Chris Patten – 2018 Speech on the European Union

Below is the text of the speech made by Lord Patten of Barnes in the House of Lords on 18 April 2018.

I am delighted to second the amendment moved by the noble Lord, Lord Kerr, and I will seek to do so as briefly as he did, partly because he was so comprehensive in the arguments for a customs union and partly because we chewed over many of these issues in Committee and we plainly should not deal with them again. So I will not go into the issue of Northern Ireland’s border with the Republic of Ireland, because I spoke twice on that in Committee.

I assume straightaway, because I have a regard for his intelligence, that the Minister responding to this debate is not going to suggest that the referendum result or the Conservative manifesto disqualifies us from proceeding in the direction suggested by the noble Lord. If I am wrong about that, I would be delighted to come back to it later. But there is one point made in the manifesto that I will dwell on for a moment—and, as clergymen occasionally say at the end of sermons, share with you all—because it allows me to bridge to the main argument we have today, which is about trade and trade opportunities for this country.

I confess to the House straightaway that I used to make my living helping to write manifestos, and so I have a certain regard for these things. The manifesto said at the beginning:

“People are rightly sceptical of politicians who claim to have easy answers to deeply complex problems”.

So I ask the House to turn its attention to what we have been promised on trade.

We are told by the Secretary of State for International Trade that a free trade agreement with the EU will be one of the “easiest in human history”. He also told us that, by the end of March 2019, the Government will have put in place or drafted or agreed up to 40 trade agreements with other countries. That is the backdrop. It seems to me that those propositions invite a little scepticism, and in a moment or two I will suggest to the House why that is the case.

I have a degree of expertise in this area for which I do not seek to make extravagant claims—I do not know as much about trade as the noble Lord, Lord Mandelson, does, and I know that expertise is a dangerous thing in the present climate. But I did, either on my own or with others, negotiate free trade agreements between the European Union and Mexico, Chile and most of the countries of the Mashreq and Maghreb region. We were part of the negotiation team for China’s accession to the WTO. We failed with Russia—for all sorts of reasons which the House will not be surprised about—and we made only limited progress with Mercosur, the San José dialogue and the Andean pact countries. So I know how difficult these things are, and some of the problems that will be faced in addressing the agenda mentioned by the noble Lord, Lord Kerr.

The first thing we have to do is secure our market in the European Union—50% of our trade. We then have to think about the 12% of trade with countries with which the European Union has concluded agreements already and the 8% with which it is negotiating trade agreements already. That adds up to about 70%. Of the remaining 30%, about half is with the United States, a quarter with China and Hong Kong, and the rest with everyone else.

How are we going to manage with the countries with which the European Union has negotiated deals already? I spent a particularly dreary afternoon on Maundy Thursday looking through the European Union-South Korea trade deal. It was dreary not because it is not a good deal—indeed, it is such a good deal that the Foreign Secretary not long ago boasted about the great increase in British trade with South Korea—but because it is even longer than a long day’s journey into night. It runs to 1,400 pages, 900 of which just list tariffs. The idea that you can simply Snopake the words “European Union” and insert “United Kingdom” and grandfather that trade agreement in nanoseconds—even nanoyears—is absurd.

First of all, the South Koreans know that we are the demandeur. They will know that we have a trade surplus with South Korea at the moment, which might make them a little resistant to being as helpful as they were with the European Union, which is, anyway, a much bigger market than the United Kingdom—500 million to about 65 million. There are technical issues as well that will be particularly demanding. I will not try to explain to the House—because I have only a vague notion of what it means—the problem with trigger volumes preventing surges of agricultural imports to a country. But that issue is one that will involve not just negotiations with South Korea but tripartite negotiations between us and the European Union as well as the South Koreans.

