The Rt. Hon. Sir John Major KG CH

Tag: Maastricht Treaty

  • Sir John Major’s Interview on the Andrew Marr Show – 5 June 2016

    The text of Sir John Major’s interview on the BBC’s Andrew Marr show, broadcast on 5 June 2016.

    ANDREW MARR:

    So to the main event part one. Sir John Major, who’s struggled through every day of his premiership against rebellious anti-Brussels Tories. He’s described the Leave campaign as an ‘unforgiveable fraud’ on the British people. And he joins me now. Those are strong words, Sir John. Are you referring, when you talk about that and the deceit of the Leave campaign to Boris Johnson in particular?

    SIR JOHN MAJOR:

    Not particularly to Boris, no. I think it goes much wider than simply the leader. Of course, as the leader, Boris is in a position to stop it. But I felt that for several reasons. Firstly on the economy and what would happen if we actually left. The Leave campaign have said absolutely nothing to the British people, and what they have said about leaving is fundamentally dishonest and it’s dishonest about the cost of Europe. And on the subject that they’ve veered towards, having lost the economic argument, of immigration, I think their campaign is verging on the squalid, and I’ve said so before and I’m happy to say so again.

    ANDREW MARR:

    Is it not possible that these are thoroughly honourable men who have taken a big political risk, risked their own political reputations, their own political futures standing for something they fundamentally believe in, and which is agreed with by a huge number of British people? That these are the good guys in essence?

    SIR JOHN MAJOR:

    I’ve no doubt that there are many people in this country, including members of the Leave campaign, who thoroughly believe what they say. I’ve never questioned that. But I must say in Boris’s case it was a rather late conversion. I don’t know whether he had a day trip to Damascus and came back, but until the very last moment everyone thought he was in favour of staying. But he’s made up his mind and I respect that. But I think what they have done now they have begun the campaign is to feed out to the British people a whole galaxy of inaccurate and, frankly, untrue information. And what they have not done is tell us what would be the position if we were to vote to leave. I think it would be chaotic and damaging, and I think the people who would suffer most would be the ordinary everyday man and woman in the street. They need to tell us, if they wish us to leave, what it would be like and how they would then meet some of the objectives they’ve set out.

    ANDREW MARR:

    They say this morning an extra 300,000 jobs would be created because we’d be free to strike our own trade deals with America, Australia and China and other countries.

    SIR JOHN MAJOR:

    Well, it’s fantasy. Firstly, we have something like three million jobs connected – I’m not saying they’re wholly reliant – but connected to our present trade with Europe and essentially with the single market. I gather their current policy today is that they will leave the single market.

    There would also be a socking great hole, according to every commentator, in our public finances. So these promises of expenditure on the national health service, or elsewhere, are frankly fatuous. They are a deceit.

    We would lose a huge amount in terms of national income through trade, the small businesses who sell their goods to Europe, who would sell less because if we left the single market we would face a tariff barrier of probably around ten per cent. So we would sell less, people would lose their jobs, we would find ourselves in a much worse position. The Leave campaign can turn to no serious organisation who believes what they have said about the economy and about the future of Britain and the single market.

    ANDREW MARR:

    So to be clear, you’re saying this is a deceitful campaign? To call a spade a spade, are you saying that Boris Johnson is lying?

    SIR JOHN MAJOR:

    I’m not personalising this. Though I do find it very difficult to understand how Boris can justify the 350 million that he has on his battle bus, that he and Michael Gove in particular have defended time and again. You know, I know, the IFS knows, everyone knows, Boris knows, that the real net amount that we send to Europe is about one third of that. After the rebate and after the money paid back to our fishermen, to our farmers, to our researchers, the amount we send to Europe is about one third of the amount that they claim. Now, if they can’t be straightforward and honest on a clear cut matter of fact like that, upon what else can we trust them?

    ANDREW MARR:

    You keep using words like ‘straightforward’, ‘honest’, ‘deceitful,’ and yet you say you’re not personalising it. You are accusing people of lying.

    SIR JOHN MAJOR:

    I’m talking of the Leave campaign; I’m not necessarily talking of individuals. I’ll tell you exactly. I think throughout the whole of my political life people have regarded me as being guilty of understatement. I am angry at the way the British people are being misled.

    This is much more important than a general election. This is going to affect people, their livelihoods, their future for a very long time to come. If they are given honest, straightforward facts and they decide to leave, then that is the decision the British people take. But if they decide to leave on the basis of inaccurate information, inaccurate information known to be inaccurate, then I regard that as deceitful. Now, I may be wrong, but that is how I see their campaign. This is so important for once I’m not prepared to give the benefit of the doubt to other people, I’m going to say exactly what I think, and I think this is a deceitful campaign. In terms of what they’re saying about immigration, a really depressing and awful campaign. They are misleading people to an extraordinary extent.

    ANDREW MARR:

    Well, let’s move to immigration if we could. When you were Prime Minister, I think when you left immigration was still below 50,000, around 48,000 something like that. It’s now a third of a million and rising fast. It’s not racist or xenophobic to be really worried about that, to be worried about the effect on all of us.

    SIR JOHN MAJOR:

    No, no, no. I’m worried about it. Everybody is worried about that.

    ANDREW MARR:

    But your side don’t seem to have an answer.

    SIR JOHN MAJOR:

    Well, I don’t think they have an answer. We’ll come directly to that if you wish. Let me take the immigration point absolutely head-on. Yes, immigration is very high, and yes, this causes great troubles for us. Not only for us, but all across Europe. Half the world is on the move at the moment because of what is happening in North Africa and the Middle East, because of fears about Russia in Eastern Europe, because of the economic difficulty within the eurozone, there are a lot of people on the move. They come here because we are a great and successful country. The nonsense we hear from Leave about let’s get our mojo back and be a great country, we are a great, successful country, that is why people are coming to us. Now, how long will this last? It is a serious problem, you are going to see a diminution as the eurozone recovers, and it is recovering, it’s now growing pretty much as fast as us, the eurozone. But it isn’t just us.

    The point that really angers me is the utterly false suggestion, repeated more than once, not in a single offhand remark but in scripted, carefully prepared speeches, that we face the risk of 88 million Turks coming here. Firstly Turkey are not in the European Union. They’re unlikely to be in the European Union in the next decade or two. Even if by some chance they were, we are outside Schengen. In any event, is it seriously suggested, as they do, that all 88 million Turks would come here? Apparently for a higher national living wage. On the one hand they’re saying migrants are depressing wages, and on the other people are flooding in to get our higher national wage. It’s nonsense.

    ANDREW MARR:

    Let’s be clear, Sir John.

    SIR JOHN MAJOR:

    Nonsense on stilts.

    ANDREW MARR:

    The EU wants Turkey to join, the British government wants Turkey to join, the Prime Minister has said he’d pave the way from Brussels to Ankara. So this is not a complete fantasy, it’s quite possible. This choice in this election, this decision, could be with us for 20 or 30 or 50 years’ time.

    SIR JOHN MAJOR:

    The Turks have been negotiating for the best part of 30 years a whole series of different things that have to be negotiated. They’ve negotiated one of about 30. Even if they were able to reach agreement with the European Union, any one nation in the European Union could veto their joining. The French have already said they would have a referendum on that issue. The Germans almost certainly will follow suit. Turkey will not be in the European Union for a very, very long time, if ever, for a whole series of practical reasons. And the Leave campaign know that. That’s the point, they know that.

    ANDREW MARR:

    There are people watching this who will say, hold on a second, this is Sir John Major, this is the man who negotiated the Maastricht Treaty and at that time you got your opt-outs and so forth – I remember it very well, I was there at the time, in the rain, in the dark and so forth. But nonetheless we were being told at the time that the European Union was not going to evolve into a very centralised super-state and sprawl and spread. And actually your critics then were right, because that’s what’s happened.

    SIR JOHN MAJOR:

    No. No, it hasn’t. Firstly, you’re quite right, I did negotiate the opt-out of the single currency. I’m told by the Leave campaign I’m wrong on everything on Europe. Well, I certainly wasn’t wrong on that.

    ANDREW MARR:

    What about those other treaties which followed, which followed nonetheless, in a direction of travel?

    SIR JOHN MAJOR:

    Not under my premiership they didn’t. We were also out of Schengen because I declined to join it in 1996. Now, what happened, we negotiated at Maastricht a safeguard, the subsidiarity safeguard, which was then bypassed. David Cameron has now effectively reinstated that with his red card system. So it has been reinstated. Any more power in a treaty – now, this is very important – any more power in a treaty to Europe would have, by British law, now to be approved in a referendum. So if there is a grab towards a super-state, which they may integrate further inside the eurozone, but we’re not in the eurozone and we’re not going to integrate further.

    ANDREW MARR:

    Does that not live us a bit like a kind of rickety sidecar stapled to the side of a vast Mercedes going to a place we don’t want to go?

    SIR JOHN MAJOR:

    Only if you think we’re a little country. We’re not a little country, we’re a big country. We’re one of the biggest countries in the European Union. We are outside the eurozone, we are not responsible for their debts, we are not going to be responsible for their debts. We are not going to enter the eurozone. We’re staying in a wider Europe and we’re going to continue to trade with Europe if we are wise, but we are not involved in what is happening in the part of Europe that is in difficulty. But if we cut ourselves adrift, we will become a vastly diminished country.

    ANDREW MARR:

    We’re talking about the world after Brexit, if that’s what happens, and you’ll have seen a whole series of pledges now, about 100 million a week for the NHS, about an Australian-style points system, about new farming subsidies and much else. It’s beginning to look like another manifesto isn’t it?

    SIR JOHN MAJOR:

    Well, it’s certainly very ill thought-out. I mean, the concept that the people running the Brexit campaign would care for the national health service is a rather odd one. I seem to remember Michael Gove wanting to privatise it. Boris wanted to charge people for using it. And Iain Duncan Smith wanted a social insurance system. The NHS is about as safe with them as a pet hamster would be with a hungry python. So I don’t think that’s very wise. As far as immigration is concerned, what they’re planning is immensely difficult. Let us suppose that they win, let us suppose that for a moment and that’s possible, and their policies on immigration were implemented. Firstly, as you know, the Scots may hold another referendum. We might end up with Britain out of the European Union and Scotland out of the UK. If Scotland is out of the UK –

    ANDREW MARR:

    England alone?

    SIR JOHN MAJOR:

    Well, England and Wales. But you, Andrew, you will be a –

    ANDREW MARR:

    I’ll be sent back.

    SIR JOHN MAJOR:

    You’ll be a migrant.

    ANDREW MARR:

    I’ll be sent back over the border, I’m sure.

    SIR JOHN MAJOR:

    How are they going to reduce their numbers? There are more people coming into this country from outside the European Union than inside. Who are the people they’re going to send back? The 52,000 doctors in the national health services, doctors and nurses? The 80,000 care workers?

    ANDREW MARR:

    To be fair, they’re not talking about sending anybody back. Because of the Luxembourg Agreement, they can stay.

    SIR JOHN MAJOR:

    How are they – we won’t be in the European Union if we leave. How are they going to reduce their numbers? Who are they going to stop coming in? The footballers who enchant us? I think we need some practical information and we’re not getting it. People are being invited to vote for a pig in a poke.

    ANDREW MARR:

    Two final thoughts just before we finish. Do you think this is about Boris Johnson’s personal ambition?

    SIR JOHN MAJOR:

    Well, I’ve no idea. I can’t see inside Boris’s mind, and I wouldn’t attempt to try and do so. But I would just offer this piece of friendly advice – I like Boris, I don’t know him well, but what I’ve seen of him I like.

    ANDREW MARR:

    Well you took him off the candidates list, didn’t you once a long time ago?

    SIR JOHN MAJOR:

    No, I did not. No, that’s utterly untrue. No, I did not. He’s a very engaging and charming court jester and a very engaging and charming public figure, and he’s very likeable and people like him. But I think I would offer him this piece of advice. If the Leave campaign led by Boris continue to divide the Conservative Party as they are doing at the present time, and if Boris has the laudable ambition, for it is a laudable ambition, to become Prime Minister, he will find if he achieves that that he will not have the loyalty of the party he divided. Iain Duncan Smith was serially disloyal in the 1990s. When he became leader he was surprised that no one was loyal to him. Now, Boris should learn from that. And I think Boris – all his instincts in the past have been those of a One Nation Tory, which is where I stand. He seems to have drifted away from that, with the way in which they’re approaching immigration and some of the other things. I’d like to see him get back, because if he gets back he is an engaging Conservative, important engaging Conservative figure.

    ANDREW MARR:

    Do you think the Conservative Party is in danger of dividing?

    SIR JOHN MAJOR:

    Well, we’ll have to wait and see. All I can say is that whether the Conservative Party divide or not is one thing we must look at in the future. But that is not as important as the decision that we have to make. This is not about political parties, it’s not about the elites, it’s about the everyday men and women in the street and their children and their grandchildren. It is their future that will play Russian roulette with if we leave the European Union.

    ANDREW MARR:

    My last question. Given what you’ve said about Boris Johnson today and in the past, do you think he’s fit to be Prime Minister?

    SIR JOHN MAJOR:

    I’m not making judgements about whether anybody is fit to be Prime Minister. That’s a matter for a much wider view than mine. It’s a matter for the Conservative Party, ultimately it’s a matter for a whole electorate. So I wouldn’t be so impertinent as to have a suggestion either way. I merely say that whether Boris is Prime Minister is no doubt a very important matter for Boris and many other people, it is less important than the decision we have to take in less than three weeks’ time. That is crucial. And I must say, if I may put it this way, of all the participants there is nobody on the Leave side of the campaign who has, as I have, sat at the top table in Europe for seven years, and I know from what I have seen inside the European Union that what they say about unelected elites is absolute hogwash. The Commission, for example, are answerable to David Cameron, Angela Merkel, Francois Hollande and the others. They’re appointed for a limited period of time, they’re told to produce legislation which then has to be approved by ministers, the European Parliament, the Westminster Parliament. The belief an unelected elite is running wild is yet another piece of copper-bottomed Leave nonsense.

    ANDREW MARR:

    Sir John Major, thank you very much for talking to us this morning.

  • Sir John Major’s Speech at Chatham House – 14 February 2013

    The text of Sir John Major’s speech held at Chatham House on 14th February 2013. The speech was entitled “The Referendum on Europe : Opportunity or Threat?”. A PDF version of the speech is also available.

    SIR JOHN MAJOR:

    A short while ago, the prime minister offered the nation a referendum on whether to remain in the European Union – or leave it, and I believe he was right to do so.

    As a general principle, I don’t like referenda in a parliamentary system. But this referendum could heal many old sores and have a cleansing effect on politics. It will be healthy to let the electorate re-endorse our membership, or pull us out altogether. At present, we are drifting towards – and possibly through – the European exit. We need a renegotiation – and a referendum endorsement of it, and if that is denied, the clamour for it will only grow.

    But it is a gamble – for the country and for the Conservative Party. The relationship with Europe has poisoned British politics for too long, distracted Parliament from other issues, and come close to destroying the Conservative Party. It is time to resolve the matter.

    If the referendum were held now, some polls suggest electors may vote to leave. In 2017, their decision may depend upon the outcome of the negotiations, and success in those might involve repatriation of powers, or opt-outs, or reform of existing policies, or safeguards against unwelcome developments. It will, most likely, be a combination of all these – and perhaps more besides. None of this will be easy. On many issues, there will be no natural meeting of minds.

    To what the French call the Anglo-Saxon mind, the case for reform is very strong: unanswerable, even. To many Continental minds, there is a very different perception. The French already believe that sterling has a competitive advantage over the euro. They now fear that the UK will opt out of social and employment provisions to give our economy a further competitive boost. They will not readily concede that in negotiations. We need to prepare our own proposals without delay, negotiate courteously and with understanding and the manner in which these negotiations are conducted will be vital.

    If we enter them without appreciating the position of each of our European partners, we will fail.

    If we enter them without engaging with each of our European partners, we will fail.

    If we enter them with the aggressive attitude of ‘give us our way or we quit’, we will fail.

    We British would regard any such approach from our European partners as a threat, an attempt to bully; and, just as we would take a dim view of that, so would they.

    When the end game approaches, the prime minister will need to conduct the negotiations personally – and when he does he will find that more concessions will be won in relaxed, personal face-to-face discussion than in formal talks. But long before that, much preparatory work must be done, and that preparatory work is so substantial it wouldn’t be physically possible for the prime minister himself to do it.

    I believe therefore that he should appoint a lead negotiator who sits in the cabinet. And if the Liberal Democrats oppose such an appointment – which is possible, since they oppose a referendum – then the prime minister should over-rule them. On a matter of this national importance, the tail must not wag the dog.

