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7.13 pm

Mr. Robert N. Wareing (Liverpool, West Derby): Some of the speeches in this debate have looked back over the past 22 years. My hon. Friend the Member for Huddersfield (Mr. Sheerman) mentioned the fact that he had changed his attitude since the referendum in 1975. I confess to the House that I have changed my attitude, too, and I had very good reasons for doing so. In 1975, it was just conceivable, because of the nature of our manufacturing base, that Britain could operate outside the then European Community. Since then, during the Thatcher-Lawson years, our manufacturing base has been decimated.

Two other factors have arisen. Europe has changed. When we talk about the European Union, we no longer mean only six countries, but many more. The traditions of those additional countries often have much in common with the British Labour movement, and Sweden is one example. A social dimension has also been introduced.

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Many of us argued in 1975 that we were being asked to become part of a bankers' Europe. Nobody can argue that now, because--since Jacques Delors and the social chapter--the European Union has undoubtedly acquired a social dimension and one that has been accepted by the Labour Government.

The right hon. Member for Strangford (Mr. Taylor) mentioned the dangers to democracy that he sees. I remind the House that democracy is not as age-old in this country as we would like to think. It is true that we have had parliamentary government for nearly 1,000 years, but it is only 165 years since the first Reform Bill was passed. All that did was give one man in 40 the right to vote. It is only in this century that working men have all had the vote on an equal basis, and women have had that right only since the 1929 election. As recently as 1945, most women did not have the right to vote in local elections because of the householder franchise. In 1948, the university seats and the business vote were abolished. We should not talk as if we have been a democracy for centuries, because we have not.

If there is a democratic deficit in Europe, the answer is not to ignore Europe but to make up the deficit. I do not share the fears that have been expressed by some hon. Members today that the European Parliament will usurp Westminster's powers. However, it is right that the European Parliament, meeting as it does in public, should be able to control the executive machinery of the European Union which meets in camera.

A breath of fresh air is blowing through our continent today. It was generated by the decisive decision of the British people on 1 May to reject a party whose leadership refused to disavow the bigots and the extreme chauvinists in its ranks. New Members are lucky indeed because they do not have to listen to the bigotry and the racialism that oozed from the mouths of David Evans and Tony Marlow. The British people turned their backs on such candidates, including the Tory candidate in Edgbaston who attacked the Labour candidate--now, I am glad to say, my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart)--because of her Germanic roots. The Tory Government whipped up hatred against Europeans in general, and Germans in particular.

We remember the writings of Nicholas Ridley, and some of the speeches of Lord Tebbit. We remember also that one of the Conservative party's leadership contenders embarked on such a tirade. During this Parliament, no Minister will be heard at his party conference making fun of foreigners, as the right hon. Member for Hitchin and Harpenden (Mr. Lilley) once did. Those days have gone. Although there may be differences among Labour Members, these are based on politics and economics and are not borne out of racism and bigotry.

The Tory Euro-sceptics talked about protecting British sovereignty, and the interests of the people. We believe the most important people to be working people, and that is why the Government have taken early action to fulfil our manifesto commitment to sign up to the social chapter and to recognise that British workers--whether full time or part time--should not be treated as second-class European citizens.

Likewise, the Government are right to put the scourge of unemployment at the top of their European agenda. The convergence criteria for the single currency cannot

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be properly attainable with a background of 80 million unemployed people in the EU. As the people of France have come to understand, attempting to reach the target of 3 per cent. of GDP borrowing requirement by slashing jobs and welfare is not the way to endear the concept of European unity to the mass of people. In rejecting the Gaullists, the French people decided that there had to be a better way.

I believe that if there is a single currency, we should enter it as and when we are in a position to attain the 3 per cent. target, backed by fuller employment. When those who are now unemployed become employed, they will no longer be a financial burden on the state and will pay taxes. That will help to sustain the 3 per cent. limit without damaging the social infrastructure.

I do not believe for one minute that, if the rest of Europe--certainly the core countries of the EU--accepts a single currency, it will be possible for Britain to remain aloof. For Britain to persist with the pound sterling while Germany, France, Italy and perhaps others operate a single currency would invite speculators on a large scale and would make business highly costly for the British business man, compared with his European counterparts. If Britain is to compete on an equal footing with our counterparts in the rest of Europe, there has to be acceptance sooner or later of Britain's entry to a single currency.

