The Rt. Hon. Sir John Major KG CH

Tag: European Union

  • Mr Major’s Speech in Rugby – 26 April 1996

    Below is the text of Mr Major’s speech in Rugby made on Friday 26th April 1996.

    PRIME MINISTER:

    Let me touch on a number of things including prospects and some of the things I may say to you over the next few minutes may perhaps surprise you, but I hope pleasantly in a range of ways. Let me firstly just set out precisely where we are economically and how we got there.

    It is not all that long ago that we and the rest of western Europe, the United States, Japan, most of the world in fact, south east Asia perhaps excluded, were in the midst of perhaps the most severe recession that we had seen for 20 years or more. When we went into that recession, I made a promise to myself and to my colleagues that we have kept and that is vital for the future of our economy. The promise I made was this: we will do nothing during the recession that will mean when we come out of the recession we have laid the seeds for future problems. Time and time again that has happened in recessions, as economic cycle succeeds economic cycle since the War we have seen that problem. Recession, pressure, the Government takes action, it gets out of the recession but the seeds are laid for a fresh inflationary spiral and we go, after another move in the economic cycle, back into the same problems. How many times have we seen that happen since the War?

    I have had vivid experience of inflation. You have of course as businessmen, you know the perils of it, I needn’t spell them out to you, but I have to say to you, quite apart from the business perils there is a social implication to inflation as well that I feel extremely strongly about, too strongly perhaps you may feel but I will express it for you:

    If you have ever been in a position where you wonder at the beginning of the week whether your family can pay the bills at the end of the week because the prices are going up, then you begin to see inflation not as some abstract economic theory but as something that threatens the very security of the way you live so I loathe inflation and I make no secret of the fact that I loathe it and we have taken every precaution we can to prevent that inflationary genie escaping from the bottle again and what is the result of what we have done during the period of the recession. And I would like you to bear in mind when I say that that we have lived in the same economic climate as our partners in Germany, France and other parts of western Europe. What are our economic circumstances now?

    We have inflation under 3 per cent for the third successive year and it is still going down, we will hit our target of 2.5 per cent or less at the time of the next general election. Apart from the social implications, you don’t have to worry in your future planning in the way you once did about whether Your investments are going to soar in cost because of inflation or whether the projections upon which you based your investment will suddenly fall apart. That is the first point to be made.

    The second point is that a very unusual economic trick has been pulled. Not only has inflation come down but contrary to what we have often seen, inflation has come down in parallel with unemployment. Unemployment has dropped by three-quarters of a million in the last couple of years or so.

    What has happened elsewhere in western Europe in those countries in the same markets, in the same economic environment? As our unemployment has fallen steadily, theirs has gone up. If you look at Germany, their unemployment rising far higher than ours; in France, their unemployment round about 12 per cent, stuck, no sign of it coming down. We are below 8 per cent and falling. And neither is that a false measure. Not only do we have a lower rate of measured unemployment, we have a higher percentage of our workforce actually in jobs than any major economy across Europe through inflation below 3 per cent and falling and unemployment falling. There are not a lot of people in this room who will remember when that combination was as secure as it is at the present time.

    Has it been done at the expense of nil growth? We have had larger growth in our economy over the last couple of years than our competitors across Europe; that is going to be the case this year, it is going to be the case next year, so low inflation and falling, too high unemployment but lower than anybody else and falling and growth as good or better than any of the other European countries. What has happened to competitiveness? You know very well what has happened to competitiveness. We are now taking markets we haven’t had for generations in this country, exports are running at record levels. Go and listen not to what I say – I suppose there is an element of “well, he would say that, wouldn’t he?” Go and see what German industrialists and other people say, have a look at the booklets on your chairs and see what businessmen here and politicians and businessmen abroad have to say about the British economy. There was a time when we stood here and looked at the economies of our competitors and wondered how they did it. I wish the extent of fashionable opinion in this country would wake up to the fact that that is now happening in reverse; those countries abroad are now looking at Britain and saying: “What has happened to her? How has she suddenly produced an inflation record like this, a job-creation record like this, a growth record like this and increased her competitiveness?” so that as we meet here today, we are probably the most competitive industrial nation in western Europe.

    That is where we are, the question is what do we do with it because that factor is apparent. What we have built is the platform for future prosperity but the prosperity itself needs to be built and it needs to trickle down to the people up and down this country who by their efforts have played a part in creating the opportunities that now lie in front of us.

    We had to put up taxes, something I loathed doing but it was taxes going up or high borrowing and interest rates going up instead. But now we have begun to reduce taxes, the first tax reductions are in this month’s pay packet and they are well worth having. I hope we will be in a position to do more, as soon as we prudently can, we most certainly will.

    Let me touch on two or three other things:

    Peter mentioned the social chapter. That is one of the principal reasons why we are more competitive than other countries. Not the social chapter as it is but social expenditure as it is across Europe. Let me give you the figures:

    For every £100 in wages that a British employer pays, it costs them an extra £18 in employers’ national insurance contributions and on-costs of that sort. In France, Germany, Spain and Italy, it is between £30 and £45, a huge competitive difference.

    Why does the social chapter matter? Our political opponents say it is a set of principles – a set of principles like Cathy of Clade [phon] was conductor of music! It is not a set of principles. These are policies that you can’t opt out of once you sign the social chapter and the problem is not what is in the social chapter today, it is what would go into the social chapter once every European country was signed up to it and what would go into it is the sort of social provision that exists in the nation states of Europe but not here but that would come into the social chapter by qualified majority vote to diminish our competitiveness against our partners were we to be so foolish as to sign the social chapter. Let me give you a couple of illustrations:

    There are some very large companies in countries like Germany and Austria; if they had to make staff changes perhaps for an extremely good economic reason, they can’t do it without going through a works council if they have more than 5 employees. If you want to work overtime in the country of one of our European competitors, you actually have to get permission from the government in order to work overtime. Can you imagine the questions? “Are the staff fit? Is it Sunday? How much are you paying? What is the reason for this?” By the time you have sorted all that out, the export order for which you wanted your workers to work overtime has gone to Britain I hope, because we are beginning increasingly to be able to [indistinct].

    Let me just say a word about taxes:

    All the figures upon which people can base their broad tax projections are in the public sector. You can’t be detailed, I accept, but the broad figures are there, there is nothing hidden, our accounts are as open as the accounts of any nation in the world so anyone can have a pretty good idea what their tax objectives are, they don’t have to hide behind obfuscation and downright deceit.

    My tax objectives are perfectly transparent and clear. As soon as I am able, I wish to reduce taxes further and I wish to go down to a 20 pence basic rate of tax, I am not changing the upper rate of tax and then I want to tackle capital taxes because I think they damage the market, they damage job creation and what we need is job creation and a competitive environment to keep our people in work and to put more of our people in work. These are our objectives.

    What are our opponents’ objectives? It is very difficult to say. When asked privately, the leader of the Labour Party said: “We aren’t going to touch people up to £30,000!” which I would have thought to any rational observer would have meant they are going to touch people earning over £30,000 but after that remarkable slip of the tongue, one of the leader of the Labour Party’s minders rushed along to the press to say: “He didn’t say that, he didn’t mean it, it never happened!” Claire Short – bless her honest, cotton-picking socks! – [laughter] seems to think it should happen; she is very well paid. Mr. Prescott is middle class, he is very well paid! Nobody doubts where the instincts of the Labour Party lie or what will happen. I don’t know what the editors of some of the great Labour-supporting newspapers who earn large sums of money think, I hope they have worked out how much it is going to cost them if the upper rate of tax goes up from 40 pence to 50 pence which is the minimum demand of the Labour Party in the House of Commons or perhaps 60 pence but certainly a very expensive proposition.

    The people I am concerned about are the people up and down the country who at the moment are being told one thing by the leadership when it is transparent that that is not remotely what their position would be likely to be were they in government. That tax slip of Mr. Blair’s was brushed to one side. Gordon Brown was a bit more explicit on another aspect, on child benefit. Because he is being pressed on tax, he decided he had better display a touch of virility so he decided to announce that he was going to take away child benefit for people with families of youngsters between the ages of 16 and 18 who decide to stay on at school. Let me say something about this:

    I left school at 16. I didn’t leave school at 16 because I didn’t want to stay, I didn’t leave school at 16 because my parents wanted me to leave school at 16. I left school at 16 because we could not afford for me to stay at school and I chose to go out and work; my parents didn’t like it but I chose to go out to work.

    If you take child benefit away from any youngster in any family, perhaps a low-income family, perhaps not but very many families on low incomes are desperately keen that their children should have a better education, a better opportunity, a better chance than they ever had and these days 1 in 3 of our youngsters go through A-levels and on to university and I am proud of that and I defend the expenditure to make sure that that is possible but if in future Labour were to carry out this plan and have the opportunity, you have a youngster of 16, 17 or 18 going on to A-levels, as they should, they will lose a £560 child benefit every year for each child. Most families have two children, often only a couple of years between them, you will get a rolling effect that dwarfs any tax changes we have seen for generations and how well-targeted it is, targeted directly upon many of the people who have the lowest incomes in the country – £560 a year gone.

    Apart from the stupidity of that in inhibiting youngsters whose parents have modest incomes going on to further education, it is thoroughly dishonest for this reason: child benefit was a tax allowance. We changed it from a tax allowance to a cash benefit payment so that it actually went directly to the mothers to be used predominantly for the children because of concerns that that wasn’t happening. What would be happenings is you would be taking away a tax allowance and what is the equivalent in tax? For someone on average earnings, that is the equivalent of an increase of 5 pence in the pound on the standard rate of income tax if that was actually withdrawn from families. That has crept out without the Labour Party realising exactly what it would have meant for people. If that has crept out under pressure, I would like to know what else is lying hidden that needs to come out and that we need to examine before we get towards the next general election.

    Peter asked whether we are going to win. I remember Peter asked me that before the last general election. [Laughter]. I look forward to Peter asking me that before the next general election but one and I will give him the same answer: yes, we are going to win and I will tell you why we are going to win:

    We are going to win because when you strip away the absurd hyper-exaggeration of everyday news events, what is happening in this country at the moment is that we are producing the most stable economic platform that we have seen for generations. What a tragedy it would be if, having gone through all that has happened in the last few years to create that environment and that opportunity, it were to be casually tossed away with the sort of policies that a change of government would bring about.

    I don’t think that will happen but I don’t base my confidence only upon the economy though I am confident about the economy. I base it on one or two other things that hit here [touching part of body?] rather than in the wallet and the first of those is the proposal for constitutional change that our opponents have. If you wanted to draw up a recipe that would divide and break up the United Kingdom, you would draw up the proposal fox constitutional change and particularly a tax-gathering parliament in Scotland that the Labour Party have committed themselves to. Once you get that parliament in Scotland, within a measurably short period of time if you are going to have the parliament, you would have to have a Labour government and Labour governments; like all governments, become unpopular.

    Mid-term elections in Scotland and who is likely to win? There is a possibility that the Scottish Nationalists:- separatist party openly declared for separatism – would become the majority party in the Scottish parliament and what mandate are they going to claim? Is it really credible to have a Scottish tax-gathering parliament and still have public expenditure from the rest of the United Kingdom spent in Scotland at a much greater level per head of population than it is in England? Of course it isn’t practical. Is it practical to have Scottish MPs at Westminster voting on matters that affect England while the same English MPs in England cannot vote on the same matters affecting Scotland? What sort of recipe for chaos is being unleashed with its ill-thought-out porridge that they are producing for Scotland?

    What have they got against the Scots that they should pay more taxes? What have the Scots got against themselves that they could contemplate any party that would want them to pay more tax?

    Then there is the question of Europe. No issue has been more explosive, no issue has been more misrepresented, no issue has been more conducted in stereotypes with the debate often determining itself only on the fringes of argument – those who are fantastically opposed to Europe and those who are fantastically in favour of Europe. There is a middle and it is a very large middle. I don’t know how many of the businessmen here have half their trade going to the European Union and back but I bet a majority of you do because half of all our trade goes to Europe and back so we have a real interest in playing a constructive role and arguing our case. Removing our influence and standing on the outskirts would mean that the problems that we are having with beef, where I am in great dispute with our European partners, could be magnified over a whole range of issues if we were outside the European Union or not playing a part in trying to determine the rules of the European Union but that doesn’t mean we are going to go into a federal Europe.

    I can tell you quite frankly I have no intention whatsoever of going down the route to a federal Europe. I just don’t believe it would be right for Europe to go in that direction and I know that it would not be right for this country to go in that direction and we have no intention whatsoever of doing so. We will argue the case, we will debate the case, we will win the case – in which case all is well – or we will not win the case and we will just say “No! You can go in that direction if you like but we are not!”.

    At Maastricht, we had huge disputes. Nobody truly believed that I would come back from the Maastricht debates having said “Non to the social chapter and “No” to a single currency with the opt-out. The City didn’t really believe that, none of the newspapers believed it. If you promise not to tell anybody, even some of my colleagues in the House of Commons didn’t believe it! [Laughter]. I know you will find that hard to believe [laughter] but I promise – and tell not a soul – that they didn’t. But at the end of the negotiations there was a choice: no treaty at all because it is agreed by unanimity or recognising that Britain has a distinct view and we are not going to be pushed in that direction.

    At the inter-governmental conference in front of us, the same principles will apply. I have set out with great clarity what our negotiating position is in the negotiations and if I have to say’ “No” I will say “No”. I did before and I will again, not because of parliamentary pressures at home, not because of public opinion at home – not just because of those things but because what is in the White Paper on Europe is what I believe about Europe and I have to say I am pretty fed up with the absurd commentary which says you either have to be on one wing of the European argument or the other wing to have any views at all. Well my views are very clear. On one hand, I am being told always that I am shifting my position, on the other I am being told I am being told I am too stubborn and why don’t I listen to people. I am happy to accept one of those if someone can make a credible case for it but I am just a touch concerned that having both of them often on the same day on the same page of the same newspaper written by its seems to me the same person who clearly is not perhaps wholly convinced of his case.

    We are not going down the federal Europe route but our political opponents are, the Liberals because they believe in it, the Labour Party because they believe it is fashionable. I just believe it is wrong and when we come to the general election that will be a big division so there will be divisions on tax, divisions on the constitution, divisions on Europe and great divisions on education and other matters.

    The fact of the matter is, Peter, when people come to vote in a general election, forget the nonsense of by-elections, the protests – “Oh my God, I’m sick of those people, let’s not bother to come out and vote today!”. You have got real issues, issues that affect the family, the money, the future, the country and upon those issues I am perfectly prepared to take my Conservative case to the country and just as I recall at the last general election as we entered the last week 7 or 8 per cent behind on the Sunday before the election, with every newspaper writing us off and wondering what Mr. Kinnock was going to do in Downing Street, I didn’t believe the polls then, I don’t believe them now, I thought we would win then and I was right, I think we will now and I will be right again. [Applause].

  • Mr Major’s Joint Press Conference with President Kuchma – 18 April 1996

    Below is the text of Mr Major’s joint press conference with President Kuchma, held in Kiev on Thursday 18th April 1996.

    PRESIDENT KUCHMA:

    It is a pleasure to welcome our honourable guest, the Prime Minister of Great Britain to the capital of Ukraine, the city of Kiev. This is a continuation of the political dialogue which began between our two countries. We discussed the issues of bilateral relations with our two countries and I expressed my gratitude to the Prime Minister for the support to Ukraine for its independence, for the support of Ukraine’s integration into the European Union. Priority number one for us is the economic relations, [indistinct] with such a country as the United Kingdom which is recognised worldwide as the leader in developing economic relations. The issue of European security has also been in the focus of attention of our talks. We discussed the issue of the impending G7 summit in Moscow, and many others.

    I am happy that we share opinions on most of these issues and we are progressing. For Ukraine has no way back. That is why I would like to extend my gratitude to the honourable Prime Minister for his visit and I am pleased to give the floor to him.

    PRIME MINISTER:

    Mr President, thank you very much indeed. Perhaps I can firstly say that I am delighted to be here in Ukraine, to have the opportunity of these discussions with you this morning and with the Prime Minister later this afternoon. I am also delighted that we have already been able to sign mutual confiscation agreements to deal with drugs and other serious crimes. That is a matter we discussed when last we met, I am delighted the agreements have been reached because I regard them as a key part of the international fight against crime.

    But I am delighted to be here too for another reason. And that is because we are now able to visit an independent Ukraine, independent for five years, that has now set its feet firmly towards a new and different future. We believe that Ukraine’s success is important to Europe’s stability and we are firm supporters of the independent and democratic Ukraine that has been created.

    Over the last few years, Ukraine has been undergoing some very remarkable political and economic reform. None of these reforms is easy, a great deal of progress has been made both economically and politically. We understand very clearly the difficulty of these economic reforms, but we are utterly confident that as they are carried forward they will lead to a far better economic future for Ukraine.

    We wish to assist to the extent that we can. We shall certainly be providing extra resources for the Know How Fund, particularly to help in the key energy sector in the Ukraine.

    We have been discussing over luncheon a new British Embassy in Kiev which will be a visible illustration of the improved relationship between our two countries.

    Later on today I will visit a new British Council office, and very shortly important business trade missions will come here, one in particular led by the Lord Mayor of London.

    The President and I have looked this morning at the opportunities for increasing trade and investment between our two countries. We both believe that there is ample scope to do so, both for bilateral trade and also for bilateral investment, one country in another.

    We have also had the opportunity of previewing some of the matters that we will discuss at the G7 plus 2 Summit later on this week. I have found it a most useful and worthwhile occasion and I am most grateful to the President for his hospitality.

    QUESTIONS AND ANSWERS

    QUESTION:

    Prime Minister, what can the West do to prevent another Chernobyl and what, if anything, will come out of the G7 that will be helpful to that process?

    PRIME MINISTER:

    That is clearly going to be one of the matters that is going to be discussed at the G7, important to the President, important to me, important to the rest of the G7. It is now the 10th anniversary I think since the terrible tragedy at Chernobyl. We are fully committed to the implementation of the Memorandum of Understanding that has been signed between Ukraine and between the G7. There are funds ready there to be used, there are expert groups looking at what needs to be done, there is a European Union review of the particular difficulties relating to the sarcophagus. So there is a lot to be discussed and I would anticipate that that would be an important issue in our discussions later this week.

    QUESTION:

    In what context was the issue of Chernobyl discussed, will there be a joint programme of action in Moscow?

    PRESIDENT KUCHMA:

    In fact the [indistinct] has been worked out already, starting with the Memorandum of Understanding signed in December 1995. Now it will be the decision of Ukraine to close down Chernobyl. There is a wish and the decision of G7 to participate in implementing this decision, there is such a wish and I am confident that there will be practical efforts and practical steps in its implementation.

  • Mr Major’s Joint Doorstep Interview with Prime Minister Klaus – 17 April 1996

    Below is the text of Mr Major’s doorstep interview in Prague with Prime Minister Klaus, given in Prague on Wednesday 17th April 1996.

    MR KLAUS:

    [Not translated].

    PRIME MINISTER:

    Let me just add to some of the points the Prime Minister has just made. We have a very close relationship between our two countries, no bilateral problems. And so we have been able to spend the majority of our time this afternoon discussing two subjects of great importance to both of us. The first is future developments in the European Union and in particular what is likely to emerge from the intergovernmental conference that has now begun; and what implications that will have for future enlargement of the European Union and in particular the entry of the Czech Republic into the European Union as a full member.

    I expressed the view that the widening of the European Union remains the most important European issue to be discussed. I think there is an historic opportunity, with the widening of the Union to bring the Czech Republic and other countries in fully to the Western family of democratic nations, and I believe it is attractive both for the existing European Union and the applicant members for that to happen as soon as it is economically and politically desirable for it to be done.

    The Prime Minister and I discussed many of the matters that will be at issue in the intergovernmental conference, and then the likely timetable for discussions with the Czech Republic and the European Union about subsequent membership.

    There will be a number of applicants to the European Union. It is our British view that however many we may begin to negotiate with at the same time for future entry, entry itself should be discriminatory in the sense that those countries should enter the European Union when they are economically ready to do so, and no-one should be delayed so that there may be a particularly large entry at a later date. And we discussed those and a number of other detailed matters relating to Europe over the last hour or so.

    We also spent some time discussing the development of Partnership for Peace and the defence relationship between the Czech Republic and the United Kingdom. For example, at the moment there are Czech troops serving with British troops in Bosnia as part of the IFOR contingent and they have a very close and very deep working relationship.

    At the moment, as you will know, NATO is considering enlargement and clearly the Czech Republic is one of the prime candidates to join NATO as and when that enlargement proceeds. I am confident it will proceed. I think it will need to proceed at a measured pace. There is much to be decided upon with enlargement of the North Atlantic Treaty Organisation. One has to look both at the obligations that NATO will take on with enlargement, the obligations to the new members, and equally the obligations of the new members to the organisation – NATO – that they are joining. And again we looked at those and what those obligations might be in some detail over the last hour or so.

    We anticipate continuing this discussion over dinner a little later and I have no doubt then we will wish to discuss other foreign policy matters, certainly Russia, and other matters of that sort. I think the delights of those discussions lie a little ahead over dinner in a few moments.

    I think the Prime Minister is content for us to take any questions on our discussions – it is questions on our discussions – if there are any.

    QUESTIONS AND ANSWERS

    QUESTION (Newsweek Magazine):

    Mr Klaus, recent polls show that Mr Major is one of the least successful leaders in post-war history. I wonder how can his presence possibly boost the chances of your party in next month’s elections?

    MR KLAUS:

    It is a very strange question. First, I don’t agree with your analysis of the position and of the success of Prime Minister Major, I definitely don’t agree with that. And I know that the situation in the United Kingdom, is not yet over and I am looking forward to seeing an improving position of John Major’s government. So that is quite clear. And secondly, we are quite happy that John Major is here. Definitely I suppose he is not coming here to boost anyone in the elections, so it is absolutely unnecessary to put it in such a simplified form and way.

    PRIME MINISTER:

    It is possible perhaps that the questioner did not hear what we have been talking about, two matters of some importance I think to the Czech Republic insofar as NATO is concerned and the European Union is concerned, but perhaps you missed that.

