House of Commons Hansard Debates for 20 Nov 1991

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In the Community that we are putting together, poorer nations must learn to maximise the potential for their prosperity from the market opportunities that are opening up to them, and not by beggaring their neighbours.

Whatever treaty obligations are entered into at this stage, the Government must carry the British people with them. To ignore public opinion, especially in pursuit of abstract idealism, is the height of arrogance and political folly. Never must we underestimate the ability of the British people to stand up to bullies, to defend principle and, if necessary, to stand alone. For all our sakes, let us do what is right for Britain by rejecting now, just as did the peoples of eastern Europe, federalism and the single currency. 10.20 pm

Ms. Joyce Quin (Gateshead, East) : I am sure that, as parliamentarians, we are all greatly influenced in our views by different levels of loyalties--to our constituents, to our party, to our region, whatever part of the United Kingdom we come from, to the United Kingdom and, if we believe in an evolving European Community, to what we think are the best interests of the Community as a whole. Indeed, we should look wider than that, to the rest of Europe and to the world beyond.

I shall seek to evaluate the Maastricht proposals in the light of these different levels of loyalty to help me to decide whether what is on offer is worth supporting. I have never thought that the EC was intrinsically or automatically good or bad, as much depends on the effect of what is decided on our constituents and, indeed, on the people of Europe as a whole. As a result, I have regretted the frequent over-simplification that often takes place in European Community debates. Indeed, the oversimplification that is involved in the labels pro and anti-European is often unhelpful. I am not convinced that the new labels of Euro-sceptics and Euro-federalists are much more helpful, for "federalism" seems to be a misused and contested term. In my view, federalism, while having an element of union, is based very much on the principle of decentralisation. The term "subsidiarity" has been used during the debate. The Prime Minister seemed to describe the concept as denoting national versus European decision-making levels. To me, subsidiarity means taking decisions at the most appropriate level, whether it be European, national, regional or local. All levels of decision taking have an important part to play in our political process.

The over-simplification of the issues was part and parcel of a Gallup poll that took place last weekend. I and many other Labour Members were contacted and asked many over-simplified questions about our views on the European Community issue. I did not know at the time who had commissioned the poll, but I learned afterwards that it was the Conservative party. I strongly resent having my views sought in such an underhand way. I much prefer expressing my views publicly in the House to my constituents and others.

The main reason for many Opposition Members feeling more warmly towards the European Community now than they did in the past is the record of the Community in the past few years and the contrast between what has happened elsewhere in the Community and what we have seen take place in Britain. I believe that we have fallen

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badly behind in the three important areas of economic development, social policies and, sadly, the quality of our democracy. On economic development, we have failed to pursue the policies of partnership between Government and industry which are commonplace elsewhere in Europe and which involve not only management but trade unions and workers' representatives in a much more positive way than anything that has happened under this Government. We have fallen badly behind in terms of investment. We have higher interest rates, and recently we have also had rapidly rising unemployment compared with the rest of the EC.

On social policies, our record has been appalling : on that, I agree strongly with the points made by my right hon. Friend the Leader of the Opposition and by my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell), who has just come into the Chamber, who strongly criticised the Government's record on social policies.

It is clear that there are two different views in the House of what a large market should be all about. There is the Government's view, which seems to see a large market as an end in itself, and there is the view expressed by my right hon. Friend, which sees a large market as successful only if it improves the quality of life of our citizens.

The British people understand what is happening in the EC, and they understand that the Government have stood out against other Governments in blocking positive measures which would have benefited our citizens.

Three questions about the social dimension should be addressed to the Government. First, is it fair that bad employers should effectively be subsidised by the state? In the absence of a minimum wage, many of our constituents earn such low wages that they have to resort to state benefits on top. Why should the state subsidise bad employers in that way?

Secondly, how do other countries that have a minimum wage and a better employment rights structure manage to cope so well? Thirdly, have the Government forgotten that, in the preamble to the treaty of Rome, which they say they support, there is a commitment to the constant improvement in living and working conditions of the people of Europe? For me, a key test will be how far the social provisions can be incorporated into the Maastricht agreement. That is important, and I am glad that the Opposition's motion makes it so clear. Unfortunately, the only thing that seems to unite Conservative Members in this debate is their refusal to accept the social charter and the social measures which many of us feel are so important. The final element to which I wish to refer is the quality of our democracy, which has exercised the minds of many hon. Members today. In the past 12 years, we have become one of the most centralised states in the EC, which I greatly regret. I am dismayed that so little has been done to decentralise, when so many other EC countries have clearly felt the benefits, both economic and political, of taking the decentralised route.

