EUROPE

HC Deb 16 November 1966 vol 736 cc446-569

Mr. Speaker

Before I call the first speaker, may I say that 80 hon. and right hon. Members have so far indicated that they wish to speak in this debate. It will help other Members if those who are called will be reasonably brief. It is important that in such a debate as many Members should speak as is possible.

3.43 p.m.

The Secretary of State for Foreign Affairs (Mr. George Brown)

I take note of what you have said, Mr. Speaker, and hope that I will not transgress. Inevitably, in the circumstances I wish to make a considered and detailed statement of the Government's position.

May I begin by saying that there has never been a time in the troubled history of our Continent when Britain has not been called upon to play a decisive and costly part in its affairs. But far too often these situations have arisen because Britain has not been sufficiently involved to affect the events which led up to them.

The issue today is not do we join Europe—we have always been there. The issue is can we play such a rôle that from here on the Continent shall be unified and we shall be effectively a leader of it? Let us also recognise the increased prosperity and influence in the world which unity would bring to Europe. It is right that we should conduct this debate in an examining and even critical mood. It is equally important that that should not generate an air of cynicism, gloom or defeatism, which could smother the constructive idealism which we all basically feel.

All three parties in the House are committed to the achievement of a greater unity in Europe. At the last General Election the Labour Party said that Britain, … in consultation with her E.F.T.A. partners, should be ready to enter the European Economic Community, provided that essential British and Commonwealth interests are safeguarded. The Gracious Speech reaffirmed this, together with the Government's desire to promote the economic unity of Europe. We have since then maintained a steady and continuous course. We have discussed the problems involved not only with members of the Six, but also with our colleagues in E.F.T.A.

I took advantage of the occasion of the Socialist International Congress, in Stockholm, to set out as fully as I could the considerations which were in our mind. We have assessed the information we collected; we have weighed the evidence. The statement which the Prime Minister made to the House last Thursday was the logical outcome of all this. I will try, if the House will allow me, to compress the necessarily long and complicated arguments into as short an exposition as possible.

Inevitably, in doing so, some issues will be left out or treated less fully than some hon. Members would wish. But we have a two-day debate ahead of us, and my right hon. Friends who will be following me in the debate will take up these points.

Speaking in economic terms, one thing is common to us all. If the prosperity of the country is to be assured, and British industry is to plan for the expansion that is fundamental to this, we must have a large market outside of these shores, a market to which we have immediate and unrestricted access. We are a country of about 54 million people. Our membership of E.F.T.A. almost doubles the size of that, to nearly 100 million. But an expanded Common Market, which would include not only ourselves and our E.F.T.A. colleagues and the Irish Republic, but also those countries who are now members of the E.E.C., would be a market of about 280 million.

That potential market is very prosperous. It has a gross national product of £125,000 million. With this assured base, industry within the Community, including British industry, could compete upon approximately equal terms with the giants of the United States and the Soviet Union. This would open up opportunities for investment in many directions.

Great Britain would bring more to the E.E.C. than just an additional market of 54 million people, important as that is. The industrial and technological competence that we possess would go a long way to redress the imbalance at present existing between Europe and America. We would bring to the Community a large sector of industry which, with tariff problems removed, would be a base strength against its international competitors. We would bring an outstandingly efficient agriculture and, perhaps more than anything, Great Britain would bring her world standing and her position at the centre of the Commonwealth.

We are far from being suitors. The proposal to enlarge the Common Market is as much in the interests of the Six as it is in our interests. We do not pursue this policy just for our own economic interests or for the economic benefits that we could bring to the E.E.C. From an enlarged Community great political benefits would also flow. An enlarged Community, which included Great Britain and others at present outside, could contribute an enormously increased influence to the wider problems affecting our Continent, in the Atlantic Alliance and in the world at large.

We could clearly play a much greater rôle from within the Community, in influencing these affairs than we can play from outside. There are other ways in which we could organise the future of Great Britain. We could look to some, as yet, unformulated Atlantic grouping, or we could "go it alone". These are the possibilities. If we do not succeed in our present purpose, we shall have to choose. Let us be clear about one thing. In my view, neither choice would carry with it the benefits which would flow from our accession, on acceptable terms, to the Community.

Clearly, no one way carries with it all the advantages. But we must bear in mind that, whether we do or do not join the Common Market, our present problems still have to be solved. Whatever way we ultimately go, British industry cannot escape the vast job or reorganising and modernising itself to compete and succeed in the modern world. Our trade unions, in any case, cannot avoid facing up to the great overhaul of our traditional approach to working practices so that our labour force can be sensibly redeployed and fully used. In choosing our future course, we are bound to do it on a considered assessment of the balance of advantages.

The Prime Minister's announcement last Thursday means that the Government believe that if we can get the answers to some admittedly fundamental problems—and we believe that with good will we can—then the balance of advantages clearly lies in going into an enlarged European Community. This is, of course, a decision of great consequence. We now move towards our objective with determination and with gathering momentum.

The reactions to my right hon. Friend's statement, both at home and abroad, have been most encouraging. At home, leaders of industry—both the T.U.C. and the C.B.I.—have shown clearly that they support us. The opinion polls, for what they are worth, confirm my own judgment that the majority of the people of the country are in favour.

Mrs. Renée Short (Wolverhampton, North-East)

No, they are not.

Mr. Brown

The exception generally proves the rule.

Opinion as reflected in the newspapers is also clearly behind us. Abroad, our seriousness of purpose and our determination have been understood and welcomed. Many of the Governments of the Six have already expressed their support for our action. Perhaps I may quote the words of one of them, Signor Fanfani, the Italian Foreign Minister, who said: The decision clearly does not solve the problem but it sets in train procedures which can solve it. Italy will collaborate fully in this so as to arrive at a positive conclusion. These are realistic and constructive words which we welcome.

I should like to enlarge a little on the plan of campaign which my right hon. Friend outlined in his statement last week. The first step, as he told the House, will be the meeting of E.F.T.A. Heads of Government in London, on 5th December. It is important that this should be the first step, because we have been friends together through many difficulties and have achieved very great success together. It is necessary that we concert our actions from here on as we have done in the past.

I am happy to be able to tell the House that the proposal for this meeting has been widely welcomed in the E.F.T.A. countries. Most Heads of Government will, in fact, be present in person. The few who cannot will be represented by their senior colleagues.

The member countries of E.F.T.A. had two main objectives when the organisation was set up in 1960. The first was to establish free trade in industrial goods throughout a wide area of Europe. This object is now nearly fulfilled. But the second objective, which was no less important, was, as the preamble to the Stockholm Convention testified, to work towards the creation of a wider European market. This will be the position which the Heads of Government of E.F.T.A. countries will be discussing when they meet next month.

We have undertaken to proceed in our policy towards the European Economic Community in the closest consultation with our E.F.T.A. partners. That is our determination. Even if we had made no commitment of this kind, there would be the best of reasons for proceeding in consultation with them. All our partners in the Association are European countries who themselves are potential members or associate members of the Community. This is very important for us and for our consideration of the situation which would arise were we to join.

For our part, therefore, we would certainly expect that arrangements should be made to permit those members of E.F.T.A. who wish to join or wish to become associated with the Community to be able to do so. The conference to which I have referred is an earnest of our intention to consult and confer with our partners in E.F.T.A. We shall be discussing the next moves with them. We shall be exchanging ideas about the question of relations with the E.E.C. and we shall be examining together the problems and our common interests in any approach to the Community which may become possible after the next stage in the process of exploring our Community position. Following that meeting, we shall embark on the next step.

As the House knows, the Prime Minister and I propose to visit each of the capitals of the Six for discussions with the Heads of Government of those countries. I have been asked why should we do it at this level. The answer clearly is that some of the questions involved can be dealt with only at that level. On the timing of this, we have, of course, to consult not only our own convenience but also that of the other countries and we must arrange mutually acceptable dates. But I hope that the first of these visits will take place very soon after the E.F.T.A. conference and that all will have been completed in a very few months.

Mr. R. H. Turton (Thirsk and Malton)rose—

Mr. Brown

I will give way, but this is the beginning of a two-day debate. The more I give way, the longer my speech takes. There will be many opportunities to raise points and for them to be answered.

Mr. Turton

The right hon. Gentleman says that the E.F.T.A. Heads of Government will be consulted. When will the Commonwealth Prime Ministers be consulted?

Mr. Brown

The right hon. Gentleman will find that I shall come to that in a moment, but I will give him the answer now. They are being consulted simultaneously. They will be consulted.

During the last few months my right hon. Friends the First Secretary and the Chancellor of the Duchy and myself have been probing and carrying out exporatory talks with the Six and with our E.F.T.A. colleagues. This probing and the studies in depth which the Government have carried out have encouraged us to believe that fuller discussions can now take place. So the Prime Minister and I will explore more precisely and with greater authority the positions of other countries and set out our own position and thereby establish whether the essential British and Commonwealth interests can be safeguarded in an acceptable manner.

The House would not expect me to give away our negotiating position at this stage by listing all our problems here, much less by stating how I think they can be overcome. But I should like to indicate the broad areas of policy which seem to me likely to present the greatest difficulty, although there will certainly be other problems which will have to be dealt with in any negotiations which ultimately take place.

First, there is the whole complex of problems which would arise from the present common agricultural policy of the Community, particularly at the level of prices currently established by the Six. It might well be that British agriculture as a whole would be prosperous in these conditions. But, while some producers would be better off, others certainly would be worse off. Coming from a constituency in Derbyshire, I am very well aware of this. There would be significant distortions in the present pattern of food production in the United Kingdom.

Then there is the effect on our cost of living. Consumers would be paying, as things now stand, not only the higher prices for home grown food necessary to yield the appropriate return to our farmers but also for bringing the cost of imported food up to the higher levels required to protect the internal Community market. There would, of course, on the other hand, be a saving to the Exchequer resulting from the abolition of deficiency payments.

But more important still perhaps is the effect on our balance of payments arising in part from the higher cost of imported foodstuffs, in part from the levies which we should have to pay and in part from any additional costs of financing the Community's agricultural fund. No one can, or should, pretend that this is not a very serious problem for us. Those who would be our partners in the Community must recognise that this is so.

There is also the serious effect which the present Community policy, if applied without change, would have on our trading relations with the Commonwealth. The combined effect of preferences in our market for Community producers and of increased home production in some sectors induced by the Community's higher prices would react adversely on our traditional suppliers. Among these, New Zealand, whose economy is in some ways an extension of our own, would be particularly hard hit and, therefore, some special arrangement clearly will have to be made for her.

Other problems connected with the Commonwealth have, perhaps, become rather less than they were. During the negotiations which were conducted by the previous Administration it became clear that comprehensive trade agreements could be made with countries in Asia and that association would be available to countries in Africa and the Caribbean. In the light of this, as the House knows, Nigeria has already concluded a limited form of association with the Community and some other Commonwealth countries are in the process of negotiations.

We are—and this was the point raised by the right hon. Member for Thirsk and Malton (Mr. Turton)—in close touch with our Commonwealth partners now and shall continue to keep in touch with them during the progress of the exploratory discussions. We will consult them at all stages of any negotiations.

There will also be questions connected with the management of our own economy. We have much in common with the Community both in the objectives of economic policy and in the methods used. As an example of what I have in mind, the Community requirement to permit unrestricted direct and portfolio investment might, if applied in full and immediately on entry, produce for a time an undue adverse effect upon the flow of capital. This must be taken care of.

We attach, also, great importance to being able to maintain our present regional policies and what we are doing to relocate industry. I feel confident that we could sustain these policies since similar policies are pursued in varying degrees by the present members of the Community and with the collective approval of the Community.

These are indications of the sort of questions which the Prime Minister and I shall be discussing further in our talks with the Six. I repeat that the list is not exhaustive. I do not propose to say here how we might expect them to be overcome. Some of them might be dealt with by transitional arrangements and others in other ways, but, as my right hon. Friend the Prime Minister said in his reply to the right hon. Member for Orkney and Shetland (Mr. Grimond) when he made his announcement the other day, we do not believe that the Treaty of Rome need be an obstacle in itself. The Government would be prepared to accept the Treaty if our problems can be dealt with satisfactorily, whether through adaptations of the arrangements made under the Treaty or in any other acceptable manner.

The Prime Minister and I will be taking the opportunity of these talks to re-emphasise the importance which we attach to a successful outcome to the Kennedy Round and we shall be stressing the importance of a forthcoming attitude to the negotiations on the part of the Community.

I recognise that there are doubts, sincerely held and sincerely expressed, about the policy which the Prime Minister outlined to the House on Thursday of last week. They are felt, I know, by some hon. Members on both sides of the House. They will be felt in some sections of opinion in the country. They will exist in the minds of some outside this country. It is, however, important to recognise that the doubts and the bases for those doubts differ and in many cases cancel each other out.

Some ask whether there is not still a French veto and, if so, how we propose to get round it. I do not regard this as the right approach. I do not pretend that we see eye to eye with the French Government on all points of our European, Atlantic or defence policies. Nobody, least of all myself, would seek to deny the indispensability of France to Europe, now or in the future. It is equally clear, however, and not only to us, that Britain is, and always has been, indispensable to Europe. Therefore, we must not enter upon our discussions on the assumption that France would want to be an obstacle to the establishment of a wider and more influential Europe.

Then there are some, including the Leader of the Opposition, who take the view that the talks should be widened to include defence arrangements. There are others, including my right hon. Friend the Member for Easington (Mr. Shinwell), who are concerned lest the arrangements that we are hoping to make may involve us in additional defence commitments, in commitments to particular lines of foreign policy, and the creation of a supranational Government and Parliament which would control the destinies of Britain and take over many of the functions of this House.

Those doubts reflect, on the one hand, a fear that we are about to do too little and, on the other hand, that we are going to do too much. As so often is the case when this situation arises, I believe that the Government can claim that we are getting it just about right.

Perhaps I may remind the House that what the talks will be about, and what any eventual negotiations would be about, is membership of the European Economic Community on the basis of the Treaty of Rome. That treaty does not involve the establishment of any supranational authority dealing with matters of defence and foreign policy.

Of course, I recognise that there are those, including some of the most distinguished European statesmen who played an outstanding rôle in bringing this concept to fruition, who believe that greater federalism and great central power are desirable and even essential in such a European organisation. Equally dedicated to the ideal, however, are those who believe that less centralism is the desirable objective.

We must at least clearly recognise that the existing Community has not developed in the way that the former would have wished. The argument remains to be resolved. While it is far from our intention, and certainly would not serve our interest, to play politics as between members of the Six, it is, of course, true that the sooner we become members of the Community the more we will be able legitimately to influence the outcome of these discussions.

It is sometimes suggested that if Britain is to join the European Economic Community we must change our relationship with the United States, particularly in defence, and abandon the rôle which we play in the outside world. To this, the Government are resolutely opposed. [Interruption.] Those who believe that if we state our position other people will not negotiate with us are taking up a wholly indefensible stand.

We believe that just as the defence of Europe requires the commitment of the United States, so the establishment of peace in the wider world involves the closest ties between Europe and the United States.

Then there are those who feel that our economic difficulties rule out any satisfactory progress on the question of our relations with the Community. The Government's position has always been that we regard membership of the Community as offering no easy relief of our difficulties. We have always said that, and I said it in Stockholm in May of this year and repeated it often since. Restoration of economic health in Britain is a task for the British Government and the British people. And no one anywhere now denies that we are clearly on the road to that achievement.

We are determined, as the Prime Minister told the House on 10th November, that we should enter the Community only when we have secured a healthy economy and a strong balance of payments with the £ standing no less firm and high than it is today. It is, I submit, clearly sensible to proceed with these talks about possible membership of the Community at the same time as we are gathering the necessary economic strength. The whole interests of Britain require that achievement of strength and the opportunity to join shall arrive together. This is why we are conducting the two operations simultaneously.

Always on these occasions, when we discuss this question, we tend to concentrate on the difficulties, the problems, the doubts associated with taking the great and decisive step of joining the Community. All too often, I fear, we leave out of account the difficulties, the problems and the doubts, which, equally, would be associated with a decision to stay out. I ask the House to recognise that these, too, are great, and could not be met without possibly even greater changes in our present way of life being accepted by our people.

But let me return to the theme with which I began. There are great opportunities to be seized, if we can make a success of this enterprise, great opportunities for the future of this country and great opportunities elsewhere, and equally grave problems elsewhere if we fail. Western Europe is now divided: there is E.F.T.A. and there is the E.E.C. Both groupings are dynamic; both exist to promote their own development; but, as their development gathers momentum, if they stay apart the divisions must become deeper, and in that case Europe will be less and less able to play its full part in contributing to the development of those parts of the world where poverty, hunger, and lack of opportunity still constitute a major threat to our civilisation. Thus, we have before us not merely the ideal of European unity, but the opportunity to achieve it. What we need now is a collective act of statesmanship to heal this Western rift in the fabric of our Continent.

Britain belongs to Europe. We are also linked to the four corners of the world—linked by trade, linked by the Commonwealth, linked by our alliances. By joining the Economic Community we would be strengthening both Europe and her position in the world; the developing nations would be able to benefit by the greater assistance which could be offered to them; and I believe that a united Western Europe could work with greater effect to solve the other problems which have divided all Europe since the war. We would be falling far short of the challenge, and be less than worthy of our great record and prestige, if we did not now make a very real effort to bring all this about. That is why my right hon. Friend said the other day, "We mean business". And we do.

4.15 p.m.

Sir Alec Douglas-Home (Kinross and West Perthshire)

The House will be grateful to the Foreign Secretary for the careful and considered speech which he has made in introducing this two-day debate. The right hon. Gentleman began it by saying that all parties are broadly committed to the goal of a united Europe and that Britain would wish to make its contribution to that great aim. He himself has always said—and truly; it runs in the family—that he is a European, and he has made a case for British entry into the European Economic Community with real conviction. He feels that if Britain is to exercise the authority and influence which she should in Europe and world affairs we can better do it inside the Community than out. I do not know how far this is shared by his party behind him, but at any rate the right hon. Gentleman believes firmly in this.

The right hon. Gentleman then went on to give us some idea of the problems of probing which the Government have in mind to be followed up possibly by negotiations. I think that the whole House would feel that it is right and proper to begin with consultations with the E.F.T.A. because the increasing polarisation of Europe as between E.F.T.A. and the E.E.C. is one of the worst features of the European scene today, and I think that no one can complain that the programme as he has out- lined it today has not the necessary sense of urgency. So I congratulate the right hon. Gentleman on some of the progress that he has made. For instance, I do not think that, a few weeks ago, anybody would have thought he could have produced the Prime Minister at the Lord Mayor's Banquet in the shining white armour of a European crusader—albeit with a black tie. Therefore, the right hon. Gentleman deserves credit.

But I would say one thing to the Foreign Secretary. In one respect, I do hope, because he is a generous man, that he realises that he is lucky. He has a Parliamentary Opposition who will help him in his negotiations to get into the Common Market, and help him to make it a success. This was something which was denied to my right hon. Friend the Member for Bexley (Mr. Heath). Her Majesty's Opposition will assist the Government in this because we believe it is in the national interest so to do.

Last week, the Prime Minister invited a debate up and down the country on whether or not Britain should enter the Common Market, and as this debate starts in Parliament I think that it is absolutely necessary to establish the basis on which the Prime Minister is going into the discussions. Therefore, I wish to ask him to define with a little more precision than the Foreign Secretary did today words he has already used in this House, because I believe that it is on an authoritative and correct interpretation of these words that the success or failure of the negotiations may hang.

For example, if the Prime Minister were to insist on the five principles as enunciated by Mr. Gaitskell, and then endorsed by himself, the enterprise would fail before it had begun. If he were to repeat that section of his Bristol speech in which he said: And these conditions require that we must be free to go on buying food and raw materials as we have for 100 years in the cheapest market, in Canada, Australia, New Zealand and other countries, and not have this trade wrecked by the levies the Tories are so keen to impose. then the debate might as well close down now almost as soon as it has begun. But I believe that the Prime Minister has changed his approach, and I will give the House the reasons very shortly.

First, he has involved himself in the exercise of probing. He is, in effect, the negotiator in chief—the right hon. Gentleman underlined this fact—not only, let us mark, on behalf of Britain, but also on behalf of our E.F.T.A. partners, because they will rely upon him. In these circumstances, he could not have cast himself for a rôle which was in effect and as some newspapers have suggested, simply a charade. Neither his reputation nor the reputation of the country, which is more important, would survive such cynicism as that. Therefore, the House is entitled to assume that the Prime Minister does mean business and that he is going into these negotiations to try to make them succeed.

That being so, I would ask him for a point of definition on the Treaty of Rome. The Prime Minister said in his statement: The Government take the view that, while there are anxieties on the point, the Treaty of Rome is not in itself … an impediment. The right hon. Gentleman repeated that, and went on: Perhaps I might summarise this important point by saying that the Government would be prepared to accept the Treaty of Rome, subject to the necessary adjustments consequent upon the accession of a new member".—[OFFICIAL REPORT, 10th November, 1966; Vol. 735, c. 1546.] Does that passage mean that the Government accept the Treaty of Rome as it stands? I am not sure that the Foreign Secretary quite answered that. The Prime Minister said, quite properly, that he does not want to be caught up in the static posture of words, although I notice that in other contexts in international affairs he is ready enough to define principles. But the vital significance is this. The question which I am asking now is the first question that will be asked by the French. If an equivocal answer is given, it is the only question which the French will ask.

I read the words which I have quoted as a statement that the Government accept the basic rules of the Treaty of Rome and will not try to amend them, that negotiations will be within the ambit of the treaty and that they will concern transitional arrangements. If I am wrong, I should like to be corrected now, because if I am wrong, again this debate might as well close down.

Sir Harmar Nicholls (Peterborough)rose—

Sir Alec Douglas-Home

Perhaps my hon. Friend will be good enough to let me finish the next section of my speech before I give way to him.

Secondly, the Prime Minister's words imply definitely that the Government are now prepared for Britain to be part of a Community which operates behind a customs tariff system of levies on imported food, including food from Commonwealth countries. The Prime Minister knows the importance that the partners in the European Economic Community attach to Article 38, which establishes the common agricultural policy, and that the Six are agreed that this is vital to the success of their experiment.

Again, I interpret the Government's words on this matter as meaning that they definitely accept an external customs tariff and the levy of foodstuffs. I will not be tactless enough to inquire, if that is so, what is the future of the Minister of Agriculture, the President of the Board of Trade and the Minister of Transport. However, if I am wrong, I want to be corrected now, because, if I am wrong in this matter, again negotiations might as well not start. It is of absolute importance to the Six that the British Government accept the common agricultural policy.

I must acknowledge, as the right hon. Gentleman himself has said, that transitional matters are in themselves not easy to solve. Some of them are very difficult. But the preparations started by my right hon. Friend will be found to be very useful, for example, in relation to Commonwealth problems. The right hon. Gentleman was right when he said that certain Commonwealth countries have made their own arrangements already with the Market. There is the particular problem of New Zealand butter. The Community was willing to meet that on the previous occasion, and I think that it would be of the same mind now.

The Community also recognised that, if Britain was to enter, it was reasonable that there should be time for transition from one agricultural support scheme to another. It is probable that the Foreign Secretary will not now be able to negotiate quite so long a transitional time as we should have been able to three years ago.

Again, there must be discussions and agreement about Britain's debt to the International Monetary Fund and the future of sterling. I was glad that the Foreign Secretary said something about the effect on the balance of payments. The other day the Prime Minister gave some figures in his statement to the House about the impact of our entry on food prices and on the standard of living, which I thought set the matter in perspective. It was very different from many of the wild statements which some of his colleagues, if not he himself, made previously. If the First Secretary catches your eye tomorrow, Mr. Speaker, I hope that he will give us a little more measurement of the effect on the balance of payments.

Clearly, the more food we produce at home, the better the position will be. Nevertheless, we are the largest importer of foodstuffs, and are bound to pay into the agricultural pool more than we get out, and it would be helpful to know roughly what effect on the balance of payments the Government anticipate that this will have.

Although the problems are difficult, they are not insoluble. The reason I put emphasis on stating with absolute clarity the Government's attitude to the Treaty of Rome is that I think that it makes the solution of these transitional problems a good deal easier. Once the member countries of the Economic Community know and are satisfied that Britain is a wholehearted partner in their adventure towards European unity, our problems become matters of common concern and their problems as well. Therefore, in that atmosphere, they are much more likely to be solved.

