HC Deb 16 May 1962 vol 659 cc1337-48
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.

I hope that it will be for the convenience of the House if, on this occasion, I confine myself to general matters and, at the same time, publish a more detailed account in the OFFICIAL REPORT.

At the ministerial meeting in March I asked for a full report to be prepared jointly by officials setting out the positions of both the European Economic Community and the United Kingdom on each sector of the negotiations and the arguments put forward to support them, together with a summary of the work done by officials in exploring the differences that existed. This report was ready on time, on 14th April, and has since been studied by all the Governments concerned and the Commission.

My purpose in asking for this progress report was to enable Ministers to see clearly where we had established common ground and what the gaps were between our positions after five months of analysis and explanation. This was essential before we could proceed to the point of considering satisfactory solutions to the problems involved in our application.

Our principal task at the ministerial meeting in Brussels last Friday and Saturday was to consider fully this progress report. This marked the end of the first or exploratory stage of the negotiations. Over almost the whole field the issues have now been clearly defined. The way is now open for the negotiation of solutions.

To facilitate the task of finding solutions, the British delegation tabled immediately before the ministerial meeting substantive proposals in three different sectors. First, we put forward a detailed plan for the treatment of exports of manufactures from Canada, Australia and New Zealand. Secondly, we submitted a general formula for the treatment of Commonwealth exports of temperate foodstuffs both in the short and the long term. Thirdly, we proposed detailed measures on various problems relating to United Kingdom agriculture.

At the ministerial meeting, a large part of which was in restricted session, Ministers had a preliminary discussion on the substance of these problems. We instructed our officials to work out possible solutions, within agreed terms of reference, which are to be reported to us in some sectors at our next meeting. In addition, the Ministers authorised the setting up of a working party to deal with particular aspects of horticulture in both the United Kingdom and the European Economic Community.

The Chairman of the Ministers of the Community informed the ministerial meeting that the delegations of the Six member Governments had accepted my request, made at the March ministerial meeting, that our objective should be to determine at least the main outlines of a possible agreement covering the whole field of problems by the end of July. That is, therefore, agreed between us.

There will, of course, be a great deal of work still to be carried out after this stage has been reached. But we have now entered upon the stage of negotiations proper. Many of the problems we have to solve are complex and difficult. The United Kingdom Delegation will pursue their solution with determination.

It was agreed that the next ministerial meeting should be held in Brussels on the 29th and 30th of this month and a further four-day meeting from 27th to 30th of June.

Mr. H. Wilson

I am sure that I speak for the House when I thank the Lord Privy Seal for making this statement after the first round of the discussions. Will he undertake that following each of the rounds of Ministerial dis- cussions a comparable statement, if possible more forthcoming, will be made to the House?

May I ask two questions? First, just before the meeting there were some important pronouncements by the German Chancellor and the French President. Was any reflection of those pronouncements and their effect on Britain's entry into the Common Market felt in the talks in Brussels? Will the right hon. Gentleman make it quite plain that as far as pronouncements of that kind are concerned, Her Majesty's Government will stand absolutely firmly to what they believe to be the minimum terms for Britain's entry and will not be pushed around by any statements made elsewhere?

Secondly, with regard to the proposals for the Commonwealth, the right hon. Gentleman referred to a general formula on agricultural commodities. Can he tell us a little more about this general formula, since there is a lot about it in the Press? Will he recognise that we on this side of the House, at any rate, feel that any formula which merely provides a temporary easement to the problems will not be regarded as satisfactory? The Commonwealth problem must be settled, if it is to be settled at all, on a basis which provides a permanent safeguard for the entry of Commonwealth goods into this country and into Europe and must not be bought off by temporary relief. Will he address his mind to that point?

Mr. Heath

I shall be very happy to make a further statement to the House after each Ministerial meeting. The right hon. Gentleman will find that in the detailed account which I am publishing in the OFFICIAL REPORT further information is forthcoming, but I think that he realises the problem of making a statement to the House, at the end of Questions, which is not too long or too detailed.

As far as the political statements from Bonn and Paris were concerned, there was no change in the atmosphere in the Ministerial negotiations in Brussels last week. I received an assurance from the leader of the German delegation that the policy of the Federal German Government is in no way changed and that they support and will work for our admission as a full member of the Community.

As far as the proposals for temperate foodstuffs from the Commonwealth are concerned—Canada, Australia and New Zealand—there are further details in the statement in the OFFICIAL REPORT. It deals with both the short term and the long term. It is a context into which can be fitted transitional arrangements commodity by commodity, when they are agreed upon, leading to a review of those arrangements and then arrangements for the long term or Common Market period. At the same time, the Government, as well, I believe, as the Commonwealth Governments, look to the time with the European Economic Community when worldwide arrangements may be possible in some commodities. In that case, of course, those arrangements would not be necessary.

