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Mr. Bowen Wells (Hertford and Stortford) : May I start with a quotation :

"Our future must lie in willing and active co-operation between independent sovereign Governments, each answering to their national parliaments."

I emphasise the words

"each answering to their national parliaments".

That statement was part of a speech made by my right hon. Friend the Prime Minister at Bruges.

It is the implications of answering to their national Parliaments that I should like to go through with the House tonight. In case, Madam Deputy Speaker, you should think that I am not speaking to the White Paper that is under discussion, may I say that the principal reason is set out in paragraph 1.4 of that document :

"The European Council met again in Hanover on 27-28 June, when it reached agreement on priorities for the next phase of work on the single market-- the opening up of public purchasing, the further liberalisation of banking and other financial services, the achievement of common standards for manufactured products, and the registration of intellectual property, (patents/trade marks) throughout the Community. The Council also decided to establish a committee of central bank governors and others to study and propose practical steps towards the progressive realisation of economic and monetary union."

Included in those things that the central banks are considering are a common currency and a central bank. I have not heard in this Chamber any discussion about any of those essential matters since that statement was made a year ago.

Are not you, Madam Deputy Speaker, like me, humiliated by the fact that those matters have not been discussed in this Chamber? Is it not time we began to discuss them seriously and properly, particularly when we have been advised by those who know--the lawyers--that under article 100A, by majority vote, European competence can be extended, without further treaty

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obligations, without any further treaty signatures, into all areas of our life? We have been told that it can be extended to all areas of decision-making in this country, including education, health, welfare and other such matters.

I think we have to find out how we should be trying to influence those decisions. If my hon. Friend the Member for Southend, East (Mr. Taylor) and the right hon. Member for Chesterfield (Mr. Benn) are right, this Chamber has no further part to play in them. I do not believe that to be true, nor that it should be the case. I believe that we can influence decisions if we bother to understand this decision-making process within Europe. We need, therefore, to locate where the decisions are made. We need to find out how policy is arrived at and attempt to influence it.

Under the procedures in this House, in the European Legislation Committee and in the Standing Committees whose purpose is to consider various parts of European legislation we are failing in our duty to do that. I realise that many hon. Members know the European decision-making process-- particularly those taking part in this debate--but I should like to examine it very quickly. Our former Commissioner, Mr. Stanley Clinton Davis, appeared at the European Legislation Committee the other day. He said that the ignorance of the procedures and of the way in which Europe works that was displayed by a Select Committee of this House, at which he had given evidence, was mind-boggling.

Mr. Foulkes : The hon. Member is talking about this House influencing decisions made by the Community--the Commission and the Council of Ministers. Will he address his mind also to the question of this House influencing decisions that are the prerogative of this Parliament? Does he really believe that decisions are made by this House? Does he not accept that, increasingly, they are made by the Executive, particularly by one person in that Executive? Is it not a fact that this House is becoming a mere rubber-stamp for domestic decisions that are not influenced in any way by the European Community?

Mr. Wells : If the hon. Member truly believed that, he would not have bothered to stand for election as the representative of his constituency. I do not think that any of us believe that what he has said is true. By very hard work and by locating the places of influence in the Executive, Members can make an impact. This House is sovereign and Ministers have to answer to it.

That provides the link to what I wanted to say about the way in which Ministers have to be influenced when they are taking decisions on our behalf or trying to influence the Council of Ministers in Europe--and it is the Council of Ministers that takes the final decisions. At present, Ministers are not made to be accountable to this House before or after making their decisions. Indeed, outside the Council of Ministers we have the European Council, made up of the Heads of Government. We do not even get the dates of meetings in advance. So far as I know, the agenda is not made known to this House. Enormously important decisions are taken.

The decision on the Single European Act was never discussed before the Prime Minister agreed to introduce it in this House. It was then gone through in a poorly attended debate, and we agreed, amongst other things, to

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the famous article 100A, which extends, or could extend, European competence into many areas of our domestic legislation.

Mr. Foulkes : Will the hon. Gentleman be fair and admit that he does not see the agenda of the Cabinet, or Cabinet Committees, on domestic matters? He probably does not even know what Cabinet Committees exist : we are not allowed to know. Even when Ministers come to the Dispatch Box and purport to be accountable to the House, there is still a lot to be desired in terms of real accountability. I am not saying that the hon. Gentleman has not got a very good argument, but does not some of it apply as much to domestic decisions and legislation as to European decisions and legislation?

