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Single European Market

Volume 131: debated on Wednesday 13 April 1988

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To ask the Chancellor of the Duchy of Lancaster what representations he has received about his campaign to publicise the approach of a European single market.

We are continuing to receive a large number of representations, all of which warmly support our campaign to alert British business to the challenge of completing the single market. The major phase of our campaign starts with a national conference at Lancaster House next Monday, 18 April.

Does my hon. Friend agree that the concept of the single market will suffer if monopolistic concerns in Europe, such as airlines or steel producers, continue to operate cartels, unofficial or official, to the great detriment of users and, indeed, to employment?

One of the objects of the completion of the single market is to make sure that competition operates within the market to the benefit of consumers.

Would it not be to the advantage of British business if we had joined the exchange rate mechanism of the European monetary system by the time we join the single market? In that case, why is the Minister of Trade and Industry saying that the time is not yet right to join the EMS? Will he still be saying that in 1992, if he is still there?

It is not for people in my position to predict the future. My right hon. and learned Friend makes his point about when he thinks is the right time to join the ERM and no doubt those making the decision will hear what he says.

Have the Government made any attempt yet to estimate what are likely to be the massive savings that should be made in British Customs administration from 1992 onwards?

There should be significant administrative savings. There are also estimated to be significant economic advantages to the whole of the Community. A report by the European Commission indicates that there should be increases to the Community's GNP of about £140 billion. Obviously, that has a major advantage for us. To those who say that the advantages will go one way, I say that that is a sad reflection on the competitiveness of British business. I believe that British business is now well placed to benefit from the opportunities that the single market will offer.

Does the Minister remember all the public relations effort at the time of our original entry into the Common Market setting out the tremendous advantages to British industry? Will he check the figures and show the continually increasing deficit in manufacturing industry between Britain and other members of the European Community? Why the hell should we believe him this time when we know that the previous time—

Order. I thought that I heard a somewhat unparliamentary word—why on earth would be more appropriate.

I dimly remember in the recesses of my memory what was said about the Common Market in the early 1970s, although I was a very young man at the time. To those who say that British business would not gain from the single market, I say that they are quite simply wrong. The United Kingdom is already open for trade to a greater extent than the rest of the Community. It must, therefore, be in our interests to open up the rest of Europe for British business.

How on earth can we have a single European market without harmonising indirect taxes?

I point out to my hon. Friend that the United States of America has had a very satisfactory single market for 200 years with some 50 different rates of sales tax in different states—not only different rates of sales tax, but quite often different systems of sales tax as well.

What will be the Government's response to the European Commission's insistence that the provisions in the case of Rolls-Royce and British Aerospace which limit foreign shareholdings to 15 per cent. should now be abandoned? Does the Government's enthusiasm for the internal market mean that they are ready to give up that essential protection for strategic British interests?

We shall continue to argue the British interest as strongly as we have in the past.

Will my hon. Friend also direct his information campaign to potential investors? Does he realise the importance that overseas companies attach to being inside the market by the time that it is completed? Is he aware of the studies that suggest that by the early part of the next decade a quarter of a million manufacturing jobs in Britain will be taken up by Japanese companies, an important proportion of which will be Wales? Is he aware that that is partly a consequence of the anxiety of those companies to be inside Europe before the internal market is completed?

My hon. Friend has made a very good point. We are already an extremely attractive environment for foreign investors. That is very much to the benefit of the United Kingdom. It has created many jobs especially, if I may say so, in manufacturing industry. I am sure that the consideration to which my hon. Friend has drawn attention is material.