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Mr. Tim Loughton (East Worthing and Shoreham): My hon. Friend is right. There could not be a starker

13 Jan 1999 : Column 402

contrast between the transparency of the debate taking place on the continent and the opaqueness of the one going on in the Government. Is she aware that in the Financial Times today, Joschka Fischer is reported as saying:

    "The introduction of a common currency is not primarily an economic, but rather a sovereign, and thus eminently political act"?

The position could not be stated more clearly than that. Why do not the Government come clean and acknowledge that that is what the whole project is about?

Mrs. Browning: Indeed. The German agenda for the presidency is to move that project along in the next six months. The Government would do well to consider the views expressed tonight by my right hon. and learned Friend the Member for Sleaford and North Hykeham (Mr. Hogg), who argued that the Government should recognise that the British people may be ignorant of the consequences and the constitutional price of monetary union. The populations of the member states may not be prepared to accept that determinations and decisions will be made by people who are not necessarily their democratically elected representatives. That is a potentially dangerous state of affairs, and the Government should not gamble with the prospect simply because they are in a corner, having promised a referendum, but knowing that the people would not support them.

I hope that I have shed a little light for the Liberal Democrats and explained why they are frustrated by the reluctance of their partners around the Cabinet table to move as quickly as they would like. I am sure that the Government would have moved much faster, were it not for the fact that opinion polls tell them that they are out of tune with the British people. The Government's plans are not in the interests of the British people. Unless they can guarantee that the British people can continue to have democratically elected representatives to speak for them on a range of issues including taxation, spending, defence policy and foreign policy, they will pay the price, and not only in electoral terms.

9.25 pm

Mrs. Louise Ellman (Liverpool, Riverside): Both the motion and the Government amendment emphasise the importance of a comprehensive economic policy to support business and to develop and implement that policy as part of Europe. Currency and the euro are extremely important issues, but so are policies that relate to investment, focusing investment and the interests of the regions. One of the Tory Government's legacies when they left office was the fact that not one region of the United Kingdom had a gross domestic product per head which could meet the European average.

Since taking office, the Government have managed to secure a major sea change in attitude. They have put jobs at the top of the agenda both in this country and in Europe. They have gone forward with a positive regional policy in a way that the previous Government refused to do. One of the consequences of the Conservative Government's refusal to accept regional policy was that the regions could not benefit fully from European policies that were based on reflecting the strengths of the regions across Europe as a whole.

In the 1980s and the early 1990s, local authorities had to come together and form their own partnerships with the private and voluntary sectors to ensure that they could

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work directly with the Commission in attracting structural funds to develop and support industry and in developing policies to promote certain sectors of industry.

Mr. Loughton: Will the hon. Lady give way?

Mrs. Ellman: No. I am sorry, my time is limited.

It was because of the initiatives that came from the north-west region, in working with other regions of Europe, that the PERIFRA and Konver funds were set up to support defence diversification. That initiative was able to assist so many jobs in the north-west.

One of the new policies that the Government have implemented is the acceptance of regional devolution. The development of regional development agencies together with regional assemblies means that we shall shortly have in place the mechanism to attract European funding and to shape the form of European regional policies so as to give maximum support to our areas.

The innovative Merseyside special investment fund has shown already how £5 million of European funding has attracted £15 million of private funding to support 1,100 jobs. That is only one sign of the support and benefit that has come from Europe.

I note that the Opposition have learnt nothing. They opposed our involvement in Europe, which meant that our regions did not fully benefit from European regional policy. They still oppose regional policy and regional development agencies. If the Opposition were to have their way, we would still not have that support.

Our new devolved regional structures mean that, for the first time, we shall be able to maximise the benefits of focused economic policies, putting together single regeneration budgets along with European structural funding based on the strengths and needs of our regional economies.

The questions of currency and the euro are important. It is to the Government's credit that they are to take a decision on timing in the national interest. It is important also that we recognise the differing needs of different regions in this country and create structures enabling us to make the best use of European funding by our active participation in Europe. That will enable us to shape policies for the benefit of the people, jobs and the generation of wealth.

9.29 pm

Mr. David Heath (Somerton and Frome): We have had an interesting debate, including many interesting and thoughtful speeches. The Chief Secretary to the Treasury said little, but said it, as always, eloquently, which might fit in with the best possible job description of a Chief Secretary. The hon. Member for Ealing, Acton and Shepherd's Bush (Mr. Soley) mildly castigated us for not extending the debate to wider issues. We should have loved to debate the common foreign and security policy, but we have done so before and shall do so again. We cannot debate every aspect of Europe every time a short debate is allotted to us. The hon. Member for Gloucester

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(Ms Kingham) made a fine speech on international aid, and the speech of the hon. Member for Liverpool, Riverside (Mrs. Ellman) was also good.

Mr. Loughton: Will the hon. Gentleman give way?

Mr. Heath: I do not have time as there are only 15 minutes in which to sum up the debate.

Among the Conservatives, the right hon. Member for Wells (Mr. Heathcoat-Amory)--no longer in his place--concentrated on the important issue of fraud, to which I shall return shortly, and on which I share much common ground with him. His remarks on the euro I found rather more cock-eyed. All the Conservatives who spoke talked of the constitutional implications of the euro, and about how they are a bar to their supporting membership of the euro. If that is so, there can be no time limit to that bar. It is intellectual nonsense for the Conservatives to persist in the notion that they can simultaneously say that there is a constitutional bar, and that the timing forms part of their policy. That is as nonsensical as the Labour party waiting for Murdoch.

