Economic Summit (Tokyo) (Hansard, 12 July 1993)

§ The Prime Minister (Mr. John Major)
Madam Speaker, with permission, I should like to make a statement on the economic summit in Tokyo and the Group of Seven meeting with President Yeltsin.
I attended the summit with my right hon. Friends the Foreign Secretary and the Chancellor of the Exchequer. During the three days I also had bilateral meetings with our host, Prime Minister Miyazawa, and with the Presidents of the United States and Russia and the Prime Minister of Canada. The summit produced significant achievements. These are set out in the economic and political declarations which I have placed in the Library of the House.
Before the Tokyo summit, the GATT talks had been stalled for several months. The summit acted as a catalyst. The United States, Japan and the European Community negotiated a report on access to each others' markets which has led to a resumption of GATT negotiations in Geneva this morning.
The report offers large benefits to British industry. In six of the eight categories where tariffs are to be abolished entirely, Britain is a net exporter. These include pharmaceuticals and construction equipment. Japan's agreement to abolish all the import duty on whisky will give a welcome boost to sales in a market which is already worth over £170 million a year to Scotland. Many other particularly high tariffs faced by British exporters will be cut by 50 per cent. or more. These include punitive United States tariffs on ceramics, glassware and high quality textiles. In other categories of manufactured goods, there was agreement to cut as many tariffs as possible by a third, or to harmonise them at low levels.
The Uruguay round is far wider in scope than previous multilateral trade negotiations. It still has a long way to go, but the Tokyo meetings have injected much-needed momentum and real progress on substantive issues—action as well as words—and the world-wide prospect of more trade and more jobs, especially for a trading nation like the British. With low interest rates and firm control of costs, British industry is exceptionally well placed to benefit from a successful GATT round.
Each summit country, except Japan, is facing a serious fiscal problem. With the exception of the United Kingdom, the European participants are not expecting economic growth this year. Against this background, the summit identified barriers to growth which have developed in much of the industrialised world.
As at the European Community's Copenhagen Council, I found a new willingness among our partners to address some of the hard lessons that we learnt in the United Kingdom during the recent recession. Three points in particular were generally accepted. The first is that there is a long-term upward structural trend in unemployment in addition to the cyclical effect of the recession. Secondly, on present forecasts, the cost of social provisions is likely to exceed the capacity to meet them in all the main industrial economies and, thirdly, that deregulation and labour market flexibility are vital to get unemployment down.
It was agreed that Europe should implement the firm budgetary and other measures needed to facilitate the rapid reductions in interest rates that are now required in many countries on the continent. In north America, strong 670 action was being taken to bring down fiscal deficits over the medium term with the objective of securing higher saving and investment. Japan, meanwhile, will implement fiscal and monetary measures to ensure sustained growth led by strong domestic demand. That will help to reduce Japan's large current account surplus.
Each of those measures is intended to help growth around the world. The summit's accent on jobs was reflected in agreement to send high-level representatives to a special meeting that President Clinton is convening in the autumn. That will study the causes of unemployment and pool experience in seeking solutions.
In April, the Group of Seven put together an unprecedented set of measures to help Russia through its deep transformation. At Tokyo, the Heads of Government confirmed that approach and noted that some large financial flows were already being made available, including $1½ billion in a new IMF facility. We set out a programme worth some $3 billion to help privatisation and restructuring. There are now some encouraging signs of a spreading enterprise culture in Russia. The summit leaders told President Yeltsin that they were determined to sustain the huge support that they had given reform in his country.
Of equal importance, we have reinforced our political partnership with Russia. As an innovation this year, our agenda included a joint review with President Yeltsin of international problems. At my suggestion, the meeting concluded with an invitation to the Russian President to join us again next year in Italy.
The political declaration touches on many of the problems we discussed with President Yeltsin, or beforehand among the Seven. We supported a negotiated settlement for Bosnia, but only on the basis that it would be acceptable to the Muslim people and not imposed on them. We highlighted the importance of the nonproliferation treaty, supported the constitutional talks in South Africa and expressed concern about the behaviour of Iraq, Iran and Libya.
The summit paid close attention to problems of the developing world and of the environment. I secured agreement that improved debt reduction terms should be considered for the poorest and most indebted countries. I hope that that will carry implementation of the Trinidad terms further. On the environment, the summit reaffirmed its commitment to sustainable development and implementation of the Rio decisions.
Finally, a word about the summit process itself. Over 19 meetings, the summits have evolved from an informal discussion between Heads of Government into an enormously expensive and, in my view, over-structured international event. I believe that radical change is necessary if we are to get the best out of the summit process. I proposed innovations last year and I made further proposals in Tokyo. These were widely supported. I hope that, as a result, future summits will be more informal, less pre-prepared and will provide even more opportunities for spontaneous discussion between the summit Heads.
Despite the procedural weaknesses I have mentioned, the Tokyo summit produced results of particular benefit to the United Kingdom as an exporting nation and a leading advocate of free trade. It concentrated on problems that are causing deep concern not just in this country, but around the world. It helped to bring leaders who are 671 addressing those problems in common closer together. It laid the groundwork, I believe, for productive work at future summits.

