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7.26 pm
Mr. Austin Mitchell (Great Grimsby): It was good to have the routine, ritual recitation of regular cliches by the hon. Member for Wycombe (Mr. Whitney)--the debate
would not have been the same without them. There is a routine in these debates: the Euro-sceptics versus the old septics in the hon. Gentleman's case.
Although these debates have always been an exchange of stereotypes, I sense that they are becoming more serious, more realistic and more accurate--all accusations from which I exempt the hon. Gentleman. He is still crazy after all these years--a Foreign Office clock stopped in 1972. Indeed, he is the best manifestation I know of the lemming mentality. If people in Brussels jump over a cliff, we must follow them because we cannot be left behind. It would be uncommunautaire not to jump over any available cliff Europe jumps over.
The hon. Member for Wycombe told us about the benefits of membership before we went into Europe and it turned out to be a disaster. He told us about the joys of the exchange rate mechanism before we went in and it turned out to be a disaster. He now praises monetary union in the same terms. We view his arguments in the same light as we do the consequences of his other arguments.
I am afraid that what the hon. Gentleman talks about-- the Labour party talks about this too in a sense--is a mystical Europe, a Europe of dreams and a Europe that does not exist. We are talking about Europe as we would like it to be, not about the club to which we belong, which is basically a coalition between France and Germany to force their interests on the Community and to bribe a peripheral Club Med of smaller states to go along with what they want. It is a hard commercial relationship and the consequences of our lack of success in that hard commercial relationship are now coming through to the British electorate.
What the hon. Member for Wycombe called the frenzy, the froth and the negativity is the process of discovery of the pain and consequences of membership. It is still all disguised by the usual litany of lies. Membership of the European Community has polluted politics in this country. Failure must be portrayed as success and the advocates of going in will never admit that they are wrong, so they must say that we are doing well although we are manifestly not.
I have a point for the hon. Member for Wycombe and the Euro-enthusiasts who still survive in this country. I see that the hon. Member for South Derbyshire (Mrs. Currie) is with us, so some Euro-enthusiasts still survive; she is perfectly preserved, I might add. They should tell us the truth.
As I see it, the consequences of membership have been disastrous for this country. The White Paper told us that there would be no benefit from membership unless the growth rate increased substantially, yet it actually fell with our membership. Unemployment has quadrupled, and imports' share of our market has trebled since we joined. We have therefore got ourselves into a trade deficit in visible trade, and also a massive public deficit, because we have shrunk the tax base and destroyed more of our industrial base than any of our competitors.
What caused all that? Was it due to the far-sighted efforts of a Conservative Government who have been in power for 16 years, or was it due to the consequences of our membership of that malign Community, so weighted against us? Conservative Euro-enthusiasts should tell us
which one did the damage. Why are we in this mess? Was it their Government, or was it their enthusiasm for Europe, that gave us all those benefits?
Economically, we have had our worst years since we entered that relationship, and now the politics of hypocrisy are emerging. The reality is that both parties are split. It is a foolish game for either major party to pretend that it is united on the issue. It is also foolish to trade the insults and stereotypes that we have heard today.
Both parties will stand up for Britain and will do their best in the negotiations, but both will be overruled, because to stay in and to belong they will have to go along with whatever folly is demanded, whether that be the Maastricht treaty or whatever emerges from the intergovernmental conference. We are always told, "Move along, or be left behind." Although both parties would stand up for Britain if they were in power, in fact they are always dragged along behind, and simply because people try to disguise that we are left talking about a Europe that is not real. It is like talking about a cloud of gas.
It is interesting to see how attitudes to Europe have changed. In the 1970s we were told that membership of the European Community--or the Common Market, as it then was--was a great bulwark against Bennery. Apparently the treaty of Rome, a capitalist treaty, would stop the forces of socialism in this country. But now we are told that that same Community really represents socialism creeping across the channel from Brussels. What was a bulwark against Benn has become a tide of socialism dragging this country down.
Both sides are confused, so the politics of hypocrisy are emerging on both sides of the political divide--and they are at their worst when people talk about monetary union. Europe has gone down the path of monetary union because that was the only way to build union. The politicians cannot get the democratic consent of electorates, because electorates will not vote for union, and they cannot get agreement between Governments because in the process of deal-making and discussions inside Europe Governments tend to construct a camel. They therefore decided to go down the monetary road.
