---

Mr. Skinner rose--

Mr. Clarke: I shall give way in a second.

The hon. Gentleman knows that the Opposition Front Benchers have not changed, and he knows that we know that he agrees with Bryan Gould and with my comments on Opposition Front Benchers.

Mr. Skinner rose--

Mr. Clarke: I shall let the hon. Gentleman say something rude about his erstwhile colleague if he wishes to curry favour with his current Front-Bench colleagues.

Mr. Skinner: I just want to get the facts straight. The Chancellor of the Exchequer talks about the views of my ex-colleague Bryan Gould on the state of the Labour party and the British economy. But he fails to tell us that, after the 1987 election, that same Bryan Gould--I remind my hon. Friends, as well as Tory Members--stood at the Dispatch Box and talked about taking over the argument on privatisation. I opposed him then. That is why I do not take too much notice of what he says now.

Mr. Clarke: Conservative members have always acknowledged the consistency of the hon. Member for Bolsover, but we have never expected any consistency from any Opposition Front-Bench Member. The fact that Bryan Gould changed his views after 1987 does not surprise me--the hon. Member for Dunfermline, East has done the same thing.

The main appeal of those on the Opposition Front Bench to the City, the business world and the public is a vague implication that a Labour Government would somehow carry on our existing economic policies, give or take a little tweak or two. Labour tries to avoid frightening the voters by implying that the hon. Member for Dunfermline, East would imitate me if he were to become Chancellor of the Exchequer.

There is even talk nowadays of "one-nation Labour". That is an illusion. Labour has never voted for the one-nation Conservative policies that I have proposed as Chancellor; nor has it voted for any of the policies that I and my colleagues have pursued in every office that I have held. The current Labour Front-Benchers have fought vigorously against every policy initiative I have taken in every office I have ever held, and I do not believe that they have changed their positions at all.

The clear red water between the Labour party and modern enterprise economics and public services remains as wide as ever. Labour would tax and spend and would allow inflation to rise, as the deputy Leader of the Opposition sometimes incautiously reveals. Labour would take Britain back into the relegation zones in any international league table, with the social chapter, the minimum wage and trade union legal recognition rights--all the baggage that socialism, and even social democracy, lays on the enterprise economy in Europe today.

4 Mar 1996 : Column 34

We are facing an ever more competitive world, and we want the British people to get the best out of it. But we will only do this by keeping our competitive edge. In the 1990s, there is still no alternative to the enterprise economy that we are creating, and we have not created our present prospects to hand them over to yesterday's Wilsonian men. That is why the Prime Minister has made it clear that our Conservative goal is to make this country the enterprise centre of Europe, as that is the way to continue to succeed and prosper this year, next year and into the next century.

The reason why we are having a debate on the economy in Government time--and the reason why the Opposition never debate the economy, in their time or anybody else's--is that the Opposition know the truth of every word I have spoken about our prospects, and every word of the indictment against them.

4.13 pm

Mr. Gordon Brown (Dunfermline, East): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:

"rejects Government complacency about an economy in which the investment and skills gap with competitors has been growing and in which, during 17 years, the United Kingdom has fallen from13th to 18th in the world prosperity league; notes also the Treasury Committee report which questions the Government's economic forecasts; regrets the widespread job insecurity throughout Britain; condemns the loss of the Community Action Programme which once again deprives the unemployed of a stake in society; and calls for welfare to work measures that would, over time, reduce social security bills as part of an economic strategy that would raise levels of investment in the economy, bring sustainable levels of growth without risks to inflation and end a situation in which unemployment is more than one million higher than in 1979.".

The Conservatives called this debate today to boast of the claim that they make in their motion, that Britain is

"the enterprise centre of Europe."

But today's events, with the anti-Europeans attacking the Chancellor of the Exchequer, have demonstrated that the phrase "enterprise centre of Europe" is just about the only mention of Europe that their party can tolerate without fighting breaking out in its ranks.

