HC Deb 03 December 1997 vol 302 cc396-459

Amendment proposed [2 December]: No. 3, in page 1, line 13, after '2', to insert '(except paragraph 19)'.— [Mr. Howard.]

5.50 pm

Question again proposed, That the amendment be made

The Chairman of Ways and Means (Sir Alan Haselhurst)

I remind the Committee that with this we are taking the following:Amendment No. 4, in page 1, line 13, after '9', insert '(except Article 2 paragraph 22)'. Amendment No. 59, in page 1, line 13, at end insert 'except Article 2(3)(c)'.

Amendment No. 34, in page 1, line 13, at end insert 'other than in Article 2, paragraph 19)' Amendment No. 36, in page 1, line 13, at end insert 'other than in Article 2, paragraph 22)' New clause 21—Appointments to Employment Committee— '.—Pursuant to Article 2 of the Treaty of Amsterdam, Paragraph 19 (Cmd. 3780, page 31), Her Majesty's Government shall make appointments to the Employment Committee in consultation with employers' and workers' organisations.'. New clause 27—Social Chapter: Report to Parliament— '.—Her Majesty's Government shall make a half—yearly report to Parliament on the implementation of Article 2, paragraph 22 of the Treaty setting out the United Kingdom legislation and employment implications arising from the new Employment Chapter and Social Chapter as agreed in the Amsterdam Treaty which shall be subject to resolution by each House of Parliament.'.

Mr. Mike Gapes (Ilford, South)

When we were discussing the Bill yesterday, I was trying to explain to the Committee and to Conservative Members my view that the proposals in the social chapter were an important contribution to the success of building harmony and a social partnership between employers and employees throughout the European Union. Today, I start by emphasising the fact that there are in this country many companies that were already implementing the provisions of the European directive concerning works councils before our Government signed up to the social chapter.

The European directive on works councils covers undertakings or groups of undertakings with at least 1,000 employees in 14 European Union states and the three European Economic Area states and at least one establishment employing a minimum of 150 workers in two of those member states. It therefore applies in 17 countries to multinational companies with their headquarters in the United Kingdom, or anywhere else in the world, which operate on that basis. Although employees in the United Kingdom or any other country outside the European Economic Area do not count towards the 1,000 and 150 thresholds, they were considered within the overall picture if the companies that employed them were based in the requisite number of European Union states.

The Library has produced an interesting research paper, which includes the following statement: It is estimated that, regardless of whether we are in or out of the Social Chapter, 113 UK-based companies will have to set up European Works Councils or other procedures under the Directive because of the number of their employees in other European Community or European Economic Area Member States. It is likely that most of these companies will choose not to exclude their UK workforce from any arrangements they make. Some 57 European works council agreements have already been reached in UK companies and all include UK employees. All but 6 are in companies covered by the Directive. A publication called "Bargaining Report", issue No. 167, published in December 1996, on European works councils, gives a helpful list of those 57 agreements. I shall not quote the entire list, but it starts with Albert Fisher group, Allied Domecq and APV and continues through British Airways, British Steel, British Telecom and Coats Viyella to Hanson Brick and Hanson Electrical—which is interesting, given the association of the latter two with a member of the other place—Imperial Chemical Industries, Imperial Tobacco, Laporte, Lloyd's Register and Marks and Spencer. The list continues through Reckitt and Colman, Reuters, Scottish and Newcastle and Securicor and ends with United Biscuits and Zeneca.

That interesting list shows that these matters were already influencing the situation in this country. Listening to Conservative Members yesterday, one would have thought that what was being proposed if we signed up to the social chapter was a terrible device that would destroy British business and cause great damage, and that British business strongly opposed it. In fact, those UK-based or British-based companies were already implementing the provisions outlined in the social chapter.

Mr. Giles Radice (North Durham)

Does my hon. Friend consider that one of the problems with the Conservatives' approach is that so few Conservative Members have read the social chapter? I remember reading it during the Maastricht debate and the same was true then. I saw the astonishment on Conservative Members' faces because they had not understood how little was contained in the social chapter, how much was excluded, the way in which it protected small firms and the fact that it had to take account of economic conditions. That is the problem: Conservative Members have not read the social chapter.

Mr. Gapes

I am grateful to my hon. Friend for that comment because, as on so many other connected matters, he is right. He has read the social chapter and all the other matters that we are debating in the Committee.

Mr. William Cash (stone)

rose—

Mr. John Bercow (Buckingham)

rose—

Mr.Gapes

I give way to the hon. Member for stone (Mr. Cash)

Mr. Cash

Does the hon. Gentleman accept that the problem is not the large multinational companies but the small and medium businesses? Does he accept that, if one were to draw an analogy with the United States, the key question is whether we have enough flexibility in our labour market to enable us to generate jobs of the type that are being produced in the United States and that he is misrepresenting the position? I have indeed read the social chapter.

Mr. Gapes

I am surprised that the hon. Gentleman says that he has read the social chapter. I suggest that he reads it again because anyone who has read it and the directive knows that small companies are specifically excluded. Conservative Europhobes have an amazing misunderstanding of, or deliberately misrepresent, the situation. Their stance would be greeted with hysteria among Conservative and Christian Democrat parties in all other member states of the European Union

Mr. Desmond Swayne (New Forest, West)

Is the hon. Gentleman aware that one of the fundamental problems that businesses in Germany have is the incentive to remain small—at 10 employees or fewer—precisely because of the threshold in social legislation? That is exactly the threshold the virtue of which the hon. Gentleman now extols. The consequences are dire.

6 pm

Mr. Gapes

I am sorry, but I fail to understand the relevance of that intervention to the social chapter. I presume that it relates to internal German domestic law—if the hon. Gentleman is right. I am not sure whether he is; it certainly has nothing to do with the European Union or the social chapter.

Mr. Bercow

I have listened to the hon. Gentleman's strictures on the social chapter with the greatest possible interest. What does he say about Commissioner Flynn's proposal that works councils should be established in companies with 50 employees or more? Is he opposed to it? If so, is there the slightest prospect of the Government doing something about it?

Mr. Gapes

Had this country not signed up to the social chapter, the Government could have done nothing about it. The only way this country can influence the outcome of discussions and negotiations on these matters is by being at the table—rather than opting out.

Various proposals have been suggested in a number of areas, but they have not yet come to fruition and negotiations continue. It is therefore premature and unrealistic to say that such proposals have been agreed. Indeed, only two matters are currently included in the social chapter and they relate to works councils and parental leave, which we discussed earlier. New provisions in other areas are under consideration, one of which relates to burden of proof in sex discrimination cases. As a result of the Amsterdam agreement, the Government will now have a voice in the negotiations on the final wording of that proposal.

Other proposals concern part-time workers. The Confederation of British Industry said that there should be an agreement on that. An agreement has been made among the social partners, who believe that high regard should be paid to how employers consider the rights of part-time workers. I hope that progress will be made in the not-too-distant future.

All good employers want to consult, inform and involve their employees. They regard committed, dedicated and loyal employees as vital to the success of their business. The best way to achieve that is to pay people well, show them respect and listen to them when they have views to express or grievances. Bad employers operate on the basis of driving down wages, not consulting, imposing, and acting in an autocratic and arbitrary manner. Unfortunately, if no social legislation is in place and there is no social protection or social partnership, bad employers are more likely to exist, to succeed in the market and to undercut the rates paid by good employers. That is why it is important to have a national minimum wage and the social chapter.

Mr. Andrew Robathan (Blaby)

The hon. Gentleman will be surprised to learn how much I agree with him about good employers. Almost everyone in the House agrees that any good employer listens to his or her work force. When I was on the Employment Committee, it never ceased to amaze me how many big companies, some of which the hon. Gentleman has quoted in terms of their support for the Amsterdam treaty, did not carry out such policies.

Does the hon. Gentleman not realise, however, that it is the business of neither national Governments nor the European Union to determine how an employer relates to his employees? That way goes the stifling form of government that we had previously, with beer and sandwiches at No. 10.

Mr. Gapes

That was a most interesting intervention. There is clearly a deep philosophical division between those who believe that Governments have no role in setting minimum standards and those who follow that logic and believe that everything should simply be left to the markets.

Mr. Robathan

I do not believe that.

Mr. Gapes

If everything should not be left to the market, I presume that there must be minimum standards and regulations to prevent exploitation and injustice, just as was proposed by a former Prime Minister and Conservative leader when he was responsible for wages councils in th early years of this century.

Mr. Bercow

Churchill?

Mr. Gapes

Yes. I refer to the right hon. Member who, having started off in Dundee and Oldham, finished his parliamentary career in the borough I am also pleased partly to represent—Wanstead and Woodford. As far as I know, he has not yet been expelled from the modern Conservative party.

Mr. Bercow

rose—

Mr. Gapes

The hon. Gentleman seems to be a little agitated. Does he wish to intervene?

Mr. Bercow

I should love to. We all appreciate the hon. Gentleman's genial spirit, but he is meandering somewhat. I shall rescue him with an alternative challenge. Does he think that the American model or the European model is a better route to the creation of jobs?

Mr. Gapes

I was fortunate enough to come across some interesting statistics that show that unemployment in certain European countries is falling faster than it is in the United States. Among those countries are Sweden and Germany. That clearly shows that the model the hon. Gentleman wishes to pursue—the American model—lock, stock and barrel, which has no social protection or legislation to help protect the poor, the disabled and those with other problems, is at variance with the European model, which I prefer.

If we had to choose—we do not because we are part of the process of developing a model—I would rather start with a model based on social partnership than one based on the avaricious grinding down of poor people and exploitation. The hon. Gentleman obviously prefers the other model. That is the philosophical difference between modern, hard-faced conservatism and the Labour party's one-nation approach.

Mr. Bercow

The hon. Gentleman should know by now that I am a soft-centred individual. If he is not aware of that yet, he will be in the future. May I ask a simple factual question? Does he accept that, between 1974 and 1994, 31 million new jobs were created in the private sector in the United States and that precisely none were created in the European Union?

Mr. Gapes

Those are interesting statistics. I shall check the facts when I have read the transcript of that interesting intervention. Even if they were true, which I doubt, they would be irrelevant to the argument about the social chapter, which is a recent innovation in the EU. The figures that the hon. Gentleman quotes from the early 1970s are neither here nor there. We must deal with the situation in the 1990s.

Mr. Oliver Letwin (West Dorset)

The hon. Gentleman is providing the dual benefit of entertaining the House and being patient with it. Does he realise that almost every provision to be introduced under the social chapter—one of which, incidentally, the hon. Gentleman referred to as a proposal, but is a directive that was debated by European Standing Committee B this morning—is already implemented in one form or another in most of the European states which have, as my hon. Friend the Member for Buckingham (Mr. Bercow) pointed out, produced zero employment gain over the period in which the United States has produced some 30 million jobs?

Is not the hon. Gentleman saying in effect—it is a perfectly reputable position, but it is important to bring it out—that he prefers to protect workers who are already in jobs and, if necessary, to leave many tens of millions of ordinary people out of jobs for the sake of protecting those in work?

Mr. Gapes

If it were true that those were simply matters for other European states, I would be extremely concerned. Measures can be taken by national Governments to deal with the problem, as our Government are dealing with the legacy of the past 18 years by creating the welfare to work programme and by co-ordinated activity between the member states of the European Union, which is why the employment chapter was put into the Amsterdam treaty.

There is a combination of co-operation and action at a European level and the more important national component of action to reduce unemployment. The two must go together, because we are in a single market. There must be certain minimum standards within that market. That is why the concept of the social chapter, bringing together the social partners, developed concomitant with the establishment of the single market. It is not a case of one or the other. The two go together, side by side.

I agree with the criticism that some countries have had serious increases in unemployment. Germany certainly has serious problems, some of which are undoubtedly related to the unexpectedly high costs of German unification. I remember discussing what would happen with Members of the German Parliament in 1989, 1990 and 1991. Within four or five years, they said, east Germany will be fine and everything will be great. They did not expect the massive costs of the transfer from the west to the east and the impact that that would have on their economy.

Rising unemployment in Germany is clearly related to unification, but there are other factors. We could discuss them, but I do not want to delay the House much longer and other hon. Members want to speak.

.Mr. Bercow

The hon. Gentleman is filibustering his own Bill.

Mr. Gapes

If the hon. Gentleman wants to intervene, I am happy to give way to him. Otherwise, I should be grateful if he did not make contributions from a sedentary position.

Mr. Graham Brady (Altrincham and Sale, West)

I am grateful to the hon. Gentleman for giving way. Does he believe that, when and if Europe has a single currency, there may be similar effects on unemployment in some parts of Europe as there were following German unification? What parallels would he draw between the two?

Mr. Gapes

There are no direct parallels. The argument about a single currency is for the debate on a different amendment. I would prefer not to go down that road now. I should be happy to read out the document produced by my right hon. Friend the Chancellor of the Exchequer if the hon. Gentleman so wishes, but that is a matter for a later debate.

Mr. Robathan

Why does the hon. Gentleman think that, this time, the Germans will be right about a single currency whereas they were wrong in 1989, 1990 and 1991? Could they not be wrong twice in a row? Have they only ever been wrong once in their lives, and does he take them at face value?

Mr. Gapes

We can discuss that matter in the context of a later amendment.

The Government have carried out the mandate that they got from the British electorate on 1 May, which was to join the social chapter. The Conservatives were against joining, and fought the election with a strong claim that joining the social chapter would be a disaster, yet they were resoundingly defeated. Consequently, one would expect them to display some humility and accept the fact that they lost, but we still hear the same arguments as we heard before.

Not all Conservatives take that view, however. The Conservative MEP Tom Spencer—

Mr. Radice

Good man. [Interruption.]

Mr. Gapes

The reaction from the Conservative Benches is somewhat different. Tom Spencer called the treaty a useful consolidation and clarification of the existing treaties and it should be accepted by both government and opposition in Westminster.

Mr. Swayne

Oh, that's all right, then.

6.15 pm
Mr. Gapes

That was easy. I have more quotations, if other hon. Gentlemen want to intervene. Anthony Teasdale, MEP, was the special adviser to the right hon. and learned Member for Rushcliffe (Mr. Clarke) when he was at the Treasury before the election. Mr. Teasdale wrote a pamphlet with another Conservative MEP, Mr. Brendan Donnelly. The pamphlet, entitled "What's Right with the Amsterdam Treaty", was published only in October, so perhaps hon. Gentlemen have not yet had a chance to rush out and buy a copy.

The two MEPs reject the argument that the Conservative party should oppose the Amsterdam treaty because it includes the social chapter. They state: Whatever the merits and demerits of such a move, everyone understood that it would follow if Labour were elected, Amsterdam Treaty or no Amsterdam Treaty. It is therefore perverse for critics to attack the treaty for incorporating the Social Chapter, and any criticism of this kind is likely to cut little ice with an electorate which accepted the legitimacy of UK accession by its vote on the general election of 1 May.

Mr. Swayne

I entirely accept that, but does the hon. Gentleman accept that new clause 27 acknowledges that Labour mandate? It merely puts in place a means by which the House might monitor the implementation of the social chapter.

Mr. Gapes

In which case, why is the hon. Gentleman arguing for the removal of the social chapter from the Bill? I fail to understand his argument: he wants the social chapter to be removed and to be kept in. I am a little surprised.

Mr. Radice

Perhaps the hon. Member for New Forest, West (Mr. Swayne) did not listen to the speech of the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), who made clear his total opposition to the social chapter when he moved the amendment.

Mr. Gapes

I am grateful to my hon. Friend.

In conclusion, I hope that, in a few months' time, when they have given further thought to these matters, wiser heads in the Conservative party will recognise that it is not in the interests of their party or of the country for them to keep their heads in the sand and to fail to face up to reality.

The modern world requires that Britain plays a full part in the European Union, negotiating in our national interests to obtain the best deal for our country. That is what my right hon. Friends have secured through the Amsterdam treaty and their decision to sign the social chapter.

Mr. Robert Walter (North Dorset)

On Second Reading, I made clear my opposition to the Bill for three very good reasons. One reason might be described as purely tactical: I object to the Government's failure to use the unanimity required in treaty negotiations to secure a solution to the problem of fishing quotas and the working time directive—although I suppose that the latter cause would not gain much sympathy on the other side of the Chamber.

I also oppose the Bill most sincerely because I think that it is a very mean treaty which does little to adjust our institutions to a Union of 20 or more members. The treaty barely addresses enlargement—that will require another intergovernmental conference and another treaty. Most particularly, I oppose the legislation because of the inclusion of the social chapter and the employment chapter. That is also why I shall support the amendment. Those chapters will not create a single new job in my constituency—in fact, the loss of competitiveness as a result of the measures may lead to job losses and to bankruptcies. The blame for that result will lie firmly with the Government and those provisions in the treaty. The Government's adherence—some might suggest that it is somewhat out of character—to a dogma that is both outdated and anti-competitive will cause many problems.

The hon. Member for North Durham (Mr. Radice) suggested that the social chapter contains few provisions. He even claimed that Conservative Members have not read the social chapter. I assure him that we have read the social chapter, together with some excellent research material about it.

Mr. Letwin

My hon. Friend may be understating the position. Does he agree that, in all probability, the hon. Member for Stone (Mr. Cash)—and perhaps also he himself—knows the social chapter by heart?

Mr. Walter

I shall not recite the social chapter to the Chamber this evening, although I shall allow other hon. Members to do so if they wish. At the time of the Amsterdam conference, that empty box—as the social chapter has been called—contained only two specific provisions on works councils and parental leave. My question is: for how long?

United Kingdom business practice does not follow the European social model. Our business practice is viewed on the continent as more competitive and a threat to European businesses. When the Amsterdam treaty was signed, the works councils directive applied to firms with 1,000 or more employees. The Commission now proposes to reduce that number to just 50 employees. Conservative Members regard flexible labour markets as critical to the future competitiveness of British industry. We occasionally hear such thoughts echoed among Labour Members, but there is little in this measure that would lead to flexible labour markets continuing on their current basis in this country.

Unemployment in Britain today is significantly lower than in any of our major European competitors. The flexibility created in the labour market by the previous Government means more jobs and a wider range of jobs. In our flexible labour market, more people can find a way of working that suits them. Is it a coincidence that the United Kingdom, which has the most deregulated labour market in Europe, also has more people in work than any other major country in the European Union?

In the past 20 years, Europe has seen the consequences of inflexible labour markets. Britain's more flexible labour market has ensured that unemployment is below that in Germany. United Kingdom unemployment stands at 7.1 per cent. In Germany, unemployment is 9.9 per cent; in France and Italy, it is 12.5 per cent.

Mr. Radice

I shall test the hon. Gentleman on the social chapter. Has he read the last sentence in article 1 or the last sentence in article 2.2?

Mr. Walter

I have indeed, but I do not believe that either article mentions the unemployment rates in Germany, France, Italy or the United Kingdom—which is what I was referring to.

