Speeches, etc.

Margaret Thatcher

HC I [European Community]

Document type: Speeches, interviews, etc.
Venue: House of Commons
Source: Hansard HC [199/457-65]
Editorial comments: 1805.
Importance ranking: Minor
Word count: 4370
Themes: Parliament, Elections & electoral system, European Union (general), Economic, monetary & political union
[column 457]

Mr. Edward Heath (Old Bexley and Sidcup)

The House may think that my views are already well known. If so, it enables me to speak briefly in this great debate and it will avoid the interventions of so many of those who are opposed to me; they already know my views.

When the Prime Minister said, on his appointment, that he wanted Britain to be at the heart of Europe, my heart leaped with joy. That joy was echoed right across Europe. Other European countries said that the new British Government would be positive and co-operative and would put forward proposals for bringing about the completion of the European Community, for which they had been working for the past 40 years. I believe that that is the Prime Minister's intention, which is why I shall strongly support him tonight. I also believe that at the conference he will use all his persuasiveness to enable the European Community to move ahead.

I have no desire to smear or jeer at the Opposition and the fact that they have now declared themselves fully in support of the Community, because that is a matter of intense pleasure to me. They recognise full well that, if that had happened in the 1950s, 1960s or 1970s, the story of this country in Europe and of the Community would have been different. However, that is history. Today we must welcome the fact that the three major parties in this country all agree about the importance of the Community.

I regard it from the point of view of the importance to our people, our country and Europe as a whole. I confess that I sometimes wonder whether the thought of Europe as a whole is in some people's minds, particularly when we discuss our friends in the Community and their actions. Some of them do not always stick to the regulations as we should like. Although we are better than most, we are not entirely immune to that accusation. No development is helped by accusations and counter accusations between members of the Community. [column 458]

I welcome what the Prime Minister said in his speech. He began by referring back to the summit in Paris in October 1972, when the House had already agreed to our membership but before we had become members. That was to happen on 1 January 1973. He pointed out, quite rightly, that at that summit the Heads of Government had all committed themselves to the future of the Community. He quoted in particular the text of the communiqué on the question of economic and monetary union, where we all affirmed

“the determination of the Member States of the enlarged European Communities irreversibly to achieve the economic and monetary Union” .

That was 20 years ago, and what is more, we set the way to achieve it.

The subjects with which we dealt at that time where widespread. We dealt not only with economic and monetary union, but with regional policy. The British were responsible for introducing regional policy, which has been of great benefit to the regions of this country. I am pleased that the Secretary of State for Trade and Industry has now announced that the Government are to have a strategy for industry, which is a suitable vehicle for regional development.

We also dealt with social policy because we believed strongly in it. Herr Brandt wished to include in the communiqué the fact that trade union members of boards would be permitted because it had been so successful in his country, which was already the most successful economy in Europe. We went on to industrial, scientific and technological policy and also dealt with environmental policy. In 1972 at the Stockholm conference, Britain was to take the lead on environmental policy. The then Secretary of State for the Environment led that conference on the protection of the environment.

There was then the question of energy policy and external relations. The communiqué concluded—this is the point that I wished to make—with the reinforcement of institutions. The final paragraph said:

“The Heads of State or Government, having set themselves the major objective of transforming, before the end of the present decade” —

that was the 1970s—

“and with the fullest respect for the Treaties already signed, the whole complex of the relations of Member States into a European Union” .

It was a question not of economic, political or monetary union but of complete European union. That has been the objective of the other countries in the Community ever since.

Mr. Tebbit

I particularly want to help my right hon. Friend recollect what he said in the House on 25 February 1970, which was:

“What is more, those members of the Community who want a federal system, but who know the views of Her Majesty's Government and the Opposition parties here are prepared to forgo their federal desires so that Britain should be a member and take part in political consultation and co-ordination with them.” —[Official Report, 25 February 1970; Vol. 796, c. 1221.]

If my right hon. Friend was so keen for the members to forgo their federal destination, why is he now so keen that they should take it up?

