§ 4.28 p.m.
§ The Secretary of State for Foreign Affairs (Mr. Selwyn Lloyd)
I beg to move,That this House recognises the need for political and economic unity in Europe, and would welcome the conclusion of suitable arrangements to that end, satisfactory to all the Governments concerned.The Motion seems to be simple and clear, but I could wish that it were as easy to make a simple and clear speech about it. The issues are complicated and public discussion of them has suffered from over-simplification. I will try to avoid that and also to avoid being over-complicated.
The first matter mentioned in the Motion is that of European unity, the need for political and economic unity in Europe. I want to make certain points absolutely clear. We in Britain regard ourselves as part of Europe. By history, by tradition, by civilisation, by sentiment, by geography, we are part of Europe. At the Council of Europe in Strasbourg, in January, I said that the fact that the English Channel had not been crossed successfully in war as often as had some other physical barriers in Europe did not disqualify us from European status. The fact that our Queen is Head of the Commonwealth and that we are a member of that association does not disqualify us from European status.
I speak not only of Western Europe. It is true that at the moment there is a tragic division between East and West, a line which runs from Stettin to the Balkans. It is only too true that there are now ancient parts of Europe, formerly closely tied by culture and religion to the centre of Europe which are now on the other side of the Iron Curtain. Russia herself has played a great part in European history. We must accept the fact that many countries of Europe are now temporarily estranged, and, facing reality, in speaking of Europe in my speech today, I shall, for the most part, be referring to Western Europe.
My first point is that if Britain were to be regarded as outside Europe we could not fulfil our complete rôle in the world. Nor do I believe that Europe would be complete without us.
1100 My second point is with regard to the European Economic Community, the Six. We have, from the beginning, welcomed the formation of the Community of the Six as a step towards European unity. We welcome the economic strength and the political cohesion that the Community of the Six is bringing about. In particular, we welcome the new relationship which it embodies between France and Germany. But although we have welcomed the Six from the beginning, we have always been conscious of the danger that it might lead to a political division between us.
That point has repeatedly been made, and I will not elaborate it today except to say that in the present international situation everyone must be increasingly aware of the pressing need for unity in Western Europe. In seeking to avert this division we do not wish to affect the cohesion of the Six as an independent entity, or to prejudice the achievement by the Six of their political goal.
Faced with this problem of the possible division between the Six and the rest of Europe, we tried to solve the problem by putting forward, in 1957, proposals for a European Free Trade Area. We did this with the support of many Governments. Indeed, we did it with the support of all the Governments of the Six. I was repeatedly assured by my French colleagues at that time that they favoured that sort of plan, although they were quite frank about the difficulties which they thought they would have with their Parliament over its ratification. But each of the Governments of the Six declared that they thought that the complement to the Treaty of Rome was the formation of a Free Trade Area in Europe.
However, as we know, in the event those negotiations failed. The plan did not prove acceptable to the Six, although there was a wide measure of support for our proposals. I think that we have to recognise that fact and realise that another set of proposals of the same nature have no chance of acceptance. I think that it is important to make up our minds on that point if we are to make progress in the future.
Because of the failure of those negotiations, it was natural that some countries outside the Six, who, during the negotiations, had shown that they were able 1101 and willing to adopt free trade arrangements, should act together, and this led to the formation of the European Free Trade Association—E.F.T.A.—by the Stockholm Treaty.
We see three advantages in E.F.T.A. First, it is an association of countries with populations of over 90 million, with high living standards, with highly developed industrial and agricultural skills, and it is in itself a powerful economic unit with great opportunities for expanding trade. Secondly, the formation into a group of these seven European countries has helped to preserve cohesion in the European economic system. I am sure that that will be proved to be so in any forthcoming negotiations. Thirdly, the successful negotiation of the Treaty of Stockholm shows that it is possible for us to belong to a purely economic European association consistent with our Commonwealth membership.
Therefore, on this first matter, which is really the first part of the Motion, I state categorically our wish for a united Europe, politically, economically and commercially. But there are different ways of attaining this. Some people talk of integration, others of federation, others of confederation, and others, again, of association. One is not any the less a good European because one prefers one method rather than another. Our purpose is a united Europe, and we accept the need for some political organisation as an element in this unity. That being our objective, what are the problems and how should we seek to proceed?
First, the Commonwealth. I do not think that I need develop in this House the virtues and values of the Commonwealth relationship, the friendship and constant intimate exchange of views between peoples of many different races, amounting to a quarter of the population of the world. I believe that this relationship in the Commonwealth and this successful development of a multiracial association, is of great advantage not only to us but, also, to all our friends in Europe. The strength and cohesion of the Commonwealth is in part, buttressed by its economic pattern, and we have a duty to see that no action of ours in the economic field endangers the 1102 immense political potential of this association.
That is where the first problem arises, because acceptance of a common tariff of the Six, as laid down in the Treaty of Rome, would be the end of the principle of Commonwealth duty-free entry of goods and commodities. It would mean not only putting a tariff on the Commonwealth, but giving free entry to European producers and so a preference to them over the Commonwealth producers except for items on which the common tariff is nil. This would affect a large part of the Commonwealth sales in this country.
If, in addition, we adopted the common agricultural policy of the Six, embodying protection not only by tariffs but by various other means, this would be a further blow to one of the most important parts of Commonwealth trade. That is the first problem that we have to face. I do not for a moment say that it is insoluble, but it is a formidable problem.
The second problem is agriculture. The nature of the common agricultural policy which the Six propose, just as the kind of agricultural policies currently in operation in the individual countries of the Six, is basically different from our agricultural policy in the United Kingdom. Broadly speaking, theirs is a system under which the consumer pays the cost of farm support directly through the price of food in the shop. Ours is a system under which the cost of farm support is met directly by the Exchequer, and, therefore, by the taxpayer. As a result, we have much lower consumer prices in general than the Six. Indeed we have cheaper food than most countries in the world.
A switch to the system proposed by the European Commission could have a severe impact on both the consumer and the producer in this country, and the extent of that impact could be uneven for different farm products, and its effects unpredictable. I think that a switch would involve for us fundamental readjustments in the farm support system, which, I think, has been recognised in this country as being best suited to our particular conditions. This is a problem which we shall have to consider very carefully before we make changes.
1103 The third matter is our commercial relations with third countries. Under the Treaty of Rome, apart from the question of the co-ordination of common policies within the Community, by 1970 members would have to abandon their direct commercial relations with third countries. In our case that would mean, amongst others, the countries of the Commonwealth, and the political consequences of such a development would be far-reaching. We have to remember that we do 84 per cent., I think it is, of our trade with countries outside the European Community, but, by their rules, by 1970 we would have to abandon our direct commercial relations with third countries.
There is also the question of the position of E.F.T.A. We attach great importance to our membership of that Association and we shall always act in the closest consultation with our E.F.T.A. partners. In loyalty to them we must ensure that any plan to secure political and economic unity in Europe takes care of their interests and their preoccupations and is formulated after full discussion with them.
The last problem I wish to raise is that of institutions. It is no use trying to burke this issue and to say that there is not a problem, because there is. What is not yet clear is how the institutions of the Six are to work out. For us, with our traditions in this Parliament, with the contribution it has made to Parliamentary democracy, if the plan is to make this Parliament subordinate to some higher Parliament, it is no light matter.
The relationship of Parliament to other international institutions requires very careful consideration. It is difficult to be more specific in the absence of knowledge as to the precise powers of such a higher Parliament, or Assembly. I can say only this: if the higher Parliament were to control the whole social and economic life of the people, the fiscal policies, the financial systems, the commercial policies, I think that we, as Parliamentarians, would have to think very carefully about what our position would be. The abdication of our powers on these issues is not a matter lightly to be brushed aside, and—
§ Mr. Lloyd
I hope that the hon. Gentleman will permit me to continue with my argument.
These are 'the problems—I wish to say this, and then I will give way to the hon. Member—and in presenting them I have stated them rather as problems confronting the United Kingdom Parliament. I admit that there are other problems regarding these various issues or difficulties which confront the members of the Six. I do not wish to suggest that this is a one-sided argument and that we are concerned only with our own difficulties and problems. I say frankly that over every one of these issues there are problems concerning every member of the Six.
I have not been trying to put forward a one-sided statement of the position. I realise that in any meeting on these matters there are similar problems involving the other members of the Six.
§ Mr. Mulley
I am obliged to the right hon. and learned Gentleman for giving way to me. I think that he is absolutely right to stress the British point of view in these matters. But I am not clear from where he gets the proposed powers for this higher Parliament, whether there is anything in the Treaty of Rome or in discussions amongst the Six about a super-Parliament of this sort. Is it not a fact that if we came in under the existing arrangements we shall be in a much better position to participate in future developments than if we stayed out and allowed those developments to be made without, as the right hon. and learned Gentleman has said, the benefit of our experience?
§ Mr. Lloyd
There is a great deal in what the hon. Gentleman says. But I qualified what I said by saying that it is not yet clear how 'the institutions will be developed. He must be aware that there is a strong view that there should be a form of federal Parliament. I am saying that we must not burke the issue regarding these institutions. I have not pronounced against us going into some form of European institution, but we have to be careful what these institutions are, what they are to do and what would be our responsibilities in the matter. I have tried to state the problems and issues to be faced. I do not think that they are insoluble; they have to be 1105 solved if we are to conclude these suitable arrangements which are referred to in the Motion.
I do not see how anyone could sensibly advocate that we should now say that we will go into the Common Market on the best terms we can get, sacrificing, if necessary, all those other interests. In my view, to say that, to come in unconditionally on the best terms we could get, would be a completely irresponsible attitude.
I may be told that no one is suggesting that. It may be said that what we should do is to express a readiness to start negotiating on these matters with the Six, to see whether we can get acceptable terms. To that argument, I would reply that Her Majesty's Government, in company with our E.F.T.A. partners, have repeatedly expressed a readiness to discuss these long-term problems with the Six. Bu the fact must be faced, that in the various discussions on these matters in recent weeks the Governments of the Six have made it clear that they are not at present prepared to discuss long-term solutions.
§ Mr. Lloyd
—and I regret this.
The reasons they give are these. They say that the Six have to reach agreement on common policies in many fields and they have to solve many practical problem; in the implementation of the Treaty. Their determination is to push forward with the Treaty and because of that they hesitate to consider the new complications and difficulties which would arise at this stage with, so far as we are concerned, the whole range of relationships, whether in the loosest possible association or in full membership. They have said definitely that at this moment they are not prepared to enter into negotiations on these long-term problems. In com- 1106 menting on that I would say that there is not too much time at our disposal if we are to avoid a division of Europe.
§ Mr. Roy Jenkins
Does the right hon. and learned Gentleman mean, as he certainly implied, that we had suggested to the Six, whether formally or informally, that we should be prepared to accede to the Treaty of Rome if negotiations could be opened which would make it easier from the Commonwealth point of view for us to do so?
§ Mr. Lloyd
That reveals the mistake of giving way in such a debate as this, because that was to be my next point. I have dealt with the paint that we should not come in unconditionally—to me, that would seem absolutely irresponsible—and that, regarding negotiations on long-term problems, the Six have said that they are not ready to negotiate.
Then it will be suggested that if the Six persist in this attitude Her Majesty's Government should announce their own position; that the Government should give what is called "a lead" and put the Six in the position of having to say, "Yes" or "No", to our propositions, or, at all events, be forced to agree to negotiations at present. The wisdom of that course depends on whether one wishes for an agreement or not. If it be just a matter of scoring points, of having a good public posture, this might conceivably be a good plan. But if one genuinely wants agreement, I believe that such an approach would be counterproductive. It would not lead to agreement or negotiation.
We have had, for example, to be very careful in handling the matter of the possibility of the United Kingdom joining Euratom. It is said that we made an offer, but what we did was to agree to consider the possibility. In dealing with a Resolution put forward at the W.E.U. Assembly which was later considered by the W.E.U. Ministerial Council, I had to be careful to make clear that our willingness to examine this proposal was not an attempt to disrupt the Six. Very many people said that it was. We realise the difficulties which exist for them in considering this matter. We have not sought to push that to an issue in which the answer would be, "Yes" or "No"
I have also tried to avoid the rather ridiculous vicious circle in which we 1107 say, "We will not tell you whether we want to come in until you tell us whether you are willing to have us," and they say, "We will not tell you whether we will have you unless you tell us whether you want to come in." We recognise—I do not think that I am in any disagreement with my colleagues the Foreign Ministers of the Six over this matter—that there are problems involved for all of us in this Euratom proposal which have to be identified and examined in the context of the wider unity Which we are seeking. We are proceeding with that process.
I suggest to the House that it would be wrong to say that we will come in to the Common Market unconditionally, because that would be irresponsible, and it is not possible at the moment to negotiate on long-term problems which, I think, will have to be solved before we can get the wider unity which we want. I do not think that it is the right course for us to say, "That is our position. We want an answer," or to say, "Right. You start negotiating about that, whether you want to or not."
That being our view, what do we do in the immediate future? I shall try to put before the House what I think is the course of action we should take. First, we have to develop in every way we can our trade and other relations with E.F.T.A. As I have already said, there are many promising opportunities there. Secondly, there is no reason why E.F.T.A. trade with the Six should not expand, in view of the general prosperity in Europe. This will be our aim and I am not at all sure that there is not a little too much defeatism in some quarters about the future of our trade with the Six.
Next, it is in our interest from every point of view to try to reduce so far as possible the discrimination between the two groups and to play a full part in the G.A.T.T. confdrence this winter in order to bring about a useful reduction in the level of world tariffs. In addition, and perhaps the most important of all, we have to do all in our power to strengthen the political will in Western Europe directly towards achieving satisfactory and suitable arrangements. Without it, there will not be "suitable arrangements"—the words in the Motion—but with that will sufficiently strong there 1108 are bound to be satisfactory arrangements.
A great deal is going on in this direction. There is a considerable movement of Parliamentary opinion in Europe. All right hon. and hon. Members, on both sides of the House, who have been in touch with this European Parliamentary opinion know that there is a developing pressure for agreement, a pressure which I wholeheartedly welcome. I saw a little of that feeling for myself when I went to the Council of Europe in Strasbourg in January. My right hon. Friend the Minister of State saw exactly the same on the two occasions in the last nine months when he addressed the W.E.U. Assembly.
On the Ministerial side we are in close and frequent contact with our colleagues in the various Governments concerned. The President of the Board of Trade was at a meeting of the E.F.T.A. Ministers last Thursday. The Chancellor of the Exchequer and he attended meetings of the Twenty in Paris on Friday and Saturday last. My right hon. Friend the President of the Board of Trade will be winding up this debate and will be able to answer any questions on those two meetings. I myself have been in almost continuous contact, either directly or through diplomatic channels, with my colleagues the Foreign Ministers of the Six about these matters. We have had repeated discussions on these matters and the very fact that they took place through diplomatic channels does not mean that the whole world knows about them. Ministerially, we are in very close touch about these matters.
Dealing with the mood, I think it significant that only two weeks ago the Committee for the United States of Europe, of which M. Jean Monnet is President, passed a resolution urging that the United Kingdom and the other European countries should become members of the three European Communities. That is quite a different attitude from the exclusive idea of the Six that at one time existed. There is growing evidence of the political will to find a way to the goal of European unity in some form. I say this quite frankly, I think that it would help if we could be given some indication of the attitude of the Six towards the special problems which I have mentioned—particularly the problems of Commonwealth free entry, support for 1109 United Kingdom agriculture and the possibilities of meeting the special needs of our associates in E.F.T.A. I repeat that we are anxious to discuss these matters.
I fully agree that this involves a political relationship just as much as an economic relationship, but both those relationships must depend upon the kind of solutions which may be found possible to the problems and difficulties which I have outlined. When we talk of suitable arrangements, I certainly would not exclude participation in common institution. Therefore, in the absence of discussion of long-term problems with the Six, the courses which I have set out today are what it is best for us to do.
We recognise, however, that none of these courses is a full substitute for a thoroughgoing European solution. In the present state of the world—the current difficulties in East-West relations, the explosive happenings in Africa, the dangers elsewhere—it is obvious that Western Europe must come closer together. I therefore ask the House to state in the clearest possible terms that we recognise the need for political and economic unity in Europe and would welcome the conclusion of suitable arrangements to that end satisfactory to all the Governments concerned. We, for our part, are prepared to work wholeheartedly for that conclusion.
§ 4.56 p.m.
§ Mr. Harold Wilson (Huyton)
I think that we must welcome the Foreign Secretary to these debates. I was not clear whether he was making his last speech as Foreign Secretary or his first speech as Chancellor. On behalf of those on this side of the House, I have already said a House of Commons farewell to the retiring Chancellor. I did that in the economic debate a fortnight ago and I feel sure that I was speaking for the whole House in what I said on that occasion.
I think that it is too early to express a welcome to the Foreign Secretary to the cares of the Treasury, for at this moment he is rather betwixt and between. Perhaps I would be misleading him if I suggested that he has ever been our idea of an ideal Foreign Secretary, even on the rare occasions when the Prime Minister represented him to be one. From the day during the Suez 1110 crisis when the Prime Minister, then Chancellor of the Exchequer, turned to him and said, "Selwyn, this is your finest hour", he has never looked forward, but during his tenure of the Foreign Office he has always had the grace to answer Questions from the Dispatch Box and not from another Box in another place. [An HON. MEMBER: "Evaded them."] One of my hon. Friends says that he has sometimes evaded them. We hope that whoever succeeds him will follow the constitutional principle of answering for the Foreign Office in this House.
I am afraid that the speech of the right hon. and learned Gentleman today added nothing to the vacuum which already exists in relation to Britain's policy towards Europe. I do not intend, any more than he did, to go over the history of the past four years, but I would remind the House that the Opposition at the time fully supported the Government's idea of creating a Free Trade Area covering the whole of Western Europe, subject to the various safeguards we spelt out in various debates, those safeguards relating to full employment, the need to protect our foreign exchange reserves and to have an area based on expansion and not one which was exporting deflation from one part of the area to another. Those safeguards I do not need to repeat today.
I was a little disturbed last week to see in a national Conservative newspaper, which appeared the day after a meeting took place upstairs, that I was intending today to accuse the President of the Board of Trade of arrogance in his dealings with Europe. Of course, that is not our case at all. Whatever he may be guilty of, it certainly is not arrogance. I am sure that he has brought to the negotiations in Europe the same blend of bland bonhomie and misdirected energy which he brings to our debates here. If I were to make charges of arrogance they would be directed, not against the President of the Board of Trade but against his predecessor, the present Minister of Education, whose intervention at the crucial Paris Conference in December, 1958, still echoes round the Chancellories of Little Europe. I should not be surprised if it still returns on a hot night to torment 1111 the sleepless hours of the present President of the Board of Trade.
We have still never had an accurate account of what the Prime Minister said to Mr. Dillon in New York. What perhaps matters most is what Europe thought he said. I quote from a London newspaper, appropriately dated 1st April this year:Mr. Macmillan, according to the worldwide American news agency Associated Press, is reported to have: Insisted that if the French and Germans went on the road towards a united Western Europe. Britain would have no choice but to lead an alliance against them. Recalled that Britain and Russia joined against Napoleon's empire.Of course, we all know the Prime Minister's liking for these historical rôles. We have had him as Gladstone, Disraeli, and, last year, as Marco Polo. He plays one of these rôles one after another, like an ageing George Arliss. This year we saw him cast himself in the rôle of the younger Pitt. We do not want to interfere with the right hon. Gentleman enjoying himself in this way, but we must ask what effect in heaven's name do utterances of this kind have on Britain's ability to get her views accepted in Europe or to get her sincerity accepted in Europe? We have never had a clear account of what the right hon. Gentleman said. There were attempts at saying that he was misreported, but we ought to have a clearer and a franker account given to the House.
I turn from some of these accidents, or incidents—serious as they have been, as I am sure the President of the Board of Trade would agree if he were free to tell us what he thinks—to the facts of the present situation, and I would emphasise four of them. I think that on the basis of what he said this afternoon I would carry the Foreign Secretary with me in this.
The first fact of the present situation is that the Community of the Six is a reality going from strength to strength. In economic and political terms it has gained a coherence, strength and self-confidence to an extent which perhaps few people—certainly few people in this country—would have thought possible when the Treaty of Rome was signed. I do not think that we shall make any progress towards the solution of the prob- 1112 lems which we face in Europe until and unless we recognise frankly, without reservation and arriére-pensée, that the Six is a reality and that we must not only treat it as such but that we should welcome it. I was glad that the Foreign Secretary went this afternoon a little further than we have heard hitherto in this House in saying that he recognises that fact.
The second fact is that equally the Seven is becoming a reality, despite its more limited objectives. I was glad again that the Foreign Secretary this afternoon was neither apologetic nor depreciatory about what is being achieved in the European Free Trade Area.
Thirdly, the result of all this is that the economic division of Europe is now a fact and we must start from there and not moon about wishing that things were different.
This leads to the fourth fact, that the original seventeen-nation Free Trade Area, as originally conceived, is dead, damned and past hope of resurrection. I was glad again that the right hon. and learned Gentleman made this clear this afternoon. This has been recognised by everyone but the Chancellor of the Exchequer and the President of the Board of Trade. I cannot help feeling that the President of the Board of Trade, whose long and patient efforts to achieve that free Trade Area which we applauded and whose disappointments we shared and sympathised with, still acts as though he thinks that it has all been a bad dream and that one sunny morning he will wake up and find all Europe ready to sign on the dotted line. We cannot go on that theory any longer.
Europe is looking to Britain for a lead and the Government seem to be in a rut. A verb is coming into use in Europe, the verb to "maudle", meaning to maunder on, becoming rather tiresome and button-holing people in favour of a lost cause. Of course, the right hon. Gentleman is not arrogant. His position is rather like that of a seedy sandwich-board man outside a Paris restaurant failing to see that the shutters have been put up and standing there while the whole of Europe passes him by.
I turn now to the economic consequences of this division of Europe, and I want to be as objective as I can in a field where, I think the Foreign Secretary 1113 will agree, the facts are obscure and where it is still far too early to be dogmatic. I think it right to say of the present and prospective division of Europe that the real dangers for this country are not so much from a diversion of trade as from a diversion of investment and the means of economic growth.
It is possible, of course, to produce figures showing, if we take the example of exports of cars to the Netherlands, that while today we face the same tariff as the Germans, before long we may be facing a very high tariff of 29 per cent. on our exports while in due course the Germans, will enjoy duty free entry. It would be wrong to generalise from these figures. Tariff walls can be scaled. Our car manufacturers did it with conspicuous success in the United States. The French motor car manufacturers, the nationalised Renault industry, have done and are doing well in scaling a tariff wall as far as this country is concerned.
Moreover, if it is true that it will be marginally more difficult for us to sell in, say, the Netherlands against German, French or Italian competition, equally the Germans and other Community market members will find their markets in Scandinavia and in the other E.F.T.A. countries marginally more difficult for them. I understand that the German equivalent of the F.B.I. has been putting very great pressure on the Western German Government on this issue.
I think it is possible to exaggerate the economic consequences of what is going on. Something like 14 per cent. of our exports go to the Six. Even if as a result of tariff discrimination they were cut by 20 per cent., that would only mean a loss to our total exports of something between 3 and 4 per cent. I think we all recognise that that could be made up in the markets of the Commonwealth and the United States if we saw a little more application and drive being exhibited.
I think that the diversion of investment is much more serious than the diversion of trade, even if we cannot at this stage produce accurate figures as to the scale of the problem. The countries of the Six have been outstripping us for years, long before the Treaty of Rome in the volume and purposiveness of their investment. The spectacular release of self-confidence and energy which has 1114 followed the establishment of the Community has led to a still more rapid expansion and on a much more integrated basis for that investment. But this is not all. There is the magnetic attraction which the Community presents to new American investment and the diversion of that investment from Great Britain and other areas.
The problem is not only one of the volume of physical investment. There is a real danger that Western Europe will attract more "know how" and new techniques, and in a world of rapid scientific advance there is always a real danger that if Britain is out of the main stream we shall become, relatively speaking, a backwater. I do not think that this will happen—at least it in our own hands—but there is always a danger and I think that we should be aware of it. We should remember, too, that some of these investments which are going on in Europe today on sheer technical grounds have got to be on a vast scale. They are capital intensive, so that if an investment of this kind were sited in the Six the rest of Europe may be neglected. Alternatively, if the division in Europe becomes a chasm, we may get wasteful and unnecessary duplication of investment resources, with plants in both areas working below the true economic capacity and level.
