EUROPEAN FREE TRADE ASSOCIATION (Hansard, 26 November 1964)

§ Q8. Sir R. Nugent
asked the Prime Minister if he is aware that the confidence of Great Britain's European Free Trade Association partners has been lost; and what steps he is taking to restore it.

§ The Prime Minister
We are very conscious of the disappointment and anxiety of our European Free Trade Association partners over the measures we had to take to restore the balance of payments. There was a full discussion in the meeting of the European Free Trade Association Ministerial Council at Geneva last week. We told our European Free Trade Association partners that the charges were temporary and that they would be reduced as soon as the balance of payments situation permitted and abolished at the earliest opportunity. We also told them that, although no precise date could be fixed, we intended to begin this process in a matter of months.

§ Sir R. Nugent
Yes, but, while I welcome the steps that the Prime Minister has taken, may I ask whether he is aware that he gave the impression to our friends in Europe that he put Socialist domestic policies before the keeping of British international obligations, and that the best way to restore confidence is to reverse the order and give top priority to British interests and second to his own party interests?

§ The Prime Minister
I find some difficulty in following the right hon. Gentleman's argument, because the surcharges, to which we are referring—they were the subject of discussion—were introduced about eight days after the Government were formed, and we had the authority, I thought, of the late Chancellor of the Exchequer who said that it was his diagnosis and his remedies. I was not aware that he was doing this with a view to the promotion of Socialism. He may have been, but he never told us.

§ Mr. Grimond
In view of the events of the last week or so, does the Prime Minister intend to raise with our colleagues both in E.F.T.A. and outside the general provisions for meeting a situation of this kind? It appears that quotas, for instance, in these events, would have been 1470 quite legal, but not a surcharge. Is the right hon. Gentleman satisfied that the machinery exists to support sterling as an international currency, with all the strains that that entails, or does he not think it is time that he looked again at the various agreements that we are party to to see whether there is not some better way to meet that sort of eventuality?

§ The Prime Minister
I thought that there was widespread agreement in all parts of the House when we debated these economic matters on the Address in reply to the Gracious Speech that there was something a little out of date about both E.F.T.A. and G.A.T.T. in that quotas were permitted virtually without question but tariff charges of this kind were not. I think that the right hon. Member for Barnet (Mr. Maudling) said this clearly, as we did from this side of the House. Certainly, I am sure that when opportunity occurs there would be a general desire to reopen the question within the operation of both G.A.T.T. and the E.F.T.A. agreement. With regard to the question of world liquidity, I said on Monday that this was obviously one of the urgent questions which should be considered, both in the talks in the United States and more widely.

§ Mr. Kershaw
Can the Prime Minister now confirm that he and the President of the Board of Trade have had time to read the Treaty of Stockholm? Will he consider issuing a list of those treaties which he intends in future to honour and those which he regards as scraps of paper?

§ The Prime Minister
What I notice is the great helpfulness of right hon. and hon. Gentlemen opposite at this and all other times, but again I remind hon. Members that, even after Suez, which was a very controversial issue, the then Opposition rallied round on the measures for the support of sterling without question. Any hon. Member who chooses to doubt that can look up HANSARD for 4th December, 1956, c. 1057.

§ Mr. Iain Macleod
Is the right hon. Gentleman aware that anyone looking up column 1056 will find the statement of the Prime Minister, and that the only measure introduced at that time was the 1s. on the price of petrol? That was debated a week later when the then 1471 Opposition, with the final speech made by the present Prime Minister, voted against it.

§ The Prime Minister
I am well aware of what I said on that occasion and in relation to the increased cost of petrol. In the same sentence I said—I thought that it was column 1058, but I will accept the correction of the right hon. Gentleman—that, as the then Government were introducing fuel rationing, it hardly seemed necessary to introduce rationing by the purse at the same time. I should be glad if the right hon. Gentleman would quote the reference which I made as well when I referred to all the measures being taken to mobilise international support for the £.