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6.25 pm

Sir John Stanley (Tonbridge and Malling): It is a pleasure to follow the right hon. Member for Llanelli (Mr. Davies) in the debate. I hope that I do not cause him undue embarrassment when I say that I found his views on Europe distinctly more realistic than those expressed by the Foreign Secretary in opening the debate.

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Conservative Members have expressed two alternative views as to the merits or otherwise of surrendering our opt-out from the social chapter. I addressed that subject in some detail in my speech on the Loyal Address, so I shall not repeat those points now. However, it is instructive to consider what has occurred in the intervening three weeks.

The Social Affairs Commissioner, Mr. Flynn, has proposed that the threshold for the works council directive--which is currently set at 1,000 employees--should be reduced to 50 employees. That would bring within the ambit of the existing works council directive virtually every business in this country. Mr. Flynn has also proposed imposing additional, legally binding requirements on companies, forcing them to consult before anyone is made redundant. Only last week, agreement was reached with continental trade unions regarding a whole raft of new contractual rights for those in part-time and temporary employment. That is the main subject of one of the next directives to be produced under the social chapter: the so-called atypical work directive. I believe that it will have some very real implications for labour market flexibility in those areas.

I think that the key issue is not the desirability or otherwise of those rights. We can debate the issues on the Floor of the House and consider whether those rights affect employers' willingness to hire people, and thereby impact directly on jobs. The central issue is whether legislation in this key area will remain at Westminster under our national control, or whether the legislative initiative will be surrendered to Europe. The right hon. Member for Chesterfield (Mr. Benn) said that, although he has reservations about giving extra power to the Bank of England, at least that power derives from domestic legislation that may be revoked if the Government decide that it is wrong.

The same is true of the social chapter. If the Labour party wishes to use its huge parliamentary majority to introduce more rights for British workers that compare with those of workers on the continent, it has the means to do so nationally. That does not require the surrender of our opt-out from the social chapter. I was struck by the comments of the Prime Minister on his first foray into Europe when he attended the meeting at Noordwijk. The Reuters extract of his remarks about the social chapter states:

The Prime Minister seemed to regret the surrender of the opt-out from the social chapter before he had made the concession. If the Government are really concerned not to affect the competitiveness of our country or place additional burdens on employment, the last thing that they should do is surrender our opt-out from the social chapter, which, as has already been pointed out, is largely subject to qualified majority voting, not unanimity. We are surrendering not only our opt-out, but our veto. It is probably too late to change, but I believe that that is a thoroughly bad policy for which Britain will pay in jobs. If the Government do a U-turn and abandon that policy at Amsterdam, they will be lauded by the Conservatives.

I should like to refer to some very important aspects of the new treaty. The first is the extension of qualified majority voting. As I said during the debate on the Loyal

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Address, the Commission has always had a major extension of QMV on its agenda for the intergovernmental conference. It published a paper in February proposing that 18 new areas of policy should be subject to QMV. It is of great concern to all Conservatives that that agenda seems to have remained largely intact. In addition, the paper proposes four new treaty competencies to be subject to QMV rather than unanimity, covering some wide areas of policy.

I agree with the comments of my right hon. Friend the Leader of the Opposition about the move away from unanimity. I accept that the Conservative Government made some moves on that, but the key argument is about where power lies. Further moves towards qualified majority voting would be irreversible. It is almost inconceivable that there would be a subsequent treaty amendment to reverse the process and return those powers. The Government are contemplating ending for all time our ability to say no to legislative proposals in wide areas of policy. I earnestly hope that in Amsterdam the Government will not surrender our existing rights of veto in key areas, including the environment and industrial policy. The long-term consequences for this country of moving to QMV on those and many other policy areas would be damaging.

I am sorry that the Foreign Secretary did not refer to subsidiarity, on which the British Government secured an important concession at Maastricht. It is vital that that concession is made more secure at Amsterdam. In particular, it must be made justiciable. When the Commission takes powers to itself or initiates legislation that could perfectly well be dealt with by national Governments, individual member states must be able to argue to the European Court of Justice that the Commission has exceeded its powers and gain a judgment that would take those powers back to member states.

The previous Conservative Government tabled proposals to that effect. It is of concern that those proposals have been severely watered down in the draft protocol on subsidiarity. The protocol is inadequate. I hope that the Minister will give us a clear assurance that he will reject the draft treaty's proposals on subsidiarity and will go back to those tabled by the previous Conservative Government.

I do not take the view that everything about the European Court of Justice is bad--indeed, quite the contrary. It is an important protection for this country. We have a good record of operating European Union legislation rigorously and fairly--a record which is not shared by all our European partners. If we are to have the ability to ensure that EU legislation is enforced fairly and rigorously throughout the EU, we must be able to go to the European Court if we believe that others have cheated at the expense of this country.

