House of Commons Hansard Debates for 1 Dec 1992

Mr. Ian Taylor : These are extremely important points. My hon. Friend, having voted for the Single European Act, needs carefully to consider his position. Under the Single European Act, the Commission's position was strengthened. The former Prime Minister, Lady Thatcher, was keen that that should happen, knowing that, in order to achieve the objective which my hon. Friend supports, which is the opening up of the single market, it was important for the Commission to have strong powers of initiation.

The interesting thing is that, in many defined ways, the Bill tries to restrain and clarify the Commission's powers and, by injecting for the first time the concept of subsidiarity, redresses some of the balances which went wrong as a result of the Single European Act. If my hon. Friend supported the Single European Act during its passage here, it is puzzling to Conservative Members why he is not an enthusiastic supporter of the Bill.

Mr. Cash : My hon. Friend's argument is a little disingenuous on that point. He tries to make out that there is no difference in substance between the Single European Act and the Maastricht treaty ; that it is yet another gradual movement, a little canter down the road. It is nothing of the kind. There is a massive and complete difference between the two measures. The Single European Act was much maligned but necessary. The Bill deals with completely different subject matter, and greatly enhances the centralising tendencies of the Single European Act.

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On 3 April 1992, speaking to the Berkemann forum, Chancellor Kohl said :

"In Maastricht we laid the foundation stone for the completion of the European Union. The European Union treaty introduces a new and decisive stage in the process of European union which, within a few years, will lead to the creation of what the founder fathers of modern Europe dreamed of following the last war--a united states of Europe."

The Government, in their booklet "Britain in Europe", say that they do not want and will not have a united states of Europe, but that is the objective to which the German Chancellor has been moving as expressed in that Berkemann forum speech. The problem is that on European union we are at loggerheads with the Germans, as we are with other member states.

If one travels around Europe as many of us do, and asks about the nature of the treaty in which we are involved--I see the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) nodding his head, because he knows that it is true--everywhere people say that this is a European union which they want and like, and that it is either a federal or unitary system depending on what language they care to use. But for practical purposes, this is a European union. That is what they want, and that is what Chancellor Kohl said when he spoke on 3 April 1992.

Someone is not coming entirely clean on this, because the bottom line is that we cannot have it both ways. The truth is either what Chancellor Kohl is saying or what is being presented to us. I look now at my hon. Friends the Members for Esher (Mr. Taylor) and for Harborough, who try to claim that this is not a European union. They say that it does not have the characteristics that I have attributed to it, a belief which is clearly shared by other member states. The hon. Member for Inverness, Nairn and Lochaber knows that that is true. He wants a federal or unitary Europe. My right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath) made a speech the other day when he came clean. He said that that is what he wants too. The plain fact is that that is what lies at the heart of the whole problem.

Sir Richard Body (Holland with Boston) : Does my hon. Friend agree that not only has Mr. Kohl expressed his views but Mr. Bangemann, Vice- President of the Commission, has put it succinctly? Perhaps my hon. Friend will say whether he agrees with Mr. Bangemann that the Maastricht treaty is a "fundamental step" towards a federal union?

Mr. Cash : Yes, that is precisely the language which is used, but which is camouflaged in these debates because there are a number of people who do not want the British people to know the truth. That is the problem.

Mr. Allan Rogers (Rhondda) : The hon. Gentleman is right to criticise the Government. Last week, the Government were described as being like a gatecrasher going into a party backwards and pretending to everyone that they were on their way out. Article B sets out fully the objectives. The problem is that the Government do not have enough guts to say where they stand on the matter. They prevaricate, because they are trying to satisfy hon. Members such as the hon. Gentleman and everyone else, instead of coming clean. The problem with the Government is that they know where they are going but they are trying to get there by subterfuge.

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Mr. Cash : I find great difficulty in understanding the Government's position, which is one reason why I voted against the Government on the paving motion and on Second Reading. There is a great deal of disinformation, of which the pamphlet "Britain in Europe" is a prime example. It tells only half the story. It does not even refer to the fact that we are to be engaged in a European union.

