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Mr. Gordon Brown (Dunfermline, East) : In this wide-ranging debate, which is taking place on the eve of the European summit, at which a paper on competitiveness, growth and jobs will be discussed, our argument is that Europe has failed to succeed in its aspirations in the past year. As my right hon. Friend the shadow Foreign Secretary said, Europe has failed to succeed in its aspirations for Yugoslavia and the protection of minority rights there, and in its aspirations for Russia and eastern Europe where the problems still remain intractable. Domestically, it has failed on recovery and the issue of unemployment.
The Government have failed not because co-operation has been too great and too extensive, but because co-operation on investment, industry and employment measures has been too little and too unambitious. Instead of promoting the co-operation that is necessary for job and growth measures, the Government should follow the examples set by Japan and the United States of expanding both demand and capacity in their economies.
The Government are engaged in their age-old trick of frustrating European initiatives, even when it is clear that greater co-operation is needed to solve the problem of long-term growth in Europe. We need co-ordinated measures on investment and jobs, as I shall explain. We need measures to build for the long term, as well as
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expediting the completion of a GATT agreement, not least by dealing with the problem of agricultural protectionism that is costing British families so much. My hon. Friend the Member for Stoke-on-Trent, South (Mr. Stevenson) referred to that agricultural protectionism.We need a proposal for a European recovery fund and measures for starting infrastructure projects that would improve Britain's rail and communications links. A co-ordinated cut in interest rates in Europe is desirable and, indeed, necessary. We need measures to cut waste and fraud, not least in the administration of the common agricultural fund. Practical measures rather than rhetoric would be to the benefit of not only Britain but all the countries in Europe. We should ensure--the Chancellor should realise this--that Britain takes full advantage of social, regional and other funds in Europe which are available and which could and should be taken up by the end of the year to create jobs and opportunities, especially in some of the most depressed communities in the United Kingdom.
Our argument is that the Government's ambivalence, and even the Chancellor's hostility, towards co-operation in Europe is such that even the public investment initiatives that Britain sponsored last year at the December summit--and which the Government boasted about selling to the rest of Europe--are being thwarted with cuts in public investment in the United Kingdom.
It is our contention that Britain is not only attempting to export a deregulation dogma which has not worked here and which will not work in Europe but that the whole purpose of the deregulation debate inside the Conservative party is a squalid and futile
attempt--eventually it will be unsuccessful--to paper over the cracks among Tory Members to appease the Conservative right, rather than to do anything practical to achieve the sustained recovery and growth that we need.
Tomorrow, in Europe, the Government will propose measures not only because they believe that such measures will help to advance Britain or Europe. They think that simply by having something European to blame, it will help to unite what is a divided Conservative party on Europe. Our analysis of what is wrong and what needs to be done is different from that of the Government. We cannot deregulate 17 million men and women back to work in a European version of the crude market dogma that has failed in Britain. But deregulation without the implementation of the skills revolution will take us backwards rather than forwards.
In a world of global markets and the global sourcing of companies--the Pacific rim is growing at a much faster rate than the United Kingdom or any other European country ; China has a growth rate of nearly 10 per cent. ; and even low-wage Singapore is shifting production to low-wage China--the idea that our future lies in a low-wage, low-skill and low-investment economy is laughable. The idea that we should become the Singapore of Europe is farcical, absurd and, indeed, retrograde.
We should recognise that in a world of high technology and premium custom- built goods, where what matters is the skill and investment in the work force, we should not be taking the road of low growth, low investment and low wages. We should be looking for the road of high employment, high investment, high skills and eventually a high-wage economy.
