, we got the provisions altered, contrary to what the right hon. Member for Chesterfield (Mr. Benn) said. My right hon. Friend the Member for Worthing (Mr. Higgins) knows that. We got them altered, so they are less onerous. If some member states choose to run lax fiscal policies and have large budget deficits, that can affect countries throughout Europe and push up interest rates and undermine the success of a single currency.

We do not believe that a single monetary policy requires the central determination of individual countries' levels of taxes and spending. We were seeking a balance between what was responsible and necessary, and the freedom of countries to determine their own levels of taxes and spending. I believe that the treaty achieves that.

The right hon. Member for Bethnal Green and Stepney referred to the so-called 3 per cent. deficit ceiling written into the treaty. Let me emphasise that it is intended merely as a trigger for investigation and analysis by the Commission and the Council of Ministers. It is not 3 per cent. by itself; it is 3 per cent. that has to be considered judgmentally against the background and history of the individual country's fiscal policy.

It is for the Council to determine whether a deficit is excessive, taking into account all the relevant factors, including the past and the cyclical positions. Only then could the Council apply sanctions to a member state. That process would inevitably involve an element of judgment, with the budget being looked at over a number of years. Therefore, the 3 per cent. ratio would be neither a ceiling nor a limit, and it is not right to argue that the treaty prohibits deficits of a certain figure.

Certain points were raised—

Mr. Morgan

Will the right hon. Gentleman give way?

Mr. Lamont

No. I wish to answer a point raised by my hon. Friends the Members for Worcestershire, South (Mr. Spicer) and for Ludlow (Mr. Gill) and by my right hon. Friend the Member for Shropshire, North, on which I think there has been genuine misunderstanding.

I assure my right hon. and hon. Friends that article 99, which deals with the harmonisation of indirect taxes, is merely repeating the words contained—they may object to them anyway—in the Single European Act about the harmonisation of indirect taxes insofar as that is necessary for the internal market. The article has merely added a provision about consulting the Economic and Social Committee. I assure my right hon. and hon. Friends that we shall adhere to our policy of agreeing only tax harmonisation that we believe is necessary for the proper functioning of the single market. We entirely reject the harmonisation of direct taxes.

Mr. Morgan

Will the Chancellor of the Exchequer give way?

Mr. Lamont

I am sorry, but I must reply to points that were made in the debate.

The right hon. and learned Member for Monklands, East and others raised the question of the location of the European monetary institute and the central bank. The priority must be to decide on the location first of the EMI. The United Kingdom was the first to argue for the establishment in stage 2 of an institution like the EMI instead of having a central bank in stage 2. In our view, Britain therefore has undoubtedly a strong claim to be the seat of the EMI. It would be very much in the interests of the Community and the new institutions if they were based in the Community country with the leading financial centre in Europe. London is the leading player in the rapidly growing private ecu market. When the decision is taken to set up the central bank, we believe that Britain —not London alone but other centres—will be the strongest candidate.

We continue to reject unnecessary harmonisation of social policy. It is no surprise that the Labour party should seek to surrender the right of the House to make decisions that govern how the people of this country should live and work. The Opposition have clearly lost any confidence that they used to have in their own ability to persuade the British electorate, so they seek instead to bring back trade union power through the back door from Brussels. Our decision not to sign the social chapter means that they cannot get via the back door what last month's general election demonstrated they could not get openly from the British people.

The social chapter would have allowed agreements by employers and trade unions at Community level to become binding on all employers and employees across the Community. It would have given trade unions powers that they did not even have in the 1970s. That in itself would have been enough to make it unacceptable. We were not prepared to have the effect of the trade union reforms that we worked so hard to introduce in the 1980s undone by the provisions in the social chapter. That is why the Government were not prepared to sign it. The other 11 member states may, if they so wish, use their separate Maastricht agreement to adopt new and far-reaching measures on social policy, but those measures will not apply to us and we will not be obliged to implement them.

The draft working time directive, although it has been brought forward under existing treaty provisions, is a good example of the sort of job-destroying legislation that we feared might be proposed under the social chapter. We will continue to resist similar damaging and misguided proposals in future, too. But our task would have been infinitely more difficult had we done as the Opposition suggest and signed away our right of veto over the entire range of social policy issues.

There is no denying that the Maastricht treaty has major implications, but I shall make clear what it does not mean. It does not imply that this country will be obliged to increase its contribution to European Community expenditure. Several of my hon. Friends have raised questions about the expenditure implications of the treaty. Let me make it clear that the treaty does not involve any commitment to increase expenditure. When it comes to funds for cohesion, we insist that that is something that is to be examined in the context of other existing structural funds. There is no commitment to increased expenditure. When it comes to increasing the own resources ceiling, we are far from convinced. We see no need for that ceiling to be increased. It goes without saying that we are determined to preserve our own abatement.

