HC Deb 16 December 1996 vol 287 cc615-31 3.30 pm
The Prime Minister (Mr. John Major)

With permission, Madam Speaker, I shall make a statement on the meeting of the European Council in Dublin on 13 and 14 December, which I attended with my right hon. and learned Friends the Foreign Secretary and the Chancellor of the Exchequer and the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Boothferry (Mr. Davis). I have placed the conclusions of the Council in the Library of the House.

The main issues on the agenda were the intergovernmental conference and economic and monetary union.

The Council had a lengthy discussion on the prospects for the intergovernmental conference. Shortly beforehand, the Irish presidency had tabled a general outline for a draft revision of the treaty. That has been deposited in the House. It summarises fairly the position reached in the negotiations and the views of different member states. The views of the United Kingdom are fully reflected in it.

The Council conclusions reaffirm the target of completing the intergovernmental conference at the Amsterdam European Council in June 1997 and welcome the presidency document as a good basis for the work that lies ahead. That work was in no way prejudiced by the Council's conclusions in Dublin. We shall continue to advocate our own proposals and press our own concerns.

In discussion, I welcomed the progress made in a number of areas: subsidiarity, a greater role for national Parliaments, making the common foreign and security policy more effective, improving the quality of European legislation and introducing greater openness into the workings of the European Union.

I also spelled out the United Kingdom position on a number of key points. I see no purpose in a new employment chapter in the treaty. It will not create a single job. I do not accept that an enlarged European Union needs more qualified majority voting. On defence, we welcome co-operation between the European Union and the Western European Union, but not merger or subordination of decision making. I will not agree to justice and home affairs issues falling under Community competence. It is unthinkable that the United Kingdom would relinquish its frontier controls. I also emphasised our requirement for progress on quota hopping in the common fisheries policy and on the working time directive.

The outcome of the intergovernmental conference will do much to determine the future direction of the European Union. Some advocate a more integrated, centralised Europe. I respect that view, but I do not share it. It would not be right for Britain. I believe that the European Union must be a partnership of nation states, with Community competence where it is needed, but only where it is needed. This is more than a free trade area, but very much less than an embryo European state.

There is only one way in which those competing visions can be reconciled, and that is through the development of a more flexible Europe. That is one of the most important issues before the conference. Those who wish to integrate further in particular areas should not be frustrated unreasonably although, if they wish to use European Union institutions, they can proceed only through unanimity. Those who do not must not be forced into unwished-for obligations, which build up resentment.

I first set out the need for flexibility at Leiden some years ago, and it is now widely accepted. But we need to ensure that it is developed in a way that protects the vital interests of those who do not wish to integrate further in particular areas. There is much more work to be done here, and very little time in which to do it if the Amsterdam deadline is to be met.

Economic and monetary union was the subject of much interest, although the European Council did not itself discuss the issues at any great length. The Council agreed a report by Economic and Finance Ministers covering three issues on which my right hon. and learned Friend the Chancellor has reported to the House on a number of occasions in recent weeks: the stability pact, the legal status of the euro and the new—voluntary—exchange rate mechanism. The conclusions, to which the Economic and Finance Council report is annexed, make it clear that those issues remain subject to our parliamentary reserve.

If the single currency goes ahead, it is a vital British interest—whether or not Britain is a member—that it succeeds; so I welcome the progress on the stability pact. The agreement reached strikes the right balance between the necessary discipline and the need for the Council of Ministers to retain control of the disciplinary process if individual countries get into difficulty.

The House will welcome the clear statements in the ECOFIN report that the arrangements for economic surveillance to be agreed for countries not in the single currency cannot lead to sanctions of any kind. I have made no secret of my doubts about whether enough countries will be sufficiently convergent to allow a single currency to go ahead on the present timetable. I repeated those doubts in Dublin. It is important that the figures themselves are not fudged, but whether or not particular countries meet particular targets on a particular day is less important than the extent of genuine economic readiness for such a far-reaching step. I am therefore pleased that the ECOFIN report makes clear the importance of not only achieving economic convergence on a particular day, but being able to sustain it over the long term.

I should also report that the president of the European Monetary Institute presented to the Council, and subsequently publicly, designs for the proposed single currency's banknotes. Those designs are the responsibility of the central banks—as, indeed, such designs are the responsibility of the Bank of England in this country now. Everyone will have their own views on those.

The decision on whether to go ahead with a single currency will be the most far-reaching decision that the European Union has ever taken. Although we expect to meet the required economic conditions, we have the right to decide whether or not we wish to join, if it goes ahead. We will make our decision when we are clear about all the necessary issues, including, crucially, our assessment of the prospect for real and sustained economic convergence.

The Council also discussed employment. Unemployment in this country is lower than in the other major European Union economies, and is falling faster. I circulated at the Council a paper on United Kingdom policies and their results, and commended it to our partners.

The Council adopted a declaration on unemployment. My agreement to it was subject to three conditions: that it confirmed that primary responsibility for employment policy rested with member states; that the European Union's approach remained based on the supply-side policies agreed at Essen in 1994; and that the declaration in no way prejudiced the question of an employment chapter in the treaty. Those conditions were agreed.

