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Mr. Benn : Somebody once said that history is bunk, but I am sure that is not your view, Mr. Deputy Speaker. I do not believe that we can understand where we are or where we are going unless we look back at where we have come from, and that is true of nowhere more than Europe. But I shall not tempt you, Mr. Deputy Speaker, by trying to abuse your kindness.

I believe that the Common Market, NATO, the Warsaw pact and Comecon are out of date. They are dinosaurs, overtaken by events, and we should look beyond them to the future. There is an urgent need for new thinking. As there is no vote, I am not asking any hon. Member to come into the Lobby with me in support of my views, but we need more imagination than has been shown by-- dare I say it--all parties in the House. There are people with a vested interest in the division of Europe, not least the Commission in Brussels, including the generals in NATO and the Warsaw pact and not least the arms manufacturers, who make billions of pounds out of keeping us at a high level of military expenditure that we do not need. I believe that the time has come to think about ending the division of Europe because it is no longer relevant, necessary or desirable. Above all, if we could replace the fear that lies behind the division of Europe with hope, then we would release the energies of our continent and allow it to contribute more effectively to the peace of the world.

6.7 pm

Mr. John Butterfill (Bournemouth, West) : Before commencing my remarks, I must say that I am sure that the hon. Member for Hamilton (Mr. Robertson) did not wish to mislead the House when he stated that inflation on a directly comparable basis was 7.5 per cent. in the United Kingdom and 4.9 per cent. in the rest of the Community. I am also not sure that 4.9 per cent. is correct, but it may be. But I do know that it is not true to say that 7.5 per cent. is directly comparable with 4.9 per cent. As my right hon. Friend the Chancellor of the Exchequer told us this afternoon, we are the only country in western Europe that includes the mortgage interest rate in that calculation. The hon. Gentleman also told us that, on a directly comparable basis, our inflation rate would be 5.5 per cent., which would mean that we have by no means the highest inflation in western Europe. That is an important point to have on record, and I do not see the hon. Member for Hamilton seeking to contradict me. I welcome this opportunity to debate recent events in Europe, although I, like many other hon. Members, also regret the fact that we are debating them so retrospectively and are not having the opportunity--which I hope we shall have in future--to look forward to where we are going in Europe, rather than always looking back at where we have been. If we look forward in Europe, we can see many encouraging events taking place, not least the solidarity

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this week over the Salman Rushdie affair and the helpful foreign policy posture that our partners in Europe have taken.

I shall now turn, as some other hon. Members have tended not to do, to the contents of the White Paper, and I shall look at some of the developments that are outlined therein. It may be helpful to see where we may be going.

One of the most important areas of co-operation that is outlined is co- operation on the environment. That is a topical issue in this country and, I believe, an issue on which we should be concentrating our energies in partnership with our European colleagues to build a better environment than our present one. There have been important agreements on sulphur dioxide and nitrous oxide emissions and on diesel emissions. Those of us who travel through London's traffic know how irritating the latter can be.

It was very important that we ratified the Montreal protocol. I hope that we shall be able to go much further in tackling Europewide environmental problems that we must undoubtedly share if we are going to overcome them. If Chernobyl taught us anything, it is that we cannot be an island, and nor can any other country in Europe. Major environmental disasters can overtake all of us, unless we take care to ensure that they do not happen.

I am equally concerned about the trend towards protectionism. The White Paper refers to the trade problems that we have had with the United States and Japan. We should be careful that we do not develop a protectionist policy of our own in Europe and put up barriers around us so that we can no longer look outwards. In that respect, the agreement that we have reached with Hungary, and the important agreements that we have reached with our friends in the Gulf States, are encouraging. We should pursue that example.

There is one rare respect in which I agree with the right hon. Member for Chesterfield (Mr. Benn), which is that we need to look beyond the immediate frontiers of Europe. We need an outgoing Europe. Britain depends more on external trade than any other country in the world. We export a greater proportion of our GNP than any other country--almost double the proportion that Japan, for example, exports. We would therefore be the first to be hurt in any trade war or by European protectionism, which I am sure no Conservative Member would wish to happen.

