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The fact that we are debating now, at great length, making a reality of the single market, is a criticism of how the Community has developed. The essence of the creation of the Community was that it should be a single market--that is why it was called the Common Market. Wider political, social and strategic functions were in the minds of the founders of the Community, with the Common Market as its base.
The immediate advantage derived from a large market comparable to that of the United States sold the idea of the Community to many people in Britain. That we should
Column 301have to set a target date to achieve some of the goals espoused at the Community's creation is a source of disappointment. Lord Cockfield, who is now in such bad odour with No. 10, played a large part in erecting 1992 as the target for achieving what should have been done years ago and thus to clear the way to free trade. We often do not understand that the creation of common standards is necessary to bring down trade barriers. In that way, we will get away from the problem of another European country denying access to goods, on the grounds that they do not meet the required standard. It is even more important to establish common standards now that concern about the environmental effects of products is so much greater. That concern has led to more and more necessary pressure for tighter standards. If those standards are not common throughout Europe, they will act as a restraint on trade. We might end up imposing conditions on our manufacturers which, desirable in themselves, may not have to be met by other European manufacturers. As a consequence, our manufacturers will suffer. It is of urgent importance that such common standards are achieved. In the course of achieving that goal, however, the Government have not killed the bogey of unnecessary harmonisation.
Mr. Quentin Davies (Stamford and Spalding) : Given that this country sometimes has higher standards governing health, safety or consumer protection, it is particularly in our interests that such standards should be harmonised, since otherwise our producers will be undercut in any free trade area--of which my hon. Friend the Member for Southend, East (Mr. Taylor) is in favour--by competition from the continent. That applies to manufacturing, where health, safety or environmental standards may be higher in this country, and also applies very much to financial services, a matter of legitimate concern to all parts of this House because it is a major British industry and one where we have very high standards of consumer protection, so it is particularly important that we are not undercut from the Continent by the lack of harmonisation.
Mr. Beith : I agree entirely with that view. It cuts both ways. Our standards are not always higher, whether one looks at some aspects of financial services or pollution standards in cars. We have not always been in the lead, but in some fields we are and have been, and we have a particular interest in ensuring that our standards are also required elsewhere.
I was about to say that the Government have not entirely killed off the bogey of unnecessary and pettifogging harmonisation in areas where it is not essential. A number of us were last week exchanging arguments with the Minister about goods which are not traded across the Community, buying 3 lb. of carrots or 5 lb of potatoes. When the Minister was saying earlier that this Government were pleased that harmonisation would not involve the imposition of legal restraints on matters
Column 302not relevant to trade across the Community, I think he rather overlooked our exchanges last week and the likelihood that shopkeepers will be prosecuted for simply giving customers what they want when they weigh out goods on the spot ; petty and trifling things like that give the European Community a bad name and give the objective of a single market in which different standards do not intervene a particularly bad name.
I feel the same about much of the VAT harmonisation. I was a member of the Treasury Select Committee when it produced its report critical of the VAT harmonisation proposals because, again, they are not directly relevant to the trading of goods between countries. Goods bear VAT in one country at the level at which it is applied in that country, and it is not a distortion of the price of the imported product that it is charged VAT at the same rate as the domestically produced product. That is another area where there can be an unnecessary degree of harmonisation.
Mr. Janman : The hon. Gentleman talks about what is relevant to the market. Does he not agree that, when we are talking about a market within one member state or a market across western Europe, market forces will determine which goods and services, and therefore that the standards on which those goods and services are based, will win in the marketplace? One does not need Eurocrats and politicians to make decisions on what those standards should be. If the hon. Member believes in a genuine free market across Europe, yes, let us have the free movement of goods and services across national boundaries, but it should be up to the customer within that European market to decide which set of standards will prevail.
