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6.51 pm

Mr. Ian Davidson (Glasgow, Pollok): I note that this is not one of our best attended debates—and not just because I have risen to speak. This subject has not commanded the interest of the vast majority of our colleagues because it has not commanded the interest of the vast majority of our constituents. In such circumstances, it is clear that little enthusiasm is felt for a decision to abandon control over our economic affairs or to lose our currency without compensating gains. If the Government have a referendum without having built enthusiastic support, they will lose. In that referendum, many people will take the opportunity to kick the Government. As a friend of the Government, albeit a critical one on occasions when they deserve it, I hope that they will recognise that a referendum cannot be won before the next general election and should not be held. They should make an announcement accordingly.

Trust in politics has been damaged over the past few weeks and days by recent events and the spin and counter-spin. Because of the excesses of spin and the reduction of trust in politics and politicians, we are now less likely to have a referendum. How ironic it is that a key part of the new Labour project has been derailed by the excesses of new Labour practices. Various phrases about reaping and sowing spring to mind.

Three issues divide the House and the British electorate. The first is whether people are for or against the Labour Government, the second is whether they favour British membership of the EU and the third is whether they favour Britain joining the euro in the short term. Only a few hon. Members have been prepared to raise their heads above the parapet and make clear their views on those issues. It is also clear that Labour Against The Euro is the only group that is in line with the majority of the British population on those three issues, being generally supportive of the Government, generally supportive of membership of the EU and generally opposed to joining the euro in present circumstances.

I hope that my colleagues will see the error of their ways and recognise that a referendum would be inappropriate at present. As for those on the Opposition Benches who do not presently support the Government, we have some vacancies remaining on our Benches. For

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some, we are full up, but if Opposition Members care to apply to me personally I will give them my view on whether we will accept them.

Mr. Vaz rose

Mr. Davidson: My hon. Friend can stay. I am even prepared to let him intervene.

Mr. Vaz: I was not applying for membership of my hon. Friend's club. The Government's position is not that we should have a referendum now but that we should have an assessment of the five economic tests at an appropriate time and then have a referendum.

Mr. Davidson: Some people believe that, and I shall say more later.

One of the more attractive elements of new Labour's appeal at the general election and before—to me and to others—was its claim to be leaving dogma behind in favour of what worked. I welcomed that as a change from our enthusiasm for privatisation and the involvement of the private sector in public services. However, we now see an ideologically driven commitment from many in new Labour to the EU and the euro, irrespective of the reality of the position.

Many hon. Members, and those who have left Parliament, have been ideologically committed to the EU irrespective of the objective realities. However, that position was not ignoble for those who grew up and had their formative experiences in the period immediately before and during the second world war. To be in favour of a united Europe that would banish war in those circumstances is a respectable and honourable position. However, we sometimes fail to recognise that the war started more than 60 years ago. Those of my colleagues who are still trapped in that mindset should reflect that the world has moved on.

I regret that some people whom I respect have failed to move on and recognise that the world is now, paradoxically, a bigger and a smaller place. We should have links that go wider than only with our neighbouring countries in Europe. Those of us who take the same view on the euro have been described scathingly as little Englanders. I am prepared to accept that I am vertically challenged, but I find the accusation of being an Englander unfortunate. Indeed, I welcome applications for founding membership of the Scotland-Brazil friendship society for the next few days.

We should not reject little Englandism in favour of little Europeanism. I have been very involved with the Japanese Parliament and found great similarities between our two countries, including our relationships with the United States and with our immediate neighbours. We need to try to build positive links to improve many areas of the world. To look inwards only towards Europe is a mistake. We have had insufficient discussion about the impact of the EU on the third world and I am glad that some hon. Members have mentioned it today. The EU, as presently driven, is too inward looking.

We should have much less dogma in our discussions in Europe, and I turn now to the point made by my hon. Friend the Member for Leicester, East (Mr. Vaz).

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Paradoxically, I support the Government's position more than they do. I believe that the concept of economic tests is correct and not just a fig leaf. We should consider joining the euro if it is clearly and demonstrably in our economic interest, because not to do so would be to do a disservice to our people. I also believe that the converse is true. I believe that joining simply because of dogma, irrespective of the economics, would be absurd and dishonest and would do our people a disservice.

I feel increasingly that the arguments advanced in favour of the referendum and the tests were no more than stalling mechanisms to get us through a difficult period electorally. It seems to me that there is a sixth test—that the Government intend to hold a referendum whenever they think that they can win it. That does not strike me as the most honourable stance. I would welcome a clear and unequivocal statement from the Government that they will maintain their previously stated position—that the economic tests must themselves be met clearly and unequivocally. Let us have no ifs and buts, and no "on the one hand and on the other hand." I am sure that if the Government adhered to that standard of proof there would be no referendum before the next general election.

