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London Specialty Review

3.31 pm

Mr. David Blunkett (Sheffield, Brightside) (by private notice) : To ask the Secretary of State for Health to make a statement on the conclusion of the London specialty reviews.

The Secretary of State for Health (Mrs. Virginia Bottomley) : In my statement to the House on 16 February, and in the accompanying document, "Making London Better", I set out the framework for improving the health service in London. The Government's key objectives are clear : to improve the quality of patient services and the health of Londoners, to improve, in particular, family doctor and other community health services and to preserve and enhance London's national and international reputation as a centre of excellence in treatment, teaching and research.

The independent reviews of specialist services were announced at that time in response to a recommendation in the Tomlinson report. They were set up to address a problem that is recognised throughout the health service by professionals, practitioners and beyond--the extensive duplication and fragmentation of specialist services across the capital. There is a wide consensus that accepts that not only is such duplication not cost-effective but that it can inhibit the full potential for excellence in patient care and in teaching and research.

The independent advice from the specialty reviews published today will be an important consideration as we take forward the long overdue changes that London's health service genuinely needs. I am grateful to the chairmen and their teams for their hard work. Their advice, although important, is only one of many considerations. The process of change is one of evolution and direction, not of imposition. The specialty reviews are not a blueprint for the future. Proposals for improving services are already being developed locally by the institutions themselves, by health authorities and by others directly concerned. They have all shown an impressive degree of commitment to forming practical solutions to London's problems.

The Government believe that it is paramount that proposals are guided by the needs of patients. We shall take decisions on the basis of sensible plans that take the whole picture into account and that will lead to a better health service for London and for Londoners. There are difficult decisions ahead. As I told the House before, no change is no option. I also recognise the need for acting as swiftly as we reasonably can, not least because uncertainty is in nobody's interest. We will concentrate on inner London, where the most serious problems exist.

The Government have shown their strong commitment to the NHS in London. Seventy eight major new capital developments will take place this year to improve family doctor and local health services. We will invest an extra £170 million in capital development over the next six years, building up primary care services where they are needed. We are targeting a further £10 million this year on reducing waiting times, improving on the one third fall in waits for hospital admissions of more than one year that has been achieved since March 1992.


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I want London to have the best specialty centres in the world into the 21st century, alongside other first-class services. To achieve this will require effort, determination and change. The process is well under way. The will exists. The task now is to build on this commitment to build the modern health service that our capital city deserves and demands.

Mr. Blunkett : My thanks to you, Madam Speaker, for agreeing to this private notice question. I concur with the Secretary of State in thanking the members of the review groups.

Does she agree that it is not an academic exercise? It is about real patients and real centres of excellence, from training and research at Hammersmith to highly renowned, high productivity at Harefield. Having moved from Tomlinson and the London review to the four Thames regions and beyond, will she tell the House what needs assessment has been carried out to make a judgment against which we, as representatives of the public, can make our decisions? Will she now acknowledge that Labour Members were right on 16 February to call her statement a "fudge" which misled her own Back Benchers to believe that not many hospitals were threatened and no hidden agenda existed?

How can anyone trust the Secretary of State to provide one extra penny when the Government's whole agenda is cut and closure, when the chairman of the London Implementation Group is suggesting in today's Evening Standard that existing funding promises have already been dropped, and when the Secretary of State talks about £170 million--I use her word--"extra" investment in primary and community care and it turns out to be money taken from other areas and not extra to the health service?

How can anyone have faith in the Secretary of State when she refuses to accept responsibility and fails to be accountable? This afternoon she said nothing at all about the specialty reviews. Is the market in charge, is the right hon. Lady in charge or, more likely, is nobody in charge of what is going on? What is the agenda? What is the timetable? How is consultation to be meaningful when one report conflicts and overlaps with another?

Will the Secretary of State now agree to establish a London regional health authority to do the job? Will she agree to pause, to think and to be open and honest with us all? Will she agree to start again?

Mrs. Bottomley : I am disappointed that the hon. Gentleman seems to take every opportunity to develop a great scare story about the proposals. The hon. Gentleman himself said that the status quo in London is no longer an option. I believe that to be the case. We have set out in "Making London Better" a sensible framework for making decisions, but they need the ownership of local districts, who are the purchasers and commissioners for health care.