I believe that the best way to help the unemployed is to improve their chances of getting a job. It is no secret that Britain's competitive position in world markets, its attractiveness to foreign investment and its low cost base are due to low social costs. In fact, Britain's social costs are lower than those in most other competitor countries. Thanks to the policies of the previous Government, the United Kingdom has a much lower level of statutory non-wage costs than any of our major competitors. Our hourly labour costs in manufacturing are significantly lower than those in any other G7 country.

For every £100 that is spent on wages in the United Kingdom, an employer must add approximately an extra £15 in non-wage costs. In Germany, the employer must add an extra £31; in Spain, it is an extra £34; in France, an extra £41; and, in Italy, an extra £44. Nevertheless, when the cost of living is taken into account, real take-home pay for manufacturing workers in the United Kingdom is higher than in either France or Italy.

If the social chapter is an empty box, as has been claimed, will those non-wage costs creep into labour costs in the United Kingdom? The European social chapter is the means by which the European social model in labour practices will spread across the channel.

Mr. Radice

Has the hon. Gentleman read article 2.3 of the social chapter? He will see that there is a British veto if it is a question of —social security and social protection of workers; —protection of workers where their employment contract is terminated; —representation and collective defence of the interests of workers and employers… —conditions of employment for third-country nationals… —financial contributions for promotion of employment". The terrible fears to which the hon. Gentleman refers may never be realised. He simply has not read the social chapter.

Mr. Walter

With the greatest respect, I have read the social chapter. My fear is not that the British veto might not exist in such matters but that the Government would be perfectly prepared, in their enthusiasm, to allow those costs to spread across the channel. I have heard nothing in the debate so far to suggest that Labour Members would be anything but enthusiastic about that spread of European social practice.

I referred earlier to the works councils directive. At the time of Amsterdam, it applied to companies with 1,000 or more employees, but the Commission now proposes to reduce that to 50 employees. In Germany, that kind of structure applies to firms with just five employees in some cases. In larger German companies, up to half the seats on the supervisory board must be reserved for employee representatives. The hon. Member for North Durham frowns. I believe that those non-wage costs would creep into the social chapter and come hurtling across the channel.

In many of our continental partners, the heavy hand of the state is present in the labour market. In the Netherlands, an employer must apply to the employment service before he can dismiss an employee. In Belgium, planned overtime must be notified to the authorities in advance. One can go around Europe on a tour of anti-competitive labour practices, but perhaps the star prize should go to Sweden, which offers an aggregate 450 days paid leave to parents, following the birth of a child.

6.30 pm

1 do not suggest that any of those practices are currently in the social chapter, but the excellent research paper provided by the House of Commons Library, entitled "The Social Chapter"—this is proof that some of us on the Opposition Benches have read not only the social chapter and the treaty but some of the background material provided by the Library—lists current issues in European social policy: working time, maternity leave and pay, young workers, European works councils, parental leave, part-time and temporary workers, posted workers, transfers of undertakings, consultations with workers, redundancies and transfers, worker information and consultation, onus of proof, equal treatment, positive discrimination, sexual harassment and equal treatment in occupational social security. Then there is a delightful heading, "Further Reading".

In my constituency, just how many new jobs will be created from signing the social chapter? Or—if Ministers have done their research—how many jobs in my constituency will be destroyed as a result of the Government's plan for a statutory minimum wage, which is not even part of this debate but can only compound the problem?

I regard myself as a good European, but I have no problem whatever in opposing the social chapter and the employment chapter as being bad for Britain and bad for Europe.

Mr. David Heath (Somerton and Frome)

New clause 21 stands in my name and that of my hon. and learned Friend the Member for North-East Fife (Mr. Campbell). It is a very modest proposal, simply requiring the Government to do what they should do: consult employers and workers' organisations before making appointments to the Employment Committee. I know that the Government have regular consultations with employers' organisations, and I hope that they also have regular meetings with workers' organisations, so the new clause poses no practical difficulties.

I hope that it will not be misinterpreted when I say that we on the Liberal Democrat Benches are a little cynical about the Employment Committee and do not feel that there is a role for discussing employment opportunities and the creation of jobs with our European partners, because we believe that it is a proper matter for the European Union to discuss. However, the Employment Committee may prove to be—we shall have to wait and see—yet another talking shop that achieves very little. If that happens, it will be regrettable, but if it enables a proper dialogue to take place between the representatives of industry and commerce in this country and those in continental Europe, who may take a slightly different view about the best way to proceed towards job creation, that must be a good thing.

I was interested in the earlier discussion across the Chamber about the contrast between the Anglo-Saxon and continental models. When the Prime Minister and his colleagues spoke about these matters in the various Councils of the European Union, I thought that he suggested that the Government were for flexibility nowadays. I thought that they were for the Anglo-Saxon model of job creation, which is, perhaps, not as untamed as the American model. We have no problems in agreeing with that. We believe that the key elements for job creation are completing the single market, maintaining deregulation and flexibility in the labour market and reducing labour costs. Those should be promoted within the context of the European Union.

There is clearly a dichotomy of thought on these matters between the British position and that of some of our European neighbours. Indeed, it characterises what we do in this country, and the Anglo-Saxon tradition. I know that there are strictures in this place about using foreign languages, so I shall not use the term in the original, but it translates as "hard capitalism" or "savage liberalism". The concept of "savage liberalism" is obviously absurd; nevertheless, the term is used in France and elsewhere. It is important that we engage in the debate. If the Employment Committee can play a part in ensuring that the British point of view is very much to the fore in the debate, that seems to be a worthwhile objective.

I do not need to detain the Committee further. The new clause would simply ensure that the Government consulted before making appointments to the Employment Committee. Not all Governments have always consulted widely before making appointments to the Employment Committee. It is to our advantage to see that this measure is clearly stated in the Bill and is used as a precedent for other appointments that the Government may wish to make.I hope that the Minister will be able to accept the new clause, or at least accept its spirit, and satisfy us that the Government's intentions on this matter are quite clear and that consultation will take place.

Mr. Brady

I apologise for having missed the beginning of the debate, and, if I may, I shall recount a small anecdote that relates to European matters. I was detained by a Standing Committee that was considering rather arcane matters of copyright law. That provides a perfect illustration of the dangers of allowing any further extension of qualified majority voting, given that, in the very important matter of preserving and protecting databases—an industry in which the UK has more than 50 per cent. of the European market, and which is far more important to the UK than to any of our partners—the British Government were forced to accept that the database would be protected for only 15 years, rather than 25 as we had first wished. I shall not linger on that. I just thought it an interesting illustration of the dangers of allowing control over our legislative processes to leave our shores.

I am particularly grateful to the hon. Member for Ilford, South (Mr. Gapes)—who has left his place after a splendid speech—because of the clear and frank way in which he set out his objectives and beliefs in higher social costs. It is a legitimate debate which we used to have with the Labour party when language was used in a more straightforward way, in the days when people always used to say what they believed rather than sometimes hiding behind slightly different permutations of language, which seems to be the current fashion.

This point might help the hon. Member for Somerton and Frome (Mr. Heath) to understand some of the rather puzzling differences between the sounds that emerge from the mouth of the Prime Minister and what the Government are doing when they negotiate on our behalf in Brussels. I fear that in European matters, as in matters of domestic interest, words do not always mean what they purport to mean. That is a subject to which I shall return.

The way in which the Government presented the treaty to the Committee—indeed, to the country—was a fascinating illustration of the way in which they seek to present themselves and sometimes present minor achievements in negotiations as great triumphs. They presented the treaty as a triumph for the role of the member state, and as a triumph for business. They held it out as an example of a great new understanding of the way in which markets work. Closer inspection of the treaty and of the Bill shows that none of those claims is true.

Article 127 of the treaty incorporates the goal of high employment levels across European Union countries. The Government would have us believe that they are seeking to provide a business-friendly, less regulated environment that will enable higher levels of employment to be achieved. It will be a new environment that provides flexibility and all the elements of the Anglo-Saxon model to which the hon. Member for Somerton and Frome referred.I fear that that is not strictly reflected in any accurate assessment of the treaty.

One hopes and expects that the Labour party and the other European members states will recognise and understand that the Anglo-Saxon model is more effective in generating employment and in providing an environment in which business can succeed. The average rate of unemployment in the European Union is about 10.8 per cent., compared with 7 per cent. in the United Kingdom. Other European countries should see the wisdom of following the UK model.

The International Monetary Fund has criticised the lack of flexibility in other European member states and the sclerotic state of continental labour markets. It has called for comprehensive reform of policies and institutions affecting the labour markets in continental economies. On the other side of the equation, it has praised the United Kingdom for the policies that have been so successful in building our economy and our labour market, and have allowed businesses to succeed.

I must again refer to the use of words. The Government's practice is to use words cleverly—by that, I am not implying any great compliment—which sometimes misleads the public. That can be difficult for Opposition Members. The Government sometimes mean the opposite of what they seem to be saying. A clear example is what they say about the employment chapter and the social chapter.

At the same time as Europe is apparently calling for greater flexibility and is accepting that labour markets need flexibility, it is also saying that we need co-ordinated flexibility. That is an oxymoron: it suggests that the only way to achieve the free, open labour markets that businesses require is to have a central plan co-ordinated from Brussels that establishes a blueprint for business. It shows that the Government and many of our European partners have little understanding of the way in which markets and business work.

Mr. Vernon Coaker (Gedling)

Does the hon. Gentleman agree that we have not a central plan, but a co-ordinated strategy? We are not dictating to people, but working together to achieve common goals.

6.45 pm
Mr. Brady

I thank the hon. Gentleman for his point. I fear that the treaty is open to different interpretations, given the way in which it has been drafted, and the Commission's view of its effect in practice. The public relations information that has been put out gives the impression of a co-ordinated strategy, but I do not believe that that is the truth of the treaty.

The treaty sets out a new area of EU expenditure. Article 129 deals with incentive measures. Although it does not implement a rigid blueprint that must be accepted by and imposed on all member states, it gives the Commission the power to direct those incentive payments towards the member states that do the bidding of the Commission or of the majority in the European Union. Because of the different employment practices in this country compared with those in much of the rest of Europe, there is a great danger that incentive payments will be directed elsewhere rather than to the more flexible and effective UK economy.

Article 130 establishes a new Employment Committee. That is another way of centralising, controlling and creating uniformity across the member states, and lies uneasily with the suggestion that there is a drive for greater flexibility in European labour markets. I believe that it is a blueprint for harmonisation of employment law. The hon. Member for Ilford, South hinted at that, and it comes back to economic and monetary union. It is widely accepted that economic and monetary union will require fiscal harmonisation to avoid competitive tax rates. Similarly, many people in the European Union believe that lower social costs attached to business gives an unfair competitive advantage. They may give a competitive advantage. They certainly give British business a competitive advantage at the moment, which is one of the reasons why our unemployment rate is so much lower than that of many of our European partners.

Mr. Bercow

I entirely agree with my hon. Friend. Is he aware that the 1989 social charter, to the principles of which this country is now committed, refers to leave that must "progressively be harmonised"? Does he agree that that is not only consistent with what he is saying, but is in direct conflict with the point made by the hon. Member for Gedling (Mr. Coaker)?

Mr. Brady

I thank my hon. Friend for his contribution. With customary eloquence and clarity, he has put the point rather better than I did.

The approach to harmonisation that seems to have escaped Labour Members is clearly set out in the treaty. The Commission will produce guidelines, which will be agreed by qualified majority voting, so the British Government will have no right of veto. Those guidelines may be contrary to the practice of employment policy in this country. I understand that the guidelines will be approved in the next couple of weeks, or so the Social Affairs Commissioner expects. Member states will then be called on to establish national action plans. At that point, I might agree with the hon. Member for Gedling, because member states could be asked to produce national action plans. However, the treaty does something entirely different: it requires those action plans to come back to the centre.By qualified majority voting, the institutions may make recommendations to member states that could be contrary to the policy, practice or intentions of our elected Government.

It is slightly disingenuous to suggest that the treaty is a decentralising measure which gives greater freedom and flexibility. It does not. Article 127 states: The Community shall contribute to a high level of employment by encouraging cooperation between Member States and by supporting and, if necessary, complementing their action. That puts an obligation on member states to complement what other member states are doing. That is a very interesting treaty obligation. It does not suggest that the United Kingdom or any other member state could operate its own, independent, flexible labour market conditions. The treaty clearly intends to create a single entity in European labour policy, whereby member states should seek to improve not their own competitive position, but that of the European Union.

Some people may say that that is all very well—if we raise standards in the EU as a whole, that is a good thing. Of course it is, but I question, first, whether it is possible to raise standards in the EU as a whole by placing social costs on business throughout the EU and, secondly, whether it is in the UK's interests to sacrifice its more competitive social costs.

Buzz words appear throughout the employment sections and the rest of the treaty: employability, entrepreneurship, adaptability, equal opportunities and flexibility. Most of us would happily agree with all those things, but, on Monday, I had the great advantage of joining members of the Select Committee on Education and Employment on a trip to Brussels to meet Mr. Flynn, the Social Affairs Commissioner. I had the opportunity to question him on what some of those words mean. Again, I heard a different interpretation of English language, which is the result of far more than the distance of the Irish sea. Indeed, some of my antecedents come from the same emerald isle.

I was filled with admiration for the way in which Mr. Flynn avoided my questions, but some remarkable things emerged. Talking about flexibility and adaptability, I put the question to him directly: does focusing our policy on flexibility and adaptability to improve employment conditions throughout Europe mean that we have seen the last of Europewide harmonisation, through directives such as the working time directive, which increased social costs throughout Europe? "No," said Mr. Flynn, so there is no question about that.

Then I pursued Mr. Flynn on the question of flexibility. "What does it mean?" I asked. He said, "We are talking not about flexibility"—I hope that the Committee will be grateful for the fact that I am resisting the temptation to impersonate him—"but about positive flexibility." I pursued him a little on the definition of positive flexibility. I only wish that, on a Wednesday, we had the opportunity to pursue the Prime Minister in the same open way, so that he actually gave answers and the details behind the policy, which sometimes give the game away, rather than just words, which sometimes obscure the meaning.

It emerged that positive flexibility can mean more, not less regulation. Notably, Mr. Flynn gave one example: under its new flexibility policy, the Commission would, as a matter of urgency, be pressing to remove the current exemptions from the working time directive. Therefore, particularly in relation to transport work, flexibility in the context of the Amsterdam treaty means increased employment costs and more restrictions on working hours. It also means bringing forward the directive on part-time work as a matter of urgency. Again, sometimes, the interpretation of the treaty by Ministers and by those far more senior people in the hierarchy—the Commissioners in Brussels—is different from that commonly understood from their use of words.

Employability is difficult to define, but I am not sure that I even understood the definition that the Commissioner gave. He said that, rather than use the word "employability", he would prefer to use the term "partnership gap". In that instance, I was completely floored. I cannot say what it meant: it did not appear to have any meaning whatever.

I return to the incentive payments and the way in which it is possible for the Commission and the European institutions to force member states into line in the interpretation of social and employment policy. It is important to note that, in the new round of structural fund expenditure, 10 per cent. of the funds—a lot of money—will be kept in a reserve fund. It seems that that will be spent in member states that perform according to the Commission's wishes: the Commission will spend money in member states that perform well according to the treaty standards in article 127.

Why will that money be reserved? Is it to reward countries that do something that is not in the guidelines set out by the Commission, but that—as with the UK—achieves better results than countries that do? Or is it to encourage—or support perhaps—countries that find that their economies are less effective and that have lower employment, precisely because they observe the terms of the Commission guidelines? It is clear that the Commission will not be rewarding countries that adopt a freer, more flexible approach.

The policy set out in the treaty will not lead us towards a more flexible employment model or to more job creation, on which the UK has an excellent record. I asked Mr. Flynn for an example of a country that best summed up his model of positive flexibility. I had in mind the UK, which has of course a much better unemployment record than most other member states, or even—this was perhaps a little hopeful—the United States, but he held out Denmark as the best example of flexibility to which we should all lean, a country which has extraordinarily high taxation and social costs attached to business.

That brings us back to the central point. What is being sold to the British public is not identifiable from the words that are attached to the treaty and from the way in which they are expressed. That is worrying. It is not a great example of democracy in action.

The only reason why there needs to be a co-ordinated employment policy throughout the European Union involves something that we may discuss later: European economic and monetary union. If EMU exists in parts of the continent of Europe and there are economic shocks that affect employment, a centrally directed mechanism will be needed to change policy and to alleviate some of the problems that EMU will cause.

Mr.Stephen Pound (Ealing, North)

I have been educated and informed this evening, but I confess to being a little confused on occasion. As the debate has veered between the philosophical and the specific, a theme seems to have emerged from the Conservative Benches: by definition, all regulatory provisions are anti-competitive and bad for business. That assertion is absolutely extraordinary and completely at odds with the proud history of the Conservative party, particularly in the 19th century, in which I am sure many Conservative Members wish they were living. The Conservative party has been proud to intervene. It has appreciated the fact that the free market has to be regulated in everyone's interests.

It may be because I am to leave shortly for a dinner at the CBI—[HoN. MEMBERS: "Ah."[I am sorry, but it comes with the turf with new Labour. I am not sure what CBI stands for, but inevitably I have had to do some preparation and I spent last night wrestling with Adam Smith. In "The Wealth of Nations", we find time and again that the apostle of the free market never intended that labour markets should be completely untrammeled—that markets should be completely free. The hidden hand of the market may be excellent in relation to consumer choice, but it is not the way to run a country in the interests of all its citizens.

The Government recognise that not only business but workers have a crucial role to play in the conduct of our economic affairs. Workers, too, have the right to have their voice heard.

Mr. Letwin

I wish to spare the Committee possible trial and tribulation. I take it that the hon. Gentleman intends to argue why the provisions should be included in the treaty and why there should be European legislation on the matter, rather than whether there should be national legislation on the matter as he appears to be doing.

Mr. Pound

The hon. Gentleman may be assured that eventually I will reach the very point to which he refers. I simply wanted to respond to what appeared to be, if I may be forgiven for saying so, almost inherent anti-Europeanism.

Mr. Cash

Does the hon. Gentleman recall that Adam Smith's great work was in fact "The Wealth of the Nations—"nations", not the European Union?

Mr. Pound

I thank the hon. Gentleman for that information, which I will add to the small store of knowledge that I have accrued in the short time I have been in the House. I was under the impression that the work was called "The Wealth of Nations", but I understand that Adam Smith originally wrote it in Scottish so it may possibly have lost something in translation when we first read it in Fulham.

7 pm

We have heard about things hurtling across the channel like V Is or doodlebugs. That to me is indicative of what I called the inherently anti-European emotions that we have heard from Conservative Members. Indeed, I feel that if someone offered some Conservative Members a Christmas pudding for nothing and it was revealed that it had been boiled in Brussels they would strike it from the hand of the donor, and should there be French brandy on the Christmas pudding it would be drop-kicked into the Thames without a second thought.

Mr. Brady

rose—

Mr. Pound

I give way to the expert on Christmas puddings.

Mr. Brady

It is bizarre that the hon. Gentleman accuses us of being anti-European when he raised the subject of Vls or doodlebugs.

