House of Commons Hansard Debates for 20 May 1992

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prerogative of treaty making through a Cabinet Committee, can agree to laws in Brussels at the Council of Ministers, which take precedence over laws passed by the House. For the first time since 1649, the prerogative controls the House, instead of the House controlling the prerogative.

The Prime Minister : As the right hon. Gentleman knows, he is referring not to the Maastricht treaty which we are debating, but to a principle that goes right back to the 1972 Act. In practice, greater control over the European executive was ceded at Maastricht as a result of the treaty--predominantly, in this case, to the European Parliament--but no authorities were taken from the Council of Ministers, and Ministers remain responsible to this House. The strength of what we have achieved is not just that the choices that I mentioned a moment ago are in the treaty but, equally important, that they reflect the growing wish of the member states. The old tendency among some of our partners to think that action by the Community was always the answer is diminishing. Many countries joined the Community to strengthen their own national democracy. Now that their own democracy is strong and more firmly rooted, it is becoming much more possible in the Community to have rational discussion about what should be done at Community level and what should be done at national level. That is a healthy development for the future of the whole European Community.

Within the framework of the Community treaties, we have secured amendments to the treaty of Rome to reflect important United Kingdom objectives. We have strengthened the rule of law in the Community by stricter rules on the implementation of agreed provisions. In future, if directives are agreed across the Community, they must be implemented across the Community, or penalties will inevitably follow. That provision directly responds to the concern felt by many that, while our domestic law compels the United Kingdom to implement Community law speedily, others sometimes do not act with the same dispatch.

Mr. John Battle (Leeds, West) : Will the Prime Minister give way ?

The Prime Minister : If the hon. Gentleman will forgive me, I should like to make more progress.

We have also secured better financial accountability. At Britain's insistence, the Commission will now have to provide an assurance that sufficient resources are available for any proposed Community action. It can no longer commit itself to expenditure for which resources are not available, and we keep a complete lock on the overall resources available to the Community. There can be no increase in those resources unless we agree with our European partners that there should be. There can be no change in our abatement without our agreement, and I have no intention of agreeing to any adverse change in our abatement in the discussions that lie ahead.

The Court of Auditors, which now becomes a Community institution, will present the Council and the European Parliament with a statement of assurance on the reliability of the accounts and the legality of the underlying transactions. The treaty contains new provisions to counter fraud.

In the agreements reached, we have also extended democratic control over the Commission. The European

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Parliament will in future have authority to call the Commission to account for its expenditure and for the operation of financial control systems. Individuals will be able to petition the Parliament about abuses by any of the Community's institutions. The Parliament will appoint an ombudsman to investigate maladministration by any of the Community's institutions, including the Commission.

The treaty also sets exactly the framework that we want for economic and monetary union. It provides a commitment to open and competitive markets, a commitment that this country has sought for years and that many felt might never be available from our Community partners. It sets tough economic tests that any member state wanting to move to stage 3 would have to pass. The framework contains a commitment to price stability. Above all, it contains an absolute right for the United Kingdom--its Parliament--to decide later, and at a time of its own choosing, whether or not it wishes to move to the third stage of economic and monetary union. Those are arguments that we have won in Europe and that set policy in the direction in which we believe it should go.

There are differences in the House and across the House about some of those issues. The Opposition, notably the right hon. Member for Islwyn (Mr. Kinnock) and many of his right hon. and hon. Friends, have said that they would be prepared to throw away our carefully negotiated right to join the single currency or not. One may ask precisely what they mean by that. They mean that they commit themselves now to enter a single currency in unknown economic circumstances in the future, with the Community at an unknown size and with economic convergence at an unknown level. They would have had to commit this country to a procedure whereby, regardless of Parliament's views, other member states could oblige us to move to stage 3, which would be a profound mistake for this country.

Mr. Stuart Bell (Middlesbrough) : Will the Prime Minister give way?

The Prime Minister : No, I shall not, as I wish to make more progress.

The Opposition have also latched on to the social chapter in what I consider to be a triumph of ideology over common sense. Signing the social chapter would have removed from employers and employees in this country their right to determine for themselves such matters as working conditions. The social chapter would have given the unions at European level new powers to negotiate employment conditions on behalf of employees, whether or not they were trade union members, and to have agreements imposed through Community legislation on British employees. That is corporatism at its worst. Worse than that, it is the negation of subsidiarity. Those Opposition Members who support subsidiarity cannot, in logic, support the social chapter. Characteristically, the Opposition's reasoned amendment does both those things.