Mr. Beith : The answer to the hon. Gentleman's question is no, it is not possible to assume that the market will sort out standards when national Governments will impose differing standards across the Community. It is not sufficient to assume that the market can be left wide open to the exploitation of the consumers by the failure of producers to apply standards, particularly in matters not immediately apparent to the consumer, on quality, safety or matters which may not harm the consumer but may harm others when he uses the product, such as the emission standards in vehicles. So there are all sorts of reasons why Government action in these areas is necessary, and compelling reasons why that action should not be taken solely by national Governments, because if it is, it will produce different standards and restraint of trade.
There are other anxieties about 1992 and the single market, some of which we ought to be able to dispel. I was quite struck by an article which appeared in The Independent on Monday by Catherine Itzin and Corinne Sweet about pornography. They make the point quite clearly : "EC deregulation in 1992 will open the UK market to European pornography."
I should be grateful if the Minister will comment on this in his reply. It does not seem to me that the existence of a single market will in any way remove the controls which we have in this country and in other countries on pornography and its distribution, and if it leaves any gap, we should do something about it.
Column 303controlled without some scrutiny at borders? He referred to pornography, but the same argument can be applied to drugs. If we remove border controls, we remove scrutiny. We must consider illegal weapons and terrorists, but the Minister did not mention those matters, which are of great concern.
Mr. Beith : It is not true that there is no control over pornography, drugs or terrorism in the absence of border controls. A large proportion of the successful action taken against drugs is taken not by border controls, but occurs as a result of intervention within the country into which the drugs are brought. That occurs from tip-offs and detection work, not as a direct result of border controls. I am not aware of the balance in the case of pornography, but border control plays only a limited role in the detection of the passage of drugs.
Border controls do not stop criminals ; they stop policemen and law enforcers. Who stops at the border? Not the person carrying the drugs. The police force stops at the border and must enter another jurisdiction and involve Interpol before it can take effective action across the borders. Criminals do not know these bounds. Where criminality is fuelled by vast sums of money, for example with drugs and pornography, borders are now of virtually no conseqence and are of little importance.
The hon. Member for Bradford, South (Mr. Cryer) is correct to say that we should have more discussion about border controls and their relevance, not least with regard to entry to the Community as a whole. Much of what enters this country is making its first landfall in the Community. We could have a complicated debate about that.
The Government's motion refers to the Government's "strong commitment" to preparing for 1992. Where is that strong commitment with regard to the essential investment which will be required in 1992 if Britain is to compete in the single European market? Where is the commitment to investment in links from the north of England, Scotland and north Wales to the Channel tunnel? Ministers have appeared at meetings and said that that is a matter for British Rail.
There are major strategic decisions to be taken in areas where Governments most legitimately and necessarily are concerned. The French Government have no such inhibitions about involvement in ensuring that investment takes place in transport links to the Channel tunnel. Such investment is very important for industry in the north-east of England if it is to participate in the single European market. We clearly need a sign of the Government's commitment to the single European market in that area.
Where is the Government's commitment to the European monetary system and to the other monetary developments referred to in the report produced by the central bankers yesterday? The EMS is the most obvious first step. The Minister referred to the financial aspects of 1992, but he fails to recognise that industrialists want a stable and satisfactory exchange rate from 1992. Indeed, they want it sooner than that. They do not want to be at the mercy of a rapidly changing currency level or one that is prone to unrealistic valuation.
Column 304It is clear that the Chancellor of the Exchequer privately shares most of the views expressed by industry. Perhaps the Minister does as well ; I do not know. He is not allowed to take that view, because the Prime Minister says that he cannot. The Government are divided on a fundamental issue of economic policy which has implications for this subject and for many others.
An historic statement was made tonight. The hon. Member for Newcastle upon Tyne, North (Mr. Henderson) announced from the Labour Front Bench that it was Labour party policy that Britain should join the European monetary system when the time is right. I feel that I must be right, because once again I find myself in disagreement with both the Conservative and the Labour parties, which are in agreement with each other. I think that that is a new development.
