HL Deb 09 May 1995 vol 564 cc7-10

3.1 p.m.

Lord Bruce of Donington asked Her Majesty's Government:

Whether, in good time before the Agenda of the 1996 Inter-Governmental Conference is settled, they will convene an all-party conference in the United Kingdom to discuss the desirability of incorporating in the agenda such amendments to the convergence criteria set out in the Maastricht Treaty as will provide for the avoidance of an unacceptable level of unemployment.

The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Henley)

My Lords, no. The Government have no intention, at the 1996 Inter-Governmental Conference, of seeking to amend the "convergence criteria" contained in the Treaty on European Union, as agreed at Maastricht.

Lord Bruce of Donington

My Lords, the noble Lord will be aware that there is growing opinion throughout Europe, not confined to any political spectrum, that the monetary conditions laid down in the Maastricht Treaty under the protocol are not helping to cure unemployment and in fact may increase it. Will he bear in mind that the policies contained in the employment White Paper of 1944, which was drawn up after collaboration between the two main parties, were successful in this country for at least 20 years after the war, until the oil crisis? Does he not think that, with the United Kingdom being one of the most powerful nations in Europe, it is up to us, through the existing party leadership and through the Opposition as well, to give Europe and the countries of Europe the lead that they require?

Lord Henley

My Lords, I could agree with much of what the noble Lord said. I could agree that many countries are having problems with unemployment. I remind him that unemployment in this country is coming down and has been coming down for very many months indeed—and far earlier than has been the case in most other countries in Europe. If the noble Lord seeks further criteria for the convergence criteria in Article 109 he will know that right at the very end it refers to examining the development of unit labour costs. That is a point at which other countries could look. They could also look at the inflexible labour markets with which they are burdened— with which, fortunately, we are not burdened in this country.

Lord Hailsham of Saint Marylebone

My Lords, is not the truth of the matter that paper guarantees are not what we want in this sphere? What we want is a sustained and sustainable level of demand for goods and services.

Lord Henley

My Lords, my noble and learned friend is absolutely right. We also require good government to deliver exactly the right conditions so that people can provide the goods and services that are necessary to lower unemployment.

Lord Thomson of Monifieth

My Lords, is the noble Lord aware that an all-party group to deal with the very matters raised by the noble Lord, Lord Bruce of Donington, was convened? It was the European Communities Committee of your Lordships' House, to which the noble Lord made a notable contribution. The committee came to the conclusion, after close examination of the White Paper from the European Commission, that there was no need to change the convergence criteria relating to unemployment.

Lord Henley

My Lords, I thank the noble Lord for that intervention, which I am sure the noble Lord, Lord Bruce, will have noted. I look forward to the noble Lord, Lord Bruce, who is about to make a further intervention, explaining exactly what he meant.

Lord Bruce of Donington

My Lords, is the noble Lord aware that the recollection of the noble Lord, Lord Thomson, as to what the Select Committee report contains is remarkably short? It does not contain the reassurance the noble Lord requires. Is he further aware that unemployment in Europe is a most serious problem and that unless some endeavour to reduce it is undertaken there will be social unrest not only in Europe but perhaps even in our own country?

Lord Henley

My Lords, I shall not join the noble Lords, Lord Bruce and Lord Thomson, in their argument about the contents of Select Committee reports. I am sure that all noble Lords can go along to the Library, have a look at the report and come to their own conclusions. Other than that, I have to say that I agree with the noble Lord, Lord Bruce. Unemployment is very, very important. It is a serious problem in Europe. The fact is that it is decreasing in this country because of our flexible labour market. Most of our friends have problems because they do not have the same flexibility in their labour markets. One has only to look at the extra labour taxes as a percentage of hourly labour costs imposed on employers in Europe. In this country they are 15.5 per cent.; in Germany, 22.8 per cent.; in Belgium, 27 per cent.; and in France, 28.8 per cent. No wonder unemployment in those countries is that much higher.

Lord Stoddart of Swindon

My Lords, will the noble Lord give an assurance that at the Inter-Governmental Conference the Government will resist any move from any quarter which would in any way diminish the ability of Her Majesty's Government and properly elected Parliament to run the economy of this country in accordance with the judgment of the Government and Parliament elected by the British people?

Lord Henley

My Lords, the noble Lord's question goes slightly beyond the Question on the Order Paper. But I believe that the assurance he requires has been made quite clearly by my right honourable friend the Prime Minister.

Lord Eatwell

My Lords, in respect of the Maastricht criterion, which limits government fiscal deficits to 3 per cent. of GDP, do the Government consider that figure to include, or exclude, public sector capital expenditure?

Lord Henley

My Lords, the level of the deficit is an important matter. We would seek to bring it down. It is coming down in this country and we are one of the very few countries which, in terms of its deficit and overall debt, might be somewhere near meeting the criterion by the year 1997. That does not mean that all the criteria as set out in Article 109 will be met. As regards the noble Lord's detailed question, I would prefer to write to him.

Lord Eatwell

My Lords, perhaps I may remind the noble Lord of the question I asked. Does the Maastricht criterion limiting government fiscal deficits to 3 per cent. of GDP include, or exclude, public sector capital expenditure? If the noble Lord does not understand the Maastricht criterion, perhaps it would be a good idea to have the conference which my noble friend Lord Bruce suggests so that he might learn something.

Lord Henley

My Lords, the noble Lord's point was really a very silly one. The noble Lord's noble friend, with whom he does not exactly agree most of the time, was suggesting a cross-party conference. Since I believe that the noble Lord's party is for once actually in agreement with Her Majesty's Government on the convergence criteria, I do not believe that such a conference would be necessary. I also offered to write to the noble Lord on his substantive point.

Lord Skelmersdale

My Lords, has my noble friend noticed that the closer we get to the Inter-Governmental Conference the thicker and faster the questions from various politicians become? My right honourable friend the Prime Minister has been described as the best negotiator in Europe. How can he possibly be expected to negotiate if all his cards are on the table, having been elicited by such questions?

Lord Henley

My Lords, we have made that point on many occasions when we have refused to divulge, as my noble friend put it as a celebrated bridge player, our cards. No doubt the questions will continue to get thicker and faster, but I have not noticed that they have been particularly unthick and unfast in the past.