House of Commons Hansard Debates for 31 Jan 1990

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committee report is vital. Therefore, when I went to Brussels last week I was alarmed at the derision in which everyone in Brussels holds the extraordinary Treasury plan to accomplish economic and monetary union by a process of 10 competing currencies. As we move to the intergovernmental conference in December, it is clear to most of us who observe the scene that, if by that stage Britain has not joined the European exchange rate mechanism, or at least stated a date on which it intends to join, we may wave goodbye to any influence by the Government in the work of the IGC over the next year.

The irony is that the Treasury scheme, the spatchcock arrangement of 10 competing currencies, is no more than an extension of the exchange rate mechanism that the Government have so far refused to join. The double irony is that that system, rather than the economic and monetary union proposed by Delors, would lead to the very domination of the deutschmark which the Government say they are most afraid of.

My party does not believe every word of the Delors report. We take the position that there is a need for monetary union in Europe but agree along with every other nation except Britain, and most of the private views expressed in the Commission as well, that there is no case for the economic straitjacket which the Delors report proposes. But that is a matter of argument about the detail, not the principle. At all events, we shall be left behind in the discussion. There can be no question about the fact that we accept the need for monetary union.

Central to that issue is the question of a central bank. Again, neither I nor my party has any difficulty in accepting the concept of a central bank in Europe, constructed along approximately the same lines as the Bundesbank. The United Kingdom is isolated on that issue too : we know that both the Tory and the Labour parties are opposed to the idea of a central bank. Why? Because they will do anything to maintain in their own hands the power to fiddle the economy before an election so as to win votes. It was the Prime Minister's capacity to debauch the British economy before the last election which has been the fundamental cause of many of our economic problems today. In making that statement about the importance of a central bank, I am not alone, because it was the view expressed in the House by the last Chancellor of the Exchequer. He believes, as I do, that we have nothing to fear from the concept of a central bank and a good deal to gain if it gets politicians' sticky hands off the capacity to distort the economy just before an election to win votes, leaving the country to pay the price later.

Another former Minister, a former Secretary of State for Trade and Industry, Sir Leon Brittan, said in a speech in Reading on 19 January that he believed that European monetary union and the central bank, which is at the heart of that proposal, provide

"a rock of low inflation and sound money at the heart of Europe." When it comes to the choice between low inflation and sound money that the Prime Minister is always telling us about, we note that, if there is any possibility of her power being taken away, that power must come first and the proper management of inflation and the creation of a sound economy come second.

The truth is that this spurious concept of economic sovereignty is at best specious and anachronistic, and only

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a crude front for the Government to express their anti-European ideas and for the Labour party to express its equally isolated and out-of-date policy.

Labour is now telling us that it is in favour of the exchange rate mechanism and wants to move towards it. Labour has done a good job of persuading the British people that it has a more positive attitude to Europe, but its conditions for joining the ERM vary only slightly from those of the Government. The Government argue that we cannot join the ERM until inflation is down to something like West Germany's level, while Labour argues that we must first ask West Germany to inflate its economy and risk its inflation increasing to our level. The truth of the matter is that there is no difference between the two--they are both clever and rather erudite ways of saying no. There is a severe danger that Britain will be left behind and isolated in the process of monetary union. There is a will among the 11 other nations of Europe--though whether it will endure for a whole year's intergovernmental conferences is another matter--to go ahead without Britain. The establishment of monetary union will raise the whole question of a democratic deficit, which my party is committed to tackling by increasing the established powers of the European Parliament.

As to the social charter, it is interesting that Labour has now found something with which it is prepared to agree. I often think that Labour only decided that it was in favour of Europe when it realised that the Government were against it. Nevertheless, the Opposition now ascribe at least to this aspect of the European concept, perhaps in the hope that they will be able to get legislation through Brussels that they would never get through this House.

