Sir Michael Spicer MP welcomed participants to the Fifth Congress for Democracy and introduced Austin Mitchell MP, Co-Chairman of the Congress, Deputy Chairman of the Labour Euro-Safeguards Campaign and Member of Parliament for Great Grimsby, who was to be Chairman for the first two sessions.

Austin Mitchell thanked Sir Michael and explained that in the first session Congress was going to look primarily at the economic disadvantages of the euro and its consequences.

He then introduced the first speaker, Simon Wolfson, Managing Director of Next plc.

Simon Wolfson, Managing Director of Next plc  (Full text available here)

Simon Wolfson explained that he was against EMU not just because it was politically unacceptable but because in his view it was economically ill-conceived.

Interest rates were the main lever which government, including the Central Bank, used to smooth the cycle and manage our economy. When a modern economy began to boom, interest rates had to be raised in order to curb inflation, and when things looked as though they were getting tough, interest rates had to be lowered in order to stave off recession. The United Kingdom was particularly sensitive to interest rates: 11% of our national income was spent paying off mortgage rates, compared to about 3% in Germany. One currency for Europe meant one rate of interest for Europe. As long as the economies of Europe were moving in and out of recession at different times, it was clearly not possible to use interest rates to manage the economy of Europe.

Simon Wolfson posed the question that when one economy was doing well (for example Ireland) and another not so well (say Germany, where unemployment was more than 8%) should interest rates be raised to contain inflation in the booming economy or lowered to alleviate the problems of the slower economy? The EU responded by fixing interest rates somewhere in the middle. This neither curbed inflation in the booming economy nor alleviated recession in the slow economy. This was illustrated by the fact that when Ireland joined the EMU inflation in that country was running at 2%. Barely two years later it was now running at 6%. House prices in Dublin for two years consecutively had gone up by more than 30%.

Despite having said it was essential that economies should converge before they joined, those people who encouraged us to join EMU had made no provision for the fact that the very system they were putting in was going to make economies diverge. Economic and Monetary Union would push them further apart. Having insisted on convergence beforehand, there was no discussion of divergence afterwards.

The proponents of EMU did not address the interest rate issue or the divergence issue. They said claimed that because a single currency worked in the United States, there was no reason why it should not be successful in the EU, with its similar size of population. This ignored the fact that America had two of the cornerstones of a stable economic and monetary bloc which Britain in Europe did not have: mobility of labour and a strong, central, co-ordinated federal taxation system. In America 7% of the population moved across state boundaries every year to find work and in this way, where there was recession in one area and another area doing well, people moved from the cold economies to the hot economies. This could not happen in Europe because without a single language it was very hard to have mobility of labour. Traditionally stable economic blocs had also been single linguistic blocs.

If we were to have a single monetary system we would need a single taxation system. Politicians in Britain ignored the fact that to alleviate the problems and to manage an economy there needed to be close co-ordination between the people who were running interest rates, the Central Bank, and the people who were running taxation policy, the politicians. In Britain, the Central Bank and the Chancellor worked hand in hand, and in America, the Central Bank and their Treasury worked hand in hand. What would be left of importance for a democratically elected government if it had no influence over interest rates, and taxation was controlled by another central body?

A single currency meant a single interest rate, but a single interest rate without mobility of labour was bound to be inefficient. A single currency would inevitably lead to the need for a single taxation policy, and we would be asked to trade our political freedom, our political independence, for economic inefficiency. We must oppose this.

He felt it was essential that those who were against EMU not only opposed the politics but also countered the propaganda put about by government that somehow it was good for business. The issue that was constantly raised was that a single currency would lead to a boom in trade. At the moment trade between Britain and Europe was growing. It had grown for the last twenty years without a single currency.

Those transacting substantial business overseas knew that there were no currency risks when trading in the short term overseas because contracts of less than two years could be covered forward using the currency markets. Equally, in the long term the risks of having a fixed exchange rate were actually greater than the risks of having a floating exchange rate. For example, if inflation in Ireland was running at 6%, and in Germany at less than 2%, and exchange rates were fixed, then clearly something that was the same price today would be 40% more expensive in Dublin in ten years time in Ireland if the differential continued. A floating exchange rate which offset imbalances between countries with different rates of inflation was actually a very important way of maintaining price stability.

In summarising, Simon Wolfson said that a single rate of interest for Europe would not work economically. The perceived benefits of boosting trade were vastly overstated and the problems of a fixed exchange rate completely ignored. There were those who argued that somehow EMU was inevitable. It was not inevitable in this country because we were going to have a vote, and his view was that we should vote against.

Austin Mitchell thanked Simon Wolfson for his clear, sustained analysis from a business point of view and introduced the next speaker, Larry Elliott, Economics Editor of the Guardian, who would give his views as an economist.

Larry Elliott, Economics Editor of the Guardian  (Full text available here)

Larry Elliott wanted to put the Left's case for being anti-euro, because despite those who said that only people on the Right were opposed to monetary union, for a long time there had been deep scepticism on the Left about monetary union. This only changed in about the late 1980s. He felt that the Left lost its confidence and thought that the way to oppose Mrs Thatcher was to be pro-monetary union, pro-EU. He then gave some reasons why he thought the Left should be against monetary union.

Firstly, the case for jobs: As an economist he felt that a one-size-fits-all economic policy was going to be destructive of both jobs and prosperity. Ten years ago, when Britain was in the ERM, our exchange rate was locked to the Deutschemark at a time when the German economy was booming and our economy was deep in recession. The consequence was that unemployment doubled, there were record numbers of people thrown out of their homes, and record numbers of businesses went bankrupt. It was disastrous for some businesses, which saw their profits slashed and laid off large numbers of people.

The second reason was that having a flexible exchange rate was an essential tool of economic policy, a way of adjusting the economy to changes in economic circumstances. There were only three forms of adjustment left if countries could not use their exchange rate. The first was labour mobility, which was not realistic in a Europe made up of so many different languages, cultures and traditions. The second way would be to have a big increase in the European budget and to move resources from one part of the Union to the other - again, not particularly feasible unless we were prepared to accept a centralised tax system. The third way - and probably the only way - would be for workers in a depressed region to say they would take a pay cut and make themselves more competitive and price themselves back into jobs. In the absence of any of those mechanisms, the adjustment would be through higher unemployment and depression.

Monetary union could make prices more transparent and make it less expensive for some businesses to transact, but these were reasons which benefited only a small number of multinational corporations. The argument that the Europe we were creating should be made safe for multinational corporations was not a good right wing or free market reason for monetary union.

He said that many of the arguments used for monetary union were out of date. There was something of Cold War paranoia from the 1950s behind the monetary union argument. In the 1960s there was a "big is beautiful" belief, in the 1970s it was anti-inflation fears and in the 1980s there was an envy of how well the German economy was doing. None of these arguments are relevant today.

Monetary union should be resisted because the European Central Bank was unaccountable and had a built-in deflationary bias. The Left in Britain was opposed to the idea that power should be used unaccountably. The European Central Bank was profoundly undemocratic. We did not have any say over who was appointed to the Council, the minutes of the meetings were kept secret for sixteen years and there was lip-service paid towards accountability to the European Parliament. It was forbidden in the Maastricht Treaty for governments to lobby on behalf of its own people or to try to influence ECB policy in any way. The result was that it had a deflationary bias. The ECB's objective was to keep inflation below 2% and this was going to cost jobs.

This issue was really about more than economics. Monetary union could not work without political union and every monetary union until now had either collapsed or led to fully-fledged political union. Those in favour of monetary union knew that after four or five years of monetary union the EU would say that they could not work properly without fiscal union and eventually not without fully-fledged political union. He felt that most ordinary people in Britain opposed that.

Larry Wolfson felt that the argument that the men in Whitehall, Frankfurt or Brussels knew best was arrogant and those from the Left should deem it unacceptable. The whole history of the Left had been to spread the vote, to get people closer to power and this seemed to him to be sucking power away from people.

His final point was that patriotism was not the exclusive prerogative of the Right. There was still a sense that the intellectual elite in Britain loathed their own country and they thought we must join EMU because it was European and therefore must be much better than anything we had to offer. In response to that he said that for the last five centuries Britain had opposed the centralisation of power in Europe and that there was a desire to be left alone to do as we pleased. We did not like the idea that people should be telling us what to do. This strand of thinking was crucial to the rise of the Left and to most of the social and fiscal movements of the past century and a half.

He thought there was a deep pride in the British traditions of tolerance, moderation, democracy and the rule of law. It was thought to be very politically incorrect to say that many of the countries who make up the European Union did not have a particularly long record in some of these areas, but it was a fact.