The Bill puts forward the vision of Europe of my right hon. Friend the Prime Minister—an open Europe, a Europe that will grow wider, a Europe that is open to market forces and a Europe that will increasingly be seen to be in concert with the wishes of the people of this country and Members of this place. I commend the Bill to the House.

Question put, That the amendment be made:—

The House divided: Ayes 261, Noes 360.

Division No. 18] [10.00
Abbott, Ms Diane Dalyell, Tam
Ainger, Nicholas Darling, Alistair
Ainsworth, Robert (Cov'try NE) Davidson, lan
Allen, Graham Davies, Bryan (Oldham C'tral)
Anderson, Donald (Swansea E) Davies, Rt Hon Denzil (Llanelli)
Anderson, Ms Janet (Ros'dale) Davies, Ron (Caerphilly)
Armstrong, Hilary Davis, Terry (B'ham, H'dge H'l)
Ashton, Joe Denham, John
Austin-Walker, John Dewar, Donald
Banks, Tony (Newham NW) Dixon, Don
Barnes, Harry Dobson, Frank
Battle, John Donohoe, Brian
Bayley, Hugh Dowd, Jim
Beckett, Margaret Dunnachie, Jimmy
Bell, Stuart Dunwoody, Mrs Gwyneth
Bennett, Andrew F. Eagle, Ms Angela
Benton, Joe Eastham, Ken
Bermingham, Gerald Enright, Derek
Berry, Roger Etherington, William
Betts, Clive Evans, John (St Helens N)
Blair, Tony Ewing, Mrs Margaret
Blunkett, David Fatchett, Derek
Boateng, Paul Faulds, Andrew
Boyce, Jimmy Field, Frank (Birkenhead)
Boyes, Roland Fisher, Mark
Bradley, Keith Foster, Derek (B'p Auckland)
Bray, Dr Jeremy Foulkes, George
Brown, Gordon (Dunfermline E) Fraser, John
Brown, N. (N'c'tle upon Tyne E) Fyfe, Maria
Burden, Richard Galbraith, Sam
Byers, Stephen Galloway, George
Caborn, Richard Gapes, Michael
Callaghan, Jim Garrett, John
Campbell, Ms Anne (C'bridge) Gerrard, Neil
Campbell-Savours, D. N. Godman, Dr Norman A.
Chisholm, Malcolm Godsitf, Roger
Clapham, Michael Golding, Mrs Llin
Clark, Dr David (South Shields) Gordon, Mildred
Clarke, Eric (Midlothian) Gould, Bryan
Clarke, Tom (Monklands W) Graham, Thomas
Clelland, David Grant, Bernie (Tottenham)
Clwyd, Mrs Ann Griffiths, Nigel (Edinburgh S)
Coffey, Ms Ann Griffiths, Win (Bridgend)
Cohen, Harry Grocott, Bruce
Connarty, Michael Gunnell, John
Cook, Frank (Stockton N) Hain, Peter
Cook, Robin (Livingston) Hall, Mike
Corbett, Robin Hanson, David
Corston, Ms Jean Hardy, Peter
Cousins, Jim Harman, Ms Harriet
Cox, Tom Hattersley, Rt Hon Roy
Cryer, Bob Henderson, Doug
Cummings, John Hendron, Dr Joe
Cunliffe, Lawrence Hepple, John
Cunningham, Jim (Covy SE) Hill, Keith (Streatham)
Cunningham, Dr John (C'p'l'nd) Hinchliffe, David
Dafis, Cynog Hoey, Kate
Hogg, Norman(Cumbernauld) O' Hara, Edward
Home Robertson, John Olner, William
Hood, Jimmy O'Neill, Martin
Hoon, Geoff Orme, Rt Hon Stanley
Howarth, George (Knowsley N) Parry, Robert
Howells, Dr. Kim (Pontypridd) Patchett, Terry
Hoyle, Doug Pendry, Tom
Hughes, Kevin (Doncaster N) Pickthall, Colin
Hughes, Robert (Aberdeen N) Pike, Peter L.
Hughes, Roy (Newport E) Pope, Greg
Hume, John Powell, Ray (Ogmore)
Hutton, John Prentice, Ms Bridget (Lew'm E)
Illsley, Eric Prentice, Gordon (Pendle)
Ingram, Adam Prescott, John
Jackson, Ms Glenda (H'stead) Primarolo, Dawn
Jackson, Ms Helen (Shef'ld, H) Purchase, Ken
Jamieson, David Quin, Ms Joyce
Janner, Greville Radice, Giles