The European Council also discussed justice and home affairs, in which we welcome greater European co-operation, as long as it remains firmly on an intergovernmental basis. The Council confirmed the priority of the fight against drugs, and endorsed an Anglo-French initiative to combat transit and production of drugs in the central Asian republics. It called for ratification of the Europol convention by the end of 1997—achieved only by the United Kingdom so far—and agreed that Europol, the European Police Office, should work in conjunction with national agencies to support the fight against international crime. The Council also created a high-level group to draw up an action plan against organised crime, welcomed joint actions against sexual exploitation of children and trafficking in human beings, and confirmed the need for intensified co-operation against terrorism.

I briefed my colleagues on the steps that we have taken to eradicate bovine spongiform encephalopathy, notably progress under the 30-month slaughter scheme. I sought and received confirmation that future decisions on lifting the ban would be taken on the basis of science, as agreed at Florence. My right hon. and learned Friend the Minister of Agriculture, Fisheries and Food will be making a statement a little later on the next steps.

On foreign policy, the Council endorsed the London conference document on Bosnia as an excellent basis for work next year. On the middle east, the declaration that was issued reflected our concern about the current state of the peace process. The Council also expressed its strong interest in a smooth transition to the Hong Kong Special Administrative Region next year and its support for the existing representative democratic institutions of Hong Kong. That was a welcome endorsement of our approach.

The European Union is approaching some historic decisions over the next 18 months, both on a single currency and on its future direction. The result of the intergovernmental conference may well mark a crucial turning point in Europe's development. The President of the European Commission said last week that the moment of truth lies ahead. There is one sense at least in which he is right. The choices that are made will determine not only the success and stability of Europe as a whole, but Britain's relationship with it.

Mr. Tony Blair (Sedgefield)

First, I should like to state our unequivocal support for the measures that were agreed on co-operation to fight terrorism, organised crime, drugs and crimes against children. I also place on record our continuing support for the process of enlargement. On the IGC, we restate our agreement to justice and home affairs remaining outside Community competence, as in other essential areas such as taxation and defence. I agree with the Prime Minister on the issues of subsidiarity and the common foreign and security policy.

On the issue of flexibility—certain states moving ahead without others—does the Prime Minister agree that if that meant some states forming an inner core in the European Union and moving ahead in certain areas without the consent of others, that would be potentially dangerous to Britain's interests?

I shall come straight to the two principal issues that arise—BSE and the single currency. We were told prior to Dublin that the Government were about to pull off a deal lifting the beef ban. Where is that deal?

Sir Jim Spicer (West Dorset)

That is unreasonable.

Mr. Blair

That is supposed to be unreasonable, is it? Is it not now six months since the Florence summit, when we were told that a deal had been reached and that, as I recall, the ban would be lifted by November? After six months, is it not a fact that not a single piece of progress on lifting the ban has been made? Six months on, we are apparently back to the Florence agreement. Meanwhile, our farmers are suffering and it seems that the cost to the Exchequer is likely to rise to more than £3 billion.

Has not this whole affair been handled with serial incompetence? It is not unreasonable to ask: what is the timetable now? November has passed—what is the new date? In his statement, the Prime Minister said that decisions are now to be taken on the cull and elsewhere on scientific evidence. Apparently the Minister of Agriculture, Fisheries and Food said at lunchtime, "If one was to try to justify the cull in terms of the science, one would be in some difficulty." If Ministers of the same Government cannot get the same line right on the same day, is it any wonder that we are in the mess that we are on this issue?

On a single currency, the Prime Minister made much of the parliamentary reserve. Can he confirm, as the communiqué makes plain, that the vital decisions—some of them the most important that Europe has faced, as he rightly says—have been made? Will he confirm in terms of the stability pact that he and the Chancellor have agreed not only the deficit limits, but a system of penalties, rules for exceptional circumstances and a means of enforcement? Have they not also agreed that convergence programmes for those out of the single currency will be made obligatory? Plans will have to be submitted every year, with provisions for default. On exchange rate co-operation, have they not also agreed a system of assessment and monitoring, even for those outside any new exchange rate mechanism arrangement?

Therefore, on the parliamentary reserve, which is the Prime Minister's fallback position, may I put this to him? When will those issues be voted on in the House? When will we get the chance to explore those matters? Will he at least give us an undertaking that we shall have that vote before the general election? I think from that smile that the answer is no. I think that it is fair enough to say, however, that the only reason why we are not getting the chance is that the right hon. Gentleman is afraid to face the House of Commons' verdict on those issues. The whole point about the parliamentary reserve is that, if we were to change the position in any way, he could go back to our European partners and renegotiate. Is he seriously saying that, as a result of the reserve, he could credibly renegotiate decisions that had been taken?