The White Paper refers to deregulation and gives some important examples of what we have achieved. I should like to express my pleasure that in June we managed to end steel quotas once and for all. All such arrangements are totally undesirable in the view of those of us who believe in free trade, and the completion of the internal market should be a major priority for all of us in future. I agree with my hon. Friend the Member for Southend, East (Mr. Taylor) that we have failed to tackle adequately the terrible problem of agriculture. It is totally unacceptable that such a high proportion of the Community's budget should continue to be devoted to agriculture. It is essential that we build on the limited successes that we have had so far--with stabilisers, milk quotas and ceilings on agricultural spending--to try to ensure that the Community's attention is turned to matters far more important than agriculture. Agriculture is significant, but in global terms--in terms of the economy of the Community as a whole-- it is only a minor part of the matters to which we should be addressing ourselves.

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The White Paper goes on to deal with the budget, and pleasure is taken in the fact that we have managed to maintain the Fontainebleau agreement, so vital to British interests. It was interesting to discover that the Council agreed that we needed to tighten the budgetary management of the Community. That is a great

understatement. The budgetary management of the European Community to date has been lamentable. If the member states are to be asked to agree to increase the budget of the Community--no doubt there are respects in which that might conceivably be desirable--the Commission will have to show that its budgetary management is a good deal superior to that which it has achieved to date.

The White Paper discusses the single market and instances what it claims to have been significant successes in promoting the single market. Undoubtedly, there have been successes, and I would not wish to decry what progress we have made. We have had limited successes in banking and financial services. We have had limited successes with insurance--my hon. Friend the Member for Southend, East was right to point out just how limited those successes have been. In general insurance, our success has been very limited indeed, and as yet we have made no progress on life assurance. It is vital that we make progress in these matters and that we in Britain take the lead in ensuring that we make progress. We have a great deal to contribute to the Community, and we also have a great deal to gain from the Community if we can make that progress.

Hon. Members have referred to monetary union--with which the White Paper also deals--and to the directive on free capital movement. I have one or two things to say about that. This country gave the lead on free capital movements some time ago by abolishing exchange controls. The Opposition predicted that that would have dire consequences and that it would be an appalling thing for our economy. Quite the reverse has happened, and we have been able to show our fellow member states what a good thing free capital movement would be.

I am nevertheless concerned that the price being asked for free capital movement is the imposition of a 15 per cent. withholding tax throughout the Community. What an absurd suggestion. I put it to the Minister that it may also be ultra vires in terms of the treaty, as such a tax would achieve no Community purpose. While it can be argued that VAT should be harmonised and even that VAT should be imposed because it is the base tax for the Community's own finances, there is no justification in any Community purpose for the existence of a withholding tax, which would be raising revenue from non-resident members, not for the Community but for the member states. That is an extraordinary suggestion.

I know that the suggestion comes from the French and that it comes from them because, with the retention of their Socialist philosophies, they cannot believe that, given free capital movements, their citizens would not remove all their money from France and make fraudulent returns to their tax authorities. The French must give up the shibboleths of state authoritarianism and move with the rest of us into the latter part of the 20th century and have a good deal more confidence in the integrity of their own citizens.

Mr. Ian Taylor : Does my hon. Friend agree that the French would be better off if they imposed a 15 per cent.

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withholding tax on suitcases, in recognition of the most common way in which the French transfer money across borders and frontiers?

Mr. Butterfill : That is true, although it would probably cause problems for the travel industry in France, which makes a lot of money out of those who travel back and forth carrying the suitcases to which my right hon. Friend rightly referred.

The other great plank in the argument about monetary union is that Britain should join the European monetary system. No doubt as a long-term objective, monetary union and membership of the European monetary system could be a good thing, as it might facilitate internal trade within the Community, but we should not under-estimate the problems that would arise not only for us but for the Community if we joined now.

