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Mr. William Cash (Stone) (Con): Having listened to the expressions of the triumph of hope over experience that we have just heard, I should say that I do not wholly negate the views of those who desperately want the European Union to work. The problem is that many of its aspirations, noble as they were in 1945, have been, in fits and starts, gradually subjected to reality. We are now at the crossroads—not exclusively, by any means, in terms of the constitution.

The hon. Member for Ogmore (Huw Irranca-Davies) mentioned polls. A few weeks ago, ICM carried out a poll for the European Foundation, of which I happen to be chairman. It asked this question:

The results were extremely interesting. They showed that 58 per cent. of the population at large agreed with that proposition. Significantly, as I told the right hon. and learned Member for North-East Fife (Sir Menzies Campbell), 65 per cent. of people in Scotland agreed—as did 68 per cent. of 18 to 24-year-olds, which I found exceptionally interesting.

At the heart of the questions that we have been discussing today—and which I have been trying to address since I entered the House in 1984, for which
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I make no apology—is the need for reality. We have now reached a point where we are fairly close to it, but it has been a hard slog. There is nothing anti-European about being pro-democracy.

In his concluding remarks, the hon. Member for Ogmore spoke of the necessity—almost as a justification for the constitution—of combining the legal framework of the progression towards political integration with human rights. There is nothing in the existing treaties, as compared with the convention of Strasbourg, about human rights. Some would argue—I do not—that the existing treaties have worked well. I believe that they have not worked well not because of the absence of human rights but for other reasons, which I shall consider shortly.

I would dispute strongly the idea of human rights being the ultimate justification for the constitution of a community of values. After all, this country produced the Magna Carta and the Bill of Rights. In many respects, the American constitution was based on the principles that we had enunciated. Jefferson, at the age of 33, had considerable regard in drafting the constitution, which he did himself in only a few months, to the traditions of the British constitutional arrangements. He took the view—I believe, justifiably—that they had gone off key because we relied too much on a constitutional arrangement that was insufficiently democratic.

The most important human value, right or attribute—the word that I prefer—is democracy. It is the means whereby, through elections, the voters decide how they are to be governed. It enables us to have freedom of speech and debate in the House. The principles in which we believe are entirely based on democracy and its application to the ordinary daily lives of the people whom we have the honour to represent.

My great quarrel with the European Union is over its continuous progress away from the principles of democracy. I have raised repeatedly with the Foreign Secretary the point, which he conceded to me on 9 September, that in the constitution, primacy lies not with the EU but with Acts of Parliament. If the constitution were passed and the House of Commons chose—it is matter of political will—to pass legislation that was inconsistent with any previous enactment, which could, and should in my view, include repeal or amendment of the European Communities Act 1972, judges in the British courts would be obliged not to disapply any subsequent Act but to apply it to the constitution. In other words, as I put it in the European Scrutiny Committee the other day, "UK voters rule OK."

Mr. David: Is the hon. Gentleman suggesting that if the European Union were more democratic and the sovereignty of individual nation states enhanced he would not oppose the EU?

Mr. Cash: In a moment, I shall look at the ingredients of the EU's failure to work. After being elected chairman of the Conservative back-bench committee on European affairs with 62 per cent. of the vote in a secret ballot—I do not know what the result would have been if it was not secret—I was asked in 1990 or 1991 by Lord Hurd of Westwell, who was then Foreign Secretary, to
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write a paper for the Conservative manifesto committee on the workings of the European Union. It has since been published by Duckworth in "Visions of Europe". I am sure that the book is no longer on sale, but the title of my contribution was "The European Community: Reality and Making It Work". Despite the considerable attempts over the years to demonise my views, I have only ever believed that a framework of co-operation in Europe—I urge hon. Members to notice that I did not use the word "co-ordination", which the hon. Member for Birmingham, Edgbaston (Ms Stuart) used in her speech, because I do not accept that it is part of the process—between truly democratic nation states does not promote nationalism but democracy. Those states could co-operate within a framework that benefits everybody in trade, commerce, industry and, as happened in the war, defence alliances.

Ms Stuart: My colleagues may not thank me, but at the risk of encouraging the hon. Gentleman, I do not understand his accusation that the EU lacks democratic accountability. There are two streams of legitimacy—the Council of Ministers, a directly elected assembly of Government representatives, and the European Parliament, which is also directly elected. The public, however, cannot identify where responsibility lies, and are uneasy about the responsibility deficit. There is not a democratic deficit. If there were, we would fight European elections on a pan-European party ticket, but I would not expect the hon. Gentleman to advocate that.

