EUROPEAN ECONOMIC COMMUNITY

HC Deb 04 June 1962 vol 661 cc8-20

3. Mr. Zilliacus

asked the Lord Privy Seal whether he will give an assurance that the conditions on which he is insisting for entering the European Economic Community include retention of the right to pursue an independent foreign policy and to stand clear of any commitment to the foreign policies of the principal partners in the Common Market, France and the German Federal Republic.

The Lord Privy Seal (Mr. Edward Heath)

Our foreign policy is already subject to the limitations which we have freely accepted under the North Atlantic Treaty and the Revised Brussels Treaty in order to ensure our common defence. Furthermore, we have some far-reaching commitments, which in the case of the Revised Brussels Treaty are automatic, to the members of the European Economic Community, all of which are parties to the two Treaties.

Mr. Zilliacus

But did not the Lord Privy Seal himself tell the House on 16th May that The Six members of the Community are of the view that the full members of the Community should also be members of whatever political arrangements are agreed between them."—[OFFICIAL REPORT, 16th May, 1962; Vol. 659. c. 1345.] Do not these political arrangements contemplated by the Six include the abandonment of sovereignty of vital areas and also commitments to the economic and defence policies of the principal members of the Common Market, France and Germany?

Mr. Heath

But the members of the Community have not yet reached agreement about the nature of political union which they have been discussing. From the knowledge which I have so far, decisions are taken by unanimity of vote.

Mr. F. M. Bennett

While on this general subject, would not my right hon. Friend agree that this reluctance on the part of the hon. Member for Manchester, Gorton (Mr. Zilliacus) to have our foreign policy influenced by the interests of any foreign Power should be encouraged and welcomed?

Mr. H. Wilson

Would not the right hon. Gentleman get the support of both sides of the House and save a lot of time in the debate next Wednesday and Thursday if he were to answer this question by saying, "Subject to our existing commitments, yes"? Why not give a clear answer and say to the House that he is making it a condition of this agreement that we enter into no more political commitments as part of the Common Market?

Mr. Heath

We are not making that a condition at all. The negotiations which we are embarking on in Brussels are not directly concerned with the political considerations. The political conditions I have just stated are being discussed by the members of the Community in what is now the Cattani Commission. As I have often explained in the House, when general agreement has been reached between the Foreign Ministers concerned, but before any final agreement is reached, we have suggested we should be taken into full consultation.

4. Mr. Rankin

asked the Lord Privy Seal to what extent the United States Government are participating as observers in the Common Market negotiations.

Mr. Heath

No United States representatives are participating as observers in the negotiations.

Mr. Rankin

Is the right hon. Gentleman aware that according to the Daily Telegraph and other newspapers of Thursday week, the President of the United States of America, who has no observers at the negotiations, has committed himself to the view that it will be unfortunate if Britain enters the Common Market? Does the right hon. Gentleman, who has been actively participating in the negotiations, concur with the view expressed by Mr. Kennedy?

Mr. Heath

Of course, the President of the United States is entitled to express his views about any matter of any kind, including those of foreign relations, but the United States do not play any part in the negotiations. What is true is that United States' interests may well be affected. They have, after all, very large exports of foodstuffs to this country, and many other interests, and as a result of successful negotiations there may be further discrimination against United States trade. That is obviously a matter of concern to the United States.

Mr. Rankin

Surely the right hon. Gentleman will not so openly evade the question I am asking? Does he, who has been participating in negotiations in which America has no part, agree with the view expressed by Mr. Kennedy?

Mr. Heath

As I heard the hon. Member, he said that the President expressed the view that it would be unfortunate if the United Kingdom entered the Community.

Mr. Rankin

Yes.

Mr. Heath

Yes. That, I think, is exactly the reverse of the view which was expressed.

8. Mr. Thornton

asked the Lord Privy Seal if discussions have been concluded and any decision reached on the problem of imports into the United Kingdom of manufactured goods, particularly cotton textiles, from Commonwealth tropical countries.

