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House of Commons

Thursday 15 July 1993

The House met at half-past Two o'clock


[Madam Speaker-- in the Chair ]


Croydon Tramlink Bill

[Lords] (By Order)

Order for Second Reading read.

To be read a second time on Wednesday 21 July at Seven o'clock.

East Coast Main Line (Safety) Bill

(By Order)

Woodgrange Park Cemetery Bill

[Lords](By Order)

London Local Authorities Bill

[Lords] (By Order) Orders for Second Reading read.

To be read a Second time on Thursday 22 July.

Oral Answers to Questions


Public Sector Borrowing Requirement

1. Mr. Alan W. Williams : To ask the Chancellor of the Exchequer what are the latest figures for the PSBR since 1 April ; and if he will make a statement.

8. Mr. Thurnham : To ask the Chancellor of the Exchequer if he will make a statement on the current level of public sector borrowing.

The Chancellor of the Exchequer (Mr. Kenneth Clarke) : In the first two months of the financial year, the public sector borrowing requirement was £9.3 billion. A deficit of that magnitude is too high and we intend to reduce it.

Mr. Williams : During the 1992 Budget debates, the Chancellor's predecessor, the right hon. Member for Kinston upon Thames (Mr. Lamont), published Treasury forecasts of a borrowing requirement of £32 billion this year, falling to £25 billion next year, £19 billion the following year and £6 billion by 1996-97. In reality, we have a deficit of £50 billion this year and, far from falling away as was predicted, it is a recurring deficit, the Chancellor's biggest problem and an albatross around the neck of the country's economy, perhaps for years to come. Can he explain to me, and to the people of this country, why we were so misled at the time of the general election, and how the Government have got us into this mess?

Mr. Clarke : The hon. Gentleman will find that all forecasts for the PSBR tend to be hedged around with uncertainty. A range of forecasts is being made about next

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year and £50 billion is the Government's current forecast, which is at the upper end of the range. One thing of which I am quite sure is that the forecasts will all have changed by the time that I get to the Budget, let alone at any other time. I propose to make a judgment in the light of the circumstances prevailing when we get to the November Budget.

The hon. Gentleman makes a valuable point, however. The deficit was not planned, or the result of anticipated action. To the surprise of almost every forecaster, the recession in this country was more persistent and lasted longer than anyone expected, thereby causing a longer fall in revenues than anyone expected. The Government have to face up to the consequences of that, and Britain will be one of the foremost countries in Europe in tackling its fiscal deficit.

Mr. Thurnham : Will my right hon. and learned Friend confirm that, unlike the right hon. Member for Yeovil (Mr. Ashdown), the Conservative party has no intention of further expanding the PSBR and placing a greater burden on future generations? Also, was it not the last Labour Government who had to run to the International Monetary Fund because they could not control public spending either?

Mr. Clarke : My hon. Friend is correct. Quite rightly, we face questioning about the size of the PSBR from the Opposition as well as from our own supporters. I get pressed by Conservative Back Benchers to take vigorous action to deal with it. It is impossible for either the Liberals or the Labour party to make a speech from the Opposition Benches without advocating measures that would increase the amount of public sector debt and borrowing. That makes their contribution to debate on the issue seem somewhat irrelevant to real life and to the task of sustaining our recovery and getting out of the recession.

Mr. Sheldon : In the light of the horrendous PSBR, why is the Chancellor of the Exchequer excluding the one area that is easy for him to handle--the level of higher rates of income tax? Those were reduced at a time when the Government thought that the economy was doing well. Now that he understand the reality, why does he not reverse the process?

Mr. Clarke : Because throughout the 1980s extremely valuable supply- side effects resulted from reducing direct taxation from the disgraceful and punitive level at which it was left by the previous Government. I have made no decisions about taxation for the Budget. The right hon. Gentleman, with his experience, knows perfectly well that the revenue-raising consequences of increasing the top rates of income tax are quite slight, but he typifies what I just described--that the only solution that the Opposition can ever think of, in response to such problems, is to put up taxation on somebody or other. If that is the Opposition's only approach, it is damaging to the country's prospects of doing well in the economic world.

