HC Deb 24 November 1992 vol 214 cc758-843

[Relevant documents: European Community Documents Nos. 6027/92, relating to outside staff and transfer of administrative appropriations from Part B to Part A of the Community Budget, 8286/92, relating to the fight against fraud against the Community Budget in 1991, the unnumbered Explanatory Memorandum submitted by H.M. Treasury on 13th March 1992, relating to discharge of the 1990 Community Budget and Court of Auditors' Special Report No. 2/92, relating to export refunds paid to selected major traders in the milk products sector; also the Memorandum submitted to the Foreign Affairs Committee by the Secretary of State for Foreign and Commonwealth Affairs on Prospects for the Edinburgh European Council.]

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

On 2 July we debated the agenda for the British presidency, which I outlined to the House. I said that it was an ambitious programme containing six key elements: GATT; the completion of the single market; the future financing of the Community; enlargement; subsidiarity; and the Danish proposals on the Maastricht treaty. We have made progress on all those matters and we want to make that progress decisive when the European Council meets at Holyrood house on 11 and 12 December.

The Edinburgh meeting will have one of the heaviest agendas of any European Council in recent years. About one third of the Councils scheduled for our presidency will be held in the next four weeks. Foreign and Finance Ministers will meet this Friday, 27 November, and Foreign Ministers will hold a further conclave on 8 December. Meetings are not magic, but, alas, they are a condition of progress.

The past five months represent one of the most turbulent periods in the Community's history. We have experienced the general economic downturn across the world, the stormy French referendum, the volatility of the currency markets, the GATT dispute and instability in the east of our continent.

Out of the list of matters that I mentioned in July for our work programme, two massive achievements for Europe and for Britain are now emerging as reality—not yet secure but increasingly clear. I mean, of course, a GATT agreement and the completion of the single market. Both are the culmination of the work of several years.

Mr. David Shaw (Dover)

My right hon. Friend will be aware that, in connection with the single market, 3,000 freight forwarders and customs clearance agents, many of them in my constituency, are likely to lose their jobs between 31 December and April next year. Can my right hon. Friend confirm that on the agenda for the Euro-summit in Edinburgh are measures advanced by the European Commission, which I hope will be supported by the British Government, to give assistance to members of the freight forwarding and customs clearance industry in Dover?

Mr. Hurd

There is a retraining programme, which was discussed yesterday by Finance Ministers. I shall ask my right hon. Friend the Minister of State to give my hon. Friend further precise information about it. My hon. Friend is on to a good point about something which is, indeed, part of the programme.

I was talking about the two massive achievements now coming into sight—the GATT agreement and the completion of the single market. If we can bring them to reality they will substantially contradict the theory, which one now reads all the time, that the age of reasoned co-operation is gone and that Europe and the world are sinking into inevitable disorder and slump. If the GATT agreement or the completion of the single market were to fail, we would be closer to a dark age.

The Munich Group of Seven summit and the Birmingham European Council both called for the GATT agreement to be concluded by the end of the year. We are nearer to that goal than those who set it probably expected at the time. The House knows of the agreement on 20 November by the European Commission negotiators and their American counterparts on a range of outstanding differences. The Commission gave its unanimous backing to the agreement last Friday.

My right hon. Friend the President of the Board of Trade made a statement about the agreement to the House yesterday, so I need not go into detail, but the way is now clear for negotiations to resume in Geneva among all parties to the GATT. Senior negotiators are meeting there today and tomorrow to fix the timetable for completing that work. I do not think that a final settlement will he ready by the time of the Edinburgh Council, but I am sure that the Heads of Government will welcome the progress that has been made towards the aim that they set in Birmingham of reaching a settlement this year.

The agreement is clearly in the interests of both Europe and America. We have not been asked to make some artificial choice between Europe and the Atlantic. With our encouragement, during our presidency the Commission has negotiated on behalf of Europe. The relationship with the United States is of critical importance to the Community, as they have guaranteed our security for half a century and their presence in Europe remains vital. However, Europe must define itself on its merits and not by excluding our American allies. That is why one of the most important events in our presidency will be the EC-US summit in the second half of December, at which my right hon. Friend the Prime Minister will represent the Community.

The second great achievement on the way is the biggest free trade project in history—the single market. It is much more ambitious than the creation of a conventional free trade area, with about 300 pieces of common legislation to replace thousands of national regulations and with common competition rules to govern the market. It will expand opportunities for British business and British consumers and should mean lower prices, increased efficiency and the end of routine border controls for goods.

Inherent in the single market is a large extension of freedom for our citizens. For example, 11,000 British students are studying under the European Community action scheme for the mobility of university students—the ERASMUS programme—in other Community countries. During coming years there will be a steady fall in air fares, which will make travel cheaper and easier. That is what we sometimes call the "citizens' Europe".

Those are the detailed measures which will make sense of the Community in the eyes of practical people. We must ensure that business and citizens know about, and take advantage of, the many benefits and opportunities that the single market will create.

Mr. Dafydd Wigley (Caernarfon)

Does the Secretary of State accept that what ordinary citizens are looking for most is to find work in a Europe where unemployment is increasing? In view of the trend during the past few months for the public sector borrowing requirement to increase in Britain, and the fact that Mr. Delors said that a massively reflationary kick-start package might be put forward, does the right hon. Gentleman accept that it might be increasingly difficult for us to meet the long-term aim of the Maastricht treaty, which is that there should be a 3 per cent. limit on the amount of gross domestic product allowed to go to the PSBR?

Mr. Hurd

I do not agree, but, before I close, I shall come to yesterday's discussions on the issue that the hon. Gentleman mentioned.

The completion of the single market has been central to our presidency. We were in the forefront of those who designed the project and we intend to bring it to fruition. Political agreement has been reached on a series of directives to do that: on value added tax, and excise duties; on life insurance; on pharmaceuticals; and we shall be looking for agreements on Community trade marks, and on animal and plant health, which are the last agreements necessary.

Completing the single market is not an exact science. Some of the measures in the original White Paper by Lord Cockfield are now given a lower priority, while others that were not in the White Paper have been carried through. We have not seen the end of the liberalising of areas such as telecommunications and parts of the energy market, but we believe that it will be possible to declare at the Edinburgh Council the single market open for business on time at the end of the year.

Sir Nicholas Fairbairn (Perth and Kinross)

Does my right hon. Friend believe that we have simplified all of those matters? Can he explain why the papers for today's debate, which is only a "take note" motion, weigh 4.6 kg?

Mr. Dennis Skinner (Bolsover)

What is that in pounds?

Sir Nicholas Fairbairn

I was translating for the benefit of the Europeans.

Is my right hon. Friend further aware that, having read them, I do not believe there is a lawyer in the House, far less a human being in Europe, who understands them? if he seriously thinks that this is all about a love-in between people, may I ask him to say what France is about?

Mr. Hurd

The weight of paper derives from the demands of the House to have a proper care for what is going on. What we are dealing with, and what my right hon. Friend will deal with in detail when replying to the debate, is the future financing of the Community, all aspects of its expenditure and the budget for next year, and I accept that such matters in any organisation give rise to weighty documents. I am delighted that my hon. and learned Friend has mastered them and I hope that he will tell us about them later. I assure him that the weight of documents derives from the enthusiasm of the House to keep an eye on what Ministers do in the Council of Ministers, in particular in deciding how much of our money the Community should spend.

I was dealing with the single market. We have been talking about the virtual completion of the legislative phase, but we go on to the phase of compliance, enforcement and access for redress for those who run into difficulties in exercising their rights.

Dame Elaine Kellett-Bowman (Lancaster)


Mr. Hurd

I will give way to my hon. Friend and then I really must make progress.

Dame Elaine Kellett-Bowman

Is my right hon. Friend aware of the rumour that in future we shall take almost as relaxed a view as is taken by our southern counterparts towards the implementation of regulations and directives?

Mr. Hurd

I am aware of the rumour to which my hon. Friend refers, but I am certainly not in favour of the relaxed implementation of rules. When rules are agreed —they need not of themselves be greatly detailed—they should be implemented. That is one reason why—

Mr. Nicholas Budgen (Wolverhampton, South-West)


Mr. Hurd

I said that I would try to make progress. As I was saying, that is one reason why the CBI recently emphasised the importance of ratifying the treaty of Maastricht.

Mr. Budgen


Mr. Hurd

I have given way several times. I promise to give way to my hon. Friend later.

The treaty will, for the first time, equip the European Court of Justice with the teeth needed to ensure that member states live up to the obligations that they assume. That element is fundamental in establishing the level playing field in Europe which every British company says that it wants.

Mr. Budgen

Is my right hon. Friend aware that there was an authoritative leak in The Times[Interruption.] —or it may have been in The Daily Telegraph, to the effect that a Minister had stated that it would be the policy in future of the British Government to take a southern European attitude towards the implementation of law? That sort of behaviour would be likely to spin off into a disregard of British law as well.

Mr. Hurd

I always thought that my hon. Friend was an opponent and critic of bureaucracy. What we are aiming at, in relation to what he quoted, are cases where officials in Whitehall take decisions made in Brussels and carry them through in excessive detail. That is known in the jargon as Bookerism, after the journalist who identified that ill. Christopher Booker is strongly against the European Community, but, being an honest journalist, he has spotted that much of the regulation is derived not from the Community but from the itch of Whitehall to insert its own bureaucratic instincts into the process. I am grateful to my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) for enabling me to make the point clear.

Several Hon. Members


Mr. Hurd

I really must get on, because many hon. Members wish to speak.

Dr. John Cunningham (Copeland)


Mr. Hurd

This must be the hon. Gentleman's speech.

Dr. Cunningham

I have heard of the seven-year itch —as the right hon. Gentleman is referring to the itch in Whitehall—but this is a 14-year itch. The Conservatives have been in office for 14 years. Have they suddenly discovered that the problem exists in Whitehall?

Mr. Hurd

If, in the fulness of time, the hon. Gentleman assumes office, he will know that the itch is permanent —that there is always an instinct among energetic and ambitious officials to push regulation and control that extra inch. It is an itch which Labour Members have constantly encouraged, which is one reason why they are always rejected by the British people.

I have referred to the two big achievements that are on the way. The third issue is the future financing of the Community. A review in that context would have been necessary, with or without Maastricht, and the Paymaster General will say more about that when he replies to the debate. I wish to comment on the review of financing.

The Community budget amounts to about £45 billion, which is about 2.2 per cent. of general government spending in the Community. Britain is the second largest net contributor after Germany. We are expected to make a net contribution of about £1.7 billion, after our rebate, in the present calendar year. France is also a net contributor, with Italy now broadly in balance.

We have made some progress in the negotiations since the Commission first tabled its proposals in February. Our aim is to reach a settlement at Edinburgh, though that will not be easy. Several member states have, unsurprisingly, sought to challenge the United Kingdom abatement. We have made it clear to our partners—firmly, though I hope quietly—that we shall not accept any adverse change to it. My right hon. Friend the Chancellor did that again yesterday and on the radio this morning.

Maintaining our abatement remains an overriding objective. It is a manifesto pledge. It can be altered only by unanimity, and if others persist in challenging aspects of it, there will not be an agreement. The House may recall how ambitious—

Mr. George Robertson (Hamilton)


Mr. Hurd

I hope the hon. Gentleman will forgive me for not giving way. I really must get on.

Mr. Robertson

I have a most important point to raise with the right hon. Gentleman.

Mr. Hurd

Very well, and then I shall have to make progress.

Mr. Robertson

In the light of what the right hon. Gentleman said in absolute terms in relation to the British abatement—this is an extremely serious matter—may I remind him that what the Chancellor of the Exchequer said on the Radio 4 "Today" programme was not what the Foreign Secretary just said? The Chancellor said that "no serious or significant" change in the British abatement would be acceptable. That is not what the Foreign Secretary said. Is the British abatement negotiable, or is it not?

Mr. Hurd

The hon. Gentleman should not be reduced to such pettifogging. There was a technical change in 1988 which did not affect adversely the United Kingdom rebate.

If the way in which the Community spends or raises its money is altered, there may be technical changes. But we are against and will resist any adverse impact an our abatement.

The House will recall how ambitious were the Commission's proposals for increasing the size of the Community budget. The original Delors 2 package envisaged a real-terms increase in Community spending of about £7.5 billion in 1997, over and above the level implied by the present ceiling. Some people presented that as the inevitable bill for Maastricht, but Maastricht also emphasised the principle of sound public financing. That means the Community cutting its coat according to its cloth, which means setting priorities.

We have seen some evidence of that as the proportion of the budget devoted to agriculture has been squeezed, from about 80 per cent. in the 1970s to 58 per cent. now. But there is much more to do. We have made it clear to the Commission, as the Prime Minister told the House, that its proposals are excessive and that we cannot support them. In present economic circumstances, when many member states are suffering from recession or are undertaking painful retrenchment, we cannot be expected to agree a package which implies a rate of real growth in Community spending way above what is planned domestically.

There was a time when that point of view, which is familiar to the House, was not familiar to the Community; it was regarded as something rather puritanical hatched in the British Treasury. But now there is a concerted view among not all, but most, member states and, in response to that, the Commission has scaled down its proposals. Some member states now see them as too niggardly, but we and others believe that they are still in excess of what the Community can afford. We are looking for a further substantial reduction in the Commission's figures for increasing own resources.

Enlargement was the fourth of the six subjects that I mentioned, so I am about halfway through.

Preparations for negotiations with Austria, Sweden and Finland have gone ahead. Switzerland has submitted its application and the Norwegian Prime Minister, Mrs. Brundtland, will be in London tomorrow to present Norway's application for full membership to my right hon. Friend the President of the Council. At Edinburgh we will submit a report on the completion of those preparations for enlargement within the Community. We need to decide at Edinburgh—there is a background to this on which I gave evidence to the Select Committee yesterday— when negotiations on enlargement, either formal or informal, can start. Our view is clear; we must maintain the impetus that we have helped to create.

The countries of central and eastern Europe are going through a period of enormous change and dislocation. One reason why I am so keen on trying to get progress on these Community matters at Edinburgh is that we really must have more time and energy in 1993 to analyse and act on the problems in the eastern half of our continent, including Russia, where the stakes are now formidably high. I do not think that the House, this country, the Community or the world is paying enough attention to what is going on and what the stakes are in Russia and, therefore, in the rest of the former Soviet Union and the rest of eastern Europe.

As regards the Visegrad 3—Hungary, Poland and Czechoslovakia—we have made good progress during the presidency. We hope to welcome them to full membership around the turn of the century, but meanwhile we are setting the pace. A meeting between the Community and those three countries was held at Foreign Minister level in October and the Prime Minister held a summit meeting with them in London on 28 October. The Commission will report at Edinburgh on strengthening co-operation with Hungary, Poland and Czechoslovakia. We also plan to sign association agreements between the Community and Romania during December.

Certainly we need to be pragmatic, but we need to be generous, in particular in giving those countries of eastern and central Europe access to the Community market. Together and individually as member states, we are providing aid. Although I know the difficulties in special cases, such as steel, I believe that our policy must be to help them trade their way to prosperity.

Sir Russell Johnston (Inverness, Nairn and Lochaber)

The right hon. Gentleman anticipated my question. Does he agree that the Visegrad countries have every reason to complain that, while there has been a lot of generous talk about them, access for their goods, particularly agricultural goods, has been rather cheeseparing?

Mr. Hurd

I agree with the hon. Gentleman that it is a bit negative. I have said this before: we will press for further access, but a beginning has been made. The association agreements are a beginning and the trading parts of those agreements are already in place. The hon. Gentleman and I agree on the substance of the matter.

My next points are subsidiarity and openness. By the end of this year, 10 member states expect to have ratified the Maastricht treaty. The House will shortly be invited, in the light of our recent debate, to start the Committee stage of the Bill. The process of ratification has acted as a lightning conductor for general public concerns about the pace of European integration and the centralising tendencies of the Brussels machine. Those anxieties have to be listened to—as they have been—and addressed.

The Birmingham summit took note of the concern. The Birmingham declaration emphasised, in a way that it would not have done a couple of years earlier, the importance of national identity and the need for those who argue for Community action in specific instances to show why an objective cannot be achieved satisfactorily at the national level. The burden of proof will be shifted and no longer will Community action be seen as an end in itself, as it often has been over the past 35 years.

I hope that hon. Members who are interested in the issue will study the Commission paper on subsidiarity and the procedures that it will use to weed out proposals that fail the tests in article 3b of the treaty.

The Commission has already reduced its legislative proposals this year from the planned 118 to about 50—compared with about 150 in each of the last two years. That is partly because of progress with the single market, but partly because of the change that is taking place in the way in which the Community is operating. The Commission's paper, which I have mentioned, sums it up as follows: A first consequence of the subsidiarity principle is that national powers are the rule and the Community's the exception. That is the analysis of the European Commission.

It is quite contrary to the nightmares to which the right hon. Member for Bethnal Green and Stepney (Mr. Shore) so passionately adheres, but he had some right on his side and there are still people who would not agree at all with what the Commission is saying there. There are still people who believe that Community action is a virtuous thing in itself, but they are on the defensive, as these papers show.

We look forward to decisions at Edinburgh on procedures and criteria for applying the subsidiarity test. I believe that, once adopted and reinforced by the legal underpinning of the treaty, that will radically change the way in which the Community operates. That radical change is what the Select Committee clearly felt was necessary. At Edinburgh, the Commission will also bring forward examples of the sort of legislation that should be knocked off the statute book: rules that should never have seen the light of day.

We have not yet completed it, but we are trying to create a political fact—a change in the way in which the Community operates, in advance of the legal obligations under the treaty. I believe that those who still see Britain as beleaguered in resisting an inexorable movement towards a super-state are mistaken about the way the tide is flowing.

I listened to Chancellor Kohl talking to students in Oxford a fortnight ago. He said about the treaty: We have not laid the founding stone for a European Super-State which reduces everything to the same level and blurs the differences. Rather we have committed ourselves to a Europe constructed on the principle of 'unity in diversity'. We must do everything we can in future to shape European policy in such a way that people can identify with it more easily. They must see that it is concerned with their interests and not with a technocratic Europe, far removed from the people. Those are the words of the German Chancellor, which I think that every hon. Member would happily echo.

Mr. Alex Salmond (Banff and Buchan)


Mr. Hurd

I think that I know what the hon. Gentleman is going to ask, but let him ask it anyway.

Mr. Salmond

I am very glad; I wish that I knew how the Foreign Secretary will reply. Let me ask the question. Is the Foreign Secretary going to say nothing whatsoever about the application of the principle of subsidiarity in the state of the United Kingdom?

Mr. Hurd

I will say two things. The Birmingham declaration makes it clear that that is a matter for member states and, with regard to the policy of the Government, we are leaping over the kind of old-fashioned plans that the hon. Member and his party have. We are seeking to bring the decisions closer to the people in the way in which hospitals, schools and other institutions are run—much closer than anything that the old-fashioned nationalist parties ever had in mind.

Several Hon. Members


Mr. Hurd

No, I must get on. I have created a hubbub, but I do not wish to continue with it.

Sir Peter Tapsell (East Lindsey)


Mr. Hurd

I will give way to my hon. Friend a little later.

Sir Peter Tapsell

It is on subsidiarity.

Mr. Hurd

Very well.

Sir Peter Tapsell

My right hon. Friend, in his very persuasive way, has just summarised a much more attractive concept of subsidiarity, which, if it could be embodied in the treaty, would relieve a lot of anxieties. Since we are told that the treaty cannot be amended, how will his new concept and definition of subsidiarity be able to replace article 3b in a justiciable and enforceable form?

Mr. Hurd

It is written in article 3b. What I have said simply illustrates how 3b will work in the future and how we are trying to create it now as a daily fact in the life of the Community, even before the article is a legal obligation on anybody. The three paragraphs of 3b encapsulate what I have been saying. I have been describing what we are trying to achieve now in the work of the Commission, the Council and eventually the Parliament.

In Birmingham, the Foreign Ministers were asked to find ways of opening up the Community's work to greater scrutiny. I sometimes feel like a nutcracker at work on a particularly stubborn nut. We want to make the Community's operations more comprehensible and national Governments more accountable to their Parliaments. That involves greater openness on issues such as voting records or letting cameras into important guidance debates on major proposals. It is not proving easy to get agreement among the more buttoned-up members of the Community on that matter. However, the latest news is slightly more encouraging and I expect a solid start to be made on the question of openness in Edinburgh.

Mr. Geoffrey Hoon (Ashfield)

Will the Secretary of State give way?

Mr. Hurd

No. I am sorry, but I must proceed with my speech because my voice is giving way and other hon. Members want to speak.

The Birmingham declaration also committed member states to make a bigger effort at explaining how the Community works and its relevance. My hon. Friend the Member for Wolverhampton, South-West enabled me to deal with the question of excessive bureaucratic zeal in Whitehall and I need not repeat the point that I made in answer to him. The press often pillory the Community for half-baked and stupid ideas—they are sometimes right, but they are often wrong. That is why we have circulated a paper to hon. Members on "Euromyths"—there is a big demand for that paper—and published a guide to British membership of the Community and the implications of the treaty. In just over a fortnight, we have dispatched 239,000 copies of the booklet and a reprint has been ordered, so hon. Members should place their orders now.

The final main point of the original work agenda is the question of Denmark and ratification. We now have the proposals put forward by the Danish Government, backed by seven of the eight parties in the Folketing—the basis on which the Danes could, in the view of those parties, put the treaty, suitably clarified and amplified, to a second referendum.

The Danes put a lot of weight on some of the points that I have mentioned, including subsidiarity and openness. They want a position on European monetary union broadly analagous to that which my right hon. Friends the Prime Minister and the Chancellor obtained for this country. Their concerns focus on stage 3, citizenship, defence, and the interior and justice pillar. The Danish Foreign Minister has just completed a tour of capitals explaining his requirements. I spoke to him on Sunday evening, and we shall remain in close touch with him and our other partners.

It is clear that no other member state will accept the reopening of the treaty, and the Danes do not seek a renegotiation. It falls to us as President of the Community to find an arrangement acceptable to all member states, taking account of the stated Danish requirement for a legally binding outcome. We are working on that—we are drafting and discussing it—but it is too soon to speculate on the precise nature of the answer. We shall have a special meeting of Foreign Ministers to discuss it on 8 December. We are all committed to achieving a solution, which is essential if the treaty is to come into effect. We are condemned to succeed in solving the problem if there is to be a ratified treaty, and I hope that we shall reach agreement on that in Edinburgh.

An hon. Member has already asked about the economic position in the member states of the Community. Concern is growing in most, if not all, member states about the weakness of economic activity. In the past six months, activity has turned out weaker than we or others expected. Business and consumer confidence have diminished, unemployment has risen and, at the same time, inflation has fallen. Overall in the Community, economic growth this year is unlikely to be above 1 per cent., and next year is likely to see a similar picture. That is a substantial change from the outlook only a few months ago, when an early return to normal rates of growth were widely expected. Growth prospects in the United States and Japan are modest.

Against that background, the British presidency, and particularly my right hon. Friend the Prime Minister, believe that it is vital to have a full discussion of economic developments at the Edinburgh Council. We have already responded to those challenges, particularly in the autumn statement, with measures that will boost confidence, promote recovery and protect capital spending in the context of a framework of low inflation and prudent finance.

Mr. Tam Dalyell (Linlithgow)

During those economic discussions, especially as they will take place in Scotland, can there be some serious discussion among Heads of Government on the future of the nuclear programme, because many of us are extremely worried about the Dounreay decision, which will last for some 30 or 50 years? As we have been the leaders in all that, is it really wise to call a halt to remarkable British developments? Can that matter be on the agenda?

Mr. Hurd

I cannot promise that, but I shall ensure that the hon. Gentleman's point is passed on.

I was referring to the autumn statement. We need to consider now what action member states should take, both individually and at Community level, to hasten recovery and strengthen growth. Those measures include opening markets—I have already mentioned the GATT round and the single market—giving priority to capital spending in national budgets, rigorously controlling wage costs in the public sector and improving the supply side of our economies. At Community level, there should be a role for the European investment bank to provide more loans and guarantees to support investment spending, especially on projects such as the trans-European network. There will be a discussion in Edinburgh, which is the basis on which we believe that it can best take place.

Mr. Anthony Steen (South Hams)

My right hon. Friend mentioned 1 per cent. growth across Europe and the rumour that we would take a more relaxed view towards implementing regulations. Does he agree that, if we do not take a relaxed view towards implementing regulations and curb the rigorous approach of the civil service, which has helped to destroy many small firms in this country by pursuing rules and regulations far beyond how they were originally devised, many small firms will get into even more problems? I should like to hear how the enthusiasm of officials, whether in Europe or in this country, could be curbed.

Mr. Hurd

I agree with my hon. Friend. When rules, for example on the single market—many rules are designed and encouraged by British firms—are agreed, they must be honoured. That must be right and the strengthening, enforcement and penalties for neglect are contained in the treaty. A fine example of our concern is where Whitehall adds its "extra". Many of the complaints, which are often attributed by people in local papers to the European Community, are a result of that Whitehall and town hall extra. My hon. Friend is right, and the Prime Minister touched on the matter in a speech in Brighton in October. My right hon. Friend the President of the Board of Trade intends to ensure that this country does not add that Whitehall or town hall extra to agreed rules.

There has been recent criticism from the Community, echoed by the Opposition, about the British presidency. I hope that, if the hon. Member for Copeland (Dr. Cunningham) has time to alter his speech before he makes it, will be careful about that. The wildest remarks, which he may be about to quote, came from people in Paris, who, understandably, were in political difficulty about the GATT agreement in the past few days, even though the Commission and not the presidency was negotiating on behalf of Britain. We should make allowances for such remarks, even though they were well off target.

A more consistent line of criticism of the presidency is aimed at the relatively slow process of taking the Maastricht legislation through the House. The Opposition know all about that, and they are the last people entitled to criticise us about it. Those who have taken the trouble to study the realities of parliamentary life in this country now have a good understanding of the position. They know, as the hon. Member for Copeland will have learnt from the Germans when they came, that we have settled on a course on which we are likely to be successful.

I have spoken of the massive achievements now emerging as a result of the GATT negotiations and the coming completion of the single market. The other problems at Edinburgh are formidable—they sometimes seem more so because they are linked. I think that the linkage gives us grounds for hope. The Community and the world are passing through a time of exceptional turbulence. Most of the main trading countries suffer from stagnation or recession. In many of them, there is distrust, not just of the Government in power, but of the political system and structure. We see that in Europe and beyond. The Labour party is one of the few opposition parties not to have benefited from that feeling, for reasons that need not detain us today.

In order to extricate ourselves from those difficulties —which people can now see more clearly and about which they are more concerned—we need two things. We need an effort of will and an effort of persuasiveness—one without the other will not do. I do not pretend that in Edinburgh we shall solve, in detail, all the problems that I have mentioned, but I hope that we can show, between now and the end of the year, a determination in Europe to pass from argument—which is not a bad thing—to coherent action by the Community in the direction for which we in Britain have long argued and which Europe clearly needs.

