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Mr. Jessel: Will my right hon. Friend give way?

Sir Norman Fowler: I should love to give way, as my hon. Friend knows, but I cannot.

When Commissioner Flynn spoke about the working time directive, he said not that it was good for health and safety but that it was good for social Europe. One of the crassest statements ever made by a senior political figure was the statement by President Santer, who warned against

Working hours are not the only social issue. The issue of immigration control and frontier control is once more raising its head. Any change on that would be unacceptable to Parliament.

My views, like those of my right hon. Friend the Member for South Norfolk (Mr. MacGregor), are not the views of a long-term Euro-sceptic. I sometimes feel that, in my two years as party chairman, I spent most of my

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time in conflict with those who are regarded as Euro-sceptics. Nor am I particularly influenced by foreign-owned newspapers or foreign-based politicians. I am influenced by the way in which I see the views of middle England developing. I see a marked shift of opinion against the European Union. That must be recognised.

Politicians in other European countries may not appreciate the great resentment that has built up in Britain about the unnecessary interference in our affairs. Politicians in other European countries may not agree or even care, but they should understand what is happening. They should not believe for a moment that, if there were a change of Government, the public mood would change overnight. The public mood would not change.

We are reaching a critical stage in the debate on many European issues--the hour of truth, as my right hon. and learned Friend the Foreign Secretary called it. The real question now for the public is which party has the will, courage and determination to fight on these issues and to stand up for British interests. We know, because they say so, that the Opposition will abandon the social chapter opt-out and embrace the working time directive. We know that they live in fear of being in a minority of one in European debates. Labour was totally opposed to Europe at one stage, and it now exhibits the weakest characteristics of the European convert. The Conservatives want a Europe of the single market with maximum power devolved to individual nation states.

With humility, I say to my hon. Friends: we must decide whether we are content to carry on the internal debate or enter the real debate between the two sides in the House of Commons. The divisions on our Benches--I emphasise that they do not exist only on our Benches--will aid the election of a party whose Front Benchers adopt a view on Europe that is entirely alien from our own. We would not be easily forgiven if we allowed that to happen, as we would hand over control of British politics on Europe at a vital time in our national history.

7.50 pm

Mr. Ken Livingstone (Brent, East): The current confusion in Britain arises partly from the fact that, for the best part of the past four years, the anti-European factions in British politics have made all the running. As the opinion polls have started to shift against the European project--the latest polls show a 50:50 split on the issue of remaining in Europe--those politicians who favour European union have kept their heads down rather than risk alienating marginal voters.

From the beginning, the European project was treated as the creation of a federal Europe--a united states of Europe. Its motive in the late 1940s and early 1950s was the desire to avoid another great European war. However, by the mid-1960s, that desire was no longer at the forefront of political thinking. Most people who now pursue the dream of a federal Europe--and I am one--see that as the only way in which Europe can defend its economic interests against the vast economic empire of the United States of America, which has created its own free trade association whereby it uses the mineral resources of Canada and the cheap labour pool of Mexico, and a much looser arrangement whereby Japan works with a succession of south-east Asian nations using their cheap labour.

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We cannot avoid the fact that the rest of Europe will create a united states of Europe--although it may take a generation. The simple issue before the British people and the House is whether we wish to be part of it or whether we shall stand outside it. The creation of a united states of Europe is not a German plot: it is led by economic forces. We must create an economic bloc that is capable of fighting for markets and of challenging American interests around the globe. That desire is not fuelled simply by nationalism. The world economy has developed in such a way as to necessitate economic blocs the size of North America or Europe in order to generate the economic strength to operate in the global market.

For example, we can no longer choose between half a dozen competing car firms within one nation. With the technologies of the future, it will be hard to sustain more than one or two major competitors in any area. At present there is room in the world for only one microprocessor producer, the Intel Corporation. The Microsoft company predominates in the personal computer operating systems industry. The world is able to sustain only two large civilian aircraft producers: Boeing and European airbus. Economic forces are driving Europe to create a genuine economic bloc, and they will ensure that the process of European union goes ahead, whether we like it or not.