    QUESTION:

    Do you mind me asking a follow-up to that question? Does that kind of question and that kind of analysis annoy you at this stage?

    PRIME MINISTER:

    I think it is just silly. I can’t be responsible for silly questions from journalists, that is a matter for the journalists, and the editors and the readers of their journals. But what I am here to discuss with the Prime Minister are matters that we have been discussing in Europe for some time, and we have been discussing with the Czech Republic for some time. The most critically important issue in European politics at the moment is enlargement of the European Union. That is an historic opportunity, as I said a few moments ago, that never occurred in the past and may not readily occur in the future if we don’t take the opportunity. One of the elements of taking that opportunity is the discussions and the decisions that will be made in the intergovernmental conference. And that will be so for this reason: the intergovernmental conference will look at institutional matters related to the future of Europe, once those institutional matters are decided in the conference they will be a matter of fact and that will be the nature of the European Union that the Czech Republic and others will then be negotiating to join. So it is crucially important to the Czech Republic and very important to the interests of the United Kingdom that those decisions are right in the intergovernmental conference so we can take this opportunity to enlarge. And that of course is what we have been discussing on a number of occasions over recent years and in our discussions this afternoon.

    QUESTION:

    [Indistinct] to EU membership, is there any advice within your gift to Czech people?

    PRIME MINISTER:

    Yes, there is, but I would give it privately and have done so.

  • Mr Major’s Commons Statement on Turin European Council – 1 April 1996

    Below is the text of Mr Major’s statement to the House of Commons on the Turin European Council, made on 1st April 1996.

    PRIME MINISTER:

    With permission, Madam Speaker, I will make a statement on the meeting of the European Council in Turin on 29 March which I attended with my right hon. and learned Friend the Foreign Secretary.

    The purpose of the meeting was to launch the intergovernmental conference aimed at preparing the European Union for the next phase of enlargement. The Council conclusions, which I have placed in the Library, set out the main areas of the IGC’s agenda. We have ensured that the conclusions do not prejudice the actual negotiations in any way, nor do they contain an exhaustive list of the issues for negotiation. We shall pursue our objectives for the development of Europe as a partnership of nations, as set out in the Government’s recent White Paper.

    The negotiations themselves will now begin. They may well last for a year or perhaps longer. Foreign Ministers will meet every month. Their personal representatives will meet every week. I outlined to the European Council the Government’s approach to the intergovernmental conference. I made it clear that our vision of Europe is built around the bedrock of the nation state. I also set out some of the areas where the United Kingdom will be putting forward proposals, and those where we have strong views.

    For example, I underlined the need for the principle of subsidiarity to be enshrined in the treaty; the value of a greater role for national Parliaments; our desire to see Europe’s common foreign and security policy work better while preserving its basis of unanimity; the need for further progress in co-operation in justice and home affairs without undermining its essential intergovernmental character; our opposition to any further extension of qualified majority voting; and our insistence on reforms for the working of the European Court of Justice.

    I also made plain to the European Council my particular concern about the recent opinion of the Advocate General of the European Court of Justice on the working time directive and its implications for the intergovernmental conference. I said that I was not prepared to see the social chapter opt-out undermined as a result of an expansive and unreasonable interpretation of the health and safety article of the treaty. I made it clear that I would be looking in the intergovernmental conference for changes to that article to reflect our earlier understanding of its limited scope.

    The European Council also held a brief discussion on employment and competitiveness. This subject will rightly be high on the agenda of its meeting in Florence in June and I set out the Government’s views.

    Europe has to be globally competitive. Jobs are not created by Governments–and still fewer are created by the European Union. Jobs come from the decisions of businesses in the marketplace. Job creation needs less regulation, not more; and there must be lower financial and other burdens on business, not extra impositions arising from ill-conceived European directives. There is increasing understanding of these realities among some of our European partners. I was encouraged by the discussion, but I will continue to resist strongly any suggestion that the treaty be amended to cover employment issues. Action in those areas is overwhelmingly for individual countries, not for the European Union collectively.

    All the Heads of State and Government in Turin were acutely conscious of the Europe wide crisis in the beef market. This is, and was treated as, an entirely separate issue from the intergovernmental conference agenda. There was no question in anyone’s mind of trading help in one area against co-operation in another. I told my colleagues of the impact in this country of the ban on British beef decided in Brussels last week–particularly as it was taken on the basis of considerations other than the scientific advice.

    I suggested to my colleagues that three things were now needed. First, the conditions should be created as speedily as possible to allow the ban on British beef exports to be lifted. Secondly, the specific problems of the United Kingdom beef market had to be addressed. I looked to the Union for sympathetic and speedy support for the measures necessary to return confidence and stability to the market. Thirdly, it should be recognised that this was a European, not just a British, problem.

    The response of my European colleagues was, without exception, one of support. There was universal agreement that this was a Europewide problem and that a European solution was required. All Heads of State and Government who spoke expressed readiness to see the European Union bear a share of the financial burden and recalled the European Union help in the swine fever epidemic a few years ago. This was a welcome response, in tone as well as in substance, but we still have some way to go.

    Negotiations continue with the Commission on the measures needed to restore confidence. My right hon and learned Friend the Minister of Agriculture is in Luxembourg today to take this forward and to attend a meeting of European Ministers of Agriculture, which is now under way.

    I emphasised to my European colleagues that, with the measures we have taken, British beef is–on any normal definition of the term–safe. No one disputed this. Everyone recognised that the present crisis came not from a real health risk but from unnecessary hysteria across Europe.

    At Turin the intergovernmental conference was launched with an agenda that enables us to pursue our objectives in a non-prejudicial climate. I was able to make clear to my European colleagues our strong views on certain key issues, including what is needed to tackle unemployment across Europe as well as in Britain. We achieved a notable measure of understanding and support over the beef crisis that we and our European partners face together. The need now is to turn this support into action, particularly the lifting of the export ban on British beef and beef products. That is our immediate objective. It is important and we are pursuing it urgently.

  • Mr Major’s Comments on Maastricht – 17 January 1996

    Below is the text of Mr Major’s comments on Maastricht, made on Wednesday 17th January 1996.

    QUESTION:

    [Mr Major was asked to reflect on his thoughts when he went to negotiate at Maastricht in December 1991].

    PRIME MINISTER:

    We knew they were going to be very tough negotiations. At the back of our mind were several things. Firstly, we needed to deal with the fall-out from the Single European Act – that we were right to sign that in the 1980s – but some of the fall-out had been very difficult, the huge growth for example in Community Directives, and we needed to cut that back; that was the birth of subsidiarity, the idea of giving power back to the individual countries.

    Beyond that, there were several over-riding themes in our mind. Firstly, we wanted to change the system whereby every development in the European Community added to centralisation, so we wanted to establish a system where some matters could be dealt with solely by agreement between the governments on a quite separate basis and that is eventually what we agreed on security, defence, foreign affairs and home and justice affairs, a wholly new way for the European Union to develop that no-one had conceived of before – that was important to us.

    Beyond that, of course, there were some things we were not prepared to accept. We were not prepared to accept the Social Chapter because we believed it would destroy jobs and I still do, and I think the evidence shows that it does, and secondly, we were not prepared to accept a commitment to a single currency.

    QUESTION:

    [Mr Major was asked if he was on the defensive at Maastricht].

    PRIME MINISTER:

    In some cases certainly defensive but we had taken every detail of our negotiating position to the House of Commons and received the endorsement of the House of Commons so I had no doubt in my mind about the position that I was going to adopt and no doubt in my mind that if I was not able to achieve what I wanted, that I would not agree to the Treaty so to that extent I was certainly at ease in my negotiating position but there were a number of things that we wanted, those I set out a moment or so ago and a number of minor commitments as well all of which, in the event, we obtained.

    QUESTION:

    [Mr Major was asked if he knew at that stage whether he would be able to get an assurance on a British opt-out from the single currency].

    PRIME MINISTER:

    No, we didn’t have an assurance. I had had meetings with Delors, Lubbers, Kohl and others at the Luxembourg summit six weeks earlier and we had agreed a general principle of “no lock-out, no vetoes” so there was an implication that if we stood firm they would agree that there would be some form of opt-out but it emphatically wasn’t agreed and frankly, it wasn’t in my interest to have agreed it earlier because I wished to get the positive things we needed in the Treaty and also “out” the things we disliked before I came to the main issue of EMU. I didn’t want concessions made to me upon that issue that would have made the rest of my negotiations more difficult, I wanted that left till last.

    QUESTION:

    [Mr Major was asked how the opt-out was achieved].

    PRIME MINISTER:

    It was perfectly clear that I wasn’t going to accept the proposals that our partners had put to us. I thought then – and believe still – that it was folly for them to proceed as they did with a stated timetable and a commitment to go into a single currency, absolute folly. I wasn’t prepared to agree to that. Nobody would know years in advance that the economic circumstances were or the political circumstances and I just made it perfectly clear to them that if they wished to proceed on that basis, they could not expect Britain to do so and we would not and if they were not prepared to accept that, then there would be no treaty.

    QUESTION:

    [Mr Major was asked if this had been said at the formal conference part of the proceedings].

    PRIME MINISTER:

    I had made that clear at the conference session but there were a series of private meetings outside it. The conference session went on a very long time, it was much the longest European Council meeting that I can recall and from time to time everyone got rather tired. There were a lot of detailed matters to be discussed and I had some private meetings outside the conference hall with Ruud Lubbers, who was chairing it, occasionally with Delors who was Commission President, also with Helmut Kohl and others and some of those discussions took place in that form.

    QUESTION:

    [Mr Major was asked if he had tried to get every country an opt-out on EMU].

    PRIME MINISTER:

    It is difficult to persuade other people to accept something in their interests if they don’t wish to, but we would have preferred that, yes.

    QUESTION:

    [Mr Major was asked if could have vetoed the entire agreement].

    PRIME MINISTER:

    That is more theoretical than real, frankly. If we had vetoed the whole concept, they would have precisely what in the event they had to do with the Social Chapter and form a separate agreement outside the Treaty of eleven and that would have had the same practical effect with one difference – it would not have given Britain any influence about the economic conditions and other circumstances in which people might go ahead to a single currency and if they do go ahead at a future stage, whether or not Britain is part of that, it is going to have an economic impact upon this country, so I very much wanted us to be part of the negotiations and to determine the way in which this matter was structured in the years to come so I didn’t want it to be outside the Treaty in that sense.

  • Mr Major’s Speech to Businessmen in London – 10 January 1996

    Below is the text of Mr Major’s speech to businessmen in London on Wednesday 10th January 1996.

    PRIME MINISTER:

    Peter, Good Morning and thank you for taking the trouble to organise this event. It has been such a quiet and dull political period over Christmas that I have been looking forward to this morning with great anticipation.

    As you said a moment or so ago, Peter, we have gathered here in this room a very substantial number of the most senior businessmen representing the largest corporations and newspapers throughout the United Kingdom. Here are many of the people who make many of the crucial decisions about where investment goes and what actually happens to the future prosperity of this country. And so I want to spend most of the time speaking to you this morning about matters economic in one form or another, and then leave as much time as possible for you to ask the questions that concern you.

    Let me just back-track for a few moments and look over the last years to perhaps put today and tomorrow in a slightly better context. No-one doubts how difficult the last few years have been, the recession was longer than it was expected, it was deeper than we expected, it had a more profound psychological effect upon thinking in this country than many people anticipated when it began or even as it continued and seemed at one stage to be going on almost forever.

    Not just of course a problem for the United Kingdom, it was a recession that spread throughout all of the Western world and some parts of the rest of the business world as well. But it is behind us now and what I want people to concentrate on at the moment are the circumstances that face us at the moment and to wipe away the mindset that we have had for so much of the past 3 or 4 years.

    There is a tendency in human nature generally that if things are difficult they are going to go on being difficult forever; if things are excellent they are going to go on being benevolent forever. Neither of those things are true. We did have, as a country, in company with the rest of Western Europe, a very difficult economic period. But we have actually been out of recession technically for over 2 years and in reality out of recession quite substantially for a very substantial period now.

    What we need to do is to look at where we are, uncluttered by the memories of what happened, and look at the prospects that lie immediately ahead of us at the present time. And I say that because if we don’t do that, if we, government and business, leave ourselves with the mindset of 1992 and 1993 then we will miss the opportunities of 1997 and the years that follow it.

    Let me try and break some of the distorting prism of opinion that occasionally entraps people when they think about our prospects. I suppose you might call it an alternative news summary, some of the things that get less publicity than they might unless they appear in a brown sealed envelope.

    You touched upon some of them, Peter. Inflation probably, I think certainly, under more secure lock and key than we have known certainly in my political lifetime, and I don’t just mean in Parliament, I mean since I first entered politics as a 16 year old. We are certainly going to be well within our inflation targets. I suspect if the election is when I anticipate it will be that we will have met our 2.5 percent target that we set ourselves for inflation by the time we reach the next election. It is no longer, almost for the first time in the memory of most of the people round this room, a material problem to future investment because there is an acceptance that inflation is now under proper control.

    If we have broken the inflationary psychology, and I pray that we have, then both in the short term and the long term I think that is one of the most remarkable and benevolent changes for British industry and commerce that we have seen literally for decades.

    Secondly, interest rates, not quite at an historic low, but certainly by comparison with most of the last quarter of a century low and no serious risk in the short term that they are going to be significantly higher and we hope, all things being well, that it may be possible to reduce them.

    Mortgages at their lowest level for 30 years. Unemployment now having fallen for 26 months in a row, down to 8 percent. Our nearest neighbours, perhaps the closest economy – France – with unemployment stuck at around 12.8 percent, no major European economy having either unemployment as low as us in the United Kingdom or, and perhaps this is a better measure, no other major European country with as high a proportion of its adult population in work as we have in the United Kingdom. We have now beaten Germany on both those counts for the first time that I can! ever remember. And of course tax at its lowest level we have seen for 50 years.

    Now that wasn’t easy to achieve. It didn’t happen by magic. It did happen because throughout the past 3 or 4 years, often when we were invited to take decisions that would have been popular in the short term but damaging in the long term, we didn’t take those damaging long term decisions, instead we took the short term unpopularity and as a result of that we have the economic opportunities that lie immediately ahead of us at present.

    They are opportunities, they are yet to be taken, but I believe they are opportunities that put us well on track for the doubling of living standards in 20 years that I set out as our objective 18 months or so ago.

    Let us look at some of the other indicators that are now becoming apparent. At last, much slower, much later than I would have hoped, we are beginning to see house prices having increased for each of the last 5 months. After having had to put up taxes because of the size of the fiscal deficit, and it was frankly a choice between taxes going up or interest rates going up, and think it was right to deal with it, taxes are reversible when the time is right and we now have personal taxation back I hope on a downward trend. Sales rising. And although it isn’t directly an economic matter, it affects many people in this room, for the first time in 40 years the clearest possible indication that crime is now on a downward trend. And for those cynics who say, and there are sadly cynics in public life, that the crime statistics are rubbish, it is simply that people are not reporting crime, I would refer them to the insurance companies and the statistics that they have released for theft of motor cars for example. Because I think it is very hard to argue that anyone who has had their motor car stolen would not actually report it to the insurance company in order to make a claim. And that shows a distinct downward trend as well and you can see that elsewhere across crime.

    If I may make some other points. We have, despite the criticism of privatisation, the best single method of giving people a personal stake in society I would have thought, a shareholding stake in society, despite the criticism there has been of the privatised industries, some of it justified, some of it not, the reality is that the price of utilities, crucial to the living standards of people right across this country, are more stable than we have known them at any stage before and in most of the cases, in real terms, the price is actually falling.

    And if I may make a political point for a moment. That has been achieved over the past 4 years with a tiny parliamentary majority, all of which, as we have occasionally seen, not absolutely steady on parade on every single occasion, it has been achieved in a hostile economic environment and with a totally opportunistic and destructive political opposition.

    We have immediately ahead of us some legislation that is crucial for the future. It is very fashionable to take the view that there is an empty legislative programme. I don’t regard a Finance Bill that cuts taxes as being empty; I don’t regard an Education Bill that extends opportunity and choice as being empty; I don’t regard a Broadcasting Bill that begins to prepare us better than we have been prepared for, for the IT revolution that is taking place as being empty; neither do I regard the rest of the parliamentary programme as being anything other than absolutely necessary.

    We are now within 16 months or so of a general election. And if the principal opposition party can force it, of course they would like that election a good deal earlier. And I will tell you why. They would like the election earlier because like me they know they know that the economy is improving, they know that that is beginning to become apparent to people, they know that there is now going to be a rising level of net disposable income and people will feel noticeably better than they have done in the past and they would like to have the election early before that becomes increasingly apparent to people up and down the country.

    But there is at this election a great deal at stake, not just the protection of the remarkable changes that have been made throughout the last 16 years, not just the protection of those for they have made to our competitiveness a dramatic difference over that period, but much else besides. And I would say to those people who may be tempted by an alternative, it is a very dangerous proposition to play Russian roulette with all the barrels loaded, and no-one should assume that the advances that we have made would be safe with any alternative government. So people, not just business, but people up and down this country have a great deal to lose if they decide upon a reckless gamble of that sort.

    Let me touch upon some of those points and then I want to come to something which is very current at the present time. Benign circumstances, certainly; huge opportunities for the future, beyond a doubt, but they won’t necessarily be there with the wrong policies or with the wrong government. Does one really accept, do the people out there in the country really believe that Gordon Brown would have the same rigorous control over inflation that we have accepted, with great political unpopularity? Do people really believe that Robin Cook would defend our position in Europe with the same vigour that we have done over recent years? Are there people present who believe that Margaret Beckett is so concerned about competitiveness that she would ditch her personal wish to return much of the old trade union legislation that existed in the past? Is there anyone present, or indeed in the country, who seriously believes that Jack Straw would take a tougher line on crime than Michael Howard?

    Well I don’t think that there are. I could go on, I have overlooked John Prescott. Now I come to think of it, this is one of the things Tony Blair and I have in common because we both overlook John Prescott, I don’t invite him to meetings either and I appreciate why Tony doesn’t.

    It is worth concentrating on the fact that a government requires 18 Members in the House of Commons and something up to 30 in the House of Lords. And the mindset of most of our opponents, there may be a leader with one view but where is the heart of the party elsewhere? While the majority of the Labour Party still sings the red flag, the Leader may be humming Mandelson rather than the red flag, but the instinct of the party is where the instinct of the party has been in the past.

    Over the last few months it has been interesting to try and see the way in which political programmes for the future have been set out and I will return to our plans for making the United Kingdom the enterprise centre of Europe in a few moments. But just a few days ago, in Japan, the Leader of the Labour Party set out his plans for what he called a stakeholder society. It is not entirely clear what he meant by that. As with his reversal of Clause 4, there was a hint in his speech and his spin-doctors then explained what it was that he might have meant by what it was that he almost said.

    But a stakeholder society is either a soundbite too many or alternatively it is the beginnings of the return to some form of corporate society. And I will set out for you why I believe that is so. Perhaps it is meaningless, who can tell? We certainly in the past have frequently seen spin-doctors elaborating on what has been said, that is the style of the Labour Party. But if it is old-style corporatism then I think we had better flush that out before people just overlook it and we skim on. Because what that potentially is is very damaging for the United Kingdom.

    Who are the stakeholders to be? Are the stakeholders to be 30-odd million adults? And if they are to be the stakeholders, why are they not to be stakeholders in the form we have built up over the last 16 years, with their own personal pensions, with their own homes, with the lowest level of taxation, with shareholdings, more shareholders now than there are trade unionists in this country? That is a genuine stake. People have a real interest, literally a share in this nation that is personally theirs and not determined by some other body on their behalf telling them that they, the body, are looking after their interests for them.

    But if the stakeholders, as I suspect from what we hear, are quite different bodies then we are in a different ballgame. And I rather suspect, as so often, that Margaret Beckett was revealing the truth of what is planned when she said just the other day, and I quote: “There is growing concern that the many interest groups, in particular the general public, consumers and so on”, she wanted to soften it of course, “are excluded from some of the thinking in industry in the past and there is a general exploration of how we can create more common ground, how we can make sure that all interests are taken into account when we look at stakeholders.”

    Well I will tell you who they really mean. They mean the special interest groups, they mean the trade unions, they mean the people that so often are covered by so much of the social chapter type of thinking in this country. That is what I suspect they mean when they actually talk about stakeholders.

    What I believe we are seeing is the tip of a plan which is nothing better than a fancy packaging for new burdens on business of one sort or another. And although some of those burdens that have already been apparent that sound benign, they are not. A minimum wage does sound benign, particularly to those who are very poorly paid, but it is not benign because it often means that those who are poorly paid would not be paid in a job at all if you had a minimum wage legislation. A training levy, which I think would be a great mistake to introduce. The social chapter – the problem with the social chapter is twofold, it is not just what is in the social chapter at the moment, damaging enough though that is, the real danger were the United Kingdom to sign up to the social chapter in Europe and leave it free across the whole of Europe is not so much what is in it now but what would then be brought into the social chapter because that is the ambition of nearly all the rest of our European partners to bring much of their domestic social legislation, under the social chapter heading, in order to remove their competitive disadvantage against the United Kingdom in particular and other countries in general.

    And I will not sign up to that, and I will not sign up to that for a moral reason and I will tell you the moral reason. When our political opponents talk of the social chapter they talk of it in very benign terms from the point of view of someone who is in work getting greater protection. Well I gloss over the fact that few of them would be in work. But I would put this question to you.

    If you make it more expensive to employ people who are in work, the employer will firstly employ less and it will be correspondingly more difficult for those not in work ever to get themselves into work. It is politicians across Europe, using employers’ money to buy popularity for themselves and the losers are the people not in work who, as a result of that, might never get into work or certainly would have their chance of getting into work greatly reduced.

    And I have to tell you, I don’t just think that is economically wrong, I think that is plain immoral when you actually look at what the practical effect would be. Right the way across the European Union there is too much unemployment. 20 million or so adults in the European Union are unemployed. And if you look at the trend from 1950 onwards, it doesn’t matter whether it is good days or bad days, boom or bust, you have had that underlying growth in unemployment. And why, when the rest of the world has been creating jobs? Because we have become relatively less competitive. It does not matter a tuppenny damn within the European Union if there are minor changes in competitiveness.

