House of Commons Hansard Debates for 21 Jun 1995

Column 435

The aggressor state--I mean no disrespect to Germany--is a member of the European Union. The then German Democratic Republic was allowed to enter the European Union because it joined the then Federal Republic of Germany. The fact is that the GDR was allowed to join the Union in special circumstances. Surely the Polish state has at least an equal right to be allowed early admission, as well as some buttressing and funding to assist its integration with western Europe. I think that that is extremely important.

I make no apologies for appealing to those fairly basic, but I think important, instincts of fairness. I ask the Government to be much more robust in protecting and promoting our

interests--particularly in respect of Gibraltar and access to that country, which is being treated abysmally.

In a few weeks' time, the Island games will be held. It is an international athletic competition that is very important to places such as the Scilly Isles, the Western Isles, the Isle of Man and so on. The Princess Royal is the patron of those games, but it might surprise you, Madam Deputy Speaker, to learn that she will not be attending this year, although she was invited to attend two years ago. That is the fault not of the Princess Royal, but of the craven Foreign Office, which is frightened of causing any consternation in our relations with Spain, and of any knock-on effects in the European Union.

How pathetic that is. What a weak, shambolic Foreign Ministry we have. It is time we had a change. My hon. Friend the Member for Livingston (Mr. Cook) will be much more robust in protecting and promoting British interests.

9.4 pm

Mr. Barry Legg (Milton Keynes, South-West): We have had an interesting debate and as the evening progressed, the speeches became more interesting. My hon. Friend the Member for Aylesbury (Mr. Lidington) made a valuable contribution to the debate, and his comments about the national interest have been well made. My hon. Friend the Member for Carshalton and Wallington (Mr. Forman) also made an interesting speech.

The debate started rather curiously with speeches from two highly intelligent men--one trying to avoid the obvious and the other trying to bury his head in the sand. In respect of the highly intelligent man trying to avoid the obvious, it is unlikely that we can make progress with our European partners unless we accept the European Union and its institutions for what they are. Unless we do that, phrases such as "net retrieval" will mean nothing. First, we have to recognise that currently the institutions have a momentum which is driving the European Union towards further integration.

We also have to accept that we are not pooling sovereignty through the Council of Ministers, since the ultimate political authority in the European Union is the European Court. We know from previous debates that the European Court is a highly political body with a vested interest in extending its authority.

Once we accept those basic propositions about the nature of the Community and its institutions, the British Government can put forward an agenda that is credible and advances British interests.

Column 436

Some of my hon. Friends want to drive ahead with economic and monetary union regardless. I found the speech of my hon. Friend the Member for Derbyshire, South (Mrs. Currie) quite breathtaking for a Tory. She was totally committed to the concept of the single currency, come what may. She wanted politicians to fix exchange rates irrevocably. That would be a tremendous gamble and I would not expect such reasoning from a Tory, since Tory attitudes are pragmatic and Tories do not believe that politicians have a monopoly on wisdom. Many hon. Members do not go as far as the hon. Lady in supporting a single currency come what may. They tend to say, "I like currency stability. I think that it is a good thing.". It is a good thing; it is rather like motherhood and apple pie, but if we make currency stability the focus of our economic policy, if we peg our currency or fix it, that has to be the number one economic priority and all the other economic variables have to adjust around it. Interest rates, unemployment and the level of nominal wages have to adjust around it. Although it is a worthy objective, currency stability cannot be the priority.

Although currency instability can cause problems for businesses, at least businesses can insure against currency instability. Products are available to provide security. I would be interested if any hon. Member could tell me of one other variable in the real economy for which business men can get a form of insurance. I do not believe that there is one.

Pursuing currency stability for its own sake is a great mistake: as we learned from our membership of the exchange rate mechanism, it can damage an economy. Neither politicians nor central bankers can guess the right exchange rate for a currency.

