EUROPEAN COMMUNITIES (MEMBERSHIP)

HC Deb 08 May 1967 vol 746 cc1061-184

Mr. Speaker

Before the debate opens, I have a brief statement to make.

More than 120 hon. and right hon. Members have already indicated their wish to speak in this crucial debate. The House will appreciate how formidable is Mr. Speaker's task of selecting those whom to call. I have given, and shall give, much thought to ensuring that the debate shall be a balanced one.

I have selected the Amendment in the name of the right hon. Member for Thirsk and Malton (Mr. Turton) and the names of his hon. and right hon. Friends, and I shall call him to move it after the speeches from the two Front Benches. The selection of this Amendment in no way limits the debate.

3.31 p.m.

The Prime Minister (Mr. Harold Wilson)

I beg to move, That this House approves the statement contained in the Command Paper, Membership of the European Communities (Command Paper. No. 3269). I must ask for the indulgence of the House for the fact that this speech is likely to prove longer, though not exactly of Gladstonian dimensions, than any I would wish to inflict on hon. Members. But even at the risk of wearying the House I feel that at the outset of this important debate I should make available as much of the factual material as I can. I would rather be guilty of tiring or even boring the House than of failing to give all the facts, and the Government's judgments on these questions, which I think ought to be in the possession of the House.

It will be our purpose to make available to the House such further papers of an informative, even technical, nature as may be needed to cover some of the issues which are relevant to Britain's entry into the European Communities. The first of these papers was laid on Thursday by my right hon. Friends the Secretary of State for Scotland and the Minister of Agriculture.

First, I must refer to the Treaty of Rome. The White Paper repeats the statement that I made to the House on 10th November last.

In our discussions with the Heads of Governments of the Six it was, above all, with the practical working of the Treaty, of the Communities and of their institutions, that we were concerned, and I have complete confidence in commending to the House our view that, provided a reasonable solution to the problems to which I shall be referring can be found in the negotiations, we shall be ready to accept the Treaty with only such adjustments as are necessary and consequential on the accession of a new member.

As the House knows, the Communities—though today I shall be dealing principally with the European Economic Community—are evolving and dynamic. The Community today is already very different, different in its organisation, different in its practice, from the Community which right hon. Gentlemen sought to join four years ago, and by the early 'seventies, five years' hence, its evolution will have been carried a great deal further. Once Britain is a member, we shall be able, as an equal partner, in our own interest and equally in the interest of the Community to help determine the direction, the pace and the developing institutional arrangements of the Community.

That is why I said last Tuesday that some of the problems which we for our part shall wish to see settled can be better settled after Britain's entry than in negotiations. That is why I dissent from those—there are some—who feel that Britain's interest, while requiring ultimate entry to the Communities, can best be served by waiting some years more so that we can better see the ultimate form of the institutions that we shall be joining.

In their approach to the historic decision which Britain must now take, hon. Members will be concerned, and rightly so, with economic and with political considerations. Some hon. Members will stress the economic factors more than the political, others will attach a greater weight to the political—and this is true whether they are supporting or opposing the Motion.

It may be convenient if I deal first, and, indeed, primarily, with the economic issues. I begin with the industrial. Here, speaking for myself, I must make plain that I am not, and have never been, one of those who see in British entry an automatic solution to our economic problems as a result of the sudden effect on our productivity and competitiveness of a devastating cold blast of competition. That life will be more competitive for many of our business firms cannot be denied—some of them can do with it, and the best have shown that they welcome it. But while the cold draught may prove invigorating for the athletic, there are others—to be found in British industry, even though they may not be characteristic of British industry—who will seek to pull the blankets more tightly over their heads.

Again, I totally reject the view, as I think most of us will, of those few who think—some of them have been quite persuasive in elaborating the doctrine—that entry into Europe would provide a heaven-sent opportunity for depressing wage standards and workers' conditions in British industry. Each industry—indeed, each firm—will make its own calculation of its profit and loss account—of the opportunities and the dangers that it faces—as a result of entry into a wider and more competitive market.

The C.B.I. has produced an authoritative and valuable report based on the best information available to its constituent firms and organisations and on its talks with European businessmen. In the process of making its assessment, the C.B.I. recenty circulated a questionnaire to a large number of companies, and about 70 per cent. of those which responded said that they expected to benefit, on balance, from joining the Common Market and said that they saw it as an opportunity for growth. No less than 90 per cent. believed that there was a clear and progressive balance of advantage to British industry as a whole.

This is not to deny that the balance will be unfavourable—at least in the early years—for some industries. But as a whole British industry seems in no doubt that it can and will successfully meet the challenge; and I for one am not ready to accept that we have grown senile and flabby and are unable to accept such a challenge.

The conclusions of the C.B.I. study are strongly favourable to entry. Where detailed assessment may be impossible, let no one underrate the importance of the collective judgment based on faith and confidence, on hunch and feel—qualities in which British industry is not lacking. The fact that so large a part of British industry considers that our entry would be advantageous is of itself important. It is perhaps still more important in indicating the upsurge of confidence in in-industry which we have the right to expect if Britain's application is successful.

British entry is not indispensable to the hopes of future industrial expansion and growth, or to a sustained level of investment. I am confident that these are aims within our capacity and that they are dependent on our own effort. But I am confident as well that, whatever rate of growth, whatever rate of investment we are capable of by our own efforts will be increased as a result of the impact of British industrial plans and attitudes of British entry—quite apart from the expansion that will follow from causes I hope to analyse later.

So far as British industry is concerned, we seek no exemption from the obligations which fall upon every member of the Community. A period to cover a progressive and phased reduction in tariff levels between Britain and the Community and our own move to the introduction of the common external tariff would, I should feel, be desirable in the interests equally of the Community and of ourselves. It took time for the six original members to reduce and eliminate their own tariffs and their other restrictions on trade with one another, and, also, it took time to achieve the common external tariff. So with us; but I see no reason why a period for progressive reduction leading to the ultimate elimination of internal tariffs should not be acceptable to all of us.

We shall not negotiate on the basis of sectional protectionism. Six years ago, with the authority of the then Leader of the Opposition, I said from the Bench opposite that, while we reserved the right to criticise the conduct of the negotiations by the then Government—as right hon. Gentlemen will equally, and quite fairly, reserve their right today—and while we reserved the right to decide our ultimate attitude when the negotiations were completed, we gave the then Government a pledge that we should not ally ourselves with any protectionist element in British manufacturing industry for political purposes, whether nationally, industrially, or locally, and I am sure that the right hon. Gentleman will be prepared to give us the same assurance as we, for our part, seek now to embark on negotiations.

I turn to those areas which, as I said on Tuesday last, the Government have identified during our European discussions and in the examinations which we have made since the discussions—the problems which, as I said, it must be our purpose to resolve during the negotiations. First, as I think we are all agreed, are the problems associated with the operation of the common agricultural policy of the Community. These have been set out in some detail in the White Paper presented by my right hon. Friends.

The first of these relates to the effect on the British cost of living and hence on the general price level, which, in its turn, is liable to effect wages and industrial and export costs. The best calculation that we can make, as the House knows, is that if E.E.C. net price levels remain unchanged—and these are matters for continuing review—and if, equally, world prices remain at current levels—these are big "ifs"—then the increase in the cost of food to the consumer in this country probably lies within the range of 10 to 14 per cent. That is for food. It is equivalent to an increase of 2½.per cent. to 3½ per cent. in the cost of living.

I do not under-rate the importance of these figures. On the other hand, they should be capable of some offset through the reduction of prices of non-food items, for example, imported consumer goods, to say nothing of the possibility of some reduction in taxation as a result of savings in agricultural subsidies.

I am only too well aware that for some of our people, particularly those on the lowest incomes—whose food bill represents a higher proportion of their total outgoings than for the community as a whole—these are very serious figures. The answer to their problem must lie in social policies, particularly pensions, to ensure that they are not asked to bear a disproportionate part of the cost of British entry into the Community. Rather, indeed, will it be our aim to shield them from any short-term adverse effects.

In this debate hon. Members will no doubt express, perhaps in strong terms, their criticisms of the Community's agri- cultural policy taken as a whole. I have not been altogether backward in this myself in previous debates in the House, nor, indeed, in my discussions with the Heads of Governments of the Six, and I am not sure that if they were to start again they would produce a policy on exactly the same lines. But, as I have said, we must be realistic in recognising that C.A.P. is an integral part of the Community. This recognition must form part of our position. We have to decide whether or not to apply for entry to a Community which is characterised by this particular agricultural system. It is useless to think that we can wish it away, and I should be totally misleading the House if I suggested that this policy is negotiable. We have to come to terms with it. But we can play our part in affecting its future development if, but only if, we are members of the Community.

As for the cost of living, the application of the Community's agricultural policy to our own arrangements will clearly be spread over a period. How long I will not speculate about, because this is a matter to come up in the negotiations. When we are talking about an increase in living costs of 2½ per cent. to 3½ per cent. spread over a period, we all recognise that it has not been unknown under both Governments for internal prices to rise more in one year than the whole of the increase, spread over a period of years, which acceptance of the Community's agricultural policy will mean for the cost of living of the average British family.

But, of course, the effects on food prices after our entry are only a part of the impact of the acceptance of the Community's agricultural policy, and when we measure that impact, I have to stress that every estimate I give to the House today is based on the Community's agricultural policy as it operates today, making no allowance for the effect of negotiations.

All of us recognise that the acceptance of that policy would mean considerable adjustments; for some areas, indeed, it would mean great changes in the structure of British agriculture. If we base our estimates on the present price levels ruling in the Community—which are, of course, subject to change—it is clear that there would be a significant redeployment of resources to concentration on cereals as opposed to other form of agriculture production. It has been estimated that if prices remained unchanged, our present output of cereals, around 13 million tons last year, could rise to something like 20 million tons within a few years. Quite apart from whether too much starch and insufficient protein would not be as unhealthy for British agriculture as it would for individual diets, my right hon. Friend and I pointed out in Europe that at present Community prices, and taking into account the very high degree of British farm productivity, we might in due course, indeed before very long, find ourselves exporting substantial quantities of cereals to other Common Market countries. I would not regard this as the most economic use of our resources. And I must tell the House that I thought that I detected a similar lack of enthusiasm on the part of a number of our hosts.

