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Mr. Deputy Speaker (Sir Geoffrey Lofthouse): Order. Time is up. I call Mr. Jimmy Hood.

6.35 pm

Mr. Jimmy Hood (Clydesdale): It is good that we are finally having this debate on the Floor of the House. The Select Committee on European Legislation, which I chair, thought the matter important enough to recommend that the three European monetary union documents be debated on the Floor. It is not something we do lightly, but nevertheless that was our unanimous recommendation, and we were confident that the House would endorse it.

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Unfortunately, the debate is not on a substantive and amendable motion as the Committee would have preferred, but I am not inclined to be too ungrateful to the Leader of the House. Indeed, in the Christmas spirit, I find myself somewhat sympathetic towards him and his right hon. Friend the Prime Minister, and perhaps even to the Chancellor, because it seems that, every time they see a light at the end of the tunnel, it turns out to be an on-coming Euro-sceptic train.

The Government's refusal to allow time for the House to debate the documents was bad politics. It was the bad judgment that flows from a Government who are directionless and void of a firm strategy other than to do anything to keep from self-destruction. The integrity of Parliament was in danger of being held up to ridicule. For that reason as much as for any other, my Committee was determined to fight so fiercely against the Government's refusal to sanction this debate. I should place on record my appreciation to all those hon. Members who supported my Committee by appending their names to our motion.

In the time available, I shall concentrate on three lessons of this whole affair. The first is the scrutiny process. The sixth report of my Committee, which was published on Monday, was listed on yesterday's Order Paper. It reminds the House of recommendations that we have made, which have been given a ringing endorsement by the present row.

I shall give two examples. First, we think that there should be a general agreement that, when the Select Committee recommends a debate on the Floor of the House, which we do sparingly, the Government should have to seek the House's approval before it can refer the matter to a Standing Committee. Secondly, we think that there is a strong argument--as the Chancellor's statements in this case have shown--for adapting the questions plus debate format of European Standing Committees to the Floor of the House procedure. I commend that report to the House.

In the summer, the Select Committee published a major report on all aspects of the scrutiny system--how it works, its strengths and weaknesses, and how it could be improved. We made a number of proposals to make it much more effective. The main thing that is wrong with the scrutiny system in the House is that it is not sufficiently well known by Members. The system provides endless opportunities for European issues to be examined in detail, both in the House and outside it, yet it is woefully under-used.

We do our job on the Scrutiny Committee every week, publishing our blue books of analysis and criticism, and we are right up to date: we were the first Select Committee to go on the Internet. If any hon. Members want to surf the Internet and find about European issues, they are welcome.

Scrutiny is not an end in itself. We are a bit of a burglar alarm: we can tell people when someone is trying to get into their bathroom window, but at that point it is up to hon. Members to do something about it. I hope that one positive result of the fuss of the past month will be to raise the profile of European scrutiny and to get people to use the process to its full potential. The report we published in July is an ideal handbook, and I recommend it to the House.

It is incumbent on me to assure the House that our scrutiny system compares well with those of other Parliaments in the Union. Some hold the Danish system

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up as the best, but I am not a convert to that view. It is fair to say that, had the Danes been dealing with those European monetary union documents, they would not have been able to have the reports that we had, or, indeed, to hold this debate on the Floor of the House.

The events of the past few weeks have hammered home the point that national Parliaments must have their own distinct voice in the Union. The European Parliament has a role to play, but it is a different role, and we should understand the difference. For two years, the Scrutiny Committee has been pressing for the role of national Parliaments to be enhanced. We have made a number of suggestions, some of which have fallen on deaf ears, but I hope that more ears will listen in the future.

A principal suggestion is that there should be a four-week notice period between all national Parliaments receiving the official text of any legislative or related proposal and the Council of Ministers being able to take a decision. Under our proposal, there would be time for scrutiny and debate, if necessary, in national Parliaments. We--and, more importantly, our constituents--would not be bounced as they have been in the past. I am glad to say that, in Dublin in October, at the Conference of European Affairs Committees, known as COSAC, we achieved unanimity in favour of our suggestion among the 25 committees attending.

Again, in the spirit of Christmas, I recognise the support that our proposal has had from both the Foreign Secretary and the Minister, who tabled the appropriate treaty amendment for the intergovernmental conference.

No decision taken by a British Government will be as important as the one on European monetary union and the single currency. The Chancellor was right yesterday when he pointed to the positive benefits of our membership, while others, most of them of his own party, are so hostile to Europe that they sometimes sound like, and appear to have much in common with, headless chickens.

It was sad that the Foreign Secretary, who spoke for 46 minutes today, spent 38 minutes trying to appease his party before he mentioned the Labour party. My right hon. Friend the shadow Chancellor made an outstanding contribution to the debate yesterday, as did my right hon. Friend the shadow Foreign Secretary today. My party is committed to Europe and to being at the heart of it. However, as both my right hon. Friends said, the convergence criteria must not and cannot be fudged. Real convergence of real economies will bring great benefits if the United Kingdom is involved.

