TREATY ON EUROPEAN UNION (Hansard, 13 January 1993)

§ Mr. Cash
I beg to move amendment No. 40, in page I, line 9, leave out 'II'.

The Chairman
With this it will be convenient to take the following amendments: No. 323, in page 1, line 9, leave out 'II'.

§ Mr. Cash
In moving amendment No. 40 on title II, I wish to refer briefly to the implications of having a referendum. We have not had a free vote in the House, nor a White Paper. I wish to put it on the record that this is an historic decision, but not to pursue that matter until we come to the question of a referendum. It is important for people to note that there will be an opportunity for a campaign for a referendum throughout the country, which will begin on Sunday at 11.30 am in Hyde park. Having got that point across—

§ Mr. Ian Taylor
Will my hon. Friend forgive me if I am not there? Will he bear in mind that many hon. Members believe that it is the job of the House to make difficult 937 decisions on a complex Bill and that that is what the true definition of parliamentary scrutiny should be? That is why we oppose a referendum.

§ Mr. Cash
I should have more sympathy with what my hon. Friend has said if I did not believe, as many other hon. Members and 75 per cent. of the British population believe, that the issue goes to the heart of the manner in which our parliamentary democracy is to be conducted. That is the crucial issue and that is why we seek a referendum.
I wish to refer to the recent statement of Chancellor Kohl of Germany of Monday 4 January with respect to the Edinburgh summit, which has direct relevance to the questions arising on title II. He said: the leaders of the European Community expressed their sympathy for Denmark's special reservations, but decided not to change the Maastricht treaty. Reopening negotiations was not, and is not, on our agenda. 4.45 pm
He continued: In Edinburgh we therefore could go no further than to clarify the relevant treaty clauses to respond to the main Danish concerns. This purely declaratory 'decision' neither changes nor complements the treaty and therefore does not require ratification by member states. It was with that in mind that I raised the question whether the Attorney-General could or should come to the House —I believe that he should to explain to us precisely the nature of the decisions taken in Denmark. Undoubtedly there are seriously conflicting opinions. Eminent Queen's counsel believe that the Danish decision was not binding, and the view has been expressed that the matter is being dealt with by an international legal obligation outside the treaty. Indeed, that is what the Government claim.
A major question arises that turns on the nature of the legal commitment, if it be a commitment at all; I believe that it is not. This will ultimately determine the relevance of the Edinburgh summit and the decision that was taken, with vast consequences for the United Kingdom, the Danish people and Europe as a whole. We do not want the treaty ratification procedure to proceed in a state of obscurity and confusion. We want to get the thing out into the open. Accordingly, I believe that it would be important for the Attorney-General—I have written to him and to my right hon. Friend the Prime Minister, enclosing a copy of a legal assessment that has been produced by some eminent Queen's counsel, to ask for their opinions—to clarify the matter. I have asked my right hon. and learned Friend and right hon. Friend to give me their opinions in writing.

§ Mr. Spearing
I think that everyone agrees that this is a constitutional matter of some significance. You may recall, Mr. Morris, that we had some difficulty during a previous debate when the Minister was unable immediately to answer some of the questions that were put to him. I wrote to the Attorney-General on the Edinburgh issue on 15 December and asked him to reply before this debate took place. The hon. Member for Stafford (Mr. Cash) may be interested to know that I heard this morning that the Attorney-General would not be replying. I was told that a reply would come from the Minister of State, but that it was unlikely that I would receive it before this debate. I mention that to help the hon. Gentleman and the entire Committee. There are many matters that should be 938 clarified, and especially the views of the Government, before we proceed, because we do not know how they will affect the law of this country.

§ Mr. Cash
I am grateful to the hon. Gentleman for that intervention which helps to clarify the position.
Title II—

§ Mr. Jeremy Corbyn (Islington, North)
Will the hon. Gentleman give way?

§ Mr. Marlow
Let my hon. Friend get on.

§ Mr. Corbyn
I thank the hon. Member for Stafford (Mr. Cash) for giving way. He has obviously studied these matters in some detail. As an agreement has been reached between the Government and the Danish Government on a let-out clause that meets the Danish position, and if there is to be no change in the proposed Maastricht treaty, what is the point or validity of having a referendum in Denmark when nothing has changed since the first referendum?

§ Mr. Cash
That is the very matter which should be clarified. Does the present position add up to a row of beans? On one interpretation it appears that it does not. The matter must be resolved as we go forward.

§ Mr. Bernard Jenkin (Colchester, North)
I think that I might be able to shed some light on the matter. In his statement to the House, my right hon. Friend the Prime Minister said: The solution is binding in international law."—[Official Report, 14 December 1992; Vol. 216, c. 23.] Any reference to Community law is conspicuous by its absence. Is not that the truth of the matter? It might be an international treaty, but it has no validity in Community law.

§ Mr. Cash
That is where the problem lies. We are talking about the ratification of a treaty. We are dealing with the future of the European Community. Title II amends the whole of the treaty of Rome over a wide range of matters which are set out from page 9 to page 60 of Cm. 1934. All those matters are affected by the legal status of the decisions that are being taken, provided that they are being taken in a proper constitutional manner that can stand up in relation to the European Community itself.
It is no good Governments and others going round, in the belief that they can cobble together decisions on pieces of paper, picking a little bit from one pigeon hole of international law and a little bit from another, nesting here and nesting there. We must know the precise impact of the treaty. The purpose of my opening with Chancellor Kohl's remarks is to illustrate the point that there is no clear understanding, even among the leaders of Europe, of precisely what was decided at Edinburgh.

§ Mr. Nicholas Budgen (Wolverhampton, South-West)
Will my hon. Friend invite the Minister to explain how, if, as we understand it, under the European Communities Act 1972, the general body of international law is excluded from consideration under Community law, the treaty can be binding in international law and binding in Community law?

§ Mr. Cash
My hon. Friend, who is a distinguished lawyer, makes yet another good point. The matter must be cleared up. We need to know the treaty's implications for Britain's domestic law in order to decide whether we have a treaty with which we can live.

§ Mr. Marlow
As that matter is so fundamental to the further consideration of the great issues that are at stake, will my hon. Friend, before he proceeds with his speech, put a positive, generous and pleasant invitation before the Minister to clarify the issue now so that we know where we stand?

§ Mr. Cash
I am grateful for that suggestion. The Minister of State, who is attentive to these matters at all times, will no doubt want to respond. I do not know whether he wishes to do so now. I see no sign of great movement to the Dispatch Box, but I hope that at least his advisers will bear in mind that we not only ask for but insist upon an answer to the question. The whole range of government of the United Kingdom is being changed dramatically by the treaty and by the provisions of title II. It is not good enough for us to be left in any uncertainty about the impact of the treaty on our domestic law. The ratification of the treaty means that we will be part of a new Community. Therefore, I invite the Minister to make a representation to us in due course, I hope before the end of the day.

§ Mr. Dalyell
If the hon. Gentleman is so attentive to all these matters, could we be forgiven for wondering how such a diligent colleague brought himself to vote for the Single European Act?

§ Mr. Cash
The answer to that is extremely simple. I believe in the European Community, it is extremely important and it should be made to work on a realistic basis. The Single European Act, through co-operation and, primarily, through its development of commercial and trading policies, was a sensible way in which to reduce barriers to trade and to increase free trade throughout Europe. The Single European Act is primarily about trading and commercial matters, but the Maastricht treaty is primarily about government.

The Minister of State, Foreign and Commonwealth Office (Mr. Tristan Garel-J ones)
rose—

§ Mr. Cash
I shall give way to the Minister. I gather that he intends to resign, but we do not yet know whether he has.

§ Mr. Garel-Jones
Does my hon. Friend also support the extensions of qualified majority voting brought about by the Single European Act? Does he therefore support the principle of qualified majority voting?

§ Mr. Cash
I have said repeatedly that I am in favour of the notion of an increase in majority voting for specific purposes relating to co-operation in the commercial field which will enable free trade to develop within Europe and at the same time ensure that we can reduce barriers to trade. The Community originated because of difficulties in reducing protectionism. Therefore, it had a logical reason. There is no logical reason for turning over Britain's government and democracy to majority voting. That is political union. The Single European Act was a move towards greater economic union.

§ Mr. Budgen
Does my hon. Friend agree that one thing that has clearly emerged is that the European Court is a highly political organisation? Was it not a highly political organisation at the time of the Single European Act? Many of us thought that if we voted for any form of qualified majority voting, that procedure would be progressively 940 extended by the political movement of the Commission and the Court. How did my hon. Friend find himself able to support the beginnings of that most disagreeable procedure?

§ Mr. Cash
I am always delighted to reply to a mischievous remark by my hon. Friend. He may recall that I tabled an amendment to the Single European Act which said that nothing in the Act would derogate from the sovereignty of the United Kingdom. My hon. Friend will be glad to know that Mr. Enoch Powell signed that amendment because he believed that it would be a way of containing the implications of the Single European Act described by my hon. Friend. None the less, for the reasons that I have given, I thought the Act necessary to reduce the degree of protectionism.

The Chairman
Order. I imagine that the former Member for Wolverhampton, South-West, Mr. Powell, will wish to read the argument for amendment No. 40 in tomorrow's Hansard. I hope that we can now get on with amendment No. 40 so that he is not disappointed.

§ Mr. Cash
What does title II involve? Article G turns an economic community into a European community. That is a fundamental change. It is intended to move from the notion of an economic community to a political union. A subsequent amendment in my name deals with political parties in Europe. It is clear from the treaty—I know that many Conservative Members wish it—that European political parties should operate within a politically integrated Europe. That is what the treaty says and it is clear that the idea is for political parties to operate at a European level with a view to integration—political integration in Europe. That is why I object to the change of the words from European Economic Community to European Community. We are debating the construction of a federal treaty, the primary political impetus of which is to be at the European level, and the political parties at that level are intended to replace the national Parliaments.

§ Mr. Bill Walker
Does my hon. Friend agree that in 1972 we were told that we were joining a European Economic Community and that certain provisions would be permanent? They are no longer there. In 1985–86 we were told that the Single European Act had only certain implications and some former members of the Government believed that and supported it, but they have now changed their position. Experience tells us that things go far further than the Bill and that is why the amendments are essential.

§ Mr. Cash
That is right. The fact is that the single market has been severely abused. The Select Committee on Trade and Industry is now investigating that, and I hope that that will help to make the market work more effectively.

§ Mr. Nicholas Winterton
I think that my hon. Friend has let go the challenge issued from the Front Bench rather too easily. If I am not mistaken, Ministers have challenged my hon. Friend to justify his current position, bearing in mind that he voted for the Single European Act in 1986.
Surely the House is entitled to learn from its mistakes. It is clear that many hon. Members believed what they were told by Ministers at the time about the limited implications of the Single European Act. We now see that the Act goes very much further. Should not the House of 941 Commons, of all places—and, indeed, the Government —learn from their mistakes rather more frequently than they do?

§ Mr. Cash
I agree that we must all learn from our mistakes, but 1 will not change the position that I have adopted, and have held consistently.
The single market needs to be cleaned up. It has been abused, and I hope that the Select Committee on Trade and Industry will be able to throw some light on the unfair practices that are causing immense damage to British industry, increasing unemployment in this country and worsening the recession.

§ Mr. Marlow
Had my hon. Friend known in advance that the powers for qualified majority voting in the Single European Act would be as heavily abused by the European institutions as we have discovered them to have been, would he have voted for it?

§ Mr. Cash
The answer to that can be found in what my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) said about the activities of the European Court of Justice. Abuses should be dealt with in that court. I stand by what I said about the single market.
The provisions of article 2, which replaces the previous article 2, include a reference to sustainable and non-inflationary growth respecting the environment, a high degree of convergence of economic performance, a high level of employment and of social protection". One thing can be said for certain about the direction in which the European Community is currently going: we are emphatically not seeing a high degree of economic convergence, non-inflationary growth or a high level of employment.
The real problem is that that is a load of rubbish. The words are in the treaty, but there is absolutely no evidence that the way in which the policies are being implemented is having any effect of the kind that is desired. Unemployment in the Community has risen from about 8 million to 15 million over the past few years, and it is expected to rise further to about 30 million. The policies that are being pursued are emphatically not bringing unemployment down. Indeed, I will go further and say that the Maastricht provisions relating to economic and monetary union and to convergence are likely to impose immense pressure for more unemployment. Moreover, the capping of public spending will prevent people from benefiting from an infrastructure that would generate construction work and thus increase employment.
The provisions of article 2 are completely contradicted by what is now happening, and the position is becoming worse rather than better. That in itself is a reason for leaving out article 2. People's expectations are being raised and then dashed. How can anyone imagine that that can continue without serious disruption in Europe? It is bad for business, because it raises expectations that cannot be fulfilled: it is wrong to deceive the workers of Europe into believing that something will happen simply because of what is written on a piece of paper. That is one of my objections to article 2. It is unfair and unrealistic to mislead people in such a way.

§ Sir Russell Johnston (Inverness, Nairn and Lochaber)
I do not wish to interrupt the hon. Gentleman's flow, but I feel that his remarks about the clause referring to 942 political parties must be challenged. Presumably he does not object to the Conservative party's playing its part in a wider Conservative/Christian Democratic coalition. If he does not, what does he consider to be the purpose of such involvement?

§ Mr. Cash
It is clear that some form of political understanding in Europe is required, but that is perfectly achievable within the framework of the treaty of Rome and the Single European Act as it stands. There is no need to go down this further route. We want to enhance the national Parliaments and improve the scrutiny process, which is now lamentable in many member states. It is for precisely such reasons that I object to the fact that all we have at the back of the Maastricht treaty is a declaration relating to national Parliaments. It is not binding in any sense. We want to improve the quality of political decision making in Europe, but the treaty will do exactly the opposite.

§ Mr. David Winnick (Walsall, North)
The hon. Gentleman mentioned public spending. Many Opposition Members—perhaps the majority; I do not know—find one aspect of that very difficult to understand. How on earth can someone who argues for further public spending to deal with a high level of unemployment—whether in Britain, where it certainly exists, or elsewhere in the Community—defend or justify the maximum gross national product of 3 per cent. that is laid down in the treaty?
At least a page is devoted to the penalties that will be incurred by member countries that go beyond that limit, but no limit is set in regard to unemployment, apart from the reference mentioned by the hon. Gentleman. If the treaty proceeds and such a limit is applied, it will undoubtedly bring about far more unemployment, deflation and misery throughout the Community. I do not see how any member of the Labour movement could possibly support what is being done.

§ Mr. Cash
That echoes many of the sentiments that I have expressed. Decisions about the allocation of economic and social priorities are currently made in the ballot box in general elections, on the basis of party manifestos, but all that will be taken away—even, in practice, under stage II, by way of gravitational pull into stage III. Under stage II, the European monetary institute will have important and greatly underestimated functions, which were criticised by a member of the Bundesbank council who wrote to me recently. He said that they had not been properly explained to the German people.
The understanding entered into about stage II will have a Profound impact on decisions made by the people who will suffer increasing unemployment. In fact, the power to make those decisions is being taken from them and given to members of the European monetary institute. The Governor of the Bank of England, sitting in the monetary institute—under article 8 of the protocol relating to it—will not be able to take instructions as currently prescribed by section 4 of the Bank of England Act 1946.
The massive change taking place under stage II has been greatly underestimated. It strikes at the heart of the way in which we make decisions. Our voters, who are afflicted by the unemployment that is resulting from decisions that are already effectively being implemented, are losing the power to make their own decisions. Such 943 considerations lead some of us to say, in the absence of a free vote, that we must have a referendum. The people must be consulted.

§ Mr. Hugh Dykes (Harrow, East)
Will my hon. Friend make available the letter from the Bundesbank official about the monetary institute and European monetary union, so that hon. Members can read it?

§ Mr. Cash
It is not a letter but an article, which makes it clear—

§ Mr. Dykes
If I may interrupt my hon. Friend, he told the Committee that he had a letter from, I believe, the vice-chairman of the Bundesbank—

§ Mr. Charles Kennedy (Ross, Cromarty and Skye)
No, from a member of its council.

§ Mr. Dykes
I am grateful to the hon. Gentleman. He was presumably writing to explain why he has misgivings about the policy formulations in that particular part of the treaty. Will my hon. Friend help by making that letter —written to him, presumably—available to us all?

§ Mr. Cash
If any correction is required, it is contained in the document that I have, which is not a letter but which throws considerable doubt on the feeings that there were about the monetary institute and the attitudes adopted by the Bundesbank council.

§ Mr. Dykes
I am grateful for my hon. Friend's description of an article, but that is not the same as his saying—as he clearly and equivocally did just now—that he had received a letter. Presumably it was addressed to him, perhaps in response to one sent by my hon. Friend to a member of the Bundesbank council or because he had been mentioned in the press. It was clearly described as such.
I know that my hon. Friend has been in difficulties with other kinds of letters recently. I received an interim reply from Madam Speaker about an inquiry that is under way in the Serjeant at Arms office because my hon. Friend has apparently been using official envelopes to write to the constituents of other right hon. and hon. Members to tell them about anti-European meetings—

The Chairman
Order. The hon. Gentleman must address the Chair. I am mystified as to the relationship of that point to amendment No. 40. Also, the hon. Member for Stafford (Mr. Cash) is beginning to repeat the speech that he made before Christmas. I listened attentively then and read it carefully, and I do not really want to hear it again. I should like to hear about amendment No. 40, about which we have heard very little in the nearly half an hour that the hon. Member for Stafford has been on his feet.

§ Mr. David Harris (St. Ives)
On a point of order, Mr. Morris. A serious allegation has been made by my hon. Friend the Member for Harrow, East (Mr. Dykes) against my hon. Friend the Member for Stafford (Mr. Cash). Surely it is only right and proper, in the best traditions of the House, that my hon. Friend the Member for Stafford answers that serious allegation about apparent misuse of House of Commons stationery.

The Chairman
That matter is for Madam Speaker and the Serjeant at Arms and not for the Committee stage of a Bill. I hope that right hon. and hon. Members recognise that.

§ Mr. Dykes
On a point of order, Mr. Morris. May I point out that if I was addressing the Chair incorrectly when you called me to order, it was because I was anxious to hear an explanation from my hon. Friend the Member for Stafford. If it is in order, perhaps he will respond to my latter comments—but I would particularly like an explanation about my hon. Friend's reference to the letter from a member of the Bundesbank council.

§ Mr. Cash
If it was misunderstood, I withdraw any suggestion that I received a letter from a member of the Bundesbank council. I make that clear. However, the article in question throws grave doubts on the basis on which the EMI was established.

The Chairman
Order. I ask the hon. Gentleman to relate that matter specifically to amendment No. 40 or to leave it aside.

§ Mr. Roger Knapman (Stroud)
On a point of order, Mr. Morris. If the time comes when a closure motion is moved in resepct of this set of amendments, will you bear in mind—

The Chairman
Order. I am not anticipating any future events. I merely want the Committee to proceed with the debate on amendment No. 40—or I hope that it will do so.

§ Mr. Cash
Citizenship of the union raises a fundamental question about the relationship of the voter to the Government of this country as elected at a general election. Article 8(2) states: Citizens of the Union shall enjoy the rights conferred by this Treaty and shall be subject to the duties imposed thereby. No specific, clear indication is given of what those duties will be. That article is therefore in the nature of a blank cheque, which presents a serious problem. If we are expected to ratify that provision without being told the nature of those duties, we are being asked to agree to something that the people of this country will not, without an explanation, be able to understand.
Title VI raises the whole question of economic and monetary policy. Its provisions present a serious difficulty in relation to the manner in which decisions are taken, to which I referred when I dealt with the European monetary institute and its relationship to the establishment of the central bank.
By creating that bank for the whole of Europe, a lethal blow is being struck at the heart of democracy for the people of Europe as a whole. We may have an opt-out, but it must be set against the provision relating to the EMI and to the transitional arrangements to which I referred earlier.
5.15 pm
An amendment in the name of the Leader of the Opposition seeks to leave out the whole of title III, which deals with the European Coal and Steel Community. I do not know what led to that particular provision, wide ranging though it is. However, its importance in relation to the British pit closure programme and to matters that we debated some months ago—which led to the High Court 945 declaring that closure programme unlawful—raises an important question in respect of the European coal and steel industry and its regulation.
I understand that a 100-year contract on very favourable terms, and backed by subsidies, has just been provided to the German coal industry, which will place a very unfair burden on our electricity users. I understand also that the European Commissioner formerly responsible for competition policy, Sir Leon Brittan, who has just changed his portfolio, approved a £3.3 billion deal between the power generators and the heavily subsidised coal industry.
Under that arrangement, which was entered into under the European coal and steel regulations, Britain is presented with a significant problem in respect of its own coal industry. A significant part of that industry, which includes the Trentham colliery in my constituency, is due for closure. It seems wholly wrong that that should have happened in the first place, and under the aegis of the European coal and steel arrangements.

§ Mr. Bowen Wells (Hertford and Stortford)
On a point of order, Mr. Morris. Is it in order for my hon. Friend the Member for Stafford (Mr. Cash) to address the Committee on the European coal and steel industries covered by title III when right hon. and hon. Members are debating an amendment that seeks to eliminate title II?

The Chairman
Perhaps the hon. Gentleman will note that the selection list allows for titles II and IV also to be debated. While I understand the hon. Gentleman's point, in that I would expect the hon. Member for Stafford to concentrate on title II, nevertheless his remarks are just in order.

§ Mr. Cash
When those negotiations are under way, the opportunity to sort out the problems created by unfair subsidies and unfair competition could and should have been taken.
Amendment No. 183, also in my name, refers to article Q in title VII, which prescribes that the period of the treaty shall be unlimited. The treaty itself contains no power for cessation. If it is to be "for an unlimited period", we ought to be given some indication of why, if things go wrong, we will not have an opportunity to reconsider matters.
The provisions of title II are extremely wide ranging and affect all the amendments relating to the treaty of Rome. They go to the heart of the manner in which we would be governed in Europe as a whole. They deal with questions relating to employment, public health and culture and the establishment of trans-European networks. We have been given no justification for the provisions. There has been no White Paper explaining why they have been brought forward; we have had to rely instead on occasional Select Committee hearings, and so on.
It seems to me that the entire title is unnecessary. The policies that lie behind it have not been borne out by practical experience. Britain has a massive trade deficit with the European Community—at present, about £15 billion a year. I seek an improvement in the quality of free trade within the European Community. The present proposals are unnecessary. We should be improving the European Community rather than becoming involved in the governmental matters referred to in the treaty—a move which will cause a serious loss of faith in our ability to work together and co-operate in Europe as a whole.