To sum up, he did not think monetary union worked. It was inflexible and deflationary. It favoured the interest of big business over individuals and small businessmen and was a stepping stone to fully-fledged political union. He was proud to be fighting with people on both Left and Right to prevent this happening.

Austin Mitchell thanked Larry Elliott for his excellent speech and invited contributions from the floor.

Lord Shore of Stepney, Chairman, Labour Euro-Safeguards Campaign and Committee member, Congress for Democracy, endorsed what he had heard in the two excellent speeches that morning. Although he was persuaded of the adverse economic effects of joining a single currency, it was nevertheless a political argument and the loss of democracy and national independence was by far the most potent argument against. About 70% of the British people in the last BBC reported poll were opposed to Britain joining the single currency. He asked what was the use of having a currency of our own if we believed we could influence macro-economic policy by using the exchange rate and interest rates, when nobody challenged the Chancellor when he said that if we did anything to lower interest rates to assist our own exports and competitiveness it would at once unleash all the horrors of inflation. Unless we used our economic freedom, more people would think that we might be more competitive and better off in a single currency.

Robert McCartney QC, MP, Leader of the UK Unionist Party, said that the UK Unionist Party was very much in support of the work of Congress. However, he was concerned when reading the Declaration and listening to the speakers that morning that these arguments were not advanced to oppose both past and present governments in their efforts to weld part of the United Kingdom into a united Ireland. Ireland represented 1% of the EU budget but had been given disproportionate leeway in order to keep it on board politically. Its inflation was currently running in excess of 6%, and it had received a mild reprimand from the Commission about this and its fiscal policies. This was an example that "one size fits all" was total nonsense. On the argument of the inevitability of further European union, this exact argument was being advanced in Northern Ireland. Congress should take note that if it wanted to defend freedom on the borders with Europe, then it must start defending the United Kingdom within the United Kingdom itself.

John Mills, Secretary, Labour Euro-Safeguards Campaign commented on Larry Elliott's persuasive case for opposition to the single currency and added that we were not starting from a position of no experience of what fixed currencies have done in Europe. There have been two major periods when the currencies were locked together - the Snake in the1970s-1980s and the ERM in the 1980s-1990s. In both cases there was a massive reduction in the growth rate in Europe from 5-6% to almost 0%, which was why these monetary unions broke up. The arguments that were used for establishing these currency arrangements in the past were the same arguments that were being used now. The effect of locking currencies together and the resulting enormous reduction in the growth rates was a huge increase in unemployment and inequality in Europe. The rich found their standards of living rising during these periods by 3 - 5% but most people found their standards of living either stagnating or declining.

Christopher Gill, MP, European Research Group and Chairman, Freedom Association said that one argument frequently used in favour of joining the single currency was the amount of trade that this country did with the rest of the EU; figures varied from 50 to 60%. One of the most compelling arguments to answer this point was that our trade with European Union, although important, represented less than 12% of this country's GDP. He believed that the proposition that we should abandon our national currency for 12% of our GDP represented by trade with Europe was absurd, as the 88% of GDP transacted in other currencies would receive no benefit from going into the euro.

John Townend, MP,  said that we were not suffering from a high pound but from a weak euro. He also said that if we went into the euro now we would have to go in at approximately the current rate of the pound and the pound would be locked for evermore at that uncompetitive rate. We had to convince people that there were advantages in our controlling our own interest rate. Currently the Chancellor laid down the guidelines for inflation and if he did not use that power we should attack him.

John Walker, Federation of Small Businesses felt Congress should address some of the questions that were likely to be asked during a Referendum. The first was the question of political and economic and monetary union. If the United Kingdom was the political and economic and monetary union of England, Wales, Scotland and Northern Ireland with a single currency called sterling and single tax policy from Westminster, how could a wider EU have all those things? People from the North East felt that interest rates were too high and were set for the South East, demonstrating how the political and economic and monetary union of the United Kingdom was strained already, let alone in a community with some 300 million people. The question of jobs and the future economic prospects of the UK were going to be the principal points put by the pro euro argument. In 1973/75 we were told that entry into the EEC was to do with jobs, and the Government would push the same arguments again. The Swedes voted Yes to joining the European Union by 52% to 48% and he thought the Volvo factor and the jobs question swung that vote. The Government would have an information programme as well as a "Yes" campaign. Also, those who were in favour of keeping the pound would be told that they were anti-European.

Lord Stoddart of Swindon, Chairman of Campaign for an Independent Britain and Anti-Maastricht Alliance, and Committee member, Congress for Democracy picked up on what Larry Elliott said on the political aspects of the euro and the EU. Those opposed to EMU and further integration were incorrectly labelled as being on the extreme right wing. This issue transcended party politics and was about who governed Britain and if we went into EMU and accepted the Nice Treaty and subsequent treaties, Britain would no longer govern herself. We must work together, whatever our political views, to prevent the European superstate from becoming a reality. He felt there was no alternative to self government by democratic institutions and democratically-elected representatives.

Austin Mitchell then invited the two speakers to sum up.

Simon Wolfson firstly pointed out the three broken promises, from before the euro was launched. The first was that we were told that if Britain didn't join, foreign investment would decline to nothing and would all rush into Europe. Exactly the opposite had happened and investment had haemorrhaged out of Europe and flooded into Britain. We were told that there would not be calls for a federal taxation system and yet every day we read about German and French politicians calling for more and more tax harmonisation in Europe. Finally, we were promised that the euro, because it was big, would be stable. Yet it had lost 25% of its value against the dollar and was one of the most volatile currencies in the western world. It was big, but not clever.

Larry Elliott agreed with Lord Shore that we should follow more expansionary macro-economic policies if we wished. Inflation had been below its target for about two years and was now substantially below its target. The inevitable consequence of that was that rates should be much lower than they were and this would bring down the value of the pound and help jobs. When Labour drew up its manifesto in 1973 it was opposed to monetary union on the basis that it would cost jobs. At that point there were fewer than 3 million unemployed in the whole of Europe but by the time the single currency was up and running in 1999 there were more than that in Germany alone. He agreed that no-one talked about the small retailer who would have to change his tills, nor the very many firms and manufacturers who did not export and for whom monetary union was going to be at a massive cost with no discernible benefit. He agreed that the euro was weak partly because there was no real confidence in it and he concurred that the main reason for the strength of sterling lay with the Chancellor. Those in the Labour Party who said Eddie George did not understand what was going on in the North seem to be the strongest supporters of monetary union, although he did not see how Frankfurt would know more about what was going on in the UK than the Bank of England. What Congress needed to do was to take the debate to the supporters of monetary union. Britain had done much better since it left the ERM in 1992, partly because of its monetary and economic independence. Russia had performed incredibly badly and Singapore and Hong Kong had performed remarkably well, proving that big was not necessarily beautiful.

Session 2: The Treaty of Nice

Chairman: Mr Austin Mitchell MP

Austin Mitchell then introduced the session by highlighting how the EU attempted to progress, moving from treaty to treaty, building a type of a nation state with a constitution, an army, a judicial system, and a currency. He welcomed Daniel Hannan MEP and Member of the European Parliament's Justice & Home Affairs Committee and Budgets Committee. He also congratulated Daniel Hannan on having launched an appeal at the last Congress and subsequently raising £150,000 for the Danish No Campaign, which had been so successful.

Daniel Hannan MEP (Full text available here)

Daniel Hannan started by citing quotes from shortly after the Amsterdam Summit and after the ratification of the Maastricht Treaty: "The summit was a triumph for the Prime Minister. "The Treaty marks the defeat of federalism." "It achieved all our objectives." "It's game, set and match to Britain." The same was now said of Nice.

He explained that we were reliant on government spin for all our sources of information during the period of the negotiations. The BBC reported that the Nice Summit was "a triumph". "The Nice Summit was a tremendous personal triumph for Tony Blair who secured those vital objectives of keeping our opt-out in the fields of taxation and social security." The BBC had redefined "victory" in the EU context to mean the maintenance of the status quo, so a "victory" was when one failed to give ground in one area in return for conceding ground in another.

He then gave seven reasons why he believed that the Nice Treaty was immensely important and why he thought we should be preparing our resources to battle against the ratification of the Treaty in Parliament.

Point 1: the European army - called the "European rapid reaction force". Alone, the British government maintained that this was not a threat to NATO, that it was not a separate military force, that it was going to bolster the western alliance. For three years every other European leader had been describing it as a mobile military force of mobile EU personnel answerable to the politico-military structures of the EU - a European army.

