TREATY ON EUROPEAN UNION

HC Deb 14 January 1993 vol 216 cc1096-159

Amendment proposed [13 January]: No. 40, in page 1, line 9, leave out 'II,'.—[Mr. Cash.]

Question again proposed, That the amendment be made.

5.43 pm

The Second Deputy Chairman of Ways and Means (Dame Janet Fookes)

I remind the Committee that we are also considering the following amendments:

No. 323, in page 1, line 9, leave out 'II'.

No. 11, in page 1, line 9, after 'II', insert '(except Article 2 on page 9 of Cm 1934)'.

No. 17, in page 1, line 9, after 'II', insert '(except Article 138a on pager 41 of Cm 1934)'.

No. 116, in page 1, line 9, after 'II', insert '(other than the following provisions set out under Article G—

• Paragraph A (1)
• Paragraph B (2)
• Paragraph B (3)
• Paragraph B (4)
• Paragraph B (5)
• Paragraph B (7)
• Paragraph C

Paragraph D (10), (11), (12), (14), (15), (16), (17), (19), (20), (22), (23), (25), (26), (27), (28), (29), (30), (31), (32), (33), (34), (35), (37), (38)—except Articles 130, 130r, 130s and Title XVII) (39), (40), (41—except Article 138e) (45), (47), (48), (49), (50), (56), (57), (60), (61), (62), (63), (67), (69), (70), (71), (79), (80), (81), (83), and (84).'.

No. 124, in page 1, line 9, after 'II', insert '(excluding Article G B on page 9 to 11 of Cm 1934.)'.

No. 234, in page 1, line 9, after 'II' insert 'except' Article 138a'.

No. 91, in page 1, line 9, leave out 'III'.

No. 20, in page 1, line 9, after 'II', insert 'except Article 73g (2) on page 14 of Cm.1934'.

No. 92, in page 1, line 9, leave out 'IV'.

No. 146, in page 1, line 10, after '1992', insert 'but not Article 1 in Title IV thereof'.

No. 183, in page 1, line 10, after '1992', insert 'but not Article Q in Title VII thereof'.

No. 122, in page 1, line 10, leave out from '1992' to 'and' in line 11.

No. 117, in page 1, line 12, after 'Protocols', insert 'other than—

1. '(a) The Protocol on the Statute of the European System of Central Banks and of the European Central Bank
2. (b) The Protocol on the Excessive Deficit Procedure
3. (c) The Protocol on the Convergence Criteria referred to in Article 109 of the Treaty establishing the European Community
4. (d) The Protocol amending the Protocol on the Privileges and Immunity of the European Community
5. (e) The Protocol on the Transition to the Third Stage of Economic and Monetary Union
6. (f) The Protocol on Certain Provisions relating to the United Kingdom of Great Britain and Northern Ireland
7. (g) The Protocol on Social Policy

[The Second Deputy Chairman of Ways and Means]

(h) The Protocol on Economic and Social Cohesion.'.

New Clause 10—Report of European Council— '.—After the European Council has submitted its report after each of its meetings, Her Majesty's Government shall publish and lay such reports, and those annual reports in writing, as required by Title 1, Article D of the Treaty on European Union before Parliament, together with a statement as to their policy and performance in respect of the activities of the Union and their policies for its future.'.

Mr. Roger Knapman (Stroud)

On a point of order, Dame Janet. Can you say for certain whether this is the Committee stage of the Bill, because it seems that my colleagues are not being called to speak unless they have given their names to the Chairman of the Committee beforehand? Is there any precedent for that during the Committee stage of any Bill?

The Second Deputy Chairman

That is entirely a matter for the Chairman. There is no such arrangement, although the hon. Gentlemen seems to think that there is. If Members wish to be called, they are not obliged to write in beforehand.

Mr. Knapman

You will be aware, Dame Janet, that many hon. Gentlemen and Ladies wish to speak to this group of amendments who have not given their names. I take it from your answer that their efforts will not be prejudiced in any way.

The Second Deputy Chairman

The main prejudice will come from those hon. Members who speak for such a long time that it makes it more difficult for others to speak, and not from any action by the Chair.

Mr. Nigel Spearing (Newham, South)

On a point of order, Dame Janet. I am acting on the assumption that the procedures of this Committee are not dissimilar in principle to those in a Committee upstairs and that they only vary slightly in practice. You will know, as all hon. Members do, that it is not infrequent for more than one Minister to be a member of a Committee upstairs. You may also know, from conversations with colleagues, that the Minister of State, Foreign and Commonwealth Office, who I am glad to see present, has given notice that his hon. Friend the Financial Secretary to the Treasury is likely to reply to the debate on financial matters. You will also recall that the Minister spoke third in the debate and that many hon. Members—all but the hon. Member for Stafford (Mr. Cash)—have asked questions relating to foreign affairs and international law. We hope that no decision will be made that would prejudice the Minister of State having the opportunity to contribute again so that he may reply to those questions before the debate is concluded. He might have to indicate a willingness to do so, but without his reply the debate would be incomplete.

The Second Deputy Chairman

I cannot prejudge who may wish to catch my eye.

Sir Teddy Taylor (Southend, East)

On a point of order, Dame Janet. The Leader of the House suggested a few minutes ago that I should raise this matter on a point of order. As you will know, he announced that three days will be allocated to discussion of the Bill next week, and it seems that, because of the strength of feeling expressed, even longer might have to be allocated during the following week. I was grateful, as I am sure were all hon. Members, that you and your colleagues decided to allow us to debate a clause dealing with a referendum, tabled by my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd). Could you consider our debating that new clause earlier, rather than at the end of the proceedings? There seems to be a widespread feeling that if that new clause were considered and agreed to, the proceedings on this important Bill might be completed quickly instead of taking a considerable time.

Mr. Bob Cryer (Bradford, South)

Further to that point of order, Dame Janet. I have tabled several amendments to the Bill concerning a referendum and I endorse the view expressed by the hon. Member for Southend, East (Sir T. Taylor) that discussion of this lengthy Bill, which we must examine in great detail if a proper examination is to be undertaken, could well be curtailed. If it were decided, through an amendment, to provide the public with the opportunity to have a referendum, one would hope that the debate would shift to a much wider auditorium than this place—to the nation at large. Most decent, sensible democrats would welcome that. I endorse the view that the democratic procedures would benefit if an amendment or new clause were to be debated and passed, to allow the public the opportunity to join in the debate—a debate whose structure will inevitably be curtailed until the decision is made. An early decision on a referendum would be very welcome, not only here, but outside by the majority of the population. They have seen the Danes have a referendum in Denmark and they are asking, "Why can't we have a referendum about this important issue?"

Several hon. Members

rose—

The Second Deputy Chairman

I think that I can deal with that point of order now. It is not for the Chair to vary the normal order in which amendments are taken.

Mr. Bill Walker (Tayside, North)

On a point of order, Dame Janet. I am not complaining about the length of speeches because so far they have been interesting and instructive and I have listened to most of them. This legislation is important and I want to draw your attention to the fact that it is important to all parts of the United Kingdom, and particularly to Scotland, which enjoys a unique relationship within this unitary Parliament, brought about by the union that really matters, the Union of the United Kingdom. Therefore, it is important for the people of Scotland to understand that their views are being heard, listened to and noted in this Parliament.

The Second Deputy Chairman

I am afraid that that is not a point of order for the Chair, although it might be an interesting observation.

Mr. Tim Devlin (Stockton, South)

On a point of order, Dame Janet. Would it not assist the House if those hon. Members who are calling for the debate on a referendum clause to be brought forward—many of them have also tabled many amendments that are designed to keep the Bill going in the House for as long as possible—[Interruption.]

The Second Deputy Chairman

Order. Hon. Members may not like the views being expressed, but the hon. Gentleman has the right to express them, providing that they take the form of a point of order.

Mr. Devlin

The point of order is that if some of those hon. Members who have tabled a large number of amendments wish to bring forward an amendment for an early vote, could they not do so by withdrawing the considerable number of amendments that they have already tabled?

The Second Deputy Chairman

That is not a point of order for the Chair.

Mr. Tony Marlow (Northampton, North)

On a point of order, Dame Janet. I know that you would always want to be helpful to the House and this is an opportunity for you to be very helpful. This is a wide-ranging and important debate, which covers the vast bulk of the treaty. There have been many debates on the Maastricht treaty, but many hon. Members would like to catch your eye today and some have been unable to catch eyes in previous debates.

This may be the most important and wide-ranging debate on the Bill. It is unlikely that the Government would wish to curtail today's debate, but if they have told you that they will seek—God forbid—to move a closure motion at some stage today, quite inappropriately, could you tell the House now at what time the Government will seek to close the debate so that hon. Members can make their contribution within that time scale?

The Second Deputy Chairman

I remain in blissful ignorance of the Government's intentions.

Mr. Richard Shepherd (Aldridge-Brownhills)

On a point of order, Dame Janet. This is the most important constitutional Bill since I have been in the House. It seeks to take large powers from the people of this country and reduce the position of the Executive and its accountability to the nation. I seek clarification on the observation that you made, which seemed to indicate that, because of the complex and difficult matters under discussion, if a speech is lengthy and ranges across the amendments before us, it curtails other Members' ability to make representations on behalf of their constituents. It therefore curtails free speech on this major constitutional arrangement.

Are you saying that an hon. Member who speaks in order for a long time will curtail the ability of other hon. Members to speak? Is that a new Committee ruling which we must bear in mind while trying to debate these great issues?

The Second Deputy Chairman

I have no such grandiose ideas in mind. I was merely making the common-sense observation that if hon. Members want to talk this afternoon, it is likely to be easier if they make shorter rather than longer speeches. However, that is not for the Chair to determine.

Mr. Quentin Davies (Stamford and Spalding)

On a point of order, Dame Janet. Is it not particularly perverse of hon. Members who have a stated commitment to the principle of parliamentary sovereignty—I know how sincere that commitment is on the part of the hon. Member for Bradford, South (Mr. Cryer) and my hon. Friend the Member for Southend, East (Sir T. Taylor)—to suggest that, if there were a referendum on the Maastricht treaty, we would somehow be able to curtail our discussion of the Bill now? If one believes in parliamentary scrutiny and if there is to be a referendum, it is particularly important that we should thoroughly examine—

The Second Deputy Chairman

Order. That is clearly not a point of order but rather an observation.

Rev. Ian Paisley (Antrim, North)

On a point of order, Dame Janet. Can you help me? I have sat through all the debates on this treaty. How can a Member from another part of the United Kingdom—Northern Ireland—make a contribution? I have approached the Chair, but have not been satisfied. I have been a Member of the House for 22 years and have never had to put down my name to speak in Committee. If one was present and stood up, one was likely to be called to speak. Can you assure hon. Members from Northern Ireland that, at some time during the debate, at least one of them will be called?

The Second Deputy Chairman

May I make it clear that there is no obligation on any Member during the Committee stage, or in any debate whatever, to put down his or her name in advance. I have tried to take note of those who rise in their places when one speaker gives way to another.

Mr. Knapman

On a point of order, Dame Janet. Can you confirm that, when a closure motion was moved in Committee before Christmas, although Members representing Welsh, Scottish and Northern Ireland constituencies were present—the Bill affects the whole of the United Kingdom—no hon. Member from any of those three countries was invited to speak prior to the closure. We have had three statements this afternoon and it is now 6 o'clock, so it will be a short debating day. Is that likely to occur again or will hon. Members from those other parts of the United Kingdom have a chance to speak on this occasion?

The Second Deputy Chairman

I remind the hon. Gentleman that the Member who would have the Floor now, but for the points of order, represents Wales.

Mr. Bill Walker

Further to the previous point of order that I tried to make but failed so miserably, Dame Janet. In your position as guardian of the interests of Back Benchers in Parliament, you will sometimes be required to accept or reject closure motions. Will you bear in mind the interests of the whole of the United Kingdom? I do not make a frivolous point because we know of the separatist movements within the United Kingdom, which wish to break up this unitary Parliament and the United Kingdom. The strongest card that we have to play against them is to ensure that the interests of parts of the United Kingdom such as Scotland are well looked after in the Chamber. If, by chance and for whatever reason, hon. Members are not called, separatists can use that as a device to claim that their interests are not being catered for. I draw your attention to that aspect on closure motions with respect and hope that you will bear it in mind.

The Second Deputy Chairman

I hope that I shall not be found wanting in my duties in that regard. However, we can best help by resuming the debate.

Mr. Denzil Davies (Llanelli)

I am grateful to you, Dame Janet, for reminding the Committee that we are debating the first batch of amendments on the amendment paper.

As the House was full last night when I commenced my speech and as every hon. Member was listening intently, I have no intention of wasting time going over the same ground. I know that the Minister of State, Foreign and Commonwealth Office, the right hon. Member for Watford (Mr. Garel-Jones), will be disappointed, but I shall merely summarise what I said, especially in relation to amendment No. 17, which is the third amendment in the batch and was discussed by my hon. Friend the Member for Oxford, East (Mr. Smith).

Before the House heard last night's statement on Iraq, I was arguing that, far from assisting those of my hon. Friends who are in favour of the treaty, I understood article 2 to do the opposite. Although they may have thought that article 2 was better than a fig leaf covering all the ghastly following articles, it is all of a part with the rest of the treaty. To borrow a phrase from the old days of nuclear defence, the treaty is a "seamless web", starting with article 2 and continuing in that vein.

Some of my hon. Friend's speeches did not show proper respect for those who drafted the treaty. I never cease to admire the intellectual power of those who drafted it. I do not know who they are and I do not make a cynical or sarcastic point. I never cease to admire the intellectual elegance, despite the convoluted language, of the manner in which the matter has been framed. It has been thought out carefully from the beginning and the articles all fit in and work their way through to a conclusion. We should therefore not be flippant about the treaty and say that it does not mean this or that. It has been carefully and diligently thought out.

Article 2 contains three phrases dealing with economic matters, to which my hon. Friend the Member for Oxford, East and other hon. Friends referred. Indeed, they referred to them as though they would have liked them to be in the Labour party manifesto. I was a little worried about that. The first phrase—and the most difficult—is a high degree of convergence". My hon. Friend the Member for Oxford, East seemed to be saying that we were in favour of a high degree of convergence. The only convergence indicators that I can find as I look through the treaty are the reduction of inflation down to price stability—a euphemism for almost zero inflation—the reduction of budget deficits to 3 per cent. and 60 per cent., and the eventual locking of exchange rates.

6 pm

As I tried to argue last night, I do not agree with the treaty, but I understand that those convergence indicators are major factors. If the treaty wants to achieve a single currency in the foreseeable future—be it 1999 or 2001—and if it is to contain all the other convergence indicators that Opposition Members would want it to contain, such as gross domestic product, unemployment and income per capita, we shall never arrive at the ultimate goal of a single currency and economic and monetary union.

Mr. David Winnick (Walsall, North)

Like my right hon. Friend, I oppose the Bill and the treaty on many grounds, not least economic and political sovereignty, which would be substantially eroded if the measure were passed, but would not those in our own ranks—if not Conservative Members—who are in favour of the measure have improved their case had they said that they were in favour of what was agreed in the Maastricht treaty but could not in any circumstances support limiting GDP, which would substantially reduce public spending? That result would in turn give right-wing Governments further ammunition in their fight to introduce measures which would undoubtedly increase unemployment and lead to further deflation.

Mr. Davies

My hon. Friend makes an important point. I shall come to the issue of excessive deficits, which was discussed at some length in yesterday's debate.

The next economic indicator referred to in article 2 is high employment. My hon. Friends made much of the phrase "high employment". My hon. Friend the Member for Western Isles (Mr. Macdonald) thumbed through the treaty and found quite a few references not merely to high employment, but to "lasting high employment"—or was it "high and lasting employment?" I am not sure how the words were positioned.

We are all in favour of high employment. The treaty does not say anything about full employment, and I should be surprised if it did. It may mention unemployment somewhere. I see my hon. Friend the Member for Western Isles thumbing through the treaty to see if he can find such a reference. I shall be surprised if he does. The Minister of State, Foreign and Commonwealth Office, the right hon. Member for Watford, who knows how the treaty was drafted, is smiling.

Sir Teddy Taylor

Will the hon. Gentleman ask his hon. Friend the Member for Western Isles (Mr. Macdonald) to check by how much unemployment has increased in the European Economic Community compared with every other developed part of the world? That would give the right hon. Gentleman something to think about.

Mr. Davies

I am sure that my hon. Friend the Member for Western Isles will deal with that issue. I was making a somewhat arid and textual point and saying that those who draft such measures are clever and understand what they are about. They would never mention unemployment. The monetarists—I do not use the word in a pejorative sense as I believe that monetary controls have a vital role to play in an economic system—believe that unemployment takes care of itself, so their only concern is to control inflation.

The phrase "high employment" is carefully chosen. Of course, everyone is in favour of high employment and the Government maintain that we now have it in Britain. My hon. Friend the Member for Great Grimsby (Mr. Mitchell) laughs, but about 90 per cent. of what we used to call the insurable population—the employable population—are in fact employed. The Government have also maintained that there are more people in work now than at any other time. They even say that about Wales, where unemployment is high. The phrase "high employment" is carefully chosen by the clever people who draft such measures. The Minister of State smiles—I am not referring to him, although I am sure that he played a major part in drafting the treaty.

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

I am smiling because I think that the right hon. Gentleman is trying to imply that he is not a clever person but merely a common man speaking up. We all know better than that.

Mr. Davies

That is not what I was implying. I was merely stating that the phrase "high employment" was carefully chosen. If the unemployment level increased to 20 per cent. and 80 per cent. of the population was employed, many people would argue that that was high employment. I do not know the level at which it ceases to be high employment—that is a matter of debate.

I am sorry to say to my hon. Friends the Members for Hartlepool (Mr. Mandelson) and for Oxford, East and others that I do not think that there is much salvation or assistance in the phrase "high employment", which is part of the seamless web of the treaty.

Mr. Austin Mitchell (Great Grimsby)

Further to my hon. Friend's point, could not the Government defend the present disastrously high level of unemployment as "high employment" and do they not indeed do so?

Mr. Davies

That is the very point I was trying to make. Until one starts discussing very low levels of employment—perhaps lower than 90 per cent.—the matter is subjective.

Mr. Calum Macdonald (Western Isles)

I believe that my right hon. Friend is trying to distinguish between full employment and high employment, and is complaining that although the treaty refers to "high employment" it makes no mention of full employment. Will he define full employment? Does it mean 100 per cent. employment? If not, surely we are talking about high employment.

Mr. Davies

I am not distinguishing between high and full employment. I would have made the point that when we talk of full employment we all know that it is not 100 per cent. employment. I was merely arguing that the phrase "high employment" was chosen carefully because those who drafted the treaty did not wish it to make a specific commitment on unemployment. The thinking behind monetarist strategy—certainly as developed by the theorists in Europe in the 1980s, although it may be changing in the 1990s—is that employment takes care of itself.

Mr. Macdonald

Will my right hon. Friend give way?

Mr. Davies

No; my hon. Friend can make his own speech. I have made my point.

I shall not repeat what I said last night about non-inflationary growth, but some of my hon. Friends have gone to town on the subject. My hon. Friend the Member for Hartlepool—who can perhaps be described as a member of the modernising tendency of the Labour party—wanted the subject to be contained in the Labour party manifesto. He said that everyone was in favour of non-inflationary growth. I noticed that as his speech and that of my hon. Friend the Member for Oxford, East progressed, the term "non-inflationary growth" was dropped in favour of the word "growth". However, before one achieves non-inflationary growth one must have non-inflation. Those with modernist tendencies must be careful.

I am not sure about non-inflationary growth. I do not think that the residents of Hartlepool who own houses that they are trying to sell want non-inflationary growth. Most of middle England and the middle classes—perhaps I should say, à la Clinton, the working middle classes, although I do not think that the British middle classes would like to be called that—do not want non-inflationary growth. In fact, they are desperate for inflationary growth.

I caution my hon. Friends who are going a bundle on monetarist theory—as I have said, I do not use the term pejoratively—that they must treat that policy as part of a pattern. Non-inflationary growth fits in with a school of thinking which has existed for a considerable time: it existed in the 1970s and was developed, mostly as academic theories, in the 1980s. We must be careful when we try to gain assistance from specific phrases simply because they make up part of the treaty.

Title VI of the treaty—perhaps it should be subtitle VI, although I can see why it has been made title VI—deals with economic and monetary union. There is article 104c, which deals with excessive deficits, and article 105, which deals with monetary policy and sets up the European system of central banks. I will deal first with excessive deficits, because there was some dispute on this side of the Committee and my hon. Friends—certainly my hon. Friend the Member for Hartlepool—dealt with it at length.

We can agree that according to the treaty the budget deficit must not be more than 60 per cent. of gross domestic product, and Government debt—not strictly the public sector borrowing requirement, but Government debt—must not be more than 3 per cent. of GDP. My hon. Friend the Member for Hartlepool—having told us that it is really all a matter of the broad sweep, the general interpretation, and that the politicians still have their hands on it all and therefore it is all right—proceeded to embark on a textual criticism of the article on excessive deficits. He looked at almost every comma and every word to try to show that it did not really mean 3 per cent. and that we would not be affected.

Then, after all this hoo-ha and argument, my hon. Friend came to a conclusion with which I agree. I tried to intervene to say this, but I do not criticise him for not giving way because he had given way so often. This is what he said, and I agree entirely: The main requirement in relation to the deficit is for progress to be made towards the target."—[Official Report, 13 January 1993; Vol. 216, c. 1003.] I cannot disagree with that statement. It is an almost ministerial type statement, well honed, well considered. We all admire the way my hon. Friend does these things and we all admired his speech. So the beautiful summing up of the article is that the main requirement is progress towards the target. The Financial Secretary may even repeat the words, taken from a Treasury brief, when he is winding up.

