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narrowness of that result to the unpopularity of President Mitterrand and the domestic unpopularity of that Government. If the Dutch are moving that way, if the Germans continue to move that way, and if the French, across the political spectrum and including the Conservative party's supposed allies in the European People's party and the majority of its Gaullist friends, move that way, where is Britain? It is nowhere. It is sitting on the sideline. [ Hon. Members :- - "It is here."] Yes, it may be here but why is it not over there in Europe as well?

I shall conclude-- [Interruption.] I shall not conclude, but I shall make two more points.

The British Conservative party is in a complete shambles. To preserve the pretence of unity, it has a drafting committee for a European election manifesto ; it brings forward the sublime and the ridiculous and puts them on the same committee. It will be interesting to see what kind of manifesto the committee comes up with. Will it be the same manifesto as that of the European People's party--a manifesto that talks about federalism and a single currency? Will the British Conservatives be able to launch their European campaign saying proudly, "We and our European partners all agree on these objectives"? We must wait and see.

We in the Labour party know that, with our allies and partners in the party of European socialists and with those in many of the Christian Democrat parties in Europe who also believe in jobs, investment, social justice and the social chapter, we will be able to create the kind of Europe that provides employment and social justice for our people and for the people of the rest of Europe and contributes to peace, security and justice in the world.

12.15 am

Mr. John Biffen (Shropshire, North) : I congratulate the hon. Member for Ilford, South (Mr. Gapes) most warmly. He gave us a superb exposition of the Labour's future view of the Community. I was grateful to the hon. Gentleman for conveying to us fraternal greetings from the European People's party--although a little disconcerted that the Foreign Secretary left his place on the Front Bench shortly afterwards.

The hon. Gentleman has focused sharply on a philosophical divide. It is a genuine divide, and it is an irritating divide, because it does not follow the normal fault lines of party politics. Conservative Members had the opportunity to study the faces of the hon. Gentleman's hon. Friends as he made his speech, and they did not give the impression of unanimous glee.

Mr. Radice : I did.

Mr. Biffen : Of course, I almost felt that my hon. Friend--I say hon. Friend because he is my pair--was the author of this advanced document of Euro-socialism.

One one side of the divide, which is a genuine one, are those who think of politics as a mechanical process and who are attracted by the whole proposal of convergence, because they see it following what is to them unmistakeably a predetermined path--albeit not in iron terms--with all the resources of Government being dedicated to making it come about. On the other side are those who are, by contrast, evolutionary in their approach

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to political problems and above all to European problems, who, by their lights, are no less communautaire than their opponents. I think that I take a more Tory view of life. These are great ambitions, and they are ambitions much more realistically undertaken without any clear view of the timing of the objectives. One is perfectly entitled also to ask whether the objectives of uniformity and convergence are a proven success. There is a case to be made for European economies with a degree of diversity. At times, when one is coming out of a recession, a strong economy often helps by being a lead economy. I adopt a neutral approach to that question, therefore.

I do, however, observe that the European Community is an intensely diverse organisation. The nation states of Europe have a profound history, which is stronger than economics, and that diversity will be intensified by the enlargement of the Community to which hon. Members on both sides of the House are committed.

Let me come to what is perhaps a more pedestrian view. The present view-- the Delors view and the view of that great roll call of political parties to which the hon. Member for Ilford, South subjected us, which I respect as part of a dirigiste tradition that is well established on the continent--is that convergence is something to be brought about by Government involvement, which cannot be left to itself to happen ; that is a rather sort of Gladstonian liberal view no longer shared by the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston), but still held in affection by myself. The European Commission looks at the situation and asks who will provide the resources to give real impetus to the process on the time scale of convergence. Recently, the general view was that it would be the Federal Republic of Germany. We can only observe that the federal republic--the united Germany--is in immense difficulty.

I say that without any trace of satisfaction. A Germany in turmoil is a danger for Europe. If we look at the priorities that confront German domestic politicians today, will German resources be used in the Mediterranean or to the east. Those resources must go to the east partly because there are economic opportunities there, but, above all, the political situation there is so fragile that that must be the first call on German interests.

What will happen? There will be a redistribution of the obligation and the privilege to help to finance this great politically contrived enterprise. We shall move more into the role of a contributor. The hon. Member for Wentworth (Mr. Hardy) spoke warmly about the advantage that he hoped his constituency would get from this system. That is what we all hope and believe. However, the likelihood of Britain being a recipient of largesse from Greece or Portugal can be put to one side.