31. Mr. Healey

asked the Lord Privy Seal if he will publish the proposals made by Her Majesty's Government for the treatment by the Common Market of manufacturers from India, Pakistan and Ceylon.

Mr. Heath

No, Sir. As I said in the statement which was circulated with the OFFICIAL REPORT on 31st May, I have made comprehensive proposals on the exports of India, Pakistan and Ceylon, and the Deputies in Brussels have been asked to propose solutions for consideration at the next meeting of Ministers. It would be contrary to practice to publish confidential documents relating to the negotiation.

Mr. Thornton

Will the right hon. Gentleman, in these negotiations, not forget that the textile area of Lancashire is also a member of the Commonwealth?

Mr. Heath

Yes, I fully recognise the difficulties of Lancashire in this matter.

Mr. Healey

But does not the Lord Privy Seal agree that the economic problems of the Asian members of the Commonwealth depend on a substantial increase in their exports to the developing countries of such goods as textiles and cheap-labour manufactured goods of various kinds, and can he explain why the Indian representative in Brussels has protested so strongly to the British Government over the proposal they made for dealing with these goods? It does not allow for any increase in total exports of those goods into Europe as a whole if we join the Common Market.

Mr. Heath

I cannot go into the details of these proposals, obviously, till we reach the further stages of the negotiations, but we do recognise—and I have done my utmost to impress upon those taking part in the negotiations—the need of the Asian countries, India, Pakistan and Ceylon, to which these proposals relate, and also of Hong Kong, for which we have not yet put in a proposal, to be able to have exports which will enable them to import the requirements of their development plans and also pay for the servicing of the loan charges. I believe that these countries themselves want a great part of their industrial production internally to be devoted to their home markets.

13. Mr. Frank Allaun

asked the Lord Privy Seal what consultations took place with the Governments of Australia, Canada and New Zealand before Her Majesty's Government decided to accede to the demand of the European Economic Community that preferences for the import to the United Kingdom of their manufactures should be abolished by 1970.

20. Mr. Manuel

asked the Lord Privy Seal whether Her Majesty's Government obtained the approval of the Governments of Australia, Canada and New Zealand before agreeing to the abolition of United Kingdom preferences for their manufactures and the application of the Common Market tariffs against those manufactures.

21. Mr. Oram

asked the Lord Privy Seal if he consulted the Governments of Australia, India, Canada and New Zealand before agreeing in the current negotiations on Great Britain's entry into the European Economic Community to the extinguishing of preferences on the export of manufactured goods by these Commonwealth countries to the United Kingdom by 1970.

Mr. Heath

All the Commonwealth Governments concerned have been fully consulted throughout the negotiations.

Mr. Allaun

Have these Governments since intimated that they consider that this agreement honours the British Government's pledge to make arrangements satisfactory to the special interests of the Commonwealth?

Mr. Heath

It is fully understood that the Commonwealth Governments will wish to review the outline of the negotiations as a whole before giving any opinion.

Mr. Manuel

Why has the Lord Privy Seal not fulfilled the Government's pledge that the Dominion Governments would have adequate safeguards and be adequately consulted before negotiations were concluded? In view of the resentment that has been aroused and expressed by the Canadian and Australian Prime Ministers, can the right hon. Gentleman inform the House what concessions he received in return for this issue that he has signed away regarding manufactures from these Dominions?

Mr. Heath

The Commonwealth Governments concerned have been fully consulted at every stage about these proposals. The hon. Gentleman in his supplementary question asked why they had not been fully consulted. They have been fully consulted at all stages. We first raised this matter with them several months ago and they were kept in touch the whole time at every stage of the negotiations. As I have told the House, they were told shortly before the last Ministerial meeting the exact scope within which we were prepared to negotiate, and within three-quarters of an hour of the end of the meeting their representatives in Brussels were told the full details of the solution on which we had been able to agree. There have been full consultations at every stage with the Commonwealth Governments.