How does the Prime Minister's position of keeping open the options on a single currency square with the extraordinary unilateral declaration of independence in today's The Daily Telegraph, from 147 Conservative candidates, who said, effectively, that they would now stand on a different manifesto from the Government's at the next election? After all, it was the Prime Minister who said that it was self-evident that Tory divisions on Europe were damaging Britain's interests. I simply ask him, and again I think that this is not unreasonable: what could be more damaging than almost 150 candidates openly disagreeing with the Government's position and over half of them saying that they would never, ever join a single currency—and some of them want to come out of the European Union altogether? How does that make for credibility in negotiation? It is only fair to ask the Prime Minister to deal precisely with those 150 candidates, with their different manifesto.

Is not the real test in Europe success or failure, strength or weakness, and "Can we get a good deal for Britain?", and, as a result of those divisions, exemplified by 150 candidates effectively forming a party within a party, are we not in a weaker position than Britain has been in for 25 years?

The Prime Minister

Let me first welcome what the right hon. Gentleman said about his support for the terrorism measures, for enlargement and for subsidiarity. I also welcome the other points of agreement at the outset of his remarks.

On flexibility, I have made the point on a number of occasions that, if some of our colleagues moot the prospect of flexibility, which means an inner core going ahead on its own, that would be utterly unacceptable, unless there were areas in which they went ahead by unanimity, so that every other member of the European Union agreed. However, in relation to any form of flexibility, if people propose to use the institutions of the European Union, those institutions belong to all EU members, not just some of them, and I have made the point to our partners that there can no prospect of an inner core going ahead on its own, other than by unanimity. The prospect of their going ahead on a wide front would fundamentally change the whole nature of the EU and is not the sort of flexibility that would be in the interests either of this country or of the EU as a whole.

On the right hon. Gentleman's remarks about BSE, the point that he frequently overlooks whenever he raises that matter in the House is the changed scientific evidence, which appeared after the Florence agreement was reached, about maternal transmission and other matters. That is what has changed the timetable for us. My right hon. and learned Friend the Minister of Agriculture, Fisheries and Food will make a detailed statement about the way forward in a few moments.

On a single currency, the parliamentary reserve applies to all the matters in the stability pact, not of course to the matters agreed in the Maastricht criteria some time ago, some of which the right hon. Gentleman listed as if they had most recently appeared in the stability pact and had never been seen on a previous occasion. On the exchange rate mechanism, that remains entirely voluntary, as my right hon. and learned Friend the Chancellor of the Exchequer has made clear on a number of occasions.

On convergence for countries outside the new euro zone, if it is created, the reports to which the right hon. Gentleman refers—I assume that he is referring to the routine surveillance reports that have been made by the House for some time—have no binding obligations at all and the circumstance does not change in any way.

On the manifestos of some of my colleagues, I have to tell the right hon. Gentleman that we did not discuss those at all at the summit, but, of all hon. Members, the right hon. Gentleman is on rather thin ice in raising the question of manifestos, because I recall what his 1983 manifesto said. He said that he would like to come out of Europe. He wanted to scrap Trident. He also wanted to end nuclear weapons. It is self-evident that, sometimes, what is put in a manifesto is not necessarily maintained by individual Members thereafter. The right hon. Gentleman is not in a position to make the points that he made.

On the question of a good deal for the United Kingdom, I have to tell the right hon. Gentleman that if he were to negotiate while still following the policies that he has advocated so far, the Amsterdam summit would be a Dutch auction of British sovereignty. He told his party conference that he would never allow himself to be isolated. He cannot negotiate if he is not isolated. He would surrender the veto in social policy, surrender the veto in industrial policy—

Mr. Donald Dewar (Glasgow, Garscadden)


The Prime Minister

I tell the Opposition Chief Whip that it is ridiculous to surrender it, but that is the policy that the right hon. Gentleman is pressing upon his party. He would also surrender the veto on regional policy and on environmental policy. He would sign up to the social chapter and to the working time directive. He would back a new treaty on employment. Were he to go to Amsterdam, by the time he came back, there would be a great dent in British sovereignty.

Mr. Hugh Dykes (Harrow, East)

I thank my right hon. Friend for the major contribution made by the United Kingdom to the successful Dublin summit. Is not it a statement of fact that our strong opt-out on joining a single currency and our policy of wait and see, which are strongly supported in this country as the only rational stance, do not in any way gainsay the need for further discussion on the merits of a single currency?

The Prime Minister

I entirely agree with my hon. Friend. Maintaining our position is the right and sensible way to proceed, so that we can not only retain the flexibility for Britain to make a decision in Britain's interests, but have the maximum opportunity to influence others in decisions that will affect this country.

Sir David Steel (Tweeddale, Ettrick and Lauderdale)

Does the Prime Minister accept that many of the problems that we face in the European Union today—notably with the common agricultural policy and the common fisheries policy—were caused by our opting out of the original negotiations that framed the rules? If so, does he accept that the British national interest is again being damaged, because he is seen by other European Governments and by the British public as being held hostage by a Conservative party whose policy is increasingly not to be at the heart of Europe, but to be out of Europe?

The Prime Minister

The right hon. Gentleman will know that I have made it clear that we are not opting out of the negotiations in the matters that lie immediately ahead of us. We propose to play a full part in the intergovernmental conference and in the decision-making process leading up to a determination of whether a single currency proceeds.