As I have said repeatedly, we have not even had a White Paper. What on earth is going on? White Papers on important matters are pouring out of the Government all over the place. But when we come to something as massive as the change in the nature of British government on the scale that is envisaged and is carried out--we are talking about a treaty which has already been signed by the Government--there is no White Paper to explain the treaty to the British people. No wonder that, when Women's Own asked the good ladies, in a poll, whether they could define the ecu, nine out of 10 replied that they thought it was a bird.

Mrs. Currie : My hon. Friend does not have to be so patronising.

Mr. Cash : Not at all. The reason for confusion is that there is no White Paper stating precisely what the treaty is all about. I have been calling for one for several years. At the bottom line, if the public are to be asked to make a choice, and if right hon. and hon. Members are to be asked to vote on such a question, they should have enough information to know precisely what is the Government's policy--not just the verbiage in the treaty, with which my right hon. Friend the Minister of State tried to deal earlier. There should be a declaration in a White Paper as to the treaty's objectives, policies and implications.

As to the type of union into which we are being taken, I invite the Committee to consider the provisions in the 1970 White Paper. That is another story, and is part of the process of disinformation, stealth, or whatever one likes to call it. Some would call it being more than economical with the actualite .

Mr. Garnier : When my hon. Friend is next under the dryer reading women's magazines, will he care to check whether the poll did not in fact relate to Emu rather than to the ecu? Also, he supported the Single European Act because it was good for British trade. Is he now saying that the Maastricht treaty is deleterious to the interests of British trade?

Mr. Cash : I am, and with good reason. One has only to look at the exchange rate mechanism. The International Monetary Fund has said that it does not think that it would be a good idea to go ahead, and so has the Bank of International Settlements and many distinguished economists-- including 60 in Germany alone, who recently signed a letter to that effect.

A recent issue of Management Today published the results of a poll to which 3,000 business men replied, and 68 per cent. of them said that they would vote against the treaty in a referendum. That was their verdict. Only two weeks ago, I attended a Confederation of British Industry meeting in my constituency at which another hon. Member was also present, thinking that he would stage a bit of a coup against myself as a Euro-sceptic. He told those CBI members, "CBI policy is the exchange rate

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mechanism, plus a single currency. Will you vote on that?" Only one person put up his hand in favour of a single currency.

Mr. Garel-Jones : I am grateful to my hon. Friend for giving way, and apologise for being absent when he rose to speak. I dare say that I will have many other opportunities in Committee to hear his interventions.

My hon. Friend will recall that the preamble to the Single European Act includes this statement :

"Moved by the will to continue the work undertaken on the basis of the Treaties establishing European Communities ...and to transform relations as a whole among their States into a European Union in accordance with the Solemn Declaration of Stuttgart of 15 June 1983".

Did my hon. Friend think that was a good thing, at the time that he voted for the Single European Act?

Mr. Cash : I have no difficulty with that, because the preamble referred to "a European Union". The question is the distribution of the functions prescribed by the union that we are asked to consider. I well remember that, in April 1990, when my noble Friend Lady Thatcher, then Prime Minister, was threatened with Britain's expulsion from the Community if the Government were not prepared to sign up to a union, she rightly asked, "But what union? What does it involve, and what will it contain?" Now we know.

Mr. Garel-Jones rose --

Mr. Cash : My hon. Friend the Minister, who seems anxious to return to the Dispatch Box, will remember that, at meetings of the Conservative manifesto committee, in March and February 1991, I put to him the same question that he now raises about the nature of the union. I said that if, by the end of that year, the Government signed a document containing functions that were inimical to Britain's interests, and that was the union they wanted, I would oppose it. That is what I am doing now.

8.15 pm

Mr. Garel-Jones : I am grateful for my hon. Friend's confirmation that he was prepared to subscribe to the objective of European union in respect of the Single European Act. I presume--it is useful to establish such matters as we move into what may be a lengthy Committee stage--that, unlike my noble Friend Lord Tebbit, my hon. Friend does not regard the Single European Act as a mistake, but continues to support it.

Mr. Cash : I do. I will go further and say that I am delighted that the hon. Member for Sheffield, Central (Mr. Caborn), who is Chairman of the Select Committee on Trade and Industry, has taken up a suggestion that I made to his predecessor last year--that the single European market should be investigated in respect of abuses that work against the interests of British business.

