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12 Jun 2008 : Column 149WH—continued

That is what the Algerian state has faced. It is a nationalist state run by the military, so it is not my cup of tea in human rights terms. However, we should encourage it to take the same path as other parts of the
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world, such as Taiwan and Korea, as well as some of the Latin American and south-east Asian states, which started off in an authoritarian way but evolved over time.

Morocco has functioning political parties. It has a young king, who is trying to maintain order without wanting to lose the control and authority that all kings have before they understand the benefits of a parliamentary system. He works closely with the Jewish community in the country, just as the President of Tunisia does with the Jewish community there. Morocco’s king is seeking a different relationship with Europe. Sadly, there are not enough British contacts down there. We see the Maghreb countries as being a bit of a French backyard. The Spanish and the French have significant disagreements about Western Sahara and the Sahel. There is not, for example, any trade between Morocco and Algeria, which is as absurd as having no trade between Germany and France.

We should be taking the argument for what we have achieved in Europe in the past 40 years and saying that it would be a way forward, although we must be careful not to patronise. Of course we should make demands for freedom of expression and human rights, but it is a huge pleasure to walk around in Tunis, for example, and see Tunisian women not being obliged by a patriarchal religious order to wear strange costumes covering them, and to be normal women who hold down Government, ministerial and professional jobs.

President Sarkozy’s initiative faces difficulties such as whether Muslim Government leaders will be prepared to sit down in the same room with the Prime Minister of Israel, and the question of Turkey.

Mr. David Drew (Stroud) (Lab/Co-op): My hon. Friend alluded to Western Sahara, in which I take a particular interest. Surely the French could do more to persuade Morocco that its performance over Western Sahara, in direct contravention of all UN mandates, is disgraceful. It is about time that we recognised that. The British have a much more progressive attitude towards Western Sahara—that it is a country in all but name and should be treated as such.

Mr. MacShane: The UN has commissions in the region, and the very distinguished Baker Commission is working on the issue. I am very glad, at times, that we did not have debates of this kind when the American South chose to secede from the Union in 1861. Such issues of identity are sensitive and difficult. In 1987, the Labour party election manifesto contained more about Polisario than it did about Europe. When people go on visits and meet dear friends from different movements around the world, they can get very focused on those issues. We need an agreement and peace, but Algeria also needs to stop supporting people whom the Moroccan Government see as being against them. All three of those Governments need the maximum support to stop what is now called the Maghreb branch of al-Qaeda. Whether that name is self-taken, or really represents any intervention by al-Qaeda, I am not qualified to judge; but we need more intervention, visits, investment, trade and commerce. Those three majority Muslim nations—not quite Arab, because the people are Berber—are future big partners for Europe.

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As I said, France also must understand its responsibility to Turkey, and face down the right-wing Islamophobe dislike of Turkey from many Conservative parties in Europe. Conservative parties in Europe tend to treat Turkey in the way our Conservative party treats the European Union—they dislike and oppose it, and wish to have as little as possible to do with it.

I will finish on a political point. The Minister and his colleagues who work for British national interests in Europe will be able to work so much more effectively and efficiently if the main Opposition party becomes realistic and sensible about Europe, because it may one day form the Government of the country, although after the comic opera that has been announced to our delight and delectation this afternoon, that day may be much further off than its members imagined before about 1.30 pm. The better-off-out brigade need to be put in their box, just as, in the early 1990s, Labour had to put in their box all the anti-Europeans who were keeping it in permanent opposition. I want to see a day when the entire British elected parliamentary and political class—with the noble exceptions of dear friends whose scepticism I respect, love and admire—will know that to have any voice in Europe, we need to be networking and broadly supportive of it. If we want to change the CAP we must change the point of view of our Irish friends—not our French friends. It is Ireland that refuses all reform of the CAP. To have an effective European defence and security strategy it is necessary to persuade the French to back President Sarkozy in his apparent aim of reintegrating France into NATO—and so on.

I wish the Minister well in what will be tricky and interesting negotiations in the coming period. Whether or not the treaty is ratified, we shall need to get our policies in place to bring about economic growth, social justice, rights for workers and a common policy on the environment, and to find some way of speaking as one with the incoming American President. At the moment, on Russia, on Kosovo, as I suggested, on energy questions and on too many other issues, Europe comes up with the lowest common denominator policy, and does not speak as one or provide an effective partner to the United States and the other great democracies of the world.