I shall conclude on this point. It is a technical point, but it runs to the heart of the difference. It is one of measurement. If politicians are given access to resources, the ability to measure equitably so that the judgment will be respected by the population at large is crucial.

There is no prospect of resources in western Europe being equitably assessed and managed. We view the statistical basis on which we work with some unease. Certainly, Sir Claus Moser, who is possibly in a position to make these judgments, has his anxieties about the quality of our statistics. But we should think of Greek and Portuguese statistics and those that will greet us from the east.

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If we look at the protocol governing these matters in the Community documents, we see that the Commission will be charged with putting together the information on which decisions will be taken. One cannot go to the European people, who will justifiably be uneasy, on the basis of central allocations, basically because they do not trust other people's figures. It may seem a modest and technical point in this Chamber, but hon. Members should listen to the litany of disbelief in their constitutions about the equitable way in which Community resources are being distributed.

If we go down this semi-mechanical route, we will be storing immense trouble if there cannot be as much evident justice about European budgeting as there is about national budgeting. It is against that background that one could well have a growing disillusion, which, far from fostering European partnership, will do the reverse.

12.23 am

Mr. William Cash (Stafford) : Following that speech will be difficult. My right hon. Friend the Member for Shropshire, North (Mr. Biffen) referred to the precise point that Labour Members have completely missed--that the convergence criteria are deflationary ; they are intended to be deflationary, and therefore will increase unemployment. It is no consolation to hon. Members on both sides of the House to know that the level of unemployment in Europe has risen to 17 million. The European Commission admitted last August that economic and monetary union is bound to increase unemployment significantly throughout Europe. Why on earth should we go through the charade of a debate such as this on the convergence criteria when everybody knows that they cannot work, and that they must not be allowed to work? It escapes me completely.

As I pointed out earlier, the statistics themselves are riddled with holes. They do not include eastern Germany as part of the statistical base for the convergence criteria as devised.

Mr. Andrew Smith : The hon. Gentleman is evidently opposed to the convergence process, and convinced that the figures are deeply flawed. He and his hon. Friends have made strong arguments that Britain should not be taking part. Will he take the opportunity tonight not to collaborate with the submission of the information, by not voting for the Government motion?

Mr. Cash : I have made it perfectly clear to the Whip that I have not the slightest intention of voting for the motion. I would not dream of doing so. I think that it is absolute rubbish, and the House should not pay the slightest attention to this ridiculous report. I will go further. I was deeply concerned to hear the speech made by my right hon. Friend the Foreign Secretary at Johns Hopkins university on 29 November last year. My right hon. Friend stated that, whatever one's view on the steps to be taken after stage 2 of economic and monetary union, everyone was agreed on the importance of better economic co-ordination and greater convergence in the European economies.

The plain fact is that it is not going to work, and it will induce unemployment. I will simply conclude on this point : what satisfaction can it give the people of this country to engage in a policy which is guaranteed to throw our people out of jobs?

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12.27 am

Mr. Dorrell : It is always a pleasure to listen to my hon. Friend the Member for Stafford (Mr. Cash). The problem for the House this evening is the one to which I drew attention in my opening remarks. The motion asks the House to approve again a document that it has approved many times before, and to approve the contents of the Red Book because of a clause that was written into the European Communities (Amendment) Act 1993, which dealt with the Maastricht treaty.

The question for the House was whether we should endorse the contents of the Red Book. The hon. Member for Oxford, East (Mr. Smith) sought to address that question in his speech, but, as my hon. Friend the member for Colchester, North (Mr. Jenkin) rightly said, the result was a boring rant and familiar claptrap.

The hon. Gentleman alleged that the plan set out in the Budget presented no prospects of growth, jobs or improving living standards. He was apparently blind to the fact that unemployment has fallen during the past 12 months, and that the growth rate during the same period has been 2 per cent. There are clear prospects of growth being sustained. That is the view not just of the Government, but of almost all independent commentators.

Mr. Jenkin : Does my hon. Friend also accept that the improvement in our economic performance has come about by our diverging from our European partners on a number of key measures, not least the exchange rate?