There are two elements in the determination about a single currency—first, whether the circumstances are right for anyone to proceed; and secondly, whether the circumstances are right for any individual country, including the United Kingdom, to proceed. The determination of whether every country proceeds is actually made by a qualified majority vote in due course. If we think that other countries are not economically ready to enter a single currency—because their entry into a single currency and their weakening of a single currency, if it proceeded, would damage this country, whether in or not—we retain the option to vote against their entry. I certainly intend to play a full part in the negotiations.

Mr. Iain Duncan Smith (Chingford)

My right hon. Friend said that he was opposed to any country entering a single currency if it could not sustain its position economically, or if it somehow fudged its entry economically. Therefore, during the conference, did my right hon. Friend say anything about the countries that are clearly fudging their entry criteria—such as France, which has abused the process by stealing money from its telecoms fund? Did he warn France that if it continued to do that, Britain would raise it as a major issue again and again and again and declare itself against the process?

The Prime Minister

I made it clear that we would look carefully at the economic conditions to ensure that they were right, genuine and had not been fudged. I did not raise the specific matter of the French telecoms fund. When the time comes to make a judgment, we shall certainly take into account any actions that appear to us to be short-term fudges rather than a long-term improvement in the economic condition of countries going into a single currency. It was precisely to make it clear that that would be our position that I emphasised—not only today, but in the discussions over the weekend—that we would examine not only whether people met the criteria on the specific day that the initial decision was taken, but whether it was likely than they could maintain compliance with the criteria over the long term.

Mr. Tony Benn (Chesterfield)

Does the Prime Minister recognise that the question of a single currency—which is a political, not an economic question—goes far beyond the interests of this or cif any other country? Ministers have agreed in principle to transfer major political powers from Governments, whom the peoples of the European Union elect, to bankers, whom they do not. Given the situation in France, Germany, Italy and Spain—where, for many years, their peoples were denied, by Hitler, Mussolini, Franco and Salazar, the right to use the ballot box to attempt to remedy their grievances—is it really sensible, in principle, to be in favour of giving up those powers? Is not one reminded of the words of Sir Edward Grey, in 1914: The lamps are going out all over Europe; we shall not see them lit again in our lifetime"?

The Prime Minister

It seems to me that there may be some interesting manifestos from the Opposition, as well as from some of my hon. Friends. The only sensible conclusion that one can draw from the right hon. Gentleman's comments—I appreciate the sincerity with which he advances his view, as he has done consistently for many years—is that we should remain in the negotiations to point out the dangers that we may see. I think that he would be forced to agree that that is the logical conclusion to be drawn from what he has said.

Mr. George Walden (Buckingham)

Is my right hon. Friend aware that, were the Leader of the Opposition to allow a free vote on this issue, more than three quarters of the House would support my right hon. Friend's policy on Europe? That question comes from a sceptic on a single currency, who is not even angling for a job.

The Prime Minister

The accuracy of my hon. Friend's prediction marks him out as a future Chief Whip, if that is a job that interests him.

Mr. Andrew Faulds (Warley, East)

My congratulations. The Prime Minister made it clear that the current state of the peace process in the middle east was discussed. Was the issue raised that that American Zionist, Netanyahu, is endangering the extremely fragile peace in that part of the world, and that something must be done internationally to restrain that gentleman in consistently breaking the Oslo accords, to which the Israeli Government are committed?

The Prime Minister

There was certainly a collective view that the agreements reached previously had to be met and kept, and that there was some need for urgent progress. No one pointed to the specific cause of the current disagreements; I think that there was a general feeling that there may be faults in many directions. However, the unanimous view was that there was a need for early progress.

Mr. Norman Lamont (Kingston upon Thames)

What example in history is there of a single paper currency that is not tied to a single Government?

The Prime Minister

My right hon. Friend points to the fact that we are entering uncharted waters, and I agree with him. That fact is precisely why I am so cautious. It is why my right hon. Friend and I negotiated the option for us to decide at a later date, and it is why he and I set out the convergence criteria. The fact that we are entering waters where no one has been before is precisely why it is right for us to be cautious and right for us to examine the economic circumstances. My right hon. Friend is right.

Mr. Terry Davis (Birmingham, Hodge Hill)

Given that we can all see the detailed arrangements for a single currency, what is the Prime Minister waiting for? Is it not time for him to make up his mind one way or the other, instead of sitting on the fence?

The Prime Minister

I am interested in the fact that the hon. Gentleman knows all the circumstances. Does he know what the legal conditions are yet? The Governments do not. Does he know who will enter yet? The Governments do not. Does he know who will meet the economic criteria? The Governments do not. I can extend that list. Clearly, the hon. Gentleman has knowledge that the rest of us have not yet had.

Mr. David Howell (Guildford)

In seeking to protect our vital national interests in Dublin and to promote a non-federalist vision of Europe, can my right hon. Friend say what problems are being caused for him and our interests by the belief in some European quarters that after the general election there will be in London a more subservient, compliant, inexperienced and subordinate Government?

