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Ms Diane Abbott (Hackney, North and Stoke Newington): My hon. Friend will be aware that the Maastricht treaty--which I voted against because I read it from cover to cover--explicitly refers not only to monetary policy but to the need to harmonise fiscal policy. It is, as he said, an exercise in mendacity to pretend otherwise.
Mr. Cryer: My hon. Friend makes a good point. Anyone who has any doubts about the future direction of the European Union should read the Maastricht treaty. It is one of the biggest streams of right-wing monetarist poison that I have ever laid eyes on, which is why the previous Conservative Administration were successful in putting it through Parliament.
Can those who support the single European currency and try to argue that there will not be a move towards tax harmonisation say whether there is, anywhere in the world, a single currency but no single, central tax-gathering mechanism? Such a place does not exist, and any suggestion to the contrary does not hold water.
We are already experiencing cuts in regional funds. Objective 2 funds, for instance, will be spectacularly cut in the next year or two. Undoubtedly, one of the principal reasons for those cuts is that much greater funding is needed for the future single European currency. Any new currency requires enormous funds to create reserves, and funds must be moved around. That is why some of the structural funds are being withdrawn and money will be centred in the funds of the new single European currency.
With all due respect to my hon. Friend the Member for Doncaster, Central (Ms Winterton), we shall not gain the benefits that she has experienced in South Yorkshire and which she rightly welcomes. I come from Yorkshire, and the devastation of the mining areas is absolutely criminal; it was one of the greatest acts of political vandalism by the previous Government.
Dr. Godman:
I intervene in case people from Northern Ireland are listening to the debate. I am not a defender of the European Union, but I point out to my hon. Friend that all EU member states have given a commitment to continue funding the peace initiative, which is so very important to the six counties and the Irish border counties.
Mr. Cryer:
I thank my hon. Friend for that intervention. However, the withdrawal of funding from the structural funds will certainly intensify over the next years. I draw his attention to the McDougall report, which was recently released by the European Parliament. It says that the launch of any new currency requires enormous funding, equivalent to an income tax increase of several per cent. across the European Union. I do not hear many supporters of the single currency suggesting that we raise taxes by enormous margins to fund it.
There are one or two other matters to which I should like my right hon. Friend to refer in her wind-up speech. What progress has been made in reforming the common agricultural policy? That policy was another bequest that
the Labour Government made to a grateful nation in the 1970s. The CAP is swimming in corruption; for example, funds are diverted to non-existent projects.
Mr. Stephen Dorrell (Charnwood):
I enjoyed the speech of the hon. Member for Hornchurch (Mr. Cryer) on several levels. He referred at the beginning of his remarks to the fact that my right hon. Friend the Member for Horsham (Mr. Maude), the shadow Chancellor, was one of two Conservative Ministers who signed the Maastricht treaty. The hon. Gentleman has no reason to know that because of my right hon. Friend's interrupted service in the House, I assumed his responsibilities in the Treasury after the 1992 election and was the Treasury Minister responsible for taking the Maastricht treaty through the House. The hon. Gentleman said that he regarded the Maastricht treaty as the enshrinement of right-wing monetary discipline, and I am happy to accept that description of the treaty--it is one reason why I was happy to be the sponsoring Minister as the treaty went through the House in the early 1990s.
The hon. Gentleman made a number of points that touched a chord with me. He asked the Minister important questions about the terms under which a referendum would be held on British membership of the single currency, and I hope that the Minister will answer them directly. What the hon. Gentleman said about the developing world was interesting, and I shall return to that subject.
As the hon. Gentleman was speaking, I was reflecting on what I had in common with him on his approach to matters European. It is not a great secret that we do not have everything in common, but he and I are both wholly at ease with the histories of our respective parties in the development of the European argument through the 1970s and 1980s. He, I expect, is proud of the fact that his party's official line was to vote against British membership of the European Community in 1971. He, I expect, is proud of the fact that his party fought the 1983 general election on a commitment to withdraw from the European Union--a manifesto on which the present Prime Minister entered the House as a newly elected Member, which is an ironic reflection, in view of his new status as a Europhile leader.
I expect that the hon. Member for Hornchurch would have been pleased to vote against the Single European Act 1985, as well as the Maastricht treaty. I am proud of the fact that my party was responsible for taking Britain into the European Community, and I am proud of the fact that I voted for the Single European Act, and that I was one of the sponsoring Ministers for the Maastricht treaty as it went through the House.
One of the most depressing aspects of our present situation is that the whole argument about Europe is thought by some to be encapsulated in the argument about
monetary union. Those who are in favour of monetary union are thought therefore to be Europhile, whereas those who are suspicious or sceptical of monetary union are thought somehow to be Europhobic.
Even worse, those who are in favour of, or who at least leave open, the option of British membership of European monetary union in the future are said by some--I quote words that I have heard many times--to be "in favour of going in", whereas those who are anti-monetary union are said to be "in favour of leaving". Those phrasesare redolent with memories of the 1975 referendum campaign, when many of us thought that, once and for all, we had decided the question whether Britain was an active member of the institutions of the European Union or whether we were outside.
