HC Deb 11 December 1991 vol 200 cc859-78 3.30 pm
The Prime Minister (Mr. John Major)

With permission, Mr. Speaker, I should like to make a statement on the European Council in Maastricht which I attended with my right hon. Friends the Foreign Secretary and the Chancellor of the Exchequer.

The European Council has reached agreement on a treaty on European union. The relevant texts have been deposited along with the presidency conclusions. The House will be invited to debate the outcome next week.

Let me set out the main provisions of the agreements we reached.

The treaty covers economic and monetary union and political union. It follows the structure for which the United Kingdom has consistently argued.

The treaty creates a new legal framework for co-operation between member states in foreign and security policy and in the fight against international crime. That co-operation will take place on an intergovernmental basis outside the treaty of Rome. That means that the Commission will not have the sole right of initiative and the European Court will have no jurisdiction.

On defence, we have agreed a framework for co-operation in which the primacy of the Atlantic alliance has been confirmed and the role of the Western European Union has been enhanced.

As the House knows, there was strong pressure over many months for all aspects of co-operation to come within European Community competence. That was not acceptable to this country. Instead, an alternative route to European co-operation has been opened up. I believe that this will be seen as an increasingly significant development as the Community opens its doors to new members, and more flexible structures are required.

I turn now to the main features of the text. The treaty provides for the possibility that member states will wish to adopt a single currency later this decade, but they can do so only if they meet strict convergence conditions—conditions for which the British Government have pressed from the outset. These cover inflation, budget deficits, exchange rate stability and long-term interest rates.

A single currency may come into being in 1997, but only if a minimum of seven countries meet the convergence conditions, and eight of the Twelve vote in favour. The treaty lays down that a single currency will come into being by 1999, but only if those convergence conditions are met and only for those countries which meet them. It is therefore highly uncertain when such a currency will be created and which countries it will cover.

In the House on 20 November, I said that there must be a provision giving the United Kingdom the right to decide for ourselves whether or not to move to stage 3. That requirement has been secured. It is set out in a legally binding protocol which forms an integral part of the treaty. The protocol was drafted by the United Kingdom and fully protects the position of this House. The effect of the protocol is as follows. We have exactly the same option to join a single currency at the same time as other member states if we wish. We shall be involved in all the decisions. But, unlike other Governments, we have not bound ourselves to join regardless of whether it makes economic or political sense.

The treaty text on political union provides for enhanced intergovernmental co-operation on foreign and security policy, on defence policy and in the fight against terrorism, drug trafficking and other crimes.

International crime knows no frontiers. Terrorists and other criminals must not be allowed to escape justice or to retire abroad with the proceeds of their crime. This text gives us a new basis for co-operation with our partners in bringing these criminals to justice.

The text provides for joint action in foreign policy, building on what was already agreed in the Single European Act. But, as I told the House on 20 November, if Britain needs to act on its own, it must be free to do so. The treaty meets that requirement. Joint action can take place only if we agree. Where there is no joint action, each member state is entirely free to act on its own. If, after joint action has been agreed, a member state needs to take its own measures to meet changed circumstances, it may do so.

There was pressure from other member states to take foreign policy decisions by majority voting. I was not prepared to agree that Britain could be outvoted on any substantive issue of foreign policy. Some of our partners also sought to draw a distinction between decisions of principle, where unanimity would apply, and implementing decisions which could be subject to majority voting. No one was able to explain how that distinction would work. I told the European Council that, if such occasions did arise, we should consider the case for majority voting on its merits. The treaty reflects our view. It provides that the Council may, but only by unanimity, designate certain decisions to be taken by qualified majority voting. But we cannot be forced to subject our foreign policy to the will of other member states. We have, in fact, preserved unanimity for all decisions where we decide that we need it.

We are agreed that Europe must do more for its own defence. We should build up the Western European Union as the defence pillar of the European union, but the treaty embodies the view set out in the Anglo-Italian proposal two months ago, and endorsed at last month's summit of the North Atlantic Treaty Organisation that whatever we do at European level must be compatible with NATO. The WEU must in no way be subordinate to the European Council. It is not. We have avoided the danger of setting up defence structures which would compete with NATO. We have created a framework in which Europe can develop its defence role in a way which complements the American presence in Europe and does not put it at risk.

In these negotiations, we put forward a series of proposals designed to be of direct benefit to the European citizen. All of them were accepted. The Community has agreed to increase the accountability of European Community institutions; to strengthen the European Parliament's financial control over the Commission; to allow the European Parliament to investigate maladministration and to appoint a Community ombudsman accessible to all Community citizens; to build up the role of the Court of Auditors, which becomes an institution of the Community; and to ensure compliance with Community obligations by giving the European Court of Justice power to impose fines on Governments who sign directives but subsequently do not implement them.

We wanted—and secured—a sensible enhancement of the role of the European Parliament. We did not accept the proposal made by other member states for a power of co-decision between the Parliament and the Council. As I told the House on 20 November, the Council of Ministers must be the body that ultimately determines the Community's laws and policies.

I also said then that we were prepared to consider some blocking power for the European Parliament. That has now been agreed. The treaty sets up, in a limited number of areas, a conciliation procedure where there is disagreement between the Council and Parliament. In the last analysis, the Parliament would be able to block a decision in those areas, but only if an absolute majority of its members turned out to vote the proposal down.

The House has been rightly concerned at the creeping extension of Community competence over the last few years. The Commission has often brought forward proposals using a dubious legal base, and the Council has found it difficult to halt that practice in the European Court. We have taken significant steps to deal with that problem.

First, the structure of the treaty puts the issues of foreign and security policy, interior and justice matters and defence policy beyond the reach of the Commission and the European Court. Secondly, the treaty itself embodies the vital principle of "subsidiarity", making it clear that the Community should only be involved in decisions which cannot more effectively be taken at national level. Thirdly, in some areas—notably health protection, educational exchanges, vocational training and culture—we have defined Community competence clearly for the first time. Fourthly, there will be no extension of Community competence in employer-employee relations—the so-called social area.

