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Our vision for Europe – Conservatives

Britain and its relationship within the European Union is a central issue in this election.

The internet revolution, globalisation, the new network world being built around us, help to explain why people in Britain are so sceptical about scrapping the pound and joining a single European superstate.

They understand that in a fast-changing, highly interconnected world, the nation state matters more, not less, than before.

And they understand that a revolutionary shift in the role of government is taking place, as the power balance between government, Non-Governmental Organisations and big business is re-weighted in the dynamic landscape of the electronic age. For in this new network world, control and agility are everything. Our ability to shape our own future, to ensure this necessary flexibility, matters more than ever.

That is one reason why a Conservative Government would keep the pound. Control of monetary and fiscal policies, regulation and taxation are the keys to success in the business of winning business and investment.

In order to succeed amidst the shifting sands of today's globalising world, nations and institutions must make a choice: to adapt and adjust to the demands of the age or to risk extinction. The European Union is no exception.

On any audit, the EU has achieved much. The prosperity of Europe's citizens has improved greatly, with the biggest single market in the world and with free trade the victor in a continent previously more prone to protectionism and national insularity. With NATO, the EU has provided a framework that has made a major European war inconceivable.

But the EU needs to change. It needs to modernise. Its structures are too rigid. Enlargement is our moral imperative. Yet too many of its aspirant members are being forced to sign up to the policies of the past.

And in today's world of global economic integration, big centralising blocs no longer make sense. The EU is the only international organisation still wedded to the 'head office culture'. Try to find any other 21st century multinational organisation - be it a business or a voluntary organisation - which favours more centralisation and you will fail. It is decentralisation that works; the creation of modern multi-centred structures, with decisions taken away from the centre.

In the network age, a rigid one-size-fits-all model of European integration is not just inappropriate - it is a recipe for division and fracture. Nor is it what people want.

Armed with unprecedented freedom of choice, people don't want harmonisation: they want to see the subtle shades and strong contrasts of different cultures.

And through low turnouts in European elections and falling support in opinion polls, the people of Europe have sent a clear message to their governments. That message is that real unity cannot be imposed by integrationist treaties and by diktat.

The EU cannot afford to be blind to the trend of change across the world and deaf to the voice of its citizens and still expect to succeed. If we want the EU to succeed, we have to move away from the one-size-fits-all dogma. It belongs to yesterday.

We need a fresh approach to Europe. To reform the EU to make it a modern network organisation. In the e-age, we need adaptability, flexibility and a light touch from the state if we are to realise the goal of a stable, prosperous, outward-looking, free market and democratic Europe

The Gothenburg Summit

On 15 June, the British Prime Minister and Foreign Secretary will travel to Gothenburg for the biannual EU summit.

A Gothenburg summit with Britain represented by William Hague and myself will be a very different discussion from one in which Tony Blair and Robin Cook are there on our behalf.

At the Nice summit last December, Labour were party to setting in train a number of tasks for the Swedish presidency that is about to end, and which are expected to report in Gothenburg.

European Army

They include the misguided efforts to establish a European army separate from NATO. NATO has a superb record in protecting Britain and our allies. Put bluntly, it works. So it would be a grave error to confuse and undermine our defence arrangements by establishing a separate EU military structure outside NATO.

That is now happening. The EU now has its own Military Staff and its own Military Committee. These structures duplicate and undermine NATO's own structures.

A European Army outside NATO is a political, not a military, plan. The French Prime Minister Monsieur Jospin has talked of the defence policy taking "a decisive step towards building a political Europe". President Chirac called the policy "a fundamentally political project"

Well, I don't think we should play politics with the defence of Britain and our allies.

Our soldiers don't want to. The British people don't want to. Conservatives don't want to, and if William Hague and I go to Gothenburg, we will ensure that the whole enterprise is brought back within NATO, where it belongs.

Tax Harmonisation

Gothenburg is also expected to discuss the tax harmonisation package that was approved in Brussels yesterday.

I find it disgraceful that the Commission has compromised its political neutrality on this subject.

Spokesmen yesterday intervened in our own election campaign, and did so in a deliberate attempt to mislead the British people. They tried to say that the proposals they approved did not amount to tax harmonisation.

