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Mr. Robin Cook: Before my right hon. Friend gives way to any more Conservative Members demanding a referendum, I am anxious to ask him to remind the House when we had a referendum on the Maastricht treaty or on the Single European Act, which introduced a record amount of qualified majority voting or on the decision by a Conservative Government to take Britain into the common market? Are we to add all those failures to hold a referendum to the mistakes that previous Conservative Governments have made? Were all three previous Conservative Prime Ministers wrong throughout about Europe?

Mr. Alexander: I could not have framed the question better myself. The fact is that, if we look back more than 30 years to the referendum that took place, it is clear that Conservative Members now need to answer—perhaps it will provide an opportunity for the hon. Member for Altrincham and Sale, West (Mr. Brady) when he winds up the debate—whether it is the party's clear position that it regrets the fact that there was no referendum on Maastricht or, indeed, on the Single European Act, about which there seemed to be considerable equivocation in the remarks of the shadow Foreign Secretary.

Mr. Owen Paterson (North Shropshire) (Con): We really want to know the Government's position at the European Council next week. If a majority decision were taken at that Council to continue with ratification, would the Government obey it or disregard it?

Mr. Alexander: I cannot anticipate the position of the Council, not least in light of the fact that discussions are under way between European Heads of State as we speak. At this stage, it is appropriate for the Government to say only that we are moving forward with those discussions and that there will be a further opportunity for debate in the House ahead of the European Council, so the hon. Gentleman will have to wait a little longer.

Ed Balls: I am sure that my right hon. Friend listened carefully to the speech of the shadow Foreign Secretary and tried to discern, as did I, the change in European policy that is taking place in the Conservative party, and the principles that underpin the Tory approach to a referendum. Does my right hon. Friend agree that the shadow Foreign Secretary appeared to be saying that his mother, rather than his father, had been more influential in the shaping of his views on Europe, and that there should have been a referendum on both the Single European Act and the Maastricht treaty? Does he further agree that the hon. Gentleman would have voted against the Single European Act and, if so, that that would take us even further away from the prosperous, full-employment Europe that we want to see?

Mr. Alexander: My hon. Friend makes the important point that, following the shadow Foreign Secretary's
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contribution today, we are none the wiser as to his position on referendums as we look back to the Single European Act and Maastricht. My hon. Friend makes another important point—that the uncertainty and ambivalence is not limited solely to the issue of referendums, because it applies to the more fundamental issue of renegotiation. If we examine the Conservative manifesto, on which the party decisively lost just a month ago, we find explicit reference to the fact that the Conservatives would seek to repatriate powers in respect of the common fisheries policy, for example. In the light of at least one intervention today, the statements contained in the manifesto presage an even more fundamental shift in the Conservative party position.

We need to recognise that while, even a few years ago, the idea of renegotiation on the way to exiting the EU was regarded as being of only marginal interest to the more extreme fringes of the Conservative party, it now appears to be becoming the ruling orthodoxy of the shadow Cabinet. In that context, the repeated assertion by the shadow Foreign Secretary today that renegotiation matters and somehow represents Britain's national interest poses the further question—it could, ideally, be answered by the shadow Minister when he winds up the debate—of the specific areas in which the Conservatives are seeking to renegotiate the existing European treaties?

There is clearly uncertainty within the shadow Cabinet. I appreciate that a leadership election is under way in the Conservative party, but does the party policy include the sort of fundamental renegotiation of rights anticipated by the shadow Secretary of State for Deregulation or is it limited simply to what was contained in the Conservative manifesto? Perhaps the shadow Minister will clarify the position when he addresses the House later.

Mr. Heathcoat-Amory: Why is the Minister so amazed at the word "renegotiation"? The Convention on the Future of Europe was a giant renegotiation of all the existing treaties that were going to be abolished. The Minister did not engage with it with sufficient determination to make it a success. We wish to do so in order to achieve a genuine, democratic Europe that is closer to its citizens. So yes, we believe in renegotiation and yes, the Minister's party tried and failed to deal with it.

Mr. Alexander: I am not taking that intervention seriously. It once again opens up wide the clear divisions within the Conservative party. It is not necessary to listen to my views on the matter. Let us consider the views of the former Prime Minister, John Major, who said that the policy of renegotiation was "absurd, mad". Those were the words of the Prime Minister under whom the shadow Foreign Secretary served during his time in the Foreign Office. Equally, we could reflect on the views of the right hon. and learned Member for Kensington and Chelsea (Sir Malcolm Rifkind), who is now serving in the shadow Cabinet:

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Frankly, the divisions that exist on the issue of renegotiation are most apparent among Conservative Members.

Several hon. Members rose—

Mr. Alexander: I have been generous with the House and I want to make some progress.

Amidst the current headlines and debates on the constitutional treaty, it is all too easy to lose sight of the    underlying reality that there is an economic transformation taking place of even greater long-term significance than the political transformation achieved by enlargement—and that is the process of globalisation.

Rev. Ian Paisley (North Antrim) (DUP): Will the right hon. Gentleman give way?

Mr. Alexander: I have already been generous, but I shall give way in due course.

Europe needs to adapt to the changing balance of global economic activity and the rise of fast-growing emerging economies, notably those of China and India. Rapid technological change, global capital flows and the global sourcing of products are leading to an increasingly competitive international market for goods, services and investment. The most successful economies will be those that can adapt quickly to change and promote enterprise, productivity and innovation.

That process of change challenges Europe economically, socially and politically. It demands concerted action to strengthen key drivers of growth such as levels of employment. It calls for greater flexibility in product, labour and capital markets to ensure that Europe's businesses and individuals are equipped to adapt to economic change and take advantage of new opportunities when they arise. Structural reform which promotes flexibility and fairness together is the key to success in the modern global economy. That is why advancing the economic reform agenda will be a key priority for the UK when we assume the presidency on 1 July. As the House well knows, the UK has long advocated economic reform in the EU, but as the Kok report confirmed, we risk falling far short of the goals set by EU leaders in Lisbon just five years ago to improve EU competitiveness and create full employment by 2010. With 19 million Europeans out of work, the main task for those who believe in social Europe is to get Europe back to work.

Vital to that is the task of tackling regulation. Twelve European countries, including the UK, have signed up to our better regulation agenda. European legislation can bring down barriers and improve competitiveness in Europe, but it needs to be high-quality legislation, properly tested for its potential costs and benefits.

Angela Browning: Why do the Minister and the Government amendment persist in talking about "better regulation"? We have already had the Better Regulation Task Force, but it did not bring less regulation. What we want is less regulation, not better regulation.

Mr. Alexander: That intervention yet again exposes the fundamental divide between Conservative and
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Labour Members. The argument that we do not need more regulation was precisely that used to oppose extending paternity leave and the introduction of a national minimum wage in the UK. There is, of course, a case for appropriately targeted and relevant legislation, whether it comes from Europe or Britain, but the approach that she advocates shows that, whether at the British or European level, there is an unthinking determination among the Conservatives to remove social protection rather than have an informed debate about it. As the shadow Foreign Secretary acknowledged, such a debate would be necessary to carry forward such work.

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