House of Commons Hansard Debates for 19 Dec 1991

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misunderstanding the Act. I said that she may have misunderstood it, or she may have been misinformed, or she understood it and did not tell the House about it.

Perhaps we shall have some enlightenment from the right hon. and learned Member for Surrey, East, who was the Foreign Secretary at the time. He introduced the Single European Act at the Dispatch Box and spoke about streamlining and getting things through quicker. He knows that the criterion for the single market was the elimination of frontiers. If frontiers are eliminated in relation to any commercial matter, to any matter of specification or to any matter concerning markets, adjudication and the source of law are transferred from 12 centres to one.

I think that the right hon. Member for Finchley did not understand the importance and power of articles 8A and 100A. I must confess that, despite being a member of the Select Committee on European Legislation which studied the Act, I did not spot the explosive mixture of article 8A and article 100A. I charge the right hon. and learned Member for Surrey, East-- I am glad that he is here tonight--first, with supporting the right hon. Member for Old Bexley and Sidcup in saying that the Queen was not affected when in fact the Queen in Parliament was eliminated, and, secondly, with coming before the House with the Single European Act without either fully explaining it to us or, if he did, not knowing the effect of it. We now come to the third instalment in the dismemberment of the United Kingdom Parliament and the power of its people--the so-called "treaty of union". The treaty of union may be called the Maastricht treaty, but, as the House may know, it should really be called the treaty of Rome-Maastricht because in the two green volumes containing the treaty of union and the treaty on economic and monetary union, almost all the articles relate to amendments to the treaty of Rome. We shall have one small treaty of Maastricht and one much enlarged, beefed-up and fundamental treaty of Rome which will really be a union treaty. It will be the treaty of the constitution of the European union which is why it refers to European union.

I come back to my earlier point about Sidney Webb. The treaty will have almost entire power over almost everything that we can think of which has been so far the ultimate responsibility of the House. One day we shall ask the Attorney-General where the scope of the treaty does not run. My right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) efficiently gave us the list of areas affected which included culture, education and health. One can have reports on health and desirable standards, but how far does that go when it comes to voting money? In the Select Committee, we have seen what happens. We receive a report about the topic, then we get a programme of research, then a programme of co-operation and then legislation. We see the assumption of powers to an unprecedented and unforeseen degree. Just as I believe that the right hon. Member for Old Bexley and Sidcup misled us about the powers of the Crown and the constitution, and just as I think that the right hon. and learned Member for Surrey, East--I leave him to comment on this--may not have described fully and in a legal way the impact of the Single

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European Act, so I believe that the Prime Minister, either voluntarily or involuntarily, through bad briefing or through tactics, is trying to tell us that the magic word "subsidiarity" will save us from the final and absolute power which we shall now transfer to the European institutions.

When people come to us in our surgeries to ask about prospective legislation about which they have read in the newspapers, they will say, "What can you do about it?" We shall say, "We will go to the Scrutiny Committee and to European Standing Committees A and B. We will tell the Minister what we want, but there is qualified majority voting." They will say, "How can you stop it?" We shall say, "I am sorry. We cannot stop it." They will ask what they can do and some hon. Members will have to tell them to go to their MEP because in the new treaty there is a long-stop in co- decision. How many people will come to us when they have heard that? We all know that people will go where decisions are made.

We have here a treaty whose consequences I have tried to paint in a fair and objective way. However, just as in the past we have had two versions and the results have been unexpected, even by those who promoted the treaties, so it will be with this treaty, if it is endorsed. The House will lose its powers and so will the voters who sent us here.

6.26 pm

Mr. Quentin Davies (Stamford and Spalding) : It is always a great pleasure to follow the hon. Member for Newham, South (Mr. Spearing) in a European debate. As a member of European Standing Committee B, the material for which is supplied by the Select Committee on European Legislation of which he is Chairman, I take the opportunity to pay tribute to his tremendous work for us and for the House as a whole in that context.

I add my most sincere and warmest congratulations to the Prime Minister and to the Government on the extraordinary and remarkable treaty which they brought home from Maastricht. I cannot recall any major international negotiation on which one party came away with 100 per cent. of his desiderata. That appears to have happened on this occasion--

Mr. Giles Radice (Durham, North) : Come on!

Mr. Davies : I will demonstrate the truth of what I am saying if the hon. Gentleman will bear with me.

That great achievement is clearly the result of two factors. The first is the remarkable negotiating skill of the Prime Minister and of my right hon. Friends the Foreign Secretary and the Chancellor of the Exchequer. The second, which is no less important, is the willingness of our European partners to go a long way to accommodate us. That in itself is a reflection of the tremendous success of the personal diplomacy in which the Prime Minister has been engaged in Europe since he took office a year ago.

As a result of those two factors, we have not only a treaty which allows us the two major derogations that have played such a major part in our debate so far, but a treaty whose architecture and contents have British fingerprints all over them. The architecture is the intergovernmental structure on which I know that the Government set so much store.