§ Mr. Andrew Smith (Oxford, East)
Labour's approach to the amendments, to the important provisions of titles II, III and IV—and, indeed, to the Bill as a whole—is to argue for European co-operation as an important dimension of our party's internationalism. For the people of Britain, as for the people of Europe, we want to see the real benefits of a positive future for the European Community.

§ Mr. Denzil Davies
On a point of order, Mr. Morris. The second amendment in the group was tabled by a number of my right hon. and hon. Friends and myself. You have quite properly called the Front-Bench spokeman. May I suggest, however, that the Opposition Front-bench spokeman cannot have an inalienable right to be called to speak immediately after the mover of an amendment and that consideration should be given to those on the Back Benches who have tabled amendments?

The Chairman
There is no inalienable right, but it seemed appropriate on this occasion that I should call the Opposition Front-Bench spokeman. I was hoping also to call the right hon. Member for Llanelli (Mr. Davies) before long—but we shall see how we get on.

§ Mr. Smith
I, too, am concerned that Back Benchers should have a proper opportunity to contribute to our proceedings. It is not the length of Opposition Members' speeches that have prevented them from doing so.
We tabled amendments Nos. 11, 17 and 20 so that we might have an opportunity to present the case for a positive future for Britain in the European Community. They are probing amendments and will not be pressed to a vote.
The Labour party has made it clear how important we believe it is that the Community pursues the principles set out in article 2 of the treaty, which the hon. Member for Stafford (Mr. Cash) described as rubbish. So far from being rubbish, they are eminently desirable and important goals for Europe to pursue. The article is a powerful statement of the central objectives of the European Community and it is important to get that message across to the public. It states:
The Community shall have as its task, by establishing a common market and an economic and monetary union and by implementing the common polices or activities referred to in Articles 3 and 3a, to promote throughout the Community a harmonious and balanced development of economic activities, sustainable and non-inflationary growth respecting the environment, a high degree of convergence of economic performance, a high level of employment and of social protection, the raising of the standard of living and quality of life, and economic and social cohesion and solidarity among Member States. Those important objectives, set out at the beginning of the treaty as the Community's task, set the context, legally as well as politically, within which its other provisions must be interpreted and applied. Britain would be much better off if the Government acted on the provisions of article 2, not least by giving the lead on proposals for concerted European economic recovery rather than obstructing them and watering them down.

§ Mr. Austin Mitchell (Great Grimsby)
My hon. Friend has listed the new requirements to be introduced into the treaty of Rome by the Maastricht treaty, which includes a high level of employment and of social protection, the raising of standards of living and quality of life and so on. All those are important objectives to which Opposition Members are strongly attached. But article 3a(2) states 947 that the primary objective of economic policy is "to maintain price stability". That has never been an objective of the Labour party—nor, as far as I know, has it been the objective of any economic management in any country. [HON. MEMBERS:"Oh!"] That is stated as the primary objective.
The article then states that the other objectives are to be realised without prejudice to this objective". In other words, the paramount requirement is price stability—destructive though that is certain to be in terms of employment, jobs and economic growth.

§ Mr. Smith
I am pleased to hear my hon. Friend the Member for Great Grimsby (Mr. Mitchell) endorse the objectives of article 2, which seem to me to be good enough reason to support it. My hon. Friend referred to price stability. It would be interesting to hear his arguments in favour of price instability. I have yet to see the benefits of price instability to working people and, in particular, to pensioners. There is no merit in price instability. But I know what my hon. Friend was getting at. He sought to make the important point that we should be pursuing policies which, as a whole, promote full employment, prosperity and social justice, and that the goal of price stability should not be allowed to prejudice that.

§ Mr. Denzil Davies
rose—

§ Mr. Corbyn
rose—

§ Mr. Austin Mitchell
rose—

§ Mr. Smith
I must make progress. I shall be happy to take further interventions later and I shall come on to refer to the details of article 3a, to which my hon. Friend the Member for Great Grimsby referred.
As I was saying, Britain would be far better off if the British Government put article 2 into effect and led forward the programme for concerted European recovery rather than obstructing it as they were doing before the Birmingham summit and at Edinburgh.
Many of the problems surrounding the treaty—we acknowledge that there are problems—arise from the way in which the Government have approached the matter. As I have said before, they are like gatecrashers entering a party backwards and assuring all around them that they are just on the way out. Britain will have paid a double price for the opt-out from the social chapter: first, there is the price to British workers, who have been disgracefully deprived of the rights that will apply in all the other member states—something that we shall seek to put right in our debates on the social chapter—and, secondly, there is the price paid in terms of the negotiating capital used by the Government to achieve the opt-out, which could have been used instead to help put Britain into the first division in Europe rather than confining it to the second.
I am sure that my right hon. and hon. Friends will want to devote attention to other fears that have been expressed about the treaty—its problems and how they can be overcome—as well as its benefits. We have never made any secret of the fact that, in a number of respects, the present treaty is not the treaty that we would have sought to negotiate. It is, after all, the product of bargaining between the 12 Governments of the Community. At the time of negotiation, five of those Governments were Christian 948 Democrat or Conservative, four were coalitions, one was Social Democrat identifying with the Liberals and only two were Democratic Socialist. It should therefore come as no surprise to anyone that we have a number of important concerns that we shall wish to express in subsequent debates.
But with all the talk of problems, let us not forget the enormous potential benefits that can be derived both from the provisions already contained in the Bill and from the amendments that we shall seek to introduce. It is little wonder that the public grow sceptical of politicians' approach to the Maastricht treaty when they hear only of problems and wrangling and not of the potential benefits. Those benefits are derived from two important principles which are close to the hearts of Labour Members. First, international co-operation is essential for securing and preserving peace; and, secondly—this is inscribed on many of our trade union banners—unity is strength. By joining together in a union, we can secure social and economic progress which would not be achieved if we all stood apart. Those important principles are reflected in many of the provisions in the titles which are the subject of this debate.
When we examine the history of Europe and the state of the world, the value of such co-operation—rather than destructive nationalism—is more evident, whether through meditation on Remembrance day, by visits to graveyards in northern France or by seeing on television and elsewhere the appalling suffering of modern warfare.
Let none of us doubt the importance of building closer European co-operation. Let none of us forget that at the heart of the European project was the determination of European countries, especially France and Germany, never to go to war again. That is a noble aim and a worthy expression of our common humanity. Whatever the problems of Maastricht and whatever the difficulties and arguments that lie along the road to Europan union, let us not forget for one moment why it was well worth embarking on the journey in the first place.

§ Mr. Marlow
Government Ministers are saying that the treaty will not happen so we may as well vote for it. The hon. Gentleman is saying that if the treaty goes through we will get socialism in our time. I suggest that they are two fundamental reasons why all of my hon. Friends should vote against the damn thing.

§ Mr. Smith
That is a matter for the hon. Member for Northampton, North (Mr. Marlow) and his hon. Friends. We have made no secret of the fact that the provisions of article 2 would stand proud in any Labour manifesto. That is why we are so strongly in favour of the principles.

§ Mr. Corbyn
I have listened with great care to what my hon. Friend has said about article 2 and its social objectives. Does he concede that the whole basis of the Maastricht treaty is the establishment of a European central bank which is staffed by bankers, independent of national Governments and national economic policies, and whose sole policy is the maintenance of price stability? That will undermine any social objective that any Labour Government in the United Kingdom—or any other Government—would wish to carry out.
Does my hon. Friend recognise that the imposition of a bankers' Europe on the people of this continent will endanger the cause of socialism in the United Kingdom 949 and in any other country?

§ Mr. Smith
It is a task of the Labour party, and Labour in government, to ensure that the process does not result in a bankers' Europe—that the concerns of bankers are not allowed to dominate the goals for social progress to which we all subscribe. Time and time again we have made it clear that we believe that decisions on such matters must be taken within a politically determined context. That presents a strong case for strengthening the role of ECOFIN in the Community.

§ Mr. Malcolm Chisholm (Edinburgh, Leith)
Does my hon. Friend accept that article 107 makes it absolutely clear that the European central bank will not take instructions from ECOFIN or any similar body?
On the point that article 2 would fit well in a Labour manifesto, article 2 explicitly says that it is subordinate to article 3. I wonder why my hon. Friend is focusing on article 2 rather than article 3. Article 3 makes it clear that the fundamental objective of economic policy is the control of inflation.
It was not fair for the hon. Gentleman to say, in response to my hon. Friend the Member for Great Grimsby (Mr. Mitchell), that everybody wants the control of inflation. Of course, we want the control of inflation. However, it has never been the primary objective of Labour's policy that the control of inflation should be the first objective of economic policy. Therefore, articles 2 and

§ Mr. Smith
The reason why I am placing such stress on article 2 is precisely that the preamble of the treaty sets as the task of the Community the provision of a high level of employment and of social protection, a raising of the standard of living and quality of life". Through Government and European institutions, in common with our sister parties in the rest of the European Community, it is our task to ensure that the implementation of those goals takes precedence. For democratic socialists and for all of those whom we aspire to represent, there are important reasons for engaging positively in the Maastricht process.
In an increasingly international economy which has powerful transnational forces, intervention to ensure employment, better living standards, enhanced quality of life and fairness and a sustainable environment must be undertaken at the international level as well as closer to home. Participation in the European Community cannot be an add-on extra or an opt-out deduction, as the Government maintain. It is a necessary condition for economic and social progress.
With the advent of the single market and the growing integration of the European economy, the European level of economic management is essential if workers, communities and whole regions are not simply to be left at the mercy of unregulated market forces. As Labour has consistently stressed, the advent of the single market and the integration of the European Community must be accompanied by corresponding action at national and global levels. Britain will be better placed to achieve both if we work in co-operation with our European partners instead of seeking to do so in isolation.

§ Mr. Rowlands
An absolute condition in the process towards monetary union under the treaty is to introduce legislation to make independent our national bank. Does my hon. Friend support that principle?

§ Mr. Smith
If the treaty is carried, it is clear that such 950 matters will have to be examined. We have already made it clear that there is a case for examining the separation of the regulatory functions of the Bank of England from the responsibility for monetary policy. Of course, if a European central bank is established, every member state will need to examine the relationships between their central bank and the European bank and between the central bank and their Governments. The Labour party has tabled a further amendment about the accountability of the Bank of England.
It is crucial that a central bank remain in public ownership. It must not pass into any form of private ownership, as some have suggested. The constitution and governing council of a central bank must fully represent industrial, regional and social needs and the policies which it pursues must be carried into effect in a politically accountable context and in ways for which the institution must be held to account.

§ Mr. Dalyell
I am mindful that the Lothian region, the Edinburgh area and the Linlithgow constituency have greatly benefited from the sensitive understanding given by the European Community to their regional issues. Linlithgow constituency Labour party unanimously passed a resolution on Sunday which urged me to do everything possible to get the Maastricht treaty through. There are two views and there should not be the misleading impression that all the arguments are just on one side as far as Back Benchers are concerned.

§ Mr. Smith
Many regions, especially the region to which my hon. Friend referred, have had cause to benefit from the way in which the European Community and some of its activities have given attention to the social and economic problems in the United Kingdom. The Government have not sought to address those social and economic problems. Indeed, their policies have aggravated the problems. My hon. Friend is also right about Labour party policy, which is that the Maastricht treaty is the best available vehicle before us for securing the closer political and economic co-operation in Europe to which the Labour party is committed.

§ Mr. Nicholas Winterton
The hon. Gentleman's position seems to be partial. I accept the sincerely held views of the hon. Member for Linlithgow (Mr. Dalyell), but is the Opposition spokesman saying that if the United Kingdom Government were disposed to do so, they could not do exactly what Europe has apparently done for Edinburgh and the Lothian and Linlithgow areas of Scotland? Is not the hon. Gentleman aware that Britain is a net contributor to the European budget and that we give far more money than we get back? If we had kept that money, some of it might well have been passed to not only the constituency of the hon. Member for Linlithgow, whose views I respect but disagree with, but perhaps to my constituency.

§ Mr. Smith
The hon. Gentleman effectively makes the point that the Government, of whose party he is a member, lack the political will to address the fundamental economic and social problems of Britain. That comes as no surprise. But is it not welcome that the European Community has at least been able to provide some assistance, as my hon. Friend said?

§ Mr. Iain Duncan-Smith (Chingford)
Will the hon. Gentleman give way?

§ Mr. Smith
No. I must make some progress.

§ Mr. Winnick
Will my hon. Friend give way?

§ Mr. Smith
If my hon. Friend will allow me, I should like to make some progress. I trust that that will open up more time for Back Benchers who want to speak.
Some argue that much that I have advocated, such as the value of closer economic and political co-operation and gaining control of otherwise unregulated market forces, is good. They say that we need European co-operation and even European union, but that the titles in the Maastricht Bill offer no vehicle for achieving those goals. I do not dispute that those arguments are advanced with sincerity and integrity and deserve to be listened to with respect. However, I do not find them realistic, just as the Labour party conference did not find them realistic.
I do not see how we could build some theoretical European co-operation in the future by rejecting out of hand the practical European co-operation which is available now. When I hear arguments such as those of the hon. Member for Stafford (Mr. Cash), who said in the debate on 1 December that he favoured political co-operation within Europe and even that he had no difficulty with European union, it puts me in mind of those people—I am sure that my hon. Friends have encountered them—who say, "I am all in favour of trade unions in principle and would join the appropriate one if it was one that I liked, but I will not join the trade union my workmates are in because I do not like the rule book, the shop steward does things with which I disagree and I am not prepared to take collective action if I am outvoted."
Our position stands in stark contrast with that of the hon. Member for Stafford. He believes that the provisions of the Bill to give effect to the titles in the Maastrict treaty unreasonably limit the operation of the free market. We believe that they offer a framework which is essential if the single market is to be the servant, not the master, of workers throughout the Community. He and his friends believe that a free market in currencies is best for the economy. We believe in the principle of planned management of exchange rates.
The hon. Member for Stafford believes that common funds which seek to redistribute resources to weaker regions of the Community damage the economy. We believe that they are desperately needed for economic regeneration, social justice and common welfare. He believes that it is centralist for the Community to agree standards for terms and conditions of employment. We believe that there will be exploitation if it does not do so.

§ Mr. Winnick
My hon. Friend will appreciate that some of the arguments that he has just advanced about economic co-operation were the basis for the clamour for us to join the exchange rate mechanism. We know what happened. I do not for one moment question my hon. Friend's genuine sincerity. I mean that. Obviously, there is a genuine difference of opinion. Why not on such an important issue?
My hon. Friend talks about steps to reduce unemployment and all the rest. How on earth can that be justified bearing in mind article 104c, which places a strict limit of 3 per cent. of gross national product on public spending? Moreover, it sets out in considerable detail the 952 penalties that will be inflicted on member countries if they go beyond that limit. Surely that will simply mean that public spending will be reduced, and further reduced in many cases.
Even under the Conservative Government public spending is, fortunately, higher than 3 per cent., at least at the moment. Surely an outright reactionary right-wing Government would use the 3 per cent. rule to justify further cutting public spending. They would turn round and say, "It is all in the treaty. We have no alternative." How could unemployment be reduced in those circumstances?

§ Mr. Smith
I believe, and it was the view taken in the resolutions and documents passed by the Labour party conference, that within the framework provided by the treaty, it is precisely possible for us to take common action to tackle unemployment and the rundown of depressed regions as well as social inequality. But it is our task—I agree with my hon. Friend in this—to ensure that the Europe that we shape becomes an engine for economic growth, not an instrument for deflation.
My hon. Friend referred to the convergence criteria. I shall have more to say about those criteria towards the end of my speech. I hope that he will bear with me and allow me to make progress to that point.

§ Mr. Denzil Davies
Will my hon. Friend give way?

§ Mr. Smith
No. I should like to make progress.
I was contrasting our position with that of the hon. Member for Stafford. However, I agree with him about one thing. The debate about Maastricht and the level of public knowledge about what is involved has been distorted by the Government attempting to face both ways. They do one thing while pretending to do another. They claim that Maastricht is all about reaffirming the power of nation states when the treaty seeks to pool a measure of sovereignty.
The Government claim that subsidiarity applies to all Community activities when it is plain from the text of the treaty that it does not. They claim that the Prime Minister has won great victories in bringing Europe round to his view when all that he has succeeded in doing is to achieve opt-outs which would consign Britain to the second division.
We remember the Government's other claims. They said that the ERM was the cornerstone of Government economic policy. According to the Prime Minister, at least this year Britain will never have to take part in the ERM again. The Government said that the pound would replace the deutschmark as the strongest currency of Europe. They claimed that other European countries envied our economic miracle.
With such a litany of contradiction, U-turns and doublespeak, no wonder that so many people are unsure of the treaty's purpose. Worst of all, at a time of devastating unemployment across the Community, the utter failure of the British presidency to place at the top of Europe's agenda the crying need for a co-ordinated programme for economic recovery was a dereliction of responsibility which not only failed to meet the economic and social 953 needs of the people of Europe but was bound to make many doubt the relevance of the Community to their everyday lives.
Our key goals in discussing the amendments and issues before us are to improve the Bill; to make it clear how Labour would want the treaty to operate in practice in the interest of the people of Britain and the people of Europe; and to win the case for the inclusion of the social chapter so that Britain will benefit from the provisions for employment rights and partnership which other Community countries realise are essential for economic success in the single market, as well as for employees' well-being.
We seek to win genuine regional representation on the Committee of the Regions, recognising that subsidiarity should start at home; to place economic policy within a framework of political accountability so that Community institutions and policy are the servant, not the master, of the people of Europe; and to make European co-operation a vehicle for sustainable growth. We shall return to all those important matters in the debates on subsequent specific groups of amendments.
I should like to make a brief reference to article 138a and then make some general comments about the convergence criteria, to which I referred when my hon. Friend the Member for Walsall, North (Mr. Winnick) intervened.
Article 138a, raised in our probing amendment No. 20 —which we shall not press to a vote—refers to political parties at the European level. Labour has consistently stressed the need for closer European integration being accompanied by measures to strengthen democracy and political accountability in the Community. That must mean an enhanced role for the European Parliament, as well as a more powerful role for bodies such as ECOFIN, to which I have referred. Also, it means that campaigning organisations, trade unions and business groups will build further on the considerable progress that they have already made to establish working European associations, making an invaluable contribution to the democratic process at the European level, as well as extending their formal involvement in Community decision-taking, for example, as partners in the social dialogue.
All that is to be welcomed and encouraged, but as article 138a recognises, political parties have an important role at European level to extend awareness of and participation in the European dimension of politics. I am pleased to be able to say that the Labour party has played a full role in that process, previously through the Confederation of European Socialist Parties and, since the Hague congress and declaration of 9 November last year, in the party of European Socialists which will be a force for stronger political co-operation in Europe.
Given the Government's support for article 138a in the treaty, I challenge the Minister to make clear whether the British Conservative party will carry that into effect by becoming a full member of the so-called European People's party, which supports the social chapter, or is there to be another cop-out and opt-out? I shall give way to the Minister if he wants to intervene.

Several Hon. Members
rose—

§ Mr. Smith
I give way to my hon. Friend the Member for Newham, South (Mr. Spearing).

§ Mr. Spearing
By and large, my hon. Friend has made a factual statement. Article 138a is an addition to the existing treaties. Why is it necessary? Surely the operation of parties, even on a European level through the confederation and in this country, is an established fact of democracy. Why does it have to be put in a treaty, which is a legal document relating to powers and finances?

§ Mr. Smith
Perhaps it is all about applying the Short principle on the European level—I do not know. I was referring to the fact that it is of value to reaffirm in the treaty the importance of political parties at a European level.
An important part of the co-operation and democratic accountability that we want to establish is the arrangements for ensuring that the House is fully involved in the consideration of European policy. We have tabled amendments to that end, in later groups.
In addition, as part of the group of amendments before us, my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) may seek to move new clause 10, standing in his name and that of other hon. Friends. The proposal to submit the reports to which it refers to this Parliament has much to commend it. Unless I hear compelling arguments to the contrary, I shall be inclined to support it.
It is important that we consider convergence criteria in this general debate, not least because they have been interpreted in different ways in the wider public discussion. Some of those interpretations do not properly reflect the wording of the treaty and some of the political implications that have been imputed to the criteria would not serve the cause of co-ordinated economic recovery, which the Labour party believes should be top priority.
I am sure that the Minister will point out that Britain is not committed by the treaty to the third stage of economic and monetary union, but that begs as many questions as it answers. The key arguments on the criteria for convergence are, first, that the criteria are not blanket requirements. They are some aspects of economic performance which must be evaluated in determining how far the economies of various member states have converged before the establishment of economic and monetary union, and one set of considerations to evaluate comparative economic performance after such a union. The criteria are not cast in stone, which is just as well, given what has happened recently with the ERM.
Secondly, the articles that apply the criteria explicitly and rightly require them to take account of wider economic considerations. For example, the article on Government deficits, to which some of my hon. Friends have referred, requires the Commission to take account of the extent of Government investment and expenditure and the medium-term economic and budgetary position of member states.
Thirdly, the protocol on convergence criteria requires the Council of Ministers to adopt appropriate provisions to lay down the details of those convergence criteria, which will then replace those set out in the protocol. Therefore, Governments would have the opportunity to make it clear —as we urge the British Government to make clear now —that the criteria should not be defined or deployed so as to implement monetarist policies, or to inhibit economic recovery in member states. What Labour has long said —and what the Government should be saying and should have said when they occupied the presidency—is that 955 convergence should encompass the employment, industrial, investment and environmental measures essential for European economic recovery.
What is more, the Government have a strong obligation to do just that. Article 102a of the treaty states: Member states shall conduct their economic policies with a view to contributing to the achievement of the objectives of the Community, as defined in Article 2. To fulfil that requirement, and in the light of the extent of the recession, the consequences of rebuilding the economy of eastern Germany and the recent experience of the ERM, under the provisions in the treaty for redefining the convergence criteria, as well as under articles 102a and 103 on economic co-ordination, the Community will need to agree the most effective way to put progress towards economic and monetary union back on course. That should be accompanied by co-ordinated policies for jobs, investment, training and growth. Nothing in the treaty is a barrier to Britain adopting those policies; it is the lack of political will on the part of the Conservative Government.

Several Hon. Members
rose—

§ Mr. Smith
What is more, if Britain's voice is to be heard, it needs to be clear to our Community partners as well as in the House that our goal is to make European co-operation work in the interests of the people of Britain and of Europe, and not to sabotage it nor to wreck the treaty, which is the principal means to hand to give effect to that co-operation.

§ Mr. Austin Mitchell
Essentially my hon. Friend is saying that the treaty does not quite mean what it says and that under a Labour Government it will be interpreted differently, although I would prefer—to paraphrase Aneurin Bevan—not to look at his crystal balls, but to read the text of the treaty. Can he answer this question? In the view of the Opposition Front Bench, does title II require us to go back into the ERM as a precondition of doing any of those things? What is the position on that?

