Shirley Williams with Carole Tongue MEP, Graham Mather and Tony Blair MP

Carol Tongue: Many thanks Shirley. The new situation over the Maastricht treaty has thrown our discussion this evening into very sharp focus indeed.

Your lecture reminds us all how British and European democracy are inextricably linked; that both require more reform; and that the real question is how can we achieve more democracy, particularly democratic and accountable government at all levels, local, regional, national and European. We are not simply talking about a struggle for power between the nation state and the European Community. With that I'll go straight to Tony Blair.

Tony Blair: It is a pleasure to be with you at the Charter 88 lecture and respond to Shirley's excellent and thought provoking lecture. What I understand Shirley's argument is, is that first of all we require an additional treaty which is concerned with more democratically accountable procedures and secondly this notion of a constitutional convention. As I understand it she is saying that the process of Maastricht should be in abeyance at least until we have worked out how the treaty and the constitutional convention should work.

First, there is still a great deal of inadequacy within the whole of the debate about Maastricht about what the form of this greater democratic accountability should be. Secondly, I think that we are underestimating the need the to demonstrate once again the validity and relevance of the European project of greater cooperation.

The Danish vote can be interpreted in one of two ways - or at least has been by those that are opposed to the whole process of European integration. It's been welcomed as an excuse to ditch not merely Maastricht but greater ties towards Europe altogether. By those who support the process of European integration it has been seen sometimes as a disaster because it appears to stall the project. In one sense it is an opportunity, or even a duty, for those who support the process of European integration to argue with much greater conviction why that process is right and how it can be sensibly and democratically achieved. It is clear in a broader political sense that the politicians have lost touch with those they govern.

There has been a tendency going back over the years to argue that the process of European cooperation is inevitable and therefore desirable. What people are saying to us is that we should justify that statement before the process is made inevitable. So, the onus is upon those who support the ideals of the European project, loosely defined as closer European integration, to say why it is still valid.

The task for those that believe in Europe is not to allow the deficiencies of Maastricht to become a weapon of destruction in the hands of those who, for a basically nationalist reason want destroy the entire project. For example in relation to the ERM: if you agree on the ERM, then the process of European monetary union is a sensible and logical development but there are major economic consequences which have to be explained and faced up to. They can't simply be wished away on the basis that this is a process that we simply have to give in to. And I would define the public mood over Maastricht as one of anxiety about where it leads rather than outright opposition, a demand to be persuaded about it, rather than railroaded into it.

To be persuasive we have to recognise two things: the inadequacy of the EEC democratic procedures and the need to remedy them. While there are arguments about the EEC institutions, there are also major arguments abouthow national parliaments deal with European legislation and decisions taken in Europe. We don't have any proper procedures within the UK parliament for scrutinising these developments properly, nor for explaining them to people.

Secondly, while monetary union is in my view a desirable end, it has to be accompanied by measures to promote a greater degree of economic convergence, and of course the fair treatment of employees within the single European market. This is part of democracy too, you do not divorce the concept of measures assisting the process of monetary union from the concept of greater democracy within the European Community.

So, if you want this new Europe as part of the new democratic settlement that Gordon Brown talked about in his first lecture, we have to show that the choice is not between some outdated notion of absolute national sovereignty and a rather inadequate idea of a European free market for business, but about a new era of European democratic cooperation where the political and economic change go together.

Similar pressures arising at a national level. We cannot divorce the concept of greater democracy at a European level from the push for greater democracy at the national and domestic level. We can use the Danish vote in a sense as a pause for thought to give new strength to those who have grown up in a generation that sees Europe as potential partners rather than enemies. But we have to recognise now at this crucial stage that it is going to have to be argued and developed from below. You cannot simply impose from above.

Shirley Williams: On the whole, I agree. I'll pick up on a couple of points. First, a major task now is to begin to work on the issue of how national parliaments supervise European legislation within their own capacity . The only way that can be effectively done is by a much closer degree of cooperation between the European Parliament and members of the national parliaments.

It worries me is that the opposition parties are being wrong footed by allowing the debate to become a debate between, on the one side the Mr Tebbit's of this world, and the other side the deeply flawed Treaty of Maastricht. We're pushing ourselves into a position where we have to defend Maastricht against the Tebbit's when we should be saying that we have to create a democratic structure which is neither Tebbit's looking backwards nor Maastricht's flawed attempt to walk forwards.