Point 2, the European Constitution - referred to as the Charter of Fundamental Rights. There was no need for such a Charter in Europe. We were dealing with fifteen advanced liberal democracies which were already bound by the European Convention on Human Rights, by the UN's Universal Declaration. In every EU country apart from Britain political leaders wanted a European Constitution and they believed the EU could not assume the attributes and trappings of statehood without its own constitution, army, police force, currency, parliament etc. He was concerned that the British government still believed that this was a document with no binding force. However, the Home Affairs Commissioner, Mr Vittorino, had stated that "To verify respect for fundamental rights by the institutions of the Member States when they act under Union law, the Commission therefore thinks it highly likely that the Court of Justice will refer to the Charter when handing down judgements in the future."

Point 3 - the abolition of 39 of our remaining 45 national vetoes, including some important areas to do with regional policy, industrial policy, anti-discrimination initiatives and so on.

Point 4 - Article 7 of the Treaties - (sometimes referred to as the "Haider clause"). This was the mechanism whereby a country which was judged by the other European Member States to be in violation of human rights, as set out in the Treaty of Rome, might have its voting rights and any other privileges derived from EU membership suspended. That decision would not be taken by any judicial body but by a majority vote among the other Member States. This was a mechanism for temporarily disabling the veto of any member country which had the temerity to elect an anti-federalist government.

Daniel Hannan reminded Congress how the EU challenged the general election result in Austria last year. He thought it now feasible to envisage a situation where if one of the Member States was holding up a measure to which all the others were committed, Article 7 could be invoked on the grounds of some form of human rights violations, as a way of disarming that country's veto until the measure were passed.

Point 5 - a new procedure called co-opération renforcée - enhanced co-operation. Up until now, any move towards deeper union by any group of Member States had to be endorsed by all Member States. It involved a change in the Treaties and therefore had to be unanimous. Under the new rules set up at Nice, any sub-group of eight or more Member States would be allowed to push ahead on their own without requiring the permission of the others. This was one of the most important pieces of the Nice Treaty tactically. Up until now it had always been at least theoretically possible that a eurosceptic government either in Britain or in one of the other Member States might have used its national veto as a lever to secure the repatriation of powers from Brussels. That option was now deliberately closed off by this Article, introduced for the specific purpose of preventing a Member State government taking such a negotiating stance. It was now effectively impossible for a Member State to secure any retrieval of power from Brussels while remaining a member of the European Union on current terms.

Point 6 - the Statute for European Political Parties. There was now a proposal that political parties should be formed at transnational level to contest elections on a pan-European party list. In order to qualify for recognition, they would have to be part of a political party spanning different Member States and fighting elections on a common and binding manifesto. The British Conservative Party, for example, would be excluded as it was not a member of any transnational political party. It would therefore fall foul of this rule and not qualify for formal recognition as a party allowed to contest European elections.

There was even a proposal to amend this rule to say that political parties could be disqualified unless they abided by human rights and democratic values as set out in the Treaty of Rome. This was precisely the procedure used in eastern Europe to disqualify opponents of the regime. The Soviet regimes did not ban elections, they simply forbade parties to contest elections if they qualified as bourgeois, anti-revolutionary or fascist, which came to apply to everyone except the party in power. He was not suggesting that we were living in a kind of Stalinist system in Europe, but it did worry him that nobody in the European institutions had spoken out against the principle of what was being proposed.

Point 7 - the step to establish a European criminal justice system. Nice had established a body called Eurojust, which as a first step would bring together Public Prosecutors from the fifteen Member States to deal with transnational crimes such as terrorism, drugs trafficking, counterfeiting, fraud against the EU institutions, Internet crimes and trafficking in human beings. Once the national Public Prosecution Services were welded together into a single unit, the next step was to give that European Public Prosecution Service its own jurisdiction. This meant that it would be possible to be tried not under English or Scottish or French or German law, but for crimes against the EU.

What was envisaged was a US-type two tier system where there was federal law for the major international offences and state law for minor infractions. Once there was a federal law code one needed a federal police force to enforce it, hence Europol which had the right to engage in national policing operations.

He felt sure these seven points justified the need for a referendum and if we were not offered a referendum we should use the next General Election to our best advantage. Exponents of the Nice Treaty maintained Britain was too small to survive on our own and must accept further integration to keep our place at the European table. He pointed out that Britain was the fourth biggest economy in the world, the fourth military power on the planet, one of five members of the UN Security Council, one of the Group of Seven industrialised countries with unparalleled links with the United States, the Commonwealth and the rest of the English-speaking world.

He felt the message from Congress today should be that we did believe in our capacity to survive as an independent people and did not feel the need to adopt inferior legislation simply because others were doing it.

Austin Mitchell thanked Daniel Hannan and introduced Anthony Coughlan, Senior Lecturer Emeritus in Social Policy at Trinity College Dublin and Secretary of the National Platform.

Anthony Coughlan, Senior Lecturer Emeritus in Social Policy at Trinity College, Dublin and Secretary of the National Platform (Full text available here)

Anthony Coughlan said he would speak about aspects of the Treaty of Nice as it might affect the Republic of Ireland.

The Irish government had recently accepted in principle that there would be a referendum on the Treaty of Nice, probably in May or June. The Irish government was very aware that if it did not have a referendum on Nice it would face a challenge in the Irish courts because the Irish constitution provided for citizens to challenge transfers of sovereignty to Brussels. Constitutional challenges ensured that in the Republic, public funds must be spent equally on both sides and there must be equality of coverage on radio and television. Nearly 40% of voters voted No in the 1998 referendum in the Republic on the Treaty of Amsterdam. The government was afraid that if there were to be a referendum on Nice in May or June the No vote would be higher again and the referendum might even be defeated.

The euro had certainly contributed to inflation and recently Ireland had been reprimanded by the European Commission for having an expansionary budget at a time of high inflation. That censure had caused resentment in Dublin that Brussels was interfering by suggesting how the Irish government might conduct its budgetary policy. This was, however, perfectly in line with what could be expected in a monetary union where the European Central Bank and the Commission had key influence on the member states' budgetary policies.

The Irish Republic had benefited very much from a floating exchange rate. The principal single reason for the boom was the fact that the period from 1993 to 1999, (when Ireland joined the eurozone) was the only time in the country's history when the currency had been floated. The Irish growth rate doubled from 3%- 4% in the 1970s and 1980s, to 7%-8% which it had been since 1993. It doubled in the year 1993-94 and experienced the resultant devaluation when Ireland left the ERM and joined the broad band of the 30% rate, giving Ireland a highly competitive exchange rate. The weakness of the euro in the two years since Ireland joined had continued to make the Irish economy extremely competitive. Before leaving the ERM in 1993 the Irish pound was 100p sterling and it was now down to 82p against sterling. That showed the high degree of competitiveness of the Irish currency vis a vis the pound sterling due to their exchange rate during the 1990s and more recently because the euro had been weak. If the dollar were to go down in the coming period and the euro jump up, it might give the coup de grace to the Celtic tiger because they had benefited very much from the recent weakness of the euro.

He explained that Ireland was also preparing for the introduction of the euro currency next January. Already there was a massive advertising campaign and many citizens were becoming uneasy about it .

Another issue that was causing disquiet in the Republic was the growing militarisation of the European Union. The Irish state had not been a member of NATO but the move towards a rapid reaction force, the so-called "European army which is not an army", was causing considerable public disquiet among many citizens. The rapid reaction force, and the raising of expenditure on the Irish defence budget to finance their commitment to provide soldiers for that force, were exciting public disquiet and would figure in the forthcoming referendum campaign.

The National Platform, of which Anthony Coughlan was secretary, sought to provide critical information on these developments to people on every side of the political spectrum, and they would fulfil that role in the referendum campaign. He appealed for solidarity and help for the Irish referendum effort from democrats in Britain.

He pointed out that his group was affiliated to the TEAM information exchange - the European Anti-Maastricht Alliance - which was set up in Copenhagen in 1997 and now encompassed some forty different eurocritical groups in fifteen different countries, with members of all political persuasions, excluding only racists and fascists. TEAM's board was currently considering the setting up of an international EU referendum fund to solicit financial support for the various countries that would be holding referendums on European Union treaties. The first of these would be Ireland, followed by Britain.

He explained how in Malta, where public opinion was predominantly on the No side, as was the Maltese Labour Party, the trade union movement and significant portions of Catholic opinion, there was to be a referendum within a year and he hoped that the international referendum fund set up by TEAM would also solicit and help to channel international support and financial aid to these various countries holding referendums. Brussels was pouring money into places like Malta and it would attempt to do so in Ireland, because the Commission always interfered.