I think that they have the wrong end of the stick, because the social charter, or plan for action, is based only on broad principles. I would like to see the social charter developed into a citizen's charter. Our nation would face considerable danger if we allowed the establishment in Europe to operate the kind of corporate statism that ran Britain in the 1960s and 1970s. It is a Government's job to ensure a quality of delivery to the citizen. The social charter should be about defining the citizens' basic entitlements under that system, not be concerned with handing down blueprints for every individual country to implement.

We must not allow the social charter to lead us back to the bad old days of the corporate states. We should approach the task through a series of definitions, broad principles and entitlements, and leave national Governments with the flexibility to enact them.

Mr. Robert N. Wareing (Liverpool, West Derby) : Many of my right hon. and hon. Friends agree with some of the right hon. Gentleman's propositions, such as those concerning the social charter and the exchange rate mechanism. There had been divisions in all the major political parties over the years over our involvement in Europe. However, the right hon. Gentleman's speech is otherwise disappointing. Huge changes are occurring on our continent that require a visionary approach for the future, not a look back to the past. The right hon. Gentleman's petty party politicking speech does him a disservice and gives no honour to this House, which

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should look forward to the new Europe that is now being born--not argue and be divisive about the events of the past.

Mr. Ashdown : The hon. Gentleman may recall that I began my speech by emphasising that one cannot approach the problems of eastern Europe unless one sets them in the context of developing integration in western Europe. The hon. Gentleman brings me to the related issues of eastern Europe. Incidentally, I hope that we shall soon start to call it central Europe.

The extraordinary events of recent months, which unleashed the power of the free citizen and overturned even the most brutal tyrannies and dictatorships of eastern Europe, place upon western Europe a necessity to continue with its own integration. I shall tell the hon. Member for Liverpool, West Derby (Mr. Wareing) why that is so. People such as the Prime Minister, who argue that Britain should backtrack and undo the whole process of integration and convergence in western Europe, are unwise and propose a policy that is positively dangerous. No other voice in eastern or western Europe expresses the view that is taken by the Prime Minister--and, by implication, by Labour--that the right thing to do now is to halt the process of integration.

Every other voice in the established capitals of western Europe and the new voices of eastern Europe believes that western Europe's growing integration is essential in tackling the problems ahead. The argument as to whether we should widen or deepen the European Community is nonsense. The two are not contradictory but complementary. It is only within the framework of a more closely integrated western Europe that we shall be able to overcome some of the problems unleashed in eastern Europe.

Further, in the fact of the collapsing economies of the emerging democracies in central Europe and the rocketing inflation that they face, and in the light of the power vacuums being created as the eastern European empire recedes, it takes a mind extraordinarily ignorant of history and peculiarly steeped in the illusions of British power to propose a return to a variation of the competing nationalism that afflicted Europe in the 1930s.

Central Europe is escaping from Socialism, but it is not aspiring to Conservatism. Certainly it is not aspiring to Thatcherism and to the new materialism that it breeds. I have not heard on the lips of a single person who has come through the Berlin Wall from East Germany the word "Conservative". The words I hear time and time again are "liberal" and "democracy". Those are the words on the lips of the people now seeking freedom, who want a system of politics that is built on human and political rights, the value of community, and a properly representative Government. As they call for those things, so will our nation have to answer a similar call. We must look to our own reforms to deliver the same.

Mr. Alex Salmond (Banff and Buchan) : As I understand the Liberal Democrats' defence policy, if the right hon. Gentleman's party inherited Trident as a fait accompli, it would retain it to use in nuclear disarmament bargaining. If that is so, which of the central European cities would the Liberal Democrats target with Trident? Will they include President Haval's Prague or Warsaw--or Moscow, given that Boris Yeltsin achieved such a convincing majority in the recent elections there? The right

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hon. Gentleman's views on Trident have undergone a process of development, but I think that they have developed in the wrong direction.

