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Mr. Deputy Speaker: Order. The hon. Gentleman's time is up.

8.20 pm

Sir Timothy Sainsbury (Hove): If the debate has done nothing else, it has reminded the House and, I hope, a wider audience of the extent of the differences of view

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about Europe on both sides of the House. The hon. Member for Birmingham, Hodge Hill (Mr. Davis), following the federalist views of the hon. Member for Brent, East (Mr. Livingstone), stretched the views of the Opposition quite extensively--but, of course, they were not the only ones to do that.

In Dublin, my right hon. Friends will discuss--both formally and informally--many issues relating to European Union activities from which we derive benefit. Issues such as combating international terrorism, drug smuggling and organised crime, and protecting the environment or even endangered species such as migratory birds, will be touched on, but I want to focus on matters in which I was particularly involved during my time as a Minister.

Two issues have an especially serious impact on our economy, and also on our influence in the world. The first has already been mentioned a number of times in the debate. Inward investment is a great British success story, and, if I may say so, a great Conservative success story. Some of us remember the opposition and reservations that Labour Members expressed in the early days of that success; it could be described as scepticism. When we debated the subject last week, my right hon. Friend the President of the Board of Trade clearly set out facts and figures showing the scale of our success. Most obvious and impressive was the creation of 800,000 jobs in the United Kingdom since 1979.

The full scale of the benefit that our economy derives from inward investment is often not fully appreciated. Those 800,000 jobs are clearly a big enough achievement in themselves, particularly as many of them are in development areas, but they are only the "direct" jobs. There are also the "indirect" jobs--the jobs that go with the suppliers of businesses that decide to locate here, and with the contractors who build and repair their premises. There is the advantage of the new technology that many inward investors have brought to us--and not only the new technology, but, in many instances, the new managment techniques, such as personnel management skills, that have proved so rewarding to many British businesses. Inward investors have made a major contribution to the raising of performance standards, and to improving the productivity of British industry as a whole.

The best example of that is, I think, the motor industry. In 1979, the Conservative Government inherited a motor industry that appeared to be in terminal decline: if any industry was ever a basket case, that was it. Our industrial relations reforms--again, opposed by the Labour party--opened the door to the inward investment that has transformed the motor industry, which is now one of the most successful and competitive not only in Europe but in the world.

I do not suggest that all that inward investment would disappear if we withdrew from the European Union. What I am saying is that every step that we take away from full and active membership weakens the attraction that the United Kingdom holds for inward investors, especially those--I can say from personal experience of responsibility for promoting inward investment that they constitute the majority--who come here because they want a base in the European Union: a manufacturing plant, perhaps, or a head office.

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I remind the House, however, that those are not the only people who would be discouraged by our drawing back from whole-hearted commitment to the European Union. We would run a much larger risk if we weakened that commitment, and it would not be just a risk to our position as the most successful and the preferred location for inward investment. Every time a multinational company--a company operating in several European countries--had to make decisions such as inward investors make, involving where to site the plant to manufacture a new model, where to use new technology and where to develop new techniques, it would make the same assessment as those inward investors. In today's fast-moving industrial and commercial world, such decisions need to be made very frequently.

Many constituencies have inward investors. Surprisingly, my constituency has a major investor from Japan and another from the United States, but almost every constituency has employers who might relocate jobs elsewhere in the European Union if they felt that our commitment and involvement in the Union was diminishing or at risk. Those employers are the multinational companies, with plants in more than one state in the Union. We are fooling ourselves if we believe that withdrawing from active participation and full membership of the European Union would not dramatically affect our country's economic prospects. It would damage employment immediately, and would continue to damage it for a long time. We would put literally millions of jobs at risk--a risk that we should neither take nor underestimate.

A second issue that is of vital interest to our economy is one that frequently took me to Brussels during my ministerial career. I refer to international trade negotiations. As my right hon. and learned Friend the Foreign Secretary pointed out, we do not just have a single market from which we have removed all internal tariff barriers, as well as non-tariff barriers; we also have a single market that is open to the outside world. It is not "fortress Europe", but a single market with very low tariff barriers and the minimum of obstacles to trade from outside. That is greatly in our interest, given that we are a major trading nation--indeed, by some measures the major trading nation.