Mr. Pound

To be aware of the history of our nation is not to be pro or anti-European but merely to be fairly well educated.

Mr. Bercow

I fear that the hon. Gentleman is working himself up into a lather of excitement before a good dinner. I am enjoying his speech, but I fear that he has started on an unfortunate note. He referred to the CBI. Does he acknowledge that the CBI is not Euro-sceptic, but is opposed to the social chapter and to the Government's policy in relation to that because it knows that the social chapter will damage the cause of British business and British employment?

Mr. Pound

I thank the hon. Gentleman for that intervention, but that is not my understanding of the current position of the CBI. I am confident that after the port and cigars have been passed around tonight and we have had the opportunity to discuss the matter the CBI will be as much in favour of the social chapter as I am.

The two main subjects under discussion—the social chapter and the employment title—have been described as empty boxes. Various other metaphors—[Interruption.] I am sorry, Mr. Lord. I thought that I was being told to shut up. There were gesticulations from behind the Chair. As someone who is fairly new to the ways in which this place operates, I thought that it might mean that I was committing some social solecism.

The new provisions on social affairs and employment are not empty boxes but some of the most important provisions of the Amsterdam treaty. I cannot understand why Conservative Members do not appreciate how much those two specific aspects concern the people of Europe and Britain. It is not for me to speak for the Government, and it will doubtless never be my place to speak for the Government, but were I able so to do I would say that we welcomed those provisions whole-heartedly. By bringing the social chapter into the treaty, we have made it clear once and for all that British workers are worthy of the same rights and protection as their European brothers and sisters—and about time, too. I believe that Mr. Bercow is about to rise.

Mr. Bercow

Will the hon. Gentleman answer the question that the hon. Member for Ilford, South (Mr. Gapes) declined to answer? Does he believe that the American model is a better route to job creation than the European model, or does he believe that the European model is better? There must be an answer.

Mr. Pound

I apologise for referring to the hon. Member for Buckingham (Mr. Bercow) by his given name. I appreciate that that is not done, and I will not do it again. My hon. Friend the Member for Ilford, South (Mr. Gapes) is more than capable of speaking for himself. We have heard much about the Anglo-Saxon model, but our concern tonight—as a European country, which we are, and in Europe, where we are—should be with matters European. Whereas it might be interesting from an abstract point of debating style to compare our economy with that of the United States, that is not the business before the Committee.

For once, we are recognising that British workers are entitled to the same protection as their continental counterparts, but Conservative Members are telling us that if we adopt those basic rights—the litany of which was read out as though it were some invocation or mediaeval curse rather than a basic framework and structure of protective regulations—it will make us uncompetitive. We can bandy statistics all night, but my belief—and, I believe, that of Labour Members generally—is that that is simply not the case.

The flexibility that has been mentioned today is in many ways underpinned by security at work. If there is one thing that cuts to the heart of the issue, it is that insecurity at work, untrained staff and people without the necessary flexibility cannot service a modern economy. The social chapter will itself underpin the strength of the British economy and the continuing reduction in unemployment.

Mr. Brady

I am most intrigued to know whether the hon. Gentleman is suggesting that measures regarding job security and tenure will be forthcoming under the social chapter. We hear so often that there are only two measures in the social chapter. Is he suggesting otherwise?

Mr. Pound

I was perhaps speaking in the abstract. It was said that in Holland, I believe, one has to notify an agency if one intends to dismiss a member of staff. That is completely incorrect: one simply has to notify the employment agency that a vacancy exists. Speaking as an individual, I should be perfectly happy for a provision offering tenure at work to be implemented, but that is not what we are debating.

What we have heard tonight might lead us to believe that a terrifying vista or horrifying European nightmare of regulation is, if not hurtling across the channel, at least oozing under the door of the Chamber. Yes, there have been times when some of our European partners believed that regulation per se was the answer to Europe's social and employment problems. That is no longer the case.

Nowadays, there is a different attitude in Europe, and we owe it to ourselves, our constituents and the House to be part of that new attitude in Europe, not to be constantly cavilling at the perimeters and making the accusation that by providing the basic rights contained in the employment title and the social chapter we shall lose what we have gained over the past few years.

By signing up to the social chapter we now have a voice in the wider debate on employment, social rights and competitiveness. The previous Government—doubtless for excellent reasons and nothing whatever to do with internecine warfare—denied themselves the opportunity to be involved in the discussion. Almost by definition, they adopted an isolated and extremist position

Mr. Letwin

Will the hon. Gentleman explain what he means by the interesting notion of our having the opportunity to take part in the discussion and having a voice? Will he relate it to what happened this morning in European Standing Committee B? The Committee considered three directives and was told specifically that the Government had failed to analyse them but felt that they had to sign up to them. What does the hon. Gentleman believe to be the characteristic of sitting at the table and having a voice if that voice is constantly contradicted by a large number of voices across the table?

Mr. Pound

I cannot comment on what the hon. Gentleman got up to before lunch today because I was not there and I have not seen the video, but the jobs summit provides a good example of our voice being heard. The Government's input and emphasis on promoting employability and adaptability was accepted by the rest of the people at the summit. With the greatest respect, I cannot see that that degree of agreement would have been reached by any previous Government. I freely confess to a complete lack of knowledge of what the hon. Gentleman mentioned, but if he would like to give me details of his movements before lunch I will be happy to discuss them later.

The UK Government insisted that the employment title recognise that the key to a high level of employment is a skilled, trained and adaptable workforce and labour markets responsive to economic change". That, too, has been copied by our partner nations in Europe. We are at the table and what we are saying is being listened to, respected and adopted by many of the other nations.

Mr. Tim Collins (Westmorland and Lonsdale)

The hon. Gentleman is making a strong case against the United Kingdom having an opt-opt on anything at any stage, because, he says, we should be present at the table and in a position to influence the debate. Why are the Government therefore so proud of the opt-out that the Prime Minister says that he secured—although it was secured by the previous Government—over border controls? Should we not be at the table on that matter, playing our happy part as part of the European family?

Mr. Pound

We have not exercised that opt-out in discussions on the employment title and the social chapter. I have a personal view on the Schengen situation that is shared by many hon. Members on both sides of the House. As a loyal supporter of the Government, however, it would not be appropriate for me to mention that view now. [HON. MEMBERS: "Oh?"]Conservative Members cannot split Labour Members on the issue with the ease and frequency with which they split themselves.

Mr. Letwin

I am most grateful to the hon. Gentleman for his patience in taking interventions, but I think that he has failed to realise the force of the question asked by my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins). He asked not about the hon. Gentleman's views on Schengen but about the structure of his argument. So far, the hon. Gentleman has made an argument in favour of certain types of social legislation; the House understands that. Such legislation could be enacted domestically. The only argument that he has made so far in favour of incorporating such provisions in the treaty—and, more specifically, incorporating the treaty into English law—is that we should have a voice at the table. If that is a general principle, it should extend throughout the scope of European legislation. He must therefore—I hope—be about to present some other argument for incorporating into English law the provisions dealt with by this group of amendments and new clauses.

Mr. Pound

I should have hoped that it would be self-evident that in both this and the next century employment patterns are and will be multinational rather than merely national and that we have to view our employment and social legislative practices in the European context. I should have hoped that that was self-evident.

Mr. Letwin

I am tremendously grateful to the hon. Gentleman, and I assure him that I will not intervene again in his speech. In claiming that we have to take a European view, however, he has now hit the nub of the issue. Will he admit that we are part of a global marketplace and that the real competitive threat faced by all Europe is a global threat, especially from the tiger economies?

Mr. Radice

Tiger economies?

Mr. Letwin

Yes, the tiger economies: notwithstanding their current difficulties, they will beat the British and the rest of the Europeans hands down if we cannot match their practices, practice for practice. Does the hon. Member for Ealing, North (Mr. Pound) agree that we are part of a global marketplace and not merely part of the European marketplace?

Mr. Pound

I should hope that all hon. Members realise that if global competitiveness has proved one point-especially in the part of the globe that the hon. Gentleman mentioned—it is the necessity of a strong trading and economic bloc, of which Europe is the exemplar. I do not wish to go into the entire debate on economic and monetary union, although I should be happy to do so if Conservative Members so wish, but it makes sense—if for no reason other than defensiveness—for us to be part of a strong united Europe. The day of the former tiger economies—currently the stuffed pussy-cat economies—may return, and their cause may re-emerge. That is all the more reason for us to be strong in Europe and not to be where the previous Government chose to be—on the periphery.

Several hon. Members

rose—

Mr. Pound

Mr. Lord, will you advise me on whether I am able to give way to three hon. Members at once?

The Second Deputy Chairman of Ways and Means (Mr. Michael Lord)

The hon. Gentleman will have to decide on one hon. Member

Mr. Pound

What a pleasure it is to see the hon. Member for Aldridge-Brownhills (Mr. Shepherd).

Mr. Richard Shepherd (Aldridge-Brownhills)

I realise that the hon. Gentleman believes in high employment levels and that he holds that as a valuable and important objective of the current Government. Can he not appreciate, however, the concern of the many Conservative Members who fear the institutional arrangements that we are debating? Conservative Members have no objection to social progress as the hon. Gentleman has outlined it—the Conservative party's history is one of social progress, such as "the widow's shilling", under Chamberlain—but what will the hon. Gentleman do when there is a genuine belief that the specific route or measure being proposed by the European Union conflicts with the objectives of the Labour Government in maintaining a high employment level? What will he do if he has to deal with a law that is superior to anything that he will be able to affect through the Labour Treasury Bench? That is the conflict and the resolution that we are trying to identify. My hon. Friend the Member for West Dorset (Mr. Letwin) has implied that we could enact the social provisions domestically, so that we are not ruled or governed in circumstances in which the judgment of elected Members of Parliament is in conflict with the views of the European Union.

Mr. Pound

I have strong admiration for the hon. Gentleman, who has been consistent in his views, which have earned him great admiration both among hon. Members and from the public. In response to the points that he made, I would point out that we still have the veto. If we accept that the only way of achieving economic success is constantly to undercut working terms and conditions and to drive down wages, we do not need regulation or the social chapter—but that way madness lies. We must consider the health of the entire nation, not just the health of the employing section of the nation. My hon. Friend the Member for Ilford, South specifically dealt with the points made by the hon. Member for West Dorset (Mr. Letwin), with far more elegance and brevity than I could manage.

7.15 pm
Mr. Bercow

I am richly enjoying the hon. Gentleman's speech, but he resembles nothing so much as a shifting goal post. Let us try to identify exactly where he stands. He regards himself as a good European. Does he therefore believe that holiday pay throughout the European Union should be harmonised under the provisions of the social chapter—yes or no?

Mr. Pound

There is much evidence to suggest that what those using the Anglo-Saxon model might regard as excessive holiday pay, particularly in Germany, is being harmonised from within Europe. Across Europe, such forms of harmonisation are the precise results of Maastricht. I believe that workers deserve a break. Perhaps holidays do go on too long in some parts of Europe, but I will not name any specific countries.

Before my soup gets cold—it may well already be cold as it is quite a fashionable dinner, I am told—I should like to make my final points. The new social and employment provisions provide an excellent basis for improving prosperity, tackling unemployment and tackling the issue that has been raised only peripherally in this debate: social exclusion. Across Europe, we must consider the issue of social exclusion. The social chapter goes a long way towards incorporating that concern and that philosophy into the heart of our Government's actions.

As hon. Members are well aware, the social chapter provides a mechanism for agreeing Europewide standards for minimum levels of fairness at work. What on earth is wrong with that? How can anyone carp and cavil at that basic demand? Do people oppose it only because it is pan-European? I should hope that anyone who cares for the people whom they represent would be a strong supporter of it.

The Government went to Amsterdam determined to put jobs at the head of the EU agenda and to bring the social chapter provisions into the treaty. As one of the humblest and most obscure Government Back Benchers, I am proud of what the Government achieved in Amsterdam. I am utterly convinced that the way forward in achieving an inclusive, economically successful, low-unemployment nation within the rest of Europe is precisely as delineated in the two issues that we are debating today.

Mr. Cash

After that robust knockabout by the hon. Member for Ealing, North (Mr. Pound), perhaps we should return to some of the more fundamental questions in examining the nature of the provisions. I have heard much talk about relative hourly costs for production workers, and I thought that it might be useful to mention the most recent figures comparing costs in, for example, Germany, France, Italy and the United Kingdom. On a baseline figure of 100 for hourly labour costs in 1997, the figure for Germany is 145, for France it is 93, for Italy it is 92 and for the United Kingdom it is 80. That gives one a simple snapshot of the differentials between wage rates in other countries under the provisions of the social chapter and the kind of manoeuvring that is taking place with a view to trying to undercut the United Kingdom. Fundamentally, that is what the issue is mostly about.

Let no hon. Member imagine that the arrangements for the social chapter have been designed simply to enhance the benefits of those in other parts of Europe. There is an ulterior motive to ensure that higher labour costs are applied in the UK so as to raise our wage levels and put us—from the point of view of other European countries—on more of a level playing field. For the UK, the bottom line is that we have a substantial differential advantage at the moment, which is one of the reasons why we are doing relatively well.

The same argument applies to the minimum wage, to which the Government are committed. The figures for the Liverpool model, which I have been given by Professor Patrick Minford, suggest that the direct effect of the proposals would be to raise the pay of low-paid men by 21.6 per cent. on average, and that of women by 25.6 per cent., an overall weighted average…of 24.1 per cent. That would mean a substantial increase in costs to the UK.

Mr. Radice

Pay is excluded from the social chapter.

Mr. Cash

Yes, but the hon. Gentleman knows perfectly well that the Government are introducing proposals for a minimum wage. That is what I am dealing with. The hourly rate at which the Commission arrives has to be reflected by movements similar to those in respect of the code of conduct for what is described as "harmful tax competition", which is the new method whereby the Commission achieves a degree of harmonisation across the board—achieving in national legislation proposals which are commensurate with the kind of playing field that the Commission wants to create in Europe as a whole.

On the costs of the social chapter, Professor Minford points out that general gross domestic product would be depressed by a staggering 20 per cent., with consequences for unemployment that the model cannot effectively quantify, so far is it from even the worst United Kingdom experience. That is devastatingly bad news. If the Government want to challenge the Liverpool model and the arguments of Professor Minford, I have no doubt that he would be only too delighted to take them on. He says: In the case of the weakest combination, the damage to output is estimated at 9 per cent. and unemployment increases by 3 million (10 per cent. of the labour force). That is published information—[Interruption.] It is all very well for the hon. Member for North Durham (Mr. Radice) to laugh. As Chairman of the Treasury Committee, he may wish to ask Professor Minford to appear before the Committee and to examine such questions. That would be the responsible way of going about the matter, rather than proceeding on the basis of the advantages that claimed for the social chapter and the arguments that go with it. I suggest that there should be a proper debate rather than the kind of banter that we heard during the speech of the hon. Member for Ealing, North.

Mr. Radice

I am sure that members of the Treasury Committee would be delighted if Professor Minford appeared before the Committee when we consider issues such as economic and monetary union. No doubt he would talk about the issues to which the hon. Gentleman has referred. Of course, models depend on what assumptions one feeds in: if one feeds in incorrect assumptions, one gets incorrect results.

Mr. Cash

I would say much the same of reports that have poured out of the European Commission such as the Cecchini report, "One Market One Money," and all the other junk that has been generated. They have effectively been written backwards because all the Commission ever wanted was to arrive at the conclusions from which it started. That is the worry. I would agree with the hon. Gentleman if he were prepared to conduct a completely objective analysis in the Treasury Committee. I suspect, however, that he has been appointed Chairman of that Committee precisely because the Government do not want an objective analysis. The hon. Gentleman is well known for coming from where he started, and I assure him that I know where he will end up.

I come now to questions on the impact that the process towards European economic and monetary integration has had on the British economy, the consequences of the exchange rate mechanism and the advantages that we have had since we came out, which I am sure that the hon. Member for North Durham would not want to dodge. I should like to believe that he could apply the same criteria to the advantages that we have had since we left the ERM to the advantages that we are enjoying while we are out of the social chapter.

I am well aware that relatively few provisions of the social chapter are as yet to be incorporated—it is a softly softly catchee monkey operation. Having served on the Select Committee on European Legislation for the past 14 years, I have seen stuff such as this as it has come forward in a series of proposals. There is masses of legislation in the pipeline. It is a fraud on this debate and on the people of this country to pretend that the issue gravitates only around questions relating to works councils and the like.

I turn to a comparison that we can genuinely make between economies elsewhere in Europe and economies at the present time both in the United Kingdom and—so far as a reasonable comparison can be made—in the United States. There is no doubt that outside the social chapter, with union legislation under Baroness Thatcher, changes have been made as a result of which we are truly competitive in the world.

Since 1974, unemployment in the European Community has increased. That is very significant. From 1974 to the present day, unemployment has risen from 2.5 per cent. to an average of about 11.5 per cent. The issue is not just one of adopting a chauvinistic or party political point of view on one side of the Committee or the other. In the national interest, it cannot be right for us to ignore the reality that unemployment in Europe has risen since 1974 by such an amount.

There is the most appalling youth unemployment in countries such as Spain, where it is running at about 35 per cent., Italy where it is 33 per cent., and France where it is 28 per cent. It is monstrous that people should be subjected to such misery and deprivation as a result of policies that have been pursued in Europe over the past 20 years in the process of so-called ever closer union. As I said the other day, the process is in fact ever closer division.

The policies are causing deprivation, hardship and unemployment. I cannot for the life of me understand how, in a trivial exercise called the jobs summit last week, Labour Members could possibly imagine that they would be able to claw back the dangers to the people of this country—including their own constituents—that what I have just described represents. Believe me, it will come to haunt them.

As has been mentioned, 31 million jobs have been created over the past 20 years in the United States compared with zero in Europe. Do not Labour Members realise that there must be a lesson to be learnt from that? Why are they involved in the Gadarene rush towards creating massive unemployment and greater difficulty for the people of this country? I shall give way to my right hon. Friend the Member for Haltemprice and Howden (Mr. Davis)—or at least I think that I am about to. I thought that he was rising and wanted to say something.

Mr. David Davis (Haltemprice and Howden)

My hon. Friend has provoked me to speak rather than my asking him to give way. I apologise to him for intervening in the middle of his speech. If the social chapter is so minor and unimportant, as Labour Members claim, why was our joining the social chapter raised at the top of the agenda at every Council of Ministers that I attended? The continental countries were clear about wanting us to join so that more could be added to it without further disadvantaging them.

7.30 pm
Mr. Cash

My right hon. Friend, with his immense experience, makes a telling point. The real reason why the other countries have been so anxious to impose the social chapter on us is that they want to ensure that the United Kingdom does not get a competitive advantage in the ever-increasing legal area of employment. I should not really say this, but in a funny way it is quite a good ruse from their point of view, if they get away with it. Unfortunately, not only are the Government prepared to run with that ruse, but they are prepared to advocate it. They want to destroy jobs in the United Kingdom.