It does not have to be done in one year, of course. No one could get the Italian deficit down to 3 per cent. in one year; even those who framed this treaty in their ivory towers realise that. It is not a big bang theory at all; it is death by a thousand cuts. It will happen gradually because, as my hon. Friend says quite clearly, it is progress towards the target. The target we are concerned with is the percentage of GDP that the Government borrow. We understand that at the moment it is around 7 or 8 per cent., so the Government will no doubt start now, and will certainly have to start on 1 December 1994, if the Bill goes through the House and the treaty is ratified. The Government will have to start when stage 2 starts, not by imposition but gradually over the years, reducing that 7 per cent. to the 3 per cent. in the treaty. I am sure that my hon. Friend would not argue that that is wrong; it is what is said in the treaty.

Mr. Peter Shore (Bethnal Green and Stepney)

My right hon. Friend is being almost too generous with regard to these reference figures, 3 per cent. and 60 per cent., even allowing for the margin of movement, because both sub-clauses contain the words "close to" the reference level; they must be moving in the right direction and they must also be close to the reference level.

Mr. Davies

Yes, indeed, they have to, because the whole purpose of the exercise is to get eventually to economic and monetary union and a common currency.

This exercise will probably have to go on, because we shall not have arrived at 3 per cent. by the time the next Labour Government take over in 1996 or 1997. We may not have reached 3 per cent. by then; we may be around 5 per cent.—who knows? The Government of my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) will come in faced with this. The Government will perhaps be composed of a number of parties. We may find as deputy Prime Minister the right hon. Member for Yeovil (Mr. Ashdown)—we do not know—and my hon. Friend the Member for Oxford, East having worked hard in his unproductive orchard, will by then have become Financial Secretary. My hon. Friend the Member for Hartlepool will be a vigorous Back Bencher, striving to get Government money for the inner cities of the north-east, particularly Hartlepool. He will be asking my right hon. Friends for more money, but they will be looking at his speeches and quoting back at him his statement that we have to reach the target. He will have to go back to Hartlepool and explain matters to his constituency party. Young people, not only in Hartlepool but in Llanelli, who drive around in cars that are not theirs and put matches into petrol tanks will probably not come to any of our meetings, but it will have to be explained to them, too, somehow or other, that we cannot do much about it; it is there in the treaty and unfortunately the Lib-Lab Government, or whoever they may be, with the modernising tendency no doubt in the vanguard, will have gradually to start making cuts.

6.15 pm

We may not have to cut expenditure, however; we may put up taxation. We have assumed that the way to get to the 3 per cent. is to cut public expenditure, but it is a reduction of Government debt and, as far as I am aware, there are two ways of reducing Government debt: reducing expenditure or increasing taxation, or a combination of the two. That choice will still be there.

My hon. Friend the Member for Hartlepool referred to "hands-on" politicians, and certainly the hands-on politician will have to decide whether we put up taxes or cut public expenditure.

Mr. Walter Sweeney (Vale of Glamorgan)

Does the right hon. Gentleman accept that the way to balance the books is not to increase taxation but to increase revenue? Results in the past have shown that very often there has been an increased take from taxation accompanying a reduction in income tax.

Mr. Davies

I do not know whether the Laffer curve made any sense. If the hon. Gentleman wants to talk about the Laffer curve, which I believe was something drawn on the back of an envelope in a Washington restaurant, that is fine, but it is not something that we should go into at the moment.

Mr. Richard Shepherd

On this wonderfully fair-minded valuing of an increase in taxation or a decrease in expenditure, the Community is charged with trying to harmonise taxes, which constrains the ability of the Government to do one side of the accounting.

Mr. Davies

That is the point that I was seeking to make—that, even if there is this marvellous freedom of choice whether to increase taxes or cut public expenditure, there are constraints on taxation. If there is harmonisation of indirect taxes, that imposes constraints, and there may be other harmonisation measures.

Mr. Marlow

Just supposing that the mythical modernising future Labour Government are unable to tear up their election promises and are unable to fulfil the requirements of the treaty that some of his hon. Friends seem so ready to impose upon themselves at the moment, is it not the case that Community institutions, on the basis of a two-thirds majority of countries outside the United Kingdom, would be able to make the Government's task even more difficult by imposing fines upon them?

Mr. Davies

That is what will happen eventually, but it will not happen overnight; they will have another meeting, make a statement, bring a little pressure to bear here and there, and an application from the Hartlepool development corporation to the European Development bank for a loan will be refused. There are many ways of doing these things, and ultimately there may be a gunboat, or whatever—I do not know. Whatever happens, however, there will have to be compliance, because that is how the system works.

I do not think that we should underestimate the effect that the "excessive deficits" article will have on both parties' policies, and the constraints that it will place on them to spend judiciously with the aim of maintaining economic growth.

Mr. Spearing

Will my right hon. Friend also consider the issue of direct taxation? Under article 8a as it currently stands, there is to be no frontier within the union, but would not differentiation of direct taxation of income through labour ultimately constitute that? Given that there must be a level playing field in regard to skills, and in regard to firms employing people throughout the Community, might not differential income tax constitute a fiscal frontier which might be judged inconsistent with article 8a?

Mr. Davies

I do not know. Even now, in practice, we are constrained by the tax rates of other EC countries, because we trade with them now and will trade more with them in the future. Actual constraints already exist, whether or not they constitute legal constraints.

My hon. Friend the Member for Hartlepool made a marvellous speech, which is no more than we would expect of him. He had worked hard at that speech. At some stage, he threw out an observation about Delors 2. He said that he was in favour of it—which, of course, is perfectly all right. Delors 2 says that there should be more money in the budget; if it had been accepted, I believe that the budget would have been 1.8 or 1.9 per cent. of the gross domestic product of the 12 countries. However, I did not understand the reference to Delors 2 in the context of excessive deficits. On the one hand, we are told that we must cut our expenditure to an eventual 3 per cent.; on the other, we are told that we must find money to give Mr. Delors so that he has public expenditure funds to pay back to us.

I am sorry if I have done an injustice to my hon. Friend the Member for Hartlepool; that may not be what he meant. I made my comment en passant, as they say. In any event, he was right to mention Delors 2, which illustrates a real problem. Once countries embark on the exercise of converging economies without actually doing so—the exercise, in fact, of converging monetary and financial indicators—and establish a common currency, as the United States has done, massive transfers will be needed. Conservative Members may not agree with that—it may not accord with their philosophy—but many non-ideological economists will confirm that massive transfers are needed between, say, California and North Dakota.

Mr. John Butcher (Coventry, South-West)

May I draw the right hon. Gentlemen's attention to a rather curious aspect of the matter? Hon. Members may belong to the Liverpool or the Cambridge school of economists, they may be Keynesians or monetarists, they may be Ministers, or they may be Opposition Front Benchers, but what unites virtually all hon. Members is the consensus that, at a time of recession, deficits should be allowed to widen. It is hoped, of course, that they will narrow at times of recovery. Why, given that this part of the treaty will deny consensus to the House, are we all expected to vote like sheep for such a ridiculous proposition?

Mr. Davies

; That is a good point. I am not sure whether the religious school in Liverpool will agree with what the hon. Gentleman has said; certainly, it does not necessarily accord with strict monetarist philosophy.

Mr. Bill Walker

Does the right hon. Gentleman agree that a splendid example of the single currency and the single bank currently operates in the United Kingdom, where substantial amounts of taxpayers' funds are transferred from the well-paid to the poorer areas? The right hon. Gentleman comes from Wales, and I come from Scotland; we understand that system, have seen it in operation and do not disagree with it.

Mr. Davies

That is the point that I was trying to make. The same can be observed in the United States. In any event, massive transfers would be required.

In the 1970s, the McDougall report said that, with a common or single currency within economic and monetary union, transfers would have to constitute about 7 per cent. of GDP—and that was before Portugal, Spain and Greece joined the Community. We must now envisage a transfer of between 10 and 12 per cent. of GDP to alleviate the problem of unemployment in South Dakota, and to lessen the difference in wealth between it and California.

That money is not going to arrive, partly because it is not there and partly because no mechanism exists to provide it. The Germans are the paymasters, and they have problems in their own country; certainly, Britain cannot provide it. If no Government have the power to raise taxation at European level, the money will never be there. We are in the worst of all possible worlds. We have transferred democratic power, and we are moving towards a common currency, but we have none of the instruments needed to alleviate—I put it no higher than that—the concentration of economic power in a single currency.

Mr. Barry Legg (Milton Keynes, South-West)

Does the right hon. Gentleman agree that many of the economic problems suffered in 19th-century Ireland were due to a single currency? The Irish economy fell further and further behind. Another consequence was the mass emigration of the Irish population to the United Kingdom mainland.

Mr. Davies

I have enough problems trying to understand the treaty without going into Irish economics. The current Irish position is very interesting, however. I am told that Ireland has achieved economic success: apparently, it has managed to get inflation down to about 3 per cent.; meanwhile, interest rates have risen 100 per cent. overnight, and unemployment stands at at least 17 per cent. of the people who are left in the country. That, evidently, is the blueprint. The French socialists have pursued the same policies. It is a modernising party, which has not existed for long and looks as though, after the next election, it will not exist at all.

Labour Members sometimes refer fondly to the French socialist party as our sister party. I used to be Labour's defence spokesman; the youngsters in the House will not remember that. Sometimes I would go and talk to members of the French socialist party. "Sister party" may not have been the right description.

The French socialists sold out very early. Now France has a strong economy: it has been stronger than the British economy for a long time. It has low inflation, along with rising unemployment, high interest rates and the "franc fort", which is practically a Vichy franc: it is locked into the Bundesbank and is desperate for support. Come March, we shall see a proliferation of parties, the breakdown of the present Government and all sorts of problems. I remind my hon. Friends that that does not apply only to France; the left in Europe had better start thinking, because all these developments are destroying it.

The beneficiaries will not be the Christian Democrats. The Minister does not like the Christian Democrats. I will tell his relations in my constituency about that. He said yesterday that he did not like them. Nice Herr Kohl will not be the beneficiary of all this because lots of nasty people far to his left will benefit from it. So if the modernising tendency thinks that this is some kind of modernising blueprint for the Labour party, let them just look at the French socialist party.

6.30 pm

Mr. Hugh Dykes (Harrow, East)

The right hon. Member modestly reminds us that he has been a defence spokesman for his party. With even greater modesty, he omitted to say that before that he was a Treasury Minister for the Labour Government in the mid-1970s. We have enjoyed his extremely amusing speech, particularly his obsession with his hon. Friend the Member for Hartlepool (Mr. Mandelson) and his speech last night—subject to reading the record carefully, I think that he mentioned his hon. Friend 27 times—but I remember what he said when he was a Treasury Minister. It is a long time ago and the right hon. Gentleman will forgive me if I bring up something of great importance: he has refused ever since to retract it, but I remember it vividly and it is on record in Hansard. He said that the proportion of the French population engaged in agriculture in those days was 25 per cent. I remember that I and other hon. Members asked him to correct the figure because it was 7 per cent., but he refused to do so. Notwithstanding his hugely amusing speech, therefore, how can we attach any credence to what he is saying now? [Interruption.]

Mr. Davies

It is all right, I knew what the hon. Gentleman was going to say. He says it all the time. He caught me out on one occasion. When he is a Minister—if he can keep working at it, I hope that he will eventually become one—I will try and catch him out.

I have referred to the speech of my hon. Friend the Member for Hartlepool not because of anything to do with him personally but because he is a representative of the modernising tendency in the Labour party, and I am very concerned that the modernisation goes ahead properly, without leading to the destruction of the party. I was merely pointing out that the kind of modernisation carried out by the French socialist party has not worked very well.

In any event, I will move on to article 105 and the European central bank. The bank is to be the instrument for the control of inflation and of monetary policy. It is quite interesting to look at the set-up because, as one of my hon. Friends said, it is called the European system of central banks. It is described in this way because the Germans have plonked into the middle of this treaty their own federal system of the Bundesbank which has lots of other little banks all round the Länderbanks. So when this goes through, and after the statute has been brought in to make the Bank of England more or less autonomous according to the statutes of the central bank, we, too, shall have a Länderbank which will be the Bank of England, as it were, on the outside and the European central bank in the middle.

The object of the central bank is to control inflation by monetary means. It is a monetarist treaty. The belief is that inflation can be controlled only by monetary means. There is a lot of mythology about this, about reserves and corsets and things like that, but monetary control is basically a matter of interest rates and, in the end, whatever few extra reserves the Bundesbank puts into the economy or the Bank of England takes out, whatever straitjackets are put round, whatever dual rates of interest the French may play with—the commercial or the financial franc—control of monetary policy is about interest rates, and the object of the central bank is to control interest rates.

The control of interest rates is the prime instrument for trying to arrive at price stability. Price stability means getting as close as possible to zero inflation, not every price being stable but there being stability across the board and prices not moving up and down. So the bank exists and it is autonomous for that very reason because, as Mr. Gavin Davies, who works for Goldman Sachs, pointed out in a perceptive article in The Independent this week, the theory used to be, and the continental theory still is, that the control of inflation is a technical matter and that, because it is technical, it should be taken out of the hands of politicians and put on auto-pilot. The matter is then dealt with purely technically, with no consideration of output, growth or unemployment.

This, too, reminds me of my days as defence spokesman. I think it was Edward Teller or one of his ilk who devised something called the doomsday machine. They did not believe that people could actually carry out deterrence; in other words, politicians might not unleash the weapons when the time came. The only way deterrence could work was to programme this doomsday machine, and when the Russian missiles passed a certain point, half-way across the Atlantic or wherever, the machine would trigger off the American response and the Russians would know that.

It would be a bit like that for control of inflation. The autonomous bank is the auto-pilot and merely carries out decisions. When my hon. Friend the Member for Hartlepool was speaking yesterday, one or two hon. Members interrupted from a sedentary position to say that this was nonsense, that the Bundesbank was not independent, that it listened to politicians and that it was subject to pressure. Obviously, even the Bundesbank cannot live in a complete vacuum, but those of my hon. Friends who fondly believe that the Bundesbank is not autonomous should just talk to former Chancellor Schmidt. What happened to him in 1980 or 1981? He is convinced that, by refusing to go along with what he wanted, the Bundesbank brought down his Government. But we have no need to go back as far as 1981; we need only look at what is happening now. So the Bundesbank is as autonomous as it is possible to be and, on a European scale, it will be even more autonomous because it will not have a Government breathing down its neck: it will have something called ECOFIN which seems to figure broadly in some debates, but there will be no Government there even to make speeches and tell the bank what it should do. The bank is autonomous, it decides on interest rates and, as we have seen, it does so without too much consideration of the effects.

Mr. Bowen Wells (Hertford and Stortford)

May I draw the right hon. Gentleman's attention to article 2 of the treaty and what it says, because this is what article 105 on monetary policy is related to? Perhaps he will tell the Committee if he is in favour of the objectives in article 2, which reads, It shall be the aim of the Community, by establishing a Common Market and progressively approximating the economic policies of Member States, to promote throughout the Community a harmonious development of economic activities, a continuous and balanced expansion, an increased stability, an accelerated raising of the standard of living and closer relations between its Member States. That is what article 2 says, and the means of achieving this is said to be the establishment of the central bank.

Mr. Davies

I have dealt with article 2. I tried last night, but no one was listening. I tried just now, but again the hon. Gentleman was not listening. So I will not go back to it.

I turn now to the split between economic and monetary policy inherent in setting up the bank. It seems to me very silly, to use a not particularly elegant word, to split economic policy from monetary policy. We have seen what is happening in Germany today. I am not saying that the problems in east Germany could be alleviated easily if there were no separate Bundesbank, but if ever there was an exercise to demonstrate that perhaps it does not make sense to separate economic policy from monetary policy, east Germany is it.

The German Government want to increase public expenditure to revive the economy of east Germany, but the Bundesbank, quite properly, pays not a blind bit of interest because, by statute, it is concerned only with the internal value of the currency. In a sedentary intervention—I think that I heard him right—my hon. Friend the Member for Durham, North (Mr. Radice) said that during reunification the Germans exchanged one east mark for one west mark. That, apparently, was a good example of how politicians can overrule the Bundesbank. That is not true. The Bundesbank is concerned only with the internal value of the mark, which basically is inflation. That is why Mr. Kohl was able to offer—in an expensive and damaging way—one west mark for one east mark. Karl Otto Pöhl resigned because he disagreed with what the Government were doing, but that was within the province of the Government, not the Bundesbank.

Mr. Richard Shepherd

The hon. Gentleman is making a terribly important speech. I do not recall reading in the Labour party's manifesto—for which, I know, the right hon. Gentleman is not responsible—or in our manifesto a proposal to set up an independent British central bank. I should like to know when that became Labour policy and whether the right hon. Gentleman thinks that it is an appropriate device for effecting a fundamental change in our economic management through the surrogacy of this Maastricht treaty. The House has not debated the principles behind an independent central bank for this country alone, yet we are legislating for it without a proper debate.

Mr. Davies

That is right; it is article 108, I think, which will be enacted under the Bill.

I am told that an independent, autonomous British bank is Labour policy—[HON. MEMBERS: "Since when?"] It was decided by the non-modernised Labour party at last year's conference—I do not know what the modernised one will do. In a short composite resolution, it decided that the Bank of England should be independent or autonomous. I prefer "autonomous". My hon. Friend the Member for Hartlepool is good on words. Perhaps he appreciates that the word "autonomous" conveys the impression a bit better.

All I am saying is that the proposed split is very silly, but the mistake is being repeated with the European central bank. The European central bank will be responsible for the internal value of the ecu. We were told yesterday, "It is all right; the exchange rate of the ecu will be determined by politicians". I do not disagree. The external value of the ecu will be floating. I do not think that perfect floating can be achieved, but party policy is managed floating. I do not know what that is, so I had better read the conference resolution. I am confused because apparently we must have fixed exchange rates at the moment, but once we have reached the promised land the ecu will float.

Mr. Shepherd

I can bring the right hon. Gentleman hot news from the Frost interview with the Prime Minister. Maastricht is slightly out of date as the Prime Minister is working on a world exchange rate mechanism: the Japanese yen and United States dollar will be intimately linked in this more universalist approach. I know that some foolish hon. Members—even Conservative Members—have giggled at the suggestion, but the right hon. Gentleman should impress on the House the importance of these developments.

Mr. Davies

A world ERM is basically Bretton Woods. Finally—

Mr. Ron Leighton (Newham, North-East)

More.

6.45 pm

Mr. Davies

I have run out of things to say.

What depresses me about my colleagues who are in favour of this European venture is that they now tend to deny it. I should have thought that the ends justify the means and that they would rejoice in the convergence criteria, the central bank and everything that has been set up because the object is to achieve EMU and a single currency as soon as possible.

Previous members of my party—the Jenkinses and Levers—would have rejoiced and said, "The pain is all worth it; the end is justified by the means", which is almost a Leninist approach to economic and political life.

Mrs. Ann Winterton (Congleton)

Would the right hon. Gentleman like to add to his general list of subjects for rejoicing the fact that the promised land is not yet upon us? The Danish Government have resigned, which I understand will mean that the Danish referendum will be held later, so those who support Maastricht will have to wait a little longer for heaven on earth.

Mr. Toby Jessel (Twickenham)

On a point of order, Dame Janet. Can what we have just heard affect the way in which time is assigned to the Bill? The Prime Minister gave a clear assurance that the Bill will not be given a Third Reading until after the second Danish referendum. If the second referendum is to be postponed by a change of Government and a possible general election in Denmark, that gives us much more time to discuss fully every clause of the Bill, and neither the Government nor anyone else should be in any hurry.

Mr. Marlow

Further to that point of order, Dame Janet. This is momentous news. It was the intention of the previous lamented Danish Government to put the Edinburgh conclusions to the people of Denmark in a second plebiscite or referendum. There is now no Government in Denmark. The next Danish Government might decide that they do not want to proceed further with this rotten treaty. As there is much uncertainty, is not it appropriate for a Minister to inform the House of the Government's proposals in these new circumstances? It is futile and fatuous for us to continue the debate when there is no Government in Denmark, no prospect of a referendum, and probably no prospect that the treaty will proceed in Denmark. Why proceed with the debate when the whole thing is stone dead?

Mr. George Robertson (Hamilton)

Further to the point of order, Dame Janet. Before the Committee gets overexcited, may I point out that sometimes we imagine that we are at the centre of the world, but occasionally are reminded that we are not? So far as I know, only the Danish Prime Minister has resigned. As the Conservative party knows only too well, and as the Opposition know to our cost, that does not automatically mean a general election.

The Second Deputy Chairman

I think that I can now answer the point, having heard the points of order. As Chairman of this Committee of the whole House, I have no responsibility for other Governments or what impact they might have. My only concern is with the Committee stage before us.

Mr. Dykes

I have a point of order, Dame Janet, but not exactly on that point, which I am not seeking to follow, as you have given us your conclusion, for which we thank you.

Can you guide the House? Many hon. Members on both sides are shocked and angered by the anti-Europeans saying that the sovereignty of this Chamber and this Parliament is sacrosanct and not to be negotiated away; yet they are constantly harping on the constitutional activities of another country and saying that they should be considered before we come to a decision. Can you guide the Committee?

The Second Deputy Chairman

Yes. That is not a point of order for the Chair. As the hon. Member well knows, hon. Members must be responsible for what they say.

Mr. Davies

If the Danish Government had resigned I was proposing to go on for another hour, but as it was just the Danish Prime Minister I shall sit down. I merely say that these are fundamental issues both for my party and for the House and there is also the question of democracy to be taken into account quite apart from economic policy. No doubt we can come back to these matters when we reach further amendments. I think that we should look at them in the interests of the economy of this country and I see nothing here that will do other than cause damage.

Mr. Ian Taylor (Esher)

We have listened to an impressive speech from the right hon. Member for Llanelli (Mr. Davies). He is genuinely one of those witty speakers to whom one could listen for hours. Indeed, we did. Despite the usual courtesies, the right hon. Gentleman will, of course, wish to leave the Chamber quite rapidly and I well understand that, because clearly his constituents will want to know that the speech he made in the Committee this afternoon and last evening brought down the Danish Prime Minister. That is obviously momentous news. It is quite difficult to follow that speech and I shall endeavour to be slightly briefer, but the right hon. Gentleman has made important points on this cluster of amendments.

