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steady work". The United Kingdom came first in one subject, or possibly first equal with Denmark, because we have listened to and applied more directives than any other country. That is good. What is not being said in this end-of-term report is that some of our classmates, particularly Italy, do not seem to take the subject seriously. Even when the directives are being passed, it seems to have precious little intention of implementing them. I do not say that Italy shows bad judgment in that. I much prefer the approach of "When in Rome do as the Romans do" to the most recent directives, such as the one that suggests that, when pheasants are shot, they should be in a refrigerator before they hit the ground.Over the past six months, our school activities have been disrupted by certain anti-social characters. Within a few weeks of the visit by Mr. Delors and other prominent socialists, no doubt at considerable public expense, to Dublin, with all their great designs and grand dreams, we have an about-turn and yet another awakening to their true position and their protectionist instincts, particularly those of the French about British beef. I imagine that most of my hon. Friends have no doubt that the French and West German Governments have contravened article 30 of the treaty of Rome. I hope that, in due course, we shall receive full compensation for our farmers, the meat trade and all who have an interest and who have made such horrendous financial losses in recent weeks, possibly of the order of £600,000 a week.
Although I congratulate my right hon. Friend the Minister of Agriculture, Fisheries and Food on the best possible deal that he could achieve in the circumstances, the problem arose because our partners were being unreasonable and were not acting in a communautaire fashion. A failure to reach agreement would have resulted in lengthy court action, and during that time there would have been no prospect of beef exports recommencing.
I was greatly reassured by the Bruges speech--the only sane voice on the European scene after some years. Equally, I was encouraged by the splendid speech of my right hon. Friend the Secretary of State for Trade and Industry only last week to the Bruges group--a group of seven sovereign nation states co-operating for mutual benefit. That definition is more or less the same as the words used by Mr. Yeltsin only last week to describe Russia. He said that he hoped that Russia could be a sovereign nation state --I am not sure how he worked that out--within a federation.
The hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) preached the merits of federalism. There is an irony in the fact that, as Mr. Yeltsin is suggesting that he would like a sovereign nation state within a federation, we, who have just that--I hope we still do--are going the other way, into a federal system. It will be interesting to see who is proved right.
The fact that we are passing directives and being communautaire means that the Conservative party is the true party of Europe. Others have tried to purloin the title of "good European," but they mean that they favour a particular type of Europe. The Conservative party has a vision of a particular type of Europe. It may not be the kind favoured by our critics, but our vision of Europe is positive and forward-looking. I have a vision of a free Europe, free from restrictions on trade and restrictions on the individual imposed by the state. By Europe, I mean the continent of Europe rather than some small part of it.
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Britain is at the forefront of pushing for freedom within the context of the European Community. The Government are committed to the principle of the European single market, not least because we have already passed so many of the provisions needed to implement it. Other member states give voice to the principle, but it strikes me that they are selective when it comes to practice.Freedom should not be the exclusive preserve of some small club of European states ; surely it should extend across the continent. We have always set our face against fortress Europe--the idea of freedom within insularity. The Conservative party has a clear guiding vision as to what should happen in Europe. That vision dictates a clear stance in relation to the developments now taking place in eastern Europe, which offer new opportunities.
For those who favour a bureaucratic, unified Europe of 12 states, the developments pose a particular dilemma. The developments in the Soviet Union and in eastern Europe are welcome, as they represent the collapse of Soviet hegemony and the fall of the iron curtain. Now that we see behind the curtain, we can also see the challenge ahead. For the countries of eastern Europe, the task of economic, political and social development is massive. The west must help, but in what form? Do we give charitable handouts or more substantive assistance to bring those countries within the economic framework of Europe? If the answer is to provide substantive assistance, how do we go about that?
For the little Europeans, those who want some integrated 124 member-state European Community, there is a problem. To exclude the east European states from membership of the Community encourages the perception as well as the actuality of a fortress Europe--a club of haves excluding the neighbouring have nots. My right hon. Friend the Secretary of State for Trade and Industry referred to pulling the drawbridge up on the ark. I am not too sure whether arks have drawbridges, but the analogy is right.
Associate membership of the Community would create a two-tier Europe--one of those who have and those who have not so much. To bring the eastern European states into membership of the EC would create a different Community that would not be recognisable to its founding fathers. Achieving economic integration would be a mammoth task and achieving political union would be impossible. That is
near-impossible in the context of the existing Community, even though it is the direction in which some want to push it. To widen the European Community to encompass eastern Europe would kill the notion stone dead.