Jones, Barry (Alyn and D'side) Randall, Stuart
Jones, leuan (Ynys Môn) Raynsford, Nick
Jones, Ms Lynne (B'ham S O) Redmond, Martin
Jowell, Ms Tessa Reid, Dr John
Kaufman, Rt Hon Gerald Richardson, Jo
Keen, Alan Robertson, George (Hamilton)
Kennedy, Ms Jane (L'p'l Br'g'n) Robinson, Geoffrey (Co'try NW)
Khabra, Piara Roche, Ms Barbara
Kilfoyle, Peter Rogers, Allan
Kinnock, Rt Hon Neil (Islwyn) Rooker, Jeff
Leighton, Ron Ross, Ernie (Dundee W)
Lestor, Joan (Eccles) Rowlands, Ted
Lewis, Terry Ruddock, Joan
Litherland, Robert Salmond, Alex
Lloyd, Tony (Stretford) Sedgemore, Brian
Llwyd, Elfyn Sheerman, Barry
Loyden, Eddie Sheldon, Rt Hon Robert
McAllion, John Shore, Rt Hon Peter
McAvoy, Thomas Short, Clare
MacDonald, Calum Simpson, Alan
McFall, John Smith, Andrew (Oxford E)
McGrady, Eddie Smith, C. (Isl'ton S & F'sbury)
McKelvey, William Smith, Rt Hon John (M'kl'ds E)
Mackinlay, Andrew Smith, Llew (Blaenau Gwent)
McLeish, Henry Snape, Peter
McMaster, Gordon Soley, Clive
McNamara, Kevin Spellar, John
McWilliam, John Squire, Rachel (Dunfermline W)
Madden, Max Steinberg, Gerry
Mahon, Alice Stevenson, George
Mallon, Seamus Stott, Roger
Mandelson, Peter Strang, Gavin
Marek, Dr John Straw, Jack
Marshall, David (Shettleston) Taylor, Mrs Ann (Dewsbury)
Marshall, Jim (Leicester, S) Tipping, Paddy
Martin, Michael J. (Springburn) Turner, Dennis
Martlew, Eric Vaz, Keith
Maxton, John Walley, Joan
Meacher, Michael Warden, Gareth (Gower)
Meale, Alan Wareing, Robert N
Michael, Alun Watson, Mike
Michie, Bill (Sheffield Heeley) Welsh, Andrew
Milburn, Alan Wicks, Malcolm
Miller, Andrew Wigley, Dafydd
Mitchell, Austin (Gt Grimsby) Williams, Rt Hon Alan (Sw'n W)
Moonie, Dr Lewis Williams, Alan W (Carmarthen)
Morgan, Rhodri Wilson, Brian
Morley, Elliot Winnick, David
Morris, Rt Hon A. (Wy'nshawe) Wise, Audrey
Morris, Estelle (B'ham Yardley) Worthington, Tony
Morris, Rt Hon J. (Aberavon) Wray, Jimmy
Mowlam, Marjorie Wright, Tony
Mudie, George Young, David (Bolton SE)
Mullin, Chris
Murphy, Paul Tellers for the Ayes:
Oakes, Rt Hon Gordon Mr. Jack Thompson, and
O'Brien, Michael (N W'kshire) Mr. Martyn Jones
O'Brien, William (Normanton)
Adley, Robert Aitken, Jonathan
Ainsworth, Peter (East Surrey) Alexander, Richard
Alison, Rt Hon Michael (Selby) Day, Stephen
Allason, Rupert (Torbay) Deva, Niranjan
Alton, David Devlin, Tim
Amess, David Dickens, Geoffrey
Ancram, Michael Dicks, Terry
Arbuthnot, James Dorrell, Stephen
Arnold, Jacques (Gravesham) Douglas-Hamilton, Lord James
Arnold, Sir Thomas (Hazel Grv) Dover, Den
Ashby, David Duncan, Alan
Ashdown, Rt Hon Paddy Duncan-Smith, Iain
Aspinwall, Jack Dunn, Bob
Atkins, Robert Durant, Sir Anthony
Atkinson, David (Bour'mouth E) Dykes, Hugh
Atkinson, Peter (Hexham) Eggar, Tim
Baker, Rt Hon K. (Mole Valley) Elletson, Harold
Baker, Nicholas (Dorset North) Emery, Sir Peter
Baldry, Tony Evans, David (Welwyn Hatfield)
Banks, Matthew (Southport) Evans, Jonathan (Brecon)
Banks, Robert (Harrogata) Evans, Nigel (Ribble Valley)
Bates, Michael Evans, Roger (Monmouth)
Batiste, Spencer Evennett, David
Beggs, Roy Faber, David
Beith, A. J. Fabricant, Michael
Bellingham, Henry Fairbairn, Sir Nicholas
Bendall, Vivian Fenner, Dame Peggy
