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European Council (Strasbourg)

3.31 pm

The Prime Minister (Mrs. Margaret Thatcher) : With permission, Mr. Speaker, I should like to make a statement about the European Council in Strasbourg on 8 and 9 December which I attended together with my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs. The text of the Council's conclusions has been placed in the Library of the House.

The Council considered four main issues : the steps still needed to complete the common market in 1992 ; progress with economic and monetary union ; the social charter ; and how the European Community can support democracy and economic reform in eastern Europe. First, on the steps needed to achieve a real common market by 1992, our meeting in Strasbourg confirmed the importance that we all attach to keeping to the timetable for 1992, and I believe that we are on course for that. The Council confirmed and welcomed the progress made during the past six months--in particular to open up markets for banking and financial services and for telecommunications in every member state, and to make possible cheaper air fares. We shall aim to agree another package of important measures before the end of the year, including rules for company mergers and the further opening up of public sector procurement.

We also set priorities for the next stage of our work, covering such matters as freedom to provide investment services and life insurance throughout the Community, and removal of restrictions on road and air transport and shipping.

Completion of the common market is important in three respects. First, it represents the single most important contribution that the European Community can make to the prosperity of all its members. Secondly, it is an example and an opportunity for the countries of eastern Europe. Thirdly, it is the main respect in which the European Community is in practice moving towards closer integration. Britain has been at the forefront throughout, and our record of implementing the Community's decisions is matched only by that of Denmark, as was explicitly confirmed by Mr. Delors in Strasbourg.

The second main item was progress with economic and monetary union. The Council welcomed the fact that the necessary decisions have now been taken to enable the first stage of closer economic and monetary co-operation in Europe to start on 1 July next year. That is something which Britain very strongly supports.

President Mitterrand also noted that the necessary majority existed to convene an intergovernmental conference before the end of next year to discuss further steps towards economic and monetary union. The conference will set its own agenda and the timetable for its proceedings. No time limit is set for its work. It will have before it not just the Delors report, but the British paper setting out an evolutionary approach to economic and monetary union, and perhaps other contributions. Meanwhile, discussion of all these matters will continue among Finance Ministers to ensure that there is full and adequate preparation of the intergovernmental conference.

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The council's conclusions specifically recognise--this is a very important point for Britain and for the House-- that the procedures for democratic control over economic and financial matters in each member state must be respected.

We are in the early stage of what will be a long debate in Europe on these matters. A number of different viewpoints are already beginning to emerge. Britain will play a full and constructive part in the debate, while reflecting the view expressed in all parts of this House that stages 2 and 3 of the Delors proposals are not acceptable.

Our third main item was the social charter. At our last meeting in Madrid, we all agreed that creating jobs should be the Community's top priority. It was all the more disappointing that the social charter which emerged would regulate the labour market in a way which, far from creating jobs, would actually put them at risk, by raising costs and making our countries less competitive.

Moreover, the charter foreshadows an action programme which the Commission is bringing forward containing no fewer than 43 separate proposals, including 17 legally binding directives. Action at Community level is appropriate in matters such as health and safety at work and freedom of movement. But the programme includes many other matters such as part-time work, working conditions, and compulsory schemes of worker participation in management. Britain does not accept that the Community should direct policy in these matters, many of which we believe are for national authorities to decide. Nor do we see any need to seek uniformity among social policies which have been developed to suit the varied needs and traditions of the different Community countries.

I therefore made it clear that we would not endorse the text of the charter, and, judging from their comments, I believe that many of my colleagues in Europe will have considerable difficulties with the Commission's specific proposals when they come forward.

The fourth main item of our work was help to eastern Europe. We want to support in practical ways the countries in eastern Europe which are introducing democracy and economic reform. The Council therefore committed us to further specific measures of help, including more food supplies ; support for the $1 billion stabilisation plan for Poland ; setting up an agency to help co-ordinate offers of training ; and agreement in principle to set up a development bank to help eastern European countries to make the transition to market-based economies, and we hope that others, including the United States, Japan, Canada and the European Free Trade Association countries, will join in the European development bank.

Britain's ideas for closer association between the European Community and the countries of eastern Europe will also be followed up.

Heads of Government and Foreign Ministers also discussed a wide range of international political issues. We underlined the importance of maintaining security and stability in Europe, in the face of the momentous changes taking place. This means confirming existing alliances, treaties and agreements, including the Helsinki Final Act.

