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Mr. Rowlands: I represent a community that understands exactly the impact of fixed exchange rates and gold standards on the economy and jobs. I shall refer to that in greater detail later. We know what impact such policies can have on peripheral communities that face structural difficulties, as my community did in the period between the wars and again in the 1980s and the early 1990s.
I am not seeking to make a Welsh point, let alone a Merthyr Tydfil and Rhymney point; I am talking about all the peripheral areas within the European Union. The
relevant graphs are interesting, and I believe that they are as accurate as any, because they show that, whereas the gap is closing between the relative GDP per capita levels of nation states in the European Union, huge regional disparities are emerging; in other words, the peripheral areas of the European Union are suffering greatly. The figures reveal that the GDP per capita of a quarter of the present European Union is less than three quarters of the European Union average.
According to the objective set down in the treaty, we are also asked to believe that social cohesion and high employment will be achieved through economic and monetary union, "ultimately including" a single currency. Those two words are not new, because they were included in the Maastricht treaty. Even when we debated that treaty, I was curious about how the ultimate inclusion of the single currency fitted in with everything. I thought that monetary union was equivalent to a single currency. I thought that one could not achieve monetary union without a single currency; but, according to the revised article, it now appears that a single currency is an optional extra. We are invited to support the notion that communities like mine will achieve high employment and social cohesion through monetary union and a single currency.
The language used is fascinating. We, in common with Conservative Members, now laud flexible labour markets and the possession of flexible, adaptable skills. We now denounce old-style corporatism and all forms of intervention. We have marginalised the role of public expenditure and have introduced treaty-based draconian laws not to borrow more than a certain percentage. We now believe in flexible labour markets, but inflexible exchange rates. We believe in a monetary union that is corporatist to its toes. Everything described in the treaty is corporatist. What could be more interventionist than the stability pact that backs up that treaty and has the power to fine nation states if they err?
I am an historian, not an economist, and I can find no empirical or historical proof that all that 3 per cent. deficit stuff in the Maastricht treaty has any particular sacred, eternal, validity. We are asked, however, to support such a principle.
Mr. Bowen Wells (Hertford and Stortford):
If, as the hon. Gentleman has said, we enter an inflexible monetary union, and changes are taking place in the economies of peripheral areas--I suggest that it is not only Wales that is a peripheral area in terms of monetary union but all of the United Kingdom--is it not true that the only way in
Mr. Rowlands:
There are two or three ways in which adjustments could take place. First, there might be a significant transfer of resources. The problem is that the only way to achieve such transfers on a scale large enough to be effective would be to create a unitary or federal government capable of taxing and therefore redistributing resources.
The second way in which adjustments might take place was mentioned by the hon. Member for Hertford and Stortford (Mr. Wells) in an intervention. It was the way that partially solved, but in the cruellest way, the problems that once confronted the communities that I represent: large-scale movement of people from peripheral areas. In 1928, it was called transference; the Government of the day set up a board to promote transference. Presumably there might be a European transference board to move the population within European Union to where the work is--a massive European bike ride, if Lord Tebbit will forgive me.
Without the flexibility of exchange rates, there will be higher unemployment in peripheral regions.
Sir Raymond Whitney (Wycombe):
On a point of order, Mr. Martin. The hon. Gentleman is giving us a very interesting discussion on economic and monetary union. I am not aware that it is a subject of the amendment or of the Bill.
The First Deputy Chairman of Ways and Means (Mr. Michael J. Martin):
I draw the hon. Gentleman's attention to the fact that amendment No. 1 refers to economic and monetary union, so he is perfectly in order.
Mr. Rowlands:
Thank you, Mr. Martin. Monetary union is referred to in article 1, whose inclusion in the Bill we are debating, and in amendment No. 1. Although we cannot move the amendment, I am discussing that amendment, which I tabled.
I am sceptical of that fine belief that monetary union will achieve high employment--that through full monetary union we shall achieve the social and economic cohesion that we all want. I find the notion of a 21st-century European gold standard--which I think is what monetary union is--as potentially dangerous for the future of my communities as the gold standard was to my communities between 1925 and 1932.
One should re-read the history of that period. One should not become a prisoner of one's history, but one should at least re-read it and realise that the only post-war period of full employment in Britain did not result from a gold standard or very fixed exchange rates of the kind and character proposed for monetary union.
I feel strongly about this subject. If we believe in the concept of high employment, we have cause to be worried--as I am--that some of the aspects of the treaties that we are discussing will not enhance job prospects and bring about high employment in the communities that I serve, but will destroy them.
Mr. Cash
: I should like to approach the debate from the position that I believe the Conservative party genuinely represents, which has been gravely
The views that have been expressed by the Conservative party day in, day out on these fundamental issues--the add-on to the development towards what is called an "ever closer union", but which I believe is an ever-increasing division within Europe--may be encapsulated as pro-European views. It is a gross misrepresentation of our position to describe the views that we advance as Europhobic or anti-European. There is absolutely nothing Europhobic or anti-European in those views, and it is a gross calumny on the Conservative party that such descriptions continue to be expressed.
I pay a deeply felt and emotional tribute to many Labour Members, including the hon. Member for Merthyr Tydfil and Rhymney (Mr. Rowlands). They genuinely believe in the national interest. We may differ about where we would go if we retained our ability to take decisions for ourselves, but the idea that those of us who seek to maintain the national interest in a manner consistent with a policy that genuinely represents the interests of Europe as a whole--and have tried to present such arguments over the years--are Europhobic or anti-European is a gross calumny.
Mr. Ian Taylor (Esher and Walton):
I cannot resist an intervention--bring back the old days of the Maastricht treaty debates. I warmly welcome my hon. Friend's remarks; he has obviously become a positive European. In that context, will he warmly welcome the very positive statement made by our right hon. and learned Friend the shadow Foreign Secretary, who said that, in achieving the development of the European Union and especially of the single market, it was essential that there was a supranational court--the European Court of Justice?
Mr. Cash:
My hon. Friend may be surprised to know that, about two years ago, I had a debate with the present Lord Howe before the Bar Council in which, to his astonishment, I actually agreed that, if one were to have certain rules that were applicable in the interests of co-operation within Europe, it was necessary to have a court of justice, which would arbitrate sensibly in achieving objectives that were in the interests of Europe as a whole.
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