§ 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 again intend to publish a more detailed account of the latest developments in the OFFICIAL REPORT.
On 16th May I said that the last ministerial meeting marked the end of the first stage: the way was open for the negotiation of solutions. The House will understand, of course, that any agreement on the solution of individual elements in the negotiations remains subject to overall agreement. The momentum has been maintained both in the meetings of the deputies of Ministers and in the ministerial meeting which ended in Brussels yesterday.
At this meeting agreement was reached on the tariff treatment to be applied to our imports of industrial products from Canada, Australia and New Zealand. As regards these commodities, I said in my opening statement in Paris on 10th October that we recognised that indefinite and unlimited continuation of free entry over the whole of this field might not be regarded as compatible with the development of Common Market.
The solution now worked out provides that the common external tariff will not be applied to these imports in accordance with the normal timetable, but in 1603 three stages: the first stage on accession, the second stage on 1st January, 1967, and the third stage on 1st January, 1970.
The European Economic Community at one time proposed that this delayed application of the tariff should relate only to a limited list of goods, but it is now agreed that all industrial exports are included. It was agreed that 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.
The agreement also provides for consultation between the enlarged European Community and Canada, Australia and New Zealand in 1966 and 1969, after which appropriate steps would be taken in the light of all the circumstances in conformity with the provisions of the Treaty.
Ministers carried a stage further the discussion of the most important and extremely difficult question of the treatment of imports of temperate foodstuffs from the Commonwealth, both during the transitional period and in the long-term. In this connection, I have put forward certain proposals on cereals which will be discussed by Ministers' deputies next week.
The Ministers had a long discussion of the list of products, mostly industrial raw materials, on which we have asked for a nil tariff. In some cases the Community has suggested alternative arrangements to meet the essential needs of ourselves and our suppliers. Deputies have been asked to examine these alternative proposals together with our own with a view to submitting solutions to Ministers at their next meeting.
I have made comprehensive proposals for dealing with the exports of India, Pakistan and Ceylon and emphasised to Ministers the importance of making arrangements to protect the essential export interests of these countries. The Government of India have also circulated a memorandum to the Six Governments. Our proposals, together with the memorandum of the Government of India, will be examined further by the deputies.
Ministers also had before them a report by a Working Party on the prob- 1604 lems of British horticulture. The deputies will examine it in greater detail taking account of individual commodities.
Finally, I made a report on the discussions which have been taking place between our delegation and the Commission on the provisions of the Treaty of Rome concerned with economic union. I was able to tell the Ministers that these discussions have satisfied us that on the most important matters dealt with in these Articles we can accept the Treaty subject to a small number of adjustments on timing and administration.
The next meeting of Ministers will be for four days, 27th to 30th June.
§ Mr. G. Brown
This very important statement will inevitably be very much a part of the debate which we shall have next week.
Is the Lord Privy Seal aware that parts of the statement seem so involved as to be almost meaningless? For example, there is the reference to the consultations which will take place between the enlarged European Community, as he called it, and Australia, Canada and New Zealand, in 1966 and 1969, leading to appropriate steps "in the light of all the circumstances and in conformity with the provisions of the Treaty." That hardly seems to have a real meaning at all. Perhaps the right hon. Gentleman will develop exactly what is envisaged there.
In spite of what the right hon. Gentleman has said, is it still understood that all the arrangements we are coming to with the Community will be subject to the general approval of the Commonwealth Prime Ministers' conference before any final decisions are taken?
§ Mr. Heath
Yes, Sir. I tried to make plain, in the first part of my statement, that as we are dealing with a number of different sectors in these negotiations we work out solutions which come to fruition at different times, and we hope to find agreement on each of them. At the last Ministerial meeting we found agreement on this particular sector concerned with Commonwealth industrial products. This will form part of the outline of a settlement generally agreed among the seven Governments which we shall try to obtain before the end 1605 of July so that it can be placed before the Commonwealth Prime Ministers' Conference in September.
All the undertakings that we have given to the House and the Resolution of last August remain—that no agreement can be signed until it has been debated by this House in accordance with the terms of the Resolution. I think that that position is absolutely plain.
The right hon. Gentleman mentioned the approval of the Commonwealth. It has always been clearly stated that the Commonwealth countries themselves fully recognise, and this has been repeatedly stated, that the final decision must rest with the United Kingdom Government.
On the particular point that the right hon. Gentleman mentioned, each of these sentences in the statement means a very great deal. Full consultation between the three Commonwealth countries and the enlarged European Economic Community in both 1966 and 1969, in each case before the stage of the application of part of the common tariff, is of the greatest importance for these three Commonwealth countries.
On the last point, about appropriate action, I cannot be more specific about the type of action to be taken for the simple reason that it is impossible for anyone now to foresee what the circumstances of 1970 will be, nor what action will be appropriate in 1970.