We also need to broke a change with the research institutions and the universities because the treatment of patients needs to be considered, as well as research and education. They are certainly extremely complex matters.

The independent reviews play an important part in that decision making, but they are independent, they have declared their independence and will now want to be considered across the service. The task is to achieve change. There are a great number of discussions under way across London. I commend the


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way in which so many have already constructively participated in that. There are also substantial improvements such as the £200 million Chelsea and Westminster hospital that opened only the other day. We have the £11 million approval to go ahead at the Homerton and the improvements to the accident and emergency services at King's College hospital as well as the Royal London.

The hon. Gentleman is always doom laden. The only capital in which he is interested is political capital. We are interested in a health service for the future in London, and the necessary decisions will be made as fast as is reasonably possible.

Mrs. Marion Roe (Broxbourne) : Does my right hon. Friend agree that the most pressing need in London is for primary health care services to be built up from family doctors and others in the community? Does she also agree that it is very hard to justify such extensive duplication of specialist services when more resources need to be diverted to no less vital services at local level?

Mrs. Bottomley : My hon. Friend has identified the issue precisely. That is why, when we announced "Making London Better", we gave a clear commitment that progress would be made only as the primary care services were developed. That is the significance of the 78 capital schemes that are already under way to improve the family health and community services, and the further falls in waiting times. The duplication and fragmentation of the specialty services will increasingly inhibit the ability of London and Londoners to benefit from the best of modern medical treatment and research. There are too many examples of smaller units duplicating the service provided by a neighbour, involving patients travelling between the services. The specialty reviews identify precisely how we can have those specialist services, but in such a way that they can compete not only nationally but internationally in the future.

Ms Liz Lynne (Rochdale) : Has the Secretary of State any intention of maintaining national centres of excellence such as Harefield hospital? Does she agree that to break up specialist teams that have been highly successful would be an act of sheer folly? Will she allow us to see the full costings of the reviews, so that we can know the real reasons behind the proposed changes?

Mrs. Bottomley : The position is clear. Our proposals are about improving services and strengthening excellence. As the independent reviews made clear, the proposals were not costed ; it is now for the London Implementation Group, along with the regions, to say what are achievable and realistic changes.

We shall start in the centre in introducing the changes, but I hope that the process will not take as long as it took St. George's hospital to move from Hyde park corner to Tooting. That took well over 20 years. I do not believe that staff in London's health service could sustain the uncertainty for as long as that.

All agree that change is needed ; we want to make that change effectively and well.

Mr. Roger Sims (Chislehurst) : Is it really a proper use of what will always be limited resources to provide 14 centres for cardiac surgery and 13 for cancer treatment in


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London? Does it not make sense to try to concentrate resources in a more limited number of areas, for the benefit of the patient? Will my right hon. Friend confirm that the reviews are simply advice, and not firm proposals--which is how parts of the media have already interpreted them?

Mrs. Bottomley : My hon. Friend has got it exactly right. The reviews consist of independent advice. There is, however, widespread agreement that the size of London's specialist services inhibits their ability to achieve the excellence that many would wish to achieve. As I have said, there has been wide support for our introduction of what all will agree is complex and difficult change. The president of the Royal College of Physicians, for example, said that the proposals in the specialty reviews were "fair, reasonable and rational".

Mr. Peter Shore (Bethnal Green and Stepney) : Among the recommendations are proposals to close the Queen Elizabeth hospital for children--a 130-bed hospital--and to transfer its services to the Royal London hospital, which has capacity for only 50 beds. I do not know how that can improve the services available to sick children in north-east London.

At the same time, the closure of Bart's--particularly that of its accident and emergency department--will mean that more patients will attend the London accident and emergency department. As the right hon. Lady well knows, only four months ago the accident and emergency department of the Mile End hospital was closed. Can she at least guarantee that there will be proper consultation with all concerned before any decisions are made, and that no closure or transfer will take place until alternative and adequate facilities have been put in their place?

