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Mr. Duncan Smith: I do, Mr. Deputy Speaker.

Mr. Dykes: That wasted valuable minutes.

I believe that I am correct in thinking that referendums were not held on lesser matters also crucial to the future of this country, such as Suez. There was no referendum on the Single European Act, which was just as important as Maastricht. That returns to the point that the Government and hon. Members have not properly explained European matters. The public are right to be angry and indignant. We parliamentarians must decide the best mechanism for coping with that problem.

My hon. Friend the Bill's promoter should not misunderstand my motives in hesitating over a referendum. Leaving European matters for a moment, it is interesting to reflect that we would not dream of holding a referendum on capital punishment, which many people might think justified. I shall comment later on the European Union's constitutional development.

Contrary to my views of the Bill's substance, if it receives a Second Reading, I shall welcome the opportunity to debate it further. I would not be averse to a referendum, from the point of view of the full public campaign that is needed to put over the arguments for and against Europe. That would at long last give a proper opportunity, I hope on an all-party basis, to make positive arguments about the European Union, which entails no loss of sovereignty for this country, but means closer and closer, partly integrated, co-operation, where necessary, between friendly member states in a friendly European Union, with countries and peoples actually liking and getting on with each other. That was the whole point of our original membership after 12 years of agonising delay and negotiations--a solemn decision made by Parliament on behalf of the British people.

A referendum campaign would turn around public opinion from being hesitant and nervous about Europe, which I understand, to being extremely positive. As chairman of the European Movement, I would inevitably welcome the Bill progressing through further stages, while not being intrinsically supportive of its content. I think that my hon. Friend the Member for Billericay now understands that distinction. It would be going too far for me to approve her Bill's content, but I support the Bill going forward.

I remember the dotty Labour Government's referendum of 1975, when public opinion was strongly against the renegotiated terms, but I suspect that it was also against our incipient, brand new membership of the then European Community. Look how public opinion turned around. The European Movement had a fabulous public sector budget to stage an all-party campaign. The great and good and all the decent people came out of the woodwork, instead of some of the maniacs, and there was a proper campaign. Look at the result.

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The same would happen now, but now it would be even more difficult to frame the referendum's questions. It was simple for Labour to hold a referendum for the same purposes--its riven parliamentary party was Labour's motivation for a referendum. The idea of a referendum from some of our more eccentric Conservative colleagues is also to deal with divisions in the parliamentary party and to some extent outside.

The questions for that earlier referendum were much easier to frame after renegotiating membership than would be the case now, particularly a question on a single currency. The mind boggles, not only at its effect on our national currency--and I am patriotically proud of our ancient sterling, which was a world currency and still is to some extent, at the margin. It is tragic to remind the House that sterling has lost 90 per cent. of its value since 1949, when the deutschmark started.

What fantasy world are my colleagues defending with the nonsense that there could be a referendum on a single currency? That would be even more dubious than a referendum on the questions in the Bill. That is why, even if the Bill is granted a Second Reading, the notions underlying it have to be resisted. I do not want to sound anti-democratic or suggest that one should not want the people to have a say; I believe that the people should have a say through Parliament and their elected representatives.

If there were a referendum, we would campaign vigorously for the correct outcome. I believe that Europe should be an all-party matter, as it is in most other member states, and as Northern Ireland is and always has been. In the last German general and European elections, there was no difference at all between the main political parties but, when I mentioned that to one of my colleagues, the response was, "Germany is not a real democracy like us, old boy." I do not want to sound condescending, but that is the corrosive reaction of colleagues who do not understand sufficiently what is happening in other member states.

Although I admire the noble motives that led my hon. Friend the Member for Billericay to draft the Bill, its final weakness is that it would mean that we wanted to act on our own while other member states, without any fear of loss of sovereignty, wanted to proceed with arrangements for the European Union for the greater strength and prosperity of them all. That cannot be gainsaid by even the most fanatical anti-European hon. Member. Britain would be left in isolation, which would mean the ruination of our national currency. 11 am

Mr. Robert Maclennan (Caithness and Sutherland): I have long sympathised with the views of the hon. Member for Harrow, East (Mr. Dykes) on the development of the European Union, so it is a little disappointing to have to disagree with many of the arguments that he has deployed today about referendums.