We are also missing a point by failing to realise how diverse the British economy now is. Many medium-sized businesses in my constituency trade with 30 or 40 countries across the world: they are global players. That is what is so good about the British economy; we have businesses going out and selling throughout the world. If we tell these businesses that we want a fixed exchange rate with Germany, or that we want to abolish sterling in favour of a single currency with Germany, trading relationships with Germany may or may not be made easier, but the businesses will have been put at risk vis-a -vis the rest of the world's markets.

There is no clearer example of this than the dollar-sterling rate. If we could have stayed in the ERM at DM2.95, the sterling-dollar rate would now be $2.12, and the competitiveness of British businesses operating around the world would be badly disadvantaged. That is my message to hon. Members who seek to put currency stability at the forefront of our economic policies.

My right hon. Friend the Member for Mid-Sussex (Mr. Renton) referred to his membership of the Kingsdown committee which drafted the report of the same name. I suggest that every hon. Member read it, because it offers an interesting insight into economic and monetary union. The most interesting phrase in the whole report comes on page 30:

"To start with, very few monetary unions have ever been formed anywhere and there is probably no precedent for a monetary union with a single currency being formed by sovereign states which nevertheless retain independent political, economic and fiscal systems."

Column 437

Thus the Kingsdown report spells it out: there are no examples of independent sovereign states joining currency unions and irrevocably fixing their exchange rates. Taking such an action would mean that a state was no longer independent or self-governing. That goes to the heart of the contradictions in the Tory--

Mr. Whitney: Will my hon. Friend give way?

Mr. Legg: I cannot; time is short. My hon. Friend has had ample opportunity to make his points.

I come next to the core of one of the contradictions in the Government's policy on Europe. The Government tell us that they want a Europe of nation states but that they want to keep open the option of entering into a single currency and abolishing the pound sterling. Those two propositions are contradictory. If we give up our national currency and other states give up theirs, they will no longer be sovereign states. Until the Government wrestle with that contradiction, recognise that it is one and come up with a clear policy on monetary union, they will have difficulty presenting a coherent European policy to the British people.

The time cannot be far off when we must make a clear statement on monetary union and the British attitude to it. I do not believe that the Tory party can become the advocate of a policy that would abolish the pound sterling and would enter into a single European currency. 9.14 pm

Mr. Iain Duncan Smith (Chingford): I am fully aware that we have limited time, so I shall keep my comments short.

I am intrigued because, as ever in these European debates, we seem to spend one half of the time abusing each other with a certain amount of name calling, which always strikes me as not getting to the heart of anything, and the other half claiming territory that we think will persuade others that we are somehow better than we are. I am also intrigued by my hon. Friend the Member for Wycombe (Mr. Whitney), who used his speech to claim massive patriotism, as though that was territory that nobody else could claim.

I say to the House generally that I wish that we would get past all this nonsense about patriotism or massive self-interest, and try to deal with the honest problems that exist, and understand the argument. I feel that, if we dealt with the subject honestly, with a desire to get to the truth of the problems--for example, of the single currency and what exactly the corpus of law that exists in Europe is all about--we would begin to understand it far better.

I am aware that we have recently been discussing the economics of the single currency. It seems to me that those who are desperate to go to the single currency have now accepted, not only through the Kingsdown report, but through a number of other reports, that the best that can be said for it is that it "might" be okay.

On the basis of an economic "might be", we are now expected to launch into the great experiment as though we could gamble away all our constituents' livelihoods on the basis that, economically, it might be all right. That really gets to the heart of the problem, because the truth is that it is not really about economics. It is a political matter. It is a political decision. Even the Kingsdown report said

Column 438

that. So let us stop the nonsense that, somehow, big business says that it is okay, because the IOD says that it is not. We should accept that the jury is out.

We must understand the nature of the beast with which we are engaged. Europe. European Union. What is it about? The most important feature of that, surely, is European federal law. I use the word "federal" most definitely, as that is precisely what European law is. Let us not play around and pretend that it is not. It is about a federal concept of law. European federal law, as it currently exists, is precisely that. It is structured in such a way that it will develop of its own will, guided by the European Court of Justice and the other institutions, so that Europe attains an identity that is wholly federal.