Dr. Norman A. Godman (Greenock and Port Glasgow) : How does the Prime Minister's interpretation of article 3b encompass the stocktaking exercise that he claims to be conducting on the government of Scotland?

The Prime Minister : The hon. Gentleman does no good to his arguments about Scotland by bringing them into this

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instance. I have made it clear to the House that I will take stock of the Scottish position quite apart from the Maastricht treaty, and that I am doing. The hon. Gentleman must be patient. I will take stock in my own time and then bring out proposals.

The Opposition have learnt only one thing. Over the past 20 years, they have held six different policies on Europe. The Leader of the Opposition has held two contradictory views at the same time. Now it seems that Labour accepts and supports Britain's membership of the European Community. I welcome that unreservedly, not least because, if there is broad agreement about membership, it will lend more strength to Britain's voice in Europe.

Labour's vision of Europe, however, is distorted. Labour Members can hardly wait to sign up to every centralising dream ; to every high-spending regional policy ; to every statist attempt to regiment working practices ; to every central effort to direct industrial policy. Where they have failed at home, they hoped that they would succeed in Europe.

The future of Europe is now based on a different foundation. It is based on free trade and competition, on openness to our neighbours, on a proper definition of the limits of the power of the Commission, and on providing a framework for co-operation between member states outside the treaty of Rome. That is the Conservative vision of Europe ; it is where the future of Europe will lie ; and it is a future based on Conservative principles.

In this House and across the country, we debated the Maastricht issues before and immediately after the last European Council. In some of our partner countries, that debate is only now being held, but I have little doubt that all our partners will ratify the treaty by the end of our presidency in the second half of this year. As we debate the treaty, it is right to look at some of the issues that we shall have to tackle during our presidency and beyond.

The concept first put forward, I think, by Ernest Bevin--of being able to buy a ticket at Victoria station and travel freely anywhere in Europe--is attractive. It appeals to the instincts. The freedom to move goods and services lies at the heart of the single market which we British pressed on the Community. But there is a practical problem, recognised in the text of the Single European Act and its accompanying declarations.

All of us in this country live daily with the evils of terrorism and drug smuggling. No one doubts that we have to control immigration, in the best interests of everyone who lives in this country. The issue of the open frontier must be treated rationally, not ideologically. For most of our partners, the idea of an open frontier does not mean that there should be no limitations on what goods and people travel from one country to another. It reflects the fact that they cannot control these matters at the frontier and have therefore devised internal controls to do so.

Our practice is different by virtue of our island status. Experience has shown us that control at the frontier gives us the best possible chance of containing smuggling, terrorism and illegal immigration. We accept the right of Community citizens to move freely between member states, but we must, as we agreed under the Single European Act, keep the controls that we consider necessary to control immigration from third-world

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countries and to combat terrorism, crime and trafficking in drugs. That means that we must retain frontier controls, and we intend to do so.

Mr. Andrew Mackinlay (Thurrock) : Does the Prime Minister recall publishing on Thursday last week in the Official Report a reply to a question by me in which he admitted that neither he nor the Government had the foggiest idea of the number of constables in this country and in particular of their numbers at British ports? That makes nonsense of all the humbug in his remarks that we need to control what comes into and goes out of British ports.

The Prime Minister : The hon. Gentleman has clearly not understood a word of what has been said in the past five minutes but that--if I may say so--is his problem, not mine.

I believe--

Mr. David Trimble (Upper Bann) : I thank the Prime Minister for giving way to me on that point. Will he recall that we are not only one island but that we have a land frontier in the same way that other member states have a land frontier, and that therefore the control--the necessary control--of immigration and other matters is not merely a matter of port controls?

The Prime Minister : We are well aware of that, and the special relationships that exist between Northern Ireland and the Republic of Ireland have existed for a long time, as the hon. Gentleman well knows.

I believe that the development--

Sir Teddy Taylor (Southend, East) : The Prime Minister expresses excellent sentiments, but it is widely reported that the European Commission is likely to challenge in every respect our attitude to frontiers, and to call for the free movement of people and vehicles, as stated in the Maastricht treaty. In such circumstances, which seem likely to arise after 1 January next year, will the Government make it clear what their attitude would be to a decision by the European Court insisting that all frontier controls must be removed?