Mrs. Bottomley : I give the right hon. Gentleman an absolute assurance on both those points. The need for consultation before significant changes take place is clear, and we have made it our commitment time and again to introduce changes only on the basis of improvement in services. I ask him to look at some of the primary care developments taking place in his constituency, because there has been a substantial investment in underdeveloped GP services : 78 capital projects ; hospital at home ; and facilities for community nurses and general practitioners. As the right hon. Gentleman knows, I have some knowledge of his constituency and the underdevelopment of the family doctor services always created heavy pressure on some of the hospital services. These changes matter for London and Londoners.

On the two matters about which the right hon. Gentleman seeks assurance, the answer is yes.

Sir John Wheeler (Westminster, North) : Can my right hon. Friend confirm that distinguished medical people and others who constituted the review teams have advised that there is a real danger of specialist research services in London being overtaken by those elsewhere in the United Kingdom unless those services are concentrated on specific sites to enable their continuation?

Mrs. Bottomley : It is understandable that Members of Parliament will be concerned about their own hospital or institution when they think that change must be under way and I accept and recognise that. My right hon. Friend makes a very important point when he talks about the


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opportunity of change, because there are real opportunities for strengthening specialist centres, research and teaching, and it is very difficult to find any member of the medical, the academic or the research community who will do anything other than warmly endorse the approach that we are taking.

Mrs. Audrey Wise (Preston) : To what extent was there unanimity or disagreement within the review teams? Will the Secretary of State also tell us whether consultation will involve the people who live in the areas affected?

Mrs. Bottomley : I do not know whether there was disagreement among the review teams because they were independent. I met all the chairmen and they took to the task with great diligence. They are people of significant eminence and calibre within the health service. They spoke with a range of people on their teams to bring forward their recommendations for strengthening and improving the specialist services. Of course, before any significant changes take place in London, as elsewhere, those matters have to be the subject of public consultation. I repeat that changes will be made only on the basis of improving services for patients.

Mr. David Congdon (Croydon, North-East) : I recognise the need for change in London's health services, but will my right hon. Friend clarify how the process of change will be managed--especially the interaction between the proposals announced earlier in the year, following Tomlinson, and the specialty reviews announced today?

Mrs. Bottomley : The London Implementation Group will be working with the regions to take forward practical and sensible proposals. It will be informed by the independent reviews and also by the review of research in the special health authorities. It will then be its job, within available resources and on the basis of the improvements in primary care, to consider the needs of patients and above all to discuss realistic options for the future with the district health authorities--the people who commission health care for patients. I repeat that no change is no option. Patients are already being treated in their constituencies, closer to home. London hospitals have fixed overheads based on the past ; we have to help them to build and reconfigure the health service for the future.

Ms Glenda Jackson (Hampstead and Highgate) : Will the Secretary of State explain the criteria exercised by the independent review bodies, which have recommended that the renal transplant unit at the Royal Free, where the first successful kidney transplant outside the United States of America was undertaken, must be moved to the Middlesex because of the lack of academic development on site but that a plastic and burns unit should be moved to the Royal Free although it claims that there must be professional links with UCH? There seems to be a grave discrepancy about what constitutes a specialty in this instance.

Mrs. Bottomley : It is not for me to justify every last element of the independent reviews ; that is precisely the nature of the reviews. The Labour party believes that everything must be done with a command and control approach. We wish to achieve the change. Our responsibility is to ensure that London has a health service


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for Londoners and that research and education is consolidated and strengthened. The recommendations, as they affect the Royal Free, will no doubt be a subject for discussion with the region, with local hospitals and with the implementation group to ensure that all points are properly satisfied.

Mr. Michael Shersby (Uxbridge) : In view of the fact that Harefield hospital is situated not in central London but on the furthest extremity of the county of Middlesex, and in view of the fact that its world famous heart transplant unit is a national asset, can my right hon. Friend give me any assurance about its future ?

Mrs. Bottomley : My hon. Friend would not want me to rule out change for ever and a day. No holder of my office would ever say that any particular hospital or institution will never be subject to change. This proposal has been made in the past. However, the most serious and intense problems are in central London where there is great competition and where fixed overheads are becoming ever more acute. I do not see any prospect of Harefield moving from its present site in the near future.

