BUSINESS OF THE HOUSE

HC Deb 26 June 1986 vol 100 cc564-96

Ordered, That, at this day's sitting, the European Communities (Amendment) Bill may he proceeded with, though opposed, until any hour.—[Mr. Neubert.]

Mr. Moate

I should be grateful if my hon. Friend the Minister would consider some of the practical illustrations that have been given, including broadcasting and the MOT. They are the tip of the iceberg of hundreds of regulations that might be unwelcome to the House and to the country and that we might be forced to accept. We are being asked to pay a constitutional price for naive expectations.

My hon. Friend the Member for Harrow, East and others talk about the great period of our Presidency. It is surprising how quickly a Presidency can come and go, with nothing remaining as a souvenir of that great period of grandeur. I forecast that that will happen this time. The completion of and progress towards the internal market is a pious hope and it is folly to pay a constitutional price for it.

Mr. Budgen

Does my hon. Friend suggest that the Minister should explain to the House the constitutional advantages of the Presidency? I agree that, in recent weeks, we have heard much about the exciting possibilities that will he open to the United Kingdom during our Presidency. It would be most reassuring if my hon. Friend the Minister could explain the advantages.

Mr. Moate

I suspect that that, too, strays rather wide òf the completion of the internal market and the amendments that we are discussing. Perhaps it is one of the few benefits of being a member of the Community. For a few months, we shall have the illusion of granduer, with a range of Ministers being given the wonderful title of "President".

What have we gained so far? If have not gained very much, why not? Hon. Members have mentioned insurance. We do not need a new Act statutorily to remove insurance barriers, but so far every move has been so incredibly timid as to he of almost no benefit to Britain. I suspect that exactly the same will prevail in the future, because most of the European internal national insurance arrangements are so nationalistic that no amount of naive hope in the Foreign Office will alter them. For many years, those countries will still maintain a completely different tradition of internal regulation of insurance and there will be almost nil benefit to the United Kingdom.

The same applies to many other areas, including the freedom of capital movements. The Minister will accept that one of the Government's most dramatic moves when they came to office was to sweep away all restraints on capital movement and to free exchange controls. That reduces this type of naive little gesture into insignificance. When one introduces into an Act of this kind the good intention of freeing capital movements but then says that less well developed countries can be exempted, that nullifies the object of the operation. Any country in difficulties will claim that exemption. We know that to be so. We know that if Spain, Greece, Portugal, or, indeed, any other member state gets into difficulties, all these pious hopes will be reduced to nothing. We shall not get those free movements of capital, goods or services if any one of the member states at any moment deems that they do not want them.

However, I believe that Britain will continue to try to stick to those rules, even though many member states find ways round them. That is broadly why we are so unwise to take the step that we are doing. We generally adhere to the rules, because, basically, we want those rules to work. We want freer trade. But when it comes to protecting our national interest, we are not as good at it as other countries and, generally speaking, we lose. Therefore, we are paying a high price in constitutional terms for an empty piece of expectation on the completion of the internal market. Ultimately, I hope that the Bill will be rejected, but certainly these amendments need to be supported.

Mr. Spearing

The hon. Member for Faversham (Mr. Moate) has done the House a service in pointing out one of the fundamental differences between free trade, be it across the world or between nations such as Germany or Italy in their earlier development, and what we have before us today, and, indeed, the philosophy behind the so-called internal market and its authorising government. He has helped us to understand, as has the right hon. Member for South Down (Mr. Powell), that we are not just talking about the economics but about the political power that requires there to be this equivalence of law over the whole area and, indeed, the range of law which is required.

One of the differences in that concept is the need to exercise legislative authority. Whereas free trade can be relatively easy by means of an international treaty, the imposition of common laws, requiring a theoretical perfect market which penetrates into almost every nook and cranny of technical, industrial, social and economic life, is different. It is the latter with which the so-called internal market is concerned, not only in its legal proliferation but in its institutions of origin — the Commission, the Council, and now the so-called Parliament.

In producing that situation, we have an enormous proliferation of paper. If we are to increase the scope and range of the internal market, as Lord Cockfield and the Government want — indeed the Minister talks about "progress"—we shall be lost in a sea of paper. Already, the proliferation of treaties, articles, regulations and their alarming cross-references are almost beyond belief. When people are kind enough to come to me occasionally for some advice or information on these matters I frequently have to tell them that I am now unable to keep up. The fact that I have some assistance from the Clerks at the House shows just how serious the position has become. I daresay that the Minister, who has other responsibilities as well, will come to that position fairly soon.

What happens when we come to the second round of discussion in legislation, when we have the position shown in the diagram which we were talking about earlier in relation to the place of the Council and the Commission? In place of the existing five boxes, there are 13 combinations. In making these laws the mind will begin to boggle, because each one of these steps can be knocked around like a tennis ball or a ball on a pin table before it becomes law. The amount of paper work, both in genesis and in legislation related to the internal market, is almost beyond belief.

I have a feeling that in future years it will be difficult for anybody to try to understand what we are doing in this debate. Power will either flow or will disappear into the sea of paper and people will ask what Parliament was doing in passing these laws about the internal market. They will find great difficulty in understanding the matter because they will need to have five documents: the informal selection sheet, the amendment sheet, the Bill, the European Single Act and the treaty of Rome. Even with those documents and even if they are fairly adept at dealing with them and their inter-relationships, this debate will not be very meaningful.

Because each group of amendments is so wide in its scope, each of these debates, of which this is the second, provides enough scope for a Second Reading. That is why many of the speeches have not been precise about the texts of any of the matters that are before the House. I do not say that by way of complaint: it is a consequence of the nature of the material before us. That material highlights the fact that we are not properly doing our job, even with the time we are taking. I say that not because I want to use up time as some hon. Members might suspect, but for you, Sir Paul, to bear this in mind in relation to any matters on the closure in these groups.

I do not intend to proceed to the scope of a Second Reading speech, but to what I regard as proper Committee work. Committee work is much easier upstairs, where we have desks and tables, than it is in the House. Although I make no complaint about that, I propose to revert to the atmosphere that more often prevails upstairs, because I shall go in detail into some of the text on the internal market. Do I detect a little disappointment from the Treasury Minister? One day people may look at these two days of debate and say that gentlemen of England now abed might well be here. If power goes from this place it may not worry the Whips or the Government, but it will worry the people of Britain.

Mr. Deakins

Does my hon. Friend recall that in 1972 the European Communities Bill spent a large amount of time in the House? Many hon. Members took part in those debates and all sides of the argument were advanced. This Bill cannot be said to be in the same league as the 1972 Bill, but it is a major constitutional Bill and the most important that we have had in the House since 1972. To think that it can be disposed of easily seems to be an over-optimistic view.

Mr. Spearing

I agree with my hon. Friend the Member for Walthamstow (Mr. Deakins) in some ways. This Bill and the European Single Act treaty— I shall keep on calling it that because it is not an Act in our sense of the word — may be less important in some ways than the European Communities Act 1972 and the debates leading up to it, but in other ways it might turn out to be of even more importance because it may reinforce and accelerate a good deal of what happened subsequent to that Royal Assent to the Bill without the public and without even our colleagues in Parliament knowing.

As several of my hon. Friends will remember, we debated that important 1972 Bill for one or two days a week for one or two months. Not only were we able properly to prepare, but we could catch up with what had gone before. At that time we had a different set up to that which exists now and the Department and the Minister could prepare for the debates and reply to correspondence. We were able to have questions in the House and other debates. This Bill will not give us that opportunity. Perhaps you will bear that in mind, Sir Paul, if there is any tendency to expedite matters.

10.15 pm

Sir Russell Johnston

If this Bill is so constitutionally important, why is the House not crammed with hon. Members anxious to speak?

Mr. Spearing

I am glad to be able to reply to that. The hon. Gentleman may not have taken my point on the proliferation of documents. One big difference between the 1972 Bill and this one is that in 1972 people had some idea of what the legislation was about and of its significance. There was at least some national understanding. But there is virtually nothing in this Bill's explanatory memorandum that would give the casual reader an understanding of the contents of the Bill or of the Single European Act.

The Government have only published the Single European Act as it stands. Only a Select Committee has given an as it stands, and as it will be, version. The Government have not published a White Paper telling us what it does. The Single European Act treaty was not susceptible to the procedures of the European Select Committee on legislation. Because of that, and because alliance Members, who are very much in favour of the legislation, have not participated much in the debate, other than to say that they are in favour of it, general knowledge of the Bill is far less than its importance demands—

The Second Deputy Chairman

Order. I know that the hon. Gentleman is dealing with an intervention, but he is now making a Second Reading speech. However, I am sure that he is about to come to the internal market.

Mr. Spearing

Yes, indeed. I said as much at the beginning of my speech. Perhaps I was making too lengthy a response to the intervention, although I wanted to state the truth of the political situation.

At present, the internal market is regulated under the existing articles of the treaty of Rome. Article 100 is the current regulating article. It says that the Council shall, acting unanimously on a proposal from the Commission, issue directives for the approximation of such provisions as laid down by law, legislation or administrative action in member states as directly affecting the establishment or functioning of the Common Market.

Article 100 was inserted to cover those instances when the treaty of Rome did not specifically provide power for the approximation of such laws. It was a sort of Henry VIII clause, saying that in order to complete the Common Market, article 100 was to be used. It was quite controversial, because we frequently got legislation under article 100 which pushed at the limits of the vires of the EEC, particularly in technical harmonisation and the environment. That is one reason why both of those topics are now under the European common Act included in the specific treaty vires of the EEC. Thus we are talking about not only greater speed of legislation and adjusted majorities but wider vires as well, all at once. The Single European Act changes the unanimity rule entrenched in article 100 to majority voting under article 100A. That is the article that gill take over. I shall talk about the countries involved in the qualified majority shortly but as we go through these matters I will ask the Minister some questions which I hope she will answer either at the end of the debate or conceivably on clause stand part.

