HC Deb 09 March 1967 vol 742 cc1754-61
The Prime Minister (Mr. Harold Wilson)

With permission, Mr. Speaker, I will now answer Questions Q1 and Q12.

My right hon. Friend the Foreign Secretary and I visited Luxembourg on 7th and 8th of March for discussions with the Luxembourg Prime Minister and Foreign Minister.

We covered a range of subjects, financial and economic, arising in the context of eventual British membership of the European Economic Community.

My right hon. Friend and I are most grateful to the Luxembourg Ministers for the very friendly and co-operative spirit in which they approached these discussions, and for the expert and constructive way in which they examined the problems with us.

We also had the opportunity in Luxembourg of a useful talk with the acting President and other members of the High Authority of the European Coal and Steel Community.

This concludes the series of visits to Heads of Government of the Six in which my right hon. Friend and I have been exploring whether the conditions exist—or do not exist—for fruitful negotiations leading to British membership of the European Economic Community.

As I said at the half-way stage, we—and I believe our friends in the six Governments—have found these high level visits of the greatest value in defining and clarifying the issues involved.

It is now for the Government to decide on their future course of action in the light of the information collected during these discussions. Thereafter, a statement will be made to the House.

Mr. Marten

Referring to the conditions which the Prime Minister has mentioned, bearing in mind that the Government were elected to honour the pledges which the Labour Party gave at election time, can the right hon. Gentleman give a promise that he will honour the pledges which he gave about the Common Market in his Bristol speech on 8th March, 1966, when—

Mr. Speaker

Order. Supplementary questions must be reasonably brief.

The Prime Minister

I thought that that was a very good speech [HON. MEMBERS: "Oh."] We are all very narcissistic about our speeches, as I have had occasion to say before. Some of the central themes of that speech, naturally, have formed part of the fabric of our discussions with representatives of the Common Market countries. One of the problems which I had was that, during the 1964 election, the then Prime Minister described the question of British entry into the Common Market as a "dead duck", and I had to disillusion them.

Sir J. Langford-Holt

During the Prime Minister's conversations, did he point out to the Heads of Government that, although the large majority of people in this country are anxious that we should join the Common Market on the right terms—[HON. MEMBERS: "HOW do you know?"] Did he take the opportunity of pointing out that we could not go on kicking our heels on the doorstep of Europe indefinitely, waiting, perhaps, for the change of mind of one person?

The Prime Minister

I think that the very serious question raised by the hon. Gentleman is one which is very much in the minds of the Heads of Government in Europe with whom we have had discussions. I think that we all felt that the right hon. Member for Bexley (Mr. Heath) was treated intolerably in this matter, and that there is a general feeling among those with whom we have been speaking that we must have a much speedier conclusion this time, and that, if the conditions are right, we must not lose the momentum which has been created over the past few months.

Mr. Anderson

While congratulating my right hon. Friend on his tremendous personal success in his visits to the capitals of the Six, may I ask whether he does not agree that the interim period following the Luxembourg visit is now vital? What specific measures has he in mind for maintaining this momentum?

The Prime Minister

While thanking my hon. Friend for his unsolicited and unjustified testimonial, what I have said is that it is important to have established this relationship at senior Ministerial level. Looking back on the previous occasion, the whole matter was treated rather as an operation in grocery than as an operation in politics. It would have been better if the then Prime Minister had personally identified himself in the talks in the way that my right hon. Friend and I have. However, I believe that we have been able to identify the main political and economic problems which have still to be solved.

So far as the next stage is concerned, I agree with my hon. Friend about the need not to lose momentum. We shall make a statement in the House as soon as practicably possible after Easter. I am sure that the whole House will treat the subject seriously, whatever view is taken, and will recognise that it is a momentous decision which has to be made, with such a wealth of facts and information as a result of these tours which must be considered very deeply and carefully by the Government before a decision is announced.

Mr. Heath

Is the Prime Minister aware that it is reported in the Press today that he and the Foreign Secretary gave an undertaking during their Luxembourg conversations that Article 108 of the Treaty of Rome would never be invoked in case of difficulties with sterling should we become a member of the Community? Can the right hon. Gentleman say whether he gave such an undertaking?

The Prime Minister

The right hon. Gentleman did not get it quite right. He knows Article 108 very well. There is a phrase in it which says, in effect, that where balance of payments difficulties arise, either through inherent balance of payments difficulties or through the type of currency held by the particular country, certain things would follow. There was great anxiety among our friends in Europe that difficulties arising from external operations of sterling, of a non-European character and not related to the balance of payments, could plunge the members of the Community into serious difficulties.

Our undertaking was to the effect that we would not propose to invoke that part of the Article which talked about the type of currency involved, to deal with a situation where sterling might be in difficulties even though the balance of payments was all right, through actions in sterling balances or the wider aspects of sterling. We thought it right to give this undertaking. The right hon. Gentleman will recall that when Italy was in difficulties Article 108 was not invoked, although in that case it was a European question.

Mr. Thorpe

As one who hopes that the right hon. Gentleman will be successful in his application for Britain to join the Common Market, may I point out to him that, should he at any time feel inhibited by election speeches, will he fortify himself with the knowledge that the Conservative Party in 1959, violently opposed going into Europe, and then stood on its head, albeit too late, to try to get in in 1962?

Hon. Members

Oh.

Mr. Speaker

Order. Some latitude must be given to the leader of a party.

