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Mr. Hogg: I do not believe that it is possible to impose an entirely integrated state on the peoples of Europe unless it is underpinned by consent, and I do not believe that consent would exist without a genuine sense of statehood.

I accept that the picture that I have painted is somewhat bleak, but I have not concluded that we should leave the European Union, although, in certain circumstances, I might reach such a conclusion. We should, however, ask ourselves what we should do, given a fairly bleak assessment of the facts.

First, we must communicate our anxieties to the peoples and Governments of Europe. They are well founded and worth communicating, and they need to be defended and justified as arguments. I do not believe that we should embark on any further policies to deepen the integration of Europe unless they are underpinned by genuine consent. I am thinking in particular of the single currency. Unless there is genuine consent in the country, manifested by the result of a referendum, we must not join a single currency.

In the European Union, there will be many occasions on which other member states wish to proceed with projects to deepen the process of integration, with which we do not wish to be associated. In such circumstances, we should stand aside and refuse to join. There will be a

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price to pay, in terms of less influence than might otherwise exist; but, ultimately, a judgment must be reached. Personally, I would accept less influence in the European Community rather than paying the price represented by the alternative--the loss of much more sovereignty in return for, perhaps, a little more say.

I view the future with considerable concern. What I have sketched is a bleak scenario. I believe that the process leading to greater integration is now irreversible; I do not think that the House, the Government or anyone else will be able to stand in its way. I think that the chance of effectively reinforcing the democratic restraints in Europe and creating democratic structures that mean something are very small, and I anticipate greater integration without proper control. At that point, there is a grave danger of disintegration. It may be triggered by the single currency: I believe that is precisely the sort of issue that might trigger disintegration. If that happens, the duty of Governments, of parties and of the House is to recreate arrangements that retain much of what is valued in the European Union, while avoiding the dangers that are inherent in a state that is too integrated and too closely combined.

I am against a united states of Europe, and I believe that the feeling of the House is against it as well. I condemn the Government for smuggling the process in.

8.58 pm

Ms Tess Kingham (Gloucester): I am grateful for the opportunity to speak. I, too, wish to concentrate on the latter part of the motion, which asks for an open, democratic and accountable European Union and open, democratic and accountable European institutions. In doing so, I shall focus on two separate but related questions. The first relates to the way in which the EU aid budget is allocated and prioritised; the second relates to the wider role of the EU. I agree with what was said by my hon. Friend the Member for Ealing, Acton and Shepherd's Bush (Mr. Soley) about the role of the EU in the wider world, and the need to ensure that peace continues in the Mediterranean and north African region. I think that the United Kingdom Government has a role to play in that regard.

Over recent weeks, we have all been disturbed to see the debacle in the European Commission and to hearthe allegations that have been flung at specific commissioners, ranging from fraud and corruption to economic mismanagement. That is nothing new. It is perhaps on a scale, that we have not seen before, but there have been allegations of fraud in the past.

My recollection of past activities is different from that of the right hon. and learned Member for Sleafordand North Hykeham (Mr. Hogg). Having been a Euro-candidate and concerned with European affairs for many years, my recollection is that it is Labour Members of the European Parliament who have always been known as the biggest fraud busters in the EU, and Tory Members of the European Parliament who have fairly consistently blocked and failed to support measures to combat EU fraud

One of the commissioners who has been under the spotlight recently has been Mr. Marin, a commissioner with responsibility for part of EU aid spending. That is a sector that concerns me considerably. I worked in the international development sector before coming into

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Parliament. I am a great believer that much of the EU aid programme does much good, but there have been many questions about how the EU aid budget has been spent.

How is the budget spent? Is it transparent? Is it open enough? When the aid reaches its destination, is it effective? Is it well delivered? Those questions have hung around for many years. They are coming to a head at the moment.

