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Sir Geoffrey Pattie (Chertsey and Walton): I should like to offer some thoughts on the current position before the Cannes summit, based on the regular, almost weekly, contacts that I have with other centre-right parties throughout Europe in my capacity as international vice-chairman of the Conservative party.
When the Berlin wall came down in November 1989, few people expected it. Few people anticipated what the wave of challenges to authority in eastern Europe would produce. Equally, very few people realised that it would have a similar effect in western Europe. By the time the Maastricht treaty came to be signed, much of it was, in practical terms, dead in the water. We then witnessed the holding of two Danish referendums and a wafer-thin French majority and, as the right hon. Member for Llanelli (Mr. Davies) pointed out, even the Germans discovered that European monetary union meant the end of the deutschmark, which was a great shock to them. Suddenly,
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there was a great deal of rethinking to be done. I believe that there is much greater uncertainty in the European Union than appears on the surface.The European Community--to use its previous title--was founded to make war impossible between France and Germany, an excellent aim that has been splendidly achieved. However, we have to ask what does the Community now do for an encore, especially for the younger generation for whom the idea of war between France and Germany is unthinkable? Where is the new philosophy? I do not see it, and that is especially sad when we have the opportunity to create a Union of nation states and can for the first time be genuinely European. We are not just western European but have the possibility to include in the Union countries from central and eastern Europe.
When Lord Tugendhat recently gave his valedictory address from Chatham house, he said:
"In most countries, however, there has been a minimum of public debate or accountability on the details and implications of what was being constructed and planned. There has been high flown rhetoric in abundance and many grand schemes put forward by politicians anxious to demonstrate statesmanship and far-sightedness. But, for the most part the impact of what these schemes would involve for the ordinary citizen was not spelt out nor subjected to detailed scrutiny. Indeed, President Mitterrand and Chancellor Kohl, in particular, both appeared anxious to avoid in-depth public discussion."
It had been widely accepted in Europe that the single market was fundamental--a concept that, incidentally, was very much a British one activated by British Members of the European Parliament and a British commissioner. However, Lord Tugendhat also said:
"Yet, I believe, a major component of the wide spread disillusion stems from the legislation needed to bring the Single Market into being. That legislation has proved to be unprecedentedly intrusive. Partly, there is the question of sheer scale--282 individual items of European legislation required to bring it into effect. Partly too it is a result of so many existing national rules and regulations on technical standards, health, safety, environment and other matters being so detailed that in order to create a level playing field EU regulations had to follow suit. As a result it has been brought into what"--
my right hon. Friend the Foreign Secretary--
"has described as `the nooks and crannies' of national life all over the European Union."
There is a genuine debate throughout Europe, not only between Governments but between parties and certainly not only in this country. In my view, which stems from numerous discussions, opinions on the continent are changing and there is, for example, a debate within the Christian Democrat party in Germany. The original paper by Mr. Scha uble and Mr. Lammers has been much modified following internal debate in their country. I have not found a German Christian Democrat Member of Parliament who wants a united states of Europe or anything remotely resembling a united states of Europe.
Interestingly, in a meeting that I attended in Vienna three weeks ago, the chairman of the Christian Democrat delegation--when were in the mode to commission new study work--asked for a paper to be written on "The Adverse Impact of the Workings of Brussels Bureaucracy on Germany". That is not the sort of thing that we think about in this country because we tend to identify the Germans as being in favour of everything that comes out of Brussels, but they are not.
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In many spheres, it is the British who are setting the agenda. The Conservative party has produced its paper for debate in the European Democrat Union and it has been extremely well received. The paper states:"We support the enlargement of the European Union to the East. There are three fundamental reasons why enlargement of the EU is essential for its future development--security, prosperity and shared values . . . The EDU believes that the further enlargement of the European Union also requires a fundamental examination of the EU, its policies and its institutional structures . . . The framework best suited to meeting the aspirations of EU applicants is a flexible, decentralised one, not a monolithic or centralised one . . . Our goal should be a Europe of nation states working more effectively with each other in pursuit of shared interests and common solutions to common problems, but not a Europe which attempts to supersede the nation state."