My first point relates to Article 99 of the treaty of Rome and Article 17 of the Single European Act which states that, despite article 100.A. matters relating to: turnover taxes, excise duties and other forms of indirect taxation shall remain unanimous. That is important, because the Government have made great play—understandably so — by stating that "Oh yes, it is majority for many things, but on these matters we retain unanimity". I think that that will he welcomed by all hon. Members even perhaps by the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston).

As I understand it, there are directives relating to VAT which have already passed into EEC legislation and which do not require anything to do with the Single European Act but which require us to harmonise our VAT provisions, irrespective of article 100A in the Treaty. It is suspected that the hapless Chancellor has already had to abide by those directives in harmonising the excise duties on alcohol or perhaps even requiring VAT on buildings.

The Second Deputy Chairman

The hon. Gentleman is dealing with the next amendment, which refers to fiscal harmonisation. We are now dealing with the internal market, which is a separate matter.

Mr. Spearing

I apologise because I did not realise the scope of these did not go back to Article 99 and I shall now proceed with Article 100. Line 3 of Article 100A states: the following provisions shall apply for the achievement of the objectives set out in Article 8A. I have studied these documents fairly frequently over the past few days and I cannot find an Article 8A of the Single European Act there is just an Article 8. I have studied the treaty of Rome and I cannot find an Article 8A there either. At some stage in the debate perhaps we can have an answer from the Minister as to what objectives are found in Article 8A and where it is.

Mr. J. Enoch Powell

If the hon. Gentleman tries page 8 of the Single European Act he may find it at the bottom of the page.

Mr. Spearing

I am very grateful to the right hon. Gentleman. I see the point. What has happened is that there is a new Article 8A which will be put into the treaty of Rome and it is not the existing article. It should really say Article 8A applies to the new measures. I am grateful to the right hon. Gentleman. It illustrates the difficult maze which we are in. Perhaps I have not been as efficient as the right hon. Gentleman. If we are finding this difficult I fancy it is an answer for the hon. Member for Inverness, Nairn and Lochaber.

I now proceed to the point I raised with the right hon. Member for South Down at the end of his speech. That is the political compulsion on the Council of Ministers that it should complete as many of these harmonisation proposals as possible well before 1992. I will not deal at great length with the 300 regulations which Lord Cockfield has waiting in the wings. He has laid them out in the appendix to his voluminous report. We are aware that they will be implemented under Article 100A in due course. I shall refer in a moment to some of the regulations which will be implemented early on.

What is the effect of Article 100B? We are aware that, after 1992, the Commission, as stated in Article 100B, together with each member state, has to draw up an inventory of national laws and regulations which, under Article 100A, have not been harmonised. In other words, before 1992 comes those of the 300 regulations, or others which have been invented by them, not actually past into law will be collated. After that date, the Commission presents the package to the Council of Ministers and the Council—I quote from the provisions of article 100— acting in accordance with the provisions of Article 100A". That no doubt means qualified majority, and I ask the Minister to confirm that. This is another piece of cross-reference that we must get sorted out. The article continues: may decide that the provisions in force in a Member State must be recognised as being equivalent to those applied by another Member State. The word "may" is slightly misleading. If I read the provision correctly, the Council can read the inventory and say, "Germany has a good system there, and that should be the system for the entire EEC." By a qualified majority, if that is obtained, that becomes the law for the entire EEC.

This sounds improbable at first because of the draconian nature of the approach, but as I read the words of the treaty, that is what is likely to occur.

Mr. J. Enoch Powell

rose—

Mr. Spearing

The right hon. Gentleman may wish to correct me.

Mr. Powell

I wonder whether the hon. Member for Newham, South (Mr. Spearing) is correct in his interpretation of the second part of the first paragraph of new article 100B in article 19 of the Single European Act. It appears to say that having made a list of non-conforming national laws, there is permission to fudge by saying, "It is all right after all. It is 1992 and we shall regard the national laws as if they conform." It is one of the methods of pretending. It is a youmay-fudge-in-1992 provision. Perhaps my suspicions are ill-founded, but I have received a sort of nod from the Treasury Bench which seems to indicate that it is possible that there is permission to fudge in 1992. I can quite understand the hon. Member for Newham, South being unable to credit that intelligent adults should purport to pass legislation of this sort even in the form of a treaty.

Mr. Spearing

I am grateful to the right hon. Gentleman. If I may revert to some of my earlier remarks, this is good Committee work. I am not sure that we can be at all certain from reading the words of the supranational draft legislation which of the several fascinating and equally bizarre solutions is the correct one. The right hon. Gentleman may be right and I shall be happy to give way if the Minister of State wishes to intervene to put us out of our misery. I rather doubt, however, that his solution is correct, and I shall suggest why. If it is correct, all the national states will play for time. They will say that they do not want to reach any conclusions under article 100A, except where there is a majority to push one through. They will wait, because the fudge under article 100B, which is the right hon. Gentleman's solution, is more preferable as they will be able to continue with their own national laws. If that is so, let the Minister say. If on the other hand, the effect of article 100B is the more draconian and perhaps even more startling solution which I have suggested, from a first, third or fifth reading of article 100B, let us know. We are not having ministerial speeches before ministerial replies, although in good Committee work we usually do, but I shall be glad to give way to the Minister if she can tell us which solution is correct. I would suggest that this is a matter of some substance. It may save the Committee and the House of Commons some time if we are able to clear up the issue straight away.

Mrs. Chalker

I am happy to help right hon. and hon. Members on this issue, which I can see has caused a great deal of heart searching if not head scratching. I shall explain what article 100B provides. As the hon. Gentleman said, it provides that in 1992 the Commission will draw up an inventory of national laws which would be harmonised by the end of 1992 under article 100A and which have not been so harmonised. It is then up to the Council to decide be qualified majority on the extent, if any, to which such provisions should be mutually recognised as equivalent.

On page 25 the hon. Gentleman will find a declaration that links with the Commission's obligation under article 8C, which he will find on page 9. He will find that is to take account of the special difficulties that face particular economies.

10.30 pm

The right hon. Member for South Down (Mr. Powell) was almost correct, but not quite, and I can only too well understand why. There has to be a specific decision made by the Council, but the new article would not mean the Council could decide that the standards in any one particular member state would be those adopted by all other member states; would rather enable the Council to decide that member states should give mutual recognition to each other's standards in a particular area in order to allow the free circulation of goods. They would not be applying their own countries' standards on goods from other countries. It would require anyway a specific Council decision in each case. That would remove the worry of the hon. Member for Newham, South (Mr. Spearing) and, I hope, clarifies the matter for the right hon. Member for South Down.

Mr. Spearing

I am grateful for that ministerial intervention. This is as a Committee should be.

The Minister has said that what will occur is not of the solutions apprehended by the right hon. Member for South Down and by me, but something in between. The Council by a majority, I understand, may say that any two or more member states may voluntarily regard each other's national arrangements as mutally applicable and accept them, so that will become the basis on which the internal market operates as between those named members. I presume that it does not, therefore, apply outside the two or more members mutually recognising the outstanding arrangements. I note that the Minister nods. I am glad that I have it right.

Mrs. Chalker

Subject to some clarification.

Mr. Spearing

This will be different for every area, of course. There cold be different arrangements for nuts and for bolts, and different arrangements for motor cars and farm tractors, because the regulation will operate in a multiple way. My mind begins to boggle even further at the complications that will arise.

I pass to the question of the operation of the qualified majority. Earlier we were talking about qualified majority as though it would cause some problems. I suggest that qualified majority in the nature of this internal market will cause some problems, but not perhaps in the way that Members expect. No one has so far mentioned the way in which the qualified majority will work.

In the Select Committee we got down to work on this, and discovered that in the Council there will be 76 votes. Of this, 54 constitute the qualified majority. Thus one needs 23 votes to stop something going through. As each of the big four have only 10 votes each, it means that if Britain and France together, or Britain and Germany together, or France and Germany together disagree with a proposal in this very important area, they can be outvoted by the rest. It means also that the big two need another country to join them. Therefore, it would be any of the big four, plus either Belgium or the Netherlands, who have five votes each, or Denmark or Ireland, who have three votes each, who could prevent an agreement. In Community support politics, the power usually lies with those who can prevent rather than obtain an agreement, and a small number can prevent an agreement from being reached. A qualified majority is much more difficult to obtain.

Mr. Marlow

In earlier debates attention was drawn to majority voting. Is the hon. Gentleman aware of the fact that if one adds together Belgium, Holland, Greece, Luxembourg, Denmark and Portugal, the population of those countries is less than the population of the United Kingdom or of the Federal Republic of Germany, yet those countries have 28 votes, whereas the United Kingdom and the Federal Republic of Germany have only 10 votes each? Is that acceptable when we are contemplating the introduction of large-scale majority voting?

Mr. Spearing

The hon. Gentleman has pointed to one of the difficulties. The consequences of these mathematics have not been examined. There has been a great deal of abstract politicising, but the practical matters to which he referred will be important.

I point out another practical matter — the Mediterranean countries. Their votes amount to 28. Therefore, for a blocking 23, not all of them need to participate. It is not just a question of blocking. It is a question of getting something through. To take again the big four, if Italy, France, Germany and the United Kingdom want to get something through, they cannot do it on their own. They need another 14 votes, in addition to their 40. A great deal of mathematical work will therefore have to be done inside the enlarged Council on this question. That does not mean that things will not move quickly, they may indeed move quickly, because there may be majorities for certain issues. During this important debate on the structure of the internal market it is important to put the votes on the record, because they will be significant.