§ Mr. Smith
I have already made that clear. I was talking about the way in which the convergence criteria will need to be redefined. The treaty places obligations on member states and on the Community to implement economic policies that will realise the objectives in article 2.
On the exchange rate mechanism, we have never made any secret of the fact that our party is committed to the principle of managed exchange rates. We have also set out the way in which the management of exchange rates needs to be changed to combat speculators.

§ Mr. Dykes
rose—

§ Mr. Smith
I shall not give way as I am about to conclude.
Within the framework provided by the treaty—I emphasise that it must include the social chapter—the Committee should make clear our commitment to work for the full application of the provisions in article 2. That would give expression to the policies agreed at the founding conference of the party of European Socialists at the Hague, when we declared: We maintain the ideal of a democratic Europe that is both open to its citizens and to the world; a Europe that 956 brings economic and social prosperity for all; a Europe where solidarity between and within nations as well as between generations is a guiding principle. It would also put into practice, for the benefit of the people of Europe, as of Britain, the policy passed overwhelmingly at the Labour party conference, which reaffirms Labour's vision of Europe with Britain's future at the heart of a European Community which is economically prosperous and which has high standards of social and environmental protection and citizens' rights … believes that the Maastricht Treaty, while not perfect, is the best agreement that can currently be achieved. As we debate this group of general amendments and more specific amendments later we shall make clear our commitment to closer economic and political co-operation in Europe and how we believe that the Maastricht treaty should be implemented with the social chapter. That must happen if the treaty is to be a decisive step towards the economic and social progress that Europe needs and the Labour party wants to see.

§ Mr. Nicholas Brown (Newcastle upon Tyne, East)
On a point of order, Mr. Lofthouse, have you yet heard from the Government whether there will be a statement later tonight concerning the American attack on Iraq?

§ The First Deputy Chairman of Ways and Means (Mr. Geoffrey Lofthouse)
No. I call Mr. Garel-Jones.

§ Mr. Garel-Jones
The amendment tabled by my hon.

Friend the Member for Stafford (Mr. Cash)
—

§ Sir Russell Johnston
On a point of order, Mr. Lofthouse. Is it not the normal convention in Committee, particularly when that stage is taken in the Chamber, for spokesmen on both Front Benches to give way freely? Otherwise, how can we have a proper dialogue?

The First Deputy Chairman
The hon. Gentleman has been here for a long time, and he knows that it is a matter for those speaking to decide whether to give way.

§ Mr. Rowlands
Further to that point of order, Mr. Lofthouse. I should like to refer to another convention that I thought was part and parcel of the Committee stage. I thought that Ministers did not reply to a debate in Committee before those who have tabled amendments selected with the main amendment have had an opportunity to speak. The second amendment, No. 323, in this group appears in the name of my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) and other hon. Friends, but we have not had an opportunity to speak to it. It now appears, however, that the Minister is about to speak. I ask the right hon. Gentleman through you, Mr. Lofthouse, to obey the normal conventions in Committee and to allow us to speak to our amendment

The First Deputy Chairman
I know that the Chairman dealt with a similar point of order earlier when he called the hon. Member for Oxford, East (Mr. Smith) to speak on behalf of the Labour Front Bench.

§ Mr. John Butcher (Coventry, South-West)
Further to that point of order, Mr. Lofthouse. You will recall that, in the Committee sittings before Christmas, a great deal of anxiety was expressed because about 20 hon. Members who had hoped to catch the Chair's eye could not do so. That group included hon. Members from Northern Ireland, Wales and Scotland. It seemed that a gentlemen's convention had been violated.
957 Fundamental questions were asked during those sittings. Normally, in Committee we follow an iterative process and such questions are answered. However, the closure was moved when a number of those fundamental questions had not been answered. I beg you, Mr. Lofthouse, to ensure that we now have a Committee debate in the truest sense of the word, so that we can proceed in good order and good-naturedly.

The First Deputy Chairman
I note the points that the hon. Gentleman has raised.

§ Mr. Garel-Jones
I should just like to note that the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) raised his point of order about those on the Front Benches failing to give way after I had spoken only about five words of my speech. I am sure that the Committee will concede that the hon. Member for Oxford, East (Mr. Smith) was generous in giving way to hon. Members on both sides of the Committee. I will certainly seek to do the same.
Equally, I shall try not to detain the Committee for too long, so that I may follow the example of my hon. Friend the Member for Stafford, who managed to reduce his speech to a quarter of that which he made at our last sitting. That may mean that more hon. Members on both sides of the Committee—in particular, my two countrymen, the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) and the right hon. Member for Llanelli (Mr. Davies) who sat through all our last sitting and did not manage to intervene—can speak.
For the benefit of the Committee, I should say that the Financial Secretary will seek at some point to catch your eye, Mr. Lofthouse, to pick up points made by right hon. and hon. Members about economic and monetary union, convergence criteria, economic policy and so on.

§ Mr. Austin Mitchell
I am grateful to the Minister for giving way at this early stage. He has announced that, once he has seen the Bill through, he will retire from the Cabinet and leave the job. I am sorry to hear that, because I have always found him an accommodating Minister. His departure, however, poses the question whether someone who is, to coin the phrase, a "here today, gone tomorrow" Minister should shepherd through such a momentous Bill, which has such enormous constitutional and economic repercussions. His departure will call into question the nature of the answers that he will give to the difficult problems that will be raised in our proceedings. Surely such assurances could be cast aside by his successor as the responsibility of his predecessor.

§ Mr. Garel-Jones
I thank the hon. Gentleman for promoting me in a premature way to the Cabinet, of which I am not a member. [HON. MEMBERS: "Shame."] I agree. I must tell the hon. Gentleman and the Committee that we are all here today, gone tomorrow. I assure my hon. Friend from the Whips Office who is sitting behind me that, when I return to the Back Benches, I intend to continue to take the same line as I have done in government.

§ Mr. Dalyell
On a point of order, Mr. Lofthouse. It has just gone up on the tapes that there has been American military action against Iraq. In view of what was said this afternoon in the Committee, I once again ask for a Government statement as soon as possible, particularly if British forces are involved.

The First Deputy Chairman
The hon. Gentleman will appreciate that that is a matter for the Government, but no doubt those on the Treasury Bench will have noted what he said.

§ Mr. Bob Cryer (Bradford, South)
Further to that point of order, Mr. Lofthouse. I raised this matter with Madam Speaker when she was in the Chair before the House went into Committee, and she assured me that she would give careful consideration to any request by the Government to make a statement about this latest savage attack.

§ The Lord President of the Council and Leader of the House of Commons (Mr. Tony Newton)
It might be helpful, Mr. Lofthouse, if I said at once that we have arranged for the Secretary of State for Defence to make a statement at 10 o'clock.

§ Mr. Marlow
On a point of order, Mr. Lofthouse. What will happen at 10 o'clock? What is the possible scenario? If the Government want to make a statement after 10 o'clock, will they have to suspend the 10 o'clock business motion first?

The First Deputy Chairman
We shall have to wait and see. Statements at 10 o'clock take precedence.

§ Mr. Marlow
My question is fairly straightforward.

The First Deputy Chairman
I gave a fairly straightforward answer—we shall have to wait and see.

§ Mr. Garel-Jones
The amendment that my hon. Friend the Member for Stafford has moved is the same as one of the other amendments in the group tabled by the right hon. Member for Bethnal Green and Stepney (Mr. Shore). It would delete from the scope of the Bill all amendments to the treaty of Rome.
It will not have escaped the notice of the Committee that this is a fairly sweeping amendment and that it is utterly at odds with the purpose of the Bill. The European Communities Act 1972 created a framework within our domestic law for recognising Community rights and obligations arising from the treaty of Rome. The Maastricht treaty amends the treaty of Rome, and, as has been pointed out from the Chair, we need to amend our legislation to take account of that fact. This amendment would prevent us from making that necessary change and would make it impossible for us to ratify the Maastricht treaty. It is, of course, in order, as it has been selected by the Chair, but it is clearly a wrecking amendment, which cannot be portrayed as anything else, and I shall ask the Committee to reject it.

§ Mr. Nicholas Winterton
On a point of order, Mr. Lofthouse. The Chair has already ruled that a wrecking amendment would not have been selected. How, therefore, can the Minister say that this is a wrecking amendment?

The First Deputy Chairman
I can support what the Chair has said: that at no time would a wrecking amendment have been accepted. I hope that the Minister will reconsider the word that he has just used.

§ Mr. Garel-Jones
Like my hon. Friend the Member for Macclesfield (Mr. Winterton), I was present in the Committee when that ruling was given from the Chair. That is why I have taken care to say that the amendment is, of course, in order. You, Mr. Lofthouse, have asked me to withdraw the word "wrecking". Naturally I do so.
959 The point that I am trying to make is that, if this amendment is approved, Her Majesty's Government will be rendered unable to ratify the treaty. If the amendment is pressed to a Division, I shall therefore ask the Committee to reject it.

§ Sir Russell Johnston
Surely there is a difference between wrecking in a technical sense, and wrecking in a rhetorical sense.

§ Mr. Garel-Jones
Indeed.

§ Mr. Denzil Davies
The hon. Gentleman has said that this amendment would make the treaty unratifiable. Does he not agree that any amendment resulting in the deletion of any part of the Maastricht treaty would make the treaty unratifiable?

§ Mr. Garel-Jones
That is the case, but there are on the Order Paper other amendments—the right hon. Gentleman must be well aware of them—which, if carried, would not make the treaty unratifiable. There is a distinction.
I turn to the amendments tabled by the hon. Member for Oxford, East (Mr. Smith). I am sure that, like me, the Committee is grateful for the hon. Gentleman's indication that these are probing amendments designed to provoke debate and discussion. I should like to treat and respond to them in that spirit.
Amendment No. 11, in the name of the right hon. and learned Member for Monklands, East (Mr. Smith), seeks to delete from the scope of the Bill the revised article 2 of the treaty of Rome, which describes the tasks of the Community. This article replaces the existing article 2 of the treaty of Rome—revising it for the first time since the formation of the Community, and expanding its original terms. Thus, it will include references to sustainable and non-inflationary growth respecting the environment, to convergence—a reference to economic and monetary union—to cohesion, and to the raising of the standard of living and the quality of life throughout the Community.
As the hon. Member for Oxford, East has said, these are all worthy aims for states members of the Community to pursue. They are certainly the aims of Her Majesty's Government. Of course, from time to time—this is a matter for debate between the two sides of the Committee —the ways in which we seek to pursue them will differ according to our respective political philosophies.
Article 2 of the treaty sets out in general terms the goals of the European Community. As amended, the article would make it clear that these aims are to be achieved through implementation of the common policies and activities detailed in the rest of the treaty. The article should therefore be read with articles 3 and 3a, which set out the detailed activities of the Community.
6.15 pm
The goal of article 2 should be seen as being to guide the Community as a whole. It is inevitable that, from time to time within the Community, there will be different views on how to attain this, but there will be no lack of agreement on the means set out in the body of the treaty.
Also in the name of the Leader of the Opposition is another probing amendment to delete article 138a from the scope of the Bill. As the Committee has been told, this amendment too is intended to stimulate debate on article 960 138a, which, in itself, is simply declaratory and recognises the importance of political parties at European level. I am glad to have an opportunity to debate the importance of European political parties, and I am relieved that the Opposition have no intention of pressing the amendment to a Division.
We have been told about Labour's commitment to the European socialist group in the European Parliament. I can confirm that the Conservative party, like the Christian Democtrats, is an allied member of the European Parliament group of the European People's party. I myself cannot envisage the Conservative party's becoming a Christian Democratic party. Indeed, one of the interesting things about the enlargement of the Community—I think that I am right in saying this—is that, assuming, as we expect, that the four applicants will become members, those that are on the centre right and do not have a Christian Democratic tradition in their countries will be in the majority in the European Parliament.
The centre right in countries such as the United Kingdom, France and Spain—to mention just three of the larger countries in the Community that do not have a Christian Democratic tradition—is finding it easy to work alongside its Christian Democratic partners. However, each of us puts a unique spin on the ball of centre-right policies in Europe, and we, with our Christian Democratic allies, will seek to ensure that what we see as the free-market principles on which the European Community is based are upheld, not just in our national and domestic politics but also at a European level.

§ Mr. Andrew Smith
Surely the Minister's reservations about Christian democracy do not make it impossible for the Conservatives to move from being allied members to being full members. Surely what really prevents them from moving to full membership is that the group supports the common social policy, that its Governments have been prepared to sign the social chapter and, indeed, have criticised the British Conservative party for not going along with a positive social policy.

§ Mr. Garel-Jones
No. It goes much deeper. The European Community countries that do not have a Christian Democratic tradition—the United Kingdom is one of them—feel, for example, that Christian democracy has a slightly corporatist approach to life that other centre-right parties do not have. I do not say that in any critical sense. For example, in the main Christian Democratic countries in western Europe, there are, as it were, client trade unions. The Conservatives have no such thing. The only client trade unions that exist in this country are on the left of British politics.
There are some fundamental historical differences between Christian democracy and other centre-right parties, but I can assure the hon. Gentleman that we have no difficulty in working with our Christian Democratic friends in Europe. Indeed, even though we are a minority in the European Parliament, we managed to defeat an absurd amendment from the European socialists, prompted by the European Labour party in the European Parliament—thanks to the skilful whipping of Mr. Tindemans and other members of the Conservative group.

§ Sir Russell Johnston
I thank the Minister for giving way so that I may provide some information for his benefit, but also for the benefit of the hon. Member for Oxford, East (Mr. Smith), who was significantly less 961 willing to give way. We were told that the Labour party had consistently been in favour of strengthening the European Parliament. My recollection is that the socialist manifesto issued before the last European election did indeed say that, but the Labour party had a derogation from it.

§ Mr. Garel-Jones
The hon. Gentleman is very unkind. Thanks to the Conservative party's consistent stand as a pro-European party over the past 20 years, and the number of defeats that have been inflicted on the Labour party, not least because of its absurd commitment to withdraw from the European Economic Community, as it was then called, the Labour party has finally seen the light and become a pro-European party, albeit in socialist terms. The Liberal Democrat party and the Conservative party, which have consistently stood on that platform, must be grateful for small mercies. It is unkind of the hon. Gentleman to remind the Labour party of its past in that matter.

§ Mr. Peter Mandelson (Hartlepool)
Does the Minister recall the advertisement by the Conservative party at the European elections in 1989, which complained about the diet of Brussels? Did he endorse that campaign, which was aimed directly at opposing the European Community?

§ Mr. Garel-Jones
It is unfair to say that it was aimed in opposition to the European Community, because the Conservative party not only negotiated Britain's entry into the Community but has stood up against the onslaughts of the Labour party in the past 20 years and negotiated the Single European Act and the Maastricht treaty. I agree that that was not the most successful advertisement or campaign that the Conservative party has ever run, and I assure him that next time there is a European campaign, we shall run a much more successful and aggressive one.
As the hon. Member for Inverness, Nairn and Lochaber has permitted himself an unkindness to the socialists, may I say that the political party in Britain that faces the greatest difficulty in European integration is the Liberal party. European Liberals remain Liberals in the sense that my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) would understand the term. Our Liberals, with one or two distinguished exceptions, of whom the hon. Member for Inverness, Nairn and Lochaber is one, are really European Social Democrats. The difficulty that British Liberals have in signing up to any European Liberal principles is notorious in Europe. Most European Liberals regard them as watered-down Social Democrats.

§ Sir Russell Johnston
I am left virtually speechless. The Minister has well outbidded me in unkindness and inaccuracy.

§ Mr. Garel-Jones
The last of the probing amendments tabled by the Opposition seeks to delete article H from the Bill—that is, all the amendments to the European Coal and Steel Community included in title III. As the hon. Member for Oxford, East did not refer to that, am I right in assuming that the amendment was tabled early in the day, and that he is not asking me to reply to it?

§ Mr. George Robertson (Hamilton)
indicated assent.

§ Mr. Garel-Jones
Before the right hon. Member for Bethnal Green and Stepney (Mr. Shore) speaks, may I refer to new clause 10, which is important and which the 962 hon. Member for Oxford, East said that the Labour party might support. He was not firm about it, but said that he would be prepared to listen to arguments about it.
If accepted, new clause 10 would require the Government by law to publish and lay before Parliament reports produced by the European Council under article D of the union treaty and to publish at the same time a policy statement. The Committee will agree that the amendment is surprising. Drawing up procedures for parliamentary scrutiny should be a matter for this House alone. We should be going down a dangerous route if our practices were to be regulated by an international treaty or legislation tabled by the Executive. It would be quite a change if the working practices of the House were settled through the statute book, by a Bill introduced by the Executive.

§ Mr. Andrew Smith
I said that the new clause had a great deal to commend it and that, unless I heard compelling arguments to the contrary. I would be inclined to support it. I have heard no compelling arguments so far. The new clause amends legislation before the Committee and does not amend a treaty. It would extend to the House the same opportunity to scrutinise the reports of the European Council's work as would be available to the European Parliament. That would be a good thing.

§ Mr. Garel-Jones
I am in the middle of making my argument. I listened carefully to what the hon. Member for Oxford, East said, and that is why I am dealing carefully with new clause 10. I took it that the hon. Gentleman had an open mind on it and wanted to debate it.

§ Mrs. Teresa Gorman (Billericay)
Will my hon. Friend give way?

§ Mr. Garel-Jones
I shall give way in a moment.
I hope that hon. Members will express their opinions on the new clause during the debate because it is a House of Commons matter, which is why we should listen to each other's arguments.
Apart from the principle that we should legislate on Standing Orders, Parliament already has full scope for detailed scrutiny of the Government's approach to the European Community. For example, the Prime Minister always reports the outcome of each European Council to the House and is questioned on that report. The conclusions produced at each European Council meeting are deposited in Parliament.
Parliament is also closely associated with the timetable of European Council meetings. At the House's request, a six-monthly debate takes place in the House before every European Council meeting and also looks ahead to future work and priorities. The Council also provides an annual report to the European Parliament on the Community's work, which is made available in the Library.
The debate is important because the Opposition have an open mind on it. The Committee should bear in mind the fact that, when these debates take place, which is quite often, some of my hon. Friends find it difficult to get enough Members to keep the debate going.

§ Mr. Marlow
Will my hon. Friend give way?

§ Mr. Garel-Jones
May I finish my argument? Then I shall be pleased to give way to hon. Members.
On new clause 10, I contend that there will be no shortage of opportunities to examine the Government's 963 policy on the activities and progress of the union, or to keep the House fully informed of the European Council's activities, both before and after each of those meetings. The procedures seem to be adequate in any case but, if the Committee felt that they were inadequate and wanted the Government to make further demarches through a Select Committee, it should decide about the matter, and it should not be subject to legislation introduced by the Executive.
The right hon. Member for Bethnal Green and Stepney will no doubt wish to convince the Committee that the new clause is worthy of support. That is a matter for him, but the device is both cumbersome and unnecessary. If you, Mr. Lofthouse, were to allow a Division on it, unless arguments convince me otherwise, I will ask the Committee to reject it.

§ Mrs. Gorman
On the matter of my right hon. Friend's preamble on the subject of European parties and similarities between us, the Christian Democrats, the Liberals and God knows who else, is that not almost irrelevant? After all, the European Parliament, to which all these people and their parties are elected, has virtually no powers at all over the Commission except in the matter of approving the budget. Is it not true that the Council of Ministers makes the decisions and that it only reacts to what the bureaucracy has prepared for it? Its members simply do not have the time to consider and debate the ideas which we should be putting forward, so the whole

§ Mr. Garel-Jones
I do not think that I agree with my hon. Friend. It is true that, in some areas, the Commission has the exclusive right of initiative where member states have agreed they should have it. But my hon. Friend is right: the key body is the Council of Ministers. Decisions are taken by the Council of Ministers, who are accountable to their national Parliaments, but we have, I think rightly, given additional powers to the European Parliament in the Maastricht treaty—mainly powers of supervision over the Commission and its activities, but also as a body to which the citizen can go to complain about injustices or maladministration by the Community. I think that that is a good thing. We have given it the power of negative assent, or rejection, at the end of the process in some carefully defined areas.

§ Mr. George Robertson
Reverting to new clause 10 and to the Minister's case as to why we should not consider it sympathetically, he has given a number of examples of where the Government choose to consult the House to inform it of European Community business.
In that respect, it is largely correct, except that a lot of it is by custom and practice—custom and practice that the Government choose to deploy in that way. The six-monthly debate on the report of the European Community used to take place at the whim of the Government at various times during the six months; it was only brought to a point where it related to the European Council meeting because of the House's decision to try to anchor it at a specific point.
The Minister is right to say that the Prime Minister reports to the House after every full European Council meeting, but there was a time—it is within my 964 parliamentary life—when it was an obligation on the Secretary of State for Foreign and Commonwealth Affairs to report to the House after every Foreign Affairs Council meeting. We have not had such a report for many years now; it fell into disuse because the Foreign Office decided that it simply would not do it.
Surely, therefore, there is something to be said here, in such an important area, where there will be a statutory responsibility for the European Parliament to receive a report on the work of the union, for the British Parliament having a similarly anchored commitment to receive exactly the same information.

§ Mr. Garel-Jones
One of the differences between our Parliament and most others in Europe is that we do things by custom and practice. Having, as I do, some knowledge of Parliaments in other parts of Europe, I find that the way in which we organise our lives here is rather more efficient than people would expect.
I think that the statements from the Foreign and Commonwealth Office fell into desuetude because the demand for them was not there at the time. That is my understanding. The hon. Member is, however, well aware that, when the House wishes something to happen, and when something has become an established practice in the House, under the non-written constitutional arrangements that we have in this country, it is a pretty tight bet.
Here we are in Committee. It is true, Mr. Lofthouse, that I have no obligation to give way to any hon. Member, but if I were to stand up and read out my speech without giving way to hon. Members on both sides, it would be regarded as pretty outrageous. But it is not written down anywhere.
The Committee will decide when we come to a Division, and the hon. Member will talk to those in his party who are Whips, but I can remember in a former capacity rushing round the House on many occasions, trying to find hon. Members to come in so that a particular debate should not collapse before 10 o'clock.
I just warn the House against putting into statute what ought to be done through Standing Orders and by custom and practice. If the House genuinely believes that the present provisions for debate and discussion on these matters are inadequate, that is something that should be discussed through the usual channels and in the Select Committee on Procedure, in the way we normally do these things.