    What does matter is if throughout the whole of the European Union we become less competitive to Japan, to the United States, to Latin America, to the Pacific Basin countries, and that over 30 years is what has been happening. And that is the matter, the principal matter, that so many people in the European Union ought to be turning their mind to rather than so many of the narrow and institutional questions that have bothered people so much over the last few years.

    Now let me turn to the ambitions that I would wish to see this country achieve. Let me firstly put our position in context. The government, on behalf of the public, spends at the moment about 42 percent of the national income. I compare that 42 percent to the average of 52 percent elsewhere in the European Union – 52 percent elsewhere, 42 percent here. But that 42 percent also needs to be compared with our other competitors around the world, and it is too high, and the expenditure plans that we have will bring it down below 40 percent and then I believe there is scope to reduce it a little further, though precisely how far I wouldn’t care to judge at this moment, but certainly we will get it down below 40 percent and then lower still if we can to open up the prospects of greater competitiveness and lower tax burden on both industry and on individuals. And I believe that is eminently achievable providing we keep a proper grip on inflation and the sort of economic policies that we have followed over the past few years.

    Where are the priorities? When? And I make no promise about the date, nobody say I am making distinct tax promises, but let me set out the objectives that we will reach when it is affordable.

    Certainly we retain the objective of a 20 pence basic rate of tax. I can offer you no promises of changing the 40 pence, I don’t think that is a priority and I don’t wish to pretend to you that it is. But to get a 20 pence basic rate of tax does seem to me to be a very attractive priority.

    I think in terms of enterprise taxes, and I will have a lot to say about enterprise over the next few months so I won’t concentrate on too much of that this morning. But in terms of enterprise, as it becomes affordable, let me repeat what I have said in the past. I believe it is in the country’s interest, economic, socially and certainly in terms of competitiveness, to over time abolish both inheritance tax and capital gains tax. I believe that the impact that the change in those taxes will have on the flow of investment will be of great benefit to many of the people who will wish for themselves and their children to have secure and growing employment prospects. I know it will be criticised as being aid to fat cats, of course that is always the politics of envy argument that can be used. But the best aid to people is to make sure that they actually have the opportunity of a decent job with decent prospects for the future, and that doesn’t magically appear without using the private sector to generate the investment that is necessary. And if people themselves earn success and rewards for that investment, I am not going to object to that. I would prefer to look not at the gains that they may get but at the opportunities that that investment by then will provide for many other people to be in proper and gainful employment. So I see those changes.

    Clearly there is a great deal more to be done on deregulation. It is, I have to tell you frankly, like wrestling with a greasy pig, every time you deregulate here there is a new regulation that pops up elsewhere that is often gold plated because the people determining the regulations say well if I don’t gold plate it and something happens to go wrong, when the inevitable inquiry occurs I will be blamed. And so there is a great deal of gold plating of regulation and I think business is right to be critical of that fact over the years and we must look further to see how we can deregulate.

    I just want to indicate one other point about the social chapter. I said how damaging it could become, but let me just illustrate in terms of social on-costs what it might mean. You employers, many of you round here in the United Kingdom, for every 100 pounds in wages that you pay out you would pay out an extra 18 pounds in on-costs of one sort or another. In Germany it wouldn’t be 18 pounds, it would be 32 pounds. In Spain it would be 34 pounds. In France it would be 41 pounds. And in Italy it would be 44 pounds. Is it any surprise when you begin to hear those figures and see the reality of what it means, that we are the principal centre for inward investment across the whole of Europe and that it is this country that is creating new jobs and seeing unemployment fall, and our European partners who are losing jobs and seeing unemployment remain at a stubbornly high level?

    We have immediately ahead of us, and because I wish to leave questions for it I will not enlarge on it in any detail, some crucially important decisions for this country. Just because we have an economy that is benign doesn’t mean there aren’t very big decisions to be taken. There will be important decisions on European matters on a number of fronts – the Intergovernmental Conference, the single currency in due course, difficult questions on defence and the way in which NATO evolves and also its relationship with the Western European Union and conceivably the European Union itself. And most crucial of all in many respects, the way in which enlargement of the European Union is itself handled, something that I regard of critical importance. Again, while so much of the debate and discussion has been about institutional matters within the existing Europe, the opportunity for this generation of politicians to fundamentally improve our security in the future by extending the borders of the European Union, of the free market and embracing in the democratic embrace of Western Europe lots of countries of Central and Eastern Europe, the opportunity for doing that is greater than we have known in the past, and if this generation of politicians misses that opportunity the time may come in the future when people would curse us for our short-sightedness in not having ensured democracy in those countries that only escaped from a communist embrace within the period of the last few years.

    They are big questions, apart from the domestic questions of continually expanding and unfolding the entrance into what was once the secret garden of education so that parents have proper choice and opportunity. These are matters of crucial importance to our future, they are matters where the choice between the parties is very great.

    You asked me, Peter, at the beginning, was this election there to be won, and the answer is yes it is. I have not a shred of doubt in my mind that the opinion poll figures are wholly illusory, neither do I have a shred of doubt in my mind that we can and that we will win that general election. Of course it is going to be a fight. I recall what I think it was John Paul Jones said when faced with a particularly difficult naval battle: “Fight”, he said, “I have not yet begun to fight”. And there is up to 16 months before the general election with a growing difference between the parties. The stakeholder speech the other day may well open red water between the two parties because I believe, if it means the corporatism I think it means, it is a fundamental political error that the Labour Party have just made.

    So yes we are going to fight for this election, not just because we want another period of power, we have had 16 years of power, but we are going to fight for this election because we have built up in the last 16 years a greater stock of improvement in the life standards of the average Briton than we have seen in any 16 years of government by any political party at any stage in this century.

    And I don’t wish to see that thrown away, I do wish to see it built on over the next few years, and I intend to see that it is and I intend to be there to do it.

     

    QUESTIONS AND ANSWERS

    QUESTION (Peter Jay):

    Prime Minister, do you believe the Chancellor’s forecasts for growth over the next 18 months can be achieved with interest rates at their present level and if you do, why?

    QUESTION (Geoffrey):

    Prime Minister, taking that you want to get people under control on parade, do you think you’ll be able to achieve that from now on?

    QUESTION (Nigel Wright):

    The Prime Minister talked about an enterprise society and his wish to abolish capital gains tax. As the First Lord of the Treasury do you think you could actually approach them to find a way of doing this sooner rather than later?

    PRIME MINISTER:

    Let me start with Peter’s question, do I think the growth forecast is going to be reached? Yes, I do. What you are inviting me to do is to offer you a suggestion as to what is going to happen with interest rates and I am pleased to see you nod in agreement that is what you’re inviting me to do and you will know, as a very distinguished journalist, that I’m not going to do that but yes, I do think the growth forecast is going to be reached and I admire the way in which you approached the question.

    Geoffrey’s question, whether we can keep people on parade: I made the point perfectly clearly when I spoke to David Frost on television on Sunday morning. I know you will all have been up early watching so it is barely worth repeating but I will repeat it in any event.

    People in this country don’t like parties that are divided and squabble amongst themselves. I said this election is there to be won and I said it is there to be lost. I think we can win it. If the Conservative Party divides and squabbles, then it will lose it and that is a fact of life and all of my colleagues in the House of Commons had better recognise that and the things that most of them don’t wish to come about would almost certainly come about if we lost the election and our opponent was there. I think the only conclusion from that is self-evident: they had better be on parade because then we will win the election.

    On Nigel’s point about capital gains tax, it is the first tax plea I have had for 1996, it certainly won’t be the last. I said earlier I am not going to give you a time-scale for this, the Chancellor will announce his budgets in due course. What I set out was the ambition and the reason for the ambition.

    The reason for the ambition is that I think it would have a beneficial effect on investment domestically, investment externally into the United Kingdom and the creation of wealth, the creation of jobs and the dispersal of wealth so we will do it as soon as possible but I think your question was in the Peter Jay class and I am not going to tell you when.

    QUESTION (Peter Stothard):

    The message that you set out of the economic advantages are very similar to the ones that appeared in a set of advertisements in June in the press. It can be very expensive I think to get that message across via direct advertisements. Do you feel like taking the opportunity of talking to all these wealthy chaps to ask them to support your attempt to get that across?

    PRIME MINISTER:

    There is more than one way of getting a message across.

    Certainly advertising is one and it is a very important one and I hope we advertised in “The Times” amongst others on this particular occasion in order to do so.

    If that was an offer of a contribution, Peter, I accept it. I am happy to stay behind and take the cheque personally and hand it over to the party treasurer. I am sure others will have heard your plea on behalf of the Conservative Party.

    I will try and get the message over by repeating time after time the practical opportunities that lie ahead. I will just digress for one second because the point Peter makes is a very important one.

    When I said there are huge opportunities, we are also in a world where change is moving more rapidly than we have ever seen it before, it is very bewildering for people. I am not surprised that out there many people are bewildered and unsettled in a world that is changing faster than anything we have ever experienced before.

    I saw a presentation just a few days ago of the IT revolution that is coming upon us. I thought I was pretty up-to-date on what was happening but I have to say I was astonished at the speed at which that revolution was moving and of what it will actually mean for life standards, living styles and opportunities not just in the distant future but over the period of the next five years or so and I believe if we don’t take those opportunities here in IT, in broadcasting or elsewhere, we can be certain that our competitors around the world will take them to our disadvantage so that is why I think it is so crucial to maintain that stable economic situation because only in that stable economic situation will we have the right investment and the right confidence to take those particular developments into the future and so that is a further reason that Peter reminds me of, that I think it is so crucial we maintain present economic policies and build on them.

    QUESTION (Michael Cassidy):

    Prime Minister, in spite of your very novel but nonetheless welcome article in the “Evening Standard” on issues to do with the capital city and the sound of Whitehall gunfire now reaching us on the question of is there going to be a London or non-London solution for the millennium site, I wonder if you would care to comment on what appears to be a change of policy on the part of the Leader of the Opposition towards embracing an elected-mayor solution for our capital city and perhaps for other parts of the country.

    QUESTION (Alan Shepherd):

    You mentioned enterprise, Prime Minister. Could you say a word about what was said by you and Malcolm Rifkind at the Party Conference about getting closer working of the European Union and NAFTA as part of that enterprise?

    QUESTION (Sir Michael Jenkins):

    A little bit the same question, Prime Minister. Two years ago addressing this group, you invited business “to put its head above the parapet” I think was the phrase you used about Europe. I wondered whether you would be issuing the same invitation to us today and if so, what kind of message about the parapet you would like to see coming from the business community on Europe.

    PRIME MINISTER:

    Let me deal with Michael Cassidy’s point about elected mayors. I am not very attracted to elected mayors. We flirted with the same idea ourselves three or four years ago. We looked at it, we examined it, it had some attractions – not everything suggested by our political opponents is completely loopy! It does have some attractions and we examined it for some time but I think the downside of it is greater than the attraction. It is not an instinctive part of the way in which we have governed ourselves in the past.

    If elected mayors were to have the sort of credibility that is supposed, they would have to be elected in much the same way that the Mayor of New York, for example, is elected and I think that would have very significant ramifications for the way in which local government operates and the way in which local government raises its money and the relationship between local government and central government and when you examine the details of that, I think on balance the arguments fall against it rather than for it. I don’t object at all to the matter being examined. We examined it ourselves quite carefully before we rejected it three or four years ago.

    On Alan Shepherd’s point about the European Union and NAFTA, we do feel strongly feel about this. What has brought the matter forward is a combination of two factors:

    Firstly, the sheer difficulty there was in agreeing the GATT round and I mention GATT with some deference with Peter Sutherland sitting next to me, without him we wouldn’t have had the GATT round. The sheer difficulty there was of reaching agreement between Europe and the United States very nearly at one stage, because of the tensions, drove the GATT round into the sidings, we wouldn’t have had it and I think that would have been economically disastrous for us and I remember meeting after meeting – most of which remained entirely private even to this day – where there were some very harsh arguments indeed inside the European Union at Heads of Government level over the desirability of the GATT round and the need to ensure that an agreement was reached.

    I very much favour free trade. That is one of the two principal arguments, the first being security, that I want to see the European Union spread further across central Europe and further towards the east but if we believe in free trade, we need to extend it as far as possible and that is why I see great attractions in trying to extend it to North America as well, North America and western Europe.

    It won’t be easy. The principal difficulty, as so often it has been in the past, will be agriculture. We have horrendous difficulties in terms of changing the agricultural situation in Western Europe and to be strictly fair, the Americans have huge trouble with their own agricultural lobby in the United States as well, but we should certainly move towards that objective.

    Free trade is an idea that has developed wings in an astonishing way in the last decade or so when one considers the general atmosphere about it ten years ago and I think we should build on that while the opportunity is there and we will certainly continue to do so.

    On business speaking about Europe, Michael, yes, I do think business should make their views known about Europe. What distresses me so much about the European debate is that it often seems to be principally conducted upon the fringes of opinion about Europe – those people who are very very hostile to it and those people who can see absolutely nothing wrong with it. The truth, I believe, in this as in so many other areas, lies down the middle and if I may make the point, you don’t have to be on the extremes of an argument to have convictions about the matter under discussion. There are lots of people in the centre of the European argument who have convictions about Europe as well and I do and my convictions about Europe haven’t changed, you can see them in the speeches I made before I became Prime Minister in 1990 and earlier.

    We must be in the European Union. Of course, we could survive outside it but we would be far less well-off were we to do so economically and in terms of political authority so we should remain within Europe but that does not mean that because we remain within Europe that it is our role simply to go with the majority opinion that happens to exist within Europe at any particular moment. That would not be a proper role for the United Kingdom.

    I believe that some of the policies that Europe are following at the moment are just plain wrong and potentially damaging and I think it is perfectly proper for us to argue for pragmatic changes to European policy where we think they are wrong and I will continue to do so. I hope I can do so in company, I will do so without company if I have to but if we want the argument to be sensible and informed, then I think undoubtedly it will benefit from those people who have a material, commercial and trading interest with Europe making their views known as well; they are speaking from experience with a practical stake in European trade and I hope that they will make their voice felt.

  • Mr Major’s Commons Statement on the 1995 European Council at Madrid – 18 December 1995

    Below is Mr Major’s statement on the European Council held at Madrid from the 18th December 1995.

    PRIME MINISTER:

    The Prime Minister (Mr. John Major): With permission, Madam Speaker, I shall make a statement on the meeting of the European Council at Madrid, which I attended with my right hon. and learned Friends the Foreign Secretary and the Chancellor of the Exchequer. I have placed the conclusions of the Council in the Library.

    I shall deal first with economic and monetary union and then with enlargement – the two most important matters discussed over the weekend.

    The decisions that the European Union must take on those two issues over the next few years could be the most crucial steps for Europe since the European Community was founded. They will have a profound effect on the political and economic stability of our continent over the next generation.

    On economic and monetary union, the Madrid Council decided on a name for the single European currency. “Euro” was not a name that attracted universal enthusiasm around the Council table; it will not ease the task of those seeking to market the idea of a single currency, but one or more of the member states had rooted objections to each of the other names suggested.

    A more fundamental decision was to study the implications of seeking to introduce a single currency in 1999. As the House knows, I have for a long time argued that the introduction of a single currency by a small minority of states would raise very serious questions about its economic consequences and about the way in which Europe functions. At the informal meeting in Majorca in September, there was general agreement that those questions needed to be examined carefully. At Madrid, a study was formally commissioned.

    The Maastricht treaty lays down strict criteria for entry to a single currency. It is now certain that, on a proper interpretation of the criteria, only a small number of member states will meet them if a single currency is introduced in January 1999. Before taking such a step, the European Union needs to consider what it would mean in practice. It must consider its effect on the states outside the single currency area, as well as those inside it. It must consider how decisions would be taken. It must ask whether the result would be divergence rather than convergence of European economies. It must consider the potential effects on employment and the demand for resource transfers. The risk of monetary instability is one of the questions to be examined.

    Some have argued for rigid linkages between those inside and those outside a single currency, by reverting to an old-style exchange rate mechanism. That is a course that has been tried and has failed. I have made it clear to our partners that I would not recommend that sterling should return to such a system.

    Europe needs coherent answers to those and other questions, and I am glad that the Madrid Council decided to examine them. The opt-out that I negotiated at Maastricht protects the United Kingdom from being forced into an unworkable system, but it is vital to our interests and to the interests of Europe as a whole that a single currency does not begin and then fail, thus causing economic turmoil right across the European continent.

    I now refer to enlargement. Ahead even of prosperity, the European Union exists to provide security and stability for the peoples of Europe. For that reason, I believe that enlargement is the most important task facing the European Union. Having demolished the iron curtain, we must never again have a dividing line running through the middle of Europe.

    Ten or more countries are hoping to negotiate entry to the European Union in the coming years. This is an historic opportunity to entrench stability through a union of democracies right across the continent, and one that I passionately believe we must take. The Madrid Council gave further impetus to enlargement. The European Commission has been asked to produce opinions on all eastern and central European applicants as soon as possible after the end of the intergovernmental conference. That is a necessary step towards full accession negotiations, which are likely to begin with at least the most advanced of the new applicants, as well as with Malta and Cyprus, in about two years’ time.

    The Madrid Council considered reports from the Commission on the implications of enlargement for the European Union’s policies, and those are profound. To be affordable and to be consistent with the EU’s obligations under the general agreement on tariffs and trade, the common agricultural policy will have to be reformed when the Union enlarges, and so will the structural and the cohesion funds. At my insistence, it was agreed that future meetings of the Council would examine the implications. The Madrid Council has therefore taken an important step towards combining policy reform with enlargement, both of which are essential to the European Union’s future.

    I shall deal briefly with some of the other subjects that were discussed at Madrid. It was agreed that the intergovernmental conference would start at Turin on 29 March. The conference will be conducted by meetings of Foreign Ministers supported by a working party made up of a representative of each Minister and of the President of the European Commission. No decisions were taken at Madrid on the substance of the intergovernmental conference. Work on the agenda will be carried out under the Italian presidency by Foreign Ministers.

    The drive to promote subsidiarity was again strongly in evidence at Madrid and was vigorously supported in informal discussion. The Commission has been instructed to examine the continued need for existing Community legislation and for proposals that are now on the table. It is now widely recognised that the United Kingdom was right to reverse the trend towards greater intrusiveness by the Commission. There was also support for our approach to job creation, flexible pay relating to performance, the curtailing of non-wage labour costs and the reform of social protection systems. Increasing emphasis is being given to small and medium-sized enterprises and to the need to cut the burden of red tape and over-regulation.

    The campaign against fraud and for better financial management, which I launched at the Essen Council a year ago, gained further weight at Madrid. The House will welcome the higher priority that is being given to intergovernmental co-operation against drug trafficking. At Madrid I presented, with President Chirac, an initiative to help Caribbean states to crack down on the trans-shipment to Europe and elsewhere of huge quantities of drugs that are produced in Latin America. That initiative was agreed by the Council and is now part of the European Union’s policy. On external affairs, the Council underlined the importance of successful implementation of the Bosnian peace agreement and gave support to Mr. Carl Bildt, who will be there leading the international civilian effort. It also discussed the European Union’s relations with Russia, Ukraine and Turkey and welcomed the agreement at the recent European Union/United States summit to strengthen the relationship with the United States.

    At the Council, the key decisions for the future were identified rather than taken. The programme of work for the next five years, the “Political Agenda for Europe”, is set out in the Madrid conclusions. It is a formidable programme. In that period Europe must review the treaty at the intergovernmental conference; review the Union’s policies, including the common agricultural policy and the structural funds; take decisions on a single currency; carry out enlargement negotiations; determine the Community’s future financing; contribute to new European security arrangements; and develop its relations with neighbouring countries, especially Russia, Ukraine, Turkey and other Mediterranean countries. The decisions that we take in that period will determine the shape of Europe well into the next century. They will vitally affect the United Kingdom’s interests and our future security and prosperity. That is why, at successive meetings of Heads of Government, I have argued for cautious and careful consideration before decisions are finalised.

    The European Union must carefully weigh the practical consequences of all those issues. Its decisions must be securely grounded in reality. We need, above all, a Europe that works. In that respect, important steps were taken at Madrid, as they were at Majorca a few months ago. They would not have been taken if we had not been prepared to raise the difficult questions and to demand practical answers to real problems. In the interests of the United Kingdom, it is essential to continue taking a hard-headed approach at the centre of European policy making, and I intend to go on doing so.

    Mr. Tony Blair (Sedgefield) May I thank the Prime Minister for his statement? There are several areas with which we can obviously agree.

    On enlargement, I warmly welcome the European Council’s commitment to begin negotiations at an early date. Will the Prime Minister clarify whether those negotiations will indeed begin at the same time as negotiations with Cyprus and Malta? Will he also tell us how the European Union intends to differentiate between countries that will enter more rapidly, such as Hungary, the Czech Republic and Poland, and the others that will take more time? I agree totally with what he says on the common agricultural policy, but instead of using the need to reform the CAP as an excuse to delay the entry of those countries into the European Union, should not we rather be using enlargement as the lever for changing the CAP?

    I welcome the agreement at the Council to open the intergovernmental conference in March next year. I also welcome the agreement on the importance of the European Union tackling unemployment as “its principal social, economic and political objective”,” as well as the strongly expressed support in the President’s conclusions for social partnership and job creation measures. However, how is such support for job creation measures and for help for the unemployed consistent with the savage cuts in the training in work programmes for the unemployed in this country today?

    I accept and agree with the Council’s decision to take more effective action on racism – the Ministers all committed themselves to taking further action on that issue. Will the Prime Minister perhaps tell us what further action he believes we should take here? I also welcome the progress towards implementing the principle of subsidiarity in European law making at the Council, but how can he agree so much with the principle of subsidiarity in Europe and deny it so completely here at home in the United Kingdom?

