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Lord Whitty: The reason why I did not deal in detail with that point is because I believe that much the same point was made in the debate that we had on the EMU provisions on, I believe, the second day of the Committee stage. If we are to have a debate on particular amendments which extend to the whole area of economic management, we are going to be here a very long time. I accept that there are some aspects of economic policy in the European Union which have a negative effect on employment. That is the exact and main reason why I believe we should institute an employment chapter which begins to reverse that tendency. Therefore, such a chapter should be seen by the noble Lord, among others, as a benign move in that direction, even if it is a limited one.

Baroness Carnegy of Lour: Before the noble Lord finally sits down, may I say that I have listened with enormous interest to the debate. I have a question which the noble Lord may regard as a matter of detail. If he cannot answer it immediately, perhaps the noble Lord will write to me. He will know that the matters under discussion, such as social affairs and employment, will devolve to the Scots parliament. Under the Scotland Bill not only is there devolvement, but there is no certainty that a Minister from that parliament will be present when United Kingdom Ministers discuss these matters in Europe. Are the Government considering altering the Scotland Bill to make sure that a Minister from the Scottish parliament will be present when these matters are discussed? If not, there are serious questions when there is policy divergence between England and Scotland. Will the Scottish parliament be kept in touch with Europe? I shall be grateful if the noble Lord can answer that question or write to me about it.

Lord Whitty: I believe that the noble Baroness would like me to write to her so that I get the formulation right. However, I do not believe that changes are required to the Scotland Bill to fulfil what we are committed to. I may not have got the formulation quite right, but as regards those areas which are devolved to the Scottish parliament, where European legislation is relevant steps will be taken to ensure that the views of the Scottish parliament on behalf of the United Kingdom are taken into account in the deliberations at European level.

Lord Pearson of Rannoch: Before the noble Lord finally sits down, may I press him on a position taken with some force by the noble Baroness, Lady Williams, and the noble Lord, Lord Grenfell? It seemed to me that they made much play of the suggestion that the United Kingdom should be happy to share with our European competitors the secrets of our social, employment and industrial success compared with some of theirs. In other words, our competitors in the European Union would be wise to accept our experience and advice and follow it.

The point I wish to put to the Minister and on which I would welcome his view is that the evidence to date is that that is not the way matters flow between us. I had intended asking the noble Baroness and the noble

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Lord the same question; perhaps they might like to intervene since we are in Committee. Can the Minister give examples of where the Commission and others have accepted our advice? It seems to me that the bulk of the flow is the other way. I refer to the working time directive--the 48-hour week, as it is known--parental leave, young people at work and other directives mentioned by my noble friend Lord Moynihan. It seems to me that they all prove the way the river flows in this debate. It does not flow from us to them. Can the Minister tell the Committee why he believes that it is going to change direction?

Lord Whitty: All the examples the noble Lord cites show our partners being slightly resistant to ideas coming from the United Kingdom for understandable reasons. There was the hostility of the United Kingdom government of that period to anything European. Therefore, it is not surprising that there was then a certain intellectual as well as political resistance. I believe that in the past few months there has been a major change in that flow. Indeed, the conclusions of the Luxembourg Summit are clearly reflective of the views put a few weeks earlier by the Chancellor of the Exchequer in his proposal as to what a European-level approach to employment policy should be. That proposal is reflected virtually word for word in the Luxembourg communique and it is being pursued in the national action plans of every member state. It will have to be reported on by the time of the Cardiff Summit. These are early days. I accept that.

I believe that we have seen a reversal in the flow of ideas--not always ideas which, at their most extreme, have been expressed from time to time by people who are defensive about the position of the previous government but ideas we can share with our fellow members. However, we should not be so arrogant as to assume that there are not still a few ideas of theirs which we can learn from as well.

Lord Hamilton of Dalzell: Before the noble Lord sits down, I have detected in the debate--acknowledging that the party opposite is now in power and whatever it says goes--an ideological difference between us. That was borne out in the contribution made by my noble friend Lord Tebbit. He believes that free market ideologies are the secret to what we have achieved. What has to be borne in mind--and this was very much derided in the speech of the noble Lord opposite--is the extremely painful period this country went through when we shook out what one might call "rust-belt" industries. Europe needs to do that very badly. What advice will the Government give in that respect if they are going to give advice to Europe? Without it, nothing much will happen. Alternatively, will the Minister give the kind of advice which he gave when his party was last in power which led to our having the highest tax, the lowest output, and the lowest level of benefits in the whole of the OECD?

