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Mr. Deputy Speaker: Order. I call Mr. Kelvin Hopkins
Mr. Kelvin Hopkins (Luton, North): One of the great pleasures of entering the House was that it gave me the opportunity to listen to the speeches of my right hon. Friend the Member for Llanelli (Mr. Davies) and of my hon. Friend the Member for Great Grimsby (Mr. Mitchell). It is a special pleasure today, because I actually agree with them. Right hon. and hon. Members will not be surprised, therefore, when I say that I do not support economic and monetary union.
I was most interested by the contribution of the right hon. Member for Skipton and Ripon (Mr. Curry), who said that EMU and the single currency were about the Thatcherisation of the European economy. If by that he
means supporting neo-liberalism, the free market and taking the Government out of the economy, I agree with him, because that is what the EMU project is about. Taking away from elected Governments the power to operate the levers of macro-economic policy, leaving the rest to the market and letting it do its worst is surely the Thatcherisation of an economy. That is what I think that the project is about, which is why I oppose it.I believe that democracy is about having control of one's economy, even within a relatively "marketised" economy such as ours. It means having control of the macro-economic framework in which it operates and having a system of laws, taxes and fiscal policy that govern the way in which our lives are run. It gives us our living standards and a sense of equality, redistributes income, and so on. It is legitimate and necessary for democratic Governments to have some control in that respect. This project is about taking away that power, which is why I am unhappy about it.
I was also interested in the right hon. Gentleman's reference to the contrasting views of how Europe should progress within the European Union as it stands--the dirigiste versus the neo-liberal. The right hon. Gentleman is right. Sadly, one or two genuine friends, such as John Monks, secretary general of the TUC and former colleague, think that they are signing up to the dirigiste version when they support the single currency, but I think that they are signing up to the free market version. This is where we have an interesting debate.
There is tension in Europe. When it becomes clear to people, particularly in the trade union movement for example, that we are moving towards a much more open free market and away from laws that protect working people and ordinary people, I think that they will start to think more seriously about it.
There is scepticism within the European Union even now. I have spoken at many meetings with colleagues from the continent. Indeed, some time ago, I asked Finnish newspaper editors what the view was in Finland where, in general, the population is opposed to the single currency. I asked, "What would you do if there were a referendum?" They answered, "We wouldn't have a referendum because people would vote the wrong way."
I am glad to say that our Government will be holding a referendum, and I hope that people will vote in what I think is the right way. I think that the majority view is against having the single currency in Britain.
Another interesting point is the emphasis on economic success in the European Union. In the 1960s, there was, in total, a growth rate of 5 per cent. in the European Union, which was higher than that of the United States of America, and there was relatively full employment. At present, the growth rate is about 2 per cent., with about 10 per cent. unemployment. Growth in the EU was ahead of the US, but it is now well behind. I do not suggest that we should adopt US policies; I am only demonstrating that the EU has not been successful in economic terms.
It is interesting that some EU countries are doing quite well. One is the UK. We have lower unemployment than the rest of the EU. Sweden is doing even better; it has a rapid growth rate, a healthy economy, high living
standards, an expansive welfare state and lots of worker protection, as well as low inflation. It is significant that Sweden and Britain are outside the single currency.Swedish newspaper editors and representatives of Swedish business organisations have told me, "Your views are the same as those of the Swedes." I am glad that the Swedes are so sensible--they, too, hold the view that co-operation in Europe is fine but that the single currency, EMU model is not.
It has been suggested that people who share my views are against Europe. I am a European, root and branch. In a few weeks, I shall be sojourning in Burgundy, sampling its pleasures. I love Europe; I go to the continent for my holidays every year. I try to speak other European languages--although not very well. I am a European in every sense, but I do not support the particular economic project--EMU--that is being proposed.
There are alternative ways to run Europe. We have heard some suggestions during the debate. On another occasion, my right hon. Friend the Member for Chesterfield (Mr. Benn) proposed a democratic commonwealth of nations in Europe--stretching from the Urals to the Irish sea. That would not exclude any nations; nor would it promote the dangers that have been referred to in the debate--for example, that there would be a hard division between those countries that were in Europe and those that were in the EU.
Mr. Bercow: I hope that the hon. Gentleman will not pursue his economic reductionism too far--notwithstanding his views on the Thatcherisation of Europe. Does he agree that, when the President of the European Commission, the president of the European central bank and the Chancellor of Germany all agree that the European single currency project is about the creation of a European state, it is incumbent on the Foreign Secretary to explain why they are all wrong and he is right?
Mr. Hopkins: My right hon. Friend can speak for himself, so I should not presume to answer that question. Hon. Members can probably guess my views.
During the past few years, the right hon. Member for Old Bexley and Sidcup (Sir E. Heath), a former Prime Minister, has spoken in the Chamber against enlargement. He realises that it would change the nature of the EU; it would loosen the bonds that have built up between a tightly knit group of western European nations. That is why he is against it. I am inclined to support enlargement for the same reasons--provided that it goes right across Europe. It will force us to think about a reasonable way forward for Europe rather than pursuing the EMU project. There are alternatives.
