HC Deb 30 July 1962 vol 664 cc34-43
The Lord Privy Seal (Mr. Edward Heath)

With your permission, Mr. Speaker, and that of the House, I wish to make a statement on the progress of the Brussels negotiations.

A meeting of Ministers took place in Brussels from 24th to 28th July. At our first session on 24th July, we resumed discusssion of problems arising for British domestic agriculture. We considered the extent to which the Community's arrangements for two commodities—pigmeat and eggs—give producers an assurance of an adequate return.

Problems which would arise for these commodities during the transitional stage were also considered. Officials were instructed to continue their work on the basis of the ministerial discussion, and we will resume our discussion on both these products at a later meeting.

Ministers also had an initial discussion on the transitional arrangements for horticulture.

The major part of the meeting—from 25th to 28th July—was devoted to the problem of imports of foodstuffs, mainly cereals, meat and dairy products and sugar, from the Commonwealth. As I have already told the House, all seven Governments have agreed, in the context of an enlarged Community, to take an early initiative to secure long-term agreements on a broad international basis for the principal agricultural products.

At the same time, the members of the Community have accepted the importance of reaching an understanding on the purposes of such agreements and on the points to be covered in them. We also considered together the question of price and production policy in an enlarged Community, which would have a major influence on the volume of imports.

We discussed the position which would arise if these wide international agreements did not prove practicable. The Six Governments have stated their readiness to conclude agreements, with the same purposes, with those countries who wish to do so, in particular, the Commonwealth countries. The consideration of arrangements for the transitional period continued.

As the House knows, the problems which arise in this sector of foodstuffs are the most difficult in the negotiations. They are complicated by the fact that the Community's price policies are still in the course of development. We must seek to strike a balance between the interests of farmers in an enlarged Community, including our own, and the interests of traditional exporters, in particular, the Commonwealth. In so doing we must recognise that patterns of trade cannot and will not remain static, but that the arrangements reached must promise to work out fairly and must not damage the essential interests of those concerned.

In the intensive discussions that have taken place during the past week we have made some progress in each of the sectors I have just mentioned. We did not, however, reach agreement, and the discussions will be continued at a further ministerial meeting this week, beginning on Wednesday, 1st August.

Mr. H. Wilson

No hon. Member, by his questions this afternoon, will want to make the present situation more difficult than it has already become, and if I put one or two questions to the right hon. Gentleman for the purpose of obtaining information, will he understand that we shall understand if he has difficulties in giving all the information that we would like at this stage?

First, is the House right in assuming that on the question of the long-term position—the post-1970 position—of Commonwealth imports the Government and the Six have reached an agreement, and that that agreement involves not merely the abolition of preference, but, so to speak, the creation of reverse preference against the Commonwealth, and that there will be no physical guarantees for Commonwealth imports after 1970?

Secondly, are we to understand that the recent difficulties Which have occurred in the negotiations—I do not want to use a more dramatic phrase— related purely to the transitional arrangements between now and 1970, and related to the extent to which, and the speed at which, existing preferences and other guarantees are to be wound up by 1970? If the right hon. Gentleman can answer those questions, will he do so?

Finally, since he mentioned sugar, and since there has been little in the Press statements about this, is he yet in a position to say anything about arrangements to ensure the continuance of the Commonwealth Sugar Agreement, in view of the vital importance of that Agreement to the economies of a large number of Commonwealth countries?

Mr. Heath

We have had preliminary discussions on the question of sugar and, of course, we have set forth the importance of the Commonwealth Sugar Agreement in this context. I cannot give the right hon. Gentleman further details about that.

As for the post-1970 period, I referred, in my statement, to the declaration by the Six that in the event of world-wide agreements not having been obtained or not being practicable, they are prepared to negotiate specific trade agreements in these commodities with other countries, in particular, the Commonwealth countries, for that period. That is a firm undertaking which they have given in the course of these negotiations.

So far as the second question of the right hon. Gentleman is concerned, it is not correct to say that the things which have not yet been agreed between us relate only to the transitional period. The whole question of price policy in the Community and everything involved in that part of the discussions applies not only to the transitional period, but for the Whole period as far into the future as one can see.

Mr. Wilson

For the long term, the problem now for the right hon. Gentleman is to get assurances that the Community will be outward and not inward looking and that it will not seek to be autarchic in the supplies of foodstuffs. Will he say whether he has now conceded the point that there will be reverse preferences against Commonwealth foodstuffs coming in after 1970?

Mr. Heath

I cannot, of course, deal with that particular problem, because it depends on the nature of any trade agreements made by the Community with other countries and, in particular, with the Commonwealth. That is bound to be the case until those trade agreements are negotiated. What we have been dealing with in part is the question of preferential arrangements during the transitional period, and here—

Mr. Jay indicated dissent.

Mr. Heath

The right hon. Gentleman the Member for Battersea, North (Mr. Jay) must bide his patience a little longer to hear the details of this until we get further on with the negotiations.