Mr. H. Wilson

While we all look forward to that, will the Minister make it clear that no solution with regard to temperate zone foodstuffs can be regarded as satisfactory, whatever is done about short-term and long-term differentiation, which does not provide for the same volume of Commonwealth foodstuffs coming into this country and/or into Europe as we are getting at present, and as we should get if we remained outside the Common Market?

Mr. Heath

I have said that it is essential that there should be arrangements for comparable outlets in the long term.

Viscount Hinchingbrooke

For what reason did my right hon. Friend open the negotiations by offering an industrial tariff concession on behalf of Canada, Australia and New Zealand? Would it not have been better to open the negotiations by asking the Six what concessions they would make so that Britain and the Commonwealth could secure tariff reductions alongside each other?

Mr. Heath

The plan which we have put forward to deal with these manufactured goods, which excludes raw materials and manufactured foodstuffs, allows for the insertion of what is now known as the Kennedy Round, which will be the first round of tariff negotiations after the Kennedy proposals pass through Congress, if that proves to be the case, and the reason why the proposals were put forward was that in our judgment this was the best way of reaching a solution which we could put to the Commonwealth.

Mr. Grimond

The Lord Privy Seal's statement deals with the economic negotiations. Can he tell us anything about the political negotiations? Have the subjects been defined, have any negotiations gone on, or, if not, when is it intended to start them?

Mr. Heath

As I have said before, the political negotiations are not carried on in Brussels. The political negotiations are carried on by the six members of the Community themselves. Following the Bonn Declaration, in which the Heads of Government looked forward to a closer political arrangement between member countries, the Fouchet Commission prepared texts. It has now become the Cattani Commission: Signor Cattani, head of the Italian Foreign Office, is chairman. We have been kept fully informed about the nature of these texts. We have not asked to take part in that Commission because we are not members of the Community. We are not asking now to take part in that Commission.

In my speech to Western European Union on 10th April, I said that when there was general agreement between Ministers of the Six about the texts, but that before there was final agreement for a meeting of Heads of Government, we should wish to take part in discussions about that. I think that the whole House will support us in that because of their great importance both to Parliament and to the British people. Since the meeting in Paris on 17th April there has been no further discussion amongst the Ministers of the Six about the texts.

Sir H. Legge-Bourke

Will the Lord Privy Seal say whether, in referring to the whole field, he has included consideration of the possibility of a Customs union involving a common currency? Would he say what the developments have been since the summer of last year, when Professor Triffin, of Chicago University, advised the Finance Ministers on the possibility of a currency reserve pool?

Mr. Heath

In the negotiations we are examining with the Commission all the provisions of the Treaty of Rome referring to what is known as economic union—in other words, including common tariffs and common commercial policy and common agricultural policy. I understand that there has been no further movement in the Community itself towards a common currency and this matter has not entered into the negotiations.

Mr. Biggs-Davison

Since the overseas parts of the Commonwealth are no longer merely primary-producing countries but are industrialising, and since our great and vital markets in the Commonwealth overseas depend on our continuing ability to buy from them, may I ask whether the Lord Privy Seal is aware of the great concern at the widespread view which has been expressed in the Press and elsewhere that Commonwealth industrial imports to the United Kingdom are negligible and expendable?

Mr. Heath

I do not at all accept the view that these imports are negligible or expendable. They may be small in quantity in comparison either with our own trade, or with the trade of the possibly enlarged Community of the future, but they are of importance to the countries producing these industrial goods.

These goods are being examined in different groups: first, as I have already mentioned, industrial goods from the developed Commonwealth; secondly, industrial goods from the Asian countries of the Commonwealth; and, thirdly, industrial goods from those other countries for which we are seeking association, which are particularly the African independent countries and the Dependencies for which Her Majesty's Government are responsible.

Mr. Mendelson

In view of what the right hon. Gentleman has told the House this afternoon about the timing of these negotiations, does he agree, first, that this is now the second interim report he has given to the House? When he gave the first interim report he gave a promise that there would be a debate on the intermediary situation. Does he agree, secondly, that if there are some conclusions by the end of July, which would be shortly before the House adjourned for its Summer Recess, he should give an assurance to the House either that there will be a major debate before the House adjourns or that the House will be recalled during the Recess if conclusions have been reached?