I speak in jest but I was reminded recently that, some years ago, there was a proposal for a socialist states of Europe. I am not a Trotskyist but apparently, in such circles, they talked of little else 30 or 40 years ago. Despite my democratic socialist views, I think that is unlikely, but it is an alternative possibility.
There are many approaches that Europe could adopt--including the big tent or the commonwealth of nations. I hope that the Government and the House will examine them objectively and fairly and that they will not plunge straight into EMU and the single currency--that would be a mistake.
6.14 pm
Mr. Ian Taylor (Esher and Walton): We have heard a fascinating example of a fourth way for Europe--yet another version, among a highly eclectic collection, of Labour differences on the issue. Each rivals the other in its exotic nature.
I came across another example this week. Unlike my right hon. Friend the Member for Wokingham (Mr. Redwood), I had the great pleasure of finding a Labour personage prepared to debate with me. I had a debate with Lord Healey, who was in tremendous form. He disagreed with the current Chancellor of the Exchequer and also contradicted himself, which made the debate quite spicy. It was on Sky television, on which the hon. Member for Great Grimsby (Mr. Mitchell) has often exercised his influence.
Some rigging took place before this debate. I was approached and it was suggested to me that, if I did not speak in the debate, my hon. Friend the Member for Staffordshire could be prevailed upon not to speak.
Mr. Cash: I represent Stone, actually.
Mr. Taylor: Stone is in Staffordshire, but I apologise to my hon. Friend the Member for Stone (Mr. Cash) for getting his constituency wrong. However, I chose not to exercise the voluntary restraint that was suggested, because I thought that the certainties of the European debate would be undermined if the two of us did not take part.
Mr. Donald Anderson: Will the hon. Gentleman give way?
Mr. Taylor: I will not, because I am under time constraints. However, the hon. Gentleman may catch my eye later when I am fully into my swing.
I begin by agreeing with the speech that my right hon. Friend the Member for Horsham (Mr. Maude) made in Berlin. He said:
- On any audit of achievement, the European Union has much to be proud of.
- We should relish these benefits. So in this spirit, let me reaffirm: membership of the European Union is of real value to Britain.
We joined a political union in 1973 and there was no question about its being a political union. The question was how its politics and structures would develop. Once we joined, we had as much opportunity to influence those structures as any other member. Because we like to think highly of our debating skills, we had more ability to do that than might otherwise have been the case. There is much myth making about how we joined an economic community and that no one told us about the politics. That is balderdash. We left a free trade area to join a political and economic union with its institutions and infrastructure. The European Court of Justice already existed and was pre-eminent in the areas in which the treaties gave it power.
We joined a political structure and I was part of the campaign in the 1975 referendum to encourage the British people to remain in it. I have always taken the view that we should participate in the debate not only to influence the structures, but to make sure that they work. As a Conservative, I am, at heart, pragmatic. Sometimes we got it wrong. Sometimes our ideas were not forceful enough and we have made mistakes of judgment. The European Union itself has also made mistakes. There have been times when it has been over-interventionist and it has then reacted. After the cassis de Dijon ruling, it took a different route.
Sometimes the European Union has delved too deeply into the detail of matters that we have subsequently decided should be dealt with on the basis of subsidiarity. Many times British Governments, including the Government of whom I was a member, took a general regulation from the European Union and gold plated it to make it so intrusive into the affairs of small companies and other business that it went well beyond the intentions of the original discussions held at EU level.
Yes, the EU can make mistakes; it has not been a perfect entity. However, it would have been extraordinary if it had been perfect because it was created as we went along. There was no fixed game plan. If there were ever a game plan with which we were uncomfortable, that was largely because we had not influenced it, not because it was pre-ordained.
As a pragmatic Conservative, I want the EU to work. I want a single market and I want it to be effective, which means that I want a strong Commission and a strong European Court of Justice. They are vital ingredients in achieving what we want.
The four freedoms are the movement of goods, of services, of people and of capital. Once we established a single capital market--many of us thought that it would be almost impossible to achieve--Lord Howe, then Geoffrey Howe, astonished everybody when he abolished capital controls in 1979-80. Unbelievably, under our influence, the French did the same in about 1987. That happened against all expectations.
Having established a single capital market, we have to understand the implications of it. They are that money will flow round the single market area to find the best return and the best investment opportunity. That flow will not stay stickily in any one country because a Finance Minister or the Chancellor of the Exchequer wants it to do so. In those circumstances, it is essential, first, that countries within the European Union develop common policies that mean that capital efficiency within the EU can be as stable and effective as possible, because that is in the interests of the Union as a whole. Secondly, if for any reason countries differentiate themselves from what I shall call the norm, there will be consequences, both good and bad.
