HC Deb 01 June 1965 vol 713 cc1510-7
Q6. Mr. Bruce-Gardyne

asked the Prime Minister what progress he has made with his plans for establishing closer links between the European Free Trade Association and the Common Market.

Q12. Mr. Blaker

asked the Prime Minister if he will make a statement on his visit to the recent Ministerial meeting of the European Free Trade Association in Vienna.

The Prime Minister

At Vienna we reached unanimous agreement in the European Free Trade Association on the desirability of Ministerial meetings to promote closer economic co-operation in Europe. The European Free Trade Association Council will now examine and report to Ministers at Copenhagen in October what procedural arrangements for contacts between the two groups might be considered and what subjects might be suggested for discussion. With permission, I will circulate the text of the Vienna communiqué in the OFFICIAL REPORT.

Mr. Bruce-Gardyne

Is the Prime Minister aware that we welcome his endorsement of the proposal by my right hon. Friend the Member for Barnet (Mr. Maudling) for preferential tariff reduction between E.F.T.A. and the Common Market? I ask the right hon. Gentleman not to allow himself to be deterred from pursuing this idea by any objections from third countries. Will he give priority to rebuilding this country's bridges with E.F.T.A. by removing the import surcharge?

The Prime Minister

If the hon. Gentleman is referring to the initiative of the right hon. Member for Barnet (Mr. Maudling) many years ago, before the Treaty of Rome, I certainly agree with what the hon. Gentleman has said, though the conditions are entirely different now. That broke down, as many on both sides of the House said, because it was conceived as being an attempt to stop the Treaty of Rome from being signed and to stop the Common Market from being formed, whereas this proposal accepts and welcomes the existence of the Common Market and is trying to bring the two sides more closely together. There is this difference. In fact the hon. Gentleman must recognise that from the breakdown of the Common Market negotiations in 1963 right up to last October no initiative whatever had been taken. This initiative, limited though it must be, has been welcomed. We had the full support of our E.F.T.A. colleagues, and I hope, with the hon. Gentleman, that it will lead to constructive results.

Mr. Fell

If the Prime Minister is thinking about some sort of approach to the Common Market countries, will he attempt to get agreement with the Commonwealth Prime Ministers at the forthcoming Commonwealth Prime Ministers' Conference on the sort of approach that should be made?

The Prime Minister

That would really be a change. I am sure that the hon. Gentleman will be glad to hear that I stressed to the E.F.T.A. meeting last week what I am sure most hon. and right hon. Members would have wished me to stress and I made it absolutely plain that we could not envisage any arrangement, whether in direct relations with the Common Market, or through E.F.T.A.E.E.C. arrangements, that would prejudice our ability to go on importing foodstuffs from the Commonwealth.

Mr. Sandys

Is the right hon. Gentleman aware that he is reported to have said in Vienna that if we are not able to build bridges we will dig a tunnel? Could he explain what distinction he makes between those alternatives?

The Prime Minister

I was asked at a Press conference, "What happens if you do not build a bridge?" I said, "We will dig a tunnel." I thought that was a perfectly fair answer which would commend itself to the right hon. Member for Streatham (Mr. Sandys). We all have our different tastes in metaphor. I know that the right hon. Gentleman has. What I was trying to say was that we are going to try and get understandings and agreements between E.F.T.A. and the E.E.C. as a result of the suggested high-level talks between Governments who are members of these two organisations. In addition, remembering that we have these high tariff walls, it will be our purpose as a British Government—and I am sure that it is true about many of our partners—to try and work out direct bilateral arrangements, such as we have worked out with France and other countries at the moment on joint aviation projects.

Mr. A. Henderson

In view of the serious economic consequences which must inevitably flow from widespread economic division between E.F.T.A. and the Common Market, is my right hon. Friend aware that most people warmly support the proposal which he has made as a means towards securing a measure of economic co-operation between the two sides in Europe?

The Prime Minister

It was precisely because of our anxiety about the results, not only for economic affairs but for Europe generally, of this hardening of the two tariff blocs that we took the initiative we did. I was very glad to find that we had the support of all our E.F.T.A. partners in taking this initiative. The danger which many of us foresee if this continues and nothing is done about it is that there will be a sort of further hardening of industrial attitudes and there will be a breaking off of selling arrangements and an artificiality in the siting of factories which may make further reconciliation very much harder when the time comes for a move forward.