Mr. Dorrell : One of the key thinks which has been made possible the economic recovery, and which will continue to underwrite it, is the fact that we have inflation under better control in Britain today than for 25 years. The choice which the Government made to insist on facing down the inflationary pressures which were present in the British economy at the end of the 1980s was one of the key factors which has made recovery possible. I did agree with my hon. Friend's characterisation of the speech of the hon. Member for Oxford, East. The House then had a real treat from the hon. Member for Ilford, South (Mr. Gapes), who displayed a hitherto unsuspected skill in the art of dispassionate and forensic analysis of the position in which the different countries of Europe have found themselves. He offered us, I suspect, the speech of a graduate of the Prescott school of rhetoric. The whole House enjoyed his speech, even if we were, with great respect to him, not much the wiser when he sat down. On the other hand, the majority of my hon. Friends who spoke recognised a sterile debate when they saw one. They understood that the House had already approved the document several times. There is not a great deal of point in reciting yet again familiar arguments from the two sides of the House. That is why I so much welcomed the speech of my right hon. Friend the Member for Shropshire, North (Mr. Biffen). He presented a view around which all Conservative Members can unite--the proposition that the proper way in which to see institutions and policies develop is to insist on an evolutionary approach to politics.

The view expressed by my right hon. Friend was one of the key arguments that I advanced in the speech which the hon. Member for Oxford, East (Mr. Smith) was kind enough to quote in extenso. It was the reason why my right hon. Friend the Prime Minister insisted at Maastricht that we should not sign up to an artificial timetable for

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economic and monetary union, and that if, at any stage in the future, we chose to join a European single currency, that was a decision that should be made at the time when it was to be put into effect, based on the circumstances prevailing at that time. I suggest to my right hon. Friend the Member for Shropshire, North that that corresponds precisely with the evolutionary approach to such problems that he says--I agree with him--we should adopt. My right hon. Friend also stressed--again, I agree with him--that, in deciding whether we should proceed with a particular form of evolution, we should take account of what Alan Clark would describe as the actualite . Part of that actualite in the evolution of European politics, as my right hon. Friend rightly said, is the current position in the German economy which is the result of reunification.

Another thing that he might have mentioned, but did not, is the result of the possible enlargement of the Community. All those factors should be taken into account in the way in which the Community evolves. That is precisely why my right hon. Friend the Prime Minister insisted at Maastricht that we should not commit ourselves to a long-term plan for the Community which built in no flexibility to allow it to react to events as they evolved.

Mr. Andrew Smith : Will the Financial Secretary confirm that, under the provisions of the Maastricht treaty and the European Communities (Amendment) Act 1993, the Government are obliged to notify the Community that they do not intend to proceed to stage 3 before the Community proceeds to stage 3? Have the Goverment yet given notification that they do not intend to move to stage 3? If not, when does the Financial Secretary anticipate that it will be communicated to the Community?

Mr. Dorrell : No communication of that nature has yet been given to the Community. If it is given, it will be given at the time--

Mr. Smith : If.

Mr. Dorrell : As we have made clear from the beginning, we are anxious to keep the option open, observing precisely the principle that my right hon. Friend the Member for Shropshire, North expounded.

Therefore, the basis exists on which every Conservative Member can proceed in unity. It was set out by my right hon. Friend the Member for Shropshire, North, and it was endorsed by my hon. Friend the Member for Colchester, North when he referred to the article written by my right hon. Friend the Prime Minister in The Economist, which advanced a similar approach to the problem. That is the basis on which we shall approach the future of European economic and monetary questions.

The question for the House this evening is whether the Government's plans set out in the document represent a proper way to proceed to deliver economic recovery and improving living standards. The Government's view, as the House well knows, is that sustainable, non-inflationary growth requires us to observe key disciplines of sound money and sound public finance. We do that primarily and principally because that is the only way in which to deliver the improving living standards that are the shared ambition

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of every member of the Conservative party. It is on that basis that I commend the contents of the Red Book to the House and ask its support for the motion before us.

Question put :--

The House divided : Ayes 294, Noes 239.