The European Court of Justice has one significant defect. Like other supreme courts in parliamentary democracies, its judgments have the immediate effect of law. However, unlike any other supreme court in the parliamentary democracies of Europe or north America, its judgments are impossible to modify. A judgment that is out of line with what the Council of Ministers wants cannot be modified unless a treaty amendment is passed unanimously--treaty amendments require unanimity--at an intergovernmental conference.

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The previous Conservative Government did some important work on that, publishing proposals for changes and coming forward with a new procedure to enable the Council of Ministers to meet after a European Court judgment and produce a treaty amendment rapidly by qualified majority voting, to bring the legislation back into line with the majority view. Sadly, the treaty before us today makes no reference to those proposals. I hope that the Minister will assure us that the new British Government will adhere to those proposals, because they are essential to continued confidence in the operation of the European Court of Justice. We cannot have a supreme court with a law-making capacity whose decisions are impossible to modify.

The Foreign Secretary also scarcely mentioned the European Parliament. No doubt there are different views in the House on how much further the powers of the European Parliament should be extended, but I hope that we can agree on a common starting point: that the provisions in the draft treaty are the biggest single extension of the powers of the European Parliament since the creation of the European Economic Community. I believe that that is a fair statement of fact. It has long been on the agenda of those who want to move towards a federal Europe to bring about significant transfers of legislative powers from national Parliaments to the European Parliament. We are well aware, from our experience of dealing with European legislation, of how negligible our power is in this House.

The new treaty is beginning to follow the same process in relation to the Council of Ministers. As I hope all hon. Members understand, reducing or even emasculating the powers of the Council of Ministers is another indirect way in which to emasculate the powers of national Parliaments to which national Ministers are accountable.

Mr. Radice indicated dissent.

Sir John Stanley: The hon. Gentleman shakes his head in disagreement. I simply point, therefore, to the relevant section of the treaty text. I invite any and every hon. Member who has not read it already to look at pages 111 and 113, where there is a complete list of areas that, for the first time, will become subject to the co-decision process. The co-decision process is the critical process of expanding the authority and powers of the European Parliament at the expense of the Council of Ministers. A total of 23 separate areas of policy are, for the first time, to be made subject to the co-decision process. They include employment, social policy, transport, the internal market and structural funds.

The previous Conservative Government were entirely right to say that if Europe was to continue to be a partnership of nation states as opposed to a federal Europe, there was no further case for any material extension of the powers of the European Parliament. In the draft treaty, we most certainly have such an extension. Again, I ask the Minister to make clear to us the new Government's policy in that critical area.

I now come to the most crucial area of all--the boundaries of the competencies of the European Union and its institutions in relation to those of national Parliaments. I put it to the House--I hope, again, that I am speaking purely factually--that the draft treaty proposes extensions of the role of the European Union's institutions in virtually every area of policy and takes us into areas of policy that have not been included before.

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My right hon. Friend the Leader of the Opposition rightly drew attention to the proposal for a new legal persona for the European Union in international affairs, making it capable of being a treaty signatory and giving it, in legal terms, almost the same locus and status as nation states. There are far-reaching proposals to extend the involvement of the European Union in foreign affairs and there are to be new involvements in defence. Immigration, human rights and non-discrimination are being brought in, as are a whole range of domestic policy areas. It is even proposed to extend the role of the European Union in culture, believe it or not. Those are far-reaching extensions of the competencies of the European Union.

We may debate whether the extension of the EU's powers in that way is desirable. I hope, however, that we can end the debate--having heard the hon. Member for Gordon (Mr. Bruce), I am not sure that we can--on what is the basic thrust or the basic goal of the EU. Let us forget the ridiculous term super-state; that can mean anything to anyone. The choice is simply between a partnership of nations and a federal state. Some hon. Members on both sides felt that we got to the fork in that road at Maastricht. I did not take that view because I believed that at the point of Maastricht, we were still on the road of being a partnership of nation states. Five years on, however, as a result of the way in which the EU has moved and of this draft treaty, I am in no doubt about where we are. This treaty takes Europe--we can debate whether this is right or not--irreversibly into a federal structure.

This is the point where the former Labour Opposition's rhetoric and the reality collide. I listened with great care to what the present Prime Minister said during the election and to what was said in the Labour party's manifesto. Labour made it clear that it was opposed to Britain being taken into a federal Europe. The point I put to Ministers in the last few days before they go to Amsterdam is that if they really mean what they say--that they are opposed to Britain becoming part of a federal Europe--they have only one policy option in Amsterdam next week, which is to say no to this treaty.

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