Several Hon. Members
rose—

§ Mr. Marlow
I am grateful to my right hon. Friend. He is suggesting almost that this is a matter of principle. There is a great deal of scrutiny of European legislation by the House at present, as my right hon. Friend knows, and I presume that this was established through legislation. All that is suggested—

§ Sir Russell Johnston
Through procedure.

§ Mr. Marlow
Through procedure? Not through legislation? Well, is there any damage or harm done by enshrining it in legislation? An increasing amount of information is made available to the House at the moment. My right hon. Friend, along with many others, agrees that there is a democratic deficit in the Community at present. Would it not be helpful in overcoming that democratic deficit to agree to this amendment?

§ Mr. Garel-Jones
I am aware of my hon. Friend's views and temperament about the Community as a whole, but, in considering new clause 10, I urge him to look at it in a different light, as a House of Commons matter. For example, the two new Standing Committees that we have for scrutinising European Community legislation have in some respects been extremely successful, but the Committee will know that, after a year or so, discussions go on, through the usual channels and through the Select Committee on Procedure, and if the House feels that those arrangements are inadequate and have not met the House's ambitions in the matter, it is possible to change them.
I urge my hon. Friend, because he is anxious, as I think all hon. Members are, to ensure, as I see it, our enthusiastic co-operation in a European union, that we keep the traditions of the House about the way it organises its business, and that it should be done on a custom and practice basis that enables hon. Members, through the usual channels, to discuss these matters. On that basis, I would respectfully suggest to the right hon. Member for Bethnal Green and Stepney that his new clause is unnecessary.

Several hon. Members
rose—

§ Mr. Spearing
I am grateful to the Minister for giving way, as I am a signatory of the new clause. I have no doubt that my right hon. Friend the Member for Bethnal Green and Stepney will give a substantive reply to this mini-debate, but I am rather surprised at the Minister's statement. Declaration 13 on page 127 of the treaty states: The Conference considers that it is important to encourage greater involvement of national Parliaments in the activities of the European Union. The new clause does not call for a debate; it has nothing to do with the usual channels or time in this Chamber. The second and very important part of it is that, after the report has been made—the same one that goes to the European Parliament, so we are acting in parallel, as many hon. Members wish—says that the Government shall lay a statement
as to their policy and performance in respect of the activities of the Union and their policies for its future. Surely this is accountability of the Government to the House and to the country, written into a Bill or an Act, which is common in many Acts. It is a matter of democratic accountability and not of the procedures of debate in this House.

§ Mr. Garel-Jones
That is a matter that the Committee must decide. I believe that it would be inappropriate and inconsistent with the traditions of the House for its Standing Orders or for the way in which it chooses to scrutinise the Executive to be written into an Act of Parliament. That is my view.
Furthermore, as the hon. Member for Newham, South (Mr. Spearing) is probably more aware than any other hon. Member, over the next three or four years, the House will have to decide how it intends to scrutinise the activities in the intergovernmental pillars of the union. The common foreign and security policy will not present the House with a great many problems, because, as a general rule, foreign policy does not produce legislation; but the interior and justice pillar may—I very much hope that it will—produce legislation on matters of law and order, immigration, frontiers and so on on a European basis, and the House will need to decide how it is to inform itself in this matter. 966 It is an area where, it seems to me, the House will come up with some ideas and will adjust them, and the beauty of operating by custom and practice in the House is precisely the ability to do so.
As for the declaration on the role of national Parliaments, the British Government insisted that it should be a declaration, not a protocol, because it was a matter for the House. How the House chooses to attend, represent itself and make its input in the discussions on the role of national Parliaments is a matter initiated by my right hon. Friend the Leader of the House, in consultation with his opposite number, through to the minority parties.

§ Sir Russell Johnston
I am grateful to the Minister for giving way again, but in doing so he can clarify matters now and obviate the need for later contributions. The hon. Member for Hamilton (Mr. Robertson) said that statements on Foreign Affairs Councils had fallen into desuetude. Presumably, according to what the Minister has just said, that was because no issues were raised through the usual channels.
In his introductory remarks when he called on us to reject new clause 10, the Minister said that such changes should not be introduced as part of a Bill presented by the Executive, but should be decided by Parliament. If Parliament decides to introduce the new clause tonight, that will constitute a decision of Parliament against the Executive.

§ Mr. Garel-Jones
Of course I accept that the new clause is not a wrecking clause—I do not use the word "wrecking" in the aggressive sense. If the new clause is carried, it will not mean that the Government are unable to ratify the Maastricht Bill. I want to make that clear to the Committee, which is why I am inviting my hon. Friend the Member for Northampton, North (Mr. Marlow), as well as other of my hon. Friends and some Opposition Members, to regard the subject as a House of Commons matter.
From my knowledge of other European Parliaments, I can assure the Committee—I am not necessarily speaking as a member of the Government—that the House carries out its business much more efficiently than people imagine. To pick up the issue raised by the hon. Member for Hamilton, at present, at the end of each European Council meeting we state what was discussed at the Council in reply to a parliamentary written question. If the House felt that it wanted a verbal statement, that desire would be raised through the usual channels and discussed and, if necessary, the Select Committee on Procedure could become involved.
My hon. Friend the Member for Stafford was much exercised by the fact that the Maastricht treaty describes the European Community as the European Community, not the European Economic Community. The Maastricht treaty simply formalises what has been a general practice for many years. My hon. Friend seemed to be worried about that on the ground that he and some of my other hon. Friends have always regarded the European Community as a common market, so the removal of the word "economic" implied something broader to him.
I am sorry that my hon. Friend the Member for Stafford is not present. When he supported the Single European Act—he again confirmed today that he does not renege on that—that Act introduced an article on social policy. Therefore, it must have been clear to him then that 967 we were engaged in something slightly more than casual encounters in the market place. The term "European Community" has long been used in the House by many people, including my right hon. Friend the Baroness Thatcher, as long ago as 1981. I hope that my hon. Friend will not regard the use of the term in the treaty as of special significance.

§ Mr. Rowlands
The Minister made an understandable distinction and said that the Government had sought to ensure that there was a declaration, not a protocol, in relation to national Parliaments. Will he confirm what I assume to be true, which is that none of the declarations in the treaty falls within the scope of the Bill?

§ Mr. Garel-Jones
I think that they fall within the scope of the Bill but, as the hon. Gentleman will be aware, a declaration is not legally binding on any member state. The declarations fall within the scope of the Bill, but they are not legally binding and are not, I am told, imported into domestic law. I shall take advice on that matter and reply to the hon. Gentleman later.

§ Mr. Jenkin
It is ironic that we are changing the name of the European Economic Community to the European Community at the same time as Her Majesty's Government are insisting that the Community is an economic pillar in a union of separate pillars that relate to issues other than economics. As originally formulated in the Single European Act and the existing treaty of Rome, the Community is principally an economic community. However, the new article 2 mentions objectives such as social cohesion and solidarity. We know that the pillars are associated with the Community through various articles in the Maastricht treaty.
Therefore, in the European Economic Community, we are creating something much more than an economic pillar. That is the reason for the desire to change the name. We are the only country at odds with the objectives of the other 11 member Governments, who want to create a Community that includes the pillars in the fullest sense. That is why the Commission has just appointed new Commissioners to have responsibility for matters that we regard as outside their control—such as justice and home and foreign affairs.

§ Mr. Garel-Jones
The European Community is a developing and living institution. I think that my hon. Friend the Member for Colchester, North (Mr. Jenkin) is being a little unfair to himself and others if he believes that the European Community has always been conceived as nothing more than a market. One only has to read the preamble to the treaty of Rome and the Single European Act to see that the Community was always more than that.
If we are successful in persuading many of our partners that there should be intergovernmentalism within the union, as I hope and believe we will be—that will be the debate for 1996 and beyond—I would not be surprised if, over the years, the term "European union" became more common than the term "European Community". I would not regard such a development as sinister. In essence, the treaty merely recognises what has become custom and practice. Almost everyone refers to the European Community as the European Community.

§ Mr. John Townend (Bridlington)
Is not the change of terminology much more significant than my right hon. Friend is making out? The word "union" is much more significant to Europeans than the word "Community". I accept the sincerity of my right hon. Friend the Prime Minister and his colleagues when they say that they are opposed to the Community being developed as a federal state. However, is it not a fact that all the other leaders —with the possible exception of the Danish Prime Minister—see Maastricht as a move towards a federal state? Is it not dangerous to sign a treaty that we think means one thing and the other 11 member states think means something else?

§ Mr. Garel-Jones
I do not want to deceive my hon. Friend. It is true that, during the past 30 years, a number of our partners have moved towards a single structure—I would almost go as far as to say that the whole thrust of the Community has been towards a single structure. In many ways, our reticence was due to the fact that we joined the Community late.
The beauty of the Maastricht treaty is that, for the first time, we have emerged from a set of negotiations not merely saying that we made the best of a bad job and managed to hold things back. I see that my right hon. Friend the Member for Mole Valley (Mr. Baker) is in his place—he played a significant part in the development. There was pressure to push all the Home Office business into a single structure. The crucial moment occurred at the time of the Dutch text, when the federalists fought what I hope will be their last battle in the development of the European Community. My hon. Friend the Member for Harrow, East (Mr. Dykes) wishes to see a single structure. That is not a sin. It is almost the majority view in Europe, and it is the view of the Liberals.
We cannot be certain of anything, but the treaty gives us a chance to make intergovernmentalism work. Some countries in the Community now support that approach, but when the Dutch text was produced, only two countries were prepared to support it.
Part of my task is to persuade hon. Members who have perfectly understandable doubts about the matter that, if the Conservative party enthusiastically supports intergovernmentalism, considers law and order on a European scale and successfully presses ahead on common foreign and security policies, we can enter the 1996 intergovernmental conference with the enlarged membership increasingly beginning to shape the Europe that Conservatives have always wanted to see.

§ Mr. Marlow
Will my right hon. Friend give way?

§ Mr. Garel-Jones
Perhaps my hon. Friend will forgive me if I do not. It would be wrong if hon. Members who have sat here throughout the debate did not have time to speak.
The Danish decision has been mentioned, and the Committee has a right to hear the Government's view on it. The Government do not intend to amend the Bill to incorporate the decision on Denmark. That decision does not amend the Maastricht treaty or Community treaties; nor does it create any rights or obligations in EC law that require to be given effect in United Kingdom law. Therefore, it does not require to be incorporated in the Bill.

§ Mr. Marlow
To some extent my right hon. Friend is being a little less than frank with the Committee. He says that this great juggernaut has been turned around by the Government's heroic efforts, and that things are now moving our way. The reality is that, in areas where the Community already has competence, it is being given more, as well as more majority voting. We are dealing with new areas of policy where it does not have quite the competence that it had before, but they are new areas, and the Community now has new competences. In all those areas, the Commission will be present and will have rights of initiation.

§ Mr. Garel-Jones
The European Community, the European union, is a developing institution. The Government, or at any rate British Conservatives, have rightly been uneasy over the past 30 years about the centripetal force driving the Community. At the very least, the Maastricht treaty can be said to have arrested that centripetalism.
The intergovernmentalism that has emerged, and the way in which the treaty is structured, gives British Conservatives for the first time an opportunity to gain morer allies for our vision of Europe. A British Prime Minister at that 1996 intergovernmental conference will, if we back the treaty enthusiastically, not be batting alone against the rest of the Community and picking up allies where he can. He will find that a substantial bloc, which I hope will contain some of the new members who have acceded—I am sure that it will also contain Denmark—will join us in shaping the Community in that way.
My hon. Friend the Member for Northampton, North spoke about extended competences. As we debate the detailed articles, he will find that education, which he would no doubt describe as a new competence, is covered. The new article on education defines and limits the extent to which the Community can operate in education, and does it in a much stronger way than was allowed for in the Single European Act.
Under that Act, the Community attempted, under what we often saw as a false treaty basis, to move into education. Now, the specific areas are defined, and the article states that there shall be no harmonising measures. As we debate the Bill, I hope that my hon. Friend will find significant improvements compared with the Single European Act. I confirm that declarations are outside the Bill's scope.

§ Mr. Denzil Davies
The Minister spoke about the Danish decision. The Government line, described by the Prime Minister, is that the Danish decision is binding in international law. Does that mean that the International Court of Justice at the Hague has jurisdiction and could enforce that decision if necessary?

§ Mr. Garel-Jones
Any binding international decision that is in dispute would go to the International Court of Justice at the Hague.
I have taken up enough of the Committee's time. My hon. Friend the Financial Secretary to the Treasury will deal with economic and monetary union.

§ Mr. Spearing
I had hoped to speak to the amendment, but, because of the Chairman's choice in relation to the Edinburgh matter, I now have two tasks. I shall deal later with the Edinburgh issues. I am glad to pick up immediately the Minister's point about what he says has 970 been a change in the centripetal authoritarian tendency in the Community. He and the Prime Minister claim not only to have halted but to have reversed that tendency. Many times the Minister has said that for the first time we have this or that. He nods in agreement. I shall try to prove what I said during the recommittal debate—if I can call it that. That is not true. If anything, the reverse is correct.

§ Mr. Garel-Jones
I hope that I have never said that Britain has won, because in the development of the Community there are never final victories or final defeats. Most objective observers and certainly everyone in Europe believe that the shape envisaged by the treaty is a substantial advance for those who take a nation state view of Europe rather than for those who seek to be integrationists in a single structure. The debate is continuing and we need the enthusiasm and dedication of all political parties in the United Kingdom if we are to punch our weight and win more points.

§ Mr. Spearing
I agree that the Minister has never spoken about victories, but he has said that there has been a change of attitude and a change of mood. He nods in agreement. I dissent from that view. I am sorry that the Minister was not able to reply to my letter of 15 December on some of these matters. Perhaps if he cannot reply to my questions in the debate he will write to me. I hope that he will deliver a winding-up speech, because he has not yet heard all the contributions.
The Minister will remember Maastricht mark I or, rather, the Dutch treaty which was hurriedly removed from the public eye when the Dutch presidency started. It was chucked away. Everybody said that it was going too far too fast and that it was too ambitious. A few days ago I asked the Minister which of the matters in the treaty that disappeared were not within the scope of the present treaty. We are debating what the Minister called the trunk of the treaty—titles II, III and IV—and the supporting
I suggest that that is not the right analogy. Instead, we have a single building with a few partitions inside it. It is all pretty flimsy, and some of the partitions might be paper rather than the real thing. I asked the Minister—he replied only the other day—to tell me what matters that were to be found in the treaty that was suddenly removed are not within the treaty that is before us. The Minister could not refer to any. In other words, the so-called treaty of Maastricht—the treaty of union that we have before us —is of similar scope to the treaty that was introduced during the Dutch presidency in September 1991, and was then hurriedly withdrawn.
7 pm
The difference between the two treaties, as the Minister correctly says, is in the scope of specific Community competence, as envisaged in the titles that we are discussing, and that which he claims to be entirely intergovernmental that surrounds it. Incidentally, this is of importance in respect of the Edinburgh decision, because the Edinburgh European Council was not the intergovernmental body which made the decision. There is a fine but important distinction to be made.
Why do I say that the union edifice is very different from the structure that the Minister wishes to project to us? The elements of the trunk and of the European Community that are to be found within the so-called pillars are manifold. I would like to go through them in detail, but I shall not do so because I know that others 971 wish to contribute to the debate. In title I, however, we find no fewer than eight references to institutions of the Community. They are not intergovernmental, because they are part of the trunk. There is one reference to the Council, four references to the Commission, two to the Parliament and one to the European Court of Justice. The elements within titles II, III and IV get into title I as well, and that was supposed to be entirely intergovernmental.
We were told that there would not be penetration into the other parts of the treaty. Article J deals with foreign and security matters. Within it there are 17 references to the Council and six to the Commission—23 in all. I am sorry that the Minister of State is not in his place to hear what I have to say because this is proveable stuff.
I move on to article K, which deals with judicial and home affairs. We cannot get more national than that. In the series of articles—it starts with K1—there are three references to the Council, four to the Commission, two to the Parliament and one provision for the European Court. If we take up cross-references—I shall not do so in detail—there are no fewer than 40 references to the Community's institutions as they are at present in the so-called pillars. Surprise, surprise, many of them refer to the ubiquitous Commission.
The Commission is there all the time, and that is because it is charged with making the whole outfit coherent. That is made clear in the early articles of the treaty. The Commission has the right to understand what the pie is doing, if it is not a finger steering the pie, as it were. This means that titles II and III are much expanded. I suggest that the union is the entire temple and not the single trunk with supporting pillars, and that the claims of the Prime Minister and the Minister of State are not correct. I shall prove that—I hope to be able to do so entirely within the terms of the debate—in relation to the powers of the European Court, which are established and are of the Community.
Migration and home affairs are covered in article K. Article K3.2 (c) reads: without prejudice to article 220 of the Treaty establishing the European Community, draw up conventions"— this is a reference to the Council— which it shall recommend to the Member States for adoption in accordance with their respective constitutional requirements. Unless otherwise provided by such conventions, measures implementing them shall be adopted within the Council by a majority of two-thirds of the High Contracting Parties. That is the Council. There it is. It is working within the so-called intergovernmental area. The article continues:
Such conventions may stipulate that the Court of Justice shall have jurisdiction to interpret their provisions and to rule on any disputes regarding their application, in accordance with such arrangements as they may lay down. Denmark is rather sensitive when it comes to matters relating to citizenship, for example, which one would think would be well outside the jurisdiction of the European Court of Justice. I suggest, however, with the support of quotations, that they certainly are not. Hon. Members may say that there is no compulsion on member states to be parties to the conventions. Tell that to those who were present at the Trevi discussions. Tell that to the Select Committee on Home Affairs. We all know that if we are to have effective laws relating to policing and drugs, for example—something which we all wish to see inside the possible union—we must have a certain amount of co-operation. The only way in which that can be achieved 972 practically is by some sort of agreement. The pressure to adopt the conventions, subject to the European Court, will, I suggest, be politically impossible to resist.

§ Mr. Nigel Evans (Ribble Valley)
The hon. Gentleman has almost given the game away. I think that he is jumping at shadows in terms of the fears that he has expressed. Article K3.2 distinguishes the intergovernmental co-operation therein described from the procedures under the European Community by giving the initiative to member states as well as to the Commission. It makes it clear that agreement to any convention must be unanimous. There is no question of majority or qualified majority voting. It makes it clear that conventions can be referred to the European Court of Justice only where there is agreement by the states that happen to be parties to the convention. It is—

§ The Second Deputy Chairman of Ways and Means (Dame Janet Fookes)
Order. The hon. Member is beginning to make a speech. I think that he knows that in my book interventions should be short.

§ Mr. Evans
rose—

The Second Deputy Chairman
That is it.

§ Mr. Spearing
I am grateful to the hon. Member for Ribble Valley (Mr. Evans). I was saying that there is a channel of competence. It is true that agreement is required, but Ministers who have been to Brussels will know only too well that a ratchet applies to matters relating to European Community. Unanimity sounds fine; it sounds as though there is a veto once and for all. We know that it is difficult to withstand that procedure and that once there is agreement there is no going back. I suggest to the hon. Gentleman that there is sufficient inducement to agree to competence, to agree to an agreement within the ambit of the European Court. I use that as a trenchant illustration, I believe, of the degree to which the separation of the pillars and the trunk will not, in practice, be as people think.
The hon. Gentleman knows what happens when Ministers fly into Brussels having been briefed by civil servants at the last minute after a constituency meeting, worrying about this, that and the other. That is irrespective of party. The hon. Gentleman knows the Commission, the Council and the central institutions of the Community, with their staffing, knowledge and the Committee of Permanent Representatives, and all the things that go on. That is the effective centripetal drawing in of effective power which, I fear, will be given a boost by the treaty.
The process may have been even faster under the Dutch mark I treaty. The Government have probably slowed down the rate of acceleration that would otherwise have taken place, but there is still that progression to centrality.

§ Mr. Tim Devlin (Stockton, South)
What concerns me about what the hon. Gentleman is saying, along with so many of his colleagues on both sides of the Committee who are against the Community, is that they lack flair and imagination in seeing what the Community could do. For the Community to draw power to the centre for certain purposes is not necessarily a bad thing. After all, in the past two weeks we have seen that we have no control over the merchant shipping fleets which pass through our waters and may come to grief on the rocks creating great 973 disasters. A European market into which the world has to sell is a much more powerful entity than a merely British one, is it not?

§ Mr. Spearing
I am surprised to be accused of not having much imagination. My trouble is that I have rather too much. However, I think that I am realistic. I do not see hobgoblins.
What is there to prevent every European nation, whether a member of the Community or not, acting separately by intergovernmental action, saying that they will not accept any tanker discharging in any of their ports unless, unless, unless, unless? We do not need a European Community to be able to do that. That could be done fairly soon. It could be done if the Ministers responsible to the House took action. Why do they not? It does not require a centralised Community bureaucracy.
I was not going to make this point because I wanted to be brief, but I shall do so in answer to the hon. Gentleman. British farmers find themselves having to demonstrate against the Minister of Agriculture, Fisheries and Food. Do not the poor farmers realise that the power to decide what we do with our soil in agricultural terms went from the House in 1973 by majority vote? Apparently they do not.
During the enormously important worldwide negotiation on the economy under GATT, the Minister, then the President of the Agriculture Council, had to book into a hotel under an assumed name and bite his nails while an unnamed, virtually unaccountable EC official negotiated on behalf of all the members of the Community. If the hon. Gentleman thinks that that is right, let him get up and say so.

§ Mr. Devlin
He thinks that it is right. It is far better for the Community to negotiate GATT as a whole than to spin out the whole arrangement by perhaps another 10 or 15 years on each round simply because there are that many more parties to the agreement. Of course it is better that we negotiate as a single market.
7.15 pm
On the hon. Gentleman's earlier point about shipping, he simply described the position as it is now. The disaster that we are faced with at the moment occurred because a ship going from Norway, which is not in the Community, to Canada, which is not in the Community, did not have to meet the standards required in a British port because it was not going to a British port.

§ Mr. Spearing
There is nothing to prevent the Norwegians, if they so wish—I should have thought that they might, being a maritime power—agreeing to anything whether inside or outside the EC. I shall take up the matter with the Canadian High Commission because Canada is worried about the environment.
On the other point, the hon. Gentleman mistook what I was saying. If there is a single market by law and there is a negotiation under GATT, of course we must—unfortunately, from my point of view—negotiate as a Community. But we do not have to send in an unnamed official while the President of the Council of Ministers concerned has almost the status of an office boy on the edge, or so it looked. Is that what the hon. Gentleman wants? I do not think so. That separates the elected person responsible to the people in this Parliament and in other 974 Parliaments, accountable in some way or another, from the officials of the Commission who have far too much power.