Sir Peter Tapsell : In the same spirit that I heretically urged his predecessor, in the salad days of Friedmanite monetarism, to show caution about the Treasury's capacity accurately to measure sterling M3, may I now counsel--it may not be necessary, but, as I have already prepared the question, I shall go ahead--a little caution to my right hon. and learned Friend before he prostrates

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himself before the altar of a £50 billion PSBR estimate, because that notoriously unreliable statistic could lead us into unnecessary difficulty? As experience has shown, the outcome may prove to be billions wide of the mark--no pun intended--either way.

Mr. Clarke : My hon. Friend, who knows me well, realises that I have never drunk of the pure milk of monetarism, any more than he or Lord Lawson did. That remains my view, which is why I dealt with some scepticism with the question about previous forecasts of the size of the public sector borrowing requirement.

Nevertheless, it is important to underline the fact that we face a serious problem. The figure that I gave in answer to the question from the hon. Member for Carmarthen (Mr. Williams) shows that, at present, the monthly PSBR is running in line with the forecast. If it falls faster than I expect, I can probably deal with any problems that that may cause with considerable ease.

However, it is preferable for me to take those forecasts as the best that we have and ensure that I do not just assume that things will come out better but behave prudently and ensure that we are certain that we will get our fiscal deficit down. At the moment, it is one of the principal obstacles that would otherwise lie in the way of sustaining our recovery, which is why it is so blindly irresponsible of Opposition Members simply to suggest that I put up some spending and some taxes.

Ms Harman : Will the Chancellor tell the House that he totally repudiates the proposals of the Tory 1992 Group, particularly its proposal that he should cut 5 per cent. of the public sector work force? Given that that is 300,000 people and that making them unemployed would add £2.7 billion to the dole bill, does he agree that the way to reduce the deficit is not to put more people out of work but to bring unemployment down?

Mr. Clarke : I had an extremely friendly and useful discussion with the executive of the 1992 Group, who presented me with proposals to deal with the problem. Their proposals were infinitely more worked out than any yet produced by the Labour or Liberal parties. I share the instincts of my colleagues in the 1992 committee working group--I think that they call it that--that, in the interests of the economy and taxpayers, we should look first at means of restraining public expenditure. It is hopeless to regard public services, as the hon. Lady always has, as a kind of job creation agency. We can deliver high-quality public services in a more cost- effective way. One has only to look at the effects of contracting out on local government services, and the amount that that is now saving council tax payers in various parts of the country, to see what can be achieved.

European Courts

3. Dr. Godman : To ask the Chancellor of the Exchequer when he last discussed with his ministerial colleagues from other member states of the European Community the question of additional financial assistance being given to the Court of Auditors and the European Court of Justice ; and if he will make a statement.

The Paymaster General (Sir John Cope) : The last formal meeting of the Budget Council of Ministers was on 16 November 1992, when we discussed the 1993

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Community budget, including provision for the Court of Auditors and Court of Justice. Since then, discussions have proceeded informally and through officials.

Dr. Godman : Are Ministers aware of the serious difficulties encountered by the European Court of Justice in ensuring the timeous translation of cases submitted to it by member states, the opinions of its advocate-generals and its own judgments? Does he agree that there is no point in seeking to ensure that the European Court of Justice and the Court of Auditors carry out their work in ensuring compliance with Community law if they are so badly financed by member states by way of the budget?

Sir John Cope : I am certainly aware of some of the delays that take place in the Court of Justice, although they do not occur so much in the Court of Auditors. Both institutions have had increases in financial assistance of an average of 10 per cent. a year for the past couple of years. I do not think that is bad and it means that they do not need such a large increase this year.

Mr. Sykes : Will my right hon. Friend consider ceasing financing the antics of the European Court of Justice altogether and does he think that it is right for it to sit in judgment of the tourist beaches in Britain, especially when so many Mediterranean coastlines and beaches are awash with sewage?

Sir John Cope : One cannot agree with all the judgments that courts make, but that is not a reason for ceasing to finance them or abolishing them altogether.

Growth Rate

4. Mr. Patrick Thompson : To ask the Chancellor of the Exchequer what comparisons the European Commission has made between Britain's projected growth rate over the next two years and the growth rate in other countries of the EC.

Mr. Kenneth Clarke : The European Commission expects that Britain will be the fastest growing major Community country in both this year and next.

Mr. Thompson : On the day when unemployment is continuing to fall in my constituency of Norwich, North and throughout the country, does my right hon. and learned Friend agree that over-regulation of the social and labour markets can damage growth, as has happened in Spain, for example, which has one of the highest unemployment rates in Europe? Will he comment on the folly of those in the House who seek to add to the burdens on industry at a time when business is reviving and unemployment is falling?