Mr. Dykes: Does my right hon. Friend accept that until now all the eastern European countries without exception have, by way of pronouncements by senior leaders in the Government and in the Opposition, fully accepted the acquis communautaire and, indeed, the move towards a single currency if convergence is achieved?
Sir Geoffrey Pattie: Yes, but they need to consider to what extent they will be able to meet the key criteria. It is one thing to talk about signing up to the generalities but the reality will be harder to achieve.
The document goes on to say that we need a Europe that will push ahead with jobs and deal with various aspects of job creation. There is too much of a tendency in Brussels to come up with programmes and proposals that impede job creation. In my three years on the Council of Ministers, I frequently found that it was our continental friends who came up with the visionary "blue sky" ideas. They were strong on rhetoric or--as we English like to call it--guff, but it was down to the United Kingdom to examine proposals in a cautious and pragmatic but entirely practical way, which was not very popular especially when others had been so enthusiastic. In the process, however, we injected the vital ingredient of practicality into many proposals. I believe that, by the same token, the Government's approach to the IGC 1996 process is very close to the instincts of the British people in bringing to bear our pragmatism and experience. In this we are very different from the two Opposition parties--from the Liberal Democrats who have been over the hills and far away on this issue for a long time, and from the new Labour party which, of course, is that most dangerous of things, a party of converts on this issue. I find it hard to understand why some elements in this country--and, I have to say, in my own party--seem to be so lacking in confidence that they are not prepared to accept the power and strength of our arguments or the fact that they are succeeding and setting the agenda. As we embark on the IGC 1996 process, we should be confident that the healthy pragmatism that so characterises the Government's approach is the best way and the best foundation for our proposals. 5.27 pm
Mr. Charles Kennedy (Ross, Cromarty and Skye): On behalf of those who are over the hills and far away--I suppose that Ross, Cromarty and Skye is over the hills and far away in a geographical sense--I have to say to the right hon. Member for Chertsey and Walton (Sir G. Pattie) that it strikes me that, given the rather febrile state
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of his party on these matters these days, being the international vice-chairman of the Conservative party is perhaps not too onerous a task. I am not sure how many foreigners would want to talk to him in that capacity, given the propensities of some of his colleagues and what they have said.The focus of the debate so far, and the matter on which I shall dwell, is the Government's position in the run-up not only to Cannes, but, in the longer term, the intergovernmental conference itself. We heard what the Foreign Secretary had to say this afternoon, but I do not think that we heard what he believes. That is the central difficulty.
This is an Administration caught in the headlights of their own Back Benchers. Whether the Foreign Secretary went emphatically pro-European or Euro-sceptical this afternoon, he was going to distance himself from and cause difficulties within his own party. He is, therefore, left immobilised somewhere in the middle, and it is pathetic to behold. One only needed to look at the faces of his Back Benchers as he proceeded to see that he was satisfying no one. The Conservative Euro-enthusiasts, whom I applaud, did not look entirely pleased with what he was saying, and the Conservative Euro-sceptics did not look at all persuaded by his efforts either. So long as what has become the war of John's ear goes on vis-a -vis the IGC, it will severely damage British national interests.
I speak, after all, as one who has experience of having being a member of a party that split in a rather acrimonious fashion a number of years ago--the then Social Democratic party. Frankly, it would be better to get on and have an honest and open divorce now than to persist with this farce between mainstream continental Christian Democrats and what are essentially nationalistic English Conservatives. Both have perfectly respectable views- -I tend to lean more towards one than the other--but they both cannot continue to cohabit in the existing United Kingdom Conservative party. It would be better for them and for the interests of this country if they were to go their separate ways now.
In an earlier intervention, the hon. Member for Harrow, East (Mr. Dykes) made a powerful point--perhaps slightly tongue in cheek, but none the less placing his finger on a very important point--when he referred to proceeding on European matters on the basis of free votes in the House. We would have fun if there were a free vote, for example, on the social chapter, given how many Conservative Members would quite happily go through the Lobby in favour of it because they would recognise it for what it is: much more a set of aspirations than the laying down of a whole set of legal requirements. But leaving aside that fun, the hon. Gentleman made an important point that there is an in-built cross-party majority in this House for sensible European progress and for Britain to be very much a part of it.