Mr. Cash: I disagree with the hon. Lady. When decisions are made by QMV about governmental matters, as opposed to matters of trade, that creates serious problems for future elections. The acquis communautaire kicks in, and decisions by British voters, who may wish to change a Government because they do not like the laws that they passed—I would like to repeal many authoritarian laws passed by this Government—are subject to decisions that are binding on this country by virtue of the European Communities Act. We might tolerate for that for the time being, but it prevents us from unravelling those unwanted laws at a general election, which is undemocratic. It is not merely an interference but an inhibition and even a prohibition that prevents the people of this country from changing the laws at an election.

Mr. Richard Bacon (South Norfolk) (Con): Does my hon. Friend agree that the hon. Member for Birmingham, Edgbaston (Ms Stuart) is wrong, because legitimacy does not derive from the Council of Ministers or the European Parliament? It derives from consent. If a body has consent it has legitimacy. If it does not, no matter what is written it does not have legitimacy.

Mr. Cash: I am grateful to my hon. Friend for his contribution, with which I agree.

The issue of the general election can be compared with that of the European Court of Justice, for example. If it makes an adjudication in relation to matters that we might want to change, whether under the constitution, or, as I shall explain, with respect to existing treaties, it is then set in concrete, and our judges are obliged to apply the law, as enunciated by the European Court of Justice as the ultimate jurisdiction. That is yet another
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inhibition, unless, of course, we can change it. My argument, profoundly, is that we can change it, but we must show that we have the political will.

The arguments that I put forward are not exclusively concerned with the issue of the constitution, to which my party is opposed in principle, I am glad to say. I attempted to set out arguments when I was shadow Attorney-General to demonstrate the necessity of regarding that as a matter of fundamental change requiring a referendum, which I am glad that the Government have also accepted, because of the issue of primacy. It is of the highest political importance that we get this right, which is why I am glad to take part in such a lengthy debate.

These matters must be set out as clearly as possible. They relate not just to the mechanics of institutional change, but ultimately and fundamentally, to the way in which we are governed, which I have been trying to argue for the past 15 to 20 years. That is not to say that we need to be entirely negative abut the advantages of co-operation, whether in Europe or in other alliances on the international stage. The issue is how it is prescribed and followed through in practice.

With respect to the question of the United Kingdom and the arrangements for the constitution, before I deal with what the existing treaties contain and why I regard that as a matter to be dealt with now—before the general election and not afterwards—I want to touch on whether the European constitution would survive a no vote in any one of the countries.

It is completely clear—I hope that the Minister will not disagree—that if any one member state fails to ratify the treaty, the draft constitution will not go into force. I think that that is accepted on both sides of the House. What follows from that, however, is that the existing treaties will continue to apply, because their repeal is dependent on those provisions that I put to the Prime Minister in Prime Minister's Questions some months ago—that all the existing treaties will be revoked, and all the laws and regulations, European Court of Justice rulings and the acquis communautaire will be repealed but reapplied, which is the key point, under the new doctrine of primacy prescribed by article 1(5), or 1(6), of the proposed constitution. If that constitution fails, by definition, the existing treaties continue.

What that boils down to is that all kinds of permutations are possible as to what may be decided on at that stage. Ireland and Denmark, for example, went for second bites of the cherry. That was disgraceful—it was disgraceful that my Government allowed that to happen in the case of Denmark, and I said so at the time. There is a question as to what would emerge, apart from the idea that there would be a rerun of a referendum, which I regard as pretty unthinkable in terms of British democracy and constitutional arrangements. None the less, there would have to be a negotiation between member states that had agreed to go ahead and those that had not.

That brings me to the problems that I see with regard to the existing treaties that would be left, as it were, on the statute book. Let me give an example. In an intervention, I mentioned the growth and stability pact. As we know, it has been in serious trouble. Some
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Members may recall that I felt so strongly that it would not work in practice that when my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke), as Chancellor of the Exchequer, sent a letter to all Members of Parliament saying why he thought it was a good idea, I felt it necessary to send a letter to Conservative Members saying why I thought not just that it was not a good idea, but that it would not work.

As it turns out, those of us who thought that the growth and stability pact was an unworkable proposition have been proved right. Analysis from the university of Bonn states unequivocally that the main effect of the pact has been to encourage countries to cheat by misreporting their deficits. When I put that to the Foreign Secretary in an intervention he did not reply, but the reality is that countries are cheating, which has caused many of the difficulties between Germany and Italy, for example.