I hope that it is possible to conduct an argument about the future shape of Europe without concentrating exclusively on the question of monetary union, but for the record, let me say that I am agnostic on the question of monetary union. When I was the sponsoring Minister for the Maastricht treaty, I made it clear that I did not believe that the continental project was well judged. I do not believe that it has been introduced in circumstances that are ideal from the point of view of those who have participated in the early stages of monetary union. However, I also believe that, given that the project has gone ahead, we should be clear about two things.
The first is that the countries that have introduced the new monetary union are Britain's major customers. It is, therefore, in Britain's interests for their project to be a success. It is a simple rule of economics that what is bad news for our customer is bad news for us. Because it is in this country's interest for our customers' economies to be successful, I wish them well in their project, and I recognise that it is in Britain's interests for the single currency project to succeed. That is the first thing that ought to be clear.
The second is that if, in the fullness of time, we in Britain are persuaded that the project is a success, it will be in our political interests to join. I do not believe that that is clear yet, but if and when it becomes clear, it would be in Britain's interest to join a successful single currency on the continent.
If we are not "ultra" on the question--not against the single currency in all circumstances, but not in favour of it now--that seems to be about all that we can say about the single currency and Britain's prospective membership of it. If we are not in either "ultra" camp, we have a choice: we can have an everlasting dress rehearsal of the arguments that we may one day use for or against Britain's membership of the single currency, or we can move on to deal with the other issues that are on the European agenda and which are of more immediate interest to Britain in 1999. I shall take the second course in the debate.
There is an urgent need to articulate a clear vision of the kind of Europe in which we want to live, and to demonstrate how that broad vision can be translated into reality. So often the European debate is defined by what a participant is against. We are told that particular individuals are anti-euro, anti-federalist or anti- bureaucratic. There seems to be an interminable gallery of music hall rogues who are held up for us to take pot shots at, in order to define our position by reference to what we are against.
Is it not high time to set out clearly what our objectives are--not what they are not, but what they are? What kind of institution do we want to support and join, and why do we support such an institution? I have a simple way of summarising the type of European institution in which I want Britain to be an active participant. It is summed up by saying that I am a supporter of the Europe that is defined in the treaties--not a Europe described by the commentators, or a Europe held out as a distant prospect by the dreamers, but simply a Europe that is defined in the treaties.
It sometimes serves us well to pause and reflect on what is set out in those documents. First, the European treaties as they have evolved since the treaty of Rome define a union of nation states. The great majority of political decisions within the member states of the European Union remain outside the ambit of all the European Union institutions--in my view, quite rightly. Even that part of political decision making that is within the European Union institutions is not all within the institution of the European Community. That was the purpose ofthe intergovernmental pillar that was introduced in the Maastricht treaty, part of which I sponsored.
Even in the decision-making aspects that are within the European Community's ambit, a substantial proportion of those subjects is reserved for decision by consensus--that is, by unanimity. Only a very small part of the political decisions affecting member states of the European Union is open for decision by qualified majority voting, and almost nothing by simple majority voting. It is worth restating the extent to which Europe remains--in my view, quite rightly--a Europe of nation states with very little decision-making power affecting those nation states available to be decided even by qualified majority voting.
Secondly, we need to underline the proposition that the Europe defined by the treaties is a Europe about which the hon. Member for Hornchurch was sceptical--rightly, from his point of view--because it is a Europe committed to liberal economics. I mean liberal economics as properly understood, not as often defined by the modern day Liberal party. The Europe of the treaties is a Europe of nation states that recognise that they have a common interest in the efficient creation of wealth. That requires an open single market with effective pro-competition policy, effective action against state aids that would distort that marketplace and a clear commitment to open, free trade with the rest of the world.
I am not seeking to impose my interpretation on the treaties; that is all set out in the treaty of Rome, as amended by the later treaties. It was a treaty, in a word, written by the liberals. That is why, as an economic liberal, I support it, and why I am not surprised that the hon. Gentleman does not. The treaties were written not by woolly-minded liberals of the modern variety, but by liberals of the tough-minded radical variety that has come more recently to be called Thatcherite. They recognised the need not only to set out a general ambition to achieve a free and open marketplace, but to police that marketplace and ensure that those disciplines were not merely embraced in general, but applied in the particular.
The European Commission was set up to enforce the disciplines signed up to in the treaty, and the European Court of Justice exists to ensure that the institutions use the powers accorded to them and set out in that treaty. That is why I am in favour of a strong Commission acting within the ambit of the powers set out in the treaty.
Many of my hon. Friends, and members of other parties as well, become concerned when institutions seek to use injudicious wording in treaties to develop powers that were not intended to be accorded to them at the time that those treaties were signed. The Europe defined in the treaty--one committed to liberal free trade with institutions to police those disciplines--is the Europe to which I remain as committed today as I was when I campaigned in the 1975 referendum.
Having set out that framework, we have to test the extent to which the Government are pursuing those ideas. Against that test, there are a large number of respects in which I find them wanting. First, and most obviously, I want to associate myself absolutely with the remarks of my right hon. and learned Friend the Member for Folkestone and Hythe (Mr. Howard) about the Prime Minister's initiative, which was set out at St. Malo, on a European defence identity. I simply do not see where a European defence identity comes within the ambit of the core range of activities set out in the treaties.
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