House of Commons Hansard Debates for 23 Feb 1989

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companies free to choose their insurers anywhere in Europe. Choice is the hallmark of a free market, an efficient market and a low-cost market. We intend to press ahead now with liberalising other areas of insurance. We are determined to provide tangible evidence to the consumer of the value of EC liberalisation. The United Kingdom insurance industry, which has such special skills, is well placed to benefit from that. At last it can now market EC-wide. Progress on insurance is a major United Kingdom interest and advance for us.

Mr. Teddy Taylor : In declaring my interest as a director of a large insurance company, may I appeal to my right hon. Friend to look at that directive, which does not bring about liberality but rather allows only a measure of liberality for what are loosely called large risks, but does nothing for the mass risk market? That is particularly true since there is something stuck in it called the "Kumul" rule which says that, if others can provide the same service, they can keep us out. It is a load of rubbish. If my right hon. Friend talks to a few insurance companies, they will tell her themselves.

Mrs. Chalker : I note what my hon. Friend says and I shall look into it. [Interruption.] The hon. Member for Hamilton (Mr. Robertson) laughs. I do not know whether he thinks that I am supposed to be an expert on insurance matters. I am paid by the Government, not by an insurance company, and I need to look into what my hon. Friend has said in order to give him an answer. I am happy to give him an answer, but when I have had a chance to look into the matter. We agreed that professionals should be free to work anywhere in the Community without requalifying in their profession. At the moment, it would take an accountant or an insurance man up to 50 years to qualify to practise throughout the Community. Under the new rules that have been agreed and are being introduced bit by bit up to 1990, one qualification will be enough.

Public purchasing is another protected citadel of the Community where our current onslaught is penetrating some major regulatory defences. The House will probably know that public purchasing accounts for about 15 per cent. of total Community GDP. Last year we agreed far-reaching changes to the rules governing access to that market. Those changes are opening up opportunities for business throughout the Community. They will bring down costs and produce better value for money for taxpayers, consumers and businesses. This year we are continuing our efforts to extend Community liberalisation to cover formerly excluded sectors, such as transport and telecommunications. That is an important advance.

Last but not least, most member states have agreed to abolish exchange controls by next year. The United Kingdom did that in 1979. Now, the Community has accepted that that makes sense. The last two countries to do that will be Greece and Portugal, by the end of 1992.

There has been good steady progress and it is right that all eyes should be focused on the single market. Those eyes are not just within the Community but outside too, and some third countries have expressed concern. They want to ensure that the removal of internal barriers benefits not only the twelve EC member states, but them as well. More importantly, as internal barriers come down in the Community, they are concerned that no new outer walls should go up.

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Let me make that quite clear. We are totally opposed to proposals that would create a fortress Europe. That is why we cannot accept proposals that the liberalisation of financial services should involve protectionist provisions on reciprocity. Such proposals rightly concern our other partners across the world. The Commission's proposals for automatic reciprocity clauses in the second banking directive and in the investment services directive have met with considerable opposition from member states. I am glad to say that the Commission is now thinking again. We shall continue to ensure that liberalisation of financial services does not lead to protectionism. A liberalised economy within Europe is no excuse for a protectionist wall around Europe. That would defeat the whole object of the single market. It is in that context that I shall look carefully at what my hon. Friend the Member for Southend, East (Mr. Taylor) has said.

Mr. John Butterfill (Bournemouth, West) : Will that extend to banking, where we have taken certain powers in recent legislation?

Mrs. Chalker : I believe that it will extend to banking in due time, but I would want to know the precise aspect to which my hon. Friend refers. He may care to ask my hon. Friend the Economic Secretary to the Treasury to respond on that issue when he replies.

Fortress Europe would make no sense for the Community. The Community has recognised, partly as a result of strong pressure by the United Kingdom, that the single market must be open to third countries. The European Councils in Hanover and Rhodes made that clear. One could quote from the conclusions of Hanover and Rhodes, both of which show clearly that the internal market will be a decisive factor in contributing to the greater liberalisation in international trade. I can assure the House that the Government will continue to work for a liberal approach towards our trading partners.

Mr. Edward Leigh (Gainsborough and Horncastle) : Will my right hon. Friend give way?

Mrs. Chalker : I have given way many times and I do not wish to take up too much of the time of the House. Therefore, if my hon. Friend will allow me, I should like to continue.