One of the Maastricht proposals is the proposal to create a body to represent the regions of the EC. I recently asked the Prime Minister about that, and was rather surprised to receive the answer that the Government supported proposals in the intergovernmental conference for a new consultative body to represent the regions at Community level. I hope that, when the Minister replies, he will tell me how that representation will be decided. Will

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all the regions be represented as well as the nations of the United Kingdom? Can we be assured that those regional representatives will reflect the political majority in those regions and will not simply be Government nominees, as we have seen in so many quangos and regional bodies that have been set up in recent years?

The Maastricht summit gives us great opportunities for economic, social and democratic reform. However, the Prime Minister is not capable of obtaining a deal which will be to the benefit of the British people. He cannot have it both ways. He cannot claim on the one hand to be at the heart of Europe and at the same time want to be on the periphery of Europe and seem to want us to go at a slower speed than anyone else. That is an inconsistent position. If the Prime Minister really wants to help the British people, he should use Maastricht to give us a system which will promote balanced regional economic development throughout the United Kingdom, attack some of the social ills and divisions which beset British society at present and, finally, enhance not detract from the quality of British democracy.

10.29 pm

Mr. Churchill (Davyhulme) : I strenuously reject the suggestion of the hon. Member for Gateshead, East (Ms. Quin) that my right hon. Friend the Prime Minister is not the best person to negotiate on behalf of Britain at the forthcoming summit. I believe that the House will overwhelmingly register its confidence in his abilities in that role.

This remarkable and fine debate has thrown up some strange bedfellows, including the right hon. Member for Chesterfield (Mr. Benn) and my right hon. Friend the Member for Finchley (Mrs. Thatcher)--who found common ground on the question of a referendum. In the 20 years since the House voted to accede to the European Community--which is now the destination of no less than 52 per cent. of Britain's exports--it has become a major factor in world trade and international power-broking. It has more than fulfilled its founding fathers' two objectives : to rebuild the economy of a shattered Europe, and to bury the hatchet between France and Germany and so bind together the nations of Europe that they would never go to war again.

Those substantial achievements are already on the record. We are now on the verge of a new, exciting, and long-overdue step--the creation of a single European market. That has already been agreed, and it will be in place by the end of next year. In a typically British way, we have failed to take the credit that is due to us for that achievement, which had its origins in the Kangaroo group of Members of the European Parliament founded by the late Basil de Ferranti specifically to break down the trade barriers that existed in Europe at a time when none of the other major Community partners wanted to know anything about it. They rested secure behind their trade barriers, and it was above all a British initiative that led to the creation of the single European market.

After advancing at a snail's pace for many years, we suddenly find ourselves invited to participate in a Gadarene rush towards economic and political union. I have always believed in the cause of European unity. It was the issue that first brought me into active politics as

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long ago as 1964. I believe still that Britain's place is at the heart of Europe, although every time that puffed- up functionary, M. Delors, vouchsafes a little more of his vision of a centralised, bureaucratic, and socialist Europe, I confess that I have my doubts. For one who claims to be the champion of European unity, M. Delors is its worst advocate, having a unique capacity to raise the hackles of the British people. That said, let no one doubt Europe's importance to Britain. Once the channel tunnel is built, from my Manchester constituency alone, seven freight trains a night will leave Trafford Park for Europe.

Nor should we underestimate the importance of Britain to Europe, for we have much to contribute and not just to the agricultural fund. Some half a million of our sons lie in Flanders fields--our sacrifice against tyranny in Europe. And today we have a contribution to make in terms of our history of free trade, our outward-looking attitude to the world, and the weight of our tradition of parliamentary and democratic government stretching back over the centuries--something unmatched by any of our partners, for some of whom the very concept of democracy is of recent origin.

We stand on the brink of two momentous decisions at Maastricht. We are invited to sign up for, on the one hand, economic and monetary union and, on the other, political union. I agree with everything that my right hon. Friend the Prime Minister said today, and I wish him every success at Maastricht. I have little doubt, however, that, despite Britain's reservations, our partners will move forward to economic and monetary union, and to the creation of a single currency. It will be difficult, if not impossible, for Britain to stand aloof from that process without unacceptable damage being done to our economic interests. I happen to believe that the fears that have been voiced on that account are exaggerated.

