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Mr. John Smith: I must come back on that. Far from arguing that the defence issue was an irrelevance, I was arguing that it was vital.

Chris Grayling: The hon. Gentleman's point was that the Opposition were wrong in their view that it is essential to preserve Britain's national sovereignty in defence and foreign policy. He suggested that we should not see the formation of a European defence force as undermining NATO and undermining our ability to function in the international community as we have done for 50 years.

At this moment of all times, we have the clearest possible demonstration of why it is fundamental that Britain remains a sovereign nation, as we deploy our

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defences and take foreign policy decisions. We could not offer to the United States the level of unqualified diplomatic and military support that we have done in recent weeks if we had to take decisions about our foreign policy and our defence by committee across Europe.

I have always counted myself a firm pro-European, but in the past 10 or 15 years Europe has moved on, rather than I. [Hon. Members: "Quite."] I am still pro-European, but I am not in favour of the creation of a European megalith. Step by step, as we move from treaty to treaty, the process of integration develops, we hand over more sovereignty to an international pool, and decisions that should be taken in this country are taken at European level.

The pooling of European sovereignty belies the fact that if recent history teaches us one lesson, it is that nationalism in Europe is not dead and that the spirit of sovereign nations is not dead. If we subsume ourselves into a European superstate and continue to yield sovereignty in treaty after treaty, we will live to regret it. The Bill represents a treaty too far and should be opposed by the House.

8.59 pm

Mr. David Miliband (South Shields): Many speakers have promised to be brief and have then spoken for 25 minutes, so I promise not to be brief.

The perspective that I want to introduce to the debate is that of a convinced but frustrated pro-European—a European who believes that daily the case for Europe grows stronger, but also a European who believes that we have much work to do to bridge the gap between the potential of the European Union and its current performance. I do not believe that the EU is broken down—a view shared by both maximalists and sceptics. The EU is a child of post-war reconstruction adapting to the modern world. It is a dynamic process, not a static one. My case is not that the Bill somehow ends all my frustrations with the EU or solves all its problems, but that it sorts out some thorny questions that could block progress on the big issues if they are not dealt with.

I have considered carefully the arguments advanced by the Opposition on Second Reading and have listened to the debate today. I want to go through some of the arguments that they have put forward.

Mr. Keetch: The Conservatives.

Mr. Miliband: I beg the hon. Gentleman's pardon; I wish to speak about the arguments advanced by the Conservatives today.

First, the Conservatives have argued that the extension of qualified majority voting is somehow contrary to the national interest. The hon. Member for West Suffolk (Mr. Spring) said that he was against the extension of QMV in principle. But the best argument put forward by the Conservatives is that we have been outvoted on the issue of droit de suite. What are the facts about QMV, however? According to the figures that I have, in respect of the hundreds of decisions taken under QMV in 1998, we were outvoted only twice—on fewer occasions than France, Italy and Germany. In 1999, we were not outvoted at all.

Thanks to QMV, we have been able to secure the e-commerce directive and to liberalise some agricultural trade. We have even been able to override the proposal to

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label British chocolate as vegelate. So, QMV has its uses. I cannot agree with the hon. Member for West Suffolk that we should be against it in principle. Outside areas that are central to national sovereignty—tax, defence and so on—QMV not only makes sense, but can operate in British interests. After all, that is why the Government extended it in the 1980s. We will not win all the arguments, but enough of them to make it worth while.

Secondly, the Conservatives have argued that integration would put off east European applicant states, but there is absolutely no evidence to support that view. Those states will be much more reluctant to join a sclerotic EU that cannot work than one that can function efficiently. Thirdly, we have seen a lot of crocodile tears today about the common agricultural policy, but surely this is the greatest Aunt Sally of them all. Treaty reform is not needed to amend the CAP. As was argued earlier, the 1999 financial perspective started the process, and it will be continued. The truth of the argument about the CAP is that enlargement will force the pace of CAP reform, rather than such reform paving the way to enlargement.

I shall not speak in detail about the fourth complaint that has been made about the Bill. It was made on Second Reading by the hon. Member for Stone (Mr. Cash), about whose views I shall speak again later. He claimed that the Bill was a German plot. I do not think that that argument can be taken seriously, especially when one considers the facts. At the Nice summit, Chancellor Schroder put aside the opportunity to argue for greater voting weight for his country than for France in the Council of Ministers. He put aside his national interest in favour of the European one. That is the sort of grown-up politics of which we need to see more, because I think that the UK has something distinctive to offer to the development of the EU.

During the past three months, I have been participating in a group chaired by the Belgian Prime Minister. I shall continue to do so until December. The group is considering the debate on the future of Europe and how it should be structured in the run-up to the intergovernmental conference of 2004. I am delighted to say that Prime Minister Verhofstadt is coming to South Shields next week to test the waters on European issues and find out about local public opinion on some of the matters that we are discussing.

In the run-up to 2004, my belief is that the debate about institutions has to start with one about substance and policy. The task for the European Council is to start a process that tackles the delivery deficit as much as the democratic one. What sort of institutional reforms would achieve that aim? Now is not the time for blueprints, but I want to put down a few markers.

First, the IGC has been called partly to give meaning to subsidiarity. Our Prime Minister has proposed a political declaration policed by a second Chamber. Prime Minister Jospin has suggested a standing committee of national parliamentarians, and others have suggested clearer treaty language and sunset clauses in legislation. All those ideas are worthy of discussion. Secondly, the European Council also needs reform. The organisation of the presidency and the establishment of a political guiding hand from each country—a co-ordination council that meets regularly in Brussels—would also add to institutional effectiveness. Thirdly, we need to find a way of propelling forward the open co-ordination method that was developed at Lisbon.

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I see a key role for the European Commission in that respect. Finally, I think that there is a strong case for expressing clearly the aims, objectives and practices of the European Union in a single treaty. That European constitution could be the clear benchmark for judging the EU's actions. Since there are three years before the IGC, let us also debate whether European citizens and the connection between them and the EU's work might best be served by holding the legislative sessions of the European Council in public so that people can hear the arguments.

As a new hon. Member, I believed that the Conservative leadership election might lead to Front-Bench Members updating their thinking after Second Reading and developing a more pragmatic approach. I am sorry that the hon. Member for Stone is not present. On Second Reading, he was a humble Back Bencher who attacked his party for failing to offer an immediate referendum not on the Nice treaty but on "the whole European issue".

Pulling out of Europe is a long-standing passion of the hon. Member for Stone. In 1996, he introduced a Bill that provided for a referendum on withdrawal from the EU. A man should not be judged by his friends, but hon. Members will want to know that co-sponsors included Mr. Jonathan Aitken, Mr. John Townend and, intriguingly, the right hon. Member for Chingford and Woodford Green (Mr. Duncan Smith).

Little did I realise when I listened on Second Reading to the plea for a referendum on withdrawal from the EU that the hon. Member for Stone was auditioning for the Conservative Front Bench. He has achieved his aim. The leader of the Conservative party has said that the party should no longer be "monomaniac" about Europe. Yet he has promoted to the position of shadow Attorney- General—a post that includes a special remit to examine European policy—a man of whom the former Prime Minister, John Major, said:

The Conservative party may claim that its dogmatic days are behind it, but there is no clearer sign of its extremism than the fact that the keeper of the anti-European faith is now the keeper of its European policy.

I do not believe that the Bill is great or historic, but it is necessary. A united Europe, not only in the negative sense of living peacefully together, but positively, as a force for good in our own countries and in the wider world, is more necessary than ever. The Bill helps to make that possible, and I support it on that basis.

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