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Mr. Malcolm Bruce: Will the right hon. Gentleman give way?

Mr. Major: Not at this moment, if the hon. Gentleman will forgive me. We know his view on a single currency.

Mr. Bruce: It was the right hon. Gentleman's view that I wanted.

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Mr. Major: The hon. Gentleman is just about to get it.

The single currency is approaching the point of decision and, perhaps, the point of crisis. The timetable is now unrealistic and the dangerous impact of dividing the Union into those in a single currency and those outside it is becoming daily more obvious. I have raised that matter repeatedly at European Councils and the speeches are a matter of record. The events of the past few weeks--what has happened in Germany and France and the changing circumstances across Europe--mean that economic and monetary union cannot safely proceed on 1 January 1999. Perhaps it can do so later--one can never say never, as has memorably been said--but it cannot on 1 January 1999.

If economic and monetary union goes ahead on that date, it will be not because the economic circumstances are right but because politicians throughout Europe have overcommitted themselves and cannot break away, even though the economic criteria that they set in the Maastricht treaty will not be met. On the information that has recently become available, the United Kingdom should certainly not enter in 1999. I am pleased to see the Foreign Secretary nodding assent to that.

Given the influence that the Foreign Secretary boasted of earlier, however, we should go further. First, in the interests of all of Europe--not just Britain and not just because of what some members of the Opposition might call Euro-scepticism in Britain--and because it would be a disaster if EMU went wrong, we should use the new-found influence of which the Foreign Secretary boasted to press for delay at Amsterdam. I am not asking him to press for cancellation. That will not happen. European monetary union is clearly in the interests of some of our European partners and they are not going to cancel it, so let us not have that pipe dream. Delay, however, we can most certainly press for and we should go further. We should make it clear that, if the other countries do not choose to delay, we will use the vote that we have against each and every country individually that seeks to enter such a single currency if their economies are not suitable to meet the Maastricht criteria and sustain them in later years.

I hope that the Prime Minister will indicate at Amsterdam--as I would have done had I been there--first, that we now believe that delay is in the interests of Europe, to avoid a disaster and, secondly, that if the Union chooses not to delay, we will vote against the entry of those countries that have not met the Maastricht criteria.

I fear two sorts of fudge as we approach the dates for economic and monetary union. The first is a fudge in which some of the larger European nations pretend that they have met the Maastricht criteria when they have done so only with creative accounting. The second is a different sort of fudge, in which the nations change the treaty commitment and weaken the criteria for a single currency so that not only France and Germany can enter, but perhaps Italy, Spain and other countries that desperately wish to be part of the single currency area when it is established.

If EMU takes place on weakened criteria, it will be economically fatal not merely to our European partners but to our interests and it should be opposed. The evidence is now available. The necessary economic criteria cannot be reached by 1999. At Amsterdam, I hope that the Prime Minister and the Foreign Secretary will

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seek to put a brake on economic and monetary union--not a cancellation, but a brake--because, if it proceeds in the wrong circumstances, it will damage our economic interests and cost us jobs. I delayed saying no until the British interest was clear. It is now clear. We should say no and the Prime Minister should do it at Amsterdam.

Mr. Donald Anderson (Swansea, East): The Leader of the Opposition makes an important point about creative accounting, but surely it is an absurd proposition to say that, however close to or far from the Maastricht criteria our partner countries come--even if they are broadly in line--we should veto them. Surely that is what our American friends would call influencing people without making friends. What isolation and animosity the vetoing of partner countries would create in the European Union.

Mr. Major: It is not a veto: the matter is determined by qualified majority voting. I did not mention the word veto: I said that we should cast our vote against those countries proceeding. [Interruption.] It is no good the hon. Member for Swansea, East (Mr. Anderson) waving his arms; he should find out what he is talking about before standing up and saying it. I wish that he would change his oratory, because it is not a question of our trying to be beastly to the Europeans. If they proceed on the wrong criteria and things go wrong, there will be real and damaging economic effects on this country and throughout Europe.

I want Europe to succeed. I do not want much of the work of the past 30 years to be blown away by something that would make the collapse of the exchange rate mechanism look like a vicarage tea party, which is exactly what would happen if countries went into economic and monetary union and it collapsed. How many unemployed people does the hon. Member for Swansea, East want there to be in Europe? Is 18 million not enough for him? It is far too many for us, and I do not think that the risk is worth the potential reward.

A single currency may have rewards at the right time and in the right circumstances; but that is not now.

Mr. Malcolm Bruce: The Leader of the Opposition has said why he thinks that there should be delay, but can he clarify what the shadow Chancellor said this weekend and tell us whether, if monetary union were to go ahead and, in his party's view, it was in Britain's national interest to join, it would still be his party's policy to allow the British people a referendum on the issue?

Mr. Major: I set out some time ago the view that I believed that it was right to have a referendum, and I have not shifted, nor do I expect to shift, from that view. It is a decision unlike any other. It may be decided that it is right to go in. Those circumstances could well exist in the future.

It is not a question only of positive advantages; there could be a negative case in which the disadvantages, in terms of employment and economic well-being, of staying out are compelling. We cannot overlook that possibility, and I never have. That is why I have always refused to rule out entry in principle. One cannot be certain that economic conditions will not be such that entering will be the least bad option.

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If such a change is to come about, it is a change of such magnitude that, if it is to carry conviction, it must be endorsed in a referendum on a specific question, which is why the Cabinet that I had the privilege to lead decided on that policy some time ago.

I have dwelt on the negotiations at Amsterdam, so I have not developed the theme of the many advantages that exist from our membership of the European Union. In the absence of my having dwelt on those advantages on this occasion, let no one doubt that they exist and that we are infinitely better off in the European Union, for all the disagreements and squabbles that we occasionally have with our partners, than we would be in splendid isolation outside it.

I believe that my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath) was right to take this country into the European Union and I believe that the economic advantages that we have already reaped and that will be reaped in the future, unless we throw them away with foolish decisions, are huge.

We need to press to enlarge and decentralise the Union, to turn it into the economic powerhouse that it could, but has not yet, become. Its potential is almost beyond calculation if the right policies are there to follow the original dreams of the Community's founders.

Of course, we need to work with our partners to maximise Europe's influence around the world, but working with them does not mean having policies imposed on us by them, through qualified majority voting. We need to build on the opportunities that Europe has given us.

I profoundly disagree with some, not all, of the policies of the European Union. I echo again what the Prime Minister said the other day: is it going in the right direction? Frankly, no, but it is a force for good, economically and politically. We should use all our influence as a country to make it a success in the future.

That does not mean only co-operating; it means sometimes saying to our European partners, "We think this is wrong and we ought not to do it," because if we go ahead, and we prove to be right and it is indeed wrong, we could damage the whole European Union.

That is not Euro-scepticism, but a balanced judgment of what we believe is right to ensure that the European Union works. That is what I care about. I want it to work and I want us to play a proper role in it, but I do not want us to be placed in a position in which a more intrusive European Union overrides the instinctive wishes, habits and traditions of the United Kingdom in a way that many in this country have come to fear over recent years. The Prime Minister's remark is relevant in that regard as well.

In that spirit of wishing Europe to be a force for good economically and politically, we should use all our influence as a country to help to make it a success in a way that is appealing, and not unappetising, to the British instinct. In that spirit, I wish the Prime Minister and the Foreign Secretary well in the negotiations that they must undertake--I can certainly agree that they will be hard negotiations--and, for all our sakes, I hope that they will be wise in what they pursue and successful in what they achieve.

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