House of Commons Hansard Debates for 16 May 1994

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The fact that John cannot pursue what he was doing is a great shame. I regret very much that he cannot finish the series of speeches on which he had embarked and his articles on the reform of international financial institutions and other international bodies, examining them in the context of the European Community. I hope that other members of the party will take up the torch.

Much of what I have to say has already been said supremely well by my hon. Friend the Member for Gateshead, East (Ms Quin) and by the right hon. Member for Old Bexley and Sidcup (Sir E. Heath). I shall recall the roots of the European Community. Let us not forget that a number of fortresses were set up after the 1939-45 war. There was the potential for a huge number of countries--not least this country--to become inward-looking because of severe economic problems. The hon. Member for Chingford (Mr. Duncan Smith) is beginning to look cynical.

Mr. Iain Duncan Smith (Chingford) : The hon. Gentleman referred to my looking cynical. The reason is that I seem to have heard this speech endlessly, endlessly, endlessly. I thought that the purpose of this debate was to look forward and to see what was being proposed as the direction for Europe. We endlessly go back to turgid history ; whether it is two years ago or 40 years ago, it is endless. When will people get on and discuss what will happen in future ?

Mr. Enright : The hon. Member for Chingford must understand his roots. From his many pronouncements, it is clear that he does not, and that he does not know where he is going. He must know where he has come from to know where he is going. He is precisely the sort of person who says, "I would not have started from here." Unfortunately, he did start from there.

It is worth recalling that the continent was starving and that children had rickets at the end of the 1940s. It is worth recalling that we had meat rationing and that we were held to ransom by Argentina in terms of beef sales. It is important to remember that. Some flavour of that was given by the passion of my hon. Friend the Member for Rotherham (Mr. MacShane), who made a very fine maiden speech. I am sure that he will remind the hon. Member for Chingford about the roots and origins of the ethic that brought about Europe. Neighbour states in Europe that had always been at war were intent on settling their differences. They were intent on doing that even though, most recently, they had grievously wronged each other. That is why they wanted an ever-closer union. That is why they said that they would not have starvation again on this continent and that they would not have war again on this continent. That is why the institutions were started.

It is true to say that we depend on people for what we do. It is also true to say that we depend on institutions to continue the actions of those people. As we know only too well this week, people pass away. It is the institutions that must continue the good that is in them.

The institution that started the European Community was the Coal and Steel Community. As has been said today by my hon. Friend the Member for Gateshead, East, in the middle of that is not just economics.

The hon. Member for Stafford (Mr. Cash) regularly talks about economics ; he likes the economics of the marketplace, but he does not like everything that goes with

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that. He once said in the House that the Single European Act was okay because it was just about the marketplace-- that it was not about all the other fripperies. However, if he went back in history and read closely the Coal and Steel Community treaty and the Euratom--European Atomic Energy Community--treaty, he would see that they were about the consumer, the worker and the individual who lives in Europe and is a citizen of Europe. It is from those roots that the present position has grown.

We must not forget the morality of Europe. If Europe is just an economic concept, it is not worth defending. It is more than that. It is an economic, social and spiritual concept ; that is what we must decide to follow and cherish. We must decide whether to follow, as the hon. Member for Stafford does with commendable rapidity, whatever Alan Walters says--if the hon. Gentleman has not said it before. We must choose between the sort of Europe that Alan Walters wants and the sort of Europe that St. Francis of Assisi wanted. The hon. Gentleman must decide which side he is fighting on. He should consider St. Ignatius Loyola, who fought valiantly for the rights of working people.

When we discuss the social contract--I think that I can talk about this here without causing a fuss--we are talking about a just wage. The hon. Member for Stafford prefers to call it a minimum wage because he wriggles out of things like that. We are talking about a just wage. A just wage in the European Community is what the Church to which he and I belong has fought for. It has fought that battle for more than a century, going back to Rerum Novarum and Quadragesima Anno, and coming through to encyclicals of this century and the Low Week pastoral, which the conference of Catholic bishops issued. There is support for the social legislation in the European Community.

Mr. John Butterfill (Bournemouth, West) : I believe that the hon. Gentleman is right to stress the ethical basis on which the Union was founded ; that is important. However, is not it equally important today to resist protectionism, which beggars our neighbours and will diminish the ethical basis on which the Community was founded ?