Beresford, Sir Paul Field, Barry (Isle of Wight)
Biffen, Rt Hon John Fishburn, John Dudley
Blackburn, Dr John G. Forman, Nigel
Body, Sir Richard Forsyth, Michael (Stirling)
Bonsor, Sir Nicholas Forsythe, Clifford (Antrim S)
Booth, Hartley Forth, Eric
Boswell, Tim Foster, Donald (Bath)
Bottomley, Peter (Eltham) Fowler, Rt Hon Sir Norman
Bottomley, Rt Hon Virginia Fox, Dr Liam (Woodspring)
Bowden, Andrew Fox, Sir Marcus (Shipley)
Bowis, John Freeman, Roger
Boyson, Rt Hon Sir Rhodes French, Douglas
Brandreth, Gyles Fry, Peter
Brazier, Julian Gale, Roger
Bright, Graham Gallie, Philip
Brooke, Rt Hon Peter Gardiner, Sir George
Brown, M. (Brigg & Cl'thorpes) Garel-Jones, Rt Hon Tristan
Browning, Mrs. Angela Garnier, Edward
Bruce, Ian (S Dorset) Gill, Christopher
Bruce, Malcolm (Gordon) Gillan, Ms Cheryl
Budgen, Nicholas Goodlad, Rt Hon Alastair
Burns, Simon Goodson-Wickes, Dr Charles
Burt, Alistair Gorman, Mrs Teresa
Butcher, John Gorst, John
Butler, Peter Grant, Sir Anthony (Cambs SW)
Butterfill, John Green way, Harry (Ealing N)
Campbell, Menzies (Fife NE) Greenway, John (Ryedale)
Carlile, Alexander (Montgomry) Griffiths, Peter (Portsmouth, N)
Carlisle, John (Luton North) Grylls, Sir Michael
Carlisle, Kenneth (Lincoln) Gummer, Rt Hon John Selwyn
Carrington, Matthew Hague, William
Carttiss, Michael Hamilton, Rt Hon Archie
Cash, William Hamilton, Neil (Tatton)
Channon, Rt Hon Paul Hampson, Dr Keith
Chaplin, Mrs Judith Hanley, Jeremy
Churchill, Mr Hannam, Sir John
Clappison, James Hargreaves, Andrew
Clark, Dr Michael (Rochford) Harris, David
Clarke, Rt Hon Kenneth (Ruclif) Haselhurst, Alan
Clifton-Brown, Geoffrey Hawkins, Nicholas
Coe, Sebastian Hayes, Jerry
Colvin, Michael Heald, Oliver
Congdon, David Heath, Rt Hon Sir Edward
Conway, Derek Heathcoat-Amory, David
Coombs, Anthony (Wyre For'st) Hendry, Charles
Coombs, Simon (Swindon) Heseltine, Rt Hon Michael
Cope, Rt Hon Sir John Hicks, Robert
Cormack, Patrick Higgins, Rt Hon Terence L.
Couchman, James Hill, James (Southampton Test)
Cran, James Hogg, Rt Hon Douglas (G'tham)
Critchley, Julian Horam, John
Currie, Mrs Edwina (S D'by'ire) Hordern, Sir Peter
Curry, David (Skipton & Ripon) Howard, Rt Hon Michael
Davies, Quentin (Stamford) Howarth, Alan (Strat'rd-on-A)
Davis, David (Boothferry) Howell, Rt Hon David (G'dlord)
Howell, Ralph (North Norfolk) Newton, Rt Hon Tony
Hughes Robert G. (Harrow W) Nicholls, Patrick
Hughes, Simon (Southwark) Nicholson, David (Taunton)
Hunt, Rt Hon David (Wirral W) Nicholson, Emma (Devon West)
Hunt, Sir John (Ravensbourne) Norris, Steve
Hunter, Andrew Onslow, Rt Hon Cranley
Hurd, Rt Hon Douglas Oppenheim, Phillip
Jack, Michael Ottaway, Richard
Jackson, Robert (Wantage) Page, Richard
Jenkin, Bernard Paice, James
Jessel, Toby Paisley, Rev Ian
Johnson Smith, Sir Geoffrey Patnick, Irvine
Johnston, Sir Russell Patten, Rt Hon John
Jones, Gwilym (Cardiff N) Pattie, Rt Hon Sir Geoffrey
Jones, Nigel (Cheltenham) Pawsey, James
Jones, Robert B. (W H'f'rdshire) Peacock, Mrs Elizabeth
Jopling, Rt Hon Michael Pickles, Eric
Kellett-Bowman, Dame Elaine Porter, Barry (Wirral S)
Key, Robert Porter, David (Waveney)
Kilfedder, James Portillo, Rt Hon Michael
