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Kelvin Hopkins (Luton, North) (Lab): I am pleased to follow my near neighbour, the right hon. Member for Hitchin and Harpenden (Mr. Lilley). I agreed with much of what he said, although I disagreed here and there. There is a consensus among hon. Members of all parties—even, perhaps, including one or two Liberal Democrat Members—that we need a different Europe.

Harold Wilson suggested that a week in politics is a long time. It certainly seems like a long time since our last debate on Europe a week ago because a lot has happened. Could we have believed that there would have been such a serious falling out between the Prime Minister of Britain and the President of France, between the Prime Minister and the Chancellor of Germany, or even between the Prime Minister and his erstwhile friend Peter Mandelson, who has said that we should not use our Thatcherite handbag in Europe? Such events initially sound amusing, but they are rather worrying because we want to build a future Europe that is friendly and in which we can co-operate with our neighbours. It is a sad irony that the European Union was ostensibly designed to ensure that there was not war between the nations of Europe, yet it is currently creating friction between member states. I believe that that is happening because of inherent faults in the arrangements of the European Union.

It is also said that nothing happens for years in politics, but then the world changes in a day. The day of the French referendum was such a day. Europe looked different after the referendum, so the day will be referred to again and again as a remarkable point in history. The no votes show that there has been a profound psychological shift in the attitude of the peoples of Europe to the European Union. Working people and socialists, especially, have rejected liberalisation. The banners of the people marching in the streets showed that their decision was about liberalisation. They did not want a liberal Europe and neither do I. They wanted to retain the social democracy of post-war Europe that worked so well and gave full employment, redistributive taxation, properly funded welfare states and public services, a degree of public ownership of essential utilities and a more equal and fairer world than that which went before. That was a world that worked, but we have started to give it away due to the European Union's arrangements—or has it been undermined?

There has been a drive to impose a supernatural—I mean supranational—neo-liberal construct and to dismantle post-war social democracy, but the working people of Europe are rejecting it. That rejection happened first in Sweden because the Swedes were extremely well informed and, after many months of thorough debate, they voted no to membership of the euro. I am a board member of the Centre for Social Europe. We have many colleagues with similar views in other countries and met Swedes who were involved in the campaign. It was very much the left, the trade unions and working people who voted no in that referendum. The same was true of the recent referendums in France and Holland, and if we had a referendum in Britain, working people would naturally vote along with Labour and Conservative Members who support the no campaign. Clearly, there will be no referendum because there would be a massive vote against the constitution.
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We have heard many interesting speeches, but the right hon. Member for Richmond, Yorks (Mr. Hague) made an especially fine, trenchant contribution. I agree with much of what he said. He rightly congratulated the Foreign Secretary on persuading the Prime Minister to have a referendum. I do not want to claim too much for myself, but I tabled the first early-day motion, signed by many Labour Members, that called for a referendum. I should, perhaps, have a small footnote somewhere.

We have to consider what has happened. The European Union has been failing because there has been slow growth in major countries and economic contraction in some, particularly in big countries such as Germany, Italy and France. The economic model is clearly not working. The growth and stability pact has been shot full of holes and is being ignored. We have had dead as a dodo, dead parrots, and now a dead duck. So the birds are all dead, whatever they are. The growth and stability pact has caused difficulties and it is right that it is ignored.

There is a possibility of the euro unravelling in Italy and Germany in particular. People in Italy are gathering signatures for a referendum on whether they should leave the euro. It will not be difficult for them to get the 500,000 signatures they need. Behind the scenes, the Germans have been discussing how they could or would leave the euro. There is a prospect of the whole euro arrangement unravelling. There is certainly no prospect of any member state joining the euro at this stage. It would be daft to join an arrangement that is so shaky and performing so badly. We are obviously not thinking of that for the foreseeable future.