The fact that the Danish Prime Minister may have resigned is obviously of great interest to this Committee, but in the midst of a well-attended Committee session we should value the fact that the Committee is scrutinising the Maastricht Bill for itself. The provisions of the Bill are important to the Committee and this country and the attitudes in another country are not of immediate importance, Indeed, the timetable that the Prime Minister has set forth, to complete Third Reading by May at the latest, would still be valid and if the Danes decided to delay their referendum we would clearly maintain that timetable because the original intention was on the basis that the Prime Minister believed that the Danes would have had an earlier referendum.

Mr. Richard Shepherd

I am at a loss to understand quite the point, because as I understand it the Foreign Secretary has assured us that if the Danes fail to ratify the treaty, it is dead. Therefore, this Committee hangs upon the events that take place in Denmark. I should point out to my hon. Friend that I was a Member, as was he, when we passed, lamentably, the Bill called the Football Spectators Bill. The House was marched to the passing of a statute which hung upon someone else's judgment. That is self-denigratory and humbling to this Committee and inappropriate for the passing of great legislation. The truth of the matter is that if the Foreign Secretary's statement stands, the Committee's deliberations are consequential on what the Danes do.

Mr. Taylor

With great respect to my hon. Friend, who is a learned constitutional expert, the reality is that this Committee's deliberations on the Bill are the responsibility of this Committee. The fact that the whole Maastricht treaty may be rendered invalid by the Danish decision is a separate matter. But there are very great differences to the interests of this country according whether or not we merely respond to what the Danes do.

I strongly hope that this country and this Parliament will make their own decisions. If, subsequently, the Danes were not to ratify the treaty, clearly the 12 members of the Community would need to get together and the Foreign Secretary has rightly said that the Danish membership of the Community is as important as that of the other members, in the sense that there are 12 members of the Community.

That is not the same thing as delaying decisions in this Committee because decisions may be delayed in another country. I strongly think that this Committee should take itself sufficiently seriously to make sure that we conduct our deliberations on the treaty in this country's interests.

Mr. Spearing

I am grateful to the hon. Member for giving way because he may be surprised to know that I welcome almost everything he has just said, but has he not forgotten one important factor? Unless the Folketing recommends that the consequences of the decision taken in Edinburgh will precipitate another referendum or unless the Danes believe that those recommendations can be made—and they were made, were they not, and negotiated, perhaps for completely different reasons, by the Prime Minister who has only just resigned—is it not possible that another Prime Minister will make another recommendation? There is as yet no full guarantee that any referendum will take place. In those circumstances, at least the need for speed or indeed for any further proceedings at all may disappear.

Mr. Taylor

I am grateful to my old sparring partner, the hon. Member for Newham, South (Mr. Spearing), for his support and I may store that up for the future as well. On the wider point, we do not know what the Danish Parliament will do, but the idea that we should suspend these discussions because we do not know—

Mr. Giles Radice (Durham, North)

rose—

Mr. Taylor

I am endeavouring to answer the first point, then I will give way.

Mr. Radice

I was trying to help.

Mr. Taylor

Let me help myself before the hon. Member helps me, if I may. The reality is that seven of the eight Danish parties are now, effectively, in favour of what the Danish Government negotiated, so I think that we should stop second-guessing the Danish situation and look at our own.

The point about the amendments in this group is that they effectively remove the amendments to the treaty of Rome that were negotiated at Maastricht. We have heard various arguments about why that should be the case. The difficulty I find is that those who support the amendments before us would therefore be left with the treaty of Rome and the Single European Act unchanged. That is particularly interesting for my hon. Friend for Stafford (Mr. Cash), who is not with us at present. The fact that he supported the Single European Act is a matter of interest and slight confusion for many of the rest of us. I raised this in the debate in Committee in December and it was raised again yesterday. The fact is that it was the Single European Act that made the dramatic step forward from the treaty of Rome and the arguments that were used yesterday, that the treaty of Rome and the Single European Act were all about an economic community, as if we had never left EFTA, are clearly and self-evidently bogus.

In the treaty of Rome there are many references to matters other than economics and if one looks at the Single European Act one will find that it added many items other than those specifically connected with the single market, the 1992 programme. The chapter headings of the Single European Act themselves indicate that social policy was very much in the forefront of the minds of the people who negotiated the treaty, and economic and monetary co-operation, with "union" in brackets, were also very much in the forefront of people's minds with the consequences that flowed from that, which are, of course, not just free trade consequences.

Indeed even in title II, article 3, there were several insertions into the activities of the Community made by the Single European Act. One of them was policy in the social sphere compromising the European social fund, for example. Another was strengthening of economic and social cohesion.

It is impossible to say that if we were to abolish all the changes made in the Maastricht treaty we would be left with something that was about economics. That is simply not the case.

It is interesting that, had he but realised it, my hon. Friend the Member for Stafford was in some difficulty with the grounds on which he chose to defend his position. In order to achieve the 1992 programme—the 285 measures required to create a free market with free movement of goods, people, services and capital—we had to have a series of strong Community institutions and a strong referee to ensure that the measures were applied evenly—I shall deal with that issue later—and we had to overcome the protectionist instincts that could arise over a variety of issues in any of the member countries. That was understood by our then Prime Minister, Lady Thatcher. It was why the Single European Act embraced qualified majority voting.

7 pm

In order to arrive at the very thing that my hon. Friend the Member for Stafford defends himself as having supported, we had to strengthen the institutions that he now says he cannot abide and which he regards as marking the end of Britain as we know it. That is bogus. We joined the European Community in the 1970s, after a big debate, because it was believed to be in Britain's interests that there should not be built on the continent a bloc which we failed to influence.

Indeed, we joined the Community to prevent something which, in the 1950s, we thought would never happen—the solidifying of the Franco-German alliance. That is an important point. As a Labour Foreign Secretary, Anthony Crosland, remarked, it represented the first permanent attachment of Britain to the continent since the Reformation. It was the first time that we believed that we had to make such a commitment to prevent what has always been part of British foreign policy, which is that there should not be a continental bloc that we would be unable to influence. Influencing it was so essential to us that we joined the Community with all the infrastructure that it embraced.

Mr. Michael Lord (Suffolk, Central)

My hon. Friend is taking great pains to explain that the Community was never only about economics and spoke about our joining the "European Community". In fact, we did not join the European Community—we joined the European Economic Community. If he asks his constituents, he will find that they believe that we principally joined a Common Market and were not involving ourselves in other political institutions. I believe that, until the Maastricht treaty is ratified, the title is still the EEC. If the treaty is not ratified, it will remain so.

Mr. Taylor

My hon. Friend takes a great interest in these matters, but I advise him to have another look at the treaty of Rome. The fact that the Community was called "the European Economic Community" should not delude us into believing that that meant it had nothing to do with anything other than free trade. For heaven's sake, we left a free trade area to join the Community. We knew what the institutional structure was—

Mr. Bill Walker

rose—

Mr. Taylor

Please let me finish this point, and then I shall willingly give way.

We knew what the institutional structure was when we joined. We knew that the Community's ambitions covered a range of issues and could not be achieved by free trade alone. The institutional structure has been apparent since we joined, and we knew what we were in for. Indeed, the words "European Community" have been used in all except legal documents in the Community since 1978. We had nearly 10 years' warning of what we were doing when we signed the Single European Act.

Mr. Bill Walker

May I clarify a point? My hon. Friend was drawing the Reformation into his argument. What date was the Reformation in Britain?

Mr. Taylor

The Reformation took place before I entered Parliament. I shall not bandy points about the Reformation with my respected hon. Friend from Scotland because that would lead us into other difficulties, but it was a very long time ago.

If one considers the history of the Community since the mid-1950s, it is clear that all along we have been part of an economic and political community and that many of its objectives were to be attained by involving ourselves in institutional structures and political debate.

This group of amendments, which would wipe out the changes made at Maastricht, would still leave us with an intensely political community. We must ask ourselves whether that is an ideal situation, and the answer is no. In many cases, what people in this country determined had gone wrong since the Single European Act was passed was on the agenda for correction at Maastricht, and the British Government were able to put much of it right for themselves.

For example, since I came to the House in 1987 there have been many late-night debates about the misuse of Community funds. One of the problems was that no one had sufficient clout or sufficient evidence to point the finger. One of the changes made in the Maastricht treaty is that the Court of Auditors is given institutional status, which is an extremely good thing. Also, the European Parliament is given greater powers of scrutiny of monetary and budgetary matters and can call the Commissioners to greater account. The Committee should welcome such developments.

Another objection that has been raised many times in the Committee is, "While we abide by the rules, chaps, the other lot don't." That is probably true, even though the rules by which we abide are often more onerous than those facing other countries because our civil servants have been particularly zealous in interpreting the rules in the first place. However, I shall leave that issue aside.

The treaty negotiated at Maastricht involves a strengthening of the powers of the European Court of Justice. Before there is shock and horror at the fact that the European Court of Justice should be involved at all, let us be clear—my hon. Friend the Member for Suffolk, Central (Mr. Lord) should pay careful attention to this—that by joining the European Community on 1 January 1973 we effectively accepted the jurisdiction of the European Court of Justice. It is not a new concept which has suddenly emerged.

The new set of regulations and powers given to the Community to put the single market in place after the Single European Act did not entail a consequent increase in the powers of the European Court of Justice to ensure that the rules were applied by those who agreed them. I hope that the British public will become aware that it is in our interests to apply the Maastricht treaty provisions because they answer one of the great public concerns, which is, why do we appear to be at a disadvantage compared to many other countries?

Mr. Richard Shepherd

There is no question but that the European Court of Justice existed in the 1970s, but one of the issues that concern some of us is that at that time its remit was strictly limited to the European Economic Community, but the change explicit in the treaty broadens the range of its jurisdiction. By removing the word "economic" we have given it a catholicity of ranges and remits. That is the fundamental difference which causes much anxiety to many Conservatives.

Mr. Taylor

If that were the case, I could understand such anxieties, but what my hon. Friend says is not technically correct. The European Court of Justice is given jurisdiction over everything in the treaty of Rome. Therefore, it is also given jurisdiction over everything that emerged from the Single European Act which is consolidated in the treaty of Rome. As I said, the Single European Act was not about a free trade area alone.

I understand my hon. Friend's concerns and there are issues over which I would not wish the European Court of Justice to have jurisdiction. If one reads the treaty of Maastricht, one finds that it does not have jurisdiction over the two new pillars being constructed on foreign and security policy and on matters of justice—to put it technically, those matters are not justiciable.

Sir Trevor Skeet (Bedfordshire, North)

There is a complete misconception here. The Commission can be given jurisdiction. Matters can be referred to the European Court of Justice. With regard to the misconceptions that are being put forward by the Government, I can give references. First, the Commission is fully associated under articles J.9 and K.4(2), and it can draft legislation under article K.3(2). Furthermore, any legislation may be implemented by special convention under article 100c. Therefore, my hon. Friend cannot say that these matters are beyond the jurisdiction of the court and the Commission.

Mr. Taylor

My hon. Friend has made an interesting point, but he will be aware that, with regard to the pillar to which I am referring, the Commission is involved. But the Commission does not have the power of initiation, and that makes a very big difference. My hon. Friend will know that the European political co-operation procedure for foreign policy that was established under the Single European Act involved the Commission. But the European Court of Justice does not have power to render the elements of those two pillars justiciable in the way that it does in the case of the treaties of Rome. That is why, during this Committee stage, we are not faced with those matters of foreign security policy and justice. Those matters are outwith the Bill because they do not make amendments to the treaty of Rome.

Mr. Iain Duncan-Smith (Chingford)

I am grateful to my hon. Friend for giving way as I realise that frequent breaks in a speech disturb its pattern. I must refer him back to the provisions relating to co-operation in the fields of justice and home affairs. Article K.9 is important as it says: The Council, acting unanimously on the initiative of the Commission or a Member State, may decide to apply Article 100c of the Treaty". Article 100c is therefore brought into play. I do not wish to be pedantic; I simply want to know what my hon. Friend thinks about that.

Mr. Taylor

My hon. Friend confirms my point. In respect of such matters, Governments make unanimous decisions in the Council.

Dame Elaine Kellett-Bowman (Lancaster)

It is opting in rather than opting out.

Mr. Taylor

My hon. Friend comes to my rescue technically. The reality, however, is that this is very different from the unquestioned nature of the power of the European Court of Justice under the treaties of Rome. The precise fact is that the Maastricht treaty has clearly separated the other two pillars. Only with unanimous support under article K.9, which has been cited, will reference to the European Court of Justice come into effect. All these things are important.

Sir Trevor Skeet

Will my hon. Friend give way?

Mr. Taylor

Interventions make the debate exciting from my point of view, but they may not please other Members who wish to speak. I shall very happily give way in a moment.

Let me put all of this in context. The treaty of Rome and the Single European Act—taken together, parts of the treaties of Rome—are, in effect, an expression of Britain's acceptance that it is a part of an economic and political community and that certain decisions are more in the interests of the British people if there is co-operation through the institutions of the Community, sometimes even with qualified majority voting.

Yesterday, my hon. Friend the Member for Worcestershire, South (Mr. Spicer) made the point that, because of the changes that might be made under economic and monetary union, we would see almost the end of Britain's nationhood. That, I think, is slightly over the top.

In economic and monetary terms, Britain is a particularly exposed nation as it is heavily dependent on trading. For a very long time, this country has been buffeted by changes in other countries. Whether or not we are in the exchange rate mechanism, monetary policies set in other countries determine monetary policies in this country. We cannot be isolated. Indeed, that is why, after we left the exchange rate mechanism in September, the Chancellor of the Exchequer, quite rightly, continued to make it clear that British monetary policy could not ignore the monetary policies being set in other countries and, indeed, that he could not set British monetary policy without watching the effect on the exchange rate. He was not attempting to excuse what had happened with regard to the ERM; he was simply recognising the facts.

It is very important to make the point that the Community itself has free movement of capital. No member country has the right to reimpose exchange controls. I accept that there have been breaches of this in the past few months. [Laughter.] Hon. Members should be cautious with their hilarity. Let them take note of how quickly the controls have been removed again. The reinstatement was temporary, and the controls were removed. Ireland is a notable example.

We were the first to abolish exchange controls, and we want the Community to have no exchange controls. However, the very important consequence is that capital finds the home that it most wants to find. If any of our domestic policies are out of line with those of other member countries, capital will find a different home. That applies to industry and to investors in Government bonds. A Government with a very high deficit cannot ignore the fact that some of the deficit may have to be funded abroad. That is the situation in which we currently find ourselves.

7.15 pm

Mr. Jeremy Corbyn (Islington, North)

The hon. Member is presenting a very interesting defence of what I regard as a pretty indefensible position. Does not he accept that if the principle by which the European economic policy is to be run is that capital will find the home that is most suitable to it, any social policies relating to housing, unemployment—or employment—and the environment are bound to take second place? Is not that at the very heart of this whole debate?

Mr. Taylor

I am very grateful to the hon. Member for his intervention. That is precisely the point I wish to make. The reality is that it is not a question whether we can isolate ourselves, whether we can protect British monetary policy, surrounding it with a barrier. The question is: what sorts of policies flow from the conclusion that we have to respect what other countries are doing? That leads to a series of political decisions. The hon. Member for Islington, North (Mr. Corbyn) and I will differ as to how to protect social, housing and other benefits. Those are matters that become a series of priorities in the domestic debate.

With regard to the point that I think is significant, the hon. Gentleman will not like what I have to say. Yesterday, his hon. Friend the Member for Oxford, East (Mr. Smith) did a few political contortions in an effort to make the best of what might be a bad job. The significant point is that the debate in the Community itself is political. Philosophies bring much to bear on the outcome even of negotiations on treaties. For example, it has not always been known to be strong Labour policy that the principle of an open-market economy, with free competition, should be enshrined in the treaty. But I am glad to say it is enshrined in article 3A because even socialist Governments, such as in France, have been strongly influenced by Conservative thinking over many years. They have been prepared to see right at the centre of the treaty statements with which Conservatives here strongly agree and which strengthen our desire to see the Maastricht treaty ratified as it enshrines many of the political values that we hold dear.

The European system of central banks and everything that flows from it have price stability as a principal tenet. Such things are acceptable to the Conservative party, but probably less acceptable to the Opposition. But that is party politics; it is not a question that arises from whether or not we are in the Community. The reality is that countries that are interdependent with regard to monetary policy do not sit down and ignore what is going on, but get stuck in.

My hon. Friend the Member for Worcestershire, South spoke about the problems of sovereignty. The clever action taken over economic and monetary union was not that we negotiated ourselves an opt-out—I disagree with the Minister of State about the use of that phrase—but that we negotiated ourselves an opt-in. In the process, we maintain parliamentary sovereignty. It is important to remember in that respect that we have not bound a successor Parliament. Meanwhile, we have the right to examine the matter and to influence the institutions that will be set up, including their character and objectives.

I agree that, for those who want nothing to do with it, that is not much of a bonus. They might say, "We shall pack our bags and go home. We do not like this game." But those of us who recognise that we are totally interdependent in the Community—by the facts of the matter, many of which stem from the very action that hon. Members who are now against Maastricht support, including the 1992 programme and the single market—appreciate that we must influence the institutions. And in that process of influencing them, we must make sure that they have the right objectives, which is why I welcome many of the phrases that are used, such as "open market economy" and "free competition."

Mr. Austin Mitchell

rose—

Mr. Taylor

I give way to the hon. Gentleman because his tie is irresistible.

Mr. Mitchell

The hon. Gentleman's argument is jejune. There is a huge difference between being influenced by economic and monetary policies in other countries—we are influenced by them because we are part of the same world—and being required, even compelled, to maintain our exchange rate within 6 percentage points of DM2.95. Influence is inevitable, but compulsion to maintain relativity in exchange rates is a different matter. If the hon. Gentleman believes that we have influence because we are part of an institution, perhaps he will explain what influence we had on the reshaping, restructuring and realignment of the ERM by virtue of being a member of it.

Mr. Taylor

We are not compelled to do anything in the ERM. It was a British Government decision—I supported it; I am not fudging that—to enter and maintain that rate. We have discussed that subject at great length and I shall not today be deflected into discussing the rights and wrongs of German internal domestic policy, of which I have considerable criticisms, which I have aired to my German friends rather than simply in the House.

When we come to the third stage, the House will make its decision. Convergence is an important issue and many factors set out in the treaty about convergence do not make me feel uncomfortable. That does not mean that I would want us tomorrow to reduce our deficit to 3 per cent. of GDP. With that I would be uncomfortable. But I am not uncomfortable with the long-term objective, and no Government who, over a period—let us leave that undefined—believe in a balanced budget would feel uncomfortable with that.

That reinforces my argument because, given that we are interdependent in the Community—only in the Community is there the Single European Act consequence of the free movement of capital to which I referred—convergence is a desirable objective. There are various means by which to create convergence, and we could discuss that at length, but, given that convergence is a desirable objective, I have no problem with it in relation to the treaty.

Mr. Knapman

My hon. Friend will agree that we Conservatives believe in market forces. Is he saying that there is a right rate for any market? If so, what is the right rate for the pound to the deutschmark at any time? If there is no right rate for a market, there is no right time to join an exchange rate mechanism, and the country cannot afford to go through that again.

Mr. Taylor

My hon. Friend and I have differed in many debates about the merits of managed currencies and exchange rate mechanisms. I suggest that it is inconceivable that, in a market with free flows of capital, there is no policy towards exchange rates. I fear that we must continue to differ.

Mr. Bernard Jenkin (Colchester, North)

rose—

Mr. Taylor

My generosity in having given way will be criticised because of the length of my speech, so I hope that my hon. Friend will forgive me if I do not give way further.

The Maastricht treaty gives Britain many opportunities, the anticipation of some of which have appeared over the years on our party political agendas. For example, an aspect of the treaty is that we try to bring the whole workings of the Community closer to its citizens. We shall later have a chance to debate the technicalities of subsidiarity or minimum intervention, and I shall not deal with that now.

Let us not ignore the fact that there are several initiatives in the treaty for creating greater openness and accountability, for giving British citizens the ability to refer to an ombudsman cases of maladministration in the Community and the greater powers of the European Parliament. Also we should take into account the stress on national Parliaments. It is the first time that such an ability has arisen. It is up to the Committee to interpret it and I welcome its appearance in the treaty. We should be pleased at the inclusion of those matters and support them. They strengthen matters and I urge the Committee not to throw those gains away simply because a vociferous few here are concerned with the institutions which were set up in the 1950s and which we joined in the 1970s.

The Community will not remain static. The treaty that we are discussing has considerable benefits for Britain, not least the fact that the move to ever-closer union, to which we have been attached since the 1970s, can now be seen to take a wider route than it took previously, for there can now be an intergovernmental route to closer union. That is what the pillars are about on foreign policy and justice matters.

It has been shown in the treaties of Rome that the centralising instinct and inevitability that some people—I am not among them—wish to see in the Community have been arrested through the principle of subsidiarity. It is not a question whether on every issue we can define that down to the last dot and comma. The implication of what is on the face of the treaty means realistically that habits in the Community will change—they already are changing—and we have seen flesh being put on that principle at Birmingham and Edinburgh.

The Maastricht treaty has many advantages for Britain in areas about which hon. Members rightly believe that we should take particular care. It avoids a pre-commitment at a future date to a single currency and economic and monetary union. The interest of the House is protected in the treaty. We shall have the opportunity to debate that later. As is stated in the Treasury memorandum in the appendix to the report of the Treasury and Civil Service Select Committee, we are not automatically bound to rejoin the ERM simply by ratifying the treaty.

I put my cards on the table. I believe that some form of ERM is inevitable. Constitutionally, the arguments of my hon. Friend the Member for Worcestershire, South on that issue do not hold water, and the Financial Secretary made that clear in the debate yesterday. I urge the House to address the treaty as part of what we are already committed to and as a measure that strengthens, rather than weakens, British interests, which does not undermine the position of the House, and which has advantages that we should do more to explain to the British people, who would then perhaps understand why we should be scrutinising the Bill rather than moving towards a referendum. The House is the right place in which to examine the Bill, and I hope that that will continue to be the case during the Committee stage.

