We didn't vote for a country called Europe

In Thursday's paper, Kenneth Clarke backed continental co-operation. John Redwood replies
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The Chancellor was wrong to say, in his Chatham House lecture last Wednesday, that people thought we were joining a political union in Europe in the 1970s. In 1972, Britain joined the Common Market. No one then told us we were joining the European Union, or that the common market we sought would gradually metamorphose into a country called Europe run from a city called Brussels.

In the White Paper setting out our entry terms, in the parliamentary debates that led up to our accession, and in subsequent ministerial statements of Conservative and Labour governments, we were assured that it was a trading arrangement which would help our economic progress.

In 1975 this was all repeated to secure the consent of the British people in a referendum. Ask those now who voted in 1975, and most will tell you they voted for a common market, nothing more and nothing less. They believed their leaders when they said that the supremacy of Parliament and the common law would remain, save in a few areas relating to a common agricultural and commercial policy.

In the 1980s, Parliament was persuaded that a little more majority voting was needed to complete a proper single market. In the 1990s, we were told that with opt-outs from the Social Chapter and the single currency, Maastricht was a decentralising treaty allowing more deregulation and more national decision-making.

The mood of the British people still favours belonging to a common market, although the numbers who want to pull out altogether are growing. The mood is also distressed by the way the common fisheries policy is damaging our fishing industry, the way the beef ban was placed on British beef sold outside the UK, the way the European court regularly overturns Acts of Parliament, and the way that the legislative machine still produces more directives and regulations, if at a slower rate.

Britain's future is in both Europe and the wider world. It must be a future where we see Europe as a whole - the Europe of Switzerland and Norway, Poland and Hungary, as well as of the present Community. It must be a future where we understand that in 10 years' time, we will do much more trade with Asia than we do today, where our security will still rest upon the American alliance, and where freer trade may well have advanced through Gatt and the World Trade Organisation more rapidly than through the EC.

There is no need to be governed by people because you trade with them. The EC accounts for less than half our total services and goods trade, but it is important.

There is no need to join someone else's currency because you do business with them. If currency fluctuations were a sufficient impediment to business, we would have joined the dollar long ago, as so much of our trade is denominated in dollars. Only a world currency would avoid the costs of currency transactions and the fluctuations of the exchanges. Merging a few western European currencies would still leave these economies vulnerable to uncompetitive rates against the dollar or yen.

Britain should stay at the table and lead the debates with our partners. Europe has need of the British view. We are uniquely placed to help modernise Europe: to save Europe from her worst impulses to too much government, to warn her of the damage that higher taxes can do, to remind her that the Asian world is much bigger than the European and growing much faster.

It is British policies in telecoms and energy which have shown the way to the rest: deregulation and competition have powered growth and new technology. It is British policies towards the exchange rate, interest rates and labour markets that have delivered much better levels of employment in the past three years than they enjoy on the Continent.

We should be proud of these successes, humble about our position relative to the jobs success of Asia. Britain should lead the modernisers. We should launch a new agenda for Europe which puts jobs and people first, and bigger government last.

Those of us who are sceptical about Chancellor Kohl's vision of Europe do not want to turn our backs on our continent or withdraw us from the tables of Europe. We are sceptical because we think that Kohl's vision is an outdated one. It will not work. It is already doing damage.

Italy has had to impose a special Euro tax to prepare for the new currency. France has had to undertake unacceptable budget cuts in a hurry instead of going in for longer-term welfare reform against a background of rising prosperity. Germany has had to follow a policy of retrenchment. This is driving a wedge between the peoples of Western Europe and their governments.

Britain's economic interests lie in global trade and modern industries. We should warn that a single currency born of fudge will create havoc. Wrong interest rates and exchange rates will damage parts of the Union in a way which may prove impossible to correct.

We should offer a more positive alternative, based on removing regulation, opening markets, encouraging competition and reducing the size of government. Why is it that amidst all the budget misery, where national governments have to cut Brussels never proposes cutting its own less desirable expenditure? Do we really want those who designed and ran the common fishing policy running a common economic policy as well? It is time to offer something better: a Europe which works.

The writer is Conservative MP for Wokingham.