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Mr. Roger Williams: Does the hon. Gentleman agree that the mid-term review of the common agricultural policy has done much to take incentives away from production, thereby improving the position of third-world producers?

Mr. Drew: I am not sure that I do agree. Although the CAP has done things differently in different periods of
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history, I believe that its operation has done immense damage. The sugar regime, for example, has inflicted enormous damage on third-world countries, which has not done much to justify the case for the continuance of the CAP.

We need to rethink the best way for Europe to proceed. There are Europeans in my party and, as in other parties, there are friendly disagreements about how best to take Europe forward. We need to have a proper debate about that and it is wrong to give the public the impression that there is uniformity in the Labour party about the European project. There are some benefits from European social arrangements, such as the charter of fundamental rights, but it is desperately dangerous to buy into Europe wholesale because of the neo-liberal aspects, which might lead to further deterioration in our industries and harm our labour relations. We have a strong history of collective bargaining in this country, which is alien to the European model. There are dangers in viewing European social engagement as an alternative, as it might further weaken the structures of our trade unions and our labour relations. We need to think hard about that problem.

There is a way forward. Some of us belong to a new cross-party grouping called the Centre for a Social Europe. My hon. Friend the Member for Luton, North is one of its founding fathers, and we have a rather good photograph of the new hero of the Labour Back Benches, my hon. Friend the Member for Glasgow, South-West (Mr. Davidson), who is the leading proponent of a new approach to Europe.

Those of us who are members of that cross-party group will make our point of view clear, and we do not apologise for saying that our approach is somewhat different from the one adopted by the Government and the Labour mainstream. However, we hope to be a growing influence. We will engage with people from all parties to state our desire for a decentralised Europe and our belief that an attack on neo-liberalism is long overdue.

In conclusion, I repeat that it is important for both left and right to produce a rationale in respect of how we take Europe forward. I believe that we should aim for a very different sort of Europe, one that is entirely at odds with what has happened over the past 10 to 15 years. I am sure that we will enjoy putting across our point of view in debates like this in the future.

4.55 pm

Mr. Peter Lilley (Hitchin and Harpenden) (Con): It is a pleasure to follow the hon. Member for Stroud (Mr. Drew), who made a characteristically sceptical and thoughtful speech. That took some courage and, although I do not necessarily agree with his policy prescriptions, I do agree that it is important that, where possible, decisions about matters such as the extent of our economic liberalism should be taken democratically, by this House, and then opened to change and revision by the electorate.

Enthusiasts for the European constitution have tried to play down the importance of the results of the referendums in France and Holland by arguing that many of those who voted no did so for reasons not directly related to the constitution. My simple point is that people voted no because the treaty's advocates
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could not produce convincing and positive reasons for voting yes. They were unable to do that because there are no convincing reasons for voting yes that appeal to the ordinary populations of Europe. Without a good reason to vote yes, people had every freedom to vote no. They may have done so for trivial reasons but, had there been a positive reason to vote yes, they would have set aside domestic and unrelated factors and voted for the treaty.

In the absence of positive reasons to vote yes, the treaty's supporters came up with all sorts of negative reasons and threats, ranging from the vague and incredible to the insulting and absurd. For example, they said that voting no would mean a loss of influence, and that investment would be repelled. At the insulting and absurd end of the spectrum, people in Holland were told by that country's European Affairs Minister that a no vote would mean a return to the holocaust and the gas chamber. Other treaty enthusiasts in both France and Holland said that a no vote would open up the prospect of war and an end to peace. Happily, the peoples of both countries realised that those were insulting and absurd arguments and gave them no credence.

Those who supported the European constitution made clear its appeal to the elites. They believed that it would make it easier to take decisions centrally and override the objections of member states. However, that was precisely what did not appeal to the electorates in France and Holland.

Constitution enthusiasts have a second excuse to explain why we should disregard the no votes returned in France and Holland. They say that different arguments against the constitution were used in those countries, which conflict with the no arguments presented in this country. They add that that incompatibility and inconsistency means that both arguments cannot be right. However, I believe that they can both be right, because the treaty offered a one-size-fits-all constitution that would have imposed one-size-fits-all policies on member countries. If only one size of suit was available in the shops, it would be tight on my hon. Friend the Member for North Essex (Mr. Jenkin) in some places and tight on the hon. Member for Cambridge (David Howarth) in others. The imposition of one-size-fits-all policies would have been facilitated by the European constitution, and it was that to which the people in Holland and France objected.

An hon. Member earlier complained about a resurgence of Gaullism. I remember when General de Gaulle stood up for the rights of France and French sovereignty against the combined establishment in France. He bemoaned the fact that the media were against him, the unions were against him, the patronat was against him, the Church was against him and the intelligentsia were against him. He said, in his sardonic fashion, "Only the people of France are on my side." We are now in the unique position that the people of France and Holland are on our side. They share with us a desire to have fewer centralising, one size fits all policies imposed on us.

We should seize this opportunity to try to change the agenda from one that accepts that there has to be a ratchet—with the only direction being the transfer of
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power from member states to the European institutions—to one that accepts that there can be some return traffic. We should actively seek with our partners in Europe to ask what powers have been unnecessarily transferred to European institutions that could be repatriated to the member states to allow them to take decisions and tailor policies to their own needs. That is clearly what lies behind the malaise in Europe and it is an opportunity for us to seize the agenda. Sadly, although we may have the people of France and Holland on our side, we do not seem to have our Government on our side, and that is most regrettable.

On the subject of one–size-fits-all policies, I come to the rebate, which was designed to correct the adverse consequences of a one–size-fits-all financing mechanism. We call it a rebate, but it is well described in the relevant European document:

As the "Oxford English Dictionary" says, a correction is a change that puts right something that was wrong. That is what the rebate does and it is right therefore that it should be maintained.

To obtain the rebate, Margaret Thatcher had to obtain unanimous approval for a change, which was very difficult, but she succeeded because she argued persuasively that a wrong needed to be corrected. However, the present Prime Minister has reversed the situation so that member states are unanimously against the rebate. Fortunately, one veto can maintain the status quo. Unfortunately, he has invited pressure by moving from saying that the rebate was not negotiable to saying that we would not negotiate it away entirely. He indicated clearly that he was in the market for altering the rebate's terms and conditions, thus reducing its value. That is a sad and dangerous step, which has made his life more difficult and will make it more difficult to uphold the correction mechanism in future.

I hope that the Prime Minister will manage to do so, but he will have to regain control of the agenda. He should ask the French for their explanation of what happened in the referendum and what we do next. We should also follow the French, who have ruled out firmly and adamantly any discussion of their benefits from the agricultural policy, by firmly and adamantly refusing to discuss the correction mechanism and the British rebate. If he does so, we can uphold our position. It is necessary to have a Government who recognise that different countries have different interests. Britain has different interests from countries on the continent—perhaps more than any other. It has different structures and ways of doing things that must be accommodated.

I was first elected in the same year as the Prime Minister. He was elected on a pledge to leave the Common Market, but unlike him I have always been, and remain, an unwavering supporter of British membership of the European Community. However, I understand the concerns of Dutch, French and British voters that the ratchet mechanism that allows transfers of power and the one-size-fits-all approach to policy making are not acceptable and have gone far enough, if not too far. We should look in the opposite direction, return powers to the United Kingdom where possible and allow greater diversity and the tailoring of policies to the needs of individual countries, not least our own.
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5.6 pm

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