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the report of the Delors committee. I must confess that I was slightly shocked by what I would call the kneejerk reaction of the Chancellor of the Exchequer to the report when it was published. I was shocked first for protocol reasons. Mr. Delors is a distinguished civil servant. He was previously a politician and may aspire to being one again, but at present he is the appointed, unelected top civil servant of the Commission. He was asked to produce a report and he did so. He is like the secretary to the Cabinet. We do not criticise a Cabinet secretary because we do not like his report. If we want to argue about the Delors report, we should do so with the other Ministers. The Chancellor of the Exchequer should go to the other Finance Ministers. My right hon. Friend the Prime Minister is against the report. That is building up Mr. Delors unnecessarily. Since I had always understood that my right hon. Friend the Prime Minister would like to keep Brussels under control, we should not build up the Commission too much. If Mr. Delors has ambitions for a superstate, he will be delighted at the way in which my right hon. Friend has taken him on.

I was also worried because my right hon. Friend the Chancellor of the Exchequer, and later my right hon. Friend the Prime Minister, fastened on to paragraph 39 of the Delors report, which gives the impression that the Commission would like us to commit ourselves, before we embark on discussions, to the final goal of a single currency and a central bank. I have lived through all this two or three times before. When the Schuman plan was brought forward, we were asked to accept the idea of a supra- national high authority. Of course, such a high authority has never emerged. There is an authority, but it is not supra-national. At Messina we were told that we would have to accept a supra-national high authority, but General De Gaulle saw to it that there never was one.

I was horrified that we should take the matter as seriously as we appeared to have done. So, greatly daring, I went over to Brussels and asked Mr. Delors whether this was a condition or an indication. He said, "What do you mean?" I said, "If I am catching a train from Paris, destination Marseilles, and I find the train uncomfortable, or I change my mind about where to go, can I get off at Dijon or Lyons?" He replied, "Of course you may, and so may any of the other passengers. We simply would like you to have in mind where, on the whole, we think you should be going and where we hope you would like to go. But if experience teaches you that that is not where you want to go, then of course you must be free to get off. You do not surrender sovereignty in that sense."

The next point that worried me was the argument put forward by the Prime Minister that to have a single currency and a single bank must necessitate a federal Government. I am not sure that that is true. We had a single currency in the shape of gold, but all the gold standard countries went to war against each other in 1914, so there was not much sacrifice of sovereignty there. When we went off the gold standard, we produced the sterling currency, which was not a single currency but a reserve one--I shall return to that concept shortly--so I am not sure that it is a logical conclusion to suggest that it is not possible to have a single currency without having a federal Government.

The Delors report is a clever compromise between the maximalists and the minimalists with, as my right hon. Friend the Minister pointed out, the saving grace of not having a timetable, save that it urges those not already in

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--particularly ourselves--to join the EMS by the summer of 1990. I can see the difficulties. For example, we have 8 per cent. inflation and it would be uncomfortable for us to join unless we can bring that down to a more reasonable figure. The Chancellor of the Exchequer has said that, with God's grace, it will be down to 3 or 4 per cent. by that date. We do not know what the impact of the abandonment of exchange control would be on the French, Italian and other currencies. Delors says that it is already abandoned from the point of view of the corporate sector. We do not know what the effect would be on the private sector. Those are some of the problems that we must face. Let us suppose that we could say, "Not just when the time is right, but when we have got our inflation down and we have been able to study the consequences of abandoning exchange controls by the other countries concerned, then we will join, and we hope that that would not be too far after 1990." I am not demanding that we do that, but I hope that the Government will consider it seriously. We come to phase two, and a tactical problem arises. All the countries--apart from ourselves and a couple of others--which are members of the EMS start from the EMS in negotiating phase two. Delors sketches what it might be, but it is just a submission from technocrats, officials and some bankers. If we are not in the EMS, we are not at the starting gate. We are not in a position to negotiate about phase two. Yet phase two, it seems, could be of enormous interest to us and we might make a great contribution to it. In 1931, when we went off the gold standard, all the experts thought that the heavens would fall in. On the contrary, however, we created a reserve currency which became second only to the dollar throughout the world, although it was without any gold or other foundation. It was not a single currency. The various members of the Commonwealth kept their own central banks and control of their money supply and interest rates, but they lodged their reserves with the Bank of England and tried to keep their parities as close as possible. When I described that to Delors, he said "It is close to the phase two that I want to see." I wonder whether we might take the initiative and volunteer to help in creating the second phase, which could be done without any surrender of control of our own money supply or interest rates. We could be helpful. We are the experts in this matter and it is an initiative that we could take.