That is what is going on in the coal industry. In my Adjournment debate the other day, I pointed out that the German coal producers are getting as much as £5 billion a year. State aid is tied up with the social chapter and employment policy. Why are the so-called new Labour Government anxious to drive out good, honest, hard-working miners in my constituency and elsewhere in the United Kingdom on the altar of the ideology of the European Coal and Steel Community—which stinks—giving the Germans the opportunity to pay their miners £5 billion a year? What are the Government doing about that? That is social policy. That is where they are destroying United Kingdom jobs and creating advantages for people elsewhere.

I have always supported the notion of a single market, but I do not support gross differentials, gross unfairness and a complete lack of competition. That is the problem. That is why I am so concerned about the behaviour of a Labour Government that got in on the basis of a vast mistake that was made over the exchange rate mechanism. We broke promises on that, tied up with monetary union and other issues. Perhaps the British people had not quite connected that with domestic issues. A Labour Government ride into that vacuum and go around destroying jobs, such as the 5,000 that they are about to ditch in the coal industry, although I heard the Prime Minister attempting desperately to hang on to the cliff edge by making some promises this afternoon. We know that his commitment to a 20 per cent. cut in emissions is at the root of the problem and the Labour party's embarrassment.

The social chapter is about employment policy and the manner in which we create jobs.By signing up to it, we shall take away the advantages that have been built up by the Conservatives over the past 18 years. I find that very depressing. I hope that the people of this country will take note of the arguments of Conservative Members, although I am experienced enough in this place to know that the best way to keep a secret is to make a speech in the House of Commons.

The European Commission's figures on the effects of the social chapter show that regulation has shackled employers. Greater flexibility to respond to market conditions is essential if jobs are to be created. According to the European Commission, non-wage labour costs add an average of 30 per cent. to employment costs in the European Community. The figure approaches 50 per cent. in Germany, France, Italy and Belgium, but it is only 19 per cent. in the United Kingdom, where health care and much of welfare spending is paid for by general taxation. Many other member states are searching for alternatives to high payroll taxes because of the damage that they inflict on employment opportunities and are looking for ways to put the costs of social benefits on the general taxation budget.

The provisions of the social chapter and the employment title are nothing more than pieces of paper that will cause incredible damage to people in my constituency and throughout the United Kingdom. I trust and believe that they will cause a great deal of embarrassment to the Government, who are inviting the chaos, the disorder and the implosion of the European Community that the measures will cause.

Mr.Bill Rammell (Harlow)

I am happy to follow the hon. Member for Stone (Mr. Cash). I do so with some astonishment, because—I think that I understood his argument—he said at the beginning of his speech that the social chapter was a deliberate, organised attempt by other European countries to bring our social costs up to European levels. I remind him that we had an opt-out. It is not the other European countries that are arguing for the abolition of that opt-out; it is the British Government. That is an example of the xenophobic rhetoric that I referred to earlier in Committee.

I am looking particularly at the hon. Member for Buckingham (Mr. Bercow) because yesterday, when I could not be here, he said that I did not justify my claims about xenophobic rhetoric. I am happy to do so by referring to the language and policies of the Conservatives. Last week, the hon. Member for North Essex (Mr. Jenkin) imagined a housewife in Surrey being disconnected from the political process because Members of the European Parliament speak in a foreign language

Mr. Cash

I must intervene. The hon. Gentleman cannot be allowed to get away with that. I will not be accused of being xenophobic. The hon. Gentleman must answer a simple question. Does he think that it is xenophobic to produce statistics based on the European Commission's analysis of wage rate differentials? If he does, he is clearly mad.

Mr. Rammell

I shall not respond to that directly. I do not think that it is wrong to quote European Commission statistics. That is not the issue on which I was accusing the hon. Gentleman of using xenophobic rhetoric. However, he said—I am paraphrasing him—that the social chapter was an organised conspiracy by other European Governments to bring our social costs up to their levels. The proposal to abolish our opt-out does not come from Europe; it comes from Labour.

Mr. Radice

I know that it is boring to hear the social chapter read out and I know that Conservative Members are not enthusiastic about it because most of them have not read it. However, we have a veto on social security and social protection of workers—the non-wage costs. If those wicked continental Governments are seeking to impose their social costs on us, we can prevent them by using our veto. Have the Conservatives not realised that?

Mr. Rammell

Some clarity and some facts are welcome in the debate.

The rhetoric used by the Conservatives is important. The right hon. Member for Old Bexley and Sidcup (Sir E. Heath) said to the former Prime Minister, the right hon. Member for Huntingdon (Mr. Major), a couple of years ago: I hope that my right hon. Friend can influence the Government, so that we British can be proud of the things that are our heritage. That is completely different from spending our time attacking our allies and neighbours for what, allegedly, they are doing, because that is xenophobic."—[Official Report, 7 February 1996; Vol. 271, c. 410.] He was not talking about the Labour party or the Liberal Democrats: he was talking about the Conservative party and Conservative Members. That is why I made the point.

Mr. Letwin

I apologise for intervening again so soon, but the point made by the hon. Member for North Durham (Mr. Radice) must be nailed. It is clear in article 137 of the social chapter that we do not have a veto over measures relating to working conditions. The fears that were being expressed by my hon. Friends arise on precisely that point.

Mr. Rammell

I did not hear those comments from my hon. Friend: I heard him mention social security legislation and, on those issues, we have the veto.

I shall move on to some of the working conditions proposals in the social chapter.I speak on the issue with some knowledge, because I was a senior manager in the public sector for 10 years before 1 May.I understand the practical need for flexibility and adaptability in the workplace. I also understand the frustrations of being unable to get employees to adapt and change.

If we are to compete and succeed economically and industrially, we need change. We need people to work in new and different ways and to show flexibility and adaptability. It is also crucial that employees have enthusiasm and commitment. That will happen only if people have security of employment—insecurity in employment is one of the biggest destabilisers that prevent people from being enthusiastic about and committed to their work—channels of communication so that people feel that they can put their views forward, and a sense of ownership and belonging to the organisation or company for which they work. That is the only way for people to work effectively.

Mr. David Davis

I have listened to the hon. Gentleman with some sympathy, but does he accept that companies can have good communications and industrial relations without all the regulations? All the best studies carried out in this country and across Europe—for example, in Holland—show that high levels of regulation lead to low levels of growth which lead to high unemployment. That does not help anybody.

Mr. Rammell

I do not believe that that is so. We can all select examples to prove our case. We should consider the experience of the Dutch which, in the past few years, has been a strong example of social partnership with both sides of industry working together. They have seen a transformation of the economic situation. We can all quote statistics from various countries to support our examples.

I was talking about the criteria needed for successful economies and industries. If those criteria are accepted—there seems to be a broad measure of agreement on both sides of the Committee—we have to make a decision about whether to follow the legislative route. Should the matter be left to employers and employees to negotiate or should the Government legislate for some basic minimum standards of fairness in the workplace? Even Conservative Members agree that some legislation is necessary—for example, health and safety legislation. Once that has been accepted, other legislation is a matter of judgment, including the judgment whether such legislation should be national or through the social chapter and the European Union.

Conservative Members are somewhat disingenuous about the issue. They have argued, in Committee and in European Standing Committees, that the employment protection proposals could be achieved through UK legislation. That is disingenuous because the Conservative party has given no evidence that it would support such legislation.

I support the legislation that comes from the social chapter for several reasons. We should judge the issue case by case. That is important, because one of the illusions that we suffered under the opt-out was that it would protect us. The longer the opt-out went on, the more it became clear that the social chapter was coming in through the back door. Companies were reacting to it, but—this is the key point—we did not have a seat at the negotiating table.

Employment protection legislation should also be achieved through Europe to ensure a level playing field. Some 60 per cent. of our trade is with other European nations and it is important, so that one country does not gain a competitive edge over another, to have some basic minimum standards and costs.

Mr. Owen Paterson (North Shropshire)

Is the hon. Gentleman saying that the reason why legislation should not be presented in this House is because the Opposition would oppose it? That seems a strange reason.

Mr. Rammell

That is not what I said. I was drawing attention to the fact that Conservative Members are misleadingly giving the impression that they would support UK legislation in employment protection as an alternative to signing up to the social chapter. There is no evidence to sustain that argument.

7.45 pm

The British Government are right to use the social chapter and to judge the issues case by case. I genuinely believe that a balance must be struck between social costs and the burden placed on business. One of the frustrations of our debate is that it is unrealistically polarised. Conservative Members seem to claim that the choice is between total flexibility—with no legislation on any employment situation—and total restriction. That is not the real world and is not the situation that we face. A balance must be struck somewhere in the middle and that is a matter for negotiation in the workplace, in the House of Commons and in the European Union.

We have heard other arguments against the social chapter. The shadow Foreign Secretary, at the start of our debate on the amendments, seemed to say that Britain had the best record in Europe for inward investment and that the social chapter would damage the prospects of inward investment. That argument is fatuous. It was clear to any informed observer, and certainly any international business observer, for two years before 1 May, that it was likely that Labour would win the general election with a commitment to sign up to the social chapter. However, inward investment was not cut. It has not been cut since Labour was elected and signed up to the social chapter.

The argument is also misleading because when we consider the types of companies involved in inward investment we see that their wage costs and terms and conditions are way above anything introduced in the social chapter. It is misleading to suggest the social chapter is a factor in the equation when such companies decide on inward investment locations.

I also take fundamental issue with the view put forward by the shadow Foreign Secretary yesterday when he said that, in a competitive world, all the crucial decisions are taken at the margin. His argument was that marginal differences in price make all the difference. Price and labour costs are important, but the idea that the only route to economic and industrial success is to concentrate wholly on labour costs at the expense of anything else is one reason why the previous Government got it so wrong.

We have also heard many Conservative Members expressing concern about how social chapter proposals will impinge on jobs in this country. We heard that argument before the introduction of equal pay legislation, when the Conservative party claimed that giving women rights to equal pay would result in a significant reduction in the number of women employed. However, following that legislation, we saw a dramatic explosion in the number of women employed.

Mr. Bercow

Does the hon. Gentleman believe that the parental leave directive will increase employment in Britain?

Mr. Rammell

In the longer run, it may well have an impact in attracting people back into the workplace, but I do not want to polarise the arguments artificially, as the hon. Gentleman is attempting to do. The parental leave directive, giving three months' unpaid leave, which the vast majority of people will not take up, because they will not want to forgo a quarter of a year's salary, is completely marginal in relation to the number of people who are taken on or made redundant in a workplace. That argument is fatuous.

The key issue of the social chapter was fundamentally and conclusively resolved in the general election. In any general election campaign and in any manifestos issued by political parties, there is a series of issues on which people vote; but some issues have added saliency, and people understand the clear division on them between the political parties. The social chapter was one such issue.

That was certainly my experience on the doorstep: people understood that the Conservative party had negotiated the opt-out and was there to protect it, and that if Labour was elected we would sign up to the social chapter. People voted overwhelmingly, in historic proportions, for that proposition. We should remember that in this debate.

Sometimes on the doorstep one comes across hostility to Europe and the European Union, but in seven years' campaigning I have yet to come across one person in my constituency who has said that he or she would not vote Labour because we wanted to sign up to the social chapter. The prominence that Conservative Members give to that issue is way beyond its recognition and understanding among the general public.

The issue is about bringing the country into the 20th century and taking it through to the 21st. People want minimum standards of fairness; they understand the need for flexibility, but they want the other side of the coin as well. If we can achieve minimum standards of fairness in employment through Europe, that is what people want us to do. That is why they want us to sign up to the social chapter.

Mr. Swayne

I ask the hon. Member for Harlow (Mr. Rammell) to read the Official Report of yesterday's sitting; there he will read of the seriousness of his accusation, made in the Committee's first sitting, with respect to xenophobic rhetoric. I would not want to repeat that now.

Instead, I want to draw the Committee's attention to new clause 27. In many respects, it concerns one of the less controversial aspects of the treaty as a whole. Notwithstanding the fact that Conservative Members are wholly opposed to the social chapter and its implications, we accept that the British people were warned and, as the hon. Member for Harlow pointed out, gave the Government a mandate. New clause 27 recognises that. It would put into effect a means of monitoring the activity of the legislation and would enable us to pass resolutions on it.

When I went to Germany the summer before last, I arrived just after the Prime Minister—then the Leader of the Opposition—had addressed the German equivalent of the Confederation of British Industry. He was well received, but had he stayed to listen to the debate that followed his address, he would have been somewhat embarrassed, because business man after business man got up and asked for the same Thatcherite reforms for Germany that we had experienced in our labour markets in Britain: reforms which the right hon. Gentleman had voted against at every opportunity.

Mr. David Davis

My hon. Friend is being too kind. The current Prime Minister was sitting in the front row when the head of the German CBI said that Britain, after 15 years of Tory reforms, was the best equipped country in Europe to face global competition.

Mr. Swayne

I thank my right hon. Friend for that intervention. Our delegation had gone to Germany precisely to discuss with German business organisations and individual business men how they might achieve the same reduction in social legislation and social costs as we had. At every meeting, I asked the Germans how much they believed that their problems arose from their own internal legislation, and how much from the social chapter. We know the answer, because we know that at the time the social chapter consisted of only two elements; but they were completely unaware of, and had given no thought to, that question.

New clause 27 will prevent such an occurrence in this country. It is right and proper that businesses and the House should know the source from which such legislation arises, because the Government with their majority can implement whatever social protection they choose.

Many Labour Members have implied that we Conservatives are against social protection. It is not a question of being for or against social protection: the treaty that the Government have signed effectively raises the possibility of our having to implement social protection legislation of which we disapprove, and which we fear may generate unemployment.

The Government made their intention clear from the outset, and trailed their objective well in advance. In so doing, they failed to exact any price whatever for their concession. As a result, the concession has been pocketed and more has been and will be demanded by their partners. That was an act of unilateral disarmament which will cost this country dear.

Mr. Coaker

It is interesting to be able to participate in the debate and comment on the amendments. In all the meetings of European Committees, in European Standing Committee B, and in this Committee, we start from the premise that we have one group, the Conservative party, that is by and large Euro-sceptical, and another, the Labour party, that is not Euro-fanatical but is determined to work within the European context to try to improve matters. It is important to set out that philosophical divide, because the arguments on both sides should be seen in that context.

There is a continual re-run of arguments that are almost about whether we should be in Europe in the first place and whether we should participate in anything European. The amendments are not constructive amendments, designed to improve Britain's position: they are wrecking amendments. They arise from a desire that Britain should take no part in the drive to improve European standards.

Why should our people be denied the minimum standards that are being given to other workers throughout Europe, and the employment and social policies that promote jobs and fairness in a European context? We all want a voice at the table, not isolationism. Without flexibility in the labour market throughout Europe, there is bound to be increased unemployment.

Why do Conservative Members appear to want to deny our work force the protection and rights at work, and the proper health and safety regulations, that are common to the rest of Europe? To try to achieve all those aims for our own workers and our own country would not be to abrogate our sovereignty to the rest of Europe; it would be a way of trying to assert our sovereignty.

Mr. Crispin Blunt (Reigate)

The hon. Gentleman should bear in mind the fact that we operate in a world market, not only a European market. If we give authority to Europe to decide those matters for us, we limit our ability to make decisions in our own interest so that we can trade in the world in the best possible way. We are a global trading nation, and global free trade should be our final objective, not tying ourselves into Europe. The danger is that we will tie ourselves into a fortress Europe. That is where the social and employment chapters are leading us.

Mr. Coaker

I appreciate the hon. Gentleman's argument, but, as has been said, the Government recognise that we operate within a global economy. If we are part of a strong Europe we will achieve more than we would if we opted to be little Englanders, working within the confines of our nation state. As part of a European block and co-operating with one another, we will achieve more than by opting for the individualistic, narrow, nationalist road which the hon. Gentleman would prefer us to follow.

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Mr. Robathan

When the hon. Gentleman talks about what we can achieve, does he believe that we will gain the same employment prospects as those on continental Europe? After all, they are not very good. I was in the House when we debated the Maastricht treaty and I saw the same starry-eyed optimism among Members then, but I must say that most of them are now rather disillusioned.

Mr. Coaker

I cannot speak for those individuals, but I am certainly not disillusioned or a starry-eyed optimist. I am a realist and, in my view, the employment prospects of our people and those across Europe will be better served by co-operating at a Europewide level rather than by taking a narrow nationalist view.

The Government believe that, as a proud, modern state, we can achieve certain benefits at national and European level. The Opposition argue that the provisions of the employment and social chapter on people's rights at work will make our country more uncompetitive. We believe, as will be argued with ever increasing force, that those provisions will make us more competitive because a motivated, happy, contented work force, who enjoy good standards at work, will achieve and prosper more than those who are disaffected and driven by minimum standards.

The Opposition argue that if we accept the social chapter we will be burdened by over-regulation. Instead of scaremongering about bureaucracy and peddling myths about over-regulation, the Opposition should consider how they could fight for higher standards. All they want to do is deny our people the rights enjoyed across Europe.

Sir Teddy Taylor (Rochford and Southend, East)

It does not matter two hoots whether one is a Euro-sceptic or disillusioned. It is abundantly clear from the directive on the 48-hour week that the European Commission is prepared to bring in the social chapter by majority vote, using the health and safety provisions. Surely it is a denial of democracy to spend all this time arguing about an issue when there is nothing to decide.

Does the hon. Gentleman not accept that, irrespective of his attitude, that of the Opposition or anyone else, the battle was lost when the European Commission brought in the 48-hour week under health and safety provisions, according to the majority vote? Does he not accept that it could behave like that on every aspect of the social chapter?

Mr. Coaker

I do not accept that. The Government are putting forward an alternative point of view. We are talking about working together in Europe. Perhaps we will not get everything we want every time, but, by being a co-operative member of the European Community, working to achieve common goals, the impact on our country will be far greater than it would be if we tried to achieve such goals on our own.

Mr. Radice

The working time directive was not decided under the social chapter. It was brought in under health and safety regulations which are already in the treaty of Rome. The argument of the hon. Member for Southend East (Sir. T. Taylor), who is my colleague on the Treasury Select Committee, is irrelevant to the social chapter. He has read it and he knows that many matters are not subject to qualified majority voting, including, for example, those relating to social security and social provision. Social provision, which has been spoken about most by the Opposition, is governed by a national veto.

Mr. Coaker

I thank my hon. Friend for that intervention; his experience in such matters speaks for itself.

Some specific benefits are starting to be apparent from the employment and social chapter provisions. I do not believe that there is anything more important than making job creation and employment the top priority in Europe. I believe that our people and those in Europe would agree with that.

The Government believe that we can create more jobs and better employment prospects by working together. The title on employment included in the treaty refers to that and to the need to increase the scope for skills and training, which is particularly important. It advocates that all the policies of the European Union and its nation states should take into account the need to create employment opportunities and promote equal opportunities.

Once we have such social polices in place, we can begin to tackle unemployment and social exclusion. The amendments tabled by Conservative Members are designed to wreck the Government's aim. Why should our workers and families be denied the same rights and standards as those enjoyed by people in the rest of Europe? That question needs to be answered. Conservative Members would deny our citizens those standards.

