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Madam Deputy Speaker (Dame Janet Fookes): Order. Before I call the next hon. Member to speak, I remind the House that speeches will be limited to 10 minutes from now on.
7.12 pm
Mr. Tim Renton (Mid-Sussex): I shall disappoint the hon. Member for Ross, Cromarty and Skye(Mr. Kennedy) because my speech will be the third consecutive speech from a Conservative Back Bencher in favour of Europe and of our remaining at the heart of Europe. I have no doubt that that fact, despite the ten-minute Bills and the vocal noises made by the Euro-sceptics to whom the hon. Gentleman referred, reflects the true opinion of the majority of Conservative Members.
My right hon. and learned Friend the Foreign Secretary has left on his plane for Florence, and I am sure that he goes with all our good wishes for a solution to the beef crisis in the IGC that starts tomorrow morning. In the minutes allotted to me, I shall make only one comment about the beef crisis, which is that I feel deeply sorry for all my right hon. Friends who have been involved in trying to solve it. It is a classic case, in which both
scientists and politicians are involved. Scientists do not know enough about politics and politicians do not know enough about science. The world public distrust both.
I stress the word "world". We have got used to the concept of the globalisation of interest rates and the fact that what happens in Tokyo tonight will affect London tomorrow morning and New York tomorrow afternoon. The beef crisis has taught us about the globalisation, or world worry about health problems. Thanks to CNN, Sky and BBC Worldwide, from the moment that the Secretary of State for Health spoke in the House three months ago, fewer Russians went to McDonald's in Moscow and Japanese housewives switched from beef back to traditional diets of fish. The origin of the beef did not matter.
In the sad beef affair, one headline in one of the tabloids made me laugh. The headline was in the Evening Standard early in the crisis and it said simply "Britain cuts off continent". What a marvellous, out-of-date, totally antediluvian thought. It is impossible now, of course, for Britain to cut itself off from the continent. As Russia found in eastern Europe, walls and barriers no longer work. I shall spend the next few minutes on that theme.
In recent months, I have met business men and politicians from France, Sweden, Germany and Italy. I have noticed that every one of them expects economic and monetary union to happen. Without exception, they look forward to it and they are not worried about the effects on their national Parliament or on national sovereignty. The likely scenario for the next three years--from now to the millennium--is an unchangeable process towards a single currency.
The single currency will start in 1999 and--I am even more positive about this than my right hon. Friend the Member for Horsham (Sir P. Hordern)--when it starts, Benelux, France, Germany, Austria, Ireland, Spain and Portugal will all join and Italy will be in the wings waiting. From the moment that that happens, the relations between those in the single currency and those outside it are bound to be somewhat strained. For that reason, people such as Mr. Lamfalussy of the European Monetary Institute are now talking about a second exchange rate mechanism or stability pacts to govern the relations between those in and out of economic and monetary union.
I believe also that we shall have a referendum on the single currency in 1998, which will turn into a referendum on the principle of our membership of the European Union. If the result of the vote is no to joining EMU, which will be assumed to be binding on us for 10 to 20 years--as the Norwegian no was--our Euro-partners will lose patience with us, and they will cease trying to accommodate us.
The net result will be that, whatever the official treaties say, the directives that are important to us, such as the investment services directive, will start to be tweaked to our disadvantage. Those at the heart of the European Union and EMU, using phrases such as, "provided that it is in the long-term interest of the European Union" or, "subject to the public interest" will find ways to use those directives to our disadvantage. Those ways will probably be like the Poitiers solution, which was, as the House will remember, the French way of allowing Japanese videos
into their country. They sent all the videos to Poitiers, which has no customs officials, so the videos languished there in a warehouse for a long time.
The disadvantages will grow and the effects on us as an international exporter will become increasingly severe. Sterling long-term interest rates will be subject to devaluation and fluctuation and will be 2 per cent. higher than Euro-interest rates. My right hon. Friend the Member for Horsham made that point earlier and he will know, as I do, that French long-term interest rates are now already lower than British long-term interest rates, simply because it is expected that the franc will join the euro.
The non-social costs and the non-productive costs for manufacturing industry in the United Kingdom will be about 3 to 4 per cent. higher than those for comparable industry in the economic and monetary union. Those figures were given to me just yesterday by a leading business man with factories throughout the European Union, who was deeply worried that companies such as his would, in a few years' time, be centring their activities on countries that they know are, and will remain, at the heart of Europe. That is something to which those who do not believe in our membership of the European Union--the Euro-sceptics--will have to face up. At that stage, the withdrawal of Britain from the European Union could become a possibility. That would be disastrous for investment, employment and economic growth in the United Kingdom.
Meanwhile, as my right hon. and learned Friend the Foreign Secretary said, our partners in the European Union are going ahead and preparing the modalities for making the single currency happen--a report on that will be presented to the IGC. They believe that the euro will allow maximisation of advantages in the European Union. Although, as it has been put to me, we now have the free movement of people and services, there still remains the barrier of exchange rates, which is costly. Within EMU, there will be better control of non-productive costs and Europe will be more competitive in world markets.