Lord Jenkins of Hillhead avows as much in his autobiography--or his "alibiography", as it might be called. In 1979 Europe began to go down that road because it was the only road open. The logic is quite clearly that if we have a single currency we shall need the institutions to manage it, and the huge redistribution system that will be necessary to remove the consequences--that is, the damage that monetary union will do to the backward regions and the weaker economies.
The redistribution system will have to be monstrous and enormous. In a nation state one can move money around. If Scotland or the north is not doing too well, we can have a regional policy, unemployment benefit and public spending on roads and other infrastructure in the area. But Europe cannot do that. Europe is not a nation state and it controls only about 1 per cent. of Europe's GDP. If we had a single currency we would need the machinery to redistribute money on an enormous scale to offset the disastrous consequences of monetary union for the poorer areas.
That bill would have to be paid, as the bill had to be paid to merge the currencies of East and West Germany. The Germans were prepared to pay that bill, for kith and
kin, but there is no set of institutions or relationships that would pay the bill after monetary union. That is the unspoken bill that will come to us at the end of the whole process, but everyone keeps quiet about it.
Mr. Spearing:
I was given to understand that one of the reasons why West Germany was keen on the union of the then single market was that that would enable it to provide support for its southern areas at the expense of the north. Does my hon. Friend agree that where there is more competition, which is supposed to be one of the benefits of a single market, the better-off areas get even richer and the worse-off areas get even poorer? That involves not simply the recirculation that my hon. Friend mentioned, but a centralised financial and political power to collect the money and redistribute it.
Mr. Mitchell:
That is a consequence of a single market, too, but it would be compounded by a single currency. In a single market a country can at least cushion itself and take shocks on the exchange rate rather than putting people out of work. That cannot be done with a single currency, so the machinery and scale of redistribution will have to be much bigger.
With all those disadvantages, there is only one consolation about monetary union: the simple fact that it will not work. It will rip the weaker economies apart. That realisation is growing--but not, as other hon. Members have pointed out, among the elite of Europe. There is a deep gulf between the people of Europe, who feel apprehensive, worried and anxious, and are being hit by the consequences of the move to a single currency, and the elite. That is happening in France, in particular, but it is happening in Italy and Belgium too. The people are being hit by rising unemployment and cuts in public spending, but the elite maintains its enthusiasm undiminished, because it is immune from the consequences. The elite is losing touch with reality.
The result is that Governments approach the issues backwards. Look at Italy. It did well out of leaving the exchange rate mechanism, because its exchange rate came down. The Italians also wisely decided to send many politicians to prison, which destroyed confidence in the currency, and the lira fell even further. Italian manufactured exports then became enormously competitive, and a deficit in trade has been turned into a surplus within two years.
Italy is now trying to bring the exchange rate back up, because the Prime Minister is a former reserve banker and the Italian Government are desperate to get into monetary union--all unaware of the fact that the terms of convergence for monetary union were deliberately written by the Germans so as to exclude Italy. Italy is almost the last nation that the Germans want to let in, yet Italy is now trying to submit itself to targets and to hurdles that were deliberately built high to prevent it from jumping them.
The Labour party says that monetary union might be a good thing, but that we must change the terms of convergence so that there is real convergence--in fact, we must rewrite the treaty. That, too, is a Europe of dreams, a Europe that does not exist. Those terms will not be changed. The harsh convergence criteria were put in deliberately because they were the minimum acceptable to the Bundesbank. They will not be changed, because the Bundesbank and Germany do not want them changed, and the German politicians will not be able to change them.
It is no use the Swedes talking about a full employment policy, or our talking about real convergence; it is no use trying to pursue escapist dreams in that fashion. The terms will not be changed, and we are simply indulging in wishful thinking if we think that they will be.
France gives us another example of a country walking backwards. President Chirac was elected on a platform whose main plank was the fight against unemployment. Yet he has now turned that into a fight against his own people. He has declared war on the social security system, on the trade unions and on the people of France. Probably in the end he will win. There is no doubt that elites are powerful in France. France has a strong executive Government and it can win through.