Other improvements have been agreed in the face of continued opposition from Conservative Members. This morning in European Standing Committee B, we discussed the part-time workers directive, which is designed to ensure that part-time workers have the same rights and entitlements as full-time ones. The hon. Member for Buckingham (Mr. Bercow) may raise his eyes in amazement, but such workers are looking forward to further legislation to protect their rights at work. If we are serious about creating flexible labour markets, we need to ensure that part-time workers have the same rights as full-time ones and that they are protected at the workplace.

It is important to consider the implications of the European works councils directive, which also points to the right way forward. Conservative Members disagree with the idea that workers should be consulted and involved in decisions about planning for the future. That directive is a significant attempt to involve workers in their companies. Such involvement would help to create the motivated work forces about which I have already spoken.

Another directive of particular importance, with far-reaching repercussions, is the parental leave directive. Many people will not understand why Opposition Members are opposed to it. It does not reflect the old type of society that Conservative Members want to represent, but the new, modern society in which we live. If Conservative Members want to deny the fact that parents increasingly want to be with their children either at their birth, or some time during their early years, they are not living in the same world as I do. That directive offers not only unpaid leave for child care, but leave to parents who need it for urgent reasons.

Mr. Derek Twigg (Halton)

Would it be true to say that the attitude of the Conservative party suggests that it is anti-family?

Mr. Coaker

Their attitude reflects one of the key features of the election and of this debate: the fact that the Conservative party represents the old values of the Britain of yesterday and the new, vibrant Government represent Britain as it is today and people's demands as we move forward. The parental leave directive is all about improving standards at work, increasing flexibility and trying to work together with the rest of Europe to solve common problems. If Conservative Members disagree with that statement, they deserved to lose the last election. Only by working together can we achieve common success and tackle common problems.

Sir Teddy Taylor

I shall make a short, simple speech—I guarantee to take no more than two minutes—and I hope that the hon. Member for Gedling (Mr. Coaker) will think about what I say.

It is a bad thing to hand over the power to make laws to another body if one cannot do anything to change those laws when they go wrong. Time after time with Europe, we have seen promises go wrong, and there is absolutely nothing we can do about it. Take agriculture policy: this afternoon, we witnessed the pathetic sight of a Minister trying to pretend that health considerations were involved in his decision on bovine spongiform encephalopathy. We all know that that is a load of codswallop, but the Minister of Agriculture, Fisheries and Food is desperately seeking any way to get the curtailment of trade with Europe removed, and he believes that introducing all sorts of strange new health proposals will help somehow. The Minister is a nice person, but we are kidding ourselves if we believe that.

What can the hon. Member for Gedling do about agriculture policy? He knows that it is going terribly wrong and that it is costing his constituents a fortune. He knows that it is an insult to the poor people of the world that we are spending millions of pounds destroying food. I am sure that as a member of the Labour party, he is upset at our spending £1,200 million on growing high-tar tobacco that will end up in the third world. I am sure that he is offended and outraged by all that, but there is nothing that he can do about it. The main argument against transferring powers is that if things go wrong, there is nothing we can do about it.

To that extent, the social chapter and all the things the hon. Gentleman was talking about are a big problem—a democratic problem. If he wants to introduce proposals to improve the lot of working people in co-operation with other nations, that is fine. We can hold expensive conferences in five-star hotels, which I am sure some Labour Members would be glad to attend. We could agree with other European countries to take action together on a national basis in a way that would give us a let-out—if things went wrong, we could do something about it. Despite the unhelpful intervention by the hon. Member for North Durham (Mr. Radice), who is usually more constructive, I hope that Labour Members will appreciate that whether we are Euro-sceptic or Euro-enthusiasts, all the stuff about the social chapter is deliberately misleading the people of Britain. Whether or not we have the social chapter, the laws can still be applied to us.

I remember that the previous Conservative Government were keen to protect the interests of Great Britain and its people and anxious to do so promptly. When we heard that the 48-hour week directive was to be applied through health and safety legislation, the Government got terribly angry—and rightly so. They said, "Surely these European chaps cannot do that—it is illegal and wrong." The Government took action by going along to the courts to try to get it sorted out, but sadly they failed. The hon. Member for North Durham is correct in saying that if we want to change social security laws—for example, to give extra protection to single mothers, as some Labour Members want—we cannot do so by majority vote. The plain fact is that, as the experience of the 48-hour week directive shows, the sort of social legislation that we have been talking about tonight can be applied through health and safety.

Most of those present tonight are younger Members—I am one of only two old people here. I hope that younger Members will think about the roller-coaster effect of the European Union—whether or not we agree to things, they happen anyway. Hon. Members who were here in 1988—I know you were, Mr. Martin, as you are a most conscientious attender—held wonderful debates on the Bill that became the Merchant Shipping Act 1988 and said how we were going to stand up and make sure that the quotas were given to British fishermen. Today's younger Members would have been delighted to hear us—they would have been jumping up and down, waving Union Jacks and shouting, "Hooray, hooray!" Yet a few years later, we found that that law had been torn up by the European Court and that our constituents were going to have to pay huge amounts of compensation to people who pretended that they were British when they were in fact Spanish or Dutch.

That is all terribly sad, and hon. Members should appreciate that democracy is declining quickly. Whether they vote for or against the amendment—there are perfectly good reasons for either course of action—they should remember that it is pointless nonsense. At the end of the day, whether we have the social chapter or not, the European Union can apply all the social legislation it wants. It cannot do anything for single mothers, as the hon. Member for North Durham rightly pointed out, but it can bring in many other sorts of social legislation through something that was passed a long time ago and which we were led to believe was concerned only with ensuring that we did not have mice and rats on factory floors. If hon. Members doubt that, they should look back over the debates on the health and safety clause. It was made clear then that only health and safety considerations were involved, such as making sure that workers did not catch bad diseases from rats and mice.

8.15 pm

Whether the hon. Member for Gedling votes for or against the amendment, I hope that he will think carefully about the interests of democracy. What is important is not what the Committee agrees to, but what extra powers will be achieved by the European Court and by the European Commission. To that extent, I hope that hon. Members who have attended conscientiously and shown an interest in European affairs that has been lacking until now will appreciate that battles are lost without even being fought. That is not a laughable matter—it is desperately serious and very worrying for the democratic system.

Mr. Tony McNulty (Harrow, East)

I respect the long-held and consistent views of the hon. Member for Rochford and Southend, East (Sir T. Taylor), but I cannot help thinking that the litany that he has just gone through owes much to the lack of real determination shown by the Conservative Government in defending British interests. They had 18 years to try to do something about the common agricultural policy, which most hon. Members would agree is seriously flawed, but achieved precious little. Megaphones and handbags prevailed over hanging in there and preserving British interests, and that was a real shame.

It is also a shame that, in the British context, much of the debate—tonight and at other times—has concentrated on extreme positions. Conservative Members will know where I am coming from when I say that I defeated a gentleman called Hugh Dykes; he sits at one end of the continuum of views on Europe, and I deprecate such blind Europhilia—it is of no use to anyone and it is not the line taken by the Labour Government. Although I would not include the views of the hon. Member for Rochford and Southend, East, I equally deprecate the views of the other extreme, which were ably represented by the hon. Member for West Dorset (Mr. Letwin) in European Standing Committee B. He stood up and said that both he and the hon. Member for Ruislip-Northwood (Mr. Wilkinson), who did not demur, were happily extremist on European issues.

The difficulty with the debate in Britain starting from those extreme points is that they drive the agenda, whereas the reality is located in the middle. From 1 May, the Government have taken a realistic, pragmatic line in all matters European, which, in both actions and deeds, puts British interests first to a far greater extent than did the megaphone and the handbag.

The First Deputy Chairman of Ways and Means (Mr. Michael J. Martin)

Order. It might help the hon. Gentleman to know that we are not debating all matters European, but the amendment that deals with employment and social provisions. Perhaps he would care to address that matter.

Mr. McNulty

I fully accept that, Mr. Martin, and I apologise for the somewhat lengthy introduction to my comments on the amendments, which will follow on in part from my colleagues' speeches.

We discussed social and employment provisions this morning in European Standing Committee B, and we have previously discussed other matters that may or may not be germane to the debate. As we saw in Committee this morning, we tend to hear either conspiracy theories or a litany of abuse against what the hon. Member for Ruislip-Northwood described this morning as a quisling Government, who are happily selling out British interests to—in a paraphrase of the hon. Gentleman's words—Johnny Foreigner from Brussels.

That is quintessentially the prevailing view among Conservative Members in European Standing Committee B, as we saw this morning when we discussed part-time work and the works councils directive. The sum of their argument this morning was that the works councils directive was nothing to do with workers but rather was interfering with managers' right to manage and should not happen. The hon. Member for Ruislip-Northwood described parental leave as a licence for men to go fishing. Quite where he got that from I do not know and he did not put it into the context of the directive. On part-time work, the clear thrust of Conservative Members' views was that part-time workers are not real workers anyway and do not deserve any rights at all.

In essence, as was said this morning and as has been said more than eloquently by my hon. Friends this evening, each of those elements will set in train good business practice. It is extremely complacent to say that the best companies do this anyway. The social and employment dimensions of European policy are about bringing the worst up to the best. Would that it were possible to ignore the need to do that and hope and pray—as Conservative Members seem to do—that it will be the case, but it is not. We are concerned with maintaining flexibility and not going back to over-regulation. Conservative Members view any form of intervention and regulation, however light the touch, as a return to 1960s and 1970s corporatism or statism, which it clearly is not.

Conservative Members, as ever, have quoted selectively from the treaty. The right hon. and learned Member for Folkestone and Hythe (Mr. Howard) referred only last night to article 128. What he did not say is that article 127 says clearly that the competencies of member states will be respected. Conservative Members do not like that, because it does not fit in with their arguments, so they ignore it. It is always the same during significant debates on Europe. If the facts staring them in the face do not bear any relation to their perception of reality, they ignore them. They believe that the European directives on part-time work, works councils and parental leave are the start of some deep, misguided, socialist conspiracy to harness latter-day western European capitalism to the shackles of 1960s corporatism, which will destroy our flexibility and competitiveness.

It is sad that, to varying degrees and over varying centuries, Conservative Members argue from various positions in the dark ages. The reality is that within the European dimension we seek flexibility through employability, which has resulted in some of the measures that I have talked about, but also through competition and welfare reform. Conservative Members need to consider the whole package, not just the parts that they select for the development of the theory of world domination by the massive European state. Conservative Members must have regard to all aspects of the employment and social dimension of the treaty, rather than pick holes in it.

All those elements clearly need to be underpinned by decent minimum standards of fairness at work. When we discussed those elements of the directives this morning, we were not talking about what many of my hon. Friends would consider luxury in terms of parental leave, works councils and part-time work. We were talking about establishing minimum standards in those areas, and that is what will prevail when we come to consider other areas. That is the reality.

There is no conspiracy other than the conspiracies of silence, megaphones and handbags that we have had for 18 years which have got us into this position. Had we been fully committed during that time to fighting for British interests, as the Government have done in a pragmatic, cohesive and professional way since May, Britain would now have a level playing field. There is no huge conspiracy, no pulling one little thread out from one element of the treaty and exploding it into some massive conspiracy, which is what Conservative Members have done time and again.

I appreciate your exhortation, Mr. Martin, so I shall finish on this point. Conservative Members maintain that harmonisation of imperfect and unfair tax is the co-ordination of every element of the fiscal code for Britain and every other country into some super-European structure, but that is wrong. The same applies to social and employment legislation. Conservative Members were wrong then and they are wrong now. They can whistle in the wind—I think that that was a phrase used this morning—until the cows come home, as long as they are doing it in opposition. British interests will then prevail in the European dimension, and the irrelevance of Conservative Members and their views will be all the more profound.

The Minister of State, Foreign and Commonwealth Office (Mr. Doug Henderson)

It is always best to quit when one is ahead.

We have had a good debate, beginning with the pitch of the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), who set out clearly his views on the matters before us. We have also had many interesting speeches from hon. Members on both sides of the House, many of them made with passion.

I hope that the House will forgive me if I do not reply individually to hon. Members. I felt that I had to yesterday and I rather felt that I had offended an important section of my friends in the Smoking Room. I have no wish to make matters worse this evening, so I shall try to be more precise.

The hon. Member for Somerton and Frome (Mr. Heath) asked whether the Government would consult their social partners on the question of appointments to the Employment Committee. I hope that the hon. Gentleman will not press his new clause, but if he does I shall have to resist it. The Government have a deliberate policy of extensively engaging our social partners on many occasions. I have already met the principal representatives of the Confederation of British Industry, the Institute of Directors, the Trades Union Congress, the regional organisations of those bodies and representatives of a number of other business sections.

The committee that is envisaged is a committee of international civil servants. It will look at the way in which legislation is to be processed. That is in no way a substitute for a proper committee of people who are involved in industry and commerce who know what is happening on the ground. The Economic and Social Committee is the proper body for that. To some extent, the Committee of the Regions also fulfils that role. We intend to continue to consult those bodies and others and to take into account their views on this committee. However, the appointments will be from civil servants.

With regard to new clause 27, we cannot come back to the full House on every occasion, but there is an agreement to be reached under the provisions that we are debating. This is an opportunity for the House to express a view in principle. There will be another opportunity on Third Reading. The Government are already committed to improving scrutiny of all European matters, including those. I hope that that reassures the hon. Member for North Dorset (Mr. Walter).

There are three main questions before us. The first is what is the purpose of the social chapter. The second is whether there should be an employment clause in the treaty. The third, on which many hon. Members have focused, is whether there is a contradiction between having a social chapter and an employment clause, and being a competitive economy. I shall take those reasons in order.

First, I was proud to sign the social chapter when I went to the intergovernmental conference on 5 May and confirmed it in the treaty. It is right that, in the areas covered by the social chapter, British workers should have the same protection as workers in other European Union countries. I am happy to defend that concept in any council and I would say to those who disagree that industrialists throughout the country realise that in the Europe that we operate in—we are part of Europe and part of the European Union—that is an essential feature of, in a sense, the contract.

8.30 pm

The second reason why I believe it is important to support the social chapter is that I want British social partners to have a say in the matters that will be discussed in any case by those who are involved in the social chapter discussions in the European Union institutions. The problem with the previous Government was that, by opting out, they gave away their authority to influence what was happening. The previous Government, by default, agreed to qualified majority voting in many areas as a result of the Maastricht treaty. They cannot complain now that the new Government in Britain were responsible for that because, patently, that was not the case.

Our social partners now have the opportunity to have their voice heard, to make known what they think is best dealt with in employment regulation at a European level and—very important—to make their views known on what they consider can be best achieved at a domestic level in national Parliaments. That is a very important advantage of our signing up to the social chapter.

The third reason why I believe it was right to sign the social chapter is that the British people, on any test of opinion, demonstrated in the general election on 1 May, by their choice of the parties that they voted for, that they wanted British workpeople to have that protection and wanted Britain to be involved in the discussions. I am pleased to confirm that the social chapter is a positive thing and that the Government welcome it.

I shall now discuss the employment clauses. I shall try to summarise to save time. There were references to employment in the treaty of Maastricht and previous treaties. The Amsterdam treaty gives appropriate prominence to the issue of employment. It says that the seeking of a high level of employment is a major purpose—a major function—of the European Union and the European Community. The treaty outlines how that should be achieved.

I say in all humility that the role of the new Government was not insignificant in getting that clause into the treaty. We succeeded in increasing the prominence, among the things that the European Community seeks, of the concept of employability—of European workpeople being better able to take on the challenges of tomorrow because they have better skills and a better education. That was achieved by the new British Government.

What is in the treaty in that regard may be summarised in four parts. First, the treaty says that all policy must be gauged against its employment implications. Who could disagree with that ambition? Secondly, it says that employment policies should be co-ordinated and that there should be a recognition of what can best be achieved at a European level and what is best achieved at a national level. Who could argue with that? Thirdly, it says that there should be an annual report, so that people, not Governments, throughout Europe know what is happening on the employment agenda, what has been agreed at a European level, what is being discussed, what is being agreed at a national level and when measures will come into effect.

One of the problems of the European Union on employment issues is that it is difficult to know what is happening at any of the stages of development. Industrialists and workpeople in this country often do not know what is happening about part-time workers, about working time or about consultation. They become confused because of the lack of focus or clarity. The employment clause forces all of us who are involved in these issues to be precise, to be communicative and to let people know what is happening. That is another important thing. Who could disagree with it?

Spending programmes have been mentioned. Limited spending programmes arise out of the summit in Luxembourg, but the spending is from existing funds, so there are no other expenditure implications.

I believe that there is a strong case for supporting the employment clause.

Even if there is a strong case in social terms for the social chapter, and even if there is a strong case for having employment ambitions and for co-ordination, should we decide not to incorporate those provisions into our law because of the damage that they will do to the competitiveness of our economy? In my opinion, we would be wrong to reach that conclusion.

The competitiveness of our economy is a crucial issue. Apart from the security of our nation, it is perhaps the most crucial. In a country such as Britain, which trades more of its national product than any other comparable country, making our economy competitive so that it can generate wealth and take on export markets is a central motive of any economic policy, but I believe that getting competitiveness right is not about knocking down wages or the standard of workers. It is about motivating workers, about raising their educational standards and about raising the skills of workpeople so that they can take on the challenge of tomorrow.

Workpeople in industry know how to secure the future of their job. They know that it is important to have new designs, new products and new ideas. They know about the importance of marketing. They know that it is important to manufacture products in a way that means that they can be sold at a competitive price, to be productive and to be flexible in the organisation of work at the workplace. All those things are crucial, so the Government have strongly emphasised the need for flexibility at the workplace to help in the running of our economy.

Flexibility is sometimes wrongly interpreted as meaning knocking down the levels of workers. If we try to improve the competitiveness of our economy only by knocking down the rates of pay and the conditions of workers, we shall patently fail because we will not be able to meet the challenge of tomorrow. Every company in the country that is an enterprising unit, whether it be large or small, knows that that is the case. To achieve competitiveness, one must motivate, and to do that one must treat workers reasonably. Part of that treatment is to give them the measure of support that they can get from the social chapter.

However, the social chapter is not only about what can be agreed at a European level; it is also about recognising that some things are better dealt with at a nation state level. When the Government judge that that is the case, and especially when that is reinforced by what our social partners tell us, we are determined to make it the case that those matters are determined at a national level. That important section of the treaty of Amsterdam is to be commended to the House and to the British people.

I reject the proposed amendments.

Mr. Michael Howard (Folkestone and Hythe)

I shall be brief in responding to the debate. I agree, of course, with the Minister that it has been a good debate. Unfortunately, none of the essential arguments advanced by Opposition Members throughout the debate has received a vestige of an answer from the Government. None of the facts that we have cited has been challenged; none of the evidence has been impugned.

Given the economic performance of the United Kingdom over the past few years when compared with the performance of our partners in Europe, who have been subjected to the burdens that are contained in the social chapter and are similar to those that can be provided by the social chapter in future, there is no doubt that our performance has been superior.