Even more important are rules of origin—something that used to be well understood by the Secretary of State for Exiting the European Union. Not long before the Foreign Secretary made a speech saying that there was no reason why we should not, after leaving the European Union, stay in the single market, the Secretary of State for Exiting the European Union pointed out that, on balance, he was in favour of staying in the customs union because, even though you would not then be able to do independent trade deals on your own, the issue of rules of origin was so important that we had to stay within the union so that that did not present problems for us.

Rules of origin is a problem that comes up straightaway when you look at the South Korea deal. Under rules of origin, each party is able to do without tariffs provided that up to 55% of what it is exporting is made in its own back yard. That is fine within the European Union, but the car industry in this country makes only 41% of the cars that we export in Britain. So straightaway, cars—and you can go down the list of tariffs—would not be able to go tariff free into the South Korean market.

The South Korean trade deal provides 99% tariff-free access after five years. It is a terrific piece of trade diplomacy. Incidentally, it provides that access after five years, but the trade deal that the South Koreans did with Australia does not come into full working order, even on a more limited range of goods, for 20 years—so it was a very good piece of negotiation by the European Union. The idea that we can just do that and all the other trade deals overnight, over a month or over a year, without any problems is for the birds. It belongs to the category denounced in the manifesto.

After we have dealt with the issue of the 12%, or maybe 20% by then, of the market that is covered by existing or future trade deals—“future” before we leave the European Union—between the European Union and other countries, we then deal with the three other categories of country. The first is China. China, admittedly, has done a trade deal with Switzerland and also with Iceland. Switzerland has done 38 trade deals with other countries, as opposed to more than 50 between the European Union and other countries. The deal between Switzerland and China is a very good example of how difficult it is to get into bed with an elephant. The Swiss have agreed hardly anything with the Chinese about services and nothing about cars, but they have accepted that China will have, for a number of goods, tariff-free access to Switzerland straightaway. In return, Switzerland gets tariff-free access to China after 15 years. So sleeping with elephants is a bit of a problem. I imagine that we would be looking to open up prospects for services—which, as the noble Lord said, is not an issue particularly involved here—but, apart from that, I am not quite sure what we would be hoping to get out of any future deal with China.

What about Australia and the Commonwealth? As the noble Lord said, one of the basic axioms in trade policy is that you double the distance and halve the trade. The notion that the Australians will open up their market further for us without making demands in return is, again, nonsense. They will ask for us to make concessions in the field of agriculture, which may take some explaining to small and medium-sized farmers in this country.

What about India? I noticed the other day that the European Union suggested that it might be easier to do a deal with India when we were no longer members of the European Union. In fact, we were always the back-markers when it came to negotiations with India. Why? Because we were concerned about opening up access to our services in India. Why? Because the Indians wanted in return for anything we were prepared to ask for greater scope for visas for Indians coming to this country, and we were not prepared to allow that.

Finally, the United States represents 15% of our market, but we expect Richard Cobden’s legatee, President Trump, to open up the American market to the United Kingdom’s exports. Are we serious? We would be pressing for opening up procurement with the United States, and the United States would be pressing for opening up procurement with us in the National Health Service. I am not going through chickens again because we had chickens up to our eyebrows in Committee, but I remember a wonderful speech given by my noble friend Lord Deben about chickens. I wish I could remember every word of it, but it was a pretty compelling argument on the difficulties of doing a food deal with the United States. President Trump will not be there for ever—but, in my experience, the Americans were not pushovers when it came to doing trade deals.

I have two last points. Is our ability to do trade deals or to export overseas held up by the fact that we are members of the European Union? When I last looked, Germany was a member of the European Union. Germany exports two and a half times as much to China as we do and exports more to India than we do. So the reason we do not do better in export markets must lie somewhere else. I do not agree with the point made by the Secretary of State for International Trade. I do not think that it is because British businessmen and exporters are—what was his expression?—fat and lazy. That is not why we do not do better. The truth is that between only 10% and 15% of companies in the country actually do serious exporting. They are mostly medium-sized or large companies—and guess what they want? They want the best access possible to the closest market. And where is that?

