Speeches, etc.

Margaret Thatcher

HC S [European Community]

Document type: Speeches, interviews, etc.
Venue: House of Commons
Source: Hansard HC [193/1026-31]
Editorial comments: 1738-1800.
Importance ranking: Major
Word count: 2957
Themes: Agriculture, Parliament, Defence (general), Monetary policy, Trade, European Union (general), European Union Budget, Economic, monetary & political union, European Union Single Market, Foreign policy (Americas excluding USA), Foreign policy (Central & Eastern Europe), Foreign policy (USSR & successor states), Foreign policy (Western Europe - non-EU), Labour Party & socialism, Race, immigration, nationality
[column 1026]

5.38 p.m.

Mrs. Margaret Thatcher (Finchley)

The right hon. Member for Manchester, Gorton (Mr. Kaufman) started his speech by making it clear that his party would vote against the Government tonight. He gave no justification for that course of action. He and his hon. Friends know full well that the hand of my right hon. Friend John Majorthe Prime Minister would be greatly strengthened in Luxembourg if he had a really good vote behind him when he goes there on Friday. I hope that many people—[Interruption.] Not only did the right hon. Member for Gorton give no justification for that course of action: he gave virtually no positive proposals whatsoever. At one time, he seemed to advocate a policy of perpetual disagreement in the Community; then, having complained about unemployment, he launched into an attack against Japanese investment in this country. Many people in this country are very grateful for Japanese investment.

May I thank my right hon. Friend Douglas Hurdthe Foreign Secretary for his clear exposition and for the way in which he puts things? I noted that, at Luxembourg, we shall not reach conclusions, but he will, I think, be the first to agree that we can influence the way in which things go at Maastricht by the arguments and proposals that we make. My right hon. Friend made it very clear that one of the difficulties of discussing the matter of the Community is that it is riddled with jargon and Eurospeak, and that words are used which do not have a precise meaning, such as the word “subsidiarity” . It is a vague term which raises far more questions than it answers. When we use those terms, we should be careful to define them.

I do not wish to speak for very long, Mr. Speaker, so may I therefore set the background, as I see it, to my [column 1027]remarks and then raise five points that I hope my right hon. Friends will consider in their deliberations in Luxembourg?

The issues that we are debating today are fundamental to the future role of this Parliament, and deserve to be treated seriously. They are fundamental to the kind of Europe in which our children will live and they are fundamental to our future relationship with the wider world, especially the eastern European states and the United States of America. The fact itself that we are debating these issues reminds us of the cardinal principle of our system of government—that Ministers are directly answerable to Parliament and that the buck stops here.

My right hon. Friend John Majorthe Prime Minister has previously spoken eloquently of his wish to see Britain at the heart of Europe. He is right, and we have been. That is how we secured reform of the Community's finances. That is how we won reform of the common agricultural policy, although there is more to do, and that is how we started the creation of the single market. None of those things could have been achieved from the sidelines. We had to be in the midst of battle, and we were. We won many battles, and as we finished the battles, the position was far, far better for Britain than it was when we started. It is by staying in the centre that we can press the case for free trade through the general agreement on tariffs and trade and for reaching agreements with the countries of eastern Europe. My right hon. Friends have pursued those matters with vigour, and they are right to do so.

The summary of the documents for the forthcoming Luxembourg Council—I have not seen the full documents, because they came too late, and I share the views of those who protested that they were not available—reveals a quite different destiny for Europe from any that we were ever given to expect when we went in. They are proposals for a federal union. They call for a common foreign, security and, in due course, defence policy, in which majority voting would apply. They call for a great extension of Community powers and competence in energy, in health and over labour laws—again, often with majority voting.

We had some experience of the extension of majority voting in the Single European Act. I suggest that we are very careful before we consider extending majority voting any further. The fact is that majority voting means that we give the Community the right to impose on the British people laws with which the House—the elected representatives—may fundamentally disagree. That is a very, very serious step to take. The document also calls for a central bank to set monetary policy, leading to a single European currency. The Times has referred to all this as “supranationalism run riot” . My right hon. Friend John Majorthe Prime Minister declared in the House on 18 June:

“A European super-state would not be acceptable to me or to the House—and in my judgment it would not be acceptable to the country” .—[Official Report, 18 June 1991; Vol. 193, c. 142.]

I wholeheartedly agree with both The Times and my right hon. Friend.

Few of us will forget what Mr. Delors told Members of the European Parliament in 1988. He said:

“In 10 years time, 80 per cent. of economic legislation and perhaps even fiscal and social legislation will be of Community origin.”