Lord Whitty: We have all been through painful periods of economic adjustment. We went through a much belated one, in the view of some people, in the

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1980s. But we did so in a way which did not take account of the need to ensure that not only were we moving away from inefficient work practices and areas of industry but also that we were equipping our workforce to take on the skills and move into areas in which we would be able to compete in the longer term.

We still have one of the least skilled workforces in Europe. The Germans, and almost any other European country, still have better skill levels. If we can combine the adaptation of the structure of British industry which we have gone through over the past couple of decades with the continued upgrading of the skills of our workforce and of our innovation and expertise, that is the kind of message that we would wish the whole of Europe to receive. At no stage do we intend to go back to what may have been prescribed by some Members of this House in the 1970s. Nor do we intend to go back to achieving change solely at the expense of the workers which, by and large, was the experience of large sections of our community during the 1980s. There is a better way forward not only for Britain but for the rest of Europe.

Lord Hamilton of Dalzell: I am sorry to intrude again. I believe I detected the noble Lord saying that the Germans have reached that situation already. I am always interested in the contributions of my noble friend Lord Beloff. He made the point that the Germans are not very happy in spite of that.

Lord Whitty: I did not say that the Germans had it already; I said that the Germans have a more highly trained and flexible workforce in many areas requiring higher skills than we have been able to achieve. That does not mean that they have resolved all their problems.

I get slightly fed up when people in this House and elsewhere point to Germany as an economic disaster. I note that the noble Lord, Lord Beloff, is no longer in his place, and I accept that some of the judgments of the electorate in Eastern Germany are worrying, but, for heaven's sake, let us accept that one of the major reasons for the Germans' relative failure in the past six or eight years has been the enormous task that they have taken on in absorbing the whole of the defunct and decaying economy of 17 million people in Eastern Germany. I cannot even bring myself to imagine what would have happened to the British economy in 1990, in the last years of the Thatcher regime, if we had had to absorb similar costs. Germany's record over the past 50 years in terms of its creation, prosperity and democratic traditions has been a lesson to us all. The fact that Germany has stumbled on the economic front in the past eight years or so has very little to do with some of the issues raised this afternoon, and quite a lot to do with its absorption of Eastern Germany.

I believe that this amendment stands in the name of the noble Lord, Lord Shore, but perhaps I may ask my noble friend Lord Stoddart to withdraw it.

5.30 p.m.

Lord Stoddart of Swindon: If my noble friend Lord Shore of Stepney were here, I am sure that he

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would want to reply at reasonable length to our very long and detailed debate, which has ranged widely over economic policy, employment policy, the social chapter, economic and monetary union and the single currency. Having to reply to such a debate is a tall order, and I am not tempted to do so otherwise we would be here for a long while yet.

I am sure that we were all pleased to hear my noble friend Lord Whitty say that this is not a Stalinist measure. Some of us agree that it is not a Stalinist measure at the moment, but we are frightened that it may become such in the future. Let us hope that my noble friend is right and that it will not progress in that way.

On the social chapter and collective bargaining, I advise my noble friend that I was in the trade union movement a long time and I believe that trade unions are still in favour of collective bargaining. Indeed that is their whole raison d'etre and if they cease to believe in collective bargaining, they cease to exist. What is necessary is a broad framework in which they can embark on collective bargaining. I am afraid that the social chapter goes further than I would wish in those circumstances.

I must also advise my noble friend that it may well have been necessary under the previous government to have the social chapter because their attitude to trade unions was perhaps a little different from our own, but now that we have a Labour Government we do not need to be constrained by any social chapter because we now have the power to put into operation whatever social chapter measures we want. That is the essence of the British democratic system--and I do not want it interfered with. When there is a Conservative government in power with a mandate from the people, they must put forward their policies unconstrained, but when a Labour government are in power I expect them, having the same sort of mandate but on different policies, to be entitled to do exactly the same. That is the essence of the British democratic system and that is why I am opposed to the social chapter. I believe that it undermines our system.

As I said earlier, we have had a long and useful debate. It seems that we are agreed on some measures. We believe that the free market is good--that is, at least the two Front Benches agree that it is good and that it should continue for all time because it will bring us all great benefits. Having said again that this has been a good debate, I beg leave to withdraw Amendment No. 10.

Amendment, by leave, withdrawn.

[Amendments Nos. 11 and 12 not moved.]

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