So I do not think that blethering on about global Britain, or pretending that we have not been global Britain for years, or repeating “The Road to Mandalay” whenever one is travelling, is going to make a spectacular difference to our trading opportunities. I think very strongly that we will not do any better than we are doing within the customs union, given that we start from a position in which we export to the European Union three and a half times as much as we do to the United States, five times as much as we do to the Commonwealth and six times as much as we do to all the BRICs combined.

So I support the amendment with some enthusiasm and I repeat what my noble friend Lord Hailsham said in Committee: namely, that there are times in one’s political career when what is alleged to be party loyalty comes way behind trying to stand up for the national interest. I intend to do that on this amendment and elsewhere on Report, and in doing that I think I will be repeating what I would have been able to say with the full support of my party for most of the time I have been a member of it.

Chris Patten – 2000 Speech on South East Europe

Below is the text of the speech made by Chris Patten, a then EU Commissioner, at the Foreign and Commonwealth Office in London on 7th July 2000.

Keith, Ministers, Ambassadors, Ladies and Gentlemen, Can I add my own warm welcome to those of Robin Cook and Keith Vaz.

As Keith has just said, since I became a Commissioner about nine months ago no subject has occupied more of my time and my attention than South East Europe, and rightly so. We have a formidable amount at stake there. The region in my judgment offers the defining test of our nascent common foreign and security policy, of our ability to close the gap between our rhetoric and brutal reality and of our ability to project stability, for me one of the primary goals of Europe’s external relations policy into our immediate neighbourhood. We know the history of the region. Its peoples began the last century as the victims of crumbling imperialism, endured the rise and fall of communism and ended the century with the descent at the hands of extreme nationalist politicians into wars of mediaeval barbarity. And the rest of Europe, well we must accept our share of the blame, from the Congress of Vienna to the fall of Vukovar. In the closing decade of the last century some suggested that the hour of Europe had dawned even as Sarajevo, one of the cradles of our civilisation, was being reduced to rubble. We failed to stop the bloodshed, but now we can make good in part on that failure by helping to build the peace, drawing on our own experience within the European Union.

That is certainly our goal, with the rest of the international community, including of course our friends in the United States. The commitment by the European Union alone is formidable, political, military, financial, moral. From the Krajina to Kosovo, from Podgorica to Pristina, we are supporting refugee returns, reconstructing homes and infrastructure, supervising elections, reforming the media, providing budgetary support to Governments, creating border and customs services, stabilising currencies, supplying emergency humanitarian assistance, building institutions from independent judiciaries to dependable police services. Over 28,000 troops from European Union Member States are serving in Kosovo, thousands more in Bosnia.

We have spent, and here there is a difference in addition between the Foreign Office and the European Commission, not conceivably for either the first or the last time, we think we have spent seventeen billion of European taxpayers’ money in the region since 1991 and this year – no dispute about this figure – we are spending three hundred and sixty million in Kosovo alone. Just worth noting that it is more than we are spending in the whole of Asia. It’s a high investment, a huge investment in peace and in stability. But lots of money and lots of troops don’t by themselves produce lasting peace. Building that requires a comprehensive strategy tailored to the needs of individual countries, but designed to meet the needs of the region as a whole.

IMPLEMENTING THE STRATEGY OF INTEGRATION

We have, I believe, such a strategy, accurately reflected in the title of this conference, to integrate as fully as possible the countries of the region into the European mainstream. We want to welcome them warmly into the European family by transferring not just resources from the European Union and its member states, but the values and principles that underpin the Union itself, democracy, the market economy, the rule of law, the values on which we have built our modern prosperity and extinguished old animosities.

And we have the tools to implement this strategy. The Stability Pact, led by my colleague Bodo Hombach, is fostering intra-regional co-operation and nurturing the process of Europeanisation. On the part of the European Union, our enlargement process, which includes Bulgaria, Romania, Hungary and Slovenia, is already helping to project stability more widely. Specifically for South East Europe we have the Stabilisation and Association process, a policy which aims to do just what it says, stabilise the region and associate it more and more closely with the European Union. Stabilisation and Association agreements offer substantial benefits, better trade access, formal political relations with the European Union and above all the prospect one day of membership of the Union.

