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5.19 pm

Sir Edward Heath (Old Bexley and Sidcup): When the Prime Minister took over, he said that the time had come to make a fresh start in Europe. That gave me great encouragement. The Foreign Secretary gave the same indications soon after he took office. It gave me great encouragement because after 18 years the spirit in Europe between other countries and ourselves had deteriorated enormously. The feeling against us was immensely hostile. I thought that if we were now making a fresh start, we might overcome that.

I know full well that my own party has got to make a fresh start after the disastrous election result. If my party decides to go against Europe--to follow the tendencies of some of our friends--that will be the end of our party, certainly for a considerable period. I therefore hoped that my party would show that it now wanted to play a full part in Europe, which would be beneficial to all of us.

The great strength of the Six, when it first began in 1950, was that the major parties in all the countries agreed about the first European Coal and Steel Community, as it then was, and they worked together for it. All the members of the Six knew that the major parties in each country were working for the same end. That, alas, has never been the situation here.

When I made my maiden speech, I appealed to the then Labour Government at least to go into the talks on the Coal and Steel Community, but they refused. They said that it would be a nasty capitalist organisation. In that, I think that their judgment was in error. They also said that they could not take part in an organisation that might be against nationalisation. Again they were wrong; but they took no part and so we were outside--and remained thus for 22 wasted years. We suffered greatly from that, and we suffered when we got into the Community because of our earlier absence. That is what has always worried me about any future developments.

When he got to his conference, the Prime Minister said, "And we will set the agenda." That made me think seriously about what the members of other Governments of the Community would say when they heard the British Prime Minister declaring to a conference,

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"And we British will set the agenda." That immediately brings forth all the dislike and, at times, hatred of the British because of their claim that they are going to set the agenda.

The Union is a union in which we all play a part. We cannot expect to get our own way all the time and we cannot try to get our own way all the time. That is the secret of success. That is how its members have operated.

As for the speech of my right hon. Friend the former Prime Minister, he will forgive me if I remind him--it is probably unnecessary to do so--that he once said that he wanted Britain to be at the very heart of Europe and that Maastricht was good for us, good for Europe and good for the world. There was a rather different tone in his speech today. That disappoints me because it shows that we have still not got the major parties in this country to agree about our membership of the European Union. That is the essential if we are to be successful and achieve many of our desires.

We must adopt an approach that recognises fully that others may have desires that are different from our own. We must accept them and not say, "No, we British must do our utmost to stop this." Let me recall our attempts to get our own way. Our attempt to change the voting power procedure failed disastrously. We were isolated, just left alone and all the more disliked for it. There have been other examples where we have pressed alone for change and did not get our way. The result, to put it quite bluntly, was that we were humiliated. People then took far less notice of us than they had done. That is a lesson for the current Prime Minister and the Foreign Secretary about the way in which they should conduct business in the European Union.

I enjoyed, as always, the speech of the right hon. Member for Chesterfield (Mr. Benn). Today, he gave his usual speech, but with one addition--his comments about the Bank of England. I share his regrets about the position of the bank, but not about the fact that the Chancellor of the Exchequer has introduced a new organisation.

When we negotiated to join the Community finally, and were successful, we wanted and expected the Bank of England to become the central bank for the entire Community. Why did that not happen? Because of the record of the City since then, the record of the bank since then and the fact that people just did not trust the British. Figures produced in the press yesterday show that we have the next to lowest rate of trust of all the countries of the Community. They just do not trust us and therefore the first task of the Prime Minister and the Foreign Secretary is to get that trust restored. That means working with our partners as a union. There is no other way of getting that trust.

We have heard a great deal about the single currency. I do not want to spend a lot of time dealing with it, but I believe that it would be quite wrong to write it off at this stage. That would be absolutely wrong because the French and the Germans are determined to go ahead with it and so are some other countries in the Union. We have heard about the incident in Germany, but the Finance Minister got a vote of confidence with a majority. The President of France and its new Prime Minister have both declared their intention to have a single currency. The French Prime Minister wants it in a different form, but they are determined to have it.

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What is happening here? We are completely ignoring the advice and wishes of our industry. It horrifies me that our party above all should ignore industry. The majority of people in the Confederation of British Industry want a single currency. That is true of industry generally, but not so much of small traders, who operate internally and are not affected greatly by it.

My right hon. Friend the former Prime Minister is right to emphasise the dangers if the single currency does not work properly. Naturally, that is so. The dangers are for us in this country as well, however, if it goes well and we are not in it. Then, the speculators will work against us and they will be successful, as they were on black Wednesday. That is the frightening side of it.