The British problem of low competitiveness cannot be solved purely by cuts in wage costs in the vain hope of
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raising productivity. It must be solved by ensuring, through the sure prospect of investment, that we have the capacity and the skills to make investment work and to secure long-term growth. However, as the benefits of co-operation arise through the solution to the problem of skills in Europe, we need a programme to modernise and to expand both the capacity and the demand in the European economy. I believe that it is possible in Europe today to expand demand by interest rate cuts and investment measures without the balance of payments constraints that we have had elsewhere. As on other issues with which the European Community must deal, we should recognise the benefits of co-operation and of doing together what we cannot do separately or on our own.The Chancellor was suggesting on the radio today that Britain does not need to participate in such a programme for long-term, investment-led growth, and he confuses Britain's position in the economic cycle with the intrinsic strength of our economy. Let me tell him what everyone in the country knows. Britain has not done the best in the EC during the 1990s. Britain has been doing almost the worst of all our European competitors in employment, output and investment. It is precisely for those reasons that we must address the problems, not just in Britain, but together with our competitors in Europe.
Britain has suffered more permanent structural damage than almost all of our competitors in the EC. This country has, in particular, a huge investment deficit and that is why we, as much as anybody else, need many of the initiatives which will be proposed in Europe tomorrow.
Let us be clear about what has happened during the 1990s to the British economy. Our national income has fallen faster than that of almost every other country in Europe. While it has risen in Germany, France, Belgium, Denmark and most of the other countries in Europe, Britain has seen a fall in national income since the beginning of the decade. Employment has fallen by 7 per cent. in Britain, while it has risen by 7 per cent. in Luxembourg, 4 per cent. in Portugal, 7 per cent. in Spain and 2 per cent. in Denmark. [Laughter] Ministers may laugh, but Britain has had the biggest fall in employment during the 1990s.
Ministers should be ashamed that they went into the previous election with promises that the recovery would begin the day after the election. For months afterwards, unemployment rose as a result of their policies. [Interruption.] The Minister with responsibility for deregulation will be aware that unemployment in this country has risen since the beginning of the 1990s by 76 per cent., and that is unrivalled by any of the other countries in the EC.
Mr. Kenneth Clarke : With respect, the hon. Gentleman is trying to ride over perfectly well-judged interventions from my hon. and right hon. Friends. The hon. Gentleman chooses a selective period and he knows that, at the moment, this country is the only one which is enjoying growth among the major economies of western Europe. Industrial production in the latest three months is up by 3 per cent., whereas the year-on-year figures are 5 per cent. down for Germany, 3.5 per cent. down for France and 1.25 per cent. down for Italy. Britain's is the only major European economy for which anybody is forecasting
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significant growth next year. The hon. Gentleman makes extremely careful use of figures by choosing a rather unlikely starting date.Mr. Brown : The latest figures show that investment, employment and manufacturing employment are still falling. [Interruption.] I will give way to the Chancellor, who can give us the figures.
Mr. Kenneth Clarke : Our position is substantially better than that of western Europe. The hon. Gentleman knows that unemployment in this country has gone down in seven of the last nine months, while it continues to rise in other western European countries. Unemployment is much worse in France than it is here, it is getting steadily worse in Germany and it is disastrously bad in Spain.
Britain is leading the way in the European Union towards recovery. We lead our partners in Europe who will begin to show the same signs of recovery in due course. The hon. Gentleman does not help his case by giving the rather extraordinary picture of Britain being in crisis while the rest of Europe is doing better. The reverse is the case.
Mr. Brown : Once again, I notice that the Chancellor, with his grasp of the facts, fails to answer my question. The latest figures show that employment in Britain is still falling and manufacturing employment is still falling.
Perhaps the Chancellor should explain why the President of the Board of Trade had to go to the Institute of Directors and explain why British competitiveness was still 25 per cent. below the standards of our main European competitors. That is after 14 years during which, the Government claim, they presided over an economic miracle.
I shall be fair to the Chancellor and look at what has happened over the 14 years of Conservative government. We have one of the lowest growth rates and manufacturing investment has fallen in real terms. Employment has risen by 0.4 per cent. in Britain, which the Chancellor claims to be the deregulated paradise of Europe, but it has risen by six times that amount in France. The Chancellor should look at the record of the Government of which he boasts he has been a member over those 14 years. I shall give way to the Chancellor to allow him to supply figures to show that manufacturing and other employment is rising.