There is another argument very much used by those who advocate a decision by Britain to join the Common Market. This is the argument, that the Community is a virile, expanding, dynamic economic area, with the ability to maintain year by year, a rate of growth at least double anything that we look like achieving. So it is argued that if we join the Six we shall be forced to streamline our rather bloated economic structure and become more dynamic. I think that is an argument which cuts both ways. If a middle-aged, portly man seeks to join a bunch of athletes lapping round a track, it may make him more athletic, or, alternatively, he may drop dead or, at best, retire panting from the track.
The plain fact is, and I am sure that the whole House would agree about it, that there is no simple solution to this problem. Assuming that we must be more dynamic, more vigorous and more virile, we shall not do it by joining the Six. The plain fact is that we have to 1115 compete with more dynamic nations both inside and outside the Six, and we shall not evade that competition either by joining the Six or by refusing to join it. The problem is for us, in any case.
We have seen the problem recently in the terms of the figures of exports published by the Board of Trade. For the first quarter of this year, as compared with the first quarter of last year, exports from this country increased by 17 per cent., world exports by 26 per cent., and the exports of the Six by 37 per cent. That is the measure of the sort of problem which we have to work up to, and that is why we welcome the fact that, very belatedly, the Government are turning their attention to increasing exports. After some of the figures that we had last year from the British Export Trade Research Organisation, showing the very small proportion of British firms which are doing a job in the export market, I think there is very much more for the Government to do, as we have pressed upon them for some years past.
The warning is there. The Six are vigorous and virile. They have set themselves a rate of expansion of some 4 to 5 per cent, per annum, which is a rate getting on for double our average rate of expansion over the past eight years. All the signs are that the Six, in common with countries of very different social structure in the East, will go on roaring ahead, and if we do not exert ourselves we shall have to be content with the rather more gentle movement of a backwater.
I want to come, as the Foreign Secretary did, to face the problem of the big decision which we have to take, and it is a decision which we cannot evade—the decision whether we do or do not seek to join the Six. Let me say right away that, as I have argued, the case is not any longer based on crude fears about the diversion of trade. I do not think that that is any longer the significant argument. So far as it is an economic case, it is bound up much more with participation in a group with a more striking record of production, exports and investment. I think it is fair to say that some of the arguments used two or three years ago against joining the Community are less strong now than they seemed then.
1116 Agriculture has been mentioned by the Foreign Secretary, It is true, as the right hon. and learned Gentleman said, that the method of supporting agriculture which we have adopted in this country, different as it is from the rest of Western Europe, would pose a problem for this country, if there were any suggestion of joining the Six, though, of course, presumably, there would have to be very thorough negotiations aimed at dealing with the problem which he mentioned. I would have thought that the Six, at any rate, are now committed, not so much to a system of free trade in agriculture, as to a system of planned marketing, a system which I think is commended more on this side of the House rather than the other.
I do not feel that, necessarily that would have the serious effects on British agriculture which most of us felt there would be when we considered this question a year or two ago. Indeed, the biggest bogy, from the point of view of British agriculture, is Denmark, which has already had to be accommodated within this problem of freer trade, as a result of the formation of the European Free Trade Area.
Then, again, there were those, particularly in the trade unions, a year or two ago, who felt that the problem of social harmonisation would cause increased difficulties for us. It was felt that if we, with the Welfare State which had been created, went into this, serious undercutting of our social standards as a result of free competition from other competing countries with lower social standards than our own would follow. The plain truth is that this is no longer true. A number of countries in the Six are now outstripping us in the provisions they make for social services, and, indeed, as I suggested in the debate a fortnight ago, one argument for going in is that some of these countries are now getting social services at a higher level and that this might prod the Conservative Party into greater activity in raising the social services to a higher level.
The Foreign Secretary was right when he stressed the Commonwealth problem as the greatest and most difficult problem for us. I hope that the President of the Board of Trade, when he winds up the debate, will tell us a good deal more about the attitude of the Commonwealth. Would I be right in saying that some of 1117 the older Commonwealth countries are expressing a position of neutrality about joining the Six? Are they saying, "We have something to gain, as well as something to lose, if Britain goes into the Six"? The markets will be expanding for the goods of those countries, but if we go in there is the problem of the preferential rates; they will expect full payment, which will have to come from this country, in a manner with which we were familiar a few years ago. If it be true to say that some Commonwealth countries are no longer pressing as strongly against going into Europe, perhaps the President of the Board of Trade will tell us more about that tonight.
If that is so, we have to admit—and I want to be fair about this—that the case for joining the Six is strong. There are formidable arguments for it, and we all appreciate the sincerity of those who advocate it. The fact that on balance the argument I am about to deploy will perhaps lead the other way—and it is a very difficult decision—should not mean that there is no case or that any provisional view which we take today should necessarily be final. My view is that the case for going in is formidable, and whether we go in or not, there will be real disadvantages and real costs to this country in whatever we do. It is not a clear, simple decision; it is a choice of evils.
§ Mr. Wilson
Frankly, I just do not know, and I do not think that anybody knows. After hearing the Foreign Secretary, I do not think he knows. It world be far too dogmatic in a very fluid situation for anyone to say that the next six months will be vital and that we must now take a decision once and for all on what we intend to do. I do not fee: that I am in a position to give that answer to the hon. Gentleman, and I am somewhat reassured—though I do not always like him on my side—by having seen the Foreign Secretary in a similar mood of honest doubt about it.
Perhaps I may now turn to the reason why, despite the strong case which I 1118 concede exists and which the Foreign Secretary concedes to exist, we cannot take this plunge. First, I will deal with the economic side. As I have made clear, it is easy to exaggerate the economic difficulties, though I am bound to say that we should think twice, and more than twice, before we commit ourselves to an organisation which will mean in the end not merely the loss of our economic sovereignty—because there will be no future for us or for the world if we are not prepared to compromise very seriously on our sovereignty, and not only our economic sovereignty—but will mean virtually relinquishing control of our own economic policies. This is a point of very great relevance to us on this side of the House.
Moreover, as I suggested a fortnight ago, to join the Six means redeploying our resources, re-orientating our economy even more than it is today, in the direction of producing consumer goods, and basing our trade on an overspill from our own consumer goods market.
Having mentioned the economic arguments, I feel, as the Foreign Secretary feels, that it is the political arguments which are the strongest. Let us make no mistake about it: the motivation of the Community is political and federal in character, especially amongst those able public servants who form its central administration and provide a great deal of its inspiration. Is that motivation right for us? That is the question that we have to answer. My hon. Friend the Member for Leeds, South-East (Mr. Healey) will no doubt deal with this much more fully this evening, if he is successful in catching Mr. Speaker's eye, but I suggest that surely all of us are agreed in this House that the United Kingdom has a very important rôle to play in easing tension between East and West, and I have some doubt whether the same desire necessarily exists among the members of the Six.
I have some doubt whether the same desire exists in certain quarters among all the members of the Six. Probably I can say this more easily than can the Foreign Secretary. If we were to join the Six and to become closely identified with the foreign policy of some of the Governments within the Six, I have some doubt whether we should have the same 1119 freedom and the same room for manœuvre, at perhaps a critical time, in seeking to build a bridge, say, between the Soviet Union and the United States or between the United States and China as I believe Britain ought to seek to build, and to be prepared to build, at any time. I have my doubts about that. I will put it no higher.
Last year, on his visit to Moscow, the Prime Minister seemed to be flirting with the idea of disengagement in Europe and with the idea of a nuclear-free zone in Europe, which had been put forward from these benches. When he did that he seemed to give hope that there was a possibility of easing world tension and tension between East and West. The tragedy was that he was pushed in one quarter and another, and for one reason and another, away from that policy after he returned from Moscow, and that is one reason why the Summit Conference failed. I wonder whether it would be possible for a British Foreign Secretary, if we became members of the Six, to take the initiative which we all hoped was about to be taken at that time? I put that only as a question, but it is a question to which every hon. Member has to find the answer.
There is also the question of our rôle in the world. The Foreign Secretary rightly referred to our political rôle within the Commonwealth. I think that all of us want particularly to stress Britain's rôle not so much among the older members of the Commonwealth as among the newer members of the Commonwealth—the newly emerging Commonwealth, given their freedom, who, to the delight of all of us, in most cases want to stay within the Commonwealth and to maintain a special link with this country.
I wonder whether, as a member of the Six, we should have the same ability to give a lead to them and to work with them, particularly in view of the growing power of the Afro-Asian bloc in world affairs. I wonder whether we should have the same freedom and the same ability to do that if we were full members of the Six? I only put the question, without feeling very dogmatic about the answer, but I think I know what the answer is. It is not that we on this side of the House are against much closer 1120 ties, politically or indeed militarily, with Western Europe, but we believe that these ties should be developed and strengthened within N.A.T.O., not within an ostensibly economic community.
I must turn to one very big practical question, with which the Foreign Secretary dealt. Suppose we decided to join and that we were able to enter on terms possible and acceptable to us. Would France agree to our joining? There are suspicions on the Continent that if we sought to join now we should be doing it because we should be a Trojan Horse, if not to destroy the Community from within—I do not think that that is in anyone's mind—at any rate to alter its direction and to alter the basis on which it is being organised.
It is true to say that in France, particularly among the patronat, there are still many who fear British competition. With remarkable success they have absorbed the first impact of German competition following devaluation and following their own rather more purposeful economic policies and their export drive. But I think that there are many in industry in France who would be horrified at the thought of having to absorb British as well as German competition. That is why I query whether we should be given a welcome if we proposed to join.
In any case, there is no doubt at all that if we joined it would mean a very substantial redrafting of the Treaty of Rome. The Treaty was the result of years of very hard work. It is a very delicately balanced Treaty, balancing one country's interests against those of another country, and it is quite unthinkable that, from the point of view of the Six, Britain could just join and sign that Treaty. Our joining, as a powerful economic country with world trading relations, would destroy the whole balance of that Treaty.
From our point of view there are many aspects of the Treaty which we could not possibly accept. For example, there is the problem of overseas territories. The French have been successful in obtaining an access to the markets of Western Europe for their overseas territories in Africa. It is quite unthinkable that we could join the Six and not have a similar freedom of entry for the products of British overseas territories and 1121 former British overseas territories. From that point of view alone, therefore, a very substantial redrafting would be necessary, and no one pretends for a moment that it would be easy.
I want to turn to another very serious practical problem referred to by the Foreign Secretary—our commitment to E.F.T.A. This is a commitment, I remind the House, approved only a few months ago practically unanimously in the House. I say "practically unanimously", because I think that the Liberal Party united to vote against it. Apart from that, it was unanimously supported by the House, and in my view rightly supported. We were right to take that lead with our associates in Scandinavia. Switzerland and Austria in forming E.F.T.A.
Let us be quite clear that we cannot pull out now. There are at least three members of E.F.T.A. who cannot join the Six—Austria, Switzerland and Sweden.
§ Mr. Wilson
They consider that they cannot. I have been discussing it very fully with some of their representatives this weekend. They believe that on political grounds they cannot join the Six. They believe that they cannot do so on grounds of neutrality. The Austrians believe that they are forbidden on Treaty grounds to join anything which would smack of an Anschluss with Germany.
§ Mr. Wilson
It is not a question of what is in the Treaty of Rome. It is a question of what is in the minds of our friends from Austria, Sweden and Switzerland and what is in the treaty which Austria signed with Russia at the end of the war.
§ Mr. Wilson
The hon. Member is free to make his own interpretation. I can only tell him the views of the Austrian Government and others. I do not think that it is for anyone in the House to force the Austrian Government into some preconceived notions which may or may not be pleasant to the hon. Member and Bolton, West (Mr. Holt). I recognise 1122 that Bolton. East has a very different problem.
I have said that these three countries cannot join the Six. And we could not desert them and make separate terms with the Six, even if we wanted to. I say "even if we wanted to". Let us be clear that the economic arguments for a close association with our partners of the Seven are at least as strong as those for joining the Six. But that is not the only issue. Our word is pledged, and I believe rightly pledged. We cannot go back on it now and take our stand simply on that grand old moral principle in relation to the Six. "If you can't beat 'em, join 'em".
I ask the House to think what the effect would be of our walking out on the Seven. I have been trying to find out what "Perfidious Albion" sounds like in Swedish, and I gather that it is far from euphonious. Suppose that we listened to the arguments of those who say that we should join the Six and decided to join the Six. Suppose that—and the Foreign Secretary indicated that it is a very arguable point—we were not welcomed into the Six. Or suppose that we were met with a decision that our application be deferred to this date two years, or something equally humiliating—which is a distinct possibility. We should then have destroyed the Seven, we should have failed to join the Six and I believe that we should be distrusted in Europe for all the years there are to come. We should live in a state of isolation which would be anything but pleasant.
I should have liked the Foreign Secretary to tell us a little more about the Seven and about the Government's view on the future of the Seven. No doubt the President of the Board of Trade will do that tonight. How do the Government regard the Seven? Do they regard it as a strategic bargaining counter which failed or as a trade development valuable in itself if we fail to get anything better? This weekend I attended a conference of Socialist Parties of Western Europe representing the Six and the Seven, who discussed these problems in a realistic and constructive way. I was very struck by what one very wise old statesman said, "We never regarded E.F.T.A. as an alternative to a broader European 1123 market. Its main aim is to be the first step towards a wider European market, to a common, united, single market. If it has to, it can stand on its own feet. It might have to do so, but this is not how we envisaged it." I hope that the President of the Board of Trade tonight will endorse those words, because I think that that is the right way in which we should look at E.F.T.A.
I ask the Government what they see as the future of E.F.T.A. I hope that it is realised that it will have to stand alone for some further period of time. Is it being fully staffed? Is it being adequately speeded up? Are the Government co-operating to the full in the provision of staff and essential services? It is vital, having signed the Agreement, that we should make it a reality. I ask the President of the Board of Trade whether we are ready, as the Six are ready, to speed up the processes of liberalisation in the area. They are speeding up their liberalisation still further; why should we not do as they are doing? For all the reasons that I have given, I conclude that we cannot contemplate ditching E.F.T.A. and making a separate approach to the Six.
What do we do now? What is the way forward? I am not trying to indicate that what I am suggesting is particularly revolutionary. A good deal of what I say accords with what was said by the right hon. and learned Gentleman. First, we should recognise, and make plain that we accept, the success of the Six, and be quite frank in recognising its political motivation. We have been too slow in doing this in the past. I was glad that the Foreign Secretary did it clearly today. We should recognise that it has come to stay—indeed, we should do more and welcome the motives of those who want to unite in Europe. In any case, after a thousand years of Franco-German bloodshed, it is something that is worthy of our highest support. It is something which is historic in the annals of this European continent to feel that there are statesmen in Western Europe who are trying to build up a system in which this fighting on the Rhine shall be a thing of the past. Let us make that very clear.
Secondly, when we have dispelled the suspicions that surround our own motives—I do not think that I am unfair in saying that there have been suspicions 1124 about them—let us press the Six to do all they can to encourage closer integration covering the widest possible area by first of all working now to the lowest possible external tariffs. It should be our aim and theirs to get the lowest possible external tariffs. But, of course, if we are to ask the Six for that in sincerity and conviction, it follows that Britain, which has some of the highest industrial tariffs in the world, must be prepared to initiate substantial reductions in her own tariffs.
Thirdly, in G.A.T.T. and elsewhere, we should try to negotiate, on a mutual basis, reductions in those tariffs of special interest to our European partners. In a mutual process, we should be prepared in particular to deal with those items in which they are interested and ask them to deal with those items in which we are interested. This would help to draw the Six and the Seven together. The Government should give a lot more thought to the functional approach put forward by the late John Edwards in the debate on 12th February, 1959, when he suggested a much more careful examination commodity by commodity, pointing out that over a very wide range the differences in tariffs between our system and the Commonwealth's and those in Europe were not so great as many people thought.
Is there anything more that we can do? Before I sit down I should like to refer to one suggestion for a new initiative which has been put forward in more than one European country. The argument is that failure so far has been due to failure on the part of the members of the Seven to recognise the "oneness", the unity, the integration of the Community, in a futile attempt to try to get the Six as six countries to come into a kind of association we like. Any new initiative should be based on recognition of the unity of the Six.
That is why there are those who have proposed that the Seven should invite the Community, not as six countries but as one economic unit, to join a looser association, doing so not as members numbers eight to thirteen, but as member number eight. This would fully recognise the political aspirations of the Community and put forward the free trade area proposals, not as a means of holding the community back, but as a means of enabling it to work more 1125 closely with its European neighbours. If thought that there were any real hope of this proposal being accepted, I would strongly urge the Government to take such an initiative.
§ Mr. Martin Maddan (Hitchin)
Would the right hon. Gentleman explain what would be the difference between having the Six becoming member number eight in the Seven and revising the original free trade area proposals?
§ Mr. Wilson
The difference is that whereas the original free trade area proposals invited the Six to join separately, with each country, in its relations with the several other countries, following the same rules, this new proposal would recognise the Six as a unit with a political and federal motivation and a degree of economic harmonisation and integration going far beyond anything ever contemplated for the original Seventeen. Therefore, it would be recognised as a community and as one very special and big country within the free trade area. If there were any hope of this being accepted, it would go a very long way to break down the division between the two parts of Western Europe, but, to be frank. I think that there are very serious doubts.
§ Mr. R. E. Winterbottom (Sheffield, Brightside)
Would this suggestion that the Six should join the Seven not contradict the idea of the unity of an external tariff?
§ Mr. Wilson
I do not think that it would, because they could still have their own external tariff but would have a special relationship within the Thirteen. I Jo not think that it would interfere with that at all, any more than it is intended that within the free rade area our freedom of action vis-à-vis the Commonwealth is affected. The real doubt is whether it is at this stage acceptable to the Community.
We have to take account of this problem. When the attempts to unify Western Europe broke down two or three years ago, two clubs were formed, each with separate rules, with separate subscriptions, with separate badges and club ties. They were the Six on the one hand and the Seven on the other. I do not think that we can now ask, with confidence, the Six to come along and 1126 buy a tie with sevens all over it. That is a little difficult. That is why we shall have to work towards a new initiative.
It will not be speedy. It cannot deliver results next week or next month. We could, perhaps, call it a Commonwealth of European Nations to enable the Six to preserve its identity and the Seven to be associated in something which accepts the common obligations of freedom of trade and positive joint economic cooperation directed towards an expanding economy in Europe.
We must also be outward looking. This Motion refers to Europe, and so far all the references to Europe have been references to Western Europe. There is, of course, a far wider division in Europe than the one between the Six and Seven. There is the one between East and West. Whatever we do in the West, we should positively and wholeheartedly work for closer relations, not only political, but economic, between East and West.
We on this side of the House have pressed this very many times, long before it was fashionable to do so and long before the Prime Minister went to Moscow. I remember the discussions we had. It seems a long time now since the Prime Minister was resisting it. I forget what he was at the time—Foreign Secretary or Minister of Defence or Chancellor of the Exchequer. But he resisted the suggestion that we should export trawlers to the Soviet Union, which were banned on so-called strategical grounds if they went faster than eight knots. Since then, we have seen the Russians sending a lunik to photograph the reverse side of the moon at a speed very much in excess of eight knots. Thus, in our attempt to solve this division in Western Europe, I hope that we are not being too introvert and will be much more outward looking.
I know that that will be the desire of the Government in relation to trade with the outside world and the Commonwealth. We fully support that. I hope also that when the Foreign Secretary comes to talk about Europe in terms of economic affairs, he will think not only of Western Europe but also of trade between East and West, and strengthen those economic associations, such as O.E.E.C., that are designed to help to 1127 achieve greater trade between East and West. Today, however, our immediate problem is that of the Six and the Seven.
I have indicated the measures that I think might be taken, and I would stress one immediately urgent step. Everybody in this debate will doubtless pay lip-service to the idea of a united Europe. I ask the Government, in their negotiations in Europe, to press that both parties, the Six and the Seven, should now make a clear and joint declaration of intent. The Seven have done this already—let them repeat it; and let the Six make a declaration, too, that whatever the immediate difficulties, both parties, or both groups of parties, regard the present division in Europe as a regrettable and temporary phase, and pledge themselves to work unceasingly and without reservation for a single, united, economic community for Western Europe.
§ 5.41 p.m.
§ Sir Anthony Hurd (Newbury)
It is rather remarkable that both the Foreign Secretary, speaking for the Government. and the right hon. Gentleman the Member for Huyton (Mr. H. Wilson) have so wholeheartedly welcomed and accepted the Six. Until a few months ago we had many reservations about how the Community would work out, or whether it would work out at all. It is remarkable, therefore, that we have started this debate today with that acceptance and that welcome.
We are founder partners in the Seven, so we are bound to accept that, and to work for a bridge between the Seven and the Six. It was with that object that we went ahead with our friends in the Seven. We all recognise that divisions in Western Europe are a bad thing for the free world and weaken us in the face of international Communism. Many people will say that not only in this House, but outside it. But how far can we, in Britain, go in this new, exciting—and, perhaps, dangerous—partnership that is projected in Europe?
There must be some limits. I do not think that we should participate in schemes of political unity in Europe that would over-rule our sovereignty, and our bonds with the Dominions and Colonies. I am quite clear about that myself, and so, I am sure, are many others. If we did hamstring ourselves 1128 like that we should not be true to our responsibilities, as Britain and as the senior partner in the Commonwealth. We have our special contribution to make to world affairs, and I am sure that we can do it most effectively by standing on the touchline of the Continent of Europe rather than being right in the centre of political entity in Europe itself.
I am not nearly so sure that there are good reasons for keeping apart from a trade association in Europe. It is said that British agriculture could not stand that, and that our especially close relations with the Commonwealth countries would be jeopardised. Both, of course, are chiefly concerned with the supply and marketing of primary products, food and raw materials. As my right hon. and learned Friend said, the Commonwealth trade problems are especially difficult, but I do not think that they are insoluble.
I was in Australia in May and talked to some businessmen there. I found them not at all adverse to an association—maybe at one remove, through Britain with Europe that would give them, they thought, better opportunities to sell their wool to advantage, possibly their meat and butter and, maybe, their cheese. They felt that Australia—and I think that this applies to New Zealand too—must look for wider markets, and not be content with such preferences—and they are rather meagre—that are afforded them in the British market. Those two Dominions would be quite open minded about the advantages of association, through us, with a trading group in Europe.
The benefits for our Colonies and some other Commonwealth countries are more in doubt. There are West African countries, with their oil seed interests, and the West Indian countries, with their sugar interests. They would be much more difficult to fit into the picture than would the Australian and New Zealand interests. These problems are complex, but I do not think that the advantages in the Commonwealth are all on one side or on the other.
I should like to say something about British agriculture's attitude. I have little fear about British agriculture's capacity to compete at level pegging with the Continental countries in any project for a managed market that is likely to be 1129 papers some very optimistic accounts of proposals for a completely unified agricultural market in Europe—almost an international marketing scheme running right through the Six countries. Several years must elapse before that can be worked out clearly in practice and I myself doubt whether it will ever come about.
Britain has an efficient agricultural industry. Some will point to our subsidies. Well, that is how we support our apiculture. In some cases, the Continental countries have a much more complete and rigid system of support, by means of import quotas, tariffs and minimum price systems. If we wanted to join a trading group in Europe I do not think it would be impossible to fit our system of price guarantees under the Agriculture Acts of 1947 and 1957 into a wider scheme of managed markets and agricultural support which the other countries in Europe will certainly want to continue. I am sure that they will, and we should not be all that much out of line.
The most difficult question will be our horticulture, particularly in competition with the seasonal supplies from Italy and the countries where they have warmer sun than we, and where market supplies come forward much earlier in the year. If we want to maintain our horticulture we shall have to apply just those kinds of measures that the Continental countries have applied, and which they will want to continue to apply, to maintain their own industries for which they have a special regard. Therefore, I do not think that either in agriculture or horticulture we need fear too much that by entering a trading group we must abandon those interests. There must be give and take.
If we did go into a managed market, it would mean, as the Foreign Secretary has pointed out, that our food prices would go up. The consumer would pay more real prices and there would be less subsidy to be met by the taxpayer. That is something we should consider. At present, there is a very big subsidy on eggs. In a managed market, that subsidy would possibly be cut by half. We must keep in mind that there is here a pro and a con. It is a great benefit for us, competing in the world with our industrial goods, to have the low-cost, high-standard food supplies which we at 1130 present get under our system. We would have to weigh that against the advantages coming to us from maintaining entry and improving our access to the Continental markets for manufactured goods and indeed some agricultural produce.