Mr. Heath

I shall deal with the question of federalism because I know that it is an obsession of my right hon. Friend. [column 459]

I welcomed what my right hon. Friend the Prime Minister had to say yesterday. He was right to emphasise that we have had 20 years to examine the issues and make a complete decision on them.

With regard to economic and monetary union, I wish to address the issue of a single currency. My right hon. Friend the former Prime Minister signed the treaty for the single market. It must have been quite clear—any economist could have stated it at the time—that if we had a single market with all the obstructions and difficulties removed, there was no alternative to a single currency. That was quite plain to see at the time.

Mr. Budgen


Mr. Heath

I am accustomed to my hon. Friend shouting, “Rubbish” —he does it constantly, but what he says bears no resemblance to the truth or the facts of life. No great economy in the world today has more than a single currency. Let us consider the two greatest—the United States and Japan. Both have single currencies. What is more, we have made various suggestions in the past two to three years for avoiding a single currency, not one of which has stood the test of examination—and they will not do so. Therefore, there is bound to be a single currency, and the remaining question relates to the way in which and the time when that single currency is to be introduced.

My right hon. Friend the Prime Minister has said that he will not be bullied or forced into accepting a single currency. He has left the position open so that he is able to accept it willingly. I am glad that he has done so, and the sooner the time comes for us to accept that single currency, the better. One factor that reassures me at present is that various of my friends are talking about a time schedule, which will not exist. It will be shortened at every stage as we make developments in the Community.

It is in the interests of our businesses to have a single currency. Imagine what would happen if the rest of the Community had a single currency, and we were the only country without it. What would happen to our business men and our investment? The consequences would be unthinkable. Our business men are frank and recognise that if they are to take the opportunities that the Community offers, they must be part of that single currency and its machinery.

How can we expect to make the City of London the financial centre of the Community if we are outside a single currency? It would just not be feasible. How can we expect the City of London to be the centre of insurance and other activities in the Community if this country is outside the Community's currency? That would be unimaginable. Those are the facts of life with which we must deal.

Mr. Budgen

Will my right hon. Friend give way?

Mr. Heath

No. Well, if my hon. Friend will refrain from describing my simple utterances as “rubbish” , I shall give way.

Mr. Budgen

Perhaps my sedentary remarks were somewhat rude.

Will my right hon. Friend explain how it is that the Japanese financial markets are so successful when they trade in other currencies, and how they find it possible to trade in other countries so successfully?

[column 460]

Mr. Heath

Many foreign exchanges trade in other currencies, but that is not what happens in manufacturing businesses, which have to use the people who trade in the currencies. It would be impossible for London to be the financial centre of a Community if London did not share that single currency.

It is held up that we cannot devote any more sovereignty to such issues. We have pooled sovereignty in the Community. We all knew that in doing so we would have a say over other people's sovereignty. Sometimes a majority decision and sometimes a unanimous one gave us a say in other countries' sovereignty. That process will continue to develop, and rightly so, because it is of benefit to the people of this country. It will help our country, our nation and Europe as whole.

When we joined the North Atlantic Treaty Organisation, of which we heard much earlier today, we gave it the whole of our sovereignty in the case of war. The words in the NATO treaty made it clear that an attack on one was an attack on all. It did not state that a royal commission should be set up to examine the position or that we should have a chat about co-operation. We made a firm commitment that, all the time that we were in NATO, an attack on one would be an attack on all. There cannot be a greater contribution of sovereignty than that, and the Community is not asking for anything like that at present. Let us not continue the perpetual attack on sovereignty as the reason why we should not develop the Community.

I am strongly in favour of more democracy in the Community. I do not agree with the right hon. Member for Manchester, Gorton (Mr. Kaufman) that it is a bureaucratic Brussels—the common cry. We all have bureaucracies, and Brussels happens to have a more competent bureaucracy than most others in the world. We make a considerable contribution to it, which is why it is so successful in making proposals?

Mr. Phillip Oppenheim(Amber Vslley)

Will my right hon. Friend give way?