Mr. Kenneth Clarke : The hon. Gentleman is choosing curious periods and curious selective figures. I have given him the figures for employment. He is wrong to deny that unemployment has been falling in Britain at a time when it is not falling in the rest of western Europe. He has gone back to the late 1970s, to the recession that we inherited. In the decade from 1980, economic growth was faster in the United Kingdom than in France or Germany. In the 1980s, we created well over 1 million new jobs, more than either France or Germany. Of course the hon. Gentleman will not face up to today's figures, which show that the United Kingdom is growing and is expected to grow faster next year when other economies are still in recession.
Mr. Brown : The Chancellor never read the Maastricht treaty and he clearly does not read the economic statistics supplied to him by his Treasury colleagues. He has failed to answer my direct question about employment levels or manufacturing employment. As for the record of growth, he could not give exact figures since 1979. Manufacturing growth in Britain has been 5 per cent., which means that the great economic miracle country has grown at one fifth
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the rate of Germany where growth was 25 per cent. America has grown by 36 per cent. and Japan has grown by 51 per cent. I shall give way once more to the Chancellor if he can deny those figures.Mr. Kenneth Clarke : Economic growth in the United Kingdom in the 1980s was faster than in Germany or France. We created more jobs than Germany or France, but the record over the two previous decades was worse than that of our rivals. The hon. Gentleman is trying to make selective use of historical figures and that is nonsense. He is trying to claim that, at the moment, we are not recovering when we are plainly doing so faster than anywhere else in western Europe.
Mr. Brown : The Chancellor has simply proved that he will try to bluster his way through any intervention. He has not given one fact to substantiate his claims. He claims that growth during the period of Conservative government was faster than that of any other country in Europe. Since 1979, growth in Britain has been lower than that in western Germany, France or Italy, and lower than the European average. Therefore, his claims about growth, like his claims about manufacturing output and general and manufacturing employment, are wrong. He has been unable to justify his position at any point in this exchange.
The Chancellor claims to be interested in European convergence, but neither in his interventions nor in his Budget has he produced one policy measure that will achieve that. What has happened since the Government went to the Edinburgh summit and announced a new policy for which the Prime Minister claimed praise? At that December summit in 1992, the then Chancellor was not only pleading with Europe to cut interest rates all round but was taking credit for British proposals that the Community should invest out of recession, as he said Britain was doing. The Government said that Europe should follow Britain's lead of public investment.
The European communique that the Prime Minister had played a part in writing said that, as far as possible, we should switch public expenditure priorities to infrastructure, capital investment and growth that would earn a worthwhile return. It was said that that was an urgent priority throughout Europe. The Prime Minister reported to the House that
"member states agreed, following the pattern of our own autumn statement, to give priority to capital spending and encourage private investment".-- [ Official Report, 14 December 1992 ; Vol. 216, c. 23.]
After the December summit, private investment in Britain continued to fall in 1993, and business investment has continued to fall. That package was hailed by The Times as "John Major pulls it off". The Prime Minister was reported as saying that the heads of Government had praised the outcome of the summit, which was a boost to investment worth £24 billion. It was claimed that Europe's 17 million unemployed had reason to be grateful to the Prime Minister. Since then, the European investment fund, with which Britain was supposed to be leading the way, came before the House only a few days ago and it is not even up and running.
Most important of all, we discovered in last week's Budget that Britain had dropped the very public investment initiatives for which the Government claim credit in the rest of Europe. There will be a 3 per cent. cut in public investment this coming year ; a 3 per cent. cut the year after
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that ; cuts in transport investment, despite the Conservative manifesto commitment that the Government would improve transport over three years ; cuts in London Underground ; cuts in infrastructure ; cuts in the environment ; and public investment cuts all round of 25 per cent. effectively as a result of Government proposals. Mr. Kenneth Clarke indicated dissent.Mr. Brown : The Chancellor shakes his head, but I suppose that, once again, he will be unable to give any figures to justify his position. General Government capital expenditure will fall from £13 billion in 1993-94 to £10.7 billion in 1994-95--a drop of 18 per cent. Even the new measure that the Chancellor chose to use--public sector asset creation- -will fall in real terms over the next few years. What was meant to be an anti-recessionary package is being abandoned with public expenditure cuts, and something hailed throughout Europe has led to some of the biggest public investment cuts in this country's history.