3.25 pm

Kelvin Hopkins (Luton, North) (Lab): It is a pleasure to speak in this debate, and having called frequently for such European debates, I could do little else but speak. I want to speak also because it is important that the left critical view of the European Union should be heard. It is the view of a substantial body of people outside Parliament and in the Labour movement in particular. The TUC, for example, has opposed the Lisbon treaty and supported a referendum on it. There are many other active members of our party and movement who feel strongly that the European Union is not the democratic socialist ideal that we should want it to become if it continues.

We have recently had the problem of a European Court of Justice ruling in favour of employers against employees, which seemed to go against the fundamental right to strike, which the European Union has enshrined. Many of us are worried that that augurs a possible
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change of direction, whereby more and more power will be ceded to employers, with a progressive reduction in the influence and power of working people and their organisations.

Mr. MacShane: Does my hon. Friend agree that the principal cases that he refers to in Sweden, Germany and Finland all concern the absence of a statutory minimum wage in those countries? The European Court of Justice cannot overturn national law on minimum wages. That is the big problem. Those countries, for honourable reasons, do not have a legal minimum wage, which would allow the European Court of Justice a way to debate employment rights there. That is why I believe that we should support a European minimum wage across Europe, set at a strong level, to support the working class everywhere in Europe.

Kelvin Hopkins: That might be a long-term approach, but in the short term the decision went in favour of employers, not employees. However, that is just an aside. I wanted to talk in general about several economic aspects of the European Union.

Like a number of people in the Labour party, both inside and outside Parliament, I oppose the Lisbon treaty. I did not just support a referendum, but I would have voted no. It is interesting that Ireland, which has been referred to, is holding a referendum today, and there is a possibility of a no vote, which would save us an awful lot of trouble. I hope that there will be a no vote. I should welcome that and cheer it. I should probably have a glass of good French champagne to celebrate. The skies would not fall in; we would have the status quo, which is far too integrated even now.

I am one of those people who would have liked, as I have said many times here and in the main Chamber, a referendum on the Single European Act and on the Maastricht treaty. Those fairly fundamental changes were the change of direction—the real speeding up of the process of integration towards what I believe is a state of Europe, or a country of Europe, which will eventually completely marginalise the elected nation state Governments and Parliaments.

Mr. Drew: I agree entirely with my hon. Friend. Does he find it surprising that, as far as I can see from all the material that has come from the EU, there is no plan B? If the Irish were to reject the constitution today, one would have thought that a set of proposals would be put in place immediately to say, “We don’t want a constitution”. However, there does not seem to be anything. That is the nature of the relentless drive towards centralisation and federalism. That is what some of us are so alarmed about.

Kelvin Hopkins: I agree with my hon. Friend. My plan B would be to retain the strength of the democratic Parliaments of the member states and get them to work co-operatively for mutual benefit. Democratic power would have to be retained at the nation-state level. In other words, they would co-operate when necessary and when mutually agreed for mutual benefit, but they would not be compelled to do so or to cede power to the centre of Europe and have our nation-state Parliaments overridden by the European Union. That is my position.

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I speak—as I have many times—as a European. Everything about me shrieks Europe. I am a European by ancestry. The language that I speak and the ones that I try to speak are European. My enthusiasm for the arts, my love of geography and everything else are related to Europe. The European Union is a political imposition on Europe; it is not Europe. I resent the use of the word “Europe” for the European Union. Europe covers countries as far afield as Russia—as far as the Urals—Norway, Switzerland and wherever. It is bigger than the European Union, and the European Union is a political construct of which we must be wary.

As I say, if there is a no vote, we will go back to the status quo, and things will not be very different from now. However, they will be significantly different if the vote is carried.

I was talking to some visiting French business men in a Committee room last week. They were from the nuclear industry and were fairly conservative people. When I talked about the economy, they were shocked at my views. It was almost as though economics did not count in Europe and the union was a political concept or idea. I said that, if it was such a political idea, why was the European Union so concerned to exercise economic control, to construct the single European currency and to have a European Central Bank that sets interest rates independently of any democratic control? I said that it was about economics and that economics is driven not by the interests of working people, but by the interests of big business and global corporations. I think that I made my point, but they were rather shocked that I emphasised economics.