Mr. Brian Sedgemore (Hackney, South and Shoreditch) : Will the Secretary of State confirm that a number of the specialty review teams have recommended that even in the instances where St. Bartholomew's has better clinical and research facilities they should, nevertheless, be transferred to the Royal London hospital rather than vice versa ? Does not that make a mockery of the democratic process and consultations about a merger between St. Bartholomew's and the Royal London ? Does she not recognise that it will end with herself, Sir Tim Chessells of the London Implementation Group and Admiral Staveley from the North East Thames regional health authority being dragged before the courts in a series of judicial reviews for improper and unlawful conduct ?

Mrs. Bottomley : I somewhat resent the hon. Gentleman's comments. In all matters concerning the specialty reviews, I believe that we have acted with great reasonableness, and we established those reviews precisely so that we could have such questions answered. I urge the hon. Gentleman to consider the remarks that I understand were made by members of the review teams at their press conference this morning where they made it clear that there had been no collusion between the different review groups and that they had in no way been subject to pressure from the centre in making the proposals that they thought were right to improve and strengthen specialty services.

Mr. Peter Bottomley (Eltham) : The original proposal was to spend more than £50 million moving the regional neurosciences unit from the Brook on Shooter's Hill to King's College and Maudsley. There would be a general welcome if that proposal, which would clearly waste much of the capital in south-east London, were scotched. Will my right hon. Friend try to ensure that the Ministry of Defence can agree with the national health service that the Queen Elizabeth military hospital should be made available so that the local area and the commissioning agency can consider using the Queen Elizabeth military hospital as a substitute for the Brook and the Greenwich district hospital?


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Mrs. Bottomley : My close Friend--[ Hon. Members-- : "And honourable?"]--and honourable Friend, indeed, most of the time--has raised a matter of great concern in his constituency. He makes a point that applies to all the specialty reviews : each is considering a particular specialty, but for each there is a local context. We have already discussed costing, but there is a broader context, too. My hon. Friend the Minister for Health is already having discussions with the Ministry of Defence on the future options for the Queen Elizabeth military hospital, to which my hon. Friend referred, and the role that it may play in the reviews.

Ms Kate Hoey (Vauxhall) : Will the Secretary of State confirm that no decision to close either St. Thomas's or Guy's hospital has been taken and that, in spite of some of the rumours that have been going round, the joint trust board is still considering the issue? Will she also confirm that if some of the specialty reviews went ahead there would be no possible way in which St. Thomas's or Guy's could close, because of the extra work that would be necessary at both those sites?

Mrs. Bottomley : I give the hon. Lady a clear assurance that no decision has been taken on that matter. As I understand it, the decisions on the site appraisal for Guy's and St. Thomas's will be influenced by the specialty reviews. However, it is important for all hon. Members to appreciate that the specialty reviews are not a map of how any of us believes that the services will be precisely distributed. The distribution will need to be affected by the site options, and by a realistic appraisal of the way forward. The warmest praise must be given to the staff at both the hospitals mentioned by the hon. Lady. They realise that in such a small area of London we cannot have King's, Guy's and St. Thomas's all competing with each other and all having a flourishing future. The reviews will be closely considered before final decisions are made.

The hon. Lady is concerned about her constituents, so I say to her that within Southwark, Lewisham and Lambeth no fewer than 112 proposals to improve the family doctor service are going ahead. As 90 per cent. of care takes place in the community, that is most important to her constituents.

Mr. Matthew Carrington (Fulham) : Will my right hon. Friend confirm that the Charing Cross hospital has been highly commended by the specialty reviews, especially for


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its work with cancer, plastics and neurosciences? When reviewing the future of hospitals in west London, will she bear in mind that the Charing Cross is not only a superb hospital but that it is also by far the best located to serve the population of west London?

Mrs. Bottomley : Once again, my hon. Friend is a great advocate for the hospital that serves his constituents so well. As he says, the independent reviews have identified a number of areas in which it provides a high quality specialist service. That fact now has to be considered alongside viable long-term options, and my hon. Friend knows as well as anybody that, within range of his constituency, his constituents can go to the Hammersmith, the Chelsea and Westminster, the Marsden, the Royal, Brompton and also to St. Mary's or Queen Charlotte's, which are not so far away. The duplication of specialist centres in London is extremely costly and inhibits the ability to make the progress that we all want to see in London.