Sir Harmar Nicholls

Since both parties seem to be moving towards partnership on this, it seems right that both should be asked questions upon it. From this side of the House, one has heard the comment from what appear to be authoritative sources that, because the Six were the first to form this union and we are going in later, we must not expect the same privileges and preferences which they have given to themselves. Is that still the view of my right hon. Friends? If it is, it is not a matter of a partnership, but of a junior partnership.

Sir Alec Douglas-Home

We go in, as I understand, on the basis of the terms of the Treaty of Rome, which apply to all the partners equally. That would be my impression, but the right hon. Gentleman can correct me if he thinks that I am wrong.

In his Mansion House speech, the Prime Minister said that he thought that the time, tide and winds were right. That is largely true. The Commonwealth are more reconciled to Britain's entry than before. Commonwealth countries have apprehensions that entry might loosen certain historic ties, but they realise the economic necessity for Britain to go in and multiply her wealth. Their prime need is capital for Commonwealth development, and they know that we can only earn a surplus for investment on the scale required if we have a market greater than the Commonwealth itself can provide.

Incidentally, Commonwealth trade with the Community rose during eight years from £680 million to £890 million. At the same time, the Community has been able to make development grants in its under-developed associated territories of about £300 million. Already, the impact of the Community on the under-developed countries is strong. The Commonwealth's interest seems to lie with a Britain where wealth is multiplying at the fastest possible rate.

The right hon. Gentleman mentioned the British farmer and agriculture. I have come to at least one conclusion about the farmers' present attitude. They feel themselves confined, with imports from overseas and from the Commonwealth coming in on a large scale. They have concluded that the necessary room for the expansion of British agriculture can only be gained behind a tariff levy system.

When they consider whether they should be content with one that applies to our country alone, which is the proposal which our party has made, or whether it should be behind a tariff levy system surrounding a market of 250 million, I think they see great attractions in the latter, relying as they do on the efficiency of the British farmer. They see the great opportunities in the Continental market for expansion, particularly of meat production and cereals.

Anyone who has read the National Farmers' Union circular, which we had in the last two days, realises that the farmers will be very watchful of the type of production grant, because some items in our agricultural economy are vulnerable, particularly le us face it, horticulture and, perhaps, hill farming.

I believe that the fears—and these are the fears of that most British of institutions, the right hon. Gentleman the Member for Easington (Mr. Shinwell)—that somehow Britain may be overshadowed in the Common Market by supranational institutions have lately been largely allayed. I have always believed that this kind of international association can only hold together if the political institutions which it sets up evolve by consent of the major partners, and that, as the institutions come along, as inevitably they will, they will have a form with which each of the major partners can live. Unless that is so, the association will break.

I have seen nothing in the development of the Community up till now to make me change my views, though I must confess that for a considerable time to come, if I were personally conducting these affairs. I would feel happier if the Council of Ministers were kept in being, as an insurance, so to speak, so that the political realities might prevail.

Finally, I come to something which has been most apparent to the protagonists of a united Europe and for British entry, which apparently now, and only now, has come with a blinding light of revelation to the Prime Minister. It is that this adventure is not just an economic exercise in cold statistics. It is an act of faith to a large extent, and it has as its prize the political unity of a Continent, something very graphically expressed, and with feeling, by the Foreign Secretary.

The natural sequence of evolution—

Mr. Emrys Hughes (South Ayrshire)

Half a Continent.

Sir Alec Douglas-Home

The hon. Gentleman can well say "half a Continent", but I hope that the eastern half will come along later.

In such an association, the natural sequence of evolution of institutions would seem to me to be from the economic, to the political, to the military, although there could be, and there may well be, a considerable amount of dovetailing.

The right hon. Gentleman mentioned defence. I am not sure how far he was wise to mention it in the way that he did. I do not see much evidence, at present, at any rate, that General de Gaulle is more interested in an integrated European command than he is in the N.A.T.O. Command, and certainly the French force de frappe will be kept exclusively under French control. Nevertheless, people change their minds, events change, and there may be an opportunity—I am not putting it higher than this—in the military field to explore the ground in case there is something which will recommend itself both to the French and the Germans which will start the process of Europe carrying a greater share of the responsibility for its own defence—an objective, I may remind the House, always supported by the United States of America. It has always been trying to find a way to do this and to fit it into the wider Atlantic conception.

I therefore hope that the Prime Minister will not only wash this out of his mind, but will take the initiative, with the Heads of Government in other European countries, to see whether we cannot find something of this kind, because, inevitably, Europe will evolve this way.

Difficult and delicate as these matters are, I hope that they will be explored. Parliament and the country have sensed the urgency of British entry into the European Community rather ahead of the Government. The public have sensed that Britain is falling behind Europe, that Europe is falling behind America in research, in the exploitation of invention, in industrial techniques. I thought that it was a little sharp of the Prime Minister to pick out the Technological Institute of Europe at the Blackpool conference; but never mind, it means that he is moving in the right direction.

In these things we are falling behind. In a few years' time Russia will thrust herself to the sea. The countries of the European Economic Community can do something by themselves to bridge this gap between Europe and the United States—with the addition of Britain's industrial and technological strength. I believe that Britain's industrial and technological strength is necessary if that gap is to be fully bridged; and necessary to Europe, clearly, is a combination of the European Economic Community and E.F.T.A.

There are reasons of the highest policy. The right hon. Gentleman has given some, and I have tried to give others, which place this decision whether or not we join ourselves to Europe as one of the most momentous taken in our British history. The Opposition and Parliament are convinced, and have been for some time, that it is right for Britain to seek entry in the highest interests of the nation, and it is in that belief that we ask the Government to go ahead and to gain the confidence of the Governments of Europe in their intention to enter into the Community.

4. 36 p.m.

Mr. David Ginsburg (Dewsbury)

We have listened to the studiously thoughtful and moderate speech of the right hon. Gentleman the Member for Kinross and West Perthshire (Sir Alec Douglas-Home). He asked the Government some very pertinent questions, and I think that he and I, as supporters of Britain's entry into the Common Market, were very relieved that no answers were forthcoming to those questions.

He also promised the Government a measure of support in this venture on behalf of the Opposition, and contrasted this with the experience of the previous Administration. I feel that he was less than fair to many of us on this side of the House who, in 1962, made it quite clear that, subject to suitable conditions, we were in favour of Britain going into the Common Market at that time.

Although there may be no Division at the end of the debate, this should be an occasion when Members should stand up to be counted, and I want to make my own position quite clear that I welcome the Prime Minister's new initiative with regard to the British membership of the European Economic Community. Whether we shall be successful in these negotiations, time alone will tell, but of one thing I am certain—and this has already been emphasised—that much will depend upon the spirit in which it is undertaken. If we really mean to succeed, we will succeed. In particular, I regard the Prime Minister's statement that he will maintain the momentum as being of the utmost and most crucial importance.

There will be those who will wish to saddle Her Majesty's Government with a lot of conditions and qualifications. I do not believe that this is right. If, in the course of this debate, we force the Government to disclose their hand now—in order, as it were, to resist those on both sides of the Chamber and in the country who are critical of entry into the Common Market—we can rest assured that their bargaining position will be very seriously weakened.

I am against too many conditions for negotiation being made for another reason. There are those in this House who are against our joining the European Economic Community on principle, but unless one takes that view there is an assumption that Britain should join the European Economic Community if that were possible. Even the late Mr. Hugh Gaitskell implied that there might be a better opportunity to join in the future when, presumably, the terms were right. The only trouble, unhappily—and it is a view that General de Gaulle has also encouraged with his statement that may be one day Britain will be ready to join—is that the longer one leaves it the more difficult does entry become for a country like ours.

The longer the Common Market has life without Britain, the longer will its institutions take shape without Britain. If, therefore, getting the right conditions matter, we shall get the right conditions with an early entry and not with a late entry. Some people speak as though signing the Rome Treaty is the end of the negotiations for all time, but all the evidence points to the Common Market taking itself the form of continuing almost permanent negotiations.

Criticism has already been made by the right hon. Member for Kinross and West Perthshire—and it will no doubt be repeated during this debate—that my right hon. Friend the Prime Minister has changed his mind. It is a misplaced criticism—[HON. MEMBERS: "Oh."] It is a good thing if a Prime Minister is big enough to come to this House of Commons and indicate that he has changed his mind. Let us face it—most of us here have all changed our minds. I was opposed to British entry in 1960, but by 1961 I had changed my mind. I used to think that the European Free Trade Area would be more successful, and would compel the Common Market to bargain with us. I also attached greater significance to Commonwealth trading links, but I now believe that, with the best will in the world, they are not a sufficient trading base for Britain in the world of today.

I believe that in the past the Prime Minister's attitude to the Common Market was no different from that of the Deputy Leader of the Opposition. They both wanted an industrial arrangement for Europe on E.F.T.A. lines, but it was just not on. The Leader of the Opposition, of course, can claim a consistent record, but he was luckier than most because he was charged with the Brussels negotiations.

If we look into history, we see that we have all, with exceptions, failed to grasp the urgency of the Common Market nettle. For instance, Mr. Macmillan's name will always be associated with the first attempt to join, and this is to his credit, but in his memoirs he admits that he did not push Lord Avon and Winston Churchill hard enough when they were in charge of affairs. He says in the prologue to "The Wind of Change" that he thinks that, perhaps, as a junior member of the Cabinet he did not push the issue hard enough when there was an opportunity for this country to take part in the Rome Treaty. Equally, looking back into history, we must admit that we missed the boat at the time of Lord Attlee's Government. Despite Ernest Bevin's misgivings, because he was a very good European—and those of his colleagues in that Government who are now present will remember this—we missed the boat over Europe. Therefore, although there are all sorts of very important considerations and conditions to be fulfilled, I devoutly hope that we shall not miss the boat this time, but will settle for a suitable arrangement with the E.E.C.

Most hon. Members, when weighing the pro's and con's of joining the Common Market will—and there is nothing to be ashamed of in it, and everything to be proud of in stating it—rightly look at the question from the constituency side, and from the point of view of the effect of joining on the life of the people they represent here. My own constituency relies very heavily on wool textiles—nearly 40 per cent. of the labour force in Dewsbury works in the mills—and, perhaps unlike the cotton industry, we have never feared foreign competition to the point that our industry has espoused protectionist causes.

We stand for an enlargement of foreign trade. Indeed, we criticised the American Government when, not so long ago, they took measures against cheap foreign wool textile imports. We were, perhaps, fearful of the Anglo-Japanese trade treaty when it was negotiated, but we must admit that in the outcome it has led to some very beneficial effects for our British wool textile exports. It is true that the Common Market will present the wool textiles industry with problems—not that those problems are not there already—in particular, of competition of cheap Italian woollen goods sent to this country.

But one has also to look at the positive side of the balance sheet. The European market presents a marvellous opportunity for our wool textile industry; in particular, if we can raise men's clothing standards and demand on the Continent to what we are beginning to enjoy in this country the boost to our wool textile industry will be very considerable. The same could be said, I believe, for carpets. The result of the tremendous increase in demand that going into the Common Market will create for wool textiles will impose very big changes on the structure and organisation of the industry but, as I have said, those problems are already there.

Perhaps one of the most forceful objections sometimes put up against our entry into the Common Market at this moment is that Britain is not strong enough economically, and that, in particular, entry would aggravate our balance of payments, especially in the light of the recent difficulties the Government have had. I do not agree with this view, and I should like to spend the last few minutes of my speech in giving the House a few facts. British exports to the Six between 1958 and 1965 increased by 115 per cent. Indeed, the share of exports to the Community in the British export achievement from 1958 to 1965 rose from 13 per cent. to 19 percent.

If one contrasts this with the performance of the Six to this country, one sees that the exports of the Six to Britain went up by 74 per cent. The share of exports to Britain in the Six's exports rose from about 8 per cent. to 9 per cent. Perhaps it might be simpler to put the figures in another way. In 1958, Community sales to Britain exceeded British sales to the Community by £55 million. In 1965, British sales to the Community exceeded Community sales to Britain by £55 million. If that is what Britain can achieve in the face of the common tariff of the Community, then let us have no doubts about what we can achieve still further if that tariff is removed.

Mr. E. Shinwell (Easington)

That spoils the whole of my hon. Friend's case.

Mr. Ginsburg

One could also look at the question of invisibles. No estimate is possible here. Britain has important invisible trade earnings, and there is no doubt that there are great possibilities, particularly in insurance, for British earnings should we go into Europe.

One of the things that is argued in relation to the problem of the balance of payments, and the weakness of the economy, is the suggestion that the difficulties which the British Government and the British economy have suffered during the last two years with regard to inflation are a unique British problem, something which only we have experienced, and therefore we are too weak and tender a plant to go into the E.E.C. This is not the case. In 1965 Germany went through an experience almost as traumatic as our own. Wages and salaries in Germany went up by 9 per cent. Productivity—very familiar figures—went up by only 3.7 per cent. The Germans had a very serious inflationary problem in 1965. The Dutch had their troubles, and so did the Belgians, the French and the Italians. Indeed, in 1963 the Italians had a deficit on their balance of trade of £400 million. When one considers that Italy has a total volume of trade half that which we have, again one sees that we have nothing to fear, and nothing of which to be ashamed.

Mr. Shinwell

Now that my hon. Friend has developed his case and showed the difficulties on the Continent, would not it be better for them to join us rather than for us to join them?

Mr. Ginsburg

I am glad of that good-hearted interruption. I thought that my right hon. Friend the Foreign Secretary spoke of this as being a two-way affair and also of the Six joining us.

It is sometimes thought that a deficit on the balance of payments is something from which only this country suffers, and therefore again we have to be very careful before we go into the Common Market. If one looks at the facts, one sees that on the balance of trade over the last eleven years the Common Market has been in surplus only twice. There have been 55 balances—five countries for eleven years—and they have been in deficit 40 times. Only Germany has a reasonable record on her balance of trade, and again I think that Britain has very little of which to be afraid.

If we consider the invisible trade item to which I referred, we find that the statistics show that Britain's invisible earnings are the best and are outstanding compared with the other five Common Market countries. Indeed, we are the only important net investor abroad.

There is, of course, one snag in all these figures which I have given, and it is an important one. I am thinking of the capital item. Britain has the largest volume of overseas spending in terms of aid and military expenditure compared with any of the other Common Market countries. This is the nub of the problem. To the extent that the Common Market gets its balance in order, it will be able to assume greater burdens here. In any event, the load on Britain should and will be less.

To conclude, therefore, it is doubtful whether the problem of the balance of payments is really a serious obstacle to our going into the Common Market. The Government are right to hold the £ firm and to balance our payments. It is a proof to the world that we are able and willing to enter the Common Market with absolute confidence.

4.55 p.m.

Sir Derek Walker-Smith (Hertfordshire, East)

For my part, I am glad that the Prime Minister's announcement to the House last Thursday did not include any immediate intention to make an application under Article 237 of the Treaty of Rome. If the Prime Minister's words are to be taken at face value—and it may be that there is no irrebuttable presumption to that effect—the position arising from his statement is not in my view unsatisfactory, since the basic questions are left open on the pattern of procedure which is there outlined. When I say "the basic questions", I mean not only the question of when an application should be made, but the question of whether an application should be made.

The test was prescribed in the right hon. Gentleman's statement of last Thursday in unexceptional, if perhaps rather imprecise, terms, namely, the safeguarding of essential British and Commonwealth interests. Nobody, I am sure, would quarrel with that as a test, though there may no doubt be differences of interpretation.

At any rate, there will be no application until the Government are satisfied that that test is complied with. If and when they are so satisfied, then, presumably, they will come to the House to discharge the onus which will lie on them to show that the case, in their view, is proved according to that test, and lay before the House, and therefore before the country, the full facts and the consequences, good and bad as they see them, of joining the Community. At that stage it will be open to hon. Members to agree or disagree on what will obviously be a matter of decisive importance to the British people if it arises.

As I think the House knows, I was one of those who in 1961, in common with other of my right hon. and hon. Friends then sitting on those benches, were unable conscientiously to record a vote in favour of an application to join at that time. The hon. Member for Dewsbury (Mr. Ginsburg) referred to changes of mind. If right hon. and hon. Members have changes of mind, that is certainly nothing of which to be ashamed. I think that politicians should always acknowledge the possibility of error. They are no more exempt from it than the rest of the community. Indeed, the rest of the community undoubtedly think that they are much more liable to it, and some even more than others.

For my part, I have looked back to the circumstances of that time; and, seeking to put aside the meretricious temptations both of obstinacy and complacency, I have sought to ask myself whether or not we were right in what we then did or refrained from doing. Looking at it as objectively as I can, and with the benefit of five and a half years' hindsight, I have come to the conclusion that we were right at that time. Having approached it by that proper path, I reached that not disagreeable conclusion that we were right in our advocacy of a greater caution and a closer calculation of Britain's interests as an indispensable prerequisite to the fateful action of application under Article 237.

What has changed in the quinquennium which has passed since 1961? There have been changes in Britain, in the Commonwealth and in the Community, although the changes in the Community are necessarily confined within the framework of the Treaty of Rome. But five years is not a very long time in the history of nations and institutions—too short, perhaps, to make it certain whether any new definitive and decisive trends have established themselves. Changes there have been, but the main issues are as they then were. But those main issues are not only economic; they are political and constitutional. Whatever people thought at the beginning, nobody doubts that now.

I want, first, to say a few words on the economic aspect. It should be easier to come to a definitive conclusion on that than on the political and constitutional aspects, because economic issues lend themselves to a more precise assessment and have fewer imponderables. But even on the economic issues it will not be all one way. At best one can hope to strike a correct balance overall. Different sectors and different industries produce different results when put to the test of membership of the Community.

The great economic attraction of membership of the Community is said to be the size of the market; but, as was shown in an interesting study by leading merchant bankers, not long ago, this is not a universal criterion. The size of market that may be requisite in aviation and chemicals, for example, is not required for a whole host of smaller industries.

There are obvious balancing factors overall. It is an advantage not to have to compete over the common external tariff of the Community; but against that there will be a detriment to the home market and Commonwealth markets. That is a truism which should hardly need mentioning, but for the curious naïvete of some business men, who seem to assume that they will have the best of both worlds and that the ability to sell to the Community without having to overcome a tariff will not mean their forfeiting their Commonwealth preferences.

There is one economic argument which I hope the House, whatever its feelings about the rest, will reject. It is an argument not so much shouted from the housetops as whispered in the corridors, but none the less potent for that. It is that only by joining the Community can the British people and British industry take the steps that they should take of their own volition and spontaneous action—the elimination of restrictive practices in industry, and so on. Of course there are many things to sharpen competition that this country must do to survive, but it would be an intolerable humiliation for a country with great industrial traditions, and for the British people, if it were believed that these things could be done only under the compulsive influence of joining the Community and accepting its disciplines.

On the economic issue, it is right that industries and sectors should make their own individual assessments of the economic effects upon them; but it is wrong that they, or anybody, should base their view of this great topic on narrow and personal advantage. There is a duty on them all to take into account the wider question of national interest, including the political and constitutional, as well as the economic, aspects.

I also want to say a few words about agriculture, not in order to analyse the complex matters which arise from it—because others are far more expert to do that than I—but merely to emphasise the way in which the results of the detailed study that has been given to the position of agriculture provides a striking and, indeed, stark illustration of the basic realities, both economic and constitutional.

In the economic sphere it has been shown that what I have said to be true of industry is also true of agriculture. There are different results for different crops and commodities. But in the wider economic context it is shown that there are swings in this matter as well as roundabouts; and that although it will be easier for industry not to have to export over a tariff it will be more difficult if industrial costs are inflated by a rise in food prices of between 10 per cent. and 14 per cent.—that disadvantage is not confined to exports to the Community; it extends to exports throughout the world.

On the constitutional side, the agriculutral position shows clearly that under the Treaty of Rome we would no longer be masters in our own house and that the power of decision would pass from Parliament. For many years this country has practised a system of price sup port. It may or may not be the best system, but it has operated for 20 years with the assent of both sides of the House, after a careful study of the social and economic implications. If we go into the Community we part with that, not because the House has changed its views; it does not matter whether or not it changes its view—

Mr. Eric S. Heffer (Liverpool, Walton)

Is it not true that it is part of the Conservative Party programme to eliminate this system?

Sir D. Walker-Smith

If we want to go into the Common Market that is a necessary prerequisite. That is the logic of the situation. But for 20 years, when the Common Market was not on the horizon, the other system was accepted. I do not want to go into the agriculture question, as such; but the constitutional point is clear. It would not matter if not one Member wanted to change the system. That would be irrelevant because, under the Treaty of Rome, if we join the Community the power of decision passes from this House.

I must also refer to the Commonwealth. In the last five years things have changed more in the Commonwealth than in most other places. There has been a deterioration in Commonwealth relations since 1961 and, consequently, a decline in this country's enthusiasm for the Commonwealth, partly due to the reaction of the Commonwealth to what it thought was the undue haste and anxiety of this country to enter the Common Market. But that is not the only factor. There is, in particular, the failure sufficiently to make the necessary adjustments in the institutions and consultative processes of the Commonwealth to match its new composition and status.

Nevertheless, it was always accepted that in comparing actual membership of the Commonwealth with possible membership of the Community we were not comparing like with like. The Commonwealth, with all its diversity, is not, and could never be, a tightly institutionalised organisation like the Community—and perhaps none the worse for that, because the wider and more global the interests and connections of a country, the more desirable it is that it should operate within a looser framework and not have its activities confined within a single region or a rigid structure.

That would lead me into the wider question of the future of the Commonwealth and Britain's rôle in the world—and I must not be tempted to dilate on that now. All I would say in this context is that the Government should not despair too soon or too easily of the Commonwealth. They should bear it in mind as a factor in their decision, together with the possibility of Britain's participating in wider and more flexible arrangements in the world as a whole.

I turn now to the political and constitutional aspects, of which there are two. First, there is the immediate effect of adherence to the treaty on British sovereignty, and, secondly, the future question whether membership of the Community carries any implied or inescapable commitment to political federation in the future.

On the second of those matters, the position is clear as far as it goes; but our range of vision is necessarily limited. The treaty, of course, carries no express commitment to future federation. But the difficulty is that as time goes by, if we join the Community, the decision about federation would not be one of our own choosing so much as of the will of others, because our arrangements would be so inextricably involved with those of the Community that it would be difficult to the point of impossibility in practice—though not impossible in theory—to dissociate ourselves from a supranational federation if our partners decide that they want it.

Will they so decide? The fair answer is that we do not know. Nor, I would think, as yet do they. On the one hand there are the unchanging and devoted enthusiasts for political federation, and on the other hand the implacable opposition of General de Gaulle and those who think like him. We cannot foresee the long-term outcome. Possibly, federation has receded a little now compared with 1961, but both possibilities are clearly open.

Mr. Eldon Griffiths (Bury St. Edmunds)rose—

Sir D. Walker-Smith

I am sorry I cannot give way.

I come now to the other question relating to the political and constitutional aspect—the immediate consequences of signing the Treaty of Rome. Here we can see the position much more clearly. Two truths are surely apparent—first, that over a wide range of our national life there would be an immediate abandonment of sovereignty and of our constitutional principle of the sovereignty of Parliament. The second truth is that, so far, the British people have very little idea of what is involved.

We can, of course, see the broad pattern from the treaty itself. Referring to this well-thumbed copy, I see that Article 3 refers to the approximation of the respective municipal law of the members of the Community … to the extent necessary for the functioning of the Common Market. Municipal law, of course, has nothing to do with dustbins, but is the word used in international law to denote what we could call national or domestic law. Article 100 says: The Council, acting by means of a unanimous vote on a proposal of the Commission, shall issue directives for the approximation of such legislative and administrative provisions of the Member States as have a direct incidence on the establishment or functioning of the Common Market. What is involved in the functioning of the Common Market?

Again, we can see the catalogue in Article 3, followed up in detailed sequence in a whole host of provisions covering a very wide range—customs and tariffs, transport and agriculture, movement of workers and capital, establishment of companies, monopolies and restrictive practices, social services and so on. This is the main pith and substance of our economic and social life, and over all this enormous range, the Common Market law would be superimposed on the British law. Where they were not in agreement, it is the British law which would have to be adapted.