Mr. Clarke : I entirely agree with my hon. Friend. We have the highest proportion of population in work of any country in the European Community with the exception of Denmark and, I think, Luxembourg. We have always shown the capacity to create jobs more quickly than other European countries because we have avoided the tightly regulated labour markets and the excessive burdens on industry, which are part of the tradition of some continental countries. It is a pity that that tradition is being reinforced by the social chapter making problems worse, in my opinion, in Germany, Spain and elsewhere. It is extremely important that we in Britain stick to our

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opt-out from the social chapter, which is helping to achieve a much more buoyant recovery in our labour market.

Mr. Trimble : It not it the case that better prospects for the United Kingdom growth rate are due to the fact that we were ejected from the exchange rate mechanism and were thus able to reduce interest rates and reduce the level of sterling? Is not the last thing that we want now either to see interest rates maintained at a higher level than necessary or to see sterling appreciate? Is not there a case for some action on that front?

Mr. Clarke : The answer to the hon. Gentleman's first question in my opinion is no. The five-points reduction in interest rates that we achieved before we left the ERM was as important a contribution to our recovery as the four-point reduction in interest rates that followed. We were seeing the beginnings of recovery before we left the ERM and we are now seeing the results of many of the supply-side changes that we made in the British economy.

Obviously, the hon. Gentleman will not expect me to answer questions on any further action on interest rates. I shall make judgments as and when they are necessary in the light of the monetary guidelines that I have laid out before the House.

Mr. David Martin : Does my right hon. and learned Friend agree that the way in which to create real jobs is to have sustained economic growth, rather than the Keynesian-inspired spending sprees supported by the Opposition parties?

Mr. Clarke : What is now called Keynesian does not often bear much resemblance to the work of John Maynard Keynes, who was very good on monetary policy. I agree that I do not think that John Maynard Keynes or anyone else would have advocated a spending spree to boost the economy at a time of a large fiscal deficit of the kind that we are carrying and is being forecast. That is not an option open to us. Unfortunately, it is an option which is usually seized by the Labour and Liberal parties because they are so detached from the real world.

Mr. Gordon Brown : Should not the Chancellor be alarmed rather than complacent about the finding of the competitiveness unit published this week that British productivity is 25 per cent. below our main competitors, that what it calls our low skills base and research effort are among the worst in Europe, that our national income per head is falling behind that of Finland, Iceland and Italy and that it is now falling to the levels in Spain and Portugal? Amid all those challenges, and now that we have a new Chancellor, where are the new policies?

Mr. Clarke : The hon. Gentleman has taken some selective readings from the extremely valuable document on competitiveness produced yesterday. At least it has enabled him to ask a question without adding to the public sector borrowing requirement, as far as I noticed. He comments on our level of productivity. My right hon. Friend the President of the Board of Trade is right to point out that our productivity is still below that of some of our major competitors, most notably the Japanese.

Throughout the 1980s, we have had the fastest improvement in productivity of any of the G7 nations. It shows how bad things were in 1979 that we still have not caught up with our foremost competitors. If the hon.

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Gentleman looks at the good news today, yesterday and the day before, he will see that the improvements in productivity in British industry during the recovery are quite remarkable and have contributed to the 3 per cent. increase in manufacturing output compared with a year ago, which is the first substantial achievement of this recovery.

Mr. Wilkinson : Has my right hon. and learned Friend seen the latest statistics on the rapid and dramatic decline in car sales in EC countries? Sales there have dropped by no less than 17 per cent. over the past six months, whereas in this country which, thank goodness, is out of the exchange rate mechanism and can again enjoy the benefits of low interest rates and growing demand, we have had double-digit increases in car sales. Would not the French and the Spanish industrialists, for example, agree that the British are much luckier than they are because we are not constrained by artificially high interest rates?

Mr. Clarke : There are other countries that were forced out of the ERM and not all of them are enjoying a British recovery. In terms of the ERM, my hon. Friend is right to point out that the buoyant state of car sales in this country is not matched in other major centres in the European Community. The fact is--let me be cautious again--that we are showing some signs of recovery and it is being sustained at the moment, although we must persevere to keep that up and trust that it strengthens.