Mr. Simon Hughes (Southwark and Bermondsey) : Given the undertaking that the Secretary of State gave to the right hon. Member for Bethnal Green and Stepney (Mr. Shore), and given that there is all the difference in the world between rationalisation and reduction, can the right hon. Lady say that no resident of London, worker in London or visitor to London will have any services that are currently available taken away as a result of the review process?

Mrs. Bottomley : I give the hon. Gentleman a clear assurance that the changes in London are about improving health and health care. He will know that in his area there has already been investment in King's accident and emergency department, and the £10 million development of the theatre blocks. The changes will be designed to ensure that there is further progress in reducing waiting times and in improving primary care-- the 112 schemes in Lambeth, Southwark and Lewisham that I mentioned to the hon. Member for Vauxhall (Ms Hoey) are an example of that--as well as in strengthening the district general hospital services and in the proper development of the specialist services. The changes are about improvement.

Several hon. Members rose--

Madam Speaker : Order. We shall move on. The subject will doubtless be with us time and time again.


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European Council (Copenhagen)

4 pm

The Prime Minister (Mr. John Major) : With permission, Madam Speaker. I will make a statement about the European Council Copehagen, which I attended with my right hon. Friend the Foreign Secretary. The principal issue before the Council was how to promote economic growth throughout the Community. Although Britain is now emerging from recession, a number of European countries are still seeing their economies shrink-- five are expected to be in recession during this year. Unemployment has grown throughout the Community and now totals 18 million--in most countries it is still rising, and in some it is rising quite sharply. Against that background, the President of the Commission presented options for economic revival in the medium term. That document has been placed in the Library of the House, together with the conclusions of the Council.

I largely agreed with the diagnosis set out by the President of the Commission, although not with all his proposed remedies. In the subsequent debate, I was encouraged by the wide recognition that the Community had to improve Europe's overall competitive position and to address the trend of rising unemployment throughout all of the past 20 years.

The Council agreed a number of practical measures to improve Europe's economic prospects. We stressed the importance of low inflation, specifically in order to improve cost competitiveness and achieve sustainable growth ; we reaffirmed the priority given at the Edinburgh Council in December to growth and investment in our public expenditure programmes ; we decided to expand the temporary lending facility of the European Investment Bank from 5 billion to 8 billion ecu, with a particular emphasis on helping small and medium-sized companies ; we agreed that it was vital to reduce fiscal deficits--without that, much of Europe will not be in a position to reduce its interest rates.

The argument that the Community had to keep down costs in order to improve competitiveness and create new jobs was widely supported at the Council. It was felt that, unless that was achieved, we would find ourselves increasingly uncompetitive against, not only the Pacific countries, but also our primary competitors in the United States and Japan. It was also recognised that all Europe, without exception, had to face the problem of the rising costs of social provision, brought about by demographic and other changes. The European Commission has been invited to present a White Paper on a medium-term strategy for growth, competitiveness and employment for discussion at the European Council in December. Member states will be submitting proposals for the White Paper. I believe that that will enable the Community to build on the European Council's new emphasis on competitiveness. Over the next six months, we shall press for reforms to increase flexibility in the labour markets and reduce unemployment. I hope that that will lead to a genuinely radical report at the December Council.

Following earlier Council discussions of subsidiarity, the European Commission has now produced a first list of items on which it has decided not to propose legislation. I will place that list in the Library. At the next Council, the


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Commission will produce a further list, showing existing legislation that will be either repealed or amended. Subsidiarity was a controversial provision in the Maastricht treaty some time ago, but we now have strong support for our position from a number of member states. Subsidiarity is becoming a central element in the Community's decision making.

There was a substantial discussion of the Community's external policy. I would draw attention to only four specific items. First was the importance of urgent progress in the Uruguay round. I am in no doubt that a general agreement on tariffs and trade will benefit all Community members without exception, but there is a long way to go in a short time if a satisfactory agreement is to be reached during this calendar year.

Secondly, the Council was keen to see rapid progress in the enlargement negotiations with Austria, Finland, Norway and Sweden. We set 1 January 1995 as the target date for their entry--earlier than previously expected. Their membership, in my judgment, will strengthen the Community.