The views of this side of the House were made abundantly clear by my right hon. Friend the Prime Minister on 2nd June, when he said:There are good economic reasons for this"—that is, for our system of agricultural support—and good social reasons, too. These considerations, you can be quite sure, will be very much in all our minds as we go ahead with the intricate negotiations that are taking place about European trade.I accept that, and I was glad that my right hon. and learned Friend again underlined this afternoon. We will not have our agricultural policy dictated by Continental interests. Surely, we learned our lesson between the wars, when we let our land run down in condition. We then had to strive in 1939, 1940 and 1941 to reawaken production, and that was very wasteful in time and costly. We do not mean to let our land run down again and leave our food supplies at the mercy of any aggressor with submarines. Surely we are not going to learn that lesson all over again.
Since the war it has become necessary to consider this in terms of trade as well as defence. Our agriculture has contributed markedly to strengthening our balance of payments, I believe by about £400 million a year. Treasury pundits are always chary of accepting any figure, but there is a considerable strengthening in our balance of payments position if we use our land fully. To abandon that in the interests of European unity would weaken our trading position as well as our status and place in the world. That could not be good for us, or, indeed, for our partners. I am sure that full farm output here will be needed so far as one can foresee.
We need, in the discussion of these problems of European trade, to ensure that our own agriculture continues to hold due share of the home market. At present, we are supplying about two-thirds of the kinds of food which can be produced here—that is, disregarding 1131 oranges and the tropical sorts of product. I think that that is about right for our balance of payments position and, indeed, reasonable so far as our partners in a wider trade association are concerned I do not worry about the prospect of a managed market in Europe and the possibility of maintaining our system of price support in balance with the protective measures which the other countries in Europe will want to retain.
If we do nothing, if we are the odd man out, what is the prospect? I am afraid that we should find ourselves, as European agriculture develops, with their surpluses tipped over here regardless of price. Should we then be in a position to use the anti-dumping legislation? We have always been slow and doubtful about using that sanction to food. We have been more ready to use it when applied to industrial products, but I am doubtful if that is sound policy, to rely entirely on anti-dumping laws against European surplus supplies, which might be French wheat or Italian vegetables.
Surely it is better to contemplate coming to some arrangement which will balance supplies and prices on a basis that will not leave us so far out of line with the other countries of Western Europe. That is how we can best play our part, and I am encouraged by the line which the Foreign Secretary has taken this afternoon. He is moving on the right lines. We may well find that the other peoples of Western Europe will, when they have sorted out their own immediate problems, welcome us as prospective partners who can add a real strength in terms not only of trade, but of political wisdom to a vigorous and more vital Europe.
§ 5.54 p.m.
§ Mr. F. J. Bellenger (Bassetlaw)
I do not know whether the speech by the Foreign Secretary this afternoon was his swan song from his present Department, but if it was he ought to be highly gratified that so far in the debate he has received support from both sides of the House, including powerful support from my right hon. Friend the Member for Huyton (Mr. H. Wilson) today. I, too, am about to lend my support.
We have listened to the hon. Member for Newbury (Sir A. Hurd) speaking, as he frequently does in this House, for 1132 agricultural interests, and today we have heard from him that there is very little more to be said on that issue, although quite a lot used to be said by Tory Members of Parliament and Tory farmers. I well understand why. Since the E.F.T.A. agreement was entered into and the arrangement was made to satisfy Denmark, the agricultural issue, certainly in relation to us joining the Six, which I suggest is not possible, diminishes in importance in the minds of many Members and of the interests that support them in the country.
However, there is one sentence in the speech of the right hon. and learned Gentleman this afternoon that I should like him to elucidate further. Diplomacy has remarkable habits of double entendre. The Foreign Secretary, in his speech, said, "If Britain is considered outside Europe we could not fulfil our rôles." Our rôles inside Europe are contained in N.A.T.O. and Western European Union, amongst other organisations, and there is no doubt that one of the many important rôles that Britain is assuming and has assumed since the Paris Agreement is a military rôle.
I wondered when I listened to the right hon. and learned Gentleman, in what seemed an otherwise innocuous remark, whether it had more significance, and that perhaps even if it might have no particular meaning for me our Continental neighbours might read into that remark a threat. I do not know whether the right hon. and learned Gentleman meant it as such, but as my right hon. Friend the Member for Huyton referred this afternoon to the alleged remarks of the Prime Minister in Washington, which, even though they were denied in that form, were obviously mentioned in some sort of context, I think that we should make ourselves as clear as possible to those with whom we want to do business. The right hon. and learned Gentleman said clearly that the whole purpose of Her Majesty's Government was to come to an arrangement not only with the Six but with the whole of the European partnership.
§ Mr. Selwyn Lloyd
I am grateful to the right hon. Gentleman for giving way. The last thing that I wanted to do in my speech was to make any particular threats of any sort. I was not thinking 1133 at all of what the right hon. Gentleman suggested I have always said that I thought that if there were an economic division in Europe it might have serious consequences to political cohesion. In the remarks that I made about regarding ourselves as a part of Europe I merely said that if we were cut off from that of which we are a part, we could not fulfil our complete rôle. That is all I meant. There was no suggestion of any particular threat of removing ourselves from any European or Atlantic association.
§ Mr. Bellenger
I am glad to hear that, although I am bound to say, on hearing that remark from the right hon. and learned Gentleman, that even if the Six or the Seven remained as they are I cannot see how we should be cut off. We should still have our trade associations. I understood that one purpose of the Seven was to cement the relationship between the Seven and the Six. I should not have thought that we should be cut off from N.A.T.O. or O.E.C.D., Which is to take the place of O.E.E.C.
§ Mr. Lloyd
I must get this clear. I made that remark at the beginning of my speech. I was speaking of the suggestion that we in this country, the United Kingdom, were not part of Europe at all. I was not talking of our association with the Six or the Seven. I was talking of the idea that this island—because it is an island off the coast of Europe—should not be regarded as pant of Europe. I was dealing with that part of the argument. I agree with what the right hon. Gentleman said about the Six and the Seven.
§ Mr. Bellenger
I am sorry if I misunderstood the right hon. and learned Gentleman. He will appreciate that he has been misunderstood on more occasions than one during his tenure at the Foreign Office.
However, I wish to apply my remarks to that I imagine will form the basis of this debate this afternoon. There are two trains of thought. One is that it is impossible to join the Six, and the other, I gather from the Liberal Party which is supported by some of my hon. Friends behind me, judging by their signatures which have been appended to a certain document, and I suspect by some hon. Members opposite, that we should join the Six. Those are the two proposals. 1134 One is that we should join the Six, and the quicker the better, and the other, enshrined in the Government Motion, is that we should use a little caution and try to get a system which can contain both the Six and the Seven to the mutual benefit of all.
I wish to give certain reasons why I think that those who suggest that we ought to join the Six are barking up the wrong tree completely. The Economic Community of the Six is based on the Rome Treaty. That is a definite Treaty and the Provisions in it are specific. It is quite clear to anyone in either official or unofficial circles who has had any connection with Continental nations, particularly Germany and France, that the Six will not alter the road that they have taken. Indeed, they mean to move as fast along that road as they possibly can.
Whereas the Rome Treaty provided for complete integration within fifteen years, I think, of the signing of the Treaty, there is now, as we know, an attempt to speed up the movement along the road towards complete integration. Although the suggestions of Professor Hallstein have for the time being been deferred, it is quite clear that, by the end of this year, the countries of the Six will have entered on the next phase of their agreement based on the Rome Treaty, towards, even closer integration and, of course, the making of a common external tariff.
There is no doubt that the external tariff of the Common Market Powers will affect us considerably. It is a remarkable coincidence or, perhaps, more than that, a natural consequence of the freeing of trade between the Six Continental countries, that our own country, besides the Common Market countries, has benefited considerably by this expansion of trading, and I see no reason to fear that British trade will not continue to play its part in what evidently will become a vast expansion on the Continent among the Economic Community Powers.
There is, of course, the danger of the external tariff. I do not know how that will be overcome. Whether it is possible for Her Majesty's Government by some method or other to induce the Common Market Powers, in association or in negotiation with the Seven or, perhaps, 1135 an even wider circle, to modify the external tariffs which they seem to be determined to make, to our disadvantage, at any rate, speaking for our own country, I do not know. Perhaps the President of the Board of Trade will tell us whether any proposals which the Government have to offer will alleviate the hardship which I think that will entail for this country.
I wish to put several points to those of my hon. Friends who favour our joining the Six. The Rome Treaty contains very important provisions which, although the Trades Union Congress has generally approved them, would not, I think, be quite so acceptable to the trade union movement when they came to be implemented. The Rome Treaty provides for mobility of capital, for mobility of labour and, of course, for mobility of finance. I cannot see the trade union movement in this country accepting the unrestricted importation of, for example, Italian labour, or even its importation to the extent that is accepted in Germany, France or Belgium. In my view, my hon. Friends in the movement to which I belong should be quite explicit on these points when they advocate adherence to the Treaty of Rome.
§ Mr. John Hynd (Sheffield, Attercliffe)
My right hon. Friends says that we should be quite specific. Will he say where in the Rome Treaty it is provided that there should be unrestricted mobility of labour? As I understand it, the Rome Treaty does nothing of the kind.
§ Mr. Bellenger
It certainly provides for mobility of labour. I believe that there are about 100.000 Italian workers in France today.
§ Mr. Bellenger
Of course they want them. Today, or presently, when our labour position becomes somewhat strained, we might want them, too. There was a time when it was suggested that foreign labour should come into the coal mines of this country because we needed it, because the coal industry needed it. I represent a coal mining constituency, and I can speak with first-hand knowledge. Whether we like it or not, the miners were not prepared to welcome the importation of foreign coal miners, and I suspect—even though it may not be un 1136 restricted, the principle is there in the Rome Treaty—we should have to accept foreign labour in far greater numbers than we are prepared to accept at present.
I do not say whether this is right or wrong. What I am saying is that my hon. Friends who are prepared to advocate adherence to the Treaty of Rome should be explicit on the point and say whether they accept that provision wholeheartedly. Just as there would have to be, as the hon. Member for Newbury said, checks and balances applied in any arrangement for agriculture, so we should have to apply checks and balances in respect of the importation of foreign labour into many of our industries. Let us remember that, although we may as individual Members of Parliament give our own views, we represent constituents in this country. We do not represent necessarily or solely an ideal, a Continental ideal, to which most of us subscribe but about the implementation of which, on the basis which the Six have adopted, many of us are doubtful.
My right hon. Friend the Member for Huyton mentioned at the end of his speech a proposal of which he had heard. I was speaking to someone in Germany who holds an important official position there, and he told me that Germany would not be averse to belonging to a wider free trade area but, he went on to say, the Six would, first, have to be accepted as one complete entity in any negotiations which took place for a wider free trade area which the Six or, at any rate, Germany, for which he was speaking, would be prepared to join.
I ask hon. Members to consider why the Six came into being. When one does this, one sees clearly why the countries of the Six cannot now throw away what they have achieved. At the end of the war, Germany, France and Italy were in chaos; their industry and their political system were dismantled, very largely, both physically and spiritually. The statesmen of those countries—I give them credit for their foresight—saw that, if they were to continue like a lot of Balkan States dealing with the great Powers individually, they would be treated like Balkan States.
Every indication from behind the Iron Curtain of what happens to small Powers 1137 which cannot stand up for themselves and which are treated as satellites is certainly prominent in the minds of all those statesmen who are not in the sheltered position which we in this country, in spite of the considerable losses we suffered as a result of the war, have enjoyed. I do not, therefore, blame them for one moment for trying to get together as a unit.
One of their aims has been the mobilisation of capital, not only capital from their own resources but capital from far away. America is supporting the idea of the Common Market not only politically but economically; her manufacturers and her financiers are rushing to gain entry into the Common Market. The same applies to British manufacturers, too. I have extracts from reports in he financial newspapers of different British firms which have linked with German or French firms to get a foothold in the new Common Market.
I therefore agree entirely with my right hon. Friend the Member for Huyton when he says that the damage to our own industry will not be as great as many people imagine. I am not prepared, at any rate, to be panicked into a position which we refused to accept when the Rome Treaty negotiations were proceeding. All the arguments which can be advanced to day for joining the Common Market could have been advanced then, and I do not remember any great hullabaloo from either side of the House at the time the Rome Treaty was being negotiated.
What I should like to say to the right hon. Gentleman the President of the Board of Trade, although again he may find himself in a different position shortly, is this. I would not pay him the same tributes which my right hon. Friend paid him. I think that he has been hard working, and wet the House know that he has a very genial exterior, but I have a feeling that he, prodded by his colleagues in the Cabinet, has a rigid outlook on these matters which has tended to create in the minds of many leading people on the Continent the feeling which they describe as "the Maudling manner". I do not want to overstress the point, but I regret that there is a feeling on the Continent that he, who had charge of these negotiations and was, I believe, chairman of the committee set up to investigate the possi- 1138 bilities, has caused a good deal of irritation.
The right hon. Gentleman may brush that off and say that all politicians come in for that at some time or another, but my right hon. Friend was quite right in urging the Government, whatever they did, to create an image of this country in its negotiations which is, if I may use the banking term, creditworthy. There is no doubt whatever—it is no good denying it, although members of the Government may do so—that, as a result of the Prime Minister's remarks in Washington, there immediately came a reaction in the way we have known for so many years that we, perfidious Albion, were getting ready to do a deal with somebody else. I am not at all sure that a deal cannot be done with somebody else. My right hon. Friend the Member for Huyton hinted at it.
There is a tremendous possibility of trade between East and West. Two great Powers, Russia and China, are, as it were, shut off from a lot of Western trade. That raises very big political problems, but let us make no mistake about it that, although the political system in Germany may be very anti-Communist, the businessmen of Western Germany are not averse to doing business when they possibly can behind the Iron Curtain. All that I would say is this. If keeping a free band politically will enable us to expand our trade not only in Europe but wider afield, then what are the advantages of rushing and saying to the Common Market countries, "Please let us join"? I do not think for one moment that they will believe we are genuine.
It may be possible—and I think that one of my hon. Friends may suggest it—to get a phased entry into the Common Market, but I believe that when that time comes we shall have got something wider than the Common Market. We shall have got European free trade on a basis which we can honourably join which is not possible at present even if we applied to the European Economic Community to join. As my right hon. Friend suggested, I think that there is room for considerable negotiation on tariffs within a wider ambit, namely, G.A.T.T. It is possible that we shall be able to proceed to a greater liberalisation of trade within G.A.T.T. I do not 1139 care what the instrument is as long as we have freer trade.
I do not know about the political situation, but I feel that the Six dare not let the situation politically get to a point when they antagonise or alienate this country, however much moral support they may get from America. Judging from my talks with German businessmen, I think that they are now making trade arrangements within trade associations and in other ways to minimise the effect which the external tariff will have when it comes into operation. There is a genuine feeling—I can say this without fear of challenge—in Germany and I believe in Holland particularly for closer arrangements in trade between this country and the European Powers.
Therefore, I am not so pessimistic as some hon. Members may be on the possibility of coming to some arrangement. If course, it is no good jobbing backwards, but we may job as far back as a speech which the right hon. Member for Woodford (Sir W. Churchill) made fourteen years ago, when he pleaded for closer integration in Europe. He said:The first step in the recreation of the European family must be a partnership between France and Germany…"—it has come about—within the United Nations. We must recreate the European family in a regional structure called, it may be, the United States of Europe, Great Britain, the British Commonwealth of Nations, mighty America and I trust Soviet Russia—for then indeed all would be well—must be the friends and sponsors of the new Europe.It is a remarkable thing, but I believe that it is true that Russia has applied to be a member of the Organisation for Economic Co-operation and Development. I should like to quote from a very enlightening and interesting report, which I think most hon. Members have had, of the Assembly of Western European Union, and I would urge hon. Members to read it if they have not already done so. It is Document 168 by the Rapporteur of the General Affairs Committee, on which were Members of both sides of the House. This Report makes a positive suggestion with regard to the Commonwealth. Like my right hon. Friend, I do not think that the Commonwealth is such a stumbling block as many of us would make out to agreement in Europe. The Rapporteur states: 1140However, a general line of approach might be suggested which would be to develop simultaneously, in a complementary way as far as possible, the common external tariff and the preferential tariffs between the Commonwealth and Britain so that the opening of new markets benefits both the United Kingdom and the Six.This is a Report which has already been presented and, I believe, accepted unanimously. In trying to arrive at a positive conclusion, we should apply our minds to constructive suggestions like that. I hope that the Government is following up the suggestion of M. Conte, who was the Rapporteur.
As Britain has a lot to offer in an agreement—and 50 per cent. of world trade is done in sterling, I believe—I often wonder whether perhaps some of the opposition may not come from financial circles. Perhaps I am too suspicious, but, nevertheless, the Common Market currency is quite different from that of the sterling area. I think that any Government, even if we on this side were in office, would have to consider the fact that a large proportion of Britain's trade is done in sterling and there has to be a positive arrangement with the Six on currency matters, to say nothing about tariffs, before we can, as it were, throw in our lot with them. But the mere fact of stating that, I hope, shows that Britain has something to offer as well as making a plea.
It is quite obvious that the Government will not be in a difficult situation because of their Motion tonight. It is quite innocuous. If I were of a suspicious turn of mind I might wonder whether there have been collusion between the two Front Benches. However, I shall not pursue that thought any further. The fact remains, perhaps as a matter of coincidence, that there will not be a challenge to the Government in the Division Lobby tonight.
All I suggest to them is that they should get away from the indefinite position in which our own country seems to be at the moment. I understand very well the remark of the right hon. and learned Gentleman the Foreign Secretary that we cannot, as it were, throw our cards on the table and then say to the other side, "Let us see your cards." Business is not done in that way—and it is very big business in which the nations are engaged at the moment. Obviously, there will have to be negotiations.
1141 I urge the Government, the President of the Board of Trade particularly, to show to the House quite clearly tonight that they are genuinely pursuing the negotiations, and not sticking their heels in and saying, "This is where we stand and we shall not make a move," but giving as well as taking. If these negotiations are to come to a successful end, we in Britain shall have to give something as well as take.
§ 6.21 p.m.
§ Mr. Ronald Russell (Wembley, South)
The right hon. Gentleman the Member for Bassetlaw (Mr. Bellenger) suggested that we ought to have a new approach to this problem. I entirely agree with him, though I do not think the approach that I shall suggest is one with which he will agree.
What I complain of in all the negotiations which have taken place since the Common Market was brought into operation is the fact that we have stuck rigidly to one article in particular of G.A.T.T. which prevents us from tackling this problem flexibly. We were always told that we must follow G.A.T.T. I would ask why. Why is G.A.T.T. regarded as so sacrosanct? It was instituted thirteen years ago in entirely different conditions from those which apply today, when Europe had hardly begun to recover from the war. Nov, it is prosperous and the situation has completely changed.
I would suggest it is high time that Article I of G.A.T.T., the non-discrimination clause, was adapted to the entirely new conditions, because if it were, and we allowed tariff discrimination, which is about the only form of discrimination which is not taking place in the world, as I shall show in a moment, we should at once make the situation far more flexible and make it possible to bridge the gap between the Six and the Seven and the Commonwealth, which, I think, everyone is trying to do.
It is not as though G.A.T.T. had not beer violated itself. The overseas territories clause of the Treaty of Rome is, I think, a violation of G.A.T.T. to begin with. So is the Free Trade Area, because it excludes agriculture. As far as I am aware, international trade tariffs must be wholly removed, and that is not the case in the free trade area.
1142 Then there is the Central American free trade agreement between Nicaragua, Costa Rica, Salvador and Honduras, in which a long list of raw materials and manufactured goods are excepted from tariffs and other barriers, so that is not a free trade but a preferential area. It has been set up despite the fact that Nicaragua is a member of G.A.T.T., and yet no one seems to be very worried about it.
The second Afro-Asian economic conference which met in Cairo a few months ago put forward plans for expanding Afro-Asian trade. One of the provisos it made in the resolutions it passed was that the Secretary-General, who has been instructed to do an enormous amount of study which I think will take him ten year to do, was asked in particular to study the possibilities of implementing in Afro-Asian countries agreements for preferential trade. There were about 26 of them in the free world which attended this conference, apart from a number behind the Iron Curtain, and if 26 of those countries are thinking along those lines, surely there is a chance of getting something done to depart from this very rigid attitude. Among those 26 countries were India, Pakistan, Ceylon, Ghana, Nigeria and Cyprus, all of whom shortly will be independent members of the Commonwealth.
There is any amount of discrimination taking place in the world in other matters than tariffs. Almost every time the U.S. tries to dispose of some of its surplus agricultural farm produce it uses the methods of discrimination—not tariff discrimination but discrimination in some other form. For instance, a few years ago it agreed to supply Brazil with 138 million dollars worth of wheat and other farm produce over a three-year period taking payment in Brazilian currency, but most of the proceeds were to be relent to Brazil for economic development and the remainder was reserved for use in Brazil by U.S. Government agencies.
In other words, that was discrimination in favour of U.S. trade with Brazil by the U.S. in that agreement. Then a year later the U.S. made another agreement with Mexico by which 25 per cent. of the proceeds of payments for surplus produce was for loans to U.S. and Mexican business firms and a great deal of the rest was lent to the Mexican 1143 Government for economic development. During the fiscal year, 1957, no fewer than 40 agreements were made with 25 other countries for the sale of surplus American produce totalling altogether 1 billion dollars worth. This is discrimination with a vengeance.
Recently there has been flag discrimination made by the U.S. in her agreement with India. Recently there was an agreement between the U.S. and India for the shipment of 17 million tons of grains over the next four years. That agreement is governed by the U.S. Public Law 480 which requires that 50 per cent. of the goods should be moved in American ships. That is the equivalent of a ship a day for four years, half of them being American. During May of this year freight rates paid to U.S. ships engaged in this trade were 196s. a ton, compared with 70s. a ton paid to non-American ships. That is also discrimination with a vengeance. Indeed, American interests own nearly half the flags of convenience fleets which discriminate against British and other shipping.
Then every bilateral trade agreement negotiated with individual countries is really discrimination, because it says that country A will take certain goods from country B, and, therefore, country A is discriminating in favour of country B against all the other countries buying the same kind of goods. In the first six months of 1959 about one hundred reciprocal agreements were made requiring this between countries one or both of which were members of G.A.T.T.
That shows surely that there is a tremendous amount of discrimination going on in the world, not necessarily tariff discrimination, but discrimination in other forms, in spirit in violation of Article I of G.A.T.T., and my complaint is that we are sticking rigidly—not only ourselves—to this article of G.A.T.T. when if we were only to loosen it a bit we could find a means of solving the problem between Europe and the Commonwealth.
I maintain that non-discrimination is a complete mockery of words. It has led to deliberate discrimination in different ways, not necessarily by tariffs, but by other means. G.A.T.T. is no more effective in enforcing non-discrimination 1144 than, for example, the Volstead Act was before the war in enforcing prohibition in the United States, with the difference, perhaps, that whereas the United States Government did not engage in any illicit liquor deals, it is one of the leading bootleggers concerning discrimination.
I beg the Government to look at this problem again and see whether it would not be worth tackling the question of Article I of G.A.T.T. with the other members of the Six or the Seven and, of course, the Commonwealth. Together, the European countries alone are nearly half the members of G.A.T.T. If we add the Commonwealth, that makes a still greater number. As I have said, the Afro-Asian bloc is looking in that direction. If only a lead were given, rather more favourable views might be taken towards revision of G.A.T.T. than have been taken in the past.
I believe that if we could loosen this inflexible and rigorous Article of G.A.T.T., there is a means of finding a bridge between the Commonwealth and Europe, whether in the form of secondary preferences or any other means which allow of some kind of discrimination. I support entirely what my hon. Friend the Member for Newbury (Sir A. Hurd) said concerning the vital part that some Colonial Territories play in our Commonwealth trade and how badly hit they would be if we were to abandon the Commonwealth preference system.
Consider, for example, sugar, which my hon. Friend mentioned. There is the Commonwealth Sugar Agreement and the Commonwealth preference system working in with it. What will happen if we abandon that, as we might well be forced to do, to give priority to European beet sugar if we were to go into the Common Market? The West Indian citrus trade is facing a great deal of worry with the further relaxation of import controls on citrus from the United States. What would happen to that trade? Can we abandon the West Indies and ruin all the citrus producers there? There is the oilseed industry of West Africa, in which Nigeria plays a great part and which is subject to Commonwealth preference in this country. Can we afford to abandon that and place a duty, possibly, on oilseeds coming from Nigeria and have to allow 1145 oilseeds from French West Africa to come in free if we go into the Common Market? It is impossible and unthinkable to place a duty on Commonwealth goods and to allow those from Europe to come in free.
The right hon. Member for Bassetlaw (Mr. Bellenger) said that we have to make the choice between going in and staying out. I submit that there is the middle way of getting rid of this rigid restriction of G.A.T.T. and tackling it on the basis of dovetailing our Commonwealth preferential system with the Free Trade Area and the Common Market. That is the way I want to see followed and that would be the way more than anything else of strengthening the free world against whatever it may have to meet from behind the Iron Curtain.