We are possibly on the verge of very serious economic times. The credit crunch, the sub-prime lending crisis and rising oil and food prices are leading us towards a great hole in consumer and economic demand that could cause a recession of quite serious dimensions. We in Britain are more exposed than the continent of Europe. Nevertheless, all of us will be affected by some kind of economic downturn. It was just at these times that Keynes and others—Keynes was the greatest of them—said that Governments should borrow and spend to counter recessionary forces. Yet, at the moment, we are being told by the European Union that we must not borrow; we must not let our debt get out of hand. Debt in Britain is not excessive compared with some other countries and with what we have had in the past. If we are going into a serious recession, we should expect to borrow. I do not think that we want the European Union telling us, “You have to tighten your belt and spend less.” That would drive us deeper into recession, and we do not want that. We want to spend more to counter recessionary forces.

If there is a problem with debt, the logical way to deal with that is to raise taxes, but not tax the people who spend money, but the people who have lots of money. Those with an elementary knowledge of economics understand that, if we tax very rich people who tend to keep their money in banks, it will not have much of a deflationary impact on the economy, but if we tax poor people, it will. It is economically beneficial to redistribute income from the rich to the poor in difficult economic times. Poor people, by the very nature of their lives, spend every penny that they get on surviving. Therefore, they keep demand going. Rich people, even possibly the better-off Members of Parliament, will not be too
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affected by an increase in taxes. My suggestion for increasing taxes in Britain does not reach down as far as the incomes of Back Benchers—possibly Ministers, but not Back Benchers. I will have to check that out.

I have dealt with fiscal policy, borrowing, debt and public expenditure, and the other area is interest rates. The European Union is still dominated by deflationist monetarists who control the European Central Bank. They are talking about keeping interest rates high to squeeze out inflation. When an economy goes into serious recession, inflation is not the problem. The problem is generating demand to survive. Inflation will automatically come down if we go into a serious recession; prices will fall.

If we try to counter inflation, even in relatively stable economic times, we have to see from where the inflation comes. For example, it could be generated by external forces, such as the price of oil. In that instance, if we force an economy into recession to squeeze out inflation, we would destroy the internal economy to deal with something that is beyond our control—the price of oil. Inflation is not the serious threat that faces Europe at the moment; it is recession. At a point—it may be a high point—the price of oil will level off. It may be $200 a barrel, but it will level off. It is then that the additional inflation eases off.

Provided that the internal economies are kept strong and that sufficient product is coming through, inflation will not be a serious problem internally. If, however, by deflating the economy like mad, we destroy the internal economy, when we come to reflate, there will not be enough productive capacity to meet demand. That is when we would get inflation again, and it would be demand-driven inflation rather than cost-driven inflation.

I do not want to give a lecture on economics, but the European Union and our Government should be worrying about recession and not inflation. I hope that the European Union will think again. Even now in Britain, we are considering whether or not to raise interest rates. I must admit that I went hairless the other day—as hon. Members can well see—at the thought that we might have three more interest rate rises in the pipeline from the Monetary Policy Committee of the Bank of England. I do not think that that will happen. Within a few weeks or months, the economy would be in such difficulty that we would not be raising interest rates; we would be lowering them, which is what I suggested in Treasury questions last week.

There are other aspects to the annual policy strategy report. My right hon. Friend the Member for Rotherham (Mr. MacShane), who is not in his seat at the moment, talked as though the budget was the major problem. It is not the major problem, but it is something that we must address and something that is ill-designed and unfair to Britain. I have suggested how it should be seriously reformed.

My hon. Friend the Member for Linlithgow and East Falkirk (Michael Connarty) is Chair of the European Scrutiny Committee, of which I am happy to be a member. He suggested that we should be more proactive in policy. I agree with him, and I have been proactive. I have probably spoken at 80 or 90 European Standing Committee sittings over the past 11 years. My hon. Friend the Minister for Europe was the Whip on those Committees. I remember him urging me not to speak too long, so that everyone could go home early. I did have my say, and I made my point.

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One of the points that I repeatedly made was that, if we must have a European budget that has receipts and disbursements, it should be related to the relative prosperity of the member states, so that the rich ones are net contributors and the poor ones are net recipients, and it is all done on a fair basis. The common agricultural policy completely distorts that. If we took the CAP out of the equation and repatriated it to member states, the distortions in the budget would disappear. We could have a budget that was broadly related to the relative prosperity of different nations. There would be a redistribution of income between member states. The amounts concerned would be modest—perhaps 0.5 per cent. of gross domestic product or something—but the process would work well and those concerned would be happy with it. It is foolish, misguided and ill-designed for the whole budget process to be distorted by the CAP. Some countries are big net contributors when they should not be, and others are big net recipients when they should not be.