    It is essential that this negotiator is seen as the prime minister’s personal emissary. He, or she, must visit and re-visit every European capital to explain our case, seek allies, set out our aims, and – crucially – emphasize the damage to the European Union as a whole if the negotiations fail and the referendum is lost.

    The prime minister cannot afford to ignore the home front. He must carry public opinion with him. In Parliament, I have no doubt he will continue to receive unsolicited ‘advice’ about what powers he must repatriate. Some of his colleagues in offering this advice will think it’s helpful, and that our partners will hear the strength of feeling – and immediately capitulate. That is quite wrong. They will not. Such advice – given publicly – will undermine, not strengthen, the prime minister’s negotiating position. And it will do so, because he will be seen to be acting under political duress, rather than principle and conviction – and his hand will be correspondingly weakened. And I know that because I have been there: advice, yes – that is a proper role for parliamentarians – but the truly well-meaning will give that advice in private.

    Many colleagues will be instinctively loyal, but not everyone. Rebellion is addictive, and some members may be getting a taste for it. I learned 20 years ago that the parliamentary party includes irreconcilables who are prepared to bring down any government or any prime minister in support of their opposition to the European Union.

    Some have softened their views with age. Others have not. The present Parliament contains members whose opposition to the European Union is fundamental.

    Members with Conservative heads and UKIP hearts cannot be placated. Whatever is offered to them will be insufficient. They will demand more. They will only be satisfied by withdrawal. It is, therefore, essential for the prime minister to rally the persuadable majority of the parliamentary party.

    And if the negotiations fail, and the referendum is lost, we could slip out of the EU in frustration and by default. The prime minister should be prepared for the likelihood that the irreconcilable amongst his parliamentarians, including perhaps some ministers, will campaign for a British withdrawal.

    I am neither a Eurosceptic nor a Europhile. As prime minister, I vetoed the appointment of the president of the Commission because the candidate – an able man in every way – held views inimical to our national interest.

    At Maastricht, I obtained opt-outs from the Single Currency and the Social Chapter. And I did so by explaining in innumerable private meetings why I could not accept those policies and that, without an opt-out, I would have no choice but to veto the whole treaty.

    I judge our membership of the European Union upon one overriding criterion: is it good for Britain?

    Is it good for our economic well-being? For competition, and jobs? For our general quality of life? Is it good for our security, our diplomacy and our standing in the world? All of these elements are relevant to the value of our membership. And now, after 40 years, the referendum raises new questions:

    • What would it cost us to leave?
    • What would we lose if we left?
    • And, if we stay, how can we carve out a leadership role?

    Firstly, some process. We cannot – legally – simply walk out of the European Union. We are obligated by Treaty to negotiate our exit, and also to meet liabilities that will crystallize at a later date. The costs could be substantial. No-one knows how substantial.

    If we left, a swift glance suggests we’d be freed of budgetary contributions, regulations, directives, interminable meetings, unwanted lectures and multiple frustrations. Sounds pretty attractive. But closer examination returns us to the world of realpolitik.

    One presumption from those who advocate leaving the European Union is that we could remain in the Single Market of 500 million consumers. That is, probably, true: but there would be a price. Norway – as a non-member – pays two-thirds as much per head for access to the Single Market as the UK pays as a full member of the European Union. We could accept similar terms if outside and that price would be likely to rise with every opt-out we achieve that our partners believe would give us a competitive advantage.

    Moreover, trade policy is a European Union prerogative: as a non-member we would have no national trade policy in place, and would need to negotiate our own free trade agreements. At worst, this could take years. At best, we might be able to piggy-back on existing European Union agreements. Either way, we are likely to face tariffs.

    And one example, I think, will suffice. At present, we export five out of every six cars made in the United Kingdom but – as a non-member – we may have to pay a 10 per cent external tariff on exports to the European Union, and a 5 per cent tariff on components. And that raises a question: would Nissan, I wonder, and BMW, Honda, Toyota, Ford continue to build at Swindon, Deeside, Dagenham, Bridgend or Oxford – or would they relocate and place future investment inside the European Union with no tariff on their cars? Many livelihoods in the UK depend upon that answer.

    And then tariffs are not the only – or even the worst – threat to competitiveness. Most trade barriers are regulatory and – for us to continue to sell in Europe – UK exporters would have to conform to European regulations. As a non-member, we would have no input into them, but if we wish to export we would have to meet them.

    Now, would this hurt us? Certainly. In the crucial area of financial services, we can anticipate that regulations could – and would – be designed to undermine UK competitiveness. Many would argue that in some areas this is already happening – and I would agree: but, whilst inside the European Union, we can mitigate the worst of the excesses. Outside, we could not.

    The European Commission, generally, is very unpopular in the United Kingdom – sometimes, rightly so. It can be insensitive and seem bullying. But we shouldn’t ignore its virtues. In alliance with the Commission, the UK has driven policy on the Single Market for many years. And in the negotiations to come, the European Commission may often be our ally. They know that a Europe without Britain would be more vulnerable to a move towards protection – and they know how damaging that would be.

    And then, of course, there is inward investment. Inward investment may also be at risk. Another question: would companies from around the world who invest over £30 billion a year in the United Kingdom be more – or less – likely to do so without unfettered access to the European market? To me, the answer is self-evident, but any doubters should ask those foreign investors – and then reflect upon the half a million jobs those same investors have created in the United Kingdom in the last decade alone.

    The impact of a withdrawal goes beyond trade and investment. In a world of global markets, countries are increasingly banding together. It would be a brave decision for Britain to go it alone. I bow to no-one in my pride of our country, but we should see ourselves as others see us. We are 70 million in a world of 7 billion, with countries like China, India, Turkey, Indonesia, Mexico and Russia all rising in economic and political importance. Do we wish to become less relevant in their eyes, or face the future as a leading voice in a block of 500 million people? To leave would be to march against history.

    Many of those who wish to withdraw from Europe do so on the assumption that we could enhance our relationship with existing allies: most obviously, the United States and the Commonwealth. They are mistaken.

    Economically, the United States looks increasingly to the East, where the market is growing. Politically, every American president I have known wishes to see the United Kingdom at the heart of Europe, because that is what is in America’s own interests. Outside, we would be of far less relevance: we could no longer advance the argument for free trade in Europe or – as recently – help develop sensible rules on data protection, or digital rules that accommodate American counter-terror objectives. Nor could we push for sanctions on Iran – a policy largely driven by the United Kingdom.

    So, be certain of this if nothing else: America does not want the UK to cut her ties with Europe. As for the Commonwealth, two facts suffice: we sell more to North Rhine-Westphalia than to India, and more to France and Germany than the whole of the Commonwealth added together. And incidentally, overall, we export four times as much to Europe as we do to the United States.

    Being inside the European Union can often be frustrating; but outside, we would be at a serious competitive disadvantage. The tens of thousands of UK companies who trade with the European Union should think long and hard about the consequences of exit. And so should their employees, numbered in millions. To leave would be a jump into a void.

    Now of course, the argument with Europe isn’t all one way. The prime minister’s negotiating hand is by no means empty. A British exit would seriously diminish the European Union itself. It would have suffered its greatest reverse. And this reality – well understood by our partners – strengthens our position, but must be deployed with care and sensitivity: clumsily handled, it could be counter-productive.
    If we left, Europe would lose one of her biggest economies. Her role as a global power would be diminished. So would her diplomatic reach. Her foremost free marketeer would have gone. Her main bridge with the United States would be broken. The Transatlantic Alliance would weaken. Even now, America, rightly in my view, complains that she contributes disproportionately to European defence: without the United Kingdom, the Continental European contribution – to their own defence in NATO – would be pitiful. Departure might be a leap into a void for Britain, but her loss to Europe would be palpable.

    None of the risks of separation mean the status quo is acceptable. Nor does it mean that it cannot be changed. I believe it should be – and I personally believe that it can be. What it does mean is that Britain and Europe must work to accommodate one another with goodwill and tolerance. Tolerance was once a great political virtue, and one that I would love to see restored to the body politic everywhere. With goodwill and tolerance, a deal can be done.

    At present, the eurozone is changing its relationship with the rest of the European Union: against that background I see no reason why we should not seek to do so, too. It’s not anti-European to fight for the British national interest. But we should not over-estimate what can be achieved.

    The prime minister can probably deliver safeguards for the City, less regulation, less bureaucracy, no more social legislation, enhancement of the Single Market and more besides. Beyond that, there are many areas ripe for reform, including a full repeal of the Working Time Directive, which a number of countries in Europe would welcome. We should also focus on tackling the democratic deficit and giving real muscle to subsidiarity. And we should do that because reforms that help Europe will also help the United Kingdom.

    Other European Union policies – CAP, fisheries, structural funds – are a constant frustration to the United Kingdom. But even if the prime minister were able to gain exemptions from these policies – does anyone imagine hard-pressed farmers and fishermen would welcome the loss of subsidy from Europe and not demand its replacement from the British Treasury? Does anyone assume for a second we would not need to replace the subsidies lost to poorer regions in our own country from our own resources?

    We know the answer to those questions: I daresay we could improve on European Union policies, but the net gain would be far more marginal than many people imagine. And whenever we out-competed Europe, they would react to offset our competitive advantage. And how do I know that? Because that is precisely what we did when we put tariffs on Norwegian salmon to protect our own industry in Scotland. As we did, so will they. And in our negotiations, it would be more productive in many areas for us to seek allies to reform core policies for everyone, than just to seek a British exemption from them.

    We will also improve the outcome if we take a proactive role in developing future policy: it would be fatal just to sit on the side-lines sniping. Many in Europe, rightly or wrongly, feel that we have lost interest in them: we should make it clear that we have not. We can – and should – carve out a leadership role.

    And some will say well – how can this be? Sterling isn’t in the eurozone, nor likely to join. Well nine other nations are not in the euro nor – although some have ambitions – are many likely to be admitted for many years. Denmark has an opt-out; Sweden and the Czech Republic don’t wish to join; others are far less enthusiastic than once they were. And their interests are often our interests. The Eastern Europeans for example were admitted to the European Union because we British – together with Germany – championed enlargement against the opposition of some others. We are a natural ally for their ambitions and for the reforms they seek. President Giscard d’Estaing has said our negotiation, and I quote, ‘opens the way for the indispensable reform of the European machinery’. He is right. There is an opportunity here and we should lead it in the negotiations to come.

    We must seek further reform of the budget, where we will have allies in Holland, Denmark and Sweden and, in many areas, would be able to make common cause with Germany.

    We should reengage the argument for completion of the Single Market. I’d like to see us advocate the appointment of a Single Market Commissioner to oversee this work across the whole range of services: financial, retail, medical, digital – the list is very long, and the potential gain is very large.

    We could seek to interconnect the energy market. We could widen trade agreements. We could try and create a true European venture capital market. There’s no lack of areas where we can seek to lead, and change, and improve European policy.

    We should continue to work with France in particular to develop policy on the Middle East and the North African rim. Stability in that region – with its trade and investment potential as well as its proximity to southern Europe – is crucial to Europe, and Britain and France are well-placed to lead policy. We have had successes with action against Libya and sanctions against Iran, but there are many more options.

    I believe a proactive role in Europe would pay rich dividends in policy and perception – both at home and overseas. It would also highlight our British value to the European Union, and by highlighting our value encourage acceptance of our demands. Our case is logical and can change minds, but it will require time and patience and commitment.

    What of the future?

    Why are so many of the British – perhaps especially the English – so cool towards the EU?

    Some blame Eurosceptic opinion, and that has been a powerful factor. As pro-Europeans have remained silent, anti-Europeans have become more vocal – and less tolerant.

    But that is far from the whole story. Europe is also culpable. Year after year, Continental leaders have told us that Britain is an essential and valued member of the European project. That is flattering, but their soft words are offset when they pursue policies they know to be anathema to us. For years, Continental leaders have denied a federal ambition, while their policies have moved us closer towards it. They have introduced a single currency, job-destroying legislation and excessive regulation. There has been a wilful refusal to complete the Single Market. Some have flirted with protection. All of these policies are against British advice and British interests. If we are seen to be unreasonable by some, we do have some cause for that stand.

    And emotion matters too, in this debate. Our electorate doesn’t like to see Britain dragged along at the tail of the cart: they’d much prefer to see us to be in the driving seat. I suspect that if Britain were seen to be proactive in policy, it would revolutionize British public opinion.

    And that is necessary: because at present, public frustration is very deep. Perhaps deeper with Europe than I can ever recall it being at any time in the past.

    We don’t know where ‘more Europe’ will end. Or how we can stop an ever increasing bureaucratic power grab into what Douglas Hurd memorably called ‘the nooks and crannies of our national life’. People fear: will we eventually be submerged in an undemocratic United States of Europe? For most of us, that is simply unacceptable.

    We need an end point, and we need to know what it is. And we need to be confident that it will not be breached. These are all matters for the negotiations to come.

    Let me summarize.

    When we come to the referendum, the public will decide. At present, affection for the European Union is minimal. Its virtues are denied, even ridiculed. Its drawbacks are emblazoned in debate. Years of negativity have sunk deep into the British psyche. Ill-feeling between pro and anti factions is worn by some like a badge of honour. Debate over Europe tends to be conducted at the extremes of opinion, with most of the country uninvolved. A single-issue party, dedicated to withdrawal, has grown in public popularity. Public scepticism about Europe feeds on an intense patriotism, and has become a reality our political system cannot ignore.

    Some see the referendum as merely a piece of party political management – but it is much more than that.

    It can be cathartic.

    It can end 40 years of political squabbles.

    It can allow our Parliament, undistracted, to put vital issues – such as the growing underclass and the disregard into which politics has fallen – where they should be: at the very forefront of our national debate and national agenda.

    The referendum can help reform the European Union, and for the better.

    It can resolve both justified – and unjustified – fears about our membership.

    And it can encourage the United Kingdom to take a more positive leadership role in the development of future policy.

    All this is possible.

    Let me close with a vignette. In 1990, in an attempt to head off a Single Currency, I advanced the concept of the ‘hard ecu’: a parallel currency that was market-driven and would co-exist with national currencies. Our proposal failed. It was – first – too late; but the more pertinent reason was explained to me by President Mitterrand. His response was simple. ‘Right policy – wrong country.’

    ‘Right policy – wrong country.’ All too often, that sums up how Britain has been regarded in Europe. The referendum gives us an opportunity to change that perception. It is in Britain’s interests – and Europe’s interests – that we take this opportunity and that we do so.

    Thank you very much.

  • Sir John Major’s Article on Fiscal Union – 26 October 2011

    The text of Sir John Major’s article on fiscal union, published by The Financial Times on Wednesday 26th October 2011.

    SIR JOHN MAJOR:

    The crisis in the eurozone was inevitable but has been accelerated, and worsened, by the banking collapse. It will not be solved easily or quickly. When it is, it may lead to a very different European Union.

    The root of the present chaos can be traced back to bad politics taking precedence over sensible economics. At Maastricht, which I attended as prime minister, the assumption was that – before the euro was born – the economies of member states would converge: that is, operate at broadly the same levels of efficiency. Safeguards were set: it was agreed national fiscal deficits should not exceed 3 per cent of gross domestic product. Later, a Stability & Growth Pact was enacted to ensure sound fiscal policies. Yet, when the founder members launched the euro in 1999, the wise preconditions were ignored.

    After the birth of the euro, some southern states over-indulged on low interest rates and racked up debts. So did their citizens, without hindrance from their governments who basked in the popularity of the boom. When Germany and France over-stepped the criteria on debt without any penalty by the commission, the criteria became toothless. Debt soared. This would have led to a crisis on its own, but it was hastened by the 2008 meltdown.

    Hindsight is often graceless. But it is a fact that sterling did not enter the euro because we foresaw flaws in its structure. We believed monetary union without fiscal union was risky; that convergence of the powerful northern economies with southern Europe was unlikely (especially once Germany had absorbed her Eastern lender). I had a political objection as well: that entry into the euro, and the abolition of sterling, would remove key policy options from the British government. That is why, at Maastricht, I opted out of the euro.

    It was not easy. The opt-out was only obtained by threatening to veto the treaty. Our European partners were unhappy. Some thought we were acting in bad faith: they had agreed to the British initiative of a single market, and argued that monetary integration was necessary to accompany trade integration. They were upset that we had implicitly endorsed monetary union in the Single European Act of 1986 and, in 1988, had appointed the Governor of the Bank of England to help the Delors Committee examine it. All this was true. But, on the euro, our interests diverged from theirs which caused a policy schism. That may be about to happen again, with far-reaching consequences.