This is what the Master of the Rolls, Lord Denning, has said on this point: It will have the most profound impact on many parts of our law. Our Statute law must be re-written so as to show that the sovereignty of this island is not ours alone but shared with others. It is obvious, therefore, that Parliament and the country should know in more detail what the extent of this compulsory alteration in our laws would be before the decision is made—

Mr. Stanley Henig (Lancaster) rose—

Sir D. Walker-Smith

I cannot give way. It is not want of courtesy: Mr. Speaker asked us to be economical in our use of time. I had to refuse to give way to my hon. Friend the Member for Bury St. Edmunds (Mr. Eldon Griffiths) and it would therefore be wrong if I gave way to the hon. Member.

On 19th May, I asked the Prime Minister whether he would cause to be published a Command Paper setting out the changes which would be required in statute law if Britain were to adhere to the Treaty of Rome and the means by which such changes would be brought about. He replied: I see no need for such a Command Paper at present, but I will certainly bear the right hon. and learned Member's suggestion in mind."—[OFFICIAL REPORT, 19th May, 1966; Vol. 728. c. 298.] On Tuesday, I asked him again, following his announcement of Thursday. I could hardly believe that the time had not then arrived. The Prime Minister gave me this answer: I shall continue to bear the right hon. and learned Gentleman's suggestion in mind."—[OFFICIAL REPORT, 1st November, 1966; Vol. 736, c. 72.] There is dynamism!

It is not only the question of the immediate changes which would automatically be involved. In the future we would place ourselves in the hands of the Community, of course, over the same wide range of our law. Article 189 of the Treaty of Rome says: For the achievement of their aims … the Council and the Commission shall adopt regulations and directives, make decisions and formulate recommendations or opinions. Regulations shall have a general application. They shall be binding in every respect and directly applicable in each Member State. On that, the Prime Minister told the House in answer to me, in May: … we are studying very carefully what would be the implications both for Parliamentary procedure and of course for all questions of British law-making and judicial machinery arising from that Article. It requires close study … This is a very important question which needs working out before we get involved in any negotiations."—[OFFICIAL REPORT, 19th May, 1966; c. 1555.] Well, has it worked out? That was May and the date is now November and Thursday's announcement has been made. I hope that we shall have a clear answer tomorrow about whether it has been worked out or not.

It is clear that under that Article in respect of those Regulations this House can be nothing but a conduit pipe. That will be its role. We cannot reject or even vary any of the Regulations which are at present pouring out from Brussels. The collective law of the Community would bind the individual British citizen and Parliament and courts alike would be powerless to intervene. That would be a heavy price to pay for membership of the Community.

The British people may, in the event, pay it. I do not presume to prophesy about that, but I do know that they should not be asked to pay it in ignorance. It is a mistake to assume that the British people are interested only in the economic, bread and butter aspects of this matter. It is a mistake to assume that they are not interested in these great political and constitutional matters. I know, of course, that terms like "sovereignty" are not part of the everyday idiom of the British people; but they represent things which are long-established and deeply cherished. They are like the air we breathe—little noticed in its presence but valued beyond price in the event of deprivation.

There is, therefore, a duty on the Government of explanation and instruction, a duty not to gloss over these political and constitutional consequences. Therefore whatever is said to the contrary, I do not believe that the British people will be best served by haste at this time. On Thursday, pace and momentum were urged upon the Prime Minister. He adopted them and it seems to have become current phrase now. Pace and momentum no doubt in themselves, are good things, but they are not a universal and sovereign recipe for success. After all, who were more conscientious and wholehearted devotees of the practice of pace and momentum than the Gadarene swine? Their unhappy fate suggests that these things are not enough in themselves. They must be reinforced by some detailed study of the path to be followed and by some close appraisal of the destination it is sought to reach.

The test has been prescribed—a test with which I do not quarrel—of safeguarding British essential interests. I believe that matters should be probed to the hilt in the course of the application of that test and that there should be no facile assumptions in the absence of evidence or in lieu of proof. Neither industry nor patience should be grudged to the detailed and conscientious consideration of all vital facts not just in the crisis atmosphere of our present economic difficulties, but in the longer and more lasting context of the nation's future.

These great events are fraught with weighty and possibly fateful consequences for the British people. They are unique in their irrevocability; I therefore ask the Government to devote to their study of this matter, before a decision is made, the profundity which its importance demands, knowing that a decision to enter, once taken, may be repented but can never be recalled.

5.22 p.m.

Mr. F. J. Bellenger (Bassetlaw)

In listening to the speech of the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith), I detected echoes of many past debates in Parliament. With respect, I assure him that this is not a matter of logic chopping by learned lawyers and judges, however learned they may be. We must make it clear to the British public just what they will have to face if we join the Common Market, and while I am sure that an immense task lies ahead in relation to the legal references made by the right hon. and learned Gentleman, particularly in terms of changes in our statute law, the British people at large must understand precisely what is happening. I agree, nevertheless, that we must consider the legal implications, including the question of Britain's sovereignty.

Considering that in recent years Britain has passed through two World Wars, and considering what happened in the second, when we gave a guarantee to Poland and Roumania at the eleventh hour, one must ask: where is British sovereignty today? Where is our sovereignty when, in times of economic difficulty, we must go cap in hand to the Common Market and anybody else who might come to our assistance for funds to help sustain the £ and full employment? I suggest that, in viewing this subject, we must think somewhat along the lines of the speech made by my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) when moving his Ten Minutes Rule Bill earlier. My hon. Friend went some way into British history and, while doing so, I did not see hon. Gentlemen opposite disagreeing with him, particularly with his ultimate argument. That being so, I suggest that we must look at British history when considering our possible entry into the Common Market.

From where does free trade come—free trade which has made this country prosperous and which, particularly last century, helped to make us one of the world's greatest investors? From free trade—a phrase which we throw at each other from one side of the House to the other these days, many hon. Members not always understanding its true meaning—came the Commonwealth of Nations. It used to be called the British Empire, and it enabled our free trade policy to become our economic policy, and it brought us great riches. That happened because of the luck of discovery or by conquest, and we became one of the wealthiest nations in the world. Going even further back in history, one sees that all the great empires, including that of Spain, came about under similar circumstances.

I suggest that we should drop some of the high-falutin phraseology which some people adopt when discussing the Common Market, for when that phraseology is examined closely it is found not to mean very much to the ordinary men and women whom we represent. It is no accident that two Governments—the present Labour Government and the former Conservative one—reached the same conclusion on this matter. Considering past events, perhaps the Conservative Government were a little too precipitate in the manner in which they conducted their negotiations. That is why I support the statement of my right hon. Friend the Prime Minister and the announcement of my right hon. Friend the Foreign Secretary in regard to the methods they are going to use in their negotiations.

The right hon. and learned Member for Hertfordshire, East is aware that before going into court an advocate is given a brief which has been prepared by the solicitors in the case. A great deal of preliminary work would have gone into preparing that brief so that, in a short resumé, a mountain of facts may be digested in a matter of minutes by the advocate.

The Government are merely trying to ascertain what might be called the "heads of agreement". The right hon. and learned Gentleman is correct in saying that the Government must explore every item of this matter before coming to the jury, hon. Members, or the court, because we are a High Court of Parliament, saying, "These are the facts as far as we can ascertain them". Then will be the time for the great debate to take place. Hon. Members will then have an opportunity, with more facts before them, to express their points of view—including the views of hon. Members who will, no doubt, be briefed by certain vested interests and speak of the great harm that will be done to certain industries.

The British public as a whole are not so much concerned with the detailed and legal arguments or even with the views of certain industries. They have gone in their thousands on holiday to the Continent and have seen what the Common Market has meant for the economic prosperity of countries, many of which were beaten and brought to their knees in the last war.

The right hon. and learned Member for Hertfordshire, East referred to the chemical industry, and I agree that it is a romantic and wonderful business. Developments in the chemical industry will probably lay the foundation for many future improvements, technical and otherwise, and that is no doubt why Russia is so interested in Britain, Germany, France and other countries selling their "know-how" to Russia and building factories in that country. The reason is because the Russians can see further than their noses, certainly further than many people in this country can see.

The ordinary man and woman in Britain is not used to worrying about the sort of factors which worry people like the right hon. and learned Member for Huntingdonshire, East and, in the main, they tend to understand what they can see, even if they cannot always understand how what they see has arisen. What does the average Briton see when he goes to the Continent? He sees once flattened countries—and I suppose that Germany was far more flattened physically than we were in the last war—building up their factories, offices and houses with great speed. Many of these countries have built far more houses than we have. The economies of countries like Germany and France were in great turmoil and chaos until entering the Common Market. France has now created a currency which has a better gold and dollar backing than the British £, certainly with far bigger gold reserves than we have. They ask how it is being done, and they cannot answer. They might be persuaded for a moment by the right hon. and learned Member for Hertfordshire, East, especially when he uses the phrase "British sovereignty", because the British people are still insular. They think that here in this small country, protected by the seas, we are still as invincible as we were in the days when my forefathers sang "Britannia Rules the Waves". We no longer do, and that fact relates to the question of defence, which will arise later on in the negotiations. We certainly do not rule the waves economically, and something must be done.

The right hon. and learned Gentleman's Government and my own came to the same conclusion. That coincidence is not conclusive, but both the right hon. and learned Gentleman's Government and mine possessed more facts than we in the country and in the House possess. Therefore, I reinforce the point of my Question to my right hon. Friend the Prime Minister, asking him to give the House the facts as occasion arises. When the present Leader of the Opposition was conducting negotiations he gave many facts to the House and caused a great deal of controversy. That does not matter; we are here for controversy, and as the right hon. and learned Gentleman truly said we must weigh all the factors in the balance.

Every great firm and industry now seems to be federating, amalgamating, integrating, or whatever one likes to call it. In the board rooms, directors look at the whole balance sheet, the holding companies as well as the subsidiary companies and the rest. We, having as Members of Parliament to provide for 54 million people, and with their fate at stake, must assess the balance sheet as best we can. I therefore hope that my right hon. Friends on the Treasury bench will give the House full information. I do not fear the result. If we are given the facts the House may eventually say, "We do not go in under those terms". I will accept that so long as I possess the facts, but while the preliminary negotiations go on I am prepared not to press my right hon. Friends to give us more of the facts.

I admit that the political issue is an extremely serious matter. There is no doubt that if Britain enters the Common Market she will have to accept political difficulties as they are, and many will be unpleasant. We know in advance from the negotiations with General de Gaulle that he has a way of placing very unpleasant points of view before the world at his Press conferences. I can say two things about General de Gaulle, although I wish him a long and happy life. Like all of us, he is mortal and he is not the only one in France. Perhaps there are many other people in France who are holding their hands now because they do not want to impede their saviour, as many French people regard General de Gaulle, but who will be open to the same sort of arguments as we should be.

What will be the political issues? I will not outline or define them, although the right hon. and learned Gentleman mentioned some of them. Why should we be afraid of facing them? Since the war we have entered two great organisations, N.A.T.O., and U.N.O., both of which commit us to certain political un-pleasantries. Like other States, we have guaranteed the immunity of a foreign country from aggression. I could follow that to its logical conclusion, and it would make a very interesting argument with the right hon. and learned Gentleman, but the people of this country know it as well as we do and many of them are afraid of it.

If we go into the Community we shall be in a new position. We shall be one of seven, and, I hope, of a larger number later on, because those who thought of the Community of Europe had a bigger unit in mind to that which eventually emerged. I cannot believe that any British Government would surrender essential British interests lightly. We must play our part if we enter a wider unit; we must accept that responsibility, and so we shall. But the responsibilities will be no greater than some we have accepted in N.A.T.O. and the United Nations. Looking back to the League of Nations after the First World War, one recalls that we thought that we had devised something which would work. It did not, but that will always happen where men are concerned. Although one talks about nations, races or countries, we are all a collection of individuals.

Britain's history of observing its contracts and bonds should put us in a favourable light when General de Gaulle tests us by asking, "Are you prepared to sign the Treaty of Rome and observe it?". I think that we can give a clear answer, and I would give it myself. However, I was interested to hear my right hon. Friend the Foreign Secretary make it absolutely clear today that that would be without prejudice to our understandings and relations with America. That will not be pleasant news to General de Gaulle. Nevertheless, if we can tell him that we accept the Treaty of Rome and that we have other understandings with other countries, just as he has, so long as the Treaty of Rome is not prejudiced I do not see why he should not have faith in us. I think that he will, and at any rate we must try.

All that the Government seek is our approval to let them try. Perhaps they will succeed where, unfortunately, the Conservative Government did not. I shall not apportion any blame. The present Leader of the Opposition did his best, and from what I read then and from his speeches in the House on that matter, I formed the opinion that he sincerely and honestly tried to come to an agreement and arrangement on the Treaty of Rome. But he was denied by a—shall we say?—whim of a great statesman.

If we are not to argue our case on those factors, then, as the right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home) said, we had better drop the whole issue now. We undoubtedly face a veto from General de Gaulle. But Britain has faced more vetoes than that and come through successfully. If we are vetoed as we have been vetoed by Russia in the United Nations on any number of occasions, we must accept it and Britain will be thrown back to a situation, at any rate commercially, somewhat like that which we faced in 1940 when we stood alone. I am sure of the stamina of my country and its 54 million people. We shall face up to it. Many of the difficulties we face today will disappear as they did in 1940 when we fought on alone, but I hope that we shall not come to that situation in the negotiations which are now going on.

Indeed, I wish the Government every success. As far as I can support them, either in this House or elsewhere, I shall do so, at least by trying to inform the people whom I represent, as I did in past days, about the advantages to them. That is putting it on a low plane, perhaps, but the British people are like that. Certainly our electors are like that, as we know from election times and the questions that they put to us and the guarantees and pledges that they want.

If the Government can eventually come to the House and say, "Here is the situation and on balance we think they are to our advantage, whatever they may be to others", I am certain that we shall be wise then to accept that and support the Government in their application, whenever the formal application has to be made.

I have been a supporter of this idea for a long time since when it was first mooted by M. Schumann. I go further back than that. As a young man I saw all the anarchy and chaos existing for causes which I could not understand but which impelled me into a war in which I was twice wounded. When I came out at the end, like a lot of other young men, I proudly said, "We will see that this does not happen again", but we failed, and we failed partly because we were so concerned with our own sovereignty and pride.

Let us learn some of the elements of the situation that exists today, in which Britain is no longer a free agent. The question will pose itself, "Are we going to co-operate with others who have made a success?", and it will then resolve itself. Let hon. Members just think of the understanding that exists between those two immortal foes, Germany and France, as they were for years and years. If they can do it, we can do it, and I hope we shall.

5.42 p.m.

Mr. Sandys (Streatham)

I am, of course, heartily glad that entry into the European Economic Community is now again a live issue. I was on the whole encouraged by the speech of the Foreign Secretary this afternoon, which amplified in certain important respects the statement made by the Prime Minister last week.

It would be all too easy to criticise the reservations and the qualifications in those two Government statements; to point out the inconsistencies between the right hon. Gentleman's more forthcoming speech today and earlier ministerial pronouncements; or to cast doubts on the Government's sincerity. But that is certainly not the line that I propose to follow today.

Whatever regrets we may have about the attitude adopted in the past by the Government, and whatever anxieties we may feel about their future handling of the negotiations, we must all recognise the profound significance of the Prime Minister's announcement last week. He assured us that he means business. Of course he does. It would be absurd to suggest that the purpose of this new initiative is simply to prove the impossibility of securing entry into the Common Market on reasonable terms. Apart from everything else, it would be quite unlike the Prime Minister to go out of his way to identify himself personally with a deliberately planned diplomatic failure. If that were really the purpose of the exercise, I feel sure that the right hon. Gentleman would have assigned that unenviable mission to someone else.

But sincere intentions are not by themselves enough. As everyone knows, the crux of the whole problem is to persuade General de Gaulle not to blackball us once again. At his last press conference, he still showed little enthusiasm for Britain's entry into the Common Market. But it does not follow from that that he will necessarily wish to exercise his veto a second time.

General de Gaulle's decision will, I believe, be greatly influenced by two main factors. The first is the strength of the support which Britain receives from the other members of the Community. The Government must go all out to secure not merely the agreement but the wholehearted backing and enthusiasm of the other five. To achieve this we have got to convince them that Britain truly believes in the European idea and in the aims, short-term and long-term, of the Community. In particular, the Government must show that they recognise the dividing line between what is negotiable and what is not negotiable. This whole operation could be irretrievably doomed if it were thought that Britain was in any way calling in question the principles of the Treaty of Rome or was seeking to overthrow the basic policies which the Six have agreed among themselves with so much pain and difficulty.

Whether we like it or not, we have to remember that we are not founder members. The club already exists. If we wish to join it, we must be prepared to accept the rules and to pay the subscription. From the speech of the Foreign Secretary, I got the impression that this is at last recognised by the Government.

General de Gaulle will also, I think, be greatly influenced by the British Government's attitude on certain issues which are of special interest to him. The most important of these is the question of defence. The Prime Minister was, of course, perfectly right when he said that the Treaty of Rome was not concerned with military matters. But the right hon. Gentleman must nevertheless be prepared to discuss with the French President the future organisation of European defence and the possibility of co-operation in the field of nuclear weapons. Those are matters which General de Gaulle will certainly want to discuss; and the answers he receives will, I believe, play an important part in deciding his attitude towards Britain's entry into the Common Market.

Procedure and tempo are also very important. After the Prime Minister's statement the other day, I stressed the need to keep up the momentum. Several newspapers, including The Times today, have made the same point. Once the broad objective has been endorsed by the meeting of E.F.T.A. Prime Ministers next month, the series of bilateral contacts with the six members of the Community should proceed at a brisk pace. I was therefore reassured by the timetable of meetings which was outlined by the Foreign Secretary this afternoon. This showed a welcome sense of urgency.

I hope that in the preliminary approaches to the Six and in any subsequent negotiations attention will be focused on the major issues. As we found in 1962 and 1963, big principles can so easily get submerged in a mass of detail. If the main heads of agreement can be settled, it should not be too difficult to work out solutions for their detailed application.

That is as much as I wish to say today. I have been associated with the European movement for the last twenty years. It has therefore been a cause of sadness to me that Britain, which played such a leading part in the early stages, is no longer in the main stream of European thought and action. Now is our chance, perhaps our last chance, to take our place at the European table and to help to create, together with others, the collective economic strength and political influence which properly belong to Europe by reason of her history, her experience and the qualities of her peoples. For the sake of Britain and for the sake of Europe, of which we are an integral part, I sincerely hope that the Government's new initiative will meet with complete success.

5.53 p.m.

Mr. Stanley Orme (Salford, West)

The right hon. Member for Streatham (Mr. Sandys) has argued strongly in favour of joining the Common Market, but I want to put the opposite view and to explain the fears and doubts of my hon. Friends and myself about Britain's proposed negotiations and proposed entry into the E.E.C.

My right hon. Friend the Foreign Secretary referred to the discussions in the Labour Party in 1962 and 1963, when the Gaitskell five conditions were laid down. These conditions represented a compromise inside the party, because the issue had never been fully debated inside the Labour Party as such. As everybody in the House will recognise, those five conditions were a complete stop to any further chance of Britain's entry at the time. The Labour Party in effect came out against entry into the Common Market, and it is only honest to say so.

We have now made a fresh approach, and I want to know what it is which has changed so drastically in the intervening years to make it necessary for Britain to re-apply to make the Six seven. I know that by discussions with our E.F.T.A. partners the Government desire to obtain the entry of other Western European nations, but they do not mean to do that on a collective basis. If made, Britain's application will be made on Britain's initiative only and on her behalf only.

I want, first, to consider the European situation. At a private meeting in the House, M. Spaak, who was prominent in the setting up of the Community, explained his concept of what the European Community should be and what it should entail, and his explanation sent shivers down the spines of some of my hon. Friends who are very pro-European. M. Spaak's political concept is that of many statesmen, particularly among the Five, excluding France. It is the political issue which we must seriously consider.

M. Spaak is against the entry of any neutrals. He regards the Community purely as an extension of the militarily based N.A.T.O., a further extension of a military alliance. I do not attribute those views to all of my hon. Friends who favour our entry, but I know that there are many hon. Members on both sides of the House who are interested in the Community not just as an economic unit but as a political unit too. They regard it as a supranational authority of which Britain should be a part. That is a valid point of view, and I hope that in this debate all views will be exposed and debated. If they cannot be here, where else?

I am a Socialist and, I hope, an international Socialist. I do not stand on the Cliffs of Dover with the Union Jack saying that we must not cross the water in any circumstances. But I do not see Britain's joining the Six and making it seven as the Socialist answer to what we want to be developed in Europe. As General de Gaulle has said, Europe stretches from the Channels to the Urals, and it is at this wider concept of Europe that many of us are looking. There are the Western European nations, most of them in N.A.T.O., including the Six; there is Britain outside; there are the E.F.T.A. countries on the periphery, and among the E.F.T.A. countries there are many who are neutral; and there are the Eastern European nations.

Under the auspices of the United Nations, there have been negotiations at Geneva about the lowering of tariffs to speed the flow of trade between East and West and between the neutrals and E.F.T.A. and the Common Market and so on. The Kennedy Round is concerned with that type of development. That is the sort of development in which I want Britain to take part. I do not want the present European situation to be solidified, with the new Seven forming a political and military group opposed to the Warsaw Pact and neutral countries. Such a situation would not improve conditions in Europe, particularly while the German question remains at the centre of all our European problems. That is what worries me more than anything else. The German question straddles East and West and is a serious barrier to the development of the whole of Europe.

Mr. Heffer

Would my hon. Friend not agree that it is precisely because of the importance of developments inside Germany that it is essential for Britain to be a part of Europe?

Mr. Orme

If, as my hon. Friend says, the resurgence of Fascism in Hesse and other parts of West Germany means that the only solution to the problem is for Britain to join the Common Market, it is a poor look-out for Western democracy. I remember these arguments being used in the early 1950s over rearming Western Germany.

There is a very fluid situation in Europe. This is evidenced in France's attitude towards N.A.T.O. and world affairs. We have seen it also in Eastern Europe, in the attitude of Rumania to the Warsaw Pact. Many of the Eastern Europeans want a far more independent foreign and trading policy than their bigger partner, the Soviet Union. I am concerned in case this fluid situation becomes solidified.

Mr. Norman Miscampbell (Blackpool, North)

If the hon. Gentleman is so worried that the E.E.C. will become a military organisation, how does he imagine that matters will be helped if we leave things to General de Gaulle?

Mr. Orme

That is irrelevant. In that connection, however, General de Gaulle is being used by the independents in their arguments for Britain's entry. General de Gaulle is showing an independence, and what worries me is what happens when Mon General passes on. The Foreign Secretary and the Prime Minister have said that they are against a political entity in the European Community. In another place yesterday my right hon. Friend used much stronger language in support of this proposition than he used in this House this afternoon. He did not say precisely the same, and I will leave my hon. Friends on the Front Bench to answer this point.

The Chancellor of the Duchy of Lancaster (Mr. George Thomson)

Perhaps my hon. Friend will allow me to deal with this straight away in case there is any misunderstanding. I heard the speech of my right hon. Friend yesterday and he said the same thing today as he said last night.

Mr. Orme

This is a matter of interpretation. Perhaps I am a little sensitive in these matters. If, as has been said, Britain does not seek to enter the Community to resolve its economic problems—although I think that this is one of the reasons why it is applying—the question arises, why is it applying? I challenge my hon. Friends who speak of a political motive to explain this position.

Part of the speech of my right hon. Friend the Foreign Secretary this afternoon has puzzled and baffled myself and many of my hon. Friends. He spoke about Britain's entry into the Community and Britain's world position. There are many of us on this side of the House who are concerned about Britain's world rôle, our special relationship with the United States, and our military expenditure overseas. We have voiced such criticism on many occasions. I was astounded to hear the Foreign Secretary say that he wants everything to remain the same and yet at the same time to go into the Common Market. The words which he used then are sufficient for the French to say "No" to our application at this very moment.

It has been said that the British people do not fully understand what is involved in our entry to the Common Market. This is true, and I am hoping that the continuing debates on this matter will get the facts across to our people. It is not just a matter of an increase in food prices, serious as they may be; it is not simply the effect on our economy, the distribution of our industry and our future development, or our social services. It has also to do with how the Community is operated and controlled. The Community is undemocratic.