There is also a perfectly honourable tradition in the House among hon. Members who do not like the fact that we went into Europe in the first place but who now argue--so they say, although the logic of their position would none the less lead us to exit from Europe--that we could have some kind of competitive single market and economic benefits without the single currency and the social and political dimensions attached to it. That is an honest set of opinions with which I do not agree. Those hon. Members are in a minority in the House. Even if there were a change of Government, which there would be
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based on the present opinion polls if there were a general election tomorrow, that attitude would still be in the minority in the House. We need to keep that consideration very much to the fore. We have seen abject political leadership from the Prime Minister on matters European, especially since the last general election. There has also been third-rate party management from his point of view. That has led us to a fantasy world where the likes of Jacques Chirac and Helmut Kohl are being held up as hob-goblin, socialist figures who are seeking to impose all kinds of terms and conditions of employment in this country, which otherwise we would not want. The former Prime Minister, the right hon. Member for Old Bexley and Sidcup (Sir E. Heath), intervened during the Foreign Secretary's speech, referring, as it were, to his right hon. Friend as the sorcerer's apprentice. The Father of the House made a telling point the previous time that we visited some of these European issues. He said that the Government had said nothing positive about Europe since 1979. That is entirely true as one can see by looking at all the debates on the Maastricht treaty.If I wanted to sell any commercial idea to anybody in this House or outside, I would play up the benefits, the positive aspects and why I wanted them to take the idea on board. Maastricht was sold to the Conservative party, to the House and to the country on the basis that we had opted out of the social chapter and that we had a derogation from the next stage. That is a hopelessly negative basis on which to try to provide political leadership on an issue that goes beyond the party and that is as broadly based as Europe itself.
The characteristically penetrating analysis in The Times today by Mr. Peter Riddell says it all. I appeal to the pro-Europeans in the Conservative party. In speaking about them, Mr. Riddell said: "They have deployed a strong case, but they are losing the political battle. The main question now is how much ground they will have to surrender, and whether any of their generals will be pushed out in the process."
He is correct. He concludes:
"These questions--
the ones that he has discussed--
"are central to Mr. Major's future. Either way, the sceptics are continuing to gain at the expense of the pro-Europeans."
That is a very worrying state of affairs.
Mrs. Edwina Currie (Derbyshire, South): Watch.
Mr. Kennedy: The hon. Lady says "watch". With her, the hon. Member for Hartlepool (Mr. Mandelson) and others, I am involved in an exercise on behalf of the European Movement. We are approaching all three UK party leaders, with a view to having a discussion and trying to heighten the profile of positive European arguments. The situation in the Conservative party has now got so serious--it would not matter if it were in opposition although the problem for all of us is that it is in government--and the division among their ranks so deep that it is having a positively damaging effect on Britain's capacity to contribute to the European Union and, in the run-up to the next intergovernmental conference, to win the deal for which we should be aiming.
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That is why I say that the efforts now being made in the European Movement and elsewhere to try to build an all-party pro-European movement are so important and why it certainly has Liberal Democrat support.Mr. Dykes: Does the hon. Gentleman further agree that in recent months the negative situation has even had an adverse effect on sterling?
Mr. Kennedy: Yes, the evidence has shown that. There is no doubt that the position of the Chancellor in particular, which has been open to some question given the politics of the Conservative party on the single currency and so forth, has weakened his credibility, which of course has had a knock-on effect in the currency market. That is indisputable.
The hon. Member for Harrow, East and I had lunch with the American ambassador to the European Union only yesterday. The ambassador was pointing out the United States' general sense of agnosticism over a single currency. The most telling point that he made--when he could get a word in edgeways because his colleagues were putting their rather robust construction on things--was that a single currency without sterling is of much less concern to the United States than a single currency with sterling. That was an important signal for us. There is clearly a need, which goes beyond sectional party interest in this House, to build a broader pro-European movement. I am glad that hon. Members of all parties are involved in that effort. My colleagues and I will certainly be contributing to it. Such an effort is needed because of what we heard in the Foreign Secretary's speech this afternoon. If that was his swansong at the Dispatch Box, it was a very sad one. The man is reduced to the position, because of the state of his own party and the division in his Cabinet, of not being able to say anything. That is a pathetic state of affairs in which the country and the rest of the European Union has no confidence and which gains no respect whatever.