In the transitional period there is the complication at the moment that we have one system of preference, the tariff system, and that the arrangement which is being built up in the Common Market or European Community is a levy preference and is a different system.

Mr. Turton

Will my right hon. Friend make clear—the view at present is that he is pressing for and not receiving definite assurances regarding Commonwealth imports of appropriate foodstuffs both up to 1970 and after—that he will continue on that firm line, which is in line with the pledges given by the Government last July?

Mr. Heath

Nothing has yet been decided and, as I think my night hon. Friend realises, we are dealing with both the transitional period up to 1970 and the long-term events after that. In the discussions we have been having on price policy it is not only a question of the effect on imports of these foodstuffs into the United Kingdom market, but into the whole of the market in the enlarged Community.

Mr. Grimond

If the Six have agreed to conclude special arrangements with the Common wealth after 1970, as I understand that they have done—[HON. MEMBERS: "They have not."] I wish to find out about this. I understood from the night hon. Gentleman's statement that they have and, if so, I welcome it, but may we have that confirmed or denied? I understand from the statement that they have agreed to conclude agreements on a narrower basis in the long run. If that is so, where is the present difficulty arising? Is it over the level of pukes, or over the details of the agreements—or have I misunderstood the Minister's statement?

Mr. Heath

What I was referring to in my statement was that in the event of world-wide agreement not being possible, or not being practicable, the Six Governments have given an undertaking of their readiness to conclude agreements with the same purposes, that is, the purposes set out for world-wide agreement, with those countries who wished to do so, that is, those countries who were ready to have world-wide agreement but could not have it because other countries would not agree or were not willing to reach agreement, including, in particular, the Commonwealth countries. The Six would have agreement with the remaining countries on these products, including, in particular, the Commonwealth countries.

Mr. Biggs-Davison

May I ask my right bon. Friend whether the negotiations regarding temperate foodstuffs are now proceeding on the basis that Commonwealth imports into Europe are not to be treated more favourably than those of say the United States or the Argentine? Would not it be better for Western Europe and for the Commonwealth if the farm surpluses of the United Kingdom, Western Europe, Canada, Australia and New Zealand were considered as a single problem within the framework of Europe and the Commonwealth and not, as it were, fobbed off on to some world-wide agreements which, may or may not come off?

Mr. Heath

I very much doubt whether it is possible to reach an agreement on these foodstuffs on the limited basis which my hon. Friend has mentioned. If we are to try to reach agreement about it, it would be an agreement which took into account other traditional suppliers, for example, to the United Kingdom markets, the United States and the Argentine. I think that my hon. Friend will also recollect that for wheat, the major cereal, there is no preference for Commonwealth wheat into this country and, therefore, we are dealing with all suppliers on exactly the same basis, including the United States and the Argentine as well as the suppliers from Australia and Canada.

Mr. Blyton

Is the Minister aware that the further these negotiations proceed the more many of us are convinced that he is giving away everything and getting nothing in return? Is the Minister further aware that the vast majority of the people of this country are against our application? Does not he think that he should now withdraw the disastrous application to join the Common Market?

Mr. Heath

No, the hon. Gentleman is absolutely wrong in the first part of his question and, what is more, he has no justification for making the assertion contained in it. His judgment of public opinion does not, I think, correspond with that of other responsible observers.

Sir D. Walker-Smith

Would my right hon. Friend say that if the interests of the Commonwealth are to be treated on exactly the same basis as those of other third panties, that bespeaks an end to Commonwealth preference system, and, in so doing, would threaten the whole Commonwealth as a political and general institution?

Mr. Heath

I have been careful to explain that in certain major cases, and, clearly, that of wheat, the Commonwealth has no preference regarding markets and at present is being dealt with on exactly the same basis as the United States, the Argentine and any other supplier of that commodity. Therefore, in any other trade arrangements which we would want to make— if I follow the advice of my right hon. and learned Friend—we should be creating major new preferences in favour of Commonwealth countries and against the traditional suppliers of wheat—

Mr. Jay indicated dissent.

Mr. Heath

It is no use the right hon. Gentleman denying that. It is a fact and it has to be taken into account in these negotiations.

From the point of view of other products with varying levels of preferences, we are dealing with them in the transi- tional period. As I have described, there is a new alternative system of preference in the European Economic Community which, again, is one of the major factors in these negotiations.

Mr. Gaitskell

The right hon. Gentleman mentioned that there was no Commonwealth. preference so far as wheat is concerned. Would not he affirm that there is such a preference in the case of dairy products, butter and meat, and, therefore, his argument does not quite apply in those cases? Would he further agree that the purpose, as I understand it, of securing world international agreements was to give some kind of guarantee to Commonwealth producers without involving the Community in discrimination as between different outside suppliers?

Following on that, may I ask what is meant by his statement that the Six are ready to conclude agreements, if international agreement is not possible, with countries, particularly Commonwealth countries, individually? Do the Six mean that they would be prepared to give such countries a preferential position? Otherwise, what would be the advantage of such agreements?