Although there may have been an outbreak of democracy in eastern Europe, there has not been an outbreak of liberal democracy. Old prejudices and identities are coming to the fore. Some of the new regimes may prove as oppressive to certain minorities as their predecessors. They are different in type and national character from the nations of western Europe, and forcing them into some common Community will not overcome the national and ethnic tensions that will mark eastern Europe for some time.
The Community, even based on the Single European Act, cannot be extended to encompass the states of eastern Europe, but nor can it continue in its present form, because eastern Europe must be taken into account. What
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is the way forward? The European Commission must complete the single market and, once that is achieved, it must start to reach accommodations with its neighbours in the east, expanding the boundaries of the free market ever outward.In short, we must co-operate with our neighbours, but not integrate. As we expand the boundaries of the free market, so the nature of the European Community will change. The case for a bureaucratic, unified Community will be increasingly undermined and eventually destroyed. A bureaucratic Community in the heart of a free-market Europe will make no sense.
The way forward is a pan-European network based on co-operation, rather than a sub-European Community based on integration. That is the positive, visionary and European way forward. Those who hanker after a bureaucratic, integrated Community of 12 states are insular and time-bound Europeans. They no longer offer a vision of the future that encompasses what is truly Europe.
8.16 pm
Mr. Phillip Oppenheim (Amber Valley) : I am one of those Conservative Members who are delighted at the belated embrace of the European Community by Labour Members. We have heard few words against the EC during the debate. There is a danger, however, that late converts sometimes become fanatics. It is odd that the anti-European party of a few years ago now finds itself in the position of carping at the Government for not being European enough. If the Opposition are criticising the Government for not rushing headlong into monetary and political union, they should come clean with the electorate and say so. If they agree with the Government, however, they should stop carping and at least give the Government some support for their cautious policies.
Another area of confusion in the Opposition's policy on Europe relates to the social charter. Some Labour Members seem to suggest that we need the charter to compensate for the freer market after 1992. Surely the whole point of freer markets is that they enable an economy to work more efficiently and industry to be more productive. As a result, everyone benefits and living standards rise. Along with rising living standards, we can also, I hope, afford to pay for better standards at work.
In that respect, it is interesting that a recent report of the European Community suggests that the savings resulting from a totally free internal market--one that I suspect we shall never see--would be about £80 billion a year. That is a substantial gain. It is not just big business and financiers who stand to gain from the free market : it is everyone, because capital will work more efficiently, and productivity will rise, which will also allow wages to rise. The Opposition are also confused about the ERM. What they have signally failed to spell out is exactly what the conditions of entry of ERM would be under a Labour Government. I repeat the question that I asked the right hon. Member for Manchester, Gorton (Mr. Kaufman) earlier : how would a Labour Government, if one ever came to power, hope to maintain the parity of the pound in the ERM if that Government were cutting interest rates and at the same time massively increasing public spending? I do not see how that equation can work out.
I now move to Euro-fanatics in general. One of the problems with Euro- enthusiasts is that they tend to be too uncritical about what the EC, particularly the
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Commission, does. They equate everything done in Brussels with goodness and light. They do not give Britain its due credit for all the good things that it has done in Europe. Not only are we way ahead in many of the 1992 directives, but many of the countries that often pose as great champions of European unity and greater co-operation and integration are the ones that are most protectionist when it comes to their own internal political interests.The truck industry in Germany--
Mr. Gill : Is not the great political significance of last week's events, when our Agriculture Minister went to Brussels to fight our corner, that he brought Europe back from the brink of protectionism and defended the important principle of the free market?
Mr. Oppenheim : My hon. Friend unerringly goes to the nub of the issue. It would be nice to think that the Minister of Agriculture was defending the cause of the free market in Europe, and achieved a great victory. I think that it was one small but important victory towards securing a free market. However, as I develop my speech, it will be seen that the problem with Europe is that it is an extremely protectionist bloc of trading nations that not only protect their own national markets but are exclusive when it comes to the non-EC market. That is one of the biggest dangers with the EC at present. Germany poses as the champion of the European cause and of greater co-operation and integration. However, when it came to liberalising the truck market in Germany to allow French, Belgian and British trucks to go freely into Germany, the Germans clammed up. Now, the Germans are effectively levying a £4,000-a-year road tax on foreign road hauliers that they do not levy on their own. The result is that lorries that are on average 30 per cent. empty criss-cross the borders of Europe, adding to congestion and pollution.