The Government have failed entirely to answer our cardinal point that there is no need for the additional protections and provisions contained in the social chapter. Even if they decided none the less that they wished to make provision for such matters—we know and have acknowledged throughout that there are differences of view between the Government and the Opposition on these issues—there is no need to do so through the European social chapter.

The hon. Member for Harlow (Mr. Rammell), who is no longer in his place, sought to cast doubt on the Opposition's argument because he claimed that on the whole we do not favour legislation to provide additional social protection. That is true, but I have news for the hon. Gentleman, which is that the Labour party has a large majority in the House of Commons and, therefore, does not need our support for such provisions. If the Government wanted to introduce such provisions nationally, it would be the easiest thing in the world for them to do. There is no justification for subjecting the United Kingdom to measures that could be imposed on us, given that qualified majority voting applies to so many aspects of the social chapter against our will.

We know that proposals to which the Government are opposed have been brought forward under QMV. It is nonsensical for the Minister to say, as he did a few moments ago, that where there are matters that can best be decided on a national basis, we shall ensure that they are so decided.

By signing up to the social chapter, the Minister has deprived himself of the right to advance that argument. It can no longer be said. We can be outvoted on matters that even the present Government think would not be appropriate for the United Kingdom.

Nor did the Minister seek to deny that the employment debate guidelines that will be provided under the employment chapter will be mandatory in terms of the influence that they have on our employment policy, which could be subject to the jurisdiction of the European Court of Justice. That would enable the court to direct certain employment policies to be pursued by the United Kingdom even if the Government were convinced that they would be entirely against our interests. There has been no denial by the Minister about that. The only vestige of an argument that we have heard from the Government is that we should be in there, as it were, because otherwise we shall not be able to influence things.

I must caution the Government about that argument. There are so many organisations and ventures that we could join to obtain some influence, but in some instances there would be the most disagreeable consequences. The argument may be relevant, but it can never be decisive. It is an argument which should be treated with great caution.

Some extraordinary speeches have been made by Labour Members. For example, the hon. Member for Ealing, North (Mr. Pound)—he told us at some length that he had to dine elsewhere and so is no longer in his place—said that we need not worry about anything under the social chapter because there was a new attitude on the part of other countries in Europe. I am not entirely certain which of the examples referred to by my hon. Friend the Member for North Dorset (Mr. Walter) the hon. Gentleman had in mind. Perhaps he was thinking of the new desire on the part of the French and Italian Governments to introduce a 35-hour working week as demonstrating the new attitude to flexibility in Europe.

The hon. Member for Gedling (Mr. Coaker) argued that it is important for us to join the social chapter so as to obtain new flexibility in our approach to employment. He was not entirely clear. I thought that he would keep secret to the end of his speech precisely what he meant by flexibility arising from the social chapter. It became clear in the end that the hon. Gentleman meant that new measures were proposed for part-time workers.

There may be arguments in favour of introducing new measures for part-time workers, but to describe that approach as introducing a new flexibility into working conditions in the workplace is to deprive language of all meaning.

I think that it was the hon. Members for Harrow, East (Mr. McNulty) and for North Durham (Mr. Radice) who said that if we examine the language of the social chapter, everything will be fine. Unfortunately, neither of them was present for the most illuminating speech of my hon. Friend the Member for Altrincham and Sale, West (Mr. Brady), who told us exactly how flexibility was viewed by the Commission. He told us that Commissioner Flynn spoke of positive flexibility—an entirely new dimension to the phrase.

It is significant that every Conservative Member who has spoken has emphasised the importance that we attach to employment and jobs. We can always legislate to improve working conditions and to make social provision at the workplace more attractive, but when we do that we find that there are fewer and fewer people at work who are entitled to those benefits.

We believe passionately that a job is the best escape route from poverty, that work is the prize for which we should strive and that reducing unemployment should have a proper place in our policy prescriptions. We believe that signing up to the social chapter will do enormous damage to all those objectives. That is why we shall press the amendment to a Division.

Question put, That the amendment be made:—

The Committee divided: Ayes 126, Noes 332.

Division No. 104] [8.45 pm
AYES
Ainsworth, Peter (E Surrey) Lewis, Dr Julian (New Forest E)
Amess, David Lidington, David
Ancram, Rt Hon Michael Lilley, Rt Hon Peter
Arbuthnot, James Lloyd, Rt Hon Sir Peter (Fareham)
Baldry, Tony Loughton, Tim
Beggs, Roy Luff, Peter
Bercow, John Lyell, Rt Hon Sir Nicholas
Beresford, Sir Paul MacGregor, Rt Hon John
Blunt, Crispin Mclntosh, Miss Anne
Body, Sir Richard MacKay, Andrew
Boswell, Tim McLoughlin, Patrick
Bottomley, Peter (Worthing W) Madel, Sir David
Bottomley, Rt Hon Mrs Virginia Malins, Humfrey
Brady, Graham Maples, John
Brazier, Julian Mawhinney, Rt Hon Sir Brian
Brooke, Rt Hon Peter May, Mrs Theresa
Browning, Mrs Angela Moss, Malcolm
Bruce, Ian (S Dorset) Nicholls, Patrick
Burns, Simon Norman, Archie
Cash, William Ottaway, Richard
Clark, Rt Hon Alan (Kensington) Page, Richard
Collins, Tim Paterson, Owen
Cormack, Sir Patrick Prior, David
Curry, Rt Hon David Randall, John
Davis, Rt Hon David (Haltemprice) Redwood, Rt Hon John
Day, Stephen Robathan, Andrew
Duncan, Alan Robertson, Laurence (Tewk'b'ry)
Duncan Smith, Iain Roe, Mrs Marion (Broxbourne)
Emery, Rt Hon Sir Peter Rowe, Andrew (Faversham)
Faber, David Ruffley, David
Fabricant, Michael St Aubyn, Nick
Fallon, Michael Sayeed, Jonathan
Flight, Howard Shephard, Rt Hon Mrs Gillian
Forth, Rt Hon Eric Shepherd, Richard
Fox, Dr Liam Simpson, Keith (Mid-Norfolk)
Fraser, Christopher Smyth, Rev Martin (Belfast S)
Gale, Roger Soames, Nicholas
Garnier, Edward Spelman, Mrs Caroline
Gibb, Nick Spicer, Sir Michael
Gill, Christopher Spring, Richard
Gillan, Mrs Cheryl Streeter, Gary
Gorman, Mrs Teresa Swayne, Desmond
Gray, James Syms, Robert
Green, Damian Tapsell, Sir Peter
Greenway, John Taylor, Ian (Esher & Walton)
Hamilton, Rt Hon Sir Archie Taylor, John M (Solihull)
Hammond, Philip Tyrie, Taylor, Sir Teddy
Hawkins, Nick Tyrie Andrew
Hayes, John Viggers, Peter
Heathcoat-Amory, Rt Hon David Walter, Robert
Horam, John Waterson, Nigel
Howard, Rt Hon Michael Wells, Bowen
Howarth, Gerald (Aldershot) Whitney, Sir Raymond
Hunter, Andrew Whittingdale, John
Jackson, Robert (Wantage) Widdecombe, Rt Hon Miss Ann
Jenkin, Bernard Wilkinson, John
Johnson Smith,Rt Hon Sir Geoffrey Willetts, David
Winterton, Mrs Ann (Congleton)
Key, Robert Winterton, Nicholas (Macclesfield)
King, Rt Hon Tom (Bridgwater) Woodward, Shaun
Kirkbride, Miss Julie Yeo, Tim
Laing, Mrs Eleanor Young, Rt Hon Sir George
Lait, Mrs Jacqui Tellers for the Ayes:
Lansley, Andrew Mr. James Cran and
Letwin, Oliver Mr. Oliver Heald.
NOES
Adams, Mrs Irene (Paisley N) Armstrong, Ms Hilary
Ainger, Nick Ashton, Joe
Alexander, Douglas Atherton, Ms Candy
Allan, Richard Atkins, Charlotte
Allen, Graham Ballard, Mrs Jackie
Barnes, Harry Denham, John
Barron, Kevin Dobbin, Jim
Bayley, Hugh Donohoe, Brian H
Beard, Nigel Doran, Frank
Begg, Miss Anne Dunwoody, Mrs Gwyneth
Beith, Rt Hon A J Eagle, Angela (Wallasey)
Bell, Martin (Tatton) Eagle, Maria (L'pool Garston)
Bennett, Andrew F Edwards, Huw
Benton, Joe Efford, Clive
Bermingham, Gerald Ellman, Mrs Louise
Berry, Roger Ennis, Jeff
Best, Harold Ewing, Mrs Margaret
Betts, Clive Fearn, Ronnie
Blackman, Liz Fitzpatrick, Jim
Blears, Ms Hazel Flint, Caroline
Boateng, Paul Follett, Barbara
Borrow, David Foster, Rt Hon Derek
Bradley, Keith (Withington) Foster, Don (Bath)
Bradshaw, Ben Foster, Michael Jabez (Hastings)
Brake, Tom Foster, Michael J (Worcester)
Brand, Dr Peter Foulkes, George
Breed, Colin Galbraith, Sam
Brinton, Mrs Helen Gapes, Mike
Brown, Rt Hon Nick (Newcastle E) George, Andrew (St Ives)
Brown, Russell (Dumfries) George, Bruce (Walsall S)
Bruce, Malcolm (Gordon) Gerrard, Neil
Burden, Richard Gilroy, Mrs Linda
Burnett, John Godman, Norman A
Burstow, Paul Godsiff, Roger
Butler, Mrs Christine Gordon, Mrs Eileen
Byers, Stephen Gorrie, Donald
Caborn, Richard Grant, Bernie
Campbell, Alan (Tynemouth) Griffiths, Jane (Reading E)
Campbell, Mrs Anne (C'bridge) Griffiths, Nigel (Edinburgh S)
Campbell, Menzies (NE Fife) Griffiths, Win (Bridgend)
Canavan, Dennis Grocott, Bruce
Caplin, Ivor Grogan, John
Casale, Roger Gunnell, John
Caton, Martin Hain, Peter
Chapman, Ben (Wirral S) Hall, Mike (Weaver Vale)
Chaytor, David Hall, Patrick (Bedford)
Chidgey, David Hanson, David
Chisholm, Malcolm Harvey, Nick
Church, Ms Judith Heal, Mrs Sylvia
Clapham, Michael Healey, John
Clark, Rt Hon DrDavid (S Shields) Heath, David (Somerton & Frome)
Clark, Dr Lynda(Edinburgh Pentlands) Henderson, Doug (Newcastle N)
Henderson, Ivan (Harwich)
Clark, Paul (Gillingham) Hepburn, Stephen
Clarke, Charles (Norwich S) Heppell, John
Clarke, Eric (Midlothian) Hesford, Stephen
Clelland, David Hill, Keith
Clwyd, Ann Hodge, Ms Margaret
Coaker, Vernon Hoey, Kate
Coffey, Ms Ann Home Robertson, John
Coleman, Iain Hood, Jimmy
Colman, Tony Hope, Phil
Connarty, Michael Hopkins, Kelvin
Cook, Frank (Stockton N) Howarth, Alan (Newport E)
Cooper, Yvette Howarth, George (Knowsley N)
Corbett, Robin Howells, Dr Kim
Cotter, Brian Hoyle, Lindsay
Cousins, Jim Hughes, Ms Beverley (Stretford)
Crausby, David Hughes, Kevin (Doncaster N)
Cryer, John (Hornchurch) Humble, Mrs Joan
Cummings, John Hurst, Alan
Cunningham, Jim (Cov'try S) Hutton, John
Dafis, Cynog Iddon, Dr Brian
Dalyell, Tam, Illsley, Eric
Davey, Edward (Kingston) Ingram, Adam
Davey, Valerie (Bristol W) Jackson, Helen (Hillsborough)
Davidson, Ian Jamieson, David
Davies, Rt HonDenzil (Llanelli) Johnson, Alan (Hull W& Hessle)
Davies, Rt Hon Ron (Caerphilly) Johnson, Miss Melanie(Welwyn Hatfield)
Dawson, Hilton
Dean, Mrs Janet Jones, Helen (Warrington N)
Jones, Jon Owen (Cardiff C) Oaten, Mark
Jones, Dr Lynne (Selly Oak) O'Brien, Bill (Normanton)
Jones, Martyn (Clwyd S) O'Brien, Mike (N Warks)
Kaufman, Rt Hon Gerald O'Neill, Martin
Keeble, Ms Sally Öpik, Lembit
Keen, Alan (Feltham & Heston) Osborne, Ms Sandra
Keetch, Paul Palmer, Dr Nick
Kemp, Fraser Pearson, Ian
Kennedy, Charles (Ross Skye) Pendry, Tom
Kennedy, Jane (Wavertree) Pickthall, Colin
Khabra, Piara S Pike, Peter L
Kilfoyle, Peter Pollard, Kerry
King, Andy (Rugby & Kenilworth) Pope, Greg
King, Ms Oona (Bethnal Green) Powell, Sir Raymond
Kingham, Ms Tess Prentice, Ms Bridget(Lewisham E)
Kumar, Dr Ashok Prentice, Gordon (Pendle)
Ladyman, Dr Stephen Prescott, Rt HonJohn
Laxton, Bob Purchase, Ken
Leslie, Christopher Radice, Giles
Levitt, Tom Rapson, Syd
Lewis, Ivan (Bury S) Raynsford, Nick
Lewis, Terry (Worsley) Reed, Andrew (Loughborough)
Linton, Martin Reid, Dr John (Hamilton N)
Livsey, Richard Rendel, David
Lloyd, Tony (Manchester C) Roche, Mrs Barbara
Llwyd, Elfyn Rogers, Allan
Love, Andrew Rooker, Jeff
McAllion, John Rooney, Terry
McAvoy, Thomas Rowlands, Ted
McCabe, Steve Ruane, Chris
McCafferty, Ms Chris Ruddock, Ms Joan
McCartney, Ian (Makerfield) Russell, Bob (Colchester)
McDonagh, Siobhain Ryan, Ms Joan
Macdonald, Calum Salter, Martin
McDonnell, John Savidge, Malcolm
McFall, John Sawford, Phil
McGuire, Mrs Anne Sedgemore, Brian
McIsaac, Shona Shaw, Jonathan
McKenna, Mrs Rosemary Sheerman, Barry
Maclennan, Rt Hon Robert Sheldon, Rt Hon Robert
McNulty, Tony Singh, Marsha
MacShane, Denis Skinner, Dennis
Mactaggart, Fiona Smith, Jacqui (Redditch)
McWalter, Tony Smith, John (Glamorgan)
McWilliam, John Smith, Llew (Blaenau Gwent)
Mahon, Mrs Alice Smith, Sir Robert (W Ab'd'ns)
Mallaber, Judy Southworth, Ms Helen
Marek, Dr John Spellar, John
Marsden, Gordon (Blackpool S) Squire, Ms Rachel
Marshall, David (Shettleston) Starkey, Dr Phyllis
Marshall-Andrews, Robert Steinberg, Gerry
Martlew, Eric Stewart, David (Inverness E)
Maxton, John Stewart, Ian (Eccles)
Meale, Alan Stinchcombe, Paul
Michael, Alun Stoate, Dr Howard
Michie, Bill (Shef'ld Heeley) Stott, Roger
Michie, Mrs Ray (Argyll & Bute) Stringer, Graham
Milburn, Alan Stunell, Andrew
Miller, Andrew Sutcliffe, Gerry
Mitchell, Austin Swinney, John
Moffatt, Laura Taylor, Rt Hon Mrs Ann(Dewsbury)
Moonie, Dr Lewis
Moore, Michael Taylor, Ms Dari (Stockton S)
Moran, Ms Margaret Taylor, Matthew (Truro)
Morgan, Alasdair (Galloway) Thomas, Gareth (Clwyd W)
Morgan, Ms Julie (Cardiff N) Timms, Stephen
Morgan, Rhodri (Cardiff W) Tipping, Paddy
Morley, Elliot Todd, Mark
Morris, Ms Estelle (B'ham Yardley) Tonge, Dr Jenny
Morris, Rt Hon John (Aberavon) Touhig, Don
Mudie, George Trickett, Jon
Mullin, Chris Truswell, Paul
Murphy, Denis (Wansbeck) Turner, Dennis (Wolverh'ton SE)
Murphy, Jim (Eastwood) Turner, Desmond (Kemptown)
Naysmith, Dr Doug Turner, Dr George (NW Norfolk)
Norris, Dan Twigg, Derek (Halton)
Twigg, Stephen (Enfield) Willis, Phil
Tyler, Paul Winnick, David
Wallace, James Winterton, Ms Rosie(Doncaster C)
Ward, Ms Claire Wise, Audrey
Wareing, Robert N Wood, Mike
Watts, David Woolas, Phil
Webb, Steve Wright, Anthony D (Gt Yarmouth)
Welsh, Andrew Wright, Dr Tony (Cannock)
Whitehead, Dr Alan Wyatt, Derek
Williams, Rt HonAlan(Swansea W)
Tellers for theNoes:
Williams, Alan W (E Carmarthen) Mr. Robert Ainsworthand
Williams, Mrs Betty (Conwy) Mr. Jim Dowd.

Question accordingly negatived.

9 pm

Mr. Gary Streeter (South-West Devon)

I beg to move amendment No. 66, in page 1, line 13, after '2', insert '(except paragraph 13)'.

The First Deputy Chairman

With this, it will be convenient to discuss the following amendments: No. 67, in page 1, line 1.3, after '2', insert '(except paragraph 32)'.

No. 68, in page 1, line 13, after '2', insert '(except paragraph 33)'.

No. 69, in page 1, line 13, after '2', insert '(except paragraph 26)'.

No. 70, in page 1, line 13, after '2', insert '(except paragraph 45)'.

No. 71, in page 1, line 13, after '2', insert '(except paragraph 52)'.

No. 72, in page 1, line 13, after '2', insert '(except paragraph 53)'.

No. 73, in page 1, line 13, after '2', insert '(except paragraph 54)'.

No. 74, in page 1, line 13, after '2', insert '(except paragraph 6)'.

No. 75, in page 1, line 13, after '2', insert '(except paragraph 31)'.

No. 76, in page 1, line 13, after '2', insert '(except paragraph 55)'.