I would also draw attention to our declaration on southern Africa. In this the Twelve look forward to the time when sanctions and other measures against South Africa can be reconsidered in response to profound and irreversible change there.

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May I say how grateful the Government are for President Mitterrand's skilful, courteous and effective chairmanship of the Council? It was an important meeting. What emerged most strongly is the degree to which the Community and the 12 member states--not least because of 1992--can act as the driving force in the development of the whole of Europe, at a turning point in the continent's history. The Community should be an example of how free and democratic nations can work ever more closely together, while remaining open to the outside world.

That is the way in which Britain wants the Community to develop, and, despite disagreements on some points, the Strasbourg Council encourages us to believe that that is how the Community will develop, with Britain playing a very full part.

Mr. Neil Kinnock (Islwyn) : I thank the Prime Minister for her statement. Opposition Members welcome a number of the decisions that were made in Strasbourg, especially on the social charter and the development bank, to assist the achievement of prosperity and the advance of democracy in eastern Europe. We consider that the summit was wise to adopt the communique that accepts the right of the German people

"to regain its unity through free self-determination"

in a peaceful and democratic process that fully respects existing agreements, treaties and the principles of the Helsinki Final Act. We further believe that the communique is a rational and constructive response to the widespread acknowledgement in both parts of Germany that the German question is a matter not only for the German people, but for their neighbours in the West and East also.

Is the Prime Minister aware that those positive decisions in Strasbourg were mainly taken in spite of her, not because of her? On the social charter, will the Prime Minister take this opportunity to specify precisely why she will try to deny the British people safeguards and support on matters such as part-time work, working conditions and opportunities for workers to participate in the management decisions that greatly affect their lives? What success has she had in convincing her fellow Conservatives such as Chancellor Kohl and Prime Ministers Martens, Da Silva, Andreotti and Schlu"ter of her belief that the social charter, which they accept in its entirety, is somehow "Marxist"?

On economic and monetary union, will the Prime Minister tell us precisely what her policy now is towards participation in the exchange rate mechanism of the European monetary system? Does Britain's participation depend upon that ever lengthening list of conditions that the right hon. Lady has enumerated over recent months : the completion of the single market, the removal of all exchange controls, the removal of all industrial subsidies and the reduction of British inflation to the European average, or, following her Financial Times interview this morning, do those conditions now have to be only "broadly met" in her new "open mind", or is she simply waiting until her next interview to decide what she really thinks? Instead of waiting upon events, why does she not improve on the present conditions and embark upon negotiations on conditions to try to secure participation in the exchange rate mechanism with maximum advantage and minimum difficulty for our country?

As the Prime Minister reflects on the Strasbourg summit and looks forward to summits in Ireland and Italy

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over the next 12 months, will she be changing her failed policies? Does she not understand that, whatever scepticism or hostility hon. Members of all parties may share towards stage 2 and 3 of the Delors process, the least effective way of influencing vital discussions and negotiations is through her habit of declaring strident opposition and following that up with resentful acquiescence? Does she not realise that that unconvincing and unsuccessful posturing has brought her to a position in the Community where she is merely tolerated and then bypassed, smiled at by other leaders but then sidelined by the processes?

Is it not clear that Strasbourg was a place of repeated defeat for the British Prime Minister? She was defeated on the intergovernmental conference, on the social charter and on the establishment of a European development bank. When will the Prime Minister ever learn that if this country is to have its proper influence in the Community, it must have its proper involvement in the Community?

The Prime Minister : I hope that everyone who is listening will remember that the right hon. Gentleman was not there and does not really know much about it.

As for the most important issue on which advances were made--the single market, something which makes everyone else in the world realise that Europe really is integrating into one market--Britain is in the lead-- [Interruption.] Yes indeed, Britain has implemented more of the directives, has led on many of the directives and of course was the first to make the single market a high priority. The right hon. Gentleman says that there are times when one stands up very much for things that are good for Britain. We did that, and because of it we have now had returned to Britain about £10 billion from the reform of the budget, a sum which the right hon. Gentleman would have had neither the skill nor the resolve to secure for this country.

Next, we took a prominent part in securing the reform of the common agricultural policy, and for that most people are now profoundly thankful.