If it is in our national interest to be in, and if our people would be better off in than out, the House will first take the decision to recommend that, and a referendum of the people will make the final decision. I only wish that those on the extreme nationalist wing of the argument would address our national interest instead of indulging in the depressing xenophobia that we have heard over the past few days.

I hope that the sound and fury of the past four weeks have taught us two useful lessons: the first about how we should deal with European matters now and in the future, and the second underlining the importance of national Governments in the process of European decision making. If we have achieved that, perhaps it has been worth while, but I suspect that nothing short of a general election and a new Government will resolve the matter.

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6.45 pm

Sir Terence Higgins (Worthing): It is a particular pleasure to follow the hon. Member for Clydesdale (Mr. Hood) and to congratulate him on the immense amount of hard work that he and the Select Committee on European Legislation do. He referred to the origins of this two-day debate, and I want to say a couple of things in that context.

The hon. Gentleman has a tremendous amount of work to do, and I am a little concerned by his 27th report, which refers to the suggestion that he might extend his operations into broader European matters than merely legislation. Such matters might more appropriately be dealt with by the Foreign Affairs Select Committee or, possibly, by a specific European committee. That is a matter that we will need to discuss.

At all events, it is clear that the current arrangements for scrutiny of European legislation, despite all the hon. Gentleman's efforts, are not satisfactory. It is right that he should act as a filter, but I think that the present system of European Standing Committees A and B does not work satisfactorily. I hope that, in the next Parliament, it will be possible to reconsider my suggestion that the departmental Select Committees with expertise in the area should have sub-committees of some of the members of the Committee concerned with the particular departmental matters and others from outside. Those sub-committees could then examine matters in greater depth, under the supervision, in effect, of the Scrutiny Committee.

I have a further procedural point regarding the 10-minute rule. We all understand why it is necessary to limit speeches to 10 minutes to allow more people to speak, but something extremely bad is happeningto Front-Bench speeches. Ministers and shadow Ministers are giving way far too often--the old tradition was to give way once, twice or, at the outside, three times--with the result, both yesterday and today, that, while Front-Benchers have been on their feet, we have been engaging not in debate but in conversation. That is not good for the House.

I believe that the Government's policy, of first negotiating the opt-out from the single currency and then maintaining the option, is right. If we were to say at this stage whether we intended to join, that would seriously diminish our ability to negotiate, and that would be extremely bad, because we need to exercise our influence. I do not understand those of my right hon. and hon. Friends who want to take what I view as a premature decision on the issue, given that we have the opt-out, because that would reduce our ability to shape Europe in the way we would like.

I am even more puzzled by the way in which many of my colleagues are creating dissent to an extent that could well lead to the election of a Labour Government, which would have precisely the result that those who take the most sceptical attitude to Europe say they are most determined to prevent. That is an extremely important point.

We must consider what the Chancellor and the Prime Minister and the others involved in the negotiations ought to achieve. Much attention has been paid to the convergence criteria. There is already a great deal of fudge about them, not least in respect of the debt-GDP ratio, as well as the actual deficits. The Chancellor said yesterday that we must worry not only about the

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arithmetic but about whether there is genuine convergence. I do not believe that there is; nor do I believe that it can be achieved in the time scale that has been set. As I have stressed before, there will be a core currency, not a single currency. If countries go ahead without having had convergence over any length of time, the system will break down and they will have to consider how to get out of the core currency.

There will be a period in which the euro will operate alongside other currencies. That will be period of frightful trauma if countries have gone ahead without adequate convergence. Countries are seeking to achieve convergence by repressive measures. We have only to watch television to see people in various countries protesting about measures that are designed to enable them to enter a single currency. If those countries lock themselves into a core currency, the tensions will go on indefinitely. The strains will be such that those countries will not be able to maintain the currency. I hope that the Government will stress in the negotiations the problems of proceeding in that headlong way, which I believe will result in disaster.

It may be that the countries in a single currency will succeed in keeping it going, but if they do, the German idea that the euro will be as strong as the deutschmark is absurd; it clearly will not be. If we get what I have described previously as a camembert currency, with a soft centre, the euro will go down and we will be left with le pound fort. That may give cause for concern in respect of competitiveness, but it may also have advantages.

If countries go ahead with the single currency, there will be the question of the rate at which each country joins. There have been comparisons with the gold standard. We should remember what happened when Winston Churchill took us back on to the gold standard at the wrong rate. If countries go into the core currency at the wrong rate, it will cause serious problems. I hope that the Chancellor will bring home to our European partners the dangers of going ahead in the way they seem to be going.

The speech of the shadow Chancellor yesterday was deplorable. He was more concerned with rumours about conversations that might have happened in some cafe than with the substance of the issue. On the stability pact, the word "fines" did not once cross his lips.

I am seriously concerned about the matter. Historically, parliamentary democracy rests on the control of money: the right to raise taxes and control expenditure. While I do not accept all the arguments about a reduction in our sovereignty, I am worried about fines. They are a negation--a take-over--of sovereignty of a different order. We will have a supranational authority which automatically, or without our consent, could impose fines on us. Comparison has been made with German reparations after the first world war.

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