So far as the views of the Commonwealth countries are concerned, they wish to see the outline as a whole, and I suggest that the House will want to do that before forming any fin al opinions. So far as this arrangement is concerned, it is better than the arrangements under the Treaty of Rome. It will last for a longer period, provide for a more gradual change, and go on for three years longer than the Treaty of Rome arrangements. In addition, it gives an undertaking by the Community in respect of direct consultations with the three Commonwealth Governments, besides their undertaking about G.A.T.T. negotiations. It is, therefore, a better arrangement than is provided in the Treaty of Rome, and this is the step which the members of the Community have taken towards meeting our needs.

Mr. Oram

Is it not clear from the statement issued by Mr. Menzies and Mr. Marshall that they are profoundly dissatisfied with this arrangement which has been reached about manufactured goods, and will the Lord Privy Seal give the undertaking which I think they were seeking in their statement—that this arrangement will not set a pattern for future arrangements in respect of Commonwealth foodstuffs?

Mr. Heath

I have already told the House on a number of occasions, as indeed all the Commonwealth countries know, that each of the variety of problems with which we are dealing in these negotiations has to have its own form of solution, and that is what we are negotiating.

Mr. Smithers

Is it not the case that this is a provisional agreement, and can my right hon. Friend say what is the percentage of the exports of the countries concerned which is affected by it?

Mr. Heath

The total amount of trade concerned is about £55 million a year. The percentage for New Zealand is one quarter of 1 per cent. of the imports into the United Kingdom, for Australia 2 per cent. and for Canada between 15 and 16 per cent. We have never underestimated the importance to these individual countries of this trade, even though the percentages in the case of Australia and New Zealand are small. What was necessary was to give sufficient time over which any adaptations or changes necessary could be made. It is quite wrong to think that this trade has been eliminated from the United Kingdom. It gives a long time, over many years, in which necessary adaptations can be made.

Mr. Healey

Is not the right hon. Gentleman's only success in this respect that he has succeeded in inflicting death by a thousand cuts on this aspect of Commonwealth trade rather than a rapid beheading? Does he not take seriously the unprecedented statement by the Prime Minister of Australia and the Deputy Prime Minister of New Zealand last Friday? Does not this indicate a very real fear that this may set a precedent for the settlement of other Commonwealth problems?

Mr. Heath

Of course, I take the statement of the Prime Minister of Australia and the Deputy Prime Minister of New Zealand most seriously. The hon. Gentleman is absolutely wrong in his description of what is happening to this principle. Much of the trade from these countries is able to compete fully in the other markets of the world even where it is moving over a tariff. As I have said, what is necessary is that there should be time for this trade to adapt itself where that is necessary.

Mr. Turton

Can my right hon. Friend say whether in the full consultations he received any assurance from the three Commonwealth Governments that they would not abolish or reduce the preferences which they at present give us on the £600 million of manufactured goods that we export to them?

Mr. Heath

That is a matter that the Commonwealth countries will also want to discuss when they see the outline of the negotiations as a whole. That is of course fully understood.

Mr. Manuel

After the right hon. Gentleman's example?

18. Mr. Shinwell

asked the Lord Privy Seal if he will state the items upon which agreement has now been reached in the negotiations with the six members of the European Economic Community.

15. Mr. Lipton

asked the Lord Privy Seal what agreement has been reached to date in the Common Market negotiations about the ending of Commonwealth preference by 1970.

Mr. Heath

I would refer hon. Members to the statement which I made to the House on 31st May.

Mr. Shinwell

Are we to understand that these so-called agreements have been finalised and are not subject to revision in the light of further negotiations? If that is not so, may I ask the right hon. Gentleman whether he is aware that if there is no finalised agreement, I would welcome a statement of that kind? Having the utmost respect for the right hon. Gentleman, I hope that he will fail to reach any further agreement, because if he does, it will mean irretrievable disaster for this country.

Mr. Heath

The right hon. Gentleman's views are fully known, but he must be careful or he will soon find himself qualifying for a full-page advertisement in every newspaper in the country.

Mr. Shinwell

Is the right hon. Gentleman aware that I do not require Lord Beaverbrook or anybody else to pay for an advertisement for me? I can manage all the advertisements myself.