France is often hailed by the Opposition as one of the great leaders in the European movement. However, when a British airline--British Midland--wanted to fly reasonably freely with lower fares into Paris, the French put up their barriers and we had a great fight. I am pleased that the Government won that fight to allow British Midland to fly in.
Another example is telecommunications. Every other member of the European Community operates nationalistic procurement policies and major trade barriers in their internal telecommunications markets. At least we in Britain have some liberalisation and freedom in our telecommunications markets. However, it is almost impossible for British manufacturers to sell telecommunications equipment to France, Germany, Italy, Belgium or the Netherlands.
The Euro-enthusiasts sometimes talks as though entry into the ERM will be a panacea for our industry. It is worth reminding them that during the 1980s Britain out-performed almost every other European Community country. Whereas in the 1960s and 1970s we lagged behind our European neighbours in manufacturing output and productivity, in the 1980s, when they were in the ERM and we were not, our manufacturing output expanded faster than that of France, Germany, Italy, Holland and Belgium, and our productivity in manufacturing expanded even faster.
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My key criticism of Euro-enthusiasts is that they are not critical enough of the faults of the European Community-- particularly the Commission. An advertisement in the Financial Times 14 February stated :"Dear Customer,
We want to tell you that we care and to thank you for the way, year after year, you have responded with your trust and respect. WE will do anything for you. That is why we have made service our number one corporate priority. No task is too small. We want to dedicate it to you, as we have dedicated everything to you, because we love you, our customers."
That sweet Valentine message was placed in the Financial Times by a Franco- Italian state-owned company called SGS Thomson. It was particularly nice of it to send such a Valentine message to its customers because three years of lobbying had just won that company major trade barriers against lower-cost, better-quality Japanese semiconductors, which means that European semiconductor users such as computer or consumer durable manufacturers have less choice of semiconductors and have to go to companies such as SGS Thomson for many of their requirements. Unfortunately, that is typical of the sort of protectionist barriers that the EC is, at an accelerating rate, raising against competition, particularly from Japan and eastern Asia.
I view the danger of the European Community turning into a protectionist bloc as one of the greatest perils that we face at present. It is moving towards the break-up of the world into three partly hostile trading blocs based round east Asia, north America and Europe. That contains some unpleasant echoes of the breaking up of the international trading order in the 1930s. In Europe, there has been a massive web of voluntary restraint agreements, quotas and tariffs, covering virtually everything imaginable. There is almost no product made outside the EC--from shoes to steel and from cars to ships--that is not covered by a web, a complex labyrinth, of trade restrictions.
The latest EC wheeze is to put an EC-wide "import quota" on cars from Japan after 1992. The supposedly liberal Commissioner, Andriessen, went to Tokyo recently and said that it was even proposed that cars made in Britain by Toyota, Nissan or Honda with an 80 per cent. EC content but made by a Japanese company, should be counted as Japanese. We do not say that cars that are made by American companies such as Ford and General Motors in Belgium, Spain, Germany or Britain are American, so why on earth should we say that cars made by a Japanese company in Britain are Japanese?
It is madness, but what lies behind it is heavy lobbying by the heavily protected European car industry--particularly companies such as Fiat and Renault. The net result of those efforts is that we shall almost certainly end up with stringent barriers against Japanese cars after 1992 that will not only compound the inefficiency of the European manufacturers that are already protected by national quotas, but will massively push up prices for consumers in the European market.
In Europe, because we spend so much time complaining about trade barriers from other countries, the Commission has generally found it distasteful to erect overt trade barriers. The chosen instrument for its protectionist fortress Europe policy involves anti-dumping duties. Regulation 2423/88 covers European policy on anti-dumping. Dumping is the practice of selling into an export market at a price lower than that charged in the home domestic market.
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The problem with regulation 2423/88 is that it is so drawn up that it can find huge dumping margins even when foreign manufacturers are selling on their home markets at lower prices than they are in the export markets. Every objective observer who has looked into the regulation has agreed that it is grossly unfair. The most recent report on this was by the National Consumer Council.There was also a report not long ago by the Royal Institute of International Affairs, written by Michael Davenport, a former senior economist at the EC Commission, so he should know. He said : "Not only do the Community's rules overtly discriminate against foreign companies, but, in common with other import restraining measures, they ignore the damage inflicted by anti-dumping duties on the users of imported products. Instead of encouraging competition, as intended, anti-dumping action seems to be frustrating it." I shall not go into all the intricate detail of how the regulations are grossly unfair, since other hon. Members are waiting to speak, but a lawyer called Chris Norrell has done a great deal of work in this area and conclusively proved that the Community regulations are protectionist and slanted towards finding dumping margins even when they do not exist.