King, Rt Hon Tom Powell, William (Corby)
Kirkhope, Timothy Rathbone, Tim
Kirkwood, Archy Redwood, John
Knapman, Roger Renton, Rt Hon Tim
Knight, Mrs Angela (Erewash) Richards, Rod
Knight, Greg (Derby N) Riddick, Graham
Knight, Dame Jill (Bir'm E'st'n) Rifkind, Rt Hon. Malcolm
Knox, David Robathan, Andrew
Kynoch, George (Kincardine) Roberts, Rt Hon Sir Wyn
Lait, Ms Jacqui Robertson, Raymond (Ab'd'n S)
Lamont, Rt Hon Norman Robinson, Mark (Somerton)
Lang, Rt Hon Ian Robinson, Peter (Belfast E)
Lawrence, Ivan Roe, Mrs Marion (Broxbourne)
Legg, Barry Ross, William (E Londonderry)
Leigh, Edward Rowe, Andrew (Mid Kent)
Lennox-Boyd, Hon Mark Rumbold, Rt Hon Dame Angela
Lester, Jim (Broxtowe) Ryder, Rt Hon Richard
Lidington, David Sackville, Tom
Lilley, Rt Hon Peter Sainsbury, Rt Hon Tim
Lloyd, Peter (Fareham) Scott, Rt Hon Nicholas
Lord, Michael Shaw, David (Dover)
Luff, Peter Shaw, Sir Giles (Pudsey)
Lyell, Rt Hon Sir Nicholas Shephard, Rt Hon Gillian
Lynne, Ms Liz Shepherd, Colin (Hereford)
McCrea, Rev William Shepherd, Richard (Aldridge)
MacGregor, Rt Hon John Shersby, Michael
MacKay, Andrew Sims, Roger
Maclean, David Skeet, Sir Trevor
Maclennan, Robert Smith, Sir Dudley (Warwick)
McLoughlin, Patrick Smith, Tim (Beaconsfield)
McNair-Wilson, Sir Patrick Smyth, Rev Martin (Belfast S)
Madel, David Soames, Nicholas
Maginnis, Ken Speed, Keith
Maitland, Lady Olga Spencer, Sir Derek
Major, Rt Hon John Spicer, Sir James (W Dorset)
Malone, Gerald Spicer, Michael (S Worcs)
Mans, Keith Spink, Dr Robert
Marland, Paul Spring, Richard
Marlow, Tony Sproat, Iain
Marshall, John (Hendon S) Squire, Robin (Hornchurch)
Marshall, Sir Michael (Arundel) Stanley, Rt Hon Sir John
Martin, David (Portsmouth S) Steel, Rt Hon Sir David
Mates, Michael Steen, Anthony
Mawhinney, Dr Brian Stephen, Michael
Mayhew, Rt Hon Sir Patrick Stern, Michael
Mellor, Rt Hon David Stewart, Allan
Merchant, Piers Streeter, Gary
Michie, Mrs Ray (Argyll Bute) Sumberg, David
Milligan, Stephen Sweeney, Walter
Mills, Iain Sykes, John
Mitchell, Andrew (Gedllng) Tapsell, Sir Peter
Mitchell, Sir David (Hants NW) Taylor, Ian (Esher)
Moate, Roger Taylor, Rt Hon D. (Strangford)
Molyneaux, Rt Hon James Taylor, John M. (Solihull)
Monro, Sir Hector Taylor, Matthew (Truro)
Montgomery, Sir Fergus Taylor, Sir Teddy (Southend, E)
Moss, Malcolm Temple-Morris, Peter
Needham, Richard Thomason, Roy
Nelson, Anthony Thompson, Sir Donald (C'er V)
Neubert, Sir Michael Thompson, Patrick (Norwich N)
Thornton, Malcolm Watts, John
Thurnham, Peter Wells, Bowen
Townend, John (Bridlington) Wheeler, Sir John
Townsend, Cyril D. (Bexl'yh'th) Whitney, Ray
Tracey, Richard Whittingdale, John
Tredinnick, David Widdecombe, Ann
Trend, Michael Wiggin, Jerry
Trimble, David Wilkinson, John
Trotter, Neville Willetts, David
Twinn, Dr Ian Wilshire, David
Tyler, Paul Winterton, Mrs Ann (Congleton)
Vaughan, Sir Gerard Winterton, Nicholas (Macc'f'ld)
Viggers, Peter Wolfson, Mark
Waldegrave, Rt Hon William Wood, Timothy
Walden, George Yeo, Tim
Walker, Bill (N Tayside) Young, Sir George (Acton)
Wallace, James
Waller, Gary Tellers for the Noes:
Ward, John Mr. David Lightbown and
Wardle, Charles (Bexhill) Mr. Sydney Chapman.
Waterson, Nigel