Anthony Coughlan said that if such a fund were set up by TEAM in the near future, he hoped that British democrats and those who felt that this international cause of democracy against Brussels eurofederalism merited support, would do their best to support it financially. He believed that the sum of £150,000-£200,000 would make a huge difference in the Irish referendum campaign. They were part of an international movement defending national democracy.

Austin Mitchell thanked Anthony Coughlan and invited contributions from the floor.

Roger Helmer MEP firstly congratulated Congress on the excellent speakers and offered to help Anthony Coughlan oppose the ratification of the Nice Treaty in Ireland in any way possible. NATO and the US see the European Army as a competitive and potentially destabilising and threatening element in Europe, not as a strengthening of the European pillar of NATO. Mentioning enhanced co-operation, he referred to euro-double-speak, where we heard a lot about "flexibility" in Europe, but Eurocrats used the term "flexibility" interchangeably with the phrase "enhanced co-operation". So in Brussels-speak flexibility was a way of achieving integration faster. All that enhanced co-operation meant was that some people moved faster than others.

Dr Martin Holmes, Bruges Group, pointed out that one potentially extremely damaging aspect of the Nice Treaty was the way in which it was presented as a treaty concerned primarily with enlargement to the East. We had been told that this enlargement to the East would create an inter-governmental Europe and remove the threat of federalism. He believed the Treaty was really about the militarisation of Europe. If it was really about enlargement to the East why had they not tackled the Common Agricultural Policy? There were more farmers in Poland than in the whole of the EU put together and it was not possible to enlarge to the East without abolishing or repatriating the CAP. Many of the people in Central and Eastern Europe were opposed to membership of the EU. Opinion polls showed a growing euroscepticism, and within the EU countries such as France paid lip service to the enlargement. It was misleading to claim that the Nice Treaty did not matter because it was only about enlargement. If we were to wait until the Eastern European countries joined before we thought about withdrawing we would end up in a federal Europe.

Bill Brown, Regional Chairman NE, UK Independence Party asked Daniel Hannan whether he agreed that the UK should withdraw from the European Union completely.

Gerald Howarth MP, European Research Group, referred to Daniel Hannan's mention of Eurojust. We had been lulled into accepting this by being told it was the only way to tackle EU fraud, EU money laundering, trafficking in drugs and people. The real agenda was forming a basis of a European justice system, policed by a European police force. Under the terms of the Treaty it would in fact be possible for foreign police officers to patrol British streets, although the Home Secretary would not permit this. He agreed about the fragility of public hostility to acceptance of the euro and believed we would only need to have a few thousand job losses or three major foreign investors in the UK threatening to remove their investment unless Britain joined the euro, and our case could be seriously undermined. It was vital that we at all times maintained that it was not an economic issue but principally a political issue and if the people of this country wished to defend their independence they must prevent the single currency being adopted because that was the surest and quickest way to a United States of Europe. If there were a referendum on this, the Prime Minister would choose the date and influence the wording of the referendum and he feared that the referendum would not be the free and fair referendum to which we were entitled.

Bernard Moss, Socialist Campaign Group Network opposed the Treaty of Nice and agreed that we should help our Irish comrades, but felt we needed a much more balanced view of what happened at Nice as, while federalism advanced in some areas, there were considerable setbacks to federalism in others. During the negotiations, we saw back-stabbing among the nations; there was no sense of diplomatic morality in the negotiations. It was clear that Europe was deconstructing. Tony Blair deserved credit for throwing a spanner into the system that was putting the veto on the tax harmonisation, which threw a spanner into the federalists' plans. Looking at the compromises reached in Council voting, he pointed out that it raised the threshold of achieving qualified majority and made it much more complicated - it now required 60% of the population as well as 74% of the votes and gave the major countries many more votes. It made it much more difficult to pass federalist legislation. He disagreed that enhanced co-operation was an integrative force; he believed that it provided for "variable geometry", that is, ad hoc arrangements between Member States within the EC. This was destructive of the legal and political unity of Europe and a setback for federalism. He felt Congress should concentrate its efforts against the extremists of integration and should distinguish between our most dangerous enemies and those we could use to help halt the integration project.

Austin Mitchell then asked Anthony Coughlan and Daniel Hannan to sum up.

Anthony Coughlan made a point about enlargement. The applicant countries were expected to take on board some 20,000 directives, rules and regulations - the entire corpus of EEC legislation from 1957 to the present. They were also expected to agree in principle to abolish their national currencies and were being offered no legal optouts. They would not be treated the same as the Danes, the British or the Swedes who were outside the Monetary Union. These countries were confronted with the destruction of their democracy. As these countries realised the implications of taking on board this enormous corpus of legislation that they had no say in making and as they realised that they would have to abolish their currencies, public opinion would begin to change. Many of the Eastern European states were clients or allies of the Russians in former times, but the Russians never expected them to adopt the rouble. But the EU did expect them in principle to agree to accept the euro. Jacques Delors, Joschke Fischer and others have been talking quite recently about a federation for the avant garde (or "Inner Core" as Jacques Delors called it) and a union for everybody else. The legal path to achieving that was the Treaty of Nice because if an inner group of seven or eight were allowed to set up a quasi federation/state with its own constitution, it would confront everyone else with political and economic faits accomplis. That was a major constitutional and legal point. As the peoples of these countries realised the resultant loss of independence they would turn against the project because it was fundamentally anti-democratic.

Daniel Hannan said, in response to Mr Moss's point about taxation, that we seemed to be a constant danger of heralding as a victory something we already have. We were no better off after Nice by virtue of having hung on and not given way in one or two areas. As for the variable geometry point, he said one must not think that this was flexibility, it was the same trap into which we fell with subsidiarity, which had now been on the statute book in Brussels for seven years and not one area of policy had been transferred downwards from the centre to the member states. On the enlargement point, he had dealt with the Estonian application for EU membership. Estonia was a far more free market economy than any of the existing member states of the EU. Estonia had zero tariffs and zero non tariff barriers and no subsidy of industry or agriculture - it was the only state in the Northern Hemisphere that had a completely free market in farming. It had zero corporation tax and as of this year introduced a flat rate income tax of 26%. This post-Soviet country was now being told to recollectivise its agriculture, re-erect its tariffs and reintroduce its subsidies so as to be corporatist enough to qualify for EU membership. In response to the question "Should we be in Europe?" Daniel Hannan felt Britain was physically in Europe but he did not think that meant we should accept every instruction from the EU. He wanted to see a free trade relationship with our allies in Europe buttressed by close inter-governmental co-operation in areas where there was a clear advantage, such as environmental pollution. That did not involve signing up to everything we had currently signed up to such as agriculture and fisheries, and certainly not what was now proposed in Nice and future treaties. He hoped that no member of the Conservative Party was in favour of being part of a federal Europe with its own police force and army. Studying the period of our EU membership from 1 January 1973 to 1 January 2000 and looking at that period as a whole, he explained that Britain had been running an average trade deficit with other member states of £30 million per day. We paid in to the EC budget about £1.3 million per hour. These figures did not suggest that we should go along passively with every new proposal that came out of the EU. He believed we should be an independent country. If the other countries wanted to go ahead we should find a way that we could remain in some form of relationship with them, retain our military alliance, our diplomatic links, our commercial links, but never compromise our own independence and we should never bargain with our democracy.

Austin Mitchell then closed this Session and the Congress adjourned for coffee.

Session 3: Referendum Legislation

Chairman: Sir Michael Spicer MP

Sir Michael Spicer opened this session by explaining that a Constitutional Committee had been set up to monitor the Political Parties, Elections and Referendums Bill under the Chairmanship of Frederick Forsyth. Anthony Ogilvie, Secretary to this committee, was invited to explain what had been done by the Constitutional Sub-Committee.

Anthony Ogilvie LLB, Secretary, Congress for Democracy Sub-Constitutional Committee (Full text available here)

Anthony Ogilvie explained that the legislative framework that was to govern the whole conduct of holding referendums was to come into effect in about two weeks' time - the Political Parties, Elections and Referendums Act 2000.

The Constitutional Committee's main objective was to persuade the government and Parliament that the proposed legislation should ensure a level playing field between the opposing parties involved in any referendum and that the body set up to oversee this process should be both independent and authoritative. Despite all the Committee's efforts, the Act bore a very close resemblance to the Bill the government had wanted from the start. Despite the repeated assurance of Ministers, in the end the government's strength in Parliament ensured that they got the Act they wanted.

There were a number of important issues the Committee identified which give particular concern.