As further proof of the unfairness of these regulations, I point to Hong Kong. In theory, if a company engages in predatory trading practices or dumping, the idea is that it has a large protected home market on which it can charge high prices to subsidise its export prices, with the idea of driving other manufacturers out of business so that eventually the predatory company can reap monopoly profits. But how can a Hong Kong company do that?
Hong Kong is a relatively small market and almost all Hong Kong manufacturers export 80 or 90 per cent. of their production, so how can they be found to be dumping? Yet on numerous occasions under these Community regulations, Hong Kong manufacturers have been found to be dumping everything from textiles to video cassette tapes, and large duties have been levied on them as a result. That is a clear sign of the unfairness of the regulations, yet between 1980 and 1988 the Commission undertook no fewer than 357 anti-dumping investigations and took action in almost all of them--duties have been levied or the foreign manufacturer has had to undertake to raise his prices in the European market.
More and more, these anti-dumping actions are being taken against Japan and east Asia economies, and more and more they are being applied to high technology products such as photocopiers, computer printers and so on.
Sir Russell Johnston : Is the burden of the hon. Gentleman's argument that he thinks that the British Government have been less than active in objecting, on their own behalf as well as that of other countries, to restrictive trading by the European Community? Does the hon. Gentleman think that the British market should be more open to the products of the Japanese?
Mr. Oppenheim : On the second point, the hon. Gentleman is asking me whether I believe in free trade. The answer is that I do. Just because another nation is more advanced and more competitive than we are, that is
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not necessarily a reason to exclude its products. I shall answer the hon. Gentleman's first question about the British Government shortly.I want to deal briefly with the photocopier market. In 1985, the Commission instigated an anti-dumping investigation at the behest of a small group of European manufacturers which had damaged themselves in the previous decade by producing poor-quality, overpriced products. The Japanese, by contrast, must be said to have produced high-quality products which they marketed aggressively ; they were reliable, low-cost products that people wanted to buy. Yet the European companies complained to the European Commission, and as a result of the anti-dumping investigation, large dumping duties were imposed on the Japanese photocopier manufacturers.
Then the EC went further and decided to impose what are called "screwdriver duties" on Japanese-owned factories in Europe, under which factories owned by Japanese, Korean or Taiwanese companies on which anti-dumping duties had already been imposed, but which subsequently manufactured in Europe, had screwdriver anti-dumping duties levied, which meant that a product with 80 per cent. EC content could still have anti-dumping duties levied on it. This is both unworkable and unfair, particularly in complex industries such as electronics. How does one determine the country of origin of something like a printed circuit board which has 10 or 20 different components from all over the world--components which might have been fabricated in different stages of their production in different countries? The idiocy of some of these rules means that Japanese-owned plants in the Community cannot buy components from factories that their own company owns in Japan, but their European competitors can buy components from those same factories. The drift of my argument is that, behind these trade barriers-- they do not receive much coverage in the press because they do not excite much political passion, but they are being rapidly erected--is industrial lobbying by large European companies such as Siemens, Olivetti, Thomson and Philips. They have all lobbied hard for many years for ever more protection at the expense of European consumers and for more and more subsidies from national Governments and the EC--which they have got. The hypocrisy of their position is that the same companies lobbying against what they call cheap dumped imports from Asian countries make huge quantities of their products in Asian factories that they own.
For instance, when European television manufacturers asked the Commission to impose anti-dumping duties on Korean television makers and included, by way of justifying statistics, the fact that imports of televisions from Asia had increased dramatically in recent years, a large percentage of that increase came from factories in Asia that they owned themselves. Needless to say, the Commission swallowed their case, hook line and sinker. It imposed anti-dumping duties on South Korean televisions, with the result that the Koreans are hamstrung when selling products in Europe, but Philips and other companies happily run large factories in Asia and import their products to Europe with no anti-dumping duties.
