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There is endemic fraud. The Maastricht deficit criteria of 3% is nothing short of a joke, with massively seriously consequences for the voters in this country and throughout Europe, who are subjected to bungled economic management, and massively increasing debt, with the hidden costs of up to £3.1 trillion--in our own case in real terms-which cannot be swept away. The budget deficit proposals of £6 billion are a mere sop in relation to the mismanagement that is coming through Europe and affecting our economy as well, and we will not convince the bond markets or the rating agencies, which determine our ratings in the global marketplace.

As I have said, we were told by the Prime Minister that we need a strong eurozone, because 50% of our trade is with that zone. However, the eurozone is imploding, and Angela Merkel and 68% of the German people are opposed to the Greek bail-out, precisely because the whole economic and political structure of the European Union does not work.

Mr Gregory Campbell (East Londonderry) (DUP): I thank the hon. Gentleman for giving way again, in this very timely debate. I am listening with great interest to him analysing the situation, both within and without the eurozone. Does he agree with me that if we do not move now and grasp the nettle-as he has accurately said we should-one of the political problems will be the rise of the far right across Europe, which preys on the very fears and concerns that we all know are out there, and which we have seen emerge from time to time in various nation states?

Mr Cash: I absolutely agree with the hon. Gentleman, and in my essay in "Visions of Europe" in 1993 I said exactly that-that that would be the consequence of the lawlessness that would follow. The problem is that it is not good enough to wring our hands and say, "Oh well, we'd like this to be better," or "We're going to go along with it." We have to have a radical policy based on proper analysis. I wait to hear what my hon. Friend the Minister says, but I cannot believe that he could seriously disagree with anything I have said. These are factual questions. If it is just a matter of culture or attitude: "Oh well, we want to be good Europeans," or "We don't want to face up to these things," or "People such as Bill Cash are just Europhobes who go around ranting about Europe and banging on"-

Mr Keith Simpson (Broadland) (Con): No.

Mr Cash: I am glad that my hon. Friend has made the inevitable harrumph, but the matter needs to be taken extremely seriously. Europe does not work as it is now devised; it is pre-eminently a practical matter. It is no good our being committed to a eurozone that is so undermined by its own institutional inadequacies and contradictions, by the diversity of its different economies, and by the real requirements of the voters and the business community in each country. Is it all so difficult, complicated and entrenched that nothing can be done, or do we roll up our sleeves and get down to resolving it? I suggest that at the summit this week we at least start to get serious about the nature of the problem. Europe does not work, not only because of over-regulation and the irreversibility of the acquis communautaire, but
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because it is essentially undemocratic and authoritarian, which is dangerous, as both German and Greek commentators agreed only yesterday. And it is not only one or two commentators; that view is becoming endemic and demonstrable.

The whole of Europe is trembling and action is needed now. There are those, such as Ambrose Evans-Pritchard of The Daily Telegraph, Martin Wolf and Ralph Atkins of the Financial Times, Walter Munchau, Stephen Glover, Andrew Alexander and a growing band of Euro-realist Members of Parliament who are beginning to speak out, and many who have done so over many years. In Holland, the general election left its message on the table-in France and Germany, the same. Across the entire breadth of the continent, in Italy, Greece, Romania and Bulgaria, in the referendums that have taken place and in the ditching of the constitutional treaty, which was then supplanted by the Lisbon treaty-virtually the same thing-people are disillusioned with the European Union and demand change and action, yet we are still presented with a policy of further enlargement, against which I have argued for many years. In the leader in today's Financial Timeswe hear more about Europe's debt crisis. It states:


On enlargement, only last week The Spectator devoted its leader to the proposal for Turkish accession. It is clear that Turkey is moving towards accession, and on both economic and political grounds it should not be regarded as a prospective member of the club, given its current dealings with Syria, Iran and the middle east. As is so often the case in the political and economic sphere, the problem with enlargement is that European Union policies, once espoused, are deemed irreversible. Just when decentralisation and democracy-listening to the people and involving them and the big society in our Government-have become so essential, the institutions and governmental establishments of the European Union and each of the member states career ever more wildly into crisis.