Firstly, the independence of the Electoral Commission itself. At the very least, the committee believed that a senior member of the judiciary should be appointed as its Chairman.

The whole timetable of holding a referendum remained very much in the hands of the government and in particular of the Home Secretary. The Commission may be consulted over its conduct but they would have no real powers.

Anthony Ogilvie pointed out the only significant change from the Bill was in Section 104(2) that "requires that the Commission shall consider the wording of the referendum question itself and publish any comment on the intelligibility of the question". The government had listened to our argument about the fairness of the question and that the question should be not loaded or ambiguous.

There was no reference in the Act to minimum voting thresholds nor to any percentage necessary to achieve democratic legitimacy. As in the Bill the limit on expenditure was £10,000 unless one was a permitted participant - the appointed umbrella organisations, and political parties, whose expenditure was limited to a percentage of their vote received at the previous general election - and any such restriction would be impractical and undesirable. Companies are incorporated in the EU may under Section 54b contribute to a UK referendum campaign! The Committee felt that under this particular piece of legislation significant imbalances in funding would occur.

The government's own role in the run-up to polling day would be restricted only to the last 28 days of any campaign, but the restrictions on publicity were riddled with exemptions. Thus the government could issue press releases, take enquiries from individuals and so on. The Home Secretary of the day would be responsible for introducing any referendum. Any Bill, Statutory Instrument or Regulation was very much a matter for the Home Secretary. However, the Commission was given power to promote under Section 13 "public awareness of the institutions of the European Union".

Sir Michael Spicer then invited any questions specific to Anthony Ogilvie's speech.

Sheila Donaldson, Anti-Common Market League, asked what the Danish question had been at their referendum.

Carl Christian Ebbesen, Danish People's Party replied that the question put to the Danish people was "Does the Danish people want to join the European Monetary Union, the euro? Vote Yes or No." The Danish parliament had said Yes, but the Danish people voted No. A very direct question and very specific to the euro.

Sir Michael Spicer thanked Anthony Ogilvie for his report and for all the hard work he, Frederick Forsyth and the members of the Constitutional Committee had put into its work on referendum legislation.

Session 4: The Declaration for Democracy

Chairman: Sir Michael Spicer MP

Congress then moved on to the discussion of the Declaration for Democracy and welcomed Professor Trevor Hartley, an authority on European Law, who prepared the draft Declaration which was put before the Congress's Agenda Committee.

Professor Trevor Hartley, Professor of Law at the London School of Economics and Member of Congress for Democracy Constitutional Sub-Committee (Full text available here)

Trevor Hartley explained that the last Congress had agreed that a Declaration should be drawn up for consideration this year.

The document now before Congress started off by talking about democracy, saying that democracy involved representative institutions which were genuinely responsive to the will of the people of the country.

One of the problems with the European Union was that it was acquiring more and more powers every year. In a democracy the people ought to control them, and that did not really happen.

The Committee were not against international co-operation but felt that what happened in the EU had gone beyond that. The EU was to a large extent beyond the control of the national parliaments and the Committee did not think the European Parliament was a substitute. The "democratic deficit" could not be solved by giving more power to the European Parliament.

If complete power were to be given to the European Parliament we really would then have a federal European state. Most people simply did not want this. Another problem was that in the European Parliament the delegates from each individual country would not be able to pursue the interests of their own electorate as they would always be outnumbered by those from the other countries.

He went on to remind Congress that Europe was not one nation, but fifteen nations. Each nation should have its own parliament, its own representative institutions, which could somehow give expression to the values and attitudes of its people. The European Parliament would never do that because, as the European Treaties themselves admitted, Europe was made up of many different peoples.

What this Declaration was trying to point out was our objection to the EU from a democratic point of view, how we felt it was not democratic because nobody really controlled the bureaucrats in Europe and that the matter could not be put right by giving more power to the European Parliament. The European Parliament did not allow the peoples of Europe to control or influence what happened in Brussels and Luxembourg.

The six points at the end of the Declaration were things which Congress and Committee felt particularly strongly about.

Point 1 - concerned the limits of Community jurisdiction. The idea of a European Union was that the Union had certain powers and the Member States had certain powers.

The problem was, where was the boundary? The boundary was supposed to be in the Treaties but the European Court - one of the institutions of the EU - decided what the Treaties meant. The Member States gave certain powers to the EU and kept certain powers for themselves and then the Union, through the European Court, took upon itself to interpret those Treaties and decided how power was divided between the EU and national governments.

The European Court's view was that it would not take a literal interpretation of legislation, but would go by the spirit of it and decide what is good for Europe. Their decision was inevitably more power for themselves and the Commission. The Committee believed the limits of Community jurisdiction should not be determined by the EU itself.

Point 2 said that if additional powers were given, the electorate should have a say in that by way of a referendum or other suitable means. It should not be sufficient for the government to sign away more powers.

Point 3 was concerned with the Charter of Fundamental Rights agreed in Nice and the Committee was not happy with that, even if it was not binding. The problem was that the European Court would interpret those rights in accordance with their policy of furthering European integration. They would simply use that as another weapon to change the law of the Member States.

Point 4 - The United Kingdom's national laws had existed for centuries and should be retained. There was a plan to replace our laws with a continental-style code which would be uniform throughout the EU. Obviously it would be based mainly on French and German ideas. If it came about it would not only be the end of English and Scottish Law but probably the end of jury trials as well.

Point 5 - Committee felt that social, economic and environmental reforms should be decided by the national parliaments, local government and other institutions within each country rather than in Brussels.

Point 6 - They also felt that fundamental policy matters like tax, defence, etc should be kept with the Member States. This could involve taking back certain things from Europe.

Sir Michael Spicer thanked Professor Hartley for his explanation and for drafting the Declaration, which had then been discussed and amended by the Agenda Committee. He reminded Congress of the membership of that Committee. He then invited participants who wished to speak, but proposed that at the end of the day a vote should be taken as to whether to accept the Declaration, recording all contributions and amendments. If rejected by Congress it would go back to the Agenda Committee.

John Beveridge QC, a member of the Congress for Democracy's Constitutional Committee, suggested that contributions be divided into general points and specific amendments.

Sir Michael Spicer felt this would be a good way to progress and invited general comments.

Peter Troy, Darlington Federation of Small Businesses agreed that the issues raised in the Declaration were absolutely vital to the interests of small businesses and urged Congress that, once adopted, the Declaration and the issues raised in it should be taken out to the man in the street and to meetings of small businesses. He would be happy to raise this at any further meetings similar to the Northern Congress for Democracy, which was held in the Prime Minister's Sedgefield constituency last year.

Sir Michael Spicer agreed that the meeting jointly run by the FSB and the Congress in Sedgefield had been excellent and hoped that a similar meeting might be held in Scotland in the near future. He also invited any suggestions as to how to arrange further similar meetings.

Lord Vinson of Roddam Dene said that the European dream was predicated on the assumption that our existing democratic systems would hold. Lord Vinson did not think that they would hold as the democratic elastic was being stretched to breaking point. Democracy just worked because currently one voted for one's MP, could go and see him on a Saturday and to some extent still had some effect on the government that governed us. There was one MP to about 65,000 voters but one MEP to about 600,000 voters. An MEP was very difficult to contact, was often in Brussels, and was in fact pretty powerless. By stretching that democratic elastic by a factor of ten it would surely snap. He spoke in general approval of the Declaration and hoped it would help to flag up what was happening to our country and the great problems we were entering into in a system that was so flawed democratically that it could not and would not work.

Martin Harvey, UK Independence Party, reminded participants that at the first Congress the majority of concern had been over the single currency. Since then the continual creeping effect of the EU institutions had pervaded most aspects of our government, our laws, our industry, our commerce. One of the main aspects which was seldom mentioned was regionalisation. This was already happening in England through the so-called Regional Development Agencies. This coupled with the steady transfer of power from Westminster to Brussels by successive governments and successive treaties, had made our Westminster parliament a shadow of its former self. He felt that we were now far too close to a situation where powers were being eroded for the effect of this sort of Declaration to be felt. He felt the general principles regarding democracy in the Declaration were superb but not all of the six points could be implemented within our Parliament as it was at the moment. The only way this could be done was to aggregate all the Treaties of the EU up to this point, i.e. leave the political EU and renegotiate a free trade agreement. He recommended that people at Congress today who really believed in this country should join together and promote the withdrawal of this country from the political side of the European Union.