Mr. Heath


How could the Community possibly have made the progress that it has in just 40 years unless it had had a central organisation to put forward proposals? I believe that the European Parliament should be given more powers as soon as possible.

I quite understand that some right hon. and hon. Members may hate the idea of another organisation dealing with the affairs of the Community. However, as the Community has the power and we contribute the sovereignty, it follows rightly and naturally that the European Parliament should have those powers. Those who are opposed to it cannot have it both ways. They cannot accuse the Community of being undemo-cratic while refusing to grant any democratic powers to its organisations. That is why democratic development is necessary.

The Government have taken a firm line on the social charter. I strongly support the Prime Minister in what he is doing at the conference. However, I ask the Conservative party to give a second thought to the social charter. Ever since Disraeli, the Conservative party has been proud of what it has done for the social services. I [column 461]believe that we should continue that development in Europe. What is more, we have said that the other countries must not compete unfairly.

We must not allow that accusation to be levelled at us. They could say that any capitalist can repress the wages of young workers without limitation and accuse us of unfairness. What happens when, by the time workers are 20 or 21 they are sacked so that firms can take on the next generation of young people? We all have constituency interests in the subject. In my constituency I find that older workers are sacked so that companies can take on lower-paid, young workers—that does not constitute a healthy society. The Prime Minister should take another look at the social charter.

With regard to immigration and similar matters, customs duties are being abolished inside the Community. Immigration inside the Community is covered by free movement and it is up to us in the Community to arrive at an arrangement about immigration into it.

There are undoubted problems. We have the problem of those who want to come from Africa and the Asian continent to this country. Our Community partners, especially Italy and France, have the problem of those in Muslim and African countries who want to cross the Mediterranean and enter the Community. We all face such problems, but they can be sorted out jointly by the members of the Community. There is no reason to say that such matters can be left to one side.

Now for the European Free Trade Association. The British created EFTA in an attempt to break up the Community. Neither the Labour Government nor, in their early years, the Conservative Government were prepared to join the Community and in 1958 we set up EFTA with its seven member countries. It did not break up the Community. The Community laughed at us and the only people who suffered were the British, because the smaller member countries said, “We are poor and weak.” But they were much richer than we were. Those countries asked us to do this and that for them. I sat through innumerable EFTA meetings at which that was always the theme.

When we went into the Community, we made a good arrangement for the EFTA countries. Denmark wanted to join, as did Norway, but it was defeated on a referendum. Eire engaged in negotiations. Now the EFTA countries want to join the Community, not because it is a free trade area or because they want to turn it into one, but because they see it as a complete Community. The Swedes, the Austrians and the Swiss—they above all—want a complete Community and do not want to see it disintegrate into a purely free trade area of the type that they are leaving.

How can that be done? As I know only too well, negotiations take time and it cannot be done tomorrow. However, after 1992, negotiations can begin and it should be possible for those countries to become full members. That also has a relationship to defence, with which I shall deal in a moment. The Foreign Secretary has rightly said that central European countries should be welcomed when they are ready. That means economically and politically ready. They must be democratic in the fullest sense of the word, and must be able to take their place in what will be a single market by the time they join.

Those are big requirements for people who have been suppressed for 40 or 50 years and who have no idea at the moment of how to run a market economy. Some of them are finding the utmost difficulty in establishing a democratic political society. People who say, “Bring them [column 462]in tomorrow or the wall of wealth is being used against them,” are talking fantastic nonsense. As I have told the House before, it took us 11 years after the end of the second world war—six years of Labour government and five years of Conservative government—to abolish the restrictions that had been set up to carry on the war. I remember that well because there was a blazing row between Harold Macmillan and Anthony Eden about whether it should be done.

After their dictators died, Spain and Portugal took 10 years before they were able to say that they felt ready to join the European Community. If we asked the central European countries to come in today as full members, they would be swept off the face of Europe. There is nothing that we want to buy from them because those countries have all been under Soviet domination. However, they have seen—as the east Germans saw in west Germany—what is available to the rest of us, and they want to buy it.