I beg to move, That this House takes note of the White Paper on developments in the European Community, January to June 1992 (Cm. 2065), European Community Documents Nos. 9649/92, relating to the principle of subsidiarity, 4829/92 and 5201/92, relating to Commission proposals for the finances of the Community to 1997, 5202/92, relating to the system of Own Resources, 5203/92, relating to renewal of the Inter-Institutional Agreement on budgetary discipline and improvement of the budgetary procedure. SEC (92) 1412, relating to the United Kingdom abatement, 8567/92, relating to establishment of a Cohesion Fund, COM (92) 140, relating to the Preliminary Draft Budget of the European Communities for 1993, 7933/92, relating to Letter of Amendment No. 1 to the Preliminary Draft Budget, 8209/92, relating to the Draft Budget, 9901/92 and the proposals described in the unnumbered Explanatory Memorandum submitted by H.M. Treasury on 19th November, relating to the European Parliament's proposed amendments and modifications to the Draft Budget, 6569/92, relating to the Court of Auditors' Opinion No. 2/92, the Annual Report of the Court of Auditors for 1990, the negotiating approach adopted by Her Majesty's Government in the run-up to the Edinburgh European Council on 11th to 12th December and the Government's continuing efforts to secure budgetary discipline and value for money from Community spending.

5.14 pm
Dr. John Cunningham (Copeland)

1 beg to move, to leave out from '1990' to the end of the Question, and to add instead thereof: 'but regrets that the British Presidency of the European Community, which has almost ended, has achieved so little for Britain and for the Community; deplores the fact that the Government has persistently refused to put growth and employment at the top of the EC agenda, has damaged the United Kingdom's standing by its inept handling of the British currency crisis, has produced no clear way forward on the Community's future financing, has made little real effort to solve the Danish problem, has produced confusion on its own ratification timetable, and has shown insufficient resolution on the problems of former Yugoslavia especially in regard to rising numbers of refugees and in enforcing United Nations mandatory sanctions; believes as a consequence that Britain's influence and authority in the European Community has been markedly reduced; and calls for a new direction to be taken by Her Majesty's Government in order that Europe's crucial problems are properly addressed at the Edinburgh European Council.'. I am glad that the Foreign Secretary remembered to move the motion, or I would not have been able to move the amendment.

As I listened to most of the speech of the Foreign Secretary, I thought that, with his great experience and aplomb, he was going to skate over most of the more serious events in the European Community of the past few months, without acknowledging any problem or any issue that had caused trouble. Until the last few moments of the right hon. Gentleman's speech, it seemed as though all was for the best in the best of all possible worlds, and we were moving, unanimously and with great support across the Community, to the Edinburgh summit. As the right hon. Gentleman well knows, the reality in Europe is not like that.

To be kind, the British presidency has been an almost unmitigated disaster—many people have said much worse things about it than that. It was launched with a great fanfare, and was an excellent opportunity for Britain and Europe. The developments on enlargement may well mean that this is the last opportunity this century for Britain to hold the presidency. By the time our turn comes again, it is likely to be a different Community, in both membership and nature.

Without being unduly critical of the right hon. Gentleman, I feel that the opportunity has been largely wasted by Her Majesty's Government. Our presidency has certainly done nothing to enhance Britain's reputation in Europe during the past six months. I shall quote what the Prime Minister said of his hopes for Europe and the British presidency: Our membership of the European Community is about peace, stability, investment, jobs and prosperity. Those were among the Prime Minister's objectives on assuming the British presidency, and few, if any, would disagree with him.

Sir Christopher Prout, leader of the Conservative group in the European Parliament, was even more optimistic about the British presidency. In The House Magazine on 29 June this year, he said: I suspect that future historians will see it as a happy stroke of fortune that Britain was called upon to guide the Community through the choppy waters of ratification for Maastricht. He was rather wide of the mark, but continued: Might not the British acquire, over the next six months of their Presidency, a taste for running Europe, rather than simply running it down'? I fear that Sir Christopher has been sadly disappointed in his hopes for the British presidency, as the reality has turned out to be something different.

As the Foreign Secretary properly said, the British presidency also had the following aims for progress: development of the ratification of the Maastricht treaty; a solution to the Danish problem and subsidiarity; enlargement of the Community; strengthened links with the new democracies in central and eastern Europe; an end to the suffering in the former Yugoslavia—sadly and regrettably. the right hon. Gentleman did not even mention that in his speech today—and a successful conclusion to the GATT talks.

The 10 objectives set out by the Government were peace, stability, investment, jobs and prosperity, and those that I have just listed. How have the Government fared? How did they measure up to their own stated objectives? Very badly. As publishing league tables of results is in vogue at present, I shall ask where the Government come in the league table of their own tests.

The first test is that of stability. Economic stability has gone down the drain during the period of the British presidency of the European Community. We have seen devaluation, and we have come out of the exchange rate mechanism. Investment has, sadly, reduced during the period of the British presidency. Unemployment has risen dramatically: 51 per cent. of the rise in unemployment in Europe, to August 1992, occurred in Britain. Can anyone say that prosperity has improved during the British presidency?

The right hon. Gentleman seemed sanguine about subsidiarity, but the position is remarkably confused. There is apparently some agreement in the House about enlargement, which has been stalled as the right hon. Gentleman and the Prime Minister accepted in Lisbon that enlargement should not proceed until the Maastricht process and the Delors 2 package had finally been agreed among the Twelve. A continuing and appalling tragedy is unfolding in the former Yugoslavia, and very little progress has been made on establishing better links with central and eastern European democracies.

Significant progress has been made in the GAIT talks, which I acknowledge and to which I pay tribute. I welcome the successful outcome, which was important and which —I agree with the Foreign Secretary—goes far beyond the boundaries of the European Community and the United States of America. The final accord still needs to be sealed, but it is essential that it is sealed, not just for the rich and prosperous countries of the west but for the many poor countries in the developing world, for whose continued existennce a GATT agreement is so important. On a test against the benchmarks set down by the presidency, I give the Foreign Secretary a score of one out of 10.

Mr. Gyles Brandreth (City of Chester)

The hon. Gentleman anticipated my intervention. Who would he rather was in the presidency? Would it have been France? If it had been France, would we have had what happened last week? The hon. Gentleman is absolutely right: this has been about leadership. Prosperity is about GATT. and GATT has been delivered, thanks to the leadership offered by my right hon. Friends the Foreign Secretary and the Prime Minister. If it had not been for them, we would not have had it.

Dr. Cunningham

The obvious answer to the hon. Gentleman's intervention is that I would rather have seen a British Labour Government holding the presidency. Failing that, I would rather have seen this British Government making a better success of the presidency in the interests of Britain and the Community.

The British presidency has been variously described as a fiasco and the worst that many of our European partners can recall; more objective observers have called it a disaster. In the debate on 2 July, the Foreign Secretary likened his task to pushing stones uphill. Obviously, many of them have rolled back down on top of him in the last few months and squashed him, and his aims and objectives, flat.

Most of Britain's European partners will be delighted when the British presidency ends. I suspect that the Foreign Secretary will secretly share their pleasure and relief. He will probably have a quiet drink on 31 December, not just to herald 1993 but to see the back of the burdens which he has been carrying—badly, unfortunately. That has not been all his own fault, because the Prime Minister and the Chancellor of the Exchequer are far more culpable.

Mr. Stephen Milligan (Eastleigh)

Speaking in the House two weeks ago, the hon. Gentleman made a point about lack of leadership. Would it not have immensely strengthened the British presidency, Britain's credibility in Europe and our support for the Maastricht treaty if the Opposition had been true to their principles and supported the Government on the ratification of the treaty?

Dr. Cunningham

That is a spurious intervention, on two counts. First, we made it clear from the outset that there was no Labour principle in supporting a treaty which contained opt-outs that we could not support. So the idea that we had principled support for the treaty is completely misreading the facts.

Secondly, as we have rehearsed many times, and as we learned the day after that debate, it was not about the ratification process. We learned that the hon. Member for Great Yarmouth (Mr. Carttiss) went into the Lobby to support the Government at the last moment only because he was told that the Third Reading would not be until after the second Danish referendum.

We saw the leader of the Liberal party conned into the Lobby in support of a discredited Prime Minister, in the belief that somehow the vote was about the principle and about accelerated consideration of Maastricht. We know that that was not so. Since the Bill is returning to the House at the earliest next week, we know that the great difference between our amendment and the Government was a matter of 14 days—two weeks. Does anyone really believe that it was worth it for that minute difference? So no principles were betrayed; we stood by our position then, and we stand by it now.

Curiously, the Government have obstinately refused to put economic recovery in Europe among their priorities for their presidency or even on the agenda for the summit. They were asked to put it on the agenda for the emergency summit in Birmingham, and they declined. They have been pressed again to do so, and I hope that the matter is finally on the agenda for Edinburgh, but there is doubt and confusion even about that.

It is all very well talking about more freedom to fly in the European Community, and about cheaper air fares. That is all over the heads—literally as well as practically —of the 16 million people in Europe who do not have a job, let alone an airline ticket. It is an updated, high-tech version of the advice of the Foreign Secretary's former colleague—former friend, I almost said, but that may be more accurate than might be believed—Lord Tebbit, when he told people to get on their bikes. Now they have to get on their aeroplane, but they would like jobs and some income before they can be persuaded that cheaper air travel in Europe is a great benefit for them and their families.

Mrs. Edwina Currie (Derbyshire, South)

I should like to understand the hon. Gentleman clearly, as a large number of my constituents work at East Midlands airport. Is he saying that it is now Labour party policy not to have any interest in cheap air fares? Does he realise that, if more people fly, as is bound to be the case if air fares come down, more people will have jobs working in that industry?

Dr. Cunningham

I am not saying that at all. I give the hon. Lady full marks for ingenuity in her intervention, but, as she knows, that is not what I said, and that is not the implication that she or her constituents should draw from my remarks. I do not want any misrepresentation on that point in the local press in Derbyshire in the next few days.

For five months of the British presidency, there has been no action on economic recovery in Europe, in spite of support from the Commission. Yesterday, there was a briefing at 10 Downing street at which journalists were told that that was the big new issue; an autumn statement for Europe, no less, was the objective of the Prime Minister and the Chancellor of the Exchequer. It was big news. The BBC fell for it, with 10 minutes on the 9 o'clock news last night devoted to it.

Today, within 24 hours, the Chancellor of the Exchequer was pouring cold water all over the proposed new spending package. Again the result is confusion in Europe, not least because there is confusion in Britain too. If 10 Downing street and 11 Downing street cannot get agreement on what the supposed package is about, no one should be surprised if our colleagues in the European Community are not only confused but dismayed yet again.

Mr. Giles Radice (Durham, North)

Is it also the case that the President of the European Commission suggested to the British presidency that it might care to put the issue of jobs on the agenda of the Birmingham summit, but that the British presidency did not want it there?

Dr. Cunningham

My hon. Friend is absolutely right. I regret the abdication of responsibility by the British presidency on that matter.

Mr. Hurd

The hon. Gentleman has said that twice. It does not become any truer because he is supported by his hon. Friend. There was a discussion at Birmingham, and there were conclusions at Birmingham. There will be a discussion at Edinburgh.

Dr. Cunningham

It is funny that there was no mention of it in the declaration from Birmingham, and that no action has ensued.

We firmly believe that there should be Europewide measures on employment, job creation, investment in transport and infrastructure, and measures for industrial regeneration and investment too.

In contrast, the British presidency proposes a reduction of 13 per cent. to 15 per cent. in the research and development budget for the European Community in the coming year. How will that help economic regeneration in Europe, in addition to the point made by my hon. Friend the Member for Linlithgow (Mr. Dalyell) about fast reactor research and development?

The repeated proposals, in speeches and questions, of my right hon. and learned Friend the Leader of the Opposition and my hon. Friend the Member for Dunfermline, East (Mr. Brown) are well documented, but they have been ignored again and again. To come back to the point of a previous intervention, there has been a complete absence of leadership by the British presidency on the issue.

The humiliating and total collapse of the Government's policies which led to our withdrawal from the exchange rate mechanism has caused immense harm to our economic and political interests, and it has put us on the sidelines in Europe. The British presidency has done nothing to reverse that. Whatever the Government say, the plain truth is that the ignominious events surrounding black Wednesday were caused primarily by the deplorable weakness of our economy after 13 years of this Government.

In Britain there has been no partnership between Government and industry, as there is in France. There has been no partnership for training between Government and employers and unions, as there is in Germany. There has been no sense of the balance between economic and social policies, as is common throughout the entire Community, with the one disgraceful exception of the United Kingdom. The Government simply have not learnt from their experiences in dealing and working with our European partners; otherwise, they would not have been moved to exclude the social chapter from Britain's version of the treaty in the first place.

Mr. Ian Taylor (Esher)

Does the right hon. Gentleman —[Interruption.]—well, honourable perhaps: he may have hopes for the future, but not if he carries on like this. He has forgotten that, for many months in the early part of the presidency, the British Government, under the Chancellor of the Exchequer, were trying to persuade a coherent force to work throughout the Community to reduce interest rates, and that that was blocked particularly as a result of the problems that the Germans were having with their reunification. The hon. Gentleman knows, as any economist knows, that, until monetary policy is relaxed, it is difficult to obtain any recovery, and that was the problem which ultimately had to be solved by black Wednesday.

Dr. Cunningham

I do not accept that as a reading of recent contemporary political history in Britain. The Government's stated policy again and again was that the cornerstone of their economic policy was high interest rates and membership of the exchange rate mechanism. That was what the Government said would resolve our problems, but everything collapsed around their ears. That is the only reason that we are in our present situation. It is all very well to blame others in the EC, but there is no escape from responsibility for a Government who have been in office this length of time, with majorities in the House of Commons which have sustained them through thick and thin, regardless of the disastrous outcome of those economic policies.

The reality is that the situation in Europe is serious, even dangerous, for democracy and stability. Unemployment stands at 16 million. We have seen the growth of racism and violence against ethnic communities in a number of EC countries. We should not be smug or sanguine about that, because racialist attitudes and attacks occur in our own country too, with monotonous and unacceptable regularity. There are tensions in Germany, France, Italy and other Community countries. As I have already pointed out, we have the worst increases in unemployment of all the Community countries.

The Government might have some excuse for failing to take any action on those matters if there was no consensus in Europe. But a consensus has emerged in the Community between employers and unions in the European Parliament, the President of the Commission and Commissioner Christophersen.

The Prime Minister of Norway, Gro Harlem Brundtland, has apparently written to our Prime Minister offering or suggesting talks between the European Free Trade Association countries and the Community countries on measures for economic growth and regeneration. I hope that she has had a positive reply, but from what we hear, like everyone else's, her suggestion has been abruptly dismissed—yet another opportunity missed, if not thrown away, by the Government.

I come now to the Maastricht treaty process. It is strange that, on the one hand, although the right hon.

Gentleman at first did not want to do it, the Government decided to suspend consideration of the European Communities (Amendment) Bill in the House, following the result of the Danish referendum; but, on the other hand, they were so tediously and painfully slow in taking any action at all to help the Danes to arrive at a position where accommodation of their problem may be achieved.

I hope that the right hon. Gentleman is right, and that that can finally be achieved in Edinburgh, but it seems unlikely. We know the real view of the Foreign and Commonwealth Office, because it was disarmingly presented to us in an internal memo which tells the whole truth, as opposed to the sanitised version of events placed in the House of Commons Library. I make our position clear. We want to see an accommodation of the Danish position. We think that that is important. I urge the right hon. Gentleman to do everything he can in Edinburgh to achieve it.

The Foreign Secretary referred to what the Birmingham declaration had to say on subsidiarity. It said: We reaffirm that decisions must be taken as closely as possible to the citizen. Bringing to life this principle, subsidiarity or nearness, is essential if the Community is to develop with the support of its citizens. We look forward to decisions at Edinburgh on that basis. It goes on to emphasise a few other points.

Since then, the Commission has produced its own version of subsidiarity. The right hon. Gentleman seemed to think that all was sweetness and light, but there are 22 pages of closely argued and somewhat tedious stuff here about the Commission's version of subsidiarity. We know that there is a divergence of views between what the British Government regard as the importance, significance and intention of subsidiarity and what is felt elsewhere.

The Select Committee on Foreign Affairs, under the chairmanship of the right hon. Member for Guildford (Mr. Howell), who is here today, has had some important things to say in its recent report about the problems of reaching a clear and agreed definition of subsidiarity. I am sure that the Foreign Secretary is aware of that, because he was the prime witness at the Select Committee's hearings. But there is no early prospect of Communitywide agreement on subsidiarity and how it will operate, and the right hon. Gentleman knows that to be so. Moreover, although we shall have time to consider that in more detail in Committee, subsidiarity needs the agreement of all. three Community institutions.

If subsidiarity means taking decisions closer to the people, as the Birmingham declaration says, we enthusiastically support it, because that implies more power devolved to regions, to Scotland and Wales and —a point that has already been made—to local authorities. That is how it is seen among our European partners, but I am not sure that that is what the Government have in mind, and we need to explore that in great detail when the appropriate opportunity presents itself.

Mr. Mike O'Brien (Warwickshire, North)

Does my hon. Friend agree that the inadequacy of the way in which the definition of subsidiarity was approached during the negotiation process shows the inadequacy of the Prime Minister's negotiation of the treaty, an inadequacy which has continued to be shown during his presidency of the EC? That should have been sorted out during the negotiating process, because the Prime Minister now says that it is central to the treaty.

Dr. Cunningham

I agree with my hon. Friend. As I have said, final agreement on a definition seems unlikely at Edinburgh, but in any event the Government's attitude here to subsidiarity and to the Committee of the Regions seems a million miles away from the view taken elsewhere in Europe.

Sir Russell Johnston

Is it not strange to hear the Foreign Secretary quoting Chancellor Kohl as agreeing with him in his definition of subsidiarity, when everyone knows that Chancellor Kohl is a federalist? Consequently, to him subsidiarity means entrenched, legally defined subsidiarity, not subsidiarity according to the whim of officials.

Dr. Cunningham

I agree, not least because the Government's record has been to centralise more and more power and authority with every year that they have been in office. Whatever their claims for the importance of subsidiarity as part of the treaty, they seem unlikely now to want to divest themselves of some of that power.

We unequivocally support the enlargement of the Community. Austria, Sweden, Cyprus, Malta, Finland, Switzerland, Norway and Turkey want to join. That is good news, but is unfortunate that the process has stalled because of the decisions at Lisbon. I hope that that can be unblocked at Edinburgh, and that some progress can be made.

However, like my right hon. and hon. Friends, I have some serious objections about an application from Turkey to join the EC, at least until there is a satisfactory solution of the Cyprus question. Unhappily, the recent United Nations talks have stalled, with the Turkish Cypriots appearing intransigent and unhelpful.

My right hon. and learned Friend the Leader of the Opposition and I had the chance to discuss that matter yesterday, as I believe did the Foreign Secretary, with the Turkish Prime Minister, Mr. Demirel, and his Foreign Minister, Mr. Cetin. We made clear our position on that important point, and I hope for an assurance that the Government have done the same.

Sir Nicholas Fairbairn

Does not the hon. Gentleman consider it odd that we should be trying to get into the European Community a country that is in Asia—namely, Turkey? Also, has the hon. Gentleman, with his electric mind, managed to work out how many forests or rain forests in the country that he mentioned had to be cut down to provide every right hon. and hon. Member with 4.8 kg of bumf, multiplied by the 12 Members of the Community and all the others to whom that material was sent? I thought that Europe was supposed to be green.

Dr. Cunningham

It is Turkey that has applied to join the Community, and I am certainly not trying to secure its entry. The whole tenor of my remarks was that I would not support Turkey's application until a lasting solution can be found to the Cyprus problem. As to the demise of rain forests or other kinds of forests, I am more concerned that the Kurdish people of northern Iraq have to chop down vegetation and burn it simply to keep alive. Although that matter is not strictly on today's agenda, I hope that the Foreign Secretary, in developing a policy, will do something to help those people to resolve their difficulties.

The situation in the former Yugoslavia—which is a matter for the Community and one in which it has been deeply involved—is a developing and appalling tragedy. We supported the London peace conference and regret that it has not been effectively followed through—not by Cyrus Vance and Lord Owen, who seem to be working tirelessly to secure some kind of accord, but by members of the Community and the United Nations itself.

Why is it that mandatory arms embargoes are not being effectively enforced many months after they were first voted on by the Security Council? Why is it that, even now, we cannot effectively blockade the principal if not sole aggressor, Serbia, and bring the Serbians to their senses and stop the appalling slaughter in Bosnia? Why has Britain handled the refugee question so disastrously? We could not accept even a busload of people, all of whom had a secure home to go to. That besmirched Britain's reputation in the Community. I take no pleasure in saying that to the Foreign Secretary, but he must know that is true.

I do not know whether the right hon. Gentleman, in his role in the presidency, or members of the Security Council know who is arming Serbia and Croatia and how arms are entering those territories. I trust that we may have an assurance that armaments, weapons of war and supplies are not entering the former Yugoslavia from Community member states, as some suggest. That would be a shocking state of affairs. We must impose more effectively and rigorously the will of the United Nations, and I urge the Foreign Secretary to do even more than he has attempted, to secure a peaceful settlement of those conflicts.

Only today, the British ambassador in Albania—no doubt with the knowledge and support of the Foreign Secretary—warned of the deteriorating situation in Kosovo and Albania, and called for more effort and monitors, to prevent those territories from descending into more conflict.

Mr. Hurd

The hon. Gentleman is entirely within bounds in referring to that issue, which I dealt with at length in July, and on which there was a debate last week which is why I did not address it again. The hon. Gentleman is right about the need for greater effort, which is why we have during this time—although it is not strictly a Community matter—deployed troops to ensure the passage of humanitarian convoys through Bosnia, and strongly support the strengthening of sanctions, such as the Adriatic stop and search and new measures along the Danube. We must continue to do that, try to introduce monitors into Kosovo, and prevent the situation in Macedonia going from bad to worse.

I am sure that we were right to create the London conference in a frame work that included Lord Owen and Cyrus Vance, but we have a good way to go. I accept the thrust of the hon. Gentleman's remarks.

Dr. Cunningham

I hope that the right hon. Gentleman will go further and agree to early recognition of Macedonia, which has long met all the requirements. I hope that something can be done to stop Greece, which is a member of the Community, supplying Serbia—I will not say with arms, but certainly with petrol. There are daily stories of convoys of tankers travelling through Greece into Serbia when there is supposed to be an economic embargo in force. Instead, we see it flouted day in, day out. The British Government have a major if not the sole responsibility for ensuring that proper effect is given to the blockade and to UN resolutions.

If that is not done, those voices calling for armed intervention—which I do not support—will grow louder and stronger as they see that the peace process is not working, because of a failure of will on the part of countries—some of them our partners, and all of them signatories to United Nations decisions—in quietly but persistently flouting those decisions.

The position, integrity and reputation of the United Nations and of the Community will suffer a devastating blow if the peace process fails. Islamic communities in this country and world wide will not forget what happened in Bosnia, and will not forgive us if they believe that their legitimate rights and human rights generally have been ignored by western countries. Neither will they forget—nor should they—if armed aggression and grotesque abuses of human rights are allowed to prevail.

The Foreign Secretary was right to discuss the former Yugoslavia at the Birmingham summit. However crowded the Edinburgh agenda may be, I hope that the European summit will return to the issue and redouble its efforts to bring peace to those tortured territories.

5.47 pm
Mr. Nicholas Budgen (Wolverhampton, South-West)

This debate comes at a convenient time—between the frantic activity of the paving debate and the start of the long journey through the Committee stage of the Maastricht Bill. This calm interlude will also allow many right hon. and hon. Members, particularly on the Conservative side of the House, to reconsider their attitudes towards the Maastricht treaty. A significant proportion of the Tory party must feel uncomfortable in this interlude and be deciding what their attitude will be towards specific parts of the treaty, and I intend to address a few words to them.

That section of the Tory party—I am sure that their views are reflected on the Opposition side of the House —will make an important contribution to the debate, and may save the Government from the real risk of the people demanding a referendum. If the House does not give the treaty proper consideration in Committee, without excessive and unfair pressure being exercised on individual Members, the smell will get abroad, and those outside will say, "Parliamentary democracy is not exercising its judgment properly. There can be no proper exercise of the judgment of individual Members of the House of Commons. Let the people decide."

Grave risks were taken in the way in which the Whips dealt with 50 or 60 right hon. and hon. Members a fortnight ago. [HON. MEMBERS: "No."] I say that with some knowledge of what was done. There is no doubt that we finished up with 26 right hon. or hon. Members voting against the treaty, as we saw it. The Government had a legitimate argument in saying that a high proportion of hon. Members and right hon. Members who were candidates at the last election did not distinguish their position from that of the Government, and that the Government had a mandate for the Maastricht treaty—that is, for the general principle of the Maastricht treaty.

As a former Whip, I take no exception whatever to proper and vigorous whipping exercised on those who are making up their minds.

Mrs. Currie

You did it.

Mr. Budgen

I did it. It was legitimate to say that anyone who was in any doubt would never get a job in John Major's Administration, and it was legitimate to back that up on occasion with abuse and even threats. However, the conventions of whipping in the Conservative party, as I understand them, do not allow interference between an hon. Member and his constituency and an hon. Member and his family. There can be no doubt whatever that those conventions were frequently and disgracefully broken for the paving debate. That may well account for the difference between the 80 hon. Members and right hon. Members who signed the "fresh start" motion on 2 June and the 26 who voted against the Government's motion.

Mr. Ian Taylor

Far be it from me to defend any of the tactics that my hon. Friend alleges were used by the Whips. Will he explain the presence of Lord Tebbit in the Members Lobby? Lord Tebbit was not looking his most benign and gracious during the immediate hours before the vote.

Mr. Budgen

As I said, this is a game that is played with a hard ball.

Mr. Taylor

Stop whingeing.

Mr. Budgen

I am not whingeing. It is important to understand that even a game that is played with a hard ball has some rules. As I understand the rules, they were broken a fortnight ago. It does not matter in the least to individual Members, and it does not matter in the least to the unnecessary paving debate.

Mr. David Winnick (Walsall, North)

Did the hon. Gentleman see the letter in The Times from his colleague the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn)? The hon. and learned Gentleman, who is a former legal officer, said that it was likely that a criminal offence was being committed because threats were made. It appears that the threats included giving the press details of the alleged private life of some Conservative Members.