The Prime Minister

There is no doubt that there is a wish among some of our partners with socialist Governments to have a similar Government in the United Kingdom, who would be prepared to surrender the elements of British sovereignty that I set out earlier. I understand that wish, but they also understand the timetable; on that basis, I think that they are beginning to understand the need to negotiate with us now and, I believe, in Amsterdam.

Mr. Peter Shore (Bethnal Green and Stepney)

If the Prime Minister had any remaining, lingering doubts about the folly of joining a single currency, surely he had them resolved at Dublin. Of course, we already knew that, if we were to join a single currency, the stability pact would impose vast fines on us—fines amounting to more than 11 billion if it had been in effect for only the past four years. However, we did not know what was the crucial, as it were, exception—the temporary and exceptional circumstances in which there would be exemption from the penalties of the treaty. Now we know that it is the massively deflationary fall of 2 per cent. in gross domestic product, an experience that this country has not suffered in the post-war period. That wholly deflationary policy would be permitted under such a guideline. Does not the Prime Minister recognise that that is unacceptable and that it would be masochism and madness for us to join?

The Prime Minister

But of course, the right hon. Gentleman is wrong in what he has to say about the vast fines that would have been inflicted on us in the past, as he will see if he reads more carefully what my right hon. and learned Friend the Chancellor discussed with his ECOFIN colleagues.

As for the general point, the policy relies not only on the 2 per cent. criterion, but on an overall case-by-case assessment. The only circumstances in which a fine would be levied—of course, it would be levied only on a country that was in the new euro zone—would be if the country was not only defaulting but making no effort whatever to correct the default. That is why it has been left to a decision of Ministers.

Sir Teddy Taylor (Southend, East)

I greatly welcome the determination shown by the Prime Minister at Dublin and, in particular, by the final sentence of today's statement, but will he outline the importance that he places on the elimination of quota hopping? Is it something that the Government are merely hoping to achieve or something that they will demand be achieved if we are to have a new treaty?

The Prime Minister

As my right hon. and learned Friend the Foreign Secretary made clear at the weekend, we think that it is essential to achieve the necessary change.

Mr. Giles Radice (North Durham)

The Prime Minister talked about vetoes, but is it not the case that the only veto that really counts with this Government is that exercised by the Europhobic malcontents on the Government Back Benches and their fellow travellers in the Cabinet?

The Prime Minister

The hon. Gentleman should ask more sensible questions than that with his knowledge. If he had chosen to look around him, he might have directed his remarks about Europhobism in quite a different direction.

Mr. Robert Key (Salisbury)

Does my right hon. Friend accept that many of my constituents to whom I spoke this weekend were delighted that he was negotiating hard in Dublin and that they are more worried than they have been for 25 years about our future relationship with Europe, but that the cruellest delusion would be to suppose that we could terminate our membership of the European Union at a stroke and that everything would then be all right?

The Prime Minister

I agree entirely with my hon. Friend. That is a delusion, and the people who peddle that delusion are certainly not considering what the British national interest would be or what the implications of leaving the European Union would be. Our position must surely be the one that I sought to set out a few moments ago: we are not prepared to move towards what I called an embryonic super-state across Europe, but we agree that our relationship with the European Union is more than a simple trading relationship, as indeed it has been since the day we signed the treaty of Rome.

Mr. Tam Dalyell (Linlithgow)

Did I hear the Prime Minister aright in his opening statement, saying that, in his opinion, it was a vital British interest, whether we were in or out, that the single currency should succeed? If he believes that, is there not a strong case for getting in and influencing it as soon as possible? Are we correct in believing that Michael Patijn, on behalf of the Dutch Government, has made various statements about what the 14 nations would do if, as they saw it, there was a lack of co-operation from a British Government? What would we do then?

The Prime Minister

The treaty cannot be agreed without 15. I have not heard the threats to which the hon. Gentleman refers, and I have no idea whether they were made. They have been made by people in the past, and I regard them as dismissible.

If a single currency goes ahead and fails, the impact across the European Union will be dramatic, not just for those who are in the currency. That is the point that I was seeking to emphasise to the House. If it looks as if it will not succeed—because the convergence criteria will not be met, or for some other reason—we shall urge everyone not to go ahead. If it went ahead and failed, I believe that the implications for this country would be profound—less profound, perhaps, than if we were in it, but certainly profound.

Mr. John Redwood (Wokingham)

Given our worries about the attitude of some of our partners and the deal that they have offered us, what benefits did the Government secure for waiving our vetoes over the stability pact and the legalisation of the euro? Is the Prime Minister worried about Franco-German domination of the agenda, and does he not think that we need to offer an alternative?

The Prime Minister

On the stability pact, as I have just said to the hon. Member for Linlithgow (Mr. Dalyell), we think that if the euro zone goes ahead, it is essential that it succeeds. One of the mechanisms for making sure that sensible policies are carried out is the discipline of the stability pact, so we favour the stability pact. On that basis, it was unlikely that I would exercise a veto over it.