We have a high standard of social protection in this country. Our national health service, free at the point of use, is the envy of many in Europe, but we recognise the Community's social dimension. Also—unlike some of our European partners—we have implemented that dimension too; 19 out of the 33 measures in the social action programme have been agreed. But there is no reason for the Community to get involved in employment legislation, which must be for each country to decide for itself.

Over the past 12 years, we have transformed labour relations. In 1979, 29 million working days were lost in strikes. Last year the figure was less than 2 million. I was not prepared to see that record put in jeopardy. Nor was I prepared to risk Britain's competitive position as the European magnet for inward investment. I was not prepared to put British jobs on the line. [Interruption.]

Mr. Speaker

Order. A great many people outside the House are interested in what the Prime Minister has to say.

The Prime Minister

Many of our partners have a wholly different tradition of employment practice which is reflected in the separate arrangements which they have agreed, which will affect only their countries and for which only they will pay. But even among these member states there are many who fear the effect of Community measures on their jobs and their ability to compete. Our arguments are based not only on our national interest but on the risks we perceive to the competitive position of the Community as a whole.

This week's events in the Soviet Union were a salutary reminder that reform in the Community is not an end in itself. The Community's primary task must be to extend its own advantages of democracy, stability and prosperity to eastern Europe. At British initiative, we committed ourselves at Maastricht to the further enlargement of the Community, starting with the EFTA countries. When they and, in due course, the new democracies of eastern Europe are ready to join the Community, we shall be ready to welcome them.

With this in mind, the Commission will report on enlargement to next June's European Council in Lisbon. Thereafter, it will be for the British presidency to carry that work forward. I look forward to doing so.

We agreed a number of statements on foreign policy issues. I will single out two of them. On the Soviet Union, the European Council calls on the republics to respect the rights of minorities, to implement international agreements on arms control and nuclear non-proliferation, to control and secure their nuclear weapons, and to honour their obligations in respect of the Soviet Union's external debt.

The European Council has endorsed the demands which we, France and the United States have made to the Libyan Government requiring them to abandon their support of terrorism and to hand over the alleged perpetrators of the Lockerbie bombing.

The founders of the Community knew that they could not create a viable organisation if they established goals that could never be achieved. In talking about European union, we are talking about concepts that have to be cast in the reality of national legislation and everyday life. The Single European Act started as a grandiose design and ended up as a workmanlike blueprint for a free market. Those treaties have followed the same course.

Our role has been to put forward practical suggestions—and sometimes to rein in the larger ambitions of our partners. Where we believed their ideas would not work, we have put forward our own alternatives. Those can be found throughout this treaty. As with all international negotiations, there has been give and take between all 12 member states. But the process was one in which Britain has played a leading role, and the result is one in which we can clearly see the imprint of our views.

This is a treaty which safeguards and advances our national interests. It advances the interests of Europe as a whole. It opens up new ways of co-operating in Europe. It clarifies and contains the powers of the Commission. It will allow the Community to develop in depth. It reaches out to other Europeans—the new democracies who want to share the benefits we already enjoy. It is a good agreement for Europe, and a good agreement for the United Kingdom. I commend it to the House.

Mr. Neil Kinnock (Islwyn)

May I first of all welcome aspects of the outcome of the Maastricht Council, including the strong statement against racism, the reaffirmation of policy on the middle east, the commitment to the enlargement of the Community, the statement on the republics of the Soviet Union, and, of course, the statement on Libya as a host Government for terrorism?

The statement that we have just heard is a statement from a double opt-out Government who have isolated Britain—[Interruption.]

Mr. Speaker


Mr. Kinnock

It is a statement from a double opt-out Government who have isolated Britain on the most vital issues of economic and monetary union and the social charter. It is impossible to regard the Government's actions as effective negotiation when they have simply opted out of the two basic economic and social issues and have left an empty chair in the European Community. That is abdication, not negotiation.

Is it not clear that the Government's self-imposed exile from the main stream of the Community will severely disadvantage the British people? Isolation means sacrificing essential influence over the process of European monetary union; it means shadowing the creation of others and ultimately accepting conditions determined by others; it means throwing away all chance of getting the European central bank to Britain. The agreement, which the Prime Minister has accepted, will exclude Britain from any say in the appointment of the president, vice-president and executive board of the ECB.

The way in which the Government have sidelined themselves on EMU means uncertainty for business and industry in their planning for the future. When a major purpose of investing is to take advantage of access to a single market with a growing monetary union, the opt-out country reduces its value as a place for investment. That is how the Government are putting Britain into the economic, financial, industrial and employment second division in Europe.

Will the Prime Minister confirm that the protocol on social policy which he agreed at Maastricht means that, when social policy and employment standards are discussed in the Community, the United Kingdom "shall not take part", shall not vote or have a voice?

How can the Prime Minister claim to be seeking the best deal for Britain when he is determined to get the worst conditions for British workers? By refusing to agree to the social chapter, is not he wanting to exclude British people from the provisions for equal status for 6 million part-time employees, many of whom are women; for fair and equal treatment for women at work; for proper protection for young people at work; for rights to minimum holiday leave; and for better information for employees? He claims that those decent basic provisions for individual employees, whether they are in or out of trade unions, would inhibit competitiveness. But how does he answer his fellow Conservatives like Herr Kohl, or Mr. Eyskens, of Belgium, who says: It is a fact that the most competitive countries in Europe are also the ones with the best social and employment provision"? When will the Government learn the lesson that civilised standards help efficiency and competitiveness, while exploitation and injustice harm them? When will they listen to the British people, the great majority of whom know that there should be improved and common employees' rights for all Community countries in the single market?

After the summit, we must ask how the Prime Minister can claim to be at the heart of Europe when, because of his actions, our country is not even part of the key decisions that will shape the Europe of the future. Our country's interests cannot be served by isolation or opt-out. They will be served by maximising influence, full involvement and insistence on the best standards. That is how a Labour Government will serve the British people.

The Prime Minister

I am grateful to the Leader of the Opposition for welcoming some aspects of our agreement. At the outset of his remarks, he referred to a double opt-out. I was surprised to hear him say that because he was clearly referring to economic and monetary union. As the shadow Chancellor said on 24 November: We should not commit ourselves now, in advance of 1997, to enter into a single currency. That is the point of agreement all sensible people will have". I agree, and that is what we have negotiated. I am sorry that some others have apparently taken leave of their senses.