If we can accept that process, at least we know either that we are in favour of it, and the eventual destiny that that takes us to, or that we are not. If we are not, it is no good pretending that things are not changing. If the body of European law has a clear focus and direction, mere words and the odd change in policy here and there will not stop the essential ratchet from moving in that direction, because the nature of the European Court of Justice is always to interpret in that direction. Therefore, the only way in which one should deal with it, if one does not believe that we should eventually have a federal destiny, is to define what it is we want. If we want a Europe of nation states, in which I firmly believe--I am very positive and pro-Europe, and that is not something that others can claim for themselves--I say, let us now engage in the argument about what makes a Europe of nation states. We must define what it is about European law that moves against the concept of a nation state; the powers that a nation state should have unto itself; and powers that should be ceded for, perhaps, in this case, the working of a marketplace.

We must discuss that and arrive at a conclusion. It is important, before we go to the IGC, that we work out a template for the nation state. We then talk to our colleagues in other countries, at the discussions, in the reflections group, and say to them, "There are whole areas here which, frankly, run counter to the concept." Let us take the concept briefly, before I conclude, on social policy. The whole principle of the social chapter is, to some degree, nonsense, because the real body of social policy comes through what we already have in the treaty of Rome. It is all there. All the articles will do it for us.

Therefore, I say to my colleagues and to my hon. Friends on the Front Bench, we should not accept that social policy is a general across-the- board policy for all of Europe. Individual states, depending on what their electorates want--if they choose, for example, the Labour party, it is presented to them in the manifesto--must decide whether that is the policy they want. Whether it increases or decreases the productivity of companies is in the balance. The marketplace must be about the competitiveness of goods and services. We cannot add to it the concept that everyone must take away one of the areas of competition--social policy--because of the costs it adds. In other words, that is a power and an area that the nation state must hold to itself.

We must engage in the debate properly. We must say to the other states in Europe that we cannot continue endlessly pretending one thing or another. Acceptance of the present, an ever-present ratchet under European

Column 439

federal law, would be to say, "Yes, that is the destiny we want." If we were to say no, we would have to ensure that we had an alternative policy. What we have at present is not, I believe, such a policy.

9.20 pm

Ms Joyce Quin (Gateshead, East): This has been a lively debate and many hon. Members have contributed to it. Despite the varied comments and contributions that have been made, I am sure that we can all agree that the European Union affects many aspects of our lives. The breadth of the issues that so affect us has been raised during the debate and illustrates my point. Such issues include the effects of the EU on our economy, on social matters, on agriculture and on fishing. Other issues concern us for the future of our continent, such as enlargement of the EU. All these matters have been mentioned many times during the debate.

We were pleased to hear the maiden speech of the hon. Member for Perth and Kinross (Ms Cunningham). She entertained us with references to her predecessor and spoke about her political convictions. I shared her feeling of confusion when she tried to analyse the Government's European policies. I shared her views on the social chapter. Many of us in England agree with her comments, which were much in line with official Labour party policy.

A variety of views have been expressed about and towards the European Union on both sides of the House. We have seen on the Government Benches especially how much internal damage the issue of Europe is doing. It has been described as the San Andreas fault of the Conservative party, and it seemed much that way today. The Foreign Secretary seemed beleaguered during the competition to make hostile interventions on him that was raging on the Government Back Benches. It was made clear during those interventions that both he and the Minister of State will have a bumpy ride in seeking to put the Government's views in the run-up to the intergovernmental conference.

I had sympathy with the Foreign Secretary during some parts of his speech. He referred to the recent interview of Baroness Thatcher and her description of her Government's policy on Europe as being, "No, no, no", and that of the present Government as being, "Yes, yes". As the right hon. Gentleman said, it was the then Mrs. Thatcher and her Government who were responsible for the large increase in qualified majority voting that took place under the Single European Act. I remember, shortly after becoming a Member, that she was saying, "No, no, no" to the proposition that the European structural funds should be doubled. In the end, the funds were increased by over 90 per cent. The "No, no, no" did not seem to be very effective in practice. Conservative divisions have been reinforced by events in recent days and weeks. It seemed sad that, after he returned from Halifax, the Prime Minister had to appeal once again for unity in his own party. Once again, however, he sounded very much like the boy who cried wolf. We have heard it all before and it does not seem to have any effect. Whatever tactic is used--begging, cajoling, threatening--it is ineffective. I know nothing about rugby, but trying to stop Euro-rifts and divisions in the Tory party is like trying to stop the All Black, Jonah Lomu, in a match.