    As I write, the eurozone has an immediate dilemma. Policymakers must stabilise the eurozone banks, permit Greece to default and remove market fears of other defaults. Agreement on this is essential, but insufficient. The euro’s flaws will remain. The powerful German economy is still locked within the same currency as weaker economies. She racks up huge trade surpluses within the eurozone while others have comparable deficits. Since Germany has an estimated 30 per cent currency advantage within the euro, this seems likely to continue. It is undesirable and unsettling.

    In a sensible world, the southern states would devalue to become competitive – but they cannot. They are locked in a single currency. And because they cannot devalue their currency, they must devalue their living standards and promote reforms to enhance efficiency. This will take years. Meanwhile, wages must fall, unemployment will rise and social unrest will increase. The severity of this medicine may not be bearable in a liberal democracy.

    Most obviously, this has an impact on Greece. Of course, it has behaved foolishly. But that does not mitigate the present pain. As salaries are cut, new taxes are imposed and other taxes rise. It is no wonder people are frightened. Some ask: why is Greece in the eurozone at all? The ease of her entry exemplifies the follies of the founders. France insisted: “You cannot say no to the country of Plato.” Maybe not, but every European is now paying the price for admitting an economically unfit nation to compete in the eurozone.

    To safeguard the eurozone in the longer term requires a fundamental change of policy. It must become a fiscal union; a union of transfer payments to off-set regional disparities; or it must shrink. The latter option – essentially expelling Greece – has political consequences.

    There is no mechanism to do it. What would Greece’s future be? Would she remain democratic in the chaos that might follow? Pushing Greece out is not a risk-free option.

    Nor is a transfer union. Germany would hate it and transfer payments would institutionalise inefficiencies. That leaves fiscal union as the most likely destination. But it has huge political consequences. It implies a far greater level of integration, and is an escalator to a federal eurozone. This may be sensible economically, but it is profoundly undemocratic. It would drive voters and decision-makers dangerously far apart. More top-down Europe imposed by a remote elite could provoke a powerful antipathy.

    A more integrated eurozone will also provoke non-euro members of the EU by driving them further away from core decision-making. They will react adversely – which is why an early announcement of fiscal union is unlikely. Instead, judicially enforceable controls over deficits, early harmonisation of corporate taxes and a permanent chairman of the eurozone are likely early moves. We are drifting towards full fiscal union: only the timescale is flexible.

    This has consequences: non-euro members will not wish to be marginalised and may sniff suspiciously at euro-core proposals, rendering decision-making even more of a hurdle. If the eurozone integrates and co-ordinates policy, non-euro members may co-ordinate too. Confrontation looms. Deeper eurozone integration may encourage non-euro member states to seek to repatriate key policies they can’t influence. The UK will not be alone in this. In the next decade, a federal eurozone will change Europe’s mosaic. Within the eurozone it will become more prescriptive; outside, a looser union could emerge. A pattern of variable alliances is likely. EFTA countries may move closer to non-euro members. One thing is certain – the EU will not remain the same.

    In the UK, and elsewhere, many are pressing for their nation to leave the EU. This is an extreme option that would throw up far more problems than it would solve. For the UK it would be a dangerous mistake but, even so, our relationship within the EU will shift. Cool heads and clear minds are needed: our future depends on it.

  • Sir John Major’s Comments on the Financial Situation – 9 October 2011

    The text of Sir John Major’s comments on the financial situation, made in an interview on 9th October 2011.

    QUESTION:

    [Sir John was asked if the economy was in a serious state].

    SIR JOHN MAJOR:

    I think it’s pretty serious, but I think if you can reach a conclusion to the Eurozone crisis you’ll change the level of confidence and I think that will make a material difference. But at the moment you have the Eurozone pretty flat as an economy, you have American flat, you have the Chinese economy slowing and we don’t know how much it will slow, and you have the British economy teetering between no growth and tiny growth, so plainly it’s serious. And it is a different sort of recession from before because of the debt overhang.

    So yes, I do think it’s very serious.

    QUESTION:

    [Sir John was asked if the Bank of England Governor was right in saying the recession was worse than in the 1930s].

    SIR JOHN MAJOR:

    I think he’s looking at the scale of debt, if you actually look at the United Kingdom as an example, in 1997 – to pick a date at random – we had a national debt of about 350 billion, by 2010 it was 900 billion and on unchanged policies by 2014 it would be 1.4 trillion. So you begin to see the scale of the problem, and the fact it is absolutely unavoidable that you make changes in order to bring down that level of debt, because that overhang could be with us otherwise for generations.

    QUESTION:

    [Sir John was asked if everyone would have to work harder and cut back].

    SIR JOHN MAJOR:

    Certainly for a while, I don’t think there’s any doubt about that. There’s no point in pretending that the situation is suddenly going to magically come good with a bit of growth. I’m afraid we need a good deal more than that. And we’re going to have to restructure a great deal of what has happened, not least in the Eurozone which is crucial to us because we are not part of the Euro because, as you rightly say, I opted out in the Maastricht Treaty, but the Eurozone is 40% of our exports and the rest of the European Union as a whole is 50% of it, so their health is crucial to our health.

    QUESTION:

    [Sir John was asked if the Germans would transfer more money in].

    SIR JOHN MAJOR:

    I think it’s very unlikely, and the Germans have expressly been told that they won’t move towards a transfer union which is essentially what is being talked about.

    QUESTION:

    [Sir John was asked if the Eurozone would fracture].

    SIR JOHN MAJOR:

    I think it’s extremely unlikely that the European Union will fracture with nations dropping off the edge.

    QUESTION:

    [Sir John was asked if Greece would default].

    SIR JOHN MAJOR:

    It’s conceivable.

    QUESTION:

    [Sir John was asked if Greece would default within the Eurozone].

    SIR JOHN MAJOR:

    I think that is exactly what will happen and should happen. But I think that it is unlikely that the Eurozone will toss out a member, it’s conceivable that it could happen, but it would certainly be against their wishes.

    I think by far the most likely proposition, firstly you have to look at the short-term problem and then the longer-term problem. In the short-term the banks needs to be recapitalised and Greece needs to default. The sooner that happens and Greece defaults, the sooner you remove something, the overhang in the markets.

    QUESTION:

    [Sir John was asked what would happen if Greece defaulted].

    SIR JOHN MAJOR:

    What would happen is that if Greece defaulted and couldn’t pay its debts, all the Greek bonds that are held in other banking systems across Western Europe would suddenly have no value. You could, as a knock-on effect, create a banking crisis in Western Europe and French and German banks have most of the bonds. That would be absolutely catastrophic if that happened. So the Greeks mustn’t default until the Western European banks are in a position to absorb any losses that there might be without creating a banking crisis.

    QUESTION:

    [Sir John was asked if banks would be given money to fund this loss].

    SIR JOHN MAJOR:

    I think the way they may do it, I think there are two things that they could do, the first thing I think they could do is turn the European structural facility from a structural facility into a bank, give it a banking licence, let it leverage.

    QUESTION:

    [Sir John was asked if this would mean a new European Central Bank].

    SIR JOHN MAJOR:

    No, it would be quite separate from the European Central Bank, let it borrow money as banks normally can from the European Central Bank and either buy up the Greek bonds to remove the danger, the contagion from the Western banks, or use the resources to recapitalise the banks so they can bear the losses.

    That seems to me to be the first thing that has to happen, and then it would be thoroughly desirable, in my view, to get the Greek default out of the way. It’s a terrible overhang in the market, it’s partly priced-in, let’s get it done and then we can move on to the longer term.

    QUESTION:

    [Sir John was asked why he didn’t join the Euro].

    SIR JOHN MAJOR:

    There were three arguments, the first was that if you had a monetary union without a fiscal union it’s like a two-legged dog.

    The second argument, at Maastricht we produced some safeguards – although I opted out at Maastricht, we produced some safeguards – one of them was that no European nation would have a fiscal deficit of more than 3%, and the second was that before the Euro was formed the economies of those nations going into the Eurozone should converge, and by that piece of jargon we meant that they should operate at broadly the same level of efficiency. That didn’t happen.

    In the late 90s the French and Germans began to worry whether the Eurozone would ever happen, so they went into the Euro without the convergence. That was the tragic mistake, it shouldn’t have happened.

    Thirdly, when the Germans and the French went beyond the 3% deficit, the Commission took no action against them and everybody else did too, so you got this burgeoning level of debt that began to spread everywhere.

    QUESTION:

    [Sir John was asked if the Euro would change].

    SIR JOHN MAJOR:

    It will have to change, I think it will have to change.

    QUESTION:

    [Sir John was asked about the flapping of white coats].

    SIR JOHN MAJOR:

    No, the flapping of white coats was on a quite separate matter – and I don’t withdraw the remark. The substance of the argument is exactly the same as I advanced at Maastricht.

    QUESTION:

    [Sir John was asked whether the Euro-sceptics had been right].

    SIR JOHN MAJOR:

    They were partially right, but only partially right, and I will come to the situation as I saw it. The need for fiscal union is something we foresaw at Maastricht, which is why we opted out at Maastricht, that was right and is right.

    What is now I think going to happen, albeit in a crab-wise fashion, I think the Eurozone members will have to move towards a fiscal union. I don’t think they will suddenly say they are going into full-scale fiscal union, it would need a treaty and all sorts of other things.

    What I think they will do is produce legislation within the European Union that makes the control of fiscal deficits, the harmonisation of tax and matters like that, much more controlled from the centre. So they will be moving towards a federal state within the Eurozone and they will be moving to it out of failure and not out of success, that is the point.

    It then gets to the position where you have an inner-core within the Eurozone that is operating much more deeply and closely together than the rest of the European Union. And if you remember in the 1990s, Douglas Hurd and I, we called it variable geometry, and we saw a much looser European Union in which people opted in instead of opting out, and it wasn’t such a tremendously prescriptive union which everybody had to be a part of.

    That is the direction over the next decade, slowly, in which I think we will be going.

    QUESTION:

    [Sir John was asked if there would be a referendum on a new treaty].

    SIR JOHN MAJOR:

    There won’t necessarily have to be a treaty in this country for fiscal union. In terms of fiscal union it is conceivable that there will be a treaty just among the members of the Eurozone, so don’t overlook that possibility.

    QUESTION:

    [Sir John was asked if the referendum could be about a federal Europe that Britain wasn’t a member of].

    SIR JOHN MAJOR:

    I think that is conceivable. There are a dozen different ways in which this could unwind and frankly nobody can be certain which way it will go at the present time.

    But it is possible that there will be a fiscal union amongst the Eurozone members, they would have their own treaty. But at some stage there will be another treaty because if there’s fiscal union in Europe, it changes our relationship with Europe. That is the fundamental point.

    QUESTION:

    [Sir John was asked if powers should be transferred].

    SIR JOHN MAJOR:

    I think it gives an opportunity for two things, firstly, it gives us an option to negotiate for the looser form of Europe that I would like to have seen in the 1990s and we got no traction when Douglas Hurd and I argued for that then. I think it presents that opportunity. And secondly, I think there are some areas that are worth looking at, and this isn’t anti-Europeanism or Euro-scepticism. There are some areas which it would be worthwhile to repatriate.

    Fishing is one. There are elements of employment law, it used to be in the Social Chapter and has now spread, you will recall that I opted out of that in 1992 because I saw it as a job destroying mechanism. Now it has changed but the things like the working time directive, which I think is a very foolish piece of legislation, we could look at repatriating part of it.

    Clearly, financial services is another area. There has been a lot of talk about the financial transactions tax, I don’t think that will happen, for a range of complex reasons, but even so, financial services are crucial to the well-being of the British nation, it is what drove our growth – over-drove it as it happened – over the last twenty years or so.

    We really don’t want a whole series of restrictive notions damaging our financial structure in this country.

    QUESTION:

    [Sir John was asked if this was a new opportunity for Britain].

    SIR JOHN MAJOR:

    Europe changed fundamentally when the Europeans ignored the safeguards in the Maastricht Treaty and proceeded to an unsafe Eurozone, which they did in 1999 without any bark of protest from the United Kingdom. That changed it, that changed everything, because the Eurozone was no longer going to be a stable instrument, we were going to be outside it, but it could have been stable and it wasn’t. And that was a significant change and now I think there is an opportunity.

    I don’t see this as a Euro-sceptic attack on Europe, I see that with 27 nations within the European Union it has to change. It cannot be the same as with 15 nations or with 6.

    QUESTION:

    [Sir John was asked whether quantitative easing was right].

    SIR JOHN MAJOR:

    It isn’t George who has just quantatively eased as it happens, it’s the Governor of the Bank of England, and I think the Governor is right to do so.

    When you consider how much of our economy is driven by exports and you then see what is happening to our markets overseas, I think the Bank of England are right to quantatively ease. I think he is right. But more valuable might be the proposals put forward by the Chancellor himself to direct money specifically to parts of industry.

    QUESTION:

    [Sir John was asked about Liam Fox and what the Prime Minister should do].

    SIR JOHN MAJOR:

    It’s extremely difficult to handle these, either natural justice requires that you have to wait a long time and you’re then said to be incapable of making decisions if you operate under natural justice. Or you move too speedily and you’re said to be ruthless, so I don’t know what the situation is, the Prime Minister has asked for the facts to have a first look on Monday, and I think that is right.

    From the Prime Minister’s perspective he has to balance natural justice and the truth, rather than the gossip, the rumour and things that may be true, but I’ve no idea whether they are or not.

    QUESTION:

    [Thank you].

    SIR JOHN MAJOR:

    Thank you, my pleasure.

  • Sir John Major’s Ditchley Annual Lecture Speech (Ditchley Foundation) – 9 July 2011

    The text of Sir John Major’s Ditchley Annual Lecture speech, made at Ditchley Park in Oxfordshire, on Saturday 9th July 2011.

    SIR JOHN MAJOR:

    First, let me add my welcome to Jeremy and Anne Greenstock and John and Penny Holmes.

    Jeremy and Anne have been great servants of Ditchley; John and Penny are already showing they will be. We are lucky to have them.

    When John invited me to speak to you today, I was very reluctant to accept. I was dismayed that, once again – with impeccably bad timing – the Ditchley Lecture clashes with a Test Match. I also recalled some outstanding Lectures at Ditchley over recent years. I nearly said – No.
    I didn’t, because there are things to be said, questions to be asked – and ideas to be floated – that can more easily be done by a former politician than a current one. And where better than Ditchley – for so long a home for rational thought and considered debate? An oasis of calm in a world of frenzy.

    Every time I come here I am reminded of our debt to David Wills – and now, Lady Wills and Catherine.

    I just want to say to Eva and Catherine: we owe you more than we can repay.

    In preparing for today, I took to heart GH Hardy’s observation that one ought never to waste time stating a majority opinion. I will try and follow that advice.

    Accepted opinion is often wrong. Even more often, out of date. And, frequently, complacent.

    Let me say at the outset that nothing I say should be taken as a trial balloon for anyone else. I speak for myself alone and – reluctantly but possibly – will offend political friend and foe alike. Nevertheless, I shall set out what I believe Western Governments must do to secure our well-being, in a world that is moving faster than we are.

    This world is digitalising, urbanising and ageing. It is also migrating. The age of the single language, single culture state is over. Medicine, science and technology are carrying us where we have never been before. Social networks can elect Presidents and foment revolution. Global markets have outstripped the control of nation states.

    The world of 20 years ago, let alone 50, has long since vanished. In every field of human endeavour – and nearly every aspect of life – yesterday’s certainties are today’s imponderables and tomorrow’s dilemmas.

    The future raises uncomfortable questions, and even more uncomfortable answers. Some challenges are domestic, others can be resolved only by collective action. And, even if they are faced, and even if there are successful outcomes – and these are two big “ifs” – they will merely head off future problems.

    Pain now for gain later has never been an easy sell for politicians and, in a social climate that expects instant gratification, it becomes even harder. It was easier being a politician yesterday than today. And it is easier today than it will be tomorrow.

    The core question is: what must our Governments do to ensure our future prosperity? Must we change our policies, our expectations, our tribal politics – or all of these? It simply defies logic that the whole world can turn upside down, while we meander on in the same old way.

    At stake is our material well-being – and our status in the world – in 20, 40, and 50 years’ time.

    Some may say the battle is lost – that this will be China’s – and Asia’s – Century. I don’t believe that is pre-ordained. China, in particular, has many problems. The Communist philosophy is discredited. Her Government is not elected. Its only legitimacy is growth.

    In China and Asia, we are already seeing that rising living standards will bring greater demands – for social welfare, pension and much else besides – that will eat away at their present competitiveness.