Recently, we have had the experience of the European arrest warrant. The absorption of our criminal justice system is yet another area of deep concern. Under a European arrest warrant, Mr Arapi, a British resident from Leek, in Staffordshire, was convicted in his absence and sentenced to 15 years. We have the inconceivable and unacceptable vision of a British judge ordering Mr Arapi's extradition, when there is apparently overwhelming evidence that he was not where he was said to have been when he was supposed to have committed a murder in Italy. The whole project is flawed from beginning to end and must be radically reformed, or else.

I turn now to the European Scrutiny Committee. Parliament has a system for dealing with many of the problems that I have outlined or, at any rate, for alerting Members of Parliament to what is going on. I regret to say that the Committee is still not sitting, despite the fact that Parliament has now been back for a couple of weeks. I have been on the Committee for 26 years, sometimes in adverse circumstances; it has been difficult to be heard, let alone listened to and certainly agreed with, despite much evidence. While in opposition in the last two years of the previous Parliament, the Conservative
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party achieved remarkable unity on the European issue and the Lisbon treaty, barring just one vote on the sovereignty of the United Kingdom.

Although the manner in which Parliament deals with European legislation has been subjected to a number of improvements, we have not gone far enough. Indeed, the present Home Secretary made some significant proposals for reforming European scrutiny. She agreed to adopt my proposal that if the European Scrutiny Committee recommends a European matter for debate, and 150 Members of Parliament propose that it is a matter of national interest, it should be subjected to a free vote on the Floor of the House-I say "vote", not "take-note motion", because that is one of the problems. She also proposed that the Committee meet in public, as many of us have advocated for some time. After the issue was finally voted on by the Committee, it was abandoned, and it must be revived.

In my 26 years on the Committee, the establishment and the Government of the United Kingdom have always ensured that there is a majority in favour of European proposals that emanate from Brussels. Matters may be recommended for debate in a European Standing Committee-sometimes by a majority vote-but no vote in such a Committee ever goes against the Government. If one ever does, it is immediately reversed on the Floor of the House as being inconsistent with the European Communities Act 1972. That is no way to proceed. Not one vote has ever gone against Brussels legislation in my 26 years on the Committee. Only last week, a Cabinet Office Minister indicated that there were no proposals for a sovereignty Act to alter that disgraceful state of affairs.

That is how the European Scrutiny Committee functions. I have been on it long enough to know that not one single vote on any European legislation that has been through a European Standing Committee on the recommendation of my Committee has ever been passed on the Floor of the House, and I challenge anyone to come forward with an example. We have take-note motions, Adjournment debates and general European affairs debates, but we do not have votes on seminal matters of the kind I have described.

Whatever the merits of the national interest, which I have already described, it is vital to create a requirement, set out by our Prime Minister in 2005 when he referred to an imperative requirement to achieve competitiveness in the British economy. The European Scrutiny Committee is called in for debates, but issues are not voted on, which makes the process intrinsically futile. The Committee is important, but it must be reformed and improved, although improvements are taking place.

The Committee has the power to impose a scrutiny reserve while debates take place, but it is sometimes overridden out of what is described as urgent necessity. In any case, such measures merely hold down the European juggernaut for the time being, and there is no resistance whatever to majority votes in the Council of Ministers being imposed on the UK Parliament. A work by Sanoussi Bilal and Madeleine Hosli states what some of us know already, although it is worth recording. They say that in the EU,

Given that the enormous matters we are discussing affect the entire British economy in one form or other, and given what is at stake, only some of which I have indicated, it is inconceivable that there should be such incredible problems in the fault-lines of the system that has been devised. Once again, the issue needs to be taken extremely seriously, but I wonder whether it will be. If it is not, there will be difficulties of a kind that I do not need to specify.

The Back-Bench business committee proposals, which will come before the House this afternoon, do not include European documents, although the proposals would not seem to preclude votes on European affairs, unless such matters were taken only in Westminster Hall, and that highly contentious question will no doubt be debated this afternoon. We therefore have debates on European matters without votes, on a take-note basis. Much business is conducted behind the scenes in Brussels by the United Kingdom Permanent Representation to the European Union and COREPER, using their own arcane procedures. It is conducted within and parallel to the European establishment and it is intertwined with it. Why and how can that be allowed to continue?