Progress in completing the single market has greatly increased interest in the Community among third countries. Let me mention our closest partners-- our six European Free Trade Association friends. They are collectively the Community's largest trading partner, and they are anxious to preserve the benefits of their free trade agreements with the Community. They are determined to share in the greater prosperity of the single market, and we believe that they should. Therefore, they are negotiating for even closer links to the Community, and we welcome that. We are also seeing considerable new investment by them, and others, in the Community. That is a sure sign of our success in revitalising the European economy.

Another important development in recent years in the Community has been the strengthening of European political co-operation. The depth of day-to-day consultation and the continuity of policy, despite changes in the nationality and political complexion of the presidency, are perhaps surprising to outsiders. Both are helped by the

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efficient functioning of the EPC secretariat in Brussels. That was a British initiative, taken during our presidency in 1986. The Twelve's close co-ordination in EPC made a substantial contribution on two particular occasions. One was to the successful conclusion of the Vienna conference on security and co-operation in Europe meeting. But dealing with much more recent events, we were extremely heartened by the solidarity of the Twelve on Monday last on our problems with Iran. That gave us precisely the timely and substantive support that we sought, and demonstrated the ability of the Twelve to take effective, speedy and united action on a key political issue. European political co-operation is now a vital part of the Community's business, and one that we welcome very much.

Mr. Quentin Davies (Stamford and Spalding) : My right hon. Friend puts those points extremely modestly. Will she accept the most heartfelt congratulations of many hon. Members and most people outside the House on her and her right hon. and learned Friend the Foreign Secretary's diplomatic triumph the other day in securing the support and solidarity of the rest of the Community behind Members over this difficult Iranian issue?

Mrs. Chalker : I am grateful to my hon. Friend for his most generous remarks. We shall always seek to work in such a way to support one another in the important area of political co-operation. I have spoken of the Community's internal work and of our external negotiations. The two come together very much on the international trade front. I am convinced that the Community must use its own internal liberalisation constructively as a lever to bring about wider international liberalisation. Nowhere is this truer than in services, a new area for the general agreement on tariffs and trade. We now have an important opportunity. Economic liberalisation has been the hallmark of this Government's success domestically. We are achieving that now in Europe too. Hon. Members can be certain that we shall fight for it globally in the GATT Uruguay round.

One key to progress in GATT at present is agriculture. That well illustrates the inter-relationship of what we are doing within the Community and our negotiations with the outside world. Reduction in agricultural support will benefit everyone. The consumer is helped by lowering prices ; the taxpayer by providing value for money ; the Third world by allowing developing countries to compete fairly on world markets ; and on top of that the international trading system as a whole by encouraging liberalisation world wide.

That is why we fought last year to reform the CAP and why our success in February last year was so important a step. But the Community must be prepared to go further. We cannot afford to let the Uruguay round fail.

The United States needs to move from its utopian demand for commitment to the complete long-term abolition of agricultural support. Real progress can and will be made only provided there is no politically unrealistic target of total elimination. Once this is recognised, negotiaions can begin on further short-term reductions. The next step is the senior officials' meeting in April. For our part, the United Kingdom must live up to its commitment to sustained reductions in CAP support. The

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Commission proposals for the 1989 CAP price fixing--a price freeze in most sectors and a reduction in some--are good. They could have been better, but if we do not fulfil the expectations of continuing progress on CAP reform the Community will be rightly isolated and rightly blamed. That would be in no one's interest.

The Community has a heavy and important agenda ahead. I recognise the value of the major work done under the German presidency. This afternoon I have touched on three main strands. On all of them the results of last year are directly relevant to our current negotiating tasks in the Community : first, expenditure control and CAP reform ; secondly, our main priority-- the single market ; and, thirdly, our relations world wide.

Mr. Leigh : May I bring those three strands together by asking a question? Will my right hon. Friend agree that there are two scenarios in the future of the Community? One scenario, which I call the nightmare scenario, is that in which standards are laid down by Brussels. These often result in the lowest common denominator. The other, which I call the dream scenario, is one in which countries, currencies and Governments compete for the highest common denominator. Would she favour the dream or the nightmare?

Mrs. Chalker : I have always tried to keep my feet firmly on the ground and make sure that my head is not in the clouds. I suppose that every human being likes sometimes to dream dreams, but progress is made only when one's feet are firmly on the ground.

Our internal reforms must be used as market-opening measures. We intend to use the Uruguay round to achieve a more open international trading system. The Government are playing their full part in working for open trading and that momentum must be maintained.

Changes that bring direct benefit to United Kingdom consumers and taxpayers are our overriding goal. The White Paper demonstrates some of the major steps which our European Community policy has made towards achieving it. We have made progress. We intend to make more progress in the area I have described.