According to Mr. Wolfgang Munchau in the Financial Times of 13 December, one important reason for the fact that

is that

I happened to attend a bankers' conference in Frankfurt, and heard Chancellor Kohl express very similar views all of 10 years ago. The growth and stability pact goes to the heart of the way in which the European economy is supposed to work: that is the key point. It is not just any pact; it is a deal that was struck in an attempt to bring a degree of stability to the European economy. Why is the European economy not working under the existing treaties? Why do we have low growth and high unemployment? The short answer is—although I am sure that the Minister for Europe does not want to hear all this—that there is no reason other than the fact that the pact cannot work.

The Minister for Europe is engaged in his own peculiar Houdini trick. He knows how unpopular is the European project that he has hammered so stridently for the last 10 years, and he knows that it is not working. He knows that it does not even appeal to his own constituents. So he is shifting his ground in a shifty manner, and putting out statements criticising even his own Government for the basis on which they arrived at the completely false conclusion that the euro was capable of working and ought to be applied in the United Kingdom. The bottom line is that it does not work.

We have heard today about Wim Kok's report, which is only a few weeks old and which I raised with the Prime Minister the other day. It has been acknowledged by members of the Government—I must say in all fairness—that it is not working. Some have attempted to put up a fairly good defence, but the fact is that Wim Kok's report makes clear that the European economy is not working. It is not working because of the intrinsic faults in the thinking behind the social agenda—the hon. Member for Ogmore promoted that agenda as an advantage—which is driving economies such as Germany's mad.
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Massive over-regulation is inhibiting the growth of the economies of individual member states. A recent edition of The Business pointed out that according to a European Commission report, even the Commission believes that over-regulation is costing European business £1 trillion a year. David Arculus, chairman of the Prime Minister's own Better Regulation Task Force, submitted a report to the Prime Minister saying that over-regulation is costing the British economy £100 billion a year. According to the British Chambers of Commerce, in the past few years certain directives, many of which come from the European Union, have cost the economy £30 billion.

The fact is that it is possible to reform the system, but it is not being reformed. It is no good the Minister for Europe, the Foreign Secretary and the right hon. and learned Member for North-East Fife talking about the virtues of the system, or the hon. Member for Ogmore talking about common values. Why should we respect common values if they are creating social tensions, high unemployment and low growth? There is a direct correlation between the treaties' provisions and the proposals for economic governance. As even some in the Minister's own party and many of the unions know perfectly well, schools, hospitals and other elements of the domestic economy cannot get the public expenditure that they want because of the constraints imposed by the convergence criteria laid down under the Maastricht treaty.

I remember saying during the Maastricht treaty debates that I never thought the day would come when I had to criticise my own Government for deliberately creating unemployment. There are Conservative Members who will not agree with that line of argument, and I am not suggesting that we should have a free-for-all on public expenditure. What I am saying is that we can decide on these issues for ourselves in this place. The problem that the Government and Labour Members face is that the inhibitions that are not only putting strain on the economy but causing strains within the Labour party are the consequence of applying artificial criteria that originate in Europe. Instead, we should be making these fundamental decisions for ourselves.

I come to our relationship with the United States. The entire existing treaty framework, including the Maastricht, Amsterdam and Nice treaties, creates serious problems for our relationship with other countries. It is perfectly obvious that compared with the United States, European countries have politically diverse opinions on all aspects of international life, such as free trade, NATO and how to organise economies. It cannot be disputed, for example, that the French are far more protectionist and sceptical about NATO, and that they organise their economy in a more statist fashion.

The French are also espousing the creation of a European superpower; indeed, President Chirac openly called for that just before his state visit. I pointed that out to the Prime Minister and asked him how he is going to manage to ride two horses at the same time, given that he wants not only an EU superpower but a relationship with the United States. These are absurd foreign policy differences not merely of opinion, but of principle. Intrinsic to this part of my thoughts is the need for a democratic principle to be placed above all others.
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In the United States there is a deeply rooted community of thinking about how democracies should work—for example, through the operation of congressional committees, the working of the economy and the operation of Congress. After all, the European Union, for reasons already given, falls short and has fallen short over the last 100 years. Let us cast our minds back and look at that situation. Let us also remember that it is the United Kingdom and the United States that fought for the liberty on which many of the principles that Europeans encourage us to espouse are based. It is not very good, if I may say so, for people to criticise the UK in respect of its attitudes towards Europe; we should have regard to the fact that people such as my own father were killed in the last war fighting for those very freedoms.

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