Question accordingly negatived.

Main Question put forthwith pursuant to Standing Order

No. 60 (Amendment on Second or Third Reading):—

The House divided: Ayes 336, Noes 92.

Division No. 19] [10.16 pm
Adley, Robert Carlile, Alexander (Montgomry)
Ainsworth, Peter (East Surrey) Carlisle, Kenneth (Lincoln)
Aitken, Jonathan Carrington, Matthew
Alexander, Richard Channon, Rt Hon Paul
Alison, Rt Hon Michael (Selby) Chaplin, Mrs Judith
Alton, David Churchill, Mr
Amess, David Clappison, James
Ancram, Michael Clark, Dr Michael (Rochtord)
Arbuthnot, James Clarke, Rt Hon Kenneth (Ruclif)
Arnold, Jacques (Gravesham) Clifton-Brown, Geoffrey
Arnold, Sir Thomas (Hazel Grv) Coe, Sebastian
Ashby, David Colvin, Michael
Ashdown, Rt Hon Paddy Congdon, David
Aspinwall, Jack Conway, Derek
Atkins, Robert Coombs, Anthony (Wyre For'st)
Atkinson, David (Bour'mouth E) Coombs, Simon (Swindon)
Atkinson, Peter (Hexham) Cope, Rt Hon Sir John
Baker, Rt Hon K. (Mole Valley) Cormack, Patrick
Baker, Nicholas (Dorset North) Couchman, James
Baldry, Tony Critchley, Julian
Banks, Matthew (Southport) Currie, Mrs Edwina (S D'by'ire)
Banks, Robert (Harrogate) Curry, David (Skipton & Ripon)
Bates, Michael Dafis, Cynog
Batiste, Spencer Dalyell, Tam
Beith, A. J. Davies, Quentin (Stamford)
Bellingham, Henry Davis, David (Boothferry)
Bendall, Vivian Day, Stephen
Beresford, Sir Paul Deva, Niranjan
Blackburn, Dr John G. Devlin, Tim
Bonsor, Sir Nicholas Dickens, Geoffrey
Booth, Hartley Dicks, Terry
Boswell, Tim Dorrell, Stephen
Bottom ley, Peter (Eltham) Douglas-Hamilton, Lord James
Bottomley, Rt Hon Virginia Dover, Den
Bowden, Andrew Duncan, Alan
Bowis, John Dunn, Bob
Boyson, Rt Hon Sir Rhodes Durant, Sir Anthony
Brandreth, Gyles Dykes, Hugh
Brazier, Julian Eggar, Tim
Bright, Graham Elletson, Harold
Brooke, Rt Hon Peter Emery, Sir Peter
Brown, M. (Brigg & Cl'thorpes) Evans, David (Welwyn Hatfield)
Browning, Mrs. Angela Evans, Jonathan (Brecon)
Bruce, Ian (S Dorset) Evans, Nigel (Ribble Valley)
Bruce, Malcolm (Gordon) Evans, Roger (Monmouth)
Burns, Simon Evennett, David
Burt, Alistair Ewing, Mrs Margaret
Butler, Peter Faber, David
Butterfill, John Fabricant, Michael
Campbell, Menzies (Fife NE) Fairbairn, Sir Nicholas
Faulds, Andrew Knox, David
Fenner, Dame Peggy Kynoch, George (Kincardine)
Field, Barry (Isle of Wight) Lait, Ms Jacqui
Fishburn, John Dudley Lamont, Rt Hon Norman
Forman, Nigel Lang, Rt Hon Ian
Forsyth, Michael (Stirling) Lawrence, Ivan
Forth, Eric Legg, Barry
Foster, Donald (Bath) Leigh, Edward
Fowler, Rt Hon Sir Norman Lennox-Boyd, Hon Mark
Fox, Dr Liam (Woodspring) Lester, Jim (Broxtowe)
Fox, Sir Marcus (Shipley) Lidington, David
Freeman, Roger Lightbown, David
French, Douglas Lilley, Rt Hon Peter
Fry, Peter Lloyd, Peter (Fareham)
Gale, Roger Llwyd, Elfyn
Gallie, Philip Lord, Michael
Gardiner, Sir George Luff, Peter
Garel-Jones, Rt Hon Tristan Lyell, Rt Hon Sir Nicholas
Garnier, Edward Lynne, Ms Liz
Gillan, Ms Cheryl McGrady, Eddie
Goodlad, Rt Hon Alastair MacGregor, Rt Hon John
Goodson-Wickes, Dr Charles MacKay, Andrew
Gorst, John Maclean, David
Grant, Sir Anthony (Cambs SW) Maclennan, Robert