4.44 pm

Mr. George Robertson (Hamilton) : This debate is taking place a year beyond the period that we are supposed to be discussing. Notwithstanding the apologies of the Minister on behalf of those in the Government who arrange the business, it is an outrage and an affront to Parliament when these debates are designed for the review of the multiplicity of issues dealt with by the European Community in the period January to June 1988. That may have a lot to do with the fact that attendance at these debates is as limited as it is. It is hardly an inspiring prospect for hon. Members to come here on a Thursday afternoon and debate events so far away.

Sir Russell Johnston : Is the hon. Gentleman aware that there are excellent short-break holiday opportunities in Richmond at the moment?

Mr. Robertson : I can only assume that that suggestion has already been taken up. The hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) must be the only member of the SLD, the SDP and who knows

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what else not actually campaigning in that part of the world--and a fat lot of good it seems it will do them--despite the fact that at the end of the day the Government will win the seat, having lost the vote.

The Minister confirmed the intention of this debate in her own speech, in which she sought to look at what happened during the period under consideration, which is now so much history. What concerns the British people is here and now and the future. These debates have degenerated into a farce in which we catalogue events of a year ago but are given no opportunity to influence events that Ministers will decide this week, next week and in the coming year. The Minister conceded that, even with her well -known and established encyclopaedic memory, she could not recall one incident in which a debate on the hundreds of documents that are considered, usually after midnight, by the House of Commons had led to any change in any of the words.

This brings to mind a story I was told by a Conservative Member last week. He recalled an elderly Tory Member telling him that he had heard many brilliant speeches in the House in many debates. The first Conservative Member asked him if they had ever changed his mind. He said, "Of course ; some of them were very persuasive. They never changed my vote, but they often changed my mind." Here we have that incident being repeated. The Minister tells us that despite these great and important debates not a single one of the documents referred to in the report before us today--in section XV : "Parliamentary scrutiny of EC legislation", which runs to two paragraphs and simply lists a number of documents--has been changed. That is the brutal truth.

Sir Anthony Meyer (Clwyd, North-West) : I wish that the hon. Gentleman would not give up so easily. I am quite sure that, with the power of his oratory, he might tempt me into his Division Lobby tonight, if there is a Division and if he is sufficiently persuasive.

Mr. Robertson : Who can tell? I am sure that the looks that the hon. Gentleman is getting from the Whips on this occasion more than make up for the smiles of welcome he might get from me. If he will wait until I am finished, I am sure that, as ever, he will be persuaded.

Even before the Single European Act, the way in which Parliament dealt with the European Community was lamentably less thorough than it should have been. We had, of course, our admirable but circumscribed Select Committee on European Legislation. We had regular reports from key Councils of Ministers and we had these twice-yearly review debates. We also had that long succession of late-night debates on specific issues which had been recommended by the Scrutiny Committee for debate in the House. That was little enough, given the scale of the legislation powering its way through Councils of Ministers, but that little turned into sheer farce when the Single European Act came into existence.

We know that the Prime Minister does not feel any affection for the child to which she gave life in the Single European Act. She now pretends that she did not really authorise the Minister's signature to it or agree to its parts. Her Bruges speech was the repudiation of Mount Ararat and the denunciation of the tablets of stone which the right hon. Lady the Minister of State brought back. The Act included majority voting, harmonisation at a high level, European political co-operation and European monetary

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union. All that was thrown out as ideological baggage thrust on the Prime Minister in a moment of incomprehending weakness. That fools no one. It does not fool the Minister of State, it does not fool the House and it does not even fool the Prime Minister. However, the Prime Minister will not admit, because it conflicts with her blustering nationalism, that the Single European Act has had a dramatic impact on decision-making in all the European Community countries.

In 1986 the House of Lords Select Committee on the European Communities was blunt about this. In paragraph 28 it stated : "The powers of the United Kingdom Parliament will be weakened by the Single European Act Since the United Kingdom Parliament exercises no control over Community legislation other than through the voice and vote of UK Ministers in the Council of Ministers, weakening of the powers of UK Ministers is felt equally by the UK Parliament."

The report concluded on that theme :

"The power of UK Ministers will therefore be circumscribed in five ways."

With those new processes in place and with those new weaknesses imposed on our Ministers--and through them on this House--what has been the Government's response?