7.30 pm

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

The hon. Member for Esher (Mr. Taylor) and I disagree about almost everything in economics and politics, but there is one aspect of his speech with which I agree. Rightly and properly, frankly and openly, the hon. Gentleman described the character of the treaty, and said that it represented his monetarist political values. I too have come to that conclusion, and that is why I oppose the monetarist nature of the convergence cum monetary union in the treaty.

The hon. Gentleman's speech was open and honest, and it showed the differences between us—the reasons why I shall not support the inclusion of title II. At the heart of the treaty, and at the heart of title II, lies monetary union—monetary union, moreover, of a particular character, which the hon. Member for Esher sensibly and openly described as taking a monetarist route.

During the past day or so of debate, it has been said that at least the treaty provides enough flexibility, and enough of an alternative opportunity to pursue convergence and monetary union by other processes. In that connection, much has been said about the famous article 2. I do not need to dwell long on that, because my right hon. Friend the Member for Llanelli (Mr. Davies) gave us a useful critical and textual analysis of it. I shall be rather more generous than he was about article 2, because I recognise that some of its wording—the references to high employment, social cohesion, and the rest—means that its tone and character are—

Mr. Austin Mitchell

An improvement.

Mr. Rowlands

Yes, an improvement—although, as my right hon. Friend the Member for Llanelli said, even article 2 contains more than a germ of monetarist thinking.

I shall show that, unfortunately, from that point the quality of article 2 is somewhat demoted as the processes and nature of the draft monetary union are revealed to us. My hon. Friend the Member for Hartlepool (Mr. Mandelson) and, to a certain extent, my hon. Friend the Member for Oxford, East (Mr. Smith) said that there was a route to monetary union based on growth, investment and jobs, and that the terms of the treaty made it possible to hold those objectives as central.

I have to tell my hon. Friends that I do not believe that that is feasible in anything like the time scale envisaged for the treaty. Such concepts of growth, and convergence based on those sentiments, would require a continuous consistent economic policy to be followed by 12 democratically elected Governments over a considerable period.

I have spent nearly 25 years in the House arguing for some convergence between my constituency and the United Kingdom average. One could have thought that convergence of the economies of regions and communities within one country would be a simple task compared with convergence involving 12 countries, but I have to report to the House that, according to the latest figures, which relate to 1991 or 1992, the county of Mid Glamorgan, part of which I represent, has only 72 per cent. of the United Kingdom GDP per head—and the ratio is getting worse. The figure has fallen from 79 per cent. to 72 per cent.

Even within the United Kingdom, I have seen no convergence between the community that I represent and the rest of the United Kingdom; I have seen a divergence of economic success, wealth and performance—so I find it hard to believe in convergence. I may be unduly pessimistic, but I think that. I am realistic in believing that convergence and monetary union are not likely to be achieved by the dream route, with investment and jobs at its centre, in anything like the time scale envisaged in the treaty.

Furthermore, that is not what is on offer in the treaty. Although article 2 sets an improved tone, after that its role is demoted both in the process of moving towards monetary union and in the final nature of the union achieved.

This is a Committee stage, and it is the Committee's task to analyse what is before it, both in the Bill and in the treaty. As the debate is about title II, I shall briefly take the Committee through what happens to the good sentiments of article 2 in the subsequent processes of title II—how it is valued, how it is eventually assessed, and its final role and function.

By article 3a, paragraph 3, there is a new set of criteria, and there are new guiding principles that will come into force. The language of the definition in paragraph 3 is interesting. I have learnt to read and understand the language of such documents, and I hope that I understand article 3a, paragraph 3, all too well. Article 3, paragraph 1, contains a reference to the contents of article 2 as generally a good thing, but by paragraph 3 the guiding principles that "shall entail compliance"—they are not simply principles to be generally promoted, or desirable objectives; they have to be complied with—are a narrower band:

stable prices, sound public finances and monetary conditions and a sustainable balance of payments. During the speech of my hon. Friend the Member for Hartlepool yesterday, there were some interesting exchanges. My right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) ever so gently suggested that the language of the treaty was monetarist—possibly the language of the 1930s. He was accused of being a senior non-modernising member of the party, and his idea was dismissed.

Ironically, I had been sitting here wondering where I had already heard in a consistent form the language and principles of that paragraph—which are repeated throughout all the articles. I had just finished an interesting study and analysis of the way in which Whitehall handled the dreadful problems faced by my constituents in the 1930s, and when my right hon. Friend mentioned the 1930s it triggered off a connection with that research.

The language and principles of article 3a, paragraph 3, resembled the weekly and monthly statements of Chancellor of the Exchequer and Prime Minister Chamberlain, which rejected any form of public works or deficit financing on any scale for the salvation of communities such as Merthyr Tydfil. The language is not coded; it is an openly described set of monetarist principles. By the time we reach article 3, it is those principles which have to be complied with. They are not simply promoted as desirable objectives; they are the criteria which must bite.

By article 3, we have found out that the pleasures and joys of the sentiments behind article 2 have been put in a slightly different context, and now stand in a rather different relationship. As the hon. Member for Esher openly and honourably stated, that series of monetarist principles, which he thinks should be at the heart of the process towards monetary union, are statements of his political values.

Those monetarist principles left my constituency in the 1980s—as they left it in the 1930s—to suffer increasing unemployment. I do not intend to vote for a treaty and a process towards monetary union that enshrines those principles. I refuse to do so. I am sorry that some of my hon. Friends feel that they can manipulate that treaty and that process. I do not believe that we shall be able to do that. For 30 years, my predecessor and I have argued the case. We still find ourselves not converged but diverged in our economic activity, even compared to the level in the United Kingdom.

I do not believe that some of the desired objectives in article 2 will be carried through in the processes to achieve monetary union. Article 3a dilutes the sensible objectives of article 2. I tried to track the role of article 2 through the subsequent articles. In other words, I tried to track the general and desirable tasks in article 2 through the remainder of the articles to the point at which monetary union is achieved. I then looked at article 102a. Of course, that is where the cat is let out of the bag in terms of the function and role of article 2 in the process of monetary union.

We have all been taught to draft in different ways. Words are what we live with; words are our trade. I had a fantastic schooling. I spent four and a half years in the real school of drafting—indeed, in one of the ultimate factories of drafting in which one does one's apprenticeship: the Foreign Office which does nothing but draft.

By the time we reach article 102a on economic and monetary policy, the function and role of article 2, with its desirable objectives of cohesion and high employment, have been changed. Article 102a says: 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, It is simply "a view to contributing". If the drafting of that article is not a product of King Charles street, it should have been. If it was not a product of King Charles street, our continental friends have learnt the British art of drafting weasel words to cover the diminution of the importance of article 2 as part of the monetary process.

Although the desirable objective in article 2 is diminished in article 102a, the monetarist principles of article 3a3 are still there to be complied with. So the balance between the joys of article 2 and compliance with the monetary principles of article 3 are now carried through. One is "a view to contributing to", and the other is undoubtedly something which must be complied with or else.

Mr. Clive Betts (Sheffield, Attercliffe)

There are two ways to read the treaty. One way is to read it, as my hon. Friend has done, from the beginning—that may be the logical way to read through a treaty—and to say that article 3a changes the definition, especially from paragraph 1 to paragraph 3, where the stable price element is introduced, and then to read further and say that it is a matter of having regard to the words used.

If one reads the treaty backwards, looking at each of the minor elements with reference to article 2, which is the essential task of the Community, one can say that article 102a is a subsidiary of article 3a, because that is how it is written. One can also say that article 3 is a subsidiary of article 3a.

The First Deputy Chairman of Ways and Means (Mr. Geoffrey Lofthouse)

Order. While I have been in the Chamber and, indeed, while I have been watching the monitor during the debate, I have noticed that interventions seem to be very long. Some of them are tantamount to speeches, and I hope that the hon. Gentleman will bear that in mind.

Mr. Rowlands

I understand the point that my hon. Friend is making. Although it may occasionally be justified and useful to read a document backwards, I have not found that so. If I understand my hon. Friend's point, and if one looks at the structure of the treaty and the title, at the beginning there is a series of general statements, and then a series of processes is described in detail within a time scale. The series of processes then reach the point at which a group of states will have converged sufficiently to achieve monetary union.

I do not think that hon. Members should read the treaty backwards. It must be read in a forward-looking way because the processes towards monetary union unfold in a series of articles which precede article 102a. The principles have been laid down in articles 2 and 3a. My argument is that, by the time one reads article 102a, the balance in the sentiment, tone, direction and objectives in article 2 have changed to a rather strict monetarist process. If I am allowed to continue, I shall show how that unfolds almost exclusively so.

7.45 pm

Mr. Marlow

In a broader context, has not the hon. Member for Sheffield, Attercliffe (Mr. Betts) hit the nail on the head when he says that there are many different ways of reading the treaty? That has enabled my hon. Friend the Member for Esher (Mr. Taylor) to plead for reassurances and tell the Committee how everything will be all right on the night, how none of our powers or our sovereignty will be undermined and how we will be strengthened. At the same time we will allow the commissioner and his friends, the Euro-fanatics, to take all powers from the House as time goes by. The institutions of Europe, the court and the Commission, will take those powers from us. Hon. Members can read the treaty two ways.

Mr. Rowlands

I do not agree that we can read the treaty two ways. It is very clear, and the hon. Member for Esher described it well. The treaty describes monetarist principles and the processes towards monetary union. Monetary union is the only principle of the treaty. I am simply saying that a number of my hon. Friends have argued about the value and importance of article 2 to defend the process.

I am seeking to demonstate how article 2 is progressively devalued as the treaty describes the processes to reach the ultimate point at which the member states decide whether they have achieved a degree of convergence. In article 3, the Commission is given a new power—at least, I think that it is a new power.

We have talked a lot about subsidiarity. This morning, in the Select Committee on Foreign Affairs, the Minister of State and his officials admitted that the principles of subsidiarity cannot and do not apply in any shape or form to stage three of monetary union. In other words, the principle of subsidiarity, which is the central feature of the treaty and stage three of monetary union, will not apply. It is a centralising process, not a process which is subject to subsidiarity.

Mr. Garel-Jones

In the Select Committee this morning, the deputy legal adviser to the Foreign Office made it perfectly clear that article 3b did inform the whole treaty, despite what the hon. Gentleman says.

Mr. Rowlands

If I remember correctly—we will read the text—evidence was previously given to us by professionals. I simply asked Mr. Jay whether subsidiarity would apply to the principles of monetary union in the stage three process, and I think he said no. It was only consistent with other evidence which we have taken.

Mr. Jenkin

In a way, it does apply to monetary union because, by reason of the scale of effects, it is something which is better done at the centre. That demonstrates how subsidiarity can be as much a centralising concept as a decentralising one.

Mr. Rowlands

That is a perceptive point, because we speak of subsidiarity as a one-way process. As the hon. Gentleman rightly points out, it could be a two-way process. Whereas we talk a great deal about the potential decentralising of powers under the subsidiarity provisions of the treaty, alongside it is a hugely centralising process which is necessary to achieve monetary union. I hope that I am not vulgarising the exchange that we had in the Select Committee this morning. In the Select Committee, we talked about, dare I use the term, Mr. Delors's "little list" of devolved powers. We asked the Ministers who came before us to produce a little list of the new powers and responsibilities that the Commission will obtain under the treaty. Article 103 of title II includes, if not a new, an enhanced role for the Commission.

The Commission will almost have the power to play the role of a European International Monetary Fund. It will be in the job of multi-surveillance of every nation's economy and performance. That is the function that is provided in article 103. Rather than reducing the functions and roles of the Commission, the treaty enhances them. To borrow another phrase, the Commission will go into every nook and cranny of a nation's economic and monetary life. That is what is established in article 103.

The other interesting feature of the process of multi-surveillance is that the treaty does not contain a single reference to the Commission looking to see whether unemployment is increasing, whether there is any form of social cohesion and whether there is any real protection. The Commission's function of multi-surveillance in the process of monetary union has no meaning in respect of matters such as unemployment. The multi-surveiliance function is already essentially monetarist.

Dr. Roger Berry (Kingswood)

Is my hon. Friend aware that the recent Treasury report on the conduct of economic policy, to which reference has already been made, says in paragraph 106, referring to Maastricht: A strategy for deficit reduction in the medium-term is required under the terms of the Maastricht treaty."? It is difficult, if not impossible, to find in the report commitments to employment policy and growth as a result of Maastricht. The emphasis is on deficit reduction.

Mr. Rowlands

Absolutely so. That is why examination of the text does not justify the weight that some of my colleagues have put on article 2. Employment and growth are not the major aims which determine the nature of the process which will lead towards monetary union.

In article 103, the Commission is given the role of conducting multilateral surveillance of an individual nation's economy. It is little wonder that the Commission is willing to give up extra powers. It will have a full-time job involving itself in every nook and cranny of the economic life of nations.

Mr. George Robertson

Has my hon. Friend ever asked himself why, if the prescriptions which he says are the central feature of the treaty are so evil and unlikely to lead to growth and, according to his diagnosis, are likely to lead to a worse position, every socialist and social democratic party in Europe, and every trade union in Europe outside and within Britain, is in favour of the treaty?

Mr. Rowlands

Because these are matters of judgment. My judgment on reading the text of the treaty is clear, and it is evidently shared by all those who have spoken tonight. The running thesis of the treaty and the process of monetary union are based on narrow monetarist principles. I cannot answer my hon. Friend's question. My hon. Friend spends more time than me on the matter. He has not damaged my case. Others might not agree with me, but my hon. Friend has not taken me on about how I interpret the text. He has not told me that I am reading the treaty wrongly. If he thinks that I have got a point of fact wrong, he should tell me. He simply tells me that others have different views.

Let us examine the text. The text of article 104c on excessive deficits does not say that one reason why a country might have such a deficit is because it wishes to reduce unemployment. Article 2 does not deal with excessive deficits. By the time we reach excessive deficits in article 104c, it is clear that the route to monetary union is a monetarist one.

Mr. George Robertson

My hon. Friend the Member for Oxford, East (Mr. Smith) dealt with several of the points that my hon. Friend makes, countered them, and argued strongly with some of the interventions that were made. I simply ask my hon. Friend, in a shorthand form at this stage in the debate, to remember that it may not be the case that he is right and everyone else in the 12 European Community countries is wrong. It might be the other way round. I simply ask him to reflect on that.

Mr. Rowlands

I hope that my hon. Friend thinks that he might find himself in that position, too. I am defending my case and making my points based on the text before me. My hon. Friend has not once yet told me that I am reading the text wrongly. I cannot be responsible for the company he keeps: I can only say how I read and understand the text.

By the time I reach paragraph 2 of article 105 on monetary policy, I find no vestige of reference to article 2. My hon. Friend the Member for Hartlepool (Mr. Mandelson) said paragraph 1 contained a reference to article 2, but even he had to admit that the opening sentence of paragraph 1 of article 5 says that the primary objective of the European central bank is to maintain price stability. It is not to implement the objectives of article 2.

Again we have the words: with a view to contributing to the achievement of the objectives of … Article 2. Those are the weasel words about the good things in article 2 by the time we reach the functions and role of the European central bank.

Mr. Stuart Randall (Kingston upon Hull, West)

Is one of the reasons why there is such support for the treaty among social democrats and socialists in the EC the fact that the treaty is not a policy document but a framework? It is a framework for decision-making—[HON MEMBERS: "No."] Yes, it is. In essence it is not a policy document. The policies will come from that document. I suggest to my hon. Friend—I shall be interested to hear what he has to say—that article 2 will be the key article in determining what sort of policies we have.

Mr. Rowlands

It is a treaty. It will have to be ratified. It places clear, specifically defined obligations on the Governments of member states. It contains language which I have just described, which implies, "Thou shalt comply in this or that respect and apply these principles." I have identified those principles of compliance and how they differ from the objectives of article 2. I have compared the language of article 2 with that of the rest of the treaty. One language is of policy; the other is of compliance.

The treaty contains detailed obligations which will force us to adopt a particular method of achieving a particular form of monetary union. I object to that. I hope that my hon. Friend will not vote for the treaty on the basis that it is a framework within which a country can have different policies. It is a clearly defined route to monetary union, based on a series of narrowly defined principles of monetarism.

Dr. Berry

Is my hon. Friend aware of a policy document which has just been issued by the new Government of the Republic of Ireland, which states: Budgetary policy will therefore be based on the overriding requirements of the Maastricht treaty. Prospective participants are required to adhere strictly to an annual general government deficit on around 3 per cent. or less of GDP"? So it goes on. That is a specific policy document embracing the principles of Maastricht.

Mr. Rowlands

My hon. Friend underlines the point. If my hon. Friend the Member for Kingston upon Hull, West (Mr. Randall) wants another illustration of the point that the treaty is not simply a framework but an explicit series of obligations, I recommend that he reads article 108. My hon. Friend the Member for Kingston upon Hull, West said that the treaty is merely a framework, but it is not. Article 108 states that, during stage 2 of economic and monetary union, this Parliament must pass an Act to change the statutes of our national bank. That is compulsory. It does not state that we may do so if we wish—it is not permissive.

What is even worse is what might happen if the House does not want to pass such an Act. Why should we legislate in that way? I do not believe that the Bank of England should be made autonomous. My hon. Friend the Member for Oxford, East has described what he thought might be constructive alterations to the statutes of our national bank, but I wonder whether his suggestions would be possible under the treaty.

8 pm

Article 108 states not only that we must legislate to change the statutes but that we must do so in a particular way. Such an Act would have to be compatible with the statutes on the European central bank laid down in the treaty.

I do not know whether the provisions of the treaty should be defined as obligations or merely as a framework, but in my language, article 108 forces us to legislate to change the character of the Bank of England and its relationship with the Government. When such a Bill comes before the House, we will be in a curious position. Hon. Members on both sides might seek to move amendments to change the proposed character of the new Act, but Ministers will tell us that we cannot do so, as that would not comply with the protocol and the provisions in the Maastricht treaty regarding the European central bank.

I cannot think of a better illustration of loss of sovereignty, in the way that this Parliament has always interpreted sovereignty. I am a bit of a parliamentary historian and have written about the evolution of Parliament in the 17th century, the original arguments for the creation of the Bank of England and the tonnage and poundage legislation of 1694.

Whatever else we used to think that this place was all about, it was about the sovereign right to legislate. As a result of article 108, during the next 18 months the Government will have to introduce a Bill to change the relationship between the state and the Bank of England, and that Bill will have to be compatible with the protocols and provisions on the European Community bank laid down in the treaty.

If one wills the end, one must will the means. The alteration of the character and nature of our banking statutes is one of the means for us to achieve monetary union as laid down by the protocol in the treaty.

I want the Financial Secretary to answer two questions which fall within his patch. Presumably, if we pass the Bill, unless the Danish people throw it out in their referendum, the treaty will be ratified, and stage 2 of EMU will start next January. That is only 11 months away, not in 1996 or 1997. During stage 2, legislation along the lines that I have described will be introduced. First, will the Treasury Minister tell us whether it is the Treasury and the Government's best estimate that stage 2 will start on time?

The opening paragraph of chapter 4—"Transitional Provisions"—states: The second stage for achieving economic and monetary union shall begin on 1 January 1994. What if it does not? Will the treaty have to be amended, or will powers be created to override it? Does the Minister think that that deadline is feasible? If that is the deadline in agreeing the treaty, we will have to introduce legislation to amend our national banking statutes.

In an interesting passage of his speech, my hon. Friend the Member for Oxford, East described some of his thoughts about how he would change the statutes. I have not had a chance to consider all of them, but I should like the Minister to study my hon. Friend's interesting reference and say whether his ideas would be compatible with the provisions in the protocol on the European central bank, because that will define the limits of our legislation and the new banking Bill.

I can think of no better illustration to show my hon. Friend the Member for Kingston upon Hull, West that the treaty is not merely a framework but that it contains a series of explicit obligations.

Mr. Randall

They are declarations.

Mr. Rowlands

No, they are not.

I realise that I have spoken for a long time, and would like to give other hon. Members a chance. Finally, the cat is out of the bag when one reads the last clause describing the third stage of monetary union. Article 109j lays down the full criteria to decide whether convergence has been achieved and monetary union can go ahead. It does not contain a single reference to article 2 or to unemployment levels.

In his excellent speech, my right hon. Friend the Member for Llanelli said that one could achieve convergence and monetary union, under the provisions in the treaty, while there was 20 per cent. unemployment in Merthyr Tydfil or in the United Kingdom. Unemployment would not be a factor to decide whether the country was in a fit state to qualify for monetary union. The four criteria listed in article 109j are all based on monetarist principles and have nothing to do with the general propositions in article 2 about cohesion or high unemployment levels.

We are being asked to buy a type of monetary union which must be achieved by a particular process. I represent a constituency that has suffered too often from such ideas and economic principles for me to support the Bill. Even if I did not have that instinct, I would say that we should object to the Bill because the treaty is hugely centralising. Monetary union will create more centralisation. Even if a sufficient cohesion fund is created, it will have to be administered and disbursed centrally.

Secondly, the treaty is hugely restrictive. One of the major tasks for the Community is to reach out and reinforce the democratic structures of the Czechs, the Hungarians and the countries of central Europe. Much that is in the treaty will make it infinitely more difficult for a meaningful political and economic relationship between the central European countries and the Community, with its monetary union.

The treaty does not outline the shape of the Europe that I want in the late 20th century. The treaty is the last vestige of a process that began in the mid-1950s during the cold war. The creation of the original Community was as much a product of the division of Europe and the cold war as of any great dream of a reunited Europe. Many of its principles and ideas were based on that.

I believe that we have come to the end of that phase, as the cold-war division of Europe has come to an end. We should now look for alternative routes for economic and political union within the structure of an economic common market and an intergovernmental structure of co-operation of the kind represented in the second half of the treaty.

The Financial Secretary to the Treasury (Mr. Stephen Dorrell)

The Minister of State, Foreign and Commonwealth Office, my right hon. Friend the Member for Watford (Mr. Garel-Jones), said yesterday that I would try to intervene briefly today to speak on aspects of the treaty that fall within the Treasury's sphere of responsibility as they relate to economic and monetary union.

