HC Deb 11 July 1994 vol 246 cc685-761

Order for Second Reading read.

4.24 pm
Mr. Tony Marlow (Northampton, North)

On a point of order, Madam Speaker. The Bill introduces a treaty whose provisions concern four applicant members joining the European Community. The provisions of the treaty are consequent on all four members' joining. If one of those members, or more—as a result of referendums—were not then to join the Community, what impact would that then have on this legislation and what consequent procedures would we need?

Madam Speaker

That is a very good question, which the Foreign Secretary may attempt to answer during the debate.

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

I beg to move, That the Bill be now read a Second time.

It is quite neat for the Second Reading debate to follow the Prime Minister's account of the summit in Naples. One of the themes of that summit was the need for international institutions to adapt to changed circumstances. For the world has changed. Economies that were recently impoverished are now competing successfully with ours; we have a world without communism in which the socialist model of development is largely discredited, and a Europe without the Berlin wall in which the words "peace, freedom and democracy" have one meaning and not two.

Those are new thoughts. Have we really understood the implications of such changes for our institutions? We know how earthquakes happen: when the tectonic plates of the earth shift, earthquakes are followed by aftershocks, and it takes time for the terrain to stabilise and become familiar again. The international terrain is not stable now; it is not yet familiar again; the aftershocks are still with us.

We have already made important changes in our institutions. The Bretton Woods institutions mentioned by the right hon. Member for Tweeddale, Ettrick and Lauderdale (Sir D. Steel)—the IMF and the World bank, which are 50 years old this week—are changing their role and their membership. The GATT is about to become the World Trade Organisation. NATO is adjusting to a new security landscape, reaching eastward through "Partnership for Peace". There is discussion about reforming the United Nations Security Council. The G7 is becoming the G8, and, I hope, is returning to its traditional format of the "fireside chat".

We have made all those changes, but we shall certainly need more. That applies—particularly this afternoon—to the European Union. Old certainties are changing; unthinking centralism is a theme of the past. Ideas and structures that made sense—good sense, perhaps—for the six original members will make no sense for the European Union of 20 members, or probably more, for which we are heading. That is why subsidiarity, respect for national traditions and diversity are growing themes for the future.

One such theme that is influencing the future of the European Union powerfully is the theme of enlargement. That will apply first to the four European Free Trade Association countries—Austria, Finland, Norway and Sweden—and then, I hope, will apply further east. That is why the Bill is important: it shows that the European Union recognises the need for change in its external as well as its internal affairs.

The Bill follows from the treaty of accession between the European Union and Norway, Austria, Finland and Sweden, which was signed two weeks ago in Corfu. It will ensure that Britain is able to honour the obligations laid down in that treaty; its passage is essential if we are to ratify the accession treaty and allow those four countries to accede to the Union. The Bill gives effect to the treaty in United Kingdom law by adding it to the list of Community treaties in section 1(2) of the European Communities Act 1972, and clause 2 also approves the treaty for the purposes of the European Parliamentary Elections Act 1978.

Let me now deal with the point of order raised by my hon. Friend the Member for Northampton, North (Mr. Marlow). Article 2 of the treaty allows for technical adjustments to be made if an acceding state fails to ratify. My hon. Friend made the reasonable point that each of the four applicants would need referendums in their own countries under their own constitutional procedures; one referendum has been conducted successfully, and three are awaited. But the people who drafted the treaty were aware of that point. That is why they provided in the treaty for technical adjustments to be made by the Council of the European Union if an acceding state failed to ratify.

Mr. Marlow

I am grateful to my right hon. Friend for that helpful information. But the technical adjustments could affect the balance in qualified majority voting. Is there a formula that my right hon. Friend could introduce to the House? Or could the balance be changed during the technical adjustments—in which case what instrument would be introduced to ratify those adjustments?

Mr. Hurd

We shall certainly follow up that point. My hon. Friend the Minister of State can deal with it at greater length in his winding-up speech. There is provision in the treaty to deal with that matter. If such action were needed, the Council of Ministers would make a decision, which would be followed by our own parliamentary procedure. Details of that procedure may be given by my hon. Friend the Minister of State. However, my hon. Friend's point has been covered in the treaty.

Mr. Nigel Spearing (Newham, South)

I am grateful to the Foreign Secretary for giving way, but it might be better to deal with this matter now. The Bill refers to the treaty on accession to the European Union, whereas the Act that joined us to what is commonly known as the Maastricht treaty referred only to titles II, III and IV of that treaty. Will the Secretary of State tell us why that formula was not repeated here, with reference only to titles II, III and IV—which of course have the legislative effect, as distinct from those under the prerogative of the Crown?

Mr. Hurd

We are advised that there is no need to do otherwise than is provided for in the Bill because there would be no effect in United Kingdom law. The Bill covers the points that it needs to cover and not others.

This is a short but significant Bill. I shall try to explain briefly why enlargement to cover the four countries will substantially benefit Britain, our consumers and our businesses. The Bill and the treaty point the European Union in the right direction. We are showing by enlargement that we realise that half of Europe is not the whole of Europe—that the European Union is not an exclusive club but an extended family of nations. No family can shut out its members and stay at ease with itself. We should not treat our success in the European Union as a commodity that we hoard to ourselves. It is a model to emulate and a prize to be shared.

We have held that view in this country for a long time. No other Government have argued as forcefully as ours that the European Union should open its doors. No other leaders have argued as strongly as the Prime Minister and Baroness Thatcher that Europe is not an exclusive club.

Mr. Giles Radice (Durham, North)

Will the right hon. Gentleman give way?

Mr. Hurd

No. I should like to continue for a little while.

When we began the argument, it was very controversial. At first, it met stiff resistance. The hon. Member for Durham, North (Mr. Radice) knows that because he has followed these matters and held more consistent opinions on them than most Opposition Members. He knows perfectly well that the idea of widening the Community jarred harshly with the old-fashioned idea that European construction came only by the steady centralisation of power in Brussels. The cry was, "We must deepen, we must not widen." Opponents of enlargement, who were strong at one time, saw it as an unwelcome distraction from the gradual centralisation of power. We had to argue at Maastricht—and we prevailed in the argument—that the treaty should include the right signal that any member state could apply to become a member of the Union.

Mr. Radice

It is true that the Government have been in favour of enlargement and I congratulate them on that, but it is a bit much not to acknowledge that the united Germany has always been in favour of enlargement as well. It was Mr. Kohl who said that the borders of the European Union should not end on the Oder-Neisse line, and he was right.

Mr. Hurd

Indeed, Mr. Kohl and the unified Germany have made that point; we were making it substantially in advance of that.

Mr. Radice


Mr. Hurd

History shows that clearly.

We kept up the impetus on behalf of enlargement during the British presidency and at the European Council in Edinburgh in December 1992. That was when the decision was taken to open negotiations promptly with Austria, Finland, Norway and Sweden. At the same time, we held out the prospect of membership for the new democracies of eastern Europe. It was really no accident that it was our presidency that marked the decisive point in the history of enlargement.

Those four countries are, of course, all members of the European Free Trade Association. We in Britain thought for a time that the European free trade area would provide an alternative to membership of the European Economic Community—a way of having our cake and eating it. We saw it as a means of increasing trade and co-operation with Europe without having to give up any power to supranational institutions. After a year or so—I am talking of 30 years ago—we realised that that was an error and that a free trade area alone would not provide the European prosperity that we desired. We also realised that the European Community, with the powerful economies of Germany and France at its heart, was destined to be a major player in Europe and that it would not be to our benefit to remain outside. That is why, with the Danes, we left EFTA in 1972 and joined the European Community.

A number of European countries could not do that. The Norwegian Government wanted to join the EC, but the Norwegian people voted against membership in 1972. Finland's long border with Russia made it very cautious about provoking the Soviet Union by moving towards closer integration with western Europe. Then the plates shifted; the world changed. The cold war ended and the collapse of the Soviet threat allowed Finland and the other neutral countries—Austria, Sweden and Switzerland—to look again at their policies towards western European institutions. They no longer felt that they had to remain outside for security reasons and they began to weigh up the benefits of EC membership.

Mr. Nicholas Budgen (Wolverhampton, South-West)

Can my right hon. Friend give us some explanation of what he understands by the word "deepening" in a European context? We want to know whether we are to welcome those four countries so that the European Union may be loosened up or whether we shall be told continuously that it is possible to have further deepening as well as enlargement and even that it may become necessary to have a single currency because we have more members in the European Union.

Mr. Hurd

I can think of several arguments for a single currency, but not that one. The two processes—deepening and widening—have to be considered separately on their merits. What we rejected in the early days was the idea that we could not enlarge because we had to spend all our time deepening. The two things are entirely separate. What we are dealing with here is enlargement. The treaty of Maastricht is the basis on which the Community will rest for the next few years. What we are discussing now is the extent to which the Community should be enlarged on that basis.

Mr. Hugh Dykes (Harrow, East)

May I none the less coax my right hon. Friend into agreeing that the striking feature about the four countries now joining, subject to the referendums, is that they have all strongly reiterated their adherence to deeper integration as the only way in which to take the Community forward? They have all said that with great emphasis in all their official statements.

Mr. Hurd

Before I close, I shall analyse rather more clearly what the role of the four countries is likely to be. I shall spend a little time on that before I conclude.

I was talking about what happened when the cold war ended and how that altered the view of the four countries. Something else happened. Around the same time, or a year or two earlier, the member states of the European Community decided to form a single market. The Single European Act in 1986 marked a new stage in the development of the Community. Its businesses were gradually able to operate on a truly European scale for Europe-wide growth and prosperity. The EFTA countries rightly feared that they would be sidelined as business and investment were drawn to the greater opportunities then offered by the Community. That is why the EFTA countries joined the Community to form the European Economic Area which covered all the EFTA countries except Switzerland and virtually all the single market legislation of the Community.

So the four countries with which we are concerned today are already members of the single market. They have already taken on most of the European Community legislation in that area. The point that I am making, however, is that they are not satisfied with that. They have no real say in the drafting of new legislation which affects them. They have no seat at the table where it is decided and they are excluded from other areas of European policy—the common commercial policy, financial and fiscal policies, the intergovernmental pillars of the treaty of Maastricht, the work-together on foreign policy, and the work-together on Home Office matters such as the drive against crime and the drug trade.

Rather than settle for that second-class status in Europe, Sweden, Finland, Norway and Austria all elected to go the whole way for what they saw as the big prize: to take their place in shaping the future of Europe rather than allowing others to shape their future without them. They recognise that only by joining the European Union can they have a say in the decisions that affect the whole of Europe, and that only by taking their seats at the European table can they truly play a part in Europe's future.

Mrs. Margaret Ewing (Moray)

I could use the same arguments about sitting at the top table in the context of Scotland. The four countries that we are discussing have already achieved economic convergence with the European Union. But the Foreign Secretary talks about further enlargement. What kind of time scale is envisaged and what kind of criteria will be used for the emerging democracies?

Mr. Hurd

Poland, Hungary, Cyprus, Malta and Turkey have applied, but we are not negotiating with them at present because it will be some time—they accept this—before they are qualified. Qualification means being political democracies—they are all political democracies -and it also means being economically qualified to take on the treaty's competition rules about state aids. It will take some time. I do not believe that the next stage of enlargement to full membership is likely to be completed in this century, but that is a matter for discussion. There has been no decision on timetables.

Mr. Bernard Jenkin (Colchester, North)

Will my right hon. Friend address the preamble to the question asked by the hon. Member for Moray (Mrs. Ewing)? Does he not see how integration with the European Union is being used by the Scottish nationalists to destabilise the integrity of the United Kingdom, and that they are campaigning for an independent Scotland in the European Union? Does he not see how our integration with the European Union gives credibility to those arguments?

Mr. Hurd

I have been hearing those arguments for ever. They make no sense and I am amazed that my hon. Friend the Member for Colchester, North (Mr. Jenkin) should pay such attention to them. The idea that it makes sense for Scotland to detach itself from the United Kingdom, and therefore from our membership of the EU, and the idea that it would be an easy or pain-free operation to then knock on the door in a completely new set of clothes and say, "This is little Scotland wanting to come in", is simply unreal. When that issue is explored before a Scottish audience, I find that the assembly argument disintegrates quite quickly. I hope that all of us who disagree with it and who wish to preserve the Union of this kingdom will not give the idea the kind of credence which, unfortunately, my hon. Friend the Member for Colchester, North seems to be bestowing on it.

Mr. Christopher Gill (Ludlow)

Will my right hon. Friend give way?

Mr. Hurd

No. I want to get on. I see my hon. Friend the Member for Stafford (Mr. Cash) leaning forward in his seat, but I must get on because many right hon. and hon. Members wish to speak.

We are not yet at the point where the process is complete, because of the issue of referendums, which my hon. Friend the Member for Northampton, North raised a few minutes ago. The Austrian people voted on membership a few weeks ago. They were submitted to the usual mishmash of views on and criticisms of Europe—some, alas, perfectly true and others mythical. Having been exposed to that for a number of weeks, a resounding majority voted in favour of membership. The last fling of the "no" campaign was the accusation that, in future, yoghurts would contain Spanish beetles as colouring matter, and that that was not a price that the Austrian people should pay for joining the Union. As a result of that clash of opinions, they voted in favour of membership. We were pleased to see that and pleased with the margin by which they did it. I cannot predict—obviously, it would be foolish to predict—the outcome of the remaining three referendums this autumn. Obviously, the Austrian result is hopeful and we hope that the Finns, the Swedes and the Norwegians will vote to join us.

The accession negotiations were certainly not always plain sailing, as the House will remember. All the parties concerned had important interests: all the applicant countries had important interests to protect and it was not easy to find a balance between them. The outcome in the treaty was a good deal for the applicant countries, a good deal for Britain and a good deal for Europe as a whole.

One of our many concerns, as we went into those negotiations, was a point that has already been touched on: the arrangements for how decisions should be taken—not the question of the national veto, which featured largely in the recent European elections in this country, because that was not at stake—in the provisions for qualified majority voting. We wanted to ensure that there would be a fundamental review of the QMV system in the 1996 intergovernmental conference. As the House knows, that was agreed. The conference will have to devise—it will not be easy—a formula which more closely reflects population levels in member countries but ensures that the rights of minorities are properly safeguarded.

During the discussions in the spring, we agreed finally on a legally binding arrangement, which requires the presidency and the Commission to take any initiative necessary to reach a solution supported by member states with at least 68 votes. We had a rough time on that. With the Spaniards, we pressed for stronger protection for minorities, whereas 10 member states resisted anything other than the automatic uprating of the figures which had occurred on earlier enlargements. Experience next year, when—we hope—the arrangement comes into effect, and thereafter will show how it works out. I am reasonably confident that, in practice, the compromise that we accepted will justify itself.

Certainly, the clarifications which we attained at the same time on the Commission's social programme have already proved their worth. I am clear that we would have scored a dramatic own goal if we had disrupted the whole process of enlargement because of a disagreement over the figures for qualified majority voting.

Mr. Iain Duncan Smith (Chingford)

I should like to clarify the point that my right hon. Friend was making when he said that the arrangement was legally binding. He meant, of course, that it was legally binding in international law and not under the auspices of the European Court of Justice.

Mr. Hurd

It is the subject of a decision of the Council and, as the German Foreign Minister confirmed at the time, it is legally binding under European law. There are two documents—a declaration and a decision. The declaration is not legally binding and the decision—in jargon terms, the Beschluss—is legally binding.

Let me refer to the practical consequences of enlargement. Like us, Sweden, Austria and Norway will be net contributors to the Community budget. So they will share our interest in budget discipline and in value for money. Like us, they will want to ensure that Community funds are used efficiently. The fact that four relatively well-off countries will be coming into the European Union will reduce the amount that other countries, including Britain, will need to contribute to the budget. We expect our British contribution to be some £300 million sterling less over the first six years of accession than it would otherwise have been.

All four of those countries will, we believe, join us in arguing for a market-oriented, free-trading Europe, rather than the more protectionist "Fortress Europe" approach, which has its advocates in the EU. We steadily fight against that approach and we shall have allies in that argument.

Several hon. Members


Mr. Hurd

I shall get on a little and then I shall give way to my hon. Friend the Member for Stafford.

In particular, the close ties that those four countries have with the countries in central and eastern Europe mean that, like us, they will want to see the benefits of the free market extended to the whole of Europe. I can give a practical example of that. Finland, Sweden and Norway already have free-trade agreements with the Baltic states—they are ahead of the European Union in that respect—but, because of accession, those trade arrangements with the Baltics will, from next year, extend to the whole of the European Union. That is a practical example of how the free-trade impulses of the new arrivals have already affected, for the better in our view, the trading arrangements of the rest of US.

We can also expect the four countries to support us in arguing for the vigorous application of subsidiarity throughout the Community. They have all applied to join the European Union because they believe, like us, that certain matters are best discussed at European level. But they all have strong traditions of democracy and independence and do not want to see the Community act in areas where decisions could best be made at national level. Like us, they believe that the European Union should be a union of diverse nation states, each preserving its own traditions and its own identity. They take the view that their accession will add to that diversity.

Mr. William Cash (Stafford)

Does my right hon. Friend accept that the Scandinavian countries have a strong position—it is one that he has not mentioned—on social policy, trade union rights, consumerism, the environment, a single currency and on many other matters, including an obsession with the deutschmark, in respect of which we have taken a directly contrary view? Given our reservations about centralising and socialising tendencies in Brussels, we have sought to resist those tendencies, whereas the Scandinavian countries have an active policy of encouraging them.

Mr. Hurd

I have not yet mentioned those matters, because I gave way to my hon. Friend before I completed my speech. I wish now that I had let my hon. Friend make his own speech and that I had not given way to him. I shall touch on the matters to which he has referred as I continue, and I shall now continue.

Sir Teddy Taylor (Southend, East)


Mr. Gill


Mr. Hurd

No, I shall not give way. I have had experience of several of my hon. Friends making their speeches in the middle of mine. Perhaps the House should have a clearer understanding of what I intend to mention before I am rebuked for not mentioning certain things. I can never resist my hon. Friend the Member for Southend, East (Sir T. Taylor), however, and before I conclude I shall give way to him, but not now.

The four countries that I have mentioned will take—

Mr. Gill

I would ask my right hon. Friend to give way now.

Mr. Hurd

I shall give way to my hon. Friend and then I will bring my remarks to an end.

Mr. Gill

Before my hon. Friend the Member for Stafford (Mr. Cash) intervened, my right hon. Friend was talking about the need for the countries that are now proposing to join the European Union to preserve their own national identity. Is he aware of the remark that the German ambassador to Moscow is reported to have made to the effect that national sovereignty is becoming irrelevant and meaningless, but that for all that many still cling to it? I accept that my right hon. Friend cannot be held responsible for what German diplomats say, but it is worth putting on record the fact that there are people in the German foreign department who apparently take a view that is contrary to that of my right hon. Friend.

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

Order. Many right hon. and hon. Members hope to catch the eye of whoever is in the Chair, and long interventions do not assist.

Mr. Hurd

I feel sad for my hon. Friend the Member for Ludlow (Mr.Gill) after his intervention. No, I am not responsible for what the German ambassador in Moscow says. I know what Chancellor Kohl says, and I have heard him say it more than once: he says that the old idea of a united states of Europe is not worth pursuing and will not work. Germany does not have exactly the same views as us on the way in which Europe should proceed. However, the ideas that gradually nations in Europe will disappear, that gradually centralisation will assert itself until there is one Executive in Brussels and one Parliament in Strasbourg or Brussels, are finished. Those who used to advocate them are either silent or in a small minority. They certainly do not appear in the four applicant countries.

Mr. Tam Dalyell (Linlithgow)


Mr. Hurd

No, I shall get on.

The four countries have proud Parliaments and strong traditions of legislative scrutiny. They will consider carefully the implications of proposed Community legislation before they vote on it. Once legislation is in place, we can expect them to be diligent in implementing and enforcing it.

By joining us, they will increase their own international standing and influence and ours. Norway, of course, is an old friend and an old ally in NATO. The accession of the four countries to the European Union should not affect the strong Atlantic ties in Norway. The other three countries have a long tradition of neutrality. They have said, however, that they will take their full part in shaping common foreign and security policies. Whether they decide to join the Western European Union, which they can do but do not have to do, is a matter for them. They might prefer the status of observer, as have Denmark and Ireland. That is a good example of the multitrack Europe of which my right hon. Friend the Prime Minister and I have spoken recently.

Mr. Dalyell

Will the Foreign Secretary give way?

Mr. Hurd

No, I shall get on.

All four states, in their different ways, are outward looking with strong records of contributing to peacekeeping and generous aid programmes. Of course, we shall not always agree with the new members on all subjects. I have usefully been reminded that they may be tempted to support measures under the social chapter that we reject. I suppose that that is possible.

I must say, however, that the tide of opinion in Europe—and elsewhere, but especially in Europe—is now blatantly beginning to flow strongly in favour of competitiveness and against over-regulation. If the four countries were to join in supporting measures under the social chapter, we should be even more grateful for the opt-out that my right hon. Friend the Prime Minister obtained at Maastricht, which would protect us in Britain. My hon. Friend the Member for Stafford would not be well advised to start opposing extension or enlargement of membership of the European Union because we shall not always agree with the views of those who join us.

There will be matters on which we differ occasionally, but having worked with my colleagues in the four applicant countries at the various meetings that they have attended in advance of enlargement, I do not doubt for a moment that the blend of enthusiasm and common sense that they bring to our discussions will strengthen the quality of the decisions that we take.

Sir Teddy Taylor

Will my right hon. Friend safeguard himself against over-optimism? Will he tell us—yes or no —whether the £300 million that he has said we might gain because of the proposed arrangement was estimated after or before the information that we received on Friday from the Treasury, which is in the Vote Office: namely, that our gross contribution in 1995 will increase by £2,000 million, which is £3 per week per family, and that agriculture expenditure will break through the legal barriers despite all the pledges and optimism, which I am sure my right hon. Friend entered into and displayed genuinely after the Edinburgh summit?

Mr. Hurd

I am writing to my right hon. Friend the Member for Guildford (Mr. Howell), the Chairman of the Select Committee on Foreign Affairs, on the general point about our contribution. I was asked about the matter only the other day in that Select Committee and I promised to produce figures, which I have set out in a letter to my right hon. Friend.

I was talking in the context of the Bill. The figure that I gave was the amount by which our contribution would be less than it would have been if the new states—[Interruption.] That was the point that I was making in terms of the Bill. I was saying that our contribution would be substantially less by the figure I gave—£300 million over six years—because of enlargement.

There are other practical benefits. First, our agriculture exporters will benefit from the opening of the previously highly protected agriculture markets of the four applicant countries. Our fishermen will have new opportunities in Norwegian waters from 1997 onwards. Those who manufacture alcoholic drinks—I hope that the hon. Member for Moray (Mrs. Ewing) will listen to this—will benefit from the opening of Nordic markets and the dismantling of state monopolies. Our hauliers will benefit from increased access to the crucial Austrian market following agreement that our quota for terminating traffic will increase. Our oil industry—especially the offshore supplies industry—will benefit from Norwegian acceptance of the European Union rules. That should mean new contracts and new jobs. Many of those points will be of particular interest to Scottish Members.

Mrs. Ewing

Will the Foreign Secretary give way?

Mr. Hurd

No. I have given way to the hon. Lady already and I shall not give way to her again.

Mrs. Ewing

My intervention will be on the points that the right hon. Gentleman has just made.