§ Mr. Brown
While wholly understanding that the final decision rests with the United Kingdom, may I press the right hon. Gentleman again that, before a final decision is taken, we shall be told whether or not the agreement which we propose to accept has received the general approval of the Prime Ministers of the Commonwealth? The right hon. Gentleman must be quite clearly aware that if it did not receive the general approval of the Commonwealth Prime Ministers, that would very gravely affect the attitude of this House towards it.
§ Mr. Heath
The Commonwealth Prime Ministers will be able to express their own views fully at the Commonwealth Prime Ministers' Conference, publicly in this country and in their own Parliaments and countries. There will 1606 be absolutely no doubt about that at all. The House will be fully aware of their views when it comes to making the decision.
§ Mr. Turton
Is my right hon. Friend aware that the decision to abandon the Commonwealth preference is a matter affecting the bilateral agreements between ourselves and our Commonwealth partners? Before that decision was made, were our Commonwealth partners consulted? Did we obtain their approval for us to end these agreements at the date stated in the agreements?
§ Mr. Heath
This is not the abandonment of Commonwealth preferences. [HON. MEMBERS: "Oh."] It is a solution dealing with a particular part of these negotiations, and it is not the solution which is applicable to other parts of Commonwealth trade, necessarily, nor is it being worked out in these other sectors. It applies to this particular sector.
From the point of view of consultations with the Commonwealth, the proposals which eventually led to this solution were first put to the three Commonwealth countries several months ago. I discussed them myself with Canada when I was there on a visit to Ottawa, and they have been fully discussed with other Commonwealth countries.
I am not in a position to state what is the detailed attitude of each country towards these proposals. We have always put the proposals to them at each stage, and we have received their comments on them. We have made changes where we thought it was right so to do, and that is our responsibility. [Interruption.] Perhaps the right hon. Gentleman the Member for Battersea, North (Mr. Jay) can be quiet at least for a few minutes and listen to what is being said.
When it came to the last stage of these negotiations, the Commonwealth was informed, immediately before I took part in the discussions in Brussels, about the room in which I was prepared to negotiate. The negotiations finished at 6.35 p.m. on Tuesday, and I met the Ambassadors of the three Commonwealth countries at 7 p.m., when I gave them a full account of these negotiations, and exactly what the solution 1607 was that we had arrived at. There has been the fullest consultation with the three Commonwealth countries on this sector, as, indeed, on every other.
§ Mr. Healey
Is it not the case that the agreement which the right hon. Gentleman has reached this week involves not only the abolition of Commonwealth Preference on all manufactured goods from all white countries of the Commonwealth, hut also the substitution of a European preference against the Commonwealth countries by 1970? Can the right hon. Gentleman assure the House that this surrender of Commonwealth preference will not be treated as a precedent for the treatment of other Commonwealth interests, and that, on the contrary, this agreement will depend upon the Common Market countries agreeing to what the right hon. Gentleman called "comparable outlets in an enlarged Common Market", for all the agricultural products of the Commonwealth countries, and cheap manufactures from Asia?
May I also ask the right hon. Gentleman to deny reports published widely in the British Press today that Her Majesty's Government have made a proposal for the treatment of cheap manufactures from Asia which does not allow for an increase in the imports of Asian manufactures to Europe as a whole over the future years, in view of the fact that an increase in Asian exports to Europe is a pre-condition for the success of the development plans in all the Asian countries of the Commonwealth?
§ Mr. Heath
I have told the House repeatedly that each of the different sectors I have described to the House— the temperate foodstuffs, the products of Asian countries, the tropical products of our African and West Indian members of the Commonwealth, and so on— has to have a separate solution to be put forward for them, and I have described the nature of these solutions on each occasion. None of them is of the same type as those I have described this afternoon, because each group is separate and requires a separate method of treatment.
So far as the Asian countries are concerned— India, Pakistan and Ceylon, which are the three Asian countries— I have told the members of the Six of the 1608 importance of this trade to these Asian countries, and that a rate of growth is required to be allowed for. As I have already told the House, the Ministers have accepted the balancing principle that damage should not be caused to the exports of these countries, and that if damage is later seen to be caused remedial action should be taken.
§ Mr. D. Walker-Smith
Although my right hon. Friend has said, in answer to my right hon. Friend the Member for Thirsk and Malton (Mr. Turton), that the agreement in respect of manufactured goods does not represent the abandonment of Commonwealth preference, is it not obviously a very serious invasion of that principle? Is it not equally obvious that the Community will be encouraged to apply the same principle in regard to other products in general, and to temperate foodstuffs in particular? Will he therefore, for the avoidance of doubt hereafter, affirm the intention of Her Majesty's Government not to regard as satisfactory any conditions of entry which involve, wholly or substantially, the abrogation of Commonwealth preference?
