Mrs. Margaret Thatcher (Finchley)
I should like to make it clear at the outset of my remarks that tonight I shall support the motion in the name of John Majormy right hon. Friend. [Interruption.]
Order. I say again—this time to those who sit on the Opposition Benches—that this debate is being watched and heard by very many people.
For the sake of clarity, I repeat that I shall support the motion in the name of my right hon. Friend the Prime Minister and my other right hon. Friends. I congratulate my right hon. Friend on his speech and on the clear way in which he set out his views and indicated his way ahead. I know that he has difficult negotiations at Maastricht and that therefore he needs our support in those negotiations. I, for one, am——
Mr. Frank Haynes (Ashfield)
Will the right hon. Lady give way?
I for one am very grateful for this opportunity that has been given to right hon. and hon. Members seriously to put forward their views on what should be a very great and serious occasion. When my right hon. Friend is negotiating in Maastricht, it will undoubtedly be a very tense and hard negotiation. He has already said that there are some proposals which are quite unacceptable to the Government, and he pointed out which they were. His task will be to remove those proposals before he comes back to this House. [Interruption.] In my day, that would have required the occasional use of the handbag. Now it will doubtless be the cricket bat, but that is a good thing because it will be harder. [column 291]
The Government will achieve their objectives only by putting our arguments vigorously and persistently, by refusing to be intimidated by deadlines and by making it clear that there are certain points on which we are not prepared to surrender. [Interruption.] Right hon. and hon. Members may be certain that I shall make my views clear, if I am given the opportunity to do so. It is not my custom to use coded messages.
My right hon. Friends have already shown that they can negotiate hard and that they have the courage to say no to proposals that are plainly not acceptable to the House. They have already explained why some measures should not be made by amending the treaty of Rome because that would bring them under the jurisdiction of the European Court, which has different methods of construing any proposal or legislation from those used by our courts.
I was astonished by the speech of the right hon. Member for Islwyn (Mr. Kinnock). This is a very serious debate. There are enormously serious issues affecting the future rights of the House and its future responsibilities. When we are talking about the rights and responsibilities of the House, what we are really talking about are the rights of our constituents, and they need to be treated very seriously indeed.
The right hon. Lady has referred to the rights of constituents. Will she please clarify the reasons why she is opposed to inviting the people, whose rights are to be bargained about at Maastricht, to reach the final decision? I know that she took a different view when we entered the Community, at the time of the referendum and at the time of the Single European Act, but given the enormity of what is now proposed, even with the reservations that the Prime Minister has properly expressed just before a negotiation, will she tell the House why she does not support the rights of the people to give the final verdict on such a major constitutional question?
I shall have something to say about that towards the end of my speech. I shall address my remarks directly to the point that the right hon. Gentleman has made. I am very conscious that the only authority that we have is the authority given to us by the ballot box.
May I make one or two more comments on the speech of Neil Kinnockthe Leader of the Opposition? I came to the same conclusion from his speech as my right hon. Friend Norman Lamontthe Chancellor—that the right hon. Member for Islwyn was going to have a single currency willy-nilly. He has already made up his mind. The argument that he uses is that, if others have it, we must. That is an argument for a flock of sheep, not for people who are sent here to analyse the problem and to use our minds and our reason to say which course we should follow. If ever it is said that whatever they do we must follow, then they will put all kinds of things on the table which we shall have to fight very much harder.
I know full well that the Labour party made a commitment to a single currency and attached certain conditions. That commitment was made before the draft proposals were published. When they were published, as the right hon. Member for Bethnal Green and Stepney (Mr. Shore) said, those conditions were not there. That should have made a difference to the Labour party's decision. [column 292]
It is not surprising to some of us that the Labour party might wish to hand control of our financial and economic affairs to Europe, or indeed to almost anyone other than itself. It would suit it to get out of the responsibility and to pass it over to another body. That is not what we are here for. The fundamental issue—[Interruption.] I said that I am not accustomed to using coded messages. The fundamental issue——
Will the right hon. Lady give way?
