Orders of the Day — Trade, Industry and Deregulation

Part of the debate – in the House of Commons at 7:57 pm on 24 November 1993.

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Photo of Liam Fox Liam Fox , Woodspring 7:57, 24 November 1993

After the successful summit in Brussels in 1988, my noble Friend Baroness Thatcher said: The creation of the single European market by 1992 is regarded by the British Government as the most important objective of the European Community". It was important then, but it is doubly important now. Conservative Members believe in the single market because we believe profoundly in the importance of free trade and we want Europe to be at the centre of a free-trading world. We believe in the power, supremacy and wisdom of the free market and that commerce—not politics—is the greatest unifying force available.

At present, Europe faces both a crisis and a challenge. There is a crisis of decreased competitiveness in world trade and an increase in regulations. It has a reduced share of the world market and a higher share of world unemployment. I sometimes think that we have an obsession with nationality in the Community. We talk of French models of Europe, or what the Danes or the Germans want. There are only two models: a free-trading Europe at the centre of a free-trading world—a Conservative Europe—or a socialist, harmonised, regulated, inward-looking Europe. Our challenge is to compete and create a meaningful place for Europe in the free trading world.

I congratulate President Clinton on his success in pushing through the north American free trade agreement. The agreement gives Europe both a clear signal and a clear warning. It signals the declining importance to the United States of European trade; it shows the President's personal increased commitment to free trade. It also shows Europe —as Europe must be shown—that it should rely on world competitiveness if it is to survive.

We must, as a European Community, reaffirm our commitment to competition, free trade and deregulation; we must make Europe work. There is no point in some of my colleagues, both in the House and outside, saying that they wish we were not in Europe, because we are in Europe, and we must make it successful. We cannot be in NAFTA, we are not on the Pacific rim, and the Commonwealth is not a viable trading entity. We must also make it clear, however, that Europe cannot survive on internal trade alone, as the French Government might wish to believe. We must trade outside.

We in the House of Commons must state both what we want and what we do not want for Europe. We certainly do not want what the Labour party wants—a social dimension. Beneath the veneer of concern for workers' rights expressed by Opposition Members is the fear—especially in foreign countries with socialist Governments —that deregulated markets will take a bigger share of the world market: a bigger share of what trade is going. The fear is that those countries will be left behind.

Increasingly, a number of European politicians are inclining to the British view of Europe, believing that we are correct—that we will secure more inward investment and a bigger share of world trade, because ours is the country that is deregulating in Europe. Sooner or later, they will realise that we are right and they are wrong. We must not be deflected by smokescreens that have been created to obscure anti-competitive behaviour.

One example is the proposed ban on tobacco advertising. Our competitors in Europe are desperate for such a ban. When they are willing to turn their backs on the millions of pounds of common agricultural policy money that have been used to subsidise tobacco growing in southern Europe, when they are willing to abandon their nationalised tobacco industries, when they are willing to use price mechanisms as successfully as we have in reducing tobacco consumption—then, just perhaps, they can have the gall to lecture us on the need for a ban on tobacco advertising. We must never be lured into a willingness to sacrifice our domestic industry simply to satisfy the nationalist aspirations of some of our European partners.

I believe that, not only in the United Kingdom but in the whole of Europe, the Prime Minister is seen to be increasingly far-sighted in opting out of both the European social dimension and—perhaps even more important—the single currency. Economic and monetary union is not about the politics of trade, the politics of prosperity or the politics of competitiveness; it is about the politics of political union. We in the United Kingdom can have no truck with that, because it is not at present based soundly on competitive free-trading principles.

If there is one area in which the challenge to Europe is seen particularly clearly, it is that of one of our leading manufacturing industries—the pharmaceutical industry. As in other sectors, the challenge is whether we can develop in a free market, allowing consumers maximum freedom while ensuring harmonisation, but only with the highest possible standards and the least pro-industry bias.

If harmonisation is to be acceptable, it must do two things. First, it must provide consumers—in this instance, health services—with the benefit of a greater choice of medicines becoming available more quickly. Secondly, it must benefit the industry with less duplication and inconsistency between the regulatory processes of member states, because that burdens business with unnecessary costs. Moreover, it must always be shown that harmonisation can be achieved at the highest possible level of quality, rather than at the lowest common denominator. In Europe's development so far, harmonisation has taken place at that lowest common level; that has simply meant the best trap being available for everyone, rather than the best being allowed to go forward freely.

In the pharmaceutical industry, we have seen a fairly constant evolution in legislation since 1965. Now, at last, Europe has made the quantum leap of allowing an application for a pharmaceutical licence to be in only one language rather than 12. The United Kingdom also welcomes the better patent protection that we have experienced recently. The United Kingdom sector has immense profitability and impressive research and development records, which must be maintained; the promotion of postgraduate education in our medical schools is also extremely important. We want to protect the areas in which our businesses are ahead. We in the United Kingdom must be in the business of protecting our market leaders, and allowing them to function in a free market without interference from substandard competition in Europe.

We are helping that process in two ways. One involves drug licensing. The current multi-state and concertation procedures do not work well. The new future systems legislation, with one regulation and three directives, will work much better—to the benefit of British companies. The European Medicines Evaluation Agency will also provide technical and administrative support, and will co-ordinate pharmaco-vigilance. Perhaps most important for our industry, it will monitor manufacturing sites.

I am delighted that the EMEA is coming to London rather than going to Spain, for example. I believe that we shall be rigorous in monitoring manufacturing standards, and that the problems that we have experienced with parallel imports will therefore be minimised. We do not mind competition, but we want fair competition, and we want proper quality when it is brought into our national health service.

The implications should include quicker and cheaper access to European markets for our business, with a single application giving access to all of them. There should also be cheaper medicines for the national health service, better medicines for our patients and a wider range in a shorter time scale. This is a real example of the direction in which Europe ought to be going.

We should not concern ourselves with the minutiae of political integration. There is a way forward for Europe. I believe that commerce is the most unifying force. If we allow commerce to take its course—and if there is a real case for further integration into Europe—the case will be made by the markets alone. If we try to force harmonisation and unification on the peoples of Europe for the sake of political timetables rather than what commerce, the markets, industry and trade need, we shall be potentially sacrificing all the gains that we have made so far in Europe.

As possibly the youngest Conservative Member in the House, I believe that the next generation will have the most to lose if we make mistakes now in the way in which Europe moves forward. If we hold true to our faith in a free-trading, deregulated Europe, that will give us our best chance of grasping the future for the next generation. We have everything to gain if we succeed, and no one but ourselves to blame if we fail.