The referendum has an important place in British constitutional arrangements and its place should be strengthened as we approach significant constitutional changes. Such arguments were deployed in a debate initiated by the Liberal Democrat party on the development of the European Union. My right hon. and hon. Friends cogently made the general case for

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referendums, and the hon. Member for Billericay (Mrs. Gorman) and some of her colleagues were kind enough to support us on that occasion. It is therefore with some regret that I find that I cannot take the road that she has signed, for reasons that I shall develop. I believe that the hon. Member for Billericay said that the Bill seeks to strengthen the Prime Minister's hand in the forthcoming intergovernmental conferences by reflecting the views of the British people. As such, I believe it to be more of an attempt to establish an opinion poll than a true referendum. Referendums are best held to present the public with a choice between a decision to maintain the constitutional status quo or a decision to accept a new and clear proposal, which would enable them to decide whether they wanted to take that step. The Bill does not offer such a clear choice because it does not offer the maintenance of the status quo as an alternative.

The Bill hypothesises that there might be changes to which the public would be opposed, but it is not clear what those changes might be. The changes are presented so hypothetically that it is difficult for the public to decide what is in fact on offer. I do not think that the Prime Minister's hand would be strengthened at the intergovernmental conferences by the holding of this sort of official opinion poll on two propositions, neither of which represents the current position or the possible future position, following the negotiations. Indeed, I think that such an opinion poll would confound and confuse the public and the Prime Minister even more.

Mr. Carttiss: I know that it is not an exact parallel, but does the hon. Gentleman accept that, when the Danish Prime Minister negotiated allegedly better terms for Denmark at the Edinburgh summit in 1992, his hand was strengthened considerably by the desire of the rest of the European leaders at the summit to satisfy the Danish electorate who had said no to the Maastricht treaty in the referendum held in Denmark before the Edinburgh summit? The result was that the Danish Prime Minister held another referendum on the new terms that he said he had gained at the Edinburgh conference. If that referendum strengthened the Danish Prime Minister's hand, why should not the referendum proposed in the Bill strengthen our Prime Minister's hand at the intergovernmental conference next year?

Mr. Maclennan: The hon. Gentleman was good enough to say that the two cases were not exactly parallel and, of course, they are not. What was negotiated and what the Danish Prime Minister proposed was certain, but the Bill presents us with a series of extremely hypothetical propositions of such abstraction that it would be hard for the public to know exactly what they were being asked to approve. That is why I do not think that a pre- legislative referendum on the European Union makes sense. I use the word "pre-legislative" in the sense of an agreement between those empowered under European Union arrangements to take decisions on behalf of participating nations. There is a powerful case for a referendum should the

intergovernmental conference result in propositions that would fundamentally alter the balance of constitutional power between Parliaments and European Union institutions of government. There has been too much reform by a process of "grandmother's footsteps", whereby Ministers have collectively crept towards their goal of European Union, but, when anyone looks at what

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they are doing, they say that they have not moved. The reality is that significant moves have been and are being made all the time. I served as a junior Minister for five years in the previous Labour Government and I regularly attended meetings of the Agriculture Council, perhaps as often as every second month. I was conscious of the fact that significant decisions were being taken which had a binding effect on the House. It was shortly after the referendum to which the hon. Member for Harrow, East referred that those decisions were, in a sense, ratified by decisions taken by the Government but also by the country in the referendum of 1975.

Mr. Dykes: All treaty arrangements have that effect. Decisions made among Governments have a binding effect on our Parliament and others. I do not see a problem. Would it not have been fairer to tell my hon. Friend the Member for Great Yarmouth (Mr. Carttiss) that referendums were compulsory in Denmark and Ireland only because of their written constitutions? France held a voluntary referendum, which resulted in chaos and mayhem.

Mr. Maclennan: I do not think that the way in which other countries handle such problems should necessarily guide us as we decide the best way to achieve constitutional change. I wish that the distribution of powers were set out more clearly. The frequent changes of the past decade, including the accretion of power by central Government and the winding-up of local authorities such as the Greater London council, have been made without the safeguard of a written constitution or the holding of a referendum to pronounce on whether those changes were acceptable. That is a very unsatisfactory arrangement.