One aspect that my right hon. Friend the Foreign Secretary did not mention today is human rights, but he should be congratulated on putting that at the top of his foreign policy agenda. When we talk about human rights and foreign policy, we tend to think of countries such as Indonesia, Saudi Arabia and--perhaps--Turkey, and a good reason why Turkey's application to join the EU should not be considered is that country's human rights record. There are other human rights problems within the boundaries of Europe and I wish to express some caution about the enlargement of the EU.

I fully support Poland, the Czech Republic and Hungary being accepted into the EU as early as possible. In many respects, Hungary could fit in neatly tomorrow morning. Unlike the right hon. Member for Strangford, I would not allow Turkey a veto over Cyprus's application. However, we should be careful about the applications that will come from the Baltic states. This is a cautionary note that I would like to add to the debate. In Latvia, 46 per cent. of the population are Russian. Of the 1.5 million people who live in Estonia, one third are Russian. These people are being denied their human rights. Many of them have lived there for 50 years or more, but one third of the population are unlikely ever to be other than non-citizens because they--the Russian speakers--are unlikely ever to meet the linguistic requirements for Estonian citizenship.

My right hon. Friend the Foreign Secretary undoubtedly will have difficult decisions to make in Amsterdam, but the manner in which he, the Chancellor and the Prime Minister have embarked on the European journey with the Labour Government is in stark contrast to the way in which the former Prime Minister led the Conservative Government. He said that he was ready to be at the heart of Europe, but his Back Benchers were at his heart and he lost heart. Because of that, he lost the election. I wish my right hon. Friends good luck in Amsterdam, and I feel sure that they will act on behalf of

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all the British people and that the decisions to which they come will be true to the Labour party's internationalist traditions.

7.26 pm

Mr. William Cash (Stone): It has been intriguing listening to the schizophrenic socialist party's windmills of the mind, because there are only a few days to go before the Prime Minister and the Foreign Secretary go to Amsterdam. It is clear from today's speeches that they do not understand what the treaty says. There is a famous analogy; they have not read the Amsterdam treaty as one of our distinguished leadership candidates is reputed not to have read the Maastricht treaty.

The problem goes back to the Prime Minister's statement, as Leader of the Opposition, on 5 April 1995, when he made the most monumental misjudgment about the future of Europe. In a speech at Chatham House, he said that the other member states were not making strides towards a federal Europe. As I understand it from some diplomatic notes that have been leaked to me, in return for the resolution of the quota hopping issue he will give a series of concessions on the Amsterdam treaty, completely ignoring the federal character of what is being created--a federal character clearly described by my right hon. Friend the Member for Tonbridge and Malling (Sir J. Stanley) in an excellent speech. My right hon. Friend was, of course, criticised by Opposition Members as usual--I do not hold that against them. On balance, I agree that a deep, federal shift will take place in Amsterdam, although I depart a little from my right hon. Friend's judgment that the Maastricht treaty did not have the same effect.

In a nutshell, the real distinction between the Single European Act, which I always supported although I would like reforms to get rid of unfair subsidies, and the Maastricht treaty is that under the former there was a reaffirmation of the principle of majority voting that was already there for agriculture, industry and various other things. As I have said before, the critical point is that the Maastricht treaty was about European government whereas the Single European Act was about political co-operation and trading relationships. There is a world of difference between the two.

On the Amsterdam treaty, the idea that the European Union should be given a legal personality is a massive step in the direction of a federal Europe. It is pointless continuing to recite the mantra that we are not, to all intents and purposes, in a federal arrangement. I am more interested in identifying the functions that are being transferred as the constitutional criteria for determining the movement towards European government than in the general expression, federal or otherwise. The functions that are transferred will determine whether we reduce our democratic control over the Government of this country through this House and the accountability of that Government to the House.

I take grave exception to the legal personality and enhanced powers of the European Court of Justice, particularly the extension of its powers to cover criminal law, which we have been assured over and over again could not and would not happen. Furthermore, the chapter regarding fundamental rights and freedoms contains the most horrendous provisions which, if approved, would give the court the power to adjudicate on alleged breaches

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of fundamental rights that will be entrenched in our legislation through the Maastricht treaty. Any breach of those rights will be visited with sanctions against the member states in question. The House has not had much of an opportunity to consider all these questions. In the time available today, hon. Members cannot touch on them in the depth that they require.