Secondly, there is a certain kind of inevitability, not alas in European cooperation, but in the development of economic structures that go beyond the nation state. I was a member of the government in 1976 in the battle to stop the International Monetary Fund requiring us to cut our public expenditure by 5 billion pounds. I was a member of the government that finally managed to get one and a half billions off that 5 billion, but couldn't escape the three and a half billion, couldn't escape a whole set of requirements about our future economic policy. National sovereignty become a bad joke.

We have seen under the Conservative regime how much sovereignty Parliament exercised over Mrs Thatcher's decision to allow planes to fly from Britain to bomb Libya. We have to have the courage to recognise that national sovereignty, in a world where the problems are becoming overwhelmingly regional and in some cases global, isn't going to be enough. That's why I think there is an inevitability.

Where there isn't an inevitability is in the outcome of that process being cooperation. The outcome of the process could be an abandonment of political processes to the jungle of an unrestrained free market. That's why I think European cooperation is the answer. The Conservative Thatcherites refuse to accept any limitation on the operation of the free market in its most savage form. I believe that there can be political structures that can control it effectively and democratically in any way.

Carol Tongue: Thank you very much Shirley. I'd now like to ask Graham Mather for his comments and then ask Shirley for a quick response. Graham is president of the European Policy Forum, which is a non partisan combination of discussion forum, channel for educational contacts and think tank looking for decentralisation and market related solutions. Graham was formally general director of the Institute of Economic Affairs and head of the Institute of Directors Policy Unit, Graham.

Graham Mather: Thank you very much, and can I join with colleagues in saying what a pleasure it is to be on a Charter 88 platform with a right of centre perspective.

My first point concerns centralisation. It is a serious problem that, in the attempt to achieve a measure of improved economic efficiency and delivery of customer services, the 1980's saw significant further centralisation of the British constitutional structure. I certainly don't think that was the intent, although I remember once having to justify some Thatcherite changes by saying that Mrs Thatcher was centralising in order to decentralise in a dialectical process. The outcome never quite delivered in the way we'd expected. I think though that in correcting managerial underperformance it was probably necessary to establish new institutional structures, the only problem was we hadn't given enough thought to the accountability element which even now we are struggling with in various opt-out institutions.

This leads to a second point which Shirley raised. I don't think that on the Right there is a huge preference for economic man rather than citizen or accountability man or woman. The problem is that the Right just doesn't think in constitutional terms very often. The problem is not that constitutionalism is terrifyingly dull but rather it's just terrifying when you don't think about it, and events like the Danish referendum lead to crises which are going to affect every part of our political economy. At the moment it appears that the Right is running around 18 months behind the debate, but some of us are struggling to catch up.

Now let me turn to the lessons this brings for Europe. My vision of a more sophisticated constitutional mechanism for the European Community differs slightly from that which Shirley set out. Shirley was really offering a further advance to political union, an advance to remedy some of the gaps in the structures, a perfectly logical and consistent advance but one which I think runs into the difficulty Tony Blair sets out; that we aren't entirely sure however much we talk about accountability, that the public are behind us on that. And therefore I would like to offer an alternative model very tentatively and to say that even if we do advance in the direction Shirley suggests, I'm not sure we would have given Europe a proper constitution.

European structures still lack the most elementary concepts of separation of powers and checks and balances which you'd expect to see in a national constitutional framework. In this constitutional convention we not only need to see more openness in the procedures of the Council of Ministers and more formal links between the national parliaments and the European Parliament, but to go deeper than that. Looking at three particular aspects.

First, the role of the European Commission itself. I don't see how it can continue to combine the roles of initiator of legislation, regulator, and enforcement agency, in one single body. We must disaggregate some of those powers and if President Delors is beginning to discuss that we must help him in that discussion.

Second, a clarification of the role of the Council of Ministers itself. I don't think that it is narrow nationalism to say that when the Danish referendum came up there was a gap in leadership from the Council of Ministers. It doesn't seem to have an adequate secretariat, adequate support systems and the initiative defaults to the Commission, so lets have a look at that too.

