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Sir Raymond Whitney (Wycombe): Do my hon. Friend's concerns, which, on the whole, I do not share, about the possibility of Britain joining the single currency lead him to conclude that we should never in any circumstances join a single currency union, whatever the impact on Britain, because of the fundamental objections that he sees? Therefore, it is not a question of postponing a decision for five years, 10 years, or whatever; it is a question of saying never.
6.30 pm
Mr. Flight: Clearly, joining the single currency means surrendering the existence of the country as a nation state. It means giving up a considerable amount. If we are to give up such an amount, the argument has to be
powerfully in favour economically. I assert that the argument is, if anything, negative economically. It is certainly negative in terms of economic cycles being out of sync and, if anything, becoming more so. If one is to sell one's birthright, do not sell it for an economic mess of pottage. It is worth selling only if there are economic gains to be had.
Mr. Ian Taylor: My hon. Friend has raised an interesting point. If not for a mess of pottage, for what would he sell his birthright?
Mr. Flight: Like all Conservatives, I am ultimately a pragmatic person. Who knows what the circumstances will be in the future? There is no case for selling our birthright in the immediate future. One of the things that has most worried me is that the provisions of the Maastricht treaty for coming together are a completely wrong measure of the economic homogeneity that is needed for a common currency to work.
Even America, since the civil war, has had the problem that the deep south--anyone who has been there will know this--has remained a relatively depressed area. It was a backward plantation economy and has never really got off the ground.
Mr. David Curry (Skipton and Ripon):
Georgia?
Mr. Flight:
The deep south, Sir. Certainly not Georgia, which is the mid-south.
The issue is that, if economic regions that are insufficiently economically homogenous are put together, it will cause major problems. The less successful areas will become worse. One then has to choose whether to subsidise them. If not, unemployment will rise on a massive scale. Considering when or whether this country should sell its birthright is a serious issue. The Maastricht criteria are by no means a measure of adequate economic homogeneity.
The second crucial point that I wish to make was made substantially by my right hon. and learned Friend the Member for Rushcliffe. Does the single currency encourage or discourage areas of Europe to adapt their economies towards economic success, towards competing with the new emerging parts of the world, towards the new world of free trade and free global flows? I do not see any evidence of that whatever.
For nearly a decade, there has been talk of setting up private sector pension funds. What has happened? Scarcely anything. A major problem, of huge unfunded debt, has not been addressed. What has been done to remove barriers to employment? What has been done to lessen the 40 per cent. employment taxes that keep people out of employment, and price people out of jobs? Absolutely nothing. It is Europe's priority, in terms of its own good in the world, as well as in terms of creating the single market, to address those items. For too long the excuse has been given, "You can push those under the bed; the single currency will do everything." The single currency will worsen Europe's economic problems, not solve them.
Thirdly, I shall talk about the role of the euro as a world currency reserve. I see a very great danger, because, to a large extent, there is an element of resentment and jealousy in wishing to compete with America, which is
the leading world power and owner of the reserve currency, and in the desire to compete with and perhaps even overtake it. If one follows policies that are designed to achieve a strong, hard reserve currency, where one is running a substantial external surplus, one runs the risk of slipping into the very problems that face Japan. A country can have a substantial reserve currency only if it is in regular deficit, creating the external ownership of the currency, which others can buy, hold and trade among themselves. I severely warn Europe and the Government that, if that is the way in which the European central bank goes, there is a danger that Europe will face the same problems in a few years that have faced Japan this decade.
I conclude by making the essential point that the Committee should vote for the amendment, because at its heart is the single currency, and because it is a serious stage down the path of European political integration. That is something of which this country has little or no knowledge, which perhaps the House of Commons or others have deliberately concealed from it. It is time that the people of this country knew where we are going, what is involved and what the risks are and were free to express what I believe to be their view--that they do not wish to lose their nation statehood.
Dr. Julian Lewis (New Forest, East):
I wish to touch on three topics--two briefly and one in more detail. I shall say a few words about economic and monetary union, then a few words about the human rights provision of article F.1 and, finally, and in more detail, I shall speak about a common foreign and security policy.
On economic and monetary union, I have no difficulty with the intervention made by my hon. Friend the Member for Wycombe (Sir R. Whitney). I believe that, in principle, a single currency is wrong. It will not work and I cannot envisage any circumstances in which I would support our joining it. However, there is always the possibility that all one's predictions in economic and political forecasting may be proven by events to be wrong.
If, over a decade, everything that people believe--as I do--is wrong with the single currency were tried out by other countries in the European Union and, against all our expectations, all our fears were shown to be groundless, we would have to admit that we were wrong, but we do not expect that to happen. That is why it is possible for people who believe--as I do--that we should never join the single currency to live quite happily with the formula propounded by the Conservative Opposition: that we should oppose the single currency in this Parliament and the next.
Even someone as certain as I am that the single currency will prove to be a disaster for the countries that enter into it would have to admit that we were wrong if at the end of this Parliament and the next our fears were shown to be groundless. I am happy to give that hostage to fortune because I do not believe that we will be shown to be wrong. I believe that EMU will turn out to be an implosion on an even greater scale than was the implosion of the exchange rate mechanism in 1992.
It is rather strange that people--not necessarily hon. Members who are present for this debate--increasingly refer to European monetary union rather than to economic and monetary union, which is what EMU stands for. The distinction is important, because the term economic and monetary union recognises the fact that there cannot
be monetary union without economic union. We cannot have a single currency without creating a single economy. I have said before--and I shall never tire of saying--that we cannot have a single economy without creating a single Government, and we cannot have a single Government without creating a single state. It therefore follows that those who oppose the creation of a single state of Europe must oppose the introduction of a single currency for Europe, because the one leads directly to the other.
I was interested in the comments of my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke). He said that he is not in favour of a single state, but that he is in favour of ever closer union, by which I take him to mean ever closer political union. My logical faculties may not be up to the task, but it seems to me that that argument is like saying that it is better to travel hopefully than to arrive. I remember a philosophical paradox that goes something like this: if a person starts out a certain distance from a fixed point and always moves towards it by covering half the remaining distance between him and that fixed point, he will move forward without ever reaching the fixed point. That is what my right hon. and learned Friend seems to have in mind: it is fine for us to go on having ever closer political union, but heaven forfend that we should end up with a politically united Europe.
People who believe in ever closer political union should have the courage of their convictions and say that they want a politically united Europe. They cannot say that they want one without saying that they want the other, because the one will inevitably lead to the other.
Conservative Members have gone into the human rights provisions in great depth and I do not intend to repeat their arguments. I shall merely point out that, in response to a question from me during the debate on 12 November, the Foreign Secretary said that he was willing to give me
"an undertaking that, so long as the Labour party is in power, it will not be possible to find 14 EU states that will agree that the Government are in serious and persistent violation of democracy or of human rights."--[Official Report, 12 November 1997; Vol. 300, c. 912.]
Much has been made of the example of the Greek colonels and much has been said about what we would do if an undemocratic regime came to power. My fear about the provision is not so much that it will be used directly against this country as that it could be used indirectly.
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