House of Commons Hansard Debates for 1 Jul 1991

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European Council (Luxembourg)

3.31 pm

The Prime Minister (Mr. John Major) : With permission, Mr. Speaker, I shall make a statement about the European Council in Luxembourg on 28 and 29 June. My right hon. Friend the Foreign Secretary and I represented the United Kingdom.

It was clear from the events there that Yugoslavia must be the first item on our agenda. I discussed the overnight position with Prime Minister Lubbers and with Chancellor Kohl before the Council opened. We were able to reach rapid agreement in the Council on invoking the emergency mechanisms of the conference on security and co-operation in Europe and a meeting is taking place in Vienna this afternoon.

We also agreed to dispatch to Yugoslavia the Foreign Ministers of the troika--Luxembourg, the Netherlands and Italy. Their visit brought some respite in the conflict, but the situation was very fragile yesterday and the Foreign Ministers returned to Yugoslavia yesterday afternoon. They secured agreement to the appointment of Mr. Mesic of Croatia as the next President of Yugoslavia and to other measures to defuse the crisis. The situation remains very volatile and the Community will need to be closely involved over the coming weeks. In the meantime, Community aid to Yugoslavia has been suspended. British citizens have been advised to leave Slovenia.

The main item of scheduled business was to discuss progress in the two intergovernmental conferences launched last year, one on economic and monetary union and the other on political union. Discussion centred on the issues raised in a draft treaty text circulated by the presidency, though there was no detailed negotiation of the text itself.

This European Council--as we had wanted--was a stocktaking. It was not the occasion to take decisions, but we have registered the considerable progress made in the Luxembourg presidency as well as our collective will to reach an agreement at Maastricht in December. The conclusions, which have been placed in the Library of the House, incorporate a number of points of importance to the United Kingdom. I made it clear that I welcomed the structure of the present draft of the treaty, although some other partners in the Community disagree with it strongly. The present text means that some things are done on the basis of the treaty of Rome but others on the basis of intergovernmental action in which the treaty of Rome does not apply and the Commission does not have the sole right of initiative. I welcomed the concept of a common foreign and security policy set firmly within the context of the Atlantic alliance and stressed the need to work by consensus in this crucial area.

There is agreement on the preparation of proposals to improve the implementation of Community law. That reflects a British proposal that would enable the European Court of Justice to fine member states that fail to comply with Community legislation. We have long argued for a level playing field and for full respect of the rule of law, and we are determined to get it. We have a good record on implementation and we believe that all states that sign up to Community law should implement it.

The conclusions call for early progress on the remaining legislation needed to complete the single market. This

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means in particular measures on insurance, and air, sea and road transport, which are of importance to this country.

The Council discussed the need to strengthen the Community's external perimeter boundary if free movement of people is to be able to take place within it. We also agreed to better co-ordination in the fight against international drug trafficking and organised crime through the establishment of a European Criminal Investigation Office.

The conclusions also commit us to strengthening the Community's links with the countries of central and eastern Europe. This will initially take the form of association agreements with Poland, Hungary and Czechoslovakia. The Government hope that those countries--and probably others--will be ready for full membership in due course.

I also made it clear that there were things in the present draft treaty with which I could not agree, and it was understood that nothing could be agreed until everything is agreed at the conclusion of these discussions. I explained that even though to many federal union implies decentralisation, the term carried the reverse implication in this country and would not be acceptable in a text to be agreed at the end of the year.

I explained our reservations about the existing text on the role of the European Parliament. We see a strong case for an increased role for the European Parliament in areas such as control over the Commission through audit of expenditure and measures to safeguard the rights of Community citizens, including the appointment of a European ombudsman. The text entirely reserves our position on the issue of co-decision. The present proposal, involving a complicated conciliation procedure, would not in our view improve Community decision-taking.

In the discussion on economic and monetary union I maintained our reserve on a single currency and a single central bank. We discussed the issue of economic convergence. The need for such convergence is increasingly recognised by our partners, but the nature and extent of that convergence and its relationship with possible target dates for moves to stages 2 and 3 of economic and monetary union are still for negotiation. All other member states understand that there must, in any case, be a separate decision by the Government and this House on whether the United Kingdom would move to a single currency and, if so, when.

