Anthony Meyer – 1986 Speech on European Industrial Policy

Below is the text of the speech made by Anthony Meyer, the then Conservative MP for Clwyd North West, in the House of Commons on 13 March 1986.

The subject I want to raise is the need for greater industrial co-operation in Europe. By Europe, I do not specifically and solely mean the European community, and when I talk of industrial co-operation I am not solely referring to ordinary industry; I wish to include the defence industries.

It is a subject to which I propose to return on future occasions because I believe that, if we can inaugurate more far-reaching and more constructive co-operation between the European countries in this field, we can go some way towards tackling the unemployment problem, which must be a matter of concern to every one of us.

Across the European Community, unemployment in the 12 member states is more than 14 million. While much of this unemployment may appear to be structural and as a result of technological change, and some of it may appear to be the result of temporary economic conditions, the fact is that, during the period that this is happening in the European Community, in the United States there has been a startling success in the creation of fresh employment so that unemployment levels in the United States remain at an acceptable level; and in what are undoubtedly our most dangerous competitors, that is to say, the industrialised countries of the Pacific basin, unemployment is at a very low level.

The inference is clear, that Europe is not taking advantage of the assets it possesses in order to strengthen its industrial base and to reduce its unemployment. It is, of course, generally known that the European Community is a long way from being even the common market, which is the most basic of its aims, further still from being any kind of an economic unit which would enable the member states composing it to take full advantage of it as a means of securing employment.

One of the points I will be urging on the Government is that they should live up to their own professions in this matter and that they really should give overriding priority to the completion of the internal market by sweeping away the barriers to trade, and particularly to trade in invisibles, which still exist.
Generally when Members of Parliament say that they conjure up a vision of obstructive Italian frontier officials, French customs arrangements at Poitiers for the import of Japanese goods and German obstructionism in the market of insurance. But there is a very large beam in our own eyes in the habits and mentalities of HM Customs and Excise which regards itself in many respects as being almost above the law. Anyone who has attempted to import anything through any of our ports will not, I think, rush to the conclusion that our customs is much more attractive in these matters than those of other countries.

I do not think that Customs is coming under a great deal of pressure from the Government to be any more easy going in these matters. Of course, we bring forward the arguments about the needs to control drugs and to control rabies, and both are perfectly valid arguments. None the less, it is difficult to avoid the suspicion that these are being used in many cases as a pretext for slowing up the inflow of goods. What is sauce for the goose has to be sauce for the gander, and if we want our goods to flow freely into Europe we must allow European goods to flow ​ equally freely into us. The Channel Tunnel will be a step in the right direction, provided that other obstacles are not put in the way of the operation of this tunnel.

However, that is not my main point. Sweeping away obstacles to internal trade will undoubtedly assist in the development of a single market. A single market of 273 million customers must be a very powerful home base for any industry. But there is rather more to what I want to say than that. We have witnessed over a very long time span—in Britain’s case probably since about 1870—the gradual and seemingly inexorable loss of industrial supremacy.

In the 19th century the United Kingdom was the workshop of the world. Anybody abroad would buy almost anything that was made in Britain, precisely because it was made in Britain. That position has been eroded over the years. Two world wars have wrought their toll. We have gradually seen what were once undisputed British industrial supremacies disappear down the plug hole. What happened to the great British motor cycle industry which at one stage was almost the sole motor cycle industry in the world? Little by little we have seen such industries disappear.

We are at a particularly dramatic moment in this process of disappearance, with the future of British Leyland very much on our minds. I do not intend to say very much about British Leyland, because there has been a debate on that subject. However, when it became apparent that British Leyland would have great difficulty in surviving as a mass car producer because it is very much smaller that any of its competitors two possibilities opened up for it. One was that it should be taken over by General Motors. The other possibility—the one that is being very much trumpeted by my hon. Friends with constituencies in the Midlands and by the Opposition—was that there should be a purely British rescue operation. Neither of these possibilities meets the bill. I accept that the American takeover makes some kind of economic sense, but an American takeover would represent a very large step towards the abandonment of a true, native-based industry. The British solution would lead us back, I fear, to the time when British Leyland was a permanent pensioner of the British state.

It is probably too late now for the third and, to my mind, the right alternative. Before we ever got to where we are, there ought to have been in existence the possibility of a partnership between British Leyland and one of the European manufacturers. It need not necessarily have been one of the EEC manufacturers. It could have been Volvo. That would have complemented BL’s capacities in such a way as to produce a viable firm that would have been multi-centred and whose ownership would have been basically European. If British Leyland had joined up with one of the German or Italian manufacturers, it might have contained a very large American element. I am not arguing in favour of a policy that would try to shut out the Americans. However, I am arguing that we should seek to have a policy that includes, wherever appropriate, a very substantial European element.

The same set of arguments apply to Westland. My right hon. Friend the Member for Henley (Mr. Heseltine) made a valiant and ultimately unsuccessful effort to mount a European rescue effort for Westland. Once again it was too late, not due to any culpability of Her Majesty’s Government but largely because such “rescue” as loomed ​ up over the horizon from Europe looked more like an attempt by the European manufacturers to snuff out Westland as a possible competitor. The faults are not on our side alone. But when we add them all together we get a failure both by Her Majesty’s Government and by the Governments of the European countries to make any use of the Community as an institution to exert its influence as a powerful trading bloc to sustain its own industry.

