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Mr. Nigel Spearing (Newham, South): No.

Mr. Gapes: Yes. There will be costs that will damage our trading relationships if we take that course to its logical conclusion. The logic of the Euro-sceptic position is, "We don't like foreigners, especially Germans, and we do not want anything to do with them." I see that the hon. Member for Billericay (Mrs. Gorman) agrees with that.

Mrs. Gorman: It was my hon. Friend the Member for Welwyn Hatfield (Mr. Evans).

Mr. Gapes: I apologise to the hon. Lady if I have maligned her.

The positive Labour case for a single currency was put forward in the pamphlet that 14 Labour Members published in September. It is worth reading. Conservative Members have also written pamphlets: the hon. Members for Stamford and Spalding (Mr. Davies) and for South Derbyshire (Mrs. Currie) and others have written in support of a single currency from a different philosophical point of view. At least they recognise that Britain cannot say, "Stop the process, we want to opt out," because, at the end of the day, it is going to happen. There will be a single currency. The question will be whether we want to be in at the beginning, influencing the way in which it develops, whether we try and fail, as we will undoubtedly will, to sabotage it or whether we sit it out and damage our economy and the future prosperity of our people.

7.24 pm

Sir Wyn Roberts (Conwy): I am bound to say that the European Union issue, symbolised by the single currency, is the biggest that has confronted the country for some time. It looms ever larger as European intentions and the choice that confronts us become clearer. Opinion in Britain is sharply divided, and that is reflected in the House. The division cuts across party boundaries, so the House has become a parade ground for statements of personal beliefs, which are often strongly held. Some of us may feel that we have a surfeit of drill sergeant-majors shouting at us from different quarters of the parade ground introducing confusion into the ranks. Be that as it may, it seems that the choice before us--certainly from this debate--is whether to become more deeply involved in the European Union and pay the political price that that entails, or to preserve such independence as we have and possibly assert it more strongly as circumstances permit.

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The ultimate determinant of our choice must be the future economic and political well-being of our people. Without political freedom, we cannot properly exercise economic self-control. Of course, we are reluctant to give that control to people outside this country and our democratic process. In these matters, I tend to follow my right hon. Friend the Member for Mid-Sussex (Mr. Renton) and take a historical approach.

Although we have lost our empire and not yet found a role, as Dean Acheson put it in his damning dictum of the early 1960s, as a people we are still imbued with the imperial spirit; we like to get our own way in the world. However, it is becoming increasingly clear that we are not getting our way in Europe. Perhaps, as my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath) said, it is because we are not pressing our views hard enough.

We envisage Europe as a vast free trading bloc in which we can continue to flourish. But that is not the prime objective in the eyes of the European political elite, as Jacques Santer, the President of the Commission, made clear yet again only last week. Its main thrust is towards greater political unity. That comes from Germany and France, and Germany in particular. It seems that there is no stopping them.

Chancellor Kohl said that the Union is about war and peace in the 21st century; he may well be right. The Germans certainly distrust themselves, and with two world wars behind them I suppose that they have good reason. Perhaps they can see foresee troubles on their extensive eastern and southern frontiers and want the moral and military power of Europe behind them in resolving any difficulties that may arise. That is understandable from their point of view. But what is the British interest in all that? We have learned from our participation in two world wars that we have an interest in the preservation of peace in Europe, but historically our ability to influence developments and events in Europe is limited, especially without the backing of the United States. Any thought that we can do so independently is illusory. We are an island, not a continental power.

We also have our eyes on the rest of the world, especially those parts of it where we have traditionally exercised great influence. It is a fact of life that the most promising prospects of economic growth in the next century lie outside Europe in Asia and the emerging markets elsewhere. As a trading nation, we cannot afford to be confined and tied down by our European involvement, as will inevitably be the case. So the challenge to us now is to keep our foothold in Europe, reaping such economic advantages as we can at the least possible political cost. We certainly cannot afford to endanger that 60 per cent. of our trade which is with Europe. Nor can the European countries afford to lose their trade with us. We certainly cannot afford to lose all the foreign investment that has come here on account of our membership of the EU and the single market.

The Government have a difficult task in ensuring that our future remains unshackled and that any opt-outs that we secure are respected and not eroded. The "wait and see" description of the Government's policy is a misnomer. I believe that the Government are in there fighting for British interests, and they must continue to do

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so as vigorously as possible. It may often look like a rearguard action because of the considerable extent of our involvement to date and the way in which we have been drawn in ever closer to the European vortex which so many of us find uncomfortable.