Look at the Commonwealth today. Look at the vast areas of Canada and Australia, which are undeveloped and which need only men and money to expand their production. Look at the millions of people in India, Pakistan and Ceylon, and Malaya for that matter, in Asia, and countries like Nigeria, Ghana, Kenya and Tanganyika, in Africa, whose standard of living needs raising and who would provide enormous markets if only we would do that.
It is said that there is an expanding market in Europe. There may be. It is vainly a replacement market rather than an expanding market. Look at the enormous potential of the Commonwealth, however, if only we can develop it in that way. I want to see greater unity between Europe and the Commonwealth, it we can do it without weakening the present association with Europe in any way, because I believe that that is the best way of strengthening the West against any menace from behind the Iron Curtain.
Therefore, I appeal to the Government to consider this plan again and to see whether we cannot relax the rigid restrictions imposed by G.A.T.T. and find a flexible system of dovetailing our Commonwealth preference system with the Common Market and the Free Trade Area. It is because we seem to have reached an impasse in our present negotiations that I say that I want to see greater unity between the Commonwealth and Europe, because I believe that Europe needs the Commonwealth 1146 and the Commonwealth needs Europe. I believe that we can do it on this basis and I ask my right hon. Friend the President of the Board of Trade seriously to consider it.
§ 6.36 p.m.
§ Mr. Frederick Mulley (Sheffield, Park)
; Having debated these matters together in Strasbourg, the hon. Member for Wembley, South (Mr. Russell) will not be surprised to know that I share his views about G.A.T.T. and the need to revise it. No doubt, the hon. Member was as disappointed as I was on reading The Times on Saturday morning to find that the Chancellor of the Exchequer; if he was correctly reported, had been talking about the sanctity of G.A.T.T. in the recent O.E.C.D. negotiations. No doubt, the President of the Board of Trade will be enlightening us about that in due course.
I also agree very much with the hon. Member for Wembley, South about the need to associate the Commonwealth with Europe. While, if we went in without any provisions about the Commonwealth, that would be difficult, the hon. Member will agree equally that if we were to make no arrangements with the Common Market, many Commonwealth countries would be in a difficult position because of the preferences granted to the French overseas territories.
In this debate, for which we have waited a long time, it is rather a surprise that many hon. Members seem to be approaching the question as though it were a new issue. Speaking without any political bias, it is a sad commentary and it is a reflection on parties on both sides of the House that four years have passed before we make an effort to confront public opinion in Britain with the real issues. It is an extremely difficult problem. It is not easy to say that we should came down hard this way or that. Like every other difficult political and economic problem, it is a question of taking a balance of a number of considerations.
I do not propose to go into the many technical difficulties which arise whatever form we think that association with Europe should take. Probably the President of the Board of Trade has heard me say on other occasions that I do not think there are any technical problems that could not be overcome if the political will exists to do so. If the many 1147 experts engaged had all been locked together like a jury in a room and told that they would not come out again until they found a solution, I am fairly certain that, despite the difficulties with which the President of the Board of Trade struggled over so many months during the Free Trade Area negotiations, a solution would have been forthcoming.
I see this as being much more of a political than an economic problem. Many of us—perhaps all of us, in various ways—have underestimated the nature of the political problem as it is seen by our friends in Europe. There is something about the European idea which, one can only say, is rather similar to our devotion to the idea of the Commonwealth. It is difficult to get someone in Europe to understand why the Common wealth means what it does to us. In the same way, Europeans find difficulty in persuading us as to the mystique, the very difficult to explain idea, that they attach to European unity.
If the President of the Board of Trade will forgive my saying so, I am not at all sure whether he or his advisers appreciated 'the force of this political idea when the free trade negotiations were going on. It is because of the force of European unity and the European idea, as it is called, that any attempts that we have made in the past and any that we might make in the future to divide the Six are bound to fail. It is rather like a family argument. Members of a family may argue among themselves, but once an outsider comes in they stand firmly together. If we want to influent them we shall probably have to become a member of the family.
I want to give some reasons why I think that it is an overwhelming British interest that we should become closely associated with the Common Market. The first and most compelling reason is the dynamic expansion one finds today in Europe, and indeed, not only today. Taking the 1950s as a whole, one finds that industrial production has expanded in the Six at twice the rate in the United Kingdom. All the evidence is that it will continue to expand at at least twice the United Kingdom rate and possibly more.
It is true that only 14 per cent. of our trade is with the Common Market countries, and perhaps there is a tendency 1148 to exaggerate the economic consequences of our exclusion, but, of course, that 14 per cent., even if we were unable to increase it, would itself grow in terms of the expansion of the economy. I am worried less about whether we might not be able to do so much trade with the Six as about the enormous increase in the competitive character of their exports in third markets as compared with our own. If the Six rationalise their industry and modernise it by further investment, then, having a home market bigger than that of the United States on which to base their economy, they will make life more and more difficult for exporters in third markets, including Commonwealth markets.
There is finally the question of investment, to which my right hon. Friend the Member for Huyton (Mr. H. Wilson) referred and made a point which otherwise I would have sought to make. We are losing investments because of the existence of the Six and our exclusion from them. It is interesting to note that British firms are already making plans and, in some cases, have set up plants in Europe to enter the European market in that way. While that, to some extent, safeguards the interests of the shareholders, it is a bad thing from the point of view of the workers who otherwise would be engaged in making those goods here.
It is perhaps an unusual commentary on the way of the world that the so-called laissez-faire Governments of the Six are being forced by the Economic Commission to undertake much more planning than they otherwise would have done. I say this because I do not think that there are any economic reasons to prevent our joining the Six. On the economic plane, the Free Trade Area was an attempt to obtain for us the economic benefits which joining would have brought about. It is a gross exaggeration to suggest that on the economic plane joining the Six would mean the economic subjection of this country to some supra-national authority. Article VI speaks only of co-ordinating economic policies. There is nothing in the Treaty of Rome to suggest that our internal economy would be subject to pressure.
§ Mr. Peter Kirk (Gravesend)
Would not the hon. Member agree that joining 1149 the Coal and Steel Community, which the Government have agreed to re-examine, would involve a greater loss of sovereignty than joining the Common Market?
§ Mr. Mulley
I agree. It would have much more far-reaching effect in that respect than joining the Common Market.
§ Sir John Maitland (Horncastle)
Will the hon. Gentleman tell us absolutely clearly whether he means signing a treaty along the lines of the present Treaty of Rome or whether he means what we all mean—a closer joining together with the community of Europe?
§ Mr. Mulley
I am glad to have that intervention, because it may possibly permit me to spell out what I personally have in mind at greater length than otherwise I would have dared to do.
It will be extremely serious if we do not come to some economic arrangement with the Common Market, and we all agree with the Motion which the Government have put before us today. The only question is whether we can achieve its objects. My point of view is quite simple. I look to the Government to co exactly what they have now put on the Paper. If one, two or three years from now the economy of the country is affected and my constituents are in difficulties because of the Government's failure to come to terms with this problem, I shall hold Her Majesty's Govern-men completely and absolutely responsible.
The problems, however, are not essentially economic. First, there is the political problem. Secondly, there is the problem of agriculture, and thirdly, the problem of the Commonwealth. We must understand that these problems will become more and more difficult to solve the longer we wait. It is always more difficult and more expensive to buy shares in a going and expanding concern than it is to buy them when the original prospectus is issued.
Ten years ago we had on offer the leadership of Europe. There is no point in going in great detail into the sorry story of how we let it slip from our hands. There was, first of all, the invitation to join the Coal and Steel Community, 1150 which—I think now wrongly—the Labour Government of that time declined. Then, and this was crucial, there was the European Defence Community. We could have belonged to it and could have saved the Community for a cheaper price than we paid afterwards by committing four divisions and an Air Force to supra-national control and placing such a large proportion of our forces under an institution which requires the consent of other Governments before, we can withdraw them. I accept that as being right, but why was it not done a little earlier?
The greatest mistake of all, of course, was that we did not participate in the negotiations that preceded the Treaty of Rome. At least I have a clear record on that, because I said this in this House before the Treaty was signed. This is not a far-reaching Treaty spelling out federation. It is more like a register of bargains and special circumstances between countries, and had we participated we could have had our special circumstances as well. If the House does not take this from me. I am sure, that it will certainly take it from President de Gaulle. President de Gaulle is far more nationalist than any hon. Member here, and if President de Gaulle can accept the Treaty of Rome, surely there is nothing in it that should be impossible from our point of view. There is a linguistic difficulty here, because "federation" on the Continent means a looser idea than the word means in the strict term of British political science.
It may well be that without Suez and the change of Government in France the Free Trade Area would have succeeded. Now we are left with E.F.T.A., which I think and said was a mistake, but having committed ourselves to it we have to stand by it. In all these negotiations one of our difficulties is that we have not learned the Continental approach whereby one makes a great declaration of faith in a preamble and then in the appendix one makes all kinds of special reservations and exemptions. It is true that the present Prime Minister and Minister of Education and other right hon. Gentlemen opposite learned this fast in Strasbourg between 1949 and 1950, but somehow or other when they took office they ceased to declare their belief in European unity. The political 1151 problem is that, whether we like it or not, we are bound for reasons of defence and foreign policy to work with members of the Six in N.A.T.O.
The Prime Minister himself laid down the principle and coined the term "interdependence" when he said that no country today, however strong, could have an independent policy. All we sacrifice in the foreign field by association with, or belonging to the Six is possibly the right of the British Prime Minister to pick up the telephone and ring up the President of the United States, as he did over Suez, and be told, "No". That is probably the only field of independent action that would be lost if we adhered to the Treaty of Rome.
We have to get out of our heads the idea that we are still a big Power the size of the Soviet Union or of the United States. I repeat that there is nothing in the Treaty of Rome, which is unacceptable to us politically. We have to consider, too, the growing importance in the whole of this argument of the European Commission. As it proceeds in its plans for the development of the Community, it will be more and more difficult for us actually to join it. If we want to help fashion the nature of the Community, we can do so only by being a member of it.
If we were a member of it, we would have our say along with others, not only on the speed but on the direction in which it would move. We have one characteristic in common with the Six, and that is complacency. The stiking thing about the Six, the members of the Commission and all the people concerned is their complacency and their great confidence in the future. I think that complacency—less well placed in our case—is a characteristic of this country at the moment. It was epitomised by the Government's slogan, "You have never had it so good", at the last election. I suggest that this kind of approach, this philosophy of, "I am all right Jack" was not the inspiration behind the Battle of Britain or the merchant venturers about whom the Prime Minister spoke in his speech about exports recently.
We cannot afford to be complacent. The Community can be indifferent as to whether we join it or not, and prominent statesmen like M. Wigny, the Belgian 1152 Foreign Minister, and Professor Hallstein and others have said that the kind of arrangements they want—and this was the pattern of O.E.C.D. until recently—was that the association of other countries would have to be within the rules of G.A.T.T., and we should have no greater preference than that accorded to any South American republic that happens to belong to G.A.T.T. The Six can afford to take this view. There is no reason why they should consider giving an invitation or putting themselves out to accommodate us. We need to throw a brick through the window of the glasshouse of the Economic Community. The only member country of the Seven who can do it is ourselves. If the present Government ever throw a brick it will be a very small one tied to the end of a piece of string and will be yanked back with the Government saying that they did not mean it. What has done more harm to the cause of Europe than anything else has been our shilly-shallying and our dipping our toes in the pool and then pulling them out pretty sharply. This has actually discouraged many of our friends in Europe.
We have clearly to negotiate with Europe. We have to do so from a position which gets weaker every day. Laying down in advance the plans and terms on which we do business is not negotiation. We might have done that before the Treaty of Rome, but we cannot do that today.
In agriculture, happily, there is now a general consensus of opinion that there is no serious problem. We all understand, what was plain four years ago, that no one in Europe wanted free trade in agriculture and, therefore, no great problem was involved.
The Commonwealth is a more difficult problem. I do not think we can be associated with the Common Market unless we make provision for the Commonwealth to be associated, too. That is why I make a reservation about our unilaterally joining the Common Market as it is. Surely we can ask for our overseas communities and dependencies the same terms as are accorded to the existing members of the Six for their dependent communities and overseas territories as well. But we should also understand that, while the Commonwealth may as a political association 1153 remain firm in the future, there is no guarantee that they will continue to do trade with us.
In East Africa, today, one rarely sees a British car because German cars are cheaper and more suitable for purposes there. That does not necessarily mean that East Africa is opting out of the Commonwealth, because it is doing trade elsewhere. That is the pattern which will continue more and more as the Six, because of their size and greater technique, offer a better price and a better delivery date. The other difficulty is that of E.F.T.A.
I will try to satisfy the hon. Member for Horncastle (Sir J. Maitland) as to what I would prefer. In the first place, we must certainly recognise the Six as an entity and show—unhappily, it is necessary for us to show this—that whatever we do is not designed to disrupt or slow down the progress of the Common Market. Secondly, we have to try to provide not only for ourselves but for the other six members of E.F.T.A. as well. Thirdly, we have to try to get the best terms that we can. The point was made clearly by the hon. Member for Wembley, South that we cannot do this within the rules of G.A.T.T. I do not think that any solution is possible within the rules of G.A.T.T., although clearly it should be within the spirit of G.A.T.T. The spirit of G.A.T.T. means that it would lead to freer trade not to trade diversion.
Clearly, under the existing rules of G.A.T.T., only a free trade area, or a customs union is possible as a special arrangement. I do not think we can find a solution if we stick rigidly to this approach. If the choice is between G.A.T.T. or Europe, I would always choose Europe, and I hope that the Government will, too, when they come to a decision. I hope that the President of the Board of Trade will tell us something more about the discussions when the Swiss had to bully the Six into recognising the need for a provision still to seek a European solution in the new O.E.C.D. I have read only short reports in the newspapers, and I hope that the President of the Board of Trade will give us a full account of this very important development of O.E.C.D.
Those are the conditions. The way in which I would seek to do it is this. The Common Market countries, and particu- 1154 larly the French, have always referred to themselves as a club. I think that we should accept that and agree to join the club. In other words, we should agree to accept the preamble to the Treaty of Rome and the political and economic integration there envisaged. It is not spelled out at all, incidentally, in the preamble. In most clubs it is possible to have both full and associate members. If we accept that initially we can become only associate members, then the Six may well be prepared to accept our admission, the understanding clearly being that an associated member pays a lower subscription but gets a lower benefit.
In the eyes of the French and other members of the Six, what we have tried to do by our Free Trade Area arrangements is to get full benefit on a cheap subscription. That we can never do. We have to agree in principle to what is being done in the Community and we have to pay some subscription by way of political and economic co-ordination. We should have to agree to join as free members after a limited period of time, say five years, and, since we are members of E.F.T.A., we clearly have to get our colleagues in E.F.T.A. to agree to that arrangement.
We have to make a joint arrangement and I think that it is not impossible to get some arrangement whereby the Community's external tariff can be reduced by half against the associate members, while we in our turn give half rates on our external tariffs against members of the Community, with the understanding that those countries not disabled by neutrality and treaty obligations should become associate members for a probationary period of five years, and then become full members. In that period we must clearly make arrangements to fit in the Commonwealth members.
There is no reason why the Six should take any new initiative. There is no reason why they should not proceed as they are now doing, and rightly doing, with their own affairs, fast building up the economic and political strength of their community. Any initiative has to come from outside the Six. I hope that we are to have much more than the vague words of the Motion and that the Government will say tonight that they are prepared to take an initiative in this matter or, if they feel for some reason 1155 that they cannot do that, then at least that they will tell Europe that they will not take an initiative for one, two, or three years, or however long it is.
What is very harmful to us and to our friends in Europe is being one day in and the next day out. I hope that we will get an initiative from the Government tonight, recognising the full force of European political unity, understanding that only by accepting the principles of the Common Market can we hope to get a solution.
§ 7.3 p.m.
§ Mr. R. H. Turton (Thirsk and Malton)
There is an unreality about the Motion before the House which recognises the need for political and economic unity in Europe, because, quite clearly, our plans in that direction cannot be realised within the next decade, especially in view of the problems of the reunification of Germany and the disappearance of the Iron Curtain.
In that context, at times the hon. Member for Sheffield, Park (Mr. Mulley) was making things appear to be so easy and then, in his own honesty, admitting the difficulties when he came to explain matters. He was asked how he would see about joining the Common Market and at one time he said that he would throw a brick at the glass house, but I felt that that was not his solution. His solution was to enter the Community provided that he could get all he wanted in the way of the Commonwealth relationship.
The hon. Gentleman did not take much interest in agriculture and said that, apart from that, there would be no difficulty. The key phrase in his valuable and interesting speech was when he said that one must become a member of a family if one wanted to influence it. If that were one's model in life, one would become a polygamist. His difficulty, and in some ways it is ours, is that we already belong to a preferential system, the Commonwealth. No hon. Member on either side of the House, not even, I believe, in the Liberal Party, wants to abandon the free entry for Commonwealth products, or abandon our Commonwealth partnership. Even now, with its share of world trade declining, our trade with the Commonwealth represents 41 per cent. of our export trade compared with 14 per cent. 1156 represented by our trade with the Common Market.
I beg the hon. Member for Sheffield, Park not so lightly to throw away agriculture. Both parties are pledged to a system of support for agriculture.
§ Mr. Mulley
I dismissed it so shortly because I did not want to trespass unduly on the time of the House. If I had endeavoured to set out all the problems, and to give a complete answer to each, I would still have been speaking at 8 o'clock, and that would not have been popular. I would not throw away agriculture. I merely said that many of the doubts which were raised four years ago had now been dispelled.
§ Mr. Turton
I appreciate that hon. Members cannot make full speeches and that if they attempted to do so only two or three could be called during the whole evening. However, agriculture is important and we cannot allow this country to abandon a system of price support in exchange for the Common Market agricultural policy which is to be under a European agriculture commission.
In other words, we must ensure that this country has its own control of prices and its own influence on wages in agriculture. I do not want my constituents to be tied to a system of Continental agriculture in which wages are often half the level of those in this country, and with agriculture entirely different from the type which we know.
If we joined the Common Market and its agricultural arrangements, the price of bread would go up from 11d. to probably 1s. 1½d. while the price of food generally in the cost-of-living index would rise by 7½ per cent. I do not think that those who advocate our joining the Common Market have worked out what the effect on agriculture would be, let alone the effect on the cost of living.
Although he did not say so in his speech, when he interrupted his right hon. Friend the Member for Bassetlaw (Mr. Bellenger), the hon. Member for Sheffield, Park said that all the fears about the movement of labour were nonsense. He said that we would not have a problem with the miners, for instance, and that there is nothing like that in the Treaty of Rome.
§ Mr. Mulley
That was not me, but my hon. Friend the Member for Sheffield, Attercliffe (Mr. J. Hynd).
§ Mr. Turton
I am sorry it was from another part of Sheffield.
Article 48 of the Treaty of Rome says:The free movement of workers shall be ensured within the Community not later than at the date of the expiry of the transitional period.This shall involve the abolition of any discrimination based on nationality between workers of the Member States as regards employment, remuneration and other working conditions.
§ Mr. Turton
Like the hon. Member foe Sheffield, Park, I do not want to be too long. The point is that Article 48 allows the free movement of workers.
§ Mr. Turton
I hope that my hon. Friend the Member for Gravesend (Mr. Kirk) will be able to speak later, but Article 48 clearly allows the free movement of workers. That is why joining the Common Market would be the biggest blow imaginable for organised labour in this country.
What we are all agreed upon is the fact that Western European unity is politically desirable and ought to be recognised as such.
I regret that the right hon. Member for Bassetlaw recanted on the very good advice which Mr. Ernest Bevin once gave the House, that one should put one's cards face upwards on the table. That is where I believe we have made a mistake during the last three years. I think that we should have gone to the countries forming the European Economic Community and put our cards, and those of our Commonwealth partners, face upwards on the table.
I do not believe that it is too late now. We are one of the most important markets for the Common Market countries, the Six. Equally, some of our 1158 Commonwealth partners have an important stake in the Common Market countries. Kenya, Ghana and Nigeria send one-third of their exports to the Common Market countries. Tanganyika, Uganda and Pakistan send more than a quarter of their exports to the Common Market countries. It is, therefore, in our joint interest in the Commonwealth that we should negotiate as a Commonwealth.
My right hon. and learned Friend the Foreign Secretary, the right hon. Member for Huyton (Mr. H. Wilson) and even the hon. Member for Sheffield, Park counselled waiting, without action. I believe that the time has come to try to get round the table representatives of Europe with representatives of the Commonwealth and to work out a system of some accommodation between the two preferential areas, the Commonwealth and the Common Market.
My hon. Friend the Member for Wembley, South (Mr. Russell) explained some of the difficulties of that in relation to G.A.T.T. He also explained very vividly how nearly everybody except ourselves was infringing the provisions of G.A.T.T. G.A.T.T. is not meant to be chain armour to restrain. It consists of a sensible body of people. It consists of ourselves, the Commonwealth, and Europe. There is nothing hostile about it. Surely, it is before G.A.T.T. that one should argue this system. If, under G.A.T.T., one is allowed to form a new preferential area, or a Common Market, equally one should be allowed to revise the existing preference systems within the Commonwealth, and equally one ought to be able to work out a system of what my hon. Friend called "dovetailing" preferences between the two preferential systems.
This is nothing new. In 1949, my right hon. Friend the Prime Minister said:Within this area, the Empire and Western Europe, by the preferential system and not by the clumsy and restrictive devices of quantitative import restrictions and quantitative bilateral contracts, a flexible system can step by step lead to a restoration of convertible currencies…and other desirable things. My right hon. Friend the Prime Minister was there surely sowing the seeds for the future economic settlement of Europe, but somehow we have never gone on and worked towards making a success of that system.
1159 There is no reason why this Common Market preferential area could not be married to our Commonwealth preferential area. That would not be polygamy. It would be a working arrangement between two families coming together for their mutual benefit. Indeed, it would be for the mutual benefit of the whole world. It is vital that Ghana coffee, or Pakistan jute, should go in increasing quantities to Western Europe.
I see nothing but good coming out of an expanding Western Europe, and an expanding European Economic Community, but we must see that our partners in the Commonwealth get that advantage. I fear that if we do nothing, and allow the Commonwealth countries, one by one, to try to see what terms they can get, they will get far worse terms than they will get if we negotiate together, because we can at least give them a bargaining advantage. We can argue as one of the great import markets for Volkswagen cans, or French wines, or whatever it is. We can offer to take more of the commodities of Western Europe in exchange for Europe taking more of our Commonwealth primary products, in Asia and Africa.
The danger that I see in the last three years, and in the attitude adopted by some of my hon. Friends and same hon. Gentlemen opposite today, is that in our preoccupation with Europe we will find Asia and Africa drifting away from Europe. I believe that hon. Members on both sides of the House are devoted to solving that important problem. The need today is to increase the standard of living in the underdeveloped areas of the world. The underdeveloped areas of the Commonwealth are our responsibility, but their development is in the interests also of the countries of Western Europe.
There, as I see is the strength of Britain's position. Britain is the bridge between the Commonwealth in Asia, and Africa, and the European Community. Let us not forget that on that bridge she has great responsibilities of leadership, Which I beg Her Majesty's Government to discharge.
§ 7.17 p.m.
§ Mr. John Hynd (Sheffield, Attercliffe)
agree with one of the last points made 1160 by the right hon. Member for Thirsk and Malton (Mr. Turton) but with very few others. I agree with him entirely that the complications arising from agreements in G.A.T.T. should not be insurmountable. G.A.T.T. is an agreement which we have made freely with other countries, all of whom could find that certain modifications would be to the common advantage. That being so, there seems to be no reason why they should not be prepared to modify their own agreement. If agreements or situations have to be modified to meet the problems which we are discussing today, G.A.T.T. is one of the things that could be most easily modified, and with the least possible disagreement.
It appears to me that the general trend of the debate is irrelevant to the subject we are discussing. Much of the discussion has been about the necessity for increasing our trade with Europe and other parts of the world and of arranging a reduction in tariffs, not only in Western Europe but in Eastern Europe, and in Asia, America, and so on. That is all very fine and interesting, but it is a matter of our general trade relations with the other countries of the world.
What I understood we were discussing today was our attitude, as a country, and as a Government, towards the new Community of the Six, and whether it was possible for us either to join that Community or to become more closely associated with it for the purposes for which that Community exists.