Mr. Bill Walker

On a point of order, Mr. Lofthouse. Have Ministers, in their attempt to answer some of the points that have been made, told you how they hope to answer points that have not been made? Many of us who have been here for three days have not been called to speak and the matters that I wish to raise have not been touched on at all yet.

The First Deputy Chairman

No, the Government have not told me that.

Mr. Dorrell

Perhaps my hon. Friend should reflect on the fact that our limited memories mean that we shall deal with the issue in tranches.

As befits somebody who lives in the Victorian splendour of the Foreign Office, my right hon. Friend the Minister of State has spoken about pillars and architecture. As somebody who occupies what was described in the papers yesterday as the "linoleum palace", I propose to speak solely about the engineering of the Community—its economic policy.

The hon. Member for Oxford, East (Mr. Smith) started his remarks yesterday by referring to the Community's objectives defined in article 2 of the treaty of Maastricht. His example was followed by several of his hon. Friends. The hon. Member for Hartlepool (Mr. Mandelson) and the right hon. Member for Llanelli (Mr. Davies), from extremely different standpoints, both started their speeches by discussing the objectives defined in article 2. The hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) has also followed their example, and I am therefore happy to follow them down that road.

I agree with the right hon. Member for Llanelli that three key factors arising from article 2 would be common ground on both sides of the Committee, among supporters and opponents of Maastricht. Article 2 commits the Community to achieving high employment. The right hon. Gentleman had fun discussing the difference between employment and unemployment.

Mr. Marlow

I am sorry to make this point now, but I was speaking to some hon. Friends who had just entered the Chamber when my hon. Friend the Minister stood up. As he will know, I have tabled a couple of amendments, but have not had an opportunity to discuss them yet. Other hon. Members have also tabled amendments. Will my hon. Friend assure the House that a Minister will respond to the debate once all those who wish to speak have spoken, particularly those who have not yet put forward their amendments?

Mr. Dorrell

As I said in answer to a similar intervention, we are dealing with the Bill in tranches. Having listened to the debate, I thought that there was sufficient meat for me to deal with some of the concerns expressed and to put the Government's view on the points that have already been made.

I was going through the three key elements defined in article 2, picking out the key objectives of high employment, raising the standard of living and the quality of life of Community residents, and the achievement of sustainable, non-inflationary growth. Those objectives should be, and largely are, supported on both sides of the Committee. Although they may be shared objectives, the discussions on the methods by which they are achieved have revealed considerable differences. Several hon. Members on both sides of the Committee have alleged that the treaty and the institutions envisaged within it contain a deflationary bias that would make it impossible for such a Community to deliver its objective of high employment and the other side of that coin, which is low unemployment.

May I concentrate the attention of the House first on the evidence that has been adduced to support the assertion that the institutions envisaged by the treaty contain a deflationary bias or make impossible the objectives defined in article 2? The evidence that has been adduced in support of that argument during the debate is, to put it mildly, flimsy. The hon. Member for Merthyr Tydfil and Rhymney treated us to a long speech based on the proposition that there is a clear division between a monetarist approach to monetary management. Although he did not define it, he implied that an alternative approach to monetary management could better deliver the objectives of article 2. The assumption that lay behind this speech took place more than 10 years ago, and most of his arguments have now become out of date.

Mr. Leighton

Is not the proof of the pudding in the eating? The first stage of economic and monetary union was the exchange rate mechanism, which made interest rates higher than was needed for the purposes of the domestic economy. That was deflationary, and unemployment rose by 1.1 million during that period. Does not that prove that the ERM was deflationary?

8.15 pm

Mr. Dorrell

The point that I was seeking to develop was whether there could be a choice between the delivery of growth and high employment, and the controlling of Government deficits. In one or two intervention, the hon. Member for Walsall, North (Mr. Winnick), who is not in the Chamber at present, appeared to believe that the higher the budget deficit, the faster the rate of growth. Surely the experience in the past 25 years of Governments of both political parties has tested that theory to destruction. High budget deficits undermine the delivery of employment and growth objectives. We embrace the commitment to proper control of budget deficits that is enshrined within the treaty, not because it is in the treaty but because experience over many years has shown that failure to observe the disciplines of proper control of Government deficits undermines the capacity of any economy, not just this economy, to deliver objectives of growth and high employment.

Mr. Denzil Davies

The Minister may be right or wrong. Much of the issue is theory and fashion. Whether he is right or wrong, why entrench one view in a treaty that can never be changed except with the consent of 12 nations? Why give economic theory such codification?

Mr. Dorrell

The right hon. Gentleman may describe it as theory, but I do not believe that the experiments with the approach of the hon. Member for Walsall, North are theory. We have seen repeatedly that failure to control budget deficits has undermined the capacity of this country and other countries to deliver their objectives.

Mr. Michael Spicer (Worcestershire, South)

Governments are elected to take a view about budget deficits. Labour Governments think that one can expand budget deficits, whereas Conservative Governments generally take the opposite view. It is not up to a treaty to determine that matter.

Mr. Dorrell

My hon. Friend is not quite right, because some Opposition Members have questioned whether it is possible or even desirable to deliver sustainable, non-inflationary growth. For example, yesterday we had a contribution from the hon. Member for Great Grimsby (Mr. Mitchell), who said:

article 3a(2) states that the primary objective of economic policy is 'to maintain price stability'. That has never been an objective of the Labour party". —[Official Report, 13 January 1993; Vol. 216, c. 946–47.] There is ample evidence to support that assertion.

In one of the last sentences that he spoke yesterday the right hon. Member for Llanelli said:

We cannot have non-inflationary growth in today's western capitalist economies."—[Official Report, 13 January 1993; Vol. 216, c. 1011.] I do not believe that that assertion is true. The experience of successfully run economies, both in Europe and further afield, flatly contradicts the assertion made by the right hon. Gentleman last night.

Mr. Denzil Davies

There may be one or two such economies, but will the Minister give examples of countries in western Europe that have achieved non-inflationary growth since the war?

Mr. Dorrell

I shall give an example, but I should be cautious about doing so too often as I think that most people in this country get bored of having Germany quoted at them as an example. Germany has achieved a lower average rate of inflation and a higher average rate of growth than us.

Mr. Radice

I thought that I was on the same side of the argument as the Minister, but I fear that he is losing me. It is true that it is important to have a low inflation rate. It is sensible to have rules on budget deficits if we are to have a single currency. But if there is a recession and a high level of unemployment across Europe, there is a case for counter-recessionary measures. That was precisely what was agreed at Edinburgh. Surely the hon. Gentleman is not arguing against that case. I hope that he is not.

Mr. Dorrell

I am not arguing against the proposition that budget deficits fluctuate according to the state of economic activity. It would be hard for me to do so.

I can quote no better authority for that view than Lord Lawson, who is not always associated with such a view. The Committee will remember that he made a speech during the 1980s, from which he quotes extensively in his recently published book, supporting the assertion that budget deficits fluctuate according to the level of economic activity. That is the answer to the issue raised earlier by my hon. Friend the Member for Coventry, South-West (Mr. Butcher), who was concerned to ensure that a budget deficit objective did not have to be cast in stone or at a fixed level every year, regardless of the state of economic activity.

Mr. Jenkin

The important distinction in the legal enforceability of the treaty is whether one is trying to achieve a deficit of less than 3 per cent. or wilfully avoiding achieving it. Without giving away any Budget secrets, will my hon. Friend say whether the Government will be trying to achieve a 3 per cent. budget deficit in the coming financial year? Alternatively, will we be able to interpret their actions as those of a Government who are wilfully avoiding doing so because that is in Britain's economic interests?

Mr. Dorrell

We shall be trying to avoid an excessive budget deficit, as the treaty requires us to do, not because of any treaty obligation, but because we know that that is the only sensible way of running an economy.

Mr. Austin Mitchell

I thank the Minister for giving way. I want to intervene because he has referred to me in his argument.

Surely the essence of democratic decision making is to try to hold a balance between the employment level and the inflation level. Governments are continually trying to make such judgments. Economic policy becomes deflationary when Governments become obsessed with reducing inflation and increase unemployment. That is exactly what the Government have done—their fight against inflation has become paramount. Surely the essence of article 3a is that price stability is the paramount objective of economic policy. It states that member states and the Community should pursue the general economic policies of the Community only in so far as they are without prejudice to this objective.

Mr. Dorrell

The reason for that is that we recognise, as do the signatories of the treaty, that the delivery of the wider objectives are not assisted, but jeopardised, by a failure to maintain stable prices. The answer to the point raised by the hon. Member for Great Grimsby was provided, with some distinction, by his hon. Friend the Member for Oxford, East, when he said: My hon. Friend referred to price stability. It would be interesting to hear his arguments in favour of price instability"— I agree with the hon. Member for Oxford, East. 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."—[Official Report, 13 January 1993; Vol. 216, c. 947.] That is the answer to the hon. Member for Great Grimsby.

Mr. Austin Mitchell

That is an insane argument. The essence of capitalist and market economies is that prices will fluctuate—that is the nature of such economies. Nobody is arguing for price stability in the sense that prices do not fluctuate. Price stability in this context, refers to the obsession with keeping inflation as low as possible—zero inflation—which has existed for a long time. When governed by such an obsession, that aim must be paramount over other Community objectives, including full employment.

Mr. Dorrell

The hon. Gentleman is right to say that the efficient functioning of the market economy depends on the ability of prices to fluctuate. It does not depend on the ability of the value of money to fluctuate. The effect of a progressive decline in the value of money—the rate of inflation—during the past 20 years has been to undermine economic performance and the delivering of social objectives in this country.

Mr. Marlow

My hon. Friend talks about excessive budget deficits. He will be familiar with article 104c, which states that the Commission shall examine compliance with budgetary discipline on the basis of the following two criteria: (a) whether the ratio of the planned or actual government deficit to gross domestic product exceeds a reference value, unless —either the ratio has declined substantially and continuously and reached a level that comes close to the reference value"— 3 per cent.— or, alternatively, the excess over the reference value is only exceptional and temporary and the ratio remains close to the reference value". Which of those two criteria will the Government satisfy with regard to next year's Budget?

Mr. Dorrell

Although we accept, for reasons that I have given—which have nothing to do with the treaty of Maastricht—the desirability of avoiding excessive budgetary deficits, we do not at this stage accept the legitimacy of the Commission or any other European institution's authority to require us to pursue a budgetary policy that is not of our own choosing. That marks the success of my right hon. Friend the Prime Minister in delivering the British protocol. None of the compulsory provisions of the treaty of Maastricht relating to monetary union apply to the United Kingdom unless and until the House passes an Act of Parliament to determine that they should apply.

Many of the speeches made in Committee have avoided the fact that this country is not committed to moving to stage 3 of economic and monetary union. My hon. Friend the Member for Worcestershire, South (Mr. Spicer) sought to argue that the defence negotiated by my right hon. Friend the Prime Minister—

Mr. Rowlands

The Minister's case has moved. He did not answer the question posed by the hon. Member for Northampton, North (Mr. Marlow), but merely said that there was an opt-out provision and we did not have to take action if we did not want to do so. Do the Government and the Minister consider it a desirable objective to belong to the monetary union?

Mr. Dorrell

We have made it perfectly clear, as we did throughout the negotiations, that we regard that as a question which is impossible to answer at this stage. That case was not accepted by any of our partners, except Denmark. That is why Britain and Denmark secured provisions within the treaty to allow them to take that decision when the necessary information was available. It is not now available. That is why we have reserved our ability to make that decision at a much later date.

8.30 pm

Mr. Leighton

The Minister has been very generous in giving way, which makes for a good debate. On the point about price stability, is he aware that the Governor of the Bank of England, in speaking quite recently to the eastern Confederation of British Industry, said that we could have achieved price stability this year but it would have meant too much deflation? So he and the Government decided not to go for price stability this year because it would have meant too much of a recession. Should we not have four objects of economic policy? One is as low inflation as possible, but the others are balance of payments equilibrium, economic growth and high employment, not just going for one.

Mr. Dorrell

I do not want to cover that ground again, but that is exactly what I said in defining what I saw as the key objectives set out in article 2.

Mr. Richard Shepherd

Why would my hon. Friends want to legislate for convergency criteria, which will create great pain, when they do not necessarily know at this stage whether they want to enter into the third stage? Take, for instance, the average on interest rates. With good fortune and if the Government take their courage in their hands, we shall bring down interest rates much faster than the European average. We shall be well outside the convergence criteria on those, and that creates a problem. The treaty says that we are meant to be within the range of 2 per cent. of the average of the European convergence criteria, so why would we legislate for the second stage?

Mr. Dorrell

My hon. Friend is not quite right, because I do not think that it is possible for us to be outside the convergence criteria on interest rates by being below; the convergence criterion is to be within 2 per cent. of the lowest. But I will check that.

The point about the convergence criteria is that they come into play only if we choose to go to stage 3 of economic and monetary union. I agree with the right hon. Member for Llanelli, who, although he made it clear that he was opposed to a single currency, also said—I do not think that I misreport him—that if we choose to go to a single currency, the convergence criteria defined in the treaty make some sense as criteria for delivering a single currency. That is a point of view that is supported by somebody who opposes the basic argument that I am trying to advance.

So my hon. Friend is not on to a good point when he concentrates on the legislative nature of convergence criteria. They merely describe conditions which individual member states have to satisfy to become members of a single currency, because without coming within that cone of convergence there is no realistic prospect of a single currency working.

Mr. Richard Shepherd

That is the very point: why does one then need to legislate for them? They are criteria which the Government have it in their power to pursue in any event. It does not require the enactment into United Kingdom legislation and the decision can be made on the basis of the proper management of the economy. It is not necessary, therefore, as I understand the argument of the Financial Secretary, to legislate. So surely the Financial Secretary could accept the amendments before us on this point.

Mr. Dorrell

The amendments, as my hon. Friend knows very well, remove the relevant titles from the effect of the European Communities Act 1972, and the reason why those are unacceptable is that they would make it impossible for us to discharge our obligations under the treaty within domestic law.

Mr. Marlow

rose—

Mr. Dorrell

I will give way to my hon. Friend later. I want to move on to deal reasonably briefly with the arguments advanced yesterday by my hon. Friend the Member for Worcestershire, South to the effect that we are committed to joining stage 3 of the economic and monetary union and that the safeguards do not work. He was particularly concerned that we are committed to rejoining the exchange rate mechanism. He sought to argue that on two counts, both of them, I think, wrong. His argument was, first, on the ground that there was a legal obligation. He said that there was a legal obligation contained within the treaty which, when interpreted, would require the British Government, against its will, to rejoin the ERM.

I believe that there are three answers to that. The first is that nobody has yet quoted from the treaty a specific and express obligation to rejoin the ERM, for the simple reason that there is no express obligation within the treaty.

Mr. Macdonald

rose—

Mr. Dorrell

I will give way to any hon. Member who can quote to me the article in the Maastricht treaty which expressly requires membership by any member state of the exchange rate mechanism. I say that with total confidence; there is no such obligation imposed under the Maastricht treaty.

Sir Trevor Skeet

It is at 109j. It is one of the criteria that are laid down and, since it is one of the criteria, we have to go along with it.

Mr. Dorell

It is one of the convergence criteria; my hon. Friend is right on that count. But there is no obligation on us to converge, because there is no obligation on us to reach the end result.

Several hon. Members

rose—

The Chairman of Ways and Means (Mr. Michael Morris)

Order. There are proper codes of debate. Hon. Members know full well that if the Minister wishes to give way, he will do so. If he does not, hon. Members should resume their seats, however senior they may be.

Mr. Dorrell

Secondly,—

Mr. Macdonald

rose—

Mr. Dorrell

Very well, I will give way just once more.

Mr. Macdonald

I have listened to the Financial Secretary's argument, but I think that he has got it slightly wrong. He is implying that the convergence criteria apply to the United Kingdom only if it opts in to the process towards monetary union, if it decides to go ahead with the third stage. But the protocol, especially paragraph 2, which says: Paragraphs 3 to 9 shall have to effect if the United Kingdom notifies the Council that it does not intend to move to the third stage.", implies that to exempt itself from the convergence criteria the United Kingdom has to notify the Council that it is not moving to the third stage. It is not a question of opting in to the convergence criteria; it is automatically in the convergence criteria unless it specifically notifies the Council that it wishes to opt out.

Mr. Dorrell

The hon. Gentleman is on to a drafting point. He will see that paragraph 1 of the protocol reads as follows: The United Kingdom shall notify the Council whether it intends to move to the third stage before the Council makes its assessment under article 109j(2) of this Treaty. The first paragraph of the protocol leaves the question entirely open. The second paragraph, from which the hon. Gentleman quoted, is an introductory paragraph which leads into paragraphs 3 to 9. Of those paragraphs, paragraph 4 is the one that is the safeguard for the United Kingdom position and that states that, in the case that we have indicated that we are not going to join the economic and monetary union,

The United Kingdom shall retain its powers in the field of monetary policy according to national law. So there is no obligation to join either the ERM or the economic and monetary union. There is no express obligation in the treaty, nor is there an implied obligation either in the protocol, from which the hon. Gentleman quoted, or in article 109m, which my hon. Friend the Member for Worcestershire, South quoted yesterday. He used the obligation in article 109m to regard exchange rates as a matter of common interest. As I pointed out to him yesterday, that is precisely the same obligation as has been accepted by every member state of the European Economic Community, as it then was, and the European Community, as we now know it, since the day when the original six signed the treaty of Rome, because it is contained in virtually the same language in article 107 of the treaty of Rome, which was signed in 1958.

Sir Peter Tapsell (East Lindsey)

My hon. Friend is saying something that has puzzled me for a considerable time. I think that everyone will agree that the single currency and monetary union are at the heart of this whole treaty. If it is not the intention of the Government eventually to join in a single currency, why are they forcing the treaty through? If we do not join in 1996, it makes the whole thing an absolute farce.

Mr. Dorrell

My hon. Friend has raised an important point. Let me answer his question in a slightly elliptical way; it strikes me as the most cogent. Yesterday, my hon. Friend the Member for Worcestershire, South said: I cannot see how we could remain within the European Community as the only country—other than Denmark, perhaps—committed to staying outside the single currency." —[Official Report, 13 January 1993; Vol. 216, c. 986.] My hon. Friend's point was that, whatever the legal position might be, there would be a practical obligation to join a single currency, if one were established.

I do not understand the logic of that argument. My hon. Friend says that he does not wish to become part of a single currency; he then seems to argue that, because he hopes that the United Kingdom will not become part of such a currency, it follows that the continentals will not be able to set it up. That is clearly a nonsensical proposition for any hon. Member to adopt.

The success of the treaty lies in the fact that it allows the United Kingdom to continue to participate in the design of a system of economic and monetary union at which it is likely—I put it no more strongly than that—that some other member states will wish to arrive. It also allows us to preserve freedom to decide, at a later date, whether to join the single-currency monetary union that has been created—with our participation—by our partners on the continent. Furthermore, the treaty clearly establishes the consequences of that decision.

Let me ask the House—including my hon. Friend the Member for East Lindsey (Sir P. Tapsell)—to reflect on the possibility that, if the Bill is rejected, some member states will establish a currency union in any event. My hon. Friend the Member for Worcestershire, South said yesterday that, in his view, the United Kingdom would have no choice but to join that union. If the Bill is not passed, the continentals will be able to establish a single currency without our participating in its design—and my hon. Friend the Member for Worcestershire, South believes that we would have no choice but to join it. Surely that is not a better position than that established by my right hon. Friend the Prime Minister, in which we participate in the design and are free at a later date to decide whether to join.

Mr. Michael Spicer

Having been given a good run yesterday, I did not intend to prolong today's proceedings, but this is becoming ridiculous.

The whole purpose of not ratifying the treaty would be to avoid setting up a single currency, with all the accompanying paraphernalia. All I meant yesterday was this: if the treaty were ratified and the single currency were established, we could not possibly stay outside it. Of course it is theoretically possible for others to set it up and for this country alone to stay outside it, while remaining in the Common Market. But—I am leaving aside the legal point, on which I disagree with my hon. Friend the Minister—it would not work out like that. In practical terms, we could not possibly work within the framework of the new single currency and the institutions attached to it while remaining outside it.

Mr. Dorrell

I entirely understand my hon. Friend's point; I merely seek to develop the logic of the position that he has described. I do not agree with his claim that the establishment of a single currency by other European countries would leave us with no option but to join that currency. If that is his argument, however, I do not see how he can conclude that it is in this country's interests to stand apart from the development of such a currency, if the continental powers choose to establish it. I am a great fan of the House of Commons, but I know that it is not within its competence to deny other European sovereign states free choice to establish a single currency, if that is what they choose to do.

Mr. Marlow

This is a complex issue, and I may be wrong; but I am a little fearful that my hon. Friend misled the Committee earlier. In my previous intervention, I referred to paragraph 2 of article 104c, which relates to the Commission monitoring whether we maintain sufficient proximity to various criteria regarding budget deficit. My hon. Friend said that our right hon. Friend the Prime Minister had negotiated a very effective opt-out on monetary union. Let me draw his attention to protocol 5, on certain provisions relating to the United Kingdom. The provisions excluded do not include paragraph 2 of article 104c(2), though they include paragraph 1 of that article. It appears that paragraph 2 will apply to the United Kingdom regardless of whether we comply with stage 3.

8.45 pm

Mr. Dorrell

That is true, but my hon. Friend should also remember that the penalties contained in a later paragraph of article 104c do not apply unless and until we choose to join monetary union. The effect of article 104c is to commit us to the arrangement described in article 109e: In the second stage, Member States shall endeavour to avoid excessive government deficits. We have accepted that treaty obligation—an obligation which, as I said earlier, we embrace, not because it is in the treaty but because we seek to impose it on ourselves.

Mr. Nicholas Budgen (Wolverhampton, South-West)

Surely, given the existence of such an obligation in the treaty, there is a severe risk that the Commission—or any other element that is important in the structure of the EC—will wish to comment on the size of our deficit from time to time. If that happens, is it not likely to have an adverse effect on markets and to make things extremely difficult?