§ Mr. John Smith (Monklands, East)
I thank the Prime Minister for making this report to the House.
We welcome the recognition by the Group of Seven that there is insufficient growth and too much unemployment in their economies. In particular, we welcome President Clinton's proposal for a special employment summit this autumn.
Can the right hon. Gentleman explain why, when similar issues were raised at the summit last year by the then French Government, he was, as was noted in Saturday's issue of The Independent, brusquely dismissive of the idea of unemployment being discussed, apparently saying: What for, if we can't do anything about it? Does the right hon. Gentleman now accept the need for closely co-ordinated international action to promote growth and employment, and that such action must be taken at the European level? Would not it be a good lead to others for Britain now to cut interest rates? Would not that also be very much in Britain's interests, given last week's warnings by Midland Montagu, among others, that recovery in our economy will flag unless there is a further cut in base rates? I welcome what the Prime Minister said about the progress that has been made on the GATT. Will he explain, however, why two of the critical issues—agriculture and trade and services—were ignored at the summit? Although valuable progress has been made in the quad talks to which he referred, all the agreements depend on a successful outcome on the difficult fronts. Why was agriculture ignored when the main protagonists in the dispute—France, the United States and Japan—were all around the same table?
Does not the Prime Minister recall that the G7 countries have promised to settle the issue in every summit since Houston four years ago, and that two years ago, at the London summit, the right hon. Gentleman himself pledged to remain personally involved in the process, ready to intervene if differences can only be resolved at the highest level"? Why was the subject dodged at Tokyo?
Opposition Members also welcome the continued economic assistance for Russia; but is it not strange that the $4 billion package agreed by the G7 in April has now shrunk to $3 billion? Why has that happened, and what message is meant to be conveyed by such a startling reduction in such a short time?
Was any consideration given to assistance for the Ukraine, especially in the light of its genuine economic difficulties and the vital importance of its accepting the arms reductions agreed under the strategic arms reduction treaties?
Does the Prime Minister appreciate that there will be disappointment—in many parts of the House, I hope—that full agreement on the Trinidad terms of official debt reduction has still to be reached by all the G7 countries, and in particular by Japan? Should not consideration now be given to extending the principle of debt relief from bilateral to multilateral official loans, especially those of the International Monetary Fund and the World bank? Can that be put firmly on the G7 agenda?
We welcome the recognition in the declaration of the danger of nuclear proliferation and the vital importance of the non-proliferation treaty. Would not the process be 672 assisted, however, if a comprehensive test ban treaty could be agreed? Will the Prime Minister join me in strongly welcoming the United States' decision to extend its own ban on tests by a further year?
Does the Prime Minister understand the depth of feeling, in this country and throughout the world, about the disastrous turn of events in the former Yugoslavia—which, I believe, merited only one sentence in his statement? Does he appreciate the incomprehension at the complete failure of the international community to address its responsibilities in Bosnia? As we speak, the Serbian siege threatens to overwhelm Sarajevo. How does the Prime Minister think the inhabitants of that city feel about the evasive platitudes of the G7 declaration? Have they not heard it all before? Meanwhile, Serb and Croat aggression continues unchecked.
Are we not in a parlous state when the whole United Nations effort—both humanitarian relief and peacekeeping—is stalling because of inadequate resources and support from the international community? Instead of vague threats such as Stronger measures are not excluded which the Foreign Secretary got into such a mess trying to explain—should we not hear a commitment to action, such as the use of air strikes, to make the aggressors understand that the international community will no longer tolerate the defiance of United Nations authority and the dismembering of Bosnia?
Why are not sanctions against Serbia being toughened, and why are not sanctions being imposed on Croatia? Why are extra troops and greater resources denied to the United Nations in the field? Why is there no resolve to make safe areas the haven that they should be for the innocent sufferers in this bloody conflict?
Has not the summit generally failed to fulfil its exaggerated promises of success, and, in the case of Bosnia, completely avoided its fundamental responsibilities?