Mr. Ashdown : I shall refer later to matters of security. How can we assist the process of reform? We must acknowledge that along with the huge opportunities it presents come immense dangers. It will require great imagination, a good deal of forward thinking, and enormous sensitivity to achieve stability out of profound change. It is important to acknowledge also that each of the emerging central European democracies is different, and that none of them can be treated the same.

The model that we should look to is that of a western Europe deepening its unity--strengthening its integration--to create an increasingly powerful magnetic pull, drawing the emerging democracies of central Europe--each adopting its own pace and a path of its own choosing--to a destiny that brings them much closer to the European Community. Some will be part of the Community ; some may stay separate from it for some time to come.

This is a time for pragmatism. It is not a time for grand designs or for the handing down of blueprints, but a time at which we should use all the organisations available to us, and all the possible routes--trading agreements, articles of association and perhaps the establishment of a model such as that used by the European Free Trade Association--to bring about a closer relationship with the Community. Perhaps the European Council in Strasbourg put it best when it stated that the Community's job was to become

"the cornerstone of a new European architecture, and in its will to openness a mooring for a future European equilibrium".

We in western Europe face a tripartite task. The first part is the provision of short-term aid--and I am bound to say that both the Government and the EEC have acted with commendable urgency in responding to a pressing need. The second is the development of long-term assistance to increase the economic prosperity of the nations concerned : that will involve key elements such as lines of credit and managerial assistance, of which both the Government and the EEC seem well aware. The task is so great, and the sums involved so massive, that Governments should not be the sole providers ; we must try to create a climate in which private industry will begin to invest.

We shall need a broad framework in the West within which that can take place, along with democratic economic stability in the East. The third part of the task is to assist democratisation, which--at first sight, and a very short time after its initiation--seems to be developing effectively.

I turn now to security matters. The peace of Europe in the past 40 years has been assured by two huge standing armies--armed to the nuclear teeth, eyeball to eyeball, on the brink of war and daring each other to flinch. All that appears to be over, thank God : we should now start to work with some urgency towards establishing a new means of securing the peace of what will be a Europe with a new shape.

We must accept the likelihood that that new shape, when it finally emerges, may well not include the stationing of United States and Soviet troops on what is currently described as the territory of Europe east and west. The task before us is nothing less than the rebuilding of the

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edifice of collective and common security in Europe, and the setting up of what may come to be known as a European regional security agreement.

Let me emphasise that the process should not--must not--include the precipitate dismantling of either NATO or, in so far as we have any influence over events, the Warsaw pact. This is not a time for unilateral action, but a time for working in concert with our European partners. I believe that--at least during the transitional phase, which may last for some time--the structure of NATO and, in so far as it holds together, that of the Warsaw pact will be vital. First, they will form the medium through which we execute the agreements on multilateral disarmament that will be the precursors of the new shape of European security. Secondly, they will provide the one fixed point in an otherwise fast-moving world, from which we can develop economic and political integration with the nations of the East. Without that security backdrop, the process would be much more difficult.

Thirdly, the two structures will provide an essential superstructure behind which we shall have to construct the new European security arrangements. As I have said, the precipitate dismantling of that superstructure would destabilise an already difficult and delicate process.

Dr. David Owen (Plymouth, Devonport) : Is the right hon. Gentleman really suggesting that the Hungarians, who were invaded by Soviet troops in 1956, and the Czechoslovakians, who were invaded by Soviet troops in 1968, are not right to ask for those troops to be withdrawn? Does it not constitute a natural expression of the public rejection of Communist ideology--particularly Soviet Communist ideology--for the symbols of that ideology to be withdrawn? In those circumstances, of course the Warsaw pact will change.

Mr. Ashdown : I am certainly not saying that. As the right hon. Gentleman knows perfectly well, those two nations have asked the Warsaw pact troops to withdraw, and they are doing so. I did not say that they should stay. I said that the structure of NATO and--in so far as we could assist the position--that of the Warsaw pact would, in the interim, be best maintained rather than precipitately dismantled.

Mr. Foulkes : Why?