The British people have been lied to by successive British Governments, who have told them that European union was just about trade and not about creating a united states of Europe. They claimed that the reasons were simply economic, whereas European statesmen and women from the left and the right talked openly from the beginning about creating a united states of Europe. Britain faces a choice: there is no future for an advanced capitalist society such as ours outside the great trading blocs. If we are not part of the European bloc--where we could be equal leaders with France and Germany--we will have to play a completely subordinate role in a relationship with the United States of America or Japan, which is even less likely.

That is why the Conservative party is torn apart--it is not a question of the Conservatives not liking Germans. Running through the Conservative party is a strong commitment to a global leadership alliance with the United States, the origins of which date back to the second world war and to the alliance between Churchill and Roosevelt. A smaller split of that nature exists on the Labour Benches. I am struck by those Labour Members of Parliament who genuinely resist the European Movement--as opposed to those who have some doubts about the Maastricht treaty or the timing of monetary union. It is hard to find any Labour Members under the age of 60 who are anti the European project, but there is a small handful of Labour Members whose thinking was shaped by the second world war and events of that period. I cannot think of one hon. Member elected to the Labour Benches in the last three intakes who is genuinely anti-Europe. I do not wish to smear anyone or cast aspersions: that is the reality.

At Question Time on Tuesday the Prime Minister claimed that there were equal divisions on both sides of the House, but that is not so. I voted against the Maastricht treaty. I am in favour of a common currency, but I want to ensure that we get the timing right. The debate within the Labour party is about getting the timing

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right and not repeating the mistake made by the then Chancellor of the Exchequer, the present Prime Minister, who took us into the exchange rate mechanism at a grossly overvalued level and precipitated the worst recession since the 1930s, which wiped out 10 per cent. of our manufacturing industry. They are vital issues: we must get the timing and the exchange rate level right and so on.

I think that the Bundesbank established a series of economic policies and constrictions that had appalling consequences across Europe. It did not do so deliberately: it is not wicked. The ideologies that fuel the Bundesbank are the fear of inflation and the terror of recreating the circumstances of Weimar. That society saw the collapse of its financial policies open the way to Nazism, and I can understand how that has a strong effect on the formulation of fiscal and monetary policies.

The problem is that the tight economic policies that the Bundesbank imposes on Germany and which set the standard for the rest of Europe are creating long-standing resentment and social upheaval. We have seen unrest erupt on the streets of France and a pro-fascist party receive 25 per cent. of votes in Austrian elections. Europe should say to the Bundesbank, "Your policies are making the prospect of monetary union difficult and unworkable". Anyone who travels by train--when it is running--to Paris, walks into the first cafe and orders a coffee and a croissant which costs the equivalent of £5, will realise that the franc is grossly over-valued.

Monetary union must be based on realistic policies rather than over-inflated exchange rates. The franc is locked into the same nonsense that we were locked into on the exchange rate mechanism. It is causing high unemployment. I am concerned that the ham-fisted and bureaucratic way in which the Bundesbank has led Europe towards monetary union runs the risk of derailing the project and setting it back years. It is nonsense to talk about monetary union based on a fusion of the franc at its present level with the deutschmark. The franc must be devalued, and perhaps the project should be put back to 2002.

Britain will certainly need that extra time, as the shambles that we shall inherit next year will not be turned around in 18 months. By the end of a Labour Government's first term, the British economy could have reached the levels of investment and competitiveness that would allow us to be part of a monetary union without suffering dire consequences. That is the debate that we are having on this side of the House: it will not tear us apart, and it will not cause a split in the Labour party. It is a debate about technical issues. Therefore, it is nonsense to say that there is a split that runs through the parties, and this is of an equivalent nature.

I remember that, at the age of about 16--when I was not at all terribly interested in politics; I was trying to rake up newts from the pond most the time--the first political idea that ever appealed to me was when Macmillan applied to take Britain into the Common Market, as it then was. I remember being excited about that, because I do not feel anti-European.

I heard my hon. Friend the Member for Newham, South (Mr. Spearing) say that this is not about a unity of peoples but a unity of laws. That is not the case for my generation. I feel happy when I meet people in Madrid or Munich. I feel at home with Europeans of my generation. I do not

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feel that there is something that makes me different or sets me apart from them. I look forward to the day when we get a proper united states of Europe. I hope that we see it in my lifetime, but there is no way for Britain--

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