No. 7, in page 1, line 13, at end insert '(except Article 2 paragraph 44)'. No. 61, in page 1, line 13, at end insert 'except Article 2(16)'. No. 25, in page 1, line 13, at end insert 'other than in Article 2, paragraph 6)'. No. 30, in page 1, line 13, at end insert 'other than in Article 2, paragraph 12)'. No. 31, in page 1, line 13, at end insert 'other than in Article 2, paragraph 13)'. No. 32, in page 1, line 13, at end insert 'other than in Article 2, paragraph 14)'. No. 35, in page 1, line 13, at end insert 'other than in Article 2, paragraph 21)'. No. 37, in page 1, line 13, at end insert 'other than in Article 2, paragraph 23)'. No. 38, in page 1, line 13, at end insert 'other than in Article 2, paragraph 24)'. No. 40, in page 1, line 13, at end insert 'other than in Article 2, paragraph 26)'. No. 41, in page 1, line 13, at end insert 'other than in Article 2, paragraph 27)'. No. 42, in page 1, line 13, at end insert 'other than in Article 2, paragraph 28)'. No. 43, in page 1, line 13, at end insert 'other than in Article 2, paragraph 29)'. No. 45, in page 1, line 13, at end insert 'other than in Article 2, paragraph 31)'. No. 46, in page 1, line 13, at end insert 'other than in Article 2, paragraph 32)'. No. 47, in page 1, line 13, at end insert 'other than in Article 2, paragraph 33)'. No. 48, in page 1, line 13, at end insert 'other than in Article 2, paragraph 34)'. No. 49, in page 1, line 13, at end insert 'other than in Article 2, paragraph 35)'. No. 50, in page 1, line 13, at end insert 'other than in Article 2, paragraph 36)'. No. 57, in page 1, line 13, at end insert 'other than in Article 2, paragraph 44)'.

Mr. Streeter

This group of amendments deals with two specific issues: the extension of qualified majority voting agreed at Amsterdam, and the extension of the power of the European Parliament, particularly its co-decision powers. On both issues, the Amsterdam treaty amounts to a significant transfer of influence from this Parliament to the institutions of the European Union. On both issues, new Labour failed at Amsterdam. A Government without values and principles have returned to the House of Commons with a treaty that has failed the people of Britain and failed the people of Europe.

It is not part of my argument to maintain that the 15 extensions of qualified majority voting—20, if we include the social chapter—contained in the Amsterdam treaty, and the 23 additional areas in which the European Parliament has been given a veto, constitute in themselves the end of the United Kingdom as a sovereign nation state. Clearly they do not, and we do not pretend that they do. It is my strong and passionate conviction that the concessions that our negotiators gave away at Amsterdam were wholly unnecessary. They represent a significant reduction in the influence of this Parliament and of the British Government, and an increase in the influence of the EU institutions, so there is a transfer of power from the House to Brussels. Those concessions have been given away with nothing in return for the British people.

Mr. Radice

I am glad that the hon. Gentleman admits that the treaty of Amsterdam does not amount to a threat to the nation state. I listened carefully to the shadow Foreign Secretary, who said on a number of occasions that, if we signed up at Amsterdam, it would be a grave threat to the nation state. How can the hon. Gentleman square his position with what his right hon. and learned Friend said before the election?

Mr. Streeter

I can do so very easily. The hon. Gentleman misquotes me. I said that the extension of qualified majority voting and the extra powers given to the European Parliament—not the Amsterdam treaty as a whole—do not, of themselves, undermine the nation state. Many months ago, my right hon. and learned Friend made it clear that, had it been passed, the original agenda for the Amsterdam summit would have brought an end to the nation state. He did not make those comments about the consequences of the summit. Nor has the hon. Gentleman heard him say that in any of the debates, at all of which I have been present.

Mr. Gapes

If the original remarks were about the agenda, is that why the Conservative party is no longer pressing for a referendum on the Amsterdam treaty? Does it now recognise that it is a modest treaty which brings about no significant or serious change?

Mr. Streeter

Having heard the hon. Gentleman's contributions over the past three days of the debate, I believe that he would sign up to anything that comes out of Brussels. Provided that it has the word "European" in it, he is happy—never mind the consequences, or the heart or content of the policy. If it is European, he loves it; that is all he has to say.

Before Labour's negotiators even landed in Amsterdam, they revealed their hand to our partners. Before they even arrived at the Council meeting, our partners were licking their lips at the great new Labour giveaway. Before the Minister jogged even halfway through the tunnel, leaving his Union Jack shorts behind, the team awaiting him at Brussels were rubbing their hands—

Mr. Menzies Campbell (North-East Fife)

Come on. Keep a straight face.

Mr. Streeter

How can I keep a straight face? I am telling a joke.

Mr. Blunt

My hon. Friend makes a good point. It is illustrated by the fact that, when in opposition, Labour announced the concessions that it would give before it entered the negotiations. No wonder it got such a rotten deal.

Mr. Streeter

That is absolutely right. My hon. Friend eloquently makes the point that I am seeking to make. Before they even left this country to go to the summit, the Government told the world media all the things that they were to give up. What a way to negotiate. No wonder they got such a bad deal.

Dr. Stephen Ladyman (South Thanet)

The hon. Gentleman's thesis appears to be that the agenda for the Amsterdam treaty talks would have led to the death of the nation state. The negotiators came back with nothing as serious as that, yet, somehow, he is not giving the Government credit for coming back with something better. I do not follow that argument.

Mr. Streeter

The hon. Gentleman does not follow the argument because he is incorrect in his assessment. The original Amsterdam summit agenda from some of our European partners and from the Commission was the issue that we were discussing, not this country's negotiating position. This country's negotiating position was seriously undermined as a result of the implications of 1 May.

Our partners were licking their lips at the great new Labour giveaway. They knew that this Government had a clear agenda: to give away Britain's competitive advantage under the social protocol, Britain's veto and Britain's position of negotiating strength, established over many years. As my hon. Friend the Member for Reigate (Mr. Blunt) has said, new Labour had already said that it was going to give all that away, so the other member states did not have to offer a single concession in return. Given that sorry performance, I am surprised only that the Government bothered to translate the treaty into English.

One thing is clear: new Labour does not know how to negotiate. Its negotiators did not achieve the best deal on offer. It let itself, the House and Britain down. What a contrast with our approach.

Mr. Roger Casale (Wimbledon)

The hon. Gentleman suggests that the Labour Government caved in on QMV, but, in certain areas, we view QMV as positive, and we positively campaigned on it. How can he say that we positively campaigned for QMV, and then, when we achieved what was our negotiating objective, say that we caved in? That is illogical.

Mr. Streeter

The hon. Gentleman makes a valid point. Yet again, the Labour party does not know how to stand up for British interests. It does not understand how the European Union works.

Mr. Doug Henderson

Does the hon. Gentleman agree that the previous Government wanted to include in the Amsterdam treaty provisions to counter fraud? Does he also accept that, because the previous Government were so isolated from the negotiations and would not talk to the others, and the others would not talk to them, they were unable to make any progress to counter fraud? If one is to have an effective provision to tackle fraud, it has to be by qualified majority voting or the country that has been accused of mismanagement of funds will veto it. Does the hon. Gentleman accept that that is a positive example of where it has been necessary to have QMV? Because the Conservative Government were so isolated from the negotiating proceedings, they could achieve nothing. A good deal was achieved by the Labour Government, in addition to many other things.

Mr. Streeter

I say it again: the Minister does not understand how Europe works. One of the fundamental reasons for retaining the veto is to enable better negotiations to take place. It is often the veto which will bring people to the negotiating table. The fact that our proposals on fraud did not attract full support one month, two months or three months away from the summit does not mean that they would not have been agreed at the weekend of the summit itself. The Minister knows, or should know, that things are often agreed at the very last minute at European summits. It is the countries that preserve their veto and are prepared to use it which can bring others to the negotiating table. The Minister is the one who has signed away so many of our rights with nothing in return.

Mr. Cash

It seems that the Minister completely misunderstands the problems that can arise when it comes to countering fraud and that he misunderstands the role of the Court of Auditors. In practice, it is precisely because so many of the other member states have not been interested in dealing with fraud—and, as far as one can judge, are still not—that qualified majority voting will not work in our favour. There need to be serious changes, including changes to the procedures of the Court of Auditors, so that each member state has proper arrangements for dealing with fraud at a national level. Those arrangements should be in line with the arrangements that we have, which include the Comptroller and Auditor General and the Public Accounts Committee. That would be the way to get all member states to adopt proper anti-fraud measures.

Mr. Streeter

I am grateful to my hon. Friend for that intervention. As usual, he makes a telling and important point which has great substance.

The Minister will say that we agreed to QMV in the Single European Act. Of course we did, and we got the single market in return, which has brought greater benefits to Britain than to any other European country. We accepted QMV in limited areas for a specific purpose and got a real benefit in return. That simply did not happen at Amsterdam.

The Government may also say that we agreed new areas of QMV at Maastricht, and of course we did, but we got the vital opt-out from the social chapter and from economic and monetary union in return. I must add that it is the very opt-out from EMU which the Government are now exercising to the full, showing how important it was that we won it in the first place. No such victories were won at Amsterdam.

Mr. Radice

Is it not the case that, as the Library's research paper on the Bill states: Member States are required to take the same measures to combat fraud affecting the financial interests of the Community as they take regarding similar fraud affecting their own interests"?

Mr. Streeter

I am familiar with those words. I have to say that I have compared the way we do things in this country with the way things are done in some other European Union countries, especially the Mediterranean ones, and those words do not reassure me at all.

We made it clear in our manifesto that the Single European Act and the Maastricht treaty established appropriate limits to the scope of application of QMV. When the Conservative Government agreed to extensions of QMV, we made sure that the people of Britain got a good deal in return. What this Government have done is to give yet more extensions of QMV at Amsterdam—wholly unnecessary extensions—and get nothing in return.

Let us remind ourselves of what the Foreign Secretary claimed to have achieved for the nation at Amsterdam in exchange for these concessions. On 12 November, he claimed two major gains in Britain's national interest. The first, he said, was the protection of our frontier controls, but my right hon. and learned Friend the shadow Foreign Secretary demonstrated that Dutch presidency had already accepted in March this year—two months before the general election— that we would never give up our border controls.

That first major achievement for Britain heralded by the Foreign Secretary was precisely that— a Major achievement, negotiated by the former Prime Minister, my right hon. Friend the Member for Huntingdon (Mr. Major). It was something which the previous Government had already achieved, as was widely acknowledged earlier in the year by the press.

The second achievement claimed by the Foreign Secretary was that attempts to incorporate the Western Europe Union as the defence arm of the European Union had been prevented. However, for the first time, the treaty— in article J.7— includes the words: The Union shall accordingly foster closer institutional relations with the WEU with a view to the possibility of the integration of the WEU into the Union, should the European Council so decide. As many Conservative Members have already pointed out, that is not what the Foreign Secretary claimed in the debate on article 1. The paragraph gives the Commission all the legal scope that it needs to start the gradual process of integration— for which it is so famous and at which it is so skilled— of the WEU into the EU.

9.15 pm
Mr. Menzies Campbell

The hon. Gentleman is undoubtedly already thoroughly familiar with article J.7. If it is a matter of, as the language says, should the European Council so decide", am I right in thinking that there would have to be a unanimous decision of the entire Council and that, so long as the United Kingdom retained the veto to which he referred, the measure could not be imposed on it?

Mr. Streeter

In theory, the hon. and learned Gentleman is correct, but my point is a different one. The wording of article J.7 would give the Commission the legal scope to start work on the integration process—to get its ducks in a row—by persuading, encouraging and cajoling member states to sign up for the agenda that it desired. For many years, that has been the Commission's tendency. Clause 1 would give it the scope to do precisely that.

Mr. Blunt

The hon. and learned Member for North-East Fife (Mr. Campbell) has missed the point that article J.7 is part of a progressive framing of a common defence policy.

Mr. Menzies Campbell

Like Maastricht.

Mr. Blunt

Not like Maastricht; the word progressive was not in that treaty. The word "progressive" was conceded by the Government, for nothing in return.

Mr. Streeter

My hon. Friend is absolutely right and picks up the theme of this debate: so many concessions were given by the Minister, the Prime Minister and the Foreign Secretary at Amsterdam, with nothing in return. My hon. Friend has mentioned one more concession.,

The Foreign Secretary's claim rings hollow. Even he could find nothing else in the Amsterdam treaty that he could trumpet as compensation for the people of Britain for the many concessions that they have made. There was nothing for Britain's fishermen or farmers, nothing to help Britain's exporters and not a single step towards completion of the single market. All those concessions were made with nothing in return.

Mr. Casale

I am grateful to the hon. Gentleman for shedding some light on the general thrust of his argument. At the start of his speech, he seemed to suggest that he was against qualified majority voting in principle. He has now moved on to say that, in some areas, the national interest may be served by qualified majority voting, and that he would support it in those cases. I am confused now, however, about the argument that he seems to be making that changes to the EU's institutional arrangements have been agreed because we get some concession or trade-off in another area. The previous Prime Minister, Margaret Thatcher, agreed to so many changes to qualified majority voting so that we could have a single market. The changes were the means to that end.

Similarly, changes have been agreed in other areas to enable us to have the benefit—

The First Deputy Chairman

Order. The hon. Gentleman cannot make a speech in an intervention.

Mr. Streeter

The hon. Gentleman has not been listening to my points. If he does not yet understand that Europe works precisely in the way that he has described, he has a lot to learn.

Equally important to our long-term interests is the Government's failure to play Britain's strongest card in institutional reform. They gave away our second Commissioner and got nothing in return. Before the Amsterdam summit, there was an unshakeable link between vote weighting and the number of Commissioners.

The Committee will be aware that we have 10 votes in the Council of Ministers for 56 million people in the United Kingdom. That is one vote for every 5.6 million people. Luxembourg had two votes for 400,000 people. That is one vote for every 200,000 people. Luxembourg is 28 times over-represented compared with the UK. There is a similar pattern in the distribution of the 626 Members of the European Parliament. The five big countries are under-represented compared with the smaller nations.

In the past, our under-representation has been reflected by our second Commissioner. It was understood that we would give up that second Commissioner only in exchange for significant changes in the balance of power on the Council of Ministers and a redistribution of Members of the European Parliament. Article 1 of the protocol on page 88 of the revised treaty makes it clear, however, that, at the Amsterdam summit, Britain agreed for the first time in a legally binding protocol, on which others may rely in the Court of Justice, to give up its second Commissioner. That was Britain's trump card and it has been surrendered without a struggle. Our second Commissioner was given away without any binding agreement on vote weighting.

Mr. Doug Henderson

Does the hon. Gentleman accept that a change in the number of Commissioners is subject to a reweighting of votes? We specifically achieved that in the negotiations.

Mr. Streeter

The hon. Gentleman may not have read the wording of the treaty sufficiently carefully, as I shall explain.

The lost British influence is not to be restored by voting arrangements in the Council of Ministers, which more closely reflects the balance of population—not a bit of it. The second British Commissioner has been given away in exchange for a vague proposal for a future arrangement either to reweight the votes or—wait for it—to incorporate the principle of dual majority into Council decision making.

Dual majority is of no use whatever to the British people. It gives us no more influence; not a single extra vote. It gives us only a recognition that the population of the states that vote for a proposal must be taken into account. That is hardly comforting in the face of the Franco-German alliance. Influence has been given away for nothing in return.

The Minister's response suggests that he did not know what he had signed. He thought that he had agreed to give away our Commissioner in exchange for a clear commitment on vote weighting. That is not so. It shows that the Minister has slipped up. We already know that the Government have failed to challenge the Spanish amendment on the opt-in on border controls, and now we seem to have discovered another blunder by our man in Brussels. He has failed us again.

Mr. Ian Bruce (South Dorset)

Does my hon. Friend agree—I hope that this point is helpful to the Minister—that we are debating amendments to a treaty which amends two treaties and certain Acts, yet we do not have a consolidated text? Clearly, Labour Members, who have not read the articles as well as my hon. Friend, are having difficulty in understanding what the issue is all about. Surely the Government should have provided a consolidated document which we could discuss.

Mr. Streeter

My hon. Friend makes a very important point. I have listened to almost all Labour Members' speeches over the past three sittings, and it seems that many of them have not read the treaty carefully. Many of them seem to be blinded by any piece of paper that says that it comes from Brussels.

If the Minister thinks that I am wrong on whether dual majority is of interest and any significance to British people, I invite him to get to his feet now to tell us how dual majority helps us in a decision-making process.

Mr. Doug Henderson

I have been specific. There is no question of the United Kingdom Government agreeing to any change in the Commissioners until there is a reweighting of the votes.

Mr. Streeter

I am even more worried than I was a few moments ago. The Minister has not read his brief properly, he has not read the treaty properly and he has not read the protocol properly. He has made another blunder.

That is bad enough, but the situation is worse. Not only will we give away our second Commissioner by 2003, to gain nothing in return, but the Government seem to have agreed, in article 2 of protocol D, that when the EU is enlarged to more than 20 states, there can be fewer Commissioners than member states. That means that we could be without a Commissioner. What a negotiating triumph! That is why I say with such conviction that the new Labour Government failed at Amsterdam. They failed the House of Commons, they failed this country and they failed our people.

The Government did not stop failing there. They also gave away more power to the European Parliament. They gave more power to a Parliament that approaches legislation as though it were playing a game of poker▀×it deals itself extra cards every time. They gave more power to Labour MEPs such as David Martin, Vice-President of the European Parliament, who said: A socialist superstate is exactly what we do want to create. They gave more power to MEPs who voted in September 1995 for the liberalisation of drug use, declaring that drug dependence is … not a crime which calls for punishment and that drug users should not be prosecuted unless actively involved in production, trafficking or dealing. They gave more power to Labour MEPs who voted in March 1996 to increase the number of fruits and vegetables included in common agricultural policy price support, even though the Labour party committed itself to the abolition of the CAP in 1994. They gave more power to Labour MEPs who, in April 1996, called for an increase in the rate of income tax, saying: It is in the interests of all of us to … challenge the idea of cutting taxes.

Dr. Ladyman

Is the hon. Gentleman saying that the Conservative party has given up all hope of having more MEPs after the next elections?

Mr. Streeter

Not at all. I am simply pointing out what Labour's MEPs, who represent the people of this country in the European Parliament, are like. The Minister is happy to give them more power, gaining nothing for the British people in return.

Mr. Radice

What about those Conservative MEPs who support the treaty of Amsterdam?

Mr. Streeter

The hon. Gentleman should know that in our party we do not try to gag duly elected Members of Parliament, as the Labour party has disgracefully tried to do. They cannot even discuss issues that are relevant to their constituents. Labour should reconsider that.

I have an internal briefing note produced by the European Commission, dated 7 July 1997. This 12-page summary of the outcome of the Amsterdam summit for each Commissioner contains some interesting comments. Writing to itself, on page 9, paragraph 14, the Commission says, on the European Parliament: The European Parliament made two major gains at the Conference to become a genuine co-legislator and a full arm of the European legislature alongside the Council: Firstly the co-decision procedure has been considerably extended (see Annex p.1) essentially along the lines of the principle suggested by the Commission in its report of July 1996, whereby any instrument of a legislative nature should be adopted under the co-decision procedure between the European Parliament and the Council. Despite its public pronouncements, the Commission's private assessment of Amsterdam is that the European Parliament made major gains.

Let us consider what co-decision means. It is nothing short of Euro-speak for a parliamentary veto. The European Parliament has a veto over decisions of the Council of Ministers. Labour has handed over extensions of that veto in 23 new areas.

