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The same happened again in the 18th century, followed by the Reform Acts. The hon. Lady represents Birmingham, as did John Bright, and the great Reform Act and the granting of the vote to the working class were followed by the secret ballot and then, thank heavens, by the vote for women in the 1920s-that was the transfer of power. Then came the European Communities Act 1972, which was a real transfer of power. That is why she is right when she talks about a referendum, as I have done so often. In 1975, the Labour Government, to their credit, gave the people of this country the opportunity to express their view. I know which way I would vote. I voted yes in 1975, but I would not have done so if I had known what would happen. I voted that way not because of ignorance or naivety, but because we were lied to. That is the bottom line. We were told that we would be
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given the opportunity to engage only in the European Community. We were told in the White Paper-I remember it very well-that we would keep our national veto because it was in our vital national interests to do so. The White Paper went on to say that to do otherwise would undermine the very fabric of the European Community. The veto was necessary, according to the White Paper, for the sake of the European Community, which has become the European Union.

The reasons why we need to have a referendum are absolute. The people of this country are being denied the opportunity to have their say, and they ought to have their say because many millions of them were born since 1975, and they have been denied the opportunity to express their view. It is really important that we have a referendum, and I have by no means given up on the idea that we will have one through a Conservative Administration. We need one sooner rather than later, but that is only part of the problem.

The real problem, which is associated with the reasons for the referendum, is that there has been such a significant change in the functions of the European Union. Much more power has been transferred to the bureaucracy and to the labyrinthine process that I witness every week at the European Scrutiny Committee, on which I have sat for 25 years. I may add that I have been consistently outvoted, because every Committee in those 25 years has been packed with people who vote the other way. I say with respect to the hon. Member for Luton, North (Kelvin Hopkins) that, occasionally, he votes with me, and I am grateful for that, but such support is contrary to the normal trend. Indeed, on crucial matters, such as the assessment of treaties, I have to write minority reports.

Kelvin Hopkins: I agree with the hon. Gentleman, but I am sure that he is aware that there is growing scepticism throughout the European Union, and particularly among the young. The Eurobarometer opinion poll shows lower support each year for the European Union, particularly among the young, and that is an optimistic finding for the future.

Mr. Cash: That may be true, but the problem is about political will and the opportunity that people have to express those views not just in a referendum, but even in this House. People are faced with mind-boggling complexities, and it is completely impossible to run the country. We are in charge but not in control. We are not governing the country in line with the democratic wishes of the people. As I said in The Daily Telegraph the other day, we are merely acting as managing agents for the European Union.

The situation is exactly the same when we come to the argument on financial services. We have been through that issue, I have spoken about it over and over again in the House, and I have written to the Financial Times about it many times. We are told that we will have national supervision, but we should forget that, because, as I said in the financial services debate the other day, rules, which will be imposed on us by European regulations, will require certain actions. The question of whether the Commissioner is Monsieur Barnier or anybody else may be important, but the real question is, where does the power lie? As of yesterday, when we allowed the relevant measure to go through and the Chancellor of
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the Exchequer made his deal, the City of London was effectively no longer able to exercise that power over financial services.

I have been critical of the trade associations in the City of London for allowing that supranationality. In the papers today, I have seen some incredibly hypocritical cant from the leaders of those organisations, who could have put up a real fight but allowed the whole thing to go through, putting 15 per cent. of our gross domestic product at risk. Indeed, I was very glad of the support of my hon. Friend the Member for Cities of London and Westminster (Mr. Field) when I spoke in the debate two days ago. He agreed that the practitioners whom he had met-he is more likely than many of us to meet them-realised that the situation was not good for their businesses. Many young people are leaving the City of London to go to Zurich, Monaco and other places precisely for that reason.

The real question is one of power and sovereignty, and that is why I applaud the sovereignty Act proposed by my right hon. Friend the Member for Witney (Mr. Cameron). I have had discussions with him and my hon. Friend the Member for Rayleigh (Mr. Francois) about it, and I will continue to have them because I do not give up-ever. They know that we must have a proper sovereignty Act. My point to the hon. Member for Birmingham, Edgbaston is this: the competition of the sovereignties is very real and we cannot allow ourselves to be run by a judicial autocracy; there is the political power to consider.