The European Council has issued a number of political declarations which are also available in the Library of the House.

The Council endorsed the initiative that I took in April to establish a United Nations register of conventional arms transfers, and we will together table a draft resolution on this at the United Nations General Assembly.

The Council also endorsed a British and German initiative to improve the co -ordination of disaster relief within the United Nations system. We envisage the appointment of a high-level co-ordinator, with direct access to emergency funding and with the authority to pull together the whole disaster relief operation. We are taking that initiative forward in the United Nations now. At British initiative, the Council agreed a text on human rights, the first such declaration ever adopted by the European Council. The Community will use its

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leverage to promote human rights through the economic and co-operation agreements which it makes with third countries. We welcomed the abolition in South Africa of the remaining legislative pillars of apartheid. We also declared our support for the renewal of sporting links with South Africa on a case-by-case basis where unified and non-racial sporting bodies have been set up. The establishment of such an independent and non-racial body for cricket was announced on the same day.

I believe that this European Council was a good example of the Community at work. We took rapid action to respond to the crisis in Yugoslavia and will continue to work together for a peaceful settlement. We took stock in a businesslike way of the progress made under Luxembourg's chairmanship. There are difficult issues still to be resolved. As in any negotiation, there will have to be give and take and a judgment will have to be made by the Government and by the House on the overall package at the end of the negotiation. There was a common determination in Luxembourg to work for an agreed outcome to the negotiations by the end of the year. I shall continue to argue for what I believe to be in the interests of our own country and the interests of the Community as a whole.

Mr. Neil Kinnock (Islwyn) : I am grateful to the Prime Minister for his statement. I begin by expressing my strong support for the initiatives taken by the European Council to try to achieve stability, a secure ceasefire and productive discussions in Yugoslavia. I also express the hope that the efforts will be continued and that all the agencies of the Community and of the conference on security and co-operation in Europe will be employed in trying to secure a speedy, peaceful and enduring outcome to the turmoil and divisions in Yugoslavia.

Clearly, for our generation, there are no "small countries far away of which we know little". The Council is therefore to be commended on the speed and thoroughness of its action, which demonstrated how necessary and how possible it is to act as a Community in dealing with the security of our continent. Can the Prime Minister confirm that arrangements to assist British citizens wishing to leave Slovenia are proceeding satisfactorily as the day goes on ? With regard to the discussions on the two intergovernmental conferences, does the Prime Minister agree with me that the negotiations are of supreme importance to the future of our country and that any Government's overriding objective must therefore be the national interest, both for our generation and for future generations? That being the case, may I first say to the Prime Minister that there are no foreseeable circumstances in which it would be beneficial for the European Community to take on responsibility for military defence matters?

Secondly, would the Prime Minister accept, as a matter of principle, the requirement that any economic or political institutions established to share power at European Community level must be democratically accountable- -because only democracy is truly robust and also because the powers already ceded by national Parliaments must continue to be subject to democratic control?

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Thirdly, will the Prime Minister explain why his Government have so strenuously opposed the extension of qualified majority voting on environmental matters and on the social charter? Is it not the case that, in the unified single market after 1992, every effort must be made to ensure that companies and countries cannot gain any unfair competitive advantage by seeking to lower environmental and social standards? Is it not clear, therefore, that common environmental and social protection should extend right across the whole Community and across all its peoples? Why is the Prime Minister still trying to stop that?

On the economic intergovernmental conference, will the Prime Minister first confirm that his hard ecu plan has effectively been dismissed by other member states as impractical and undesirable and is now a dead duck? Will the right hon. Gentleman confirm what he stated in The Daily Telegraph just two weeks ago--that he accepts the principle of a single currency? And as no national Government or Parliament would ever accept the imposition of a single currency against their will, will the right hon. Gentleman take this opportunity to tell us why he continues to give the impression that the menace of imposition exists when it so clearly does not? Will the Prime Minister also tell the House how he regards the prospect of the creation of a European central bank and if there are any conditions in which he would accept such an institution if it were not accountable to elected democratic authority?