Let me take three important elements from the contents. The first is the convergence criteria for economic and monetary union, which is an extremely well worked

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out British proposal which has been accepted by our partners. The second is the proposal that, for the first time, non- compliers with Community directives should be fined for their non- compliance. That has also been accepted. That, incidentally, gives the lie to the suggestion that British proposals are always of a centrifugal nature when they are not deliberately obstructive. This is a very integrationist proposal, but one which, I am glad to say, is also characteristically pragmatic and sensible. The third is the concept of subsidiarity which we, as the whole world knows, were instrumental, together with the Germans, in bringing into the treaty.

I should like to highlight four aspects of the treaty, of which the first is subsidiarity. The subsidiarity clause establishes a new and promising basis for the evolution of the Community. One thing that will flow from that is that the institutions of the Community will be able to concentrate on their own extremely important jobs instead of feeling that they have to justify their existence by continuing to extend indefinitely the periphery of their activities and interfering in the competence of individual member states. I hope that we shall shortly see an end to the kind of nonsense with which European Standing Committee B had to cope yesterday morning when we were discussing draft resolutions and recommendations on sexual harassment. I cannot think of a less justifiable waste of the Commission's bureaucratic resources than that, or of a more inappropriate interference in the area of proper competence of nation states.

I hope that from now on we shall begin to get from the European Court of Justice what I call "negative jurisprudence" and that the court will feel able, on the basis of the subsidiarity clause, to throw out initiatives which are inappropriate to and inconsistent with subsidiarity. I hope that we shall then not only have the existing positive jurisprudence, but negative jurisprudence also, with clear guidelines to remove the possibilities for mutual suspicion and disagreement between the member states and the European Community and its institutions, from which we have already suffered too much.

In that context, I hope also that subsidiarity will begin to reduce the suspicion that some hon. Members of all parties continue to have about everything that comes out of Brussels. I hope especially that that will help people to see that there is no fundamental conflict between our role and our constitutional importance and those of the European Parliament.

Under subsidiarity, it is clear that we, the individual member states, decide what functions should be devolved to the Community and what functions should be properly exercised by it because they can be exercised more effectively at Community level. Once the essential decision on giving a certain function to the Community has been made, the question of the weightings between the different institutions of the Community in the way in which they take decisions and carry out responsibilities within their area of competence is not a matter involving any further loss of competence or sovereignty of this House. We and the European Parliament exist on separate planes. We each have our own roles. It is fundamental nonsense to believe that there is some kind of zero sum game between ourselves and the European Parliament and that an increase in its powers is made necessarily at the expense of ours, and vice versa. I hope that we shall be able to discard that illusion.

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The second aspect that I should like to highlight is foreign policy. That must be the pre-eminent area in which we can be most effective as a Community. As an individual country, our scope for bringing our influence to bear and affecting the future course of events in different parts of the world is minimal and, in many cases, non- existent. However, as a Community we are enormously powerful. We are potentially one of the world's superpowers. If anybody came to this globe from Mars to study human affairs, especially in the political area, he would be enormously struck by the contrast between the economic Community which has been an economic superpower for some time, and the fact that, as a political power, the Community remains a minnow. That can and must change.

In the next century, I should like to see the European Community or the European Union--as we may come to call it--become one of the world's superpowers. Along with the United States and Japan, it should form one of the three essential poles of stability, prosperity and civilisation on this earth. To me, that is a noble and worthwhile goal, but we can achieve it only by developing effective mechanisms for a common foreign policy.

I do not pretend that I am totally satisfied with what is in the treaty on that subject or that I regard it as the last word. I am not totally confident that the Presidency acting alone will, in all cases, be able to provide either the resources or the continuity to enable us to develop that effective and coherent foreign policy. Although the Commission is not totally excluded from that area of the treaty, its restricted role introduces an element of artificiality. In foreign policy, it is unnatural to distinguish between the political and the diplomatic on the one hand and the economic on the other. Given that the Commission has responsibility for economic and trade policy and, if need be, for trade sanctions, it cannot be sensible to keep it out of the formulation of a common foreign policy. However, one must be grateful for the substantial step forward that has been taken, and I am.

I hope that we can celebrate the introduction of limited qualified majority voting by overriding the unacceptable Danish veto which, at present, is preventing the European Community from lifting its sanctions on South Africa.

Through my hon. Friend the Financial Secretary, who is now on the Treasury Bench, I should like to express to my right hon. Friend the Foreign Secretary my hope that we can inaugurate a common foreign policy by bringing our influence to bear on the events in Yugoslavia rather more effectively than we have up to now. Serbian aggression against Croatia has, up to now, been unrestrained and unsanctioned. Tens of thousands of people have already been killed. If it continues, the figure may be hundreds of thousands before long. The cities of Croatia have been destroyed, including Split and Dubrovnik, which are among the most historic in Europe.