Britain has failed to support not only the European Commission's proposals but even its own proposals. I can think of nothing more reprehensible than for the Government to claim all the credit from the December summit and now to cut public investment--in the same way that they broke their promises on VAT, national insurance and everything else.
Mr. Kenneth Clarke rose --
Mr. Brown : I will give way to the Chancellor one last time if he will give the House information, not the bluster that we have heard in the past few minutes.
Mr. Clarke : I am grateful to the hon. Gentleman for being generous with his time. His description of the follow-up to the Edinburgh facility was quite extraordinary. The new facility was set up through the European Investment Bank.
Mr. Clarke : No. The first facility was the bank, then the fund. We were among the early ones to ratify as a result of the parliamentary vote. Under the Edinburgh facility, the United Kingdom has already borrowed 852 mecu, which is approximately £640 million, for infrastructure investment in this country. The United Kingdom is the largest borrower under the Edinburgh facility, taking advantage of the announcement that the hon. Gentleman correctly quoted. The difficulty--I will be fair to the hon. Gentleman--is that the Commission produced the European Union bond proposal only three days ago. The hon. Gentleman totally misunderstands the point that we are arguing. We launched the Edinburgh facility, and the United Kingdom is the major user and beneficiary of that initiative, which was launched by my right hon. Friend the Prime Minister.
Mr. Brown : The Chancellor fails to say that the European Investment Bank facility has not been used up in its entirety over the year. The European investment fund was actually the new project created at Edinburgh, not the European Investment Bank--which has been going for years. The European investment fund created at Edinburgh is not yet up and running, more than 12 months after it was created. The Chancellor should apologise to the House because the initiative of the previous Chancellor is not yet
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up and running. It may help in the next recession, but, because of the delays, it will not be of much help in this recession. Let us consider the other investment projects that should be sponsored by Europe and where the Chancellor has once again failed. What about the water initiative? Only a few days ago, the Chancellor went to Europe to say that we could not afford to go ahead with the water directives. He told us that we have to cut water quality standards.What does the Delors European document say? What is it that the Chancellor is ready to reject when he goes to Europe tomorrow? It talks about the projects that could gain European finance under the proposals. It says that the projects concern water control, urban waste water treatment and renovation of water supply distribution systems. The Community could help finance some 25 billion ecus of action in this area of environmental concern over the period 1994 to 1999.
Under the new proposals from Delors, Commission help is available to boost our water quality. So why is the Chancellor saying that we have to cut water standards when he should be supporting the investment facility that could improve water standards in Britain? The Chancellor knows very well that the cut in water quality standards is a cut in the facilities for the treatment of sewage. One in five of our beaches does not meet the European Community environmental standards and we are second bottom in the European league for meeting the higher guidance requirements for our beaches. We know that water standards for urban waste are the second worst in Europe. We have agreed, over a period of years, by sponsoring the directive that we should do something about those standards. We have signed up to the directive and the Conservative party boasted in its manifesto that its commitment to the environment was beyond doubt. The National Consumer Council has made it clear that there is a variety of ways in which water companies could be involved in meeting the targets and we now have the means by which the Government could seek support in Europe to pay for raising the quality of our water. Given all that, why does the Chancellor want to pursue a deregulation course in Europe? I suggest that the reason is that the Chancellor wants to appease the Tory European right in a vain attempt to hold together a divided Conservative party.