The social charter was adopted only as a general statement by the 11 countries. When the Commission put forward a proposal that we all agree to give effect to the directives, that proposal was thrown out by almost every country because many who agreed with the charter agreed with it only as a general declaration. They will now have to look in detail at each of the directives as they come forward. Many who were prepared to put their names to a general declaration about a minimum wage will not agree to it when it comes forward because it would mean knocking many of their economies into a state of much higher unemployment. So it is far better to insist that these issues come forward as separate directives, when each and every one of them can be considered separately, rather than agree them in a broad general charter.

At the intergovernmental conference, our paper on the future of economic and monetary union will be among those which will be properly considered. It is an excellent paper. The governor of the Swiss National bank pointed out :

"The British authorities have understood the essential point : monetary integration should proceed along the path from stability to unity, and not that from unity to stability."

Karl Otto Po"hl, governor of the Bundesbank, pointed out that our evolutionary approach paper was

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"a realistic and sensible description of what monetary policy should concentrate on in future years."

So the people who know are most complimentary about the British stance.

Mr. David Howell (Guildford) : Turning from the dreary liturgy of the Leader of the Opposition to the coming debate about the future integration of the European Community, which my right hon. Friend mentioned and in which we shall be playing a full part, is it not a fact that, even if today the European Community was one federated super state, it would be necessary to reinvent nation states in order for Europe to meet its needs in the 1990s?

Is not the vision which we need to seek that of a confederation of free and open kingdoms and republics throughout Europe? Does my right hon. Friend agree that that is the need for the future? Bearing that in mind, does that not utterly refute the criticism which people make of my right hon. Friend's proper concern for the role of nation states in the Europe of the future?

The Prime Minister : Yes, I agree entirely with my right hon. Friend that we shall get maximum co-operation and maximum effect when we have the 12 nation states co-operating with one another ever more closely together, each with their pride in their own history and their own culture and each being prepared to do together the things that we do better together and which makes us stronger to do them together, leaving the others of us to do other things separately in our own way.

Mr. Paddy Ashdown (Yeovil) : May I take the Prime Minister back to the Milan conference of 1985? Is it not the case that there, too, she voted against an intergovernmental conference, on that occasion on the Single European Act, which she has subsequently been forced to accept and of which, I sometimes think, she has even claimed authorship?

Is it not a fact that at this conference she went opposed to the social contract and was outvoted 11 to one? She went opposed to an intergovernmental conference and was outvoted 11 to one. She was opposed to a European development bank but had to accept it. If that is batting for Britain, she is doing a remarkably bad job. The remarkable thing about the conference was that our European allies did not find her irritating only because they found her completely irrelevant. The Government and the Labour party must realise that the nation's best long-term interests cannot be fulfilled without an increasingly integrated Europe which comes together politically, economically and socially.

The Prime Minister : The country's best long-term interests consist of keeping those who are in opposition there in perpetuity. At the intergovernmental conference which preceded the Single European Act, it was not necessary to have a treaty amendment to achieve the single market ; it could have been achieved without that. As the right hon. Gentleman may know, the Single European Act ensured that certain matters could be decided by majority vote for a limited purpose, whereas previously they were taken by unanimous vote. That change is not necessary to complete the single European market.

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Many of my collegues were prepared to agree to the social charter as a general declaration without any effect whatever. I was not prepared to put my name to a general declaration without being prepared to consider what flowed from it, much of which I wish to and shall oppose. The charter should not have been brought forward. It was outside some of the articles in the treaty of Rome and could have been used to gain extra competence for the European Commission. The position now is far better. Separate directives will have to be brought forward, each of which we shall consider in the usual way. On the European development bank, both the right hon. Gentleman and the right hon. Member for Islwyn (Mr. Kinnock) have got it wrong. The European development bank was agreed in principle in Paris, and it was announced then.

Mr. Michael Marshall (Arundel) : Will my right hon. Friend reflect on the opportunities arising in eastern Europe, through know-how funds, for both political and industrial exchanges? What further steps may be taken by our partners in Europe along those lines? Will she keep an open mind on extending the list beyond Poland and Hungary, to take in, for example, East Germany? Many of us believe that the position in Germany is not only a problem for West Germany.

The Prime Minister : Many EEC countries now have know-how funds to train people in Poland and Hungary who do not know what a market economy is like. We are giving training on how to achieve it. We have co-ordinated with one another through the mechanisms that I mentioned so that we do not overlap too far.