Mr. Budgen

It is believed that that was done.[Interruption.] It is believed by my hon. and learned Friend. It was certainly done in my case in respect of my constituency. I have always believed that such behaviour was not within the conventions. I may be wrong about that, and it may be that the behaviour is within the conventions. All that I am saying is that the game was played with a much harder ball than usual a fortnight ago.

The Maastricht treaty was hardly discussed at the last general election. Nonetheless, it is important to understand that the Government are entitled to argue that they have a mandate for the Maastricht treaty. They do not have a mandate for every part of the treaty. The number of Members on this side of the House who signed the "fresh start" motion and the subsequent motion on 24 September shows that there is real doubt about at least some of the treaty's provisions. As we proceed with consideration of the provisions of the treaty I hope that we shall not find that heavy persuasion is offered to all hon. Members who suggest that they do not agree with any one part of the treaty. For the sake of argument, if hon.

Members do not think that the subsidiarity arrangements are sufficient, they should not be accused of bringing the Government down, or of wishing to attack the Prime Minister or to smash the whole European Community.

If the country is to have the benefit of proper parliamentary democracy, we should not have an irresponsible debate about the treaty. I repeat that it is legitimate for the Whips to say to any hon. Member who votes against any single part of the treaty that he or she will never get a job. That is a proper and reasonable constraint which should be exercised against any hon. Member. But there are conventions, even in a game that is played with a hard ball. If the Government misbehave as badly during the Committee stage as they did in relation to the paving debate, it will be obvious to the country that the provisions of the treaty are not being properly examined. If the country comes to the conclusion that the treaty is not being properly examined, the demand for a referendum will become even stronger.

Mr. Ray Whitney (Wycombe)

Will my hon. Friend explain why the House voted for the treaty on Second Reading with a majority of 244? Does that not show that the deep misgivings which he suggests are so widely held are not widely shared but are confined to a small minority of the House?

Mr. Budgen

We shall find out where the majorities and minorities are only during the Committee stage. Of course, parliamentary democracy does not depend on irresponsible voting. Any Member of Parliament who votes and thereby embarrasses his party, whether it be the Government or the Opposition, should be prepared to take the political consequences of his vote.

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

Does my hon. Friend believe that parliamentary democracy is reinforced by a referendum?

Mr. Budgen

No, I am opposed to referendums. I believe in parliamentary democracy. I hope that I have made it clear that parliamentary democracy depends on a relatively honest expression of opinion by the House.

Mrs. Currie

That is just what we have.

Mr. Budgen

That depends on the extent to which opinion is prevented from being expressed. My argument is that many hon. and right hon. Members on the Conservative side of the House have already expressed significant disquiet in public if not about the whole of the treaty, at least about significant parts of it. I hope that they will express their views in Committee, and I hope that they will not be prevented from expressing their views by wild suggestions that there will be a general election, the Prime Minister will resign, they will be de-selected or the Whip will be withdrawn every time they wish to express some reservation about some part of the treaty.

Sir Nicholas Fairbairn

Will my hon. Friend clarify a point that our right hon. Friend the Foreign Secretary rather fudged? Will he confirm that when a treaty between —in the present instance—12 parties is in any way altered by any of the parties, and the alteration is not confirmed by their Parliaments, the whole treaty must be renegotiated and brought back to the 12 Parliaments? If that is the case, any amendment to the treaty will inevitably mean that we must start all over again.

Mr. Budgen

That is my understanding. As we begin to consider the various aspects of the treaty, we shall face the most fashionable and current threat: the threat of renegotiation.

If the treaty is as important as its supporters suggest, what is wrong with dealing with it slowly? I can give an example of domestic legislation which was very important, but which the British Parliament considered very slowly —and, in my opinion, only got right the third time. I observe with increasing disquiet the belief apparently held by Ministers that bashing a Bill through with a guillotine will produce the answer to a problem.

I am remembering the way in which the British Government dealt with the question of industrial relations. As early as the late 1960s, it was obvious that industrial relations legislation was needed. The Labour party presented its "In Place of Strife" proposals; my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath) produced his Industrial Relations Act 1971, which went the same way. Only on the third occasion, when the matter was dealt with slowly and methodically, did we get it right with a series of legislative measures.

The same will apply if the peoples of the EC are strongly in favour of a third—and, I contend, significantly federal—step. In that event, what is the problem if this particular attempt has to be renegotiated? Let us suppose, for the sake of argument, that the desire of the peoples of Europe is analogous with the desire of the German people for reunification—a desire that the Germans nurtured in their breasts for 45 years, and whose fulfilment, when they saw the chance, they grasped with joy, seeing it as the basis of their national psyche. If the peoples of Europe feel the same way about the Maastricht treaty, they will not be put off by a hiccup in the British House of Commons: they will come back to it as quickly as possible.

The political classes of Europe do not want a renegotiation because they know that, if they had to renegotiate the treaty, it would be rejected—and resoundingly rejected—throughout the European legislatures. I suggest that we use this calm interlude to resolve to do our parliamentary duty and consider the details of the Maastricht treaty without let or hindrance, and without another period of excessive and unconventional threats. Let us understand that if a renegotiation proves necessary, and if the peoples of Europe genuinely want something like the Maastricht treaty, they will get it irrespective of any slight delay in the House of Commons.

6.3 pm

Mr. Charles Kennedy (Ross, Cromarty and Skye)

I do not intend to follow the speech of the hon. Member for Wolverhampton, South-West (Mr. Budgen) in every respect—not least in respect of his closing remarks, the logic of which I did not entirely understand. In the earlier part of his speech, however, he allowed a positive horror story to unfold before our very eyes. If he finds life on the Conservative Benches as deeply unpleasant as he suggested in describing the activities of his party two or three weeks ago, even he might prefer life in the European Parliament at some future stage. I am sure that MEPs do not indulge in such dreadful tactics as the gravediggers in the Conservative party apparently went in for to whip their malcontents into line on the night of that vote.

I am mindful of some of today's press comment about the Foreign Secretary's future in his present office. It struck me that—even allowing for the right hon. Gentleman's cold, and his rather weak voice—his opening speech had the tone of a near-valedictory address, as far as it concerned foreign policy management. It could well have provided a metaphor for what is about to happen, in that, as the Foreign Secretary concluded his speech—on rather a lame note—the Chancellor of the Exchequer left his place. If we are to believe what we read in the press, that may be about to happen in another sense, with the conclusion of what has been a fairly wretched European presidency for the Government.

At the outset of his speech, the Foreign Secretary said that he had outlined an ambitious shopping list to the House on 2 July, at the beginning of our presidency. It seems that those ambitions have not been met—in some cases for reasons entirely outwith the control of Government, in others fully as a result of Government incompetence.

Let us consider the most recent developments: yesterday's visit by the Chancellor, and his discussions with his fellow Finance Ministers at European Community level. Those developments provide a classic example of the confusion that appears to be at the heart of Government policy. One day, the Prime Minister's team is telling the world that Britain is pressing for a European growth plan—and many of us would say "hear, hear" to that, given the level of unemployment throughout the Community and the effect of the recession on so many member states. The next day—indeed, this morning—the Chancellor insists that that plan has been blown out of all proportion.

On the one hand, No. 10 Downing street says that Europe should have a co-ordinated growth programme, along the lines of Britain's recent autumn statement; on the other, the Chancellor advises everyone that the autumn statement is not a "dash for growth"—that was his phrase. A complete contradiction is at work here: it is little wonder that our presidency has become more incredible, as well as lacking in credibility, as time has gone on.

But the central criticism that surely must be made of the six-month period that we are discussing is very simple. Not least in regard to the Maastricht treaty, and matters European generally, the Prime Minister has behaved rather like a rabbit caught in the headlights: he has been unsure which way to dart, for fear of the consequences he sees on every side, and he has been too indulgent—too willing to play into the hands, or remain a prisoner, of some of the xenophobes who sit behind him. He has not been willing to confront them and take them on, and that is a failure of leadership.

The Prime Minister nearly succeeded in scuppering the Maastricht process a couple of weeks ago, given the closeness of the vote. Such action takes some ability on the part of a Prime Minister. When the House had approved the negotiating terms set out in advance of the Maastricht summit, and the terms then agreed by the House—albeit with objections and qualifications from different quarters and different parties, my own party included—and then given the Bill a Second Reading with an overwhelming majority, he reduced that majority to single figures, even with the support of my hon. Friends to do that calls for a fair degree of political incompetence; and I am afraid that the incompetence that we have seen at home has been more than matched by the incompetence with which too many European matters have been approached during our presidency.

Let us take subsidiarity, which the Foreign Secretary breathtakingly touted as one of the great achievements of recent years. The Chancellor announced the suspension of sterling from the exchange rate mechanism; hard on the heels of that came the announcement of the Birmingham summit. Following that fateful set of events, it was anticipated that the Birmingham summit would deal with some of the matters involved, but the ERM and consequent decisions hardly came up.

We were told, and we have been told again today, that Birmingham was all about subsidiarity and recognising the limits of the Community. We were also told that the Government were getting their message across at the European level. Subsidiarity, therefore, had become all-important.

The Foreign and Commonwealth Office recently published "Britain in Europe". The way things are going, one wonders whether there should be a question mark at the end of those three words. However, it is a substantive statement—Britain in Europe. What is most interesting about the Prime Minister's foreword to that publication, only a few weeks after the Birmingham summit, is that subsidiarity is not mentioned at all. One wonders, therefore, just what policy is being pursued and how clear-minded the Government are about their policy.

Dr. Norman A. Godman (Greenock and Port Glasgow)

The hon. Gentleman surely cannot be happy about the Government's definition and likely implementation of subsidiarity, is he? It seems that subsidiarity, as far as this lot is concerned, means the dispersal of power between Brussels and London and that any dispersal of power to Scotland and Wales does not figure in their thinking.

Mr. Kennedy

I am grateful to the hon. Gentleman. As both of us represent Scottish constituencies, we see absolutely eye to eye on this issue. Both of us know that our respective parties view subsidiarity in the United Kingdom context as meaning a Scottish parliament and the devolution of more power to the English regions and to Wales. I suspect, however, that what the Government mean by subsidiarity is obstructionism—the ability to stop certain issues at Whitehall level without having to refer them to Brussels or without their having to be sent down the line for decision in Cardiff, Edinburgh or the English regions where legitimately many of them could be decided, many of us would argue, much more efficiently and much more effectively than they can be decided in Whitehall.

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

Is it the hon. Gentleman's view that decisions about how regional government or local government powers should be distributed in Britain should be taken in Brussels, riot in this House? Is that his interpretation of subsidiarity?

Mr. Kennedy

No. I accused the Government and, by implication, the Minister of viewing subsidarity as a good opportunity for obstructionism. The Minister is trying not so much to obstruct as to obscure. Of course I do not suggest for one moment that the structure of Government in the United Kingdom should be decided in Brussels. My argument is that the definition of federalism for which we argue is the federalism that one sees in Germany—a positive, practical federalism, with the devolution of power to the regions, away from nation-state level. The centralisation of power in Whitehall and Westminster, which all too often is unaccountable, is as unacceptable as the centralisation of power in Brussels would be.

Mr. Garel-Jones

The reason that the principle of subsidiarity and its acceptance by our partners to the treaty is so important is because, as President Delors said, subsidiarity now makes it clear that the presumption in all cases is that action will take place inside a member state and that action by the Community will be the exception. Therefore the presumption is that decisions made in the Federal Republic of Germany about the way that it wishes to distribute powers in the federal state is for it and that the way in which powers are distributed inside the United Kingdom is for this House and this Parliament.

Mr. Kennedy

I understand what the Minister says, but the point that I put to him—if he wants to be politically and philosophically consistent—is that if he says that the principle of subsidiarity means that there is no point in taking a decision at Brussels level that can be more effectively and properly taken at Westminster level, there is equally no point in decisions having to be taken at Westminster level that could more properly be taken at Cardiff, Edinburgh or regional level. The Government do not want to listen to the case that we make. If that principle had operated in this country, many of the developments ushered in since 1979, a great number of which are now being flung back in our faces as economic recession bites ever more deeply, would never have been bulldozed through in parts of the country where the Government commanded scarcely a mandate, far less a majority.

Dr. Godman

Is not the trouble with the Government's interpretation of subsidiarity—compared and contrasted with the German definition of article 3B and the Spanish interpretation of article 3B—that if Maastricht were ratified, article 3B would become justiciable, which means that the Government would politicise the European Court of Justice?

Mr. Kennedy

I am grateful to the hon. Gentleman. That is an additional argument that is likely to be further deployed when we consider the Bill.

I am not sure whether the Foreign Secretary referred in his speech to the Committee of the Regions. Little progress has been achieved. I hope that the Minister who is to wind up the debate will say something about the Government's thoughts about timetables, the mechanisms for selection or appointment, and so on. That is important for Europe as a whole and certainly for Britain. Many of us believe that Britain's input will be an important counterbalance arid will provide political opinion of a broader range than the Government's alone when it comes to making decisions at Community level.

The Foreign Secretary referred also to enlargement of the Community. That has broad political support. Nevertheless, one has to voice a suspicion. I do not criticise the Foreign Office. It is a criticism of some Conservative Back Benchers and others who are critical of the European process as a whole. Enlargement should not be embraced as a means of trying to slow up the Community mechanisms per se. We are against that. I understand that the Foreign Office supports our view.

Before there can be any enlargement of the Community, we must face up to the present difficulties over providing help to the more recent entrants to the Community which are, in per capita terms, poor members of the Community. There will have to be a bold and, one suspects, generous settlement at Edinburgh in relation to cohesion funding as a whole. If the cohesion funding issue is to be resolved, there will have to be consideration of structural funding and regional funding as a whole, so that after 31 December next, with over 90 per cent. of the single market completed, the so-called golden triangle at Community level does not leave the peripheral parts of the Community, be they in the southern Mediterranean or in the north-west highlands of Scotland, at an excessive disadvantage and unable to play their full part within the single market.

The United Kingdom Government will therefore have to recognise properly and implement the additionality principle for many of the structural funds. All too often that principle has been abused. Moreover, structural funding arrangements for the period 1994 to 1997 are being made. The case put forward by the various public bodies and agencies concerned with the Highlands and Islands is to move our area from objective 5B status, under which regions receive only 5 per cent. of the total European structural funds at between 25 and 50 per cent. assistance rate, to objective 1 status. Those with objective 1 status are allocated 65 per cent. of the total European structural funds, at an assistance rate of between 50 and 75 per cent. of total public authority support per project.

The Minister will be aware of the difficulties that have been experienced by the highlands and islands economy, such as the cyclical nature of North sea fabrication contracts and the dearth of orders in the foreseeable future, the rundown at Dounreay and the reduction in regional aid, all of which have had a disincentive effect on the local economy. Moving us from category 5b back to category 1 for structural funding assistance would be a significant psychological and practical boost. The Government have been fairly positive so far: we hope that they will move towards delivering the goods at the Edinburgh summit.

Mr. Roger Knapman (Stroud)

The hon. Gentleman is advocating more expenditure on cohesion funds and regional development grants. Which countries will pay for that additional expenditure?

Mr. Kennedy

Let us be clear about which country has never been honest about structural funding—Britain. The additionality principle has been consistently abused by the Government, not to finance additional projects—road improvements, bridge construction and so on—to improve the economy of the regions but to replace the national Government commitment. That has caused considerable annoyance in Europe and has not helped us to win any friends. Bruce Millan, the Labour commissioner, has been able, not least with the RECHAR programme, to flush out the issue and to focus public attention on it, and I pay tribute to his work.

Mr. Milligan

Will the hon. Gentleman give way?

Mr. Kennedy

Will the hon. Gentleman forgive me if I do not do so? I do not want to take up any more time.

Many critics of further European integration have said, "Look at the situation in Bosnia and in what was Yugoslavia; there is a classic failure. How can people who want greater European integration claim that that will not happen here when Europe cannot deliver a better state of affairs?" If we deny the Community mechanisms to resolve differences or to promote further collective policies, the full tragedy of what can happen may emerge. Many of us argue that the tragic circumstances in Yugoslavia strengthen the case for a more integrated European foreign and defence policy.

One need not apologise for arguing that positive messages emerge from that, and perhaps the most positive is that of democracy itself. The Foreign Secretary, using a characteristically British phrase, spoke of how some other member states were more "buttoned-up" than us in their approach to openness in government, yet Britain has no freedom of information legislation, no citizens' rights defined in a Bill of Rights or written constitution, and one of the most secretive, centralised systems of government imaginable. That is why many of us argue that, to achieve democracy and openness, we need a more federal approach within the United Kingdom and within an increasingly federal European Community.

Perhaps the greatest criticism that can be made of Britain's six-month presidency is that, if one wants to sell an idea to the public outside—we can argue about whether that is best done in the Chamber or in a referendum—one must sell it positively and with hope. The severest criticism of the Prime Minister's behaviour in the past six months is that he has tried to sell Maastricht and the European Community as much by what the treaty will not do, by what it will not intrude upon, by what it fails to address and by what it leaves out as much as by what it will deliver and by the hope and mechanisms that it can put in place for a more united and positive Europe. That case continues to seek a hearing. We are not getting it from the Government and we did not get it from the Foreign Secretary, which scarcely fills anyone with confidence for the remainder of the period up to the Edinburgh summit.

6.25 pm
Mr. Peter Temple-Morris (Leominster)

I cannot agree with the final words of the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy), but I am pleased to follow him because it gives me the chance to pay him and his hon. Friends a tribute for voting for Europe in the recent paving debate. That healthy trend of showing a willingness to support the Government has not been apparent tonight, but we cannot have everything. At least Liberal Democrat Members have traversed the correct direction on at least one occasion. I am aware of the constituency pressure that was placed on some Liberal Democrat Members, so my tribute is well meant.

I wish to concentrate on some of the problems that we must address at Edinburgh and what we might be able to achieve. We have heard much gloom, doom and difficulty about the Edinburgh summit, but it is not so bad as all that. A good start has been made with GATT and the single European market, which has always been championed by the Government, who have implemented and played a leading role in what, from the beginning of next year, will be an increasing reality.

My approach to Edinburgh is not so pessimistic as it might have been even a few months ago, or certainly in the middle of September, when it seemed that there was a serious danger that the British presidency would be seriously disturbed and the Edinburgh summit would become rather unrewarding. We shall not be isolated, which was possible, and we shall not return to the ghastly circumstances of previous years in Europe. In addition, there are clear signs, although not necessarily the best signs for the Community, that other countries are now experiencing difficulties.

I speak of all the perfect Europeans—I am a supporter of the European Community, but I am not a fanatic—who were prepared to lead the gallop at a pace that is being seen to be unsustainable, but nevertheless must continue to be followed. The French expressed many views in their referendum and I am sure that at Edinburgh we shall see that their attitude to GATT is less than Mr. Clean. The Germans, although I do not criticise them for doing so, are seen to conduct a nationalistic economic policy and they, too, will have something to answer for. We therefore start from a much more even position than might have been the case.

The Maastricht ratification process must now be confirmed and re-emphasised. Our electorates will expect a new timetable for ratification to be agreed in Edinburgh. The old timetable will not be achieved, so we must tackle the challenge of meeting the new one. I hope that the Government will press on with the Maastricht Bill, despite the fascinating speech of my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) about the Government Whips Office. I hope that the Government will not totally lose heart in the face of the observations by my hon. Friend. I hope that I and many of my hon. Friends can expect the Third Reading of the European Communities (Amendment) Bill in the House no later than May next year. I believe that we should make that clear as soon as is practically possible.

Mr. Salmond

Did the hon. Gentleman see the Channel 4 programme, "A Week in Politics", on Saturday night? Perhaps the Government Whips Office should be the least of the worries of the hon. Member for Wolverhampton, South-West (Mr. Budgen). He should perhaps worry more about the demonic powers of the Minister of State, Foreign and Commonwealth Office, the right hon. Member for Watford (Mr. Garel-Jones).

Mr. Temple-Morris

I always wonder why my right hon. Friend the Minister encourages the national press into certain excesses of comment. I have seen nothing but gentleness and understanding from him, including during his time in the Whips Office, when I was occasionally a rebel on somewhat heavy issues. Although on this occasion the pressure is on, and although I have suffered myself from that pressure—though not exerted by my right hon. and allegedly demonic Friend—I have always believed that if one cannot stand the heat, one should get out of the kitchen. We should not be put off by the speech of my hon. Friend the Member for Wolverhampton, South-West, which seemed to be addressed more to the politics of the Committee stage than to anything which might or might not have happened to him.

At a time of recession, the general economic situation must be addressed. It is not a time to spend more, whether on convergence, on cohesion or on anything else, but it is a time to spend what we have within existing policy on getting out of recession. I am very encouraged that that policy is now assuming a European context for Edinburgh.

The next main point that will have to be addressed—we are not hearing so much about it now because of the macro-economic issues—is our old friend the exchange rate mechanism. Something will have to come out of Edinburgh to give people more confidence in the future of that instrument. The United Kingdom is out of it, but its policy is to get back into it when it can, according to its economic progress. Others are under severe strain. Although it was not their fault because they were unbalanced by their very success, the Germans completely unbalanced the whole system. At Edinburgh, we should perhaps begin the process of providing the exchange rate mechanism with greater flexibility to withstand speculators.

I give a slight warning. There is too much a tendency here when talking and thinking about the ERM to assume that Britain can dance in and out as it wishes, and that somehow everyone will let us do exactly what we like. It is assumed that if we do not want to go in, we need not, and that we are entitled not to go in. Without doubt, there will be increasing pressure on us, bearing in mind the economic difficulties of other countries, to make up our mind. With that pressure, we shall not be permitted indefinitely to waltz around with a low-value currency asking Germany and France to buy our goods if those countries are under the disciplines of that system. Being outside the ERM is not a permanent option. Everyone tolerates our position at the moment, but we must address it while we have the credit and the weight with which to do so. Rather than appearing to be backing off from the ERM, we must go in to try to reform it from within.

We must also address the overall European financial approach, internal and general. There are obvious differences on Delors stage 2. Differences have already crept in between those who are paying for it and those who expect to benefit from it. For a variety of reasons, those who are paying for it are in no condition to pay very much. I want to see convergence and cohesion, which are central to the argument for an eventual single currency. Having said that, now is not especially the time, and I desperately hope that we shall not get into a north-south tangle between the payers and the receivers. It is unnecessary at this stage. We can set out the demarcation and we can do as much as we can. On general economic policy, I welcome the approach to the European infrastructure at a European level.

In considering what it might be possible to achieve, the first issue is ratification. The Danes have been mentioned a number of times. Obviously, we must accommodate them, because there are no smart solutions without them. They have the responsibility for the Maastricht treaty and they must come within it. It is not on for the 11 to go ahead with all the stresses and strains at the moment. To say that it was on would, in a funny way, release the pressure on the Danes. We cannot renegotiate the treaty because it would then have to be re-ratified. I have always understood that to be the legal position.

I adopt the statement made by my right hon. Friend the Foreign Secretary. He said that, because the Danes do not want to renegotiate, for the reasons that I have just given, we seek a legally binding outcome. Reading between the lines a little, the Danes' demands are not too horrendous. They make dramatic demands about defence, which is one of the vaguest parts of the treaty. The Danes talk about opt-outs from European monetary union when we already have such opt-outs, so that issue should not present insurmountable difficulties.

I repeat this point because it is so important. With ratification, the country and the House must keep up the pace. I and a number of my hon. Friends believe that the Third Reading of the Bill should be in May because if it is in May, it is before the final Danish summit. Our decision to ratify and our progress towards ratification will be there for all to see. There will be eventful times in another place, but we must not miss out on being at the heart of Europe. We must not miss out or be seen to be dragging our feet at a time—this is apparent now and will continue to be apparent—of important European development. If we miss out now or at any time, there is a danger of a two-tier Europe, a point to which other hon. Members have not yet referred. With this country's history, I do not see us as part of a second tier.

Dr. Godman

Is the hon. Gentleman confident that the Danes will reverse their original judgment? If they stick by that judgment, what happens to the treaty? Can it be resuscitated?

Mr. Temple-Morris

The matter is plain for all to see. We shall be reasonable with the Danes, we shall make every effort to accommodate them and there will be a second referendum. At the end of the day, I do not believe that the Danes will isolate themselves, for all their fears about Germany and for all their apprehensions about the Community as a whole. If the Danes do not ratify it, the treaty as it stands will be at an end. The I I could, of course, immediately sit down, sign a new treaty and start the process all over again. A new treaty would, of course, have to be re-ratified. We are talking about legally enforceable matters to satisfy the Danes. I believe that I have outlined that plain position correctly.

After ratification comes subsidiarity, which has been well discussed in the House. As I understand it, subsidiarity is not a legal concept in the European Community context, although it is in an established federation such as the Federal Republic of Germany. There is no suitable legal instrument, there is no European constitution and there is no European constitutional court to turn it into a legal concept. We must not muddle nationalism with Community internationalism. We are looking here for clear political and governmental guidelines at all levels, and for practice in Brussels by the organs of the Community, and especially by the Commission and the Council of Ministers. In that regard, I welcome what my right hon. Friend the Foreign Secretary said about the burden of proof.

Dr. Godman

If the treaty is resuscitated or ratified, article 3b will become justiciable. That must surely mean that, sooner or later, judgments by the European Court of Justice will be involved.

Mr. Temple-Morris

That does not alter what I was trying to say. Once article 3b is included and becomes justiciable, a body of precedent will gradually be built up. We are not talking about a federal Europe in any event, but under the treaty we should still be a long way away from the established constitutional structures of member countries of whatever system. It is not the same ball game. No doubt ways will be found to raise matters legally, and a body of precedent will eventually be built up. That is in the best English tradition—the common law rather than a whole load of written statutes.

I stress that we shall not be able to do very much about Community finance. We should not have an argument: we should establish our parameters and do what we can.

That brings me to overall spending on infrastructure. Because of our somewhat illustrious history, an important point often eludes us: we are an offshore island, and beyond us is another offshore island—Ireland. We must recognise the importance of infrastructure and of access from both Northern Ireland and the Irish Republic through Wales. Access from the north of England is as important as for the Principality. To my mind, it is verging on the disgraceful that a business man who can get into a train in Paris and shoot off at haute vitesse to all parts of Europe will come grinding to a halt at Dover. We should remember that that Parisian business man may want to do business not in London but in the regions—in Manchester, Liverpool or the Principality. We have a great European interest in that, and it is a very good trend.

What sort of Europe do I want to emerge from Maastricht and Edinburgh? I want us not to lose the prospect of a single currency, as I said on Second Reading of the European Communities (Amendment) Bill. There is too much mincing of words on that subject. I want the security of that prospect—for myself, my children and my country. Anyone who considers what has happened to the pound—not just since the war, but before it—will have some idea what I am getting at and will also know of the sophistication of the pure speculation which present structures, I am afraid, permit.