In March, in an important speech on the Human Rights Act 1998, Lord Hoffmann set out his objections to the way in which the Strasbourg Court was arrogating to itself federal, judicial and quasi-political activity. The same could well apply to our own Supreme Court, for the same sorts of reasons. In his very important Maccabean lecture, Sir John Baker, one of the greatest of all legal historians, launched a proper and incisive attack on how Parliament-this Parliament, here in Westminster-has allowed itself to lose its credibility, as the hon. Lady has also said.

We have lost credibility, not so much in respect of the kind of questions that have been blasted all over the newspapers, although those have contributed, but because we have lost the confidence to exercise our role of accountability in respect of the Government of this country, who themselves, at one remove, have abdicated their responsibility by their policy of appeasement on the European Union.

Ms Gisela Stuart: On the question of competences and sovereignty, does the hon. Gentleman not agree that the Lisbon treaty creates a competence to create competences? The question of sovereignty is not so much a problem with the courts, as with the fact that the treaty can organically create its own powers. That is beyond the reach of any sovereignty Act.

Mr. Cash: That is not so, I am afraid. I shall not spend the rest of my speech explaining why, although I will be happy to talk to the hon. Lady about it later. I shall be dealing with the matter in due course in Parliament as a whole.

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The hon. Lady referred to the competence question. In relation to the German constitutional court, I have argued for a long time-not in an anti-German sense, but simply because that country is the predominant force in Europe-that Germany is creating a situation in which it determines, through the Karlsruhe court, whether its own constitution will determine the future of Europe. The court is saying that Germany will not do anything inconsistent with its constitution. Gerhard Schröder put it this way a few years ago: "I am European because I am German." That is important because we have to understand that this is about not only the law but matters of foreign policy and the national interests of individual countries represented as the member states of the European Union.

There was a similar situation, although a long time ago, with regard to the development of the United States. John Taylor, a great ally of Thomas Jefferson on states' rights, set out unequivocally the basis on which in the United States constitution the states' rights were to be absolutely at the heart of the American federal system. The European Union does not exactly have a federal system, but all the necessary ingredients are there, with one great exception. In relation to economic competitiveness, the single market is governed by a uniform system that, as I said in the debate on the financial regulations, prevents competitiveness. We do not have states' rights in the European Union. One reason for the success of the American economy has been those states' rights, which have created an economic environment within which the United States has been capable of developing its economy. We have a mixture of political failure and over-exuberance-perhaps even over-indulgence-in the judicial field, in respect of the European Court of Justice and, quite probably, of our own Supreme Court.

In addition to that, we have economic failure. The reality is that Europe is not working. There is very high unemployment, as there always has been. I said this during the debates on the Maastricht treaty as well. The bottom line is that there is interference in every nook and cranny of every part of the lives of the people whom we represent. It does not work; that is why we need to have renegotiation.

In a referendum, which I believe is still essential, the question that I would put, as I said in The Daily Telegraph the other day, is "Should the United Kingdom renegotiate the terms of its relationship within the European Union?" That is not an "in or out" question, but, believe me, if we presented it to people we would get at least 80 per cent. saying yes, we should renegotiate those terms. That would then enable the United Kingdom to lead the process of renegotiation to turn this increasingly amorphous, homogenous and utterly useless organisation into something that could work effectively on the basis of political co-operation and trade-a semi-EFTA, or European Free Trade Association, arrangement-and get rid of the notion of European government, which is completely autocratic and is destroying our democracy.

These are not just the rantings of a Eurosceptic. This is about good government and democracy, and proper accountability, in relation to the wishes of the electorate whom we are supposed to represent. I agree with the hon. Lady about the Committee on Reform of the House of Commons set up under the chairmanship of the hon. Member for Cannock Chase (Dr. Wright).
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That is only nibbling at the root of the problem of how to return real accountability to this House. We should rediscover the confidence to be able to hold the Government to account and to ensure that we are not just run by the Whips through a process of advancement, preferment, ministerial office and whatever else. We represent the people of this country, and it is our duty and task to ensure that we are guaranteeing that they are governed in a proper and sensible manner. By ceding this massive degree of control to the European Union, we have abrogated our responsibility.