§ Mr. Devlin
rose—

§ Mr. Spearing
I said that I would not give way again and, in order to assist other colleagues, I must move on to the second part of my remarks relating to the so-called decision at Edinburgh.
I was at Edinburgh during the summit. I spent one evening in the company of the hon. Member for Billericay (Mrs. Gorman) and 200 other people. We were both making our views known about the succession of treaties. One member of the multinational audience asked me what the hon. Lady was like. I said that she was Baroness Thatcher times two. That was met with disbelief, but I was believed when she made her speech. She was not in favour of these matters. Everyone knows my views. She said that we needed to get rid of the Community because it was a socialist plot. I said that the hon. Lady was wrong because I thought that it was a capitalist plot. I had the words of the treaty on my side. It requires the free movement of capital and labour unless authorised to the contrary. However, I said that we should compromise because we both agreed that it was a plot. We must remember the old succession, "I plan, you scheme and they plot". I suppose that that is what we all say about each other.
The decision at Edinburgh was surely about political power, because that is what the treaties are about. They are a map of political power; a proto-constitution taken as a library of treaties, including the Single European Act, bits of which are also lying around.
What does the Edinburgh decision do? Does it modify political union? I should have thought that it must; otherwise Mr. Schluter would not have been able to go back to Copenhagen satisfied that he had enough to be able to recommend a second round in Denmark. It must make some change. On the other hand, we are told that the decision does not change the wording of the treaty. If that is so, how can it have a different effect? I should like the Minister to explain that conundrum when he replies.
Many people say that the decision makes no difference. Earlier in the debate the hon. Member for Stafford (Mr. Cash) quoted the German Chancellor and I shall do so again. In the Financial Times on 4 January 1993 the Chancellor is quoted as saying: the European Community expressed their sympathy for Denmark's special reservations, but decided not to change the Maastricht treaty. Reopening negotiations was not, and is not, on our agenda. I do not know who "our" is. Presumably it does not include Denmark. He continued:
In Edinburgh we therefore could go no further than to clarify the relevant treaty clauses to respond to the main Danish concerns. This purely declaratory 'decision' neither changes nor complements the treaty, and therefore does not require ratification by member states. I think that everyone who is present now was present when, in reply to a point made by one of my hon. Friends, the Minister—having received some information—confirmed that declarations were not legally binding. There may be a problem in the translation, but it is clear that Chancellor Kohl does not want the declaratory decision that we are discussing to be legally binding in the sense that we have been told it is.

§ The Financial Secretary to the Treasury (Mr. Stephen Dorrell)
The hon. Gentleman quoted my right hon. Friend as having said that declarations were not legally binding. That is not quite what my right hon. Friend said. He was asked specifically whether the declarations attached to the treaty came within the ambit of the Bill, and the answer to that very precise question is an equally precise no.

§ Mr. Spearing
Well, we shall consult Hansard. I believe, however—although I am subject to correction—that, while protocols are legally binding, declarations in a treaty are not. That is laid down in the Vienna convention. Declarations of hope or intent, for example, cannot be legally binding, because people can change their minds —and that is quite right. None the less, some of us expected a protocol at least: I think that the Danes expected that. Such a protocol could have been added, and it need not have been very long.
Following what may have been skilful negotiation by our Prime Minister, we have secured certain clauses and derogations. Some people object to them, and I understand why. The Danes, however, want much more; they suggested, for instance, that changes applying to Denmark could also be applied to applicant states of the Nordic union, if they wished it. I understand that the decision concerned extends to no country other than Denmark, so one of its requirements has already gone out of the window.
Having asked questions about the declaration, I discovered that it did not need ratification. I was told by the Minister of State, Foreign and Commonwealth Office —a junior Minister— The decision does not require ratification". He went on to say that the decision had been made not by the European Council, but by Heads of State and Government meeting within the European Council."—[Official Report, 17 December 1992; Vol. 216, c. 356.] As recently as 11 January, I asked the Prime Minister who had signed the decision, on behalf of all the nations involved. The Prime Minister replied:
The decision relating to Denmark was not signed."— [Official Report, 11 January 1993; Vol. 216, c. 554.] I am not suggesting that every international treaty should be signed, but if I take a guest into the Strangers Cafeteria, I sign for it. We all sign for things all the time, do we not? We have to sign even for small transactions. Why did no one sign that decision? One would have thought that, if it is to be effective and applicable in international law—as the Prime Minister told us several times that it would be on 14 December—all possible steps would have been taken to ensure that.
According to information that we received recently, a ruling of the European Court of Justice—to which the Prime Minister referred repeatedly on 14 December; it sounds good, does it not?—currently binds only seven of the 12 members of the Community. Somone might ask, "How far are titles II, III and IV exclusively the Community's provenance, and how far are the other titles exclusively within the jurisdiction of the European Court of Justice?" What if there are conflicting judgments about the interpretation of this so-called decision? Who will win?
My right hon. Friend the Member for Llanelli (Mr. Davies) asked a pertinent question: whether the decision was registered with the United Nations as an international treaty. According to the most recent information that I 976 have received, my right hon. Friend asked the Foreign Office that question before Christmas, in which case it has had plenty of time to find the answer.

§ Mr. Denzil Davies
I can confirm that. I asked whether the decision, or treaty, was registerable, and whether it had been registered. I have not yet received even a holding answer, although I believe that it will arrive by van today, three days late. I do not know when the substantive answer will arrive.

§ Mr. Spearing
I do not see a Foreign Office Minister in the Chamber. I am sorry that the great Foreign Office, with all its Ministers, cannot provide someone to listen to what we are saying; but I am not surprised that, in a rather strange speech, the Minister made it clear that he did not want the matter to be reported to Parliament.

§ Mr. Shore
On a point of order, Dame Janet. Is it not extraordinary that no Foreign Office Minister is present? My hon. Friend is raising points that are clearly not within the competence of the Financial Secretary to the Treasury, who is here to deal with European monetary union. These are serious matters, and it is outrageous that no Foreign Office Minister is listening.

The Second Deputy Chairman
The question of whom the Government put up to listen, or to speak on their behalf, is not a point of order for the Chair. No doubt Ministers will have noted the right hon. Gentleman's point.

§ Mr. Spearing
Thank you, Dame Janet—and I also thank my right hon. Friend for reinforcing my point. On an earlier occasion, I raised a point of order asking for a separate debate on these important matters; we are having that debate now. I pointed out then that I had written to the Attorney-General on 15 December, seeking information about the Edinburgh summit. I also asked him about the failure of the Foreign Office Minister to reply to points made in the previous debate. Many hon. Members will recall that famous occasion, when the Minister was apparently unable to reply to questions about justiciability. No wonder the poor chap could not answer; I did not think that there was an answer.
I took it on myself to write to the Attorney-General because I thought that he would know the answers to my questions. I requested a reply in time for today's debate, but so far it has not arrived. I believe that it will come tomorrow, but I am told that it will come not from the Attorney-General but from a Minister of State at the Foreign Office. It looks as though I shall have to write another letter. Not only have I had to write to the Attorney-General, who was not present for the previous debate, but no Foreign Office Minister is present today.

§ Mr. Nicholas Winterton
The hon. Gentleman referred to the status of the declarations relating to Denmark. Many of us are concerned about what is happening in Denmark, and interested in the outcome of the next referendum. We do not know when that will take place; it will depend on what Government Denmark has after its current difficulties.
Is the hon. Gentleman implying that the Danish people may be faced with a false prospectus? They may well be given certain assurances which have no validity in law. If the matters concerned come before the European Court in the first instance, the declarations may well be set aside and 977 the Danish people may find that they have participated in a referendum on the basis of various assurances given to them by the Government of the moment which have no legal validity and could be dismissed by the European Court with the stroke of a pen.

§ Mr. Spearing
I am not sure that it would necessarily be for the European Court or even for the International Court of Justice at the Hague. That matter has yet to be decided—we do not know. If the House of Commons does not know, I fail to understand how the Folketing can know either. The House is surely entitled, as a provisional signatory to the treaty, to the same information as the people of Denmark. We have yet to decide whether we will have the same opportunities in the future—that comes in a different part of the Bill—to put the same question that was put to the people of Denmark. We may yet do that.
If Denmark is treated in that way—at least by a possible con; I put it in colloquial language—we, as members of the European Community concerned with the quality of democracy in the Community, have just as much right to know whether the decision taken at Edinburgh was genuine.
On the evidence before us, the chances are that it was not genuine. My evidence is the words of the Prime Minister himself. On 14 December, I asked him how the nature of the European union could not be affected if the declaration at Edinburgh was to be legally and justiciably effective. If it is not to have an effect on the treaty, what has it to be effective and justiciable about? There cannot be one without the other. The Prime Minister replied: The hon. Gentleman began with a fallacy … What was agreed was an intergovernmental binding decision, not a treaty. There is a clear distinction between the two."— [Official Report, 14 December 1992; Vol. 216, c. 37.] I do not see a clear distinction between an intergovernmental, binding decision and what we know as an international treaty. Perhaps I had better ask the Prime Minister about that. It seems that we are in dangerous waters.

§ Mr. Christopher Gill (Ludlow)
Is not the most distressing part of much of this debate that we, as the tribunes of the people, are unable to decide such matters for ourselves? At every twist and turn, one is looking to the legal profession to tell us what it is that we think that we have decided in the name of the people. It seems that we have effectively copped out of making decisions on behalf of the people that we represent.

§ Mr. Spearing
I understand the hon. Gentleman's concern, but I will try to be a little imaginative and optimistic. In Britain, other than by treaty, the highest court is this House and another place. Is it not suspicious that, despite the hon. Gentleman's assertion about asking lawyers—I like to ask them things and obtain full explanations—no representative of the Lord Chancellor's Department is in his place? We can tell the people of this country that the fact of that absence should cause them to think very hard.
It may be that the Attorney-General's office would say, "This isn't really for us. We only deal with domestic law. International law is a job for the Foreign Office." That may be true, but where are the representatives of the Foreign and Commonwealth Office? Is it not the height of ministerial arrogance that, during 10 or 15 minutes of 978 debate, the people of this country did not have a Foreign Office Minister present on the Government Front Bench to hear our remarks about international law?

§ Mr. Gill
Is it not almost irrelevant whether Ministers are present, because in the final analysis neither my right hon. Friend the Minister of State nor my right hon. and learned Friend the Attorney-General will be the final arbiter? A court beyond our shores will decide such matters.

§ Mr. Spearing
That may be terrible at the moment, but if the House does not pass the Bill, that is not entirely a matter for the Executive in Whitehall—the princes of politics. It is a matter for right hon. and hon. Members. If we say no to any important part of the Bill, there is nothing to prevent an improved treaty coming before us next time. That has already happened in the case of Denmark—or is it an improved treaty? The very fact that we do not know about the change that the people of Denmark managed to effect, if it is a change, is itself important. That the whole thing was not dropped straightaway because there was no unanimity is also a tell-tale sign.
One major constitutional matter has so far eluded the House, the media, and most of the public. It is of such stratospheric constitutional significance that is is not visible from the Floor of the Committee. The treaty was discussed for 18 months or two years at intergovernmental conferences, summits, conclaves and other meetings. The mind boggles at the man hours that the Foreign and Commonwealth Office must have put in. We had one version of the treaty, and then another. Then we had the treaty on European union, and a modification or not from the Danes. It went on and on.
That treaty of 134 pages was subject to ratification by the due constitutional procedures of each member state under article 236, but then one member said no. A few gentlemen and perhaps one or two ladies—I am not sure whether there are any lady Ministers—met for two days in Edinburgh and reached an overnight decision, without signature. They said, "We are going to change the treaty in respect of the obligations placed on one of our members."
If the Prime Minister is to be believed, they effectively changed the nature of the treaty, which is not to be ratified by the House or any other assembly of the people of the member states. If the Prime Minister is right and the nature of the change is justiciable, the treaty was changed —changed overnight by a group of people sitting in Edinburgh and deciding the way that the treaty should be changed.
It is not just a question of legislation. They do that in the Council, probably every week. It is not just the justiciability of the European Court or tax—they have those already. It is a matter of changing the effective constitution of the union. If that can be done virtually overnight by people sitting in Edinburgh, doing a deal, and changing the constitution of the total union that may be, surely that strikes more of the philosophy of ancient Rome than of the revolutionary and forward-looking philosophy that drove the people of Philadelphia into a different sort of constitution—had it been otherwise, I might not be speaking like this today.

§ Mr. Michael Spicer
First, let me say in response to the hon. Member for Newham, South (Mr. Spearing) that I, too, recollect the Minister of State saying that declarations 979 were not legally binding. I listened rather carefully to that assertion. The hon. Member for Newham, South may have heard it before, but it was the first time that I had heard it said, certainly from the Dispatch Box. Perhaps the Minister of State made a mistake. I am sure that he will not wish to change the record, but he may wish to correct himself. I agree with the hon. Member for Newham, South: the Minister of State certainly said that in my hearing.
I support amendment No. 40 because title II is the instrument by which the jump is made irrevocably—which means for ever—towards a federal state of Europe. Hon. Members asked my hon. Friend the Member for Stafford (Mr. Cash) what was the fundamental difference between the passage through the House of the Single European Act —and of earlier legislation in connection with that treaty —and the passage of the Maastricht Bill. The answer is precisely the word "irrevocable". We are to pass legislation that will bind future Parliaments. If there is a central element to our unwritten constitution, it is that one Parliament should not bind another. That is the new step that we are taking and it is the fundamental difference between the present Bill and everything that has happened before. That is the answer that my hon. Friend the Member for Stafford should have given in response to those who teased him by asking why he had voted in favour of previous legislation but proposed to vote against the Bill. It is a perfectly logical position to adopt.
For the most part, those in Britain who defend the treaty avoid conceding that to accept Maastricht is inevitably and irrevocably to accept the formation of a united states of Europe. As has been said already, others in Europe have no such reservations about accepting the essential federalist nature of the treaty. Indeed, to them, the federalist intent of Maastricht is its chief attraction. That was clearly stated by Chancellor Kohl in a speech made at the Bertelsmann forum on 3 April last: In Maastricht we laid the foundation-stone for the completion of the European union. The European union treaty introduces a new and decisive stage in the process of European union which within a few years will lead to the creation of what founder fathers of modern Europe dreamed of following the last war: the united states of Europe. The Chancellor of Germany is in no doubt about the intent of the Maastricht treaty and his interpretation of the treaty must readily be accepted as the correct one: article 8 of title II establishes the rights and duties of union citizenship. To be a citizen, one has to be a citizen of something; there must exist a state to which one belongs.
The path by which the federal state is to be established under Maastricht is clearly laid out—it is through the formation of a single currency.

§ Mr. Nicholas Winterton
My hon. Friend has rightly referred to a statement made by Chancellor Helmut Kohl, in which he stated that it was his clear intention that there should be a united states of Europe. What Chancellor Kohl did not add—although it was certainly mentioned by the hon. Member for Newham, South (Mr. Spearing)—is that the process will be irreversible. That is surely the fundamental point for the Committee to remember: what happens under Maastricht will be irrevocable and future Parliaments will not be able to overturn or change it. That 980 is why this debate is so fundamental and why it is critical that the people of Britain should have a say, by way of a referendum, in that decision.

§ Mr. Spicer
I entirely agree with my hon. Friend. Maastricht is different from everything that has come before it because it is irreversible and irrevocable.

§ Mr. Dorrell
I am listening carefully to what my hon. Friend is saying. I understood him to say that the obligations that we are to take on under the Maastricht treaty are fundamentally different from the obligations that we took on under earlier treaties because they were irrevocable. Perhaps he would like to turn his attention to article 240 of the treaty of Rome, which says: This treaty"— the treaty of Rome— is concluded for an unlimited period".

§ Mr. Spicer
The fundamental difference is clearly related to the single currency. Until now, it has always been open to Parliament—because it has not been bound by any previous Parliament—to pass legislation that has the effect of revoking earlier decisions made here. There are at least three qualities attached to the single currency which make its creation the fundamental step towards a federalist state.

§ Mrs. Edwina Currie (Derbyshire, South)
My hon. Friend appears to have left the point that he was making earlier. So far, we have had about six or eight "crucial steps". My hon. Friend places far too much emphasis on what Chancellor Kohl said back in April; anyone can produce lots of speeches and high-falutin' rhetoric, but they do not necessarily signify. Moreover, the word "irrevocable" means little. Every piece of legislation that the House passes is irrevocable until it is changed. We do not have to start again with all the legislation on the first day of each Parliament. Finally, one does not need to have a state of which to be a citizen. The citizenship referred to in the treaty gives us certain additional rights on top of our British citizenship—in particular, the right to vote in local and European elections wherever one lives in Europe.

§ Mr. Spicer
I shall try to deal with my hon. Friend's points in sequence. She spoke of rhetoric. I sought to stress that people in Britain on the whole tried to avoid references to the federalist objective of the treaty—for obvious reasons, because, if the federalist objective were clearly pointed out, it would make the treaty extremely unattractive to most people in the country and, I suspect, to most in the House. I was merely saying that no such coyness exists in other countries or among their leaders —including, in the example that I picked, Chancellor Kohl of Germany.
I accept that if we were merely playing with words, my hon. Friend's point about the word "irrevocable" might have some validity. But the word is attached to the concept of a single currency and that is what will make the great difference, for the following reasons. Under most definitions of sovereignty, when a country passes over control of its coinage, all other forms of money or credit and its banking system, it has taken the essential step towards giving away sovereignty and the control of its economy. Moreover, in this case, it does so irrevocably. The establishment of a single currency is a meaningless 981 concept unless it is for ever—for eternity. That has profound implications for the sovereignty, rights and history of this Parliament.

§ Mrs. Currie
The word "irrevocable" needs to be challenged. We regularly sign treaties containing such words. The most significant treaty that we ever signed was that by which we acceded to NATO. That really changed a lot and constituents of mine have died doing what they could, as members of the armed forces, for NATO. That sort of thing was done without thorough debate in the House. I put it to my hon. Friend that nothing is irrevocable. It is often a good idea to get stuck into something, join in and be part of alliances, and do our utmost to make them work in our interests.

§ Mr. Spicer
I am in favour of alliances, but there is all the difference in the world. If my hon. Friend is basing her case on that particular argument, she has totally misunderstood the whole thrust of this treaty and the treaty of Rome. We are talking about a change in the law, which is a fundamentally different concept from an alliance such as NATO. We are talking about something which is totally and generically different.
It is extraordinary that my hon. Friend, who is intelligent and coherent on such matters, should raise the matter of NATO, which is an example of how we have created circumstances in the past which were open to change. This is different. We are about to determine the law of the land in a context in which we will be bound for ever.

§ Mr. Bill Walker
When the people of England and Scotland previously signed a similar treaty for a union they knew what union meant, and we meant it. That is exactly what union means today. Anyone who doubts the meaning of union should remember the reassurances that were given during discussions on the 1972 Act and the Single European Act in 1985. We were given assurances that union did not mean union. We now know that union does mean union because we are creating it.

§ Mr. Spicer
My hon. Friend makes an extremely good point.

§ Mrs. Jacqui Lait (Hastings and Rye)
Will my hon. Friend give way?

§ Mr. Spicer
I shall continue, but I will give way in a moment.

§ Mrs. Currie
My hon. Friend is enjoying himself.

§ Mr. Spicer
I am certainly enjoying myself, although I am not sure whether others will let me go on protractedly for too long.
One implication of the irrevocable nature of what is involved in the treaty, and the fact that the sovereignty of Parliament will be removed, especially one Parliament's ability not to bind another, is to make spurious the argument that has been used against a referendum.

§ Mr. Quentin Davies (Stamford and Spalding)
Will my hon. Friend give way?

§ Mr. Spicer
I will give way in a moment. The argument against a referendum which has been used is that we should do everything through the House. I would certainly prefer that. However, part of the objective of the treaty is 982 to destroy the sovereignty of the House by removing the convention and history by which no Parliament binds its successor—

§ Mrs. Currie
That is nonsense.

§ Mr. Spicer
My hon. Friend may say that it is nonsense. However, I give my views to the House and that is precisely what I think.

The Second Deputy Chairman
Order. I hope that we will maintain the tradition of the House that each hon. Member has the freedom to say what he or she likes, even if it is not popular with others.

§ Mr. Spicer
That particular freedom will be maintained. As I said, the freedom of the House to be totally sovereign within itself will be removed if we set up something irrevocably and for ever. That is the simple point that I am making. Therefore, to argue against a referendum on the grounds that the sovereignty of Parliament must continue is spurious.

§ Mr. Quentin Davies
I am surprised by the argument that my hon. Friend has adopted because I know him well and I know that he has considerable constitutional experience. Does he not realise that it is a fundamental part of our constitution that no Parliament can bind its successor? Even if we sought to use this treaty or any other instrument passed through the House to try to bind our successors, we would not be able to do so. Therefore, it does not matter whether any treaty or any other obligation that we accept may or may not be without any time limit. By definition, it is impossible in practice and in theory to overturn the principle of the British constitution that no Parliament can bind its successor.

§ Mr. Spicer
I do not think that the European Court will accept what my hon. Friend has said. Once the European Court is faced with the law as defined under the Maastricht treaty, it will apply that law. Indeed, the Commission will also apply the law in so far as it has the legislative power to do so.
There is no question but that we are creating a law which will exist unless we build in some new powers of secession. If new powers of secession are not built in, we will have to comply with the law for ever because that is what the treaty and the single currency mean. That would be the case unless the law was changed by unanimous vote and a new treaty negotiated.

§ Mr. Dorrell
I am grateful that my hon. Friend has reinforced the point made by my hon. Friends the Members for Rutland and Melton (Mr. Duncan) and for Stamford and Spalding (Mr. Davies). Perhaps my hon. Friend could tell the Committee what he thought would be the legal effect, as interpreted by the English courts, of the repeal of the European Community Act 1972.
While my hon. Friend is addressing that question, can he come back to what I asked him earlier? He argued that the Maastricht treaty imported a new principle in that it was irrevocable. My point was that exactly the same principle is contained in the treaty of Rome. There is no new precedent in the Maastricht treaty on the point that he is developing.

§ Mr. Spicer
I know that some lawyers take the view that we have already gone beyond the point at which we remain a sovereign country. The Minister has just said that he is 983 one of them. I think that most lawyers still take the view that the process of refining, withdrawing and revising parts of legislation which have been passed by the House remains open to us. Other lawyers dispute that. I simply believe that we have not yet passed the point at which we lose sovereignty.

§ Sir Trevor Skeet (Bedfordshire, North)
Will my hon. Friend give way?

§ Mr. Garel-Jones
Will my hon. Friend give way?

The Second Deputy Chairman
Can I be clear to whom the hon. Gentleman is giving way?

