HC Deb 02 February 1967 vol 740 cc769-77

The following Question stood upon the Order Paper.


To ask the Prime Minister if he will make a statement about his official visit to Brussels.

The Prime Minister (Mr. Harold Wilson)

With permission, Mr. Speaker, I will now answer Question No. Q15.

My right hon. Friend the Foreign Secretary and I visited Brussels on 31st January to 1st February for discussions with the Belgian Prime Minister, the Foreign Minister and the Minister for European Affairs on the question of possible British entry into the European Economic Community. The discussions were cordial and businesslike. Among the subjects discussed were the problems raised for the United Kingdom by the Community's policies on agriculture, including the implications of the latter for the Commonwealth, and on the freedom of capital movements; as well as certain questions raised by our Belgian colleagues on monetary matters arising out of the international rôle of sterling and the sterling balances; and the consequences for the Community if the United Kingdom and other European countries become members of it. We also had a very full discussion on the technological aspects of European integration. We found the Belgian Ministers and ourselves very close to each other in our views. This meeting, as the other meetings so far in our series of visits to the capitals of the Six, was helpful both in identifying and also in narrowing the areas of difficulty.

We also had the opportunity in Brussels of a useful talk with the President of the EURATOM Commission, two of the Vice-Presidents of the E.E.C. Commission, and some of their colleagues. In this talk we benefited greatly from the expertise of the Commissioners.

My right hon. Friend and I are now at the half-way stage of our visits to the Six capitals. If I were to sum up our impressions, I would say that these first three visits have confirmed our conviction that we were right to make this personal high-level approach. We—and our friends in Europe—are now, I believe, far clearer in our minds about how the issues at stake could be resolved, given the necessary good will. We approach our remaining visits in the same spirit and we are confident that they will be equally helpful.

Mr. Marten

If the remaining visits go at the same tempo, what indication can the Prime Minister give of when formal application for entry would be made? Would it be in April, before or after a summit meeting? Second, with reference to the discussions on finance, will he say what the Belgian attitude was towards assistance to sterling under Article 108 of the Treaty if sterling got into difficulties?

The Prime Minister

It would be impossible at this stage to make any forecast in response to the first question the hon. Gentleman raises. I told the House that, when we had finished the talks, we would have to consider whether what we had discovered led us to believe that our essential interests could be adequately safeguarded by making such an application. Obviously, I cannot forecast a date or the relation to the timing of various events within the Six.

On the second point, there was no discussion about giving assistance to sterling. Our Belgian friends were as conscious as most people in other countries of the very robust strength of sterling. The discussion which was raised —here Article 108 was quoted; I think I quoted it myself—was on the problem of whether it would be possible for a member of the Community with a currency which is traded worldwide and which has banker's obligations as well, to be assimilated within the problems of the Six. We had a very long and useful discussion on that. We certainly did discuss Article 108, which is mainly related to balance of payments difficulties of an individual member and only in passing refers to currency difficulties.

Mrs. Renée Short

Did my right hon. Friend get any impression from the Belgian Ministers that the Belgian Government would be willing to support changes in any of the several clauses of the Treaty of Rome which are inimical to British interests and those of a Socialist-planned economy? Second, did he discuss with the Belgian Ministers the possibility of an approach to the countries of Eastern Europe on what their attitude would be if they, too, made an approach to join the Common Market?

The Prime Minister

On the first point, as I made clear in the House in November—I think that all our talks very much confirm this provisional conclusion—the Treaty of Rome itself is not and need not be a main obstacle to the problem of British entry. We have been discussing some of the specific problems, notably agriculture and one or two of the other problems, particularly agricultural finance regulations.

On the second point, the importance of, for example, greater technological strength in Europe, such as could result from our proposals, on hopes of getting a wider Europe both economically and politically, played a central part in our discussions in Paris and again in Brussels. This has been more and more one of the chief motifs of these discussions, so to that extent my hon. Friend can rest content. But I have not heard any suggestion at present that Eastern European countries wish to adhere to the Treaty of Rome.

Mr. Turton

In view of the Prime Minister's references to the position of sterling, will he make clear that we could in no circumstances abandon our position as banker for the overseas sterling area on which so much of our trade, both visible and invisible, depends?

