MEANING OF "THE TREATIES" AND "THE COMMUNITY TREATIES"

HC Deb 27 November 1997 vol 301 cc1129-89 5.55 pm

Mr. Michael Howard (Folkestone and Hythe)

I beg to move amendment No. 65 in page 1, line 12, at end insert— 'but (for the avoidance of doubt) not Article 1 of the said Treaty.'.

The Chairman of Ways and Means (Sir Alan Haselhurst)

With this, it will be convenient to discuss the following amendments: No. 13, in page 1, line 13, after '(i)', insert 'Article 1 (other than paragraph 1)'. No. 14, in page 1, line 13, after '(i)', insert 'Article 1 (other than paragraph 3)'. No. 15, in page 1, line 13, after '(i)', insert 'Article 1 (other than paragraph 5)'. No. 17, in page 1, line 13, after '(i)', insert 'Article 1 (other than paragraph 10)'. No. 18, in page 1, line 13, after '(i)', insert 'Article 1 (other than paragraph 11)'. No. 19, in page 1, line 13, after '(i)', insert 'Article 1 (other than paragraph 12)'. No. 20, in page 1, line 13, after '(i)', insert 'Article 1 (other than paragraph 13)'. No. 21, in page 1, line 13, after '(i)', insert 'Article 1 (other than paragraph 14)'. No. 1, in page 1, line 13, after 'Articles', insert '1, other than the words in paragraph 5, (Cm. 3780, page 9) "and through the establishment of economic and monetary union, ultimately including a single currency in accordance with the provisions of this Treaty".'. New clause 30—Extension of jurisdiction of European Court of Justice: legal advice— '.—This Act shall not come into force until Her Majesty's Government has obtained specific legal advice from the Attorney General setting out the extent to which the provisions on police and judicial co-operation in criminal matters in Article 1 para 11 of the Treaty of Amsterdam extend the jurisdiction of the European Court of Justice in the United Kingdom, such advice to form the basis of a report to each House of Parliament and to be subject to an affirmative resolution.'. New clause 37—Relations between European Union and WEU— '—The Government will not take any steps to foster relations between the European Union the WEU with the view to the possibility of the integration of the WEU into the Union, as contemplated by Article 1, paragraph 10 [Article J.7] of the Treaty of Amsterdam, without first tabling a motion in each House of Parliament which shall be subject to affirmative resolution.'. New clause 38—Common foreign and security policy— '—The Government shall not take any steps to participate in the decision making arrangements as set out in Article 1 paragraph 10 [Article J.13 1 and 2] of the Treaty of Amsterdam, without first tabling a motion in each House of Parliament which shall be subject to affirmative resolution.'.

Mr. Howard

Today, we begin our detailed examination of the treaty of Amsterdam. That treaty was the first major test of the Government's attitude to important international negotiations. We can assess their performance by reference to a number of criteria. How successful were they in achieving their declared objectives? Did they press and persuade our partners in the European Union to come round to Britain's way of thinking when they might initially have been disposed to take another view? Were they steadfast in resisting the views of our partners when those views did not reflect this country's interests or represent the best way forward for Europe as a whole?

On all those criteria, the previous Government's record was impressive. We demonstrated that it was possible to take a leading role in Europe—hon. Members need look no further than the single market for an outstanding example of that—while successfully safeguarding Britain's interests.

I hope that, after the Foreign Secretary's extraordinary revelations on Tuesday we shall hear no more about the wonderful spirit of co-operation that has supposedly been brought about by the Government's attitude to Europe. Last Tuesday, we were told that, after the summit had ended, Spain and the Dutch presidency had reached a bilateral agreement. That deal made a significant change in the treaty and one that was detrimental to Britain's interests. Moreover, it is in direct contradiction with what the Prime Minister told the House on his return from Amsterdam on 18 June. It is an extraordinary allegation to have made. If true, it gives the lie in the clearest possible way to the Government's pretensions and so-called achievements in Europe.

Let us examine the present Government's performance against those criteria.

Mr. Mike Gapes (Ilford, South)

Is the right hon. and learned Gentleman saying that the previous Government, with their policy of stopping the show at the negotiations, would have got a successful agreement with all the other European Union countries? Or is he saying that he disagrees with the policy of the former right hon. and learned Member for Edinburgh, Pentlands and would not have adopted that approach if he had been Foreign Secretary at that time?

Mr. Howard

I have no doubt that the previous Government would have obtained a successful outcome at Amsterdam and one that would have differed significantly from that obtained by the present Government.

Some of the most important aspects of the Amsterdam treaty are dealt with in the amendments and new clauses that we are considering today. Hon. Members will be aware that not all parts of the treaty are amendments to the European Communities Act. Those parts which do not need to be incorporated in our legal system can be agreed by the Government without the approval of the House. Treaty articles which are held to be intergovernmental in structure come into that category. Yet, although nominally intergovernmental—I shall come to that shortly—those provisions will have a significant impact on the sovereignty of this House and Britain's place within the European Union.

The amendments and new clauses tabled in my name and those of my right hon. and hon. Friends would, if accepted, make it clear that, although the House cannot override the Government's right to use the Crown's treaty-making prerogative, it does not accept the principle set out in article 1 of the Amsterdam treaty. That article contains measures which give rise to serious concerns about the treaty among Conservative Members. Many were measures that the Conservative party promised to oppose in its manifesto, and many were measures that Labour, too, claimed it would resist.

Three main aspects of the article concern us. The first is the role and powers of the European Court of Justice, the second the measures on human rights and the third, the moves towards further integration in foreign policy and defence. I will deal with each in turn, but I shall begin by exploring a little further the supposed division of the Amsterdam treaty into supranational and intergovernmental sections—the distinction which limits the extent to which the House has any real say over the ratification of that part of the treaty.

At Maastricht, foreign and security policy and justice and home affairs policy were hived off into the so-called second and third pillars. They were to be intergovernmental matters, with the question of the jurisdiction of the European Court of Justice left open. The Amsterdam treaty does much to undermine that pillared structure. Article K.7, for example, explicitly involves the European Court of Justice in the third pillar, seriously undermining the valuable distinction that we had agreed at Maastricht. I apologise to hon. Members if this seems abstruse and esoteric, but it is important.

The involvement of the European Court of Justice in that area of policy represents the difference between collaboration among nations and supranational authority. It is the difference between co-operation and integration. Since neither the Prime Minister nor the Foreign Secretary made any mention whatever of that article, I can only conclude that its importance has eluded them. However, I cannot believe that even they can have missed the significance of article K.2 on policing. The previous Government were proud to have agreed measures on common action against international terrorism. We played a key role in the establishment of Europol. At a time when Germany and France held completely different views about its nature—they were at an impasse—I helped to bridge the differences and bring them together.

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We were always aware that some of our European partners had ambitions to create a European army and a European police force. Some members wanted Europol to be a superior federal force, a sort of European FBI. Article K.2 is a step in that direction. It empowers Europol personnel to join in national policing operations in a support capacity. That is a significant change. What status will those personnel have? Will they have diplomatic immunity? How, and to whom, will they be accountable? Those are serious questions to which I hope the Minister will respond.

Our reservations are reinforced by the provisions in the treaty that relate to the European Court of Justice. All parties should be able to agree on reform of the court. All parties should cherish the impartiality and efficiency of judicial institutions. This debate has nothing to do with whether one believes in a Europe of nations, as we do, or wants to hand over yet more powers to Brussels, as the Government do. The Conservative party believes that the European Court of Justice must remain the guarantor of the single market. Common rules require a supreme authority to interpret them. Without a strong, independent court, we could neither ensure the even application of Community law nor prevent the abuse of power by other EU institutions.

It is equally important that the European Court of Justice remains within the remit given it by member states. That much is, or ought to be, common ground to left and right, federalists and non-federalists. There is concern across the EU that the European Court of Justice has taken to exceeding its competence and to adopting its own political agenda. Several judgments, such as that in the Francovich case, have gone beyond what is provided for in the text of the treaties. Some have had serious consequences for national exchequers. In a series of controversial judgments, the court has extended its jurisdiction beyond what was specifically bestowed on it by member states. That should worry all democrats, especially as there is no right of appeal beyond the court.

The court's recent ruling on the 48-hour week is a clear example of the treaty being interpreted in a way that was not intended. Of course, there is an argument to be had about such measures. We believe that such labour market regulations can destroy jobs, and that Britain's employment record backs that up. The Labour party takes a different view, as it is entitled to. The argument in this case is clearly about social policy. For the European Court of Justice to rule that it is a health and safety issue stretches legal credibility.

Dr. Nick Palmer (Broxtowe)

The right hon. and learned Gentleman said that there was widespread concern across Europe about the alleged extension of the powers of the European Court of Justice, and mentioned the 48-hour week. Can he name a country whose Government have expressed concern about preventing their citizens from being forced to work more than 48 hours a week?

Mr. Howard

Many employer organisations and other people in Europe recognise the damage that arbitrary provisions of this nature can do to job creation.

To take another example—on which I hope there will be some cross-party consensus—the European Court of Justice recently ruled that Britain could not reserve its fishing quota for its own fishermen. Again, that ruling violated the clear intention of the treaties. When Britain gave up its exclusive right to fish its waters, it did so in return for a guaranteed quota of the total stocks. For that remaining quota to be fished by foreign vessels flying British flags of convenience undermines the basis of the fishing agreement; but the court ruled that the Merchant Shipping Act 1988, designed to return to the intention of the treaties by requiring British-registered vessels to be largely British, was illegal. If, like us, the Labour party believed that such decisions were wrong, why did it not join us in pressing for reform of the institution that gave rise to them?

It was precisely to tackle such problems that the previous Government placed such emphasis on reforming the workings of the court. At the intergovernmental negotiations, we tabled a package of measures aimed at improving its effectiveness and curtailing any possibility of political bias. We wanted to limit the retrospective application of its judgments; to introduce the principle that member states should be liable for damages only in cases of serious and manifest breaches of their obligations; national time limits in cases based on EC law; and streamlined procedures for the rapid amendment of EC laws that have been interpreted in ways in which member states had never intended. Those comprehensive, sensible proposals would have streamlined the court and eliminated many of its most egregious flaws, without affecting its position as supreme guarantor of the treaties.

Mr. Denzil Davies (Llanelli)

Does the right hon. and learned Gentleman agree that one reform that could hardly be described as revolutionary would be to allow one dissenting judgment? It must be the only supreme court in the world, outside the old Soviet Union, where dissenting judgments are not allowed.

Mr. Howard

The right hon. Gentleman has long studied the matter in detail, and his views are always expressed with force and heard with respect.

Mr. Bernard Jenkin (North Essex)

Is not the real difficulty the fact that the court has to choose between such a variety of different bits of treaties in arriving at judgments? There is no logical reason why, for example, in the Factortame case, the single market provisions should have overruled other treaty provisions which allow member states to allocate their fish stocks. Until we resolve that ambiguity, the court will be able to choose which part of the treaty to interpret as supreme for the political convenience of the majority to continue to pursue the federalist agenda.

Mr. Howard

My hon. Friend touches on a fundamental matter, but all courts often have to deal with such difficult decisions.

The reforms that the previous Government put on the agenda were a serious attempt to deal with the gravest flaws in the workings of the European Court of Justice and had the support of some other Governments, including some who wanted much deeper European integration but who wanted it on the basis of sound legal principles.

What happened when the Labour party took over from us at the negotiations? It abandoned every one of those suggestions—and why? Because in the words of the Minister, there was little support for such reform in the intergovernmental conference. That explanation goes to the root of Labour's approach to Europe: its fear of isolation, its readiness to pursue the line of least resistance, and its unwillingness to win our partners round by argument. Sometimes it is necessary to be isolated— not for its own sake, but because without being prepared to stand alone we would never have secured our opt-out from the single currency, won the budget rebate or been able to opt out of common policies on integration and frontiers. The present Government are happy to reap the rewards of the previous Government's readiness to be isolated when the occasion demanded, but lack the courage and conviction to stand alone themselves. That bodes ill for our long-term national interests in the EU.

Not only did the Government abandon our sensible proposals for reform, they agreed to further extensions of the court's jurisdiction. I hope that the Minister will give us details and say how they will affect our law, both civil and criminal. That is the subject of new clause 30, in which we ask for a report to the House from the Attorney-General on those matters.

We also have reservations about article F.1 of the Amsterdam treaty, which is to become article 7 of the renumbered treaty on European Union. As hon. Members will be aware, this is the article that empowers the Council of Ministers to remove the voting rights or, indeed, any other rights, from the country which it claims is breaching human rights.

It should go without saying in a democracy such as ours that every Member of Parliament supports the principles of human rights, individual freedom and the rule of law. The attempts by the Foreign Secretary to caricature our opposition to article F.1 of the treaty have not become him. In the 1980s, a unilateralist pressure group calling itself the Movement for the Preservation of Life on Earth—something that the rest of us, it implied, were supposed to be against—was in alliance with the now Foreign Secretary in its pursuit of unilateral nuclear disarmament. To present the issue as a disagreement about basic human rights is a childish tactic worthy of those 1980s peace activists who were his allies in those days.

Let me run through our concerns about clause 1. They are widely shared. First, the rights in question are vaguely defined. All of us believe in human rights, as they are traditionally understood in Britain—the right to free assembly, the right to free speech, habeas corpus and so on—but is there a basic human right to a minimum wage or to abortion on demand? Under the Amsterdam treaty, those questions will be dealt with not by any judicial body but by other politicians sitting in the Council of Ministers. I know of no precedent in diplomacy or in law for the signatory to a treaty losing its rights but not its obligations at the behest of its fellow signatories.

Mr. Roger Casale (Wimbledon)

The right hon. and learned Gentleman makes the point that countries such as Britain will lose their veto under clause F. 1, but he knows very well that that is not the case. The decision about whether a breach of human rights has occurred has still to be unanimous within the Council of Ministers. Only once a persistent breach of human rights has been ascertained by unanimity can sanctions be triggered. Only at that stage does qualified majority voting come into play. So the points that the right hon. and learned Gentleman lays before the Committee apply not to the triggering of sanctions but to identification of the breach, which is subject to unanimity.

Mr. Howard

I am afraid that the hon. Gentleman has overlooked one fundamental provision in the article. The initial decision is taken on the basis of unanimity, but not including the country against which the complaint is made. So that country would be at the mercy of all the other countries. That is the point. Nor will it do to claim that article F.1 is simply a precaution against the sudden collapse of democracy in a member state. If one of our fellow members were to fall into dictatorship, surely the logical response would be to end its membership of the EU. Article F.1 provides no mechanism for doing that. On the contrary, it specifies that the state in question would remain bound by all treaty obligations, while losing its rights. That is not the right way to deal with an undemocratic regime. So we are forced back to the conclusion that article F.1 could be used to disarm the national veto of any country that was holding up a measure that the other countries wanted.

I invite hon. Members to play through logically a scenario in which article F. 1 would be put to the purposes for which Ministers claim that it was designed. Let us imagine that a new member state with a short tradition of democracy fell into dictatorship and took to persecuting its national minorities, arbitrarily confiscating private property or suspending the due process of law. Can anyone imagine that in those circumstances the other member states would want that state to remain within the Union? When we come across serious and persistent abuses of human rights in non-member states, as we did tragically in the former Yugoslavia, our response is not to invite the perpetrators of abuses to join the European Union, but without voting rights. Our response is to apply a series of sanctions and to make it clear that such behaviour is incompatible with an ambition to join the European Union.

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When the Commission delivered its opinion on the various pending applications for membership of the EU, a proven record of respect for human rights was rightly one of the prerequisites. So how do we imagine that, in a scenario such as I have outlined, article F.1 would be of the slightest use?

It is instructive to contrast the Government's attitude to article F.1 with their attitude to incorporation of the European convention on human rights. In their White Paper, the Government make much of their refusal to give judges the direct power to strike down Acts of Parliament. Such a power, they say, would be incompatible with parliamentary sovereignty. Yet in the Bill now before the Committee the power to interpret human rights is transferred from Parliament not to British judges but to European politicians. So much for the Government's supposed attachment to the sovereignty of the House of Commons and those who send us here.

Mr. Gapes

Does the right hon. and learned Gentleman agree that, if the EU is to be enlarged, it will need safeguards to ensure that all member states remain democratic? If so, should he not be a little more circumspect about his condemnation of the new articles which relate to human rights? They were introduced to ensure that the EU maintained a membership composed entirely of democratic states which respect human rights.

Mr. Howard

I have just indicated to the hon. Gentleman the way in which that is to be achieved. Of course he is right. Of course we have to ensure that the EU continues to be composed of fully democratic states. The way to do that is, first, to require a track record of respect for human rights before a country's application is accepted and, secondly, if—alas, and against our expectations—a country falls into dictatorship, to say that that is incompatible with continued membership and that it will have to leave the Union. That is the way to do it—not by depriving a country of its rights while holding it to obligations.

Article F.1 therefore flies in the face of precedent, and especially of our constitutional tradition. It provides a mechanism whereby the national veto could be decommissioned by other politicians without the possibility of appeal to any judicial body. With all those constitutional objections, the Government have not been able to point to a single scenario in which the power could properly be used. In agreeing to article F. 1, the Government showed themselves either ignorant or disdainful of the fundamental principle of our constitution.