In Germany, in France and even in Japan, there are falls in manufacturing output on the latest figures, whereas we have just seen the encouraging figures showing 3 per cent. more than a year ago in our manufacturing output announced only two days ago.

Bank of England

6. Mr. Dowd : To ask the Chancellor of the Exchequer what is his policy regarding payment for work carried out at the Bank of England by sub -contractors ; and if he will make a statement.

The Chief Secretary to the Treasury (Mr. Michael Portillo) : Under the Bank of England charter of 1946, such management matters are for the court of directors of the Bank and not for the Chancellor of the Exchequer. I understand that the Bank maintains a policy of prompt payment against validated invoices for work carried out by its contractors.

Mr. Dowd : I thank the Chief Secretary for that reply and I also thank him on behalf of R. M. Simpson, a small heating contractor in my constituency, which has been waiting two years for the settlement of a £250,000 bill for work carried out at the Bank of England. The company eventually received a reply from the Chief Secretary once I raised the question in the House.

Is not it a disgrace that work done at the Bank of England cannot be regarded as secure and that the Bank does not ensure that the money is passed on to those working for contractors who are working for the Bank-- those who actually do the work? The financial framework under which they execute their contracts needs a complete overhaul, especially for the sake of small businesses which are struggling in these difficult times.

Mr. Portillo : The hon. Gentleman is right to say that we have been in correspondence. Mr. Simpson carried out

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work for Taymech ; in turn, Taymech worked for Bovis, and Bovis was doing some work for the Bank of England. There is a dispute about a claim for loss of expenses. The matter certainly does not rest with the Bank of England and is certainly not a matter for the Chancellor of the Exchequer. There is no valid invoice from Simpson to the Bank of England ; nor could there be, because the contract rests not between Simpson and the Bank of England, but between Simpson and Taymech.

Mr. Jessel : As to work carried out in the Bank of England by contractors, has the Governor got a contract and is it in his contract that he must try to stifle comment in the House on the rate of interest?

Mr. Portillo : No. That is not one of the Governor's

responsibilities. He plays an important part in the vital matter of controlling inflation and I pay tribute to his dedication in that matter.

Tax and National Insurance

7. Mr. Mullin : To ask the Chancellor of the Exchequer what plans he has to increase income tax and national insurance contributions ; and if he will make a statement.

Mr. Kenneth Clarke : I shall be considering options for tax changes in the next Budget over the summer and in the autumn.

Mr. Mullin : I know that the Chancellor is not readily given to embarrassment, but does he feel a tiny twinge of guilt at having been elected on a promise of lower taxes and now to be presiding over some of the largest increases in our country's history. Or am I being naive?

Hon. Members : Yes.

Mr. Clarke : I am not frequently embarrassed and the hon. Gentleman is not frequently naive. As he knows, we have made spectacular progress, beyond what anyone in his party would have thought possible, in reducing direct taxation. We did so for supply-side reasons and, when we first began to get rid of the extraordinarily high levels of direct taxation that we inherited, we found that revenue actually increased as we reduced the level of tax. We have now cut marginal rates of income tax to 25 per cent. and introduced a lower rate of 20 per cent. as well.

We are committed to continuing to reduce income tax when it is prudent to do so. I do not think that it lies in the mouth of any Labour Member to criticise the Government for their tax-cutting record.

Mr. John Townend : Does my right hon. and learned Friend agree that, with the basic rate of income tax at 25 per cent. and national insurance at 9 per cent., the working man has to pay over one third of his income in tax? Is not that level sufficiently high? Is not the big difference between the Labour party and our party the fact that we believe in taking as little as possible from the pay packet of the working man, whereas the Labour party believes in caning taxpayers, particularly those who are hard-working and enterprising?

Mr. Clarke : I agree with my hon. Friend. If I were a Labour Chancellor of the Exchequer, my Back Benchers would be urging on me a rapid increase in taxation of all kinds. However, I am a Conservative Chancellor, and my

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hon. Friend reminds me of the basic commitment of the party. I will bear that in mind when I prepare my Budget in the autumn.

Mr. Nicholas Brown : The Chancellor said on Monday that no Chancellor could bind himself on taxation, yet at the time of the general election the Prime Minister said that there would be income tax cuts "year on year". Whom are we to believe--the present Prime Minister or the Chancellor, who clearly hopes to be the next Prime Minister?