The third aspect that I wish to highlight is the social chapter. I believe that the 11 have scored an own goal and that we have scored a remarkable coup-- [Laughter.] I have great regard for the hon. Member for Durham, North (Mr. Radice) ; he laughs, but I hope that he will listen to what I am about to say, with which I believe that he will find it difficult to take issue. I shall outline three simple propositions and should like to know with which one, in practice, he or any of his right hon. and hon. Friends wish to take issue. The first proposition is that one cannot regulate oneself into prosperity. The second is that

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if one starts to regulate the conditions and the maximum hours of work, one starts to affect the cost of labour, the demand for labour and how competitive one's businesses are. By definition, if one reduces working hours, one also reduces productivity, output, the demand for labour and, therefore, the country's level of employment. Those are simple propositions.

My third proposition is that if the Community as a whole decides to reduce its average productivity it will be less competitive than not only the other industrialised countries, such as Japan and North America, but the newly industrialised countries, and investment, whether from foreign or Community investors, will tend to go to other places. We shall thus undermine the basis of our future jobs and prosperity.

Sir Russell Johnston (Inverness, Nairn and Lochaber) : Could one not argue that Germany regulated itself into prosperity? By making generous social provisions, Germany created the industrial climate that has enabled it to be highly competitive.

Mr. Davies : The hon. Gentleman is quite wrong. Germany achieved, through free market policies--policies which this country began to implement only in the 1980s--the highest productivity levels in Europe in the 1950s and 1960s. It then decided to appropriate some of those productivity gains by means of social legislation. I accept that Germany has the least to fear from the introduction of the social chapter. The Germans, Dutch and other northern European countries are imposing on the rest of the Community the industrial costs which they have already accepted and which they can withstand because of their high productivity.

Anyone who seriously wants the Community to move forward to monetary union and a single currency must think seriously about the consequences of the social chapter on the potential viability of a single currency regime. Once a country denies itself the weapon of devaluation to compensate for lower average productivity, it is particularly important that economies within the Community with lower average productivity should be able to compensate by using their natural advantages. If those advantages are in the form of cheaper or more flexible labour, they should be allowed to utilise them. An effective integrated economy cannot exist without more flexible prices, markets and labour markets. History will pay great tribute to the judgment and resolution of the Government in fighting the nonsense of the social chapter which, in retrospect, will be considered a mistake.

I shall not list the potential advantages of a single currency because I spoke in the House three years ago about the advantages for trade and business and, therefore, output and wealth creation, and the advantages in terms of beating inflation. Those are now generally accepted. I had some difficulty following the Government when they said that there were political disadvantages. I see no threat to the sovereignty of the House through having a single currency or common monetary institution--far from it. After all, the fight for the sovereignty of the House in the 17th century was about this place being able to determine not monetary policy, but fiscal policy, which I shall continue to defend. Monetary policy was always a matter for the King and the responsibility of the executive

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branch. I pay tribute to the executive branch in this country because it has already given up the devaluation weapon and said that it is a self-defeating way of compensating for failure in the economy. Therefore, we lose nothing by enshrining that policy.

Mr. Gerald Howarth (Cannock and Burntwood) : My hon. Friend is quite wrong on this. The Government may have decided that membership of the exchange rate mechanism should be managed in such a way that we do not devalue, but if we wish to devalue, we can. My hon. Friend's remarks about a single currency alarm me greatly because I much admire his intellect, not to mention the fluency of his speech. But I urge him to accept that a single currency, as my right hon. Friend the Member for Blaby (Mr. Lawson) made clear the other day, means a massive transfer of political and economic power to the centre.

Mr. Davies : My hon. Friend and I share many ideas, including, I believe, those on monetary policy. Although the gold standard is no longer practical, it was not a bad thing. It was not a destructive episode in the monetary history of humanity. When we adhered to the gold standard, the House had no say in monetary policy because the money supply was dictated arbitrarily and objectively by the volume of gold discovered in the world. I doubt whether our predecessors in this place before 1914 thought that the powers of the House were compromised or undermined as a result.

If we are to adopt a single currency, we must achieve the theoretical advantages which are there to be grasped. If we are to achieve those in practice, we must first prepare the ground carefully. I pay tribute to the convergence criteria, which were largely a British proposal. Secondly, we should consider carefully the statutes of the monetary institution. The document before us goes a long way towards providing for the independence of the monetary institution, which will be a crucial element in the success of a single currency. However, I should like to go further and suggest that the minimum term of appointment of the governors of the institution should be eight rather than five years, to ensure that it goes way beyond the electoral cycle of any member state. I should prefer that the appointments are not given to the governors of the banks of individual member states. It would be undesirable if governors from the central banks of member states felt that they had, in some way, to be the advocates of the interests of their own member states. If the project is to be successful, it is vital that, as with the Swiss national bank, when the board of that monetary institution meets, it has only one consideration in mind--how to reconcile the requirements of price stability and liquidity in the Community as a whole.