Thirdly and finally, the establishment of a workable distinction in those roles of national parliament and European Parliament. We need to establish a division of functions (I agree with the focus on audit scrutiny and review of the Commission's work which I thought I heard Shirley Williams argue for) from the point of view of the European Parliament. I would draw a line there and would look for different structures to help in the discussion of proposed legislation, the review of legislative effectiveness and in the building of that democratic support for the work of the Council of Ministers and for the work of the whole institution. So I think there is a right of centre model for European constitutional development I think we need to see it desperately and it is not wholly divorced from the that vision Shirley set out.

Shirley Williams: A couple of comments. I like Graham Mather's Orwellian description of centralising to decentralise. I think it is interesting that the government leapt to the institutional structure of rate-capping (in other words of close control by Whitehall) rather than the structure of a change of the voting system of local elections which would certainly have acted as a major curb on the irresponsibility of what was a small handful of extremist controlled councils, both left and right. When you look back at the long history of the way in which antipathy was developed towards local government it's amazing what a small group of local authorities brought about. To destroy local government to a great extent for that reason seems to me to be a wholly disproportionate reaction.

On what Graham said about the Commission. I think it is true that the Commission has become a kind of maid of all work, a sort of wastepaper basket of a constitutional kind, where what the European Parliament hasn't the power to do, and what the Council of Ministers hasn't got the inclination to do, falls on the Commission. Because the Commission's powers of implementation run far behind its powers of proposal not only do you get rather messy structures but you also get a growing scepticism about whether the laws and directives of the Community are actually carried out in practice.

But we keep coming back to this issue of what is the proper division of the functions of accountability between the national parliaments and the European Parliament. How can we get away from what has been a sterile dialogue between the two and a sterile dialogue through which the Commission and the Council have got away with. So in a sense it's back to Tony and Caroline.

Carol Tongue: Lets begin to answer the questions from the audience

Tony Blair: There is very little proper discussion in the UK parliament of the decisions that are made either by the Council of Ministers or the Commission's own work. There are large parts of European legislation that come to Parliament and will be ratified in some way without debate really taking place on either side of the House of Commons. Changing this is probably the single most important thing that we need to do from our own perspective as MPs.

As for the issue of true federalism from my perspective as someone who is pro European I don't get a tremendous feeling even from my parties policy documents of having a clear model of what a more democratic Europe looks like. People raised earlier this question of the European Parliament and, with all due deference to Carol, I think there would have to be a much greater awareness of the European Parliament, of what it does, and a much greater sense of linkage between ordinary people and the European Parliament before it going to become an institution capable of a conductor of democratic will, because it isn't.

You may say that if you gave the European Parliament more power then that would become so. If such an assertion turns out to be wrong it would be rather unfortunate. This is where people from a pro-Europe perspective really have to do some waking up. I think the Danish vote crystallised what was previously a sort of recurring view that Europe had moved ahead a very great rate and people didn't really grasp the significance of this.

While some economic processes are inevitable, far too much made of the moves towards greater European cooperation as simply inevitable. And this is what people have called a halt to. Inevitably there is now going to be a fairly deep pause for thought and I think we should use it to argue for a proper, new and democratic agenda in Europe. If we can't get this right and get some flesh on the bones we will find it difficult to persuade people on the next stage.

There is an extra dimension to this debate; East European countries are wanting to come into European now. This will to be used by those who dislike the entire process to say "right lets put it all on hold". These are big questions and it's rather alarming to find that it is only now, after Maastricht we are really coming to terms with them.

Graham Mather: We suffer from a lamentable lack of confidence in exporting ideas into the Euro institutions. When I look at Labour in its recent repositioning it was prepared to take anything the Commission said and sign at the bottom to show its new Euro credentials. Federalists on the Conservative side have also seemed to assume that ideas are dreamt up by teams of lawyers.

There are ideas which we have in our national economy which we ought to inject into the European system. The lobbies do it for the vested interests in Brussels very well. But the people with ideas the people with policy proposals just aren't there. Perhaps the next Charter 88 Sovereignty lectures ought to be in Brussels. We have found in our new think tank that there is very little competition there for ideas offered with intellectual honesty into the system. The reaction to new ideas is very favourable.