The veto is a necessary weapon that we have to use in areas of great national interest to the United Kingdom. When necessary, I will use the veto. I do not intend to abuse it and I do not intend to use the veto every time I have a disagreement with my European partners, but on matters of significant national interest, it must be clear to them that we will use it, because that would be the wish of the House and in the interests of this country.

Mr. John McAllion (Dundee, East)

The Prime Minister welcomed what he described as progress on subsidiarity. Will he explain to the House why, in his view, the principle of subsidiarity must be applied within the European Union, but must not be applied within the Union that is the United Kingdom? Surely it is wholly inconsistent to raise the banner of subsidiarity in one multinational union while simultaneously lowering it in another multinational union. Why cannot the Scots have their own elected parliament? Why cannot the Welsh have their own elected assembly? Why must subsidiarity always stop short in this unreformed place?

The Prime Minister

A great deal of responsibility and devolution has gone to Scotland, to Wales and to my right hon. and learned Friend the Secretary of State for Northern Ireland. If the hon. Gentleman cannot see the difference between 15 historic and sovereign nations and one United Kingdom, where a voluntary association has been entered into for so long, he should look more carefully.

Mr. Nigel Forman (Carshalton and Wallington)

Is my right hon. Friend aware that probably the most important thing that he said in his statement was that he intends to be obdurate about the so-called flexibility pact from France and Germany? He is right to cling to the safety catch of unanimity. Will he guarantee that he will continue that approach in Amsterdam and beyond?

The Prime Minister

I agree with my hon. Friend. A flexible approach set out solely to provide a mechanism for a small core of countries to go ahead on their own, perhaps against the interests of the rest of the European Union, would not be acceptable. Any flexibility of that sort would need to be agreed by unanimity.

Mr. Alex Salmond (Banff and Buchan)

The Prime Minister needs to be reminded that Scotland is a historic and sovereign nation. Did the Prime Minister see the remarks attributed to a member of the Irish presidential delegation that, given that the Prime Minister has kept the rest of us waiting for six months before honouring the commitments on the Florence agreement, it is difficult to take seriously any sense of urgency that he now expresses on BSE? How can the right hon. Gentleman cite maternal transmission as evidence for the delay, when the selective cull to be announced today does not include those animals? Who is responsible for the botch-up and the delay, and does the right hon. Gentleman accept any responsibility for the lost livelihoods throughout rural communities?

The Prime Minister

We have provided about £2.5 billion precisely to protect the beef industry across the United Kingdom after the health scares that arose following the scientific evidence about BSE. [HON. MEMBERS: "The cull?"] I shall come to that.

What no one anticipated at Florence or afterwards were two factors. First, there was the changed scientific evidence to which I referred a moment ago. Secondly, I do not believe that the hon. Gentleman or anyone else realised the sheer weight of animals that would need to come forward under the over-30-month scheme. More than 1 million animals have now been slaughtered—a figure that no one anticipated at the time. The fact that it has been possible to achieve that is the result of a remarkable feat of organisation by my right hon. and learned Friend the Minister of Agriculture, Fisheries and Food and my right hon. Friend the Chancellor of the Duchy of Lancaster. What we have done throughout the exercise is to put first and foremost the long-term interests of the beef industry. That we continue to do.

Rev. Ian Paisley (North Antrim)

As the Prime Minister has told the country that he is in Europe to get a good deal for the people of this country, does he not recognise that the lobbying by his Minister recently in Brussels for the destruction of Sunday as a special day and his success in getting written into the health directive that Sunday would no longer be a special day outrage many working-class people who have always observed Sunday as at least a family day? What does the Prime Minister think about the overwhelming vote in the Strasbourg Parliament, which said this week that Sunday should be returned to being a special day? What has he to say about that?

The Prime Minister

Many people believe that Sunday should be a special day. That is an article of faith for them and I do not wish to destroy that article of faith. It is a choice made by literally millions of people, as the hon. Gentleman said. I assume that his earlier remarks related to the concerns about the 48-hour working week. The hon. Gentleman is wrong to attribute to that the statement that the Government have not had the same respect for Sunday as he has.

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

May I press the right hon. Gentleman about the rights of this House? As he has agreed both the principles and the outline of a stability pact, when will he seek approval for his agreement in the House?

The Prime Minister

As I said in reply to the right hon. Member for Sedgefield (Mr. Blair), we place a parliamentary reserve on the matter and the decision will be brought before the House in the usual way, following discussions between the usual channels.

Sir Ivan Lawrence (Burton)

Will my right hon. Friend assure the country that no concession by our European partners on the working time directive, on beef exports, on quota hopping or on anything else will cause us to agree to surrender to European Union competence third-pillar matters of home affairs, justice and, in particular, border controls?

The Prime Minister

I can give my hon. and learned Friend a categorical assurance on that point.

Mr. D. N. Campbell-Savours (Workington)

If it is true that more than 140 Conservative candidates at the next general election will stand on a platform of no single currency at any price, does that mean that if there is a referendum, they will totally ignore the result, even if it says that the judgment of the British people is that we should enter the single currency?