No other European country has a reserve currency such as the pound. The currencies of most European countries are traded in only to the extent that they need to have trade within their borders. Trade in the pound is very much greater because so many countries external to the Community use sterling as a reserve currency. If hon. Members do not believe what I am saying, they need only consider the recent enormous movements in the pound's parity against the deutschmark and the United States dollar. Not all that long ago, we were discussing the possibility of having a pound parity with the dollar. Now, the value of the pound is close to $1.80.

There is no way that the EMS, as presently constituted, could have survived swings and changes of that nature, nor do I believe that we should have been able to take the measures necessary for the correction of the great stimulus that we have give to the British economy if we had been members of that system. Therefore, I believe that, both for our own internal purposes and for the benefit of the EMS as a whole, it has been right that our Chancellor and our Government have decided not to join the EMS at this time. Much has been said about the social market, and there has been some concern that we should be giving any support to the concept of a social market. I do not have any problem with the concept of a social market, but I have a problem with the concept of a Socialist market. I do not want to see a Common Market or a European Community that imposes upon us the sort of Socialist measures that we have so successfully removed from our own economy, and that would bring back our previous problems.

If we look, for example, at the fifth directive on company law, the Mitbestimmung or the proposals made by Mr. Vredeling, we see that we are being asked to accept worker directors, two-tier boards and trade union participation. Make no mistake about the fact that the worker participation would be through the trade unions. We would be back to the days of beer and sandwiches at No. 10.

Mr. Win Griffiths : The hon. Gentleman referred to the co-operation of workers and the introduction of boards, but does he acknowledge that Germany already has a similar system to that which was proposed? Can the hon. Gentleman explain why, if that system works in Germany, it cannot work anywhere else in the European Community?

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Mr. Butterfill : I am happy to explain that to the hon. Gentleman. The system of trade unions in Germany is different from the system here, as are German traditions. In fact, a large number of companies in Germany and in Denmark--where similar systems exist--would like to get rid of those systems. I have no objection if they wish to keep them, or if some British companies wish to adopt them, but I object to them being imposed upon this country and all other countries of the European Community whether they are wanted or not. It is that dimension of the social market to which I most profoundly object. If we are to have company law directives, it would be far more profitable for Brussels to look at the restrictions in company law and in the articles of association of companies in the European Community and, indeed, the governmental restrictions which frustrate takeovers of companies on the continent, in contrast to the freedom which exists for countries to come here and take over British companies. That appears completely unacceptable, and it is an area of company law that the Commission would do well to look at. I believe that it is vital that we have an agreement on that, and that we remove all those areas of covert and actual restrictions that exist within companies--for example, in Germany, where it is almost impossible for a major German public company to be the subject of a hostile takeover bid. That cannot be acceptable while the reverse is not true in this country. Those are the areas to which I would like the Commission to devote its attention.

If we consider, for example, the interference which the Commission is proposing in the employment of part-time workers, we see that it is telling us that, if we want to have part-time workers, they must have exactly the same conditions of employment and rates of pay as full-time workers. That is absolute nonsense. It is saying that there should be limitations on the hours that part-time workers can and will be permitted to work. That is an awful piece of authoritarian jargon. How damaging that would be to the economy of this country and the economies of the other European countries. Such authoritarian Socialism plays no part in the sort of Community that I wish to see ; nor does paternity leave.

If the Belgians and the French would like to have a 35-hour week and believe that that would benefit their economies, let them have it. Let it not be imposed, however, on all the other countries of the European Community.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley) : When the hon. Gentleman is speaking against worker participation and the provisions which would protect and give rights to the worker, is he speaking as the Member of Parliament for Bournemouth, West, as the president of European Property Associates, as a director of John Lelliot Developments, or on behalf of any of his other declared interests? Is it not clear that the hon. Gentleman is looking after those interests--as representing the employers--rather than representing the interests of his constituents?

Mr. Butterfill : The hon. Gentleman does himself rather a disservice by that intervention. He knows that I am speaking not only for my constituents in Bournemouth, West, but for the benefit of the great majority of British, and indeed European, people. I believe, for example, that

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a 35-hour working week which was imposed upon the whole of Europe would lead not to benefits for workers or for any of my constituents, but to higher inflation, lower output and loss of productivity. I cannot see any benefit to my or the hon. Gentleman's constituents in adopting all this Socialist claptrap.

