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Mr. Bercow: With reference to the speech of the right hon. and learned Member for North-East Fife (Mr. Campbell), does the hon. Gentleman agree that there is no great public clamour for a referendum on the Nice treaty because the debate on the subject has thus far been characterised by waffle, verbiage and obfuscation? That is why, there is no great public demand. Does the hon. Gentleman also agree that, if the right hon. and learned Gentleman is so confident of the strength of his arguments and that public opinion is with him, he should be prepared to put his view to the test? If he is not, we can draw our own conclusions.

Mr. Simpson: I hope that the hon. Gentleman will allow me to say that the ultimate test of our confidence in the public is to allow them to make choices for themselves. That is precisely what we have not done on a succession of European treaties. It is a perverse form of logic and justification to say, "We never gave the public a choice on Amsterdam and we never gave them a choice on Maastricht, so we had better not give them a choice on Nice either." That is like saying, "We never fed the kids yesterday or the day before, so we may as well not

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feed them tomorrow." At some point, we must take responsibility for feeding the democratic process. If we do not, we will have to take responsibility for the withering away of that process.

Mr. Campbell: I am grateful to the hon. Gentleman for giving way, as he has referred to me if not directly, then at least by implication. Would he care to tell the House on what criteria he would base a decision as to whether to require a referendum in any particular case before the ratification of any treaty relating to our membership of the EU?

Mr. Simpson: The question is one of reversibility and amendability. The public have a right to decide on any decision we make that is irrevocable, or irrevocable unless colossal upheavals throw the institutional arrangements in Europe into crisis.

Parliaments have a right to make decisions within the conditionality of the mandates that they receive. Those mandates are renewable, not disposable. My fear is that Parliament has drifted down a path whereby it is treating temporary authority given to it by the public as though it has the right to dispose of the public's right to change their mind.

8 pm

Dr. Stephen Ladyman (South Thanet): Although I do not agree with my hon. Friend, I commend him on his thoughtful speech. I agree with him that reversibility and amendability are good criteria for holding a referendum, but I do not see what in the treaty is not reversible, if that were decided in the future. Joining the euro is irreversible and requires a referendum, but can my hon. Friend tell me what in this treaty is not reversible?

Mr. Simpson: I should be delighted to answer that point, because that is the substance of my argument. If the public are to have confidence in Parliament, we must have confidence in them and ensure that they are the deciders rather than the decided for. Two central issues of the treaty have been misunderstood: one relates to an aspect of enlargement and the other to the move to qualified majority voting.

There has been a lack of clarity about the costs of enlargement. Germany made an incredible commitment to meet the costs of unification. Amazing transfers of cash from west to east were made to pay for a unifying, inclusive future in which all German citizens would have a place, a future, a sense of security and identity. I have enormous admiration for what Germany has done, but it has not come without a cost. So far it has cost the German public £150 billion. They have just signed up to an extension of the solidarity taxation to 2020, so have voluntarily levied on themselves a further £100 billion in taxation to pay for inclusion.

The economy of the former East Germany is stronger than those of any of the applicant states that will be part of the enlargement process, apart, perhaps, from the Czech Republic and Poland. Yet the costs of their transformation will not be met by additional resource transfers.

If we want expansion on the current model, we must be honest with ourselves and the public, and acknowledge what the costs will be and where they will paid from.

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Mr. Hendrick: I suggest that my hon. Friend is misrepresenting what took place in Germany. At the time, there was an exchange rate of DM1 to OM1, which was totally unrealistic. The experience of German reunification led to the Maastricht convergence criteria. Deficits, interest rates and inflation were used as criteria to be brought to bear before a currency union could take place. Does my hon. Friend agree with me that, our having had that experience and having established the Maastricht convergence criteria, the instability caused by German reunification in no way compares with or relates to the currency union that has taken place in the European Union?

Mr. Simpson: Absolutely not. The issue was not the disparity between the deutschmark and the ostmark, but the physical, practical, structural and huge economic disparity between east and west.

Mr. Hendrick: Convergence does that.

Mr. Simpson: No. Convergence requires the collapse of economies. Demands are being made on applicant states that will result in the collapse of their economies in order to meet the convergence criteria, and they will be left with increased poverty and an increased need for social, financial and structural transfers. I do not want to duck the issue. If that is the price we must pay to build a cohesive European future, it may be worth paying, but we must be honest about it. At the moment, we are having an Alice in Wonderland debate. We are pretending that enlargement can take place, and that the eastern European applicant states can be required to collapse their economies. We are not acknowledging that stability will have to be delivered in an expanded EU by huge resource transfers from west to east or we will face huge population movements from places where jobs and wealth have disappeared to places where people presume they are located. We owe it to the public and to ourselves to be clear about the consequences, and allow the public to make a choice.