Having achieved this excellent treaty of Maastricht and secured the derogation on monetary policy, by which the Government have set so much store, may I make a plea to them? In the morrow of great victory, will they show some equanimity and, above all, not give business in this country or abroad the impression that in practice we are any less committed to a single currency than any of the Twelve or that we are any less likely to be a part of it? If that impression were unfortunately given--I am sure that it will not be--investment from both British and international investors, would be deflected from this country and it would go to the continent to other areas likely to adopt the single currency. Moreover, in that

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event, it might become difficult to manage our parity in the years leading up to 1996-97. Those currencies which currently belong to the exchange rate mechanism and are not perceived by the markets as likely to join at least the first echelon of a single currency may come under pressure in the market. People will be reluctant to hold them, and that would have unfortunate consequences in the form of higher interest rates.

It is also important for the City to ensure that the central bank and monetary institution come here. I totally accept the assurances that I have received that the derogation negotiated at Maastricht does not reduce our chances of having the central bank in the City of London. I take great comfort from that assurance.

I look forward to this country being in the vanguard of the single currency because of the advantages that it will bring us and the Community. We shall be there thanks to the excellent monetary and economic management that we have enjoyed in the 1980s and will continue to enjoy for the rest of the 1990s under a Conservative Government.

6.48 pm

Rev. Martin Smyth (Belfast, South) : I shall mention some of the issues to which the hon. Member for Stamford and Spalding (Mr. Davies) referred, although there seemed to be a lack of logic in his remarks because he cheered the Government on while encouraging them to be careful.

Unlike the Labour party, my party was at least prepared to table an amendment to the motion, so I welcome the opportunity to speak in this debate. People sometimes think of Northern Ireland Members as isolationists, but we have always played a role within the United Kingdom. Although the United Kingdom is on the continental shelf, it has played a positive part in Europe's history. Our people have regularly rallied to save Europe from military and political dictatorships.

Religiously, to go to the other extreme, we were partners in giving Europe a living Christian faith. Northern Ireland, as part of the United Kingdom, shared in that significantly as the old Celtic Christian church sent missionaries throughout the continent, and there were Ulstermen in the Napoleonic war and both world wars. We are not isolationist, but we question whether incipient integration is actually the way forward.

Reference has been made to economic and monetary union, which have played a role in the discussions. Closet federal Europeans earlier maintained that the EC was merely a gigantic free trade area ; now they boldly affirm that political and monetary union were always at the heart of the treaty of Rome. The Prime Minister has returned from Maastricht and claimed that federalism and the opening of the door to a delayed decision on monetary union is the successful result of his able negotiations. What is the reality? Although the countries of the European Free Trade Association had worked out trade arrangements with the Community, recent decisions of the European Court ruled them to be incompatible with the treaty of Rome.

I shall take up some of the comments of the hon. Member for Stamford and Spalding on a single currency. I do not believe that it will necessarily enhance trade opportunities ; I think that those who have argued that have done so superficially. Japan has not found the fluctuations of the yen against the dollar and European currencies a serious barrier to its ability to increase

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exports. The United Kingdom sharply increased its volume of exports to the United States in the 1980s, when the dollar gyrated wildly. Let us compare that with our experience in the EC. I am glad that two Treasury Ministers are present. Perhaps the Chancellor, when he winds up, will he confirm that we have maintained a huge, if diminishing, trade deficit with the EC, amounting to a total loss since 1978--if my figures are correct--of £54,270 million, as against a profit in trade with the rest of the world of £75,186 million. Therefore, is it surprising that the Ulster Unionist party pleads for a wider vision and a clear protection of our interests and those of the old Commonwealth countries in any new European arrangements? During those 23 years, what one might term our membership fees in Europe have shown net outflow of at least £15,036 million according to the 1991 HMSO Pink Book. The Government regularly claim that they want value for money. Are we obtaining that in Europe? The Confederation of British Industry has stated that the agreement is good for business. British business and industry must sell itself better, certainly in Europe, and maintain its markets with the rest of the world, which may turn away from us as we turn more towards Europe.

Some might well say, "Ask not what Europe can do for the United Kingdom, but what the United Kingdom can do for Europe." However, it might be more salutary to ask : what part of Europe? Perhaps we can be of greater help by standing further apart from the new colossus, bridging the world with our American, African and Asian connections, as well as greater European contacts.

We should bear in mind one narrower aspect : the principle of subsidiarity, through which democratic processes should be devolved to Northern Ireland-- and I also echo the cries from Scotland and Wales. The European grants, correctly assigned to Northern Ireland due to its isolation within the market and its relative poverty, should not be gobbled up by parsimonious Treasury Ministers as they hide behind the concept of additionality.