I strongly criticise the Prime Minister for utterly failing--for the first time, as far as I know since the founding Act was passed--to make a statement to the House after the Noordwijk summit and the Russia-NATO summit. For many reasons that I do not want to recite today, we have made fair accusations against the Government for their failure to treat this House with proper respect. This is yet another example. The Prime Minister's failure to make statements to the House on fundamental European matters is outrageous. The inexperienced Minister who is sitting on the Front Bench for the first time suggested that it is not a contempt of the House for the Prime Minister to refuse to come to the House to tell us about the Noordwijk summit and the Russia-NATO treaty; he is merely demonstrating his junior capacity and his inexperience.

For all the reasons that I have given, I firmly believe that we should veto the treaty in its entirety. Furthermore, unless, as I pointed out in an amendment that stands in my name and that of my hon. Friend the Member for Chingford and Woodford Green (Mr. Duncan Smith), there is renegotiation of monetary union by placing the single currency on the agenda for the intergovernmental conference, we should veto not merely the treaty but the entire conference. That would be in the interests not merely of the United Kingdom, but of Europe as a whole.

As we heard in the good speech by the right hon. Member for Llanelli (Mr. Davies) and in my interventions on the Foreign Secretary and the Leader of the Opposition, the stability pact is at the heart of European politics this very day.

As I pointed out, the Government--through the arrangements that they formulated for this debate--are treating the House with contempt for the following reason: only a few months ago, the Select Committee on European Legislation tabled an unprecedented motion, criticising the previous Government. Despite the Committee's insistence, the Government ignored its request that a matter as important as the stability pact should be taken on the Floor of the House. I criticised the previous Prime Minister for that. Indeed, about 150 hon. Members on both sides of the House took the same point of view.

Among all the other papers that we are considering today is that same stability pact. The single currency, which is the most crucial question facing Europe, is buried in lines of verbiage about the various documents that we are supposed to be considering. If the Prime Minister were here, I would challenge him--indeed, I challenge the Ministers on the Front Bench--to tell us why the Government propose to allow the stability pact to go through without the full and proper debate required by the Select Committee on European Legislation. That sort of contempt is not merely a matter of disrespect, it is fundamentally undemocratic. It means that hon. Members are not being given the opportunity to form a proper judgment about what is going on in the name of this country.

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The stability pact is about the creation of a hard core, which is what the Germans want. It is based on an attempt to ensure that they have their kind of Europe. The Leader of the Opposition called for delay on the single currency--I would call for rejection--because it would lead to a Europe that lacks equilibrium and has a new centre of gravity. As I have argued on many occasions, if we allow the measure to get through it will lead to an increasingly German Europe.

The Germans themselves are now critical of that prospect. I visited Germany recently and met many leading German figures. I had a meeting with Hans Tietmeyer in the Bundesbank not so long ago. From that conversation, I predicted what has now happened. The Bundesbank has taken exception to what the German Government are doing and the most recent figures suggest that as many as 60 per cent. of the German people do not want the single currency on those terms.

Professor Wilhelm Nolling has said that he will take the matter to the constitutional court in Germany, and Professor Wilhelm Hankel of Frankfurt has emphasised that to revalue the gold reserves and cash in a profit--a decision tied up with the ridiculous policy of the single currency and stability pact--is equivalent to printing money.

That is bringing Germany and Chancellor Kohl into disrepute and, as Professor Hankel points out, from the point of view of stability policy, it is as questionable as allowing the monetisation of debt, which the Maastricht treaty forbids for good reason. That is why the matter is being taken so incredibly seriously in Germany. I whole-heartedly endorse and encourage those Germans who are taking a position against their Government, who are putting the obsession with political union ahead of common sense and the interests of stability in Germany, the United Kingdom and the rest of Europe.

Senior German figures, such as Gerhard Schroder and Herbert Hax, Kohl's chief economic adviser, have called for a delay to economic and monetary union. I would much rather renegotiate everything, which Amsterdam provides us with the opportunity to do. Failure to do so will be an act of folly and a dereliction of responsibility, as the previous Prime Minister said.