The Labour Government were elected on a specific promise that they would resist any dilution of the British veto in foreign affairs and defence. When the Prime Minister returned from the Amsterdam summit he claimed to have forestalled any moves towards deeper integration in those areas, but hardly were the words out of his mouth than the Dutch Government, who then held the presidency, put precisely the opposite construction on the summit, hailing it as a positive step towards a common defence policy. Who is right? One does not have to be a lawyer to see that the text of the new treaty brings an integrated European defence policy closer than before. The treaty refers explicitly to the progressive framing of a common defence policy. It goes on to deal with integration of the Western European Union into the European Union.

Mr. Desmond Swayne (New Forest, West)

May I draw my right hon. and learned Friend's attention to the fact that article J.7 of the Maastricht treaty, which becomes new article J.4, refers to the "eventual" framing of a common defence policy, whereas the Amsterdam treaty refers to "progressive" framing. The clear intention is that, from ratification of the treaty, the common defence policy begins.

Mr. Howard

My hon. Friend is right to identify that important difference between the two treaties.

The treaty of Amsterdam declares that the WEU is an integral part of the defence component of the Union and provides that the Union should accordingly foster closer institutional relations with the WEU with a view to the possibility of the integration of the WEU into the Union. Again, that suggests that Amsterdam brings us closer to a common defence than before. The Prime Minister claimed to have ensured that NATO would remain the basis of Europe's defence. He has ensured nothing of the kind. The reference to NATO under the second pillar was inserted not at Amsterdam but at Maastricht.

Let us take a step back and consider what role the European Union ought to have in the field of foreign and security policy. Of course, the member states of the European Union will have many interests in common. There is a role for a common foreign and security policy in safeguarding and advancing those interests, and that is a role in which this country can play a prominent part; but for half a century the peace and security of Europe have been guaranteed by NATO—perhaps the most successful alliance in history. NATO is founded on the democratic and liberal values that are common to its members. Those are not exclusively European values: they unite the whole of the western world.

The importance of NATO is not only political, but military. The European allies alone lack the air and sea capacity, the missile defence, the advanced communications satellites and the military computers provided by the United States. There can be no more harrowing demonstration of the danger of seeking to exclude the United States from allied action or taking such action without the United States than the conflict in the former Yugoslavia. It is therefore essential that any development of a common security policy should not in any way impair the effectiveness of NATO, nor should it seek to duplicate what NATO does so effectively.

The common foreign and security policy of the European Union should strengthen the European pillar of NATO. It should allow Europe to take on a more equitable share of the costs of its own defence, and it should provide a forum in which common interests can be discussed. During the course of this debate, I hope to get from the Government a clear statement of their vision of the role of the common foreign and security policy. How do they see its relationship with NATO? How can duplication of NATO's work be avoided? How can they justify the remarks made by the Prime Minister on his return from Amsterdam? I hope that the Minister will cover those points fully in his response to the debate.

Mr. Menzies Campbell (North-East Fife)

The implication running through what the right hon. and learned Gentleman has been saying for the past minute or two seems to be that there are no circumstances in which Europe should act alone. Was not the concept of combined joint task forces a recognition by the whole of NATO that there were circumstances in which the European nations would act alone and would be provided by the United States with the very resources to which the right hon. and learned Gentleman referred, without the United States taking an operational role?

Mr. Howard

That can all be done within the context of NATO. The implication that the hon. and learned Gentleman identified was not intended. It is true that there might be operations such as those to which he referred, but they can take place perfectly well within the context of NATO.

It is also important to bear in mind that the implementation of decisions under the common foreign and security policy is to be decided by qualified majority vote. Given the new structure of decision making set out in the Amsterdam treaty, how does the Minister envisage the operation of qualified majority voting?

Suppose, for example, that a general resolution was passed by unanimity calling for action to be taken in certain circumstances against Iraq. Suppose that that was followed up by a resolution passed by qualified majority vote calling for the implementation of the resolution by all measures short of the use of force. Suppose that the United Kingdom considered that the use of force was justified. Would it be precluded from using force in those circumstances? Those are vital questions, and I hope that we will hear some answers from the Minister this evening. It is because of our concerns about those issues that we have tabled new clauses 37 and 38, which seek to give Parliament an enhanced role in the consideration of such matters.

The Minister also has questions to answer in relation to articles K.12 and K.15. They contain the provisions on closer co-operation between member states when not all 15 wish to proceed. In principle, I welcome those provisions: they provide a basis for a different approach by different member states that reflects the differences which inevitably arise as a result of different national circumstances. However, as the Minister will be aware, the previous Government always insisted that the decision as to whether such actions could proceed should be taken on the basis of unanimity. The provisions in the treaty on this question are not straightforward: they might appear to provide for a kind of unanimity, but it is not at all clear whether they in fact do so. They are to be found in Article K.12.

I have a number of questions to put to the Minister on the provisions of that article. First, was it indeed the intention that decisions on that subject should be taken on the basis of unanimity? If so, why was there not a straightforward provision to that effect rather than the circuitous route we find in article K.12? That article provides that the decision should in fact be taken by qualified majority, except where a member of the Council declares that, for important and stated reasons of national policy", it intends to oppose the granting of an authorisation by qualified majority.

Is the action of a member state in that position subject to the jurisdiction of the European Court of Justice? Could the court rule that the reason relied on by the member state in question was not in fact "important"? If so, does that not mean that any appearance of unanimity would in fact be illusory? Those are crucial questions, and I hope that we can receive clear assurances from the Minister today.

Mr. William Cash (Stone)

Does my right hon. and learned Friend agree that there is absolute absurdity in the idea that a common foreign and security policy should be subject in any way to the jurisdiction of the European Court of Justice? Imagine a situation in which we are moving towards a crisis such as the Gulf conflict. The court should have no role whatsoever in determining questions relating to control and command in such an emergency.

Mr. Howard

Were it the case that the European Court of Justice had jurisdiction in such matters, my hon. Friend's strictures would be entirely justified. He will no doubt put that question to the Minister himself.

Article 1 of the treaty of Amsterdam represents an unnecessary move towards further integration of the European Union. It contains a series of measures that transfer powers to Brussels from the national Parliaments of the member states of the European Union. I have touched on some of those points and my hon. Friends will touch on more of them during the debate. Perhaps, more than anything, the treaty reflects a failure on the part of the Government of the United Kingdom.

On measure after measure, the Government failed to press their case, failed to persuade our European partners of the merits of the argument and failed even to try. Why? Because they feared isolation. That attitude goes back to that phrase used by the Prime Minister in his first speech to the Labour party conference as leader of the party, when he promised that he would never be isolated in Europe. In the Government's view, the fact that there was no support for their proposals from other member states meant that the points were not worth pursuing. That approach augurs badly for the future—badly for Britain and badly for Europe.

The truth is that the only real achievement to come out of Amsterdam was our opt-out on common immigration and frontier policies—and that was all thanks to the efforts of a Conservative Government. We shall not hesitate to press our reservations about article 1 of the treaty in the Division Lobby at the end of the debate.

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney)

It is tempting to follow up on the host of issues raised by the right hon. and learned Member for Folkestone and Hythe (Mr. Howard). It was a little like hearing the speech that he would have made if there was to be a referendum on the treaty. It is noticeable that the referendum on the treaty has disappeared—perhaps it will reappear in a new clause to the Bill. Assuming that it does not, at least we have heard a rehearsal of what might have been said.

I shall confine my observations to a single paragraph of the revised article 1, which lists the objectives of the European Union, including the achievement of "a high level of employment". I welcome that assertion and the consequential employment chapter of the treaty, but I would examine more closely the objective and the revised wording to find out how much substance they contain.

Much emphasis has been placed on that wording by Ministers and by those who feel that they have achieved a great deal in the revised version of article 1, paragraph 9. It has been described as a vital re-balancing of the Union's objectives and priorities. It is claimed that the Amsterdam treaty remedies the omissions relating to employment in the Maastricht treaty.

I believe that that was the claim made by my right hon. Friend the Foreign Secretary when he came before the Foreign Affairs Select Committee to discuss the Amsterdam treaty—I do not think that I bowdlerise his views. In his evidence to us, he said: it would be rather odd if we ended up with a Treaty of the European Union which gives specific tough targets on deficits, on inflation or on interest rates… but made no reference and offered no commitment to employment". That statement was supported by later remarks by my right hon. Friend. It is clear that the provisions in the article and the references to high employment, followed by the employment chapter, are meant to balance the Maastricht treaty in terms of employment.

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My right hon. Friend the Foreign Secretary also said that the commitment to a high level of employment seemed to be a very necessary corrective balance. Ministers regard the employment provisions in the Amsterdam treaty, including the wording in the revised article, as balancing the Maastricht treaty.

One of my hon. Friends on the Committee questioned my right hon. Friend the Foreign Secretary on the significance of those words and the value of the employment chapter. He wondered whether they might be window dressing or a means of fobbing off. My right hon. Friend rightly said that putting in the same context as Maastricht the commitment to a high level of employment constituted a very valuable and very important step Anybody reading the evidence seems to be invited to compare the strength of the employment provisions in the treaty of Amsterdam and the monetary union provisions in the treaty of Maastricht. If one reads all the evidence given to the Select Committee, one can only draw the conclusion that significance is attached to the words "a high level of employment".

An official added to my right hon. Friend the Foreign Secretary's observations and drew a specific comparison between the employment provisions in the treaty of Amsterdam and the monetary provisions in the treaty of Maastricht. Mr. Gass at the Foreign Office said in evidence: Could I add one point… of course, the arrangements under the employment chapter in relation to employment guidelines follow quite similarly the arrangements under the economic and monetary union chapter of the Treaty of Maastricht for economic guidelines. There is a similarity of method behind those two things, they are not binding. We are invited to compare the strength and significance of the employment provisions in the treaty of Amsterdam with the monetary union provisions in the treaty of Maastricht. It is exactly that point that I am seeking to draw to the Committee's attention this evening. I want the Committee to make such a comparison. The only trouble is that, when I make the comparison, I find the contrast, not the similarity, between the two provisions most striking.

Those of us who are veterans of the Maastricht treaty debates of the last Parliament will vividly recall the treaty's monetary union provisions. They define criteria, describe the processes and establish means of enforcement. As my right hon. Friend the Foreign Secretary said, "specific, tough targets" were established to achieve the monetary union.

I studied the employment provisions, particularly the account in article 1 of the term "high employment". I looked in vain for anything like the equivalent of the monetary union provisions, or even for any definition or any criteria by which I could assess whether high employment had been or would be achieved in the time scale envisaged by the treaty.

Having been invited to compare the two sets of provisions in the two treaties—as we were by all the evidence given to us and by the presentation of the employment provisions in the treaty of Amsterdam and the monetary union provisions of the Maastricht treaty— I should at least have hoped to find a definition of high employment or a target or criteria to balance the monetary union provisions in the Maastricht treaty. Sadly, although I hunted high and low, I did not find a definition, a target or a criterion.

We included in the new provisions of the treaty of Amsterdam the reference to high employment—I believe that the Maastricht treaty also contains such a reference, although my right hon. Friend the Foreign Secretary challenged me on that, and I have not had a chance to do my homework.

What will the definition of high employment be? The present employment levels in the European Union are nothing to cheer about. One striking feature of our debates is that we have so often been told about the economic performance of the European Common Market, Community, through to Union. When I consider its performance over the past quarter of a century, I do not find much to give me comfort—that is certainly true when I compare its performance with that of countries that have been more successful.

What about the employment success of the European Union? I understand that, at present, only 60 per cent. of those of working age in the European Union are in employment; less than 40 per cent. of those between 16 and 24 are in employment; only 35 per cent. of those of working age between 55 and 64 are in employment. Are those figures defined, under the terms of the treaty, as high employment or do we have to achieve higher employment? If so, how much further do we have to go? What is the objective? What is the definition? What are the criteria? Having decided to include an objective of high employment, by which criteria do we judge it?

Mr. Llew Smith (Blaenau Gwent)

Let us assume that we join the single currency, hand over many of our powers to the European central bank and, instead of achieving high levels of employment, face high levels of unemployment: what powers would we have as a democratically elected Parliament to alter that situation? Would my hon. Friend care to comment on article 107 or article 109 of the Maastricht treaty, which makes it illegal for democratically elected institutions—whether they be councils, assemblies or Parliaments—to try to influence the undemocratic and unelected European central bank?

Mr. Rowlands

On the latter point, I think that when I was in opposition I often expressed my feelings on the monetary union provisions in the treaty of Maastricht. I was one of the hon. Members who did not vote for the Bill that implemented the Maastricht treaty. I share some of the considerable concerns expressed by my hon. Friend about the employment consequences of monetary union.

The employment chapter remains the responsibility of national Governments in many respects; but, as my hon. Friend suggested, what if one of the consequences of monetary union were to be a rise in unemployment in many parts of the European Union? Which would take precedence—the monetary union provisions or the high employment objective?

Mr. Cash

Has the hon. Gentleman had the opportunity to read the paper on foreign affairs presented by Martin Feldstein, professor of economics at Harvard and president of the National Bureau of Economic Research? We should not forget that the United States is an important part of the problems that face the future of the European Union. In that paper he states: a political union of European nations is conceived of as a way of reducing the risk of another intra-European war among the individual nation-states. But the attempt to manage a monetary union and the subsequent development of a political union are more likely to have the opposite effect. Instead of increasing intra-European harmony and global peace, the shift to EMU and the political integration that would follow it would be more likely to lead to increased conflicts within Europe and between Europe and the United States.

Mr. Rowlands

As in previous debates, the hon. Gentleman tempts me to wander. I do not have the information from that article at my fingertips, and I should like to limit my observations to one paragraph in article 1, but I am sure that the wider issues raised by the hon. Gentleman will be discussed later.

We need to know what the definition of high employment is if its attainment has now been inserted as an objective in the revived article 1 of the treaty. I have quoted the latest employment figures in the European Union which reveal that just 60 per cent. of the working age population is in employment. Contrast that with the same figure for the United States or Japan, where it approaches 75 per cent. Is that figure a proper and reasonable definition of high employment for the purposes of the treaty? If so, it shows how much of a mountain we have to climb and how divorced reality is from the objective as stated in article 1.

The words are in the Amsterdam treaty, but what do they mean and how will we measure progress towards the stated objective? We know about the criteria, objectives and endgame associated with monetary union—they were laid down as specific tough targets in the treaty—but the opposite applies when it comes to the commitment to high employment in the treaty.

I have quoted the figures on general employment levels in the European Union, but the regional disparities in unemployment levels in the existing membership of the union are enormous and astonishing. Article 1 refers to the need for social and economic cohesion, but consider what is happening in reality. I accept that the gap between gross domestic product per capita and employment levels is closing when one compares nation states, but the interesting graph is that which reveals that disparities among regions in each nation state are growing alarmingly. I happen to represent one part of one of those so-called peripheral communities in the European Union which vividly illustrates the existence of such disparities.

Mr. Christopher Gill (Ludlow)

Surely what we need to understand about unemployment is that, every time this country has had fixed exchange rates, unemployment has gone up exponentially. It increased from 1.67 million in 1990 to 2.85 million in 1992, and from 1.25 million in 1925 to 2.9 million in 1931. I should have thought that that was something that everyone could understand. I cannot understand why Labour Members sitting alongside the hon. Gentleman are not as concerned as I am about that precedent, which is so clear for all to see.

Mr. Rowlands

I represent a community that understands exactly the impact of fixed exchange rates and gold standards on the economy and jobs. I shall refer to that in greater detail later. We know what impact such policies can have on peripheral communities that face structural difficulties, as my community did in the period between the wars and again in the 1980s and the early 1990s.

I am not seeking to make a Welsh point, let alone a Merthyr Tydfil and Rhymney point; I am talking about all the peripheral areas within the European Union. The relevant graphs are interesting, and I believe that they are as accurate as any, because they show that, whereas the gap is closing between the relative GDP per capita levels of nation states in the European Union, huge regional disparities are emerging; in other words, the peripheral areas of the European Union are suffering greatly. The figures reveal that the GDP per capita of a quarter of the present European Union is less than three quarters of the European Union average.

I was astonished to discover that, if one were to apply the criteria for objective 1 status to the United States, just Mississippi and one other state would qualify for it. I can hardly believe that. As a member of the European Union and the Common Market, we should display some humility when reviewing our relative economic performance and employment growth in the past 20 years. We should not believe that the European Union has been a wonderful economic panacea.

6.45 pm

According to the objective set down in the treaty, we are also asked to believe that social cohesion and high employment will be achieved through economic and monetary union, "ultimately including" a single currency. Those two words are not new, because they were included in the Maastricht treaty. Even when we debated that treaty, I was curious about how the ultimate inclusion of the single currency fitted in with everything. I thought that monetary union was equivalent to a single currency. I thought that one could not achieve monetary union without a single currency; but, according to the revised article, it now appears that a single currency is an optional extra. We are invited to support the notion that communities like mine will achieve high employment and social cohesion through monetary union and a single currency.

The language used is fascinating. We, in common with Conservative Members, now laud flexible labour markets and the possession of flexible, adaptable skills. We now denounce old-style corporatism and all forms of intervention. We have marginalised the role of public expenditure and have introduced treaty-based draconian laws not to borrow more than a certain percentage. We now believe in flexible labour markets, but inflexible exchange rates. We believe in a monetary union that is corporatist to its toes. Everything described in the treaty is corporatist. What could be more interventionist than the stability pact that backs up that treaty and has the power to fine nation states if they err?

I am an historian, not an economist, and I can find no empirical or historical proof that all that 3 per cent. deficit stuff in the Maastricht treaty has any particular sacred, eternal, validity. We are asked, however, to support such a principle.