I do not accept that the proposal represents a major surrender of sovereignty. Just as the dominions of Canada, Australia and New Zealand were able to conduct their own economic policies while belonging to the sterling area--having their own Chancellors of the Exchequer operating their own fiscal policies, and raising their own tax revenues--so Britain will retain a wide freedom of action, while enjoying the benefit of belonging to a currency and economy underpinned by what will undoubtedly be the strongest currency in the world.

But political union is a different matter. Thanks to our parliamentary system and the stability that it has given us, the British people have been spared the horrors of revolution, civil war and invasion for more than 300 years. In that we are unique. Our Parliament has prevailed in the face of fascism, Marxism and communism, where others succumbed.

Mr. Butterfill : And socialism.

Mr. Churchill : Indeed.

That, undoubtedly, is why the British people hold this Parliament--if not its Members--in such affection. But woe betide the Government, or the Members of this House, who sell our Parliament for a mess of European pottage. The British people will not accept the relegation of the mother of Parliaments to the level of the legislature of the state of Nevada ; but that is what is on offer to us if we go down the path of full political union. The House must retain control of those aspects of our national life

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that are properly dealt with here : above all, we must retain responsibility for key decisions about foreign policy and defence, and the issues of war and peace.

I have every confidence that my right hon. Friend will not sell the pass on those vital issues, and that, if need be, he will indeed exercise our veto. To paraphrase Canning, however, it is time to call into being eastern Europe to redress the balance of western Europe. In the present circumstances, it is more important to widen the Community--to include the nations of EFTA and the new democracies of eastern Europe--than to deepen the political union among the Twelve. I do not believe that those countries will be half as eager to abandon their new-found sovereignty so soon after regaining it. That is the path that we must pursue, with vigour and determination. We must build a free and democratic Europe, from the Baltic to the Mediterranean and from the Atlantic to the Urals : a Europe that will, however, respect the essential sovereignty of national Parliaments, and not trample them underfoot.

Mr. Butterfill : On a point of order, Madam Deputy Speaker. I am concerned about the welfare of certain hon. Members who, I know, would not voluntarily be absent from the Chamber, and who I fear may be detained elsewhere against their will. I refer, of course, to the Liberal Democrats, who I know would be here if they could.

Madam Deputy Speaker : I think that the hon. Gentleman is being facetious during time that is very precious to the House. To my mind, his is a bogus point of order.

10.38 pm

Mr. Doug Hoyle (Warrington, North) : I have never been fanatical about Europe, but I accept that we are now in Europe.

I was amazed by the performance of the right hon. Member for Finchley (Mrs. Thatcher). The speech by the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) was remarkable. We shall no doubt hear another remarkable speech from the right hon. Member for Chingford (Mr. Tebbit). Both right hon. Members seem now to be very anti-Common Market, yet they were in the Cabinet when all the moves were being made that led to the passing of the Single European Act and to the creation of the single European market.

One would not have imagined, listening to the speech of the right hon. Member for Finchley, that she was the Prime Minister throughout that period and that it was she who took us along that road. What she told us today was completely different from what she did when she was Prime Minister. She took us into the exchange rate mechanism at the wrong rate and at the wrong time. She did so for political reasons, in the hope of retaining her post as Prime Minister. She failed. It is difficult to believe that the former Prime Minister and her right hon. Friends, who were with her when they agreed to the single European market, never imagined that there would be demands for a single European currency or for a single European bank. If they did not, they must have been completely naive, which I do not believe for one moment. Neither the right hon. Member for Finchley, nor her colleagues who supported her, can escape from their responsibility.

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Whether we like it or not, to all intents and purposes there is already a single European currency and a single European bank--the deutschmark and the Bundesbank. We read today that the market is strengthening and that, if the Germans put up their interest rates, we shall do the same, which is the complete opposite of what the Conservatives want. However, that move will be dictated to us. What we should therefore be asking ourselves is whether we can derive any benefits from the position in which we find ourselves.

We must ensure that this central bank is controlled not by bankers but by politicians, in the interests of people. However, the Conservatives are completely against that. They are also completely against any improvement in social conditions for ordinary people. They are against people being given information about the company that they work for. When Leyland Trucks was privatised, Daf in Holland, and the trade unions there, knew a great deal more about it than we did. They were told at midday. They had already been made well aware of it. I do not see why employees should not have information on their work or why they should work dreadfully long hours.