    May I come to the heart of the matter, which is monetary union? Can we be clear on that which has now been agreed unanimously by the European Council: that the Maastricht timetable stands, that the third and final stage of monetary union should begin on 1 January 1999, that all the criteria for convergence, for the setting up of the European central bank and for the fixing of currency conversion rates have been reaffirmed; and that the Prime Minister has agreed to it all in Madrid, despite his objections?

    Why then has the Prime Minister been so utterly powerless in this situation? Whatever happened to those great new alliances that we kept reading he built with the French, his triumphal visit to Italy, and his constant claims that the rest of Europe was coming round to his way of thinking? Why was he driven to concealing his impotence with the fig leaf of some study into the effect of the single currency, which was so threadbare as to be an embarrassment to behold? May I tell him why? It is because no one knows what his position on monetary union is. [HON. MEMBERS: “Oh!”] Conservative Members criticise us for our position – [Interruption.] They cannot have it both ways. They spend half the time criticising us for having a position on the single currency and the other half criticising us for not having one.

    Can the Prime Minister tell us whether he still believes in monetary union, as he used to say he did? Does he want to delay it or does he in fact want to abandon it? Are his hesitations about a single currency those of economic practicality or are they those of constitutional principles?

    We do not know what the Government’s position is. We do not know because one half of his party believes, as we do, that it depends on Britain’s national interests – [HON. MEMBERS: “What about the Labour party?”] I am saying what our position is. Our position is, like that of some members of the Prime Minister’s party, such as the Chancellor, that it depends on national economic interests. The other part of his party, however, believes that there is an insuperable constitutional objection to monetary union. But what is the Prime Minister’s position? We have made our position clear: what is his position?

    Is not it the case that the divisions between those Conservative Members who believe one thing and those who believe another are so deep that they consign the Prime Minister perpetually to weakness and indecision on the very issue that matters? Is the Chancellor right, for example, in saying that it is likely that there will be currency union? Does he agree with that or not? Is the Chancellor right in saying that we may have to decide by March 1998 whether we shall aim at joining?

    Is the Prime Minister seriously going to go into an election not telling us where he stands on the issue of constitutional principle? Is he going to tell us or not? Is he going to be driven to a referendum despite his earlier rejection of it and despite the fact that his Chancellor described it as madness – not as a way of letting the British people decide, but as a way of letting the Conservatives avoid deciding the issue of principle? If that is what he is going for, as the papers have been briefed, is it credible that the Cabinet – with one half siding with the Chancellor and the other half with the Defence Secretary – could ever put a united proposition on joining the single currency to the British people? [Interruption.] Some Conservative Members are shouting out that we are the poodles of Europe, and others are saying that we have not made up our minds. The fact is that we have a position set out and the Prime Minister does not. Until he is prepared to say personally what his position is, they cannot resolve the impasse.

    For too long, is not it the case that Government policy has proceeded on the fantasy that the rest of Europe was not actually going to proceed with monetary union? Of course it may still not happen, but we can no longer assume that it is not going to happen. Indeed, after Madrid, we should surely assume the opposite. I put it to the Prime Minister that it is simply no longer tolerable that, because of the divisions in the Conservative party, a proper national debate on the single currency is postponed, the Cabinet muzzled and the Chancellor sworn to silence on an issue that profoundly affects the future of this country.

    Is not it time for a serious and well-informed national debate to begin? The Government’s European policy after Madrid is still in tatters and uncertain. Rebuilding that policy is essential for Britain’s credibility. To rebuild it, we must have the debate on this issue that has been suppressed for too long, and time is running out.

    The Prime Minister I shall first touch on the points on which I am in agreement with the right hon. Gentleman. I, too, as he acknowledged, am in favour of enlargement. On the timing of enlargement, as I said in the statement, a small number of states – and in answer to his particular question, that will depend on the Commission’s opinion, which will largely be based on economic criteria, so it is an unknown number – will begin negotiations at the same time as Cyprus and Malta. The matter of which ones they are will depend on the detailed examination of their economies, which will take place immediately.

    On the common agricultural policy, I am of course doing precisely what the right hon. Gentleman asked me to do over using enlargement as a lever for change – which we have long argued is necessary – and reform, to which a number of Labour Members are late converts.

    Of course unemployment is important. Much of the debate on unemployment was concerned with the need for deregulatory moves and for cutting down the costs that have led to so much unemployment across Europe. What was signally missing from the right hon. Gentleman’s tirade was an acknowledgment that it is here, in this country, that unemployment is falling, and that it is in the socialist countries of Europe that unemployment is in some cases well over 20 per cent., and in other cases 12 or 13 per cent., where non-socialist Governments have inherited the effect of socialist Governments.

    There was no substantive discussion among Heads of Government on racism. There had been discussion at an earlier stage. There is general agreement that where there are loopholes in legislation across Europe, individual countries will seek to deal with them. The loophole that arises with the United Kingdom is over the fact that it is possible to print racist material here. It cannot be distributed here, but it could conceivably be printed here for distribution abroad. Clearly, that is a loophole that we would wish to block and I have indicated that we will certainly block that. There are some minor technical issues still being worked out, but I do not envisage that they will cause any great difficulties. They will be examined.

    The points about subsidiarity are familiar. We have debated them on many occasions in the past. We are a single nation state. The point about subsidiarity is taking authority from nation states to a central body, not the distribution of authority within a nation state.

    On economic and monetary union, the right hon. Gentleman is certainly correct to say that we reiterated the treaty timetable. The treaty timetable was originally in the Maastricht treaty. For those who are able to meet it – that is an unknown and probably small number – it has again been reiterated.

    The right hon. Gentleman had something to say about divisions. He was not of course as clear as he might have been about his own position. Does he agree with the deputy leader of the Labour party, who again was in Europe making mischief on other matters over the weekend? Does he agree with the right hon. Member for Kingston upon Hull, East (Mr. Prescott), who said of a single currency, “Yes we are against a single currency”?” Or does he agree with the right hon. Member for Copeland (Dr. Cunningham), who said that he was”Personally…in favour of a single currency”?” Does he agree with his Members of the European Parliament, who are in favour of a single currency within the time limits and timetable, or with the hon. Member for Livingston (Mr. Cook), who said some time ago that setting such a timetable would be “irresponsible”?

    It is good to see that there is such clear-cut agreement and leadership in the Labour party on that vital issue. If the right hon. Gentleman had observed the faces behind him, I do not think that he would have said much about agreement in the Labour party. I seem to recall reading recently that one third of the Labour party is in favour of a single currency, one third is against, and one third of them have not yet made up their minds or do not know. That is the right hon. Gentleman’s idea of agreement on that extremely difficult and complex position.

    I have made it perfectly clear on a number of occasions that there are questions about a single currency that are vital to this country’s interests, which are not yet known. It is the answers to those questions that I have demanded are examined in the European Union. If the right hon. Gentleman wants to make up his mind on the most important single economic issue that we have faced this century without the facts, let him take that position in this great national debate – although if he is entering into a great national debate, he might make up his own mind what his own position is before he tries to debate with anybody else. Those are issues of immense importance. We will demand that they are properly discussed so that a proper decision can be taken in the interests of this country, when the facts are known and not before.

    The right hon. Gentleman contradicted himself. He said that I had said that a single currency could not proceed, and that it would not happen. Then he said that, of course, it may not – in successive sentences. What I have said consistently is that the small minority may proceed. It is dangerous if a small minority proceeds and is not ready, and it is potentially damaging if a small minority proceeds without knowing the implications for the majority of countries that do not proceed.

    Even on the most favourable interpretation and the most optimistic scenario, fewer than half the citizens in the European Union would be part of a single currency union at the outset. That is quite apart from the position of the 10 or more countries that may enter the European Union over the next few years, but which will not be remotely ready for European currency union for very many years in most cases.

    For as far ahead as we can see, whether a minority goes ahead – there is certainly a chance that a minority will – it is undeniable that a majority will not be in a single currency in 1999, and a majority will not be in a single currency for very many years.

    Mr. Douglas Hurd (Witney) Will my right hon. Friend, in contrast to the Leader of the Opposition today, keep his mind open to the idea of a referendum on a single currency, should the Government at any stage decide that it is in Britain’s interests to join?

    The Prime Minister I recall discussing that matter with my right hon. Friend as long as two years ago. I know that he has thought long and hard about the implications for Europe and for this country of a single currency. I agree with him that we need to be clear about the circumstances and the conditions. The study that we commissioned in Madrid will help in that.

    I can certainly reassure my right hon. Friend that, for a decision of such magnitude, we shall keep in mind the possibility of a referendum, if the Cabinet were to recommend British entry. That has been in my mind, as my right hon. Friend knows, for a long time and it remains there. I think that it is right to keep that before us for consideration.

    Mr. Paddy Ashdown (Yeovil) Watch that space. Is not it the case that what the Prime Minister has today described as a formidable programme is what he told us a year ago had about as much relevance as a rain dance? Some rain dance.

    Does the Prime Minister understand that the whole nation has now spotted and understands his formula for ducking difficult decisions on Europe? It consists of obstructionism abroad, and appeasement at home; of playing the Euro-realist in the conference chamber, and the Euro-sceptic in the columns of The Daily Telegraph. Does the Prime Minister believe that that is the kind of leadership this country needs on an issue of such importance, and that we should be asked to hide from our future to cover the divisions in the Conservative party?

    Does not the Prime Minister understand that trying to face both ways at once in Europe means that he cannot see what is right in front of him? What is now in front of us in Europe is rising nationalism within our borders, deepening chaos outside, and – I regret – the strong probability of isolationism growing in the United States of America. Chancellor Kohl can see that; President Chirac can see that; and every other leader in Europe can see that. But the Prime Minister is so mesmerised by the divisions in his party that he is blind to it.

    The Chancellor said only two days ago that he believed that there was a 60:40 chance of monetary union occurring before the end of the century, and that the economies that would join it would be the strong ones. Does the Prime Minister agree?

    The Prime Minister The right hon. Gentleman started off by completely misquoting what I wrote in The Economist two years ago. The answer to his first question, therefore, is no. He was talking complete unadulterated rubbish, and continued to do so for some time. What I actually wrote in The Daily Telegraph was what I said in the conference chamber to my fellow Heads of Government. The right hon. Gentleman can therefore be in no doubt that the message I deliver here in this Chamber is–

    Mr. Ashdown indicated dissent.

    The Prime Minister Oh, the right hon. Gentleman shakes his head. He was there, was he? It was he who brought in the tea, coffee and the biscuits. What I said in that conference chamber is what I said here, what I wrote down and what I will take to the country.

    The fact is that the right hon. Gentleman does not understand the issue. He has a slogan. He believes that whatever happens in Europe, he and his colleagues should rattle along behind it whether it is right or wrong, whether it is considered or not and whether it is in this country’s interests or not. He does not know enough about the subject to consider the implications.

    What the right hon. Gentleman said was copper-plated nonsense. He does not know, for example, what would be the effect of a partial EMU among some countries on Community decision taking. Can he tell me the answer to that question? Of course, he cannot. He does not even understand the question, let alone the answer. I shall spare the House the long list of the other questions that he does not understand.

    Sir Terence Higgins (Worthing) Is not it high time that we stopped talking about a single currency, as what is now envisaged is clearly a core currency? That is the expression that we should use. Is not it equally apparent that it is inconceivable that the members of an enlarged Community would be able to move towards a single currency in the foreseeable future?

    On a referendum, is not this a highly complex issue? My right hon. Friend has rightly pointed out that the leader of the Liberal party does not understand it. The public do not even know the difference between a single and a common currency. Will my right hon. Friend therefore bear the complexity of the issues in mind?

    The Prime Minister My right hon. Friend is entirely right to draw the distinction between a single and a core currency, because, as I said to the House a moment ago, at the outset only a minority would be members. In the couple of decades ahead, with the growth of the European Union, there is no prospect that there would be one single currency right across the enlarged European Union. Of course, it may cover some countries – that has certainly always been possible – but it will not cover them all. My right hon. Friend is right about that. On the complexities of a referendum, I understand entirely my right hon. Friend’s point, and that is why we are considering the matter carefully.

    Mr. Peter Shore (Bethnal Green and Stepney) The Prime Minister is clearly moving in the right direction – [Interruption.] Will he confirm what he has previously said: that the United Kingdom will not join, or rejoin the exchange rate mechanism during this Parliament? If that is so, as I believe it is, will he confirm that the United Kingdom will not join a single currency on 1 January 1999 for the simple reason that whatever may be the wishes of the Chancellor of the Exchequer, we shall not conform with the necessary qualifying rule of rejoining the ERM two years before the actual decision about the single currency is made in March 1998?

    Finally, will the right hon. Gentleman confirm that when he said that he would not recommend that Britain should join or rejoin the ERM after some countries have gone ahead and joined the single currency, that means in effect that we shall never join the single currency because one cannot join it unless one first rejoins the ERM?

    The Prime Minister Let me try to clarify matters for the right hon. Gentleman. I was interested when he said that I was moving in the right direction, because the look of pain upon the faces of those on the Opposition Front Bench was a joy to behold. That was one of those occasions when I am so pleased that we have television in the Chamber.

    I certainly reiterate to the right hon. Gentleman that I made it perfectly clear that we would not go back into the ERM in this Parliament. As I said in my statement, I do not propose that I would take sterling back into a changed ERM in the next Parliament either. The right hon. Gentleman concluded from that that we shall not meet the Maastricht criteria, but that is no longer the case, because the ERM that existed at the time of our membership no longer exists. If one were to apply those strict criteria, the reality would be that nobody would be able to enter a single currency. The other Maastricht criteria, of course, fully apply, while the ERM criteria for all of Europe disappear because, the right hon. Gentleman may recall, they were effectively to be a part of the inner band of the ERM, which no longer exists.

    Mr. Tristan Garel-Jones (Watford) As the number of difficult and technical issues connected with the move to a single currency mount, does not the wisdom of my right hon. Friend in negotiating a double option for Britain become more and more apparent? Will he give the country an assurance that he does not intend to throw away either of those options in the near future?

    Secondly, will my right hon. Friend comment on the fact that the Leader of the Opposition, while criticising the opt-out that my right hon. Friend negotiated, clutches it to his own bosom? As the Leader of the Opposition says that there are no constitutional issues attached to a move to a single currency, is not the logic of his position that, if Britain were to be convergent, we would automatically enter a single currency?

    The Prime Minister That is certainly the logic of the Leader of the Opposition’s position, and we look forward to his early confirmation of that, so that no one can be in any doubt when he begins the great national debate that he has called for. With regard to my right hon. Friend’s earlier remarks, both the opt-outs are the envy of many of our European partners, which wish that they had negotiated them. I intend to exercise to the full the opportunities given to this country by that negotiation.

    Mr. Giles Radice (North Durham) May I congratulate the Prime Minister and the Chancellor of the Exchequer on publicly resisting the demand of the right hon. Member for Wokingham (Mr. Redwood) and other Euro-sceptics that the Government rule out the option of Britain joining a single currency within the next Parliament?

    The Prime Minister I indicated, first in my reply to the Leader of the Opposition 10 days ago and again over the weekend, that I was not prepared to rule out the option of joining a single currency in the next Parliament. Nobody should draw any conclusions either way about that, and I will reiterate to the hon. Gentleman why that is the case.

    It is very important that this country’s voice – raising questions that would not have been examined but for this country – is heard in the negotiations right up to the time when a decision is taken as to who should join and who should not. Whether we exercise the right to opt in or to opt out, this country – and every other country in the European Union – will, in one form or another, be affected by the decision to proceed to a single currency, even if only a minority of countries proceed. Upon that basis, I do not believe that this country’s voice – one of the most powerful in Europe – should be excluded from that debate.

    Mr. William Cash (Stafford) I very much hope that my right hon. Friend succeeds in his opposition to federalism in Europe, but does he accept that monetary union is tied up with political union? Does my right hon. Friend agree that we sold the pass at Madrid, because we did not disagree with the determination of the other member states – buttressed by the determination of Germany and by a capitulating France – to go ahead with political union? Does he agree that we must ensure soon – in a White Paper or by some other means – that we no longer go down the route of political union? Should we not utterly repudiate the use of British taxpayers’ money on a propaganda exercise by the European Commission to promote the very political union that my right hon. Friend has expressed himself to be so against?

    The Prime Minister I do not believe that the pass was sold in our discussions in Madrid. We agreed to discuss questions which must be discussed but which have not yet been discussed. It would be folly to proceed without having detailed and proper answers to those questions. Many aspects of political union will come up in different parts of the intergovernmental conference. We are considering carefully our precise response to all the important points that will come up there.

    On the expenditure on publicity, I am bound to say that the Commission’s public relations campaign was not, as reported, put to Heads of Government at Madrid and received no specific endorsement from Heads of Government at Madrid. The reason is that the Commission has authority to determine the proportion of its budget to be spent on information work and has chosen to exercise it in that fashion. It was emphatically not a matter that was put to Heads of Government at Madrid and endorsed by them.

    Mr. James Molyneaux (Lagan Valley) The Prime Minister will have noted that on page 8 of the communiqué, there appear the words: “kept on a sound track”.” Assuming that those words refer not to some method of amplification but to sound money within Europe, and in view of the fact that the Prime Minister has rightly said that the decision is one of the most important this country has taken for, perhaps, 200 years, will he consider the establishment of a super, high-powered Select Committee, with representatives of all parties in the House thereon, to examine and come up with hard facts as opposed to opinions? Such a Committee would have the extra benefit of enabling certain parties to concentrate their own minds.

    The Prime Minister I can certainly confirm to the right hon. Gentleman that the words “sound track” relate to sound money and sound economic policies. The guiding lights of those were first put in the Maastricht treaty, at British insistence. They remain there for any move forward to EMU and have the strong support of a number of other nation states. I shall reflect on what the right hon. Gentleman said. Within Government, we shall conduct our own examination of whether those matters are being followed, quite apart from an examination of the outcome of the Maastricht criteria.

    Mr. David Howell (Guildford) Does my right hon. Friend accept that his excellent questions at Madrid about the ill-named “Euro”, its huge potential cost for the European budget, its divisive potential and its threat to employment in Europe were penetrating and timely? It is a great pity that we have not heard similar intelligent questions from Opposition Front-Bench Members.

    Looking ahead, does my right hon. Friend accept that if we get to the transitional period, when a hard “Euro” will circulate along with the national currencies, the system will have some resemblance to his own plan for the hard ecu, which he put forward five years ago? Will my right hon. Friend suggest a more intelligent and modified version, if we get to the transitional period, to make it a permanent period on the ground that nothing lasts like the provisional?

    The Prime Minister My right hon. Friend is correct to say that in the proposed transitional period of 1999–2002, the new currency will effectively co-exist as a parallel currency with national currencies rather than as a core currency, to use the words of my right hon. Friend the Member for Worthing (Sir T. Higgins). That is similar to the hard ecu proposal which I first put forward in 1990, except that it would not proceed, as the hard ecu would have proceeded under my proposal, by a market-driven route to become a single currency, but would move, under the present proposals, arbitrarily on a fixed state to become a single currency.

    It may be that as we approach that period, the prospect of reviving the sound economics of the hard ecu proposal will return. At the moment, enthusiasm for proceeding under the Maastricht treaty route remains and I am not optimistic about the hard ecu reappearing. In economic terms, I do not believe by any stretch of the imagination that I am the only Head of Government sitting round the table who now regrets that we did not take that route.

    Madam Speaker Mr. Andrew Faulds.

    Hon. Members Oh.

    Mr. Andrew Faulds (Warley, East) Thank you, Madam Speaker. Was there any discussion in Madrid that because of the plasticity of European purpose, or perhaps lack of policy, America had to step in to sort out the Bosnian imbroglio and bring just the possibility of peace?

    The Prime Minister There was some discussion of future policy in Bosnia. There was no look back on how the present position came about. There was considerable discussion about the peace implementation force and about the activities of Carl Bildt in ensuring that the civilian aspects of the Bosnian peace are carried forward. We spent some time discussing that and no one is in any doubt about the huge matters that still have to be dealt with.

    Mr. Nicholas Budgen (Wolverhampton, South-West) Does my right hon. Friend agree that any core currency is bound to contain both France and Germany? France’s attitude towards the core currency will be vitally influenced by whether Britain is there as a balancing power against Germany. Are we not going to create great resentment if we do not tell France and Germany as soon as possible what our attitude in principle is?

    The Prime Minister Our attitude is one of practice. We shall make our decision when we know precisely what the circumstances may be that would impact upon our country. Whatever interest we may have in helping France or other countries to make up their mind, and I appreciate that they may welcome a view of where Britain might be at some stage, the first obligation that we have is to make the right decision for this country. I do not believe that we can make the right decision for this country until we know the answer to questions as yet unanswered and know the economic circumstances that have not, as yet, unfolded.

    Dr. Jeremy Bray (Motherwell, South) Does the Prime Minister exclude UK participation in any exchange rate arrangements if EMU does go ahead?

    The Prime Minister I certainly do not exclude UK agreement to matters such as inflation targets in order to ensure a market-driven route towards largely convergent economic policies and secure exchange rates. I do not believe that going back into the artificiality of an exchange rate mechanism, which, on this occasion, would be outside the core currencies, is a negotiable proposition among the Heads of Government and it is not one that I would wish sterling to join, as I said earlier.

    Sir Giles Shaw (Pudsey) May I congratulate my right hon. Friend on the way in which he is handling these issues? I remind him that a policy which is both careful and cautious is a policy of prudence and that, bearing in mind the complexity and the scale of the ultimate decisions on the matter, he is absolutely right to occupy the crease and bat for Britain as long as it takes?

    The Prime Minister I am grateful to my hon. Friend, who has a long and distinguished interest in European matters. I assure him that I shall continue to do that. When I indicated to the House earlier that the decisions taken upon monetary matters and enlargement were crucial not just to the future of this country but to the future of all Europe, I did not regard that as a casual throwaway line, but I meant it to be taken absolutely as I stated it. It is fundamentally true. For that reason, I believe that we have an obligation to be cautious. The burden of proof must rest upon those who wish us to make the change rather than those who wish us not to do so. I think that we are right to be cautious and I will remain cautious.