Mr. Heath

My right hon. Friend the Leader of the House is aware of the request by the Leader of the Opposition last Thursday for a debate and is giving consideration to it. As to future debates, we are anxious to keep the House as fully informed as possible throughout these negotiations. As to what will be possible in the course of the negotiations later on, we must wait to see the timing of the objective, which I have outlined in my statement.

Mr. Deedes

On agriculture, can my right hon. Friend confirm that the retention of our Price Review system is one of the issues in the field for discussion to which he has referred? Does he accept the importance of this issue, at least during the transitional period?

Mr. Heath

Yes, Sir. I am in complete agreement with my hon. Friend on that.

Mr. Shinwell

I have two questions. First, the right hon. Gentleman referred to making submissions on the eve of negotiations which concern Canada, Australia and New Zealand. I am using the language of the right hon. Gentleman. Were these submissions in accord with the decisions of these Governments? Were these Governments consulted before these submissions were made preparatory to the negotiations? Secondly, will not these negotiations be over-shadowed by the somewhat derisory comments which President de Gaulle made about the United Kingdom in his speech yesterday, which was reported this morning?

Mr. Heath

As to the proposals which were put forward, both for the industrial products and for comparable outlets in the long term for Commonwealth temperate foodstuffs, full consultation was carried out with all the Commonwealth countries involved over a period of more than two months. I had two meetings with the Canadian Government in Ottawa. We had the visit of the Australian Deputy Prime Minister. We were able to carry out consultation with the New Zealand authorities through the High Commission offices. The Commonwealth countries wish to make their decision when they see the result of the negotiations as a whole. That is the basis on which the negotiations are being carried on.

Sir T. Beamish

Is my right hon. Friend aware that very many of us, no doubt on both sides of the House, attach the greatest possible importance to his suggestion that this country should be more closely concerned with the political discussions which are now going on? Since more than a month has now passed since he first made this suggestion, can he say when he hopes to have a reply from the six member Governments?

Mr. Heath

I think that we must await the next meeting of the members of the Community on political union. They have not yet fixed a date. At that meeting, I think that they will consider the final clauses of the texts on which they have to reach agreement. After that will be the time for discussions with ourselves.

Mr. Gaitskell

On the political issue, I wonder whether the Lord Privy Seal would clear up a certain amount of confusion about the relationship between these two sets of negotiations. Would he not agree that, supposing the Six were to reach some agreement making for further political integration, we would have very much to take this into account, whatever the state of the economic negotiations, before entering the Common Market? Can he throw a little more light on the relationship between these two things?

Furthermore, he will be aware that in the Treaty of Rome many decisions fall to be taken by the Council of Ministers by what is called a qualified majority, in the present case by a majority of 12 out of the 17 votes which are at present allotted. Has the right hon. Gentleman had any discussion so far about what the voting position would be if we were to enter the Common Market? If he has not, when does he think that this vitally important point is likely to be reached?

Finally, can he give us an assurance that it is the view of Her Majesty's Government that the same power of veto which any one of the three major Powers in the Common Market possesses with one smaller Power would continue to apply in the case of Great Britain together with one smaller Power should we enter?

Mr. Heath

To deal with the second point first, we have had no discussion in the negotiations up to this stage on the question of the voting rights and voting powers. For this reason, as the right hon. Gentleman knows, the other countries of E.F.T.A. are carrying on and will be carrying on individual negotiations with the Community, some for full membership—Denmark and Norway, in addition to the application from Eire for full membership—as well as those applying for associate membership. The pattern of voting at the end will depend on which of the other E.F.T.A. countries have full membership with ourselves. It was, therefore, thought best that we should leave this matter until later when we can see more fully the pattern of membership.

As to the relationship between these two sets of negotiations, 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. It would, therefore, be essential for us to consider most carefully what the arrangements of a political nature should be at the same time as we consider the negotiated arrangements in the Treaty of Rome.

Mr. Gaitskell

In that case, is it not of the highest importance, as the hon. and gallant Member for Lewes (Sir T. Beamish) suggested, that if such talks take place we should be in on them at a very early stage, since otherwise all the work that the right hon. Gentleman is doing on the economic side could be completely frustrated by a political agreement made between the Six without our participation?

Secondly, does not the right hon. Gentleman agree that what constitutes a qualified majority is of the highest importance? Has he really had no informal discussions about this? Has he made it plain already, perhaps, to his colleagues in these negotiations that we should insist, broadly speaking, upon the same right of qualified veto, if I may put it that way, as France, Germany and Italy enjoy in the smaller Common Market which exists at present?