I will take the broad-brush issues, because it is very easy to get lost in the detail. [Interruption.]
Order. May I ask the House to settle down? This parliamentary debate is of great importance. I ask the House to deal with it seriously. [Interruption.] The hon. Member for Nottingham, North (Mr. Allen) must contain himself.
On a point of order, Mr. Speaker. It is within your discretion to impose a 10-minute rule on speeches. Is that applicable to all hon. Members, but more applicable to hon. Members who rarely turn up at this place?
The hon. Member should know that it is not within my discretion to put a 10-minute limit on speeches at this point.
Thank you very much. The speech would be shorter if I could get on with it.
The fundamental issue that will confront the Government at Maastricht is that the draft treaties propose an enormous, and, to me, unacceptable, transfer of responsibility from this House, which is clearly accountable to the British people, to the European Community and its institutions, which are not. In this House we are rightly——
Will the right hon. Lady give way?
In due course.
We are rightly jealous of our powers and responsibilities. As I said a moment ago, we are very much aware that our authority comes from the ballot box and that what we are talking about are the rights of the British people to govern themselves under their own laws, made by their own Parliament.
It has rightly been said that it is the character of a people which determines the institutions which govern them, and not the institutions which give people their character. Yes, it is about being British and it is about what we feel for our country, our Parliament, our traditions and our liberties. Because of our history, that feeling is perhaps stronger here than anywhere else in Europe, and it must determine the way in which our Government approach such fundamental matters.
My right hon. Friend John Majorthe Prime Minister has said a good deal about the Single European Act, which has many lessons for us. It is not the case, as is sometimes alleged, that the Single European Act introduced qualified majority voting in the Community—it was already in the treaty of Rome. As my right hon. Friend said, the Act extended it in certain limited areas for the express and sole purpose of completing the common or single market by 1992. That was all. In the words of article 8A, these measures were adopted
“with the aim of progressively establishing the internal market over a period expiring on 31st December 1992.”
Moreover, although it was in our interests to have majority voting on some measures, it was not on others and unanimity was explicitly preserved for other important areas. As article 100A makes clear, qualified majority voting does not apply
“to fiscal provisions, to those relating to the free movement of persons nor to those relating to the rights and interests of employed persons.”
We would have expected some of the Commission's directives to have been taken under that unanimity clause, which requires us all to consent.
Will the right hon. Lady give way?
One moment—in due course.
The Commission, however, has subsequently tried to circumvent the unanimity requirements by bringing forward proposals under other articles of the treaty where qualified majority voting is the rule. It has received some support from the European Court, which made an interpretation that would not have been made by our courts.
I raise that because we should draw a clear lesson from what has happened under the Single European Act. Many of us gave assurances about the unanimity rules, fully believing that they would be honoured and that the spirit of them would be honoured. Any powers conceded to the Commission by agreement are likely to be widened in practice and extended into areas that we do not envisage. We must look at the draft proposals in that light.
The other important step in the Single European Act, as my right hon. Friend John Majorthe Prime Minister said, was the agreement to strengthen and improve co-operation on foreign policy. That agreement was never made part of the treaty of Rome—and quite rightly not. There are two ways to go—the treaty of Rome, with the European Court's interpretation of it, which is quite different from ours, or an intergovernmental agreement which is binding upon us but which does not have to enter into our law and is not part of the treaty of Rome.
That agreement on political co-operation is an excellent agreement. It was wholly drafted by us in the Foreign Office—[Laughter.]—to whom I gladly pay tribute in connection with that agreement and hope that they will be pleased—but it was tabled after I had shown it to the Germans and the French to get their approval. It was a bit offside but, nevertheless, some would take it as a compliment.
