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4.38 pm
Mr. John Maples (Stratford-on-Avon): The hon. Member for Wimbledon (Mr. Casale) is right that some extremely important issues left over from Amsterdam have to be settled at the IGC. However, I do not intend to follow him too far down that road other than to say that I think that we should go for a radical reduction in the size of the Commission, freeze the size of the European Parliament and go for a dual qualified majority hurdle in the Council of Ministers.
I want to look at what kind of a European Union is being created. I have spent most of the past year getting to know European politicians and the institutions of the European Union a lot better. I started the journey as a mild Euro-sceptic, and I am afraid that I ended it as a rather less mild Euro-sceptic. I defy anybody to spend a lot of time with the European Parliament or the Commission and to love it any more after the experience than they did before.
What concerns me is that a great many European politicians, from the Commission and from the European Parliament, advocate an agenda for far greater integration. That was outlined by the right hon. Member for Llanelli (Mr. Davies). When I held the position now occupied by my right hon. Friend the Member for Horsham (Mr. Maude), I set out the alternative of a flexible Europe, where everyone was not bound by the same rules.
There are two ways of dealing with the problem of enlargement. It is right that a European Union of 30 member states cannot subsist according to the present model and with the present rules. We could either go for increased integration--lots more qualified majority voting, where the majority wins and everybody complies with the rules--or we could have a much more flexible attitude as to which rules everybody must comply with. We should then have a multi-speed Europe or a Europe of variable geometry--depending on the phrase one wants to use. Those are the alternatives.
Unlike my right hon. Friend the Member for Skipton and Ripon (Mr. Curry), I do not believe that there is a third way. One of the fallacies is when people kid themselves--the Foreign Secretary is one of them--that they can finesse their way through this jungle. One has to make up one's mind about which model one wants.
We must face what further integration means. It may not happen at this intergovernmental conference--it may not happen during the next two or three years--but the direction and the destination are becoming clear. Further integration means more power to the Commission; more decisions taken by qualified majority voting; home affairs and foreign affairs coming under the first pillar of the treaty; and one legal area. The euro is already leading to pressure for a single fiscal policy. Mr. Solana has called for the EU to have a seat on the Security Council of the United Nations. There is talk of a constitution. The charter of fundamental rights sounds very much like the United States Bill of Rights--we all know about the extensive federal law that has been built up by the Supreme Court on the basis of that document.
If the EU has all that--a currency, a foreign policy, a Bill of Rights and a court--it will be like a state. That has not happened yet, but it is the direction the integrationists want to take. I should be very unhappy about that. It could work as a way of dealing with an enlarged community of 30-plus member states, but it would result in a massive loss of sovereignty for all the countries of Europe. I am especially concerned about the United Kingdom, but the matter is important for the many countries of Europe that have proud histories as nation states. Furthermore, it would bring more and more costly regulation on business flooding towards us. I shall say more about that later.
I understand those who argue for a federal European superstate model of increased integration. I can see why some people feel that that is a great internationalist ideal. Obviously, I can understand my own point of view--that that is wrong and that a flexible Europe would be better. However, the real danger is to pretend that one can finesse one's way through and that the dangers do not exist. We have been hearing for too long that, for example, the social charter was just a series of aspirations and would amount to nothing. Within five years, it was the social chapter. It now produces law, which is binding on us. If we want measures such as the working time directive-- I realise that that does not come under the social chapter--we should pass them in the House so that if, in a few years' time, we have a new Government who want to change them, or if different circumstances prevail, we can change them. However, we cannot change measures that come in the form of a European directive.
To those who say that the European superstate is a bogey, that further integration is a lot of nonsense and that we do not have to worry about it--that we are paranoid, in the words of the Minister for Europe--I reply that they
should read what is being said. They should read what was in the Finnish presidency programme. Six months ago, it referred to qualified majority voting on tax to prevent harmful tax competition. The Helsinki conclusions stated that the
- IGC will examine the extension of qualified majority voting.
The Commission's proposals in November last year, under Mr. Prodi, and in January this year state that QMV should be the rule and that, on taxation and social security, there should be QMV in so far as it relates to the single market. I do not know what the single market excludes when it comes to deciding whether differences in tax and social security can have "harmful competitive effects", but I know who that proposal is aimed at: it is aimed at us. We have the most benign tax and social security arrangements.
Those proposals--like the costly regulation on business--are to do with countries that have uncompetitive tax regimes and costly business regulation. Instead of tackling those problems domestically, as we did in the 1980s, they want to put the same ball and chain around the feet of all the other people in the EU. We should resist that. The Portuguese presidency's note stated that tax rates and bases might need to be harmonised and suggested QMV.
Those are the people who will hold the presidency at the Feira Council--fixing minimum rates; taxing company profits; imposing environmental taxes and other forms of direct taxation. The Commission reiterated the point in its communication in March. It stated that QMV on tax would be necessary to allow the
- proper functioning of the internal market.
- Germany favours the broadest possible extension of qualified majority voting.
It may be that the Foreign Secretary and the Prime Minister will go to Nice and say no--although I doubt that from the Foreign Secretary's previous voting record. However, they would have to do that to stop the process. At some point, someone will have to say no. It is a relentless tide. The process is being pursued openly, honestly and, I believe, honourably by many of our partner Governments.