Mr. Wells : Like the hon. Gentleman, I am a parliamentarian, and Parliament vies constantly with the Executive for power. If the hon. Gentleman is asking me to agree that the Executive has too much power and is not sufficiently accountable to Parliament, I entirely agree, and we may join together as parliamentary companions. But we as a Parliament are sovereign, and it is our fault if we do not make our Executive more accountable to us. That is our job. The Chamber has that power domestically, but we do not have it in Europe, which is what many hon. Members have been complaining about. It is not possible to have such power in an international organisation, but we must seek to influence it none the less.

First, let us consider how we can ensure that proper account is taken of British interests before decisions are made and brought to the Council of Ministers. We must also make certain that our Ministers know what our Parliament thinks and what it wants them to do when they make decisions at the European Council. At present this Parliament receives no documents or intimations about what is to take place until a document is issued by the European Commission, and that happens after a common position has been established--a political agreement between member states.

That document then goes to the Council of Ministers and gives rise to an explanatory memorandum to the Select Committee on European Legislation, chaired so fairly and well by the hon. Member for Newham, South (Mr. Spearing). That is the first time that we see the document, and it is not the time at which we can exert our influence. Although, as the hon. Member for Newham, South pointed out to the hon. Member for Moray (Mrs. Ewing), the documents are issued with excellent explanatory memoranda, they often reach us after the adoption of the instrument concerned, and certainly after policy has been agreed in Europe. Thus anything that we say in debate, at however late an hour, will not influence the actual decision.

Mr. Spearing : The hon. Gentleman has illustrated something of the overall problem. Does he not agree, however, that although on occasion-- alas--we see documents after the decision has been made, fortunately the majority of documents and explanatory memoranda come before our eyes before the establishment of a common position and the Council's decision, when it need not go to the Parliament? I admit that the position is not perfect.

Mr. Wells : I am grateful for that correction. The hon. Gentleman is absolutely right, and I was about to add that

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the vast majority of documents come before our Committee before decisions have been adopted and are debated in the House before the Minister has made his decision.

The hon. Gentleman should recognise, however, that there has been an acceleration in the number of documents, and also in the number that have been adopted without being considered by the House. Let me give him the figures. In the 1987-88 Session, 24 documents of political and legal importance which the Committee recommended for debate in the House were adopted before the House ever saw them, while 100 documents not of political and legal importance were adopted in the same circumstances.

Mr. Cash : Does my hon. Friend agree that that is where one of the greatest problems lies? The documents that it is claimed should be adopted before we have an opportunity to see them are the very documents that are agreed because they are considered important. The position is the reverse of what it should be : in a sense, the more urgent the document, the greater the reason for this Parliament to know something about it.

Mr. Wells : I could not agree more. We must consider a different method, particularly as we approach 1992. According to the most recent assessment, we must agree 279 measures of major importance--not in 1992 ; they must implemented before that. If we do not alter our procedures, the House will consider those measures in the defective way in which, as I have illustrated, we consider such measures now. Several suggestions have been made about what we should do. My hon. Friend the Member for Stafford (Mr. Cash) has written an excellent article in The Times, and no doubt hon. Members have seen another excellent article--also in The Times --by the former Leader of the House, my right hon. Friend the Member for Shropshire, North (Mr. Biffen). I am sure that my right hon. Friend would give credit to the European Legislation Committee's second report of the 1986-87 Session, in which we suggested that the Committee's powers should be extended, but I feel that we should go even further.

We must ask where are the decisions made? How are we to influence the Commission? The Commission is at present discussing questions such as a unitary monetary union, a universal unit of account and a central bank, and Ministers are well aware that they are being discussed, but we have no document on which to consider such matters. Surely it is not beyond the capabilities of a Minister and his civil servants to present such a document to the European Legislation Committee, telling us that, say, a central bank is being considered and listing the arguments and the options being canvassed. It could be presented to another Committee, of course : there are other ways of doing this.

The Committee would immediately recognise the document as a matter of considerable policy importance, and would, perhaps, take evidence on it before issuing its report to the House. The European Legislation Committee is the only Select Committee in our lexicon, apart from the Public Accounts Committee, with the power to recommend debate, and its recommendations are then fulfilled. These important policy matters could therefore be considered on the Floor of the House, and the Minister would then know what Parliament was thinking.