Undoubtedly—and we said this in our European talks—acceptance of the Community's agricultural policy would create problems for many of our small farmers. Those dependent on bought-in feed as a raw material will have to pay several shillings a hundredweight more for their cereal and other feeding stuffs. Some of the production grants by which we help our small farmers would in their present form appear to conflict with the Community's rules against the subsidisation of commodity prices. The Community system of managed markets may prove less effective than our own in assuring a predictable return for the farmer's produce, and the differences between their price levels and ours will affect different farmers in different ways, as the White Paper makes clear.

This is the debit side, and I am not seeking to minimise it in anything that I say today. But there is a credit side, too.

Sir A. V. Harvey (Macclesfield) rose—

The Prime Minister

Perhaps the hon. and gallant Gentleman will permit me to finish this passage and then I will give way to him.

How could it be otherwise in a Community in which about 40 per cent. of farm holdings are under 15 acres in size and the agricultural population is about 16 per cent. of the total population as against our 3½ per cent.? Under the Community's policy the grant of agricultural aids is likely to be allowed when these do not directly affect the common commodity prices of the managed market, and there can also be aid, of course, for structural, regional and social purposes within the rural community field.

I would not want to forecast, before our discussions with the Community, which of our present production grants can be retained, nor what new additional aids we or the Community will be prepared or able to finance. In any case, the Community's own policy is still far from complete or settled in these matters. But I should be wrong to under-state what may well be involved for many of our small farmers, especially those operating in exposed places. This means that our objective must be a meaningful transitional period and financial assistance, from national and as far as possible from Community sources, in order to make this possible.

Sir A. V. Harvey

The Prime Minister partly answered my question when he was talking about farmers in exposed places. Would he make a special reference to the hill farmers, who could suffer enormously if their position were not safeguarded?

The Prime Minister

I had that very much in mind. There is, of course, an understanding of these problems in the agricultural Paper presented by my right hon. Friend the Secretary of State for Scotland and my right hon. Friend the Minister of Agriculture. Since my right hon. Friend hopes to catch your eye later in the debate, Mr. Speaker, perhaps it would be right to leave that and other agricultural questions to be pursued by him. In this general survey, which I am trying to keep as short as I can, I am giving everything I feel to be relative to the main decision which the House is being asked to take. I hope that the House will agree that so far—and I intend to keep this up—I am holding nothing back on the debit side, quite apart from what may be said on the credit side.

Perhaps the House will bear with me for a moment if I say a word about milk, in respect of which the problems have been frankly analysed in the White Paper which my right hon. Friends presented to the House. As they make clear, the difficulties which it is only realistic to foresee depend on the assumption that the E.E.C. régime for milk and milk products will be extended automatically and unamended to Britain on British entry. This must be a matter for the negotiations, but I think that it is fair to point out that the Community have found it to the advantage of their existing member-countries to encourage within the Six the expansion and output of dairy produce rather than the expansion and output of liquid milk. I shall be surprised if, on reflection, those members of the Community who export dairy products will want matters so arranged on British entry as to encourage in Britain a milk policy and a system of prices for milk and milk products which would result in the production of more butter and cheese in Britain to the detriment of their own producers of milk products. It might very well suit them, and it would certainly suit us, for the present pattern of milk production in Britain to remain pretty well as it is. But we shall see.

I have referred to the squeeze on British producers dependent on high price cereals. Perhaps I should add that if my hon. Friend the Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food, the Member for Enfield, East (Mr. John Mackie), had been catching your eye, Mr. Speaker, in this debate, I have a feeling that he would be stressing the great possibilities for beating that squeeze by increasing the use of home-produced grass rather than cereals as the essential raw material for many of our livestock farmers—a policy not without advantages also for cereal producers.

My right hon. Friend will deal with some of the special problems of our farmers in the more difficult areas, the hill farmers of Wales and Scotland and parts of England—[Interruption.] I thought that that might strike a controversial note, but I prefer to leave it between hon. Members and my right hon. Friend rather than with me—the hill farmers who, as I said in answer to a Question last Tuesday, will face to an enhanced degree some of the more general problems which entry into the E.E.C. on the basis of existing arrangements would mean over a wider sector of British agriculture.

I shall leave for a moment the effects of the C.A.P. on Commonwealth problems, with which I hope to deal later. I want to turn to what I believe to be the nub of the agricultural problem for Britain, to its system of financing. The White Paper which I am asking the House to approve, said: It is also the Government's view that the financial arrangements which have been devised to meet the requirements of the Community's agricultural policy as it exists today would, if applied to Britain as they now stand, involve an inequitable sharing of the financial cost and impose on our balance of payments an additional burden which we should not in fairness be asked to carry. This is not putting it too strongly.

Under present arrangements each importing country must impose a levy on imports from third countries of most agricultural commodities, and under present arrangements 90 per cent. of the revenue from these levies will have to be paid to the Guidance and Guarantee Fund of the Community. Under present arrangements, including present Community and world prices, this would mean, as the White Paper on agriculture makes clear and as I have previously made clear, a net cost to Britain's balance of payments of between £175 million and £250 million a year.

That assumes no change in the present arrangements and no reverse payments from the fund to assist British farmers. The levy payments into the fund, and so across the exchanges, might well be of a similar order of magnitude to the total level payment into the fund of all the Six countries put together.

Taking other contributions to the fund into account, we might be paying about 35 per cent. of the total income of the fund and about twice as much as the next highest contributor. I doubt whether any of our prospective Community partners would regard that as equitable. But since I hope that we shall shortly be engaged in negotiations, I shall say no more on that point just now.

Perhaps I might be allowed to remove one common misconception. There is a tendency to think of the Common Market, on the one hand, as consisting of countries which are virtually self-sufficient agricultural producers, with Britain, on the other, as a mainly importing country. But, to take cereals, for example, we import about 9 million tons against home production of 13 millions, and the Six, with a home production in total of about 58½ millions, import 22½ millions, of which they get 3.3 millions from one another, and over 19 million tons from countries outside the Community. In total, they import more than twice as much as we do from outside the Community.

To take just one example, Italy's cereal imports from outside the Community, 7½ million tons, are not all that much less than our own. Yet, as the Italian Government explained to my right hon. Friend and to me, despite their early difficulty with the C.A.P. they have successfully come to terms with Community policies. I shall have more to say in a moment about the problem of agricultural levies and the transfer across the exchanges when I come later to the problem of the effect of entry on our balance of payments.

Mr. J. B. Godber (Grantham)

Just to get the figures which the Prime Minister quoted complete for the record, should he not also have mentioned the large exports of cereals? I am not arguing against the general principle, but the Community exports a substantial amount of cereals as well.

The Prime Minister

Of course. But the point I am trying to make is that it is sometimes felt that the whole nature of the Community would be changed if a large importing country like Britain came in. Some of our hosts on our tour were very surprised and impressed that we have been producing 13 million tons, which might well go up to 20 million tons at the end of the decade on certain assumptions. They were surprised to find that we are in the same league as they are on cereal production.

Mr. Peter Kirk (Gravesend) rose—

The Prime Minister

I have a lot of ground to cover. My right hon. Friend will be dealing with agricultural problems, and I think that it would be better to await his statement.

I now come to the problems which British entry would involve for our trade with the Commonwealth and the interests of Commonwealth countries. The House generally accepted five years ago—the then Government accepted and the then Opposition accepted—that British entry would mean the ending of Commonwealth industrial preferences in the British market, and, through the mechanism of the common external tariff, the institution of reverse preferences against Commonwealth manufacturers.

This was something that we all then accepted during the process of the negotiations. Most of the right hon. Gentleman's negotiations were based on this fact, and, item by item, were carried a long way. In particular, the right hon. Gentleman the Leader of the Opposition will remember that one of the provisional agreements made during the last round of negotiations involved the offer of association to dependent territories, and to independent Commonwealth countries in Africa and the Caribbean, as well. In our negotiations we should be able to take full account of this arrangement and, similarly, the offer of comprehensive trade agreements with certain Asian Commonwealth countries. During our recent discussions in Europe we had no indication that it would be impossible to do this.

There were some unsolved problems, but the then Government stressed, as we equally stress, the problems of New Zealand. Seventy-five per cent. of New Zealand's agricultural production and nearly 50 per cent. of her total exports depend on the British market; and she earns over 50 per cent. of her foreign exchange from our market. I believe that during the four years since the right hon. Gentleman's negotiations were broken off there has been a growing recognition in the Community that in any future negotiations the problem of New Zealand must be dealt with on a basis which is at once realistic and imaginative. That is, of course, our view and I am sure that it is the view of the whole House.

In advance of negotiations it would be wrong for me to speculate about the kind of arrangement that should be made: association between New Zealand and the Community; arrangements along the lines of the protocol to the Treaty of Rome, which provided for unchanged customs treatment on importation into individual Community countries of goods originating in other countries with which they had had special customs relationships—generally referred to as the Morocco-type protocol; or levy-free or reduced levy quotas for agricultural products—all these have been mentioned as possible solutions, and all of them are in the minds of one or other of our prospective Community partners. Whatever the method, this problem is one where we have the bounden duty to seek the necessary safeguards.

The same must be said of the problem of Commonwealth sugar producers, who range from some of the more highly developed Commonwealth countries through newly emerging independent territories, whose prosperity depends on sugar production, to dependent territories whose very livelihood is bound up with the security of the market which they enjoy at present here in Britain. The Commonwealth Sugar Agreement, which some of us on this side of the House had the responsibility of first negotiating 17 years ago, is basic to the prosperity of these areas; and in the negotiations, by whatever means seems appropriate, this problem should be satisfactorily dealt with.

There are other important Commonwealth interests we shall need to discuss. We shall remain in the closest consultation for this purpose with our Commonwealth partners, and this includes dependent territories for which Britain is still responsible.

Hon. Members who have given close study to the history and operation of the E.E.C. will recognise the imaginative consideration given by the Community 10 years ago to the needs of countries in Africa and elsewhere, countries with whom they were closely linked by past imperial ties or present association. There has been a tendency in some quarters to regard the Community as an association of advanced industrial countries turning their backs on the needs of newly emerging countries. This is a total misconception and entirely disregards the great effort the countries of the Six are making for developing countries in the generosity of their trade arrangements and in the scale of their aid programmes.

