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Mr. Marlow : On a point of order, Mr. Morris. Have you had any information from, or discussions with, the Government? They obviously intend to get this business through on the basis of Liberal party support. Do they intend to get the rest of their programme through in the same way?
The Chairman : I have no idea of any honourable Member's intention.
10.15 pm
Mr. Butcher : Earlier, I was reflecting on the rather unhappy spectacle of two hon. Members equating the treaty on NATO, or our United Nations obligations, with the Maastricht treaty. I was trying-- [Interruption.]
The Chairman : Order. I ask hon. Members either to listen or to depart quietly.
Mr. Butcher : I was trying to point out that it is surely unforgivable for a parliamentarian to misunderstand the nature of the Maastricht treaty to such an extent--to see it as just another treaty between sovereign nations which does not hand over sovereignty, as this one does. The other two treaties were between countries which were sovereign, and they were designed to protect the sovereignty and independence of nations. To assume that the Maastricht treaty does the same is to perpetrate a misunderstanding that no parliamentarian should ever repeat.
Mr. Devlin : I think that my hon. Friend is fundamentally mistaken. Comparisons were made earlier between the ceding, or rather pooling, of sovereignty
The First Deputy Chairman of Ways and Means (Mr. Geoffrey Lofthouse) : Order. The hon. Gentleman seems to be comparing the NATO treaty with the Maastricht treaty. The two have nothing to do with each other.
Mr. Butcher : The comparison was made earlier, Mr. Lofthouse. I hope that you will forgive me for wandering into such a generality. I want to examine precisely how the Maastricht treaty would affect the performance of industry.
Mr. Devlin : On a point of order, Mr. Lofthouse. Before the Division, my hon. Friend made a comment about myself, my hon. Friend the Member for Derbyshire, South (Mrs. Currie) and the hon. Member for North Cornwall (Mr. Tyler). When I intervened, I was merely seeking to answer his point. If I am not permitted to do so, how am I to answer arguments that were put earlier in the debate?
The First Deputy Chairman : That is not a point of order for me.
Mr. Butcher : As to the effect of the treaty on Britain's industrial and commercial future, I shall refer to those parts of it which in my view will impoverish Europe, make the continent uncompetitive and cause us eventually to hide behind a protective barrier--a barrier behind which all the people of Europe can grow poorer together. That is the inevitable conclusion of a number of trends presaged in the treaty.
I begin with the exchange rate mechanism, for we have not yet had a satisfactory answer as to whether there are provisions in the treaty which imply that by our adherence to stages 1 and 2 we must eventually rejoin the exchange rate mechanism. We must have an answer to that fundamental question. This is the Committee stage of the
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Bill. It is an iterative process. Our function today is to do that with which we have been charged : to examine the treaty. If we do not obtain an answer to that fundamental question, we shall strengthen the argument for a referendum because the famed sovereignty of Parliament--the function of Parliament to examine legislation--will not have been properly discharged.In a later debate, we shall have to decide whether to vote for a referendum. On that occasion, I hope that every hon. Member will remember these amendments and the extent to which we received answers to the questions posed by them.
I am very worried about the Confederation of British industry. Bang on cue, the CBI signed the appropriate letter for public distribution. Bang on cue, it has organised a letter-writing campaign to Members of Parliament. In my view, it has done so on a number of non sequiturs. For instance, it says that if the treaty is not ratified we shall endanger Britain's commercial position at the heart of Europe, that we shall risk isolation and that we shall risk being part of the outer tier of a two-state Europe. Someone has to ask the CBI whether, if it believes in the concepts behind this treaty, the treaty of Rome and the Single European Act, it is prepared to say that other members of the Community can break treaty obligations in the treaty of Rome and the Single European Act in order to release us from the confines of the common tariff barrier and deny us access to the internal market.
The treaty of Rome, as amended by the Single European Act, binds each member unto each other by keeping us all within the common tariff barrier and by allowing all of us access to that internal market. The European Community would have to break its own laws in order to achieve that which the CBI fears. The CBI says that this organisation is so unprincipled that solemn treaty obligations, signed by the Twelve, can be broken by one, or three, or five members of the Twelve in order to push us out of the inner tier. If that is so, what kind of organisation is it that we are being solemnly asked in this debate to sign up to by means of a third party ?