Mr. Roger Knapman (Stroud): If there should be a referendum when there is constitutional change, I wonder what happened to the hon. Gentleman's party just two years ago. There was just such a vote during the passage of the Maastricht treaty Bill, and some of us voting then felt slightly lonely in the Division Lobbies, possibly because most of the Liberal Members were not there at the time.

Mr. Maclennan: It is true that there were differences of opinion in my party about that at the time, but our view has been much influenced by the developments that have followed, and by a sense that what was done in the name of the country at that time did not have the fullhearted consent even of those who allegedly supported the governing party.

That that is so is made manifest by this Bill, which is supported by eight Members of Parliament, none of whom now belongs to the governing party. I am baffled to know how they can feel that this Bill will strengthen the Prime Minister's hand at the

intergovernmental conference. It is just a further display of how the Conservatives--clause 1(2) sums this up--tend to fight like ferrets in a sack. I cannot see how this sort of disarray helps the Prime Minister--or the Minister who will have to answer the debate. I hope that I have adequately explained why I favour a referendum on the outcome of the IGC, if it involves major constitutional change that significantly alters the balance of sovereign power as between this country and the European Union.

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I do not believe that we should have referendums every few years just to take the temperature of the country on the current state of European legislation. In so far as it simply carries out earlier decisions of Parliament to give effect to agreements that have been reached, it is only doing what it is constitutionally empowered to do. We should not hold referendums simply to try to reverse what has been done by the process of grandmother's footsteps, unless there is a clear alternative. This Bill certainly does not provide one, and that is perhaps its greatest weakness.

Clause 1(2) offers hypothetical alternatives: the development of a full European Union, which, if we are to believe what the Government have said, is not likely to come about as a result of the IGC; or remaining in the European Union,

"but only as a member of an association of states trading freely with one another, with substantial repatriation of sovereignty". Anything less precise than that would be hard to draft--even with the assistance of Mr. Godfrey Carter, who was apparently prayed in aid by the hon. Member for Billericay.

I could not at all understand what the hon. Lady said about free markets and free trade. She said that free markets were not about level playing fields. She said that they are about giving our businesses an advantage to trade and to prosper--that at least was the gist of it. That struck me as a strange idea indeed. Free trade is either free or it is fettered by obstacles to trade. Anyone who wants to remove obstacles to trade must be in the business of regulation. The so-called Euro-sceptics who do not like to be called anti-European have to come to terms with this conundrum. If they want free trade, there will also have to be regulation to ensure that it happens; otherwise national Governments will erect obstacles, such as the French provisions to exclude our chickens or eggs on the grounds of some health hazard to the French eating public. That is why there has had to be regulation in Europe: to free up trade.

Sometimes these regulatory arrangements can be extremely irritating to people in the business--that is understandable--but they exist to enhance genuine free trade.

Mr. Richard Shepherd (Aldridge-Brownhills): Of course what the hon. Gentleman says is true, but our anxiety about the single market derives from the fact that it is a serious endeavour to take away natural advantage. It is the elements of natural advantage within economies which make for vigorous free trade and enable us to survive economically. Natural advantage is therefore to be encouraged, not to be diminished or done away with--that was the point made by my hon. Friend the Member for Billericay.

Mr. Maclennan: If we had to rely on our natural advantages, without the protection of free trade, we might find that we were suffering from a series of diminishing assets. Our pastoral economy, for instance, might easily disappear. The New Zealanders' capacity to breed sheep, and the Australians' capacity to breed cattle, are considerably greater than the capacities of those who raise these animals in the Cotswolds or in East Anglia. We are not in the middle ages any more. It was to protect and adjust the European economies that have been heavily dependent on such activities that the common agricultural

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policy was introduced. It has wrought a remarkable transformation, from over-dependence on peasant agriculture to highly sophisticated industrial economies.

Circumstances have changed, and the CAP has had to change with them, becoming less protectionist. In time, therefore, we may view the prospect of greater trade between countries with natural advantages, such as Australia and New Zealand, and Europe itself. That is a welcome process-- hence the willingness on the part of the European Union to adapt the CAP to take account of change.