Mr. Cash

Does the hon. Gentleman agree that there are circumstances in which the voting arrangements could be very much in our favour? We may benefit from the opportunities presented by the voting system. In order to ensure that we benefit from it, it is important to ensure that scrutiny is effective and that the necessary changes to the scrutiny arrangements to which my hon. Friend the Minister of State referred are effective in order to ensure that we have proper control over what goes on? Therefore, my hon. Friend is right to say that the terms of the understanding that was entered into between the Government of the day, the House and the British people is to some extent being renaged upon by these arrangements.

Mr. Spearing

I agree with the hon. Gentleman. The Scrutiny Committee published a second special report, to which reference has already been made. There is universal agreement that arrangements of that kind would be helpful to all. I do not want to go into that matter in too great detail, but it so happens that my next point is related to it. The House must be aware of the debate on the harmonisation of the internal market. There will be a great deal of lobbying, not least from commercial firms.

Mr. Leighton

It is said that one arrangement might help us and that another arrangement might not help us, but were we not told during the referendum campaign that we could not lose, that nothing could he done against our will and that we should have a veto?

Mr. Spearing

The referendum related to the Luxembourg veto, but here we are deliberately giving away a treaty veto, which in my view is even more important.

I was talking about the notice that we would get. I have been able to get a copy of regulation 11019/1985, published in Brussels on 3 December 1985. That is a report by the Presidency on the subject of the: Rolling Presidency Action Programme for the completion of the Internal Market. So it is very much on what we are discussing.

I was surprised to see this document, which reached me by regular channels although not those of the Scrutiny Committee. I was surprised to read its contents, which I shall describe to the House, because the document was not available through channels open to the Scrutiny Committee. It had not been published in Brussels and the Scrutiny Committee terms of reference refer only to documents published for submission to the Council.

Nevertheless, the document was available, although not the Scrutiny Committee and therefore not to the House. I draw the attention of the House to the list of harmonisation proposals in the appendix. There are many action programmes for this year, some of which have been published in a report. I have seen it in an answer to me today. There are about 100 of them.

The document deals in Annex II with items for discussion at the Ecofin Council. I draw to the attention of the House matters that are now under discussion at the Ecofin Council is relation to future harmonisation. First, there is a proposal: concerning the harmonisation of income taxation provisions with respect to freedom of movement for workers within the Community. I can only interpret that, Sir Paul, as a proposal that will harmonise income tax as a means of ensuring freedom of movement of workers.

Were the British people to be told—I hope that the Minister will deal with this in her reply — that discussions were going on in Brussels about the harmonisation of income tax throughout the Community, subject to majority voting, I think that they would be surprised. We would have been surprised in the House.

The document says: Excise duties: Proposal for a Council decision providing for a standstill ensuring no introduction of new excise duties which give rise to border formalities.

The Second Deputy Chairman

Order. I am sorry to interrupt the hon. Gentleman, but I am afraid that he is straying again into the realms of amendment No. 7, which will be the subject of our next debate.

Mr. Spearing

I shall have to accept your ruling, Sir Paul. I was quoting, if I can get clarification from you, from a document from the European Presidency entitled Rolling Presidency Action Programme for the completion of the internal Market. I can place the document on the Table if you so wish, Sir Paul.

I should have thought that, although there may be an overlap with our debates on amendment No. 7 because of the harmonisation of excise duties and other taxes on alcohol and so on, or indeed on income tax, those are part of the internal market as well as excise.

The Second Deputy Chairman

Order. I understand the hon. Gentleman's point. Of course the internal market is mentioned in articles 17 and 99 in relation to the harmonisation of taxes, or fiscal harmonisation, but it would make for a tidier debate if we were to deploy those arguments in the next debate.

Mr. Spearing

I assure you, Sir Paul, that I was not going to enlarge on these programmes individually, or indeed at all. I was merely reading out the list in the document. I hope that my final quotation in the series will not transgress the rules of the House.

The list continues in number seven: Proposal concerning the harmonisation of the structure of excises on mineral oils. I suppose that that does transgress the rules, so I shall leave the matter there.

All of these matters concern the internal market and show the extent and depth to which we are already involved in discussions. I ask the Minister why the Scrutiny Committee of the House has not had a sight of that document. The hon. Member for Stafford (Mr. Cash) has constantly and rightly emphasised that we must get early warning of legislative proposals. Here is an EEC document which we have not had in the House and, although it is contained in an answer to a question from me today, it is not available in the Vote Office.

10.45 pm

The hon. Lady and the Government have constantly said that they are justifying the approval of a reduction in the voting power of the Ministers to a majority on the ground that they wish to make progress in that area. Asked about that in the Select Committee, the hon. Lady resorted to the fundamental belief that any reduction to barriers to trade was a good thing in itself. I would remind the Committee that in command 4715 which was published in 1971 the then Government, talking about the calculation of the effects of these tariff changes on the balance of trade, said in paragraph 45 that they were: confident that this effect will 1pe positive and substantial, as it has been for the Community. We know, because the hon. Member for Southend, East (Mr. Taylor) mentioned it earlier, that in terms of balance of trade the effects are substantial to the extent of £10 billion a year on manufactured goods, according to the hon. Member for Southend, East, and at least £8.2 billion according to the Government's own official figures in Cmnd. 9781. Therefore the effects have been substantial but negative. I shall ask the Minister a direct question yet again. If the harmonisation so far has resulted in such a diminution of the advantages to Great Britain or the United Kingdom, how does she think that further slight reductions in the harriers to trade and increasing communality of the internal market will reverse those figures? Will they be slowed clown to a speed slower than they are growing already? It appears that the reason for going into the Common Market would be that there would be the reverse effect than that which has occurred. Therefore, when the hon. Lady says progress across the board, whatever it be, she must provide some justification other than that single word.

Mr. Bill Walker

Earlier this evening the right hon. Member for South Down (Mr. Powell) drew the Committee's attention to the imprecise nature of the articles we are debating tonight with regard to the internal market. He drew attention in a manner which provoked a reaction from my hon. Friend the Member for Harrow, East (Mr. Dykes), who suggested that the legislation that we deal with in the House of Commons — what he described as controversial legislation—was less productive and useful than the type of legislation we are discussing in these articles. I find that quite offensive, and I hope that he does not object to my saying so.

We spend many hours in Committee dealing with law. I refer particularly to Scots law, which deals with matters that affect the citizens and electorate in Scotland. Scots law, both civil and criminal, impinges on aspects that are affected by what we are discussing in these articles, and anyone who thinks that it does not has never been in business, otherwise he would realise how often it does.

Sir Russell Johnston

I dare say that that is what happened tonight with the Scottish Standing Committee on Legal Aid Bills. The Government chopped the Committee when they were just about defeated.

Mr. Walker

That is right.

The Second Deputy Chairman

Order. Will the hon. Member stick to the Bill and to the amendment?

Mr. Walker

That may have been a type of Exocet missile designed to hit me, because I should possibly have been present in the Committee. Knowing the arrange-ments of the House of Commons, as you do, Sir Paul, you will realise that I would not have been in the Chamber had it not been agreed by the Whip that I could be here. I have no knowledge of any events taking place in the Committee, and I shall not comment, other than to say that if I had been present in the Committee I probably would have made some contribution, as I am trying to do in this Chamber. [Interruption.] Is the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes)—

The Second Deputy Chairman

Order. I allowed the hon. Member to have a little say in response, but we must get back to the amendment. We are not considering a Bill which may be before another Committee.

Mr. Walker

I am sorry, Sir Paul. I did not hear what the hon. Member for Cumnock, Carrick and Coon Valley said, as he attempted to intervene from a sedentary position. I have no idea whether he was referring to the speech I am making on the articles or being his usual flippant and frivolous self and was referring to something quite different.

Mr. Foulkes

I was merely trying to help you, Sir Paul, by getting the hon. Member for Tayside, North—I can get his constituency right, even though he called me the Member for Coon Valley; he dare not visit my constituency again — back on the subject. There is a wealth of important matters regarding the internal market, such as life assurance and speed limits, with which the Minister could deal from her previous experience in running our transport service, if the hon. Member would just get on with it.

Mr. Walker

From that intervention, Sir Paul, you will realise that it is the last time I shall invite the hon. Gentleman's children to ride my children's ponies.

I do not think that the Government's motives in terms of the articles are suspect in any way. The Government say that the articles are necessary if the internal market is to function effectively. They will allow freer trade between the member states of the Community. If our experience showed that there was a need to introduce compulsory harmonisation, I should think that the Committee would be sympathetic. However, we have seen the barriers that exist against insurance finance and capital. Scotland has a great interest in those areas. More importantly, there are the barriers that have been put up against our major export product—whisky.

Our experience to date has shown that attempts to introduce harmonisation and to make the existing articles under the treaty of Rome work — I believe that the articles are adequate—have not worked.

My constituency is not simply affected by the barriers placed on the export of whisky. Under the existing articles it should be possible to stop the dumping—as my hon. Friend the Member for Southend, East (Mr. Taylor) said — of products from Europe, especially from eastern Europe. Holland exports raspberry pulp. However the raspberries are grown in eastern Europe. The Dutch export to other member states, and especially to the United Kingdom, more raspberries in the form of pulp than they grow. It should be possible to prevent this under the existing articles of the treaty of Rome. It is not helping the free market. Over the past five years, there has been a continuous battle to prevent this dumping.