Mr. Beith : Of course I accept the hon. Gentleman's clarification. Whereas the Government will join the European monetary system, when the time is right--and we all know that the time will not be right so long as the Prime Minister is in office--the Labour party will consider whether to join the European monetary system when the time is right. Whether the words "when the time is right" refer to the time to join or to the time to consider joining is a matter for further clarification, for which I will not press tonight. These are all weasel words, designed to escape a fundamental disagreement that now appears to exist between those two parties as to whether we should join the exchange rate mechanism of the European monetary system. I submit that that should be in that mechanism. I know that that is the view of the Chancellor, and he is in a ludicrous position to be presiding as Chancellor when he cannot implement it.
Rev. Ian Paisley (Antrim, North) : What is the future of Europe in the eyes of the Government and the Opposition? The Liberal spokesman, too-- the hon. Member for Berwick-upon-Tweed (Mr. Beith)--failed to tell us his idea of the future. The explanatory document contains what I call high- falutin language about
"the key that will unlock the door."
Where will this door take us? Anybody who has been in the European Parliament knows that the door will take us to a federal Europe, a united states of Europe, a Europe in which national Parliaments have very little, if any, say.
The explanatory document says :
"we can stride confidently ahead into the new Europe which awaits us."
What is that new Europe?
Rev. Ian Paisley : The hon. Gentleman does not know very much about the trends in Europe. He does not know about the President of the Commission. He does not know very much about the votes in the European Parliament. I advise him to take a look at some of those votes.
Let us have a look at the rest of this document. It says : "we are all the guardians of the future of Europe. The people of Europe expect us to deliver. We must do no less."
Column 305What do they expect us to deliver? What are the Government telling the people of the United Kingdom they must deliver? The people of this country have a right to know. We have been told that we can make changes. The fact is that, when Europe makes up its mind, we can make no changes. When Europe has made a decision, this Parliament and all the other national Parliaments have to bow to it. That is the sad thing.
This document refers to a "truly European broadcasting area". It says :
"Such an area also involves freedom to broadcast, receive and transmit radio and television programmes".
Who will control that? It will not be controlled by Acts of this Parliament. That is the vision of the great Europe that is ahead. When we come to the abolition of controls on persons at internal frontiers, we have a very serious situation. If the Commission approves a directive that a person is entitled to carry a firearm, and if someone gets a firearm, say, in Sicily, nobody at a country's frontier can prevent that person from entering or take the gun away. The hon. Member for Newcastle-upon-Tyne, North (Mr. Henderson) talked about the sort of scrutiny we are having tonight. We in Northern Ireland have suffered from that in our own legislation. Orders in Council cannot be amended, and it is not possible to debate them properly. Now, in respect of Europe, we are into the same category of debate.
People should look very seriously at this matter. It is all very well to talk about a great, grand, new Europe and about doors opening. I should like to know what sort of Europe the Government envisage. What I have learnt from the European Parliament, from the European Commission's President, to whom I have talked, and from all the attitudes of Europe, is that they want a united states of Europe, in which they will govern, and we will be like a parish council with no real authority to govern our own country.
Mr. Nigel Spearing (Newham, South) : I shall follow the hon. Member for Antrim, North (Rev. Ian Paisley) in some personal remarks in a few moments, but first, in my semi-official capacity, I want to refer to the scrutiny procedure.
The Minister said how seriously the Government treat scrutiny. I shall believe that when the time given for debates of this importance is more than that allocated to domestic statutory instruments by a Conservative Government in 1951, who kept the House up all night when such statutory instruments were open-ended. That is a measure of the procedural slippage on our domestic legislation. That our debates on these important matters are still limited to an hour and a half after 10 o'clock shows the concern that Her Majesty's Government have for such matters. It so happens that not many hon. Members are here tonight. That is not commensurate with the importance of the topic. If they were, three hours would be a better time.
I am rather disappointed with the report. It is the halfway stage in the creation of a single market, and document 9756/89 is supposed to tell us what has been happening. Instead of listing 279 documents in an appendix, as I thought it would, it looks ahead at what is
Column 306still to happen. We do not know how far things have got. There is no index tick sheet or list of where the documents have gone. We know that some have been adopted, some have been proposed and some are in the process of being discussed. There is no appendix to tell us how far that process has gone.