The argument will present itself in another particularly acute form over the future of the European airbus family of aircraft. I am sorry that my hon. Friend the Member for the City of Chester (Mr. P. Morrison) is not answering the debate, because he has a particular interest in the project. The airbus has been a tremendous success technically. Of course, it is far too soon to prophesy whether the Government, or those who put their money into the project, will make a profit.

We have the siren voice of that once sensible publication, The Economist, urging strongly that the British aircraft industry should surrender without a fight to the Americans and that we should allow all major civil aircraft to be built in the United States, leaving it to Boeing and McDonnell-Douglas to fight it out between them. That is a craven act of folly when the possibility exists of maintaining a capacity in Europe to produce not just an aircraft but a whole family of aircraft capable of meeting the demands of the world market at almost every level. I earnestly pray that the Government will listen not to The Economist but to those Ministers, of whom I am sure my hon. Friend is one, who will urge the vital importance of maintaining a capacity for the construction of civil aircraft in Europe. Here at least is one industry in which we for the moment are not faced with knock-out competition from the Pacific basin and where we should be unwise in the extreme to surrender all our advantage.

That leads me to public procurement, which involves not only Governments but also governmental agencies. One sometimes has the impression that European airlines in all too many cases deliberately operate a “buy American” policy. If the airlines operated a European preference when they make purchases of civil aircraft, that might in itself suffice to sustain a European civil aircraft manufacturing capacity.

The record on public procurement is frighteningly dismal. In 1982, the last year for which figures are available, in all its public purchasing the United Kingdom spent no less than 98·3 per cent. of Government cash on equipment made within our own borders. That left 1·7 per cent. with which to encourage joint ventures overseas. Though a dismal record, it is better than the Germans, who left not 1·7 but 0·3 per cent. for joint ventures; or the French, who left the enormous total of 0·09 per cent., or the Italians, who left nil per cent. of public expenditure to be spent outside their own borders.

This reflects the enormous public political pressure in favour of a buy native policy, and one need sit in this House for only a few hours to hear it, and understandable it is. Obviously, every hon. Member will urge as strongly as possible the arguments in favour of spending public money in his constituency. I remember fighting hard for the retention, for example, of steel-making at Shotton. From a constituency point of view, that was an unanswerable case. Nevertheless, there was a national case which required that steel-making capacity should be ​ concentrated in those areas where there was a natural case for having steel-making, and Shotton was not one of them. I was, rightly, overruled in that instance.

When we talk about the car, helicopter or machine tool industries, two sets of arguments operate at a political level. There is a powerful economic argument which says, “Let us go for the most immediately profitable solution which will bring the best return to the shareholders and give the workers in the industry the best guarantee of maintaining their jobs.” That argument often operates in favour of an American, Japanese or even an Arab takeover.

The other argument, deployed by Back Benchers on both sides of the House, says, “The best way to do it is to use public money to maintain a buy British policy, a subsidy, a purely British solution.” There will always be those who will argue for a national solution for whatever industry comes into the public domain of discussion.

What never operates is pressure to say, “Let us look for a solution which takes advantage of our membership of the European Community” or, at a lower level, “which takes advantage of our proximity to Europe—be it Switzerland or Sweden—which will enable us to construct an alternative future for this industry or firm and which may, in the short run, not offer the same advantages to the shareholders.”

It may not even offer the same security of employment to its workers, but it may offer long-term possibilities for industry and for the future of employment in Britain. That may not be available through a purely British solution entailing a permanent subsidy, or through an American solution involving a total takeover, with the risk that, when the chill winds blow, the Americans will close down their out-stations, as it were, and concentrate production at home—after all, they are subject to the same pressures—to safeguard jobs in their country.

There are no democratic pressures on the Government to exploit to the full our membership of the European Community to ensure the prosperity of British firms and safeguard British jobs. The pressures are all against such solutions. It is for the Government to see matters as a whole and to make the maximum use of our membership of the Community to achieve our objectives.

There should be much faster progress of the consolidation of the internal market. A substantial step forward could be achieved by stabilising the exchange rate through the exchange rate mechanism of the European monetary system. All of these matters are major policy decisions which can be achieved only in concert with our European allies. I know how difficult that is until we have a much improved decision-making process in the EC, which means moving away from the veto, but I shall not go into that.

There should be a Minister responsible for coordinating procurement and industrial policies to ensure that, whenever a controversial decision comes up, full weight is given to the European alternative. Several Departments are involved in that. The Department of Trade and Industry is one and the Ministry of Defence is another. Perhaps I should have enlarged on what is happening in the arms industry. Each country, by drawing a narrow specification of its requirements, has made it virtually impossible to achieve European co-operation. The result is that, one after another, we are equipping ourselves with expensive weapons which are unsuitable ​ for use by our allies. This is a NATO matter—the NATO group in Europe is not maximising the opportunities. The Department of Transport has a critical role to play, and the Treasury is also involved in matters such as I have mentioned.

If, in Cabinet, there was a Minister who could say, “Wait a minute. There may be a better but not so immediately attractive European alternative” we could achieve much more in the Community and in the European part of NATO to sustain jobs and preserve industries which otherwise face a pretty grim future.