On the vital matter of economic convergence, will the Prime Minister tell the House how he defines economic convergence in the European Community? Does not he agree that real economic convergence must involve improving performance in research and innovation, productivity and the skills of the labour force, all of which are necessary to achieve and maintain high levels of employment and balanced growth?

After 12 years in power, what will the Government do in practical terms to improve performance, especially when investment, output and productivity are falling and unemployment is rising rapidly as a direct result of the Prime Minister's policies? If the Prime Minister attaches importance to real convergence, why does he not work for it instead of just hoping for it? As Maastricht approaches, why does he not stop playing for time for his party and start playing to win for Britain?

The Prime Minister : May I first thank the Leader of the Opposition for his support for the action taken on Yugoslavia and for the calling together of the CSCE mechanism? That will be helpful and I hope that it proves to be successful in bringing to an end what is potentially a very serious and alarming conflict. May I also assure him that the action to assist British citizens is proceeding satisfactorily and is under the very close control of the Foreign Office? We shall do all we can to ensure the safety and security of British citizens.

I can also share with the right hon. Gentleman agreement on the importance of the two intergovernmental conferences that are presently under negotiation. They are of great importance to our present, and perhaps of greater importance to our medium and long-term future. I share his view that there is no case for European defence divorced from NATO. NATO is the central pillar of our defence now, has been for 40 years and will remain so. However, I take the view that there is room for increased

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action by the Europeans in terms of co- operation on a defence identity, most satisfactorily through the Western European Union, and by a larger European contribution to our collective defence. In so far as the economic and political institutions are concerned, of course they must be democratically accountable and there are a variety of definitions among our partners in the Community as to what nature of democratic accountability that should be. There is no agreement yet about that, but I think that the views of this House are perfectly clear.

With regard to qualified majority voting, in 1985 we accepted the quite considerable extension of qualified majority voting in the Single European Act in a number of areas, and that has operated thereafter.

We have accepted a number of social charter areas, but there are some that we find extremely difficult to accept, precisely because they would damage that which we most want from the social charter, which is the creation of jobs. Neither the Leader of the Opposition nor I would wish to see action taken that would damage employment prospects in this country.

With regard to the hard ecu proposals, the right hon. Gentleman is wholly and completely inaccurate when he describes the hard ecu proposals as no longer being on the table. They most certainly are on the table. Not only are they on the table, but they have very materially changed the nature of the whole debate on economic and monetary union with the proposals subsequently put forward by other countries to harden the basket ecu and achieve the same economic effect that we sought with the hard ecu principle.

We have made our position clear about a European central bank. If that comes about, it is many years away and it would certainly need to be accountable to a directly elected body. As for a definition of convergence, convergence would certainly mean bringing the European economies closer together on inflation, growth, performance, fiscal deficits and, as crucial as any of those, on the flexibility of the economies to respond to changing economic circumstances.

With regard to the improvement of the economy over the past 12 years, the changing living standards of people in this country indicate very clearly the extent to which the economy has improved dramatically. In so far as our comparative positions on European matters are concerned, the right hon. Gentleman is in no position to claim that he has any monopoly on the future interests of Europe. We are negotiating for the future of Europe in a way in which the right hon. Gentleman never could or would with the divisions in his party. Several Hon. Members rose--

Mr. Speaker : Order. Although I realise that the statement does not wholly concern Europe and that it is about wider matters as well, I propose to give precedence to hon. Members who were not called in last Wednesday's debate. I will call other right hon. and hon. Members later, if there is time.

Sir Peter Blaker (Blackpool, South) : Will my right hon. Friend accept my congratulations and those of the Government side of the House on the way in which he promoted and protected the interests of the United Kingdom and Europe at the meeting? With reference to the fact that the word "federal" does not appear in the

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conclusions of the meeting, does my right hon. Friend agree that a door that is gently closed can remain just as firmly shut as one that is slammed, and that it is less likely to provoke reprisals?

