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Lord Wallace of Saltaire: My Lords, I am fascinated by the statement that Britain has more military power than the rest of the EU put together. Can the noble Lord substantiate that claim?

Lord Willoughby de Broke: My Lords, like a Minister, I shall write to the noble Lord about it. How can it possibly be in Britain's interest to increase French influence over our foreign and security policy? How can it possibly be in Britain's interests to shackle itself with the EU's anti-competitive rules and regulations? How can it possibly be in Britain's interest to pay billions of pounds a year to be part of a Union with high unemployment and dwindling prospects? Those are questions with huge implications for our future freedom and prosperity. Yet they are questions that the Government seem too frightened to ask. The Bill introduced by my noble friend Lord Pearson will have to do the work for them.

12.36 p.m.

Lord Moran: My Lords, we should be grateful to the noble Lord, Lord Pearson of Rannoch, for introducing this Bill, and so giving us a rare opportunity to address the issue of what might happen if we were to leave the European Union. For a long time, the noble Lord has put considerable time, care and resources into making and publishing critical

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assessments of what is going on in the European Union. That has been of great value to the House and to the wider public.

As the noble Lord, Lord Willoughby de Broke, pointed out, the draft constitution put forward by Mr Giscard D'Estaing and his convention states, in part I, Article 59,


    "any Member State to may decide to withdraw",

and that an agreement should then be negotiated,


    "taking account of the framework for its future relationship with the Union".

That negotiation is likely to be somewhat one-sided, as it is laid down that,


    "the representative of the withdrawing Member State shall not participate in Council of Ministers or European Council discussions or decisions concerning it".

No doubt the draftsmen had the United Kingdom in mind. They seem to envisage dictating terms to the withdrawing member. Will the Government see to it that those words are deleted in due course?

The Government and the zealots of Europhilia maintain that withdrawal would be a disaster for the United Kingdom and that it is unthinkable that we should take that step. They imply that anyone who advocates that course must be not quite right in the head. They hold that we must remain full and active members of the Union and must join wholeheartedly in its future development. Ministers argue that that is the policy of sanity and good sense and is in the British interest.

The Prime Minister recently promised to try to build a pro-European consensus and to combat anti-European prejudice. Yesterday, he and Mr MacShane briefed Ministers who are to be deployed in a pro-European "road show" and to make the case for Britain being fully engaged in the European Union.

Ministers talk a good deal about preserving our influence in Europe. But it does not seem to me that we have much influence—nothing compared with that of the French. If we had, the EU would by now be a very different animal. Too often, influence appears to mean simply going round the conference circuit with suitable photo opportunities.

Is the enthusiasm of the Government for European integration in fact the policy of sanity and good sense? Consider the Union as it is. First, membership imposes a huge financial burden on our taxpayers. Our net contribution to the EU budget this year is more than 4 billion. My noble friend Lord Harris of High Cross has given us some alarming figures about the real costs. Then there is the CAP. It is too soon to assess the agreement just made by agriculture Ministers. We must hope that after 38 years of an immensely costly and inefficient policy, which has failed to give European farmers a good living, there is a real change for the better—not too much of a muddy compromise—and that it will not penalise our struggling farmers or put them at a disadvantage with overseas competitors.

The common fisheries policy is still unreformed. In our last debate on this subject on 5th February 2001, speakers from all sides of the House agreed that the

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CFP had been a disaster and was getting worse. The infant European army is unnecessary and is undermining NATO, set up by countries some of which spend hardly anything on defence.

There is notorious corruption and fraud in the Brussels administration. This resulted in the removal of M Santer's Commission. The Eurostat scandal suggests that matters might not be all that better today. Commissioners are being summoned and asked why they did not crack down on this earlier. They include Mr Kinnock, who I think has three relations on the European payroll—a modern version of "Happy Families".

We all know that there is vast over-regulation by the Commission, a never-ending stream of directives and regulations imposing a heavy burden on business and farmers. Even cleaning fluid, used to take spots off ties and skirts, has had to be taken off shop shelves, ear tags in livestock have to be changed at considerable expense two or three times, while horses now have to have passports. The Commission admits that there are now 97,000 pages of EU laws and regulations, forming the acquis.

Above all, there is the endless push towards a single European state, an extension of the "ever closer union" prescribed in the Treaty of Rome. There is the ratchet moving us towards this goal—sometimes small steps and sometimes large, like the Maastricht Treaty. Now we are faced with two huge new steps. There is the pressure to join the euro, which would lead to a massive loss of control over our affairs. According to a recent poll, this week the Guardian reported that only 21 per cent of the population were in favour of our joining.

