House of Commons Hansard Debates for 23 Jun 1993

The Prime Minister : I agree with my right hon. Friend, particularly about the dangers of going down the route that would lead ultimately to protection. That would be the only way in which an uncompetitive industry could be safeguarded within the EC. There has been a sharp change in the attitudes of a number of our European partners to competitiveness and social costs--a change not just in their oratory but in what they are doing in their countries. For example, the German Government are proposing to cut the levels of unemployment and other benefits because they believe that to be necessary. In Holland, cuts are planned in social security benefits and child allowances. The Italian Government plan to raise pension ages and introduce new health service charges.

That is not because, ideologically, those countries wish to do that, but because they must recognise that there is a limited amount that can be afforded unless all our industry is to be priced out of business. We would then have unemployment on a scale that would be unimaginable.

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[Interruption.] At that point, the hon. Members who sit below the Gangway would blame the politicians who did not take action in time.

Mr. Paddy Ashdown (Yeovil) : The Council's emphasis on unemployment was welcome. The Prime Minister may have found it odd that the Council was dominated by the question of unemployment and of getting people back to work, whereas the Chancellor, in his Mansion house speech, could scarcely bring himself to utter the word

"unemployment".

In my judgment, the Prime Minister is absolutely right to say that the challenge to Europe is how competitiveness can be maintained and improved while the social cohesion of our nations is maintained. The Prime Minister talked about underlying reality. He should visit one of our most successful employers such as Toyota, where I was on Monday. The company will tell him of the underlying reality of maintaining competitiveness. It will tell him that that underlying reality lies in investing in the work force. It lies in investing in training. It lies in valuing one's work force and in providing them with the necessary social benefits. That is what Toyota believes will provide the high-value-added, high-investment, highly skilled work force that we need for the future. Does the Prime Minister realise that, by tracking a different course and cutting Britain out of that debate, he is doing our country, our workers and our economy considerable damage for the future?

I want to refer to Bosnia. The emphasis that the Council has at last placed on taking steps to protect the Muslims is very welcome, but if it is to will the ends, it must also will the means. Where will the troops come from? Is it not the case that the French have more troops in Bosnia than we have? If the French are prepared to reinforce, are we not prepared to make a contribution beyond that which we have already stated we will make? Does the Prime Minister realise that, if we are not prepared to say where the troops will come from, we shall yet again be condemning the European Community to make a statement that will not be put into practice?

Does the right hon. Gentleman realise that the present wretched situation in Bosnia was entirely inevitable from the very moment when we let the Serbs understand that they could carry out aggression and that we would not stop them? Has he any idea of the size and cost of the failure, not of the soldiers on the ground but of the politicians in Europe these last nine or 10 wretched months?

The Prime Minister : First, let me try to respond to the right hon. Gentleman's second point, on Bosnia. Right from the start, there were, in reality, only two ways of dealing with this whole wretched miserable war. [ Hon. Members :-- "For whom?"] For anyone. The first alternative was to put in literally hundreds of thousands of western troops. [Interruption.] That is the view of every political or miltary leader who has been deeply involved in the matter. No one was prepared for that.

I wonder whether, if we had done that, we would have had the right hon. Gentleman's support when the dead and injured troops came back here. The only other way to deal with the problem was the way that we have chosen, which is to deal with the humanitarian aspects and seek a negotiated settlement--painful and difficult though that may be. That is what we have sought to do.

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The right hon. Gentleman is wrong to say that the French have more troops in Bosnia than we have. The French have more troops in Yugoslavia as a whole but Britain has more troops in Bosnia than any other nation at present.

The right hon. Gentleman asked where the 7,500 troops will come from. The commitment of troops arises from a United Nations resolution. It is not just the countries of the European Community that have committed themselves to contributing towards those troops : we have made a substantial contribution. Other European Community countries have indicated that they are considering doing the same. Beyond the Community, others will also make a contribution. It does not help anyone for the right hon. Gentleman to assume that it is just the Community that must deal with this matter, when that is patently not the case.