The Prime Minister : My right hon. Friend emphasises the point with delicious delicacy. It was not a drafting session in the European Council-- that lies ahead--but I made it clear that we could not accept a text that included the concept of federalism. It is dangerously ambiguous and it simply would not be acceptable either to me or to the House.

Mr. Paddy Ashdown (Yeovil) : The Prime Minister has rightly emphasised the stock-taking nature of the summit. Nevertheless, he is to be congratulated on ensuring that Britain does not suffer the catastrophe of isolation at Luxembourg. Does he now regret his uncharacteristic but nevertheless inflammatory remarks at Luxembourg on immigration? Does he agree that the Yugoslav situation underlines the importance of having a common European foreign policy? Does he realise that he has not dodged the crunch on Europe, but has merely delayed it, and that he cannot unite his party or lead the country effectively unless he clearly stakes out his position on Europe? Will he therefore begin the process now by saying clearly what is so obvious--that he profoundly disagrees with the crabbed view on Europe put forward by his predecessor in the House last week?

The Prime Minister : I dismiss the last remarks of the right hon. Gentleman--they are scarcely worth consideration. In so far as a common foreign and security policy is concerned, I stated expressly in my statement a few moments ago that I favoured a common foreign and security policy. Yugoslavia, as the right hon. Gentleman says, is a case in point, so, indeed, was the safe havens initiative of some weeks ago. There have been a number of other illustrations where the collective political force of the Community added to the individual political and economic force of member nations to the general good of all. The common foreign and security policy, working on the basis of consensus, is something which I wholly and unreservedly support. The Government's position is wholly clear. We are seeking an agreement at Maastricht that I can safely recommend to the House and which I believe is in the interests of the Community as a whole. I am not prepared and I am not going to stake out every tiny dot and comma of my negotiating position and undermine that negotiating position within our partners in Europe. The right hon. Gentleman can ask as much as he likes, but what matters at the end is what I negotiate in Maastricht, and I shall give that primacy in all matters between now and then.

In so far as clarity on policy is concerned, the right hon. Gentleman is a bit rich in much of what he says. There is certainly a crystal clarity in the Liberal party's policy : it is the transfer of power from London to Brussels, giving the European Parliament the right to override the Council of Ministers, and the phasing out of NATO. That is not our policy.

Mr. Cranley Onslow (Woking) : May I add my congratulations to my right hon. Friend and his Cabinet colleagues on their skilful conduct of the talks and the success that he has evidently had in securing essential British and European interests, as well as on the clarity of

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his statement this afternoon? Those of us who heard the words that the Leader of the Opposition read out, who watched the Leader of the Opposition's face during my right hon. Friend's response, and who noted that it took the right hon. Gentleman 228 words the other day to say nothing are delighted that my right hon. Friend, not the Labour party, is in charge of these matters.

The Prime Minister : My right hon Friend is entirely right ; I am grateful for his kind words. The divisions among the Opposition can scarcely be hidden, especially now that the Labour Common Market safeguards committee has made its position clear. The hon. Member for Hamilton (Mr. Robertson) has called in a communique for

"The creation of monetary union governed by an autonomous central banking system which should arrive at the issuing of a single currency".

The shadow Secretary of State for Transport, on the other hand, has stated :

"We are against a single currency."

Which is the Opposition's position?

Mr. Tony Benn (Chesterfield) : Is the Prime Minister aware that in these negotiations he is dealing with the rights of the British people to elect and remove Members of Parliament who make the laws under which they are governed? Is he further aware that in 1987 no party put these matters before the electorate? Is he aware that a dying Parliament has no moral or constitutional authority to reach decisions before the British people have had a chance to assess them? Is he also aware that issues such as the repeal of the corn laws, the Irish question and free trade have in the past realigned British politics ; and that the examples of Slovenia, Croatia, Quebec and the Baltic states show that enforced federation can have catastrophic effects quite contrary to those anticipated by those who advocated it? Will he reaffirm that it is the rights of the people, not the rights of Parliament, that are the basis of democracy in this country?