Phase three commits us to a single currency and a single central bank. It is a fascinating idea, but I do not see how we could conceivably commit ourselves to it because we have no idea what Europe will look like 10 years from now. Will eastern Europe come in? There are all manner of considerations which cannot be foreseen. On the other hand, need we reject it and say that it is unacceptable because of the possible surrender of sovereignty involved? That is why I have said in the past, though nobody really understood why I said it, that I would rather be guided by the words of the hymn : "Keep Thou my feet ; I do not ask to see

The distant scene ; one step enough for me."

On the subject of hymns, there is the splendid one,

"I vow to thee, my country"

that we sing at memorial services, the first verse of which is a total commitment to the defence of the United Kingdom and its interests, and the second a noble

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obeisance to a distant kingdom of which we have heard but never seen. So we might abstain from committing ourselves, but also abstain from rejecting the concept.

We must look at the European picture as it is. At present, all the countries concerned are not being drawn into Brussels but are being pulled in other directions. We have our own immense overseas interests. So have the French, in north and tropical Africa. The Spaniards and Portuguese also have big overseas commitments. Hon. Members will have noticed that the Spaniards have a horrible problem just now in that they have always allowed free immigration from Latin America. Will they be allowed to continue doing that? It would mean the free immigration of Latinos to all the European countries. The Germans have the Drang nach Osten--they are fascinated by what is happening in the east. I would not exaggerate the importance of the Germans' move to reunification because the east represents only 6 or 7 per cent. of their overseas trade, but they dominate the European monetary system. If we are not in it, they will dominate it. Even if we go in, they will be very important.

I do not know which way the French will go, whether it will be Vichy or Free France. When I put that to M. Delors, he said, "If you come in, you will dilute the German influence, and we would not be against that."

I recall--this is pertinent and conclusive--that I once asked Winston Churchill how we were to reconcile our interests in the Commonwealth, which still existed, with our membership of Europe. He said, "It will not be easy --on the other hand, we must have a united Europe if there is not to be another Franco-German war and if we are to keep the Germans in the Community." And then he said, "A Europe united without us could be a Europe united against us."

6.37 pm

Sir Russell Johnston (Inverness, Nairn and Lochaber) : It is pleasing to me, as one who has taken part in these European debates for a long time, to see the sudden degree of interest that has been aroused. There was a time when I almost felt inclined to cross the Floor and put my arm around the shoulder of the hon. Member for Southend, East (Mr. Taylor) and comfort him in his loneliness. Things have changed, and it is evident that the Government are well capable of generating a lively debate without even having an Opposition. We have the right hon. Member for Henley (Mr. Heseltine), who may catch Mr. Speaker's eye and speak in the debate and who has been talking about the Prime Minister's blind attitude to Europe. The Sunday Times quoted him as having referred to the famous fable about the hare and the tortoise. He pointed out that the tortoise won only because the hare stopped running, and he added :

"There is no conceivable prospect that the German, French, Italian, Spanish or any other hares are going to stop every few years to allow a tortoise wrapped in a Union Jack to lumber past."

That is strong stuff, and I agree with it.

The right hon. Member for Old Bexley and Sidcup (Mr. Heath), who is sadly not with us, said that the Prime Minister's views were absolute rubbish. That was not, perhaps, the most delicately intellectual comment he could have made, but it was pretty direct. Then, Sir Henry Plumb-- [Hon. Members :-- "Lord Plumb".] Lord Plumb, I beg his

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pardon. One forgets all these ennoblements because they come so quickly one upon the other. Lord Plumb was the leader of the Conservative group in the Strasbourg European Parliament. The Independent, on 10 May, said of Lord Plumb :

"While never naming her,"

I hardly need to say who "her" is--

"Lord Plumb will criticise almost every element of Mrs. Thatcher's Bruges campaign, reserving particular poison for the suggestion that Brussels is wilfully creating unnecessary red tape. The creation of common rules for a common market will eliminate the pettiness of certain forms of national bureaucratic regulation. 1992 is blowing the whistle on red tape, not creating it'."