Column 440

There has been a balance in Conservative Members' speeches. Those of the hon. Members for Stafford (Mr. Cash), for Southend, East (Sir T. Taylor) and for Ruislip-Northwood (Mr. Wilkinson) have been balanced by those of the hon. Members for Leominster (Mr. Temple- Morris), for Derbyshire, South (Mrs. Currie) and for Wycombe (Mr. Whitney), among others.

We have had some analysis of the rifts. The hon. Member for Wycombe spoke of the nature of Euro-scepticism in his party and highlighted its divisions. Among some Conservative Members, there was a hidden agenda, perhaps not so hidden on occasions, of withdrawal from the European Union; among others, that was not on the agenda. Obviously, that is yet a further factor for division in Conservative ranks. Understandably, the intergovernmental conference dominated many speeches. Many Conservative Members sought to tie the Government's hands in advance of the negotiations, which will not help British interests. I note that the chairman of the Tory Members of the European Parliament said a couple of days ago that

"To get a successful negotiation"--

in the IGC--

"the government should not be ruling out too many options under pressure from Bill Cash."

The difficulty for the Government, however, is that it is not that simple. They have to worry not only about the hon. Member for Stafford, but about several members of the Cabinet, who have also sought to tie the Government's hands in advance of the negotiations. Last year, the Secretary of State for Employment stated that he did not want any changes in the veto and in the weighting of qualified majority voting and no new powers to the European Parliament--comments that have not been reinforced by the Foreign Secretary or by the Minister.

My hon. Friend the Member for Livingston (Mr. Cook) rightly talked about the danger of Britain's isolation because of the Government's attitude. It is hard to see who the Government's allies will be for their views on the intergovernmental conference process. The Minister has already begun to represent Britain in the IGC reflections group, but we heard from my hon. Friend the Member for Livingston about the Minister's isolation there and the fact that his proposal, whereby he was hoping to scrap a body of European legislation, had

"a reaction which was said to be lukewarm amid suspicions that the UK is seeking to roll back Brussels in favour of a looser, more flexible European Union."

That is not a very convincing start if the Government are really serious about building up allies.

It does not seem likely that the Government will receive much support from the European Commission--they will certainly not receive it from the head of the Commission, Jacques Santer, whose appointment was a particularly spectacular pyrrhic victory by the Government. As for France, although it is true that President Chirac instinctively shares some Conservative ideas on Europe, the reality is that, within 48 hours of taking office, he was taking part in a Franco-German summit. It seems that the logic of the position in France is to reinforce the Franco-German alliance.

On social issues, which one or two of my hon. Friends have mentioned, it is true that, during the election campaign and after, President Chirac talked in terms of a

Column 441

strong social policy, a high minimum wage and issues that do not seem to have much in common with Tory views on the social chapter. Other important themes have surfaced in the debate. Transparency and democracy, for instance, give rise to a concern that straddles both sides of the House. My hon. Friend the Member for Derbyshire, North-East (Mr. Barnes), in particular, has campaigned vigorously for a more open European Union, and has frequently drawn attention to the secretive way in which the Council of Ministers operates. I urge the Government to do much more than they have so far to encourage debate and give information to hon. Members on both sides of the House. I note that the European scrutiny Committee, for example, has asked many times over the past year for debates on European affairs to be taken on the Floor of the House; certain wide-ranging matters are beyond the remit of either of the European Standing Committees. On most occasions, however, the Government have rejected those representations--presumably because they want to minimise the number of embarrassing European debates on the Floor of the House. Opposition Members are concerned about that.

I understand that the Minister for the Environment and Countryside had difficulties today with the scrutiny Committee, which feels that it was not adequately consulted in advance about important matters that will be considered by the Environment Council this week. The Government must ensure that we see the proposals in good time, and can scrutinise them effectively.