Mr. Peter Thomas

Can the Prime Minister answer the question asked by my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) about the import surcharge? The right hon. Gentleman talked about the initiative taken with the full support of our E.F.T.A. partners. Is not it right that the support which we received from our E.F.T.A. partners was, to say the least, lukewarm? Is not it clear that there is little likelihood that they will show any real enthusiasm for such a British initiative while the import surcharge remains in force and that they are still suspicious of British intentions and motives? Has the Prime Minister any more immediate proposals to help to restore the confidence of E.F.T.A. in Britain?

The Prime Minister

I am sorry to disappoint the right hon. and learned Member for Conway (Mr. Peter Thomas).

The support of our E.F.T.A. partners on this question was not lukewarm. It was extremely enthusiastic. There was just a certain amount of doubt on the part of two countries. They did not want a further disappointment, but they felt that in this situation with our plans for strengthening E.F.T.A., unlike the previous negotiations on the Common Market, we would be negotiating from strength—this was a phrase very much used—which the right hon. Gentleman the Member for Bexley (Mr. Heath) was certainly not doing a year or two ago.

With regard to the import surcharges, of course our E.F.T.A. partners want to see these charges come off as quickly as we can take them off, and so do we. We repeat that we shall take them off at the earliest moment that it is safe to do so, but I hope that the right hon. and learned Gentleman, unlike some of his right hon. Friends, will not dissociate himself from the statement of his right hon. Friend the Member for Barnet (Mr. Maudling) on import surcharges as representing his diagnosis and his remedies.

Mr. Heath

Will the Prime Minister correct himself on two points? How can he possibly suggest that he is prepared to negotiate from a position of strength when he has imposed the surcharges and has the additional indebtedness from the International Monetary Fund which he is now carrying? Secondly, to say that there was no initiative taken after the break-up of European negotiations in Brussels is completely wrong. The initiative was taken, first of all, to strengthen E.F.T.A. at the Lisbon Conference which set the course for E.F.T.A. and the final abolition of its tariffs internally. Secondly, there was the recreation of Western European Union in which economic affairs were to be discussed, of which E.F.T.A. was kept fully informed—and E.F.T.A. created its own contacts with Brussels.

The Prime Minister

The reason why I said that in this case we shall be negotiating from strength is that E.F.T.A. has got strong and will get stronger. That was not the case when the right hon. Gentleman was prepared to accept such intolerable terms in his own negotiations. As for the right hon. Gentleman's reference to initiatives after January, 1963, that of course was the work of the W.E.U., but it did not quite cover the whole work of E.F.T.A., as the right hon. Gentleman well knows. It excluded the E.F.T.A. neutrals. The difficulty right through—and it was difficult to get reassurance from the right hon. Gentleman during the talks until the last moment—was that at the time when he negotiated there was no assurance that the position of the E.F.T.A. neutrals would be looked after. Certainly we welcomed any steps taken through Lisbon and elsewhere to strengthen E.F.T.A., but that is not the same as saying that the initiative was taken to bring E.F.T.A. and the E.E.C. closer together.

Several Hon. Members

rose—

Mr. Heath

Is it—

Mr. Speaker

Order. If the House wants to debate the matter some time that is for the House, but in my view we must get on.

Mr. Steele

On a point of order. Does not this situation recall to the House that the Committee on Procedure has made suggestions to the House about Questions and particularly about the number of Front Benchers who speak and rise at Question Time? Has not the Committee referred to this and made recommendations to the House? Could not you use your influence, Mr. Speaker, with the usual channels to have this point debated and have some guidance given?

Mr. Speaker

Whether the House likes to debate arrangements for business is not a matter for me.

Mr. Heath

Further to that point of order. Is not it also correct, following what the hon. Member for Dunbartonshire, West (Mr. Steele) has just said, that if the Prime Minister is going to make such lengthy answers impugning the actions—[Interruption.]

Mr. Speaker

Order. I must be allowed to hear what is being said.

Mr. Heath

—of former Ministers at international negotiations—[Interruption.]

Mr. Speaker

Order. I must be allowed to hear the words which are addressed to me.

Mr. Heath

The hon. Member for Dunbartonshire, West raised a question about Front Benchers being allowed to ask questions. My point is that if the Prime Minister is going to make lengthy answers in which he imputes motives and actions to former Ministers in international negotiations, ought we not to have an opportunity of questioning the right hon. Gentleman about it?

Mr. Speaker

The idea of not having further Front Bench questions is in order that more questions from back benchers may have an answer. As for imputing bad motives to other people, I deprecate any use of Question Time for the purpose, because it occupies time, and even people on the Front Bench tend to answer back. Let us get on.