His speech also contained a clear defence of the social dimension. Therefore, there is some turmoil in the Government. The Minister began with a flourish--

Sir Anthony Meyer (Clwyd, North-West) : I trust that the hon. Gentleman will make it plain that, on that occasion, Lord Plumb, was speaking not as a Conservative, but as the president of the European Parliament. There is an important distinction.

Sir Russell Johnston : Lord Plumb is the president of the European Parliament, but people do not undergo sea changes of personality when they take on different occupations, tasks and jobs. He is a Conservative. He is a decent chap, but a Conservative.

The Minister began with a great flourish, and went on the attack. I suppose that she was anticipating that others might do likewise. She spoke of the Conservative record in the 1960s, and denigrated the Labour party. I remember the 1960s quite well and the Conservative record in Europe at that time was not so startling.

The Liberal party was the first party to call for entry into the Community. At this election, the Social and Liberal Democrat party is the only one that is committed to both the Single European Act and the freedom that it will generate, and to the kind of social, economic and environmental policies that must necessarily accompany it. We also look forward to further constitutional development. At the beginning of this debate, much emphasis was placed on scrutiny. We are, after all, gathered to discuss developments that took place in the European Community between July and December of last year. One might say that it is a waste of time because all the water has gone under the bridge. The right hon. Member for Chesterfield (Mr. Benn), who has temporarily left us, commented on this subject. If we are talking about scrutiny, we must talk about the European Parliament. There is no way in which this House can effectively scrutinise European legislation.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich) : Nonsense.

Sir Russell Johnston : The hon. Lady may say nonsense as much as she likes. That is my considered view. If, however, we talk about making a pre- legislative contribution to what is being put together, that is another question. As a legislative Chamber, we have made very little progress in pre-legislative discussions, although to a degree the Select Committees are carrying out that type of work. If hon. Members are seriously concerned about the fact that they are unable to make a proper contribution to the evolution of European Community policy, the only

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effective action will be pre-legislative, so that input can be made which can subsequently be considered and examined. That is the only way forward.

The right hon. Member for Chesterfield went on quite a bit about that, and about Crown prerogative and the fact that when the Government negotiate changes they do so as a Government. The hon. Member for Hamilton (Mr. Robertson) also joined in. The Labour party is in no position to criticise this aspect. It is precisely what the Labour party want. The derogation that the British Labour party made from the section of the European Socialist manifesto entitled "A People's Europe" is not about having a more supranationality, but about safeguarding the inter-relationship between sovereign states. In my humble opinion, the Labour party is not in a position to criticise the Government, much as it may want to.

Many hon. Members wish to speak and time is limited, so I shall confine myself to a limited number of issues. The Minister mentioned regional policy. The Heads of Government of the Community have consistently held the view that the common internal market must be accompanied by a proper regional policy. If it is not, we risk strong growth in the inner regions of the Community and depression in the outer areas, such as Scotland, the north-east and Wales, and other fringe areas in the Mediterranean, as activities pull towards the centre. That is why I make no apology for repeating a quote made by the Chancellor of the Exchequer, who is a central individual within the Government. After his recent Chatham House speech he said : "The growth of regional policy"

--within the Community--

"would be positively damaging."

That was an extraordinary statement and very much a free market statement. The other day, at Scottish Question Time, I asked the Secretary of State for Scotland whether he agreed with it. He smiled seraphically and said that he did not. I would like a Minister to clarify the Government's view on regional policy in this debate. While I am at it, I might say to the Minister, who looks slightly sad--

Mrs. Chalker : I am not sad.

Sir Russell Johnston : It is about time we stopped blowing trumpets about the amount of regional money we receive, while ignoring the additionality rule. That money does not provide extra funds for the deprived areas but is simply an exchange that occurs within the British budget.

Reading the White Paper, one could easily gain the impression that the Government are fully content with developments in the Community. However, the six-month period that we are talking about contains the famous Bruges speech in which the Prime Minister put her backing firmly in favour of an unregulated free market throughout Europe and showed a great lack of enthusiasm for social, regional and environmental policies--social engineering is the phrase which is increasingly being used. We firmly believe that unbridled competition must be tempered. There are matters in the social sphere that the market, good as it may be at generating economic activity, will never undertake unless it is made to.