Mrs. Currie : I do not think that the point is that anybody would want to break legal obligations. The point being made by the CBI and by many industrialists is that international business, including British-owned business, which could go anywhere in the European Community and which promotes its activities throughout the European Community, might in future- -were we not at the heart of the Community--choose to go elsewhere.
Mr. Butcher : Despite my limited experience of multinational corporations, I know that it is very much their wish to make their European base in the United Kingdom because they see competitive advantages here that they do not see elsewhere. Five or six years ago, I had a conversation with the chief executive of an American multinational company with which I did not have a direct connection. He said, "If the British want to maximise inward investment they should persuade all the others to sign up to Vredeling and then not sign themselves." That would do more for inward investment than almost any other measure.
I agree with my hon. Friend the Member for Derbyshire, South that, when my right hon. Friends the Prime Minister and the Minister of State negotiated our exemption from the social chapter, it was the best they
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could do in the limited rules of engagement that they faced at Maastricht. Those limited rules of engagement and the confines within which the debate took place will eventually impoverish Europe. I welcome that tactical win.Why, therefore, do I say that our friends the Japanese will continue to invest in this country? It is because they know that we shall stay within the tariff wall, that we shall continue to have access to the internal market and that we shall always have a 20 per cent. competitive edge-- provided we do not sign up to the social chapter. Hon. Members should beware, however, as there are signs in the treaty that other ways of introducing chapter costs will be found. None the less, the Japanese are here because they like our competitive position and our labour relations and, above all, because they feel closer culturally to the United Kingdom than to the continental Europeans.
Mrs. Teresa Gorman (Billericay) : Is my hon. Friend aware that the Japanese choose to base their industries here rather than other parts of Europe because most of their material is translated into English for the American market and because almost all their senior managers in Japan are fluent English speakers and therefore find it easier to deal with a British work force? Furthermore, they are violently opposed to the ERM, a single currency and a central bank. That is another reason why they were pleased when we fell out of the ERM.
Mr. Butcher : The English language is a national asset. An Irish Commissioner--I may be wrong, and I hope that I do not malign him--was credited with the malapropism that English is now the lingua franca of Europe. It is the trading language of the world--which brings me to our trading position, British jobs, the future of British industry and customers.
Sir Teddy Taylor : I do not want to undermine my hon. Friend's opposition to the Bill, but will he be very cautious about making too much of the social chapter? The Commission has made it abundantly clear that, whether we have a social chapter or not, it will shove this through under the Single European Act. The phoney debate between Labour and Conservative about whether the social chapter is good or bad is a load of rubbish, and people should wake up to that fact. The Commission will shove it all through anyway, and all of them know it, particularly the Ministers sitting on the Front Bench.
Mr. Butcher : The social chapter is an industrial and commercial question. My hon. Friend has made his point eloquently and briefly but I must add that certain elements of the on costs which the French and Germans would like to wish on us will come to us willy-nilly round the flank, through social measures, not least those involving health and safety.
It is still not widely enough accepted that, if one amalgamates the foreign earnings of Britain's top 20 manufacturing companies--I emphasise the term "manufacturing"--half still come from the north American market. Why is that relevant to today's debate? If in future we are to negotiate on a pan- European basis, will a majority of the companies negotiating have a vested interest in making sure that we continue to have open access to that market at the lowest possible tariffs?
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10.30 pmWe have already been warned. I have seen what I thought were ghosts returning during the debate on the general agreement on tariffs and trade. There is in Europe--more so than in the United Kingdom--an element of opinion which is protectionist and anti-American. Some of it came into play during the GATT negotiations, and we suffered as a consequence. I shall not go into detail about the negotiations, even as they pertain to agriculture, which is covered in one of the amendments, but just before Christmas we were in great danger of jeopardising hundreds of thousands of British jobs in the manufacturing sector for the sake of 2.5 per cent. of Europe's population. The French farmers represent 2.5 per cent. of the continental population of Europe, but through their contacts with their Ministers and their people in Brussels and by obscurantist methods, they were able to jeopardise the negotiations which were so vital for British jobs.
I mention that in speaking to the amendment because, unless we are clear about who will be negotiating what on our behalf for the foreseeable future, and unless we vote fully informed, we may run the risk of things happening to our manufacturing industry which we have hitherto seen happen only to our fishermen and farmers. I beg my hon. Friends and members of the Opposition parties not to vote away our powers and thus affect in key ways our vital commercial and industrial interests.