The Prime Minister

The hon. Gentleman is basing his remarks on the proposition that what has been reported is accurate. I do not know whether it is accurate and I have no idea how many of those 147 will be in the House. What I can say is that I will take responsibility for our manifesto commitment; I will set it out and keep it.

Sir Patrick Cormack (South Staffordshire)

As one who strongly supports my right hon. Friend's line on the single currency and believes that it is a wise one that merits united support on the Conservative Benches, may I ask him why he has not pressed on his European colleagues the great merits of the hard ecu—the common parallel currency—which he championed so sensibly some years ago?

The Prime Minister

I continue to believe that that would have been a sensible, market-driven way in which people could have decided whether they wished to move to a common currency. It had the additional advantage that a common currency could have circulated alongside domestic currencies, so that we could have had parallel currencies. Undoubtedly, that was a sensible way forward which, from time to time, I have pressed on my colleagues. I am afraid that they will not anticipate doing it unless or until they discover that a single currency either cannot proceed, or proceeds but does not work.

Mr. John Wilkinson (Ruislip-Northwood)

For the sake of eliminating any residual doubt and ambiguity, can my right hon. Friend assure the House that, at the Amsterdam summit, the next Conservative Government will veto the revised treaty if our concerns about quota hopping and the effect of the working time directive on employment are not met by treaty changes?

The Prime Minister

We have made it clear that we expect to achieve those changes. We do not expect to agree a treaty unless we obtain the changes that we seek.

Mr. Tony Banks (Newham, North-West)

We all know that the Prime Minister has double standards and that his whole attitude towards the European Union is predicated not on the national interest, but on the interests of the Conservative party, and is a way of protecting himself from the Euro-loonies behind him. We have become the laughing stock of Europe. Is that what the Prime Minister meant when he said that he wanted to put the United Kingdom at the heart and the centre of Europe?

The Prime Minister

The hon. Gentleman, of course, is a new federalist, although that is not his old position. He has clearly changed his previous electoral convictions. My conviction that what we must put forward is in the national interest has been my position from the outset. If the hon. Gentleman thinks that that is not so, I am bound to tell him that my life would have been much easier had I not taken that position.

Mr. Dennis Skinner (Bolsover)

Did the Prime Minister tell his colleagues in Dublin, on the question of surrendering large dollops of sovereignty, that a Tory Government took Britain into the Common Market in the first place, another Tory Government, whom he supported, voted for the Single European Act on a guillotine in the House and another Tory Government, led by him, signed the Maastricht treaty? Is not the truth of the matter that, in the run-up to the general election, the Prime Minister has sought to pacify some of his Back Benchers by waving the Union Jack in the hope of getting a few votes, when in reality he is no different from the Chancellor of the Exchequer, who sits beside him?

The Prime Minister

There was an intriguing endorsement in the hon. Gentleman's last sentence. No one would suggest that there is no difference between the hon. Gentleman and the Leader of the Opposition.

Mr. Skinner


The Prime Minister

The hon. Gentleman admits it. That is excellent. It will be another manifesto that we shall read with interest in our examination of manifestos.

Mr. Skinner

Answer the question.

The Prime Minister

I am about to, but the hon. Gentleman will not like the answer. As he is so concerned about dollops of sovereignty, perhaps he should state in the parliamentary Labour party his views on the dollops of sovereignty that the Labour party is committed to surrendering. They relate to social policy, industrial policy and regional policy. Would the hon. Gentleman surrender sovereignty on those issues? He would not and neither would his hon. Friends. Perhaps we should have a show of hands. [Interruption.] Every time one of 50 Labour Members stands up, the bogus view of Labour Front-Bench Members that there is unity in the Labour party is blown to pieces.

Mr. Ray Whitney (Wycombe)

An article in The Daily Telegraph today—the most sensible item in that newspaper for several years—points out that between what are described as the extremes of visionary Euro-idealism and chauvinistic Euro-scepticism lies the path of realistic British Europeanism. Does my right hon. Friend agree, and will he and his Ministers continue to follow that path in their dealings with our European partners?

The Prime Minister

I do and I will.

Mr. Nigel Spearing (Newham, South)

The Prime Minister referred to the ratification of the Europol treaty under article K.3 of the Maastricht treaty. Will he confirm that that was done entirely by the royal prerogative, with no examination by the House? On 3 December, in relation to a statutory instrument, the Minister of State, Home Office, the right hon. Member for Penrith and The Border (Mr. Maclean), said that Europol would have no operational powers in the field and would have no operational arm. Is the Prime Minister aware that this morning's communiqué on the topic says that Europol should have operational powers, which will be discussed in conjunction with the national authorities? Does he agree that that illustrates that the great danger is not from a federal state, where there is no separation of powers, but from the development of a unitary state, which will effectively eliminate the powers of this House and of the national Government?

The Prime Minister

I think that I can reassure the hon. Gentleman on the last point. The conclusions make it clear that Europol is to work in conjunction with national authorities. Its role is to assist national law enforcement agencies, not to replace them. The hon. Gentleman can be reassured on that point.