We now have fewer oral statements after European Community Councils of Ministers than ever before. We have the same limits on the remit of the Scrutiny Committee in this House and the same lack of opportunity to discuss key issues, often vital to the interests of Britain, before they emerge from the Commission or are dealt with by the European Parliament, or decided upon by the Council of Ministers sitting behind closed doors. To call that satisfactory is grossly to understate the position today.

It is time that the House took a grip on its own future and brought Ministers, who seem increasingly careless of any responsibilities to inform and consult Parliament, to account. We must radically alter the procedures of this House properly to reflect the new circumstances placed upon us by the Single European Act.

Sir Nicholas Bonsor (Upminster) : Does the hon. Gentleman share my concern and the concern felt throughout the country about the number of laws which are introduced into our legal system and which have nothing to do with the will of this House or our people? We have draft directives which direct the Government on what laws they will introduce and which the Government pass through the House by virtue of their enormous majority, despite the wishes of most of us that they should not be passed. There are also regulations whereby laws are introduced into our legal system without any consultation with our Government or people except on a vote of the majority of European Ministers. Those regulations cover such things as driving minibuses and the use of lead shot in shotguns. They are minutiae in the legal system of this country which should have nothing to do with the European Commission. Does the hon. Gentleman agree that we must reform the way in which those laws are introduced into this country through the House?

Mr. Robertson : Those views come ill, even from individual Tory Members. We remember only too well the way in which decisions have been taken in this Parliament by means of the silent majority who troop through the Division Lobby every night. We also recall that the Single

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European Act was passed through this House on a guillotine against a vote by the Opposition. Precious few Conservative Members voted then.

Mr. Teddy Taylor : How many Labour Members voted against the Act?

Mr. Robertson : If the hon. Gentleman will let me finish answering the hon. Member for Upminster (Sir N. Bonsor), we can get on. The hon. Member for Upminster made a similar point to mine. Several decisions at least deserve the scrutiny and consideration of the House. We have made that point repeatedly in debates with precious little support from the vast majority of Conservative Members.

Mr. Teddy Taylor : Although not many hon. Members listen to these debates, I am told that people in Europe read the reports of these debates. To clarify the position, how many Labour Members voted against the appalling Single European Act? Was the hon. Member for Hamilton (Mr. Robertson) one of them?

Mr. Robertson : Yes, is the answer to the hon. Gentleman's final question, and the Labour party voted against Third Reading and the guillotine motion. The hon. Member for Southend, East (Mr. Taylor) came to the House with a compromise proposal during the truncated debate on the guillotine motion on the proceedings on the Single European Act. He is responsible for the deal that was struck in order to give an extra handful of hours' consideration to something which he now calls a constitutional travesty. He came back with a deal which the Leader of the House accepted. I sat through hours of debates and was willing to argue for even longer so I will not tolerate arguments from Conservative Members about the way in which the procedure was carried out.

Decisions on important bread-and-butter issues affecting our constituents are determined by Ministers usually sitting in private in Brussels and it is time that we had a tight, disciplined procedure to ensure that those Ministers are acting with the knowledge and political authority of the United Kingdom Parliament when those decisions are taken.

The European Community has other political implications for the United Kingdom. My hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) and I represent Scottish constituencies. We are aware that in Scotland today a dangerous fantasy is being peddled by people who want to make separatism more palatable. The salesmen of an independent Scotland in Europe are using justified discontent at the Government's careless big- business-orientated Europolicy to sell secession to the Scottish electorate.

The independent Scotland in Europe notion is a sham and a pretence that Scotland would have an effortless, automatic entry into the European Community, if the Scottish people were to go it alone. Such a move would involve what even the Scottish National party admit would be lengthy negotiations and the near certainty of a veto from member states with their own separatist splinter groups.

The sham scenario is immediately dangerous because by threatening a decade of constitutional turmoil in Scotland's future the effect will repel investment and jobs from outside and inside Scotland's borders. To inflict that

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new agony on the damage already done to Scotland by 10 years of the Tories would be a tragic folly of historic proportions.

Mrs. Margaret Ewing (Moray) : I waited until the hon. Gentleman had reached an appropriate point in his diatribe, which he has obviously carefully rehearsed. Is the Labour party now saying that if the people of Scotland vote in democratic elections to achieve the ultimate goal of independence in Europe, he and the Labour party will oppose it? If there should be a Labour Government, will he try to apply a veto?