I now switch to a personal hat. I am afraid that Conservative Members are living in an area of unreality, despite the efforts of the noble Lord Young. We keep on referring to 1992. It is not then at all ; it is now. It is by the end of 1992. The French refer to 1993, but it is happening now. If business men or Conservative Members want to know what is going on they had better have a look at the weekly reports of the Scrutiny Committee. I do not know how many Conservative Members read them or send them to their chambers of commerce weekly or whether those chambers of commerce buy them. We made 44 reports last year and there will probably be the same number this year. Anything up to 20 complex and detailed proposals and documents are reported on each week. That is what is going on. Let me deal now with one or two definitions. The EEC is not just a free trade area. As we know, it is something far more. I shall telescope my remarks and my logic because this fills in what the hon. Member for Antrim, North was saying. With the abolition of frontiers, which is what the 1992 package is all about, the frontier is not definable. Until now we have thought of lorries and guns and most of the points that my hon. Friend the Member for Bradford, South (Mr. Cryer) made. But surely by definition a frontier marks a difference of jurisdiction--Britain, France, whatever it may be. We may not appreciate that, because if we go from here to Portugal we go to another jurisdiction via the sea. If the law is different from one side of the border to the other, the border exists. Ergo, the dissolution of frontiers means the dissolution of differences of jurisdiction and law. But over what area does that apply? Recently I asked the Attorney-General to what areas of law the abolition of frontiers did not apply. I think that he said family and criminal law. There is hardly an aspect of life in Britain, whether commecial, industrial, specifications, standards of safety and all sorts of things, which cannot be within the scope of the single European market without frontier. Ergo, it means that our jurisdiction over these matters is ended--the point made by the hon. Member for Antrim, North--and we are subject by and large to a superior jurisdiction, that of the combined institutions of the Commission, the Council and the European Parliament. If any Conservative Member wishes to contest that, he is free to do so, but surely one follows from the other. That is what the Single European Act was about. That is why the Government, who want to listen to what we have to say now, did not want to listen in 1986 when the Act was railroaded through on a guillotine.
These debates, important though they are, are only advisory. The Minister can go and do what he does at Brussels at his peril. It is difficult to find out exactly what he does. It is no wonder that not many hon. Members come to these debates even though they are shorter than they should be.
The Government are committed not just to that other jurisdiction but to economic and monetary union. As long ago as 19 June 1983, the Prime Minister signed the solemn declaration on European union at Stuttgart, which reads :
Column 307"determined to achieve a comprehensive and coherent common political approach and reaffirming their will to transform the whole complex of relations between their States into a European Union." It may not be the united states of Europe, to which the hon. Member for Antrim, North has just referred, and to which the Prime Minister referred at Bruges. It is something unitary. It is not the united states of Europe because the states do not exist. It is one nation, a European union. Laws are made in a unitary manner. Of that there can be no doubt.
It is not therefore surprising that the latest emanation is the expression of the single market that we had in the Delors banking report yesterday :
"as capital movements are liberalised and as the internal market programme is implemented, each country will be less and less shielded from developments elsewhere in the Community. The attainment of national economic objectives will become more dependent on a co-operative approach to policy-making."
Hon. Members may translate that as they will. Later, it said : "Although in many respects a natural consequence of the commitment to create a market without internal frontiers, the move towards economic and monetary union represents a quantum jump which could secure a significant increase in economic welfare in the Community. Indeed, economic and monetary union implies far more than the single market programme and, as is discussed in the following two Parts of this Report, will require further major steps in all areas of economic policy-making."
Hon. Members may say that we have not agreed to that. But we have, because on at least two occasions--at Stuttgart and in the preamble to the Single European Act--we signed a declaration that we are in favour of economic and monetary union.