Mr. Enright : The hon. Member is absolutely right. What the European Union has been about, and what it was about as the Coal and Steel Community, was a balance between getting an organisation of Governments and free trade and a free economy. There are all sorts of arguments about how one defines free trade. We can get off the hook of free trade in a number of ways, as the hon. Gentleman knows well. However, we must ensure that that free trade--that free market--is properly regulated so that it behaves in a moral way.

It is not self-evident to me that all businesses behave in a moral fashion- -far from it, in fact. We regularly read in the financial pages of the misbehaviour of individuals and of whole firms. Even British firms misbehave on occasions ; we are not talking just about these continental chaps who come in from over there.

Trade unionists have told me that they were pleased to be taken over by BMW because they had looked at the agreements in Germany between BMW and its work force. They realised that those agreements were much better than anything that they had had in Britain until now. As has been said, we should remember that all the firms involved in the inward investment that has arrived have lived up to

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the social chapter and beyond it. I challenge any hon. Member to tell me of a firm that has come to this country from outside which has not lived up to the social chapter in its entirety, including consultation with its work force.

My right hon. Friend the Member for Llanelli (Mr. Davies) mentioned IBM. I was sorry that he used IBM as an example, because I believe that he got it wrong. One of the reasons why IBM went under was that it guaranteed a job for life. It said to its people throughout the world, "We will not sack you. We will make sure, as long as you behave and as long as you try to do your best for us, that you have your job." There was real security of tenure there. The company said, "We will make sure that we consult all the work force." Real consultation went on, not always through unions, but in a variety of ways. The result was that some of the small firms and some of the fly-by-night boys pinched part of IBM's market, and the company had to respond.

My right hon. Friend the Member for Llanelli was right to say that the company had to look again at what it was doing and at its policy of no sacking. That no-redundancy policy had to be reviewed. The company had to give up the policy and to say publicly, "We are sorry." After more than 70 years--I do not know how many years exactly--the company gave up that principle. However, it said, "Even though we have given up the principle, in practice we shall try to continue it even though the firms that we oppose are playing fast and loose with their work forces." With voluntary redundancies in this country, IBM has kept its promise and has started to build up again. My right hon. Friend the Member for Llanelli is right to say that we must review the workings of the European Community from time to time and that we have to ensure that it is ticking over properly. That is precisely what 1996 is about.

Now I shall come to the moment which the hon. Member for Stafford has been sitting on the edge of his seat waiting for--to say the sort of things that should be happening in future, with which, I am sure, he will agree on each occasion. First, the European Parliament must be given more power. There is no doubt about that.

The dreadful phrase "democratic deficit" is terrible, but it means that we are not doing, democratically, what we ought to be doing. What we certainly should be doing, for example, is giving powers of co-decision making to the European Parliament and the Council of Ministers. We have our input into the latter--except that we do not. I am bound to say that, when I was in the European Parliament, I had more control over the Council of Ministers and the Commission than we have in this place. It is quite extraordinary.

We can ask Ministers questions and they can give answers, but we do not know whether their answers are true and we do not know whether what they say in the Council of Ministers is consonant with what they say here. They tell us sometimes that that is so, but they will not open up to us about the debate that goes on, which is extremely important.

That is a reform for which I shall certainly push in 1996, as, indeed, will the European Movement, that dreaded creature of whose board I am proud to be a member. It will

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be pushing very hard for transparency, to reveal who votes for what and how the argument goes on important legislation.

The European Movement will be pushing for--I am sure that the hon. Member for Stafford will also want it--a constitution for the European Union. On top of that--I am absolutely certain that the hon. Gentleman will agree with me on this point--once we get that constitution, we should go round all the member countries and have a referendum on it. I agree entirely with having a referendum at that point. That is the appropriate point at which to have one.

It is also true that we should have a reduction in the number of members of the Commission with enlargement of the EU, which, please God, will come soon and be confirmed by the peoples of the countries that are applying. With enlargement, the Commission will become too cumbersome and we must work out a new method of appointing Commissioners, to be approved of by the European Parliament, with the Commissioners being appointed, as are candidates from the House, with the approval, perhaps, of the House of Commons. That has never happened before and it is about time that it did. It seems very important that the House should be caught up in that process. We desperately need before 1996 a reform in the House of the way in which we scrutinise European legislation. The right hon. Member for Guildford (Mr. Howell) is not in his place, but I would have made the following points had he been here. It seems that the Select Committee on Foreign Affairs has been totally the wrong place to examine European policy, and European wrong-doing in some cases. The job would have been done far better by the Select Committee on European Legislation.

