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beggared by a region in this country--the colonial region of the south-east. We Scouses are used to our city being called the capital of Ireland as a benevolent joke. Believe me, in the light of the Government's attitude to regional policy, in a national and a European context we are a Celtic fringe in the twilight of decline and neglect.I wish to address myself to social policy, referring first to another great deception--a wilful perversion of the intentions and extension of the social chapter in respect of union rights. The social chapter specifically refers to individual rights, not collective rights, and, indeed, there is the safeguard of the veto in respect of them.
There is another wilful perversion--a deliberate confusion of the failed and discredited democratic centralism of the eastern bloc with the great European tradition of democratic socialism, with which I am proud to associate myself and which underlies the social chapter. The Prime Minister referred to the critical question whether our social policies are made here or in Brussels. The people I represent would be far better off if they were protected from the social implications of unbridled capitalism.
Topically, this week we have seen the casualisation of labour, the destabilisation of an economy based on credit, the effects of that on the housing market--that was an important factor in the great repossession crisis--the fact that the typical mortgage is no longer based on a regular income, and the wider effects throughout the economy.
Who are the first victims? They are the economically vulnerable, who include many of those whom I represent. They lose their jobs, homes, services and welfare benefits. When one is in a hole such as the one in which they find themselves, one looks for another place. There is a better one available, in Europe, with its social dimension to the single market, outside of which we have no future. I refer not just to the people of my region but to people nationally, to the young whose future in the 21st century is our responsibility now. They are in no doubt which is the better place to which to go. On foreign policy, I agree with the Government--as my party agrees--that we must avoid immediate dislocating effects in terms of NATO in the short and, perhaps, the medium term. God knows there have been enough dislocating developments outside NATO, the EC and the Western European Union. Surely we must look to the longer term, to the converging economic interests of the European Community combined with the megalithic-- one might even say megatonic--scale of the EC economic bloc, especially when it is enlarged.
That will bring with it needs and responsibilities commensurate with the influence and power that it will have on a worldwide scale, dwarfing our national significance. We do no good to our people if we ignore that. The vaunting cries of victory over the other 11 in respect of foreign policy at Maastricht did not outlast the week, as Chancellor Kohl demonstrated with his determination over the recognition of the states in Yugoslavia.
There is a new edifice of foreign policy for the 21st century which needs to be set in place. It demands 20/20 vision--a clear vision of the future and not a myopia which can see no further than the narrow electoral advantage of the Tory party in an election campaign which can last no more than four and a half months.
In reverse order, I see the outcome of Maastricht as purblindness to the realpolitik of the 21st century ; in social
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policy, a betrayal of the rights to a decent quality of working life for our people--unless the Government deny that right--and in economic policy, an admission that the net result of 12 years of Conservative government is abject failure. For all the hurt, it has not worked.8.29 pm
Mr. Patrick Ground (Feltham and Heston) : This debate seems to have a quite different character from the debate that we had before the Maastricht conference. In that debate many hon. Members who are not standing for re-election expressed strong doubts and reservations about the countries of the European Community moving more closely together. In this debate, the majority of hon. Members who have been called to speak and who are standing for re-election--the hon. Member for Knowsley, South (Mr. O'Hara) is no exception--appear to have far fewer reservations and far less serious doubts about the process of closer union.
I certainly count myself among those who welcome steps towards closer unity in Europe, not because I believe that there is no hope for this country outside the European Community, but because I believe that by becoming part of a partnership in Europe we lose some of our independence but gain greatly in influence over a wider area. I believe that the deal is in this country's interest.
In party political terms, I am not sorry that the agreement that has been reached is one which largely unites the Conservative party and divides the Opposition so much that they could not even agree on an amendment to the Government motion but left it to the Liberal Democrats to table one.
I welcome the fact that the agreement that has been reached will prove acceptable to the overwhelming majority of hon. Members. I shall make three brief points about the terms of the agreement. First, I especially welcome the fact that the terms of the agreement with regard to foreign affairs leave this country free when necessary to take its own initiatives, but also serve to encourage the development of a common European Community policy when that is possible. Secondly, I welcome the fact that a framework has been found which will retain American involvement in the defence of Europe and, thirdly, I greatly welcome the further powers that are being given to the European Parliament. A sensible use of the powers of this House is to ensure that more useful powers are given to the European Parliament so that it can exercise functions different from those of the House but which will serve to keep the Commission more democratically accountable.