The Prime Minister is once again on the warpath, shooting from the hip at a variety of almost unexpected targets. I shall consider one or two. First, there were plans for a common card for the over-60s to enable them to

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benefit from concessions on public transport and other facilities. It was a sort of glorified European bus pass. The initiative for that came, strangely enough, not from the Commission, from the strange, wicked bureaucrats in Brussels, but from Eurolink Age, an organisation representing the interests of older people throughout the European Community which was set up by Age Concern. The project was probably the brain child of Age Concern's director, Sally Greengross.

A letter of 7 December 1987 to the Secretary of State for Social Services, from the hon. Members for Carrick, Cumnock and Doon Valley (Mr. Foulkes) and for Brighton, Kemptown (Mr. Bowden) and my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood), who are officers of the all-party parliamenary group for pensioners, stated :

"We write to express our support to European initiatives which were discussed

Consideration is being given to marking a European year by the launch of a European Seniors' Pass We believe that this would benefit many individual elderly people across the European Community. We therefore hope that you will feel able to join us in supporting these initiatives."

Why not? I do not understand all this talk of interference. I do not want to go on about cigarettes but, like all smokers--I know I should not be one --I look around for the least injurious cigarettes which will not kill me the day after tomorrow. In the Federal Republic and in France the nicotine and tar contents are printed on the packet. Instead of bearing the legend "low tar" the packets tell me exactly how low. What is the objection to that? The Secretary of State for Health should be wholly in favour of it. I am told that we are to veto the Lingua teaching scheme at the Council on Monday, but I do not know whether that is true. The Association of Teachers of German wrote to The Independent to say that its members thought it

"particularly galling"

that the Prime Minister intends

"to deny the opportunity of cultural and linguistic exchange". Mr. Alan Jones and Miss Margaret Tumber continued :

"One can only hope that wiser counsels will prevail and that" perhaps the Government have their own plans

"to match the intention of Lingua in encouraging and funding pupil and teacher exchange, in providing grants for employers to enable them to improve the language skills of their workforce, and in facilitating exchanges between universities, polytechnics and other institutions of higher and further education."

One would imagine that this country had a splendid record of speaking foreign languages--it has not. I see no earthly reason why we should not participate in a programme to deal with that problem.

Mr. Butterfill : In his enthusiasm for all things contained in the treaty, will the hon. Gentleman reaffirm that the Liberal party remains committed to the principles of the European Atomic Energy Community, and in particular to article 1, which reads :

"creating the conditions necessary for the speedy establishment and growth of nuclear industries"?

If so, will he explain its attitude to Hinkley Point?

Sir Russell Johnston : I do not think that nuclear energy and language teaching are closely aligned, and I must press on.

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Language is the most important aspect in free movement. If people cannot speak other people's languages it is difficult for them to move and work freely in different environments.

It is interesting that the Prime Minister increasingly sets her face against free movement, which is an intrinsic part of the Single European Act. The hon. Member for Hamilton mentioned the splendid interview that the Prime Minister gave to the Daily Mail, headed "Why I am the best European of all".

I read it rather sleepily this morning and thought at first that the interview had been given by Ted, but I was wrong. The Prime Minister said that we shall continue to need customs posts, immigration controls and all the rest of the barriers that the Single European Act was intended to do away with :

"How are you going to stop anyone from Bangladesh coming for a holiday in Greece right across all borders, no controls, and settling in Britain and we would have no means of finding out? Now, in France you have to carry an identity card, and you have to carry it everywhere so that police can challenge you anywhere As I said in my Bruges speech, we are practical. They have identity cards, but can you imagine compulsory identity cards in this country? We recoil from it."

So what about football identity cards? What is the difference? In different ways we all have to prove that we are who we are by means of various forms of documentation, and the idea that identity cards are a dreadful intrusion on freedom is utter nonsense.

A couple of points about European monetary union. The Delors committee report was the most important happening of the past six months. The right hon. Member for Brighton, Pavilion (Mr. Amery) described a conversation he had with M. Delors and gently criticised the Chancellor for reacting rather quickly to it. The Chancellor said, as reported in The Independent :

"Our view of the Community is one of independent sovereign nation states. We cannot accept the transfer of sovereignty which is implied"

in the Delors proposals.

"Economic and monetary union would in effect require political union and a United states of Europe' which was not on the agenda for now, or for the foreseeable future'."

But it is on the agenda now and it will stay on it.