The general view on East Germany and Czechoslovakia is that when they have set up arrangements for true democracy and implemented an IMF agreement, if required, further aid will flow. We use much the same system and techniques as we used in Poland, although Poland was a special case. She needed a good deal of food right away and some management training. We saw to it that she received both. Other countries whose needs are not so urgent will need to set up a democratic structure, and we shall consider their financial position before we agree further aid.

Mr. Frank Cook (Stockton, North) : When discussing aspects of stability and security in the Community, did the Prime Minister refer to reports in the American publication, Defence Daily, which stated that President Bush had given his presidential approval to an Anglo-French co- production of a 400 km tactical air-to-surface missile, to be developed by British Aerospace and Thomson-CSF? Did she explain to her fellow heads of state why presidential approval was necessary for such an Anglo-French initiative? Why is it necessary now that the INF agreement has been made?

The Prime Minister : This was not a NATO meeting, but a European Community meeting. The EEC, or European Community, is not a defence organisation, as the hon. Gentleman knows. NATO is a defence organisation.

Mr. Ian Taylor (Esher) : I congratulate my right hon. Friend on her part in the positive tone of the Strasbourg conference. Will she build on that by ensuring that all our Community partners understand that we have a commitment to economic and monetary union, as they do, but that we prefer the evolutionary approach which will

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better safeguard the interests of national Parliaments and ensure that the eventual economic and monetary union is more stable? Will she also welcome today's announcement that the French will abolish the remnants of their exchange controls from 1 January? Is that not significant progress in achieving the conditions for the entry of sterling into the exchange rate mechanism which were laid down at Madrid?

The Prime Minister : I agree with my hon. Friend that the evolutionary approach is much better and more effective when considering how to move towards economic and monetary union. That approach has been praised by several central bank governors and it will eventually find more favour. It is steadier and more sure than the other approach. The whole time it maintains national democratic accountability, and we are not the only nation that wants that accountability to remain.

France has undertaken to abolish her exchange controls by 1 July, but I believe that she will bring the date forward. Italy will wait until July to abolish hers. That will give her more problems, but I hope that she will be able to abolish them successfully. Spain and other nations will abolish exchange controls in 1992. One expects them to take longer because they joined later. We have agreed that we shall join the exchange rate mechanism when the conditions are fulfilled. Those conditions were set out at Madrid and have not changed since. No one is suggesting that we should dot every "i" and cross every "t" before we consider when the time is right to join.

Mr. Peter Shore (Bethnal Green and Stepney) : The House will welcome what the Strasbourg communique had to say about the various measures of aid for eastern Europe--clearly greatly needed. The House will also welcome what the Prime Minister said about stages 2 and 3 of the Delors report remaining unacceptable to the Government and all parts of this House. Unfortunately, however, the intergovernmental conference is to meet before the end of 1990 with the purpose of drawing up amendments to the treaty to introduce stages 2 and 3 of Delors. The implications of those decisions for Britain's economic independence and for the powers of this Parliament are enormous. Would it not be right for the Prime Minister now to consider setting up a Select Committee of this House to examine the full political, constitutional and economic implications of stages 2 and 3 so that when the decision comes to be taken it can be taken in the full knowledge of the implications for this country and its Parliament and not in ignorance?

The Prime Minister : I shall be only too delighted to receive as much technical advice as possible on stages 2 and 3 of Delors. The intergovernmental conference has been delayed until the end of next year, so that there can be full and adequate preparation before we go into the conference. I would have preferred it not to have been set up so quickly because we shall have started stage 1 of Delors only in July 1990 and it will not be completed until well into 1993. It will be the biggest change that the Community has had and we shall not know the magnitude of that change. It would have been much better to have been aware of that before an intergovernmental conference to consider treaty changes was set up. Others wanted to consider that earlier, so we have tried to give time for preparation to see what the options will be.

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Stages 2 and 3 will not be considered alone ; our paper will also be considered. It is obvious from the discussions that we had in Strasbourg that more and more people are becoming worried about democratic accountability. They would not find accountability to the European Parliament sufficient. There must be democratic accountability to national Parliaments. Select Committees are not a matter for me, but we shall make as many studies as we can of the full consequences of stages 2 and 3 of the Delors report.