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That would be at an early stage. We could influence policy at another stage. When the documents have been formulated by the Commission they go to the European Parliament, whose Members could then amend them in the light of debates proceeding both inside and outside Parliament--for it is through this House that, traditionally, those outside have been alerted to this type of discussion. Hon. Members know perfectly well that if they want to influence a Civil Service decision--a law--they do not influence its formation and what is in it simply in debate in the House ; they make certain that they ask the Minister what is happening, they ask to see the civil servants and they put in letters and representations. Such representations often result in a change in the law. In exactly the same way, that is how we should be operating in Europe. My first suggestion is that we try to influence and have debates on policy issues. I suggest that if we had debates on such specific issues the House would be full. Many hon. Members would want to discuss whether we should have, for example, a central bank because that raises many policy implications and problems which people would want to discuss and which would result in lively debate.

There are other matters that the House must consider and I refer briefly to them. Policy issues are considered by the European Council. I believe, again, that the Cabinet Office must bring those matters to the attention of the House before my right hon. Friend the Prime Minister and her senior Ministers go to European Councils and that debates should be held. Holding a debate before every European Council meeting would mean holding debates twice a year. Those debates would be much better attended than debates on documents that are a year old, as is the case with our debate now. The present procedure, therefore, of having two debates a year on year-old documents would be superseded by debates on immediate issues on which we would have the power to influence and act. That is my second suggested reform.

Thirdly, we must reform the European Legislation Committee and also think about how we deal properly with lesser documents. At present, we recommend that they are debated in Standing Committee. We know what that means. It means that a group of hon. Members, who may have a lot to do but who, by chance, are not on a Committee at the particular time when the Selection Committee sits, are drawn together and told that they must consider a legislative question at 11 o'clock one morning. They are given about five days' notice of the meeting. They may have no competence, no interest and no knowledge of the document and we know that those debates take the form of a ministerial statement and some replies by the Opposition spokesmen, and then a desultory debate, which the Whip wants to get finished as quickly as possible because he has other things to do. He shuts up Government Members and there are few contributions from Opposition Members. That is the completion of debate in the House of Commons.

Sir Richard Body : I agree with what my hon. Friend says, but would he not agree that our existing departmental Select Committees have the power to do much of that, if not all? They are in a position to go to Brussels to find out what the Commission may have in mind, they have a unique relationship with the Minister

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and, as we know, the power to call for persons and papers, so they could, therefore, exercise the role that my hon. Friend has described.

Mr. Wells : Yes, that is one of the ways in which we might attempt to deal with the flood of European legislation more effectively. There should be no arguments on turf on this matter. There is so much legislation coming through that all the departmental Select Committees could play that role. They could play it now, but they have not chosen to do so. However, it is conceivable that they may agree to take on some of the European legislative load and that they could act sufficiently quickly to take evidence. One would, therefore, have an all-party group that would have some competence and knowledge of the subject matter under discussion and that would be able to advise the House more closely and better than we can at present.

However, at present the Select Committees--and this is one of the defects-- do not have the power of the European Legislation Committee to recommend debate. I am a member of the Select Committee on Foreign Affairs and we have often recommended a debate after our reports, over which we have laboured long and hard, but rarely has the House debated them. So we would have to change either our modus operandi or, alternatively, we might have to alter the Standing Orders of the House. However, that is certainly an alternative.

Another alternative is to have Standing Committees in the true sense, in that we would have Committees of people who had some competence and interest in trade and industry or agriculture and who would agree to sit to debate the documents, possibly joining some members of the European Legislation Committee. The European Legislation Committee can form an infinite number of Sub-Committees under its present constitution. It can call for Members of Parliament to join these Sub-Committees which can travel and take evidence and have all the powers of a Select Committee. They can then recommend, through the main Committee, that the matter be debated and give the arguments for and against.

If we took that course, the European Legislation Committee would have to be greatly expanded. At present, it has only 16 members and, although larger than most of the departmental Committees, that number is insufficient to deal with the vast flood of European legislation in the way that we would expect. If it did, the 16 members would be in permanent session and could do nothing else in the House, which would be wrong to ask of hon. Members. It would, therefore, have to expand considerably.

