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5.29 pm

Mr. Michael Connarty (Falkirk, East): It is a joy to follow the right hon. Member for Wokingham (Mr. Redwood), because he is such an easy target. This is the first European debate of the Session, and it is interesting to reflect on the styles of the right hon. Gentleman and the hon. Member for Kingston and Surbiton (Mr. Davey). The hon. Gentleman said that the Bill is minor and unimportant, whereas the right hon. Gentleman described it as dangerous and "a socking great Bill". He then went straight into pork-barrel mode, moaning that he wanted money spent in his constituency and nowhere else. I assume that that means in no other constituency than his own, rather than no other country than the United Kingdom.

The right hon. Gentleman made an error when he spoke about a tax on the art world. I am a member of the European Scrutiny Committee, which has considered the directive. It allows a royalty to be paid to artists on the second sale of their works of art—it is not a tax. I did not agree with the Government's resistance to the measure, because it strikes me as entirely fair: if someone makes a record and sells a number of copies, it is fair that they receive a royalty on each; likewise, it is eminently sensible that someone who creates an original piece of artwork should, when it is sold a second time for more than a certain value, get something back. That too is fair; it is not a tax. However, the right hon. Gentleman does not appear to be able to distinguish between genuine taxes and items that he wants to throw into the mix simply to frighten the populace.

Was the right hon. Gentleman frightened by something to do with Europe when he was a young child; or was it the experience of Mrs. Thatcher, now Lady Thatcher,

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ramming through the Single European Act 1985, which created the single European Union that he is now fighting to get out of; or was it the experience of Mrs. Thatcher similarly ramming through—at the time with his support—the legislation on the Maastricht treaty? Some experience must have frightened him so much that he acts in an irrational and somewhat paranoid way when matters relating to Europe come up. I do not know whether he has thought about the events ofthe past two months, when his party universally adopted the same attitude as his and was rejected by the people of the United Kingdom. If the Conservatives do not find some way of tempering that attitude, we will remain on the Government Benches and they on the Opposition Benches for a long time to come.

It was rather churlish of the hon. Member for Kingston and Surbiton to mock my hon. Friend the Member for Bexleyheath and Crayford (Mr. Beard), who has some vision about Europe. The hon. Gentleman gave us a lesson on the "Nick Clegg MEP budget process", which he seemed to think a valuable contribution. That reminds me of why the Liberal Democrats have 52 Members of Parliament, compared with the Scottish Labour group's 55 Members. That is more than the whole Liberal Democrat parliamentary party. [Interruption.] Before my hon. Friend the Member for Ellesmere Port and Neston (Mr. Miller) says it, let me acknowledge that the north-west group has more members than the Scottish group.

We must look far beyond budget processes for the heart of people's interest in European debates. Today's is the first European debate of the new Parliament. My right hon. Friend the Chief Secretary to the Treasury stated what has been achieved—a stabilising of the UK contribution to the EU budget. That is especially important when seen in the light of previous agreements. The 1988 agreement, reached under a Conservative Government, allowed for a 17 per cent. increase and the 1994 agreement led to a 22 per cent. increase over five years. Those are large increases, whereas the Bill reflects negotiations that resulted in a freezing of our contribution and a securing of the abatement.

We are not talking about Nice, as the right hon. Member for Wokingham appeared to think at one point. We are talking about the Berlin European Council agreement of March 1999. That is worth focusing on, because it is significant—it is not a minor matter. Perhaps we did not achieve everything we wanted in terms of changing the European Union budgeting system and its outcomes, but a solid step forward in the right direction was taken.

After increases of 17 per cent. and 22 per cent., stabilising our budgetary relationship with the other countries represents significant progress. Despite the thrashings about of Conservative Members today, had their party remained in government, the UK contribution could have continued to rise and I suspect that it would have, so we should acknowledge that a significant gain has been made. I have seen a briefing that describes the outcome as a triumph; I am not into triumphalism, so I would describe it as a significant and positive change in the relationship between the UK and the European Community.