Shirley Williams: A couple of comments. First I think that the European Parliament is hamstrung and deliberately so by the fact that it has to funnel between Luxemburg, Strasbourg and Brussels. This is absolutely crazy. The whole idea of a Parliament which moves around all the time carrying large vanloads of typewriters, word processors, secretaries, no doubt blue paper, God knows what else shows that people are not treating the European Parliament seriously. Second, as Graham says, people find it difficult to get to Strasbourg. If you want to do a bit of lobbying and you haven't got a major business behind you it is expensive, difficult, slow, complex and can put you off. Then there is very little attempt by national parliaments to provide some kind of platform for their European parliamentarians. So let me come up with five practical suggestions.

First, if not within the House of Commons then in some suitable venue outside it, like Westminster Central Hall, the Labour Party might care to invite and the Liberal Democrats MEP's and their own MP's to come and discuss Maastricht. How about a meeting open to the public at which they would discuss the way they see what lies beyond Maastricht, seize the democratic issue by issue by the forelock, don't wait for the government to do what it isn't going to do.

Number two suggestion is too radical to even be considered. But how about the House of Commons once a month allowing its committee rooms (one for Labour, one for Conservative, one for Liberal Democrats) to be possessed by a mixture of MEP's or MEP candidates and MP's to discuss issues - because all sorts of issues fall across the national and European line.

Number three, MEP's in my view should be given complete freedom to move all around the House of Commons with the exception of the Chamber and, dare I say, twice a year should be invited into the Chamber to debate the annual report of the European Parliament.

Four: At party conferences there should be a day on Europe at which MEP's are invited to speak rather than sitting in silence.

Five: We also ought to consider seriously holding regular assizes whenever there is a major issue which comes up for the Community at which the national parliaments meet together with the European Parliament in order to discuss whether they think it is right to move ahead

A final point for Graham is that the European Community has been fundamentally business led. The extraordinary secrecy of business in Britain about its accounts, about what it is doing makes it more difficult for the British public to understand what is going on with the Single Market than it is to understand what is going on in the House of Commons. Not because they're stupid but because a great deal of the underlying structure is a business structure and closed to them. Therefore the corporate openness to which Gordon Brown referred to in his Sovereignty Lecture also a prerequisite of openness in the European Community.

Graham Mather: I am nervous about getting bogged down, in renegotiating Maastricht, in having protocols, in having declarations, in adopting a legal solution. The problem is much bigger than a legalistic solution. We have got to get back to the political reality of what people would like to see Community institutions do and establish that clearly through as much democratic discussion and accountability as possible, and then reinvent the legal forms. Once we've got a political angle right then legalisms can follow. But we haven't got there yet and therefore a healthy agnosticism is in order.

Carole Tongue:There are questions about a referendum.

Tony Blair:I think that what is essential now is that there is a debate about Maastricht.

The demand for a referendum is an expression of frustration at feeling locked out of debate people feel is immensely important. What I would say to you is that I am not clear myself that a referendum is the only way to deal with that. In my own mind I don't totally separate the political and the economic aspects of this process. They are very closely linked and one of the reasons why Labour's attack on Maastricht in relation to the social chapter goes broader than simply a desire to welcome employment rights. The European Community has one concept which is very much supported by the Thatcherite Right which is simply the free market and nothing else. But there is an alternative concept to European cooperation which is much more about the people within Europe as well the market for business.

Now I don't think that the debate about democracy can proceed accurately unless it proceeds in tandem with the debate about how you ensure that the economic process of integration runs along much more democratic lines and has within it the idea of basic social justice without which I think the notion of the Single European Market for business will affront many people. They will not only feel not merely excluded from that process but positively hostile to it unless the political and economic sides come together.

Carol Tongue: So, you are saying a democratic debate but not a referendum.

Tony Blair: Yes, it depends very much on what happens now over the coming months. I think it would be pretty stupid to sit here and say that there is no question of that happening at all or that there may not come a time when it is right actually to support. But the important thing is to have a proper debate about Maastricht. I don't believe that this must necessarily happen through a referendum but I unless you give people something to bite on now, then people will coalesce around the view that if we haven't had a referendum we haven't had a democratic debate. I don't believe that that is right myself, and there are tremendous problems with putting this debate within the context of a referendum, but I believe very emly that without proper debate we can't take the European process further.