    Mr. Dennis Skinner (Bolsover) Is not the truth of the matter that the Madrid decisions, with which the Prime Minister acquiesced, represent another two or three small steps towards economic and monetary union? Why did not the Prime Minister vote against some of the issues that were presented to him? Why did not the Government decide to oppose that barmy name “Euro” for the currency? Is not the fact of the matter that the Prime Minister has come here today to represent a lot of camouflage about the Madrid summit to try to appease his Back Benchers, when the truth is that he sold out at Madrid and that the people out there will understand that?

    The Prime Minister If camouflage was needed, I would have thought that it was between the Labour Front Bench and below the Gangway on that side of the House. If there is going to be a debate, I suggest that it starts on Labour Benches, and Labour Members can try and work out precisely what their position is. We now see just how split, despite all they have said, they really are on European matters, and have been right from the start. [HON MEMBERS: “Answer the question.”] The answer to the hon. Gentleman’s question, in every respect, is no.

    Mrs. Edwina Currie (South Derbyshire) While it is correct, as my right hon. Friend has said, that if the wrong decisions are taken on monetary union, the result will be turmoil and chaos, could I possibly dig out of him an admission, however tentative, that if the right decisions are taken, to create a currency union among 150 million of the world’s richest citizens could be highly beneficial to all the nations concerned?

    The Prime Minister My hon. Friend puts precisely the question to which an answer needs to be found. We cannot be certain of an answer to that question without answers to the questions that I asked in Madrid, which is precisely why I asked those questions. We need to know the answers before making a judgment, which is the view of a number of people in Europe. Equally passionate views are held in the opposite direction. Until we know the details and answers to those questions, it is not possible to take a rational view of the implications of a single currency. That is what I seek to provide.

    Mr. Tam Dalyell (Linlithgow) My question is on a different but increasingly important issue, in view of events in Russia: the Community’s relations with the Ukraine. What exactly are we doing to help those people? In his talks with President Kuchma last week, what did the Prime Minister respond to the President, who is also the former technical director of Baikenor, on technical co-operation, not least in relation to the Ukraine’s valuable resources in space, which are left over from the Soviet Union, and the skills that could benefit us all?

    The Prime Minister I raised a number of matters when I spoke to President Kuchma a week or so ago. As the hon. Gentleman and the House would have expected, we discussed Chernobyl and spent some time discussing the package of support that the international community has now provided for closing Chernobyl at the turn of the century. We also looked at a variety of ways in which we could increase the trading and investment relationship between the United Kingdom and the Ukraine. There is huge scope, particularly in the energy sector, for the mutual benefit of British investment and for British technology to go into the Ukraine, where it would be warmly welcomed by the Ukrainians. I also stressed to President Kuchma that one of the inhibitions to ensuring that that investment can proceed are the present financial and legal restraints in parts of the Ukraine.

    That was the substance of our discussion. It was an extremely worthwhile visit, which will be followed up by further ministerial visits to the Ukraine. I hope that some of those will take with them high-powered delegations of business men, so that we can examine the business relationship between the United Kingdom and the Ukraine and build on it, because the Ukraine will be an important part of the European business scene in future.

    Mr. Hugh Dykes (Harrow, East) Despite the usual trading of insults between the party leaders today on this momentous matter, which is of great importance to this country, and the regrettable lack of listening to the sensible suggestions made by the leader of the Liberal Democrats, would not it be a good idea for the party leaders to get together? As a large majority of Members of this House are in favour of EMU, they could, on a free-vote basis, present the positive factors in favour of monetary union to the British public.

    The Prime Minister I always believe in the politics of rationality. My hon. Friend pitches a question that would demand a high price for the Leader of the Opposition in terms of discussing the reality of what lies immediately ahead. I saw no great sign of it from the leader of the Liberal Democrats this afternoon. If we can determine the answer to the questions that I have put, they will be material to framing the opinions of people in this House and beyond about the desirability or otherwise of the course that was set out some time ago. I reiterate the same point because it is undeniable: without that information, credible decisions cannot be taken. I am trying to provide it. I shall then willingly make it available to the Leader of the Opposition in a tutorial or in any other way that he wishes.

    Mrs. Margaret Ewing (Moray) As a decision must ultimately be taken, will a time limit be placed on the study? What will happen once the study becomes available? Will it be widely available and how will we move into decision mechanisms?

    The Prime Minister It is not quite clear how long the study will take. I saw it reported that it will take two or three years. That is clearly nonsense – it will take nothing like that. I would expect a report when we get to Florence in the summer, but I am not sure whether it will be the definitive report, and neither is anybody else. Once the report has been produced, I am sure that it will be discussed by ECOFIN and the European Council. It may be placed on the European Council’s agenda, but that has not yet been decided.

    Sir Teddy Taylor (Southend, East) In view of the substantial misery and unemployment created already by European fixed exchange rates, is the Prime Minister aware that people with all kinds of views of EMU will enthusiastically welcome his statement that, in the event of the “Euro” being established by a small number of countries, there is no way that sterling will have a fixed relationship with it? Am I correct in my interpretation and, if so, does the Prime Minister accept that that will be very widely welcomed, not only in the Conservative party?

    The Prime Minister Yes, my hon. Friend sets out the position entirely accurately. It is as he says.

    Mr. Tony Banks (Newham, North-West) May I say to the Prime Minister that, personally; I very much welcome the concept of a single currency, although certain safeguards are necessary, including making unemployment levels part of the convergence criteria?

    On a more practical matter, was the story in the Sunday newspapers – that the Queen’s head is too large for the “Euro” coin – true? If that is so, does the Prime Minister intend to negotiate the size of the coin, or does he have more drastic measures in mind?

    The Prime Minister On the hon. Gentleman’s first argument about unemployment levels, I simply have to say to him that, if he were to make unemployment levels part of the convergence criteria, there would be no single currency in his political lifetime, however long that is likely to be.

    Ms Clare Short (Birmingham, Ladywood) It depends what the banding is.

    The Prime Minister The hon. Lady says, “It depends what it is.” She probably believes that the 13 per cent. of France is a good convergence level. I am not sure that that is what her hon. Friend had in mind. Perhaps that is another difference between Labour Front and Back-Bench Members; I cannot imagine. We seem to be uncovering so many differences today that it is difficult to determine. Let us hope that we can go on and find some more.

    Sir Peter Hordern (Horsham) As very few countries will be able to qualify for the single currency, will my right hon. Friend say what the position of those countries will be when they find that their economies are subject to intense competition from the countries that do not form part of the single currency? Will he give the House an assurance that, in that event, there can be no suggestion of any reprisals being taken by members of the single currency against countries outside it?

    The Prime Minister My right hon. Friend puts his finger on precisely one of the matters that I have been raising with our colleagues at the European Council. It is precisely for that reason that some of the countries that anticipate that they will be in a single currency have asked for an exchange rate mechanism outside the single currency, to prevent the flexibility with which countries usually deal with economic difficulties. The danger of that, apart from the inherent difficulties that have been demonstrated several times in the past six or seven years, is that it would lead to very high structural levels of unemployment in some of the weaker-performing countries in the southern part of Europe.

    That is precisely the matter that the hon. Member for Newham, North-West (Mr. Banks) brought to the forefront of my mind a moment or so ago, when he suggested that unemployment levels should be convergent. If that were the case, many of the southern countries of Europe would never, on that basis, be likely to meet the criteria for gaining admission to a single currency. That might mean that a European Union – although I believe that it will become more variable in the application of its policies to different members, and I believe that that is desirable – would for the first time find a fundamental variation in policy on one of the very basics of the whole basis of the European Union, that is, the currency question.

    Those are questions of immense importance. There is, as yet, no credible answer to the question that my right hon. Friend asks. I am asking for one.

    Mr. Nigel Spearing (Newham, South) As economic and monetary union surely requires the convergence of the total economies of the member states, why is it that only certain indices in the public sector are included? Why not also include comparable indices in the balancing private sector?

    Surely economic and monetary union also requires the establishment of a centralised, absolute monarchy of bankers, who are separate from national Governments and from the institutions of the Community. However, surely one of the principles of European Union is to defend the western view of democracy, which is voting into power assemblies that, in turn, control government? Is not that an anomaly, and will the Prime Minister tell us whether the European Council has explained that anomaly? If it has not, will he do so now?

    The Prime Minister I have some sympathy with the hon. Gentleman’s earlier comments about convergence, although he is plainly wrong when he refers to convergence as only affecting matters in the public sector. One of the most important convergents is a high degree of price stability. Price stability, which has clear implications for what is happening elsewhere in the economy, not only is a matter for the public sector, but goes right across the economy as a whole. The hon. Gentleman is wrong on that point and I think that his subsequent points were addressed and determined many years ago.

    Mr. Bernard Jenkin (Colchester, North) May I congratulate my right hon. Friend on his description of the other member states, which he said were rushing like lemmings over a cliff towards currency union? While 150 million people may be inside the currency union, is it not a fact that 5.5 billion people remain outside it? Is it not a perfectly viable option for this country to choose to opt out of monetary union and model ourselves on the thousands of economies round the world – large and small – which have independent currencies?

    The Prime Minister That is certainly an option. From the moment when I negotiated the opt-out at Maastricht, it has always been possible that this country might decide to take the decision, in its own interests, not to be a part of a larger currency union. There is no doubt that we could continue without entering into a currency union. We would have to decide whether the balance of advantage for the Government, the City, the economy and our future trading relationships rested with our being in or being out. That is precisely the substantive point. Of course we could be out and there is no doubt that we could stay out. We shall have to weigh the balance of advantage when the time comes.

    My hon. Friend is correct in his earlier point: more citizens of Europe will be outside the single currency at the outset, and for some years afterwards, than inside it.

    Mr. Donald Anderson (Swansea, East) Will the Prime Minister confirm that it was the common understanding of our partners at Madrid that no substantive decisions would be made on the IGC until after the conclusion of the election in this country? Does that not mean that, increasingly, this Administration will be seen by our partners as a lame duck Administration, which is bad for Britain?

    The Prime Minister The hon. Gentleman builds his question upon a false premise, as there was no such agreement at Majorca or at Madrid. When we begin the intergovernmental conference, which will be launched in Turin on 29 March, I hope that we shall begin to take decisions as we move through the year. Decisions will not all be held to the end of the year. We may complete the intergovernmental conference within a year, or it may take longer. If we complete it within a year, the whole matter may be determined within the lifetime of this Parliament. That is the decision that I have reached and, unless the hon. Gentleman was serving biscuits somewhere, he is in no position to shake his head.

    Sir Archibald Hamilton (Epsom and Ewell) Does my right hon. Friend agree that much of the drive in Europe has come from Germany, which has a lot to do with the fact that Chancellor Kohl is ashamed of Germany’s past and frightened for its future? Does my right hon. Friend also agree that the democratic institutions in Europe are woefully inadequate? If we drive towards political union without proper democratic representation at the centre, it will lead to the emergence of fascist and ultra-nationalist parties, which will want to withdraw from Europe and break up the European Union. That would deny Chancellor Kohl the goal that he is seeking and, for many hon. Members, would lead to a very unsatisfactory outcome.

    The Prime Minister The democratic institutions of Europe are bound to be considered at the intergovernmental conference. That is true of both the present powers and nature of the European Commission and the other institutional questions, which will be considered expressly during the forthcoming intergovernmental conference. We must examine those issues for another reason, apart from those set out by my right hon. Friend. As the European Union enlarges – as I profoundly hope that it will – I believe that it will provide an historic opportunity for this generation of politicians to change the face of Europe in a thoroughly beneficial way. In those circumstances, many of the present institutions of the European Union will prove inadequate to deal with the enlarged number.

    Several hon. Members rose –

    Madam Speaker Thank you, Prime Minister. We must now move on to the second statement. I regret that so many hon. Members are disappointed, but I have kept the Prime Minister at the Dispatch Box for more than an hour.

  • Presidency Conclusions Following Madrid European Council – 16 December 1995

    Below is the text of the Presidency Conclusions, following the Madrid European Council meeting held on 15th and 16th December 1995.

    INTRODUCTION

    The European Council, meeting in Madrid on 15 and 16 December 1995, took decisions on employment, the single currency, the Intergovernmental Conference and enlargement to bring in countries of Central and Eastern Europe and the Mediterranean.

    The European Council considers that job creation is the principal social, economic and political objective of the European Union and its Member States, and declares its firm resolve to continue to make every effort to reduce unemployment.

    The European Council adopted the scenario for the changeover to the single currency, confirming unequivocally that this stage will commence on 1 January 1999.

    The European Council decided to name the currency, to be used from 1 January 1999, the “Euro”.

    The European Council continued its deliberation on the future of Europe, which was launched in Essen and continued in Cannes and Formentor.

    In this connection, having welcomed the Reflection Group’s report, the European Council decided to launch the Intergovernmental Conference on 29 March 1996 in order to establish the political and institutional conditions for adapting the European Union to present and future needs, particularly with a view to the next enlargement.

    It is essential that the Conference achieve results sufficient to enable the Union to bring added value to all its citizens and to shoulder its responsibilities adequately, both internally and externally.

    The European Council notes with satisfaction some significant achievements in the area of external relations which have occurred since its last meeting and in which the European Union has played a decisive role:

    – the signing in Paris of the Dayton Agreement, which puts an end to the terrible war in former Yugoslavia and builds on considerable European efforts over the preceding months in military, humanitarian and negotiating terms. The European Council recognizes the decisive contribution made by the United States at a crucial moment;

    – the New Transatlantic Agenda and the Joint EU – US Action Plan signed at the Madrid Summit on 3 December 1995, which are major joint commitments with the United States to revitalize and strengthen our association;

    – the signing in Madrid of the Inter-Regional Framework Agreement between the European Union and Mercosur, the first agreement of this type to be concluded by the European Union;

    – the Barcelona Declaration, launching a new, comprehensive Euro-Mediterranean association which will promote peace, stability and prosperity throughout the Mediterranean through a permanent process of dialogue and cooperation;

    – the signing in Mauritius of the revised Lomé IV Convention by the European Union and the ACP States, which will consolidate the association between the two sides;

    – the European Parliament’s assent to the customs union between the European Union and Turkey, which opens the way for the consolidation and strengthening of a political, economic and security relationship crucial to the stability of that region.

    The European Council began its proceedings by exchanging ideas with Mr Klaus HÄNSCH, President of the European Parliament, on the main subjects for discussion at this meeting.

    Finally, a meeting took place today between the Heads of State and Government and the Ministers for Foreign Affairs of the associated countries of Central and Eastern Europe, including the Baltic States (CCEE), as well as Cyprus and Malta. There was a broad exchange of views on these conclusions, matters concerning the pre-accession strategy and various issues relating to international policies.

    I: ECONOMIC REVITALIZATION OF EUROPE IN A SOCIALLY INTEGRATED FRAMEWORK

    1. ECONOMIC AND MONETARY UNION
    2. The scenario for the changeover to the single currency
    3. The European Council confirms that 1 January 1999 will be the starting date for Stage 3 of Economic and Monetary Union, in accordance with the convergence criteria, timetable, protocols and procedures laid down in the Treaty.

    The European Council confirms that a high degree of economic convergence is a precondition for the Treaty objective to create a stable single currency.

    1. The name of the new currency is an important element in the preparation of the transition to the single currency, since it partly determines the public acceptability of Economic and Monetary Union. The European Council considers that the name of the single currency must be the same in all the official languages of the European Union, taking into account the existence of different alphabets; it must be simple and symbolize Europe.

    The European Council therefore decides that, as of the start of Stage 3, the name given to the European currency shall be Euro. This name is meant as a full name, not as a prefix to be attached to the national currency names.

    The specific name Euro will be used instead of the generic term “ECU” used by the Treaty to refer to the European currency unit.

    The Governments of the fifteen Member States have achieved the common agreement that this decision is the agreed and definitive interpretation of the relevant Treaty provisions.

    1. As a decisive step in the clarification of the process of introduction of the single currency, the European Council adopts the changeover scenario attached in Annex 1 which is based on the scenario elaborated at its request by the Council, in consultation with the Commission and the European Monetary Institute. It notes with satisfaction that the scenario is compatible with the EMI report on the changeover.
    2. The scenario provides for transparency and acceptability, strengthens credibility and underlines the irreversibility of the process. It is technically feasible and aims to provide for the necessary legal certainty, to minimize adjustment costs and to avoid competitive distortions. Under the scenario, the Council, in the composition of Heads of State or Government, will confirm as early as possible in 1998 which Member States fulfil the necessary conditions for the adoption of the single currency. The European Central Bank (ECB) will have to be created early enough so as to allow preparations to be completed and full operation to start on 1 January 1999.
    3. Stage 3 will begin on 1 January 1999 with the irrevocable fixing of conversion rates among the currencies of participating countries and against the Euro. From that date, monetary policy and the foreign exchange rate policy will be conducted in Euro, the use of the Euro will be encouraged in foreign exchange markets and new tradeable public debt will be issued in Euro by the participating Member States.
    4. A Council Regulation, whose technical preparatory work shall be completed at the latest by the end of 1996, will enter into force on 1 January 1999 and provide the legal framework for the use of the Euro, which, from this date, will become a currency in its own right, and the official ECU basket will cease to exist. This regulation will establish, as long as different monetary units still exist, a legally enforceable equivalence between the Euro and the national units. The substitution of the Euro for national currencies should not of itself alter the continuity of contracts, unless otherwise provided in the contract. In the case of contracts denominated by reference to the official ECU basket of the European Community, in accordance with the Treaty, substitution by the Euro will be at the rate of one to one, unless otherwise provided in the contract.
    5. By 1 January 2002 at the latest, Euro banknotes and coins will start to circulate alongside national notes and coins. At most 6 months later, the national currencies will have been completely replaced by the Euro in all participating Member States, and the changeover will be complete. Thereafter, national banknotes and coins may still be exchanged at the national Central Banks.
    6. The European Council calls on the ECOFIN Council to speed up all the additional technical work necessary to implement the changeover scenario adopted today. The labelling of Euro banknotes and coins in the different alphabets of the Union will also be defined.
    7. Further preparation of Stage 3 of EMU

    Durable economic convergence

    Budgetary discipline is of crucial significance both for the success of the Economic and Monetary Union and for the acceptance of the single currency by the public. It is therefore necessary to ensure that, after moving to Stage 3, public finances are kept on a sound track in line with Treaty obligations.

    The European Council notes with interest the Commission’s intention to present in 1996 its conclusions on ways to ensure budgetary discipline and coordination in the monetary union in accordance with the procedures and principles of the Treaty.

    The relationship between Member States participating in the Euro area and non-participating Member States.

    The future relationships between Member States participating in the Euro area and non-participating Member States will have to be defined prior to the move to Stage 3.

    The European Council requests that the ECOFIN Council, together with, in their respective fields of competence, the Commission and the EMI, study the range of issues raised by the fact that some countries may not initially participate in the Euro area. In particular, the study should cover those issues related to monetary instability.

    Work ahead

    The European Council requests the ECOFIN Council to report on the two foregoing questions as soon as possible.

    Work on both questions should respect the Treaty requirement that Member States entering the Euro area after 1999 should be able to do so on the same terms and conditions as those applied in 1998 to the initial participating Member States.

    1. BROAD ECONOMIC POLICY GUIDELINES

    The European Council reiterates the need to maintain a high degree of convergence between Member States’ economies on a durable basis, in order both to create stable conditions for changing over to the single currency and to secure smooth functioning of the internal market. In that connection, it approved the Council report on the implementation of the broad economic policy guidelines adopted in July 1995.

    1. EMPLOYMENT
    2. The European Council reaffirms that the fight against unemployment and for equal opportunities is the priority task of the Community and its Member States.

    The medium-term strategy outlined in Essen and confirmed at Cannes provides the appropriate framework for developing the measures agreed. These measures have already begun to apply in the Member States with generally positive results, thanks mainly to an appropriate combination of structural measures and policies favouring sustained economic growth.

    The European Council welcomes the Commission’s interim report and assessment of the mutually beneficial effects of greater coordination of the Union’s economic and structural policies. It requests the Commission to submit its final report at the European Council meeting in December 1996.

    1. The European Council is pleased with the way in which the procedure for monitoring employment provided for in Essen, based on a strategy of cooperation between all those involved in this common endeavour, has been formulated and put into practice for the first time:

    – the Member States have translated the Essen recommendations into multiannual employment programmes incorporating innovative measures which have already started to bear fruit and which are the appropriate instrument for transposing the recommendations to be adopted by the Council in the socio-economic area;

    – the job-creation strategy in the European Union will receive a new impetus with the approval by the European Council of the joint report submitted by the Council (ECOFIN and Labour and Social Affairs) and the Commission (Annex 2). For the first time a convergence of views has been achieved on the approach to be followed to ensure that the current economic recovery is accompanied by a more thoroughgoing improvement in the employment situation.

    The approval of that report fulfils the Essen instructions on monitoring employment and consolidates the employment policies agreed at previous European Council meetings. With the cooperation of all parties involved, new steps are being taken not only towards identifying the obstacles in the way of reducing unemployment but above all in connection with the macro-economic and structural aspects which substantially favour the creation of new jobs;

    – it welcomes the fact that, in their Declaration from the Social Dialogue Summit in Florence, the social partners at European level arrived at a common criterion for measures to promote employment. Similarly, it is pleased to note the broad degree of convergence between this agreement by the social partners and the criteria in the single report;

    – within this same line of involvement of the various players and institutions operating within the European Union, the European Council has examined with great interest the European Parliament Resolution on employment, observing here too the broad convergence between that Resolution and the single report.

    1. On the basis of the recommendations in the single report, the European Council urges Member States to regard as priorities the following spheres of action in their multiannual employment programmes:

    – stepping up training programmes, especially for the unemployed;

    – rendering business strategies more flexible in areas such as the organization of work and of working time;

    – ensuring a pattern of non-wage labour costs appropriate to unemployment-reducing objectives;

    – continuing the current wage restraint by linking it to productivity, as an essential element in promoting intensive use of manpower,

    – obtaining the maximum level of efficiency in social protection systems so that, while maintaining where possible the level attained, they never act as a disincentive to seeking work;

    – pressing for greater conversion of passive policies to protect the unemployed into active job-creation measures;

    – substantially improving the machinery for information between those providing and those seeking employment;

    – promoting local employment initiatives.