One of the principal criticisms that I have heard from the Opposition about the terms of the agreement relates to the monetary union provisions. The hon. Member for Edinburgh, Central (Mr. Darling)--and the hon. Member for Hamilton (Mr. Robertson) when he wound up for the Opposition last night-- implied that this country was likely to be left out of monetary matters as a result of our right not to move to a single currency. That is not so. All the obligations relating to monetary policy and economic convergence up to stage 3 will apply to us just as much as to other members and there is no reason to suppose that we are any less likely than other members to be ready to go ahead with a single currency in 1997. It requires a decision of the United Kingdom Government and of the
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United Kingdom Parliament if it is intended to move to stage 3 and notification of the decision to the Council places us in the same position as all the other members.The hon. Member for Hamilton said that a decision was required by this Parliament after the Maastricht treaty was drawn up next year and that that should serve as sufficient ratification by the House of the monetary union arrangements. I believe that Parliament is likely to make a much better- informed decision in 1996, if it is in a position to discuss the matter, than it is in 1992. That is a thoroughly sensible and justifiable way for a mature democracy to proceed.
The other main criticism advanced by the Opposition relates to the social chapter. The legislation extending over 150 years which has been passed by the House has shown our concern for all matters listed in article 118--the improvement of the working environment to protect workers' health and safety, better working conditions, equal opportunities for men and women and so on. This Parliament has shown as great a concern as any Parliament in Europe about such matters. On the difficulties of the social chapter, article 117 recognises the need to maintain the competitiveness of the economy and to take account of the diverse forms of national practices. Article 118 recognises that directives should avoid imposing administrative, financial and legal constraints in a way that would hold back the creation and development of small and medium-sized undertakings. Therefore, many of the Government's objections are in some way recognised in the drafting of the articles, but I believe that the Government's position was carefully considered and based on this country's bitter experience in the late 1960s and 1970s.
I do not believe that a British Government with the experience of trade union activities which we had in the 1960s and 1970s could be expected to sign an agreement consigning the task of agreeing such matters to an arrangement at European level between management and labour. I regret that the Commission failed to grasp the depth and strength of the Government's objections to such provisions. It is difficult to believe that other countries would wish to be involved in the troubles that we had in the 1960s and 1970s. It is difficult to believe that Communitywide discussions between management and labour should be the only way to resolve such matters for the purposes of the social chapter. It is clear that small businesses would be left out and that the competitiveness of individual countries could never be assessed if such agreements were the basis for future action. I believe that the 11 countries which have decided to go in a separate direction would not necessarily wish to proceed separately in such matters and I should like the Government to make a further attempt to repeat the argument to the 11 to explain their deep objections to those provisions and try to reach a formula for agreement about the social chapter. Such an agreement should not be impossible given the considerable achievements and negotiations that have succeeded on the rest of the treaty. I believe that the agreement as a whole marks a new step towards closer European union and that it represents acceptable and sustainable progress towards closer union of the countries of the European Community. I am pleased to note from the debate that the cause of closer union appears to be shared by most Members of the House.
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8.39 pmMs. Marjorie Mowlam (Redcar) : I begin by disagreeing with the description by the hon. and learned Member for Feltham and Heston (Mr. Ground) of the Opposition's two major objections. My hon. Friends the Members for Hamilton (Mr. Robertson) and for Edinburgh, Central (Mr. Darling) were not talking about the discussions on the opt-outs, but were saying that we would not be able to participate in the same way as the other 11 countries, because of the position that the Government have adopted.
Mr. Ground rose--
Ms. Mowlam : No, I shall not give way, because I have only 10 minutes.
On the social chapter, it is no use the hon. and learned Gentleman saying that the Government can introduce the changes. We have waited 12 years. To take one simple example, working women in this country do not have the maternity benefits that women working in other European countries consider a basic right. We have waited 12 years-- [Interruption.] You don't get pregnant, sweetheart. We have waited 12 years for that change, and it has not come. What the Prime Minister said in the Chamber yesterday was inaccurate--we are arguing not about the length of maternity leave, but about maternity benefits. As female Conservative hon. Members know, about 50 per cent. of women who apply for maternity benefit do not get it, because of the stringent qualifications. The social chapter could achieve such basic rights for women. That is why we are pushing for it, and that is why the other 11 countries are in a different position from this country.
Similarly, on the 48-hour limit on working hours, the Secretary of State for Employment has again misled the House with inaccurate statements. The argument is not that everybody should work for 48 hours. There are clear exemptions--for contracts, emergency services and so on. It simply says that people cannot be forced.