The agreements will each include a so-called evolutionary clause holding out this long-term prize, the symbolic and practical importance of which it is hard to overstate in the region. That prospect was set out clearly by the European Union’s Heads of Government in Cologne last year, and most clearly to date at the Feira Summit last month, which declared that ‘all the countries concerned are potential candidates for European Union membership’.

But Stabilisation and Association Agreements, like membership of the European Union itself, don’t just bring benefits, they also entail obligations, to respect human rights and the rights of minorities, to respect the rule of law, to carry out economic reforms, to move towards free trade, to align legislation with European Union standards. In fact the agreements are a reform agenda in themselves.

ELECTORAL AND INSTITUTIONAL REFORM

At Lisbon in March, Javier Solana and I were given a remit to get a tighter grip of the overall European Union effort in the Balkans. To be frank, it had been Balkanised, to ensure better co-ordination and to push ahead with the process of integrating the region into European structures. We have made progress in the last few months. We held the very successful Stability Pact Regional Funding Conference in March which raised 2.4 billion for quick start projects with a regional dimension, much more than the 1.8 billion that we had hoped and expected. Now we must translate those pledges into projects on the ground. In Montenegro, which I have visited twice in the last few months, we are determined to make a stand. We are using all the means at our disposal imaginatively and visibly and we have dramatically increased the scale of our assistance in recent weeks to help the democratically elected government cope with enormous pressure from Belgrade, pressure which clearly is going to increase after yesterday’s events.

Working closely with the United States, the other major donor in Montenegro, we are, I hope, demonstrating that we have learnt the lessons of recent years by working to prevent a potential crisis. We are now providing 55 million euro to Montenegro this year, 20 million for infrastructure and institution building, 20 million in budgetary assistance to help pay pensions and social welfare payments, 10 million in food security and 5 million in humanitarian assistance. These are sizeable sums for a community of 600,000 people, but justified to assist, as I believe they are doing, in stabilising the situation.

In Kosovo we are making headway with an urgent reconstruction programme over the summer with our reconstruction agency concentrating on the key sectors of housing, power, water and transport. We are working round the clock to make a substantial difference before the onset of winter. I was in Kosovo last week and announced the signature of a major contract for the overhaul of the Kosovo-B power station.

We are pressing ahead with the stabilisation and association process, we launched negotiations with Fyrom in March, I was in Skopje last week, the start of the negotiations has itself added welcome impetus to the process of economic reforms there. We hope to start negotiations with Croatia after the summer, in direct response to the dramatic political change in Zagreb and the courageous efforts of the new government, a message that I hope will be heard by the people of Serbia. We are working closely with the Albanian government to help it prepare for future negotiations and we have set out very clearly for the authorities in Bosnia Herzegovina in the form of a road map of detailed measures what they need to do to enable us to start negotiations with them.

ECONOMIC INTEGRATION

Integrating the region politically and institutionally is important, but equally important is economic integration. The oldest form of international cooperation is trade. Communities that trade more closely and more openly together, grow closer together. The single market is a prime example of that. Open markets, open minds. That is why I believe passionately that the European Union should display vision and boldness in opening up its markets to the Balkans. It is, I am convinced, one of the best and most immediate practical things that we can do to make a real difference fast.

In the last few weeks the Commission has put forward radical proposals for opening up the European Union market to Balkan trade. I was delighted that Robin Cook referred to them. Our proposals for asymmetric one-sided trade liberalisation would open the European Union market completely and immediately to industrial products from Bosnia Herzegovina, Albania and Croatia, as well as Macedonia. They do the same for agricultural goods, except wine, beef and some types of fish. They also cover Kosovo. They are tied to greater trade access between the countries of the region themselves. In the case of Montenegro, we have proposed a special provision to allow them to export their aluminium duty-free to the Union, aluminium being one of Montenegro’s most valuable exports.