Standing Committees A and B on European matters should be given different powers in different forms. We need to consider all those points and ensure that we put our own house in order, instead of sitting upstairs in Committees for a few moments, and then having the Whips on both sides getting together and deciding that an item will be referred to Standing Committee B when we have recommended that it goes somewhere else, or vice versa, or even that it be considered on the Floor of the House. All those reforms should be made. Of course, as I have already said, we should sign up to the social chapter. We should also certainly sign up to monetary union. I am not in two minds about that. The Benelux countries, Germany and France are going to take the route of a single currency and we have, at the very least, to decide our response to that.

I was greatly encouraged by West Germany when it took on the ostmark. It did it at a blow and it did it at parity. It was a most remarkably courageous act, by a Conservative Chancellor, admittedly. It was rash, but it has come off. It caused real suffering in East and West Germany for a time, but we have now seen the fruits of that daring and constructive move.

You, Mr. Deputy Speaker, know as well as anybody else that I represent an area which has been ravaged by unemployment and has seen its principal industries wiped out at a blow, not by anything done by the European Union, but by the short-term actions of the Government. I should like to take the coal industry as an example of what we should not be doing in relation to Europe and of the positive harm that it does us if we do not take into account the European dimension.

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Energy should be at the forefront of our debate in Europe. It is important not only for now or for next year, but for way into the next century. When the Government were allowing the coal industry to go into decline and, in some cases positively destroying it, people in the Commission were asking why we did not put the coal industry into a European energy policy and why we did not ensure that we had the necessary indigenous supplies, which would not leave us to be ransomed by others outside the Community. We did not heed those voices. The result is that many people in my constituency are unemployed and we do not have the security of energy supplies going into the next century. It is those areas of policy that we should start to debate to see how we can put right, in a European framework, what we have hitherto got wrong.

I am optimistic. I hope that people will vote in massive numbers in the European elections, but I shall not say which way I want them to vote, because the debate is bipartisan today.

7.56 pm

Mr. William Cash (Stafford) : I am certainly not bipartisan and I sincerely hope that people will vote Conservative in the election. I enjoyed enormously the maiden speech of the hon. Member for Rotherham (Mr. MacShane), although I think that he may--I hope--in due course, come to refer to those of us who espouse the Euro-realist cause as Euro-realists and not Euro-septics. It was a good speech and I felt very much at home during it because I lived for 25 years very near where the hon. Gentleman comes from, and the experiences of seeing the steel mills of Sheffield being destroyed and the coal industry around that area disintegrating had a powerful impact on bringing me into politics. I took a different route from the hon. Gentleman, but I am sure that he appreciates that we may arrive at different conclusions from similar motives.

With respect to the hon. Member for Hemsworth (Mr. Enright), who spoke about the coal industry, the massive £6 billion subsidy paid to the German coal industry has had a significant knock-on effect, I dare say, in his constituency.

With respect also to the hon. Member for Rotherham, the £25 million fine imposed on British Steel was substantially the result of an increase in the volume of steel available in the Community, as a result of the over- subsidisation in Italy, Spain and other countries. Therefore, from that point of view, I am looking for a constructive and new landscape for Europe.

As my hon. Friend the Member for Chingford (Mr. Duncan Smith) said in an intervention, what we are seeking to do as Euro-realists is bring back into the Community a sense of purpose, which is relevant to the third millennium and not to retread the old, obsolete policies ; they were well intentioned, but they were based on the 1950s and 1960s. Certainly, since the wall has come down, those policies have become increasingly irrelevant, not only in terms of the new development in the Pacific rim and the far east, but in respect of eastern and central Europe, because the ball game has changed, as Bosnia and the tragedy that we have witnessed there testifies. We are looking for a constructive and purposeful European Community. It is with deep regret that I have to say that the Maastricht treaty is part of the background to

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the debate. The treaty reflects implicity the developments that took place before it was completed and signed, which are within the framework of the White Paper.

There was a great Foreign Secretary in the 19th

century--Palmerston--who put British foreign policy in a fine context when he said that it was a narrow policy to suppose that this or that country was to be marked out as the eternal ally or the perpetual enemy of England :

"We have no eternal allies and we have no perpetual enemies. Our interests are eternal . . . and those interests it is our duty to follow."

It is regrettable that the context in which developments have taken place since the 1950s, which have changed the world so much, have taken us to a point where we are locked into a legal framework, which means that we are not able to choose the alliances that we need to establish from time to time to be certain of the degree of stability that is needed for the next millennium.