5.36 pm
Mr. Tim Renton (Mid-Sussex): To say that the speech of my right hon. Friend the Foreign Secretary said nothing, as the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) has done, is very odd indeed. My right hon. Friend's speech clearly said a great deal, and much of it was somewhat unsatisfactory to those on the Conservative Benches who call themselves Euro sceptics. The Foreign Secretary sticks clearly and firmly to his line, just as the Prime Minister rightly sticks clearly and firmly to the line that he enunciated in his speech of 1 March.
I shall, however, take up the encouragement that the hon. Member for Ross, Cromarty and Skye gave to those hon. Members who are pro-European. I include myself in that number, although I always think of myself as a Euro realist rather than a pro-European fanatic. The hon. Gentleman will have read in the Financial Times yesterday the comments of Howard Davies, the Director General of the Confederation of British Industry, on the report that it has just produced, "A Europe that Works". Mr. Davies talked about CBI membership having a
"bias in favour in the long-term"
of the United Kingdom joining European economic and monetary union. He said, however, that companies remained cautious about the circumstances and supported, therefore, the "wait and see" position of Her Majesty's Government.
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That is not unlike the conclusion in the report from Andersen Consulting, part of the very large Arthur Andersen group, which will have fallen on many of our desks in the past few days. That, too, concludes that in general the contributors to the survey, who were by and large manufacturing companies in this country, felt the advantages of participation outweighed the disadvantages and said that they were concerned about the effect on British industry of the United Kingdom choosing to stay outside an economic and monetary union bloc.That view happens to be very close to the conclusion of the working group on the implications of monetary union for Britain, which was produced under the title of the Kingsdown inquiry, on which my hon. Friend the Member for Stamford and Spalding (Mr. Davies) and I sat. I was delighted to be asked to join the working group and I came to a personal conclusion after attending most of the detailed sessions. I say this to my right hon. Friend the Member for Guildford (Mr. Howell), although he is no longer present: we were addressed by bankers, economists, those used to dealing in very large quantities of foreign exchange, and representatives of British, German and Japanese industry in this country. I reached the conclusion that if a single currency comes into being, on balance it will be in Britain's interests to join.
I must admit that, pro-European as I am, when I started on the group I had some doubts about that. What finally convinced me was hearing the consistent majority opinion put before us that if there were an economic and monetary union and a successful and viable single currency, we were likely to have lower inflation, lower interest rates and more positive inward investment--a continuing flow, in fact--if we joined it than we would be if we stayed outside.
Mr. Cash: Will my right hon. Friend give way?
Mr. Renton: No, I shall not give way. I have only a few minutes and I am sure that my hon. Friend will make his point when he makes his own speech. I do not expect him to agree with me, but he will have his chance to speak soon. Having listened carefully and reached the opinion that I have described, so I decided that the conclusions of the Kingsdown report and those of the Andersen report, like those of the CBI, pointed in the right direction.
As I said at the beginning, there is obviously a big "if" here. If the single currency comes into being, we would do better to join. My right hon. Friend the Member for Guildford touched on that question, and many of us must wonder whether the single currency will in fact ever happen. That is perfectly fair. The Finance Ministers of the European Union countries now say that the date will certainly be postponed from 1997 to 1999, and clearly substantial difficulties will have to be overcome if a majority are to meet the convergence criteria.
From working on the Kingsdown report I also learnt that the transitional period--the moments between the decision to go into a single currency and the event itself--would be extremely difficult. The technicians have studied the possibilities--in the Maas committee, for example--to discover what the best approach would be. However, I am sure that if the single currency were to happen and if it looked like being successful, we ought to be in it. Indeed, we should get into it quickly rather than being, as we so often have been in other European Community developments, a Johnny-come- lately who plays no part in forming the rules and lives greatly to regret that fact.
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Whatever the economists and the bankers say, in the end the decision will be a political one for all of us. Moreover, it will have to have public support; it cannot possibly be a purely automatic decision.The concern that emerges most clearly from my hon. Friends and from Opposition Members who are worried about such developments is the fear of loss of sovereignty by the House. "Loss of sovereignty" is a difficult phrase to define, and it is easy to say that in many respects we have already lost sovereignty in financial and monetary matters. The decisions taken by qualified majority vote following 1986 further reduced the influence of the House. The European Court of Justice, which was set up in 1972 by the original accession to the treaty, has also removed sovereignty from the House.