We must consider urgently the way in which we conduct ourselves on European legislation. We need to take a decision now. To summarise, we need to debate matters at an earlier stage, before the Commission has made its proposals to the European Parliament. We need to see the European Parliament regularly. I am glad that the House has agreed that Members of the European Parliament may have passes and come here, but we must now extend that and see them on a regular, formal basis to concert our action on European legislation. We must ensure that all debates take place in good time on the basis of reports issued as a result of interviewing Ministers and other people when the legislation is being formed--and certainly before it comes to the Council of Ministers--so that no Minister can go to the Council of Ministers

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without knowing what Parliament thinks. We must reform our own European Legislation Committee and, possibly, our other Select Committee, to ensure that they can deal with legislation in the traditional sense and also with the European Council and other more general matters under consideration. I hope that the House will make this decision soon and quickly so that we can, once more, hold up our heads with pride, knowing that we are dealing properly with Europe, that we are influencing it properly and that we are getting the right decisions for Europe as well as for Britain.

Several Hon. Members rose --

Madam Deputy Speaker (Miss Betty Boothroyd) : There is still a number of hon. Members who want to get into the debate. I would like to be able to call them all, so may I ask for brevity of speech in the last few minutes.

8.28 pm

Mr. Nigel Spearing (Newham, South) : I shall endeavour to comply with your request, Madam Deputy Speaker, but these matters are not as simple as some of the matters that we address in our own legislation.

I must say how pleased I am to follow the hon. Member for Hertford and Stortford (Mr. Wells). I agree with much of what he said, but I commend to him the fact that Standing Committees, provided they are properly chosen and that hon. Members have sufficient notice, can sometimes be very effective in debates because they have two and a half hours of debate rather than the one and a half hours after 10 pm that we often have here.

I think that his idea of a debate two days before Council meetings is a good one, but I do not agree about the effectiveness of all the hon. Member's remedies, welcome though they are. I disagree with one particular and important reason which he and other hon. Members, I believe, have not yet grasped. The reason is that, however effective the scrutiny and however long and effective the debates, they are constitutionally only advisory. Ministers can hear the debate, but can then go to the Council of Ministers and do what they please at their own peril--to use the ancient phrase. That is not good enough. It creates a democratic deficit, which I shall discuss in a few moments.

I want to refer briefly to paragraph 3.5 of the White Paper, Cm 467, which is the topic of our debate. It deals with the elimination levy for sugar, introduced in the last six-month period. Since then, events have moved on and we heard last week that there is a proposal for a 5 per cent. cut in sugar prices this year.

This matter is important, for two reasons. First, such a cut may not be very helpful to our own producers. Secondly, and more important, it runs counter to the resolution passed by this House on 11 November 1974, when we refused an EEC regulation on sugar because it did not take into account sufficiently--if it took them into account at all--the needs of our Caribbean and Commonwealth partners, now called the ACP, or the interests of cane refining in Britain, then based in London, Liverpool and Greenock. I do not believe that the present proposals take those matters into account either. Instead, they reduce the sums available to our ACP partners by up to £23 million a year. That may not seem much to some hon. Members, but in Third world terms it is a very substantial amount.

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The Mauritius representative, Mr. Paul Eynaud, said yesterday : "The purpose of the sugar protocol is to provide a permanent and reliable trade instrument between 12 industrialised countries and 15 developing countries. The introduction by the Commission of a policy of price reductions would defeat the purpose. Moreover the Commission have themselves recognised by their acknowledgement that compensation would be necessary, that the price reductions under consideration would cause undue hardship to the ACP."

It is not merely a question of compensation. How can mere handouts of money compensate people for loss of occupation or the loss of the industrial independence that the export of their raw materials affords them?

The evidence that the Minister of Agriculture, Fisheries and Food gave the Select Committee this afternoon suggests that he has taken that on board, but it is to the discredit of the Commission that it has produced a proposal without sufficient field work in the Third world. It is reneging on the moral responsibility of the Common Market, which it has espoused through the convention of Lome and its sugar protocol. It was a bad day when the present proposal was made, and I hope that it will be stopped.

I turn hastily to the whole question of scrutiny and the democratic deficit. The House seems to forget that scrutiny is not enough. Scrutiny is important, and the shortening time scale that we have makes it much more difficult than it was, as the hon. Member for Hertford and Stortford explained. But there is a great deal more to it than that.

I have one suggestion that might improve the scrutiny process. The excellent--and sometimes not so excellent--explanatory memorandum produced and signed by Ministers and available in the Vote Office in typescript form could be published weekly and printed. Why should they not? They are proposals for legislation. They are, in effect, super-White Papers that express the intention of the Commission and the Government's reaction to what will, in many cases, become legislation. If they were issued weekly and printed, not only Parliament but the nation would be the gainers.