The Prime Minister : As the right hon. Gentleman knows, Members of Parliament are sent here to exercise their judgment on behalf of the people. Parliament is certainly answerable to the nation, but Members of Parliament have complete authority in the mandate that they have to decide what they believe is right in the interests of the nation and to seek legislation to that end. In due course, they will have to answer for that to the electorate.

Mr. Nigel Forman (Carshalton and Wallington) : Does my right hon. Friend agree that there is no necessary contradiction between the judicious approach to developing the Community which he has adopted in his statement and the possibility of enlarging the Community, in good time and when the process is ripe, to include the nations of central Europe--notably Poland, Czechoslovakia and Hungary? Can he confirm that the association agreements to which he referred are but stepping stones to that desirable end?

The Prime Minister : Yes, I can certainly confirm that. Nothing that we do in these two intergovernmental

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conferences must throw such a girdle around the present Community that it prevents others from joining it in future.

Mrs. Margaret Ewing (Moray) : Will the Prime Minister accept that, although action was taken on the events in Yugoslavia, many of us were extremely disappointed by the initial reaction of the Council to events in Slovenia? At a time when the Community is looking at the possibility of welcoming a common foreign policy, would not it have been better to issue a clear clarion call saying that we shall respect the ballot box, not the threat of the bullet? What will the right hon. Gentleman do now in the circumstances pertaining in Yugoslavia to recognise the democratic aspirations of these people?

The Prime Minister : The matter of the first importance is to stop the fighting and to prevent the potentially far worse fighting that might take place over the next few weeks. That is why we implemented the CSCE co- operation procedure and why we sent the troika, not once but twice, to Yugoslavia.

I understand and accept fully the hon. Lady's concerns about the independent rights of Slovenians and Croatians.

Mr. Hugh Dykes (Harrow, East) : May I add my congratulations to my right hon. Friend for once again showing so clearly that it is quite possible and feasible to combine genuine interests of this country, as shown at Luxembourg, with the genuine overall interests of the Community? Does he agree that, contrary to the ludicrous assertion by the right hon. Member for Yeovil (Mr. Ashdown), the development of a strict, strong, combined Community immigration policy vis-a-vis third countries would be well received by all member states?

The Prime Minister : I am grateful for that remark, and I apologise to the right hon. Member for Yeovil (Mr. Ashdown) for neglecting to respond to his point earlier. The discussions that we had on immigration at the EC Council concerned our alarm at the potential immigration south to north and east to west which could occur over the next 10 years. It could literally amount to tens of millions, if not hundreds of millions, of people. It is necessary for the Community to look to its external borders. Conversely, it is equally true--we are already doing this--that we seek to guide help and assistance to those countries to minimise the number of people who seek to move as a result of economic migrancy.

Mr. Jack Ashley (Stoke-on-Trent, South) : Is the Prime Minister aware that he is caught in a Catch-22 situation because he is opposing both the social charter and majority voting? If he maintains his objections to the social charter, his European colleagues will evenytually insist on majority voting on it, but if he accepts majority voting, that will enable them to implement the social charter that he so dislikes. Therefore, why does he not take the graceful way out and accept the social charter as a great milestone for workers' wages and hours and for women's rights?

The Prime Minister : We have accepted those parts of the social charter that are in the interests of the people of this country. We have not made a blanket objection to every element in the charter. A number of elements in the social charter programme have been agreed by all member states, including the United Kingdom, but we retain a strong objection to those parts of the charter that we judge

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would cause and cost job losses in the United Kingdom. I should have thought that the right hon. Gentleman would agree with that. As to qualified majority voting, as I said earlier, we agreed an extension in the Single European Act in 1985. We shall examine specific proposals for extension on their merits, but we shall need to be persuaded that it is of benefit both to the United Kingdom and to the Community before we agree to any such extension.

Mr. Anthony Nelson (Chichester) : I congratulate the Prime Minister wholeheartedly on the line that he took in Luxembourg and the important decisions that he and the Foreign Secretary secured. Does he agree that the real argument about economic and monetary union in Europe is whether the people of the country are better off by going in or poorer by staying out? At the end of the day, there is very little sovereignty in becoming relatively impoverished.