I have for a long time been suspicious of the doctrine of gradualism in politics and the foibles of the Foreign Office, which uses the double-speak of diplomacy, as I saw in the Anglo-Irish diktat and now smell in Maastricht. We have been assured that major European policy decisions, especially on foreign affairs, will have to be unanimous. However, as has already been mentioned, Germany quickly broke ranks with the rest of the EC and the world over Croatia, which led, in the words of our Foreign Secretary, to "an acceptable compromise".

Perhaps we can find some hidden logic if we compare Chancellor Kohl's statement of 28 November when he said :

"European economic and political union is irreversible." His headlong flight to recognise Croatian independence also helped lead to the fragmentation of Yugoslavia--a part of Europe. Will other "acceptable compromises" be imposed?

What is the Government's view within the European family on those countries that have accepted and signed the treaty of Rome and the Helsinki agreement? Those treaties accept the territorial boundaries of member states, yet the countries that sign them blithely ignore their undertakings. Gibraltar is one such glaring example and, nearer home, the false claim of the Irish Republic is another. It broke the international agreement of 1925 and,

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in its 1937 constitution, made de jure claim over Northern Ireland. For years, that was shrugged off merely as an aspiration or dismissed as Unionist propaganda, not to be taken literally or seriously. Now the Belfast newspaper, the Irish News, argues for the retention of such a claim in articles 2 and 3, while the Dublin Supreme Court described the matter as a "constitutional imperative".

We have referred to promises and understandings given in the European context. Promises were given at Sunningdale in 1973 that articles 2 and 3 were to be withdrawn and were repeated before Hillsborough in 1985. The improper claim remains as a spur to terrorists, proxy bombers for those who see the claim as a "constitutional imperative".

What is the position in Europe, where we recognise each other as partners? I believe that the Irish Republic should join the democratic countries in the new Europe and renounce such a claim, as Germany did over Alsace and Lorraine. The reunited east and west Germany had to endorse the Oder-Neisse line before it was recognised. The Ulster Unionist position on that is clear from our amendment. We maintain the integrity of our nation as we promote better relations between neighbours. At this season of the year we should remind ourselves of the parable that neighbours are not simply the people who live next door, rich friends, or even merely those with whom we agree. In that context, I trust that we as a nation will continue to maintain our integrity and influence.

Madam Deputy Speaker (Miss Betty Boothroyd) : It is now almost 7 o'clock and the Standing Order limiting speeches to 10 minutes must be applied.

6.58 pm

Mr. Richard Shepherd (Aldridge-Brownhills) : It is an honour to follow the remarks addressed to the House by the hon. Member for Belfast, South (Rev. Martin Smyth). Like him, I am a member of a union. The United Kingdom of Great Britain and Northern Ireland is formed by people with one language, with sentiments in common and by their feeling and will to make it work. That is the union that I understand.

Today we are considering a union of Europe, and I do not know how to relate to it. I listened with interest to my hon. Friend the Member for Stamford and Spalding (Mr. Davies), who almost conveyed the impression that he had been parachuted in to an Amazonian jungle in which democratic accountability plays no role, and that we needed the benefit of a judgment on arbitrage and merger policy from New York city. Ours is a democratic country, in which democratic accountability lies at the heart of the relationship between the citizen and the state.

The House will have noticed how assiduous the Leader of the Opposition was yesterday in not speaking one word about democracy and how the peoples of this land hold their Governments to account. Nor did he raise one word about the history of his own great movement, about the fact that the working people of this country were urged to organise and to use their vote, through which they could change the policies under which they lived. In our democratic age, that is essential to the concept of our rule of law. We expect the law to be enforced, we expect it to be held because every citizen who lives under that law may change it.

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In the treaty of union, where is the mechanism by which we may change the law? Where is the mechanism whereby we may hold Ministers accountable? We have witnessed the reduction of a great Department of State--the Ministry of Agriculture, Fisheries and Food--to a branch office in Whitehall. Our farmers, seeking retribution or justice, and our consumers, who are equally seeking those concepts, now have to go to Brussels, for there is no way in which we may satisfy their aspirations. We have handed over that power.

My right hon. and learned Friend the Member for Surrey, East (Sir G. Howe), the former Foreign Secretary, advanced some curious concepts of constitutional independence. If constitutional independence is what sovereignty is, I do not know how one can reduce it by pooling it. That is a contradiction in terms. Sovereignty says nothing about the state one lives in, whether it is a democracy or an autocracy, but it means constitutional independence. That is what has been at issue since the Single European Act--I was not here before that--and today with the treaty of union.