Early-day motion 426, which several hon. Members, including my hon. Friend the Member for Langbaurgh (Dr. Kumar), have signed, describes how a butcher in my constituency was sacked because he did not want to work more than 12 hours' overtime a week--he wanted to spend more time with his family. That would not happen if the directive were in place. That, and not anything else, is the meaning of such directives.
I shall concentrate on the impact of the decisions made at Maastricht on the financial services industry of this country. Hon. Members on both sides of the House know that financial services are a crucial part of our economy --17.5 per cent. of the invisible earnings in our GDP result from financial services, and 2.5 million people are employed in the industry. That is the highest number in any country in Europe, and it means that 11.5 per cent. of people work in financial services in this country.
I am not talking about the square mile alone, but about Manchester, Birmingham, Edinburgh, Glasgow, north Yorkshire and elsewhere. Financial services are a major part of our economy--a part which has managed to keep some vibrancy during the two recessions that the Government have created.
The Government's decision not to opt into the EMU has put a question mark over confidence in the future of London as the leading financial centre. I assure the House that we want to keep the City of London as the lead
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financial centre. By opting out of the EMU the Government have imposed a backward-looking perspective. They have made the British economy more vulnerable and the future role of the City of London more questionable--not only this year, but for the next decade. The Opposition still want to fight to bring the European central bank to the United Kingdom, but the Government have played this very badly. They took the European bank for reconstruction and development--that was bad chess playing by any definition. We have that, with a French president, which makes it more difficult for us to argue that we should have the European central bank--but we must do it.A Conservative Member and several of my hon. Friends argued earlier that a shift is taking place as the EFTA countries come into the Community, locating the centre further away from the east and back towards the north. We hope that that will help to keep the focus on London as a central player within Europe. The Government will have to push for that, but their record on financial services, both at and before Maastricht, is appalling. I will give two or three examples. There is the investment services directive and the capital adequacy directive. The United Kingdom asked for that directive. We tried again on Monday, but Department of Trade and Industry Ministers again failed to secure agreement. Having asked for it, they failed to deliver it. That ruins our credibility and any standing that we have in such negotiations. Such a history makes it difficult for us to argue our corner in Europe.
The insurance industry is another good example. The Government's ideological blinkers for the free market are worn at the expense of that industry. They talk about a level playing field, but our industry has to fight uphill in both halves, so it has its back against the wall, and will have for the next five years.
Takeover policy is another example. The Government care about the free market, at the expense of our industry. We should consider the poison pill in France, the structural relationship of banking to the financial sector and to industry, and the interplay in Europe. That leaves our industry unfairly exposed.
That is what the Government's negotiations in Europe have done, against a backdrop of decisions that have tied the hands of our financial services industry. The example of TAURUS--the transfer and automated registration of uncertificated stock--illustrates the point. It has taken the Government nearly 10 years and they still move the goal posts on TAURUS every three months. France dematerialised in a number of years. The DTI blames the stock exchange ; the stock exchange blames the DTI. The outcome is that our stock exchange is working at a disadvantage compared with those in the rest of Europe. Regulation does not protect the consumer ; it is costly to the industry. The record of regulation in this country is appalling. We have regulations, but we do not use them. The Government could have acted on many of the frauds that have taken place, but they have sat back and let those frauds continue. What do we see in the Financial Times today? We see Maxwell, Levitt, Polly Peck and Blue Arrow--they are all still up and running. We have regulations, such as the Company Directors Disqualification Act 1986, but the Government have not used them.
When other people in Europe look at London, they see a host of regulations and a Government who are not
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prepared to implement them--a cost without any consumer protection. Who would want to use London? This week there was the London futures and options case. There were six people involved, four of them on the board, and they were fined only £60,000 because, as it said in one of the papers, if they had been charged any more the financial hardship would have been too much for them. With that kind of performance, how can we hope that our futures and options can compete against the Deutsche Terminbo"rse and other markets in Europe?If we are serious about our financial services, we have to introduce some changes. The Department of Trade and Industry--with the set of Ministers that it has had year in and year out--has not had the leadership or implemented the infrastructure that our financial services industry needs.
As the next Government, we shall introduce a consumer protection directive during our European presidency in the second half of the year. We shall implement and use the regulations already on the statute book. As we have said elsewhere, we shall make certain auditing and accounting changes. But above all, we shall fight in Europe for our financial services industry, as the French do for Paris and the Germans for Frankfurt. The Government have left our industry exposed in a way that has lost 400,000 jobs in the past two years and will lose more jobs and more of the focus of the industry if it is left to the post-Maastricht attitude that the Government have manifested.