The purposes for which that Community exists are not just the purposes of reducing tariffs and increasing trade between themselves. The Foreign Secretary started very hopefully when he drew attention to the fact that the Government were becoming more and more convinced not only that Britain could not fulfil her rôle—which he did not define—but that Europe would not be complete without us.
Then he went on to underline the dangers of a political division arising from this economic division. That seems to me the key to the issue which we should be discussing. Of course, we all like to think that Europe cannot be complete without us. The trouble is that Europe is beginning to think more and more that it can probably get along without us. Europe would much prefer to 1161 have us, but the very change of emphasis on the part of the Government and of the Or position Front Bench over the last two or three years shows pretty clearly that it is not that Europe cannot get along without us, but that we are gradually coming to learn that we cannot get along without Europe. That is what all the excitement is about and why the Government have put down the Motion today and drafted it in terms which could suggest that we were rethinking our position with a view to entering this European Community in some form. One of the reasons why the Opposition have not put down an Amendment advocating something more positive is that the Opposition is no more positive on the matter than the Government.
When the Foreign Secretary talked about the danger of political division he said that he did not want to develop the argument because so much had been said about it. But it is a pity that he did not develop it a little further, because this is the factor in the situation with which I am concerned more than any. The right hon. and learned Gentleman went on to say later that there was not too much time at our disposal if we wished to avoid a division in Europe. But we have been nearly twelve years discussing this matter, and it is rather frightening that after twelve years—with all the evidence which has piled up during that time and the admission that many of the old arguments used against joining in the original discussions on the Coal and Steel Community, the Messina Conference and the rest, can be seen in a much different light and that many of them are being rejected as irrelevant to the present situation—the Foreign Secretary can stand at the Dispatch Box and say only that there is little time at our disposal if we are to avoid a political division of Europe. He is right, and that is why he showed such concern about the situation which is developing.
The fact is that Europe is divided between the Communities of the Six and the Seven because of the policy, or lack of policy, of Her Majesty's Government. Probably some hon. Members opposite will say, "And of their predecessors". I am prepared to concede that, up to a point. But I would remind those who would say so that many of the situations which existed in 1946 no longer exist and one can balance or weight the 1162 responsibility as one wishes. The fact remains that within the last nine years we have had the present Government in office; the time is now short; the Government still have no positive policy and it is precisely their policy, or lack of it, which has led to the present dangerous division.
§ Sir Harry Legge-Bourke (Isle of Ely)
I think that the hon. Member was a member of the Government at the time when the whole question of joining the Schuman Plan came up. He will remember that the Labour Government—I thought rightly, although some of my hon. Friends did not—considered that the supra-national characteristics of the Schuman Plan made it absolutely imperative that we should not come in. Has the hon. Gentleman changed his mind?
§ Mr. J. Hynd
No, certainly not. I was trying to avoid going over old history by saying that one could weight the argument of respective responsibility of Governments by the change of situation which we have and the rejection of certain arguments that were used at that time.
I have certainly not changed my mind, but since the hon. Member raises the point, I was not in the Government at the time of the Schuman Plan conference but well remember what happened. After the experience of the war, and with the direct encouragement. indeed the lead, of the right hon. Member for Woodford (Sir W. Churchill), the present Prime Minister and the present Minister of Aviation were campaigning on the Continent to encourage those countries to make this move for the purpose of bringing an end to the strife which had divided Europe in several world wars.
They were anxious to take this opportunity while public opinion was ripe. Public opinion is always ripe for these great forward moves after such a calamity as we experienced between 1914 and 1918 and again between 1939 and 1945. Out of one came the League of Nations and the I.L.O.—tremendous and courageous gestures which could never have been made ten years later. After 1939 we had the United Nations and. following that, we had the developments which led to the Schuman Plan conference.
The reason why the Labour Government at that time felt unable to take part 1163 in the conference—if the hon. Member for the Isle of Ely (Sir H. Legge-Bourke) refers to the columns of HANSARD he will find that we were favourable to being a party to the conference and to taking part in the new experiment of the Coal and Steel Community—was the snag caused by the insistence of M. Monnet that before going to the conference we should indicate our acceptance of a supra-national authority. Our question was—a supra-national authority over what? Until we had the conference and decided what it was we were creating, there was a certain amount of reason for the British Government saying that it was a little premature to agree a form of political authority over something which did not exist and about which we did not know anything. But Europe, anxious to get on with the job, insisted on that provision and therefore, the then Labour Government were unable to take part in the original conference. They were in support of the idea and they were prepared to join, but, as I think Lord Morrison, then Mr. Herbert Morrison, said at the time, if we took part in the conference, the question of a political authority over whatever emerged there-from would become a practical proposition.
Since the point has been raised, it offers me the opportunity of developing a little further this question of a supra-national political authority and the change in the situation since that time; because since that time, not only has the Schuman Plan conference been completed and the new form of organisation over which it was desired to set a political authority become clear, but in fact it has been operating successfully for a series of years. In addition, we have a new community, the Euratom Community, functioning and the Common Market in operation. So the problem with which the Labour Party of 1949–50 was faced no longer exists. We can see what it is that exists, we can see the structure, and all that is necessary is to recognise the kind of political authority needed to operate that structure effectively.
When Members on both sides of the House suggest that Great Britain could become part of this European community except for one snag, that of the political authority, I become rather frightened, because ours is supposed to 1164 be one of the oldest democracies in the world. We are supposed to be the people who, above all, insist on popular political control of all the great movements and great responsibilities of authority. Yet in regard to this one which is being created and which we all say—or most of us—that we support in principle and would like to put into operation, we say, "But not if there is a political authority," whereas we, of all people, should be the first to say that we are prepared to join some of these great new organisations on condition that there is popular political control.
It was said the other day in my hearing that to talk in this sense is like saying that we should join the United States of America, if we wish to break down national barriers and all the rest of it. That may be so, but if this country, for any reason decided that we should like to become an additional State of the U.S.A., there is one condition which we would not lay down—that of refusing to take part in the Government. Indeed, we would surely insist that if we were joining the United States we would want to take part in the political authority. In the case of Europe, for some strange reason we say, "All right; but no political interference". That is a very curious argument for a country like ours.
I come to the question of the Commonwealth. There is no doubt that the Commonwealth has been one of the problems for this country. The great pity is that we did not go to Messina, as France did, and at Messina write into the Common Market Treaty provisions which would meet our problems of overseas territories and of agriculture in the same way as the French did. Now it is too late. That could have been done at the time, but it was not done. The right hon. Member for Thirsk and Malton, when dealing with the question of the Commonwealth, said that we must not forget the value of the strength and cohesion of the Commonwealth, the great importance of the link between this country and Commonwealth territories.
Here, again, is the fallacy of taking this argument in little bits and trying to examine each one separately. The same applies to the argument about agriculture. Those of us who believe we ought to be in this great dynamic 1165 European Community believe it because we believe also that, unless we are in, the Commonwealth will be one of the heavy losers. This country, isolated from Europe and probably antagonised among the European nations, will be much less significant to our Commonwealth partners than we are today. I would particularly remind hon. Members concerned about newly-emerging Commonwealth countries like Ghana and Nigeria, of another factor, namely, that Britain outside the European Community could well lead to a situation in which we would antagonise the new Commonwealth countries like Nigeria and Ghana, or alternatively drive them in antagonism with some of the emerging ex-French colonies.
§ Mr. Turton
Will the hon. Member make clear whether he would be willing or not willing to maintain Commonwealth free entry to get the advantages he envisages?
§ Mr. Hynd
I think that in the last resort I would be prepared to consider that, but I do not think it at all necessary, because there is no reason why we should not offer to the Commonwealth to give up the advantages we have in their markets—which are not very great anyhow and which are being reduced year by year—while giving them continued entry to our markets on the same basis as at present and getting the European countries to agree to give Commonwealth products the same free entry into their markets. I think that they would be prepared to consider that because they themselves would have the tremendous advantage of further trade with the Commonwealth.
Whether it were done in that way or some other. I do not think there would be any insuperable obstacle in this connection, but, in relation to Nigeria and Ghana and territories like that, what is happening in the Six now is that, particularly with the assistance of German money, vast sums are being invested in the ex-French territories which are emerging to independence. I would remind the House that each of those ex-French colonies as it received its independence applied for associate member 1166 ship of the Common Market. They are now free members or associate members and are supported to the extent of hundreds of millions of pounds for developing industries which will compete with the more highly-developed territories of Ghana and Nigeria.
Having developed these competitive goods and having free entry into this the greatest dynamic market of the world, they will then have tremendous advantage over Nigeria and Ghana in the marketing of bananas, palm oil, coffee, cocoa and the rest. The probability is that the trade of these emerging Commonwealth countries in Africa will go down very seriously and that could lead to a most unhealthy situation as between our African territories and the French ex-colonial territories. I am concerned about this position because I am quite confident that if we were members of, or in some form so closely associated with the economic Community as to make no difference, this kind of problem for the Commonwealth and for Africa could well be avoided.
I turn to the question of agriculture. One cannot develop all these arguments, but a great point was made by an hon. Member opposite about the difference in the two systems—the controlled market on the Continent and our own system of support of prices. Again, that is a matter for adjustment of the two systems, or possibly the absorption of one system by another, I cannot be impressed by the argument that we have to maintain our support of prices in this country, because the lesson of two world wars has taught us that we cannot afford to leave ourselves wide open to another aggressor. If anyone thinks that this country is going to be faced with another world war lasting about six years in which we would be surrounded by submarines and faced with starvation, he is a little out of touch with the times. I do not think that is the form which future wars will take. It is one of the lingering fallacies about the agricultural position which we can well eliminate from this discussion.
Another point that I should like to clear up is the question of mobility of labour. When I objected to what was said by my right hon. Friend the Member for Bassetlaw (Mr. Bellenger), the Minister got hold of a copy of the Rome Treaty and gleefully looked at it to see if 1167 mobility of labour was provided for. He was very triumphant when he found that there was such provision. My right hon. Friend equally gleefully handed me a copy of the Treaty so that I could see that it was in fact the case that the mobility of labour was provided for. But what I said in my interjection was not that there was no provision for such mobility, but that the provisions in the Treaty were not provisions which said that there should be an unrestricted flow of labour between the countries.
I have not a copy with me now, but hon. Members can check what Article 48 of the Treaty says. The right hon. Member for Thirsk and Malton read in rather sinister tones one of the main provisions, that there should be no discrimination between the workers of the nations in matters of wages and conditions of employment. I should have thought that the whole House would welcome that. There is to be no discrimination of race, colour, creed, wages, conditions of employment and the rest, but that has nothing to do with freedom of movement. Where foreign workers are working side by side with national workers there should be no discrimination, but the Treaty then provides that foreign workers can go to another country if they have a job already offered to them.
§ The President of the Board of Trade (Mr. Reginald Maudling)
Article 48 provides in the first paragraph for free movement of workers without qualification. The next paragraph says that there shall be abolition of any discrimination and the next paragraph says that it shall include the right to accept offers of employment and does not restrict it. Therefore, my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) was absolutely right.
§ Mr. Hynd
May I point out, with all respect, that when it provides that there should be provision for the free movement of labour, it goes on to tell us what that free movement means and, if we look further on in the Treaty, we find another section which also provides that it shall be subject to such regulations as may be adopted, and so on. So that the whole of the section is ringed in with these checks which make it quite clear that there is no intention that there shall be complete and unrestricted freedom of movement of labour.
1168 I believe that certain of these regulations are already in draft, and that one is that the movement of workers to a particular district in another country shall be permitted in so far as it does not affect the conditions of the local workers or the prospects of employment of the local workers.
§ Mr. Maudling
The right hon. Gentleman is right in saying that these points are made in paragraph 3, but they in no way limit the complete freedom which is set out in paragraph 1, because the former is included in the latter and does not limit it.
§ Mr. Hynd
I cannot read out the words because I have not them here. If the right hon. Gentleman will read carefully the Article about the regulations which may be introduced, he will see that it is clear that that Article is for the purpose of ensuring that there is no indiscriminate mass movement of workers from one country to another. In any case, this can easily be confirmed or otherwise by careful reading of the Treaty. [Laughter.] I do not know what the amusement is about. I suggest that hon. Members should read the Treaty carefully. [HON. MEMBERS: "Hear, hear."] When hon. Members say in the House, as my right hon. Friend the Member for Bassetlaw said, that in the Treaty it is provided that there shall be unrestricted movement of labour, I must point out that this is not true, that there are provisions for regulations and that specific conditions are laid down in the Treaty under which such movement can take place.
I should have dealt with a number of other points but for the interruptions, and I do not want to take advantage of them to delay the House much longer. But I should like to deal with E.F.T.A. Much has been said about our ties with the E.F.T.A. countries. It has been said that we cannot desert our E.F.T.A. partners or sell them down the river, otherwise "Perfidious Albion" would once more be a phrase printed on the minds of our Continental friends.
Nobody has suggested anything of the kind. Many of my hon. Friends, and some hon. Members opposite, say that we should never have taken this stupid step, which was interpreted as a defiance of the Common Market group even if it was not so intended. I know that we 1169 talk about building bridges and making it easier for the non-members to negotiate with the members, but whether the Government are prepared to admit it or not, and whether it is true or not, I assure the House that the general impression among the members of the Six is that the E.F.T.A. was formed for no other reason than to enable us to press a harder bargain with the Six. That is unfortunate, but since E.F.T.A. is in existence, clearly we cannot just walk out of it and leave the other members.
We have brought Austria, in particular, into a very difficult situation, in which, because of our exclusion from the Six, she is left on the other side of the Six, trying to maintain a community with us over the heads of the Six, when her conventional trade has been mainly with Eastern Europe and Germany. She is now having to try to fit herself into a curious community of Baltic countries and Britain, and she is worried about the implications in respect of her neutrality arrangements with Russia. Switzerland is in a less difficult situation, politically, but geographically she is in the same position, and so far she is still concerned about her neutrality.
We cannot walk out of E.F.T.A. and say that we are no longer interested in it. But there is no reason that we should. I reject the proposal made by my right hon. Friend the Member for Huyton (Mr. H. Wilson) that in a spirit of magnanimity we should go to the great community of the Six, which is growing in its independence and confidence, and say, "One solution of this problem is that you should join our little Seven". I will not try to analyse the economic implications of that, but I can see the political implications at once. The mood of the Six at present is a mood of great confidence and great dynamism. They are going forward without England. M. Spaak said in 1940 in London that after the war Europe would unite under the leadership of Britain or she would unite without Britain. They now feel that they have no alternative but to unite without Britain. This places us, in our near panic, in a position in which we are worried to death about it, and we offer one solution—"All get together and join us"; but that would not work, and it would be psychological blunder to make the offer.
1170 In fact there are many other possibilities which I could suggest. Personally I believe that the only proposition which will have any effect at all on the new Community is for us now to make a clear declaration that we not only welcome the new unity in Europe and are prepared to support it up to the limit but are ourselves prepared to join the Community of the Six as a full member. We should say that because of the way in which things have developed, largely because of our lack of a policy in the past, we realise that there are certain difficulties to be adjusted, certain misunderstandings to be cleared away and certain adjustments to be made about Commonwealth trade; and that we therefore hope that the Six will meet us to discuss the elimination of these obstacles in order to make it possible for us to join the Six as a full member.
I know that many hon. Members on both sides of the House will reject that idea. I simply say that it is the only thing which will satisfy the Six at present. They may be wrong, but it is well known to every hon. Member Who has had any contacts with leading personalities in Europe that the Six are now in a mood in which they are a little tired of our attitude.
When the Minister of State went to Paris and made the offer about Euratom, it had an impact, but there was a great deal of doubt as to what it meant. Suggestions were made that it was a new departure in policy and that the Government at last meant to do something. It was suggested that this was a way of getting through the door and that if we joined Euratom and the Coal and Steel Community, then we must come into the Common Market, too. There were, however, great doubts, and people asked, "How many more of these gimmicks will you offer? Why not say that you want to come into the new Community?"
Many of us tried to persuade them that something serious was intended, but we were surprised today when the Foreign Secretary said that there was nothing in it at all, that it was not a definite offer, that it was not a change of policy and that it was merely a statement that we are prepared to discuss the possibilities. This is what people in Europe suspected when they first heard it. Some of us tried to persuade them that it was not 1171 so, but now that this has been confirmed they will say, "What kind of a gimmick will they offer us next?"
The Six have made a good start, and they are conscious of the fact that, as wars and crises recede, so this development of theirs becomes more difficult. They are very conscious of this and they are determined to go ahead with it. They are growing more and more impatient of anybody who tries by any means to hold it up or who cannot be convinced that they are serious about it.
I therefore believe that if this debate is to achieve anything at all, it can do so only 'by a representative number of hon. Members on both sides of the House making it clear that this is not a party question and that on both sides of the House there is sufficient drive towards this country joining the new Europe to give a little more heart and encouragement to those who are getting on with this vast experiment.
We must show that many of us who take that attitude are taking it not because we want to encourage anyone in any risky adventures. Whatever we do would be a risky adventure. But we are taking it because we are convinced that history shows that as communities grow from small into larger communities and then into great political communities, there is never any going back. The growth of those communities throughout history has shown that it has always been to the advantage and never to the disadvantage of the generality of the new community.
§ 7.50 p.m.
§ Mr. Maurice Macmillan (Halifax)
Very many hon. Members are trying to catch your eye, Mr. Deputy-Speaker, so I shall be as brief as possible. I am sure that the hon. Member for Sheffield, Attercliffe (Mr. J. Hynd) will forgive me if I do not follow him in his arguments, tempting though it is. Nor do I think it necessary to rehearse all the economic arguments in detail. In passing, however, may I say how delighted I was that the right hon. Member for Huyton (Mr. H. Wilson) made the point which he did about diversion of investment.
I did manage, both in an earlier debate in this House and certainly at the W.E.U. meeting, at Paris, to, produce a large number of figures—which, I hasten 1172 to assure the House, I shall not weary it by reading again—showing that a grave danger has already started of British and European investment being diverted to other countries in Europe rather than going to the under-developed countries in the rest of the world. There is also a danger of United States capital being unnecessarily spread throughout Europe and to the detriment of this country. The third danger, which the right hon. Gentleman also mentioned later in his speech, is that we should be driven to over-reliance in our exports on consumer goods.
As I see my right hon. and learned Friend the Foreign Secretary here, I hope that the Chancellor of the Exchequer will turn his attention to improving our export technique and to encouraging further investment, and I also hope that the Treasury will henceforth keep a rather more open mind on fiscal and other forms of economic policy to meet these dangers, whatever the European solution in detail may be.
I thought that there was almost a touching unanimity between the two Front Benches today, in view of the programme for the rest of the week. Both were reluctant to hurry into the Rome Treaty, and, despite the anger which I roused from my Labour colleagues in W.E.U. by saying so, I think that, again today, the Opposition Front Bench was even more cautious than the Treasury Bench, although there was very little in it.
As one who has in the past joined those who blamed various Governments for not giving a lead in Europe in time, it is with immense reluctance that I think that at this moment probably the right course for the Government to pursue is the one of inaction which they have indicated this afternoon. I do not think that we can join the Common Market. Nor do I think, despite what the hon. Member for Attercliffe has said, that the Six would necessarily welcome it. We should not necessarily be accepted if we made a direct approach now and said, "Here we are; on bended knee we ask forgiveness. May we sign your treaty?" Nor do I think that any British Government could properly make that gesture in the circumstances.
Despite the fact that we cannot sign the Rome Treaty now, the Government 1173 might have framed the Motion with a little more enthusiasm. It refers to the very major needs of the future—the raiding of the Iron Curtain, the solution of German unification, and so on—but it does so in terms very much more suitable to a Victorian father welcoming a suitable young woman with a suitable dowry as his suitable daughter-in-law. I think that that is perhaps what the right hon. Member for Bassetlaw (Mr. Bellenger) meant when he talked of the efforts which the Government could make to project a more pro-European image of itself in the rest of Europe.
At this moment it is very hard to say just what sort of action the British Government can take to give a load, but there are one or two things we can do. I do not think that saying that we are willing to sign the Rome Treaty on conditions which have already been rejected by European Governments would give a lead, but there are certain other things that we can do.
We can make it clear that we know what the situation is, that we accept it and, indeed, welcome it. Despite the different views about the mobility of 'atom, one facet that we must accept is 'that perhaps confusion arises because some of the European countries which signed the Roman Treaty did so with mental reservations which it would not he correct for a British Government to make. If we sign the Treaty we must accept all its implications. We cannot sign it and then, at a later stage, say, "We did not quite mean it to be taken like that; we will put in a reservation about the mobility of labour"—or whatever it is.
We could show Europeans that we know what the situation is and are ready to make a fresh approach on the basis of drawing the Six and the Seven closer together, including, perhaps, the method referred to by the right hon. Member for Huyton and which, I think, was first suggested by my noble Friend the Member for Dorset, South (Viscount Hinchingbrooke)—that the Six should collectively join the Free Trade Association. In doing this, it is very important to show that we are not willing to be bullied, that we will not accept the blame for all the failures of the past, but that if there is blame to be apportioned other countries must bear the burden for 1174 it as well. This may involve doing what is the hardest thing for any enthusiast to do—waiting. However, I am not sure that the delay is necessarily harmful to British interests.
There are certain difficulties which are shown by the sort of reservations mentioned by the right hon. Member for Attercliffe, certain difficulties which the signatories of the Rome Treaty are finding in implementing some of its provisions—a recent example concerned the terms of admission of Greece. As time passes some of the details of the Rome Treaty to which we objected may be found to entail difficulty for some of the signatories, and our approaches may become more welcome because of the delay.
We should use this period of delay wisely. We could study what the situation is at home and the methods which we can develop to meet either possibility—whether we do or do not succeed in getting a closer association within the next few months. We can build up the strength and unity of the Free Trade Association, not with a view to defying the Common Market but more with a view to showing the whole of Europe that the sort of association that we originally planned and pleaded for can work without some of those details that we originally objected to. It is not a question of showing them that the Free Trade Association is better than the Common Market, or more powerful, or that we can do without the Common Market, but, more perhaps, of reassuring them that it can work without those provisions of the Rome Treaty which we found to be unacceptable.
During the delay there is a great deal that we can do to study in the Commonwealth what preferences might be given away. I am not as optimistic as some people about the willingness of the Europeans to give a quid pro quo, but there is work to be done in detail as to how we can get a closer association with Europe without damaging our Commonwealth interests and the interests of the Commonwealth.
We can also co-operate with all the European countries in O.E.E.C. in planning aid for under-developed countries. I must here make a factual correction. German capital through the Common Market has been invested in the 1175 Common Market countries. So far the Germans have refused to let their capital go to countries outside Europe through the Common Market organisation.
§ Mr. J. Hynd
But in the Common Market organisation they have the development fund, to which Germany is committed to make very vast contributions.
§ Mr. Macmillan
That is so, but the contributions are limited to contributions in Europe, and it is France that is investing in the ex-French possessions in Africa. Of course, it is perfectly true to say that the capacity of France to do that may be increased by investment of German money in Europe, including France, but, for us, that is not helping the situation in regard to the other underdeveloped countries, especially in Africa, but is making it more difficult.
We must make sure that our position is clear; that we are not trying to modify the internal arrangement of the Six; that we are not trying to do anything to their detriment or to destroy their unity in any way; but that we are trying to include that unity in a wider economic and political association. I think that the sort of pressure that this debate can give is helpful. The mere fact that when I first started speaking in this House on European unity, nearly five years ago, there were never more than half a dozen hon. Members in the Chamber, and that now there are 20 or 30 trying to speak, is an indication not only here but to the rest of the world of how much more widely spread the desire for association between the United Kingdom and Europe now is.
The difficulty about signing the Rome Treaty with certain conditions, as has been suggested, is that we are not then joining a Common Market, but turning it into a Free Trade Area with conditions that have already been rejected by the other members. I therefore accept—though, I admit, reluctantly—that we cannot join the Common Market as it now is, but I wonder whether the Government would indicate whether or not we are willing to join some sort of Common Market. I ask my right hon. friend the President of the Board of Trade to say so tonight.
Some time ago, General de, Gaulle made a speech, to which the hon. Mem- 1176 ber for Sheffield, Park (Mr. Mulley) also referred. It is true that in that speech General de Gaulle accepted the Rome Treaty, but he equally indicated his wish that individual countries in Europe should retain their identity, and that their co-operation should be of the sort that led to what he called a confederation rather than a federal union, with supranational authority and so on.
I shall not go into the details now, but I am sure that the President of the Board of Trade has studied them very closely, and I would ask him to tell us tonight whether he accepts those ideas. After all, General de Gaulle's views on that subject are worthy of consideration, and perhaps it would help if my right hon. Friend could give the assurance tonight that the British Government are willing to take up those ideas, and to use them as a basis for future negotiation.