I am still puzzled about the Confederation of British Industry. When we were debating whether to join the ERM, the CBI--the people whom I suppose Chairman Mao would have called the "running dogs of the Administration"-- decided that they would press very hard for our membership. They did so with other prominent members of the chattering classes and on the basis--I believe that I summarise their arguments correctly--that they did not want to tolerate the costs of fluctuating currencies : they wanted the convenience and surety of fixed exchange rates moving eventually to a fused currency to give a tremendous advantage, as they saw it, to their companies. The fact is--I say this with as much accuracy as I can--that the transaction costs in currency terms of doing a deal in the export market are 0.5 per cent. of the value of the contract. It is for the 0.5 per cent. that we sought fused currencies. Chasing that particular god or objective, we placed our manufacturing companies at a price disadvantage of 12.5 per cent. to 15 per cent. for two years. Anyone who wishes to argue that that exchange rate had nothing to do with the deterioration in our economic performance over the past couple of years need not accept my word for it, but simply ask any economist of any school
The First Deputy Chairman : Order. I note that the hon. Member for Derbyshire, South (Mrs. Currie) is dealing with correspondence. Facilities are made available in the Palace for dealing with correspondence, and the Chamber is not the place. I should be grateful if the hon. Lady would refrain from dealing with correspondence here.
Mrs. Currie : On a point of order Mr. Lofthouse. I beg your pardon-- [Interruption.] I wish that hon. Members would shut up. I have been here for 10 years. This is the first time that I have heard that rule. I know that we are not allowed to read a newspaper in the Chamber. I am answering queries about Europe.
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The First Deputy Chairman : It is fairly obvious that, if the hon. Lady has not realised the rule before, it is because she has not been taking notice.
Mr. Butcher : I was inviting the House to consult whichever economist it wished about the effects of our overvalued and fixed exchange rate on our industrial and commercial performance. When we had an economic stance as a result of which we invoked deflation, when we had prolonged recession and, for the first time in our economic history, when those other factors were brought into play, we ran a deficit on our trading account in goods and manufactures. That is a sure sign that a currency is overvalued.
I am not an advocate of continuing competitive devaluations as a panacea for our troubles. That is another totem which is set up and then demolished. I advocate an independent British bank on the lines of the Bundesbank or the Federal Reserve--
The First Deputy Chairman : Order. The hon. Gentleman is straying by moving on to banks. I hope that he will stick to the amendment.
Mr. Butcher : I hope that I can demonstrate to your satisfaction, Mr. Lofthouse, that our industrial and commercial performance depends vitally on having a stable economic framework against which we can plan. The argument here is whether that should be imposed as an external force, a la ERM or Maastricht, or whether we can do it for ourselves. We have signally failed to do it for ourselves in the past because we have not had the advantage of a policy, which has given Germany 40 brilliant years, of taking day-to-day economic management out of the hands of the Treasury and giving interest rate policy to an independent bank. That is how the Germans ironed out the peaks and troughs of boom and slump, and that is how we should do it. It is an industrial question. No industrialist can plan anything against wild fluctuations. I agree with those who support Maastricht that we need to have a more stable economic framework. However, I fundamentally disagree with having that framework imposed by continental European considerations of their position in the trade cycle as opposed to ours.
Mr. Cash rose--
Dr. Robert Spink (Castle Point) rose--
Mr. Butcher : I challenge my hon. Friends the Members for Stafford (Mr. Cash) and for Castle Point (Dr. Spink) to intervene in two minutes' time when I have explained why we must have a domestic smoother of economic policy as opposed to one driven from, for example, Frankfurt.
The reason is as follows. If one examines the trade cycle as it has affected this country since 1945, one finds that our economy is a so-called "early cycle" economy. We tend to move on the demand phase of the economic cycle whereas, in the main, Germany and continential Europe move on the second, investment phase of the economic cycle. Because we are a year ahead of Europe, when we are at risk of inflation as our recovery is going too fast, the rest of Europe is still in the stagnant phase. When we want interest rates to be stable or to go up a bit, Europeans on the continent want them to come down because of the
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phasing difference. The reverse applies when we are going into recession, and the rest of Europe enters recession a year to 18 months after us.If we set interest rates from a central bank based on the conditions which pertain in continental Europe, we shall invariably be out of phase. There will also be an addition to the inflationary and recessionary pressures in this country. That is how the trade cycle has operated since 1945. If we want to smooth it out, to integrate with Europe and--dare I say it-- converge with Europe and all enter the same phase, that will cost a further 500,000 British jobs.