In what ways will the Minister promote greater openness in the Council of Ministers? We should like the Government to support the Dutch, Danish and Swedish Governments' efforts to open up proceedings in the Council. Although we want the pillar structure to continue under the Maastricht treaty and want it to apply to the justice and home affairs section, we are concerned about the secrecy and lack of openness in that sector. The Government should give urgent consideration to ways of ensuring that we are involved and informed. Not surprisingly, the principle of subsidiarity featured in the debate. There remains a clear distinction between Government and Opposition views. Opposition Members believe that subsidiarity must mean making decisions at the lowest appropriate level, which will have consequences for decision-making within the United Kingdom as well as at European level. It was heartening to learn that, in another place, Lord Cockfield had the courage to criticise the Government's policy on subsidiarity, saying that they ignored decentralisation and subsidiarity within Britain at their peril. We want the Government to give much more recognition to the work of the Committee of the Regions. During the Maastricht debates in the House, the Government made it clear that they wanted to nominate members to the committee rather than having any local authority or direct representation from the regions. We still consider that an important issue: we want the committee to play a useful and representational role in the workings of the European Union.

Column 442

Many hon. Members mentioned the single currency and general economic issues. I was glad that my hon. Friend the Member for Livingston stressed the importance of trade and the future of inward investment, and I echo all that he said about the motives of inward investors in the United Kingdom. What he said has been very much reflected in my part of the country, the north-east. We have seen inward investment, but as far as I am aware--I have had contact with the firms in question-- none of it has involved any concern about the social chapter. Certainly, firms have not come to our part of the country because Britain did not subscribe to the social chapter; they have come for all kinds of other reasons. The English language is one obvious factor in American and Japanese investment; the Japanese are used to working in English.

One matter that perhaps was not mentioned as much as I would have liked was environmental co-operation in Europe. We feel strongly about such co- operation. We think that Europe can be an environmental trendsetter and we deplore the Government's efforts to try to get out of various environmental commitments that they have made at European level. The environment is a European and international issue and certain decisions about it need to be taken at those levels.

Mr. Spearing: I endorse entirely the importance of the environment, but can my hon. Friend confirm my impression that most of the articles that relate to the environment are already subject to qualified majority voting and therefore subject to an international dimension?

Ms Quin: My hon. Friend is right that most of the articles are subject to qualified majority voting, but we are concerned about the fact that, simply to avoid meeting European standards, the Government have been, in their words, trying to repatriate some of the legislation. Many of the directives were agreed a number of years ago. It is important that if we make such commitments we are prepared to fulfil them. Many people in my part of the world and elsewhere are concerned that our environmental standards will drop behind some other European countries. In some cases, they already have. Agriculture was mentioned by many hon. Members, including my hon. Friend the Member for Newport, East (Mr. Hughes) and the hon. Member for Holland with Boston (Sir R. Body). I agreed very much with their criticisms. Agricultural reform needs to be a good deal higher up the agenda. As the hon. Member for Carshalton and Wallington (Mr. Forman) said, that is imperative if we are serious, as I hope we are, about enlarging to the countries of central and eastern Europe. I endorse some of the comments on enlargement made by my hon. Friend the Member for Thurrock (Mr. Mackinlay), who spoke very much from the heart, especially about the situation in Poland. Of course he is right. It would be quite tragic if, having encouraged changes in such countries, we seemed to turn our backs on them economically, politically or in any other way. That is a very important aspect that we must all understand and on which there is fairly wide agreement across the House.

I make no apology for saying to the Minister, as he has heard me say in Committee, that it is terribly important for the United Kingdom to get involved economically with the countries of central and eastern Europe. I feel

Column 443

that we are lagging way behind Germany, Italy, France and even the Netherlands in the volume of our trade with those countries. I was extremely disappointed, having tabled a question about direct investment by Britain and certain other European Union countries into central and eastern Europe, to receive the tired old answer that the information was not available and could be obtained only at disproportionate cost. Surely it is extremely important for us to know how much direct investment other countries are making in the countries of central and eastern Europe.