§ 8.3 p.m.
§ Mr. R. E. Winterbottom (Sheffield, Brightside)
I think that the hon. Member for Halifax (Mr. Maurice Macmillan) was somewhat confused about the difference between the Common Market and a free trade area. I do not press that matter, but he raised three other points to which a reply is due. He spoke of the suggestion of my right hon. Friend the Member for Huyton (Mr. H. Wilson) of the Common Market coming into association with the Free Trade Association as a kind of eighth partner in that Association.
I might say, in passing, that I believe that suggestion is doomed to failure as, indeed, is any other suggestion unless there is for the Six member countries of the Common Market the principle of a Customs union. Therefore, association with the Seven in the Free Trade Association—which is quite completely different in regard to the external tariffs in the Common Market—will be something quite against the principles which, I believe, they would accept.
The hon. Gentleman also mentioned a problem about which there was controversy between my hon. Friend the Member for Sheffield, Attercliffe (Mr. J. Hynd) and the President of the Board of Trade—mobility of labour. I interjected to say that the mobility-of-labour clause in the Treaty of Rome was conditioned by the fact that under the regulations of 1177 the Six, workers can move to another country only to take up jobs actually offered to them when it has been found impossible to recruit workers in the locality concerned. In addition to that, there are guarantees against a quick change of labour in the self-same clause of the Common Market regulations. I have that I have made that clear, and I think that if the Common Market Treaty is examined I will be found to have rightly interpreted it.
The hon. Member for Halifax said that he thought that the Common Market countries did not want Britain in association with them. I would refer him to an article in the Daily Mail of last Thursday—and the Daily Mail is certainly a newspaper whose reporters look objectively at these matters. That article said that the Six want Britain in the Common Market. It quotes Professor Hallstein, the President of the Common Market Commission—described in the article as the "uncrowned king of the new Europe" as saying:It is not a question of whether we want Britain, but does Britain want us? This uncertaking"—the Common Market—is not complete without Britain.That, I think, belies the hon. Gentleman's statement, and also belies many of the statements of many Ministers as to whether the Common Market countries wait Britain or whether Britain wants to go into the Common Market—
§ Mr. Maurice Macmillan
I was not, I think, quite as dogmatic as the hon. Member makes me out to be. I said that I was not sure whether or not the Six would welcome us. I thought that there was great argument on both sides. I read that article. I have talked to a large number of French Parliamentarians, who would certainly welcome us, and, also, to a great number of French industrialists, officials at the Quai D'Orsay and others, who certainly would not. I think that it would be very unsafe to be dogmatic about whether the French or the Community would welcome us on their terms. They certainly would not welcome us on ours.
§ Mr. Winterbottom
I apologise for saying that the hon. Gentleman was dogmatic, but he certainly gave me that impression. What I wanted to impress upon him was that the situation was not 1178 quite so rigid as I gathered from his speech, but that there was a certain flexibility about it. In speaking to Continental politicians belonging to countries in association with the Common Market, I have found an earnest desire to see Britain in it, and playing her part in the progressive intergration of Europe.
I must confess that my first compelling urge in speaking tonight was to analyse the speech of my right hon. Friend the Member for Huyton. I congratulate him on a rather splendid review of the European situation as it is. He was quite masterly in dealing with the financial implications for Britain if we failed to participate in the movement towards central European integration, but he gave only a little peep into the future and avoided a very straight look.
In fact—and I told my right hon. Friend that I would say this—I think that his speech was a kind of skeleton with no entrails, a shape of things to come without any attempt at a positive answer to the problem which we in Britain must face, whether we like it or not, if we are to survive both economically and politically as a leading European Power. My right hon. Friend reminded me of my old grandfather who, when I went in one day with a bleeding nose from a boyish prank, said to me, "Laddie, you will lose a lot of battles in your life, but I hope that you will never lose a challenge." I think that my right hon. Friend the Member for Huyton today refused the challenge of the Common Market issue in its relationship with Britain.
Perhaps my right hon. Friend is like so many on both sides of the House, and, indeed, like the parties in this House; they do not seem to want to face the issue. I regret to say that my own party is among them. They find it much more difficult to make up their minds than to find what they hope will be a successful dodge from the issue. Let us face this fact, and I give my considered opinion on the matter: we are dodging the issue of the Common Market, both economically and politically, and all that is implied by political association. It is because I believe that we have tried to find a successful dodge that we are in the present situation with regard to European integration.
Events in the last three years have proved conclusively—and I think there 1179 are very few Members who will contradict this statement—that the British conception of a free trade area cannot be negotiated with Central Europe, enabling us in future to participate in a market embracing 150 million people, unless we join the Common Market. We must face that fact, whether we like it or not. If we are not prepared to face it, we are simply dodging the issue. It is important for Britain's political prestige and economic well-being that we should face this issue now.
This weekend I received a document which I was rather surprised to receive. It was signed by many prominent people in this country, including many hon. Members on both sides of the House. It said:Time is running short and there may be only a few months left for a new approach before the Common Market enters its new stage of integration.I call the attention of right hon. and hon. Members to that statement—"Time is running short". It is said that we should re-examine the British position with regard to the Common Market, and I believe that that is right.
That document represents the view of many Members of this House and many more people in the country that the time has now come for us to join the Common Market. Whether we like it or not, we must condemn ourselves for the fact that even before the Common Market was instituted, and even before the Rome Treaty became applicable, we have negotiated with great cleverness but with very little sincerity.
In proof of that, I want to quote from a report of a committee of the Deutsch Gesellschaft, in Konigswinter, in 1957, at the time when the Rome Treaty was being negotiated. I am not suggesting that the Konigswinter conference is an official body. Usually, at a conference of that description, there is an objective study of some special European problem. In this case, I believe that it examined objectively the problem of the Common Market. This is what was said in the report of that committee which dealt specifically with the problem of the Common Market in Europe:The main question which was asked by the German side with pleasing frankness was: is Britain prepared to co-operate honestly?1180 Let us face the fact that there will never be European political and economic integration unless Britain stops the dodging process and prepares to cooperate honestly. That statement was made in 1957. I want to know whether anything has been done since that would restore confidence in Britain so far as the Common Market Commission is concerned, to ensure that some form of agreement less than the Common Market Agreement would be negotiated, in view of the way that we have treated the countries of the Six.
My right hon. Friend the Member for Huyton was too kind to the President of the Board of Trade. He certainly spared the rod all right. I feel much more truculent. There 'have been Ministerial changes, and I think that there will be more of such changes. I hope that as a result of this debate today the Prime Minister will be prepared to accept some further form of negotiation with the Common Market countries, and I hope that in his selection of new Ministers he will change the present President of the Board of Trade. I do not doubt the sincerity and integrity of the President of the Board of Trade, but I think that he has approached the problem of negotiations with the Common Market countries with that typical British insularity which ought to have been destroyed in two world wars with the bombs and the bullets.
The right hon. Gentleman's final negotiation of the seven-nation free trade agreement may look very well on paper. Indeed, it may be a step towards some form of European integration. But does anybody doubt for a moment that the existence of that Free Trade Area, as distinct from the Common Market, must ultimately divide Europe both politically and economically if the development of the Common Market as it is today is continued? The President of the Board of Trade may have been the means of so dividing Europe as to allow for the encroachment of Communism.
I have one or two more questions to ask. Can it be doubted that, however good the seven-nation free trade agreement is, the movement towards integration in Central Europe will continue? I believe that it will continue. We are not dealing with a movement which is concerned only with the economic problems 1181 of Central Europe. We are not dealing with a movement concerned only with the political problems of Central Europe. We are dealing with what is, in effect, a spiritual movement beyond both those matters, a movement which seeks to create unity and security in Central Europe.
Can it be doubted that the developments which are already beginning to take place through the bank which has been set up, through the investment for backward nations, and through the conception of social advances in welfare and security will continued? Can it be doubted that, in course of time, if Britain is not part of this movement, she will suffer both economically and politically?
I am prepared to agree that, once we have the seven-nation free trade agreement, we cannot ditch it. Many people ale talking about the neutral countries of the Seven being unable to join in any way whatever with the Common Market, and it is said that the reason is the growing tendency towards political unity in Central Europe. Surely, if there is anything good in the Stockholm Agreement of the Seven, it is that the Seven nations themselves will tend towards some form of political unity. Even in the seven-nation agreement, there is provision for majority control so far as the Ministers are concerned. That is a form of political unity.
I see no reason at all why the three neutral countries of the Seven cannot be catered for in some way, through, let us say, association with the Common Market, fusing their economic interests without the tie of fusing their external policies or even entering into military alliances. I believe that it should be possible to convince the three neutral nations of the Seven that they can join the Common Market purely as associate members on the economic side alone. For Britain and for the other three nations of the Seven, I see no reason at all why we should not declare that we will accept as quickly as possible full membership rights in the Common Market and the Euratom agreement.
§ Mr. Denys Bullard (King's Lynn)
Does not that mean that we should also immediately give away our Commonwealth preferences and associations and the whole of our agricultural policy? 1182 Is the hon. Gentleman prepared to accept that? I am very much with him in some of the aims he is advancing, but, surely, those are impossible considerations for us.
§ Mr. Winterbottom
I am not an expert on agriculture. Even though I have criticised him tonight, I will accept the word of the President of the Board of Trade that the issue of agriculture is not now a barrier to Britain joining the Common Market. There is provision in the Common Market agreement allowing for the agricultural problems of certain countries. Fifty per cent. of the goods that come to this country from the Commonwealth are associated with what is in the Common Market loosely called agriculture. There is, therefore, no difficulty if we enter the Common Market on the principles which have been accepted by the Common Market in respect of France. There is really no reason why we should not have special consideration similar to that which has been given to France in that respect.
However, who am I to speak for agriculture? I have neither been a farmer nor am I the son of a farmer. To be quite frank, I am not very interested in the agricultural side of our economy. [HON. MEMBERS: "Oh."] One cannot be interested in everything in the complicated world of politics. Let us be quite fair about it. It takes one all his time to specialise in one or two things and to concentrate on those in the House of Commons. I reckon that it is a Member's duty in the House to make an effort to concentrate in that way for the benefit of all hon. Members, and I freely give of the results of that concentration to all.
Only one-eighth of our trade from Commonwealth sources would be affected by our joining the Common Market. Even that problem, which includes the problem of grey cloth from India, could be subject to special negotiation within the Common Market Commission. There is no insuperable reason that I can see why Britain should continue further to dissociate itself from the Common Market.
Not only from the economic point of view but from the political point of view as well, if the free world is to survive and, in its survival, yield a greater and greater standard of living for its people 1183 —if it is not to succumb to the influences of Communism in Europe where the challenge is probably most acute—then we must, in that struggle, work only towards the unity of free Europe itself. I believe that the first step should be taken now. Time is important, as we are told in the document which has been circulated to us.
We must remember that it was for the countries of Central Europe that we fought. Indeed, the First World War started over Belgium in 1914, which we defended, and the Second World War began over Poland, in 1939. We should grasp the principle that we fought for in those days and apply it to economic and political affairs today as we assess the priorities which should apply for Britain and our relationships with Europe.
§ 8.28 p.m.
§ Mr. Gilbert Longden (Hertfordshire, South-West)
While I cannot accept the strictures passed by the hon. Member for Sheffield, Brightside (Mr. Winterbottom) upon my right hon. Friend the President of the Board of Trade nor upon the formation of E.F.T.A., because, if Europe is to be divided at all, it had better be divided into two rather than splintered into twenty, I agree with him that there are many hon. Members in the House who are not facing the issue.
The issue before us can, I think, be stated by quoting some recent words of my right hon. Friend the President of the Board of Trade:The problem of European trading relations is without question one of the most serious and urgent which is facing British industry and the Government.Hon. Members may have noted in yesterday's Sunday Times that Mr. Adlai Stevenson wrote:The division between Britain and the Six Common Market countries…I regard as being of great potential danger to the stability of Europe. In the context of Africa…which was the subject of his article—…it seems wholly disruptive.Some weeks ago I and some of my hon. Friends put on the Order Paper a Motion urging Her Majesty's Government, after consulting with the Commonwealth and our partners in E.F.T.A.—and, of course, I agree with the right 1184 hon. Member for Huyton (Mr. H. Wilson) that that is essential—to put forward firm proposals for negotiation with the Sixand to do sowithout further delay".For how long can we afford to wait before making a serious and positive effort to solve this urgent problem? We are told that we fear a rebuff, but even if our negotiable proposals—we certainly would not put them down and say, "Take them or leave them"—were to be repudiated, should we be in a worse position than we are now?
This problem exists because of one of the most hopeful events which ever befell Europe—the Common Market. I believe that Her Majesty's Government regard the Common Market in that light. There is said to be a record of a wager in the betting book at Brook's Club made immediately after Bleriot had flown the Channel to the effect thatThis aviation business will certainly fizzle out.I do not think that Her Majesty's Government made so poor an appreciation of the future of the Six. They or perhaps I should say it is here to stay. It is the flowering of the famous seed sown by my right hon. Friend the Member for Woodford (Sir W. Churchill) at Zurich in 1946.
Part of my right hon. Friend's speech has been quoted by the right hon. Member for Bassetlaw (Mr. Bellenger), and I should like our European friends to note that the original Churchill rôle for Britain was that of a friend and sponsor to a united states of Europe. He did not then envisage that we should become one of them ourselves. That was followed by a series of conventional treaties on the traditional pattern—Dunkirk, Brussels and Washington. Nevertheless, I agree with my right hon. and learned Friend the Foreign Secretary and with some hon. Members who have spoken that the Labour Government made a mistake in refusing even to join the preliminary discussions of the Coal and Steel Community. I do not think that the hon. Member for Sheffield, Attercliffe, (Mr. J. Hynd) made a very good defence of that omission. Equally, I believe that the Conservative Government made a mistake in not joining the European Defence Community. Had we done so, 1185 France would not have strangled her own baby at birth.
Where were the British leaders of the United Europe movement? They were in the British Cabinet, where, one would have thought, if anywhere, they could have put their principles into practice. Such a partial surrender of sovereignty over part of our Armed Forces would surely be no greater than we have now agreed to surrender to N.A.T.O. It would be trifling compared with the surrender of sovereignty which we shall make if we sign the disarmament agreement which is apparently contemplated with unanimous equanimity in the Western plan.
That is all of the past.
§ Mr. Mulley
The hon. Gentleman said, I think correctly, that the Government made a mistake in not going to the preliminary negotiation of the Coal and Steel Community. In view of the six years' experience of that failure, surely it was an even greater failure of the Government not to go to the preliminary discussions on the Treaty of Rome.
§ Mr. Longden
That may be so, but I am now turning to the future. I admit that, in my view, for what it is worth, the Government made a mistake in not joining the proposed European army.
'What do the Government now intend? Here are some quotations from recent Ministerial speeches. On 2nd June, at the Western European Union Assembly, my right hon. Friend the Minister of State for Foreign Affairs said:It is important for the West to close its ranks…Unity in Western Europe is vital…The present course of East-West relations merely serves to underline the need which already existed for political unity both on an Atlantic and a European basis.Amid no great acclamation, my right hon. Friend told the Assembly what Her Majesty's Government were prepared to doI can say that the British Government…will certainly be ready to consider anew the proposal that Britain should join Euratom and indeed the European Coal and Steel Community as well".He added that it would be after consultation with our partners in E.F.T.A. There are many other similar announcements of intention stretching back over the last few years, and now we have the Motion on the Order Paper: 1186…this House recognises the need for political and economic unity in Europe"—including, of course, Great Britain.
§ Mr. Longden
As the Foreign Secretary said, we are part of Europe, and Europe includes Britain.
We are entitled to be told precisely, not only what the Government mean by these oft-repeated phrases, such as "political unity", "fundamental unity" and "integration", but also what they propose to do now in order to achieve what they mean. I would rather that they took a brick and threw it through the windows of the European Economic Community than that they were afraid to drop a brick at all. What I am sure they do not mean is that we should sign the Treaty of Rome as it stands or enter the Common Market, come what may.
On 6th July there was an article in The Times by its political correspondent, the first sentence of which reads as follows:Mr. Maudling, the President of the Board of Trade, when he attended a private meeting of three back bench Conservative Committees—foreign affairs, trade and agriculture—at the House of Commons last night came out strongly against Government critics who say Britain should enter the Common Market, 'come what may'".That statement could, in this context, have been based only on guesswork, and, because it may well have caused some alarm to our partners in E.F.T.A., to say nothing of many Conservatives in the country, and because it would not tend to make our negotiations with the Six any easier, I wrote three sentences to The Times to say that I did not know of one Member on this side of the House who would be prepared to sign the Treaty of Rome as it stands.
Because pressure on space prevented the publication of my letter, I repeat the gist of it now. Where a cleavage of opinion does no doubt exist on these benches is on the question of timing and tactics. Perhaps it is best summarised by saying that some of those behind cry "Forward", while those before cry, if not "Back", at any rate "Halt".
Why cannot we sign the Treaty as it stands?
§ Mr. H. Wilson
There are many misunderstandings in Europe and positions and attitudes taken up on both sides of the House of Commons. While I was in Paris during the weekend, I heard quite authoritatively what I had not heard in this country: that either the meeting to which the hon. Member is referring or a meeting of the 1922 Committee had voted with a big majority for going into the Six. Will the hon. Member say whether that is true? It would be helpful to get the answer clear.
§ Mr. Longden
The right hon. Gentleman knows very well that the proceedings of party committees are private. I can, however, tell him that never at a Conservative Party committee meeting is a vote taken. The rumour that the right hon. Gentleman heard in Paris had no connection whatever with the meeting that I have just described.
There are substantial reasons, but I do not believe them to be insuperable, why we cannot go into the Treaty of Rome as it stands. There is, first, the agricultural reason, but I shall not go further into it because two of my hon. Friends who know much more about the subject than I do have already dealt with it. There is, however, a List G in the Treaty of Rome and I should like to read to the House a sentence from The Times Agricultural Supplement of 5th July, written by Mr. J. T. Beresford:As things have turned out, it might have paid us better agriculturally if Britain had become the seventh members of the Six. Now that the E.E.C's draft farm policy has been published—at the time of writing it is before the Council of Ministers—it proves, in some respects, to be no less than our own Agriculture Act writ large.Then, we come to the Commonwealth. If I believed that our entering more closely into Europe would conflict substantially with our Commonwealth interests, I would have no more to do with it. It is, for example, quite impossible, in my view, that we should be asked to put a 20 per cent. duty, even initially, upon food and raw materials from the Commonwealth. Not only would that be to invite inflation here, but it would materially damage our colonial interests. One of the best forms of aid to developing countries is to help them to sell their exports.
Is not this too negotiable? What became of the recommendation which was 1188 made at the unofficial Commonwealth Conference held at Palmerston, New Zealand, in January, 1959, when the committee presided over by my right hon. Friend the Member for Monmouth (Mr. Thorneycroft) recommended a joint approach by the Commonwealth to the Six? No more was heard of that. Presumably, however, this question must have been thoroughly discussed at the recent Conference of Commonwealth Prime Ministers. What was the outcome? Did the Commonwealth Prime Ministers agree with the Palmerston Conference that there is no need for these interests to conflict? Did they not perceive that what would be a danger, both to the Commonwealth and to our position in it, would be for us to become economically isolated as an offshore island of Europe? An economic unit based on a population of 50 million or even 90 million, cannot compete with units based on populations three or four times that size. These are the days of the big battalions.
If we remain out, we and each Commonwealth country must make individual bargains with the Government of the Six. Are we not more useful to the Commonwealth, in bargaining for better terms for Commonwealth consumer goods, than by providing the Commonwealth countries with protected but dwindling markets here?
The third and most important of these objections is the question of sovereignty and whether we should be called upon to make too big a surrender of sovereignty. But who knows? The Treaty of Rome itself makes no reference to this. Contrary to the general opinion, no declaration either for or against federation is made in the Treaty of Rome. Of course, as the right hon. Member for Huyton has said, we all know that there are powerful lobbies in France and Germany which openly proclaim that federal union is their ultimate objective.
Listen, however to what M. Spaak said in an interview a few weeks ago. He was asked whether he thought that there was a danger of a split in Europe and, therefore, a threat to the Western Alliance. He replied:Luckily, up to the present, the discussions between the E.E.C. and E.F.T.A. have not had any repercussions within the Alliance, and I trust they never will have. I believe moreover 1189 that it would be relatively easy to find a solution if the political problems, which must prevail over the technical arrangements, were presented in the right way.In the television broadcast by the President of France on 31st May, to which reference has been made, President de Gaulle presented these problems in, at least, a rather different way. Perhaps it is worth while putting these few sentences on the record. He said:What France wants to do is to contribute to the building of Western Europe into a political, economic, cultural and human grouping—organised for action, progress and defence…Of course, it is necessary that the nations which are now co-operating should not cease to be themselves; and that the trend to be followed should be that of organised cooperation of States, pending the advent, perhaps, of an imposing confederation.Somebody remarked earlier in this debate that the President of France was an extreme nationalist, but I think it would be truer today that de Gaulle is divided into three parts: he is a nationalist, a soldier, and a world statesman; anti in this pronouncement on television they seem to have reached a compromise.
On the question of sovereignty generally I ask the House to listen to some rather prophetic words which were written in a book called "The Endless Adventure" by F. S. Oliver thirty years ago:The force of circumstances may some day bring them"—he is talking about the States of Europe—face to face with these alternatives. They may be driven by…defeat to surrender to a conqueror that which they have clung to so passionately"—that is, their sovereignty—and they may find peace and security at last in some imperial system, vaster and infinitely more complex than the empire of the Antonines. Or, on the other hand, their imagination working on their memories, may show them a prospect of evils in comparison with which even the loss of their sovereign independence will appear tolerable—a vision of modern warfare, glamourless, impersonal, mechanical, ubiquitous; a dismal twilight reddened by bursts of flame; vapour settling like a pall on doomed cities; inventions, and yet more inventions, threatening a universal destruction. If such a vision ever came to be believed in firmly, it might lead in time to a covenanted union of the States of Europe.Such a vision seems much less unlikely today than it did thirty years ago No State today is a vat sufficiently large and powerful to stand on its own bottom as Presumption advocated in 1190 The Pilgrim's Progress. Salvation lies in collective security, and collective security implies some surrender of sovereignty.
For many reasons, I cannot see this country entering into a real federation in the near future. For one reason, a complete federation in which each country ceased to be itself, to use President de Gaulle's words, would reduce the West's voting power at the United Nations. But it is a question of degree. If it is true that the Treaty of Rome is re-negotiable, which we are told, it is time we made up our minds as to where the balance of advantage to us and to our Commonwealth lies. It is no longer essentially an economic problem, though, goodness knows, that is very strong indeed for these islands. Our political future is also at stake.
Only the Government can tell the nation where our political advantage lies. Some industries will suffer, others will gain; but the ones which would suffer, if they were able to understand that what we propose to do is in the general interest, would, I think, respond. One thing upon which they all agree, so far as I can see, is that the present situation is not advantageous.
In any effort to change it I maintain that we must tell our allies just how far we can go to meet their political aspirations, because I do not think they know. And do we? Many, if not all, roads lead to Rome, and perhaps the most hopeful one for us is via Brussels. Our allies in Western European Union are awaiting the result of our reconsideration of the proposal that we should join Euratom. First we have to know if we should be welcome, says my right hon. Friend The Minister of State. We should be welcomed by Parliamentarians. But by Governments? We must know on what terms. That is the answer to the hon. Gentleman the Member for Sheffield, Brightside.
The Six do want us to come in, but on what terms? That is what has to be decided. When and how are we going to get them? The time has passed when we could have dictated our own terms.
I should like to recall to my right hon. Friends that, in a debate in the House on 26th and 27th June, 1950, when we were in Opposition, they clearly envisaged the risk which separation from 1191 France and Germany would bring and they urged that a much stronger effort should be made by the Labour Government to find a formula which would satisfy the French while preserving essential British interests. Why cannot we do just that now?
§ 8.51 p.m.
§ Mr. Austen Albu (Edmonton)
If he will allow me to say so, I thought that a great part of the speech of the hon. Member for Hertfordshire, South-West (Mr. Longden) was very good sense. I hope that the President of the Board of Trade will answer the questions which the hon. Member put to him in the early part of his speech. There is no doubt whatsoever that the problem which we are discussing is a political and not an economic one. There is no doubt that the combination is a combination for political purposes and that the Community which is based on the vision of its original founders is being translated into practice by a very able team of civil servants in Brussels.
It is based on the belief that if one tries to harmonise the economic systems of a number of countries it undoubtedly leads to political unification. Those who have visited Brussels and have spoken to Professor Hallstein and his colleagues know that they would be willing and pleased to have us in, but they make absolutely clear that if we join we must accept the direction of the political advance which they are making.