    The above measures will be applied with particular emphasis on those categories requiring special attention, such as young people seeking their first job, the long-term unemployed and unemployed women.

    As regards measures on wage restraint, it recalls that such action falls within the social partners’ own sphere. The development of social security contributions points to the need to act within a margin for manoeuvre which will preserve the financial stability of social protection systems.

    The degree of application of the multiannual employment programmes and the recommendations adopted in Madrid will have to be reviewed at the European Council meeting in December 1996, with the aim of reinforcing the employment strategy and adopting further recommendations.

    1. The European Council reiterates the need to ensure economic growth which generates more employment and urges Member States to persevere with policies in line with the broad economic policy guidelines, backing them up with the structural reforms already initiated or awaiting application, with the aim of eliminating existing rigidities and achieving better operation of labour markets in the goods and services sectors.

    Maximum advantage must be taken of the opportunity offered by the current phase of economic expansion to achieve additional progress in the structural reforms required.

    1. The European Council emphasizes lastly the important job-creation role played by internal policies, especially the internal market, environment policy, SMEs and the trans-European networks.
    2. Members of the European Council that participate in the Agreement annexed to the social protocol to the Treaty note with satisfaction that for the first time an agreement has been reached with the social partners in the framework of that Agreement, in connection with the draft Directive on combining working and family life (parental leave). It hopes this agreement will open the way for subsequent agreements in other important social and employment areas.
    3. Lastly, in order to ensure the continued success of this strategy, it requests the Council (ECOFIN and Labour and Social Affairs) and the Commission to monitor the application of those programmes continuously and to submit a further joint annual report for its meeting in December 1996. So as to facilitate practical application of the employment monitoring procedure decided on in Essen, it is necessary to establish as soon as possible the mechanisms envisaged in the joint report (stable structure and common indicators). The European Council reaffirms its determination to continue to give the objective of job creation maximum priority in the European Union in the years to come.
    4. OTHER POLICIES

    Internal market

    The European Council takes note of the Commission report on the internal market and welcomes the agreements reached on a significant number of proposals and the adoption of a new procedure for notifying national measures which could hinder the free movement of goods, thus ensuring effective application of the principle of mutual recognition.

    The European Council took note of the CIAMPI report on competitiveness and instructed the Council to examine it.

    The internal market must benefit its citizens and integrate them to the full, through the application of the Treaty provisions on freedom of movement, better protection for consumers, an improvement in the social dimension and the development of mechanisms to inform citizens of the advantages they can obtain from the internal market and to gain a better understanding of their needs.

    The European Council stresses the importance of completing the establishment of the internal market by introducing greater competition in many sectors in order to improve competitiveness with a view to job creation. In this connection the European Council reaffirms its 1995 Cannes conclusions regarding the need to make that objective compatible with the performance of tasks of general economic interest specific to the public services. In particular, it is necessary to ensure equal treatment for citizens, uphold requirements as to quality and continuity of services, and contribute to balanced regional development.

    The European Council confirms that trans-European networks can make an essential contribution to competitiveness, job creation and the cohesion of the Union. It takes note with satisfaction of the Commission report and of progress recently achieved in this area. It calls upon the Council and the Parliament to complete the legislative framework rapidly and upon Member States to give top priority to the effective implementation of projects and, in particular, those identified by the European Council as being of special importance.

    The European Council requests the ECOFIN Council to adopt, on a proposal from the Commission, the necessary decisions to complement the financial resources currently available for the Trans-European Networks.

    SMEs

    The European Council took note of the Commission report on the role played by SMEs as a source of jobs, growth and competitiveness, which points in particular to the need to:

    – simplify administrative formalities;

    – ensure better access to information, training and research;

    – remove obstacles affecting SMEs within the internal market and promote their internationalisation;

    – improve the financial environment for them by means of better access to capital markets and encourage development of the European Investment Fund function with regard to SMEs.

    The European Council urges the Commission to put these aims into practice as swiftly as possible in the framework of the next integrated programme for SMEs.

    Environment

    The European Council welcomes the clear and decisive role the Union has been playing internationally in defence of the environment, especially in the control of transboundary movements of hazardous wastes and their disposal (Basle Convention), biological diversity, substances that deplete the ozone layer (Montreal Protocol) and other subjects dealt with at the Third Pan-European Conference of Environment Ministers.

    The European Council notes with satisfaction the important agreements reached in the context of that policy and the debate on a new integrated approach centring not only on the quality of water but also on its scarcity as a limited economic and environmental resource.

    Agriculture

    The European Council welcomes the progress of work on the reforms of the common market organizations (CMOs). It urges the Council to ensure that the common organization of the market in rice is adopted before the end of the year and the common organization of the market in wine as soon as possible. It asks the European Parliament to deliver its Opinion on the proposed reform of the common organization of the market in fruit and vegetables with a view to its adoption at the earliest opportunity.

    Fisheries

    The European Council notes that Council proceedings have resulted in full compliance with the instructions given by the European Council at Essen, leading to full integration of Spain and Portugal into the common fisheries policy.

    II: A CITIZEN-FRIENDLY EUROPE

    1. SUBSIDIARITY

    The European Council held an exchange of views on the application of the principle of subsidiarity as set out in the Treaty. It confirmed the guidelines established at its meetings in Birmingham and Edinburgh, which should inform Union action.

    The European Council took note of the second annual report from the Commission on the application of the subsidiarity and proportionality principles, and is pleased that the 1993 programme on the adaptation of existing legislation to the principle of subsidiarity is practically finalized.

    It requested the Commission to report to the European Council at its meeting in Florence on the application of the principles of subsidiarity and proportionality to current EC legislation and to proposals under consideration.

    1. POLICIES CLOSE TO THE CITIZEN

    The European Council urges progress in the fight against social exclusion in its various forms, taking the view that solidarity is an essential factor for integration and the attainment of common objectives within the European Union.

    The European Council takes note of the approval of the fourth programme on equal rights and opportunities for women and men and wishes to continue action in favour of women with a view to achieving fully equal treatment. For the same purpose, the European Union will also monitor annually the action platform which emerged from the Beijing Conference.

    The European Council reaffirms the importance of cultural action as a way of fostering a Community dimension in the cultures of all the Member States of the Union. The European Council stresses its interest in very shortly arriving at a viable agreement on the RAPHAEL programme regarding cultural heritage of European significance.

    The European Council welcomes the renewal of the Media programme and also the decisive progress achieved in the Council on the proposal to amend the Directive on television without frontiers, which will, it hopes, be adopted as soon as the necessary conditions obtain.

    The European Council notes the work done on the protection of public health and urges adoption of the programmes to combat cancer and to combat AIDS and the programme of action on health education and training.

    The European Council notes the major report on the state of health in the European Union and trusts that the European Parliament and the Council will be able to adopt the programme of action on health monitoring and inspection as soon as possible.

    The European Council expresses satisfaction at the progress made in achieving greater transparency in Council proceedings, through the approval of a Code of Conduct to facilitate public access to Council minutes and statements when the Council acts as legislator, and at the growing number of debates which have been broadcast to the public.

    The European Council welcomes the adoption of two Decisions on consular protection, which will give citizens of the Union access to all the Member States’ consulates in third countries, in compliance with Article 8c of the Treaty.

    1. JUSTICE AND HOME AFFAIRS

    The European Council took note of the report on activities carried out in 1995 in the field of justice and home affairs, which describes a very wide range of activities, among them the conclusion of four Conventions and the establishment of the Europol Drugs Unit.

    It is the European Council’s ambition that the Union can create an area of freedom and security for its citizens and it requests that, with a view to extending cooperation in these areas, future activities be focused on programmed priority areas, including Europol, over a number of Presidencies, particularly in relation to:

    1.Terrorism

    The European Council notes with great satisfaction the Council’s approval of the La Gomera Declaration on terrorism (Annex 3) as evidence of the Union’s firm resolve to reinforce collaboration in the fight against terrorism, one of the priority objectives of cooperation in justice and home affairs. It urges the Council to give expression to such cooperation in the form of effective practical measures.

    1. Drugs and organized crime

    The European Council approves the report of the Group of Experts on Drugs and stresses the urgency of translating the guidelines it contains into precise, coordinated operational activities within the Union.

    The European Council invites the incoming Italian Presidency, in collaboration with the future Irish Presidency and after consultation of the Member States, the Commission, the Europol Drugs Unit and the European Monitoring Centre for Drugs and Drug Addiction, to prepare a programme of activities which takes account of the guidelines in that report. The European Council will examine progress in the application of that report in December 1996.

    In this connection, the European Council considers it a matter of priority to establish a mechanism for cooperation between the European Union and Latin America, including the Caribbean, to combat drugs. It considers that the international strategy for combating drug abuse and unlawful trafficking in drugs must be based on a comprehensive, coordinated approach designed to reduce drug supply and demand through bilateral cooperation between both regions. It welcomes the Franco-British initiative on the Caribbean, which proposes regional action to combat trafficking in narcotics and which is also included in action under the Transatlantic Agenda.

    The European Council calls upon the Council and the Commission to prepare a report and the requisite proposals for action in both areas by April 1996. An ad hoc Working Party on drugs will be set up for the purpose.

    The European Council is pleased that an Agreement on precursors will be signed in Madrid on 18 December 1995 between the Community and the five countries of the Andean Pact, an important step forward in this strategy. In that connection, it supports the maintenance of preferences for the Andean countries and Central America as part of the special arrangements for combating drugs in the Generalized Scheme of Preferences.

    The European Council also expresses satisfaction at the Conference on drugs held in Brussels on 7 and 8 December 1995.

    The European Council takes note of the proceedings on organized crime and urges the Council to adopt the necessary operational measures to combat this threat to all the Member States.

    The European Council calls upon the Council and the Commission to consider the extent to which harmonisation of Member States’ laws could contribute to a reduction in the consumption of drugs and unlawful trafficking in them.

    1. Judicial cooperation

    The European Council considers that priority should be given to extradition and mutual judicial assistance in criminal matters and to the extension of the Brussels Convention and document transmission in civil matters. It expresses satisfaction at the signing of the Convention on insolvency proceedings.

    1. Immigration and asylum

    The European Council expresses satisfaction at the results achieved regarding third-country nationals residing illegally in the Union, readmission agreements and combating illegal immigration and illegal employment, and urges the Council to continue proceedings in this area.

    The European Council also expresses satisfaction at the approval of the Resolution on burden-sharing with regard to the admission of displaced persons, and the Decision on an alert and emergency procedure for burden-sharing.

    The European Council takes note of the common position aimed at harmonized application of the definition of the term “refugee” within the meaning of Article 1 of the Geneva Convention and calls for ratification of the Dublin Convention to be completed.

    1. External frontiers

    The European Council urges the Council to settle as soon as possible the issues outstanding with regard to the adoption of the Convention on persons crossing the external frontiers of the Member States of the European Union and welcomes the results achieved on visas.

    1. Racism and xenophobia

    The European Council took note of the results obtained on defining strategies to combat racism and xenophobia (Annex 4); it urges adoption of the Joint Action concerning action to combat racism and xenophobia with the aim of approximating Member States’ laws and enhancing the opportunities for judicial assistance between the Member States in this area.

    The European Council took note of the interim report from the Consultative Commission and instructs it to continue its proceedings on that basis and complete the feasibility study for a European Monitoring Centre on Racism and Xenophobia in time for the European Council meeting in June 1996.

    1. FRAUD AND PROTECTION OF FINANCIAL INTERESTS

    The European Council took note of the comparative analysis and synthesis document on national measures taken to combat wastefulness and the misuse of Community resources, prepared by the Commission on the basis of reports from the Member States.

    The European Council supports the conclusions approved by the Economic and Financial Affairs Council (Annex 5) and calls upon the Member States and the Institutions to adopt the necessary measures to ensure an equivalent level of protection throughout the Community and in the Community budget and the EDF as a whole.

    The European Council also expresses satisfaction at the imminent adoption of the Regulation on the protection of the European Communities’ financial interests and the signing of the relevant Convention.

    It calls upon the Commission to submit a proposal shortly on checks and verifications in situ and requests the Economic and Financial Affairs Council to adopt those provisions before the European Council meeting in June.

    The European Council also notes with satisfaction that consensus has been reached on an Additional Protocol to the Convention on the protection of the European Communities’ financial interests which is designed to harmonize treatment of corruption on the part of both national and European officials and members of Community or national institutions and bodies as a criminal offence.

    It calls upon the JHA Council to continue its proceedings in order to supplement the Convention, particularly in the field of judicial cooperation.

    The European Council welcomes the Commission initiative on sound financial management and particularly its decision to establish a group of personal representatives to identify priority action at Community and national level with a view to improving budget execution and making good the shortcomings in financial management identified by the Court of Auditors.

    It invites the Commission and the Council to examine the possibility of extending the system of clearance of accounts from agriculture to other sectors.

    1. LEGISLATIVE AND ADMINISTRATIVE SIMPLIFICATION

    The European Council reaffirms the importance of preventing the imposition of unnecessary burdens on business activity, through a process of legislative and administrative simplification which must preserve the “acquis communautaire” and be accompanied by national measures contributing to the same objective. In this respect it refers to the Commission report on the report from the independent experts group.

    It calls upon the Commission to table its new proposals for the consolidation of Community law and upon the Council to act as soon as possible.

    III: A EUROPE OPEN TO THE WORLD, ENJOYING STABILITY, SECURITY, FREEDOM AND SOLIDARITY

    1. ENLARGEMENT

    Enlargement is both a political necessity and a historic opportunity for Europe. It will ensure the stability and security of the continent and will thus offer both the applicant States and the current members of the Union new prospects for economic growth and general well-being. Enlargement must serve to strengthen the building of Europe in observance of the acquis communautaire which includes the common policies.

    With that in mind, the European Council took note of the Commission reports on the effects of enlargement on the policies of the European Union, on alternative strategies in agriculture and on the progress of the pre-accession strategy for the associated countries of Central and Eastern Europe.

    The European Council takes note of the Council report on relations with the associated CCEE during the second half of 1995 (Annex 6).

    The PHARE programme, as supported by the European Council’s decisions at its Cannes meeting, and the continued activities of the European Investment Bank will allow an overall increase in the input for accession preparations.

    The European Council reiterates that the accession negotiations with Malta and Cyprus will commence, on the basis of the Commission proposals, six months after the conclusion of the 1996 Intergovernmental Conference, and will take its results into account. It is pleased that structured dialogue with both countries began in July 1995 within the framework of the pre-accession strategy.

    The European Council also confirms the need to make sound preparation for enlargement on the basis of the criteria established in Copenhagen and in the context of the pre-accession strategy defined in Essen for the CCEE; that strategy will have to be intensified in order to create the conditions for the gradual, harmonious integration of those States, particularly through the development of the market economy, the adjustment of their administrative structures and the creation of a stable economic and monetary environment.

    The European Council calls upon the Commission to take its evaluation of the effects of enlargement on Community policies further, particularly with regard to agricultural and structural policies. The European Union will continue its review at its next meetings on the basis of reports from the Commission.

    It asks the Commission to expedite preparation of its opinions on the applications made so that they can be forwarded to the Council as soon as possible after the conclusion of the Intergovernmental Conference, and to embark upon preparation of a composite paper on enlargement. This procedure will ensure that the applicant countries are treated on an equal basis.

    It also calls upon the Commission to undertake a detailed analysis as soon as possible of the European Union’s financing system in order to submit, immediately after the conclusion of the Intergovernmental Conference, a communication on the future financial framework of the Union as from 31 December 1999, having regard to the prospect of enlargement.

    Following the conclusion of the Intergovernmental Conference and in the light of its outcome and of all the opinions and reports from the Commission referred to above, the Council will, at the earliest opportunity, take the necessary decisions for launching the accession negotiations.

    The European Council hopes that the preliminary stage of negotiations will coincide with the start of negotiations with Cyprus and Malta.

    1. EXTERNAL RELATIONS

    FORMER YUGOSLAVIA

    The European Council expresses satisfaction at the fact that the Peace Agreement negotiated in Dayton was signed in Paris on 14 December 1995 and confirms its determination to make a substantial contribution to implementing it.

    The European Council welcomes the adoption by the United Nations Security Council of the Resolution supporting the peace agreements signed in Paris and applying their provisions at both civil and military level.

    With regard to civilian aspects, the European Council endorses the conclusions of the Conference held in London on 7 and 8 December 1995. It welcomes the appointment of Mr Carl Bildt as the High Representative and assures him of its full support.

    The application of the Peace Agreement involves the implementation of a stable military equilibrium based on the lowest possible level of weaponry. The European Council hopes that the parties involved will take advantage of the opportunity for dialogue offered by the Conference to be held in Bonn on 18 December 1995.

    It is now for the parties to shoulder their responsibilities in fully implementing the Agreement in order to bring an end to the war once and for all.

    For its part, the European Union reiterates its willingness to make a contribution to the reconstruction of former Yugoslavia in the context of equitable international burden-sharing. A preparatory conference will be held in Brussels on 20 and 21 December 1995 with a view to identifying the most urgent needs.

    The European Council reaffirms the right of refugees and displaced persons to return freely and safely to their homes throughout the territory of former Yugoslavia and to obtain fair compensation as a fundamental right.

    The European Council approved the Declaration in Annex 7.

    FORMER YUGOSLAV REPUBLIC OF MACEDONIA

    The European Council is pleased that the conditions exist for establishing contractual cooperation relations between the Union and the FYROM and asks the Council to approve the negotiating directives before the end of 1995 with a view to concluding a Cooperation and Trade Agreement which takes full account of its aspirations.

    SLOVENIA

    In the light of the Cannes conclusions and bearing in mind the compromise proposal from the Presidency, the European Council reaffirms its desire to have the Association Agreement with Slovenia signed as soon as possible.

    BALTIC SEA REGION

    The European Council took note of the Commission report on the current state of and prospects for cooperation in the Baltic Sea Region.

    The Union has an interest in promoting political stability and economic development in that region. The European Council therefore urges the Commission to propose a suitable regional cooperation initiative to be presented to the Heads of State and of Government of the Council of Baltic Sea States at their Conference in Visby on 3 and 4 May 1996, and thereafter report to the European Council in Florence.

    RUSSIA

    The European Council trusts that Russia will continue its action to promote stability, development, peace and democracy. It means to support its efforts. It wishes to strengthen permanently the ties between the European Union and this great country.

    It is convinced that the development of cooperation in the field of security between the European Union and Russia is essential for stability in Europe.

    It notes with satisfaction that the Interim Agreement with Russia signed in Brussels on 17 July 1995 is to come into force on 1 February 1996 and it urges the Contracting Parties to ratify the Partnership and Cooperation Agreement as soon as possible. It also welcomes the outcome of the Summit between the European Union and Russia which took place in September in Moscow. It confirms the European Union’s overall political approach to its future relations with Russia, as formulated by the General Affairs Council on 20 November 1995 (Annex 8).

    It approved a Declaration on the forthcoming holding of parliamentary elections in Russia (Annex 9).

    It supports Russia’s efforts to achieve complete integration into the international economy and its admission to the WTO and other international organizations.

    It also confirms its support for Russia’s accession to the Council of Europe in the near future.

    TACIS

    The European Council reaffirms the readiness of the European Union to continue its assistance programme to the Republics of the former Soviet Union with the aim of supporting the process of political and economic reform which these Republics have initiated. It underlines the importance of adopting the new TACIS Regulation at the next General Affairs Council.

    UKRAINE

    The European Council expresses satisfaction at the recent accession of Ukraine to the Council of Europe and supports its authorities’ undertaking to continue the current process of economic reform. The Union continues to provide support for Ukraine through macro-economic assistance and welcomes the important agreement reached with Ukraine on the definitive closure of the Chernobyl nuclear power station by the year 2000, in accordance with the timetable and conditions foreseen.

    TURKEY

    The European Council reiterates the priority it attaches to the development and strengthening of relations with Turkey and welcomes the assent given by the European Parliament which will enable the final phase of the Customs Union with Turkey to enter into force on 31 December 1995, together with the arrangements for strengthening political dialogue and institutional cooperation. It hopes that the Regulation on financial cooperation with Turkey will enter into force as soon as possible.

    The European Council recalls the importance it attaches to respect for human rights, the rule of law and fundamental freedoms and strongly supports all those in Turkey endeavouring to put reforms into practice. In that spirit, it welcomes the measures already adopted by the Turkish authorities and urges them to continue along that path.

    CYPRUS

    The Council reiterates the importance which it attaches to making substantial efforts to achieve a just and viable solution to the question of Cyprus in line with the United Nations Security Council resolutions, on the basis of a bi-zonal and bi-community federation.

    SECURITY

    In the security field, the European Council welcomes the progress made within the Union on developing a common policy for the integration of the countries of Central and Eastern Europe into the European security architecture, and the place which Russia and Ukraine will have in it.

    The European Council expresses its satisfaction at the approval by the Ministerial Council of the Western European Union, meeting in Madrid in November 1995, of the WEU contribution to the 1996 Intergovernmental Conference confirming the desirability of strengthening links between the European Union and the WEU. It takes note of the wish expressed by the WEU to contribute, as necessary, to the proceedings of the Intergovernmental Conference on security and defence aspects and to keep a close watch on their development. The European Council also takes note of the Reflection Group’s contribution in this area.

    It stressed the need to continue encouraging disarmament and non-proliferation within the framework of the common foreign and security policy. In this connection:

    – it expresses its firm desire that the negotiations for a Comprehensive Nuclear Test Ban Treaty be completed no later than June 1996;

    – it supports an immediate start to negotiations for a Treaty banning the production of fissile material for nuclear weapons (cut-off);

    – it welcomes the adoption, in the first round of the Conference to review the 1980 Convention on Inhumane Weapons, of a new protocol prohibiting the use of blinding laser weapons;

    – it reiterates the European Union’s wish that all its members ratify the Convention on Chemical Weapons at the earliest opportunity so that it can come into force shortly.

