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Lord Shore of Stepney:
My Lords, the debate we are having on the Second Reading of the Bill is appropriately going wide of the actual contents both of the Bill itself, which we know are negligible, and of the Treaty of Amsterdam. I find no reason to object to that. On the contrary, I welcome it. We will have time enough to look at the details of the Amsterdam Treaty and to weigh up the different claims of "we have no reason for concern or worry" and the opposite anxieties that have been expressed about the further erosion of our own self-government that is entailed in the extension of competence in the treaty.
I am glad that my noble friend who opened the debate encouraged this rather wider scrutiny. He said that we should set the treaty--he tried to do so himself--in the wider context. That is absolutely essential if we are to understand what has happened to Britain and to Europe in the past 40 or 50 years, and very much so in the past 10 years, of development. I have followed events in Europe closely over my political lifetime and I have had the advantage of considerable direct contact with parliamentarians, Ministers and Commissioners in the European Union. In the 10 years that preceded my entry to your Lordships' House, I served on the Select Committee on Foreign Affairs in another place, under the excellent chairmanship of the noble Lord, Lord Howell of Guildford, who I am glad to see is in his place and who will be speaking later. I often put the question which I think has to be answered most clearly today: where are we in terms of the development of the European Community and our own nation; where are we going; what is the destination? I found that virtually everywhere but in London people would say, either informally or occasionally quite publicly, that the purpose and goal is to create a new European state. It is perhaps only here, and for reasons which we may have to examine very carefully, that political leaders cannot find it in them to face the British people with the truth about what is involved in the European Community.
No one should doubt that even from the beginning, from the High Authority set up in the European Coal and Steel Community in 1948 and the European Defence Community and European Political Union which were aborted in the 1950s, this thrust towards a new state was there. If anyone has any lingering doubt then please go and read the admirable memoirs of Jean Monnet. In many ways he was the intellectual architect of the whole enterprise. He himself quite openly spoke about and set up the action committee for a United States of Europe as long ago as 1956.
In those earlier years there were quite powerful counter-forces. Above all, there was the opposite vision of a Europe des patries. That was pushed forward by General de Gaulle. For a considerable period of time, although the competence of the European Community and its institutions gradually spread, the countervailing forces of a Europe of nation states--the desire to maintain national independence on many matters--prevented, as it were, the thrust towards a European state from becoming the dominant force. Indeed, I would say that it was recessive until that fatal year 1989. We all know what changed then. There was a change in Community terms in the form of the Maastricht Treaty. But what preceded that and what gave a particular thrust to it was the collapse of the Berlin Wall, the reunification of Germany and the disintegration of the Soviet Union.
Then there was that remarkable, historic change in, above all, French policy on Europe. It was the total abandonment by Mitterrand of the Gaullist concept of a Europe des patries and a passionate thrust by the French to embrace as much as they could of a new Germany, 80 million strong, in the meshes of a new, larger and more embracing European treaty. Was it coincidence or good fortune, because at the same time they had the most powerful president of the Commission--which had an openly federal agenda--working alongside them in the person of Jacques Delors, who was by far the most powerful European Commission president since Walter Hallstein? Together with Chancellor Kohl they drove forward the European project into the Maastricht Treaty.
Let us just consider for a moment what it embraces. I am quite entitled to talk about Maastricht because the Amsterdam Treaty is simply a minor adaptation of what is in the Maastricht Treaty. That treaty establishes a European citizenship. We know a little about its rights and we shall hear more as the years go by about the obligations of that citizenship. It established economic and monetary union and the commitment to a single currency. It created the two new treaty pillars to encompass both internal domestic legislation, including civil law, immigration and aspects of policing, and external, foreign, security and defence policies.
This marked a major tilt in the balance of forces within the European Community. From that moment onwards it is impossible for any serious student of European affairs to deny that the reality of Europe is now its programme towards a single state. In a sense, the preamble to the treaty itself marks it. It says,
"This Treaty marks a new stage in the process of creating an ever closer Union among the peoples of Europe".
They very nearly actually stated something which was even firmer. The final Dutch draft of the Maastricht Treaty, which was considered in Maastricht by the Council of Ministers on 8th November 1991, just before signing, had these words in Article A, which is the opening article of the Maastricht Treaty:
"This treaty marks a new stage in a process leading gradually to a Union with a Federal goal".
That dreadful "federal" word was used again in Article W which said that there would have to be an IGC within two years of the signing of the treaty so that further progress could be made in the direction of integrating the European Union.
My understanding is that it was only a desperate, last-minute plea by British representatives in Maastricht which secured the removal of that dread word "federal".
Lord Garel-Jones: My Lords, I am sure the noble Lord will be interested to know that only one country voted for the Dutch draft.
Lord Shore of Stepney: Only one?
Lord Garel-Jones: My Lords, only one country, apart from the Dutch presidency itself, actually voted for that draft.
Lord Shore of Stepney: My Lords, it was due to a rather desperate British plea to other friendly countries not to hideously embarrass us and imperil the process of securing acceptance of the Maastricht Treaty once they got back home.
One must consider what the commitment to a single currency and EMU involves. It denies a nation its own currency; it denies it its use of its own national, central bank; it has no control over the domestic money supply, and it loses, or has seriously curtailed, its right to borrow. I maintain that under those conditions a nation state can no longer function as an independent entity. At the same time the European Union, with its newly acquired single currency, its central bank in Frankfurt and its control over interest rates and exchange policies, besides its treaty control over public borrowing, takes on the power of a separate sovereign state.