Mr. Heath

I agree absolutely with the right hon. Gentleman that it is a vital matter in the negotiations. Of course, we would take the view that the rights of the major Powers should be the same. After all, it was only a week ago that we knew that Norway was to apply for full membership. It is not possible to work out a new voting relationship until one knows exactly how many countries will be full members.

Again, I agree with the right hon. Gentleman on the vital necessity of expressing our views and taking part in discussions on the political arrangements. That was why I specifically made that request in my speech at Western European Union on 10th April. That request was acknowledged by the other Ministers there. The point at which we should take part in the discussions is a matter for arrangement between us and the Six. The Six have taken the view that it was better for them to work out the preliminary stages of this amongst themselves, knowing what our views were from the statements made by my right hon. Friend the Prime Minister in the House from time to time.

I put our views again in my speech on 10th April. I think that in the way in which the political arrangements are working out there are no major differences between the views I expressed on 10th April and the views which are being expressed in the texts at the moment.

Several Hon. Members


Mr. Speaker

Order. We cannot debate this matter without a Question before the House.

Following is the detailed account: Since my last report on the Brussels negotiations on 7th March the Deputies have continued to examine the various problems to which I referred. In particular, work has been concentrated on the problems of United Kingdom agriculture and Commonwealth exports of temperate foodstuffs to this country, and on the problems of the so-called Category 1 countries, India, Pakistan, Ceylon and Hong Kong. At the ministerial meeting at the end of March it was agreed that our Deputies should prepare a comprehensive report covering all the matters under negotiation and setting out the position reached by either side on each of them. As I have already told the House, consideration of this report was the main item on the agenda for the ministerial meeting last week. The present position with regard to the various problems under discussion is briefly as follows.

The general level of the common external tariff There is broad agreement on this, but we have reserved the right to propose a review of the position at the end of our negotiations

Raw materials and semi-manufactures for which we have proposed a zero tariff The Six had put forward no specific suggestions in response to our proposals in this field before the ministerial meeting, and after prolonged discussion it was agreed that our Deputies should examine the items product by product and produce solutions.

Manufactures from Canada, Australia and New Zealand Before the ministerial meeting we put forward proposals under which the application of the common external tariff to this trade would be deferred pending negotiations in G.A.T.T., but that subject to the outcome of these negotiations and subsequent reviews the common external tariff should, with perhaps some exceptions, apply to the whole of this trade by 1970. It was agreed at the ministerial meeting that these proposals should be accepted as a basis for discussion, and that Deputies should report on the further consideration given to them at the ministerial meeting on 29th-30th May.

Category 1 countries (India, Pakistan, Ceylon and Hong Kong) A Working Party which has been studying the trade problems of these countries has so far concentrated mainly on textiles. It was agreed that the Deputies should complete their work on textiles, put forward proposals for dealing with the other items of trade and examine more thoroughly than has so far been possible the problems raised by Hong Kong's trade.

Association and tropical products A Working Party is already examining the problems of trade arrangements and tariffs for the main tropical products, and their report should be available for Ministers at their meeting on 29th-30th May. It was agreed that Deputies should carry further their consideration of other questions related to the association of Commonwealth countries with an enlarged Community.

Commonwealth wealth temperate foodstuffs The proposals we put forward for discussion envisage specific arrangements for the Commonwealth countries concerned for specific periods and agreed machinery for reviewing how these arrangements should be extended thereafter having regard in particular to any international agreements which might be negotiated in the meantime. I emphasised at the ministerial meeting the very great importance we attach to this question and the fact that Commonwealth interests would not be met merely by agreement on transitional arrangements covering a specific period of years. It was agreed that the Deputies should give high priority to this matter with a view to submitting a report in time for consideration on 29th May.

United Kingdom agriculture The two major problems in this field are:

  1. (i) annual reviews and guarantees to farmers in an enlarged Community;
  2. (ii) the length of the transitional period for the United Kingdom.
We have proposed amendments which we think will be necessary to certain of the agricultural regulations if the Community is enlarged by our accession and that of other European countries, and we have put forward views on the commodities for which the Community have not yet approved regulations. I undertook at the ministerial meeting to put forward further proposals as soon as possible on certain other commodities, notably meat and dairy products. All these matters will be further considered by Deputies before the next ministerial meeting and, in particular, a Working Party has been authorised to consider the problems of United Kingdom horticulture.

Economic Union provisions of the Treaty of Rome Throughout the period discussion of these Articles and the regulations made under them continued with the Commission. So far, no serious problem has emerged and these questions were not discussed at the ministerial meeting.