The President of the United States is not justified in saying, “Do these things in a year and we will help you.” It is not feasible for them to be done in a year. British business men who have been to central European countries and those of us who have travelled to most of them and spoken to their leaders know about the utmost difficulty they are having in changing to a new system. However, there will come a time when we should welcome them to the Community.

Mr. Skinner

I am listening carefully to the right hon. Gentleman. I was here on 28 October 1971 for that important debate on Europe and for the vote. At that time about 500,000 people were out of work in Britain and some of us regarded that figure as fairly high. We had gone through a period since the end of the war when unemployment rarely went above 500,000. I have listened to the wonderful story about the Common Market. There are 2.5 million people out of work in Britain and millions are out of work in this nirvana of the Common Market that the right hon. Gentleman describes. Only 5 million people are employed in manufacturing in Britain. There will soon be more working in shops and hotels. Some of that has happened because for the past 12 years we have had a Tory Government whom the right hon. Gentleman has occasionally supported. When I look at the Common Market now I do not see an economic miracle any more. I see trouble with a capital T and mass unemployment.

Mr. Heath

I do not think that the hon. Gentleman would expect me to go into the history of the past 12 years on this occasion; nor can he blame the European Community for the situation. My Government managed to bring unemployment down to just 560,000 despite the policy that had been overdone by Roy Jenkins, now Lord Jenkins of Hillhead, whose financial policy pushed unemployment up well above 1 million.

Mr. Skinner

The right hon. Gentleman is saying that he does not care about the dole queues.

Mr. Heath

I am saying nothing of the sort. The hon. Gentleman knows that throughout my political life I have worked to bring down unemployment. On this occasion, the hon. Gentleman has gone too far.

Defence is now being discussed, and it must also be treated realistically. NATO and those who are responsible for running it now feel that they have empty hands and are understandably looking for a purpose. I say to the Prime [column 463]Minister and to the Foreign Secretary that NATO is not justified in turning itself into a purely political instrument or in saying that it will extend its breadth to other parts of the world. I am strongly opposed to that, as, I think, are the majority of hon. Members, and it must not be allowed to come about.

Let us examine the European contribution to NATO. My right hon. Friend the Foreign Secretary knows very well what President Kennedy said to me. He may have said it to others. He said that he wanted two tall, strong towers in NATO—an American tower and a European tower. I said, “You have a tall, strong tower and we have a rather wobbly one” —to use the current expression. He said, “That is why I want Britain in the Community and will do everything I can to help you get into it. I shall be as discreet as possible and you know the way to let me know what you want.”

That is not anti-NATO. That is the proper basis for NATO. If the United States, a super-power, is one of the pillars, Europe is perfectly entitled to organise its defence to be the second pillar inside NATO. The Americans do not grumble about that. How could they? How do we form the European tower? There is no doubt that over time the Americans will remove more and more of their forces from Europe if the present situation continues. Therefore, we must be prepared to do more to look after our own defence.

The Western European Union is said to be the answer, but it was formed for one purpose—to bring Germany into the family of European nations, and it was successful. After that, it fell into disuse. I resurrected it on 18 April 1962, so that we could have a discussion that the French would not allow in the Community negotiations, then it fell into disuse again. Now, we are trying to make an institution that had another purpose into one that will deal with defence in Europe. That may be the best way to deal with it at the moment, but I do not believe that, after a time, the Community will continue to exist with these outside organisations dotted about it. This will be particularly so as the European Parliament gains more powers and strength.

What is more, one cannot separate defence from the economy, as we can see at the moment. We cannot separate defence from foreign policy, or foreign policy from the economy. Therefore, the time will come when these things will have to form a unity in exactly the same way as the three communities that used to exist are now one Community. These organisations will develop. It is because I believe that this is bound to happen that I am more optimistic than events give me justification for being.

I shall deal now with the suggestion that there should be a referendum.