Mr. Dorrell

It is true that the Commission can comment. It can already comment. A regular feature of the agendas of ECOFIN meetings is examination of the performance of individual member states in relation to published criteria. In that regard, there is nothing new in the treaty. As I told my hon. Friend the Member for Northampton, North (Mr. Marlow), the key point is that the penalty provisions in article 104c do not come into effect unless and until we choose to move to stage 3 of economic and monetary union—and that is our free choice.

Let me now deal briefly with an aspect of the design of EMU, which has already become clear on the face of the treaty.

Mr. Austin Mitchell

Will the Minister give way?

Mr. Dorrell

I do not think that the hon. Gentleman can know what I am going to say. I hope that he will contain himself. After all, I have already given way to him twice.

More than one hon. Member has argued that the prescription for the central bank provided in the treaty of Maastricht would design a bankers' Europe—a Europe in which the central bank would not be accountable to the people of Europe in an acceptable way. If the House is to consider that, it must ask itself what its choice will be for this country when the time comes for us to decide whether to join a single currency and become part of a monetary union. At that point we shall be considering whether we want to accept an obligation to accept membership of a single currency.

Of course, if one is deciding whether to join a single currency, it is a proper consideration to look at the arrangements for the management of that single currency; and if there is a single currency, there must be a monetary authority responsible for managing it. Equally obviously, if it is a currency that will circulate in 12 member states, the monetary authority cannot be one that is firmly rooted in the institutions of one member state. I do not detect much support in the House for the proposition that the monetary authority responsible for all 12 member states should be ECOFIN; still less do I detect enthusiasm for the proposition that it be managed by the European Commission.

There is, of course, plenty of scope for individual hon. Members to have a view about whether a single currency is desirable, but if there is to be a single currency the institutions defined within the treaty are a broadly sensible means of managing that currency, developed from what has been, to some degree, the successful experience both of other member states and of states outside the Community that operate a monetary authority that is distinct from the main economic policy authority within the state. Since it is the commitment that we should retain at member state level responsibility for taxation and for wider economic policy questions, it is inherent in the assumptions of the treaty that economic policy, taxation policy and so forth should be to some extent divorced from monetary policy. The institutions designed and set out in the treaty represent a fair attempt by the Community to learn from the experience of other countries that operate a monetary authority that is different from their taxation and economic authority.

Sir Peter Tapsell

My hon. Friend puts these matters with the utmost clarity, and it is exhilarating to hear a first-class mind explaining these things so clearly, but since, throughout our history, we have never thought it right to establish an autonomous central bank, run by our own fellow countrymen, why should we now in any circumstances wish to set up an autonomous central bank run by foreigners, even if we had a single currency?

Mr. Dorrell

My hon. Friend reinforces my point. If he takes the view that in no circumstances can he contemplate a monetary authority that is not, first, combined with economic policy and taxation and, second, responsible one hundred per cent. to the House, he clearly cannot in any circumstances support a single currency that circulates in 12 member states of the European Community. That is the consequence of taking such a position.

The point that I seek to put to the Committee and to my hon. Friend is that there are many people who believe that a single currency has something to contribute to the development of economic management and an efficient economy within the member states of the Community. If one is interested in that concept, some institutions along the lines of those defined in the treaty seem to me not only a natural consequence of the desire to establish such a currency but the fruit of learning from the experience of those other countries—Germany, the United States and Sweden have all been quoted—which operate monetary policy independently from the main political authority.

It seems to me rather odd to argue that the United States or Germany or Sweden are any less democratic as a result of the institutions that they have chosen to establish.

Sir Peter Tapsell

I am most grateful to my hon. Friend for giving way yet again. May I define what I mean by autonomous? I mean a central bank that is not democratically accountable to democratically elected ministers answerable to a democratic assembly. So even if we had a single European currency. I would argue strongly that we need to have a single European central bank that is democratically accountable and answerable—and that is what we do not have in the Maastricht treaty.

Mr. Dorrell

I understand the point that my hon. Friend makes, but I invite him to design a workable system for a European central bank that is politically accountable to a European political process. I do not believe that it would be easy to do and I certainly do not believe that it would learn the lessons that are available from other central banks that are divorced from the tax and economic management authority.

I should like to get on, Mr. Morris, because I am conscious that I have already detained the Committee for a great deal longer than I had intended.

Mr. Duncan-Smith

I am most grateful to my hon. Friend for giving way, as I know that he is seeking to reach the conclusion of his arguments. I would just like him to clarify an earlier point that I may have missed. It seemed that my hon. Friend was suggesting that we had a position of opting into stage 2 as and when we chose, but article 109e says: The second stage for achieving economic and monetary union shall begin on 1 January 1994. So from that point onwards, do we not therefore cut into stage 2?

Mr. Dorrell

My hon. Friend misheard me. The British protocol and the British position is that we are free to decide whether to join stage 3 of monetary union. We are clearly committed—and we make no bones about it—to stage 2 of the process, at which point monetary policy remains the exclusive concern of member states and national Governments.

I should like, if I may, Mr. Morris, in conclusion, to come back to the essential point.

Mr. Budgen

My hon. Friend seems to commend the British constitution on the basis that it is democratic. Surely the essential characteristic of the British constitution is that we have a sovereign Parliament. It is not necessarily a direct democracy at all. The thing that is different about the other constitutions to which my hon. Friend has drawn the Committee's attention is that they are federal and written structures.

Mr. Dorrell

It would be a brave man who would describe the French political tradition as federal. There is a wide range of political traditions in Europe, some of them federal, some tending to be more centralised. To my knowledge, all operate a written constitution but that does not undermine the basic premise.

Mr. Richard Shepherd

I really am confused now by my hon. Friend. We can opt in, if the House so decides, at the appropriate time to stage 3: is he indicating that we have an opt-in or opt-out choice of stage 2 with its convergence criteria, or are we obliged to follow the convergence criteria? That is the question.

Mr. Dorrell

I am seeking to be crystal clear. We are committed to stage 2. We are not committed to stage 3. The convergence criteria are conditions precedent on joining a single currency. A single currency is not stage 2. A single currency is stage 3. If we decide not to join the single currency, we are not committed to seeking convergence on the conditions required to join it.

I come back to the essential fact. The treaty of Maastricht provides this country with three things. It provides us with the right to participate in the preparation for the arrangements for a single currency. Secondly, it provides us with a choice about whether to join that single currency, which we shall have participated in designing. Thirdly, it sets out clearly the consequences for Britain of joining or not joining that single currency. There is no need for the House or Britain to exercise that choice now. The only decision that the House must make in accepting or rejecting the Bill is whether to participate in preparations for that single currency. I strongly believe that it is in Britain's interests to participate in that process and leave that choice open.

Mr. Macdonald

The important point to seize upon in respect of the Bill and treaty has already been made: Maastricht cannot be seen and judged entirely according to the wording of the treaty alone but must be seen in a wider context—as part of a process, a journey of member states towards ever closer union. There are two reasonable questions to ask about Maastricht: first, whether the journey towards every closer union is desirable and, secondly, whether Maastricht is an appropriate way of continuing that journey. I believe in the goal of ever closer union, but I accept that it is a matter about which one must make a fundamental judgment—either one favours that goal or one does not. I shall not enter into that debate now.

9 pm

Even if one accepts the goal of ever closer union, it is still possible to ask whether Maastricht is the best way of achieving it. Like my hon. Friend the Member for Oxford, East (Mr. Smith), I accept that Maastricht is not perfect. I do not think that any hon. Member would defend Maastricht as the perfect treaty from our own point of view. But it is not drawn up from one point of view: it is an agreement and, necessarily, a compromise between 12 different Governments. The question is not whether it is perfect—[Interruption.]

The Chairman

Order. I apologise for interrupting the hon. Gentleman. May I ask hon. Members who are having private meetings on the Back Benches to protect the interests of other Back Benchers by having their meetings elsewhere?

Mr. Macdonald

I am grateful, Mr. Morris.

The question is not whether Maastricht is perfect, but whether it is an appropriate way forward. I accept that Maastricht is not perfect. Expectations that it should conform in every comma and sentence to the goals of one Government or one country, far less of one party, are unrealistic. One cannot get socialism in one treaty; Maastricht is part of a process. We want to see a subsequent treaty after Maastricht; it must be an ongoing process.

My right hon. Friend the Member for Llanelli (Mr. Davies) spoke of the need for a system of fiscal transfer to make the goal of economic and monetary union operate as effectively and fairly as we would like. I entirely agree. [Interruption.]

Mr. Radice

On a point of order, Mr. Morris. If Conservative Members want to confer among themselves, why do they not go to the 1922 Committee? We listened to their speeches; they should listen to ours.

The Chairman

I should be most grateful if hon. Members below the Gangway on both sides of the House would hold their meetings outside the Chamber.

Mr. Macdonald

The point that I was making is that Maastricht will have to be followed by subsequent treaties to make the process of economic and monetary union operate as we would like. I should like a subsequent treaty to allow fiscal transfer among member states, which will be necessary. I should like a further treaty to give the European Community, via the Commission or other institutions, the ability to raise taxation directly to facilitate the process of fiscal transfer and of borrowing to operate the deficits which will prove necessary from time to time according to the development of the economic cycle. Once we are in the state of economic and monetary union, there will inevitably be constraints on the fiscal and deficit-operating powers of individual member states. Therefore, these powers have to be devolved upwards into Community institutions.

The question is not whether the treaty is perfect, but whether it represents substantial and valuable progress. I argue strongly that it does because, for the first time, it brings in a social dimension, an environmental dimension and valuable political dimensions. The social and environmental dimensions are brought in on their own merits, not as consequences of successfully operating a single market but as goals to be pursued and achieved on their own merits.

Reference has already been made to article 2, which embodies some of the social goals that I find so attractive and valuable in the treaty. I noted that when the Minister referred to article 2 he managed to mention the goal of high employment, but he could not get the words "high social protection" out between his lips. Yet high social protection is what we shall be committed to as a goal of the Community, as a consequence of this treaty. There are a number of provisions in the treaty which relate to the economic and social goals which lie behind much of the treaty.

I was earlier challenged privately by my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) to find a third reference to employment in the treaty. Yesterday I managed to find him a second one, but now I have found a third as well. The second was agreement on social policy, which the Government has unfortunately opted out of but which a Labour Government can easily opt into. The third reference is in article 123—hon. Members will find it on page 31 of the blue document—which refers to the social fund to be set up to provide for social training and to combat unemployment and help people to find employment. Article 127 goes over similar ground and article 130 is perhaps one of the most important of the lot as it talks of the need for economic and social cohesion and particularly of the need for the Community to set itself the goal of bringing forward the more economically backward and disadvantaged areas of the Community and also to bring forward and take special account of the rural areas, which is something that I warmly welcome. Throughout the treaty there are numerous references to social and economic goals which I, as a socialist—and, I hope, all my colleagues on this side—would have warmly welcomed.

Despite those social goals, which are in the Community framework for the first time on their own merits and not as by-products of achieving a single market, and although these are valuable gains, there has been controversy about the economic provisions, particularly those relating to the central bank and the convergence criteria. There has been a very odd aspect of the debate tonight and yesterday about the economic provisions in this treaty. Some Conservative Members and Baroness Thatcher regard these economic provisions as letting in socialism by the back door. Yet, on the Labour side, one or two of my colleagues have argued the reverse—that the treaty nails us to the bed of monetarism for ever. Both cannot possibly be right, and it is just possible that both are wrong. I believe that both are indeed wrong, although by implying that the treaty embodies and places in the framework of the Community certain goals which the Social Democrats would be happy to embrace, Baroness Thatcher is more correct than my hon. Friends who criticise the treaty for being too monetarist.

Sir Teddy Taylor

Does the hon. Gentleman accept that his views, Baroness Thatcher's views or anyone else's views are irrelevant because the article on page 91 entitled "Independence" makes it abundantly clear that, when the central bank is established, no Government of any party, no Chancellor of the Exchequer or Minister will be legally permitted even to make representations to it, to phone or to write, without committing the equivalent of a Euro-crime? Therefore, while he or Baroness Thatcher may be right, the fact is that the central bank will decide. It will be appointed for eight years, and no politician, no Prime Minister, no Chancellor of the Exchequer, Finance Minister or Back Bencher will be permitted even to make representations to it. Perhaps the hon. Gentleman had better keep quiet and wait and see what the bank does. Whatever it does will be its own business, not that of democratic Governments or Parliaments.

Mr. Macdonald

I shall deal later with the question of the independence of the central bank. I was trying to say that, regardless of what it says in the treaty, there are different arguments about how its provisions should be interpreted. Some of my hon. Friends argue that provisions such as that to which the hon. Member for Southend East (Sir T. Taylor) referred make the treaty inevitably monetarist, whereas Conservative hon. Members and Baroness Thatcher say that the same provisions make it an inevitably socialist document. The arguments will continue. In other words, the treaty is not the end of political argument as some have implied because those who suggest that it is the end of political argument cannot agree even about which political argument has been brought to an end by the treaty—some say it is the monetarist argument and others say it is the socialist argument.

Mr. Shore

Irrespective of what different politicians have said about whether the treaty is monetarist, democratic socialist or anything else in character, surely there can be no dispute about the words in the treaty which describe the independence of the central bank. Part of the relevant article states that Governments will undertake not to seek to influence it—there can be no argument about that. Either the words mean what they say or they do not.

Mr. Macdonald

As I said, I shall deal with the independence of the central bank in a moment. My point is that arguments have been advanced from both parties that the treaty is somehow an end to political debate. According to some, it locks us into a monetarist framework for ever, while according to others it locks us into a socialist framework for ever. That is nonsense—both arguments cannot be right. The existence of the two arguments proves that they are both wrong. The treaty will be debated after the Bill has been passed—

Sir Peter Tapsell

There is no antithesis between the hon. Gentleman's description of a socialist and a monetarist situation. Karl Marx was a monetarist, and this country had the most extreme monetarist policy it has had this century when Mr. Denis Healey was Chancellor of the Exchequer.

Mr. Macdonald

It is an interesting point—that socialism and monetarism are the same thing—but it was not exactly what the hon. Gentleman's hon. Friends or mine were arguing.

Sir Teddy Taylor

Seriously, does the hon. Gentleman not accept that it is the end of all political argument if his views, those of the Government and those of the French and German Governments cannot even be communicated to the central bank? I accept that the hon. Gentleman may be a very good Member of Parliament, and he has shown so far that he is a man of integrity. Does not he accept that the political argument about economic policy will be ended if the central bank runs everything, if appointments are for eight years? Would not any Minister be committing a Euro-crime if he were even to write a letter or make a phone call—

The Chairman

Order. The hon. Gentleman is not making an intervention; he is making a second speech.

9.15 pm

Mr. Macdonald

This treaty is not the end of political argument. It is not the end of debate about the future of economic policy. It merely transfers the debate from a purely national stage to a European stage and puts it in a wider context. After it has been passed, there will still be arguments between my hon. Friends and Conservative Members as to what it means and whether it commits us to a more monetarist framework or a more socialist framework or neither.

Mr. Corbyn

Will my hon. Friend give way?

Mr. Macdonald

I have exhausted that point and want to move now to the question of a central bank.

Yesterday my hon. Friend the hon. Member for Hartlepool (Mr. Mandelson) said that price stability is the primary but not the exclusive purpose in having a central bank. Of course, the context in which the bank has to operate will be determined by member states individually and as a Community group, pursuing the goals that are articulated in article 2. Although that is a very cogent and very powerful point, some of my hon. Friends and some Conservative Members—for different reasons, presumably—object to the notion that the bank will not be able to take instructions from any particular member Government. In that sense, it will be independent. In my view, the notion of independence is rather overdone in the context of the central hank and monetary institutions. Experience of the Bank of England indicates that, frequently, the idea of political control, certainly when exercised by Labour Governments, can be quite empty. The direction of influence, rather than being from the Government to the bank, presumably via the Treasury, is often from the City to the Government via the bank. The bank acts not as the instrument of Government policy, particularly Labour Government policy, but rather as a wooden horse for the City of London within Governments of both parties.

Mr. Corbyn

My hon. Friend is right in saying that the Bank of England has often operated against the interests of Labour Governments. That is due to the mandarins who run it. If the hon. Gentleman has such doubts about the running of a bank which theoretically is state-owned and state-controlled, what influence does he think will be possible in the case of an independent central bank dedicated to a course of Euro-monetarism?

Mr. Macdonald

I am glad that my hon. Friend accepts that the Bank of England cannot be regarded simply as an instrument of Governments, especially Labour Governments. Conversely, banks which are nominally independent—for example, in Germany—respond to quite a degree of political influence.

Mr. Alan Simpson (Nottingham, South)

What about recent events?

Mr. Macdonald

Well, there has been the question of unification. There is a question about whether the German Government and the Bundesbank have very different views about interest rates.

The Chairman

Order. I remind the hon. Member that we are debating amendment No. 40, not German interest rates. Perhaps he will address his remarks to the amendment.

Mr. Macdonald

I had no intention of dealing with the details of German interest rates, Mr. Morris, but to make the general point that independent central banks are not immune to political influence. Nor does the notion of an independent central bank mean that Governments are constrained from carrying out policies that my hon. Friends would warmly support.

For example, an independent central bank in the United States did not prevent President Roosevelt from carrying out a new deal programme to revive that economy out of recession. An independent central bank in Sweden has not prevented successive Governments from pursuing policies which many of my hon. Friends would like to see implemented in Britain.

Mr. Llew Smith (Blaenau Gwent)

Is my hon. Friend aware that it may be wrong to make an analogy between the Bank of England and the European central bank because the result of the relationships of elected Governments with the European central bank would become part of European law, part of which would proclaim that democratically elected Governments had no right to advise the bankers of that institution? What, in that event, would be the point of holding elections? Why bother to vote if those elected could do nothing to influence the decision makers?

Mr. Macdonald

I am simply trying to establish that the vision of an independent central bank being inimical to any kind of social development or political progress is not borne out by the experience of other countries with independent central banks. That applies to Sweden and the United States, which have been able to carry through progressive social and economic policies.

The whole question of independence is more complex than legislation would have us believe. Indeed, if we compare the experience of Germany and Sweden with that of the United Kingdom—with Labour Governments here having to wrestle with a supposedly dependent central bank—my argument is borne out.

Mr. Peter Hain (Neath)

On a point of order, Mr. Morris. I apologise for interrupting my hon. Friend's interesting contribution, and I do so only because word has been communicated to us that the Government may be about to move the closure. If that should happen—

The Chairman

Order. The hon. Member is better informed than I am.

Mr. Hain

Further to that point of order, Mr. Morris—

The Chairman

Order. I have ruled on the point that the hon. Member raised. I—the occupant of the Chair—decide whether there should be a closure motion. No such motion has been moved and I am not interested in rumours.

Mr. Macdonald

A European central bank, because it would be composed of people from all the different countries—not just the fast growing and big countries but all countries, including the more economically backward areas of the Community—would provide a more balanced view of Europe's overall economic needs than either the Bundesbank now provides of those needs or the Bank of England, City-dominated and London-centred, provides of Britain's overall economic needs.

Mr. Radice

That is why the French have been such supporters of the idea of a European central bank. They want to mitigate the influence of the Bundesbank. That fact supports the point that my hon. Friend is making.

Mr. Macdonald

My right hon. Friend is right, and what he says relates to a larger point. We must see the treaty and the progress towards monetary union not only in their own terms but in relation to the other options.

The convergence criteria are equally controversial to many of my hon. Friends, who argue that they are hostile to economic growth, to the achievement of high employment, and so on. My first point is—

Mr. William Cash (Stafford)

Will the hon. Gentleman give way?

Mr. Macdonald

I have not yet made my point, so I shall do so before taking an intervention.

My first point is that if we are to move towards a monetary union, clearly there has to be some kind of central monetary and financial control over its members. We have to make sure that one member cannot pursue a course of irresponsible unilateral solo deficit running, which would inevitably have an impact on the other members. That being so, it is reasonable and right that there be some central restraint and control over members of the union—for example, contol over the kind of deficits that they are allowed to run. That happens now within the monetary union of the United Kingdom, in which the central Government exercise control over local authorities, and it must inevitably happen within a monetary union covering Europe as a whole.

Mr. Hain

Will my hon. Friend give way?

Mr. Macdonald

No. I must go on and make my second point.

The key point is that the central control must be flexible. It cannot be rigid; it must allow for differences and for stresses and strains within the monetary union—and the treaty allows for exactly that flexibility.

Mr. Cash

Has it occurred to the hon. Gentleman that the convergence conditions are precisely designed to create unemployment? Furthermore, has it occurred to him that the arrangements for capping under the excessive deficit procedure are designed to ensure that public expenditure will be capped? Does he appreciate that the system will not work, and that the cohesion funds will not make their way from one part of Europe to another, because there is neither the will not the ability to pay? Does he appreciate that the system will therefore collapse?

The Chairman

Order. That is too long an intervention.

Mr. Macdonald

I disagree with the hon. Member for Stafford (Mr. Cash) about the cohesion funds. I believe that there is both a need and a desire to develop a Community in which there is more fiscal transfer than at present. That will be necessary. If it were not for the resistance of the United Kingdom Government, we should have drawn a little closer to that goal at Edinburgh.

Of course the convergence conditions are not designed to create unemployment. They are designed to lead to monetary union. But it is valid to ask whether, in the process of meeting the convergence criteria in order to achieve that goal, we may impose conditions upon ourselves which are too severe, and which may lead to unemployment and so on. I question the idea of 1999 as the date by which monetary union will be achieved. I am sceptical about that.

Mr. Hain

In giving a general blessing to the convergence criteria, to the narrowness and rigidity of the treaty, and to the idea of an independent central European bank—and with that an independent Bank of England—is my hon. Friend in line with Labour party policy as expressed by the Front-Bench spokesmen?

Mr. Macdonald

As I said when I spoke about an independent central bank in an intervention last night, I did not expect that all my hon. Friends would agree with me on that subject. Tonight I have tried to argue that blind resistance to any notion of an independent central bank is not necessarily grounded in real fears about the economic and social consequences involved. If one compares the experience of the United Kingdom to that in Germany or Sweden, my argument is that to have a politically independent central bank does not necessarily lead to the economic and social goals that my hon. Friends want.