    OSCE

    The Union welcomes the results of the OSCE Budapest Conference which are intended to reinforce the structures and capacities of the OSCE so that it can fulfil its ever-increasing number of tasks, particularly in the field of preventive diplomacy.

    It reiterates the European Union’s intention of continuing to contribute actively to strengthening the OSCE and, in particular, to drawing up a common and comprehensive security model for the 21st century.

    The European Council welcomed the adoption on 13 December 1995 in Royaumont, at the suggestion of the European Union, of the Declaration on the process of stability and good-neighbourly relations in South-eastern Europe.

    ANDORRA

    The European Council welcomes the renewed impetus given to the Union’s relations with Andorra and calls upon the Commission to submit appropriate proposals for developing new areas of cooperation.

    TRANSATLANTIC RELATIONS

    The European Council underlines the great importance of the New Transatlantic Agenda and the Joint EU-US Action Plan signed at the EU-US Summit in Madrid on 3 December 1995 (Annex 10). It considers that this initiative constitutes a qualitative leap forward in strengthening our relations, moving on from a stage of consultations towards a new stage of concerted and joint action. It is resolved that the Union for its part should put fully into practice what was agreed in Madrid and to resume examination of this issue at the European Council in Florence.

    It welcomes the initiatives put forward at the meeting of the Transatlantic Business Dialogue in Seville.

    It hopes that other Atlantic democracies will share the goals of the New Transatlantic Agenda.

    MEDITERRANEAN

    The European Council highlights the major significance of the results achieved at the Barcelona Euro-Mediterranean Conference and calls upon the Council and the Commission to put into practice the Barcelona Declaration and Work Programme (Annex 11).

    The Barcelona Conference marked the start of a new stage in which the goal of securing peace, stability and prosperity in the Mediterranean region constitutes a common task for all parties to the new Euro-Mediterranean association. The “Barcelona spirit” must inform this on-going process, which should culminate in the conclusion of a pact for the Mediterranean.

    The European Council warmly welcomes the Agreements concluded with Tunisia, Israel and Morocco. It hopes that the negotiations under way with Egypt, Jordan and Lebanon will reach a rapid conclusion, and points out that the European Union is ready to negotiate such agreements with Algeria and Syria as soon as possible. In this connection it confirms its Cannes conclusions regarding the nature of the Euro-Mediterranean free-trade area.

    It notes with satisfaction the recent presidential elections in Algeria and trusts that there will shortly be new moves towards restoring a normal political situation in the country through dialogue and the holding of free and above-board general and local elections. It notes that Algeria wishes to conclude a new association agreement with the European Union, and calls upon the Commission to submit draft negotiating directives to that end.

    MIDDLE EAST

    The European Council welcomes the Interim Agreement between Israel and the Palestine Liberation Organization, signed in Washington on 28 September.

    The European Council deeply regrets the tragic assassination of Prime Minister Yitzhak Rabin and supports the undertaking given by the new Prime Minister, Mr Peres, to take the peace process forward with the same resolve. It accordingly appeals for rapid progress to be made on the Syrian track and for all parties to step up their efforts to reach a comprehensive, just and lasting peace.

    It welcomes the rapid disbursement of the EIB loans for ECU 250 million granted to the Palestine Authority, and hopes that the Commission will submit to it, at the earliest opportunity, draft directives for negotiating an agreement with the European Union. It similarly welcomes the implementation of the measures needed to coordinate the monitoring of the Palestinian elections.

    It notes with satisfaction the progress made at the Amman Economic Summit and trusts that positive results will be achieved at the Ministerial Conference for Economic Assistance to the Palestinian People, to be held in Paris on 9 January 1996.

    IRAN

    The European Union will continue to ensure that cooperation with Iran is conducted with all the guarantees necessary to avoid any contribution whatsoever to the acquisition of a military nuclear capacity.

    In the context of respect for fundamental rights and freedom of expression, the European Union will keep up its efforts, within the framework of critical dialogue, to obtain a satisfactory solution in respect of the British writer Salman Rushdie and calls upon the Iranian authorities to respond constructively to its efforts. It requests the Council to keep a close watch on the matter.

    LATIN AMERICA

    The European Council stresses the significant progress made in the process of strengthening relations with Latin America. It requests the Council and the Commission to expedite implementation of the conclusions on enhancing cooperation between the European Union and Latin America in the period 1996-2000 (Annex 12).

    It welcomes the signing in Madrid of the Inter-Regional Framework Agreement on Trade and Economic Cooperation between the European Union and Mercosur, the final objective of which is to achieve political and economic association.

    It emphasizes that the Joint Declaration on Political Dialogue between the European Union and Chile is to be signed shortly. This marks an important step towards the early negotiation of a new agreement directed ultimately at political and economic association.

    The European Council calls upon the Council and the Commission to begin negotiations as soon as possible with Mexico for a new political, economic and trade agreement which includes progressive and reciprocal trade liberalization, taking account of the sensitivity of certain products and in line with WTO rules.

    It also declares its interest in renewing the San José dialogue between the European Union and Central America, on the basis of the communication recently submitted by the Commission.

    It notes the wish expressed by the Andean Presidential Council to strengthen relations between the Andean Pact and the European Union, and calls upon the Commission to submit appropriate measures. It also considers an early renewal of the General Scheme of Preferences for the Central American and Andean Pact countries to be of particular importance, and asks the Council to adopt this at the earliest opportunity.

    It considers that dialogue and cooperation should be continued with Cuba in order to lend active support to the process of reform under way, to foster respect for human rights and fundamental freedoms and to broaden the scope of private initiative and the development of civil society. To that end, it asks the Commission to present, in the first half of 1996, draft negotiating directives for a trade and economic cooperation agreement, which will be examined by the Council in the light of developments in the political and economic situation in Cuba.

    Lastly, it calls upon the EIB to step up its activity in Latin America in line with its financing procedures and criteria.

    LOME CONVENTION

    The European Council welcomes the signing in Mauritius on 4 November of the Agreement on the revision of the 4th ACP-EC Convention, together with the Protocol on the Accession of Austria, Finland and Sweden, as well as the immediate adoption of provisional implementing measures.

    AFRICA

    The European Council expresses its grave concern at the situation in Nigeria, confirms the sanctions adopted within the European Union and appeals once more to the Nigerian authorities to ensure full respect for human rights and a swift transition to democracy, failing which it reserves the right to take further measures.

    To put an end to the violence, particularly in Burundi, and to ease the return of Rwandan refugees, the European Council emphasizes the importance of national reconciliation and stability in the Great Lakes region. It restates its support for the convening of the Conference on the Great Lakes region under the auspices of the United Nations and the Organization for African Unity, as well as the rapid appointment of a new special representative of the United Nations Secretary-General to Burundi.

    It welcomes the political dialogue which has begun between the European Union and the OAU, and particularly the Council conclusions of 4 December on preventive diplomacy, conflict resolution and peace-keeping in Africa (Annex 13).

    It notes with satisfaction the negotiations under way with South Africa with a view to drawing up an agreement on creating a free-trade area and highlights the importance of these negotiations being brought to a rapid conclusion.

    ASIA

    The European Council welcomes the adoption of the Council report which will serve as a basis for preparing the Europe-Asia Meeting to be held in Bangkok on 1 and 2 March 1996 (Annex 14).

    It confirms the importance which the European Union places on the development of relations with China. It notes the conclusions adopted by the Council on a long-term policy for China-Europe relations.

    The European Council reiterates its deep concern at the heavy prison sentence imposed on the Chinese human rights campaigner, Mr WEI GING XENG, and urges China to show clemency at his appeal and grant his swift and unconditional release.

    The European Union will participate, in conditions to be negotiated, in the Korean Peninsular Energy Development Organization (KEDO).

    The European Council, bearing in mind in particular the latest events in Djakarta in connection with the increased tension in East Timor, pledges support for any appropriate action which could contribute towards a just, overall and internationally acceptable solution to this issue and particularly towards the mediation efforts being made by the UN Secretary-General.

    UNITED NATIONS

    On the occasion of the fiftieth anniversary of the United Nations, the European Union expressed its continuing support for the UN as a global forum fostering mankind’s aspirations for peace, security and economic and social progress.

    The European Union, whose Member States together constitute the UN’s main financial contributor, expressed its concern in its Declaration of 25 October 1995 at the current critical financial situation of the United Nations. The European Council appeals again to all States which are members of the UN to pay their contributions to the normal budget and to peace-keeping operations, in full, on time and without conditions.

    The European Council hopes, in this connection, that progress will be made on adjustments to improve UN structures and institutions, including the Security Council.

    IV: LAYING THE FOUNDATIONS OF THE EUROPE OF THE FUTURE

    THE POLITICAL AGENDA FOR EUROPE

    The European Council identified the challenges which the Member States of the European Union must meet in order to prepare Europe for the 21st century. In the next five years, we must:

    – carry out adjustments to the Treaty on European Union;

    – make the transition to a single currency in line with the timetable and conditions set;

    – prepare for and carry out the enlargement negotiations with the associated countries of Central, Eastern and Southern Europe which have applied for membership;

    – determine, in parallel, the financial perspective beyond 31 December 1999;

    – contribute to establishing the new European security architecture;

    – actively continue the policy of dialogue, cooperation and association already under way with the Union’s neighbouring countries, and in particular with Russia, Ukraine, Turkey and the Mediterranean countries.

    Success in all these tasks will mean that a large community enjoying the benefits of freedom, prosperity and stability can be set up Europe-wide.

    THE INTERGOVERNMENTAL CONFERENCE

    1. The European Council received with great interest the Report by the Reflection Group, chaired by Mr Westendorp (Annex 15), which had been instructed by the European Council to prepare for the 1996 Intergovernmental Conference. It considers that the guidelines distilled within the Group, following a thorough analysis of the internal and external challenges facing the Union and the possible responses, constitute a sound basis for the work of the Conference.
    2. The Intergovernmental Conference will have to examine those provisions of the Treaty on European Union review of which is expressly called for in the Treaty, as well as those questions which it was decided should be discussed by the Conference, both in the Brussels and Corfu European Council conclusions and in declarations adopted at the time of interinstitutional agreements. The European Council also reaffirms the guidelines laid down at its Cannes meeting. The Intergovernmental Conference will, in general, have to examine the improvements which will have to be made to the Treaties to bring the Union into line with today’s realities and tomorrow’s requirements, in the light of the outcome of the Reflection Group’s proceedings.
    3. The European Council agrees that the formal review procedure stipulated in Article N of the Treaty will be carried out as quickly as possible so that the Conference can be officially opened in Turin on 29 March. The European Council takes note of the intention of the forthcoming Italian Presidency to adopt appropriate measures for preparing the Conference.
    4. The Conference will meet regularly, in principle once a month, at the level of Foreign Affairs Ministers, who will have responsibility for all proceedings; preparations will be conducted by a working party made up of a representative of each Member State’s Minister for Foreign Affairs and of the President of the Commission.

    The Secretary-General of the Council will make the necessary arrangements to provide secretarial support for the Conference.

    1. The European Parliament will be closely associated with the work of the Conference so that it is both briefed regularly and in detail on the progress of the discussions and can give its point of view, where it considers this necessary, on all matters under discussion. The detailed arrangements for such association will be determined by the Ministers for Foreign Affairs in line with the provisions which apply to the review of the Treaties.
    2. The representatives of those countries of Central and Eastern Europe which have concluded Europe Agreements, and of Malta and Cyprus, will be briefed regularly on the progress of discussions and will be able to put their points of view at meetings with the Presidency of the European Union to be held, in principle, every two months. The European Economic Area and Switzerland will also be briefed.

     

  • Mr Major’s Press Conference in Madrid – 16 December 1995

    Below is the text of Mr Major’s press conference in Madrid, held on Saturday 16th December 1995.

    PRIME MINISTER:

    Let me just say a few words at the outset. Over the last few European summits, at Essen, Cannes, Majorca and now at Madrid, I think the European Union has taken a number of realistic steps. Immediately in front of us at the moment are some fairly historic challenges – enlargement, economic competitiveness, economic and monetary union and fundamental policy reform. In every one of those areas the Union has yet to work out clear and realistic policies and what I wish to see is practical answers to the real problems that lie in front of us. I think those practical answers are what will be the key to a successful Europe, a Europe that works, that isn’t divided, that becomes a haven of prosperity and stability. And that is what I think people would wish to see from Europe. It is why, in my judgment, the European Union exists and it is where Britain’s national interests lie.

    I think at Madrid we have taken some further useful steps. On economic and monetary union, it is now increasingly understood, though I have to say it isn’t universally acknowledged, that agreeing a reference scenario, as we have done over the last couple of days, isn’t sufficient. There has to be a clear appreciation as well of where that timetable leads. And that of course is the merit of the study that we agreed today that should begin shortly under the Italian Presidency. And the purpose of that study is to look at the whole complex of issues that arise from a situation in which, at most, only a few member states are going to enter a single currency in 1999 or soon after. That outcome – a minority going ahead – is the only realistic scenario that you can paint on the present timetable. By 1999 only a minority, and perhaps only a very small minority, of countries will be economically ready to join a single currency.

    And that decision – whether or not to join a single currency – will be one of the biggest decisions that Europe has yet had to take. We simply cannot tumble into it like lemmings over a cliff. We have to address the hard issues that arise from what has become known as the ins and outs question, and not only address those questions, we have to get them right, because the alternative will be chaos and recrimination over a very long period.

    We need also a similar realism over enlargement of the Community. Here is another truly historic step for the Union. Britain has always been a fervent supporter of enlargement, I am sure it is right, it could and it should be the major step forward in extending Europe’s prosperity and security for this generation and for future generations.

    But there are some hard realities to confront. The plain truth is that if we enlarge at the next stage to a Union of some 20 or 25 members, we will bust the bank unless we have quite significant policy reform, reform of the Common Agricultural Policy and reform of the way in which we pay for the so-called structural and cohesion funds.

    I don’t believe it can be in anyone’s interest to have the new applicants provoke a budgetary crisis by the simple act of joining the European Union. And the figures speak for themselves. In a Union of 20 members, the Common Agricultural Policy will cost tens of billions of Ecu, on top of the 36 billion Ecu the CAP costs already each year. As to the structural and cohesion funds, we calculate that if there is no reform, the extra cost of 10 new members could be some 38 billion Ecu per year on top of the 33 billion Ecu that we expect it to cost in 1999.

    Simply to state those figures is to show how impossible it is for the European Union to begin to meet them, they are astronomical sums and they are sums which our citizens can’t and won’t accept, and I see no enthusiasm, looking around the membership of the European Union, to pay larger net sums into the European coffers. I have not formally called for volunteers to pay more, but I am sure if I did there would not be many forthcoming.

    That policy reform is not an obstacle to enlargement, on the contrary it is necessary to make enlargement both possible and affordable. And we have to start work on this as soon as possible and I am delighted that we have agreed to take the first steps in that direction.

    We have also made some useful progress in other areas important to us: employment policy, competitiveness, deregulation, subsidiarity, a very good discussion on that last evening over dinner, and so on. We have agreed the procedures for launching next year’s Intergovernmental Conference and I was very pleased that without any dissent, and with some enthusiasm, our partners agreed my joint initiative with Jacques Chirac to fight drug trafficking in the Caribbean.

    Let me just say a further word about the opening theme. The European Union needs to be very careful to make sure it doesn’t become divorced from its citizens because its ambitions and its language become too remote from ordinary people. We have to learn the lesson of the Maastricht Treaty where in my judgment we went too far, too fast, for public opinion and I don’t just mean in the United Kingdom, I mean in most of the countries of the European Union as well.

    We are faced with a series of interlocking challenges over the next few years and we will need to get the balance right in the Union. I don’t believe we will do so without facing down some of the pretensions which have from time to time infected European policy. What I wish to see in Europe is a rolling tide of realism about policy and I think much of our work this weekend has helped to achieve that.

     

    QUESTIONS AND ANSWERS

    QUESTION (Don MacIntyre):

    Prime Minister, you have indicated 3 times that you are not intending to rule out British membership of EMU during the next parliament, can I ask you about a referendum and whether it is conceivable that your government would enter EMU without a referendum; and secondly, since you have canvassed the possibility of a referendum before, would you expect, if one took place, that the Cabinet would act in it with a collective voice and take Cabinet responsibility?

    PRIME MINISTER:

    I have never ruled out the possibility of a referendum, I have always said that is a possibility. If and when policy changes I will let you know, Don.

    QUESTION (James Cox, BBC World this Weekend):

    Do you privately believe, or perhaps hope, that the single currency won’t happen?

    PRIME MINISTER:

    It is not a question of private beliefs and hopes, neither is it a question of the timetable. The question is whether it will work and whether it is right, and at the moment we simply don’t have the information to make a proper judgment on that. I am in favour of the European Union, I have been in favour of the European Union since we first applied to join it, I have never changed my mind about that. I think Britain’s place is in Europe and I think we are better off in Europe and Europe is better off with us than without.

    But that doesn’t mean I agree with each and every aspect of European policy, and it certainly doesn’t mean that I look at European policy uncritically. And the concern that I have had about economic and monetary union is that the impact of economic and monetary union, not just on the members who go into it but on the whole of the European Union just simply has not yet been properly thought through. We have just come from a meeting with the 10 or 11 applicant countries. None of those is going to be in economic and monetary union, not now, not when they join the Community, not for a long time afterwards. What does economic and monetary union mean for their membership of the European Union? What does it actually mean for the existing structure of the European Union? What does it mean for the division between an inner core and a further ring of people who aren’t members? What does it mean for trying to ensure that we get economic convergence, which we have sought for the last 20 years?

    People don’t yet know the answers to that. Now on many of those answers I am sure the technical questions can be satisfactorily resolved, but they are not resolved yet, indeed they are not even addressed yet. And I think before you can make a balanced judgment on what will be the most important European decision we will be called on to make for very many years to come, we need to know the answers to those questions. And I am not going to commit the government either way until we have examined those questions, until I know what the answers to those questions are.

    QUESTION (George Brook, The Times):

    Yesterday the Chancellor of the Exchequer gave us his opinion that it was 60/40 likely that in 1999 monetary union would start, what is your assessment of the odds?

    PRIME MINISTER

    I have no idea, I am not a bookmaker, the Chancellor knows more about these things than I do. But a minority may go ahead, we have said that before, we have said a minority may go ahead. I will offer you very long odds, much longer than 60/40 either for or against, very long odds against, that a majority of the European Union are not ready in 1999 and I doubt there will be any takers amongst my fellow Heads of Government for that proposition.

    QUESTION (Tony Bevans):

    How do you view the prospect of a Commission campaign to sell the idea of a European currency to the British public next year?

    PRIME MINISTER:

    That is a matter for the Commission. I doubt that a Commission campaign is going to make a great deal of impact frankly either in the United Kingdom or elsewhere, and neither do I think the choice of name would particularly help a campaign here or elsewhere.

    QUESTION (Reuters):

    You have talked about the problem between the ins and the outs, but isn’t there a risk of Britain being even further out because you have ruled out any entry into an exchange rate mechanism before going in?

    PRIME MINISTER:

    And a very sensible proposition indeed. An exchange rate mechanism was used as a means to an end, it isn’t the end. We have seen it as a means to an end and it wasn’t successful. We have seen it wasn’t successful not just for the United Kingdom, but right across Europe we saw it wasn’t successful and we are not going back in it.

    QUESTION: (Elinor Goodman, CH4 TV):

    You have made a lot throughout this meeting of the need to address the problems of the “ins and outs” but as I understand it the final communique will make a fairly brief reference to that study. Are you convinced that you have actually convinced your colleagues that there are real problems?

    PRIME MINISTER:

    Sure! I don’t think there is a shadow of doubt about it and if I can remind you, Elinor, before I raised this question at Majorca no-one had heard of “ins and outs”, it wasn’t even considered, nobody raised the subject, nobody bothered to give a moment’s thought to what happened to the countries that chose not to join or weren’t able to join. Now it has been a central part of the debate. It is going to be examined in the Italian Presidency, you doubtless saw what Prime Minister Dini said in his own Parliament not after his meeting with me in Italy last week but before his meeting with me in Italy last week and it has been raised by a number of other Heads of Government as well.

    There is no doubt there are real problems there and they are a matter of concern not just to me – though they are a matter of concern to me – but to a lot of other countries as well and we will have a full and complete discussion of those problems and a determination of them, I hope, before anybody is unwise enough to take precipitate decisions.

    QUESTION: (Elinor Goodman):

    On that point, are you satisfied that if the inquiry can’t come up with satisfactory answers, you could actually stop a hard core going ahead?

    PRIME MINISTER:

    We can’t stop other countries doing things if they choose to do them. If other countries choose to do something that is economically foolish, then it is extremely difficult to stop them. What we can do and what we are doing is bring to people’s attention what the implications of what they are seeking to do are for them and for others. Of course, if some of these don’t meet the Maastricht criteria, then there is a wider opportunity to express a view as to whether they should go into a single currency but if a small number of countries meet the Maastricht criteria, they are sovereign nations just like the United Kingdom and they can make their decision to go in if they wish and we can make our sovereign decision to go in or not go in as we wish.

    QUESTION (John Palmer):

    Prime Minister, I have got a bit of a problem understanding the basis on which you say with such confidence that only a tiny minority will go ahead to the third phase of economic and monetary union. In the last hour, I have heard the Austrian Chancellor, the Swedish Prime Minister, the Finnish prime Minister and indeed the Irish Taoiseach all say with perfect confidence that they are going to join and among the candidate countries you met today the Cypriots and Maltese claim – perhaps they are deluding themselves – they have already qualified and the Estonians will qualify in a month’s time according to the Maastricht criteria. It looks as though either they are all suffering from collective delusion or the numbers may be rather bigger than you think.

    PRIME MINISTER:

    No, the numbers are not higher than I think and you need to have a look at the Commission reports and you will see that, John. If you actually look at the details of the Maastricht criteria and consider the political debate as well, there is barely a government across Europe who will not for their own domestic reasons say: “Yes, of course we think we are going to meet the criteria!” and you know as well as I do, John, why that is. They say they are going to meet the criteria because the moment they say they are not going to the meet the criteria they lose the domestic political impetus to carry out the convergence policies because they are very painful and difficult in their own countries. You know that and I know that and so do they know that.