Mrs. Currie : We have been following my hon. Friend's interesting analysis of the cusp, the moon in Jupiter, and all the rest of it with great care. However, a moment ago my hon. Friend was praising Germany's 40 years of growth and he seemed to imply that that occurred because the Germans have an independent central bank. Does my hon. Friend now support that for this country?
Mr. Butcher : One of the things that has typified this debate has been selective deafness. The intervention of my hon. Friend the Member for Derbyshire, South (Mrs. Currie) was the most vivid example of that that I have heard so far.
Mr. Devlin : The point about the European market is its fundamental interdependence : what happens in one country affects what happens in other countries. We have a choice at this point and crossroads in our history of having a deutschmark-dominated continent where all European economies are at the whim of the deutschmark, or a truly independent currency with a truly independent central bank operating in the interests of all the European economies. That is the fundamental choice.
If my hon. Friend the Member for Coventry, South-West (Mr. Butcher) wants to opt for the slow lane or the second rank, we shall lose not only the inward investment to this country but a say in what happens in the central banking system which develops in Europe.
The First Deputy Chairman : Order. The debate now appears to be about the economy and not industry. Before anyone says that the two cannot be divorced, I remind the Committee that the economy can be discussed thoroughly in the group of amendments headed by amendment No. 79. I hope that we can return to industry.
Mr. Butcher : Our industrialists do not operate in a vacuum. They need a stable economic framework in which to operate. The majority of our industrialists now believe that we need an independent British bank to give them that stable framework. For the reasons that I have adduced, that is far preferable to stability set by an external force and conditions which may not pertain in our country due to the structural differences between this economy and the mainland continental economy.
Even when the CBI's economists may be cynical about ERM membership, why has the CBI pushed so hard for that kind of deal?
Mr. William Ross (Londonderry, East) : I have been listening very carefully to what the hon. Gentleman has been saying about membership of the ERM and I noticed that he drew our attention to the situation of this country with regard to Germany. Has he considered the present situation in the Irish Republic, where interest rates have
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gone through the roof, where there must be considerable hardship with debts being deferred and increased by the application of interest rates, and where--The First Deputy Chairman : Order. We are going down that same track again. I have just said that we are discussing industry and not the economy. There will be an opportunity to discuss the economy on a later group of amendments. I hope that we can stick to industry and that the Committee can make progress.
Mr. Butcher : I should like briefly to consider convergence funds and what they will mean for us and for our constituents. We are one of the two key contributors to the budget. We shall be asked for much more money in the coming years. The bills will be presented long after this debate is concluded one way or the other. I am tempted to make remarks from two standpoints : first, the experience which I enjoyed but occasionally suffered from as a junior Industry Minister in a national Government and, secondly, my experience of Industry Council meetings over about five years in Brussels, Research Council meetings and, once, an Environment Council meeting. My experience wearing those two hats and as a British negotiator has tempered what I am about to say.
10.45 pm
If colleagues are going to vote for the treaty assuming that, once it is passed, we can gradually work it out together rationally, building consensuses and making our points and standing up for our interests, gradually making it work to the dream--for it is a dream--with the noble aim of producing the full employment that we want, the inflation-free society, that industrial Valhalla that Commissioner Bangemann would like us to achieve, they should realise that it does not happen that way. Once the treaty is passed, that will be the end of House of Commons input into the policy-making process which will subsequently take place.
I shall now say a little about what actually happens in Industry Council meetings. The Minister is delivered to the airport at Brussels. He shoots straight through with one of those effective civil servants to take him through the side doors to bypass customs. In he goes and he meets UKREP, who is a very interesting person--the gentleman who, in previous weeks, has been doing deals with the ambassadors of the other countries about the Industry Council budget. Some hon. Members have been through that process. UKREP's job is to deliver his Minister and his position. Much will have been fixed within the machinery, and much of it will have been fixed through horse trading inside the Commission, but it is a matter of pride for UKREP that, when his Industry Minister arrives, there should not be too many differentiations between the position as advised by UKREP and what the Minister actually does.