8.48 pm
Mr. Gerald Howarth (Cannock and Burntwood) : Substantial achievements have come out of the Maastricht agreement which are the result of the considerable skills deployed by my right hon. Friends the Prime Minister, the Chancellor of the Exchequer and the Foreign Secretary. The first is the exclusion of the social chapter, in which the hand of my right hon. and learned Friend the Secretary of State for Employment was so evident. That is undoubtedly a great fillip for British industry, as has been widely recognised throughout Europe. Far more importantly, the agreement has established the valuable precedent that, when some member states want to increase Community power, they do not need to dragoon other, unwilling member states to join them but can form an agreement outwith the treaty of Rome and beyond the reach of the European Court.
Secondly, establishing the right of the United Kingdom to decide whether it wants to join the single currency was the result of the stern resolve of my right hon. Friends, especially the Chancellor of the Exchequer, not to be browbeaten or to give in on the issue and risk the accusations of isolation and all the other nonsense. Before my right hon. Friend the Prime Minister went to Maastricht, he said that he would only bring back to the House a deal that he could recommend and that he would not sign otherwise. Yesterday, quoting Eisenhower, he acknowledged that we in Britain study the fine print before signing. As he and I worked at Standard Chartered Bank and I was involved in international lending, he will readily recall that we did not sign loan agreements until they had been meticulously examined. In the same spirit, I know that he would consider it right and proper--indeed, the bounden duty of every hon. Member--to study the treaties that he has brought back.
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That duty is even greater, given that the British public are denied access to the documentation. My secretary has been told today by the Foreign Office--I am pleased to see that my right hon. Friend the Foreign Secretary is here--that only one copy is available, and that the only way our constituents can obtain copies is by writing to the printer in Brussels. The House is more fortunate, as my right hon. Friends have ensured that a copy is available in the Library. It is most unsatisfactory that the general public are not clear about the precise technical details that we are called on to study, and the onus on us is great.I have always been concerned about what my right hon. Friend the Member for Finchley (Mrs. Thatcher) described so accurately as the "conveyor belt" to federalism. I have opposed almost every Euro-measure before the House since I was elected in 1983, including the Single European Act. Some may, therefore, describe me as a Euro-sceptic.
I have read the treaties and I have a number of profound reservations. I told my hon. and learned Friend the Member for Feltham and Heston (Mr. Ground) that I will stand again at the next election and that I do have reservations. Although I applaud the determination of my right hon. Friend the Prime Minister to keep options open to allow latitude to a future Parliament to decide whether to join a single currency, I have difficulty in sharing his view that we shall not be compelled by economic pressure to join when the time comes. Our membership of the exchange rate mechanism was partly occasioned by that same relentless pressure. My right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) made it clear that he would be part of that relentless pressure. I regard our management of membership of the ERM as having prolonged the recession quite unnecessarily.
As my right hon. Friend the Member for Blaby (Mr. Lawson) made clear last month, a single currency would be the quickest way to a federal Europe, requiring the most massive transfer of political and economic power from Westminster to Brussels. My right hon. Friends may be gambling on convergence not taking place and/or the German people waking up and refusing to act as the principal European paymasters. That is a dangerous policy and I wish that my right hon. Friends would spell out that they oppose the principle of a single currency.
The cohesion fund to be established under article 130d by the end of 1993 is intended to help out our Spanish friends. However, that same article permits the Council to define the
"tasks, priority, objectives and the organisation of the structural funds"
and could become another vehicle for providing United Kingdom taxpayers' money to assist our Spanish friends in taking business away from the United Kingdom.
My right hon. Friend the Member for Chingford (Mr. Tebbit) referred yesterday to the powers to be vested in the presidency. Under article E of the common foreign and security policy :
"The Presidency shall be responsible for the implementation of common measures ; in that capacity it shall in principle express the position of the Union in international organisations and international conferences."