As for the second alleged opt-out, the right hon. Gentleman confuses the distinction between the social dimension of the Community, to which Britain is fully committed—it has implemented all 19 of the directives thus passed—and the so-called social chapter, which deals with employment and labour laws where they are best determined in this country and in this House, and not imposed from outside.

The right hon. Gentleman referred to investment, but I fear that his judgment is not shared by others. He said that inward investment will not come to Britain. Perhaps he should have a word with the President of the Commission, Mr. Delors, who said yesterday: Britain will become a paradise for Japanese investment". The right hon. Gentleman wants to know what we shall not accept from Europe. We are not prepared to accept the imposition of other people's directions on many forms of flexible job opportunities now available in this country. We are not prepared to accept restrictions on the employer's right to recruit the best qualified person for the job. We are not prepared to accept new trade union powers to represent individual employees and bargain on their behalf. The right hon. Gentleman may be prepared to hand over the government of this country to trade unions abroad, but that is not the position of the Conservative party.

The right hon. Gentleman said that this country would not be part of the key decisions on economic and monetary union. He should read the treaty: we are part of all the decisions on economic and monetary union, with the additional point that, unlike our European Community partners, we have the choice, when the decision is made, whether to go into stage 3. It is a choice for the House whether we go in or stay out. That choice is best made in the light of the conditions that prevail at the time.

Several Hon. Members


Mr. Speaker

Order. I was pleased to hear the Prime Minister say that there is to be a debate next week. Perhaps it will help hon. Members to know that those who are called to put a question today may not stand quite such a good chance in next week's debate.

Mr. Paddy Ashdown (Yeovil)

Although the Prime Minister did not say it, the agreement that he signed yesterday in Maastricht is historic. It marks the point of irreversibility in the continuing process of the integration and unity of Europe. The pity of it is that the Prime Minister, who said that he wanted to be at the heart of the process, has instead condemned this country to be semi-detached from it. The Prime Minister has told us that it is a good agreement for Britain. He is wrong: it is a bad agreement for Britain.

Does not the Prime Minister realise that, after 40 years in which this country has been dogged by the uncertainty of its position in Europe, he had the opportunity to answer that question once and for all, and he ducked it? The rest of Europe said yes; the best that he could say for Britain was maybe. Does he not realise that his maybe will cost us? [Interruption.] Oh yes, it will. Does he not realise that uncertainty about Britain's future in Europe will mean higher interest rates when the pound comes under pressure? Whatever President Delors says, it will mean lower inward investment. It will mean that we cannot shape the institutions to which subsequently we shall have to submit.

That uncertainty will mean that the City of London will lose any aspirations that it has to accommodate the central European bank. Does not the right hon. Gentleman believe that that is too high a price to ask the people of Britain to pay in order that he may put the divisions of the Conservative party before this country's long-term prosperity?

The Prime Minister

The right hon. Gentleman is mistaken in much of what he says. British industry and the City have welcomed the agreement reached yesterday, which is a step towards European co-operation. Most importantly, it opens up new ways of co-operation with our European partners, not just the way of straight-through Community competence and the European court of Justice.

In no sense is the United Kingdom semi-detached from the decisions that will be made in Europe. It will be part of all the decisions made in Europe. That was an odd comment to come from the right hon. Gentleman who, judged from his comments in recent days, would not have accepted the social charter. Like us, he would have opted out. I welcome the support of the right hon. and learned Member for Monklands, East (Mr. Smith) on that issue. No doubt the right hon. Member for Yeovil, (Mr. Ashdown) would have regarded himself as semi-detached. We have a part in shaping all the decisions of Europe. That is clearly understood by our partners and has been agreed in the treaty. I am sorry that the right hon. Member for Yeovil did not have the grace to accept that.

Mr. David Howell (Guildford)

My right hon. Friend has shown the utmost skill and stamina over the past two days in keeping us away from the dangerous path towards the centralised Europe that none of us who are good Europeans want to see. Does he agree that the time has come to put forward with ever greater clarity the kind of Europe which we want and which he has already outlined in his comments? Does he further agree that that needs to be a Europe which is not only open and ready to trade fully with the rest of the world, but also ready to grapple with the greatest danger facing European stability, a danger which was scarcely mentioned at Maastricht, and which must be faced by ensuring that the nations of eastern Europe make it all the way to open democracies and that the vast and scattered nuclear arsenal of the former Soviet Union is brought under proper control and we prevent a great proliferation of nuclear weapons in the successor states?

The Prime Minister

I agree with my right hon. Friend. We discussed collectively, and I discussed bilaterally with President Mitterrand, the specific points that my right hon. Friend mentions and, in particular, the potential dangers of nuclear proliferation within the republics of the Soviet Union. It is precisely because of our wish to create the sort of free market and wide community that we have in mind that we have included, at our insistence and with the agreement of other colleagues, a declaration in the presidency conclusions about the future enlargement of the Community. We propose to carry that principle forward, both in communal discussions next year and as a key part of the British presidency in the second half of 1992.

Mr. John D. Taylor (Strangford)

Since yesterday's decisions are clearly further progress towards European union, can the Prime Minister say whether the United Kingdom has moved any closer to the acceptance of a single European currency? Will yesterday's decisions mean any increase in the United Kingdom's contribution to the European Community budget? Was there any discussion on further Community support for the regions such as Portugal, Greece and Northern Ireland?

The Prime Minister

We are a full part of the process towards economic and monetary union and a single currency. As I said both in my statement and in an earlier answer, we have the option to decide at a later stage, when others enter stage 3, whether that is the right thing for this country to do. It is a choice that is fully there for us to make at the same time and in the same fashion as other countries, except that we have the additional option of deciding that it would not be right for this country.

The right hon. Gentleman asked about the regions of the Community. A cohesion fund was agreed that would turn out to be a subset of structural funds with the intention of ensuring that money which is diverted within the Community for the right purposes goes to the areas that most need it.