Mr. Kenneth Clarke : I have related the Government's record on income tax. I do not recall the Labour party voting for any of the reductions in income tax, so the idea that those tax cuts are suddenly being held against us or are being adopted by the Labour party strikes me as unlikely. The commitment of the Government is to continue to cut direct taxation and income tax when economic circumstances permit and when it is prudent to do so.

Corporation Tax

9. Mrs. Angela Knight : To ask the Chancellor of the Exchequer what the current level of corporation tax is in Britain and in other industrialised countries ; and if he will make a statement.

The Financial Secretary to the Treasury (Mr. Stephen Dorrell): The main rate of corporation tax for 1993 is 33 per cent. That is the lowest main rate in any EC or G7 country.

Mrs. Knight : Does my hon. Friend agree that the low rate of business tax, coupled with a massive increase in manufacturing productivity since 1979, is a key reason why Britain has become the most popular of the European countries for inward investment? Does he also agree that that inward investment is creating jobs in the United Kingdom?

Mr. Dorrell : My hon. Friend is precisely right. The figures show that the United Kingdom attracted one third of all inward investment into the European Community in 1991. That is a vote of confidence from the internationally mobile business community. It is also an expression of what Mr. Delors called our policy of turning Britain into a paradise for Japanese investment.

Mr. Macdonald : Corporation tax is, obviously, one of a number of taxes. Will the Minister confirm that the share of national wealth paid to the Government in overall taxation is now higher than it was in 1979? Does the Minister agree that, after 14 years of a Government committed to reducing taxation as a proportion of national wealth, that is an abject failure on the Government's own terms?

Mr. Dorrell : The hon. Gentleman's question is yet another illustration of the total failure of the Labour party to understand how a tax system impinges on the wealth-creation process. What matters is the marginal rate at which tax is collected on wealth creation.

The difference beween the Labour party and our party on corporation tax is that, under the Labour party, 52 per cent. of every marginal £1 of profit that was earned in a corporation was paid to the Government. That has fallen

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to 33 per cent. under the present Government. That is the incentive to wealth creation which has attracted international investment to this country.

Mr. Jenkin : I congratulate my hon. Friend on the Government's determination that this country should be allowed to set our own rate of corporation tax without interference from the EC, because it is so vital to our competitiveness. Will he undertake to maintain that right, come what may?

Mr. Dorrell : That is indeed the Government's position. It was endorsed during the British presidency of the European Community when the subject was under discussion last year. It was not a controversial view among any of the member states of the Community.

Mr. Darling : The Chancellor has said that he may have to increase taxes in the autumn to meet the growing public sector borrowing requirement deficit. How much of that deficit do the Government estimate is structural, and how much cyclical?

Mr. Dorrell : The Chancellor has said that he will make his Budget judgments and announce his conclusions in November, and I am certainly not going to pre-empt those conclusions.

VAT on Fuel

10. Sir John Hannam : To ask the Chancellor of the Exchequer with which organisations he has held discussions on the impact on charities of VAT on fuel and power.

Sir John Cope : My right hon. and learned Friend the Chancellor and I have received representations from a number of charities and I have particularly had discussions with the Charities Tax Reform Group.

Sir John Hannam : I thank my right hon. Friend for the courtesy that he has shown the representatives from the charities at those meetings. Will he take into account the fact that in recent years charities have faced an ever-increasing burden of non-recoverable VAT, and the £25 million in VAT on fuel and power in addition to that is presenting them with major problems? Will he therefore give sympathetic consideration to the proposal for a tax refund system for charities ; and will he give the Charities Tax Reform Group an opportunity to meet him between now and the Budget?

Sir John Cope : The allowances against VAT given to charities have increased since 1979 from about £23 million a year to about £150 million a year--a fact which my hon. Friend should bear in mind. Of course, I will consider any proposals put to us, and I will be pleased to see the Charities Tax Reform Group again before the Budget, if it should so wish.

Mr. Matthew Taylor : Is the Minister aware that the imposition of VAT on charities and on the people of this country would not have been necessary if the Government had collected the £1.7 billion that the Inland Revenue wrote off in uncollected taxes last year? That was about 20 times the amount uncollected in the last recession. Does he believe that this recession is 20 times as bad, or is it time

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for the Government to start looking at collecting taxes from those who owe them instead of imposing new burdens on charities and others who cannot afford them?