I do not expect the hon. Gentleman to agree with me, because the Labour party never agreed. It was the burden that the hon. Gentleman's party imposed upon this country under successive Governments after the war that brought us almost to our knees. It is only this Government's subsequent actions to divest ourselves of those burdens that have enabled us to become as successful as we are today.

Mr. Foulkes : The hon. Gentleman mentioned my constituents in Carrick, Cumnock and Doon Valley. Whenever I speak in the House, there is no doubt that I am speaking on behalf of my constituents. I have no other outside interests. I have no consultancies or directorships. It is incumbent upon Conservative Members to reveal from time to time that they are speaking not necessarily on behalf of their constituents, but on behalf of their outside interests. The hon. Gentleman has outside interests, and what he is saying is directed much more to defending those interests than those of the people of Bournemouth.

Mr. Butterfill : I believe that the hon. Gentleman's allegation is disgraceful, and unworthy of him. He will know that I have made a full declaration of my interests, which are well known to the House. I have not taken directorships of any companies of which I was not already a director before I became a Member of this House. Nor have I taken any consultancies since I became a Member of this House. Indeed, I have refused all consultancies since I became a Member of this House, quite deliberately, because I believed that I should represent my constituents and that I should not use my position as a Member of this House to further my personal career. Therefore, my business career has been damaged and not enhanced by being a Member of this House.

I do not speak on behalf of any of the companies mentioned by the hon. Gentleman. In fact, I am no longer a director of John Lelliot Developments. If the hon. Gentleman looks in the Register of Members' Interests, he will see that I resigned from that company some time ago. I am now a director of fewer companies than I was when I came into the House. His allegations are really quite beneath contempt. I do not propose to deal with them any further.

Mr. Boswell : Is it not the case that my hon. Friend's constituents contain an unusually high number of retirement pensioners? Are not their interests quite as important as those of people who are in employment, both in this country and throughout Europe? Do they not all have an overriding interest in economic efficiency and a reduction in inflation?

Mr. Butterfill : My hon. Friend is right. I am grateful to him for that helpful intervention. It is, however, dignifying the hon. Gentleman's comments far more than they deserve to proceed to consider them any further.

I would like to turn to some of the other areas in the European Community where I believe that we are being damaged by the sort of claptrap that the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes)

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believes in. The Commission is, for example, seeking to promote new funds. It is not content with its existing empire, but wishes to move into new areas of activity. The latest proposal is a draft directive for a medium term transport infrastructure fund. With this fund, the Commission proposes to tell us how we can best build roads in the individual countries of Europe so as to better create a road infrastructure for Europe. Certain people, including representatives of the CBI in the south-west region--my region--say that that is a good thing. They think that they might get the A350 rebuilt more quickly if they latch on to the idea of a European infrastructure fund. As I told them, there is no such thing as a free lunch. If we were to contribute to such a fund, the vast majority of it would go to building new roads in Spain, Portugal, Greece, and other parts of the Community. They would be rather less likely to get their road than if they left the process to our national Government. It is far more appropriate for national Governments, being more responsive to their citizens' wishes, to decide what roads are needed, and where. I object to the concept that some gentleman in Brussels will decide where my constituents will need a new road. That is another case of empire building.

Sir Russell Johnston : I agree with the hon. Gentleman's argument, but does it not apply with equal logic to Scotland, which is within the United Kingdom?

Mr. Butterfill : That may be the case. No doubt the hon. Gentleman will have an opportunity later in the debate to propound that view. There are matters within the European Community in which we should make further progress, and there are other matters in which it is quite inappropriate for a supranational body to make such decisions. It is much more appropriate for them to be left to local decision.

Mr. Win Griffiths : Will the hon. Gentleman give way?

Mr. Butterfill : I shall not give way. I am winding up my remarks--I have been very generous in giving way--and many other Members wish to speak.