The right hon. and learned Member for Sleaford and North Hykeham (Mr. Hogg) spoke interestingly on the European Council. He recognised the point that we have made repeatedly about the lack of democracy and accountability there. I do not quite share his doom-laden view of the likely outcome of any reforms, but we must keep asking questions about that part of the European Union.

Mrs. Browning rose--

Mr. Heath: I shall give way to the hon. Member for Tiverton and Honiton (Mrs. Browning) but she must be very brief.

Mrs. Browning: The hon. Gentleman is most generous. May I clarify Conservative policy, which has been endorsed by a vote by our membership? When there is a referendum, either in this Parliament or the next--hence the 10-year period--we shall campaign for a no vote. Whether it is this Parliament or the next, if the people vote yes and we enter the single currency, any policy that follows will be academic, as the country will have been sold for 40 pieces of silver.

Mr. Heath: I absolutely agree that we need an early referendum that will allow the people to decide. I find it hard to be too harsh on the hon. Lady as she said earlier that the Liberal Democrats were lovable and consistent, neither of which words I can ever use to describe the Conservative party. I wish I could reciprocate, but I cannot.

I shall not dwell on the euro, as my hon. Friend the Member for Gordon (Mr. Bruce) has covered it, but we must not underestimate the many difficulties. A successful launch is one thing, but further difficulties will be experienced over the years to come. We want the Government to prepare for those difficulties, and to allow a choice to be made in the country. There is a gathering case behind those who see joining the euro as an essential part of Britain's economic future. We want an informed debate and the early consent of the British people to the

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proposal put before them. The difficulty will come if matters are delayed to the point at which there is a self-defeating prophecy.

The second part of the motion suggests establishing a constitution for Europe. I am loth to use that expression, because it can be misinterpreted. However, our motion makes it plain that we are talking about defining and limiting the powers of European institutions, the constitutional relationship between the European Union and member states, and the rights of citizens. Most of all, we are talking about a European Union that is open, accountable, democratic and decentralised.

I am disappointed in the Government's amendment, which contains not a word about democracy, accountability or decentralisation. The problem is that the amendment was drafted in the Treasury, and no one sent it across the road for the views of the Foreign and Commonwealth Office, which surely would have wanted to say something about the structures of Europe that are not Treasury led. Such omissions would be a shame at any time, but they are a particular shame in this week above all weeks, given the unfolding crisis in Strasbourg and the clear demonstration of some of the basic problems that we have for many years identified in European Union institutions.

The difficulties that the Commission has faced go to the heart of the issue of accountability. This is a critical time for the European Union. Hon. Members may say that it is always a critical time for the EU, but it is one now because a strategic agenda is on the table, in which the Commission must be involved--whether we are talking about the introduction of the euro and its development, the problems and opportunities of enlargement, or the minor but important reforms that flow from the Amsterdam treaty. Astride that agenda is the Commission--its members and the advice that they give. That is why confidence in the European Commission is so vital and why we stress to such a great extent the need for the Commission to be more accountable.

That accountability does not exist. We cannot talk about the Commission being accountable while it retreats behind a facade of collegiate responsibility. We cannot do so when the only tool of remonstrance available to the Parliament charged with proper scrutiny of the commissioners is the nuclear option of sacking the lot. Also, we cannot talk about accountability while some Members of the European Parliament use a scatter-gun approach, slinging mud at every member of the Commission to make their point, when clearly there are omissions and commissions on the part of one or two of them.

When Jacques Santer was appointed--let us remember that he was the British Conservative nominee for the presidency--he talked about zero tolerance of mistakes in financial affairs in the European Union and he has talked about it again since. His control of the Commission does not engender much confidence in that approach; it is not zero tolerance, but simply zero. Last November, the report of the Court of Auditors was qualified for the fourth year running. Why? Because of

and because the incidence of financial errors was so high that the court

    "has had to give an adverse opinion on legality and regularity."

It was also because £3 billion was fraudulently spent, or could not be accounted for.

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What was Jacques Santer's reaction? He suspended the whistleblower. He castigated the Swedish Prime Minister, Goran Persson, when he had the temerity to suggest that all was not well. He then tried to bluff his way through by demanding a confidence vote, which I am sorry to say the socialist group connived at and aided and abetted. That was Santer's Christmas.

That is no way to run anything. If individual commissioners, such as Manuel Marin who is responsible for the budget, which, as the hon. Member for Gloucester said, seems to be out of control, and Edith Cresson, who is said to have abused her position because of the way she appointed consultants and others, can hide behind a spurious Cabinet responsibility, which really amounts to irresponsibility and unaccountability, we have to ask why. The buck has to stop somewhere. That is why our colleagues in the European Parliament will be pressing the censure motion on those two commissioners to a vote tomorrow; I hope that they succeed. I am told that they will receive the support of the Greens and the Gaullists, but it is likely that the vote will fail because the socialist and Christian Democrat groups have been persuaded by Mr. Santer and bullied and cajoled by their Governments into a compromise. I gather that British Tory MEPs will support the Liberal Democrat motion in the European Parliament tomorrow, and that several British Labour MEPs will also do so.

We have a Conservative group in Europe that cannot persuade any colleagues to join it in putting the Commission to an accountability test, and Labour is split because it cannot understand the tergiversations of Pauline Green when she tries to hide the Commission behind a cloak of procedure. There must be a better way to manage the European Union, and we must be in the forefront pushing for it. That is why it is so disappointing that our Government cannot lead a strategy to sort this out. One cannot be both a friend of Europe and a friend of fraud, incompetence and mismanagement. If one is for Europe, one must be for a reformed Europe. That is why accountability and democratisation are so important; they make reality out of the rhetoric.

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