The failure of the Western European Union, the European Union and the rest in respect of Bosnia is a testament to the overall failure that I have described. The fifth title of the Maastricht treaty, riddled as it is with confusion, will create the foundation for more trouble as we move forward over the next five to 10 years. The concept of the single currency is already obsolete. It is still being peddled by the CBI, however, as we read in the newspapers today. It is a concept which will destroy the very morality to which the hon. Member for Hemsworth referred, which is based on the freedom of people to vote--the freedom of democracy in their national parliaments and in their nation states. We should be fighting for the sustenance of that morality and the democracy that goes with it.

Mr. Enright : Will the hon. Gentleman give way ?

Mr. Cash : I shall not give way, because I know that others wish to speak. I promised that I would not speak for long.

My right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath) says continually that he believes that if those of us who are Euro-realists were, as he puts it, to be honest-- [Interruption.] The hon. Member for Durham, North (Mr. Radice), who is interrupting, has said much the same, but has had to withdraw. My right hon. Friend says that, effectively, the Euro-realists want to leave the European Community. That is entirely untrue. Such a policy would not lead to the stability that we need.

We need to be in both Europe and the world at large. That is the key point. The idea of a single currency, which has been vaunted and advocated by my right hon. Friend the Member for Old Bexley and Sidcup and by the CBI and other organisations, has today been repudiated by the Institute of Directors. From now on, my right hon. Friend will be unable to state that it is the will and the wish of the business men of England, or of the United Kingdom, to have a single currency. It is made clear in the document that I hold before the House that that is no longer the position of the Institute of Directors. Indeed, I do not believe that it ever was.

Against the background of the tragic circumstances of the death of the Leader of the Opposition, the debate has been conducted in more measured terms than I believe the right hon. and learned Gentleman would have expected. We are looking to a new landscape for a new Europe. I am talking not about the brave new Europe that is being devised by the Commission and the adherents of the

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Maastricht treaty but about a new Europe that will involve the renegotiation of the Maastricht treaty, the Single European Act and the treaty of Rome. We must not be negative about the good things that are contained in those documents, but we must make them relevant to the requirements of the new century, to which we should be looking now.

It is a matter of the deepest regret to me that there is so much untruthfulness, as my hon. Friend the Member for Southend, East (Sir T. Taylor) said, and as my right hon. Friend the Member for Old Bexley and Sidcup indicated, that the treaties have passed through the House by stealth. People have not been informed of what they really involve. They have not been told the truth about where they are going.

I should like to see fair and open trading with the European Community that is based on democracy, with the people of this country being given the information that they need so that they can form a judgment. It is because they have not been given that information that I believe that we must have, and will have, a referendum. 8.5 pm

Mr. John D. Taylor (Strangford) : I begin by congratulating the hon. Member for Rotherham (Mr. MacShane) on his excellent maiden speech. The confidence and fluency that he displayed was a credit to any new Member. He has certainly launched himself well in his political career in the parliamentary Labour party.

This weekend, ex-service men recalled the battle of Monte Cassino in Italy. I had occasion--I do not know whether the hon. Member for Hemsworth (Mr. Enright) was with me at the time, when we were both Members of the European Parliament--to visit the British Commonwealth cemetery at Monte Cassino. I am not known as a person with great emotions but I was moved on that occasion to see the acres of headstones.

It was especially moving for me, coming as I do from Northern Ireland, because as I entered the cemetery I saw that all the headstones in the immediate area were for soldiers in regiments from Northern Ireland. At the entrance are the headstones of members of families that are well known throughout County Fermanagh, such as the Wests, the Cathcarts, the Wilsons and the Farrells, who were all members of the Royal Inniskilling Regiment. It was even more tragic when I read that those who died were 17 years of age, 18, 19 and so on. They lay there with their colleagues from Scotland, Wales, England and, indeed, the Republic of Ireland. That brought home to me the fact that we are part of Europe in peace and in war.

We in Northern Ireland feel that we are Europeans. The first people who came to live on the island of Ireland were the Picts from Scotland. Sometime later, the Celts arrived. These were the Irish from France. They came in larger numbers, and that has been a problem ever since in the island of Ireland. It was the Ulster people who were there first, but we all came in one way or another from Europe. We feel historically, culturally, religiously and economically part of Europe. We are Europeans. We are certainly not Asians, Americans or Africans.