There is the whole problem of the Hallstein Commission, the position of Professor Hallstein and the fact that he is not answerable to an electorate.

Mr. Roy Hattersley (Birmingham, Sparkbrook)

A moment ago my hon. Friend was critical of those of us who wanted some political content in the Community. Is he not now being critical of the Community because it has insufficient political content?

Mr. Orme

Not at all.

The Prime Minister for the first time used the phrase, the possible acceptance of the Treaty of Rome. He went on to say that we might have to accept that as a basis. That means that we would accept the Hallstein Commission and all of the supranational authority of that body. This is a completely undemocratic and unrepresentative body. I agree that an extension of that would be a political extension, and it is starting from a very bad economic position.

People have spoken of new conditions having arisen since the last application was made to the Community. One of the important points raised dealt with Britain's economy, and this is where I am directly concerned. We need a strong and stable economy. At present, we are not masters in our own country. We are at the mercy of international finance because of the precarious situation of sterling.

Because sterling is a reserve currency and plays such an important part in world affairs, this is a problem which must be resolved first of all. I do not believe that entering the Community will resolve this situation. A much more broad approach, affecting other countries, has to be made.

The Foreign Secretary mentioned regional planning and development. This is very important and it could drastically affect the whole of the country's economy. We have had the drift and the drain into the South-East. It could be speeded up into what the economists call the Golden Triangle, covering the South-East of England and parts of Europe, France, the Benelux countries and so forth. It could have an effect on our ports in other parts of the country. It could have an effect on much of our economy. This is what worries me.

I do not believe that if the Community works as is spelt out in the Treaty of Rome we would necessarily be free to plan our economy and to put industries where we wanted them in our own time and to develop them in the manner in which we wanted. I give one example—the car industry. Suppose that over a period of years car production in Western Europe were rationalised and it was concentrated in one of the six countries. This would have a direct and drastic effect on the British car industry. The whole of this part of the economy would have to be reorganised. It could have exceedingly serious repercussions on the British economy. Speaking as a Socialist who wants Britain to have far more control over her economy and to have her industries placed under public ownership and control, I feel that this could be detrimental to us.

There is the question of the Commonwealth. The Commonwealth links as we know them would almost inevitably end with our going into the E.E.C. and throwing in our lot with the Six. But, looking at the matter as an international Socialist, or as an international person, I believe that the links which we have in a multiracial society, despite all the strains which have been created, are still one of the beneficial factors in this world. It is not just a question of the effect which our joining the Community might have on New Zealand and her exports of butter and food to this country or on Australia; it is also a question of the wider political effect which it could have on the world. We have the opportunity to maintain and develop our Commonwealth links.

These are some of the doubts which I have about Britain's entry into the Common Market. I see Britain in the mid-1960s as a smallish but highly developed, technical and industrial country moving forward into the technological age, a country with a mixed economy, but which, in my opinion, could develop and expand its trade and ability to provide goods and help to develop the world. I cannot see why we should go into a tight community of six or seven countries when there is the whole of Europe where tariff barriers can be lowered and where we can expand and develop our trade.

I am therefore opposed to Britain's application for entry into the Common Market. Those of us who hold this view have a duty and in fact, a right to express it in the House, to our party and everybody else. People who take the opposite view have the same right and duty. The Government should know that there is a considerable number of people, not only in the House, but outside and in the trade union movement who feel this concern. I hope that the Government will bear these points in mind.

6.14 p.m.

Mr. J. C. Jennings (Burton)

I must say how grateful I am for the opportunity to put on record what may be a minority view on this side of the House. In return, I shall try to follow the behest of Mr. Speaker and make my contribution brief.

Last Thursday, when the Prime Minister made his statement, he said—and his words stood out for me like a mountain peak and they remain the same after I had read them— Every aspect of the Treaty of Rome itself, of decisions taken subsequent to its signature —and these are the important words— and all the implications and consequences which might be expected to flow from British entry, have been examined in depth."—[OFFICIAL REPORT, 10th November, 1966; Vol. 735, c. 1539.] In his Guildhall speech, dealing with the same subject, he used these words: This is not a situation to be met by words". My training and experience have made me think that words should mean what they say. Therefore, the Prime Minister's words— all the implications and consequences … have been examined in depth"— should mean what they say, and I take it that they do.

I assume that the Government know exactly in which direction they are going if all the consequences and implications have been examined to the extent that the right hon Gentleman says they have. This direction does not mean only the economic direction and the question of economic union. It also means the logical conclusion of economic union—the political and constitutional implications. I therefore take it that, in saying what he did, the Prime Minister had made up his mind in which direction generally the Government would move when the time was right both politically and constitutionally.

I must say quite sincerely that the situation worries me tremendously. I fought the General Election largely on this matter. I included a reference to it in my election address. I say tonight what I said on my election platforms. In 1961, I was a Tory rebel on this issue. I make no apologies for that. [HON. MEMBERS: "Hear, hear."] It is our right, and my party have always generously recognised it, and I am grateful to them for it. I am still here to tell the tale.

I cannot bring myself to assume that there will be no political and constitutional connotations if we sign the Treaty of Rome. It is historically logical that this should happen, that one step will follow another, and that from economic union there will follow political union.

I have no objection to economic arrangements, even a negotiated economic union, provided we get certain safeguards. But I am horrified when I am told that I am as British as ever because I do not want to be a European first. I want to be British first and European after. Is there any shame or disgrace in wanting to be British first? It is therefore the implications and consequences of economic union of which I am frightened.

Let me refer again to the Prime Minister's Guildhall speech. I have a trans-script of it in my hand. Towards the end of his speech the Prime Minister, in talking about the Common Market and his proposals, said: All this can lead to a deeper political co-operation within Europe. Again, I come back to the question of words. They should mean what they say.

Here is one of the very few occasions when the Prime Minister has indicated that he is thinking along political as well as economic lines. Let us be honest. Anybody who wants to go into the Common Market and to sign the Treaty of Rome must ipso facto think along political lines. One cannot help it.

We know quite well that five or six years ago, when we debated the question in this House, the sentiment in most of those who supported going into the Market was eventually for a political alignment and a politically united Europe. They do not deny it. They are quite honest. Even Members who are here tonight are nodding their heads in agreement. They know that this is what they want. That is what frightens me.

The question of sovereignty or loss of sovereignty and political union in a political union in a federal United States of Europe has been swept nicely, beautifully and quietly under the carpet. It is almost a sin to talk about it. Apparently we have got to get into the Community, because of the mess we are in, in order to live as a nation. Oh thou of little faith".

Have we lost faith in our own selves? Have we lost pride in our own ability even to stand alone?

Those are my worries. A Tory rebel, yes. Whom am I rebelling against if I am rebelling? Against the Tory twins, or should it now be the Liberal triplets? [HON. MEMBERS: "Where are they?"] Things have come to a pretty pass in politics when a Tory is called a rebel if he either questions or disagrees with the proposals of a Socialist Prime Minister. [HON. MEMBERS: "Hear, hear."] I am glad that at last it has sunk in to some hon. Members that I am now being essentially a Tory and not a pink Socialist. [AN HON. MEMBER: "Join the Left wing."] I will keep to my own Right.

While the party opposite have substituted Part IV for Clause 4 and have lost their soul, in my party we have tended largely to become too-pink Socialists instead of fundamental Tories. In opposing this proposal, I am trying to be a Member who is getting back to some fundamental Toryism.

Let us look at the Treaty of Rome and be quite honest with ourselves, as I hope that the Government are. My right hon. Friend the Member for Streatham (Mr. Sandys) said that he had the impression from the Foreign Secretary's speech that the right hon. Gentleman recognised that to go into the Community we must sign the Treaty of Rome as it is. To me, it sticks out a mile at this point in the Community's history, when next year, in theory at least, in the Commission particularly, they get the majority vote—this is a dangerous situation from my point of view—that we must sign the treaty as it is and that they would not take us in if we insisted on amendment.

I should like the Government spokesman who replies to the debate tonight to assure me. I am asking for assurances. If I could get assurances on the political and constitutional aspects, I should be much happier about supporting the policies of both Front Benches on this matter. If it is the fact that we are to accept the Treaty of Rome as it is after we make all these perambulations round the rump of Europe, can the Government spokesman tell me how much loss of sovereignty he estimates there will be even under the Treaty of Rome?

My right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith), who five years ago most expertly, throughout the country and in this House, exposed what the loss of sovereignty would be, has touched upon it and given us the gist of it this afternoon. But the ordinary man in the street has no conception of what he will lose in rights and privileges that he now enjoys, even in a denigrated Britain, which is the attitude that many people tend to adopt. I mean questions of social services, benefits, rates of contribution, the position of the trade unions and all this sort of thing. How much loss of sovereignty of this House will there be?

Some hon. Members, and particularly the younger ones who have entered the House in the last two intakes, have been very anxious to change customs and traditions in this House. They want to change them in two days, three weeks or whatever it is, but nobody objects to that attempt because that is within our own compass and within our own power. But what will be the attitude of some of those young Members when, at the dictates of another body on the Continent, we have to change our forms of procedure and our powers in this place? The Minister who replies to the debate might also tell me in what fields there will be loss of sovereignty. How much are his Government prepared to lose, and in what fields?

It is easy to talk glibly about going into Europe. That is the way that it is put over to the electorate. "Let us go into Europe" is the theme. We never attempt to say what we mean by going into Europe, but just what do we mean? Do we mean trade? Is that all? Do we leave the other sort of things, the unmentionables, under the carpet or push them under the bed, or where? By going into Europe, do we mean in addition to the trade negotiations a form of federalism in which Britain would become a State in a United States of Europe, or part of Europe—what I have described as the rump of Europe? Let us never forget when we talk about Europe that a large expanse of Europe is behind the Iron Curtain and outside all this. It is a misnomer to talk about a United States of Europe mentioning only the Six and the E.F.T.A. countries.

Do we want Britain in such a United States of Europe to become like a county council in its relation to this House, or rather like, say, the States of Alabama or Georgia as separate States in the United States of America in their relationship to the central federal Government at Washington. Is that what we want? Is that what we are aiming at? Is that what is in the minds of the Government in their long-term project of political development? Or do the Government mean confederalism? Is this the line they will take?

The Government are being very coy about giving any indication of the political development which they envisage once we have signed the Treaty of Rome. I keep coming back to this, and this is what I want to know. I am told, "It is impossible to tell you, because we must await developments." It is argued that we must first get inside and that we will then influence and lead. Who is to guarantee that Britain will lead once we get inside or what the set-up will be then? We may influence, but there will be majority voting. If we take our E.F.T.A. partners in and they vote for us, they might give us a majority, but politics is so insecure and uncertain that nobody can forecast what the set-up will be.

Mr. K. Zilliacus (Manchester, Gorton)

Would the hon. Member not agree that the argument that we sign the Rome Treaty as it stands first and then find out what it does to us is like saying, "Sign that contract first and then find out what it does to you"?

Mr. Jennings

That is the hon. Member's way of putting it. I put it just as strongly. I am not in favour of a federal United States of Europe or binding ourselves in any direction like that. I would look more kindly on a confederal system, if we had to have something like this. The alternative is what is called federalism. This has been propounded quite recently again. We think of a conglomeration of States ranging from the United States of America to the Western European in one unit.

When I was in the United States, three or four years ago, I was amazed at their attitude towards us, because they took it for granted that we should, that we must, join the Common Market. I took the same point of view about it then—and I told them so, both publicly and privately—as I do now. We are told, largely by the U.S.A., that we should get in.

I want to say in one sentence to them, that what is good for us is good for them. Distance today, as the furniture removers tell us, is no object. The fact that we have 3,000 miles between us does not matter. Communications are so easy these days, and it could be just as feasible if the Americans want us to go into the Common Market, for the Americans to go in, as it would be for us to go in. What a prospect, what a great prospect, a political affiliation as well as a great Common Market of Western Europe and the Atlantic Powers, America and Canada, in one great composite economic and political unit. This would be a great power bloc. Why, if it is good for us, do they not go in?

I have spoken for longer than I intended. I want to say quite frankly that, while we are all in favour of economic arrangements, I am not prepared to sign a blank cheque on sovereignty, I am not prepared to sign a blank cheque that would denude this House of its powers; nor can I support a central Parliament to which we would contribute electorally, a central Parliament in Europe. I ask the right hon. Gentleman who is to reply to the debate, if this question of sovereignty and all it means does not arise, will he tell us quite clearly, and if it does, will he tonight, or his right hon. Friends tomorrow night, tell us how much loss of sovereignty is involved?

6.33 p.m.

Mr. William Hamilton (Fife, West)

Up to this point my own attitude to the Common Market has been non-committal, if not of violent opposition, and since the humiliation that this country suffered three years ago, like other Members of this House, I think, and people outside, I was indifferent to what was happening in the European Market. I have been 16 years or more in this House and have never once spent a night in Paris, either officially or unofficially. Therefore, no one can accuse me of being unduly sympathetic to Europe or Europeans.

But now the issue has been thrust again into the forefront of British politics, and one has got to ask the question, just why has this happened? I do not think it was just simply that the Prime Minister and the Government were yielding to Conservative pressure, that they were attempting to steal Tory clothes, although this would have been a legitimate exercise. I do not think it was simply to boost the confidence of business interests in this country, to encourage them to increase their investment, though this, again, would have been a legitimate reason for making some gesture. I do not think either, although I have seen it suggested, that the initiative was timed to coincide with the French general election season and thereby embarrass President de Gaulle in what his attitude might be to our application for entry into E.E.C. Nor was it due, I believe, as, I think, the Leader of the Opposition suggested, to the desire of the Government to seek to divert attention from the economic problems of our domestic situation.

I am prepared to accept that it is now the ardent desire of the Government to negotiate satisfactory terms of entry into the Common Market, that we mean business; and for any one to suggest that it is an about-turn by the Labour movement or that it is an about-turn of conference decisions over the years is completely to misunderstand the situation. The Labour Party, Hugh Gaitskell and others from that Opposition Front Bench, when the Conservatives were in Government, always asserted that we would be prepared to consider entry if, and only if, we could safeguard our essential interests.

The Government of the day, the Conservatives at that time, always said this was an alibi, that we could never get in on the terms we wanted, and that that, therefore, was a dishonest way of saying we did not want to go in. I do not take that view. I think that last week's announcement by the Prime Minister was simply the culmination of prolonged probings, and particularly probings since we got power in October, 1964. It seems to me self-evident that the Government must have been favourably impressed by those probings, sufficiently favourably impressed to warrant further advances. I do not believe the statement last week would have been made if the reaction of the Six had been unfavourable to the probings which had been going on for two years.

The Prime Minister was very careful to make certain qualifications, important qualifications, which had to be made, and which, I hope, the whole House would accept. First of all, he made the assertion that our own domestic problems must be solved by ourselves before we get in—before negotiations begin, indeed; and secondly, that there was no question at this point of time—here I refer to what the hon. Gentleman the Member for Burton (Mr. Jennings) said—of facing uncharted dangers, if dangers they be, of political supranational institutions. The third qualification, I think, was the safeguarding of what we regard as our essen- tial and legitimate interests, which were outlined in some degree by the Foreign Secretary this afternoon. As for our own economic position, I do not think there is any prospect of our gaining sufficient internal economic strength to be accepted in E.E.C. within two years, even if the negotiating timetable were to allow that.

Let us assume that we could get in within that period. The chances are that we should be importing into this country more than we were exporting, because of the obligation to get rid of our high protective tariffs. In addition, acceptance of the agricultural policy of the Common Market would mean a considerable extra strain by way of increased food costs, with all that that might imply for us. For instance, we should need to impose a levy on all food which came in from countries outside the Six, and it was estimated in the weekend Press that that alone would lead to an adverse effect on our balance of payments of the order of £200 million. The right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home) asked for some estimate of the effect of that, and I hope that the Government will be able to give the House some idea of what it would involve.

In the face of those facts, it is clear to all of us, whatever our views might be on the issue, that we must bend all our endeavours to getting our own economy on to a sounder and more efficient footing before the negotiations begin. The promarketeers, if I may call them that, want to strengthen the economy so as to speed the day when the Six will be readier to accept us than they might be now. No organisation, except a hospital, is willing to accept a sick man. The anti-marketeers must have an interess in making our economy stronger in order to prove that we can solve our own problems independently without joining those whom they regard as disreputable foreigners across 20 miles of water.

Since the Prime Minister has indicated as clearly as is possible at this stage that the United Kingdom wants to join the Common Market, the Government must have calculated that, by the time that we are able to negotiate seriously, having got rid of the preliminary talks, our economy will be strong enough to withstand what must be, I think, quite a serious initial shock.

On the second point of political institutions, let me say at once that, for quite different reasons from those of the hon. Member for Burton and my hon. Friend the Member for Salford, West (Mr. Orme), I was disturbed by the apparently dulcet tones of the Prime Minister when talking about the political implications of entry into the Market. No one can seriously doubt that the long-term objective of the E.E.C. is a political union. At the moment, it may be an economic, commercial concept, and it is a very successful one. All the figures which I have studied indicate that the Six have been going ahead much faster than we have outside the Community. The hon. Member for Burton was talking about the threat to our social services. I wish that we had the equivalent here. If there is one sphere of activity in which we have fallen well behind, it is that of social services.

At the moment, therefore, the Community is a very successful economic concept, though it is not anything like—

Mr. Shinwell

Tell them the whole story.

Mr. Hamilton

My right hon. Friend the Member for Easington (Mr. Shinwell) must learn to contain himself. I hope that I can answer some of the points which he has in mind. I have talked to him about them.

The economic side has been an undoubted success, though I am bound to say that it is not as democratic as most of us in the House and in the country have been accustomed to expect. Having said that, it would be disingenuous of any politician, from the Prime Minister downwards, to seek to play down the political implications of what we are trying to do. No one loses by being politically honest about these matters.

When one looks at the institutions of the Common Market—the Assembly, the Council of Ministers, the Commission and the rest—the charge can be made with some justification that, as matters stand, the organisation is bureaucratic, impersonal and much more undemocratic than many of us would like to see.

Mr. Raphael Tuck (Watford)

And it will remain so.

Mr. Hamilton

I am coming to that. We have to be certain that those features in the institutions of the Community can be changed, modified and democratised before we sign the treaty or have some guarantee that, when we get in, our presence and that of our E.F.T.A. partners will make that possible.

In principle, I am not afraid of the consequent loss of national sovereignty. No nation today should pretend to be economically or politically solvent, able to ignore completely or act independently of all outside forces. Neither the United States, the Soviet Union, China, nor anyone else can ignore completely all outside forces and opinion.

I remember the Cuba crisis, when the United States could have crushed Cuba in a week. Why did they not do it? It was because they knew that the force of world opinion would have condemned them. That was what held them back.

Mr. Raphael Tuck rose—

Mr. Hamilton

No, I will not give way. I hope that I do not appear discourteous to my hon. Friend, but I have not much more to say and I want to get on.

In no case is this argument more true than in the case of the United Kingdom. National sovereignty for us, whether it be in defence, in economics or in politics, must be an ever-fading myth. The longer that we exist as a nation, the more true that will be.

We are a trading nation, and a small island off the coast of Europe. One look at a map makes one aware of our relative size. It is interesting that all our maps show us in the centre of the world. That is a sign of our insular conservatism.

That fact, coupled with an economy which has been weakened by two devastating wars and cursed with this innate insular Toryism—and many of my right hon. and hon. Friends are tarnished with this brush—means that we are in danger of being left up a typical British creek with no paddle, while the rest of the world passes us by. I hope that that does not happen and that the Government will go to the country saying quite clearly and firmly that we intend to make a serious effort to link our destinies with bigger units. It is happening internally in our own country. We have set up the I.R.C. to do just that, and we must enlarge our horizons.

I have been appalled by the insular parochialism of some of my right hon. and hon. Friends who ought to know better. They claim to be international Socialists standing for the brotherhood of all men, yet they shrink from linking our destinies with those of folk 20 miles away. This is the crux of the matter, and I hope that in the next six or twelve months we will have a nation-wide process of education, information and elucidation; that we will have a prolonged period of this kind of exercise. This is one of the most momentous decisions that this House, this Government, this nation will probably ever have to make. I hope that the Government will make the decision with the full knowledge of what it implies.

6.52 p.m.

Mr. Peter Kirk (Saffron Walden)

To most of us who sat through the debates between 1961 and 1963, there has been an almost uncanny and rather ghostly aura about the discussion which has taken place this afternoon. Except for the fact that the two parties sit on different sides of the House, the arguments have all been the same; and, in the case of the right hon. and learned Member for Hertfordshire, East (Sir Derek Walker-Smith), even the words were the same. I can remember that speech made by him many times, made very well, beautifully and mellifluously. It reminded one of Max Beerbohm's description of Oxford station as being "redolent of the last expiring charms of the Middle Ages."

All the arguments have been the same, and I do not see that any new arguments in principle can be adduced at this stage. There are certain arguments of detail. While the debate on the principles starts up again outside the House, the best service that we in the House can render is to deal with one or two points that are bound to arise now, before the talks really begin, and leave it to the Government to take up detailed points as they arise in course of negotiations.

There has been a certain amount of talk from the hon. Member for Dews-bury (Mr. Ginsburg) and others about those who have changed their minds. I have not changed my mind and I would not reproach anybody who has one way or the other—not even the Prime Minister, although I thought the spirited attempt of the Member for Fife, West (Mr. William Hamilton) to prove that he had, was a little hollower than some of the arguments he put forward in the latter part of his speech. I accept the Prime Minister's change of mind with much the same gratitude that the early Christians accepted the conversion of the Emperor Constantine. At least the persecution will be a little less fierce now on this particular point.

Even though the Prime Minister has changed his mind, there are certain preliminary questions that remain unanswered. Superman though he is, even he cannot open the doors of the Common Market just by changing his mind. The first question is about the timetable. The Prime Minister has announced that he is going along at "a hell of a pace". He may think that, but is everybody else going forward at that pace? That is the problem we were up against in 1961.

The most staggering remark I have heard in this debate was that made by the right hon. Member for Bassetlaw (Mr. Bellenger) who said that our party was precipitate. If it is precipitate, then a snail is an Olympic runner. We took 10 years even to make up our minds to try to enter the Common Market. Having made the decision, my right hon. Friend went off to Brussels—and what happened? Time and again he stepped smiling from the aircraft and told us the latest hot things about the décalage and kangaroo meat which he had been discussing. It is not surprising the momentum could not be kept up under those circumstances.

The same thing could happen this time. It was not my right hon. Friend's fault then, and it will not be the Prime Minister's fault now. Even when the preliminary discussions have taken place, and even if those preliminary discussions are almost wholly favourable, it is very unlikely that any serious detailed negotiations can start for a period of nearly two years from now—and not only because of what the Member for Fife, West said about getting our own economy in order. That is not a strong argument. The two processes can go along simultaneously. First of all, the Commission and the Community are deeply preoccupied at present with the Kennedy Round, and that will occupy them until late next year. They then have the fusion of the three executives into one and the upheaval that the fusion of the E.E.C., the European Coal and Steel Community and Euratom will cause. That will take them well on into 1968. Also, there is quite a lot of detailed work to clear up the common agricultural policy.

What I am afraid of—I can see reasons why the Prime Minister made his announcement at this time—is that the preliminary talks may go well, and then we shall have a let down because nothing will be able to start for a period of 12 or 18 months.

As one who has very much wanted to see Britain inside a strong European Community, I think this will be a very dangerous thing. I should like the Chancellor of the Duchy of Lancaster, when he replies to the debate, to say a little bit more about how the Government visualise the timetable, not so much in relation to what is happening here or Governmentally in Europe, but what is happening in the sheer business of running the Community. We tend sometimes to overlook the fact that the machinery in Brussels, enormous as it is, can only proceed at a certain pace.

My second point concerns what the right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home) and the right hon. Member for Streatham (Mr. Sandys) had to say about defence. Both said that there is nothing in the Treaty of Rome about defence. It is true, as the Prime Minister said last Thursday, that the North Atlantic Council is supposed to discuss these things. What is the point, if the French are not also there to discuss them? This problem has to be faced. It is true that one never seeks to disguise it, although some of those who are against British entry seem to rediscover the fact with great indignation. It is true that those of us who support this wish to see it lead to political and defence arrangements later on.