It is rather interesting to look at some of the figures for Germany. I find that the word fudge is now being used in the negotiations. That is obviously just a cover for those who never want a single currency, or even the European Union.

The present figures on gold show that the total reserves in Germany are worth $8.80 billion. In the United Kingdom they stand at $5.48 billion. Germany has almost twice the level of reserves as us. One must then consider the price that is set for gold. The total valuation for our gold is $297.8 per troy ounce. The German figure is $92.4. So, the German price is a third of our rate. Why is it a fudge for the Germans then to say that, in the circumstances, they are entitled to raise the figure at which they rate their gold reserves? They are perfectly entitled to do so. How those figures are used is a matter for the Germans to sort out between the central bank and the Government. Calling that a fudge and, similarly, criticising the French is making us untrustworthy to the rest of the Union.

Industry wants a single currency, and if we do not go in when it is created we shall be in the situation we faced when the European Coal and Steel Community was set up. We shall have no part in its development while we are outside the single currency and, whether we like it or not, we shall have to accept what exists when we go in and will not be able to alter it. That is the great danger of saying, "Put it off."

My right hon. Friend the former Prime Minister knows my views on the social chapter. We were absolutely wrong to oppose it, and we are still opposing it in the amendment. Wages councils were introduced by Churchill in 1909 and they existed under every form of Government--Liberal, coalition, Labour, Conservative, national, wartime, Labour, Conservative. Only in the last three years have they been abolished. Could it be said that they were responsible for unemployment? Not at all.

I remind my right hon. Friend that when I left office in 1974, unemployment was 580,000. Contrast that with unemployment in the 1980s and 1990s. What is the point of abolishing wages councils, which prevent the exploitation of labour? Such exploitation is going on now. Let us make no mistake about it: as a result of there being no wages councils, there is exploitation, particularly of the young. That is deplorable, and we cannot be surprised that our colleagues in the European Union do not like it at all.

I come now to the issue of tax. Of course, people asked questions on Europe during the general election. I had them from our business men, who are operating perfectly

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well in the EU under its regulations. They say, "Why cannot we have them at home?" That is the voice of industry. Business men are horrified and say, "We are suffering in the other EU countries because of what is being said and done in Britain. Cannot you stop that?" That is what industry is finding, and it has said what it wants us to do instead of pressing ahead with other measures.

My last point is about enlargement. We have constantly emphasised that we want it and we also say that we want a change in agricultural policy. That is also said by the Government. What is the wonderful agricultural policy to which we want to move? Labour has always opposed European agricultural policy. We accepted it and our farmers do extremely well from it. What will be put in its place? Are we to go back to subsidies so that there will be a market price and the Government will provide a subsidy? I do not support such a policy and I do not think that at the moment my party could support it.

The question of an agricultural policy becomes acute when we consider the issue of enlargement. It has been said that we should take in the former Soviet territories to the east. My right hon. Friend the former Prime Minister has constantly emphasised, "Wider still and wider," to which the rest reply, "We want deeper still and deeper." What is the justification for the wider option and what are the dangers?

The economies of those former Soviet territories are nothing like those of the countries that are in the Union. I have been to Bulgaria and Romania and to other such countries and I have seen their standard of living. It is well below ours and that of people in the rest of the Union. They have vast spheres of agriculture and wages are one fifth of ours. What will happen if those countries become full members and can export to EU countries? What will happen to our economies? It makes absolutely no sense to say, "Take them in, wider still and wider."

What we must do and what the European Union has always done as a community is to say, "We want to help you and you will be associated with us." We should work out the terms of association for each country so that they suit its requirements and should then make finance and expertise available. Gradually, they would come up to the general level of the rest of the Union. We did that with Spain, Portugal and Greece, which was an associate member for 21 years. Turkey has been an associate member for 42 years and is still not a full member because the rest do not think that the problems of Turkey with its religious divisions can be assimilated into the Union.

It is sensible to say to all the territories of the former Soviet Union, "We will help you. You will be associated and as you develop and match the rest of us you will become a full member." That would make sense to everybody, but, as it is, the other members of the Union see us emphasising, "Wider still and wider," to avoid the obligations that will be discussed at the conference. That is their view of us and nobody denies it.

Those are the Union's present problems. I desperately wish that both major parties were supporting full, heartfelt membership of the European Union because that is what the Union wants. I hope that we get it.

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