Mr. Hurd

No. I have already explained the benefits to Scottish fishermen that will flow from the arrangement.

I have no doubt that British business in the different sectors that I have mentioned will benefit—perhaps not hugely, but significantly—from enlargement. The significance of the arrangement goes wider than that, however. The accession of the four countries, with their strong democratic traditions, their prosperous economies, their international outlook and their commitment to an efficient and effective common-sense European Union, is a substantial step towards the outward-looking Europe that most people in Europe seek. It is a step towards dismantling the divisions of Europe, which belong to the cold-war era and which are out of date.

The enlargement will point the way towards closer links with the countries of central and eastern Europe and, indeed, their eventual accession to the European Union. We have believed very strongly, including those who have been doubtful in the past about the course which the European Community—now the European Union—was taking, that it must be right for the European Union to keep its doors open to those who wish to join; that half Europe could not call itself the whole of Europe; and that where countries qualified, they should be allowed to enter.

Without any doubt, the four countries qualify. They are mature, established democracies. Indeed, it is patronising even to question that point. These countries have given Europe and the world many lessons in democracy and solid good sense. Having passed through intellectual changes as the world has changed around them, and as their security and economies are now on a different basis, they see that their future lies in full membership of the European Union.

We should welcome that, not because we will agree with them on every subject because of course we will not, but because the voices and interests that they bring and the contribution they will make to the future of the European Union will, I am sure, be abundantly worth while. I commend the Bill to the House.

5 pm

Dr. John Cunningham (Copeland)

It is a genuine pleasure to welcome the prospect of Austria, Finland, Norway and Sweden joining us as members of the European Union. Labour has long campaigned for their admission to the European Union. We made that commitment a long time ago and presented it to our conference in a policy statement last year. We reiterated our support for that goal in our European election manifesto which, as the House will recall, was massively endorsed by the people of this country on 9 June when we had a resounding victory, won the largest share of the vote and the greatest number of seats and made the most gains.

The Foreign Secretary did not find an opportunity to mention the European elections in his 35-minute speech and I am not surprised about that. He looked like a relieved man when he was eventually able to resume his seat having rediscovered the fault lines in his party.

The Foreign Secretary talked about earthquakes at the beginning of his speech. The biggest earthquake for the Foreign Secretary and his right hon. and hon. Friends was the result on 9 June—the worst performance by the Conservative party in any national election this century. Whatever else the Foreign Secretary can claim for his party's policies on Europe, he certainly cannot claim the endorsement of the people of this country.

That great victory for our policies, and those election results, give Labour a strong voice for Britain in Europe. We are the largest group in the European Parliament, with 62 Members. Our colleague Pauline Green has been elected overwhelmingly as leader of the socialist group, which is the most influential group in the Parliament. We hope that our friend and colleague Klaus Hänsch of the German SPD will soon be elected President of the Parliament. He has our wholehearted support.

We shall give all that power—[Interruption.] I am sure that I have the endorsement of the overwhelming majority of my right hon. and hon. Friends. We shall continue to use that power and influence in the European Parliament in support of our friends in Austria, Finland, Norway and Sweden and we continue to work in the party of European socialists, of which I have the honour of being vice-president, to that end. There is emphatic support in that organisation for the four applicant countries. Austrian, Finnish, Norwegian and Swedish social democrats are members of the party of European socialists. We have worked closely with them from the outset on their applications and we continue to do so.

We welcome four friends and countries with strong traditions of good government, and of strong social democratic government in many cases. Those countries regularly elect social democratic parties to govern their affairs. We welcome them also because at least three of them will be net contributors to the European Union budget. All four countries have good records on economic, social and environmental policy and all four are strong supporters of the social chapter. If their applications are successfully endorsed by their electorates, 15 out of 16 member states will strongly support a social dimension for the European Union. That is something that we, too, strongly endorse and which, I regret to say, further increases the isolation of the Foreign Secretary and his colleagues in their mulish objections to policies which, despite their standing on the touchline in a petulant way, the other members of the European Union are determined to see through.

Mr. Hurd

They are not doing very much about it.

Dr. Cunningham

The Foreign Secretary spoke a moment too soon. He should read the newspapers. A report of a meeting this weekend under the new German presidency, chaired by Norbert Blüm, should be drawn to the right hon. Gentleman's attention. Norbert Blüm makes it absolutely clear that, during the German presidency, they intend to press ahead with the development and deepening of the social dimension of the European Union.

That is the trouble with Bonn, of course. We used to be told in briefings from 10 Downing street that Helmut and John were chums. It now looks more like, "Auf Wiedersehen Helmut, bon giorno, Silvio", despite the latter gentleman's tendency to work with neo-fascists in Italy. I say to the Foreign Secretary, as I have said before in this House and elsewhere, that the Opposition want to make it absolutely clear that we want nothing to do with emerging fascism in Europe, whether inside the European Union or outside it. It is about time the Foreign Secretary made his own position, and that of his party, clear on that subject.

Mr. Hurd

There is a coalition in Italy which hosted the recent summit. There were several Ministers there, some from one party and some from another. All were freely and democratically elected, and all were elected on a particular programme which I do not think contains any elements of fascism. Is the right hon. Gentleman seriously saying that a Labour Government would not work with that Italian Government? I cannot believe that that is the case. No other Government in Europe are taking that view. Is that a view that the right hon. Gentleman would urge upon us? It makes no sense at all.

Dr. Cunningham

The Foreign Secretary is wriggling. He is avoiding the question and obfuscating the issue. I did not say that we would not work with an Italian Government. I said that we would not work with neo-fascists if they were part of one.

We have made our position clear in respect of the growth of right-wing extremism right across the European Union—in France, in Germany and, for that matter, here in London. We are implacably opposed to those people at every level. That is one reason why, in the face of the growth of fascism, xenophobia and racial intolerance in Europe, we have been calling for the designation of a Commissioner to deal with racial equality in Europe. It is also a reason why we shall continue to press for legislation on racial equality in the European Union.

Mr. Hurd

The right hon. Gentleman is moving off into total generalities. Is he advising Her Majesty's Government to boycott and have no dealings with the present Italian Government with their present composition?

Dr. Cunningham

No, I am advising the Foreign Secretary to have nothing to do with the neo-fascist members of that Government. That is no switch. It is exactly what I said at the outset.

Several hon. Members


Dr. Cunningham

I will give way in a moment.

We were talking about the Secretary of State's unfounded sedentary intervention that no progress will be made on social agenda policies in Europe.

Mr. Budgen

Will the right hon. Gentleman give way?

Dr. Cunningham

Not for the moment.

The right hon. Gentleman's statement is a flat contradiction of all the evidence, including the most recent from the German presidency. The social dimension in Europe will continue to become more significant whether the right hon. Gentleman and his friends like it or not. If they want to continue to put their heads in the sand on this issue, let them do so, but they are not fooling the House or the people of Britain. They are fooling no one by trying to argue that the rest of Europe is coming round to their way of thinking. There is not a scintilla of evidence to support that vacuous assertion.

Mr. Budgen

If one Government were negotiating with another Government, could the right hon. Gentleman please explain the practicalities of how it would be possible for the British Government to say to the Italian Government, "We are prepared to talk to one Minister, but we are not prepared to talk to another"? How could that be done?

Dr. Cunningham

Quite easily, because we would make it clear that we would not be willing to participate in discussions with fascists. It is as simple and straightforward as that. It is interesting to note that right hon. and hon. Members on the Conservative Benches apparently feel quite comfortable with the idea of sitting down and working with fascists. They seem quite relaxed about that, but they should think about past failures. The Foreign Secretary gave a little history lesson at the outset of his speech, but he seems to have forgotten past failures to confront fascism.

The European Union has changed and is continuing to change. The Opposition want that process to continue. This is the fourth wave of enlargement to which we look forward. If all four applicants are successful, one of the world's largest trading areas, with an estimated output of almost $7,000 billion, will be created. The accession treaty agreed in March 1994, and signed by Heads of State and Government in Corfu, would become, for British constitutional purposes, one of the Community treaties, as defined in the section 1(2) of the European Communities Act 1972. The Bill will amend that Act to take account of the accession treaty and make the necessary changes in United Kingdom law.

As with the European Communities (Amendment) Act 1993, the Bill is—potentially, at least—amendable, but any amendment incompatible with the accession treaty could prevent United Kingdom ratification of the proposal. Such amendments will therefore not have the support of the Opposition. We do not wish to take any action that would impede the Bill's safe and swift passage. The Opposition, at least, want to ensure that we do nothing to prevent Austria, Finland, Norway and Sweden from becoming members of the European Union. We will do nothing that might jeopardise the referendums that will have to take place in three of those four countries. We applaud the huge success of Chancellor Vranitzky's campaign for a yes vote in the Austrian referendum and we hope that that success will be repeated in the other three applicant countries.

Sir Teddy Taylor

To avoid confusion in the referendums, was not the right hon. Gentleman a bit unfair to the Conservative Government in what he said about the social chapter? Has it not been made abundantly clear by the German presidency and by officials of the Commission that almost all of the social chapter will go through under laws related to health and safety in the Single European Act and the treaty of Rome? There will not be any problem about that and we shall all have to abide by those horrible social chapter laws whether we like it or not.

Dr. Cunningham

I agree in large measure with the hon. Gentleman. If anyone has any doubts about the intention of the German presidency, I refer him to David Gardner's report from Dortmund, which appeared on the front page of this morning's edition of the Financial Times.

The Austrian Chancellor, Franz Vranitzky, has stressed that Austria's application has been determined by the importance of finding common answers to the economic, social, political and ecological issues that face us all. He cited the safeguarding of Europe's competitiveness in world markets as the foremost challenge of the future. We endorse his views. Europe faces common problems such as the securing of jobs, the prevention of unemployment, the prevention of ecological disasters—which, of course, recognise no boundaries—and the political and economic stabilisation of eastern Europe. We also face the common problem posed by the migration of displaced people as a result of tragedies such as that suffered in the former Yugoslavia. Those common, shared problems demand shared solutions and a common approach.

The arguments about joining the Union differ in the four applicant countries, although the respective social democratic parties share those Austrian objectives. The Finnish President has called the European Union The central factor in strengthening the security of our continent. As the Foreign Secretary said, that represents a major change in that country's stance.

In Sweden, where we hope that our great friend and colleague Ingvar Carlsson will soon return to power as the head of a Social Democratic Labour Government—the general election comes before the referendum—concern has been expressed that its high standards of social and environmental protection will be weakened as a result of membership of the European Union. The Swedes do not share the Foreign Secretary's view of the future of the European Union. They want to see increasingly high standards of social provision and environmental protection imposed. They also share the Opposition's view about the unnecessarily secretive nature of decision taking in the Council of Ministers and in the Commission. The social democrats in Sweden, under whose leadership the original application was made, voted at their party congress on 19 June in favour of recommending that their colleagues should back the application for membership of the Union in the forthcoming referendum.

Mr. Spearing

We all admire the social provision in Sweden to which my right hon. Friend referred and the support given to it by our friend, who we hope will soon be Prime Minister of Sweden. The Union and the Community do not prohibit the adoption of higher standards than those applied in the Union being written into a member state's national law, if that country so wishes. Would that not automatically put that country at an economic disadvantage in trade in the single market? Does my right hon. Friend agree that that should be borne in mind?

Dr. Cunningham

I am not sure that I even followed my hon. Friend's argument, let alone agreed with it.

Competition and productivity have far more to do with per capita investment, plant and equipment, education, training and skills than with employment protection or hourly rates of pay. The idea that we can compete with our major competitors in Europe, the Pacific rim, Japan or the United States on the basis of poverty pay—the thesis advanced by the Foreign Secretary and his colleagues—is one that we reject totally. It is not supported by any economic, industrial or social evidence. The right hon. Gentleman knows that.

Great concerns have been expressed in Norway about membership of the European Union, but I hope that the decision of our colleagues in the social democratic party to recommend that their supporters should vote yes in the referendum will eventually lead to all four applicant countries receiving the endorsement of their populations so that they can take their place in the expanded Union in 1995.

Mr. Roger Knapman (Stroud)

The right hon. Gentleman sets great store by those referendums. Last year we were not allowed a referendum because, we were told, it would weaken our system of parliamentary democracy. Has the right hon. Gentleman any evidence that parliamentary democracy has been weakened in Denmark, Norway or other countries that have held referendums?

Dr. Cunningham

The hon. Gentleman has a short memory. Britain had a referendum in 1975, provided for by the then Labour Government. I am not in the least defensive about referendums. The whole country decided, in a once-and-for-all referendum in 1975, about Britain's membership of the then European Community. In reality, however, those once-and-for-all decisions are never accepted by those who do not win the argument and who therefore want yet more referendums.

Mr. Hurd

How did the right hon. Gentleman vote?

Dr. Cunningham

I voted yes. Unlike the right hon. Gentleman, I do not slither this way and that on the European Union. He favours the hokey-kokey approach to membership of the European Union—in, out, in, out, shake it all about.

In his speech, the Foreign Secretary mentioned consistency. The Tory party manifesto says: The Conservative Party has remained steadfast on Europe". It is interesting to examine that claim in this context. Incidentally, during the European election campaign I wrote to the right hon. Gentleman about that matter, but he never replied to my letter and nor did the Prime Minister.

In answer to a question in this House, the Foreign Secretary said that it would be a disaster not only for this country but for Greece, where he had discussed the matter, for Portugal and Spain and for many other countries, if there were a two-speed Europe. Yet we are told that the right hon. Gentleman is the architect of a multi-speed, multi-layered, multi-track Europe.

In November 1990, the Prime Minister said: I don't want a two speed Europe. I think a two speed Europe is unequivocally bad for Europe. At the conclusion of the European summit in Birmingham, after the British presidency, the Prime Minister said: No fast track, no slow track, no one left behind, that was a constant theme at the Birmingham summit.

During the European election campaign, the Foreign Secretary and the Prime Minister referred to: a sensible approach, varying when it needs to, multi-track, multi-speed, multi-layered. It is a Conservative idea". How dare the Foreign Secretary conclude that hon. Members have such short memories and that the people of this country forget so quickly the promises and commitments solemnly given in the House of Commons and at European summits about their approach to the European Union? In a desperate attempt to cling on to votes at any price, the Foreign Secretary abandoned all his long-held principles on Europe, whereas I never have. I therefore claim to have shown constant support for the European Union. The right hon. Gentleman used to be able to make such a claim, but he abandoned it for political expediency during last month's elections.

Mr. Hurd

This will not do. In the 1960s, the Labour party was against membership of Europe. When Lord Wilson was Prime Minister, the Labour party moved in favour. When he left office, having tried unsuccessfully to negotiate membership, and when my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) successfully negotiated membership, Labour turned against. When it was returned to office, it was in favour, although mildly so—that was the time of the referendum. After that, it passed under the leadership of the right hon. Member for Islwyn (Mr. Kinnock) and was passionately against. [HON. MEMBERS: "Answer the question."] I have not followed the right hon. Gentleman's gyrations during that time, but those are the changes about which he challenged me and I am answering the challenge. He cannot speak on behalf of his party on that subject.

Dr. Cunningham

The Foreign Secretary is wriggling. He asked me about my personal position. I told him about that, and then told him about his record. He is now trying to transpose the argument into one about parties. It would be ridiculous to pretend that the Labour party had not changed on Europe, but the right hon. Gentleman asked me about my position and I told him unequivocally what it was and is. His problem is that he cannot say the same about his own position. Indeed, he can say nothing consistent about Europe at all.

Last July in Oxford the Secretary of State for Employment, speaking about the Conservative party and the European People's Party, said: As the union between the peoples of Europe inch by questioning inch grows ever closer, we will need to look for new alliances. I believe that political and ideological alliances between like-minded parties from different countries will soon come to complement or supplant old national rivalries and friendships. Our admittance to the European People's Party in the European Parliament puts that scenario into perspective. There is, even now, a European People's Party office at Smith Square. During the European elections, the Foreign Secretary sought to deny that there was a connection between the Conservative party and the European People's party. The Secretary of State for the Environment rose to his aid and said: We are entirely enthusiastic about the EU. We want Europe to grow in unity". The problem is that they are "entirely enthusiastic" about it at different speeds, on different layers and on different tracks. That is the governing party's position on Europe.

It may seem amusing to expose in this Chamber the shifts in the plates which the Foreign Secretary mentioned—the tectonic slipping and the fault lines—but they do massive and enduring damage to this country's interests and standing in the European Union and we all pay a heavy price as a result.

Mr. Dykes

The House will accept that the right hon. Gentleman has good credentials from that point of view. But will he comment on the Home Secretary's interesting letter in The Times on Thursday, in which he reminded us that it is shocking to recall that as recently as 1983 the putative new leader of the Labour party, in his own election address, called for withdrawal from the European Community?

Dr. Cunningham

Parliamentary candidates often go with their party line. After all, it is much easier to roll rocks downhill against one's opponents than uphill against one's party. But if we are talking about political judgments along the way, the Foreign Secretary, not as a young parliamentary candidate but as a mature Cabinet Minister, supported the poll tax—£14 billion down the drain; he overruled his accounting officer and gave between £200 million and £300 million to the Pergau dam project; and he gives visas to visiting Iraqi businessmen to meet his friends Lord Weinstock and Lord Prior, in spite of the United Nations' embargo on trade with Iraq. The judgment of someone who has been in high office for many years does not compare with someone standing in a parliamentary election for the first time.

Mr. Dykes

But someone who wants to be Prime Minister.

Dr. Cunningham

The Foreign Secretary once wanted to be Prime Minister, too. I am not surprised that he did not get far.

While we are discussing enlargement and consistency, I invite the Foreign Secretary to explain the Government's exact position on the application of Cyprus. Their manifesto—and I have a copy of it here—says that they will help Cyprus and Malta to prepare to realise their ambition of European Union membership. In December 1993, the Minister of State said in the House: I should also remind him"— referring to my hon. Friend the Member for Hemsworth (Mr. Enright)— that the partition of the island is not a prohibition on eventual accession."—[Official Report, 15 December 1993; Vol. 234, c. 1054.] We share that view. Indeed, we think that membership of the European Union will be part of the solution to the illegal occupation of the island.

On 27 June, in his report on the European Council in Corfu, the Prime Minister said: Certainly, if the dispute between the north and the south is unresolved, it will be extremely difficult for Cyprus to be admitted to the Community…we hope that that dispute will be resolved before it is possible for Cyprus to become a member of the Union."—[Official Report, 27 June 1994; Vol. 245, c. 567.] That contradicts what the Minister of State said. As ever, we would like a straight answer. Will Her Majesty's Government go ahead now and actively support the earliest possible accession of Cyprus to the European Union, as we intend to do, using our strength and influence in the European Parliament to pursue that objective?

Mr. Hurd

The right hon. Gentleman has passed from the puerile to a serious point which must be dealt with seriously. Of course my right hon. Friend the Prime Minister is right—the existence of the dispute makes it very difficult. If the right hon. Gentleman thinks of the practical implications of admitting to full membership a country as divided as Cyprus, he must see that it is very difficult. We want to remove those difficulties; we want to see Cyprus admitted. That is one reason—though not the only reason—why we, perhaps more than any other outside country, are working so hard to find a solution. But we are involved. The Prime Minister was party to the statement issued at the Corfu summit which said that in our view Cyprus and Malta would be involved in the next round of enlargement. One cannot say more than that at present. Our attitude is a positive one—to remove the obstacles to the accession of Cyprus. I think that the right hon. Gentleman would agree that that is a fair statement.

Dr. Cunningham

I am little wiser than I was before because the right hon. Gentleman concluded by saying that our attitude is a positive one—to remove the obstacles". The obstacle has been there for 20 years. This year is the 20th anniversary of the invasion of Cyprus. Despite the right hon. Gentleman's claims, there is no sign that the Government's active work to resolve the problem is having any effect at all. Indeed, we received alarming reports from our colleagues who visited Cyprus that that active work included Her Majesty's Government's representatives encouraging people to visit north Cyprus, which we do not recognise as a legal entity. We are not very happy about that either. So the Government have a lot to do to convince us that they are genuinely and wholeheartedly backing the accession of Cyprus to membership of the European Union, as, indeed, we are ourselves.

In 1996, there will be an important intergovernmental conference of the new and, I hope, expanded European Union. Among other things, the Maastricht treaty provides for revision of the pillar structure, widening the scope of the co-decision procedure, revision of common foreign and security decisions, including consideration of defence issues and whether the Union should absorb the Western European Union, whether to introduce specific titles in the treaty to cover civil protection in energy and tourism, the hierarchy and classification of Community legislation and, of course, the whole vexed question of institutional reform.

Let me say clearly and unequivocally that we stand for a Europe of nation states. We do not support a federal Europe, as the right hon. Gentleman wrongly asserted many times and the Conservative central office hand-outs lied time and again during the European election campaign. Nor do we have any intention of abandoning Britain's right of veto. I say that so that the right hon. Gentleman hears it again from me at the Dispatch Box, as he has heard before, in the hope that from now on he will not continue to repeat falsehoods about Labour party policy as, regrettably, he has done in the past.

Mr. Marlow

Can the right hon. Gentleman explain his party's attitude to, first, deepening and, secondly, the Luxembourg compromise? What is the Labour party's attitude to deepening? What does it mean? What is the right hon. Gentleman's understanding of the Luxembourg compromise? Does it still exist?

Dr. Cunningham

There is some dispute as to whether the Luxembourg compromise still exists as a legal entity. But as Governments assert that it still exists, and we see no reason to dispute that, the answer is yes. As for deepening of the Community, we are in favour of some deepening of the Community, as we have made clear time and again in relation to the social chapter. We regard the European Union as more than a market and a free trade area.

We have made it clear—as, incidentally, did Lord Howe and Baroness Chalker—that in some areas there is scope for an extension of qualified majority voting on social and employment policy and on the environment, to give two examples. That is apparently another area where there seems to be some difference of opinion in the Government. In 1986, in this House, Baroness Chalker said: Some have implied that there is majority voting against United Kingdom interests…We cannot criticise the Community for its inability to take decisions, while, on the other hand, we refuse to allow practical improvements that could well assist us".—[Official Report, 23 April 1986; Vol. 96, c. 391.] Of course, she was talking about qualified majority voting, which was massively extended as right hon. and hon. Members on the Government Benches guillotined the Single European Act through the House. I hope that we shall have no more of that nonsense in the future. [Interruption.] I think that we all know who the arch-villain was—the right hon. Member for Shropshire, North (Mr. Biffen).

Mr. Jenkin


Dr. Cunningham

No, I am not giving way any more.

We support the Bill because, above all else, it embodies our consistent policy on enlargement and our support for our friends in Austria, Finland, Norway and Sweden. I hope that the whole House will support the Bill and that it can be agreed without a Division. If there is a Division, I shall vote for enlargement and for the legislation, and I urge my right hon. and hon. Friends to do the same.

5.37 pm
Sir Peter Hordern (Horsham)

I was glad to hear that the right hon. Member for Copeland (Dr. Cunningham) and his party will support the Bill; I do not think that that has come as any surprise. However, I noticed that he said that the reason why he was anxious to do so was that those countries are his political friends. The House must have noted the difference between the way in which he referred to those countries and the way in which he previously referred to Italy and the Italian Government.

It is a most extraordinary constitutional pronouncement that one can pick and choose the Ministers in the Italian Government with whom one will negotiate. I must say that to the right hon. Gentleman, because it is the most extraordinary attitude to have. Let us suppose that the Labour party were to win the next election and that it then signed up to the social chapter. Are we seriously to believe that the Social Security Minister would decline to attend a meeting of the Council of Ministers because an Italian Minister whom he calls a neo-fascist was attending? Such a suggestion is totally ludicrous.