Mr. Tim Renton (Mid-Sussex)

May I congratulate the Prime Minister on the stance that he took in the difficult circumstances at the summit? Following Dublin, does he agree that, whatever the contents of a stability pact, without general and well-informed consent to joining economic and monetary union, a single currency may well prove fragile? On that basis, would he consider asking the Bank of England, which last week issued a booklet to businesses, to write an independent plain man's guide to the single currency and economic and monetary union, setting out the advantages and disadvantages for the ordinary family, and to send a copy to every household in the land?

The Prime Minister

I agree with my right hon. Friend's analysis. In the wrong circumstances, a single currency would be fragile. I understand that the Bank of England is shortly to produce another guide. Whether it will be a plain man's guide, I cannot tell my right hon. Friend, as I have not yet seen it, but I shall bear in mind his wider point.

Mr. David Winnick (Walsall, North)

Was anything said at the Dublin summit about the mass demonstrations in several member states in protest at the convergence criteria, which in many cases involve, as the Prime Minister knows, substantial cuts in public expenditure? Bearing in mind the implications for economic and political sovereignty that would arise from joining EMU on the basis of a single currency, is it not unthinkable that any such decision could be taken in the next Parliament without a referendum on the issue?

The Prime Minister

I agree with the hon. Gentleman on the last point. If a Conservative Government were to decide to go into a single European currency, there would have to be a referendum on that for all electors in the country. The hon. Gentleman is entirely right about that. He is also right to point to the concerns that exist in some member states, but I must tell him that the matter was not specifically raised in our discussions.

Mr. Edward Leigh (Gainsborough and Horncastle)

May I warmly commend my right hon. Friend's espousal of a market-driven common currency, rather than a politically driven single currency? Can he confirm that our partners will be demanding a decision from us on a single currency by the end of the coming year? Was there any discussion, informally or formally, about Italy and Belgium's debt being 120 per cent. of GDP? In the circumstances, will my right hon. Friend consider in the early summer ruling out the prospect of our joining a single currency, on the basis that the economic convergence criteria are not so much being fiddled or fudged, but trampled on in the Gadarene rush towards a disastrous single currency that Europe cannot sustain?

The Prime Minister

My hon. Friend is entirely right about what would happen if the criteria are wrong, whether it happens to be the debt criteria or any of the other convergence criteria, for that matter. I do not foresee any real likelihood that most member states will not reach the inflation criteria—I think it overwhelmingly likely that they will—but whether they will meet the 3 per cent. deficit criteria or the debt criteria is a different matter. I think that over the next few months we shall see a number of projections from individual member states about the likely deficits that they foresee for next year, which will add to our knowledge. There should also be some international examinations of international currencies, which will add a great deal to the assessment of whether the criteria will be met. I expect that, in some cases, the position will become clearer in the months ahead.

Mr. Robert N. Wareing (Liverpool, West Derby)

As the greatest danger to the sustainability of the 3 per cent. borrowing requirement for the single currency is the 18 million people who are unemployed in Europe—2 million of whom are in this country, which is in fact more than when the Prime Minister took office—is it not ludicrous to oppose the idea of co-ordinating employment policies in Europe by adhering to an employment chapter in the Maastricht treaty, which would enable this country to work with our partners at the heart of Europe?

The Prime Minister

The EU agreed in 1994 at Essen a way in which it was felt at the time we could all best tackle unemployment. That was largely by supply-side measures, of the sort with which the House has become familiar over recent years, which are generally putting people back to work. Those decisions are taken in nation states and self-evidently could not be taken at the centre. We find ourselves opposed to the prospect of Community communal decisions—almost certainly expenditure decisions—leading to larger contributions from each nation state, with the intention of creating short-term jobs. That is not the way in which to create jobs and remain competitive for the future. Although we are perfectly happy to co-ordinate, we are not prepared to have decisions taken in Brussels which will impact on the domestic decisions that we are taking to bring down unemployment.

Mr. David Wilshire (Spelthorne)

Will my right hon. Friend reflect on opinion in my constituency? I judge that there is a majority who want to stay in a Common Market and a majority who are against a single currency. I sense that every step taken closer to a single currency enlarges the minority of my constituents who want to pull out altogether, which I believe would be a disaster. Does he therefore accept that the best way in which to ensure that we stay in a Common Market is to review our policy on a single currency now?

The Prime Minister

I understand my hon. Friend's feeling and entirely agree with him that a very large majority of people in this country believe that we should stay in the EU, but share some of the unease that I, he and others have expressed about the direction and drift of some elements of European policy. I do not, however, believe that the right thing to do would be to determine that we should effectively disengage from the most important decision that Europe will take. Our input into that decision may have a material impact on whether the whole prospect goes ahead or does not if the criteria are wrong. If it went ahead in the wrong circumstances, the damage to our membership of the EU and to the EU itself might well be fatal. I share my hon. Friend's view; we are best in the EU, but not in what I called an embryo super-state. I believe that we should keep open that middle road in the interests of the UK.

Several hon. Members


Madam Speaker

Thank you. We must now move to the second statement.