The benefits of hamstrung competition and of higher prices for the European industrial lobbyists which have so successfully had anti-dumping duties imposed on their east Asian rivals are obvious but, as with any form of protection, such advantages are likely to be only
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short-term. One of the dangers is that, if people are genuinely convinced that the Japanese and others have succeeded by unfairly dumping products on the European market, they may not realise that the real problem lies with European industry, so the motivation for industrial reform in Europe will become less urgent. So although the draftsmen, architects and masons of the Commission may genuinely believe that, by erecting what is sometimes called fortress Europe, they are helping European industry, in fact they are merely locking it into a high- cost, low-productivity, uncompetitive ghetto Europe. The significance of the problem for Britain is that we pay a high price for these protectionist measures. I know that most hon. Members in this debate have gone for the broad, grandiose sweep of policy, but I do not apologise for homing in on one way in which the EC works. This is an area that the EC pretty well controls already--our trade policy. As a result, we are putting up more and more barriers, and British consumers are paying an ever heavier price. A recent National Consumer Council report said that the variety of anti- dumping duties on east Asian electronics products resulted in British consumers paying about 5 per cent. more for those products than they otherwise would have.Unfortunately, because Brussels runs our trade policies, we have little control over them. Ministers are often unwilling to get involved in more fights with Brussels ; quite often they are busy with a range of subjects, so even a liberal, free-market Government such as ours end up rubber- stamping most of these protectionist measures. But this example of how the EC operates should set alarm bells ringing in the Chamber. We already have little control over large areas run by the European Community--by a bureaucracy which is fairly unaccountable and which tends to be far more prone to follow lobbying by powerful pressure groups such as large European conglomerates like Siemens, Olivetti and Philips.
In the areas that the EC has taken over, such as trade, there is little power these days for Ministers, let alone for individual Members of Parliament. Is that what we really want? Surely there must come a point at which the advantages that we gain from co-operation within Europe, which I too want us to enjoy, are outweighed by the disadvantages of creating a large, unaccountable and bureaucratic structure where decisions are remote and individual Ministers and Members of Parliament--let alone our constituents--have virtually no influence, and where the people who really do have the influence are the powerful industrial lobbies which always seem to get their way in Brussels when they whinge about unfair competition, wanting more subsidies and yet more trade barriers. I believe that we are already close to the point at which the advantages of co-operation within the European Community are outweighed by the disadvantages.
8.40 pm
Mr. Bob Cryer (Bradford, South) : I shall be brief because other hon. Members wish to speak. I shall not follow the hon. Member for Amber Valley (Mr. Oppenheim) except to say that he seems to envisage a world in which free marketeering reigns supreme and the workers go to the wall. He can make that claim, as he has fairly comfortable personal circumstances. However, he should bear in mind the lack of trade union rights and of
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health and safety standards in countries such as Taiwan. The notion of a free market, with what is generally termed "a level playing field", is not always what it appears.I remain an unremitting critic of the Common Market. The Labour party's shift from what was a reasonable and critical stance on this issue does not have my support. The EC has been a burden on our backs. Since 1979, this country has paid £10,000 million net of grants and rebates to the Common Market. I notice that, this year, the White Paper has abandoned the neat but informative table of net payments made to the Common Market. No doubt one of the Government's advisers, lavishly paid by the taxpayer, and seeking to improve the presentation, suggested that such information should be excluded because it is damaging.
At the moment, several local authorities are making supplications to the Common Market simply to get some of our money back. It would be more efficient if central Government paid that money direct to the local authorities rather than paying it to the Common Market so that it can make arbitrary decisions and so that local authorities can make expensive representations simply to get back a proportion of that money for much- needed transport infrastructure improvements and for the social needs of the regions.
The common agricultural policy is not at the forefront of discussions nowadays, but it still costs us nearly £20,000 million. It is still inefficient and it is still one of the major factors that has resulted in the pouring of huge quantities of nitrates on to our soil. It is still a potent source of pollution in Britain and in other countries. I am not saying that simply because concern about the environment is fashionable these days ; I was saying it 10 years ago when the guaranteed intervention prices and the guaranteed purchasing of crops from farmers was leading to ever-more intensive farming, with ever-increasing quantities of fertilisers being poured on to our soil. The CAP is still costly and still damaging. It has not gone away. The Minister of Agriculture, Fisheries and Food is still arguing about free butter distribution in the United Kingdom, because there is so much butter that it is spreading everywhere. The notion that the EEC has been magically reformed is not true. Some members of the Labour movement regard the social charter as a great step forward. It is a collection of generalised platitudes which, for example, do not provide civil servants with trade union rights. The social charter will not restore the jobs of the workers who were thrown out of GCHQ. It is claimed that health and safety legislation is being improved as a result of our membership of the Common Market and as a result of the Commission's concern for health and safety standards. That is simply not true. In fact, the reverse is the truth. Health and safety standards from our legislation are being eroded by the platitudinous generalisations of the health and safety proposals in directives from the Common Market.