The next initiative in the Delors proposals tomorrow is the channel tunnel rail link. At the Edinburgh summit the one thing that the Government boasted about as the investment project that would be going ahead was the channel tunnel. They said that the channel tunnel rail link would proceed as a "joint venture". They said that it would be an increase in infrastructure investment of £2.3 billion. Presumably, that is not to help us out of this recession, but to help us out of the next recession because the starting date has been moved backwards and backwards and is now 2003. Conservative Members should be ashamed because there is national humiliation in the fact that trains will be able to travel at 185 mph from Paris to Calais, 85 mph through the tunnel and then, at best, at 47 mph from Dover to London. [Interruption.] The Financial Secretary asks if we have heard about the French planning system, as if the French rail links from Paris to Calais have not been completed or may not even have been started. In fact, the
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first link was completed in the summer and the second part was completed in September. The French planning system has managed to bring about a completion while we have another 10 years to wait as a result of the Government's neglect. It is no wonder President Mitterrand is looking forward to opening the channel tunnel. As he said, two worlds will be opened up as a result of the opening of the tunnel. There will be high-speed travel at 185 mph from Paris to Calais and then there will be time for leisurely journeys from Dover to appreciate the English countryside.Even by the year 2000, French trains will have been able to travel at 185 mph for seven years. When Britain enters the millennium, people travelling from Dover to London will be looking at building sites where the work has not been completed, and they will see quantity surveyors travelling around in their vans to plot the route. That disgraceful state of affairs has been reached as a result of the Government's failure to understand the public interest in the completion of the project. It would be the stuff of an Ealing comedy if it were not fast becoming more like an Ealing tragedy every day. What did the Chancellor say on "The World at One" today? He said that the channel link is not being held up particularly. The original starting date for its being in use was 1997, it was then pushed back to 1998, then 2000, more recently 2002, and now people fear it will be 2003-- and the Chancellor, with his gift for accuracy, tells us that it has not been particularly held up.
What does the European Commission say about the channel tunnel rail link? It says that it should be a major priority project of Community interest ; that it should be selected for a feasibility study ; that it would be prepared to provide loan guarantees, and support the closing of missing links in the framework of projects of common interest. It is listed as one of the priority projects with which the Commission is prepared to go ahead, so why do the Government put up implacable resistance to projects of investment from which Britain is likely to benefit? The Foreign Secretary could not answer that question this afternoon. Britain would be a beneficiary of the investment funds made available by the Delors plan to enable projects to go ahead.
Why is that project not going ahead? Is it because there is no benefit for Britain?
Mr. Brown : The hon. Gentleman should explain to the whole of Britain why he thinks that the absence of a channel tunnel rail link from Dover to London will be of benefit to this country. People are increasingly seeing it as a national humiliation. They blame the Government for failing to invest in our infrastructure.
Sir Teddy Taylor : Will the hon. Gentleman give way?
Mr. Brown : No, I am not giving way, I have only four minutes left.
If the hon. Member for Southend, East (Sir T. Taylor) is not trying to work his passage back--he was the hon. Member who led the Conservative opposition to the Maastricht Bill--perhaps he might intervene on the Chancellor and ask him why the Government have failed so miserably in relation to winning in Europe.
The Government oppose these projects, not because the private sector is more efficient, but because they oppose the public sector in its entirety. It is becoming very sad that to
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win his reputation with the Conservative right the Chancellor is prepared to sacrifice what is clearly a public- interest project which we should be supporting in Europe.The "Budget for jobs" that the Chancellor introduced last week has become a Budget for his next job. It was simply an investment in his own future. It was a Budget for doing business with the members of the 1922 Committee, who wanted huge public expenditure cuts. Now, with his ambition to take over from the Prime Minister, he goes to Europe, bangs his fists on the table and shouts, "It is our money." It is the old no, no, no approach of Lady Thatcher ; it has been dusted down and is now being used by the Chancellor to promote his candidature for his party's leadership.