One of the victories of Maastricht was intergovernmental co-operation, and may that trend continue—in respect of defence as well as foreign affairs. In the midst of our intergovernmental co-operation, we should not forget that increasingly in defence, bearing in mind the position of the United States, and in foreign affairs, bearing in mind our increased responsibilities as Europeans, we need to act together. Together we can be effective: as a little nation we can do little. If we do not recognise that, we let ourselves and our history down.

6.43 pm
Mr. John Hutton (Barrow and Furness)

I want to speak about both the Maastricht process and the draft European Communities budget for 1993.

Most hon. Members will agree that this is a time of great change and rapid development in the Community and in our relationships with other nations. For those of us who look forward to a wider and deeper Europe—to a Europe for people as well as for business—it is also a time of rising expectations.

There are dangers in the process of developing closer co-operation, however. As my hon. Friend the Member for Copeland (Dr. Cunningham) said, the rise in fascist violence in Europe—particularly in Germany, but in other member states, too—must give all hon. Members a real sense of outrage and concern. Resisting that racist tyranny is one of the biggest challenges facing all of us in the Community today. That is why I believe that the Maastricht process is so important for Europe.

Maastricht is important in that context, as in others, because it offers a vision, in principle and in practical terms, of a Europe in which member states work more closely together—where political and economic cooperation between member states becomes central to our relationship with each other. I am a strong supporter of the Maastricht process.

Sadly, however, the British Government seem to be obsessed with fighting yesterday's battles and appear always to be looking over their shoulder at non-existent enemies in Europe. I refer in particular to the so-called Brussels bureaucracy. The result of all this is that we often create the impression that we are not good Europeans—that we are not truly at the heart of Europe. That impression will run contrary to Britain's long-term economic, social and political interests.

Tonight, I shall concentrate on other aspects of the developments within the Community in the past six months and, in particular, on developments in the European shipbuilding industry and the problems of defence-dependent communities that now face the prospect of a rapid increase in unemployment as a result of the end of the cold war. In both these respects, I believe that the Community is failing to pursue the right policies—policies that will create and help to save vital jobs, skills and technologies not only in Britain—in communities such as my constituency—but in other areas of the continent.

Paragraph 12.16 of the White Paper contains a rather acerbic and short statement relating to the derogations, now part of Community law, for aid to the former east German shipyards.

All hon. Members will know that, in the past 12 months and, indeed, before that, Europe has continued to witness a major decline in our shipbuilding capacity. In the past six months, thousands of jobs have been lost all over Europe. I am referring not only to developments in my constituency, which I believe has lost more jobs in shipbuilding in the past two years than any other region of Europe—Barrow and Furness has lost more than 6,500 jobs since 1979—but to the problems facing communities throughout the continent.

I wish to refer to Vickers Shipbuilding and Engineering Ltd. In the shipyards in my constituency, we have some of the finest technology and skills that are to be found anywhere in Europe.

Throughout a period of immense job losses in European shipbuilding, the Commission continues to predict that worldwide demand for new merchant ships will double over the next 10 years. We ought, therefore, to be pursuing policies that will preserve shipbuilding capacity so that we can take advantage of the expected increase in work; yet, throughout, the European Community and its member states have been pursuing a policy that will lead to the eventual evaporation of our shipbuilding and marine capability in Europe. That is a ludicrous and outrageous policy for the Community to pursue.

We need a new maritime policy which should recognised that shipbuilding is not a smokestack industry or a thing of the past. British shipyards, of which I can speak with some knowledge, are modern and well equipped; they are centres of engineering excellence without parallel in Europe. Why, therefore, do our Government and those of our member states—and, in particular, the Commission—remain intent on pursuing policies that will lead to a substantial reduction in our engineering capability?

I am a passionate believer in engineering and its role in securing the future of our manufacturing industries. There is a real danger that Europe will lose one of its greatest industries needlessly. The British Government must not sit back and sacrifice our shipbuilding and marine engineering industries on the high altar of free market forces. Why should we surrender a lucrative market to the shipbuilders of the far east and the Pacific rim?

Dr. Godman

Is my hon. Friend aware that a recent report, commissioned by the European Commission, suggests that a gap of about 22 per cent. remains between the price of ships purchased in the far east and those from the best European yards? The seventh European Community directive on shipbuilding—the shipbuilding intervention fund—should surely be succeeded by an eighth directive on 1 January 1993.

Mr. Hutton

I agree, and I suspect that my hon. Friend must have been looking at my speech over my shoulder, although I know that he would not do such a thing. Like him, I think that the Government need to consider how the intervention fund regime applies to British yards. They should extend its application to cover British warship yards.

In the early 1980s, there may have been a rational justification for saying that the British warship yards had secure futures, as they had secure and prosperous order books. That was especially true of VSEL in Barrow, until the publication of "Options for Change", when it lost £3 billion-worth of orders at a stroke. It is not possible for the shipyard in my constituency—or, I suspect, yards in other constituencies—to make good on its own the loss of defence work and the huge adjustment in logistics, competitive outlook and marketing that is necessary now that defence work is set for a rapid decline.

Like my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman), I believe that the initial justification for not applying the intervention funds to warship yards has disappeared. The shipbuilding industry in Britain and in Europe has had to face a substantial and material change of circumstances. If we are to maintain our shipbuilding capacity—I argue that that is essential if we are to maintain a successful heavy engineering base—we must consider the argument of my hon. Friend the Member for Greenock and Port Glasgow about closing the gap in competitiveness between good, well-stocked and well-equipped British yards and some of the low-cost yards in the Pacific rim and the far east. I hope that the Government will press in the Council and the Commission for an eighth directive, which will allow British yards to compete on level terms with those other yards.

One of the great deficiencies of the Government's While Paper and of their policy towards industry in Britain and Europe is that they do not recognise the important role of engineering—especially marine engineering, which has a substantial future and not merely a past. I sometimes wish that the Government would begin to recognise that.

I note that a resolution approved by the European Parliament on 17 September began to recognise the need for a European initiative to support and help areas such as my constituency, which are suffering the severe effects of a rapid and unpredictable decline in defence work. For example, in the late 1980s, 1.5 million people in Europe were employed in the armaments industry. The European Parliament is convinced that, during the next three to five years, between 300,000 and 500,000 jobs will be lost in the armaments industry, and I share that view. The figures are almost precisely comparable with job losses in the iron and steel industry between 1975 and 1985. During that period, the European Community developed a range of imaginative schemes to help iron and steel communities to cope with that sudden demise.

The European Commission and the Community should take the initiative and start to develop an effective response to the crisis affecting employment in the defence industries of Britain and Europe, because they are of immense importance to our manufacturing base. Hon. Members on both sides of the House who have defence establishments in their constituencies know of, and can testify to, the high levels of skill, especially in engineering, to be found in such companies.

Will the Government consider a range of new initiatives to reward innovation, and to encourage enterprise and diversification among our defence contractors? Why are the Government ending the peripheral programmes, which have benefited my constituency and others suffering from the decline in defence contracting? The peripheral programmes were developed to provide practical aid to defence-dependent communities. Their needs have not diminished during the past couple of years, and will get more intense. It is silly of the Government to withdraw the peripheral programmes from the European Community budget, but I understand that they have asked the Community to take them out. Last year, 50 million ecu were spent on the programme, but there is to be no budget allocation this year.

What is the European Community doing to help the defence industries to adjust? I am afraid that the answer is, not a lot. We have to act quickly and decisively or we shall lose huge sectors of Europe's engineering industries—probably for ever. In both the shipbuilding and the defence industries there are signs of complacency and inaction in the United Kingdom Government and the Community. That drift is damaging to Europe's long-term industrial competitiveness and to the economic prospects facing my constituents.

The problems that face both industries cannot and will not be solved by a strict adherence to market forces. Many hon. Members believe that those same market forces are creating the problem. In my constituency we have been dependent on defence-related contracts for the best part of 25 years. VSEL used to build merchant ships as well as naval vessels. Since the early 1980s, we have secured only naval shipbuilding work. When the demand for our products begins to evaporate, as it has done quickly with the publication of "Options for Change", we are not able to make the necessary adjustment. Our principal supplier has simply walked away and is telling us, and other communities like ours, to get on with it as best we can, as it is a market problem and market forces will sort it out. I am afraid that market forces will not solve that problem, and nor will they solve many others.

At the heart of a successful strategy for the marine and defence industries is a strategy to allow them to diversify. That is the secret of success and it will require the Government and the Community to act quickly. Inaction will confine many thousands of our fellow Europeans to the misery and frustration of mass unemployment for years to come. My hon. Friend the Member for Copeland (Dr. Cunningham) talked about 16 million unemployed people in the European Community, and that is a conservative estimate. I refuse to countenance confining some of the most highly skilled and gifted engineering workers in the Community to enforced unemployment, possibly for many years. It is imperative for the Government and the Community to take the sort of action that I have outlined to help the shipbuilding and defence industries.

6.57 pm
Mr. Ian Taylor (Esher)

I welcome the positive remarks about the Maastricht process that the hon. Member for Barrow and Furness (Mr. Hutton) made at the beginning of his speech. I hope that he will be a positive European in Committee, and I am sure that we shall find ourselves working closely together during those days.

I shall not embarrass him further, but I hope that he will have a word with those on the Opposition Front Bench. After the recent close vote on a Wednesday, I arrived in Amsterdam airport, waved my passport and was stopped. The customs officer said, "You are British, are you for or against Maastricht?" He did not even know that I was a Member of Parliament. I said, "I am for." He smiled and said, "You are not one of those British socialists then."

The Labour party has a lot of image-building to do after its unprincipled behaviour that night. My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen), who is no longer in his place, could also take note that he was dismissed by our Dutch friend as a British socialist.

The Committee stage of a Bill can be quite complicated, but during that stage of the European Communities (Amendment) Bill we must continually show the relevance of the process and of the European Community to the British people and to the problems that we face. Too often, we get bogged down in detail which is not easily understood, or we highlight the negative aspects of the European Community and emphasise what we are against rather than what we are for.

That relevance of the Community—the inextricable link between the economic and political development of the Community with happenings in this country and our efforts to revitalise the British economy—is why I particularly welcome the fact that at the Edinburgh summit we shall address the problem of how Europe as a whole can overcome the recession and the slow growth which is afflicting us and making all our political problems more difficult to solve.

That does not mean that we must have a sudden burst of further fiscal relaxation—in other words, more Government expenditure—and I noted carefully that the Chancellor of the Exchequer said that the funds would come largely from the private sector and the European Investment Bank. I welcome developments of that type.

At the same time, it is vital for the British people to understand that for a country which depends so much on trade—our trade with Germany is almost as large as our trade with America and Japan combined—we cannot solve our problems solely within Britain. We cannot have a British monetary policy solely for British conditions. If we tried to do that, either we would get a disproportionate fall in sterling, which would have inflationary consequences over time, or we would force up interest rates at the long end of the yield curve because we could not fund the British deficit.

We shall have to face that problem in the coming year. Our long-term interest rates are already above those of the Germans, even though our short-term rates are below theirs. The idea that we can enclose ourselves, when we are an open economy depending on movements of capital and trade, is false. That should be made clear to the British people. If we are to rebuild the British economy rapidly, as we hope will prove possible, we must also seek to rebuild the European economy.

It was for that reason that I intervened in the speech of the hon. Member for Copeland (Dr. Cunningham). Labour Members should not forget what the Chancellor was trying to do in the first few months of the British presidency. He was trying to get a common European approach to monetary policy, remembering that such an approach had been distorted during the last few months of our membership of the exchange rate mechanism by the fact that Germany was looking internally—I do not blame it for so doing—at the problems created by reunification.

There is nothing wrong with Germany looking internally, but it should be aware that the tensions created by reunification have resulted in monetary problems in other countries. If we respond through fiscal expansion, we must hope that Germany will examine its fiscal position as well. Help must be mutual, rather than competing with each other in monetary and fiscal policies.

Mr. Jonathan Evans (Brecon and Radnor)

My hon. Friend says that we cannot view British monetary policy in isolation. Will he look again at Germany's position? Does not the same analogy apply there, particularly in the context of today's money supply figures for Germany, showing that the 5.5 per cent. target for M3 has been exceeded to such an extent that it is now 10.2 per cent., no doubt as a result of the factors to which my hon. Friend referred in respect of European monetary movements in the last few months?

Mr. Taylor

I appreciate my hon. Friend's comments, but regardless of what the Bundesbank is saying just now—it has as many arguments with the German Government as it has with other Governments—and regardless of the situation in Germany in relation to monetary policy, many east and west German Members of Parliament are concerned with the effect of the hard deutschmark on German industry within the European Community. A headline in a German newspaper proclaimed recently, "German industry worried about strong deutschmark." These are difficult times, even if what that newspaper proclaimed meant a competitive advantage for us.

As I keep stressing, the real problem in the European Community—a market of 340 million people with the free movement of capital, goods and services—is that there must be co-operation on monetary policy, so it is inevitable that we must have a policy towards managed exchange rates.

Mr. Hoon

The hon. Gentleman says that it is impossible to have a British monetary policy for our monetary conditions and I share his view, but was that not precisely the way in which the Chancellor of the Exchequer introduced the autumn statement'? The Chancellor said that a cornerstone of the autumn statement was a British monetary policy for British monetary conditions. The hon. Gentleman voted for that last week. How does he reconcile his position?

Mr. Taylor

The Chancellor also said that he would have to set British interest rates while bearing in mind the position of sterling in relation to other currencies. So the hon. Gentleman is effectively agreeing with me, and I am agreeing with him. But we must make sure that the British people understand the interdependence in the Community. If not, they will want to take a very British position, and if the Government cannot deliver that position we shall face a credibility problem.

Another issue which has featured widely in our debates about the European Community is the 1992 programme. By 1 January 1993, that programme will be all but complete. Indeed, 95 per cent. of it is already complete. That represents a tremendous victory for Britain and we should shout it from the rooftops. It has not meant our taking a defensive stand against the European Community because of something being forced down our throats. We virtually invented the programme.

I pay tribute to the former Prime Minister, Lady Thatcher, who understood only too well that, if Britain was to open up the Community and remove restrictions, hidden and overt, to the free movement of people, goods and services, we needed a strong Commission to initiate legislation. It also meant that we needed qualified majority voting in the Council of Ministers, we had to make sure that no one country could block the efforts to open up the Community to the single market. Should she reflect on that, Lady Thatcher can remember with pride her efforts to push those measures through this House during our debates on the Single European Act.

It is essential for the British Government to make it clear that there will be times when it will be in Britain's interest to have a series of strong Community institutions. We would not wish there to be subsidiarity in the single market programme. If that were to happen, some preventionism and protectionism would re-emerge, particularly in France and Germany, in industries in which we have spent some years trying to break down such attitudes.

In terms of qualified majority voting and the single market programme, Britain has hardly ever been out-voted. Unless those points are properly explained, the British public will not understand why we have been in favour of strong European institutions. Nor will they understand why a valuable aspect of the Maastricht treaty is the fact that we are proposing to strengthen the powers of the European Court of Justice to make sure that member states which agree an action in the Council of Ministers do not then evade its implementation in their respective countries. The ability to fine is a cornerstone of that part of the Maastricht treaty. It strengthens a European Community institution, and it is in Britain's interest for that to happen.

A great triumph for the Prime Minister during Britain's presidency has been the progress to date in the GATT round, an issue of perhaps disproportionate importance to Britain because of our nature as a trading country. His determination has seen it through to the present stage. The Prime Minister has added strength because the European Community is negotiating as one. Once the European Council has asked the Commission to negotiate a common position in the GATT round and the Commission has returned with a unanimous recommendation, it is possible for there to be qualified majority voting in the Council for the acceptance of the GATT position. That, of course, is precisely why the French are now looking at whether the Luxembourg compromise can be taken out and dusted off—rather embarrassing for President Mitterrand if he decided to go that far.

I shall not go too far down that track, as I do not want to affect the very delicate negotiations which may be going on between the British Government and the French Government. The point that I am making is that it is vital for the British people to know not only about the success of our British Prime Minister in getting this far on the GATT round, but that this is a case in which strong Community institutions work in Britain's favour. That is something that it would be well worth my right hon. Friend the Foreign Secretary, who I see is in his place, making clear in the run-up to the Edinburgh summit.

We must be quite self-confident about the European Community. It is not something that threatens us: it is something which, when we are confident, we can use to our advantage. If we say that with a great deal of pride, it is because we believe that it is to our advantage and therefore to the advantage of many other people within the Community; but they will know that only if we say it positively. That is why there are so many positive Europeans on this side of the House, certainly dominating the Chamber on this side of the House at the moment.

Another aspect of the Maastricht treaty which we should note is the creation, as an official institution, of the Court of Auditors. That, too, is a British initiative and, again, it establishes a strengthening of the institutions of the Community which will look after many of the aspects that have concerned people in this country. I notice that the massive bundle of papers, which the Foreign Secretary has rightly said is for the benefit of the House, despite its weight, contains a report from the Select Committee on European Legislation on the report of the Court of Auditors for 1990. There are several recommendations in that which lead to a strengthening of the position of the Court of Auditors.

There is a further point which I think is very important in the context of Britain's interests. We very much welcome those members of the European Free Trade Area which wish to apply for membership of the Community. It is in Britain's interest that they apply. The whole process of negotiation of the ratification of the European economic area leading on to the negotiations for full membership depends very much on Britain taking the lead. The process of negotiation is in danger of being delayed unless the House moves fairly rapidly forward through the process of ratification of the Maastricht treaty. Until we ratify, there will be great areas of uncertainty and I believe that that will delay the effective handling of the negotiations with those countries.

It is in our own interest that those countries join as soon as possible, because they will all be net contributors. A balance within the Community where there is a proponderance of net contributors will go a long way towards resolving the kind of debates that we shall have at Edinburgh and beyond on the Delors plans and other aspects of the Community budget. There will be greater self-interest within the Community in seeing how money is spent and this will greatly assist the negotiating position of my right hon. Friend the Paymaster General, who is present on the Government Front Bench today.

A recent report by the Foreign and Commonwealth Office was reprinted in a document in the other place, which I cannot quote, but the indications there were that all the nations which were to apply—Austria, Finland, Iceland, Norway, Sweden and Switzerland—would be net contributors to the Community budget, particularly Sweden and Switzerland. This is quite an important tactical point, for a different reason.

The Danes are facing difficulties. The British Government have been very influential in trying to build bridges with Denmark, but when the Danish people consider their final position they will have to consider not only a Community with 11 members—I include Britain, because I hope that we shall proceed to Third Reading in this place by May, regardless of the Danish timetable—but a Community anxious to welcome other nations which surround it.

We, of course, would very much like Denmark to become positive about the Community. I am sure that we can deal with some of the Danes' worries and, in a legally binding form, tricky though that may be, with certain aspects of their worries about citizenship.

The reality is that the European Community needs to pull together: it needs to be stronger, and it needs to be stronger on a wider basis than the Twelve. If it is stronger and pulls together, it has a chance of coping more effectively with the economic problems which it faces at the moment. It is also in a much better position in a world which is increasingly uncertain and in which we shall be welcoming shortly a new American president who, however good he proves to be, is certainly, from some of the statements that he has made, a good deal more introverted in terms of policies than past Republican presidents have perhaps been.

This is a time for Europe to pull together and be strong; it is a time for the House to be positive about Europe; and it is a time to get on with ratification and remove one more uncertainty.

7.16 pm
Mr. Barry Jones (Alyn and Deeside)

I shall not follow the hon. Member for Esher (Mr. Taylor) except to reject the charge in his measured speech that there was unprincipled opposition on that now famous night. However, I agree with him about the objective of rebuilding the British economy and, to do that, the European economy.

I wish to speak on regional policy and industrial affairs. Frankly, my constituency and the surrounding sub-region will always need a regional policy, and so will Wales. Certainly Wales needed that £22 million RECHAR money recently allocated, at long last. To lose either assisted area status or access to Common Market structural funds would be disastrous. We appreciate the access to money from objective 2 status and the grants that accrue from development area status.

Since the Prime Minister took his high office, unemployment in Wales has risen by 35,000. Currently, my constituency has some 3,000 citizens unemployed and it has been worked out that the annual cost of keeping them unemployed and on the dole is some £27 million. For the 127,000 people in Wales who are unemployed, the annual bill is more than £1.1 billion. Even worse, in some respects, over the past two years Wales has lost 18,000 precious, almost priceless, manufacturing jobs. There are 18 people seeking every job vacancy in Wales. On my own Deeside, nearly 800 citizens are long-term unemployed.

As part of my case for retaining objective 2 status and assisted area status, I would say that in north-east Wales we have seen the loss of 1,100 Brymbo Steelworks jobs, 240 British Steel jobs at Shotton; 270 British Aerospace jobs at Broughton; 240 cement jobs at Penyffordd; and 80 jobs at the Brother factory near Wrexham. Also, in my constituency, a large construction company, McFadden, has gone into receivership and some 300 jobs are involved. Nearby, on the coast, the famous Hotpoint factory is scheduled to close. The famous Laura Ashley factory near my constituency has closed, with the loss of 240 garment-making jobs. To sum up, we have lost far more jobs than the new manufacturing jobs that we have gained.

My constituency, the sub-region and the county need the retention of development area status. We want continued access to Common Market moneys under objective 2 operational programmes. We need the continued reclamation of derelict land and the building of a new River Dee crossing, financed, we hope, in part by Common Market funds. We want the Deeside industrial park to be extended by 400 acres, as proposed by the Welsh Development Agency and Alyn and Deeside district council. We need more industrial units, more commercial premises and a new access road into Deeside industrial park. We also want a more vigorous overall economic strategy.

If we are to implement a vigorous economic strategy, we shall need continued access to objective 2 status moneys and assisted area status. We need European money to electrify the railway from Holyhead to Crewe, to create work and to attract more inward investment to north Wales.

Fortunately, we have made progress after Europe's largest ever redundancy programme at Shotton steelworks, in which more than 8,000 steelworkers lost their jobs under British Steel between Christmas 1979 and Easter 1980. It caused much trauma and hardship in my constituency when the blow fell in 1980. Since then, my constituency has fought back hard, and several thousand new jobs have been established on the Deeside industrial park. We have attracted some inward investment against tough competition and now have companies such as Toyota, Sharp, Hoya, Brother and Optec. We are glad of that inward investment, but we cannot be complacent, as much remains to be done.

Touche Ross has made an analysis of my constituency and the whole sub-region and county. Its report highlights the fragility of the local economy. Our case for retaining assisted area status is that Clwyd is in the worst third in Great Britain for unemployment. Based on the 1991 census, unemployment in Clwyd is nearly 25 per cent. for men and approaching 40 per cent. for women. That position has been deteriorating in the past 18 months.

The reports also says that the structure of employment in Clwyd is weighted heavily towards an economic sector in decline. That is most prominent in manufacturing, on which the region is 39 per cent. more dependent than the average for Great Britain. The pattern of employment is uneven, with most manufacturing concentrated in the east of the county. The region has below average gross domestic product per head when compared to the rest of the United Kingdom. Earnings are significantly below the national average and Clwyd has a small share of the country's senior, well-paid jobs.

Furthermore, new company formation is below the national average, although recent economic improvements resulting from a policy of pursuing inward investment have brought down unemployment. However, the jobs created have often been in low-wage, low-skilled assembly work and, thus, the local wealth creation that should have resulted from that activity has yet to materialise fully.

There are no higher education facilities in the immediate area. Rail communications remain poor and the region is distant from major markets and EC ports, a point that was made effectively by the hon. Member for Leominster (Mr. Temple-Morris).

The recent economic downturn has stalled and, in many cases, reversed earlier economic recovery. Unemployment in the county has risen sharply in the past two years. Recent Government policy decisions are not helping. My locality is threatened with the possible closure of the last remaining colliery in Clwyd, at Point of Ayr. If the closure goes ahead, it will mean 500 direct job losses and probably the additional loss of 1,000 local jobs. It would be wrong to close Point of Ayr colliery, which has done everything asked of it. I hope that the review will show its integrity by reprieving that colliery, among others.

We have suffered recent cuts in steel production by British Steel, which is still a major employer at Shotton. However, I warn the House that the steel industry in Europe is under massive pressure and that British Steel is in a serious predicament. A 20 per cent. cut in production has been imposed and only last week it announced losses in excess of £50 million. There is continued uncertainty over aircraft production, especially the executive jet at the British Aerospace factory in my constituency at Broughton. We need a regional policy, and we need to rebuild the British and Welsh economies.

The House may not know that, in the travel-to-work area of Aberdare, male unemployment stands at 19 per cent; in Bangor and Caernarfon in north Wales, it is 15 per cent; in Bridgend, it is 14 per cent; in Cardiff, it is 13 per cent; in Holyhead in Anglesey, it is a staggering 15 per cent; in Porthmadoc and Ffestiniog, it is 11 per cent; in Shotton, Flint and Rhyl—my travel-to-work area—it is 11 per cent; in the city of Swansea, it is 14 per cent; and in the town of Wrexham it is at 12 per cent.

Those figures are getting worse. I believe that the serious rise in unemployment throughout Wales is more than disturbing. It is an alarming development, as we see the loss of important manufacturing jobs, the steel industry under major pressure, and the coal industry on the brink of extinction. All the hard work and benefits of attracting inward investment are undermined when indigenous manufacturing jobs are swept away.

Wales must continue to have assisted area status grants. I warn the Government that they should not take away that hard-won status from the assisted area map of Wales. If they do, it will guarantee the loss of more manufacturing jobs. Wales should have continued and more access to European moneys. When we debate regional policy, it concerns the livelihood of communities and their future. There will be no future for manufacturing in Wales if the Government make the mistake of withdrawing one assisted area from the map.

7.28 pm
Mr. Anthony Steen (South Hams)

I hope that the House will listen to the plea by the hon. Member for Alyn and Deeside (Mr. Jones) and to some of the crystal ball speeches, foreseeing what will happen, which have been made on both sides of the House in the past couple of hours. My speech will be much different and a little shorter, as I wish to concentrate on the rules and regulations emanating from the European Community which are helping to destroy more and more businesses in Britain,

Nearly 30,000 small businesses went to the wall in the first nine months of 1992–5,500 of them in the south west. That is an increase of 42 per cent. over last year in the south-west. My right hon. Friend the Foreign Secretary spoke, in his excellent opening speech, of the over-zealous application of European Community rules and regulations. As a result of regulations emanating mostly from Europe, industries in the south-west have the most depressed and pessimistic employment prospects in the country. Many of the businesses blame the excess of regulations for the increasing gloom.

It is easy for blue chip companies to lobby Strasbourg and Brussels, but the little man in the little firm is plagued by regulations and cannot lobby in the same way. I am sure that you, Mr. Deputy Speaker, are familiar with DG23. It is not a spy ring, but a unit in Brussels—part of the British Government's commitment to the Community—responsible for the fiche d'impact system. As the House will know, the fiche d'impact system is the European equivalent of compliance cost assessment in the Department of Trade and Industry—the deregulation unit.