For example, if taxes increase to too high a level, people will move progressively to another country that has more attractive taxation. Thank goodness, taxation stays the preserve, in its broad and most important senses, of the nation state. It is a flexible lever. It is also part of the competition within the single market, and an essential part of the disciplines of that market.
We have a single market and I want it to be made effective by a single currency. I make no apology for saying that I think that a single currency is an inevitable part of a single market. We could stay out, but I believe that the political and economic costs of so doing will grow. Some people say that all the costs are on the side of the decision to join. I think that it will become self-evident within two or three years that the costs come from staying out. That means that the decision that the British people need to take will come at us sooner than the Conservative party's official policy would allow us to believe.
It does not make sense for us to say that for a finite time--let us say, the next Parliament--we will not join a single currency. The decision must be made now. By "now" I do not mean today. So that the decision can be made in two to three years, the debate must start now.
I hope that the Chancellor of the Exchequer will understand that tonight. I understand that he is to make a speech at the Mansion House later today, and I am sure that he will touch on the matter. I do not expect him suddenly to announce that his five tests have been abandoned. Nor would I expect him to say that those tests, magically, have suddenly been met. He can stick to his mantra, with one exception. It is about time that he said that Government policy is aimed to make it possible to join the European monetary union at the earliest possible moment, and not merely that it would be a good thing if the tests were met. He should make it clear that there is an active will to secure the opportunity for the British people to make a decision on the issue within two or three years, which plausibly is the period that it will take, whether we take OECD or Treasury figures about the way in which our economies are converging.
Staying out of the single currency will involve costs that I believe British industry will not find acceptable. I do not believe that the House would find them acceptable. We are already beginning to see the Euro 11 reinforcing their situation. I predicted some time ago that that would happen, and now it is. They will start to define the terms on which they will reinforce the decision making of the European central bank, and we shall be excluded from that process.
Having said that I want a single currency in a single capital market and that I want the EU to be efficient, I also want there to be the sort of reforms that will make Europe as a whole an economy capable of challenging the United States. We saw the opportunities to do that emerging out of the Lisbon summit. Measures with which I was closely involved when Minister for Science and Technology, such as telecommunications, have begun to have a huge impact on European economies.
In January, in Madrid, I spoke to the Conservative Spanish Industry Minister, who said that one of the contributions that I had been able to make during negotiations on those matters in 1996-97 was to explain why Spain should not take the three-year derogation to which it and Portugal were entitled under the treaties to enable them to liberalise their telecommunications three years after everyone else did. I explained that for Spain to do so would be commercially disastrous. In fact, Spain took only six months--an action forced upon the country because it had not acted quickly enough previously--and Spain is now one of the more interesting economies in
that respect. Not only has there been an opening up, which continues, but BT and Vodafone are jointly discussing acquisitions in Spain.The Lisbon summit objectives are vital for the EU. If we can achieve them, they will revitalise the European economy in ways that we now think are impossible. Sometimes, we do not even bother to look at changes that are staring us in the face. For example, there are currently significant developments unfolding slowly--too slowly--in Germany; the Government there are changing the way in which they tackle some of the problems affecting the German economy. In France, the socialist Government--believe it or not--have pushed through more privatisations than their right-wing predecessors, with remarkable implications for the competitive position of French industry, domestically and abroad.
We have witnessed the changes in Spain under a Conservative Government, although it is sad for British Conservatives that the Prime Ministers of Britain and Spain appear to be ad idem: one is new Labour, the other Conservative, but at least in the sense of influencing the debate in Europe and not leaving it to the more dirigiste members of the EU like France and Germany, what they are doing is a good thing. Such reforms are crucial to ensuring that the single currency zone is ultimately successful in a competitive world market.
I want EU enlargement to be successful. Enlargement is a political, social and economic necessity; it is not all about widening versus deepening. The EU requires institutional change to provide an effective structure that can cope with enlargement: that means changes in the Commission and changes in voting procedures--inevitably, there will have to be more qualified majority voting, albeit not in the key areas of defence and taxation. Such changes are an essential ingredient of enlargement.
I hope that the Minister for Europe will take into account a point I made in an intervention on the Foreign Secretary: I remain unsatisfied that the agenda for this weekend's summit properly addresses the timetable for the entry of at least the earliest applicant states. It needs to be made explicit, not only that there will be an intergovernmental conference to discuss the matter, but that there is a timetable that sets targets that both applicant states and existing member states have to meet.
If the EU is to be effective, it needs to tackle the issue of defence. That does not mean that NATO will inevitably be undermined. I take the view that a more active European involvement in defence policy is likely to vitalise the NATO alliance, not undermine it, and many observers in Washington and in this country, for example, Sir Charles Guthrie, agree. Of course, we must be careful and act in conjunction with NATO, but that is precisely what the discussions in Vienna, Cologne and elsewhere have been about.
In all the areas that I have mentioned, Europe has an opportunity to make itself more successful for all its citizens.
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