There has been a complete shift in the Chancellor's behaviour in relation to Europe. His visits are characterised by confrontation and clashes. Wherever he goes to negotiate--often before the starting whistle--the Chancellor provokes confrontation. He is more interested in displays of pre -match aggro--wrapped in the Union Jack and spoiling for a fight--than in the real agenda and a positive result. It is a pity that our contributions to European discussions now have all the hallmarks of the most publicised feature of English football supporters abroad. That is what has happened under the Chancellor. The reason is that the Chancellor is looking forward to three elections next year ; not just the local elections and the European elections--in which he expects the Conservative party to do badly- -but the third election that will follow them, the one for the Tory leadership. Let me give the Chancellor a warning : he should not forget that, after the third election, a fourth will be necessary--an election among the British peoplem ; they admit that it has been rising recession by recession ; they admit that training is inadequate in Britain. The document, however, contains little more than a continuation of the crede deregulation strategy that has done nothing for Britain over the past 14 years.
If deregulation works, why did Britain have a higher unemployment rate throughout the 1980s than France, Germany and Italy--the countries that, according to the Government, are over-regulated and sclerotic? If deregulation is the answer, why has British employment growth been only 0.4 per cent. over the past 14 years, while in France it has been 3 per cent? If deregulation works, why, in the 1980s, did both the United Kingdom and the United States have a lower proportion of prime-age men in work than France, West Germany and Italy? If deregulation works, why did the President of the Board of Trade have to admit that Britain's competitiveness is 25 per cent. below that of our major European competitors?
I warn the Chancellor that there is no evidence that cutting unemployment benefit will increase employment. There is no evidence that cutting health and safety protection will mean more long-term jobs. There is no evidence that Britain's abandonment of the social chapter provisions--which were not abandoned by the rest of Europe--will mean more employment in Britain than elsewhere. Does not the Chancellor understand that the real alternative to the deregulation policy that he pursues is
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investment in the skills of the people of this country, and the creation of a framework of personal security through the social chapter? To the unemployed, the Conservatives' deregulation strategy means the same as the supermarket slogan : pile 'em high and sell 'em cheap. We want no part of that strategy--in Britain, or on the Opposition Benches.In the past few years, there has been a deliberate attempt to hold the Conservative party together for purely partisan purposes, at the expense of the national interest. The Conservative Government have opposed employment measures in Europe ; they have opposed protection for school children working long hours ; they have opposed protection for maternity rights and for jobs. Above all, they have opposed the social chapter. In all the negotiations that have taken place in Europe over the past three years, they have won no support for their position, not even from the political parties of the right. The Conservatives have experienced 14 years of failure on growth, investment, employment and making Britain fair--14 years in which they have tried to blame everyone else, when the blame should be imposed on them. Because of that failure, they will lose the local elections, the European elections and the general election.
9.31 pm
The Chancellor of the Exchequer (Mr. Kenneth Clarke) : I have seen the hon. Member for Dunfermline, East (Mr. Brown) in autodrive before, but I have never seen him unable to stop. He went past the buffers and his argument reached a state of chaos. [Interruption.] I agree that the hon. Gentleman was generous with his time in conceding to me ; unfortunately, he did not accept my correction of some of his assertions.
We should agree on the most important issues facing Europe at present : employment, growth and competitiveness. Those are the issues that we shall discuss at this weekend's summit. Britain will be at the heart of discussion of those issues in Europe and I believe that we have an extremely positive contribution to make.
The irony of the situation--which no doubt baffles anyone who listened from the Galleries to the hon. Gentleman's diatribe--is that many of my views on the European Union are not so very different from his. The same applied to the previous shadow spokesman whom I faced at the Dispatch Box. I certainly agree that Europe needs to tackle the problems involved in employment, growth and competitiveness. [Interruption.] After hearing one or two of today's speeches, I am not sure that others understand M. Delors' proposals any better than the hon. Member for Dunfermline, East ; but I would forgive them all. The proposals that the hon. Gentleman defends with such passion were produced on Monday and he had not understood them by Thursday. The hon. Gentleman is talking gobbledegook. The proposals should never have been produced at such a late stage, for he has been sadly misled. I think that I have the only proper copy of the document in the House. If the hon. Gentleman has had time to read it--I forgive him if he has not--he certainly has not understood it, as was plain from the beginning of his speech to the end. I believe that, when he has digested it and when we begin proper discussion of it on Saturday, he will begin to understand that all this stuff about our being against transport investment and not taking advantage of European facilities is nonsense.