The hon. Lady's theoretical idea--that free markets are not about level playing fields--will not come as music to the ears of the business men to whom she referred and who are alleged to be hostile to the European Union. I, too, for my own reasons travel around the country talking to business men. Although many of them find the regulatory regimes of the EU-- especially those allegedly introduced for consumer protection purposes-- extremely irritating, I have not heard any of them say that they oppose the objective of a level playing field. But the hon. Lady advanced that as an argument in favour of clause 1(2)(b).

The second major obscurity in the clause is the phrase "substantial repatriation of sovereignty". That seems to me about as long as a piece of string. I do not know what the Government--it would be the Government who would have to decide what that meant and recommend it to Parliament--would make of such a phrase.

Does it mean that we would exclude the European Court from the interpretation of enactments by the Council of Ministers? Does it mean that we would deny the European Court the authority to call to account other countries that break agreed rules? That would certainly be a "substantial repatriation of sovereignty." It would also amount to substantial destruction of the whole point of having a European Union and of the effectiveness of the system of reaching agreements that are then enforceable.

What other substantial repatriations might the hon. Lady have in mind? Does she wish to confine the decision-making process of the EU institutions to a narrow range of subjects?

It has been shown by the EU how, through the liberalisation of such measures as I have referred to--for example, health regulations bearing on the import of chickens--free trade can be destroyed. It may be irksome to have to deal with such regulations and perhaps it would be nicer to handle them locally. I can understand that that is so from the consumer's point of view. That is why the EU increasingly is asking itself--the matter was properly raised by the hon. Member for Billericay--what matters are fit and sensible for decision by national Parliaments, or even local authorities, rather than by European Ministers following proposals from the Commission.

That concept of what is called subsidiarity is becoming increasingly significant in the development of Community legislation, and properly so. The arguments of people like the hon. Member for Billericay fortify the efforts of those who, like myself, want to see the Community develop rationally, taking big decisions about big issues, and being effective in areas where by ourselves we find it more difficult to be effective.

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I shall cite one example to illustrate the point. The EU has been massively ineffective in assisting the peace process in the Balkans. Member Governments recognised constituent parts of Yugoslavia at different times. They did not seek to co-ordinate, never mind to agree, foreign policies at the beginning of their ghastly embroglio. It seems entirely desirable that they should agree such policies if we are as member states to be effective in our conduct of foreign affairs and defence of our frontiers in Europe. We shall not see that process assisted by stripping down the EU and by what the hon. Lady has described as a "substantial repatriation of sovereignty". I disagree with clause 1(3), which states that the interpretation of "substantial repatriation" would be a matter for "Her Majesty". I assume that the hon. Lady means the Government, who must be "satisfied that their wording"-- that of the questions--reflects "the true intent and spirit of this Act".

Anything less tangible or less capable of being tied down than that would be hard to draft. It is so vague as to be more an effort in propaganda than in legislation. As an effort in propaganda, it reflects the lack of candour that has characterised too much of the debate about Europe.

The hon. Member for Billericay and her colleagues have registered their disagreements about how we may go in Europe in the forthcoming intergovernmental conferences and about where we are. In practice, they want to wipe out history. They do not want to make the EU work better. They would like to hold it at arm's length. I would like to hear the hon. Lady and those who support her say that they would prefer Britain to stand alone, or England to stand alone. The hon. Lady spoke of being English. That would be refreshing candour. I think that the Bill is designed to promote English nationalism.

Mr. Baldry: Surely it is a bit rich to talk about candour and accuse my hon. Friends of lack of candour when the hon. Gentleman's party sought the other week to cobble together a deal with the Labour party to embarrass the Government on a referendum. The word "candour" comes badly from his lips, does it not?

Mr. Maclennan: There was no reason why the Government should not have supported my party's motion, never mind the Labour party. The so- called negotiations were merely a matter of informing the Labour party of what we intended to do. It chose not to support us, and that was a matter for the Labour party. The House carried the motion with the support of a number of Members who take different views on Europe. It was a straightforward and honourable course of action. The Minister has made just about the most foolish intervention in the debate. "Fatuous" is the word that can be used to describe it in a language that I understand and is, unlike the German that we heard earlier, permitted in the House.