I found--perhaps I was slow on the uptake--that the only way in which I could have an effect on that cosy bringing together of industrial policy was not to read my brief. My brief, of course, had been put together as a consensus piece. It had probably been trailed around other Ministers from other nations--they had done their trading and come back.
I found that I had to adopt a tactic which I called the ear jiggler. Everyone at those meetings wears an earpiece. I found that if I went off the script and introduced something new which had not gone through the
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machinery, they started to jiggle their translation earpieces. Their ambassadors would lean across to their Ministers and say, "He is not supposed to be saying this ; it is terribly wrong." Of course, their ambassadors were subsequently discredited, or rather made to feel uncomfortable.I found that I could actually have a negotiation because I caused a weakness in my opponents' hand ; I had taken somebody by surprise, and I could try to win a few points. Deals were done, sometimes with Commissioners in the lead. I met a Commissioner called Davignon. I had never met a civil servant like him. Admittedly, he was a vicomte
Mr. Butcher : A viscount--in the vernacular of the hon. Member for Boslover (Mr. Skinner), a Euro-toff. He was the most powerful civil servant I had ever come across. He not only proposed, he disposed. He admonished us ; he chastised us. When that did not work, we used to break and go to lunch. Lunches were working lunches and, as my hon. Friend the Under- Secretary of State for Technology can confirm, they were very good. The reason that they were so good was that they had to last at least two and a half hours as that was the time during which most of the advisers were chucked out and we began horse trading. We sat around the table, with the Commissioner at the head, horse trading took place and deals were done. One scored 10 points for Machiavellian negotiating skills and one point for the merits of the argument, so we were lumbered with all sorts of technological lunacies which should not have occurred. Hon. Members should not pretend that the House will have a significant effect on policy formation once the Bill has been passed. They should not fool themselves about that.
Mr. Michael Stephen (Shoreham) : Does my hon. Friend accept that the conditions that he has been describing are ones which exist in almost all forums of international negotiation and are not peculiar to the European Community? Indeed, they apply within our own country.
Mr. Butcher : I readily concede that such things have been known to happen in our country, but I believe that I am making a significant point. Many of those who advocate the adoption of the treaty have said in the debate, "Don't worry about the words ; we can sort bits of it out as we go along ; do not take the words at face value." If we take many of the words at face value, they give many people powers of initiation, instigation, influence and persuasion--powers which cannot be formalised and which will change policies and the way things happen in this country, in the House, and in British companies, farms and workshops. Let us at least vote for such provisions with our eyes open.
Mr. Bowen Wells (Hertford and Stortford) : Is not the lesson of the negotiations at Maastricht that Ministers did prepare themselves before they went to Brussels and Maastricht and knew the issues involved, their civil servants had been fully briefed and Britain was at the centre of the negotiations and, as a result, obtained a treaty that is very much in its interest? That is quite unlike the standard preparation that my hon. Friend the Member for Coventry, South-West (Mr. Butcher) said that he was unable to command when he was a Minister. It is only by
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negotiating in Europe that Britain will obtain achievements in the European market in favour of its industry and commerce and the country as a whole.Mr. Butcher : I think that I said at the beginning of my speech that I would compliment my right hon. Friend the Prime Minister on an away win-- 3 : 1 within the rules of the engagement. He did better in his negotiations than any other Head of Government at Maastricht. We are fortunate to be blessed with both a Foreign Secretary and a Prime Minister who can knock the spots off their competitors in such negotiations.
I also said that I questioned the basis of the Bill. Is it not curious that, skilled as all the negotiators may have been, some of those returned to their capitals and said that the treaty would cause the integration of Europe, but one has returned to his capital and said, "Don't worry--it will not really cause the integration of Europe." Therefore, we have a brilliantly negotiated, elegant treaty, containing some wonderful objectives, which is already subject to great disparities of interpretation. One of the reasons for the hyper-ventilation in Committee is that we had thought--whether Europhobes, Euro-realists or Euro-sceptics- -that we would try to solve some of those mysteries in Committee.