Greenway, John (Ryedale) McLoughlin, Patrick
Griffiths, Peter (Portsmouth, N) McNair-Wilson, Sir Patrick
Grylls, Sir Michael Madel, David
Gummer, Rt Hon John Selwyn Maitland, Lady Olga
Hague, William Major, Rt Hon John
Hamilton, Rt Hon Archie Mallon, Seamus
Hamilton, Neil (Tatton) Malone, Gerald
Hampson, Dr Keith Mans, Keith
Hanley, Jeremy Marland, Paul
Hannam, Sir John Marshall, John (Hendon S)
Hargreaves, Andrew Marshall, Sir Michael (Arundel)
Harris, David Martin, David (Portsmouth S)
Haselhurst, Alan Mates, Michael
Hawkins, Nicholas Mawhinney, Dr Brian
Hayes, Jerry Mayhew, Rt Hon Sir Patrick
Heald, Oliver Mellor, Rt Hon David
Heath, Rt Hon Sir Edward Merchant, Piers
Heathcoat-Amory, David Michie, Mrs Ray (Argyll Bute)
Hendron, Dr Joe Milligan, Stephen
Hendry, Charles Mills, Iain
Heseltine, Rt Hon Michael Mitchell, Andrew (Gedling)
Hicks, Robert Mitchell, Sir David (Hants NW)
Higgins, Rt Hon Terence L. Monro, Sir Hector
Hill, James (Southampton Test) Montgomery, Sir Fergus
Hogg, Rt Hon Douglas (G'tham) Moss, Malcolm
Horam, John Needham, Richard
Hordern, Sir Peter Nelson, Anthony
Howard, Rt Hon Michael Neubert, Sir Michael
Howarth, Alan (Strat'rd-on-A) Newton, Rt Hon Tony
Howell, Rt Hon David (G'dford) Nicholls, Patrick
Howell, Ralph (North Norfolk) Nicholson, David (Taunton)
Hughes Robert G. (Harrow W) Nicholson, Emma (Devon West)
Hughes, Simon (South wark) Norris, Steve
Hume, John Onslow, Rt Hon Cranley
Hunt, Rt Hon David (Wirral W) Oppenheim, Phillip
Hunt, Sir John (Ravensbourne) Ottaway, Richard
Hurd, Rt Hon Douglas Page, Richard
Jack, Michael Paice, James
Jackson, Robert (Wantage) Patten, Rt Hon John
Jenkin, Bernard Pattie, Rt Hon Sir Geoffrey
Johnson Smith, Sir Geoffrey Pawsey, James
Johnston, Sir Russell Peacock, Mrs Elizabeth
Jones, Gwilym (Cardiff N) Pickles, Eric
Jones, leuan (Ynys Môn) Porter, Barry (Wirral S)
Jones, Nigel (Cheltenham) Portillo, Rt Hon Michael
Jones, Robert B. (W H'f'rdshire) Powell, William (Corby)
Jopling, Rt Hon Michael Rathbone, Tim
Kellett-Bowman, Dame Elaine Redwood, John
Key, Robert Renton, Rt Hon Tim
Kilfedder, James Richards, Rod
King, Rt Hon Tom Riddick, Graham
Kirkhope, Timothy Rifkind, Rt Hon. Malcolm
Kirkwood, Archy Robathan, Andrew
Knight, Mrs Angela (Erewash) Roberts, Rt Hon Sir Wyn
Knight, Greg (Derby N) Robertson, Raymond (Ab'd'n S)
Knight, Dame Jill (Bir'm E'st'n) Robinson, Mark (Somerton)
Roe, Mrs Marion (Broxbourne) Thompson, Patrick (Norwich N)
Rowe, Andrew (Mid Kent) Thornton, Malcolm
Rumbold, Rt Hon Dame Angela Thurnham, Peter
Ryder, Rt Hon Richard Townend, John (Bridlington)
Sackville, Tom Townsend, Cyril D. (Bexl'yh'th)
Sainsbury, Rt Hon Tim Tracey, Richard
Salmond, Alex Tredinnick, David
Scott, Rt Hon Nicholas Trend, Michael
Shaw, David (Dover) Trotter, Neville
Shaw, Sir Giles (Pudsey) Twinn, Dr Ian
Shephard, Rt Hon Gillian Tyler, Paul
Shepherd, Colin (Hereford) Vaughan, Sir Gerard
Shersby, Michael Viggers, Peter
Sims, Roger Waldegrave, Rt Hon William
Smith, Sir Dudley (Warwick) Walden, George
Smith, Tim (Beaconsfield) Wallace, James
Soames, Nicholas Waller, Gary
Speed, Keith Ward, John
Spencer, Sir Derek Wardle, Charles (Bexhill)