Mr. Jonathan Aitken (Thanet, South) : While welcoming my right hon. Friend's new style of Talleyrand softness and subtlety in her approach to the EEC, may I ask her to use it to explain an apparent inconsistency between two apparently incompatible parts of the Strasbourg communique ? The whole House will welcome paragraph 3(3) which she read out and which appears to suggest that the national Parliaments of member states will have a key slice of democratic control of decisions over economic and monetary union. However, the next paragraph of the communique , although written in confusing Eurospeak, appears to suggest that the European Parliament will also get democratic control and more powers over the EMU process. If there is a clash between these Parliaments, will my right hon. Friend say clearly whose side she is on?

The Prime Minister : My hon. Friend hardly needs to inquire. As he knows, under the present system decisions are taken by the Council of Ministers, with Ministers from each of the 12 countries in the relevant council. Each Minister is fully and democratically accountable to his own Parliament, as I am accountable now. Perhaps the other Ministers do not have such a positive or detailed reporting system as we have. Therefore, they do not fully realise now central economic, monetary and budgetary control is to the life of our Parliament. We stand very much for national democratic

accountability. That is much more detailed and much more effective than any accountability through the European Parliament.

Mr. Alex Salmond (Banff and Buchan) : Following the European summit, will the Prime Minister tell us whether the change in emphasis in her position on the exchange rate mechanism, which was detected by the Financial Times and other newspapers, is correct? Will she tell the House the exact nature of this U-turn and whether it might pave the way for the return of her former Chancellor to high office in her Administration?

The Prime Minister : Our position about joining the exchange rate mechanism has not changed in spite of what the hon. Gentleman says. It was laid down at Madrid in more detail than hitherto and there has been no change since then. I am sorry to disappoint the hon. Gentleman.

Sir Peter Hordern (Horsham) : Does my right hon. Friend agree that the free movement of people, goods and services and investment from East to West and from West to East will do more good for the people of Europe and their prosperity than any talk of political union in western Europe?

The Prime Minister : Yes. The aim of a single market by 1992 is the outward and visible sign of closer integration of the European Community. That has made many other countries realise that the nations of Europe are drawing closer together for economic purposes. That will be a considerable force in the world and should give much

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greater opportunities for employment in this country and for prosperity in general. It will be very good for all our peoples.

Mr. Ted Rowlands (Merthyr Tydfil and Rhymney) : During the meeting, did the Prime Minister notify colleagues that there was likely to be meeting of the four powers to discuss developments in East and West Berlin? If so, could she tell us why she thinks that an occupying organisation set up in 1945 is the appropriate vehicle for dealing with the issues of East and West Germany and East and West Berlin? Is it not anachronistic and insulting to pretend that we can promote and foster certain notions while excluding East and West Germans themselves?

The Prime Minister : No. Berlin is under four-power administration and it seems appropriate that the ambassadors of the four powers should meet at this time. We have forces there, and there were obviously many things to consider.

Mr. Hugh Dykes (Harrow, East) : Will my right hon. Friend confirm that, despite a fickle and volatile British press, she was able to contribute fully to the harmony, cohesion and unity of the Strasbourg summit, thereby underlining once again that the Conservative party and Conservative Government constitute the only true European force of progress in this country?

Does my right hon. Friend agree that Jacques Delors has always affirmed that, although he was asked to produce a detailed blueprint with his committee, all stages are negotiable, and that that depends on the continuing unity and harmony of the member states? Finally, may I ask whether the Community trade mark office was discussed? I gather that there is still a chance that Britain will receive that institution, and also that the location may be reconsidered and will not necessarily be in central London.

The Prime Minister : As my hon. Friend knows, a number of matters involving European headquarters must be considered. We did not discuss where those headquarters should be ; that might have been a rather difficult discussion, as each of us knows precisely what we want.

The Delors report was not worked out very well in stages 2 and 3. It was very sketchy. I believe that when it has been worked out more carefully many more people will recoil from it.

Ms. Joyce Quin (Gateshead, East) : The Prime Minister's opposition to the social charter is apparently based on the claim that it would undermine industry's competitiveness. How, then, does she explain the fact that in West Germany, where its provisions are largely in force and where wages are higher than they are in Britain,

industry--particularly manufacturing industry--is able to compete so successfully?

The Prime Minister : A good deal of the social charter was intended to impose some of Germany's very high costs on other countries that could not possibly afford them. Germany says that for inward investment to go to other lower-cost countries is a form of social dumping, but we do not accept that at all, and we consider it a pretty non-communautaire phrase.

