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Mr. Duncan-Smith: It has gone.

Mr. Davies: It cannot have gone; it is in the treaty.We can make it go if we wish, but only by amending the treaty. The Commission does not know what to do. Presumably, the embryo bank does not know either, but it has to produce reports on the basis of those criteria.

Articles about the European Union tell me that it is based on the rule of law. Indeed, in Luxembourg a splendid building--the European Court of Justice--was built to the rule of law. It has an Advocate General, judges, rapporteur judges, registrars and a legal secretariat. It is a veritable empire of the rule of law.

There is clearly a problem, because in 1988 neither the Commission nor anyone else will know what to do about this criterion.

Mr. Legg: That is what they want.

Mr. Davies: That cannot be so, because the treaty must be based on the rule of law. Treaties have to be interpreted, and the only body that can tell us whether a criterion has been met must be the European Court of Justice. When the European Union sought to come to an agreement with the European Free Trade Association, the first agreement was thrown out by the European Court of Justice. In fact, the Commission asked the court to give a declaratory judgment. I am sure that in the continental system it is perfectly possible to get a declaratory judgment. I suggest to the Paymaster General that the Government would be doing everyone a favour by sending the matter to the European Court of Justice for a declaratory judgment as to whether this criterion is in or out.

Mr. Legg: The point that the right hon. Gentleman is making adds to my argument that politicians will seek to interpret the criteria as flexibly as possible. They are not supposed to, but that is what they will want to do. What sort of judgment does the right hon. Gentleman think is likely from the European Court of Justice, when part of its objective is to achieve ever closer union?

Mr. Davies: I do not know--perhaps we should reserve that matter for another occasion. I understand what the hon. Gentleman is saying, but I am merely trying to be helpful to the Government. The poor Prime Minister does not know, Jacques Santer does not know--nobody knows. The people who should know, however, are the judges in the European Court of Justice.

Dr. Norman A. Godman (Greenock and Port Glasgow): Is my right hon. Friend aware that the judges in the European Court of Justice frequently disagree among themselves? In a recent case, Advocate General Karl-Otto Lenz offered a 23-page opinion that was totally rejected by his fellow judges. That is not all that uncommon.

Mr. Davies: My hon. Friend is not a lawyer, and I can see that he is not an expert on European law. If he were,

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he would know that the judges are separate from the Advocate General. The Advocate General is a concept imported from the French system; I believe the French translation of Advocate General in the conseil d'etat is "the Government commissar". From time to time, the court overturns decisions from the Advocate General, but the contrary has mainly been the case in the past 20 years.

Let us not digress, however. All I am saying is that we should give these guys a chance, as it is their job to tell us whether the criteria apply or not.

Mr. Marlow: The convergence criteria are set out in a protocol. The right hon. Gentleman will be aware of protocol 6, which says:

"The Council shall, acting unanimously . . . lay down the details of the convergence criteria . . . which shall then replace this Protocol."

How does the right hon. Gentleman react to that?

Mr. Davies: I do not understand that very well, either. Perhaps that is a subsidiary question that we could send at the same time to the Court of Justice for the judges to answer. The Paymaster General should consider that the only body within this troika of institutions--the Council of Ministers, the Commission and the Parliament--that can adjudicate is the court.

Finally, I find it quite extraordinary that, in an agewhen the slogan very often is "Power to the people", when politicians are held in considerable disrespect,when people feel that they are losing power and when we have a global economy, we are debating proposals that would entrench undemocratic power in various institutions. I should have thought that, as politicians, our concern should be that there is a gap developing between us and the public. This proposal would merely make it worse, as it removes all hope from general elections and all possibility of democratic change. I do not know what the Paymaster General can do on the matter, because it is law already. Perhaps he could send that to the European Court as well.

11.7 pm

Sir Teddy Taylor (Southend, East): The time is late, and I apologise to you, Mr. Deputy Speaker, for keeping you up late, as I know how hard you work. On the other hand, I usually turn up at this time, first because Governments usually do nasty things after 10 pm, and secondly because I find that the gentlemen of the press who often report these matters have all gone home, despite the fact that something rather devious is happening.

It is always a pleasure to follow the right hon. Member for Llanelli (Mr. Davies). He is an optimist, whereas I, as he knows, am very much a pessimist. The issue he raised is fundamental--what happens in 1998 if we have to find new criteria? If we look at the treaty, we see that every member state that wanted to join apparently had to have fixed exchange rates for two years. We were told that that was irreversible, but we know now that it has been totally scrapped.

Article 6 of the protocol on page 218 of the treaty states that if we want to create new criteria, we must do it by unanimity. To that extent, it would appear that Britain has some kind of veto. But I can honestly say to the right hon.

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Gentleman--whose attendance and commitment I never doubt--that Members who think that that is the case can forget it.

