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6.38 pm
Sir Peter Hordern (Horsham): So far, the debate has been almost entirely confined to the beef crisis. That is no great surprise, because it has been the greatest shock that has befallen the United Kingdom this year and I am quite sure that it ought to be taken seriously.
What has come out perhaps worst of all are the atavistic tendencies of papers such as The Daily Telegraph and The Times--both, incidentally, under foreign ownership--and of course The Sun, and the way in which they have regarded the affair as a war against our European partners. That has been a most disgraceful performance, and I greatly regret it if any of my hon. Friends or any Opposition Members take the view that progress can be achieved by being bloody to the Europeans on any long-term basis.
I accepted that a policy of non-co-operation was necessary, but I did so with great sadness, because I could see that the European leaders were not concentrating sufficiently on the proposals that we had brought before them. Happily, however, it now seems that progress can be made at Florence, and I very much hope that that will be the case.
The lesson, especially for those who think that we can play our part outside the European Union, is that, in the first place, the United States, Canada and most other countries have refused to take our beef for many years. That was nothing whatever to do with the European Union. In order to get the thing straight and to recover the situation, we appealed to that much maligned institution, the European Court of Justice, and it was the European Commission that managed to save the situation with regard to tallow and those other substances.
It is worth remembering that, if we were outside the European Union, we would not have been able to persuade any country to lift the ban on our beef--certainly
not any country in the EU. As is so often the case, the importance of our membership of the EU is emphasised by what has happened during the beef crisis.
It is not hard to criticise the institutions of the European Union. They can all be at fault, as can any human institution. It is not hard to criticise the direction in which the EU is going sometimes. But it is essential that we always remember that we are members of some 20 years' standing, and that our trade and business is now knitted in to the EU. Europe is where we do the largest proportion of our trade, and it brings us substantial benefits.
The single market is not perfect; of course there is room for improvement. But can anybody believe that we would secure such improvement if we were outside the European Union, bashing against the walls, rather than as a full committed member?
There are some who say that we would do better to forget our trade with the EU and concentrate instead on our trade with the far east. I do not deny that our trade with the far east is of great promise and potential, and I see no reason why we should not develop it as much as possible, but I cannot see why that should in any way detract from the importance of our trade within the EU. In fact, it supports that trade, because there is also no question but that this country attracts enormous inward investment precisely because we are a member of the EU. We would be less likely to attract that inward investment if we were outside it.
To claim, as some do, that we would nevertheless be able to function perfectly well in some sort of free trade area, and that the EU would be happy to grant us that status, seems to me to fly in the face of reality. After all, we would then be in the position of a supplicant, not that of a full member of the EU, negotiating constantly for improvements.
Of course the single market stands in need of improvement. In my opinion we need to extend it to the eastern European countries. We need to broaden its scope, extend its borders, and remove some of the restrictive practices. The House will recall that, about nine months ago, British Airways had a problem with landing at Orly airport. Does anybody believe that the French would have taken the smallest notice of our position if we had been outside the European Union? It was only because we were a member that Air France was made to alter its policy on landing rights. That seems to me to be a practical argument.
I know that some people use arguments that rest on sovereignty--especially, as the right hon. Member for Bethnal Green and Stepney (Mr. Shore) has just said, those about the single currency. Those arguments need to be taken seriously, but, as the House knows, we have secured an opt-out from the single currency, and will not be bound by it whatever may happen.
We have now reached the point where there would be a referendum if the Cabinet--and, I suggest, Parliament too, because it is inconceivable that a referendum would be held unless Parliament had first given its view--came to a decision on a single currency, after consultation on the subject. So it can hardly be said that the Government are hell bent on a single currency. I can tell some of my hon. Friends, as well as some Opposition Members such as the right hon. Member for Bethnal Green and Stepney, that there is no prospect of any hell bent progress towards a single currency.
However, it is the question of sovereignty that so alarms some of my hon. Friends, for all sorts of good and no doubt traditional historic reasons.
Mr. Nigel Spearing (Newham, South):
Surely the issue is not just a matter of sovereignty in the broad sense,but of legislative authority for domestic purposes. Does not the right hon. Gentleman agree that, had the arrangements for Europe stopped at the treaty of Rome, or perhaps even at the Single European Act, there would not be those difficulties for the Conservative party? What some Conservative Members, as well as other people, are worried about is exactly what the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) talked about--the obligation to move towards an ever closer union. For some of us that means a union with a unitary state, and the virtual elimination of the national option in the end.
Sir Peter Hordern:
So far as I am aware, the movement towards an ever closer union was part of the preamble to the treaty of Rome, so the House knew what it was doing when it signed up to that, and we must accept the consequences of having done so.
The other important point about sovereignty is the fact that we have been happy to share our sovereignty as a member of NATO for many years. The idea that we could defend ourselves entirely alone, without being a member of NATO, is ridiculous.
Of course, we have had the sovereign right to devalue our currency for a significant time--and a fat lot of good it has done us. Because of that sovereign right, we have seen our currency greatly devalued. When I first entered the House, there were 12 deutschmarks to the pound; I cannot remember the relative values of all the other currencies. We have seen an incessant fall in the value of the pound against the currencies of our major competitors.
All Governments depend on the ability to borrow money, and as a result of that devaluation there is no market prepared to lend money to this country other than at a higher rate of interest than that obtainable for stronger currencies, because the lenders know that our currency is likely to depreciate rather than to appreciate. Our sovereign right to devalue has meant in effect that we have had consistently higher interest rates than our competitor countries. All that has imposed a certain charge on industry and business.
There is something else that I must mention in connection with the single currency. As I shall go on to explain, I do not think that it would be practical, and for that reason I do not favour it. But are some people really saying that we should have no regard to the strength of sterling, despite our historic experience of being connected to the gold standard for 300 years, and also of being tied to the United States dollar for 25 years after the war, through the Bretton Woods agreement? Nobody accused Winston Churchill of surrendering our sovereignty in those years; it would have been absurd to do so.
We in the House must recognise the fact that it is quite likely that there will be a strong European currency among the core countries within the European Union, whether we like it or not. We must therefore concern ourselves with how that will affect our business and trade.
At the very least, the euro will be a formidable competitor for sterling, because it is bound to circulate freely within the countries. Some 40 per cent. of our trade is with Germany, France and the Netherlands, and it is likely that business will be contracted and settled in the currency.
I do not know how long it will take, but the euro will act first as a common currency in this country. After a long period, we may well find that it is preferred to sterling, partly because of pressure upon sterling and partly because it is likely that the currency will have lower interest rates than sterling if the criteria of the Maastricht treaty are abided by.
Whether we like it or not, it is likely that there will be a strong euro used by a core of strong countries. No matter how many referendums we have, the issue will be decided by consumer preference. Who can tell what will happen? Some people believe that the euro will never be used in this country, but I am not so sure. France, Germany and the Benelux countries will decide to introduce such a currency. We may think that that is not in their economic interests, but there is a strong political will for such a currency in those countries. We may not like it, but that political will has been there for many years. It is unlikely to desist just because we tell the countries that it is not in their economic interests to continue.
France and Germany are no less sovereign countries than the UK. If their Governments, Parliaments and people decide for political reasons that they want a single currency, there is--whatever treaties may say--not much that we or anybody else can do about it. We must look at reality and at what will happen in the future, and that makes it all the more necessary that we remain a full member of the EU. We must influence events as best we can in the form of a Europe of sovereign nations that recognises all the time the direction in which the most powerful nations wish to go.
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