Dr. John Cunningham

I do not call those people neo-fascists: they call themselves that—that is the point.

Sir Peter Hordern

Perhaps my right hon. Friend the Foreign Secretary would like to answer.

Mr. Hurd

The people to whom the right hon. Gentleman may be referring are part of the Alleanza Nazionale and are hence part of the Italian Government. Is he advising Her Majesty's Ministers to boycott all meetings in which Ministers of that party participate?

Sir Peter Hordern

I am happy to give way to the right hon. Member for Copeland if he wants to make his position clear. Certainly, he was making a most extraordinary constitutional pronouncement, which showed yet again that the Labour party is wholly unfit for government; its members cannot even understand basic constitutional points.

I unreservedly welcome the accession of Austria, Sweden, Finland and Norway, all of which will be net contributors to the budget. That has greater appeal, perhaps, to Conservatives than to Labour Members—we are always likely to give a much warmer welcome to countries that will make it less expensive for us to belong to the EU.

However, the accession of those four countries raises serious problems for the future, and I want to say a little about the problems that will face the intergovernmental conference of 1996. For a start, each country will have one new Commissioner, bringing the total to 21, and the Council of Ministers will also be enlarged. I understand that the inclusion of the four will allow eight countries representing only 12 per cent. of the European Union population to block the wishes of eight countries representing 88 per cent. of it. That is clearly a serious matter that will have to be dealt with in the course of the IGC.

It is most unlikely that we shall all agree on every proposal coming before the Commission. With the enlargement that the new accession produces, there will be a need to enforce subsidiarity and to use the opt-out whenever necessary. I am glad to welcome the ideas of variable geometry, a multi-speed Europe and so on, all of which arrive at the same point: that we reserve the right to preserve our national interests whenever we see them at risk.

I offer one or two examples of the difficulties that may be created. The common agricultural policy is a case in point. I understand that in Austria, Norway and Finland national agricultural prices are higher than they are in the CAP, and that those countries have been allowed additional national aids—described as temporary—to enable them to adjust their prices to the common European level. It is in our interest and in that of Germany to reduce the cost of the CAP, but it will be in the interests of the Scandinavian countries, and of France and the Mediterranean countries, to keep the CAP prices high. Of course the whole process is controlled by the budget, but strains on it have increased and will increase and must be most carefully curtailed. That matter, too, will come up in 1996.

Mr. Gill

Is my right hon. Friend aware that, before this association agreement, the Swedish Government had agreed a new scheme of agricultural support that would have had the effect of reducing the cost of such support in Sweden but, as a result of the accession treaty, the costs will rise again?

Sir Peter Hordern

I am not quite sure that my hon. Friend has it right. I understood that Sweden met the terms of the treaty right away, but was going to be given some monetary compensation for so doing—but I am not sure.

The point is that the CAP is bound to be placed under further strain when and if Hungary, Poland, the Czech Republic and the Slovak Republic join in the next century. The arguments against the CAP have been rehearsed often enough, but the idea that it should help agricultural communities, not agricultural products, is surely the right way forward. That is best done by national Governments; otherwise, how are we to pay for the huge surpluses that will be produced by Polish and Hungarian agriculture at prices necessary to accommodate Norwegian and Finnish farmers? Those problems loom large for the IGC in 1996.

Then there are problems with convergence. The costs of convergence are difficult enough in the present EU, but how great would they be if it included Poland, Hungary and the Czechs? It is quite unnecessary to achieve convergence by Government-to-Government transfer. Anyone who examines the substantial investments in Thailand and Malaysia by the Japanese will observe that they are not Government-to-Government transfers; they simply occur because the costs of labour and skills make Malaysia and Thailand attractive to Japanese investors.

Mr. Budgen

If we roundly declared that we wanted nothing to do with the single currency, we would not need to worry about the enormous cost and distortion brought about by so-called convergence.

Sir Peter Hordern

If my hon. Friend will contain himself, I shall come to the single currency question.

It is possible that limited infrastructure projects, if cost effective, are necessary, but we need to be clear about our own interests. I take them to be that we are part of a European Union that is committed to free trade and to GATT in particular. We are also committed to further enlargement of the EU beyond what is envisaged in the Bill, but there is, and always has been, a political element in the European Union. I cannot accept, after all the sacrifices that our country has made in two world wars, that anything but relief and satisfaction are to be found in the closer union between France and Germany. We cannot wish it away.

I hope and trust that we shall find that that closer union is here to stay. I do not draw comfort, although some apparently do, from the prospect of a newly unified Germany operating on its own to its own agenda, and I cannot believe that the French, the Russians or the Poles do either. All those countries want a closer union in which the interests of Germany are inextricably linked with those of the rest of the European Union.

We must not be surprised, still less angered, by serious attempts to weld the European Union together by supranational institutions to form a single currency. After all, we have an opt-out of, or rather, an opt-into, the single currency. Some, like my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen), simply wish the whole thing would go away, but it will not go away, and we must face up to that fact.

It seems to me probable that France, Germany and the Netherlands will meet the Maastricht criteria and will in due course form a single currency, probably by the end of the century. Austria, and possibly the Scandinavian countries too, may also meet the criteria and join. This country will then be faced with a clear choice of whether or not to join.

We certainly want to meet the Maastricht criteria on prudential grounds alone—nothing to do with the single currency. Let us then suppose that we meet the criteria but a future Parliament decides not to join. Can we imagine that the greater part of our businesses and industry, which carry out their business in the single market, would not decide to transact that business in the European market using the ecu? They would be perfectly entitled to do so. They would simply vote with their feet and do their business in the single currency, just as the oil industry has always done its business in dollars—except that in this case it would probably be done in the hard ecu. We must come to terms with Europe as it is and as it is bound to be, not as some would wish it to be.

I see nothing wrong with an evolutionary path to a single currency by way of a de facto common currency. That is how I think it will be. Monetary union leading to political union in the sense of a federal European union is nonsense.

Mr. Cash

My right hon. Friend will recall a letter that he wrote to The Times two or three years ago in which he advocated the virtues of a single currency. Does he still advocate that as a matter of principle, contrary to some 70 per cent. of business men in Germany who, according to a recent opinion poll, do not want a single currency? Does he believe that a single currency would be advantageous to the political situation in Europe as it evolves, as he put it?

Sir Peter Hordern

I am immensely flattered that my hon. Friend should remember what I wrote to The Times three years ago. He remembers it better than I do. At that time I was certainly in favour of Britain joining the ERM with a strong currency and I still hold that view. However, as my hon. Friend has heard, we must look at the way in which events are likely to move. There is likely to be a partial single currency and in practical terms many of our business men will wish to conduct their business in that currency. Therefore, it will be formed into a common currency.

Mr. Marlow

Will my right hon. Friend give way?

Sir Peter Hordern

I shall give way for the last time because many of my hon. Friends wish to contribute.

Mr. Marlow

I think that my right hon. Friend is talking about the possibility of a de facto common currency, but not a single currency. Does he agree that a single currency is not so much a matter of commercial convenience but that it effectively means a single European state, a single European economy and a single European Government?

Sir Peter Hordern

I am coming to those very points. My hon. Friend is right: what is more likely to happen is that our country will be involved in a common currency. However, that is a matter of opinion. As I have said, monetary union necessarily leading to political union in the sense of a federal European Union, to which my hon. Friend referred, is nonsense. For example, we have only to look at the United States where virtually every state has a different sales tax. There are widely differing forms of tax and even wider differences in social benefits. We do not have to have a common system of social benefits or a social chapter to form a closer European Union.

As I mentioned earlier, investment gravitates to those states with lower taxes, and the same would apply here. We have done well. By having a low tax system we have been able to attract much investment, and I see no reason to give up that advantage. We should not accept for a moment the myth that monetary union necessarily leads to political union. Equally, we should certainly not accept the myth that sterling has always stood on its own, disregarding entirely our link to the gold standard which we had for centuries and to the dollar which we had under Bretton Woods.

I foresee the time when, whatever we may wish, there will be a strong single currency at the heart of Europe which will act as a common currency for the rest of Europe, including ourselves. I do not believe in a federal Europe, by which I mean the sole or main power to raise taxes resting in a single European Parliament. Nothing can persuade us that the essence of democracy is not to identify as closely as possible democratic institutions with the people in a way that enables them to understand, accept and approve of what is done. That means national Governments with the principal power to tax. The low turnout in the European parliamentary elections, not just in our country but throughout the European Union, should be a lesson to us all.

The Bill broadens the European Union to take in those countries which have long been democracies and of which we wholly approve. It also provides us with an opportunity to think of what will happen in the European Union, of which we are an important part. To be a positive European does not mean to favour a federal Europe. I like the prospect of closer union between France and Germany and between all other European countries because that means peace and not war.

I am also a positive European because I like the prospects for Britain in Europe. I certainly see better opportunities for trade and business, but I also see us using our influence to reform the European Union in the direction of an outward-looking community of nations that is better able to deal with the United States and Japan than we possibly could on our own. Above all, we have no need to be frightened of Europe or to be constantly negative. Perhaps we will go at our own speed and no doubt our geometry will vary from that of others, but we are part of Europe and always have been, and we might as well be positive about its future.

5.54 pm
Mr. Peter Shore (Bethnal Green and Stepney)

The speech by the right hon. Member for Horsham (Sir P. Hordern) was addressed to his party rather to the House as a whole. His remarks about a common currency as distinct from a single currency were sensible and reassuring. I do not think that any hon. Member would object to the emergence of a further, as it were, reserve currency or common currency of the kind or of the practical use that resulted from using the dollar in post-war periods, gold before the second world war and, indeed, sterling up to about the late 1960s.

A common currency gives us the freedom to operate with our own currency, except where it is clearly advantageous to operate with a different one. As the right hon. Member for Horsham correctly reminded us, oil trade has been carried on in dollars for a long time, certainly for as long as I can remember. That is perfectly sensible and has caused us no damage.

If we accept even the principle of the currency following trade, we all know that, although our trade with Europe has grown enormously through trade diversion and the coming together of the economies, it is still less than half our total trade. The logic of what the right hon. Gentleman said is that the other half ought to be conducted either in our own currency or in somebody else's which is a suitable common currency. That was all rather refreshing, and tomorrow I shall study the right hon. Gentleman's speech with great care.

I am sorry that the Foreign Secretary has disappeared, because I have a few remarks to address to him. His optimism never ceases to amaze me. He really believes that Europe is developing along the ways and paths that he would like to see it pursue. To cite the treaty of accession which is the subject of our debate as evidence of the European Community's abandonment of centralisation, of deepening and consolidating and centralising in favour of widening, was a remarkable example of the Foreign Secretary's almost infinite capacity for self-deception.

This is a three-clause Bill. European Community Bills are always short, but they carry with them an enormous load of text. In this case the three clauses conceal about 365 pages of the treaties. We are dealing with Austria, Sweden, Finland and Norway. In a way, it may be a little premature to approve or disapprove of the Bill because, as we all know, apart from Austria, the other three countries mentioned in the accession treaty have yet to hold referendums. I have no serious doubts that Finland will vote positively in a referendum, but it is sensible to put a considerable question mark over Sweden and Norway.

Those of us whose memories go back to at least 1972 will recall that Norway reached this same point on the road to joining the European Community, but the people of Norway asserted that their view was different from that of those who negotiated on their behalf. In the referendum then held in Norway, the people decisively rejected the proposal for entry. If that happens again, there will have to be changes in some crucial paragraphs of the treaty, because it is obviously based upon the assumption that four countries will join.

I have always thought that the great discussion about the blocking minimum and so on was, to say the least, rather premature. It is not clear what benefits the applicant countries hope to gain through membership, beyond those that they already have as members of the European economic zone. Indeed, I can envisage considerable disadvantages, especially now that the earlier obligations of joining the European Community have been added to by the many and much more difficult commitments contained in the Maastricht treaty.

Mr. Marlow

The right hon. Gentleman referred to the 385 pages—I hate to correct him, but he said 365 pages—of the treaty. On page 9, it talks about qualified majority voting, to which he has just referred. It says that qualified majority voting will require 64 votes in favour, cast by at least 11 members. If, under the procedures, Norway or Norway and Sweden do not join, the Council will look at the matter again and come forward with decisions. Those decisions have to be taken by unanimity. Suppose those two countries vote no and decide not to join the Union. As long as there is no unanimity, one presumes that a qualified majority will be 64 votes and 11 member states. Is that correct?

Mr. Shore

I am not sure about that, but it is a question that could quite properly be addressed to the Government. I should be interested to hear the reply. What I am saying is that there are possible complexities ahead that were not entirely dealt with in the Foreign Secretary's speech.

Of course, it is the peoples of the applicant countries who decide. From a purely selfish British point of view, I would welcome their adherence—in particular, that of Finland, Sweden and Norway. They have a powerful social democratic tradition, which I share, and their histories of robust independence give me the strong sense that they will be potential allies in the forthcoming struggles between those who wish to achieve a minimum Europe of national states and those who seek to secure a maximum Europe of a neo-federalist character.

My feeling is that—although we cannot be certain about it—the instincts of such sturdy, independent people will place them on our side in many of the arguments that lie ahead.

Mr. Cash

Is there not another agenda here, which is the possibility of a German Europe? Does the right hon. Gentleman acknowledge, as many countries do privately, that that is the direction in which we are moving? The recent Karlsruhe court judgment said that there should be not a Bundestat but a Staatenverbund. That is quite different, one being a federal Europe and the other a confederation. Since that judgment, the Christian Democrat party has now reverted to the idea of a federal Europe and Bundestat, and so has its partner, the FDP. In other words, we need to beware.

Mr. Shore

I thank the hon. Gentleman for raising that point. I shall say something later about recent trends in opinions and proposals coming out of Germany that are of concern for the 1996 intergovernmental conference.

The immediate issue that the accession treaty has posed to us and other Community members is the voting formula to be used for qualified majority voting. At present, the blocking minority is 23 out of a total of 76 votes. In future, despite the Prime Minister's almost embarrassingly unsuccessful efforts at the last minute to avert it, the blocking minority will be 27 out of a total of 90 votes. I know that it is also agreed that best endeavours must be made where the blocking minority falls between 23 and 27, but best endeavours are not a strong line of defence against the minimum blocking vote of 27 in the treaty.

What worries me is not just the increased size of the blocking minority, but the fact that so much emphasis has been placed on a blocking minority. I take it to mean that in practice, although not verbally, the Luxembourg compromise of the famous national veto is falling into disuse. There is a lack of self-confidence in member Governments to assert that they have a veto and will use it.

I say that with the utmost regret because I well remember the document in the referendum of 1975 issued by the then Government. It recommended a yes vote on the basis that, under the heading Will Parliament lose its Power?", there was the assurance: It is the Council of Ministers and not the market's officials who take the important decisions. These decisions can be taken only if all the members of the Council agree. The Minister representing Britain can veto any proposal for a new law or a new tax if he considers it to be against British interests. That was the basis of that referendum, which my right hon. Friend the Member for Copeland (Dr. Cunningham) promises never to hold again, because that referendum settled matters once and for all. That is not easy to square with the fact that the referendum on Scottish devolution was rejected, yet we are committed to having another one, which, if it is accepted by the Scottish people, presumably we will accept.

The veto power was guaranteed to the British people as a condition of their assent through the referendum in 1975 to Britain remaining part of the European Community. It matters very much, because it is part of the faith that should exist between Government and people. The Government should mean what they say and abide by their commitments.

Dr. John Cunningham

My right hon. Friend and I take different positions on this matter. The Labour party's policy position does not rule out referendums, depending on what may emerge either on the question of 1996 and the intergovernmental conference or on other matters. I was referring to the referendum that gave the British people the choice to say whether or not Britain should stay in the European Union. My right hon. Friend may think that that question should be put to the people every two, three, four or five years. I do not agree with him. The people were given the opportunity to make a decision, and they did so overwhelmingly.

Mr. Shore

I accept what my right hon. Friend says up to a point, which is that the referendum was about membership of the European Economic Community, not membership of the European Union with its far more extravagant ambitions. I take it that my right hon. Friend has at least given me a partial reassurance that he would not necessarily oppose a new referendum on proposals for ever closer union within the European Union.

Dr. Cunningham

I am delighted to tell my right hon. Friend again that that is the position. Throughout the European election campaign, we made it absolutely clear—I said it myself on many occasions, and I am happy to say it again on the record—that it is not ruled in or out.

Mr. Shore

I am especially pleased that my right hon. Friend has said on the record that the Labour party is opposed to a federal Europe, and that it will abide by and hold on to such use of the veto power as is contained in the unanimity provisions of the treaty of Rome. Good, we are making progress.

Sir Russell Johnston (Inverness, Nairn and Lochaber)

The right hon. Gentleman said that the fact that the veto was slipping into desuetude was due to a lack of self-confidence among member countries. We could also argue that it was due to a reduction in obduracy and an increase in consensual decision making.

Mr. Shore

To be fair, there is another and much more important cause. Given Lady Thatcher's general attitude towards the European Union and British sovereignty, it is curious that, when Prime Minister, through signing the Single European Act she opened the way for qualified majority voting on a much larger scale than had ever previously been envisaged. I know that that is a difficult fact for many Conservative Members to accept and acknowledge. Nevertheless, that is why so much was abandoned in the use of the national veto under the Luxembourg compromise formula.

The issue of qualified majority voting, the blocking minimum and the veto is of growing importance, not less. I say that for two reasons, First, we all hope that this treaty of accession will be followed by further accession treaties in which, in the first place, the Visegrad countries—Poland, Hungary, the Czech Republic and Slovakia—will join, and there may well be others after that. If every new accession brings further adjustment to the voting formula and weakens our capacity to safeguard our interests—particularly against the thrust of Euro-federalism—we will not easily accept or stomach that. That is cause for considerable concern.

We are already on the road to the next IGC in 1996—a commitment that is part of the Maastricht treaty. We cannot be sure how far-reaching and wide-ranging that conference will be, but we know that article B of the Maastricht treaty identifies in particular the common foreign and security pillar and the justice and home affairs pillar. It states: the policies and forms of co-operation introduced by this, treaty may need to be revised with the aim of ensuring the effectiveness of the mechanisms and the institutions of the Community. Article N of the Maastricht treaty states: a conference of representatives of the governments of Member States ... shall be convened in 1996. We know what lies ahead, and we may be certain that we shall have a traumatic time beating off the Euro-federalists in that conference.

There is only a short breathing space. At the meetings in Ioannina and Corfu, it was decided to establish a so-called reflection committee. A communiqué issued after the recent Corfu summit referred to a Reflection Group consisting of representatives of the Ministers of Foreign Affairs of the Member States and the President of the Commission. It will be chaired by a person appointed by the Spanish government and begin its work in June 1995. Two European Parliament representatives will participate in the work of the Reflection Group. The Group will also have exchanges of views with the other institutions and organs of the European Union. For some of us, 1995 is not far ahead but-wait for it-action is starting earlier than that. The communiqué continued: The Institutions are invited to establish before the start of the work of the Reflection Group reports on the functioning of the Treaty of European Union, which will provide an input for the work of the Group. Some ambitious proposals are being thought out and framed. I refer to only one set—which comes, of course, from Germany. Proposals from Herr Bitterlich, who I understand is Chancellor Kohl's personal foreign policy adviser, came out of a think tank associated with the Bertelsmann Foundation. The Financial Times had this to say about them: In a report which reflects widespread thinking at the highest levels of the German government, the group spelt out proposals for a bi-cameral system which would put the European Parliament and the Council of Ministers on an equal footing. A lower chamber and upper chamber of a legislature is how they see the future of the Council of Ministers.

A report in The Guardian added that the President of the Commission would be nominated and elected by Members of the European Parliament and would be empowered to appoint Commissioners to a reduced number of posts—a kind of Cabinet. The report added: The commission would take on the hue of a European government. I am not saying that that is necessarily the sole or most strongly backed proposal that will come before us in 1996, but some powerful pro-federal forces remain unchecked in Europe. They have been buried in the institutions of the European Parliament, and they are embedded in the whole structure and ethos of the Commission, the European Court, and the hearts and minds of the ruling political classes of many countries of continental Europe. We must be ready for a prolonged and difficult struggle.

If the Foreign Secretary were right about the success of British ideas and how subsidiarity and all the other British intergovernmental arrangements have carried the field in Europe, we could relax. It is simply because the Foreign Secretary has got it so wrong that we must be on our guard and prepare for a bitter fight between now and the end of 1996. That is the task ahead.

6.15 pm
Mr. John Biffen (Shropshire, North)

The speech of the right hon. Member for Bethnal Green and Stepney (Mr. Shore) reminded us that the virus of scepticism is not confined to these Benches. What was particularly attractive was his exchange with the right hon. Member for Copeland (Dr. Cunningham), which authorised with the strength of Labour's Front Bench that Labour is hostile to a federal Europe, is in favour of a Europe of nation states and argues for the maintenance of our national veto. After a while, I began to wonder what, as time unfolds, Labour will supply to the European debate that is distinctive.

Mercifully, the right hon. Member for Copeland pre-empted my anxieties in that respect. Labour would take into the Union its time-honoured characteristic of proscription. Every party and every Government would be tested to see if they passed Labour's good housekeeping arrangements. The question was raised of the Italian Government. Let us not be delicate. The right hon. Member for Copeland did not mean that he would refuse to sit down and share spaghetti with Signor Berlusconi. It is Signor Fini about whom the right hon. Gentleman has great reservations.

I challenge the right hon. Member for Copeland to name the name that gives rise to the proposition that there are Ministers in the Italian Government with whom a Labour Government would have no contact. That is no way for a potential Government to behave towards European Union partners. If the Union cannot inspire some sense of tolerance, it will never have any chance of longer success.

I do not regard the exchange earlier today as flippant July madness. The assertion that there are Ministers in the present Italian Government with whom members of a Labour Government would be unwilling to co-operate is an indication that Labour is taking into the Union a sectarian attitude to its functioning that would falsify all Labour's other ambitions.

Mr. Radice

I understand that the European People's party is not enthusiastic about those particular persons, with whom the right hon. Gentleman's party is loosely associated. Others object as well.

Mr. Biffen

That is simply considered. I invite the hon. Gentleman to name one continental European Government containing members of the EPP who have said that they will not sit down and discuss matters with certain members of the Italian Government.

It is quite simple. As we go through political life, we often have reservations about those people with whom we have to have daily contact. Frankly, within this Chamber, calculated unease is an integral part of how we operate. I think that the hon. Gentleman will have problems enough, in the course of European co-operation, without the self-imposed and sanctimonious barriers that are being sought.

Mr. David Winnick (Walsall, North)


Mr. Biffen

No, I shall not give way. I shall make a short speech, thus giving the hon. Gentleman an opportunity to address the House.

As this is the first time that we have debated the subject since the European elections, I pay my respects and regards to the right hon. Sir Christopher Prout, who led the Conservatives at Strasbourg and was my European Member of Parliament—the Member for Staffordshire and Shropshire. He contributed significantly to Conservative fortunes in Europe, although in terms with which I often disagreed. It would be appropriate to place that tribute on the record, and I hope and believe that those on the Government Front Bench will endorse it.

