HC Deb 10 December 1992 vol 215 cc984-5
5. Mr. Cann

To ask the Chancellor of the Exchequer what new projects he is advocating to stimulate co-ordinated European economic growth.

Mr. Lamont

Ministers at the last Economic and Finance Council agreed that there should be a full discussion of the Community's economy at the Edinburgh Council and that member states should consider what action can be taken, both individually and collectively, to hasten recovery.

Mr. Cann

Does the Chancellor accept that the half-yearly report of the Organisation for Economic Co-operation and Development forecasts that 34 million people in the western countries and Japan will become unemployed and that unemployment in the United Kingdom will reach 3 million shortly after Christmas, even by the Government's method of accounting, and 4 million by the method of accounting that applied in 1979? Does the Chancellor agree that it would be totally wrong to go to the meeting of Finance Ministers tomorrow and say, "Look what we have done in the autumn statement. Why don't you do that?"? We need a proper, well-funded European-wide growth strategy.

Mr. Lamont

I do not agree with the hon. Gentleman. I believe that the measures that I announced in my autumn statement have been widely welcomed by industry and all the representative organisations of industry. They accorded very well with the proposals that they were asking for and thought were appropriate from the Government.

Although unemployment in the United Kingdom has risen, it has risen, as the hon. Gentleman well knows, in many other European countries as well. Other European countries have higher levels of unemployment than we do. But we now have the lowest interest rates in Europe, which will be of enormous benefit to this country. Not only the consequences of the lower interest rates, but the actions in my autumn statement, put the United Kingdom in a strong position. At Edinburgh we will urge other countries to follow where we have led. We will persuade the Community to take measures that protect jobs, promote investment and lead the way to recovery.

Mr. Oppenheim

Is not one thing certain—that the surest way to prevent growth in Europe would be for the European Commission to increase burdens on the European economy by massively increasing its spending, as it proposes? That burden would come on top of the onerous load of regulations and the hefty burden of the social chapter, which the Opposition are always so keen to support.

Mr. Lamont

My hon. Friend is absolutely right. Opposition Members and the shadow Chancellor seem to think that the only place where jobs come from is Government spending. The shadow Chancellor's only answer to the unemployment problem is more spending. As my hon. Friend says, more spending can destroy jobs rather than create them. It is essential, when not only Britain but every country in Europe is seeking to control spending, that spending should be controlled at European Community level just as much as at national Government level. The important point that will come up at Edinburgh is our rebate from the European Community. We in Britain are determined to stand firm on that. I notice that the shadow Chancellor has said that there should be a negotiation about that.

Mr. Darling

Is not the truth of the matter that the British Government reluctantly agreed to discuss unemployment over a lunchtime chat—as opposed to making it the main priority at Edinburgh—as a result of pressure from other European states? Will the Chancellor accept that there will be no investment, and no recovery unless confidence improves, and that confidence will not improve unless unemployment comes down? What specific new projects does he intend to propose at the European summit in the next few days? How many jobs will be created in Britain and Europe, without which there will be no return to the confidence that we so desperately need?

Mr. Lamont

The truth is very different from what the hon. Gentleman says. As I have already said, Britain has taken the lead in putting the economic issues on the agenda at Edinburgh. Labour Members ought to tell us why they make it appear to all those who follow these events from abroad that our rebate is up for negotiation. Why should the Opposition weaken our position at Edinburgh?