I should like Norway, Finland and Sweden to join the EC--they would certainly give it a new dimension. I have no doubt that eastern European countries and the Soviet Union will join.

Mr. Rhodri Morgan (Cardiff, West) : What about the vodka made in Warrington ?

Mr. Hoyle : And very good vodka it is.

Europe must become wider and more democratic. The problem is that the Conservative party has negotiated nothing and accepted everything. I was amazed to hear a Conservative Member say, "We put into effect everything that happens in the market." The problem has often been that the Government have been absent from the negotiating table.

I hope that Europe will be a major issue in the forthcoming general election, when no doubt we shall see the return of a Labour Government.

10.46 pm

Mr. Ray Whitney (Wycombe) : The hon. Member for Warrington, North (Mr. Hoyle) said that he would prefer a central bank run by politicians. With all respect to him, if that central bank were run by his party, I would have the gravest apprehension about the state of the currency for which it was responsible.

Some years ago, a prominent European leader set out in extremely clear terms the future agenda for the European Community and pointed out that it would be crucial

"to heighten the consciousness among our citizens of what unites us" ;

that the development of the European Community was not just a matter of a trading bloc but a question of creating

"a series of new policies to promote the economic, social and political growth"

of the Community ; and that that meant

"giving greater depth to the Community in both its internal and external activities."

Those were the words of my right hon. Friend the Member for Finchley (Mrs. Thatcher) in a memorandum to her fellow Heads of Government in 1984. She was right then, and I believe that those views are right now.

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We are debating the deepening of the internal and external mechanisms of the Community, which will be the subject of Maastricht. The need to achieve more depth to those mechanisms is greater because the pressures on the European Community to make itself a presence in the world are so much stronger and the opportunities to do so are much greater because of the collapse and the changes in the Soviet Union and eastern Europe. The world consists of the three key blocs of the Americas, Japan and the Pacific and western Europe. The question is, are we, as my right hon. Friend the Prime Minister says, to be at the heart of the Community? There can be little doubt that, if we are not, we shall be in serious trouble--and not only in economic terms. Our impact in terms of policies and our security would be seriously diminished or, indeed, irrelevant. We are all concerned about the national interest. I urge all right hon. and hon. Members who are hostile to or deeply suspicious of the direction that the European Community is taking to consider how the national interest would be served if Britain were completely out of step. Let us consider especially the single currency. The tone of the debate has suggested that the single currency will arrive the day after tomorrow, but that is manifestly not the case. There are serious problems involved in harnessing a system that could incorporate, for example, Germany and Greece at the two extremes. Hon. Members have spoken about the huge problems to be overcome, such as divergence. Such a problem is much greater for those countries than for Britain. We could live more easily with the problems that will undoubtedly arise with a single currency than could Germany or Greece and Portugal.

I urge right hon. and hon. Members who have serious doubts about the single currency or when it may come--who knows whether it might be in four or five years?--to consider Britain's interests as a trading nation and what the leaders of business and industry in Britain have said. For example, Lord Alexander, the chairman of National Westminster bank, said that greater currency integration was a compelling impetus for this country. The Governor of the Bank of England stressed the importance of stability of currencies to this country.

I must tell my right hon. and hon. Friends who have doubts about the arrival of a single currency that there would be serious consequences for Britain if we were left out. The champagne corks would be popping in Frankfurt and Paris because of the damage caused to the City of London, which earns us about £4.5 billion every year. One of my hon. Friends said that we could become like Switzerland, but we cannot. That option is not open to us.

There are immense problems with the two conferences, but they are not difficult only for the United Kingdom. Yes, we are significantly different for reasons of geography, culture and history from the other 11 members, but their divergences are also important. It is not only the United Kingdom that has problems, and we are not alone in having to make concessions and compromises.

Some of my right hon. and hon. Friends have not given sufficient credit to the immense achievements already made by our negotiating team under the leadership of my right hon. Friend the Prime Minister. We have yet to see

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what the team finally brings home when the Maastricht negotiations have been concluded, but it deserves sincere congratulations. Many hon. Members have severe doubts about Britain's continuing collaboration in the move to closer union--none of us know what that will mean in the future--but it is an objective to which nearly all Conservative Members of Parliament have signed up through successive general elections and through various steps that our party has taken and of which it is rightly proud. We must continue to press for closer union.