I can understand that in 1945 people did not want to have another war in Europe. My father was killed in the war. However, times have changed. The problem is that the arrangements that were set up and the development of the functions of the European Union have not kept pace with what is required. We have allowed more and more integration when we should have been creating an association of member states. That is what we should have been doing, and that is what we have to come back to; otherwise the people of Europe will suffer as well as the people of the United Kingdom. We have to restore to the people, through the ballot box, real democracy on the ground. This is not just a theoretical and ideological approach-it is about making Europe work in the interests of the people whom we represent, as we are completely failing to do so.

We are told that we have to put the economy ahead of the European issue, but the trouble is that the economy is affected by the European issue. There is over-regulation, which costs European businesses €600 billion a year. There are the problems of the common agricultural policy, the common fisheries policy, and so on. We have to restore government to the people of this country. That requires a referendum of a proper kind, which I will continue to insist on, and a sovereignty Bill that would ensure-I have a wording that would achieve this objective-that we have a template against which we can repatriate powers and force renegotiation within the European Union. That is our objective, and that is what we must achieve. It is in the national interest, and we must do it immediately.

4.55 pm

Mr. David Drew (Stroud) (Lab/Co-op): As always, it is a pleasure to follow the hon. Member for Stone (Mr. Cash). I did not vote in favour of entry into the so-called Common Market in 1975, and I was a loyal supporter of the Labour party in 1983, when I thought we had a rather good policy on Europe. Some of us have not changed our minds and will continue not to.

I shall be brief, because I know that other hon. Members want to get in. As always in such debates, we could say a lot more than we have time available to say it in. I shall start in the same vein as my hon. Friend the Member for Luton, North (Kelvin Hopkins) by being optimistic. Where Europe is at its best will be seen this weekend in our contribution to the Copenhagen debate. It is right and proper that we have a unified approach and put forward how the UK and the wider EU intend to reduce their dependence on carbon. I hope that we will not only talk the talk but walk the walk and make tangible proposals for how we can reduce our carbon dioxide emissions.

Mr. Francois: On that point, we all want a deal at Copenhagen.

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In my speech earlier, I said in reference to a debate in the European Parliament that five socialist-aligned MEPs had voted against a motion. I have since double-checked that, and in fact they abstained. I therefore wish to take this opportunity to correct the record, and I hope that the hon. Gentleman will forgive me for intervening on him to do so.

Mr. Drew: I am pleased that the hon. Gentleman has corrected the record. I do not quite know how people can abstain on climate change, but there may be some wonderful explanation in due course.

Another area in which the EU has a credible record is international development. When we go out into the field, we see that there is greater co-operation between the nation states of Europe. I have sometimes criticised some of them for not paying the contribution that they should have done, particularly for provision in the country that I care most about, the Sudan. However, it makes sense that we have international relationships so that by pooling our budgets and expertise, we can make more of a contribution on the ground.

I turn to matters on which I am far less optimistic than my hon. Friend the Member for Luton, North. I shall be quite brutal about the non-referendums. The "cast-iron guarantee" of the Conservatives, which was nothing more than words, and what has happened with my own party and the Liberal Democrats, show why the British electorate have no faith in any of us when it comes to Europe. Each of our parties in turn has let them down. We promised them a referendum and have reneged on it. Anyone who thinks that that has been forgotten about forgets the European elections in May, in which the electorate gave us a kicking-particularly my party, whose policies and position on Europe are anything but credible. They will not forget it at the next general election. That is why some of us will not be standing on a platform other than to say, "It will not be a question of a referendum on Lisbon; it will be a question of a referendum on in or out."

Kelvin Hopkins: I agree entirely with my hon. Friend. We had a mini-referendum on the referendum in Luton, which was won by a massive majority. I spoke loudly in favour of a referendum with a loud hailer from the top deck of an open-top bus. We had a vote and there was a massive majority in favour of a referendum.

Mr. Drew: I am pleased to hear that. I ran a constitutional change survey in my constituency called "Up for debate", which was about a wide range of changes to link in with the work of the Select Committee on Reform of the House of Commons, chaired by my hon. Friend the Member for Cannock Chase (Dr. Wright), of which I was pleased to be a member. It was interesting that about 70 per cent. of the people saw a need for referendums, and not necessarily only on European affairs. In the written text accompanying the poll, most people said that the fact they were denied a referendum on Lisbon made them feel more strongly that we should have referendums on a range of issues, particularly the EU.