These proposals, drawn up with my colleagues, Pascal Lamy, the Trade Commissioner, and Franz Fischler, the Agriculture Commissioner, and with the backing of the whole Commission, would provide a turbo charge to economic activity across the region, they would boost prosperity, create jobs and ultimately reduce dependency on European Union aid. From the European Union’s point of view the costs will be minimal, total European Union imports from these countries account for just 0.6% of our total imports and in the case of agriculture just 0.16%. I say would because the decision lies with the member states. I hope that Ministers who are currently examining our proposals will endorse them rapidly and that we can put them into effect without delay.

Let me be clear about this. We got these proposals through the European Commission in pretty well record time, it wasn’t easy but we are all committed to them. Now I hope that the member states will endorse them, if not equally rapidly, at least as soon as possible. We have got a summit, proposed by the French Presidency, in the autumn. I think it would be an extremely nice gesture if by the time of that summit we were able to say that we had opened our markets to the products of the region, otherwise I think we may have some explaining to do.

I hope that our trade measures will be met by a redoubled effort by the countries of the region to press ahead with economic reform, with the establishment of a fair and open regulatory environment, compatible with European Union practice, with transparent privatisation, with structural economic reforms. The investment compact is a valuable contribution to this process of achieving an attractive investment environment, but it is not enough to get the right laws on to the Statute Book, they have to be enforced fairly and uniformly too.

I hope too that the countries of the region will work with the Union to maximise the opportunities offered by the information society, the opportunities offered by e-commerce which is blind to ethnic and political division and which can allow economies to leapfrog less technologically advanced rivals. The Internet is a powerful tool for creating open societies and open economies. It is already helping the independent media in Serbia, but Internet access in the region is still patchy. In Croatia the marketing value of a quality website is increasingly appreciated. But elsewhere in the region those with Internet access are thin on the ground, due not just to the lack of availability of computers, but poor telephone infrastructure. We need to address these issues as part of our overall reform efforts, for example by encouraging telecoms liberalisation, by getting the regulatory environment right and by making sure that young people and older ones too are equipped with basic IT skills.

EU FUNDING

Many of you work with EU funding. Let me say a word about the action we are taking to speed up its delivery and effectiveness. We have now put forward proposals for root and branch reform of the way we run things. I want to demolish our reputation for late delivery and chronic inefficiency, that means doing away with the ludicrous procedures that tie us and our beneficiaries in Kafkaesque knots.

It means devolving authority to qualified people in the field like the best aid programmes do, and it means providing enough staff to get the job done. The Commission has 2.9 staff for every 10 million of aid that we manage. The figures in member states range from 4 to 9. The figure in Britain, where dwells one of our most enthusiastic critics, is 6.5. So my message is simple. Give us the people, let us reform and we will do the job. Otherwise, to be candid, we will just have to cut back dramatically on the scale of our programmes, but we certainly can’t go on as we are. Where we are implementing reforms it is already making a difference.

In Kosovo for example, while the overall structure within which it has to work is far from perfect, our reconstruction agency is delivering impressive results. It does have the resources it needs to perform well. As a result the money is being disbursed, the contracts are under way. 54% of our funds for this year had been contracted by the end of May, 94% in the housing sector. In my meeting with NGOs in Pristina last week several praised the agency for its speed and efficiency. This is not something to which I am generally accustomed. The European Parliament delegation that visited Kosovo in April was impressed and concluded that there was no problem in terms of absorption capacity for the substantial sums that we judge necessary to fulfil our share of the European World Bank Needs Assessment.

In Sarajevo, where likewise we have devolved authority to our office to sign contracts and disburse funds in Bosnia without constant reference to Brussels, and where we have beefed up their staffing, we are getting rather better results. I want to build on this by introducing a new regulation which will be called, after some difficulty, Cards, governing our assistance to the region. It is simple, light and designed to let us run programmes under the broad guidance of the Council of Ministers, but without the constant micro-management and second guessing by member states’ officials.