Will we lose more sovereignty if we move into an economic and monetary union? Clearly, over monetary control and money supply, we shall. A European central bank would mean that there was only one monetary authority. Against that it must be said that the House already has little real influence and little say in controlling money supply figures. It is told what is happening; it is told the decisions of the Chancellor of the Exchequer. Money supply is not debated and decided in the House. The other day, in his Mansion House speech, my right hon. and learned Friend reaffirmed his inflation targets; subsequently he told Back Benchers about them. Such matters are not regularly decided on the Floor of the Chamber.
To me, the big question is to what degree the authority to tax and to spend --in order words, the fiscal powers--would leave the House if we joined a single currency and an economic and monetary union. That problem is well reflected in the Kingsdown report. The experts are divided, but in the course of the inquiry it was said that monetary union would not remove the fiscal powers of individual national parliaments. For instance, it would still be possible for any national parliament to have either a high-spend, high-tax posture or a low-spend, low-tax posture within the Maastricht restraints. If one had to stay within the convergence criteria, however, it would not be possible to have a high-spend, low-tax posture, but within those restraints Parliament would retain as much fiscal authority as it had before. To me, therefore, the fiscal question is still an open one and I should like it to be further examined in the debate on this key issue in the months and years ahead.
Against that background of general approval, but a great deal of understandable worry about the detail, it seems to me that the Prime Minister is absolutely right to defend the Maastricht option--an option either to go in or to stay out. Equally, there is no need for the Government to make a decision yet. No other European leader is making a decision on the issue at this stage, so why on earth should the British Government do so, however often they are pressed by those who criticise them on European matters? "Wait and see" is not a heroic posture on such a complex issue, but there is no doubt that on this issue it is the right posture.
There is also the difficult question of how many more decisions should be taken by qualified majority voting rather than by unanimity. Clearly, as the number of countries in the Community enlarges--the next countries likely to accede are Malta and Cyprus, whose membership will be considered immediately after the intergovernmental conference, and then the Baltic states--it is difficult to
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continue to give a right of total veto to each country. A small state such as Malta might, for example, block the accession of Lithuania until it received some particular agricultural concession. I know that my time is up, Mr. Deputy Speaker, so I say to the House--5.47 pm
Mr. James Molyneaux (Lagan Valley): In this season of commemoration of the end of the second world war it has been claimed by several people that the achievement of the European Economic Community, as it originally was, has been to keep the peace and to preserve us from a repetition of that war. The right hon. Member for Chertsey and Walton (Sir G. Pattie) said something about that, and in view of his long experience in the Ministry of Defence and the Northern Ireland Office we should pay close attention to his opinions. If time permits I may later be able to quote something for the benefit of the right hon. Member for Mid-Sussex (Mr. Renton). It is now suggested that the European Union should assume the role of NATO--complete with a European army, if you please. We need say no more than that the European Union's dry run in Yugoslavia has illustrated the folly of any such ideas, including the notion that the EU could ever in any circumstances be an effective peacemaker. Equally flawed is the absurd notion that the European Union could work magic on social issues. I do not have time to quote the leader in today's edition of The Times , but it is well worth reading in that regard.
My party has consistently supported free trade in the widest sense of the term, but we can never understand the logic of those who in 1970 and much earlier advocated membership of a free trading bloc in Europe but then proceeded to erect tariff barriers all round it. We support the concept of GATT and its removal of barriers, but we must ask whether the signatories-- particularly in Europe--will honour their obligations to remove all the irksome restrictions on, for example, British companies in the service sector.