The right hon. Member for Pavilion said that we should not start arguing about the precise form of a federal or confederal Europe, but there will be an increasingly supranational structure of some sort. It is unavoidable and, in my opinion, desirable, necessary and practical. The argument about sovereignty is based on a myth and is a means in practice of clinging to nationalistic rights which are becoming less and less meaningful in the European Community. To advance the Community, we must go beyond 1992 towards economic and monetary union, and that is the logic of the Delors proposals. Yesterday's publication of the European social charter, although not strictly speaking under consideration in this White Paper, has already been mentioned. It is early to start being specific about it, but it lays down a number of fundamental social rights which should be exerciseable by citizens throughout the Community. It is not only a charter of workers' rights ; it contains various social rights--the rights of women, pensioners and people outside the labour market--and we shall need common rules of that sort.

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Common standards and entitlements are an inescapable part of the future of the Community, enshrining not only the right to make money but the right to social protection. My party and I are committed to the social aspects of the Community, and I hope that the Government will review the sort of approach that they have hitherto adopted. 6.58 pm

Mr. Michael Heseltine (Henley) : The word "sovereignty" has rightly come up in the speeches made by right hon. and hon. Members because it is at the heart of the matter. I start my three brief points in a simple belief that is widely shared. If a country has the power to exercise sovereignty on a national scale, it is appropriate and desirable that it should do so--appropriate not only in the sense of national pride, but because the more local and immediate they are, the more effective the controls over that power are likely to be. However, if in the world in which we live sovereignty is no longer capable of being exercised on a national scale because the scale of power that is necessary in the modern world has outstripped the capacity of a medium-sized nation to control it, then in the pursuit of the sovereignty of the nation Governments have a responsibility to seek to recover the power through partnerships of sovereignty that may embrace wider groupings of sovereign independent nations. That is why this country, against its instincts, traditions and much of its history, reluctantly concluded in the 1950s and 1960s that it belonged within the European Community of nations. We wished to recover a sense of national sovereignty, albeit a national sovereignty shared with other nations similar to ourselves. We could no longer exercise sovereignty on a national scale within a community of Europe, so in the pursuit of British self-interest we made that decision.

I am not in any way in favour of some anonymous, ill-defined remote concept of supra-European existence. I am interested in Europe because I see in the arrangements of Europe and in the power structure of Europe a way in which British self-interest can be exercised within a power that is more relevant to the world in which we live and in which increasingly our children will live. With all my privileged experience as a Minister in Conservative Governments, I have not known of one German, Frenchman, Italian or Greek who has any other interpretation of why those countries are members of the European Community. They see a wider sovereignty shared as a better prospect for them than the illusions of yesterday's sovereignty hung on to for too long. That is why we are together. If it ever ceases to be the case that the members of the European Community perceive their self-interest no longer to be bound up with the European process, the Europe about which we are talking today will cease to exist. There will be nothing new historically in that. Pan-European movements in the past have come to an end. If we cannot identify a personal or national self-interest, our pan- European process will come to an end--and so it should.

My second point starts with the Single European Act, which this Parliament was the first to ratify in 1986. Let us be under no illusion--Britain did not want to sign the Single European Act. We took the classic British role in believing that events would unfold and that the market would speak. The only reason that we signed the Single

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European Act was that the other 11 members of the Community--fewer at that time--decided that they would go on with a structural advance in the relationships of Europe and, if we did not want to be part of it, that was our sovereign right so to determine. We had made that judgment before. They knew that, every time we exercised that sovereign right to stay behind, it was only a matter of time before we reassessed the position and sought to catch up, but then we would join arrangements that they had moulded in their interests and not in ours.

Once the House had signed the Single European Act in the pursuit of the single European market, we had accepted the reinstatement of the process of majority voting. [Interruption.] It was built into the original treaty of Rome, but was frustrated by de Gaulle in the Luxembourg compromise. It was to get back to the intention to create a single market that the Luxembourg Council of Ministers determined to enact again, and it changed the treaty in order to achieve the legislative process of majority voting.