§ Mr. Spicer
I give way to the Minister and then to my hon. Friend.

§ Mr. Garel-Jones
It is difficult to understand the new precendents which my hon. Friend seems to be reading into the Maastricht treaty. He has just referred to one of them. He will recall that in the Single European Act, which he and I supported, we approved the objective of the progressive realisation of economic and monetary union. What did my hon. Friend think he was voting for at that time?

§ Mr. Spicer
If my hon. Friend is saying—

The Second Deputy Chairman
Before the hon. Gentleman continues, could I make the point that hon. Members must address the Chair? I have been treated to a succession of ministerial backs.

§ Mr. Spicer
If my hon. Friend the Minister is saying that, in effect, the single currency commitment already exists as a result of previous legislation, why did he make such a play on the opt-out clause which he achieved? I certainly do not accept it.

§ Mr. Garel-Jones
Will my hon. Friend give way?

§ Mr. Spicer
No.

§ Sir Trevor Skeet
Perhaps the Minister should take note of article 5 of the Maastricht treaty. This will assist my hon. Friend. It says: Member states shall take all appropriate measures to ensure fulfilment of the obligations arising out of this treaty or resulting from action taken by the institutions of the Community. They shall facilitate the achievement of the Community's tasks. They shall abstain from any action which could jeopardise the attainment of the objectives in this treaty. Of course, if we are bound by the Maastricht treaty, we are bound.

§ Mr. Spicer
I agree with my hon. Friend. There is a further point in the context of a single currency and its effect on the federal objective. If there is a single currency, there is, by implication, a single pricing system throughout the new federal state which is being established. There will be a single pricing system and a single currency, but not single wage levels. Indeed, there will be different wage levels and different economic states of development.
There will be misery and political disruption throughout the new state unless a single central compensatory authority with taxation and expenditure powers is established in association with a single currency. It is as logical as night follows day that the establishment 984 of a single currency should involve the establishment of a single taxation authority and a single economic authority. If that is not the foundation, the makings and the essence of a new sovereign state, I do not know what is.

Several hon. Members
rose—

§ Mr. Spicer
I shall give way to my hon. Friend the Minister of State, but after that I will not give way to anyone else for the time being.

§ Mr. Garel-Jones
I wish to clarify the point that I sought to make to my hon. Friend and to my hon. Friend the Member for Bedfordshire, North (Sir T. Skeet). When my hon. Friend and I voted for the Single European Act, we approved the objective of the progressive realisation of economic and monetary union. The route to that economic and monetary union was not defined. Therefore, we were at risk that under article 235 progress would be made towards EMU. The advantage of Maastricht is that it defines what EMU is. Furthermore—this is the point that I wish to make to my hon. Friend the Member for Bedfordshire, North—every time that EMU or a single currency is referred to either in the preamble or in the treaty itself, it is followed by eight magic words: in accordance with the provisions of this Treaty". That is a direct reference to our ability to opt out of that union. So we are in a stronger position now than when we voted for the Single European Act.

§ Mr. Spicer
I shall deal with the matter of opt-outs in a few moments. My hon. Friend answered his own point about whether everything was set in concrete. It was not. Some general objectives were set down in previous treaties and legislation. However, in the Maastricht treaty we are presented with the objective of a single currency.
The only point that I am making at the moment is that clear qualities are associated with the objective of a single currency which add up to a new federal state of Europe. That seems absolutely clear to me, especially on my last point about the essential addition to the single currency of a single economic authority with single taxation and expenditure powers. If that is not the essence of a single state, I do not know what is.
The question in my mind is therefore not whether Maastricht leads towards a federal state of Europe, but whether such a state and such a loss of national sovereignty is a good thing. I certainly recognise that the nation state is a relatively recent invention and that there is no eternal quality about the nation state. I suppose that in Britain it goes back to Henry VIII under certain interpretations. When Henry VIII said, "This realm of England is an empire", it was an act of rebellion. That was the formation of the nation state. I do not base my case on the eternity of the nation state.

§ Mr. Marlow
Will my hon. Friend give way?

§ Mr. Spicer
If my hon. Friend will allow me to finish this point, I shall certainly give way. The question which I shall address after I have allowed my hon. Friend to intervene is whether now is the right point at which to abolish the nation state and move across to some other formation.

§ Mr. Marlow
I wonder whether we can knock a little issue on the head early on in the debate. The Government 985 have a little list of those who supported the Single European Act who now take a different view because they have learnt from experience that things are not as they were said to be at the time. If I could take my hon. Friend back to that time, when he was safely enmeshed in Government, those of us who opposed the Single European Act were told not to worry. The Government said, "It is only about a single market. There is a certain amount of qualified majority voting, but let us have a single market, which is greatly to the benefit of the United Kingdom. We have a veto on everything else. Do not worry, boys. There is nothing in it."
Now the Government are saying about the Maastricht treaty, "We have won all the arguments. We are going there. It is going our way." But look at the details, the text and the small print, because in two years the Government will come back and say, "You agreed to it at the time of the Maastricht debate."

§ Mr. Spicer
I could not agree more with my hon. Friend. It is a variant of the Lord Denning argument. A tidal wave of legislation is about to swamp us. Some people take the view—I do not know whether the Minister of State is one of them, but he seemed to imply it at one point—that we have already crossed the point at which we retain any real sovereignty. Indeed, there are legal precedents for suggesting that, when this Parliament passes legislation, it is inferior to legislation which comes out of the legal institutions of the European Community.
So I agree with my hon. Friend entirely that because we are dealing with law this is the difference between treaties and alliances—the words matter. That is particularly so because we are dealing with an alien form of law—Roman law. As it is codified law, the words matter. That is the essence of the argument that we deploy. It so happens that the proposed new law sets up certain patterns which undermine the sovereignty of this Parliament. It sets up a new federal state of Europe. However, few Members of Parliament are prepared to accept publicly that that is what the Bill does, even though they support the treaty.
The question is whether the nation state still has a role. At a practical level, the idea of converging our economies —for example, by means of fixed exchange rates—must now have been discredited. Events surrounding the ERM and throughout the history of this century have proved that. The attempts to follow the gold standard were completely disastrous. One way of considering the single currency must be to consider it as an ERM in perpetuity.
As the concept of managing one's economy according to the objectives of someone else's economy has singularly failed, the idea that at this stage we can merge our economies through a single currency is foolish on the basis of historical precedent and practicality. However, there is surely a much more fundamental point. It is that we must ask what benefit we gain from the transfer to a new federal organisation.
Let us take the issue of democracy, which above all must concern Members of Parliament. Transferring the sovereignty and undermining the position of this Parliament in favour of an unelected central bank, an unelected Commission and an unelected court of law under Maastricht cannot be done lightly under any circumstances without some massive trade-off.
We know that the economic trade-offs of our arrangements with Europe are dubious. At present we 986 have a £10 billion trade deficit with Europe. I cannot see what benefits we shall achieve out of political union and the transfer of sovereignty.

§ Mr. Nicholas Winterton
My hon. Friend talks about the transfer of sovereignty, but perhaps as important in the short term is the transfer of resources. Is my hon. Friend aware that, for example, our membership of the ERM cost Britain 1 million jobs, with all the poverty and problems that that creates? Under the convergence and other proposals in the Maastricht treaty, we shall transfer further resources to Portugal, Spain and Greece—countries which are already depriving us of jobs and part of our manufacturing base. Does my hon. Friend consider that that is a sensible way to represent the interests of the people of the United Kingdom?

§ Mr. Spicer
I agree entirely with my hon. Friend that the costs are enormous. It is not just the £10 billion trading deficit with Europe. It is the £2 billion that we pay under various budgetary arrangements. My hon. Friend is correct that enormous costs were associated with the ERM. Some people have estimated that the most recent attempts to bolster the ERM cost more than £20 billion. So my hon. Friend has a good point.

§ Mr. Devlin
Will my hon. Friend give way?

§ Mr. Spicer
No. I shall make some progress and give way later if my hon. Friend still wishes to intervene.
It is sometimes said that the process laid down by Maastricht is so unrealistic and premature that it will fall apart under the weight of its own absurdity. It is said that the Germans in particular ultimately will not wear it, so we do not need to bother too much about what is going on.
The fallacy in that argument is simple; we have been debating it for the past 10 minutes. Once Maastricht is signed its provisions become the law of the land. The Commission and the European Court will take over from the politicians to ensure that the rules are applied. There seems to be much misunderstanding on that point both in Britain and in other countries. Let us take the example of the decision by the German Bundestag to ratify, subject to further consideration, the terms of the monetary union.
Germany's position would not be legal after ratification of the treaty. Unlike Britain and Denmark, Germany has no opt-out clause and it will be bound, for instance, by paragraph 4 of article 109j, which states clearly: If by the end of 1997 the date for the beginning of the third stage has not been set, the third stage shall start on 1 January 1999. There are no ifs and buts and no clauses built in to allow the Bundestag to have its say. That will become the law in Germany as well as here, which brings me to the question of the British opt-out. It is unimaginable to me that if Britain accepts Maastricht it will be able to opt out of the single currency. Other hon. Friends may develop a more legalistic argument on the matter, but it is common sense that it will be unimaginable for us to opt out.
If we ratify the Maastricht treaty, one of the tragic consequences will be that Britain will face the choice of sacrificing control over its economy, in the way that I have tried to describe, or of leaving the European Community. I cannot see how we could remain within the EC as the only country—other than Denmark, perhaps—committed to staying outside the single currency. In any event, it would be meaningless to do so because article 109m of title 987 II forces us to comply with EC monetary policy as if we were within the single currency. That is my answer to people who say that we will not have to go back into the ERM.

§ Mr. Dalyell
If all this is so imaginable, how are we to imagine that the hon. Gentleman remained a Minister in Mrs. Thatcher's Government for so long?

§ Mr. Spicer
I have been trying to answer precisely that question. In my view—and it is only one person's view —the treaty is fundamentally different from any other legislation that we have passed. Other people take a different view and even the lawyers argue about it. I am with the lawyers who say that we are about to take a step which, because of its irrevocable nature, will mean that we will lose our sovereignty. Ministers keep popping up and down and have said that some of the provisions go back a long way, but I take a different view. The treaty is a fundamentally different step.

§ Sir Peter Tapsell
Does not Lady Thatcher take exactly that view—that the Single European Act, which she passed as Prime Minister, was entirely different because it was devoted to economics, whereas the treaty is intended to make us part of a federal political union? If Lady Thatcher takes that view, her Ministers of the day are also entitled to do so.

§ Mr. Spicer
I am grateful to my hon. Friend for that intervention.
On the question of whether we will have to re-enter the ERM, one aspect of the Maastricht treaty which worries me is that it will force us to rejoin. Some hon. Members have said that that is not true, but article 109m clearly states: Until the beginning of the third stage, each Member State shall treat its exchange rate policy as a matter of common interest … From the beginning of the third stage and for as long as a Member State has derogation, paragraph I shall apply by analogy to the exchange rate policy of that Member State. The opt-out in the appropriate protocol makes us fall within the category of member states who have derogations, so there seems to be little doubt that we will have to re-enter the ERM if we sign the Maastricht treaty.

§ Mr. Dorrell
I should like to hear my hon. Friend develop that argument. He seems to interpret meaning in the words of article 109m that is not there. He says that it is accepted that if the United Kingdom exercises its right under the protocol and does not join monetary union, the provisions of article 109m would apply: that "exchange rate policy" is a matter of common interest. That does not mean that, merely because exchange rate policy is a matter of common interest, member states are obliged to join the ERM, nor does it state that anywhere in the treaty.
Secondly, paragraph 4 of the protocol governing the United Kingdom's position states, totally unambiguously, that if we choose not to join monetary union
the United Kingdom shall retain its powers in the field of monetary policy according to national law. Our national law makes no provision for an obligation to join the ERM.

§ Mr. Spicer
I am gratified at the way in which Ministers are popping up and down like yo-yos to join in the debate because they have been rather reluctant to debate these matters in public. That at least is a good development.
In answer to my hon. Friend the Minister on the question of the protocol, in paragraph 6 he will find that article 109m shall apply to the United Kingdom as if it had a derogation.

§ Mr. Dorrell
indicated assent.

§ Mr. Spicer
Precisely. That means that from the beginning of the third stage, and for as long as a member state has a derogation, paragraph 1 shall apply by analogy to the exchange rate policy of that member state. Paragraph 1 talks about the common interest.
My hon. Friend the Minister may give us his opinion that the common interest does not mean that we will have to re-enter the ERM, but after we ratify the treaty his views will not matter. That is one of the problems. The views of the judges and of those people to whom the matter is appealed are what will count.

§ Mr. Budgen
Will my hon. Friend invite the Government to get some independent advice? It is all very well for us to act as though we were well-qualified amateur lawyers. Most of us are doing so out of ignorance and prejudice. A definitive statement of how the Commission and the European Court interpret the matter is required. Mr. Martin Howe argues forcefully that we shall be obliged to join the ERM—after all, he comes from a family which has some prejudices on the issue. However, the Minister says that there is no chance of the United Kingdom being forced into the ERM. Definitive and objective advice is required, either from the Commission's legal department or from the European Court, so that we know what will happen.

§ Mr. Spicer
The one thing that cannot be said of my hon. Friend is that he is an amateur lawyer—he is extremely knowledgeable on the matter. After we have analysed the question, it will be handed to the European Court and to the Commission to determine. It will be for lawyers to figure out how to determine it, but it seems to me that the "common interest" could be interpreted by the court to mean that we would have to rejoin the ERM as other countries are doing so. My views are no more worth while than the Minister's, because ultimately the matter will be determined by the court.

§ Mr. Denzil Davies
I am sure that the question of whether there is a legal requirement for us to rejoin the ERM is an interesting argument, but, in practical political terms, does the hon. Gentleman agree that if the Maastricht treaty were ratified and the Bill were to become law, the Government would rejoin the ERM around the turn of the year because there would be no logic in their being part of the exercise without doing so?

§ Mr. Spicer
Yes, I agree that that would be part of the logic and part of the new Maastricht philosophy which would have been accepted.

§ Mr. Ray Whitney (Wycombe)
My hon. Friend is being very generous in allowing interventions. I invite him to return to the phrase that is causing him so much serious 989 concern—article 109m. Is he saying that he foresees a court or an amateur or professional lawyer interpreting the phrase, each Member State shall treat its exchange rate policy as a matter of common interest as the same as saying that each member state shall enter the ERM?

§ Mr. Spicer
That is one interpretation. I did not want to bore the Committee by reading out all of article 109m, but the next sentence states: In so doing, Members States shall take account of the experience acquired in co-operation within the framework of the European Monetary System and in developing the ECU, and shall respect existing powers in this field. In that context I could understand why lawyers might decide that that was tantamount to an instruction to go back into the ERM.

§ Mr. Marlow
The problem with all these treaties is that the same point is addressed in several different places within them. Article 102a, under the title "Economic Policy", states: Member States shall conduct their economic policies with a view to contributing to the achievement of the objectives of the Community, as defined in Article 2". If we ratify the treaty we will commit ourselves to that. Article 2 states: The Community shall have as its task, by establishing a common market and an economic and monetary union". How are we to have such an economic and monetary union without passing through the ERM first? Whatever the other opt-outs and bits in the treaty, if we agreed and ratified that part of the treaty it would be used against us by European institutions that want us to come along with them more quickly than we would want. They would say that we would have to get back into the ERM.

§ Mr. Spicer
That is why it is unimaginable that, having signed up to the treaty and become part of it all, we would then be able to exert opt-outs. We would have signed up to the objectives and philosophy set out in the treaty and to those institutions.

§ Mr. John Townend
Does my hon. Friend agree that something in the way in which the Government are putting over their case does not ring true? On the one hand, they have said that they intend that Britain shall be at the centre of Europe, but, on the other, they say, "Haven't we done well? We have got an opt-out from the single currency." If we exercise that opt-out and there is a single currency or even a joint currency of member countries and we are neither in that currency nor part of the ERM, we will not be able to claim that we are in the centre of Europe. We will be on the edge of Europe, as we always have been and always will be.

§ Mr. Spicer
One of the paradoxes of the entire debate on this matter and one of my major criticisms of it is that the full logic of what has been done has never been spelt out. Despite everything that I have said and the strong arguments held by many of my hon. Friends and by others, the question remains as to whether, politically, matters are now so sewn up in this country as to make further resistance and debate a waste of time.
In the weeks that lie ahead some people may wonder why those of us who oppose ratification of the Maastricht treaty will continue to argue our position hard and in great detail. We have powerful arguments to place on record. One of the features of the entire debate—acknowledged by 990 most dispassionate observers—is the fact that those of us who do not support Maastricht have made most of the running with the arguments in the past months. That has not necessarily happened because we are more assiduous than the treaty's defenders, but because that defence has been flawed in one crucial respect. Its defenders have not been prepared to argue for it in the only terms possible —on the basis that its avowed objective is a new, federalist state of Europe. There has not been so much coyness in other countries. I can respect the federalist position, but I do not accept it for the reasons that I have already given. I cannot accept or respect, however, the position of those who say that we can have Maastricht while at the same time retaining the sovereignty and independence of our democratic institutions.
People may still ask what is the point of resisting the united determination of those occupying the Front Benches to plough ahead with this treaty. It is a fact that the leaders of the three major parties are working together, either explicitly or implicitly, as they did, some might say to disastrous effect, over the ERM, and as they did in years gone by, with even more disastrous consequences, over the gold standard. I am beginning to wonder whether a new law of politics is about to emerge which dictates that when those on the Front Benches agree they are almost invariably wrong.

§ Mr. Dorrell
I am grateful to my hon. Friend for his generosity in giving way. Earlier my hon. Friend sought to explain what the common concern concept meant in the context of exchange rate policy. He said that under article 109m the exchange rate would remain a matter of common concern even if we exercised our right to stay outside monetary union. He said that he feared that lawyers might interpret that as a commitment to rejoin the ERM against our will. My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) also suggest-ed that we should take legal advice on that point.
I can tell the Committee that we have, today, published legal advice on precisely that subject in the form of a memorandum to the Treasury and Civil Service Select Committee. My hon. Friend may also like to consider that the commitment by member states to regard their exchange rate as a matter of common concern is not a recent invention, but was contained in article 107 of the treaty of Rome, which was signed more than 20 years before the ERM was invented. Therefore, it would he rather difficult to interpret that commitment, which dates back to 1958, as a commitment to join the ERM.

§ Mr. Spicer
My hon. Friend may make that interpretation—

§ Sir Russell Johnston
On a point of order, Dame Janet. May I respectfully say that your instructions to Ministers to face you has also had the consequence of their turning their backs on the microphone. While it may, for reasons of your own, be an advantage for you, Dame Janet, to see Ministers, it is also desirable that we should be able to hear them.

The Second Deputy Chairman
When I made my request I was thinking in terms of a back clearly shown to me. I have not the slightest objection if Ministers face what I call the normal way. Perhaps, for the purposes of the microphone, that would be better.

§ Mr. Nicholas Winterton
On a point of order, Dame Janet. The Financial Secretary has drawn the attention of the Committee to a memorandum that the Treasury has apparently published. Is that document available to the Committee, which is currently debating this rather important matter? I should be very pleased to hear that it is, but could I have your confirmation as to whether you are aware that that document is available not just to members of the Select Committee, but to this Committee?

The Second Deputy Chairman
I have no knowledge of that and, if I heard aright, I am not sure that that is entirely a matter for the Chair.

§ Mr. Giles Radice (Durham, North)
I believe that I can help you, Dame Janet. The first report of the Treasury and Civil Service Select Committee was published today and the hon. Member for Macclesfield (Mr. Winterton) will be able to obtain a copy of it from the Vote Office if he goes there now.

The Second Deputy Chairman
That seems to have settled the matter satisfactorily. Is the hon. Member for Worcestershire, South (Mr. Spicer) still speaking to the amendment?

§ Mr. Spicer
I am trying to draw my remarks to a close, but I have been intervened upon many times by my right hon. and hon. Friends on the Front Bench—obviously they are trying to filibuster.
Given the collusion, or at least the firm agreement, that seems to exist on broad matters of policy, particularly the issue now under debate, among those on the three Front Benches, one must ask why we do not recognise reality and accept that the best way in which to keep a secret is to make a speech in the House on Europe. One may ask why we do not shut up and get on with Third Reading. I venture to suggest that, were we to do so, no one would be more embarrassed than members of the Government who are committed to not having that Third Reading before the Danish referendum.
8.30 pm
Of course, the Danish referendum will now largely determine whether the treaty is ratified. The Danish Government are hard at work trying to persuade their countrymen of two things. The first is that at Edinburgh they achieved some sort of victory for Denmark. However, no less a person than Chancellor Helmut Kohl recently knocked that idea on the head in the article that was quoted earlier by my hon. Friend the Member for Stafford (Mr. Cash). Today the Minister of State confirmed that there was absolutely no change in the treaty as a result of Edinburgh. Therefore, the question to be put to the Danish people will be precisely the same one and it will be about precisely the treaty to which they earlier said no.
Perhaps recognising the paucity of what was achieved at Edinburgh from their own point of view, the Danish Government have a fallback position—to persuade the Danish people of the dangers of standing alone against the rest of Europe. Fortunately, in this context, the British Government have already said very clearly that if Denmark rejects Maastricht, they, too, will reject it. In the meantime, the Danish people need to know that the debate goes on in Britain and in its Parliament—that in the run-up to their referendum they are not on their own. The candle of democracy still burns in the British Parliament.
992 That will be the message that will go out in the next few weeks. It is a very sorry state of affairs that it has come to this—that we shall now, in large measure, be playing the role of cheerleaders, depending for our future on the will of the electorate of another country. This choice has not been of my making or that of my colleagues. We must, however, work with events—whether they be the Danish referendum, the crumbling facade of the ERM, the growing unwillingness of the Germans to sacrifice control of the deutschmark, or the increasingly anxious expressions of the British people.
Time is required for these events to unfold and, in this country, for the details of the Maastricht treaty to be better understood. That is what the forthcoming debates will be all about. Let me state my position and what I take to be the position of my colleagues. Far from being a "little Englander", I am concerned, above all, to set the relationships between Britain and the other countries of Europe in the context of the high seas, of well-established international alliances and of a commitment to free trade and democracy.