As we move into the pre-IGC discussions, we must take account of the enormous shift in global trade in the quarter of a century since we joined the Common Market, which all of us knew very well in 1972 was only the cover name for what is now the European Union. Capital investment is flowing at an ever-increasing rate from high-cost economies in America and Europe to Asia and the Pacific rim, and the coming IGC cannot ignore that global flow. The UK in particular must accept that the assumptions of 25 years ago that British trade would be focused within the European Community are now greatly out of date--so out of date that by the end of the century the related notions of monetary and political union will also be obsolete. Only last week, we saw how some of the leading advocates of a common currency were lowering their targets and extending their expectations from 1997 to 1999. My party's fixed position on exchange rates has been based on something more solid than arguments about Europe. Since 1974--when we were forced by an authority not now
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in the House to become a separate parliamentary party--we have counselled against experiments in fixing the rate. That has remained our consistent position.It strikes us as very odd that every time the Government--of whatever party --get a bloody nose, they eventually come back for more punishment. Plain common sense supported by experience proves that once an exchange rate is fixed, the burden of support falls on the Treasury--the taxpayer's agent.
The younger and enlightened generation of industrialists and business men-- I come here to the tradition referred to by the right hon. Member for Mid- Sussex--are now well aware of the fatal consequences of a single currency. Today we have read a contribution from the chairman of the Institute of Directors in Northern Ireland, Mr. Howard Hastings, a young man making his way in the world and particularly in the world of business and industry. He says: "The main cost to the UK of a single currency would be relinquishing control over monetary policies . . . If it is too tight, there are the costs of lost output and employment.. too lax, and there would be the costs of inflation . . . A single currency is forever . . . We were able to leave the ERM, albeit in a far from dignified fashion, because we had our national currency.
Adopt a single currency and that option is removed. Not only is the case for a single currency not proven--it doesn't have a leg to stand on."
I need add only a few other considerations. To maintain a single currency, there has to be a single Government. If there is a single Government, it follows that there has to be a single nation. In such a single nation, democracy itself becomes impotent and obsolete. Some forget or ignore that a single currency in Europe would still have to float on the world markets, and I am afraid to leave that out of my calculations.
5.53 pm
Sir Peter Hordern (Horsham): I wish to say a few words about the single currency. As my right hon. Friend the Member for Mid-Sussex (Mr. Renton) said, it is true that a number of commissions and business leaders such as the CBI have found in favour of closer European co-operation and, on balance--so far as I can tell--of a single currency. But it will be a matter for intense debate within this House, both in the rest of this Parliament and, I am sure, in the next Parliament.
In an excellent speech, the hon. Member for Livingston (Mr. Cook) seemed to suggest that he had the total support of his Labour colleagues, but I believe that the Labour party is far more split on this issue than my party is--difficult though that is to believe. When we reach 1999, it is certain that those countries within the European Union which meet the economic criteria set out in the Maastricht treaty will join the single currency. I shall leave aside for the moment the transitional arrangements, which will be extremely difficult. The House will agree that there is a real political will in Germany, France and the Benelux countries to form that single currency. The House must also consider where we, and our business and industry, would stand if there were to be a core currency--that is what I think it would be--in 1999 and thereafter. That currency would certainly be widely traded in this country, as we do 40 per cent. of our physical trade with Germany, France and the Netherlands. That being so, it is certain that
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transactions would be settled in that currency--whatever it was called--and, increasingly, private transactions would also be settled in that currency.We would have at least a common currency operating within this country, and I do not believe that there is any way in which that could be prevented, even if anyone wanted to do so. A common currency would operate with sterling and because of its considerable strength due to the economic criteria the common currency would be inclined to have somewhat lower interest rates than sterling, and would consequently become over time a rather more attractive currency. One must take into account the pressure on sterling in those circumstances, as it would be in competition with a very powerful common currency in which business would increasingly be transacted. A future Parliament will have to consider those issues, and the right way to settle the matter is to see how the initial process goes and then decide what the impact on our economy will be as a result. That is why I am so glad that we have the opt-out. The best way to settle the arguments about sovereignty would be by a free vote in this House. I do not think that a common currency operating strongly in this country is a good subject on which to have a referendum and, because of the enormous constitutional implications of a referendum, I do not go along with my right hon. and hon. Friends who believe in a referendum.
I wonder what will happen when the core countries form a single currency. There will be considerable pressure, because of our opt-out, either to conform or to create within the European Union some kind of mechanism which will be adverse to our trading interests. I hope that we shall resist any such suggestions.