§ The Prime Minister
The right hon. and learned Gentleman was uncharacteristically negative, but I shall endeavour to deal with the points that he made. I am grateful for the welcome that he gave to parts of the agreement that have been reached. Whatever cross-party support is available is always helpful on these occasions internationally.
The right hon. and learned Gentleman referred to the report in The Independent. As is so often the case with newspaper reports, I am a little baffled by what the right hon. and learned Gentleman was quoting from, or what he might mean by it. [Interruption.] Well, he probably quoted something that was inaccurately reported.
As for the right hon. and learned Gentleman's question regarding co-ordinated action on unemployment at the European level, I refer him to the report that I gave on the Copenhagen summit some time ago, to which I believe he responded.
I agree with the right hon. and learned Gentleman that there is a long way to go on the Uruguay round. I specifically made that point. It was necessary to get the access agreement settled so that we could return to everybody negotiating, yet again, for both services and agriculture, where there are extremely difficult problems to be solved. What is vital is that, as a result of the agreement reached in Tokyo, the multilateral negotiations have started again this morning.
673 Whatever agreements may be reached by the quad, they are only a part of all the countries which finally have to reach agreement in terms of the Uruguay round. I have made the point on many occasions that each G7 summit since Houston has sought an agreement on the Uruguay round. It was for that reason that on a number of occasions in the last six months I approached other Heads of Government to try to push the negotiations along further, including a meeting that I had with the President of the Commission in the autumn of last year.
I have therefore, as I said I would, remained personally involved in this matter, and I propose to do so for one reason above all others. I believe that there is nothing more important internationally at the moment than a satisfactory outcome to the Uruguay discussions, for such an outcome will increase growth and create jobs in this country and around the world. I believe that that is vital. I know that the right hon. and learned Gentleman shares that view.
On the right hon. and learned Gentleman's questions about Russia, the $4 billion to which he referred that had been spoken of in April was an aim suggested by one member. It was not an agreement. We have agreed on $3 billion. No one is forthcoming with resources beyond that. When I met President Yeltsin at breakfast, and subsequently, he seemed to regard that as a very substantial contribution, and one for which he was extremely grateful. He did not have the reservations expressed by the right hon. and learned Gentleman about it.
As for the Ukraine, we are helping the Ukraine bilaterally. The reason for the inability to help the Ukraine multilaterally is that it has not reached an IMF agreement. If it is able to reach an IMF agreement, the prospect of further multilateral assistance is certainly necessary. The point made about arms reduction in the Ukraine is important. It was a point that we discussed, and it was discussed on previous occasions. It is a problem of immense complexity that we shall need to continue to address.
As for the Trinidad terms, Japan has always had a rooted objection to writing off debt. Japan is prepared to extend debt, but for its own internal accounting reasons it is deeply reluctant to write it off. The United States has often had the same difficulty. However, it has now established the principle of debt relief and will be meeting the Trinidad terms. That is a distinct move forward.
We agreed, as a result of discussions, that we would ask the Paris Club to look afresh at further help for the poorest countries. That will involve the Trinidad terms countries in particular. I expressed the view that I hoped that it would look at going well beyond the Trinidad terms and writing off a large proportion of the total stock of debt, not just the stock of debt that becomes due for repayment during the period of an IMF agreement. That would be a substantial addition to write-off for the poorest countries in the world. We shall continue to push for that in the Paris Club.
The right hon. and learned Gentleman referred to a comprehensive test ban treaty. That does remain a long-term aim. I hope that in due course we shall be able to achieve it.
The right hon. and learned Gentleman raised a series of points on Bosnia, points that he has raised on previous 674 occasions. I am not sure that there is anything fresh in what he has said today. Although he was quite long on questions, he seemed to me to be a little short on solutions. It may be that he has lost touch with some of the events that are occurring on the ground. In respect of humanitarian aid, he will perhaps have noticed that even this morning my right hon. and noble Friend Lady Chalker announced a further £18.5 million worth of humanitarian aid from the United Kingdom to help people in Bosnia.

§ Mr. John Watts (Slough)
Did my right hon. Friend impress on the other European Community Heads of State and, in particular, on the President of the Commission, Mr. Delors, that if they are at all serious about reducing unemployment and improving employment prospects they should immediately abandon the social chapter and all similar policies, which would impose unnecessary costs on industry and commerce?

§ The Prime Minister
I am extremely sorry to say that Mr. Delors was unwell and was not therefore at the summit. He was represented by Mr. Christophersen, the Vice-President of the Commission, who is aware of the United Kingdom's views on the social chapter. We did not specificallly discuss it, but he is in no doubt whatsoever that we believe that the social chapter would cost jobs, not create them.