As Mr. Delors and his friends, including in an individual capacity the Governor of the Bank of England, have said, this cannot be done without a central bank, one currency, a single economic policy and, of course, harmonisation of taxation. So it is not just a single market that we are in ; it is much bigger. One goes with the other. It is something to which Her Majesty's Government, knowingly or otherwise, are committed but to which I hope that my hon. Friends and I are not.
Mr. William Cash (Stafford) : I do not share the pessimism that has permeated much of the debate. Many aspects of the single market can and should be welcomed, but I have grave reservations about what I have consistently described as creeping federalism. There is continuing evidence of that. There is no doubt that the European Court of Justice itself has a centre of gravity which inevitably will draw us further in that direction unless we do something about it. I was heartened--this is one reason for my current state of optimism--by a recent visit that I paid to France with my fellow members of the Select Committee on European Legislation. It transpired while we were there, by coincidence--apparently following the lines that we in this country have been adopting in our small campaign to ensure that federalism does not take a grip--that in the French Parliament- -in the National Assembly and in the Senate--Bills of Parliament were introduced to reassert their say over European legislation. Obviously, that say has been diminishing to a point when they could take it no longer.
Column 308I believe that we shall find that happening elsewhere in Europe. While, therefore, I am a supporter of the single market, for all the reasons that can be adduced--greater liberalisation of capital movements and so on--some of which have been under-estimated in a number of the speeches made tonight, there is now a great opportunity for us, through the national Parliaments of the Community, to make up for what has been described as a democratic deficit. The European Parliament--unless we were to become a federal state--will not do that.
It is vital that we use the fermentation process of debates of this kind to raise the awareness of the people of this country to what is going on in Europe. At the same time, we can alert them to the advantages of what is going on--and the reservations we have. We can then allow the democratic process to do its job. As some French senators told us, Britain is, in effect, leading Europe back into democracy through what we have been doing in this House.
It is indicative that tonight, while we do not have a full Chamber, there are many more Members in attendance at this late hour than there are for many debates which take place in prime time. I agree with the hon. Member for Newham, South (Mr. Spearing) that a disproportionate amount of time is spent on the directives compared with primary legislation. We dealt with the second banking directive in about an hour and a half, whereas we spent about two months looking into the Banking Bill before it was passed in 1987. It seems, from what has been said by the Leader of the House and others, that there will be changes in our procedures.
The hon. Member for Antrim, North (Rev. Ian Paisley) referred to what is contained on pages 13 and 14 of the report that is before the House, under the description "The prospect ahead". We find there descriptions that go way over the top of what is involved. For example, we are told that heroic decisions are to be taken to ensure that the internal market is completed.
This is, in many respects, a prosaic exercise with much at stake, and we must get it right. But I have reservations, for example, about the directive on health and safety, which no doubt contains much useful material. If a law is passed but not enforced elsewhere in the Community, that sets up an anti-competitive regime. It means that, whereas the Health and Safety Executive in this country is enforcing the requirements, they may not be enforcing them elsewhere in Europe.
When the hormone regulations were about to go through, we debated them in the House. We made sure that there was a debate before adoption. We should follow that principle--as set down in a resolution of this Parliament in 1980--in every respect.
There are great economic advantages in the single market, but there are distinct disadvantages if we are to go down a federal route. I say that with no apology for repetition. There is a centre of gravity towards federalism ; we can and will resist it, but we will be able to do that only by taking effective measures in the House and in the country. Other member states will follow us towards that end. 11.49 pm
Column 309the Community who wish the Community to move in a federalist direction, and he asserts firmly, as I am content to do also, that the Government will resist such a move. It is quite inappropriate, and also quite unnecessary in achieving the real benefits that are to be gained under the provisions of the single European act. I can reassure him and others who have voiced such fears that the Government will continue robustly to resist moves in that direction. My hon. Friend the Member for Southend, East (Mr. Taylor) mentioned firearms and frontiers. It is important to be clear about this : steps are being taken and work is being done on removing some of the inconveniences of frontiers for legitimate travellers, and it is perfectly proper that that work should go foward ; but we have said repeatedly that the work should come to fruition only as far as is consistent with retaining proper control over the illegal passage of drugs, firearms and other things which concern us all.