Mr. Bowen Wells (Hertford and Stortford)

If, as the hon. Gentleman has said, we enter an inflexible monetary union, and changes are taking place in the economies of peripheral areas—I suggest that it is not only Wales that is a peripheral area in terms of monetary union but all of the United Kingdom—is it not true that the only way in which adjustment could take place within such a fixed monetary union is through high unemployment in those peripheral areas?

Mr. Rowlands

There are two or three ways in which adjustments could take place. First, there might be a significant transfer of resources. The problem is that the only way to achieve such transfers on a scale large enough to be effective would be to create a unitary or federal government capable of taxing and therefore redistributing resources.

The second way in which adjustments might take place was mentioned by the hon. Member for Hertford and Stortford (Mr. Wells) in an intervention. It was the way that partially solved, but in the cruellest way, the problems that once confronted the communities that I represent: large-scale movement of people from peripheral areas. In 1928, it was called transference; the Government of the day set up a board to promote transference. Presumably there might be a European transference board to move the population within European Union to where the work is—a massive European bike ride, if Lord Tebbit will forgive me.

Without the flexibility of exchange rates, there will be higher unemployment in peripheral regions.

Sir Raymond Whitney (Wycombe)

On a point of order,Mr. Martin. The hon. Gentleman is giving us a very interesting discussion on economic and monetary union. I am not aware that it is a subject of the amendment or of the Bill.

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

I draw the hon. Gentleman's attention to the fact that amendment No. 1 refers to economic and monetary union, so he is perfectly in order.

Mr. Rowlands

Thank you, Mr. Martin. Monetary union is referred to in article 1, whose inclusion in the Bill we are debating, and in amendment No. 1. Although we cannot move the amendment, I am discussing that amendment, which I tabled.

I am sceptical of that fine belief that monetary union will achieve high employment—that through full monetary union we shall achieve the social and economic cohesion that we all want. I find the notion of a 21st-century European gold standard—which I think is what monetary union is—as potentially dangerous for the future of my communities as the gold standard was to my communities between 1925 and 1932.

One should re-read the history of that period. One should not become a prisoner of one's history, but one should at least re-read it and realise that the only post-war period of full employment in Britain did not result from a gold standard or very fixed exchange rates of the kind and character proposed for monetary union.

I feel strongly about this subject. If we believe in the concept of high employment, we have cause to be worried—as I am—that some of the aspects of the treaties that we are discussing will not enhance job prospects and bring about high employment in the communities that I serve, but will destroy them.

Mr. Cash

I should like to approach the debate from the position that I believe the Conservative party genuinely represents, which has been gravely misinterpreted and misconceived by many people—not only Labour Members, but the media and some of the malcontents in the European Union.

The views that have been expressed by the Conservative party day in, day out on these fundamental issues—the add-on to the development towards what is called an "ever closer union", but which I believe is an ever-increasing division within Europe—may be encapsulated as pro-European views. It is a gross misrepresentation of our position to describe the views that we advance as Europhobic or anti-European. There is absolutely nothing Europhobic or anti-European in those views, and it is a gross calumny on the Conservative party that such descriptions continue to be expressed.

I pay a deeply felt and emotional tribute to many Labour Members, including the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands). They genuinely believe in the national interest. We may differ about where we would go if we retained our ability to take decisions for ourselves, but the idea that those of us who seek to maintain the national interest in a manner consistent with a policy that genuinely represents the interests of Europe as a whole—and have tried to present such arguments over the years—are Europhobic or anti-European is a gross calumny.

Mr. Ian Taylor (Esher and Walton)

I cannot resist an intervention—bring back the old days of the Maastricht treaty debates. I warmly welcome my hon. Friend's remarks; he has obviously become a positive European. In that context, will he warmly welcome the very positive statement made by our right hon. and learned Friend the shadow Foreign Secretary, who said that, in achieving the development of the European Union and especially of the single market, it was essential that there was a supranational court—the European Court of Justice?

Mr. Cash

My hon. Friend may be surprised to know that, about two years ago, I had a debate with the present Lord Howe before the Bar Council in which, to his astonishment, I actually agreed that, if one were to have certain rules that were applicable in the interests of co-operation within Europe, it was necessary to have a court of justice, which would arbitrate sensibly in achieving objectives that were in the interests of Europe as a whole.

Unfortunately, for reasons that I gave in that debate, I am afraid that, as Sir Patrick Neill said in his essay on judicial activism, the European Court of Justice has departed from that policy of arbitration and has engaged in a policy of political activism—judicial activism, if you like—which has led to serious problems. However, I do believe that, if one is to have a rule of law within Europe and it is to be for the benefit of all the member states, it is in the interests of everyone to have an arbitrator, and the European Court of Justice, if it were to behave properly, could achieve that objective.

At the heart of this very important debate lies the fundamental question of article 1 and the manner in which it traverses all the issues contained in the Amsterdam treaty. I suspect, looking at the Minister of State, with his foxy eyes, that he will—

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

I will be hunted.

Mr. Cash

I suspect that he and the Foreign Secretary will impose a guillotine, and I have no doubt whatever that they will seek to blame us. I say to my right hon. and learned Friend the shadow Foreign Secretary and the shadow Minister for Europe, my hon. Friend the Member for South-West Devon (Mr. Streeter), that we are interested in a proper debate, as are all Opposition Members present. I regret the lack of hon. Members in the Chamber, given the importance of the subject.

I place on the record the fact that there is no need for the European Union to make the inevitable progression to a legal federal system. I shall quote briefly from one of our greatest statesman, John Bright, who, in his last speech, asked whether there was any need for a legal federal system within the empire of the United Kingdom and what later became the Commonwealth: May we not hope for the highest and noblest federation to be established among us? That is the question to which I would ask your special and sympathetic attention. The noblest kind of federation among us, under different Governments it may be, but united by race, by sympathy, by freedom of industry, by communion of interests and by a perpetual peace. We may help to lead the world to that better time which we long for and which we believe in, though it may not be permitted to our mortal eyes to behold it. It is thus far better to achieve peace, stability and higher employment by co-operating as sovereign states than to lock ourselves into the arrangements proposed in the Amsterdam treaty. Incidentally, with great respect to our Front-Bench spokesmen, I might add that I strongly believe that the Maastricht treaty should be renegotiated.

7 pm

Mr. Casale

The hon. Gentleman says that he wants a proper debate. If that is so, why does he insist on tabling amendments that would scupper the treaty? Why not re-focus the debate on areas susceptible to serious discussion, instead of trying to undermine the Bill altogether? Or is he seeking to project into the Chamber a debate that is taking place only within the Conservative party?

Mr. Cash

Having just heard the brilliant speech by the hon. Member for Merthyr Tydfil and Rhymney, I am well aware that there are differences of opinion in all parties. It is the national interest at stake; the debate should not be defined in terms of party political interest. That is precisely why we have tabled our amendments, in fact.

The hon. Gentleman will understand that we cannot amend the treaty; all we can do is probe and ask questions about why certain provisions have been included. There is nothing negative about the views that we are expressing. I notice the hon. Member for Rotherham or somewhere— or is it Zurich?—holding up his Order Paper. He knows perfectly well that on occasion it can take up to 100 amendments to elicit the truth.

I want to examine the issues covered by article 1, which divide easily into a number of categories: social policy, common foreign and security policy, the free movement of peoples, immigration issues, border controls, freedom, security and justice, the single currency, police and judicial co-operation, and the general subject of flexibility and the Court of Justice.

There is no doubt that social policy will be a source of discord, tension and conflict in Europe. To anyone who doubts that I would recommend the essay by Martin Feldstein. Social policy also poses dangers for our relationships with the rest of the world, and for the investment that we want to come into the UK and Europe. The plain fact is that, without restrictive social policies, in the past 20 years the United States has generated another 36 million jobs, especially in small and medium-sized businesses. At the same time, Europe, with its restrictive and sclerotic practices, has at best produced 1 million more jobs—although other estimates put the number at zero. Therefore, it reflects no credit on the Government that they should be endorsing the social chapter.

As Patrick Minford has pointed out in an important paper that he wrote for the Official Journal of the European Communities, unemployment in this country alone is set to rise by as many as 3 million, and our GDP to fall by as much as 20 per cent. The Government are, of course, free to challenge the Liverpool model, but I cannot believe that they intend to pursue this sort of policy merely to appease the European Commission. Do the Government not realise that the policies I have described will lead to the people who voted for them on 1 May disappearing like snow in spring? They will have no chance of holding those voters in the next election if they continue to pursue these policies.

I initiated a recent debate on the coal industry; yesterday, a Labour Member had a debate on that same industry. Certain policies being pursued by the EU and advocated by our Government will definitely lead to more unemployment. It gives Conservative Members no satisfaction to realise that the policies pursued by this Government will be against the national interest. They may be worried about losing votes, but it is more important to realise that these policies run clean counter to the national interest.

Mr. Richard Shepherd (Aldridge-Brownhills)

Essentially, my hon. Friend is saying that he passionately believes in a Europe of nation states, but that that is not on offer from anyone across the channel. This boils down to a fight against Labour Ministers, who believe in the creation of a European state that will mean that the vital powers of the British people to make and live under laws which they can choose and change will be removed from them.

Mr. Cash

I absolutely endorse my hon. Friend's comments, and I beg the Government, with their huge majority, to act responsibly—even if it is for reasons of self-interest. What matters, of course, is the national interest, and following the ideology underpinning the social chapter will lead to ever more trouble for the people we represent. Indeed, that is why we are in the House—it is time we brought some passion and fire to the European questions that affect the lives of the voters.

Dr. Palmer

As the community of separate nation states that the hon. Gentleman would favour is not on offer, is not the logical extension of his argument a complete withdrawal from the European Union? By the way, has everything he has said today represented the policy of the Conservative party?

Mr. Cash

So far as I understand it, the policy of the Conservative party is to oppose the Amsterdam treaty, and that is the position we all adopt. Indeed, I am sure that the shadow Foreign Secretary would leap to his feet if he thought I was disagreeing with party policy. The views that I am expressing are wholly consistent with the thrust of everything that the Conservative party, in Parliament and outside it, holds dear.

Mr. Jenkin

Is not the boot on the other foot? If the Government are not prepared to object to the progressive integration of Europe and the gradual removal of powers from member states' national Governments, they are necessarily complicit in the construction of a European super-state, to which they say they are opposed, but to which also they are turning a blind eye.

Mr. Cash

As ever, my hon. Friend is absolutely right. We should look at the big picture, because the totality of proposals under Amsterdam combined with Maastricht shows that we are moving towards a European Government. It is no accident that people such as Karl Lamers state that their avowed objective is to have one country. If we move from a single market to a single currency and to a single tax policy, there will no longer be an individual nation state.

I challenge the Minister and Labour Members to deny that Britain is an independent, sovereign state. Let the Minister say at the Dispatch Box that we will not be an independent, sovereign, nation state. Is he prepared to say that? He knows as well as I do the direction in which the Amsterdam treaty is taking us. The arrangements for the corpus juris proposed by Directorate General XX— a common legal area—are concomitant with one single currency, one single tax policy, one country. The Government are showing their complicity by allowing that to happen.

I defy the Minister to deny that that is the direction in which we are going. The Government know perfectly well that that is what it is all about. The Minister looks so uncomfortable as he sits there. Just look at him. He dare not get to his feet, because he knows that that is the position.

What is the effect of a common foreign policy on our affairs? Some people believe that a common foreign and security policy is in the interests of a greater, more united, coherent approach to foreign policy in the European Union. There are practical difficulties. What happened in the Gulf and in Bosnia shows that such an approach did not work. Why have the Government endorsed the idea of high representatives, who would carry out a combination of the new secretary general's political functions and the political functions of the presidency, and who could set their own political agenda in association with the Commission?

Such manoeuvres are highly dangerous and essentially undemocratic. At the beginning of my speech, I said that we are for Europe, for jobs and for democracy. What on earth are the Government doing pursuing a policy that is bound to lead to unelected high representatives having as their function the binding together of policies on their own political agenda in association with the European Commission? That does not make sense. What on earth do we think we are doing?

We should not look back at history for its own sake, but we should consider the implications of these proposals. Surely the Government understand that, if common foreign and security policy is subsumed by the political agenda of unelected persons, it is bound to lead to difficulties for democracy. It is a retrograde step.

As Professor Feldstein has pointed out, this proposal will lead to massive tensions between this country and the United States of America. Who bailed out Europe over Bosnia? NATO and the United States. Why do we want to pursue policies that are inimical to the interests of those who have come to our aid in the first and second world wars, in the Gulf war and in Bosnia?

As for freedom, security and justice, we have a problem with the expansion of the legal area and the massive increase in the powers of the European Court of Justice. Why are no dissenting judgments published? Why does the court operate under such secrecy? It has a political agenda, and the electorates of the member states are not allowed to know who has decided what. That is not transparency.

I have read over and again that the European Commission is enthusiastic about transparency, and is more open. There is no evidence from the Amsterdam treaty that any attempt has been made to deal with that problem. It is a political court and is primarily driven by its own agenda, which is, by its own admission, political integration. That was expressed by Professor Trevor Hartley in a recent interesting paper. It is not an objective, judicial court: it is primarily a court of political injunction.

7.15 pm

Although I disagree with the new arrangement, in the Select Committee on European Legislation the other day, I asked the Minister to explain why framework decisions in the area of freedom, security and justice are dealt with exclusively by secondary legislation. He was in some difficulty: I noticed his embarrassment. He could not state categorically that all questions relating to framework decisions would be dealt with by primary legislation.

Why is there qualified majority voting for what is described as "the other decisions?" What are the other decisions? He looks at me across the Floor, but he will not answer my questions, because he does not know the answers. He did not know the answers in the Select Committee, so he kept referring to his civil servant. He will read out his brief tonight, but he does not understand what is going on. That is the problem.

Why does the European Court of Justice continue to confer jurisdiction on itself? Why did the Government not take a position on the treaty to ensure a proper trimming of the Court of Justice?

Fundamental questions lie at the heart of the debate, and the Government must answer them. They will not answer any questions, because they lack sufficient comprehension. I condemn the Government for the treaty. The Conservative party will vote against it, because it is fundamentally wrong and is not in the national interest. The Government know it, Labour Members know it, and they will rue the day that they allowed the treaty to go through.

Mr. Denzil Davies

My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) dealt brilliantly with the gist of amendment No. 1, so I shall be brief.

I did not want to discuss the European Court of Justice, but I shall just make a few comments. I recognise that a European Union has to have a supreme court. The hon. Member for Stone (Mr. Cash) was a little unfair when he said that the court's agenda was political, and that it did not want people to know anything. The problem with the present court is that its antecedent is the Napoleonic French state court. The European Court of Justice was set up at about the same time as the European Coal and Steel Community—a particularly authoritarian organisation. It would be more sensible to use the different and more flexible procedures of other courts in Europe than the French state court procedure that the European Court of Justice uses. I suggest that we examine the court's procedures and consider whether they can be reformed to accord with continental practice in other countries, and with British practice.

The amendment would exclude certain words in article 1 that refer to economic and monetary union and ultimately a single currency. A technical question has been bothering me and I shall set it out before coming to the substance of my speech. I understood that the purpose of the Bill was to incorporate Community obligations into English law. Indeed, if there were no such obligations, it would not, in theory, be necessary to have a Bill. As we know, the royal prerogative enables a Government to ratify a treaty. Presumably, certain provisions in the Amsterdam treaty have to be translated or incorporated into the law of England and Wales, Scotland and Northern Ireland—the United Kingdom. That being so, a Bill is necessary.

Article 1 refers to economic and monetary union and the single currency, the latter being stage 3. Those of us who participated in the debates on the Maastricht treaty are well aware that the single currency is the third stage of economic and monetary union. I had always understood that the United Kingdom had an opt-in, not an opt-out. Until we opt in to stage 3, if we ever do, how can that stage be a Community obligation for Britain?

On a technical level, the amendment seems absolutely right. Why do we need to bring into British law, English law—the law of the United Kingdom—an obligation that is not an obligation, if I may so describe it? Perhaps my hon. Friend will explain when he replies.

I see at the top of page 9 of the treaty the name" Mr. Douglas Henderson". He is said to have exchanged—I paraphrase—his full powers, which were found in "good and due form". I am glad to read that. The treaty tells us that he has agreed that The Union shall set itself the following objectives". There is then a reference to, ultimately, a single currency. As I have said, the United Kingdom is not part of the Union in the sense that it has agreed to the single currency. It is an opt-in, not an opt-out. There are therefore no obligations on the United Kingdom under stage 3 of economic and monetary union.

We are not subject to the stability pact. We are not subject either to the locking of exchange rates and the movement towards a single currency. I do not think that there are any legal obligations under stage 2, but there are definite legal obligations under stage 3. Why do we have to incorporate those obligations in the law of the United Kingdom when we are not bound by them until we accept them by opting in?

The question might seem to be technical, and perhaps it is an example of the pedantic points that lawyers like to raise. I shall be grateful if my hon. Friend the Minister is able to clear my mind when he replies and end my confusion.

My hon. Friend the Member for Merthyr Tydfil and Rhymney dealt eloquently with the phrase "high level of employment". Should anyone think that I am out of order, those words are contained in article 1. They appear a few lines up the page from the reference to economic and monetary union. My hon. Friend said that my right hon. Friend the Foreign Secretary said at a meeting of the Select Committee on Foreign Affairs, "No, it is all different now. We have a new treaty that includes the magic words 'high level of employment'." My right hon. Friend explained that the words were intended to show that we believe in employment. Apparently, they represent a grand counterweight to those nasty monetarists at the European central bank.