That is the road that he wants us to take, and it is the road that we must resist. [column 1028]

I understand that my right hon. Friends cannot reveal their full negotiating hand, but I hope that, in their negotiations in Luxembourg, they will keep in mind the following five points. First, the present debate in Europe touches issues more profound than any since the Community's foundation. It is of an entirely different order of magnitude and importance from the debate on the Single European Act. That made some important changes in the concept of majority voting to make it more difficult for countries that do not believe in free trade to block the completion of the Common Market. It repeated earlier commitments to economic and monetary union, while attempting to define it as only economic and monetary co-operation. What is now being considered is a massive extension of the Community's powers and competence into almost every area of our national life and that of other member states. It would be the greatest abdication of national and parliamentary sovereignty in our history.

Some people argue that the changes envisaged in the draft treaties on the table in Luxembourg would not happen for many years, so there is no need to worry. That is a very dangerous approach, because, once those powers were given away, they would never be given back. All the evidence indicates that, while our people want Britain to be actively involved in Europe—and of course, I was the Prime Minister who enabled the channel tunnel to get going, so I do believe in having more to do with Europe—our people do not want to see a massive extension of the powers of Brussels into every corner of national life even if it is dressed up as a step-by-step approach—a kind of federal Europe achieved by stealth. I fully support the firm stand that my right hon. Friends have taken—[Interruption.]

Mr. Speaker


Mrs. Thatcher

I fully support the firm stand that my right hon. Friend Douglas Hurdthe Foreign Secretary and my right hon. Friend John Majorthe Prime Minister have taken against any commitment to a federal Europe. I would hope that most people in the House were against a federal Europe; otherwise, what is the point of people standing as candidates at the next election—to come back here and propose to hand over all their powers as representatives of constituents to another Parliament?

The second point—[Hon. Members: “The second point.” ] Thank you very much. The second point is that we should not let those who support a federal Europe pretend that they are somehow more European than the rest of us. They are not; they are just more federal. There is nothing specifically European about a federal structure—indeed, the opposite: it is the nation state which is European.

It has been the great achievement of the Community to bring about greater co-operation between those nation states—not to merge them. Instead of pouring distinctive nations into institutions and arrangements of the same mould, we should be encouraging different kinds and degrees of co-operation between European countries. My right hon. Friend Douglas Hurdthe Foreign Secretary said as much in his speech on 31 May in Shropshire, and I heartily agree with him.

That sort of European co-operation is already developing—for example, in other European matters, France feels easiest with a different defence relationship with NATO than the rest of us, but in practice she [column 1029]contributes in important ways to the west's defence. No one says that France is isolated—they accept the difference.

The Schengen group of countries have been able to reduce their frontier controls because of their common borders. We recognise that that would not do for us in Britain, because considerations of security and immigration are quite different for an island nation. But that does not mean that they cannot reduce their borders because all their geography indicates that. These different relationships make sense for those who participate, but they are not a model for everyone. The true Europeans are those who base themselves on Europe's history and traditions rather than on constitutional blueprints.

Thirdly, we should not for one moment fall for attempts to argue that a federal Europe would mean a devolution of powers. If that were the case, why change what we have at present? Powers are devolved, in that they are held by national Parliaments and Governments, as they should be. For Mr. Delors to say that his proposals would mean devolving powers is ridiculous. They are not his or the Community's to devolve.

Mr. Dykes


Mrs. Thatcher

Our sovereignty—[Interruption.] I gave way—[Interruption.]

Mr. Dykes


Mr. Speaker

Order. I think that the right hon. Lady gave way, but the hon. Gentleman did not rise again.

Mr. Dykes


Mrs. Thatcher

May I continue? I understand that quite a lot of Privy Councillors want to speak.

Mr. Jimmy Hood (Clydesdale)

On a point of order, Mr. Speaker. [Interruption.]

Mr. Speaker

Order. What is the point of order?

Mr. Hood

As I am sitting opposite the hon. Member for Harrow, East (Mr. Dykes), perhaps I may be of some help. The hon. Gentleman did stand up, but he was pulled down by a colleague sitting next to him.

Mr. Speaker

I do not know about things like that.

Mr. Dykes


Mr. Speaker

It is up to the right hon. Lady.

Mrs. Thatcher

My hon. Friend the Member for Harrow, East (Mr. Dykes) might find it better to intervene when I have finished my next sentence.

Our sovereignty does not come from Brussels—it is ours by right and by heritage. We choose what we devolve to the Community—not the other way round.

Mr. Dykes

The hon. Member for Clydesdale (Mr. Hood) was correct—I was pulled down by one of my colleagues——

Hon. Members

Name him.

