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Keith Vaz: I understand the right hon. Gentleman's argument as to why he is opposed to Britain's joining the euro, but is he in favour of Britain's withdrawing from the European Union?
Mr. Redwood: I believe that we need to negotiate a better deal to improve our relationship with the EU. The UK cannot accept the current draft constitution and I recommend that the Government not only hold a referendum, but do a lot of negotiating first, because they will not have a cat in hell's chance of winning a referendum on that unacceptable proposal. I want us to trade with, and be friends with, our European partners, and I believe that we are much more likely to be friends with them if we get the veto back on several important areas. If a veto is in place, we will agree much more with our partners because we will not feel threatened. Losing so many vetoes—with many more to come—creates far more arguments and rows.
Mr. Bryant: How precisely would the right hon. Gentleman set about the renegotiation? Would he threaten withdrawal from the EU, or some sort of associate membership with it?
Mr. Redwood: Powers with nuclear weapons do not usually go around threatening people with their nuclear weapons. I would tell our partners that the relationship has not worked. We have had many Prime Ministers, and our present one, who is very Europhile, will not join the full common defence system and certainly not the euro—one of the main aspects of the whole integration process. So even a Europhile Prime Minister makes the correct—or forced—political judgment that he and the UK cannot participate in big chunks of the Union. We should tell our partners that the relationship is not working because integration is being pursued far faster than any reasonable British Prime Minister could accept. For our partners' sake and ours, we need a new deal, whereby France and Germany and their satellite countries can accelerate their political union, and we can have a relationship with them that is conducted within the single market and according to which we can work with them on a variety of matters—we might want common environmental policies, for example—but under which we retain a veto so that the House can decide what is right for Britain. It would be possible to negotiate that.
Government Front Benchers are always telling us that we can have enormous influence in Europe. I suggest that they go and use that influence to get something that the UK wants. I can tell them that a massive majority in this country want to be friends with and trade with our partners in Europe, but do not want to be bossed around by bureaucrats from Brussels or see more powers taken away from what used to be a sovereign Parliament.
Keith Vaz: I cannot remember whether the right hon. Gentleman voted in favour of the Maastricht treaty or
against it, but it was his Government who signed the Maastricht treaty and gave away the vote in so many areas.
Mr. Redwood: The important point about the Maastricht treaty is that it retained the veto over the currency. That was the guts of the treaty, and I have always been at the forefront of the argument that Conservative and Labour Governments should use that veto. We are conducting a debate today and have the opportunity to keep the British people out of the euro only because we negotiated that important opt-out. Incidentally, we have learned from the Chancellor today that he has not managed to transfer that opt-out to the constitution, and it could then fall because it is part of a treaty that will be replaced. If the Government have any influence at all in Europe, will they please ensure that our vital opt-out from the euro is preserved in the constitution? When they demonstrate their influence, can they at last renegotiate the common agricultural policy so that it is not so offensive to the developing world and does not do so much damage to those living in poverty in Africa?
Mr. Love: Coming back to the renegotiation, what happens if the European states say no? What evidence does the right hon. Gentleman have to suggest that they would contemplate the sort of renegotiation that he proposes? If they do not, will we not be isolated in Europe and then have to make a fundamental choice between whether to be in or out?
Mr. Redwood: We have many opportunities to persuade our partners, and I would prefer to do it through reason, through strength of character and through the political will of the British people expressed in the ballot box at the next general election, when Europe may be a crucial issue. A referendum would strengthen the Government's hand because it would show our European partners that the will of the people is to have the sort of relationship that I am describing—based on agreement, common sense and not feeling threatened. Our partners could be allowed to proceed more quickly. Under the current system, we can always prevent our partners from proceeding as they want. That is one of the available threats, falling well short of the nuclear option. We send them an awful lot of money, and we could consider how much we should send them if they do not wish to co-operate. However, I would not want to start by threatening them. It would be better to proceed by saying that no matter who is the Prime Minister of the United Kingdom, we could never be a full participant in a scheme of political and monetary union, because we wish to be a largely independent, self-governing democracy, and that is not compatible with giving away our currency or the wide array of powers highlighted in the European constitution.