Mr. Robertson : The hon. Lady and I both represent Scottish constituencies and we both became Members at roughly the same time. I remember that she voted to bring down the last Labour Government and offered the key to No. 10 to the present Prime Minister. If the Scottish people, in some moment of madness, voted for the Scottish National party and for separatism, they would have to face the fact that they would have to apply to the European Community. I cannot say what the rump of the United Kingdom Government would do in the Council of Ministers. I make a perfectly valid point, although we are only considering a hypothetical situation. Other countries in the Community have separatist movements and they have made their position crystal clear. There is not the slightest chance of those countries voting for the entry of a seceded Scotland in the United Kingdom. That veto would be exercised by them no matter what anyone in the rump of the United Kingdom did.

Mrs. Ewing rose --

Mr. Robertson : I have answered the hon. Lady's point and I should like to move on to the major subject on which the Minister of State chose to address the House--the drive to complete the internal market by 1992.

In no other sphere does the clash of vision on Europe appear so marked and the differences between the parties seem so clear as their attitude towards completing the internal market. There are alternative visions and clashing ideologies even within the Conservative party and deep divisions have emerged. Those divisions are openly displayed in the European Democratic group, which is what the Conservative party calls itself in the European Parliament where the war between the nationalists and the federalists is open and I am sure there is no quarter given.

The argument is also taking place within the Government. The Prime Minister took to the stage at Bruges last September to repudiate her acceptance of the centralising Single European Act and simultaneously to re-invent British nationalism. She said :

"We have not successfully rolled back the frontiers of the state in Britain only to see them reimposed at a European level, with the European superstate exercising a new dominance from Brussels." That was trumpeted by a Prime Minister who used the guillotine to ram through the House of Commons the Single European Act, a measure described by the House of Lords Select Committee as

"the gradual replacement of national competence by Community competence, sometimes even without any parliamentary approval of that replacement."

That contradicts the Prime Minister's speech.

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Mr. Andrew Rowe (Mid-Kent) : Will the hon. Gentleman give way?

Mr. Robertson : No.

Last month, on 25 January at the Royal Institute of International Affairs, the Chancellor of the Exchequer laid into the social dimensions of 1992. He said :

"Grandiose attempts to reduce regional disparities by ever-greater resource transfer is likely to be no more successful at Community level than it has been within individual countries."

But he had not checked notes with the Foreign Secretary, because speaking only three weeks after the Chancellor made that speech the Foreign Secretary attacked the Labour party's report on 1992 saying that :

"It forecasts the exploitation of poor regions by the rich--although we have agreed to double the structural funds and put 52 million ECU into them before 1992, half as big again in real terms as the Marshall Plan after the war."

But the Chancellor said at the Royal Institute of International Affairs :

"Another area where the rival visions of the Community are seen is the so- called social dimensions' of 1992."

The Minister of State, Foreign and Commonwealth Office, the right hon. Member for Wallasey (Mrs. Chalker), made a speech at the Management Centre Europe-- [Interruption.] --last November saying : "Britain is sometimes charged with having no interest in the social development of Europe. This is simply not true ; of course there has to be a social dimension to the single market."

But the Chancellor said :

"The attempt to level up all sorts of so-called worker protection' provisions is a sure way not of protecting jobs but of destroying them."

The Minister of State said :

"We need progress on the agreed programme of action on health and safety at work."

But the Chancellor said :

"Subsidising industries and subsidising regions destroys their will to compete and thus their ability to compete."

The Minister of State said :

"The Community structural funds are helping the Community's less developed areas to move towards the prosperity of its richest areas."

Mrs. Chalker : Since the hon. Member for Hamilton (Mr. Robertson) is having such fun taking a sentence out of one speech and seeking to match it with a sentence from another speech, let us examine the entire situation. The social dimension has a role, but in our view that role is limited to ensuring that we do not burden industry in ways which would destroy what we have achieved so successfully in the United Kingdom. Through minimum regulation and maximum freedom we have created in Britain more jobs than the rest of the Community put together between 1983 and 1987. We have also said that we need labour mobility, free access to training and retraining and sensible health and safety at work provisions. That was all part of the 1986 agreement of the Social Affairs Council when we held the presidency. We have not moved from that. That is the social dimension on which we shall press for the advancement of jobs and opportunities in Europe and the diminution of unemployment as we have diminished it in Britain.

Mr. Robertson : I know that the right hon. Lady has to find an alibi, since at the moment the Chancellor's ideology is triumphant over hers. Before the Chancellor makes high-profile speeches at the Royal Institute of International Affairs, the right hon. Lady should tell him

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about those priorities and about what has been agreed by the Government. It comes a bit thin from the right hon. Lady, who comes from Merseyside, to boast about the Government's record on employment. I should have thought that Merseyside would be the last region in Britain to make that boast.