Mr. P. Williams

Is my right hon. Friend aware that the announcement last week about the provisional agreement breaches the principle of Ottawa and Imperial Preference arrangements, that it is a breach of principle and a breaking of faith of the greatest possible magnitude, and that whether the matter refers to a half of 1 per cent. of one country's trade or something greater, this is a matter of principle which is sacro- sanct to a great number of us? What countervailing advantages do the Government see coming from this for Commonwealth countries and for this country?

Mr. Heath

My hon. Friend must wait until he can see the outline of the negotiations as a whole before he forms a judgment. When he speaks of a breach of principle, I would ask him to recognise that the pattern of Imperial Preference has been changing for a very large number of years, and is changing the whole time. It is quite wrong to say that it is this particular agreement which has breached a principle in the way in which my hon. Friend has described it. There are many aspects of Imperial and Commonwealth trade with which we shall have to deal in these negotiations.

Mr. S. Silverman

Can the right hon. Gentleman explain to the House, if agreement is ultimately reached on the basis of what is already provisionally agreed, how far the arrangements will permit Her Majesty's Government to protect Lancashire from the uncontrolled admission into this country of manufactured cotton goods from countries where the conditions of competition are not fair to Lancashire? Shall we still be able to do that or not?

Mr. Heath

The answer simply is this: the object of the rules of the Community —which are known as Economic Union—is to ensure fairness of competition within the Community itself. That, therefore, will deal with competition from textiles from other members of the Community. In addition, the Treaty of Rome provides full provision for dealing with dumping. This also can be used in the case mentioned by the hon. Gentleman. The third field affected is that of textiles from our own Commonwealth countries, and the answer here will depend on the arrangements negotiated on the basis of the proposals which I put forward last week.

23. Mr. Rankin

asked the Lord Privy Seal, in view of paragraph one of Article 92 of the Treaty of Rome. to what extent he is insisting, in the negotiations on entering into the Common Market, on Great Britain retaining her present freedom to use state resources to favour or take over certain enterprises, as part of planning for social progress which distorts, or threatens to distort, competition.

Mr. Heath

Her Majesty's Government fully accept that, in the conditions of an economic union, it is necessary to prevent the distortion of competition between member States. The achievement of social progress is not in OUT view in any way incompatible with Article 92 of the Treaty of Rome.

Mr. Rankin

Has not the Commission reserved the right to inquire constantly into all systems of aid in the Common Market States? Would not this be a direct invasion of our sovereign rights as a nation to dispose of our own resources as we see fit in the interests of the nation?

Mr. Heath

Regarding the first part of that supplementary question, there is nothing in the Treaty of Rome which prevents public ownership, further nationalisation or public planning. All of those three things take place in the existing members of the Community. That disposes of the first part of the hon. Gentleman's supplementary question. As to the second part, if he reads on to Sections 2 and 3 of Article 92, instead of reading only Section 1, he will find there that the Treaty lays down the circumstances in which aid can be given to areas which are in economic difficulty, and so on. That is within the power of the Commission and the circumstances are laid down in the Treaty.

Mr. H. Wilson

Will the Lord Privy Seal confirm that this Article and the related Articles would make it impossible for the present Government to maintain their own chosen instrument of the Iron and Steel Board and that this has been widely accepted in the steel industry? Secondly, when he refers to the distribution of industry, is he not aware that, under the Treaty, provision for the distribution of industry arrangements such as we have in this country now will become a dead letter?

Mr. Heath

I do not wish to make any statement until we have discussed the matter in the negotiations with the European Coal and Steel Community, which will be at a later stage. As to the second part of the supplementary question, I am afraid that I cannot agree with the right hon. Gentleman.

Viscount Hinchingbrooke

Is my right hon. Friend aware that a large number of Government supporters in Britain have followed the Government into the Common Market negotiations with enthusiasm, because they believe that if they are successful there will be no prospect of further nationalisation of British industry? May we take it from his original reply that that is not now the case.

Mr. Heath

I think that the answer to my noble Friend is that the Treaty of Rome does not make it impossible for further nationalisation to take place but, in fact, I do not think that there will be any.