Nobody quite knows what the fiche d'impact system is. I have tried to find out from the Library, where I was passed around half a dozen people who were not familiar with it. They could not tell me where it appeared in DG23, how many people worked in it, or how much it cost to run. Does my right hon. Friend the Paymaster General have more information on it than the House of Commons Library has? Is it larger than the deregulation unit? Is it better? Does it do a different job? Does every country in Europe have one? How is the impact of it on each country evaluated and by whom?

The House has a responsibility to know more about the system and to learn exactly what its officials in a Government Department does. It seems that, every time we pass a new regulation, it has an adverse effect on industries in Britain. I wonder whether the same is true in all other European countries. Are they all finding that every time a regulation is passed in Europe it helps to undermine and ultimately destroy their small firms? If that is so, DG23 is an odd institution, as it appears to agree to regulations which undermine the success of industry.

When my right hon. Friend the Paymaster General winds up the debate, will he see whether DG23 could contain a provision that a percentage of European money should be spent on re-examining, 12 months later, the directives that the fiche d'impact system has considered? We need a sort of monitoring process to see how effective or ineffective the European regulations have been on our industry.

Our officials have much to answer for in respect of the problems faced by many of our small firms. The general economy is blamed, but the problem is more the fault of the regulations emanating from Europe. For example, new regulations have forced out of business many of the abattoirs in my constituency and those of other hon. Members in the south-west. One of my constituents told me that, as a result of an EC directive, he cannot buy a pork chop with the kidney in place. I do not know whether that is a myth or whether there is a new directive stating that a pork chop cannot be bought with a kidney in place.

Some butchers say that they cannot use ordinary sawdust on the floor, but have to use dust-free, flame-resistant and biodegradable sawdust. Doubtless it also has to be disease-free as a precaution against Dutch elm disease. Two independent small butchers in Devon have gone out of business. Some people will say that that is because of the economy, but the butchers say that they cannot afford, and are not prepared to cope with, the endless expense required to comply with EC directives from Brussels.

Another company complained about patent law. Before the European Community, legislation protected a product in this country for 20 years at a cost of about £5,000. A representative from a company called Kirby Devon said that there is now a European patent office, based in Munich. He said that the company now has to file a patent, costing £5,000—not just in Britain, but in every one of the European countries, at another £5,000 each. I cannot believe that that is true, but if it is, why are the fiche d'impact officials doing nothing about it, and why did they allow the legislation in the first place?

A representative from another of the companies in my constituency, 1st Class Roofing, has told me of the ever-increasing bureaucracy surrounding the disposal of rubbish. Apparently, there is so much paper in the new regulation that a new tip has had to be created to dispose of the paper produced by the regulation. A licence is required to carry rubbish, then tickets have to be purchased to dispose of the rubbish at tips, a ticket is given to the tip operator and a form is then printed in triplicate. All of that paper has to be disposed of, and new tips are being created to dispose of the paper emanating from the regulation.

A representative from a retail store with three retail outlets said that the annual cost of implementing the health and safety regulations was £55,000 a year, and that of implementing the building regulations, £30,000. The store wanted to provide a creche and was told that it had to subsidise it at a cost of £400 a week.

In addition, there is the Electricity Act 1989, the Environmental Protection Act 1990, hygiene regulations, and the Food Safety Act 1990. Ice cream manufacturers in Devon are being pursued by the water authority. Another retailer feels persecuted by the Government because of the mountain of statistical information required. The construction industry is overwhelmed by new regulations.

I know that my right hon. Friend the Paymaster General will probably say that not all the regulations emanate from Europe. He is probably right, but the regulations are being pursued with such vigour and enthusiasm by public sector officials and staff, not just in Westminster but in town and county halls throughout the country, that our industries are being damaged and their profitability is being destroyed. Will my right hon. Friend say something about that when he winds up? If nothing is done about it, the regulations will continue to destroy and undermine the profitability of our industries.

As I understand it, subsidiarity means taking the decision at the most appropriate level. If EC regulations affecting small businesses are not worked out correctly by the fiche d'impact staff in a manner sensitive to the needs of local communities, most of those regulations will continue to cripple firms. However, I am concerned that the regulations do not seem to have the same effect in other EC countries.

Why are we in Britain applying rules and regulations while Greece, Portugal and Spain—to mention just three countries—do not seem to be imposing the same regulations at the same speed? When I put that question to Ministers, they say that Britain must be the leader. It seems crazy for us to be the leader if it means that we destroy all our small firms, which the Conservative party is committed to supporting. It is crazy if, by putting into practice rules that the fiche d'impact officials in Brussels have not scrutinised carefully, we undermine our industry while Greece, Portugal and Spain carry on as though the regulations did not exist.

There should be a level playing field—to use a famous phrase—throughout Europe. Until the other countries in Europe put into practice the same regulations, whether good or bad and whether or not they have been through the fiche d'impact system, those rules should not be applied in Britain. Will my right hon. Friend the Paymaster General seriously consider the issue because I think that the House will agree that British enterprises should not suffer from regulations emanating from Brussels if other EC countries are not enforcing them?

In that way my right hon. Friend the Paymaster General could help the country out of recession. He could also ensure that council officials and the Government ease off and do not apply the rules and regulations so vigorously. The Foreign Secretary mentioned extra enthusiasm. I ask officials to exercise normal compliance so that we do not keep on punishing small firms, which have dreadful cash flow problems and cannot manage to invest more money, more man management or more training in the new rules and regulations which are constantly coming from Europe.

I said that I would keep my comments short. I think that I have made the best contribution I can in the time available.

7.40 pm
Mr. Alex Salmond (Banff and Buchan)

I shall certainly follow the hon. Member for South Hams (Mr. Steen) in being brief. I want to speak specifically about one of the few working common policies in Europe, the common fisheries policy. To paraphrase Nye Bevan, because it is a working, existing policy we do not need a crystal ball to see what might happen; all we need to do is look at the book to see what has happened and what is happening.

Justice has not been done to the common fisheries policy or to the fishing industry through scrutiny by this House. A few weeks ago, rightly, we had a major debate about the future of 30,000 mining jobs throughout the United Kingdom. There are 30,000 jobs in Scotland alone dependent on the health and welfare of the fishing industry and not far off that number again in the rest of the United Kingdom.

Yet at a time when the common fisheries policy is undergoing substantial fundamental review, or perhaps even replacement—we cannot be sure because the relevant document refers to it being reviewed, replaced and amended—there has been no debate about it in the House. Major changes are being made to take forward the policy for the next 10 years, but we had to wait 10 months for the matter to be examined by the Select Committee on European Legislation. We have had no debate on the Floor of the House about the fundamental review of one of the few working common policies within the Euorpean Community. It does the House no credit that the fishing industry should be dealt with like that.

When final decisions are made, as is likely to happen at the Fisheries Council in December, the best that hon. Members from fishing constituencies can expect in the House is a brief debate immediately before the Ministers go to Brussels when, in all likelihood, decisions have already been made and we will be debating in effect a fait accompli. That is the inadequate scrutiny which the House currently gives to a major European policy which is under fundamental review.

Like many hon. Members, I am looking forward to the European summit in Edinburgh. If I interpreted correctly the world-weary speech of the Foreign Secretary, what happens outside the conference chamber may be as exciting as, if not more so than, what happens inside. I am sure that the people of Scotland will take the opportunity to display to the heads of state and the European visitors who come to our capital city the fact that the vast majority of them do not wish to tolerate a situation where fundamental decisions affecting the future of the entire continent can be made in the capital city of Scotland without the Scottish people having any direct access to the conference chamber or proper representations of their views and ideas about the future of the continent.

Among the many demonstrations, the mini-summits, the youth summits and various activities which are planned, there will be a major demonstration by the fishing community. It will be demonstrating its concerns about the review of the common fisheries policy and its opposition to the Sea Fish (Conservation) Bill which is going through Parliament. Thankfully, I understand that the other place amended that measure substantially this evening. In particular, there will be a major demonstration at the inaction of Fisheries Ministers, who, by their dereliction of duty in Brussels last evening, condemned Scottish fishing communities to another five weeks of anxiety and dislocation.

Looking round the Chamber, I can see only one fisheries Member, the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy). The hon. Member for Greenock and Port Glasgow (Dr. Godman), who is also present, is a substantial friend of the fishing industry. Let me explain, therefore, to hon. Members what is happening within the common fisheries policy.

In Scotland the haddock quota is exhausted and no haddock is allowed legally to be landed until the end of the year. Hon. Members may say, "That is fair enough; there must be a problem with the stock and the limitation on fishing is essential for conservation." That is not the case, The seas round Scotland are teeming with haddock. That is not just because the fishermen are catching them and discarding them dead in thousands of tonnes into the North sea, because once a fish is caught it cannot be released alive into the sea. The fishermen are not allowed to land the fish. It is also because in, their evidence to the next Fisheries Council, scientists will propose a doubling of the haddock quota in the North sea next year.

We had an amusing debate last week in the European Standing Committee about Hogmanay haddock. For the benefit of hon. Members, I will explain. These are haddock which, according to the official explanation, do not exist; they cannot exist because the quota system says that they do not exist, but miraculously they will materialise on 1 January when the quota will be doubled and we will be moving from a shortage to a glut. Common sense tells us that these will be the self-same haddock, but to fulfil the requirements of the quota policy, the fishermen are not allowed legally to land the haddock at present. Therefore, thousands of jobs in the fishing industry in Scotland will be subject to dislocation over the next five weeks and there will be a very bleak Christmas for many families in the fishing communities.

Dr. Godman

May I point out to the hon. Gentleman that many of my constituents believe that it is a heinous sin to discard the fish and that it is much better to sell them on the black market, even if that is illegal under European Community rules?

Mr. Salmond

It would be extremely difficult to argue that the discarding of fish dead into the North sea represents any sort of a conservation policy.

The burden of my remarks is to suggest a solution to the problem. The Foreign Secretary told us about Euromyths. He has even published a booklet to help hon. Members to understand that many of the things we hear about the European Community are not the fault of the Community but myths spread in the press and elsewhere which bring the Community into disrepute. I suggest that it is not the Euro-myths which bring the Community into disrepute but the actions and inactions of United Kingdom Ministers who fail to pursue proper negotiations within the European Community.

What should have been proposed to the Fisheries Council yesterday by the two Ministers representing the United Kingdom was a simple mechanism of borrowing forward on next year's haddock quota to solve the immediate problem and not jeopardise the long-term stability of the industry. There was precedent for such a proposal because other countries have used that exigency in the past. A vital national interest was at stake, certainly for Scotland. It is not just that 78 per cent. of the haddock caught in the North sea are part of the United Kingdom quota; the important point is that no other member state has the same vested interest in the haddock quota as the United Kingdom, and particularly Scotland. Therefore, no one had a vested interest in stopping an adjustment of the quota.

Within the Commission documents proposing the review of the fisheries policy there is a move away from annual quotas to multi-annual quotas. Therefore, there would not even have been a damaging precedent set for annual quotas, because they will disappear under the proposals of the Commission.

It would have been bad enough if Fisheries Ministers, with that wealth of argument at their disposal, had come back and told the House that they had tried but failed, but the reality of what happened in Brussels yesterday is that the issue was not even placed on the agenda by the Scottish Fisheries Minister representing the United Kingdom in negotiations. Therefore, I hope that hon. Members will understand the present anger in fishing communities in Scotland at the total dereliction of duty by the Scottish Fisheries Minister, the Under-Secretary of State for Scotland.

May I now generalise from the particular. What does that example of the confusion and chaos in fisheries policy tell us? Is it a result of the common fisheries policy itself or a result of the negotiators from the United Kingdom not having enough interest in the subject to secure the common-sense solution that was available for the fishing communities? Is it an example of where subsidiarity might have applied?

There is more than enough reason to believe that the Scottish Fisheries Minister is a nice man, but has no power because he is overruled by his ministerial superior in the Ministry of Agriculture, Fisheries and Food. Certainly it is an example of where there would have been a different outcome if Scotland were an independent state within the Community. No genuine Scottish Fisheries Minister could have survived in post after having so signally failed to raise an issue of such importance at the relevant Council meeting.

I was somewhat stung earlier by the Foreign Secretary telling me that I have an old-fashioned view of the EC. I think that I have a modern view of the EC. I may have an old-fashioned view of politics. I think that Scottish Office Ministers should try to defend the interests of the industries for which they are responsible. I was stung because I cannot think of an hon. Member who is more Edwardian in his approach to politics than the Foreign Secretary. If ever there was an hon. Member who was born after his time, it is the Foreign Secretary.

The Foreign Secretary, in that way of his, waved his hand and told us to consult the documents supplied to the House and the principle of subsidiarity from the Commission. Many of us have consulted just those documents to find the following description; This common sense principle therefore dictates that decisions should be taken at the level closest to the ordinary citizen and that action taken by the upper echelons of the body politic should be limited. It goes on to say that the first application of that political principle of subsidiarity is in many cases within the states of the EC itself.

The essential hypocrisy of the Government's attitude to subsidiarity is that they believe that the principle can be applied to the relationship between the United Kingdom and our European partners without the same principle being applied within the United Kingdom. On that point of hypocrisy, I suspect that the Foreign Secretary, come the Edinburgh summit, may find that it is not "Scotch on the Rocks" but a Prime Minister and Foreign Secretary on the rocks.

7.52 pm
Mrs. Edwina Currie (Derbyshire, South)

First, I add my congratulations to those of a number of hon. Members on the Government's success in the GATT agreement. More than anything else that we might do at the moment, the successful conclusion of those five years of negotiation, involving 108 countries and 28 different agreements, will do more for world trade and prosperity than almost anything else that we might do. If that is the only success of our six months' presidency of the EC, it is a substantial success, and one to which we shall look back in time to come with much gratitude.

I also join my hon. and learned Friend the Member for Perth and Kinross (Sir N. Fairbairn), who has clearly found something else to do at 8 o'clock in the evening, in his protest about the papers. Every hon. Member who has gone to the Vote Office to collect that great heap that is now sitting on the Table has grimaced at seeing it.However, anyone who has ever seen the monthly papers that come out of Derbyshire county council would not be in the least surprised at that quantity of paper, bearing in mind that, for every person employed by the European Commission on any of its budgets, Derbyshire county council employs two in Matlock, and very few of us can see exactly what they get up to.

A great deal of that paper has been around for a very long time, and much of it was written in London. The most incomprehensible chunk of all was written in Her Majesty's Treasury. The explanatory memorandum on the transfer of administrative appropriations says: Attached to the paper are a number of annexes covering a breakdown of outside (non-statutory) staff; the criteria for converting appropriations to posts (and for the continued use of outside staff); the technical procedures to be used to incorporate administrative appropriations from Part B into Part A of the budget; and criteria for distinguishing between appropriations for studies, consultants, meetings, conferences, information and publications, which are to be transferred to Part A, and those likely to remain in Part B of the Commission's Budget. This is an explanatory memorandum. The subject is transparency of management. If that is an explanatory memorandum, it is no good. Most of the other stuff produced by the Treasury is in the same form. The explanatory memoranda produced by the Foreign and Commonwealth Office are much better and clearer and I commend their style to my colleagues in the Exchequer. Such documents appear to be written by someone with English as his third language.

Mr. Ian Taylor

Will my hon. Friend help the House by reading that for the record in the other Community languages, in which I am sure it will sound much better?

Mrs. Currie

I would like to bet that it is comprehensible in French, but it is not comprehensible in English, and it should be. If we are to be presented with explanatory memoranda to assist us in debating these important matters, I hope that they will be much clearer in future.

Those hon. Members, particularly Conservative Members, who have said that we should face our future in Europe with resolute, determined and positive attitudes are right. We should see the challenges that face us not as unpleasant or unacceptable, although they are difficult, but as opportunities. We should ensure that we in the United Kingdom benefit by taking advantage of those opportunities, particularly on trade.

I speak from a strong position in south Derbyshire, because the Toyota factory will soon be starting production in my constituency. It is a remarkable achievement to open a new factory so fast and with a brand new model, the Carina E—E for Europe—a redesigned model intended for the European market. That is a tremendous credit to all concerned.

Toyota is here because we are in Europe. It would not be in the United Kingdom if we were not an active and full member of the Community. It is here because, within the Community, the United Kingdom presents the most attractive business environment, with our low taxation policy, few restrictions on business and our refusal to accept the social charter. We are very much at the heart of Europe.

Ms. Joyce Quin (Gateshead, East)

Has the hon. Lady seen the recent report by Ernst and Young, which says that there are some worries among would-be investors in the United Kingdom because we now seem somewhat semi-detached from the rest of Europe, and because of the double opt-out in Maastricht there is a question mark over investment? As my hon. Friend the Member for Copeland (Dr. Cunningham) said earlier, investment has dropped.

Mrs. Currie

Worries about the United Kingdom becoming semi-detached or being in any way half-hearted are a reflection of small majorities in the House. If the hon. Lady and her hon. Friends feel that way, they should be voting with us on every aspect of the European Communities (Amendment) Bill and ensuring that we have the thumping big majorities that we had on Second Reading which this country needs.

Toyota is in the United Kingdom not only because we are in Europe but because of the British approach to international business which has made such companies more welcome, unlike the French, who have spoken in hostile terms about the Japanese, and unlike the trade unions, who have called their practices alien, a comment which rankles, and which continues to hurt them.

We fought for Toyota's cars to be accepted as British and European. When I say "we", I mean that I fought for them. I went to Strasbourg. Our European Member of Parliament, the hon. Member for Stoke-on-Trent, South (Mr. Stevenson), who is not in the House at the moment —goodness knows where he has got to—did not fight for them. The Labour Member of the European Parliament who sits for Dagenham was responsible for the proposal that Japanese vehicles built in this country would have counted as Japanese and as imports. I was pleased that I was able to go, and that we were able to have that policy thrown out.

Such action is part and parcel of meeting the challenges and of welcoming outside stimuli to this country—rather that than sit on our backsides and moan about the difficulties. Most of all, as a nation we must get out and sell not only our products but ourselves and our communities.

There are huge benefits in adopting that attitude Toyota now employs 1,000 people in my constituency, the unemployment rate in which was 6.7 per cent. in October and falling. Of the 10 Derbyshire constituencies., unemployment is falling in six and static in three. Unemployment is rising only in the constituency of the hon. Member for Bolsover (Mr. Skinner). The fastest fall in unemployment last month was in the constituency of the hon. Member for Derby, South (Mrs. Beckett)—but you would not hear her say that.

That improvement is partly due to the impact not only of Toyota but of other locally based international businesses such as Nestlé, Pirelli, Asea Brown Boveri, Stanton—which is now owned by St. Gobain—and GeGa Lotz, a German company. Unemployment has also fallen nearby in Burton-on-Trent and north-west Leicestershire.

Derbyshire could have retained—as several hon. Members suggested—the dominance of old, nationalised, subsidised and protected industries. It could have begged for subsidies, but it never has done so. South Derbyshire does not receive subsidies, enjoy special status, or get grants. We do not want grants, believing that draws attention to problems rather than to the opportunities for inward investors and business people.

Derbyshire chose instead to cultivate international businesses as the motor heart of Europe, and it did so. I will not mislead the House—the transition was painful, but very worthwhile, and I commend it. I would like to see the same positive attitude pervade the rest of our great trading nation—and that must start with the Government. If they are concerned about the negative tone of some of their supporters—a tiny minority in the House—they must consider whether they have only themselves to blame.

Every time that Maastricht or some other European policy is presented in a negative way, a few more decide against it. If we talk about subsidiarity not as an essential clarification and strengthening of the relationships between nations and central organisations but in negative terms—as "restricting the powers of faceless bureaucrats" or "the centralising tendencies of the Brussels machine"—which is the phrase used by my right hon. Friend the Secretary of State—the Government should not be surprised if a few of my right hon. and hon. Friends say, "We hear you, John. We are with you, Douglas. We will vote against the lot."

If every effort to bring down invisible trade barriers is portrayed as Brussels bureaucrats interfering in the noise emitted by lawnmowers or motor bikes, of course some commentators will think that the whole thing is a pettifogging waste of time. Lawnmowers are made in my area, and we needed to bring down those invisible trade barriers. I regard it as insulting that that aspect—which resulted in a success in enabling and improving trade for this country—appeared in the Foreign Office booklet "Euromyths". I received an apology, but I hope that reference will be removed in the next edition and that it will instead concentrate on successes.

I am proud to be a founder member of a group of Conservative Back Benchers who are positive Europeans, and who numbered 75 at the count yesterday. We outnumber the sceptics two to one, and are otherwise known as "Whitney's wonders" after my hon. Friend the Member for Wycombe (Mr. Whitney), who is not in his place at the moment, and who yesterday was elected as our chairman. I pay tribute to him and to my hon. Friend the Member for Esher (Mr. Taylor) for calling that group together.

We urge the Government to get on with the Maastricht Bill and to secure its Third Reading as soon as possible—certainly by May—and not link it to whatever goes on in Denmark or anywhere else.

Why should this proud nation hide behind any other country? Why should our country even dream of being the last in Europe to ratify the Maastricht treaty—particularly when the treaty that we are now debating and discussing is different from, and better than, that achieved by other nations—who are jolly envious.

I urge the Government to be altogether more positive about Europe from here on in. If I may phrase this in the double negative style that seems to float around Front Benches, I beg the Government not to forget that they should not get so bogged down in the detail that they ignore the necessity of explaining to the British people and the House the broad thrust of what they are trying to achieve and their objectives. With all the talk of budgetary discipline, auditors, subsidiarity and the rest, we are trying to build a Europe that is strong, competent, and free.

I urge the Government not to get so hung up on the problems that currently face the Community that they fail to promote and to draw attention to the Community's hugely beneficial benefits, of which my constituency has concrete evidence right now. Those benefits are the fruits of previous changes fought through the House, such as the Single European Act, which in retrospect were enormously helpful. The results that they brought in my own area are leading to growth and prosperity—the like of which we have never seen. I commend those thoughts to the House.

8.5 pm

Mr. Geoffrey Hoon (Ashfield)

It is one of those nice ironies of parliamentary life that I follow the hon. Member for Derbyshire, South (Mrs. Currie), because in due course I shall be leaving the European Parliament to concentrate on my work in the House, whereas I understand that the hon. Lady is about to abandon her constituents for the prospect of a seat in the European Parliament.

Mrs. Edwina Currie

I am going the right way.

Mr. Hoon

The hon. Lady will at least be able to fight for her constituents, wherever they may be, from the Floor of the European Parliament—rather than from its gallery, where she did her fighting on behalf of Toyota. In any event, I wish the hon. Lady every success in her efforts to secure a candidature, but I warn her that the present opinion polls do not look particularly favourable for Conservative candidates for the European elections in 1994.

Rarely has any presidency of the European Community been subject to so much criticism as that of the present British leadership. Usually, disappointment with the performance of any country's presidency is expressed only at the end of the six-month term of office—and then only in muted diplomatic niceties about the numbers of directives passed or agreements reached. Sadly, we have open, clear, and condign criticism of the British Government's handling of a series of Community issues.

Central to those issues are the related budgetary and financial questions which are the essential subject matter of today's debate. The Government consistently criticise the way in which the Community spends its income, so it was not unreasonable to expect during the British presidency evidence from the Government that they are sorting out the interlocking difficulties currently on the agenda of the Community's Finance Ministers.

The 1993 Community budget appears to be heading for considerable difficulty because of the wide gap between the Council's position—after the ruthless cuts in the Commission's draft budget, in which the British Government lead the way—and that evident in amendments tabled by the European Parliament. Many analysts suggest that that will lead to the budget being rejected, the collapse of the budgetary process and further difficulty for the United Kingdom presidency.

Other issues include continuing discussion about the Delors 2 package, particularly in the light of its recent revision by the Commission, and negotiations for a new inter-institutional agreement to replace that which lapses at the end of this year.

I shall deal first with the 1993 budget. It is not clear whether the British Government have accepted the arguments in favour of a real strategy for European growth backed by funds from the European Community budget. If the British Government endorsed such a strategy, that must have been received by European Finance Ministers with a mixture of amusement and incredulity as those same Finance Ministers have heard British Governments consistently oppose and even refuse to discuss plans for employment and economic growth throughout the European Community. We understand that until recently the British Government even opposed the idea of economic growth being a separate item on the agenda for the Edinburgh summit.

Perhaps we are right to remain cautious about the prospects of some blinding conversion on the road to Brussels for our Government. After all, during consideration of the 1993 draft Community budget, the British Government led the Council of Ministers into a series of deep cuts in expenditure on the very programmes which could form the core of any European package for recovery and growth.

The British Government have cut at least £2.8 billion from the total budget set out by the European Commission. It is interesting to measure what has been reported about the Government's so-called commitment to European economic recovery against the individual items in the draft budget which they and their colleagues in the Council of Ministers have cut. The Government have cut £240 million from regional and social spending. Previously, under a series of different presidencies, regional and social spending was generally left untouched. The Government, however, think it appropriate to cut £240 million off the Community's budget for regional and social spending.

The Government have cut £320 million off the Commission's figures for research spending at a time when almost everyone accepts the importance of further research to enable European industry to be truly competitive, especially in relation to far eastern countries. If we are to be competitive in new technology and electronics, we need the research spending that has been cut by the Council of Ministers.

A further £160 million has been cut from a series of projects covering education and training, environment policy and consumer protection, all of which are vital to the continuing health of the European economy.

I shall make a comment about one other area of council cuts in the light of the Foreign Secretary's opening statement. He waxed rather lyrical about the need for openness in the European Community. He spoke about the need for information about Europe and for the people of Europe to understand the European process. Unfortunately, his remarks about openness and information must be measured against the determination of his Government to preside over a cut of almost 50 per cent. in the European Commission's information budget. That is hardly an appropriate way to ensure that the people of Europe become more informed about the processes of the European Community.

The Council of Ministers has slashed the proposed cohesion fund from £1.25 billion to zero. That money was aimed precisely at the growth and convergence which the Government say that the Community neeeds. The money was promised as the price of agreement over Maastricht. It is compensation for the poorer outlying areas of the European Community and the centralising tendency of Maastricht. Of course, the money is an essential part of the Delors 2 package which has been revised by the European Commission.

Mr. Milligan

The hon. Gentleman is complaining about the cohesion fund. Is he aware that the cohesion fund cannot be set up until the Maastricht treaty is ratified because it is part of the treaty? If he wants to see the fund set up, the best way to do that is to persuade his Front Bench to give full support to the ratification of the Maastricht treaty.

Mr. Hoon

I am grateful for that observation. I anticipate that the position of the Labour party on the constitutional process of ratifying the Maastricht treaty will remain very much what it was on Second Reading. We shall not be diverted in the way in which the Government want us to be diverted—along paths established solely for the benefit of the Conservative party to paper over the deep cracks that have emerged in that party.