People are beginning to say that we have gone on the wrong track. We must ask what the other 11 countries are doing. The European Free Trade Association countries, such as Sweden and Austria, want to join the European Community and are not content with EFTA. The countries of eastern Europe are knocking on the door of the European Community. Are those countries misguided? Are they mad? Are they all socialist? Are they all drunk? Why do they want to be ruled by faceless, unelected bureaucrats from Brussels? The answer must be that they have a point. There must be something about the ever closer union to which we have been attached for so long.

I urge my right hon. and hon. Friends who are doubting Thomases not to be afraid. The French are not frightened of losing their Frenchness by having a positive role in Britain. My right hon. Friend the Member for Woking (Mr. Onslow) suggested that there would be dangers in a British defence force being sent into military action against the wishes of the House. Of course that would be unthinkable, and it would be equally unthinkable for the French. That fear is a bogey with which we must not frighten ourselves. I urge my hon. Friends not to talk themselves into an unreal situation.

There are challenges and difficulties, but I am certain that we can get over them under the skilful leadership that has already been demonstrated. I warmly applaud what has been achieved by my right hon. Friends in the Government, and I shall have great pleasure tomorrow night in supporting them in the Lobby.

10.56 pm

Mr. Stuart Bell (Middlesbrough) : It is a pleasure to follow the hon. Member for Wycombe (Mr. Whitney). I hope that he will excuse me for not following his arguments because of the time limit. I begin in a sense where the Prime Minister left off this afternoon. He did not rise to any great heights in his speech. We should be grateful to him for giving us some detail about the Government's negotiating position in Maastricht, although he did not tarry long on the subjects of economic convergence or the social charter. He did not tell us, for example, whether he thought that the Government believed in real or nominal economic convergence. It is a fact that we can get our inflation rate down to the German inflation rate, but the Germans have a 2 per cent. growth in their economy, whereas we have a recession. That is hardly a recipe for economic success.

The Prime Minister should have told the House whether he believed in real economic convergence. To find a definition of real economic convergence, one has to look at the Opposition amendment. It refers to "high levels of employment" and "sustainable non-inflationary growth".

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In my view and in the view of many banks whose reports I have read, convergence involves growth of about 2 per cent. a year. Convergence consists of a

"balanced regional and national economic development"

and of "social cohesion".

The Prime Minister did not linger long on the social charter. The right hon. Member for Woking (Mr. Onslow) was rather churlish in his intervention in the speech of my right hon. Friend the Leader of the Opposition. It was clearly a bogus intervention, which ended up as a mini-speech. It was clearly intended to distract the Leader of the Opposition from his speech, which had vision and commitment. If Conservative Members had listened to that speech in the manner of a debate worthy of a parliamentary occasion, they would have understood the approach that has been developed by the Labour party. They would have been surprised that we have developed a positive approach to Europe whereas the Government are on the defensive.

It was left to my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell) to draw the attention of the House to the social charter, on which I should like to ask the Prime Minister a series of questions. Does he believe in freedom of movement within the Community? Does he believe in social protection? Does he believe in vocational training? Does he believe in protection of children and adolescents? Does he believe in the protection of elderly and disabled persons? Of course he does. I would not claim that he does not. So why does he not sign the social charter? Why does he not reverse the decision of his predecessor in Strasbourg?

Mr. Andrew Hargreaves (Birmingham, Small Green) : Will the hon. Gentleman give way?

Mr. Bell : I shall not give way, in view of the time.

We heard a remarkable intervention from the former Prime Minister which showed how quickly one can go rusty in the House of Commons and how bereft one can be of the parliamentary crib provided by the civil servants. The Prime Minister talked of swinging handbags and hardened cricket bats.

Mr. Morgan : The former Prime Minister.

Mr. Bell : The former Prime Minister--I fall into the same trap every time, and I shall come to the reason for that in a moment. Of course, they do not play cricket in Europe and people do not understand that language. Her speech was incoherent in its contradictions. Her remarks on a referendum for a single currency were remarkable from a person who was Prime Minister for 12 years. We heard an interesting intervention from the right hon. Member for Worthing (Mr. Higgins). He described parliamentary democracy and representative democracy, and ended by saying that he was gratified that the Prime Minister took the same view as him of a referendum. Tonight we heard on the nine o'clock news that briefings had been issued from No. 10 Downing street that a referendum was not ruled out. That may be the smack of firm government.