Being European does not mean, however, that we must automatically accept a united states of Europe. Similarly, it does not mean that we must automatically accept a single

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currency. It does not mean either that we must accept the transfer of national sovereignty to unelected bodies in Brussels. As we prepare for the 1996 intergovernmental conference, we must be aware of where some people throughout Europe are trying to lead us. We in the Ulster Unionist party welcome the enlargement of the European Union with the coming of the four new countries--the three Scandinavian countries and Austria. We welcome the Scandinavians because of their close identity with social democracy, their fair interpretation of international agreements and their implementation of those agreements. I am sure that the hon. Member for Hemsworth would agree that their Protestant work ethic will be helpful in establishing a balance in the European Union between the south and north of Europe.

We look forward to future enlargement of the Union--the Minister referred to the possibility of Malta and Cyprus becoming members. The membership of Cyprus intrigues me because it is an island that is now made up of two states and two Governments. There is no free movement of people, trade or services within it. It is therefore difficult to understand how it could become part of the European Union until its internal problems are overcome.

If the Minister watched the recent Eurovision song contest he will know that the only country that gave Cyprus the maximum 12 points was Greece and that the only country that gave Greece the maximum 12 points was Greek Cyprus. If Cyprus became a member of the Union we could end up with two Greeks on the Council of Ministers rather than one. Terry Wogan himself pointed that out during the television coverage of the Eurovision song contest.

In the next few years, the issue of a single currency will be further debated, as it must, in the House. We already have a single currency in Luxembourg and Belgium and its use may be extended to cover the Netherlands, France and Germany. They could go it alone. If we have a single currency for all Europe, the ecu, it will still have to have an exchange rate against other external currencies such as the Japanese yen and the American dollar. The value of the ecu in the international exchange markets will have to be supported by the central authorities in Europe.

That means that those authorities will have to introduce greater uniformity in the taxation systems throughout the 12, soon to be 16, members of the European Union. Those authorities will also have to exercise some control over public expenditure within those 16 nations, in the same way as the United Kingdom Government controls the public expenditure of local government. Brussels will also have to impose some restrictions on the public sector borrowing requirement of the 16 member nations. All that suggests that, by necessity, government will have to be transferred from London to those central authorities in Brussels.

The hon. Member for Hemsworth said that he did not like the phrase "democratic deficit", but I believe that it speaks for itself. There is a lack of democracy within the European Community's institutions ; I am thinking not just of the Commission but of the European Parliament, of which we were both Members. People speak about giving greater powers to that Parliament, but we must first ensure that it is a democratic institution.

Oh yes, people may vote, but they do not do so in a uniform electoral system. A system of one man, one vote may operate, but one vote is more equal than another,

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because the member countries are not fairly represented within that Parliament. It is weighted in favour of the smaller countries and against larger ones, such as the United Kingdom and Germany. Countries of that size do not have a fair say in that Parliament, because it is not democratically elected on the basis of one man, one vote of equal value.

The Minister may be unable to reply to the comments that I wish to make about Northern Ireland, but I want to place them on the record. In the early 1970s, when we were negotiating membership of the European Community, the then Northern Ireland Government at Stormont were involved in discussions with the Home Office and the Foreign Office in London to ensure that certain matters relating to Northern Ireland were taken into account before the Act of accession. One of the things on which an understanding was reached was that a civil servant from the Northern Ireland civil service would be a member of the United Kingdom representation in Brussels- -the UKREP. For many years, there was a civil servant from England, one from Wales, one from Scotland and, until recently, one from Northern Ireland at the UKREP. That helped to ensure that matters particular to Northern Ireland were not overlooked when the United Kingdom negotiated certain matters in its relationship with the EC. A Northern Ireland civil servant no longer serves on the UKREP and recently we have observed that, when decisions have been made in negotiation between the United Kingdom and the Commission, the special problems of Northern Ireland have been overlooked. I shall give three examples, the first of which relates to the beef processing industry.

The EC Commission has now introduced a scheme called the de-seasonalisation scheme. It has created a situation within the island of Ireland whereby the dead meat plants in the Republic of Ireland are able to give £56 more per animal than the dead meat plants in Northern Ireland. As a result, there is now a massive flow of beef cattle, store cattle and even calves from Northern Ireland to the Republic. Cattle from Great Britain are also moved through Northern Ireland down to the Republic to be killed in the southern Irish dead meat plants.