Mr. J. J. Mendelson (Penistone)

Is the hon. Member not being rather unfair to some hon. Members when he says that those who are opposed to entry without proper conditions, discover this over and over again? Is not the true fact of the present situation that there seems to be a highly organised attempt to deny that there are these political and defence implications.

Mr. Kirk

I have never made a secret of what my views are in this connection, and many of my hon. Friends have taken the same view openly throughout the discussion.

The logical progression might seem to be economics, politics and defence, if we can get that far, and there are many difficulties. The defence question has raised itself at this point, which may be an inconvenient point, and not in five or ten years' time which might have been a more convenient point, although in strict legal terms it would be possible to imagine a negotiation which centred wholly upon the Treaty of Rome and the conditions to which we might accede.

I find it impossible to believe, as my right hon. Friend the Member for Streatham said, that one of the first questions the Prime Minister will be asked in Paris is about defence. It is good that he should be asked about it. My own view is that N.A.T.O. is in a chaotic state at the moment as a result of the French withdrawal. New arrangements have to be made. If we can make those arrangements within the orbit of a general European settlement they may be better arrangements than if made entirely on their own and completely isolated. I know that this depends on the closest possible links with the United States. This is inevitably a part of it—if one can only get the French to talk about European defence in a European context. Might it not be better, at a time when we are discussing the future of Europe, to bring this matter into the discussion? It seems, therefore, that this argument, that defence is not in the Treaty of Rome, and the place to discuss it is in the North Atlantic Council, is not a runner. However, this problem must be faced up to fairly soon.

One comes down basically to two difficult obstacles, and they can be overcome. So far as the three original Conservative conditions are concerned—and the two additional Labour conditions were never possible—the position at the E.F.T.A. has now almost solved itself. There will obviously be problems, particularly those relating to neutrals and to Finland. We tend to forget the specific Finnish position. What looked like being the biggest obstacle in 1961 now appears as almost the smallest one.

The problem concerning the Commonwealth has to a large extent solved itself. There is a further big obstacle, one in which all of us, however strongly we are in favour of going into the Common Market—and I am—have got to bear in mind. I refer to the position of New Zealand. It is impossible to consider New Zealand in isolation from the economy of the United Kingdom. The attempt we shall have to make here is, as far as I can see, in some way to get the Community to treat New Zealand—as it agreed in the years between 1961 and 1963—as a special case and almost an extension of the United Kingdom's own economy.

The third obstacle is the position of British agriculture. Here, again, I think that those in our farming community are now beginning to realise that considerable benefits are to be gained—as well as difficulties to be overcome—from entry, and there will probably be less opposition from our farmers this time than there was last. I hope so, because when the last negotiations were going on I had an industrial seat, but now that I have an agricultural one such a changed attitude would be very helpful. There are considerable advantages to be gained for our agriculture, though certain real difficulties can arise as well.

I believe that the real problem will be the length of the transitional arrangement and that this could well eventually make or break the negotiations. We shall need a fairly long transitional arrangement, particularly for horticulture, and one rather longer than the Community might at present be prepared to concede. But the point about the transitional arrangement is that not only would it make it easier for us, but it would be to a certain extent a guarantee of the good faith of the Six as well. If they are really anxious to see us in the Common Market, as they maintain, and if we declare that we accept the Treaty of Rome as it stands, the whole thing may well stand or fall on this question of a transitional arrangement. It could be the one outstanding rock on which the whole ship could be wrecked.

I am keeping my remarks short because I know that many hon. Members want to contribute to the debate. I for my part am delighted that the Government have now changed their course and are prepared to initiate this policy. I support, as I know that my party supports, any attempt they make to get into the European Economic Community.

7.2 p.m.

Mrs. Renée Short (Wolverhampton, North-East)

This is one of the most fascinating debates to which I have ever listened in this House. I am very grateful that we have this opportunity to discuss what many hon. Members have described as probably the most important problem that faces us and the most important decision that we, as Parliament, and the Government and the people of the country will have to make in the next year or two, or whatever the period may be.

Having said that, I must add my view that many of those speaking in favour of going into the Common Market are tending to gloss over the problems and difficulties that would face us as a nation. This is not really being fair to the people outside this place whom we represent and who rely on us for leadership in this matter, and in connection with all the other important problems with which we as Members of Parliament have to deal.

My own view is that on this issue of entering or not entering the Common Market we have been brainwashed for a long time. I do not go along with this emotive phrase, "Going into Europe". As my right hon. Friend said, we are in Europe; the question is what sort of Europe are we going into? Enormous pressure has been exerted, not only by big business, which has obviously vested interests for going into Europe, but by the Press. We know that there has been a large amount of money from certain—I was about to say Press lords, but Press king might be better—backing the Britain in Europe Organisation, or whatever it calls itself.

An extremely odd assortment of people have been campaigning for this country to join the E.E.C. We have had Conservative Members of Parliament, Labour Members of Parliament, captains of industry—and one or two Liberal Peers thrown in for good measure. They have all been working together—they are very eager beavers—putting forward the case for our going into the Common Market but never spelling out what the advantages of that step are supposed to be.

The only advantage that seems to have been mentioned here today is the old one of the larger market that would be available for British goods, but is this a valid argument, bearing in mind the market we might lose in terms of the cost we would have to pay to get in? Can we face that cost with equanimity? I do not think so. As a Socialist I feel that this represents far too restricted a horizon for a British Labour Government; and that we should look for the wider horizons hinted at earlier by one of my hon. Friends, beyond the boundaries that now divide East and West Europe.

The large monopolies have always been in favour of our going into the Common Market because they themselves would be helped, and this has been the trend we have seen in the Six ever since the Common Market was established. The large monopolies have got stronger and the small and medium-sized firms have gradually been squeezed out. That has certainly been the trend in France and in Germany, and if we go in it will be the trend here, too. While I agree that larger industrial units are more efficient, we have to keep in mind the immediate effect that this step would have on our economy, on our employment situation, and on the general development of British industry.

We have also seen in the Six a tremendous increase in the influence of American capital as more and more of it has been invested in the large international cartels in Western Europe. Undoubtedly this trend, which we have already seen in our own country, would continue at a very much accelerated pace. Of course, this may be something that Members of Parliament want and that the Government welcome, but I do not feel very happy about it.

I think that if Britain were to go in the going would be rough and tough for many British firms, because while it is said that there would be this larger market of 280 million people, or whatever the figure may be, to which British exporters and industry could turn to sell their goods—because the tariff barriers would be removed—the other side of the coin is that West German, French and Italian goods would be able to come here much more freely and provide much stiffer competition for our home-based firms.

Again, it may be that the Government want that. Perhaps they want British industry to have that cold shower of which we heard so much during the previous negotiations. Nevertheless, it is something that we should look at very carefully. Not a Government since the end of the war has solved the problem of raising our productivity, and that is where out basic economic difficulties lie. We have not been able to increase productivity; but is this the way to do it?

The Prime Minister talked at the Lord Mayor's Banquet about the technological community he would like to see created with Europe. The technological revolution, I am afraid, is developing too slowly in Britain. I wish it were progressing very much more swiftly. As a Socialist, I very much wish that the Government would prod and push by setting up science-based publicly-owned industries in order to speed the technological revolution, but we do not see very much sign of it.

The Prime Minister also announced that if we go into the Common Market we shall be in the European Coal and Steel Community. I do not known that that was a very good example for him to use at present, because that Community is at the moment in crisis and we see pre-war methods being suggested and resorted to that would endanger the Common Market. If the European Coal and Steel Community is in crisis, that crisis could very easily spread to the Common Market.

We know that it was set up—as indeed the Common Market was—in the rather heady expansionist post-war years, but the situation is very different now. European coal is rather expensive to get, and it is now facing competition from natural gas. There is also difficulty with the over-production of steel, and I think that the failure of this organisation, and perhaps of the atomic energy community, could spread to the Common Market, with rather dangerous overtones for ourselves and for any of the E.F.T.A. countries which may think of going in.

I think that the economic cost of going in would be considerable. The Government have, of course, to weigh the pros and cons—the cost of one thing added to another, the reduction of taxes, increased trade in another direction, and so on, and take the overall decision, but in my view the economic cost will far outweigh the advantages of going in.

The hon. Member for Saffron Walden (Mr. Kirk) said that the N.F.U. was apparently not quite so hostile to entry into the Common Market as it had been when the right hon. Member for Bexley (Mr. Heath) was carrying out the negotiations. The N.F.U. has, however, sent a report to all Members, which says quite clearly that the average family of four people will have to pay an additional 25s. a week for food.

Are we as Members, at this time, and in this stage in the development of our economy, to face this without turning a hair. I shudder to think of the effect on families in my constituency if they are asked suddenly to pay this additional cost and face this additional reduction in their standard of living. Unless the Government say that to offset the increase in food costs, and the increase in the cost of living all round—which has been estimated at about 6 per cent.—they will ensure that salaries and wages are raised by a similar amount, the people of this country will face a considerable reduction in their standards of living. Are we to ask them to pay this as the cost of going into the Common Market?

Reference has been made to our balance of payments problem, and I shall not labour this. It is a real problem to us, and the additional £200 million, which was mentioned by my hon. Friend the Member for Fife. West (Mr. William Hamilton), by way of increased costs for imported foods will present a problem which we shall have to meet.

If we are to consider the effect on the exporting Commonwealth countries—New Zealand, Australia, and so on—we must remember that there is another side to this coin. Our exports to the Commonwealth countries could be affected if we reduced our imports from them. It is fashionable among the Common Marketeers to say that the Common- wealth is not what it was, that it is not linked with Britain in the way that it was, that the ties are not as strong as they were, that Commonwealth trade is negligible, and so on, but the fact remains that nearly 30 per cent. of our exports go to Commonwealth countries, and nearly 30 per cent. of £4,700 million or whatever it is, is not to be sneezed at. This is something which we cannot afford to lose. In fact, we want to increase it, and I am sorry that the trend has been for exports to the Commonwealth to fall, rather than to increase. Nevertheless, they still represent a considerable proportion of our export trade, and this is something which we cannot lightly dismiss and say that it does not matter.

Geography on the other side of the House seems to be a little misplaced on occasions. We talk about uniting Europe but at the moment Europe is divided into three blocs. There is the E.F.T.A. bloc, to which we belong, the Common Market bloc, which some people would like to join, and there is Comecon. After a great deal of effort by this Government since they took office in 1964—and I am the first to give credit to my Government where credit is due—they have greatly increased our trade with the countries of Eastern Europe. Our trade agreements with them are showing considerable improvement. I think that there is room for still further improvement, and we need to show a good deal more energy in this respect.

If we go into the Common Market, what effect is this likely to have on our trade with Eastern Europe? Will British goods become less competitive, price-wise, to the countries of Eastern Europe because of an increase in food costs here and the effect which this will have on labour costs and the cost of living? This has to be put into the balance and thought about very carefully, because the Eastern European market is an expanding one.

I am not convinced that the Common Market is an expanding market, because the countries in it are all highly industrialised, all producing more or less the same kind of goods, and more or less taking in one another's washing, if my hon. Friends will not mind the expression. I do not believe that this market is likely to expand at the same rate as the Eastern European market.

Mr. Heffer

Would not my hon. Friend agree that trade between Western Germany and the Common Market countries and Eastern Europe is also expanding?

Mrs. Short

If my hon. Friend will be a little patient, I shall come to that matter, because, as he knows, I feel very deeply about this. I think that we need to look carefully at this, and I beg my right hon. Friend to give it some thought, because if we lose in Eastern Europe what we may gain in Western Europe, because of all the other disadvantages, we may find that our entry into the Common Market is not worthwhile.

I am certain that the Eastern European market is an expanding one. As my right hon. Friend probably knows, quite recently Mr. Lenart, the Prime Minister of Czechoslovakia, made an important speech which has a direct bearing on this, and on our position as an exporting country to Eastern Europe. He said that he wanted to increase the amount of consumer goods imported from Western European countries from the present 5 per cent., which is very small, to at least 20 per cent., which is a considerable increase. He wants to do this to provide the incentive to improve the production, quality, and design of goods manufactured in his country.

Here is a magnificent opportunity for British exporters and manufacturers to increase our trade with Czechoslovakia. We know that if our trade with one Eastern European country improves, it improves in other Eastern European countries, because Comecon is not only a very efficient trading bloc, but has efficient methods of passing on information about what is good in each country.

Unless we show energy about getting into this market, and get, as I should like to see, more than our fair share of trade with the Eastern European countries, we shall find that we have been "clobbered" by West Germany. As my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) said, Germany is already increasing her trade with Eastern European countries. We must adopt a much more energetic approach, but it is essential that we do not make our goods uncompetitive because of price.

If we go into the Common Market, how is this likely to affect our trade with Eastern Europe? The countries of the Common Market adopt the doctrine of Professor Hallstein, which is fundamentally and essentially an anti-Communist doctrine, but while they try to prevent other countries from trading with Eastern European countries, they strive energetically to increase their own trade with them.

One might say that the economic implications of Britain's entry into the Common Market are rather difficult to define. There are so many pros and cons, and so many arguments for and against, along so many different lines of argument, and so many different facets of the problem, that it is still unclear what the economic result will be. In my view the political consequences are obvious.

I do not know whether I carry many hon. Members with me when I say that at this time, when we may be approaching a new era in the world—a new era of peace, prosperity and international friendship—our Government have the opportunity to make a tremendous contribution, as a Labour Government. I have always believed this. This was one of my main reasons for wanting passionately to see my party gain power in 1964. We have a tremendous part to play in Europe in this respect.

It would be foolish of us to close our eyes to the expressions of desire for closer co-operation, increased trade, and cultural and tourist relations and contacts of all kinds, between the West and the countries of the Comecon bloc—the Warsaw bloc. There has been a definite relaxation in the attitude of the Soviet Union, Poland, Czechoslovakia and Rumania, and East Germany has always been anxious to increase trade with us. I am glad that our trade agreements are better now than ever before. East Germany is also anxious to reach a reasonable basis of communication with us.

If we were to jeopardise all this relaxation and the opportunities that lie before us now for real progress on several aspects of the policy to which we are committed, it would be a matter of regret and un-happiness which would last perhaps for many years to come. I refer to the policy, to which we are committed, for the achievement of a non-proliferation treaty between ourselves and the Soviet Union, and the creation of a nuclear-free Europe.

Are we to put these in jeopardy by tying ourselves politically, economically and possibly militarily with the countries of the Common Market? The Prime Minister is going to have discussions with leaders of the E.F.T.A. Governments and is then going round the capitals of the Six. Is he also going to Moscow to discuss this question with Mr. Kosygin? He should do. It is a very important matter for the British people. I want to know what the possibilities are if Britain goes in, and how the Soviet Union would regard our efforts in these matters if Britain were to become tied up in what I believe to be a fundamentally tight and rather inward-looking bloc of nations, and certainly a capitalist group of nations.

We also have to consider the effect if E.F.T.A. were broken up by the entry into the Common Market of ourselves and one, two or three of the other E.F.T.A. countries. It is not certain that all the E.F.T.A. nations would be willing to go in, or would be willing to apply for membership, or would be accepted if they did apply. The problem of the neutrals has already been referred to. This would create very serious difficulties. E.F.T.A. has been extremely successful as a trading group. We tend to underestimate its success. A move into the Common Market could have very serious repercussions on the countries left behind in E.F.T.A. This is another point that the Government must take into account in the discussions which are going to take place in December.

Politically, too, something that fills me with foreboding is the recent development in the West German elections. Admittedly they were held in only one part of the country, but a similar developmen may well take place in Bavaria at the end of this week. On this basis it is possible that in the near future we shall again have Nazi members of Parliament in the Bundestag. This would have direct repercussions and implications for Britain, which again leads me to think that this is not the time for us to show any sort of haste about getting into the Common Market. If we have a Government of the right in West Germany there is a very grave danger of our being sucked into the kind of policies that she is now pursuing and which will become intensified if the right wing swing is consolidated. There will be a Drang Nach Osten in 1966–67—in other words, a claim for lost territories. This is a very clamant cry in many parts of West Germany.

It is no use our saying that if we go into the Common Market we should accept the Treaty of Rome as it is written, with all the small print—most of which I find extremely alarming, including many articles which were referred to by the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith), which refer to the power of the Commission to issue directives to member States as to what they should do about their economy. There are many of these articles—[Interruption.] Oh, yes, there are. There are at last a dozen. The right hon. and learned Gentleman gave some of the numbers. They lay down clearly that the Commission can issue directives to member States. In the event of economic difficulties the Commission can issue directives about taxation, aid to nationalised industries, and many other matters which affect the economies of nations.

It is no good our saying, "It is all right. We can accept this and when we get inside we shall be able to change the machinery." This is barking up the wrong tree. If we go in we shall have precisely the same voting power—no more and no less—as West Germany, France or Italy, based on population. We shall therefore be faced with the possibility of being out-voted if three or four, or four or five, of the existing members decide to vote together on any issue. We shall be able to speak and raise our voice, but our vote will not be decisive.

In those circumstances I hope that the Prime Minister will agree that although we have a job to do in Europe it is not to polarise the present divisions of Europe into three blocs. A Socialist Government have the job of uniting Europe—bringing East and West together. If my right hon. Friend will extend his horizons to the world beyond the Elbe and Oder-Neisse line he will see that there lies the real challenge for a Labour Government—a challenge to produce great leadership, for which the world would be grateful.

7.28 p.m.

Sir Arthur Vere Harvey (Macclesfield)

Having listened to the speech of the hon. Member for Wolverhampton, North-East (Mrs. Renée Short), I am uncertain whether or not she is behind the Prime Minister in what he is trying to achieve. She has confused us.

Mrs. Renée Short

I obviously did not express myself very well.

Sir A. V. Harvey

Many of us on this side of the House were confused. The emphasis of her speech was on Eastern Europe. If she can persuade some of her friends in Eastern Europe to buy more British goods it will be a good thing. We have adverse balance of trade with Soviet Russia and have had for several years now, despite every effort made by this Government and its predecessors, and by industrailists with trade fairs to sell British goods to Eastern Europe. They must learn to buy British goods.

We want to trade not only with Eastern Europe but with Western Europe. The hon. Lady expressed her concern about small and medium-sized firms. I was glad to hear that coming from a Socialist Member, because all that this Government have done is to clobber them ever since they came to power, trying to bring about larger organisations. She also mentioned United States capital is going into the Six, but this Government have had a lot of United States capital in the last two years. That has kept them alive. Then, she talked about the technological revolution. We heard about this at Scarborough four years ago from the Prime Minister. It was a gimmick. Nothing has ever happened. We have the biggest brain drain of doctors, engineers and scientists going to North America and other foreign countries which we have ever had in our history. The Prime Minister, of course, never mentioned technology in his election address after the Scarborough speech. That is how serious he was about it.

The Foreign Secretary, talking about the approach to be made to Europe, said that we shall be getting it "just about right". I do not know what he meant by that phrase. If he does get it right, it will be the first thing which this Government have got right in the two years that they have been in power. I do not know why so much has happened in the last few weeks. One remembers what was said last March in connection with the Common Market. The Prime Minister is very talented and full of guile and technique and is a splendid tactician. I came into the House the same day as the Prime Minister, way back in 1945. I have watched him at work over the years. I have a great admiration for some of his qualities, but I am also on my guard about others.

There has been such a somersault in the last few months, I wonder what he is up to in this. Up to six or seven years ago, I had grave doubts about Britain going into Europe. I expressed them publicly and I had arguments on the radio with Sir Lincoln Steel and others, but I have come round to believe that it is the right thing to do. I have been very slow in being persuaded that way but now believe that it is the only course. We know all the arguments about the Commonwealth. I know them because I earned my living for five years in a British Colony before the war and I am indebted to the Commonwealth for many of the things that happened in my life. But these points are valid only if there is flourishing trade. This is essential. They have a great respect for the Monarch and all that, but we must still trade to make the Commonwealth "tick".

We have trade with some of the older Dominions. For example, last year we imported from Canada £458 million-worth of goods and sold Canada just over £200 million-worth. New Zealand, of course, is a very special case, and I will refer to it later. In our trade with Australia, there was an improvement last year. With South Africa, which is still in the Commonwealth for purposes of trade, we have a favourable balance of about £18 million. Whether that will be sustained, we do not know. Then there are the new States of Central Africa and elsewhere. In those cases, it is proving to be a costly proposition to liquidate our Empire.

I cannot see that this problem will diminish in the years ahead. It is costly propping up these nations, and we are frequently insulted in the process. I cannot understand how we can afford to lend money which we borrow from the International Monetary Fund at a rate of 4–5 per cent. to these under-developed countries, with no return at all. We are the only nation doing that on borrowed money, which is not a sound practice when our economy is as weak as it is today.

Many people go to Australia from Central Europe who do not have much respect for this country. Australia is looking more and more across the Pacific to the United States and Japan. We must recognise that. The last time Australia bought a British aeroplane of any note was when it purchased the Viscount 13 or 14 years ago. It has bought some executive aircraft since then, but no military or civil aircraft of any note, although it has had every opportunity to do so. We cannot go on like this if we want to sustain our people and improve their standard of living. Where are we to trade?

I know a firm which makes a very high grade tractor and which, up to a year ago, sold about 20 per cent. of its output to the Common Market countries. That firm has reduced the price of its product in two subsequent years to cover the import duty and its sales will disappear while the tariffs remain. This is very serious.

Apart from the white dominions, I am not optimistic about Britain increasing her trade with others. We have vast liabilities in Central Africa. Without going into the rights and wrongs of what has happened there, Britain will have to pay. We offered Zambia £14 million and we are criticised day in and day out by President Kaunda. We must play our part with the under-developed countries, I recognise that, and I think that every hon. Member recognises that we must play our part, but we cannot do more than we can afford. We must trade well to be able to make a worthwhile contribution.

The previous attempt of my right hon. Friend the Leader of the Opposition four years ago to get into Europe was a tremendous effort. He was playing almost a lone hand—going backwards and forwards to Brussels carrying out the most difficult negotiations. Every hon. Member on both sides of the House who watched him at work realised that he had this matter at his fingertips. He understood what he was doing and reported regularly to the House.

The difference then was that Britain was divided in two If we want to go into a great adventure like this, the majority of the nation must be behind the Government of the day. Eighty per cent. or 90 per cent. of the people must agree to a decision to go into Europe. At the time of the previous negotiations, the Labour Party did everything it could to obstruct and make life more difficult for my right hon. Friend in his negotiations.

Parliament counts for very little compared with public opinion. I am sometimes asked whether this Government will run its full course. In terms of Parliament, they probably will, but when the British people really set about them, it will be quite another story. We should not underrate public opinion. It has an enormous effect and an effective way of showing itself when the time comes.

The Government on this occasion have most of the Opposition with them and some hon. Members on their own side—[Laughter.] Hon. Members may laugh, but if they have listened to the speeches made today they will know that they could not have been more varied. I wonder what impression General de Gaulle will get tomorrow morning when he reads HANSARD.

I listened to the hon. Lady the Member for Wolverhampton, North-East and a few of the other hon. Members opposite and reflected that it was a good thing that television has not yet been brought into this Chamber. General de Gaulle will be the big problem: we should not underrate that.

I cannot get over what the Prime Minister said at Bristol on 18th March. I know that he does not like this being quoted, but I will quote from it. He said: What the Tories propose"— referring to the entry into the E.E.C.— would mean: an unacceptable increase in the cost of living, and hence in wages and export costs, an unacceptable increase in our imports bill, which would wreck any hope of paying our way, and a total disruption of our trade with Commonwealth countries. We have not yet been told why the Prime Minister changed his mind.

If he has, what about the other five or six Cabinet Ministers, who we know were against Britain going into Europe? How can he come to the House and speak for his Cabinet when there are five or six colleagues—the Minister of Agriculture and others—who are not in agreement with him? What are the British people to think about it? Surely the Cabinet must speak with one voice or there should be a few resignations. That would be a healthy thing and would clear the air and also help promotion on the other side of the House, to which I am sure that hon. Members would not be averse.

We must assume that the Prime Minister is serious, whatever his reasons. This is a very regrettable time to start negotiations, when we are in real trouble with our economy. As an industrialist, responsible for a large number of people in this country, I am not too hopeful that when we start to reinflate the economy in the coming months there will be much more than a trickle. I can see a barometer which is not very hopeful—when deflation is brought about over a long period, it takes that much longer to reinflate and get the economy "ticking" again. I am not aware, therefore, that this is the right time to start negotiations.