The budget is also in crisis. The problem is not just the UK rebate, but the whole common agricultural policy. I have called many times for the CAP to be abolished. The presidency gives us the opportunity to have a serious debate on the future of the European budget. As I said last week, when Ministers go to the Council meeting they should say, "If you want to talk about our rebate, let us discuss the whole CAP", because it is the CAP that brings about the necessity for a rebate. If there is no CAP, we do not need a rebate.

Let us suggest how we might return to an arrangement under which individual member states have their own agricultural policy and can choose to subsidise, or not, their agricultural sectors. We could easily subsidise our agricultural sector as we chose in appropriate ways. I always mention Welsh hill farmers. We want to preserve certain traditional farming areas and their local cultures. There is no reason why we should not do that. It would not cost that much—certainly not as much as our contribution to the European budget.

Other aspects of the budget do not work either. Structural funding will be withdrawn from Britain. Many poorer countries are coming into the EU and money should be directed towards them rather than us. We believe and hope that Ministers have committed themselves to substituting state national funding for EU regional and structural funding so that we get the funding that we have lost. That means, however, that we have another net loss in the EU budget contribution.

On international aid, the Department for International Development has said many times—I have spoken to Ministers privately and in European
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Standing Committee B—that it is not happy about the international aid that is channelled through the EU because it is spent inefficiently, there is corruption, and it is not well targeted. Yet DFID has a justified good reputation for directing aid efficiently, fairly and transparently to the poorest nations, where it is most needed. Let us give aid through DFID rather than through the EU.

If we remove the CAP, structural funding and international aid, not much of the budget is left. However, as I said last week, if we do have a budget, let us have one that redistributes money to the EU countries that need it. Let us have contributions according to ability to pay and receipts according to need. If Slovakia is poor and we are rich, let us make sure that the whole EU budget is distributed according to the relative prosperity of the nations of Europe. That would be a fundamental change, but a much better arrangement, and I hope that my hon. Friends on the Treasury Bench will discuss that during our presidency.

Last week, I said that the appointment of Dominique de Villepin as French Prime Minister marked an interesting change; it was a move to someone who is much more Gaullist than liberal. Even as I spoke, he was addressing the Assemblée Nationale, saying the sort of things that I would say if I were in his position. He suggested that there should be a more relaxed fiscal policy nationally to bring down unemployment. Very sensible, but hardly in the spirit of a Europe-wide, eurozone, neo-liberal, deflationist approach to economics. He was saying, "French people are unemployed, so let's spend more money and give them jobs". If individual member states of the EU controlled their economic policy, that is what they should be able to do. We should return to an arrangement whereby macro-economic policy is a matter for the member state and not for the EU. Those things are fundamental and I hope we can at least discuss them. They may be heresy to some people, but they are common sense to others.

There have been calls to abandon UK controls on imports of tobacco and alcohol. That has been proposed, I think, by Liberal Democrat MEPs, but I think that it would be completely unacceptable—it would be madness. The Treasury obtains substantial revenue from taxes on alcohol and tobacco, which pays for hospitals and other public services. If there were unlimited imports of cheap tobacco and alcohol the effect on Treasury revenues would be devastating. Even more important, it would bring in floods of cheap alcohol, exacerbating our already serious alcohol problems. We are trying to persuade people to drink more sensibly and not to smoke, so to allow in mountains of cheap tobacco and floods of cheap alcohol would take us in completely the wrong direction.

I hope that, if necessary, Ministers will tell the Commission, or whoever it may be, that we intend to retain our strict limits on alcohol and tobacco imports and that we shall enforce them. We could even reduce the current limits. When I go abroad I could not manage to carry the amounts that are currently allowed; my car would not hold the volume of beer that we can bring in. Let us deal with the white van brigade and at least enforce the current limits properly.
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As I have said before, the lost revenue from imported cheap tobacco amounts to about £4.5 billion, which is a vast sum. Half that lost revenue would pay for free long-term care for the elderly. We need a world where we drink and smoke more sensibly and look after our elderly more properly.

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