I return to the remarks of my hon. Friend the Member for Harborough (Mr. Garnier) in respect of the Single European Act. He has not long been a Member of Parliament, but I am sure that he knows from his constituents that there are problems with the working of that Act, such as stock exchange transparency, subsidies paid by various countries to some of their companies, and so on. A whole catalogue of issues must be sorted out.

I am delighted that, within the framework of the Single European Act, the Select Committee will take the

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opportunity to investigate and reveal abuses. I like to believe that I played a small part in helping the Committee to examine those questions.

Mr. Peter Shore (Bethnal Green and Stepney) : Does the hon. Gentleman agree that the words from the preamble to the Single European Act quoted by the Minister reflect one of the great follies committed at the time? Those words were then used to coerce or to push forward that which is now in the Maastricht treaty. If any lesson has been learnt from 1986, it is that we should carefully study such things as the preamble and title I to the Bill.

Mr. Cash : I repeat that, when reference is made to "a European Union" but no description is given, that is a load of Euro-waffle. When it comes to what will be included, I was interested to get hold of a copy of the Luxembourg treaty. The right hon. Member for Bethnal Green and Stepney (Mr. Shore) will remember that day in June 1991. He may have had a copy of that treaty as well, but very few people even knew that one had been deposited in the Library. We then began to realise that the intention was to take us down a route exemplified by the Maastricht treaty.

Mr. Jim Marshall : We return to the question whether or not the preamble will be used in the courts to justify further decisions by the European Court. My right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) referred to the Single European Act. Does the hon. Member for Stafford (Mr. Cash) agree that similar sentiments were expressed in the original treaty of Rome, and that the European Court has been using them ever since? To give the Government their due--although I am tired of doing so--at least, by article VII, the Government are seeking to limit the European Court's future right to extend the European Commission's sphere of influence.

Mr. Cash : That returns us also to the question whether or not one interpretation is more valid than another. I do not happen to agree with the hon. Member for Leicester, South (Mr. Marshall). He was keen to suggest that this was some kind of damage limitation exercise, but I view it as a deliberate attempt by other member states to centralise and therefore to accumulate more power at the centre of Europe. That case is easily made on the basis of the documents before us.

Mr. Garel-Jones : My hon. Friend seems to be saying that he prefers a vague undefined concept of European union, as in the Single European Act, to a definition that specifically separates out important areas of political endeavour and makes them

intergovernmental. He was content to sign up to an undefined union, but now he finds a union defined in such a way as to reinforce intergovernmentalism unacceptable.

Mr. Cash : Even I am pretty surprised by that little intervention. The phrase "a European union" in the preamble meant nothing. Because it has no functions attached to it, it was completely different from the Maastricht treaty, which goes into the functions that are allocated between the member states. That is the fundamental question.

Mr. Rogers : Does the hon. Gentleman not think it rather odd that the Minister should invoke article B of the Maastricht treaty to establish that we now have a union with defined parameters, yet that, at the same time, the

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Government should try to obfuscate and generally mislead the British public, because they have not the guts to say what the treaty is?

Mr. Cash : I agree that there has been a good deal of obfuscation. I shall not go into the question whether there is a deliberate attempt to mislead, but in the 1970 White Paper to which I referred earlier, there was certainly a clear statement that the veto would continue, that the European Community would not develop into a federation and that we should retain our essential sovereignty. Some people may think that that was a long time ago- -but there has never been any denial of what was said then. In one of our more recent debates, I asked the right hon. Member for Old Bexley and Sidcup whether, as he is now calling for federalism--or a unitary system, or whatever--he would repudiate the words in his White Paper. He gave me no reply, because clearly that White Paper was misleading, and it took in many people.

That is the basis on which the process has tended to move, and I believe that the same thing is happening with the present treaty, too. The British people are not being told the truth ; they are not being told exactly what is involved.

Mr. Roger Knapman (Stroud) : In the past few minutes, we have heard much about the beauties of the Single European Act. Does my hon. Friend believe that the raft of directives and regulations might be in any way connected with the fact that Europe's present share of world trade is only 20 per cent., compared with 25.5 per cent. 10 years ago? In the light of those statistics, does my hon. Friend believe that the Single European Act has had all the effects that were expected when it was passed?