What exactly does the treaty mean? For instance, we discovered by a fluke-- the information was not volunteered--that the pillars, which are outside the treaty and may not be justiciable by the European Court, are legally binding. That is a pretty weird distinction. My hon. Friend the Member for Hertford and Stortford (Mr. Wells) shakes his head. I appeal to him to join me in getting to the bottom of this matter, or we shall be selling the British people a pup. We must either call for an advance interpretation by the court or ask for one from our own Law Officers, whom we have not yet seen on the Front Bench. Will the pillars be legally binding?
Mr. Butcher : In that case, a number of the propositions to which we have been treated over the past six months have been erroneous.
Mrs. Currie : On a point of order, Mr. Lofthouse. Do I not recall your saying earlier that this part of the debate should be on industry, agriculture or fishing?
The First Deputy Chairman of Ways and Means : That is certainly right, and I have had to draw that to the attention of the hon. Gentleman on two or three occasions. I hope that he will now stick to the amendment.
Mr. Butcher : With your guidance, Mr. Lofthouse, I move on--
Mr. James Pawsey (Rugby and Kenilworth) : May I bring my hon. Friend back to more concrete matters--specifically to the concrete and cement industry? He will be aware that Rugby Cement, a well-known company, operates in his constituency and in mine. He may not be aware of the fact that, owing to the way in which the Community operates, certain environmental conditions are being imposed which are being adopted eight years earlier in the United Kingdom than in other member countries. That implies great additional costs for our home-based industry, and it will mean that we are greatly
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disadvantaged. Would my hon. Friend care to offer his advice to hard-pressed companies such as Rugby Cement on what action they should take?Mr. Butcher : I defer to my hon. Friend's expertise. He does not need me to tell him, however, that in the first instance he should hold another meeting with the company and discuss with it his powers to do anything now--and then perhaps discuss what powers he will have in, say, a year's time, after ratification has taken place.
Mrs. Dunwoody : Is not the hon. Member for Rugby and Kenilworth (Mr. Pawsey) raising a salient point? As the European Court is wholly involved in reaching judgments on the present treaties, it will have a direct effect on industrial matters--that is one of its functions. It judges whether countries are complying with the law. Unless the Community takes action against countries and companies, certain companies will be able to escape the industrial and economic effects of the treaty--precisely the sort of inequality to which the hon. Gentleman referred. That will have an impact lasting in some cases for years, and will have a direct effect on competition. If the Government believe all this rubbish about fair competition, is it not time they did something about it?
Mr. Butcher : The hon. Lady makes her point well. It is refreshing to see cross-party unity breaking out. It is also refreshing to see that some Members, at least, are searching for truth.
Under convergence policy, grants will be pushed around on a Euro-basis. The debate on the effectiveness of industrial grants has been going on in this country for at least three years. There is also debate on what kind of industrial policies should be adopted to put right some of our problems. To some extent that debate is a dialogue of the deaf. To equate an industrial policy with turning the Board of Trade into a grant factory is a curious phenomenon, which has long been discredited, but on a pan-European basis. The problems of efficiency and effectiveness and the effect on the motivation of what went on among the decision makers were serious and would be compounded on a European basis because there will be even less knowledge about what was happening on the periphery.
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If we opt for convergence and try to bring all our economies up to the same standard, producing almost mirror image economies in the nation states, money will be transferred by Europe's industrial grant mechanisms, mainly from north to south. That will ensure that Greece can have industries like ours and Spain and Portugal can mirror the industrial composition of Germany and, say, central France. That flies in the face of everything that we have learnt from economic and industrial history since it first became a matter for policy discussion, perhaps beginning with Adam Smith.
I thought that the whole point of free markets was that they allowed specialisms to develop and countries and companies to seek their own salvation by becoming better and competing with other countries. I wonder about the philosophy behind this. Anyone who doubts that we are creating a nation state should look at what this thing which may not be a nation state will be doing. Surely only nation states pursue industrial policy, legislate and
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supervise consumer affairs. Surely only such states have commerce Ministers and Ministers to supervise pan-European competition. Before my hon. Friends who are pro-Maastricht accuse me of being entirely negative or dogmatic, I should say that if I were pushed into a corner and asked to state the boiled-down kernel of my policy on Europe, I would say that it would be to strengthen the competition Commissioner's brief--the brief of Sir Leon Brittan. He should be given powers to construct a level playing field. If it is suggested that we should not have tariff barriers against the outside world, that Commissioner's role becomes even broader and more relevant to the wealth- creating parts of our economy.I doubt that Britain, as one of the two net contributors, will be able to afford the money to persuade others to provide even more competition for our companies. That is nonsense, and it is difficult to understand why that has not been recognised.