Thirdly, looking to the longer term, the Council agreed that the six associated countries of central and eastern Europe should be invited to join the Community in due course. It will, of course, take some time until they are ready. In the meantime, we will help them by increasing the Community's political links and by opening our markets more rapidly to their goods. A package to that effect was agreed. Fourthly, the Council acknowledged the need to recognise Russia's international status, and agreed to my proposal to offer summits between the Community and Russia twice a year.

The deteriorating situation in Bosnia was discussed both by Foreign Ministers and by Heads of Government. Those discussions included the possibility of lifting the arms embargo. We agreed that the Community should encourage the efforts of Lord Owen and Mr. Stoltenberg to promote a fair and viable settlement. This view was widely shared, and is reflected in the Council's declaration on Bosnia-Herzegovina. I argued that lifting the arms embargo would jeopardise the humanitarian operation and provoke a bloodier and perhaps wider war, with perilous consequences. We agreed after discussion that it was better to seek a peaceful settlement acceptable to all sides. But, as the Council made clear, this cannot be a solution dictated by the Serbs and Croats and at the expense of the Muslims.

ds to implement the safe areas resolution. The United Kingdom is, of course, as the House is well aware, already making a full contribution.

This was a practical Council. It addressed directly the concerns of the peoples both east and west. It put in hand work on a new economic approach to make Europe more competitive and increase growth and employment. We will return to those matters at Brussels in December.

Mr. John Smith (Monklands, East) : I thank the right hon. Gentleman for his statement. I should like first of all to welcome some aspects of the Council's deliberations and conclusions.

On enlargement, it is gratifying that the Council agreed that the objective should be to have the accession of


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Austria, Finland, Sweden and Norway agreed by 1 January 1995, and that a positive approach has been taken to the associated countries of eastern and central Europe. I welcome also the positive statement on racism and xenophobia in Europe, which is timely and constructive. I hope that the Prime Minister will find it possible to do the same. On the need for growth in the Community's economies and the vital importance of reducing unemployment, I welcome the increase in funds available to the European Investment Bank, which I hope will be of advantage to British enterprises. I also welcome the recognition in the communique that the recovery must be investment led.

However, there are some issues covered in the Council's discussions which must be a cause for concern to the House. The first of those concerns the grave and deteriorating situation in Bosnia-Herzegovina. It was important that the Council did not agree to the lifting of the arms embargo, which would have made a bad situation even worse. However, does not the Prime Minister recognise that such proposals gain currency because of the total failure to achieve the previously agreed policies in a number of crucial areas?

First, is it not the case that the designated safe areas are not in fact safe and that extra troops are required to make them more secure? The Secretary-General has asked for an extra commitment of 7, 500 personnel. What is the United Kingdom Government's response to that request? Should not the Government follow the French example by agreeing to augment the British provision?

Secondly, is it not the case that the borders of Bosnia-Herzegovina have not been sealed? Why do the Government still rule out the use of limited air strikes to help achieve that objective?

Thirdly, is it not the case that sanctions are still wholly inadequately enforced? Should not they now be extended to include Croatia in view of the recent deplorable activities of the Croats towards their Muslim neighbours?

Fourthly, is it not obvious that there is a lack of any clear political objective since the Washington agreement effectively torpedoed the Vance- Owen plan? What is the point of making declarations about not accepting a territorial solution dictated by Serbs and Croats at the expense of the Muslims if they are not made effective?

On economic recovery, I note with interest that the United Kingdom Government are party to a communique which invites consultations to be encouraged among the social partners. Would it not be helpful if the Government accepted the need for such a dialogue here in the United Kingdom?

Do the Government not appreciate that the importance of public investment in the economic infrastructure and in skills development, which the Council has recognised in its conclusions, is just as relevant to the United Kingdom economy? Is it not the lack of such investment over the past 14 years which has caused Britain to be ranked 19 out of 22 in terms of economic strength by the World Economic Forum, below Spain, Portugal and Finland?

Surely the Government are not in a strong position to give advice or a lead to our partner nations when the same survey showed that, after 14 years of Conservative government, Britain was rated 21st out of 22 in the funding of research and development, and bottom--22nd out of 22--in industrial production.

