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Mr. Donald Anderson (Swansea, East): My right hon. Friend is justified in saying that the Opposition have form on key matters such as taxation and duty free and, therefore, are not credible in what they are now saying in their isolationist stance. However, will my right hon. Friend say a little more about the future, and particularly about subsidiarity? He will recall that he initiated the debate on the future of the European Union in Cardiff. That was followed through at the special summit in October in Austria. Can my right hon. Friend say what specifically was decided at Vienna on subsidiarity?
The Prime Minister: Yes, I can. My hon. Friend is right to draw attention to the importance of subsidiarity. We agreed at Vienna on specific measures to imbed subsidiarity more firmly in the way in which the European Union works. In particular, we have agreed that the subsidiarity protocol--the Amsterdam treaty--should be applied immediately. We intend to examine existing laws when significant new legislation is proposed to ascertain whether they should be modified or repealed. That agenda on subsidiarity is making progress, but we must not let up on it at all. We must be eternally vigilant in pushing this agenda forward. I believe that most people in Europe can see that there are certain areas in which Europe should work more closely together and integrate more closely. There are other areas where it is important that we push power downwards.
Mr. Menzies Campbell (North-East Fife): May I welcome the Prime Minister's statement, and particularly those parts of it which deal with the common foreign and security policy and the need for
better defence co-ordination in Europe? May I congratulate the right hon. Gentleman on his apparent recent conversion to the view that Government policy on Europe will be determined by what is best for Britain, not by what is least offensive to certain newspaper proprietors? Does he accept that there is no point in attempting to placate the implacable?
So long as the reasons for the rebate remain, so too must the rebate. Does the right hon. Gentleman accept also that if there is wholesale reform of the common agricultural policy resulting in a substantial reduction in the European Union budget, inevitably different considerations would apply?
Is it not now abundantly clear that the United Kingdom will best maximise its influence in Europe with membership of the single European currency? Why today does the right hon. Gentleman not declare the intention in principle to join and to prepare for a referendum to obtain the British people's endorsement?
The Prime Minister:
The answer to the hon. and learned Gentleman's final point is: precisely because I believe the British national economic interest should determine our membership. For the reasons that we have given, we do not believe that that is satisfied by entry into the single currency. We have set out the very test that would be applied to a decision whether to join the single currency.
I welcome some of the hon. and learned Gentleman's other remarks, but I pick him up on the common agricultural policy and the rebate. On any basis of CAP reform now being proposed, the British rebate will remain justified. I agree that we need fundamental reform of the CAP, and we are certainly prepared to examine mechanisms such as co-financing to try to get that reform through. On any basis, Britain will still be a big net contributor to the EU. We are at present the second largest cash contributor after Germany.
Mr. Gerald Kaufman (Manchester, Gorton):
Will my right hon. Friend confirm that the best way to gain concessions in Europe, such as those on duty free or the beef ban, is not by the tantrums and boycotts in which the Conservatives indulged when they were in government, but by co-operation and winning friends? Will he also confirm that Britain's national interest, of which he and the Government are guardians, is best served by sane and sensible discussion with our European partners? In expounding and assessing Government policy, will my right hon. Friend compare the hostility of the Leader of the Opposition to democracies in Europe with his support for a south American dictator accused of murder and torture?
The Prime Minister:
I agree entirely with my right hon. Friend that the best way to get results in Europe is to build alliances and to be constructive. All other countries in Europe find no difficulty in standing up for their national interests and still being constructive about Europe. For the life of me, I cannot see why we are incapable of doing the same in our country. If there are issues, such as the beef ban or the rebate, on which we have to remain firm, we do so. We argue our case on the basis of reason. That is the best way to get results. As we showed with the lifting of the beef ban, when we approach issues in that way, people respond.
Sir Peter Tapsell (Louth and Horncastle):
What exactly is meant by the words in the Vienna communique about closer British association with European defence and security policy? Bearing in mind the momentum that apparently innocuous European suggestions often develop on their own, can the Prime Minister give us an absolute guarantee that we shall not in due course be asked to put a European or a German finger on the British nuclear trigger?
The Prime Minister:
Yes, I certainly can say that. No one is even suggesting such a thing. There are situations in which closer co-operation between European countries makes sense. We are already setting up an individual to be Mr. or Ms CFSP, and a deputy. A whole apparatus already exists to develop closer common foreign and security policy links. The most intelligent thing for this country to do is not to pretend that that debate is not happening, but to get in there and shape it so that we act in a way that is consistent with NATO and do not allow the agenda to be set by those--I do not think that there are many--who want to undermine NATO. That is the right way to get results for this country.
Mr. Giles Radice (North Durham):
Does not the Vienna summit show that it is not a question of Britain standing alone, but of discussions and agreements that are of mutual benefit to the United Kingdom and to the European Union? Let us forget for a moment about the Conservative party and consider the Euro-sceptic press. Is it not time that they stopped trying to whip up anti-European hysteria and started reporting the facts about European affairs?
The Prime Minister:
People are entitled to their views on Europe, but it is best that we should judge everything according to the facts as much as we can. From a reading of the press in the rest of Europe on the Vienna summit and the British contribution, if there are criticisms of the summit they are not that it was the greatest step towards integration for decades, but that not as much was decided there as some would have liked, although I personally think that it was a successful summit. But the important fact is that the British contribution was welcomed. That is in our country's interests. We can satisfy the British national interest and be constructive in Europe because they are one and the same thing.
Mr. Ian Taylor (Esher and Walton):
Does the Prime Minister accept that after the publicity of the past few weeks, he has to do even more to persuade the British public and one or two people closer to home that positive engagement in the European Union is in the British national interest? When making that case, will he explain that reforms, such as that of the common agricultural policy, and enlargement will probably cost more money? Will he also explain that of course there
The Prime Minister:
I have set out our position on the euro. On the other points that the hon. Gentleman raised, it is important not to disengage from the argument on tax competition or unfair tax competition in the European Union because there is much to be gained by co-operating on these issues and much to be lost if we disengage. I hope that we have tried to explain that in the context of the Vienna summit. It would help--not to intrude too much on other disagreements--if people such as the hon. Gentleman were given a bit more support from their Front Benchers, as having a legitimate view about Europe in the Conservative party.
Mr. Denzil Davies (Llanelli):
I believe that my right hon. Friend mentioned that there is to be a Commission study into the taxation of savings. Will it involve looking at the different ways that income tax is imposed on savings, and the different rates of income tax on savings, in the different countries?
The Prime Minister:
The issue of savings tax has been raised specifically by countries that are worried about what they consider to be unfair tax advantages given in certain European countries. The withholding tax idea is something about which we have difficulties, because of the Eurobond market in the City of London. We have other difficulties with it, too. We are not the only country with problems there, and we have no intention of agreeing to anything that would sacrifice essential British interests.
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