In a very short space of time, by ringing up the Library, I obtained the information that in the past two years investment by Germany into the countries that I was asking about has been 10 times higher than British direct investment. I urge the Government very strongly to examine the pattern of trade between us and the countries of central and eastern Europe and to direct investment because it is terribly important if we are to make our relationship with those countries a success.

Various comments were made about Labour policies: most were the usual misrepresentation of them. The comments about the social chapter were certainly wholly unjustified. I was at a meeting the other day that was also attended by a Conservative Member. I was listening to the Prime Minister of Malta, whom the Conservative Member asked about the social chapter--would not it cause Malta all kinds of difficulties if Malta joined the European Union? The answer was that it would not and, in any case, Malta had a good minimum wage system, although almost everyone in Malta earns at least twice as much.

Mrs. Currie: Will the hon. Lady give way?

Ms Quin: I apologise to the hon. Lady for not giving way but I have only one minute left; I should have been happy to give way otherwise.

As I said, there were misrepresentations of the Opposition's policy, especially by the hon. Member for Aylesbury (Mr. Lidington) about our position on the veto. He described our policy as a choice between rolling over and agreeing to everything that Europe said or coming out of Europe. That is an absurd distortion, and I hope that it will carry no weight as it is a complete misrepresentation of our position.

We contend that Government policies have weakened Britain in Europe. They have marginalised and isolated us, which has been bad for the country. It is no wonder that the hon. Member for Derbyshire, South accused some of her colleagues of not being patriotic. The British people as individuals have lost out, too, because of the Government's attitude to European social and environmental policies and to economic and employment initiatives in Europe.

Labour wants to give the British people a good deal from their membership of the European Union by adopting a different approach, with different ideas and policies for co-operation and reform. It is clear that the British people have not won that good deal under the Conservatives; they will do so under Labour.

9.41 pm

The Minister of State, Foreign and Commonwealth Office (Mr. David Davis): Before I deal with the substantive debate, I must congratulate the hon. Member for Perth and Kinross (Ms Cunningham) on an

Column 444

impressively confident maiden speech. She was extremely generous about Sir Nicholas Fairbairn, for which his many friends will be grateful. I hope that she will take it in the spirit in which it is intended if I say that, were he here today, he would, with his usual pungent wit, have quoted Winston Churchill and said, "Maiden speech? That was no maiden speech; that was a brazen hussy of a speech." It was exceptional. If she continues to make such speeches, I suggest that the hon. Member for Banff and Buchan (Mr. Salmond) should look to his position- -and we shall support her.

The preparations and negotiations for the 1996 intergovernmental conference are a major challenge for this country, and the Conservatives had a vigourous debate about them. A number of my right hon. and hon. Friends made powerful and insightful speeches. The shopping list is so long that I am almost bound to miss out someone, but it includes my right hon. Friend the Member for Guildford (Mr. Howell), my hon. Friend the Member for Wycombe (Mr. Whitney), my right hon. Friend the Member for Chertsey and Walton (Sir G. Pattie), and my hon. Friends the Members for Chingford (Mr. Duncan Smith), for Carshalton and Wallington (Mr. Forman), for Holland with Boston (Sir R. Body) and for Milton Keynes, South-West (Mr. Legg), who all made excellent speeches. In their very different ways, my hon. Friends the Members for Derbyshire, South (Mrs. Currie) and for Southend, East (Sir T. Taylor) gave different perspectives on the outcome. Of course, I must also mention my hon. Friends the Members for Stafford (Mr. Cash) and for Ruislip -Northwood (Mr. Wilkinson).

The Government's goal is simply stated: to move the European Union in the direction that serves British interests. Some have argued today that we have no choice but to concede the further integration that some of our partners desire. Others have argued, today and previously, that we cannot achieve our goals and should instead prepare to leave the Union altogether. I believe that both groups are profoundly wrong.

One of the lessons of our involvement with the European Community is that, if we fight hard enough for what we want, we can achieve success. We have done so with the British rebate, enlargement, the single market and many other matters. I understand some of the doubts expressed about the European Union today, but I do not believe that we should throw in the towel.