Mr. Drew: Bizarrely, at a time when we need to subsidise agricultural prices and look again at the traditional British system of deficiency payments, yet again the EU is continuing to argue for a minimum price system that is totally anti-poor. The system will lead to the production of the wrong products and will do nothing for international understanding at this difficult time. I am sure my hon. Friend would agree with that.

Kelvin Hopkins: I agree with my hon. Friend. I have made the point in the past that price maintenance policies are always misguided. The European Union is supposed to be about free markets, yet it rigs the market in agricultural products completely. We must be careful about how we support and design our agricultural world, because we have a world-wide food problem that we must all address.

We should retain a significant amount of food production in our country for long-term strategic reasons, because we may all be facing serious problems in a few years. Each country ought to control its own agricultural policy. We should talk to other countries and try to adopt Fairtrade policies that do not damage poorer countries. Indeed, a well-argued letter from War on Want in The Independent this week pointed out that dumping cheap food on developing countries destroys local production. It also pointed out that farmers who in the past would have produced sufficient food for themselves—and possibly some surpluses—are now completely undermined by cheap food being exported by richer countries. That is an ongoing problem. My hon. Friend said that free markets in that sense do not work, and countries should be allowed, as he implied, to protect their agricultural sectors and ensure that they retain sufficient agricultural capacity at least to feed themselves.

I am going off the track of what I wanted to say. The point that I was about to make was about being proactive in relation to policy. I mentioned having a budget where receipts and contributions are related to relative prosperity between member states. I have said that many times and, interestingly, it was fed back into a European document of the type that we are considering. I read the
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document one day and there was a precise rejection of what I had been suggesting. I suppose that others might have also suggested the proposal, but it was interesting that it was rejected entirely. A good argument was not made against the proposal, except for saying that it would obviously mean the end of the CAP. The idea was said to be not practicable, or some such word.

Nevertheless, at least the proposal was noticed. If one has something to say, it is important in politics to say it over and again until it either proves to be incorrect or it has some effect and people start to take notice. We do not achieve very much by saying nothing. Just moaning about the European Union without being specific is not helpful, so I try to be fairly specific in these matters. The budget is ill-judged, ill-designed and ought to be fundamentally reformed, by abolishing the CAP and repatriating agricultural policies to member states.

I strongly support the greening of transport, which was mentioned in another part of the report. We are in an era of rapidly rising energy, and clearly the cost of transport—particularly personal transport—will rise rapidly. We will have to invest more in public transport. Certainly, in the continental countries, the time will come when travelling by train will be much cheaper than driving. Demand for rail travel will increase, because it will be the most economical and greenest way to travel.

Heavy investment in rail is important—in passenger and particularly freight services. Global warming and CO2 emissions are serious issues. Compared with road freight, rail freight produces one twelfth of the volume of CO2 per tonne mile—that is for heavy freight. Light freight is rather different, although even then there is a significant difference. For heavy freight, travelling by road is 12 times worse than by train. We must seriously invest in rail freight track capacity across the whole of Europe. That is being done on the continent of Europe, which is to the credit of our noble Friend Lord Kinnock, who promoted the idea of a cross-Europe rail freight network when he was Transport Commissioner.

Vast tunnels are being built through the Alps. Some of us visited the Brenner pass, which is a 35-mile tunnel primarily dedicated to freight. It is capable of taking double-stack containers on trains and will mean that trains carrying such containers can go from southern Italy to northern Germany. That is serious investment. We are miles behind in that respect. It is difficult even to get single-stack, full-size containers on to most of our network. If we want to be serious about being part of that network and that economic lifeblood or blood system of the European Union, we must build more rail freight capacity here.

My hon. Friend the Minister will know that I have been involved in promoting a dedicated rail freight scheme to build a rail freight line from the channel tunnel to Glasgow, through the major industrial areas of Britain. We have a detailed scheme that is feasible, practicable and economically worked out. I have put a submission to the Transport Committee, spoken in the Chamber about it, met senior officials in the Department for Transport and spoken to Ministers on many occasions. That is a real scheme. We have to be part of the Europe-wide rail freight network, as it will mean the possibility of transferring at least 5 million lorry loads of traffic on to rail each year, much of which will go through the channel tunnel and on to the continent.

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