We want to see a cohesion fund as part of the Maastricht agreement. Clearly, we also want to see a policy for the European Community which emphasises not just centralisation but the contribution that can be made to the Community by all of the countries working together equally. That is why we have considerable sympathy for the Delors 2 package, which is the second subject that the Government must address.

What is the Government's position now, in the light of the revision of the Delors 2 package which has been agreed by the European Commission? The Government have wanted consistently to provide a longer-term perspective for European Community financing. The reaction that the Commission have consistently had from the Government is scorn. The Government have consistently rubbished the efforts of the European Commission to put the enlargement of the Community into perspective and provide assistance to eastern Europe at a time when they are saying that economic development in eastern Europe and enlargement of the European Community would be a good thing. Yet when the Government are faced with proposals to implement those principles, they suddenly find that they cannot go along with them.

So there is a matter on which it would be possible for the Government, leading the European Community in the way the hon. Member for Derbyshire, South advocated, to put into practice the leadership of Europe that is so vital. It is necessary to have extra money to enable countries to develop and to enable areas which have only recently been released from totalitarian Governments to develop economies of the sort which I assume that the hon. Member for Derbyshire, South wants to see. Extra funds can be made available only if there is a commitment by countries such as the United Kingdom and other countries in the European Community.

The European Commission has backed down considerably in its original programme for the cohesion fund. It backed down in a way which is, frankly, unlikely to find favour with the European Parliament. The European Parliament has stressed the need for a substantial increase in that part of the Community budget which is available for eastern Europe and development. It has also stressed the importance of making more of the present Community budget available for internal policies. It remains to be seen whether the Commission's revision of the cohesion fund will find favour with the European Parliament. That is where the Council and the British Government need to direct their arguments in the budgetary process. They need to find an agreement which will satisfy the European Parliament.

The Council and the British Government must satisfy the European Parliament with a new inter-institutional agreement. The 1988 guidelines lapse at the end of 1992, at the end of the British presidency. Therefore, it would have been sensible, and one could have expected the British presidency to be well under way in the process of reaching a new inter-institutional agreement for 1993 and the years beyond. Sadly, however, that appears to be far from the case. The negotiations involving the Council, the Commission and the Parliament seem to have made modest progress to date. There is a meeting tomorrow between the Council and members of the parliamentary budget committee, but no one is confident that any real agreement will result from the meeting or, indeed, that any agreement will be reached before the end of the financial year.

A new inter-institutional agreement is a priority for the Commission and the European Parliament. It remains to be seen whether a new agreement is a real priority for the Council. Without a commitment to the Delors 2 package as part of the arrangement, an agreement is unlikely to find favour with either the European Commission or the European Parliament.

The package must involve measures to improve the industrial competitiveness of the European Community. As the Foreign Secretary said earlier, it must involve the development of trans-European networks in transport, telecommunications and energy. However, those policies need funding to make them work. So far, the Government have been strong on saying that the ideas are good but extraordinarily weak on putting into place the financial support which could make them happen.

Those are precisely the areas which have been hit hardest by the Council's revision of the Commission's draft budget for 1993. It is extraordinarily difficult to take seriously the suggestion by Conservative Members that the present Government are deeply committed to the European Community; given an opportunity to demonstrate that commitment in the context of the 1993 budget debate, the Government ducked the responsibility.

I want to see real leadership from the British Government in relation to the financial and budgetary difficulties faced by the Community. They could use their presidency to sort out clearly, on behalf of the Council, problems whose solution would gain them widespread support across the Community. I suggest a modest package of measures which would go a long way towards resolving the three main areas of difficulty.

First, there should be an agreement on the cohesion fund, and a doubling of the structural funds, to provide employment and training across the Community. Secondly, there should be a restructuring programme to take account of the employment consequences of cuts in defence spending. Thirdly, there should be a programme to ensure improvements in vocational training across the Community. Finally, there should be a commitment to the Community's responsibility to the countries of eastern Europe—and, indeed, those of the developing world—at the level suggested by the Commission in its draft 1993 budget.

If the Government have the courage and conviction to adopt such a straightforward and sensible package, their present difficulties within the Community will disappear. The package would appeal to the European Parliament and would lead to a swift settlement of any difficulties remaining over the 1993 budget; it would endorse the main elements of the Delors 2 package; and it would set in place the building blocks for a new inter-institutional agreement. That would be a real achievement for the British presidency in its six months.

8.21 pm
Mr. Stephen Milligan (Eastleigh)

By and large, Opposition Members' speeches have been couched in constituency terms, and that of the hon. Member for Ashfield (Mr. Hoon) was no exception. They have contained pleas for more help for steel, shipbuilding, fisheries or regions. Taken together, however, they carry a clear message—that there should be higher public spending and higher borrowing. I do not believe that that would work in Europe, for the same reason that it would not work in this country: it would mean higher taxation and higher interest rates. Such an approach is not the best way in which to create jobs; it is the best way in which to stop recovery in its tracks.

The hon. Member for Copeland (Dr. Cunningham) heaped on the Government much abuse for what he said that they had failed to do during the British presidency. He said, for example, that they had failed to deal with the problem of unemployment. It is a bit rich to hold the British presidency responsible for rising unemployment across Europe. The hon. Gentleman does not seem to have noticed that unemployment is also rising in Japan, the United States and, indeed, every industrialised country in the world.

Perhaps the hon. Gentleman has forgotten what happened under the last Labour presidency of the Community, which I had the misfortune to witness as a journalist in Brussels. It is difficult to remember a time when this country was more unpopular in Europe. Hon. Members may recall the time in the 1970s when a Labour Government opposed direct elections to the European Parliament, and opposed not just our joining the European monetary system but the very creation of that system. Then, Labour was opposed to a common energy policy—and, of course, it faced economic catastrophe at home. I do not think that comparisons based on presidential success befit Labour Members.

I believe that today we have some reason to be proud of our achievements in Europe, if we consider those achievements over a longer period. When we joined the European Community, we joined a Community which was primarily agricultural, paying very high prices to prop up French and German farmers. We joined paying a wholly disproportionate amount into the European budget. Now, that Community is slowly but surely changing: in the six months of the British presidency, a number of significant alterations have been made.

First, there has been a change in the budget. Under the leadership of my noble Friend Baroness Thatcher, we made significant reductions in the British contribution, amounting to £14 billion over the period concerned. I consider it vital that the British abatement is maintained, but I also think it important for us to resist excessive public spending of the kind proposed in the Delors 2 package. Someone must pay for it: it is not a free ride.

It is significant that, when British Ministers talk of excessive spending, waste and fraud in the Community, they now have allies—most notably the Germans. I was surprised to hear the hon. Member for Ross and Cromarty (Mr. Kennedy) say, when challenged on who should pay more towards regional spending, that he thought that Britain was not paying enough into the European budget.

Mr. Kennedy


Mr. Milligan

Perhaps the hon. Gentleman would like to explain.

Mr. Kennedy

On a point of fact, I am the Member of Parliament for Ross, Cromarty and Skye; but let us leave aside that particular principle of additionality. I was merely making the point that, when it comes to nation state contributions, this country has constantly abused the principle of additionality by replacing projects that would otherwise have gone ahead, and making them additional in the eyes of the Commission. I was criticising the way in which the system has been operated by the Treasury, both historically and currently.

Mr. Milligan

I am delighted to hear that clarification. I take it that the hon. Gentleman thinks that we are not paying enough, and also thinks that we should reduce the amount that we pay to the Community budget!

Incidentally, it is an unhappy fact that our gross national product is now below 90 per cent. of the Community average, which will make us eligible for payments under the cohesion fund if the Maastricht treaty goes through. I hope that Ministers will not be too timid in applying the fund. It may be embarrassing that our GNP is below 90 per cent. of the average, but, if there is money for Britain, I hope that we shall put in for it.

Secondly, there has been reform of the common agricultural policy. We have made great strides in the past few years, mainly because of the freeze in prices, the introduction of quotas and the reduction of agricultural output; but I believe that the GATT agreement will constitute a decisive step towards CAP reform.

Then there is enlargement. We are now quite close to an agreement to admit Austria, Sweden and Finland, and —I hope—eastern European countries soon after that. The sooner that we ratify the Maastricht treaty in the House, the sooner we can begin enlargement negotiations. As the first three countries to join will be net contributors to the budget, this country has a direct financial interest in their joining as soon as possible—which is a further reason for our ratifying sooner rather than later.

The concept of the single market is very much a British concept, to which Lord Cockfield contributed in particular. It is about to become a reality in January.

Finally, there is subsidiarity—a new idea, developed over the past 18 months, which is very much in harmony with the traditional British idea of trying to reduce the influence of bureaucrats and to decentralise the Community.

I believe that subsidiarity is the key to why the Maastricht treaty should be ratified. Many hon. Members have asked what it actually means: is it legally enforceable? There are some doubts about whether a few paragraphs in the treaty are clear. If hon. Members want to understand what subsidiarity really means, they should go to Brussels, and visit the Commission and the various delegations—as I did a couple of months ago with my hon. Friend the Member for City of Chester (Mr. Brandreth). They will be amazed at the change in attitude among national delegations. It is no longer just the British, the Danes and the French who are canvassing for subsidiarity; the Germans are doing the same. As my right hon. Friend the Foreign Secretary pointed out, Chancellor Kohl has now strongly embraced the concept, and is actively campaigning in favour of it.

If hon. Members visit the Commission building, they will find that the number of propositions for Community law has been reduced by two thirds. I pay tribute to Jacques Delors. I know that that may seem heresy to some of my hon. Friends—

Mr. Whitney

They have all gone to dinner.

Mr. Milligan

I am happy to hear it.

In the past 12 months, Mr. Delors has radically changed the Commission's approach, and has demanded that every proposal that comes to his desk should have a piece of paper attached to it explaining why the proposal should be dealt with at European rather than national level. That is one reason why the number of proposals has dramatically declined.

Mr. Delors has also made one decision that my constituents particularly appreciate. Hon. Members may remember the dispute about the completion of the M3 at Twyford down, and the Commission's suggestion that it knew better than the British Government which side of St. Catherine's hill the motorway should go. I accept that the Commission and the Council have a right to interfere in environment policy if we are producing acid rain by pumping sulphur dioxide into our atmosphere, but it is absurd for the Community to try to decide matters such as the route for the M3. I pay tribute to Mr. Delors for withdrawing the Commission's intervention, in the new spirit of subsidiarity.

I hope that we shall make further progress on subsidiarity at the Edinburgh summit—that we shall put flesh on the bones. In particular, I hope that there will be a hit list of directives that are to be repealed. I hope, too, that there will be a new Council procedure to enable people to blow the whistle on an unnecessary directive a t any point in the discussions and that there will be a clearer definition of how subsidiarity might apply.

Niggling regulations are, I believe, irritating our constituents. Most people in this country accept that, when we are dealing with a problem such as Yugoslavia or currency movements it is right to do so on a European scale, but they cannot accept niggling intervention in what my right hon. Friend the Home Secretary called the nooks and crannies of public life. If we cannot put flesh on the bones of subsidiarity, it will make an enormous difference to public opinion.

We must be careful, however, not to take the principle of subsidiarity too far. Britain has an interest in interference in certain areas. If money spent by the Community is wasted, or it olive tree growers in Italy indulge in fraud, we want Commission officials to interfere. If there is protectionism inside the internal market, with the result that the French or the Greeks are keeping British goods out of their countries for no good reason, we want the Commission to interfere. Subsidiarity, therefore, need to be defined carefully.

The best definition of subsidiarity is that the Community should take action when problems of great significance cross national borders. Recently, the Government put forward a proposition to harmonise the rules on the vaccination of racing pigeons. One has to admit that racing pigeons cross borders, but it is not a significant issue. Although there may be issues on which it is thought that action is needed, there is no common Community interest there.

Mrs. Currie

I understand that in some parts of the country that lie further north than my hon. Friend's constituency, the export of first-class racing pigeons is an important trade.

Mr. Milligan

I defer to my hon. Friend's great knowledge and I appreciate that what she says is correct, but I believe that exports could continue without there having to be common rules on the vaccination of racing pigeons.

My hon. Friend referred earlier to lawnmowers. That is a very good example of what I mean. When I worked as a journalist in Brussels, there was a story that the Commission was trying to harmonise the noise made by lawnmowers. Everybody roared with laughter and said, "What could be more absurd? This is a parody and amounts to unnecessary Commission interference."

Three weeks later I had to write an aritcle about barriers to British exports. I telephoned the Confederation of British Industry and said, "Can you give me a practical example of a barrier to British exports on which the Community ought to be taking action?" The reply was, "Yes, lawnmowers. The rules in Germany are so designed that noise can be emitted only by German-made lawnmowers. If we are ever to sell British lawnmowers in Germany, we need to harmonise the rules." Absurd rules can be of no practical advantage to this country. We need to define subsidiarity carefully so that we do not prevent the making of rules and regulations that would greatly benefit this country.

The Edinburgh summit will have a heavy agenda. It will be an enormous success if it can get through half the agenda. Subsidiarity is the key to success. If we can reach agreement on subsidiarity, the British presidency will end not with a whimper but with a triumph.

8.23 pm
Ms. Joyce Quin (Gateshead, East)

Having listened to the debate, I am more than ever convinced that the dilemma for the Government in their European policy is that they are unable to obtain the agreement of their supporters on whether Britain should be at the heart of Europe, or whether we should have some kind of special semi-detached status on the periphery of Europe. The dilemma hampers the Government at every stage. It will continue seriously to weaken our position within the European Community for the foreseeable future.

The single market, to which the Foreign Secretary referred when he opened the debate, is a good example of the Government's illogicality and inconsistency. They claim to be enthusiastic about the creation of the single European market and about the need for a level playing field within it. However, the single market is about four freedoms: freedom of movement of goods, services, capital and people. The Government seem to believe in a level playing field for the first three freedoms but not in a level playing field for the fourth freedom—people and their working conditions.

The Government's position on the social charter and the opt-out from the social chapter undermines their wish to create a level playing field in other areas. Other European countries rightly wonder why, if the Government are interested only in a partially level playing field, should British goods be allowed free access to their markets, where there are higher standards of social protection and social legislation and where the social charter and the social chapter have been fully accepted?

In an earlier exchange with the hon. Member for Derbyshire, South (Mrs. Currie) I referred to the fact that the opt-outs, including the financial opt-out, are damaging the Government and Britain's position within the European Community. I referred to the recent survey by Ernst and Young, which clearly states: There is already evidence that the United Kingdom's attractiveness for inward investment is being reduced by a perception that we are not in the main stream of the European debate. That is a serious matter.

The hon. Member for Derbyshire, South and I are aware of the importance of investment, both of us having experienced the benefits of foreign investment in our parts of the country. If investment is dropping, as it certainly is, and if investment is threatened by the Government's European stance, there will be real worry. Both the Government and my former colleague in the European Parliament, Jacques Delors, have got it wrong. Far from Britain being an investment paradise, the result of this country being marginalised in Europe in future will be that inward investment will deteriorate rather than improve.

There are many sound reasons why British business and the Government should change their mind about the social opt-out. If the social opt-out is maintained, it will create many worries for British business. For example, multinationals with branches in the United Kingdom and other countries may find it easier to close plants in the United Kingdom during the recession, simply because the costs of closure and employment protection are lower in the United Kingdom than elsewhere. In addition, United Kingdom companies that are also multinational companies are concerned that, because other parts of Europe have accepted the rules of the social chapter, they will be subject to those rules elsewhere in Europe, but the United Kingdom will be unable to participate in discussions about the implementation of those aspects of social legislation.

Finally, and perhaps rather contradictorily, there is evidence that, even if it is thought in business circles that the social opt-out is desirable, they feel that in practice it is not possible and that the Government will be dragged unwillingly into accepting certain social regulations.

There is already evidence for that, due to the Government's half-hearted acceptance of the directive on the rights of pregnant women to work and their grudging acceptance of the need for all employees to have a written statement of employment, as well as their even more grudging acceptance, which has huge implications for the compulsory competitive tendering procedure in the United Kingdom, of the acquired rights directive.

Business is starting to say that it is surely better to be in there negotiating rather than eventually having to be dragged along, without any influence, and therefore getting the worst of both worlds. The Government's claim that employment protection measures destroy jobs looks increasingly threadbare, at a time when Britain has the fastest rise in unemployment in the European Community.

In case there should be any doubt about it, my belief in the social charter and social chapter is due to my conviction that they will bring benefits to some of Britain's lowest-paid and least protected employees, and there are all too many of them. In the past, Britain was described as a nation of shopkeepers. What worries me is that, if the Government persist in going down the route that they have chosen, we shall become a nation of sweatshop keepers. In addition to the moral reasons for accepting the social chapter, there are good practical reasons for ending the social opt-out that the Prime Minister agreed at Maastricht.

Many hon. Members have referred to the economic situation, and Labour Members have referred to the weakness of the United Kingdom economy within the European Community. Government policies have weakened our position, and significantly the United Kingdom was the only EC economy that contracted last year. Our weakness was evident during the turbulence on the money markets earlier this year. The pound buckled under the pressure, whereas the franc managed to survive.

That was a consequence of the weakness of our economy and of the foolishness of the Government in joining the ERM at a time that was politically convenient because of the Tory party conference rather than industrially appropriate, and at a level that would have helped industry and the exports on which we all depend. Furthermore, a Government who were at the heart of Europe would have been able to reorganise a general realignment of currencies before the monetary turbulence, but the Government's marginality at that time was clear.

I should like Britain to attach greater priority to economic growth and co-ordinated European action to create jobs, as many hon. Members have said. It seems that the Government have made a mini U-turn in the autumn statement and in their recent pronouncements that they would like to agree a recovery package with our European partners. I agree strongly with my hon. Friend the Member for Ashfield (Mr. Hoon) that it is a pity that the Government have adopted that attitude only at this late stage. Many of us argued for such a co-ordinated recovery package in the recession at the beginning of the 1980s, never mind in the current recession.

It is outrageous for the Government to claim that Europe is following the lead that they gave in the autumn statement. Many people in Europe have wanted the United Kingdom Government to take a more positive attitude to economic recovery, and have been disappointed when the Government have been unwilling to put money into European infrastructure projects. That was particularly true at a time when the Government were running a huge budget surplus, which offered a golden opportunity to lay the foundations for our economic prosperity.

My hon. Friend the Member for Ashfield referred to cuts in the research and development budget, and I echo his concerns. We should not be cutting this key area of European spending, and certainly not at this economic juncture.

Subsidiarity has been mentioned by many hon. Members, including the hon. Member for Eastleigh (Mr. Milligan) and the Foreign Secretary. I always understood it to mean that decisions should be taken at the lowest appropriate level. I therefore agree with Labour Members who said that subsidiarity has obvious relevance to our structure and decision-making within the United Kingdom, as well as to European decision-making. It has obvious relevance not only to Scotland and Wales but to the regions of England. Much has been done recently by local authorities and regional bodies in the northern region to forge direct links between the regions and the European Community.

I assure the Foreign Secretary that, in my part of the country, there is real feeling that subsidiarity is relevant to us and our regional future not only within the United Kingdom but within the European Community. I should like to commend to him the work of the Northern Development Company, which was set up with the support of local industry, trades unions and local authorities to achieve a high profile in Brussels and to promote the economic development of our region at home.

Activities in the northern region have been paralleled by those in other regions of the United Kingdom, including Yorkshire and Humberside, the east and west midlands, the north-west and the south-west, all of which have taken steps towards establishing their own identity within the European Community, and wish to benefit from the principle of subsidiarity.

My hon. Friend the Member for Copeland (Dr. Cunningham) referred to the Committee of the Regions. I hope that, when the Government finally get round to dealing with the United Kingdom's representation on the committee, they will ensure that not only Scotland and Wales but each of the English standard planning regions are represented. The representation of the committee should reflect the political views of the region, and its members should be chosen from the regions, rather than being appointed by the Government from within the ranks of their own supporters.

In the three areas to which I have referred—the economy, the social dimension and the regions—Britain is in danger of being marginalised and weakened if the Government pursue their present course. By treading the fine line between their pro-European and Euro-sceptic supporters—and failing to satisfy either—they are isolating and damaging Britain and the British people. If we are to make a success of our EC membership, and if the British people are fully to benefit from it we must change course and achieve greater co-operation with our European partners.

8.45 pm
Mr. Jonathan Evans (Brecon and Radnor)

If I may, I shall turn later to some of the remarks made by the hon. Member for Gateshead, East (Ms. Quin), because I particularly wish to deal with her views on the ERM.

I shall begin by referring to two excellent speeches made by Conservative Members. My hon. Friend the Member for Eastleigh (Mr. Milligan), whom I am pleased to see in his place, made a magnificent speech. I also commend the speech of my hon. Friend the Member for Esher (Mr. Taylor), who spoke with some force about the fact that of late the European debate has been affected by too much negativity. That negativity may have been stimulated by two events in the summer—the Danish vote on Maastricht and the currency turmoil in the ERM in September.

Much of that negativity was evident in the speeches of Opposition Members, such as in the gloomy prognosis of the hon. Member for Alyn and Deeside (Mr. Jones). I know the hon. Member, who I am sorry is not in his place, very well from his former role as shadow Secretary of State for Wales. We heard from him a litany of gloom that we have heard so many times. He was the shadow Secretary of State 13 weeks ago, and there have been three shadow Secretaries of State for Wales in the past 13 weeks, compared with three Secretaries of State in the past 13 years. Those Secretaries of State have managed to achieve a substantial transformation in the Welsh economy largely because of the positive stance that each has taken to our role within the European Community.

Those who paint gloomy pictures of the difficulties that business may be facing should consider the example of Wales, where the rate of unemployment is lower than the national average. Just after the war, 250,000 people were employed in the mining industry in south Wales, whereas today, even before the latest announcement that has caused so much turmoil in the House, only four mines remain in operation. However, jobs were found for so many of those people in enterprises backed by the substantial record of inward investment that we have managed to achieve in Wales.

A fifth of all United Kingdom inward investment has come to Wales. Why? Because the Secretary of State and his team have sold the benefits of Wales as a part of Europe. It is the advantage of being able to manufacture in Wales and to be able to sell to the European Community. Many people in Wales now have employment in Bosch, in Sony, in Panasonic and in other well-known companies which have chosen to base themselves in Wales primarily because of what we have been able to achieve in terms of a positive relationship with the Community. That is why it is so important that the House should start to develop a more positive approach towards our position in the European Community.

From time to time, there may be good reasons to question some aspects of our European partners' policy. There are good reasons for us currently to question German monetary policy. We may all agree that we question France's stance on the general agreement on tariffs and trade settlement. However, that is not a reason why we should decide that we shall be negative generally about our membership of the Community.

At Edinburgh, Mr. Delors is expected to present a statement about the economic situation in the Community. It is essential that the Community addresses the difficulties being caused across Europe by the recession. All hon. Members must recognise that the recession has caused difficulties across Europe. The difficulties have been substantially alleviated in the longer term by the excellent settlement that has now been reached in the long-standing dispute between the EC and the United States. We now hope that that settlement will lead eventually to a proper GATT round settlement.

In that regard, it is somewhat churlish of Opposition Members not to recognise the demonstrable qualities of my right hon. Friend the Prime Minister, who decided to take charge of that situation. He averted a trade war which threatened not only Europe, but the whole world. We were days or weeks away from such a prospect. My right hon. Friend managed not only to achieve the reinstatement of Commissioner MacSharry but the backing of Jacques Delors, the President of the Commission, for the proposal.

I represent an agricultural constituency, so I recognise many of the concerns in the farming community about whether the settlement can be accommodated in the terms of the common agricultural policy reform settlement which was agreed earlier this year. Farming has been in recession for some time, and many farmers are concerned that there may be yet further reductions in farm incomes. However, my constituents recognise that a GATT round settlement is important to the whole of Britain, to the whole of Europe and to the whole world. In those circumstances, they believe that it would be disastrous if the settlement were set aside in the narrow, sectional, national interest of French sunflower growers.

There is no justification for the French Government's current position. I also find it unacceptable that, during the course of what was likely to be a difficult negotiation, the French, or some elements within the French team, seemed to have tried to strengthen their hand by the inspired leaks of documents which exaggerated the effects of a settlement. We have come to expect such conduct from the Labour party, but we do not expect it from our European colleagues. I hope that that point will be made with some force during the discussions between our Ministers and their French counterparts.

The hon. Member for Gateshead, East mentioned the turmoil in the exchange rate mechanism in September. That has also had a fundamental effect in terms of confidence and in an attitude of negativity towards the Community. However, we are wrong to assume that coming out of the ERM was some great boon or bonus for the British economy. On the contrary, the effect of the devaluation on our trade deficit is that it has now broadened, as reported in our newspapers today. That is contrary to all the blandishments we heard on the matter from the Euro-sceptics. I note that there has been a far more positive approach from Conservative Members in this debate. Incidentally, I do not understand the operation of the so-called J-curve, another economic manifestation which seems to have worked its way into financial analyses of late.

There seems to be a presumption that the turmoil in the ERM affected only Britain in September. That was implicit in the remarks by the hon. Member for Gateshead, East. She said that the franc had survived—for now, I am bound to say. It seems that Mr. Schlesinger, the head of the Bundesbank, displeased by the 0.25 per cent. reduction in interest rates that was forced on him in September according to The Guardian, which I note from earlier debates today can be quoted in the House, may now be prepared to jettison the franc and even Maastricht in dealing with inflationary pressures on the mark.

We know that the franc is vulnerable. The competitiveness of the French economy has been damaged by the series of devaluations and realignments of other European currencies. It had been felt that France might have escaped by being offered an interest rate cut by the German authorities, but those prospects have evaporated today with the news, which I was at pains to draw to the attention of my hon. Friend the Member for Esher, that Germany's M3 money supply figure out today shows a surge to 10.2 per cent. against an annual 5.5 per cent. target figure. That seems to remove the last prospect of an easing of German interest rates.

That increase clearly shows that even Germany is not immune from the effects of currency fluctuations across Europe. It is the fact of those currency fluctuations with so many of the funds flowing into the mark which has resulted in the substantial expansion of German monetary supply. According to City analysts, the next targets for the currency speculators are the French and the Irish. The latest news appears to show that the strain on those currencies is building day by day. That news demonstrates the clear need for far greater economic co-operation between the countries of the European Community.

I was pleased to note from the remarks of my right hon. Friend the Chancellor this morning that he has for some time been pressing the German Finance Minister on the operation of German monetary policy. It is clear that the way in which German monetary policy has operated in terms of interest rates has had a most damaging effect not just in Britain but on all the countries in the EC—and will shortly, it seems, have such an effect on Germany itself.