Apart from the incentive of £56 per animal, a further attraction of the Republic of Ireland is that it sells beef to certain countries in north Africa, such as Libya, and in the middle east, with which the United Kingdom does not trade. The scheme is causing serious problems for the dead meat plants of Northern Ireland, the throughput of which has declined month by month. The employment of many workers in our dead meat plants is now under serious threat because the implementation of de-seasonalisation scheme in the Republic is proving disadvantageous to the beef industry of Northern Ireland. My second example also relates to agriculture. I will not go into great detail on the EC cereal compensation regime except to say that, once again, it works against the interests of Northern Ireland. They may well have been overlooked when the scheme was negotiated by the Government. The cereal aid in 1994 will be as follows : in England, £191 per hectare, in Scotland, £182 per hectare, in Wales, £167 per hectare and in Northern Ireland, £152 per hectare. I know that people in Wales share our great dissatisfaction with the present scheme. We recommend that England, Wales and Northern Ireland should be treated as one region. That

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would mean that everyone would benefit from the European cereal aids compensation scheme in the same way, and we would all get £190 per hectare.

My final example of the way in which Northern Ireland has been treated disadvantageously because our problems have been overlooked within the EC relates to education. The EC has understandably agreed to a system whereby those in university education receive the same grant in the country in which they are studying as that which that country gives its own undergraduates. That seems reasonable. If a few thousand students from France go to Germany, they receive the German university grant, and if a few thousand Germans go to France, they receive the French university grant.

That system is okay where countries pay grants to their university students, and everyone agreed to it in the Council of Ministers, but what happens if one country does not pay grants to its university students ? Such a country is the Republic of Ireland. All the students in the Republic of Ireland quickly caught on to that wonderful system. If one goes to the United Kingdom, one immediately qualifies for university grants from the United Kingdom Government and the education authorities. Now, people are even qualifying for the student loans scheme. That is okay for Great Britain--not many Republic of Ireland students will go there--but it is creating a serious problem for Northern Ireland, especially for the poorer section of our community, which is often the Catholic section. I shall tell you how it works, Mr. Deputy Speaker. We have only two universities in Northern Ireland and several colleges of further education. In the two universities alone, there are more than 3,000 students from the Republic of Ireland, and the number increases by the year. They all receive that grant from the Government, and every student at university in Northern Ireland costs Her Majesty's Government £5,500 per annum. That scheme therefore costs the United Kingdom Government about £15 million per year-- British taxpayers' money being used to educate southern Irish students. However, if British students, especially in Northern Ireland, go to the Republic, they do not receive a grant because there is no grants system in the Republic. It is a one-way traffic.

Why do I say that it is hurting the Catholic community ? My argument is supported by facts. Traditionally, Protestant undergraduates looked towards Great Britain because they felt British. Traditionally, most Catholic students stayed in Northern Ireland or went to the Republic. Now, as a result of the competition from the southern Irish students pouring in, taking advantage of the European Community scheme and obtaining grants from the United Kingdom Government, they cannot obtain places in Northern Ireland to the same extent as previously. The result is that, although in 1971 only 3 per cent. of Catholic students left Northern Ireland to go to England, Scotland and Wales, by 1991, the percentage had increased to 30 per cent. Catholic students are having to leave Northern Ireland because they cannot obtain places in the Northern Ireland universities.

I conclude with another short argument. We speak about a single currency. I have given three examples of ways in which the European Community, by ignoring the special problems of Northern Ireland, is creating an imbalance or unfair competition or distorting the market. Given the single currency that already exists in Belgium and Luxembourg, is it not time for Her Majesty's Government once again to consider, in consultation with the

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Government of the Republic of Ireland, having a single market--a single currency--and the fair implementation of common policies such as the common fisheries policy and the common agricultural policy in the British Isles as a unit ?

There was a time when we had a single currency in the British Isles. As we progress in Europe, step by step, we should, in the context of the British Isles, begin to think in terms of all the islands being one country again-- in the Community, naturally. They would be sovereign states none the less-- I am not suggesting the abolition of the Republic of Ireland. If we had a common currency, greater uniformity of tax systems in the British Isles and fairer administration of the common European Community policies, the disparities and the unfair competition across the border within the island of Ireland to which I have referred would be overcome overnight.

8.23 pm

Mr. Quentin Davies (Stamford and Spalding) : I should like to add my own congratulations to the many congratulations that the hon. Member for Rotherham (Mr. MacShane) has received on his maiden speech, and to give him my best wishes--at least, personally--for his continuing career in the House.

It is always a pleasure to follow the right hon. Member for Strangford (Mr. Taylor), who speaks with the greatest lucidity and mastery of his brief whenever he speaks on behalf of his constituency and his Province, as was the case tonight. He persuaded me, at least at first sight or at first hearing--this was my first knowledge of the existence of the problem--that there might well be a case for having a permanent representative of the Northern Ireland Office in UKREP, and I shall listen with interest to the reply that he will no doubt receive later to that question.