Mr. Ashdown : There are three reasons. First, they will provide the means and the mechanism for us to proceed with disarmament ; secondly, they will assist as a security backdrop for the political and economic steps that must be taken ; and, thirdly, they will provide the framework on which we can erect new structures.

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

Mr. Ashdown : I hope that the hon. Gentleman will forgive me if I do not. I have been speaking for some time.

I do not believe that the creation of the new security framework can be taken at as casual a pace as we might wish. Behind that process is the insistent imperative of German reunification. One of the tragedies of the current position is the fact that the European and German clocks are ticking at a different pace and at different times, a difficult situation to which we must, however, react. Mr. Gorbachev has told us--he said it again yesterday--that German reunification will arrive, and that there is

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nothing that we can or should do to stop it. The Soviet Union clearly thinks that reunification is all right, provided that the new Germany is neutral. But a neutral Germany would destroy the cohesion of NATO. All that emphasises the urgency of the conference on security and co-operation in Europe, particularly basket 1. We shall need not only to progress on disarmament, but to begin to build the new European security structure. As a diplomat who was involved in the Helsinki CSCE process, let me make a plea for the voice of Europe to be co-ordinated and clear : it certainly was not on the last occasion.

I have discussed a number of issues in my speech. I hope that today's debate will be wide enough to encompass both what Britain should do to establish its part in western Europe and how, through western Europe, it can play its part in developments in the East. The new democratic Europe that is now emerging, East and West, presents the key framework within which our nation must build its future. Europe provides the litmus test that will identify Britain's political parties as parties of the future or of the past. For Labour and for Tories Europe is the crucial fault line, for both parties are equally infected with notions of post-imperial nationalism ; each is impaled on outdated ideas of sovereignty, and each is incapable of rising to the challenge of a new democratic Europe that is now altering the shape of world power before our very eyes.

Liberal Democrats recognise that our future in Britain is inextricably bound up in the new democratic Europe. We perceive that this is an historic moment for all of us, and we are determined that Britain should be part of the tide that is now sweeping Europe, rather than being left behind in a stagnant backwater. We understand that Europe must be Britain's destiny : that is why I commend the motion to the House.

4.59 pm

The Minister of State, Foreign and Commonwealth Office (Mr. Francis Maude) : Let me begin by dealing with the point of order raised by the hon. Member for Bradford, South (Mr. Cryer) about the European Community documents which were tagged to the motion for today's debate. I should make it clear that it was an initiative by the European Legislation Scrutiny Committee to which the Social and Liberal Democrats acquiesced and it in no way replaces the need for those documents to be properly debated in the fullness of time. It was not a Government initiative.

The right hon. Member for Yeovil (Mr. Ashdown), whose speech occupied the past 45 minutes or so, expressed a little surprise that no amendment was put down by the Government or by the official Opposition. It should be no surprise that the Government have no quarrel with the motion and welcome the chance to debate it. It should be no surprise that we welcome recent progress towards liberal democracy in eastern and central Europe and that we endorse the progress towards integration of the European Community because we are deeply involved in shaping that progress. All our actions show that we recognise that our future depends on "playing a full and wholehearted role in the development of the new democratic Europe." The right hon. Gentleman seems to believe that with fiendish cunning he has devised a motion that will expose

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all sorts of deep divisions in all sorts of parties. He could just as well have put down a motion saying that the House believes in motherhood and apple pie. The motion is about as challenging and probing as the "doughnut" with which he surrounded himself when he made his speech.

It is rather disappointing that in debating what are really quite great matters the right hon. Gentleman spent so much of his speech seeking to exploit narrow partisan domestic political issues. Perhaps it is inevitable that when we speak of recent events in eastern Europe we all seek fresher and ever more vivid words. We all strive against the certainty that our rhetoric cannot reach the level of the events that we have watched. After all, we have witnessed the 1989 revolution which was as profound and decisive as those of 1789 and 1848. The revolution has been mostly peaceful but sometimes bloody, driven throughout by the courage and passion of millions of our fellow Europeans who were unbowed by decades of tyranny and whose spirit survived the slow poison of the unconfined power of the state. It is wholly proper that the House of Commons should honour those who have fought for the freedoms that for us are routine. After all, the House was established so that the state should submit itself to the same rule of law that governs our people.

