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Mr. Cash: My hon. Friend puts the matter well, and he is dead right. The problem is that, throughout the House, in the nation as a whole and elsewhere in Europe, concern has built up since the Maastricht treaty. That should lead us to re-evaluate the decisions that were taken at that time, but nothing is being done about that. I shall come to the mechanism that I propose to get renegotiation going. Everybody knows that the system is going ahead. Although the federalists are winning, there is a general protest that, somehow or other, we are doing something to stop the process. Some effective discussions are taking place, but they are neither negotiations nor renegotiations.

The Foreign Secretary--who, as I said, realises the importance of the issue--proposes to engage in a European tour, to explain to the peoples of Europe what is at stake. I entirely agree that we should do so. For what it is worth, for the past few years, I have spoken in Germany, France, Spain, Denmark and in other countries in Europe, at meetings and--as some may have noticed--in the media. The people of Europe are very receptive to the arguments.

I was very much encouraged by the Prime Minister's excellent interview with Hugo Young in this week's issue of The New Yorker, in which he rejected the idea that the United Kingdom would ever allow our right to determine our own electoral priorities at general elections--the very point made by the hon. Member for Blaenau Gwent (Mr. Smith)--to be handed over to an unaccountable European central bank. As I have often asked--I asked the then Foreign Secretary, during the Maastricht debates--what could be more centralising than a central bank, despite the Government's and the Opposition's

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claims at that time that the Maastricht treaty was a decentralising measure? What could be more centralising and undemocratic than a central bank?

Mr. Dalyell: I had better say that my question is based on the point of view that we should enter into the single currency at the first possible opportunity. Having been candid about that, may I ask the hon. Gentleman to be candid on another matter? How would he and his friends react if the Foreign Secretary of Germany or of France came to London, Stafford, Edinburgh or wherever, giving lectures on what we should do? What on earth would he say? What does he think that the Germans, the French and the Italians will say when our Foreign Secretary goes round Europe lecturing them on what to do?

Mr. Cash: I am delighted that the hon. Gentleman has made that point, because, only a short time ago, Klaus Kinkel effectively said that he thought that the British people should vote for the Labour party, as a soft option--which is precisely what it is. I hope that those following the debate will take that point on board. The tour shows considerable determination and a desire to get the issues out into the open.

Are we a European Community or are we not? The hon. Gentleman may wish to reflect on that point. If we are a community, and if the decisions being taken within the developing legal framework equally affect us and others, we have an absolute right--as I said when I went to Denmark for its referendum debate--to get in there to put our point of view. Otherwise, we shall be only affected by the debate, which relates to my concern about so much majority voting in European government.

Earlier this year, I went to France and gave a speech to a thousand Frenchmen from across France.

Mr. Duncan Smith: Did my hon. Friend speak in French?

Mr. Cash: After I had spoken to them in French--which surprised them as much as it surprised me--they gave me the most tremendous reception. The speech was shown on "Panorama". Those people listened, because they know that their destiny is tied to ours.

How then do we resolve the contradictions? We do so very simply. We have the inalienable right--in line with the Prime Minister's comments in the interview--to put on the formal agenda the issues of a single currency and extension of the doctrine of flexibility. We should combine those issues with the issues of flexibility and the veto, and then, at the intergovernmental conference, take the issue of political principle into the heart of Europe. We should then combine the Foreign Secretary's approach with the Prime Minister's interview, and confront Chancellor Kohl and the political elite of the European Union at the IGC with the democratically expressed views of their own people and their media. If they subsequently did not listen, we would have to veto the entire conference.

The issues are causing much turbulence across Europe and much difficulty for the electorates of Europe. We would get a tremendous reaction from across Europe if we were not merely to walk around Europe speaking to single audiences here and there, but, as a function of government within the IGC, if we were formally to seek

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to renegotiate the treaty by putting those issues on the agenda. Individual Governments and the leaders of the member states would then have to respond to the internal democratic pressures being exerted in their own countries. That proposal should answer the question of the hon. Member for Linlithgow (Mr. Dalyell) on whether we would be interfering in the affairs of other member states by raising the issues, as the Foreign Secretary is quite rightly proposing to do.

The Foreign Secretary, in raising those issues, will be participating in the European Union and in the European Community. Moreover, if we put the issues on the IGC agenda, the people in individual member states will rise up--as they are already rioting in some countries--against the political elite, forcing it to change the treaty so that it is in line with the people's wishes. There is no other way forward. If we do not raise the issues, we shall simply be helping--despite our protestations to the contrary--to create and even to encourage a federal Europe.

We must take a stand, and let the electorates of Europe have their own say--with the intense media interest that that would generate--as they move towards their own imminent elections. Consider the effect of Britain taking a lead in the IGC--as the Pandora's box is opened--on electorates across Europe. Opinion polls in the UK, Germany, Denmark, Sweden and Austria already prove my point. There are riots and disorder in France and Greece. As the Maastricht criteria bite ever deeper, so my case will be proved. If we took a stand before our general election, whenever it takes place, our prospects would be transformed.