Mr. Nigel Spearing (Newham, South)

I can now ask the right hon. Gentleman a question that I have wanted to ask him for 20 years. He has described his commitment to broad political union. Did he have a mandate for the vote mentioned by my hon. Friend the Member for Bolsover (Mr. Skinner)? Did the right hon. Member for Finchley (Mrs. Thatcher) have a mandate for the Single European Act? Does the Prime Minister have a mandate for going to Maastricht next week and agreeing to what is in that treaty?

[column 464]

Mr. Heath

I can answer only for myself; I cannot answer for my right hon. Friends. We had a debate in the House over many days in July and over many days when we returned in October, and at the end we had a vote, in which Conservative Members were free to vote as they wished. It was up to the Labour party to decide how it would allow its Members of Parliament to vote. It decided to put on the Whip, but 72 of its Members abandoned it, with the result that there was a majority of 112 in favour.

Every time that the matter was debated, from my opening speech at the first conference in Paris in October 1961, it was made clear that the purpose was to have an ever-closer union to create a European Community. Every single document—I have quoted some already—has made that clear. I believe that we had complete authority from the House to carry on as we did.

Mr. Spearing

Was that an electoral mandate?

Mr. Heath

From the House.

Mr. Spearing

From the country?

Mr. Heath

Yes, because the country elects the House. That is why I want to deal with the referendum. There are those who say that there must be no infringement of sovereignty, but immediately say that we must have a referendum.

My right hon. Friend the Member for Finchley (Mrs. Thatcher) made a dramatic speech in the debate on the referendum in 1975. Most people know that, when the House debated our entry into the Community, the then Mr. Wilson said that he would not tolerate a referendum, and we both agreed about that. At the end of the debate, there was no decision to have a referendum. However, there was a referendum because one of his Cabinet colleagues put pressure on him and he gave way. Even then, it was rightly said to be an exceptional case and not to be followed by any others.

We are now told that it has become part of the constitution, but I am a simple fellow and I was brought up to believe that we do not have a constitution, so I do not see how a referendum can be part of it.

Mr. Robert Adley (Christchurch)

If my memory of those days is clear, the noble Lord Jenkins was Home Secretary in the then Labour Government and utterly refused to present to the House the Bill to allow a referendum. Is it not true that the noble Lord Jenkins, who is still a leading member of the Liberal Democrats, has done a U-turn, with the rest of his party, on this issue?

Mr. Heath

I think so.

I have here a quote from my right hon. Friend the Member for Finchley, who said in the debate on the referendum:

“It would bind and fetter parliamentary sovereignty in practice.” —[Official Report, 11 March 1975; Vol 888, c. 315.]

I agree with her entirely. It would, and I see no reason to change my view, or her view, at this moment or in the future. I do not believe in referendums as a means of government.

Mrs. Margaret Thatcher (Finchley)

I know that I inherited that position from Edward Heathmy right hon. Friend, and I loyally upheld it. Now, it looks to me as if three parties will be for a single currency and for sacrificing a great deal of the work that it has previously been the right of Parliament to do. How are the people to make their views known in [column 465]this absence of choice? That was the particular point. My right hon. Friend will remember that our right hon. Friend the noble Lord Hailsham, made an interesting speech on elective dictatorship.

Hon. Members


Madam Deputy Speaker


Mrs. Thatcher

Therefore, as he has been in the House longer than I have, will my right hon. Friend tell us how people can make their views known when all parties take the same view but each is divided?

Mr. Heath

This is an occasion which constantly occurs in parliamentary history.

Mr. Budgen


Mr. Heath

What a pity some people have such a limited vocabulary. People can make their views known in a variety of ways, as we know, and can judge candidates on other questions. If all three parties are united on the issue of a single currency——

Mr. Cryer

They are not united.

Mr. Heath

I said if they are united. I am talking about the party as a whole, not about those below the Gangway. If the parties are united, it is open for people to judge, on the merits of the candidates, whom they want to return. The Foreign Secretary quoted Lord Attlee saying that referenda are “for demagogues and dictators” . As in so many other things, although he has never had the credit for it, Lord Attlee was right. I strongly support the Prime Minister in his mission and I wish him every success.