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European Community (Membership Benefits)

Volume 990: debated on Monday 4 August 1980

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asked the Secretary of State for Industry if he will undertake a study of the effects on manufacturing industry of European Economic Community membership.

The benefits and effects of membership of the European Community are wide-ranging; a study of one sector alone would be of limited value.

Since energy prices in the United Kingdom are much higher than they are in some of the subsidised countries in Western Europe, with devastating effects on some industries; since interest rates, for good reason, are higher in the United Kingdom than in the rest of Europe, again with cost effects on industry; and since our exchange rate is very high, does my hon. Friend agree that all those grave disadvantages together have allowed for a massive increase in European manufactured imports? Can he say what the advantages are to manufacturing industry of membership of the EEC and how—if only one question might be asked—this outweighs the disadvantages?

We have to take the view of business as recorded today in a survey by the Institute of Directors, which stated that more than half of those interviewed thought that, overall, there were benefits from European membership.

Will the Minister say what benefits have accrued to manufacturing industry in the East Midlands from membership of the EEC, as the area is cascading into short time and insolvencies and desperate difficulties of unemployment are arising in a region that was previously prosperous?

The hon. and learned Gentleman knows as well as I do the serious situation in the textile industry. I suggest to him that membership of the European Community, and having the strength of the Community behind us in negotiating the multi-fibre arrangement, have been of benefit to the textile industry, which would not otherwise have existed.

Will my hon. Friend be careful that he does not encourage people to make the EEC a scapegoat for everything that goes wrong in this country? Would it not be more true to say that the problems of manufacturing industry arise from not being competitive? They are problems that would be with us whether we were inside or outside the Common Market, except that outside the Market they would be much more difficult.

My hon. Friend makes my speech for me. He is right on every count. There is no question but that our industry would be worse off outside the Common Market. It is up to our manufacturers to take advantage of the considerable opportunities that are open to them.

In view of the Minister's reply to his hon. Friend the Member for Eye (Mr. Gummer) and in view also of the fact that this year the deficit on trade in manufactured goods with the EEC will reach £5 billion, which does the hon. Gentleman think is more to blame: membership of the Common Market, or the Government's industrial policy?

The right hon. Gentleman's views on the Common Market are well known. He does not disguise them. The fact is that our manufactured exports to the Common Market have gone up four times as fast as they have to the rest of the world. I repeat what I have just said. It is up to our manufacturers, who are perfectly capable of taking advantage of the opportunities open to them. We have certain advantages. Our wage rates are half those in the Common Market. We are not competitive at the moment. We can become competitive, and then we can compete.

The hon. Gentleman has not answered the question. There is a £5 billion deficit this year. How will he remedy it? Who does he blame?

The fact is that, overall, in real terms, the deficit decreased in 1979 against 1978.