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Mr. Nigel Spearing (Newham, South): As economic and monetary union surely requires the convergence of the total economies of the member states, why is it that only certain indices in the public sector are included? Why not also include comparable indices in the balancing private sector?
Surely economic and monetary union also requires the establishment of a centralised, absolute monarchy of bankers, who are separate from national Governments and from the institutions of the Community. However, surely one of the principles of European Union is to defend the western view of democracy, which is voting into power assemblies that, in turn, control government? Is not that an anomaly, and will the Prime Minister tell us whether the European Council has explained that anomaly? If it has not, will he do so now?
The Prime Minister:
I have some sympathy with the hon. Gentleman's earlier comments about convergence, although he is plainly wrong when he refers to convergence as only affecting matters in the public sector. One of the most important convergents is a high degree of price stability. Price stability, which has clear implications for what is happening elsewhere in the economy, not only is a matter for the public sector, but goes right across the economy as a whole. The hon. Gentleman is wrong on that point and I think that his subsequent points were addressed and determined many years ago.
Mr. Bernard Jenkin (Colchester, North):
May I congratulate my right hon. Friend on his description of the other member states, which he said were rushing like lemmings over a cliff towards currency union? While 150 million people may be inside the currency union, is it not a fact that 5.5 billion people remain outside it? Is it not a perfectly viable option for this country to choose to opt out of monetary union and model ourselves on the thousands of economies round the world--large and small--which have independent currencies?
The Prime Minister:
That is certainly an option. From the moment when I negotiated the opt-out at Maastricht, it has always been possible that this country might decide to take the decision, in its own interests, not to be a part of a larger currency union. There is no doubt that we could continue without entering into a currency union. We would have to decide whether the balance of advantage for the Government, the City, the economy and our future trading relationships rested with our being in or being out. That is precisely the substantive point. Of course we could be out and there is no doubt that we could stay out. We shall have to weigh the balance of advantage when the time comes.
My hon. Friend is correct in his earlier point: more citizens of Europe will be outside the single currency at the outset, and for some years afterwards, than inside it.
Mr. Donald Anderson (Swansea, East):
Will the Prime Minister confirm that it was the common understanding of our partners at Madrid that no substantive decisions would be made on the IGC until after the conclusion of the election in this country? Does that not mean that,
The Prime Minister:
The hon. Gentleman builds his question upon a false premise, as there was no such agreement at Majorca or at Madrid. When we begin the intergovernmental conference, which will be launched in Turin on 29 March, I hope that we shall begin to take decisions as we move through the year. Decisions will not all be held to the end of the year. We may complete the intergovernmental conference within a year, or it may take longer. If we complete it within a year, the whole matter may be determined within the lifetime of this Parliament. That is the decision that I have reached and, unless the hon. Gentleman was serving biscuits somewhere, he is in no position to shake his head.
Sir Archibald Hamilton (Epsom and Ewell):
Does my right hon. Friend agree that much of the drive in Europe has come from Germany, which has a lot to do with the fact that Chancellor Kohl is ashamed of Germany's past and frightened for its future? Does my right hon. Friend also agree that the democratic institutions in Europe are woefully inadequate? If we drive towards political union without proper democratic representation at the centre, it will lead to the emergence of fascist and ultra-nationalist parties, which will want to withdraw from Europe and break up the European Union. That would deny Chancellor Kohl the goal that he is seeking and, for many hon. Members, would lead to a very unsatisfactory outcome.
The Prime Minister:
The democratic institutions of Europe are bound to be considered at the intergovernmental conference. That is true of both the present powers and nature of the European Commission and the other institutional questions, which will be considered expressly during the forthcoming intergovernmental conference. We must examine those issues for another reason, apart from those set out by my right hon. Friend. As the European Union enlarges--as I profoundly hope that it will--I believe that it will provide an historic opportunity for this generation of politicians to change the face of Europe in a thoroughly beneficial way. In those circumstances, many of the present institutions of the European Union will prove inadequate to deal with the enlarged number.
Severalhon. Members rose--
Madam Speaker:
Thank you, Prime Minister. We must now move on to the second statement. I regret that so many hon. Members are disappointed, but I have kept the Prime Minister at the Dispatch Box for more than an hour.
The Secretary of State for Transport (Sir George Young):
With permission, Madam Speaker, I should like to make a statement on the franchising of passenger rail services.
The House will be aware that, on Friday, the Court of Appeal, considering an application for judicial review by Save Our Railways, found against the Director of Passenger Rail Franchising on whether the passenger service requirements for some of the first seven franchises had been developed in accordance with the instructions and guidance that had been issued to him by the Secretary of State.
The court ruled that the franchising director could proceed with the award of the first three franchises-- Great Western, South West Trains and London Tilbury and Southend Rail--although it ruled that the PSR for LTS Rail was not consistent with the instructions. The court also ruled that the PSRs for the next four franchises were similarly inconsistent. In doing so, the court was overruling an earlier judgment of the High Court that had dismissed the judicial review.
The court's ruling comes after the franchising director made excellent progress in preparing the first franchises for award to the private sector. Indeed, the first three franchises are ready to be awarded soon.
We have, of course, given careful consideration to the implications of the court's judgment. I confirm that, as planned, the franchising director hopes to announce the award of the first three franchises later this week, and I welcome the court's agreement that he should go ahead with them.
The court has been concerned with the consistency between the franchising director's instructions and guidance and the PSRs. It is, in the court's words, a "limited legal problem". The court has not questioned the Government's policy. Indeed, the judgment describes the franchising director's approach to developing PSRs as
The franchising director has prepared his PSRs in a manner which my predecessors and I have consistently approved. We believed them to be consistent with the formal instructions and guidance that were given to him. The Court of Appeal has now examined the meaning of the existing instructions and guidance and concluded that the existing PSRs are not consistent with them.
I have decided, therefore, to clarify the instructions and guidance to the franchising director to ensure that they reflect beyond doubt the policy that we have always followed. Franchisees should have flexibility to adjust commercial services, but the franchise agreement should ensure that a core service level is protected so that service levels operated by franchisees are broadly similar to those operated immediately prior to franchising. My intention is to ensure that the work done in developing the PSRs so far can be relied on in the continuing franchising process.
Rail Franchising
4.33 pm
"intelligible and in no way irrational".
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