I say this to those on both Front Benches: their credibility is lacking when it comes to the electorate, who will punish people who refuse to give a referendum because they want a say on the future of Europe. I do not know what the outcome will be, or whether people
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will vote to stay in the EU. The polling evidence shows, as my hon. Friend said, that more than anything, the younger the person is, the more sceptical they are. I am not surprised at that, because they feel completely divorced and detached from the European monopoly and an organisation that seems to be sucking in even more power, but has nothing in common with what they believe. We must test the water not only in the UK, but across the whole of the European superstate. People will become even more sceptical. That is why we must lead the way-not be in the following caravan-by giving people who want to stop increasing federalisation a genuine chance to express their opinions.

Mr. John Horam (Orpington) (Con): As a matter of elucidation, is the hon. Gentleman in favour of referendums in principle-on Europe as much as anything else-or is he just against the breaking of pledges on referendums?

Mr. Drew: I want a referendum because I want a fundamentally different Europe. The EU has evolved completely beyond what even the most sceptical and pessimistic of us envisaged at the beginning. I felt that the EU would eventually fail as an organisation and become a very loose confederation. Sadly, I have been proved wrong. As my hon. Friend the Member for Birmingham, Edgbaston (Ms Stuart) said, those at the core who have driven the process forward have been such a tight-knit cabal and so clever that they have been able to manipulate the processes. They have left everyone else behind. The political parties have been sucked into it-more fool them, because we need to recognise that people outside feel detached and discontented with what is happening.

I chided my hon. Friend the Member for Great Grimsby (Mr. Mitchell) on the decline of manufacturing, which is my second and final point. As I said, ownership matters, and we have seen the ownership of our great industries such as energy and water, and particularly our great manufacturing base, gradually drift abroad. We have ended up in the most ridiculous situation. Barely 11 per cent. of our gross domestic product comes from manufacturing, which is completely untenable and unacceptable. That must be reversed as a matter of urgency.

Mr. Cash: Just for the record, has the hon. Gentleman come across the extremely important work in which Roland Vaubel deals with that problem-in relation to not only manufacturing, but all legislation that affects employment and social law-and demonstrates that regulatory collusion exists? It is a very serious work by a professor of economics at Mannheim university. He demonstrates the manipulation of majority voting, which will be made worse by co-decision, as a result of which certain countries get their way by using the institutional system that the Minister so foolishly says is unimportant. That is how people serve their own interests.

Mr. Drew: I do know of that, but I would trace the problem back even further. Martin Wiener and Correlli Barnett trace it back to the 19th century, when finance was always able to outwit manufacturing. There is a connivance whereby the City of London has grown more powerful. It has done so not only in its own
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right, but because it has destroyed manufacturing. Any manufacturer in this country will be incandescent at their inability to derive flows of capital. The capital gets sucked up into housing, high finance and bank-rolling around the world at the expense of our manufacturing industry.

If we are serious about restoring that industry-and we have an opportunity to do so given the relative depreciation of the pound-we can only succeed if we go back to owning those assets nationally and deriving the ability to manufacture in our own right in this country. That would begin to raise the role of manufacturing in terms of its GDP percentage, and that should be one of our targets. I am not a great target setter-Governments tend to set all manner of targets and then cannot reach them-but we should aim to double the amount of manufacturing over the lifetime of the next two Parliaments. That is not much to ask, given that that is where we were in 1997. We probably will not get back in the next two decades what we lost in the last decade, and I realise how hard it will be, but that is what we have to do.

The anti-industrial culture that has been rife in this country for the last 100 years or more has to be taken on. I never worry when the City of London has its wings clipped or when high finance is curtailed and controlled, because it is at the root of the failings of the British political system. All that has happened is that the City of London has exported its power to the EU, which has been a willing co-conspirator in that regard, and British manufacturing has declined ever more quickly. We must face up to that problem, because otherwise we will rue the day that we failed to deal with it.

As always on these occasions, there seem to be more sceptical voices on the Labour Benches than voices in favour of the EU. That is because those of us who care passionately about Europe are still fighting our corner. We may not be in the majority at the moment, but stranger things have happened and parties have changed their mind.

Kelvin Hopkins: I sounded an optimistic note in my speech. Does my hon. Friend agree that if the Government were to change their position to our position, the great majority of Labour Members would switch sides without turning a hair?

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