Division No. 117] [12.35 am


Ainsworth, Peter (East Surrey)

Aitken, Jonathan

Alexander, Richard

Alison, Rt Hon Michael (Selby)

Allason, Rupert (Torbay)

Amess, David

Arbuthnot, James

Arnold, Jacques (Gravesham)

Arnold, Sir Thomas (Hazel Grv)

Ashby, David

Aspinwall, Jack

Atkins, Robert

Atkinson, David (Bour'mouth E)

Atkinson, Peter (Hexham)

Baker, Rt Hon K. (Mole Valley)

Baker, Nicholas (Dorset North)

Baldry, Tony

Banks, Matthew (Southport)

Banks, Robert (Harrogate)

Bates, Michael

Batiste, Spencer

Bellingham, Henry

Bendall, Vivian

Beresford, Sir Paul

Biffen, Rt Hon John

Blackburn, Dr John G.

Bonsor, Sir Nicholas

Booth, Hartley

Boswell, Tim

Bottomley, Peter (Eltham)

Bottomley, Rt Hon Virginia

Bowden, Andrew

Bowis, John

Boyson, Rt Hon Sir Rhodes

Brandreth, Gyles

Brazier, Julian

Bright, Graham

Brooke, Rt Hon Peter

Brown, M. (Brigg & Cl'thorpes)

Browning, Mrs. Angela

Bruce, Ian (S Dorset)

Bruce, Malcolm (Gordon)

Budgen, Nicholas

Burns, Simon

Burt, Alistair

Butcher, John

Butler, Peter

Butterfill, John

Carlisle, Kenneth (Lincoln)

Carrington, Matthew

Channon, Rt Hon Paul

Churchill, Mr

Clappison, James

Clarke, Rt Hon Kenneth (Ruclif)

Clifton-Brown, Geoffrey

Coe, Sebastian

Colvin, Michael

Congdon, David

Conway, Derek

Coombs, Anthony (Wyre For'st)

Coombs, Simon (Swindon)

Cope, Rt Hon Sir John

Couchman, James

Currie, Mrs Edwina (S D'by'ire)

Curry, David (Skipton & Ripon)

Davies, Quentin (Stamford)

Davis, David (Boothferry)

Day, Stephen

Deva, Nirj Joseph

Devlin, Tim

Dickens, Geoffrey

Dorrell, Stephen

Douglas-Hamilton, Lord James

Dover, Den

Duncan, Alan

Duncan-Smith, Iain

Dunn, Bob

Durant, Sir Anthony

Dykes, Hugh

Eggar, Tim

Elletson, Harold

Evans, David (Welwyn Hatfield)

Evans, Jonathan (Brecon)

Evans, Nigel (Ribble Valley)

Evans, Roger (Monmouth)

Evennett, David

Faber, David

Fabricant, Michael

Fenner, Dame Peggy

Field, Barry (Isle of Wight)

Fishburn, Dudley

Forsyth, Michael (Stirling)

Forth, Eric

Foster, Don (Bath)

Fox, Dr Liam (Woodspring)

Freeman, Rt Hon Roger

French, Douglas

Fry, Sir Peter

Gale, Roger

Gallie, Phil

Gardiner, Sir George

Garel-Jones, Rt Hon Tristan

Garnier, Edward

Gillan, Cheryl

Goodson-Wickes, Dr Charles

Gorman, Mrs Teresa

Gorst, John

Grant, Sir A. (Cambs SW)

Greenway, Harry (Ealing N)

Greenway, John (Ryedale)

Grylls, Sir Michael

Hague, William

Hamilton, Rt Hon Sir Archie

Hamilton, Neil (Tatton)

Hampson, Dr Keith

Hanley, Jeremy

Hannam, Sir John

Hargreaves, Andrew

Harris, David

Haselhurst, Alan

Hawkins, Nick

Hayes, Jerry

Heald, Oliver

Heathcoat-Amory, David

Hendry, Charles

Hicks, Robert

Higgins, Rt Hon Sir Terence L.

Hill, James (Southampton Test)

Hogg, Rt Hon Douglas (G'tham)

Horam, John

Hordern, Rt Hon Sir Peter

Howard, Rt Hon Michael

Howarth, Alan (Strat'rd-on-A)

Howell, Sir Ralph (N Norfolk)

Hughes Robert G. (Harrow W)

Hughes, Simon (Southwark)

Hunt, Rt Hon David (Wirral W)

Hunt, Sir John (Ravensbourne)

Hunter, Andrew

Hurd, Rt Hon Douglas

Jack, Michael

Jackson, Robert (Wantage)

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