On the right hon. Gentleman's earlier point about investment, it is not odd that we spent so long discussing these matters at the European Council. We had been pressing for a long time for a realistic and frank discussion in the Community of what really deals with growth. My right hon. and learned Friend the Chancellor has been stressing the need for flexibility and social changes for a long time ; he was doing so long before he became Chancellor--sometimes, when he held other positions, to the frustration of others.

If the right hon. Gentleman wants to know about investment, he asked the wrong question of Toyota. He should have asked, "Why did you invest in this country?" The answer to that question lies in the supply side policies that the Government and their predecessors have followed since 1979.

Several hon. Members rose--

Madam Speaker : Order. Before we proceed any further, I remind the House that I am now looking for single direct questions to the Prime Minister. I want brisk exchanges so that I can call as many hon. Members as possible.

Mr. John Biffen (Shropshire, North) : I welcome the proposals for Community enlargement, and congratulate my right hon. Friend on his work to that end. But in the spirit of what is practical, which he said underlined the Copenhagen Council meeting, was consideration given to revising the timetable for economic and monetary union in the light of the current state of the European economies?

The Prime Minister : In the interests of observing your admonition, Madam Speaker, I am tempted simply to say "No", but my right hon. Friend's question deserves a more comprehensive answer. Revising the timetable was not considered but, of course, the convergence criteria that we agreed in Maastricht need to be met before there can be any progress. As I have told the House before--I am happy to reiterate it today--I do not think that there is a snowball in hell's chance of those criteria being met on the previous timetable.

Mr. Neil Kinnock (Islwyn) : I say to the Prime Minister with regret that, coming from him, "flexibility" and "deregulation" in the labour market are euphemisms for lower wages, lower skills and greater insecurity. That is no way out of the difficulties that this country and other comparable countries face, because attempts by economies

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such as ours to go down market in the world economy simply mean impoverishment and social fragmentation, as they have in many parts of the United States.

I share the right hon. Gentleman's enthusiasm for competitiveness. The road to that competitiveness, lower costs and wealth creation must lie in encouraging innovation, deepening and broadening skills, and achieving greater success in the modern world, not in a wage-cut world.

The Prime Minister : On the right hon. Gentleman's latter point about innovation and deepening and broadening skills, I stand full square with him. It is not least for that reason that we have greatly increased the number of our young people going into higher education--our target of one in three by the turn of the century is nearly met. The encouragement that we have given people to develop skills in polytechnics and elsewhere is well known to the right hon. Gentleman. On his earlier point about euphemism, I tell him that it is a euphemism for more jobs, more prosperity and more growth.

Sir Peter Hordern (Horsham) : Does my right hon. Friend believe that Mr. Delors and the European Commission have any idea of the risk to employment that is brought about by the working time directive and other such measures, and increasing competition from the far east and the United States? Does my right hon. Friend see a serious risk of protectionism and a lack of will to bring about a successful conclusion to the Uruguay round?

The Prime Minister : In my remarks to the European Council, I stressed again specifically the damage that we believe is done by the working time directive and a number of other directives that I particularly specified. There are differing views in the Community about that, but I think that the views that oppose ours are less strongly held today than they were a few months ago.

There is a danger that some nations in the European Community may have a tendency towards protectionism, rather than dealing with the underlying problem of making changes that will ensure that they are competitive around the world. That view is not shared across the Community.

A number of other states join us strongly in our belief that we need to deal with our costs--employment on-costs are perhaps predominant among them --to ensure that we are competitive. If we were to get in a position where protection led to a trade war among the United States, Japan and Europe, let no one be in any doubt whatever of the devastating effect that that would have throughout Europe, and the devastating impact that it would have on jobs in each and every country of the Community.