Mr. Thorpe

I wish to ask the Prime Minister a question arising out of a supplementary question from the Leader of the Conservative Party. Does he not think that it would be very difficult to distinguish between internal and external stresses upon sterling for the purposes of Article 108? Secondly, does not he feel that great initiative might be taken by Her Majesty's Government by advocating at this stage the creation of a new European reserve currency?

The Prime Minister

On the long preambular question of the hon. Gentleman, it is a fact that I have had occasion to remark in previous debates that the Conservative Party fought the 1959 election on the basis of statements violently opposed to any discussions with Europe. I should be happy to requote these statements. In 1964, as I have said, the Conservatives said that it was a dead duck. We have a mandate from the electorate, on the basis of what we put in our election manifesto, to enter into negotiations if we are satisfied that adequate terms can be secured.

On the Question of Article 108, in my opinion it is possible to distinguish between internal and external stresses, despite the difficulties referred to by the hon. Gentleman. The problem is a little unreal, because every problem of balance of payments difficulties—whether it be in the case of Italy, who was a member of the Common Market, or Britain, two years ago or last year, who was not a member—has been dealt with by consortium action by European and non-European countries.

The right way to deal with this problem is through the I.M.F., the Basle Club and such bodies. We should be prepared to invoke Article 108, but not in the circumstances that I have indicated. We should be prepared, if we became a member of the Community, to discuss regularly with other members any question of currency reform.

Mr. Maxwell

Does not my right hon. Friend agree that as a result of his and the Foreign Secretary's visit to the countries of the Six every one of them is now firmly convinced of our intention to set into the Common Market if the terms are right? Will he bear in mind that we need Germany's enthusiastic support for our application and, therefore, be more helpful to them on the question of offset costs—

Mr. Speaker

Order. We cannot have speeches at Question Time. Questions must be brief. The hon. Member has asked enough.

The Prime Minister

I think that the Heads of Government of the Six are fully convinced of our determination, as described in the statement of 10th November, provided that we can get over the outstanding difficulties, which we have identified and to some extent narrowed. It is not right to link the question of offset costs to this matter, or to seek to bribe our way into Europe. The German Government are fully aware of the advantages for Europe as well as Germany and Britain of Britain's entry, if we can get the right terms.

Mrs. Short

Can my right hon. Friend assure the House that he and his right hon. Friend will discuss with the leaders of the Commonwealth all the information that he has obtained on this tour of the Six, and also discuss this with the E.F.T.A. countries and report their reactions back to us before any decision is made? Does not he think that he should now embark on a tour of Eastern Europe, in case—

Mr. Speaker

Order. I must insist that Questions are kept reasonably short.

The Prime Minister

My hon. Friend will be aware that, following each visit, we have communicated full details of our discussions to the E.F.T.A. countries as well as to the E.E.C. countries and the Commonwealth. This process of consultation will continue during the very important period that now lies ahead.

As for communication with Eastern Europe, as my hon. Friend knows I have had opportunities of discussing this and broader questions fully this year and in two visits to Moscow last year with the Head of the Soviet Government, and their position and ours is well understood in relation to these problems.

Sir Alec Douglas-Home

The Prime Minister has truly said that the Government have been able to identify the main political and economic problems involved, but this House is not and will not be informed about them before we have a chance to debate this matter, let us say, in May. Will he therefore consider producing a White Paper before the debate, if he can?

The Prime Minister

I certainly recognise that this is of first importance. When we have analysed our impressions and have been able to go into all these questions, and the Government as a whole have considered them, the House should have the fullest information. It will be a matter for discussion how we do it. I am not sure that a White Paper is the right answer, but a full statement to the House in advance of the debate will be necessary so that the facts and considerations can be made available to the House. I envisage a full debate on this question.

Mr. Anderson

Can the Prime Minister say what support he had from the countries of the Common Market concerning the sterling area and for the statement in Europe to the effect that the £ would not be affected if Britain entered the Common Market?

The Prime Minister

If my hon. Friend is drawing on anything that appeared in the Press this morning, I believe that that is not an accurate account of what was said. We have made it clear throughout that the position of the £ as a currency depends upon the determination of the British Government and people to take the measures necessary to strengthen our balance of payments, which is now moving into surplus. This is the most important fact that Europe wanted to hear.

As for the Article 108 problem, which is a very complicated one, I have explained to the right hon. Gentleman that flurries in sterling, if such there be, arising not from our action or from the position in Europe, but from external factors, would not, we feel, justify us in invoking the words of Article 108 which I quoted in answer to the right hon. Gentleman's supplementary question.

Sir Harmar Nicholls

Is not the weakness in the undertaking given by the Prime Minister the fact that Europe knows that he cannot bind any future Government and that if we sign the Treaty of Rome the terms are as written and not as he gives undertakings upon them?

The Prime Minister

We debated the question of the Treaty of Rome and the present practice of the Treaty in the very full and, I believe, constructive debate which we had last November. So far as any treaty is concerned, it has always been the position, as we understood it when we were in opposition, that of course a treaty is binding on the country.

I have not envisaged yet the nightmare possibility of a Government headed by the hon. Member for Peterborough (Sir Harmar Nicholls). He has to hold his seat next time first. But, certainly, I would have thought that no treaty would be signed which is not acceptable to the House as a whole and we would not commend such a treaty to the House unless we felt that British and Commonwealth interests were adequately safeguarded. Given that, I believe that the Government would be able to sign with the full support of the House.

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