The European Union (Accessions) Bill has achieved a good draw for a non-voting occasion, which goes to show that the issue is at the heart of British politics, wherever else it is. Why? Because Euro-scepticism, as advanced from the Conservative Benches, has made it into a major political issue. That is a tribute to this institution—the House of Commons—without which the exercise could not have been mounted in such a way.

I understand that the Prime Minister addressed the 1922 Committee last Thursday. I try to avoid too much emotion and excitement. I was not there, and I am dependent on a report in The Times, which stated that he said: As the membership of the European Union expands, it will be impossible for the centralist model to continue".

Mr. Budgen


Mr. Biffen

My hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) pertinently observes that one would like a little more definition of the interplay between widening and deepening, in the context of the assertion that it will be impossible for the centralist model to continue". That will be the subject of continuing debate for this Chamber in the coming months and years.

I shall consider the Bill in the context of three matters: European diversity, qualified majority voting, and the common agricultural policy. Out of deference to all the other hon. Members who wish to speak, I shall do so at breakneck speed and ask for tolerance for my brevity when considering those three major points.

First, of course the Bill will add to the diversity of Europe. There is an extraordinary unwillingness to recognise that, from its very inception, the European Community had aspects that were by implication diverse—for example, the fact that the Federal German Republic had a relationship with the German Democratic Republic which made it unique within the Community, and powerfully unique.

There is also the central paradox that the industrial aspects of the Community were dominated by liberal economics, whereas agriculture was dominated by the highest common factor of protectionism. We can expect that to increase with increased membership, as different social structures have to be adapted to the confines of the European Union, and as certain fashions are replaced or challenged by other fashions.

I know that some of my hon. Friends may not be too excited at that prospect, but I do not believe that anyone will persist with the same enthusiasm and decisiveness with the liberal economics that dominated the early phases of the Community, especially as the Union enlarges to the east. Hungary and Poland are already moving away from their original preoccupation and fascination with market forces. At this stage, no one can foresee what the balance of social and economic fashion will be as we proceed. However, we are fully entitled to judge that, if the Union is to be a successful partnership of nation states, it cannot be shackled to any economic ideology.

Secondly, qualified majority voting can be reconsidered in the light of the accession of these countries. That was made clear in the Ioannina statement, ahead of the 1996 renegotiation. I hope that my hon. Friends on the Treasury Bench will persist with the arguments on qualified majority voting that they advanced unsuccessfully last March. I do not regard my attitude as especially nationalistic—not that that does any harm—as the European Union is bedevilled by bureaucracy. I fully accept that the Single European Act was probably the most decisive development in that direction. My hands are as stained as anyone's. I am here not to apologise but to assert what I believe to be an observable political truth.

I cannot see any easy way out of the difficulty. That bureaucracy will destroy any idealism for the European Union that might exist. In as much as it gives slightly more chance of blocking the initiation of legislation, qualified majority voting should be welcomed—and welcomed as much by members of the Labour party as by Conservative Members. We have now got out of the way the tactical problems caused by persistence with the British stance on qualified majority voting and what it might do to affect the successful applications of these countries. We can now consider such voting in a more relaxed atmosphere. I hope that Opposition Members will also see some virtues in trying to impede the flow of legislation and understand what that legislation is doing to general affection and support for the European Union.

Finally, most hon. Members who have spoken have mentioned the common agricultural policy. It is clear that we are taking on four national agricultures, each with remarkably distinctive characteristics. None of them is large, but all represent powerful political considerations for each of the nation states.

Surely we ought to begin to try to apply the principles of subsidiarity when relating those national agricultures to the existing common agricultural policy. If we cannot do so now, and cannot achieve some clear successes soon, it will be impossible to draw up a framework for the inclusion of the agricultures of applicant countries from central and eastern Europe. In every sense, we are on Euro-borrowed time as far as that matter is concerned.

Once again, that issue ought not to be the cause of division across the Chamber. I do not believe that it is seriously at issue. In the reform of the CAP, supporting qualified majority voting and ensuring an inherent diversity in the European Union, we are all talking sceptic language. As the centre of the debate moves, the sceptics will march with it.

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

I am no sceptic, and I do not speak sceptics' language. I should have loved to follow a good many of the points made by the right hon. Member for Shropshire, North (Mr. Biffen)—for instance, his delightfully throwaway, cavalier comment "What's wrong with nationalism anyway?"—but time is pressing.

Liberal Democrats warmly welcome the impending accession of Austria and—conditional on their referendums—Finland, Sweden and Norway. The addition of four prosperous and stable democracies can only strengthen the Union in all spheres of its activity. However—as a number of hon. Members have pointed out—that enlargement will place great strains on the existing institutional framework, and its reform must be addressed urgently in advance of the 1996 intergovernmental conference. As the Foreign Secretary said, we also need to look forward to the adhesion of the central and eastern European countries, and in time—almost certainly—that of Malta and Cyprus; Switzerland will probably change its position as well.

First, we must consider the size of the Commission, the way in which its members are appointed—not least the President—and the extent of the European Parliament's involvement. Let me digress for a moment, and comment on the Corfu affair. Jean-Luc Dehaene, a Belgian, was the Franco-German nominee for the presidency. Why did all that happen? On 26 June, The Observer commented—in an editorial, not a news item— The idea, promulgated by John Major and Douglas Hurd yesterday that Britain was opposing the Franco-German candidate, Jean-Luc Dehaene, because of the manner of the choosing—rather than the man who would have been chosen—is so much hogwash. The President of the Commission has always been chosen behind the scenes by the leaders of the European states. The "white smoke" system may be wrong, incidentally, but hon. Members should note that there is no record of the United Kingdom's having opposed it in the past, and no record of our having sought to change it.

The editorial continues: Helmut Kohl raised the name of Dehaene to John Major a couple of months ago and received no objection. Indeed, the Prime Minister had none at that time. I should like to know whether that is true, because, if it is, the Prime Minister must have been consulted in April. An Observer editorial would normally be regarded as a reasonably authoritative and reliable piece of paper.

The article goes on: What has happened since is that the presidency has become an issue in the Conservative Party, a litmus test of Major's willingness to stand up against the Continentals. The Prime Minister has chosen to take his stand for reasons wholly of domestic politics. I think that that is true, and that it reflects badly on the Government.

I do not know how many hon. Members saw The Independent's Saturday magazine the day before yesterday. I thought that one of its cartoons summed up the position beautifully. It showed a man looking gloomily at a poster on a wall, apparently advertising either aftershave or deodorant, and an extremely pugnacious, lantern-jawed Prime Minister holding the valuable elixir; the slogan read "Veto—for Men!"

Mr. Cash

Will the hon. Gentleman give way?

Sir Russell Johnston

For the hon. Gentleman, what else could I do?

Mr. Cash

Is the hon. Gentleman aware that Jean-Luc Dehaene was responsible for delivering to Chancellor Kohl the siting of the central bank in Frankfurt? Does the hon. Gentleman not think that that might have had something to do with—quite apart from Mr. Dehaene's federal inclinations—his determination to ensure that he was repaid for the good services that he had rendered?

Sir Russell Johnston

Does the hon. Gentleman not think—as we are in the business of "thinking", which of course is a good thing—that the siting of the central bank in Frankfurt had a good deal to do with the United Kingdom's failure to accept any commitment to economic and monetary union or a single currency? Of course it did.

I believe that the whole question reverts to the continuing inability of the British political establishment to understand consensus decision-making, and its tendency to favour sporadic macho-dramatics instead. Another recent example of that was the qualified-majority adjustment to take account of enlargement; I know that it has already been discussed, but I think that our position was silly.

Reducing the number of Commissioners—if that is the favoured route—would not be easy, and I would be foolish to try to present a scheme now. I find two ideas particularly interesting, however. First, there is the possibility of retaining the same pattern rather than reducing the number, while increasing the number of vice-presidents and giving them the core responsibilities for policy. Secondly, there is the possibility of acting on a regional basis—Iberian, Benelux, Nordic and so forth. Either way, something must be done.

Madam Deputy Speaker (Dame Janet Fookes)

Order. I am sorry to interrupt, but I have only just taken the Chair and I must admit to being slightly confused. I thought that the House was debating the Second Reading of a Bill enabling other countries to accede to the European Union, but so far I have not heard much on that subject. I hope that the hon. Gentleman will be able to relate his remarks to the main subject under consideration.

Sir Russell Johnston

I can only say, Madam Deputy Speaker, that none of my remarks relates to matters that have not been raised by other hon. Members. It is inevitable—

Madam Deputy Speaker

Order. I have not had the pleasure of hearing what other hon. Members have said; I am concerned only with what happens here and now, when I am in the Chair.

Sir Russell Johnston

If we are dealing with enlargement, Madam Deputy Speaker, must we not inevitably deal with its consequences—its effects on the European institutions, and on the Union as a whole?

The second point that I am anxious to make—

Madam Deputy Speaker

Order. May I clarify what I said? If the hon. Member can make an adequate and convincing connection, I shall have no objection; my point was simply that, at the time when I was listening to his speech, he seemed to be making no such connection.

Sir Russell Johnston

I am extremely sorry if that was your feeling, Madam Deputy Speaker. I shall do my utmost to follow your wishes.

In the event of accession, the European Parliament will at some point have to be revamped. It is impossible to contemplate the possibility of a continuing and unlimited increase in size. That will mean that it must also be made more proportional to population. The Foreign Secretary raised the point earlier in relation to qualified majority voting, but he did not mention the fact that the Germans, for instance, are undoubtedly severely under-represented in the European Parliament. Problems such as that will have to be corrected at the same time.

The Nordic countries—three of which are to join the Union—have a particularly open form of democracy which, in my view, is far superior to ours. They will certainly be allies to those of us who wish the Parliament's co-decision-making powers to be increased, and want its involvement in the individual approval of Commissioners.

Mr. Dalyell

The hon. Gentleman and I were colleagues in the European Parliament when it was much smaller in terms of countries. He may recollect that, even then, there were great difficulties of translation. How will those difficulties be overcome if the Nordic countries take up their right to use their own language? There will be a great demand for tranlations of Swedish into Greek and Portuguese into Norwegian. Will there not be real physical problems?

Sir Russell Johnston

The short answer is, yes there are. The three new languages will undoubtedly cause not only interpretation, but translation problems and cost.

Mr. Duncan Smith

They will throw even more of our money at it to solve the problems.

Sir Russell Johnston

Yes, but the hon. Gentleman is touching on a peculiarly sensitive issue: a country's language. We are lucky because most of us speak tolerable English. For the Finns, the Norwegians and the Swedes, language is a touchstone. The hon. Gentleman must recognise that fact.

Mr. Spearing

I am grateful to the hon. Gentleman for giving way. He remarked, I think to general agreement, that the form of democracy enjoyed by some of our Nordic friends may be superior to our own. If decisions are taken away from their Parliaments, will not that risk the atrophy of their democracies, and therefore diminish their quality, on which we all agree?

Sir Russell Johnston

Let me think about that—I know that that is unusual in the House. With respect to the hon. Gentleman, who has had views on this matter for a long time, it is a question not of taking all powers away from the old Parliaments, but of taking certain direct responsibilities away from them and transferring them to the Council and to the European Parliament. That will not necessarily lead to the atrophy of what is left.

The Nordic countries will be particularly supportive of opening up the Council of Ministers and of seeking to end the excessive secrecy through which it makes decisions, which often even denies us information on who took up what position and why. With regard to the Council, the other main question relates to the scope of qualified majority voting, whether there will be a case for greater weighting for some decisions, and if so, what decisions. I do not think that opting out is a solution.

The Bill's explanatory memorandum states: Austria, Norway and Sweden are expected to be net contributors to the Community budget. They will contribute more than enough resources to cover the increase in Community spending resulting from enlargement. The balance will reduce the financial contributions of the existing Member States, including that of the United Kingdom, compared with what would otherwise have been the case. That is a funny way of putting it. The reference to the UK suggests that it is not one of the existing member states. That may be legally necessary, but it is odd.

Not only as a result of accession but for other reasons, a review of the budgetary position will be required. That particularly affects us because of the United Kingdom rebate. We have concentrated too much on saying that we must keep the rebate. We should take a lead in trying to devise a system that relates gross national product to contribution—an outcome that would be fair to ourselves and to others.

I have not so far used the word "federal", which has often been bandied about, but the future European Union will be a federal Europe not a unitary Europe, and the accession of the four countries increases that likelihood. In those matters that we undertake together—political policy, which includes foreign policy, security and defence, economic and environmental policy—we must devise systems that give not only Governments—this is where I part company with the right hon. Member for Shropshire, North—but our citizens a direct opportunity to play a part in decision making at European Union level. The Liberal Democrat view of tomorrow's Europe is of a citizens' Europe, not an intergovernmental Europe.

The Foreign Secretary referred to the central and eastern European countries, which are still out in the cold, but which we all agree should ultimately accede. We need more than generalities of intent, even if they are well expressed. We need more open trade arrangements and to be more specific in establishing a clearly defined time scale on membership of the Visegrad and Baltic countries, Slovenia and others.

I should like to continue, but time is short and many hon. Members wish to speak. The accession of Austria, Finland, Norway and Sweden is greatly welcomed by Liberal Democrats, and I very much hope that the Bill will receive a Second Reading without a Division.

6.44 pm
Mr. David Howell (Guildford)

I do not want to be accused of the crime of optimism, but I welcome the accession of the four new members, assuming that it takes place in all four cases, because the changes greatly reinforce the opening up of a range of issues about the direction of Europe which have hitherto been closed. The institutional structure must be revamped. The institutional discussion will involve the size of the European Commission and its powers.

The Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Wells (Mr. Heathcoat-Amory), has rightly said that reviewing those powers in 1996 is an objective of British policy. Accession will change the entire style in which the Community is run and take us aeons away from the old Common Market, the old European Economic Community and even the European Community, which we joined some years ago and which many of us thought was the right way towards the great single market of 1992.

As my right hon. Friend the Member for Shropshire, North (Mr. Biffen) said, with his usual insight and shrewdness, accession will change and challenge the common agricultural policy, the root foundation block of the old EEC, the deal between France and Germany secured by the great European statesmen, which would keep the whole thing together. There is no conceivable way in which the CAP as presently structured can even accommodate the Eftans. Finnish agriculture is a mix of earth and forest; Swedish agriculture is also different; Austrian agriculture is not that different from German or Swiss agriculture, but it is different from that in other countries. Norwegian agriculture is different again.

If the EFTA countries join, all those matters will have to be rejigged. If we move on, as I hope we shall, and bring in the Visegrad four and Slovenia, which has not applied but which, like the Visegrad countries, is anxious to come in on the coat tails of Austria, the concept of the CAP will be dissolved. There is no conceivable way in which the agricultural sectors in Poland or Hungary, which have a huge capacity and which could feed almost the whole of Europe, can be opened up and allowed to market their products, raise living standards and ensure that they achieve a democratic process and progress. That cannot be done without a fundamental reform of the centralised agricultural system on which the Community has been based.

That is one practical example of a much larger picture that is opening up as a result of the proposed accession of the new members. I welcome that even more because it gives us a chance to begin to develop our vision of the direction in which Europe will go in and after 1996. I agree that we should get on with that. We cannot wait for this funny reflection group, the prepatory committee, which is to be chaired by a Spanish gentleman and which is to be intergovernmental but, oddly, will include two Members of the European Parliament.

The matter should be triggered by the Bill, the act of accession of the three and the clamour of the Visegrad four to join the European Union, or at least to join in the political process of the Union, in the pillars of interior and justice matters and in a common foreign and security policy, if not the single market. We cannot wait around for the reflection group to reflect.

Nor can we wait for certain cliques in Bonn, Paris and Madrid to hijack the presidency for a whole series of six-month periods from now until 1996 and to impose through that device a totally federalist, out-dated and old-fashioned agenda. We cannot wait for any of those things.

Instead, we must get on and seize the opportunity, which I believe is presented in ever greater openness to us, to develop the alternative vision of Europe. We have now a golden opportunity to fill out in detail what we mean by a multi-track and multi-layered Europe, and to explain how we intend to set out an agenda that will challenge the old idea, which is still, I am afraid, enshrined in Maastricht, that all European affairs should be wrapped in a single hierarchical structure, and that a single institutional system should embrace everything.

We must challenge the idea that eventually the pillar of the single market should, by magnetism, pull the other pillars into a gigantic single trunk. We must show how we intend to go in another direction, how we have allies in the rest of Europe who will also move in that other direction, and how we intend to reinforce, and in some cases actually give, the intellectual lead so that that can be achieved.

Right hon. and hon. Members may say that my view is all optimism. The cry from Opposition Front-Bench Members has been that my right hon. Friend the Foreign Secretary is indulging in self-delusion, and that these changes are not happening. I tell the doubters what the new countries, such as Finland, are saying. Of course, for the moment, they are saying, "Let us just sign up. We want to get into the Union. Don't bother us with the details and the arguments; that will come later. We shall accept the acquis. Everything else will fall into place later."

Those countries are also saying to themselves that they cannot go on with the much-vaunted social policies and the much-vaunted economic policies that they have adopted in the past. We have heard a great deal about the glories of Scandinavian social policy. The hon. Member for Rhondda (Mr. Rogers) seems to have forgotten that, in Finland, there is 20 per cent. unemployment and that the Finns are crippled by the most enormous social budget.

The whole level of debate in Finland is about how to introduce deregulation, how to unscramble the overwhelming social burden, and how to move into an entirely modern stance, which would fit not with the Brussels of the social chapter and not with the Brussels of high Maastricht, but with a looser and much more competitive Europe. That is the debate going on in Finland. If the hon. Member for Rhondda thinks that that is not going on, he is ill informed and out of date.

Mr. Allan Rogers (Rhondda)

Is the right hon. Gentleman contending that unemployment in Scandinavian countries and in other countries is due to decent living and working conditions? If unemployment exists, as the Government say, because of factors outside their control, surely that argument applies to Scandinavia as well. Surely unemployment is not directly related to the fact that the Scandinavian countries believe in decent conditions for workers.

Mr. Howell

What I am saying—I point to the facts—is that the much-vaunted social policies which Opposition Members believe to be so important—indeed, they act for the reinforcement of more centralised social policy in Brussels—have not brought the high standard of living, the glowing harmony and the high employment that we all want to see.

Mr. Duncan Smith

I take up my right hon. Friend's earlier point about this enlargement being only stage one of two stages of enlargement. The reality may be that the Germans and others will say, "We have given the British their prize of enlargement, so we can now get on with our other agenda. Let us push these others, who would really lead to reform of the institutions, to one side." We must leap into this now, and not hold back.

Mr. Howell

I totally agree. However, I do not fear that there will be resistance from Germany to bringing in the Visegrad four, as my hon. Friend suspects. On the contrary, the Germans, as they have been almost since the creation of modern Germany, are in the usual dilemma.

Germany is a huge country dominating the middle of Europe, but the Germans do not know whether to follow their powerful instinct to bring the states of eastern Europe as fast as they can into the European Union and into the security system, whether to put that second to binding themselves with France, or whether somehow to avoid the choice. Of course there is a choice, and it creates turbulence and a lack of clarity in German politics. That is interesting for the analyst outside, but it is a little disturbing.

However, I believe that the Germans will try to do both at once. They will seek to ensure that the Visegrad four come in, for a good reason. In a sense, they want countries with western values on their eastern border, as they have on their western border. They want a westernised eastern and central Europe, and that is why, for political reasons, they are already backing the entry of the Visegrad four in a way that makes the French extremely uncomfortable.

That point leads me to the view, which has not been mentioned today, that the Franco-German federalist axis, which is alleged to be so unstoppable and which, it is believed, will roll forward and impose a federalist agenda, is not as strong in its content and its inner meaning as it has been in the past. Major differences are emerging between the French and the Germans which should be understood, although not necessarily welcomed all the way, because we do not want the French and Germans to get into a state of hostility, as has been the case in the past 100 years. There are major questions, however, which take the French and the Germans in distinctly different ways.

It is essential that we back the German aim of bringing the eastern European countries into the European Union as fast as possible. I hope that the House sees the point that they cannot join the great single market tomorrow, but that they should be given the opportunity to join in any political developments outside the single market as soon as possible, and that they should be involved politically in every conceivable way.

I want to see those countries involved in security terms which means going further than "Partnership for Peace". I have never been very comfortable with the "Partnership for Peace" idea. It may suit Finland, one of the new accession countries, because of its position vis-a-vis Russia. It may suit some of the Baltic states, and it may suit Russia, which is signed up to it. However, Hungary, the Czech Republic and Poland are ready to move into a full, proper European security system and would like to do so as soon as possible.

I hope that the enlargement of NATO can embrace the eastern and central European countries, including any of the new countries joining the European Union, as soon as possible. I hope that we do not wait for Russia to struggle through all its own agonies and to work out its democratic problems. That could take decades, and it is on a completely different time scale from the needs of eastern Europe and the Visegrad four, which, as I said, I hope will follow the accession four with which we are now dealing.

This is a crucial moment, when we can, as my hon. Friend the Member for Chingford (Mr. Duncan Smith) said, begin to pile on the pace. We can begin to say that, now that we have the 15 or 16 and now that we have opened up the institutional and constitutional issues of how Europe should be organised, how we entrench subsidiarity, how we limit the powers of the Commission, how we build a Europe that is constitutionally of nation states, and how we halt the tendency for the whole thing to drift in a centralised direction, now is the opportunity to achieve the real objective of European union, which is to recapture for the democratic camp the lost states of eastern and central Europe which we thought we had won back at the end of the second world war but which were taken from us.

That movement is the greatest opportunity and the great leap forward of 1996. It is not a great leap forward towards an unattainable monetary union based on an unattainable single currency. It is not a great leap forward towards more federal institutions and a tighter, inward-looking western Europe. We do not want that kind of great leap forward. We want the great leap forward towards bringing these countries into the democratic system. That is a vision which I hope all hon. Members will articulate with more confidence than we have in the past.

We have a great confederation and a gigantic single market which runs from Finland and Lapland in the east to Lisbon in the west, and from the toe of Italy up to John O'Groats and to the northernmost point of Europe. It is a huge single market for which we should work. I must tell my right hon. and hon. Friends that it will include some qualified majority voting, perhaps in areas which we have not yet covered, and perhaps not in areas which are covered at present.

Outside that, we may employ the multi-track and multi-speed approach to all the additional political, defence and foreign-policy ambitions, as well as to the ambitions for intrusion into the nooks and crannies of social and national life in every conceivable and unnecessary way, and we need not insist on a single hierarchy and a single institutional system.

There is a vision out there which is receiving greater and greater support from people in all parts of Europe. Luckily, it unites—or should unite—the party of which I am a member. It should unite this Parliament, and it will unite Europe in taking itself forward to become a larger organisation, which will ensure peace and stability, and postpone for ever the return of the war which destroyed Europe in the past.

7 pm

Mr. Jim Marshall (Leicester, South)

May I briefly address the final comments of the right hon. Member for Guildford (Mr. Howell)? I certainly agree that the next great challenge and leap forward for the European Union is the possible accession of the Visegrad countries, perhaps in a decade's time, followed by others. There is a curious irony that those countries, as the right hon. Gentleman said, will show far greater enthusiasm for and sympathy towards the military alliance of the European Union than the four impending members which we are discussing. That is not necessarily altogether in their favour, but it shows the eagerness with which those countries in central and eastern Europe wish to join the European Union. Therefore, I share with the right hon. Gentleman the hope that it will not be too long—probably a decade—before we consider the impending accession of those countries.