We have changed gear since the passing of the Single European Act, which amends the treaty of Rome. In particular, as the hon. Member for Hertford and Stortford pointed out, that Act creates a much wider area of competence. The consequence of the combination of new article 8A and new article 100A, which provides for majority voting, is as yet undefined. Not long ago I tabled a question asking which areas of legislation were not open to the competence of the Community under article 100A. As I recall, the answer given by the Attorney-General was "family and criminal law". There may be others, but I shall not consider this theme further because the Select Committee is at the moment examining the very question of the treaty base.

When hon. Members--including some Conservative Members, who are now calling for greater scrutiny--voted for the Single European Act in 1986, they did not know what the implications were. I am sorry that the Minister of State is not with us ; she has been here for much of the time and no doubt she will return. It was her signature that appeared on the Single European Act. It was unfair of the Government to ask her to sign the document when she was not even a Privy Councillor, so that if something went wrong they could blame her. Either the Foreign Office did

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not know what it was signing or it did not say. It must be one way or the other. I have said that before, and have not been contradicted on it.

Mr. Wells : The hon. Gentleman also contributed to the third report on the Single European Act of the Select Committee on Foreign Affairs. That report made available to the House the sort of information to which he refers, but I do not think that articles 8A and 100A were dealt with.

Mr. Spearing : The hon. Gentleman will recall that that report emerged only after the Second Reading of the Bill, and a week or even less before the commencement of the Committee stage. The Select Committee's conclusions hinted that there was a purpose behind the Act which it could not fathom--a thought that some people dared not express. I leave that thought with the hon. Gentleman.

Bearing in mind what you said, Madame Deputy Speaker, I shall hasten on. The Act has created what might be called the "Bruges phenomenon". There has been much talk of the Bruges group and what the Prime Minister said in a famous speech in that ancient and lovely city.

I am rather surprised that the Prime Minister, as a lawyer, should have got her constitutional wires twisted. Understandably, she is against federalism ; so are a lot of hon. Members on both sides of the House. She is also against the bureaucracy of the Commission. There is one important point that she has failed to apprehend, and which the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) did not recognise in his speech--that the European Economic Comunity is a new political and constitutional animal. It is unique. It takes power in a federal manner, as we vote power away, but it exercises power in a unitary manner.

I know of nothing in the treaty of Rome that gives power to the House. It refers only in code to the respective constitutional processes. That is all there is, so we are not talking about a federation. The Prime Minister is wrong to think that there is a threat of a united states of Europe. There is no provision in the treaty of Rome for progress towards that, but there is plenty of provision for the creation of what is, in effect, a unitary state of Europe. Economic and monetary union is referred to in the preface to the treaty. The idea of a two-way constitution is so novel that some people have not grasped the reality, although it is there for all to see.

There has been much talk today about the Commission. Only yesterday, the Select Committee received evidence from former Commissioner Clinton Davis, who said, "We go around listening to what people have to say. We listen to the Governments of member states, to pan-European consumer and industrial interests and to people in the 12 member states. Then we write the proposal." Every proposal for legislation must come by, with or from the Commission ; I cannot remember whether it is couched in the dative or the ablative. Legislation must come through that gateway and through that gateway alone. We in this House and the Prime Minister herself are but petitioners in respect of the powers of the Commission.

In historic constitutional terms, we are in the same position as those who send us here with petitions to place in the bag behind the Chair. That is what the constitution and the law are. We start with a request. We in Britain, even the Government, make requests to the Commission and the Commission disposes of them by producing the documents of the kind to which the hon. Member for

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Hertford and Stortford referred. It has wide discretion collectively if all Ministers get together in a collegiate college. It is that and only that that the Council of Ministers can consider. Strictly speaking, the Council of Ministers cannot amend what it produces. It can send a document back and then produce another one, perhaps instantaneously or perhaps after three months. Any Minister in the Council of Ministers can do less than any hon. Member can in respect of our legislation. Ask George Cunningham--one man, one amendment : "delete 30, insert 40". No one can do that in respect of anything placed before the Council of Ministers.

Mr. Foulkes : A majority can.

Mr. Spearing : My hon. Friend says that a majority can, but there is no opportunity for that in this House.

I shall now describe what I understand the Minister must do. First, the Council of Ministers is a revolving body. The Minister has other responsibilities. I recall the great television commercial which some hon. Members will have seen. The Minister is coming over on the morning flight from London. He has had an Adjournment debate the night before. He has been in front of the Prime Minister that afternoon. The chairman of his constituency party has been on the phone. He has had a deputation of doctors and nurses. His sister-in-law tells me that his wife says that he is not spending enough time with his children and family. Then he gets there. He is briefed by COREPER on a whole series of negotiations which have probably been going on for weeks or months beforehand. Great detail is entered into. He has to go into a great big room, with a group of people behind him suggesting what he might do. Perhaps he will stay there over cups of coffee through the night. He comes away the next day to pick up his red case in Whitehall.