    So this economic triumph of the East isn’t assured, but we do know they will be formidable competitors. So how are we placed to respond?

    Our present position, to put it mildly, is uncomfortable. It is axiomatic that every generation has an obligation to pass on to its successor something better than they themselves inherited. In recent times, we have failed.

    We have spent tomorrow’s money on yesterday’s gratification, and there is something immoral in that. And we have presided over a systemic financial collapse that has forced the prudent to bail out the reckless. There is something unjust in that.

    This is a sharp reminder that our democracy doesn’t guarantee efficiency. The democratic checks and balances we so cherish can become roadblocks. The tyranny of the electoral cycle can push politicians to short-term decisions.

    Equality replaces quality. Sound-bites stand in for home truths. It feels odd to point up the short-comings of democracy, when it has achieved so much – but if we don’t recognise them, we can’t correct them.

    Democracy has entrenched an enviable liberty of thought and action and presided over a quality of life our forebears could not have imagined. We are safer and, until now, richer. It has had a civilising influence. We have learned that decent people come in all colours. We abhor racism and bigotry. We have developed good human instincts of care and compassion.

    In due time, electors can vote Governments out and mostly they depart peacefully into Opposition. No wonder it is widely admired and copied. It has served us well but, on its own, democracy will not secure our place in tomorrow’s world.

    ECONOMY

    The financial crisis has highlighted a reality the West can no longer ignore: our days of easy economic supremacy are over.

    The drift is undeniable. The West has lost its competitive edge against China, India, Indonesia and Brazil as well as many smaller countries, notably in Asia and Latin America. Financial firepower is moving from West to East. Thirty five years ago, the fifteen core countries of the EU accounted for broadly 36% of global GDP, and Asia only 16%. Projections suggest that, in twenty years’ time, that will almost precisely have reversed. As we stutter, the rest of the world grows.

    America has, largely, held decline at bay: but, even so, her share of global GDP has fallen from 26% to 23%. Economically, in one lifetime, the world will have turned on its head.

    It’s easy to see why. Where ambition confronts complacency, ambition wins. In countries that are one generation away from poverty I see a passion and drive for success that sweeps away barriers. Even if we are aware of the tidal wave of competition that is coming, we have not prepared for it. We are falling behind and at risk of falling further.

    We shouldn’t deceive ourselves this is simply the fall-out from the financial crisis. It is a long-term trend.

    Some see no danger. They argue that the West can be sanguine about Eastern competitiveness because our quality of life is so far ahead.

    Such people should get out more. Let me cast an unforgiving eye on that complacency: the UK first.

    In terms of GDP, the UK is the sixth most wealthy country in the world. But our national Balance Sheet carries many liabilities. Our physical infrastructure is old. Our health service is creaking. Whilst the best of our education – especially higher education – is world-class, some of it is unforgivably awful.

    We are up to our ears in debt. The Exchequer is empty. The Gold is gone. The post-dated cheques are accumulating interest. We are over-taxed. We have an under-class: poorly educated, poorly housed and unmotivated.

    We are no longer an Empire, nor will be ever again. Today, we are a shrinking military power. By choice, and with majority public approval, we are semi-detached members of the EU. And even America – for so long our closest ally who generally sees the world as we do – is turning her face to the East, as self-interest determines she must.

    There is absolutely nothing here to be complacent about.

    America faces many similar problems – most obviously debt, which was 40% of GDP in 2008, 69% in 2011, and is projected to be 85% by the end of the decade – and rising. Yet only about one-half of the population pays federal income taxes.

    The risk remains of the US Treasury defaulting on its debt as it runs up against the legal limit it can borrow. I daresay a compromise will be reached, but this flirting with brinkmanship is dangerous. The collapse of Lehman Brothers was catastrophic. A Treasury default could be as bad. I hope those playing political games realise that the effect of their actions could spread far beyond America.

    In the foremost free market economy in the world, average household debt comfortably exceeds average annual income. And a rising proportion of that income now comes from the State.

    About 45 million Americans now receive food stamps: the modern equivalent of bread lines. Medical costs threaten to spiral out of control.

    Huge housing debts held by Banks are not written off: if they were, there would be lower profits, and lower bonuses. Total mortgage debt has quadrupled in 20 years. Today, there are two million mortgages not being paid.

    And so the merry-go-round continues: Banks are still lending 95% mortgages on a falling market at a multiple of income: admittedly now – they say – only to more credit worthy customers. No one should assume the financial crisis cannot be repeated: it certainly can. But, if it is, it will be unforgiveable.

    EUROPE

    As for Europe – the word is engraved on my heart. Northern Europe is healthy but Southern Europe is sunk in debt and uncompetitive. The EU as a whole is divided on how to handle budget deficits, the crisis in the Eurozone, control of the Central Bank, nuclear policy, as well as how to react to Libya, Afghanistan and the Arab/Israeli conflict.

    Twenty years ago, led by France and Germany, a confident EU was paving the way for the Euro. The assumption in the European Council was that, before the Euro could be launched, the economies of nations wishing to be part of it would converge: by that piece of jargon, we meant operate at broadly the same level of efficiency.

    But that didn’t happen. It was politics – not economics – that launched the Euro in the late 1990s. Sterling did not join because, in 1992, I had opted out of the Euro at Maastricht. I didn’t do that out of sentimentality for the Pound – nor to placate sceptic opinion. If I’d wished to do that – with my Party or the Press – my life would have been much more comfortable. I didn’t. It wasn’t – because I thought then, and argued then, that the concept had flaws.

    Today, Germany – with its powerhouse economy – is locked within the same currency, at the same exchange rate, as the weaker economies of the Southern European States.

    In a sensible world, the Southern States would devalue but – of course – they can’t and so, to become competitive and stay in the Eurozone, they must devalue internally. Unemployment will rise, wages must fall, and so must living standards.

    This threatens Greece, Portugal, and – possibly Spain and Ireland – with many years of austerity. As we see in Greece, the scale of that austerity may not be acceptable in a liberal democracy. Meanwhile, others power ahead.

    It is not immediately clear how Europe will resolve this dilemma. But the present position is unsustainable. Either the EU becomes effectively a Union of transfer payments to offset regional disparities (as happens in Canada), or it creates a mechanism to shrink the Eurozone. Nothing else makes long-term sense.

    Germany and France will not permit – cannot afford to permit – a reprise of the present crisis. In Germany, in particular, it is causing immense political agony. When the President of the ECB proposed a European Ministry of Finance with power to intervene in national economic policies, he caused commotion. But something will have to be done. Somehow, binding rules will be imposed on debtors.

    Despite Eurozone members insisting they will not surrender fiscal sovereignty, it is not hard to look ahead and imagine a Eurozone with fiscal – as well as economic – union, in practice if not in name. I don’t like this – it was a prime reason for not joining the Euro – but, if it happens, it may have the effect of pushing the UK further away from the mainstream of the EU.

    The UK is often accused of being half-hearted over its commitment to Europe. Continental politicians bemoan our caution. “If only the UK took up its responsibilities” … it is a familiar theme, and we will hear more of it.

    Let me respond. I am not anti-European. I am not a sceptic in the accepted sense. I never have been. I see the nobility of intent in binding together nations that fought one another over many centuries.

    I see the economic advantages of the single market, and the political advantages of extending democracy to nations that were locked in the Soviet embrace. But I am wary of many European policies. If they are flawed, or unworkable, or alien to our instincts, our Government has a duty to question them.

    Where we can work together, let us do so. That is sensible. But the Union cannot succeed if nations are – sullenly and resentfully – bound into policies they believe are damaging to their national interest. Far better to plan for a multi-speed Union, with nations opting-in to policy rather than opting-out. In a 27 Nation Union, I believe we will come to that, although it is far from the ambitions of some of our partners.

    If the UK is semi-detached, that is only, in part, because of British scepticism: it is also because the EU has chosen, time and again, to go in a direction they know Britain cannot follow. Every recent Prime Minister has ended up less European than he – or she – began.

    As to the future – it is difficult to see where Europe is going. Some would like to break away entirely from the EU. In a world in which many policies need collective action, that would be folly. If we are drifting apart, there is cause to beware: it is time to take stock.

    GOVERNMENT/POLITICAL SYSTEM

    In the search for future well-being that is true of our political system as well. At the moment, neither American nor British politics is in a state of grace. It has become too inward-looking. Too short-term. Our systems embrace politicians, and carry them off to a world the rest of us don’t inhabit. It’s time to bring them back. And focus them on the far distance as well as tomorrow.

    There is a fault line in our national policy-making processes:

    When do politicians have time to think?

    There is time to do, based on advice.

    There are policies to advocate, based on conviction.

    There are people to placate, based on necessity.

    But, in Government, too often, senior politicians are fire-fighting yesterday’s problems instead of thinking how to fore-stall tomorrow’s.

    Would it not be better to carve out sufficient time so that – routinely – they can frame policies to safeguard our future in 20/50 years from now?

    And – if they did think and plan far ahead – it would give them time to explain, to cajole and to carry electorates with them in controversial policy. That’s never easy – as we see today.

    To help bring this about, we should encourage governments to devolve more and do less: in some areas, we are ludicrously over-governed. The nanny state may be well-meaning, but it is also stifling.

    I am one-quarter American, so I hope I might be forgiven for speaking bluntly. At the moment, the American political system is dysfunctional.

    It is easier to stop good policy than to pass it. Bi-partisan co-operation is grudging and limited. Moreover, it is getting worse as re-warding of congress and district boundaries makes seats safer for Republicans or Democrats: the inevitable effect is fewer “middle of the road” candidates being elected. The first loser is compromise. The ultimate loser is sensible, non-ideological policy.

    The power of special interest lobbies is excessive. There have been 27 Bills affecting Energy over recent years where the representatives of six States, irrespective of Party affiliation, have voted for the Coal lobby position on over 80% of votes. In the Senate, this has been sufficient to block anything the industry does not favour. This is not in the national interest. It is naked self-interest. Sadly, it is not the only example (in domestic or foreign policy).

    I remember former Presidents bemoaning the introspection of Congress – my expression, not theirs – and their concern that only a minority of its Members travelled overseas to see the world for themselves. Since American foreign policy affects us all, this is lamentable.

    But it’s easy to see why. A competitive election contest in New York, or New Jersey, home to the most expensive media markets, could cost a candidate $10 million. On average, candidates must raise over $1.3 million to fight each campaign. And campaigns come every other year.
    To fight these elections, the average candidate must raise over $50,000 each and every month. No wonder they don’t travel. Such frequent elections also create obligations to donors – and lobbies. They put a premium on short-term populist policies.

    It would make for far better decision-making if elections were less frequent and there were limits on spending. This might also cut down on negative campaign advertisements, the net effect of which is simply to damage the reputation of politics.

    I claim no superiority for the British system.

    For generations, Britain has basked in the glory of our Parliamentary system. Much of the world flatters it as an example of a mature democracy, a supreme Parliament, an independent Judiciary and an impartial civil service.

    I cherish the traditions that add majesty to Parliament. Yet even I, who look at Parliament with affection, can see it must be made more efficient.

    We could begin by widening the pool of talent prepared to enter politics, by removing some of the disincentives to do so.
    I would pay MPs a fixed and generous salary, and cut out all living allowances. This is not entirely fair to Members with remote constituencies, but life is not fair – and such a system would avoid the recent scandals that have done so much harm to Parliament.

    We need, also, to attract to the Commons men and women at the top of their profession. It is one of the oddities of democracy that fundamental policy choices are made by men and women who, apart from the legitimacy of election and a native intellect, have no qualifications to make them.

    How many MPs can bring direct knowledge to how banks should be regulated? Or how hedge funds work? Or are familiar with e-money? Or nuclear energy? Or the social and medical implications of embryology?

    We would benefit from our legislators having more practical knowledge.

    Of course we can hire specialist advisers, but that can never be as effective as influential, knowledgeable voices speaking with expertise in the Chamber, in the Committees, in the tea rooms, in Party meetings.

    There is no solution to this dilemma that doesn’t cut across our traditions, and so I would do just that. Why not elect fewer Members of Parliament and appoint, on a basis pro rata to votes cast in the General Election, a similar number of Members without constituencies?

    I know the familiar arguments against this – a few years ago I would have used them myself forcibly – but, on reflection, I now believe enhancement of the talent pool is so vital it justifies the changes.

    If the Commons baulks at a further reduction in its Members then, as Douglas Hurd and I have argued before, let us appoint unelected Ministers, answerable to Parliament, but without being Members of it. Or, of course, let us do both. Douglas and I have argued also for fewer Ministers and fewer PPSs: we have far too many of each: they could be severely cut back.

    At the moment, all three major Parties are committed to an – at least partly – elected House of Lords. The Lords does need reform. It has too many inactive Members. It is too big and unwieldy. But election is the wrong reform.

    The case for election is democratic legitimacy. However, if we want an efficient legislature, the case against is far more compelling.

    An elected Upper House would cease to be a revising Chamber and would demand more powers that could only come from the Commons.

    There would be confusion and conflict. We should be reducing the number of politicians and adding to their quality. An elected Lords would add more politicians and reduce their quality. That is a bad bargain.

    Does anyone imagine that Chiefs of the General Staff, Cabinet or Permanent Secretaries, Captains of Industry, Chancellors of Universities, Professors of Medicine would stand for election?

    Of course they wouldn’t, and elected replacements could never bring such a depth of knowledge to the scrutiny of legislation. If the answer is more elected politicians, we are asking the wrong question.

    A better reform would be to improve Parliamentary procedures. Cut the number of whipped votes. And reform PMQs to discourage its vaudeville element.

    I offer only one further of many options. Parliament’s workload leads to legislation being poorly scrutinised, and often shown to be defective. In Criminal Justice alone, 68 sections and 25 schedules of 19 Acts remain unimplemented: many because they are unworkable.

    Why not subject all mainstream Bills to Select Committee scrutiny and public evidence before final drafting? If we did so, we would get better, more relevant, and more coherent, new laws.

    And must the Westminster Parliament oversee so much? I think not. It would be more efficient if it were less over-burdened.

    DEVOLUTION OF POWER

    There are options:

    Pass fewer laws – which is attractive, and to be hoped for: though I’m not holding my breath.

    But we could contract more to local government and devolve more to the Scottish, Welsh and Northern Ireland Assemblies. In a cautious and incremental way, the Coalition is taking action to do this. I welcome that and encourage them to go further.

    Some years ago, I opposed the creation of local Mayors. I was wrong. Mayors do put in place a dynamic and – as successive Mayors of London have shown – they can be effective megaphones for our big cities. But under present plans, Mayors will only inherit the existing powers of Council leaders: in future, I hope their remit can be widened.

    There is one caveat: their power of decision should be real, not illusory, and this implies a funding responsibility to pay for – at least the majority of – their policies. When next we look at local authority finance that should be the objective.

    Devolution can also reduce the Westminster workload. But there is some groundwork to be cleared first. The present quasi-federalist settlement with Scotland is unsustainable. Each year of devolution has moved Scotland further from England. Scottish ambition is fraying English tolerance. This is a tie that will snap – unless the issue is resolved.

    The Union between England and Scotland cannot be maintained by constant aggravation in Scotland and appeasement in London. I believe it is time to confront the argument head on.

    I opposed Devolution because I am a Unionist. I believed it would be a stepping stone to Separation.

    That danger still exists. Separatists are proud Scots who believe Scotland can govern itself: in this, they are surely right. So they point up grievances because their case thrives on discontent with the status quo. But even master magicians need props for their illusions: remove the props, and the illusion vanishes.

    The props are grievances about power retained at Westminster. The present Scotland Bill does offer more power to the Scottish Parliament.

    But why not go further? Why not devolve all responsibilities except foreign policy, defence and management of the economy?

    Why not let Scotland have wider tax-raising powers to pay for their policies and, in return, abolish the present block grant settlement, reduce Scottish representation in the Commons, and cut the legislative burden at Westminster?

    My own view on Scottish independence is very straightforward: it would be folly – bad for Scotland and bad for England – but, if Scots insist on it, England cannot – and should not – deny them.

    England is their partner in the Union, not their overlord. But Unionists have a responsibility to tell Scotland what independence entails.

    A referendum in favour of separation is only the beginning. The terms must then be negotiated and a further referendum held.

    These terms might deter many Scots. No Barnett Formula. No Block Grant. No more representation at Westminster. No automatic help with crises such as Royal Bank of Scotland. I daresay free prescriptions would end and tuition fees begin.

    And there is no certainty of membership of the EU. Scotland would have to apply, meet tough criteria, await lengthy negotiations and would find countries like Spain – concerned at losing Catalonia – might not hold out a welcome for Separatists. And, even if Scotland were admitted, they would find their voice of 5 million is lost and powerless in a Union of 500 million.