The Delors 2 package appears to have been welcomed by the hon. Member for Ashfield (Mr. Hoon). It was particularly interesting to hear his glowing tribute to Delors 2, given that only three weeks ago he was in the Opposition Lobby voting to kill Maastricht dead. The Government's position on the Delors 2 package is quite right. At a time such as this, it is appropriate that we should be seeking value for money from all the operations of the Community and important that we should expose the myths as they come across.

My hon. Friend the Member for Eastleigh mentioned some of the myths that have been put about concerning European regulations. I am pleased to note that my right hon. Friend the President of the Board of Trade has been put in charge of scything through home-grown regulations, because, from my experience of the Ministry of Agriculture, Fisheries and Food and also of the regulations that come from Europe, I believe that there is even more work for the President of the Board of Trade to do here at home than there is in Brussels.

8.59 pm
Dr. Norman A. Godman (Greenock and Port Glasgow)

As a Scots Member, I envy the hon. Member for Brecon and Radnor (Mr. Evans) and the people of Wales the Welsh Development Agency. We had a Scottish Development Agency which the hon. Gentleman's ministerial colleagues in Scotland chose to execute—a matter of regret for many Scots. Like the hon. Gentleman, who represents a Welsh constituency, I live in a multinational state, so I have a fairly relaxed attitude to the multinational European Community.

One of the most sickening moments that I have experienced in recent months was when the Government opted out of the European Community's social chapter. That is where the hon. Member for Brecon and Radnor and I part company—pretty fundamentally, I am sure. The appearance of the social chapter in the Maastricht treaty represented for me the first real glimmer of hope that the Community might become the liberating association of peoples that its founders envisaged. Every other EC Government were enthusiastic but the British Government—those market force morons—sought to scupper the social chapter, which they effectively but disastrously did.

It is typical of the myopia of the English Tory Government that they took us into the EC promising us huge economic benefits, whereas in fact we have finished up with the grant grabbing of the common agricultural policy and what I have described elsewhere as the Spanish piracy of the common fisheries policy. I have a great deal of sympathy with the remarks of the hon. Member for Banff and Buchan (Mr. Salmond) about the plight of the Scottish and, indeed, the United Kingdom fishing industry as a result of the management of fisheries by the bureaucrats in Brussels.

The original concept of the EC was remarkable: it represented a bringing together of European nations to prevent war, improve living standards in general and promote freedom. Those were laudable objectives. The social chapter is evidence that the early vision was not just a dream. The Community has expanded and will continue to expand and clearly cannot remain the greedy trading club which some little Englanders in Downing street and elsewhere desire. Admittedly, trade still seems to be the main engine of change in the Community, as evidenced by the Single European Act and monetary union, but in agreeing to the social chapter, other member Governments accepted that the rights of individual citizens and not just the rights of capital must be the Community's first concern. That, again, is an admirable view.

I should like to see the social chapter reinserted in respect of the United Kingdom, and its scope broadened to strengthen basic rights and working conditions and to cover provisions covering racial and sexual equality, pension rights, trade union recognition, maternity and paternity benefits, and so on. I want the harmonised standards specified to be based on the best standards, which are certainly not those of the United Kingdom. The biggest employer in my constituency—IBM, a major American multinational—has no worries about the social chapter, because it more than meets the stipulations laid down in that part of the treaty.

Priority must also be given to the decision-making processes in the EC, which remains profoundly undemocratic. It is true that new powers are to be promised to the European Parliament. Even so, as an institution it will remain essentially powerless to constrain the bureaucrats in Brussels and the Council of Ministers democratically. Within the past few weeks, I have asked in the House whether some openness could be introduced into the deliberations of the Council of Ministers, but was told that that cannot be the case because of confidentiality and the Council's rules, even though I think that there is a regulation on the Council's deliberations which would allow that.

I shall be brief as I know that another hon. Member wishes to speak, but I cannot sit down without a mention of subsidiarity. Nearly every other hon. Member has mentioned it en passant, even the hon. Member for Brecon and Radnor.

Subsidiarity could deal with some of the problems associated with the absence of checks on decision making, but the Prime Minister's version of it is that decisions should be taken at the lowest appropriate level—but certainly no lower than No. 10 Downing street. In Scotland, subsidiarity has a different meaning. We believe that it should mean consideration of key EC matters by a strong Scottish Parliament with wide-ranging social, industrial and economic powers—a Parliament which would be much better in that regard than the German Lander or the Spanish regional Governments, which still exercise control over social and domestic matters in a way that we in Scotland can only dream of. Without that definition of subsidiarity, the idea of a Community of the regions remains a meaningless catch-phrase.

The Prime Minister's stocktaking of the governance of Scotland is a disingenuous attempt to lull or gull the people of Scotland into quiescence. We are all fortunate that the Scottish secessionist movement is, quite properly, peaceable and adheres to parliamentary democracy. Long may it remain that way, no matter how support for the Government, low as it is, may dwindle in the next few years.

Without the social chapter, the Maastricht treaty is unacceptable, and I shall argue along those lines during the next few weeks. The Government's definition of subsidiarity is also unacceptable.

I have mixed feelings about the European Community, because I welcome the establishment of the European Court of Justice, as a supreme court for the Scottish and English legal systems. What the Government deny us in the so-called United Kingdom we can sometimes obtain from European Community institutions and from that supreme court. I hope that it will decide against the Government in the case of commissioner's decision CS/27/91, made in Liverpool, which stated that the Department of Social Security's decision to stop the payment of invalidity benefit to women in the United Kingdom at the age of 60 was incompatible with a directive on equal treatment in social security matters which became European Community law as far back as 1979.

I asked a question of a Minister at the Department of Social Security on the Government's reaction to the commissioner's decision. The chief adjudication officer's office told me that he intends to appeal against the decision made in Liverpool. I asked what information the Secretary of State had concerning the timing of the hearing of the appeal, at the Court of Appeal, of the chief adjudication officer against a commissioner's decision…and if he will make a statement. The Parliamentary Under-Secretary replied:

A date for this case to be heard by the Court of Appeal has not yet been set since a decision is awaited on another case dealing with related issues and which is currently before the European Court of Justice".—[Official Report. 16 November 1992; Vol. 214, c. 77.] Many thousands of women in the United Kingdom lose their invalidity benefit at the age of 60. Some of them have lost as much as £30 a week. So we must seek assistance from the European Court of Justice.

I have written to Commissioner Papandreou asking her to take the British Government to the European Court of Justice for their refusal to adhere to the commissioner's decision. More than 400 women in my constituency alone have been urged by me to apply for the benefit. One of them—Mrs. MacLatchie, of Port Glasgow—on the basis of the commissioner's decision received arrears payments of about£1,000 and is now receiving invalidity benefit.

The European Court of Justice is determining the issue, and the Official Journal of the European Community stated in its edition of 11 February, volume 35, that the court was considering the question: Where national law provides that there shall be pensionable ages of 60 for women and 65 for men for the purpose of granting old age and retirement pensions and that there shall be an invalidity benefit scheme for persons of working age, does Directive 79/7/EEC require a Member State to apply the same upper age limit (if any) for both men and women when defining the scope of the scheme for invalidity benefit? I hope that the judges who make up that supreme court for the 13 legal systems within the 12 nations of the European Community answer in the affirmative. I say that because the British Government, in the form of the Department of Social Security, are seeking to challenge in the English appeal courts the decision of the Commissioner to which I referred.

Commissioner Skinner said that the Department of Social Security was infringing European community legislation. I think I am right in saying that, under the treaty of Rome, the laws in those 13 legal systems must be compatible with European law. Thus, in the case that I have raised, concerning 400 of my constituents and thousands of women in other parts of Britain, I hope that the European Court of Justice will decide that the British Government are wrong to stop the payment of invalidity benefit to women claimants at the age of 60 when men continue to receive it until they are 65.

I confess that I was not happy when the European Court instructed the British Government to change a provision in the Merchant Shipping Act 1988, an instruction which harmed the fishermen of Scotland and elsewhere, including the constituents of the hon. Member for St. Ives (Mr. Harris). But in the types of case to which I have referred today, involving social directives, that court has proved to be in every sense of the word a supreme court, with power to instruct national Governments to adhere to European legislation.

My hon. Friend the Member for Barrow and Furness (Mr. Hutton) expressed his concern about the problems bedevilling the shipbuilding industry. I too have those problems. I believe that methods can be evolved within the Community which will give the same amount of protection to our communities as has been given to those in east Germany. But, as I have said, Maastricht without the social chapter is unacceptable to Labour.

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

As the House will be aware, pulling up the tail end, so to speak, before the Lord Major's show gets back on the road is not the most delightful experience. However, I will try to make one or two points, which have been expressed already in various ways.

First, however, I want to make the point that one of the most enjoyable things about sitting through several hours of this debate—there have not been many enjoyable aspects—has been that the majority of speeches from both sides of the House have been by hon. Members who clearly have the interests of Europe, and this country within Europe, at heart. Although there have been difference of opinion between those on the two sides of the House, basically centred on the level of public expenditure in its European guise, there has been evidence of a widespread belief that this country's future is inextricably entwined with the future of Europe. That is a tremendous change from many debates that we have had in the House on Europe.

I have unashamedly supported the Maastricht treaty ever since my right hon. Friend came back from Maastricht nearly a year ago. I want the House to move very quickly towards its ratification. I recognise that it will take many months of debate in the House to achieve all the Bill's stages, but, like others, I hope that we shall see the Third Reading early in May or soon after, even if the Danes do decide to defer any future referendum at that time.

There are many reasons why I support Maastricht. One of the most significant is the whole question of enlargement. I have always believed it somewhat strange that we should appropriate the term "Europe" to describe a minority grouping of the countries of Europe. In my view, the European Community will never be a full community until it reaches out and is able to embrace all the countries of the continent of Europe that wish to be part of it.

There is an element of British self-interest in seeking enlargement. It is a question of the balance of power between those who are contributors to, and those who are recipients of, the European Commission's expenditure. My right hon. Friend the Prime Minister has made the point abundantly clear, and I endorse it. The pressure for increased expenditure from the centre—the demand in Delors 2—supported, as we have heard this evening, by many hon. Members, will be considerably reduced with the admission to the Community of the European Free Trade Association countries, which will be helping to pick up the bill for any extra expenditure and, through their voting powers within the Community, seeking to redress that balance.

There are, of course, other aspects connected with enlargement. One is the size of the European Parliament, and I hope very much that my right hon. Friends will resist the pressure from Germany to increase its representation. At the moment it is a simple system, with larger and smaller countries grouped into different brackets without specific reference to differences in population. It would be a retrograde step to move along the road of more closely reflecting population differences, because there would then need to be a clear reassessment of the representation or all countries, not just Germany.

The same applies in many ways to the question of the size of the Commission. It is important to provide sufficiently flexible and wide structures for Europe to allow for maximum participation by others as the Community develops in the short and medium terms.

Much has been said this evening about the European Community's significance to our economy. I wish to comment specifically on fiscal harmonisation and value added tax. Almost all the other member nations of the Community have multiple rates of VAT. We are in a tiny minority to restrict ourselves to just a standard and a zero rate of VAT.

I have always supported the Government's market-led approach towards harmonisation, but it is a two-way process, which requires the Government to respond to the market. I have spoken previously in the House about VAT on bloodstock, and I am delighted that my right hon. Friend the Paymaster General, who is responsible for that, is in his place tonight. I shall not go through all those arguments again, as he is familiar with them—

Mr. George Robertson

Watch the time.

Mr. Paice

I am well aware of the time. Perhaps the hon. Gentleman should draw it to the attention of the hon. Member for Greenock and Port Glasgow (Dr. Godman) who, having said that he would take only a few minutes to speak, took 17 minutes. I wish to make a few quick points before I sit down.

The Government must re-examine their approach to fiscal policy vis-a-vis business competitiveness. We cannot demand and expect sovereignty over our fiscal policies and taxes while ignoring the external pressures placed on them. Although it is correct to say that our future economic well-being is tied up with that of Europe, it is perverse to ignore any fiscal handicaps placed before it. I have made that point to my right hon. Friend the Paymaster General several times in the past, and I look forward to his resolving the difficulties with which he is familiar.

I conclude—grudgingly, because I wanted to make a number of points—by echoing the words of my hon. Friends who have said that we must make progress in Europe with determination but with the spirit of ensuring that our future well-being within Europe is not jeopardised. We must fight for what we believe to be right.

Europe is not an ogre. It is all of us and all around us, and our economy is clearly entwined within it. However, the development of Europe must work with the flow of public opinion, not against it. Some national leaders within the Community have not yet caught up with the change of public opinion in their countries against the trend of centralism. In this country, we are at one. When and if one can explain to the people of this country my right hon. Friend the Prime Minister's policies on the future of Europe, the vast majority of people will support: that approach.

The sting in the tail is the word "explain". We have much more to do. Many hon. Members on both sides of the House are guilty of allowing the floor to he held too much by those who are basically opposed to an extension of our involvement within Europe. We have allowed the minority to have their way for too long. One message that has come out of tonight's debate is that the tide has now turned.

9.23 pm
Mr. Andrew Smith (Oxford, East)

I agree with the hon. Member for Cambridgeshire, South-East (Mr. Paice) about the constructive tone of the debate. It is a pity that the contributions have not been matched by the motion, which shows the Government's poverty of ambition and action. It amounts to nothing more than taking note of that great bundle of documents.

Where are the proposals to fire the imagination of peoples across Europe and rebuild confidence in what the Community can achieve? Where are the proposals to set in motion the reform of Community financing? Where is the action to tackle the democratic deficits? Where is the force for emancipation to which my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) referred? Hon. Members will look in vain through the documents, just as they will have listened in vain to the Foreign Secretary for such information, other than what he said about GATT. Indeed, the Foreign Secretary found the motion so eminently forgettable that he almost forgot to move it.

As is perhaps inevitable with such a big bundle of documents covering so many aspects, the hon. Members who participated in the debate have approached the issues from a variety of angles, some more technical than others. I look forward to the Paymaster General's response to the issues raised by the hon. Member for South Hams (Mr. Steen) on the impact of the fiche d'impact, and those raised by my hon. Friend the Member for Greenock and Port Glasgow and the hon. Member for Banff and Buchan (Mr. Salmond) on fishing and fish of all sorts, including the Hogmanay haddock. The needs of both small firms and the fishing industry are crucial, and deserve a proper response from the Government.

The hon. Member for Wolverhampton, South-West (Mr. Budgen) presented a persuasive case, stating that the operation of parliamentary democracy would be immeasurably enhanced if we did not have the Tory Whips. I thought that that was an interesting observation.

I agreed with what my hon. Friend the Member for Gateshead, East (Ms. Quin) and the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) said about subsidiarity having to apply to the counties and regions of the United Kingdom. They said that additionality must mean extra spending, not substitution for spending that would have happened anyway. I join the hon. Member for Ross, Cromarty and Skye in praising the achievements of Commissioner Bruce Millan in that respect.

The hon. Member for Leominster (Mr. Temple-Morris) ably embodied, as did the hon. Member for Esher (Mr. Taylor), the group characterised this evening as "Whitney's Wonders". They embody one side of the chasm in the Conservative party. The hon. Member for Leominister was right to speak of the difficulties to which an indefinite attempt to stand aside from managed exchange rates would cause this country. The Government would do well to heed that warning.

The hon. Member for Leominister was also right to speak of the tragic farce of the channel tunnel being linked to the high-speed rail network on the other side of the channel, but having no similar links on this side. It should be linked to the whole of Britain as well as to London. However, the hon. Gentleman must ask whose fault that is. The Government must accept their responsibility for that abject failure.

Britain desperately needs coherent and positive policies for infrastructure investment and a proper industrial strategy. My hon. Friend the Member for Barrow and Furness (Mr. Hutton) spoke powerfully and with expertise on behalf of shipbuilding in general and his constituents in particular. How right he was to stress the importance of a concerted British and European strategy to build up and build on our superb engineering skills. He was also right to talk of the value of European co-operation and the Maastricht process in countering the appalling outbreaks of fascist and racist violence that the Community has witnessed.

As my hon. Friend the Member for Copeland (Dr. Cunningham) said, it is clear that the Government are in utter confusion over their European policy, European recovery, the EC budget and, today, the United Kingdom abatement. The House will have seen the headlines that were full of the Government gloss of Euro-expansion. Yesterday's edition of The Daily Telegraph proclaimed: Major urges Europe to go for growth". What does that amount to? It is so much froth, and will be even more short-lived than the confident hype surrounding the autumn statement.

When I listened to the Chancellor on the "Today" programme this morning, I heard no hint of Euro-growth. I see that the Chancellor is entering the Chamber on cue. He said that he hardly recognised what was in the newspapers. Perhaps that was because it was the Prime Minister who put the stories there and not the Chancellor. However, the Chancellor denied this morning that there was to be lots of new spending for European recovery. He stressed that no figures had been discussed at any time. He announced no new projects. I see him nodding. He said that anything that happened would be reallocation of existing money.

We would have welcomed yesterday's change in rhetoric. We have long been urging a concerted European programme for recovery. As my hon. Friend the Member for Alyn and Deeside (Mr. Jones) said eloquently, we need, Wales needs and his constituents need precisely such a programme. The problem, as with the autumn statement, is that yesterday's rhetoric is not matched by today's reality. How much better it would have been if, instead of this anodyne motion, the Government had proposed real measures showing how the EC budget and the European economic recovery programme were setting Europe on the road to sustainable prosperity and full employment.

As to the budget itself, far from any stimulus to growth, the papers before us show cuts in important Community programmes. Unlike the hon. Member for Derbyshire, South (Mrs. Currie), who could not make up her mind whether to disparage more the excellent Derbyshire county council or the Treasury, I find the Treasury memoranda helpful. Annexes A and B to the memorandum of 19 November set out precisely the cuts that we face. My hon. Friend the Member for Ashfield (Mr. Hoon) referred to them.

At a time when the United States and Japan are planning to spend huge sums on research, what possible sense can it make for the British presidency and the European Council to propose cuts of 12 per cent. in Community-funded research? That is bad not just for Europe but for Britain, because research is one of the areas in which the United Kingdom has derived benefit from Community expenditure.

At the start of the full operation of the single market, when environmental and social concerns have never been more pressing in Europe, how could it be right to propose cuts of 8 per cent. in the budget for environmental policy, consumer protection and social policy?

When there is such starvation in the third world, how can even the British Government attempt to justify cuts in food aid of no less than 22.5 per cent.? Those cuts show the lack of vision of the British presidency, and how the Government are failing to respond to world and European needs, just as they have failed to respond to Britain's needs. Indeed, as my hon. Friend the Member for Gateshead, East pointed out with her telling reference to the Ernst and Young report, Britain is already paying a price through lost investment as a consequence of the Conservative Government's semi-detached stance towards Europe.

Fundamental problems remain over the resolution of the EC budget itself. I ask the Paymaster General to make clear to the House what the Government propose on the cohesion fund. It is conspicuously absent from the Council version of the budget before us. The Government are on record, in the Chancellor's evidence to the Select Committee on the Treasury and the Civil Service last February, as having reservations about the whole question of achieving an adjustment by the transfer of resources". Will the Government now tell us whether they accept the need for resources so that the cohesion fund can be set up, and how much they propose to put into it?

A further problem, aggravated by the Chancellor's comments on "Today" this morning, is the United Kingdom abatement. The Chancellor said that there would be no serious, significant, adverse change in our abatement; that would not be easy for us to accept. That has spread further confusion, because the Chancellor did not say that such a change was unacceptable; indeed, he seems to accept that some change may be envisaged.

The Chancellor of the Exchequer (Mr. Norman Lamont)

The hon. Gentleman is quite wrong. We are not prepared to accept a change in it.

Mr. Smith

That contradicts the references earlier to the way being open for technical change. When does technical change become a concession of substance? That is a matter to which we shall return.

On a wider macro-economic policies for the Community, the Government seem to be groping their way around another rather murky S-bend. They are reported to be considering proposals for the Edinburgh summit.

I return to yesterday's The Daily Telegraph, in which Downing street was reported to have said: Our aim is to extend the British strategy for recovery across Europe. That will really have them dancing in the streets of Naples. We and our European partners should be told which bit of the British strategy the Government are so keen to wish upon the rest of the EC.

Is it the 2.5 per cent. cumulative cut in real domestic product that Britain will have seen during the past three years, even if the Government manage to realise their pathetic 1 per cent. growth target for next year? Is it the 4.5 per cent. fall in employment, the 5 per cent. drop in industrial production, the 11 per cent. fall in business investment or the 12 per cent. fall in fixed investment? Which bit of the British economic miracle are the Government wishing on the rest of the EC?

In the same article, describing a possible Government Delors-style initiative at the European summit, a Treasury inside source said: You could say it is an attempt to steal his clothes. That shows just how few clothes the Government have of their own, and how embarrassed they are at their inadequacy.

We saw a few of the Opposition's clothes stolen in the autumn statement. Government by kleptomania is now the Tory style. I warn the Conservative party that, as they pick bits piecemeal from Labour's proposals but the public see them as half-hearted, hesitant, renouncing from No. 11 Downing street today that which was hyped-up from No. 10 Downing street yesterday, as they see the Government refusing to adopt our full-blooded programme for recovery, all the Conservatives will succeed in doing is legitimising and popularising what the Opposition are saying.

As the public's appetite for active government is whetted, they will turn increasingly to the party which believes in it, not the Government who have spent more than a decade preaching the virtues of so-called non-intervention. An ideological tide is turning, as people realise that common action is needed to solve common problems, that Government must build a partnership with industry, with employees, with trade unions, with regions and with the countries of the United Kingdom, as well as with our European partners.

For that partnership to work, it must embrace everybody. It cannot cut out the trade unions or the workers covered by the wages councils or the poor and dispossessed. The Government cannot say yes to the single market but no to the social chapter, yes to Maastricht but no to progress on economic and monetary co-operation, and they cannot say yes to subsidiarity abroad but no to subsidiarity at home.

Throughout the British presidency, the Government and the Prime Minister have tried to face both ways. As someone memorably said, they go into Europe like a gatecrasher walking into a party backwards assuring those around them that they are just on their way out. The truth is that the British presidency, at this crucial time in the Community's development, has been chronically and irretrievably enfeebled by the yawning chasm in the Conservative party.

Faced with the Conservative record of ambivalence, incompetence and missed opportunity, the House can have no confidence in the ability of a Government who have achieved so little in the first five months of their presidency now to bring about all that is needed in their last five weeks. A new purpose, new partnership, and new direction are called for in Britain's policies on Europe, and I ask the House to signal that new direction by voting for our amendment.

9.39 pm
The Paymaster General (Sir John Cope)

I will respond in the time available to as many as I can of the points raised in this wide-ranging and timely debate. We are at a key moment in the Community's development, given that we are in the run-up to the Edinburgh European Council and also—though not entirely—because of the Maastricht debate, about which we heard a good deal today.

Today's debate was timely also because we are 37 days away from the completion of the single European market—a concrete realisation of our commitment to the principles of the free movement of goods, services, people and capital. Furthermore, we are working towards settling the Community's financial framework for the coming years, as well as the 1993 budget.

The GATT talks to free world trade have moved forward again, we are preparing for the Community's enlargement, and we are leading the humanitarian effort and the call for greater United Nations involvement in the conflict in Bosnia and other parts of the former Yugoslavia. We are strengthening our links with the democracies of central and eastern Europe.

Apart from that terrific agenda for the presidency that we have been vigorously pursuing, all the countries of the Community face difficult economic problems and a tight financial situation. All those issues are central to our economic and political well-being and to British prosperity, which is why they are so important to us.

My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs spoke earlier about some of the major themes of our presidency and of the Council. I shall focus principally on economic and financial issues. None is more important than the single European market. I assure my hon. Friend the Member for Esher (Mr. Taylor) that we shout from the rooftops whenever opportunity offers—including now—the central role that the single market is playing in the well-being of this country and of the European Community.

The single European market will bring real benefits for British business and for British individuals. It means more business opportunities, and that means more jobs. It means less red tape and lower business costs, with an end to routine customs controls and paperwork. The single market means that, as barriers to trade come down, consumers will have a wider choice of goods and services.

Employees will find wider recognition of qualifications, making it easier for people to live and work wherever they choose in the Community.

Mr. George Robertson

Was not one of the objectives of the single European market the harmonisation of value added tax rates? Can the right hon. Gentleman give an update on progress towards that?

Sir John Cope

Not harmonisation. After all, we are retaining fiscal sovereignty for the House, which is absolutely right. I suppose that the hon. Gentleman wants us to give away the financial powers of the House? The agreements are about minimum rates of VAT and excise duties, and that is how it should be.

Our membership of the single market has already made Britain a magnet for inward investment. My hon. Friend the Member for Brecon and Radnor (Mr. Evans) paid eloquent tribute to inward investment in Wales, and my hon. Friend the Member for Derby, South (Mrs. Currie) paid an even more eloquent tribute, if that is possible, to the beneficial effect of inward investment on jobs in south Derbyshire—but only after slating the Treasury, in the person of myself, for the wording of a particular explanatory memorandum. I am afraid that such texts must be rather complicated, but I accept her strictures.

As to inward investment, 40 per cent. of Japanese investment in the Community is in the United Kingdom. There was £17 billion-worth of inward investment in 1990, with 50,000 manufacturing jobs now flowing from that. The United Kingdom has some 40 per cent. of total United States investment stock in the European Community.

The single market will encourage British companies to invest in businesses in Europe. As the single market extends to the European economic area next year, United Kingdom businesses will have a home market of 375 million consumers. That will help us to compete in the world marketplace as well as within Europe.

I recognise that, as my hon. Friend the Member for Dover (Mr. Shaw) said, some people will not gain from the single market. His example was freight-forwarding agents and customs agents in his constituency and elsewhere. As the Commission has said, retraining of customs agents is primarily a matter for member states, but Community funding is also available from the social fund. In addition, the Commission is proposing a one-year package to assist redundant agents.

At the meeting of the Finance Ministers yesterday, there was a lukewarm attitude towards the proposals. Nevertheless, the discussions are continuing within the Council. Meanwhile, 30 million ecu have been entered in the draft budget, pending the adoption of a legal base.

The hon. Member for Copeland (Dr. Cunningham)—I must admit that it is a nice name for a constituency—

Mr. David Shaw

Will my right hon. Friend give way?

Sir John Cope

No, I must get on—I have little time and many matters to deal with. I have said all that I can about that particular matter.

The hon. Member for Copeland blamed the presidency for all sorts of things, including the recession. Several hon. Members have spoken about the prospects for growth and jobs. The United Kingdom presidency has given a clear lead to ensure that the Community takes effective action.

My right hon. Friends the Prime Minister, the Chancellor, the President of the Board of Trade and the Minister of Agriculture were tirelessly involved in paving the way for the GATT agreement. That is the most important step that the Community can take to boost confidence and growth.