My constituents and I ate concerned that more articles will be included in the treaty which are imprecise, as shown by the right hon. Member for South Down. This is not the type of legislation to which we are accustomed. The provisions have deliberately been left vague. Those who wish to cheat can use them to do so and those who wish to implement them will be uncertain about their powers. I hope that we shall carefully consider what is meant by qualified majority voting and the possible problems that will arise.

I look forward to the comments of my hon. Friend the Minister on my concerns. There is no doubt that all the aspects of concern which I have mentioned could and should have been dealt with under the existing articles of the treaty of Rome. Why do we need all these new articles which the amendments are designed to remove? Are we falling into the trap of having more legislation for legislation's sake?

The European court makes its judgments on political grounds, not the precise nature of the law, as we in Britain understand it. In view of that and "qualified majority" voting, are we not entering into a minefield where, instead of the internal market developing in the wa that the Government and most hon. Members would wish —towards a system of free trade—we have a bureaucracy which works its way through mountains of paper and produces little, and most certainly not free trade?

Mr. Deakins

We are debating the internal market. I have not yet heard a right hon. or hon. Member define precisely what that is. The listener outside or the person reading Hansard might get the impression that we enjoyed a certain state of affairs in relationships with the Community, which was not currently an internal market. But, hey presto, this legislation and the Single European Act come along and we are to be given a single internal market. That is far from the facts.

We do "enjoy" — if that is the right word — the benefits of an internal market within the Community. That is what all the propaganda in 1971–72 and 1975 from the CBI and other institutions on behalf of British industry was about. We were told, "We need to join Europe", in the first case, and "We need to stay in Europe," in the 1975 referendum campaign, to get the benefit of the vast home market of 220 million people. We are now being told that is not enough and that we must further develop the internal market. We are entitled to look at Britain's experience until now in the internal market before the Committee decides whether it is worth going on to complete the process. Part 3 of the 14th report in 1984–85 of the House of Lords Select Committee on the European Communities, House of Lords Paper 226, on "European Union" is entitled "The internal Market". One must be grateful to their Lordships for having defined the internal market so succinctly in a way that has not been done in this debate. Paragraph 28 states: Put simply, it should be as easy for a British company to find a market for its goods, services or capital, or for an individual to find work, in France, Denmark or Italy as it is for a Scottish company or individual to do so in England. That may inspire a few horse laughs from Scottish people who are unemployed and wish to travel south of the border. I regret to say that Dr. Johnson's famous remark about the most enjoyable sight for a Scotsman being the high road to England no longer applies in terms of employment. A Scottish person would have to come very far south to stand any chance of finding employment, and even then he might be unable to obtain adequate housing.

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Their Lordships continued: Of course, there will always be problems created by distance, regional preferences and language … But they should not be aggravated by man-made barriers, of which the most obvious are tariffs, quotas and immigration restrictions … The wider the home market in which European industry can develop, the better equipped will it be to cope effectively in the world market. This simple truth … is a fundamental reason why completion of the internal market must not he delayed. I would not take the entire Committee with me— not even Opposition Members—if I said that that is neither a simple nor a self-evident truth. Experience has belied that statement.

Paragraph 34 of the report states: The creation and maintenance of a genuinely free internal market for all forms of economic activity crossing the frontiers of sovereign states necessarily involves some incursion into the domain of national sovereignty. There we have the sovereignty issue once again.

The Government's attitude to the internal market is complacent, as is their attitude to the completion of the internal market as set out in the Single European Act, which will be put into British law by this Bill. They seem to be oblivious to, and certainly ignore, the industrial decline of Britain. Their views are a triumph of hope over the experience of the past 14 years.

The Government's attitude was summarised in a reply that I received on 20 May from the Under-Secretary of State for Trade and Industry. I asked him: What advantages will be available to United Kingdom industry when the European Economic Community market is completed"— that is the purpose of this part of the Bill— and to what extent does he envisage that United Kingdom industry may derive relatively greater benefits than industry in other EEC countries. That is the crux of the matter. It is not a question whether there will be more benefits generally, but whether we shall do relatively better than others. The Minister replied: Completion of a unified liberal"— I do not know where that term comes from, but it is in his answer—

Sir Russell Johnston

It is a good term.

Mr. Deakins

It has only a small "1". It states: Completion of a unified liberal internal market in the Community will benefit British industry through removal of barriers to trade with other member states and is one important condition for the creation of a European industrial capability which could compete effectively on world markets"— whatever that may mean. I have not come across that expression before, and it needs rather more precise definition than it has been given so far.

The answer continues: The precise balance of advantage may of course vary from sector to sector depending upon the United Kingdom's competitive position in each, but we"— the Government— believe that there should be clear net benefits for United Kingdom business as a whole."—[Official Report, 22 May 1986; Vol. 98, c. 162.] I hope that I have not robbed the Minister of something that she intended to say when she replied to the debate. That appears to be the Government's attitude.

When we discuss the internal market, the Government always say, "We are doing very well. Our export percentage is increasing and we hope, not necessarily to improve our manufacturing performance, although we hope that we can, to rely on the service sector as our salvation, because there are tremendous barriers to our services." One accepts that entirely. Therefore, the Government are pressing ahead quickly with the completion of the internal market, have been willing to make sacrifices of sovereignty, and to make concessions to Community institutions and the Community federalists because they believe that Britain will gain advantages from the completion of the internal market.

I hope to show that those advantages must rest entirely in the service sector. The hon. Member for Harrow, East (Mr. Dykes) speaks with some authority on matters to do with the service sector. I believe that he has connections in the City, and knows much about these issues. It would have been helpful to have the benefit of his advice as to how the service sector will take advantage of the internal market, once it is completed.

The Government are extremely complacent. What is the Common Market's attitude towards completion of the internal market? I shall refer to a Presidency report to the council, dated 9 December 1985. It is entitled, "Rolling Presidency Action Programme for the Completion of the Internal Market". In the first annex, the report says that a number of areas have been identified for adoption in the course of 1986. I shall not weary the Committee by going through all the areas. However, there are pages of them, ranging from the control of goods to the removal of physical harriers. For example, the report refers to the Duty-free admission of fuel contained in the fuel tanks of commercial motor vehicles". Other areas include veterinary and, I think, psycho-sanitary controls. However, I am not sure, as the text says, phytosantary controls. Paragraph 10 involves Production and trade in medicated feeding stuffs. There is nothing wrong with any of that. However, another section is rather ill-advisedly headlined, "Control of Individuals". Paragraph 29 refers to the sixth directive relative to exemptions in international travel: increased to 400 ecu. I think that that has something to do with duty-free allowances. However, I shall not weary the Committee with the rest of that passage.

There is then a section on the free movement of goods, with several directives or proposals in the pipeline. We then come to central proposals concerning the approximation of laws. I shall not go into that, because it will be raised during our next debate.

There is then a section on food law. I shall just quote paragraph 41: General directive on food additives (in part modification of existing directives)". That is to come up as well under the internal market. There is then a passage on pharmaceuticals and high technology medicines. In this instance, the opinion of the European Assembly is awaited on proposals in that sector.

I shall not weary the Committee by listing those things that will probably come about as a result of the Presidency's intention to complete the internal market. Indeed, on 1 July, we become president.

I come, instead, to the passage entitled, Free movement for Labour and the Professions.

Sir Russell Johnston

The hon. Gentleman cited food additives, but does he not agree that the introduction of harmonising regulations on food additives has been of great benefit to the people of this country?

Mr. Deakins

I do not for a moment deny the truth of that. But I do not wish to anticipate any remarks that I may make in a later debate on the clause concerning the environment. I shall then go into the issue in more detail, and will ask whether Community action is necessarily the proper way of going about genuine international cooperation. I shall not be tempted from my chosen path, however, even if it is for the benefit of the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston).

Under the heading of "The Free Movement of Labour in the Professions", which is part of the programme for completion of the internal market, there are proposals for a council directive on specific training in general medical practice. I am not sure about the implications of that. Perhaps the Minister will tell us whether that means Community directives about the content of medical education in Britain. There is also a proposal for a directive to faciliate freedom and to provide services in insurance other than life insurance. I am sure that that appeals to the Government, and one can only applaud it, provided that there are appropriate regulations.

Transport is also part of the internal market. I had not realised that before, but I am quoting from an official Community document, so it must be so. In paragraph 88, there is a reference to maritime transport. British merchant seamen and the British shipping industry face the chilling words: freedom to provide services in the sea transport sector. I speak as a complete lay person on this matter. If this is to mean greater competition in coastal shipping, that might or might not be of benefit to Britain. I am assuming that as the Government are in favour of the completion of the internal market, there will be a net benefit. I stress that it has to be a net benefit, because there is no point in gaining benefits across the Channel in the rest of the Community if we are to have more disadvantages on this side of the Channel.

There are then sections on taxation and tax harmonisation, all of which will be considered in the next debate. All this is in the Community rolling action programme, and that is what we shall be approving in principle. I am not saying that we shall be approving every item, because they will have to come before the Economic and Social Council, and there must be Commission proposals to the Council, to Finance, Transport and Environment Ministers and goodness knows what else. A programme of secondary legislation will be coming before the Committee chaired with such distinction by my hon. Friend the Member for Newham, South (Mr. Spearing). in the next few years, to complete the process of the internal market by 1992.

Mr. Spearing

Is it not clear that the Government's philosophy, as described by the Minister, is that they will agree to all this because they agree that integration of the internal market will be good for Britain in the round and so, although it is nasty medicine, it is better to be taken because the gain to Britain will be better in the end? Is that not what the Minister said, and does it not show that there will not be many noes from British Ministers to any of these proposals?