The March 1996 White Paper, however, pointed in exactly the opposite direction. Paragraph 12 stated:

"Revisions to the Treaty must be agreed by all. We must be realistic therefore about the sort of changes we can hope to achieve at the IGC, just as we are clear about the sort of changes we will not accept."

It goes on to say that, if we do not do so, an integrationist agenda will be imposed upon us. Such an agenda cannot be imposed upon us. However, we can put the items on the agenda for renegotiation.

The central and hopeless passage in the White Paper states:

"If we were to press ideas which stand no chance of general acceptance, some others would seek to impose an integrationist agenda which would be equally unacceptable from our point of view."

As I have said before, the White Paper is a monument to appeasement. It was endorsed by the Leader of the Opposition, who would not oppose it. The White Paper also endorses the principle of flexibility, promoted by the new paper of 16 January, from the presidency of the European Union, in line with the conclusions of the reflections Group. My hon. Friend the Minister of State, Foreign and Commonwealth Office no doubt thinks back to his time as a participant in that group.

Paragraph 12 of the White Paper states:

"It is on this basis that the Government will be approaching the"

intergovernmental

"Conference."

It goes on to say that there is no serious or real prospect, and that it is not "expected", that the single currency issue will be on the IGC agenda. I do not care whether it is

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"expected" to be on the agenda. I am saying, for the reasons that I have already given, that it should be on the agenda.

There are merchants of doom, who see no way out at all; and there are merchants of despair, who subscribe to paragraph 12. A prime example of the merchants of despair is my right hon. Friend the Member for Watford (Mr. Garel-Jones). I invited him to come to the House to listen to what I have to say. I doubt whether he is interested and I do not know where he is at the moment. On 26 January, writing in the Sunday Express, my right hon. Friend falsely accused me of being "Europhobic". I suggested that he be here today because I am replying to him. In the newspaper, he is described as

"one of the Prime Minister's closest friends and advisers"

who

"calls for a Conservative pact with Labour"

on Europe. From the article, he seems to be comfortable with the Labour party on this subject, and he advocates a single currency.

I repudiate the proposal of a pact with Labour, and I repudiate my right hon. Friend's ludicrous assertion that I am Europhobic; my speech and my record show that I am not. My right hon. Friend should know that perfectly well because he was, after all, the deputy Chief Whip and he was the Minister with responsibility for Europe. I trust that he is no longer listened to by the Prime Minister.

I now come to the more important part of what I have to say about my right hon. Friend's article, the rest of which is of no importance. He is wrong in his assertion that the anti-Europeans, who, he says, will "squeal like stuck pigs", are a minority; they are not. When my right hon. Friend claims that, on a free vote, his ideas would prevail, he should take on board the fact that research by Professor Andrew Gamble of Sheffield university and our research in the House show that, on the fundamental Maastricht issues, a substantial majority of approximately 60 per cent. of Back Benchers who were whipped by my right hon. Friend had different views. Things had not been properly explained and certain circumstances had not arisen--I make no complaint about that. Despite that, 60 per cent. of those who replied to the private survey said that they did not agree with the Maastricht treaty. In a new Parliament, my right hon. Friend will be proved even more wrong and he knows it. That is the important point on which I wished to reply.

I now return to my fundamental theme. The 1970 White Paper claimed, contrary to the present assertions of my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath), that we would not lose our sovereignty and that we would not give up our veto on matters that were of vital or essential national interest. In the light of my right hon. Friend's present views, I have challenged him on the Floor of the House to repudiate the statements made in the White Paper, but he has refused to reply. Indeed, the White Paper went further and said that for any member state to give up its right to use its veto in its essential national interest, even if in a minority, would

"imperil the very fabric of the Community."

That is the point.

In other words, the whole concept of flexibility, which means moving down the route towards increased majority voting--that is implicit in the EMU arrangements, which

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the presidency paper says is the best example of flexibility--is in direct contradiction to the 1970 White Paper, which said that to go down that route would

"imperil the very fabric of the Community."

That comment is hardly surprising. Already, there are riots, disorder and all the rest of it. The unemployment rate is getting higher and there may be problems with defence and other matters. If member states create a compression chamber and then have majority voting inserted by treaty arrangement within a legal framework, who will be surprised if the fabric of the Community is destroyed? It is precisely for that reason that I repudiate the assertion made by hon. Members who oppose me when I say that I am in favour of the European Union--of the kind that I want.

Maastricht and its bedfellow, the doctrine of flexibility, will destroy the fabric of the Community. My criticism of those who advocate or acquiesce in the current proposals for the IGC--I include the proposals in paragraph 12 of the White Paper--is that they undermine our position in the United Kingdom and in the European Union. The treaty must be renegotiated in the present IGC and that requires a degree of political will among the political elite, who are far removed from present public opinion throughout the Union.