    But it must, ultimately, be their choice.

    SOCIETY

    Reforms within politics can – I believe would – improve policy-making, but it is the guts of policy that really matters. I simply observe that in considering future policy every Minister should ask one question: does this improve our long-term ability to compete and grow? If it does – good; if it doesn’t – think again.

    Growth is not just a matter of economic policy. Social policy is a part of the competitive structure – not apart from it. To grow, we need to improve our human infrastructure.

    EDUCATION

    Education and skill attainment are as crucial to economic success as cash investment. In the ancient world, Plato taught Socrates who taught Alexander.

    Rather more recently, Tony Blair famously declaimed “Education, Education, Education”. I had the same priorities but in a different order.

    Neither of us was original. Lenin first said it in 1917.

    And we were all right – except that we failed. And among the alienated and the under-educated, how much talent is lost? How many lives are wasted and unfulfilled? How high is the social and economic loss? Money has been put into education but the return on investment has been disappointing.

    It is a reproach to every Government over the last 40 years that employers routinely bemoan the numeracy and literacy of far too many school-leavers. As a Nation, we can’t afford that.

    A recent OECD survey, based on science, maths and literacy, put America – once top – at 26th, and the UK even lower: eight of the top ten performers were emerging Asian States. This isn’t some remote trend we can ignore: our children and grandchildren will be in direct competition with these young Asians.

    One reason for Asian success seems to be that they have invested heavily in teachers. Paid them well. Trained them well. And built up their prestige and social standing. As a result, they have attracted their brightest and best into the profession.

    Parents, too, have a responsibility for their child’s education. Too many opt out – none should.

    Events in California, in 1996, are suggestive. After positive discrimination had resulted in low graduation results and high drop-out rates, “Proposition 209” banned any reference to race, sex or ethnicity in University admissions.

    Students were selected purely on their Grades. Admissions from Asian Americans soared. The only explanation for this was parental influence. There is a lesson here. However good teachers may be, the role of parents remains the single most important input into any child’s life opportunity.

    If, as most of us accept, the economic future of the West lies, in part, with maintaining a technological advantage, we must produce the relevant skills. But we are just not doing so. China is producing over three times as many engineering, science and IT graduates as the United States. And over three times as many Chinese graduates at the top-most level with PhDs.

    In the UK, in the decade to 2007, there was a fall of nearly one-third in single honours chemistry courses, and 14% in physics. The West had better focus on the fact that Asian manufacture is already moving up the value chain.

    No Government is always right. Or wrong. In the UK, I applaud warmly the high ambition of Ministers in the previous Government who argued for long-term social reform. My only regret is that others, more senior and less far-sighted, sometimes over-ruled their efforts.

    “Thinking the unthinkable” was ditched. That was a pity.

    I welcomed their early ideas – as indeed I should: many of them were my ideas long before they were theirs, and – in some cases – Margaret’s before they were mine.

    That doesn’t matter. In a good cause, I welcome policy kleptomania. As someone who was opening Academy Schools 20 years ago, I was genuinely delighted when Andrew Adonis developed the policy and successfully carried it forward.

    Education is not our only social policy failure over decades. In our broadly prosperous country, there are still far too many graffiti-ridden slums, on soul-less Estates, in run-down areas, that dis-incentivise those who live there.

    There are too many neighbourhoods where unemployment has become a way of life; where an existence on social benefits seems normal.

    For too many people, self-determination has morphed into a belief in self-entitlement, where no-one is responsible for anything, and welfare is a legitimate career choice. America has problems that are similar in character.

    The Coalition is now embarked on reforms to health, education and social security that are long overdue, controversial and necessary. As Labour built on Conservative policy, now Conservatives will build on Labour’s.

    I hope everyone, irrespective of Party, who agrees with these reforms will support them publicly when Ministers face the inevitable protests that are to come. It will be a lost opportunity if they are sacrificed to our adversarial political system.

    Within the compass of my direct experience, I have tried to look forward. I have focused on what is not working well. But I am optimistic.

    The Western democracies always over-estimate what they can do in the short-term and under-estimate what they can achieve in the long-term. If we accept what needs to be done – we can do it. But – as Goethe noted – “until one is committed, there is hesitancy”. We must be committed.

    I would like to see a senior Minister, of Cabinet rank, given responsibility for “The Future”. His or her role would be to cast an independent eye on what needs to be done that is not being done; and what is being done that could be harmful in the future.

    Such a Minister would be the voice of the next generation. The conscience of the Government. The guarantor of the legacy. To do the job well, he or she should be an enormous irritant to Departmental Ministers and the Treasury but, with the backing of a committed Prime Minister, would ensure the interests of the next generation are not sacrificed on the altar of immediate consumption.

    Mr. Chairman, time is a tyrant and I have only skimmed the surface of policy for tomorrow.

    I have not touched on traditional foreign policy issues – much as I wished to: that must await another occasion. On that, and on so much else, there is a great deal to be said and – as my Grace Note – let me observe that those of us gathered here are well-placed to say it.

    CONCLUSION

    We are, or were, the Establishment – or part of it. Some still are. We are winners in the Ovarian lottery. Gathered here are intelligent, civilised men and women, skilled at diplomacy and dispassionate judgement. If the late John Osborne were to categorise us, it would not be as “Angry Young Men or Women”, but as “Mellow Old Achievers”.

    We are, many would say, the past: Neanderthals from the pre-internet age. But we have one huge advantage: we have seen the world as few others have seen it. So I want to end with a plea. It is that – in an age that glorifies youth – we should use our collective experience to help signpost a path for the future.

    We may have a shorter lease on that future than the young, but they are our young, and we have an obligation to care about their future.

    Whether British, or American, or Continental European, the task facing our respective Governments is herculean. We can stand aside, shrug our shoulders and smile benignly on their efforts, our own work done. Or we can pitch in and help them.

    That, surely, is the right thing to do.

  • Mr Major’s Article on Europe – 20 October 2004

    The text of Mr Major’s article in the Conference Magazine – Conservative Group for Europe, published in October 2004.

    JOHN MAJOR:

    The Prime Minister and the Chancellor are at odds over Europe. There are Cabinet splits about the offer of a referendum. Dissent lurks on the backbenches. An anti-European fringe party threatens to elevate European policy into Party warfare while a largely hostile-to-Europe Press licks its lips, hungry to magnify the fall-out. This is European policy under a Labour Government in 2004. How hauntingly familiar.

    There are essentially three contrasting points of view upon Europe:

    (i) It can do no right – which is the view of extreme sceptics such as UKIP and the former Referendum Party – whom we might call the Ultras to distinguish them from those of more moderate scepticism;
    (ii) It can do no wrong – Federalists, extreme euro-philiacs; or
    (iii) That it is, on balance, favourable to the UK but that elements of policy frustrate and irritate. Like most of the British nation, I belong to the third – and majority – school of thought. I for one would like to make the EU more popular: but can it be done?

    Nothing, I suspect, will change the views of the Ultras – who are beyond arguing with over Europe: the worry is that they have begun to shift the centre of gravity towards arch-scepticism. This has the potential both to divorce the UK from Europe – which, for the Ultras, is the ultimate goal of their scepticism – and wreak havoc upon the British political system (especially the Conservative Party). Much the Ultras care: even those who call themselves Conservatives subordinate the Conservative Party’s interests to those of their anti-European cause.

    Indeed, some of the most prominent UKIP Members are former Conservative MPs who helped ferment the rebellions that crippled the last Conservative Government. No Conservative should expect help from them – and no Conservative should do any deals with them. Since nothing can be done with this group it is necessary to ignore their shrill message and direct policy to reassure the bulk of the electorate.

    What can be done to achieve this? It would be beneficial to have an honest debate among adversaries, but that is unlikely.

    It would be desirable to have a fair and balanced media, but that is unobtainable. The written Press especially, is as deeply entrenched in the dispute as the political adversaries. The pro-EU Press has an air of sanctimony in which all dissenters – and their arguments, even when valid – are grandly dismissed. And the anti-EU Press is relentless in its campaign and careless of the implications of it.

    If reason and commonsense could heal the rifts over Europe they would have been mended long ago. But words alone cannot do it; suspicion and unease have grown continually since the Single European Act in 1986 and nothing has assuaged it. Indeed, it has worsened since most European Treaties are the natural father of the successor Treaty.

    I recall that, throughout the negotiations on the Maastricht Treaty, I was constantly reminded that Margaret Thatcher had signed up to “ever closer Union” and a large extension of qualified majority voting (thus reducing the British veto). So why, I was asked, was I so obstinate over the Euro, the Social Chapter and a further extension of QMV?

    As a result of the growing collective influence of successive Treaties, the public tend to see European policy as a juggernaut that cannot be stopped and which tramples over every sensitivity. This is the most damaging perception of all and the root of much suspicion over Europe.

    Europe has now enlarged its membership to 25 Nation States, and when Giscard D’Estaing’s Committee was established to make recommendations that would update the practices and administration of the EU, I welcomed it. Europe needed reform to accommodate enlargement and many prizes loomed: consolidation of existing complex treaties; a more effective form of European administration and – above all – whispers that the recommendations would finally set out in Treaty form the limits of European imposition upon the authority of National Government. Against this yardstick, the European Constitution makes some helpful moves, but overall it is a lost opportunity for those of us who wished to minimise the existing suspicions about the direction of policy.

    Pro-Europeans should not fool themselves. It will not be easy to turn around the present hostility to the EU. For too long foolish myths have been, if not unchallenged, at least undestroyed. The reality is our European Partners are not concerned with “doing Britain down”; they do not all have a federalist agenda; they are less and less in the Franco-German camp. All this is true, but it’s hard to persuade a majority to agree. Indeed, among Member States, the Anglo-Saxon view of the EU has more supporters now than ever before, Margaret Thatcher and I would have warmly welcomed such reinforcements in earlier disputes. Europe can be made more acceptable to the British view, but only if the Ultras are put to flight. Since their myths are often the stuff of tabloid fancy, this will be hard pounding. Nor is it made easier by those criticisms of the EU that are well justified.

    What is the case for Europe for those prepared to be persuaded? It remains powerful. The EU is the largest, richest free trade area in history and spreads from Ireland in the West to the very borders of Russia in the East. In years to come, one can see those borders increasing ever further – to take in Turkey and, perhaps, other nearby States, and possibly even to reach an accommodation with Russia herself.

    But it is not just valuable for free trade. It has made a major European war inconceivable as the entangling of trade and investment build up common interests. It can provide an economic counter-weight to the power of the United States and the potential power of China. It offers opportunities to the rising generations that their forbears never enjoyed. These may be grand themes but they are indispensable to the well-being of individual Europeans.

    The fundamental problem, it seems to me – as a wellwisher who believes there is a limit to integration and that we are close to it – is that Europe’s true failings and its over ambitious agenda encourage any myth about it to gain currency.

    The wise European would be cautious about entering the Euro zone (which is plainly not in our short-term interest); very sniffy about parts of the new “Constitution” (which is a step too far in its present form – although it does have some good aspects); and would be determined to make an onslaught on fraud and mismanagement.

    Much is going our way in Europe and we need to rebuild domestic confidence in our membership of the European Union. To do so, we must neither fear to build upon developments in tune with our British instincts nor to resist those that go too far.

  • Mr Major’s Letter to the Daily Telegraph – 15 September 2003

    The text of Mr Major’s letter to the Daily Telegraph on the subject of the Single Currency, published in September 2003.

    JOHN MAJOR:

    Sir,

    The Swedish rejection of the Euro re-emphasises the unlikelihood of our Government holding an early Referendum on the same subject. They will not do so for they know they will lose.

    In 1991, at Maastricht, I obtained an opt-out from the Euro. Later, I persuaded Cabinet to offer a Referendum prior to membership – a commitment the Blair Government had no choice but to inherit. I am therefore – at least in part – responsible for Sterling not yet having been abolished and the Euro adopted. It has always been my view that circumstances might arise in which it would be in our interests to join, but I have yet to see any that are imminent.

    The belief of the euro-sceptics that I offered a Referendum to appease them is both fatuous and wrong (as official documents will reveal in time). I did so because entry to the Euro would have a personal impact on every citizen and was therefore an issue upon which I felt they should have the opportunity to express an opinion.

    The same principle applies to the proposed European Constitution. The Government are resisting a Referendum on the specious grounds that Margaret Thatcher did not have one on the Single European Act and nor did I on the Maastricht Treaty. This line of defence does not stand up to examination.

    In neither instance was such a clear and fundamental point at issue. Moreover, at Maastricht, I opted out of the two greatest concerns – the single currency and the Social Chapter. I also agreed a negotiating position with Parliament and held to it in every particular. The present Government are not in this position with the proposed European Constitution.

    Another difference is relevant too: in the 1980s and 1990s, referenda were not commonplace, hence my difficulty in getting Cabinet to agree to one since many colleagues did not like the wider constitutional implications. Labour, however, have used referenda frequently.

    The Government should stop hiding behind a half-truth and offer a public poll on the European Constitution without further delay.

    Yours faithfully,
    JOHN MAJOR.

  • Mr Major’s Press Conference in Dublin – 14 December 1996

    Below is the text of Mr Major’s press conference held in Dublin on Saturday 14th December 1996.

    PRIME MINISTER:

    Let me just say a few words at the outset. The Chancellor and I had a press conference yesterday so I won’t traipse over the ground we covered then, though you may wish to raise some of those matters in questions later.

    I am not sure whether you have yet got the conclusions of the Council, but when you do have them you will see that they are shorter than usual. I think that is thoroughly welcome, we have been seeking that for some time, and I think it also reflects the professionalism of the Irish Presidency. I think it has been a very good Presidency, I don’t say that just for the sake of form, it has been an extremely good Presidency and if I may say so, John Bruton has chaired the last couple of days with great skill.

    When you get the conclusions you will find attached to them are also the conclusions of the ECOFIN report on Economic and Monetary Union, including the stability pact. And the conclusions refer to the requirement for sustainable and durable convergence, and self-evidently that is necessary.

    If EMU goes ahead, it will be in our interest – in or out – that it is based on sound finances and that the Euro money is stable. The stability pact is not a substitute for the right economic conditions, but it is a way of ensuring that once the right economic conditions are obtained, that they are sustained for the future.

    As far as the economic conditions are concerned, self-evidently they are essential for a successful Economic and Monetary Union. And equally importantly, only those member states which genuinely have the right economic conditions, and genuinely can sustain the right economic conditions, should safely join the Euro system.

    Our own position of course is fully covered by the provisions of the Maastricht Treaty. And the ECOFIN report and the regulations to which they refer involve no new policy obligations on the United Kingdom.

    The conclusions of the last couple of days reaffirm the intentions to take decisions on the Intergovernmental Conference by next June. They do that, but they do not pre-empt what any of those conclusions might be. We have long argued that the best way to make the European union flourish is not to keep pulling it up by its roots to see if it should be re-planted, but to build on what already exists, and we think the scope for action is already there and that is self-evident from the discussions in the last day or so.

    One area I think where that is particularly true is in the fight against terrorism and crime, and the ideas we have put forward are contained in the conclusions. We are keen to develop the role of Europol, working side by side with the national responsibilities which of course have primary responsibility. That of course can only truly happen when all the Member States have ratified the Europol Convention. We have done so, we were the first to do so, and the conclusions invite other members to follow suit as soon as possible.

    One other point I think worth mentioning. The programme which we initiated some time ago of less legislation, but better legislation, is also taken a stage further in the conclusions. This year there will have been only a dozen legislative proposals from the Commission. They have also withdrawn a further 50 proposals which have now become obsolete for one reason or another, and they have extended the process of consultation with 8 Green Papers so far this year. That I think is a welcome development in the way the legislation is produced.

    In the discussion on employment, I circulated a paper on the British employment experience and many of you may have spotted a speech by M Juppe recently in which he acknowledged the success in the United Kingdom in generating jobs and growth, and that approach is reflected in the declaration that you will see on employment.

    Finally, I would just like to draw your attention to the conclusions on Hong Kong which the Foreign Secretary discussed at dinner with his colleagues last evening, and I discussed over a separate dinner as well. There was very strong support from our partners for a peaceful transition and the continuation of Hong Kong’s prosperity and democratic traditions. And the Commission will now be preparing an initiative to intensify the links that the European union has with Hong Kong.

    So I think that covers the points that I didn’t cover yesterday, though I am perfectly content for you to return to those matters if you wish to ask any questions on them.