The Prime Minister : If indeed it challenges them, as my hon. Friend fears, I have just set out the view that the British Government will take. We believe that those frontier controls should be maintained, and we believe that the declaration that Mrs. Thatcher obtained in 1985 recognised that fact. We shall fight very fiercely for the fact that that is the position in law.

I believe that developments in the former Soviet Union and in eastern Europe are more significant--

Mr. Peter Shore (Bethnal Green and Stepney) : Will the right hon. Gentleman give way?

The Prime Minister : Yes, of course.

Mr. Shore : I thank the right hon. Gentleman for giving way on this extremely important point.

It is absolutely right and rational that we should have control over goods and people coming into our own land--that is part of the meaning of being an independent state--but the question put to the Prime Minister a moment ago was not answered. The question is, if the disagreement or clash over the claim to have a Europe without frontiers and our claim to have the right to defend those frontiers in the way described goes to the European Court, will it not

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be for the court to decide under the treaty, not the British Government? What does the Prime Minister say about that?

The Prime Minister : The right hon. Gentleman sets out the legal position. I have set out the position that I believe is the case with the declaration that was attached to the Single European Act in the mid-1980s, a declaration that expressly made the point that our frontier controls would remain. That is a point--if the question is raised by the Commission- -that we shall debate and argue at that stage.

Mr. Tony Marlow (Northampton, North) : My right hon. Friend will be aware that we had a full debate in the House on the Single European Act. The House was given the assurance that the Luxembourg compromise still existed--in other words, where our vital national interests are at stake, the Luxembourg compromise would apply. Will my right hon. Friend confirm that in the last resort we could still resort to the Luxembourg compromise?

The Prime Minister : Yes, of course that is correct. The Luxembourg compromise is a delaying mechanism--it is not wholly the end of the matter, as my hon. Friend knows. It still exists and has recently been reaffirmed by other member states, so there is no doubt that, as my hon. Friend intimates, the Luxembourg compromise is still there. I believe that the developments in the former Soviet Union and across eastern Europe are more significant for the future of the Community than any other development since we joined 20 years ago. By 1995, I hope that Sweden, Austria and Finland will be members. During our presidency, we shall prepare the ground for those enlargement negotiations. By the end of the decade, I hope that Poland, Hungary and Czechoslovakia will have followed suit. Other countries will follow. The Community will have to develop its relationship with the Baltic states and with many of the countries of the former Soviet Union.

The politics, economics and social fabric of the Community will change radically as the Community enlarges. We shall have to show imagination, flexibility and generosity. It would be fatal to take the attitude that we have our prosperous club and that nobody else can join unlesss they are prepared to pay a heavy price. We--the Community, this country--would all pay a heavy price if, by our attitude, we damaged the chance of re- establishing for the first time in 50 years a firm democracy throughout the whole of Europe. Some argue that enlargement points to more being done at the Community level. I believe that a Community of 20 member states will need the sort of flexibility that we have shown in the Maastricht treaty. A lot more will have to be done on the basis of intergovernmental co- operation. A lot more may be left to the national level. The changes that we have negotiated do not weaken what is valuable in the treaty of Rome. They do create the flexible framework we need as the Community reaches out to new members. The institutions of the Community must adapt to the needs of the members and not the other way round.

What should not and need not be negotiable are the core beliefs and foundations of the Community : its commitment to democracy, its framework of law, the creation of a genuine single market and the fact that the Community exists to promote the ever closer union of the peoples of Europe.

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We in this generation have the opportunity and the responsibility for managing the biggest transition to democracy in our continent in its entire history. There will be many means at our disposal for achieving that, both national and international. I have no doubt that crucial among them is the European Community. If we had to point towards one endeavour that can consolidate European democracy, boost our collective European economic prosperity and enhance our collective international influence, it is the European Community. Sometimes the national interest and the Community's interests are at variance. Where they are, we shall fight as we have done in the past for our national interest. But I have no doubt that, overall, through the European Community, our national interest can best be promoted. At Maastricht we obtained a good deal for this country. We improved the way in which the Community works. We set the basis for the growth and expansion of the Community in the years ahead. I believe that that was a good deal for this country and for Europe. I invite the House to have confidence in our future in Europe, and to approve the Bill.