Mr. Deakins

We can look forward to the Minister's reply. I understand that the hon. Lady is—I hesitate to say "in difficulties", because she is a competent Minister —in a difficult position. She has to answer debates over the whole range of Government policy, and all Departments are involved in the provisions of the Single European Act. My heart goes out to her, and I am not trying to make her task any more difficult. I imagine that she will be advised during these debates by at least one official from the relevant Departments concerned, and that as we are on the internal market, one assumes that officials from the Department of Trade and Industry, and perhaps from the Treasury, are here.

I am not sure whether the Committee is aware of the fact that the Government may be having some second thoughts about the completion of the internal market. They are dedicated to the principles but are not so certain about the actual mechanisms. I have a quotation from that excellent publication Agence Europe of 20 January 1986, No. 4242 page 3, which refers to the Economy Finance Council agreement on the mandate of the group studying the suppression of fiscal boundaries and on the EEC position with regard to export credits. The second part is not relevant to this debate, but the first part, about fiscal boundaries, is. It refers to the "Economy and Finance Council", which I assume means the Economic and Finance Council, and says that it has quickly adopted the decisions which were on its agenda, namely: a mandate for the ad hoc group whose task it is to study the abolition of fiscal boundaries within the context of the creation of the unified economic area by 1992. I draw the attention of the Committee to the words used in this official resolution of the Economic and Finance Council, on which a British Minister must have been represented, in referring to the internal market as a "unified economic area". I hope that the Minister will be able to tell us whether there is a difference, and if so of what that difference consists. I suspect that this is again a problem of translation, but one would have thought that as our Government are so keen on the internal market, they would have made sure that the words "internal market", when translated into or out of the Community languages, meant the same thing."

I am a little puzzled by the use of the words "unified economic area". The report from Agence Europe contains the text of the decision: The Council, following on from its decision of principle taken on December 9 last to set up an ad hoc group, has entrusted this group, comprising chiefs of fiscal administration or other personnel representatives of the Finance Ministers, with the task of examining, on the basis of the third part of the 'White Paper' of the commission,"— that is, the White Paper on the completion of the internal market— what measures are necessary to ensure the establishment and the workings of the Internal Market before the end of the year 1992. It is understood that other measures, different from those proposed by the Commission, can be introduced into this study. 11.15 pm

This ad hoc group will not merely work within a remit given it by the Council, with parameters and limits on the subjects and measures it can discuss for completing the internal market; it will also be able to consider other measures and proposals no doubt from outside bodies or individuals which will then go into the melting pot and be put to Ministers in due course for consideration by the EEC Council and then by the House.

The adopted decision continues: The Group will report back regularly to the ECOFIN Council, by way of the Committee of Permanent Representatives, the first occasion being at its meeting on March 10 1986. There has already been at least one meeting of this ad hoc group and a report back to the ECOFIN Council. I wonder what happened at that Council meeting. On this occasion, according to Agence Europe, Several delegations have indicated in the minutes their concerns or their wishes concerning the work of this group. In particular, Denmark and France insist that the budgetary implications are duly examined. I confess that we have heard nothing from the Government about the budgetary implications of completing the internal market. By "budgetary", Denmark and France may have been referring to the EEC budget. However, they might have meant—I would like the Minister to clarify this point— there own national budgets. I can see that the Minister is shaking her head, so I assume that they were referring to the EEC budget. If they are referring to the EEC budget, the House and its Committees should consider the matter. If the completion of the internal market is to have budgetary implications over and above the other strains in the financing of the Common Market, then heaven help us. I wonder whether Her Majesty's Government are aware of the budgetary implications. Presumably they will be adverse rather than beneficial.

The report mentioned other delegations: Ireland and Greece request that the problems of the least well off be taken into consideration, in the perspective of the economic cohesion of the Community. I will not detain the Committee with that issue, because that matter will come up again in the debate on regional policy when we discuss structual funds. Although I have not pursued that line here, it is relevant to the internal market.

If we are to benefit from the internal market being completed by 1992, the sceptics —I am horrified by the thought of an internal market by 1992 — have every right to look back at the internal market that has existed since 1 January 1973 or after the transitional period January 1978, and consider that eight-year period or the 13-year period, and see how this country has benefited. I need hardly mention to the Committee that the impact of the internal market so far has been pretty disastrous for Britain. Other factors have been at work, but no one can deny that the internal market which was so much prized by the CBI, the Institute of Directors and almost all the economists with a few honourable exceptions in 1971–72, has not lived up to expectations.

We are therefore entitled to ask the Minister—if my facts are correct — why should we believe that our expectations of the completion of the internal market by 1992 will make any difference in the trend of the past eight to 10 years in our trading relationships with the Community?

Let me give the Committee a few examples. The EEC's share of our exports—I am sure that the Minister will be making this point—has increased from 33 per cent. in 1970 to 49 per cent. in 1985. We have done well on exports. It sounds impressive. But we should also bear in mind that one quarter of our exports in 1985 was occasioned by North sea oil. There was no North sea oil in the figure that I have quoted for 1970.

What really matters for the future of Britain is trade in manufactures. Here the increase in the share of exports from Britain to the EEC is some 32 to 42 per cent.— quite a creditable performance. No one is denying that our exporters have gone into the market with a fair amount of vigour.

But the other side of the coin is the increase in our imports from the EEC. They have gone up from 35 per cent. to 54 per cent. That is almost twice as large an increase. In other words, the net benefit has been to the other Community countries, not to the United Kingdom. We are now in the position that for every £100-worth of goods that we export to the EEC, we import £143-worth. We should look sceptically at the internal market.

Indeed, other EEC Governments, not merely our own, are putting a lot of emphasis on the internal market. They are also putting it on competition from outside the Community to explain the disappointed expectations of the consumers, taxpayers and people who live in the Common Market countries. They are now trying to divert attention from the failure of the Common Market to deliver the goods, metaphorically — indeed, literally in some cases—and jobs, by a propaganda war against the Japanese. But the EEC deficit with Japan is insignificant compared with the British deficit with the rest of the EEC. We have Ministers calling for tough measures against Japan, but we never hear Ministers talking about the need for any measures to deal with that, although I do understand that they would be illegal.

Let me give the Committee a few examples. It is right that the Committee should be aware, when considering whether to proceed by approving steps towards the completion of the internal market by 1992, what has happened during the incomplete internal market of the past eight to 12 years.

Let us consider the number of jobs lost in some of our major industries. In the cotton industry 155,000 people were employed in 1970. In December 1985 that was down to 39,000. Most of that time we have been in the Common Market and we have had the advantages of the larger home market and the incomplete internal market. The number of people employed in the wool trade is down from 136,000 in 1970 to 41,000 in December 1985. The hosiery industry—I am giving the largest examples—is down from 136,000 to 82,000—not quite such a big drop but still substantial in an industry which one would have expected would have done better in the Common Market than outside.

The carpet industry is down from 46,000 employees in 1970 to 16,000 in December 1985 and the man-made fibres industry is down from 55,000 employees in 1970 to 14,000 in December 1985. What hope is there that those figures will increase as a result of the completion of the internal market? Yet we have a Government who at least pay lip service to the need to increase employment in Britain and reduce unemployment.

I challenge the Minister to say in what way the completion of the internal market will reverse those figures of jobs lost since 1970, many of which have been lost since 1 January 1973.

I have no wish to bore the Committee, but let me give some facts which need to go on the record and which we need to take into account as a Committee when deciding whether to support the amendments. The iron and steel industry employed 448,000 people in 1970 and in December 1985 was down to 146,000 people. The coal industry employed 371,000 people in the earlier year and 197,000 people in 1985.

The motor vehicle industry was to have been the boom industry. I remember Lord Stokes and others telling us in those grand days that we had to go into the Common Market or the British motor industry would not survive. We are in the Common Market, and not so long ago the Government were considering, I think unwisely, but some people would disagree, selling off the British motor industry because it had got into such a disastrous state that it could no longer sustain itself. That is rather unfair to the remaining bit of the British motor industry, but, be that as it may, that industry wanted to go into the Common Market. When it was privately owned it spent lots of money in 1971–72 and in the referendum campaign of 1975 persuading the public that there would be a boom in the British motor industry and success for it in the Common Market, yet employment has dropped from 538,000 to 281,000 in 15 years. No doubt the figures for road and rail vehicles include buses and trucks, and employment there fell from 65,000 to 39,000.

I need hardly worry the Committee by talking about the shipbuilding industry, because it was the subject of recent debates. The fall in employment in that industry has been catastrophic, and even the figures that I have for December 1985 are woefully out of date. Mechanical engineering is the foundation of our technology and manufacturing, and employment in that industry has dropped from 1,074,000 in 1970 to 782,000 in December 1985. In chemicals we were supposed to be leading the charge into Europe with ICI and firms like that, but employment there is down from 373,000 to 246,000. Aerospace is another high-tech industry and not one of the smokestack industries, yet employment there is down from 234,000 to 153,000.

Mr. Marlow

The hon. Gentleman is going through a sort of catalogue of employment in the various industries. We are talking about the balance of trade, and not necessarily about the balance of employment. Throughout the European Community there have been improvements and increases in productivity. The Committee would be interested to hear from the hon. Gentleman what has happened to output in the industries that he has mentioned. There have been massive increases in productivity, particularly since 1979 when this Government came to power. It would be useful to have that information from the hon. Gentleman.

Mr. Deakins

I do not deny for one moment the force of the main point made by the hon. Member for Northampton, North (Mr. Marlow) that there have been increases in productivity, but there are two ways of ensuring increases in productivity, and the Government have taken the wrong course. If we continue towards an internal market in 1992, they will continue to take the wrong course—if we are unfortunate enough to have the present Government returned to power.