Also, is it a good thing for the Prime Minister personally to go round Europe, with the Foreign Secretary? I should be far happier if the First Secretary and the Foreign Secretary were to go together in these negotiations. Why does the Prime Minister always want to be in the limelight? On television we will be seeing the Prime Minister getting in and out of Comets, arriving at European capitals and talking with foreign leaders. The people of Britain do not want any more of that. The right hon. Gentleman says that he means business. In that case he should let his colleagues carry on with the negotiations so that he can come in at the right moment, when something final is on the cards. He should not play all his cards at the beginning.

If we are to be successful in our efforts to join the Common Market, General de Gaulle and the leaders of the other E.E.C. countries must believe that we are serious in our attempt and, for our part, we must be dedicated in wishing to negotiate and be convinced that we are doing the right thing. Considering the speeches of some hon. and right hon. Gentlemen opposite, one wonders whether they really are dedicated. If they wish to convince the Common Market countries that they are serious, they will have to change their approach, mend their ways, back their leader and forget many of the things they have said in recent years.

General de Gaulle has always suspected a British alliance with the United States. I am not one of those who decries our working with the United States merely because we are working with Americans. However, in the last few years we have gone a long way, perhaps too far, in this direction and General de Gaulle has every right to think about these matters. After all, within weeks of the Labour Party taking office in the autumn of 1964, virtually the first thing they did was to send the right hon. Gentleman the present Home Secretary to Paris to try to cancel the Concord contract. Other Ministers in the Government wanted to get rid of that contract, although General de Gaulle outsmarted them on that, as on other occasions, and the Concord project is going ahead, aircraft are being sold and the whole project is highly successful. The best way to bring about co-operation with a new aircraft is not to try to get out of a contract. I suspect that the French threatened to take the matter to the International Court at The Hague, although that is only a suspicion on my part.

The same thing can be said of E.L.D.O. The Government tried to run out on their commitment there. The French Prime Minister was here in July, but one gathers that his visit was not a great success. The Government have not built up the sort of relationship that this country should have with the French and I hope that efforts will be made to improve our relationship with that country.

I appreciate that we must recognise that the United States has bailed Britain out on several occasions. However, I cannot believe that that was done entirely to help us. We received help because, by giving it, America could keep the dollar strong at the same time.

We have ordered aircraft from America to the tune of about £500 million, although they are not to be paid for for another six or seven years. Considering that, and the fact that we tried to cancel the Concord project when we should have been throwing everything into the closest possible co-operation with France, as well as seeking closer co-operation with the Italians, Dutch and Germans, it is obvious that we should be building the aircraft we need in Europe instead of committing ourselves to this vast sum to be paid in dollars to the United States.

I want to know what has been happening to the British economy. After all, we borrowed £800 million from the International Monetary Fund. We have vast responsibilities to the Commonwealth and sterling area. Will we be able to continue to maintain those great responsibilities? I question whether we will and suggest that this whole matter must be looked into with great care before we proceed to take further action. It is no good Her Majesty's Government going off negotiating, returning and saying, "We will sign the agreement" unless they have first considered all the factors involved.

To begin with, we must get the economy right, earn our living and pay our way in the world without having to borrow from other people. I despair at Socialist measures for getting the economy right, having seen the Labour Party in office in the immediate post-war years and in the last two years. The hon. Member for Fife, West (Mr. William Hamilton) said that Britain had suffered two world wars. Britain has also suffered two Socialist Governments and I suggest that the latter have done almost as much damage to the economy as the former. [interruption.] Hon. Gentlemen opposite do not like hearing these things. I was in the House in 1945 and I recall that a number of my hon. Friends and I pointed out some of the troubles we would be facing and the fact that we had to earn our way in the world.

My hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke) and I opposed the Schumann Plan. I recall having grave doubts about it, although subsequently we came round and realised what should be done. I recall being sent for by the then leader of the Conservative Party, Mr. Winston Churchill as he then was, and it appeared to me that he had not been at all well briefed about my behaviour when he had to carpet me. Mr. Churchill thought that my views might have something to do with silk from Macclesfield or aviation. At the end of the interview I received a cigar from him, although I did not vote for the Schumann Plan because I did not believe in it at that time. However, times change and we must accept the great challenge which we face.

The Government do not have long in which to get the economy right. They are asking virtually every firm to run a fine toothcomb through their organisation and bring about economies, where necessary to cause redundancies and, over all, to operate with the minimum number of workers. That being the case, why do we have nearly 21,000 additional civil servants in two years and 1 million square feet of office space in London for the Civil Service? The Government should be setting an example to the rest of industry in bringing about economies. Even Ministers should be enticed to bicycle to work; and that would not do them any harm. The Government must find ways and means of setting an example, and I would like to see them giving more incentives. From where is the money to come for British industry to reinvest if this so-called squeeze continues?

Dr. Hugh Gray (Yarmouth)

What has that to do with the Common Market?

Sir A. V. Harvey

It has everything to do with the E.E.C., because unless we have a strong economy we will not be acceptable. The hon. Gentleman must realise, having been here for at least two years, that he has been watching the economy steadily running down. It must be put right and that is fundamental to what the Government are trying to do.

Mr. William Edwards (Merioneth)

Is the hon. Gentleman aware that if he continues in that vein many Common Marketeers on this side of the House will have grave doubts about the ability and capacity of the industrial leaders of this country to so into the Common Market: that is, if his speech is the level of their thinking?

Sir A. V. Harvey

I know that hon. Gentlemen opposite do not like to hear the facts of life, particularly when it concerns them, but I am afraid that they are going to listen to these unpalatable facts, whether or not they like it.

The Labour Party will have to accept labour mobility once we enter Europe. The Government have a responsibility to make it clear whether they accept these facts of life. Do they accept the free movement of persons, services and capital? Will they agree to workers being able to move freely from the E.E.C. countries to Britain, having the same social benefits as we enjoy? Are these things agreeable to hon. Gentlemen opposite?

I must mention agriculture because nobody should be under the illusion that the farmers are not having a difficult time today. A year ago fat cattle were being sold by Britain to the Continent and the value of that trade—disposing of cattle which were not acceptable to the butchers in this country—was then £8 million to £9 million a year, a valuable export. Today we are having to pay a high duty to get these cattle into Europe, as a consequence of which Irish cattle are coming here and, because of the Irish subsidy on them, they are being sold in Britain at about half the price at which they would otherwise be sold. The export of fat cattle from Britain helped the dairy farmers, certainly in Cheshire, to overcome some of the increased costs involved in milk production.

I see great opportunities for British agriculture if we enter Europe, remembering that our agricultural industry is second to none. It is the most mechanised and output per man is as high as in any other country. We have no need to fear competition from any of the E.E.C. countries. If one drives across Europe one sees that they are years behind us. I am, therefore, not alarmed on this score—except that our farmers will need a quite long transitional period, of perhaps eight or ten years, if they are to compete properly, and I believe that they will be able to compete.

I regret that the pamphlet which hon. Members have received from the National Farmers' Union shows that the N.F.U. has not gone further in its thinking on this matter in the last three or four years. I am, therefore, rather disappointed in the attitude being taken by the N.F.U. on this issue.

Defence presents problems, but the Prime Minister and his colleagues will have to face up to them, particularly since N.A.T.O. is in the process of breaking up or moving to Belgium. At present we are housing a great number of United States Air Force squadrons in Britain and the General feels sore about that. These matters will have to be examined, and not just discussed through the North Atlantic Council. They will have to be discussed between Britain and France. If we could do a deal with the French in regard to European defence—perhaps involving a reduction in the number of Americans in Europe—I believe that the European countries would be capable of themselves defending Europe, probably with the help of some American supplies. That might go a long way towards satisfying General de Gaulle on the defence issue.

I agree that everything should be done by us to meet the desires of our friends in E.F.T.A. They have been very loyal to Britain. E.F.T.A. have been an almost unqualified success in the years it has been operating, and if we can carry out the negotiations as a block rather than individually that would strengthen the British Ministers' hands and help the E.F.T.A. countries, which cannot stand on their own but would have to go in with us if suitable arrangements are made.

The House should be kept informed from time to time when there is something for it to be told, and the country should also be kept informed. There is nothing to be gained by hiding thoughts on this and we are better off discussing these matters frankly in the country and in the House. Having said that, I wish the Government well in their negotiations.

7.51 p.m.

Mr. A. J. Irvine (Liverpool, Edge Hill)

The hon. Member for Macclesfield (Sir A. V. Harvey) observed that there seemed to be a good deal of opposition on this side of the House to entering the Common Market judging by the speeches today. There are differences of opinion on both sides of the House on the substance of this issue, but I assure the hon. Gentleman that there is very substantial support on this side for the approach that is being made and I believe that there is an increasing element of support for it in the party.

One of the things that we have liked about recent developments is the manner and disposition of the Government's approach to the problem. I acknowledge the efforts made by the present Leader of the Opposition in his endeavour to get satisfactory terms for this country in the Common Market. But when his attitude upon the best approach to the Community is now compared with the attitude of my right hon. Friend the Prime Minister all the advantages seem to be on the Prime Minister's side, because my right hon. Friend's approach is cautious, prudent and businesslike. One has formed the impression from hearing the right hon. Member for Bexley (Mr. Heath) that he would have been much more declaratory in his statement of intent, much more committed than is the approach that is being pursued by the Government, and I believe that the Government are right in this regard.

If we can get satisfactory terms of membership there is everything to be said for entering the Community. I want first to deal with one or two of the political aspects of the proposals. Some of us on this side of the House opposed the rearmament of Germany some 15 years ago, and we had strong reason for that opposition. Many of us still think that we were right, albeit that we may have underestimated the overwhelming influence of the United States on that issue. Now the years have passed and the rearmament of Germany is a fact of history, a fait accompli, and I have always taken the view, which I still hold, that the logic of that development for those of us who took the views to which I have referred is, first, I make this comment in passing, that we must oppose unilateral disarmament by this country, and, secondly, that we must welcome the tying in of Germany in an association with ourselves and other Powers.

The relationship between this country and Germany is perhaps the most important of all the relationships with which we should be concerned in this debate. I share the anxiety of hon. Gentlemen on both sides about the disposition of German politics at present, but I am sure that it is desirable that there should be a tying in of Germany with ourselves in political association. It goes without saying that I say that without the least desire to cause offence to any West German, whatever his political viewpoint. It is a tribute to the energy and influence of the German people that I and others should attach this degree of importance to association with them.

A very important feature of a developing Community is that association with Germany can be of enormous benefit to the prospects of both our countries and of peace. It is not a question of one element in the Community getting ahead of another; I do not seek that. I know that, unfortunately, on the issue of association with Germany I differ from some of my hon. Friends who were old colleagues of mine. But I think that the logic of those of us who were anxious about Germany in the days when we opposed German rearmament is that as rearmament is now a fait accompli everything should be done to tie in Germany in association with ourselves in the European Community.

It will be found that there is strong opposition in this country and, I think, on this side of the House, to federalism, and I share in that opposition. There is certainly strong opposition to an excess of federalism, to any loss of identity of this Parliament, to any loss of sovereignty affecting foreign affairs, defence or certain aspects of our industrial and economic planning. The most interesting single feature of the Community at present is that, as I understand it, in our dislike of the federal solution we have a supporter in the President of France, and in the outlook of the French Government. The President's objections to federalism, which I share and which are enormously influential inside the Community, might in some respects neutralise his objection to our special relation with the United States. That aspect of the affair sees us apparently in agreement with the President of the French Republic on one important matter albeit that he dislikes our Atlantic connection. If we have this common attitude towards federalism, that might be a neutralising factor and fertile negotiation may take place on this footing.

I have every confidence that my right hon. Friends will be well able to extract from the different, and in some ways anomalous, features of French policy towards the Community and the Community's purposes a compromise as a basis of agreement. That will be of the greatest value for all the countries concerned.

There are many of us who still hope against hope that it may prove possible even now to sustain a great multi-racial Commonwealth. That is an object that we do not and should not abandon. However, it should be recognised by us all that in recent years the concept of the multi-racial Commonwealth has taken grievous blows. South Africa has gone. It has been allowed to go, some of us thought, and said, at the time, with far too little attempt at persuasion and accommodation. Now we are confronted by the very difficult and serious situation in regard to Rhodesia.

The significance of these matters for the purpose of today's debate is that it emphasises and underlines the need of this country for other associations and for association with Europe in particular. There is nothing in the least derogatory to our concept of the multi-racial Commonwealth, which is still precious, if I say that the difficulty that that concept is now undergoing adds strength to the reasons that some of us think operate for looking in other directions for associations, political and economic, which do not run counter to the Commonwealth association but may be complementary to it.

On the economic side, the experience of the post-war years must surely have driven in upon us the advantage of a large-scale territorial market near our shores. The struggle that has gone on all these years, creating for us immense and sustained difficulties, to achieve a viable trading account seems to make it abundantly plain that we should derive the greatest advantage from a fundamental reorientation of our trade and enterprise, such as participation in the Economic Community would constitute for us. The Common Market seems to offer such a possibility. It is difficult to see any alternative course with anything like equivalent promise.

It was observed in one speech from the Opposition that there were advantages and disadvantages in the economic prospect of association with the Community, that there were swings as well as roundabouts. That may well be so, but I should have thought that in economic terms the advantages of our joining the Community would prove very considerable. Nothing can destroy our links with Commonwealth countries, nothing can or should destroy the special relations that we have always had with the United States, but I cannot think that these matters, even in ideological terms, disqualify us from wholehearted, bona fide association in membership of the Common Market. Commonwealth countries have associations with the Market for all their special relations with this country. Why should we be thought to be any less assimilable? With the United Kingdom in the Common Market and preserving its special relations with the United States and the Commonwealth, we might well find ourselves at long last at the beginning of another great period of our history, to our own advantage and the advantage of Europe and the world.

8.5 p.m.

Sir Harry Legge-Bourke (Isle of Ely)

I should first like to make a comment about the behaviour of the Government Front Bench. I understood that this was to be the great new initiative of policy, and, though we all appreciate having the right hon. Gentleman the First Secretary of State and Secretary of State for Economic Affairs with us—he has been a most assiduous attender throughout the day—I should have thought that this debate was of such an importance for us to have at least the Foreign Secretary or the Prime Minister here most of the day. [Interruption.]

Hon. Members

Withdraw.

Sir H. Legge-Bourke

Those two right hon. Gentlemen are supposed to be in charge of the principal policies concerned here. I regard it as most lamentable that neither of them is here now, particularly as I wish to go for the Prime Minister personally hammer and tongs. If any hon. Member opposite would like to go out and fetch the right hon. Gentleman, I will try to defer the pleasure till he comes in.

The First Secretary of State and Secretary of State for Economic Affairs (Mr. Michael Stewart)

In that last remark, the hon. Gentleman over-rates himself if he imagines that people will go hotfoot to fetch Ministers because he is pleased to attack them in a debate in which the first speaker from the Opposition Front Bench assured us of the wholehearted support of the Opposition. It is perfectly well known that my right hon. Friends the Prime Minister and the Foreign Secretary give great attention to this House, but it must be known also to anyone who is acquainted with government at all that very heavy duties are imposed on all Ministers and particularly on them. The hon. Gentleman might take a look at the Opposition Front Bench. I make no complaint; of the situation there. The hon. Gentleman raised the matter. However, our opposite numbers on the Opposition Front Bench, in the nature of the case, have not the duties that my right hon. Friends have. Let the hon. Gentleman look at his own Front Bench.

Hon Members

Withdraw.

Sir H. Legge-Bourke

I know that the right hon. Gentleman is extremely annoyed with me, and I expected him to be so. I still say that it was the duty of either the Prime Minister or the Foreign Secretary, or both of them, to be present for the maximum period that they could possibly attend this House if this policy is so important to them. I understand that the Prime Minister will not be coming, and, therefore, I had better go straight at him.

What we are witnessing today, if the Prime Minister's speech at the Guildhall means anything, is an exercise in political tergiversation unparalleled since 1846 when Sir Robert Peel did his famous volte face on the issue of the Corn Laws. Anybody who wishes to study this matter in depth would do well to read "Life of Benjamin Disraeli" by Monypenny and Buckle to see the pulverisation that was brought about of Sir Robert Peel as a result of that exercise.

I suppose that today it is a natural instinct of those who have been strong Europeans to say "Welcome to the Prodigal Son" or to give heavenly rejoicing at seeing at least one sinner repenting, however late. I can well understand the temptation to do that. But I say that for a Parliamentary Opposition that wishes to be worthy of that name simply to applaud a tergiversation of this nature is to betray the very duty of opposition. What we should be condoning were we to allow the Prime Minister to get away with this is one of the most outrageous pieces of deceit ever perpetrated on the British electorate. What happened at the General Election this year was that the Prime Minister was condemning my right hon. Friend the Leader of the Opposition throughout the campaign for approaching Europe in the way that the Government are now proclaiming they wish to approach Europe. This is a tergiversation unparalleled since 1846 and it is worthy of the condemnation that that tergiversation received.

I hope that this will not be taken to mean that I do not wish to see the meeting of the E.F.T.A. leaders being successful. As my hon. Friend the Member for Saffron Walden (Mr. Kirk) said earlier, this is one of the immediate things. It may be that events will draw themselves out and that the time scale will become a period of years rather than of months before any real progress is made. However, there can be nothing wrong with the leaders of E.F.T.A. getting together, especially after the blitzkreig on E.F.T.A. which right hon. Gentlemen opposite perpetrated when they got into power in 1964. Anything which will cement E.F.T.A. is excellent and I wish these preliminary talks every possible success.

But one thing we have to face is that probably very few hon. Members and certainly the vast majority of people in the country have never read this document. I am afraid that many Ministers and ex-Ministers have never read it. It is called the Treaty of Rome. [Interruption.] I am glad to see that four hon. Members are holding up copies, one of them in the Liberal Party. That is splendid, but four is hardly a strong majority, even when the benches are as thinly covered as now. [Hon. Members: "And yours."] I know. I deplore the emptiness if this great issue is so important to both sides of the House, as it should be. It is probably because I am talking, but I am used to that.

Let us consider what has happened since the Messina Agreement which led to the Treaty of Rome. It is obvious that the original great idea was to get a political organisation at the time of the start of the Coal and Steel Community in 1950. Then we had the Messina Agreement and all the emphasis was on economics.

But behind the scenes all the time, and not always that far behind, has been the dedication of the United States to federalism. General Eisenhower himself said that unless and until there was political federation of Europe, there could never be any lasting peace. M. Monnet himself has blessed the movement towards a united states of Europe on a confederal or federal basis. In the background there has always been this political pressure towards a federation.

The only respectable basis upon which anybody could be in favour of Britain's entering the Common Market is by being at the same time entirely confederalist or federalist for Europe as a whole. A study of the Treaty of Rome shows straight away that inevitably it will involve political changes of a federal kind. How far and how fast and exactly how federal or confederal will be worked out as the years go by, but it is wrong to suppose that the Community can survive without a customs union being followed by a single currency, and it is wrong to suppose that the countries of the organisation can keep alive the vigour with which they started—and all credit to them—without developing politically with all this. To make that supposition is to fail to face what is in the Treaty, or is deliberately to deceive the people.

I believe that the treaty was conceived in a spirit of high federalism. It was soon apparent to Europe that Britain was not overkeen on that idea, but Britain had to be brought in by the architects of the document. And so the whole thing was trimmed and as the negotiations developed, the emphasis was more and more on economics and less and less on the political side. I would say to my right hon. Friends on the Front Bench as well as to the Government—

Mr. M. Stewart

Send for them?

Sir H. Legge-Bourke

I think that Ministers who are responsible for the conduct of affairs have a greater duty to be present when their topics are being discussed than have my right hon. Friends. I was saying that both my right hon. Friends and the Government have to get it absolutely clear that if they are to persuade the people of this country to follow the Government into the European Economic Community, which is presumably the first big goal, they have to ensure that they have done everything possible to educate the country about what is involved in the exercise.

That has not yet been done. I have done my best in my own constituency since 1957. I have talked to my local party executive and I have made public speeches about the subject and I have spoken about the construction of the Council and the Assembly and I have quoted the treaty and shown how it is constructed. But I do not believe that the majority of people in my constituency have got it yet and I am certain that people in constituencies where even that minor exercise has not been carried out cannot possibly know.

Therefore, before we go very much further, all three parties—and at least the Liberals have been consistent throughout—have to try to help the electorate to understand what all this is about. If we are to have the same sort of exercise which has been perpetrated by the European enthusiasts in past years, deliberately playing down the parts of the Treaty which might be unpopular and playing up those things which seem to have immediate benefit, we shall be deceiving the people in a way for which they will rightly not forgive us. I want our people to be fully educated into understanding what this issue is all about.

I want now to attempt to do something which no one in the debate has yet attempted. Let us suppose that these negotiations do not prove to be successful. What does the country do then? I believe that if some of these things had been done many years ago—and there was ample opportunity for them to be done—the country's economy would not be in its present state, but I do not wish to hark back over the unalterable past. I want to look forward to see what the country does if these negotiations do not turn full circle and produce the result for which the Government are seeking.

I have long believed that the most important economic freedom for nations is the one freedom which was left out of the four Atlantic freedoms—the freedom of choice to do business with whomsoever one will on mutually beneficial terms. In other words, this is the right to discriminate in trade. This right was taken from us particularly by the General Agreement on Tariffs and Trade which was signed by the first Labour Government after the war. Again, I do not want to hark back over what happened after that. I deeply regret that when it was returned to power the Conservative Party did not exercise the full rights which it had reserved through the mouth of Oliver Stanley and reassert our rights to alter our preferential tariffs and so on.

However, if we do not succeed in this new proposed exercise, only one solution will be left if we are to sustain the standard of life which we seek. We shall have to say that the Ottawa Agreements of 1932, the preferential levels of which were cemented by G.A.T.T., are now so grossly irrelevant to the needs of our time and that so much as changed since then and that we have so changed from being a primary producing Commonwealth to being a manufacturing Commonwealth, that we must now have a complete revision of the whole of our preferential system and trade agreements. We must put every single thing into the melting pot. Unless we do this we will see our health and wealth as a nation steadily eroded.

There is absolutely no doubt that if we go into the Common Market we will be driven further along the federal road by the United States. It has driven us a long way along it already in many respects. It has insisted upon the unconditional "most favoured nation clause" in trade agreements. That simply means that if two hon. Members were to represent two countries and to reach an agreement, they would have to pass on the benefits of that agreement to every hon. Member. In other words it destroys the whole basis of inividual good relations between nations.

I see the hon. Member for Lancaster (Mr. Henig) getting frightfully intellectually upset about this. He finds it very hard to contain himself when he things that someone less intelligent than himself is speaking. I assure him that I have taken a good deal of trouble about this matter over the years and I believe that there is a basis for nations to work together upon a preferential footing. To do this, however, we must do what the United Nations General Assembly decided in 1957 and again in August 1958 and support the five principles which were then laid down.

They are, mutual respect for territorial integrity and sovereignty, non-aggression, non-interference in internal affairs of an economic political or ideological character, equality and mutual benefit and peaceful co-existence. The vitally important one is "equality and mutual benefit." This is what is denied by the unconditional "most favoured nation clause" in trade agreements upon which the United States has insisted. As long as that goes on Britain will be faced with the choice either of going into a future federal era or of breaking loose from the shackles imposed upon it in the days of the passing of G.A.T.T.

Unless we face those issues the only alternative is to go further and further backwards and to become a Little Britain or to go into Europe, hook line and sinker, recognising in doing so that we are joining a politically federal exercise as well as a customs union.

This is what the country does not yet realise. When the negotiations are complete we shall have to make up our minds whether we want to go into a politically federal exercise of some sort or another. At the moment I do not want to do so. We shall have to see how these negotiations go and I hope that they will go well with E.F.T.A. and that E.F.T.A. can bring pressure to bear in Europe in such a way as to make some new arrangement with the Common Market countries for this nation. At the moment I do not see my way there, but I hope that these negotiations will find a way.

8.25 p.m.

