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Single European Market

Volume 131: debated on Wednesday 13 April 1988

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11.

To ask the Chancellor of the Duchy of Lancaster what studies have been made by his Department of the impact of the realisation of the Economic Community internal market in 1992 on the regions and nations within the United Kingdom; and if he will make a statement.

The completion of the single market means greater freedom of trade, and many studies from various sources have shown that this will bring benefits to all nations and regions within the European Community. We have commissioned few formal studies, but economic analysis is carried out within the Department of Trade and Industry in the course of providing advice to Ministers.

Will the Minister accept that the benefits, or disbenefits, of the single market depend very much on the distribution of those benefits among the multinational companies, the work forces and, in particular, the regions that will benefit? Does he agree that as part of the integration of the market there is need also for a parallel integration and enhancement of social policy, of social fund spending, and of regional investment?

The hon. Gentleman will know that it has recently been agreed in the Community that the structural fund should be doubled in the next few years, so the contribution made by structural funds to the regions of the United Kingdom will be increased. I hope the hon. Gentleman accepts that that will be beneficial. I take the point that he broadly makes, that success for regions depends on the distribution of benefits, but there is no reason why successful businesses in the regions of the United Kingdom should not benefit if they are competitive.

How resolute will my hon. Friend be before and after 1992 in asserting the proposition that the rates and scope of value added tax and other indirect taxes imposed upon the British people should be matters for the Chancellor of the Exchequer and this House and not for the Commission?

It will not fall to me to be resolute or irresolute about it, but I can assure my hon. Friend that the Chancellor of the Exchequer and the Prime Minister intend to be very resolute.

One of the possible effects of the operation of the internal market may he to allow into this country combustion-modified foam and other foams which—after February next year—it will be illegal to sell here. Will the Minister refute the statement issued by Conservative Members of the European Parliament that the British Government should go back on that commitment and accept lower safety standards, such as are currently allowed in Belgium, West Germany and Italy, so that when the internal market comes into operation such dangerous types of foam can re-emerge and be sold on the British market? Is it not a disgrace that this major step forward should be undermined by Conservative Members of the European Parliament?

I can assure the hon. Gentleman that we have no intention of going back on the decision which I announced in January about foam in furniture. Those regulations will apply to any furniture supplied in this country, no matter what its origin.

Has my hon. Friend noted that the Cecchini report, to which he referred indirectly in an earlier answer, suggests that the single market will add 5 per cent. to the gross domestic product of the European Community as a whole? Will he confirm that it is up to industry in the regions and in this country generally to take full advantage of the opportunities that he is drawing to their attention in the 1992 publicity campaign, and also that it is essential that the regions press for the continuation of this Government's economic policies, which make our country more attractive in the European Community than others?

The report to which my hon. Friend refers has not yet been published, but the Commission has previewed some of its contents, which show that there are major economic benefits to flow from the completion of the single market. My hon. Friend is absolutely right when he says that the success of this Government's economic policies has not only made the United Kingdom very attractive to investment but has made British business fitter, more supple, more resilient and better equipped to take advantage of the opportunities of 1992 than under any previous regime.

Are Ministers at all queasy about approaching the single market when our research and science funding is much less satisfactory than in competitor countries? How about inviting Sir George Porter to breakfast and answering his television lecture on Sunday night? Would the Minister be ready to do that?

Sir George Porter is very welcome to come and have breakfast whenever he wishes, and we would have an interesting conversation.

In response to the first part of the question, no, we are neither anxious nor queasy.