Furthermore, there will be an obligation on member states that are members of the United Nations Security Council--ourselves and France--to
"ensure the defence of the positions and the interests of the Union"
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while accepting the responsibilities of ourselves and France under the provisions of the United Nations charter. As my hon. Friend the Member for Stafford (Mr. Cash) pointed out in an intervention in the speech of my right hon. Friend the Foreign Secretary, there is at least a recipe for confusion there. The article seems to require the United Kingdom and France to act as agents for other European countries, and in the long run it can only lead to pressure for the removal of France and ourselves from the Security Council, to be replaced by whichever nation happens to hold the six months' presidency of the union.Above all, there are two other issues about which I feel profoundly unhappy. The treaty on European union provides for the introduction of "citizenship of the Union". I thought that all Conservative Members were against anything other than voluntary membership of unions. Whatever my right hon. Friends say, that seems to mark a clear intention to establish a federal Europe. I am not a citizen of the union, and I do not wish to become a citizen of the union. I shall remain a citizen of the United Kingdom, a status which, I suspect, the vast majority of my fellow countrymen wish to maintain.
Ms. Mowlam : It is not a union.
Mr. Howarth : It is indeed a union. I will explain how a union works, and why I am opposed to federalism. I will quote Professor A. V. Dicey. He said that two conditions were required for federalism to work. He said that there must first exist
"a body of countries so closely connected by locality, by history, by race, or the like, as to be capable of bearing, in the eyes of their inhabitants, an impress of common nationality."
That seems as true today as it was in the 1880s.
Another important issue is subsidiarity. My right hon. Friend the Foreign Secretary says that there has been a sea change in Europe. Would that he were right. It is common ground that in this country we want to limit the power of the Eurpoean Commission severely, but given that the definition of subsidiarity will most probably be tested in the European Court, which has a record of seeking to extend Community competence, what assurances can my right hon. Friend give us about the advice that he has received as to how the European Court would be likely to construe what is at best a very vague clause? My right hon. Friends have done well to remove the word "federal" from the text of the treaty, but we should delude ourselves if we believed that we had stopped federalism in its tracks. Many of our continental partners have made it clear that their federal ambitions remain undiminished, and they will simply come back at the next opportunity to gain some of the territory that they failed to take at Maastricht.
Most people in this country are happy to go along with a Common Market in which the United Kingdom has led the way. However, seeing the break-up of the Soviet Union, and seeing what is happening in Yugoslavia, they ask themselves what on earth is the merit in the nations of Europe trying to put themselves into a similar straitjacket, which could lead to all the difficulties to which Conservative and Opposition Members have drawn attention. The people of Britain will not accept a United States of Europe. My fear is that we are still on the European conveyor belt and that each attempt to deepen the
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Community will frustrate my right hon. Friend the Prime Minister's admirable determination to widen it. My own view has consistently been, "thus far and no further". We have nothing to gain from the new treaties and we should, in my humble opinion, have been better off rejecting them totally. In so far as we have not been able to do that, I much regret that I shall not be able to support the Government in the Lobby tonight, but in recognition of my right hon. Friends' undoubted efforts I shall not vote with the Labour party, whose intellectual dishonesty is apparent in its repeated U-turns on Europe and in its fawning subservience to every socialist measure emanating from Brussels.The House and the country will be most interested to see that there is no amendment on the Order Paper tabled by the Leader of the Opposition. The Labour party cannot get its own people united in the Lobby, so it has not had the guts to table an amendment. The people of Britain should be warned : the Labour party is so supine and devoid of policy that, if elected to office in this place, it would probably hand over the rights of this Parliament without a whimper. 8.58 pm
Mr. Andrew Hargreaves (Birmingham, Hall Green) : In the two minutes that have been allotted to me before the Front-Bench spokesmen reply to the debate, I should like to make a few points. I hope that I shall not work over the same territory as other hon. Members have explored.
Despite all the party politics, many hon. Members of all parties are deeply concerned about some elements relating to the concept behind this debate. Although many hon. Members have touched on the fear of a deficit of democracy, I have not heard any hon. Member refer to how Britain will try to do something in the new Europe to correct that deficit. I hope that my right hon. Friend the Chancellor of the Exchequer and the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) will say something about their ideas for correcting that deficit of democracy.
There is perhaps a common purpose in the House in that we all feel that minority groups in the new Europe of institutions may face danger. I speak about minority groups because I represent a Birmingham constituency, as does the right hon. Member for Sparkbrook, who will reply on behalf of the Opposition. Minority groups in this country might have something to fear, because I do not get the impression that the new Europe is becoming more tolerant. In fact, I get the reverse impression--that as a result of proportional representation, racially intolerant parties are now emerging in Germany, France, Denmark and Belgium. Although we all need to guard against that intolerance, that result leads me to take issue with Liberal Democrat Members on the subject of proportional representation.