Mr. James Molyneaux (Lagan Valley) : Is the Prime Minister aware of the widespread support for his determined efforts to instil some common sense into the deliberations of the Council, not least in the area of the irresponsible meddlings in Bosnia? In the past, it would seem that our European partners have tended to say "Go on" instead of "Come on" in terms of military commitment.

The Prime Minister : I am grateful to the right hon. Gentleman. Some of our European partners have, of course, made a substantial contribution. Others perhaps have tended to stand back a little more. I think that the

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right hon. Gentleman puts it more crisply than I would have done, but I understand, as does everyone else, precisely what he meant and whom he means.

Mr. Bowen Wells (Hertford and Stortford) : Will my right hon. Friend confirm that there was no discussion of the social charter at Copenhagen? Was there any recognition of the serious harm that it does to competitiveness throughout Europe?

The Prime Minister : There was certainly a recognition of the harm it does, because I referred to it in the remarks that I made. I am bound to say that there was less obvious enthusiasm for the social charter, and there was no indication from other member states that they were inclined to take a harshly critical view of us for not being part of it. Clearly, many of them still have their old oratory and their own ideas to cling to. But I have hopes that, as month succeeds month, reality will dawn ever more clearly across the Community.

Mr. Andrew Faulds (Warley, East) : As for safeguarding the future of Bosnia, we have nothing but words, words and words. Does the Prime Minister realise that he should be ashamed of himself, as should his Foreign Secretary and the supposed leaders of the European Community, for his total spinelessness and pusillanimity? [Laughter.] Stupid bastards! They are laughing about this.

Madam Speaker : Order. The hon. Gentleman had better calm down--as indeed Ministers on the Front Bench had better calm down.

The Prime Minister : In the interests of brevity and in view of your injunction a moment ago, Madam Speaker no.

Mr. Alan Howarth (Stratford-on-Avon) : Does my right hon. Friend agree that there is a large constituency across Europe for the Conservative vision of an unbureaucratic, decentralised Community of member states joining together for sensible, practical and limited purposes, and that that has been increasingly reflected in the willingness of other member Governments to follow his lead in embracing both subsidiarity and enlargement?

The Prime Minister : My hon. Friend is right about the changing mood across the European Community. When there was clear year-on-year growth of 3.5 per cent. a year, many people were inclined to overlook some of the difficulties of central bureaucracy. Now that that 3.5 per cent. year-on- year growth has disappeared, public opinion is perhaps ahead of political opinion across Europe in being suspicious of moves towards centralisation. I regard that as an attractive change of opinion, because I believe that it will bring more realism among politicians of all shades across Europe about what can and should be attempted in any reasonable time scale.

Mr. Alfred Morris (Manchester, Wythenshawe) : What is the Prime Minister's assessment now of the prospects for success in the Uruguay round, and what discussions did he have with other Heads of Government in Copenhagen about the pace of progress, in particular with Mr. Mitterrand?

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The Prime Minister : I have often said how important I believe the settlement of the Uruguay round is. I bitterly regret that we have not had a settlement for the past two years. For far too long, Heads of Government across the world have committed themselves to reaching a settlement of the Uruguay round by the end of that year. The end of that year has come and no settlement has come with it. I regret that very much. So I am concerned that we do not yet have an agreement. There are clearly problems to be overcome. Some progress has been made. The progress made on the oilseeds agreement in the Community was definite progress. We may be able to form a clearer judgment after the G7 summit in Tokyo in a month or so.

Mr. Nicholas Winterton (Macclesfield) : Is my right hon. Friend aware, as I suspect he is, that Europe is becoming more and more uncompetitive with the rest of the world year by year, and that, in addition, Europe is losing manufacturing capacity to the rest of the world? Is it right that, when we are beginning gradually to come out of recession and most of Europe is going into recession, we are not spending more time seeking business in north America, south America and the Pacific rim, where the real wealth of the world is currently being created?

The Prime Minister : I am certainly aware of the competitiveness points. I am keen to ensure that primarily Britain but also the whole of Europe seeks to become more competitive and goes to those markets to pick up the business that can best be undertaken in Britain or elsewhere in Europe. We must do that.