§ Sir David Steel (Tweeddale, Ettrick and Lauderdale)
I thank the Prime Minister for having met an all-party group to discuss the Trinidad terms before he left for the Tokyo summit. How soon does he expect some results from the initiatives that he took at the summit?
Secondly, am I correct in understanding that none of the announced tariff cuts will take effect until the Uruguay round of the GATT talks has been completed, and should we not keep that in perspective?
Thirdly, on Bosnia, will the Prime Minister accept that neither the strong words of the G7 nor the humanitarian package announced this morning will do anything to help the potentially murderous siege of Sarajevo unless the United Nations troops on the ground are authorised and reinforced with resources by their Governments to enable them to break that siege?

§ The Prime Minister
On the three points that the right hon. Gentleman made, I hope that the Paris Club will begin soon to discuss the question of further debt relief. How rapidly it will reach a conclusion I am afraid I cannot anticipate. The United Kingdom will push for a comprehensive solution as speedily as possible, but we have run into difficulties. People believe that we have been a little ahead of them in seeking debt reduction in Toronto terms three or four years ago, in Trinidad terms a couple of years ago and now. There are distinct difficulties in other countries. It is possible for some countries to move ahead unilaterally, as we ourselves have done from time to time in the past, but that then diminishes the capacity of those countries to seek what the debtor countries most need, which is a comprehensive write-off of debt by the Paris Club and, where appropriate, by the London Club as well in terms of commercial debt.
One of the points that I hope all our partners will recognise is that there is no incentive whatsoever for many of the poorer countries to continue to try to lift themselves out of their present difficulties if every element of their 675 increased prosperity is then utilised to pay off an increasing level of debt interest on an increasing capital sum. I hope that it will be possible to have a substantial write-off.
On tariff reductions, the right hon. Gentleman is entirely right: nothing, in the famous terms, is agreed until everything is agreed. The hope and expectation is that the deadline will be in the middle of December—

§ Mr. Dennis Skinner (Bolsover)
Again.

§ The Prime Minister
The hon. Gentleman says, "Again", and he is right to be sceptical about it. We have done it, but we now have movement that we have not seen in the past with the fast track renewal in the United States and the breakthrough on access talks. I hope that we will get it concluded in December of this year.
On the question of Sarajevo, the right hon. Gentleman knows the Government's position. I am not in a position to offer fresh troops.

§ Mr. John Biffen (Shropshire, North)
The Prime Minister has clearly had a most excellent Tokyo summit, but may I congratulate him in particular on the work that he intends to undertake to make such gatherings much less structured and, hopefully, much less frequent? Is he aware that in certain circumstances travel narrows the mind and that there is nothing more absurd in the current circumstances than a gathering of the world's elite, discussing the nobility of its aims, at a time when right across north America and Europe there is an all-time record gap between the perceptions of Government and governed?

§ The Prime Minister
I strongly share the views expressed by my right hon. Friend. It may be that one of the reasons for that gap between the public and the politicians is an excess of summit fatigue, where people meet together without a realistic expectation of actually achieving what may have been expected from a summit of that sort.
I am delighted that colleagues have accepted many of the ideas for simplifying the summit process. I must confess that I did not achieve all the ideas that I wanted. I say with some trepidation, with my right hon. Friend the Foreign Secretary sitting beside me, that I had hoped to restrict the summit to Heads of Government only and not Foreign Ministers and Finance Ministers. However, those of our colleagues with coalition Governments felt that they should continue to attend.

§ Mr. Robert Sheldon (Ashton-under-Lyne)
Is the Prime Minister aware that one of the advantages of these summits is revisiting, again and again, the continuing problems that face the world? Will he accept that what is needed now is the necessary pressure on Japan to reduce its balance of payments surplus and the essential requirement to move the GATT forward? The excessive trumpeting of success does not suggest that we have the GATT problem fully in mind.

§ The Prime Minister
We are well aware of the importance of the GATT round and no one in this House has been in any doubt about that for the past two years. Well over 100 nations are engaged in the Uruguay round talks. That makes it extremely difficult to reach agreement. As I indicated earlier, the talks are much wider and much 676 more comprehensive than any previous trade talks. They include services and agriculture, and that has not been the case in the past. Those extensions are very welcome.
One point which deserves to be made is that many of the Cairns group of countries—in industrial terms, rather smaller countries—reached their GATT agreements three, four or five years ago and they have held to them. Their frustration at the difficulty of the United States and Europe in sticking to agreements that they reached months ago is entirely justified. I very much hope that we will be able to do that and also reach an agreement.
The point about revisiting problems is entirely right. However, it is not desirable to revisit them on occasions when there seems to be no practical opportunity of doing anything about them unless the revisiting is on the basis that I have proposed for the future—much more informal discussions.

§ Sir Peter Hordern (Horsham)
Will my right hon. Friend confirm that, while the agreements in Tokyo are to be welcomed, there is no question but that a general reduction in tariffs is to be preferred to a series of bilateral agreements reached between different countries such as the United States and Japan? Does my right hon. Friend agree that the main purpose must be to achieve a reduction and success in the Uruguay round in agriculture? Will he confirm that no single country has the right of veto in such negotiations?