The Prime Minister

What we have made clear is that the rôle of sterling not only in the banking capacity in relation to the sterling area, but also as a currency traded and accepted all over the world, could and should be a strength to Europe and not a weakness. This has been the basis on which we have discussed the problem, and I believe that there is more and more understanding of this situation.

Mr. Manuel

Will my right hon. Friend make perfectly clear that the present round of conversations is solely for finding out whether we could proceed to negotiations on the basis of the five principles laid down by the Annual Conference of the Labour Party?

The Prime Minister

Yes, Sir; on 10th November I said that the purpose of these talks was to see whether there was a basis for ultimate negotiation, and in the debate which followed I explained this. I have said several times from this Dispatch Box that we stand by the principles we have laid down, but I have said also that, of those five, two or three have now been very considerably eroded by the passage of events, not least, for example, the first one to which we attached great importance, namely, the question of the other E.F.T.A. countries. There were great difficulties, as the right hon. Gentleman the Leader of the Opposition recalls, about the E.F.T.A. neutrals. I do not believe that that any longer constitutes a difficulty, and the same applies to certain other aspects of the five principles.

Mr. Lubbock

What proposals did the Prime Minister make on technological co-operation between Great Britain and Europe, and were these proposals related to the machinery for Anglo-European co-operation or to particular projects?

The Prime Minister

In all our talks we were referring particularly to machinery for technological co-operation, with, of course, illustrations from specific cases such as the recent aircraft deal with France, computers and other important technological problems. But what we have had to make clear—I am sure that this is now understood—is that what hopes there are of technological co-operation as between Governments would be very limited in present circumstances and that the technological co-operation we foresee, whether through a special new community or mergers of the Communities or in any other way, could become a reality only between members of the same market. Technology and market must go together.

Mr. Henig

Could my right hon. Friend comment on the suggestion made in certain quarters that the correct relationship for Britain with the European Community ought to be that of association under Article 238? Was this suggestion put forward by any of the Governments to whom he has spoken, and what response did the British Government make?

The Prime Minister

I replied to this question at Question Time on Tuesday when I was specifically asked about our attitude to proposals for association. It would not be right for me to say what specific ideas were aired in the course of discussions, which, of course, have never been negotiations, or on the basis of trading or exchanging offers one for another.

Mr. Ian Lloyd

As the question of freedom of capital movement was raised on the initiative of the Belgians, and in view of the confidence the Prime Minister has expressed in the future of sterling, may I ask if he could give the House some indication of how optimistic a forecast he was able to give the Belgians on this issue? Was it D plus 10, D plus 50, or D plus 3,000?

The Prime Minister

There are no "Ds" at all in this. The hon. Gentleman may be confusing, because of the shorthand way in which I spoke, three separate issues. One was the question of the strength of sterling as a currency, of which the world is in no doubt. The second was the question of the institution, if I may use that phrase, of the sterling area, of sterling as a trading and banking currency, which causes concern to some members of the Six. The third point is the problems raised for Britain by the provisions for freedom of capital movement, particularly as regards portfolio investment.

The hon. Member is wrong to think that this matter was raised on the initiative of the Belgians. We made clear from the debate in the House—and the right hon. Member for Bexley (Mr. Heath) had this feeling when he was negotiating three or four years ago—that the problem of capital movement, if the Treaty of Rome is applied just like that to this country, with our special responsibilities, would be difficult, and needs to be overcome by some appropriate means.

Mr. Roebuck

Did the Prime Minister have any discussions with the Belgians about defence? Was the fact that the Common Market countries have conscription whereas we do not mentioned, and did he ask the Belgians whether they would assist him in putting pressure on the President of France to sign a test ban treaty?

The Prime Minister

No, Sir. Defence was not discussed and nor were conscription or a test ban treaty.

Mr. Heath

The Prime Minister mentioned the important position of the E.F.T.A. countries. Does that mean that discussions so far with the Governments and the Commission have shown him that they are all prepared for the other E.F.T.A. countries to become full members or associated with the Community at the same time as ourselves?