I did not agree with the right hon. Member for Strangford in the rest of his analysis. I found it slightly surprising that the right hon. Gentleman, of all people, should suggest that the establishment of a single currency in the European Union would subvert the political independence of the individual members of that Union. As the right hon. Gentleman said, a good example of a single currency area is the one that existed, for the 50 or 60 years following 1922, between the Republic of Ireland and the United Kingdom. We in the United Kingdom were certainly not governed from Dublin during that period and I do not suppose that the right hon. Gentleman seriously would suggest that the Republic was governed from London during it. He adduced an interesting example which, I am afraid, runs counter to the conclusions that he wished to draw from it.

I should like to mention two arguments which have been central to the debate and which have formed a major part of the discussion in the country ; then I shall refer to two issues which, remarkably, have not featured in this debate or in other recent debates on the European Union and which have also been strikingly and, I think, unfortunately, absent from the general public discussion of European matters.

A great deal has been said about the single currency. My reaction is that more has been said on the subject than it is worth while to say at the present juncture, given that, during the intergovernmental negotiations that led up to the

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treaty of Maastricht, the Prime Minister negotiated an option for this country--the option to join a single currency if we wished and if our economy met the convergence criteria, which is an objective that we are pursuing for its own sake anyway. Unlike the other members of the Union, we have no obligation to join that currency automatically after the turn of the century, even if our economy meets the convergence criteria.

In politics, as in other areas of human life, a free option is a valuable instrument and no one in his right mind should throw it away by determining in advance whether or not he will exercise it. Many people--some, I fear, in the House and some, I fear, in the media--have reasons for not wishing to draw attention to the fact that the Prime Minister scored a remarkable diplomatic success, extraordinary by historical standards, in enabling us alone of the members of the Union to enjoy that option.

As we have that valuable asset, which has been handed to us by the Government and by the efforts of the Prime Minister, why throw it away ? Discussion of the subject should properly wait until the time when we have to decide whether to exercise the option. Obviously, we shall do so in the light of the circumstances prevailing at the time ; and in any case we shall need to consider the matter only if a single currency has emerged on the continent.

A second theme that ran through the debate was perhaps the most striking one of all because it was mentioned not only on both sides of the House but on both sides of the European controversy--if I may call it that--within the two major parties and by the Liberal Democrats. It was mentioned by the hon. Member for Hemsworth (Mr. Enright), by my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath) and in remarkably similar terms by the right hon. Member for Bethnal Green and Stepney (Mr. Shore) and the hon. Member for Southend, East (Sir T. Taylor). It was mentioned by the hon. Member for Durham, North (Mr. Radice) and by many other hon. Members on both sides of the House.

It is the fact that the European Union, as it exists, is insufficiently democratic and unsufficiently accountable and therefore is insufficiently understood. Given the great importance of decisions taken in that context, the public do not follow them thoroughly enough. That is unsatisfactory.

I hope that all hon. Members can agree on these matters, and also that we can agree with our European partners, because the fundamental impetus behind the establishment of the European Economic Community, as it then was, was the desire to create a vehicle to nurture and defend democracy. Democracy is the great principle that has emerged from centuries of European political traditions, which we all share ; yet we have created institutions within the European Union which, in many ways, remain a travesty of democracy.

Until the Maastricht treaty, exclusive rights of initiative were in the hands of the unelected Commission. That was an affront to every principle of democratic legitimacy and electoral accountability and represented the essentially technocratic nature of the original European institutions when they were created back in the 1950s. I am glad to say that the Maastricht treaty made some inroads into the monopoly of initiative held by the Commission ; and at the Edinburgh summit, which followed the signing of the Maastricht treaty, we made considerable progress--at the behest and initiative of the British Government, let it not be forgotten--in opening up the Council of Ministers. For example, we can now see the voting record on legislative

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decisions taken in the Council of Ministers, which is extremely welcome. Nevertheless, a large part of the Council of Ministers' activities takes place behind closed doors. It is like being back in the 18th-century world with Ministers meeting in cabal behind the green-baize door, then coming out and telling the people what has been decided on their behalf.

Unless those doors are opened, we shall never have the democratic accountability in the Community or the public participation in the detail of debates to which all hon. Members, to judge by this debate, clearly aspire. We need to know not only who voted how on the relatively unusual occasions when votes are taken, but what arguments were adduced, by whom they were put forward, and what alliances were forged. Ministers who take decisions in the Council of Ministers on behalf of the peoples of Europe owe that elementary duty of accountability and transparency to their electorates, and I hope that we shall achieve a measure of those values in any constitutional changes in 1996.