But that will not be achieved, as my hon. Friend said, unless we are competitive. That means that we must address seriously all the component costs that go into the cost of our goods. Predominant among those are labour and social costs. I know that that will be interpreted by Opposition Members in the way that they always interpret it--as recommending a sweatshop economy. That type of thinking about a sweatshop economy leads to 17 million people being unemployed across Europe. The people who genuinely care about creating jobs and employment are the people who will take action to make this country competitive, and they sit on these Benches.

Mr. Peter Shore (Bethnal Green and Stepney) : On the key question of unemployment and recession in the Community, is not the Council of Ministers' policy becoming almost completely schizophrenic? Is it not strange indeed that we should be urged to increase public expenditure, including public investment in infrastructure and other projects and that money should be put aside to subsidise interest rates up to a production of 3 per cent. when at the same time all member states are committed to economic and monetary union and are prisoners of the exchange rate mechanism that keeps European interest rates more than twice as high as the interest rates in Japan and the United States of America ? That is not merely schizophrenic, but completely absurd.

The Prime Minister : The right hon. Gentleman is perhaps addressing his remarks to the wrong Head of Government. Within existing levels of public expenditure, we have sought to ensure the priority of capital investment as against revenue expenditure. That is what happened in

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the public expenditure survey carried out last autumn, and certainly that will be a priority in our public expenditure this year.

The right hon. Gentleman touches on an intriguing point with the proposition that is to be discussed by ECOFIN to have subsidised interest rate lending by the European Investment Bank to small and medium-sized companies. He may be interested to know that a reason why that has gone to ECOFIN is that I flatly opposed it on the grounds of competition.

Sir Peter Tapsell (East Lindsey) : Did any Head of Government at Copenhagen make the point that it was somewhat futile to have a Community summit with unemployment at the head of the economic agenda when the terrible and still worsening unemployment position in the Community has been caused largely by the past, present and continuing high interest rate policies of the independent central bank of Germany?

The Prime Minister : No one entirely agreed with the point made by my hon. Friend. The clear indication in the summaries that we saw and discussed is that, although the recessionary impact of the past few years has accelerated the growth of unemployment across the Community, there has been an underlying growth in unemployment that has gone on through boom and slump during the past 20 years. There has been an inexorable rise during the past 20 years.

Apart from the impact of the recession over the past few years, it is the realisation of that underlying and inexorable rise over two decades that has finally prompted so many European Heads of Government to decide that they must address this problem seriously and urgently.

Mr. Dennis Skinner (Bolsover) : When the Prime Minister talks about unemployment, is he aware that he is making a good case for getting out of the Common Market? When I saw the press conference during the past few days, for the life of me I did not realise that they were discussing some of the things that he has mentioned today. Every time, he was asked when he was going to sack his Minister of State, Northern Ireland Office. I will ask him that now : is the Prime Minister going to sack him or keep him?

The Prime Minister : The hon. Gentleman may be surprised to know that that was not discussed in Copenhagen.

Sir James Kilfedder (North Down) : May I congratulate the Prime Minister on a successful summit, in which he played a positive and leading role? Can he say whether there was any discussion of federalism, as expected, or did the summit concentrate on the need to deal with competitiveness to get rid of high unemployment and inflation?

The Prime Minister : It may have been a subliminal theme, but it did not see the light of day too often. At the outset, I invited colleagues to throw away Euro-theology. Perhaps federalism comes under that heading.

Mr. Peter Mandelson (Hartlepool) : Does it not worry the Prime Minister that, as the public see splits over policy in Bosnia, inaction over unemployment and disagreement about some of the moat he has some

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pesonal responsibility, above all, for ensuring that Europe's ability to work together is increased, rather than constantly frustrating and undermining it, as seems to be his approach to European affairs in general ?