We have plenty to do in the coming months, we have elections in Albania, Bosnia and Herzegovina, in Fyrom and probably in the FRY. We will work to try and ensure that those elections, including in the FRY, strengthen the hands of democrats and reformers. We have got to implement the agenda agreed at the Feira European Council last month, especially in the justice and home affairs field, working to combat organised crime.

SERBIA

I warmly welcome therefore President Chirac’s proposal for an EU-Balkan Summit in the autumn to take stock of our efforts in the region. I am particularly pleased that it will be held in Croatia, which will advertise widely what a difference fresh, decent and sensible leaders can make very fast. I hope that that message will get through to the people of Serbia because for the time being their country stands needlessly apart from this positive agenda. There can be no true and lasting solution in South East Europe without Serbia.

Ten million people, crucial geographically, potentially the most productive economy, but for now Serbia drifts on isolated and alone while the rest of Europe passes it by. We look forward to the day when we can welcome Serbia to the fold and we will continue to do all we can to hasten its arrival, by tightening the screw on the Milosevic regime while lending our support to the opposition, to civil society and to the independent media. We have strengthened the financial sanctions and we are maintaining the visa ban. Javier Solana is working with us and others to promote closer ties with civil society, with NGOs, with the churches and so on, and by promoting links between Serbian and European Union municipalities. We have stepped up our support to the independent media to enable the Serbian people to hear the truth about what is happening in their country and its neighbours.

I very much hope that the Commission will be able to launch within the next few weeks a new programme entitled Schools for Democracy in Serbia to provide small scale infrastructure improvements to schools in all opposition-controlled municipalities. It will supply visible help, blackboards, basic repair work, new desks, books and so on. This will follow on from our very successful Energy for Democracy programme over the winter, launched with the help of the G17 Group in Serbia which helped to keep the heating and lighting on in some opposition towns through the winter. It was an extremely difficult programme to run, but I am delighted that it went well and has just received an endorsement from Europe’s Court of Auditors.

CONCLUSION

I hope it is clear from all I have said what a central element our efforts in South East Europe represent for the European Union, for the European Commission and for this Commissioner. Our commitment is starting to make a real difference, allied to the will and the commitment of people of goodwill throughout South East Europe. We have got to remain vigilant for new flashpoints, new crises, but for the long term I am an optimist. There are more grounds for Hope – hope with a capital H – in South East Europe today than there have been for many years. Croatia, Macedonia, Bosnia, Albania, Montenegro are all at varying paces and in varying degrees now joining the European mainstream. Countries and peoples are starting to work and trade with each other again, seeing each other as markets and partners instead of political problems.

We are forging a ring of democracies all around Serbia, a mutually reinforcing network of increasingly stable and open societies, growing in confidence all the time, less vulnerable to the malign influence of Belgrade, more and more able to demonstrate to the Serbian people that there is another road open to them – the road to Europe. This conference will I hope mark another small step along that road.

Chris Patten – 1979 Maiden Speech in the House of Commons

Below is the text of the maiden speech made by Chris Patten in the House of Commons on 14th June 1979.

I am grateful to you, Mr. Deputy Speaker, for calling me this evening. I am even more grateful to the electors of Bath for giving you the opportunity to do so.

It is a custom that in getting off the mark in this House one should attempt to avoid controversy. That is a daunting challenge for most of us. I have heard and read a number of maiden speeches over the last two or three weeks and I must say that the word “controversial” seems to be defined in a fairly relaxed way. The first I heard in this House began with a colourful attack on the Iron Lady, whoever that may be, and went on to give some crisp advice to Chancellor Schmidt on how to run the West German economy, for which I am sure he was very grateful.