I turn now to the concept of the two models of Europe, to what has been referred to as the "Atlanticist Europe" on the defence side and to the concept of "Fortress Europe". I am glad that we have adopted the Atlanticist approach because, despite the impression that one gets from Paris, all attempts to convert us into Fortress Europe will lead to disaster.
The Commission has distorted some of the better aims of the European Community. Its gradualist and centralist approach has converted the idea of a federation into
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something with which many of my hon. Friends take grave issue. However, as some hon. Members recognise, other parts of Europe have a totally different understanding of the word "federal".Turning to the concept of subsidiarity, I should like to outline the benefits of the pillared structure or approach. That is a safety valve for the impetus to centralism. If individual Governments feel that pressure points are building up, the pillared structure enables them to do something concrete about it within a framework that is co-operative rather than compulsory or based on coercion. Many of my hon. Friends are worried about much of what we are being "persuaded"--on the basis of coercion--to adopt in Europe. The pillared structure would lead to greater co-operation, not coercion. In that respect also, subsidiarity acts as a safety valve for those who seriously doubt--
Mr. Derek Enright (Hemsworth) : Will the hon. Gentleman give way?
Mr. Hargreaves : I shall not give way to the hon. Gentleman because I have only a little time and wish to conclude on this point. Subsidiarity acts as a safety valve for matters about which many of us have serious doubts. Despite those doubts, I feel that my right hon. Friend the Prime Minister has achieved a masterly stroke at Maastricht by providing us with those structures.
9.3 pm
Mr. Roy Hattersley (Birmingham, Sparkbrook) : Until my act of brief but uncharacteristic generosity to my neighbour, the hon. Member for Birmingham, Hall Green (Mr. Hargreaves), I had hoped to speak immediately after the hon. Member for Cannock and Burntwood (Mr. Howarth) because I wanted to make two comments about his speech. First, I was touched by his faith in the communication of the media when he said that every person in the country would be speculating tonight why the Labour party had not tabled an amendment. They are worried about inflation, unemployment, the collapse of the manufacturing industry, bankruptcies and mortgage foreclosures and the hon. Gentleman thinks that they will be worried about why the Labour party has not tabled an amendment. Secondly and more importantly, I wanted to reminisce with the hon. Gentleman a little. He concluded by saying that it would have been better if the Prime Minister had not put his signature to the treaty. When I acted as a PPS--admittedly some years ago--I always considered it my duty to reflect the views of the senior Minister on whose behalf I ran the errands. I wonder whether the hon. Gentleman was doing exactly the same.
May I apologise first on behalf of my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), who should have wound up the debate but who, regrettably, must attend a family funeral. My second apology is more personal--it is for my influenza, which makes me sound almost as much like my "Spitting Image" puppet as the Home Secretary behaves and looks like his. I may fail to convert Ministers this evening, but I shall almost certainly infect a few.
The Prime Minister went to Maastricht with a single ambition--to paper over the cracks in the Tory party. In the pursuit of that aim, the national interest was neglected, the real chance to be at the heart of Europe was thrown
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away and the right to influence the inevitable progress towards monetary union was sacrificed. All that mattered was preserving the illusion of Conservative party unity. The Prime Minister has failed to achieve even that sad little objective. That is not surprising, for any sensible person would have realised that the right hon. Member for Chingford (Mr. Tebbit) would glory in biting the pathetic hand that tried to feed him. Anyone who watched him gesticulating when the Home Secretary spoke about the unity now sweeping through the Conservative party would have realised that, for reasons of psychology rather than ideology, he was bound to do what he will do this evening. Yet to obtain a few extra votes, the opportunities were missed and Britain was voluntarily relegated to Europe's second division.The Prime Minister went to extraordinary lengths to accommodate the ungenerous little Englanders in the Conservative party. His most disreputable tactic was to attempt to make their flesh creep with the pretence that to join their partners in Europe in endorsing the social chapter would promote disputes over pay and encourage strikes. That was his clear message to the country on at least two occasions. It was his clear message to the House on 12 December, recorded at column 982 of Hansard, and when he was tackled on it by my right hon. Friends he wrote back saying that he did not mean strikes or disputes, but objected to other aspects of the social chapter--mainly the increase in costs that it would impose on British industry. A week ago the Prime Minister spoke in the House about strikes and implied that they would be promoted by the social chapter, so he must have known that article 118(6) of the protocol makes that impossible. I shall read it to the House in case the Prime Minister has another lapse of memory, as he does when they suit his political convenience. It says :
"The provisions of this Article shall not apply to pay, the right of association, the right to strike or the right to impose lock-outs."