The Prime Minister : The hon. Gentleman's idea of how Europe should work together is that Britain should roll over and do what everybody else invariably wants. That is not the way I see European co-operation ; it is not the way for any British Government to behave ; and it is not what we are going to do.

Mr. Patrick Cormack (Staffordshire, South) : While disagreeing emphatically with what the hon. Member for Hartlepool (Mr. Mandelson) has just said, may I ask my right hon. Friend what steps the Community is now taking to inform the Serbs--those in Serbia and those in Bosnia--that safe havens in Bosnia will be made safe and that they will not be allowed to keep territory that was acquired brutally ?

The Prime Minister : That, essentially, was the message of the communique that resulted from the summit. Today, the European Community's co-chairman, Lord Owen, will meet the partners--the Serbs, the Croats and the Muslim representatives--to discuss their ideas about the search for a settlement. I have no doubt that that point will be made again by Lord Owen, just as it is being made frequently by my right hon. Friend the Foreign Secretary and other European Foreign Ministers. My hon. Friend is right : this point needs to be emphasised continually. He has my promise that it will be emphasised.

Mr. Tam Dalyell (Linlithgow) : In Copenhagen, did anyone think to send to Mrs. Brundtland an indication that Norway would be more welcome if it were to change its policy on whaling ?

The Prime Minister : I know the point that the hon. Gentleman has in mind. My right hon. Friend the present Secretary of State for the Environment has on a number of occasions made very plain the British Government's position on that matter ; but it was not a subject for discussion at Copenhagen.

Mr. Tim Rathbone (Lewes) : Will my right hon. Friend remind the House of the fact--and re-emphasise it--that there seemed to be across-the- board agreement about the importance of low interest rates to the re- establishment of growth and the reduction of unemployment ?

The Prime Minister : Yes, there certainly was some agreement about the attractiveness of that. However, perhaps just as important is the fact that there was agreement that the way to achieve the economic circumstances that would enable interest rates to come down is to reduce fiscal deficits right across the Community. We in this House are well aware of our own difficulty with the fiscal deficit. It is a difficulty faced by many other European countries. The need to reduce fiscal deficits throughout Europe in order to achieve low interest rates was well understood and clearly expressed.

Mrs. Margaret Ewing (Moray) : While welcoming the accelerated time scale for enlargement of the Community, may I ask the Prime Minister what discussions took place about the implications of that extension for the various institutions of the Community? We have to deal with this matter in a practical manner, but we must also ensure that

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there is democratic accountability to every citizen of the Community. Will the Prime Minister be more forthcoming about the time scale that is envisaged in the case of eastern and central European countries?

The Prime Minister : The hon. Lady has touched upon a very practical and important point. As part of the enlargement negotiations, some consideration will have to be given to institutional change. The voting weighting of the incoming countries is an obvious illustration. But really substantial institutional change is likely to be discussed at the next intergovernmental conference, which will follow the EFTA states' entry to the Community.

Mr. Raymond S. Robertson (Aberdeen, South) : Does my right hon. Friend agree that the best way to secure stability and democracy in eastern Europe would be to bring the countries there into full membership of the European Community and, in the meantime, to open up free trade with them?

The Prime Minister : My hon. Friend is quite right. I can say with absolute conviction that we have been the foremost proponents of ensuring that the central and eastern European countries are enabled to join the Community when they are ready and if they wish to join. Two or three years ago, it seemed a rather forlorn hope that the whole Community could be persuaded to agree to that policy ; it has now not only agreed to the policy but set it out as a firm Community objective.

Mr. Bob Cryer (Bradford, South) : In the course of the discussion of the competitive position, did the Heads of Government consider the position of farmers and a cut in the common agricultural policy, which accounts for most of the £2.5 billion that this country pays each year? Do the Heads of Government ever sit back and consider the benefits that are supposed to flow from membership of the Common Market? Or would an unaccustomed silence fall if they were to try?