Mr. Speaker

The hon. Gentleman should be more robust.

[column 1030]

Mr. Dykes

I apologise, Mr. Speaker, if all this has delayed the House when there is pressure on time. I am most grateful to my right hon. Friend for giving way. On the definition of federalism that she has just enunciated, does she agree that it was the American Secretary of State, James Baker, who said that devolution with common integrated structures was the definition of federalism?

Mrs. Thatcher

That is precisely why I made my point clear. Our sovereignty does not come from Brussels, and I hope that my hon. Friend is not arguing that is does. It is ours by right and by heritage. We choose what we devolve to the Community—not the other way round.

The fourth consideration which I hope my right hon. Friends will have in mind is the danger of being drawn along by what start out as vague commitments but end up as highly specific and damaging proposals. There is a much greater willingness in some European countries than in Britain to sign up to great rhetorical statements and declarations, without worring too much about what they will mean in practice; and it is welcome that, as some of the earlier declarations of intent have been committed to treaty language, a number of Governments—not just ours—have become more worried about the practical consequences. Such is the case with the social charter.

Moreover, some are now seeing that a single currency could not possibly work with the disparities between European economies as great as they are now—and that setting the goal of a single currency has no relevance to Europe's current economic problems. Moreover, to go to a single currency——

Mr. Robert Sheldon (Ashton-under-Lyne)


Mrs. Thatcher

May I finish this section?

Moreover, to go to a single currency is not just a practical matter: it is a fundamental question of principle. It is not only a merger of currencies: it is to give up for all time the right of the Banks of England and of Scotland and our Treasury to issue our own currency, backed by our own economic policy, answerable to our own Parliament. That is why I do not believe in a single currency.

If, nevertheless, some other members of the European Community wish to agree to the idea of a single European currency—and not all of them belong to the exchange rate mechanism yet—they are entitled to go ahead and do so. Luxembourg is already linked to the Belgian franc, and the Dutch guilder is close to the deutschmark.

But unless legislation on a single currency were contained in a separate treaty, certain consequences could follow. I shall give three. First Britain, although not in a single currency herself, may be expected to contribute to the huge increases in structural funds required in order to allow the weaker member countries to participate in EMU.

Secondly, unforeseen consequences could arise as European Courts interpret the single currency provisions in the context of the full treaty of Rome.

Thirdly, there is no way in which the economies of the former communist states of eastern Europe could withstand the pressures placed on their fragile industries by a single currency—witness what has happened to eastern Germany.

We have to complete the transformation of the countries of eastern Europe into free enterprise [column 1031]democracies, and enable them to join the European Community as soon as possible. They need an anchor to the west.

I shall give way now to the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), before I come to my final point.

Mr. Sheldon

I agree with quite a lot of what the right hon. Lady has said about European monetary union. However, like many hon. Members, I have seen a number of the reports of what she is supposed to have said as well as those things she has actually said. I find it difficult to understand why the right hon. Lady accepted the exchange rate mechanism when she has said so many harsh things about it.

Mrs. Thatcher

The right hon. Gentleman and I can go into this, but it will take a few moments. First, I am fully in agreement with an exchange rate mechanism that is anchored to the deutschmark, because it is, in a way, like anchoring to the gold standard, provided that that is done at the right value. That is what we have done, and we have done it with a latitude of 6 per cent. That should be perfectly enough to accommodate any swings in the exchange rate.

It is if one moves to a single locked currency that one gets enormous difficulties, because there is no latitude to vary the currency. Therefore, any difficulties in the monetary or economic system have to go either to increased inflation or to increased recession and increased unemployment. The 6 per cent. swing gives us some latitude, but I believe that joining the exchange rate mechanism gave us all we needed for stiffening against inflation, and I do not believe that it is necessary or desirable to go any further into stages 2 or 3—[Interruption.] The right hon. Gentleman asked me a straight question and, as always over the past 31 years, I have given him a straight answer.

Finally, looking beyond the borders of the European Community, we have to strengthen and develop Europe's trade with the United States and the rest of north America, Canada and Mexico, perhaps through moves to a transatlantic free trade area. Further, the European nations have to encourage the Soviet Union and its constituent republics as they struggle along the path of reform.

We shall not achieve any of that if we accept a centralised, inward-looking European community. In both Luxembourg and Maastricht, we must speak out and reach out to the wider world. In my right hon. Friend John Majorthe Prime Minister we have a leader with the vision and sense of purpose to do just that. I wish my right hon. Friends well in their great task, and I give them my full support.