4.26 pm

Mr. Neil Kinnock (Islwyn) : I beg to move, to leave out from "House" to the end of the Question, and to add instead thereof : "declines to give a Second Reading to a Bill which keeps the United Kingdom outside the scope of the Protocol on Social Policy, thereby excludes the United Kingdom from the Social Chapter and prevents the people of the United Kingdom from being part of the full social dimension of the European Community to which its eleven partners have agreed in order to facilitate greater protection for employed people in their working conditions, better rights of consultation and information, equality of treatment and opportunities for men and women and the integration into the labour force of long term unemployed people, including disabled workers, deeply regrets the Government's failure to make any attempt to build into the Maastricht Treaty convergence criteria which emphasise the need for balanced development, a high level of employment and sustainable growth in the regions and countries of the Community ; deplores the fact that the opt-out provisions of the Treaty on the approach to Monetary Union would mean that neither the European Monetary Institute nor the proposed European Central Bank are likely to be located in Britain ; and regrets the fact that the Bill does not include provisions to strengthen co-operation between the sovereign nations of the Community, within a structure of subsidiarity, to enhance political, social, environmental, economic and technological progress throughout Europe and in the developing countries, or to ensure the maximum of democratic accountability of current and future Community institutions to national parliaments and to the European Parliament."

The Labour party has already made it clear that it broadly supports the treaty concluded at Maastricht because it is a necessary framework for the economic, social and political development of the European Community. The treaty provides for majority voting on issues of the environment and on certain other important matters such as youth training and public health. It entrenches the democratic principle of subsidiarity so that decisions are taken at the most appropriate level--local, national or Community. It establishes a cohesion fund and provides for regional policy to be an essential component of the single market.

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We welcome these changes, and we welcome also the fact that the European Parliament is to get new powers that will help to close the democratic deficit caused by the fact that powers and decisions have been ceded to the Commission and other Community institutions. All those and other features of the treaty are worthy of support. We cannot, however, extend that support to the Bill. We cannot endorse the Government's action in opting out of the agreements made by the 11 other European Community member countries on social policy and on the approach to economic and monetary union. Both those decisions by the Government will disadvantage the British people. The social policy opt-out would be reason enough by itself to justify refusal to support the Bill.

Eleven other Community countries--countries with conservative, socialist and coalition Governments--all endorse the social chapter that was agreed at Maastricht. They will all take decisions on social policy on the basis of qualified majority voting on specific matters. The United Kingdom, because of the Government's opt-out, will not be able to vote on those decisions or be part of the deliberations on those decisions. That is not an assertion of sovereignty ; it is a resignation of sovereignty.

The Government argue, of course, as we heard again this afternoon from the Prime Minister, that to accept the social chapter and qualified majority voting would have a devastating effect on British labour relations. Both the Prime Minister and the former Secretary of State for Employment, the right hon. and learned Member for Folkestone and Hythe (Mr. Howard), have used increasingly lurid language to say that the implementation of the social chapter would mean strikes and giving trade unions abroad authority on labour law matters--we heard that again from the Prime Minister this afternoon--and would bring the country to its knees. The Prime Minister said this afternoon that it would be corporatism at its worst. Not one of those or any similar allegations made by the Prime Minister or others in government is actually true. Every one of those absurd claims is rebutted by the terms of the agreement which 11 other Community countries reached at Maastricht.

Article 2.6 of the social chapter 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."

Article 3, which provides for agreements to be made between management and labour at a Community level, was prompted by a joint initiative from the employers' organisation UNICE and the European TUC. There is no question of such agreements superseding the Commission, the Council or Governments by altering trade union or strike laws.

The social chapter also makes that clear. It states :

"this arrangement implies no obligation on Member States to apply the agreements, to work out rules for their transposition, nor any obligation to amend national legislation."

As the employers say :

"Our clear understanding is that the Article cannot be used in any way connected with laws relating to strikes or Unions and in any event we would not agree to any arrangement that did have that effect."

All of that, and much more in and about the social chapter, makes absolute nonsense of the Government's claim that the social chapter would wreck or cripple the economy.