I have said that we shall keep in the closest touch with our Commonwealth partners. The same, of course, is equally the case with our partners in the European Free Trade Association. As was made clear at the recent meeting with our E.F.T.A. partners in London, and as I repeated last week, we shall make special arrangements to keep in consultation with our E.F.T.A. partners also throughout the negotiations. I apologise for the time I am taking, but I have assumed that the House would want to hear a full and fair assessment of what is involved in British entry.

I want to turn now to the problem of the movement of capital. I have made it clear that we must be prepared, as a member of the Community, to accept the freedom of capital movement provided for under the Treaty of Rome and under subsequent directives, although we would, naturally, wish to negotiate some satisfactory transitional arrangements. As the House knows, there are really two problems involved—direct investment and portfolio investment.

As regards direct investment, one can argue about the likely effects of the operation of the Treaty of Rome. Here, as in other fields, it is simply not possible to make precise assessments, but I do not see why the balance should not be positive. Not only do I reject the view that British investment would flow to the Continent without any return flow, but we could also expect, once inside the Community, a significant increase in the right kind of direct investment in this country from outside the enlarged Community.

I paid tribute, 10 days ago, to the skill and ingenuity of our people in the City, as a result of which the Treaty's effect in terms of portfolio investment might present us with a particular technical problem. However, I am pleased to see, from the financial Press, that City people regard my anxieties as misplaced. So be it. Indeed, I would have been more surprised if City people had professed to share my concern. At all events, we still think that it would be undesirable for British investment capital to be able to flow freely via one of the Continental financial centres for investment in North America, but, equally, I see no reason why this technical problem cannot be handled through the "appropriate measures" for which the Treaty of Rome provides in Article 70(2).

In my statement last week, I referred to regional policies. Before my right hon. Friend and I set out on our European Mission, we had some anxieties about this problem, particularly on the question as to how far Britain would be able to continue to take the necessary steps to ensure the economic and social development of our development areas and other areas needing special help. As my right hon. Friend the Chancellor of the Exchequer made clear in his Budget speech, the concern of all of us about this problem is related not only to our clear social duty to bring work to these areas, but also to the recognition that if these areas are able to play their full part in the production drive we shall be able to advance more rapidly on a national scale without having to bring expansion to a premature halt all over the country because of inflationary pressures in the Midlands and the Southern part of England.

Everyone here will recognise, again, that to join the Common Market might create the danger of a pull of industry towards the East and South of the country because those areas are closest to the newly opened European markets. That is why our existing policies will need to be continued and, indeed, intensified. Now, are we free to do this under the Treaty and, more particularly, in terms of practical application of the Treaty by its existing members? The answer that we give with confidence after our discussions with the Heads of Government of the Six is that we are.

We have studied the methods used by Community countries, practically all of which have special regional problems comparable in kind and, indeed, in scale to our own. The methods that they use in some cases are similar to those that we are applying. In other cases, policies are involved that we have never contemplated—for example, differential pricing of publicly owned industries and services—such as North Sea gas—to encourage regional development, and a variety of incentives, including investment grants, tax reliefs of various kinds and cheap, long-term loans to encourage mergers.

All these different practices make it plain that the Community, in their general policy and practical approach, are as clear as we are that the welfare of the whole cannot be ensured without an effective attack on the problems of the less developed regions. Our present system of incentives for regional development is not, in my belief, inconsistent with present Community practice. Our I.D.C. policy, similarly, can be continued provided that we do not seek to discriminate—nor should we seek to discriminate—between British firms and European firms in our location policy.

It is true—and I do not want to hold this back, either—that certain British firms who seek to expand in congested Midland or Southern areas are frequently successfully steered into development areas by an intimation that they must go there or an I.D.C. will be refused. In theory, such firms could escape from the rigours of I.D.C. control by deciding to build their factory somewhere on the Continent.

This is undeniable in theory, although I am sceptical about the real extent of the problem in practice, but it must be regarded as in theory a weakening of our present system. But against this must be set the fact that Continental firms which desire to establish themselves in Britain will, of course, go to the development areas under our I.D.C. policy on the same basis as our own firms, and in addition to them we can confidently expect a considerable flow of investment from outside the Community—particularly from across the Atlantic—from firms which will want to establish themselves in a Britain which has become part of a market getting on for 300 million people.

It has always been Government policy since the war, under both parties, to encourage American investment in Britain, not on the basis of financial takeovers, but on the basis of establishing factories here which brought to us much needed technical "know-how" and expertise and would thus create valuable employment. We thus have a very large number of factories in our development areas which have been attracted to this country and are creating new employment, and which have brought in expertise and know-how and have very often brought export savings with them as well. On balance, therefore, I conclude that, in regional policy, the net effect of the new industrial investment capable of being steered to the development areas will exceed the potential loss which could result from British firms investing across the Channel.

There is one other economic problem to which I have referred. It is not a problem for us that we seek to resolve in the negotiations, but I am aware that some may think that it is a problem on which our prospective European partners will need to be satisfied. I refer to what some call the sterling problem.

First, may I say that this is not a problem of the strength of sterling. All the Heads of Government with whom we talked were impressed with the robust strength of Britain's balance of payments and of sterling. This is not a problem. I said in November that we should not seek to enter upon negotiations except on the basis of a strong balance of payments and a strong £. These conditions are being fulfilled and this is fully recognised in Europe. Let no one be in any doubt about that.

But there are those in Europe who feel that a currency such as sterling, which is not only a national currency serving our own trading needs, but is a reserve currency, a currency widely used in international trade and hence widely held in many countries of the free world, might present difficulty if we entered the Community. We have made our position clear and the position of sterling clear. Basically, the strength of sterling is a function of the strength of Britain's economy and balance of payments. Doubts about sterling in these past years have on every occasion resulted from doubts about our resolve and our ability to get our balance of payments right.

Now that Britain is moving into surplus, the position is rapidly improving. But let us be clear, as, indeed, our European friends are clear, that not only do we need to make and keep our balance of payments strong, but that we have the will, the plans and the policies to do it. The events and measures of the past year have not been lost on our friends abroad, but there is one problem whose significance became clear to my right hon. Friend and myself on our visits. [Interruption.] One of the differences between some hon. Members and those we have been dealing with in Europe is that, in Europe, they get a slightly less distorted perspective than some hon. Members here. They can see what has been done in this country and are proud of it.

Mr. Michael Foot (Ebbw Vale)

I am sure that my right hon. Friend would not like to bracket me with some hon. Members opposite and misinterpret what I said. My right hon. Friend said that the effect of the Government's policies had not been lost on our friends abroad. In my interruption, I said that it had been lost on our friends at home.

The Prime Minister

Perhaps this is because some of my hon. Friends and some hon. Gentlemen opposite have spent a little more time, with their expert publicity sense, in proclaiming what they think is wrong, and not proclaiming what this Government have done.

There is one problem whose significance became clear to my right hon. Friend and myself in the concluding stages of our talks. The relation between the weakness of a national currency and the deflationary measures which might have to be applied to remove the weakness, is a problem which has caused some concern, not only on a national but on a Community-wide basis.

There have been some who, having no fears for Britain's own balance of payments, have feared that if sterling were affected by some movement in the outside world, that is, outside Europe, for example, a drought in Australia, or some other exogenous factor, if I can quote economists' jargon, a Community of which Britain was a member might be plunged into a deflationary policy to put sterling right and the deflation might be Community-wide.

This brings me to Article 108 of the Treaty of Rome. This Article says: Where a member State is in difficulties or is seriously threatened with difficulties as regards its balance of payments as a result either of the overall disequilibrium of its balance of payments or of the type of currency at its disposal and where such difficulties are likely in particular to prejudice the operation of the Common Market or the gradual achievement of the common commercial policy … then certain action is provided for.

My right hon. Friend and I found that there was some anxiety about these words, "or of the type of currency", the words which I have just quoted. The Six were prepared to treat Britain on the same basis as any other member, or prospective member, so far as temporary difficulties in the national balance of payments were concerned. We are all alike, and the Community have already had to face problems of this kind. But they feared that the reference to the "type of currency" might be invoked by us against them it difficulties arose from external factors affecting sterling such as those I have mentioned.

They explained, understandably enough, that the words which I have just quoted were inserted into the Treaty of Rome at a time when a number of member countries had currency which was inconvertible, and they would be worried if there were any question of these words being interpreted today, in an era of convertible currencies, in a sense which was never intended. Now that we have made clear, as we did in the concluding stages of our tour, that we would not intend to invoke this Clause to deal with the problems arising from factors outside our own national balance of payments, I believe that their anxieties have been resolved.

The recognise that where a national currency is under attack by international speculators, for whatever reason, the responsibility for dealing with these problems falls not only on the country concerned, a responsibility which the Six all admitted we fully shouldered last summer, but also on the international financial Community who, through a series of complex but effective arrangements, have demonstrated on more than one occasion—and not only as effecting Britain—their solidarity and determination to ensure that the difficulties of one currency, and especially speculation against one currency, should not be allowed to disrupt international financial arrangements.

Last year, when sterling was in difficulties, we were supported by the central banks and Finance Ministers of all the countries of the Six, and by other countries far beyond the Community. I hope that Britain's approach to this problem is now clear, with the assurance that we have given in Europe and which I have repeated this afternoon.

Before I leave the economic consequences of Britain's entry, I should like to say a word on the effects on Britain's balance of payments. I stress that the estimates that I shall now make are based on the assumption of entry into the Community on the basis of existing arrangements, that is, making no allowance whatever for the effect of our negotiations. Secondly, I must make it clear that, while some unfavourable factors are quantifiable—on the assumption of things as they are—some of the favourable factors are more difficult to quantify, and we must each of us make our own assessment of their value. We have made clear that the financing arrangements under the Community's agricultural policy, involving the transfer across the exchanges of 90 per cent. of the levies on imports from third countries would mean—if no changes were made as a result of the negotiations—a burden on our balance of payments estimated to be between £175 million and £250 million.

I have quoted that figure and I have said that we, and, I suspect, our friends in the Community, would regard such a burden as inequitable. Then there is the effect of the loss of preferences, and the creation of the reverse preferences, and the indirect effect on our exports to world markets of increased labour costs, which might result from higher food prices.