I cannot give over any of the powers that I, as a Member of Parliament, elected by the citizens of Aldridge-Brownhills--and each of us elected by our respective constituents--was given when I came to this Parliament. Yet every leading member of the Government and the Opposition talks as if we were merely bankers. Our country, as a nation, has a spirit and will--it is much bigger than merely the mechanisms of markets. We are humbled and brought low by them, but the spirit of man--and I now have to say woman-- and the freedoms that we enjoy lie within our grasp as long as we hold this House. That is what we have lost, in the sense that the people scorn us because of the way we march to tunes through the Lobby. We can no longer represent their wills or their expression. Of course we scorn that. We came here knowing that, if injustice existed, we could set it right.

The Leader of the Labour party--of all parties--yesterday stood there and talked about passing away the power to redress the grievances of our citizens. The speed limit on our motorways was reduced the other day, and I give a cheer for that. For years, I have wanted the Government to reduce the speeds of lorries and buses going down the M1 and the M6, but Europe did it. It imposed it on our system of government, and now we cannot change it, whether it was right or wrong.

Since John Locke and the formation of our constitution through the late 18th and the 19th centuries, the question has been, where does authority lie? We do not have sovereignty in this House ; it is a shorthand for the sovereignty of the people. That is who we represent, and those are the arguments that we have to judge.

Is it not shaming that the leaders of great parties cannot tell us that they are asking us to set aside our ability to live under laws that we set? Hitherto, when they asked us to obey those laws, we have known that we could change them, but hereafter a combination of people with different languages, understandings and cultures can set, and are by combination setting, upon us standards, rules and laws which may be suitable for Greece, central or northern Europe, France or Spain but which are not right for us. We have a choice. So many hon. Members have poured scorn, but what makes a political society work? The greatest level of polity--political organisation--is democratic self-government. There is no higher form of government. One can expand

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the boundaries, and because it is the sentiment of the people that one should expand the boundaries, it has manifestly worked for nearly two centuries in the United Kingdom. We break that trust by handing over power to unelected people without any mechanism for changing their decisions. How can people have faith in us if we hold our job to redress the grievances of those who set us here as unimportant? I urge those on both Front Benches to reflect on how they can make up for that democratic lack. The great Labour party--which brought together militants, because it thought that they knew what they could do for the working people of this country--is scornfully setting democracy aside. I watched its bemused leader struggling with economic concepts which he can barely grasp. I say this with scorn, because the leader of the Labour party can no longer hold out to his people the prospect that they may change the law through this place. Were the Labour party to have the trust of its people, it could legislate for every item in the social chapter tomorrow. It could make that the central point of its election manifesto if it is so profoundly excited by it. Then it could justify to the people the costs and benefits associated with it.

Why does the Labour party want others to introduce those measures? Is it because the Labour party does not believe that it could convince the people, on its own terms, that those are meritorious things to do? We must ask the question, why? Is it because the Labour party feels that it could not convince the people but could achieve its objectives through a centralist bureaucracy in Europe--rather than through argument and persuading its own people?

Mr. Quentin Davies rose --

Mr. Shepherd : No, I shall not give way.

How do we control that process? No one is tackling that. Ministers are saying, "We good fellows will talk together, and we'll come up with a decision." What will happen? Let us assume that 100 per cent. of the people in this country dislike or profoundly object to a law. What do they do?

Let us think back to the proposition of the right hon. Member for Chesterfield (Mr. Benn), who reminded us of our history. We changed law by riot. That is not the way. That is not the sort of society that I would wish to belong to. The tensions of racism and fascism are rising in Europe- -all the things which we resolutely moved armies to defeat in the past. By holding on to that possession, the people of this country would be able to hold on to the banners of freedom. We have watched eastern Europe grapple for freedom and the liberty that we enjoy, yet I have heard the House of Commons talk solemnly as if this were merely a question of a pile of money at one end of a table or the issuing of financial intruments. It is not--it is about the spirit and life of a nation. I cannot let this go

down--sinking--without leastways an exclamation mark and a cry, "It is wrong."

7.7 pm

Mr. Bruce George (Walsall, South) : It is an honour to follow the hon. Member for Aldridge-Brownhills (Mr. Shepherd), who is a near neighbour. I hope that the

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Hansard writers will be able to capture the spirit in which his speech was given. It struck me as being very 19th century in its oratory, and I compliment him.

In many ways the hon. Gentleman's speech was 20 years too late, because the horse has bolted. The arguments about whether to join the European Community were won or lost two decades ago. I campaigned against continuing British membership in 1975, and we lost. I am not an enthusiastic European, but we cannot turn back.

We must try to meet many of the objections made by the hon. Member for Aldridge-Brownhills. Clearly the Community is not a democratic institution. However, the cry for a return to an era of independence and economic autonomy for Britain is not an available option, so we must make the best deals possible in the circumstances in which we find ourselves.