Countries with a history and a tradition such as Britain's cannot allow their hands to be tied on defence and on foreign policy by making them or their implementation subject to majority voting. I was very grateful to John Majorthe Prime Minister for what he said, because something in a speech made by my right hon. Friend Douglas Hurdthe Foreign Secretary—I think, in The Hague—suggested that there might be majority voting for implementation. [Hon. Members: “Oh.” ] I know that he will take it in very good part when I say that I read it, analysed it and thought that he was going a bit wobbly. However, I am delighted to hear from my right hon. Friend the Prime Minister that it is all to be agreed and that there will be no majority voting, that we shall continue under the intergovernmental agreements and not have things attached to the treaty of Rome. [column 294]
Looking to the longer perspective, the history of our dealings with the European Community seems to consist of our conceding powers, of reassurances being given about their limits, of those limits being breached, and of the European Community then coming back with a new set of demands for more power for the Commission. That is the conveyor belt to federalism. That conveyor belt will not be stopped just by removing the word “federal” from the treaty.
I do not believe that any of my colleagues want federalism, but, judging from the right hon. Gentleman's speech, the Opposition are already committed to it. Faced with this, I believe that the majority of the British people do not want to hand over substantially more powers to the European Community. I believe that our objective must be to uphold the sovereignty of Parliament which has served us so well. That is more than can be said for the use that the Commission has made of some of its powers to promote what one newspaper has rightly described as “Euro-lunacies” . I shall not waste the time of the House by listing them.
It was never the intention——
A little more patience.
It was never the intention, I believe, of the founders of the European Community that the Commission should try to exercise its control over every aspect of a nation's life in that way. Again, I was very grateful to Douglas Hurdmy Foreign Secretary—[Laughter.] It is perfectly all right—my right hon. Friend is used to both praise and blame from me. Agreed? Excellent. Good.
My right hon. Friend had a number of Foreign Secretaries in her time. I accept the tribute on behalf of them all.
I am not quite sure whether he should.
However, that is why the Government are right to resist strongly—as my right hon. Friend said—attempts by some countries to bring education, health, social affairs, immigration and security into the treaty of Rome. We dealt with immigration under the Single European Act by a declaration which said that nothing in the Act should prevent us from making our own arrangements at borders to stop immigration, terrorism and crime. That is already agreed, and I hope that it will not be removed from the end of the Single European Act.
The right hon. Gentleman referred to the social charter. I have never for one moment regretted being isolated in opposing the social charter. If I had not opposed it, it would have been assumed that we had agreed to many of the directives—there are about 40 under that charter—and there would have been implied commitment to them. There is not. It was absolutely right to oppose it. Moreover, it would have placed unnecessary burdens and restrictions on our industry, it would, of course, have caused more unemployment and it would have been an unwarranted intrusion into our national affairs.
Most dangerous of all when it comes to the transfer of powers is the draft treaty on economic and monetary union. My right hon. Friend has already said that he will reject most of the political proposals. Economic and monetary union and being in charge of one's own economic policy go to the heart of our democracy and our [column 295]powers. If one gives that up, one will have given up the capacity to make the main policies for which we are here and which affect the life of our nation.
Moreover, of course one is judged in an election on one's performance on the economy. Of course one is judged abroad on how successful we are and on how successful we were in transforming our economy from a socialist economy to an enterprise economy.
Mr. Tony Banks
If the hon. Gentleman would listen for one moment.
That will be the battleground for an election. It would be pretty ironic if, when arguing about the performance on this issue on one side or the other, candidates had, in the next breath, to say, “It may be that we shall pass all these powers over to the Community and other institutions.” That is an enormous battery of powers, as one has seen from the economic and monetary union.
Money Bills and the general economic policy are the exclusive responsibility of this elected House. We are not, in my view, entitled ever to give away those responsibilities or to give away the people's rights, which is what a single currency would mean. Nor do I believe that a single currency would be in this country's interests. It would require a vast transfer of resources to the poorer countries of the Community to enable them to meet the obligations of membership of a single currency—and that at a time when we in Britain are already giving more money in most years to the European Community than to the third world. [Interruption.] Look at the autumn statement. Many people outside——
No, I must give way to my hon. Friends on the Back Benches first.