The Prime Minister : An unaccustomed lot of unemployment in the hon. Gentleman's constituency would follow if we were to fail to consider the benefits of joining the European Community. Sixty per cent. of our exports- -this will apply to the hon. Gentleman's constituency, as well as to every other Member's--result from our trade relationship with the European Community.

If the hon. Gentleman thinks that his constituents will stay in work without jobs, he is living in cloud cuckoo land. On the question of agriculture, it may have escaped the hon. Gentleman's notice, as he lives in his own fantasy land, that this country led the way to securing an agreement on reform of the common agricultural policy.

Sir Teddy Taylor (Southend, East) : Is it not a shame that no time was given to discussion of the crisis in agriculture? Despite these wonderful reforms, spending this year is breaking all records, as is the size of the cereal mountain. Does the Prime Minister agree that the best way of cutting costs and creating jobs would be to wind up this absurd policy, or to promote the idea that member states should be able to disengage from it, in the interests of farmers, consumers and jobs?

The Prime Minister : My hon. Friend is not right.

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Sir Teddy Taylor : Want to bet?

The Prime Minister : I did not know that my hon. Friend was a natural better, but I may well be tempted to take him on. I do not think that he is right about this matter. The common agricultural policy has been discussed on many occasions. If it were to be discussed at every meeting of Heads of Government, it might be attractive to my hon. Friend to have Council meetings lasting three weeks, but it would not be attractive to me.

Ms Joyce Quin (Gateshead, East) : Can the Prime Minister explain, why, in television interviews after the Council meetings, the Dutch Prime Minister and the French Foreign Minister both repudiated his views about European Community social legislation? Can he explain also why employment in the Netherlands has dropped sharply throughout the past four years even though that country has high levels of employment protection?

The Prime Minister : The hon. Lady is clearly unaware that the Netherlands is at present cutting social protection.

Mr. James Paice (Cambridgeshire, South-East) : Is not the best news for Britain the decision to bring enlargement forward to 1 January 1995? Will my right hon. Friend confirm that that would not have happened without the commitment at Maastricht ; that, as a result, Britain will for the first time be one of a majority who are net contributors ; and that, for the first time in Europe, those who pay the bills will be the voting majority?

The Prime Minister : I can confirm what my hon. Friend has said. There will be many advantages in a larger Community, including the EFTA states. It will certainly be a material advantage to have four more net contributors to the Community budget : that will add very dramatically to proper financial discipline when the Community makes decisions on spending.

Mr. Harry Cohen (Leyton) : How do lower wages, less social provision and greater unemployment, allegedly for the sake of competitiveness, differ from the policies that led to the great depressions of the 1920s and 1930s?

The Prime Minister : The hon. Gentleman would do well to go back and study the causes of the great depression. The policies that he advocates, with great sincerity and great regularity, are precisely those that would ensure that we had more unemployment. It would be worse and longer--in fact, for ever.

Mr. Ian Taylor (Esher) : The Prime Minister showed at Copenhagen that, when we argue positively about a wide range of European issues, we have nothing to fear about the Community or its Councils. Will my right hon. Friend continue in that positive vein by stressing that economic convergence may take longer than expected, but that it is still in this country's interests that it should occur, and that the same thing applies to fiscal balances? In those circumstances, will he come forward, before the next summit, with positive ideas about how the European Monetary Institute might conduct its affairs from 1 January, and perhaps revive the idea of the hard ecu?

The Prime Minister : My hon. Friend is entirely right about the importance of economic convergence and the specific fiscal and other criteria that we set out in the Maastricht treaty. Quite apart from the part they play in the move to economic convergence across Europe, those

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criteria are right on their own merits for control of the economy in each and every European country. All the countries will consider how the EMI will work.

Mr. Tony Banks (Newham, North-West) : Did any discussion take place in Copenhagen about the nightmare scenario involving the thousands of obsolete and leaking nuclear weapons held in the old Soviet Union? Has the Prime Minister any firm proposals to assist the various states of that former country to decommission and get rid of those terrible weapons?