The Chancellor built his case on three things. He argued, first, that the league tables that we produced on Britain's relative decline were wrong; secondly, that his investment forecasts were right; and thirdly, that the feel-good factor was returning to the housing market. Before we enter the full debate, let us deal with those issues.

First, the Chancellor was unable to deny that Britain had slipped from 13th to 18th in the world prosperity league. It is significant that he has not been able to challenge that figure.

Mr. David Howell (Guildford): Is the hon. Gentleman aware that it is Hong Kong and Singapore that have moved up the table and overtaken Germany, France, the United Kingdom and several other countries? That is why the numbers have changed. Perhaps he does not understand that. In that table, Britain is fast catching up with Germany and France. That casts a different light on his interpretation.

Mr. Brown: If Britain had fallen from 13th to 15th, the right hon. Gentleman might have had a point. Britain

4 Mar 1996 : Column 35

has fallen from 13th to 18th. We have fallen behind Italy, Norway and Iceland. The fact is that we have fallen from 13th to 18th. [Interruption.] I am quoting not my research or a Labour party source, but the Government's own competitiveness review, published only last year. Does the Chancellor want to say that that review is mistaken? Does he want to withdraw it? Does he not recall that it was signed by him, the Prime Minister, the Deputy Prime Minister and eight other Cabinet Ministers?

Mr. Kenneth Clarke: No; as I pointed out, my case against the hon. Gentleman was that the fall from 13th to 16th, which is what the tables that he relies upon show, took place by 1980, when we were in 16th position. Between 1970 and 1980, we fell from 13th to 16th. We are still 16th in that league table. I pointed out that between 1981 and 1993, taking a proper international cycle, we outperformed practically everyone in the G7 and had growth well above the G7 and European averages.

Mr. Brown: The facts are that we have fallen from 13th to 18th and that most of the fall did not occur in the early 1980s, as the Chancellor was trying to tell us today. The biggest fall happened between 1990 and the present day. When we entered the 1990s, we were 14th in that league; we are now 18th. The Chancellor had better get his Treasury statisticians to check the full facts, because he is entirely wrong and will have to apologise to the House. For all his bluster this afternoon, nobody can deny the central fact that Britain has fallen down the world prosperity league under a Conservative Government.

Mr. Cash: Will the hon. Gentleman take the opportunity of this important debate, having regard to the fact that unemployment rates in Europe are the worst for 40 years, to repudiate on behalf of the Labour party any idea of returning to any form of exchange rate mechanism and the idea of a single currency, which has been repudiated by opinion poll after opinion poll throughout Europe?

Mr. Brown: The hon. Gentleman this morning called on the Chancellor to consider his position because of statements that he made in The Daily Telegraph.We support the principle of managed exchange rates, as does the Chancellor. We support the principle of monetary union, but we must consider the details of what is on offer, and we shall do that.

Sir Roger Moate (Faversham): The hon. Gentleman is fond of yes-or-no questions; will he answer the question that he put earlier? Is the Labour party in favour of a referendum on a single currency, yes or no?

Mr. Brown: We are absolutely clear that we are in favour of a test of opinion, whether at a general election--[Interruption.] The hon. Gentleman--[Interruption.] I see this afternoon something that is typical of the modern Conservative party. It is entirely a matter of honourable Gentlemen; there is not one woman on the Conservative Benches today.

4 Mar 1996 : Column 36

The hon. Member for Faversham (Sir R. Moate) asked me to give my position on the referendum; I have given it clearly. We favour a test, whether by a general election or a referendum. What is the Chancellor's position? I shall give way to him so that he can answer.

Mr. Kenneth Clarke: I have already given a much better answer. The hon. Gentleman's answer is ridiculous--as one of my colleagues said, it would give rise to the possibility of a phone-in. We shall make up our mind on economic and monetary union in the British interest at the time--if and when it happens. Whether a referendum is required will be a question for that time. That is our position and it seems a whole lot clearer than the hon. Gentleman's.

---