We have succeeded in rejecting protectionism, not just for ourselves--we could always have done that--but for the whole European Union, the world's largest trading bloc and our major trading partner. That is an outstanding example of Britain's success in influencing the Union in the British national interest. Negotiations to that end were not always easy. I recall that, on more than one occasion, it was 11 against one: the French were isolated. But we succeeded in persuading the European Union--our partners--to reject protectionism, and that led eventually to a pretty satisfactory settlement in Marrakesh which, in turn, led to the creation of the World Trade Organisation.

Our committed membership of the European Union has given us a strong voice in world trade negotiations. Only three parties matter in those negotiations: the European Union, Japan and the United States of America. If we were not playing an active part in the European Union, our voice would be small, single and largely neglected. We are not eligible to join other groups, whether it be Cairns or the Association of South-East Asian Nations.

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People who think that we could succeed in those negotiations outside the European Union are deluding themselves.

Therefore, for trade, for inward investment and for so many other reasons, our membership is overwhelmingly in the national interest, but we shall not gain membership's full benefits if we stay on the EU's sidelines. We must show a willingness and a commitment to play a full and constructive part in the EU's affairs if we are to gain those benefits. If we do that, however, we shall continue to see the economic benefits. They will continue to grow. I therefore urge my right hon. Friends to negotiate with that end in mind, because it is jobs and our economy that are at stake.

8.30 pm

Mr. Tony Banks (Newham, North-West): Ientirely agree with the right hon. Member for Hove(Sir T. Sainsbury). It would be economic lunacy for us to contemplate the United Kingdom leaving the European Union. Many Conservative Members still seem to contemplate that, but they remind me in many ways of the famous weather report that said, "Fog in channel--continent cut off." They believe somehow that we could survive on our own, and that, by our leaving the EU, the EU would be the loser. That is not so, and more people are prepared to say that in the EU.

The right hon. Gentleman made great play about inward investment. Forty per cent. of inward investment into Europe comes into the United Kingdom--Ministers keep bragging about it--but I remind him that the statistics show that it was also 40 per cent. during the Attlee Governments of 1945 to 1951. He should also remember that, for every one pound of inward investment into Britain, there is £3 of outward investment. Where is that going? It is setting up competition elsewhere, so the Government should be careful before they start bragging about that set of statistics.

The Government should be worried about another statistic. Britain is bottom of the European league in terms of the percentage of gross domestic product we spend on investment. They should be concerned about that statistic, but undoubtedly they are not.

It was an amazing scene yesterday when the Chancellor of the Exchequer was at the Dispatch Box. It was the political equivalent of Landseer's "The Stag at Bay". I know that he is a rather portly stag, but rabid hounds were all around him--well, they were not all around him; they were all behind him.

I do not think anyone who has sat through various big debates in the House can recall quite as bloodthirsty a scene in terms of an attempt being made to rip one of the most senior Ministers to pieces. [Interruption.] I take the point. There is something very attractive about the Chancellor. He gives as good as he gets, but it was no stag party that we were watching yesterday.

Of course, the Chancellor found that there was more support for what he was saying from Labour Members than from Conservative Members. I do not suppose that that helped him much. I am sure that he would have preferred us to stand up and start having a go at him. It merely confirms some Conservative Members' suspicions when the Chancellor receives support from Labour Members. In fact, I heard some Conservative Members say to the Chancellor, "Why don't you join the Labour

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party?" Our party has been so thoroughly cleansed that it is fit, I am sure, for ex-Conservative Chancellors to join. Who knows, we might yet see him sitting with us, but there it is.

I go along with the Chancellor position's that to wait and see makes sense, which was endorsed by the Labour Front-Bench team, but only if it is a genuine position. Too many Conservative Members are paying lip service to that stand now, but frankly they would be better off being more honest and saying that, whatever the circumstances--convergence criteria or whatever--they do not want, will not go for and will not support the UK joining a single currency.