I shall try to stay within “the meaning of the Act” and to avoid controversy. I begin therefore with the entirely uncontroversial remark that I have the honour of representing the most beautiful city in England. In doing so, I follow a notable servant of this House, Sir Edward Brown, who represented Bath for 15 years and previously worked at every level in the Conservative Party, ultimately becoming chairman of the national union, which is a slightly different body from the national executive of the Labour Party. He was a diligent Member of Parliament. He worked extremely conscientiously for his constituents. In a few weeks, I have already come across countless examples of his courtesy and consideration. He was a hard worker in this House where he chaired a number of Committees, and he spoke knowledgeably in the Conservative Party about trade union matters. I hope that I shall be able to match his service to the party and the country. In saying that, I am all too aware of the fact that Bath has been called the graveyard of ambition. If this is indeed the case, although I am sure that none of us would admit to any greater ambition than the chance of representing our constituency in this House, then, to mix metaphors, I cannot imagine anywhere better to hang up one’s boots.

I shall not take hon. Members on a verbal guided tour of Bath. I am sure that they will excuse that. I would not want to deter any of them from visiting Bath, if they have not already done so. I would say quickly, in the hope that the chamber of commerce is listening, that if hon. Members come to Bath I should be grateful if they would stay in Bath rather than Bristol.

Bath is not a museum piece. It is an extremely busy city, although not quite as busy as we would like following the rise in unemployment in the last few years. It depends a great deal for its prosperity on a number of fine engineering firms. It would not be an exaggeration to say that those firms and my constituency will depend a great deal for their future prosperity on this Budget.

I suppose that one can easily over-estimate the impact on the economy of what my right hon. and learned Friend the Chancellor of the Exchequer once called, in a speech to which I shall return later, an “archaic ritual”. Nevertheless, our success in the future hangs very much on some of the decisions which the Chancellor announced on Tuesday. He had an unenviable job, first—and I must try to avoid controversy—because of a less than wholly satisfactory inheritance. Hearing so many speeches from the Opposition Front Bench, such as the speech of the right hon. Member for Leeds, East (Mr. Healey) yesterday, about the state of the economy on 2 May, I sympathise very much with the story of the late Lord Avon’s father who was once seen throwing the family barometer out of the front door into the pouring rain, shouting after it “Set fair, eh! Get out there and see for yourself.”

We must also sympathise with the Chancellor since he has confronted in this Budget what he described at the beginning of his statement as the crisis of decline, which is no less real for having become recently the subject of increasingly fashionable discussion. If he is right—I think he probably is—that we are poised somewhere between relative and absolute decline, and if he is also right—again, I agree with him—that the decline is not irreversible, the burden on his shoulders these last few weeks has been considerable. One of the troubles is that many of us who agree with him about the seriousness of the present situation are reluctant, or have been reluctant, to accept some of the changes that are necessary to do anything about it. Like St. Augustine, we have all wanted to be virtuous but not quite yet. I plead guilty to that charge.

But it is difficult, I should have thought, to make out an overwhelmingly convincing case for the status quo. If one is to change things, one has to start at some time and somewhere. I am sure that the Chancellor was right this week to take his courage, and ours, in both hands and plunge ahead.

My right hon. and learned Friend identified correctly three main tasks. First, as the noble Lord Robbins once said, one can be agnostic about the precise effect or incentives of given rates of tax. But even most Labour Members, I believe, would agree that a 100 per cent. rate of tax would have a pretty serious effect on incentives. It is therefore not very sensible to argue that some slightly lower rate than 100 per cent. has no effect whatever.

I was pleased that the Chancellor chose in his Budget Statement to place so much emphasis on restoring incentives right across the board. I should like to be able to turn to some of the arguments advanced by my pair, the hon. Member for Birkenhead (Mr. Field), about incentives. Alas, he is not here, and I have insufficient time, but I look forward with relish to returning to that topic on some future occasion.

There is obviously some risk in making such a substantial shift from direct to indirect taxes when the underlying rate of inflation is increasing. I am sure, however, that the Chancellor was, on balance, justified in taking that risk. I am pleased that in doing so he has seen that pensioners are protected from the one-off increase in prices that will result from the rise in VAT. I hope that he will also encourage the Treasury to be as imaginative as possible in thinking about the impact on VAT on the performing arts, particularly the theatre.