The Prime Minister : The economic interests of the nation are, after defence, the prime concern of this and every Government. My hon. Friend has pointed that out accurately.

Mr. David Winnick (Walsall, North) : On the wider issues discussed at the meeting, was it accepted that if the criminal regime in Iraq does not carry out fully the United Nations Security Council resolution on nuclear equipment and the destruction of all nuclear weapons, force may have to be used? Does the Prime Minister agree that the hide and seek games carried out by Saddam Hussein and his thugs over the past few weeks cannot be tolerated any longer?

The Prime Minister : The hon. Gentleman expresses my view clearly. The European Council strongly condemned the attempt by Iraqi authorities not to reveal part of their nuclear equipment, which we believe they have not done, in explicit contravention of Security Council resolution 687. In our discussions we made it clear that, so long as the Iraqis failed to comply fully with the obligation to observe all the provisions of Security Council resolutions 687 and 688, the Security Council could not envisage lifting sanctions in any circumstances.

Sir Geoffrey Finsberg (Hampstead and Highgate) : Will my right hon. Friend say something about defence? Will he make it clear to his colleagues that the assembly of the Western European Union and its presidential committee have twice said that defence should be done by the Western European Union as part of NATO and that that was supported by the French socialist president of the WEU? Does he feel that his colleagues in Europe may feel that it is right for the European Community to accede to the Council of Europe charter on human rights?

The Prime Minister : There was not an extensive discussion on defence, although there was on security policy. Our partners in the European Community are aware that the view expressed by my hon. Friend is the view of the British Government.

Mr. Gavin Strang (Edinburgh, East) : While I support the invocation of the emergency mechanism of the CSCE with respect to Yugoslavia, are not there sound reasons for believing that if any international institution can avert civil war in that country, it is the European Community? I welcome the freezing of EC aid to Yugoslavia, but are

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there likely to be direct talks between the Council--through the three Foreign Ministers--and the federal army of Yugoslavia? Will consideration be given to any other sanctions that the European Community might bring to bear to try to avert a tragedy in that country?

The Prime Minister : I agree with the premise of the hon. Gentleman's question. It is probable that there will be direct talks between the troika and the people involved in the conflict in Yugoslavia. I hope that they will also speak to the federal Government and the Slovenes and Croats. The troika has a wide-ranging discretion at present and in such a swiftly moving set of circumstances we must, to a certain extent, leave it to the discretion of the Foreign Ministers to take the action they believe is right.

The fact that the Community has twice, within a matter of days, sent the troika to Yugoslavia is the clearest possible illustration that we agree with the central point of the question of the hon. Member for Edinburgh, East (Mr. Strang) : that the Community has a prime role to play in helping to bring the conflict to an end.

Mr. Ian Taylor (Esher) : Will my right hon. Friend accept congratulations on the positive approach he exhibited during the weekend in Luxembourg and on his determination to ensure that the agreement at Maastricht can be signed by this country? That may mean compromises not just by ourselves, but by others for the sake of achieving the ever-closer union to which all 12 member countries are committed. Therefore, during the next few months' discussions on economic and monetary union, will my right hon. Friend try to get the emphasis not towards the goal that we do not necessarily foresee, but towards the means to achieve it? We as the Conservative Government are unlikely to object to a single currency if that is to what the market leads, but we want to know the means by which that might be achieved. That is the contribution which we can make to a successful outcome.

The Prime Minister : I share my hon. Friend's view on that point. We gain and lose from time to time on compromises. That has been the way in which the Community has always worked in the past and it will certainly work that way in the future. The only means by which to achieve economic and monetary union safely and securely is by the proper convergence of all the European economies over a period of time. That was mentioned on three occasions at least in the communique that we agreed over the weekend. It was also the subject of a lengthy and worthwhile discussion in our deliberations on Friday.