The few of us who debated the Maastricht treaty night after night know very well that magic words about a high level of employment appeared in that treaty. I think that they were part of article 2. Our debates were designed to show the distinction between the vagueness of those words and the specific targets of setting up, for example, the central bank and price stability.

All we have is more words. We have nothing that is really new, and we still have unemployment. Nothing has changed. The leaders of the European Union are faced with 18 million unemployed citizens, almost 5 million of them in Germany. It may be that there will be 5 million in that country later this winter. Faced with that level of unemployment, European leaders have wonderful meetings where men in extremely nice suits drive up in very expensive cars to pretend that they can create wealth by so meeting. They pretend also that they can do something about unemployment. Most of those men and women have never been unemployed. Most of them, like most of us in the House of Commons, have not created any wealth in their lives. However, the meetings continue.

I accept that the lawyers do very well. I should be in favour of the process because it is great for lawyers. The Holy Roman empire was great for administrators and various other people and the European Union is great for lawyers, who draft with great skill. I have great admiration for continental lawyers, who are able to convert rather vague concepts into the language of treaties.

As I have said, nothing has changed. I have no doubt that Mr. Jospin is happy with the drafting, because it enables him to show the socialist party in France that he has secured a sort of counterweight to the European central bank. In fact, he has achieved nothing, and he knows it. He is happy, however, to dress things up in an effort to show that the French Government were concerned about unemployment.

What does a "high level of employment" really mean? We are incorporating those words into English statutes, in effect. That being so, we are entitled to ask what is meant by those words. If 80 per cent. are employed and 20 per cent. are not, is that a "high level of employment"? The words are chosen so that we do not know the answer. They are examples of the classical words used by monetarists, and I count myself something of a monetarist.

I was converted to monetarism at the Treasury years ago by Denis Healey and Milton Friedman. It accords to some extent with my Calvinistic-Methodist upbringing, which told me that too much money is bad for us. I speak as a little monetarist. A "high level of employment" is part of a philosophy because we are told that monetary policy is what matters and that whatever happens to employment is unfortunate. There is no attempt—perish the thought—to refer to full employment. That being so, we have no definition. If there is to be incorporation into English law—perhaps my hon. Friend the Minister will tell me if I am wrong—what is meant, as my hon. Friend the Member for Merthyr Tydfil and Rhymney asked, by a "high level of employment"? I think that we should be told.

Economic and monetary union and a single currency mean a single bank. They also mean something that is called price stability. That term appears in the Maastricht treaty, and I have always been baffled by it. What does it mean? At least the Bank of England has targets for inflation. We are told that the present target is 2.5 per cent. The latest Treasury document tells us that it will not be 2.5 per cent. next year or the following year, but that is another matter.

What is price stability? We are told that it is low inflation. Is it zero inflation? It is important to know, because Japan has had price stability for a long time. The inflation rate there has been between zero and 0.5 per cent. I suppose that that is price stability. It does not seem to have done the Japanese economy much good in the past few years. This European central bank is going to give us, as it has to, price stability, so what is it? Is it 1, 1.5 or 2 per cent. inflation? Again, we should be told what price stability means, because we are incorporating it into English law—or English and Welsh law, British law or UK law.

7.30 pm

I suppose that we have to have a central bank—or do we? I confess that, sometimes, I have radical thoughts. I had them in about 1976 when I was a junior Treasury Minister. I was not sure whether we needed a central bank at all. This is far too advanced and radical for new Labour Members, so I suggest that they stop up their ears. Indeed, I see one of them doing it already.

I wonder about the European central bank. It is not going to have much effect on long-term interest rates. No central bank does any more; long-term interest rates are determined by the market. However, central banks and the European central bank know all about short-term interest rates. They know how to fix the rates to hit an inflation target or to create this nirvana of price stability. I am not sure whether global capitalism can survive price stability or zero inflation, but perhaps we should not be led into that argument now.

Why do we need the central bank—those 10 men sitting there trying to fix an interest rate for a region stretching from Merthyr Tydfil and Rhymney, or west Wales, almost to the Arctic circle? Poor old Eddie George is having problems fixing an interest rate for Britain. If there is growth in the south-east, apparently, interest rates have to go up, but there is no growth in Merthyr Tydfil and Rhymney or in Llanelli, so how do we compensate for that? Why cannot Llanelli have a lower interest rate than the City of London?

How do we fix one interest rate for the whole of Europe? It is absurd to establish a body that apparently has all the powers and is an institution. It is like the European Court of Justice. It is not like the little committee that has been set up—I do not know where— to deal with employment, but is a joint committee of the Council of Ministers and the European Parliament. It will consider guidelines and consult the Committee of the Regions, and spend a lot of money doing nothing.

We had the European Commission, the European Parliament and the Council of Ministers—the troika of the European Union—and now we have a fourth: the European central bank. It is a troika plus one. This new institution will determine interest rates—and employment levels—and it cannot take into account other matters such as employment because the treaty says clearly that it cannot.

The Maastricht treaty says: The primary objective of the ESCB shall be to maintain price stability. Without prejudice to the objective of price stability"— this is good draftsmanship— the ESCB shall support the general economic policies in the Community". The general economic policies are that we should have high employment, but it cannot take that into account, whatever that means, because it has to determine price stability, which is zero or close to zero inflation, so why on earth do we need it?

If Governments cannot achieve that aim, I would leave it to the marketplace. Some of my hon. Friends may be upset about that, but that is what I would do. Governments have to face the retribution of the electorate. There is retribution, they tell me, in the marketplace as well if we get it wrong, but the gentlemen in Frankfurt driving around in large cars, on eight-year contracts and an index-linked pension, are going to face not retribution, but a nice retirement after they have decided who has a job and who does not in the European Union.

Mr. Llew Smith

May I use an argument that my right hon. Friend made some weeks ago, but in another instance? If we have no confidence in politicians setting interest rates or public expenditure levels, and if that is now to be the responsibility of the European central bank, why do we stop there? Why do we not give it powers to determine taxation levels, what sort of health and education service we have, and how much we should invest in the social services?

Just a week ago, we celebrated the centenary of one of my predecessors, Nye Bevan. Politicians from left, right and centre were queuing up to say what a wonderful man he was, which he certainly was, but do we honestly believe that a European central bank would ever have had the courage, imagination or initiative to set up the national health service?

Mr. Davies

My hon. Friend is right. I shall not follow him, as I can see that the occupant of the Chair is getting restive, but obviously there are possibilities. Once we have a central bank, we have an Exchequer board to determine public expenditure levels and taxation. Perhaps we saw the germs of that now in the statement of my right hon. Friend the Chancellor of the Exchequer the other day.

In his excellent speech, my hon. Friend the Member for Merthyr Tydfil and Rhymney mentioned corporatism, perish the thought. We old Labour Members in the previous Labour Government were accused of terrible corporatism, and we are still accused of all sorts of things: running the economy badly, being too corporatist and everything else. Fair enough: we accept those criticisms. We are now supposed to be living in a flexible world, a global economy, yet we belong to the European Union, one of the most corporate structures—I hate to say it again—since the Holy Roman empire. It is utterly and completely corporatist. It is there to determine, with institutions, treaties, words and lawyers, almost every facet of life—certainly of economic life. What can be more corporatist than that?

My hon. Friend the Minister often goes to Brussels and sits in this corporatist body, as do other Ministers and the Prime Minister. We are members of a large corporatist organisation, and I wonder sometimes whether this old-fashioned, indeed out-of-date, corporatist organisation can live with the global economy. I am not sure that it can. Something will fall apart, because it is the antithesis of the global economy.

Whether we like it or not, the global economy is there, yet we have this old structure—I am prepared to admit, this old Labour structure—in the centre of Europe to which we all subscribe and pay money. However, outside there is another world: the global economy, where Governments have to move quickly and be flexible, and where constitutions have to be flexible.

The good old British constitution fits well into the global economy. We are trying to dismantle it, but it suits that economy. This stuff that we are debating does not suit it, and I suspect that the treaty will not be able to cure unemployment and do the things that everyone wants. I suspect that the European central bank, price stability and all this nonsense will lead to deflation. Perhaps we shall have zero inflation, but if we do, even more than 18 million will be unemployed in Europe.

Mr. Jenkin

I do not intend to detain the Committee for long, because I want to ensure that we debate as many amendments and clauses as possible before the Government bring down the guillotine.

I had meant to talk about the European Court in conjunction with article 1, and about the importance of the amendments relating to the further centralisation of power; and I had meant to ask the Minister to clarify one part of the Government's policy. Are the Government in favour of the development of a federal Europe, or are they not? That is not a difficult question, and we need not get bogged down in arguments about what a federal Europe is. Some say that federalism is about decentralising power, but, if we started with that premise, we would not have moved any power from the member states to the federal institutions in the first place.

It is, of course, possible to centralise a certain amount of power in the institutions. Indeed, it was originally intended that the Community should take sovereignty from the member states in limited areas for the achievement of certain limited objectives—and it must be said that the European Economic Community, as it was then called, used to work extremely well on that basis. The objective of the single market was to consolidate the process, with the transferring of limited fields to the institutions to achieve free movement of goods, capital, people and trade within the single-market area.

The question that needs to be asked is whether the Government want the process to continue indefinitely, because that is what the European Community institution are now involved in. The inclusion of the Amsterdam treaty in the treaty on European Union gives the process a considerable further kick in a federalist direction.

Let me ask the Government a simple question: are they in favour of an indefinite and continuing transfer of power and responsibility from the member states to the institutions of the Community? It seems from the fact that they have signed the treaty, and from the fact that they have addressed none of the issues raised by my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) about the operation of the European Court—the Conservative Government were going to insist on that—that this Government are indeed prepared to continue the process indefinitely.

It should be understood that it is not necessary to go on changing the treaties for that process to continue. May I detain the House for a moment to explain the doctrine of the occupied field? Every time a new directive is created or a new regulation is created and approved, the Community removes further competences from the member states, and centralises decision-making in European Community institutions.

Air transport is a classic example. It has been regarded as a competence shared among the member states and the Community, the presumption being that the Community should be responsible for air transport within the Community area, but should leave bilateral arrangements between member states and non-members to them. Now the former leader of the Labour party, the European Transport Commissioner, is trying to get hold of that system so that the European Community can take over the competence.

Once the Community has acquired a competence, it cannot give it back to the member states. It can delegate it, but, once acquired by the Community institutions, that power is permanently in the possession of the institutions. It is up to them to give member states permission to exercise it.

7.45 pm

Mr. Cash

Will my hon. Friend give way?

Mr. Jenkin

I want to be brief, but I will give way.

Mr. Cash

Will my hon. Friend add to his simple and graphic description the acquis communautaire, which produces a continuous ratchet effect? It is no more possible to revisit the occupied field than it is to revisit the existing legal norms that have been created by the Community. It is an irrevocable process, with no right of secession.

Mr. Jenkin

I agree. My hon. Friend has amplified the point that I was making.

It was all very well for the Prime Minister, before the general election, to write articles in The Sun declaring his affinity with a Europe of nations—presumably sovereign nations—involving our working in co-operation with our European partners. However little our European partners are now prepared to explain the consequences of signing the treaties as they have been signed, and however shy even Helmut Kohl now is about discussing the federal Europe, the fact is that that is the legal construction of the treaties.

The European Community may not yet be a state; but I have attended debates such as this often enough to hear hon. Members describe one policy after another, and one aspect of the Community after another, that suggest that it will be. If it has an executive in the form of the Commission, a legislature in the form of the Parliament and the Council of Ministers, a supreme court in the form of the European Court of Justice, a foreign policy and a nascent defence policy—if it is to have a currency, and if it has citizens and borders and passports and even a national anthem and a flag—it would seem that the European Community is taking on all the attributes of a state.

Plenty of people seem to be prepared—nudge nudge, wink wink, say no more—to proselytise privately about the creation of something akin to a European state. I consider it incumbent on the Government to make it clear at the outset of our debates that that is not their objective. I challenge them to say that with courage, because, if they are prepared to make the statement, much will flow from it.

I have a large amount of text with me, to which I was going to refer; but I shall put it aside, because I want to support strongly what was said by the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) and the right hon. Member for Llanelli (Mr. Davies). I do not wish to wreck their careers in the Labour party, but the sentiments they expressed about the economic consequences of joining a monetary union are exactly the sentiments expressed by my right hon. Friend the Leader of the Opposition when he addressed the Confederation of British Industry a week or two ago.

During one of those two speeches, one of my hon. Friends who was sitting near me—but who has now left the Chamber, so hon. Members will have to speculate about who it was—lamented, "These debates are going to be just like Maastricht." Sadly, they probably will be in some respects, because many of the issues that were raised in the Maastricht debates have not been addressed.

In many other respects, however, they will not be like that. The treaties may not reflect the fact that the exchange rate mechanism has collapsed since the Maastricht treaty text was agreed, and the fact that many other economic events have occurred. For example, the unemployment rate in the European Union has continued to rise alarmingly. The treaties, sadly, are constructed as though nothing had happened.

What I wanted to say about the excellent speeches of the hon. Member for Merthyr Tydfil and Rhymney and the right hon. Member for Llanelli is that the issue of centralisation of decision-making applies as much to the policies that I was going to discuss as to the policies of economic decision-making. The European Union is actually about the centralisation of decision-making, in limited but ever-widening fields, especially in relation to economic and monetary union. It is about diluting the effects of democracy, and the requirement for consent on the outcome of those decisions.

Mr. Oliver Letwin (West Dorset)

Will my hon. Friend join me in a speculation prompted by the coruscating brilliance of the right hon. Member for Llanelli (Mr. Davies)? Might not the tendency that my hon. Friend is now describing so powerfully be carried to its ultimate conclusion, through the justiciability by the European Court of the phrase "price stability"? That leads to the interesting speculation that the body that may set the target for interest rates in Europe could be the European Court.

Mr. Jenkin

My hon. Friend is tempting me to explore the operation of the court, a topic that I set aside for today's debate, but he is right—the operation of the central bank is ultimately subject to the European Court of Justice.

The question that I shall explore, which is relevant to the European Court of Justice, is the question of consent and accountability. Ultimately, the institutions of the Community will respond in one way or another to the unrest that is likely to ensue from the removal of democratic accountability through the removal of powers from the national Governments.

Mr. John Bercow (Buckingham)

Does my hon. Friend agree that the proposed conduct of monetary policy by the European central bank will not only be economically damaging, but, more particularly, will conflict with the much-vaunted commitment of the European Union and the Amsterdam treaty to democratic principles? If the European central bank is to be prohibited from taking representations from national Governments about the conduct of that policy, and if national Governments are potentially subject to fines for seeking to make such representations, is that not the antithesis of democracy?

Mr. Jenkin

I wholeheartedly agree with my hon. Friend. I am surprised that a number of the new Labour independent central bank freaks are not jumping up and asking, "Are you not in favour of independent central banks, and is not the Bundesbank a frightfully successful institution?"

The answer is that there is no such thing as a truly independent central bank. Even though the Bundesbank, for example, has a large measure of independence in the setting of interest rates and the governance of monetary policy, it is an institution that enjoys the wholehearted consent of the people of Germany. Indeed, they love their central bank probably more than any of their politicians, and they respect it more than any of their other institutions. To that extent, the Bundesbank as a central institution of the German constitution commands the consent of the German people.

We are asked to believe that the European central bank will command similar respect and admiration. If one asked the German people about the matter, which of course the German Chancellor has no intention of doing, they lament the fact that their deutschmark is to be taken over by the euro.

While the German people may accept that decision as inevitable at this stage of the proceedings, and while many other countries may even vote for it in referendums—it must be acknowledged that the issue may be decided in that way by this country—the problem is not the consent to that proposition, but the on-going consent on an annual basis to the way in which economic policy is determined.

Mr. Gill

Has it occurred to my hon. Friend that the advocates of a single currency were advocating it some time ago on the basis that it would be a hard currency, yet the same people are now advocating it on the basis that it will be a soft currency?

Mr. Jenkin

I shall deal with that point shortly. Crucial to the effects of the centralisation of economic policy and of interest rate setting is the fact that the same policy will be applied across all member states in the single currency area. That will lead to wide disparities in economic performance in different parts of the European Community.

It is not difficult to see why the Confederation of British Industry has been so strongly converted to the idea of a European currency, if it is looking no further ahead than the next five or 10 years. The CBI sees that Britain is now suffering the effects of growth that has been too strong, and therefore we have rising interest rates and a strong pound, amid weak European currencies. As the markets readjust their expectations for a weak euro, the CBI sees the prospect of monetary union bringing a reduction in the value of the United Kingdom currency prior to joining, followed by a massive reduction in nominal interest rates. That would be a bonanza for the British economy.

However, the CBI fails to understand that such a bonanza would be the beginning of a restructuring and reshaping of the British economy, the second half of which would be a massive recession and a massive fall-out as our economy adjusted to the economic circumstances of the rest of Europe.

It would be easy to get consent for the first part. No doubt the Chancellor of the Exchequer will hold out all the lollipops and carrots of the first part of our joining an economic and monetary union under such circumstances, but what will happen during the second part of the adjustment, when things get rough, unemployment starts to rise and the people who elect us to be responsible for economic policy in this country find that the politicians can do nothing but hold up their hands and say, "It is nothing to do with us—it is all now being decided by the European central bank"?