Mr. Cash: The hon. Gentleman is making an extremely powerful case. Way back during the debates on the Maastricht treaty I said that I could not believe that my own Government were deliberately creating unemployment. Yesterday, the right hon. Member for Llanelli (Denzil Davies) made a powerful speech on the relationship between enhanced co-operation and prospective taxation, which Hans Eichel has said must be one of the necessary ingredients of these arrangements. The plain fact is that the hon. Gentleman is right that there is huge deceit, and the only way to resolve the problem and to make resources available for this fateful European Union—I do not agree with the manner in which it is being developed—is with the consent of the voters, on a properly informed basis.

Mr. Simpson: That is precisely the case that I am trying to make. I am giving examples to show why it is important for the public to have the right to decide these issues. It is critical that we address these problems not in a spirit of isolationism but, perhaps perversely, out of a sense of solidarity.

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I was contacted by organisations in Poland that work in conjunction with the Polish farmers union, which represents 3 million Polish farmers. It argues that, so as to meet the convergence criteria, Poland is being asked to accept the imposition of huge reforms to its agricultural system, which will put 2 million of the 3 million farm workers out of work.

Mr. Cash: Where is the money coming from?

Mr. Simpson: That is one of the questions that the Polish farmers union asked me to raise here. It also wanted us to consider whether this model of expansion is genuinely sustainable.

Mr. David: Surely my hon. Friend is not suggesting that we should be in favour of maintaining east European command-style economies with their huge, unpredictable practices.

Mr. Simpson: I am not making that case. There is a positive alternative on offer to Polish agriculture. My hon. Friend may not be a great fan of Polish agriculture, but it feeds itself, has a strong basis of family farming, a huge infrastructure of local markets, food accountability and a biodiversity that does not fit with the demands being made on it by the European Union to take a leap into a future based on industrial agriculture.

Many global environmental movements are forewarning us of the colossal dangers if the demands of industrial agriculture that are being foisted on the European Union and on countries through the World Trade Organisation are a condition of enlargement. What the Polish people were asking me is this: why can we not have a debate about enlargement on different terms? Why can the British people not make a positive decision that is in favour of a European sense of solidarity, rather than a retreat from it?

The general election manifesto on which I understand at least half the Polish parties are campaigning asks us in the existing EU member states to support their claims for

It wants us to

What in that agenda is so unacceptable to us? Why should we not engage with it? Why can we not offer that to the public as a positive choice when it comes to a model of expansion? At present there is no choice, but a given, defined model that has been foisted on us. I fear that that is the direction in which we are being taken.

There is another fundamental problem that requires a referendum and the public's right to vote. I am talking about the counter side: alongside the physical expansion of EU membership is a clear democratic contraction, not just in the context of qualified majority voting. I do not subscribe for a moment to the argument that QMV is a grand German plot for the domination of Europe. That is a gross insult to the German people's integrity, and their commitment to European stability. My objections, which I consider central to the British public's right to make a decision, are based on the fact that QMV is not really about the weighting of votes in favour of politicians or political parties from different countries. The real,

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fundamental shift is not from a decision made in the House of Commons to a decision made in the Council of Ministers; it is the decision-making process that will be hijacked by the European Commission.

There is an important background to this, which the House and the country need to understand. There has been a continuing dispute between the Commission and the Council of Ministers about the Commissioners' prerogative to make decisions on everyone's behalf. It goes back to the 1994 Uruguay round, when the Commissioners argued that they alone were competent to negotiate on European matters on our behalf.

At the time our Ministers, and other Ministers, argued that that was not so. They said that trade in services and trade in intellectual property were areas of what was described as mixed competence, rather than Community competence. The significance of that argument was this: in areas of mixed competence, our Ministers are part of direct negotiations on policies that affect our citizens—international negotiations. Many such negotiations have been thrown into turbulent conflict in the World Trade Organisation, in Seattle and beyond. None of us should pretend that those are not some of the big conflict areas with which our society must deal in the future.

We shall be left with this question: when the public are clamouring on our doorsteps or letters pour into our postbags, on how many of those areas will we be able to make any decisions ourselves? How many, under the treaty, will we have signed away, so that we have no competence? Surely the public should have the right to choose which areas of competence to cede.

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