The Prime Minister

I think that the difficulties of three or four years ago about the neutrals have been overcome and, as the right hon. Gentleman knows, extended discussions have been going on with Austria which probably would have been inconceivable three or four years ago. That difficulty is overcome. One of the problems that some members of the Six have is not of opposition to the other E.F.T.A. countries as such, or to ourselves, but the feeling that they have now got the Community working as a compact agreement and piece of machinery, that it has come through many difficulties and is now running relatively smoothly. They see the great difficulties of reconstructing it to accomodate not Britain or any given E.F.T.A. country, but a considerable number of other countries. Some of them still fear the effect on the Community of that degree of widening. I have said that widening, so far from weakening the Community, would mean strength in our view.

Mr. Heffer

My right hon. Friend has said that the neutral countries no longer present a problem. Would he nevertheless indicate what discussions there have been on the question of our so-called special relations with the United States, and how far they are likely to affect our entry into the Common Market?

The Prime Minister

It will be clear that in these discussions, as I and my right hon. Friend have said in the capitals we have visited and in the House, we are speaking for Britain. We are in no sense interceding, negotiating or discussing on behalf of the other E.F.T.A. countries, which will make their own decisions and conduct their own negotiations. On the United States, I think I can say without breaching too far the confidentiality of the talks, that that matter has been raised to an infinitely smaller extent than at one time many of us would have felt likely.

Mr. Kershaw

Could the Prime Minister explain to those countries which complain of sterling being a world currency that if they managed their currency in a less restricted manner they could also have their currencies used as world reserve currencies?

The Prime Minister

I was not going to say anything quite so offensive, certainly not to my hosts in Brussels or elsewhere, because that does not apply in those countries. For something like 75 minutes I gave them an exposition on this problem which I would not wish to inflict on the House. I dealt with most relevant aspects, including the fact that certain European currencies are being encouraged to develop in a more worldwide sense. That will help their understanding of our problems and will, similarly, strengthen Europe as adherence to sterling of Europe would do.

Mr. Elystan Morgan

Could my right hon. Friend clarify his statement that the Treaty of Rome need not be an obstacle to our entry? Does that mean that we accept every word of the Treaty as it now stands, or that we accept only the main principles and would renegotiate some clauses?

The Prime Minister

I would recommend my hon. Friend to look up the exact words I used on 10th November and a subsequent date, and which I set out in considerably more detail in my speech at Strasbourg, a copy of which is in the Library. Of course amendments will be needed. They are provided for in Article 237, on admission of new members, consequential amendments relating to financial subscriptions, voting and the rest. Provided our essential British and Commonwealth interests can be met in some appropriate manner, I do not see the Treaty of Rome as an obstacle to our entry.

Sir Knox Cunningham

Can the Prime Minister indicate to the House what were the views of the Belgian Government on the Commonwealth, and particularly the special problem of New Zealand?

The Prime Minister

The hon. Gentleman can be absolutely assured that in all our discussions, as in the discussions four years ago, the special position of New Zealand was not only in our minds but in our discussions. I do not think that the hon. Gentleman need be in any doubt about the recognition of those problems by those with whom we have been talking.

Several Hon. Members


Mr. Speaker

Order. Mr. Heath, Business Question—

Mr. Blaker

On a point of order, Mr. Speaker. You will have observed that at Question Time today we got through only three Questions to the Prime Minister. I have the impression that that was largely due to the increasing length of the Answers by the Prime Minister. Would it not help to expedite Questions by cutting them down a bit?

Mr. James Griffiths

Further to that point of order, Mr. Speaker. May I call your attention to the fact that on one of those questions no fewer than three Front Bench Members opposite intervened?

Mr. Speaker

It is a general rule that if Answers and supplementary Questions are short we can get more Questions and Answers in. I am not prepared to distribute criticism or blame to either side for the fact that only three of the Prime Minister's Questions were answered. Mr. Heath—Business Question.

Mr. Bruce-Gardyne


Mr. Speaker

The House has a lot of business to do today. I hope that we shall not pursue points of order, taking up very precious time of a very precious institution.

Mr. Bruce-Gardyne

I appreciate that, Mr. Speaker, but there is an important point here. When the Prime Minister returned from Paris he declined to answer Questions about his visit at the end of Question Time and took up time during Question Time answering them. Today he has answered Questions about his visit to Brussels at the end of Question Time, and as a result there was a fuller flow of Questions without interrupting Question Time itself. Is it not more satisfactory that that system should be adopted on the occasions of his other visits to European capitals?

Mr. Speaker

I am sure that both Front Benches will take note of the hon. Gentleman's observation.