§ Mr. Heath
There are bound to be changes in Commonwealth preferences, because we have to reconcile the Commonwealth trading position with the Customs Union which forms the Common Market. Therefore, there are bound to be changes. The simple fact, as my right hon. and learned Friend knows full well, is that Commonwealth preferences have been changing a great deal over the last few years. They changed a few months ago as a result of an agreement between the United States and the Economic Community, which was translated, through the "most-favoured-nation" treatment, to Canada, and, therefore, our own Commonwealth preferences were affected.
These matters are changing the whole time, and will have to be taken into account in the other solutions which we are trying to reach in the other sectors which I have already described to the House.
§ Mr. Wade
The Lord Privy Seal has stated that he is dealing only with a particular sector. Has he any progress to report on the political implications of accepting the Treaty of Rome? When he uses these important words, "We can 1609 accept the Treaty subject to a small number of adjustments of timing and administration", is he referring to the provisions of the Treaty concerned with economic unity, or to the Treaty as a whole?
§ Mr. Heath
I was referring to the Treaty as a whole, because a very large part of it concerns economic union provisions and the remainder deals with the common tariff and the common agricultural policy. The political discussions to which the hon. Member refers are not taking place in Brussels and are not part of the negotiations on the Treaty of Rome. There have been no further developments in that sphere since the meeting of the Ministers of the six Governments of 17th April.
§ Mr. Biggs-Davison
Is the Lord Privy Seal aware that to me his statement is particularly disturbing, because he told me from that Treasury Bench that these industrial imports from the Commonwealth countries were not expendable? Have I got it wrong? Has the Lord Privy Seal made the offer to bring to an end over a term of years preferences for Canada, Australia and New Zealand in this sector without having a firm assurance from the European Economic Community that comparable opportunities will be found for those industrial exports in Europe?
§ Mr. Heath
We have put forward our solutions for dealing with temperate foodstuffs and these concern a very great part of Commonwealth trade. All these solutions will have to be considered in the final outline together. They must all be taken together, and weighed up together to see whether they provide a satisfactory solution to the problems which would be involved in our membership of the European Economic Community.
Many people in the Commonwealth countries will regard a period of transition of this length for a change-over from the present system to what is involved in the future as giving a considerable number of years in which changes can take place. They are being carried through in three stages over this period up to 1970. This does not mean that these industrial goods are expendable. A very careful analysis has been made of the prospects of these goods item by 1610 item in trading arrangements. The importance of the sentence in my statement about negotiations is the undertaking of the Community, which they have expressed previously in a more general form, about taking part in negotiations which are coming to be known as the Kennedy Round, if the President is able to carry his legislation through Congress. Those negotiations, covering the industrial products of the Western free world, would be of the greatest importance for the economies of all Atlantic countries.
§ Mr. Bellenger
I should like to ask the Lord Privy Seal a general question as to the method of debating these matters. He has told the House that he has already settled, in part, problems which will have to be discussed at some time in debate. Next week we have two days to debate— I do not know what; probably the general issues. But, obviously, what the right hon. Gentleman has said this afternoon is bound to come prominently into the picture.
My question to him is, therefore, this: would it not be better for the House to have a complete picture, because we have to weigh against one item of concessions perhaps another of item of advantage to this country? Does he intend not to give the House a complete statement on the negotiations before the House rises for the Summer Recess, but, instead, to leave it until he and his right hon. Friends have consulted the Commonwealth Prime Ministers and then, late in the autumn, to discuss the whole question whether we go into the Common Market, with the various pros and cons?
§ Mr. Heath
During the debate next week I will do my utmost to give the House the fullest information I can about the stage which we have reached in the negotiations over the whole front, commensurate with the fact that in those places where we have not yet reached solutions there is a great deal of confidential information between the two sides and between ourselves and the Commonwealth Governments which I am not at liberty to divulge to the House. The question of future debates is one for the Leader of the House and the Leader of the Opposition to arrange, and it will obviously depend upon the timing of when we are able to reach solutions, if we are, over the whole front, so that the 1611 whole House can see the whole picture, as and when it is in a position to have a debate.
§ Several Hon. Members rose——
§ Mr. Speaker
Order. It is clear that we cannot debate this matter without a Question before the House.
§ Mr. Stonehouse
On a point of order. May I draw your attention, Mr. Speaker, to the fact that, apart from questions by Privy Councillors on this side of the House, not a single back bench Member on this side has been called to ask a Question? In view of the importance of the subject, may I ask whether a question may be put?
§ Mr. Speaker
I am of the opinion that it may not. It is no kind of snobbery on the part of the Chair which has resulted in this happening. I think that I worked round the parties.
§ Mr. Speaker
I am on my feet.