There is also the effect of foreign investment where, as I have indicated, direct investment might balance out or even be favourable, while leaving a possible problem of portfolio investment. On the other hand, there will be the gains resulting from the incentive given to import saving in this country, not least in agriculture, as a result of British adoption of the Community's economic arrangements.

Hon. Members will have seen a number of estimates of the impact on our balance of payments, adding up all these potentially adverse factors. Such calculations are bound to be highly speculative. The possible cost of adopting the common agricultural policy is the figure most easily quantifiable. But even here, as I have said, any calculation has to rest on a multitude of assumptions about future world prices, future Community prices, future levels of British agricultural production, consumption and the size of the Agricultural Fund.

Even if we get all of these assumptions right—and that is another big "if"—the final cost must depend upon the outcome of our negotiations. In other areas, for example, trade and manufactured goods, any calculation is even more speculative. There may be big capital movements, and they could cancel each other out. We have no ways of judging the short-term responses of consumers and producers to the changes in prices and the changes in market opportunities which membership would bring.

I must emphasise that the calculations which have been made in many quarters are bound to be precarious, and they are based on the assumption that nothing whatever comes out of the negotiations. Even more important, by their very nature, and this is not a criticism of them, or of those who have given them, the figures which are being adumbrated make no allowance for the dynamic and favourable effects on the British economy, and particularly our own export and earning power, which membership would bring.

I would be doing a disservice to the House and hon. Members if I tried to offer a detailed calculation, in quantitative terms, of the effects of each of the factors which will be operating on our balance of payments in the first few years after our entry. I will give the best estimate that I can on the problem with which we would be faced. It seems that entry into E.E.C. would confront us with the problem of redeploying the resources from present home use to exports, or to import substitution, of the order of about £100 million each year over a period of perhaps five years after we have entered.

This redeployment must be compared with the expected growth rate of at least 3 per cent. On another occasion I gave my reasons why this figure might be expected to increase in conditions of British entry to the Community; and, of course, a 3 per cent. growth rate means an increment of about £1,000 million a year of real resources. So, we are talking, even on the very unfavourable balance of payments assumptions that I am quoting—making no allowance for expansion in the market available to us, and the developing market available to our technological products, of the need to redeploy from home use to export, resources amounting to £100 million a year within a total annual increase in the resources available of £1,000 million each year.

I do not believe that we cannot ie-deploy one-tenth of our national incre- ment of production in this way. If we, in a country such as this—which, in two and a half years, has transmuted a balance of payments deficit of over £800 million in 1964 to the surplus we expect in 1967—say that a transfer of the order that I have described, even though as I emphasise that these figures are based on unrealistic and pessimistic assumptions, is not within our capacity, then as a country we would be giving way to totally unwarranted defeatism.

Mr. J. C. Jennings (Burton)

These are suppositions.

The Prime Minister

The hon. Gentleman is absolutely right. All these estimates are based on a number of un-quantifiable things. They are based on supposition, and so are all the estimates based on the case for not going into the Community.

Here I come to conclude this very lengthy review of the economic consequences of British entry with what I believe to be the two most significant factors, even if again, they are not directly quantifiable, of our entry. I have missed out what I believe to be two of the most important factors. The first is that British entry would have a profound effect on British industry by creating a new confidence, a new upsurge in investments, a new concentration on modernisation, on productivity and reduced costs, by creating new prospects of a higher and more soundly-based growth-rate than we could otherwise achieve. But, still more, I think that British entry would impart to the Community a further dynamic to the Community themselves, a new dynamic—an elan—even if my use of this word has been recently criticised. When the Community was originally formed a new dynamic, a new elan, was created by the very realisation on the part of the individual industries and firms of each member country that a new market, a new opportunity was available to them.

Each member country, each industry, almost each firm, gained from that new surge forward. I believe that British entry—particularly if this were accompanied by the membership or the association of our E.F.T.A. partners—would create a fresh dynamic within the enlarged Community. I am not talking about what it would be here, but what would happen in the Community. This would have a great effect on the Market as a whole, and we should gain, as we can always gain, from an expansion in a market with which we are trading.

There is a second consideration of, I believe, overwhelming importance. I have referred in the past to our ideas for a "technological Community" and I have made it clear that one of the main arguments for Britain seeking to join a wider economic community is the development of this "technological Community". My right hon. Friend and I discovered during our visits to the Six capitals what a great impact this concept has had in Europe. In particular, we found a warm welcome for our view that Britain's outstanding position in the field of nuclear development for peaceful uses would enable us greatly to strengthen and develop Euratom.

In general, it is clear that British membership of the three Communities will help to provide the basis for carrying, in a market of approaching 300 million people—a market greater than either the United States or the Soviet Union in terms of population, the enormous research and development costs involved if European technology—including that of Britain; and all the Six recognise the immense contribution we have to make here—and Britain are to stay in the vanguard.

The House will, I think, permit me to use the same words here as I used a few days ago in Manchester: … as each new sophisticated instrument of production is succeeded by others which render the earlier product uncouth, we have—all of us in Europe—to be producing for a market large enough to enable inventors, designers and entrepreneurs to think big and to take risks commensurate with the opportunities that only a vast market provides. Because the instruments of technological advance are now so costly and complicated that, if we do not create a community-wide market for them, Europe will rapidly be relegated to a second-rate status, producing the conventional instruments of the 1960s while becoming increasingly dependent on the United States—perhaps even in the course of time on the Soviet Union—for the advanced industrial weapons of the 1970s and 1980s. Nor is there any future in the argument that technological co-operation on the scale we require can be achieved on a bilateral basis across a divided market. This is possible in joint aircraft projects because the participating Governments can guarantee the demand through controlling the purchasing programmes of their respective Air Forces. But in the commercial field integrated technological development requires an integrated commercial market. I do not say there cannot be a restricted and useful field of technological co-operation, with professors crossing the Channel both ways to read learned papers to one another. But if that is all we can achieve in Europe, then we shall be condemned, as I said at Strasbourg in January—condemned as a continent—to the status of industrial helotry with all that means in terms of world influence. And history may well say that we deserve it. If we take into account the benefit which would result from the expansion in demand for British goods which would come from the dynamic which the enlarged Community would be generating and the enormous and growing market for our own more sophisticated technological products which would result, I believe that within a very short period the balance of payment effects which I have been describing could be not negative but excitingly positive for Britain. And even if this took longer than I would hope, the short-term balance of payments effects which I very frankly stated to the House a few moments ago are, I believe, well within our capacity to deal with.

Before I turn to the political arguments—and I am very conscious of the strain which I am placing on hon. Members, but I am trying to present a complete picture—I should like to deal with one or two problems which I know are in the minds of some hon. Members. Indeed, I have been asked to deal with them today. Last week, I was asked a number of questions about the likely effect of British membership on the free movement of labour and on our Commonwealth immigration policies. The House will not wish me to go into a detailed exposition of the relevant provisions in the Treaty. What I think we all want to know is how the Treaty of Rome would be likely to affect this country—and especially immigrants to this country.

As in so much else, the members of the Community have been approaching this very delicate question in a characteristically cautious and practical way. The Treaty itself does not—contrary to what some may think—enable completely free movement within the member countries without any regard to the availability of jobs. Citizens of member countries can move to another country provided that a job is actually available there and they can stay there and have their families join them only if they get a job.

If proposals now before the Council of the Community are adopted, and Britain becomes a member, United Kingdom citizens will have equal rights with the nationals of other Community countries in competing to fill any vacant job anywhere in the Community and they will have priority in the filling of those vacancies over the nationals of non-member countries. But, as I have said, the Community have adopted a thoroughly practical approach. They do not want their nationals to go to areas where there are no jobs for them. They are proposing elaborate arrangements for the exchange of information between the employment services of member States about the labour market and also providing for arrangements under which, if a member State anticipates serious employment difficulties in a particular area or a particular occupation, all member States will co-operate to discourage workers from moving to that area or that occupation. It is, I think, worth noting that the measures so far taken within the Six to free movement of labour have not caused any disturbance or difficulties and have had the support of the trade unions in all the countries.

Accordingly, the Government do not believe that there is likely to be any large net increase in the number of E.E.C. nationals coming here to work. There may be a greater interchange with our nationals going to the Community to work and more Community nationals coming here, but the net inflow is not likely to be much greater than it is now. We already issue every year considerable numbers of permits to E.E.C. nationals to come here to work. From 1964 to 1966 the yearly average was 24,800, rather more than one-third of the total from all foreign countries. Nine-thousand-six-hundred-and-fifty went to Italians. Italy is the only member of the Community which has a surplus of labour available for emigration, but the numbers involved are much smaller than the total of unfilled jobs in the present Community.

The other aspect of this is the potential effect of British membership on Commonwealth immigration into Britain and on the movement of Commonwealth immigrants to other Community countries. The Treaty of Rome in itself will have no direct effect on what we ourselves do about Commonwealth immigrants. They can continue to come to this country under the provisions of the Commonwealth Immigrants Act and we shall be free to limit or not to limit the numbers who come. The question of their priority for vacancies here is not yet entirely clear, but the Community themselves have provisions covering citizens of overseas countries which have had connections with a member country to come into that country to take employment. There is no reason why we should not be included in this.

This does not mean, however, that citizens of Commonwealth countries who do come to this country would be able to move to E.E.C. countries on the same basis as citizens of this country could do. The provisions of the Treaty of Rome at present are quite clearly based on nationality and not on residence or on previous employment. But I must emphasise that this whole question of nationality and citizenship is extremely complex. Our own legislation on the subject does not have any precise parallel with that of the Community countries. Broadly, under our law, all people in the Commonwealth are British subjects. The alternative term is, of course, Commonwealth citizen. They are British subjects by virtue either of their citizenship of an independent Commonwealth country, or of citizenship of the United Kingdom and the Colonies.

The position in the Community is that Algerian nationals, for example, can move to France under arrangements which that country has with Algeria. They cannot move to other E.E.C. countries to take jobs on the same basis as E.E.C. nationals, but, if former Algerians are nationals of France, they can. Similarly, as we understand it, a Commonwealth immigrant who became a United Kingdom citizen would be able to enjoy the right to take up employment in any Community country if he were a member of the Community, but a Commonwealth immigrant who was not a United Kingdom citizen would not be able to do so.