One of the first things that the Labour Government did on getting into power was to produce a White Paper on international development. We clearly laid out our priorities for how aid should be spent. It was well received by almost everyone who has a role in international development. The Labour Government stated clearly that aid should be spent on eradicating poverty, and that the UK aid budget should be targeted on the poorest countries to help the poorest people--that aid should be prioritised for the poorest countries. We were also brave and right finally to untie our aid budget from trade and other domestic interests. I am sure that my constituents in Gloucester would assume that that was also the case in Europe. I am sure that they and taxpayers throughout the country would assume that EU aid is prioritised in the same way--that it goes to the poorest countries. I would assume, as I am sure that most of us would, that the major beneficiary of EU aid, the country that receives the most, would be one of the poorest countries.

Information that came to us at a recent public meeting of the Select Committee on International Development showed that that is not necessarily true. I was shocked by what I heard. There has been a monumental shift in relation to the country that receives the most from EU aid spending. That is something that the Government need to be aware of and that we should look into.

In 1986-87, the country that received the most from the EU aid budget was Ethiopia, which received $157 million; quite right--Ethiopia is a very poor country. In 1991-92, Ethiopia was again the top recipient; it received $257 million in EU aid. That is fine. It is just what I would expect. It is consistent with the UK's aid policies.

What about 1996-97? Which country would we assume received the most EU aid? I would assume that it would be a country such as Ethiopia again, Mozambique, Bangladesh or Rwanda--a country that has a very low gross domestic product and is one of the poorest in the world. Is it? No. It is Morocco. In 1996-97, Morocco was the top recipient of EU aid. How did that come about? Morocco shot up from nowhere to become the top country receiving EU aid; it did not even feature in the top 10 countries receiving EU aid in the previous 10 years.

I have a big question about how that happened and how Morocco has been prioritised in that way. I cannot believe that, all of a sudden, Morocco has dropped in the world rankings, ceased being a middle-income country and suddenly become one of the poorest in the world. It is obvious and transparent that the EU is prioritising its strategic interests over the needs of poor people throughout the world. That is not what I would call open, accountable and democratic practice.

If we allow such practices to continue, the EU will be prioritising trade policies, our own domestic interests and our interests in having secure borders ahead of using aid money as it should be used--to provide aid. The Government should be investigating the matter, and the United Kingdom could be playing a strong role in determining Europe's aid priorities.

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Morocco is not only a middle-income country receiving EU aid, but is spending about $1 million a day illegally occupying Western Sahara. Therefore, while receiving EU aid money to the tune of $280 million a year, it is spending about $365 million a year illegally occupying another country. Allowing such a situation to continue does not demonstrate good, open, democratic and accountable governance in the EU, and hon. Members should be pressing the United Kingdom Government to make representations about it in EU institutions. The EU aid budget is intended not to serve the EU's strategic interests, but to help the poorest people in the world.

The EU should be flexing its strategic muscles and promoting good practice by trying to ensure that peace continues in the Mediterranean and north African region. The EU and its member states, including the United Kingdom, should be examining very closely a conflict that is brewing once again very near to our borders, in the Western Sahara. The Moroccan Government have not responded positively to a new peace package proposed by the United Nations. The mandate for the United Nations peacekeeping operation in Western Sahara expires at the end of this month, on 31 January.

I believe that the United Kingdom Government, the EU and the EU member states have a very important role to play in urging Morocco to move towards peace, and to accept and respond positively to the new United Nations peacekeeping package. If Morocco does not respond positively, the mandate will expire on 31 January, the United Nations is likely to pull out, the area is likely to tip back into conflict, and there is likely to be instability and devastation on the EU's doorstep.

The EU's strategic interests can be served best by ensuring that that part of the world has an opportunity to enjoy sustainable development and by ensuring that peace is maintained in the region. Building peace in Western Sahara and ensuring that it can develop with a sense of freedom would achieve those objectives.

The second part of the Liberal Democrats' motion urges the Government to play a wider role in Europe and not only to consider the effects of the euro. Like my hon. Friend the Member for Ealing, Acton and Shepherd's Bush, I also urge the Government to ensure that we have peace in the areas bordering the European Union. Peace in Western Sahara is an important strategic matter for the EU. I also have some questions about the prioritisation of EU aid.

I should therefore like the Government urgently to deal with prioritisation of the EU aid budget and to urge Morocco to respond positively to the United Nation's peace package, so that we can help to achieve peace in the region, which would serve everyone's strategic interests.

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