Mr. John Biffen (Shropshire, North)

I join the many others who will welcome the prominence that my right hon. Friend gives to the enlargement of the Community, especially in the context of central and eastern Europe. When the issue of the single currency was being discussed at Maastricht, did its promoters suggest that this would make more easy that enlargement, and how did my right hon. Friend respond?

The Prime Minister

It is a matter that has been discussed among the Finance Ministers on many occasions. I do not think that there is an expectation among people that it will make it easier, and that is one of the arguments that we have frequently advanced against it. One of the difficulties of proceeding with the single currency, particularly if a small number of member states within the Community were to proceed on their own, is that it would become increasingly difficult for others to join them at a later stage. It is for that reason that, if and when the decision is made to move forward, it would be desirable for as many members of the Community as possible to move collectively.

Mr. Peter Shore (Bethnal Green and Stepney)

For those who do not want a federal future for this country there are many reasons for concern in the Prime Minister's statement on the treaty of union. If the treaty bears the imprint of our views, how can the Prime Minister explain the acceptance of article 104B, under which present and future Governments of this country would be limited by European authority to a borrowing requirement of no more than 3 per cent. of GDP? Is this not an intolerable interference with the freedom of action of any British Government, and is the Prime Minister aware that, in 12 of the past 18 years, successive Governments, Labour and Conservative, have spent more than 3 per cent. of GDP on their borrowing requirements?

The Prime Minister

The right hon. Gentleman might have been better advised to raise that matter at a meeting of the parliamentary Labour party than inviting me to answer it. I have two points to make in reply to him. First, as a result of the negotiations by my right hon. Friend the Chancellor, there is considerably more flexibility now than there was with the 3 per cent. figure that the right hon. Gentleman mentioned. Secondly, the 3 per cent. does not apply in stage 2 and, even with that greater flexibility, would apply only to those countries that decided to enter stage 3. That will be a factor that the House will be able to have in its mind when it decides on whether to enter stage 3.

Sir Norman Fowler (Sutton Coldfield)

Is my right hon. Friend aware that, entirely contrary to what the Leader of the Opposition has just said, the settlement that he has won will be welcomed by the overwhelming majority of people in this country? Is it not clear that the so-called social measures that he rejected would have led to unemployment and the loss of jobs? Are those not exactly the issues that should be settled in this country and not in Brussels?

The Prime Minister

I am grateful to my right hon. Friend for his remarks, with which I entirely agree. It was precisely because the measures in the social chapter would have damaged first employment prospects and secondly our competitiveness against Japan and the United States that I found them unacceptable. A further reason is that measures of this sort are best decided in the House, in accordance with the traditions of this country, and not abroad by trade unions and others.

Sir Patrick Duffy (Sheffield, Attercliffe)

Does the Prime Minister recall my earlier concern that the parameters that he was instrumental in drawing up at the Rome summit, to separate an incipient European Community defence policy from NATO's responsibilities for the defence of Europe, should be preserved? Will he now reassure the House that they have not been breached by article B of the agreement in what The Guardian this morning called a defence compromise? It commits the Community to the "eventual framing" of a defence policy. Do not those words portend an eventual challenge by the Franco-German axis to the primacy of NATO?

The Prime Minister

Of course it was challenged in the discussions, but the outcome is that set out in the Anglo-Italian paper. It is a good outcome for NATO and the United Kingdom. It is the right framework for the European Community in the 1990s. It means that there will be a stronger European contribution to common defence, and that is right. That will be organised through the Western European Union and it will not be subordinated to the European Community.

Mr. Cranley Onslow (Woking)

I add my congratulations to my right hon. Friend and his team on what will rightly be seen in the country as an excellent result for Britain and Europe, especially on enlargement. As it is now all the more important that Europe should prove that it can walk before it tries to run, may we look forward to a rigid application by our European partners of all those directives that they have so far chosen to ignore?

The Prime Minister

Yes, we can look forward to that application, for under the provisions agreed in the treaty, if we and our European partners fail to implement directives that we sign up to, we shall be subjected to substantial fines by the European Court of Justice.

Mr. Jim Sillars (Glasgow, Govan)

Is the Prime Minister aware that his claim to have reined in the ambitions of our partners is a vain boast that bears no relation to reality, and that going into Maastricht we had a Community of 12 and coming out we had a Community of 11 and a half? The 11 are ambitious, able and united and, judging by history, are likely to be successful, and the half is a self-disabled United Kingdom. Is he aware that what he achieved, or failed to achieve, might please the little Englanders behind him but will be a tragedy for the people of the United Kingdom and the Scottish part of it through the 1990s?

The Prime Minister

An odd comment from a home ruler for Scotland, I must say. The agreement is good for the United Kingdom and good for Europe. It is an agreement to which our European partners were happy to sign up, and they have gone back to their own countries to celebrate. They do not share the views that the hon. Gentleman has just expressed.

Rev. Ian Paisley (Antrim, North)

Will the Prime Minister take it from me that all right-thinking people would like to congratulate him on escaping unbruised from the street fighting at Maastricht, where he met the heavies of Germany and France? Was the vexed question of extradition discussed at the Council? Is the United Kingdom financially committed to the policies of cohesion and convergence?

The Prime Minister

The question of extradition is one of the matters that would fall under the interior and justice pillar to be decided on an intergovernmental basis. It is likely that under those agreements extradition within Europe would in future be easier than it has been in the past, which I think the hon. Gentleman would welcome.

Mr. Tony Benn (Chesterfield)

Is the Prime Minister aware, first, that people will want to study in detail what he has brought back and will need far more time to do that, and, secondly, that a treaty committing us to a European union probably represents an even bigger change than our entry into the Community in 1975, the long-term effect of which over many Parliaments will be great? In those circumstances, does he really think that a dying Parliament, a week after the Maastricht summit, should empower a lame-duck Prime Minister to use the royal prerogative to sign that treaty without any consultation with the British people whose rights will be affected far more than this Parliament? Does he not think that, with a general election coming, if he is confident in his position, the least that he could do would be to put that forward in a general election so that at least people will have an opportunity to give a view before they are committed by the right hon. Gentleman's signature of a treaty of this magnitude?