This seems to be in present circumstances a reasonable position. It is one which the Community have accepted for themselves in relation to countries for which they have had similar associations and I see no reason why on our entering the Community we should have to ask them to change this policy.

While Commonwealth citizens could not, we think, at once move to an E.E.C. country under the mobility of labour provisions, they have the right to be registered as United Kingdom citizens after five years' residence here and it appears that they could certainly then move. By any likely date of our entry into E.E.C, the great mass of Commonwealth citizens now in this country would have completed five years' residence here and would be entitled to be registered. Their children born in this country, also, would be United Kingdom citizens and fully entitled to the E.E.C. provisions.

Then there are those living overseas in our Colonies—for example, Gibraltar and Fiji, which was mentioned at Question time. They are mostly subject to our immigration control and, like citizens of independent Commonwealth countries, they would not have the direct right of entry into E.E.C. countries to take up jobs. Their right of entry into E.E.C. countries is, therefore, a matter for clarification in discussion, possibly by analogy with the position of the immigrant from an independent Commonwealth country, with his right to United Kingdom citizenship after five years' residence in the United Kingdom.

I hope that if this has not cleared up all the points which have been disturbing hon. Members, it has at least underlined what I said last week: that this is an extremely complex matter requiring a lot more discussion with the Community before any of us can form a very strong view about it. The Community are, however, themselves tackling it in a sensible and sympathetic way and, if we ourselves become members, we shall be able to take part in their deliberations and ensure that the very special considerations affecting this country and the Commonwealth are handled with equal practical good sense.

Recognising the time that I have taken, but recognising the deep concern of the House about one or two other issues, there are two other matters with which I should like to deal before I come to the political issue. One of them, on which certain anxieties have been expressed, is that of the constitutional and legal implications for this country if we join the European Community. Here again, our examination of the Treaties and the other law emanating from the European institutions, but even more of the way in which the member States have been applying Community law, taking full account of realities prevailing in the member States, has greatly reassured us about the possible implications for Britain.

It is important to realise that Community law is mainly concerned with industrial and commercial activities, with corporate bodies rather than private individuals. By far the greater part of our domestic law would remain unchanged after entry. Nothing in the Treaties would, for example, materially affect the general principles of the law of contract or tort or its Scottish equivalent, land law, the relations of landlord and tenant, housing, town and country planning, matrimonial law, or the law of inheritance. The constitutional rights and liberties of the individual such as habeas corpus and the presumption of innocence will, of course, not be affected, nor in any material sense will our criminal law. The main effect of Community law on our existing law is in the realms of commerce, Customs, restrictive practices and immigration and the operation of the steel, coal and nuclear energy industries.

There are two main features about the Treaties in this context to which I should draw the attention of the House. First, they provide continuing powers for the institutions of the Communities themselves to issue instruments which are binding upon the member States or take effect as law directly within them. Secondly, in some areas of Community law, Community institutions have power to adjudicate on and to enforce its provisions.

Thus membership of the Communities involves a vesting of legislative and judicial powers, in certain fields, in the Community institutions and acceptance of a corresponding limitation of the ordinary exercise of national powers in those fields. The extent of the powers of the Community institutions in this respect is, of course, limited to the purposes set out in the Treaties, and those purposes cannot be altered except by unanimous agreement of the member States.

Accession to the Treaties would involve the passing of United Kingdom legislation. This would be an exercise, of course, of Parliamentary sovereignty, and it is important to realise that Community law, existing and future, would derive its force as law in this country from that legislation passed by Parliament.

It would be implicit in our acceptance of the Treaties that the United Kingdom would, in future, refrain from enacting legislation inconsistent with Community law. I should explain, too, that apart from the impact of Community law on our present and future national law, adherence to the Treaties would restrict our independence of action in future international dealings in matters falling within their objectives. Broadly speaking, it would have the effect of vesting in Community institutions our power of concluding treaties on tariffs and commercial policy.

In those matters we would no longer have national, but Community, agreements. We must, however, remember that restraints of this kind on our legislative freedom are by no means unprecedented. We have accepted them, for example, in accepting the Charter of the United Nations, the North Atlantic Treaty, in our membership of the General Agreement on Tariffs and Trade and again in E.F.T.A. We need, therefore, to keep this aspect of membership in a due sense of proportion.

The next point to which I want briefly to refer before I turn to the political argument is that of fiscal harmonisation. A number of commentators have suggested that if we get into the Community we shall immediately have to introduce a comprehensive value-added tax which would necessarily cover a great many items, such as food, which are exempt from specific indirect taxes under our system. Those who are in favour of the value-added tax naturally welcome this prospect, while for others it is an argument against our entry.

All of this is a good deal wide of the mark and it is necessary to look closely at what has been happening and what is planned inside the Community to bring it into perspective. Here we are talking about Article 99 of the Treaty of Rome, which provides for the harmonisation of turnover taxes, excise duties and other forms of indirect taxation. In making this provision, the immediate concern of the countries of the Community was to get rid of the distortions to trade which resulted from the existence in some of the countries of what are called cascading or cumulative turnover taxes for which only arbitrary allowances could be made as the goods concerned passed from one country to another.

Although that was the primary objective, it proved a long and arduous business. It was only a few weeks ago, in the tenth year of the Community's life, that agreement was reached on even the first step towards this harmonisation. The agreement was that by 1st January, 1970, existing turnover taxes would be replaced by the value-added tax system. The agreement at present allows exemptions for particular categories of goods. It does not for the time being require the tax to be extended to the retail stage of distribution. Its working is to be reviewed after two years.

There is no agreement yet covering harmonisation of rates of taxation. On this and the timetable for working towards it, the Commission is to make proposals to the member countries in the course of next year. To my mind, this is one more practical example of how the Community works and is found to be working—not by rushing straight into what might seem to be the strictly logical implications of the principles enshrined in the Treaty, but proceeding deliberately and in a practical manner, taking into account the existing systems and the interests of the various members before reaching any conclusions and then proceeding slowly and step by step. When the time comes for us to take part in this process, I have no doubt that it will be carried on in exactly the same spirit.

The first thing to be noted is that we do not have and never have had, a cascading turnover tax of the kind which it is now agreed should be dismantled. Ultimately, of course, the full realisation of the objectives of the Rome Treaty, if what are called the fiscal frontiers are to be abolished, is that the system and coverage and the rates of indirect taxation should be the same in all member countries.

It will be clear from what I have said that the day when that objective is realised is still some way off. Before it is reached, we shall, if our present application succeeds, have taken our place as a member of the Community and helped to shape its policies in this field as in others with continuing regard to the particular interests of each of us, including ourselves.

The same is true about the last of the special technical problems with which I have been straining the patience of the House. One of the closest concerns to all those of us in the House who have dedicated their political lives to completing the social revolution in Britain is the problem of social security arrangements and harmonisation within the Community. The two relevant Articles of the Treaty of Rome—117 and 118—provide for the harmonisation of the social systems of the member States, with the purpose of improving living and working conditions and for the closer and continuing co-operation between member States in social security matters.

In practice, each of the Six has its own system of social security, providing substantially the same range of benefits that we have in this country. There are many differences between us, as, indeed, there are differences of method and of emphasis among the Six themselves. In the social security field we have been co-operating with other countries, including the Six, for nearly 20 years. We have reciprocal agreements with each of the Six and with a dozen other countries. We have played our full part in the social security work of the W.E.U., the Council of Europe and the I.L.O., and we shall be ready and willing to play our full part similarly as a member of the Community in the terms of the Articles which I have mentioned.

My conclusion, therefore, is that there is no question of British membership of the Community in any way reducing the benefits available to the people of this country under our social security system. Indeed, as I have said, the Treaty looks to the progressive improvement of living and working conditions, and the achievement of the member countries of the Six in establishing standards of social benefits which, in the round, are widely admitted to be higher than our own shows that this aspiration of the Treaty is no hollow or vain declaration, and Britain as a member would intend to play her full part in promoting a further and continuing advance.

Mr. E. Shinwell (Easington)

Before my right hon. Friend passes to the political issue, if we are to be tied up, as he has said, in a variety of matters—social security, our legal systems and the like—will he tell us what we are going to be doing here when that is all done?

The Prime Minister

I am sure that my right hon. Friend will want to study what I have said, because I went through it rather quickly. I explained that by far the widest part of our law itself is untouched by our entry. If, for example, my right hon. Friend were to look through all the 70, 80, or 90 Bills which we have debated in the House in the present Session, he would find that only a very small proportion—steel is not one of them, nor is the Land Commission, for example—would be involved in any way by the anxieties which my right hon. Friend has.

Mr. Edward Heath (Bexley)

I understood the Prime Minister to say that he would deal later in detail with the impact of the common agricultural policy not on our domestic agriculture but on imports of temperate foodstuffs and cereals from the Commonwealth. He does not appear to have done that.

The Prime Minister

I said that I would deal with the problems, which I did, and last week I dealt briefly with the Commonwealth issues which, as I said, it was our duty to resolve in the negotiations. I did that when I spoke about the Commonwealth Sugar Agreement, New Zealand and the rest. I wanted to deal with the Commonwealth issues as separate from the rest of agriculture.

Again, I repeat my apologies for the fact that I have dealt at length with the economic and institutional issues raised by our decision to apply. I have done this deliberately, knowing how I would weary the House, because I know the anxieties not only of both sides of the House, but more widely, and I felt that I should give the House the fullest information that I could about the economic issues and the other technical issues with which I have been dealing.

I now turn much more briefly to the political issues, the political implications and the political aspirations which lay behind the Government's decision. When I say "political" I am not thinking primarily in institutional terms, for example, in ultimately federal terms. It has been widely commented, and my right hon. Friend said it recently, that the federal momentum towards a supranational Europe in which all issues of foreign policy and defence policy, for example, would be settled by majority voting, for the time at least, has died away.

The Government's decision, and I would suggest Parliament's decision, must be based not so much on what might ultimately evolve, but on the existing working of the Community and of modern Europe. I still believe—and here I am echoing words of the late Hugh Gaitskell, five years ago—that, for the immediately foreseeable future, British public opinion would not contemplate any rapid move to a federal Europe. There are, I know, exceptions, including hon. Members on both sides.