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What is wrong with Europe? As should be seen both by those who favour our present arrangements for the European Union and those who are more sceptical, we need to pursue together the goals of greater competitiveness, tackling structural unemployment and improving the position of industries. We will achieve that not through ranting speeches and press releases issued on Monday in order to secure a good headline on Saturday, but through the purposeful creation of conditions that will give rise to more competitiveness, growth and jobs.Mr. Gordon Brown : The Chancellor mentioned transport infrastructure. I would like him to answer one question : when will the channel tunnel rail link be completed?
Mr. Clarke : When the design is completed, the route settled and the private investment is introduced. It is not being held up-- [Interruption.] The French built their system because they did not have the dispute that we had all over Kent and east London about where it should go. The channel tunnel rail link is not devoid of people investing in it. It will raise private finance quite straightforwardly and it does not need the new facility the union bonds--which the hon. Member for Dunfermline, East appears to believe are the answer to a maiden's prayer, with the Commission suddenly coming in and taking it over. He has been totally misled by an out-of-a-back-pocket proposal, produced only two or three days ago. Several hon. Members rose --
Mr. Clarke : No. Let us try to have a sensible debate. [Interruption.] Just steady on a moment. Let us discuss the situation on public infrastructure.
The British Government are a strong supporter of the construction of what are known in Euro jargon as trans-European networks. I strongly believe that if we are to take full advantage of the single market, we must develop the networks of the kind described. It was a provision of the Maastricht treaty--I was in favour of the treaty--that such networks should be put in place.
Mr. Nigel Griffiths (Edinburgh, South) : Will the Chancellor give way?
Mr. Clarke : I shall give way when I have explained what we should be talking about.
The way in which those networks are being financed at the moment, and, in our opinion, the way in which they should be financed, is by a combination of private finance plus the facilities from the European Investment Bank, plus the European investment fund, which the House has just agreed that we should rectify, taking advantage of the Edinburgh growth initiative in which the British Government were a major participant.
Mr. Enright : Give us the dates.
Mr. Clarke : With the assistance of the European Investment Bank we are already building the Jubilee line extension-- [Interruption.] -- the Severn bridge project and the Manchester light railway, all of which were financed by borrowings from the European Investment Bank. [Interruption.] If Opposition Members think that all that is needed to start the high speed tunnel link tomorrow is a
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loan from President Delors, and if they solemnly imagine that that is remotely the difficulty, I would not put them in charge of building a garden path. I advise them to visit Kent to inquire into the background of the project and see what is being done at the moment to design it. Opposition Members have only to see one headline in the newspaper, "Money from Europe to build the channel tunnel link", and they have their Front Bench spokesman wild with excitement and believing that it can be built tomorrow.The hon. Member for Dunfermline, East rattled through the Edinburgh initiative. That initiative built on the European Investment Bank. The Edinburgh facility was an enlargement of the borrowing from that bank.
Over the years, we have been the third-largest borrower from the European Investment Bank. In 1992, United Kingdom undertakings borrowed a total of £1,795 million from it. Ironically, given the hon. Gentleman's case, water companies are among the major beneficiaries in this country from those European facilities. The hon. Gentleman says that he wants facts, but there was not an accurate fact in his speech from beginning to end. The large amount borrowed by the water companies is £496 million and that is continuing in 1993.