Not only is most business conducted behind closed doors, but the majority voting system itself is not transparent. More often than not, we do not even know which way the UK will have voted or whether it will have deliberately abstained-we know a bit more about the German situation-to acquiesce in or even appease the European institutional consensus. At the same time, the UK Parliament, and therefore the British people, are bypassed and stitched up.

Recent events relating to the 1922 committee concern the independence of Conservative Back Benchers, but the same applies to the parliamentary Labour party. It is essential that those of us on the Back Benches have systems, mechanisms and procedures that can act as a safety valve. We do not necessarily want those things because we want to act in a hostile manner or to be difficult or awkward, but because there is an alternative view, and expressing it is part of our freedom of speech and vitally affects the interests of those who vote us into this place.

The BBC has consistently declined to give proper coverage to the European issue and has adopted that policy with tenacity and editorial contrivance since the 1950s, as has been well documented. Anyone who raises serious and seminal questions about the European issue-most of their predictions have turned out to be true-tends to be regarded as Europhobic or worse.

What can now be said with certainty is that, as we speak, our economy, our democracy and our constitution are on the line. This week, the summit will discuss proposals for our Budget to be presented to the European institutions before our Parliament sees it. There may be attempts to create some obscurantist device, perception or spin to make it look as if these things are not really happening or that they are all happening under the aegis of the majority vote. At last, however, the penny has begun to drop. The mask is being stripped away. Our national interest is at stake, and the need for
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political will to reaffirm the sovereignty of the British people through their representative Parliament has become paramount in the national interest, as is there for all to see.

This critical summit is the time for us and the European Union to face up to action and reality. Let us put our commitment to a sovereignty Act on the table this week. Let negotiations commence between all 27 member states for a voluntary association of nation states to get out of the mess that exists, which will get worse. Even the Prime Minister has recently put forward the idea of an association of member states. If that falls on deaf ears at the European Council, let those member states who want to, including Germany and France, use the enhanced co-operation procedure for a fiscal and political union-a new Zollverein with a new treaty-with a referendum here in Britain on the proposals; for they will affect us in a fundamental change in our relationship with the European Union. We can remain with other like-minded states in an associated status within the amended European arrangements, as I proposed in my pamphlet of 2000 called, in deference to Churchill's time-honoured phrase, "Associated, Not Absorbed".

10.10 am

Kelvin Hopkins (Luton North) (Lab): May I say first what a pleasure it is to serve under your chairmanship this morning, Mr. Streeter, and secondly may I convey my sympathy to the hon. Member for Stone (Mr Cash) on his bereavement? I congratulate the hon. Gentleman on raising this important debate. I thought it important to come along and put a democratic socialist perspective, arriving at the same conclusions from a different perspective on the European Union.

This is a critical time in the development of the European Union and in Britain's history. The European Union and, indeed, Britain, are suffering severe economic difficulties. The eurozone is in crisis and the plans of the extreme federalists are unravelling before our eyes. That is a welcome movement, and is happening not before time. It is possible that Germany is in the process of re-establishing the Deutschmark, or a Deutschmark area. It has great difficulty in doing that, because it is so exposed to other member states of the European Union, which have great economic difficulties, but that shows the folly of imposing a single currency on different economies, with different levels of economic success. It does not work and on many occasions elsewhere it has been proved not to work.

The peoples of Europe are deeply sceptical about the European Union and the direction that it has taken. The danger, as the hon. Gentleman said, is that there could be a rise in nationalism as a reaction. Such a reaction results from the fact that the peoples are not listened to. The opposition to much of what the European Union has been doing recently comes from the left. The referendum in France was won-that is the sense in which I see it-by people of the left. The left was also in the lead in the Dutch referendum. Even to go back to the Swedish referendum on joining the euro, which was another substantial no vote, it was the left-trade unionists, socialists and social democrats-who pressed that case.

Over and again I have to point out that, although we keep talking about Europe, we are discussing not Europe but the European Union. Europe is a geographical
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entity with many historical and cultural links. The European Union is an invention of humankind, imposing a political structure on many of the nations of Europe, but it is not Europe itself. Although I may be accused of being a Europhobe I genuinely love Europe. I am culturally European. Clearly, Britain is European. I love European music, languages and literature. I love and enjoy everything about Europe, but I do not approve of the European Union.