Clearly, we cannot debate a great, wide subject like this wholly irregularly and without a Question before the House. The House charges me with the admittedly difficult responsibility of deciding when we ought to stop this kind of irregularity.
§ Sir M. Lindsay
On a point of order. I know that it is difficult, Mr. Speaker, but all the questions from this side of the House have been from persistent anti-Common Market questioners who do not represent this country at all. [HON. MEMBERS: "Oh".] I should have said that they do not represent the majority point of view in the country. Would it not be possible to have a few questions, for example, from my hon. Friend the Member for Somerset, North (Mr. Leather), or others who take a different point of view?
§ Mr. Speaker
Hon. Members do not wear for my benefit little flags or badges indicating precisely what their views are, nor, indeed, are questions necessarily the right method for asserting views but rather for a further extracting of information or requiring action. I ask the House to take a sensible view. We ought to get on now.
§ Mr. Stonehouse
Further to that point of order. In view of the fact that reference has been made to the opinions of hon. Members opposite, could it not be pointed out that the majority of back bench Members on this side of the House regard the Lord Privy Seal's statement as a monstrous thing?
§ Following is the detailed account:
§ REPORT OF PROGRESS OF BRUSSELS NEGOTIATIONS
§ Since my last report on the Brussels negotiations on 17th May, meetings of the Ministers' deputies and of working parties have continued. On 29th and 30th May there were meetings of Ministers at which we reviewed the progress made during the past fortnight and continued the process of seeking to negotiate solutions.
§ The present position with regard to the various problems under discussion is as follows:
§ Raw Materials and Semi-Manufactures for which we have proposed a zero tariff
§ This subject has been discussed in some detail by the deputies and we had a further useful examination of the problems involved at our Ministerial meeting on 29th May. We still consider, and have re-emphasised, that the most appropriate solution for each of the products on our list would be the reduction of the common tariff to nil. The Six find particular difficulty in meeting us on some products, but are not yet ready to put forward any alternative proposal. On some other products they have put forward proposals which are to be discussed by the deputies.
§ Industrial Products from Canada, Australia and New Zealand
§ Ministers agreed on the following arrangements:
§ (1) The United Kingdom would take the first step (30 per cent.) towards the application of the common customs tariff to imports of these products on the date of its accession to the Community. The United Kingdom would take a second step (30 per cent.) towards applying the common customs tariff on 1st January, 1967. The United Kingdom would apply the full common customs tariff to all the products concerned on 1st January, 1970.
§ (2) Note would be taken of the readiness of the Community to take part in multilateral negotiations aimed at reducing, on a reciprocal basis, customs duties on industrial products.
§ (3) The enlarged Community would be prepared to examine, in 1966 and 1969, in consultation with Canada, Australia and New Zealand, the development of its trade with these countries, after which it would take appropriate steps in the light of all the circumstances, and in conformity watt the provisions of the Treaty.1613
§ India, Pakistan and Ceylon Exports
§ I made comprehensive proposals dealing with the exports of India, Pakistan and Ceylon and emphasised to Ministers the importance of making arrangements adequate to protect the essential export interests of these countries. Ministers asked deputies to examine these problems further, taking into account our own proposals and a memorandum communicated to the Governments of the Six by the Government of India. The deputies have been asked to propose solutions for consideration at the next meeting of Ministers.
§ Association and Tropical Products
§ Deputies will revert to these subjects at their June meetings. Meanwhile, we have put for. ward precise proposals regarding the tariff treatment of the various tropical products. The Six have not yet put forward proposals of their own or commented on ours, but hope to do so shortly. Meanwhile, a Working Party has submitted a report analysing the trade in a number of these products and the problems which arise and is continuing to work on further products.
§ Commonwealth Temperate Foodstuffs
§ Since the last ministerial meeting deputies have been considering our proposals for safeguarding essential Commonwealth interests in this field. We had a further discussion at the ministerial meeting and the Six emphasised their view that the arrangements made would need to be consistent with the Treaty and the common agricultural and common commercial policies. The deputies will resume their examination of this subject next week, and will consider the proposals which I have submitted for arrangements for imports of cereals from Commonwealth countries.
§ During the period under review a Working Party has been examining the problems of British horticulture and has prepared an interim report which the deputies discussed and submitted to Ministers. The report set out our view of the problems and how we thought they might be handled, together with the views of the Six. We agreed that the deputies should examine the problems in greater detail, taking account of individual commodities, and should suggest possible solutions.
§ Economic Union
§ I made a report on the discussions which have been taking place between our delegation and the Commission on the provisions of the Treaty of Rome concerned with economic union. I was able to tell the Ministers that these discussions have satisfied us that on the most important matters dealt with in these Articles we can accept the Treaty, subject to a small number of adjustments on timing and administration.