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5.14 pm

Mr. Austin Mitchell (Great Grimsby): It is always a pleasure to follow the hon. Member for Wycombe (Sir R. Whitney) and his naive, Foreign Office-bred enthusiasm for Europe and all its works. Perhaps he should change the slogan, "My country, right or wrong," to "My Europe, right or wrong." I observe only that the hon. Gentleman is obviously still crazy after all these years; it is just that the nature of his asylum and the expressions on the faces of the warders around him have changed.

I have not spoken in a European debate for a long time. [Hon. Members: "Hear, hear."] I knew that enormous regret would be expressed. I thought that at this stage in the life of the Government it was time for a futile gesture. I should like to declare that I have a past that I have been trying to live down. I adhered to the truth that now, at least in the Labour party, durst not speak its name: I was a Eurosceptic. In fact, I still am. I have kept quiet about it because I did not want to affect my promotion prospects, but time is slipping away.

When I observed the dewy-eyed, naive enthusiasm for Europe in the faces of all my young friends--we are a young party now, refreshed and enthusiastic--I could not bear to tell them the truth about Europe, just as I could not bear to tell my grandchildren that there is no Santa Claus. Besides, it is fun watching the learning process that all Governments go through. Even Mrs. Thatcher was enthusiastic about Europe when she came to power and said that we were going to make our mark in Europe. The right hon. Member for Huntingdon (Mr. Major) said that we would be at the heart of Europe. We have come to power saying much the same rhubarb, but within a short time, we have been driven back into a recalcitrant position because of the remorseless drive towards unity which steamrollers over anything that this country has to contribute.

We are now reaching yet another of the crunch points that we experience in Europe, and it is the biggest since Maastricht. There is pressure to build a European

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superstate with all its appurtenances. While Europe is applying that pressure, the British public are having an increasingly strong reaction against spin and truth doctoring. Frankly, they are fed up with it, and so they should be. However, spin and truth doctoring are the cement that holds Europe together. The people no longer believe the rhubarb, whether it comes from the Government or the world's biggest rhubarb manufacturer, the European Union.

It is time that Labour Members and the Government, whom I support so strongly and energetically, are clear about what is happening. We always over-egg the case for Europe. It has produced so few real gains that it has to be hyped up as having enormous benefits. The leader of the Liberal Democrats is constantly telling us about the enormous gains that we make by being in the single market. I query that. We are still contributing, and our net payment is to rise to £4.5 billion. That is equivalent to a tariff on the goods that we export to Europe which is higher than the 4 per cent. external tariff that the EU would impose on us if we were not a member.

We carry the burdens of the common agricultural policy, even though that does not suit this country, as a net food importer. We carry the burdens of the common fisheries policy. If the single market is so good for us, why did we have a £64 billion cumulative trade deficit in the five years after it was set up, whereas our real surplus with the rest of the world was £48 billion in the same period? The single market has not given us the benefit or economic advantage that was claimed for it, yet we keep hyping it up.

That is the process of deceit that says that the people must be told things that are not true. They do not--they can stick with the truth. They might decide that it is worth while being in Europe for political reasons, but that is their decision; we do not have to tell them tall tales about the enormous benefits that we get, when they are not benefits at all. It is wrong to negotiate from the position that we will be weak and deprived of an enormous benefit if we rock the boat or resist the pressures from Europe to go further.

It is wrong, too, to scaremonger. I am glad to see the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Leicester, East (Mr. Vaz)--and he is a friend--on the Front Bench. He wrote to me and other hon. Members enclosing a copy of a speech in which he said:

We know where the anti-Europeans are--

"We know where you live brother." I hasten to add that he did not put that in handwriting at the end of the letter, as Lord Tebbit said. He said:

we will be targeting more than 60 anti-Europeans.

I was paranoid when the letter came. The speech continued:

We are targeting these people because they are involved in the irresponsible anti-European campaigning that has fostered public support for British withdrawal from the EU.

With the same letter he attached statistics showing that 8,893 jobs in Grimsby face the axe. People on the street corners were sobbing, saying "Protect us from this Keith Vaz, Austin. What are you going to do about it?" The letter said that 3.5 million jobs in the whole country face the axe. That just was not true. That was based on research by Professor Iain Begg, who should have had more concern for his academic integrity than to allow it

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to be published under the heading, "Jobs facing the axe", when, essentially, it was jobs which, in part or whole, were involved in trade with Europe. They did not face the axe. No one suggests that trade with Europe will stop. Even if we pulled out totally, it would not stop.

On the one hand there is the creation of fear, that if we do not go along with Europe we will all be unemployed, no investment will come to Britain and we shall be starving in the streets, and on the other hand there is the creation of a puff pastry picture of Europe with its infinite benefits. That reduces the whole process to a farce, which alienates the British people.