The second task for the Chancellor was to reduce the public sector borrowing requirement this year and in subsequent years. He has spoken in the past about the advantages of acting with “all deliberate speed.” It was perhaps a pity, but inevitable given the fact that the PSBR was much larger than anticipated, that he had to act so rapidly on public expenditure. One of the problems of acting so swiftly is that sometimes the cuts one makes in the short term discredit the important longer-term exercise of getting public expenditure under firm and lasting control. On the whole, the Government seem to have avoided that situation. I am grateful that what would have been a departmentally easy cut in the Department of the Environment has not been made in the programme—which is already hard-pressed—for conserving our historic heritage. I am grateful that that programme has not been cut.

One easy cut, I suggest to my right hon. Friend is, the “pork barrel” scheme for reallocating civil servants’ jobs from one part of the country to another and particularly the eccentric, extravagant and, what I believe is the vogue word, “reckless” scheme for moving 800 or more jobs from Bath to Glasgow. I am pleased that the Minister of State, Civil Service Department told me in a written reply at the beginning of the week that that scheme is to be reviewed. I must tell him that I would find it very difficult to explain to my constituents why I had voted in favour of the Adjournment motion for the Summer Recess if that review had not been completed by the end of July.

One other thing which I hope Ministers will remember in thinking about public expenditure is the speeches they made in Opposition about the importance of increasing parliamentary control over the Executive, about overhauling our antique budgetary procedures, about ending, in the words of my noble Friend Lord Cockfield, the divorce between Government spending plans and parliamentary control. In a very good speech to the LSE in 1977 on this subject, the Chancellor himself said: Whether as Ministers or as parliamentarians, it is we who are in charge. Only we can change the system. Quite so.

I hope that the Government will show that they are as keen on those issues now as they were before the election and, for example, will give the proposals of the Procedure Committee a fair wind when they are debated next week.

The third task that the Chancellor and his right hon. Friends have had to deal with is the establishment of a more balanced relationship between the trade union movement and the rest of society. In that context I was a little disappointed that there was not in the Budget more encouragement of ownership through profit-sharing schemes. I am also disappointed that we have not yet heard much about the Government’s thoughts on the improvement of bargaining structures.

Obviously there is agreement on both sides of the House that the Budget will have some impact on the attitudes taken during the next pay round and the one after that. The CBI has put forward imaginative proposals for improving pay bargaining. It would be nice to have heard the Government’s thoughts on that, Perhaps we shall hear them later in the debate.

If anyone else has any better ideas than the CBI about how to reconcile pay moderation and freedom, I am sure that we should be delighted to hear them. Among other things, we need some kind of forum where the major participants in the economy can sit down calmly to consider the implications for prosperity, as well as for unemployment and pay bargaining, of the Government’s fiscal and monetary policies. Those words were written by my right hon. and learned Friend the Chancellor and by the Secretaries of State for Employment, Industry and Energy and the Paymaster General in a pamphlet called “The Right Approach to the Economy”, published a couple of years ago. They were absolutely right then and I think that they are right now.

I was disappointed to see an article on the back page of the Financial Times this morning suggesting that Ministers are not thinking in that way any more. I imagine that that suggestion could only have been a jeu d’esprit by the labour editor of the Financial Times. I cannot imagine that it represented the Government’s real intentions.

The Chancellor has set out in his Budget on a long and arduous road. None of us on the Government Benches believes in “hey presto” economic strategies or that one Budget can turn everything around. But we do believe that there are more sensible and less sensible ways of steering the economy. The Chancellor has started this week in a characteristically sensible way. I am sure that we all wish him at least as long in the job as his predecessor has had. Judging from his first Budget, whoever eventually succeeds him will have a much easier and more agreeable task than he has had this week.