Mr. Edward Milne (Blyth)

It is rather disappointing that the hon. Gentleman the Member for the Isle of Ely (Sir H. Legge-Bourke) lowered the standard of this debate by making an attack upon my right hon. Friends. He has been in this House long enough to know of the extra Parliamentary duties which both of my right hon. Friends have to handle. He should have known that sufficient regard has been given to this debate by the persons he has attacked and by the Government Front Bench as a whole. The Prime Minister is well able to look after himself and needs no assistance from me.

This has been a very wide-ranging debate, which has brought the Common Market to the attention of everyone in the country as well as in Parliament. The hon. Gentleman was quite correct to link the debates taking place inside Parliament to what has been divulged to the people of this country. Unlike him, I feel that this was the great difference between the approach which has now been made and the approach made by the right hon. Gentleman the Leader of the Opposition when he was conducting the negotiations into Britain's entry into the Common Market.

The hon. Gentleman raised one point which requires very close attention when he spoke of what was to happen to Britain if this approach was unsuccessful. To a very large extent this aspect is crucial to all of our discussions and to our approach to the whole issue. Many of us in the past, and many of us today, are sceptical and doubtful about the advantages, which are being paraded before us, of entering into the E.E.C. The matter of our non-entry into Europe is one of looking at the future and building up our economy on the basis of the standards laid down in the policies of the 1964 and 1966 General Elections, and of giving to our people, outside of membership of the Community, the highest standard of living possible, at the same time bringing our industry to the highest possible level.

However, we have now embarked upon a policy of examining to the fullest extent the pros and cons involved in seeking application for membership of the Community. We will do this, as the Prime Minister and the Foreign Secretary said, on the basis of a logical approach. We would be wrong to regard this merely as something which took place in the last two or three months. The question of our attitude and approach to Europe, and to wider relationships with the rest of the world is something with which Britain has had to live throughout its history. This is another phase of that development.

Mention has been made of the tremendous rise in the standard of living of the people of West Germany during the post-war period. This may be true. When we consider the Europe which lay torn and bleeding from the wounds of war in the aftermath of the 1939–45 conflict, many of us can marvel at the economic and industrial stability which she seems now to enjoy, forgetting that it was international organisations like U.N.R.R.A. and Marshall Aid which pumped life into the corpse which was then Germany and gave it this resurgence.

What we have underestimated, and what one hon. Member opposite attacked, is the tremendous contribution made by the first Labour Government after the Second World War in building the economy of this country to the standard and extent achieved between 1945 and 1951. Then we entered a new phase. When we discuss Germany and, as some of my hon. Friends have done today, the question of international solidarity and the brotherhood of man, it is always as well to consider who are our associates and with whom our associations are made. We cannot close our eyes entirely to the trends which are taking place in Germany at the moment. Nor can we avoid making a close examination of the trends which have taken place in Germany during her rise to industrial and economic prominence.

We can remember the inter-war period and the post-war period. The great house of Krupps was regarded, quite rightly, as the cornerstone of Nazi power in Europe. Even though Krupp was listed among the major war criminals of the Second World War, we find that this industrial empire is still something to which we have to pay regard and with which we shall be working in partnership if our entry into the Common Market becomes an established fact.

I do not want the House to get me wrong on this point. I have never taken what was commonly known during the war as the Vansittart attitude. I have never taken the view that Germany is a guilty nation. I have never even taken the view that the Germans have been responsible for all the wars waged in history, as many people have argued. From some of the arguments put forward by hon. Members opposite, one can see that the rise to power of finacial capital in Germany in the 1930s was largely aided and abetted by the industrial and financial power of this country. We can all remember, when Sir Montague Norman was Governor of the Bank of England, how loans were pumped into the Germany of the new Nazi régime which led to the holocaust of 1939.

The method of examination which the Government have adopted is, in my view, correct. For the first time in the post-war period and possibly even for the first time in our history, we are to embark on a detailed examination of where Britain is to go in the two or three decades ahead. Most of our international decisions in the past have been dictated by the actions of others or have been determined by our own self-interest only. On this occasion, we are linked with the E.F.T.A. countries. I do not need to dwell on that matter, because it has been dealt with at length today. But we have already taken part in a European grouping. We know what it is to work with our Scandinavian neighbours and other E.F.T.A. countries. When we talk about the economic prominence of the Common Market countries and of how the Community has altered the face of Western Europe, we must never forget that the two countries with the highest standard of living—Sweden and Norway—are not in the Common Market but are members of E.F.T.A. Entry into the Common Market is not, therefore, simply another panacea for all our ills.

We have had our experience of this group. The meeting will be held with the E.F.T.A. Prime Ministers, and the trade union movement of Britain will equally be meeting its E.F.T.A. counterparts in the months that lie before us in those discussions prior to seeking further investigation and the possibility of application to join the Community. In my view, this is the breaking point between the negotiations that were led by the Leader of the Opposition and the position that faces this party and the country now. This, to me, is the great divide at this period of time.

I am not suggesting that if we take all the E.F.T.A. countries with us or if we and our E.F.T.A. partners agree to make application as a bloc, this will be the last word; but if there is any vital difference between the last set of negotiations and those on which we are now embarking, I believe that this is the basic difference that exists.

It is wrong for hon. Members opposite to talk about the negotiations that were conducted several years ago and those that are about to be conducted as being similar in character. One of the great weaknesses of the previous application to enter Europe was that the Leader of the Opposition gave all his cards away at the start of the game and demonstrated clearly, both in this House and in his negotiations in Europe, that his party were prepared to go in on almost any conditions whatever.

Sir H. Legge-Bourke

Rubbish.

Mr. Milne

The hon. Member is, possibly, an expert on that subject, but it is not rubbish, and for this reason. If one goes through the speeches that were made at the Dispatch Box by the right hon. Gentleman on returning from each of his European excusions, one finds that that was the theme running through them. It does not need to be stated now, but it was repeatedly stated then, that unless we got into the Common Market our economy would be irreparably destroyed and that the future for Britain outside the European Economic Community would prove to be a disaster. Whether or not the hon. Member for the Isle of Ely describes what I am saying as rubbish, if he cares to read the speeches which were made, and which both he and I heard, during that period, he will find that that was the central theme of the reports that we received from Europe. As my hon. Friends remind me, an even higher personage than the right hon. Gentleman—namely, the then Prime Minister—was arguing on the same basis.

Therefore, the question which has been posed and which we have endeavoured to answer is, I believe, the correct one at this stage. There are differences in the method and the timing of the approach of the Government at present in power. Because of our association and our experience in E.F.T.A., we are right to bring the E.F.T.A. countries with us. We are also right to look at what has happened in the Community since it was formed, and particularly at the question of the Coal and Steel Community.

When the question of our entry into Europe was previously discussed in the House, one of the arguments that was posed to us representing mining constituencies was that this would be the solution to many of our mining problems. We were told about the coal barges that would be sailing up the Seine and of the power stations to which British coal would be supplied. By now in the Community itself there is a surplus approaching 50 million tons, and very much the same is true of the steel position.

However, I want to keep the promise which most of us made to Mr. Speaker when he appealed to us this afternoon to be as brief as possible, and I shall not go over many of the points which have already been raised. We must be very wary indeed of thinking, as we did on the occasion of our last application for entry into Europe, that we have just to make an application to be accepted, and that, if we are accepted, that will solve many of the economic problems confronting this Government and this country. At the same time as we are going through the negotiations and an approach to entry we have to be building up our own economy so that if entry does not become established we can look forward to an era in which the people of this country under a Labour Government can enjoy an ever-rising standard of living.

8.41 p.m.

Mr. Richard Wainwright (Colne Valley)

I hope the hon. Member for Blyth (Mr. Milne) will understand if, simply for the reason of time, I do not follow his argument.

I have found this a surprising debate so far. Some hon. Members who have spoken appear to be such strangers to unanimity they do not recognise the word when it is before them in the very Articles of the Rome Treaty which they have denounced. I am not so surprise by lordly Conservative observations we have had from people who have changed their minds since four years ago as by those who have changed their minds this year, for that was to be expected. We had a speech from the hon. Member for Macclesfield (Sir A. V. Harvey)—I am sorry he is not in his place—which seemed to me a most compelling demonstration of the desirability of shedding a bit of sovereignty. He did awake echoes from that side of the House—that we might become reduced to the status of a county council.

However, the most surprising thing to me in this debate is the attitude taken up by those who are opposed to the Government's move. I would have thought that their only hope in the present balance of Parliamentary opinion was to come to this debate with the most carefully worked out alternatives to urge upon us, and these, so far, we have not heard. We have had only some very sketchy suggestions, mutually contradictory, amongst the various opponents of the move.

I should like to make it plain that whatever mystery there may have been about some recent Government pronouncements on this matter, at any rate the Liberals do most warmly welcome the speech made by the right hon. Gentleman the Prime Minister at the Lord Mayor's Banquet on Monday of this week, and only regret it is not recorded in the journals of this House. His references to his initiative as a step to freer trade over a wider area, as a step to world economic development, and as a step to an ever-deepening relationship between Eastern and Western Europe—these were all very welcome to us indeed.

I at any rate noted with interest that the Prime Minister made in terms a denial of the idea that the Common Market is a rich man's club. This was of particular interest to Liberals, since when we were pressing this idea eight or nine years ago this was the most frequent objection flung at us by representatives of the party opposite, including my predecessor in this House.

It cannot be often that this nation has the chance in a major matter to have a second try very shortly after the failure of the first. Placed in that position, our obvious duty in all parts of the House is to try to profit from the lessons learned on the first occasion, painful though many of them were.

First, I should like to mention the lesson that the voices of those negotiating for this country can at times be drowned by deprecatory or hostile noises from Parliament and from other public forums in this country. It is still a risk. In my view, the only way to counter it is by determined action on the Government's part to give every possible earnest to those with whom we are negotiating that we mean business and that we are trying to move in their direction in the course of day to day Government.

I hope that we shall hear from the Government in the course of today or tomorrow that, in some of the legislation which they will be bringing forward during the next few months, specific regard will be had to practices already operating successfully in Western Europe. I am thinking particularly of the impending legislation on companies and the tax legislation which we shall be faced with again before long.

However, I am not speaking only of legislation. In the implementation of Ministers' policies, if there was to be a determined attempt to give proper communications to the Humber ports facing Europe, that in itself would be an earnest to some of our European friends that we really mean business.

In Government procurement, Government Departments have the opportunity to decide upon specifications. If they took a little care to avoid some of the quainter, more insular British specifications for goods which they required and specified European patterns instead, that again would carry its own message to a great many people on the Continent.

Sterling is a subject which we do not expect to be discussed hither and thither in public. However, if in their management of sterling and the development of their future plans the Government could pay some attention to suggestions which have been advanced by members of their own party, amongst others—and I think of Mr. Robert Neild, who some time ago published a most interesting variation of the Triffin Plan which amounted to substituting for sterling a European reserve currency—and if there were indications that thinking along these lines was going on, the statement that the Government mean business would carry a great deal more weight. At the moment, we have decimalisation and the Channel Tunnel to go on. In the opinion of my right hon. and hon. Friends, that is not enough.

Second among the reasons is the welcome fact that, in the present modern climate of public opinion, the fruit of our educational system and greater public sophistication, Ministers are at last, after centuries, freed from the feeling that, when they go abroad to negotiate, the public will expect them to behave as if it was a test match. The mentality that every step must be fought by British representatives in order to carry public opinion at home can be forgotten. That is a great burden gone.

If we are to be treated to it over the next few months, the headline, British Premier surrenders on kangaroo meat", will not stir the blood of many people under the age of 40 in this country. I hope that the Government will take full advantage of that welcome change of climate.

Third amongst the lessons is that the fact that we are only beginning to emerge from a serious balance of payments crisis need not necessarily make us apologetic in our approach. The last approach of the right hon. Gentleman who is now Leader of the Opposition was taken in the immediate aftermath of his own Government's serious balance of payments crisis and all that they had to do to deal with that in 1961–62. As far as I am aware, this difficulty was not raised during the negotiations, and it certainly did not become a factor in the published reports of what happened.

I mention this because there does seem to be some disposition to be too apologetic about our present financial difficulties. I quote here: … the problem of stabilising costs and prices must remain in the foreground of overall short-term economic policy. Those words are not those of the British Chancellor of the Exchequer. They, in fact, appear in the preface to the European Economic Commission's recommendations to its member countries in its quarterly economic survey of December, 1965. Of course, those with whom we shall be negotiating know all about these troubles which we in this country are now enduring, because in one form or another they have all been through them very acutely.

The fourth and last lesson I wish to mention is the essential importance of catching the tide. The Prime Minister spoke at the Guildhall of his impression that at the moment the tide is right and the winds are right. By using that particular simile, he showed that he appreciates that eventually the tide can ebb and the winds can change. It is the essence of negotiation that the moment there appears to be the risk of this happening some detail should be let go and efforts should be bent, and courage shown, in taking advantage of the last moments of the favourable tide. That, in my view, was the crucial point at which the last approach to Europe went seriously wrong. We did not sign when we could have signed and we gave General de Gaulle the opportunity to harden opinion.

The question is already being asked in the country what cards we have to play. I have time to mention only one, which I believe to be perhaps our best, namely, the fact that it is surely being increasingly appreciated in Europe, and in France itself, that in advanced technology we have a great deal to offer the Six in our capacity for research and development, just as they have a great deal to offer us in their success with the application of what very often British scientists have revealed. There are many projects on which I would think advanced technologists have whispered to de Gaulle that he cannot any longer go it alone and would benefit greatly by Britain being a general partner and not simply a co-partner in single ad hoc schemes such as we now have with France.

I was interested to read in the Financial Times of 28th October that in Strasbourg the European Parliament publicly acknowledged that in at least one field, that of advanced technology, Britain holds trump cards which make it a very desirable, perhaps even an essential, member of the Common Market".

The Financial Times goes on to say: … on one point there was virtually unanimous agreement: that no European policy in this field would really be effective unless it had the participation and support of the United Kingdom".

and the actual proposal on this subject was tabled by the European Socialists.

In computers, in aircraft, in nuclear reactors, in the development of the oceans and all they have to offer—in so many areas—there is enormous scope for a partnership to do things which neither the E.E.C. nor ourselves can hope to do fully alone.

That brings me back to the point already touched on today, that this will perhaps mean Britain eventually contracting out of certain traditional industries. Liberals believe that this is just what Britain should do, and that, rather than try to cover the whole industrial range as we have done for so long, and are now finding it so difficult to do, we should specialise in those things that we think we can do really well—

Mr. Robert Maclennan (Caithness and Sutherland)

Would the hon. Gentleman extend his remarks to agriculture as well, and suggest the same kind of specialisation there?

Mr. Wainwright

Yes, I am very glad to do so.

I would remind the House that, replying to the Leader of the Liberal Party last Thursday, the Prime Minister used these words: The Government take the view that, while there are anxieties on the point, the Treaty of Rome is not in itself or necessarily an impediment."—[OFFICIAL REPORT, 10th November, 1966; Vol. 735, c. 1546.] I hope that before this debate ends we shall have something a little more polished and precise than that answer to a supplementary question, but my right hon. Friend and my hon. Friends and I are prepared to accept it as a reasonable start. We shall have much to say to the Government on the political and defence aspects of this matter as the negotiations go on, but we believe that if the Prime Minister sticks to the text he announced at the Guildhall, he is set on the right course.

8.58 p.m.

Lord Balniel (Hertford)

It is not often that I find myself agreeing with the Prime Minister, but I confess that I agreed with him last week when he said on the subject of our present discussion that it … is a matter of the most supreme importance for Britain, for Europe and for our partners in many other areas."—[OFFICIAL REPORT, 10th November, 1966; Vol. 735, c. 1541.] I hope that it is not presumptuous for me to say so, but I think that the quality of the contributions to this debate have indicated how seriously hon. Members have pondered this subject and how deeply we are all aware of the significance of the outcome, whatever it may be, of the movement towards European unity which once more has been set in train.

This is not only a matter of supreme importance, but one that is pre-eminent in any discussion, not only about the future of Europe but about the future well-being of our own country. Nowadays, whenever any major policy decision is being taken—whether on industrial policy, agricultural policy or political policy—the question that is invariably asked is whether Europe will continue divided into two, with all the weaknesses that flow from such a division, or whether it will come together to try to build up a greater economic strength and, possibly, ultimately achieve a wider unity of political purpose. The need for an answer to this question, which is now being so frequently asked, is becoming increasingly urgent as the two great economic groupings of Western Europe—the E.F.T.A. and the European Economic Community—have crystallised, and are moving to the final stages of their development.

E.F.T.A. will move to zero tariffs by 1st January next year. This is three years earlier than the period which was originally envisaged under the Stockholm Convention. The E.E.C. will also be moving towards, and in fact completing, the elimination of its internal tariffs, and the setting up of the external Customs tariff barrier around the Community by 1st July, 1968. This is 18 months earlier than the period envisaged under the Treaty of Rome.

Already, when one looks at the trade picture of Europe, one sees that the flow of trade is reflecting this hardening economic division within Europe. Each group is growing within itself, but each group is trading relatively less with the other group. Both these great economic groupings have brought advantages to the members of each group, but it is increasingly accepted throughout Europe—and accepted even by people who are opposed to Britain's entry into the Community—that neither of these two groups by itself is adequate.

Neither of these two groups by itself provides an adequate base for the newer technological industries. Nor does it provide an adequate base or home market for some of the older industries which now demand very long production runs. Neither of these two groups by itself provides the economic power which is needed for Europe to wield a greater influence in world affairs. Yet I think that it is widely recognised that if these two groups could overcome the difficulties, and could come together, there would be such scope for technical advance, and such opportunities for greater prosperity in Europe, that one could visualise Europe having a political authority and influence equivalent to that which is wielded today by the United States or the Soviet Union.

When the negotiations came to a halt in 1963, my right hon. Friend the Leader of the Opposition said that Britain would not turn her back on Europe, and that she would continue to work and strive for European unity. I think it can be said that in the intervening years—very largely as a result of the leadership given by the Conservative Party, but also as a result of the change in certain external features, the change in trade patterns within the Commonwealth, or the different outlook which exists among the E.F.T.A. countries—there has been a massive move of British public opinion in favour of seeing Britain enter the Community.

After two years of hesitation, although, of course, he remains covered with reservations and qualifications, and although he trails behind him the memories of that rather negative speech which he delivered in Bristol during the election, the Prime Minister last week made it clear that his ultimate intention and determination is to see this country enter the European Economic Community.

Mr. Russell Kerr (Feltham)

Under the right conditions.

Lord Balniel

Yes, under the right conditions.

Similar statements have been made by junior Ministers, usually when they were abroad, and out of earshot of the right hon. Member for Easington (Mr. Shinwell). The most notable of these speeches was that made by the present Foreign Secretary when he was in Stockholm. With great respect to him, I do not think those speeches carried much weight because there was not the association of the Prime Minister with them, which was regarded as crucial in the eyes of the Community. Now the Prime Minister has committed himself to achieving British entry into the European Economic Community. He has said, "We mean business." My hon. Friends and I take him at his word. We welcome the statement which he made, and will support him in any sincere efforts he makes to bring this country into the Community.

Apart from anything else the Prime Minister's statement is welcome because it will, we hope, halt the sense of frustration and exasperation which has been felt in this country in E.F.T.A. and among our friends in the Community, at what, for the past few years, has appeared to be an absence of any purpose in Britain's foreign policy towards Europe. The declaration of intention made last week, provided it is sincere, will have a psychological value in rebuilding the momentum towards European unity. This is of itself of value. If the five members of the Six who favour our entry into the Community are convinced of our desire to enter France will be more reluctant to exercise her veto for the second time.

The Foreign Secretary has said that he was pleased with the reception of the Prime Minister's statement in the European capitials. I hope that he is correct about this. I am not quite so sanguine. My impression is that a number of European capitals regard the statement as being little more than a skilful re-stating of the position which the Government held in the past. I hope that the sanguine approach of the Foreign Secretary is justified.

As I have said I hope that the Prime Minister's statement will rebuild the momentum towards European unity. But there is something far more important than this, namely, the question whether the Government have made a correct judgment of what is negotiable and what is not. For two years now Ministers have visited the capitals on the Continent and have come back, like the doves to Noah, reporting on the climate that they have found within the Community. By now the Government must have made an absolutely firm judgment on what is and what is not negotiable.

The Government must have decided what can be altered to suit Britain's convenience. Equally, the Government must have decided what is not negotiable—what the Community regards as being basic and immutable.

Last week the Government should have taken a bolder step. If they are sincere in their desire to enter the Community they should be more specific and should declare their acceptance of those features of the Community which they believe not to be negotiable. They should declare this not because they believe that these things are not negotiable but because they believe that these features, on balance, are in our interest.

There seem to me to be three things that the Government should do. First, they should declare unequivocally that they accept the Treaty of Rome. My right hon. Friend has said that a statement of this kind is the "key to success". I agree that there must be negotiations about voting rights and about the financial obligations which accrue to a new member. These are mere technicalities which can easily be resolved, but it would have helped us along the way which the Prime Minister now says that he wants to travel if he could have made a much more open declaration of the willingness of this country to sign the Treaty of Rome.

In answer to a supplementary question by the Leader of the Liberal Party, the right hon. Gentleman made a declaration somewhat of this nature. It is a pity that it was drawn out of him in answer to a supplementary rather than made in his original statement. In the past, we have always hoped and prayed that no one read the Prime Minister's supplementary answers.

However, I noticed again today that, in the Foreign Secretary's speech, there was only a very qualified acceptance of the Treaty of Rome—

Mr. George Brown indicated dissent.

Lord Balniel

The right hon. Gentleman shakes his head, but, if I am wrong, I hope that the Chancellor of the Duchy will correct me.

Second, we believe that the Government should declare that they accept the elimination of the internal tariffs and the setting up of the common external tariff barrier. The momentum along these lines within the Community has been remarkable.

In spite of all the disputes and the halts along the way, the internal tariff barrier is to be eliminated and the external Customs barrier will be completed by 1st July, 1968–18 months before the date envisaged under the Treaty.

On this date, all the internal tariffs, which used to criss-cross the frontiers of the countries of Central Europe will have been completely eliminated. Once that date is reached and passed, there will be a closer and closer economic integration and interdependence within the Community.

One is living in a fool's world if one imagines that, after all the sacrifices and effort which have gone into developing the Community thus far, it will still be a negotiable item. Of course there must be negotiations on—

Mr. George Brown

What is a negotiable item?

Lord Balniel

One must accept the elimination of the internal tariffs and the setting up of a common external tariff barrier. I can accept that there must be negotiations—[Interruption.] I am saying that the Government should have accepted this. It is true that the Foreign Secretary did not refer to this, but it is one of the items which the Government would have been wise positively to have gone out of their way to accept—

Mr. Brown

Is the noble Lord aware that E.F.T.A. is ahead of the E.E.C. in this respect—[HON. MEMBERS: "He just told us that."] That is right, but that being so, this cannot therefore be a problem for us.

Lord Balniel

Then why not say so? I accept that there will have to be negotiations about ending individual tariffs. Transitional arrangements must be made to ease the impact on certain of our industries.

But I repeat that I should have thought that, if the Government were sincere in their efforts to enter the Community, they would have been wise positively to go out of their way to emphasise their acceptance of the basic structure of the Community, which involves the elimination of internal tariffs and the acceptance of the setting up of the common external tariff barrier. The Government are also perfectly entitled, in the same breath, to say that they hope that the Kennedy Round will be a resounding success and that these common external tariffs will be as low as is feasible.

Thirdly, we should accept the basic principles of the common agricultural policy. In this matter there must, of course, be a substantial amount of negotiation. We must negotiate a system of price reviews; transitional arrangements; target prices and arrangements for the access of certain Commonwealth food products into the Community. This is a sphere which must be examined product by product. One hopes though that the negotiations will be far simpler than they were in 1962 and 1963, because by now the Community has established unified target prices for 90 per cent. of its agricultural products. Although the negotiations on this aspect of the Community are of immense importance, they should be simpler to undertake than they were in those years.

Basically, our position is that we believe that British agriculture stands to gain more than it stands to lose from entry into the Community. We accept, though, that certain changes in production patterns will have to be made. Acceptance of the common agricultural polciy seems to me to involve bigger problems in regard to the balance of payments and the cost of living than it does for agriculture itself. My impression is that British agriculture is fully capable of standing up to the competition which it will have to face when we enter the Community.