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Sir Teddy Taylor : Would the right hon. Gentleman, whom I think we all respect, say why he is worried about the social chapter exclusion when the Commission can shove through everything that is in the social chapter under the terms of the Single European Act? Indeed, it is already doing so with the 48-hour week and the parental leave directive. I ask the right hon. Gentleman, who I know studies these matters, what can the Commission do under the social chapter that it cannot already do under the Single European Act by majority voting? It is doing that today and it will be doing it again next week.

Mr. Kinnock : It would be appropriate for the hon. Gentleman to take up his complaints about the Single European Act with the Prime Minister or with the former Prime Minister, Mrs. Thatcher, who was responsible for introducing it. Meanwhile, I shall continue to argue--as I am sure the hon. Gentleman will permit--that the claims made by the Prime Minister and his colleagues about the impact of the social chapter on Britain or, indeed, any other country are absolute fantasies. There will be none of the disadvantageous effects that the Prime Minister pretends there will be.

The Government must know that all that I say about their description of the effects of the social chapter is true, so why do they employ such fictions? Why did we hear wild allegations from the Prime Minister again this afternoon? The answer is simple--the Government need the false threat of what the Prime Minister calls disruption and militancy to cover up their desertion of duty to the British people on matters of everyday concern to individuals at work.

The Government refuse to accept the social chapter, which makes provision for qualified majority voting so that the Community can support and complement the activities of member states in "improvement of the working environment to protect workers' health and safety ; working conditions ; the information and consultation of workers ; equality between men and women with regard to labour market opportunities and treatment at work"

and the integration into the labour force of the long-term unemployed, including disabled workers.

Those commitments are, to say the least, not excessive provisions in a modern economy or a democratic society. But the Government recoil from them. This Government, unlike any other Government in the Community, reject them. The excuse that they offer for their opt-out is that accepting such provisions for individual employees rights in Britain would make our economy less competitive.

What the Prime Minister calls, as he did in his speech in the debate on the Queen's Speech, "the social charter paraphernalia," will, he says, hold Britain back. But do good conditions really prevent improvement? Do inadequate conditions really breed greater achievement? We in Britain have plenty of experience from which to learn. British men work longer hours than any others in the EC. Ours is the only country in the Community without statutory paid annual leave. In the United Kingdom, statutory sickness leave is barely half the average in the Community. Measured in terms of equivalent full weeks of maternity pay, payments to women on maternity leave in Britain are the lowest in the Community. Portugal and Ireland are the only other two countries in the EC where there is no statutory right to parental leave. In all those and in many other ways, including the treatment of part-time workers, conditions

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for individual workers in Britain lag well behind those of employees in most or all of the other Community countries.

Mr. Richard Alexander (Newark) : If what the right hon. Gentleman has enunciated is the case, why did he and his party vote against the Single European Act when it came before the House?

Mr. Kinnock : For the simple reason, as I pointed out during our debate in December and as the hon. Gentleman will know if he attended it, that it included no obligation to the social charter. On the contrary, the Government of that day, like the Government of this day, were against the social charter in principle even though they are obliged to accept certain provisions now made under the charter. When we bear in mind the conditions that I accurately described and the comparison made with those in much of the rest of the Community, we have to conclude that, if fewer rights, lower standards and worse conditions for workers were ingredients of success, Britain would surely be top of all the Community's economic leagues. Yet we are the only major EC economy in prolonged recession. We have the fastest growing rate of unemployment in the Community and a huge increase in long- term unemployment. We have the worst fall in investment. When all that is clear, whatever else can be said about inferior working conditions, they certainly do not make for superior economic performance. They never have and they never will, and it is high time that the Government faced up to that and stopped hoping that, if they can make Britain into the labour market bargain basement of Europe, they will have some edge over our competitors. That cannot work and it will not work. That is why the Government's social chapter opt-out is not only an injustice against the British people, but also contradicts Britain's economic interests. Sadly, that is also true of the Government's other opt-out--the economic and monetary union opt-out.

Mr. Robert Adley (Christchurch) : Unlike the right hon. Gentleman, I voted for the European Communities Act in 1972 and do not need lessons from him about being a good European.

Of course we are all concerned about the unemployed--that goes without saying--but can he explain why the two countries among our partners that have most fully implemented the recommendations of the social chapter to which the Opposition's amendment refers have the highest percentage of their populations unemployed?