§ The Prime Minister
I would certainly confirm that. In terms of the European Community, an agriculture agreement is available by qualified majority vote. One hopes that that would not be necessary and I hope that, at the end of the negotiations, the advantages there for every western European country in industrial matters will ensure that no one would seek to block it on the grounds of agriculture. We need an agreement on agriculture. It will be a novelty to have one and it would be a very remarkable breakthrough if it were achieved.
With regard to my right hon. Friend's earlier point, a general agreement is infinitely to be preferred to bilateral agreements. Bilateral agreements are of little help to many of the developing countries.

§ Mr. Gerald Kaufman (Manchester, Gorton)
In his bilateral talks with President Clinton, did the Prime Minister discuss the United States ban on British nuclear tests in Nevada? Did he remind President Clinton that a year and a quarter ago this Government told the country that nuclear tests were indispensable to British security? Will the right hon. Gentleman tell the House whether British nuclear tests are still indispensable to British security, and will he give a clear yes or no?

§ The Prime Minister
In fact, I discussed that with President Clinton a few days before we went to Tokyo and we spent some time discussing it. The ban has been extended for a further year. We will wait and see whether other people outside the United States sphere of influence continue testing, in which case I think that the United States and we would as well. In that year, we are seeing whether we can find alternative ways of managing without the necessity for the tests. Some think that we can do that and we are still examining that. The scientists are as yet uncertain. I hope that it will be possible.

§ Mr. Patrick Cormack (Staffordshire, South)
Although I congratulate my right hon. Friend on a very successful 677 summit, may I press him again on Bosnia? Does he accept that, since the Washington declaration, events have deteriorated markedly, that no extra protection has been given to those in safe havens, and in Sarajevo in particular, and that that great European city stands on the brink of total collapse in the most atrocious conditions seen anywhere in Europe since the end of the second world war? There were some tough words in the declaration on Bosnia. Is my right hon. Friend prepared to say that they will be followed by action to try to save Sarajevo?

§ The Prime Minister
The Secretary-General, as my hon. Friend will know, is actually mustering troops at the moment in terms of the resolution, the number of which escapes me for the moment, on safe areas which was passed some time ago. We ourselves have provided troops; we have had troops in Bosnia for some time. We look forward to other people doing so as well so that that resolution can be carried out.

§ Mr. Frank Field (Birkenhead)
Given the importance of the level of world trade to British prosperity, may I welcome the small but important movements in the GATT negotiations that the Prime Minister announced this afternoon? May I remind the Prime Minister of the answer that he gave recently to the House, that one of the Government's objectives was to establish full employment? Is he aware that it is a long time since the House has heard that as an objective of Her Majesty's Government? Does the Prime Minister accept that, although many people have very useful ideas on how we could marginally increase the number in employment, nobody but nobody in the western world has any idea how to achieve his objective?
When Britain faced exactly the same situation in the 1930s, the then Prime Minister sounded a note of urgency by initiating a national debate and having that debate reporting directly to him. Will he consider a similar initiative so that when the British delegates go to Camp David they can go armed with new ideas, bringing hope to our constituents, some of whom have waited 10 years or more in the dole queues, rather than acting as mere intellectual bag carriers of other nations?

§ The Prime Minister
I am grateful to the hon. Gentleman for what he had to say in his opening remarks about GATT. It was, of course, this country that raised at Copenhagen the significant question of employment across Europe and the long-term trend.
What is of increasing concern when one strips away the effect even of the recession is that right the way across Europe—not just in this country but right the way across Europe—from about 1970, under Governments of both parties, and at one stage two parties at once, there has been a general increase in unemployment. Worse than that, there has been a corresponding increase in long-term unemployment that is centred particularly upon low-skilled or unskilled males. That is not a British phenomenon; it is a phenomenon that one can see to a greater or lesser degree across the whole of the industrialised world, with the exception of Japan, where different circumstances apply.
We did raise the issue in Copenhagen. I raised it again in Japan. We will most certainly contribute forcefully both to the White Paper in Europe and President Clinton's 678 discussions later on this year. Some jobs will certainly be created by supply side reform, some by growth, but there is not an automatic equalisation between growth and jobs, as hon. Members will realise. On any rational expectation, a satisfactory GATT agreement will also create a significant number of jobs. There is a series of events in train that can help to put people back to work. That is certainly our objective.