The Prime Minister

But that is the case. Legislation will need to be drafted and taken through the House in order to ratify the agreements that have been provisionally reached at Maastricht. That legislation cannot be carried through in the remainder of this Parliament and will be a matter for the next Parliament. With regard to the right hon. Gentleman's earlier remarks about opting in, I suggest that he discusses that matter with his right hon. Friends who would have signed the treaty in full without waiting to see what the economic conditions were at a later stage. Does that not give an absolute lie to the belief that the Opposition are united on Europe?

Mr. Julian Amery (Brighton, Pavilion)

Is my right hon. Friend aware that the agreement that he has secured will be widely welcomed in northern and eastern Europe, particularly as they are the new frontier of Europe and of all of us? In particular, I congratulate my right hon. Friend on having laid the foundations—not more than that yet—of a European defence and foreign policy as pillars of the European house distinct from the collective will of the European Commission.

The Prime Minister

My right hon. Friend has it exactly and precisely right in terms of laying the foundation for European action on foreign affairs and defence, and that is the right direction in which Britain should go. I welcome very much the options that are now open for both the EFTA states, and, in due course, when their economies are ready, the eastern European states, to join the EC. Perhaps not in the political lifetime of most hon. Members but at some future stage, we may see a Community that stretches from one end of Europe to the other, for which I for one will wish to work.

Mr. Giles Radice (Durham, North)

The Prime Minister has said that the Maastricht settlement is game, set and match to Britain. Quite apart from the inappropriate Chamberlainesque triumphalism, how can it be game, set and match to Britain if the Government have decided to opt out of future social developments and remain undecided about a single European currency?

The Prime Minister

I set out the Government's objectives in a speech in this House before I went to Maastricht. We met all those objectives.

Mr. Nicholas Budgen (Wolverhampton, South-West)

Does my right hon. Friend agree that the lesson that we learned from the Single European Act was that, whenever there is an extension of Community competence, the institutions of the European Community seek to extend that competence? Does he also agree that, where he has extended the competence of the institutions of the European Community, we shall increasingly see, as we have seen in relation to Sunday trading and British Aerospace, the emergence of two forms of law—first, British law, which we encourage the population to obey and honour, and, secondly, European law, which we try to avoid—and thus we shall succeed in undermining the rule of law here?

The Prime Minister

There have been twin forms of law since this House took the decision to enter the Community 20 years ago. I know that that is not entirely agreeable to some of my hon. Friends and to some Opposition Members, but that is the fact of life—and has been for many years. What we sought to do, in terms of Community competence, in the discussions was to extend it in areas where we thought it was appropriate and to define it more adequately than it has been defined in the past in order to prevent, as far as it is possible to prevent it, that element of creeping competence that so offends many people in this country.

Dr. Dafydd Elis Thomas (Meirionnydd Nant Conwy)

Does the Prime Minister accept that we are pleased that the United Kingdom is signatory to a treaty that commits it to an ever closer union among European peoples, where decisions are to be taken as close to the citizens as possible? When does the Prime Minister intend to implement that part of the treaty in respect of Wales and Scotland?

The Prime Minister

I am grateful to the hon. Gentleman for his earlier remarks. The subsidiarity agreement was particularly an aim of both the United Kingdom and Germany. The intention is to ensure that decisions are taken at national level whenever that is the most appropriate way to deal with the decisions. That is what we have achieved.

Mr. James Kilfedder (North Down)

From a different political viewpoint, may I congratulate the Prime Minister on his ability and the authority that he demonstrated during the negotiations that secured this agreement, which, despite all the odds, will be beneficial to the United Kingdom. I am sure that it will be beneficial to Northern Ireland, in view of the number of unemployed people in the Province and the need for Northern Ireland to become more closely involved in Europe.

Is the Prime Minister satisfied that sufficient steps have been taken to deal with terrorism?

The Prime Minister

I am grateful for the hon. Gentleman's remarks about the overall agreement that we have reached. I share his view that it is a good agreement for this country and a good agreement for Northern Ireland. The decisions that we have made on the interior and justice portfolio—to deal with terrorism more closely in an intergovernmental agreement—open up the possibility of much greater co-operation against terrorism. We are studying specific plans, under the Europol heading, that will be geared specifically against terrorism, mafia activities and drug dealers. It will provide for far more cross-European co-operation against crime than we have ever known.

Mr. Jack Ashley (Stoke-on-Trent, South)

The Government are great disciplinarians. Can the Prime Minister explain why participation in the exchange rate mechanism is a beneficial discipline for British industry, whereas participation in the social chapter is a damaging discipline? Is not the real answer that the Conservative party has very little time and even less concern for British workers?

The Prime Minister

The right hon. Gentleman is inaccurate, and I believe that he is fair-minded enough to know it. The exchange rate mechanism is a discipline to reduce inflation. As for the provisions in the social chapter, that would be a discipline that would reduce jobs.

Mr. Terence L. Higgins (Worthing)

I congratulate my right hon. Friend on the skill with which he conducted the negotiations. Is he aware that the setting of arbitrary deadlines for a move to a single currency is really gesture politics, and that he is right to dissociate Britain from it? I am delighted to see that he has also dissociated us from the objectionable features of article 104B regarding fiscal deficits. Will he not rest on his laurels? Should he not turn his attention vigorously to sorting out the common agricultural policy, which is endangering the Uruguay round and remains a serious blot which is totally inconsistent with the sort of policies that are embodied in the new treaty?

The Prime Minister

My right hon. Friend's third point is right. In recent weeks, I have had several opportunities to discuss that matter with the presidency of the Commission and with the Commissioners who negotiate on behalf of the European Community. There is no doubt that the European Community needs to make amendments to its common agricultural policy and to its agricultural policies to ensure that an agreement on the general agreement on tariffs and trade can be reached. Agreement on GATT is as important to this country as anything else at the moment, and the Community will have to make amendments to its policy to play its part in reaching that agreement.

I referred earlier to article 104B, and I have nothing further to add.

My right hon. Friend is correct about the deadlines. The deadlines refer to the time at which the convergence conditions will be examined. The dates for moving forward must be subordinate to the convergence conditions. Without the convergence conditions, it would be improper and absurd to contemplate moving forward.