Mr. Laws: Is the right hon. Gentleman saying that a country such as France, as a member of the euro, is not a self-governing democracy?
Mr. Redwood: Yes, in many important respects, France is no longer self-governing in economic matters. If it signs the draft constitution in its present form, it will cease to be—in any meaningful sense—a self-governing,
independent democracy. It will become part of a much bigger, proto-United States of Europe, with a huge democratic deficit, which would have to make rapid strides towards developing a proper democracy before many of us who are democrats would be happy with that side of its arrangements.The EU has put the cart before the horse. It has not built a strong democratic centre first, and then given it some powers—as happened with this House of Commons. Instead it has been done the other way round, which is why it does not work.
4.36 pm
Mr. Brian Sedgemore (Hackney, South and Shoreditch): The right hon. Member for Wokingham (Mr. Redwood) discussed the economic implications of this issue, but I preferred the approach—although I do not agree with the conclusions—of the right hon. Member for Kensington and Chelsea (Mr. Portillo), who said that it was a political issue; he is right.
It was sad that we did not hear much European idealism from the Chancellor today. We heard much about trade in groceries, governed by the theories of 18th-century liberal economists. At one point, my right hon. Friend even appeared to pay tribute to the free trade work of the classical economists, but the issue is not about that at all. I do not want to get into a debate on the theory of exchange rates, but they were far more useful for nation states when theories of comparative advantage held sway and current account flows tended to produce equilibriums. Exchange rates have been far less useful to nation states when, as in recent decades, they have been governed by capital flows. That is the big mistake that people make when they imagine that it is a great prize to have control over exchange rates. Capital flows do not give the control that used to be achieved.
On 15 June 1990, I made what was probably one of the first speeches in the House on the merits of joining a single currency, which of course did not then exist. I had the luxury of speaking for 40 minutes to set out a position that I still hold. I shall not rehearse my arguments, because I am sure that all those present, including the Ministers, will have spent last night reading that speech. Let us take those arguments as read.
I have always seen Europe as an arena in which a new kind of politics can emerge. Often, in politics, a natural dynamic arises that is crucial to the development of ideas and actions. In the 21st century, the main motivator in Britain for that development could have been the European Union, with the euro at its core. We need a European Union that links global economies and social and environmental problems to the condition of working people. Proceeding through economic and political collaboration, it should be possible to create a Europe in which wealth can be shared. It is not so much that socialists and environmentalists could join together to hijack the European Union, more that it has a naturally interventionist social and political dynamic. I suspect that that is one of the aspects about which Conservative Members, who come from a different tradition, are worried. That, it seems to me, is where the dialectic in the 21st century will be fought. I do not see that dialectic ending in crisis—rather, it will be a way of dealing with practical problems that go beyond the boundaries of the nation state, and of finding solutions that will therefore have to be either regional or global.
The task for politicians is to bring a sense of idealism and purpose to the opportunism and utilitarianism that might otherwise dominate. We must widen the horizons for minorities and the disadvantaged, and protect the interests of working people.
I am one of those who believe that the nation state is not the fittest body to do that. However, the EU has an important role to play, in both regional and global economics and politics. Inside the EU, the power is bound to lie with those countries that are in the euro. People who do not believe in joining the euro ought to try and negotiate their way out of the EU, or to negotiate which elements they do not want to have any part of while still enjoying a bit of free trade.
I can understand that that approach would be plausible for people who support that sort of basic economic and political theory. However, do we really want to be outside the EU, on the sidelines, isolated and impotent? European unity based on a single European currency could change our way of thinking about Europe, and maybe alter the horizons of the British people. It could even offer a cultural renaissance for this little, backward, fractious island off the coast of north-west Europe. Our culture is becoming increasingly Americanised—on that point, at least, I hope that the right hon. Member for Wokingham would agree—and devalued.
The future does not have to be like the past. It can be better.
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