OECD estimates suggest that an additional $200 billion in world output could follow. That is important not only to the United Kingdom but to the rest of Europe and much further afield. I have already referred to the single market, which is extremely important for the United Kingdom.

We propose a full discussion of the European economy at Edinburgh. As the House knows, and as we debated last week, the Government have introduced a package of measures for the United Kingdom. Within a framework of fiscal discipline, we have sought to sustain investment growth and rebalance public expenditure—constraining wages but protecting capital. All that is to boost confidence. Last week, the Labour party was unsure whether to claim credit for that or to attack us, and it was the same today. Similar measures could be taken and are being taken by other member states.

Mr. Andrew Smith

What specific measures and new projects for economic recovery and job creation will the Government propose at Edinburgh?

Sir John Cope

The discussion in Edinburgh will focus on the matters that I have just discussed. Member states are examining those matters. Measures are also being taken at Community level. The co-ordination and development of actions of member states are most important.[Interruption.] The hon. Gentleman may laugh, but that is the fact of the matter. At the Community level, there is scope, within a tight fiscal framework, for a shift in priorities. The European investment bank can be used to work with the private sector to increase transport and other capital projects. The Community can also encourage capital spending. We shall be discussing those matters further at Edinburgh, but there have been many discussions before. Of course, as my right hon. Friend said this morning, there are other matters of great importance, including German interest rates. Interest rates were also mentioned by my hon. Friend the Member for Esher and others.

We have heard a great deal about regulation and deregulation, especially from my hon. Friend the Member for South Hams (Mr. Steen). He made an entertaining speech about a series of controls of unspecified origin which bore down on small firms in his constituency. He and the House will be aware of my involvement with small firms and my support for them as a boost to the economy. I am happy to tell him that, about two weeks ago, my right hon. Friend the President of the Board of Trade announced an enhanced role for the deregulation unit in the Department of Trade and Industry and the appointment of Lord Sainsbury to review the matter and investigate examples such as those to which my hon. Friend the Member for South Hams drew attention. My hon. Friend has given Lord Sainsbury a good agenda on which to start. I gather that Lord Sainsbury's remit covers both United Kingdom and European Community legislation.

Mr. Stuart Randall (Kingston upon Hull, West)

There is some anxiety in the House about such regulations. Have the Government decided which of the regulations are acceptable to them and which are not? If some are not acceptable, what mechanism exists to ditch them?

Sir John Cope

If the hon. Gentleman is referring to domestic legislation, it is fairly easy to deal with the matter. For regulations in European Community legislation, the remedy is to go back to the European Community, to DG23 and so on. That is exactly what we do, and what we shall do in the cases highlighted by the committee to which I referred and by the deregulation unit of the DTI.

Mr. Steen

Will my right hon. Friend consider that we could shelve or delay implementation of rules and regulations until all the other countries implement the regulations that we have implemented?

Sir John Cope

We do our best to ensure that all the legislation is introduced at the same time and pursued equally by all member states. The Maastricht treaty will help us to achieve exactly that.

The hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) asked about the Committee of the Regions and about several other matters. Ratification of the treaty will have to take place before the committee can be established. It would therefore be premature to examine the composition and procedures of the committee, but we are considering the matter and consulting on it.

Several hon. Members referred to subsidiarity and the position of Scotland. The matter was raised with my right hon. Friend the Foreign Secretary but also came up later in the debate. I was asked whether article 3.6 would be justiciable. The answer is yes, it will be justiciable once the treaty is ratified, but it is clear that article 3.6 is not about the internal organisation of member states.

Mr. Andrew Smith

The Minister means article 3b.

Sir John Cope

I beg the hon. Gentleman's pardon. I cannot read my own writing. Those who suggest that article 3b should deal with the internal organisation of member states would be widely criticised if they attempted to put that idea into practice. What it means, after all, is that the Maastricht treaty—or some other treaty—should affect the powers of the House, apart from anything else. That would be totally unacceptable, to say the least.

The hon. Member for Banff and Buchan (Mr. Salmond) entertained us with some discussion of Hogmanay haddock, but he also made some serious points. Fortunately, my hon. Friend the Member for Skipton and Ripon (Mr. Curry) was in the Chamber at the time and heard what the hon. Gentleman said. My hon. Friend is currently Minister of State, Ministry of Agriculture, Fisheries and Food, and is also President of the Fisheries Council.

The hon. Member for Ross, Cromarty and Skye accused the United Kingdom of abusing the additionality requirements. I do not accept that for a moment; the United Kingdom complies fully with the spirit and the letter of the legislation. The hon. Gentleman may have been thinking of some delay by the Commission earlier this year in approving the United Kingdom's RECHAR allocation. That issue was resolved to the satisfaction of both the United Kingdom and the Commission as a result of a change in the presentation of the United Kingdom's structural fund receipts in the public expenditure documents.

A number of hon. Members mentioned the general issue of the United Kingdom approach to budgetary and financial matters. The United Kingdom's underlying net contribution to the European Community budget through the public sector is now running at some £2 billion a year—the figure would be much higher without the abatement. That is a large sum, but it is not the whole story. It does not reflect, for example, the substantial receipts which flow from the Community budget to the United Kingdom private sector, amounting to about £500 million a year.

In addition, some elements of Community budget spending directly substitute for what would otherwise have to be paid from our national budget. One example is external aid. The United Kingdom takes in structural fund receipts of more than £1 billion a year, which are extremely important to us; and, as a former Northern Ireland Minister, I can vouch for the significant contribution made by such receipts in the Province. One of the achievements of the 1993 budget is a doubling of the structural funds since 1988: that was a commitment that we undertook previously.

Several hon. Members referred to the position within the different objective regions, including the highlands and islands. Decisions on which regions will be classified as objective are for the review of the structural funds next year.

Let me say a word about the European Community budget. As originally proposed by the Commission, the commitments for so-called non-obligatory expenditure were to increase by no less than 15.8 per cent. I know that Labour Members always want to spend more on everything, but throughout the debate they have stressed the importance of spending just as much as the Commission and nearly as much as the European Parliament, which suggested that expenditure should rise by 17.67 per cent. in a single year. The Budget Council has reduced that to a 3.91 per cent. increase over 1992. That is still a considerable increase, but there is further discussion to come. I have already referred to the extra spending on the structural funds, which is within the expenditure to which I have referred.

Yesterday, we made it clear once again that we would not accept an adverse change in the abatement. An intervention from the hon. Member for Hamilton (Mr. Robertson) in the speech of my right hon. Friend the Foreign Secretary suggested that Labour would put the abatement up for negotiation. [HON. MEMBERS: "No."] I am glad to have that reassurance: it was not at all clear when the hon. Member for Dunfermline, East (Mr. Brown) spoke on the radio this morning. It is very important that Britain should maintain that abatement. It is also very important that we maintain budgetary discipline, value for money and the fight against fraud, all of which we are doing in the budget this year, as part of the British presidency.

Question put, That the amendment be made:—

The House divided: Ayes 262, Noes 312.

Division No. 92] [10 pm
Abbott, Ms Diane Cunningham, Dr John (C'p'l'nd)
Adams, Mrs Irene Dafis, Cynog
Ainger, Nick Dalyell, Tam
Ainsworth, Robert (Cov'try NE) Darling, Alistair
Allen, Graham Davidson, Ian
Anderson, Donald (Swansea E) Davies, Bryan (Oldham C'tral)
Anderson, Ms Janet (Ros'dale) Davies, Rt Hon Denzil (Llanelli)
Armstrong, Hilary Davies, Ron (Caerphilly)
Ashdown, Rt Hon Paddy Davis, Terry (B'ham, H'dge H'l)
Ashton, Joe Denham, John
Austin-Walker, John Dewar, Donald
Banks, Tony (Newham NW) Dixon, Don
Barron, Kevin Dobson, Frank
Battle, John Donohoe, Brian H.
Bayley, Hugh Dowd, Jim
Beckett, Margaret Dunnachie, Jimmy
Bell, Stuart Dunwoody, Mrs Gwyneth
Benn, Rt Hon Tony Eagle, Ms Angela
Bennett, Andrew F. Eastham, Ken
Benton, Joe Enright, Derek
Bermingham, Gerald Etherington, Bill
Berry, Dr. Roger Fatchett, Derek
Betts, Clive Faulds, Andrew
Blair, Tony Field, Frank (Birkenhead)
Blunkett, David Fisher, Mark
Boateng, Paul Flynn, Paul
Bradley, Keith Foster, Derek (B'p Auckland)
Bray, Dr Jeremy Foster, Don (Bath)
Brown, Gordon (Dunfermline E) Foulkes, George
Brown, N. (N'c'tle upon Tyne E) Fraser, John
Bruce, Malcolm (Gordon) Fyfe, Maria
Burden, Richard Galbraith, Sam
Byers, Stephen Galloway, George
Callaghan, Jim Gapes, Mike
Campbell, Mrs Anne (C'bridge) Garrett, John
Campbell, Menzies (Fife NE) George, Bruce
Campbell, Ronnie (Blyth V) Gerrard, Neil
Campbell-Savours, D. N. Gilbert, Rt Hon Dr John
Canavan, Dennis Godman, Dr Norman A.
Cann, Jamie Godsiff, Roger
Carlile, Alexander (Montgomry) Golding, Mrs Llin
Chisholm, Malcolm Gordon, Mildred
Clapham, Michael Gould, Bryan
Clark, Dr David (South Shields) Graham, Thomas
Clarke, Eric (Midlothian) Grant, Bernie (Tottenham)
Clelland, David Griffiths, Nigel (Edinburgh S)
Clwyd, Mrs Ann Griffiths, Win (Bridgend)
Coffey, Ann Grocott, Bruce
Cohen, Harry Gunnell, John
Connarty, Michael Hain, Peter
Cook, Frank (Stockton N) Hall, Mike
Cook, Robin (Livingston) Hanson, David
Corbett, Robin Hardy, Peter
Corbyn, Jeremy Harman, Ms Harriet
Corston, Ms Jean Harvey, Nick
Cousins, Jim Hattersley, Rt Hon Roy
Cryer, Bob Henderson, Doug
Cummings, John Heppell, John
Cunliffe, Lawrence Hill, Keith (Streatham)
Cunningham, Jim (Covy SE) Hinchliffe, David
Hogg, Norman (Cumbernauld) O'Hara, Edward
Home Robertson, John Olner, William
Hoon, Geoffrey O'Neill, Martin
Howarth, George (Knowsley N) Orme, Rt Hon Stanley
Howells, Dr. Kim (Pontypridd) Parry, Robert
Hoyle, Doug Pike, Peter L.
Hughes, Kevin (Doncaster N) Pope, Greg
Hughes, Robert (Aberdeen N) Powell, Ray (Ogmore)
Hughes, Roy (Newport E) Prentice, Ms Bridget (Lew'm E)
Hughes, Simon (Southwark) Prentice, Gordon (Pendle)
Hutton, John Prescott, John
Ingram, Adam Primarolo, Dawn
Jackson, Glenda (H'stead) Purchase, Ken
Jackson, Helen (Shef'ld, H) Quin, Ms Joyce
Jamieson, David Radice, Giles
Janner, Greville Randall, Stuart
Johnston, Sir Russell Raynsford, Nick
Jones, Barry (Alyn and D'side) Reid, Dr John
Jones, Jon Owen (Cardiff C) Robertson, George (Hamilton)
Jones, Lynne (B'ham S O) Robinson, Geoffrey (Co'try NW)
Jowell, Tessa Roche, Mrs. Barbara
Kaufman, Rt Hon Gerald Rogers, Allan
Keen, Alan Rooker, Jeff
Kennedy, Charles (Ross, C&S) Rooney, Terry
Kennedy, Jane (Lpool Brdgn) Ross, Ernie (Dundee W)
Khabra, Piara S. Rowlands, Ted
Kilfoyle, Peter Ruddock, Joan
Kirkwood, Archy Salmond, Alex
Leighton, Ron Sedgemore, Brian
Lestor, Joan (Eccles) Sheerman, Barry
Lewis, Terry Sheldon, Rt Hon Robert
Litherland, Robert Shore, Rt Hon Peter
Livingstone, Ken Short, Clare
Lloyd, Tony (Stretford) Simpson, Alan
Llwyd, Elfyn Skinner, Dennis
Loyden, Eddie Smith, Andrew (Oxford E)
Lynne, Ms Liz Smith, C. (Isl'ton S & F'sbury)
McAllion, John Smith, Rt Hon John (M'kl'ds E)
McAvoy, Thomas Smith, Llew (Blaenau Gwent)
Macdonald, Calum Snape, Peter
McFall, John Soley, Clive
McKelvey, William Spellar, John
Mackinlay, Andrew Squire, Rachel (Dunfermline W)
McLeish, Henry Steel, Rt Hon Sir David
Maclennan, Robert Steinberg, Gerry
McMaster, Gordon Stevenson, George
McNamara, Kevin Stott, Roger
Madden, Max Strang, Dr. Gavin
Mahon, Alice Straw, Jack
Mandelson, Peter Taylor, Mrs Ann (Dewsbury)
Marek, Dr John Taylor, Matthew (Truro)
Marshall, David (Shettleston) Thompson, Jack (Wansbeck)
Marshall, Jim (Leicester, S) Tipping, Paddy
Martlew, Eric Turner, Dennis
Maxton, John Tyler, Paul
Meacher, Michael Walker, Rt Hon Sir Harold
Michael, Alun Wallace, James
Michie, Bill (Sheffield Heeley) Wardell, Gareth (Gower)
Michie, Mrs Ray (Argyll Bute) Wareing, Robert N
Milburn, Alan Wicks, Malcolm
Miller, Andrew Wigley, Dafydd
Moonie, Dr Lewis Williams, Rt Hon Alan (Sw'n W)
Morgan, Rhodri Williams, Alan W (Carmarthen)
Morris, Rt Hon A. (Wy'nshawe) Wilson, Brian
Morris, Estelle (B'ham Yardley) Winnick, David
Morris, Rt Hon J. (Aberavon) Wise, Audrey
Mowlam, Marjorie Wray, Jimmy
Mudie, George Wright, Dr Tony
Mullin, Chris Young, David (Bolton SE)
Murphy, Paul
Oakes, Rt Hon Gordon Tellers for the Ayes:
O'Brien, Michael (N W'kshire) Mr. Eric Illsley and Mr. Alan Meale.
O'Brien, William (Normanton)
Adley, Robert Allason, Rupert (Torbay)
Ainsworth, Peter (East Surrey) Amess, David
Aitken, Jonathan Ancram, Michael
Alison, Rt Hon Michael (Selby) Arbuthnot, James
Arnold, Sir Thomas (Hazel Grv) Evans, Nigel (Ribble Valley)
Ashby, David Evans, Roger (Monmouth)
Aspinwall, Jack Evennett, David
Atkins, Robert Faber, David
Atkinson, David (Bour'mouth E) Fabricant, Michael
Atkinson, Peter (Hexham) Fairbairn, Sir Nicholas
Baker, Rt Hon K. (Mole Valley) Fenner, Dame Peggy
Baker, Nicholas (Dorset North) Field, Barry (Isle of Wight)
Baldry, Tony Fishburn, Dudley
Banks, Matthew (Southport) Forman, Nigel
Banks, Robert (Harrogate) Forsyth, Michael (Stirling)
Bates, Michael Forsythe, Clifford (Antrim S)
Batiste, Spencer Forth, Eric
Bellingham, Henry Fowler, Rt Hon Sir Norman
Bendall, Vivian Fox, Dr Liam (Woodspring)
Beresford, Sir Paul Fox, Sir Marcus (Shipley)
Biffen, Rt Hon John Freeman, Roger
Blackburn, Dr John G. French, Douglas
Body, Sir Richard Fry, Peter
Bonsor, Sir Nicholas Gallie, Phil
Booth, Hartley Gardiner, Sir George
Boswell, Tim Garel-Jones, Rt Hon Tristan
Bottomley, Peter (Eltham) Garnier, Edward
Bottomley, Rt Hon Virginia Gill, Christopher
Bowden, Andrew Gillan, Cheryl
Bowis, John Goodlad, Rt Hon Alastair
Boyson, Rt Hon Sir Rhodes Goodson-Wickes, Dr Charles
Brandreth, Gyles Gorman, Mrs Teresa
Brazier, Julian Gorst, John
Bright, Graham Grant, Sir Anthony (Cambs SW)
Brooke, Rt Hon Peter Greenway, John (Ryedale)
Brown, M. (Brigg & Cl'thorpes) Griffiths, Peter (Portsmouth, N)
Browning, Mrs. Angela Grylls, Sir Michael
Bruce, Ian (S Dorset) Hague, William
Budgen, Nicholas Hamilton, Rt Hon Archie (Epsom)
Burns, Simon Hamilton, Neil (Tatton)
Burt, Alistair Hampson, Dr Keith
Butler, Peter Hanley, Jeremy
Butterfill, John Hannam, Sir John
Carlisle, John (Luton North) Hargreaves, Andrew
Carlisle, Kenneth (Lincoln) Harris, David
Carrington, Matthew Hawkins, Nick
Cash, William Hawksley, Warren
Channon, Rt Hon Paul Hayes, Jerry
Chaplin, Mrs Judith Heald, Oliver
Churchill, Mr Heath, Rt Hon Sir Edward
Clappison, James Heathcoat-Amory, David
Clark, Dr Michael (Rochford) Hendry, Charles
Clarke, Rt Hon Kenneth (Ruclif) Heseltine, Rt Hon Michael
Clifton-Brown, Geoffrey Higgins, Rt Hon Terence L.
Coe, Sebastian Hill, James (Southampton Test)
Colvin, Michael Hogg, Rt Hon Douglas (G'tham)
Congdon, David Horam, John
Conway, Derek Hordern, Sir Peter
Coombs, Anthony (Wyre For'st) Howarth, Alan (Strat'rd-on-A)
Coombs, Simon (Swindon) Howell, Rt Hon David (G'dford)
Cope, Rt Hon Sir John Hughes Robert G. (Harrow W)
Cormack, Patrick Hunt, Rt Hon David (Wirral W)
Couchman, James Hunt, Sir John (Ravensbourne)
Cran, James Hunter, Andrew
Currie, Mrs Edwina (S D'by'ire) Hurd, Rt Hon Douglas
Curry, David (Skipton & Ripon) Jack, Michael
Davies, Quentin (Stamford) Jackson, Robert (Wantage)
Davis, David (Boothferry) Jenkin, Bernard
Day, Stephen Jessel, Toby
Deva, Nirj Joseph Johnson Smith, Sir Geoffrey
Devlin, Tim Jones, Gwilym (Cardiff N)
Dicks, Terry Jopling, Rt Hon Michael
Dorrell, Stephen Kellett-Bowman, Dame Elaine
Douglas-Hamilton, Lord James Key, Robert
Dover, Den Kilfedder, Sir James
Duncan, Alan King, Rt Hon Tom
Duncan-Smith, Iain Kirkhope, Timothy
Dunn, Bob Knapman, Roger
Durant, Sir Anthony Knight, Mrs Angela (Erewash)
Eggar, Tim Knight, Greg (Derby N)
Elletson, Harold Knight, Dame Jill (Bir'm E'st'n)
Emery, Sir Peter Knox, David
Evans, David (Welwyn Hatfield) Kynoch, George (Kincardine)
Evans, Jonathan (Brecon) Lait, Mrs Jacqui
Lamont, Rt Hon Norman Sainsbury, Rt Hon Tim
Lang, Rt Hon Ian Scott, Rt Hon Nicholas
Lawrence, Sir Ivan Shaw, David (Dover)
Legg, Barry Shaw, Sir Giles (Pudsey)
Leigh, Edward Shephard, Rt Hon Gillian
Lennox-Boyd, Mark Shepherd, Colin (Hereford)
Lester, Jim (Broxtowe) Shepherd, Richard (Aldridge)
Lidington, David Shersby, Michael
Lilley, Rt Hon Peter Sims, Roger
Lloyd, Peter (Fareham) Skeet, Sir Trevor
Lord, Michael Smith, Sir Dudley (Warwick)
Luff, Peter Smith, Tim (Beaconsfield)
Lyell, Rt Hon Sir Nicholas Smyth, Rev Martin (Belfast S)
MacGregor, Rt Hon John Soames, Nicholas
MacKay, Andrew Speed, Sir Keith
McLoughlin, Patrick Spencer, Sir Derek
McNair-Wilson, Sir Patrick Spicer, Sir James (W Dorset)
Maitland, Lady Olga Spicer, Michael (S Worcs)
Major, Rt Hon John Spink, Dr Robert
Malone, Gerald Spring, Richard
Mans, Keith Sproat, Iain
Marland, Paul Squire, Robin (Hornchurch)
Marshall, John (Hendon S) Stanley, Rt Hon Sir John
Martin, David (Portsmouth S) Steen, Anthony
Mates, Michael Stephen, Michael
Mawhinney, Dr Brian Stern, Michael
Merchant, Piers Stewart, Allan
Milligan, Stephen Streeter, Gary
Mills, Iain Sumberg, David
Mitchell, Andrew (Gedling) Sweeney, Walter
Mitchell, Sir David (Hants NW) Sykes, John
Moate, Roger Tapsell, Sir Peter
Monro, Sir Hector Taylor, Ian (Esher)
Montgomery, Sir Fergus Taylor, John M. (Solihull)
Moss, Malcolm Temple-Morris, Peter
Needham, Richard Thomason, Roy
Nelson, Anthony Thompson, Sir Donald (C'er V)
Neubert, Sir Michael Thompson, Patrick (Norwich N)
Newton, Rt Hon Tony Thurnham, Peter
Nicholls, Patrick Townend, John (Bridlington)
Nicholson, David (Taunton) Townsend, Cyril D. (Bexl'yh'th)
Nicholson, Emma (Devon West) Tracey, Richard
Norris, Steve Tredinnick, David
Onslow, Rt Hon Cranley Trend, Michael
Oppenheim, Phillip Trotter, Neville
Ottaway, Richard Twinn, Dr Ian
Page, Richard Vaughan, Sir Gerard
Paice, James Viggers, Peter
Patnick, Irvine Walden, George
Patten, Rt Hon John Walker, Bill (N Tayside)
Pattie, Rt Hon Sir Geoffrey Waller, Gary
Pawsey, James Ward, John
Peacock, Mrs Elizabeth Wardle, Charles (Bexhill)
Pickles, Eric Waterson, Nigel
Porter, Barry (Wirral S) Watts, John
Porter, David (Waveney) Wells, Bowen
Portillo, Rt Hon Michael Wheeler, Sir John
Powell, William (Corby) Whitney, Ray
Rathbone, Tim Whittingdale, John
Redwood, John Widdecombe, Ann
Renton, Rt Hon Tim Wilkinson, John
Richards, Rod Willetts, David
Riddick, Graham Wilshire, David
Rifkind, Rt Hon. Malcolm Winterton, Mrs Ann (Congleton)
Robathan, Andrew Winterton, Nicholas (Macc'f'ld)
Roberts, Rt Hon Sir Wyn Wolfson, Mark
Robertson, Raymond (Ab'd'n S) Wood, Timothy
Robinson, Mark (Somerton) Yeo, Tim
Roe, Mrs Marion (Broxbourne) Young, Sir George (Acton)
Ross, William (E Londonderry)
Rowe, Andrew (Mid Kent) Tellers for the Noes:
Rumbold, Rt Hon Dame Angela Mr. David Lightbown and Mr. Sydney Chapman.
Ryder, Rt Hon Richard
Sackville, Tom

Amendment accordingly negatived.

Main Question put and agreed to.

Resolved, That this House takes note of the White Paper on developments in the European Community, January to June 1992 (Cm. 2065), European Community Documents Nos. 9649/92, relating to the principle of subsidiarity, 4829/92 and 5201/92, relating to Commission proposals for the finances of the Community to 1997, 5202/92, relating to the system of Own Resources, 5203/92, relating to renewal of the Inter-Institutional Agreement on budgetary discipline and improvement of the budgetary procedure, SEC (92) 1412, relating to the United Kingdom abatement, 8567/92, relating to establishment of a Cohesion Fund, COM (92) 140, relating to the Preliminary Draft Budget of the European Communities for 1993, 7933/92, relating to Letter of Amendment No. 1 to the Preliminary Draft Budget, 8209/92, relating to the Draft Budget, 9901/92 and the proposals described in the unnumbered Explanatory Memorandum submitted by H.M. Treasury on 19th November, relating to the European Parliament's proposed amendments and modifications to the Draft Budget, 6569/92, relating to the Court of Auditors' Opinion No. 2/92, the Annual Report of the Court of Auditors for 1990, the negotiating approach adopted by Her Majesty's Government in the run-up to the Edinburgh European Council on 11th to 12th December and the Government's continuing efforts to secure budgetary discipline and value for money from Community spending.

Mr. Nigel Spearing (Newham, South)

On a point of order, Mr. Deputy Speaker.[Interruption.]

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

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

Mr. Spearing

I rise on a point of order of which I gave Madam Deputy Speaker prior notice. I must first apologise for not being able to raise it at the beginning of the debate, which would have been the more appropriate time. I have the best of reasons: I was on duty with a Select Committee meeting representatives of the Folketing in Copenhagen, and have just returned.

Under Standing Order No. 127, it is the duty of the Select Committee on European Legislation to refer to Standing Committees documents that it believes should be considered by the House before a decision is taken by the Council of Ministers in Brussels or wherever the Council is meeting. Under the Standing Order, the debate takes place in Committee unless the House decides that the matters involved are so important that they merit a debate on the Floor of the House.

The Select Committee wanted 12 or 14 matters to be referred to the House and informed the Leader of the House to that effect. Consequently, a procedural motion was moved last week to the effect that the Standing Order should not apply and that the documents should be considered by the House before a decision was made in Brussels.

You will know, Mr. Deputy Speaker, that the Committee required the House to consider about 14 documents. They were laid on the Table and were available in the Vote Office last week, although when the Leader of the House announced the debate which has just taken place, he referred to it as a debate "on the budget".

I shall not rehearse the topics involved, as they were contained in the motion that the House has approved. The point is that, had the Select Committee decided that those matters were of lesser importance, it would no doubt have suggested that five or six debates should take place, batching the 14 papers together in Committee, in which case there would have been an opportunity to question each Minister for an hour, and for another two hours of debate, adding up to at least 10 and perhaps 15 hours.

Today, we had to consider the documents—which could have been hatched together in the way that I suggested—and also matters relating to the Edinburgh summit, to GATT and to the EC. My question is: having passed those Standing Orders, and as it is the clear will of the House and of the Government that national Parliaments and assemblies should be fully associated with those matters, has the obligation of the Government to provide time for debate and consideration of them been properly discharged?

Mr. Deputy Speaker

I assure the hon. Gentleman that the motion tabled was perfectly in order. It is not a matter for the Chair, and I suggest that he may wish to pursue it with the Leader of the House or the appropriate Ministers.