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Accepting the social charter would mean accepting the imposition of many higher costs on countries that could not afford them. We do not have minimum wages in this country ; we have the different and more effective concept of minimum incomes, which we find suits industry, our costs and our competitiveness better.

Mr. William Powell (Corby) : Does my right hon. Friend realise how welcome was Mr. Delors' statement that Great Britain and Denmark are making the most progress towards enacting the 1992 legislation into their domestic law? Is she aware that many people in this country are worried that equally fast progress is not being made in the other Community countries, and will she ensure that the British Government make every possible representation to all those countries to ensure that they keep up with the pace set by this country and Denmark?

The Prime Minister : I am grateful to my hon. Friend. We have always tried to implement the directives as fast as possible, and so has Denmark ; and the Netherlands are not far behind. I take my hon. Friend's point : we shall point out that the directives are there to be implemented, and that until they are implemented there will, in effect, be no single market.

Several Hon. Members rose --

Mr. Speaker : Order. I must have regard to the subsequent business. We have an important statement after this, and then an important debate. I will allow three more questions from each side, and then we must move on.

Mr. Dick Douglas (Dunfermline, West) : Will the Prime Minister help the House by trying to clarify the position on stability and security, which, apparently, she, Mr. Gorbachev and the Community all want? How does she react to what is happening in the countries of eastern Europe--Hungary, Czechoslovakia and East Germany, to say nothing of Lithuania and Estonia-- which are producing all the instability?

The Prime Minister : As the hon. Gentleman has pointed out, considerable change is taking place in eastern Europe, and it is better to accommodate change--when it is change from Communism to a democratic system --by maintaining NATO and the Warsaw pact in position. That is the way in which we negotiate the reduction of conventional weapons--and we are at present negotiating with START, the strategic arms reduction talks, and with talks on reducing chemical weapons--and the way in which we adhere to the Helsinki Final Act.

That agreement, signed by 34 countries, contains two provisions concerning borders. The first is that no party must violate another's borders ; the second is that any change in borders must be made by peaceful agreement. Those are the two frameworks in which we shall keep stability and security.

Mr. Nigel Forman (Carshalton and Wallington) : Is my right hon. Friend aware that her cautionary words, both today in the House and at the Strasbourg summit, about the delicacy of the evolving German problem will be warmly welcomed and that it is very likely that, in the fullness of time, her view that we should adopt an evolutionary approach within the existing framework of security arrangements will prove to be far more correct

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and far more safe for the Community and the world than the view of those who seek to go headlong into it on a wave of popular euphoria?

The Prime Minister : I am grateful to my hon. Friend. The German question raises many emotions. It is far better to deal with it in the way that we suggest at Strasbourg and in NATO ;-- against the background of existing alliances and agreements that we have all signed.

Mr. Bernie Grant (Tottenham) : As for the European development bank and the moneys that will flow into eastern Europe, can the Prime Minister guarantee that no money will be taken away from black and Third world countries and given to eastern Europe?

The Prime Minister : We have just signed a new Lome agreement.

Mr. Grant : That was not the question.

The Prime Minister : A number of people made the point that the hon. Gentleman has just made. It is not our purpose to take away from countries the help that they receive through bilateral aid programmes, the World Bank and Lome . The majority holding in the European development bank will be by European Community countries, with other countries providing facilities so that there are sufficient funds to help eastern Europe--but not at the expense of others.

Mr. Ian Stewart (Hertfordshire, North) : Does my right hon. Friend accept that her robust but judicious contribution at Strasbourg is very welcome on this side of the House, particularly the fact that she has demonstrated once again that the British Government are more interested in Euro-do than Euro-speak?

As for the contentious matter of the European monetary system, did my right hon. Friend have an opportunity to point out to other Council members that, whatever decisions might be taken in future about sterling, it would not be practicable for the pound to enter the exchange rate mechanism until inflation and interest rates are substantially lower than they are now?

The Prime Minister : My right hon. Friend makes his points very well indeed. I agree with him that we have to get inflation down before we can enter the exchange rate mechanism. That was one of the conditions that we laid down. I agree very much with my right hon. Friend that when it comes to getting things done we tend to lead. We have done less of the talking and more of the acting than others.