I received a letter this morning from the Economic Secretary to the Treasury, whom I asked a question on that point in a debate that we had some weeks ago. I asked what will happen when we come to consider the issue of new criteria, and my hon. Friend replied in her letter that the

"Heads of Government will decide in spring 1998"

which countries qualify. Basically, she said that as the exchange rate mechanism no longer operates within the same bands as it did when the treaty was drafted, it is not clear how the criteria may be interpreted, but the Government do not believe that we need an interpretation now.

When 1998 comes, it will not be a case of unanimity for new criteria. Member states will sit around and decide. Britain will not have a veto: no country will have a veto. As happens time after time, hon. Members think that they have been given assurances. They think that something is in writing, and that they can go to the courts, but basically it is all a dead loss.

I am sorry that the Chancellor of the Exchequer is not present. We had a debate on economic and monetary union on a Wednesday morning--we talked of nothing else--but, sadly, the Chancellor was unable to attend.I am told that he is busy in the mornings. Now we are having another debate on a vital issue. I should have thought that the Chancellor could be present. While I have immense respect for the Paymaster General, I feel that the House deserves some factual guidance on issues such as this.

My constituents thought that they were voting for someone who would support Conservative policies.No doubt people who voted for Opposition Members--respected Members, when they stood for election--thought that they were voting for Labour economic policies.

Mr. Jenkin: And the same applies to Liberal Democrats.

Sir Teddy Taylor: I am sure it does. They have some policies on this, as on everything else.

Article 103 shows us the position in regard to economic policy. Broad guidelines for all member states are laid down, on advice from the Commission, by the majority of the Council of Ministers. The purpose is to check on whether Britain is following the guidelines. Nothing could be clearer: if we do not do so, we shall get a rocket from the Commission. That is set out clearly in paragraph 4.

I am sure that the Minister will not say this, because he is one of the honest guys, but other Ministers might say, "Do not worry about it. It is just guidance." However, whether people vote Conservative, Labour, Liberal Democrat, Scottish National party, Communist, Trotskyite or anything else, the economic policy of the UK Government must be in accordance with broad guidelines laid down by the Council on the advice of the Commission. People should be told what is happening.

I wish to blazes that, instead of sending the Commission this ridiculous Red Book, the Government would give some idea of the damage being done to the

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United Kingdom by European Union policies. What has happened to our trade as a result of EU membership?Is it or is it not true that, since we joined the EU, where we used to have a positive balance of trade, our accumulated deficit is now £100,000 million? That is a vast amount, and great damage has been done to the UK economy, not through our fault but because of the burdens that we have had to incur.

When will the Government tell us the truth about the common agricultural policy? They have put lovely words in the Red Book, saying that expenditure is up this year and they are sorry about it, but there are balancing items. Is it or is it not true that the cost of the CAP this year--1996--is £9,000 million more than it was in 1994? That is a massive increase. Time and again, stupid Agriculture Ministers--along with people speaking at party meetings, and even Liberal Democrats at their conferences--say that reform is upon us and the cost is falling. The plain fact is that it is going up and up.

I was appalled to see in the Red Book--I do not think that we can possibly send this to the Commission--that contributions this year will unfortunately be higher, although they will be lower thereafter. I have seen Red Books for about 31 years. Every year in which we have been in the EU people have said, "Unfortunately, the position is worse this year, but do not worry--it will be better next year." It is like the Bob Marley song: "Don't you worry about anything baby, because everything's going to be all right."

This year, the figure will be £2.89 billion--£5 every week for every family. If the Government send the Red Book without revealing the damage that the EU is doing to Britain, they will not be giving an honest assessment.

My last point concerns the massive burden on Britain of all the directives. I am honestly sick--and I have been here for 31 years--of hearing Ministers say that the burden of EU administration is going down, that it is less this year than it was the year before and it is going to be even less next year. We know the facts. We have seen the superb pamphlet produced by some of my hon. Friends, which points out the dangers to the economy of that mass of legislation.

I wish that the Labour party, most of whose members I honestly respect as good, hard-working people, and the Conservatives--who are indeed waking up--would start to ask themselves, "What the blazes are we doing to our people?" What about the poor people of France, where extra unemployment is being created every day because of a mad policy of artificial exchange rates?

If only we had more Ministers like my right hon. Friend the Paymaster General--who, in all sincerity, is one of the good guys--instead of some of the twits on both sides of the House, who would tell people the truth. Is it true that our economic policy is now guided by Europe,no matter who people vote for? Is the cost of the common agricultural policy going through the roof? Is it true that our country is being damaged and that our poor friends in Europe are suffering? Is it true that, no matter what hon. Members think, they can control, when 1998 comes, a little group of Ministers will decide who goes forward to economic and monetary union? It is time we played straight and told the truth and it is time that the nation woke up.

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