Yesterday, I went to the magnificent exhibition in Greenwich about the first Queen Elizabeth. I noted that a small section was dedicated to what she had done in the field of finance and to the improvement of coinage. It was interesting that her restoration of the currency was reckoned by contemporaries to be one of her three greatest achievements and recorded as such on her tomb—a remarkable contrast to the actions of the present Government in trying to get rid of our currency.

We now face the draft constitution. I was struck that the Economist—hardly a flagship of the Eurosceptic point of view—described the draft constitution recently as,


    "a lamentable piece of work",

and,


    "a blueprint for accelerated instability".

It continued:


    "The Union's governments should take it up for exactly as long as it takes to dump it in the nearest bin".

Strong words from such a respected journal.

I noted an article in The Times on 25th February by Rosemary Righter which stated:


    "The draft is so frankly and robustly integrationist that, unless it is radically amended, its effect will be to strip national self-government of all but residual meaning".

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We all like to control our own affairs but when we become very old we may become incapable of handling them and others may have to deal with them. Do we think that this country has become so senile that it can no longer run its own affairs and must allow others—the Brussels bureaucracy—to do so? Should not the British people be asked about that?

Looking at all this dispassionately, is it not reasonable to consider that those who support the way in which the Union now functions and favour rapid progress towards the disappearance of the United Kingdom and the establishment of a single European country, in which we should be a peripheral province only, are precisely those who, on any normal judgment, appear irrational, and that this is not true of those who argue for the preservation of an independent United Kingdom with a full trading relationship with Europe but without the enormous disadvantages involved in full membership? It is galling to see that Mexico now enjoys just such a relationship with the EU while we do not.

It is of the greatest importance that we should have a thorough, impartial and well-informed study of what detachment from the Union, in whole or in part, would mean for this country. I do not suppose that this Government or any other that is in sight will do this, although of course they should. I believe that in those circumstances, the best way forward might be for us to set up a Select Committee of this House to consider thoroughly and to report on the implications of acting in accordance with Part I, Article 59 of the draft constitution. Such a committee must command confidence and be as balanced and impartial as possible.

A good precedent was the Select Committee on the 1996 Inter-Governmental Conference. At the instigation of, I believe, the noble Lord, Lord Pearson, three Eurosceptics were co-opted to this committee to balance the Europhiles—that is, the noble Lord, Lord Tebbit, the noble Lord, Lord Stoddart of Swindon, and myself as a Cross-Bencher. It worked well and we all signed the report which was, I think, a useful one.

Such a committee established now could hear evidence from experts in all the relevant fields. A report on these lines—calm, dispassionate and authoritative—would be an enormous help to all those considering our future relationship with Europe and would enable all of us to judge whether withdrawal would be a catastrophe or bring benefits to this country. I commend the idea to the House.

12.47 p.m.

Lord Vinson: My Lords, I, too, am very indebted to my noble friend Lord Pearson for introducing this historic and timely debate. The future governance of this country is of profound historic significance and ratification of the new European constitution in anything like its present form would be the end of Britain as a self-governing country.

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It is strange how Mr Blair and his Government want to tell us about the regime change in Baghdad, yet how little they wish to talk about the regime change in London and Brussels. As other noble Lords have said, we witness the destruction of Britain by stealth. Throughout my lifetime I have witnessed the pursuit of national political idealism three times and seen its subsequent costly failure.

First, there was the German pursuit of national socialism—fascism—which culminated in the last Great War. Overarching that period was the Soviet pursuit of communism and we all know the tragedy that brought to millions. Subsequently we saw in Britain the pursuit of socialism and the national ownership of the commanding heights of the economy. We now know clearly what dis-benefits that brought.

So here we are in our own period of history watching the pursuit of internationalism and—in its more local form—Europeanism, mostly promoted by those who, with the best of intentions, somehow believe that tomorrow's form of government must be better than that of today, and government by strangers far better than government by ourselves. The nirvana of Euro-governance is, I predict, yet another false dawn.

Sadly, history is increasingly undervalued in our schools, but it remains true that those who do not know where they have come from really do not know where they are going. Our own pattern of self-governance with its own judiciary may not be perfect by any means, but to hand the governance to others, and with it effectively destroy the mechanism that enables change, is, in my view, a recipe for social and political unrest of the first magnitude.