My exposure to the views of European politicians during the past year--which has been extensive, on both the left and the right--has shown me that most people share that view. That is where they want to go. They have a different view of what the nation state is about. For us, it is a proud and successful institution. For most of them--as my right hon. Friend the Member for Skipton and Ripon said--the second world war was a disaster for their nation state; they are happy to create something else.
Some of them have serious regional problems that make national government difficult--for example, Belgium, Italy and, to some extent, Spain. Others receive large cheques. I dare say that, if our cheque were as large as the one received by Ireland, our view of the EU would be rather different. The amount would be £1 billion a week if it were 7 per cent. of our gross domestic product, as it is in Ireland.
One of the reasons we need flexibility is not merely to avoid the superstate route of integration, but the raft of costly regulation that is being imposed on European business. It all adds costs. It is estimated that the working time directive has added costs of £2 billion to British business. The bureaucracy for works councils will also be costly.
The EU is turning its attention to e-commerce. That is the most internationally mobile business, but Brussels thinks that it can regulate it and impose VAT on it. That will lead to uncompetitiveness. The costs imposed on European businesses will be far higher than those imposed on our competitors. Unemployment in the EU is about 11 per cent., whereas in the United States it is 4 per cent. The US created more jobs in one month last year than France and Germany together created in the whole of the 1990s.
It would be all right to put balls and chains round everyone's feet if we were operating in a vacuum. However, the Americans do not follow that approach in south-east Asia; they try to make businesses more competitive and to reduce the costs that Governments impose on them. If we persist down this route, the danger is that we shall be uncompetitive and lose jobs. In addition, the protectionist instincts that are in the forefront of the minds of some politicians and countries in Europe--particularly France, which killed off the transatlantic marketplace that Leon Brittan tried to develop with the Americans--will be followed. If we finds ourselves becoming uncompetitive, the answer will not be a bonfire of regulations and taxes, but the reintroduction of protectionism. There is a good practical reason to choose a flexible arrangement and to resist more integration.
I share the view of many Conservative and Labour Members that the European Union has been of enormous benefit to us and to Europe. Its promotion of competition and free markets when that was unfashionable was very valuable. The free trade agenda, uncompleted as it is, is important. The EU has helped to tackle the problem of state aids; it has given us help in attracting the lion's share of the EU's inward investment, which is what we get; it has entered into trade negotiations with the United States and Japan; it provided European cohesion and vision in the face of Russian hostility during the cold war; and it brought France and Germany back together so that it seems inconceivable that they will fight each other again as they did three times in 80 years. Those are all huge benefits.
However, there is a massive uncompleted agenda. The visionaries are toying with a superstate, integration and a charter of fundamental rights, but let me suggest a few things that should be on politicians' practical agenda and that would benefit the citizens and businesses of Europe. They include agricultural reform, tackling fraud and waste and completing the free trade agenda. There are 15,000 separate external tariffs for imports into the EU. We talk about rip-off Britain, but--my God--it is rip-off Europe. Why should European consumers pay a 10 per cent. tax on imported biscuits or chocolate, or 9 per cent. on ski boots for some bizarre reason? The average tariff may be 4 per cent., but many tariffs are 10 per cent. or more.
State aid is another issue. Enormous state aids are paid to Alitalia, Air France and the German banks, which receive subsidies from their Lander. The completion of a single market in services is far from being achieved and the transatlantic marketplace is another objective that we should achieve. On enlargement, it is a scandal that countries have waited 10, 11 or 12 years from the end of the cold war to become members. The European Union has a huge role to play in regenerating the countries of central and eastern Europe and their economies, in creating a constructive relationship with Russia and in helping to manage its relationship with Europe and, I hope, in bringing peace and stability to the Balkans.
The European Union has a huge unfinished agenda of practical measures that it could carry out. In many cases, they have been started on, but politicians seem to have given up on them because they are too difficult to achieve. Therefore, they go for integration and a charter of fundamental rights so that they can talk philosophy. It is like a business man giving up on earning his first £1 million because that is too difficult, and starting to try to earn his second. We should return to the agenda for which the European Union exists--the things that it can deliver. We should forget or leave to the far distant future all the philosophy about a single state and integration. The agenda of practical measures that still need to be achieved does not require qualified majority voting or a Bill of rights; it can be done without them. That is the right approach for Britain to take.
I want to say something about the European security and defence identity, because I think that the Government are making a mistake on that. The proposal is part of trying to create a state, and it is a dangerous way to proceed.
People say that it is impossible to achieve the strategy that I have outlined, but I do not think that it is. We were told that it was impossible to achieve an opt-out on the single currency and the social chapter, and Margaret Thatcher was told that it was impossible to obtain a rebate. However, all that was achieved. My aim would not be possible through the Government's supine style of negotiating. They give way on the social chapter and the European security and defence identity without receiving anything in return. However, if we negotiated hard, we could do the things that I have described. We would then achieve my vision of Europe and the vision of the vast majority of Conservative Members and people in the country. We would create an open, outward- looking, free enterprise and free trade
Europe--a flexible Europe of nation states. It is time to stop being carried along on a tide of unnecessary integration and damaging regulation.Of course, we are fundamentally part of Europe, but we are part of the world as well. We have a long history as a proud, independent and successful nation state.
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