There was an interesting article recently in The Independent by John Pienaar, referring to the former Prime Minister's intention to speak in today's debate. The article said that if the present Prime Minister were to oppose the former Prime Minister--we must get our definitions right

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"one minister said. The party would roll over her. It just does. That is the way the beast operates.' "

The beast does not operate like that at No. 10 Downing street. I am reminded of the exchanges between Lord Home when he was Prime Minister and Lord Wilson when he was Leader of the Opposition. Some interesting and kind words were said by General de Gaulle about Britain. The right hon. Member for Shropshire, North (Mr. Biffen), who is not in his place, referred to General de Gaulle. When those kind remarks were made, Harold Wilson said of the Prime Minister, "He rolls on his back like a spaniel."

Today, the former Prime Minister made a speech and now the whole of Downing street is running from one end of the corridor to another saying that a referendum is not ruled out. That is hardly the smack of firm government. If the Prime Minister wishes to have a strong hand when he goes to Maastricht, he is going the wrong way about it. He gives the impression that he is not entirely clear about what he seeks to achieve.

The hon. Member for Stockport (Mr. Favell) asked whether one believed in a strong internal market or a federal Europe, or whether there was nothing in between. That dilemma has not been resolved in my mind or that of the Prime Minister. The Prime Minister made much of his internal market. A new Europe that is built on an internal market with no collective provision is a Europe doomed to failure. There can be no successful economic union for the citizens of Britain or Europe if there is no social dimension.

If, in years to come, we end up with a breakdown in law and order, barricaded in our homes, what good will be an internal market which happens to be economically successful? We would be living the life in the fictional account of life in New York, "The Bonfire of the Vanities"--extreme wealth and extreme deprivation. That will not be a successful Europe. Basing oneself on economics alone and a naked capitalism without the social dimension will be doomed to failure. We have heard a great deal about a new Europe. My hon. Friend the Member for Merthyr Tydfil and Rhymney (Mr. Rowlands) talked of a new European order. The Evening Standard tonight spoke of

"the plain-speaking guide to a new Europe."

In our national executive document dealing with monetary union, we also spoke about a new Europe. We are discussing not a federal Europe or a free trade area, but a new Europe. This new Europe, as the right hon. Member for Guildford (Mr. Howell) said, quoting Jean Monnet, should not be a Europe that gives itself the airs and graces of a nation state.

People such as Jean Monnet had a vision of a Europe free from war, and they had that vision, not for themselves, but for their grandchildren. They wanted them to live in a world and a Europe at peace. That is what they have achieved.

There is a saying in the republic of Ireland, "On the day, one will do the right thing." I am sure that, when the Prime Minister gets to Maastricht, he will do the right thing on the day. At that conference, he will sign documents that will lead not to a federal Europe but to the new Europe to which I have referred. It will be an interdependent Europe, based on the autonomy of nation states, linked through common institutions. It will not be a federal Europe, but it will be a new Europe all the same.

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In the past, there have been people who looked to the future and to the future of their children and grandchildren, and that is what we should be doing. We should set aside all the shibboleths, myths and fantasies that we have heard in the debate and get to the truth, which is a new Europe for our children and grandchildren--a Europe that is positive, outward-looking and economically strong, but has the social dimension that will make life worth living for future generations.

11.5 pm

Mr. John Butterfill (Bournemouth, West) : My right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) did the House a great service by reminding us of the past of the European Community, its origins and the tremendously brave aspirations associated with its founding. It is important for us to remember what an enormous contribution the Community has made to peace and stability, not merely in western Europe but throughout the world, and to give adequate weight to that perspective. Nevertheless, we must be practical. In considering further economic and political union, we must decide whether benefits are to be gained for this country by proceeding further down that path.

If we think about economic and monetary union and our present position in the Community, we realise that we are inextricably tied to Europe. When we joined in 1973, only 26.4 per cent. of our exports went to the Community. The Library tells me that the figure is now 53.3 per cent. Germany is our biggest trading partner.