§ Mr. Peter Mandelson (Hartlepool)
I hope that the hon. Member for Worcestershire, South (Mr. Spicer) will not mind if I do not follow on directly from his very lengthy and interesting tirade against the Maastricht treaty. No doubt, however, I shall pick up some of the points that he has made.
I want to begin by addressing those articles of the treaty that many of my right hon. and hon. Friends and I consider to be at the heart of what Britain stands to gain from the treaty and from what has come to be known as the Maastricht process—notably the aims expressed in title II of the treaty. Amid the seemingly never-ending torrent of prejudiced and selective information on this subject, people can be forgiven for overlooking—they may never even have been told—the content of this vital provision. I regard it as so important and so admirable that I shall quote it in full: to promote throughout the Community a harmonious and balanced development of economic activities, sustainable and non-inflationary growth respecting the environment, a high degree of convergence of economic performance, a high level of employment and social protection, the raising of the standard of living and quality of life, and economic and social cohesion and solidarity among Member States. That is an absolutely superb set of aims at the heart of the treaty. From Labour's point of view, it must be the most important part of the treaty. Indeed, as has already been said, it could have come straight from a Labour party manifesto. Any of my right hon. or hon. Friends could have written it. In fact, some probably have done when composing manifestos in the past. It is no surprise that this has caused such problems for Conservative Members.
The hon. Member for Stafford (Mr. Cash), who moved amendment No. 40 a very long time ago and whom I regard as the authentic voice of Conservative Members who oppose all matters Maastricht and European, rubbished these aims. He did so in the most eloquent, albeit disagreeable, terms. The heart of his argument was that article 2 seeks to fetter free markets and to prevent proper and responsible Government intervention in order to secure these very important objectives.

§ Mr. Nicholas Winterton
The hon. Gentleman has talked, quite rightly, about the attraction of article 2. Surely he is aware that one of the weapons to be used to achieve these desirable objectives is the ERM. But the 993 ERM has created poverty, unemployment and industrial collapse in many parts of the European Community—not least in the United Kingdom. Perhaps as a result of the ERM the United Kingdom has lost 1 million jobs.

§ Mr. Mandelson
The hon. Gentleman is entitled to his opinion, but many Labour Members take the view that poverty and unemployment in the United Kingdom has more to do with the policies of the Government and the Conservative party than with our membership of the ERM.

§ Mr. Shore
I am sure that my hon. Friend agrees that there is a mixture of factors here. Undoubtedly one of these is the failure of Government policies over a long period, but another is the obligations of the treaties that we have entered into. The failure of Government policies, the appalling weakness of the British economy and the consequent total inability of Britain to stay in a fixed exchange rate system without sustaining massively high and unnecessary unemployment is a peculiar and lethal mixture. My hon. Friend's declaration about article 2 is fine—nobody objects to that—but the trouble about the mention of high employment as an objective is that nowhere else in the 130-odd pages are those words repeated. All the rest is about particular policies of economic and monetary union that would work absolutely in the opposite direction.

§ Mr. Mandelson
I respect the views of my right hon. Friend—indeed, he is a genuine and long-standing friend. However, others take the view that the economic problems that he describes are due equally to the failure of Ministers to use the opportunities that are available through greater European integration and co-operation between Governments, which is precisely what the Maastricht treaty seeks to expand and strengthen.

§ Mr. Butcher
If Ministers fail, if the electorate does not like what they do, they can be sacked at a general election. But after this treaty has added to the rolling progress of Europe we shall not be able to sack the Ministers responsible for ruining the economy. The point is that our being one twentieth of a democracy will eliminate a major part of our power to control our own rate of employment or unemployment, our own interest rates and our own dynamic activity in the economy. The Labour party, the Conservative party and the Liberal party will lose that right for ever.

§ Mr. Mandelson
I do not accept the hon. Gentleman's view. I do not believe that we are simply victims of economic circumstances. I do not think that we are offering ourselves as corks to bob along the surface of the stormy Maastricht treaty, unable to formulate policies within the framework offered by the treaty to overcome precisely the economic and employment difficulties that the hon. Gentleman has identified. Political hands are indeed very important, and I believe that political hands other than those currently in power in this country, resting on a ratified Maastricht treaty, would create very many more opportunities for economic and social progress. For that we must wait for the next election.

§ Mr. Calum Macdonald (Western Isles)
My right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) implied that nowhere else in the document on Maastricht is there a reference to the goal of lasting high 994 employment. However, there is an agreement on social policy which has that precise aim, which the Government have opted out of but which a future Labour Government can opt into. Article 1 of the agreement on social policy says: The Community and the Member States shall have as their objectives the promotion of employment, improved living and working conditions, proper social protection, dialogue between management and labour, the development of human resources with a view to lasting high employment.

§ Mr. Mandelson
I am grateful to my hon. Friend who, characteristically, has his finger and eye on all the provisions of the treaty, not just those which some other hon. Members would selectively pick out to serve their jaundiced points of view.

§ Mr. Budgen
Will the hon. Gentleman give way?

§ Mr. Mandelson
The hon. Gentleman will forgive me if I make a little progress.
If the points which my hon. Friend the Member for Western Isles (Mr. Macdonald) has brought out so successfully from the treaty were at the front of Ministers' minds at recent European Council meetings, we would have had a different outcome from those meetings. It is shameful that Ministers, both at Birmingham and subsequently at Edinburgh, did not have those provisions at the forefront of their minds when addressing the appalling mass unemployment that exists throughout Europe. Instead of following that course, at the Birmingham summit our Government and the President of the Council refused even to place the need for European recovery on the agenda. At Edinburgh, the self-same President relegated discussions on unemployment and the need for economic recovery to talks over lunch and then forced the Council to agree a diluted set of measures arid a diluted European recovery programme, which the Commission had originally sought to put before the Council for agreement. That is a shameful record and a tragic indictment of the Government's economic policies. Moreover, it is a disagreeable and disgraceful indictment of their record throughout their presidency of the European Council and how they seek to lead policy and debate on European matters in this country.
Possibly to an extent against their better judgment and will, the Government have been forced to sign up to first-rate articles at the head of that treaty which Opposition Members should applaud. We should not jeopardise that very important gain but should do everything in our power to strengthen and further it. However, it is only a start. The treaty provides us with a framework for further progress. I do not regard the treaty as an end in itself. I do not put out the flags and celebrate with beer and sandwiches the fact that we have arrived at last and have full employment and social progress now and for ever more simply because we have signed on the dotted line. The treaty is a framework—a start.
Articles 2 and 3, which some hon. Members have subjected to so much textual and literal analysis, are not a set of policies. They must now be hammered out on the basis of the articles and titles that have been agreed. They depend in turn on the policies that stem from the treaty—the policies that allow national Governments to develop and implement them within the framework of the treaty. They must now be hammered out within national Parliaments and Governments and between national Governments. The fight for the full implementation of the 995 treaty following its ratification will only begin once ratification has taken place. The way in which national Governments take those decisions and seek to implement the treaty will shape economic policy making post-Maastricht, and so much depends on that if we are to realise the treaty's aims.
The treaty is permissive and sets a direction. It encourages and directs us to hammer out policies of a particular nature, with goals to which we strongly subscribe, but the proof of Maastricht will be in its implementation.

§ Mr. Denzil Davies
My hon. Friend says that the treaty is permissive. Does he agree that, on economic and monetary union, leaving aside the opt-out negotiated by the Government, it is certainly not permissive? It means irrevocable progress towards economic and monetary union.

§ Mr. Mandelson
Yes, which I strongly support.

§ Mr. Davies
But it is not permissive.

§ Mr. Mandelson
The framework permits the hammering out of economic policies, guidelines and decisions which have yet to be discussed. My right hon. Friend must allow me to continue to make the case as I wish— [Interruption.] I believe that the attainment of economic and monetary union is desirable and necessary. I remind my right hon. Friend that that view is shared by the overwhelming majority of those who attended and were represented at the Labour party conference last autumn—[Interruption.] I shall not be disrupted by points about how we arrive at our votes. Some people like to trumpet votes in favour of matters with which they agree but when they disagree with the vote, they prefer to hide it under the nearest seat. I am at least consistent in those matters. It has been my privilege for a long time to adhere to and trumpet party policy in the series of roles that I have had within my party.

§ Sir Trevor Skeet
I understand the hon. Gentleman's point about the mandatory obligations under the second article, but if he refers back to the treaty of Rome he will find similar mandatory obligations there. That treaty was ratified 36 years ago and there has been ample time to hammer it out, but what has been achieved?

§ Mr. Mandelson
I am not sure what point the hon. Gentleman is making. However, I shall take from it a reinforcement of my view, which is that those matters are in political hands and depend on political judgments and decisions. If the politicians are lacking, so will be the implementation of agreements forged between Governments.
The priority to be given to growth, employment and closing the gap between rich and poor regions is important to the Labour party.

§ Mr. Budgen
Will the hon. Gentleman give way?

§ Mr. Mandelson
I am sorry, but I must carry on. I shall give way later.
The means of achieving those priorities must be fought for in the implementation of the Maastricht treaty. All is 996 to play for, but one makes a decision, one forms a judgment, about a treaty like this: will the treaty and its implementation help or hinder in the attainment of those goals? The judgment that I and my party have reached is that the treaty will help us in pursuit of those goals—growth, employment and closing the gap between the rich and poor regions. That, I believe, is and will remain a settled policy for my party.
Therefore, the platform upon which the Labour party stands is not simply the treaty's articles or titles alone. They are the skeleton of the treaty. The platform on which we stand is what I could describe as "Maastricht-plus", the flesh which must be added to the skeleton of the treaty—the economic policies that are required in Britain and throughout Europe to enable our country to compete and to grow without being blown off course, as we have so often been before, by recurrent currency speculation, by inflation risks and by deflationary pressures, and in the process to rid the continent and, above all, our own country of the scourge of mass unemployment.
For the goals of economic and monetary union to be fully realised, there must be a strategy—I fully accept this and believe it to be the case—to build on the treaty's strengths as well as to combat its weaknesses. What is the key to this? What is the Maastricht-plus that we need to put in place, round which core we can construct a strategy to attain those economic and employment goals which are the end of the creation of economic and monetary union? The answer lies, in my view, in the economic as opposed to the monetary wing of the provisions of economic and monetary union, economic provisions and proposals which for some reason are frequently and conveniently ignored by some of the treaty's opponents in making their rather prejudiced case against the treaty.
The key is the requirement of member states, set out in the treaty, its provisions and protocols, to co-ordinate their economic policies within a framework called the economic policy guidelines which national Governments are obliged to draw up in the framework provided for in the treaty, drawn up by the Commission and adopted by qualified majority vote in the Council. These guidelines will be set in accordance with the treaty, with a view to advancing those economic objectives of the treaty which are set out in article 2, which is certainly not monetarist or Thatcherite or rightist in any shape or form and one which could have come from the lips of any of my right hon. and hon. Friends.
Moreover, the treaty provides for a regular evaluation of the extent to which these policies, which have been hammered out and put together within the economic policy guidelines that are a feature of the Maastricht process, and the economic developments throughout the Community are consistent with these guidelines. In other words, they will keep under permanent review—the Commission working together with the Parliament and the Council—how these goals are being realised, whether we are making progress towards them, how well we are performing in attaining the objectives set out in article 2, and whether we need to make any adjustments to our policy in order to boost that performance and realise those objectives.
Furthermore, there will be crucial opportunities for political pressure—because this is what it is all about—to be exerted to achieve economic policy making, both by national Governments and Governments working in concert throughout the Community, not only in the 997 interests of individual countries but in the interests of the Community as a whole. It is not hard, for example, to see how this kind of economic policy making, based on a commitment to policy co-ordination and conducted within the framework of common objectives set out in the treaty, would have produced a very different course for German fiscal policy and interest rates from the damaging one followed in recent months.

§ Mr. Peter Hain (Neath)
rose—

§ Mr. Mandelson
I will give way in a moment. If we had had that framework in place, if we had secured that co-ordination and that altogether saner way of conducting our policies, we would not have the economic problems that have been generated by German policies. We would, on the contrary, have had a Europeanising of German policy which would certainly have served us and Europe very much better and also, in the medium and long term, the German people themselves.

§ Mr. Hain
The comments of my hon. Friend about the Europeanisation of Germany's economic policy are welcome and I agree with them, but he is quoting selectively from the treaty. He has referred to article 2, what I call the "sunny weather and cold ice cream" clause, the kind of clause that no one can disagree with because its general sentiments are admirable. Let us look at the implementation of the economic policy to which he refers, and particularly paragraph 2 of Article 3a. It refers to an economic policy based on the irrevocable fixing of exchange rates leading to the introduction of a single currency, the ECU, and the definition and conduct of a single monetary policy and exchange rate policy the primary objective of both of which shall be to maintain price stability"—

§ The Chairman
Order. The whole point of interventions is that they are brief, succinct and certainly not repetitious.

§ Mr. Hain
I take your guidance, Mr. Morris, but—

§ The Chairman
Order. Mr. Mandelson.

§ Mr. Mandelson
Thank you, Mr. Morris. I am sure that this is an argument that my hon. Friend and I can pursue at greater length, possibly over a cup of tea, later.
The point that I would like to stress now is that in the macro-economic sphere, in macro-economic policy-making, Maastricht offers us clear gains for sane and enlightened conduct of policy. The extent to which we are successful in cobbling together sane and enlightened policies depends on the actions, decisions and judgments of politicians; everyone is fallible, we are only human. But what we are talking about is a framework and whether we have in place a framework that allows us to behave in a sane, rational and enlightened way. I believe that the treaty gives us that framework.

§ Mr. Denzil Davies
My hon. Friend talks about economic policy. Does he not agree that the problem with the Maastricht treaty, as with Germany, is that monetary policy is not in the hands of politicians, but economic policy is? That policy is codified in the Maastricht treaty, which will present the problem.

§ Mr. Mandelson
Whatever the advertised strengths and independence of the Bundesbank, I think that politicians in Germany would be surprised to hear that they have absolutely no influence in German monetary policies.

§ Mr. Radice
My hon. Friend is absolutely right. German politicians fixed the terms of the German monetary union, which has been so disastrous, not the Bundesbank, which had a sensible policy.

§ Mr. Mandelson
I recognise that some of my right hon. and hon. Friends have fears about the monetary policy. Anxieties about the possible deflationary effect of the treaty have been expressed in the debate, as they have been before and will no doubt be on many occasions in future.
I understand those fears, which are real, but are hugely exaggerated to serve a political argument. They represent a highly partisan and coloured view of the treaty and the Maastricht process. Those fears exist, although we should separate them in our minds from the parody of objections contrived by those who are not just anti-Maastricht, but fundamentally anti-Europe and are refighting a battle over our entry in the European Community that was won 20 years ago.
Many such fears focus on convergence and the terms under which we move towards economic and monetary union. I do not wish to speak at great length on the convergence criteria as that issue was addressed in detail and with considerable eloquence by my hon. Friend the Member for Oxford, East (Mr. Smith) when he spoke from the Front Bench. However, I shall reinforce his views. I strongly believe that member states' readiness for EMU must be tested, not only by the narrow, financial criteria based on interest and inflation rates, and the fiscal deficit—which are constantly mentioned by the treaty's opponents—but on the readiness and convergence of the real economy.
Two important additional criteria must be considered and must lie at the heart of the convergence process and our approach to it. Those criteria relate to the performance of our economy, notably the levels of unemployment and investment. I strongly echo the repeated calls from Opposition Members for precisely those economic, industrial, training and skill-raising policies of investment in the infrastructure and human resources throughout our economy, which will improve the performance and strength of our economy. That will enable convergence to take place expeditiously and smoothly.
Fulfilling those crucial additional criteria relating to employment and investment is central to the Maastricht-plus programme advocated by Opposition Members. We must ensure the full implementation of the Delors 2 proposals for financing regional development and social cohesion—factors which are so important for the regions of our country, such as the northern district which contains my Hartlepool constituency. We must raise the level of investment and employment throughout the country if we are to secure convergence and succeed in meeting the criteria that will be applied as we move towards economic and monetary union. I hope that Conservative Members and, certainly, Opposition Members will share my view and support the crucial initiatives required to strengthen the competitiveness, performance and investment of the real economy in this country.
In addition to the views and fears expressed about the convergence criteria, two other types of fears and principal objections to the treaty are made, particularly by some of 999 my right hon. and hon. Friends. The first is that EMU would mean a Europe dominated by unaccountable bankers and the second is that, under the treaty's provisions, member states would have to cut public expenditure.
First, I shall address the issue of the so-called bankers' Europe. It is said that the proposed central bank system would have the primary objective of maintaining price stability and counter-inflation policies which, in the view of those who advance that argument, would be deflationary. The system's independence would ensure that it followed policies that could not be influenced. The arguments are presented in a way that leads one to assume that the policies would be uninfluenced by any other economic goal or consideration. Therefore, the entire central banking system would be biased against growth and employment and in favour of tight and rigidly applied monetary policies whose sole aim was deflation. Finally, the relevant national central banks, rather than the European system of central banks, would have to mirror those provisions and be equally independent.
To the best of my ability, I have looked into the matter with care. I have read the treaty and all the comment on it. The argument that I have outlined is based on a selective and misleading reading of the treaty. The proponents of the argument speak about the primary objective of the European central bank system and some have said that that is its only objective. It is easy to slip from one word to the other, from primary to only, transforming the meaning and intent of the treaty.
Article 105 sets out the price stability objective. It also states that the European system of central banks shall support the general economic policies". It does not mention only the narrow monetary aim of attaining price stability but refers to the general economic policies in the Community … as laid down in Article 2. I quoted that at the beginning of my speech.

§ Mr. Shore
The important words are the connecting ones to the objective of price stability and the other aims of the Community. Those important words are without prejudice to the objective of price stability". That is not to say that that is the only aim, but it clearly establishes that it is the major aim, the primary aim, of the European bank.

§ Mr. Mandelson
I quoted the article properly. It refers to The primary objective". I hope that my right hon. Friend will not argue, as was argued earlier by my hon. Friend the Member for Great Grimsby (Mr. Mitchell), that price instability is almost desirable. It has never been my party's approach to policy making to regard price instability as going hand in hand with fast growth and high employment. In my experience, precisely the opposite is the case. Price instability goes hand in hand with unemployment and subsequent deflation.

§ Mr. Shore
That experience is an inevitable consequence of my hon. Friend's age. The only period of price stability that I can remember was during the 1930s when there was mass unemployment. We have not had price 1000 stability under any post-war Government and, as we all know, all periods of price stability have been brought about by massive deflation.

§ Mr. Mandelson
Not for the first time, my right hon. Friend has outclassed or upstaged me in terms of his years. I cannot compete with him on that basis.

§ Mr. Radice
Will my hon. Friend give way?

§ Mr. Mandelson
Of course.

§ Mr. Radice
I remind my hon. Friend of the experience of my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) when he was a Minister in the 1960s. At that time inflation was low, as was unemployment. There can be a relatively stable price system at the same time as relatively low unemployment. That is the experience of our respected right hon. Friend.

§ Mr. Mandelson
I readily—

§ The Chairman
Order. I hope that we shall not explore the 1960s. We are on amendment No. 40.

§ Mr. Mandelson
Speaking on behalf of the forward-looking and modernising—

§ Dame Elaine Kellett-Bowman (Lancaster)
In advance of the 1960s, in the days of Selwyn Lloyd, we had precisely the same phenomenon of stable prices and a prosperous country.

§ Mr. Mandelson
Bring back Selwyn Lloyd, in whatever guise.

§ Dr. Roger Berry (Kingswood)
What policies would my hon. Friend pursue to achieve price stability or zero inflation, and what would be the effect on employment and economic growth of those policies?

§ Mr. Mandelson
I think that that would—

§ The Chairman
Order. The hon. Member should not be tempted down that route.

§ Mr. Mandelson
I shall not be tempted to follow that course, Mr. Morris. I merely refer my hon. Friend to the latest policy documents that have been issued by the Labour party and the policies that will be revealed next week as we prepare our ground for our pre-Budget campaign. I am sure that enlightenment will follow.

§ Mr. Andrew Smith
rose—

§ Mr. Mandelson
I give way to my hon. Friend on the Opposition Front Bench.

§ Mr. Smith
I return to the 1930s, as it were, and to the intervention of my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore). Is it not the case that in the 1930s prices were falling? A central bank operating under the injunction to sustain price stability would have had to adopt an expansionary monetary policy, which would have regenerated the economy, stopped prices falling and been good for employment.

§ Mr. Mandelson
With respect for you, Mr. Morris, I shall not pursue the matter any further. I merely say that the points that have been made in interventions are absolutely right and apposite.
I shall move on to make two final points—

§ Mr. Corbyn
rose—

§ Mr. Mandelson
I shall give way to my hon. Friend.

§ Mr. Corbyn
It is an apposite point—

§ Mr. Mandelson
I am sure that it is.

§ Mr. Corbyn
Will my hon. Friend tell us how he proposes to influence a European central bank that is composed of bankers who are appointed for eight years, who are answerable and accountable to nobody and whose policy objective has been set down? How does he propose to influence them when there is no mechanism to allow that to happen?

§ Mr. Mandelson
My hon. Friend's intervention was genuinely apposite. It can be dealt with now and not over a cup of tea later.
First, decisions and jugments will be taken and made within the framework of a politically determined economic strategy within economic policy guidelines in a way that I have already described. I do not know whether my hon. Friend was present for the earlier part of my speech. These matters would be considered politically within the economic policy guidelines that are a feature of the treaty.
Secondly, such matters would be co-ordinated through the Council of Economic and Finance Ministers. Thirdly, important decisions, such as the control of the exchange rate, would remain with those Ministers, and would be politically controllable to a large extent, albeit in a different way. At the end of the day, decisions would be determined politically and would be in the hands of Ministers. The question is which Ministers, and that is a wider and separate issue which we have dealt with during the debate.
My next point concerns not the system of European central banks but our national central bank. I can imagine no circumstances, and certainly no reading of the treaty, that yields the conclusion or inference that our own national central bank, however independent, would go entirely unconstrained by some element of political control under any Government of any party, just as the German Bundesbank does not go entirely unconstrained by political influence exercised by duly and properly elected Ministers.

§ Mr. Marlow
I thank the hon. Gentleman for giving way. He is being very patient and decent. I draw his attention to article 107 which says: When exercising the powers and carrying out the tasks and duties conferred upon them by this Treaty … neither the ECB, nor a national central bank, nor any member of their decision-making bodies shall seek or take instructions from Community institutions or bodies, from any government of a Member State or from any other body. So how accountable are they?

§ Mr. Mandelson
The truth is that they are somewhat accountable and should be more accountable. It is precisely the aim of the Opposition's policies and proposed amendments to the Bill to increase and enhance that political accountability and to strengthen that political framework within which decisions and the operation of the national central bank, as well as the system, take place.
Just as the German Bundesbank has, by law, to take account of the views of duly elected Ministers and politicians, so would our own independent national central bank, and so, too, would the European system of central banks as a whole.