We want a Europe that is committed to free trade, a Europe that seeks to bring the countries of eastern and central Europe within its boundaries and a Europe that respects nation states and does not attempt to supersede them. Some have suggested that it is time to leave the European Union and that membership is no longer compatible with our national interests. That approach is a counsel of despair. We have never been starry-eyed about the Community. There are costs associated with membership: the waste of the common agricultural policy, as my hon. Friend the Member for Southend, East commented, frustration at the continued protectionism of some member states and the tendency of the Commission to expand its reach far beyond its grasp. But the balance of interests weighs heavily in favour of our membership: the peace, prosperity and democracy that the Community has helped so to foster, the progress towards free trade and a single market, with the massive boost that inward investment has brought this country.

Column 445

In recent weeks, some have suggested that we could leave the Community and join the European Economic Area instead. I do not believe that that would be in the interests of this country. Members of the EEA are subject to all the rules of the single market, but have no say in their development. What would they say to the aerospace or engineering companies desperate to liberalise public purchasing in the Community? What about the commercial television companies worried that restrictions on advertising will take away their revenues? What about the next time that we have to face down a works council directive, a parental leave directive, or a part-time workers directive that will burden business and cripple companies? Those companies want a British Minister at the table fighting for Britain. I and my right hon. and hon. Friends intend to fight that fight and to continue fighting it until we get the Europe that we want, that the British people want and that the peoples of all Europe want.

The challenges facing Europe do not require a rush to further political union. That is what we should be saying at the IGC over and over and over again. As the Prime Minister has explained many times, it is time for Europe's leaders to put away the utopian dreams about a united states of Europe and to concentrate on a Europe that works. We should look at the countries of Europe today. There is sluggish growth, high unemployment and instability in the east following the break-up of the Soviet Union and the Warsaw pact.

Those are the principal problems facing Europe. They will not be solved by blueprints for a federal Europe. Indeed, nothing can be more damaging to the peace and security of Europe or more harmful to the health and welfare of its citizens than an ill-judged and unpopular lurch towards a federal Europe. It would fly in the face of what the people in this and other countries want. It would lead to bitterness and resentment. It would end in collapse and failure. That is why this Government will never support it.

As some of my hon. Friends have pointed out, some Governments in other member states do not share that analysis. There is no point whatever in trying to brush away that fact and pretending that differences do not exist --they do. That makes the task of the Government in negotiating on Britain's behalf all the more important. It means that we must be prepared to stand up and say no to centralising proposals put forward in the negotiations and it means that, even if we find that few around the table agree with us, we must go on saying no.

The task for the next IGC should be to make the Union work better. It should not be a great leap forward. Those who think that it should be have learned little from the Maastricht process. They seem to think that if Europe does not head somewhere, it will go nowhere; if it does not integrate, it will disintegrate. That is why we hear endlessly about catching buses, riding trains and missing boats. Unless we like the destination, we shall not buy the ticket. A senior business man participating in the BBC's recent debate about the future of Europe said that the Union was like a business: unless it was heading rapidly in a particular direction, it would falter and fail. I could not agree less. Many of the most successful businesses

Column 446

flourish because they stick to their core activities and avoid launching into the unknown. The European Union should do the same.

Mr. Mackinlay: Hands up everyone who agrees with him.

Mr. Davis: We would not notice the hon. Gentleman, that is for sure. It means that we should reinforce subsidiarity and make sure that Brussels does not attempt to do what should properly be done by the nation state.

The democratic legitimacy of the European Union rests first and foremost on the national Parliaments and national Governments of member states. Those who talk about the democratic deficit have got it wrong. They assume that the Commission should be the executive and the European Parliament the legislature, but they are wrong on both counts. It is the Council of Ministers that should take the lead in Europe, and national Parliaments that should call it to account. That is why we have reinforced the authority of the Council of Ministers over that of the Commission, and why we shall oppose attempts to give the European Parliament massive new powers.