Productivity can be increased by reducing the work force and maintaining output, or it can be improved by maintaining the work force and increasing output. Surely the second is infinitely preferable to the first. This Government have been reducing the work force and not even maintaining the output. I shall come to that in a moment.

Mr. Bill Walker

I agree with the hon. Gentleman that one should maintain one's work force and increase output. The debate is about markets. It is customers that keep jobs in being and create jobs. The problem is that all the promises that were made about the opportunities that would be in the Common Market because of the massive increase in customers have not materialised. This debate is about why they have not materialised. That is why we should consider carefully what we are doing, to ensure that we do not make the situation even worse.

Mr. Deakins

I agree with the hon. Gentleman and later in my speech I shall come to his point about the deficiencies in British industry. At this stage I am anxious to ensure that the Committee has the facts upon which it can base a judgment whether the completion of the internal market by 1992 is a good thing for Britain and the British people.

We are here to legislate for our people and not for anyone else, and certainly not for the people in western Europe. They have their own Parliaments to look after their interests and it is not up to us to do that. We have to represent and look after the interests of the people who sent us here, regardless of their politics.

I shall now turn to the overall situation. In 1970 we had a small surplus on the trade balance in manufactures with the original six countries of the EEC. Our total deficit with the EEC is now running at an annual rate—I stress annual rate because we have figures only for the first three months of this year — of £12,000 million. This is a disaster story. The hon. Member for Southend, East (Mr. Taylor) said earlier that our trade with the rest of the world has been relatively better. In fact, it has done much better. In 1970 our trade balance in manufactures with the rest of the world outside the EEC was a plus of £1.7 billion, and currently, at an annual rate, using the first three months of the year and grossing them up, it is running at £3.7 billion. We have improved our industrial and trade performance with the rest of the world, but our performance with the Common Market has been a disaster.

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The internal market is entirely unbalanced. The balance of trade in specific industries is disastrous. The Government are fond of using something that is called the export-import ratio, and I can give the figures for some of our major industries. I shall deal first with the share of our imports that is held by the other Common Market countries. In plastics they have 78 per cent. of our market, and in other chemicals they have 67 per cent. In textiles they have 67 per cent.— so much for the multi-fibre arrangement and that being a protection for our textile industry. The job losses in our textile and clothing industries have come not as a result of Third world imports but as a consequence of imports from the rest of the Common Market. Conservative Members may say that that is a good thing—that is up to them—but I do not think that it is.

The Community share of our imports of iron and steel was 72 per cent. In paper it was 35 per cent. In metal manufactures, the most basic element in manufacturing industry, the share of the other members of the Community was 59 per cent. They have 43 per cent. of our imports in manufacturing materials. As for road vehicles, they have 79 per cent. of our market. They have 25 per cent. of other transport equipment. Office equipment is supposed to be one of the new areas of technology in which we are supposed to be buzzing ahead, but the rest of the Community has 43 per cent. of our market. As for simpler products, it has 71 per cent. of our furniture market, 68 per cent. of the footwear market and 43 per cent. of the clothing market. It has 54 per cent. of all manufactures. That is a pretty disastrous picture. I shall not weary the Committee by quoting the export-import ratios, but they show an equally bad picture. If anybody doubts that, I shall be happy to quote the figures.

Mr. Marlow

I am sure that the hon. Gentleman wants to look at the picture objectively. It has been said from the Government Front Bench—I think that it is the fact—that we have oil from the North sea, a commodity which we are exporting. That means that we are exporting fewer manufactures. The fact that we have oil in the North sea has an effect on our currency, which in a way makes us less competitive than we would otherwise be. Would the hon. Gentleman like to stitch these factors into his argument? If he does so, he might have a slightly different assessment of the situation.

Mr. Deakins

I am not sure when the hon. Gentleman is an economist, but I am not. I would hate to be drawn into something which, although relevant to the internal market, would take me beyond the brief that I have prepared for myself. I am not an expert and I am not at all certain what is the balance of advantage of the internal market so far in respect of North sea oil, for example. It would be possible to argue with the Government about their depletion policy.

The hon. Gentleman challenged me earlier to produce figures on output. He said that we are becoming more productive and that one would expect employment to fall, but I would not expect it to fall as disastrously as it has. I have some figures on output which I shall quote briefly. Steel is basic to manufacturing capacity. In 1979 we produced 28.3 million tonnes, and in 1985, 15.7 million tonnes. That was a fall of 45 per cent. Spain is now a member of the Community, but it was not in 1979, when it produced 7.4 million tonnes of steel. In 1985 it produced 14.9 million tonnes. In 1970 Italy was producing just over 17 million tonnes, and it is now producing 23 million tonnes. France, which was producing 23 million tonnes, has reduced its output to 18.8 million tonnes. The Belgian figure has fallen from 12.9 million tonnes to 10.7 million, and in West Germany production has gone down from 45 million tonnes to 40.3 million.

Those figures do not mean much without considering the percentages that they represent. Britain's steel production has fallen by 45 per cent. The next highest loss occurred in France, where production fell by 21 per cent. — bad perhaps, but by no means so disastrous as the fall in our rate of steel production. In Belgium it fell by 15 per cent., while in West Germany, our main industrial competitor in the world, steel production fell by only 10 per cent. Spain, while outside the Common Market, managed to increase its steel production by 92 per cent. and Italy, a member of the EEC, increased production in steel by 57 per cent.

How is it possible, if burdens are supposed to be shared by the members of the Community under Commission guidelines and injunctions, that that should have been the state of affairs? Let us not forget that under the European Steel and Coal Community, there is no veto; the Luxembourg compromise does not apply. There is majority voting. Because of the lack of a veto, we have not been able to protect our steel industry.

I confess that I do not have the answer to the obvious counter-question: why have other Community countries been better able to protect their steel industries? Ministers must answer that question if they wish to claim that regardless of what went before, we shall do better when the internal market is completed by 1992.

Motor car production is an interesting story. We recall what Lord Stokes said in 1970 and 1971. I do not believe in capital punishment, but he should have been taken out and shot at dawn. In view of the poor performance of British Leyland over the years, one can say, "Pour encourager les autres," as was said of Admiral Byng in the mid-18th century. A more disastrous entrepreneur it would be difficult to imagine— [Interruption.] I am thinking of ancient times. One might mention Sir Bernard Docker, who was largely responsible for the decline of the British motorcycle industry—from a world market share of 95 per cent. in 1946 to virtually nil within 20 years. They are the sort of people who will be leading us into what we are told will be a wonderful internal market that will completed by 1992.

To consider car production, we must take a different base year and compare 1972 with 1984, roughly equivalent to our time in the Common Market. In 1972, United Kingdom production totalled 1.9 million cars. It is now down to 900,000, a fall of over 50 per cent.

Mr. Marlow

If car production has increased in France, Germany and Italy and has reduced in the United Kingdom since we have been in the EEC, is it fair to blame the Common Market for that? Could it be that those other countries have produced better cars more efficiently and that they have not been bogged down by the sort of trade union legislation that was introduced by Labour Administrations here, with the appalling industrial relations that followed?

Mr. Deakins

I accept the hon. Gentleman's major thesis, which is that not all the disasters I have catalogued —and I have more of them to relate—have been entirely the fault of the Common Market. I am simply asking how, if that has been our performance so far in the internal market—incomplete though it is, and we have been in it for 13 years—the Minister can say confidently, as she no doubt will, that there will be a beneficial impact on all the factors involved as a result of the internal market being completed. It cannot be logical for the Minister to argue from that standpoint. She will have to address the arguments from a totally different premise.

To take up the hon. Gentleman's point, he is wrong, according to the figures that I have, on car production. Spanish car production has increased in the 12 years from 1972 to 1984 by 92 per cent. German car production is up marginally 8 per cent., but ours is down over 50 per cent. Belgian car production has fallen by a mere 5 per cent. and French by 9 per cent.; and the poor old Italians have gone from 1.7 million to 1.4 million, a fall of about 17 per cent., which is not very satisfactory. None of these is remotely comparable with the fall in British car production. There must be special factors at work in the British economy that should make the Committee sceptical about the chances of our being able to take advantage for the benefit of the people we represent in the completion of the internal market by 1992.

Those are all the figures that I wish to give the Committee on manufacturing output and jobs. Even on our trade with the other countries of the EEC, we have done extremely badly compared with other countries in the Community. I could quote various answers—I will not weary the Committee with them — to show how bad relatively our trade performance in manufactured goods has been compared with our competitors in the Common Market.

Ministers have been cunning in the last few years when challenged on our poor trade performance as against that of the rest of the Common Market and said that our exports have gone up and, moreover, the total share of our trade with other Community countries has gone up substantially, as though in itself that was a good thing. The civil servants who provide Ministers with that sort of brief deserve a kick in the bottom, if not worse, because that is an entirely irrational argument. There are no premises for it, and it does not lead to any conclusion—certainly not to the conclusions that Ministers seek to draw.

It does not matter with which part of the world our trade is conducted. What matters is the total amount of our trade and the net balance of our trade. If we did all our trade with the United States of America and none with the rest of the world, that would be an unbalanced picture —and, indeed, it is very unlikely—but, provided we had a good trade balance, the country would be in a good trading position. The more trade that we do with the European Community, the worse our trading becomes, from which I draw the conclusion that the Government are marching in entirely the wrong direction. Our trade balance with the Community is going downhill steadily. Regardless of what the Government do—and regardless of what even a Labour Government are likely to be able to do under Common Market rules and regulations, because we will not necessarily reverse that decline—our trade balance will get worse. Eventually we will end up by doing 80 or 90 per cent. of our total trade with the rest of the Community in this vast internal market, yet we will be having trade deficits of £20 billion or £30 billion a year. How can that be a good thing—to do more and more trading in a vast internal market, yet do worse at it?