The pledge that no irrevocable commitment to a single currency will be given without a referendum--a pledge that has been belatedly reciprocated by the Labour party--should provide sufficient reassurance. I cannot agree with my colleagues who would like the Government to commit themselves in advance to blocking out a possibility which may or may not materialise and, if it does, might profoundly affect us, whether we are in or out of the single currency and what I call its accoutrements--the central bank and so on. Our negotiators must not be sent naked into the conference chamber, to adapt a phrase that may still be familiar to some. We really must trust my right hon. Friend the Prime Minister and my right hon. and learned Friend the Chancellor, who will report to the House at every stage.

One thing seems certain. The Leader of the Opposition and new Labour are more committed to more of the European agenda than is the Conservative party. I am not talking only about the social chapter. There is a pseudo-socialist ethos to present-day Europe and my guess is that new Labour is comfortable with it. The idea that primacy should be given to Britain's interests as a trading nation does not sound quite Labour's line. It may be antipathetic to them. I believe that new Labour would willingly throw in its lot with the other European nations in the Union and hope for the best, which might well be made attractive to the mass of British electors in the short term.

We should take a long-term view of British interests. Wages and standards of living may be low in the emerging markets now, but they will not always be so. We know that those markets can develop. We must not only face up to their competition but supply those expanding markets. Just as the European Common Market beckoned us in the second half of this century, the global market is beckoning us now, as we approach the next century.

I think that I have made my position clear. I hope that we stay in Europe and safeguard British interests there. At the same time, I hope that we are not so closely bound up with Europe that we are unable to take full advantage of the burgeoning opportunities in the world outside.

We must not get so involved in the detail that we lose sight of the principles that should govern our policies. Politics and economics are inextricably intertwined in this situation and there is no clear dividing line. There is an element of give and take and our job is to ensure that the take is more substantial than the give, not just for the present--

Madam Deputy Speaker (Dame Janet Fookes): Order.

7.34 pm

Mr. David Winnick (Walsall, North): It was reported recently that at the time of the Maastricht treaty the Prime Minister did not believe that the other countries were serious about the third stage of EMU. If that was the position, I am rather surprised. It is spelt out clearly on

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page 87 of the Maastricht treaty. The leading and founding countries of the European Union have always wanted to proceed to deeper integration. Britain has always made the mistake, whichever party happened to be in office, of underestimating the deeply held and far from secret wish of those countries, particularly France and Germany, for deeper integration. So it comes as no surprise to me that the leading countries which have signed the treaty on the third stage of EMU now wish to proceed as quickly as possible.

Nor should we work on the assumption that when those Governments argue and press for deeper integration, they are necessarily out of step with most of their electorates. I have been pleased and encouraged by the demonstrations that have occurred in a number of European countries. I do not know whether some of my hon. Friends who are very keen on the third stage of EMU believe that those protests and demonstrations--today in Spain and recently in France and Germany--against convergence and what it implies have been justified. I believe that they have been because it has meant large cuts in public expenditure and services.

Some Conservative Members argue that we should not take too seriously the convergence criteria and the rest of it. I accept that there is a good deal of fudge, but the fact remains that many public expenditure cuts have been made on the continent to meet the criteria. Hence the reason for the protests, led in almost all circumstances by trade unions.

One of the ironies of the political situation in Britain is that the sorts of policies to which I am opposed in so many respects are precisely the policies of which the Euro-sceptics in the Conservative party are usually in favour, including strict economic and fiscal discipline, taking the axe to public expenditure and continued privatisation. Conservative Members who have been critical tonight have described what they called a pseudo-socialist Europe, but such policies are hardly what I would describe as socialist or on the left. It is understandable that many of us have the deepest reservations about pursuing those policies.

One of the differences of view about deeper integration between the continental countries and Britain is that most people in Europe probably believe that it will reduce substantially the chances of another European war. That is why I said earlier that I accepted that when national Governments on the continent pressed for deeper integration, they were not necessarily out of step with their electorates. It is a view sincerely held by people. I do not believe--I want to make this clear--that EMU or anything connected with it is a deep German plot to carry out economically what they could not carry out militarily in the past two wars. That view is alien to my thinking and, I imagine, to that of almost everyone in the Labour movement.

I do not however take the view that European peace is dependent on a tightly integrated Europe. On several occasions, it has been said that stable democracies rarely go to war against each other and that is true. I cannot accept the view expressed by the hon. Member for East Lindsey (Sir P. Tapsell), who I understand was reported

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as having said, at the last meeting of the 1922 Committee, that this is another 1940. Despite all my reservations, I do not believe that this is another 1940.

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