The Amsterdam Treaty says nothing new about a single currency and EMU--yet there is an important addition, which is the adjacently negotiated Stability and Growth Pact. Under that pact it has now been agreed what punishments, mathematically computed, are to be inflicted on offending nation states which dare to borrow too much beyond the 3 per cent. GDP limit. Such a penalty would have had considerable significance for the UK if these arrangements had been in place and we had been a member of the single currency during the last parliament. Indeed, on the best calculations that I can make, Britain would have been fined £14 billion for its efforts to escape from the desperate difficulties in which we found ourselves after the collapse and withdrawal of the pound sterling from the ERM.
As it has been said, the Amsterdam Treaty itself advances further in the direction of a European state, particularly by strengthening the federal institutions of the Union, but also in its extension of treaty control over virtually the whole of the third pillar of the Maastricht Treaty.
Perhaps I may return to the main point that I am putting. The big picture is indeed the creation of a state. The ruling circles--the class politique--in the majority of the member states of the European Union are now openly committed to the creation of such a state. But we are not. Indeed, the whole idea of absorption into a European state is repugnant to the vast majority of British people. More--and very interestingly--political leaders of all parties who are broadly friendly and Europhile in their attitudes do genuinely recoil from the prospect of our absorption, via EMU and the single currency, into a European state. I would cite among others the former Chief Secretary to the Treasury, Mr. William Waldegrave, and, in the light of his recent statements, the noble Lord, Lord Owen, who was certainly an enthusiast during many stages of the development of the European Union. I would include in that category of basically friendly pro-Europeans who cannot stand the idea of being absorbed by a single currency into a European state the present Prime Minister and his predecessor.
The European state is, indeed, the dividing issue. So, what are we to do now that our European partners are clearly set on a different course with a different goal? Frankly, I think that our first requirement is to be honest about the whole development. There is a suspicion in the minds of many of our people that politicians of all parties find it difficult--and have found great difficulty over many years--to speak frankly about Europe and its true destination.
I recall two quotations which are worth citing. One was Prime Minister Edward Heath's assurance in the White Paper of 1971:
"there is no question of any erosion ... of essential national sovereignty".
I am afraid that that has been wholly disproved by events. The second quotation, to maintain a balance, was the assurance given by Prime Minister Harold Wilson in the 1975 referendum campaign that it was safe to remain within the European Community because:
"there was a threat to employment in Britain from the movement in the Common Market towards an Economic and Monetary Union. This would have forced us to accept a fixed exchange rate for the pound, restricting industrial growth and so putting jobs at risk. This threat has been removed".
I do not claim that there was any deception--I do not think that it was deliberate--but I do think that both of them misread and failed to anticipate the power of the thrust towards a single state in Europe.
Now that the issues are so much clearer, there can be no excuse for not telling the British people the whole truth about what is involved. I cannot abide--and the British people will not forgive--those often covert federalists who deny that the EMU/single currency project has any significant political or constitutional implications. We heard that statement solemnly made despite the overwhelming evidence to the contrary not long ago by the highest authority in another place.
Next, we must be honest with our European neighbours. We have been reluctant to be so, but since we are now pursuing different goals and since we are in a minority, we are obliged either to negotiate opt-outs in increasing numbers for ourselves or to hinder, obstruct and delay the rest of the European Community. The previous government found themselves in precisely that position over both the Maastricht and Amsterdam Treaties. Needless to say, it was not the only reason, but it was a powerful underlying reason, why our relations with our continental neighbours so markedly deteriorated. Those relations have somewhat improved, and I am glad of it. But I hope that we shall be able to sustain that position, but we shall be able to do so only if we have an open and honest understanding that we have reached the point where we can no longer go further into the project which the majority of our continental neighbours have set for themselves.
We must also be honest with ourselves. It is no good now for British Prime Ministers and Foreign Secretaries to say that they wish to "lead Europe" or that they want Britain to be "at the heart of Europe" when the majority of European states are now clearly heading for a very different goal--a European state--from that which we want for ourselves.
I do not want to end my speech on too negative a note. I am very much in favour of the most friendly relations and the maximum co-operation in the economic and political field with our European neighbours. My view of the future of Europe is indeed of a continent of democratic self-governing nation states working together to achieve greater prosperity for all their peoples and for peace and harmony in their interstate relations.
It is inevitable with so large an area being brought into the compass of the European association that some member states will wish to go for the goal of total integration, the creation of a new state, while many others will wish to hold back. For the first time--this may be the most significant part of the Amsterdam Treaty--the treaty itself, in its clauses on flexibility and "enhanced" co-operation, envisages the possibility of some states, the majority of states, moving forward in one direction while others remain permanently outside and do not share that endeavour. I do not think that flexibility is yet sufficiently well defined in the Amsterdam Treaty for us to be able to build on it, but the treaty gives us a new opportunity to achieve something more satisfactory for all of us--those who want to go forward into a European state and those who do not--than has so far been offered us.
I am not one of those who fear a strong new continental power on the other side of the Channel. If that be the wish, not only of their political leaders but of their peoples, we should not stand in the way of a European state. I see no reason why we should feel any more threatened or disadvantaged by its existence than Canada today feels anxious or threatened by its great neighbour to the south.
After the disintegration of the Soviet Union into 15 separate nation states and the collapse of Yugoslavia into five new sovereign republics, this is clearly not the age of the giant state--not even of the large but rather artificial federal state. It is in fact the age of the democratic nation state--over 200 of them now occupying all the different continents of the world. I believe that the United Kingdom and its people have the will, the self-confidence, the resource and the alliances to remain a leader and an exemplar to those states.
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