Along with the vast majority of hon. Members, I welcome the accession of the four countries in question. I share all the sentiments expressed by my right hon. and hon. Friends and echo what has been said about the empathy that we have with those four countries and the way in which we are looking forward, as social democrats, to working with them if—hopefully—they all accede lo the European Union from January 1995. Most of the speeches have concentrated primarily on one pillar of the European Union: the economic community. That is clearly an important pillar, but I do not feel that sufficient regard has been paid to one of the other pillars of the Union—the common foreign and security policy which the Maastricht treaty established. I wish to address my remarks to the difficulties that we are likely to face after the accession of Austria, Finland, Norway and Sweden to the European Union.

Hon. Members do not need me to remind them that the Maastricht treaty established three pillars: first, the economic community; secondly, the internal aspects of the Union; and, thirdly, foreign and security policy. It also designated the Western European Union as the defence arm of common foreign and security policy. We have been struggling since then to get some kind of coherent common foreign and security policy which could be accepted by the present 12 members of the European Union. We have been struggling, but recent events, especially in the former Yugoslavia, show how little progress we have made in that regard. Inevitably, national interests have been paramount and have tended to hamper the search for a common foreign and security policy. In the case of Yugoslavia, we can cite Germany's natural tendency towards Croatia, and, more recently, Greek sympathy towards the Serbs. We have had that difficulty with the present 12 and such difficulties will probably increase with the accession of the four new countries.

If we consider the facts, three out of the four countries are traditionally neutral. I find it paradoxical that the Foreign Secretary of Sweden and the President of Finland have stated that they wish to enter the European Union. One of the reasons for that is that it will offer them greater security. They want greater security through membership of the European Union, but they are not prepared to be members of any of the military alliances which bind the core members. Clearly, that may well alter with the passage of time. Indeed, there have already been indications, especially from the Finnish, that their attitudes may alter, particularly after 1996. However, this Bill deals with the here and now and the period up to the intergovernmental conference in 1996. As I have said, the situation may change, but it means that, in the enlarged European Union of 16 members, 11 only—that includes Norway—will be full members of the Western European Union, while four members of the European Union, Sweden, Finland, Austria and Ireland, would not be members of any military alliance whatever.

Sir Russell Johnston

Is the hon. Gentleman aware of the recent visit by Western European Union representatives to Finland? We were extremely warmly received and there was every indication that the Finns were radically reassessing their situation.

Mr. Marshall

As the hon. Gentleman knows, I am a member of the Western European Union, which is why I speak about it with such feeling. I have tried to express the view that the feelings of the four countries are the most likely to change in the near future, but the reality is that, at present, it is not their stated intention to become full members of the Western European Union. They have indicated their wish to be observers, which is in line with what I have already said to the House. The claim of the Western European Union to be the security and defence wing of the European Union is substantially weakened if one third of the membership of the Union are observers to it only. If we are to progress with a common foreign and security policy and a common defence policy, which will, one hopes, lead to common defence, to use the Maastricht phraseology, it clearly cannot be based on a military or defence strategy in which one third of the membership of the European Union are fully participating, fully paid-up members of the defence organisation and European pillar of NATO: the Western European Union.

May I remind the House that the accession of those four countries will bring a new set of problems? I think that it was the Foreign Secretary himself who said that, for the first time, the European Union will now have a common border with Russia. The Scandinavian countries have a close interest in the Baltic states. I am not suggesting for one moment that the United Kingdom does not have an interest in them too, but the interest of the Scandinavian countries is much greater than that of the United Kingdom. That applies especially to Sweden, which has invested a great deal of time, energy, money and diplomatic effort in supporting the Baltic states.

I remind the House that President Yeltsin referred to the three Baltic states as the "near abroad". In a parody of President Yeltsin, the Swedish Government referred to the three Baltic states as the Swedish "near abroad" to indicate their own interest in preserving the independence of the Baltic states.

My two examples show that the European Union will be faced with new and different problems. As a consequence, it will have to take a much closer interest than it has in the past in the political and economic development of Russia. I hope that we are prepared to be more proactive in assisting the Russians in the development of their economy than we have been hitherto. We must also take a closer interest in the foreign policy developments of Russia.

Having been pessimistic and probably having presented a far too negative case, I shall end on a positive note. Clearly the four applicant countries have great experience in international affairs. They have all played their full part in the development of the United Nations and in carrying out the United Nations peacekeeping and humanitarian efforts throughout the world. They have also assisted in the promotion of the welfare and interests of the third world. I hope that when they accede to the European Union and begin to play their full part in the development of the foreign policy of the Union, if not its security and defence policy, they will be able to push the EU towards a more imaginative approach to third world problems and to global environmental problems. If they are able to do that, their accession will more than outweigh the negative features that I have outlined and the pessimistic case that I presented about the four countries' participation in the security and defence organ of the European Union.

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

I suppose that the first question that we must ask is whether it is necessary for the four applicant countries to accede to the European Union if we are to give them some of the advantages that many in this country would wish to extend to them. Surely it is not necessary to invite them to join the Union if we are to enter into some form of military alliance with them. Equally, it is not necessary to invite them into the Union if we wish to extend to them the advantages of free trade and to gain the advantage for our manufacturers of free trade with them. It must surely be that we principally advocate their entry into the Union because we believe that it will have some beneficial effect upon the Union itself.

I am glad that my right hon. Friend the Member for Shropshire, North (Mr. Biffen) is in the Chamber. He has a long and distinguised career in his criticism of the Union, or the Common Market as it used to be. When talking to me he always said, "Extend the Common Market; bring in more members. That will loosen it up." He used to use a different verb, but that was the effect of his remarks. He always argued that when the southern European countries came in the common agricultural policy would be loosened.

My right hon. Friend reminded us of the imaginative attitude that many of the people of southern Europe have towards the question of public finance. He felt that it would be unlikely that the Germans would wish to finance, say, a tobacco-support mechanism or the growing of notional olives on every piece of concrete in southern Italy. That has not happened yet. Equally, the loosening up of the CAP has not yet happened.

We are about to find that the cost of financing the CAP and the European Union has grown enormously, partly as a result of the entry of southern European countries and partly because of our great vision—all this vision—of convergence and industrial support. We would be opposed to it if we saw it emerging in the United Kingdom, but we manage to describe it with great enthusiasm when we see it elsewhere in Europe.

Is it proven that the entry of the four applicant countries will loosen up the Community? I have tried to ascertain what people mean when they talk about deepening the Union. To some, deepening is a term of abuse. To others, it is a sign of the Union developing in ways of which they approve.

It seems highly likely that the entry of the four countries will be to the Labour party's advantage in the sense that their entry will lead to the shaping of the Union in a manner of which it tends to approve. Each of the four countries will be in favour of the social chapter. I note that the hon. Member for Durham, North (Mr. Radice) is nodding firmly. He has been one of my tutors in these matters over the years.

The four countries will be strongly in favour of the social chapter and will be more than likely to disapprove of our opt out. They will say that our opt out gives us an unfair advantage in competing in Europe. They will use the Community's institutions to impose the social chapter on us by various indirect methods connected mainly with the Single European Act. They will further impose it by the use of the federalist mechanism of law-making and law-enforcement within the Community. To that extent, their entry will surely lead to the further deepening of the Community.

The argument of my right hon. Friend the Member for Shropshire, North about the southern European countries and the CAP can again be used. We are to see the entry into the Union of four more agricultural economies with slightly different agricultures. That will again distort and make more expensive the CAP. By any rational standard, one would expect the Germans to say, "We have had enough. We do not want to support any more of these distortions. If these distortions are to be later extended to the traditional bread basket of Europe—Poland, Hungary and Czechoslovakia, as it used to be—the cost will be enormous."

The loosening up process has been anticipated on so many occasions but it has not come yet. When most people talk about deepening, it is a term of art for what happens to be their particular concern about the Community as matters stand. There is much talk about our vision of Europe.

I hope that my right hon. Friend the Member for Guildford (Mr. Howell) will forgive me for being offensive, but he offers the House a lot of stuff about our vision of Europe being accepted by the rest of Europe. If a gentleman in the south of Italy is completing his application for some form of industrial or agricultural support, I do not suppose that he has in mind much of what my right hon. Friend said about his vision of Europe as a place where honesty, democracy and gentlemanly behaviour will overcome all national characteristics.

I dare say that the gentleman who is pulling down the ramp of a cattle wagon to unload a cow which is about to be walked across the border between the Republic of Ireland and the north in order to collect subsidies on each side of the border does not have much in mind talk about a vision of a democratic, honest and forward-thinking Europe. I doubt whether he will be completely overwhelmed and burst into tears of contrition as a result of the vision of Europe held by my right hon. Friend the Member for Guildford.

Sir Russell Johnston

One could say, so what?

Mr. Budgen

I was just going to say what.

Instead of telling Europe how it should proceed, we should recognise that there are many individuals, parties and states in Europe who genuinely believe in a federal structure. No doubt, if we were Belgians, we would have a very different view about how our country might be united. If we were Italians, we might well say that we did not trust our domestic institutions and that we would be happier to be ruled by European statesmen. Those are perfectly reasonable points of view.

My contention is that it is not much good making airy speeches about how our vision will conquer Europe. In the present circumstances, the best we can do is to decide what our view of Europe should be. We should try to assess domestic opinion and try to offer a little leadership in that regard.

Instead of going on about a vision for Europe, we should recognise that the most important misfortune that we have suffered as a nation in recent history was the mismanagement of our economy through our membership of the exchange rate mechanism, the failure of the Conservative party to understand that that membership was only the necessary preliminary to a single currency and the need for us, in our party and in our country, to argue with those who are still unprepared to accept the lesson of that humiliation.

It is no good saying that allowing the accession of these four countries is irrelevant to that point. When I said that to the Foreign Secretary, he replied that the accession of these countries has nothing to do with a single currency. However, my right hon. Friend should read some of the speeches which his fellow members of the Cabinet make from time to time.

The Chancellor of the Exchequer made an extremely important speech in Bonn on 29 June. When expressing his support for Sir Leon Brittan and for Mr. Lubbers, he said: These men are all men with a vision of European Union. They support the deepening as well as the widening of the Union. The Chancellor of the Exchequer then very helpfully explained his views further on television the following Sunday. According to The Daily Telegraph, the Chancellor said: However with the prospect of a further enlargement of the European Union he indicated that a common currency would soon be inevitable. 'The idea that they will all be trading in 20 freely floating currencies based on 20 monetary authorities I would find highly unlikely.' 'It is possible that they would all trade in Deutschmarks.' No one can accuse my right hon. and learned Friend the Chancellor of the Exchequer of being overwhelmed by an interest in detail. It is possible that he did not draw the distinction between a common currency and a single currency. However, he has been the most vigorous advocate of a single currency.

When he appeared before the Treasury and Civil Service Select Committee recently, my right hon. and learned Friend the Chancellor of the Exchequer said that he had not had time to read the book which his old friend Sir Leon Brittan had written about Europe. I recommend that book. It is a very important and interesting summary of the present views of many people in the Tory party. On page 54 of his book, Sir Leon writes about the membership of the club: This is crucial, for the government leaders who signed the Treaty are fundamentally aware of two factors; first, that some of them may be ready and willing to form a single currency before others, and must not be stopped from doing so; and secondly that, in the long term, a single currency will work more effectively the more European nations join. The Chancellor of the Exchequer and Sir Leon Brittan believe that the accession of these four countries, far from loosening the organisation in the European Union, will actually deepen it, make it more integrated and lead inexorably—they argue—towards a single currency.

I have spoken at some length and I am sure that my colleagues would like to contribute to the debate. Let us not in this House make vague, vacuous assertions about the way in which our European neighbours will change their view. They, like us, formed their view perhaps in childhood or in late adolescence, but owing to the deep experiences of their countries, families, towns and villages, they will not be influenced by foreign words, no matter how grand or eloquent.

All we can do in this House is to try to see how such policies work for our country and offer some element of leadership and choice. At least we can now say that the Labour party is moving clearly and firmly towards the advocacy of a federal European state. It will soon be the duty and honour of the Tory party to offer choice to the country.

7.27 pm
Mr. Peter Mandelson (Hartlepool)

Before the contribution of the hon. Member for Wolverhampton, South-West (Mr. Budgen), I was going to say that the one thing that has tended to unite those of us who are habitués of these European debates is our support for enlargement. The hon. Gentleman fractured, or at least splintered, that fragile unity among us. That is a shame because, like hon. Members who have already spoken in the debate, I strongly welcome the accession of Austria, Norway, Finland and Sweden to membership of the European Union.

In the past, we have tended to differ, and the hon. Member for Wolverhampton, South-West referred to those differences, on whether deepening should accompany widening, whether widening means diluting, as some hope, and therefore whether widening means more or less integration within the European Union. I can say unambiguously that I entirely share the analysis of the hon. Member for Wolverhampton, South-West. He got it absolutely right. He was spot on. To those who see widening as an alternative to deepening, I say that, in the history of the European Community, enlargement has always led to greater integration.

The economic and political forces that drive the process of European integration are invariably strengthened, not weakened, as more nations gain membership. The greater the number of members, the clearer and tighter—not the vaguer and looser—the institutional arrangements have to become to accommodate the decision-making among the increased number of member states. That, of course, means more complexity, more tough bargaining, more compromise and more give and take between that greater number of member states. It also means, inevitably, more majority voting within the European Union. We must face up to that. That has been the lesson of enlargement in the past and it will be the case as we move from a 12-member to a 16-member Union. It will certainly be true in spades with the coming challenge as the Union is enlarged through membership of east European countries.

Given the complexities and the difficult currents within the Union through which we must navigate, it is all the more important to have a clear and agreed vision of where we want to end up. We also need a good route map to enable us to get there. It is lamentable and unfortunate, and a great loss for our country as well as for the entire European Union, that that vision and end goal, as well as the route map, are notably absent from the Government's approach. On its current performance and in the light of its current divisions, the Tory party seems incapable of providing them.

I shall discuss where the European Union is going and some of the problems tat it must face on the way. I shall be as blunt as some hon. Members who have already spoken, including the right hon. Members for Guildford (Mr. Howell) and for Shropshire, North (Mr. Biffen). On the subject of further enlargement, I believe that a continent like Europe, which is so strongly linked by its geography, its history and its culture, and whose political stability and security is so dependent on close work and co-operation, should not in principle exclude any applicant country which wishes to join its union. That is an important observation and an important principle to establish.

We want to extend Europe's influence in the world and therefore we want the European Union to grow. We want to extend current European stability and security throughout the continent. Whether the impetus is to safeguard Europe from continental war, to expand trade and develop markets, to build up a third economic force to rival the might of the United States, Japan and the Pacific rim or to extend social benefits and environmental protection to all European citizens, the case for stronger co-operation and integration in an enlarged European Union is overwhelming.

Membership of the Union must depend on each new country's compatibility—membership is neither a foregone conclusion, nor automatic. Given the different stages of economic, political and social development achieved in the Visegrad countries, their membership of the Union will not be gained speedily and smoothly. It will not happen overnight.

The challenge from east Europe is clear to us. Those countries are striving to become successful, stable and socially united market economies. The help that they need to restructure, to gain reassurance as well as security and access to markets can be provided only by the west. In the years to come, therefore, the central task for the European Union will not simply be to forge even closer integration among its existing members. That was the Maastricht agenda. It was an appropriate and relevant agenda, but we have moved on from it as events and changes throughout Europe have overtaken the thinking that underpinned it. We must reach out much further and concentrate increasingly on adapting the workings and institutions of the European Union to meet the needs of a larger and more diverse membership of nations.

That will involve a gradual process of association leading to stronger links, perhaps with the various pillars of the Union. The right hon. Member for Guildford made an apposite observation about that. I see no reason why the Visegrad four should not increasingly become associated with, or linked to, some of the political mechanisms and pillars of the Maastricht Union without necessarily becoming fully drawn into the economics of the Union, and far less becoming full members of it. The right hon. Member's observation about that was extremely important and valid. We want such membership to be gained finally, but it must be organised. The process of change and adaptation will be slow. It must come at a time when it can be afforded—when the costs can be borne by the member countries and, not least, by the European Union.

Whatever path the enlargement follows and whatever applicant countries are involved, some daunting issues, apart from cost, must be faced. I do not discount the need to overhaul radically the common agricultural policy or the complexities posed by the creation of economic and monetary union.

However, without any question, as the Union grows, the biggest issue that will confront us will be the necessary rethink of the ways in which it makes its law, enforces its decisions and regulates its markets. Those issues represent the most daunting challenge to those of us who are committed to the development of the European Union.

We know what is wrong. A lurid picture of those problems was painted by the right hon. Member for Shropshire, North and I do not mind saying that I accept a number of his criticisms, but I do so from a different standpoint. I acknowledge those problems through a desire to overcome them rather than in the hope that they should continue and possibly weaken the European Union.

We know about the strains and shortcomings in Europe's methods of work, the lack of transparency in its decision making, the poverty of national debate and scrutiny of its laws and decisions and the limited accountability of its officials. That democratic and administrative malaise within the Union is seriously undermining it. It is impeding its development, undermining its legitimacy and its public appeal. It is important to address those problems, because they are the cause of a growing public revolt. I do not exaggerate that, and I do not support the course that others would like us to follow in our denunciation, but we have witnessed the emergence of a public revolt against what is perceived to be a remote, out-of-touch and uncontrollable bureaucracy in the European Union. That must be dealt with if, as the Labour party and those of us who are strongly committed to Europe and approach the matter not as Euro-sceptics but as convinced Europeans want, the European Union is to be strengthened, its sense of purpose restored, and Britain's place in it reaffirmed.

Without stronger democratic development, hand in hand with greater economic integration and enlargement of the Union, public acceptance of both that integration and enlargement will be fragile and may even be placed in jeopardy. That is the key lesson to be learnt from the experience of the ratification of the Maastricht treaty and the negotiation of the entry of the four new member states whose accession we are debating tonight.

Important questions must be asked in closing the democratic deficit that has become such an issue in relation to the Union—how European legislation is initiated in the Commission; how the Commission is formed, and who forms and approves it; which decisions are taken and on what basis in the Council of Ministers; what involvement the European Parliament has; what scrutiny national Parliaments undertake; whether an entirely new hierarchy of decision making should be instituted, with heavier procedures attached to the European Union's weightier acts; and, above all, how we shall open all that to greater democratic scrutiny and accountability within our own nations and among our publics at home. Those and other issues need to be seriously addressed and debated as further enlargement is pursued. I do not for a moment describe that as a Euro-sceptic agenda. On the contrary, it is a positive, thinking, pro-European agenda, on which those of us who are convinced Europeans should not for one moment cede to those who are hostile to the whole project.

It has been a recent orthodoxy, at least in the Foreign Office, to regard the intergovernmental conference in 1996 as an essentially limited and unambitious exercise—more a 3,000 mile service than a radical overhaul. I understand the nervousness of those who went through the whole Maastricht experience, whether they were officials, Ministers or those who participated in so many debates. I understand the reluctance of all those concerned to embark on anything that remotely resembles that Maastricht process. None the less, that attitude is wrong.

Even if the outcome is smaller than anticipated, our sights should be lifted and our horizons should be wider than that suggested by a mere 3,000 mile service. Our aims should be to put a lot into 1996, play a constructive part in the IGC, help shape the decisions and, most importantly, loudly proclaim and stand up for the IGC's results rather than gloss over its conclusions or run away from public debate about them. We should not refuse to stand up and give an account of what has been agreed at that conference for fear that public debate may re-open internal party divisions. That has bedevilled our approach to date and it has been very weakening as a result. We must give a lead. That may be hoping for more than the Government can give, hobbled as they are by the terrible internal tensions and divisions within their party, but that positive, creative approach to the IGC is extremely badly needed.

If Britain is to be remotely successful at the IGC, the Government, in their contributions to the debate, whether in Britain or among our European partners on the continent, must stop posing the choice for Europe's future—whether it is enlarged or not—as between a minimalist, free-trade area with weak, shackled institutions and loose-knit intergovernmental working versus a centralised, federalist organisation, robbing its member states of their sovereignty and riding roughshod over their traditions and national Parliaments. Both options are equally unrealistic, irrelevant and undesirable. It is hardly surprising that, given that choice between almost nothing and rampant federalism-centralism, many of our constituents have become a little sceptical. It is a false, wrong-headed and thoroughly misleading choice to put to the British people.

A third option gives a different vision of a larger, more integrated Europe that is wider and deeper in its economic, political and defence integration, but whose institutions and working practices are radically reformed to make it more democratic, more accountable, more responsive, less wasteful and more efficient, with proper devolution of power outwards and downwards from the centre. That is the Europe that we need for the future. We must work for that and, above all, we must argue for it. If the present Government will not do so, the rest of us must.

7.46 pm
Mr. Hugh Dykes (Harrow, East)

I am grateful to be called to speak in this debate, especially following the characteristically thoughtful and profound contribution about Europe's future direction from the hon. Member for Hartlepool (Mr. Mandelson). I hope that I shall not embarrass him or his colleagues if I say that I agreed with a substantial amount of what he said.

I have never considered it a weakness if hon. Members substantially agree across the Floor of the House on European matters. On major votes of principle on European matters and at all the developmental stages since we joined the European Community in 1973, the House has a strong tradition of big, built-in, natural majorities for the next significant stage of development. That may not have applied to specific legislation, in respect of which the whipping system and the Government majority system in whatever form were in play and where the majority was commensurate with the party reflection. But on the big issues of future European development, a great meeting of minds in the House has impinged on public opinion outside.

The European Movement, an all-party European movement of which the hon. Member for Hemsworth (Mr. Enright) is an active member, holds its ordinary meetings in various places throughout the country. The reaction of the audiences, of all political affiliations and none—some people adhere to no party whatever—are encouraging and enthusiastic. Basically, subject to details and differences of opinion on individual items, people are keen on these developments.

It always encourages but depresses us when audiences ask, "Why haven't the politicians told us that before?" People want to know why they have had such a distorted account of the development of the European Community and Union from the press—and particularly from a number of malevolent broadsheet newspapers owned by non-British people who are pursuing a campaign of hatred towards the European Union. I use that strong word deliberately. The campaign is even more stark in the tabloids and it leads to a great deal of scepticism among the public because it creates a vacuum.

I am a keen Conservative and enthusiastic supporter of nearly all the Government's policies but am nevertheless of the view that, tragically, the problem was added to in our European election campaign. As has already been said, this is our first debate on the European accession treaty since the European elections. The Conservative stance in those elections was unnecessarily negative, which was a great shame; ultimately, it sought merely to cover our internal divisions in the parliamentary party. We were so busy campaigning and trying to keep the party together that we ended up simply appeasing some of the more active—and, indeed, geriatric—members of the local associations. One Sunday newspaper found, in a survey that the average age of the most active members in our local Conservative associations was about 62, which is fairly disturbing in its own right.

I do not believe that that scepticism is other than simply the result of a vacuum—unfortunately, as I have said, a distorted account of these developments is given both in the House and in the British press. I do not believe that we are talking about the genuinely sceptical people who want to see a recrudescence of nationalism or a strong nation-statism of one sort or another, whatever the future structures. If we take the youngest generation, it is axiomatic that they are extremely keen and natural Europeans, and want politicians to take the lead.

In the German European elections, even though they were somewhat jolted by the lower-than-ever turnout—and others will remind me of the percentage if it is relevant to the debate—there was literally no difference of any sort in the European policy stance of the major parties. In Britain, that would be regarded as eccentric and bizarre. Basically, if the development of the European Union is a good thing and is in the interests of this country and other member states, there does not have to be a huge difference of opinion.