Mr. Heath

The view of the countries in the Community is that if countries have made a definite attempt to reach worldwide agreement—I think that the future situation will be different from that of the past because of the strength of the enlarged Community, which will be so great both in production of and the demand for these commodities that it will have much greater influence than any other single country in the past— and if they are not successful in doing that because a particular country or countries refuse to reach agreement, then they would be entitled to make trade agreements with the remaining countries. It is obvious, as the right hon. Gentleman says, that the terms of the agreement would be of value to those countries in one form or another, otherwise 'they would not wish to make it. That would be the purpose of the Community making an agreement with the remaining countries on a narrower basis than a world-wide agreement and particularly the Commonwealth countries.

Mr. Gaitskell

May I ask one other question following on that? Will the right hon. Gentleman agree that it is of great importance to know what is exactly the position so far as preference is concerned before any such negotiations take place? Does he contemplate that such negotiations for either worldwide agreements or specific agreements will take place only in or about 1970? Does he suppose that by then the existing preferential position of the Common-wealth will have disappeared, or will it still be maintained? In other words, what will fee the alternative if such negotiations do not succeed?

Mr. Heath

The intention as it has been declared by the Community, and as we would expect, is that an attempt to secure this should be made at the earliest opportunity and if possible by 1963.

Mr. Birch

In view of the preamble of the right hon. Member for Huyton (Mr. H. Wilson) to his first supplementary question, would my right hon. Friend think it profitable to make representations to the Opposition that next Wednesday could hardly be a worse day for a debate in the House on the Common Market when the negotiations are just reaching their most delicate stage?

Mr. Bellenger

The House will be aware that we are due to debate this matter on Wednesday and that it is quite obvious from what the Lord Privy Seal has said that there will be very little new information for him to give us on this matter and that the negotiations will be more protracted than the Government originally thought. Therefore, may I ask the Leader of the House whether the Government will announce this week what will happen when we are in recess, when possibly—we hope so—the Lord Privy Seal will have come to some definite conclusion on his negotiations?

Mr. Heath

I think that, with the leave of the Leader of the House, I should inform the House that if the negotiations continue after the House has risen, I would on each occasion be prepared to make a public statement, giving information, exactly as if the House were sitting. We are aware of the point raised by the Leader of the Opposition, 'that these statements should be circulated as a White Paper. I know that the Leader of the House is giving thought to that.

Sir T. Beamish

Is my right hon. Friend aware that the great majority of us on this side of the House, rather than carping and criticising the whole time, wish him the very best of luck in the negotiations, and hope and pray that he will be able to negotiate terms which will be quite clearly seen to do full justice to the problems of New Zealand, Australia and Canada?

Mr. Harold Davies

Will the right hon. Gentleman give an assurance to the House, on the statement that he has made today, that the Six are prepared to conclude agreements and tell the House categorically whether or not he would be prepared to submit to this timetable and enter into the Common Market without his and the House knowing definitely what kind of agreements these are likely to be? Would he just take the word of the Common Market that they had agreed to negotiate and take Britain in on these terms vis-à-vis the Commonwealth?

Mr. Heath

No, Sir. In the arrangements that we have negotiated in the past few days we set out the purpose of the world-wide agreements on the subjects that would be covered in the negotiations on them. It is then dearly stated that if these are not obtained the negotiations with the remaining countries would be for the same purposes and cover the same headings.

Mr. Fell

Is my night hon. Friend not aware that he appears—it may not be true—in these negotiations to be getting further and further away from his assurances to the Commonwealth? Is he not aware that it is extremely difficult to square these prospects of negotiations with the Commonwealth countries as well as the Argentine and countries that have no connection with the Six with the promises already made to the Commonwealth countries?

Mr. Heath

I do not think that that is the case. When one is dealing with certain commodities, then other countries are involved and they are most definitely involved as traditional suppliers.

Mr. Healey

Can the right hon. Gentleman confirm that he agrees with the policy of Her Majesty's Government as defined by the Chancellor of the Exchequer last Thursday, namely, that we should not make any final decision on this until we have firm safeguards as to our vital interests, and that we should not first enter the Common Market and then negotiate for safeguards? If that is the case, and if, as the right hon. Gentleman has just told us, it is proposed to have a world conference next year to discuss the future treatment of Commonwealth foodstuffs, can he assure the House that Her Majesty's Government will enter into no commitment for the ending or even the tapering off of Commonwealth preference until we know by experience next year what the prospects of global agreements are likely to be?

Mr. Heath

No, Sir. Certainly not. The processes of obtaining world-wide agreements over a considerable number of commodities is bound, obviously, to take a certain amount of time. What is important is that we should set about it at the earliest opportunity, and that has been agreed between ourselves and the Six. What is more, we are, of course, allowing in the negotiations for the eventuality that these world-wide agreements do not come about and for what should be done both in the transitional period and at the end of the transitional period if that is not the case.

Several Hon. Members rose

Mr. Speaker

Order. We cannot go on debating this matter without a Question before the House. I have reason to think that we may come back to it in the near future.