It is how one conducts trade, not with whom one trades, that matters and, above all, the overall trade performance, not the areas of the world with which one trades.

Mr. Teddy Taylor

I wonder whether the hon. Gentleman is being too optimistic about our trade with the Common Market. Has he seen the recent figures which indicate that our share of the market of the original six manufacturing countries is now 7 per cent., and it was 6.1 per cent. before we joined the Common Market? Does he accept that the substantial increase in our trade with the EEC is simply because the Common Market now is twice the size that it was when we started?

Mr. Deakins

I think that the hon. Gentleman's logic is irrefutable. It is not for me to provide the answer. That ought to come from the Government, and that is what we are considering.

The counter-argument — I still await any evidence, and I have been giving counter-evidence to persuade the Committee to vote for these amendments or, indeed, for one of them—must come from the Government and be based on different premises and figures to show that we have done well and can do better. I should like to know what they are. I read Hansard every weekend, and the figures are not in there. To prove, as I have done, that we have done disastrously badly and then to be told, "Forget all that; we will do marvellously well in future", as the Minister's reply that I read out earlier showed, is whistling in the dark. It is not merely over-optimistic; it is absolutely foolish to adopt that attitude.

One of the features of the internal market is free capital movement, upon which my party holds certain views. Britain's investment performance in the Common Market has not been at all good. There has been a much greater outflow of funds from Britain to the rest of the Community than there has been from the rest of the Community to Britain. I do not know whether that reflects upon the economy or the Government. When there was a Labour Government, it would have been possible to say that the capitalists in the rest of the Common Market did not like investing in a so-called socialist Britain—which it was not—or in a so called socialist Government, or Labour Government. One would have expected that trend to have been reversed after seven years of a Conservative Government, but that is far from the case.

11.45 pm

The figures are absolutely devastating. The total inward investment, excluding oil, from the rest of the EEC was £80.7 million in the three years 1970, 1971 and 1972. In the years since 1973, when we joined the Community, total inward investment, excluding oil, from the rest of the Community was £800 million. But what about the figures of outward investment? Compared with the £80 million of inward investment, there was an outflow, before we entered the EEC, of £371 million. That represents investment by the British people in the EEC. Over the 12 years since we joined the EEC that figure has grown larger and larger. In fact, £2.5 billion have been invested in the rest of the Community. The balance of investments has therefore grown worse since we entered the Common Market.

I ask the Minister of State to tell the House how that trend will be reversed. Is there to be even more liberalisation of capital movement? Other factors will be at work that will make it more difficult for any Government of this country to move investment in the direction that they wish.

Since May 1979, our unemployment rate has tripled. Only one other country in the Common Market has suffered such a serious rate of decline. That is Greece, which was not in the Common Market in 1973. Unemployment in the other EEC countries has certainly increased, but by nowhere near so fast a rate. Within the Community, Britain is a special case, yet by promoting the concept of a free internal market, free from all barriers and a free, unified economic area by 1992, the Minister is ignoring completely Britain's experience and the attitude of British industry. She is being over-optimistic.

I shall not weary the Committee by referring to the disaster of our membership on jobs, output, trade and investment. When we try to justify the Bill and the completion of the internal market we shall have to tell the British people something different from what they were told in the 1975 referendum campaign. What were they told by the "Britain in Europe, Yes" campaign? The House will recall that there were three factions: yes, no and, in the middle, the Labour Government who said, "On the whole, yes." The referendum voted in favour of entry by a majority of two to one.

What did the "Britain in Europe, Yes" campaign say? It said, under a bold headline: Staying in protects our jobs. I saw posters all over the country during the campaign that showed a group of ardent, young apprentices, and the caption on the posters was "Jobs for the boys."

We know some of the boys who got jobs as a result of our entry into the Common Market. There were not many of them. One or two of them are still Members of the House. The jobs that were referred to then were not those jobs.

The British people were told in 1975 that staying in would protect their jobs. What else were they told? They were told that we could get advantages from the Community market and the immediate effect on trade, industrial production, investment prospects and hence on jobs if we went out of the market would be disastrous.

The effect of staying in has been disastrous. I am not attributing all our ills to membership of the EEC, but a great proportion of them. That was what people were told about the EEC by its ardent advocates.

What were people told by the British Labour Government in 1975? Well, there is "The New Deal". There was, said the Government of the time to the British people: a threat to employment in Britain from the movement in the Common Market towards an Economic and Monetary Union. We shall be debating that subject some time later in our proceedings. The "New Deal" said: This could have forced us to accept fixed exchange rates for the pound, restricting industrial growth and so putting jobs at risk. This threat has been removed. The Labour Government did not tell people that there were other, more real threats from remaining in the Common Market at that time; those threats have been borne out by the evidence that I have supplied to the Committee.

I turn now to the deficiencies of British industry. I am not just lambasting British industry here, because industries in other countries can also be inefficient. The trouble is that our industry happens to be much more inefficient than most of the others. I start by talking about management attitudes. These have been criticised even by the right hon. Member for Old Bexley and Sidcup (Mr. Heath). He talked about the need to change management attitudes. The right hon. Member for Old Bexley and Sidcup said, towards the end of his term of office as Prime Minister of this great country, that we have done everything that British industry has asked us to do, everything, yet we do not get the performance that we are entitled to expect. That was said soon after we had joined the Common Market.

I could regale the Committee for hours, although I promise not to do so, Sir Paull, with my experiences as a junior Minister for five years in a Labour Government and horror stories of British industry from around the world. If I was challenged to do so, I would be very happy to oblige. Some of the stories are very amusing, but I do not wish to detain the Committee with relatively minor matters that are incidental to my main theme.

There are many stories and I shall give one example although this is not just to show that one swallow is the harbinger of summer. The story shows a typical management attitude. A British firm received an inquiry from a buyer in Yugoslavia for a certain product. The management eventually two weeks later wrote back to the potential buyer in Yugoslavia saying that they made the thing he was after —it does not really matter what it was — but that in order to obtain it they would have to contact their agent in Brussels who had the mandate or licence to market the goods in western and central Europe.

Needless to say, the Yugoslavian buyer did not contact the agent in Brussels, because the day after he had sent his inquiry to firms in France and Germany they had sent sales representatives to his home town and factory in Yugoslavia, while the British were still sending letters and considering their attitude.

There is a horror story of Brutish business firms even in the 1970s answering trade inquiries from Latin America and sending the letters, would you believe it, by seamail not airmail. I could go on but I will not. There are plenty of similar stories.

The attitude of British management, which I blame not exclusively but largely for all this, was summarised by no friend of mine but a friend, I would think, of Tory Members. In the mid-1970s a bunch of capitalists, the German chamber of commerce in Britain, published a report. It was a nine-hour wonder, because it was so embarrassing that it was dropped by the press and the Government like a hot brick. The report said, in effect —do not forget that the German chamber of commerce is no friend of the Labour party or of British trade unions or necessarily Britain — that the basic trouble with British industry is that British management treats its workers like dirt. Those were the precise words. There was a feeble comment from the Confederation of British Industry and then the whole thing was dropped. One would not have been able to read any reference to it in the popular press and only on inside pages of the so-called serious newspapers.

There are many deficiencies in British industry, which I will not go into, connected with the class and education system in this country. Even if we complete this internal market, our trade and manufacturing performance will continue to deteriorate until we have swept aside the bulk of management in British industry at every level. It is either incompetent, or unable to take advantage of opportunities when they arise. I exempt from that management in our major multinational companies and in a few key industries.

Mr. Marlow

I wonder whether the hon. Gentleman thinks that it would help to improve the attitudes, activities, ambitions and effectiveness of that management if a Labour Government, of which he would like to become a member, were to impose upon it swingeing levels of penal private taxation.

Mr. Deakins

I fear that if I followed the hon. Gentleman in that remark, although I am happy to take issue with him, I would be straying outside the rules of order. I am sticking completely to the internal market.

Just in case right hon. and hon. Members think that I have it in for British industry, I have to say that industries in other countries are also inefficient. The trouble is that the are less inefficient than we are. I shall tell the Committee four horror stories about United States industry just to show that it is not only our own industry that suffers. I shall quote from a recent publication of the Hunger project: Some American firms that have ventured abroad have made costly blunders out of ignorance. 'The Chevrolet Nova— a motor car— did not sell in Latin America. When spoken 'No va' means 'it doesn't go' in Spanish. The Second Deputy Chairman: Order. I am finding it difficult to relate this to the subject of the amendments, which is the internal market.

Mr. Deakins

I shall certainly stop there. I was seeking to show that I was not being unfair in criticising just British industry for its performance and potential performance in the Common Market because some of the strictures I have made could equally apply to industries in other countries.

I turn to the impact of the internal market on this country as a whole not merely on our trade, investment or employment and so on. What will be the impact on our regional policy? That is a matter which concerns many people, not just Opposition Members but Tory Members. What will the completion of the internal market —freedom of capital movement—do to investment? Many of us live in the prosperous south-east, although parts of inner London are rather like an outpost of the north stuck down in the middle of the prosperous south. The north-south dividing line is the Bristol-Wash line which is becoming more and more like the Himalayan mountains. What will the completion of the internal market do to the north-side divide? Contact with industrialists has already convinced me— I did not need much convincing—that the combined effects of the development of a third London airport at Stansted, the completion of the M25 ring road and the prospect of the Channel tunnel will make the south-east of England even more of a magnet for British industry. The north-south divide will get worse, and our industrial decline will accelerate.