A Community operating along those lines is not a negative vision but a practical one--tackling crime and drug trafficking on an intergovernmental basis, co-operating over foreign policy on the basis not of majority voting but of unanimity, and co-operating on defence in a way that reinforces rather than undermines the transatlantic links embodied in NATO.

As my hon. Friend the Member for Carshalton and Wallington pointed out in an especially cogent speech, there is much that we can achieve by working together. But we shall achieve nothing by forcing countries to act against their will. More centralisation is not inevitable, it is not acceptable and it is not in the interests of the British people.

The idea of European monetary union and a single currency has dominated much of the debate. We heard wise and thoughtful speeches by my right hon. Friends the Members for Guildford, for Mid-Sussex (Mr. Renton) and for Horsham (Sir P. Hordern), by my hon. Friends the Members for Leominster (Mr. Temple-Morris), for Derbyshire, South and for Milton Keynes, South- West and even--I shall exercise my characteristic charity here--by my right hon. namesake the Member for Llanelli (Mr. Davies)-- [Hon. Members:-- "Hear, hear."] It got through.

Our position remains clear--no decisions now or in the lifetime of this Parliament. Our protocol negotiated at Maastricht by the Prime Minister ensures that we shall never be forced to join a single currency. I must tell my hon. Friends that that would not be the case had Labour negotiated the Maastricht treaty.

My right hon. Friend the Member for Guildford, with his usual perspicacity, identified the key problems that would arise if a small group went ahead with a single currency in the wrong circumstances. I reject the implication in the Commission's recent Green Paper that countries outside such a small group would have to tie their national currencies to the single currency so that, in the Commission's definition, the single market could continue to work properly. I reject that idea because it would mean bucking the markets, and because it would

Column 447

be artificial and ineffective. Our warnings about the divisiveness of a single currency introduced in the wrong circumstances are beginning to hit home.

The Labour party's approach to all that is markedly different.

Mr. Duncan Smith: Stop there.

Mr. Davis: Yes, I could stop there.

The Labour leader said recently that he would never allow this country to be isolated in Europe. What a good time he would have had at Messina. Give up the veto in important areas of national interest? Fine. Give away our rights to make our own decisions on joining a single currency? Certainly. Collapse the pillars of the Maastricht treaty and the treaty of Rome? Absolutely. The meeting would have been a short one. He could have sold the country down the river in the morning and sat on the beach in the afternoon.

I must tell the right hon. Gentleman that being willing to stand alone is often necessary to defend Britain's interests. This is not the first time that Britain has stood alone. In the past decade and a half, every negotiating success has been marked in the early stages by Britain's standing alone, or in a small minority, for its principles. It was Britain that fought for the single market; it was Britain that fought for enlargement and for subsidiarity. We stood alone, we fought our corner and we won our argument.

Mr. Charles Kennedy: And then we ditched our leader.

Mr. Davis: It is interesting to hear from the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy). I was touched by his earlier concern for our party, since he is now a member of the wholly owned subsidiary of the Labour party.

Jacques Santer said a few weeks ago:

"It is British initiatives that end up being mainstream Community policy".

We are still at least seven months away from the beginning of the IGC, and negotiations have not even begun. Yet what has the leader of the Labour party done? For no conceivable reason, other than to conform with his Euro- socialist friends, he has said that he is willing to give up the veto in four areas: social policy, environmental policy, industrial policy and regional policy. There is no trade-off and no negotiation--just capitulation. So much for the man who would be Prime Minister. Charting the right course for the European Union, and our relationship with it, is one of the great questions.

Mr. David Harris (St. Ives): I hope that my hon. Friend will go on to tell the House about the declared position of the leader of the Liberal Democrats, who would give up the veto in all areas.

Mr. Davis: My hon. Friend is right. It is not clear whether subsidiarity applies between the Labour party and the Liberal Democrat party, and we may not know what the right hon. Gentleman's policy will be in the future. At the moment, however, it is to give up everything.

We have heard a lot from Opposition Front-Bench Members about the splits and debates that take place on Conservative Benches. Yet they know full well that the

Next Section

Home Page