Mr Cash: In relation to art, music and culture, and in every other way, I endorse what the hon. Gentleman says 100 per cent.

Kelvin Hopkins: I thank the hon. Gentleman for that positive intervention. In a few weeks I shall be sojourning in Provence, sampling wonderful European wine, listening to music and so on. Europe is a wonderful place, but the European Union is deeply flawed.

The hon. Gentleman has said that even this week the European Union is trying to interfere and to impose its will on Britain's decisions about its budgetary situation and economic policies. That was reported yesterday in the Evening Standard, so it is not going away. I hope and trust that the new Government will tell the European Union in no uncertain terms that decisions about our budgetary and economic policies will be decided by the British Government, who will be accountable to the British Parliament, and will not be determined by the European Union. Perhaps the EU is under the illusion that it can manage Britain as well as it has managed the eurozone. That would lead us pretty much into disaster.

While I am on the question of the European Union's recent policies, I shall mention enlargement. It is interesting that the hon. Gentleman mentioned Edward Heath. I listened to one of his last speeches to Parliament before he retired 10 years ago, and he made a strong point to the effect that enlargement would not work. He was against it. I do not speak for or against it today, but Edward Heath was strongly opposed to it because he thought that a European Union covering more than the developed nations of western Europe would not work. He wanted a deeper and stronger European Union, possibly with a single currency, but he believed that it could not work if it were to be widely enlarged. One of the reasons I have supported enlargement is that I believed it could weaken the European Union. That may be a cynical view, but I thought that over time people would realise that ramming countries or nation states together in that way would not ultimately work. Therefore I have gone along with enlargement. I think it is a way of ensuring that in the end people come to their senses.

I am not against international alliances or co-operative relationships with all our neighbours. Indeed, those are vital. I am sure that everyone would be in favour of those things if they were based on democratic Governments agreeing to work together for mutual benefit on behalf of their peoples. That is what the European Union should become, in my view. We must stop the drive towards a federal Europe now, retain what sovereignty we have, and begin to roll things back: the EU and what it has taken over from Britain and other member states.

I have often mentioned my concern about the common fisheries policy, which is completely barmy. I think that Edward Heath decided at the last minute that we should
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go into that, but it has been disastrous. Some of the biggest fisheries in Europe are Britain's, and the EU itself has reported, in the past week or two, that 30 per cent. of fish stocks are at the point of collapse, and all fisheries are being overfished. The only way to overcome that is for fisheries to be restored to member states, which will then have the sense of ownership and responsibility for managing the areas in question. Then fish stocks can start to recover. Reforms have taken place and there are non-fishing areas, but it will not work until member states take over responsibility for their historic fisheries and husband them as they did in the past.

The costs of agriculture are enormous and every member state in the European Union has its own approach. Some are more agricultural than others. We are one of the most efficient agricultural nations, but that is only a small part of our economy. Other countries are overwhelmed by agricultural costs and inefficient, small-scale agriculture, but it is up to those member states to manage their own agriculture. If we need to transfer revenues between member states, that can be done on a voluntary basis, and if poorer states need to be sustained by richer states perhaps fiscal transfers can take care of that. The common agricultural policy distorts the whole of agriculture and operates in an inequitable way. Some member states pay more than they should and some receive more than they should, in a way that bears little relationship to their relative wealth. We should start to roll back agricultural policy.

I hope that the Government will give notice that we want to return to a world in which member states manage their own fisheries-an abandonment of the common fisheries policy. If other member states or the European Union refuse, Britain should give notice that, after a period, we would re-establish control of our historic fishing grounds. I hope that that would put sufficient pressure on the EU to make some sense of it.

The real question is one of democracy-of whether the populations of the various member states have control of their own destinies and can choose to be free market capitalist or democratic socialist countries. I have campaigned all my life for a democratic socialist Britain, and I do not want that possibility to be taken away by EU bureaucrats. Equally, some want to see a more free market capitalist world in Britain. We will not want bureaucrats in Brussels telling us that we cannot do things if the people of Britain have chosen to go in those directions. It is about democracy. One of the great advantages of our system of government is that when the population gets fed up with the Government or do not like what they are doing, it can kick them out and put in another Government with a different view. The essence of democracy is a real choice of policy in how people are governed.

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