Spicer, Sir James (W Dorset) Waterson, Nigel
Spink, Dr Robert Watts, John
Spring, Richard Wells, Bowen
Sproat, Iain Welsh, Andrew
Squire, Robin (Hornchurch) Wheeler, Sir John
Stanley, Rt Hon Sir John Whitney, Ray
Steel, Rt Hon Sir David Whittingdale, John
Steen, Anthony Widdecombe, Ann
Stephen, Michael Wiggin, Jerry
Stern, Michael Wigley, Dafydd
Stewart, Allan Wilkinson, John
Streeter, Gary Willetts, David
Sumberg, David Wilshire, David
Sweeney, Walter Wolfson, Mark
Sykes, John Wood, Timothy
Tapsell, Sir Peter Yeo, Tim
Taylor, Ian (Esher) Young, Sir George (Acton)
Taylor, John M. (Solihull)
Taylor, Matthew (Truro) Tellers for the Ayes:
Temple-Morris, Peter Mr. Sydney Chapman and
Thomason, Roy Mr. Irvine Patrick.
Thompson, Sir Donald (C'er V)
Abbott, Ms Diane Butcher, John
Allason, Rupert (Torbay) Callaghan, Jim
Austin-Walker, John Campbell, Ronald (Blyth V)
Barnes, Harry Canavan, Dennis
Beggs, Roy Cann, James
Benn, Rt Hon Tony Carlisle, John (Luton North)
Bennett, Andrew F. Carttiss, Michael
Berry, Roger Cash, William
Biffen, Rt Hon John Chisholm, Malcolm
Body, Sir Richard Clarke, Eric (Midlothian)
Budgen, Nicholas Cohen, Harry
Connarty, Michael Michie, Bill (Sheffield Heeley)
Corbyn, Jeremy Mitchell, Austin (Gt Grimsby)
Corston, Ms Jean Molyneaux, Rt Hon James
Cran, James Mullin, Chris
Cummings, John Paisley, Rev Ian
Davies, Rt Hon Denzil (Llanelli) Parry, Robert
Davis, Terry (B'ham, H'dge H'I) Patchett, Terry
Dunwoody, Mrs Gwyneth Pickthall, Colin
Etherington, William Porter, David (Waveney)
Forsythe, Clifford (Antrim S) Primarolo, Dawn
Galloway, George Redmond, Martin
Gerrard, Neil Robinson, Peter (Belfast E)
Gill, Christopher Ross, William (E Londonderry)
Gordon, Mildred Rowlands, Ted
Gorman, Mrs Teresa Shepherd, Richard (Aldridge)
Grant, Bernie (Tottenham) Shore, Rt Hon Peter
Greenway, Harry (Ealing N) Simpson, Alan
Hain, Peter Skeet, Sir Trevor
Hall, Mike Skinner, Dennis
Hinchliffe, David Smith, Llew (Blaenau Gwent)
Hood, Jimmy Smyth, Rev Martin (Belfast S)
Howarth, George (Knowsley N) Spearing, Nigel
Hoyle, Doug Spicer, Michael (S Worcs)
Hughes, Roy (Newport E) Taylor, Rt Hon D. (Strangford)
Hunter, Andrew Taylor, Sir Teddy (Southend, E)
Jessel, Toby Trimble, David
Jones, Ms Lynne (B'ham S O) Wardell, Gareth (Gower)
Lewis, Terry Williams, Rt Hon Alan (Sw'n W)
Litherland, Robert Winnick, David
Livingstone, Ken Winterton, Mrs Ann (Congleton)
Loyden, Eddie Winterton, Nicholas (Macc'f'ld)
McAllion, John Wise, Audrey
McCrea, Rev William Wray, Jimmy
Madden, Max
Maginnis, Ken Tellers for the Noes:
Mahon, Alice Mr. Bob Cryer and
Marlow, Tony Mr. Ron Leighton.

Question accordingly agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House. —[Mr. Robert G. Hughes.]

Committee tomorrow.

Madam Speaker

Order. Before we begin the Adjournment, I ask those hon. Members who are handing in amendments to the Bill to do so in good order. The Clerk has one hand only with which to take them. If hon. Members were to read the report of the Select Committee on Procedure, they would know that the Clerk can receive the amendments with one hand only because he has a pen in the other.