The link between the European single market and monetary union is a logical consequence of the single market. With the free circulation of capital that we and our European partners now insist upon, monetary policies cannot remain independent of each other. That reasoning lies at the heart of the adoption of Maastricht treaty. The single market is not compatible with monetary instability, and it is to avoid monetary instability that monetary union will come into place. As we have seen in recent years, exchange rate depreciation by some inevitably leads to protectionist measures by others.
Therefore, the challenge for those on both sides of the House who believe in Europe is now to consider the possibility of EMU with an open mind and to believe in an even more successful and complete single market, in which we in Britain can prosper to an even greater extent than we do at present.
I shall end by reminding the House of the words of John Donne. He said:
Mr. Giles Radice (North Durham):
The right hon. Member for Mid-Sussex (Mr. Renton) will not be surprised to learn that I very much agreed with what he said. However, I do not want to follow him on this occasion, but wish to say some words about the beef crisis and what we have learnt from it.
I, like other hon. Members, hope that the Government will be able to take away from Florence a framework for taking the measures necessary to ensure the safety of British beef, to restore consumer confidence across Europe and, eventually, to remove the ban on British beef. I entirely understand and sympathise with the position of my right hon. and hon. Friends on the policy of non-co-operation. During the crisis, they did not wish to be accused of undermining the Government's position, as they certainly would have been had they adopted the policy suggested by the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy). There is an argument for saying that the policy helped to concentrate minds--I suspect that it concentrated the minds of British Ministers as much as the minds of the continentals.
The Government's handling of the beef crisis, especially the policy of non-co-operation, could do lasting damage to our relations with our European partners. As hon. Members have reminded us, it is a British problem and not a predominantly European problem. There have been 150,000 cases of BSE in this country and, as I understand it, there have been about 400 cases in all the other member states combined, which illustrates that it is a British problem. Given that fact, given the single market and given the impact on consumers across Europe and on the European beef industry, it is not surprising that other countries feel entitled to hold a view on what we are doing to eradicate BSE. That fact must be clear to all hon. Members.
I fear that, as the Commission said, the Government did too little, too late to deal with the problem of BSE. As my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) said, the Government mishandled the announcement of the news that BSE might be linked to CJD. The first that the Europeans heard of it was when it was announced to the House by the Secretary of State for Health, so it is not surprising that they reacted as they did.
If the framework is agreed at Florence, will it be because of the non-co-operation policy? That is what the Foreign Secretary claims, but I am sceptical. Curiously enough, there has been some impact on our own policy. As has already been said, we have now produced a policy to eradicate BSE that we have explained to our partners. Most important, the Foreign Secretary, the Minister of Agriculture and others have been visiting the European capitals in the past month in the way they should have been doing in the previous two months. That is why we are now heading towards a solution. Those visits have been much more important than the non-co-operation policy.
As some hon. Members have said, the irony is that we have been relying on the much-hated Commission to pull irons out of the fire. It has been the European Court of
Justice to which we have appealed when we have been in trouble. It is the qualified majority vote in the Council of Ministers on which we shall rely when we want to win our case. Some countries may vote against us, but we shall need a majority. It will be European compensation that will help our farmers. For those reasons, the framework of the European Union is helping us to solve the crisis in a way that would not happen if we were dealing with the 14 different nations individually.
Of course, the policy comes at a cost. I understand the position of the Labour Front-Bench team, but there has been a cost. That cost has involved the 73 measures that have been vetoed in the Council of Ministers. Those measures include many policies dear to many hon. Members: anti-fraud measures; cutting red tape in Europe, which hon. Members say is so important; and agreement on the Europol drugs unit and action against terrorists. The list of measures that we have vetoed looks pretty ludicrous when one starts to examine it.
The cost to us is also that we are now isolated. As I travel round the capitals of Europe, I cannot remember a time when the United Kingdom's reputation has been so low. I sometimes feel ashamed of our position and of being a Briton in these circumstances. The Prime Minister talks about flexibility on the European issue and flexibility inside the European Union, but the problem is that the others are thinking of inserting a flexible clause into the treaty that they will use to go ahead without us. That is the great problem and the danger--the French and Germans have already been talking about it. It is a reaction to us and to the fact that we are seen as negative and carping. There is a major problem in terms of our long-term relationship with the EU, and the question is whether we have damaged it even further by what has happened with beef.
One good thing, however, has come out of the crisis. Hon. Members have rightly talked about the appalling way in which the press, particularly the tabloid press, has behaved; but more important is the fact that many of the Euro-sceptics have shown their true colours and admitted that coming out of the EU is on their agenda. Some hon. Members will shake their heads. The right hon. Member for Kingston upon Thames (Mr. Lamont) and the hon. Members for Southend, East (Sir T. Taylor) and for Thanet, North (Mr. Gale) are honest, but others called for such things as repatriating many policies to Westminster, reasserting the primacy of British law in all cases, eliminating or emasculating the Court of Justice, abolishing direct elections to the European Parliament, opting out of the British fisheries policies. Those policies are not compatible with membership of the EU.
"No man is an Island, entire of it self; every man is a piece of the Continent, a part of the main; if a clod be washed away by the sea, Europe is the less".
We should not approach the future of the European Union, and economic and monetary union within it, with pessimism or despair; we should not be driven back into
insularity and nationalism. We should approach the future of the EU with vision, hope and passion, believing that that is where our economic success lies.
7.22 pm
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