We did not defeat the slush fund philosophy of public expenditure in this country to accede to it again in Europe. That is why we are being so vigorous and why the Prime Minister was so vigorous in Bruges in opposing that philosophy, and why it is--unexpectedly, perhaps, for those who were so opposed to Europe--gaining so much currency among Opposition Members.

6.32 pm

Sir Russell Johnston (Inverness, Nairn and Lochaber) : Perhaps the hon. Member for Bournemouth, West (Mr. Butterfill) will forgive me if I do not directly follow him. I agree with his remarks about environmental co- operation and the avoidance of the development of a protectionist attitude within the European Community. However, as will become evident, I do not go along with some other things that he said.

Sadly, the right hon. Member for Chesterfield (Mr. Benn) has abandoned us after a robust, vigorous and entertaining contribution. When I stand at the bar of history--I am not terribly keen to do so all that quickly--I shall stand with my head high and be proud of what I did in respect of the European Community. I shall not be

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at all apologetic for my position and the critical Liberal vote in 1972. I reject the right hon. Member's argument. However amiably it was presented, he was wrong. The Community is in time and has imagination. It is not about division. In many respects, it is the most stable and encouraging element in world politics.

The hon. Member for Hamilton (Mr. Robertson), who led for the Opposition, said that we are supposed to be debating something that happened a year ago. As has been observed, that is ridiculous, and it is reflected in the turn-out of hon. Members. It is not entirely due to winter breaks in Richmond and Pontypridd. What is the point of talking about something that is a year old?

The page in the White Paper dealing with parliamentary scrutiny is the only page which is about three quarters blank. It has two sentences which state that lots of things were discussed, lots of reports were looked at, and lots of debates took place. In response to an intervention by me, the Minister said that, as a consequence, nothing happened. Therefore, why do right hon. and hon. Members spend so much time in committees? Why did the Secretary of State for Trade and Industry--a chap with a lot of things to do--trot along to give evidence? What effect will his evidence have, on whom, and when? I doubt whether it will have any. The Minister said that we must examine the way in which we are doing things.

However, there is a simple answer. We must give greater powers to the only body that is in a position to do anything, and that is the European Parliament. We should recognise that fact. It is simply not good enough for opponents of the Community to whine on about a lack of accountability when there is a realistic solution. Hon. Members would not expect me to say anything other than that, from a British point of view, this means changing the way in which we elect Members to the European Parliament. It is the last debate before direct elections. I shall take two or three minutes--no more--to say, not for the first time, that this matter is important.

We must examine the matter from a philosophical point of view. I must admit that the Conservatives are increasingly ideological in their approach to life. They were not ideological in the past. They used to be perfect empiricists, but now they are ideologues--much more ideological than the Leader of the Opposition, who is the master pragmatist of the day.

It is contradictory for a Government to advocate the virtues of free competition versus monopolies and the right of each invidual to have the option of share ownership and a stake in what were once state industries and, at the same time, not champion the idea that each individual should have a stake in Parliament. In the 1984 election--the last election--19.5 per cent. of the votes were cast for Liberal and Social Democratic candidates. About 2.5 million people voted for them, and we got no representation of any kind. That is wrong. It had a considerable impact on the balance within the European Parliament, in which all other member states have proportional systems. The European Liberal and Democratic group polled 10 million votes throughout the Community and got 32 seats in the European Parliament. The British Conservatives, who, in a remarkable euphemistic jump, described themselves as democrats, polled 6 million votes and got 50 seats. That is wrong.

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If one is prating about accountability without taking account of that flagrant and peculiarly British injustice, one is approaching matters in a superficial way, and it is small wonder that the turn-out at the election was so low.

The hon. Member for Upminster (Sir N. Bonsor) talked about "the will of the House and the will of the country". In those terms, such concepts are nonsense. In 1979, when I stood for the European Parliament, Angus Maude, as he then was--he is Lord Maude now--speaking about the 13 per cent. Liberal vote, said that it was not fair and that something should be done. The man who is now the Home Secretary said and wrote similar things, but nothing has been done. The time has come for something to be done.