I invite hon. Members to look at the presidency conclusions of and the statement on the Dublin summit, which describe the single currency and the stability pact, which has yet to be debated in the House, in terms only of economic and not of political significance. That is a travesty. It is abundantly clear that the criteria are being fudged; that comes out in the Treasury paper and in my recent correspondence with Mr. Eddie George, the Governor of the Bank of England, which is referred to in The Times. We are seeing a welcome shift towards recognition of the fact that the criteria are clearly being fudged, even if people do not want to say so too openly. I am a plain speaker; I like speaking bluntly about these matters. The criteria are being fudged. Let us get them changed and let us renegotiate, so that we can start sorting things out.

We did not veto the stability pact when we could and should have done. The result is that, like the hard core of EMU, it has been allowed to go ahead, again under the doctrine of flexibility. One way or another, we shall pay for the stability pact as we have paid for so many other things. Indeed, even our opt-out from EMU is flexible and not permanent. Hon. Members may recall that the opt-out says that, even if we say no to begin with, we can say yes later.

The presidency paper of 16 January suggests that that approach would apply to all other policies brought within the doctrine of flexibility. Furthermore, as we already know with the social chapter and the European Monetary Institute, we are expected to pay for the running of policies under the doctrine of flexibility. That is made clear in the presidency paper under the heading "Financing". It says that it is expected that, if the doctrine of flexibility is introduced, member states within the general framework of the European Union will have to pay for the running of the institutions that service them. It is the same with the EMI and the social chapter; that is the name of the game. We are moving further and further

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down that route. We are allowing the whole federal arrangement to go ahead without using the veto when it really matters.

I come now to the areas of government now under threat and draw attention to an important distinction that must be made--the difference between trade and matters such as the social chapter, which are non-governmental, and those that are governmental, such as EMU, defence, foreign policy, justice and home affairs. It may be news to some that the new presidency paper includes defence as a "likely" candidate. I understand that the Government have, amazingly, not ruled that out. The reason is that, even if the other member states went ahead, they could not efficiently carry out a European defence policy without the United Kingdom. That idea needs to be hit on the head; it is dangerous stuff. If there is a serious intention that the doctrine of flexibility should be applied to defence, that is absolutely that. There is no question about it whatever. Monetary union, no; defence, no; foreign policy, no.

I recall Chancellor Kohl saying that the Union must not be slowed down to the speed of the slowest member. The U-boats knew all about that. No doubt their flexibility of movement was also regarded as enhanced co-operation.

Even taxation is mentioned in the presidency paper and there is a threat of action outside the treaty. In other words, if the federalists do not get their way, the gun will be put to our head and they will say, "We will carry on and we will do things outside the treaty if you do not do them inside." That is blackmail. Not only that, but it provides us with a perfectly reasonable basis not only to insist on renegotiation, but to veto the entire conference and put the federalists in the wrong. They are the ones who would say that they would do things on their terms, outside the treaty, whereas we would renegotiate under article N and would deal with all those questions in a proper and legal fashion. That is the difference. Why can we not take a lead on those lines?

Even the common agricultural policy is said to be inviolable under the proposed arrangements. My hon. Friend the Minister may shake his head; I hope that that is because he agrees with me that the CAP cannot be inviolable. However, my point is that that is the direction in which the presidency paper is taking us. It appears that the difference between our approach to flexibility and that of other member states is not one of principle.

We now know that EMU is regarded as the best example of flexibility. When I cross-examined the Foreign Secretary in the Select Committee on European Legislation in February last year, I asked him whether the single currency was a matter of principle. He said that he did not follow what I was saying. I know the Foreign Secretary too well to think that he could not follow what I am saying. I say that it is a question of principle and I am glad to note that even the Chancellor of the Exchequer has conceded that, saying that he has no objection to the idea of the single currency as a matter of principle.

All those issues are interwoven. I want the Government to win and I want Britain to win. I want us to renegotiate the treaty and to wrong-foot the federalists in Europe. If we do that, we shall be in line with the wishes of the people of Europe. We shall be performing a function of general benefit to the United Kingdom and to the people of Europe.

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According to our White Paper, we are supposed to be against a hard core, but now we are refusing to rule it out. Perhaps we should not be surprised, in view of paragraph 12 of the White Paper, to which I have just referred. On 23 January--to show my hon. Friend the Minister that I have been following speeches on the subject closely--the Foreign Secretary said:

"Open to all, agreed by all should be our watchword."

I hope to hear from the Minister today that we shall veto the proposals now on the table, even if that means contradicting the thoroughly flawed policy of variable geometry, for the hard core is variable geometry. If we rule out one, we must rule out the other. Otherwise, we shall be letting the process of flexibility go forward.

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