My expectation is that people who hold up their hands so lamely are unlikely to be re-elected. The people who would be elected under such circumstances would be those who said that we should never have joined that contraption in the first place. Unfortunately, we would be in a single currency, and it would be extremely difficult for us to conceive of circumstances in which we could leave it.

Members of the Committee know from experience how difficult it is to manage economies on a national basis, when we are all engaged in the process of the annual Budget statement, for example—the most important job that the House does—assessing what interest rates should be, what growth rates should be, what rates of employment are likely to follow, how much the Government should borrow, and how much they should tax.

That is a hard enough job. Imagine transferring those decisions and judgments to international institutions for all the member states, where we no longer share an affinity through language, culture and historic institutions, but are working through untried, untested, rather distant and unaccountable institutions. The average Brit or German would have only a vague idea of what those institutions do, but even the people in them would find that they had to work in 15 languages and make up operating procedures as the single currency was bedded down. Imagine how hard it would be to run all those institutions with some measure of democratic consent.

Members of the Committee should try to imagine a housewife in Surrey switching on her radio one morning and listening to "Yesterday in the European Parliament", in which a spokesman from her party presents the budget statement to the European Parliament in Greek or German—in simultaneous translation, of course—and the Spanish Opposition leader, say, delivers a response. Would she feel as connected to the process of economic management as the British, German or French people feel to the economic decisions currently taken in their country? If one can believe that, one can believe in the possibility of a federal Europe.

Unless those circumstances are likely to arise, the embarkation on the centralisation of economic decision making in the European Union is likely to result not only in the economic dislocation so ably described by the hon. Member for Merthyr Tydfil and Rhymney and the, right hon. Member for Llanelli, but in political disintegration, the collapse of democratic consent, and in Europe the rise of frustrated extremist groups such as Jörg Haider in Austria, the Vlaams Blok in Belgium and Jean-Marie le Pen's National Front in France. They will be the beneficiaries of such misplaced idealism.

The House and the Government must make sure that that eventuality never occurs. That is why I appeal to the Minister to make it absolutely clear today whether he is in favour of a federal Europe, and, if not, what action he will take to deal with it.

8 pm

Mr. Mike Gapes (Ilford, South)

Last night I enjoyed a rare pleasure as a Member of Parliament: I read a bedtime story to my four-year-old daughter. My daughter is very interested in stories about monsters, and one of her favourite books is called "Where the Wild Things Are". That story refers to people sailing away for a year and a day and rushing back only to realise that they have been asleep.

I have listened to Conservative Members' contributions. It has been slightly more than a year and a day, and the hon. Member for Stone (Mr. Cash) has changed his constituency, but everything else in his speech was identical to last time. Sometimes one has feelings of deja vu because one is witnessing a total rerun of events during the 26 days in Committee on the Maastricht treaty.

We must recognise that Europe has moved on since then. I admit that the Amsterdam treaty is modest, and may not be what many people want. I agree with my hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), who criticised the limited nature of the employment chapter. I believe that it is a first step, and must be built on in future. Nevertheless, there have been some changes since 1991 and 1992 and our debates in this place during the last Parliament.

One difference is that the people who contested elections with the support of Mr. Sykes's millions are now much reduced in number. That is partly because they have advanced exactly the same line, the same arguments and the same simplistic views about the threats to this country. They still talk of fears of Britain being taken over—

Mr. Bercow

rose—

Mr. Gapes

I shall give way in a moment. They use words such as "appeasement" and "capitulation". They speak all sorts of nonsense about this very modest treaty.

Some people are expressing fears about developments in Europe—an American academic was quoted several times on the subject. It is interesting to note that some in the United States are becoming increasingly worried about what might happen if the European Union gets its act together and becomes more effective on the international stage. In terms of World Trade Organisation negotiations and a collective European voice on international matters, the European countries would be more effective if they worked together: they could not be played off against each other, and there could be no divide and rule.

Mr. Jenkin

rose—

Mr. Gapes

I shall give way, but first I must develop this point.

In the past few months, we have witnessed an emergency in international markets generated by a crisis in Thailand that spread to Indonesia, Malaysia and to South Korea. There is no single currency involved in that region; there is no unified super state. What lesson can I learn from those events? If I were to take the worst case scenario—

Mr. Howard Flight (Arundel and South Downs)

rose—

Mr. Gapes

I shall give way in a moment.

I could claim that it proves that nation states and separate currencies lead inevitably to instability and crisis. However, it does not prove anything of the sort—nor does the model developed by the hon. Member for Colchester—

Mr. Jenkin

North Essex.

Mr. Gapes

The hon. Gentleman has changed his constituency also, but his views remain identical to those he expressed in the last Parliament.

Mr. Flight

The lesson that the world has surely learnt from the crisis in Asia is that it is a great mistake to try to maintain a fixed exchange rate. The International Monetary Fund and leading economists have pointed out that, if those economies had permitted their exchange rates to move up and down with their cycles, most of the crisis would have been averted. If the whole of Europe, encompassing many different economies, has not only a fixed but a single currency, there will be greater mayhem than we have seen in Asia.

Mr. Gapes

That is an interesting argument— presumably it is entirely consistent to apply it to events during the years when the Bretton Woods system worked well. There was economic recovery following world war two, and a period of relatively fixed exchange rates. Nevertheless, there was also increasing prosperity and economic growth.

The right hon. and learned Member for Folkestone and Hythe (Mr. Howard) revealed an obsession with the European Court of Justice. He argued against the 48-hour week. Is it not a fact that many other European Union states have operated legislation of that kind without any difficulties? Do not the 48-hour provisions allow for exemptions for certain industries? Such rules take account of the diversity of industries such as travel and transport.

Yet the obsessions and the phobias within the Conservative party prevent Opposition Members from seeing reality: they must build a straw man and create a big issue. A Conservative Government would have made the 48-hour week a show stopper—a sticking point—in Amsterdam.

Mr. Letwin

The hon. Gentleman is developing a most interesting line of argument. Presumably he will want to castigate the Prime Minister, who stated categorically that he opposed the further development of the powers of the European Court.

Mr. Gapes

No, I do not wish to castigate the Prime Minister. I am sorry to disappoint the hon. Gentleman, but I wish to praise the Prime Minister and the Government.

We went to Amsterdam committed to reaching an agreement and securing a treaty, without which the enlargement of the European Union would be impossible. If the Conservatives thought logically and rationally about the issue—rather than reading out the latest brief provided by some well-funded Euro-sceptic think tank—they would recognise that enlargement of the European Union, which they claim to want, and negotiations to secure enlargement will not happen until six months after the conclusion of the Amsterdam treaty.

If there had been no agreement at Amsterdam—that was the hope of the right hon. and learned Member for Folkestone and Hythe, who wished to stand alone and be isolated in Europe; he wished to block agreements, because everyone was wrong except him—there would be no enlargement negotiations.

Dr. Palmer

Is my hon. Friend aware that the situation is rather more sinister than he supposes? We have heard in European Standing Committee B that Conservative Members oppose the Opposition's official line, and oppose enlargement. That is yet another split within the Conservative party.

Mr. Gapes

That is revealing information. It reflects the concern expressed recently by the former Prime Minister, the right hon. Member for Huntingdon (Mr. Major), who voiced fears about the Conservative party's continuing movement to the hard right since the election. The reality is that the European Union will succeed on the basis of practical co-operation, as it has done throughout its existence. The United Kingdom has a very important contribution to make to developing practical co-operation within the European Union.

Mr. Bercow

Will the hon. Gentleman tell the House whether it is an example of practical co-operation or of a commitment to democracy to prohibit member states of the European Union from making representations about the conduct of monetary policy by the European central bank? Is that of accord with the type of practical co-operation to which he enthusiastically refers?

Mr. Gapes

It is not in the interests of any European Union state to be out of the discussion process about the future of economic and monetary union and development of the institutions that will lead to it. That is why our Government have said that, when the economic circumstances are right, in principle we should join that economic and monetary union. In contrast, the Conservative party would have taken a view that—for the foreseeable future, for 10 years, or never—we should not enter the process, and therefore have no influence in the shaping of it.

If the hon. Member for Buckingham (Mr. Bercow) is concerned about such matters, he will presumably condemn the former Chancellor of the Exchequer, the right hon. and learned Member for Rushcliffe (Mr. Clarke) for his important role in developing economic and monetary union in discussions that were held at the end of 1996.

Several hon. Members

rose—

Mr. Gapes

I will give way to Conservative Members if they insist on intervening, but I should like to build my argument a bit—[Interruption.] If the hon. Member for South Holland and The Deepings (Mr. Hayes) want to intervene, I shall be happy to give way, but I should be grateful if he will let me develop the point a bit further.

Questions have been raised on European security, the NATO alliance and the former article J, which is now article 17. The shadow Foreign Secretary argued that the Amsterdam treaty weakens the commitment to NATO. An interesting paper from the Library points out on page 33 that the position is quite the opposite, and that, compared with the Maastricht treaty, some member states' commitment to NATO has been strengthened in the Amsterdam treaty. It states: the recognition of the latter has been strengthened. Whereas article J.4(4) stated that 'The policy of the Union in this Article… shall respect the obligations of certain Member States under the North Atlantic Treaty and be compatible with the common security and defence policy established within this framework', the new article 17 inserts the wording 'which see their common defence realised in NATO". Therefore, it is not true that our Government have signed up to weakening NATO. They have either maintained the current position, as in the Maastricht treaty, or perhaps even strengthened commitment to NATO, as stated in the paper from the Library.

My hon. Friend the Member for Merthyr Tydfil and Rhymney drew attention to the fact that there are problems of peripheral regions in the European Union. No one can doubt that. With enlargement, the disparities between peripheral regions and the European Union core will grow. Such disparities will also be a part of the logic of enlarging the European Union into eastern and central Europe, and will lead to significant changes in funding arrangements and in the special arrangements for countries that are being assisted with regional funds.

8.15 pm

The disparities show the need for a fundamental examination of European Union financing, and they provide the basis for an argument that greater resources should applied to dealing with the types of problem mentioned by my hon. Friend the Member for Merthyr Tydfd and Rhymney, and that fewer resources should be expended on the wasteful common agricultural policy. I hope that the Government will vigorously implement their manifesto commitment—I am sure they will—to press within the European Union for rebalancing resources, so that we can spend far less on subsidising farmers and far more on helping regions on the periphery of the European Union and on areas with very high unemployment.

Mr. John Hayes (South Holland and The Deepings)

Does the hon. Gentleman therefore think that it is feasible to enlarge the Union but not to allow all members equal status in the CAP? Is he saying that the CAP is inappropriate for new members? If he is not saying that it is inappropriate, and that new members should be included in the CAP, the problems that he has described will be exacerbated.

Mr. Gapes

I am saying that, as it is today, the CAP is inappropriate for existing members, and that, with enlargement, it would be inappropriate to try to keep the CAP as it is. One of the best arguments for enlargement is that EU membership for Poland and Hungary will make it impossible to continue the current common agricultural policy.

Mr. Hayes

The hon. Gentleman mentioned Hungary, which has 1.1 million small farmers. One reason why Hungary wants to enter the European Union is that it appreciates the benefits of a common agricultural policy, be it in its current form or in a form envisaged under Agenda 2000. The problems that he described will be exacerbated by admission of some eastern and central European countries that have far less efficient farming than exists in the main stream—what he called the "core"—of Europe. He offers no solutions. Is he suggesting a two-tier Europe? What is he suggesting?

Mr. Gapes

I always thought that the Conservative party was in favour of enlargement, but perhaps my hon. Friend the Member for Broxtowe (Dr. Palmer) was right. We are hearing speeches from the new isolationist wing of the Conservative party, which does not seem to be in favour of European Union enlargement. Anyone who has been to Poland, Hungary and the Czech Republic—as I have—and talked to people there will know very well that people in those countries realise that, although they may not like it, their current agricultural system cannot possibly cope with European Union membership.

In Poland, for several years, there has been a significant economic shift, with fewer people working the land. Change is already happening. Many far-sighted people in those countries are using the prospect of European Union membership as an argument, before membership, to accelerate that economic shift, and they will use it after joining to reduce their dependence on an inefficient production system.

I hope that the Bill will receive full-hearted support from hon. Members on both sides of the House who believe in British membership of the European Union, and who realise that the Amsterdam treaty is a modest but important contribution to assisting the people of the United Kingdom, those in the rest of the European Union and those who wish to join the European Union in the future.

Mr. Gill

I am tempted to follow the excellent speech of the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands), who told the House what the consequences of fixed exchange rates would be on unemployment. It is important that there is a full, frank and honest debate about the consequences for United Kingdom employment prospects if we complete fixed exchange rates with the other countries of the European Union. History demonstrates—it is a matter not of economic theory but of fact—that, if the United Kingdom joins fixed exchange rates, unemployment automatically goes up.

The hon. Gentleman was honest enough to explain to the Committee that the only way to mitigate the effects of fixed exchange rates was by a massive transfer of funds from the centre to the regions. For the benefit of the hon. Member for Ilford, South, let me say that we must not assume that Great Britain will in future necessarily be regarded as a poor region that will attract the funds which would be necessary, if there were fixed exchange rates, to create prosperity or avoid unemployment in our regions.

On that same point, it is inconceivable that the constituents of those hon. Members who have spoken in favour of the treaty are going to resolve the matter of their own unemployment by moving to other parts of the Community. It is all very well to talk like that with reference to the United States of America where the same language is spoken in New York, Florida and California, but the same does not apply in Europe. Someone who loses his job in south Wales is not going to be in the same happy position as his American counterpart, and will not be able to find himself a job in Prussia, Italy or Portugal.

Mr. Gapes

rose—

Mr. Gill

I gladly give way to the hon. Gentleman; I look forward to him coming up with some hard arguments and facts to support his ridiculous contentions. To judge from what he was saying, I though that he was reading from his four-year-old's fairy tale book.

Mr. Gapes

My daughter reads books for much older children than that. Is the hon. Gentleman saying that, because this Government's policies will mean that we shall cease to have regions whose deprivation and unemployment is such that they attract special assistance from the European Union, we should therefore oppose enlargement of the European Union by smaller countries of central and eastern Europe? Is he now joining the hon. Member for South Holland and The Deepings (Mr. Hayes) in opposing enlargement?

Mr. Gill

The hon. Gentleman knows full well that that is not what I was saying. I shall now return to the point that I was making, which involved the effect of fixed exchange rates on unemployment. I conclude my comments on that issue by saying that it amazes me that so many Labour Members do not understand, refuse to understand or have perhaps been intimidated and are not allowed to understand that that is the key issue. It is the issue to which their constituents will return time and again—fixed exchange rates lead inevitably to unemployment.

It will not be the fat cats or the Eurocrats who find themselves without a job but Labour Members' constituents, and my constituents. I could not vote for fixed exchange rates because I know what the consequences would be for my constituents. The same was true of our membership of the exchange rate mechanism—thousands of my constituents lost their jobs, many of them lost their homes, and many lost their businesses.

Mr. Jenkin

rose—

Mr. Gill

I have to give way to my hon. Friend.

Mr. Jenkin

I am grateful to my hon. Friend for returning the favour. Does despair, like me, when confronted with arguments to the effect that we can somehow return to a Bretton Woods system which depended on one major currency instead of several as we have now, and which existed when there were capital controls on all the major economies, so that there were no international capital flows such as we have now? Does he not despair when people simply ignore the fact that even a big currency like the yen can crash and be subject to speculation? Labour Members seem incapable of learning that even the euro, stretching across an entire continent, could be speculated against, be unstable and lead to economic dislocation within that area.

Mr. Gill

I follow my hon. Friend's line of argument. As he knows, Bretton Woods was blown away by the oil crisis, just as every other system of fixed exchange rates has been blown away by one factor or another.

What I am trying to tell the Committee, particularly those Labour Members who do not want to hear it, is that the inevitable consequence of pursuing fixed exchange rates will be unemployment for their constituents. Sadly, there will be unemployment for my constituents, too. I do not believe in this policy, which is why I am resisting it. I do so not because of any brief that I have picked up from central office or from anyone else's office or from any lobby group—this is what Christopher Gill feels so strongly in his heart, and what is demonstrated by the economic history of this century.

Mr. Casale

I share the hon. Gentleman's concern for employment and for a European Union that offers clear benefits to the British people. However, many of the amendments, which I assume he is supporting, would prevent Britain from ratifying the Amsterdam treaty. Is he not aware that failure to ratify the treaty, which would then disconnect Britain from Europe, would create a level of unemployment of which even he, in his current line of argument, has not dreamed?

Mr. Gill

The hon. Gentleman draws attention to what he believes to be the obvious benefits of being in Europe. If he catches your eye, Mr. Lord, perhaps he will tell the Committee what those tangible benefits are; let him quantify them. In the meantime, I return to the argument that I was developing.

The hon. Member for Merthyr Tydfil and Rhymney also said that so many features of the European Union are the absolute opposite of what they profess to be. Paragraph 4 of article 1 of the treaty states: This Treaty marks a new stage in the process of creating an ever closer union"— I shall leave out at this stage any consideration of whether that is what the people of this country want— among the peoples of Europe, in which decisions are taken as openly as possible and as closely as possible as the citizen. The implication is that the European Union is to be a democratic organisation or a democratic state—that is the implication of saying that discussions and decisions are to be open and that everything will be brought as close to the people as possible. However, the opposite is the case. As the hon. Member for Merthyr Tydfil and Rhymney said, so much turns out to be the opposite of what we were told.