It is interesting to note that those who are keen to join irrespective of the economics argued for a long time that if only the Prime Minister gave a lead, the polls would resolve themselves and there would be a swing in their direction. They said that there would be such a large majority in favour of joining that the Government could do it. I do not think anyone could reasonably suggest that the Prime Minister has not come off the fence: it is clear that he favours joining the euro.

There was some discussion earlier about whether the launch of the euro had been a success. It is worth looking at how the polls have moved since the turn of the year. MORI reckons that there has been a 6 per cent. increase in the no vote since then. ICM refers to an increase of 8 per cent., NOP to one of 11 per cent. and GFK to one of 14 per cent. That is despite the fact that the Prime Minister has given as much of a lead as I think he reasonably could have in the circumstances.

I was, in a way, heartened by the speech of my right hon. Friend the Member for Hartlepool (Mr. Mandelson), ever the optimist in these matters. He said that the introduction of the euro had not been a disaster, suggesting that in a sense that in itself was enough for a celebration. According to today's edition of The Daily Telegraph, however, Belgian euros are being refused in France and French euros are being refused in Spain. That is hardly a sign of a raging success.

None of that, of course, touches on the undoubted price inflation that we have seen. My right hon. Friend, regrettably, omitted to mention that the latest opinion polls demonstrate—as I understand it—that more than 55 per cent. of Germans want to abolish the euro and return to the deutschmark. If that is success, by all means let us have more of it, so that we can knock this project on the head in the short term.

It is sad that such an enthusiastic supporter of the euro should be encouraged by temporary fluctuations in exchange rates. Three rollercoasters—the euro, the dollar and the pound—are moving at different speeds and on different levels. The suggestion that the fact that they have moved nearer to each other recently, as they occasionally have previously, indicates that everything is coming right

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strikes me as an attempt to clutch at straws and to draw comfort from instability. In the circumstances, that hardly seems appropriate.

I recall when the Tories took us into the exchange rate mechanism, a move supported by the then Labour Opposition and enthusiastically endorsed by the Liberals. I think we all remember what a raging success that was. It demonstrates that if all the high heid yins are agreed on something, there must invariably be cause for concern. When the elites agree, the answer almost invariably lies somewhere else.

I mentioned the sixth test, whose existence seems increasingly clear to me as time goes on. Let me now ask whether it is necessary for us to be in the euro to have influence in Europe. Much has been made of how we can achieve such influence by magical means. I was pleased to note from the website of my right hon. Friend the Member for Hartlepool that he acknowledged the position: there we find the statement

I must confess that in the event of a clash between the my right hon. Friend and the Prime Minister, I tend to side with the Prime Minister. In an interview with La Repubblica, which I will not quote in the original Italian—I would if I could—the Prime Minister said specifically that Britain did not need to be in the euro to be a leader in Europe. As I said earlier, we should make it clear that we will not allow a referendum on the euro before the next general election. Once that issue is out of the way, we shall be in a much better and clearer position from which to move forward—to negotiate, and to discuss how we want to play a part in Europe. As long as the issue is hanging there—as long as the "Will they, won't they?" question remains—all sorts of other issues are clouded.

I do not doubt that it is in our interests to remain engaged in Europe, and in debates on Europe. It is one of the Government's great successes that we have engaged in Europe much more positively than the last Government did. My hon. Friend the Member for Leicester, East and his predecessors and successors engaged on a number of issues. Although—as my hon. Friend will be glad to learn—I did not always agree with their conclusions, theirs was a positive rather than a negative frame of mind, and I think that great strides have been made.

We should, however, consider what being good Europeans really means. In a number of contexts, the impression is given that the only way we can be good Europeans is to make concessions. Gibraltar was discussed earlier today. In that context, it is being suggested that we can be good Europeans only by selling people out or conceding ground. We ought to be much more robust in dealing with our European colleagues. Can anyone imagine for a moment that the French, or the Spanish themselves, would behave as we have in equivalent circumstances? We have consistently sought to make concessions and to find a middle way—and trying to find a middle way always encourages the other side to come up with something even more unreasonable in order to leave us seeking triangulation.

If we were more robust, we would gain more respect than we have in the past. The record of the European Union on a number of important issues—issues that were

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important to us—has not been all that great. I look at the Liberal Democrats, and I think of fishing. What have the European Union and the common fisheries policy done for the areas that many Liberal Democrats represent? Not a great deal. If I am not mistaken, not so long ago the Liberal Democrats wanted us to withdraw from the common fisheries policy.

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