That does not imply any difference in approach by Britain from that of the Six. In all our talks about the institutional arrangements required for the functioning of the Community, my right hon. Friend and I made clear throughout our visits that Her Majesty's Government are prepared to accept the same obligations as our prospective Common Market colleagues—no more, no less.

This must be said, also. We are talking about Britain's joining the Community and joining in the great drive towards European unity which I am now convinced more than ever before is possible and within our grasp. It does not involve any fundamental change or commitment to fundamental change in European defence arrangements, conventional or nuclear, particularly changes which, in my view, would be destructive of the Western Alliance and inimical equally to hopes of constructive moves for an East-West detente.

The drive to European unity received a great impetus from the suffering which conflicts within Europe imposed upon the people of Europe and, before the final reckoning came, upon the world. It was in. the determination that this must never be allowed to happen again that men and women in Europe—and, of course, we are in Europe—talked and planned and began to work for a European decision so to unite Europe that differences between nations could never again be a cause of war here in Europe. Hon. and right hon. Members on both sides of the House played a leading part in those early initiatives. What had already been achieved even five years ago was recognised in one of the most important passages of a declaration made at the Labour Party conference in 1962, though its acceptability would have gone far beyond any single party. On this point, we said, five years ago: The Labour Party regards the European Community as a great and imaginative conception. It believes that the coming together of the Six nations which have in the past so often been torn by war and economic rivalry is, in the context of Western Europe, a step of great significance. The creation of a Community which would have the effect of ending a thousand years of European warfare enabled supporters of European unity to turn their minds to a far broader concept, the concept of a strong Europe, strong economically, strong technologically, and—because it is strong and united—an independent Europe able to exert far more influence in world affairs than at any time in our generation. This is our political motive; for, as I said last Tuesday, We do not see European unity as something narrow or inward-looking."—[OFFICIAL REPORT, Tuesday, 2nd May, 1967; Vol. 746, c. 314.] We, our friends in Europe equally with ourselves, have our links, links based on history with the countries, old and new, of other Continents. Equally, we have our links across the division which still so bleakly divide our own Continent of Europe. I have said, and it has been agreed by those to whom I have talked, that relations between Great Britain and the Soviet Union are better now than at any time in our history, but we have still a long way to go before we get a truly united Europe. All of us share the common desire to heal the divisions of Europe, and this is a task which, strong and united, we can hope to achieve here within Europe as a first step to a wider world detente.

On this, I will not say anything in the House which I have not said in Europe and which I have not said to the Prime Minister of the Soviet Union on his visit to London, and I quote the words which I used: The essential issue is whether it is going to be possible to build up Europe, as I think most Europeans understand it, with, as a major objective, the breaking down of tension between East and West The countries of Western and of Eastern Europe alike all have a vital rôle to play in achieving this objective. The British Government know what problems have to be solved, if the Soviet Union is to have the reassurances that she requires if we are to achieve that wider European unity that we believe in. Our purpose is to make a reality of the unity of Western Europe. But we know that this will be an empty achievement unless it leads first to an easing of tension and then to an honourable and lasting settlement of the outstanding problems that still divide Europe, Western Europe from Eastern Europe. This indeed is something that we have striven for for many years; and I am convinced that, if Britain is a member of a united European Community, our chances of achieving this will be immeasurably greater. This will require a great effort on our part—an effort which we believe can most effectively and constructively be exercised within the Alliance to which we intend to remain faithful—and we regard that Alliance as an instrument for peace and not for conflict—but also more generally and in a wider sense. We seek to do this because we believe that Europe has an even wider rôle to play in the world at large and that she will not be able to play it unless she is powerful—and that means economically powerful. We in Britain are in loyal alliance with one of the two great world Powers, the United States; and we seek the closest and most friendly relationship, economic, commercial, cultural, with the other great world Power, the Soviet Union. But because we seek this friendly relationship with both the great Powers, with America and with Russia, we do not accept the notion that all great issues should be left for settlement direct between these Powers because we in Europe are not sufficiently powerful economically—and, therefore, politically—to make our voices heard and our influence felt. That is why we believe in the need to make effective our enormous potential industrial strength by giving that strength a chance to operate on a European and not a national scale—or a series of national scales. It is only if we do this that we can exercise everything that goes with industrial strength and independence in terms of Europe's influence and world affairs. This is what we have proclaimed, both when we have met the Russians and the Americans, and when we have talked in Europe.

Mr. Jennings rose—

The Prime Minister

I am sorry, but I am just coming to the end of my speech.

Equally, a stronger and more united Europe will enable all of us to play a still greater part in the vitally important North-South problem, the war against world hunger, poverty, and disease. I have referred to the care and concern which the member countries of the Community showed from the outset to preserve the interests of their own ex-colonial associated territories, and to their record in the provision of direct economic aid to developing countries, which—together with that of Britain—is not bettered in any country in the world. No one in the House can doubt that the economic strength we seek through British membership of the Community will enable all of us to bring forth from the vibrant industrial energies we release the munitions—and, from our bursting granaries, the supplies—for the worldwide war on want.

If the House endorses the Motion, Her Majesty's Government will, within hours of that endorsement, present to the President of the Council of Ministers of each of the three Communities our formal application to accede to the three Treaties.

I have given the House our reasons. These applications will be made from strength, in a spirit of resolve, not as one who seeks favours, resolved, above all, to contribute in full measure what this country has to contribute in terms of skill and inventiveness, of industry, of technology, of science, and of political will to the creation of a more powerful Europe, and, therefore, of a more peaceful world.

I have told the House our conception of what it could mean for Britain, for Europe, and for the world, if the negotiations for British membership are successful. But let no one think—as too many people in Britain and in Europe five years ago tended to think—that there is no other course for Britain except entry. Britain is called today to make a choice, and it is a choice between alternatives. We are choosing here not the only possible or available course. It is not a question of "Europe or bust", as Europe perhaps believed five years ago. We are choosing the right course, the best course, for Britain, and for Europe.

There is no question of Britain's power to survive and develop outside the Communities, though no one will be in any doubt about the determination that would be needed, the efforts our people would have to make—and indeed the sacrifices of cherished industrial attitudes—to keep Britain among the world leaders, if the opportunity were to be missed of the wider economic grouping which in this technological age is needed for an advanced industry to find its true expression and opportunities.

Again, there will be those who, accepting the need for a wider economic grouping, beyond that provided by E.F.T.A. and our partners in the Commonwealth, will urge upon us the acceptance of new economic groupings. I do not discount the possibility of such groupings for the future if our present application were to fail, or to plough into the sands. But the House must recognise that this is not a current alternative. With all the choices open to us now, Her Majesty's Government consider that this is the right choice, the right decision to make.

I am asking the House to take an historic decision. Across the Floor have echoed the debates about the great moments when the fate of Europe was being decided, and of Britain's contribution to the shaping of history at those times. We have played a proud part in the creation of the nation States of modern Europe. But if the nineteenth century, the age of nationalism, the age of European liberalism, was illuminated by the heroism and statesmanship which created those great nation States, and twentieth century equally can go down in history as the age in which men had the vision, out of those nation States, out of the destruction of two world wars which themselves arose from conflicts of European nationalism, to create a new unity. And a unity the greater and more real because it builds on, and does not reject, the rich diversity of those nation States whose national aspirations, culture, and characteristics will become more vigorous and more fruitful by being welded together in a wider outward-looking unity inspired by a common purpose and a common resolve for peace.

4.56 p.m.

Sir Alec Douglas-Home (Kinross and West Perthshire)

The Prime Minister has now added to the statement he made a speech which has deployed the balance of argument which influenced Her Majesty's Government in applying for membership of the E.E.C. The right hon. Gentleman need not have apologised for the length of it, because we are to have a three-day debate, and the House was anxious to have all the information it could on which hon. Members could base their speeches. We are also, so I understand, to have a formidable array of Ministers following the Prime Minister—the Foreign Secretary, the Colonial Secretary, the Chancellor of the Exchequer, and the Minister of Agriculture—the President of the Board of Trade, we take it, being kept fresh for the negotiations later on.

The first aspect of the matter which must have struck the House is the important change of emphasis in the Prime Minister's approach as a result of his close examination of this issue—the difference, for example, between March, 1966 and the present day. Last week my right hon. Friend the Leader of the Opposition asked the Prime Minister whether he now accepted that application for membership of the Common Market must be within the accepted rules of the Treaty of Rome. The Prime Minister answered, "Yes". That is a word he uses so seldom that when he does we sit up and take notice, and this is a clear indication that this time the Government are genuine. With that declaration, the Government have taken the first hurdle. Without it, no progress could have been made.

It is said, too, that the Government accept the agricultural structure operated by the Community, in the sense that they are now willing to see Britain as a member of a Community which works behind a common external tariff, and places levies on imported goods. That was a position that the Prime Minister only lately took himself. We are glad to see it, because that was the second hurdle which had to be taken before any progress with negotiations in the Common Market could be made. The third modification of previous attitudes is perhaps the most marked; the Prime Minister and Foreign Secretary have left the Government much more room for manoeuvre than was possible when the five principles of Mr. Gaitskell and the Bristol speech of 1966 held the field.

Having done that, very properly, the Prime Minister, instead of adopting these rigid principles, again pinpointed certain special problems which must be dealt with as Britain is a late entry into the Community. For example, there is the balance of payments problem, and the special problem of New Zealand. The Prime Minister has not tied the Government to advance specific solutions, and this new flexibility is to be welcomed.

I hope that the Foreign Secretary will not say that the position is not more flexible than it was when Mr. Gaitskell laid down the principles. If he is going to make the point that it not as flexible now as it was then, he will lose what reputation he has in respect of persuading the more reluctant Members of the Cabinet to come into line.

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

The point is that the right hon. Gentleman who said that this issue was a "dead duck" is not the correct right hon. Gentleman to be making the point that he is now trying to make.

Sir Alec Douglas-Home

Perhaps the right hon. Gentleman will make his next intervention standing up.

Mr. Brown

I was standing.

Sir Alec Douglas-Home

I can assure the right hon. Gentleman that he did not stand up until after he had made his intervention.

Finally, in this context of change, anyone who has lately visited Europe can testify that the impression that Britain is this time in earnest and genuinely has a European outlook is enormously strengthened because the great majority of political parties in Britain now support application for entry. I wish this had been so in 1962. As the Prime Minister said today, the difficulties of grafting Britain on to a Community which will achieve complete economic integration in 1970 are much greater than they would have been five years ago.