    QUESTION (Robin Oakley, BBC):

    Prime Minister, what serious hope do you see of CAP and Structural Funds reform, how do you think it might come about and aren’t you worried that this Council has sent a very negative message to the former Soviet bloc countries who want to become members of the European Union?

    PRIME MINISTER:

    No, I don’t think that is right about sending a negative message. We have just had lunch with them and the agreement is that for all of the applicant countries without exception the Commission will begin to frame an opinion, an examination of their economy and their capacity to join. We hope that is going to be completed round about the end of the IGC – May, June 1997 – and soon after that we would be able to see as a result of those opinions which are the nations most likely to be able to go ahead in the near future.

    As far as the CAP is concerned, there clearly is an inter-relationship there but I think the realistic point is that unless there is reform of expenditure it would be extremely difficult to cope with the impact of large numbers of new members coming in so in the interests of getting them in we do need to have to enmesh the reform of the CAP and the Structural and Cohesion Funds, and agreement to put work in hand was reached over the last day or so.

    QUESTION (Spanish Radio):

    After what happened in the Balkans and knowing that you talked about this matter yesterday at dinner, don’t you think that it is necessary for the European Union to have a common foreign affairs policy?

    PRIME MINISTER:

    Sure! We are very much in favour of a common foreign policy but it has to be a common foreign and defence policy by consensus. Foreign policy and defence policy are intrinsically sovereign matters for the nation state and it is not conceivable for British foreign or defence policy to be determined by a qualified majority vote in Brussels; that is not an option but where we can reach a common agreement it is very sensible to do so and we think there are ways in which we can improve the working of a common foreign and security policy and we will be producing options at the intergovernmental conference.

    QUESTION (Boris Johnson):

    Prime Minister, you said you would consider the idea of a referendum but one thing I can’t quite work out is if there were to be such a referendum when it would happen. The Chancellor has said that we may have to decide by the beginning of 1998 whether or not we want to go into stage 3. Am I right in thinking that a referendum would have to take place therefore before the beginning of 1998?

    PRIME MINISTER:

    No. I think you are confusing two things. If there were to be a referendum, the time for a referendum would be after the British Cabinet had decided that it wished to recommend going in and it would then seek an endorsement of that in a referendum were there to be one but as you know, we have kept that open, no decision has yet been made on it.

    QUESTION (Toby Helm):

    There are many right-wingers in your party who were hoping that you would have been prepared to rule out British entry into a single currency during the lifetime of the next Parliament. You have now categorically said that you are not going to do that and there are some who are already showing signs of being rather restive back home. What message have you got for them this evening?

    PRIME MINISTER:

    I have explained why I don’t think it would be wise to rule out going into a single currency or many other policies during the period of the next Parliament, policies of that importance, and the reason is really very straightforward and it is a reason I think that all my colleagues will understand.

    In the European debate, Britain is one of the big countries, we have an important voice in the European debate. I have no intention of letting that voice be stilled on the most important European issue, the most contentious European issue that lies immediately in front of us. If I had said a year ago: “We are not going into a single currency!” I would not over the last few weeks at Majorca and here have been able to win the argument for a proper consideration of what will happen if a minority go ahead on the “ins and outs” question. I would have had no voice, my colleagues would have said to me “But you said you are not going into it, it is nothing to do with you!”. That is no position for one of the great European countries to find itself in.

    We are in a classically advantageous position. We can stay in the argument right up until the last moment but uniquely amongst our colleagues, we have a treaty right to say we are not going to enter a single currency if we don’t think it is in the British national interest to do so and the fact that I am not ruling it out now should not be mistaken. It is not an indication that we have made our minds that we are going to go ahead, by no means is it that and nobody should read it as that. We will make up our minds when the facts are in front of us – and they aren’t yet. The option of saying no is with us and we can exercise that if we choose to do so, if we believe it the right thing to do at any time in the next Parliament but it would in my judgement be folly for the United Kingdom, one of the big countries of Europe, to say at this stage we are going to exclude the British voice from a matter as important as this for Britain and for the rest of Europe because it isn’t just a matter for the countries that go in. If a small number go in, it is going to have an impact on those that don’t go in as well so our voice is going to be there and it is going to be heard and I have made that clear in the House of Commons and I am delighted to repeat it today.

    QUESTION (Joe Murphy):

    Prime Minister, some of your colleagues have mooted the possibility that the manifesto might contain a commitment to have some form of public consultation before joining EMU which might be a referendum or might be another general election. Would you rule out that possibility?

    PRIME MINISTER:

    We haven’t remotely got near a general election yet and if I can let you into a deep and dark secret, we haven’t yet prepared the manifesto. When we come to the manifesto, we will look at those options. I have indicated some things that won’t be in but we haven’t discussed it in detail yet.

    QUESTION (Robert Peston):

    Prime Minister, you have indicated recently your concern particularly for the countries outside – “the outs” – of the sort of currency turmoil that we might see unless certain questions are resolved. If, nonetheless, some of these questions aren’t resolved but a number of countries press on with monetary union, do you think that the people on the inside are going to be in a stronger position or the people on the outside?

    PRIME MINISTER:

    At this moment, who can tell? If they proceed with a currency union and it isn’t successful, there is absolutely no doubt about the chaos that will be caused inside the countries that took part in monetary union but that would ripple outside as well. The argument that I keep putting to my European colleagues and about which I feel extremely strongly is although they have a sovereign right to go in if they meet the Maastricht criteria and chose to do so, it would be extremely unwise of them and extremely unfair to the rest of Europe to contemplate doing so until we know what the implications would be for everyone. We don’t have that study yet. I have asked repeatedly for that study, I have argued for that study, we are now going to get it. When we have got it, we might be able to make a more measured judgement to your question because I agree it is an extremely important question and we should not proceed until we know the answer but we can’t give you a proper answer – other than a guess – until we have done the work that I have been asking for and that is now going to be [short section of the rest of the Prime Minister’s reply is missing].

    QUESTION (Robert Peston):

    Would you like to make that guess for me now, as it were?

    PRIME MINISTER:

    I have given it careful consideration, Robert, and no, I wouldn’t like to make that guess for you now.

  • Mr Major’s Speech to the Conservative Women’s Conference – 1 December 1995

    Below is the text of Mr Major’s speech to the Conservative Women’s Conference, held in London on Friday 1st December 1995.

    PRIME MINISTER:

    I’ve come to talk to you today about one word, pride.

    Pride in our country, pride in ourselves and – yes – pride in what this Government is doing. This week – a momentous one indeed – we have seen what Britain is really about.

    Perhaps the moment when it struck me most forcibly was while I listened to the President of the United States speaking the Royal Gallery of the House of Lords.

    Sometimes it takes a friend from abroad to see us as we really are.

    He gave an historic address to both Houses of Parliament against the grandeur and pageantry which only our country can display to such inspiring effect.

    He knows that we are the ally upon whom America can rely in pursuit of the great values which we share:

    – love of freedom;

    – enrichment of democracy;

    – faith in the individual;

    – and the sense of mission and purpose which has so often given us the strength to stand alone in defence of the things we treasure.

    That relationship is not an empty idea from the vacuum of the sound-bite or the easy phrase. Relationships of this sort are not self-sustaining, bestowed by some charitable act of history upon one nation from another. They have to be worked at, fought for, nurtured.

    America would not look to us in any nostalgic sense, because of events long-since past. They look to us because our nation is a rock. An ally whom they know has the same instincts and interests. An ally upon whom they have relied in the past and upon whom they can rely in the future. Generations now gone would easily understand this. We owe it to them to sustain that same spirit and that same commitment. We will enjoy our relationship with the United States because, by our own endeavours, we are a fitting partner.

    In tackling one of the greatest challenges Europe faces today, we can be proud that Britain is there, soon to be joined by America, playing her part.

    The Bosnian peace agreement is a very helpful beginning.

    Success there is vital, not only for Bosnian, but for international security. Vital for the standing of NATO and the health of Europe.

    That’s why Britain is getting ready to send 13,000 troops to Bosnia over the next year.

    Thirteen thousand of the most effective soldiers anywhere in the world, a contingent second to none.

    This wasn’t an easy or cheap decision.

    But it is the right decision.

    Because we’re not afraid to give a lead, as we have done through three years of terrible conflict. This is an issue of massive potential and consequence. I would have made that commitment if it were only for humanitarian reasons, for I hate the loss of life, the brutality, the cynical disregard of every decent value.

    But anyone who has the first understanding of the implications of political collapse in the Balkans realises that Britain’s self interest remains with the peaceful containment and resolution of its problems.

    So we must make sure the peace agreement succeeds, right through to the end.

    Northern Ireland

    Peace is relevant at home as well as abroad.

    The cause of peace in Northern Ireland has received a huge boost this week.

    Can anyone who witnessed President Clinton’s remarkable visit to Northern Ireland seriously contemplate a return to bombing and shooting?

    We saw a Northern Ireland enjoying the prospect of a second Christmas in peace.

    A Northern Ireland hearing him support our call for violence and punishment beatings to cease, for ever.

    Earlier in the week, the Irish Prime Minister and I launched a new initiative. It has two aims, two tracks.

    First, it’s time all the political parties of Northern Ireland began to prepare seriously for negotiations on a just and comprehensive settlement.

    It’s time for them – each of them – to make their contribution to peace.

    Their people, their supporters, want a lasting peace and a fair settlement, not just a ceasefire.

    That’s the unmistakable message from the shops and the factories, the streets and the villages of Northern Ireland.

    We, the Government, can facilitate the process.

    But we can’t decide it.

    The parties themselves have to decide how they are going to negotiate.

    If this process is to succeed – as it must – they must begin to show flexibility.

    No-one can have a veto on progress.

    No-one should be allowed to block the road, by sticking to rigid and uncompromising positions which others can never accept.

    Now is the time for the Northern Ireland parties and their leaders to show open-mindedness, and to have the courage to step out of the bunkers they built during Ulster’s troubles.

    It’s time to put aside the old hatreds and the old feuds and the old mistrusts that have served Ulster ill for too long.

    That is the aim of the preparatory talks we are convening.

    And there’s a second aim to our initiative.

    Some parties represent illegally armed paramilitary organisations which, to this day, are training, plotting, intimidating and making savage assaults on other people.

    If they are to enter constitutional negotiations, they are going to have to change their ways. They are going to have to show that they, like other parties, are committed to exclusively peaceful methods.

    Words aren’t enough.

    So we have set up an advisory international body to discuss how the paramilitaries are going to decommission their arms.

    People who mean peace don’t need guns.

    The time has come for them to start ridding themselves of weapons and explosives so that they, too, can join the constitutional negotiations.

    The British and Irish Governments have again given a lead, just as we did with the Downing Street Declaration two years ago.

    That Declaration led, after several months, to the ceasefires.

    I hope this week’s initiative will lead by the end of February to negotiations for which all parties will qualify.

    It’s now up to them to respond to our lead.

    Getting to this stage in the process has taken years of effort. We have always been working for the long term.

    Three years ago, to talk of peace in Northern Ireland seemed like a grim joke. Today, it is becoming a possibility. Tomorrow, I hope it will be reality.

    The Budget

    Madam Chairman, I said my theme was pride.

    Today’s conference is our opportunity to show how this week’s events (and not just in Bosnia or Northern Ireland) fit in to the long term goals for this country which I set myself five years ago.

    I take pride in the strength of Britain’s economy. I can remember no time in my political lifetime when the economic prospects for our country looked more promising.

    Every politician claims they can create economic success. The difference is, Madam Chairman, we have actually achieved it.

    The best industrial relations for a hundred years, the best inflation record for nearly 50 years, record exports, a third of all the inward investment coming into Europe.

    Madam Chairman, surely and securely, we’re building for Britain’s long term prosperity.

    That’s why I’m proud of the budget Kenneth Clarke delivered this week.

    Well, I read all the pre-Budget options. Bribe people. Take risks. Don’t worry about the long-term, it’s the short-term that matters. I’ve heard it all my life, and I tell you this – I won’t do it. I won’t do it for one overriding reason: it would be wrong for Britain.

    If we’d have taken some of the more flamboyant advice we’d been offered, many of them most forward with their views would have been the first to criticise us for being silly enough to take it. The British people have worked too hard, sacrificed too much to achieve the excellent prospects that lie ahead for us to even consider putting it at risk. We are not that sort of Government.

    Ken Clarke’s Budget had three clear objectives.

    To build on the strength that his earlier Budgets had created.

    To increase the nation’s commitment to raise standards in our classrooms, expand the health service and back the police in their growing success in their fight against crime.

    And to reward those millions of our citizens who have worked so hard to help to build the economic success we now enjoy by giving back to people, in as fair a way as we could devise, a growing share of their own money.

    This morning the Chancellor made an excellent speech outlining his Budget. I warmly congratulate him on it.

    In planning the nation’s finances, it’s vital to get the long term arithmetic right.

    And that’s what we’re determined to do.

    Reducing the overall amount Government spends and borrows. Spending more on our hospitals, schools and police. Leaving more money in people’s pockets by cutting taxes.

    Widening the bands. Cutting the basic rate. And introducing a new, lower 20 per cent rate on savings.

    Now a quarter of all taxpayers will pay tax at 20p.

    In time, 20p will become the basic rate.

    That’s the way to the future. To prosperity that lasts.

    And it’s the way we’ll continue to build a prosperity in which we shall all share.

    Welfare

    But this budget also had measures to deal with other long term issues.

    As more people live longer, paying for their care is one of society’s major challenges.

    To leave our children a welfare system which works and they can afford, we must plan ahead. We are developing imaginative solutions to address the growing cost of long term care.

    So we’re examining how to encourage people to provide for themselves and share the cost with the state. Protecting their wealth so it can be passed on to their heirs.

    And shorter term, we’ll be raising the capital threshold so people who face these costs will be able to keep more of their assets.

    We’ll go on working at this problem.

    We owe it to elderly people. We owe it to our children. And we’ll not just talk about it – we’ll do it.

    Welfare should always be there for elderly people with nowhere to turn. Just as it should be there for the unemployed looking for jobs. The weak and disabled with no support.

    The people of this country are always ready to lend a hand to those who, through no fault of their own, have fallen on hard times.

    We have one of the most comprehensive social security safety nets in the world.

    To run it costs the average worker £15 every working day.

    Until recently, the social security budget was rocketing up. Eating into more and more of people’s pay packets. Thanks to the fight against fraud and targeting benefits on those in greatest need, it’s now growing more slowly than the economy as a whole.

    We must keep it that way. And we must ensure that people have incentives to look after themselves and families, and not rely on the state.

    This week’s budget provided more concrete help for the unemployed. We know jobs for the future are created by enterprise, not government.

    But governments can help those who have been out of work for sometime to regain the confidence and work experience they need.

    And we can ensure that people have the incentives and motivation to move from welfare into work.

    In my speech at Blackpool a few weeks ago, I talked about our plans to develop a contract for work.

    And this morning, Gillian Shephard announced we are proceeding with pilots to offer new opportunities for work experience to the long term unemployed.

    The majority who are genuinely seeking work will find this a lifeline. But those who refuse to take an offer of work experience will lose some or all of their benefit.

    Another example, Madam Chairman, of how we develop long term policies to deal with long term problems – and then take real action.

    Once again, we will look with interest at whether the Labour party has the courage to support us.

    Madam Chairman, we’re steadily building the economic foundations to double our living standards in twenty five years.

    Those foundations can easily be wrecked by the wrong policies or the wrong government.

    Compare Ken Clarke’s carefully constructed Budget with Labour’s ramshackle plans.

    Instead of sensible economic policies they offer gimmicks.

    Remember Gordon Brown’s lop tax gimmick? No sooner was it out of his mouth than it became a long term objective, then disappeared into silence.

    The leader of the Labour Party claims that he doesn’t want to put up taxes.

    The Deputy Leader, that affable character from Kingston upon Hull, doesn’t quite agree.

    Labour ‘should not follow the Government down the road of reducing the basic rate of tax’ he said.

    And in case that was just a slip from the mouth of the Humber, he’s also said that under Labour there’d ‘certainly’ be a higher top rate.

    That’s refreshingly frank. And undoubtedly true. But it’s certainly not what the Labour leader told the CBI, or anyone who’d listen.

    I know Labour now say they believe in choice, but the only choice they offer is who to believe: the Labour Leader or the Deputy Leader?

    I know what experience suggests. They’ve voted against tax cuts all their lives.

    They approach every problem with a flapping chequebook. They hold the pen, but it’s your chequebook and your money.

    And spending more means only one thing. They would have to put up taxes. It’s as simple as that.

    Without higher taxes, Labour’s sums don’t add up.

    The Nation

    I don’t usually quote Roy Hattersley with approval, but he was surely right to say Labour has become less a moral crusade and more of a marketing campaign.

    And it needs marketing because it’s a dismal product.

    But, Madam Chairman, while Labour run their marketing campaigns in their own interests, we’re running the country in the national interest.

    We are preparing Britain for the challenges of the future. Immediately ahead of us is the European Council in Madrid.

    I act in Europe with only one interest in mind: Britain’s national interest.

    Sometimes that means we can’t agree with our European partners. If that’s the case, so be it.

    I want Europe to succeed, but not at Britain’s expense.

    The Labour leader says it’s his policy never to be isolated in Europe.

    Think what that would mean.

    Imagine if Margaret Thatcher had never been isolated, we’d never have had our budget rebate worth billions of pounds to British taxpayers.

    If I’d never been isolated we’d have no opt-out from the Single Currency. We’d not have the choice to join or not to join as British interest dictates.

    If I had never been isolated, Britain would now be in the Social Chapter, losing jobs rather than gaining investment.

    Of course, we know that the Labour leader would take us into the Social Chapter. He made out that it was like buffet lunch: you can have some dishes, but not others. Pick and mix. Choose only what you like.

    Of course, European policy is very complex. Some of it is difficult to understand. And the Labour leader hasn’t had any experience of European summits.

    Or, indeed, any summits except Labour summits. And to avoid being isolated at those, he doesn’t invite the Deputy Leader.

    But, on the Social Chapter, he’s plain wrong.

    The Social Chapter is a mechanism, a means to an end. On much of it, there’s no veto. No picking and choosing. You have to swallow the lot.

    Tomorrow, I gather he may be talking about Europe again. Last time, he misled the country. Inadvertently, no doubt. He should put the record straight. We’ll watch to see if he does, and if he doesn’t, we’ll prod him again and again – until he does.

    The fact is – even if you prefer co-operation to confrontation – sometimes it’s necessary to stand up for British interests, even if our partners disagree. I believe that is the job of the British Prime Minister. And if you’re not prepared to do the job, don’t seek it.

    My patriotism is not jingoistic tub-thumping. It’s a deep respect for the people and traditions of our nation.

    The strongest foundation of our society is our United Kingdom.

    Some say the nation state will soon be irrelevant.

    I disagree.

    In a changing world, people want to hang on to what’s familiar. The nation state offers that reassurance and continuity. It matters to people as much today as it ever did.

    I don’t look to mend what isn’t broken. I don’t change things for change’s sake. We are, after all, the Conservative Party.

    But to meet the challenges ahead, we must accept change where change is due.

    That’s why, this week, Michael Forsyth proposed changes to improve the Government of Scotland.

    But we are the Conservative and Unionist Party.

    We must protect the union of proud countries. Some people in Scotland want independence.

    There’s nothing to stop them going their own way. But it’s my task, as Prime Minister of the United Kingdom, to point out the dangers of that happening.

    Will the Scots feel the Union gives them a better deal if they have to pay the extra Tartan Tax? It’s a straight tax on Scottish jobs, on Scottish investment, on Scotland’s future prosperity.

    Moreover, Labour’s Scottish spokesman has made it clear. He believes the majority of MPs in the Parliament at Westminster should not have the final say on the Laws of Scotland, but must defer to the majority party in Scotland. Would they apply the same proposition to England?

    For on that basis, few past Labour Governments could have Governed England – they had no majority in England. What sort of perversion of our Constitution are they prepared to tolerate?

    Either they fail to grasp the dangers of such devolution, or they’re prepared to sell the crown jewels of our political heritage in a desperate bid for votes. For they are putting the whole constitution of our country into question. As they plan that, how dare they talk of the national interest?

    Down the years, our Union has weathered all that our enemies have thrown at us.

    What folly if Labour were allowed to do what our enemies never achieved – split our island apart and set one people against another. What stupidity.

    Yet, that would be the effect of Labour policy. They offer a tax-raising parliament to out-flank the SNP for their Labour Party advantage. Yet that very Parliament would prove to be the very mechanism to maximise conflict and wreck the Union.

    What an irony it would be. In opposition we know Labour knock our country. If they ever came to power, they would divide it and we would all rue it.

    There’s only one Party that will protect the unity of Britain. That represents our whole nation. That’s our Party – the Conservative and Unionist Party. The Party of the Union. We care for the Union. We care for the nation state. And in our hands – and only our hands – it is safe.

    Peroration

    Wherever I go in the world, Britain’s reputation is on a high.

    The resentments of Empire have been replaced by the affections of commonwealth.

    Britain’s economic revolution is studied and copied across the globe.

    Exports markets daily open wider, for products that are made in Britain and sold from Britain.

    Our military services advise Government across the world because our standards are respected and admired.

    Students flock here from all over the world to take advantage of our academic achievements.

    So yes, I am proud to be Prime Minister of this country. Proud to be Leader of this Party.

    The only Party that believes in Britain. That articulates the success of Britain. That travels the world explaining the triumphs of Britain.

    And if we have to do that against the clamour of the Opposition Parties and despite the relentless self-destruct mode of too much of our national media, we must shout louder, shout longer and shout with more conviction.

    Madam Chairman, we should have more confidence in ourselves and in our Party. We have piloted this country through very rough economic weather.

    We have taken decisions unpopular for our Party because we judged them to be right for our country.

    The fruits of those decisions are now becoming clear.

    We have led this country to an opportunity of unimaginable dimensions. Together, we shall ensure not only that the prizes are there to win, but that we are there to win them.