If a Government succumb to the temptation—and I say this with great sadness—to create official state policy on the basis of appeasing a small number of my reactionary old-fashioned colleagues here who want to put the clock back not 20 or 50 years but to 1850—or probably earlier than that, and probably to before the Reform Act of 1832—rather than constructing a positive and enthusiastic policy in the literal, intrinsic and good interests of this country, they will inevitably get into increasing difficulties. I deeply regret that.

The reality is that, if all Governments and parties go too far down the un-European path, that brings rather sad conclusions to those who seek to perpetrate those policies. We have seen that in the past, and I hope that it will not be repeated in the future because the public are crying out for strong leadership on these matters. That is why I think that there will be a strong welcome among the British people for the accession of these four members if the subsequent referendums in three of them also prove to be positive—despite the fact that there is inevitably a question mark over Norway.

If Norway votes no, membership is not compulsory; it can go away. It does not have to join, but I would be sad if that happened. All the way through the strands of debate and argument in those countries, from the official Government statements to the debates in their own Parliaments, we have seen the enthusiasm for accepting the acquis communautaire. There is no question but that the people in those countries, and particularly their Governments and governing parties, feel that to be so.

I will not prolong the debate unnecessarily by quoting in detail. It just so happens, however, that I have the official negotiating statements made by those Governments recommending membership to their people. I shall quote the statement from a country which had a spectacular referendum result. The British press, by the way, said that the result would be either a no or a tiny yes margin—and look what happened. I did not see much exegesis and interpretation in the British press afterwards: there was no questioning of the sensible Austrian population about why they were so wise as to make this decision. I shall quote from the official Austrian Government's statement from the publication "On the Threshold to a New Europe": the European Union enshrined in the Maastricht Treaty stands for much more than the Single Market. The process of European integration was designed by the political vision of a Europe undivided and prosperous. So far, this work of peaceful cooperation has yielded in European history four decades of what we hope will remain a lasting peace. European integration"— that is what they want officially and that is what they voted for— has also been an answer to hatred, nationalism and genocide—phenomena that we believed to be a thing of the past. There is the answer. There is no question but that some of the young fogies in the Conservative party and elsewhere—there are one or two elsewhere, and I imagine that there are also old fogies in the Labour party—would like to put the clock back as well. There is no question but that, a few years ago, enlargement would have been the original idea for stopping the integration process. But they all accept the acquis communautaire.

I shall quote from the equivalent official statement from Corfu of the Finnish Government: The European Union is a key factor in strengthening the security of our continent. Security grows out of social responsibility, interaction, respect for human life and economic prosperity. In such a Europe there are no economic or social lines of division and all states are able to participate equally in the integration process. Enlargement of the Union promotes the enhancement of stability throughout the continent. Finland supports the Union's economic and political objectives. To move on briefly and quickly, I shall quote from the Swedish press release which was issued in March when the negotiations were concluded: Swedish membership also means enlargement in a number of other crucial areas of cooperation: environmental issues, international efforts to combat crime, narcotics questions and refugee matters. All these areas are examples of problems which can only be solved by means of broad European and international cooperation. Membership is the only option which will enable Sweden to participate in this cooperation. Finally, Norway: once again, the British newspapers have attempted to say that hesitations will turn out to be no votes. I am not sure about that; we will have to wait to see how one interacts with and impinges on the other. I quote from the official statement issued by the Norwegian Government at the same time as the Swedish one: Our national interests are best served if Norway participates fully in the further development of Europe, on an equal footing with our Nordic neighbours and European allies. All the countries of Europe have a great need for close cooperation on employment, economic stability, welfare, social security and environmental issues. Binding cooperation in these areas is especially important for a country with such an open economy as Norway. Can we also get away from the phantasmagoric mythology which has been repeated time and time again by certain foolish people in this country? It is suggested that, for some reason, there is a huge change of opinion among the other existing members—or, indeed, among the four new members, if the other three countries follow Austria's lead in joining the Union soon, which I expect them to do—and that there must be major hesitations and fundamental second thoughts about the development of the Union and a resiling from the Maastricht treaty and the Single European Act. There is no evidence at all that that is so—other than the harsh reality of the recession and the fact that that and mass unemployment produce crude political movements arising in various member states which may have a nationalistic impetus which is stronger than the more traditional and conventional parties in different countries, and other than the vacuum created by the gaps in the traditional enthusiasm for European matters which has always been a feature of the Conservative party and the Conservative Government. That is the solemn and dangerous thing which we in our party and in the whole of this Parliament must accept.

Again, that is illustrated by the idea that suddenly in the campaign it was suggested that there would be different speeds for different member states, and the total misrepresentation of what the Commission is about and what it has been doing. I do not disagree with the assertion by the hon. Member for Hartlepool that we need another searching look at all these matters, particularly because of enlargement. As the Union gets larger, we must have a more tightly drawn up, integrated structure. This is not an irony; it is a reality if we are to make progress to the next stage—the greater use of qualified majority voting. To my mind, that is the quintessence of a democratic mechanism, but it is regarded by some of our colleagues with scorn, derision, contempt and hatred. How can they describe that as being other than totally democratic and for the most part in the deep interests of this country rather than detrimental to it in future?

We see the multi-speed idea suddenly arising. I hope that it will disappear as quickly as it has arisen because of its intrinsic superficiality. Some people use a different phrase—"variable geometry". I shall quote what Mr. Andriessen said several years ago about the matter of variable geometry and what I believe it means to those who are involved, whatever their domestic political party adherence. By the way, that is often much less relevant in the European Councils and discussions than we think here. There is no obsession with someone being a Conservative, a Christian Democrat, a socialist or of the far left. There is a working together with people from all sorts of different political disciplines.

I was struck by what Mr. Andriessen said in April 1991: Creative thinking is now required to define arrangements whereby the Community could offer the benefits of membership, and the accompanying gains for stability, without weakening its drive towards further integration and without subjecting the fragile structures of new market economies to excessive pressure. This could be achieved through affiliate membership, a new concept not provided for by the Community treaties or by the Europe Agreements, and at present not on the agenda of the inter-governmental conference. Affiliate membership would provide membership rights and obligations in some areas, while excluding others, at least for a transitional period. No one is suggesting that notion now, because there is no suggestion of anyone applying for membership on that basis. To be sure, some non-member countries still have association agreements, as they have had for a long, time. Nevertheless, the quotation provides an insight into the thinking of those who assumed that there might be an alternative way of applying for membership, with endless opt-outs and hesitations, and with strident demands for instant second thoughts, should countries wish to press ahead with certain developments in the Union. I hope that that puts the record straight.

The same idea lies behind the discussions that can be heard going on in the newly elected Strasbourg Parliament. No one is having second thoughts on these matters—none that I can detect—although there are inevitable differences about details of policy. That is only natural; we would not expect there to be automatic consensus on all areas of policy. It would be very silly to suppose that there could be.

There are still internal party divisions in the House, although for the moment they may be papered over in the Labour party by a soi-disant unity. It will be intriguing to see how long that lasts. I would expect it to last at least until the next general election. There are some who believe that, if there were ever a Labour Government—which I hope there will not be—the right hon. Member for Bethnal Green and Stepney (Mr. Shore) would act as the leading old fogey in his party in a campaign against greater European integration.

If we go along with such ideas, this country will be in mortal danger of losing its way once again. The national sovereignty of member states is not under attack in any of these plans—if it were, I would not be in favour of them. I have never detected a single instance of loss of sovereignty; those who think that it has been lost are suffering from fantasies of old parliamentary doctrine—ideas that are no longer part of the real world. Sovereign countries can work together in more and more closely integrated structures and with qualified majority voting. That serves only to enhance their intrinsic national sovereignty.

The more axiomatically desirable something is, the less we tend to discuss it. That was certainly true of NATO, which in the cold-war period was axiomatically considered a good idea. Of course there was an external threat, so the parallel is not exact, but because it was regarded as good it was felt that there was no real need to discuss it at length. That is how other member states often regard membership of the EU. They believe that it is axiomatically good for their national strengths and their future prosperity.

Why cannot we come up to date? Why cannot the House of Commons be more mature about these matters and devise a cross-party consensus without the fear of being dull? I am sure that the Minister would agree that we need a properly constructed policy and that we should not worry unduly about a small minority in our party, which should not be allowed to dictate terms and to demand that we agree to more of the items on its agenda: "You gave way to our hesitations over Maastricht. Sorry, but we forgot to mention another 11 items on our agenda."

It would be a most unwelcome development if the Conservative Government acceded to such demands. The Government will gain support if they succeed in recreating our traditional enthusiasm for membership of a growing and enlarged European Union.

8.3 pm

Mr. Giles Radice (Durham, North)

I am glad to follow the hon. Member for Harrow, East (Mr. Dykes), who made a characteristically positive speech about the European Union. He criticised his own party's campaign in the European election. Whatever else may be said about that campaign, it was a resounding failure, in that it produced the Conservatives' worst result this century.

I want to refer later to what the hon. Member for Wolverhampton, South-West (Mr. Budgen) said about widening and deepening, but he claimed that I was one of his tutors on the subject of the EU. If so, he must have been an extremely inattentive student.

I congratulate my hon. Friend the Member for Hartlepool (Mr. Mandelson) on his thoughtful speech about the European Union and its direction. I also intend to take up several of his points.

Like every other hon. Member who has spoken, I welcome the treaty of accession, signed in June of this year in Corfu and admitting Norway, Austria, Finland and Sweden. It is good news that the Austrian referendum gave a resounding yes to entry. I hope that that will prove a good augury for the referendums to be held later this year in Norway, Finland and Sweden.

In some ways, the four former EFTA countries are natural members of the EU. For many years, the Austrian economy has been closely tied to the German. The three Scandinavian countries are prosperous welfare democracies, which will strengthen the EU and which should have little difficulty adapting to membership. They will certainly have little difficulty supporting the social chapter. The hon. Member for Wolverhampton, South-West rightly pointed out that the Government are gaining no allies in that respect. On the contrary, Labour will gain allies when those countries join, as I hope they will.

From a purely economic perspective, the surprising thing is how long it took after Britain had joined the EC for these four EFTA countries to follow suit. The explanation is political. Finland had a special relationship with the former Soviet Union, Austria and Sweden were neutral, and Norway was the Scandinavian country furthest from Brussels and the European centres of power.

It is nevertheless good news that the four are likely to join the EU. As the Foreign Secretary said, Second Reading provides us with a good opportunity to debate the strategic direction of the European Union. Should it, for instance, take in more members? If so, which ones? Should widening take priority over deepening, or do both processes go hand in hand? What does the accession of these countries say about popular support for the Union? What can be done to further that support? Those are all important questions.

I believe that the EU's greatest task is to help to bring lasting stability, prosperity and democracy to the former Soviet bloc countries. That applies especially to the Visegrad four, but it does not exclude other countries such as Slovenia and the Baltic states. This is partly an argument about history and culture. I think it was Lady Thatcher who said that Warsaw, Budapest and Prague are European cities too. Partly, too, it is an argument about our self-interest. We do not want these countries failing on our borders. If they do fail, huge numbers of migrants will come to our countries—hence the self-interest.

There is also the sometimes forgotten fact that the establishment and underwriting of democracy has always been the European Union's underlying purpose. It was never just a free trade area. Had it been, Spain and Portugal could have joined much earlier. The European Union is above all a grouping of democratic countries, and it is primarily to help to provide a lasting basis for democracy that it is so crucial that the EU lay down a positive, clear timetable for the entry of the former communist countries.

As some hon. Members have said, if the task of enlargement to the east is accepted by existing members, there will be some implications. There is the issue of CAP reform. Euro-sceptics sometimes hopefully suggest that widening the EC somehow rules out deepening. That is not the case.

A European Union of 20 or even 25 members will inevitably have to change its operating rules if it is to work effectively. It will have to look at the number of Commissioners and how they are appointed, and at strengthening the presidency to facilitate business. There is already a problem about that. It will have to look at the transparency of the Community institutions, and will have to reappraise the weighting between big and small countries.

My argument with the Government over the Ioannina compromise was not so much the issue as the fact that they chose to raise it at this inappropriate time. Above all, the EU must look at the greater use of majority voting. Anyone who does not see that as a serious issue is not facing the reality of the Union, because a Community of 16, let alone 20 or 25, cannot be run without a great deal more majority voting.

Those will all be vital questions for 1996, but even more important is the need to involve the peoples of Europe in the European Union. I hope that the EFTA countries will show in their referendums that they want to join the Union. The Maastricht referendum in France was narrowly won but the result was uncertain, and two referendums were necessary in Denmark before the Maastricht treaty was supported.

Mr. Dykes

Does the hon. Gentleman agree that there is a big difference between a compulsory referendum under constitutional arrangements and one that is an optional extra designed by a political leader which goes wrong for internal reasons?

Mr. Radice

I am coming to that, and I thank the hon. Gentleman for keeping me on the right track.

In an excellent recent speech on the Union which I advise hon. Members to read, my hon. Friend the Member for Sedgefield (Mr. Blair) rightly said that it cannot be a grand design handed down from on high from Government to the governed, and that Europe must be argued for.[Interruption.] We do not always argue for it. We argued for it on entry, but we do not go on arguing for it. We must continue to argue for it, and when we do things will change.

My hon. Friend the Member for Sedgefield rightly argues not just for an increase in the powers of the European Parliament but for the involvement of national Parliaments in the process. We have failed to do that throughout the Union.

Mr. Spearing

I commented to myself rather than to the House that the argument has been going on for 15 years. Does that not show either that a mistake was made or that there are continuing doubts that have some validity?

Mr. Radice

My hon. Friend has never accepted the result of the first referendum in 1975, so in a sense we are arguing on different levels. I am saying that we must make a case for what is done, that we must argue for the Maastricht treaty.

I was involved in both the French and Danish referendums. The problem was that they were ad hoc referendums, and were related mainly to national events. President Mitterrand decided to have one because he thought that it would strengthen his political position. They were held at different times, and had a knock-on effect. They were fought primarily on national lines and often accentuated party differences.

There is a case for referendums, but they should be Europewide, and should take place simultaneously, on the same day across Europe, rather in the manner of European elections. That might avoid some of the purely domestic political issues that enter the debate.

The hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnson) does not support referendums, but I think that we should look at the idea. Purely Europewide referendums could highlight European aspects of policy and would force politicians to argue for change and involve the people in that change. The problem is that politicians have sometimes not argued the case. The Government certainly did not argue the case for Maastricht, just for its opt-outs. That was hardly an argument for Maastricht, and the people were not involved.

Britain must be involved in all these debates. It cannot be an effective member of the European Union, half in and half out, an occasional country member, an offshore island semi-detached from the continent. We must play a leading part in all the debates ahead. In that context, the triumphalist tone that the Foreign Secretary occasionally allowed to creep into his speech was totally inappropriate to the facts.

Under this Government, Britain is not taken seriously, as it ought to be, in European debates, and the reason is simple. Our partners are uncertain of our intentions and motives, and do not know whether the Government will be blown off course by a band of very determined rather skilful and in some respects quite able Euro-sceptics. The Government must make up their mind. It is about time that they said firmly to their rebels that we can achieve more together in Europe than we can alone, and that Britain will at last begin to play a positive part in the European Union and in the debate about its direction.

8.16 pm
Mr. Ray Whitney (Wycombe)

I join in the warm welcome expressed by nearly all contributors to the debate for the proposal that the four new candidates should accede to the European Union. It is significant that the Governments of those countries have decided to apply, and I hope that their peoples will endorse that decision.

Those applications have been made despite the fact that the past two or three years have been difficult for the Union. We all know the reasons, and they are related not only to the economic recession but to the challenges of Bosnia and other foreign policy difficulties. Despite that, those countries clearly understand the benefits and advantages to their nations of membership of the European Union.

I hope that the decision by those four Governments will send a message to those in this country, some of whom are in the House, who are misguided and muddle-headed about the concept of the European Union and about the advantages and benefits that membership offers this country.

There are two types of misapprehension—I use as kind a word as I can. A small minority cling to the idea that Britain should leave the European Union. There are not many people in that minority, but there are a few, and there are possibly one or two of them in the House. I hope that they will pause for thought and consider that, after such a long time, these four balanced, normal countries which we respect have decided that membership of the Union is in their national interests.

A rather larger minority is much more important, because it is much more difficult and has a damaging political impact. That minority constantly suggests—not often spelt out in concrete terms, but implied—that the answer is a free trade area. Hon. Members and others who hold that view must surely pause to think that those four nations who for years adhered to the European Free Trade Area and then to the European Economic Area have decided that that is not enough, that it is not the way to promote and develop their national interests.

They have decided that the benefits and advantages, together with the challenges and difficulties of European Union membership, will deliver the goods for Austria, Finland, Norway and Sweden. As the majority of hon. Members well understand, what delivers the goods for the people of those nations is what will deliver the goods for the people in this country. That must be the message of the application for accession from those four countries.

Another point that I hope will be taken to heart is that each of those countries has a very strong and distinct national identity; a sense of its own nationhood. It is inconceivable that they would be misguided enough to sign up for some smudgy blur of a centralised united states of Europe. That is not their concept; it is certainly not my concept or that of the great majority of hon. Members on both sides of the Chamber. That, too, is a message that I hope the doubters and the sceptics take home. I hope that they will then finally drop their neuroses, some of which have been expressed in speeches tonight.

I deeply respect the views of the right hon. Member for Bethnal Green and Stepney (Mr. Shore) on many matters. Indeed, I strongly share his views on NATO. However, I do not share his views on Europe.

My hon. Friend the Member for Stafford (Mr. Cash) trotted out the bogeymen. It appears that the right hon. Gentleman and my hon. Friend have discovered that, lurking on the continent of Europe, there are people who are actually in favour of a centralised and united states of Europe. They seem to be terrorised by, and terrified of, that amazing discovery. They should have a little more confidence. I have confidence that we will achieve a union of the European Community that does not surrender to Mr. Bitterlich, who was cited by the right hon. Gentleman as evidence.

The one point on which I differ from the hon. Member for Hartlepool (Mr. Mandelson), who otherwise made a very helpful speech, is his suggestion that there is a third option. I believe there may be 30 or 40 options. That is the excitement and challenge of developing and building the European Union. That challenge faces us all. I wish that the carping and the negativism would now stop, so that, in the months and years ahead, we can all—whatever party we belong to, or if we belong to none—try to work out the shape of the European Union and the British approach to the intergovernmental conference in 1996.

I am usually regarded as an optimist, but it would be optimism of a high order to believe that we could develop a national cross-party consensus towards the IGC. However, there is a broad agreement on the sort of relationship with our European partners that we want to develop. I also believe that the instinct felt by me and many others in this House is shared by many on the continent.

That is the challenge; that is the excitement. I hope that we can hold our debates without negativism and carping, and that we can join our 11 existing and four new partners in constructing a European Union that can get over the difficulties and meet the challenges from the rest of the word that we must surely face.

8.24 pm
Mr. Nigel Spearing (Newham, South)

I agree with the hon. Member for Wycombe (Mr. Whitney) about facing the challenges in the world. However, I am not sure that the encomiums of the treaty and the assumptions behind competing economic blocs meet that case. If there is to be a new world order and community in which tensions and economic competition do not develop into armed conflict, as they have in the past, we must do something better than the treaty before us.

Despite the depleted numbers in the Chamber at this stage of the debate, I sense that a new tone has been struck. There is an unusual axis between Hartlepool and Shropshire. Indeed, branches of that axis may even extend as far as Harrow. I join those who have extolled some of the thoughts behind the speech of my hon. Friend the Member for Hartlepool (Mr. Mandelson). I do not think that he and I will agree, but I hope that the House agrees that some of my thoughts on enlargement are at least worthy of consideration.

The half-agreement that, uncharacteristically, appears to have broken out across the House between what are sometimes called in the press the well-known suspects at either extreme of the argument is due to the fact that those hon. Members have the ability objectively to analyse the observable facts. Even if they disagree on the direction from which we have come or should go, at least they can analyse the facts objectively.

I want to deal largely with the Nordic states. Austria, for obvious cultural, linguistic and historical reasons, is rather separate. I have not listened to every speech tonight, but I do not think that anyone has mentioned the existence of the Nordic Union. It is an existing, genuine, international organisation that has not been paid the attention that it is due. How many countries would give up the idea of a national airline? Scandinavian Air Services is an example of that.

Iceland is a member of the Nordic Union, but is not joining the EU. There has been the north Atlantic extension of Denmark into the Faroes. The Scandinavian countries look to the Baltic countries, with which their historic links are great. They have long-standing trade and cultural agreements. If they join the Union, there will be a greater and more rigid frontier between our friends in Scandinavia and our friends in the Baltic. That would not necessarily be wise.

Again, objective observation shows that all those countries have had a specific and important history which will not sit well with the way in which the treaties are currently operated. Sweden is a former imperial power whose upper House of Parliament of landowners voted itself out of existence in the early 19th century. It did not even remain an advisory body. Norway became a new nation only this century, having been part of a greater union—"union" having been a dirty word in Norway. Should it virtually give up being essentially its own state in the same century in which it achieved independence?

Mr. Denis MacShane (Rotherham)

Norway might have become an independent state only at the beginning of this century, but it was always a proud and independent nation. There is a difference.

Mr. Spearing

Indeed some of our hon. Friends may make the same comment about our northern member of the United Kingdom. My hon. Friend will probably have the facts at his fingertips later. The political fact that I emphasise was probably correct.

Denmark—a remarkable nation—has commonality with the others but is distinct. There is the old joke about the Schleswig-Holstein question, but it is no joke in Denmark—a country about the size of a Land in Germany that, through collective effort, produced an enormous social and agricultural revolution 100 years ago, largely through co-operative enterprise, not competition, that transformed that country's landscape.

When I spoke to Danish officials on a visit by Select Committee members not long ago, they had to admit that, in acceding to the European single agricultural policy and its development, they are risking the development of Denmark's own agricultural industry, created over the centuries. Finland has every reason to be suspicious, because it has knowledge of large economic and political blocs on its frontier.

I reinforce the point made by the hon. Member for Wycombe, that each of those countries has a distinctive reason for the best sort of nationalism. The problem for some of us on this side of the House is that some of those with whom we occasionally have constitutional quarrels are not as keen on the best sort of nationalism. Unfortunately, no word in the English language expresses what is legitimate in being proud of one's community, in the sense that one is proud of one's own town. Nationalism has a nasty ring about it, for obvious reasons. There is a word gap that colours our own thinking.

Each of those countries, particularly because of their rigorous national environment, has developed over the past thousand years its own form of community life. Forest, lake, water and sea have meant that those countries and their communities of relatively small towns, villages and scattered settlements have produced public enterprise, public ownership, forms of public support and taxation that have grown through the centuries and are now extremely strong. There is a democratic collectivism, market management and support of public markets to an extent, perhaps, that is not found elsewhere in mainland Europe.

The impact on those qualities not only of the single market but of bankers at present is of concern in all those countries. Bankers in this country have a status rather greater than they deserve. I understand from Scandinavian friends that bankers in most Scandinavian countries do not have a high reputation at present.

In toto, the grain of political and social life of the Nordic applicants is, in fundamentals, contrary to a great deal of the fundamentals found within the treaties. There is much talk these days about "our vision for Europe." Anyone who wants to get off the hook talks about "our vision for Europe", "my vision for Europe" or "my party's vision for Europe". There is no question of vision—it is there in the treaties. One cannot get away from them, and they are decided in black and white.