It was an interesting debate even before the speech by the hon. Member for Aldridge-Brownhills. The introduction by the Foreign Secretary--the thinking man's Jeremy Beadle--was exceptional. Once he got over the task of being his own warm-up man, he settled down to a logical and persuasive speech. He commented on the Opposition's silence in terms of tabling an amendment, but there has been a far greater and more dramatic silence from the right hon. Member for Finchley (Mrs. Thatcher).

I am delighted to participate in the debate, which is not part of the ratification process. There will be no treaty to sign for a couple of months, and I hope that the Government do not assume that, having won this debate, the task of getting Parliament to ratify is over, because we have not even begun the process. There is much life left in people who wish to argue further. This legislature does little to impress its views on the process of declaring war or peace or ratifying treaties. We probably have the least effective role of any western legislature. We shall have a greater role to play in the Community, but that role is not being exercised now.

This year has been epoch-making for the European Community at Maastricht, NATO at the Rome summit, and we are now witnessing the collapse of the Soviet Union. We were told that Maastricht was a victory for everyone and that for Britain it was game, set and match. A Conservative Member pleaded for magnanimity by the Government. Having won so brilliantly, perhaps we should throw a few crumbs to those whom we crushed yet again--the French and the Germans who need the solace of being able to tell their electorates that perhaps they got a little from the treaty.

Listening to the Prime Minister and the Foreign Secretary, and reading the deferential sycophantic press after Maastricht, I was reminded of an imaginary conversation between Napoleon and Stalin about who had the better newspapers. Stalin said that Pravda was better. Napoleon concurred, saying that if he had had Pravda he might have been able to convince Europe that he had won at Waterloo. The Prime Minister had more than Pravda at his disposal to convince the British public--I am not sure how successfully-- that he had won the debate.

Maastricht was a benchmark because after 12 years of Conservative government--the Conservatives have been in power for 50 of the past 65 years--we have finally been confirmed as a minor power. At one time we failed to cut a dash in the international arena, which caused a senior American politician to say that we had lost an empire and not yet found a role. We still do not cut a dash in

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international relations, and we are lucky if we can now cut a dash in European relations. That is probably the result of a failing economy.

The Prime Minister dug out Eisenhower to support his negotiating style. I looked at Stephen Ambrose's biography of Eisenhower and the Eisenhower diaries, and I urge the Prime Minister to read what Eisenhower thought of the British negotiating style in 1956. I suspect that these versions are rather less charitable than the one that the Prime Minister expressed yesterday. I applaud the Prime Minister for his success in maintaining the Atlanticist tradition of Europe. As the Foreign Secretary said, it was a damned near-run thing.

Two models were on offer at Maastricht. One was the Atlanticist model, in which NATO is the prime security organ for western Europe and north America. That is not a cold war NATO but a reformed, rebalanced NATO with new defence and arms control strategies involving the cutting of our forces and a reaching out to eastern Europe and the Soviet Union.

The alternative model, proposed by France with the connivance of Germany, involved a gradual move towards the European Community being the security organ for Europe. Thankfully, in Maastricht the Europeanists took second place and the Atlanticists won. However, it was not game, set and match because the French achieved many of their objectives. The issue will arise again in a few years when the Western European treaty is renegotiated. Having sustained NATO as the primary security organ, we must not allow those who are unsuccessful this time to win by stealth. We must not allow salami slicing of NATO powers gradually to transfer them to the Western European Union so that the WEU does not function, as we hope, as a bridge between NATO and the European Community. We must prevent the WEU from becoming the executive and military arm of the Community until such time as may emerge in future when we require Europe to be responsible for its own security. That time is not yet.

The French are basically wrong in seeking to embroil Europe in preventing Germany from reasserting its economic and military power. That strategy is bound to fail because it flies in the face of logic and history. History has shown that Germany has been constrained not by Europe, but by external powers--notably the United States. I am not making an anti-German speech-- merely pointing to the lessons of history. For military and political reasons, it is vital not to push the Americans out of Europe by over- accentuating the Europeanness of defence. We must keep north America involved in European security because we are kith and kin and belong to the same political traditions as Canada and the United States. It is pivotal to western security and interests that the United States should maintain its commitment to the security of the European continent. Eastern Europeans and the Soviets, or whatever we call them now, see far more clearly than many Frenchmen or Germans the great importance of NATO surviving for the foreseeable future. It is important not to allow what might be a temporary victory at Maastricht to be lost to those who do not want to attack NATO frontally but want to attack it by the back door. Such people have not necessarily lost.

NATO was satisfied with what happened at Maastricht, but the game is not over. NATO must formulate a proper

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relationship with the WEU. There was a meeting of Foreign Ministers today at which our Foreign Secretary was present. I hope that he was not in the frivolous mood with which he made his speech in this debate. As a result of that meeting, NATO has greater flexibility. It can attend meetings of the CSCE and has an advanced role in humanitarian assistance and emergency aid. I welcome that, because NATO has great relevance to the future. Tomorrow there will be a meeting of the North Atlantic Co-operation Council. It is a NATO meeting not of the 16, but of the 25. The power in security must lie with NATO and not with the European Community.