The fact that the abatement is kept in full is significant. Conservative Members, including the hon. Member for Hertsmere (Mr. Clappison), referred to Lady Thatcher's securing of the rebate; there is no doubt that that was

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commendable, and we should not take that achievement away from the lady. Now that time has passed, we have been able to retain the rebate when, as we move towards enlargement, there are clearly aspirations in the EU to try to get increased contributions from the UK. The matter is therefore important, and we should commend the negotiating team for its efforts.

We should also commend my hon. Friend the Member for Broxtowe (Dr. Palmer) for pointing out the simple and important fact that the most significant thing is the transfer of resources from the value added tax base to the gross national product base. We discussed that transfer at various times in the European Scrutiny Committee; we think that it is correct and commendable.

It is true that some windfalls will be forgone, as the hon. Member for Hertsmere said. However, it is nonsense to stir up the debate with things that have to be given up, as talked about by the Opposition. Negotiation is about reaching a balanced settlement: one which retains our abatement in full and guarantees that, when we go into the enlargement process, we can similarly secure a negotiation that will continue throughout that period. That is an extremely strong positive which is not diminished in any way by the fact that we have had to accept that we must give up some windfalls from VAT/GNP transfers.

Dr. Palmer: Does my hon. Friend agree that, if had we taken the windfall, it would, in effect, have been double counting? We already benefit from the rebate, so we would benefit doubly, which would not be fair.

Mr. Connarty: My hon. Friend made that point very well in his contribution, and I hope that it will be taken seriously. He is right; if we demand, as we say in Scotland, that our eggs be double yolked, that would not be to our benefit later, as other European Community countries would notice our double counting and eventually demand redress. We would probably see a slip in our reputation, which is now extremely high in the EU; after the fracas at the end of the previous Government, we are making progress. As my hon. Friend knows, when we go to other European countries, we are treated with respect and seen as fair negotiators who are genuinely and positively involved in the European process. Sadly, that seems to have slipped from the agenda of most of the Conservative leadership.

There has been a move to make a slight amendment to the common agricultural policy. I would not make much of that, although I know that it sounds good to say that the amendment will bring benefits, from 2002, equivalent to £70 per family or £1 billion to the country. When I look at CAP regimes, the one that always strikes me as the most bizarre is that in which 1 billion euros is contributed to the growing of tobacco in the EU. None of that tobacco is of a sufficiently high health and safety standard to be used within the EU, so we provide export subsidies to companies to sell it to the Caribbean and Africa. In the light of that billion, just getting rid of that regime would probably improve the health of people in the Caribbean and Africa and would save as much as we will in the first tranche of CAP savings up to 2002.

David Taylor: Does my hon. Friend agree that, while £70 a year is a worthwhile saving for the average family

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of four, nevertheless there remains the sum of about £930 a year that such a family is paying in higher food prices because of the disaster of the residual CAP? Much more needs to be done, even though that step is worth while.

Mr. Connarty: I agree; the point of discussing the Bill is to debate it as the first European Bill in the context of progress that has been made. We should not in any way see it as the only step that we can take; in fact, it is not the Government's only aspiration to make that amendment to the CAP. Many more will come during this Parliament and future terms of a Labour Government, and they will bring significant benefits. Some amendments, we know, are long overdue, but it is difficult to change an established regime which many farming communities throughout the EU, including some of our own, rely on and regard as a bankable cheque. We have to negotiate at great length before putting in a better and fairer regime and, at the same time, achieve the benefits for the consumer that my hon. Friend wants.

The negotiation was the first time that we had tried radically to reform the CAP, and we should have been given some credit for that. The churlish way in which it was dismissed by Conservative spokesmen was wrong. If the public outside see us, at the beginning of a new Parliament, getting into point scoring, that continues the devaluation of the process of government and opposition. The ranting of the right hon. Member for Wokingham will not make people think again about a Government policy. Sound advice on the budgeting process would probably carry much more weight with the public than his paranoia about the EU.

The public want us to develop a European Union that is prepared to give to people. To mock the road building in Spain, as the right hon. Gentleman did, is nonsense. When Spain joined the EU, our one great fear was that people from Spain would flood into our labour market and undermine our wage structures and much else.

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