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Mr. Gapes: If it were true that those were simply matters for other European states, I would be extremely concerned. Measures can be taken by national Governments to deal with the problem, as our Government are dealing with the legacy of the past 18 years by creating the welfare to work programme and by co-ordinated activity between the member states of the European Union, which is why the employment chapter was put into the Amsterdam treaty.

There is a combination of co-operation and action at a European level and the more important national component of action to reduce unemployment. The two must go together, because we are in a single market. There must be certain minimum standards within that market. That is why the concept of the social chapter, bringing together the social partners, developed concomitant with the establishment of the single market. It is not a case of one or the other. The two go together, side by side.

I agree with the criticism that some countries have had serious increases in unemployment. Germany certainly has serious problems, some of which are undoubtedly related to the unexpectedly high costs of German unification. I remember discussing what would happen with Members of the German Parliament in 1989, 1990 and 1991. Within four or five years, they said, east Germany will be fine and everything will be great. They did not expect the massive costs of the transfer from the west to the east and the impact that that would have on their economy.

Rising unemployment in Germany is clearly related to unification, but there are other factors. We could discuss them, but I do not want to delay the House much longer and other hon. Members want to speak.

Mr. Bercow: The hon. Gentleman is filibustering his own Bill.

Mr. Gapes: If the hon. Gentleman wants to intervene, I am happy to give way to him. Otherwise, I should be grateful if he did not make contributions from a sedentary position.

Mr. Graham Brady (Altrincham and Sale, West): I am grateful to the hon. Gentleman for giving way. Does he believe that, when and if Europe has a single currency, there may be similar effects on unemployment in some parts of Europe as there were following German unification? What parallels would he draw between the two?

Mr. Gapes: There are no direct parallels. The argument about a single currency is for the debate on a different amendment. I would prefer not to go down that road now. I should be happy to read out the document produced by my right hon. Friend the Chancellor of the Exchequer if the hon. Gentleman so wishes, but that is a matter for a later debate.

Mr. Robathan: Why does the hon. Gentleman think that, this time, the Germans will be right about a single

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currency whereas they were wrong in 1989, 1990 and 1991? Could they not be wrong twice in a row? Have they only ever been wrong once in their lives, and does he take them at face value?

Mr. Gapes: We can discuss that matter in the context of a later amendment.

The Government have carried out the mandate that they got from the British electorate on 1 May, which was to join the social chapter. The Conservatives were against joining, and fought the election with a strong claim that joining the social chapter would be a disaster, yet they were resoundingly defeated. Consequently, one would expect them to display some humility and accept the fact that they lost, but we still hear the same arguments as we heard before.

Not all Conservatives take that view, however. The Conservative MEP Tom Spencer--

Mr. Radice: Good man. [Interruption.]

Mr. Gapes: The reaction from the Conservative Benches is somewhat different. Tom Spencer called the treaty

"a useful consolidation and clarification of the existing treaties and it should be accepted by both government and opposition in Westminster."

Mr. Swayne: Oh, that's all right, then.

6.15 pm

Mr. Gapes: That was easy. I have more quotations, if other hon. Gentlemen want to intervene. Anthony Teasdale, MEP, was the special adviser to the right hon. and learned Member for Rushcliffe (Mr. Clarke) when he was at the Treasury before the election. Mr. Teasdale wrote a pamphlet with another Conservative MEP, Mr. Brendan Donnelly. The pamphlet, entitled "What's Right with the Amsterdam Treaty", was published only in October, so perhaps hon. Gentlemen have not yet had a chance to rush out and buy a copy.

The two MEPs reject the argument that the Conservative party should oppose the Amsterdam treaty because it includes the social chapter. They state:

"Whatever the merits and demerits of such a move, everyone understood that it would follow if Labour were elected, Amsterdam Treaty or no Amsterdam Treaty. It is therefore perverse for critics to attack the treaty for incorporating the Social Chapter, and any criticism of this kind is likely to cut little ice with an electorate which accepted the legitimacy of UK accession by its vote on the general election of 1 May."