The Minister said that we are debating the period of the German presidency. I welcome the opportunity to pay tribute to Hans-Dietrich Genscher who was the Chairman of the Council of Ministers at the time. A former leader of the Free Democrats--the German Liberal party--his sane and enlightened influence has contributed much to the more effective operation of the Community, as, for that matter, it has in other matters, not least defence. The right hon. Member for Chesterfield referred to that point.

The period that we are referring to, as the Minister rightly said, was dominated by the Brussels agreement. That reasonable settlement tackled many of the problems that had beset the Community. Those of us who appreciate the importance of the Community to the United Kingdom were especially grateful that, on this occasion at least, the Prime Minister was for turning and was prepared to accept a deal that she had rejected in Copenhagen two months previously. Therefore, the European single market was on track.

I should like to commend in particular the increasing support for the European social fund which resulted from the agreement, and which supports job creation and training throughout the Community. I also commend the regional funds and measures to control the cost of the common agricultural policy. The regional fund is to double between 1987 and 1992. There is a risk, confirmed by the Padoa-Schiotta report, that the single market will draw even more money and economic activity into the central golden triangle about which so much has been said. It is necessary to counter-balance this trend. I am very alarmed by the view of the Chancellor of the Exchequer. It has been referred to by the hon. Member for Hamilton, quite properly, and I want to put a direct question to the Minister about it. The Chancellor said in his Chatham house speech that the growth of regional policy within the Community would be positively damaging. That is a very alarming statement. Secondly, and related to that, when will the Government face up to the issue of additionality in respect of the regional fund? Unless one has the money as an addition rather than a substitute, it makes a mockery of the whole business. The Chancellor's appalling view is certainly contrary to what the Secretary of State for Scotland or the Secretary of State for Wales continually tells us, as no doubt do the Ministers who claim that they are working for the betterment of the north and west of England.

In my part of Scotland we have a state development authority called the Highlands and Islands Development Board. It was established in 1965 by the Labour Government following, incidentally, three Liberal wins in the Highlands. We had advocated the idea since 1929. Little plugs like that can do no harm. The board has certainly been effective and works very well with the

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regional fund of the European Community. Is the Chancellor attacking that as well? That is the logic of it. The Chancellor said--and I repeat it--that the growth of regional policy within the Community would be positively damaging. That means that he is against the Highlands and Islands Development Board.

Presumably also he believes that the approach of the Federal Republic of Germany, that of decentralised economic planning, is wrong. I do not believe it to be wrong. I hope that the Minister will clarify this. If the Chancellor's words represent Government policy, they suggest that the Government are moving back from the Brussels agreement.

The same consideration applies to the European social fund. The United Kingdom is the largest beneficiary of the fund within the Community. I think it forms a large part of the funding of employment training and the youth training scheme projects, although I am not sure how much money is involved ; perhaps the Minister will tell us. But it is certainly something that the United Kingdom desperately requires, as the hon. Member for Hamilton says.

The director general of the National Economic Development Council has pointed out :

"60 per cent. of the German work force have attained

apprenticeships or similar qualifications, compared to only 30 per cent. in the United Kingdom."

Additionality applies here as well, whether the money through the social fund is used to make better provision or simply as a substitute within the budget. The Government must not treat help from the European Community as an excuse to save money. Rather, they should take full advantage of it to ensure that our work force is well trained. It is very welcome to the Social and Liberal Democrats that we are making progress towards the single market. One is always ready to welcome converts to this cause. As a Liberal who has been involved in European matters for a long time, I believe that we have sustained and been consistent in our position, but I am worried that many within the Government and certainly within the Conservative party regard the Community as some kind of "EFTA" writ large, rather than a community of peoples working towards a supranational cohesion.