Sir Michael Spicer then read out the Resolution passed at the last Congress, which said:

Eric Deakins, Labour Euro-Safeguards Campaign, thought that the Declaration should be strengthened if it was to be understood and have the most impact on the people in the street. In the second paragraph on page 2 where it talked about "…an ambition that the United Kingdom and many other European Member States do not share" - we should be talking not about governments but about peoples. Secondly, in the third clause regarding the Charter of Fundamental Rights, Congress had already heard that the Charter was superfluous. As it was written it appeared that we were opposed to fundamental rights altogether, which could be misinterpreted. The document also talked about non-accountable European judges, but there was only one democratic country in the world with accountable judges and that was the United States. The ordinary person did not understand what Common Law meant, as referred to in clause 4, but they did understand about habeas corpus and jury trial. He suggested that mention should be made of those things as being under threat. He felt Clause 6 "National parliaments and people must be the custodians of fundamental policy matters,….. this will necessarily involve the retrieving of powers already granted to the European Union", should be amended to read "…relevant powers granted to the European Union" or it could be taken to mean we wanted to leave the European Union.

Sir Ivan Lawrence QC, a member of the Congress for Democracy's Constitutional Committee, said that people might not understand Common Law, but they did understand the legal system and he did not think people appreciated how the legal system would be changed to conform with Europeanisation. A federal superstate required a uniform legal system. Our government was now abolishing the difference between barristers and solicitors, which would make us more consistent with Europe. Removing the barrister element of our legal system would result in the selection of judges not from barristers but from universities and civil servants, as happened in Europe. Conforming with European legal systems meant abandoning trial by jury. The next step would be to replace lay justices with stipendiaries, now called District Judges Criminal. Once every town and city throughout this country had a criminally qualified judge, it would not be long before the inconsistencies of the Crown Prosecution Service, were replaced by qualified judges guiding the processes of the criminal system at the lower level - this would lead to a move from the adversarial system to the inquisitorial system. We must draw attention to the fact that the legal system was about to be changed from the system we knew into the European system. He felt it was necessary to amend and strengthen the fourth clause of the Declaration.

Dennis Delderfield, National Chairman, New Britain said that it was often said that if we did withdraw from the EU we would be isolated. This ignored the great support we had had in the past and still have today from the Commonwealth. He would like the Declaration to include the words "especially the Commonwealth" when mentioning outside interests. He felt we needed to concentrate on our friends in the Commonwealth. If we came out of the European Union, the Commonwealth would still be there.

Donald Martin, UK Policy Chairman, Federation of Small Businesses wished to make a few points on the position of the Federation of Small Businesses. The FSB was the largest business organisation in the country with over 165,000 members and it was a non party political organisation. As well as transcending party politics, it also included a large number of people who were not involved in party politics. In 1995 the FSB agreed to oppose the United Kingdom becoming part of the single currency. There were economic arguments but the basis on which the FSB rested was fundamentally constitutional. At the same time the FSB agreed it was opposed to the granting of any further powers to any European institution. When the country voted in the Referendum in 1975, it was a vote that the person in the street understood. They did not understand we were in some political ratchet system which would gradually take away our powers. This Declaration needed to explain clearly to the average small businessman and average person in the street the erosion of the powers that had taken place with the treaties from Maastricht onwards. He would also have liked to see mentioned that we wanted to have the power in the United Kingdom to take back the powers we wanted without waiting for the consent of all the other member countries. The only way the politicians at a European level would understand the feelings of the peoples of Europe was if they said they wanted to pull out of it and then it would be a cumulative message. He suggested a general vote should be put to the Congress to ask whether it felt we were moving in the right direction. He felt it would be better to take a little longer, to get it right and to have a document to take to the people at the grass roots, something to be used as a campaigning document. The FSB representatives present at the Congress would be voting as individuals as the document had not been debated at their National Council, but they would take this document and report on this Congress back to their governing body. He said there were a lot of political organisations, party political organisations and organisations of single issues involved. The FSB was not a single issue organisation, and to win this battle we needed the support of organisations that were not single issue organisations who were currently divided on this issue.

Sir Michael Spicer pointed out the very last sentence of the Declaration that said "this will necessarily involve the retrieving of powers already granted to the European Union", which he thought in part answered Donald Martin's question.

Donald Martin agreed that indeed this did partly answer his question, but that it was not strong enough to indicate the direction in which we were going.

Christopher Gill MP, European Research Group and Chairman, Freedom Association. Like the Federation of Small Businesses, the Freedom Association was not a single issue organisation. It would campaign against any threat to freedom. The Association felt that the greatest threat to individual freedom and this country's independence came from the European Union. The Declaration was a very worthy document but in his view it did not go far enough. Firstly it spoke of a democratic deficit. As an MP, he had had very little input and no power over the policy that had been made for agriculture by those who were neither elected nor could be held to account. He felt it was not a question of there being a democratic deficit, but that there was no democracy at all. In Clause 6 of the Declaration was mentioned "… the retrieving of powers…". Daniel Hannan had explained that as a consequence of the enhanced co-operation procedure agreed at Nice, there could be no retrieval of powers. We now found it impossible to repatriate control of agricultural policy. Clause 4 of the Declaration mentioned the United Kingdom's Common Law. Last year when Commissioner Frits Bolkestein addressed a group of Conservative Members of Parliament he was asked about corpus juris and said "you must understand that the people of Europe are demanding that the law is brought back under democratic control". A former Home Secretary rightly explained how if the British people did not like the law their elected representatives had made then they got rid of them at the next election. 46% of the people polled in a recent MORI poll said they wanted to leave the EU and even the BBC yesterday admitted that 31% of the British people wanted to get out. He believed the time had now come to leave the EU because there was no hope of achieving all those other worthy things stated in this document.

Pam Barden, Save our Sovereignty, agreed the Declaration was very good, but it was a compromise between those who did not want the euro but wanted everything else and those who wanted to leave the EU. It was compromise that had brought about our current problems in the European Union. The very people who would decide what powers could be retrieved were the governments of the European nations who were pushing their people in there at the moment. If we cannot retrieve these powers by negotiation, we should withdraw from the EU.

John Beveridge QC commented that nowhere in the Declaration could he find mention of bureaucracy, yet all modern democracies split the power between the elected representative and the static civil service. It was inevitable that in this country and other countries, the Civil Service had a great deal of de facto power, but in theory it all rested with the politicians and in practice it was split. In the EU the politicians not only had very moderate theoretical power, but almost no practical power and the entrenched, enlarging and self-perpetuating Civil Service was overwhelmingly powerful. He felt there should be some recognition in the Declaration of the fact that the structure of the Civil Service in the EU was such that it would be very hard to reform it and at the present moment there was no real democracy except in what remained of the independent nation states. He also felt the Declaration was too diffuse and too long. He suggested that the Committee should appoint one or two people to produce something shorter and more concise.

Iain McGregor, Scotland Against Being Ruled By Europe referred to Clause 4 on the second page - "Any attempt to replace the United Kingdom's Common Law". There was no such thing as the Common Law of the United Kingdom, but a Common Law of England. He suggested Clause 4 should be amended to read "Any attempt to replace the United Kingdom's national laws, a defence of liberty,…". He felt this would cover any objection from Scotland.

Roger Helmer MEP felt this Declaration was generally very good, but he was a little disappointed by Clause 2 where it mentioned the terms under which we might cede more powers to the European institutions, because he thought enough had already been ceded, and he would have liked to have seen more mention of the repatriation of powers. As a Member of the European Parliament he felt qualified to speak about the democratic deficit. He agreed with earlier speakers about the size of constituencies and about democracy being stretched, but felt it was more important to state that the European institutions were not democratic and were not capable of being made democratic. In justifying the proposition that the European project could not be made democratic he called on the authority of John Stuart Mill who, in the 19^th century said that where people speak and read different languages the common public opinion necessary for representative government cannot exist. In the 20^th century Enoch Powell said that a demos required a people who shared enough in common in terms of culture, history, language and economic interest that they were prepared to accept at each others' hands. In the 21^st century Roger Scruton said that language was at the root of the difference between "us" and "them". If a decision were made by our elected parliamentarians in Westminster, he would accept its legitimacy even if he disagreed with it. But if a decision were made by a coalition of Belgians, Portuguese, Greeks, Lithuanians and Croats and one was told to obey that decision, he felt it would have no democratic legitimacy at all. No powers at all should exist at the European trans-national constitutional level and action should be taken in Europe only on an inter-governmental basis and only on the basis of Treaties freely entered into from which nation states and national legislatures may withdraw if they so wished.