The Government say that if they announced these matters in advance they would be weakening their hand. I do not accept that argument. The issues about which I have been talking are not items for negotiation. They are the basic principles of the Community.

The acceptance of the Treaty of Rome; the elemination of internal tariff barriers; the setting up of a common external tariff barrier; the transfer to a new agricultural system, away from a system based on deficiency payments and subsidies, to a system based on levies and intervention prices—these are the basic principles of the Community and they are not negotiable.

I turn to those items which I believe are negotiable. I agree with my hon. Friend the Member for Saffron Walden (Mr. Kirk), who queried whether the Government had judged correctly the time scale for these negotiations. It seems to me that the shortest possible time scale for joining the Community is about three years; one year for preliminary talks, one for detailed negotiations and one for the ratification by the various Parliaments. [An HON. MEMBER: "Too long."] That may be considered too long a period, but there are various other reasons why I doubt whether immediate negotiations are feasible. For example, the French outlook remains absolutely delphic in its obscurity. The Community itself is engaged in formulating its joint approach to the Kennedy Round. This joint approach is a massive undertaking which could do much to bridge the gap with exists between E.F.T.A. and the Community. Also the Community might well be reluctant to open negotiations until after 1st July, 1968, when it has established its common market for industrial and agricultural prices.

I hope that when he speaks tomorrow the Prime Minister will define what he regards as being negotiable. It seems to me that although it has been hardly referred to in today's debate there will be a great deal of discussion about this country's indebtedness to the International Monetary Fund to the tune of £800 million, because, of course, the Community accepts certain obligations for member countries which are indebted in this way. There will also surely be discussions about the very structure of the Sterling Area and European support for it. There will have to be discussions about the transitional arrangements for agriculture, so that it will not be disrupted as it moves from one form of support to another.

I rather agree with my hon. Friend the Member for Saffron Walden that the degree to which we can obtain adequate transitional arrangements is a gauge of the Community's sincerity. There will also have to be discussions about the interests of the Commonwealth, which seem to be twofold. First, there are the interests of the under-developed Commonwealth countries, many of which, like Nigeria, are already seeking associate status with the Community. I would mention in passing that I hope that the Government regard themselves as having a very special responsibility for the position of Hong Kong. Then there are different and perhaps more difficult problems of the developed Commonwealth, particularly those facing New Zealand and her dairy products.

Finally, I turn to a different aspect of European unity which has been referred to many times in our debates—the desire to achieve not only economic unity but also to resolve the still unsettled issues of political unity and European defence. Economic unity seems to me to be inseparably linked with the more difficult process of creating political and defence unity over a much longer period of time. When the Prime Minister embarks on his discussions during the coming year, however much he may resist this, I think that he will find that many countries regard economic unity, political unity and defence as being indivisible.

My right hon. Friend the Member for Kinross and West Perthshire (Sir Alec Douglas-Home) spoke of the question of sovereignty and the doubt which exists in many people's minds on this. Those doubts were most eloquently expressed by my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith), and we fully understand them. My right hon. Friend went a long way towards meeting them, and rightly spoke about the desirability of keeping the Council of Ministers in being to control the Commission—with voting arrangements which reflect the political realities. If they do not reflect the political realities in a way which is acceptable to the major Powers the Community cannot exist. I think that this is the lesson which the Community has learned in the past year, and which has resulted in the compromise reached at Luxembourg.

As my right hon. Friend the Member for Streatham (Mr. Sandys) said, French foreign policy is concerned not only with the development of political institutions but also with the establishment within Europe of a defence which is not dependent on the United States.

It has always seemed to me to be paradoxical that General de Gaulle, who is more anxious than anyone else to diminish American economic and military influence in Europe, vetoed the integration of E.F.T.A. and the Community. In so doing he perpetuated the division of Europe. Her perpetuated the very weakness which is in fact the reason for American influence in Europe.

In the past few years we have watched with relief the easing of tension between the East and Western Europe. This relaxation has not come about by chance. It has been won for us by the strength of N.A.T.O. and the United States commitment. In my opinion, while the division of Germany continues the conditions of confidence do not yet exist which would enable us to dismantle N.A.T.O. and lower the shield of defence. Also, I suspect that while the division of Europe continues it will be Soviet policy to play off one group in Western Europe against another.

It seems to me absolutely inevitable that the question of defence will be raised in the Prime Minister's discussions during the coming year. The American commitment to Europe is of crucial importance and must be maintained. I hope, however, that the Prime Minister will give increasing attention to the importance of building up the European pillar of those two pillars of Western defence to which President Kennedy used to refer. If the question of a unified European command which is compatible with N.A.T.O. is raised in the discussions during the coming year, I hope that the Prime Minister will not reject it out of hand.

Finally I would say this—if the Prime Minister is sincere in his desire to achieve European unity; if he is prepared to accept the basic principles of the treaty and the Community; if he now shares the idealism for the building up of European unity which has been worked for for so long by many other people in all countries in Europe, he will have our support and our best wishes in the negotiations which lie in front of him.

9.27 p.m.

The Chancellor of the Duchy of Lancaster (Mr. George Thomson)

We are now at the halfway stage in what is regarded, I think, by general agreement as a very important debate. Indeed, if it is to be judged by the number of hon. Members who have been seeking to speak, it is one of the most important debates that we have had in this Parliament or are likely to have in the years that lie ahead.

I agree with the noble Lord the Member for Hertford (Lord Balniel) that it has been an outstandingly good debate, and a very good-natured debate despite the sincerely held and deep differences that run through the arguments about the question of the British accession to a wider European economic community. The differences on this subject, as we have become familiar in this House over recent years, tend to run across the Floor of the House rather than between the parties, and it has been our experience that we often get our best debates when we have a subject of such a searching character.

I stand here making a progress report on my part of the probings in which my right hon. Friend and I have been taking part since the General Election. The proposal now before the House for the Prime Minister and the Foreign Secretary to consult with the heads of Government of both the Community and E.F.T.A. follows directly, I think, from the preliminary work undertaken during the last few months, during which my right hon. Friend and I have had the opportunity to talk with the representatives of all the Governments of E.F.T.A. and the E.E.C.

I will summarise what we found. Briefly, it comes to this. First, the operations that have taken place so far have served to convince the Governments of the Economic Community of the sincerity of our desire to find means consistent with our general interests to join a wider European Economic Community. Secondly, we have succeeded in creating a greater degree of understanding about the general nature of some of the problems which we face in seeking entry. Equally, on the other side we have succeeded in getting better understanding of some of the problems of the members of both E.F.T.A. and E.E.C. in seeking to widen the Community. Finally, I should like to report to the House that we emerge from this preliminary stage of our explorations with a profound conviction of the degree of support which we enjoy in this mission upon which we have set our feet.

The right hon. Member for Streatham (Mr. Sandys) emphasised a very important consideration when he said that we must obtain from members of the Six not merely acquiescence but positive support for our entry. I should therefore like to tell him and the House that one of the things which greatly encouraged me during the part which I played in these earlier talks was exactly the degree to which a number of Governments were willing strongly to support British entry and the degree to which they themselves have started to study ways and means of finding a solution to some of our special problems and difficulties.

Mr. J. Bruce-Gardyne (South Angus)

When the right hon. Gentleman talks about the degree of support, is he including the French Government? That is extremely important.

Mr. Thomson

I prefer to keep to the description which I have just given and which is directly related to what the right hon. Member for Streatham was saying. I think that this is a very important element in the next stage of these explorations.

This is a two-day debate and there are speeches by the Prime Minister and the First Secretary to come tomorrow, as well as the speech which we have heard today from my right hon. Friend the Foreign Secretary, and I therefore see my duty in the debate as trying as best I can to answer a number of points which have been raised during today's discussion rather than myself to seek to make another general speech on the problems associated with British membership of the Common Market.

I therefore come immediately to the issue raised by the right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home) and taken up again by his noble Friend the Member for Hertford and also raised by other hon. Members. This is the question of the Government's attitude towards the Treaty of Rome. The right hon. Gentleman asked whether the Government accepted the Treaty of Rome as it stood, and I think that he was anxious for some clarification in his own mind of what had been said by the Prime Minister and by the Foreign Secretary on this matter. He said that the first question which my right hon. Friends were likely to be asked when they set off on their journeys was exactly this, and I do not dissent from that proposition. He went on to say that unless the answer was "Yes". no further questions would be asked.

My answer to the right hon. Gentleman is that I cannot see that there is any ambiguity about the Prime Minister's statement on this matter which he made last Thursday. The noble Lord made the odd complaint, which is probably too subtle for anybody outside the House, that the statement came in answer to a supplementary question rather than in a main Answer. Perhaps he will accept my assurance that the words which the Prime Minister used in answer to the Leader of the Liberal Party were very carefully chosen as were the words used by my right hon. Friend this afternoon. The right hon. Gentleman is absolutely right and this is a crucial question, and he will therefore excuse me if I repeat exactly what the Foreign Secretary said at the beginning of the debate, because it is important that it should be firmly on the record. He said: We do not believe that the Treaty of Rome need be an obstacle in itself. The Government would be prepared to accept the Treaty if our problems can be dealt with satisfactorily, whether through adaptations of the arrangements made under the Treaty, or in any other acceptable manner. I do not see what could be clearer than that, when one is in a period of exploration which we all hope will lead to very fateful negotiations involving the major interests of this country. It is easy from Opposition benches—we have had ample experience of this—to disregard the necessity of negotiations, but it is important that we do not give away more of our position on these matters than is necessary at this stage.

It will already have been observed that when the Prime Minister spoke of accepting the Treaty of Rome, subject to the necessary adjustments consequent upon the accession of a new member, he was quoting almost directly, certainly he was reflecting pretty faithfully, the words of Article 237 of the treaty. This is the article describing the procedure for new members. I can also tell the House that it is the reason why it is incorrect to talk, as I am afraid many of us do from time to time, of signing the Treaty of Rome. The treaty is not something which can be signed on the dotted line because there is no dotted line attached to it. There has to be an agreement under the terms of Article 237. My right hon. Friend's words in this matter were carefully chosen and were correct in the circumstances.

Sir Alec Douglas-Home

This is very important, as the right hon. Gentleman said. One of the odd things about this Government is that they can never say "yes". It is a very strange thing—

Mr. George Brown

It is not a question of saying "yes".

Sir Alec Douglas-Home

Does this mean that the Government accept the basic rules of the Treaty of Rome?

Mr. Thomson

There are certain matters upon which a Government, like any young lady, is very sensible not to answer with a downright "yes".

Mr. Miscampbell

Does the right hon. Member know of any case of a young lady getting married who did not say "yes"?

Mr. Thomson

This rather discourages one from exercising the courtesy of giving way when time is short at the end of a debate.

I wanted to go on to the very important matters raised by the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith), by the hon. Gentleman the Member for Burton (Mr. Jennings) and by my hon. Friends the Member for Salford, West (Mr. Orme) and Wolverhampton, North-East (Mrs. Renée Short). These related to how the powers of Parliament would be affected under the institutions of the Community, and also to the general question of sovereignty.

It is always a delight to listen to the right hon. and learned Gentleman. He brings such a flourish of almost 18th century oratory to this question that I could almost imagine myself sitting, not in the British House of Commons, but in the Scottish Parliament House in 1707, listening to the catastrophes which would follow the loss of national sovereignty for Scotland.

I would like to explain to the House how we look upon these very important issues. It is true that under the Treaty the Commission has certain powers in areas expressly delegated to it under the Treaty or by the Council of Ministers. But, and this should be remembered, the final power in the E.E.C. is firmly vested in the Council of Ministers, and national representatives on the Council are responsible to their own national Parliaments. The right hon. and learned Gentleman also referred to the political or federal organisation being built upon the foundations of the E.E.C.

It is important to say at the start that the plain and simple fact is that an acceptance of the Treaty of Rome, which is what we are debating here, does not involve a commitment to political federation or political organisation of any kind. My hon. Friend the Member for Fife, West (Mr. William Hamilton) was quite right to say that one cannot wholly separate economics from politics in matters like this, and it would be quite wrong to seek to pretend that one could do so.

We know this from our own experience with a wide variety of organisations. One can think of a number of economic organisations, of which we are members such as E.F.T.A. and particularly G.A.T.T., where membership of a purely economic organisation has very important political implications for us, and has limitations on our political as well as our economic sovereignty. These are limitations which we gladly accept in terms of the general, national and international interests. In my view, one of the strongest arguments for seeking to enter a wider European Economic Community is precisely that, apart from the substantial economic advantages, this is the best way in which we can make the most of Britain's political influence in Western Europe and, indeed, over a wider range of world affairs.

My hon. Friend the Member for Fife, West remarked, characteristically, that there was no such thing as political sovereignty even for a super-state like the United States. In the course of my researches for this debate I came across an interesting quotation on this matter from one of the early Common Market debates. It is a quotation from my right hon. Friend the Prime Minister. He said The whole history of political progress is a history of gradual abandonment of national sovereignty … One cannot talk about world government in one breath and then start drooling about the need to preserve national sovereignty in the next … The question is not whether sovereignty remains absolute or not, but in what way one is prepared to sacrifice sovereignty, to whom and for what purpose. That is the real issue before us. The question is whether any proposed surrender of sovereignty will advance or retard our progress to the kind of world we all want to see."—[OFFICIAL REPORT, 3rd August, 1961; Vol. 645, c. 1667.] My right hon. Friend has been charged in this debate with having changed his mind, although I must say that that seems a sensible thing to be charged with if one is facing problems which have been changing their nature. But on this very important aspect of the Common Market controversy my right hon. Friend has been absolutely consistent and has provided the answer to the right hon. Gentleman on the question of sovereignty.

A number of Members, including the right hon. Member for Kinross and West Perthshire, mentioned my right hon. Friend's proposal—in my view, an imaginative proposal—in his Guildhall speech of a drive to create a new technological community to pool within Europe the know-how and applied skills of Britain and other fellow European nations. This is a problem central to the whole future of Europe and very closely related to the questions under discussion today.

Unless the advanced technology in Europe can develop industrially across international frontiers, then within this century certainly either Europe will be an under-developed area compared with the Soviet Union, on the one side, and the United States, on the other, or Europe's countries will individually be in the position of technological satellites of one of the super powers and dependent on them for their access to the techniques on which modern living standards increasingly depend.

This is a problem which has been causing a great deal of concern to European Governments generally. For example, Signor Fanfani, the Italian Foreign Minister, has recently put forward proposals for technological co-operation in Europe or between Europe and the United States. These are being studied closely by the Departments concerned in Whitehall. We hope to be in a position to give a considered reply to them when the subject is discussed at the forthcoming Ministerial meeting of N.A.T.O. in December.

However, on this aspect of the European debate, it is very fashionable to talk about a transatlantic technological gap. It seems to me that this is a somewhat misleading concept if one means by "technological gap" a great gap in the scientific and technological "know-how" of the United States compared with what exists on this side of the Atlantic. For example, I think that Britain can fairly claim to lead the world in certain technological fields—nuclear reactors, desalination, hovercraft—and any technological gap which exists in those fields is between Britain and other countries.

Where the real gap exists, and the one to which we should apply our thoughts and attention, is in the ability of Britain and other European countries, confined within their own national boundaries, to achieve a large enough form of industrial organisation, a big enough base for research and development, a big enough home market for the economies of scale and long production lines to put us on a competitive footing with the Americans. This is the real gap. It can be partially, but only partially, filled by inter-Governmental co-operation of the kind which we have in various fields with Franch, for example.

But what an exciting and historic breakthrough it would be if we could achieve the Prime Minister's vision of a European technological community with European-wide industries no longer constricted for the purposes of research, development and salesmanship within their narrow national boundaries. If this could be achieved, it would add a new dimension to the possibilities of European integration.

Mr. Eldon Griffiths

Before the right hon. Gentleman ascribes to the Prime Minister all the credit for the European technological community, will he recognise that I have with me a little policy paper produced by my party six months ago using precisely that term and that we would be very glad to lend it to the Prime Minister?

Mr. Thomson

I was not claiming any monopoly of virtue in the matter. I mentioned Signor Fanfani, although I recollect the interesting political occasion a few years ago when the Prime Minister, then Leader of the Opposition, succeeded within a fortnight in converting the party opposite to the technological revolution. Everybody is involved in this and I am not trying to make too much of a point about it. The point is to make progress.

The noble Lord the Member for Hertford mentioned the Kennedy Round, and I was glad that he did, because this is very relevant to the attempts that we are making to find out the possibilities for entry into the European Economic Community. It is important for us to emphasise that this initiative for entry into the Common Market does not imply in any way a lessened interest on the part of Her Majesty's Government in the Kennedy Round. On the contrary, as my right hon. Friend the Prime Minister said on 10th November, when he and my right hon. Friend the Foreign Secretary talk to the heads of Government of the Six, they will stress the vital importance of a forthcoming attitude in the Kennedy Round negotiations. This remains of the highest importance to this country as a world trading nation.

In Europe, the Kennedy Round negotiations should result in a significant reduction in the barriers at present dividing the two groups, but they also present the best opportunity that we have yet had to reduce the barriers to trade throughout the world as a whole. If we fail to achieve a successful settlement, the multilateral system which has permitted a vast expansion of trade since the end of the Second World War will suffer a serious blow.

Our possible entry into the Common Market will not diminish our interest in this continued expansion on a worldwide basis. Our trade is worldwide, and this has been emphasised by a number of hon. Members in the debate. So, of course, is the trade of the European Economic Community. They stand to gain, as do we and, indeed, all the participants, from a successful outcome of the Kennedy Round. I have in mind particularly our trade and the trade of other European countries with the United States and the rest of the world, and especially with developing countries. I also have in mind the possibilities of increased trade with Eastern European countries, some of whom are directly associated with Kennedy Round negotiations.

My hon. Friends the Members for Wolverhampton, North-East and Salford, West both raised the important question of our links with Eastern Europe. I was grateful for the kind words used by my hon. Friend the Member for Wolverhampton, North-East about the Government's efforts to improve economic and other relationships with the countries of Eastern Europe. It is always a pleasure-able experience to enjoy kind words from my hon. Friend.

My hon. Friend misunderstands the position, however, if she fears, as apparently she did, that Britain's entry into the Community would in any way interfere with this helpful trend in relations between Britain and the countries of Eastern Europe. In my view, the position is quite the reverse. All the countries of the Six are engaged, as we are, in improving our relations with Eastern Europe. This is one of the more hopeful developments in our troubled world. France has been playing a notable part in this, and my hon. Friend mentioned the increased volume of trade that has been taking place between West Germany and the countries of Eastern Europe.

There is, however, one point that I would like to make to my hon. Friend, because I think that there is a misunderstanding about it. There is simply no question of our being able to substitute for possible increases in the volume of trade with the countries of Western Europe trade with the countries of Eastern Europe. Our total trade with Eastern Europe, including the Soviet Union, despite the welcome increases that have been taking place over recent years, still amounts to only 8 per cent. of our total trade. That puts the matter in the perspective in which we have to see it.

The best way in which we can make the most of the trading opportunities represented by the development plans of the Eastern European countries, to which my hon. Friend drew attention, is by strengthening and making more competitive our own economic base at home. This, of course, is one of the strong arguments which we feel for seeking the means of entry into the European Common Market.

My hon. Friend the Member for Wolverhampton, North-East also appeared to be arguing—and other Members made this point—that one of the reasons for staying out of the Community is that if we do succeed in getting inside it is going to be, in her words, "very rough and tough". I have no doubt it is going to be rough and tough, but I think that what the House and the country ought to be clear about is that it will be even rougher and tougher for us as a nation if we are not able successfully to get membership. There is no going it alone economically in the world as it is today.

A number of hon. Members who feel doubtful about the wisdom of our approach to the Community have pointed out that it is clear that a substantial price will have to be paid for British entry—in balance of payments terms and in other ways. This is, of course, certainly true, but here again, what is vitally important to remember in conducting this argument is that it is very important to bear in mind that whatever price will have to be paid for going in a big price would also have to be paid if we were not able to go in. That is exactly the purpose of the visits which my right hon. Friends will be making and of their talks with their E.F.T.A. colleagues, to try to find out more precisely than we can know at the moment what is the price in political and economic terms of going in and also what is the political and economic price of staying out, because only in that way can this country and this Government and this Parliament finally decide where the balance of advantage really lies.

The noble Lord the Member for Hertford asked me if I could give him some further clarification in regard to the timetable. I think first of all it is fair to say that there is a certain dilemma here if we are to maintain the momentum of what we have set on foot—a point mentioned by the right hon. Gentleman the Member for Streatham last Thursday, and the difficulties which the noble Lord described about finalising a timetable which is practicable. Certainly it is right that the Kennedy Round which I have been referring to is going to be a preoccupation of the economic departments of all the parties concerned for the months immediately ahead, but I must say that when he described in more detail his ideas of the timetable it did not seem to me to offer any particular corrective or a serious inconsistency in the kind of ideas we have in mind following what we hope will be a successful outcome of the travels of the Prime Minister and the Foreign Secretary.

My right hon. Friend the Member for Bassetlaw (Mr. Bellenger) made a very important point, that we must maintain full consultation between the Government and the Members of this House on these very complex issues on the question of British membership of the Economic Community. It will be the endeavour of the Government to help keep hon. Members on both sides of the House informed about what is happening, so that they themselves can inform their constituencies and can deal with the various approaches which, no doubt, will be made to them. I think that my hon. Friend the Member for Fife, West was absolutely right in saying that what was needed here, parallel with the Government's efforts, was a really massive campaign of education and information about these issues so that we have a fully informed public opinion keeping in step with the developments which are taking place at the Governmental level.

During the next two or three months the Prime Minister and the Foreign Secretary are going to meet the heads of Governments or the representatives of the heads of Governments of all their 12 European neighbours. In addition to that they are going to have two meetings with the leaders of the Soviet Union. My right hon. Friend the Foreign Secretary is meeting the Soviet Foreign Secretary, Mr. Gromyko, within a few days, and my right hon. Friend the Prime Minister will be welcoming the Soviet Prime Minister to this country in the New Year. Taken together the meetings with the heads of Government of Western Europe and the talks with the Soviet leaders represent a period of intense and demanding diplomatic effort. I do not think that it is too much to describe what my right hon. Friends are undertaking as one of the most momentous missions undertaken on behalf of this country. The results which they achieve in their talks may well affect the shape of Europe and Britain's rôle within Europe for the rest of the century and probably beyond.

Mr. A. Woodburn (Clackmannan and East Stirlingshire)

The Continental people become a little disturbed when we talk purely in economic terms. It was this country which inspired Europe with the idea of having a united Europe from the point of view of preserving peace and building a greater community. I hope that our country will not appear to be "on the make" all the time, trying to think of economic advantages, but that we will have in mind the idea of a unified Europe and a unified world.

Mr. Thomson

I agree with the spirit of what my right hon. Friend the Member for East Stirlingshire (Mr. Woodburn) has said, but I am trying to reply to particular matters which have been raised in the debate, otherwise I might have made that more general point. However, I am sure that he will not have reason to complain about the speech made by my right hon. Friend the Foreign Secretary in that respect earlier in the debate.

It is true that we have to get across to the countries on the mainland of Europe not only that we have a great joint economic enterprise here but that, through it, we will all be able to play a more constructive rôle in world affairs as a whole, not least in helping the developing countries.

What my right hon. Friend the Prime Minister and my right hon. Friend the Foreign Secretary are about to do is something which can fairly be described as a bold and determined bid to find the means to end the deepening economic division between the E.F.T.A. and the countries of the E.E.C., and to do it in a way which does not erect any fresh barriers between Western Europe and, with it, the countries of Eastern Europe, from the developing countries in other parts of the world.

My impression of the debate so far is that, despite the doubts that have been expressed in different quarters of the House, there has been what the noble Lord himself described as an historic shift of public opinion about British membership of the European Economic Community. That was clearly reflected in a number of the speeches made today. It also seemed to me that, despite the sincere doubts which are held in various quarters of the House and despite the differing anxieties, at this mid-passage in our debate, the House as a whole wishes the Prime Minister and the Foreign Secretary a successful outcome to their journeys and the talks upon which they are about to embark.

Mr. George Lawson (Lord Commissioner of the Treasury)

I beg to ask leave to withdraw the Motion.

Motion, by leave, withdrawn.