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European Affairs

My hon. Friend is absolutely right. McDougal’s report about 30 years ago pointed out that without the capacity for major fiscal transfers between member states, it would be impossible to run a single currency. A single tax and benefits system allowing standard benefit and tax rates throughout the system would not, in the end, work, and there are those who think that, in the end, the eurozone will fail for that reason. A few weeks ago, the danger arose that citizens of our country would be able to buy alcoholic drinks on the internet without paying the duties and taxes that are due here. No doubt that would have been tremendously attractive to heavy drinkers, but it would have caused mayhem. It would have destroyed the alcohol licence and retail trades in Britain—and at a time when we are grappling with the problem of excessive drinking among young people and the binge-drink culture, an ocean of rock-bottom-cheap alcohol would have suddenly flooded the country. It would have been a nightmare. Interestingly, however, the European Union backed off. It did not press its case. There must have been some pretty heavy lobbying behind the scenes by the Treasury, and rightly so. I assume that the Treasury said, ““If you do that, the European Union will be in serious trouble with us””, and as a result the EU backed off from the mad idea of allowing people to buy cheap drinks in Latvia. I believe that Latvia was the country that would have benefited: it was to be the warehouse providing cheap drinks for the British—indeed, for the whole of Europe. It is significant that when a point is reached at which the European Union might be seriously damaged—might start to fall apart because it has done something utterly and totally daft—it backs off. It has backed off over this issue, and I hope that it will continue to do so when the daftest ideas arise. I certainly hope it will do so when it comes to pressing the case for the European constitution and forcing countries to join the eurozone, because that would cause serious difficulty for Britain and many other countries. I support my right hon. Friend the Foreign Secretary and her Minister for Europe in their negotiations. I hope that they will adopt the position they have adopted in the past and will represent Britain and our view effectively in Europe next week.