Mr. Cash : That is one reason why I hope that the Select Committee inquiry will iron out some of those questions and bring out the truth to the British people.

For example, we are constantly told that the fact that 50 per cent. or 55 per cent. of our exports go to Europe is a wonderful thing. But the trade deficit is £12 billion against us. Another dimension then arises. I believe that much of that disparity and that deficit has come about because of the abuses of the single market, which I hope that we can sort out. That does not necessarily mean that we should not trade with Europe. Europe needs to trade with us as much as we need to trade with Europe.

Mr. Cryer : More.

Mr. Cash : All right, even more--I agree.

Also raised in connection with the Single European Act is the strange untenable proposition that, if we do not sign the Maastricht agreement, we shall be excluded from the Single European Act and the treaty of Rome. That is poppycock. Those are treaty obligations of the kind which we are now being asked to sign. They are binding upon the other member states and ourselves, just as the present treaty would be.

The Single European Act and the treaty of Rome are not options that can be tossed overboard if we decide to accept the threats about what will happen to us if we do not sign. Nor does the coercion effectively being imposed on Denmark mean that that country can be excluded from the Single European Act and the treaty of Rome. That cannot happen. If it did, the other member states would be in breach of their treaty obligations.

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Those obligations are not like the title I obligations, which, as I have said, are of a prerogative nature. They are international legal obligations under the aegis of the Court of Justice and therefore they take on the character of being justiciable before that court. The other member states cannot simply turn round and say, "We do not like the way you behave. Although the unanimity rule under article 236 says that all member states have to complete their constitutional requirements and have to be unanimous, we shall fudge it all. We shall manage to make a new arrangement with Denmark, but we shall exclude you from the treaty of Rome and the Single European Act."

Sir Patrick McNair-Wilson : In that context, as we are the largest payer towards the European club--[ Hon. Members :-- "No."] As we are the second largest payer, there can be no question of our being excluded. Until other people want to write cheques for the cost of the organisation, we are an essential part of it.

Mr. Cash : I am delighted that my hon. Friends have been dealing with the practical questions of the treaty's impact on the daily lives of our constituents. It is all very well to talk in esoteric terms about whether title I is in or out, and for what reason--but the real point is that we are dealing with people's lives. The question arises : who governs? The basis of our democracy is affected. Those are the matters of concern to our constituents.

I shall take the exchange rate mechanism as an example. Economic and monetary union is referred to in article B of the treaty, which says :

"The Union shall set itself the following objectives to promote economic and social progress which is balanced and sustainable"-- I shall deal with that idea in a moment--

"in particular through the creation of an area without internal frontiers, through the strengthening of economic and social cohesion"--

I thought that we Conservatives had done a little damage to that idea, but it does not seem to have escaped inclusion in article B. The passage continues :

"and through the establishment of economic and monetary union, ultimately including a single currency in accordance with the provisions of this Treaty'.

We have seen what happened when, for reasons which escape me, people decided that it was a good idea, on a piece of paper, to attempt to make totally divergent economies converge. That was done--on a piece of paper-- and it was called the exchange rate mechanism. When it started in 1979, it was a voluntary arrangement between the governors of the various banks throughout Europe. There may have been some spurious merit in attempting to secure some co-ordination and co-operation, to which I have no objection. However, then along came Mr. Delors, and turned it into a plan for part of an economic and monetary union. When the ERM collapsed on black Wednesday in September, interest rates rocketed up and caused immense damage throughout the land. The system was based on an absurd dogma, which had created massive havoc, panic and fear throughout the country. None the less, we find that we are still expected to sign up to it, in the form of article B. I shall consider our opt-out in a moment.

The article says--we are signing up to all this stuff and we are part of that union--that the objective of the union

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is the establishment of economic and monetary union, ultimately including the single currency. What is the connection between that and our so-called "opt-out" ?

Let us consider the protocol, which clearly states that the process of stage 3, which is applicable to all member states including ourselves--the protocol is immediately adjacent to our so-called opt-out--is irreversible, irrevocable and comes into effect on 1 January 1999. I shall come on to stage 2 in a moment. The protocol says that we cannot exercise our veto in respect of any other member states.