We are not talking about democracy today. The hon. Member for Merthyr Tydfil and Rhymney described the European Union as corporatist, but I have another word for it—collectivist. How else can one describe, for example, the common fisheries policy, whereby it is not this Parliament but the European Commission that tells our fisherman what he should catch—by species and size—where he should catch it and in what quantity? That is not democracy but collectivism.

It amazes me that even some Conservative Members who have opposed Communism all their lives have apparently found it in themselves to support these policies which are nothing if not collectivist. To this day— [Interruption.] The hon. Member for Ilford, South laughs, but is he laughing for the people of North Korea who are starving because that country continues to promote and adhere to collectivist polices?

Paragraph 2 of article 1 of the treaty declares that member states shall be determined to promote economic and social progress for their peoples, taking into account the principle of sustained development". To continue my analogy with the fishing industry, it is interesting to consider sustainable development. There we have a natural resource, which will go on regenerating itself if we handle it properly. Under the collectivist common fisheries policy, hundreds and thousands of tonnes of perfectly saleable fresh fish are being thrown back dead into the sea. When some of the fish reaches the shore, they are condemned.

In fishing harbours in the British isles, I have seen beautiful, plump fresh flat white fish covered in red paint because they did not come up to the minimum landing size prescribed, not by anyone in this Parliament but by the European Commission. I see my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) nodding in agreement, because he has been to those harbours with me and can verify what I have said.

That is all done in the name of conservation, which is the opposite of what is happening. In the name of conservation and in advance of the Fisheries Council last month, the Council was proposing to reduce the size of plaice that can be caught to the size of the piece of paper that I have here. A plaice of that size cannot possibly breed and needs a minimum of one more year, or more likely two, before it is fit to breed.

8.30 pm

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

Order. Visual aids are not normally allowed in the Chamber. I should be grateful if the hon. Gentleman would desist.

Mr. Gill

I am glad that hon. Members were able to see that before you intervened, Mr. Lord, but I bow to your judgment on that matter.

I was trying to point out that we are talking about an organisation that says that it believes in conservation, among many other things, but that what it is doing is the antithesis of conservation. I am glad to say that the Council has now agreed that the size of plaice that can be caught will be increased from the size that I was demonstrating, but there will still be a reduction of 20 per cent. on the size that is allowed now. In other words, we are going to catch smaller fish in the name of conservation. Everything is the opposite of what it seems, rather like another fairy tale.

Only through the continual and consistent misrepresentation of what the European Union stands for and what the treaties mean has this country progressed so far down this road, in the opposite direction to democracy, and the people of this country have not been consulted.

Will the Minister please be honest when he sums up tonight? Will he address the serious and important questions posed on both sides of the House and answer them? Unless he does, we shall not be having a debate at all. We want answers to those questions, and the British people deserve no less.

Mr. Bill Rammell (Harlow)

It is fascinating to observe the fundamental change in the Conservative party since the general election. Tonight, the former rebels who had the Whip withdrawn in the previous Parliament for opposing the then Government's policy on Europe are strongly represented. All those hon. Members here this evening have argued passionately and with conviction against Europe, and by implication, I believe, against membership of the European Union, and they have clearly been supported from the Opposition Front Bench. Clearly, that shows the way things have changed since 1 May within the Conservative party.

Also, we have heard a deep degree of fantasy, not reality, about what the Amsterdam treaty is about and what was agreed there. After all, that is what we are meant to be talking about. It is difficult to reconcile some of the assertions by Conservative Members and by the Opposition Front-Bench spokesman about the Amsterdam treaty with the views of other prominent Conservative Members and Conservative party supporters.

Mr. Jenkin

Can the hon. Gentleman clarify to which amendment he is referring?

Mr. Rammell

I am referring to a number of the amendments tabled on foreign and common security policy, the social chapter and the single currency, among others, as other hon. Members have done.

Interestingly, the right hon. and learned Member for Rushcliffe (Mr. Clarke) said of the Amsterdam treaty: There is no point in getting over excited about Amsterdam. The integrationists in Europe saw it as a victory for Britain and the British Government. Lord Howe, the former Foreign Secretary, said: Amsterdam disappointed the advocates of integration. Actually the treaty is a pragmatic and not a path-breaking document. How do we reconcile those views of what was achieved with the treaty with some of the xenophobic rhetoric about what was achieved that we have heard this evening? It is impossible—

Mr. Bercow

I am grateful to the hon. Gentleman for his courtesy in giving way. I invite him now, without a moment's delay, to cite exactly which example of a xenophobic statement he has in mind. Which hon. Member uttered the statement, at what point in the debate, and will he quote it?

Mr. Rammell

The general tone of the comments put forward this evening stems from a little Englander attitude that is based on the concept that we in Britain know best, that we can achieve everything on our own but cannot do so in concert with other nations. That is the failure of some of the views expressed this evening.

Mr. Owen Paterson (North Shropshire)

Will the hon. Gentleman give way?

Mr. Rammell

No, I will do so later.

Given the tone of this debate, it is also disappointing that it so little represents the majority view in the House and the country. People will look on this debate and wonder what sort of discussion we are having of these crucial issues when the arguments are so unrepresentative.

Mr. Letwin

I certainly would not want to say anything remotely controversial. I am sure that the hon. Gentleman would agree that the most remarkable feature of this debate is the entire absence of the Liberal Democrat party from our proceedings—a party which apparently has no interest in Europe and which he will agree has also not represented itself in European Standing Committee B.

Mr. Rammell

That comment has been made before, both this evening and in the Standing Committee. The hon. Gentleman makes it effectively, although we have an hour and a half to go and perhaps—who knows?—we shall have a view from the Liberal Democrats.

Concerns have been expressed about the item in the treaty referring to penalties for persistent abuse of human rights and the fact that those penalties will be used in some way to disadvantage Britain and the British Government. The shadow Foreign Secretary even implied that that element of the treaty would be used to block Britain's view on a minimum wage or other social legislation. That sort of scaremongering does no credit to the people who put it forward. There is no evidence in the treaty or any of the discussions at Amsterdam or elsewhere that anyone intends to use that element of the treaty in that way.

Concerns have also been expressed about the European Court of Justice, in particular about instances when it has gone beyond its remit, over-interpreting certain elements of the treaty legislation. One of the difficulties that the judges at the European Court of Justice face when interpreting the treaty is having access to the debates and discussions that take place when treaties are formulated. One mechanism that could help with the process would be to open up the meetings of the Council of Ministers so that people can be aware of the basis on which the original decisions were made when interpreting them. I would welcome Opposition Members' comments as to whether that view is shared across the House.

Mr. Letwin

That is a very serious point. I am sure that the hon. Gentleman will take comfort from the fact that all Conservative Members share that view. Why does he believe that the Prime Minister made no allusion to even a desire to achieve such a result in Amsterdam?

Mr. Rammell

In the six short months that we have been in office, we have taken several significant steps to open up the decision making of the European Union. That will progress in coming years. We are prepared to consider such changes. Time will tell.

I share some of the concerns expressed by hon. Members about the status of the employment elements of the treaty. We must ensure that there is substance to the initiatives and that there will be detail and real momentum behind the employment provisions. If Europe is only a monetary or business Europe, and is not based on jobs and prosperity for its people, it will not succeed.

We have also had a significant debate on the single currency. I welcome the fact that Conservative Members, unlike the Leader of the Opposition, have formulated policies on the single currency with some honesty and conviction. The concept of a single currency is alien to their political views. I believe that that is a false view.

Mr. Jenkin

Will the hon. Gentleman give way?

Mr. Rammell

No, I shall give way later.

One reason why I support a single currency in principle is that I do not believe that individual nation states have complete sovereignty and control over economic decision making. We have only to reflect on what happened in September 1992, when massive speculation and a run on the pound forced us to put up interest rates by 4 per cent. in one day in a futile effort to protect the value of the pound. A single currency, by virtue of being part of a larger currency bloc, could help to stem the power of the speculators. By pooling some of our sovereignty, we would have greater economic control.

Mr. Bercow

rose—

Mr. Jenkin

rose—

Mr. Rammell

I give way to the hon. Member for Buckingham (Mr. Bercow).

Mr. Bercow

Does the hon. Gentleman think it right that, under the single currency that he favours, member states should be open to being fined for seeking to influence the conduct of monetary policy by the European central bank? Does that not do violence to the principle of democratic self-government?

Mr. Rammell

The events of September 1992 were one of the major reasons for the scale of the Conservative defeat on 1 May, and one of their major causes was our lack of control over our economic affairs in a global international currency situation. I believe that, in some instances, we should pool some sovereignty to get more effective control over currency speculation and our own economic affairs.

Several hon. Members

rose—

Mr. Rammell

I will give way later. I want to make some progress.

Many hon. Members have discussed the common foreign and security policy. We need Europe to speak with one voice and to be able to influence the international situation. In many ways, the common foreign and security policy has already worked. The stability pact with central and eastern Europe linked accession with the record on democracy and human rights of applicant countries. That made progress, and changes took place. Working together with other European nations to put such pressure through the common foreign and security policy would achieve more than we could achieve as an individual nation.

The reconstruction and administration of Mostar under the common foreign and security policy saw countries coming together to achieve more than we could have achieved alone.

8.45 pm

Several hon. Members

rose—

Mr. Rammell

I shall give way in a moment.

On future development, through the mechanism of the European code of conduct for arms sales, we can achieve more than we could on our own.

Mr. Bercow

What objection does the hon. Gentleman have in principle to the extension of qualified majority voting in respect of the common foreign and security policy? To be absolutely clear, is there any such extension of QMV to which he objects in principle and that we can take as a touchstone of his political position on the subject?

Mr. Rammell

There are several issues on which it would not be appropriate to develop policy through QMV. That goes to the heart of the debate. The treaty and the common foreign and security policy are about enabling the EU to speak more effectively with one voice. They build in safeguards.

We have the common strategy, and we shall move forward by consensus where we can, but at the beginning the establishment of the common strategy must be achieved by unanimity. If we agree a common strategy and there is a proposal about which we are unhappy, we can argue the case as an important, stated reason of national policy that we want referred back to the European Council. Ultimately, the British people have the security of the veto on such important matters.

Mr. Jenkin

The hon. Gentleman suddenly sounds more sceptical about the nature and scope of European integration. By the same token, may I make it clear that Conservative Members, including my right hon. Friend the Leader of the Opposition, would, if we thought it in the national interest, agree to Britain joining economic and monetary union, but cannot foresee such circumstances arising for some considerable time.

Mr. Rammell

I am not convinced that that is the policy of the Conservative party. It is interesting to reflect that official Conservative policy on EMU—not some of the views advanced this evening—is logically inconsistent. If the objection to monetary union is constitutional and political, it should be ruled out for ever and a day.

To give Conservative Members their due, many have done that this evening. If it is not constitutional or political, it is an economic judgment, so how can it then be ruled out for 10 years? Many Conservative Members have thought the matter through and reached views with which I disagree but which are logically coherent, but that is not the position of their Front-Bench spokesmen.

Mr. Gill

The hon. Gentleman speaks as though entering into fixed exchange rates and giving away our currency would be a surrender of only a certain amount of sovereignty. What sovereignty would be left once we have created a single currency? I want him not to be airy-fairy but to think about the question and say in respect of what specific areas he thinks the House would retain any sovereignty, given that almost every decision affecting monetary and ultimately fiscal policy will be decided outside this Parliament.

Mr. Rammell

I do not accept the final part of the hon. Gentleman's argument. One of the fallacies put forward in this debate has been that, by signing up to a single currency, we automatically lose control of tax rates. The convergence criteria are about public sector deficits. No one would argue—from the left or the right—that a huge long-term public sector deficit is sensible economic policy. We would still have the ability to manage taxation policy.

In considering sovereignty, I am anxious about tackling international currency speculation, which the House cannot control. Some 90 per cent. of foreign exchange market transactions are not business transactions but pure speculation. When the circumstances are right and we join the single currency—we still need to make a fine judgment on that—we will pool some of our sovereignty and end up with more control over speculation and more ability to achieve stability, lower inflation, lower interest rates and, in the longer term, higher employment.

Several hon. Members

rose—

Mr. Rammell

I shall not give way, because other hon. Members wish to speak.

The shift within the Conservative party and the views that have been expressed have been useful, in that they have flushed the issue out into the open. A view has long been held that there is a deep well of nationalism and chauvinism in Britain. I do not believe that that is the case. I believe that those views are skin deep within the British people. By adopting and articulating such an extreme position, the Conservative party has forced people to confront the economic reality of Europe and the single currency.

It is already clear that a shift is taking place. I come into contact with it in discussions with people in my constituency. One can see it in the opinion polls. More people are prepared to consider the issues, and fewer are prepared permanently to rule out a single currency, as many Conservative Members wish to do. So the Conservative party has done us a service.

Mr. Denis MacShane (Rotherham)

On this occasion.

Mr. Rammell

Yes, on this occasion. We should take the shift forward. I hope that in the Committee proceedings we can have debates that are more representative of the views of hon. Members than the debate today.

Mr. Crispin Blunt (Reigate)

I should like to address my remarks to amendments Nos. 65 and 17, both of which I support. In doing so, I find in front of me on the ground a standard bloodied and battered which I, as the new Member of Parliament for Reigate, have inherited from my predecessor. I intend and am proud to raise that standard, although I shall rotate 180 degrees and carry it towards the enemy.

On foreign and security policy, the most important issue should be substance, not form. The treaty represents an uneasy compromise in this area, not only between form and substance but between the competing visions of the future of Europe. Nowhere is that more glaring or potentially more dangerous than the position on defence. That is illustrated by the language on defence in the treaty.

We have the welcome protocol on NATO, but in the new article 17 the integrationist French position of progressive framing of a common defence policy is conceded. The prospect of common defence combined with the protocol language on NATO arguably ends up with the worst of all worlds.

Let us consider the example of the Baltic states. Any security guarantee has the potential to spark a crisis with Russia. Russia will have no legitimate objection to the Baltic states entering an economic European pact, but the European Union is an institution accreting to itself the progressive trappings of statehood. For the Baltics there is an implicit security benefit to EU membership, but a specific defence arrangement could provoke a wholly avoidable European crisis and hand to the extremists in Russia the ammunition again to wind up the danger of Russian nationalism.

Never mind the Russians, what about the Americans? The United Kingdom is anxious to see the EU enlarged, as, formally, are our partners. We want the EU to enlarge well beyond the boundaries to which the United States Senate would be prepared to extend article 5 security guarantees. The juxtaposition of the protocol on NATO and the progressive framing of a common defence policy could lead to a crisis with the United States. We are entitled to be suspicious of the motives of those who would welcome such a crisis, for they exist. The cause of European integration will be significantly advanced if Europe has to develop, in the absence of the United States, a stand-alone defence identity that has to work in its own interests.

Although the Government should be congratulated on securing the language on NATO, they will need to be on their guard against the can of worms that the progressive framing of a common defence policy represents. Eternal vigilance will be required, a task beyond a Government who see no constitutional problems with a single currency.

The relationship between the Western European Union—the proper vehicle for European defence arrangements—and the European Union have been made unhappily dynamic by the treaty. The protocol to article 17 calls for arrangements for enhanced co-operation to be drawn up within a year. That process must not allow those two organisations to become legally or constitutionally muddled. The WEU council must remain distinct from the European Council. When the treaty grandly talks of the EU "availing itself of the WEU, its language is thoroughly unwelcome. It implies legal superiority of the EU over the WEU.

I remind the Committee that the duties imposed by the Brussels treaty are far more onerous than anything under the European Union or even NATO. That achievement should be preserved, not undermined, which is what the language of the treaty does.

Many tens of thousands of brilliant man hours, not least those of my former colleagues in the Foreign Office, have been spent on trying to frame the operation of a new common foreign and security policy. Their efforts have avoided Monsieur PESC, but all that intellectual effort has been wasted on agonising over structure and has not been directed towards what the CFSP should achieve. Their efforts have resulted in the hideous complications of common strategies, common positions, joint actions, constructive abstentions, a high representative, special representatives and so on, in language incomprehensible to ordinary people.

The focus should have been on output. I can express this no better than in the words of the previous Foreign Secretary, the former Member of Parliament for Edinburgh, Pentlands, in a speech in Paris. It is perhaps not difficult to discern the audience that he had in mind. He said: A sham display of unity convinces nobody, particularly not those who can sense the exercise of real power… Where CFSP represents common interests and common will, where it acts with the grain of our national traditions and perceptions, then it will succeed. But where CFSP tries to over-reach itself, there we should let reality prevail …It is a Common Foreign and Security Policy that we seek to establish, not a Majority policy.… But it would be wrong to believe that constructive abstention will somehow resolve real disagreements. It would make no sense to expect a country which actually disagrees with a policy to support it—whether politically or financially—through something called 'constructive abstention'… The real issue here is that it is the effectiveness of CFSP that matters, not the internal decision-making procedures. Constructive abstention, as foreseen by Malcolm Rifkind, is nothing more than the recorded public division that will undermine Europe's collective foreign policy influence. The way in which we deal with real crises will remain in the future, through coalitions of the willing, as in the Gulf, and through contact groups, as in the former Yugoslavia. Where European co-operation and the mutuality of our interests are real, the CFSP will enable the voice of the states of Europe to be heard with greater force and clarity. Constructive abstention and qualified majority voting on CFSP issues will undermine the objectives that the individual nations of Europe might otherwise pursue on their own account.