There are massive contradictions, not just in single elements of individual speeches. When I mentioned the right hon. Lady's speech at the Management Centre Europe the hon. Member for Southend, East shouted out that it was a disgraceful speech. We do not know where the Government stand. We do not know whether they favour the enlightened view of the Minister of State or the blinkered, dogmatic prejudice of the Chancellor of the Exchequer. It is small wonder that a Government who are so confused, divided and incoherent can find unity only in attacking the Labour party's policy towards Europe. Two weekends ago, the Foreign Secretary and the chairman of the Tory party, who still moonlights as a Treasury Minister, although clearly he is away campaigning in Pontypridd this evening, set up the Tory European election stall, and the goods on display look mighty tatty, even by the barrow-boy standards that we have come to expect. The Paymaster General gave the key theme of the Tory assault. He said :

"Britain under Margaret Thatcher is not falling behind the rest of Europe-- our policies of privatisation, freedom of choice and low taxes are envied and copied across Europe because they have made Britain the best performing major economy in Europe in the 1980s." The so-called

"best performing major economy in Europe"

now boasts inflation at 7.5 per cent. and rising, against the European Community average of only 4.6 per cent.

Mr. Butterfill : Will the hon. Gentleman give way?

Mr. Robertson : No.

In Germany the rate of inflation is 1.6 per cent. Britain's inflation has been above the European Community average for more than four years. Only yesterday Mr. Christopherson, the European Commissioner responsible for economic affairs, said that the European Commission expressed "growing concern" about the failure of the British Government to reverse the worsening inflation rate and balance of trade deficit.

Mr. Butterfill : Will the hon. Gentleman give way on that point?

Mr. Robertson : No, I shall not give way.

Mr. Butterfill rose--

Mr. Robertson : No. I am not providing opportunities for Conservative Members to make a brief appearance in Hansard before they disapper for the evening. I have given way enough. [Interruption.] The best performing major economy in Europe now has--

Mr. Butterfill rose--

Mr. Robertson : No. I shall not give way--is that clear? The hon. Gentleman should read my lips when I say that I am not giving way. The best performing major economy in Europe now has another record manufacturing trade deficit with the rest of the European Community that amounts to almost £12

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billion. No wonder Mr. Christopherson is getting uptight, because that reverses the £1 billion surplus that the Government inherited from the last Labour Government.

On the very day this week that the Prime Minister was badgering Chancellor Kohl into supporting her lonely, wrong-headed isolated position on the modernisation and expansion of short-range nuclear arsenals in Europe, the British trade deficit figure with West Germany was published and showed a record £6.9 billion. That is the mark of this so-called best performing major economy in Europe, which has almost been overtaken by the Italian economy. Indeed, economists cannot agree which country has the bigger deficit, so close are the figures.

The so-called best performing major economy in Europe has an investment record, expressed in gross fixed capital formation at 1986 prices, that puts us behind all our community partners except Belgium--behind Turkey, New Zealand, Finland, Canada, Austria and others.

This so-called best performing major economy in Europe paraded by the Paymaster General is one in which skill training--on which, more than anything else, our ability to compete will be based--lags behind all our major competitors.

A recent publication by the National Institute of Economic and Social Research which compared Britain and France showed that, in France, 55 per cent. of skilled engineering workers and more than 20 per cent. of unskilled engineers had a formal craft qualification. That is light years away from Britain. Three times as many French engineering workers as British obtain vocational qualifications. In the vital civil research and development area of this so-called best performing major economy in Europe, public expenditure is at a virtual standstill. Between 1983 and 1986 civil research and development rose by only 2 per cent., compared with 15 per cent. in Germany, 33 per cent. in France, 43 per cent. in Italy and 20 per cent. in Belgium. On this subject, the influential Henley Centre said :

"Fundamental economic factors such as profitability and spending on investment and R and D will continue to play a major role in determining competitiveness and the ability to gain market share."

Mr. Graham Riddick (Colne Valley) : I was under the impression that this was a debate about the European Community, not a comparison of various countries. Will the hon. Gentleman answer this simple question : What is the Labour party's policy on the EC?

Mr. Deputy Speaker (Mr. Harold Walker) : Order. I have allowed a wide debate so far, but the intervention of the hon. Member for Colne Valley (Mr. Riddick) will take us even further beyond the terms of the White Paper that we are supposed to be debating.

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