But the final political goal has by no means been defined. If it had been, it is certainly true that General de Gaulle would never have continued to support that Treaty. The President of the Board of Trade seems to think that one cannot join an organisation which is a political organisation unless one knows entirely the form that it will take when one gets to the end, but this is not so. As the hon. Member for Hertfordshire, South-West has said, the Treaty is renegotiable.
The argument against our joining on the ground that we have to sign the Treaty as it stands is not a sound argument, because article 237 of the Treaty says:The conditions of admission and the amendments to this Treaty necessitated thereby shall be the subject of an agreement between the Member States and the applicant State. 1192 Such agreement shall be submitted to all the contracting States for ratification in accordance with their respective constitutional rules.Therefore, if we tried to join, it would be possible to renegotiate some parts of the Treaty, particularly those concerning agricultural produce, and Commonwealth products.
What is impressive about the Community is the pragmatic way in which it works. It is not the high-falutin Continental constitution-mongering of which we have accused Europeans in the past. Each step is laid down in the Treaty, but each step is taken only after the fullest examination of existing conditions and after agreement among the Council of Ministers, which is a confederal and not federal institution.
The harmonising and speeding up of external tariffs was made possible only by the dynamic effect of the Treaty on the countries themselves. It was only after the fact of the dynamism became clear that it was possible to speed up the harmonisation of tariffs. It is this very dynamism that presents a challenge to this country. The cause of the dynamism is not entirely clear, but undoubtedly the rate of expansion in the countries of the Common Market, together with their larger population, will provide a much larger market for industrial goods in future than exists in the Free Trade Area, and this will form a very large base for investment and research and development which should lead to further expansion.
There is already impressive evidence of the concentration and rationalisation of production among the firms in the European Community, and undoubtedly they will secure great economies in production. The attempt by the Government to form a Free Trade Area did not begin to touch this question at all. The present leaders of the European Community are not Liberal free-traders. Indeed, in the eyes of Dr. Erhardt, they are very dangerous dirigistes. The advantages of the Common Market over the Free Trade Area are exactly that it involves a degree of economic planning, including the harmonisation of fiscal and social policies, which enables it to ease the dislocation caused by the steps taken toward free trade.
1193 This is very important from our point of view. In fact, I did not understand my right hon. Friend the Member for Huyton (Mr. H. Wilson), who seemed to me to have become an extreme liberal free trader who appeared to want to encourage redevelopment of free trade without any of the safeguards that the Common Market has against dislocations caused by the abolition of tariffs between countries. I do not want that soft of Free Trade Area.
I want the sort of Free Trade Area where there is a necessary degree of giving up sovereignty to ensure harmonisation of policy and same economic planning to cane the dislocation that free trade will cause. That is very important indeed. Whether we are in the Common Market or not, substantial Changes are going to be needed in British industry, involving they contraction of some of our industries and the expansion of others.
Some of us believe that this change in British industry—the expansion of some, the contraction of others, the development of new products and the expansion of research and development—us not, in fact, taking place fast enough. Harmonisation of trade policies may very well take place, according to the latest information that we have, through the new Organisation for European Cooperation and Development which, I understand, is now 'empowered to deal with trade questions.
This mere harmonisation of trade questions is not enough if we are to avoid the dislocations which would undoubtedly occur in going in when tariff barriers are removed. We have to play some pant in the planning of the economic and industrial policy which undoubtedly is going on in Europe. It is for this reason that we should indicate our willingness to sign the Rome Treaty under the conditions which exist in the Treaty by which we are able to renegotiate some parts of it.
I want to say something about Commonwealth preference and the fears expressed, particularly by the right hon. Member for Thirsk and Malton (Mr. Turton) about the effect on underdeveloped areas of the abolition of Commonwealth preferences and so forth. For the very reason that the Community is a political conception, there is a very strong feeling in the Community, among 1194 a large number of its members, of the responsibilities of Europe to the underdeveloped countries. I do not believe that it would be impossible for us and the people at present in the leadership of the Community to negotiate arrangements which would ensure that the underdeveloped countries, including the countries that are commodity producers in the Commonwealth, continue to benefit from the expansion of European trade. It would be the negation of everything that they say that they stand for if, in admitting Britain, they were to make it more difficult for commodity 'producers to maintain their exports. I do not think that this is a justifiable fear.
I believe that the reason why we do not have to be so fearful about our approach to the Community—and there both Front Benches today seem to me to be fearful, although I must admit that the Government have become less so—is very largely the pragmatic nature of the treaty to which the hon. Member for Hertfordshire, South-West referred. This applies not only to the renegotiability of the Treaty for new members to enter, but also, for instance, in regard to the treatment of agricultural products. I do not see why we should fear to enter on a course of action in which we would, in each of the steps thereafter taken, exert our own influence. If we are not there, we cannot exert any influence on those steps, but if we are there, we undoubtedly can. I agree that there are difficulties because of our having formed the free trade area, but the difficulties supposed to exist for neutrals have been considerably exaggerated. I very much agree with what my hon. Friend the Member for Sheffield, Brightside (Mr. Winterbottom) had to say on that.
We undoubtedly have a part to play in Europe and we are badly needed, particularly by the smaller countries and by the political parties left of centre, who would be glad to see Britain in. But we must not seem either to hold back developments in the Community, or to want to take the lead which, if it was ever ours to take, we have already thrown away. We cannot go in saying, "We are coming in to take the lead". If we go in at all, it will have to be on equal terms.
Meanwhile, in the interval during which we are waiting, or negotiating, or finding a favourable opportunity, as the 1195 hon. Member for Halifax (Mr. Maurice Macmillan) put it, to enter the Common Market, we must put our own economic house in order by developing the rate of expansion and technical change in our industry so that, when the time comes, it is able to face the European industries on equal terms, which it is hardly able to do at present.
§ Mr. Holt
On a point of order. As you are aware, Mr. Deputy-Speaker, you have been unable to call many hon. Members who wished to speak in the debate. There has been no spokesman from the Liberal Party. As the Second Reading of the Consolidated Fund (Appropriation) Bill lasted until half-past four, and so delayed our proceedings, is there any reason why this debate should not go on until after ten o'clock, so that other hon. Members may speak?
§ Mr. Deputy-Speaker
The hon. Member is aware that this debate is taking place on a Motion which is not exempted business. I have no power to extend the debate.
§ 9.2 p.m.
§ Mr. Denis Healey (Leeds, East)
During the debate, I could not help reflecting on the slogans with which the Prime Minister began his Administration three and a half years ago. You will remember, Mr. Deputy-Speaker, that his slogans then were "Europe" and "Power". By that, he meant close unity between Britain and the Continent of Europe and a great strengthening of Britain's atomic power, both militarily and industrially.
We all know what happened to the power slogan—the abandonment of the truly independent British deterrent and the slashing of the industrial atomic power programme. That part of the slogan lies in ruins. As for unity with Europe, it is a melancholy fact that our relations with our main Continental neighbours are worse today than they have ever been in peace-time history.
I regret that when he opened the debate the Foreign Secretary spent so little time on the political side of our relations with Europe, because the Motion puts political unity with Europe 1196 before even economic unity with Europe. I could not help thinking that the right hon. and learned Gentleman had already taken a Treasury brief and was making a speech very different from that which he would have given a week ago. Incidentally, let me wish him well in his new office, if, indeed, he is moving to a new office, although I shall very much regret losing him as a target. I hope that the Prime Minister will provide us with another target in this House.
I regret that the debate generally has focussed so exclusively on the economic division between the European Free Trade Association countries and the Six in the Common Market, because, although the economic split between Britain and the Continent symbolises the bad state of our relations, I do not believe that it is its cause. The failure of our economic relations with the Continent is largely due to a break-down in our political relations with the Continent which preceded it.
The crucial failure of Her Majesty's Government during the last few years has been their refusal to recognise the impact of their political and military decisions on the rest of their policy towards Western Europe. The party opposite has always been proud to represent Britain as a nation of shopkeepers and there is no doubt that it has given an extraordinary priority during negotiations with the Continent over the last few years to the question of our economic association with Europe. But let us not forget that President de Gaulle, who is the Head of State of our nearest and most important European neighbour, regards commercial and economic questions as essentially problems for the quartermasters—"the servants can deal with that". He regards political questions as infinitely more important.
I do not think that one would be doing justice to the complexity of our relations with the Continent if one ignored the effect on our relations with our neighbours of some of our political decisions over the last few years. I admit at the outset that some of the political decisions we took, and some of the policies we pursued, were right, even though they conflicted with good relations with the Continent.
To take one example mentioned by my right hon. Friend the Member for 1197 Huyton (Mr. H. Wilson), there is no do Mt that the general trend of the Government's foreign policy in relation to the Soviet Union and to a settlement with the Communist Powers has consistently worked against the achievement of good relations with the Continent. Th., Continent generally was utterly opposed to the Prime Minister's visit to Moscow last year. It was opposed to his proposal for a Summit Conference, and I think that the noble Lord the Member for Berwick-upon-Tweed (Viscount Lambton) was speaking the truth when, during the last foreign affairs debate, he said that if the Government were really putting relations with Europe first they would have to drop the line which they had been taking in their relations with Russia in the last few years.
We on this side of the House would not wish the Government to put relations with Western Europe first if that meant dropping the extremely valuable initiative which they have taken in the last few years, and which we hope they wilt continue to take, to achieve some agreement with the Soviet Union and other Communist Powers.
I think that the same can, and must, be said of British policy in Asia and Africa. There is no doubt, again, that the policy which this Government have pursued with the support of the Opposition, in relation to the Asian countries, the Middle East and Africa has seriously damaged relations with some of our Continental neighbours, particularly France. I do not think that anybody who visited Paris in the early months of 1957 can deny that, when the Government rightly abandoned the insane policy that they had been pursuing during the Suez affair, that abandonment was looked on by the French Government as a betrayal, and the Government's attempt to establish better relations with the Arab countries generally has consistently worked against good relations with France.
There is no doubt that probably the most damaging act by the present Government, so far as Europe is concerned, is an act which we in London have forgotten—though they in Paris, I think, will never forget—namely, our collaboration with the American Government in selling arms to the Tunisian Government. There is no doubt that at 1198 the present time many leading Continental politicians and statesmen believe that the general trend of our policy on the African Continent has been gravely and unnecessarily embarrassing to them. This, I think, is felt by the Belgians. It is certainly felt by the French, but again I say that none of us on this side of the House would wish us to seek good relations with the European Continent if that meant abandoning the general line of policy which the Government have been pursuing, with our support, in Africa, the Middle East and Asia.
§ Mr. Mulley
This is very interesting, but would my hon. Friend explain, for the benefit of the simple-minded amongst us, why, if we were associated with Europe, it would not still be possible to pursue these broad lines he has mentioned?
§ Mr. Healey
The point I am making—and I shall develop it in a moment—is that one of the reasons why we have found it impossible to reach agreement with the French Government on the question of the Free Trade Area is the policy which we have pursued towards the Communist bloc and Africa. If my hon. Friend is ignorant of this fact, he is being altogether too simple. There is no doubt that President de Gaulle's attitude towards Britain on the European question in the last few years has been determined to a large extent by our policies being different from those of France regarding the Soviet Union and the African and Asian countries, and I could quote hundreds of examples of statements by the French Government to that effect.
On the other hand, in my view and that of my hon. Friends, some of the decisions and policies followed by the Government which have destroyed the climate in which we could have achieved economic agreement with the Continent, have been absolutely wrong. These are decisions and policies which we could and should correct if we wish to achieve better relations with the Continent of Europe in other fields. The most important of these wrong policies and decisions was the decision taken by the Government at the beginning of 1957 to seek atomic independence within the Atlantic Alliance at the expense of our contribution to European defence and in violation of the spirit, if not the letter, of our 1199 agreement with the Continental Powers to keep four divisions, or the equivalent, on the Continent of Europe until the end of this century.
There is no doubt whatever that this attempt by Britain to achieve a special and exclusive status as a member of the nuclear club inside N.A.T.O. incited great resentment in France; while our withdrawal of troops from the N.A.T.O. Command was widely regarded in West Germany and the Low Countries as a betrayal of a formal promise which we had made. I think that the Continental countries must listen with rather a wry smile to the President of the Board of Trade when he accuses them of inventing a new doctrine called "the doctrine of non-existence of Europe" when in fact it had been the basis of Government policy for the last ten years. If not, why did the Government make nothing of the Western European Treaty Organisation? Why is it that, again and again, we took decisions contrary to the spirit, and in some cases almost contrary to the letter, of the agreement we made with the Six in 1954?
This was the political background in which the negotiations to try to create a Free Trade Area with the Continent took place. One must confess that it was an appallingly bad climate in which to negotiate and all the errors, some venial as I say and some unforgivable, made by the Government in the political field were compounded by a fundamental error of judgment, in my view, throughout the economic negotiations with the Continent, namely, that the Government have never recognised that the real dynamic force behind the Common Market is not commercial, not economic, but political. While there are, of course, many people on the Continent who do not approve this dynamic and do not have the same passion for union as, for example, Hallstein and Morjohn, the fact is that the people who want the Common Market, because it will lead to political union in Europe, are the people who have been running the show ever since the thing began; and on the whole their influence among the Six has been growing rather than declining as things have gone on.
Because the Government either failed to recognise this political dynamic or, 1200 in recognising, actively opposed it, an atmosphere of suspicion and mistrust towards Britain has been created on the Continent. A situation has now been reached in which almost any proposal made by Britain for closer relations with the Continent is looked upon as a devious device for wrecking the unity of the Six. This was the experience of the Minister of State when he made a tentative suggestion the other day at Paris that Britain might try to join Euratom and the Coal and Steel Community. Nothing proves my point more clearly than the fact that when the New York Times published an account of what the Prime Minister, was said to have said to Mr. Dillon there was no statesman or politician on the Continent of Europe who did not immediately accept this as an accurate account of the Prime Minister's view. Indeed, it is significant that the Prime Minister himself has never denied that he said these things.
A further mistake we made, for which there was no excuse whatever, after the collapse of the Free Trade negotiations, was failing to recognise that the type of approach we favoured was one which could not commend itself to the Six. I believe that the Government made a great mistake in leaving the negotiations in the hands of the President of the Board of Trade, who has never understood what hit him when the Free Trade Area collapsed. He has never understood the meaning of his defeat, but goes on day after day, week after week, making speeches which assume that everything could have been and should have been all right but that some extraordinary accident of fate made the negotiations collapse when they did collapse.
A beginning of improvement in the Government's policy depends on replacing this Bourbon of the Board of Trade by someone who will treat negotiations with Europe as primarily a political and not a commercial problem.
§ Mr. Maudling
As the hon. Member says that I keep saying certain things, will he quote what I have said?
§ Mr. Healey
I will quote the statement the right hon. Gentleman made to the Foreign Press Association, I think four weeks ago, which all of those to whom I talked said was exactly what he has been saying for the last five years.
1201 One of the valuable things which has cone out of the debate today was the Foreign Secretary's very clear statement this afternoon that if we are to have better relations with the Continent in the economic field, we must recognise that the whole Free Trade Area conception is dead and that we cannot hope to get good relations on that basis. I only hope that some of my hon. Friends who have put forward variants of the Free Trade Association today, although usually describing them as joining the Common Market, will get this point bemuse, until this point is recognised, we shall never make progress.
§ Mr. Healey
No, I have already given way several times and I must get on with my speech.
The real issue which has come out very clearly in this debate is whether this country should join the Common Market or not.
§ Mr. Healey
I am going to answer it. It is a very difficult decision because, fundamentally, a decision on whether or not to join the Common Market depends on an estimate of how the Common Market is likely to develop in the next few years, both in the economic and in the political fields. I do not believe any person in Europe can honestly put his hand on his heart today and say that he knows how it will develop. Inevitably a decision to join or not to join today must be based very largely on a gamble.
But two points of extreme importance have emerged from this debate. The first is that there is no longer anybody in this House who believes it inconceivable that we should join the Common Market. I hope that our Continental friends will take note of the fact that the sort of Pharisaism towards the Continent which governed the attitude of both partia—I admit this—towards European unity for so many years immediately after the war, is completely dead.
I believe that the attitude of responsible people in all parties in this country towards union with the Continent is completely different from what it was, say, ten years ago. The other interesting thing—
§ Mr. Healey
The hon. Member must wait for a moment. He has not sat in on the debate for a great time and he must be a little patient. The other thing which has emerged, and which is extremely interesting, is that no one in this debate thinks we can join the Common Market as it now stands, and no one thinks we can join the Common Market alone or without the agreement of our partners in the European Free Trade Association. Even the triumvirate from Sheffield, who made some extremely interesting contributions to the debate, finally admitted that, although they wanted to join the Common Market, they did not want to join it as it is; they wanted to negotiate various changes in it.
The question which we face at present in the House and in the country, therefore, is: should Her Majesty's Government now try to negotiate for changes in the Common Market Treaty which would allow Britain to join it—and that is the only relevant question which can be asked in terms of political realism. As my right hon. Friend the Member for Huyton pointed out in his opening speech, a large number of economic changes are required in the Treaty of Rome in order to accommodate Britain's special interests in relation to agriculture and to our Commonwealth trade, and many of these changes are certain to be opposed by France and by other European countries for reasons of national interest which have nothing to do with the Six as such.
I leave that question on one side, because I believe that it might be possible to negotiate these changes, though perhaps not at the present time. The main problem which has arisen again and again in the debate is how far Britain can and need accept the political aims of the Six if she is to join the Rome Treaty. This, I confess, is not an easy question to answer. I have great sympathy with the point made by my hon. Friend the Member for Edmonton (Mr. Albu) that in practice the Common Market is a very much more pragmatic affair than it is in theory.
Over the last fifteen years I have often felt that one of the basic difficulties between Britain and the Continent is that we look at Treaty commitments in 1203 a different way. On the whole, for Britain a commitment made in a Treaty is a minimum from which we start, but for many of the Continental countries a commitment made in a Treaty is a maximum at which they aim. As the hon. Member for Halifax (Mr. Maurice Macmillan) pointed out, there is a sincere difficulty for us in signing a Treaty with a mental reservation that we may not be able to carry it out, whereas for many Continental countries—and this is not a question of morality but simply a different national habit of mind—there is no difficulty about this, and it is understood that they sign a Treaty and then, if they find it difficult to carry it out, they raise reservations about it later. It seems to me that many of our difficulties with the Continent can be traced in the end to this fundamental difference in mental habits.
Nevertheless, I believe that we have here a serious issue. The people who are now dominating policy in the Commission in Brussels and in most of the countries in the Common Market want a total economic union as the end result of their efforts, and they want a total economic union, as laid down in the Treaty of Rome, mainly because they believe that it will lead to a total political union. We should be deceiving ourselves if we did not accept this as a starting point in deciding our policy.
As I tried to make clear in the early part of my speech, I do not think that Britain, at any rate now, could accept this sort of political integration, because I believe that to accept it would be inconsistent with our policies in relation to Russia, to Afro-Asia and to the Commonwealth generally. I believe that our policies towards Russia, towards Afro-Asia and towards the Commonwealth must still take priority over our policies towards Continental Europe, although I recognise that some of my hon. Friends disagree with me about that.
With all the earnestness at my command, I would say that it is no good starting negotiations now in the hope of defeating the integrationists inside the Six. I cannot help noticing that such respected organs of opinion as the Economist and even, to my surprise, the Observer want us to negotiate to get into the Common Market primarily in order 1204 to defeat the people who are now running the Common Market. In my view, if we negotiated with this aim in view the negotiations would certainly break down and there would be an appalling deterioration in the atmosphere between Britain and the Continent as a result.
On the other hand, new chances for negotiation may open later. For example, in a few years' time those who are running the Six may feel confident enough about the general trend that they have set to risk negotiations to meet some of our needs. It is also perfectly possible that the countries in the Six may decide of themselves, before we start to negotiate with them, that their unity should take a form which Britain could accept. As has been said in this debate, President de Gaulle on the whole wants a form of unity which would be acceptable to Britain, although he does not want Britain to form part of that unity. Thirdly, it is also possible that the policies of the Six towards Russia, Afro-Asia and the Commonwealth may become more compatible with ours.
But one thing is certain at this moment, I believe, and that is that British opinion is not prepared to enter the Common Market on the basis of the Rome Treaty, and is still less prepared to accept the political objectives which those now running the Common Market have set themselves. I believe that it would be disastrous if any British Government committed the British people to joining the Common Market without first coming clean with them about what it would mean. Anyone who has read the Gallup Poll in today's News Chronicle can see what a tremendous job of education there is to be done there. I welcome any intelligent argument for joining the Common Market as a contribution to this educative progress, even though I am not myself at this time convinced by it.
If we decide that it is no good trying to negotiate our way into the Common Market now, what is to happen? Are the Government right in what they have been saying for the last three years—that there may be a terrible commercial split between Britain and the Continent, with appalling economic consequences, which may be followed by an even more 1205 dangerous political split? Of course not. It is absolute nonsense.
One of the worst services done by the Government to the cause of European unity has been grossly to over-dramatise and exaggerate the consequences of not reaching agreement on these commercial issues. As my right hon. Friend the Member for Huyton said, the economic damage caused by the Common Market has been greatly exaggerated, and provided that we join the United States and G.A.T.T. in pressing for a low external tariff and a liberal trade policy, we shall have a great deal of support from the Commission in Brussels and from many European Governments, and the economic damage that we shall suffer will be literally negligible.
Is there going to be a terrible political split? Possibly. But if there is to be one between Britain and the Continent it is not likely to be the result of the Common Market. It will be because the leading Continental powers, France and Germany, have a different view about world policy from ourselves. After all, the Rome-Berlin axis did not depend upon a Common Market, nor does the Bonn-Paris axis at the present time. There is no doubt that the best way to avoid the political danger of failing to reach agreement on the Common Market is to strengthen political consultation and military inter-dependence in N.A.T.O. We can do this only if we in Britain put ourselves on the same level as the Continent, both militarily and diplomatically.
That means that we must cease trying to establish ourselves as an independent nuclear Power and simultaneously trying to prevent Continental countries from following our lead. We must build up out contribution to the shield forces in N.A.T.O. There is a strong case for trying to reorganise N.A.T.O.'s political machinery so that Continental countries car get consultations on the same informal basis as those Britain has had with the United States for years. Most important, we must co-operate with the Continent not only inside Europe but outside it as well.
In my view, the greatest political danger that might arise from the failure to solve our economic problems with the Continent lies outside Europe—in Africa. In the last few years we have already seen a dangerous gulf opening 1206 between us and at least two Continental powers in Africa—between ourselves and France over Algeria, and between ourselves and Belgium over the Congo. There are very serious dangers if the Common Market countries carry through their plans of concentrating on economic development of their own overseas territories in Africa, without any integration or co-ordination with the economic policies followed by Britain in the contiguous parts of the African Continent.
I think that if we follow this line, none of the dangers that the Government have been so despairingly predicting for the last few years is likely to follow. If we accept the Common Market for what it is, as a major contribution to European unity and the strength of the West as a whole, and if we concentrate on trying to improve our relations with it and minimising the damage that it might cause us, by the method I have suggested, I do not think that we need fear exclusion. We may suffer some marginal economic disadvantages, but we will encounter no really serious political danger. And let us not forget that, after all, we are not just a nation of shopkeepers.
More important still, I believe that if we follow this sort of line we shall enormously increase the chances of a general settlement later, whether that settlement takes the form of the entry of Britain and the other members of E.F.T.A. into the Common Market, or the form of including the Common Market as a whole in some new combined European organisation.
§ 9.32 p.m.
§ The President of the Board of Trade (Mr. Reginald Maudling)
There can be no doubt that this debate has fully measured up to the immense significance of the subject that we have been discussing. There can be no doubt that the speeches which have been made will be read and studied with the greatest interest throughout Western Europe and, indeed, throughout the Western world.
I think that it is very valuable on this occasion to have had, first, my right hon. and learned Friend the Foreign Secretary to state the position of Her Majesty's Government, after much thought and careful reappraisal, and that it is important, also, to be able to send out from this House to the rest of the world a clear 1207 message to the effect that on the basic interest of Britain and on the basic questions of policy there is no substantial disagreement on either side of the House. There are differing points of view and, no doubt, points of criticism, but, on the basic problem, I find an extraordinary measure of agreement.
That is not surprising, because we are talking about the future of our country in some of the most significant problems that we shall have to face in this generation. Britain is part of Europe, and Britain's interest is a united world. There may well have been a time, as our friends on the Continent sometimes say, when our interests were a divided world, but Europe then was the world. It is not the world now—there is Russia, the United States, China, as other great forces. There can be no doubt whatever that, in modern times, the interests of Britain are a united Europe and, therefore, anything that makes for European unity must be something that we support.