I am glad that we have an opt-out from the social charter, as it is bad enough to hear suggestions that we should go along with that. Labour Members today have repeated their adherence to that charter. A report in today's edition of the Financial Times referred to the impact of the OECD report on pensions within the European Union. I believe that it will be profound. One thing that it shows is rather comforting: we are by far the best provided for by pensions of any of the European Union countries. It will unquestioningly be the case--
Sir Peter Hordern: The hon. Gentleman does not seem to understand. I refer him to the OECD report. I am talking about total pensions, which of course include occupational ones.
The idea that we should have to contribute to a shortfall in other countries' pension funds must be anathema to us. I am quite certain that we should remain as we are and maintain an opt-out from the social contract in that respect.
Mrs. Currie: I remind my right hon. Friend that the United Kingdom has the largest proportion of elderly people in Europe, with the exception of Sweden. Would he feel the same way if Sweden were to contribute to our funds?
Sir Peter Hordern: I draw my hon. Friend's attention to the OECD report, which she will find interesting and illuminating. We should not be party to making large extra contributions to countries which have not made proper provision for their elderly people.
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I have a clear idea of how we should proceed within the European Union. We are in favour of an ever-widening single market to include the eastern European countries and to provide maximum competition. I am sure that that is the case.There is a costly downside to maintaining an independent currency. The Government cannot finance themselves through the bond market without having to pay a full 2 per cent. more than the Germans now pay. We even have to pay 1 per cent. more than the Belgians; despite the fact that Belgium has a huge debt compared with its gross domestic product and our own, it is clearly determined to go along with the deutschmark. There is therefore a cost attached to maintaining our currency which must be borne in mind.
I do not think that a single currency necessarily leads to a federal state. There is no question of our losing control of the power to raise income tax. In that respect, it is important that we should always retain that power within the House. We should not yield it to a European Parliament because national parliaments most nearly represent the people--much more so, at any rate so far, than the European Parliament does or is ever likely to do. We should not promote the European institutions too far, but we should promote unity among the European peoples through free trade, competition and the removal of national barriers.
I should like to offer one suggestion to my hon. Friend the Minister. Europe will be a matter of supreme importance in the next Parliament. Although I am not in favour of a referendum, I wonder whether it would be a good idea to appoint a commission to look at every aspect of the matter, both from our monetary and economic point of view and from our constitutional point of view. People should be invited to give evidence so that if there is to be a free vote it can be taken after a proper assessment of all the important matters involved.
6.2 pm
Ms Roseanna Cunningham (Perth and Kinross): Thank you, Mr. Deputy Speaker, for calling me so early in the debate, especially when I know that a number of other hon. Members are in the queue waiting to speak.
I wanted to speak in this debate because the subject is of enormous importance to the Scottish National party and Scotland. Our party has a policy of independence within Europe, so we are firmly on the side of the pro-Europeans in the Chamber. My predecessor, Sir Nicholas Fairbairn, might also have wished to take part in the debate, but perhaps not for the same side of the argument.
I had occasion, in a number of different capacities, to meet Sir Nicholas, because as well as being involved in politics, I am a member of the Scottish Bar. I recall that he contributed to a book in 1992 in which he described the creation of the city of Edinburgh as being done in a "creative, roistering spirit". I believe that that quotation, rather than describing Edinburgh, is probably a more apt description of Sir Nicholas, because his impact was such that, once one met him, one never forgot him.
Sir Nicholas made an impact not only in politics but through his work at the Bar. As a Member of Parliament, however, he had an enormous impact. In my travels around Perth and Kinross, I have met many people who have a little story to tell about him. They spoke of some cause that he had taken up or some particular intervention
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that he had made on their behalf, which they remembered clearly, particularly because of the way in which he made his interventions. Other hon. Members who are also members of the Scottish Bar- -not all of them are in the Chamber--would agree that when one first arrives at the Scottish Bar, it is noticeable that one of the people about whom one hears the most stories is Sir Nicholas. I regret to say that those stories are generally not suitable for inclusion in a speech, particularly in a maiden speech. The one thing that characterised every one of them was the enormous affection with which they were told. The political views of the individual did not matter, because the affection in which Sir Nicholas was held at the Bar in Scotland and on both sides of the House came through strongly. That also came through in the constituency, because wherever I went, from Kinross to Comrie, and from Milnathort to Muthill, the affection in which Sir Nicholas was held was evident.That affection is also tempered with amusement, because after many years of being in total political disagreement with Sir Nicholas, I found myself in total agreement with him at the very end of his life, when he gave his opinion on the likely result of the by-election that he knew was about to be called in Scotland. The result of that subsequent by-election bore out the prophetic abilities of Sir Nicholas. It at least highlighted the fact that, in the people of Perth and Kinross, one has an electorate who prefer a Member of Parliament who is just perhaps a little different from the norm. Although I cannot promise to go on in precisely the same way as Sir Nicholas, I shall provide the people of Perth and Kinross with the same distinctive voice.