Many people would have thought that we should give more money to the third world than to the Community. In the coming years, we shall be giving about £2.5 billion to the Community and £2.1 billion to the third world. That is before—[Interruption.] No wonder they do not make very good speeches—they never listen. That is before any account is taken of increased requests for structural funds because of a single currency. I think that we should take that very much into account.
Most importantly, a single currency would take away any democratic accountability for our economic policies to the people of this country. I know that some people say, “Don't worry, a single currency will never come about, because the convergence conditions will never be achieved.” The convergence conditions are totally unrealistic. Indeed, I doubt if they are achievable for many countries in the Community.
Mr. Tony Banks
Will the right hon. Lady give way?
Certainly, it will be difficult—[Laughter.] It is dangerous to assume that, because the conditions are difficult at the moment, they will stay the same. It is quite possible that the Community will change them, while still keeping the goal of a single currency. Too often in the past, we have seen what we thought was a watertight agreement being subsequently eroded.
As my right hon. Friend the Member for Worthing (Mr. Higgins) has noted in correspondence in The Times, there is the serious question of surveillance of our [column 296]economic policies by the Commission and the duty not to have an excessive deficit. From studying the section to which my right hon. Friend referred, it seems as if we shall be under surveillance anyway on a number of issues, even though we choose to use the exemption clause in the proposed treaty.
Will the right hon. Lady give way?
For old times' sake, I will give way to the hon. Gentleman before I go on to the important point about the exemption clause.
Just a year ago, the Conservative party committed a dastardly act against the right hon. Lady. I have missed her from the Dispatch Box ever since. If she was still in the seat of power, what would she be negotiating in Europe?
I am making a pretty good fist of just that.
My right hon. Friend Norman Lamontthe Chancellor of the Exchequer hopes to secure agreement to an opting-out or exemption clause, and one appears in the treaty. My concern, which is shared by many hon. Members of all parties, is how effective it would be in practice, bearing in mind the fact that, even if we exercise that power, we are still required to sign up to the goal of a single currency and to sign up to the institutions designed to prepare the way for it.
How easy would it be in practice to resist the pressures to go further? We do not want to be told that, because we have agreed to take part in the earlier stages of economic and monetary union under the proposed treaty, we have no real choice left but to accept a single currency. It seems to me as if that is the design of the whole draft proposals.
First, one has to have convergence with very different conditions. Before one can enter the single currency, one has to have another set of proposals—including, for example, that one has stayed within the narrow range of the exchange rate mechanism for two years. The hon. Member for Glasgow, Govan (Mr. Sillars) spotted the proposition. As my right hon. Friend John Majorthe Prime Minister said, eight member states could go to a single currency. We are in the exchange rate mechanism.
If we wish to keep open the option of going into a single currency, we have virtually no freedom of action in that time. One cannot have different interest rates. If one's interest rates are lower, currency will flow out. If one's interest rates are higher, a good deal of money might flow in artificially. One would be linked inevitably to that single currency. The rate would be 2.5 per cent. and we should be unable to operate separately.
That is the design of the treaty. It always happens little by little. We should be told that we have come so far—from 6 per cent. to 2.5 per cent., and then from 2.5 per cent. to 2 per cent. or closer—that we have no option but to join. We must totally reject that, if need be——
Mr. Malcolm Bruce (Gordon)
Will the right hon. Lady give way?
Not at the moment. The hon. Gentleman should listen to my argument.
As the hon. Member for Govan said, in such circumstances it would probably mean coming out of the exchange rate mechanism to keep our freedom of action. That is the danger of signing up to this treaty, and I hope that my right hon. Friends will consider that carefully. My [column 297]right hon. Friends the Prime Minister and the Chancellor genuinely wish to keep open the right to go for exemption, and do not wish to be put by the treaty into a kind of funnel in which one has to go automatically to a single currency.
After her clear analysis of the situation, will my right hon. Friend explain why she took us into the exchange rate mechanism?