Those who would push for an ever closer federal Europe echo the belief of its early founders that this would prevent war. But such belief is founded historically on totally the wrong assumptions. Wars between democracies have yet to happen. Wars are caused by political or monarchic dictators. Civil strife, on the other hand, is caused by the frustration and inability to right wrongs. This is the essential weakness of the European Union, which has moved from a simple trading relationship to one that merges national, economic and political sovereignty into a bureaucracy virtually immune to influence.

Democracy as we know it is a very frail plant. Some say that it only just works because of a residual authority from a previous autocracy; others that it is a charade and that it is not really democratic at all in the widest sense. But whatever its imperfections, it does give the electorate a safety valve. They can, by voting in or out the elected representative they know by name, effect to some extent the changes they seek. Not so the deeper we go into the governance from Europe. The democratic deficit is inherent in its structure.

If one stretches that democratic elastic too far, it will snap. Currently we have roughly 65,000 voters per MP. We have around 600,000 voters per Euro MP, a constituency 10 times the size. Most voters will never meet him. His constituency is too big for him to make effective personal contact, and all the harder when he is drawing his expenses in Strasbourg or Brussels.

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Every government since 1975 has diminished, almost by stealth, the powers of the UK Parliament in favour of ministerial power exercised in camera throughout the European institutions: the Council of Ministers, the Commission and the trans-national bureaucracies of the EU.

Over 55 per cent of the legislation that affects Britain is now initiated or authorised in Brussels or Strasbourg with all the rigid inflexibility of a Soviet central planning regime by another name. Democracy needs responsive government. The democratic elastic is already stretched by a factor of 10 and surely it will eventually snap.

Just over 200 years ago, our own American colonies declared war against us, their mother country—their slogan: no taxation without representation. History may not repeat itself exactly, but human nature does not change. The same conditions are inherent in the euro decision, which is really about democracy, accountability and patriotism. A government which loses control over the economy eventually loses control over everything else. As powers move up to Brussels and minor powers move down to the regionalism that is deliberately designed to weaken national government, nothing will be left for Parliament to do but argue over the price of dog licences. For MPs to vote to transfer even more power to Brussels must be the finest example ever of turkeys voting for Christmas.

If we were getting good governance from our EC Ministers it would be possible to argue that the present system works. Sadly, many of our elected representatives at all levels of government are unaware of the realities because they know little of the real world they govern. I have no doubt that they are motivated by the best of intentions when they nod through EC legislation, but few of them have come up against its mind-numbing realities.

Nothing illustrates this better than real examples of the endless regulations designed to harmonise economic activity throughout Europe and, in the name of uniformity, introducing unnecessary conformity. For example, throughout the British Isles over thousands of years, farmers have buried their dead stock on their land in the same way that you would bury a family dog at the bottom of the garden. But now we have a new EU regulation that forbids the burial of sheep and insists that these must be incinerated. On a hot summer's day, a farmer has to stop what he is doing, load the stinking carcass into the back of his van, cover it as best he can and then cart it, at great cost in time and money, 30 or so miles to the nearest incinerator. When he inquires what is the malady this regulation is attempting to put right, he is assured that no water courses in Britain have been affected by the practice of burying stock, but that the high water table in Belgium, Holland and some other countries makes the practice undesirable. Our burials could hardly poison their water.

If ever there was a case for subsidiarity and a national interpretation of the rules, this is one. But, no, it was nodded through as a gesture of harmonisation

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and compatibility with our EU neighbours. It is a totally unnecessary and costly infliction for which there is no arguable need.

Such examples could be repeated a thousandfold. They really illustrate the kind of costs falling on the United Kingdom as a result of membership and the increasing harm done to our economy. Only last week we had a projected and likely to be implemented new European directive on medical clinical trials. In Britain, the scale of publicly funded clinical research dwarfs anything in Europe and the proposed rule would barely affect other countries, but it would affect us. I shall quote from our own Medical Research Council:


    "The adoption of an EC single model could double the amount of paperwork involved in running clinical trials and the extra costs of bureaucracy could seriously delay medicines coming to market. It would particularly affect the early stages of bio-science research . . . it could strangle medical research".

Have we a problem with the present arrangements in the UK? We have not. But how many of our MPs and Ministers are personally affected by this and other numerous, nonsensical regulations flowing out of Brussels? Blindly, they vote on.

When Dean Swift wrote Gulliver's Travels, an allegory on the religious and other regulations of the time, he said


    "No one silken thread held him down, but a thousand made him immobile".