The comment was made that my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) and others of us on this side of the House are backward. Fifty years ago, we in London knew what was going on, with the flying bombs, V Is and V2s. Members of my generation were determined that, as a result of that war, we would see something different. That is why many of us are pro-United Nations, pro-international and pro-Commonwealth. Until the altercation of the past 20 years, we would have been called pro-European.

The trouble is that these days, European does not mean the totality of Europe or co-operating nations. It means pro-treaty, which is very different. I put it to people in this country that to achieve the sort of Europe that my generation wanted after the war, we have—to use a British Rail phrase—the wrong sort of treaty. That is growing clearer even to some people who were the most vociferous supporters of Britain entering the Common Market in 1972. I fear that it will become clearer and clearer to the citizens of the applicant states as time goes by.

That is not clear to the Government. Today, the Foreign Secretary claimed that centralism had been checked. I agree with hon. Members in all parts of the House who say that that is not correct. Having signed a treaty that accelerates centralism, the Government claim that it has been checked. They say that the federalists are on the retreat. There is a lack of knowledge in the House as to the difference between a federal constitution and a confederal constitution—the worst civil war in the English-speaking world was over the distinction between the two, and a unitary constitution.

The treaties are neither confederal nor federal, but are unitary, because of the unitary nature of the European Parliament, Council, Court and Commission. Above all, there is no separation of powers. Arguments about subsidiarity, on which I shall not enlarge now, show that all too well. The mud, fluff, seminars and conferences about subsidiarity show that there is no proper division of powers, which is the hallmark of a genuine confederation or federation.

I share the concerns expressed by my hon. Friend the Member for Hartlepool. I am glad to know that he is worried about the quality of scrutiny—and scrutiny does not mean control but only ability to see. That is not awfully easy, either. The Select Committee on European Legislation is in constant correspondence with Ministers about the inability even of that Committee to see certain documents—and the House does things rather better than many Parliaments in the Community.

The Swedes have a strong and democratic procedure called the remiss, which is like an extended Green Paper. Before any law or change at almost any level in any organisation can be enacted, having been suggested by a committee or party leader, it must go all the way down to the lowest democratic level, and then comes back again. Only at that stage is the equivalent of a Bill printed.

The Swedes will have a bad shock when it comes to the EEC. I have continual fears for the quality of democracy in such countries, which so many of us admire. When I intervened in the speech of the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston), who is not in his place now, he did not have an answer. I asked whether accession to the treaties would tend at least to diminish the quality of democracy in the applicant countries—and certainly their satisfaction with and confidence in their own Parliaments.

We all know how much the Nordic states have contributed to world understanding. We can all think of names from recent history—Bernadotte, Trigve Lie, Dag Hammarskjold, Olav Palme and now Mrs. Brundtland. One thinks also of Brandt: although that distinguished gentleman was from Germany, he had Scandinavian connections. The commission to which he gave his name and which is continued in some respects by Mrs. Brundtland is indicative of that. We know of the part that those nations have played in humanitarian enterprises throughout the world—in the United Nations. A common foreign and security policy? Are they signing up to that.

"Oh," say some of my hon. Friends and other people, "we could do so much more together." That is the sort of trite phrase that we hear so often. Of course we can, if we are united and if we believe in the cement of free co-operation, and not in coercion through constant negotiation, which is the hallmark of the European Community.

Unfortunately, we have some examples before us. We all know that the tragedy of Croatia was partly due to a hurried, and perhaps ill-considered, recognition by the European Union—it was nearly a union by that time— brought about by political forces that we understand. How many organisations do we know of that cannot move because of internal politics?

The middle east is another great problem that has exercised the House for years. Did the European Union greatly accelerate the middle east problem to its solution? No. Norway greatly accelerated that process. Would it have been in a position to do so if it had been a member of the European Community from 1972? The thesis cannot be proved, but in all probability it would not.

The common currency is liable to undermine the ability of those fine communities in Scandinavia to operate their form of constitution and democracy, and may well undermine their way of life in the fields, forests, fjords and veldts. The enlightened analysis that is beginning to appear in this House ought to be available to the people of those fine nations before they decide in their referendums.

8.41 pm
Mr. Roger Knapman (Stroud)

As Front-Bench spokesmen are inclined to say, I think that we have had a good debate. We heard my right hon. Friend the Foreign Secretary saying that he is winning his arguments in Europe—I am not sure whether he also said, "again". We also heard my right hon. Friend the Member for Shropshire, North (Mr. Biffen) saying that we are all speaking as sceptics.

That made me very happy, until I read some parts of the treaty. Even in the preamble we find that the signatories are DETERMINED in the spirit of those Treaties to continue the process of creating an ever closer union among the peoples of Europe on the foundations already laid". So, although I am grateful to learn that my right hon. Friends are in good heart, I wish that some of that could be conveyed to the treaty's draftsmen.

I am sorry that the treaty is not a fraction more contentious. Then some of us could have the uplifting, not to say novel, experience of wandering through the same Lobby as many of our colleagues when voting on European business.

The Bill is merely one page and seems reasonably uncontentious, but, for those who care to read it, it is based on a 389-page treaty, in which there is quite a lot of meat.

Many people say that, at the time, the Single European Act was thought merely to be an Act to enable the completion of the single market. The real relevance of qualified majority voting was perhaps realised only at a later stage. In other words, there was a sting in the tail, and I wonder whether this single page Bill has a sting in its tail, such as qualified majority voting.

I tend to view all such matters according to a speech that Disraeli once made when he advised all Conservative Governments to maintain the constitution, to uplift and uphold the conditions of the people and adequately to defend the country. I shall skip the part about adequately defending the country, on the basis that Mr. Deputy Speaker might rule me out of order and it might tempt the Whip on duty to reach for his pencil. As regards the advice to uphold the conditions of the people, the billions of pounds paid to cohesion funds, to build roads across Spanish deserts or Italian ravines, might better be spent on the national health service, education or even on reducing the public sector borrowing requirement.

On the question of maintaining the constitution, may I offer one example—article 44, which, in the main, is gobbledegook. It begins: The share of Community fishing opportunities for stocks which are regulated by a catch limit, to be allocated to Norway, shall be fixed as follows, by species and by zone". Many pages of zones and references follow and there are 20 explanatory notes at the bottom of the page. Having thought about the article at the weekend—not fully understanding how one can have a percentage of 88,543(13)(19), but never mind that—Norway seems to have got a very favourable deal. I am not sure, as a result, what right the British fishing industry—assuming that we still have one—will have to fish in Norwegian waters.

Can my hon. Friend the Minister tell me whether, if British fishing companies purchase Norwegian companies after article 35 has expired three years from the date of accession, they can bypass article 44, having regard to the judgment in the Factortame case? I think that my hon. Friend would refer me to annexes 11 and 12, but there is a problem because if my hon. Friend tells me that the Norwegians have found a way and have a derogation to get round the Factortame case, may we please have one for our fishing industry? Equally, if the Norwegians have not found a way around the Factortame case, surely we ought to let the Norwegian public know about that before they vote in the forthcoming referendum.

A number of constitutional issues are involved, but in view of the time I shall not dwell on any more. Another issue worries me, however. There is no money resolution attached to the Bill. I wonder why the business managers of the House have not found such a resolution necessary. I wonder whether they do the House a disservice by not providing one. How can we know that no money resolution is necessary? If money is required for new purposes, surely the treaty would be void unless we have a money resolution, according to the rules of this House.

I take as my text a House of Commons Library research paper. I shall not read it but intend to make extensive use of the notes. It states that Spending covered by headings 3 to 6 of the financial perspective was not touched on in the enlargement negotiations. A new financial perspective setting out the spending projections and own resource ceilings for the years ahead has not yet been agreed. Adjusting the ceilings for the different headings of the budget is likely to generate much debate. For example, it is not clear what increase, if any, there should be in the administrative budget. Potentially, new money might be required for new members. Yet the explanatory memorandum to the Bill states: The Bill, however, will have no direct financial consequences in the UK. I wonder if that is so.

How will our contribution be judged? In terms of increased gross national product, the inclusion of the four EFTA states represents an increase of about 8 per cent., whereas in terms of the number of countries, their inclusion will represent an increase of 33 per cent. The Library brief continues: It is unknown which of these increases, if either, will be used as the basis to justify an increase in administrative spending…the UK has a clear interest in restricting any increase in spending on external action since it is outside the Fontainebleu…system. If that is the case, I wonder whether we can rely on the statement in the explanatory memorandum that The Bill, however, will have no direct financial consequences. The emphasis seems to me to be on the word "direct". I am reasonably happy about the Bill—certainly happier than I have been about any previous European legislation—because it deals primarily with the question of accession. Some of us believe that, in general, widening is good—notwithstanding what was said by my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen)—while deepening, if we ever establish what it is, is not.

I would vote for the treaty, on the assumption that it is mainly about enlargement. According to the 398 pages of the treaty, however, under revised qualified majority voting we are ensuring more power for the centre and the substitution of bureaucracy for democracy. I am prepared to vote for the treaty because my right hon. Friend the Prime Minister secured what I hope will prove an immensely valuable—indeed, epoch-making—triumph at Corfu, and therefore deserves our support.

During the forthcoming weeks and months, of course, many of us will wish to judge both my right hon. Friend and the Foreign Office on whether all the business in Corfu is purely temporary rhetoric—given treaties such as this, devoted to ever-closer union, we must have some misgivings about it—or whether Corfu signals a real determination to stand up for British interests. Along with most of the men and women on the street, in the pub and in the shops, I fervently hope that the latter is the case.

8.51 pm
Mr. Denis MacShane (Rotherham)

Like others who have spoken, I welcome the accession of the new member states: two republics and two kingdoms with republican tinges will add to the democratic orientation of Europe.

The problem of neo-fascism is now raising its head. I was disappointed at the way in which the Foreign Secretary gave the brush-off to widespread concern in Europe about the entry into the Italian Government of supporters of neo-fascism—open supporters of Mussolini and anti-semitism. It is clear that we must have diplomatic relations with the Italian Government, but Opposition Members are dismayed that the Foreign Secretary will not join those in other European countries in expressing at least some concern about those developments.

We look forward to the arrival of Nordic and Austrian Members of the European Parliament and their quota of officials in Brussels. They will get something of a shock, of course, when they discover the immense secrecy which surrounds the Council of Ministers. I do not know how many hon. Members are aware that every Swedish citizen has the right to see every letter to, and from, the Swedish Prime Minister's office; I cannot imagine No. 10 Downing street wanting Lord Archer's billets-doux spread all over the newspapers, but I commend that policy of freedom of information to my hon. and good Friend the Member for Sedgefield (Mr. Blair), whose occupancy will begin in a year or two.

I salute the struggle undertaken by the Financial Times and The Guardian to obtain details of the voting of the Council of Ministers—the release of which was blocked by our own Government, with others. I hope that the arrival of new Ministers from the four acceding states will help to dampen that British disease of secrecy and to shape a more democratic and open Europe.

As a materialist, I am grateful for the fact that—as the explanatory memorandum of the Bill makes clear—there will be no cost to our country. According to the latest Eurostat figures, Britain has for the first time moved into the bottom half of the league table of economic wealth in the European Union, expressed in terms of per capita gross domestic product; we are below the average for the 12 European member states, and we shall be even further into the second division—along with Greece, Portugal and Spain—when Sweden, Austria and Norway join the Union.

Perhaps the Spanish question had something to do with the fact that the Chief Secretary to the Treasury, the right hon. Member for Enfield, Southgate (Mr. Portillo), went to Spain recently—or rather not to Spain, but to Catalonia: we are being very particular about nations tonight—where he made a speech in which he criticised the values of the European Union as expressed by most of its member states. He was kind enough to send me a copy of that speech in the original Spanish, and it was most illuminating. Nowhere in it are the words "European Union" or "European Community" to be found; the vision of Europe—the only term used in the speech—expressed by the Government through the Chief Secretary in Barcelona was a vision of a simple free trade area, with no barriers to the exchange of goods and services.

We all know that the Chief Secretary has a major vision of the future—or perhaps I should say a post-Major vision—in which the values and necessities that have led the acceding countries to join the European Union are not considered. I await with interest his thematic speech on national sovereignty, in which he must distance himself still further from the Government's position on Europe if he is to be true to the course on which he has embarked.

I do not know whether the Chief Secretary went to see a bull fight during his stay in Barcelona, but I am assured by my many Spanish friends that Britain will be a truly European country only when bull fights are allowed in Hyde park. I am sure that no House of Commons of which I would wish to be a member would permit such a thing; for the humble Spanish business man who wants to export his sport to Britain, however, to ban bull fighting is to interfere with his right to trade.

I have no problems with British sovereignty when it comes to banning bull fighting, but I understand that British farmers are not happy with the sovereignty of the German Parliament when it comes to banning British beef. I also understand that British airline companies were not happy when the French sovereign Parliament and Government wanted to ban flights to Orly, and that British ferry operators are not happy about the Spanish Government's current refusal to run a service between Spain and north Africa. Certainly, steel workers in my constituency of Rotherham are not happy about the sovereign Parliament-backed decision of the Italian Government to maintain subsidies for steel plants in Italy, thus damaging the competitive market that steel producers rightly demand in Europe.

I remain a great believer in the sovereignty of free peoples and nations in deciding their destiny, and their right to join like-minded nations in common projects—NATO, the Nordic Union mentioned by my hon. Friend the Member for Newham, South (Mr. Spearing) or, indeed, the European Union itself. Conservative Euro-sceptics, however, should be careful before making the Chief Secretary to the Treasury their standard bearer. He is not at all interested in the sovereignty of the British people in Parliament; he is interested only in the sovereignty of the global capitalist market. If every last British citizen were employed by a foreign firm, if every economic decision affecting the United Kingdom were taken in the United States of America or Japan, if English land were sold to stage Spanish bull fights at a profit, the Chief Secretary to the Treasury would not care because for him neither the nation nor its citizens count for aught against his beloved global market.

The Chief Secretary's position is coherent. It involves the new totalitarianism of the market, in which all human values are replaced by money values. His argument is not about British sovereignty or protecting the nations that make up the United Kingdom, a subject on which many Conservative Members spoke so eloquently during debates on the Maastricht treaty and today.

How can such sovereignty be protected? I turn to the question posed by my hon. Friend the Member for Newham, South and that faced by the proud Nordic nations. They have decided that their sovereignty can best be enhanced through co-operation with the other nations of Europe. Austria, which more than any other state in 20th century Europe knows what it means to lose her sovereignty, has decided both through parliamentary debate and through a referendum that the best protection for Austrian values and prosperity lies in full partnership with the rest of Europe.

Unlike the British people, countries such as Austria and Finland have experienced the full raging of communist, capitalist and fascist totalitarianism in the 20th century. The new intolerance of the uncontrolled, unaccountable and unregulated market is in full flow across the world. Day by day, unemployment lines grow, civil wars break out and our streets are less safe to walk in. That shows the new totalitarianism of money power over human and democratic values.

Mr. Oliver Heald (Hertfordshire, North)

Will the hon. Gentleman explain in his analysis why the least regulated markets throughout the world have the highest level of employment? One has only to consider countries such as the United States of America or those in the far east to realise that.

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse)

Order. I think that hon. Members should return to the subject of Europe.

Mr. MacShane

I shall return to that subject and cite Switzerland, where I worked for many years, which has maintained full employment and which is the most regulated country in Europe. As they say in Switzerland, if it is not forbidden, it is compulsory.

The new European Union must succeed in defeating the new totalitarianism of money power if we are to create a world that is both economically efficient and spiritually and socially rewarding. I welcome the accession of the four new members to the European Union because they will strengthen the human and democratic values of Europe. While working with the grain of the market, they will not blindly worship Mammon, the God of the new, all-powerful market totalitarians.

9.1 pm

Mr. David Lidington (Aylesbury)

I am grateful for the opportunity to make a speech in what has been a fairly wide-ranging debate. I hope that the hon. Member for Rotherham (Mr. MacShane) will forgive me if I do not follow his interesting but idiosyncratic analysis of the way in which European and modern world economies are developing.

I gladly welcome the likely accession to the European Union of Austria, Sweden, Norway and Finland for the reasons given by hon. Members, from whichever party—those countries' European cultural and democratic traditions and their participation in the economic and security structures that have developed in our continent since the last war. The Bill and the treaty are at best no more than an interim measure, a halfway house towards the new constitutional structure that we shall need in a wider and more diverse European Union and that we are perhaps midway to creating.

The hon. Member for Durham, North (Mr. Radice) alluded to some of the decision-making difficulties that were bound to arise with the widening of the European Community. The hon. Member for Rotherham said that he welcomed the fact that there would be new Members of the European Parliament from new member states and that new quotas of officials from Scandinavian countries and Austria would be arriving at their Brussels offices for the first time. A considerable proportion of those officials will be made up of the numerous translators who will be needed to cope with the additions to the list of official working languages that will be used in the European Community. Commissioners from the new member states will be appointed to a college of Commissioners which, even after the reforms introduced under the Maastricht treaty, is struggling pretty hard to find a worthwhile job for each member of the college.

Most important is the fact that, with the enlargement of the Community—with the four potential new members now, with the likely accession of the four Visegrad countries in the next five or 10 years and with the possible inclusion of other new member states in southern and eastern Europe thereafter—there will be a real problem over the decision-making process within the European Union. We saw that point illustrated in the debates—the Council of Ministers had to arrive at an acceptable formula for qualified majority voting. The hon. Member for Durham, North mentioned the problem of trying to strike the right balance between the right of small member states to be properly represented when the Community makes decisions and the right of the large nations, representing the largest share of the population of the Community, to have their influence fairly expressed.

In a Union in which unanimity will still be required for many important decisions, it will become increasingly difficult to take effective decisions and to manage business if we stick to the present allocation of competences as laid down by the existing treaties and to the present system for voting within the Council of Ministers. In the future, it will be easy for one small state to block the decision of, perhaps, the 19 or 24 other member states that form the majority. We have seen that difficulty arising already over, for example, the Greek blockade of Macedonia in defiance of the express wishes of the other member states of the Union. There is a risk that we shall end up either with a Community that is incapable of taking any decisions or with a Community whose policies are determined by the lowest common denominator of what might be agreed.

The constitutional problem could be tackled in various ways. One coherent, logical approach is the federal approach. Although I do not agree with the arguments put forward by Commissioner Delors, one must accept that his proposals amount to a logical, carefully thought-out solution to the constitutional difficulties that are inevitable in a larger, wider European Union. Nor do I think that we should see the federal model as being the Delors model only. Chancellor Kohl is a man who, as a university student, helped to tear down the border posts between France and Germany. He is a man who, throughout his career, has been openly committed to some sort of united states of Europe. His may be a much more decentralised model than that coming from Mr. Delors, who springs from the French political tradition. The Chancellor would probably wish to see a European Union that amounted to the Federal Republic of Germany writ large on the continental scale—a very decentralised political structure, but a uniform political structure with the same political responsibilities being allocated to each member state and a common core of decision-making powers being held at the centre.

Such a federal Europe might be, in the words of the hon. Member for Hartlepool (Mr. Mandelson), a more democratic Europe, but it would be democratic only in the sense that there would be a right on the part of the majority of elected representatives across the continent to outvote the minority even if that minority included an almost unanimous expression of national opinion in one or two dissenting countries. Therein lies the trouble with the federal approach.

It is my firm belief that, although in some continental countries, especially among the political leaders of those nations, there is still strong support for the federal approach to Europe, the referendums in France and Denmark and the discontent in Germany at the prospect of losing the deutschmark show growing disquiet on the continent, and not solely in this country, about where that approach to the political future of Europe may lead. I do not believe that people here see themselves as Europeans first. They see themselves as British people first and their allegiance is to the affection for, and loyalty to, the nation. Perhaps, after that, their allegiance is to the common cultural and political traditions that we share with other nations on the continent of Europe.

British interests would be best served by a simpler, looser political structure of the European Union in the future. That cannot simply be a free-trade area. Anyone who holds to that belief needs only to pick up a history book to see that no British ruler or British Government over many centuries doubted that British interests involved seeking to influence the outlook and the policy of the major powers of the continent of Europe. Even if, as the hon. Member for Newham, South (Mr. Spearing) said, we have the wrong treaty at the moment, it is for that reason that it is the duty of any patriotic British Government who seek to act in the best interests of their citizens to engage with the political and constitutional structures that exist on the continent of Europe and to seek to advance our interests, negotiation by negotiation, treaty by treaty, as my right hon. Friend the Foreign Secretary and his ministerial team are doing.

Sir Russell Johnston

I am interested in the hon. Gentleman's argument, but the weakness of it is that he equates patriotic British interest with Conservative attitudes. He says that they are the same and they are not the same. Not only hon. Members on the Liberal Democrats' Bench but, obviously, those on the official Opposition Benches interpret interest in a very different way.

Mr. Lidington

I have far too great a respect for the hon. Gentleman to seek in any way to impugn his wish or that of other Opposition Members to advance the British interests as they see them, but we would differ on how to identify those interests over particular political decisions.

I shall move on to how I see those arguments relating to the agenda which faces the Government as they approach the next IGC in 1996 or, perhaps, in 1997. The looser-knit European political structure—the simpler European Union, which would be in our best interests—will probably be beyond our capacity to achieve precisely because in many of our partner nations the wish to drive towards a much closer political union on the model envisaged by the founding fathers of the Community remains so strong. I honestly doubt whether public opinion in those countries, even in France and Germany, will catch up with that view of the political elite in time to influence the IGC wholly in the direction that we wish to go. The idea of a multi-speed Europe, which was advocated by my right hon. Friend the Prime Minister during the recent European election campaign, provides us with a way forward which may accommodate different views about how Europe should develop.

My hon. Friend the Member for Harrow, East (Mr. Dykes)—I am sorry that he is not in the Chamber at present—is utterly wrong in believing that the approach of my right hon. Friend the Prime Minister to Europe has failed to chime with the instincts of the British people. I am not aware of the feeling in Harrow, but in my constituency many people, Conservative supporters and others with no strong political affiliation, have told me that my right hon. Friend's approach is the way in which we should seek to establish the future of the European Union.

Do we describe that approach as multi-speed Europe, variable geometry, made-to-measure Europe or, as one journalist has described it, a Europe of consenting adults? Those terms offer only a choice of labels. The key is that the constitutional arrangements for Europe should be tailored to take account of the diversity of the Community that we are creating. That way forward will enable us to reconcile the need to develop European unity to ensure material prosperity in future and to ensure that we maintain the peace that has prevailed in the western half of the continent since 1945, thereby checking the destructive nationalism that has brought European civilisation to the brink of ruin twice this century.

At the same time, I believe that the approach of my right hon. Friend the Prime Minister to Europe will enable us to deal with the reality of diverse national histories and national interests, along with the fact that most people's affection and loyalty lie first with the nation state and not with the supranational administration. It would be foolish indeed if we ceded the patriotic themes to the representatives of atavistic nationalism. I fear that that would happen if the European Union again started to take the federalist, centralist route and tried to place a straitjacket on the diverse ways of a Community that wears a costume originally devised for a Community of six in the 1950s.

As we approach the intergovernmental conference, I am not as pessimistic as my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen). I always enjoy my hon. Friend's speeches but I felt that this evening he sounded rather like the Tory grandees of the early 1980s, who used to say that we could not dare to tackle trade union powers, old boy, and that the climate of the times was against us. Such sentiments were usually broached shortly before a grandee was elevated suddenly to another place. I would not like my hon. Friend to get measured for his ermine immediately.

