Internal Market (Hansard, 11 May 1988)

§ 12. Mr. Wallace
To ask the Chancellor of the Duchy of Lancaster what further plans his Department has to publicise the implications of the internal market to industry.

§ Mr. Kenneth Clarke
The Government are already taking a number of measures to alert business to the single European market and the vital importance of preparing 312 for it now. These include regional conferences, detailed literature, national advertising and a telephone hotline. The single market campaign will run until 1992, but we shall continually assess its exact form in the light of current needs.

§ Mr. Wallace
Is the Chancellor aware of the recent CBI survey in Scotland, which showed that 34 per cent. of companies did not even know about the introduction of the single market in 1992? What further steps does he propose to take in Scotland, bearing in mind the difficulties that the peripheral areas face in trading because of transport costs? Will he ensure that his Department puts a forceful case to the European Commission for continuing to make available European regional development fund moneys for the Highlands and Islands?

§ Mr. Clarke
The hon. Gentleman's first point helps make the case for this campaign. When we started in England we found a low level of awareness and understanding among British industry. Already, after the first few weeks of the campaign, there has been a substantial increase in awareness, with more businesses preparing themselves for what they have to do for the changes of 1992. I am sure that my right hon. and learned Friend the Secretary of State for Scotland will mount a similar campaign there.
As for the hon. Gentleman's last point, I assure him that we shall be pressing that case on the European Commission and in our discussions in the Council of Ministers with other member countries.

§ Mr. Cyril D. Townsend
Does my right hon. and learned Friend agree that for Britain to get the maximum benefit from the internal market we need dynamic British companies? Will he ensure that countries that prevent British companies from making takeover bids are not allowed to launch predatory attacks from a safe base? We have accepted the principle of reciprocity in financial services. Should we not do the same for manufacturing industry? Would it not be a good start to refer the Rowntree bid?

§ Mr. Clarke
The single market will be of considerable benefit to all the economies of the EC. We are creating a large market of 320 million people, which will attract a lot of inward investment. One of Britain's main aims must be to attract a disproportionate share of that inward investment compared with other countries. That still leaves us looking at individual bids, as I said yesterday on the case raised by my hon. Friend the Member for York (Mr. Gregory). Whether a similar bid could be made in the country from which the investment comes is a relevant factor, but it is only one of the factors that have to be considered once we have the director general's advice.

§ Mr. Macdonald
Will the Chancellor confirm that the reported growth in manufacturing exports to Europe in the last quarter of last year was based upon statistical distortions and that manufacturing exports over the past two quarters have been stagnant, if not, indeed, in decline, confirming that the Government's policies have done nothing to prepare British industry for the single market?

§ Mr. Clarke
I always treat trade figures with caution, not least because my hon. Friend the Minister for Trade is considerably more expert on them than I am. Certainly recent trade figures should be treated with caution, 313 because the way in which they are compiled has been changed since the beginning of this year. As the hon. Gentleman knows, the proportion of British trade going into the EC has gone up from about 34 per cent. when we joined the Community to about 50 per cent. now. It is a most important market. It is a fast-growing market and British industry is now extremely competitive and well placed to take advantage of it.

§ Mr. Page
Will not our future success within the internal market in the EC depend on the establishment of standards? What steps is my right hon. and learned Friend taking to ensure that British standards are accepted and adopted within the EEC?

§ Mr. Clarke
My hon. Friend is right to say that the question of common standards is a matter of the highest priority. As we move towards the completion of the single market we are making a strong input to ensure that British standards are properly acknowledged and are not simply replaced by those of our competitors. We are also seeking the support of British industry in all the detailed work that is required to ensure that acceptable standards are in place so that we can have a genuinely free market by 1992.

§ Mr. Gould
Is the Chancellor satisfied that high-volume babble from advertising men is enough to match the much more careful analysis being made by other Governments in conjunction with industry of where their strengths and weaknesses truly lie, and of what advantages and disadvantages they can expect from the internal market? Is there not a worrying sense of dé jà vu about all this? Did we not hear the same hype and complacency in the 1970s and was that not followed by a massive loss of market share to European rivals? Is not the only real difference that on that occasion Lord Stokes at least had enough confidence in his own commercial judgment, even though he turned out to be wrong, to pay for his own full-page advertisements?

§ Mr. Clarke
I recommend that the hon. Gentleman gets hold of the substantial amount of literature that accompanies our presentation so that he can inform himself better of what the Government are advising British industry on when it comes to the single market. I well remember the hon. Gentleman, when he represented a different constituency, being one of the foremost opponents of our ever entering the EC. I suspect that inwardly he has not changed his opinion since that time. I am surprised that the late Lord Stokes' judgment is called in aid of any of these industrial matters. I have been studying some of the Labour party's advertising campaigns of the 1970s—television campaigns and whole-page advertisements, with leading industrialists and trade unionists urging the country to support the Government in backing price freezes and wage restraints. The difference was that that Government were dreary, second-rate and boring, like their advertisements—

§ Mr. Haynes
On a point of order, Mr. Speaker. The Chancellor is making a speech.

§ Mr. Speaker
I rather agree. It does not appear to have much to do with the implications of the internal market.

§ Mr. Patrick Thompson
When my right hon. and learned Friend publicises the implications of the internal market for British industry, I hope that he will make clear the important need to be even more competitive, 314 particularly in manufacturing industry. Is not one way of doing that, both before and after 1992, to ensure a better supply of professional engineers and engineering skills? That is the way forward, so that British firms can compete more effectively with industry overseas. After all, we are producing fewer professional engineers than the Japanese. What are we going to do about that?

§ Mr. Clarke
I can be brief on this occasion because I strongly agree with my hon. Friend both that we need to be competitive and that we shall find it difficult to remain competitive if we do not encourage the training of sufficient people in engineering skills of the right quality. We shall continue to give that matter close attention.