The epic phase of the revolution is probably now complete. It has been glorious and it has brought forth its heroes, but it was only the beginning. Democracy cannot be created overnight. We are only now beginning to accept the difficulties of running free elections when none have been held for decades ; where democracy is only a folk memory--tenaciously held but not easily realised. No one believes that democracy will be entrenched as result of one free election. The world will be looking for the full recognition of human rights protected by the rule of law. The rule of law is also essential for economic freedom to develop precisely the market approach which each of those countries has espoused and there is so much to do. The work has been started but it cannot be completed quickly.

What is needed in eastern Europe today is no less than the recreation of civil society. Marx predicted the withering away of the state, but Communism sought to achieve the exact opposite--the withering away of society and the total domination of the state. Now eastern Europe has rejected Communism and wants capitalist structures, and the economic success and prosperity of the West has been a beacon. However, a market economy goes hand in hand with genuine democracy. Every day eastern Europe tells us that we cannot have one without the other and that political reform needs to be sustained by real economic change.

In the Soviet Union perestroika has demanded political change. Fundamental to that will be giving free rein to the laws of supply and demand so that prices are set not by bureaucrats but by customers paying for goods and services that can be supplied to them. Enabling that to happen in a modern market economy requires a sophisticated apparatus. A legal framework must give investors the confidence to invest. Businesses need to understand accounts and there must be real banks, operating on commercial, not political, criteria. It may not sound popular, but if they want the rule of law, they have to have lawyers. In East Germany there are only 600. Any western country of equivalent size would have well over 20 times as many.

Of course, in the old East Germany there was no use for lawyers. The authoritarian state took the decisions, and no

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lawyer could help the citizen. A whole new generation of skilled people will be needed as part of the essential infrastructure of a free society. But where western societies have professional people serving the citizens, the old tyrannies had the Stasi serving the state. They do not need the Stasi any longer. They need solicitors, accountants and engineers. They need bankers and entrepreneurs with skill and flair. Free societies need their Petticoat lane, as well as their Speakers' corner. But the only markets in eastern Europe so far have been black markets and the gulfs between East and West are huge.

In West Germany, 7 per cent. of households have two telephones. In East Germany, only 7 per cent have a telephone at all, and those are party lines. To set out the size of the task is not to be depressing or to sound gloomy. The eastern European economies face an awesome task. But if their problems are to be solved, they must first be identified. By identifying the problems, we can judge how to respond.

Of course it is right that the Community should help, and it has done. Yet all the help that we give, as individual countries and together in the Community, cannot replace the determination to reform from within, and the determination to make those reforms endure. It is no kindness to suggest that our help can be a substitute for the iron determination that those countries will need.

There can be no reforms without pain, no learning without suffering, no progress without risk. We cannot do more than ease the pain, speed the learning process, hasten the progress and reduce the risk. We cannot do more but we can do that, and we are.

My right hon. Friend the Prime Minister said when she visited Poland in November 1988 that we would not stand idly by if the Poles embarked on real political and economic reform. Well, they did that ; and we have not been idle. The United Kingdom took the lead immediately in marshalling western support for Poland and subsequently for the other emerging democracies.

First, our own response to the changes has been quick and generous. We were first to provide technical assistance. In June last year we announced the establishment of a know-how fund for Poland. It has now been increased to £50 million. It is designed to provide the skills needed by the Poles to establish new political and economic structures. Other countries have now set up similar funds, but we pioneered the formula.