Sir John Cope : Both on VAT and on the Inland Revenue side, we go to great efforts to collect all the taxes due, and we shall continue to do so. Of course, it is to be expected that that is more difficult in a recession, when the figures, of course, go up.

Mr. Colin Shepherd : Will my right hon. Friend call in the charities again and discuss with them the thinking of the Labour and Liberal parties as set out in their policy documents, so that he can make it clear to them that a carbon tax or a tax on energy would be what those parties would advocate were they in government now?

Sir John Cope : I will certainly make that point clear.

Mr. Betts : At the general election, the Government gave an absolute commitment that there would be no increase either in the level or the range of VAT. They have broken that commitment by imposing VAT on domestic fuel, to the detriment of the elderly and the poor. Is any consideration being given to the imposition of VAT on public transport, which was also ruled out at the general election and which would be a move that would also disadvantage the poor, the elderly and the young, and create traffic congestion in our cities?

Sir John Cope : The hon. Gentleman exaggerates what was said before the election. He has obviously not paid attention to the many debates that we have had on the subject recently.

Growth Rate

11. Mr. Carrington : To ask the Chancellor of the Exchequer what has been the level of growth for the United Kingdom economy for the last 12 -month period for which figures are available ; and what was the average figure for the rest of the EC.

Mr. Kenneth Clarke : In the first quarter of this year, GDP in the Unitedf 1992--the latest period for which complete figures are available-- GDP in the EC as a whole fell by 0.1 per cent.

Mr. Carrington : I am grateful for that answer. Does my right hon. and learned Friend agree that increasing exports are vital to our economic recovery, and that the Prime Minister's championship of free trade and his excellent achievement in putting the general agreement on tariffs and trade negotiations back on the rails are the best tonic that our economy and its recovery could have?

Mr. Clarke : I do agree. It is encouraging to see British industry performing so well in non-European Community markets. We would perform even better in the EC if demand there were not dropping because our partners are still going into recession.

I also agree with my hon. Friend that, because of our record as a trading country and the need to have an export-led recovery, we have to encourage free trade. My right hon. Friend the Prime Minister's contribution to maintaining progress towards a successful conclusion of

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the Uruguay round is very much in our interest. It is also in the interest of everybody who wishes to see economic revival generally across the western world.

Mr. Mandelson : In the light of the Prime Minister's comments on Tuesday, when he made his statement following the G7 summit, that the Government were working on new ideas and initiatives to contribute to President Clinton's employment summit in the autumn, will the Chancellor tell the House what specifically new policy ideas and initiatives are being worked out in the Treasury?

Mr. Clarke : I am glad to say that the Treasury is closely involved in discussions with my right hon. Friends in the relevant Departments, such as Employment and Education, to continue to work out policy on education and training, particularly for those between the ages of 16 and 19. As we now spend two and half times as much as was spent on those sectors before we came to power, and as we have introduced a series of training initiatives, all of which were opposed--as far as I can recall--by the Labour party, it is likely that we can be expected to build on an excellent record, having inherited a somewhat bare cupboard.

Mr. Forman : The Chancellor has every reason to be satisfied with our relative performance on economic growth as compared with our partners in the Community in recent times. However, does he recognise, and will he therefore take steps to push forward the idea, that we must be competitive internationally with the new super-competitive countries in the Pacific rim, where growth rates are significantly higher?

Mr. Clarke : My hon. Friend makes an extremely valuable point. For the next generation, we will remain at the forefront of developed and prosperous countries only if we are able to compete with our most challenging competitors--the Japanese and the countries of the Pacific rim and, probably, the north American economies if they recover their normal powerful growth. That is why we have not only to ensure that our own climate is right, but to persuade our European Community partners that Europe as a continent will fall behind if we saddle ourselves with costs on employment and restraints on economic change, which they do not impose on themselves when they are trying to earn their living in Japan or north America.

Mr. Andrew Smith : As 60 per cent. of Britain's exports are to the rest of the EC, is not there a real danger that recession there will knock back the export-led recovery, which we need to sustain us here? Does not that make it all the more important that everything possible is done jointly with our European partners to get economic recovery going in Europe and not have further deflation? What new proposals will the Chancellor put to the European Commission, which is producing the White Paper that will be the basis for the joint economic policy under the Maastricht treaty? Is not it an indictment of the new Chancellor that he has not been able to tell us one new proposal for recovery this afternoon?

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