Mr. H. Wilson

Is not the right hon. Gentleman aware that he is supposed to be negotiating on behalf of the whole nation and not on behalf of the small minority which now supports the Conservative Party?

Mr. Heath

That is, of course, my intention, and I shall do my best for the right hon. Gentleman and his friends.

25. Mr. Warbey

asked the Lord Privy Seal whether, in negotiating for British entry into the Coal and Steel Community, he will insist on such revisions of the Treaty establishing the Community, and of the Treaty of Rome, as to ensure that no British Government will be debarred from prohibiting the import of foreign coal, if they so desire.

Mr. Heath

No, Sir.

Mr. Warbey

Is the Lord Privy Seal aware that over half a million miners are deeply concerned at the answer given to this Question? They will not be prepared to approve of our entry into any of the European Community so long as it is possible, under the arrangements, for a British Government to be compelled to subject the British coal industry to the competition of foreign coal imports. Therefore, can he give the assurance for which I have asked?

Mr. Heath

There are provisions in the Treaty of Paris for dealing with dumping. But my understanding is that the coal industry knows that it is fully able to deal with competition with imports to this country and, indeed, it also recognises that large markets in the Community would become open to it.

Mr. Stratton Mills

Has my right hon. Friend noted the statement of Lord Robens, Chairman of the National Coal Board, welcoming Britain's possible entry into the Common Market?

Mr. Heath

Yes, Sir.

26. Mr. Blyton

asked the Lord Privy Seal to what extent the interests of the Commonwealth have been safeguarded in the new agreement with the European Economic Community on the subject of manufactured goods.

Mr. Heath

As I told the House on 31st May, the solution now worked out provides that the common external tariff would be applied to these imports at a rate slower than the normal timetable. The Community would be ready to take part in multilateral negotiations aimed at reducing, on a reciprocal basis, the level of the common tariff on industrial products, and there would be provision for consultation between the enlarged Community and Canada, Australia and New Zealand in 1966 and 1969.

Mr. Blyton

Is the Lord Privy Seal aware that since he announced the provisional agreement on Commonwealth manufactured goods, there has been the feeling that this is the commencement of the sell-out of the Commonwealth, to be completed by 1970? Does he not think that this disastrous exercise should be stopped in the light of Dr. Adenauer's statement that if Britain went in that would be one thing, but that, if the Commonwealth went in, the Market would be too unwieldy?

Mr. Heath

No, Sir. I believe that these matters should be examined very carefully and in the light of the situation as a whole. That time will come, when the hon. Gentleman will be able to judge.

Mr. Walker

Will the Lord Privy Seal confirm that when he consulted the representatives of Australia, New Zealand and Canada on this agreement they informed him that they disagreed with the suggestions he was going to make and that when they suggested an alternative he completely disregarded it? In future, instead of referring to "consulting the Commonwealth" will he say that he is "telling them"?

Mr. Heath

I flatly repudiate that suggestion. There have been full consultations in which the views of the Commonwealth countries have been taken fully into account. Consultation does not mean that the United Kingdom should accept everything which is stated by the individual Commonwealth countries. Furthermore, perhaps my hon. Friend will realise that in many cases the individual Commonwealth countries disagree with proposals put forward by other Commonwealth countries. This is inevitable and bound to be so in view of the nature of the interests involved. In those circumstances, the United Kingdom must make its own judgment.

Mr. H. Wilson

Is the right hon. Gentleman aware that when we debate this matter later this week we shall obviously be able to go into the question of manufactured goods at greater length, but that many of us fear that this diminishing safeguarding may become the precedent for the much more important case of foodstuffs from the temperate countries? Will the right hon. Gentleman take it here and now, in advance of the debate, that he will not get the support of the House for a proposal which merely provides for a temporary easement of the problem of Commonwealth agricultural goods and that what we will be concerned with will be the final solution and not the way by which it is reached?

Mr. Heath

The right hon. Gentleman and his hon. Friends have repeatedly said that this afternoon. I have accepted at all times in the House that in the question of temperate foodstuffs we are negotiating for the long term as well as for the short term.