Lady Park of Monmouth thought we should produce an extremely short document with an Appendix, but that if it were to be a longer document something should be said about how the Human Rights Act that was now in force was going to quite seriously affect the whole issue of our future legal proceedings. There was a great deal for us to protect, including scrutiny, and we were being deprived by the present arrangements of the ability to scrutinise. In the raft of regulations that passed through Parliament every year which nobody ever really looked at, we were often told there was not time for scrutiny. We needed to insist that our government use the power of scrutiny.

Robert McCartney QC MP, UK Unionist Party endorsed what had been said in that whilst this Declaration encapsulated many aspirations and concepts, it was somewhat bland in its presentation and far too long. All the fundamental documents that have changed democracy in this world had been short and punchy. Worthy though this document was, he felt it did not crystallise the essence of what we wanted and we needed a document which clearly spelt out the fundamental principles of democratic government that we desired. He suggested that the Committee should go back and examine very carefully what were the essential principles that made a European federated state totally incompatible with the principles of democracy for which we contended. Having isolated those principles we should then try and focus them in the most succinct, memorable and fundamental language that the man in the street could understand.

John Townend MP thought this was a good document and agreed that there was need for more simplicity and to eliminate any confusion. In the second clause - "The electorate must have the right to decide by referendum or other suitable means" - "other suitable means" could cause confusion. He agreed that our country would be faced with a decision to either accept a Federal United States of Europe or leave the EU. If we did not do it the correct way we wouldn't carry the people with us. He thought we first needed to renegotiate and lay down what we wanted to retrieve - agriculture, fishing, law - and then when the renegotiations broke down we should go to the public with a referendum, saying that we wanted to take these powers back and ask if they agreed. Then we would have to legislate in the House of Commons (which might be thrown out) but we would have carried the people to the referendum and it would be the European Union who would be seen to be divisive. Our first battle was to defeat the euro because if we did not accept the euro we would never be part of a full federal Europe. If we did accept the euro, we would never get our powers back. Therefore needed in our campaign not only those who were against the European Union and wanted to leave now, but also all those who were frightened of coming out of the European Union, but did not want the euro.

Idris Francis, SANITY (Subjects Against the Nice Treaty) thought the one fundamental aspect of democracy missing from the Declaration was the right of all future generations to make their own decisions. He felt we must make it clear that whatever the people decide can always be overturned at future referendums, whether that applied to the euro or to membership of the EU. The words "irreversible", "irrevocable" and "inevitable" had no place in a democracy. A groupof Peers was to take a petition to the Queen pointing out to her that the Nice Treaty was unconstitutional under Magna Carta and the Bill of Rights and asking her to withhold her Royal Assent from any Bill to ratify the Nice Treaty.

Miss M T Saville said that our army was weak and could not even make a proper contribution to NATO. She felt we firstly needed to get our defence right and then we needed a plain resolution to leave the EU.

Stuart Archbold was a businessman, a member of the Council in Yorkshire of Business with Sterling, and the Vice Chairman of Leeds Chamber of Commerce. Broadly he went along with the Declaration and thought that all the points of detail raised here should be taken into account. It set out a broad campaign which was to halt the tide of integration of federalist policy within Europe. However he thought the first battle to be won was the battle against the euro. There would be an election, probably in May, and six months later there could well be a referendum. Unless we were organised and focused and had the resources and worked with others to fight the campaign, all this would have been for nothing. He thought the main focus of this organisation should be to fight and win that battle. We needed to know the broad direction, which this Declaration gave us, but suggested all the resources of Congress should be focused on winning that first battle.

Derek Bernard said that the residents of Jersey were sad that the United Kingdom seemed to have lost its confidence in its ability to run its own affairs. His fear was that, should Britain collectively lose its nerve and turn into a federal Europe, Jersey would be dragged in. The EU was quite well intentioned, but it was so large and so insensitive that it could not function properly.

Lord Pearson of Rannoch, European Research Group and Chairman of Global Britain had been an enthusiastic "come-outer" from the European Union for quite some time, even from within the Conservative Party. He thought that whatever document emerged from the Congress was going to be something of a compromise. He accepted it might be too long and that the drafting committee should be instructed to produce a précis of this document, which should be much shorter, more bullet pointed and more available for campaigning. There might even be one or two points that come out of this Congress that should go into that précis. However, he felt the document ended with a possible reverse gear in our relationship with the EU. "This will necessarily involve the retrieving of powers already granted to the European Union". To fellow "come-outers" he wished to point out what a big step that was; any form of reverse gear was an anathema for the Labour Party and was definitely not part of any Conservative policy. He thought Congress should not reject this document and take another year to come back with something else, as there was not time. We should précis it and include a few of the points that participants had raised today.

Frederick Forsyth, Chairman, Congress for Democracy Constitutional Committee said that the Agenda Committee had originally received a request to devise a document to define and delineate the nature of democracy. He thought the presumption of today's debate was that our own democracy was inviolate and inviolable, which it was not. It was being continuously and seditiously undermined. Having travelled very widely he had studied other governments and perceived there was a difference between parliamentary democracy and every other known system of government in that parliamentary democracy alone started at the bottom of the pyramid and authorised and empowered upwards to the pinnacle. Every other known system started at the top with the few and instructed downwards to the base. The base of the parliamentary system was the constituency and in each constituency there were political associations. The one key to controlling a country was to be able to select and allocate the candidates, as happened in Germany, Belgium, France and Denmark and Holland - the passionately Euro federalist governments - where the public opinion polls showed no more than 50% supported the government on the most important issue of our generation. The way in which it was achieved was in the selection of chosen "forelock tuggers" to every winnable constituency. This now happened here under the Closed List System. At the last Euro elections the candidates were chosen by "Managers at Head Office" and if all candidates in an election were "forelock tuggers" then it became one man's party. The death knell of democracy was if constituency associations were told who their candidate was to be. If hierarchies could control the selection and allocation of candidates they could control the country, so he requested participants to ensure that their own constituency party fought against any instruction about candidates for the next election.

Sir Richard Body MP felt the Declaration did not go far enough. As joint Chairman of the Keep Britain Out Campaign, he felt it was important participants stuck together without compromising and accepted this Declaration, despite some misgivings. He thanked the team for putting this Declaration together, but added that he had always been against membership of the EU because it was inherently undemocratic and never could be democratic. He believed there was no moral basis for any law unless those who made the law were elected by those who had to obey the law and were subsequently accountable to those who had to obey the law. That was clearly not the case in the European Union and never could be. It was an impossible task for members of the European Parliament to adequately represent their constituents; there could be no accountability, and without accountability there could not be democracy. He felt this should be mentioned in the Declaration.

Following a proposal by Sir Michael Spicer and a show of hands it was agreed to continue discussion and vote after lunch.

Session 5: Declaration for Democracy and Further Discussions

Chairman: Sir Michael Spicer MP

Sir Michael Spicer invited Kristian Thulesen Dahl MP from the Danish People's Party to talk briefly about the Danish Referendum.

Kristian Thulesen Dahl MP, Danish People's Party, reminded Congress of the value of its support in the Danish Referendum of 28^th September 2000. British financial support had been much appreciated and Daniel Hannan had attended the party's annual meeting, when he had explained to the Danes that they were not alone and that many people across Europe were fighting against the euro. One of the results of the "No" vote was that the Danish government would not allow any more referendums, for example about the Nice Treaty, because they realised that it would be another "No". They had referendums in 1986, and in 1992 and 1993 about the Maastricht Treaty, in 1998 about the Amsterdam Treaty and 2000 about the euro, but the Danish people would now not be given a referendum about the Nice Treaty. He hoped that if and when Britain had a referendum the result would be the same as it was in Denmark on the night of 28^th September 2000, when there was a big "No" to the euro.

Sir Michael Spicer thanked Kristian Thulesen Dahl, who had been a great fighter for Danish democracy for many years, both inside and outside parliament, and thanked him for joining Congress today.

Sir Michael then proposed that Congress should address itself to accepting in principle the Declaration in front of members, subject to its being amended factually and in terms of syntax.

Charles Henry, Democracy Movement, agreed that the Declaration was a positive statement. He felt Congress should accept the Declaration as it stood in the knowledge that individual interest groups could prepare their own shorter, more succinct versions to highlight their specific and passionate beliefs. He proposed that Congress vote to accept the Declaration and perhaps mandate the Committee to make such minor amendments as necessary, without the need to revert to a plenary session, and proceed to the publication of the document as Congress's agreed and unanimous policy.

Dr Malcolm McCausland, UK Independence Party, was speaking as a private individual, and was concerned that whereas this document was focused largely on the undemocratic nature of the European Union, it should first address the subversion of democracy in our own country by our own elected government. The manipulation of referendums, particularly in the Welsh referendum, the Northern Ireland Referendum and most recently in the Political Parties Elections and Referendums Act 2000 was a travesty of democracy. He appealed to the Committee who would be finalising this document that they should draw attention to the subversion of democracy in our own country by our own government. The European Union presented no threat to our own democracy except insofar as it was acceded to by a political establishment which had lost its faith in this nation.