Mr. Nigel Spearing (Newham, South)

Will the Prime Minister confirm that there is a protocol in the Maastricht agreement calling for greater involvement of national Parliaments and Assemblies in the work of the Community? I thank the right hon. Gentleman for his kind remarks about the work of the Select Committee on European legislation made during the debate on 21 November. Is he aware that that Committee is charged with the responsibility of assessing the legal and political impact of EEC proposals on the United Kingdom and for its reports, together with the proposals, to be debated here before decisions are made by the Ministers concerned? Therefore, is not it inappropriate for the Government to place before the House a motion endorsing the Maastricht deal before comparable examination of the draft treaty has taken place? Is not that against the resolution of the House and its spirit, and is it not a reduction, not an increase, in the involvement of this national Parliament?

The Prime Minister

I can confirm the hon. Gentleman's remarks about the protocol. We shall be placing a motion before the House inviting it to endorse the agreement. However, as I told the right hon. Member for Chesterfield (Mr. Benn), there will be an opportunity in due course for the legislation that enacts the agreement to be considered in detail by the House. So there will be ample opportunity for every hon. Member to consider in detail what the agreements into which we have entered would commit the country to.

Sir Michael Marshall (Arundel)

Will my right hon. Friend accept that there will be a warm welcome for his commitment to a widening process on his own behalf and that of Her Majesty's Government? Recognising the difficulty that arises in the countries of central and eastern Europe, can he commit himself to the urgent introduction of EFTA applications, recognising the special bridges that they have with those countries and the Baltic states?

The Prime Minister

I can say that to my hon. Friend. I anticipate that at least two of the EFTA countries will place their applications before the Community shortly and that it will be possible to begin examining them in early 1993.

Mr. Terry Davis (Birmingham, Hodge Hill)

Is not the Prime Minister saying that he has used all the influence that he can muster to ensure that working people in Britain have fewer rights and less protection against bad employers than the rest of Europe?

The Prime Minister

No, Sir. I have used all the influence that I can muster to ensure that working people do not lose their jobs as a result of a lack of competitiveness and costs on employers that could not be met without shedding labour. I note that the hon. Gentleman wishes to introduce measures that would cost jobs in Britain. We have noticed that in other Opposition policies in the past.

Sir Jim Spicer (Dorset, West)

Will my right hon. Friend accept that the outcome of Maastricht, both for the people of this country and for the Community, is a treaty based on common sense and realism? Will he accept the gratitude of every Conservative Member and of the people of this country, because the treaty bears the imprint not only of my right hon. Friend but of the Foreign Secretary and of the Treasury? We are grateful to them.

My right hon. Friend spoke at length about EFTA applications. He will not forget, particularly when we have the presidency next year, that Malta has applied for membership of the Community and that we owe a great debt of gratitude to the Maltese people.

The Prime Minister

I am grateful to my hon. Friend for his remarks. As I said earlier, during our presidency we shall be looking particularly at the prospects for enlargement of the Community.

Mr. James Lamond (Oldham, Central and Royton)

But is not the Prime Minister's decision to opt out of the social charter—[Interruption.]—"opt out" were the words that he used—an admission that, after 12 years of Tory rule, the economy is not as sound, robust and healthy as the Government try to claim but is so fragile that it cannot support the most basic workers' rights that will be enjoyed in the rest of Europe?

The Prime Minister

The hon. Gentleman is wrong in everything he says. What I find so extraordinary is that Opposition Members are so keen to place with trade unions abroad so much of the authority on labour law matters that resides in this House. Just as they are subordinate to trade unions at home, so they yearn to be subordinate to trade unions abroad.

Sir Trevor Skeet (Bedfordshire, North)

I congratulate my right hon. Friend the Prime Minister on his courageous stand against the 11 who opposed him, but may I ask him a simple question? Compared with the European Communities Act 1972, what additional authority has now been conceded to Brussels from the United Kingdom Parliament?

The Prime Minister

Since the 1972 Act, there have been many additional authorities to Brussels through European Court judgments, individual directives and the implications and effects of the Single European Act, quite apart from the effect of the treaties which we have agreed in the past two days but which have yet to be ratified by Parliament. The detailed information that my hon. Friend requires can be found in documentation that has been placed in the Library.

Mr. Joseph Ashton (Bassetlaw)

If legislation is needed to get the treaty through Parliament, if it is so popular with the country, and if it will be such a wonderful thing for unemployed people, for women, for the regions and for business, why does not the Prime Minister dissolve Parliament next week and have a general election in January?

The Prime Minister

The hon. Gentleman will get his election in due course.

Mr. Nigel Forman (Carshalton and Wallington)

Is it not clear that one of my right hon. Friend's most important achievements at Maastricht was to get a clear definition of subsidiarity written into the treaty as a bulwark against creeping competence by the Commission and other Community institutions? Will he confirm that, once that definition is lawful, it will be possible to ensure that the Community will be able to act on appropriate areas such as trans-border environmental pollution, but on areas where there is no need or justification for action, such as national and fiscal policies, the House will retain its rights?

The Prime Minister

I am grateful to my hon. Friend. The provisions that he refers to are in the agreement that we have signed, which provides greater safeguards than before to ensure that the Community deals with those matters that are most appropriately dealt with by the Community and that other matters are left to national Parliaments.

Mrs. Alice Mahon (Halifax)

Will the Prime Minister confirm that the Secretary of State for Employment will no longer be able to participate in the Social Affairs Council—I am sure that many of our partners will not miss him—and, if that is so, will he consider demoting him and reducing his salary?

The Prime Minister

The hon. Lady is mistaken. The social dimension of the Community has been there for a long time. As I said in answer to an earlier question, over recent years we have agreed 19 directives on the social dimension—more than anyone else in the Community—and we have implemented them. All of them have been agreed and discussed with my right hon. and learned Friend the Secretary of State for Employment and his predecessor.