Unless we were to change our existing policies radically, there is no way that we can resile from being inextricably tied up with the EC. That view is shared by the business community in this country. Let us consider the representations made to hon. Members before this debate by the Confederation of British Industry, the Institute of Directors, the City and all our major companies. They are telling us that we must proceed further with economic and monetary union. Some of our colleagues are uncertain about monetary union and are worried that going further down that path may lead to a loss of sovereignty. I ask them to consider that, in reality, we are being asked to behave responsibly : to eliminate budget deficits ; to live within our means ; and, to introduce convergence within the economies in the Community. All that is thoroughly desirable. Many hon. Members who have apprehensions would not disagree that that is a correct economic policy to pursue. They say that if we are forced into a straightjacket we will lose our sovereignty. Sovereignty to do what? To spend more than we can afford, to fritter away our national assets or to behave irresponsibly? I do not think any Member of this House would wish to retain that sort of sovereignty. Therefore, we have nothing to fear from economic and monetary union.

My right hon. Friend the Prime Minister has been busy negotiating on the ultimate aspect of that, which is a single currency. It is arguable whether in the foreseeable future we shall reach the necessary degree of convergence to achieve it. Even if we reach a point where the majority of member states feel that a single currency is a viable proposition, we will still have an option. The Prime Minister has negotiated that we may then opt in. I was

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puzzled earlier when the Leader of the Opposition said that he did not understand the difference between opting in and opting out. Once upon a time, Labour Members were most concerned about the difference between opting in and opting out.

This is a matter on which Parliament must ultimately decide. It should not be the subject of a referendum. First, the complexity of the issue makes it almost impossible to frame an adequate question for a referendum. Even if that could be overcome, we are concerned with the sovereignty of this House. Those who say that we would lose sovereignty must accept that a referendum would deny the sovereignty of this House. That is a contradiction in terms.

Mr. John Browne : Will my hon. Friend give way?

Mr. Butterfill : No, I must proceed.

I now come to political union. We can do many things together in Europe, either within or without the treaties. There are many advantages to be gained in co-operating with other member states to ensure that we do not behave in a way which damages each other's environment. Several hon. Members have rightly raised anxieties about the implementation of existing treaties. The enforcement of what we have already decided to do and the creation of a true single market is a legitimate concern of the EC. Policing, drugs, crime and terrorism are all areas where we could and should co-operate, either within or without the treaties.

At the same time, we must not bind the Community into such a tight form that it will exclude the future membership of the countries of eastern Europe and of the European Free Trade Association. It is essential to decide what should and what should not be within the competence of the Community. If we are to give people confidence that the Community should be given greater powers, it is absolutely vital that we define the whole principle of subsidiarity.

I do not believe that the definition proposed in the draft treaty should be acceptable to hon. Members. I offer them the definition that on 2 November The Economist suggested was appropriate : "All laws will be made at national or lower level except where flows across frontiers of goods, services, money, people and pollution make Community law indispensable."

That seems an admirable definition of what should constitute subsidiarity. It would give the general public as well as hon. Members confidence that we would not be subject to creeping encroachment of powers by the Commission. There is a legitimate suspicion that that has already occurred.

We must also decide what should not be within the competence of the Community. If we follow the definition provided by The Economist, there are certain matters that should always remain the subject of local or national control--for example, health, education and transport, except where that relates to inter-Community transport. We should retain control over social issues, such as the number of hours worked and rates of pay. There should be no minimum wages for us, let alone restrictions on part-time workers, worker directors and all the rest of the claptrap that we have had from Madam Papandreou. We should say a firm no to the proposals to extend Community competence to social affairs, but we should agree to increase the powers of the European Parliament. It should be empowered to control the activities of the Commission and it should have the right to initiate

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legislation in certain matters which are subject to unanimity voting--not majority voting--in the Council of Ministers. That would reassure those who are concerned about this issue.

Subsidiarity should be strictly defined in the treaty and it should not be subject to definition by the European Court of Justice in the event of disputes. I do not believe that 12 non-elected judges should have the competence to decide on something of vital national importance to a member state. We should consider seriously the suggestion made by some hon. Members, the Gaullists and the Irish, for a second chamber--a senate, composed of members of national Parliaments. They could decide on subsidiarity disputes. I accept that that chamber could do other things as well, but its primary role should be as an arbitrator. Such a body would be much more sensitive to the concerns of member states than non-elected judges in the European Court of Justice.

There is much more that I would like to say, but time prevents me from doing so. We need to have a vision of a much more united Europe, but that should not be accompanied by a great give-away of power. I am concerned about the Opposition's new enthusiasm for everything European. They believe that that means that they can get socialism through by the back door, but all it means is that they have become Mr. Delors' poodle.

The Liberal party--I am sorry to see that, once again, it is not represented in the Chamber--

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