But even as these civil servants - paid in part, of course, by British taxpayers - were speaking, the truth was written in black and white.

A press release from the Commission today said: 'a large measure of harmonisation is essential as regards Value-Added Tax and excise duties'.

And harmonised taxes for Brussels means, of course, higher taxes.

The document calls for income tax to be subject to the EU's Code of Conduct.

And it was made clear that the Commission's plans include harmonising company taxation, pensions taxation, vehicle taxation, alcohol and tobacco duties and VAT.

The document that was eventually released at dead of night last night, far from reassuring us about the Brussels plans, turned out to have become even more damaging for Britain.

The references to income tax remain.

The commitments to harmonisation of VAT and excise duties are still there.

In fact the Commission's dislike of different rates of VAT - and especially the zero rates of VAT which apply to books and children's clothes - has been beefed up.

Britain's tax regime is described as 'unhelpful'.

It still talks about circumventing Britain's veto, with its sinister references to the use of "alternative instruments".

And now we know how the Commission intends to get its way: by using the Court of Justice, through peer pressure, by infringement proceedings.

The only things that are missing compared with the original draft paper are the commitments to tax competition and to reducing the overall burden of tax.

It doesn't talk much about harmonisation, and we know why.

There is no difference between tax harmonisation and tax co-ordination. Oscar Lafontaine, at a conference of his Social Democratic Party in Saarbrücken, said: 'Our English friends have asked us not to use the word "harmonisation" and instead the word "co-ordination"' (Daily Telegraph, 9 December 1998).

And just because the Commission has tried to silence debate on the tax plans, it does not mean that there is not real pressure to enact these proposals. The Belgian finance minister said recently: "I am pleading for real, genuine tax harmonisation that could be comparable to the Economic and Monetary System."

These proposals are expected to be discussed at Gothenburg. Who is more likely to stand up for Britain and make sure these proposals do not pass: Tony Blair or William Hague?

If William and I go to Gothenburg on June 15, we will go with a very different agenda.

We will start by calling for two Inter-Governmental Conferences.

The first will renegotiate the Treaty of Nice. This flawed Treaty, which has not been ratified by Parliament, was meant to be about enlarging the EU, but instead it ratchets up integration.

At the first IGC, which could take place at Gothenburg that same weekend, we would agree those parts of the Nice Treaty which are genuinely needed for enlargement to proceed.

These include the reweighting of votes in the Council of Ministers, together with provisions to limit the size of the Commission and Parliament.

We would undertake to ratify this limited treaty immediately, so that there would no longer be any excuse for delaying enlargement.

The second Inter-Governmental Conference would renegotiate the remainder of the draft Treaty.

As it stands, it would take Britain many steps further down the one-way street towards the single European superstate.

Having said in Britain beforehand that they opposed more than half of the measures on the table, Labour had a sudden change of heart in Nice and agreed to 31 out of 50, including at least two which they had previously said they would oppose.

The Treaty of Nice contained no measures to loosen arrangements, or to return powers to national governments.

Instead it pressed ahead with a further wide-ranging loss of the national veto on EU laws - making it more difficult for future British governments to block measures which are not in our national interest.

It also contained measures to make it easier for the EU to interfere in an individual country's affairs and to allow European-level political parties to be funded. These are already being taken forward by the European Parliament, even before the ratification of the Treaty by all the member states gives it a basis to do so.

This IGC would discuss our requirement for a flexibility clause, so that outside the areas of the single market and core elements of an open, free-trading and competitive EU, countries need only participate in new legislation at the EU level if they consider that it is in their national interest.

Conservatives recognise that an enlarged EU will be an even more diverse EU - in terms of culture, ethnic background, language, history, outlook and perspective. Such diversity is one of Europe's major strengths, not a threat to be submerged.

But it means the EU will need to become more flexible to accommodate the different needs and wishes of its peoples.

The original European Community with only six members may have coped with a model of rigid uniformity. An EU of fifteen struggles to do so. An EU expanded to almost thirty nations would simply not cope with this.

