European Affairs

Indeed. Growth is at the heart of it all. As my hon. Friend the Member for Great Grimsby pointed out, the European Union has been a massive drag on growth across the European Union, but particularly in Britain. If we had not been in the European Union and instead been able to negotiate our way in the world, we would have grown more quickly. The sheer fact is that we have net fiscal transfers to the European Union that take out a chunk of our economy every year. If we had invested that money over the past 30 or 40 years, we would have a higher standard of living now. It is absolutely right that the European Union has acted as a drag on economic growth, not the other way round. The idea that we should deflate our way to success is quite mad. The European Scrutiny Committee recently visited Spain—we came back yesterday—where we had some interesting discussions. Like Ireland, Spain was one of those countries that initially benefited enormously from going into the European Union. It went into the eurozone at a comfortable parity and with reduced interest rates, all of which pushed its growth. Spain also received substantial fiscal transfers, through both structural plans and the CAP. It experienced rapid growth and everything was going along nicely, but now Spain has got into difficulties. Growth has stopped and unemployment is rising; it seems likely to rise to some 20 per cent., with 40 per cent. youth unemployment. There is an argument in Spain that says, "Let's just restructure. Let's have some reform and a bit more competitiveness." However, that will not solve a problem of that magnitude. One has to look at serious control of one's macro-economic basics and at the Government managing the economy in a direct way. Just changing the terms of trade and getting wages down in order to compete more effectively with other European nations will not solve Spain's problems. Indeed, those whom we met were quite shocked by our, let us say, robust comments on Europe, the European Union and how it operates. I have fallen into the trap myself. My hon. Friend the Member for Great Grimsby kept referring to Europe, but the European Union is only a part of Europe. It represents a particular model of politics and economics that has been imposed on a group of nations within Europe, but it is not the complete Europe. Some countries that have chosen to stay outside, such as Norway, have done rather well. I know that Norway has oil and fish, and so on, but it has chosen to stay outside and has done rather well. I am not suggesting that we should leave the European Union, because that would be seen as bad form. [Laughter.] We want to be comradely with our fellow European nations. We want to see radical change and a move back towards the kind of post-war social democracy that worked so well between 1945 and 1970. Lots of myths have been perpetrated about that system, but it worked well. We had steady growth, full employment, rising living standards, growing equality and growing welfare states. It all worked well, until somebody had the bright idea of destroying it all. The European Union has taken that model and imposed it on us, which has been a big mistake. We ought to rethink where we are going economically. Unfortunately, I will not be asked to do that; if I were, I would know what specific things to do immediately—but there we are. Let me deal briefly with some of my other concerns. I have already mentioned enlargement and whether or not it is a good idea. There has been a change of mood on that, and I believe that even my hon. Friend the Minister for Europe—we used to debate these matters enthusiastically when he sat on the same Bench as me some time ago—has adopted a more pragmatic rather than theological tone, if I may use those terms again, which is very sensible, too. I look forward to more European debates with him. I am happy to have him representing our interests in Europe, as I believe he is one of the most intelligent Ministers for Europe we have had—we strongly disagree on some issues, but he has a real grip on things—and I believe that he will represent us well. The common agricultural policy and the common fisheries policy are the real problem. If we are to roll back the European Union, that is where I would start. The CAP still takes about 41 per cent. of the European budget, which is massively distorting. France and Spain, for example—two of the more prosperous nations—are still net recipients of funding, while we are a massive net contributor. That is nonsense. I believe that each country should manage its own agriculture. We should choose what we do and do not subsidise. We should decide what level of agricultural production we want in our own country for security reasons. It is wise to retain some degree of agriculture for the long term. A country that cannot produce sufficient for itself is a poor country.