Mr. Win Griffiths (Bridgend) : Does the Prime Minister agree that, whatever federalism may mean specifically, in the European Community it is generally taken to mean the continuing process of the pooling of sovereignty on those matters on which that can be done appropriately? In fact, the Foreign Secretary said so at the weekend. Does the Prime Minister therefore agree that it can only be an English politician who can perversely and eccentrically say that federalism means the exact opposite-- centralism--in the English language? The only reason he is afraid of any discussion of this issue is that it will underline the centralist tendency of the state in the past 12 years. He is terrified of any discussion of decentralisation in the United Kingdom and the willingness to move to decentralised institutions in England, Wales, Scotland and Northern Ireland.

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The Prime Minister : I can only say to the hon. Gentleman that had he been present at our discussions on Friday he would not have phrased that question in that way.

Sir Fergus Montgomery (Altrincham and Sale) : Did my right hon. Friend see the opinion poll at the weekend that showed that the majority of people, irrespective of their political views, would rather have him negotiating for this country in Europe than the Leader of the Opposition? Does my right hon. Friend agree that the prospects that came out of the discussions in Luxembourg bode well for a harmonious outcome at Maastricht in December? Does he agree that that will give confidence to business men and investors in this country?

The Prime Minister : I believe that it is in everyone's interests that we are able to conclude these negotiations and remove at the earliest possible opportunity the uncertainty that faces business men and others. It is for that reason that, despite the formidable difficulties that still lie ahead, there is a general agreement that we should seek to reach an agreement at Maastricht the sooner the better and the sooner we can put it before the House.

Mr. Bernie Grant (Tottenham) : May I say to the Prime Minister that I was terribly disappointed that he allowed himself to sink to the level of Jean-Marie Le Pen and Jacques Chirac in his attacks against immigrants in Europe? What evidence does he have to sustain his contention that immigrants are responsible for increased crime, drug trafficking, terrorism and racial tension? Why was it necessary for the right hon. Gentleman to lump legal and illegal immigrants together and to suggest that, at 10 million, those people are equivalent to the size of the population of Belgium--the seventh largest member of the Community?

Why does the Prime Minister support racist and fascist police officers from Italy, Spain and France who wish to enter the United Kingdom in hot pursuit of immigrants and others ? Will he say clearly that the Tory party will not use immigrants as cannon fodder in the forthcoming general election campaign ?

The Prime Minister : The House knows me too well, and has known me for too long, to believe for one moment that the views that the hon. Gentleman sought to attribute to me are my views. They most expressly are not, and the hon. Gentleman knows that. He should not have expressed such views in that way.

There is legitimate concern in each and every country within the Community about what the outcome would be in the Community of a potentially massive immigration movement as a result of economic migrancy from south to north and east to west unless we take action to prevent it. I care at least as much as the hon. Gentleman about racial harmony in this country, and I do not wish to see it destroyed by the stirring up of old fears that have been put to rest.

Mr. Matthew Carrington (Fulham) : Does my right hon. Friend agree that the decisive and, we hope, effective action taken by the European Community over Yugoslavia shows the right way forward for a collective EC foreign policy, just as did my right hon. Friend's initiative for Kurdish safe havens ?

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The Prime Minister : Yes, I agree with my hon. Friend. I take the view as well that the Slovenes and Croats have a right to self- determination, but how that right is exercised must be a matter for discussion. We do not wish to see the civil war continuing. Indeed, we wish to see it stopped, and that is the first and most immediate duty of the troika of Foreign Ministers.

Mr. D. N. Campbell-Savours (Workington) : Why does the Prime Minister believe in a level playing field for competition law and not for employment law ?

The Prime Minister : I believe in a level playing field where that is in the interests of all European Community countries. We are saying that we do not want imported into this country employment law that would damage the employment reforms that we have made, which have been to the benefit of the work force and the economy over the past 12 years. Nor do we want employment legislation implemented within the Community where it would potentially cause the same damage as it would inflict in the United Kingdom.

Mr. John Butterfill (Bournemouth, West) : I congratulate my right hon. Friend on diverting the sterile argument about whether we should participate in economic and monetary union into the much more fruitful area of determining how we can achieve economic convergence. Will my right hon. Friend confirm that it is costing the German Government DM 150 billion a year to have monetary union with the former German Democratic Republic? That has cost the Germans a 7.5 per cent. increase in their general levels of taxation. Has any estimate been made of what it would cost us immediately in terms of increases in taxation here and in Germany if we were to proceed immediately to monetary union in the Community?