Mr. Richard Shepherd: It was only last week that the hon. Gentleman's leader, the right hon. Member for Yeovil (Mr. Ashdown), was identifying the great problem of European development--the failure to secure consent. Yet the hon. Gentleman says that everything that has gone before is secured. He seems to be saying that we can talk about developments in the future, and that consent may be required for them.

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In truth, the Maastricht treaty was never bedded down. Part of the anguish that we see on both sides of the House and wider, across Europe, is the failure so far to have secured consent. The importance of the Bill is that it is signifying yet again--there is no other way in which it can be done--that the holding of a referendum requires proper debate and analysis, and that the institutional arrangements secured for Brussels so far are not acceptable because they confound the most important principle of the House, which is the democratic imperative.

Mr. Maclennan: I agree with quite a lot that the hon. Gentleman has said. That is not surprising, because I quite often agree with him on several issues, and especially on civil libertarian matters, of which he is a notable supporter.

The hon. Gentleman seems to have an underlying belief that developments in Europe are all going in the same direction. There, I think, he is unduly pessimistic. It is my firm belief that the IGCs should be proceeding in two directions, and the first is in strengthening the role of the EU to take action in a democratic way, being accountable to its democratically elected institutions, in areas of policy where national Governments are not capable of being effective.

Secondly, and at the same time, I would look to the IGCs to transfer power back from Brussels, or from wherever the Council of Ministers may be meeting, to national Governments in areas where it is unnecessary for it to legislate. Regulations on the decibel levels of lawnmowers is one of the famous examples.

Mr. Dykes: Fatally, the hon. Gentleman has put his finger on the one example which is totally at variance with the truth. British lawnmower manufacturers asked the politicians here in Westminster to keep quiet and to stop interfering with the directive, which was helping our exports to the rest of the Community.

Mr. Maclennan: I bow to the hon. Gentleman's knowledge. He is more constantly involved in these detailed matters than I am.

There are a number of examples, however, where it is up to member states to decide what standards of safety, health and consumer protection are appropriate for them. There has been a degree of meddlesomeness in some areas which has simply been not necessary. The principle is clear, and it is becoming increasingly accepted by the European Commission. The principle should be accepted also by the Council of Ministers and fortified in the discussions.

Mr. Dykes: Legislation is now falling off because the single market has been put in place, and that is welcome for all sorts of reason, including those enunciated by the hon. Gentleman. The Commission has not suddenly surrendered its activities, and more Commission proposals have been put forward at the request of member Governments in the past 10 years.

Mr. Maclennan: There is scope for considering the appropriateness of harmonising provisions, and there are questions about whether matters of standards of health, for example, should be considered under the social chapter, or are better handled at a national level. Some matters should be handled at a European level, because if there is not a harmonised provision there will be a distortion of trade.

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On other matters, it demonstrably makes sense to allow provisions to be settled by national parliaments, or by local authorities. The hon. Member for Aldridge-Brownhills (Mr. Shepherd) is too fearful of the way in which the European Union is moving, and he is not recognising the extent to which power can be transferred down as well as up. Although I may not have chosen apt examples of the principle--the hon. Member for Harrow (Mr. Dykes) was entitled to draw attention to that-- the hon. Member for Aldridge-Brownhills should accept that it is unreasonable to assume that the EU will become a monolithic and more undemocratic organisation.

I hope that the IGC will make the EU a more democratic institution, and that it will strengthen the powers of the European Parliament. It could also strengthen the control of the peoples of Europe over the election of the European Commission to make it seem less like a bureaucracy and more like a representative institution. We would like the Government to push for those developments during the European IGCs, and that would be the time decide whether we have gone far enough.

I have gone on rather too long, and I shall draw my remarks to a conclusion. We must ask whether we have gone far enough in democratising the European Union. We should ask the British people if they are satisfied with what has been done, and then would be the time to have a referendum.

11.32 am

Mr. Tony Marlow (Northampton, North): I liked the hon. Gentleman's point about "grandmother's footsteps". Nothing happens, and then suddenly one finds that something has happened. We discovered that a fortnight ago on immigration. We were told at the time of the Single European Act that we could keep our frontier controls, but now we are told that we cannot keep them. Grandmother is alive and well and living in Europe.