Dr Bernard Juby, Past National Chairman, Federation of Small Businesses, explained that he was pro-European, but anti EU. Those who had had dealings with Brussels bureaucracy would know that it was very hard to take anything away from the EU bureaucrats. He accepted the Declaration in general terms, but reminded Congress that it had to be for home consumption and must be clear and simple and written for all people to understand.

Mrs Vera Hannaford stated that we were losing the fight in Europe for an open society and we needed to alert young people to the growing danger of a European one-party state and that should be done through education. Joschke Fischer recently told an audience in Germany that his aim is a single European government controlling one currency, foreign policy, and defence. Recently one of our MEPs described anyone who would not accept their right to rule this country as extremist. We should reach out to young people to remind them of the dangers of one-party states and the suppression of dissent. She said that the test of democracy was confidence to disagree. When this was threatened, so was all liberty.

Eric Clements, NE Regional Council of the Union of Construction, Allied Trades and Technicians, explained why the TUC abandoned 24 years of patriotic opposition to European involvement. In 1988, at the time of the introduction of the then Conservative government's industrial legislation, trade union leaders fell for Jacques Delors' cardboard promises of kindly European laws to redress the balance. Unfortunately the present government had now proved as anti Trade Union as its predecessors, so it was inevitable that where there were some small advantages to be had from Brussels, trade union leaders felt a duty to incline their members in that direction. He felt that the euro scales were dropping from the eyes of the trade unionists but appealed to friends on the right and in business, that if they were to tell people how it was easier to sack people in Britain than on the Continent and if they were to applaud the wonders of deregulated and flexible labour market (which in the trade unionists language was code for low pay, job insecurity and bullying management), we would not get the support of the labour movement. In order to bind together men and women of widely differing opinions, we needed to exercise tact and restraint. The EU, an organisation that enforces privatisation, could not be called socialist.

Lord Stoddart of Swindon, Chairman, Campaign for an Independent Britain, was a member of the Committee that drew up the Declaration. He had never wanted to go into the Common Market and resigned a government post because the then Labour government decided that we should have a directly elected European Parliament. He was also Chairman of an organisation that had always wanted to leave the EU. He said there was only one way for an independent Britain and that was to leave the European Union and as quickly as possible. The job of the Committee had been to reconcile a wide range of ideas about Europe and to get as radical a document as possible. This Declaration was much more radical now than when it went to the Committee, as Committee realised that Congress had moved on. He quoted Clause 6: "National parliaments and people must be the custodians of fundamental policy matters, especially their constitutions, taxation, defence, foreign policy, jurisprudence, policing, electoral policy and law changes to the Community treaties. This will necessarily involve the retrieving of powers already granted to the European Union". In his view this said it all and was pretty radical. The fact was that if we did not get what we wanted in that last clause there was always the possibility that we could come out or at least threaten to come out. He was in favour of the suggestion that Congress adopt the document at this meeting and ask the Committee to consider all the very important points that had been made today, in particular that Scottish law was different from English and Welsh law, and alter the document accordingly.

Howard Pedraza, Anti-Common Market League, feared that a referendum would be rigged and the pro euro group would obtain a resounding victory and a mandate to proceed. He proposed a scheme for an unofficial referendum to be held on the same day as the official referendum.

Lionel Bell, Anti-Maastricht Alliance agreed the Declaration was full of very good ideas and if they were all put into operation we would not have to withdraw from the European Union because the document would be a democratic virus that would corrode, corrupt and eventually finish the European Union. Many good points had been made at this Congress that ought to be incorporated in the document, not least that the document needed to be much more taut, demotic and popular. He was, however, surprised to see that there was no reference in the Declaration to sovereignty which he felt was so closely linked to democracy.

S D L Ross asked what would happen to the resulting Declaration when Congress had voted on it.

Sir Michael Spicer had also been asked to whom this Declaration was aimed, and said that this was in the hands of the Congress to decide. Firstly, it would be sent to the press and copies would then be on the Congress website and also available to any organisation for them to distribute it as they saw fit within their own organisation.

Lord Clifford of Chudleigh, Conservatives Against a Federal Europe, said that not long ago the International Monetary Fund completely bailed out the euro when it was 50% of the pound in value. We were going to replicate what happened in the USSR, which collapsed after 70 years, but the EU would collapse in far less time. He agreed that Congress should agree to the six Clauses brought up but that Committee should produce a shorter version in three or four word punch lines, with good bullet points.

Alan Orme, Rea Valley Christians, felt this Declaration must be available well before the General Election. He felt it needed a one, two or at most three word title to each Clause to provide the punchiness required. He suggested Clause 2 "The electorate must have the right to decide by referendum….before additional powers are given to the EU.", should have the additional phrase "and to confirm or deny the existing powers".

Roger Pincham, Liberal Democrats, former National Chairman of the Liberal Party, and a member of the Committee of the Congress for Democracy, suggested that Congress approve the Declaration, and then leave the Committee to refine it and take on board the various points made today. The reason why the national parliaments and people must be the custodians of fundamental policy matters (Clause 6) was that there was no effective democracy beyond the borders of those people who speak the same language, and therefore, the European Parliament was going to be at best a representative assembly of the peoples of Europe. The real power, if it was to be democratic, had to remain at the level of the national parliament, because democracy would not extend beyond the borders of the nation states. Our campaign would be all the more attractive if, as this document emphasised, we were talking about that same spirit of democracy everywhere in Europe.

Peter Dul, Chairman, Anti-Common Market League agreed with speakers who had referred to there being no European demos and therefore there could not be a European democracy, and believed the only true democracy was that of the nation state. The Anti-Common Market League's position was to leave the EU as soon as possible. Nevertheless, he supported the view that Congress should be content with the Declaration, perhaps with some minor adjustments, in the hope and expectation that it would lead us to get out.

Nigel Spearing, Labour Euro-Safeguards Campaign, CIB, and former Chairman, Select Committee of the House of Commons on European Legislation thanked the Committee for all the hard work it had done in drafting this statement and for all the hard administrative work done by the Chairman and others in the Congress. Clause 6 had been highlighted by Lord Stoddart as being radical. As it was termed at the moment it was constitutional. At public meetings it was very difficult to get people to understand fundamental concepts of Constitution. The democratic rights of the peoples of the United Kingdom to determine their own government administration and legislation had, during the membership of the European Community and Union, been diminished and were diminishing, making it imperative that they should now be increased and, ultimately, restored.

Derek Bennett, UK Independence Party, said that Parliament must at all times remain omnipotent in all save the power to destroy its own omnipotence. He suggested that Congress should perhaps change tack completely and instead of supporting a referendum, say that any referendum asking the people to destroy this omnipotence was actually illegal and the fact that past governments had been giving away this omnipotence to the European Union was also illegal.

Sir Michael Spicer then asked whether Congress wished to meet again. It was agreed to hold a sixth Congress.

Eric Deakins, Labour Euro Safeguards Campaign felt that with a General Election coming up, the euro issue would be quite prominent in some parties' propaganda and it might be better to wait to hold the next Congress until the results of the Election and then assess the parliamentary situation and the prospects for an early referendum on the euro. He did not feel much could be done before the General Election.

Sir Michael Spicer then proposed that Congress vote on whether to accept the Declaration in principle and to charge the Agenda Committee with improving its syntax and general presentation and altering matters of fact that had been raised, particularly the matter of Common Law and Scottish Law. This motion was then carried almost unanimously.

Michael May spoke of how the members of the Countryside Alliance were very concerned with the effects on agriculture of the CAP. He thought Congress would do well to publicise the Countryside Alliance's march on 18^th March, to join them, and to use the massive amount of publicity given to that march, by having a good sprinkling of banners referring to CAP or "out of CAP", or other anti-EU slogans.  (Note:  This march was subsequently postponed because of the foot and mouth disease crisis).

Allan Robertson mentioned two forthcoming anti-EU Conservative speakers:

6^th February at 18.30 - David Davis MP would speak at the House of Commons, Committee Room 13

15^th March at 7.00 - Christopher Gill MP would speak at 7 Millbank.

Lord Clifford of Chudleigh, Conservatives Against a Federal Europe suggested we should distribute the bullet points to the Countryside Alliance who would then disseminate them for us.

Sir Michael Spicer then closed the proceedings, thanking everyone for coming.

- END -

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