§ Mr. Budgen
I hope that the hon. Gentleman realises that if that part of the treaty to which my hon. Friend the Member for Northampton, North (Mr. Marlow) referred was amended by the House and the matter was taken back to the German people, they, in their legitimate pride in the independence of the Bundesbank, would without doubt reject the treaty. It is no good pretending and fuzzing this over. Is it not the case that the Bundesbank has an obligation to take account of political views, but it is an independent bank? If the hon. Gentleman and the Labour party seek to alter that independence in the European central bank that will be the end of the treaty.

§ Mr. Mandelson
I do not accept the premise of what the hon. Gentleman says. It is a myth that the Bundesbank is totally independent and entirely uninfluenced by Ministers and by political considerations. I understand why the hon. Gentleman wishes to create that view. He wishes to present the treaty and the Maastricht process as some sort of appalling monster that will devour Economic and Employment Ministers and lay bare the continent of Europe so that the outcome of the implementation of the treaty and the Maastricht process is the exact reverse of what we want to achieve, and what I firmly believe we will achieve if we move towards economic and monetary union and the full and proper implementation of the treaty.

§ Mr. Macdonald
I do not expect my hon. Friend necessarily to agree with my view here, but sometimes the whole question of independence of the central bank is rather exaggerated and overrated. My hon. Friend has already given the example of the German Bundesbank and the way in which it undoubtedly takes some guidance from the German Government. The independence of the American Federal Reserve did not impede the pursuit of a new deal programme in the 1930s by the Democratic party. The Swedish central bank has been independent since, I think, the 16th or the 17th century and that has not impeded the pursuit of socialism in that country. Therefore, the question of independence is sometimes rather exaggerated.

§ Mr. Mandelson
My hon. Friend makes a good point. There is nothing automatic in the creation of a set of institutions which means, as sure as day follows night, that the policy prescriptions will be negative, deflationary or whatever. The fact is that institutions do not automatically or inevitably lead to any development; the political decisions that are made within the economic and monetary framework that is clearly established in the treaty will determine how those institutions perform, and whether they help or hinder the process of employment creation and growth that Opposition Members want.
The first principal objection to the treaty related to the establishment of a "bankers' Europe"—not an attractive term, but one with which we have effectively dealt. [Interruption.] It may not have been dealt with to the satisfaction of all my right hon. and hon. Friends, but it has certainly been dealt with to the satisfaction of my hon. Friend the Member for Durham, North (Mr. Radice), whom I regard as a bit of a pushover. The second principal objection relates to the argument that the implementation of the treaty would result in a cut in public spending.
That, too, does not strike me as an automatic or inevitable consequence of the treaty. It is our job to ensure that it is not. The argument is based on article 104c, which establishes restrictions on Government borrowing under 1003 economic and monetary union and sets a target for the deficit: it should not exceed 3 per cent. of gross domestic product. Overall Government debt should not exceed 60 per cent. of GDP.
It is clear, however, from any reasonable reading of the treaty, and from any reasonable interpretation of the way in which politicians—separately, jointly and severally—might seek to implement its provisions, that the rules are very flexible. The main requirement in relation to the deficit is for progress to be made towards the target.

§ Mr. Rowlands
IMF!

§ Mr. Mandelson
I must say that I would rather have the economic policy guidelines of the European Community and the framework of joint policy making prescribed by the Maastricht treaty than the IMF on my back again.

§ Mr. Winnick
rose—

§ Mr. Denzil Davies
rose—

§ Mr. Mandelson
I give way.

§ The Chairman
Order. The hon. Gentleman must pay attention, and make it clear to whom he is giving way. He sat down without making it clear whom he wished to take the Floor.
The hon. Gentleman has been speaking for nearly an hour. I must ask him to concentrate—but I now understand that he wishes to give way to the hon. Member for Walsall, North (Mr. Winnick).

§ Mr. Winnick
I am grateful to my hon. Friend. It should be said, in all fairness, that he has been subjected to many interventions.
The treaty prescribes a 3 per cent. limit, along with the penalties that would be incurred by Governments who exceeded that limit. The employment position is spelt out in very general terms, but the same does not apply to the 3 per cent. limit. In recent months, a socialist Government in Spain decided to cut public spending substantially, using the 3 per cent. limit although the treaty is not yet in force. They say that they want to implement economic convergence as quickly as possible. If a socialist Government are willing to do that, what would a Government such as ours do if the treaty were in force?

§ Mr. Mandelson
It is an illustration of what the politicians and Ministers in the Spanish Government chose to do. The operative word is "may"—they chose to do it for whatever reason that was relevant either to the circumstances of their domestic economy or to any other consideration. If they pray in aid the treaty's terms, provisions and convergence criteria to justify their actions, that is up to them. The crucial point is that those are political decisions—judgments formed by Ministers.
Such decisions should not be taken under the treaty in isolation from any other consideration of the economic policy, guidelines, and framework prescribed by the treaty, and it is up to national Governments to make it clear that they see the 3 per cent. deficit target as something at which they will aim and make progress towards, but which will not be rigidly applied—as is their right. It would only be operable over the time of an economic cycle.

§ Mr. Denzil Davies
rose—

§ Mr. Mandelson
I am sorry, but it is 25 minutes past nine—and although you, Mr. Morris, were not fair when you said that I had been speaking for one hour—

§ The Chairman
Order. I said that the hon. Gentleman had been speaking for nearly one hour.

§ Mr. Mandelson
Nearly right, Mr. Morris. Before I use up any more of your patience, I will conclude—if you do not mind.—[Laughter.] I said "if you do not mind" because I have received some encouragement to speak considerably longer, with what ulterior motive I do not know and can only guess at.
I will make three points in conclusion. First, our overriding aim is to make the treaty and the whole Maastricht process into what most of its authors wanted—an engine for sustainable growth, not an instrument of deflation in this country or any other member state. Taking the requirement of economic policy co-ordination, a medium length of time, and the properly defined nature of the convergence criteria described gives us the scope to pursue policies that will achieve that objective in practice.
Secondly, the treaty is not a set of commands. It is not immutable. Its terms are not set in tablets of stone. The treaty specifically provides for the further development of its provisions—for example, the replacement of the protocol of convergence by appropriate measures to govern the operation of convergence in practice. The treaty is capable of change, of evolving, and of being turned into an instrument of our need and desire to serve our national purposes and those of the Community.
Above all—and I make no apology for concluding on this point—it is the political nature of national Governments and the political balance of forces within Europe that will determine the success or otherwise of the Maastricht project. It is not the dots, commas, and every letter of the treaty's articles and titles that will determine whether the project is a success. That will depend on politicians taking political decisions, having formed political judgments.
Maastricht is an instrument to be used, honed, developed and bent to the economic needs of the Community. On that basis, I regard it not only as a wholly necessary and desirable further stage in the evolution of the Community of which I want this country to be at the heart but an absolutely necessary and important condition for the economic progress within this country that I and members of my party want to achieve.

§ Mr. Whitney
I am happy to join the hon. Member for Hartlepool (Mr. Mandelson) in welcoming the Maastricht agreement and to endorse the emphasis that he placed throughout on the need to fight unemployment. But that objective—which all Conservative Members share—is in direct conflict with the support of the hon. Gentleman and his party for the provisions of the social chapter: whatever the extent of its impact, that chapter will undoubtedly have a negative impact on employment.
I agree that the Committee should reject the amendments in the group, which are of a broad and sweeping nature and which, in effect, amount to a rejection of the Bill. I find that surprising, given that not so long ago, on Second Reading, the House voted by a majority of 244 for the principle of the Bill. Moreover, all three major parties fought the general election on a campaign programme that endorsed the Maastricht treaty.
1005 Both today and in our debates before Christmas we have heard hon. Members—and some right hon. Members—on both sides of the House attempt not only to stop the clock but actually to move it back. Some hon. Members have a long tradition of being wrong about Britain's role in Europe. I am more concerned about the position of hon. Members who, over the years, have voted to support Britain's adherence to the treaty of Rome, the Single European Act, qualified majority voting and the rest—which we have already discussed at length this evening and on which I shall not therefore dwell—but who are now finding excuses to move away from the position that they endorsed.

§ Mr. Bill Walker
I do not rise to defend myself, because I am not one whose position has changed. I should have thought, however, that the essential ingredient of parliamentary democracy is that when hon. Members think that something is wrong, they should admit to it and say, "Perhaps I made a mistake." If we do not do that, what is the point of our debates?

§ Mr. Whitney
I am happy to agree with my hon. Friend the Member for Tayside, North (Mr. Walker). But most of us find those hon. Members' position odd because at the time when they voted to support Britain's involvement, the arguments for our playing a positive role in Europe were somewhat weaker than they are now. As the years go by and as views in Europe develop, the argument for Britain's playing the part in Europe that the Government advocate for it grows stronger.
Of course we understand concerns about "federalism", which I would call centralisation—there is a translation problem because the word "federal" means different things to different nationalities. But there is and always will be an unashamed battle between those who envisage a centralist western Europe and those of us who do not. We should remember the lessons of the past 12 months—the success of Maastricht and the achievement of turning it away from the direction in which the original Dutch draft was headed and into the agreement that finally emerged. Public opinion has been demonstrated not only in the Danish referendum and the French vote but in Germany and in many other parts of Europe and there is clearly a strong feeling that people do not wish their national identities to be submerged. That should encourage my hon. Friend the Member for Tayside, North and any other doubter who believes that the Maastricht process is a remorseless juggernaut moving in one direction alone.
Some of my hon. Friends give the impression that they are living in a cloud of their own making. For example, my hon. Friend the Member for Worcestershire, South (Mr. Spicer) spoke of the abolition of the nation state. I wonder where he has been for the past 10 or 12 months. Let him go to France and tell any Frenchman that he voted for Maastricht, albeit narrowly. We understand that the French referendum involved many other issues and was certainly not on the Maastricht treaty. If my hon. Friends suggested to any Frenchman that he was moving towards the evolution of the nation state, my hon. Friends know the sort of answer that they would get. The achievements must not be underrated.
The concept of subsidiarity was an easy concept to mock. Subsidiarity is a difficult word. No one could find a satisfactory substitute for it. Gradually, as a result of the 1006 steps that were taken and the efforts led by my right hon. Friends on the Front Bench, the concept of subsidiarity has been accepted as part of the European scene, and increasingly will be so. We should take account of that and take pleasure in it. No one can deny that there will be difficulties in converging the existing 12 member states and in enlarging the Community in the future, but the objective is worth while and important.
It is important that the House considers carefully this Bill, which, although it is short, is undoubtedly crucial. The procedural difficulties in the Bill are not great, and the impact of unnecessary delays in the passage of the Bill is sometimes overlooked by some hon. Members.

§ Mr. Spearing
I agree that the Bill is short. Does the hon. Gentleman agree with the analogy that it is nothing but a pipeline which connects us legally to the obligations in the treaty? Does that not mean that we need to examine carefully the complex legal obligations, especially those contained in the titles which we are now debating? Ideally, we should re-examine the treaty line by line and find out what it is about. Without such an examination, we do not know what the treaty is about.

§ Mr. Whitney
We all know that too much logic leads to serious trouble. If the hon. Gentleman pursued his argument to the logical conclusion, we would not stop at the 130 pages in the Maastricht treaty. Almost every paragraph in the treaty takes us back to the treaty of Rome, so this treaty must be limited. We want to amend the appropriate parts of the British law. Although that fundamental is important, no one argues with it. The fundamentals are finite and manageable in parliamentary terms within a reasonable number of hours. They do not extend the time unnecessarily. We have been extremely generous in the progress that we have already made.
It is important for those hon. and right hon. Members on both sides who are inclined to delay such events to take into account the national interests of Britain. In a letter to The Times on 2 November 1992, the president of the Confederation of British Industry and 27 top leaders of British industry asked for an early passage of the Bill. In the letter they pointed out: Continuing uncertainty over the Maastricht treaty and our future in Europe is already having a damaging effect. Without a clear message soon from Parliament, political uncertainty will translate into more lost output and unemployment. I beseech my hon. Friends to take account of that message. Sir Michael Angus and his friends speak from the business and commercial point of view. While I dwell on the letter, I point out that Sir Michael Angus and his friends also emphasise: The single market is more than a free trade area: it requires regulation and enforcement to ensure that barriers to competition are removed. The ratification of Maastricht will assist the development of that regulatory framework and will help to ensure that the single market continues to move forward. Since then we have passed the date at which the single market is, at least theoretically, in operation. Yet we have still to make significant progress in the ratification of the treaty.
That plea from the leaders of British industry about the economy and tackling unemployment should not go unheard by any of us in the House. Some of the comments that we have heard today and in earlier debates from those who are doubtful about and hostile to Maastricht betray 1007 a lack of confidence in our country. I know that they wish to stand up for British interests, but they display a lack of faith in our ability to do so.
For example, I reject the idea that for years to come we shall never put the economy of Britain into a state in which we can look in the eye the economies of continental Europe and, therefore, in due course rejoin the ERM and adopt a single currency. But that is for the future. Certainly, today we must ensure that we do not retreat and say that we cannot compete with our partners in the European Community. We most definitely can.
It is an odd arrangement that some of my hon. Friends say, "This is going too far; all that we would like is a free trade area", when our erstwhile partners in the European Free Trade Association are passing us coming the other way. Just as we seem to want to move into the outer corridors of the European Community, we meet the Swedes and all the rest coming in. They have understood the benefits of the European Community as it now is. It would be odd if we moved in the opposite direction.
The concept that the European Community has only ever involved trade and economic affairs is false. The treaty of Rome, for accession to which virtually all my hon. Friends who now object to Maastricht voted, referred to an ever closer union. That was the original concept of the treaty of Rome in 1958.
I refer the Committee to a far-sighted statement made by a Head of Government some eight or nine years ago which said: It must be our objective to aim beyond the Common Commercial Policy through Political Cooperation towards a common approach to external affairs … This means giving greater depth to the Community both in its internal and external activities. The message concluded that we should
take the necessary steps to strengthen the voice of the Community and make its influence felt in the world; heighten the consciousness among our citizens of what united us". The current word is vision. That was a statement of vision. That statement was made on 25 June 1984 by Baroness Thatcher. She was right then. Those aims should certainly remain our objective. I hope that from time to time Lady Thatcher will take down from her archives that memorandum and remind herself of the foresight and vision that she demonstrated to the other Heads of Government eight and a half years ago.
In the interests of furthering the debate, I do not wish to prolong my speech. I merely wish to say that the single market that we have put into operation has underlined even more the need to make progress on ratification of the Maastricht treaty. It underlines the dangers that unnecessary delay would cause to Britain's national interests.
Finally, we must concentrate on Britain's national interests and not on those of Denmark—they are the responsibility of the Danish legislators and their people. We have our own interests and we should have our own timetable, which should be a steady, but relatively rapid, approval of this excellent treaty.

§ Mr. Denzil Davies
Because of the nature of the amendments, the debate has ranged over practically all of title II. Someone like myself, who has been in the House for 20 years and has sat through many such debates, may 1008 be surprised at the transformation in the attitude of so many hon. Members on both sides of the House to the European Economic Community, or the Common Market as it used to be called when I came to the House.
I remember 1972, when a demoralised Conservative party, frightened of the unions at Upper Clyde and having ditched Selsdon Man in the first two years of the Administration, was persuaded by the then Prime Minister and a few of the zealots around him that the treaty of Rome was only about trade and economics. They believed him for some time.
We moved on to the Single European Act—as it is rather oddly called—and again a Conservative Prime Minister was able to convince himself, perhaps, and the rest of the Conservative party that the Single European Act was only about free trade. Somewhere between that Act and the Maastricht treaty, a large section of the Conservative party has realised that it is all about union. The treaty may be about economics and about trade, but it is far more than that—it is about union.
I remember saying that the Celts recognise unions—they can sniff them out and they know them when they see them. The English do not know much about unions, but a large section of the Conservative party has now realised that the Maastricht treaty is about union, as was the Single European Act and the original treaty of Rome.
The hon. Member for Worcestershire, South (Mr. Spicer), who is not in the Chamber, tried to justify—as other Conservative Members who were in the House in 1972 have—his support for the treaty of Rome and for the Single European Act and his opposition to the Maastricht treaty. I understand his attempts at justification.
The treaty is a substantial step on the road to union, but it is not basically very different from what went on before. Perhaps I shall be in the House for the single European final act—the final solution. There will be another Act—there has to be, because the structure that is being set up is neither fish nor fowl.
We have spent a long time arguing whether the treaty is federal. What is it? No one quite knows, except that we know that it will mean the transfer of a substantial amount of democracy. We do not have to use the old-fashioned word sovereignty if we do not want to. The treaty will transfer a substantial amount of democracy from the Parliaments and elected Governments of all 12 countries to non-democratic institutions. That is a fact and it may or may not be a good thing for some people. There will be a significant transfer of power to the European central bank and to the Commission to the detriment of democratic accountability.
Matters have been mapped out in a brilliant fashion. Those who are behind the policy know that pressure is bound to increase to relieve the democratic deficit, as it is called. They will attempt to do that by increasing the powers of the European Parliament and by setting up some kind of executive. All that will reduce still further the powers of national Parliaments. That will lie behind the final Act and I may still be in the House when it is introduced. If we still have a Conservative Government then, no doubt the Prime Minister will make speeches at Tory party conferences to assure people that, although our sovereignty may go, our national identity will be retained. I remember the little old lady from the Scilly Isles who asked the present Prime Minister not to lose our national identity in a federal Europe; he was happy to reassure her about that.
1009 The Scots will still be able to wear funny skirts and Welsh ladies will still be able to wear their top hats. All the trappings of national identity will remain, but the object of the exercise will be the transfer of sovereignty.
We have seen a transformation in attitudes in the Conservative party and we have seen a similar transformation within the Labour party, as was evident from excellent speeches tonight. That transformation has come about because of the demoralisation of our party. Apparently, somehow, salvation now lies in economic and monetary union.
The amendments tabled by my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) relate to article 2, which has come as manna from heaven for some of our pro-marketeers. We have all seen the briefings—they were not very good—that have been distributed about it. Article 2 is the one on to which the pro-marketeers have decided to latch and to speak. My hon. Friend the Member for Oxford, East (Mr. Smith) made a fair fist of it, as did a number of my other hon. Friends. In fact, considering how bad the case is for that article, my hon. Friends did remarkably well.
Perhaps my hon. Friends should take a close look at the language of that article because they will discover that it does not help them very much. They may think that it does, but let us consider the three phrases that deal with economic matters. First, we are told that everyone agrees with a great degree of convergence, but convergence is defined only later in the treaty. There is no convergence on unemployment—[Interruption.]

§ The Chairman
Order. I ask hon. Members to recognise that the Committee has grown somewhat in size. They should have the courtesy to listen to the right hon. Member for Llanelli (Mr. Davies).

§ Mr. Davies
I am grateful for that protection and assistance, Mr. Morris.
The only convergence with which the treaty deals is the convergence of inflation and budget deficits. I do not believe that there can be any other "meaningful" convergence, because if the intention is to arrive, finally, at a single currency—basically that is what economic and monetary union is about—those are the only convergence indicators that we can have.
My hon. Friends who are in favour of article 2 are attempting to write another treaty. They have attempted to convince themselves that if the Labour party had negotiated this treaty, it would have included different convergence indicators. However, we would never have come to a common or single currency with any other convergence indicators, because that would have made no sense. We would never have reached the goal that some of my hon. Friends and many in the Conservative party now, apparently, wish to achieve.
Only two basic convergence indicators are relevant to a single currency—practically abolishing inflation in all member states, and locking the currencies together, thus reducing the budget deficits so that we can move towards a single currency. On the question of a high degree of convergence, we on this side of the argument are whistling in the wind. Some of my hon. Friends believe that, somehow, we can slide out of the convergence indicators.
Much has been made of the term "price stability". Indeed, one or two of my hon. Friends said, "Surely you are not in favour of price instability." Of course we are not 1010 in favour of price instability. The whole section of this treaty dealing with economic and monetary union is lifted from the treaty of the German Bundesbank. The words are exactly the same. The term "price stability" is to be found there, and there is nothing wrong in that. Price stability is what we are going to have here. But it will take effort and pain to achieve the goal of economic and monetary union. Price stability is essential and it means no inflation—[Interruption.]

§ Mr. Nicholas Winterton
On a point of order, Mr. Morris. The right hon. Gentleman who is addressing the Committee has been a distinguished Labour party spokesman on Treasury matters and hon. Members are entitled to hear him. He is making a very valuable contribution to the debate and I hope that right hon. and hon. Members on both sides of the Committee will behave in a more seemly manner.

§ The Chairman
I am grateful to the hon. Gentleman for his remarks.

§ Mr. Davies
Price stability is obviously essential to the treaty. I submit that the words "high degree of convergence" do not assist my hon. Friends who have mounted this exercise of pretending that, somehow, the Maastricht treaty is something that the Labour party can support.
The next part of article 2 refers to "non-inflationary growth". We are all in favour of non-inflationary growth. It is marvellous. I am sure that this is not the right time for a philosophical discussion of inflation and growth, but I see that the Financial Secretary to the Treasury is present. People in the Treasury read and talk about these things all the time. It is very doubtful whether Essex man or woman or western society is really prepared to accept non-inflationary growth. Indeed, is it possible to have non-inflationary growth in consumer-based, service-based economies such as we have today?
I am glad to see that the Prime Minister has arrived. He does not believe in non-inflationary growth. He did at one time, but he became frightened. He realised that, as inflation came down, growth stopped and unemployment increased. The southern England constituency—not northern England or middle England or south Wales or Scotland, but the whole great service industry, consumer constituency of the south of England—suddenly realised that it wanted inflation. Essex man and Essex woman cannot live without inflation. They need to see house prices going up. The service industries for which they work cannot increase productivity, so if is they are to have more money they must have inflation. So the Prime Minister does not believe in non-inflationary growth. But apparently the Labour party does. Apparently, many of my hon. Friends now believe in non-inflationary growth. The choice in the treaty is not between inflationary and non-inflationary growth but between low inflation and no growth. That is what is really behind the words of the treaty. If we cannot have growth without inflation, we shall have no growth. Some people believe that, provided that inflation can be reduced to zero, jobs will magically be created.

§ Mr. Dorrell
indicated assent.

§ Mr. Davies
The Financial Secretary nods again. The Treasury has obviously been holding seminars and has been converted. The Prime Minister does not agree with 1011 any of it, but the present Financial Secretary apparently does. We cannot have non-inflationary growth in today's western capitalist economies. In the 1930s, it was possible to have some growth and deflation.

Mr. Derrell
indicated assent.

§ Mr. Davies
The Financial Secretary nods again. The lessons have been going well. Perhaps the same people have been briefing us.