Mr. Shinwell

Further to that point of order, Mr. Speaker. Some of us have been very patient during Question Time—[HON. MEMBERS: "Oh.]—unduly patient and very tolerant. I wish to make a submission to you on a point of order, as to whether right hon. Gentlemen on the Opposition Front Bench are to be privileged to raise a great number of supplementary questions while hon. and right hon. Members on this side are not so permitted?

Mr. Speaker

I acknowledge the right hon. Gentleman's restraint during Question Time, for which I am grateful. But I do not depart in any circumstances from the idea that it must be left to the Chair to do its best to call supplementary questions rightly.

Following is the communiqué:

"Vienna, May 24, 1965.

E.F.T.A. COUNCIL MINISTERIAL MEETING, VIENNA MAY 24, 1965.

The E.F.T.A. Council met at Ministerial level in Vienna on 24th May 1965. Dr. Fritz Bock, Federal Minister for Trade and Reconstruction was in the chair. Delegations of five member countries were led by their Prime Ministers. Dr. Klaus, the Federal Chancellor, welcomed the delegates.

Ministers examined the situation as it exists today in Europe, after five years of successful development of E.F.T.A. They discussed the likely consequences for Europe of the deepening division resulting from the continued separate evolution of E.F.T.A. and E.E.C. A heavy responsibility rested on the governments to seek to ensure closer cooperation between E.F.T.A. and E.E.C. and to pursue such policies as would promote to the greatest

extent possible the growth of trade, the expansion of their economies and the welfare of all the peoples of Western Europe.

Ministers considered that a hardening of the division could only be arrested by new initiatives. They firmly believed that steps could and should be taken to bring about closer and more continuous contact between the two groups, in order to facilitate the removal of trade barriers and the promotion of closer economic cooperation in Europe, which are the fundamental objectives of E.F.T.A. They agreed that it would be desirable to seek to arrange meetings at Ministerial level between the two groups at the earlier opportunity which offered prospects of a fruitful result.

Ministers therefore decided that the Council should be charged with the task of recommending what procedural arrangements might best facilitate contacts between E.F.T.A. and the E.E.C., and what substantive issues of policy might be the subjects of discussion between them, and that this report should be submitted to the Ministerial Council of E.F.T.A. at its meeting in Copenhagen in October with a view to a meeting between E.F.T.A. and the E.E.C. as soon as possible thereafter.

Ministers then considered a number of substantive ideas for increasing and strengthening cooperation between E.F.T.A. and the E.E.C., and for coordinating where practicable their policies in relation to developments of special economic concern to the two groups. These ideas include possible ways of reducing obstructions to freer trade between the two groups, functional collaboration in fields of research and development and the harmonization throughout Europe of regulations and standards important for the manufacture and movement of goods.

Ministers again stressed the paramount importance they attach to a successful outcome to the Kennedy Round as the principle means for the lowering of barriers to trade, both world wide and in Europe. They confirmed the intention of all the member countries of E.F.T.A. to continue to work towards its success. Furthermore, Ministers stressed their determination to cooperate with the United Nations Conference on Trade and Development.

Ministers reaffirmed their determination to intensify cooperation within E.F.T.A., in order to ensure the prosperity of its own members and to offer the best prospect of achieving a satisfactory basis for closer collaboration between the Association and the European Economic Community. The transitional period of the Association would end in a year and a half. They agreed that member countries should ensure that all necessary action was in train to secure that the Association would function to the fullest advantage of all of them, when the stage of full freedom of trade provided for in the convention was reached. They accordingly instructed the Council at Official level to examine the further progress to be made in E.F.T.A. with this in view and to report to them in time for their next meeting. The report would deal in the first place with the internal arrangements of

E.F.T.A,. including the Economic Development Committee, with due regard to the objectives of the Association as set out in Article 2, and Articles 22 and 27. Secondly the report would cover the external aspect of E.F.T.A. activities, taking into account the arrangements proposed for joint discussions with the E.E.C.

Thirdly the Council were instructed to review the institutional arrangements of E.F.T.A.

Ministers made it clear that a vital step in the consolidation of E.F.T.A. was the elimination of the United Kingdom import charge. They noted the continued strengthening of the balance of payments of the United Kingdom, and welcomed the statement of the British Prime Minister that the surcharge would be removed as soon as possible.

Ministers took note with great regret of the wish expressed by the Secretary General, Mr. Frank Figgures, to leave the Association and return to the British Treasury on 1st November of this year.

They congratulated him on his appointment to an important post and expressed their deep appreciation of the outstanding services which Mr. Figgures has rendered to the Association and the member Governments since he became Secretary General in September 1960.

At the invitation of the Danish Government, the next meeting at Ministerial level will take place in Copenhagen on 28th–29th October, 1965.