I have never been a Minister, but I have been in the Charlemagne building and spoken to people who have been. I ask my right hon. Friend the Member for Chesterfield (Mr. Benn) to tell the House whether what I have said is an exaggeration or something near the truth.

Mr. Benn : My hon. Friend has it about right. The brief for Ministers going to Europe is a brief imposed by Departments here, but when one gets to Europe one finds that it has all been stitched up by package deals which have nothing to do with the subject one is discussing. The COREPER will have negotiated a deal with the Commission. I was President of the Council of Ministers for six months and it was the only committee upon which I sat where I was constitutionally unable even to submit a document, because the role of Ministers is like that of a collective sovereign body which, like the Crown, can say, "La Reyne le veult" or, "La Reyne s'avisera". One can say yes or no to what the Commission proposes, but one cannot change its proposals, or submit a paper. Negotiations are conducted on a multiple packaging basis which have practically nothing to do with the House of Commons, and the House has no role to play.

Mr. Spearing : I am grateful to my right hon. Friend for confirming my suspicions. It is not just the House of Commons, but, from what my right hon. Friend has said,

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the Minister does not appear to be able to do very much, especially when, as we all know, it is package bargaining across the political scene or, perhaps, across part of it.

Mr. Foulkes : There is in the Cabinet.

Mr. Spearing : Yes, there is in the Cabinet, but the Cabinet can come to this House and what it proposes can be voted out--for example, Sunday trading. Nothing need be produced by the Government which they think does not stand a chance of getting through. Very rarely does it not get through, because no sensible Cabinet would bring to the House something that it did not think would get through.

Sir Russell Johnston : Sunday trading is a terribly bad example of normally non-governmental business. If the hon. Gentleman is complaining that the Commission has these powers, yet, as he agreed, it consults everyone in sight, why does he find it offensive that within the domestic situation we have a highly centralised Government who by and large do not consult?

Mr. Spearing : I am confining my remarks to the powers of the House because the powers of the House cannot even control the Minister, when he goes--my right hon. Friend was, untypically, wrong when he mentioned Europe --to the European Economic Community. If it wishes, the House has some control over the Executive in Whitehall. At the moment it has no control even over the Minister who goes there as a representative. There is not a connection on the Floor of this House and, therefore, the Minister is footloose in Brussels. The House cannot control him unless it chooses, as it could do, to take power over certain decisions. I am not saying all decisions nor am I advocating a Danish system, but it has certain power over what the Minister does in Brussels on any specific proposal for legislation. So far, the House has not chosen to take those powers. I believe that it could take them within the treaty of Rome as at present constituted.

There is a lot of talk about the democratic deficit. I believe that nowhere is that democratic deficit more apparent than across the Chamber of this House. Indeed, that deficit can be said to be 301 years old this month. The House must address itself to the means by which, even within the terms of the present treaty of Rome--or as it can be changed--that deficit can be reduced or perhaps eliminated altogether. It is on the degree to which the Government now press towards that mark that the public will judge them and this House. 8.47 pm

Sir Anthony Meyer (Clwyd, North-West) : Much of the debate has revolved around the Prime Minister's Bruges speech although, strictly speaking, it did not fall within the period that we are considering. That speech is sometimes presented as the great anti-European cry, but of course it was nothing of the kind, as this passage shows : "Britain does not dream of some cosy isolated existence on the fringe of the European Community. Our destiny is in Europe, as part of the Community."

None the less, there is no mistaking the tone of assertive nationalism in the speech--the determination to arrest and, indeed, to reverse the process of increasing the power and authority of the central institutions of the Community.

There is some confusion of thought, at any rate in the commentaries surrounding that speech. It is not

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necessarily true that a centralised Europe would be a Socialist Europe. The original Community of six, which had very strong centralised institutions--that was in the days before the Luxembourg compromise--was firmly free market in its philosophy. That was one of the reasons why the Labour party was so hesitant about it. It is possible to be a supporter of strong central institutions and of a leading role for the Commission but at the same time to argue strongly against the encroachment of Socialist ideas.