     

    QUESTIONS AND ANSWERS

    QUESTION:

    You set out before this conference to defend the British veto. If you look at the conclusions, can you point to anything in that and say yes, I have held back [indistinct] Community in view of the passage that seems to think that there will have to be a strict capacity for action in relation to visas, asylum and immigration?

    PRIME MINISTER:

    Yes, I think we are talking about inter-governmentally there, not taking any centralised support. There has been no suggestion that the veto would be changed, it has not been a subject for discussion. What we have had has been the basis of the debates that will take place in the next six months, and it may well be that case that in the next six months some countries will wish to move exclusively to qualified majority voting, and by definition remove the veto. I suspect that will be one of the matters that they will raise in negotiation in the months that lie ahead. But our position is very clear cut on that. We are not proposing to surrender the veto and the veto can only be surrendered if there is total agreement, unanimity, consensus upon actually doing so, and our partners know there will not be such a consensus.

    QUESTION:

    The Dutch Presidency has been talking, as the incoming Presidency, of its priorities for the negotiations. Foremost among them is their desire to see the communautairisation of the Schengen Agreement on border controls, something that the government has been opposed to. If the Dutch Presidency offer the United Kingdom an opt-out from the consequences of the communautairisation of the Schengen Agreement, would you reconsider your veto on that question?

    PRIME MINISTER:

    I will consider very carefully any proposal put to me during the Intergovernmental Conference, but I certainly don’t wish, with respect, to negotiate them here on this occasion. What is self-evident is that our border controls are not going to be changed, not just because we are being stubborn and difficult, but we have a wholly different tradition to most of our continental partners and different circumstances. We have a common land border with the Republic of Ireland, and that has existed a good deal longer than Schengen, and is at least as open, if not more open, than any of their borders. But the rest of our partners have a continuous land mass in Europe; we don’t, we are an island, we have different circumstances. They have a long tradition and acceptance of identity cards, of police papers being readily produced, that we don’t have in the United Kingdom. So our borders are of especial importance to us because they are our mechanism for protection against abuse of immigration and protection against crime. So that is not something we are likely to alter. If people are putting ideas to us about how they may proceed in certain circumstances, without involving the United Kingdom, then it would be very ungracious of me not to examine them. But I would like to see them and examine them very carefully before I reached a conclusion on them.

    QUESTION (Robin Oakley):

    If I could take you back to the section of the draft conclusion that Elinor was referring to, when it talks about strengthened capacity for action. “In relation to asylum, immigration, crossing external borders, drugs, crime, terrorism, the Union must be given the means to act effectively in these areas”. Given all that you have been saying, surely you object to that particular passage. Did you make any effort to get that struck out?

    PRIME MINISTER:

    No, no, we didn’t, because we didn’t need to. The circumstance in which that is being discussed is determining the intergovernmental nature of the work that will be done through Europol and other matters, and we are very keen to work with Europol. Working with Europol is not a problem. We have been one of the foremost advocates of doing so and for a very sound reason. Many of the problems of crime that afflict Northern Europe, including the United Kingdom, are international. The advantages of working together are clear. What is not proposed there is that there would be Union responsibility subordinating national responsibility. To read it that way is to misunderstand the context of the discussions and the purpose of the conclusions.

    QUESTION (Adam Boulton, SKY News):

    Yesterday, you were kind enough to give us your views on the chances of a single currency happening on time. The other delegations, as you know, have expressed different opinions about that. Can I now ask each one of you three what you think the chances of Britain being in that first wave are?

    PRIME MINISTER:

    Yes you can certainly ask. Next question.

    QUESTION (Paddy Smith, The Irish Times):

    Prime Minister, given your praise for the Irish presidency, can I take it then that you would support the proposition that small countries can handle the presidency and that the presidency system should remain?

    PRIME MINISTER:

    I think the Irish have handled the presidency excellently; the documentation they produced was of a very high order and the quality of chairmanship that John Bruton has shown – I haven’t attended the Foreign Affairs Council or the ECOFIN Council so my colleagues can speak for themselves – has been absolutely excellent. I have no complaints whatever about the Irish Presidency, I think it has done a first-class job. I don’t know whether Ken and Malcolm want to add anything to that.

    CHANCELLOR OF THE EXCHEQUER:

    It is no discourtesy to anybody else but my experience of the Irish presidency is that it has been as well-conducted as any presidency I can remember, it has been done very well indeed.

    FOREIGN SECRETARY:

    The question as to whether there should be some reform of the presidency doesn’t just arise from the small size of the some of the applicant countries, it also arises from the fact that there could be as many as 25 member states and whether it is wise to have a presidency for six months run by just one country.

    PRIME MINISTER:

    The other point that goes with that is whether there is some reform needed of the Troika and I think self-evidently there is going to be some reform of the Troika for reasons that scarcely need spelling out.

    QUESTION (The Economist):

    Prime Minister, under your Prime Ministership, when Britain was in the ERM the British budget swung from a surplus to a deficit that approached 7 per cent of GDP at its highest point. Since you support the stability pact, do you think that this sort of irresponsible behaviour should have been punished by a fine of around 3.5 billion pounds?

    PRIME MINISTER:

    No, nor would it have been because if you read the stability pact carefully you will see in areas of substantial recession – I think above 2 per cent, the Chancellor will confirm – those circumstances would not apply, neither are the fines now automatic, the German proposal for automaticity of fines did not receive the approval of colleagues and, as you know, it has been changed so we certainly would not have been subjected to that fine and if you look at what happened during that period, you would see that that applied to countries right across western Europe in perhaps the worst recession we have known, you will also have seen the improvement since in the United Kingdom economy.

    QUESTION:

    Prime Minister, now the stability pact has been agreed, the French and Germans are going to start talking more about who should enforce it and they are talking about setting up a form of economic government for Europe informally. How do you feel about Britain being excluded from that?

    CHANCELLOR OF THE EXCHEQUER:

    We are not! Firstly, the enforcement – as you put it – of the Stability Council will be enforcement by the ECOFIN Council at this stage and once you go into the single currency it will be the finance ministers of those countries which are in membership who will enforce discipline on each other and nobody has proposed any change to that.

    There have been in the past some people canvassing the idea of an informal council comprising the ministers of the members states meeting in some way, not using the institutions of the Community but informally between sessions, in order to have an overall oversight of how the single monetary union is going. That has not been mentioned once in Dublin, it hasn’t been raised and the last time it was raised it didn’t get a very forthcoming response from most people at ECOFIN so if you have met the odd Frenchmen or the odd German describing it in the terms that you have described, I think they are a million miles away from any discussion that has taken place at any meeting I have ever attended.

    QUESTION:

    Prime Minister, there would appear to be some significant differences between yourself and the Taoiseach on the time frame for the entry of Sinn Fein into the peace talks. Could you comment on that and what message would you have for Mr Adams and Sinn Fein/IRA from this Dublin summit?

    PRIME MINISTER:

    I don’t know that the message to them would especially be from the Dublin summit because this hasn’t been a matter for discussion at the Dublin summit, but I think my message to Mr Adams and Mr McGuinness is very clear-cut. Everybody wishes to see a ceasefire, they wish to see a genuine ceasefire, they wish to see a ceasefire that will last and if Sinn Fein will deliver a genuine ceasefire that will last and enable us and the other participants in the talks to be confident that it will last, then the door to Sinn Fein entering the constitutional talks is open. The only people closing the door in Sinn Fein’s face are Sinn Fein and the IRA themselves. I would welcome inclusive talks but there cannot be inclusive talks with semtex and a gun hidden under the table. Nobody is going to accept that. Once that fear is removed, the talks are open for them.

    QUESTION (Simon Walters, The Express):

    Prime Minister, why do you think there is so much more hostility towards the single currency in Britain than there seems to be in other European countries and could I ask you the question that you so uncharacteristically ducked a few minutes ago? What are our chances of being in the first wave?

    PRIME MINISTER:

    On the first point, I am not so sure – although the debate is fiercer in the United Kingdom – that public opinion is necessarily more hostile in the United Kingdom. I slightly argue against myself, I don’t very often agree very much with opinion polls, but insofar as you can draw anything from them, you will find in some other countries the disagreement with the concept of a single currency is stronger than it has been shown to be in the United Kingdom.

    That is not true, of course, about the severity of the debate about a single currency which has been much more severe in the United Kingdom and I think that probably springs from several reasons: we have a much more adversarial political tradition than most of our European partners and the debate on the details and the impact of a single currency has been established for much longer in the United Kingdom than in other countries. The matters that we were openly debating over the last three or four years as far as a single currency is concerned have only just begun to be debated in the same sort of fashion in the countries of many of our European partners. Perhaps another difference is that there tends, if I may put it this way, to be a political class in some of our European partners’ countries and the political class has a broadly collective view that so far as one can see is not necessarily shared by the electors that they represent. Those are the three or four principal reasons why it seems to be so different in the United Kingdom.

    As far as the other part of your question is concerned in which you say so kindly I uncharacteristically ducked, well far be it from me to disappoint you twice but I shall uncharacteristically duck it yet again for precisely the reason we have set out in the past – we will wait and see what the circumstances are. We have an option to join or an option not to join and will make our decision upon the facts of the matter when we see the circumstances.

    QUESTION:

    Prime Minister, you have been praising the Irish presidency but can I ask you a serious question? An Irish official last week, after the London summit – I am talking about Northern Ireland now – said that basically you weren’t engaged at that London summit and basically what they are saying in football parlance is that you really have your eye off the ball of Northern Ireland now because of your situation at Westminster and as I said, the quote was from the Irish official that you weren’t engaged in London.

    PRIME MINISTER:

    I find that extraordinary. I have been pretty intensively engaged in the Northern Ireland issue for the last five years and I am not going to become disattached from it. If I wasn’t engaged, we had two-and-a-half hours of pretty intensive discussion on the question of Northern Ireland and I have just indicated in the last few moments yet again exactly what the British Government’s position is. We could scarcely be more engaged and I don’t think any British Government has been as engaged and working as closely with the other constitutional parties and the Irish government as the British Government has in recent years and that remains the circumstance.

    I cannot imagine who could said what you have just reported but I will reflect upon it might have been! [Laughter].

    QUESTION (Elinor Goodman, Channel 4):

    Could I just ask you to sum up what you think you have achieved at this summit?

    PRIME MINISTER:

    The question of the summit was to determine effectively the ground rules for the negotiations over the next six months. What I wanted was the Irish text unaltered so that none of the decisions that lie ahead were prejudiced by decisions by the heads of government reached upon a brief conversation rather than detailed negotiation and that is what we have achieved.

    The Irish text, which sets out everybody’s options, remains the basis for negotiation. The debate and discussion over the past two days have not closed down any of the options and it has left open for proper debate and discussion all the issues that we wish to bring forward at the intergovernmental conference and has not foreclosed favourably on any of the issues to which we are antagonistic so we have set the ground rules for the debate over the next six months on the outcome of the intergovernmental conference and that is what we sought to do.

    QUESTION:

    Those could be your last words at a summit, Prime Minister.

    PRIME MINISTER:

    I very much doubt it and I will look forward to welcoming you, if you are still in the job, in June!

  • Government Statement of European Court of Justice Ruling – 12 November 1996

    Below is the text of the statement issued by 10 Downing Street on 12th November 1996 on the ruling by the European Court of Justice.

    STATEMENT ON ARTICLE 118A OF THE TREATY ESTABLISHING THE EUROPEAN COMMUNITY:

    My intention in agreeing to the Protocol on Social Policy at Maastricht was to ensure that social legislation which placed unnecessary burdens on businesses and damaged competitiveness could not be imposed on the United Kingdom. The other Heads of State and Government also agreed that arrangement, without which there would have been no agreement at all at Maastricht.

    However, in its judgement today, the European Court of Justice has ruled that the scope of Article 118a is much broader than the United Kingdom envisaged when the article was originally agreed, as part of the Single European Act. This appears to mean that legislation which the United Kingdom had expected would be dealt with under the Protocol can in fact be adopted under Article 118a.

    That is contrary to the clear and express wishes of the United Kingdom Government, and goes directly counter to the spirit of what we agreed at Maastricht. It is unacceptable and must be remedied.

    The United Kingdom will therefore table amendments in the Intergovernmental Conference to restore the position to that which the United Kingdom Government intended following the Maastricht agreement. Those amendments will be aimed at both ensuring that Article 118a cannot in future be used in ways contrary to the United Kingdom’s expectation, and dealing with the specific problem of the Working Time Directive.

    I attach the utmost importance to these amendments and I shall insist that they form part of the outcome of the Intergovernmental Conference. I do not see how new agreements can be reached if earlier agreements are being undermined.

    Meanwhile, I urge the Commission to refrain from making proposals under Article 118a which properly belong under the other Member States’ Agreement on Social Policy.

    I am sending copies of this letter to Heads of State or Government of European Union Member States.

    To : His Excellency Monsieur Jacques Santer

  • John Major’s Commons Statement on the 1996 European Council in Florence – 24 June 1996

    Below is the text of Mr Major’s Commons Statement on the 1996 European Council held in Florence, made on 24th June 1996.

    PRIME MINISTER:

    The Prime Minister (Mr. John Major): With permission, Madam Speaker, I shall make a statement on the meeting of the European Council in Florence on 21 and 22 June, which I attended with my right hon. and learned Friends the Foreign Secretary and Chancellor of the Exchequer and the Minister of State, Foreign and Commonwealth Office, my hon. Friend the Member for Boothferry (Mr. Davis). I have placed the conclusions of the Council in the Library. I shall deal first with beef, then with the other issues discussed.

    In my statement on 21 May, I shared with the House the Government’s frustration that, two months after an unjustified ban on our beef exports had been imposed, some member states were still unwilling to address on a rational, scientific basis a clear path to lift the ban. I accordingly announced a policy of non-co-operation until two specific objectives had been achieved: the lifting of the ban on beef derivatives and agreement on a clear framework leading to lifting of the wider ban. In accordance with that policy, we subsequently blocked 74 decisions that required the unanimous approval of member states.

    The first objective was achieved on 10 June, when the ban on beef derivatives was lifted. That was followed on 19 June by unanimous approval of our bovine spongiform encephalopathy eradication plan by the Standing Veterinary Committee. In Florence on 21 June, the second objective was achieved when the European Council unanimously accepted the framework and procedures put forward by the Commission for lifting of the wider ban, which were based closely on our proposals. Both objectives were secured in precisely one month. I have no doubt that the policy that we reluctantly adopted was the decisive factor in ensuring that result in such a short space of time.

    The framework sets out steps for lifting the ban in stages. The Florence conclusions make it clear that decisions on each stage will be taken

    “only and exclusively on the basis of public health and objective scientific criteria and of the judgement of the Commission”.

    That is what we insisted upon above all. I was therefore able to lift our non-co-operation policy once the framework had been agreed. It is now up to us to meet the conditions for lifting the ban set out in the framework. There are five stages for that.

    We aim to be in a position to tell the Commission by October that we have met the necessary conditions for decisions to lift the ban on two of the five stages–that is, certified herds and animals born after a specified date and their meat. That is subject in particular to clearance of the backlog of animals awaiting slaughter in the 30-month-plus scheme, and a start to the accelerated slaughter of cattle particularly at risk of developing BSE.

    Removal of the ban in those two areas would reopen to our industry an export market worth initially about £100 million a year, increasing rapidly thereafter as the certified herds scheme gains momentum. Also by October, I expect a Commission proposal on a third stage–embryos–subject to the scientists giving them a clean bill of health. I believe that we should have met the conditions necessary for a decision to lift the ban on the fourth stage–meat from all animals under 30 months–by November.

    Securing agreement on those steps would restore the position on beef exports to what it was before 27 March, except in the areas where we have prohibited sale in the UK. In other words, we would be in a position of being able to sell for export to the EU young animals and all the beef that could then be sold in the UK. That would open the way for exports worth some £530 million per year. The only remaining category is meat from animals over 30 months except, of course–as I indicated to the House a moment ago–for that from certified herds, which should be lifted in October. Meat from animals over 30 months is still banned in the UK because of the greater incidence of BSE in older animals.

    The targets that we have set are ambitious. It is now up to us in this country–the farming and ancillary industries and the Government–to ensure that we meet them. The point is that this timetable is essentially in our hands. When we have met the conditions, the normal procedures for such decisions, involving the Standing Veterinary Committee in particular, will apply. But we have the firm commitment from all Heads of Government in Florence that those decisions will be taken only on the basis of scientific and objective criteria.

    One aspect not adequately covered in the Commission framework is the early export of British beef to third countries. That was complicated in the minds of our partners by their concerns about the possibility of re-export to the EU, and by the European Court of Justice case against the Commission. We believe that our case against the ban on exports to third countries is particularly strong, and our court application for interim relief should be decided in the next few days.