Finally, I shall discuss the wholly unfortunate arrangements for financing the CFSP. The treaty states that administrative and operational expenditure for the implementation of the CFSP, except defence expenditure, will be charged to the European budget. That startlingly foolish provision brings the CFSP within the scrutiny of the European Parliament, which, to its shame, already has a record of holding the budget to ransom in an attempt to force an increase in its influence in wholly unrelated areas. By that procedure, the Parliament will have an influence over the CFSP that we can be sure it will use. The Parliament might even use that influence for purposes unrelated to the CFSP, to advance its other objectives.

That provision gives the game away. A policy that is supposed to be intergovernmental is to be funded not by the member states, but by the European budget. If we want to know where we are being marched by the treaty, we need only follow the money. The Government perceive no constitutional issues in respect of economic and monetary union, and they are in favour of the greatest measure of European integration available. Why then, I am inclined to ask, are we going through the charade of pretending that the CFSP will remain intergovernmental? Why do the Government not get on with honestly promoting European integration in the CFSP, just as they will in EMU? The financing of the CFSP is yet more evidence of the direction in which we are heading, and passing amendments Nos. 65 and 17 would help to stop the rot.

9 pm

Mrs. Louise Ellman (Liverpool, Riverside)

My concern is that the amendments, together with the comments made this evening, would undermine the social and economic well-being of significant numbers of citizens of this country, in opposition to paragraph 2 of article 1 of the treaty. If the amendments were passed, the treaty could not be ratified, and the position of this country in Europe would be undermined at a critical time for this country as a whole and for vulnerable regions of this country.

One of the main ways in which the European Union has been of great benefit to significant numbers of our citizens has been through the operation of its structural and community policies. Enlargement of the community is being considered, and at the same time renegotiation is taking place on the eligibility of major areas of our country for access to vital European funds—conventional structural funds from the European regional development fund, and the European social fund and community funding.

Mr. Swayne

Is the hon. Lady aware that those funds come from the British taxpayer—that we are net contributors—and that we are quite capable of making those allocations? Will she address the issue of how those disadvantaged regions will fare when they are subjected to an unfavourable interest rate regime, which it might well be beyond the limits of any structural fund to put right?

Mrs. Ellman

I reject the hon. Gentleman's central contention, and I shall specifically answer his points about eligible regions.

My experience of eligible regions in this country is that the sensitive application of European funding has produced greater business investment, enabled essential skills training to take place and helped to redevelop major areas of our country. Specifically, I have seen representations to the European Commission and the European Parliament result in the setting up of the vital Konver fund, which has directly benefited areas of this country where the local economy was undermined by the running down of defence industries under the previous Government.

I have seen European funds working with the private sector in the objective 1 area of Merseyside, where the innovative special investment fund has used European funding with private sector money to support small and medium enterprises in a way not previously done. I have seen, in the north-west region as a whole, the setting up of a network of technology centres that work with the private sector, universities and the voluntary sector to ensure that new technological knowledge is applied in a variety of business concerns and voluntary organisations.

Mr. Bercow

I note what hon. Lady says, but, if I may say so, she has rather missed the point made by my hon. Friend the Member for New Forest, West (Mr. Swayne). Is she arguing, simply because she supports the operation of structural funds, that that justifies pursuing a deflationary monetary policy in Europe to increase those funds? Will she tell the Committee how, in any sense, the greater taxation that bigger cohesion funds would entail is consistent with the article 1 commitment to the promotion of the Fundamental Social Rights of Workers"? According to the hon. Lady's ethos, is it a fundamental social right of workers to be much more heavily taxed in future than they have been in the past?

Mrs. Ellman

The hon. Gentleman does not seem to understand the gist of what I am saying. I again state that I totally reject one of the Conservative Members' major contentions that our continuing membership of the European Union and our support of the treaty would jeopardise our economy in general. On the contrary, I believe that, were we not to ratify the treaty and to withdraw from the European Union, as many Conservative Members seem to want to do, that would be tragic for our economy.

I am not, as the hon. Gentleman suggests, arguing at this point for increased structural funds for specific areas; I am saying that we are at a most critical point, when the very continuation of the eligibility of critical areas such as Merseyside and much of the north-west of England is at stake. Were we unable to proceed with the strong leadership that we now have from the new Government, and were we not to have the good relations that we now enjoy with Europe, those areas identified as in need, where focused funds working with the private sector are making a great difference, might have their funds withdrawn. I am talking about the necessity of the continued eligibility of those areas rather than the necessity of an increase in absolute funding, although that would be most welcome.

Mr. Letwin

I have followed the hon. Lady's argument. I do not agree with her view on funding, but let us assume that she is correct. Has she understood the force of the question asked by my hon. Friend the Member for New Forest, West (Mr. Swayne)? Does she agree that, given that we are a net contributor, the funding that she is talking about could just as well come from the British taxpayer as from the European Union? So far, the hon. Lady has not made the slightest vestige of an argument for cohesion funds, for membership, for the Amsterdam treaty or for anything under discussion; she has argued in favour of certain subsidies.

Mrs. Ellman

The hon. Gentleman's comments strengthen the view that I have acquired throughout the debate, which is that most Conservative Members— certainly those here tonight—wish to withdraw from the European Union and not ratify the Amsterdam treaty.

Several hon. Members

rose—

Mrs. Ellman

I shall give way in a moment. It appears that, the more that Conservative Members seek to intervene, the more they confirm their basic opposition to this country's continued membership of the European Union.

Mr. Paterson

Let me put my question in incredibly simple language. In order to receive £1 back in European funds, the British taxpayer puts in £1.70. Our submission is that it would be more sensible if the decisions were made by the British Government and the money were not raked off on the way.

Mrs. Ellman

Once again, the hon. Gentleman seems to be advocating withdrawal from Europe. That may be the logical conclusion of the policy that has been officially adopted by Conservative Members and their leader, which is that this country should state now that it has no intention of joining EMU in any circumstances for at least 10 years. Tonight, Conservative Members seem to be confirming that the logical conclusion of such a policy statement—given for 10 years ahead, irrespective of what is to the benefit of this country—is that they are seeking withdrawal from the European Union. If so, perhaps we can have a debate on that subject on another occasion. I shall be pleased to participate.

Mr. Flight

Will the hon. Lady give way?

Mrs. Ellman

I shall give way for the last time.

Mr. Flight

The treaty and the single currency will inevitably require major changes to the subsidisation arrangements in the European Union—I hope to expand on this point later—and the part of the world that the hon. Lady represents is likely to do a lot worse in the future than it is doing today. There will be economic regions, particularly in the southern parts of the European Union, that will have the main call on that which is available for cross-subsidisation. I suggest that focusing on the benefits to her area is not an argument in favour of what is now going on in Europe.

Mrs. Ellman

The hon. Gentleman confirms the major argument that I am seeking to make: we are at a critical point because the enlargement of the European Union is taking place. It is critical that this country should maintain its relationship with the European Union and decision makers throughout Europe to ensure that our vulnerable regions get the best possible deal from Europe. I am grateful to the hon. Gentleman for reinforcing my argument.

It was ironic to listen to Conservative Members object to sections of the treaty on the ground that it would lead to further centralisation. I found it ironic, because my practical experience of dealing with Europe to bring vital investment, training and funding to Lancashire specifically and the north-west of England in general revealed to me that those benefits were gained because of the flexibility of the European Commission.

Together with colleagues from the private sector and fellow local authority representatives, I took part in delegations to the European Union and had meetings with commissioners and their staff. By arguing the detailed case relating to the economy of our areas, we were able to be decisive in persuading the European Union to define its boundaries for structural funds to reflect economic and social need. We also succeeded in persuading it to set up new funds, such as the Konver fund, to meet the specific needs of our individual areas.

According to my experience, which is shared by many others, the European Union, far from being a centralised monolith, is flexible.

Mr. Bercow

rose—

Mrs. Ellman

I shall not give way again.

If those who are seeking support on behalf of our citizens work out their detailed case, take the trouble to present it clearly and lobby effectively, that delivers valuable results. It did so for the people I represented in the past, and I hope that I will be able to deliver the same results for the people I now represent in Riverside and on Merseyside as part of the north-west.

I look forward to pursuing that case with Ministers in our new Government, because at least they are committed not just to the European Union but to the way in which it might benefit the regions and citizens of the United Kingdom.

Mr. Letwin

I do not think that I can share the brilliance that has been displayed on both sides of the House in the defence of major positions, and I shall restrict myself to a rather narrow argument, which I believe has the sole benefit of being true, about a particular part of article 1 to which amendment No. 65 addresses itself in part.

I refer to article K.7, in particular paragraphs 1 and 6, which give the European Court of Justice, to which my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) alluded in his opening remarks, two new powers relating to justice and home affairs, the so-called third pillar governed by title VI of the treaty of European Union.

In respect of paragraph 1, the new powers are to give preliminary rulings on the validity and interpretation of framework decisions and decisions and conventions. Paragraph 6 contains the power to review the legality of… any rule of law relating to its application of those same framework decisions, decisions and conventions.

A rational inspection of the history of this matter, of what is in the treaty and what we are being asked to pass into English law will show that this is part of what may best be described as the long march of the European Court of Justice toward ultimate power. Let me briefly review the history of its involvement in justice and home affairs.

In the original treaty of Rome—the treaty of the European Communities—the European Court of Justice had no involvement whatever in the area of justice and home affairs, because articles 164 to 188, which set up the ECJ at that time, gave it jurisdiction over matters concerned with that treaty, which did not refer at all to the so-called third pillar.

9.15 pm

In the Maastricht treaty—the treaty on European Union—article K.3 did give the European Court of Justice a potential role in these matters, but it was carefully circumscribed. My right hon. Friend the previous Prime Minister—no doubt aided by the previous Home Secretary, my right hon. and learned Friend the Member for Folkestone and Hythe—made great efforts to ensure the circumscription of that role.

Article K.3 says that the member states may "draw up conventions" about justice and home affairs specifically decided to be conventions, not decisions or framework decisions, and adds: Such conventions may stipulate that the Court of Justice shall have jurisdiction to interpret their provisions and to rule on disputes regarding their application, in accordance with such arrangements as they may lay down. In other words, the power to invoke the European Court of Justice was specifically restricted to agreements within conventions made by member states, and was not on the face of the treaty, a point which I am sure that my right hon. and learned Friend the former Home Secretary insisted on in the negotiation of that treaty.

I have taken the trouble to investigate some of the conventions that have been drawn up under that provision. I have one here, 97/C 195/01, which no doubt Labour Members, with their deep familiarity with the progress of European law, about which they display such enthusiasm—

Mr. MacShane

Conservative Members do not know any of them.

Mr. Letwin

From a sedentary position, the hon. Gentleman says that we do not know, but I can assure him that my hon. Friend the Member for Stone (Mr. Cash) knows this text by heart. The text in question is directly relevant to the question that we are addressing in article 1 and to amendment No. 65. It happens, by a subtle irony, that it relates to the fight against corruption by officials of the European Communities and officials of member states.

Exactly as envisaged in the Maastricht treaty, one part of the convention allows for the intervention of the European Court of Justice. It says specifically in article 12: The competence of the Court of Justice provided for… shall be subject to its acceptance by the Member State concerned in a declaration to that effect". In short, under the treaty of European union, the role of the ECJ in arbitrating disputes about conventions drawn up in the area of the third pillar was specifically restricted to acceptance by member states of such interventions on a case-by-case basis.

The position in the Amsterdam treaty is very different. When we move toward the Amsterdam treaty, we move to the new powers given in article K.7, which will be incorporated in English law if article 1 is incorporated in our law. Those are powers to give, in the first place, preliminary rulings on the validity and interpretation of decisions in relation to the third pillar—justice and home affairs.

The words "preliminary rulings" may sound innocuous; indeed, they may be designed to sound innocuous to the untutored ear. What more innocuous item could there be than a mere preliminary ruling? Alas, that apparently innocuous status is illusory. A glance at any of the standard texts, such as Craig and de Burca, shows that there has been a clear trend in the use of the preliminary rulings that article 177 of the treaty of Rome, which established the European Communities, gave rise to. I want to quote that authority for the illumination of the Committee—

Mr. Swayne

The line of argument that my hon. Friend is developing represents a fundamental shift in the balance of power between European institutions, and an immense gaining of power by the Court of Justice. Does he consider that this form of constitutional model—possibly an extreme variant on the American constitution, with its Supreme Court—ought at least to have merited some discussion, if not a constitutional convention?

Mr. Letwin

I am most grateful. As my hon. Friend will see, things are even worse than he supposes.

I return to the preliminary rulings and what the authority that I mentioned had to say about them: There would have been few commentators, at the inception of the treaty"— the original treaty of Rome— who could have guessed at the importance which this Article would have had in shaping both Community law and the relationship between the national and Community legal systems. The authors of the text make that comment because the power to issue preliminary rulings has been one of the great engines of judicial intervention by the ECJ in a wide range of activities throughout the Communities. Now, the ability to give preliminary rulings in relation to justice and home affairs will inevitably lead to just such a wide scope for judicial intervention in the areas covered by the third pillar.

It gets worse, because of paragraph 6, which gives the ECJ the right to review the legality not of framework decisions, conventions or other items of Community law but of any rule of law relating to the application of those aspects of Community law by member states. In short, it gives the European Court the right to review the legality of rules of law established by the member states themselves when applying framework decisions to justice and home affairs.

I return for a moment to the example that I have chosen, the convention on corruption, to see just what this means. That convention, to which the UK is a signatory, states that each member state shall take the necessary measures to ensure that the conduct"— it specifies the type of corrupt conduct— is made a criminal offence". Under paragraph 6 of the treaty of Amsterdam, which, by means of the incorporation of article 1, is to be incorporated in English law, the European Court of Justice will be given an unambiguous right to rule on the legal validity of any actions taken by the House to institute English criminal law which will govern corruption—in the case of this convention—perpetrated by English or UK officials. That is a departure of the utmost importance, not just in itself but because of its precedent effect. It suggests that the ECJ is to be given power to make rulings for the first time on the validity of English criminal law.

As I told my hon. Friend the Member for New Forest, West (Mr. Swayne), the situation is even worse than it might appear. It is not merely that this seemingly innocuous paragraph gives this right to the ECJ; it is not merely that it forms a bridgehead into much greater powers, deploying the whole scope of teleological interpretation—about which many of my hon. Friends have spoken, and for which the European Court is famed—to make judicial decision making the means of advancing the cause of integration. It is that it is a transfer that directly contradicts statements made to the House by the Prime Minister, who, on 18 June, said: In the justice and home affairs area… such co-operation will remain intergovernmental and subject to unanimity. Thanks to amendments that we also secured"— I remember distinctly that he preened himself at that moment— the European Court will have no authority to decide cases brought in United Kingdom courts on those issues."—[Official Report, 18 June 1997; Vol. 296, c. 313.] In making those statements, the Prime Minister convicted himself of either not having read and understood the treaty to which he is a signatory, or not having intended to reveal to the House what it contained. It behoves him either to come back to the House and defend his position, or to instruct his right hon. and hon. Friends to accept an amendment that would make his statements on 18 June true. Without that amendment, they are indubitably false.

We are discussing not merely the development of the European Union, but the incorporation into English law of something that the prime architect and sponsor of Her Majesty's Government was wholly unaware of—I convict him of no greater sin—when he brought the matter to the House. That is indicative of a far wider and greater problem. The Government have proceeded with a certain levity, and have regarded the treaty as a matter of no importance. They have suggested that nothing in it has the slightest constitutional impact.

Some Labour Members have made excellent speeches of an opposing tendency, and some have been present for the debate, but the Government have used bleepers to tell other Labour Members to stay away from this unimportant debate. They have been much encouraged by the Liberal Democrats, who have not been present for large parts of the debate. It is the spirit of wilful and invincible ignorance of the contents of the treaty that Conservative Members most fear.

The greatest danger for this country is not what lies in the treaty, but the Government's attitude. They encourage the British people to be innocent of what is in the treaty, so that they will discover only after the fact that great strides forward have been made by European institutions to acquire powers that it was never announced to the British people they were being given.

Dr. Palmer

One of the most interesting aspects of the debate, and of the way in which the amendment was introduced, was the ballet between the hon. Member for Stone (Mr. Cash), who is on his way out of the Chamber, and the right hon. and learned Member for Folkestone and Hythe (Mr. Howard). The hon. Gentleman claimed that he was speaking for the whole of the Conservative party. Very wisely, the right hon. and learned Gentleman made no such claim. Their approaches to the amendment complemented each other.

It is striking that, when the right hon. and learned Gentleman introduced what is essentially a wrecking amendment that would prevent Britain from accessing the treaty of Amsterdam, he gave as his reasons points of tiny detail. He spent a considerable time dealing with article K.12, which states: If a member of the Council declares that, for important and stated reasons of national policy, it intends to oppose the granting of an authorisation by qualified majority, a vote shall not be taken. The right hon. and learned Gentleman said that the European Court of Justice might be able to state that those reasons were not important. Anyone who examines that sentence cannot seriously maintain that it sustains that interpretation.

Not satisfied with that, the hon. Member for Stone suggested that the passage could mean that the European Court of Justice could decide whether the European Union could commit military forces, for instance in Bosnia. The right hon. and learned Gentleman did not dissent, although the entire article K relates only to police and internal security matters.

The Conservative attack on the treaty of Amsterdam again and again failed to focus on the main issues, and again and again returned to points of detail. We heard, for instance, the hon. Member for Stone arguing that the European Court of Justice should be allowed to give dissenting opinions.