We still suffer from a lack of transparency and accountability, despite the improvements to which I have already paid tribute, which make it impossible for the public to exercise their function as a democratic electorate. I must emphasise that it is equally impossible for national Parliaments to fulfil the function, which all of us would like to fulfil, of holding our Ministers accountable for what they do in Brussels. Unless we know the detail of what they are doing, the arguments that they are putting forward and what has taken place on our behalf, the whole structure of scrutiny of Brussels in this place and the rhetoric about democratic legitimacy and national parliamentary sovereignty will remain hollow.

I said that I wished to touch on two subjects that had not been mentioned in this debate and which had been unduly neglected in the public discussion : they have in common the fact that they involve a profound British interest in ensuring that the European Community moves forward in a positive direction. First, we need to complete the single market. It is a major national priority and should be a major political priority.

Someone is bound to say, "We have already completed the single market. We got the 300 directives through by 1 January 1993, so what is he talking about ?" But the single market has not penetrated three extremely important areas--areas where we may as well not have had those 300 directives. What is particularly galling and should attract the attention of the House is the fact that, in those three areas, British industry has the greatest contribution to make and stands to gain most from opening up a single market. The three areas are energy, telecommunications and airlines.

Everyone who has read the papers in the past few days knows about the airline problem. I pay tribute to my right hon. Friend the Secretary of State for Transport who, after tremendously hard work, subtle diplomacy and sheer persistence--persistence was vital in making progress--has made a significant breakthrough. But we need to go further and open up the airline market in the European Union. We need a genuine single market there.

Individual Governments should not be able to subsidise lame-duck airlines, as far too many of our European partners have done and as the French propose to do to the tune of 20 billion francs in the case of Air France. That is a distortion of resources and competition ; it is a weakening and a distortion--indeed, it is a travesty--of the single

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market ; and it is not even in the interests of French taxpayers, because that money will be drawn from taxation from other more productive sectors of the French economy and disbursed on the loss-making bureaucracy that calls itself Air France.

Had the French had the courageous deregulation policies that the British Government have had the guts to put through in the past few years, there is no reason why Air France could not have been the shining success story that British Airways has been. Inherently, in terms of its route structure, Air France began with all the same advantages, possibly even more.

Privatisation and deregulation have created in this country not only an extremely successful British Gas, which is now a major player in the world energy markets, but independent gas companies. So far, we have deregulated the gas market. Above an annual consumption of 2, 500 therms, customers can contract with any gas supplier they wish. We are now moving towards complete deregulation. On the continent, however, nothing has happened.

When will British Gas or the independent gas companies be able to contract with customers elsewhere in the single market ? What does a single market mean if they cannot do that ? When will we stand up to those monopolies, which are often state-owned, such as Gaz de France, Ruhrgas and Gasunie, which consistently and resolutely decline to open up their distribution networks to competitive suppliers on an arm's-length basis ? The interests of important British industries are at stake and we should take the single market to its logical conclusion.

The same applies to telecommunications, where we have not only the successful BT and Mercury that emerged from privatisation, but the world's most successful and competitive cable industry--more successful and competitive even than similar industries in Japan or the United States. Those companies, too, should be allowed to ply their trade on the continent and, if they have the makings of a sector of industry that can become a power throughout the European Union and the single market, they should have every opportunity to achieve that. I hope that the Government will continue to pursue those objectives. I am grateful for the progress that they have made but they must continue to pursue the objectives with the greatest possible vigour and forcefulness. They can be confident that they will have everybody--at least, all Conservative Members--thoroughly behind them when they do so.

Extraordinarily, defence has been a great lacuna in our debates. It is in defence perhaps more than in any other area that it is vital that we make progress with implementing the Maastricht treaty, particularly with regard to the development of effective common defence policies.

There are two central impulses for that : one is the increasingly insistent American pressure for the European allies, as they call them, to develop a viable pillar to the Atlantic alliance. That pressure is being diplomatically and often subtly delivered, but it is unmistakeable. The Americans have made it explicitly clear that they envisage that situations will arise in future close to Europe in which they will expect the European allies to take either the great bulk of or all the responsibility for physical and military intervention--if that is decided upon--while they give full diplomatic and political support. Frankly, that is the world in which we shall be living in the 21st century.

The other impetus that lies behind the need to put some content into the provisions of the Maastricht treaty is that

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