Mr. Paul Flynn (Newport, West) : Did the Minister see the rather distressing television programme on Channel 4 showing the know-how process in action in which a member of the Conservative party was instructing some aspiring Members of Parliament from Budapest in how to write a manifesto? The lesson was on the lines of copying the Government's 1987 manifesto in which they promised to maintain child benefit and pay it as now. The Conservative party member explained that such a promise could mean anything at all.

The know-how funds are certainly necessary, but I am rather alarmed at the suggestion that the best thing we can give newly-democratised countries is a plague of lawyers that would be as welcome as the biblical plague of boils. In arranging those know-how funds, should not we teach them the best of our democratic system rather than the sophisticated arts of cheating and lying?

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Mr. Maude : I am sorry that the hon. Gentleman feels that the best contribution he can make to the debate is of that quality. We are providing technical advice in banking, accountancy, commercial law and other essential areas. The Poles have sought our help in restructuring their aged industries. They have seen our success in breaking down state monopolies and creating competition through privatisation. While Opposition Members remain obstinately opposed, reformers in the East are embracing British Conservative ideas with enthusiasm and they recognise that that is an area in which we have terrific expertise from which they are keen to profit.

All that is targeted and practical help with real benefits for the Polish people. Grand gestures alone shorten no queues. We are also training Polish managers, and colliery managers from Poland will be visiting the United Kingdom to study the techniques used by British Coal. We may be able to help in those areas, but we are especially well-placed to help in those areas that are the life-blood of a market-based economic system and we have already committed more than £2 million to those efforts.

The Poles have also asked us for help in various non-economic areas. We are helping with local government reform, with the training of journalists and broadcasters and we are bringing members of the new generation of Polish politicians to this country for political seminars. I am grateful to those hon. Members who helped the organisers of those seminars to receive the first group of visitors last year. Thanks are due also to the BBC and to the British Council. Thanks to their skill we can help the Poles.

We have also set up a £25 million know-how fund for Hungary and the first of that money will be spent in April. Last week we announced that the know-how effort will be extended to cover East Germany, Czechoslovakia, Bulgaria and Romania. We have shown the Community the way.

At a very early stage in the progress, my right hon. Friend the Prime Minister urged the United States, Japan, West Germany, France and our other Community partners to respond equally quickly and generously to those east European countries that were firmly committed to reform. The Community responded magnificently and it has already provided aid, trade and lending assistance to Hungary and Poland and more is promised. We have played a major role in stimulating the many forms of unilateral help which Poland is now receiving.

Mr. Wareing : It is highly commendable that our Government should provide assistance in eastern Europe. However, I believe that we are miles behind the West Germans with regard to aid and trade assistance. The Minister has referred to the aid that is being offered. Does that come from the existing Overseas Development Administration budget? Are resources being diverted from the Third world or, as should be the case, are we increasing the percentage that we spend on overseas aid, perhaps up to the level it was under the last Labour Government? Are new resources being found to assist the Poles, the Czechs, East Germans and the other peoples in eastern Europe?

Mr. Maude : I can assure the hon. Gentleman that the money to which I have referred is extra money. It takes nothing from the existing aid budget. The hon. Gentleman referred to our efforts compared with efforts in other

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countries. This country was very quick and imaginative to find ways to provide immediate practical help for the emerging democracies, and we will continue to do that. The right hon. Member for Yeovil has recognised that.

Mr. Christopher Gill (Ludlow) : Will my hon. Friend give way?

Mr. Maude : No, I want to make progress if I may because we are already some way into the debate.

At the Paris summit of the Group of Seven last July, my right hon. Friend the Prime Minister pushed very vigorously the proposal that the European Commission should co-ordinate western assistance to Hungary and Poland. From that grew the Group of 24, the OECD countries, through which a huge amount of assistance is now being provided. That led to a $1 billion Polish stabilisation fund which was crucial to the structural reform of the Polish economy. Ours was the first contribution to that fund and it permitted the fund to come on line when it was needed.