Once any of us are involved in a process of majority voting, there is only one way to win--by persuasion. We must have the better arguments, we must win the electoral debate, we must persuade other partners in the venture, any one of which has the same right to hold up his hand in dissent. Once we recognise that, we will realise that not only must we have arguments that will persuade the constituency of our European colleagues, but that we have another constituency to persuade. If the purpose of the single market is to widen the horizons and opportunities for British commerce and industry, who will determine whether we win or fail? It will not be the Government or Members of the House--it will be the industrial managers of our companies, who believe that there is something to go for, who understand the opportunity and who commit their companies to the exploitation of that opportunity. If in the process of winning politically in the European debate we create an atmosphere of incredibility and disbelief about what Europe is about, not only will we alienate the very political constituency that must determine with us the rate of progress politically, but we will detach the British industrial and commercial management from the venture.

If we have not persuaded the industrialists to gear up to the process that is under way, we shall pay a devastating price in the 1990s. I am second to none in admiring what my noble Friend Lord Young has done to create awareness of the effects of 1992 across the country. Few people employed in our wealth-creating process do not know that the single market is coming, but if asked what they are doing about it, the Government's success in creating awareness is directly reversed by the attitudes of British industry, which today by some nine to one are still failing to make the adjustments on which success in the market place will ultimately depend. As politicians, it is incumbent upon us so to temper the language that we use in winning the intellectual debate in Europe as to maintain the enthusiasm of the industrialists upon whom our future depends. Thus is the task interwoven.

Although I understand all too clearly the principle upon which my right hon. Friend the Secretary of State for Health went to Brussels to win or lose the issue about health warnings on cigarettes, I wonder whether he would not have been wiser to hold his fire for the battle about the social arrangements for Europe, which really matter. If we are seen to fight on every battle ground, with the same

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wooden arguments and the same apparently obstructionist approach, we shall switch off the potential support of the very people on whom we shall depend. I believe that we must fight to prevent the more excessive elements of the social charter. It would be a disaster to try to impose mandatory workers on the boards of British industry. Let us fight on that ground, with all the intellectual conviction that we shall rightly need. Why do not the Government, who have done so much to widen share ownership in Britain, try to put into the social charter of Europe provisions to extend the share-owning democracy among Europeans? Why do we not take the best British ideas and put them on the European agenda rather than cavilling at the worst ideas of Europe and refusing to have them here?

It is important that we understand the changing definition of sovereignty. If one changes the definition of sovereignty, power moves from old concentrations to new, which is a source of resentment. How could it be otherwise? We are at the heart of that dilemma because power is moving from this place, which causes a growing and legitimate concern.

Mr. Aitken : Parliamentary sovereignty does not need to move.

Mr. Heseltine : My hon. Friend says that it does not need to move, which rightly questions the whole European process, and I respect his position. History may prove him right. The endeavour may founder as it has foundered before, but so long as it has not foundered, so long as we are in it, and so long as our treaties commit us to it, the only way to protect British self-interest is to be at the leading edge of what is happening. We therefore come back to the transfer of sovereignty that is built into the process, not because anyone forced it on us, but because we signed treaties unleashing a profound reassessment of how British influence will be dealt with and administered in the world of tomorrow.

Mr. Spearing : Will the right hon. Gentleman give way?

Mr. Heseltine : No, I will not give way.

There are two areas in which that sovereignty might be moving away towards the European concept. The first relates to Governments and the second to Parliament, and I wish to make a clear distinction between the two. I have been a member of a Government and I have had some experience of dealing in Europe, and I have a clear memory of the endless submissions that come up from civil servants asking for guidance about how they should handle the private and secret negotiations in Europe.

Mr. Speaker : Order. The right hon. Gentleman must now bring his remarks to a close.

Mr. Heseltine : Governments know what is going on, but this House does not. The question that we must have before us is how to bring power back here. That is the debate that must continue, and that is the way to consolidate the advance of Europe politically with the democratic accountability in which we all believe.

7.10 pm

Mr. Peter Shore (Bethnal Green and Stepney) : The right hon. Member for Henley (Mr. Heseltine) is right to say that sovereignty is at the heart of the matter. Those

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who are not prepared to address that question are not taking part in the great debate that has continued in this country since the mid-1950s.

If I was to accept the right hon. Gentleman's definition of worthwhile sovereignty--a kind of power of control over virtually all the factors that influence one's national life--I would still believe that no country has ever enjoyed such sovereignty. To abandon one's Parliament and one's democracy is implicit in the abandonment of national sovereignty. The alternative way pursued by the world community for more than 50 years is to forge, through alliances and treaties, all kinds of agreements and regulations affecting the conduct of affairs. Those agreements, by their very nature, are limited and, at the right time and if circumstances change, one can withdraw from or extend them.