7.18 pm

Sir Geoffrey Howe (Surrey, East) : I congratulate my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd) on the quality of his speech, which was filled with passion. We all have a great deal of respect for my hon. Friend. Whatever our views on the matter, we are speaking for our people, for those whom we represent, and in that spirit I congratulate my right hon. Friends the Prime Minister and the Foreign Secretary on their achievement at the Maastricht summit. They obtained a result which was in the best interests of all the people of the nation, those in Aldridge- Brownhills as everywhere else. The result was also in the best interests of Europe as a whole. One is essential to the other and the Maastricht outcome is the fruit of the well-balanced and committed approach to Europe which is the hallmark of the Conservative Government.

While the principal virtues of Maastricht continue, apparently, to cause alarm in some parts of the country--Bethnal Green, Chingford and now Aldridge-Brownhills--they happily command support, as they should, much more widely. The first achievement is the establishment of a stronger framework for a common European foreign and security policy, on the basis that unanimity rather than majority voting should be the norm. The second-- the point made by the hon. Member for Walsall, South (Mr. George)--is the strengthening of a European defence identity. For the very reasons that he gave, we need to anchor a stronger Germany in a stronger Europe, with the Western European Union as an integral part of the defence component of the new European union, acting in conformity with the position adopted by the Atlantic alliance. I agree with him that we have secured the result that we need there. Maastricht also strikes the right balance in increasing the democratic legitimacy of the European Community by expanding the legislative and non-legislative powers of the European Parliament because, rather than being in competition with those of this House, they are supplementary to them. As my hon. Friend the Member for Stamford and Spalding (Mr. Davies) said, the House can take pleasure in the success of my right hon. Friend in securing a place for a number of important British ideas. They include the European ombudsman, the enhanced role of the Community Court of Auditors, the greater powers of the European Court of Justice to compel obedience to Community law, and a worthwhile subsidiarity clause. I agree with the hon. Member for Newham, South (Mr. Spearing) about the importance of that at the beginning of the new treaty.

Connoisseurs of these debates will relish the way in which these last two changes represent two different

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strands of British wisdom over the misleadingly simple and sometimes foolishly simplified concept of federalism. In the first place, the scope of potential federal activity has been limited, exactly as European enthusiasts would wish, by a tighter definition of subsidiarity. On the other hand, the power of the centre, the authority of Community law--probably the most federal feature of the unique Community constitution--has been substantially and rightly increased, exactly as insisted upon by the Euro-sceptics. I come next to what is by far the most important component of the Maastricht agreement--the acceptance that Europe, with or without this country, will have moved to a single currency by, at the latest, 1999. I say "will" although I agree with the hon. Members who say that nobody can be sure of that. I also agree with what was said by the right hon. Member for Leeds, East (Mr. Healey), which was endorsed by my right hon. Friend the Member for Chingford (Mr. Tebbit)- -that if things go well, a single currency embracing at least Germany, France, Benelux, Denmark and the EFTA countries is very likely by the earlier date of 1997. To establish a legally binding process leading to full EMU, backed by a clear end date, is a truly historic development and if it comes about, it will do more to build Europe as a concrete reality in people's lives than any other policy or initiative since 1958.

The truth is that, for all our rhetoric on either side of the House, Britain's destiny is crucially linked to the success or failure of the new monetary order that has been emerging since the mid-1980s in continental Europe. With every year that passes, those monetary arrangements have become more solid and, with that, Britain has become ever-more dependent on an economic system that lies beyond our immediate control. It is that which should have dictated our early entry into the exchange rate mechanism. Five years too late, we joined.

I am glad to say that, over the past 12 months, we have been more and more effectively engaged in the vital EMU negotiations. My right hon. Friends have been shrewd, pragmatic and effective in their pursuit of an EMU deal that would be acceptable not just to 11 but to 12 members. The form of EMU that has emerged from Maastricht bears the important imprint of United Kingdom priorities in a number of key respects. Making common cause, as we have, with Bonn and Frankfurt and thus forging a powerful alliance, we have ensured that full EMU will be open only to countries that meet strict convergence criteria, that monetary policy will be transferred only in stage 3, that price stability will be the overriding objective of the system, that the European central bank will be politically independent of all outside control, that there will be no EC-wide macro policy administered by what the French called a European economic government.

On all those points, EMU is clearly a project of Anglo-German design. It is difficult to believe that, in due time, an EMU that is good enough to attract a share of German sovereignty, as I believe it will, will not be good enough to attract a share of British sovereignty as well.

Central to our position over several years has been the insistence that Britain should not be obliged to commit itself at too early a stage to take part in the final move to a single currency. The Prime Minister's success in retaining in the treaty an emergency exit arrangement of that sort the right to take, at the appropriate moment, a

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