We have urged that the G24 exercise should be extended so that the same co- ordinated western effort can support Bulgaria, Czechoslovakia, Romania and East Germany. We have looked ahead to how the Community should develop its relations with eastern Europe.

My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs has suggested to his ministerial colleagues in the Community the criteria for such an enhanced relationship. First, support should be appropriate to the level of practical and economic reform being put in place in each of those countries.

Secondly, political reform needs a political response and we should be ready for a full political dialogue with eastern Europe. Those countries should be encouraged to accede to the European convention on human rights. They should be welcomed as full members of the Council of Europe as soon as they qualify. They should develop links with national Parliaments and there could be a particular role for the European Parliament.

Thirdly, we should be open to a future relationship which neither leads to nor excludes membership of the Community. The Community has taken up the challenge magnificently.

Comparisons have been made with the Marshall plan. However, it is worth noting that the total aid so far pledged for each person in Poland and Hungary is already roughly that provided by the United States to western Europe under the Marshall plan. We will begin work on the new programme as soon as we practically can.

That the European Community responded quickly and generously is a measure of its growth and maturity. That the United Kingdom led its response is a measure of our central influence within the Community. Some have said that reform in eastern Europe poses a dilemma for the Community. Should it deepen or broaden itself? We see no such dilemma. It must do both.

There has already been integration apace. Quite properly, in December the Community set the completion of the single market as its top priority to make European union increasingly a reality for our people.

Mr. Gorst : In addition to the three criteria which my hon. Friend has already spelt out, should not there be a fourth criterion to take account of the possibility of a

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breakdown in any of those countries as a result of political or social unrest leading to riots or even civil war? Although no one wants that eventuality, it is not impossible. Will the aid which my hon. Friend has described continue to be pumped into those countries if there is a protracted civil war?

Mr. Maude : My hon. Friend raises a possibility which we all earnestly pray will not occur. It is possible to envisage circumstances in which that might happen, and if that occurred the donor countries would have to consider their actions. However, we have made it clear that our aid depends on proper political and economic reforms. The aid is not unconditional and it is intended to entrench the reforms. The circumstances which my hon. Friend postulates would be inconsistent with those reforms continuing. I was referring to the priority which the Community set unanimously in December in which it subscribed to the completion of the single market. We have seen measures to reduce air fares, to free travel, to increase consumer choice and to reduce costs. Those measures are genuinely intended to create a citizens' Europe to which the right hon. Member for Yeovil referred.

People increasingly see that our single market is being founded on the rejection of centralism, without bureaucracy or prescription. We are seeing a genuine people's Europe emerging, not a bureaucrat's or politician's Europe. We are seeing a single market which entrenches precisely those virtues of liberal markets that our neighbours in eastern Europe are seeking.

We are seeing the growth of political co-operation in the Community with no loss of sovereignty, but on an agreement that the 12 nation states should act in unison to make their common voice more powerful than individual voices could ever be. We are seeing the growth of economic and monetary integration to reduce costs, to help business and to take forward the integration of Europe. In all those profoundly important areas, Britain has led and we are showing the way forward.

I sometimes see headlines claiming, "Britain on the sidelines". However, they come only from people who do not know which way the Community is going. They come from people who do not know the touchline from the try line. If they were looking in the right direction, they would know that we are not on the sidelines--we are ahead and that is where we will stay.

The single market is following the pattern set jointly by ourselves and by the European Commission. It is being driven forward by our joint determination. Political co-operation was our initiative and we have been determined to see it succeed. In economic and monetary union, no country is more advanced than ours. No country has implemented more of stage I of the Delors report than we have. We are the only country to have put forward our own proposals for further development. Integration is proceeding apace, within the treaty of Rome.

The Single European Act provides great scope for further integration, involving no further transfer of sovereignty, and encroaching no further on this House's powers. Within our treaty as it stands, deepening of the Community there can be, and there should be. But there must be broadening, too. This is no time for introspection--no time to turn inward.