It is the cumulative effect of regulations—designed to be interpreted by a Napoleonic code where the law is aspirational, but reinterpreted and applied in our traditional manner where the law is mandatory—that is so mind-numbing and so job destructive.

Over 100,000 new regulations have poured from Brussels, so many that even the Government are unable to provide a central record of them. To make matters worse, most of those regulations have no sunset clauses and no provision for review.

In this country, one used to be able to put right bad regulation. A constituent could see his MP, who in turn would arrange to see the Minister responsible. He and his department were responsive to constructive criticism and mostly wrongs were righted. That is not so today. Critical complaint is no more effective than punching a jelly, resulting in total frustration and resentment, and sowing all the seeds of potential civil discord. Is it surprising that people are increasingly voting less? They are becoming disconnected from the institutions that are supposed to serve them.

Our citizens are beginning to seethe and it is not surprising that every poll shows increasing antagonism towards greater Euro-federalism and an awakening concern about our loss of national sovereignty. One size of government fits no better than one size of interest rate, and the democratic deficit implicit in Euro-federalism sows in itself the destruction of the entire concept—just as, recently, the Iraq War exploded the myth of a common foreign policy.

The ridiculous thing is that none of this is necessary. If we look at Canada, it has maintained its political and economic sovereignty, along with its own

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currency. It remains at peace, with open trading borders, with the United States. It is a perfect model. We could have precisely the same arrangements. Europe needs us rather more than we need it, a point that has been well made by other speakers. National self-interest would ensure the continuity of our trading arrangements. What is more, there would be no massive flow of cash from this country as our budget contribution to the EC—money used to finance projects of low utility where the matching fund concept encourages at home pork barrel politics.

That brings me to the central issue of this debate: the taboo subject of the repatriation of powers to the United Kingdom; powers that were given away without proper consultation. Indeed, misinformation was given to the British public in the first place by the former Prime Minister, Sir Edward Heath, as has already been made clear in the debate.

On all fronts we await the conjectural economic benefits that were promised to us on entry. Even Gordon Brown, in his speech on 17th June, said:


    "The promised benefits of a European single market have yet to materialise . . . the EU needed to open up trade and to liberalise its markets to deliver them".

Dream on, Peter Hain—your dreams are turning into a nightmare. The conjectural benefits will remain conjectural. The concept can never succeed—it is founded on a false premise.

Meanwhile, while we retain the remnants of our independence, contrary to what all the pundits forecast, we are manifestly doing better. We have already given away, for example, not only our fishing industry but numerous political, financial and social freedoms which, previously regulated at a sensible level, made this country a very special place in which to live and work and, not surprisingly, attractive to others.

We are now pressed to accept a European constitution which would override our own constitution and create a country called Europe where we would be governed by continental politicians—strangers to the British public—who, once elected, even if corrupt, could not be voted out of office. We would be completely at the mercy of an unelected European Commission and a new European law corpus juris, which, far from defending the freedom of the individual, is designed to ensure the supremacy of the state. We should ask the plane-spotters who spent five weeks of their lives in a Greek gaol facing charges that were never laid because of a lack of evidence what they think about European justice.

This country should not sign up to a premature federalism in Europe and become part of the rush for political integration which turns federalism into little more than a mask for a unitary super-state. The loss of self-governance would put at risk our distinctive political culture, and it is far from clear how long that culture would withstand subordination to a centralised rule-making agency which pitches its actions at the level of a common denominator.

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There is a limit to the degree that citizens will accept the subjugation of their interests to wider group interests. Democracy works only when it has the legitimacy of public approval. Far from ensuring European harmony, the EC contains all the ingredients for social unrest. The benefits of membership are conjectural and dubious; the disbenefits are manifest. Its economic situation is getting worse and can only get worse. It is yet another political dream doomed to fail.

I am convinced that any assessment would conclude that we would be better off out. What is more, we should get out before even more harm is done and before the situation gets even harder to undo. I hope that this debate will do something to save the independence of this ancient and wonderful country.

1.2 p.m.

Lord Beaumont of Whitley: My Lords, as the sole representative of the Green Party in this Parliament I should make it clear that what I am about to say does not represent Green Party policy, although it would be approved by most members of the Green Party.

There are a number of problems in making policies about the European Union once you are in it. For instance, the Green Party supports membership of the European Union but believes that it should be reformed in a large number of ways, many of which would be approved by noble Lords who have so far spoken in the debate. The problem is that there is not a hope in hell of any of these reforms actually happening.