The Chairman

Order. I should be grateful if the hon. Gentleman would address the Chair and not simply talk to his hon. Friends. I should also be grateful if he could now conclude talking to his friends.

Mr. Macdonald

I apologise. I will try to work through to a conclusion.

9.30 pm

Mr. Corbyn

On a point of order, Mr. Morris. Did I hear you correctly when you asked my hon. Friend to conclude his remarks, or were you just bringing him to order?

The Chairman

No, the hon. Gentleman misheard me. I asked the hon. Member for Western Isles to conclude his remarks on the point raised by the hon. Member for Neath (Mr. Hain) so that we can get on with the specific amendment.

Mr. Macdonald

I know that other hon. Members wish to participate in the debate. I shall conclude by referring to the convergence criteria. My point is that the convergence criteria are flexible within the wording of the treaty. In the first instance, the treaty provides that some countries may not meet the convergence criteria and, therefore, will not qualify for monetary union. Paragraph 3 in article 109k on page 29 of the treaty provides a specific exemption for countries which, because of their inability or lack of willingness to meet the convergence critiera, do not qualify for monetary union. The article specifies that countries which do not meet the convergence criteria or qualify for monetary union are not subject to the fines, constraints and penalties to which some of my hon. Friends have referred. The Council of Ministers can agree that certain countries are exempt from the fines because of their economic circumstances, and such countries will not qualify for, or achieve the goal of, monetary union.

The framework laid down in the treaty is not so rigid as some would insist that it is; there is room for an opt-out, not just for the United Kingdom but for every country in the Community.

Mr. Gordon Prentice (Pendle)

Even when countries operate under the rules, is it not the case that there may be circumstances in which the member states may decide that the rules do not apply? In the case of fines, the word "may" is used throughout the protocol.

Mr. Macdonald

My hon. Friend is absolutely right. That is the point that I was coming to. It is the flexibility not only of a country joining the monetary union but also of the convergence criteria not applying to a member of the currency union after it has joined the monetary union, and the penalties not applying to a member of the monetary union if it fails to meet the convergence critiera. That is decided by the Council of Ministers. I grant that to my hon. Friends.

Any member of the monetary union must argue its case with the other members of the monetary union on the basis of its particular economic circumstances and say that it cannot meet the inflation criteria, the budget deficit criteria or some of the other criteria. If the country successfully argues its case in the Council of Ministers, the constraints, fines and penalties no longer apply.

Mr. Winnick

I have listened with great care to what my hon. Friend is saying. Despite everything else, does he accept that that takes away the authority of the House of Commons and the Government of the day and places them in a position, at best, in which we would be virtually begging the body involved for permission to overspend in the circumstances that my hon. Friend described? Is my hon. Friend not worried about the erosion of the basic sovereignty of this House of Commons and this country—the very reasons why we are here in the first place—quite apart from the cuts which will undoubtedly occur in public spending?

Mr. Macdonald

Of course I worry about that, but I ask my hon. Friend to face up to reality—which is that we face such constraints whether we are inside a monetary union or outside it. I ask my hon. Friends to recall the history of the 1970s when we had to beg the International Monetary Fund for permission to run a deficit. I ask my hon. Friends to recall the history of the past year and, indeed, this year, when we had to beg the Bundesbank to reduce its interest rates because of the condition of our country.

Mr. Winnick

Until we left the exchange rate mechanism.

Mr. Macdonald

Yes. I remind my hon. Friend that we are still begging the Bundesbank to reduce its interest rates because they place constraints on our ability to deliver our economic goals.

The point is simply that we shall have to operate in an international environment whether we are inside the monetary union or outside it. I argue that we are better placed within the Council of Ministers to convince our colleagues—and frequently our socialist colleagues—within it of the special needs of the United Kingdom than trying to persuade the bankers of the Bundesbank or of the IMF of Britain's special case.

The arguments about the future course of economic policy in Britain will continue after the treaty has been passed. We shall continue to need to negotiate and make agreements with international partners after the treaty has been passed. The treaty is not the watershed that some of my hon. Friends would like to insist that it is. It moves the argument away from a purely national stage on to a European stage. I argue that that strengthens our position and helps us to win our arguments in those spheres in the future.

The Chairman

Rev. Ian—

Mr. Nicholas Baker (Lords Commissioner to the Treasury)

rose in his place and claimed to move, That the Question be now put.

Question put, That the Question be now put:—

The Committee proceeded to a Division—

Rev. Ian Paisley (Antrim, North)

(seated and covered): On a point of order, Mr. Morris.

The Chairman

May I point out that it must be on the procedure relating to the Division, not on any decision of the Chair.

Rev. Ian Paisley

Sir, you called my name and I stood up. The Whip was entirely out of order. I was called and I want you to rule on that. You called my name. I should like a ruling, Sir. You had called my name and, according to the Standing Orders of the House, I was entitled to speak.

The Chairman

The hon. Gentleman is correct, but the closure may be moved at any point. I am not to know when the closure is to be moved. I merely have to judge whether it is an appropriate time for the closure to be accepted or not. I made that decision.

Rev. Ian Paisley

Further to that point of order, Mr. Morris. I have listened carefully to what you said, but if I was called, I was at least entitled to utter some words before being interrupted by the Whip who moved the closure motion; that did not happen.

The Chairman

The hon. Gentleman makes a point, but my judgment was that it was appropriate to conclude the debate as the motion had been put. The closure motion can be moved at any stage of any speech. It is unfortunate that the hon. Gentleman had only just been called.

Mr. Bill Walker

(seated and covered): On a point of order, Mr. Morris.

The Chairman

Is it on procedure?

Mr. Walker

Yes. The procedures of the House are designed, as I understand it, to give the House the opportunity, in Committee or elsewhere, to hear clearly views from all parts of the United Kingdom. When you made your judgment to accept the closure motion, were you satisfied that the interests of all parts of the United Kingdom had been heard during the four-day debate that has taken place, because if not—

The Chairman

Order. I understand the point of order, but I draw the hon. Gentleman's attention to page 406 of "Erskine May", where he will read that the discretion of the Chair is absolute and is not open to dispute.

Mr. Walker

I am not disputing your decision but asking whether, in a constitutional debate, it will enhance the reputation of this Parliament in Scotland. If it does not, this day will be remembered for a long time by Scots.

The Committee having divided: Ayes 298, Noes 240.

Division No. 110]	[9.36
AYES
Adley, Robert	Eggar, Tim
Ainsworth, Peter (East Surrey)	Elletson, Harold
Aitken, Jonathan	Evans, David (Welwyn Hatfield)
Alexander, Richard	Evans, Jonathan (Brecon)
Alison, Rt Hon Michael (Selby)	Evans, Nigel (Ribble Valley)
Alton, David	Evans, Roger (Monmouth)
Amess, David	Evennett, David
Ancram, Michael	Ewing, Mrs Margaret
Arnold, Jacques (Gravesham)	Faber, David
Ashby, David	Fabricant, Michael
Ashdown, Rt Hon Paddy	Faulds, Andrew
Aspinwall, Jack	Fenner, Dame Peggy
Atkins, Robert	Field, Barry (Isle of Wight)
Atkinson, Peter (Hexham)	Fishburn, Dudley
Baker, Nicholas (Dorset North)	Forman, Nigel
Baldry, Tony	Forsyth, Michael (Stirling)
Banks, Matthew (Southport)	Forth, Eric
Banks, Robert (Harrogate)	Foster, Don (Bath)
Bates, Michael	Fowler, Rt Hon Sir Norman
Batiste, Spencer	Fox, Dr Liam (Woodspring)
Beith, Rt Hon A. J.	Fox, Sir Marcus (Shipley)
Bellingham, Henry	Freeman, Roger
Beresford, Sir Paul	French, Douglas
Blackburn, Dr John G.	Gale, Roger
Booth, Hartley	Gallie, Phil
Boswell, Tim	Garel-Jones, Rt Hon Tristan
Bottomley, Peter (Eltham)	Garnier, Edward
Bottomley, Rt Hon Virginia	Gillan, Cheryl
Bowden, Andrew	Goodlad, Rt Hon Alastair
Bowis, John	Goodson-Wickes, Dr Charles
Brandreth, Gyles	Gorst, John
Brazier, Julian	Grant, Sir Anthony (Cambs SW)
Bright, Graham	Greenway, Harry (Ealing N)
Brooke, Rt Hon Peter	Greenway, John (Ryedale)
Brown, M. (Brigg & Cl'thorpes)	Griffiths, Peter (Portsmouth, N)
Browning, Mrs. Angela	Grylls, Sir Michael
Bruce, Ian (S Dorset)	Gummer, Rt Hon John Selwyn
Burns, Simon	Hague, William
Burt, Alistair	Hamilton, Rt Hon Archie (Epsom)
Butler, Peter	Hamilton, Neil (Tatton)
Butterfill, John	Hampson, Dr Keith
Campbell, Menzies (Fife NE)	Hanley, Jeremy
Carlile, Alexander (Montgomry)	Hannam, Sir John
Carlisle, Kenneth (Lincoln)	Hargreaves, Andrew
Carrington, Matthew	Harris, David
Channon, Rt Hon Paul	Haselhurst, Alan
Chaplin, Mrs Judith	Hawkins, Nick
Chapman, Sydney	Hayes, Jerry
Churchill, Mr	Heald, Oliver
Clappison, James	Heath, Rt Hon Sir Edward
Clarke, Rt Hon Kenneth (Ruclif)	Heathcoat-Amory, David
Clifton-Brown, Geoffrey	Hendry, Charles
Coe, Sebastian	Heseltine, Rt Hon Michael
Colvin, Michael	Hicks, Robert
Congdon, David	Higgins, Rt Hon Sir Terence L.
Conway, Derek	Hill, James (Southampton Test)
Coombs, Anthony (Wyre For'st)	Hogg, Rt Hon Douglas (G'tham)
Coombs, Simon (Swindon)	Horam, John
Cope, Rt Hon Sir John	Hordern, Rt Hon Sir Peter
Cormack, Patrick	Howard, Rt Hon Michael
Couchman, James	Howarth, Alan (Strat'rd-on-A)
Currie, Mrs Edwina (S D'by'ire)	Howell, Ralph (North Norfolk)
Curry, David (Skipton & Ripon)	Hunt, Rt Hon David (Wirral W)
Dafis, Cynog	Hunt, Sir John (Ravensbourne)
Davies, Quentin (Stamford)	Hurd, Rt Hon Douglas
Davis, David (Boothferry)	Jack, Michael
Day, Stephen	Jackson, Robert (Wantage)
Devlin, Tim	Johnson Smith, Sir Geoffrey
Dickens, Geoffrey	Johnston, Sir Russell
Dicks, Terry	Jones, Gwilym (Cardiff N)
Dorrell, Stephen	Jones, Ieuan Wyn (Ynys Môn)
Douglas-Hamilton, Lord James	Jones, Nigel (Cheltenham)
Dover, Den	Jopling, Rt Hon Michael
Duncan, Alan	Kellett-Bowman, Dame Elaine
Dunn, Bob	Kennedy, Charles (Ross,C&S)
Durant, Sir Anthony	Key, Robert
Dykes, Hugh	Kilfedder, Sir James

King, Rt Hon Tom	Robathan, Andrew
Kirkhope, Timothy	Roberts, Rt Hon Sir Wyn
Kirkwood, Archy	Robertson, Raymond (Ab'd'n S)
Knight, Mrs Angela (Erewash)	Robinson, Mark (Somerton)
Knight, Greg (Derby N)	Roe, Mrs Marion (Broxbourne)
Knight, Dame Jill (Bir'm E'st'n)	Rowe, Andrew (Mid Kent)
Knox, David	Rumbold, Rt Hon Dame Angela
Kynoch, George (Kincardine)	Ryder, Rt Hon Richard
Lait, Mrs Jacqui	Sackville, Tom
Lamont, Rt Hon Norman	Sainsbury, Rt Hon Tim
Lang, Rt Hon Ian	Salmond, Alex
Leigh, Edward	Scott, Rt Hon Nicholas
Lennox-Boyd, Mark	Shaw, David (Dover)
Lester, Jim (Broxtowe)	Shaw, Sir Giles (Pudsey)
Lidington, David	Shephard, Rt Hon Gillian
Lightbown, David	Shersby, Michael
Lilley, Rt Hon Peter	Smith, Sir Dudley (Warwick)
Lloyd, Peter (Fareham)	Smith, Tim (Beaconsfield)
Llwyd, Elfyn	Soames, Nicholas
Luff, Peter	Speed, Sir Keith
Lynne, Ms Liz	Spencer, Sir Derek
MacGregor, Rt Hon John	Spicer, Sir James (W Dorset)
MacKay, Andrew	Spink, Dr Robert
Maclean, David	Spring, Richard
Maclennan, Robert	Sproat, Iain
McLoughlin, Patrick	Squire, Robin (Hornchurch)
Madel, David	Stanley, Rt Hon Sir John
Maitland, Lady Olga	Steel, Rt Hon Sir David
Major, Rt Hon John	Steen, Anthony
Malone, Gerald	Stephen, Michael
Mans, Keith	Stern, Michael
Marland, Paul	Stewart, Allan
Marshall, John (Hendon S)	Streeter, Gary
Marshall, Sir Michael (Arundel)	Sumberg, David
Martin, David (Portsmouth S)	Sykes, John
Mates, Michael	Taylor, Ian (Esher)
Mawhinney, Dr Brian	Taylor, John M. (Solihull)
Mellor, Rt Hon David	Taylor, Matthew (Truro)
Merchant, Piers	Temple-Morris, Peter
Michie, Mrs Ray (Argyll Bute)	Thomason, Roy
Milligan, Stephen	Thompson, Sir Donald (C'er V)
Mills, Iain	Thompson, Patrick (Norwich N)
Mitchell, Andrew (Gedling)	Thornton, Sir Malcolm
Mitchell, Sir David (Hants NW)	Thurnham, Peter
Monro, Sir Hector	Townsend, Cyril D. (Bexl'yh'th)
Montgomery, Sir Fergus	Tracey, Richard
Moss, Malcolm	Tredinnick, David
Needham, Richard	Trend, Michael
Nelson, Anthony	Trotter, Neville
Neubert, Sir Michael	Twinn, Dr Ian
Newton, Rt Hon Tony	Tyler, Paul
Nicholls, Patrick	Vaughan, Sir Gerard
Nicholson, David (Taunton)	Viggers, Peter
Nicholson, Emma (Devon West)	Waller, Gary
Norris, Steve	Ward, John
Onslow, Rt Hon Sir Cranley	Wardle, Charles (Bexhill)
Oppenheim, Phillip	Waterson, Nigel
Ottaway, Richard	Watts, John
Page, Richard	Wells, Bowen
Paice, James	Wheeler, Rt Hon Sir John
Patnick, Irvine	Whitney, Ray
Patten, Rt Hon John	Widdecombe, Ann
Pattie, Rt Hon Sir Geoffrey	Wiggin, Sir Jerry
Peacock, Mrs Elizabeth	Wigley, Dafydd
Pickles, Eric	Willetts, David
Porter, Barry (Wirral S)	Wilshire, David
Portillo, Rt Hon Michael	Wolfson, Mark
Powell, William (Corby)	Wood, Timothy
Rathbone, Tim	Yeo, Tim
Redwood, John	Young, Sir George (Acton)
Renton, Rt Hon Tim
Richards, Rod	Tellers for the Ayes:
Riddick, Graham	Mr. James Arbuthnot and
Rifkind, Rt Hon. Malcclm	Mr. Robert G. Hughes.

Question accordingly agreed to.

Question put accordingly, That the amendment be made:—

The Committee divided: Ayes 74, Noes 304.

Division No. 110]	[9.36
AYES
Adley, Robert	Eggar, Tim
Ainsworth, Peter (East Surrey)	Elletson, Harold
Aitken, Jonathan	Evans, David (Welwyn Hatfield)
Alexander, Richard	Evans, Jonathan (Brecon)
Alison, Rt Hon Michael (Selby)	Evans, Nigel (Ribble Valley)
Alton, David	Evans, Roger (Monmouth)
Amess, David	Evennett, David
Ancram, Michael	Ewing, Mrs Margaret
Arnold, Jacques (Gravesham)	Faber, David
Ashby, David	Fabricant, Michael
Ashdown, Rt Hon Paddy	Faulds, Andrew
Aspinwall, Jack	Fenner, Dame Peggy
Atkins, Robert	Field, Barry (Isle of Wight)
Atkinson, Peter (Hexham)	Fishburn, Dudley
Baker, Nicholas (Dorset North)	Forman, Nigel
Baldry, Tony	Forsyth, Michael (Stirling)
Banks, Matthew (Southport)	Forth, Eric
Banks, Robert (Harrogate)	Foster, Don (Bath)
Bates, Michael	Fowler, Rt Hon Sir Norman
Batiste, Spencer	Fox, Dr Liam (Woodspring)
Beith, Rt Hon A. J.	Fox, Sir Marcus (Shipley)
Bellingham, Henry	Freeman, Roger
Beresford, Sir Paul	French, Douglas
Blackburn, Dr John G.	Gale, Roger
Booth, Hartley	Gallie, Phil
Boswell, Tim	Garel-Jones, Rt Hon Tristan
Bottomley, Peter (Eltham)	Garnier, Edward
Bottomley, Rt Hon Virginia	Gillan, Cheryl
Bowden, Andrew	Goodlad, Rt Hon Alastair
Bowis, John	Goodson-Wickes, Dr Charles
Brandreth, Gyles	Gorst, John
Brazier, Julian	Grant, Sir Anthony (Cambs SW)
Bright, Graham	Greenway, Harry (Ealing N)
Brooke, Rt Hon Peter	Greenway, John (Ryedale)
Brown, M. (Brigg & Cl'thorpes)	Griffiths, Peter (Portsmouth, N)
Browning, Mrs. Angela	Grylls, Sir Michael
Bruce, Ian (S Dorset)	Gummer, Rt Hon John Selwyn
Burns, Simon	Hague, William
Burt, Alistair	Hamilton, Rt Hon Archie (Epsom)
Butler, Peter	Hamilton, Neil (Tatton)
Butterfill, John	Hampson, Dr Keith
Campbell, Menzies (Fife NE)	Hanley, Jeremy
Carlile, Alexander (Montgomry)	Hannam, Sir John
Carlisle, Kenneth (Lincoln)	Hargreaves, Andrew
Carrington, Matthew	Harris, David
Channon, Rt Hon Paul	Haselhurst, Alan
Chaplin, Mrs Judith	Hawkins, Nick
Chapman, Sydney	Hayes, Jerry
Churchill, Mr	Heald, Oliver
Clappison, James	Heath, Rt Hon Sir Edward
Clarke, Rt Hon Kenneth (Ruclif)	Heathcoat-Amory, David
Clifton-Brown, Geoffrey	Hendry, Charles
Coe, Sebastian	Heseltine, Rt Hon Michael
Colvin, Michael	Hicks, Robert
Congdon, David	Higgins, Rt Hon Sir Terence L.
Conway, Derek	Hill, James (Southampton Test)
Coombs, Anthony (Wyre For'st)	Hogg, Rt Hon Douglas (G'tham)
Coombs, Simon (Swindon)	Horam, John
Cope, Rt Hon Sir John	Hordern, Rt Hon Sir Peter
Cormack, Patrick	Howard, Rt Hon Michael
Couchman, James	Howarth, Alan (Strat'rd-on-A)
Currie, Mrs Edwina (S D'by'ire)	Howell, Ralph (North Norfolk)
Curry, David (Skipton & Ripon)	Hunt, Rt Hon David (Wirral W)
Dafis, Cynog	Hunt, Sir John (Ravensbourne)
Davies, Quentin (Stamford)	Hurd, Rt Hon Douglas
Davis, David (Boothferry)	Jack, Michael
Day, Stephen	Jackson, Robert (Wantage)
Devlin, Tim	Johnson Smith, Sir Geoffrey
Dickens, Geoffrey	Johnston, Sir Russell
Dicks, Terry	Jones, Gwilym (Cardiff N)
Dorrell, Stephen	Jones, Ieuan Wyn (Ynys Môn)
Douglas-Hamilton, Lord James	Jones, Nigel (Cheltenham)
Dover, Den	Jopling, Rt Hon Michael
Duncan, Alan	Kellett-Bowman, Dame Elaine
Dunn, Bob	Kennedy, Charles (Ross,C&S)
Durant, Sir Anthony	Key, Robert
Dykes, Hugh	Kilfedder, Sir James