Nevertheless, these changes in the Government's approach and the emphasis which the Government have put on matters this time augur well for the success of the negotiations, and I profoundly hope that the Prime Minister and Foreign Secretary succeed.

But this is to anticipate, because the question before the House in the next three days is whether the application to join the Economic Community is right, by two tests—first, the test of national interest and, secondly, the test of the interdependence of nations, to which I might add a third, namely, the peace of the world. For myself—and the Prime Minister invited each of us to turn these questions over in his mind—the compelling reason why Britain should become a partner in Europe is political. Every hon. Member must be acutely conscious of the near-ruin and the sum of human misery that the militant nationalism of European countries has brought to Britain, the Continent and the world.

We can reflect at the same time that Communism and the East-West division of the world that followed the Communist revolution was born out of European war. We might also reflect with advantage that when Asians and Africans witnessed civilised Europeans tearing at each other's throats in military combat many of the emotions that have divided the world on race and colour were born.

I have often asked myself whether, if Britain had been sitting as a member of a continuing Council of Europe during the months preceding 1914 or 1939, the European wars would ever have begun. The question can never be answered, but with that history of violence behind us—and who can say that it has cured the militancy of European nations, even in a nuclear age—I am ready to try the alternative of partnership directed to conscious interdependence and to sit down with our European colleagues to work out policies and programmes of action—economic, political and military—to make that partnership a reality.

The most profound effect that I can remember since the war—the event of most political significance—has been the rapprochement of Germany and France. Without that foundation there could be no European unity. A second event, which runs the first very close in political significance, has been the proof by the countries of the Six of the European Community of the degree to which the economies of separate units can be integrated, to the profit of all.

Can anybody doubt that these promising trends toward unity could be infinitely strengthened if Britain were sitting in the Councils of Europe, taking part in these international negotiations, month by month—because that is the practice—and sitting with the Foreign Ministers and Finance Ministers planning in the Commission for the common advantage?

Timing is a most important question. The Prime Minister touched on the point that the Community has yet to begin the formulation of its political policies to meet the problems of the future. They include the following: how best can Europe, in a nuclear age, assume greater responsibility for its own defence, bearing in mind the need on the one hand to retain the backing of the power of America and, on the other, to regain the friendship of the Soviet Union?

There are signs of a certain magnetism at present operating between Western Europe and Eastern Europe. How, in the context which includes the division of Berlin and Germany, are the new relations: with Poland, East Germany and the rest of the Eastern European countries to be developed? Let us remember that Western Europe is only half of Europe. How can Europe, acting as one powerful economic unit, assist the underdeveloped countries to establish that infrastructure of economic development without which they can never make the grade from the 20th to the 21st centuries? On the determined handling of that problem by Europe, the United States of America and the Soviet Union the future harmony of the world may well depend.

Can Britain, therefore, contemplate—when every decision in such matters impinges so dramatically on her own future—being outside the Councils? One must agree that these European concepts cannot be quantified by statistics, but every political instinct that I have tells me that the}' are valid and true.

That brings me to the second broad reason why I believe that Britain should enter the Common Market. It concerns the ability of our country, in the 20th and 21st centuries, to earn the wealth which will allow us to satisfy the economic and social ambitions of our people at home and to carry out the tasks in the world that need to be done. Some may prefer—this is arguable—that we should "knock along", free and independent, on our economic course, although the question whether we have been as eco- nomically independent as we might have been in the last few years could be the subject of debate. It is possible that we should so "knock along", but the question is, if we adventure, do we as a country gain much more?

There are certain facts in our present situation which we must note. The system of Commonwealth Preferences has been steadily eroded over the years—naturally enough: no one can complain. As the Commonwealth countries began to manufacture their own goods, our share of world trade has consistently declined, in spite of all our export drives. We have had in recent years to pull in our horns in overseas investment. Exporting must be more difficult in future if we remain outside the tariff walls of Europe and that of the United States and outside the State trading system of the Soviet Union.

All these considerations are pertinent, but even more so is the change in the pattern of trade. It is unquestionable that this pattern is no longer the straight exchange of British manufactures for the bulk supplies of food and raw materials of the primary producers, largely the Commonwealth countries. More and more, the wealth of Britain is being and will be earned by converting comparatively small quantities of raw materials into machines of the highest value and quality.

It is on such an exchange of goods—although it is an odd way of "taking in each other's washing"—that the wealth of the Northern Hemisphere has developed and is increasingly being built. I am not an industrialist, but it seems to me that it is here that the need of a large market is absolutely proved and that the writing is on the wall for a country of Britain's size—and the writing is clear.

I will give two examples which have come our way. I refer to the TSR2 and the TFX. I am not talking about the controversy about whether we should have kept the former or not. But here were two comparable aeroplanes—probablv the TSR2 was slightly better than the TFX. I remember that the initial order which we gave in this country for the TSR2 was 140 maximum, whereas the minimum order which the Americans gave for the TFX was 1,400.

The second example is the Concord, which is almost beyond the resources of France and Britain together. For the first time, we have been able to steal a march on the Americans over a plane of this kind, but the success of this aeroplane, as with the success of the Boeing, depends on our being able to afford to make enough of them. Unless we do, the venture will fail.

Therefore, taking a wide range of such machines, aircraft, spacecraft, computers, power stations, all the industrial processes broadly comprehended under the word "technology", it seems proved that, unless a country can command a market which will enable the industrialist to mobilise capital on the scale required, to allocate moneys for research on the scale required—anyone who compares what we can do here with what America can do will understand the vital importance of this—and to recruit skills of the quality required, then that country is in danger of being put out of business. Britain surely could not contemplate such a position.

Of course there are risks, and the Prime Minister indicated some. Many people in industry have spoken of the short-term difficulties of adjustment which they will face. Equally, as the right hon. Gentleman said, I believe that 90 per cent. of them have concluded that, looking forward to the future, there will be permanently greater opportunities for British industry in an expanded market, opportunities above all—this is surely what matters vitally to this country—which will enable us to increase our rate of growth.

I would therefore sum up the broad reasons which influence me in favour of entry of the Common Market—the political reason, which I believe to be decisive for the national and international interests and the industrial reason, which is broadly a case of "nothing venture, nothing gain". I hope, therefore, that we will venture.

Finally, the Prime Minister devoted much of his speech to each of the particular problems which are to be the subject of negotiation. He said something about regional policies, and, as a Scottish Member, I was glad to hear that we shall be able to deal with our regional problems as we decide is best. The right hon. Gentleman mentioned movements of capital. One of the anxieties which I might have mentioned earlier is that, unless we enter the Common Market, the capital of America, for example, will be more likely to flow to them than to us.

The right hon. Gentleman mentioned the balance of payments. As he said, if we are to put, by reason of the moneys which we levy on imported food, some 30 per cent. into the levy on food, it is certainly reasonable that we should ask for a considerable percentage back. The Germans did this and I suggest that we should follow much the same line of reasoning with the Community as the Germans did when they had a ceiling placed for them and were able to accept it as a reasonable arrangement—

The Prime Minister

If I heard the right hon. Gentleman correctly, I think that he attributed to me the suggestion that paying the levies across would involve about 30 per cent. of the total. Of course,90 per cent. of the levies would go across and we would then be finding more than half of the levy income. The 30–35 per cent figure which I quoted was income from all sources, so that the situation will be even more inequitable, if anything, than the right hon. Gentleman has just said.

Sir Alec Douglas-Home

I misunderstood that point, but it reinforces my case that we should get a good percentage back.

The Prime Minister also raised a rightly important question for our consumers—that of the extra cost of food. The Prime Minister's estimate was very near that of the independent inquiry by Unilever. I think that he said 10–14 per cent. and the inquiry estimated about 10 per cent. I think that the House would probably agree that a 2½–3½ per cent. rise in the cost of living, spread over five years, for example, should be bearable, always provided that the Government's policies are directed to assisting those of our population who are most in need.

I should like to take up three aspects of this matter which the Prime Minister identified. The first is the Commonwealth, where there have been many changes to record in the last few years. Since 1962, India has made an agreement with the Community on tea and certain African countries have become associate members or have special trading arrangements. I wish to draw the right. hon. Gentleman's attention to, and ask the Minister of Agriculture later to say something more about, temperate foodstuffs from the old Commonwealth countries—Canada, Australia and New Zealand.

Canada's sales of wheat are increasingly orientated towards Japan, China and the Soviet Union, and Australia has made spectacular advances in trade with Japan and is beginning to exploit opportunities in South-East Asia. Nevertheless, when I think of the time which my right hon. Friend spent in Brussels trying to secure favourable arrangements for the import of foodstuffs into the Community from these countries—Australia and Canada in particular—and think that the Prime Minister said nothing about this today, I wonder what the present Government have done in this sphere. We should like to know before the end of the debate.

As for New Zealand, the Prime Minister said that this is a case for very special treatment, and I am glad to hear from him that the Community still feels as it felt in 1962; that this problem must be settled favourably. I do not quarrel with the word the Prime Minister used, when he said that it is a duty for any British Government to achieve such a settlement. I hope that the Secretary of State for Commonwealth Affairs or the Minister of Agriculture, Fisheries and Food will be more specific about the kind of arrangements that have been made or will be made by the Government in this respect.

There is another aspect of this Commonwealth problem which the Prime Minister mentioned, and that is sugar. The solution here, I should have thought, would be to dovetail the Commonwealth Sugar Agreement into a world agreement. If the Commonwealth Secretary will consult the speeches made by the present Prime Minister when in opposition he will see how continually the right hon. Gentleman advocated commodity agreements. He will not fail to observe what a singular failure the Prime Minister has achieved during two-and-a-half years in office by not having done anything about it at all.

As far as I know, nothing was done following the U.N.C.T.A.D. conference and the promising recommendations which were made there. That conference, in 1964, was attended by my right hon. Friend the Leader of the Opposition. Definite recommendations were made. They were put to the United Nations and, as far as I know, they have been pigeonholed there. What have Her Majesty's Government done, or what are they going to do, in respect of sugar in order to try to see that the West Indies and the other sugar-producing countries have a reasonable commodity arrangement to cover this product which is vital to their economies?