It is an understatement to say that the British people are out of sympathy with our current arrangements with Europe. The evidence is growing every day that the people are increasingly out of sympathy with more and more aspects of European policy, and that those aspects are becoming increasingly unacceptable to the people of this country.

We have arrived where we are today without consent. The British people were consulted once, and were asked whether they wanted to be a part of a European single market. They agreed that they did want to be a part of it. But since that time, we have been led unknowingly by a series of measures and devices almost to the point of no return where, if we do not say stop, we will become a part of a single unified federal European state. I believe that that is the last thing that our people want.

What can we do about it? The Government have a two-pronged policy. One aspect of the policy is silence. We must not say anything which is divisive or damaging to the Government. A fortnight ago, various members of the Cabinet and senior members of the Conservative party did have things to say about Europe. But now they have been told to be quiet, not to speak in front of the children and not to say things which could upset the stability of the Government. We will find that, through the policy of silence, we will not talk about it now. When the change

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comes, we will be told as night follows day- -it has happened in the past--that it is too late, and we should have discussed and debated the matter earlier. A referendum would help to solve that problem. The other prong of the Government's policy is reassurance. We are told that the Government know about the arguments, but we are not to worry because they are winning the argument. Everything in Europe is coming our way, we are told. There are four big lies: "Darling, I promise I will love you in the morning."

Mr. Tony Banks (Newham, North-West): So that is what the hon. Gentleman used to say.

Mr. Marlow: It takes one to know one.

"I am from the Government--I am here to help." "Don't worry, the cheque is in the post." But the biggest lie of all is, "Don't worry, the European argument is coming our way." The people know this. There has been a debate in the country during the past few months, and they are increasingly concerned about what is happening to our country. They feel misguided, and that we are in a position which we do not want to be in.

What can we do about it? There are two ways of dealing with the issue. The Government can go forward to the IGC with a radical new policy direction with regard to Europe to retrieve power. About 40 or 50 years ago, this country ran--more or less satisfactorily--the affairs of one third of the world. Now we are not even allowed to govern ourselves. The Government could go to Europe and say that they know what the people of Britain want. We do not want to leave Europe. We like the single market and co-operating with other countries, but we do not want to be dominated by the Commission, or by the European Court or by the common agricultural policy.

When the Government set about such activity, they do it by and large on a diplomatic basis. They win a bit here, and give a bit there. They are all colleagues and Ministers together. They are friends who will co-operate instead of making the major changes needed to make our relationship with Europe acceptable to the British people. The diplomatic approach will not achieve enough. I believe that a referendum would give a clear statement from the British people that we have gone too far, and would encourage the Government to be much more adamant and determined and adopt a radical approach at the IGC.

Mr. Tony Banks: I am one of those people who is relaxed about the idea of a referendum. An advantage of it is that it would force politicians to come out and discuss the issues with the public. The hon. Gentleman has described what he believes members of the public are saying. I have no great evidence that they are thinking or saying a great deal about the matter. The whole debate about Europe seems to be confined to the politicians and the chattering classes. Would not a referendum extend the area of debate?

Mr. Marlow: The hon. Gentleman and I probably have different views of what public opinion might be, but I think he would agree that a referendum would make sure that there was a debate, as there has not been one yet. It would also give the public an opportunity to participate

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in the debate, not just with their voices but with their votes. That would be wholly beneficial to the democratic process. I had wished to mention various aspects which could in part be resolved by a referendum, but as time is moving on and some colleagues want to speak I shall restrict myself. Let us have a look at the European budget. I am told that in the near future, our net contribution, which is important--the gross contribution is also important, but I will restrict myself to the net contribution--of the United Kingdom to the European Union will be about £3,000 million a year. That is £60 per head; it is about £5 a week for every family of four in the country. That has happened. It has arisen. No one has been asked about it. No one has been consulted on it, but it is the situation with which were are confronted at the moment.