    We none the less secured a presidency statement–accepted, it has to be said, reluctantly by the other member states and the Commission–that the Commission will consider individual requests from third countries to buy British beef exclusively for their domestic markets. If such requests come forward soon, I hope that, either through Commission procedures or the European Court case, exports from Britain to third countries will begin to flow.

    We have a lot to do in a short time to meet the conditions necessary to enable the EU and world markets to be fully open again. But I believe that we have taken a great step forward in the past few days. We shall go on doing everything possible to protect public health, restore consumer confidence and secure the interests of the British beef industry. Our overriding aim remains, as it has been from the start, the eradication of BSE from Britain.

    Let me now refer briefly to the other main issues discussed in Florence–the intergovernmental conference, employment, economic and monetary union and the Europol convention.

    The European Council agreed that the intergovernmental conference should now turn from analysis to negotiation. We need to move from exchanging ideas to considering texts. I was therefore happy to lead the call for an outline treaty text to be prepared in time for the Dublin European Council in December. The Government’s position on the substance remains as set out in the White Paper, “A Partnership of Nations”. In Florence, I set out once again our policies in key areas such as qualified majority voting, and the need for flexibility as the EU further enlarges.

    We also discussed employment. At the Essen European Council in 1994, we agreed an approach that recognised the primacy of action by member states and recommended a number of lines of action reflecting this Government’s approach. In Florence, the European Council confirmed the priority attached to tackling unemployment and agreed to carry forward the Essen approach, taking account of the initiative taken by the President of the Commission on a confidence pact for employment. There are some good things in this document, but others that we cannot accept.

    Unemployment in this country is now the lowest of any major European competitor. We have created more jobs over the past three years than Germany, France, Italy and Spain–indeed, we have created more than Germany, France, Italy and Spain added together. That is because we have followed policies that help job creation. That is why we will not sign the Maastricht social chapter or accept European Union measures that would damage competitiveness or inhibit our ability to pursue our own successful policies.

    Florence was not a decisive stage in discussions on economic and monetary union. The European Council considered a report from Economic and Finance Ministers on work done since Madrid. That included the relationship between those inside and those outside any potential future single currency. It covered the proposal to create a new exchange rate mechanism. Most of our partners favour creating such arrangements. Let me assure the House that it has been confirmed that any new scheme of that sort will be voluntary, and I reaffirm that this country will not rejoin any new ERM.

    The European Council also reached agreement on the role of the European Court of Justice in the Europol convention. I said at the Cannes European Council that the ECJ would not be the arbiter in any case relating to Europol which involved the United Kingdom Government or arose in the courts of the UK. Other member states saw a need for a role for the ECJ on questions of interpretation of the convention arising in their national courts.

    The outcome allows other member states the option of providing such a role for the ECJ for themselves. The United Kingdom and our courts will not be bound by that in any way. That is a satisfactory outcome and a further example of the EU developing in flexible ways.

    Finally, the European Council confirmed that enlargement negotiations with central European countries should open at the same time as with Cyprus and Malta–that is, six months after the intergovernmental conference ends. It also agreed a number of statements on external issues, the most important of which were on the middle east and Russia.

    The Florence European Council marked a decisive turning point in our efforts to protect the interests of the hundreds of thousands of people working in the British beef industry. The issue will now be dealt with on a proper, rational basis, with the timetable for the lifting of the ban dependent on our own efforts. That has enabled the restoration of normal business in the European Union.

    This has been a difficult episode in this country’s relationship with Europe and not one that I was seeking. We were right to stand up for our interests, but I now look forward to working with our partners on our positive vision of Europe as a strong partnership of nations.

    Mr. Tony Blair (Sedgefield): I shall confine my remarks mainly to beef. First, on dates, the Prime Minister chose his words with elaborate care. Can we be clear as to what he is saying? Is he saying that he can give dates and that the ban will finally go in total in November?

    Some Conservative Members are now shaking their heads, but that was the clear impression–they are now all shaking their heads, but if one was listening to the Prime Minister, that was the impression–[Hon. Members: “The right hon. Gentleman was not listening.”] I was listening.

    If the Prime Minister is now saying that those are definite dates, why were they not in the European Union agreement? I suspect–perhaps he will confirm this–that all that he is really saying is that he will table proposals by October and November, but the decision will be taken through the process of the veterinary committee, inspection, verification and so on.

    So, can we return to the question that we have consistently asked the right hon. Gentleman? When will the ban finally be lifted, so that people in Europe can eat British beef under the same conditions as people in Britain?

    Secondly, will the Prime Minister confirm that–again, contrary to the impression that he sought to give–there is no automatic link under the agreement between the steps that Britain must take and steps towards lifting the ban? We are obliged to do certain things in Britain, but other member states are simply obliged to follow certain procedures. There is no binding agreement on them, merely an agreement to consider. As for stating that he has won an undertaking that they would refuse consent only on scientific grounds, is not the committee that we have to satisfy the very same veterinary committee with which we had the problems in the first place? It has always ostensibly said that it was acting on scientific grounds; it has never said that it was acting on political grounds. The Prime Minister is no further forward on that.

    If the basis is supposed now to be science, why have we agreed to a massive additional slaughter policy when we say that it is not scientifically justified? I suspect that the principal changes that the Prime Minister got were made once the British Government had submitted a programme for eradicating BSE and taken it round the European capitals–which, frankly, is something that they should have done a couple of months before.

    Thirdly, as for the much vaunted concession on the third country ban, I agree that the ban is completely unjustified, but will the Prime Minister confirm: that it is only an undertaking from the Italian presidency and not an undertaking from the European Union; that it has no legal force; and that within minutes of it being given, a Commission official said:

    “it didn’t commit the Commission to anything”?

    Foreign Ministers have said that the third country ban will remain. Is that right or not?

    Fourthly, will the Prime Minister confirm that the extra compensation at Florence was for all European Union farmers and that British farmers will see only a small part of it? Will he confirm also that this country’s bill, net of European Union payments, for the BSE crisis will be well in excess of £2 billion in the years to come? Is that not the price that the British people will pay for the utter incompetence with which the matter has been handled from the very beginning: the failure to intervene in the way necessary when BSE began; the failure to compensate and inform farmers when the crisis was under way; the failure to announce the link with Creutzfeldt-Jakob disease, with proper consultation; and now the failure to secure the lifting of the ban once one was imposed?

    The Whitehall farce even continued at Florence, where we had the spectacle of the Government trying to hang on to one Minister who was threatening to resign and hanging the poor Minister of Agriculture out to dry to try to get him to resign. [Hon. Members: “Where is he?”] There appears to be a notable absentee from our deliberations.

    This has been an object lesson in the Government’s capacity to turn any crisis into a catastrophe. The truth is that whatever fig leaf the Prime Minister has today, the damage will be with this country for many years to come.

    The Prime Minister: The right hon. Gentleman has just illustrated that he is not interested in what is right for this country. In this House, he claimed to support our policy of non-co-operation because he did not have the guts to criticise it. In Germany, he criticised British policy because he did not have the guts to defend it. He has spent half his time claiming that we have been too hard in our relations with Europe, and then jumped to the other side of the fence and claimed that we have been too soft. He has invented objectives that we did not set and then criticised us for not meeting them. It is my job to look after the interests of the British beef industry, and despite his obstruction and his determination to do anything or say anything, irrespective of the damage to the beef industry, in his own interests, that is precisely what I have done.

    Let me reiterate the points that were clearly made in my statement, which the right hon. Gentleman then asked about again, having failed to understand them. First, there is no massive additional slaughter policy, as I have explained to him repeatedly on many occasions. I hope that he now fully understands that. On the mechanism for the future, the great new European is effectively saying that he distrusts the word given to Britain by the European Heads of Government and by the European Commission. He distrusts it, despite all that he has said. Let us be clear about what he is about.

    Let me deal with some of the other points. As I explained repeatedly in my statement, we have set out what we sought at the outset: objective criteria that we can meet in order that the ban can be lifted. The dates for lifting therefore lie in the hands of the British agriculture industry and the British Government; I have set out the dates by which we think that they will be met on each and every part of the agreement over the past few minutes. It is a shame that the right hon. Member for Sedgefield (Mr. Blair) failed to understand that. [Interruption.] I invite hon. Members to read the statement when it is printed in Hansard tomorrow; if they did not understand it when I made it, perhaps they will understand it when they read it.

    We sought an agreement that that matter would be dealt with objectively, without politically blocking the correct scientific judgment. That is what has happened in the past; that is the political commitment that we have achieved; that is the commitment that we expect our partners to meet.

    Mr. Douglas Hurd (Witney): Given that the Government adopted a legitimate, even familiar, tactic for a specific and limited objective that they have now obtained, will my right hon. Friend the Prime Minister take no notice of the Leader of the Opposition’s confused mischief making? Does my right hon. Friend accept that the best service that the House, particularly we on the Conservative Benches, can do in the difficult times that lie ahead is to take what may be the last chance in this Parliament to give united and effective support for the policy which my right hon. Friend set out last week and which is also set out in the Foreign Secretary’s White Paper, published in the spring?

    The Prime Minister: I am grateful to my right hon. Friend, who is certainly right about the Leader of the Opposition’s capacity for mischief against the national interest. It is equally true that we have set out in our White Paper what we believe is the right way for future developments in the European Union in this country’s interests. We have set out a clearer definition of that than any other country that will be negotiating in the intergovernmental conference. It is precisely so that we can get down to the details that I invited the Irish presidency to introduce detailed texts, so that we can begin to look at the details of what people specifically expect to be agreed at the intergovernmental conference rather than deal with the generalities, which have been the subject of the debate so far.

    Mr. Paddy Ashdown (Yeovil): I am glad that the puerile policy of posturing masquerading as war on Europe is now over. When the Prime Minister announced it, I told him that it would achieve nothing that could not be achieved by other means. The damage that has been done to Britain’s influence and respect will be great. The Prime Minister tells us that he had to take the action as Europe had been obstructive for eight weeks; is not the truth that the Government did nothing for eight weeks, which is why nothing happened? The Prime Minister tells us that we have set hurdles that were not originally set. Does he remember the statement made by his Downing street spokesman on 22 May, the day after he announced the policy in the House of Commons? Presumably speaking on the Prime Minister’s behalf, the spokesman from No. 10 Downing Street said:

    “Nothing short of a full timetable for the phased lifting of the entire beef ban will be sufficient.”

    Is it not true that no such thing has been achieved?

    The Prime Minister said that he was looking for binding commitments from our partners in Europe. Is it not true that every one of the steps must be validated through the Commission, the Scientific Veterinary Committee, the Spongiform Encephalopathy Advisory Committee–“super-SEAC”–and the Standing Veterinary Committee–the very people who, the Prime Minister claims, obstructed the actions in the first place? Far from our achieving success in lifting the third country ban, is it not true that, within minutes of the Foreign Secretary announcing that success, a Commission spokesman,in whose hands the matter is supposed to be, said that any beef that we were not able to sell to Germany or France could not be sold to South Africa?

    We shall judge the package, which is far heavier and more damaging to British industry than it would have been if the Government had acted earlier and postured later against three factors. The first factor is the Prime Minister’s timetable: if he wants to clear the 30-month-plus backlog by October, he will have to put a lot more effort and resources into doing so. The second factor involves the level of compensation. The third factor relates to whether the binding responses, which are necessary as we pass each of the thresholds, have been achieved.

    It is perfectly clear that the Prime Minister–like a previous Prime Minister–has returned from Europe claiming a victory, the cost of which we shall feel increasingly over the months ahead. This has been a policy of folly abroad and chaos at home, which has left Britain damaged both abroad and at home.

    The Prime Minister: I certainly do not intend to take any lectures on posturing from the right hon. Gentleman, who approaches every issue in Europe from a kneeling position–whether this country is right or wrong. He is accurate, in that he has said before all the things that he has repeated today. He was wrong then and he is wrong in most of what he has had to say today. The statement that he has quoted is wholly inaccurate. I have seen the right hon. Gentleman’s letter containing the assertion, and I have written back to him this morning telling him that he is wrong, and that no such statement was made. The right hon. Gentleman had better take that up with the Press Association.

    If the right hon. Gentleman looks at what I said in the House of Commons, he will see what the policy of the Government was at the outset and what it has remained, right from the beginning of this affair through to the present time.

    Both the right hon. Gentleman and the Labour leader, who says that the ban was unjustified, have failed to say what they would have done in the circumstances. They would have done absolutely nothing–except carp and criticise, the twin names by which we have come to know them.

    Mr. John Redwood (Wokingham): I am glad that my right hon. Friend has had success in getting our EC partners to see the difficulties facing our beef industry. I trust that people in this House will think twice before jeopardising more livelihoods and businesses in the beef industry.

    Does my right hon. Friend have equally persuasive ways of raising the issues of the powers of the European Court of Justice and the plight of our fishing industry, which are also on our minds?

    The Prime Minister: As I have told the House, both matters will certainly be subject to negotiation during the intergovernmental conference. I mentioned quota hopping, which was certainly not what was envisaged when the common fisheries policy was agreed. As I said in my statement today and in our White Paper, we seek some changes in the European Court of Justice also.

    Mr. Peter Shore (Bethnal Green and Stepney): This is not exactly an occasion for national rejoicing; but will the Prime Minister now answer the question put to him by my right hon. Friend the Member for Sedgefield (Mr. Blair)? Do we not, at every stage, have to obtain not just the consent of the European Commission for relieving the ban, but the consent of the Standing Veterinary Committee, a nationally appointed body? Is it not also true that the great cost of the mass slaughter–or 80 per cent. of it–will have to be borne by the British taxpayer and the Treasury? Will the right hon. Gentleman give an estimate of the actual sums involved?

    The Prime Minister: I believe that I have given the estimates over a period of three years before–but the point that the right hon. Gentleman did not address and may care to deal with now is that the principal issue is getting the ban lifted. It has never been a question of extra resources from the EU, for two good reasons.

    First, we have sought to keep all spending across the EU within the guidelines approved for expenditure. There are repeated claims from other nations wanting to break those guidelines; breaking them would result in substantial extra costs to this country. So if we sought to break the guidelines by asking for extra resources, the costs for this country would increase, not diminish, over the years ahead. I do not think that a prudent policy to follow, and I have no intention of following it.

    Equally, I have no intention of letting anyone take the opportunity of extra help being sought to change the agreements that we would otherwise seek to reach in the intergovernmental conference. For both those reasons, we do not propose to seek extra resources beyond those that normally apply under arrangements agreed in the past for circumstances such as these. There is also the special question of the British rebate and the arrangements that inhibit it when an extra payment needs to be made. They are the credible reasons why it is not in this country’s interests to seek compensation over and above what is normally available under the usual arrangements. It is impossible to determine the cost, but we broadly anticipate that it will be approximately £2 billion over the next three years.

    Mr. George Walden (Buckingham): Is my right hon. Friend aware that we have lost prestige, that we have lost money and that we have lost umpteen thousand more cows? If we feel big after that, we must have been feeling rather small before. Is he also aware that the Labour party did not condemn his tactic outright because it was frightened by the atmosphere of petty chauvinism in the press, which helped to push him into his mistaken policy in the first place?

    The Prime Minister: I cannot answer in relation to the judgments of the Labour party, but I can answer in relation to the Government’s position. We were not prepared to be in a position where objective criteria were ignored, where there was no way to seek a removal of the ban and where science was deliberately being subordinated to national prejudice in countries across Europe, rather than there being an objective judgment of what ought to be done to help a member state facing a particular difficulty.

    I can recall no occasion in the past when a single nation state faced a difficulty of this sort and political criteria in the other member states prevented a solution that was unanimously proposed by the Commission and supported by scientific evidence. Before my hon. Friend criticises the Government or anyone else, he should bear that in mind.

    Mr. Giles Radice (North Durham): Is it not the Prime Minister’s duty to remind the Euro-sceptics on his Back Benches, who have rubbished the European Union throughout the crisis, that it would not have been possible to reach an agreement without the help of the European Commission, the European Council of Ministers, the European Court of Justice and European money?

    The Prime Minister: If the hon. Gentleman looks at the many statements that I have made, he will see that I have made it clear that the Commission and the presidency have played a helpful role in seeking to find a way through these difficulties. However, that is not universally the case with the other member states. I have thanked the presidency and the Commission–most recently at my press conference in Florence–for the support that they have given us during this difficult period.