Had the Prime Minister had the courtesy to attend the winding-up of the debate, he would no doubt have tried to justify why, only a week ago, he intentionally pretended something quite different. No doubt when the Chancellor of the Exchequer winds up he will summon up all the sincerity of which he is capable-- [Laughter.] I make no comment on how much that is. No doubt the Chancellor will say that what was done last week was all for Britain. If he wants to convince us of the Government's integrity, he had better begin by answering the question which my right hon. Friend the Leader of the Opposition asked him yesterday and which he so shamelessly refused to answer. The Chancellor has had 26 hours to think of a reply that should take only a few seconds, for all that he has to say is yes or no.
I shall repeat the question in exactly the form that it was put to him yesterday and ask whether there are
"circumstances in which, despite the achievements of convergence, despite the establishment of monetary union by our neighbours, he would come to the House and recommend that we still stayed out?"--[ Official Report, 18 December 1991 ; Vol. 201, c. 291.]
Earlier today, in the absence of the Chancellor of the Exchequer, the Foreign Secretary essayed an excuse and said that it was only sensible to decide at the time and that we should make up our mind when the time comes. If that is the Chancellor's position, we should be told what the test will be when we get to 1995, 1997 or 1999. The
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Chancellor should explain the criteria against which he would personally measure the question : do we go in or stay out? We already know the four criteria of convergence. What are the additional ones that the Chancellor has in mind and that lead him to believe that he should make up his mind then rather than now? If his answer is that, yes, there are circumstances that might lead him to say that Britain should remain outside despite the union being created and the single currency being in place, I hope that he will explain those circumstances.The Chancellor might oppose our entry in principle an honourable and plausible position. I do not hold it myself, but if the Chancellor were to say that we must stay out whatever the price and whatever the cost to Britain's prosperity, as a matter of principle, we could at least applaud his frankness. He might even be suggesting that, at the end of the decade, even if convergence had been achieved, the economy would be so weak that we dare not join the monetary union. I understand why the Chancellor might take that view. One of the measures of convergence, article 1, is the requirement of price stability. The Government are pursuing that objective by collapsing the real economy. Unemployment has increased massively according to today's figures. Manufacturing output is 5.3 per cent. down, and manufacturing investment 12 per cent. down, on last year. There have been 110,000 company liquidations this year--more than ever before and more than the number of new companies created. I understand that that decline has been confirmed in a report of the Organisation for Economic Co- operation and Development published at 6 o'clock this evening. If the Chancellor is really saying that he needs time to worry and wonder about membership as, after 12 years of Conservatism, the economy cannot stand it, he had better tell that to the country and the House here and now.
I suspect that the Chancellor's honest answer to the question of my right hon. Friend the Leader of the Opposition is no. I suspect that there are no circumstances in which, despite the achievement of convergence and despite the establishment of monetary union by our neighbours, he would come to the House and recommend that we still stayed out. However, to admit that would not only alienate some Conservative Back-Bench Members, but expose the Maastricht negotiations as a pathetic sham.
The Chancellor must know--of course he knows ; he admitted it yesterday-- that there is no question of our going in before convergence has been attained. If we would or should go in when convergence has been attained, the opt-out becomes wholly meaningless and the pretence of negotiating success cobbled together to impress the gullible 1922 Committee has no meaning. Selected newspapers declared it a triumph, but none of us should be surprised by that. It struck me as I read some of those newspapers that some hon. Members might like to play a word game with their families during the coming Christmas recess : describe the circumstances which could make the Daily Mail and the Daily Express turn against the Prime Minister. Those who fear that the answer is too horrible to contemplate may accept my answer--he could revoke the editors' knighthoods.
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Sir Peter Tapsell (East Lindsey) : Would the right hon. Gentleman care to describe the circumstances in which the Daily Mirror might turn against the Labour party?
Mr. Hattersley : No, I cannot. I cannot recall the circumstances in which genuinely independent editors of any political persuasion have thought it right to accept knighthoods from Governments, because it means that they no longer occupy that position.
I am pleased to welcome the Prime Minister to the debate with the news, which I was about to give to the House in his absence, that when the election comes, as long as he can still blink the Daily Express and the Daily Mail will be on his side.