§ Sir Teddy Taylor (Southend, East)
As the substantial and exciting tariff reductions that my right hon. Friend the Prime Minister fought so hard to achieve can be frustrated if the GATT round breaks down, what on earth can we do if the European Community is unwilling to reduce its agricultural expenditure which is currently beating every previous record, with the mountains of food breaking every previous record? Would it not greatly help the GATT discussions that the Prime Minister has worked so splendidly on if some member state within the EC would propose that either the CAP should be scrapped or that individual nations should be entitled to disengage from it? Would not that help my right hon. Friend the Prime Minister in the fantastically good job that he did at Tokyo?

§ The Prime Minister
I am grateful to my hon. Friend for his helpful contribution. The Government agree with him on the need for CAP reform, and there has been some reform of the common agricultural policy. No doubt more will be necessary, but we will certainly endeavour to persuade all our European partners not to stand in the way of a comprehensive trade agreement.

§ Mr. Tam Dalyell (Linlithgow)
In his opening statement, the Prime Minister referred to discussions on the behaviour of Iraq. What hard evidence did either the Americans or President Clinton give about the involvement of the Iraqi state in the so-called attempted assassination of President Bush in Kuwait? Is it likely, if it was Saddam Hussein's handiwork, that the would-be assassins would run out of petrol and not know where the university of Kuwait was? Will he be very careful before endorsing further military action and the launching of missiles on Baghdad?

§ The Prime Minister
I will send the hon. Gentleman a copy of the remarks concerning the behaviour of Iraq that were made recently by Ms Albright at the Security Council of the United Nations, which I think he will find of some interest. In the past couple of days, we have also seen obstruction of the United Nations weapons inspectors. I think that is a provocation. It stands in stark contrast to Iraq's obligations under Security Council resolutions and, clearly, that matter will now have to go back to the Security Council.

§ Sir Peter Tapsell (East Lindsey)
May I ask my right hon. Friend—who always represents Britain at meetings of Heads of Government with distinction—a similar question to that which I asked him when he returned recently from the European summit in Copenhagen? What is the point of repeated high-flown communiqués drawing attention to the urgent need to reduce unemployment, when its principal creator, the central bank of Germany, is outside democratic control? Has my right hon. Friend, with his usual tact, reminded his German colleagues of the fact that it was not inflation but unemployment that brought down the Weimar Republic and put Adolf Hitler into power?

§ The Prime Minister
I cannot say that I made that particular point in that fashion at the summit discussions, but we indicated the importance that we attach to unemployment when we were in Copenhagen, bilaterally with other European and other Heads of Government, and again in Japan. I think there is a level of understanding about the concern that people feel about the problem that did not exist even a few months ago. I know that my hon. Friend's remarks will be read carefully in other places.

§ Mr. Dennis Skinner (Bolsover)
Is not there an air of unreality about the fact that the Prime Minister had to go all the way to Tokyo to tell us that they have discovered unemployment in Britain? If he had asked in any region of the British Isles, he would have found out that everyone knows that there is a lot of unemployment in Britain. Instead of swapping advice with other Heads of State about how to fiddle the figures in different countries. and talking about level economic playing fields when there cannot be such a thing in the world, why does not he do something here at home, and save the pits, stop shutting the shipyards, save the engineering base, reintroduce exchange controls and introduce import controls? That is the way to save jobs in Britain.

§ The Prime Minister
I am sure that someone would have made a similar speech following the invention of the wheel.

§ Sir Anthony Grant (Cambridgeshire, South-West)
Did my right hon. Friend make it clear at the summit that there will be no deeper involvement of our limited forces in Bosnia, or any mad adventure there, notwithstanding the blandishments of the armchair television warriors on the other side of the House? Will he suggest to them that, if they want a deeper involvement, they had better go out there and serve themselves?

§ The Prime Minister
I have said on a number of occasions that we have made a contribution in terms of troops to humanitarian aid. There has been a call by the United Nations for more troops. I think that that call should be met by those countries that have not yet contributed.

§ Mrs. Margaret Ewing (Moray)
While I recognise that every Member of the House will welcome the fact that the GATT round of talks seems to be under way again, will' the Prime Minister say whether he believes in his heart of hearts that a conclusion can be reached by mid December?
As to the agreement on Scotch whisky reached by the quadrilateral partners, does the Prime Minister accept that throwaway remarks suggesting that it will be to the benefit of Scotland really mean that it will be to the benefit of the Exchequer? While the agreement may help to retain jobs in the whisky industry in Scotland, it will not create them. The issue underpinning that industry, which is a major exporter, is the need to eradicate the internal excise duty levied by Japan, which disadvantages Scotch whisky and other spirits produced in this country by £4 to £6.