Dame Elaine Kellet-Bowman (Lancaster)

My right hon. Friend said that Labour would have signed in full. They would indeed. Yesterday, the shadow Chancellor said on the early morning news that Britain should fall into line with its partners—in other words, that we should give in to them without bothering to do anything to secure the best deal for this country. Is my right hon. Friend aware that my constituents, whether farmers, industrialists or citizens, who obey the law will be delighted that those who do not do so will in future be fined for that failure?

The Prime Minister

My hon. Friend is right. The Opposition's position is even more incredible than she sets out. The Leader of the Opposition previously expressed three conditions for joining a single currency. None of them has been met, yet today he says that he would have signed up to a single currency without any opt-out clause.

Mr. Bruce Grocott (The Wrekin)

Did the Prime Minister feel no sense of humiliation at having to meet the other 11 Heads of Government and having to explain to them in the most public way why the British economy was so uniquely vulnerable and fragile that we alone were unable to provide the basic minimum provisions of the social charter? If he thinks that he can come back to the House, whatever the supine press may say, and present it as a triumph for Britain that he has managed to prevent those provisions from being applied in this country, although they are being applied everywhere else, he shows that the Government are not only economically bankrupt but bankrupt of values.

The Prime Minister

The hon. Gentleman is an ungracious loser. This country has done very well in the negotiations and we have got an agreement that is right for this country. The reason for not accepting what people call the social chapter, which is in reality the imposition of labour laws that would damage our competitiveness, is that we intend to keep our competitiveness and we are not prepared to lose our competitiveness against Japan and the United States, even though that is the express policy of the Labour party.

Mr. Ivan Lawrence (Burton)

Will my right hon. Friend confirm that we in Britain will retain complete freedom to run our own monetary and economic policy, that we have transferred no significant powers from Westminster to the European Parliament, and that, in securing the deletion of the word "federal", he has secured the deletion of the whole federal agenda? Is my right hon. Friend aware that, in securing all his aims at Maastricht, he will have the gratitude and admiration of the entire nation?

The Prime Minister

I am most grateful to my hon. and learned Friend. He is clear about our management of our own economy in the future in the way in which he sets it out. If at some stage we entered into a single currency, we should have to deal with a different matter. That is a matter for the House to decide at a later stage. The words "federal vocation" were unacceptable to the majority of hon. Members. They have been removed from the chapeau and replaced by the words that were in the original treaty of Rome— an ever closer union among the peoples of Europe".

Mr. D. N. Campbell-Savours (Workington)

Why is it that German competitiveness can stand the social chapter and British competitiveness cannot? What is the distinction?

The Prime Minister

The Germans have had a different structure of labour laws for many years.

Mr. Anthony Nelson (Chichester)

May I join in congratulating my right hon. Friend on negotiating an agreement that meets all our aspirations and protects our national interest? As the way is now open, with the agreement of the House, for us to join a single currency in just over five years, will my right hon. Friend spell out clearly to the House and to the people of this country what benefits will or may derive to them from a single currency?

The Prime Minister

If the House were to decide at a later stage to enter a single currency, it would be, first, because it had decided that the economic convergence conditions in Europe were right for a single currency to be beneficial to this country. A primary benefit that, if successful, a single currency would be likely to deliver for Europe would be low inflation across the whole of Europe. That would be a significant benefit for all the peoples of Europe.

Economic conditions in Europe at the time when the decision is taken will be crucial in determining whether that will be achievable. Because no one can know at this stage what those conditions might be, it would be unwise for anyone now to decide irrevocably to take that decision at a future date.

Mr. Doug Hoyle (Warrington, North)

May I remind the Prime Minister that the predecessors of his Back-Bench colleagues waved their Order Papers for a Prime Minister who promised "peace in our time", just as he has promised "no single currency in our time". Wrath turned on that Prime Minister when it was realised that he was not right, just as it will turn on the present Prime Minister. As one who has never thought that we have got much benefit from the European Community, I say that the right hon. Gentleman is following the path of his predecessor, which is, "Negotiate nothing but accept everything."

May I add——

Mr. Speaker

Order. That is enough. The hon. Gentleman should ask only one question.

The Prime Minister

I notice that another strongly anti-European Labour Back-Bench Member is giving the lie yet again to the newly found Europeanism of the Labour Front Bench. The hon. Gentleman has it precisely wrong on European policy. The Labour party's policy is, "If it has a European label on it, buy it, even if it is worthless; but if it is the British national interest, sell it, even if it is valuable."

Several Hon. Members


Mr. Speaker

Order. I have to protect the business of the House. We have two other important debates today. I shall allow questions to continue until 4.45. Then we shall move on. May we have brief questions, please?

Mr. Ian Taylor (Esher)

Will my right hon. Friend note that, in comparison with the Labour party, which has changed its mind many times, the Conservative party has been consistent since the 1960s—a policy that has led to greater union among the peoples of Europe? My right hon. Friend is to be congratulated on showing that that can happen, and that a further step can be taken towards "ever closer union" on an intergovernmental basis, and not just on the basis of the treaty of Rome.

Will my right hon. Friend also confirm——

Mr. Speaker


The Prime Minister

Labour Members have changed their minds and their policies on Europe at least seven times, but in that they still lag behind the changes of mind of their leader.

Mr. George Galloway (Glasgow, Hillhead)

Does the Prime Minister accept that for many people of my age and younger in this country the British leaders' performance at Maastricht was rather embarrassing? Pasty-faced Englishmen waving their union jacks and shouting boo at Johnnie Foreigner are never an edifying sight—whether on the football terraces or in intergovernmental relations.

Is it not time that the older Members of the House realised that the empire has gone, that the idea of Britain as east America—Athens to America's Rome—is a phantom of their imagination, and that our future lies in Europe? It lies at the heart of Europe, which means that we must be not in a minority of one but right there where the decisions are made.

The Prime Minister

That is precisely where we have been, which is why so many of the decisions reached in the past two days have been on British initiatives that have been accepted across the whole of Europe. The hon. Gentleman is not a very convincing advocate of the policies of youth.

Mr. Nicholas Winterton (Macclesfield)

Although I remain strongly opposed to any closer political or economic union with Europe, will my right hon. Friend accept that the leadership that he has shown at the Maastricht conference and his toughness in the negotiations clearly display that he is the only party leader competent to govern this country during the next few years?