Mr. Kinnock : I am surprised that the hon. Gentleman should talk in those terms. He should recognise his complicity as a supporter of a Government whose policies have taken unemployment in Britain back up to 2.75 million and produced yesterday a third of a million rise in long-term unemployment and whose record--although I am sure that as an individual he sympathises with the unemployed--shows a lack of concern for unemployment and for the conditions of those who are employed. Otherwise, he would support the social chapter of the Maastricht agreement.

The opt-out over economic and monetary union was contrived by the Prime Minister to mollify the former leader of the Conservative party and her followers. That policy means that the Government cannot say--even in circumstances in which monetary convergence has been

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achieved, and in which other countries are going ahead with monetary union--whether they want Britain to join that union, or tell us their recommendations. However, they must do so soon-- much sooner than the Prime Minister would like, judging by his comments today. At Maastricht, the Government agreed to a timetable for the approach to economic and monetary union which makes it clear that its formation will not be left to decisions to be taken in 1997 or 1999, but will depend on preparatory decisions taken after stage 2 of the process of union starts on 1 January 1994--which will probably be within the lifetime of this Parliament.

The Government will have to make specific proposals to the House and to take action by then. They will not be able to opt out of that. Neither will the Government be able to avoid questions about their judgment and recommendations to the House as the process of union advances according to the Government-agreed timetable.

Mr. Ian Taylor (Esher) : As the Government have made clear their commitment to convergence and have not opted out of discussions about the shape of economic and monetary union, why does the right hon. Gentleman want to deny the House the right to take the final decision? That seems a strange position for a politician to take in a democracy.

Mr. Kinnock : The hon. Gentleman has followed the debate closely and is very interested in these matters, so he will probably recall that I have said on three or four occasions that our approach is not based on an objection to the House having the vote. That is entirely appropriate. I said--and this is becoming increasingly true--that other Parliaments in the European Community will as a matter of convention want to participate in decisions as we move forward. It is not that some special deal has been struck by the Government in respect of decisions relating to the progress towards union. Our involvement in this House is necessary--and comparable involvement will be common throughout the Community.

Mr. Shore : Is it correct to infer from my right hon. Friend's remarks that he would find no objection to the existing protocol and articles on economic and monetary union, and that he is prepared to see a Labour Government and a Labour Chancellor, caught in the 3 per cent. gross domestic product public borrowing rule, being subject to penalties under the European treaties if they broke that rule ? Is not that sufficient reason for any leader of any party in this country to object to EMU ?

Mr. Kinnock : My right hon. Friend also follows these matters, and will be aware that in December, and on many other occasions, I said that the policy of the party that I lead--I am certain that this will continue to be its policy--is, subject to the conditions of convergence, to favour the movement towards union, because that would serve the interests of the people of our country and the wider interests of the Community. Those who do not share that view must consider that there is no halfway house or semi -detached status for our country, and that if we stood back from convergence, there would be damaging consequences as other countries move towards economic and monetary union. If my right hon. Friend will allow me, I will address the subject of deficits later.

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Mr. Robert Sheldon (Ashton-under-Lyne) : There is a considerable difference between financial, monetary and economic convergence--and it is the latter that my right hon. Friend has strongly approved. However, is there not a lesson to be learned from events in Germany, which is transferring between £50 billion and £60 billion a year from west Germany to east Germany, but is still failing to achieve the economic convergence that my right hon. Friend and I want to see ?

Mr. Kinnock : The German example is instructive, but Germany does not have to counter--as the British Government do--a deep recession caused by Government policies. Germany is taking on the unprecedented challenge of amalgamating an efficient economy with a disastrously inefficient economy. It is natural in those circumstances that Germany should use more resources and make calls on international markets. Despite that huge challenge, Germany has managed to sustain a positive growth rate in excess of 2.5 per cent.--whereas Britain suffered a negative growth rate of 2.5 per cent. over the latest period.

I hope that my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) shares my confidence that we should persist with a policy-- typified by Germany--that reflects a determination to raise standards of living, generate employment and increase investment. That is the model that we should all follow. Instead of greeting economic difficulties with the kind of defeatism that is obvious on the Conservative Benches, we should go for expansionist policies, so that we do not end up with 2.75 million of our fellow citizens unemployed for the second time in 10 years.

As the Government come to make their decisions in the near future, uppermost in their minds should be the reality that the European Community has an increasingly interdependent and integrated economy. That is of special relevance and primary significance for our country. Sixty per cent. of our exports now go to other EC countries. The leading importer of British goods is Germany. France comes next, and then the United States-- which used to take most of our exports. It is closely followed by the Netherlands.