That by-election was of enormous importance for Scotland. We in the SNP had the opportunity to put forward our entirely positive vision--an independent Scotland within Europe. I could contrast that with the vision of the Conservative party, if I could ascertain what it is. I am afraid that I cannot. Such is the Tories' disarray, their only response to Europe is to delay. We could characterise their approach as "back to Baldwin" rather than "back to basics". I am afraid that at the moment our Conservative colleagues appear to be both anti-European and anti-Scottish at the same time. I hope that they will not try to save themselves in the coming general election by displaying insularity, xenophobia and parochialism, because that would be a great shame.
An attempt is being made to press emotional buttons harking back to an empire that no longer exists in order to combat Brussels and to deal with the awkward squad on the Celtic fringe. That approach can be contrasted with the openness and inclusive nature of my party, which we demonstrate so vigorously in our campaigns. That contrast is bound to benefit my party, as it will benefit Scotland, because Tory strategy will not work in Scotland. The by-election made that clear. Our policy also contrasts just a little with that pursued by our colleagues on the Labour Benches. They may not be quite as anti-European or as anti-Scottish as Conservative Members, but their rhetoric is directed to what I would describe as the soggy centre. They still want to whistle "Land of hope and glory", but they want to do it quietly and in the dark. They are equally irrelevant to Scotland's political debate.
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Scotland is lucky because it has a real alternative, which we laid out at the by-election. We fought a hard campaign in one of the most beautiful constituencies of Scotland, where, everywhere one walks, history is all around. It is a Scottish history, not a British nor an English history. There is certainly prosperity in my constituency, but there is also poverty, in spite of the way in which it is frequently portrayed.There is also an enormous thirst for change and a fresh start, which my constituents have discovered that only the Scottish National party can provide. Our by-election campaign laid out detailed policies directed towards economic and social decency. They are the type of policies that ordinary, decent Scots, not only in Perth and Kinross but throughout Scotland, find energising, because Scotland does not regard proper social provision and a culture of care as in any way extreme. The real extremists and the real separatists are those who wish to separate us in Scotland from the rights and benefits that should be part of a normal working life.
In the context of the debate, I am speaking especially about those who wish to separate Scotland from the benefits to be accrued from the social chapter. I believe that it is the Government's intransigence in continually opposing the social chapter that has led or is leading directly to a low- skill, low-wage, low working standard culture.
We are on the verge of becoming a sweatshop in Europe. There are private fortunes for some, but for the majority there is low job security, low commitment to employers and low standards of service and of production.
Scotland does not believe that Government policies are providing a sound future for that country. Security and prosperity can come only from full and willing participation in a Europe-wide social chapter and a commitment to the people.
The most successful European economies are those in which the work force is motivated and supported. It is short-sighted to neglect that work force and to neglect the people. An example of that short-sightedness, if I may digress slightly, is intransigence towards a minimum wage. The Government show total resistance to that, and it was one of the principal arguments in the by-election. I found that strange because the agricultural minimum wage exists, which protects rather than destroys jobs.
That is also the case elsewhere. Study after study has shown that the 60 years of a minimum wage in the United States have not destroyed jobs. I also find it amusing that the right-wing platform of President Chirac included a commitment to increasing the French minimum wage. Indeed, Sir Winston Churchill, I believe in this very Chamber, in 1909 called it "a serious national evil" for anyone to receive less than a living wage.
Those are the benefits that we can accrue from the European Union--tangible benefits. The concept of a people's Europe and the social chapter helps to bring us those benefits, and it can and should be coupled with a minimum wage, set by Government. It can be introduced during a transitional period to help small businesses, and I believe that, in 1995, it should be set at not less than £4 per hour--a pity that my friends on the Labour Benches will not also fix a figure.
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