HC Deb 24 July 1956 vol 557 cc210-4
Mr. H. Macmillan

With permission, I will now make a statement in reply to Questions 38 and 58.

As indicated in the agreed statement issued at the end of the meeting, Commonwealth Prime Ministers were informed of current proposals regarding the development of closer economic co-operation in Europe. The House will not expect me to give any details of these discussions. Nevertheless, I am glad to have the opportunity of informing the House about the proceedings of the Ministerial Council of O.E.E.C., which took place in Paris last week.

We had useful talks on a variety of subjects, including nuclear energy, agriculture, the general economic situation in Europe, and trade questions. Copies of the various resolutions will be placed in the Library.

On the liberalisation of trade, the Organisation agreed to prolong the decision providing for liberalisation of 90 per cent. of trade until the end of 1957. In our discussion on tariff questions in general we had all, of course, to take into account an important new factor in the European scene, that is, the plan of the Messina group of countries to set up amongst themselves a common market in the form of a customs union. On the proposal of the Secretary General, it was agreed to study possible forms of association between the proposed customs union and other member countries of O.E.E.C. The study group which we set up for this purpose is to take into account the possibility of creating a free trade area, to include the customs union itself and other members of the Organisation. If the report of the study group holds out any prospect that substantial progress can be achieved along this line before the end of 1957, then the group will be told to press on with its work as rapidly as possible.

At the same time, the Organisation had already been discussing the possibility of reducing tariffs on a range of goods which are called "European commodities." The Organisation was not able to agree on approving certain specific proposals put before it in this field, but it has arranged for them to be further studied. It has further decided that if the study group on the relationship between O.E.E.C. and the plans of the Messina group does not offer the prospect of substantial progress, then it will ensure that the European commodities plan will be completed without delay, so that it can consider whether it could be accepted and put into operation by 1st January, 1958.

I ought to make it clear that no country is committed at this stage by the action which we have taken in this wide field of possible action; personally, I do not regard this work as any less important or significant on that account.

Mr. J. Edwards

I recognise the importance of this question and that it deserves to be discussed fully some time, but at this stage may I ask the right hon. Gentleman whether the fact that O.E.E.C. is setting up a study group to consider possible forms of association between members of the proposed customs union and other countries in any sense implies that Her Majesty's Government have already decided that consideration cannot be given even to the possibility of the United Kingdom being a member of the customs union?

In that connection, would the Chancellor please bear in mind the widely held view upon the subject of the common market, as expressed in two Motions standing on the Order Paper?

[That this House expresses agreement in principle on the establishment by stages of a common market in Western Europe and urges Her Majesty's Government to accept the invitation to participate in the negotiations currently taking place on the subject between the representatives of Belgium, France, the Federal Republic of Germany, Italy, and the Netherlands, with a view to ensuring that if, or when, any treaty is signed the way will be open for British participation in the common market on an acceptable basis and in accordance with the interests of the Commonwealth and Empire.]

[That this House, while recognising that there would be both advantages and disadvantages for this country in membership of the proposed common market, and that it would be necessary for the United Kingdom, as for each other country, to seek appropriate compensating concessions for the risks and sacrifices involved (such as Imperial Preference), none the less urges Her Majesty's Government to accept the invitation to participate in the negotiations among the other six member countries of Western European Union and endeavour to negotiate arrangements which would make it possible for the United Kingdom to participate in the advance towards a common market without detriment to the interests of the Commonwealth.]

Finally, will the Chancellor state by what date he expects the study group to be able to report?

Mr. Macmillan

I have two separate responsibilities in Paris; one of which, as Chairman of O.E.E.C, is to try to guide the work of O.E.E.C. into useful collaboration with what are roughly called the Brussels Powers, or the Messina Powers. That I attempted to do, and the Organisation agreed. The position of Her Majesty's Government is completely open. We welcome these studies because it is only in the light of them that we can see by what method—all methods being open in principle—we can most usefully co-operate.

Mr. Rippon

I welcome my right hon. Friend's encouraging statement, which, I am sure, will give general satisfaction, but can he say a little more about the consultations which took place with the Commonwealth Prime Ministers? I understand that no details can be given, but were they merely informed, or were their views sought and obtained? In particular, were they consulted about the decisions taken at the recent O.E.E.C. meeting?

Mr. Macmillan

It has always been the practice for individual members of the Commonwealth Prime Ministers' Conference not to go beyond the statement or communiqué which is issued at the end of the meeting. My hon. Friend must rest assured that that statement meant what it said, and that there was a discussion on this matter from the Commonwealth point of view.

Mr. Healey

Can the Chancellor of the Exchequer say whether it is true, as reported in the Press, that he announced that Britain would not join in the O.E.E.C. organisation for co-operation in the peaceful uses of atomic energy? If it is true, can he say how he reconciles this position with the speeches which he used to make in Strasbourg as the champion of European unity?

Mr. Macmillan

It is very easy to do that, because that statement is not true. If he will read the resolution and the text of the statement made by the British Government, he will see that we went a very long way to make available both all the knowledge we had and a great many of the resources we had, and even to co-operate in the making of a particular kind of plant.

Mr. McAdden

When my right hon. Friend is being encouraged to lend support to the idea of a common market in Western Europe, will he bear in mind that there are still some people who believe that the best place for a common market is the Commonwealth?

Mr. Macmillan

Yes, Sir, and it is. Everybody knows that the problems before us are very difficult and complicated. We have to try to reconcile, in our commercial policy, all these interests—the long-term, long-standing and traditional interests and connections that we have with the Commonwealth—with the new possibilities of an expanding market in Europe. I do not say that they can be solved, but I do say that it is right for us to give every possible assistance, both through O.E.E.C. and through the Commonwealth, and approach this subject with an open mind.

Mr. J. Edwards

Will the Chancellor be good enough to answer my last supplementary question? When does he expect the study group to report?

Mr. Macmillan

I do not know. No doubt we shall have an interim report, probably by the end of the year. But it was made clear that there are two methods of approach. One is to consider how the Messina Powers and the Eleven can combine, and the other is the reduction of tariffs. What was made clear, and will be seen in the statement, is that one is not to be used to stop progress with the other. Therefore, if there is not sufficient progress upon one set of studies, that is not to be used to bar the prospect of a lower tariff arrangement, which is the other possible method of solving the problem.

Mr. Bowen

Can my right hon. Friend inform the House of the specific proposals referred to in his statement in relation to European commodities?

Mr. Macmillan

As I say, the method of advance urged by some countries of a low tariff on European commodities was not acceptable to the Organisation as a whole. I did not say "we"; I said "the Organisation". I carefully said that "the Organisation" was not able to agree on the proposals put forward by certain countries and, therefore, it was resolved to continue further study of that method of approach.