Therefore, the policy of the Green Party as a whole amounts to my policy—that is, that we should get out as soon as possible. But, as other noble Lords have rightly said, this is not because we are anti-Europe. With my family name, I should certainly be part of and treasure the whole Christendom tradition of Europe—and I do. I do not believe that we are merely an off-shore island.

There is a perfectly good European organisation of which we are members—it has been too little referred to in the debate so far—and that is the Council of Europe. For some time I have had the honour and privilege of being the Liberal Party's delegation leader at the Council of Europe, which has been very worthwhile. The Council of Europe has enormous power to set things going, to help matters, to urge civil rights—of which it was the pioneer—and to support our heritage. It has all the power to do all the good things that Europe can do—and there are good things.

I would be the last person to deny that the Green Party representatives of Britain in the EU do anything but good— in fact, they are an enormous power for good—but the Council of Europe has the kind of pattern that we need. The objection to the Council of Europe always used to be that it was a worthy body but it had no teeth. Now that we are in a body that grows more and more teeth every month, I am not sure that that particular criticism carries much weight with either your Lordships or the citizens of this country. We need rather fewer teeth. We do not like the teeth—they bite, and they bite in the wrong place.

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It is time that we looked at this problem seriously; it is time that it came to the forefront of political life in this country; it is time that we looked at the whole proceedings in relation to what we should do if we did decide to get out. That is what the Bill is about and what the debate is about. Although the debate has ranged much wider than that, I shall not fall into the trap of ranging wider—particularly at this time on a Friday.

I welcome the Bill enormously and I hope that the Committee of the Whole House which deals with it will do something really worth while to enable this country to make up its mind what it wants to do about the situation in which it finds itself today.

1.7 p.m.

The Earl of Liverpool: My Lords, one of the advantages of being the last speaker before hearing from noble Lords on the respective Front Benches is that one has the benefit of listening to your Lordships and gaining a consensus view of the debate. My noble friend Lord Pearson must be delighted that he has unanimous support for his Bill. The disadvantage is that most of what I wanted to say has been said already. However, I make no apology for saying that I believe there is nothing like a good story oft repeated, and so I shall battle on.

I join with other noble Lords in thanking my noble friend Lord Pearson for introducing the Bill. His speech was masterly. This is a sensitive and important subject which has the tendency to excite passions and his voice was the voice of sweet reason.

The only purpose of the Bill is to require "UK plc" to do what any responsible company would do before taking a major business decision; namely, to analyse and consider all the options and implications before deciding what to do next. Indeed, if a substantial public company did not do so before making fundamental policy decisions, shareholders and the City generally would be justified in sanctioning, or even sacking, the chairman and directors responsible.

I assume that we do still have an option. If we do, it seems to me that there is an absolute requirement to pass the Bill and to get started on the research. Future generations would be right not to forgive us if we did not look very seriously at all the alternatives before taking the next irrevocable step. That is the proposition on which I believe my noble friend Lord Pearson bases his Bill, so I hope that the Minister can give a straightforward answer as to whether we still have an option.

I believe much of the reason my noble friend feels this Bill is necessary is contained in a report which appeared in the newspapers only last Monday. It was about how Edward Heath, as he was then, deliberately misled the people of this country in the lead-up to the referendum of 1972. This point has been raised by other noble Lords but I will quote briefly from the article:


    "Civil servants were engaged in a dirty tricks department of the Foreign Office to cover up the threat to sovereignty and provide rapid rebuttal of anti-common Market arguments".

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It goes on to say that a list of 200 files recently released at the national archives,


    "show that staff were drafted in from another secret unit, the Information Research Department, that for 20 years of the Cold War had been fighting a . . . covert battle against communism".

We must guard against anything of this nature happening in the future. We must not allow the people of this country to be hoodwinked a second time.

We now have a European constitution which our Government, led by Tony Blair, will sign up to. We are told there will be elements which will be "red lined", but we know from past experience that this means very little and the Council of Ministers will reject most, if not all our arguments so, after much huffing and puffing, and without giving the people of this country a chance to voice their opinion through a referendum, we will be signed up to a federal European constitution. I am sorry, my Lords, I used the "F" word, but I just could not help myself.

We have managed for thousands of years without a written constitution, and if we look back at history, we have not done too badly as a result. So why would it be in our interests to sign up to this one, which has been designed by foreigners and without the consent of the British people? Where will our Royal Family stand in the order of things if we do? Will the Queen be above the constitution or not? I believe we need a very clear answer to that question, and I hope the Minister can respond to that when she speaks.