There is no doubt that in asserting the right of the British to stay British the Prime Minister touched a deep chord in every heart. The point which should concern us is whether the true Britishness of the British people can best be preserved by a doctrinaire refusal to yield one inch to the central institutions of the Community. Sovereignty is a priceless possession but

"national sovereignty is not inviolable, and it may be resolutely diminished for the sake of all the men in all the lands finding their way home together."--[ Official Report, 27 June 1950 ; Vol. 476, c. 2159.]

As the House will have guessed, those are not my words, but the words of Winston Churchill speaking in this House--very aptly for our present debates--on the subject of Britain's failure, under a Labour Government, to join the European Coal and Steel Community. For the European Coal and Steel Community, hon. Members should read in 1989 the European monetary system-- or rather the exchange rate mechanism. The issue then was exactly the same issue as today. Because we refused to accept any limitations on our sovereignty, we were unable to join the Coal and Steel Community. That Community came into existence without us and despite us. That led inexorably onwards to the creation of the European Economic Community, which we likewise refused to join--this time under a Conservative Government, but not Churchill's. The end result in the 1970s was that we eventually joined all the Communities, but on terms which infringed our national sovereignty more extensively than if we had joined back in 1950 and had been able to shape the rules. What is more, the reason why we decided to join in the end was that the power and influence being exerted by the European Community was increasingly affecting our freedom of action and limiting our real if not our theoretical sovereignty.

We run exactly the same risk today--of finding ourselves excluded from the increasingly close and effective co-operation upon which most of the other EEC members are now embarked. We can stand on our veto and block many European Community projects that are unwelcome to us--such as worker participation on boards of directors--but any other country can block measures or changes that we badly need, at any rate in areas where the veto still applies.

The situation is not exactly as I have described. In signing the Single European Act we have drastically limited our sovereignty. For all practical purposes we are already in a quasi-federal--I apologise for that word-- situation. That being so, is it wise to talk so stridently about resisting encroachments on our national sovereignty? Would it not be more effective and more in accordance with our national talent to seek to use the instruments at hand as effectively as possible to achieve our ends? And what, indeed, are those ends?

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That brings me to the passage in the Bruges speech which I most warmly welcome. My right hon. Friend the Prime Minister said : "I want to see us work more closely on the things we can do better together than alone."

I cannot think of a better definition of the proper aims of the European Community. By that definition, some of the Community's present activity is misdirected and, by definition, much of the strategy and most of the tactics of the British Government in their European policies are likewise misdirected.

To refer to the Community's shortcomings, the most obvious one is the ludicrous overemphasis on the common agricultural policy. Endless regulations and directives pour out of Brussels and offer an easy target for jibes about bureaucracy run riot, but none of those jibes is well directed--unless it be about the failure of the House to devise effective methods of scrutinising such directives. Almost all of them are designed to produce the level playing field that the Government are always going on about.

The main area in which the Community's efforts are misdirected is that in which its activities are almost universally applauded--the regional development fund, which has been seen by the Prime Minister as the most effective way of getting our money back. It is true that we get money back under it, and I should make it plain that I am a strong supporter of regional policy. If it is right for the British Government to use taxpayers' money to promote development in outlying or less prosperous parts of the country, it is equally right for the Community to use Community resources to assist development in such areas.

I rejoice in the fact that, under the leadership of my right hon. Friend the Secretary of State, Wales has been notably successful in attracting EC support for development. I also rejoice in the fact that Miss Brookes, the energetic north Wales Member of the European Parliament, has had striking success in attracting European funds to ther own Euro-constituency. She can and does fairly argue that no other Member of the European Parliament, and certainly no other Member from any other party, could possibly hope for equal success in attracting European Community support. But what is good for north Wales, as undoubtedly it is, may not be the best thing for the country or the Community as a whole. Is it right that it should be left to the EC in Brussels to decide which of two local bypasses, factories or rural development schemes should have EEC backing? Is there not scope for the use of Community funds for the promotion of one party rather than another, or one candidate rather than another? How does such a use of Community funds square with the Prime Minster's admirable dictum that Europe should work more closely on things that we can do better together than alone?

In what ways do we do things better together than alone? There are two. The first is when the countries of the EEC act together as one in their relations with the outside world. No case is more conspicuous than their response to the ayatollah's threats. It may have looked easy to get agreement, but the different reaction of the New Zealand Government shows how easily commercial considerations can work against unity of purpose. The other important matter is scientific or research projects or industrial enterprises that are too large to be commercially viable on a purely national scale. This is a huge subject and it justifies an entire debate.