The Prime Minister : I do not believe that it would be a practical proposition to proceed immediately to monetary union throughout the Community. Given the differing economic performances of the countries of the Community, monetary union would lead to massive regional unemployment, a massive collapse in asset values, a massive amount of unemployment generally, a massive population movement and huge demands for an increase in structural funds to deal with those problems. It is not a practical proposition until there have been various convergencies. That is undoubtedly meant by those who shout from a sedentary position.

There is an analogy to be drawn, though not an especially accurate one, with the merging of the deutschmark and the ostmark. Essentially what we saw there was the takeover of a weak currency by a very strong currency, and my hon. Friend was right to draw attention to the difficulties that that has caused. The merging of a dozen established currencies is a far larger and more difficult operation to undertake.

Mr. Paul Flynn (Newport, West) : Will the Prime Minister guarantee some practical action to curb the new international arms race and to support the splendid sentiments expressed in annex 7 of the communique ? Is not it nonsense that while Britain has embargoes against many countries, it also supports the Chilean and many other Governments in their development of the multiple-launch rocket system RAYO in Buckinghamshire and Wales, even though the Chileans have announced that they will

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sell that weapon of mass destruction to any country in the world? Will the Prime Minister take practical steps to curb the greatest evil in the world--the international arms race?

The Prime Minister : It is precisely because we are seeking a greater level of arms control that that statement appears in the communique and we have taken other initiatives elsewhere. Of course, countries retain the right of self-defence, but we invite all those that export arms to take great care, as Britain does, over to whom they export arms.

Mr. Alan Haselhurst (Saffron Walden) : Does my right hon. Friend agree that the conclusions reached at Luxembourg amply demonstrate that my right hon. Friend--to use the term of the Leader of the Opposition--is "winning for Britain"? Is he not also winning for the development of a European Community that is sensibly and pragmatically based?

The Prime Minister : In our discussions within the Community on the two intergovernmental conferences, we have sought to lay down the right framework for the future development of the Community. That is an immensely important job over which it is worth taking considerable care, and we are seeking to do so.

Mr. Tam Dalyell (Linlithgow) : In respone to my hon. Friend the Member for Walsall, North (Mr. Winnick), was not the Prime Minister adamant that there was no question of the Community lifting sanctions against Iraq? Has the right hon. Gentleman read the absolutely spine-chilling report of the Harvard medical school, which asserts that 170,000 under-fives are likely to die this year? Because of the lack of generating plant and medicines, there is the most appalling risk of gastro-enteritis, typhoid, cholera and hepatitis. In those circumstances--and not even for humanitarian reasons, but for the sake of the general impression within the Arab world--should not the right hon. Gentleman reflect on his policy?

The Prime Minister : The hon. Gentleman may have been misled by what I said. Medicines are not covered by the present sanctions, so they can be sent to Iraq. Food can be exported with the approval of the humanitarian committee of the United Nations. Medicines and food should be going to Iraq, and they were not covered by my response to the hon. Member for Walsall, North (Mr. Winnick).

Sir John Wheeler (Westminster, North) : Does my right hon. Friend agree that firm immigration controls are essential for good race relations within the Community, and that some European countries are having to learn that lesson very quickly? Does he further agree that the problems of drug trafficking, international crime and serious crime more generally are very important? Did he also make progress with those issues?

The Prime Minister : I share my hon. Friend's views about the importance to good race relations of proper control of immigration. On the question of drug control, we examined and agreed to develop further the proposition by Chancellor Kohl to develop much greater co-operation between police forces in Europe specifically to combat the problems of drugs and other organised crime.

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Mr. Dennis Skinner (Bolsover) : Was it not rather ungrateful of the Prime Minister to double-cross the Bruges group on economic and monetary union when most of that group voted for him in the Tory party leadership contest? Many of them are absent today, for some unknown reason. What will be the response of the president of the Bruges group?

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