Now we face another crunch. My right hon. Friend the Member for Llanelli (Mr. Davies) said that the wagons are rolling. Well, the tanks are massing. This time there is a process of state building, because it covers defence, rights, law, currency--the central powers of the institution. That is always the case in Europe. When in doubt, drive the thing forward. The doubts were enormous in 1978, so the exchange rate mechanism was created to drive it forward. As a result, we had two decades of low growth and high unemployment.

There were doubts and hesitations again in the late 1980s, and the result was Maastricht. Now the whole thing is stalled. We have arguments between the Parliament and the Commission and between the Commission and the Council of Ministers. We have the argument over going wider and deeper. The whole thing is stalled. So, when in doubt drive forward, which is what is now being done.

President Chirac told us that the Franco-German drive motor is now running again--in the tank towards centralisation. The pressure is on. My right hon. Friend the Foreign Secretary says that we shall resist qualified majority voting. I am delighted to hear that, but there is a range of issues. There is qualified majority voting--the euro 11 of the Finance Ministers of the states in euroland. There is the argument about making VAT uniform. There is the CAP argument, because the CAP reform, which Britain wanted and for which our Agriculture Minister pressed strongly, was completely stalled by the torpedoing by the French of the Agenda 2000 proposals, and the withholding tax argument continues.

The problem is that we are fighting on so many fronts. Arguing and fighting in Europe is like wrestling with a blancmange--one is pushing at one point and engulfed at another. There is not a single front on which one can proclaim victory and come back saying, "Peace with honour," or "A piece of blancmange with honour." That is the engulfing process in which there is more horse trading than there is this week at Appleby horse fair. That is the system by which it lives.

We must have a clear position--thus far and no further. To come back and proclaim victory on e-commerce, or some other kind of magic formula that has suddenly converted Europe, is not good enough.

There are similar pressures over the euro. The enthusiasts for the euro as a currency are remorseless. For the European movement, it is a matter of religion. We heard that from the hon. Member for Wycombe. The enthusiasts want it because they believe that it builds unity, but they will not say that, so they conjure up economic benefits for the euro that do not exist. The consequences of joining the euro are disastrous for our democracy. The people know that. It means that we shall

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surrender the power to manage our economy, and run it for our purposes. That applies to our interest rates. I appreciate that we have surrendered power to the Bank of England, but we can take it back. If the power is surrendered to Europe, it is gone for ever. The accountability of a Government who fail economically and are thrown out is also gone for ever. What protest could people make against it? What influence could they have?

In the past couple of weeks, the Organisation for Economic Co-operation and Development report has given rise to the argument again. It simply stated that we were converging with euroland more than some countries in it. However, the real reason for the argument's re-emergence is the high pound. We are considering a sort of surrogacy; people who criticise the high pound view the euro as a way out. It is not. The pound is disastrously high, but it is impossible to turn to the euro to escape from the problems of the high pound.

The exchange rate translates our costs into their prices. It is therefore crucial. If we go in with a high pound, we are locked in at a level of uncompetitiveness, which will make it totally unprofitable to produce or manufacture in this country. We would be locked into that cost structure. Moreover, we must maintain the relative exchange rate for two years before entry.

I went to the Bank of England with a group of other Labour Members, and the Governor talked to us. We witnessed an amazing spectacle. We asked what we could do about the high exchange rate, which is hitting manufacturing. He advocated prayer. My mouth fell open and I began to mumble a few words of prayer. The position is disastrous, not only for exports, but for multinationals, which can no longer attract investment from parent companies because it is uncompetitive to produce in this country. Investment goes to markets with a more competitive exchange rate.

Next year, we will be in manufacturing recession. We are on the down escalator; next year, it will hit hard. It is hitting already--250,000 jobs have gone. If the Government cannot or will not get the pound down not only to protect, but to save manufacturing, it is inconceivable that they will get it down to enter the euro at a competitive rate. Yet they must get it down and hold it down for two years before we can lock into the euro at that exchange rate. All those who speak of the euro as an escape from our current severe problems are talking economic nonsense. It is wishful thinking. Early entry would mean starting the process of getting the pound, which is substantially overvalued, down to a competitive level now. That is the situation for the Government in their negotiations and the economy in relation to the pound.

This debate is reminiscent of 10 years ago. It is fascinating to revert to it. Our Front Benchers now adopt the position that Conservative Front Benchers took 10 years ago. Meanwhile, the Back Benchers are equally divided between euro-enthusiasts and eurosceptics. We are continuing with the same argument. The debate is like a piece of history; participating in it is a fascinating experience.

We must stop the arguments on the euro in the Cabinet. It is crazy to argue--that way lies the right hon. Member for Huntingdon (Mr. Major) and the fate of the

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Conservative party. We must stop pumping out myths about the extent to which we need Europe and the extent of our achievements there. We must maintain a firm and absolutely clear position in the negotiations. We must get Europe in perspective. European countries have had a competitive devaluation and their economies are roaring ahead. Our task is to get our economy roaring ahead to build up our strength. We can then make a decision on the basis of strength.

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