Instead of seeking to turn the clock back by opposing social progress in Europe, should not the Government


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have as their objective the creation of a high-productivity, high-skill and high-wage economy in Britain and in the Community, instead of seeking to compete on the basis of low costs and low skills, with all the adverse consequences that that would have for the people of this country ?

The Prime Minister : The right hon. and learned Gentleman raises a number of points that I will deal with in turn. I am grateful for his welcome to the agreement on enlargement for the European Free Trade Association countries and our further approach to the eventual arrival in the Community of the central and east Europeans. That is the right way forward.

There was no dissent whatever on the racism and xenophobia proposals that were made and agreed in the conclusions of the Council. It is precisely for that reason that I did not mention them, but I welcome them ; they were partly inspired by British initiatives, and I am delighted that they were generally agreed.

As for growth and the European Investment Bank the extra funds for the European Investment Bank are more modest than we ourselves would have accepted. We would have accepted a larger increase in the European Investment Bank funds, and that may yet come about when the matter is discussed in ECOFIN over the next few weeks.

On the subject of Bosnia, I am grateful for the right hon. and learned Gentleman's support for the position that we have taken on the arms embargo. I know that it is not shared universally in the United Kingdom, but I believe passionately that it is the right position for the United Kingdom Government to take at the moment. As for safe areas, the Secretary- General has indeed called for an extra 7,500 troops, and I understand this afternoon that the French Government have agreed to send an extra 800 towards that particular contingent. I understand that some other European Governments--in some cases, perhaps, some who have no troops there--may also consider sending further troops. I do not immediately have that in mind, but we are sending 12 Jaguars to assist with other elements of operations in and around Bosnia, and they will depart very shortly.

On sanctions, their extension to Croatia may indeed be necessary. We do not judge it necessary at the moment, but it is certainly not something that I would wish to rule out. We may wish to go down that path.

As for the political objective, it is really the most straightforward of all political objectives. We want first and foremost to stop the fighting and stop the killing. That is why we have made such a substantial contribution to the humanitarian effort, and also the diplomatic effort, over recent months.

On the various points on economic recovery that the right hon. and learned Gentleman mentioned, despite his criticisms of the position in the United Kingdom, we are now clearly coming out of recession. Five of our European partners are now heading into recession. A number of our European partners now have unemployment on a very sharply rising trend, whereas ours is on a downward trend. In addition, we now have rising exports, in sharp contrast with a number of our European partners.

As for the low-wage, low-cost economy, I have to remind the right hon. and learned Gentleman of some underlying realities in terms of job creation and prosperity


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right across Europe. It is to address those realities that we have raised the question of competitiveness and of social costs. Taking the Community as a whole, labour costs in manufacturing-- dear, I know, to the hearts of Opposition Members--rose by 4 per cent. a year throughout the 1980s. The increase in the United States was 1 per cent. a year, and in Japan there was no increase. That trend cannot continue unless we wish to see rising unemployment in this country.

Average labour costs were 20 per cent. higher in the Community than in the United States and Japan, and non-wage labour

costs--predominantly social on-costs--were almost twice as high on average in the Community as in the United States. That is not a coincidence, given the rising level of unemployment over the 20-year period.

I shall illustrate that point for the benefit of the right hon. and learned Gentleman. In Europe, growth achieves far fewer jobs than in the United States and elsewhere. I say that with no pleasure. However, in recent years, four times as many new jobs have been created in the United States as in Europe, from the same amount of economic growth. That suggests that dramatic changes are needed if we are to attack the problem of the 17 million people in Europe who are unemployed.

I understand the attraction of improving the terms and conditions of people in work. I should have thought that people would also be concerned with bringing back into work the 17 million people who are out of work. That is why we have raised the question of competitiveness and the need to look carefully at social costs.

Mr. David Howell (Guildford) : Is not the sheer common sense of my right hon. Friend's emphasis on competitiveness and minimising overheads-- thus maximising the growth of private sector jobs--becoming more obvious as time goes by? Does he agree that those who took a different line at Copenhagen and urged that social overheads be increased were paving the way not only to fewer jobs in Europe but also to protection, which would in turn lead to still fewer jobs and still less prosperity in Europe?


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