    Sir Teddy Taylor (Southend, East): Is it not a clear sign of the Prime Minister’s success in negotiating that only this morning the senior spokesman for the German Chancellor stated that he would have preferred to deal with the Leader of the Opposition, because he would have been more accommodating to German interests?

    The Prime Minister was quite right to tell his colleagues that Britain’s unemployment has been much lower than theirs since we left the ERM, but will he also make the point to them that the two European states that voted not to join the EC have even lower unemployment rates? Should they not think through the implications?

    The Prime Minister: I am sure that they will make their own decisions on that and on other matters. My hon. Friend is quite right about the relative rates of unemployment. Unemployment has continued to fall in this country for almost three years, but it has remained constant or increased in other countries–all of which live in the same general economic climate. I do not think that the difference in policies is an accident in the sense that unemployment has been falling in this country. The House will have noted my hon. Friend’s comments about the Leader of the Opposition with interest.

    Mr. Doug Hoyle (Warrington, North): Does the Prime Minister remember that on 21 May he said to us that he would be seeking a clear framework that would lead to the lifting of the European ban and the worldwide ban on British beef? However, he has returned with an agreement that gives us no timetable, no dates and no guarantees. He could have got that agreement without the policy of non-co-operation. He has soured relations with our European partners and he has left a bitter legacy for a long time to come. Even our closest friends, such as the Irish Taoiseach, said that the policy of non-co-operation was a mistake. Has not the Prime Minister–

    Madam Speaker: Order. This is not a debate. Almost the entire House wishes to ask a question, so questions to the Prime Minister must be brisk and I am sure that he will oblige and give brisk answers. Will the hon. Gentleman now put a question?

    Mr. Hoyle: Yes, I shall. The Prime Minister has got nothing for Britain. When will the ban be lifted by Europe and when will the worldwide ban be lifted?

    The Prime Minister: On the last point, if the hon. Gentleman reads the statement, he will find out. If he thinks that I could have got that ban lifted without the non-co-operation policy, why was there no progress over an eight-week period and why was there great progress over the next four weeks? The reality is that we accelerated the agreement of a framework and ensured the lifting of the beef derivatives ban precisely because of the action we took.

    Mr. John Butterfill (Bournemouth, West): Does my right hon. Friend agree that the Leader of the Opposition is nitpicking over the timetable and has overlooked the fundamental point, which is consumer confidence and its restoration? Having a timetable and an agreed procedure that relies entirely on scientific evidence gives us the means by which worldwide consumer confidence in British beef can be restored.

    The Prime Minister: Of course, my hon. Friend is right. The Leader of the Opposition knows that as well as any Member of the House. He just has his fingers crossed behind his back in the hope that he can score a few political points, irrespective of the reality of the situation.

    Mrs. Margaret Ewing (Moray): Some of us have listened carefully to the Prime Minister’s statement. Does he realise that his use of language in his statement gives no hope at all to the agriculture community in areas such as mine, where thousands of jobs are dependent on that industry? The use of words such as “aim”, “expect”, “believe” and “hope” shows pious optimism by the Prime Minister. The right hon. Gentleman specifically referred to certified herds. How will those certified herds be identified, and does he envisage a region-by-region lifting of the ban, which would be of substantial benefit to Northern Ireland and Scotland, because we have had quality assurance schemes?

    The Prime Minister: It is not specifically region by region, but herd by herd. In Scotland, it is likely that many herds will be certified because of the way in which cattle are reared. It was precisely to provide such help for Scotland and probably other regions that we decided to seek, and obtained, a framework that will enable us to identify herds in collaboration with the agriculture industry and the European Union, so that the ban may be lifted at an earlier date than would otherwise have been possible. As I told the House earlier, I expect that we shall be able to tell the Commission by October when, on the basis of the agreement that we have reached, the objective criteria would be met and those certified herds would be removed from the ban.

    Mr. Michael Jopling (Westmorland and Lonsdale): Is the Prime Minister aware that the beef settlement is an important and welcome step towards the ultimate solution of the crisis? Is he further aware that he should not take notice of those who speak for the two Opposition parties, who seem to have turned being wise after the event into a minor science? With regard to the accelerated slaughter process and in the event of dairy cows being slaughtered before the end of their natural time, will my right hon. Friend also give an undertaking that if we end up under-producing on the British milk quota, it will not have any long-term adverse effect on our milk quota in years to come?

    The Prime Minister: My right hon. Friend makes an extremely good point about milk quotas, which we are examining at the moment. As to the accelerated slaughter, according to the fourth cohort, it must be voluntary as there is no other way in which it can be done. Farmers will of course receive compensation, the levels of which are being determined.

    Mr. Dennis Skinner (Bolsover): Is the Prime Minister aware that, in industrial terms, he decided to take strike action without a ballot? He wanted to bang together the heads of all those in the Common Market, and it is the British people who have the headache. Will the Prime Minister now answer the questions: when will the ban be lifted and how much will his supreme folly and that of that gang over there cost every man, woman and child in Britain?

    The Prime Minister: The hon. Gentleman manages to carry his own absurdity to further lengths this afternoon even than in the past. I thought that he would welcome a strike without a ballot, based on his reputation and his past–it is the way in which he seems to have operated for most of his life. As to his other questions, I refer him to the answers that I have already given to several of his hon. Friends, when I set out those points.

    Sir Michael Spicer (South Worcestershire): Will my right hon. Friend confirm that the Government have not been diverted by the beef crisis from pursuing their general objectives in Europe as outlined in the White Paper: that is, preventing any further moves towards a federal state of Europe and, where possible, returning powers to this country and to Parliament?

    The Prime Minister: I can certainly confirm that our policies remain as set out in the White Paper, and they were reiterated again in Florence at the weekend.

    Mr. Tam Dalyell (Linlithgow): The Prime Minister referred to the middle east in his original statement. Did the Greeks, the Italians or the Germans tell him that they would go ahead and trade with Libya and north Africa, despite the sanctions? Is not British industry the loser, as the recent Egyptian delegation to the House made clear, as a result of sanctions against Libya?

    The Prime Minister: There was no such comment by the countries concerned during any discussions about the middle east. Those discussions tended to deal primarily with the middle east peace process.

    Sir Hector Monro (Dumfries): May I welcome the achievements of my right hon. Friend the Prime Minister in Florence, in securing the lifting of the ban in due course? I agree that it is important to get beef off the front pages of the newspapers and back into the high-quality food chain. To achieve that aim, will he ensure that the Ministry of Agriculture, Fisheries and Food makes fair payments to farmers involving the least possible bureaucracy?

    The Prime Minister: I shall ensure that that is the case.

    Mr. D. N. Campbell-Savours (Workington): The Commission’s position paper requires the introduction of an effective animal identification and movement recording system, with official registration. The hon. Member for Wantage (Mr. Jackson) and I called for those measures 11 weeks ago. Have those 11 weeks been lost? Is the programme under way? Will the Prime Minister provide some details?

    The Prime Minister: On the contrary, the 11 weeks certainly have not been lost. It is a massive undertaking to produce a proper identification programme for all cattle across the country, but that is our intention. A programme of that sort is available in Northern Ireland, but it does not extend across the rest of the United Kingdom. It involves a massive amount of computerisation and co-operation from the agriculture industry. A great deal of progress has been made in the past 11 weeks, and as a result of that progress I was able to set out the indicative dates for the House a few moments ago.

    Mr. Nigel Forman (Carshalton and Wallington): On the basis of what has happened with the beef issue in the past few months, is it not clear that the Government’s tactic of non-co-operation has proved both legitimate and effective? In order to put that in context, will my right hon. Friend tell the House how the 74 occasions on which we used our national veto during the period of non-co-operation relate to the occasions when was it not necessary to use our national veto, because matters were decided by qualified majority voting? That might show the House whether the European Union is as supra-national as some of my hon. Friends claim.

    The Prime Minister: I shall certainly provide my hon. Friend with those figures. I do not carry in my head the number of occasions on which there were qualified majority voting agreements in the past month, during the period of the non-co-operation policy, but my hon. Friend makes a good point. He is also entirely right to point to the fact that the policy has been effective in securing the objectives that I set out at the Dispatch Box, and in securing them far more speedily than would have occurred in any other way.

    Mr. Jeff Rooker (Birmingham, Perry Barr): Will the Prime Minister take this opportunity to confirm that the other members of the European Union are our partners and friends, not our enemies? When he was explaining his proposals to them over the weekend, did he explain why, on 20 March, two of his Ministers came to the House to make statements on the same issue–one raising a health scare about the transfer of BSE to human beings, and the other saying that no cattle would have to be slaughtered as a result? Given the massive job losses in this country and in France and Germany, how did he explain to our partners and friends the fiasco that was started by two Ministers not being remotely aware of the consequences beyond the statements that they made?

    The Prime Minister: I seem to recall that when my right hon. Friend the Secretary of State for Health came to the House, the Opposition congratulated him on bringing the problem to the House as speedily as he had, because it was thought that that was the right way to deal with it. The hon. Gentleman will recall that there had been a leak in the morning papers, I think, that day. In the absence of a statement, undoubtedly there would have been demands from the Opposition for one. Undoubtedly there would have been a private notice question. My right hon. Friend received praise from the Opposition for coming to the House and setting out the position. The way in which the hon. Gentleman refers to it now is a total and utter travesty of what happened.

    Mr. David Howell (Guildford): Can my right hon. Friend detect a strong whiff of sour grapes coming from the Opposition Benches this afternoon? Was it not quite simply a very positive deal, achieved as a result of a tough negotiating approach?

    Moving away from beef, did my right hon. Friend notice at the Florence summit that, whereas previously all the pressure was supposed to be on this country to conform to EU social and labour market policies, it is now the other way round and the EU is seeking to follow our policies? Did he hear any comment on the Organisation for Economic Co-operation and Development forecast that, over the next two years, Britain will be the fastest-growing economy in the whole of Europe?

    The Prime Minister: There was some comment by me, for I certainly mentioned that, but I did not hear a great deal of comment from our friends and partners in the discussion at Florence over the weekend. My right hon. Friend is entirely right that the new position of the Opposition on these matters seems to be, on every occasion, that everybody is right except the United Kingdom. That seems to be the case, whatever the merits of the argument.

    Mr. Peter L. Pike (Burnley): Will the Prime Minister say precisely when and how the scientific basis and information changed to justify the climbdown in the number of cattle to be slaughtered? Will he assure the House that the Minister of Agriculture will not be slaughtered before the last of these cattle are slaughtered?

    The Prime Minister: There was no change in the scientific criteria. My right hon. and learned Friend is at the Agriculture Council in Luxembourg at the moment.

    Sir Jim Spicer (West Dorset): Does my right hon. Friend accept that we all want to consider other members of the European Union as our partners and friends, but after the weekend in Turin, when he was so badly let down by our partners, was it not inevitable that the ban would follow? All of us in the agriculture community very much welcome the support that he has given to the farming community over the past three months. Does he accept that the farming community will take on board the need for the accelerated slaughter, but only if the commonsense approach to it is coupled with fair compensation?

    The Prime Minister: It is certainly true that we were promised co-operation in Turin. It is equally true that a few days later, in the Agriculture Council and elsewhere, that co-operation was noticeable only to the extent that it did not materialise. That is the background to the policy that we subsequently adopted.

    Mr. Llew Smith (Blaenau Gwent): The Prime Minister said that employment matters were also discussed in Florence. As we know, to meet the convergence criteria for a single currency, cuts of £18,000 million in public expenditure and public services such as health and education are required. Would he care to anticipate the likely effects that those cuts will have on employment?

    The Prime Minister: If the hon. Gentleman thinks that that applies to this country, he should have a look at what will be necessary in each and every country right across the European Union. I see that he does think that. He clearly does not envisage the sort of policy that is set out by his party’s Front Bench. There seems to be a certain disagreement between the Labour party’s Front and Back Benches. It is quite sad to see the splits in its European policy that open up daily.

    Sir Wyn Roberts (Conwy): I welcome the underpinning given at Florence to the policy of eradication, as well as progress towards the lifting of the ban. Does my right hon. Friend agree that, come the autumn, the British beef industry should be in a stronger position than it has been for some time, and that the grounds for increased consumer confidence–both here and elsewhere–should be stronger as well? Does it not appear that, if Opposition Members were ever to negotiate on our behalf in Europe, they would be dictators at home and appeasers over there?

    The Prime Minister: My right hon. Friend is right about the impact of our policy over a period. We are seeking a complete eradication policy for BSE. As that is increasingly achieved, it will reopen not only the European markets that have recently fallen foul of the European Union ban, but the markets that were barred to British beef some years ago in the United States and elsewhere. That is why, given the scale of the present problem, it is right for us to seek a full-scale eradication policy. The incidence of BSE is falling dramatically at present, and will continue to do so as a result of the measures that we have adopted.

    Mrs. Alice Mahon (Halifax): Is it true that the eradication plan that the Prime Minister has now accepted is three times larger than the original proposal? In the light of what he has just said, would it not have been better, cheaper and safer to go down that route earlier?

    The Prime Minister: I simply do not recognise the statistic that the hon. Lady has just produced. I have not seen it, and I have no reason to believe that it is remotely accurate. As I just told my right hon. Friend the Member for Conwy (Sir W. Roberts), what we are seeking is a comprehensive plan to eradicate BSE entirely from British herds. I think that that is right in itself. It is certainly right in terms of bringing confidence back to the consumer, and ensuring that British beef–which I consider an excellent product, and which has traditionally been seen as such by the world–can once more enter world markets without let or hindrance.

    Mr. William Cash (Stafford): Did my right hon. Friend note that, in yesterday’s The Sunday Times poll, the British people approved his tough stance by a majority of two to one? Cannot a number of useful lessons be learnt, both by the Labour party and by those who drive for a federal political union in Europe? Those who drive for political union should recognise that we will not–and the British people will not–tolerate the abolition of the veto as expressed by Mr. Dehaene, the Belgian Prime Minister, who, after all, is now governing by decree. As for the Labour party, since our adoption of a tough stance, its rating in opinion polls has dropped by nearly 10 per cent.

    The Prime Minister: I certainly believe that we have been following the right policy on its own merits. My hon. Friend is entirely right about the veto. Some of our European partners would wish all matters to be dealt with by qualified majority voting–which, of course, is what the Labour party signed up to in its European socialist manifesto. The impact of that would be that there would be no veto for this country. I assure the House that, if there had been no veto at the Edinburgh financing arrangements in 1991, we would have lost the British rebate. No other country in the European Union likes the British rebate; every other country would vote to get rid of that rebate, which saves this country millions of pounds a year. The little piece of paper that the Labour party signed in its European socialist manifesto is a little piece of paper that will cost the country billions of pounds and more every single year.

    Mr. Ieuan Wyn Jones (Ynys Mon): Does the Prime Minister realise that there is considerable concern among Welsh farmers at the accelerated slaughter programme, because we are taking out of production some of the most productive animals in the dairy herd? Does he realise that farmers’ disappointment is coupled with the fact that there is no firm timetable for lifting the ban? Will he make it clear what type of compensation package will be introduced for farmers? Will it cover the replacement costs of productive animals and the consequential loss of income? Does he realise that his policy of non-co-operation did not affect the timing or the outcome of the Florence deal, but that it might have affected relations with our European partners?

    The Prime Minister: I am sorry that the hon. Gentleman feels that way, because I just think that he is wrong. I have spent six years sitting round the European table with my partners, and he has not. I can assure him that we have made more progress by following this policy than we would have done if we had followed the policy that he seems to advocate. Animals in the accelerated slaughter scheme would in due course have been slaughtered under the 30-month-plus scheme, and the overwhelming majority of them would have been slaughtered only a few months later than under the arrangements that we advocated last week.

    Compensation will be offered. As I told the House earlier, we are discussing precisely what the compensation will be. I certainly understand the hon. Gentleman’s point on that.

    Mr. John Townend (Bridlington): As the Prime Minister has achieved most of the objectives that he set when he started non-co-operation, would he hesitate to use those tactics again in future if British interests were at risk? My farmers are very worried about the influence of the veterinary committee. If the committee is again subject to political influence–as it has been in the past–will it be able to stop the lifting of the ban, or does the Commission have the power to overrule it?

    The Prime Minister: The answer to my hon. Friend’s last question is, yes, it has the power if it were felt that the committee was not acting on the basis of objective science. That will be extremely helpful. As for his question about policy, very unusual circumstances led us to use that tactic–circumstances that I hope and expect not to see again. I cannot recall another issue on which our European partners voted against the unanimous recommendation of the the Commission, when that unanimous recommendation was clearly backed by science. The position taken by our partners was clearly taken for domestic political reasons and was not objective. That caused our response. I very much hope that that type of circumstance will not occur again.