It is said that we are to be at the heart of Europe and that it is better to influence from within than from without. If we connect that with the fact that we have also agreed that the process will be irreversible and irrevocable, and that we shall not veto it for the others, we are effectively saying that we have accepted the gravitational pull. The position is even worse than that. Under article 8 of the protocol of the European Monetary Institute under stage 2, our Governor of the Bank of England will join the EMI. He and the EMI members will not be allowed to take instructions from member states.

Mrs. Currie : Will my hon. Friend give way ?

8.30 pm

Mr. Cash : No. My hon. Friend must be patient.

The point is that article 8 cuts across section 4 of the Bank of England Act 1946, which clearly states that the Chancellor of the Exchequer on behalf of this House elected and accountable--he now has to answer some questions here and there--has the power and the right to be able to issue directions to the Governor of the Bank of England.

Under stage 2, the position changes the moment that we get into the European Monetary Institute. That is a completely different kettle of fish and that is the way in which our Government are being changed by stealth. Nobody refers to that.

Mrs. Currie : Will my hon. Friend give way ?

Mr. Cash : I will not--[ Hon. Members :-- "Oh."] Not for the moment. I will give way with pleasure in a minute. I want to complete my point first. There is not a word in the pamphlet about the matters to which I have just referred. There is nothing about the protocol's irreversibility and irrevocability. There is nothing about the EMI and the fact that it cannot take instructions from member states. That is the essence of the power that is being created, generated and centralised. Anybody who attempts to argue otherwise should simply look at the treaty.

Mrs. Currie : I am grateful to my hon. Friend for his courtesy. He has now been talking for almost an hour. We have all got the message that he does not like title I.

My hon. Friend's problem, on which I should like him to comment, is that the outside world sees his position as strange. The Bill does not include title I, yet all six amendments that he has tabled seek to put title I into the Bill. If he thinks that title I is so awful, what is he doing proposing all the amendments that seek to put title I into the Bill? Is he just trying to filibuster and to delay the Bill?

Mr. Cash : I absolutely and totally deny that. That is a terrible slur. I am sure, Dame Janet, that you do not want to construe my hon. Friend's remark as an indirect

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criticism of the Chair. The interesting point is that the amendments were selected by the Chair, for which I am deeply grateful.

I will answer the question simply. If my hon. Friend looks at the amendments to which she has just referred, she will see that they say, "insert I"--that is, title I--and that it then says "except'. The exceptions are articles A, B, C, D and F. The object of the exercise is to demonstrate why I do not want the provisions in the Bill. The reason is precisely the devastating impact that I believe they will have on the people of this country and on my constituents.

Mr. Tim Devlin (Stockport, South) : Will my hon. Friend give way?

Mr. Cash : Of course. I always give way to my hon. Friend.

Mr. Devlin : My hon. Friend said earlier that he was really concerned about how Maastricht would have an impact on the man and woman in the street in Great Britain. I will quickly draw my hon. Friend's attention to what is actually in the Bill. Article 2 says : "The Community shall have as its task, by establishing a common market and an economic and monetary union and by implementing the common policies or activities referred to in Articles 3 and 3a, to promote throughout the Community a harmonious and balanced development of economic activities, sustainable and non- inflationary growth respecting the environment, a high degree of convergence of economic performance, a high level of employment and of social protection, the raising of standards of living and the quality of life, and economic and social cohesion and solidarity among Member States."

How many of my hon. Friend's constituents, of my constituents or of any other constituents would object to anything in that? That is what is actually going into the Bill.

Mr. Cash : I will tell my hon. Friend quickly if I may, Dame Janet. The British people in a series of opinion polls have already made it abundantly clear that they do not want economic and monetary union. There is a massive majority of about 68 per cent. That is the basis on which my hon. Friend the Member for Stockton, South (Mr. Devlin) seeks to fillibuster. I am sorry to have to say that to him. What he has referred to comes under title II. We are dealing with title I.

Sir Teddy Taylor : Does my hon. Friend agree that one difference is that the people of Britain no longer want to be taken in by all this twaddle about all the wonderful things that are happening? They remember that previous Bills said that the ERM would bring growth and stability. It was said that the CAP would bring fair prices for the housewife. The British people will not be taken in by all this nonsense and twaddle, unlike the minority of our pro-European hon. Friends.