So Europe is awash with money. It is largely awash with our money. There is more German money, but after that it is awash with our money. The problem with European money is that there is no such thing as honest money in Europe. The whole of the £3,000 million that we put into Europe is one gigantic slush fund. As I said in an intervention earlier, the French said that they would not allow the European elections to go ahead unless and until we gave them an undertaking that we would build, at massive expense, a third European Parliament building in Strasbourg. That is bribery and corruption. The Spaniards said that they would not let enlargement go ahead unless and until we agreed to give them more of our money. That is bribery and corruption. The Italians made various remarks about milk quotas. They had cheated on milk quotas. Unless a large proportion of their cheating was permitted to go ahead and unless the fine imposed on them for cheating was reduced, they would not allow Europe to proceed in the direction that everyone and even they wanted it to go. That is bribery and corruption.

There is a chap in British history called Robin Hood. Apparently, he used to take from the rich and give to the poor. The problem with the European budget is that it takes from the poor and gives to the mafia. There is no reason why we should participate in this. It is corrupt. By its corruption, the whole process of political debate and the whole process of public finance is infected and poisoned. While a lot of the corruption has been based in southern Europe, the danger is that if the European budget continues as it is, corruption will cross the channel and public standards in Britain which, while not perfect, are much higher than those in most of Europe, will be contaminated by that very level of corruption.

If we have a referendum, one of the issues that will be discussed will be what we are going to do about the European budget. I believe that our contribution should be massively slashed. It is unfair and unreasonable and the money is abused.

The second point that my hon. Friend the Member for Billericay (Mrs. Gorman) puts down as part of her referendum consideration is the single currency. There are economic arguments about a single currency and political arguments. The political arguments are infinitely more important, but let us look for a second at the economic arguments.

The Governor of the Bank of England made a very important speech recently. In that speech, he said that if we had a single currency and if the participants in it were not in stable equilibrium with each other, one of two

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things would happen. Either there would have to be a massive transfer of funds from one part of the region to another, or we would have relatively high unemployment in one part of the entity and relatively low unemployment in the other. So there would be massive migration from one part to the other.

The impetus and the political will for a single currency and for carrying this great European adventure forward, which is much greater in other parts of Europe than it is here, will bring about a single currency in an inflexible situation. So we in Britain will be faced with two alternatives. Either, with a Conservative Government with responsible economic policies, we will have prosperous industry, we will be effective and we will have a balance of payments surplus. Therefore, we will be required to spend even more of our money in subventions to the less successful parts of Europe.

Alternatively, we will have a Labour Government, with the social chapter, Red Robbo and all that nonsense back again. We will be the poor man of Europe. In that case, all our people will flood out of the country to seek jobs elsewhere in the European Union. Neither of those scenarios is satisfactory. So it is most unlikely that Britain would wish to enter a single currency for economic reasons. Far more important than the economic reasons are the political aspects of a single currency. If we have a single currency, we have a single bank, single interest rates and a single economy. We lose control over our national economy to a far greater extent than now. We have lost control over agricultural policy and trade policy. We are told what to do about ex-service women when they get pregnant. We have to pay them massive amounts of compensation.

Every little avenue of national life will be controlled by the European Union. We will cease to be a nation state. We will become a province with Brussels as our capital. That will be the end of Britain. Europe will be the nation. Britain will be some minor entity--a region of Europe. Scotland will be a different region of Europe. Perhaps they will take Cornwall off. They will try to put Ireland together. Europe will be all-powerful. Britain finally will have succumbed. That will be the end of it. Why?

The hon. Member for Newham, North-West (Mr. Banks) may disagree with me, but I believe that the mass of people outside know that the economic arguments are important, but that the big argument on a single currency is the political argument. A single currency will be the end of the United Kingdom. The Prime Minister knows that. The Government know that.

We will probably have an election in April 1997. In June or July of 1998, we will have to decide whether we will go for a single currency in 1999. It will be impossible, during an election campaign in April 1997, for the Government not to be required to say whether they are in favour of the political union that will come with a single currency.

The Conservative party is bleeding at the moment. Yes, there is strife and conflict in the Conservative party. There is argument and debate. That conflict and debate will continue until the issue is made clear to the people. Never mind the economic arguments: a single currency means political union and a European state. Why cannot the Government say today or on Wednesday at the latest that that is something up with which they will not put? The people do not want it. They do not want to be part of a

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European united state. They want to be part of their own country, their own state. That is where their identity is. Why cannot the Government understand it? Why cannot the Government be square and frank with the people? Why do we have to continue the delay and argument?