The Prime Minister held up a vision of Europe open for business. I support that fair view, but I cannot support the idea that Europe can have a genuinely common internal market without the necessary economic means. I must say to the hon. Member for Bournemouth, West that that means a European monetary system. I shall not argue with him about the moment of its introduction, which has been discussed for so long. Many people disagree with the hon. Gentleman's stance. I believe that we should also move towards the creation of a central bank. There must also be the necessary environmental and regional policies to complement the market.

Over the past months, those whose view of Europe is contrary to mine have been organising more effectively in this country. A new brand of Right-wing anti-Europeanism has grown up in the Conservative party. It has not articulated itself perhaps so long as the hon. Member for Southend, East (Mr. Taylor). The hon. Gentleman's record in the matter is so blemished as to be unblemished, if I may put it that way. There can be no doubt that the hon. Gentleman is most consistent.

I am referring not just to the Chancellor but to the so-called "Bruges group" which has just been established.

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One has the impression that some members of the Conservative party want to have their cake and eat it too. They are happy enough when European Community action cuts Government intervention across Europe. But as soon as it involves any increase in the role of Government, for whatever good or bad reason--of course there may be bad reasons for Government intervention--they take refuge in this great notion of sovereignty.

Mr. John Redwood (Wokingham) : Will the hon. Gentleman give way?

Sir Russell Johnston : I shall give way in a moment. If we are referring to jargon, as some hon. Members have done, the concept of sovereignty is the acme of casuistic jargon.

Mr. Redwood : I should like to point out that, as I understand it, the "Bruges group" has been established by a Cross-Bench peer in the Upper House and is a group of academics that has not stated its party political disposition.

Sir Russell Johnston : I shall titillate the hon. Gentleman with some quotations from the statement of the Bruges group later on. If that is a Cross Bencher, I am a cross--well, I do not know what ; but that was not my impression.

The Bruges group claims to favour a Europe of sovereign states competing and co-operating. The whole idea of the single internal market is that there should be fair competition between business and individuals within Europe. Once sovereign states try to compete within the market, real competition is stifled.

The Bruges group's prospectus has come into my hand. I understand that it is freely available. The gentleman concerned may be a Cross-Bench Peer, but the basis of the document seems to be in a pretty narrow conservative ideological brace. Let me give three short quotations. The document says :

"The Bruges Group not only denies politicians the right to pronounce on issues relating to national sovereignty, but it also strongly feels that political integration of the European States is a negative step that will severely damage the security at present enjoyed by Europe. It will also heighten existing tensions and differences in Europe."

That is gobbledegook, but never mind.

Secondly, the document says :

"In principle, therefore, increasing the powers of Euro-MPs, even to act strictly within the limited context of an

economically-integrated Europe, would be quite undesirable". Lastly--this might interest the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes)--the document says :

"We have to ensure that social measures do not extend into the domain of worker participation, social security, pensions, etc. because this would represent a massive interference into the workings of the Free Market".

If the free market were left to work by itself, without the state doing anything about pensions, social security and such matters, we know perfectly well that the free market would pay remarkably little attention to them.

Now that the Prime Minister claims to have seen, as it were, the "green light", it is to be hoped that we shall see increased environmental protection at European level. As the hon. Member for Bournemouth, West said, pollution knows no boundaries. But that too means ceding a degree of national sovereignty, which may be for very good reasons.

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To say, as the hon. Member for Wokingham (Mr. Redwood) so blandly said, that the Bruges group was led by this Cross- Bench chap, which presumably implies a moderate, reasonable, fair-minded objective fellow who could not in a way be described as a Conservative, is a lot of poppycock.

Mr. Butterfill : The facts just did not happen to suit the hon. Gentleman's argument. The person concerned did not happen to be a Conservative. The hon. Gentleman was seeking to say that the Bruges group is a Conservative group, when it is not.

Sir Russell Johnston : Let me give the hon. Gentleman another quotation. The document says :

"This vision of Europe runs against the free market economic philosophy of the present Conservative Government that has set such a good example to the rest of the world".

If that is the view of a Cross-Bench peer, he is not all that objective.