The Prime Minister

I am happy to agree with my hon. Friend. I am grateful for his remarks.

Mr. David Alton (Liverpool, Mossley Hill)

Instead of erroneously portraying the social charter as a formula for increased unemployment and as a dangerous capitulation to the trade unions, should we not realise that a policy of co-determination that gives employees a say and a stake in the running of their firms is the very reason why the economies of so many western European countries have been so successful? Even though the Prime Minister has not incorporated the provision into the agreement at Maastricht, does he not agree that it is high time that we in this country also took those steps for ourselves?

The Prime Minister

I have great sympathy with the premise on which the hon. Gentleman bases his question, but such matters are best determined by individual employers and their work forces and not by the imposition of general blanket rules that may not be appropriate to individual countries or companies.

Sir Anthony Durant (Reading, West)

May I congratulate my right hon. Friend on what he has done at Maastricht in limiting the powers of the Commission, about which my constituents have been concerned for a long time?

The Prime Minister

I am grateful to my hon. Friend. I think that that view was held widely across Europe, and I was delighted that our European partners were content with the proposals that we advanced.

Mr. Dennis Canavan (Falkirk, West)

Did I hear the Prime Minister correctly? Did he refer to the high standards of social protection in this country? What, if anything, will the Maastricht agreement do to eradicate the real inequalities throughout Europe, which mean, for example, that pensioners in this country receive about 43 per cent. of average net earnings compared with the European Community average of 73 per cent.?

The Prime Minister

The hon. Gentleman did indeed hear me correctly. He may recall that it was his party and not mine that cut health and welfare expenditure in the 1970s. On the pensions point, he does not compare like with like. He is comparing the state pension in this country with the cumulative state and private pensions abroad.

Mr. Jonathan Sayeed (Bristol, East)

It has been estimated that signing up to the social charter would have cost Britain a minimum of £5,000 million a year, decreased competitiveness and increased unemployment. Is my right hon. Friend aware of any Opposition party—it is the Opposition parties that are so keen for the social charter—ever having contested those figures, and, if not, why are they so keen to go into something that would disadvantage Britain? Or are they just keen for a pat on the back from M. Delors?

The Prime Minister

My hon. Friend is quite right about the costs. He will, of course, know that the Leader of the Opposition has said in the past that Sweden is certainly a model for us". If the right hon. Gentleman does not accept what I say about industrial matters, he will perhaps listen to the head of the Swedish employers federation, who said that the Community should learn from Sweden: It could above all avoid mistakes when it comes to regulations based on the social charter. The ideas behind the proposal for the working time directive have been proved wrong in Sweden.

Mr. Austin Mitchell (Great Grimsby)

Has not the Prime Minister managed to get the worst of all worlds by vetoing what he should have accepted—the social upgrading that we all want—and by half accepting what he should have vetoed—economic and monetary union, which will be deeply damaging and which will lock both this country and Europe into a decade of deflation? Has he not ignored the main problem of Europe, which is to get a realignment of currencies so that the deutschmark goes up and sterling down and we can get out of the present debilitating recession?

The Prime Minister

We have heard yet another consistently anti-European Labour Member. The hon. Gentleman has been consistent in his opposition to the Community and, if he stands his ground—as I have no doubt he will—in due course those on his Front Bench will agree with him once again.

Mr. Anthony Steen (South Hams)

May I congratulate the Prime Minister both on his performance at Maastricht and on his performance here today? Does he agree, however, that what we need to pursue now is cross-nation inspection of the implementation of rules and regulations emanating from Brussels to ensure enforcement in other nations and not just in Britain? Will he ensure that the Italians and French do not get away with a failure to put into practice the rules and regulations that this country puts into practice immediately?

The Prime Minister

My hon. Friend touches on a serious problem. A certain amount of cross-border examination to ensure that European Community rules are met already exists and, as my hon. Friend knows from what I said earlier, in future we shall have much tighter enforcement rules to ensure that those countries—all of them—that sign up to European directives will have to obey those directives or face fines for not doing so. I think that that will ensure two things: first, greater equality of action across the Community; and, secondly, to a greater degree than ever before that every nation that signs up to a directive considers in detail the implications and costs of that directive before it becomes law.

Mr. John Evans (St. Helens, North)

The Prime Minister alleges that the social charter will cost jobs, but will he confirm that nearly three quarters of a million British citizens have lost their jobs since he became Prime Minister? Is he aware that the best of British companies, such as ICI and Pilkingtons, which already provide their employees with far better conditions than anything that is in the social charter, are increasingly concerned about unfair competition from their sweatshop competitors? Is not his rejection of the social charter a kick in the teeth to the best employers and a massive boost to sweatshop, anti-union employers in Britain?

The Prime Minister

The hon. Gentleman has been more than usually maladroit in his choice of example. He referred to ICI, whose chairman, Sir Denys Henderson, has this morning warmly welcomed the agreement that I reached.

Mr. Anthony Beaumont-Dark (Birmingham, Selly Oak)

Does my right hon. Friend accept that the one existing example of convergence in Europe is the convergence of west Germany and east Germany, which has resulted in the highest inflation and interest rates that Germany has ever had, and which is costing Britain at least 1.5 per cent. more in terms of our interest rate than would have been the case had the two countries remained separate? What guarantee do we have that, when we have to converge with, for example, the Greeks, Portuguese and Italians, the money transferred from our pockets to theirs will not merely impoverish us and give money to those who have not earned it while we have to work harder for less and pay higher interest rates?

The Prime Minister

It is, of course, largely for that economic reason that convergence of the economies before a single currency becomes operative is absolutely essential. If there were a single currency without convergence, it would have several serious effects on the smaller countries. There would certainly be a collapse of asset values and large regional unemployment and, as a result of those two factors, there would undoubtedly be a demand for very large transfers of resources from northern states to southern states. All that argues strongly for proper convergence conditions.

My hon. Friend referred to the merging of the economies of west Germany and the former German Democratic Republic—the merging of one large economy with one small economy. The merging of 12 mature economies is a much bigger undertaking than that. That is why it is essential, as a preliminary to any future action that the House has to consider, that there is a proper convergence of the economies.