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Mr. Giles Radice (North Durham): After the breathtaking lack of generosity on the Conservative side, may I congratulate my right hon. Friend and the Chancellor on their success in getting the European Union to accept that tax evasion should be tackled on the basis of exchange of information, rather than through a withholding tax? In his view, would the same excellent result have been achieved if, instead of using patient and tough diplomacy, we had threatened to use the veto?
The Prime Minister: No, it would not. The tragedy of the Conservative party's position is that, despite what people say has been its tradition, for the first six or seven years, even under Margaret Thatcher, it was prepared in the single European market, for example, to combine effectively with other countries. Indeed, it gave up a larger extension of qualified majority voting power than has been done since, apart from under the Maastricht treaty, which it signed.
It is so obvious that when we are in co-operation and partnership with 14 other countries, the sensible way to get the best for one's own country is to form alliances, to engage constructively and to be positive. That approach yields results for this country.
The Conservative party would now be blocking the very enlargement that is the next focus of the European Union. [Interruption.] It is no good Conservative Members saying that they would not. They are committed to blocking enlargement unless they renegotiate the treaty of Rome, and they cannot point to any country that is prepared to agree with them on that. The dangers of a destructive approach are not only connected with Europe; a destructive, negative approach to Europe is a betrayal of the British national interest.
Sir Peter Tapsell (Louth and Horncastle): Does the Prime Minister recognise that, although virtually no serious politician is advocating that Britain should leave the European Union, British public opinion is steadily moving in that direction, and that that movement will
become an irresistible political flood unless the steady erosion of British democratic sovereignty is seen to be ended?Did the right hon. Gentleman at the European Council over the weekend, and will he at Nice when the next treaty is being negotiated, make it clear that Britain will not permit any further extensions of majority voting, and that we shall retain our right to protect our vital national interests, as was promised to us in the 1972 referendum, by retaining our power of veto where we believe that our national interest is threatened?
The Prime Minister: I suppose that it is of some consolation to the hon. Gentleman that increasingly he is the voice that represents where the Conservative party is today. He says that the tide of opinion is moving in the direction of withdrawal from the European Union. I do not think that that is true, and I believe that it would be disastrous for the British people.
Three million jobs are dependent on the EU. More than 50 per cent. of our trade is with the EU. When the hon. Gentleman says that any qualified majority voting is a bad thing, I beg to differ with him. It is important in certain instances, especially in the completion of the single Europe market. That could not be completed unless we had qualified majority voting rather than a veto. In areas such as tax, defence or social security, I shall fight hard to retain the veto. Elsewhere, I shall consider what is in the British national interest. I regard the Single European Act as being in the British national interest, as is the single market. It would be wrong for the United Kingdom to divorce itself from Europe. Whether that is popular or unpopular, we should continue saying it if we truly have the best interests of this country at heart.
Mr. Bill Rammell (Harlow): Does my right hon. Friend share my sense that Conservative Members have never been as quiet following a European Council statement, perhaps indicating that over the withholding tax their fox has been shot? Does he agree that having referendums on every issue that comes out of the forthcoming intergovernmental conference would bring the business of the European Union to a standstill and would delay enlargement indefinitely? Is it not the case that the Tory party's stance on this issue has nothing to do with national interest and principle and everything to do with the £20 million that is on the table from Paul Sykes?
The Prime Minister: That is right. Mr. Sykes has made it clear that he believes--he is entitled to do so--that Britain should get out of the European Union. He has made it clear that he wants and requires a referendum on any extension of qualified majority voting and on any treaty that is agreed at Nice. The Conservative party has now agreed to those policies. However, they would be disastrous policies for the country. We would be a laughing stock in the rest of the world if we ended up saying that any extension of qualified majority voting would result in a referendum of the entire British people. If we went one further, which is what Conservative policy is now, and said that we would block enlargement unless there were a renegotiation of the essential treaty--[Interruption.] Conservative Members say that they will not do that.
The Conservatives' policy is to go for a new position under the treaty of Rome where, as the Leader of the Opposition said, one can pick and mix and match any policy one wants. I cannot think of even another conservative party in Europe that supports such a thing. I do not know whether any Opposition Members can. If there is not even a conservative party that supports that, and there is no Government who support that, it will not happen. Yet the right hon. Gentleman's position is that he would block any treaty on enlargement unless such a provision were agreed to. It is impossible to think of a more irresponsible and foolish policy. In my view, it is directly linked to those people who now fund the Conservative party.
Mr. David Curry (Skipton and Ripon): Is there any aspect of the eventual decision whether to join the euro that depends upon political as well as economic judgment?
The Prime Minister: The short answer is that the tests are economic tests. We have resolved the political issue. Of course, there are political implications. There are constitutional implications. But each of those has been resolved by the Government. [Interruption.]
Madam Speaker: Order. I wish that right hon. and hon. Members on the Opposition Front Bench would not cry out. I expect better behaviour from those on the Front Bench.
The Prime Minister: In the Chancellor's October 1997 statement all those issues were resolved, which is why we have said that, in principle, successful membership of the single currency is in the British national interest. We have also said, rightly, that if the test is the national economic interest, those five economic tests have to be met. That is a sensible position. It allows us to engage constructively. I simply say--I imagine that the right hon. Gentleman agrees--that if the Government, or any Government, were to say that we were ruling out the single currency, there would be a flood of inward investment out of this country virtually overnight.
Mr. Roger Casale (Wimbledon): Does my right hon. Friend agree with the conclusions of the report of the European Scrutiny Committee on the intergovernmental conference that, as institutional reform is an essential precondition of enlargement, the IGC should focus specifically on the institutional reform issues left unresolved at Amsterdam, so that enlargement can take place?
Does my right hon. Friend have an answer to the shadow Foreign Secretary, the right hon. Member for Horsham (Mr. Maude), who, in last week's debate before the Council meeting, asked what was the point of seeking constructive engagement, of trying to reach consensus and of further institutional reform of the EU at this stage? Many Labour Members were left with the distinct impression that many Opposition Members failed to see the point of the EU at all.
The Prime Minister: The point of enlargement is clear. This country has entered into a binding commitment
to help enlargement. As the EU enlarges, it simply makes no sense whatever for us not to debate and then decide the key things that have to change to make enlargement work. If the EU expands from 15 to 20 or 25 countries, it will obviously be important to take account of that in the institutions of the EU. That is why the intergovernmental conference is necessary, and that is why it would be completely irresponsible to block it.
Mr. Michael Howard (Folkestone and Hythe): Why is the Prime Minister so implacably opposed to a flexible Europe? Why do we not say to our European partners, "We don't want to stop you doing what you want to do, as long as you don't make us do what we don't want to do"?
The Prime Minister: I am not opposed to a flexible Europe at all. As I said in my statement, enhanced co-operation must be part of our discussions in the European Council in Nice. What I am opposed to, however, is Britain opting out to the slow lane in a two-speed Europe, and letting other countries determine the circumstances in which we can then join the fast lane. That has been one of the great dangers of British foreign policy towards Europe for a number of years. I am all in favour of enhanced co-operation, but I want to know its terms and rules, and I want to make absolutely sure that in determining that, we do not opt out of the debate and then find that others have determined how Europe develops, and that we have lost influence in it.
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