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Mr. Nigel Spearing (Newham, South) : The Prime Minister properly emphasised the importance of information when she replied to my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore). Is she able to say which extant Government document best sets out the implications of economic and monetary union for the United Kingdom? As for democratic accountability, can she tell us when the House approved a resolution, the words of which specifically approved the principle that this country should adhere to economic and monetary union?

The Prime Minister : Progressive realisation of economic and monetary union was agreed by the Community in 1972 and therefore was accepted by us when we acceded to the Community in 1973.

Sir Ian Lloyd (Havant) : If the Prime Minister accepts Grotius's classic definition of sovereignty as being that area of the national world that cannot be obstructed by others, are there not an increasing number of areas--telecommunications, the environment, medical matters and many others --in which the national will cannot be fully exercised? Does that not lie at the heart of the many important papers that have been published by the European Parliament, dealing with what is described as a democratic deficit? Does the Prime Minister believe that that deficit can best be addressed by bringing back sovereignty to national Parliaments that cannot exercise it, or taking it forward to the European Parliament which, if it is not in a position to exercise it, must surely within a reasonable time be brought precisely to such a position?

The Prime Minister : My hon. Friend knows that when one enters into international treaties one voluntarily gives up a certain part of one's sovereignty because one is perhaps pooling it with others. That is the way that it has to be done in a multinational world. There has to be some pooling of sovereignty and standards over the environment and telecommunications. It is a far cry from doing that to pooling many other things that are best dealt with locally and in national Parliaments. We need to get the balance right.

We have excellent democratic accountability in this House. I sometimes think that other Prime Ministers would profit from having a similar system. I do not think that it will be possible to achieve the intimacy and detailed debate that we get in this House in the European Parliament because of the many languages involved, and because of its layout. Therefore, we shall not get sufficient democratic accountability there.

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Vietnamese Boat People

4.15 pm

The Secretary of State for Foreign and Commonwealth Affairs (Mr. Douglas Hurd) : With permission, Mr. Speaker, I should like to make statement on the repatriation of Vietnamese boat people from Hong Kong.

This morning, Hong Kong time, a group of 51 boat people were returned to Vietnam by aircraft from Hong Kong. All 51 had been screened under a thorough process agreed with the United Nations High Commissioner for Refugees and they did not qualify for refugee status under the terms of the 1951 United Nations convention on refugees and the 1967 protocol. The repatriation was conducted in line with procedures used worldwide to remove people refused permission to remain in a territory. No firearms were carried. No force was used. At the international conference on Indo-Chinese refugees in Geneva in June, the international community agreed that refugees would be resettled in other countries, and that those who did not qualify as refugees would not be resettled and should return to Vietnam. I stress that the criteria for establishing who qualifies as a refugee are not decided by Britain, or by the Hong Kong authorities alone, but by agreement with the UNHCR.

We, and the UNHCR, have tried, as the House knows, to encourage the boat people to return to Vietnam voluntarily. In the past year more than 600 have done so, but, during the same period, more than 30,000 have arrived in Hong Kong. In all there are nearly 57,000 boat people in Hong Kong, most of whom are not likely to qualify as refugees. The Vietnamese have recently agreed to accept volunteers back at a faster rate, but it is clear that voluntary returns alone will not match the scale of the problem. The majority of volunteers so far have come from the people not yet screened ; of those already screened and found not to qualify as refugees, fewer than 1 per cent. are volunteering to return.

We have therefore had to begin repatriating those who are not refugees and who do not volunteer. The international community have said that they will not resettle those people. If they were not returned to Vietnam, they would therefore face the prospect of indefinite detention in camps in Hong Kong. There is another matter of great importance--unless it is made clear to people in Vietnam that those who do not qualify as refugees will be returned to Vietnam, Hong Kong faces the prospect of tens of thousands more arrivals in 1990. That is simply not an acceptable prospect.

The arrangements for repatriation have, like those for voluntary returns, been agreed in negotiation with the Vietnamese Government. Vietnam has told us that those who are repatriated will not be punished for leaving. We have given aid to be used to help those being repatriated to settle back into Vietnam.

As the House would expect I have paid attention to monitoring to ensure that those who return are in no way ill treated. Our embassy in Hanoi will be monitoring their conditions both in the transit camp in Hanoi to which they immediately return, and in the villages to which they are returned, as it has been doing for volunteers. We hope that the UNHCR will agree to help, as he now helps people returning to Laos from Thailand. We would welcome the co-operation of non-governmental organisations.

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