I am a free trader and an internationalist in the broadest sense of the word. I am frightened that elements of the treaty's industrial and commercial policy have more to do with the mercantilism of Colbert and Mazarin and Richelieu than with the inheritors of the economic policies first enunciated by Adam Smith. There is a sort of de ja vu, an out-of-date feel about all this. I do not know why we are buying it, because Conservatives spent the last four elections trying to turn back such policies. It is weird.
I am worried because I want us to continue to trade with the rest of the world as well as with Europe for the jobs reasons that I gave earlier, and I feel that if the economic, social and industrial policies and some of the treaty's other policies affecting industry are adopted, we shall institutionalise the declining competitiveness of Europe.
It may be controversial to say that today, because who can deny that Germany, for example, has had 40 brilliant years? I wish that we had had 40 years like the Germans have had since about 1948, when the Wirtschaftswunder was first built by Erhardt and somebody who, for my money, was the best and most underrated economist of the post-war period ; a chap called Euchen. We did not do it--they did. Those 40 brilliant years are being sold away. The Germans and the French have loaded into their economies a number of on costs and anti-competitive trends that will make them weak in competing in global markets--and all markets are now global.
One of the reasons why the treaty has been pressed so hard on us is that German and French industrialists want to see British industry lumbered with some of the same conditions that have already been introduced by their national legislation. While Germany has had four successful decades and France two, what they have done recently will undo all that. Furthermore, they are trying to wish it on us. The House should be on its guard about looking to continental Europe for leads in economic policy making.
If we are to institutionalise the gradual uncompetitiveness of Europe, the only way to safeguard Europe's position is either to fail to reduce the tariff barrier further under GATT, or to increase it again. We are already seeing reactions to the continental Europe system in other parts of the world. America is building a North American Free Trade Area, which includes Mexico, Canada and the United States. Those who talk to American politicians know that there is a great deal of "me-tooism" about the
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decision to build that continental trading system. They looked at Europe and wanted to have something similar, but bigger, with even more people.Elements within the treaty make a fortress Europe more likely. That is particularly so, given my next point--an economic point arising from politics. We should not assume that the dominance within Europe of the centre and centre-left parties in the Parliament and of tthe centre parties of policy-making in the Council of Ministers will continue for ever. We do not know what will happen in our next general election or in the French and German general elections. Those elements that are slightly more concerned about a nationalist Europe--that is, a continental Europe--having clout and power and producing reactions elsewhere, may be reinforced at the expense of an element of opinion that we have always espoused : internationalism, outward-looking, free-trading, "win on competitive grounds if one can". That philosophical point is still in doubt. The jury is still out.
I cannot support the industrial and commercial measures in the treaty. When it all boils down, I am in the House to provide jobs for my constituents. Jobs and more jobs are the best welfare programme of all. With fuller employment, we would not argue about welfare programmes. My fear is that in deepening rather than widening Europe, in bureaucratising rather than in freeing it up, in loading Europe with uncompetitive situations, we may be making it less likely that, in coming years, we shall be able to face our constituents with a clear conscience and say, "I voted for Maastricht to preserve and build jobs."
Mr. Shore : The hon. Member for Coventry, South-West (Mr. Butcher) was right to emphasise the enormous competitive power of Germany after 40 years of successful industrial and economic development. That is my starting point to reinforce his argument that it is essential that the United Kingdom, faced with that formidable manufacturing and industrial power, insists upon the retention of control over its own interest rates and exchange rate so that it is not bottled in and circumscribed by the exchange rate mechanism. I do not agree with the hon. Member for Coventry, South-West that exchange rate policy alone will be sufficient to deal with the problems that now face British industry. We are far behind our competitors, and we need an effective industrial policy. In so far as my hon. Friends have advocated that in supporting amendment No. 1, they are right.
There are several difficulties. One of them--this was confirmed by the Minister of State in answer to a direct question--is that there is nothing in article 129 that will assist in developing an effective industrial policy over and above what is already in the Rome treaty and the Single European Act.
Mr. Garel-Jones indicated assent.
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