Hain under fire over call to use Euro elections as a referendum

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The Government was thrown on to the defensive over Europe's new constitution yesterday when the Cabinet minister Peter Hain suggested that next year's European Parliament elections could be turned into a referendum on the treaty.

Mr Hain was forced into a hasty retreat after the Tories seized on his remarks. He insisted that next June's elections would be fought on a range of issues. But the Tories claimed the Government was "in a panic" and renewed their demand for a referendum on the new EU constitution.

Yesterday, Valéry Giscard d'Estaing, who chairs the convention drawing up the EU treaty, unveiled proposals for a wholesale expansion of the powers of the European Parliament, and called for the scrapping of national vetoes in 20 areas. The plans would confine the national veto to a small number of measures such as defence, most foreign affairs issues, taxation and treaty changes.

The former French president proposed the creation of 36 new areas of "co-decision" - the rule under which MEPs make laws with the European Commission and the EU member states. In all, the Strasbourg Parliament would co-legislate in 70 areas if M. Giscard's plan comes into effect, almost doubling the present number.

That is not opposed by Britain, which says that it is in favour of democratising the EU's procedures. But the Government made it clear that it would fight plans for an extension of majority voting to two areas of taxation and several social security issues.

The row broke while Tony Blair held talks at Chequers with Mr Hain and Jack Straw, the Foreign Secretary, on how to fight back against the Eurosceptics' campaign against the convention's proposals.

Mr Hain, who represents the Government on the convention, told BBC Radio 4 yesterday: "In the end, if people don't like what they get, they can vote against the Government in the European elections next year. They will more or less coincide with the end of this constitution." He added: "I would be quite happy to fight the next European elections on a Labour platform endorsing this treaty, and the Conservatives can oppose it, and then the people will decide."

A few hours later, Mr Hain backtracked, accusing the Tories of deliberately misinterpreting his remarks. He said: "It is totally absurd to suggest that I said the European elections would be a substitute referendum on the outcome of next year's inter-governmental conference. People will be voting on a whole range of issues, especially when the local government elections could well be on the same day."

But the Tories claimed the Government was "running scared" of a referendum. Michael Ancram, the shadow Foreign Secretary, accused Mr Hain of trying to use a "sleight of hand" to deny the British people a vote on the new constitution. The Government's problems deepened when Frank Field, the Eurosceptic Labour MP for Birkenhead, said he would regard next year's Euro elections as a referendum on the EU treaty. He threatened to vote against official Labour candidates if they backed the blueprint. Mr Field said the Government's "nightmare" was that the Tories could turn the next general election into a "single issue election", promising to pull out of the treaty, and then call another election. He said: "There will be some Labour candidates who will wish to trust the people and will say so, and those candidates will be ones which obviously Labour voters will wish to endorse."

Last night, Mr Ancram warned that the proposals unveiled in Brussels yesterday would be a "stepchange towards a European state". He said: "It is particularly worrying that so much power would be given to European judges."

But the Tory campaign was undermined when the former Chancellor Kenneth Clarke dismissed the party's call for a referendum on the proposed constitution.