When I talk to German politicians—especially those of a younger generation—I find that they want to discuss how to limit the accretion of competence to supranational level. They are well aware that the accession of Poland and other central European countries to the Union will break the common agricultural policy. They understand that that will have to be faced because the accession of central European countries is recognised as a critical matter of German national interest. Even French politicians are talking about variable geometry.

As we British politicians approach 1996 we must outline a robust agenda for constitutional change in Europe. We need to question the extent of the acquis communautaire. We must ask which competences we should consider repatriating to national level. We should raise in debate matters such as the Commission's sole right of initiative, the powers of the presidency and the balance of interest between the larger and smaller nations.

Although we have not yet won the debate, the time for ideas to prevail in the end is now more propitious than at any stage during the past two decades. I believe that the Europe of which my right hon. Friend the Prime Minister speaks is one that not merely is in Britain's best interests but offers prosperity and peace for the continent as a whole.

9.19 pm
Ms Joyce Quin (Gateshead, East)

Despite differences of view on many aspects of the European Union, today in the House there has been virtually unanimous agreement about, and support for, enlargement. The accession of Austria, Finland, Norway and Sweden has been welcomed by hon. Members on both sides of the House. I hope that people in those four countries will be encouraged, when they read accounts of this debate, by the solid support for their accession to the European Union which has been expressed in the House.

This wide-ranging debate contained many interesting contributions about the future development of the European Union after enlargement. My hon. Friend the Member for Hartlepool (Mr. Mandelson) referred to some of the habitués of these debates about Europe. Despite some new contributions, there was a sense of continuity about the debate, in particular in relation to those who took part in it.

Before coming to the Chamber today, I read through the reports of the proceedings on the Single European Act. Many of the hon. Members who spoke today or who made interventions also took part in the debate on the Single European Act, including my hon. Friend the Member for Newham, South (Mr. Spearing) and the right hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston).

Conservative Members who participated in the debates on that crypto-federalist measure, the Single European Act, and who spoke today included the hon. Members for Wolverhampton, South-West (Mr. Budgen) and for Harrow, East (Mr. Dykes). We have heard today interventions from the hon. Members for Southend, East (Sir T. Taylor), for Northampton, North (Mr. Marlow) and for Stafford (Mr. Cash), who took part in the earlier debate, and I was intrigued to read that the hon. Member for Stafford said: We tend to exaggerate the dangers of majority voting."—[Official Report, 23 April 1986; Vol. 96, c. 378.]

Mr. Cash

And I will repeat those remarks today. However, I also tabled an amendment to the effect that nothing in that legislation should derogate from the sovereignty of the United Kingdom Parliament. I am glad to say that that amendment was signed by one other Member of this place, and that was the former right hon. Member for Wolverhampton, South-West, Mr. Enoch Powell.

Ms Quin

There is at least continuity in respect of the views of Members for Wolverhampton, South-West.

Even the Minister of State, Foreign and Commonwealth Office, the hon. Member for Wells (Mr. HeathcoatAmory), who is to reply to the debate, surfaced briefly in the Committee stage of the measure. Rather to my surprise, he supported an amendment in the name of his hon. Friend the Member for Southend, East. Perhaps the Minister had fallen prey to a bout of Euroscepticism at the time. Towering over that debate, as he admitted himself today, was the right hon. Member for Shropshire, North (Mr. Biffen). He referred today rather graphically to his stained hands in relation to the former debates.

I am glad that there has been a wide welcome for enlargement of the European Union. I hope that we all want the Bill to receive a speedy passage through the House. It has been allocated two days for debate about which many people are happy. None the less, at the end of that time, we hope that there will be a ringing endorsement of enlargement. Labour will not support amendments which seek to delay or place obstacles before enlargement.

Hon. Members on both sides of the House have paid tribute to the four applicant countries. I echo those tributes, particularly the tributes to their fine democratic and social democratic traditions. I want to refer to the outstanding role that the four countries have played in foreign policy, particularly through the United Nations, where their activities have probably not been equalled by other countries. I pay tribute to the Norwegian Labour Prime Minister, Gro Harlem Brundtland, for the work she has done to highlight and draw attention to the issues of environment and development on a world scale.

My hon. Friends spoke in particular about the strong links between the Labour party and its counterparts in the four applicant countries and the similar views we hold on social, environmental, economic, regional and industrial issues. The hon. Member for Wolverhampton, South-West stressed the links between the Labour party and the traditions and beliefs of those four countries. He felt that that meant that a natural alliance would be established between the Labour party and those countries in the Union in future. The Opposition welcome their commitment to the social chapter, although it is not surprising to us given their record on social issues.

I am sure that those countries will be warmly welcomed in the European Union. As many hon. Members have already pointed out, however, referendums need to be held in the three Scandinavian countries, where public opinion has varied from semi-enthusiasm to hostility. I hope that it will be persuaded of the merits of accession when the referendums take place in the autumn. It is encouraging that the terms of the accession treaty have been accepted in those four countries, so there is no outstanding difficulty about those terms. That augurs well for the future.

Many hon. Members who referred to enlargement talked about widening and deepening Europe—my hon. Friends the Members for Hartlepool and for Durham, North (Mr. Radice) stressed that. Some Conservative Members expressed the hope that widening the European Union would dilute it and that we would move towards establishing a free trade area. That is wishful thinking, and I am glad that some Conservative Members explicitly recognised that. The hon. Member for Harrow, East described it as phantasmagoric mythology.

I do not believe that the applicant countries would have applied to join the European Union if they had thought it was simply a free trade area. They are, after all, already members of the European economic area, and if they were completely satisfied with that arrangement it is unlikely that they would have applied for and been granted full membership of the Union.

Many hon. Members spoke about the effects of enlargement on the institutional arrangements in the European Union. We all agreed that we hoped that it would strengthen the democratic element in the Union. Hon. Members disagreed, however, on various aspects—for example, the extent of the Government's achievements, if they can be described as such, at Ioannina were disputed.

The Foreign Secretary said, once again, that we had won a review of the qualified majority voting system, but that was always the case, because it was mentioned in previous presidency conclusions that it would be possible to raise anything related to the institutional workings of the union at the 1996 intergovernmental conference. It was always on the agenda and a wide-ranging statement, a catch-all clause, in previous presidency conclusions made that absolutely clear.

Mr. Hurd

Let us be clear about this: what was possible, as the hon. Lady correctly said, is now certain.

Ms Quin

It was certain before, because a wide-ranging clause allowed countries to raise anything they wanted. Between now and 1996 other issues may crop up that Governments may want to raise and they will be able to do so because of the wide-ranging provision that already exists. We must bear that in mind.

There was a large measure of agreement in the House about making the decisions of the European Union subject to democratic scrutiny. Many of us who took part in the debate on enlargement in European Standing Committee B felt that it should have reached a wider audience and should have been part of a debate on the Floor of the House. Perhaps I could appeal to the media not to ignore the work of the European Standing Committees. Valuable work is done there by Members on both sides but, unfortunately, little attention is paid to their work.

The Commission's role in an enlarged European Union was also mentioned by hon. Members on both sides of the House, although who will preside over that Commission is still uncertain. Having vetoed a European Conservative, the Government seem to be prepared, according to one rumour, to rush into the arms of an Italian socialist as president of the European Commission. I wonder whether the Minister of State will enlighten us about the current position, as we should be grateful for any information that he can give us. We wonder whether history will repeat itself and the Government will repeat the actions of the former Prime Minister, the noble Baroness Thatcher, who apparently agreed to the appointment of Jacques Delors as Commission President when all that she knew about, him was that he was intelligent and energetic.

Many hon. Members on both sides of the House discussed the preparation of the intergovernmental conference of the enlarged European Union. That is an important matter. Many thoughtful contributions were made about the kind of issues that we could raise at the IGC. While my hon. Friend the Member for Hartlepool raised the spectre of another Maastricht in terms of how we might deal with the matter in the House, he spoke for all of us when he said that he hoped that we would look seriously at all the options open to us regarding the future of the European Union.

Mr. Jenkin

Will the hon. Lady explain what the right hon. Member for Copeland (Dr. Cunningham) meant when he said that he was against a federal Europe but in favour of deepening and of nation states? I notice that he is now telling the hon. Lady the answer.

Ms Quin

The hon. Gentleman's intervention was not so extraordinary that I could not have coped with it myself. The hon. Gentleman's concept of "federalism" seems to equate to the idea of a centralised super-state. May I say firmly that we have not criticised the Government for over-centralism suddenly to accept centralism at a European level. When my right hon. Friend spoke about "deepening", he was referring to areas on which we are on record as wanting further co-operation in Europe, particularly but not exclusively social and environmental matters. We want this country to play a full part in those negotiations and are worried that the Government's policy simply puts us on the sidelines.

Many hon. Members, again on both sides of the House, made some thoughtful contributions on future enlargement of the European Union. My hon. Friend the Member for Leicester, South (Mr. Marshall) discussed the Baltic states and common foreign and security policy. I agree with my right hon. Friend the Member for Copeland on the application of Cyprus and Malta, and I add my voice to the general welcome given to eventual enlargement including countries of central and eastern Europe. Poland, Hungary, the Czech Republic and Slovakia are all candidates in the short or medium term. Obviously, there will be problems with further enlargement, but many of them can be dealt with through transitional periods and special recognition of particular problems. Opportunities, too, will arise in any enlargement to include the countries of central and eastern Europe. For example, it is hard to imagine that the common agricultural policy could keep its present structure if many more countries join, especially if those countries already have a strong agriculture. We should therefore take the positive and constructive opportunities open to us.

Mr. Marlow

Further to the philosophical arguments about deepening and so on, is the hon. Lady in favour of a multi-track Europe, or does she believe that all member states must eventually move at the same speed?

Ms Quin

To a certain extent, given that enlargement will take place in phases, it is true that not all countries will be at the same stage. However, we are worried that there will be a two-speed Europe, with Britain in the slow lane. That would not be in Britain's interest and we are very much against it.

Social policy has been mentioned by many of my hon. Friends. That is not surprising. I was delighted that in the conclusions to the Corfu summit the European Council welcomed the additional impetus coming from the new countries and described them as being in the vanguard of the efforts to promote environmental and social protection, transparency and open government, areas considered essential by a large part of the Union's citizens". I certainly endorse that.

We feel as strongly as ever that this country should be part of the European social chapter. In a debate last Friday, my hon. Friend the Member for Rotherham (Mr. MacShane) and I spoke about some of the appallingly low wage rates that are all too common in Britain today and the poor employment protection which gives people at work little say about their work and little protection against such things as unfair dismissal.

We believe strongly that the recent improvements in employment law in Britain have resulted from the impetus from Europe. For example, the right to a written statement, maternity rights and better rights for part-time workers spring from the European dimension, and that is something which we welcome strongly. Certainly, the examples cited by my hon. Friends, including that of Austria, show once again that there is simply no link between poor employment conditions and a high level of employment.

Earlier today, the Prime Minister spoke about Britain having a larger proportion of its population in work than most other European countries. Of course, the country which has a greater proportion of its population in work than we have is Denmark, which has high levels of social protection and good wages. Once again, that proves that there is no facile link between the two—poor wages and high employment—as the Conservatives constantly tell us.

On environmental policy, we feel close to the new countries, as, indeed, we do on economic policy. The former Swedish Finance Minister, Allan Larssen, helped to draw up an economic policy document for the Socialist group in the European Parliament and for the Confederation of European socialist parties—a publication which I would recommend to Tory Members in terms of its commitment to economic growth.

We have heard very different views about Europe from the Government side. From the beginning of the debate, the Foreign Secretary came under considerable pressure from his own Back Benchers. The Government seem to get buffeted this way and that. As they get so buffeted, it becomes less clear what the Foreign Secretary and his colleagues in Government think and what is their strategy for Europe in the future.

It is also not clear who will win the battle. The right hon. Member for Shropshire, North predicted that the Euro-sceptics would sweep all before them, although he referred at the beginning of his speech to the "virus" of Euro-scepticism. The thought of such a virus spreading across Europe caused me some alarm.

The right hon. Gentleman also paid a tribute to the former leader of the Conservative MEPs, Sir Christopher Prout. Many of the things that we have heard in this debate are completely at odds with the commitments made by Sir Christopher Prout and his former colleagues in the European Parliament—when the number of Conservative MEPs was more than it is now—when they considered the matter of enlargement. They committed themselves to abolishing the unanimity provisions in the treaty and giving the President of the Commission a stronger role, and they implied that future revisions of the treaties could be carried out without the current requirement for unanimity and ratification by all national Parliaments. Those are different views from the ones expressed by Conservatives today. Within the space of a week, we have also had the astonishing spectacle of the Chancellor of the Exchequer saying one thing about a single European currency and the Chief Secretary to the Treasury saying something completely different. I was asked about a multi-speed Europe. It seems that the Conservatives are not only in favour of a multi-speed Europe; they are also a multi-speed party in their consideration of these issues.

I conclude by strongly welcoming this enlargement of the European Union. I am pleased that the Labour party will be in the European mainstream during the enlargement process. We believe that we should all share the commitment by these new countries to a social Europe, an environmental Europe and a Europe of economic growth. With these four new countries in place and, I hope, with the support of a Labour Government in place in Britain even before the IGC, I trust that we shall be able to deliver policies that will mean a more prosperous Europe. That will be good news for Britain and for the British people.

9.39 pm
The Minister of State, Foreign and Commonwealth Office (Mr. David Heathcoat-Amory)

This has been a wide-ranging debate, as expected. It has ranged from the origins of the enlargement negotiations to a forward look at the prospects of bringing in more states in Europe in subsequent enlargement rounds—a process to which we look forward. Many right hon. and hon. Members have touched on our aims in the European Union. The Government believe strongly that the Union must maintain its free-trading vocation, which is why we put so much store by the successful conclusion to the Uruguay round last year.

We also believe that the EU must attend to the health or otherwise of the European economy. We must pay more attention to the problems of unemployment and of how we can turn economic growth into more jobs. That is why the Conservatives promote policies of deregulation, of lightening the burden of employment costs and of making labour markets work better.

The United Kingdom opt-out from the social chapter has become ever more important over the months, a point frequently made this evening by Conservative Members. There has also been greater cohesion in European foreign policy, and measures are being taken to tackle crime and justice matters by means of the intergovernmental pillars set out in the Maastricht treaty.

We realise that all this is not enough for the European Union to regain its dynamism; it must continue to expand. Thus it was that the idea of four new member states joining the Union had long been advocated by the Government. It was during the British presidency of two years ago that the negotiations were finally given the necessary impetus. In the event, they took rather more than a year, but that was still easily a record compared with previous enlargement rounds.

All four Eftan states are instinctively free trading, all are fully democratic and all have a well developed sense of nationhood—a point made by my hon. Friend the Member for Wycombe (Mr. Whitney) among others. All are already in the European economic area, so they already enjoy a good measure of free trade with the EU. But their Governments believe that that is not enough. They want to be on the inside, shaping the rules and participating in the development of a common European foreign policy instead of being relegated to the status of spectators as the EU develops.

The European Union is now exerting a strong magnetic field on surrounding European states. Many speakers in this debate have therefore looked beyond this enlargement round to the next, and even to the one after that. Already six additional states have applied to join the EU: Turkey, Switzerland, Poland, Hungary, Malta and Cyprus. Some of them are not proceeding at present, for various reasons, but it was absurd and wrong of the right hon. Member for Copeland (Dr. Cunningham) to suggest that the Prime Minister was ruling out Cypriot accession before a resolution of the dispute in the island. My right hon. Friend was rightly facing up to the difficulties of bringing a divided island into the European Union because, at least on the face of it, that would conflict with the requirements for free movement of people and goods in the Community.

Dr. Cunningham

How is it that we could contemplate a divided Germany in Europe but not a divided Cyprus?

Mr. Heathcoat-Amory

The right hon. Gentleman is a master of misleading analogies. If he had studied better the problems of Cyprus, he would know that bringing in a community with ethnic divisions which date back to the invasion of northern Cyprus by Turkey during the period of office of a Labour Government would create substantial difficulties. My right hon. Friend the Prime Minister was right to draw attention to those problems. That is not being negative: it is being realistic and constructive and facing the issues. That is what government is about.

Future enlargement of the Union will raise important institutional questions touching on such matters as the size of the Commission and the qualified majority voting arrangements, and will also raise problems of cost. My right hon. Friends the Members for Horsham (Sir P. Hordern) and for Shropshire, North (Mr. Biffen) rightly and eloquently spoke about the difficulties of contemplating enlargement to include central and eastern European countries in the light of the common agricultural policy. It is doubtful that the CAP as structured at present and the current structural funds could survive if countries from behind the former iron curtain joined the Union.

The present round of enlargement has not put the CAP under such pressure. Agricultural prices in three of the four countries are substantially higher than those that obtain in the rest of the Community. Bringing them down to the same level will mean substantial expenditure. However, because the four states, with the possible exception of Finland, will be net contributors to the budget, the problem of unacceptable and unsustainable costs does not arise at this stage.

My right hon. Friend the Member for Guildford (Mr. Howell) suggested that we should engage with the countries of central and eastern Europe in foreign and security policy before they join the Community in their entirety. I entirely agree with my right hon. Friend. We can make progress on some of those issues now but others will remain for the intergovernmental conference in 1996.

Mr. Cash

Would my hon. Friend care to repeat what I understood him to say during the European elections—that he regarded a single currency as liable to dilute our sovereignty and that, from his point of view at any rate, although not speaking on behalf of the Government, it was not a satisfactory move in the right direction?

Mr. Heathcoat-Amory

I was correctly reported during the press conference to which my hon. Friend draws attention.

The right hon. Member for Bethnal Green and Stepney (Mr. Shore) raised the question of the study or reflection group.

Mr. Budgen

Will my hon. Friend give way?

Mr. Heathcoat-Amory

I am sorry. I am answering a point raised in the debate. It is incumbent on me to reply to points already raised rather than to respond to new ones.

I can assure the right hon. Member for Bethnal Green and Stepney that the group will consider a wide range of contributions not only from member states but from non-governmental sources. I hope that, through channels such as Select Committees, the House will find ways of contributing in the run-up to the intergovernmental conference. The right hon. Gentleman courteously informed me that he would not be here for the conclusion of the debate, so perhaps I can send him a message through the Official Report, which he may read tomorrow. The Luxembourg compromise, about which he was concerned, still exists. He was anxious about its health. I can confirm that, whereas it may be asleep, it is none the less alive—indeed, the French Government reaffirmed their support for it during their Maastricht debate.

Mr. Spearing

Will the hon. Gentleman give way?

Mr. Heathcoat-Amory

I hope that the hon. Gentleman will forgive me, but I have a number of points to answer.

There was some speculation about the attitudes of applicant states and how they would use their influence in the European Union after they had joined. My hon. Friend the Member for Harrow, East (Mr. Dykes) believes that they will be enthusiastic volunteers for a deeper, more integrated community. They are all vigorous democracies and all views have been expressed within them.

It is worth referring to recent remarks by Cabinet Ministers in those states. In particular, I want to quote Carl Bildt, the Prime Minister of Sweden. He thanked this country for our influence in smoothing the way to accession and said that Britain was instrumental in the shaping of a new Europe that is larger, more open and less intrusive. On the question of social issues, which was raised more than once in the debate, the same Prime Minister said: While the European Community should have a social dimension, most of the social policy issues are better dealt with at local, regional and national level. I hesitate to paraphrase my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen), but I think that he was saying that the advent of the four countries would make monetary union more likely. I can give him some reassurance because Sweden's Finance Minister, when asked about Sweden's participation in the third phase of European monetary union, said: That depends on when we satisfy the entry requirements and also on when we want to be included…Sweden will not automatically become a member of the final monetary union just because we ratify our membership of the EU. I hope that that note of caution will be of some reassurance to my hon. Friend.

Mr. Derek Enright (Hemsworth)

Will the Minister give way?

Mr. Heathcoat-Amory

If I have a few minutes to spare at the end of my remarks I will give way to hon. Gentleman, as I know he has not made a speech.

We all recognise that the four member states will not line up with us on all issues. It would be odd if they did and that would not be the sort of European Union in which they believe. They have different attitudes, traditions and interests. Defending those interests is fully compatible with membership of the European Union. That was evident during the negotiations, which were long and hard fought. We protected our interests and they protected theirs.

On the question of fisheries, I assure my hon. Friend the Member for Stroud (Mr. Knapman) that in all important respects we fully protected the British fishing industry. Indeed, the chief executive of the National Federation of Fishermen's Organisations wrote to the Government after the negotiations saying: The satisfactory outcome to the accession negotiations…is very welcome indeed. My hon. Friend raised a number of specific issues about fisheries which I do not have time to respond to now, but I will write to him.

The debate raised a new and startling development in Labour policy. Labour's Front-Bench spokesmen still retain the capacity to surprise us. We heard news of a new opt-out by the Labour party. The right hon. Member for Copeland announced a ban on any dealings with Ministers in the new Italian Government from the National Alliance party. [Interruption.] I am getting it exactly right. The right hon. Gentleman called them neo-fascists, although, contrary to what the right hon. Gentleman said, that is not how they describe themselves. The right hon. Gentleman is digging himself into a deeper and deeper hole. He is saying that any future Labour Government would boycott any meeting with those individuals, including any Council meeting. Five Ministers from that party are in the new Italian coalition Government. In the unlikely event of there being a Labour Government, we would have an empty British chair at Transport, Agriculture and Environment Council meetings. Whether or not the right hon. Gentleman intended this, he is advocating an opt-out by the United Kingdom not only from policies discussed at those Council meetings but from any chance of defending Britain's national interests at those meetings.

I cannot imagine a more fatuous policy based on such a petulant reaction to the result of an Italian general election. As my right hon. Friend the Member for Shropshire, North rightly said, that attitude is bizarre and sanctimonious—and it is almost incomprehensible from a Labour Front-Bench spokesman with any pretension or aspiration to office.

The Bill and the treaty are an invitation to the House to approve and to ratify the accession of four new member states. Those countries do not countenance membership to submerge themselves in a formless and shapeless Union or to lose their identity like lumps of sugar in a cup of tea. As Finland's Prime Minister said recently: The European Union is made up of independent and sovereign states that have voluntarily decided to exercise their jurisdiction together on certain issues. All of us on the Conservative Benches agree with that sentiment.

We hope that the three referendums yet to be held in applicant states will endorse membership. The last referendum will be held at the end of November, which is why the Bill is presented to the House now. If one or more of the referendums were to fail, no renegotiation of the treaty would be necessary. A Council decision would be taken to make the consequential changes that may be necessary to such matters as qualified majority voting.

Earlier, my hon. Friend the Member for Northampton, North (Mr. Marlow) asked what would happen to the treaty's qualified majority voting figures if one or more of the applicants failed to ratify. The answer is that the allocation of votes to the non-acceding country would be deleted from the treaty and any new voting threshold set. Article 2 of the treaty provides for that. The threshold would be reset at a lower level, but that would not alter in any way the decision made at Ioannina, which protects our position when 23 votes are in opposition to a prospective decision or piece of European legislation.

The debate made clear the support that exists in all parts of the House for entry of the four EFTA states. We see that not only as a welcome step in its own right, but as a milestone on the way to a Europe that is whole—a Europe that achieves freedom while respecting diversity. I urge the House to give the Bill a Second Reading.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Committee of the whole House.—[Mr. Patnick.]

Committee tomorrow.