This debate has occurred at an historic time. There has already been a reference to the co-operation in foreign affairs which led to concerted action on the appalling conduct of the Iranian Government over the Rushdie book. It must have been a good experience for the Foreign Secretary to find that all the Community countries meeting in Brussels were rallying to support the British position. There was no question of him pressing them to do anything ; he was perhaps taking the softest line of all. There is great scope for the EC to make considerable advances in foreign affairs, and it is something of a criticism of us that the Soviet Foreign Minister is moving positively into the middle east at the moment when the EC, against the background of the Venice declaration, should have done much more. The Prime Minister has condemned the visionaries of European unity. It is always easy to condemn people who dream dreams and hope hopes, but without vision the Community would never have been created. The Prime Minister warns of a centralised federal Europe, showing that she does not really understand the word "federal". It means co-operating on the broad issues of economy and environment within the federation while giving self-recognising communities the institutional right to run their own affairs. [Interruption.] The hon. Member for Newham, South (Mr. Spearing) is making squeaking noises. Does he wish to intervene?

Mr. Nigel Spearing (Newham, South) : I was not going to intervene because I have not been present throughout the hon. Gentleman's speech, but does he agree that the definition of "federal" is essentially that of a legal constitution, not necessarily of a modus operandi, and to mix the two is constitutionally imprecise and misleading?

Sir Russell Johnston : I admit that the hon. Gentleman makes a fair point. It is a constitutional institutional legal arrrangement. Nevertheless, the modus operandi of federations, as we have seen them, is to achieve the balance of powers to which I referred. That is true in the Federal Republic of Germany, Canada, the United States and so on. That is certainly what I would wish to see in the EC. It involves a balanced and democratic approach which

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could provide not only effective co- operation on a wider scale, but new freedoms for old nations such as Scotland and Wales and Bavaria and Catalonia as well.

That is the only sane future for the EC and for us within it. Such a concept of a federal Europe, focusing on the rights and social situation of the citizen, is that for which the European Liberal, Democratic and Reform group, of which we are a part, will work, I hope successfully, in the European elections to come.

6.55 pm

Mr. Teddy Taylor (Southend, East) : The wild enthusiasm of the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) for the Common Market and all it stands for has never been in doubt, but he has been a bit unfair to the Bruges group. I happened to go along to its first conference, not because I was part of a conspiracy, but because I was curious, and I can assure him that far from being some kind of promoted arm of the Conservative party, it is pretty representative of what he will find in the Labour and Conservative parties and throughout the country--a rising tide of concern over what is going on in the Common Market.

Mr. Foulkes : It is important to be clear about what the hon. Gentleman is saying. Is he saying that Labour party Members are actively involved in the Bruges group? I hope that he will clarify that, because that is not the case.

Mr. Taylor : I have not the slightest idea about the parties of the people involved in the Bruges group. All I can say is that there seem to be some genuine academics who are putting forward what seems to be a genuine point of view.

The attendance in the House today tells us what is happening in British politics today. The Labour Benches have almost been deserted, not because Labour Members are lazy or do not want to come, but because they are too embarrassed to talk about the Common Market because they are changing their policy, although there are one or two exceptions, such as the right hon. Member for Chesterfield (Mr. Benn) whose views are clear. The Conservative Benches are more crowded than used to be the case because there is no doubt that there is a rising tide of concern in the Conservative party about what is going on. I want to make three brief points because I realise that other hon. Members wish to speak. First, I appeal to the Government to consider seriously that there might be a case for stating things as they are in the Common Market, not simply living in a dream world and trying to pretend that things are what they are not.

I could give a mountain of examples, but the best one occurred again today when my right hon. Friend the Minister kindly talked about the great reform of the Common Market, initiated by the United Kingdom, which had led to a reduction in the butter mountain. The facts are there for all to see. Hon. Members know exactly what has happened. We simply agreed to a fire clearance sale, more than doubling our sales of butter at a ludicrous price. There was no reform or great mystery ; there was simply a fire clearance sale. It is rather like Harrods saying that it had improved its sale by reducing the price of its fur coats to 28p each. If only the Government would stop trying to

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