My hon. Friend the Member for Southend, East referred specifically to the directive on firearms. He is quite right to say that we have opposed this proposal, as have several other member states. We shall continue to do so. Article 36 of the treaty allows restrictions on imports which are justified on the grounds of public security, and we shall continue to uphold our right to restrict the import of things which come under this heading.
The hon. Member for Berwick-upon-Tweed (Mr. Beith) referred to the free circulation of pornography. The self-same article of the treaty allows import restrictions justified on grounds of public morality. I hope that that reassures the hon. Gentleman. We will maintain our right to impose checks at frontiers to control the movement of drugs, pornography, terrorists and firearms.
My hon. Friend the Member for Southend, East also referred to the problems of inner-German trade. I recognise that there is concern about this. That is why officials of my Department have been in Bonn today to discuss with the German Government their control methods and their checks to deter fraud. The German Government put a great deal of effort into checking goods at the inner-German borders to ensure that goods are not being diverted from other eastern bloc countries. They carry out checks at factories in Germany, all of which must be authorised before they can carry on inner- German trade. They have taken severe action where fraud has been found, and people have been sent to prison for such frauds. For all these reasons, leakage of East German goods into member states is low, but we will follow up any specific cases which the hon. Member for Southend, East or any other hon. Member cares to raise with us.
The hon. Member for Berwick-upon-Tweed talked much good sense on this subject, greatly at odds, if I may say so, with what was aptly described as the "Euro-fanaticism" of many in his party. He took a practical view of what the single market can achieve. There are real benefits for this country, but we must not allow ourselves to be diverted--
It being one and a half hours after the commencement of proceedings on the motion, Madam Deputy Speaker-- put the Question, pursuant to Standing Order No. 14 (Exempted business).
The House divided : Ayes 106, Noes 17.
Column 310Division No. 165] [11.54 pm
Arnold, Jacques (Gravesham)
Arnold, Tom (Hazel Grove)
Beith, A. J.
Bennett, Nicholas (Pembroke)
Bevan, David Gilroy
Brown, Michael (Brigg & Cl't's)
Browne, John (Winchester)
Carlisle, Kenneth (Lincoln)
Coombs, Anthony (Wyre F'rest)
Coombs, Simon (Swindon)
Davies, Q. (Stamf'd & Spald'g)
Davis, David (Boothferry)
Douglas-Hamilton, Lord James
Ewing, Mrs Margaret (Moray)
Fenner, Dame Peggy
Forsyth, Michael (Stirling)
Goodhart, Sir Philip
Hargreaves, Ken (Hyndburn)
Howarth, Alan (Strat'd-on-A)
Howarth, G. (Cannock & B'wd)
Hunt, David (Wirral W)
Johnston, Sir Russell
King, Roger (B'ham N'thfield)
Leigh, Edward (Gainsbor'gh)
Lloyd, Peter (Fareham)
Lyell, Sir Nicholas
Maude, Hon Francis
Meyer, Sir Anthony
Miller, Sir Hal
Moynihan, Hon Colin
Nicholson, David (Taunton)
Porter, David (Waveney)
Rhodes James, Robert
Sackville, Hon Tom
Shaw, David (Dover)
Shaw, Sir Michael (Scarb')
Steel, Rt Hon David
Stewart, Allan (Eastwood)
Stradling Thomas, Sir John
Taylor, John M (Solihull)
Thompson, D. (Calder Valley)
Thompson, Patrick (Norwich N)
Twinn, Dr Ian
Waddington, Rt Hon David
Welsh, Andrew (Angus E)
Tellers for the Ayes :
Mr. Stephen Dorrell and
Mr. David Heathcoat-Amory.
Barnes, Harry (Derbyshire NE)