A different path is open to us. The idea that we have no choice except to become submerged in some quasi-federal union in Europe or be left with our small catchment area of sovereignty is absurd. The alternative is the entire system of international relations developed during the past 50 years or more.

The Minister of State started the argument about scrutiny. I agree that we are not doing anything like enough in this House to scrutinise the legislation and the other proposals and directives issued from Brussels. The hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) was right, however, to say that at least in one area of the Single European Act the only scrutiny that can lead to worthwhile action is that undertaken in the European Parliament. He is right, because that relates precisely to those areas of the Act where we have abandoned the right of veto over the proposals put before the Council of Ministers.

In those cases where there is no alternative but qualified majority voting, or where matters are decided by the so-called "co-operation procedure" of the European Parliament, no proper accountability is left to the Westminster Parliament. Such European scrutiny relates to those changes that were made in the Single European Act that deliberately removed the power of veto from the Council of Ministers. Scrutiny where there is no accountability is interesting ; but it is not exactly what Parliament is about. Such scrutiny is not about the accountability of Ministers or about accountability for decisions to the people and to Parliament.

I shall make a short contribution, as I fall within the ten-minutes rule. I am glad that my hon. Friend the Member for Hamilton (Mr. Robertson) mentioned some of the economic facts that are so salient to discussions of the single European market and our attitude to them. Tucked away in appendix G is the appalling table of Britain's balance of trade in manufactured goods with the European Community. That deficit has risen from £1.2 billion in 1980 to more than £12 billion in 1988. That is a terrible affliction upon the British economy and upon the prosperity of the British people.

That deficit with the Community presently accounts for nearly the entire appalling deficit in overseas trade in our current account. Therefore, it matters enormously that we should start thinking carefully abut the effects of going forward to the even greater competitive system that is

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embodied in the single European market to be established by 1992. It also greatly affects the powers of national Governments to influence their economies.

Public purchasing power, which has been one of the most useful tools for the encouragement and development of important industries and enterprise in our country, is no longer to be a matter for the nation state to decide. There will be a register of state rights and the subsidies and other subventions, direct or indirect, made by states will be limited if not abolished by the Single European Act. The important question of monopolies and mergers policy will no longer be a national responsibility, but will be transferred to the Community, which has a great interest in cross-frontier mergers. The arrangements I have described are part of the 1992 single market and of the Single European Act. Such arrangements are to be decided not by the Council of Ministers, on which we have a veto, but by qualified majority voting. Therefore, if the single European market is established, powers governing public purchasing, monopolies and mergers and the like will no longer be available to the British Government.

The right hon. Member for Brighton, Pavilion (Mr. Amery) spoke about Britain joining the exchange rate mechanism of the EMS. The downside of that, of course, is that, if we join, we then lose virtually all control over our exchange rate and interest rate policies. In the news yesterday, we heard of the pressures upon us from Brussels for the harmonisation of VAT. Of course we have some reservations about that, but does anyone here doubt that future Governments will be allowed to retain the power to decide indirect taxation--VAT, customs and excise duty or company taxation--given the momentum of change in the next few years? That will happen unless a halt is called to these changes.

The Single European Act and the thrust of policy in the European Community today pose real dangers to us. The Prime Minister has a lot of explaining to do as the principal sponsor of the Single European Act. I must say that she makes a bogeyman out of Mr. Delors. Conservative Members are obviously much troubled by qualified majority voting ; they fear it greatly. Such voting, however, does not apply in the social area, which is specifically exempted under article 100A2 of the revised European treaty. All matters relating to trade union legislation and social policy will be kept within the old rules of unanimity voting by the Council of Ministers and subject to the national veto.

The one exception, in article 118A, relates to measures affecting health and safety. On an odd day last summer, that may have made the Trades Union Congress delirious, but it does not make me particularly enthusiastic about what is gained from the European single market of 1992.

We shall have to make a choice about the kind of Europe we want. It is not improper for people to wish to see an end to national Parliaments and nation states. That is their privilege. However, we are on the road towards national oblivion and the destruction and dissolution of our own democracy. We may create in Europe equivalent institutions, but the power to decide our own policies in our own elected Parliament--a power that used to reside in our own people--is on the way out, and unless we are very careful, it will disappear.

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