Mr. Swayne: I entirely accept that, but does the hon. Gentleman accept that new clause 27 acknowledges that Labour mandate? It merely puts in place a means by which the House might monitor the implementation of the social chapter.

Mr. Gapes: In which case, why is the hon. Gentleman arguing for the removal of the social chapter from the Bill? I fail to understand his argument: he wants the social chapter to be removed and to be kept in. I am a little surprised.

Mr. Radice: Perhaps the hon. Member for New Forest, West (Mr. Swayne) did not listen to the speech of the

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right hon. and learned Member for Folkestone and Hythe (Mr. Howard), who made clear his total opposition to the social chapter when he moved the amendment.

Mr. Gapes: I am grateful to my hon. Friend.

In conclusion, I hope that, in a few months' time, when they have given further thought to these matters, wiser heads in the Conservative party will recognise that it is not in the interests of their party or of the country for them to keep their heads in the sand and to fail to face up to reality.

The modern world requires that Britain plays a full part in the European Union, negotiating in our national interests to obtain the best deal for our country. That is what my right hon. Friends have secured through the Amsterdam treaty and their decision to sign the social chapter.

Mr. Robert Walter (North Dorset): On Second Reading, I made clear my opposition to the Bill for three very good reasons. One reason might be described as purely tactical: I object to the Government's failure to use the unanimity required in treaty negotiations to secure a solution to the problem of fishing quotas and the working time directive--although I suppose that the latter cause would not gain much sympathy on the other side of the Chamber.

I also oppose the Bill most sincerely because I think that it is a very mean treaty which does little to adjust our institutions to a Union of 20 or more members. The treaty barely addresses enlargement--that will require another intergovernmental conference and another treaty. Most particularly, I oppose the legislation because of the inclusion of the social chapter and the employment chapter. That is also why I shall support the amendment. Those chapters will not create a single new job in my constituency--in fact, the loss of competitiveness as a result of the measures may lead to job losses and to bankruptcies. The blame for that result will lie firmly with the Government and those provisions in the treaty. The Government's adherence--some might suggest that it is somewhat out of character--to a dogma that is both outdated and anti-competitive will cause many problems.

The hon. Member for North Durham (Mr. Radice) suggested that the social chapter contains few provisions. He even claimed that Conservative Members have not read the social chapter. I assure him that we have read the social chapter, together with some excellent research material about it.

Mr. Letwin: My hon. Friend may be understating the position. Does he agree that, in all probability, the hon. Member for Stone (Mr. Cash)--and perhaps also he himself--knows the social chapter by heart?

Mr. Walter: I shall not recite the social chapter to the Chamber this evening, although I shall allow other hon. Members to do so if they wish. At the time of the Amsterdam conference, that empty box--as the social chapter has been called--contained only two specific provisions on works councils and parental leave. My question is: for how long?

United Kingdom business practice does not follow the European social model. Our business practice is viewed on the continent as more competitive and a threat to

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European businesses. When the Amsterdam treaty was signed, the works councils directive applied to firms with 1,000 or more employees. The Commission now proposes to reduce that number to just 50 employees. Conservative Members regard flexible labour markets as critical tothe future competitiveness of British industry. We occasionally hear such thoughts echoed among Labour Members, but there is little in this measure that would lead to flexible labour markets continuing on their current basis in this country.

Unemployment in Britain today is significantly lower than in any of our major European competitors. The flexibility created in the labour market by the previous Government means more jobs and a wider range of jobs. In our flexible labour market, more people can find a way of working that suits them. Is it a coincidence that the United Kingdom, which has the most deregulated labour market in Europe, also has more people in work than any other major country in the European Union?

In the past 20 years, Europe has seen the consequences of inflexible labour markets. Britain's more flexible labour market has ensured that unemployment is below that in Germany. United Kingdom unemployment stands at 7.1 per cent. In Germany, unemployment is 9.9 per cent; in France and Italy, it is 12.5 per cent.

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