Shirley Williams:Let us be clear with what Tony Blair has been saying. There should be a democratic debate, right. A democratic debate with no point becomes a circular set of discussions which don't get anywhere. So, what is the point? One possible point might be a referendum. But a referendum at best will either reject or accept Maastricht. The problem lies with Maastricht. If it is rejected the process could start to unravel. If it is accepted we bolt in to place what we have all agreed is an inadequate document.

It isn't a bad document but an inadequate one. My whole case is that the argument for having the democratic debate should have a point, and that point should be to see what the relationship between national and European Parliaments should be in terms of creating a system of accountability with the purpose of ultimately producing another chapter to the Treaty. That would give it point and purpose and after that process it could be put in a referendum. I would plead with Tony and Graham that to have a referendum on a flawed treaty which then means that governments turn round and say we have had a referendum - it's been accepted, we have no further obligation - would be to set in concrete a profoundly undemocratic structure and I am frightened of that. But I am equally frightened of unravelling it and that is why I would plea for this different approach.

Tony Blair: What you are really saying is that it is a false choice.

Shirley Williams: It is a false choice. It is a dangerous choice.

Graham Mather: I am a little confused though about this constitutional entanglement between limited companies, the corporate government argument, the unconstrained free market which appears as a nightmlare throughout our discussion and Tony's concern about the economic engine and whether that is leading politics or vice versa. It seems that we have got to be very clear about this. Limited companies are not constitutional creatures in the political economy, they are money making machines which bring together a number of interests, of suppliers and customers and other participators in their activity. I don't think we should try to let the governments of a country, let alone of a community, rest on those rather narrow shoulders.

The check to the economic adventurism of some of the wilder schemes for EMU actually came in a very good constitutional sense. It came from amongst others from the Bundesbank which has an effective federal constitution. The federal and provincial Landesbank said we are not going to accept this; it is contrary to our own statutes as a Bundesbank, it's contrary to the German federal constitution. So I think the slowing of that pace in proper public constitutionalism public law writ large is what I'm in favour of.

The benefit of having a free market and a fully functioning market system is that once you've got them then you can say that you need a very tough, correct, detailed, written constitution which mirrors them on the public scale. So, I don't see any problem in those two interacting but I draw a very sharp distinction as I've tried to describe.

Carol Tongue:Now I'll ask you to sum up by responding to this last question: "At the end of the Cold War the European vision seems to be slipping. Should Charter 88 take on the task of reviving this vision in the UK?"

Shirley Williams: No I think Charter 88 should not attempt to revive the European ideal. It needs to be done but Charter 88 has another and very important function which is making sure that we have democratic, open constitutional practices in this country. It would be a mistake therefore for them to take a clear and one-sided position on the European issue. Having said that, in my view the scale of disintegration in Eastern Europe and beyond it in the former Soviet Union is such that we really have as a country to stop believing that we are in some way not connected with the current processes of history and, seeing that, realise that the Community for all its faults is the one solid structure we have got in Europe and we had better not destroy it.

Tony Blair: I don't know that Charter 88 should undertake this. I rather agree with Shirley as to Charter 88's role. That is why I was so pleased to take part in this series of lectures, which integrate the notion of constitutional change and a more democratic structure for our society into our politics. So that our constitution is not actually a fringe issue any more but is central to the whole process of political life. I think we have been very slow to take this on board but we are doing so now. But I do believe there is tremendous job to be done in reawakening support for what I would call the ideals of European cooperation. There are tremendous pressures now to roll back this process altogether. I don't think we should underestimate the strength of the Thatcherite Right in allying two things together. One, which is a sort of dislike of what is perceived as European bureaucracy, and the other is actually a rather old fashioned nationalism. I think that type of nationalism is destructive and we should attempt to oppose it, but we can only oppose it if we set out a vision of Europe that is democratic,

Graham Mather:I'd like to see Charter 88 develop a fully fledged European subsiduary. I believe constitutionalism is terribly important. There isn't enough discussion going on in the Community and I think we shouldn't be bashful, and so in line with what I said earlier Charter 88 really ought to get in there and do for Brussells what it is trying to do for Britain.

Carol Tongue: I'd like to say a very big thank you to all of you for coming. As a Euro MP I would like to take this opportunity to thank you especially for an evening in London that I can report on with pride to my colleagues in the European Parliament.