To get round the provisions of the Health and Safety at Work, etc. Act 1974, which states that all regulations must aim at least to improve the existing standards, the Health and Safety Commission is now talking about a package of regulations that will repeal the absolute provisions of our existing legislation to ensure that we conform to the generalised "so far as reasonably practicable" terms that have been put forward in Common Market directives. As hon. Members will know, "so far as reasonably
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practicable" is a term of art which means that the fact that something is too costly is a defence and that in any subsequent action that arises from an accident to an employee, the employer can say that it was too costly to provide adequate safety measures. Therefore, the health and safety provisions of the social charter do not represent a great step forward. They are a clever device by Jacques Delors to show some social concern, and even those provisions have been minimised over the past 12 months.These days some Conservative Members criticise the Common Market. One or two have referred to the Bruges speech as a landmark of criticism when the Prime Minister stood up against the federalism of the Common Market. The truth is that, since her election in 1979, the Prime Minister has enmeshed us more deeply in the Common Market. It was the Prime Minister, in conjunction with the then Chancellor of the Exchequer, now the Leader of the House, who removed our derogation on the freedom of movement of capital within the Common Market. Immediately after taking office, that Chancellor removed the Treasury's power over the movement of capital--limited though it was. Some free marketeers would say that is perfectly proper, but the treaty of Rome gave us a derogation that allowed the United Kingdom Government--of whatever political complexion--some intervention in the money market.
Conservative Members cannot have it both ways. They cannot say that the Prime Minister is standing up to the Common Market when, on taking office, she removed an important derogation that had been negotiated with the Common Market, especially when that derogation had not been removed up to that point by Governments of either party.
The Prime Minister organised the Single European Act of 1986, which went through the House on a three-line Whip. Paragraph 8 of one of the reports produced by the Select Committee on Foreign Affairs makes it clear that the effect of the Single European Act has been to diminish, and in some cases to remove, member states' right of veto. That is not standing up to the Common Market ; it is co-operating with it. That has been the effect of the Single European Act. It was also the Prime Minister who signed the channel tunnel agreement. Inside the Common Market, the channel tunnel was not hailed as a transport development ; it was hailed as a knot that would tie us more closely to the Common Market. It will be a costly venture, which will suck investment in the railway and transport infrastructure away from the regions, down to London and the south-east. It is typical of British Rail that its only investment in an inland port is in London rather than in Bradford, Leeds, Sheffield or anywhere in the north. It is developing a terminal in Willesden and facilities in Kent and the channel ports.
The Tories are pressing ahead with the removal of barriers, as the Foreign Secretary said. However, problems remain and the solutions are never made clear. Ministers always say that policies made in the Trevi group of EC Justice Ministers will protect us against the growth of drug trafficking, but we are never clear how that will be done. The Government say that they will remove the barriers but at the same time protect us against arms trafficking, of
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which we have had a recent and most dramatic example. If we did not have supervision at customs points and at points of entry, how could we receive information about guns made in Sheffield and elsewhere for export to Iraq? We are also concerned about the potential spread of rabies if we do not have sovereign scrutiny at our borders. We are an island and have a sea around us. Sometimes that is an advantage and sometimes it is not. In case the Minister makes some off-hand remark about little Englanders not appreciating the advantages in the growth of a European entity and federal organisation, let me remind him that I am a long-standing advocate of international agreements such as the United Nations nuclear non-proliferation treaty. I went to the United Nations second special meeting on peace and disarmament in 1982. I want nations to work together, but to do so as independent sovereign states with a common policy in various sectors. The worst thing that can happen is for a centralised organisation to tell sovereign states what to do. That leads only to friction and antagonism, and we should not do it. I emphasise what I have said before, and I hope that people outside take notice of this. There are stirrings. The Prime Minister is raising an issue, although she is doing it without any record of action. There is a strong and powerful move in the EEC for a federal union, in which places such as this will be demoted to the level of a town council.Tory Members have called for a free market and even for all trade barriers to be removed to ensure that the treaty of Rome is properly and fully applied. The free market is a danger to workers. It implies a competition. The winners in such competitions are those who are successful and the losers are those who, for whatever reason, are unable to compete. The workers go to the wall. When Coloroll was taken over by a business man of the year, one of the new yuppie breed whom the Tories so admire, he made a number of fatal decisions, and now the company is in dire straits. Its workers, who have done nothing except increase productivity and maintain traditions of skill and ability, are wondering what will happen to them. That is the result of competition in a free market.