The overwhelming majority of the Conservative party in Parliament knows that a single currency is wrong. The overwhelming majority of the Conservative party in the country is against a single currency. The people are against it. In the name of reason, good sense and survival, right hon. Friend, Prime Minister, make yourself clear and do so now.

My hon. Friend the Member for Billericay has done the House a great service by introducing this Bill for a referendum. There are three basic reasons why we need a referendum. I have to admit that I am against referendums in general. If the House used its powers, there would be an election. If the people did not like the way in which we had used those powers, they could return a different Government and those powers would be there for the new Government to reverse the decisions that people did not like that had been taken earlier by a previous Government. That is democracy.

If we transfer powers and move them to other institutions, that is different. We have an election. The people's will may be to change something. For example, the people are deeply concerned about the export of live animals. There is nothing they can do about it, because that power has been transferred. This House is powerless on that issue, as on so many others. Therefore, on Europe and the transfer of powers, there has to be an exception and we have to have a referendum.

In her Bill, my hon. Friend puts down two questions, two simple and straightforward alternatives. There are people who wish to have a united states of Europe. They are entitled to argue for it. May the best man win. They might win a referendum. I doubt it. They think that that is the inevitable tide of history. Others of us take a different view.

Yes, we are in favour of Europe. We are friendly with Europe. We want to trade with Europe. We want to co-operate with Europe in matters on which we should co-operate. But we are over-governed by Europe now. We have to repatriate sovereignty and bring more competence back to the United Kingdom.

Those are the two alternatives. Why cannot they be put before the people? Why cannot we put them before the people before the Prime Minister goes to the IGC?

As I said, all these matters are decided by diplomacy and diplomats do not like radical solutions--it is a bit of give and take here, there and everywhere else. To be at peace with Europe, which is what the Prime Minister wants I am sure, we have to have some radical changes. I do not see how the Government and the Prime Minister can achieve them, unless armed with the will of the people and the knowledge that they want to go for that alternative whereby we would regain our sovereignty and independence within a Europe with which we can be at peace.

11.49 am

Mr. Andrew Mackinlay (Thurrock): I congratulate the hon. Member for Billericay (Mrs. Gorman) on bringing the Bill before the House. She is a neighbour of mine and,

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while I disagree with her on most things, I acknowledge her political courage, which is considerable. That should be stated. Those are all the nice and conciliatory things that I can say. I cannot bring myself to contemplate supporting the Bill, for the primary reasons that it is tendentious, ill-conceived and badly drafted. The Bill is designed for maximum spite against the existing arrangements from which, on balance, the British people are net beneficiaries.

The hon. Member for Billericay and her hon. Friend the Member for Northampton, North (Mr. Marlow) produced the Bill for a referendum solely on Europe, about which they feel so strongly. I do not want to retread old ground, but the Liberals tabled a motion a week ago, which got me into considerable trouble. My line is consistent, however, and for that reason I hope to introduce my own referendum Bill, which will not relate exclusively to Europe. It will extend democracy in this country and provide for referendums whenever Parliament passes any constitutional measure.

I would probably incorporate treaties in such a Bill. One of the great deficiencies of our democracy is that treaties are ratified under the royal prerogative and never by Parliament, which is a mistake. I want us to follow the example of most other legislatures, especially the United States, where Governments or the Executive may approve treaties, but they must subsequently be approved by Parliament. That is what should happen with our relationships with Europe and any later treaties. They should be approved here. If, in addition, a treaty fundamentally altered our constitutional status or, to a lesser or greater extent, a measure of sovereignty was to be surrendered, it should be put to the British people and decided by a referendum after the treaty had been endorsed by an Act of Parliament. That is the correct way round. Clearly, the people could then make a clear-cut and reasoned decision. That is what I want on Europe and other constitutional issues.

If and when devolution, fixed-term Parliaments, a democratic election for a reformed upper House and the reform of our electoral system are ever approved by Parliament--I hope that they will be--they should subsequently be endorsed by referendum. That would be a major extension of our democracy --one that should be welcome. That is not what lies behind the Bill, however.

Mr. Heald: As I understand it, one Labour party idea is that there should be a regional assembly for the east of England, which would no doubt mean my constituents being governed from Norwich.

Mr. Marlow: What is wrong with that?

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