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6.30 pm
My right hon. Friend the Foreign Secretary also said that the commitment to a high level of employment seemed to be
One of my hon. Friends on the Committee questioned my right hon. Friend the Foreign Secretary on the significance of those words and the value of the employment chapter. He wondered whether they might be window dressing or a means of fobbing off. My right hon. Friend rightly said that putting in the same context as Maastricht the commitment to a high level of employment constituted a
An official added to my right hon. Friend the Foreign Secretary's observations and drew a specific comparison between the employment provisions in the treaty of Amsterdam and the monetary provisions in the treaty of Maastricht. Mr. Gass at the Foreign Office said in evidence:
Those of us who are veterans of the Maastricht treaty debates of the last Parliament will vividly recall the treaty's monetary union provisions. They define criteria, describe the processes and establish means of enforcement. As my right hon. Friend the Foreign Secretary said, "specific, tough targets" were established to achieve the monetary union.
I studied the employment provisions, particularly the account in article 1 of the term "high employment". I looked in vain for anything like the equivalent of the monetary union provisions, or even for any definition or any criteria by which I could assess whether high employment had been or would be achieved in the time scale envisaged by the treaty.
Having been invited to compare the two sets of provisions in the two treaties--as we were by all the evidence given to us and by the presentation of the employment provisions in the treaty of Amsterdam and the monetary union provisions of the Maastricht treaty--I should at least have hoped to find a definition of high employment or a target or criteria to balance the monetary union provisions in the Maastricht treaty. Sadly, although I hunted high and low, I did not find a definition, a target or a criterion.
We included in the new provisions of the treaty of Amsterdam the reference to high employment--I believe that the Maastricht treaty also contains such a reference, although my right hon. Friend the Foreign Secretary challenged me on that, and I have not had a chance to do my homework.
What will the definition of high employment be? The present employment levels in the European Union are nothing to cheer about. One striking feature of our debates is that we have so often been told about the economic performance of the European Common Market, Community, through to Union. When I consider its performance over the past quarter of a century, I do not find much to give me comfort--that is certainly true when I compare its performance with that of countries that have been more successful.
What about the employment success of the European Union? I understand that, at present, only 60 per cent. of those of working age in the European Union are in employment; less than 40 per cent. of those between 16 and 24 are in employment; only 35 per cent. of those of working age between 55 and 64 are in employment. Are those figures defined, under the terms of the treaty, as high employment or do we have to achieve higher employment? If so, how much further do we have to go? What is the objective? What is the definition? What are the criteria? Having decided to include an objective of high employment, by which criteria do we judge it?
Mr. Llew Smith (Blaenau Gwent):
Let us assume that we join the single currency, hand over many of our powers to the European central bank and, instead of achieving high levels of employment, face high levels of unemployment: what powers would we have as a democratically elected Parliament to alter that situation? Would my hon. Friend care to comment on article 107 or article 109 of the Maastricht treaty, which makes it illegal for democratically elected institutions--whether they be councils, assemblies or Parliaments--to try to influence the undemocratic and unelected European central bank?
Mr. Rowlands:
On the latter point, I think that when I was in opposition I often expressed my feelings on the monetary union provisions in the treaty of Maastricht. I was one of the hon. Members who did not vote for the Bill that implemented the Maastricht treaty. I share some of the considerable concerns expressed by my hon. Friend about the employment consequences of monetary union.
The employment chapter remains the responsibility of national Governments in many respects; but, as my hon. Friend suggested, what if one of the consequences of monetary union were to be a rise in unemployment in many parts of the European Union? Which would take precedence--the monetary union provisions or the high employment objective?
Mr. Cash:
Has the hon. Gentleman had the opportunity to read the paper on foreign affairs presented by Martin Feldstein, professor of economics at Harvard and president of the National Bureau of Economic Research? We should not forget that the United States is an important part of the problems that face the future of the European Union. In that paper he states:
We need to know what the definition of high employment is if its attainment has now been inserted as an objective in the revived article 1 of the treaty. I have quoted the latest employment figures in the European Union which reveal that just 60 per cent. of the working age population is in employment. Contrast that with the same figure for the United States or Japan, where it approaches 75 per cent. Is that figure a proper and reasonable definition of high employment for the purposes of the treaty? If so, it shows how much of a mountain we have to climb and how divorced reality is from the objective as stated in article 1.
The words are in the Amsterdam treaty, but what do they mean and how will we measure progress towards the stated objective? We know about the criteria, objectives and endgame associated with monetary union--they were laid down as specific tough targets in the treaty--but the opposite applies when it comes to the commitment to high employment in the treaty.
I have quoted the figures on general employment levels in the European Union, but the regional disparities in unemployment levels in the existing membership of the union are enormous and astonishing. Article 1 refers to the need for social and economic cohesion, but consider what is happening in reality. I accept that the gap between gross domestic product per capita and employment levels is closing when one compares nation states, but the interesting graph is that which reveals that disparities among regions in each nation state are growing alarmingly. I happen to represent one part of one of those so-called peripheral communities in the European Union which vividly illustrates the existence of such disparities.
Mr. Christopher Gill (Ludlow):
Surely what we need to understand about unemployment is that, every time this country has had fixed exchange rates, unemployment has gone up exponentially. It increased from 1.67 million in 1990 to 2.85 million in 1992, and from 1.25 million in 1925 to 2.9 million in 1931. I should have thought that that was something that everyone could understand. I cannot understand why Labour Members sitting alongside the hon. Gentleman are not as concerned as I am about that precedent, which is so clear for all to see.
"a very necessary corrective balance."
Ministers regard the employment provisions in the Amsterdam treaty, including the wording in the revised article, as balancing the Maastricht treaty.
"very valuable and very important step".
Anybody reading the evidence seems to be invited to compare the strength of the employment provisions in the treaty of Amsterdam and the monetary union provisions in the treaty of Maastricht. If one reads all the evidence given to the Select Committee, one can only draw the conclusion that significance is attached to the words "a high level of employment".
"Could I add one point . . . of course, the arrangements under the employment chapter in relation to employment guidelines follow quite similarly the arrangements under the economic and monetary union chapter of the Treaty of Maastricht for economic guidelines. There is a similarity of method behind those two things, they are not binding."
We are invited to compare the strength and significance of the employment provisions in the treaty of Amsterdam with the monetary union provisions in the treaty of Maastricht. It is exactly that point that I am seeking to draw to the Committee's attention this evening. I want the Committee to make such a comparison. The only trouble is that, when I make the comparison, I find the contrast, not the similarity, between the two provisions most striking.
"a political union of European nations is conceived of as a way of reducing the risk of another intra-European war among the individual nation-states. But the attempt to manage a monetary union
27 Nov 1997 : Column 1142and the subsequent development of a political union are more likely to have the opposite effect. Instead of increasing intra-European harmony and global peace, the shift to EMU and the political integration that would follow it would be more likely to lead to increased conflicts within Europe and between Europe and the United States."
Mr. Rowlands:
As in previous debates, the hon. Gentleman tempts me to wander. I do not have the information from that article at my fingertips, and I should like to limit my observations to one paragraph in article 1, but I am sure that the wider issues raised by the hon. Gentleman will be discussed later.
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