That is the pattern of our trade now and that tendency will increase as we move closer to the single market and the Community is joined by other countries such as Austria, Sweden and--as we heard again this week-- Switzerland, and as products and production processes become increasingly integrated in multinational companies. Given that exports account for one third of our gross domestic product, a large proportion of our production capacity and of British jobs depend on sales in the Community. That basic consideration should guide Government policy on economic and monetary union. The growing interdependence to which I referred will make it essential for the British Government to play a full and constructive role in the process of achieving the economic and monetary union that is under way.

It is not enough for the Government to content themselves with monetary convergence and then to stand back. If only that were on offer, the future would be bleak. Low inflation, low interest rates and manageable levels of public borrowing are all important elements of stability. However, if the Community's future is left at that, the stability achieved could be the stability of stagnation--

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with continuing high unemployment, low growth, low standards of competitive performance and even worse imbalances between regions. No member of the Community could benefit from a continuation of such difficulties--which is why it is essential that the Community gives real substance to the task that it defines for itself in article 2 of the Maastricht treaty, of promoting harmonious and balanced development, sustainable and non-inflationary growth, respect for the environment, convergence of economic performance, a high level of employment and social protection, economic and social cohesion and solidarity between member states.

Mr. William Cash (Stafford) : That is not in the Bill.

Mr. Kinnock : That hon. Gentleman may be among those who will deviate from the line taken by the Prime Minister. We were invited to vote for a Bill that embraces the treaty, with the exception of the opt-outs. I have just quoted from article 2. It is very much included in the Bill.

All 12 countries have subscribed to those purposes. They must now be turned into action by policies of co-ordinated and sustained expansion across the Community.

Sir Nicholas Fairbairn (Perth and Kinross) : Will the right hon. Gentleman give way?

Mr. Kinnock : No. I have given way several times, so I shall desist for the moment.

That co-ordinated expansion is the only way systematically to reduce unemployment in the Community. More than 16 million people are now unemployed, many of them aged under 25. Co-ordinated expansion is certainly the best way in which to achieve balance in the Community between the impoverished regions and the congested urban areas, and between the north and the south of the Community. Co-ordinated expansion is also the best way of obtaining convergence in investment, production, competitiveness and employment--the real convergence that is necessary for the long-term success of the Community and for the long-term success of any form of monetary union.

It is clear, moreover, that co-ordinated expansion is vital as the most effective antidote to the resentments and tensions that are rooted in economic disadvantage and insecurity. The Maastricht treaty provides a framework for such action. It gives the Council of Economic and Finance Ministers the power and the responsibility to monitor economic performance and it enables the member states and the Council to act as the focus for concerted action. It is an essential basis for the advance that must take place. What is needed now is the willingness to build on that and to see that European countries move forward together.

I urge the Government to show such willingness. I urge them to work for such expansion and not to go on accepting high unemployment, poverty and regional imbalance within our own country and within the Community.

Within a few weeks, the Prime Minister will become President of the Council of Ministers. He has said that he wants to be at the heart of Europe ; that he wants to foster enlargement of the Community ; that he wants to reach out to the countries of eastern and central Europe. I put it to the Prime Minister that he can show genuine commitment to those objectives only if he uses his period in the

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presidency for the purpose of promoting economic expansion and social justice throughout the Community. Then, as even his Conservative colleagues recognise, he will be fostering the combination that is needed to ensure the existence of vitality and confidence in the west of Europe, and to promote stability, hope and strong democracy in the east.

We shall be doing everything possible to make the Government pursue those purposes. Let me commend to the Prime Minister, as a reminder of the need to do that, the advice of Hans-Dietrich Genscher, given as he left his position as Foreign Minister in Germany a few days ago. Herr Genscher said :

"People who hark back to yesterday's dreams may try to escape down nationalistic paths. The only way of barring off such routes is to open the road to Europe. This demands great effort and solidarity. If we fail in that task, we will face incalculable consequences for our own stability and prosperity."

I hope that the Prime Minister will heed that advice, and will get rid of his opt-out mentality. If he does not, he will not begin to fulfil the task that he has set himself ; he will not serve the best interests of Europe ; and, most of all, he will not do his full duty to our country and its people.

4.53 pm

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