§ The Prime Minister
As to the hon. Lady's first point, I think that a settlement can be reached. I cannot be certain because many complex matters have yet to be determined. I am in no doubt now that one can be reached, and I am delighted that the talks in Geneva recommenced this morning.
680 As the hon. Lady said, there are two elements in the difficulties faced by Scotch whisky in the Japanese market. One is the external tariff. When a settlement is reached, it will disappear entirely—100 per cent. of the external tariff will go. The other is the internal taxation level. We have been pursuing with the Japanese—and I did so again with Prime Minister Miyazawa—the high level of taxation on Scotch whisky. We will continue to do that in the hope of having it reduced. There has already been a significant reduction, or there will be, with the removal of the external tariff.
As I said in my statement, £170 million of exports go to Japan. As Scotch whisky will in future be cheaper, it is likely that exports will increase. That will certainly safeguard jobs, and I am not sure why the hon. Lady is so certain that it will not create them as well.

§ Mr. Andrew Rowe (Mid-Kent)
Is my right hon. Friend aware that perhaps the most popular policy being pursued by his Government at the moment is that of deregulation? It would be even more popular if it were more widely known. Can my right hon. Friend assure the House that he was able to persuade his G7 partners that that is a popular and necessary part of a world policy, which will make the lives of small businesses in particular rather more fruitful in future?

§ The Prime Minister
They seemed persuaded. We shall see whether action follows the gentle response when I made that point in discussions. I believe that there is an understanding that there need to be supply side changes to create employment. One important change, as my hon. Friend said, is deregulation.

§ Mr. Calum Macdonald (Western Isles)
On the question of Bosnia, the Prime Minister has sometimes given the impression that all the expert advice that he receives is that the west should not get involved in using military force to deter territorial aggression, first in Croatia and then in Bosnia. Will the right hon. Gentleman confirm whether that is the uniform advice that he is receiving, or do senior diplomatic and military figures say that we could and should use military force to stop the slaughter in the former Yugoslavia?

§ The Prime Minister
I have received no advice either from senior diplomats or from military figures that a solution could be imposed by military force.

Mr. Edward Garner (Harborough)
Will my right hon. Friend accept the congratulations of my constituents, who are heavily involved in the textile and agriculture industries, on the results of the Tokyo summit? We are pleased at the 50 per cent. reduction in textile tariffs as against the United States. However, if that agreement cannot be put in place by December, does he understand that there will be a need for further reductions in the 50 per cent. tariff ratio so that we may achieve far better exports of British textile goods to the United States.

§ The Prime Minister
I agree with my hon. Friend. I hope that we will achieve the settlement by December. In any event, that is not the end of the matter. Although a 50 per cent. reduction in tariffs is certainly welcome, we would have preferred a larger reduction—but that was what was negotiable on that particular occasion. I hope that we will return to that matter and seek an even larger reduction in the tariff, up to its complete elimination.

§ Mr. Peter Mandelson (Hartlepool)
Perhaps I may pursue the question put by my hon. Friend the Member for Birkenhead (Mr. Field), in response to which the Prime Minister seemed to be well intentioned and sincere in his desire to reduce unemployment but vague as to what he would do. Will the right hon. Gentleman share with the House a little more what new specific policy and initiatives the Government are currently examining which they may take to any new employment summit in the autumn?

§ The Prime Minister
As I said earlier, there was a range of matters to deal with unemployment. One is deregulation, which has just been mentioned. Not to impose extra costs on employers, as the social chapter would, is a second illustration of what needs to be done. Other measures include policies that will enable the economy to grow—as we have been seeking to do—and to protect capital investment, as we did in the previous public expenditure round. There are also the international macro points that I mentioned earlier: the United States is tackling its budget deficit, Japan will continue to support domestic demand as necessary, and in continental Europe there will be a move towards a reduction in interest rates. The necessity and attraction of closing the fiscal deficit in this country, as in other countries, is that it will be easier to make further interest rate reductions.

§ Dr. Ian Twinn (Edmonton)
Is my right hon. Friend aware of the positive and warm support he receives from Conservative Members for the achievements of the summit, especially the progress towards freer world trade and the greater advantage that that will have for our manufacturing industry? Will he now renew his efforts among our European partners to ensure that they all share our enthusiasm for free world trade?

§ The Prime Minister
Yes, I will certainly do that. A number of our European partners are also firm advocates of free trade. There are one or two who are slightly less firm in their advocacy and we shall endeavour to encourage them. We are not the only advocates of free trade in Europe; a number of other nations wholly share our views.

§ Mr. Bob Cryer (Bradford, South)
How much of the money that has been allocated to Russia will go towards helping to dismantle its nuclear weapons? Would not it impress the other.G7 countries if, instead of talking about the nuclear non-proliferation treaty in glowing terms, the Prime Minister did something about it by introducing a programme in the United Kingdom to shift our manufacturing base away from producing weapons of war to manufacturing for peace and getting rid of Trident nuclear weapons? On the basis of his argument, our jobs will depend on either the manufacture or maintenance of weapons of mass extermination for the next 20 years. Is that his policy?