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The Government have put all their efforts into advancing towards the single open market, but even on that, their chosen ground, their record is mixed. They seem to think that they can get everything that they want in free movement of capital, removal of restrictions, and so on, without making any concessions on matters such as open frontiers or some approximation of indirect taxes. They cannot expect to be believed when they say that widely different rates of VAT constitute no distortion of trade, that there is no advantage to free movement of goods in the removal of frontier controls or Customs examinations at frontiers, or that there is never a right moment to join the exchange rate mechanism.

In scientific research, in which co-operation on a larger than national scale is indispensable, to say the least, the Government's record is mixed to say the least. With bad grace, we have decided to stay in the CERN project, but our record in the European Space Agency is so abysmal that we are losing more and more key posts that we originally had in the agency. I know that it is not an EEC operation, but it is a European operation and the EEC plays a dominating role. We are getting a reputation throughout Europe of being uninterested in European scientific co-operation.

What worries me even more is the consequence of the Government's refusal to admit that they have such a thing as an industrial strategy. The entirely predictable consequence, particularly when combined with a rigidly non- interventionist approach, goes hand in hand with a financial climate which positively encourages massive takeovers motivated by accountancy considerations rather than industrial logic. More and more of British and European industry passes out of Europe's control. In the end, we land up with multinational corporations which go some way to fulfilling the Prime Minister's condition--that we should do together the things that we can do best together. We Europeans are no longer doing the things that we can do best together--others are doing it. God forbid that we Europeans should build high walls around our industry, services or technology. There is a case for a European car industry, aircraft industry and electronics industry, but there appears to be no one--except possibly my right hon. Friend the Member for Henley (Mr. Heseltine)--to make that case.

8.56 pm

Mr. William Cash (Stafford) : It is not possible to deal with this subject in a few minutes, when so many other hon. Members wish to speak, so I shall come straight to the point. We are already moving hard and fast towards a federal system. We have moved so far down that line by our debate about scrutiny and the activities of the European Scrutiny Committee that it is only by using the procedures that are available to us that we will be able to contain the thrust towards a federal system. The other day, an article in The Times , quoting an MEP, stated that there is no such thing as British sovereignty any more, only a myth that Mrs. Thatcher puts out when she wants to make a dramatic speech. That is the type of thing that we have to put up with. I shall soon be glad to have the opportunity to reply in the columns of The Times.

At the heart of the federal matter, there are questions relating not only to our economy and self-regulation but to

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matters that are intimately connected with those questions foreign policy and defence. For example, I must raise the question of the reunification of Germany because that sort of question is at the heart of any study of the relations of the European Community with the USSR. In other words, at the same time as centrifugal activities are appearing within the USSR, with greater independence in Lithuania, Estonia and Latvia, in the United States there are increasing doubts about the extent to which they are tied in by legal order, with a ring fence around them, which prevents them from exercising certain options as they wish. We are now moving into a similar position. I argue that we must resist the federalism for the simple reason that it will close our options and contain us within more legal order when the other great power blocs in the world are moving in exactly the opposite way.

We must also remember that there are some disturbing signs in West Germany. I hope and believe that we shall continue on the best possible terms with them. But there is, for example, the sudden re-emergence of a tendency that is expressed in the significant number of seats recently won by the republicans in Berlin. Admiral Schaling was recently dismissed from his important position in charge of a military think tank because he called for the withdrawal of western troops from German soil. I do not have time now to go into all these questions in detail, but we must pay attention to them. At the same time we must realise that the Japanese power bloc is moving towards another centre of gravity with the United States. The other day Prime Minister Takeshita said that Japan must assume a major share of responsibility for managing the world economy. We know the extent to which they are invading the American economy. There are now fears of a fortress Europe. Centrism is creating, as well as reacting to, concern throughout the world. The fact that we tend to concentrate this power rather than retain it on a mutual basis within sovereign States creates and even exacerbates these problems. It is certainly possible to argue that all we are doing is reacting to what is going on in the rest of the world, especially when we are dealing with a contracting global village. But if we over-react to it by setting up a fortress Europe, diminishing free trade and opting for protectionism in military or economic spheres, it is a snare and an illusion to imagine that we shall do other than make the position worse.

Therefore, although I should like to have discussed many other matters relating to the economy, I simply make the point that we must beware of a federal Europe. It takes power from the House of Commons. That effect has been examined by other hon. Members this evening. It also implies danger for our foreign policy and the defence of the nation.

9.2 pm

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