The way in which the newspapers behaved after Maastricht demonstrates how shoddy the whole operation was. I take my example from the Daily Mail simply because I welcome any excuse to quote its headline of9 June last year--the day after the Prime Minister made his daytrip to Saudi Arabia, an event heralded in the Daily Mail with the headline, "The grey fox of the desert". The Prime Minister is many things, but Lawrence of Arabia he is not. Last week the Daily Mail told us, "Major wins a knockout." That reminded me of an earlier Daily Mail recording of an international triumph on 9 April, "Major's plan saves Kurds." I hope that that headline is a comfort to the refugees who are now dying of cold, disease and hunger. The reason why the Prime Minister triumphed in those achievements is that he lives for the moment. He has no vision of the Britain or the Europe that he wants to build. When he used the word "vision" at the end of his speech yesterday, it had no credibility and carried no conviction. He talks about being at the heart of Europe, not because the idea inspires him, but because his advisers have told him that it is a profitable thing to say.
Yet one day the United Kingdom will join the single currency : I have no doubt about that. Tory dissident after Tory dissident has warned of it. In the past two days Government supporters have predicted that Britain will join. Now that the Eleven have signed the treaty, progress towards a single currency is inevitable and I rejoice in that. The tragedy is that, as the others make progress, we shall not go with them but shall be dragged along behind.
Mrs. Gwyneth Dunwoody (Crewe and Nantwich) : Can my right hon. Friend envisage no situation in which a Labour Government might have reservations about a single currency and a central bank and about economic decisions being taken which might be inimical to their interests?
Mr. Hattersley : I made my position clear and I am happy to repeat it. I rejoice in the progress towards a single currency and in a few moments I shall talk about the sort of system that I want and that will benefit the country.
Earlier the Foreign Secretary said that it was wrong to suggest that by opting out of the single currency we would not continue to influence policy. Is he suggesting that the Eleven, committed to making progress, will even contemplate the bank or the institution coming to Britain? As my hon. Friend the Member for Durham, North (Mr. Radice) said in a notable speech, we have already lost the chance to determine the date on which stage 3 will be implemented and we are losing influence all the time.
By committing ourselves to the objective that I have described, we will not reduce or lose our sovereignty. I do
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not want to add to the Chancellor's problems, which seem to come not singly but in battalions, and with that in mind I ask him whether he was totally unmoved by today's announcement of an increase in the German base rate, or did he feel that somehow that increase might be of concern to us, might influence us or might have a determining effect on some of our economic policy? I have no doubt that, formally or informally, we are now locked into the European economic system. That is why we should be part of the process that brings about the single currency. We should have chosen to influence the inevitable union in a way that benefits Britain, but instead of that we have abdicated.The cliche is that we missed the bus, but that is only part of the problem. The real tragedy is that we are destined to run along behind it and one day scramble on board even if it is then deviating from the route that we would have chosen. We should have learnt the mistake of that posture from the common agricultural policy. Now that the tyrannies of eastern Europe have collapsed, the CAP is perhaps the world's worst example of the centrally managed market. This year it will cost Britain £1.225 billion net. If we had joined the EC earlier and had been signatories to the treaty of Rome, when the CAP proposal came along I have no doubt that we would have been able to moderate the absurdities which cost this country so much money and which so discredit the whole operation of the Community. We are making the same mistake again by letting others take the decisions and then following on later.
The Prime Minister should have gone to Maastricht with a positive message for his European colleagues. The message should not have been that we would sign up for a single currency at any price. He should have made it clear that Britain would join when the Community co-operated in creating the conditions that made the single currency an unqualified benefit for this country. In a phrase, that means the ability of all member states to sustain adequate rates of growth and employment without incurring unsustainable current account deficits. Among other things, that requires the Community to develop and adopt a more positive regional policy. As my right hon. Friend the Leader of the Opposition said yesterday, it should do that in part by financing it from the funds that now subsidise incompetent and inefficient agriculture. But there are other funds available in Europe, some of which we understand the Government are refusing to accept. If the Secretary of State for the Environment is to be believed--and who in the world ever doubts a word that he says--the Government have rejected £100 million of regional aid in what the Secretary of State for the Environment calls a monumental own goal. The Government have rejected that money for wholly doctrinaire reasons. I understand that other EC grants are likely to be withheld until the Government respect the rules that they agreed in 1988--until they stop treating Community money like Government income to be set against rather than added to additional expenditure.
Will the Chancellor tell us when this silly squabble among Ministers will be over? When will the Government accept the rules that they signed and when will the Chancellor be able to accept the grants which the Community wants to pay to the hard-hit regions but which, for reasons of pathetic dogma, the Government refuse to accept?
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