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Mr. Burnett : As usual, the hon. Gentleman is making profoundly sound points about matters such as the constitution and the euro, although I am disappointed that he did not give us a little meander through the growth and stability pact.

Does the hon. Gentleman agree that the CAP is, in a sense, a voluntary policy? Dairy quotas were imposed on us in about 1982 or 1983. I do not know whether Italy still operates that system, but it is preposterous. Has the hon. Gentleman any views on the common fisheries policy?

Mr. Hopkins: I have made too many meanders already, but I will say that I also oppose the common fisheries policy, to which many more able speakers have referred. People ask me why I comment on the CFP, given that I represent Luton, North, which is a long way from the fishing fleets. My hon. Friend the Member for Great Grimsby (Mr. Mitchell) frequently speaks about the issue.The growth and stability pact is also a nonsense. I have spoken about it before and I fear that I would speak for too long if I went into it now, but I agree with the hon. Gentleman. The question of whether countries are adhering to the pact seems to trouble the Commission almost weekly.
 
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There are problems with structural funds as well. Much of Britain's structural fund spending is to be removed. In that instance at least we received some kind of payback for our EU membership, although not as much as other countries. In fact, many of my hon. Friends who enthuse about the EU do so simply because they have received little bits of European money in their constituencies. Well, those little bits of European money will not be there in future; they will be replaced, I understand, by our own domestic Government spending. I am very pleased for the areas that need the money, but I think that that will make people feel rather differently about the EU.

We will in fact be paying in more, because we will not be getting anything back. If we could guarantee that all the extra money that we pay out will go to the poorer nations and help the new member states to raise their living standards, and to converge with richer countries such as us, that would be fine. But we know that at least 50 per cent. of the budget will be swallowed up by the CAP—and it is the CAP that causes the problems.

The structural funds arrangement is clumsy. It is designed to keep people enthusiastic about the European Union by paying money directly to regions and labelling it as European money. I would prefer a simple fiscal transfer arrangement whereby rich countries pay in, poorer ones take out and the latter decide democratically what they want to do with that extra money.

Tony Baldry: Is there anything in the European Union that the hon. Gentleman thinks worth while?

Mr. Hopkins: Belonging to an association of states with shared values in terms of democracy, human rights, the economy, the welfare state, redistribution and trade union and workers' rights is important, and those are the values that I would stress. Other organisations to which we belong, such as the Commonwealth, do not have that many rules; nevertheless, there is still a sense of their being right. The Europe that I am looking to would of course be a much closer arrangement than the Commonwealth, but even the Commonwealth does at least attempt to insist on certain standards of democratic behaviour. We must do the same within the European Union.

I should point out that I certainly regard myself as a European. I am enthusiastic about Europe in every sense—culturally and historically—and I go on holiday there every year. I try to speak European languages and almost all the things that I enjoy—perhaps barring jazz, which is African-American—are connected with Europe. I love nothing better than discussing issues such as these with European socialists; indeed, I was doing so only this morning during a very pleasurable meeting with a left-wing politician from Denmark. I discovered that we had shared cultural attitudes and I found the conversation interesting and stimulating.

As I have pointed out before, in the 1970s and 1980s we urged that European economies should be run according to a policy of co-ordinated reflation, in an effort to overcome the problem of unemployment. Such a policy would be very sensible and much better than the rigid deflation currently taking place in the eurozone. We could easily replace the eurozone with co-ordinated reflation to good effect, and there would be benefits all round.
 
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Mention has been made of the aid budget, which is frequently discussed in European Standing Committee B. I apologise for continually referring to that Committee, but I am an enthusiastic member of it. We know that the Department for International Development does an excellent job with its aid budget. Our reputation is high throughout the world in that regard, and especially since the Treasury took the unusual step of forming a holy alliance with DFID in an effort to push the aid budget. Of course, we should spend more—all rich countries should—but we are doing well. The aid is distributed efficiently and is going to the right places, which is in marked contrast with what happens in the EU.

We have already heard about corruption in the EU, but even when corruption is not involved, EU aid distribution is very inefficient and misdirected. Such aid does not go to the poorest nations in sub-Saharan Africa. Much of it goes to the slightly better off countries in northern Africa—the Francophone countries—in what amounts to a political deal. Aid should not be about political deals, but about helping those who need help. We could repatriate the aid budget to the benefit not of ourselves, but of those who receive it. Such distribution would be more efficient and, as a result, our reputation in these matters would be even higher than it is.

I come to an issue that was raised by my hon. Friend the Member for Cannock Chase (Tony Wright) at a recent meeting in Paris. He said that Europe had become rather à la carte. Despite attempts at rigid control from the centre, Europe has, in reality, become à la carte: some member states belong to the eurozone and some do not; some sign up to Schengen and some do not. In some respects, we have opted out and have derogations from European legislation. The Prime Minister has insisted on some of them, and quite rightly so. I believe that there are other respects in which, even now, we would do well to seek exemptions.

One such example would be the alcohol and tobacco duties regime. Britain has the right approach to taxing and imposing duties on alcohol and tobacco, keeping up the price for public health reasons. It is also a tremendous producer of revenue that can be spent on other vital aspects of public services. Yet we are being constantly undermined by doubt about the precise rules governing our personal imports of alcohol and tobacco. If there were a definite numerical limit—a lower one than is implied now, and not just guidance about personal use—to the amount of alcohol that could be imported, and if there were rigid controls over the amount of tobacco coming in it would be beneficial in every possible way. Above all, it would raise money for good purposes.

We were told in the pre-Budget speech, if I remember correctly, that the evasion of tobacco duties is equivalent to about £2.5 billion a year. For half the amount that we lose through the smuggling of tobacco, we could have free long-term care for the elderly. If we had an understanding with Brussels that we were exempt from its insistence on an open market in tobacco and alcohol, we could reap all-round benefits to public health and have more money to spend on other valuable services.
 
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The problem with Europe is that it is governed by political elites. I am indebted to a colleague in the No campaign for pointing out that Europe's political elites at the top level—the diplomats and governing minorities—are always enthusiastic about Europe. If we come down to the next layer—perhaps to the Parliaments—we will find some sceptics, making more of a balance overall. Probably the majority will go along with the elite because they seek advancement in government and so forth, but at least a proportion of people will be less enthusiastic. By the time we get down to the electorate, we find that a very large number of people, sometimes majorities, are sceptical, and the elites are always worried about such majorities. It seems to me that, in the end, elites have to be governed by majorities. The people have to make their choice and they are not fools, despite the propaganda constantly pumped at them—particularly on the continent—by the elites. The people still seem to have sceptical views because they have a feeling that something is being taken away from them.

The Swedes voted no in their euro referendum because they believed that their welfare state, which is well funded on the basis of a high level of taxation, would be taken away from them. That prospect frightened many people on the left—working people, trade unionists, social democrats and so forth—into voting no. Opposition to the euro was not right-wing, but left-wing—and quite rightly so. Those people saw the EU moving in a neo-liberal direction, which they did not want. The struggle on economics inside the EU is between social democracy and neo-liberalism, and many working people do not want neo-liberalism.

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