Dr. Ladyman

From my recollection of the Conservative party manifesto at the election, I believe that the Conservative party was in favour of increasing the powers of the European Parliament. It said that that was one of the aspects that needed reform. Is the hon. Gentleman now saying that that has changed and that the Conservative party is completely against the European Parliament?

9.30 pm
Mr. Streeter

The hon. Gentleman has obviously failed to read the treaty, and one can forgive him for that, but one cannot forgive him for failing to read the Conservative manifesto.

The power exercised in the legislative process in the EU is a delicate balance between national Parliaments, national Governments, the Commission, the Council of Ministers and the European Parliament. If the Government have agreed extensions of power to the European Parliament, which the Commission says they have, will the Minister tell us—I am happy to allow him to intervene—from whom the additional power has been taken? Has it been taken from the Commission? Not a chance. It has been taken from national governments and national parliaments, all for nothing in return.

Our objections to the failure of the Government do not relate only to the new areas in which co-decision is now to be used; they relate also to the complete failure to deal with problems in the day-to-day operation of the parliamentary procedures in Brussels. What efforts were made to counter the European Parliament's growing tendency to pack First Reading with spurious amendments to give itself areas in which it can force compromise during later conciliation; or is the Minister happy to see more than 600 amendments tabled, as during the progress of the trans-European network transport scheme; or is it the case that in Brussels, as in the United Kingdom, the Government simply do not understand the system that they are trying to reform?

Taken together with the increase in powers of the European Parliament and the extra powers that new Labour has given the President of the Commission, which we will discuss later, I hope that I have demonstrated to the Committee's satisfaction that the treaty represents a complete failure by new Labour. The Government have given up British influence with no extra influence in return. It is no wonder that, on page 2 of the private Commission assessment of the Amsterdam treaty, the Commission states: For the most part the Treaty delivered the goods. For whom? Perhaps the treaty delivered the goods for the European Parliament and the Commission, but it sadly did not deliver the goods for the British people.

The amendments demonstrate our determination to expose Labour's negotiating failures at Amsterdam. Let the Minister respond to this charge: why did he agree to so many concessions for so little in return? Let the Minister tell us in clear and detailed terms what benefits for Britain he brought back from Amsterdam in exchange for all the concessions.

Mr. Radice

One of the problems with the Conservative approach to European matters is the hyperbole of the language used. Nowhere has that been more true than in what Conservative Members have said about the Amsterdam treaty. Before the election, the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), who was then Home Secretary, said that the agenda for the Amsterdam negotiations would undermine the nation state. Treaties are based on agendas, so the right hon. and learned Gentleman was implying that signing up to the treaty would undermine the nation state. Clearly it would not, and even the right hon. and learned Gentleman has had to row back from that ridiculously exposed position, which he hoped would win the general election for the Conservatives.

I admire and like the hon. Member for South-West Devon (Mr. Streeter) and he spoke attractively today. However, he also used hyperbole. The Conservative party will not recover its health unless it sees the world as it really is, but Conservative Members go in for gross exaggeration on any European issue. On a whole series of previous amendments, they said that the social chapter would lead to the undermining of our competitive position, but one has only to read the chapter to see clearly that it is fairly innocuous.

Mr. Ian Bruce

Will the hon. Gentleman give way?

Mr. Radice

No, I do not want to tempt myself down that path. I must return to the subject of the amendments.

The Conservative party has grossly overestimated the impact of Amsterdam. As the right hon. and learned Member for Rushcliffe (Mr. Clarke) said, it is very modest: a mouse of a treaty. It is so modest that I am surprised that he voted against it; perhaps it was a tactical decision, which may have been sensible from the point of view of his position in his party.

The treaty does not undermine the nation state. There was some limited extension of qualified majority voting—

Mr. Swayne

Will the hon. Gentleman give way?

Mr. Radice

No, I want to finish what I am saying.

There was a limited extension of qualified majority voting which was matched by a limited increase in the co-decision powers of the European Parliament. Those go together, because the best way to deal with the problem of accountability that arises with qualified majority voting is through the European Parliament.

I do not see anything particularly wrong with qualified majority voting in many areas, because I do not believe that Britain will always be in a minority of one on every issue. The problem with the Conservative party is that its assumption is that we shall never have any friends in the European Union, and that those awful continentals are so terrible and look at everything in such a totally different way from us that we shall never be able to form alliances with them.

That was a gross exaggeration even under the Conservative Government, who did occasionally find some people who would vote with them; but the new Labour Government has several obvious partners and is acting with them for the good of Europe. That is the sensible way in which to proceed. Of course there are some key areas in which we should retain the national veto; any Government would do that for the foreseeable future.

Mr. Bercow

Oh!

Mr. Radice

I said "for the foreseeable future"—I thought that the Conservative party was rather enthusiastic about that formula.

The key areas include taxation, own resources, foreign policy, defence and immigration. It may be that in my son, daughter's, grandson's or granddaughter's time, there will be some change in one of those areas—I cannot foresee the future—but as things stand, that is how we conduct things.

If one wants to tackle fraud, it is sensible not to give individual nations vetoes with which they can stop Europe as a whole doing something about it. If fraud is so important—the Conservative party clearly believes that it is, and so do we—that is an obvious area for qualified majority voting.

Similar arguments are relevant for research spending and for greater openness in the European Community. Most people would like greater openness, so we do not want one country blocking procedures to develop it. That is a sensible argument, and I do not understand why the Conservatives make such a song and dance about it. The Conservative party is so ideological that it cannot see things as they are.

Mr. Swayne

Regardless of whether it is ideological or understandable, will the hon. Gentleman accept that when the previous Prime Minister said during the general election campaign that the then Leader of the Opposition would give up the British veto in six areas the right hon. Gentleman denied it—and then gave it up in 16 areas?

Mr. Radice

That does not really fall together with the charge that we made concessions before we actually started to negotiate. We set out our negotiating objectives because we believe that it is a good thing to work together in some areas, even if the Conservative party thinks that it is a bad idea to work together with any continentals on any issue. We happened to think that there were sensible objectives.

Mr. Brady

I fear that the hon. Gentleman is confusing working together from choice with—as can happen with QMV—being compelled to do something against one's wishes.

Mr. Radice

It is true that it is possible that fraud might be committed in our country and we might say that we would like to resist QMV. I believe that it would be a sensible thing for the good of Europe for the articles about fraud to apply on a qualified majority vote. I do not hold the view that any qualified majority voting is, per se, a bad thing.

In the days of the Maastricht treaty, Conservative Members expressed some concern about QMV. In the days of the Single European Act, the former Prime Minister, Lady Thatcher, occasionally said the kind of things that we have heard from Conservative Members tonight. She was a practical person, however, and she realised that if one wanted to create a single market one had to have QMV because she did not want a situation in which a country could block progress in areas vital to this country. Qualified majority voting has probably benefited this country far more than any other country on the single market issue.

Mr.Cash

rose

Mr. Bercow

rose

Mr. Radice

I give way to the hon. Member for Stone (Mr. Cash), who is a veteran of such debates.

Mr. Cash

The hon. Gentleman may care to bear in mind something that has not been mentioned so far in the debate: QMV in relation to public health, particularly in relation to the BSE crisis on which we had a statement today. Does he really believe that it would be in the interests of the United Kingdom to have QMV, as expressed in an article that appeared a couple of months ago in theHealth Service Journal, which quite clearly suggests that there would be serious implications if one extended QMV to BSE? We would then never be able to get out of the current crisis.

Mr. Radice

Once again, the hon. Gentleman is using hyperbole. The problem about the hon. Gentleman, whose speeches I have listened to with great attention over many years, is that he invariably exaggerates the position. Even when he has a good case, he lets it down because he always make the situation sound so terrible. It is not. Normally, QMV is a practical way in which to proceed. Practical politicians from European countries get together and say what is in their best interests; often, QMV is the best way in which to proceed.

Mr.Michael Jabez Foster (Hastings and Rye)

My hon. Friend is an expert in such matters. Can he tell me how many times the previous Government agreed to QMV? Am I right in believing that they did so on 42 occasions?

Mr. Radice

Yes, but that was when they were in government. It is much easier in opposition to act as a fine, principled Opposition and be against any extension of QMV.

Mr. Bercow

rose

Mr. Radice

I know what the hon. Gentleman is about to ask: whether I am in favour of this—yes or no?

Mr. Bercow

I am sorry to disappoint the hon. Gentleman. I am listening to his contribution with rapt attention. Does he accept that a continuous extension of QMV will ultimately break the umbilical cord which links the Government and the governed?

Mr. Radice

No, provided one retains exemptions that are key issues in the operation of the nation state. In other areas, such as fraud, QMV is plain common sense. That is what Amsterdam is about. I know that the hon. Gentleman wants to exaggerate and, as I have listened to him today, he has tended to do so. If he wants to use hyperbole, he will say such things about QMV. He has already spoken about the ratchet effect; in my view, we are not witnessing such an effect, but the sensible way to proceed.

Mr. Bercow

rose

Mr. Radice

No, I want to get on.

It is certainly true that it would be impossible to develop the single market without the development of QMV. I know that Conservative Members would like to deny the facts of geography, history and culture which prove that we are a European country. We are in the European Union and we can act together with our partners on a range of issues. In some areas we will want QMV, but not on the crucial issues.

If one has QMV and one is interested in accountability, that cannot be achieved only through the national Parliament. I am pleased to see that some reforms have been introduced—they were not mentioned by the hon. Member for South-West Devon—which will help this Parliament to scrutinise European legislation. For example, there will be legally binding minimum periods for the scrutiny of European Union documents. That is useful, and I am surprised that the hon. Member for South-West Devon did not congratulate the Government on signing up to that. Co-decision is sensible, because if we are to have qualified majority voting, and if we are interested in accountability, we have to enhance the position and strength of the European Parliament. I am not frightened of the European Parliament, but the hon. Member for South-West Devon appears to be.

9.45 pm
Mr. Brady

Does the hon. Gentleman believe that the accountability that we derive through the European Parliament will be enhanced or lessened by the Government's proposals to change the system of election to the European Parliament, which will mean that his constituents and mine will not know for whom they are voting in the European elections?

Mr. Radice

I am in favour of proportional representation both in a general sense and in respect of the European Parliament, where it is sensible for the Parliament to reflect the votes cast. The swings between the parties resulting from small changes in votes under a first-past-the-post system—

The Second Deputy Chairman of Ways and Means (Mr. Michael Lord)

Order.

Mr. Radice

I was answering a question.

The Second Deputy Chairman

I am well aware that the hon. Gentleman was answering a question, but I would be grateful if he would now get back to the amendment in hand.

Mr. Radice

I am grateful, Mr. Lord. I think that I answered the hon. Gentleman's question to my own satisfaction, if not to his.

Mr. Bercow

Will the hon. Gentleman give way?

Mr. Radice

I hope that the hon. Gentleman is not going to take up the question asked by the hon. Member for Altrincham and Sale, West (Mr. Brady) after what we have just heard from the Chair.

Mr. Bercow

If the hon. Gentleman does not accept that there is currently a ratchet effect working in favour of increased powers for the European Parliament, will he kindly explain to the Committee when there has ever been a repatriation of powers from the European Parliament to the House of Commons? If he cannot demonstrate that there has ever been such repatriation, it follows that there is a ratchet effect working.

Mr. Radice

I thought that it was going to be one of those ratchet-effect arguments—[HoN. MEMBERS: "Answer."] I am not concerned about that, because we are increasingly working together as European nations on a whole range of issues. I rejoice in that fact, just as I rejoice in the fact that we do not have war. Such co-operation is a way to bind us together. The establishment of the single market means there are other areas in which we want to combine and co-operate, and that is precisely what is happening. If that is to be done at the level of the Council of Ministers, the European Parliament requires increased powers. That is precisely what we have got and I rejoice in that.

If I may correct the hon. Member for South-West Devon on one point, the European Parliament's powers have been increased vis-à-vis the Commission and especially vis-à-vis the President. For the first time, the Parliament will have the power to veto the nomination of the President, and I am in favour of that, although I am sure that the hon. Gentleman is not. He was therefore incorrect to say that there had been no change in the relationship between the Parliament and the Commission.

Mr. Collins

The hon. Gentleman refers to provisions in the treaty that would give the European Parliament a right of veto over the appointment of the President of the Commission. That is to transfer powers away from the Council of Ministers and therefore from national Governments. It in no way answers the point raised by my hon. Friend the Member for South-West Devon (Mr. Streeter) about transferring powers away from the Commission.

Mr. Radice

No, but it is giving powers to the Parliament vis-à-vis the Commission. That was an important change. It is a useful increased power for the Parliament.

Mr. Menzies Campbell

In considering the ratchet, or the lack of it, has the hon. Gentleman given any thought to the protocol on subsidiarity with regard to the Amsterdam treaty, which alters the onus of proof in relation to whether these matters should be dealt with at Community level or otherwise?

Mr. Radice

The idea of the founding fathers that the European Union would end up as a federal state or a federal super-state has now been undermined, and it was undermined at Maastricht by the subsidiarity clause which ensured that those areas where the nation state would be important should be given priority. One of the problems was that other European countries—I know that the hon. and learned Gentleman agrees with me here—also saw that as giving more power to the regions and local communities. The Liberal Democrats obviously did not, so their idea of subsidiarity was a partial one.

This is a modest treaty and a modest extension of qualified majority voting. Any British citizen, not blinkered in the way that Conservative Members are, would support this perfectly sensible measure. They would also support the corresponding increase in the co-decision powers to the European Parliament. One follows from the other.

I congratulate my right hon. and hon. Friends on what they have done in this area. They have behaved in a sensible and pragmatic way. They looked at matters as they are and they had objectives. They did not give away the nation state. Such talk is for the birds. Rather, they promoted Britain's interests, in some cases by retaining the national veto and in others by co-operating and accepting qualified majority voting with our European partners.

Mr. Collins

This group of amendments goes to the heart of the bungled negotiating tactics and the missed opportunities which the treaty represents. As we have heard so much about the allegation that it is not possible to criticise the treaty without being anti-European, let me make what I hope the Committee will regard as an unambiguously pro-European case for the amendments

Like the hon. Member for North Durham (Mr. Radice), I was born a European and I will die a European. That is a fact of having been born in these islands. It is inevitable historically, culturally and geographically. Like the hon. Gentleman, I salute the fact that in the EU we have an institution which has brought together countries which, for centuries, have fought against each other, which has helped to create a single market which is open to British goods, and to which it is fundamentally in the national interest to belong.

However, that does not answer any of the issues before us today. Those issues concern the nature of the Europe to which we belong, not whether we belong to Europe. The difficulties with the extensions of qualified majority voting which the treaty and the Bill provide are twofold because they help to undermine precisely some of the merits and advantages that have led the Conservative party, clearly and consistently, to be in favour of British membership of the European Community.

In parentheses, since Labour Members always accuse us of 18 years of missed opportunities in Europe, it is worth noting that 14 years ago—within that time frame—the Labour party was advocating our entire withdrawal from Europe.

The key point about qualified majority voting is that it changes the nature of the organisation and government of the European Union. I fear that, in so doing, it challenges and starts to undermine the essential element of popular legitimacy that is required for any national or international organisation to operate.

Specifically, among existing member states the present treaty provisions will remove, over ever-expanding areas of policy, decision making from the national Parliament and the national Government with which all European citizens can most naturally identify, and will—fatally— start to undermine the feeling that even European institutions are organised on a proper democratic basis.

My hon. Friend the Member for South-West Devon (Mr. Streeter) drew attention to the fact that a great opportunity had been missed for an exchange, if any concessions were to be made at all, at least for a better deal on qualified majority voting. The extensions in the treaty will mean that in even more areas it will be possible for Governments representing the majority of the people of Europe to be outvoted by countries and Governments representing a minority of the peoples of Europe.

The hon. Member for North Durham thought that to oppose qualified majority voting one had to believe that it was possible for the United Kingdom to be frequently on its own. That is not how qualified majority voting works. Qualified majority voting means that even if we have a number of allies we can still be outvoted and have measures imposed on us against our consent and that of others. As the Union expands, the number of allies needed will grow and the chances of our being outvoted, even with a number of allies, will grow. We missed an opportunity to alter the way—

Dr. Ladyman

The hon. Gentleman is developing an interesting theme. He says that one day it may be possible for a minority to take decisions that the majority in Europe do not agree with. Is that not the basis on which, for the past 18 years, the Conservatives ran this country?

Mr. Collins

It happens to be the basis on which the Labour party currently runs the country, as it only secured 42 per cent. of the vote, so I hardly think that that argument advances things for the hon. Gentleman.

An opportunity was missed to start to restructure the government of the European Union in ways that would bring its decision making closer to the people. One missed opportunity was the opportunity to restructure the operation of qualified majority voting. Another opportunity, which would have addressed the point raised by my hon. Friend the Member for Buckingham (Mr. Bercow) and sidestepped by the hon. Member for North Durham, was the missed opportunity to tackle the ratchet effect by demonstrating that the protocol on subsidiarity, of which we have heard much, has some practical effect. If it has, let us see a few directives, and a few competences, repatriated or reversed.

Mr. John Hayes (South Holland and The Deepings)

In developing this argument about democratic legitimacy, which I believe that he does appropriately, will my hon. Friend agree that the effect is multiplied by the increasing remoteness of the exercise of power and incomprehension on the part of the electorate? The point about the exercise that we are going through, which the treaty exacerbates, is that the vast majority of the electorate throughout Europe do not understand how those processes work because the thing is so deliberately esoteric, so that democratic legitimacy is not delivered on that basis as well as on the basis that my hon. Friend is explaining to the House.

Mr. Collins

I agree with my hon. Friend and I am grateful for the points that he makes.

The greatest achievement and the greatest purpose of the European Union may be to entrench democracy and to spread an area of peace across Europe. For that reason, the top priority for those negotiating on behalf of our country at Amsterdam should have been to make the Union flexible enough for rapid expansion. The argument that is usually advanced by the Labour party and other advocates of qualified majority voting is that more QMV makes it easier to expand the European Union. I want to argue that in many respects that is contrary to the truth.

Most of the aspirant nations of central and eastern Europe which wish to join the European Union are members of the Organisation for Security and Co-operation in Europe, all of whose decisions are taken on a unanimity basis. Most of them are likely to join the North Atlantic Treaty Organisation at the same time as, if not before, they join the European Union, although NATO's decisions are taken on a unanimity basis. Most of those nations are most likely to be able to play a full and active part in the future destiny of the European Union if the European Union is not so inflexible and entrenched in its decision-making processes that it believes that every measure of legislation or directive or Community action must be imposed on every member in the same way at the same time.

The risk of expanding qualified majority voting in the way that is set out in the treaty and the Bill is that we entrench a model of the European Union that is centralised, uniform and inflexible. It will say to the countries of eastern Europe, "We are delighted that you pulled down the Berlin wall and expelled your communist dictatorships, but now we in western Europe will erect a new iron curtain to keep you out from your European home"—

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

To report progress and ask leave to sit again tomorrow.—(Ms Bridget Prentice.)

Committee report progress; to sit again tomorrow.

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