Signs that a rigid 'one-size-fits-all' EU is not the right approach in a diverse, enlarged Europe are already apparent. By December 2000, for example, the applicant states had made more than 340 requests for transitional measures in agriculture and over 170 in other areas.

Nor is the 'one-size-fits-all' approach popular with the people of Europe, as the Danish euro referendum showed. As The Economist said prior to the result: 'A Europe in which all must converge and co-operate on all sorts of subjects, heading dreamily for "ever closer union", is not likely to be either happy or sustainable. Those virtues are likelier to arise if different groups of members can co-operate on different topics, forming a multi-system Europe. A "No" vote [in Denmark]… would offer a welcome jolt in favour of that, and against the one-size-must-fit-all integrationists' (23-29 September 2000).

Greater flexibility would reduce the constant tension between those countries which feel the process of integration is going too slowly and that others are holding them back, and those which feel they are being dragged against their will into a superstate. A diverse and flexible Europe would be a Europe able at last to be at ease with itself.

And the EU must bring up to date how it manages its affairs. We want changes that would take powers from the unelected Brussels Commission and make the Council of Ministers the driving motor of the EU. The Council is composed of national ministers, who can then be accountable in each country's own way to the national Parliament.

Under these changes each country would appoint a senior minister to head its Brussels delegation. The British Minister for Europe would be directly accountable to the House of Commons week by week. This is the right way to fill the democratic deficit in the EU, not the creation of ever more centralised European institutions.

So our agenda for Gothenburg and beyond is clear. But what of other member states round the table?

Looking across the Channel, to the country where Tony Blair lectured its parliamentarians on the joys of the third way, we can see the kind of Europe that they really want to build.

Last month, Robin Cook was inaugurated President of the Party of European Socialists at its conference in Berlin. Arranged for five days after the likely date of a May General Election, Labour hoped it would be a celebration of a general election victory.

Instead it has provided us with a telling insight of what they intend to do.

The conference was the launchpad for a manifesto called 'The New Federalism'.

It was signed by more than 50 of the PES's 181 MEPs, including the British Labour MEPs David Martin, Eryl McNally and Stephen Hughes.

David Martin, you should know, was the man who said in 1991:

'Let's stop defending, pretending and apologising … A socialist superstate is exactly what we do want to create' (Europe: An Ever Closer Union, 1991, p90).

He is one the people leading the European debate in Labour.

And he is not working in a vacuum. He and all the other Labour MEPs have voted for tax harmonisation, they have voted for a European public prosecutor, they voted for a prototype constitution in the shape of the Charter of Fundamental Rights.

I could frighten you with the details of what Mr Martin and others are proposing in 'The New Federalism'.

But one short paragraph says it all. It calls for changes to the terminology used to describe the EU's institutions: "the European Commission should become the EU Government … the president of the Commission should be called the EU Prime Minister, the commissioners should be called EU Ministers … the European Council should become the Council of Heads of State and National Governments. The President of the Council should be called the EU President";

Both the governing parties of France and Germany are thinking in much the same way. The French socialists want an economic government to police a set of social convergence criteria. The German SPD want the EU Commission from now to be strengthened to become a government, a real European government, beside the national governments'.

They know where they are going. We know where we are going. And it is not with their kind of Europe.

The choice at this election is between two visions of Europe.

A forward looking, flexible Europe that can build itself on a network of nations. A Conservative Vision.

Or a Europe that is inward looking, rigid and bound by the outdated dogmas of the Left. A Labour nightmare.

Last night a senior Labour Cabinet Minister blew to smithereens Labour's preposterous assertion that there is no constitutional bar to scrapping the Pound and joining the Euro. Tony Blair has said repeatedly that he has "resolved" the constitutional issues involved.

We now know what he means. Last night, when Stephen Byers was asked to give an example of a currency union that has existed without a political union, replied "the United States of America".

I was obliged to point out to him that the USA is in fact a political union, and was so for a full century before there was a single currency.

This off-guard answer tells us everything about what Labour really thinks. They think that Britain will be like Arkansas in the emerging United States of Europe.

That is not what the mainstream majority of the British public want. They want Britain to be an independent self-governing country, which really can count for something in the world. That is what we want.

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