§ 1. Mr. John Marshall
To ask the Secretary of State for Trade and Industry if he will make a statement on the impact of the Maastricht agreement on the relative attractiveness of the United Kingdom and other European countries to inward investors.
§ The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Peter Lilley)
The United Kingdom is already the number one destination for foreign investment in the Community. The fact that we shall not have burdensome employment legislation imposed on us by Maastricht may make this country more attractive still for foreign investors.
§ Mr. Marshall
Does my right hon. Friend agree with Commissioner Delors that the absence of a social chapter makes Britain by far the most attractive place for overseas investment within the European Community? Will he guarantee that if Commissioner Delors and his friends seek to impose a social chapter using other headings the Government will challenge their legal right to do so?
§ Mr. Lilley
I entirely agree with President Delors that the exclusion of that aspect from the full Maastricht settlement would make Britain a paradise for inward investment, and I have had that message communicated to all trade attaches in our embassies throughout the world. We shall, of course, resist any attempt to introduce such legislation by other means. Legally, it will be harder for anyone to do so now that the separate protocol to which we are not party provides, for those who wish it, the opportunity to introduce such legislation.
§ Mr. Alex Carlile
Does the Secretary of State agree that one of the most successful recipients of inward investment has been and can continue to be the financial services sector? Does he agree with the chairman of that industry, Sir Patrick Sheehy, that to opt out of the single currency would be a foolish measure? Does he agree with Sir Patrick 946 that the United Kingdom can retain its pre-eminent role in Europe in the financial services sector only if it subscribes enthusiastically to the principle of a single currency?
§ Mr. Lilley
We shall have to consider that decision if and when the time comes, and we have a right in this House to do so. We should, however, recollect that one of the reasons for the strength of the City of London is that it has consistently followed a very open policy, which is not always followed on the continent and elsewhere. That is what has made us so attractive. Uniformity of policy throughout Europe would have prevented us from building up the strength of the City of London.
§ Mr. Favell
My right hon. Friend will remember that when the Government came to power the country was suffering from the problems of being hopelessly non-competitive. If a Government who embraced the social charter were returned from the Opposition parties, would we not soon be back in those waters and simply become an industrial desert?
§ Mr. Lilley
That is, indeed, the risk that British industry foresaw, which is why it urged us to do what we did. That is also why it so much welcomed the successful outcome of the Maastricht agreement on those lines. It is pretty clear that Labour believes that it cannot get a majority for those policies domestically and therefore wants to achieve a situation in which they can be imposed on us by a majority of continental countries. I thought it particularly strange that the Labour party should label its new policy, "Made in Britain", when its strategy is to ensure that British policy is made on the continent.
§ Mr. Hoyle
Will the Secretary of State stop looking for scapegoats for Maastricht'? He boasts about inward investment, but is he not aware that following the last slump under this Government, between 1979–81, investment in manufacturing industry was so slow that the capacity is now hardly any higher than it was 12 years ago? Investment is falling back rapidly and all forecasts show that unless the Government's policies are changed there will be 4 million unemployed by the year 2000.
§ Mr. Lilley
That is absolutely incorrect, and I take it that the hon. Gentleman is dissociating himself from Labour Front Bench policy on the Maastricht settlement. Comparing this point in the economic cycle with the same point 10 years ago, during that period manufacturing output has risen by a quarter, manufacturing investment by a third, manufacturing productivity by a half and manufacturing exports by three quarters.