A Labour Government must be able to ensure that damage such as that, which is done not just to workers but to the economy, does not take place. A free market will not provide remedies to such problems and the Government have to be able to intervene either to support or, if necessary, regulate the flow of trade. It is only sensible for Governments to intervene in the marketplace to protect an industry and the jobs that go with it. Such a move would be difficult inside the Common Market, because the Commission would say that it was in breach of the treaty of Rome.
Sir Russell Johnston : The hon. Gentleman is attacking free competition. Does he agree that the countries of eastern Europe are not a recommendation for protected economies?
Mr. Cryer : That is a fashionable thing to say after the recent changes in eastern Europe, which are connected not only with the economy but with the lack of opportunity for the exchange of ideas and for discussion. There is no doubt that a wind of competition is blowing through some of those countries, and with it comes the creation of dole
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queues. In a few years, there will be a marked difference, because people do not like being put on to dole queues. There will be a reversal of the coin, with protests, demonstrations and outrage about the extent of unemployment. A free market economy is not a satisfactory solution in the way suggested by the hon. Gentleman's glib intervention.In my constituency is a carpet factory owned by Coloroll that has always produced a high standard of output. Several hundred workers in it are apprehensive about their future. I hope that, as a good viable unit, it will be retained, but there is no guarantee. That is the position for workers who have been facing the effects of this enterprise culture. A centralised, decision-making economy with a fortress around it is not the solution. We must have a bit of both, but we must have a reserve position so that the Government can intervene. In the Common Market under the treaty of Rome, if it is applied, it would be difficult for a Government to intervene. That would be a handicap for a Labour Government concerned about maintaining our manufacturing industry, as we must.
This somewhat vague document has a table. The Government used to provide actual deficits, but now they have decided to show deficits in manufactures in percentage terms, because that glosses over the facts. From 1973, the balance of trade in manufactures between Britain and the European Community has gone inexorably upwards from 0.4 to 13.6 per cent. The Government say that the larger the deficit the more successful we are, because we are exporting more as they are exporting more to us. That logic is absurd. The Minister can tell us how we can eradicate that deficit. Will we be able to sell as many goods to them as they to us, and will our manufacturing industry be buoyant and confident, as it is not at the moment?
There has been much talk about the exchange rate mechanism as a magic cure for the problems of our exchange rate. We shall have a debate about this later in the week. Where we have had a fixed exchange rate, it has always been accompanied by a large-scale spread in unemployment--for example, in 1925 when we went on the gold standard. That is a warning. The Labour party is not the party of unemployment. Indeed, the very reverse is the truth.
If we wanted at any time to alter our rate of exchange, to whom would we apply within the exchange rate mechanism? The other Common Market countries are dominated by West Germany, which has a massive balance of trade surplus with us. Is it likely that in those circumstances a group of countries with a massive balance of trade surplus with us would be likely to agree to any alteration of exchange rate that would place us in a more competitive position? I think not. Our membership of the Common Market has been a burden. It has been a millstone round our neck throughout our membership, and it remains so.
8.59 pm
Mr. Christopher Gill (Ludlow) : In answer to a parliamentary question, my hon. Friend the Minister of State, Foreign and Commonwealth Office told me that the Government's objective "is practical progress towards a robust and realistic form of economic and monetary union, with full regard to democratic accountability and the doctrine of subsidiarity." --[ Official Report, 7 February 1990 ; Vol. 166, c. 688. ]
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I have read carefully the documents before us to find any evidence of the principle of subsidiarity being applied. I draw the attention of my hon. Friend the Minister to paragraph 3.14, which refers to food law :"The principles are designed to ensure as far as possible that a foodstuff lawfully produced and marketed in one member state should not be subject to marketing or import restrictions in another." That accords with the principle of subsidiarity.
Perhaps at this stage I should declare my interest in the meat trade. It is with regulations affecting minced beef, for example, or even the great British sausage, that we see the principle of subsidiarity being ignored. That worries me. If we are saying that we can accept so many tenets of the European Economic Community provided that the principle of subsidiarity is being maintained, why is the principle so often
"more honoured in the breach than the observance?"
We must ask ourselves where the evidence of subsidiarity working affectively exists. Where are the historical precedents?