If one enters the exchange rate mechanism, one gets co-operation with the other European Community countries, and there is no need to go any further. One has the latitude one wants. That was the advice tendered to me on several occasions. We have a 6 per cent. latitude. Other countries have had to have their currencies devalued or revalued, and they have been perfectly able to do so in the circumstances. One uses the exchange rate mechanism and the deutschmark as a kind of gold standard, but one can change the value if one finds that one needs to do so and that the alternative would be unemployment. I hope that my hon. Friend the Member for Hayes and Harlington (Mr. Dicks) is satisfied.
In some ways, it would be better for those who want a single currency to be achieved to go to it by a separate agreement outside the treaty of Rome. If it is achieved through the treaty of Rome, we get all the difficulties of interpretation by the European Court. If people want a single currency, why should they not achieve it outside the treaty of Rome? We have had intergovernmental conferences outside the treaty. That would be the way to do it, and it would not get us into the difficulties that I have described, of signing up to the concept of a single currency, signing up to its institutions and being driven into what I regard as a trap.
I recall the debate on economic and monetary union on 2 November 1989, in which almost universal opposition was expressed in the House to the whole Delors concept of monetary union and a single currency. It was as recently as November 1989. I remember attending the next European Council and saying to my colleagues, “It is no good. Our Parliament just will not accept it. It goes to the heart of our parliamentary tradition” . My colleagues understood that and were prepared to make provision for it.
There has been a colossal and inexplicable change, especially among Opposition Members. The Opposition seem to be prepared to give up the parliamentary supremacy that has been the heart of our constitution.
I want to reply to the point raised by the right hon. Member for Chesterfield (Mr. Benn) about a referendum. If at some point in the future there should be agreement between the parties in the House to abandon the right to issue the pound sterling—not only now, but in the future—and if the House agreed to abandon the right to issue our own currency, with all that that implies, and to adopt a single currency, the people would have no choice at an election time about that enormously important point.
If the Conservative party, the Labour party and the Liberal Democrats all said, “We are going to have a single currency, we are going to abandon the powers of the House of Commons and we are going to take away your rights,” people could not make their views known through the ballot box at a general election. [column 298]
Whoever got into power would not then have the right to claim that they had a mandate. They would not have had a mandate because they would have deprived the people of a choice. They would have done so not on a small thing, but on a major fundamental constitutional issue which was the right of the people. The only alternative for the people would be to vote for extremist parties—something which I should regret very much. There would be extremist candidates everywhere.
My right hon. Friends must address their minds to this matter. My right hon. Friend John Majorthe Prime Minister said clearly that he believed in choice. He will provide choice. If everyone believes in the precise same arrangements on exemption from the single currency but we sign up to the concept, how could the people let their view be known? If one really wants to know the answer, one can find it in Dicey on the constitution. He came to the conclusion that, under those circumstances, the only thing to do was to hold a referendum, because that states clearly the issue and the merits and demerits. In our system, it would be no more binding than previous referendums which we have held in my time in Parliament. A referendum is advisory but it is not binding. The answer may be overwhelming. We had referendums in Scotland and Wales. Constitutional issues warrant a referendum.
Anyone who does not consider a referendum necessary must explain how the voice of the people shall be heard. Therefore, I conclude that we should let the people speak. If not, we shall deprive them of their say on rights which we are taking away not only from them but from future generations and which, once gone, cannot be restored. A referendum may not be popular with some members of my party, but I doubt whether they have thought it through.
I am grateful for the opportunity to express my views clearly. I believe passionately in this House. I have been here for 32 years, although that is not as long as some Opposition and Conservative Members. We should retain parliamentary supremacy. We should not make a massive transfer of power to the Community, which is not accountable to our electorate. Therefore, we should not join a single currency.
I understand that my right hon. Friends wish to keep open the option, but the option is inevitably open because future Parliaments may consider it. We do not have to keep it open. I understand my right hon. Friends' wish, but I want to be sure that it is genuine. [Interruption.] Yes, of course. So does my right hon. Friend John Majorthe Prime Minister. I wish him well at Maastricht. Judging by the performance today, he will be our Prime Minister for a long time.