For the French elite, the desire to maintain the franc fort, which it sees as the key to France's relationship with Germany, is crucial. There has been such an investment in pain and misery there over the years, with such low growth and such high unemployment, that the elite will not suddenly admit that it was all a terrible mistake and say to the electorate, "Sorry, we have been pursuing the impossible for eight or 10 years. It was a mistake, so let's begin all over again."
Germany is in the process of walking backwards as its politicians discover that its people do not want monetary union because they do not want give up the deutschmark, and the Bundesbank does not want monetary union because it does not want to give up control of German economic policy. German politicians are now pressing for tougher conditions in an attempt to propitiate the German people and the Bundesbank.
All this walking backwards means that monetary union will not happen. Look what happened to Commissioner Kinnock, who said that the king had no clothes. Retribution descended on his innocent head after his innocuous statement on something that should have been obvious to everybody.
My point is not that monetary union will not happen-- it may happen. The elite in France will want to stick to Germany, and a group of "deutschmark states" may form with France around Germany. But that is the only way in which monetary union will happen. If it is pursued as a policy for Europe without a test of how much the elite of Europe is prepared to listen to the people, it will be disastrous. I do not know whether monetary union will happen--it may, or it may not--but it will be disastrous if it does and our future will lie on the outside, pursuing our own interests.
Whether monetary union happens or not, enormous efforts will be put into trying to make it happen. We will have to go through the preliminary stages, which are causing the problem, to the point where everybody will finally accept that it cannot happen. The domesday machine is now out of control and is grinding down the people of Europe. The preliminaries to monetary union are causing unemployment and leading to cuts in Government spending, which are leading to low growth. Europe, which was supposed to be the train to take us to growth, is dragging us back. Thanks to Europe's ruinous economic policies, it is worse off than we are.
Europe is not working. Monetary union cannot work, yet it is being pursued through all its stages, which will inflict pain. What is happening in monetary union is also happening in every other sphere of European activity, including enlargement. Our Government are attached to the
idea of enlargement, whereas the German Government want it for rather less altruistic reasons, but nothing is happening. The best way to help the emerging democracies in eastern Europe is to help their agriculture. We cannot do so, however, because of the enormous effect that that would have on the common agricultural policy.
Such selfishness precludes us not only from helping those countries in the most effective way, but from giving them full membership of the Union. That would have to involve membership of the common agricultural policy, which would almost certainly double the burdens of the CAP. That would bring the CAP crashing to the ground, but it has not materialised so far.
The measures will be a barrier against the eastern European states joining the EU. They will not be able to join the CAP, nor will they be able to join the common fisheries policy. Some of the countries concerned-- Poland, Bulgaria, Latvia and Estonia--have big fishing fleets. Where will they fish? They will not have waters, and we cannot compensate them as we did the Spanish in our waters. We cannot therefore enthusiastically welcome those countries on that basis.
We cannot subsidise the eastern European countries on the scale that we subsidise Greece, Spain, Portugal and Ireland, as those countries might object to our doing so. No progress has been made on enlargement. However many platitudes we preach and however desirable we say that enlargement is, it is being put in limbo, and nothing will happen.
Nothing can be decided on the institutional changes either, because the European Parliament is in a power struggle with the Commission, the Commission is in a power struggle with the Council of Ministers, France and Germany are in a power struggle with the other countries and the elite is in a power struggle with the people. This is not building an exciting and idealistic venture--it is wrestling in blancmange. It is a living tableau by Damien Hirst of a wrestling match smothered in blancmange. That is what we are being asked by hon, Members such as the hon. Member for Wycombe to give our allegiance to.
I am not sure how the IGC will work out. For a start, what is it? Is it a 3,000-mile service for a car from hell that is shorter on one side than the other? Is it a fundamental reconstruction of the Union? Nobody seems to know--nobody has any idea. It will be very difficult, if not impossible, to get any agreement. France and Germany cannot let the conference fail and they cannot allow monetary union to be postponed. President Chirac cannot say after all the current events in France that monetary union should be postponed, and so the consequences will be pursued.
I will conclude on this point. The IGC will be a messy, but it will be no use the countries involved postponing any outcome or decisions while they wait for a Labour Government in this country. The advent of a Labour Government has been postponed. We will win power, but it is clear that there must be another Budget next November. We shall not win power until April 1997 as the election will be put back to that date.
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