12 midnight

I turn, finally, to the impact—[HON MEMBERS: "Oh".] I am trying to truncate my remarks. If the Committee feels that I am being unfair, I shall quote from the report by the Select Committee of the House of Lords on Overseas Trade. The report, in its conclusions, analyses the reason why our manufacturing trade has been so bad, and why our industrial performance has been so poor. That is directly relevant to the issue of whether we should vote for a Bill which will speed up the creation of the complete internal market. House of Lords report No. 238, 1984–85 Session — it attracted some notoriety at the time —commented on the deficit and the balance of trade in manufactures. The report concluded that that was brought about by poor export performance"— that is not surprising— and high import penetration".— I should have thought that those were blinding statements of the obvious; however, it is nice to have it in writing— across a wide spectrum of manufacturing industry". Paragraph .3, chapter 7, states: In the long term the Committee single out poor investment, poor cost competitiveness and 'cultural' factors as the principal determinants". The Committee then considered remedies. I wonder whether the Government accept those remedies. I have not seen a reply by the Government in the House of Lords. Perhaps they have not bothered to reply. I do not know how they treat reports by Select Committees in the other place. They are pretty cavalier in their attitude towards reports by House of Commons Committees. When the Government reply, they tend to dismiss most of the recommendations. [Interruption.] I have been a member of Select Committees every year that I have been a Back Bencher. I have been on Select Committees for 11 years. With the exception of the Committee on which I currently serve, the Select Committee on Public Accounts, the performance of Governments—it may apply to Labour Governments; I do not make any party political point—in replying to Select Committee reports has been deplorable. A lot of hard work goes into their recommendations.

Mr. Leighton

I am certain that the Minister is immaculate in that respect, but perhaps her reputation is besmirched by some of her colleagues. Is my hon. Friend aware that, in respect of a Select Committee with which I am connected, a press conference was held to issue a report, and reporters went along to the conference with a press release in their pockets rubbishing the report? That happened before the report was even published.

Mr. Deakins

My hon. Friend has made his point. Had he sought to catch your eye, Sir Paul, he may have made the point in a slightly different way and brought it within the rules of order.

I should like to know from the Minister what the Government think about the recommendations of the House of Lords Select Committee. Paragraph .5 of that important report states: The Committee believe that urgent action is required now to revive manufacturing and stimulate trade in manufactured goods because"— we come to the crux of the Government's arguments for completion of the internal market— service industry cannot substitute for manufacturing because many services are dependent on manufacturing and only 20 per cent. of services are tradeable overseas". How does the Minister like that? The report continues: there is no reason to expect any automatic resurgence of manufacturing and trade when the North Sea oil surplus declines because the decline in manufacturing and in the trade balance in manufactures was not the inevitable consequence of the advent of North Sea oil and because the effect of North Sea oil on the exchange rate movements is uncertain … new industries and new products usually grow out of long established activities and require a long time scale for development". The target of 1992 should be a long enough time scale for anyone contemplating entering the vast new market which is dangled before us. The report continues: lost markets will be difficult to regain … lost manufacturing capacity will take a long time to restore". What does the Minister have to say about those criticisms? The summary states: Unless the climate is changed"— in the United Kingdom— so that steps can he taken to enlarge the manufacturing base, combat import penetration and stimulate the export of manufactured goods, as oil revenues diminish the country will experience adverse effects That is nothing to do with completion of the internal market. The Select Committee was not contemplating that prospect. The Minister will, of course, tell hon. Members that completion of the internal market will enable us to overcome all the deficiencies mentioned in the report. the Committee referred to a contraction of manufacturing to the point where the successful continuation of much of manufacturing activity is put at risk … an irreplaceable loss of GDP … an adverse balance of payments of such proportions that severely deflationary measures will be needed … lower tax revenue for public spending that is not directly relevant to this subject․ higher unemployment, with little prospect of reducing it". Is the Minister going to tell us that there is a big prospect of reducing unemployment if she is allowed to have her way and the internal market is allowed to be completed? Those are the criticisms of the House of Lords Select Committee in a widely trumpeted report.

I should like now to address my remarks through the Committee to the party which I have the honour to represent. If the Bill is passed and the internal market completed, it will be difficult, if not impossible, to achieve a number of the remedies which the Labour party has for the deficiencies in British manufacturing, trade and investment. Recently, my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) said that the internal market depends on the complete liberalisation of capital movements. He said that we wish to ensure that capital is brought back into Britain from the rest of the Community and from the outside world. To be directly relevant, I shall concentrate on capital from the rest of the Community. How will it be possible to bring back capital from the rest of the Community when, under new article 70(I), capital is being completely liberalised? In the report last year by the Presidency of the Commission to the European Assembly, the President said: The following fields and measures were considered to be of high priority". One measure was liberalisation of capital movements. What does the Common Market have in store for us? On 23 May 1986, an article in the Financial Times referred to the President of the Commission unveiling a scheme to lift all EEC capital movement controls". How will my party react to that? Once we are in the complete internal market, how will we cope with our plans for capital movements? There are Commission communications to the Council about liberalisation not merely of taxation but of capital movements. We were told that the process would be speeded up. I shall not weary the Committee by reading out the Agence Europe report. Had I time, I should have done so for the Committee's benefit, so that hon. Members could hear from the horse's mouth what is in prospect for this country.

I shall address my points to the Committee, but they are specifically directed at my right hon. Friends on the Labour Front Bench, who are in charge of these matters, rather than those of my colleagues who are sitting in the Chamber. The Labour party says, and will be saying to the British people, at the next election the following things. It says that it will curb imports, but curbing imports from the rest of the EEC is impossible by virtue of articles 12, 30, 101 and 102 of the treaty of Rome. It says that it will encourage British industry through the selective use of public purchasing. Selective use of public purchasing is not merely forbidden by a number of articles in the present treaty of Rome but will be made impossible by the completion of the internal market. That must give the Government some cause for concern. I am not sure what their view is. All public purchasing will have to be put out to competitive tender among all the firms in the EEC. There cannot be any behind-the-stage deals, tenders just to one's friends or contracts For British firms. It must all come out in the open. That is the type of competition which some right hon. and hon. Members may welcome. Good luck to them; that is their philosophy. I shall not argue the point with them now. I am merely pointing out the policies of the next Labour Government. We shall certainly have such a Government after the next general election—[HON. MEMBERS: Rubbish."] I hope that we shall. I do not want to provoke hon. Members. That Government will not be able to do some of the things that we want to do. The selective use of public purchasing is outlawed by several articles of the treaty of Rome and would be made impossible by the completion of the internal market by 1992.

The Labour party will insist that multinational companies source more of their United Kingdom markets from British production. Even the Government have tried to do that in talks with Vauxhall, General Motors and other multinationals in the motor car industry. But that is illegal under articles 7, 30, 92, 101 and 102 of the treaty of Rome, as well as being completely incompatible with the concept of a free internal market by 1992, which the Minister will be recommending to the Committee—I do not know on what grounds— when she replies to the debate.

The Labour party says that it will promote innovation through a flexible package of loans and equity assistance, but that is not permitted by several articles of the treaty of Rome and would not be permitted by the completion of the internal market in 1992. What will we do then? The Labour party says that it will provide sustained financial support to industry through a national investment bank. That is a good idea, but it will be impossible under similar articles of the treaty of Rome and once the internal market is completed by 1992.

The Labour party will extend public enterprise through agreements with key firms. All these are good ideas and I support them wholeheartedly. Indeed, during the next general election, I shall be putting them to the British people on the doorsteps of my constituency and elsewhere. But although we tell the British people that we wish to do those things, we shall be prevented from doing them by the rules and regulations of the Common Market and by the completion of the internal market by 1992. The making of agreements with key firms is already illegal under some articles of the treaty of Rome.

The Labour party says that it will negotiate on investment with firms in key sectors, but that is illegal under articles of the treaty of Rome and will be impossible when the internal market is completed. The party says that it will ask institutions to invest more of their funds in Britain, but, as I said earlier in relation to capital movements, that will be impossible. We shall be saying all those things to the British people between now and the next general election.

The Labour party will have a tough policy on takeovers and mergers. I wholeheartedly support that, but how does it square with article 85 of the treaty of Rome and what is in store for us after the completion of the internal market by 1992? Unless we change our relationship with the Common Market and unless we defeat this attempt to complete the internal market by 1992, it will be extremely difficult — I put it no higher than that — for a Labour Government to carry out the guts of their economic, industrial and financial policies.

Mr. Marlow

The hon. Gentleman could go a little further. He has set out what the industrial policies of the Labour party will be. Could he say what the policies of the Labour party will be towards the Common Market?

Mr. Deakins

That would take me outside the scope of the debate, so I shall not be tempted. I have put before the Committee matters which are on the public record. They are part of the Labour party's jobs and industry campaign on television and in leaflets, so I am not giving away any secrets. I would not do that to the party. We are publicising all those matters.

My question to the Labour party is, will we be able to do those excellent things if Britain is still in the Common Market by the time we get a Labour Government and if the internal market is on the way to being completed? That is my major reason for opposing the completion of the internal market. Nothing in our trade, industrial or manufacturing performance will alter during the next seven or eight years. Some Conservative Members agree with much of what I have said about the performance of British manufacturing industry. I wonder where the Minister will find hope and on what premise she will base her argument in reply to the debate, which will be that the completion of the internal market will be good for British industry, manufacturing, services, trade and the British people. The evidence that I have put before the Committee shows that it will not be. However, I am prepared to be shot down by statistics from the Minister. I look forward with great interest to her reply.

Mr. Tim Sainsbury (Lords Commissioner to the Treasury)

I beg to move, That the Chairman do report Progress and ask leave to sit again.

Mr. Marlow

Can the motion be debated?

Question put and agreed to.

Committee report Progress; to sit again this day.

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