Mr. Hayes

I regret that I have interrupted the hon. Gentleman's charismatic performance. Am I right in thinking that I heard him say that we should be dealing with the broad aims of the treaty rather than the detail? Surely the detail is what we should be examining. If we do not consider the details of treaties, what are we here for?

9.30 pm

Dr. Palmer

I am grateful to the hon. Gentleman for his interesting intervention. The problem is that the Conservative Opposition focus on minor aspects of the treaty, which, when examined more closely, disappear into thin air. They do not address themselves to the central details.

Should dissenting opinions be allowed in the European Court of Justice? Apparently it is an extremely important matter, but such opinions would change nothing in the decisions of the court. The issue was sufficient, apparently, to detain Conservative Members for some time. Is it Conservative policy that dissenting opinions should be allowed? The right hon. and learned Member for Folkestone and Hythe described it as an interesting point which had been forcefully expressed, but he did not express his opinion one way or the other. I do not know whether he wishes to do so now—obviously not.

Another dog that has not barked is the question of a referendum. There was a time when the Conservative party favoured a referendum on the treaty; is that still its position? We should be grateful to know. Some Conservative Members nod their heads and others are shaking their heads. We see also the absolutely immobile head of the shadow Foreign Secretary.

Hon. Members on both sides of the Chamber have talked about a single currency. They drew attention especially to the impact on regions. It should not have escaped their attention that we have a single currency in the United Kingdom, where there are considerable differences in economic development. I do not know whether hon. Members who are opposed on principle to a single currency for the next 10 or 15 years, or for whatever number of years, would favour breaking up the single currency in Britain so that we might have one currency for each region, allowing for devaluation for Merseyside and Scotland, for example. Or do they accept a single currency in Britain but for some mysterious reason do not accept it in Europe?

Mr. Blunt

The hon. Gentleman should be aware that within the United Kingdom, which he is correct to say is a single currency zone, there are enormous transfers within the tax and benefit systems to ameliorate the consequences of a single currency. The system ensures that, for example, people I represent in Surrey probably pay a significant amount of tax and receive fewer benefits than the people in Liverpool or Scotland. That is the sort of system that will have to be introduced to support a single currency within the European Union. That requires democratic authority and federal government to make things work.

When the hon. Gentleman responds to my intervention, will he make it clear that he accepts that a single currency move is the greatest step towards a united states of Europe? As I have said, it will not operate without democratic authority at a federal European level.

Dr. Palmer

I am grateful that the hon. Gentleman had time only to ask a question rather than to make a speech.

A single currency is coming whether we wish for it or not, and the question is whether Britain should be part of it.

Mr. Blunt

Will the hon. Gentleman give way?

Dr. Palmer

I will carry on for the moment. I will return to the hon. Gentleman's point.

The hon. Member for Stone spoke of the glorious past, when we had an empire and a single currency throughout the world up to a point, but he used that argument to oppose the development of a single currency in Europe. We have the choice of isolation in the European Union, withdrawal from the EU or working with our partners in the EU and within the single currency. That is the reason why Britain under a Labour Government has accepted that there is no constitutional bar to working together within a European single currency.

If there were a constitutional bar, there would be only two alternatives—isolation, as practised by the last Conservative Government, or withdrawal. We know that there are hon. Members who favour withdrawal and hon. Members who favour isolation, but Conservative Front-Bench spokesmen will not say which they favour.

Mr. Bercow

To coin a phrase, I fear that the hon. Gentleman is suffering from a refreshing outburst of frankness and candour. I have followed the logic of the argument closely. The thrust of the argument seems to be that the single currency is inevitable anyway, so we have to sign up to it. May I therefore invite him to tell the Committee whether he believes that, if the Community goes forward with a single currency and adopts a common direct taxation system as its accompaniment, we have no choice but to accept that as well?

Dr. Palmer

We have two choices: influencing the European Union's development and how the currency is implemented, or isolation, which the hon. Gentleman's party developed, signally failing to influence the development of the currency.

Mr. Blunt

Will the hon. Gentleman give way?

Dr. Palmer

I am aware that other Members wish to speak, so I am going to finish. I am sorry, but I will not give way again.

We need the European Union because it is the only body in Europe which is large enough to enable to us to grapple with the economic, environmental and trade challenges that we face. We cannot face them effectively on our own. The EU needs us because, without us, it will not be as effective as it can be. It wants us to take part and we want to work with it, in contrast with the previous Government. The treaty of Amsterdam is an expression of that common will to work together. It makes sense, and only the diminishing ranks of the Opposition fail to realise it.

Mr. Bercow

I am stunned by the contribution of the hon. Member for Broxtowe (Dr. Palmer). He has done the Committee a signal service: he has broken ranks with hon. Members who spoke before him. Not for him the language of national independence, but support for the practice of federalism. From him, it is crystal clear what we are getting: support not only for the practice, but for the principles, of federalism.

The hon. Gentleman did not disavow or eschew that, or seek to deny the thrust of the criticisms of his position. Instead, he seemed to accept what Conservative Members have consistently argued: the logical corollary of entry to economic and monetary union is the adoption of a common direct taxation system. To all intents and purposes, it is clear that we would get a federal centralised Europe in which scope for individual decision making would no longer exist.

Dr. Palmer

rose—

Mr. Bercow

I happily give way to the hon. Gentleman if he wishes to correct that interpretation of his position.

Dr. Palmer

I thank the hon. Gentleman for giving way. In view of the lack of time, let me simply tell him that I said no such thing. What I said was that expressing our willingness to work within the European Union and with monetary union gives us a chance to influence the way in which monetary union takes place.

Mr. Bercow

I thank the hon. Gentleman for clarifying his position, but, sadly, whatever he may think, what he says does not in any way detract from what I have just said about his position. The reason is simple. The hon. Gentleman believes that, if the rest of the European Union chooses to proceed with a single currency, we can argue about the detail, the way in which the currency will be developed and how it will be implemented, but we have no realistic alternative to participating in it.

Similarly, it must logically follow from the thrust of the hon. Gentleman's speech that, if the European Union chooses to adopt a common direct taxation system— although we can argue about the detail, express an opinion about the way in which the system is implemented or offer a judgment about the level of direct taxation—we have no serious alternative to participating in that system.

Mr. Hayes

The hon. Member for Broxtowe (Dr. Palmer) said—no doubt Hansard will bear this out— "We have no choice." He did not suggest merely that we were there influencing affairs, as he subsequently claimed in his brief intervention; he said that this was determined and inevitable, and that we had no choice.

Mr. Bercow

As ever, my hon. Friend has been helpful in elucidating the truth, and distinguishing it from the way in which—moments after sitting down—Labour Members seek to rewrite history. My hon. Friend is an attentive observer of debates of this kind, and, as always, I am grateful to him for his voluntary co-operation in my speech.

Mr. Letwin

I thank my hon. Friend for his patience in giving way to me a second time. I hope that he will join me in adding a codicil to what my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes) said a moment ago. Could it not be said that the hon. Member for Broxtowe (Dr. Palmer) suggested earlier that he would like to join the top table in order to be eaten?

Mr. Bercow

As ever, my hon. Friend makes his point beautifully and succinctly. Clearly, the experience of collectivism is always, everywhere and without exception to be preferred to that of isolation. The fact that being isolated in a particular circumstance might allow one to continue to live apparently does not spoil the beauty of being eaten as part of a collective.

Mr. Gapes

Can the hon. Gentleman tell us how many other parties of the Conservative and Christian Democrat right in the whole European Union and all the applicant countries agree with him?

Mr. Bercow

I am fascinated by the hon. Gentleman's thesis, although I am not sure which parties he has in mind.

Mr. MacShane

Answer.

Mr. Bercow

I am happy to answer. The hon. Member for Rotherham (Mr. MacShane), who spends a great deal of time outside the United Kingdom, is becoming rather excited, but I can tell the hon. Member for Ilford, South (Mr. Gapes) that most of his friends elsewhere in the European Union have the guts and integrity to admit that the position that they support means the achievement of a federal Europe. I am saddened that the hon. Gentleman cannot permit himself a similar candour.

Mr. Gapes

rose—

Mr. Bercow

As you know, Sir Alan, I have been extremely generous in giving way to Labour Members. I shall not continue to do so, for the simple reason that I feel an irresistible urge to develop a couple of points without being interrupted by them.

I want to focus on two points. The first is the incompatibility, in article 1, between the commitment to the fundamental social rights of workers and the reference, a mere 284 words later, to economic and monetary union, including a single currency. When I have dealt satisfactorily with that, I shall move on to the subject on which my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard), the shadow Foreign Secretary, was especially eloquent—the pernicious new provision for European Union competence in respect of human rights.

On economic and monetary union, let it be clear beyond peradventure what the treaty states. It refers to the fundamental social rights of workers. It says that at the outset. I want to know from Labour Members, and I should be interested to see whether the Minister is capable of an answer on this point, how that is compatible with the commitment to economic and monetary union and the adoption of a single currency.

9.45 pm

Let me make the point explicitly, so that the Minister has no reason to ignore it as the debates progress. Is it a fundamental social right of an individual worker within the European Union to make a representation about the conduct of monetary policy under the single currency by the European central bank? Is it a fundamental social right of a worker to be able to enjoy an interest rate that reflects the economic circumstances of the country in which he or she lives, rather than the preferred wisdom of a group of bankers whom he or she does not elect and cannot remove?

We need to know from the Government whether they understand the difference and the inconsistency between the commitment, on the one hand, to the principles of democratic self-government, and the fact, on the other, that people will be entitled to no say—if the treaty proceeds and the single currency goes ahead—in the conduct of monetary policy.

It is simply beyond belief that right hon. and hon. Members on the Government Front Bench are not aware of the incompatibility between those two positions. Many Opposition Members believe that the commitment to what are called social rights is as near to meaningless as not to matter. We do not see any advantage to the citizens of the United Kingdom from adoption of the social chapter or acquiescence in the social charter.

We see no merit in that, but we respect the fact that there are right hon. and hon. Labour Members who would see some merit in that. We cannot understand, however, how they can claim to be committed to fundamental social rights, yet not understand the incompatibility of that position with support for a single currency. How can it be right that a single currency, with a single monetary policy, a single fiscal policy, a single taxation policy and, to all intents and purposes, a single economic policy should be imposed on the citizens of this country, without their knowledge, let alone their approval?

The Government cannot run away from the issue for ever. Elsewhere in Europe, the debate is conducted probably with equal intelligence, but with a degree of candour. Those who support the development of a federal Europe in countries other than the United Kingdom are prepared to say so.

I challenge the Minister to explain how he can continually say that he does not favour a federal Europe, yet can sign up with unbridled enthusiasm to a treaty that indubitably takes this country increasingly in a federalist direction. I appeal to the hon. Gentleman to explain the mismatch between the rhetoric and the reality.

I do not know what the hon. Gentleman's constituents were saying to him on the subject during the election campaign, but, when I was canvassing during the election—this has been the experience of my right hon. and hon. Friends as well—we consistently met people, day after day, who were fed up with the conflict between the commitment to a free, democratic and independent Europe, and the reality of an increasingly centralised and undemocratic European Union.

The Minister is drenched in the day-to-day party political conflict, but he must understand that I do not develop my argument on that basis. I am the first to concede that some people in my constituency were unwilling to vote Conservative on 1 May because they were insufficiently persuaded that we would resist the drive towards centralisation. If I had been accompanied by my right hon. and learned Friend the Member for Folkestone and Hythe during that campaign, I do not doubt that I would have had even greater success in dissuading them from that view. However, some people were concerned about the Conservatives on that account.

The Conservatives are explicit and honest. The hon. Member for Harlow (Mr. Rammell), who courteously gave way many times, correctly acknowledged that we have been absolutely consistent. We say that we are for free trade, not federalism; that we favour co-operation not coercion; and that we believe in a European Union of independent and co-operating nation states, but are wholly and irrevocably opposed to a single European state. Because we oppose a single European state, we oppose moves in that direction. That is why we oppose the treaty of Amsterdam.

If the Minister wishes to advance an argument in support of federalism, the Committee will doubtless be fascinated to hear it. The Conservatives would disagree with him—my hon. Friend the Member for West Dorset (Mr. Letwin) would dissect his argument brilliantly and ruthlessly—but we would hear him with respect. We would acknowledge the integrity of his argument and recognise that it is consistent with the policies for which the Government vote and for which Ministers negotiate. However, we cannot understand, and we surely cannot be expected to respect, the practical signature to, and consent for, federalist policies accompanied by a rhetorical denial that that is what the Government want.

I move from the subject of economic and monetary union—profoundly undemocratic as it is—to the provision on human rights to which my right hon. and learned Friend referred eloquently much earlier in the Committee's proceedings. The Minister must respond. Many hon. Members on Opposition Benches—and, I wager, a few on the Government Benches—are genuinely anxious about article F.l. [Interruption.] Chuntering from a sedentary position, as though he resembled the village idiot, does the Minster no good. That is not good enough. The hon. Gentleman must listen to the point and respond to it.

The reality is that the provision on human rights is pernicious. The reason can be stated simply: the provision is unnecessary. Member states are signatories to the European convention on human rights and to the United Nations charter. Member states within the European Union are united in their support for the principles of liberty, the rule of law and democratic self-government.

I challenge the Minister or the Foreign Secretary to answer—not abuse—the point that my right hon. and learned Friend has made: if a member state fails to respect human rights, surely it is better to expel that state from the European Union than say that a member state that falls foul of majority, at a given time, should be punished for so doing but still required to stick to its Community obligations. That is not an honourable or a defensible position.

I shall state our concerns in practical terms by offering the Minister three examples. I shall give way happily if he is capable of responding seriously to any of them.

The first example is the minimum wage. What is to stop the European Union deciding that there is a fundamental human right to a minimum wage at a given level? The issue is not whether the Minister thinks that a minimum wage should be a fundamental human right. The question is: what is to stop the European Union, after signature and ratification of the Amsterdam treaty, from so deciding? If it so decides and the United Kingdom believes that it is unacceptable and refuses to go along with it, this country would presumably then be subject to the penalties that the treaty envisages—while, of course, still having to honour its community obligations.

Mr. Letwin

Is my hon. Friend aware of the great force of his remarks in the light of the fact that many of the statements about human rights specifically refer to slave labour and to excessively low wages?

Mr. Bercow

That is precisely right. Our concept of human rights, and specifically of what constitutes economic rights, is different from that of other member states of the European Union. As I am sure that my hon. Friend has anticipated, that is at the heart of my concern on this point. I challenge the Minister to state categorically that the European Union would not invoke new article F.1 in justification of the application of a mandatory Communitywide minimum wage of a given level to which all member states were obliged to conform. That is the first example.

The second example that I offer the Minister—if he is able to contain his impatience for only a moment, and to exercise what self-restraint he can muster—is a situation in which the United Kingdom were to decide that it supported the right to the practice of homosexual sex at the age of 18, but declined to support it at the age of 16. If the rest of the European Union opted for a policy of allowing it at the age of 16 and we deviated from that policy, could it not be held that we had breached a fundamental right as espoused by the European Union? What recourse would we have?

Mr. Cash

Does my hon. Friend accept that the notion of sexual orientation could easily include paedophilia? Does he agree that it was absolutely reprehensible to include a sexual orientation policy as a part of fundamental human rights when we are denied the idea of self-determination as a sovereign nation?

Mr. Bercow

I entirely endorse my hon. Friend's comments. It would be a bizarre situation.

Against that situation, however, I contend—I think that many Conservative Members would agree—that we have no protection if we sign the treaty. The Minister will probably think, "It might not happen; it probably won't happen; and, if it does happen, my right hon. Friend the Prime Minister will have moved me on to some other ministerial post by the time that it does happen." That is not a satisfactory answer to Conservative Members.

Mr. Swayne

Does my hon. Friend agree that it is more likely that such a challenge will be mounted in the social sphere? The treaty makes it clear that the principles on which judgment will be given are not in this treaty but are laid down in the social charter. They are laid down not in the Maastricht social provisions, but in the social charter.

Mr. Bercow

My hon. Friend is absolutely right to draw attention to the dangers of the social charter. The social charter has been much ignored in our debates, but it contains provisions that are infinitely more threatening to United Kingdom citizens than anything that is in the social chapter.

I am inviting the Minister to offer some proof that we have protection against those developments. He sits there chattering away to the Minister of State, Foreign and Commonwealth Office, the hon. Member for Leeds, Central (Mr. Fatchett), but he has nothing to say. He has advanced no argument. He responded to no point made by my hon. Friend the Member for Stone (Mr. Cash), and he sat in blithe ignorance of the potency of the arguments made by my right hon. and learned Friend the shadow Foreign Secretary. It is breathtaking that the Minister can sit there, preoccupied with nothing other than where he is going when he leaves the House at the end of the evening, so that he is not able to respond to the thrust of the arguments deployed against him.

The reason that we oppose article 1 and the treaty—

Mr. Gerald Bermingham (St. Helens, South)

On the issue of where everyone is going in about one minute, does the hon. Gentleman agree that section 28 of the Mental Health Act 1983 probably applies in his case, and that the sooner two men in white coats come to remove him, the better?

Mr. Bercow

I hope that I can be forgiven for wondering whether the hon. Gentleman is experiencing the after-effects of an extremely agreeable dinner, but that does not detract from the point—

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

Committee report progress; to sit again tomorrow.