I made an intervention concerning the stability pact during the speech of the Leader of the Opposition. I strongly criticised the pact and will continue to do so. He said that I was wrong; I stand to be judged on that in due course. I suspect that he supported it because, as I know from a reply that the Prime Minister gave me the other day, it was not only a political agreement, endorsed by the previous Chancellor of the Exchequer and backed up at Dublin by the Leader of the Opposition, but became a final agreement and is now being implemented by the former Opposition.

The pact is in my opinion a fundamental mistake; it creates a hard core and we will be deeply damaged by it regardless of whether we are in or out of monetary union. If the hard core is a weak euro, we will be damaged by the lack of growth; if we are on the outside, it will be better not to have had it at all. That was the basis of my objections to the Maastricht treaty in the first place and it is why I shall certainly abstain on the Opposition motion this evening.

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If I was wrong about the exchange rate mechanism in my objections to it as it developed, I am glad to have been wrong. It was a vicious and bad policy, based on our 1992 manifesto, that led us into all sorts of difficulties and contributed massively, in my judgment, to our loss in the general election, because the public sector borrowing requirement went up to £50 billion and we imposed taxes such as value added tax on fuel.

I do not believe that I was precisely wrong, to put it mildly, with respect to the political obsession of Chancellor Kohl in driving for a federal Europe. I criticised the "heart of Europe" speech for good reasons, and would do so again. I am glad to note that the Leader of the Opposition has been good enough candidly to acknowledge that the exchange rate mechanism was a political mistake and to consider again the implications of the "heart of Europe" speech in an interview with Professor Anthony Selden.

The wait-and-see policy was always flawed. It remains flawed in the hands of the new Government. Is it a good idea to have a policy of wait and see as unemployment rockets and growth plummets? Is it good policy to wait and see, with all the uncertainty that that involves?

The Government do not have the guts to consider what is going on--the riots and disorder in France and Germany and the youth unemployment. The Prime Minister goes on about relieving youth unemployment with a so-called five-point plan, when the very policies that arise from the Maastricht treaty have generated youth unemployment of 28 per cent. in France and 33 per cent. in Spain.

Not one thing that I have heard today from the Foreign Secretary, nor all the glitzy presentation from the Prime Minister since the Government came into office, has given me the slightest confidence that they have the faintest idea how to run a European policy. That is why I and my hon. Friend the Member for Chingford and Woodford Green tabled amendment (c), which says that we have absolutely no confidence in Her Majesty's Government in relation to European affairs or in their capacity to negotiate.

The right hon. Member for Chesterfield (Mr. Benn) spoke about the central bank. He is completely right to say that it is anathema to our democracy. It is ultimately an unaccountable arrangement under which the bank governors are not allowed by law, subject to the European Court of Justice, to seek or take instructions from the member states. If they are not allowed to do that, nobody controls them and they are completely unaccountable.

When things go wrong, there will be a tremendous problem, because, on the one hand, there is the possibility of the breach of law and, on the other, the impossibility of bringing anyone to account. At the very same time, this Parliament and others will be emasculated. There will be no safety valve, and that will be the breeding ground for serious disorder, leading possibly even to a more extreme form of fascism or authoritarianism throughout Europe.

That is avoidable by avoiding the full implications of the treaty. That is the danger that we face, which is why I say that all the single currency arrangements should be renegotiated at Amsterdam. They are the breeding ground for unemployment, cowardice and disorder, which will follow as surely as night follows day.

The NATO pact, which we have not properly examined, is highly dangerous, allowing the Russians far more influence in the North Atlantic Treaty Organisation than is justified.

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The problem with flexibility is best encapsulated by the disaster of monetary union and the manner in which it was described in the flexibility paper in the appalling Amsterdam treaty. In the notes, the European Commission says that economic and monetary union is the best form of flexibility yet devised.

If monetary union, which has been an unmitigated failure and the centre of so much controversy and despair throughout Europe, is to be regarded as the best form of flexibility, why on earth do not this wretched Government abandon a treaty that has flexibility right at its heart? It is all very well for the Minister with responsibility for Europe, the hon. Member for Newcastle upon Tyne, North (Mr. Henderson), to laugh; if he persists in the policy that is being pursued at Amsterdam, the laugh will be on the other side of his face.

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