But we have a rôle beyond Europe that we must never forget. The British Commonwealth, with its population of more than 600 million, represents more than a quarter of the population of the entire globe. It is an association of people working together because they want to, not because they have to. It is an association of people of all colours, creeds and races, and an association within which, as my right hon. and learned Friend said, we get Africans and Asians and Europeans working together.
This is something of immense and lasting value to the entire free world, and those who say, as some do, that Britain cannot be part both of Europe and of the Commonwealth—that we must choose between the two—are trying to force us towards a choice that is not only contrary to our interests, but is contrary to the interests of the whole Western World. Who will suffer if we are members both of the Commonwealth and of Western Europe? We will certainly be prepared to pay in full for our membership of both associations. I would have thought that it must be to the general advantage if we have our position both in the Commonwealth and in Western Europe.
1208 Of course, there are suspicions. There are suspicions in Europe of Britain. There are suspicions in this country of the motives of a Conservative Government, with their background of Commonwealth policy—people who do not believe in Commonwealth preference. These old suspicions die hard, but we must unite in this House to kill them, because unless we kill these suspicions of British policy we shall not gain the national objectives that we all have in mind.
Britain, I would repeat, is part of Europe. Britain, the Commonwealth and our European neighbours are all part of the free world, and only the enemies of the free world can possibly gain from a failure of our various countreis to unite and work together. It follows, therefore, that with the intimate connection now between economic and political matters, so stressed in the speeches from the Front Bench opposite, we must find an economic system that binds Britain to Europe without destroying our Commonwealth ties. That is 'the fundamental problem.
It must also be consistent with the G.A.T.T. I say this in reply to my hon. Friend the Member far Wembley, South (Mr. Russell). The G.A.T.T. is certainly not perfect, but until we find something better we would be well advised to adhere to the G.A.T.T. system which provides a system of international trade rules of tremendous value. I would add that the Commonwealth as a whole attaches particular importance to the G.A.T.T. system. I know of no country which adheres more vigorously to the G.A.T.T. than Canada; and we would be very unwise if we departed from the G.A.T.T. system until we saw something better to put in its place.
It is not impossible to find within the G.A.T.T. an economic system that binds us to Europe without destroying our Commonwealth ties; and indeed, through the O.E.E.C. that is precisely what we have seen developing. With the signing of the Treaty of Rome new possibilities emerged, and also new dangers—new possibilities, as my right hon. and learned Friend said, of greater political cohesion and greater economic strength among our European neighbours—things which, of course, we should welcome. At the same time, 1209 there was and there still remains a danger of division in Europe unless some system can be found that covers the Six.
I think that the hon. Member for Leeds, East (Mr. Healey) rather underwrote, at the end of his speech, not the immediate dangers of division in economic terms but the growing dangers unless this breach can be healed. There are very good reasons why other countries should not sign the Treaty of Rome, and they all stem from the basic concept of the, Treaty, namely, a common policy reached by a common decision and carried out by common institutions. For some of our friends in E.F.T.A. there are constitutional problems which were mentioned by the right hon. Gentleman earlier. Also, some of them feel that within a federal system they, as small countries, would not be able to protect their interests as well as we, as a great country, could, and that is a very natural point of view.
For us particularly there are the problems of agriculture and of the Commonwealth. Whatever might happen, if we signed the Treaty of Rome, whatever the ultimate fate of our agricultural producers or, indeed, our agricultural consumers, the fundamental fact is that we should no longer control our own national agricultural policy. It would become part of a common European agricultural policy, and that would mean a fundamental departure from the existing system of agricultural support. Of course, it is particularly in the matter of agriculture that the Commonwealth is affected. If we take the common tariff of the Six and add the common agricultural policy, there will be a fundamental difference in the position of the Commonwealth in the United Kingdom market.
I was asked about the position of the Commonwealth countries. I can say that they have always recognised the importance of a united Europe and the difficulties and dangers involved for the United Kingdom and, indeed, for them as well in a division of Western Europe. Also, they have always relied on the promise that we have given them time and time again that we would maintain their position in our market for their foodstuffs, drink and tobacco. Of course, signing the Treaty of Rome would involve putting that policy of preference 1210 completely on its head and giving preference to Europe instead. Therefore, although the Commonwealth countries have been and remain extremely helpful, sympathetic and understanding of our difficulties, they have always felt that they could rely on the undertaking that we have given them.
Of course, the other particular difficulty which must not be underestimated is that it is provided in the Treaty of Rome that, after the transitional period, negotiations on relations with third countries should be carried out on a common basis by the Commission. This would mean, in effect, that our commercial negotiations with the Commonwealth would be carried out by the Commission. It would mean accepting a system in which Her Majesty's Government in the United Kingdom could no longer sign a trade agreement with the Government of Australia or of Canada. That is a formidable step to contemplate not merely in its commercial but in its political consequences.
§ Mr. H. Wilson
I am sure that we agree with what the right hon. Gentleman has just said. Could he add one word to the very helpful statement he has just made about the Commonwealth? Can he say that any of the self-governing territories of the Commonwealth have expressed any interest in the possibility of themselves actually joining the Economic Community with Britain?
§ Mr. Maudling
I have never heard that expressed. Of course, the point is that the Community wishes to have free trade in industrial products and to protect its foodstuffs, and the independent Commonwealth wishes to have free trade in foodstuffs and to protect its industry. There is not, therefore, very much basis for agreement there.
It must be recognised, as it was from the start, that the Treaty of Rome is not universally acceptable to all the countries of Western Europe. It was for that reason that we started negotiations on a free trade area. I shall not go back on that. Let us remember, however, that this was not a British plot, as people sometimes suggest. It was an idea thought up in O.E.E.C., mentioned in the Spaak Report, agreed to unanimously by the O.E.E.C. nations and the French and German Governments, before the signature of the Treaty of Rome, said that 1211 they would then proceed immediately to negotiate with us a free trade area. Whatever may be said about the conduct of the negotiations, the fact is that we entered upon them with the united agreement of the whole of Western Europe.
I believe, that, if those negotiations had succeeded, we could have had a single European economic system. It would not have involved the Six in any derogation from their ideas of development and it would not have involved us in any derogation from our Commonwealth responsibilities. I believe that it is a tragedy that those negotiations failed, but they did. I agree that it is a matter of the past. After they failed, we had to do something to avoid a drift in Europe, and we supported the idea of the E.F.T.A.
The right hon. Gentleman has asked what our motives were. They were, I think, three. First, we had in mind the trade expansion which would emerge from forming this group of 90 million people with their relatively high standards of living and high levels of imports. Secondly, we wanted to prevent the further disintegration or fragmentation of the Western European economy. Thirdly, we wanted to provide a more practical basis for future negotiations with the Six. Having had some experience of negotiations in which there are 17 independent countries all negotiating about a highly complex matter of economics, I must say that I can see considerable advantage in negotiations carried out between two organised groups.
In all those ways, we believe that E.F.T.A. will stand on its own feet as a strong and progressive economic group which will bring trade benefits to all its members, and more than trade benefits in that it will lead to closer co-ordination of economic, social and other policies as a natural matter of evolution and not as something superimposed in a treaty, the actual wording of which no one will, in fact, fully observe. Secondly, as I say, we believed that it would prevent further disintegration, and, thirdly, we thought that it would provide a base for further negotiations with the Six.
One other thing, I think, was achieved by the signature of the Treaty of 1212 Stockholm. It proved that it is possible, with good will all round, to find an economic system whereby Britain can be both a partner in a European economic association and retain the Commonwealth system—the system of Commonwealth duty-free entry and all the Commonwealth trading pattern to which we attach so much importance. I think that there is great importance in proving that that can be done.
The main economic problems of our Commonwealth system with regard to Europe concern the question of duty-free entry. But this we have solved in the Treaty of Stockholm, so far as manufactures, semi-finished goods and raw materials are concerned, by the use of certificates of origin, a system we have known, tried and proved over twenty-five years or more in the Commonwealth. Secondly, we have shown that the problem of agriculture is soluble. The right hon. Member for Huyton (Mr. H. Wilson), I think rightly, remarked that Denmark was the greatest agricultural problem for us and that if we can solve that within E.F.T.A. surely we can solve it in negotiation with the Six. The right hon. Gentleman was absolutely right. One of the values of the Stockholm Treaty is that it has proved, both with regard to the Commonwealth and agriculture, that, given good will and a desire to compromise and negotiate on both sides, these problems are not by any means incapable of solution.
The Stockholm Treaty and E.F.T.A. are now a fundamental part of British policy. I particularly welcome what the right hon. Gentleman said about maintaining E.F.T.A. We signed this Treaty believing, as we do, that it would be of benefit to us and to our colleagues and to the whole of Western Europe. Having signed the Treaty, we intend to carry it out in the letter and in the spirit. It is and will remain a fundamental part of our foreign policy in all these matters. I believe that its existence will contribute to the possibilities of a pan-European solution, not because it is aimed as a threat or lever or anything of that kind—it is not—but because it is another organised group which can negotiate on a rational basis with the Six for a lasting solution.
§ Mr. Holt
Will the right hon. Gentleman give the House any evidence of 1213 what he has just said, that the Six have the slightest interest in negotiating with the Seven, because the most that we have been able to find out about the views on the Continent is that the Six are not concerned about an association with anyone outside the Six? The whole of their thoughts and efforts are concentrated on building up the Six.
§ Mr. Maudling
If the hon. Gentleman will wait, I will come to that point.
The position now is that we have an urgent need for a European system which will prevent division and will not involve for the Six, for the Seven or for anyone else problems of insuperable difficulty. I believe that a solution of this kind can be found. The danger is that we shall get involved too much in arguments of words and of theology. I think that the argument of whether one is to go in or to stay out is an empty and meaningless one. The point is that we want a European system, and what we are concerned with is the realities of that system and not the name which we give to it. If we get involved in this argument we may find ourselves led into byways which will not be profitable to anyone.
In the debate I found a considerable measure of agreement on this point. So far as I know, no one has advocated that we should sign the Treaty of Rome. I do not believe that anyone on either side of the House has spoken, or would speak, in favour of signing the Treaty of Rome as it stands. No one is advocating joining the Common Market as it is. We all want to join something. We want something different, something which takes account of the difficulties of ourselves and of our allies in E.F.T.A. What we call it is not really important.
I think that the hon. Member for Sheffield, Park (Mr. Mulley) favoured a close association. That seems to me a very reasonable possibility.
§ Mr. Mulley
I referred to an associate membership which recognises the political existence of the Common Market and our adherence to it. The only reason why I would not say join now is E.F.T.A.
§ Mr. Maudling
That is what I said the hon. Gentleman said—a close association. I was saying that it was a very good idea.
1214 Reference has been made to the possibility that the Six, as a group, might join the Seven. Surely this is very much worth considering, because it is not quite the same thing as the original Free Trade Area. There was the suspicion in the Free Trade Area that the Six countries would be in as individual units. That was something to which many of them strongly objected. An association which brings in the Six as a single group is a quite different concept. Whether it would be acceptable to them, I do not know. Certainly, it seems the sort of possibility that is worth examining.
My hon. Friend the Member for Halifax (Mr. Maurice Macmillan) asked two pertinent questions. He asked whether, if we cannot join the Common Market—the Treaty of Rome—as it stands, we could not join a common market. The answer is, "Certainly". Our objection is not to the concept of a common market within the definition of G.A.T.T. Our objection is to the particular form taken in the Treaty of Rome. That goes not only for us, but for our associates in E.F.T.A.
My hon. Friend referred to the recent well-known broadcast by President de Gaulle. As my right hon. Friend the Chancellor of the Exchequer has already said in this House, we would certainly be willing to enter into negotiations with the Six on the basis of the principles outlined in the President's broadcast. I do not see how we can go further than that. Our great problem is to start negotiation about the long-term problem, but we cannot do that until the Six feel that the time is ripe. I am not entering into the reasons why they feel that the moment is not ripe. They are perfectly entitled to their reasons, as we are to ours, and we would not criticise them. There must, however, be two sides to a negotiation.
We, the Seven, have said on more than one occasion that we are ready and anxious to start negotiations to try to find a long-term solution. We are not starting from a bigoted or rigid position. We are willing to recognise negotiation and the process of concession on both sides. That is the process we want to start. Whether it be close association, a common market, something on the basis of President de Gaulle's broadcast or any of these things, we are ready and willing as soon as possible to start negotiations with the Six.
§ Mr. E. L. Mallalieu (Brigg)
The right hon. Gentleman keeps on saying—and in one sense I am glad to hear him—that he is ready to negotiate. Will he state that he wants to negotiate and will he ask for a date upon which the negotiations can begin?
§ Mr. Maudling
The hon. and learned Member has not followed these matters. We have done both of those things. At the last meeting of the Trade Committee in Paris, on 9th June, we wanted to negotiate, but the Six told us that they were not prepared to do so. It is still on the agenda of the next meeting of the Trade Committee. Again, we shall say that we want to negotiate.
It must be clear that the British Government have said this time and again. I am not criticising, blaming or objecting. I am accepting the fact, as the House must accept the fact. One cannot start negotiation until there are two parties to it. We are willing, ready and anxious to start negotiation on any one of these bases with the object not of trying to win, not of trying to establish prestige or arguing status or who joins wham, but merely with the object of trying to get a rational, lasting European solution that meets our basic interests as well as the interests of the Six. After this debate today, I believe that that is the view of the entire House of Commons.
In the meantime, until these negotiations can begin by mutual consent, there are many things that we can and should do. First, we must build up the E.F.T.A. We must make more use of the trade opportunities that are opening there. We must think of the E.F.T.A. not merely in terms of trade, but in terms of collaboration over the whole range of economic and social interests, collaboration between independent States who work together because they want to work together and not because they are forced into any particular federal mould.
Secondly, we must work in the G.A.T.T., as has been said, to reduce the level of tariffs all round, because the lower the general level of tariffs, the less the damage that is done by discrimination. It is not a solution. It is a palliative, but a very useful palliative. Certainly, with that end in view, Her Majesty's Government will go into the forthcoming G.A.T.T. negotiations with 1216 a desire to see a general reduction of tariffs and with a determination to offer substantial reductions in British industrial tariffs in exchange for proper concessions on the other side.
Thirdly, we must continue our very close consultation in all these matters with the Commonwealth. I assure the House, once again, that throughout all the discussions we have had in recent years of European economic problems we have kept our Commonwealth partners fully informed and we have consulted them throughout at every stage. Certainly, we shall continue to do so.
Forthly, we must work to create a political situation in which an economic negotiation can be fruitful. I have learned one thing in recent years, if nothing else, and that is that if we have not the right political atmosphere economic negotiation can never succeed. I do believe, per contra, that given the right political atmosphere an economic negotiation will not take very long to work out in practice.
I am sure that we must continue to work on this problem of the political atmosphere, and that we can do that by developing every possible European cooperative venture we can, ranging from commercial ventures on which there could be joint activities in, say, Britain, France and Germany, at the one end, to N.A.T.O. and the new O.E.C.D. at the other end, which we were discussing in Paris at the end of last week, which is a development of the O.E.E.C. and which, I hope, will lead to a strengthening of co-operation in economic policy and development policy both of the Western European countries and of the two great North Atlantic countries.
In all these things we must work patiently on to try to establish every scrap of European co-operation that we can. We must build this brick by brick. There is nothing dramatic which can be done. There are no gimmicks. We believe, on the whole, in using bricks to build, not to throw through glass windows. It is better to drop them than to throw them, but it is wiser to use them for building something up. This must be the path of commonsense, to say that we are willing and anxious to negotiate with the Six for something of lasting use.
1217 Meantime, we build up E.F.T.A., continue to work in the G.A.T.T. for the general reduction of tariffs all round, continue our negotiations with the Commonwealth, and try to create the political atmosphere essential as the basis of a satisfactory economic settlement, because Europe cannot afford another failure in a major economic negotiation. We must build the right political situation first, which will be to the greatest possible extent of benefit to all, with our united political will to build up European institutions.
I am sure that it would be wrong to panic. I am sure that it would be utterly wrong to take long-term decisions of immense consequence to this country on the basis purely of short-term considerations. The problem is undoubtedly of the greatest seriousness, but it is soluble given the right political atmosphere. One thing which has burned itself into my mind throughout the last few years is the utter folly and tragedy of Western Europe
§ failing to solve these problems in the face of the dangers of the modern world. I believe that the folly and tragedy of failure is so obvious that we shall, in fact, succeed some time, sooner, I hope, but maybe later, in finding a solution. It is in the fundamental interests of all of us that it shall be found by patience, by good will, and by realistically facing all the problems, as, I believe, the House has faced them today.
§ Mr. Holt
Is the right hon. Gentleman aware that there is no unanimity in the House on this matter and that there are a good many hon. Members who believe that the Government must say that they are prepared to enter the Common Market, and who intend to register that view tonight by dividing the House?
§ Question put:—
§ The House divided: Ayes 215, Noes 4.1219
|Division No. 147.]||AYES||[9.59 p.m.|
|Agnew, Sir Peter||Currie, G. B. H.||Hirst, Geoffrey|
|Aitken, W. T.||Dalkeith, Earl of||Hopkins, Alan|
|Allason, James||Dance, James||Hornby, R. P,|
|Amory, Rt. Hn. D. Heathcoat (Tiv'tn)||d'Avigdor-Goldsmid, Sir Henry||Hornsby-Smith, Rt. Hon. Patricia|
|Arbuthnot, John||Deedes, W. F.||Howard, Gerald (Cambridgeshire)|
|Atkins, Humphrey||Donaldson, Cmdr. C. E. M.||Hughes, Hector (Aberdeen, N.)|
|Barber, Anthony||Doughty, Charles||Hughes Hallett, vice-Admiral John|
|Barter, John||Drayson, G. B.||Hughes-Young, Michael|
|Batsford, Brian||Duncan, Sir James||Hutchison, Michael Clark|
|Baxter, Sir Beverley (Southgate)||Elliott, R. W.||Jackson, John|
|Bellenger, Rt. Hon. F. J.||Emery, Peter||James, David|
|Bennett, F. M. (Torquay)||Emmet, Hon. Mrs. Evelyn||Janner, Barnett|
|Bidgood, John C.||Erroll, Rt. Hon. F. J.||Jay, Rt. Hon. Douglas|
|Bingham, R. M.||Farey-Jones, F. W.||Jenkins, Robert (Dulwich)|
|Birch, Rt. Hon. Nigel||Farr, John||Johnson, Eric (Blackley)|
|Bishop, F. P.||Fernyhough, E.||Johnson Smith, Geoffrey|
|Black, Sir Cyril||Finch, Harold||Kerans, Cdr. J. S.|
|Blackburn, F.||Fletcher, Eric||Kershaw, Anthony|
|Bossom, Clive||Forrest, George||King, Dr. Horace|
|Bourne-Arton, A.||Fraser, Ian (Plymouth, Sutton)||Kirk, Peter|
|Bowden, Herbert W. (Leics, S.W.)||Gammans. Lady||Leavey, J, A.|
|Box, Donald||Gardner, Edward||Lee, Frederick, (Newton)|
|Braine, Bernard||George, J. C. (Pollok)||Legge-Bourke, Sir Harry|
|Brewis, John||Gibson-Watt, David||Lever, L. M. (Ardwick)|
|Brooman, White, R.||Glover, Sir Douglas||Lilley, F. J. P.|
|Browne, Percy (Torrington)||Glyn, Sir Richard (Dorset, N.)||Linstead, Sir Hugh|
|Bryan, Paul||Goodhart, Philip||Litchfield, Capt. John|
|Bullard, Denys||Goodhew, Victor||Lloyd, Rt. Hon. Selwyn (Wirral)|
|Campbell, Gordon (Moray & Nairn)||Gower, Raymond||Longbottom, Charles|
|Carr, Compton (Barons Court)||Grant, Rt. Hn. William (Woodside)||Longden, Gilbert|
|Carr, Robert (Mitcham)||Green, Alan||Loveys, Walter H.|
|Cary, Sir Robert||Gresham Cooke, R.||Low, Rt. Hon. Sir Toby|
|Channon, H. P. G.||Griffiths, W. (Exchange)||Lucas-Tooth, Sir Hugh|
|Chataway, Christopher||Hamilton, Michael (Wellingborough)||McKay, John (Wallsend)|
|Clark, Henry (Antrim, N.)||Harris, Reader (Heston)||McLaren, Martin|
|Clark, William (Nottingham, S.)||Harrison, Col. J. H. (Eye)||McLaughlin, Mrs. Patricia|
|Collard, Richard||Harvey, Sir Arthur Vere(Macclesf'd)||McMaster, Stanley R.|
|Cordeaux, Lt.-Col. J. K.||Hay, John||Macmillan, Maurice (Halifax)|
|Cordle, John||Hayman, F. H.||Maddan, Martin|
|Corfield, F. V.||Heald, Rt. Hon. Sir Lionel||Maginnis, John E.|
|Costain, A. P.||Healey, Denis||Maitland, Sir John|
|Coulson, J. M.||Hendry, Forbes||Marquand, Rt. Hon. H. A.|
|Courtney, Cdr. Anthony||Hicks Beach, Maj. W.||Marten, Neil|
|Crosthwaite-Eyre, Col. O. E.||Hiley, Joseph||Mathew, Robert (Honiton)|
|Cunningham, Knox||Hill, Mrs. Eveline (Wythenshawe)||Matthews, Gordon (Meriden)|
|Curran, Charles||Hill, J. E. B. (S. Norfolk)||Maudling, Rt. Hon. Reginald|
|Mawby, Ray||Scott-Hopkins, James||Turton, Rt. Hon. R. H.|
|Maydon, Lt-Cmdr. S. L. C.||Sharples, Richard||van Straubenzee, W. R.|
|Mills, Stratton||Shaw, M.||Vane, W. M. F.|
|Mitchison, G. R.||Shepherd, William||Vaughan-Morgan, Sir John|
|Montgomery, Fergus||Skeet, T. H. H.||Vosper, Rt. Hon. Dennis|
|Mott-Radclyffe, Sir Charles||Smith, Dudley (Br'ntf'rd & Chiswick)||Wainwright, Edwin|
|Neave, Airey||Smithers, Peter||Wakefield, Edward (Derbyshire, W.)|
|Noble, Michael||Spearman, Sir Alexander||Wall, Patrick|
|Nugent, Sir Richard||Stanley, Hon. Richard||Ward, Rt. Hon. George (Worcester)|
|Oliver, G. H.||Stodart, J. A.||Watts, James|
|Ormsby Gore, Rt. Hon. D.||Stoddart-Scott, Col. Sir Malcolm||Webster, David|
|Osborn, John (Hallam)||Storey, Sir Samuel||Wells, John (Maidstone)|
|Osborne, Cyril (Louth)||Strachey, Rt. Hon. John||Whitelaw, William|
|Page, Graham||Studholme, Sir Henry||Whitlock, William|
|Pearson, Frank (Clitheroe)||Summers, Sir Spencer (Aylesbury)||Williams, Dudley (Exeter)|
|Percival, Ian||Sumner, Donald (Orpington)||Wilson, Geoffrey (Truro)|
|Pike, Mitt Mervyn||Talbot, John E.||Wilson, Rt. Hon. Harold (Huyton)|
|Pilkington, Capt. Richard||Tapsell, Peter||Wise, A. R.|
|Pitt, Miss Edith||Taylor, W. J. (Bradford, N.)||Wolrige-Gordon, Patrick|
|Pott, Percivall||Teeling, William||Woodhouse, CM.|
|Price, David (Eastleigh)||Temple, John M.||Woodnutt, Mark|
|Price, J. T. (Westhoughton)||Thatcher, Mrs. Margaret||Woollam, John|
|Ramsden, James||Thomas, Peter (Conway)||Worsley, Marcus|
|Rawlinson, Peter||Thompson, Kenneth (Walton)|
|Redmayne, Rt. Hon. Martin||Thompson, Richard (Croydon, S.)||TELLERS FOR THE AYES:|
|Rodgers, John (Sevenoaks)||Tilney, John (Wavertree)||Mr. Chichester-Clark and Mr. Peel.|
|Russell, Ronald||Turner, Colin|
|Davies, Rt. Hn. Clement (Montgomery)||Grimond, J.||TELLERS FOR THE NOES:|
|Donnelly, Desmond||Thorpe, Jeremy||Mr. Wade and Mr. Holt.|
That this House recognises the need for political and economic unity in Europe, and would welcome the conclusion of suitable arrangements to that end, satisfactory to all the Governments concerned.