Mr. Cash : May I add to that point, Dame Janet? To come back to what the objectives of the union are supposed to be, article B says that one objective is

"to promote economic and social progress which is balanced and sustainable".

What is balanced and sustainable about the ERM and the collapse of sterling? With the tremendous gravitational pull and with all the machinery that is being cranked up to the EMI, what will be the effect of taking the ERM into economic and monetary union and into the central banking arrangements that are at the heart of the treaty? When the ERM collapses-- all the Parliaments will have

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committed voluntary euthanasia, as we are being asked to do now--the whole damn thing will collapse. There will then be massive instability and there will no balance in Europe.

The EC may say, "We will compensate for such a collapse by the social cohesion contained in the articles"--that is, the transfer of resources and the cohesion fund. Let us look at the Delors 2 package and the way in which our Government are now trying to wriggle out of the competencies that were granted under Maastricht and for which they now say that they will not pay. We then begin to realise that the proposal will ruin the trust between the peoples of Europe because the people of Spain, of Portugal and of other countries will have been led up the garden path--[ Hon. Members :-- "And the Irish."] The Irish have been led up the garden path with the £6 billion that they were supposed to get.

Those countries will find that Germany does not have the money to pay for the fund, because Germany is preoccupied with its own affairs. The people in other parts of Europe are equally strapped for cash. We are the second highest net contributor, yet we are now apparently a qualifier for the cohesion fund.

It is crazy. We are supposed to be going into a system of convergence--the ERM--which has already been demonstrated to be completely incapable of working. Under our autumn statement, we do not have the faintest opportunity of being able to comply with the convergence conditions prescribed by Maastricht. That is compounded by the fact that convergence is also part of our "European policy" for the rest of Europe, so it cannot work. We qualify for the cohesion fund, yet we are net contributors. Now the Germans say that they will take away £2 billion of our rebate. That is an absolutely crazy situation.

The plain fact is that we are being asked to accept provisions that will create civil disorder in parts of Europe. With the budgetary arrangements proposed and with the monetary policies that the unelected, unaccountable bank will have the independence to be able to enforce, the poorer people in other parts of Europe will find that their public service sector and borrowing requirements will be slashed. Those countries will not have the slightest chance of being able to pay the fines that the Government propose should be imposed on them. As a result, the poor will get even poorer.

That is another of my fundamental objections. It does not apply only to Europe ; it applies to the third world. The last line of the book that I recently wrote said :

"while the third world starves."

Several hon. Members rose--

The Second Deputy Chairman of Ways and Means (Dame Janet Fookes) : Order. If I stand, other hon. Members sit. I wanted to make the observation that I know that this matter has caused some excitement, but I do not expect a lot of sedentary interruptions. Is the hon. Member for Stafford (Mr. Cash) giving way?

Mr. Cash : I am giving way to my hon. Member the Member for Stockton, South (Mr. Devlin).

Mr. Devlin : Going back to amendment No. 93, which is about whether title I should be part of the Bill, I am not sure whether my hon. Friend is speaking in favour of it or against it. I should like him to clarify that point. The treaty has written into it article 3B, which is the subject of the Bill, whereas title I is not part of the Bill. Why is my hon.

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Friend opposing the treaty, given that it is the first one which prescribes a role for national parliaments, if he is so keen to preserve that?

Mr. Cash : The answer is simply that it is not in the treaty. We have only to look at the Government's own handouts to know that the declarations are not part of the treaty. I was at the assize last year, and I was darned glad that that matter will not be imposed upon us, because there was a vote after two days of idiotic discussion. People were brought from all over Europe at absolutely fantastic expense. Even my hon. Friend the Member for Stamford and Spalding (Mr. Davies), who is a bit of a Europhile, said to me, when we had a bite afterwards, that even he did not believe that that crazy state of affairs could possibly have existed.

The assize passed 240 amendments to a treaty which nobody had been told was even going to be given to us, all in the space of about two hours, by pressing buttons. Nobody had the faintest idea what was going on. That is another good reason why we should keep well away from those aspects, and I am delighted that they are only in a declaration.

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