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9.39 pm

The Chief Secretary to the Treasury (Mr. Alistair Darling): That was pretty desperate stuff. The right hon. Member for Haltemprice and Howden (Mr. Davis) certainly came out of his Euro-closet tonight; he will be in some difficulties if the next leader of his party is the shadow Chancellor. That may be the first and last speech that we hear from him on this subject.

I shall return to what the right hon. Gentleman said shortly, but, first, I should like to refer to the numerous maiden speeches made this evening. The first was from my hon. Friend the Member for Harlow (Mr. Rammell), who spoke generously of his predecessor and of Stan Newens and made the important point that our party has returned to power after re-engaging itself with those natural supporters with whom it lost touch in the 1970s and 1980s. That has some relevance for Europe. It is important that Europe is re-engaged with the people whom the European institutions are supposed to serve.

The hon. Member for Reigate (Mr. Blunt) spoke with some feeling about what a difficult act his predecessor was to follow. His predecessor is one of the few people in the country who would probably crawl to get here for a debate such as this--but he spoke well of him.

My hon. Friend the Member for Liverpool, Riverside (Ms Ellman) spoke about the increasing problem of social exclusion in Liverpool and in many such areas, where it is important that we act and are seen to act, in terms of both domestic and European policy.

The hon. Member for North Dorset (Mr. Walter) spoke movingly of Sir Nicholas Baker; all those who knew or came into contact with him were extremely sorry and sad to learn of his death just before the election. He was a man of great integrity, who spoke his mind. Our thoughts are with his family.

The hon. Member for North Dorset said that his constituency was the most beautiful in Britain, as did the hon. Member for North Tayside (Mr. Swinney). When the

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rain eases off in North Tayside and I am able to see it, I can corroborate his evidence, as it is indeed a beautiful constituency. He, too, spoke well of his predecessor, Bill Walker, whom we shall miss for various reasons.

We shall also miss Jeremy Hanley, of whom the hon. Member for Richmond Park (Dr. Tonge) spoke with some affection. While he was chairman of the Conservative party, we all regarded him with a great deal of affection; we were sorry when he moved on.

The hon. Member for Blackpool, North and Fleetwood (Mrs. Humble), who wants an airport, unlike the hon. Member for Richmond Park, spoke of the importance of the fishing industry, as did the right hon. Member for Strangford (Mr. Taylor). Making progress on quota hopping, in particular, is a matter to which the Government attach great importance.

Right hon. and hon. Members will have seen that the House is approving a number of documents to end the formal parliamentary scrutiny procedure. The scrutiny procedure now ends and the Government can make progress not only on the intergovernmental conference, the broad economic guidelines and the assessment of the 1996 guidelines, but on the three proposals relating to economic and monetary union, the stability and growth pact, the legal framework of the euro and the new exchange rate mechanism.

The stability pact was referred to by the hon. Member for Stone (Mr. Cash) and by my right hon. Friend the Member for Chesterfield (Mr. Benn). It is important to say a word about European monetary union. The speech of the right hon. Member for Haltemprice and Howden had a flavour of sour grapes towards everything to do with Europe. That is part of the problem of the Conservative party at the moment.

Very few Conservatives can talk about Europe without a whiff of dislike and distrust of everything European. It is no wonder that they made so little progress with our European partners. They seem blinded by prejudice, to the extent that we now hear that Helmut Kohl is a socialist. He and many others may find that difficult to believe.

It is not so long since the Leader of the Opposition had to break off the general election campaign to appeal for unity in his party. His appeal was based on the proposition that the party should not tie his hands before he went to negotiate on monetary union, yet tonight the Conservatives tell us that we should do just that and rule out the possibility of monetary union in 1999. Many Conservatives, perhaps the majority, believe that it should be ruled out completely.

Dr. Julian Lewis (New Forest, East): Hear, hear.

Mr. Darling: The Euro-scepticism is there for all to see. No wonder the right hon. Member for Old Bexley and Sidcup (Sir E. Heath) looks with distaste at some of those sitting next to him. As he said, if Conservatives wish to exclude themselves not only from Europe but from elsewhere, they are going about it the right way. That is a matter for them.

We believe that it is in the interests of the United Kingdom that we should keep our options open on the single currency. It is essential that there is sustainable convergence among the economies that take part. We need a national debate on the economic tests to be applied. My right hon. Friend the Chancellor of the Exchequer set

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them out: jobs, investment, the impact on financial services, the need for flexibility, and the impact on business cycles. Those factors must be considered against the background of the first and foremost question: what is in this country's national interest? Is it in this country's interest to join a single currency or is it not? My right hon. Friend the Prime Minister and others have said that it is highly unlikely that Britain will join in the first wave, but to exclude the possibility of joining, which is at the heart of what the Conservative party believes, is not only bad for Britain's interests but is to take a blinkered view of the future.

Dr. Liam Fox (Woodspring): Can the Chief Secretary say what studies the Treasury has initiated into the currencies in which our trade is denominated, and how the single currency would affect them?

Mr. Darling: The Treasury and other Departments are engaged in studies of numerous matters, including those mentioned by the hon. Gentleman. When the Government have to come to a view, those discussions will take place in the House and in the country.

Dr. Fox rose--

Mr. Darling: No, I have dealt with the point. The hon. Gentleman and most Conservative Members are not interested one jot in such considerations because they have already set themselves against anything to do with Europe and, in particular, with the single currency.

Dr. Fox rose--

Mr. Darling: No, I have dealt with that point. The problem for Conservative Members, and the problem that the shadow Chancellor would face if he were elected leader of the Conservative party, is that there is a phalange of Tory Members who have a visceral dislike of everything to do with Europe. That is one of the many reasons that they were rejected by the electorate only a few weeks ago.

I want to deal briefly with the stability and growth pact. It follows that if there is to be a single currency, it is important that it should be underpinned by a pact. One of the pact's objectives is the maintenance of high and stable levels of growth and unemployment. It is committed to stability. Economic stability is one of the Government's primary objectives because only with economic stability can we get the long-term, sustainable growth that Britain needs.

The sanctions under the excessive deficits regulation could not apply to Britain; they can apply only to member states who participate in the single currency. Whether we do that is a matter still to be considered. I want to draw attention to one other regulation because it was mentioned by many people, particularly in the City of London, before the general election: the legal framework for the euro. It is important, whether we join or not, that British institutions, such as the London international financial futures and options exchange, LIFFE, can denominate sterling contracts in euros so that we can maintain London's pre-eminent position not only in Europe but in the world. The broad economic guidelines that are also before the House again emphasise the need for growth and jobs, to which I shall refer shortly.

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New Members who have spoken tonight will come to realise, should they ever participate in a debate on Europe again, that some things never change. Indeed, there were many echoes of the Maastricht debate--some of the speeches seemed exactly the same as those made five years ago.

Mr. Cash: We were right then and we are right now.

Mr. Darling: The hon. Gentleman is no exception as he is the leader of the reunion of the Euro-sceptics.

I believe that the starting point of any sensible consideration of the issue must be a practical and pragmatic approach to Europe. The question we must ask ourselves about the single currency or any other policy on Europe is what is in the country's national interest. The reason that we co-operate with the rest of Europe and share sovereignty in certain cases is that it is in our interests to do so.

We live in a global economy and it is no longer possible for any country to go it alone economically. Although I appreciate what my right hon. Friend the Member for Chesterfield said tonight, as he has done on many occasions in the past, he must accept surely that as we live in a global economy, co-operation between nations, whether in Europe or anywhere else, must continue and grow. That is extremely important.

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