Power and decision making are subsumed inevitably by the centre. That must be inevitable in any bureaucratic organisation, whether we are talking about Governments, Churches, nations or empires. I invite the House to speculate on who is to decide which matters should become subsidiary and which matters we should allow the lower orders to take control of. I suggest that the answer is--
Sir Russell Johnston rose --
Mr. Gill : I see that the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) wishes to intervene. I shall give way to him in a moment. I wish only to add to my previous remarks that it is always the central authority which calls the shots, and that in practice it has little regard for the principle of subsidiarity.
Sir Russell Johnston : I suggest that the hon. Gentleman conveys his sentiments to Mr. Brian Mulroney of the Canadian federation. They will be of great comfort to him.
Mr. Gill : I thank the hon. Gentleman for that advice.
I invite hon. Members to consider national examples of things that we and our constituents feel strongly--in some instances passionately--could be done by a parish council or a district council rather than by county councils or Government Departments. Each right hon. and hon. Member will have his own examples.
In my constituency, parish councils, town councils, district councils, county councils and myself are all in favour of a new bridge over the River Severn near to the historic bridge at Ironbridge. However, that is not to be. We must have a public inquiry into the matter. Imagine how that requirement would have affected the course of history if, in the 18th century, the great ironmasters could not have built their bridge without reference to a higher authority.
In saying these things, I am not alone. Boris Yeltsin is on record this week as saying, when asked what role he foresaw for the President of the Soviet Union :
"he should concern himself with defence, foreign policy and other nationwide programmes".
On the basis of his dramatic experience in eastern Europe, he feels that enough is enough, and wishes to see institutions restored to a lower level of democratic decision making.
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If we fail to understand and to manage the principle of subsidiarity, inevitably the bureaucracies will continue to burgeon. As we all know, once they are created it is difficult to get rid of them. There will be an insatiable appetite for cash, with the concomitant waste and fraud.Page 14 of the report mentions "doubling of the funds for regional aid" in Delors stage 1. My hon. Friend the Member for Stroud (Mr. Knapman) mentioned in an earlier intervention that the Community budget is proposed to increase by 13 per cent. in the next year. We should beware the political damage that failing to manage subsidiarity would do the Conservative party. We run the risk of perpetuating many of the socialist principles to which we are opposed.
Structural funds may, by their very nature, contradict the principle of subsidiarity. It is clear from the papers before us that the decisions are made remotely and arbitrarily. Such funds may also be a negation of that most attractive and practical feature of the Community--the single, free market, with all the physical, technical and fiscal barriers removed. It is from that free market that Conservative Members believe that the benefits to all member nations of the Community will inevitably flow. I feel strongly that, with the United Kingdom's balance of payments deficit with the European Community at a record level, and given that we are a major contributor to the European Community budget, it is time for us to consider that charity begins at home.
I seldom agree with the hon. Member for Bradford, South (Mr. Cryer), but I agree that it might be a more economical, sensible and intelligible policy, instead of remitting money from this country to Brussels, to pay it from our national Exchequer to those who will be spending it in this country. There is much evidence of tax churning. I am fond of quoting the example of the roundabout on the A454 in my constituency, which proudly bears a placard reading
"Partly financed by the European Community".
That says it all in terms of funding, and it also says a good deal about subsidiarity : again, it negates the principle of subsidiarity. The decisions are not being made in this country, but are being delegated to the European Community, and in many cases we are having to accept arbitrary decisions.
Whether we like it or not, we must ask why we--through the medium of the European Community structural funds--subsidise our competitors. Why do we remit moneys to Brussels that might, for example, be used to build an autostrada from Calabria across France to Calais to speed the cabbages on their way to Coventry, at a time when the industrialists of the west midlands have not the facility of an equal road transport network to the ports at Felixstowe and Southampton? I venture to suggest that we are now facing a similar dilemma in our attitude to the channel tunnel. On the continent, great efforts are being made to improve the rail network to the channel tunnel, while we continue to argue the toss. There is a good case that any moneys that we have would be better spent at home on such projects rather than in the countries of southern Europe.
The new buzz word "subsidiarity" has sometimes been used quite irresponsibly. It has been used to legitimise some of the worst features of the European Community and to disguise some of them from the British electorate.
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In many ways, it is a deception. My right hon. and hon. Friends must beware of selling the pass. Subsidiarity could be the Trojan horse for a centralist Europe.9.11 pm
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