The proposed constitution is a much more important matter than whether we join the euro, but Mr Blair will deny the public to have a voice on it. Once we are signed up to the new constitution, there will be no going back, so the question of the euro becomes almost academic. I believe Mr Blair knows that only too well.

We have already lost nine-tenths of our rights under our unwritten constitution. One of its main principles is that no Government have the right to bind another. The people have the right to choose who governs them every five years, but this right is fast being eroded. Nowadays so many of our laws are imposed upon us as a direct result of directives from unelected bureaucrats in Brussels. Harmonisation of interest rates and tax will mean that no matter which party governs us, 70 or 80 per cent of all important policy-making decisions will be decreed from Brussels and Strasbourg, as has been said by other noble Lords.

This brings me to the positively Orwellian aspect of the workings of the European Parliament. For reasons which I do not fully understand, it is decreed that the Parliament will meet for approximately half the year in Brussels and the other half in Strasbourg. This inevitably gives rise to the need for accommodation requirements for Commissioners, MEPs, their researchers, secretaries, and so on, in both cities. Quite apart from the absurd logistics of moving the whole apparatus around, it makes it very expensive and to some extent explains why it costs over 1 million to sustain one MEP for one year.

So many extraordinary figures emerge as a result of this crazy way of operating, but I read one the other day which I should like to share with your Lordships.

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The library which serves the European Parliament has to be moved when the politicians decamp. If you take the cost of operating the library and divide it by the total number of books requisitioned each year, it works out at a cost of 48,000 per book. I find that an incredible and shocking figure.

I turn to another aspect of the EC that baffles me. Who will pay for the 10 countries which are soon to join, bringing the total to 25? It is a recognised principle that the countries which can afford to pay do so, and the rest receive. Our net contribution to this club, the rules of which we do not appear fully to understand, is approximately 4 billion per year, as the noble Lord, Lord Stoddart of Swindon, explained. That is equivalent to about 11 million of taxpayers' money leaving our shores every single day. What do we get in return for this? And how many new hospitals could we build here with that money?

The real question of who will pay for the 10 eastern European countries remains a mystery to me. I do not see any substantial contributors to the club's coffers among them, so presumably our contributions will have to go up. Or perhaps the real truth is to be found in a quote from Mr Romani Prodi, reported in the American magazine National Review on 5th April this year. He said:


    "I keep telling the applicant countries in Eastern Europe that in the long run they will not be able to seek prosperity from a United Europe and security from Europe".

This is certainly not the expectation of the applicant countries in my experience, so perhaps Mr Prodi should try a little harder to get his message across to them.

I now pose a question to which I would dearly love the answer: why do we persist in our efforts to join a club which many believe is heading for "skid row"? Even France's most prestigious think tank, L'Institut Francais des Relations Internationales, has concluded that unless it radically changes its policy, the EU will fail totally to rival the United States and will soon enter a downward spiral of relative economic decline. My noble friend Lady Cox has already referred to its report, but I make no apology for repeating some of her comments, which are so fundamental to this debate. It concludes:


    "The enlargement of the European Union won't suffice to guarantee parity with the United States. The EU will weigh less heavily on the process of globalisation and a slow but inexorable movement onto 'history's exit ramp' is foreseeable".

Why does it come to that conclusion? It forecasts that by 2050, Europe's share of world trade will shrink to only 12 per cent against 22 per cent today and the euro will be regarded as a second-class currency. Over this period, North America will maintain its technological hegemony and Greater China, including Taiwan, will come to account for almost a quarter of the world's economy. It estimates that by 2050 an EU of 30 states will have a growth rate of 1.1 per cent, the North American free trade groupings 2.3 per cent and Greater China 2.6 per cent.

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The institute blames Europe's problems on two factors: demographic decline, with a fall in Europe's active population from 331 million to 243 million, and the likelihood that North America, the "locus of innovative activity" will continue to suck in the lion's share of the world's savings.

These are dramatic pronouncements by any standards,particularly coming from the IFRI. They bring me to the theme that I developed in my speech on the same Bill when we debated it a little over three years ago.

I believe we are an outward-looking island. We have strong ties with Europe but we also have strong ties with other parts of the world. Why oh why do we not have a very serious look at the possibility of joining NAFTA and entering a free trade agreement with our European partners. They assuredly need to trade with us just as much as we need to trade with them, so I do not believe here would be any problem there, and we could be the bridge into Europe for our American and other allies and friends around the world.

We could learn a lot from Mexico—


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