The Prime Minister : Yes, that issue has been discussed in the past, and it was discussed again in Copenhagen. We are helping the Russians and other eastern European countries, bilaterally and as part of the Community, to deal with that problem. It is my intention and that of the other European Heads of Government to raise that matter yet again at the G7 summit in Tokyo. We require the assistance of the United States and Japan in particular if we are to make a comprehensive attempt to tackle the problem.

There is no doubt that any repeat of the accident at Chernobyl would have devastating consequences across a wide part of Europe. It is therefore very much in our interests to take this matter seriously now, and to seek to do something about it.

Mr. Roy Thomason (Bromsgrove) : Has my right hon. Friend seen the article published in yesterday's edition of the Financial Times which said that Mr. Delors is now having to temper his ambitions as power is moving from Brussels to the member states within the Community? Does my right hon. Friend believe that the Copenhagen summit was a further step in that welcome direction?

The Prime Minister : I think that we see in many parts of the Community a more philosophical approach than was once the case.

Mr. William Cash (Stafford) : Given that my right hon. Friend has conceded that the convergence conditions under the Maastricht treaty are unworkable and are likely to lead to higher unemployment, would he care to explain how, in the movement towards 1996, we could get the unanimity required to unravel that treaty? How will that be achieved when about six of the member states have a vested interest in the subsidies they get, and are likely to continue to ensure that that treaty stays in force?

The Prime Minister : No, no : my hon. Friend has,

uncharacteristically, misunderstood the point. It is not my view that convergence is unworkable. I think that it is necessary and desirable, quite apart from being part of the move towards economic and monetary union. What I believe to be unrealistic is the belief that convergence will be reached across the Community according to the timetable set out in the Maastricht treaty.

I thought that that was unlikely when we were asked to sign up to that treaty, which is one reason why we did not do so. Since then, however, the change in economic circumstances throughout the Community has made it

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even less likely that that convergence will be achieved. It is desirable in its own right, but, in my judgment, it is now unrealistic to expect it by 1996 or anything like that date.

Mr. Anthony Coombs (Wyre Forest) : Is my right hon. Friend aware that, although Britain currently attracts more than one third of foreign investment into the Community, the chairman of Daimler-Benz recently said that, due to unrealistic social and environmental costs, he would never build another car factory in his home country? Is that not a demonstration of how right the Prime Minister has been to emphasise the huge improvements and advantages that the British car industry now enjoys over that of Germany? Our car costs are 60 per cent. lower than those of Germany ; that is one reason why Rover is currently outselling Mercedes-Benz in Europe.

The Prime Minister : My hon. Friend is right. I am happy to quote, approvingly, the President of the Commission, who referred to this country as a "haven for foreign investment".

Mr. Iain Duncan Smith (Chingford) : Does my right hon. Friend accept that one of the main reasons why the terrible war in the old Yugoslavia has erupted as it has was Germany's rush to recognise Bosnia and Croatia, against our better judgment? Many hon. Members are concerned that, in Copenhagen, the Germans once again attempted to drive us into a position that is wholly untenable. Does my right hon. Friend accept that we would not think of deploying further troops without a full debate in the House?

The Prime Minister : As I said earlier in response to a question from an Opposition Member, I do not envisage that any further British troops will be sent to Bosnia in the near future.

On the substantive point in my hon. Friend's question, the biggest single element behind what has happened in Bosnia is the collapse of the Soviet Union and of the discipline that that exerted over ancient hatreds in the old Yugoslavia. Once that discipline had disappeared, those ancient hatreds reappeared, and we began to see their consequences when the fighting occurred. There were subsidiary elements, but that collapse was by far the greatest.

Mr. David Shaw (Dover) : Can my right hon. Friend recall the amount of job creation from small businesses from 1983 to 1987? Did he explain to his European colleagues how we achieved that? Can he confirm that the policy in Europe on small businesses and deregulation will be improved in the future?

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