§ The Prime Minister
The hon. Gentleman refers to weapons of mass extermination, when nuclear weapons act as a deterrent to protect the nation. That is their purpose. If the hon. Gentleman is so keen for us not to manufacture them, I hope that he will make that point equally clearly in Barrow and Devonport and that he has previously made it in Rosyth. His point rings with a rather curious air against representations made by many of his hon. Friends during recent months.

§ Mr. Cryer
What about diversification?

§ The Prime Minister
On the question of Russia, to which I was just coming, we are already helping the Russians with the transport of nuclear weapons and with technical help on their destruction. That is of importance to Russia, and, as his right hon. and learned Friend the Leader of the Opposition mentioned earlier, it is important to Ukraine, where further progress needs to be made.

§ Mr. Tim Devlin (Stockton, South)
As my constituency is not far from that of the hon. Member for Hartlepool (Mr. Mandelson) and as it produces pharmaceuticals, chemicals, engineering products and other products that fall into the eight areas on which, it has been agreed, tariffs will not be imposed in the future, may I warmly congratulate the Prime Minister on negotiating away those tariffs? I hope that he will bring as much pressure to bear as he can to end the GATT round as soon as possible.

§ The Prime Minister
I am grateful to my hon. Friend. I certainly undertake to do that, and I am grateful for his earlier remarks.

§ Mr. Cynog Dafis (Ceredigion and Pembroke, North)
I noted with interest the Prime Minister's reference to the Rio accord, which is intended to underpin all economic and trade policies henceforth. I wonder whether the Prime Minister is aware that a recent United States district court ruling meant that the north American free trade agreement could not be ratified because it did not include an environmental impact statement. Is not it possible that a similar fate might await the GATT agreement and that that could unravel the whole round? In that case, will the Prime Minister give some detail about the nature of the environmental discussion in Tokyo and the effect on the agreement there?

§ The Prime Minister
One of the significant points made in the discussion on the environment at Tokyo was that President Clinton pledged himself wholeheartedly to the Rio accords. That was a shift of policy for the United States and one that was very welcome. As the hon. Gentleman may know, much work has been going on following Rio to produce national plans for sustainable development, for dealing with climate change, for biodiversity and for forests by the end of 1993. There have been meetings of the United Nations commission on sustainable development; the most recent was in New York last month. Developed and developing countries are now working together actively to put the Rio commitments into practice. Rio is becoming a reality.

§ Mr. James Clappison (Hertsmere)
Does my right hon. Friend agree that many of the issues that figured most prominently at Tokyo, such as cutting deficits, deregulation and improving the flexibility of the labour market, were issues of British concern? Just as at Copenhagen, the agenda reflected Britain's concerns. Does my right hon. Friend further agree that there is growing evidence that Britain's case is prevailing, both in Europe and in the rest of the world?

§ The Prime Minister
My hon. Friend is entirely right about that point. It was very striking in the Copenhagen discussions just a few weeks ago and it was equally evident in our discussions in Tokyo last week. One of the reasons for that is that we went into the recession earlier than many other countries did. There is nothing like a recession to 683 concentrate people's minds on the reality of what needs to be done. Many countries, now that they are entering recession, are having to look, just as we have done, at some very hard decisions to help people and to recreate jobs.

§ Mr. John Spellar (Warley, West)
The Prime Minister conceded earlier that Japan was not experiencing high levels of unemployment. While he was in Tokyo, did he take the opportunity to look at what is happening in Japan? Did he notice, for example, that the Japanese are spending $70 billion in public works programmes to expand the economy? Did he notice that Japanese employers are trying to hold on to their workers and are not taking every opportunity to cut the work force? Did he notice that they are not as obsessed with the flexible labour market ideology? In fact, the Japanese Government and Japanese employers cannot understand all the fuss about the social market. Did the Prime Minister notice that, in spite of all that, it is the Japanese who have the substantial balance of payments surplus and that it is we who have the balance of payments deficit? When will he abandon the outdated Thatcherite philosophy and look at what really works in this world?

§ The Prime Minister
The hon. Gentleman may care to study Japan a little more closely before he entirely advocates that. He might, for example, not be entirely happy if we reduced our public spending share of gross domestic product to the Japanese level. That would make a significant difference and one that would be pretty unwelcome to the hon. Gentleman. If he looked at the social costs in Japan, he might also be just a little less enthusiastic. If he looked at some of the wage levels in parts of Japan, he might be a good deal less enthusiastic. I suggest that the hon. Gentleman spends his holiday in Japan.