It is tempting for Labour Members just to sit back and watch the Conservative party rip itself to pieces over the issue, but we should not do that. That would provide short-term political gain for the Labour party, but the issue is far too important. The future of the UK in the EU is far too important for the issue to be left to a vicious dogfight among Conservative Members. We must play our part in the debate, in Parliament and outside.

What is fascinating is that the debate is far more within the parties than between the parties. That point has been made before, but we need to be aware of it. The Conservative party has real problems. The right hon. Member for Sutton Coldfield (Sir N. Fowler) said that the Labour party has its splits. He is absolutely wrong about that.

In the Conservative party, it seems to be a left-right split. I do not know all the Conservatives on both sides of the argument, but one does not often see or hear anyone who could be described as on the left of the Conservative party bitterly opposing further economic and monetary union. One does not find Euro-sceptics on the left wing of the Conservative party. [Interruption.] Perhaps there are one or two. The hon. Member for Twickenham (Mr. Jessel) is merely the exception that proves the rule. That is not the position in the Labour party. As my hon. Friend the Member for Brent, East (Mr. Livingstone) said, effectively the split was more generational than ideological.

I also notice that most of the Euro-sceptics, if not all, are also anti the Prime Minister. They have never really supported him, and they are using this issue as a way of getting at him. That is the way in which I observe the matter. Members can disagree. Increasingly, people outside observe it in that way, too.

Whatever one thinks, the public are seeing not the big issue of Britain's role and future in the European Union being debated, but the governing party ripping itself to pieces. That is looking good for the Labour party, but, as I have said before, we should not allow that to be the only way in which we let the debate proceed. The Labour party must join in.

The differences among Labour Members are not left-right differences or ideological differences, as the differences seem to be among Conservative Members, but genuine differences of opinion. People in the Campaign Group such as my hon. Friend the Member for Brent, East and myself disagree with other members of the Campaign Group--which incidentally, for Members who do not know, is laughingly referred to as the hard left group in the parliamentary Labour party--such as my hon. Friend the Member for Bolsover (Mr. Skinner) and my right hon. Friend the Member for Chesterfield (Mr. Benn), who are

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also on the left of the Labour party; so ours are differences of opinion. Conservative Members' differences involve ideological thoughts. They might laugh at that, but it is true, and they are destroying their own party. I do not mourn that, but it is worth putting it on the record.

It was disingenuous of the Chancellor to say in his speech that European monetary union will not lead to a political super-state. It might lead to such a state. A single currency will, however, undoubtedly lead to closer political union. The single currency issue is a political issue before it is an economic issue. Any number of Members have said, "Listen to what the politicians are saying in the EU. They are going for a federal Europe"--whatever the definition of federal is--but enough people want a united states of Europe.

I agree with the whole analysis of my hon. Friend the Member for Newham, South (Mr. Spearing), who drew attention to precisely that development, but I thoroughly disagree with his conclusion. Like my hon. Friend the Member for Brent, East, I want a united states of Europe, so we have an interesting division, even within the borough of Newham, but it is not a left-right issue, as it is on the Conservative Benches.

I want a united states of Europe because that is the most exciting prospect we have. I want a European Government and a European President, and I want them to be based in a European Parliament. We need to do many things to democratise the institutions, but I want those things because it seems that it has been given to this political generation, perhaps uniquely, to reconstruct Europe peacefully for the first time. We must seize that opportunity with both hands.

How could a single currency be so disastrous? How can I believe the tales of woe--told mostly by Conservative Members, but also by one or two Opposition Members--when so many British business men want a single currency? Do they want to destroy their businesses and bankrupt their companies? Why is the Trades Union Congress such an avid supporter of the single currency--because it wants more unemployment in this country? That is absolute nonsense. All those scare stories that are being spread about by the Euro-sceptics do not frighten me, and I do not think that they are frightening the electorate.

I should like the issue to be taken out to the electorate, and, so far as possible, debated dispassionately--rather than allowing it to continue as the basis for a dogfight among Tory Members.

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