Our neighbours and our allies clamour to draw closer to the Community. We must respond to that. There must

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be an enhanced relationship with the countries of the European Free Trade Association. We want closer links, and faster. We have led the way. The Community must make agreements with each country in eastern Europe, to suit each case, and to reflect the different and changing needs of each.

On the "Europe beyond the Atlantic" to which the Prime Minister referred in her speech at Bruges, we should go forward with the proposals for the new transatlantic partnership that my right hon. Friend the Foreign Secretary set out last week.

There are those who urge that the Community should enlarge. That will not happen in the near future, nor does it need to. But, having seen an end to one division of Europe, the Community should not create another.

I do not think that the Community can insist for ever that Europe will be divided between its present 12 members and the others. If others wish to join and can meet the Community's demanding standards, we should not prevent them.

As I said at the start of the debate, it is significant that amendments have been tabled neither by Her Majesty's Government nor by Her Majesty's Opposition.

Mr. Ashdown : The Minister has not yet outlined the Government's policy on monetary union as proposed by the other 11 members. Will he spend a moment on that topic before concluding his speech?

Mr. Maude : The right hon. Gentleman was not present in November, when we had a full-day debate on economic and monetary union. Had he bothered to turn up and listened to the views of the House of Commons on this matter, he would have realised that, as is so often the case, he and his party are the only ones in step--everyone else in the House of Commons is out of step with him.

I will tell the right hon. Gentleman precisely our views. We can make huge progress towards economic and monetary union without changing the treaty and without the need for an intergovernmental conference by implementing stage I of the Delors report, on which we are moving forward faster than any other country in Europe. We have precisely set out our proposals for moving beyond that in the Treasury paper. I assume that the right hon. Gentleman has seen it and has understood it, although that is by no means certain. He will have seen that we have set out how progress can be made, not more slowly but more quickly than under the Delors report, and with no further encroachment on the powers of the House, towards which the right hon. Gentleman takes a remarkably cavalier view.

If I criticise the motion, it is only that it urges the Government to do what they are already doing and have been doing for some time. I believe that the present success of the European Community owes a great deal to our leadership, to our determination to secure proper reforms, and to our readiness to look out as well as in.

We have helped to fashion a Community that has been a beacon to eastern Europe. We are now leading its response to the changes that have swept through eastern Europe. The Europe that we aim at is a Europe of nations without nationalism--a Europe of diversity without division. We shall achieve it.

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Mr. George Foulkes (Carrick, Cumnock and Doon Valley) : The Labour party greatly welcomes the opportunity for the House of debate the European Community and eastern Europe. Apparently, it is the one subject on which the hon. Member for Rochdale (Sir C. Smith) and his leader agree. I must apologise to the hon. Member for Rochdale if I have missed that uniqueness.

Although the House discussed an almost identical topic just over a month ago, events in eastern Europe have moved and are moving so rapidly that much of what was said then has already been overtaken by those events.

I shall deal briefly with only two principal matters. As the Minister rightly said--for once I can agree with him--the membership of the exchange rate mechanism, the powers of the European Parliament, economic and monetary union, the social charter and many of the matters that were raised by the right hon. Member for Yeovil (Mr. Ashdown) have been discussed many times. The Government and the Opposition have clearly outlined their policies, but, unfortunately, the right hon. Member for Yeovil was not able to grace the House with his presence.

I shall deal with the three interrelated matters of the transition from Communism to democracy--the deepening and widening of the European Community, and German unity--and then I shall say a few words about defence implications.

Opposition Members unreservedly welcome the end of Communism, and the overthrow of tyrannies in eastern Europe, and the courage of people who have stood up against tyranny--particularly young people, students, intellectuals and others. Therefore, it is a travesty for some mischievous Conservative Members to try to equate Communism with democratic Socialism. Socialism and liberty are inseparable. It is an insult to democratic Socialists the world over who have fought and died for freedom and democracy to imply otherwise.

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