At the Edinburgh summit we announced the Edinburgh facility, an enlargement of European investment funds. I have already said that the United Kingdom has taken more advantage of that than any other member country. So far, we have borrowed approximately £640 million. There are still outstanding moneys under the Edinburgh facility. We should be prepared to consider an extension of the European facility if anyone at the summit can demonstrate that there is a need for such an extension by citing any projects of the kinds listed which are held up anywhere for lack of funds.
The hon. Gentleman is inadvertently and passionately defending an idea that the Commission should suddenly start borrowing on its own account and issuing so-called union bonds as an additional facility for which there is no demonstrable need.
That is not even a new idea, although it is to the hon. Gentleman. The Labour party has no policy on the economy or on Europe. Therefore, last Monday it borrowed what seemed to be the Commission's latest bright idea, but I remember that in the 1970s, under a Commissioner called Ortoli, it was suggested that the European Commission should be allowed to issue bonds on its own account and start to acquire a public sector debt as if it were a Government.
Is it the Opposition's position that, at a time when all over Europe tough budgetary decisions are being taken to reduce Government borrowing, the Labour party is, overnight, in favour of allowing the Commission to increase its borrowings and start issuing bonds as if it were a Government for no demonstrable purpose?
Mr. Stevenson : Will the Chancellor give way?
Mr. Clarke : No. If I have time I might come to the hon. Gentleman's points, with which I have considerable sympathy. I have had to spend this long explaining to the hon. Member for Dunfermline, East that he is talking about fool's gold, which has fooled him completely into believing that we are resisting some lightning method of moving forward into great infrastructure projects.
If the hon. Gentleman is seriously interested in growth, employment and competitiveness, what common-sense
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propositions do we have to put forward, which we are putting forward and on which we are winning friends inside the European Community?The first proposition that we are advancing is the need for economic convergence, following the Maastricht criteria, low inflation, a subject never mentioned by the Labour party, and low public borrowing, which Britain is likely to achieve at a faster rate than others. That is a key to European policy.
The Labour party in Britain would not achieve either. It is not in favour of low inflation. Its policies, announced last week, of not raising taxation, increasing public spending and borrowing more money would take them away from the convergence criteria on which every other member state is agreed.
The second proposition, never mentioned by the hon. Member for Dunfermline, East, includes open markets and free trading. It is astonishing that someone who claims to be a serious shadow Chancellor does not mention the GATT round or the trading position of the European Community--
Mr. Gordon Brown : Will the Chancellor give way?
Mr. Clarke : I shall give way to the hon. Gentleman to see whether he understands the GATT round any more than he understands European capital financing.
Mr. Brown : The Chancellor said that I had failed to mention the GATT round. He is absolutely wrong. Will he now apologise?
Mr. Clarke : If the hon. Gentleman is in favour of the GATT round, I apologise for missing his one good point in the stream of consciousness gabble that he gave to us when he completely misunderstood the purpose of the Delors White Paper. If the hon. Member for Dunfermline, East wishes to extend his knowledge of open, free-trading policies, he might agree that the Government are right to insist in Europe on completion of the single market, run on the basis of proper competition policy and a single market that steadily gets rid of state aids, which distort competition in the economy. They are right to insist on opening the markets of the European Union--following the GATT round, which I hope will be concluded successfully in the next few days--especially for the countries of eastern and central Europe. That is the second item of the positive agenda that we are pressing ahead in Europe. The first item is economic convergence, the second is open markets and free trade. The third part of our agenda, the true European agenda, is encouraging enterprise in the EC. [Interruption.] Yes. If Opposition Members had copies of the White Paper or had read it, they would find that that idea is slowly entering the arguments of our partners.
Mr. Stevenson : Will the Chancellor give way?
Mr. Clarke : As the hon. Gentleman made one of the few speeches that contained parts with which I agreed, although I would be reckless to agree with some parts of it, I shall give way to him.
Mr. Stevenson : Will the Chancellor explain to the House how the Government are promoting enterprise when, on 15 November, the Budget Council, on which the Government are represented, unanimously agreed to another 700 million ecu of wasteful agricultural expenditure? How is that promoting enterprise?
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