King, Rt Hon Tom	Robathan, Andrew
Kirkhope, Timothy	Roberts, Rt Hon Sir Wyn
Kirkwood, Archy	Robertson, Raymond (Ab'd'n S)
Knight, Mrs Angela (Erewash)	Robinson, Mark (Somerton)
Knight, Greg (Derby N)	Roe, Mrs Marion (Broxbourne)
Knight, Dame Jill (Bir'm E'st'n)	Rowe, Andrew (Mid Kent)
Knox, David	Rumbold, Rt Hon Dame Angela
Kynoch, George (Kincardine)	Ryder, Rt Hon Richard
Lait, Mrs Jacqui	Sackville, Tom
Lamont, Rt Hon Norman	Sainsbury, Rt Hon Tim
Lang, Rt Hon Ian	Salmond, Alex
Leigh, Edward	Scott, Rt Hon Nicholas
Lennox-Boyd, Mark	Shaw, David (Dover)
Lester, Jim (Broxtowe)	Shaw, Sir Giles (Pudsey)
Lidington, David	Shephard, Rt Hon Gillian
Lightbown, David	Shersby, Michael
Lilley, Rt Hon Peter	Smith, Sir Dudley (Warwick)
Lloyd, Peter (Fareham)	Smith, Tim (Beaconsfield)
Llwyd, Elfyn	Soames, Nicholas
Luff, Peter	Speed, Sir Keith
Lynne, Ms Liz	Spencer, Sir Derek
MacGregor, Rt Hon John	Spicer, Sir James (W Dorset)
MacKay, Andrew	Spink, Dr Robert
Maclean, David	Spring, Richard
Maclennan, Robert	Sproat, Iain
McLoughlin, Patrick	Squire, Robin (Hornchurch)
Madel, David	Stanley, Rt Hon Sir John
Maitland, Lady Olga	Steel, Rt Hon Sir David
Major, Rt Hon John	Steen, Anthony
Malone, Gerald	Stephen, Michael
Mans, Keith	Stern, Michael
Marland, Paul	Stewart, Allan
Marshall, John (Hendon S)	Streeter, Gary
Marshall, Sir Michael (Arundel)	Sumberg, David
Martin, David (Portsmouth S)	Sykes, John
Mates, Michael	Taylor, Ian (Esher)
Mawhinney, Dr Brian	Taylor, John M. (Solihull)
Mellor, Rt Hon David	Taylor, Matthew (Truro)
Merchant, Piers	Temple-Morris, Peter
Michie, Mrs Ray (Argyll Bute)	Thomason, Roy
Milligan, Stephen	Thompson, Sir Donald (C'er V)
Mills, Iain	Thompson, Patrick (Norwich N)
Mitchell, Andrew (Gedling)	Thornton, Sir Malcolm
Mitchell, Sir David (Hants NW)	Thurnham, Peter
Monro, Sir Hector	Townsend, Cyril D. (Bexl'yh'th)
Montgomery, Sir Fergus	Tracey, Richard
Moss, Malcolm	Tredinnick, David
Needham, Richard	Trend, Michael
Nelson, Anthony	Trotter, Neville
Neubert, Sir Michael	Twinn, Dr Ian
Newton, Rt Hon Tony	Tyler, Paul
Nicholls, Patrick	Vaughan, Sir Gerard
Nicholson, David (Taunton)	Viggers, Peter
Nicholson, Emma (Devon West)	Waller, Gary
Norris, Steve	Ward, John
Onslow, Rt Hon Sir Cranley	Wardle, Charles (Bexhill)
Oppenheim, Phillip	Waterson, Nigel
Ottaway, Richard	Watts, John
Page, Richard	Wells, Bowen
Paice, James	Wheeler, Rt Hon Sir John
Patnick, Irvine	Whitney, Ray
Patten, Rt Hon John	Widdecombe, Ann
Pattie, Rt Hon Sir Geoffrey	Wiggin, Sir Jerry
Peacock, Mrs Elizabeth	Wigley, Dafydd
Pickles, Eric	Willetts, David
Porter, Barry (Wirral S)	Wilshire, David
Portillo, Rt Hon Michael	Wolfson, Mark
Powell, William (Corby)	Wood, Timothy
Rathbone, Tim	Yeo, Tim
Redwood, John	Young, Sir George (Acton)
Renton, Rt Hon Tim
Richards, Rod	Tellers for the Ayes:
Riddick, Graham	Mr. James Arbuthnot and
Rifkind, Rt Hon. Malcclm	Mr. Robert G. Hughes.
NOES
Abbott, Ms Diane	Allen, Graham
Adams, Mrs Irene	Anderson, Donald (Swansea E)
Ainger, Nick	Anderson, Ms Janet (Ros'dale)
Ainsworth, Robert (Cov'try NE)	Armstrong, Hilary

Austin-Walker, John	Gill, Christopher
Banks, Tony (Newham NW)	Godman, Dr Norman A.
Barnes, Harry	Godsiff, Roger
Battle, John	Golding, Mrs Llin
Bayley, Hugh	Gordon, Mildred
Beckett, Margaret	Gorman, Mrs Teresa
Bell, Stuart	Grant, Bernie (Tottenham)
Benn, Rt Hon Tony	Griffiths, Win (Bridgend)
Benton, Joe	Grocott, Bruce
Bermingham, Gerald	Hain, Peter
Berry, Dr. Roger	Hall, Mike
Betts, Clive	Hanson, David
Boateng, Paul	Hardy, Peter
Body, Sir Richard	Harman, Ms Harriet
Boyce, Jimmy	Hawksley, Warren
Boyson, Rt Hon Sir Rhodes	Heppell, John
Bradley, Keith	Hill, Keith (Streatham)
Bray, Dr Jeremy	Hinchliffe, David
Brown, N. (N'c'tle upon Tyne E)	Hood, Jimmy
Budgen, Nicholas	Hoon, Geoffrey
Burden, Richard	Howarth, George (Knowsley N)
Byers, Stephen	Hoyle, Doug
Caborn, Richard	Hughes, Kevin (Doncaster N)
Callaghan, Jim	Hughes, Robert (Aberdeen N)
Campbell, Mrs Anne (C'bridge)	Hughes, Roy (Newport E)
Campbell, Ronnie (Blyth V)	Hutton, John
Campbell-Savours, D. N.	Illsley, Eric
Canavan, Dennis	Ingram, Adam
Cann, Jamie	Jackson, Glenda (H'stead)
Carlisle, John (Luton North)	Jackson, Helen (Shef'ld, H)
Cash, William	Jamieson, David
Chisholm, Malcolm	Janner, Greville
Clapham, Michael	Jessel, Toby
Clarke, Eric (Midlothian)	Jones, Barry (Alyn and D'side)
Clwyd, Mrs Ann	Jones, Jon Owen (Cardiff C)
Coffey, Ann	Jones, Lynne (B'ham S O)
Cohen, Harry	Jones, Martyn (Clwyd, SW)
Connarty, Michael	Jowell, Tessa
Cook, Frank (Stockton N)	Kaufman, Rt Hon Gerald
Cook, Robin (Livingston)	Kennedy, Jane (Lpool Brdgn)
Corbett, Robin	Khabra, Piara S.
Corbyn, Jeremy	Kilfoyle, Peter
Corston, Ms Jean	Knapman, Roger
Cousins, Jim	Lawrence, Sir Ivan
Cox, Tom	Leighton, Ron
Cran, James	Lewis, Terry
Cryer, Bob	Litherland, Robert
Cummings, John	Lloyd, Tony (Stratford)
Cunliffe, Lawrence	Lord, Michael
Cunningham, Jim (Covy SE)	McAllion, John
Cunningham, Dr John (C'p'l'nd)	McAvoy, Thomas
Darling, Alistair	McCartney, Ian
Davidson, Ian	McCrea, Rev William
Davies, Bryan (Oldham C'tral)	Macdonald, Calum
Davies, Rt Hon Denzil (Llanelli)	McFall, John
Davis, Terry (B'ham, H'dge H'I)	McKelvey, William
Denham, John	Mackinlay, Andrew
Dewar, Donald	McLeish, Henry
Dixon, Don	McWilliam, John
Dobson, Frank	Madden, Max
Donohoe, Brian H.	Mahon, Alice
Dunnachie, Jimmy	Mandelson, Peter
Dunwoody, Mrs Gwyneth	Marek, Dr John
Eagle, Ms Angela	Marlow, Tony
Eastham, Ken	Marshall, Jim (Leicester, S)
Enright, Derek	Martin, Michael J. (Springburn)
Etherington, Bill	Michael, Alun
Evans, John (St Helens N)	Michie, Bill (Sheffield Heeley)
Fatchett, Derek	Milburn, Alan
Field, Frank (Birkenhead)	Miller, Andrew
Fisher, Mark	Mitchell, Austin (Gt Grimsby)
Flynn, Paul	Molyneaux, Rt Hon James
Foster, Derek (B'p Auckland)	Moonie, Dr Lewis
Fraser, John	Morgan, Rhodri
Fry, Peter	Morley, Elliot
Galbraith, Sam	Morris, Rt Hon A. (Wy'nshawe)
Galloway, George	Morris, Estelle (B'ham Yardley)
Gardiner, Sir George	Morris, Rt Hon J. (Aberavon)
George, Bruce	Mowlam, Marjorie
Gerrard, Neil	Mudie, George

Mullin, Chris	Smith, C. (Isl'ton S & F'sbury)
Murphy, Paul	Smith, Llew (Blaenau Gwent)
O'Brien, Michael (N W'kshire)	Snape, Peter
O'Brien, William (Normanton)	Soley, Clive
O'Hara, Edward	Spearing, Nigel
Olner, William	Spellar, John
Orme, Rt Hon Stanley	Spicer, Michael (S Worcs)
Paisley, Rev Ian	Squire, Rachel (Dunfermline W)
Pawsey, James	Stevenson, George
Pendry, Tom	Strang, Dr. Gavin
Pickthall, Colin	Straw, Jack
Pike, Peter L.	Sweeney, Walter
Porter, David (Waveney)	Tapsell, Sir Peter
Powell, Ray (Ogmore)	Taylor, Mrs Ann (Dewsbury)
Prentice, Ms Bridget (Lew'm E)	Taylor, Rt Hon John D. (Strgfd)
Prentice, Gordon (Pendle)	Taylor, Sir Teddy (Southend, E)
Primarolo, Dawn	Thompson, Jack (Wansbeck)
Purchase, Ken	Tipping, Paddy
Quin, Ms Joyce	Trimble, David
Radice, Giles	Turner, Dennis
Raynsford, Nick	Vaz, Keith
Redmond, Martin	Walker, Bill (N Tayside)
Reid, Dr John	Walker, Rt Hon Sir Harold
Robertson, George (Hamilton)	Wardell, Gareth (Gower)
Robinson, Peter (Belfast E)	Wareing, Robert N
Roche, Mrs. Barbara	Watson, Mike
Ross, Ernie (Dundee W)	Wicks, Malcolm
Rowlands, Ted	Williams, Rt Hon Alan (Sw'n W)
Ruddock, Joan	Williams, Alan W (Carmarthen)
Sheerman, Barry	Winnick, David
Sheldon, Rt Hon Robert	Winterton, Mrs Ann (Congleton)
Shepherd, Richard (Aldridge)	Winterton, Nicholas (Macc'f'ld)
Shore, Rt Hon Peter	Wright, Dr Tony
Short, Clare	Young, David (Bolton SE)
Simpson, Alan
Skeet, Sir Trevor	Tellers for the Noes:
Skinner, Dennis	Mr. Alan Meale and
Smith, Andrew (Oxford E)	Mr. Gordon McMaster.

Division No. 111]	[9.51 pm
AYES
Abbott, Ms Diane	Jones, Lynne (B'ham S O)
Adams, Mrs Irene	Lawrence, Sir Ivan
Austin-Walker, John	Leighton, Ron
Barnes, Harry	Lewis, Terry
Benn, Rt Hon Tony	Litherland, Robert
Body, Sir Richard	Lord, Michael
Boyson, Rt Hon Sir Rhodes	McAllion, John
Budgen, Nicholas	McCrea, Rev William
Campbell, Ronnie (Blyth V)	McWilliam, John
Canavan, Dennis	Madden, Max
Cann, Jamie	Mahon, Alice
Carlisle, John (Luton North)	Marlow, Tony
Cash, William	Mitchell, Austin (Gt Grimsby)
Chisholm, Malcolm	Molyneaux, Rt Hon James
Cohen, Harry	Mullin, Chris
Corbyn, Jeremy	Paisley, Rev Ian
Corston, Ms Jean	Pawsey, James
Cran, James	Porter, David (Waveney)
Cryer, Bob	Prentice, Gordon (Pendle)
Cummings, John	Robinson, Peter (Belfast E)
Davies, Rt Hon Denzil (Llanelli)	Rowlands, Ted
Davis, Terry (B'ham, H'dge H'I)	Shepherd, Richard (Aldridge)
Dunwoody, Mrs Gwyneth	Shore, Rt Hon Peter
Fry, Peter	Simpson, Alan
Galloway, George	Skeet, Sir Trevor
Gardiner, Sir George	Skinner, Dennis
Gerrard, Neil	Smith, Llew (Blaenau Gwent)
Gill, Christopher	Snape, Peter
Godman, Dr Norman A.	Spearing, Nigel
Greenway, Harry (Ealing N)	Spicer, Michael (S Worcs)
Hall, Mike	Sweeney, Walter
Hawksley, Warren	Tapsell, Sir Peter
Jessel, Toby	Taylor, Rt Hon John D. (Strgfd)

Taylor, Sir Teddy (Southend, E)	Winterton, Mrs Ann (Congleton)
Trimble, David	Winterton, Nicholas (Macc'f'ld)
Walker, Bill (N Tayside)
Wilkinson, John	Tellers for the Ayes:
Williams, Rt Hon Alan (Sw'n W)	Mrs. Teresa Gorman and
Winnick, David	Mr. Roger Knapman.
NOES
Adley, Robert	Dover, Den
Ainsworth, Peter (East Surrey)	Duncan, Alan
Aitken, Jonathan	Dunn, Bob
Alexander, Richard	Durant, Sir Anthony
Alison, Rt Hon Michael (Selby)	Dykes, Hugh
Alton, David	Eggar, Tim
Amess, David	Elletson, Harold
Ancram, Michael	Evans, David (Welwyn Hatfield)
Arbuthnot, James	Evans, Jonathan (Brecon)
Arnold, Jacques (Gravesham)	Evans, Nigel (Ribble Valley)
Ashby, David	Evans, Roger (Monmouth)
Ashdown, Rt Hon Paddy	Evennett, David
Aspinwall, Jack	Ewing, Mrs Margaret
Atkins, Robert	Faber, David
Atkinson, Peter (Hexham)	Fabricant, Michael
Baker, Nicholas (Dorset North)	Fairbairn, Sir Nicholas
Baldry, Tony	Faulds, Andrew
Banks, Matthew (Southport)	Fenner, Dame Peggy
Banks, Robert (Harrogate)	Field, Barry (Isle of Wight)
Bates, Michael	Fishburn, Dudley
Batiste, Spencer	Flynn, Paul
Beith, Rt Hon A. J.	Forman, Nigel
Bellingham, Henry	Forsyth, Michael (Stirling)
Beresford, Sir Paul	Forth, Eric
Blackburn, Dr John G.	Foster, Don (Bath)
Booth, Hartley	Fowler, Rt Hon Sir Norman
Boswell, Tim	Fox, Dr Liam (Woodspring)
Bottomley, Peter (Eltham)	Fox, Sir Marcus (Shipley)
Bottomley, Rt Hon Virginia	Freeman, Roger
Bowden, Andrew	French, Douglas
Bowis, John	Gale, Roger
Brandreth, Gyles	Gallie, Phil
Brazier, Julian	Gapes, Mike
Bright, Graham	Garel-Jones, Rt Hon Tristan
Brooke, Rt Hon Peter	Garnier, Edward
Brown, M. (Brigg & Cl'thorpes)	Gillan, Cheryl
Browning, Mrs. Angela	Goodlad, Rt Hon Alastair
Bruce, Ian (S Dorset)	Goodson-Wickes, Dr Charles
Burns, Simon	Gorst, John
Burt, Alistair	Grant, Sir Anthony (Cambs SW)
Butler, Peter	Greenway, John (Ryedale)
Butterfill, John	Grylls, Sir Michael
Campbell, Menzies (Fife NE)	Gummer, Rt Hon John Selwyn
Carlile, Alexander (Montgomry)	Hague, William
Carlisle, Kenneth (Lincoln)	Hamilton, Rt Hon Archie (Epsom)
Carrington, Matthew	Hamilton, Neil (Tatton)
Channon, Rt Hon Paul	Hampson, Dr Keith
Chaplin, Mrs Judith	Hanley, Jeremy
Churchill, Mr	Hannam, Sir John
Clappison, James	Hargreaves, Andrew
Clarke, Rt Hon Kenneth (Ruclif)	Harris, David
Clifton-Brown, Geoffrey	Haselhurst, Alan
Coe, Sebastian	Hawkins, Nick
Colvin, Michael	Hayes, Jerry
Congdon, David	Heald, Oliver
Conway, Derek	Heath, Rt Hon Sir Edward
Coombs, Anthony (Wyre For'st)	Heathcoat-Amory, David
Coombs, Simon (Swindon)	Hendry, Charles
Cope, Rt Hon Sir John	Heseltine, Rt Hon Michael
Cormack, Patrick	Hicks, Robert
Couchman, James	Higgins, Rt Hon Sir Terence L.
Currie, Mrs Edwina (S D'by'ire)	Hill, James (Southampton Test)
Curry, David (Skipton & Ripon)	Hogg, Rt Hon Douglas (G'tham)
Dafis, Cynog	Horam, John
Davies, Quentin (Stamford)	Hordern, Rt Hon Sir Peter
Davis, David (Boothferry)	Howard, Rt Hon Michael
Day, Stephen	Howarth, Alan (Strat'rd-on-A)
Devlin, Tim	Howell, Rt Hon David (G'dford)
Dickens, Geoffrey	Howell, Ralph (North Norfolk)
Dicks, Terry	Hughes Robert G. (Harrow W)
Dorrell, Stephen	Hunt, Rt Hon David (Wirral W)
Douglas-Hamilton, Lord James	Hunt, Sir John (Ravensbourne)

Hurd, Rt Hon Douglas	Porter, Barry (Wirral S)
Jack, Michael	Portillo, Rt Hon Michael
Jackson, Robert (Wantage)	Powell, William (Corby)
Johnson Smith, Sir Geoffrey	Radice, Giles
Johnston, Sir Russell	Rathbone, Tim
Jones, Gwilym (Cardiff N)	Redwood, John
Jones, Ieuan Wyn (Ynys Môn)	Renton, Rt Hon Tim
Jones, Nigel (Cheltenham)	Richards, Rod
Jopling, Rt Hon Michael	Riddick, Graham
Kellett-Bowman, Dame Elaine	Rifkind, Rt Hon. Malcolm
Kennedy, Charles (Ross,C&S)	Robathan, Andrew
Key, Robert	Roberts, Rt Hon Sir Wyn
Kilfedder, Sir James	Robertson, Raymond (Ab'd'n S)
King, Rt Hon Tom	Robinson, Mark (Somerton)
Kirkhope, Timothy	Roe, Mrs Marion (Broxbourne)
Kirkwood, Archy	Rowe, Andrew (Mid Kent)
Knight, Mrs Angela (Erewash)	Rumbold, Rt Hon Dame Angela
Knight, Greg (Derby N)	Ryder, Rt Hon Richard
Knight, Dame Jill (Bir'm E'st'n)	Sackville, Tom
Knox, David	Sainsbury, Rt Hon Tim
Kynoch, George (Kincardine)	Salmond, Alex
Lait, Mrs Jacqui	Scott, Rt Hon Nicholas
Lamont, Rt Hon Norman	Shaw, David (Dover)
Lang, Rt Hon Ian	Shaw, Sir Giles (Pudsey)
Leigh, Edward	Shephard, Rt Hon Gillian
Lennox-Boyd, Mark	Shepherd, Colin (Hereford)
Lester, Jim (Broxtowe)	Shersby, Michael
Lidington, David	Smith, Sir Dudley (Warwick)
Lightbown, David	Smith, Tim (Beaconsfield)
Lilley, Rt Hon Peter	Soames, Nicholas
Lloyd, Peter (Fareham)	Speed, Sir Keith
Llwyd, Elfyn	Spencer, Sir Derek
Luff, Peter	Spicer, Sir James (W Dorset)
Lynne, Ms Liz	Spink, Dr Robert
Macdonald, Calum	Spring, Richard
MacGregor, Rt Hon John	Sproat, Iain
MacKay, Andrew	Squire, Robin (Hornchurch)
Maclean, David	Stanley, Rt Hon Sir John
Maclennan, Robert	Steel, Rt Hon Sir David
McLoughlin, Patrick	Steen, Anthony
Madel, David	Stephen, Michael
Maitland, Lady Olga	Stern, Michael
Major, Rt Hon John	Stewart, Allan
Malone, Gerald	Streeter, Gary
Mans, Keith	Sumberg, David
Marland, Paul	Sykes, John
Marshall, John (Hendon S)	Taylor, Ian (Esher)
Marshall, Sir Michael (Arundel)	Taylor, John M. (Solihull)
Martin, David (Portsmouth S)	Taylor, Matthew (Truro)
Mates, Michael	Temple-Morris, Peter
Mawhinney, Dr Brian	Thomason, Roy
Mellor, Rt Hon David	Thompson, Sir Donald (C'er V)
Merchant, Piers	Thompson, Patrick (Norwich N)
Michie, Mrs Ray (Argyll Bute)	Thornton, Sir Malcolm
Milligan, Stephen	Thurnham, Peter
Mills, Iain	Townsend, Cyril D. (Bexl'yh'th)
Mitchell, Andrew (Gedling)	Tracey, Richard
Mitchell, Sir David (Hants NW)	Tredinnick, David
Monro, Sir Hector	Trend, Michael
Montgomery, Sir Fergus	Trotter, Neville
Moss, Malcolm	Twinn, Dr Ian
Needham, Richard	Tyler, Paul
Nelson, Anthony	Vaughan, Sir Gerard
Neubert, Sir Michael	Viggers, Peter
Newton, Rt Hon Tony	Waldegrave, Rt Hon William
Nicholls, Patrick	Waller, Gary
Nicholson, David (Taunton)	Ward, John
Nicholson, Emma (Devon West)	Wardle, Charles (Bexhill)
Norris, Steve	Waterson, Nigel
Onslow, Rt Hon Sir Cranley	Watts, John
Oppenheim, Phillip	Wells, Bowen
Ottaway, Richard	Wheeler, Rt Hon Sir John
Page, Richard	Whitney, Ray
Paice, James	Widdecombe, Ann
Patnick, Irvine	Wiggin, Sir Jerry
Patten, Rt Hon John	Wigley, Dafydd
Pattie, Rt Hon Sir Geoffrey	Willetts, David
Peacock, Mrs Elizabeth	Wilshire, David
Pickles, Eric	Wolfson, Mark

Yeo, Tim	Tellers for the Noes:
Young, Sir George (Acton)	Mr. Sydney Chapman and
	Mr. Timothy Wood.

Question accordingly negatived.

Mr. Budgen

On a point of order, Mr. Morris.

The Chairman

I will take points of order afterwards.

It being after Ten o'clock, THE CHAIRMAN left the Chair to report progress and ask leave to sit again.

Committee report progress; to sit again tomorrow.