At any rate, there has been diversification of trade within the Commonwealth and between the Commonwealth and Britain, and other markets are being found. When one considers the question of the Commonwealth in general, one is bound to conclude that its main interest now must be that Britain should be financially strong and able, in a world which is increasingly short of capital, to give increasing sums to Commonwealth enterprise. It is, therefore, in the financial strength of Britain that the Commonwealth is vitally interested.

I wish to address the House for a moment on the question of the impact on British agriculture. We will hear at a later stage what reasons have induced the Minister of Agriculture, Fisheries and Food to be converted from an opponent into a champion—[Interruption.]—and we shall hear, too from my right hon. Friend the Member for Grantham (Mr. Godber), with his extensive knowledge of the industry, how he thinks the question of agriculture can be tackled during the negotiations.

In advance of that, I wish to make two propositions which sometimes tend to be overlooked. First, the prosperity of agriculture and the countryside depends essentially on the consuming power of industrial and urban workers. As industrial activity contracts or expands, immediately this is reflected in the countryside. If, as I believe, the Common Market increases the general industrial prosperity of Britain, then agriculture will benefit.

But the second proposition is vital and it is this: if agriculture is to expand—and no industry can remain static—the future lies, whether we are in or out of the Community, behind a tariff system with levies on imported food. We are certain—and this applies whether we are in or out of the Community—that that is so, but there are very important questions that must be decided, like the quantity of money that should be returned from the levy pool; will hill farming qualify for grants under the structural grant system within the Community; and what will be the machinery for the Continental Price Review, something that is very important in this context?

This question is essential: is Britain to be part of a small protective market or a large protective market? Believing that British agriculture is efficient and also has, particularly in the production of livestock, very great climatic advantages over the Continent, I would, with all the difficulties of adjustment that I can see, without hesitation plump for the larger market in the interest of all countrymen in this country.

I conclude by a return to the subject of politics.

Mr. George Brown

The right hon. Gentleman has never left it.

Sir Alec Douglas-Home

Not much! The Foreign Secretary is unusually alert, but I wish that he would get to his feet if he wishes to say something.

Some hon. Members will argue that under the rules and with majority voting, however qualified and however limited—and I am glad that the Prime Minister emphasised this point—the encroachment on sovereignty cannot possibly go beyond the economic sphere; that a surrender of sovereignty cannot be taken further unless the Council is unanimous, and that there can be a veto by one nation on any further advance on the Treaty of Rome. Nevertheless, I think that some of my hon. Friends may argue that Britain could be deprived of some sovereignty and that that would be detrimental to our national character and national prospects.

Speaking for myself, I have never feared such an outcome because I believe that the Community will—indeed, must if it is to survive—solve its problems by consent. If any other method were tried—and we had an example of this when the Commission tried to impose some directions on France with which France could not comply—the Community would break. It seems to me, therefore, that it is certain—and this is a point which will, no doubt, be raised later—that the political institutions which may be set up will be those with which the individual partners of the Community can live. That conclusion seems to be certain, and I believe that it must be so.

Mr. Frank Hooley (Sheffield, Heeley)

Is the right hon. Gentleman arguing that the supranational principle is not a valid one?

Sir Alec Douglas-Home

I am more pragmatic—[Interruption.] The international principle embodied in the Treaty of Rome is, in any case, severely limited, limited to the economic field. The danger which, I anticipate, concerns some hon. Members is that it would be extended into the political field and that some imposition would be put on this country which would be intolerable to our feelings and which would, therefore, have to be resisted. I do not believe that this will be a matter of really practical concern and, as I said, I believe that the Community will operate by consent.

The Opposition, of course, cannot have the information which is at the disposal of the Government. The Prime Minister disclosed a lot, but there must be a lot more that we do not know. It is the Government who have chosen the time. It is they who have chosen the method of the negotiations and it is for them to see it through. While, therefore, we reserve judgment on the handling of the negotiations, I trust that, in so far as it is able, Parliament will give the Government a clear directive to go ahead; to apply and to negotiate.

It is all very well to talk about "safety first" and "look before you leap". They are perfectly good slogans in their own way—so long as we remember that "look before you leap" and "safety first" have been the mottos of the stick-in-the-muds throughout the ages.

5.30 p.m.

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

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof 'regrets that Her Majesty's Government, having failed to inform the country of the estimated results of Great Britain's entry into the European Economic Community, have nevertheless declared their intention of applying immediately for entry, leaving substantial matters to be negotiated thereafter, and thereby causing anxiety to our partners in the Commonwealth and the European Free Trade Association and creating the probability of injurious repercussions on British sovereignty and the rule of law, on the price of food, on the balance of payments and on the r61e of sterling in the world'.

Mr. John Rankin (Glasgow, Govan)

On a point of order. As in a little more than two hours the winding-up speeches will be taking place today, and as there are 10 Front Benchers still to come—[HON. MEMBERS: "Eight."]—as there are eight Front Benchers still to come and as we have the speech of the right hon. Member for Thirsk and Malton (Mr. Turton) still before us, is it not obvious that back benchers on both sides of the House will receive very little opportunity to express their opinions in the debate? Would it therefore be possible for the Government to consider providing an additional day for the debate?

Mr. Deputy Speaker (Sir Eric Fletcher)

The hon. Gentleman knows that that is not a point of order. I hope that there will be adequate time for back benchers.

Mr. Turton

I realise that this is an historic debate in which every hon. Member will want to take part and I therefore intend to be as brief as I possibly can. However, hon. Gentlemen will appreciate that I am in the difficulty that the two Front Benches are in agreement and that I represent a minority in the House, although I do not believe that I represent a minority in the country. Provided that I am not interrupted, I intend to be as short as possible and to concentrate on the main issues.

The debate is historic, to follow the remarks of my right hon. Friend the Member for Kinross and West Perthshire (Sir Alec Douglas-Home). It is historic, because, if we join the Common Market, under Article 189 of the Treaty of Rome, no hon. Member will be able to get up in this House and protest and vote against regulations which affect the economic or social welfare of his constituents. For many of us that is the main reason why we take the view which we hold on this issue.

I complain that the Government have not given us all the information before the debate for which we asked. I did not grudge the Prime Minister one minute of his time, for he was dealing with subjects about which the Government had kept us in complete ignorance. Last November, I and many of my right hon. and hon. Friends asked for a White Paper on the constitutional issues. We felt that they were what all the country should know about. We have never had it. We have never had a White Paper on the economic issues. We have only had an article, a very fair and, I thought, damning article in The Times of last Monday. The only two White Papers before the debate have been a repetition of the Prime Minister's statement last Tuesday and the summary of the evidence given before the Select Committee on Agriculture.

There is one point in the Prime Minister's statement of last Tuesday which I would like the Commonwealth Secretary to explain. The Prime Minister said of the negotiations: The House will, I am sure, agree that they ought not to be unnecessarily complicated with lesser issues, many of which can be best dealt with after entry."—[OFFICIAL REPORT, 2nd May, 1967; Vol. 746, c. 311.] After listening to the Prime Minister, I am still not clear what those issues are. I hope that when, in due course, they put their case, the Government will define the issues which they think can be dealt with after entry and that they will tell us how they expect that this country can get satisfaction on those issues after we have agreed to the Treaty of Rome and are then under its provisions. I hope that the issues with which I shall deal today are not regarded by the Government as lesser issues which can be negotiated after entry.

I want, first, to concentrate on the question of Australia, New Zealand and the Commonwealth Sugar Agreement. Last November, I put a Question to the Prime Minister and I repeated it on 2nd May. I asked him whether he stood by his statement of August, 1962, that any provisions dealing with these Commonwealth issues should be permanent and not transitional provisions. I listened with some surprise when he said today that it would be wrong to speculate on the kind of arrangements which could be made. I hope that the Commonwealth Secretary will deal with this tonight.

On 1st August, 1962, dealing with the position of Commonwealth imports after 1970, the Prime Minister said: We have said repeatedly—we must say it again—that no amount of temporary relief will solve the problem. This is not a problem for some kind of Euopean national assistance board. What matters is the position of Commonwealth trade and Commonwealth imports after 1970, and we shall judge the outcome of the negotiations by what those things look like after 1970 and not by the means of temporary relief that might be introduced between now and 1970."—[OFFICIAL REPORT, 1st August, 1962; Vol. 664, c. 706–7.] No transitional relief is sufficient for these purposes, whether for imports of Commonwealth sugar, or Australian, or New Zealand products. Surely this is a duty on the party opposite and on the Prime Minister in particular.

During the course of the election, speaking at Bristol on 18th March, last year, the Prime Minister, speaking again of the temperate foodstuffs from the Commonwealth said: … and those conditions require that we must be free to go on buying food and raw materials as we have for 100 years in the cheapest markets, in Canada, Australia, New Zealand and other Commonwealth countries and not have this trade wrecked by the levies the Tories are so keen to impose. It was on that pledge that the Prime Minister got the votes of thousands and millions of voters. Does he stand by that pledge today? [HON. MEMBERS: "Where is he?"] I make no complaint if the Prime Minister has gone after his exhausting performance.

I now come to the subject of food. The Prime Minister said that the cost of food would rise by 10 to 14 per cent. Have we worked out what that means? Last year, according to national statistics, we spent more than £5,000 million on food. That means a rise in food prices of between £500 million to £720 million. That is what the effect on this country will be and it has been worked out that for a family of four this will mean a rise of 25s. per head per week.

Dealing with this subject, I notice that the White Paper on agriculture says that the increase has been worked out on the basis that it allows for some change in the pattern of consumption, with cheaper foods replacing the more expensive items". In other words, not only will people in England live more expensively, but they will have a much worse diet. The people of England should be told that—and not merely as an aside in a White Paper.

The Prime Minister said today, as he has said on previous occasions, that this effect will be spread over a number of years. I should like Government spokesmen to explain how this will happen. Will it mean that the levy system, when we enter, will not be applied to British imports of food? If so, does it mean that we default on the levy fund? I doubt very much whether that will be possible.

Let us come now to the question of the balance of trade. At present, we export to the European Community 20 per cent. of our total exports. Therefore, 80 per cent of our exports are affected by the common external tariff and the loss of preferences. That will undoubtedly mean a deflection of trade from the Commonwealth and sterling area, and there will be an incentive for the increasing of trade with the Community.

But I hope that the House will realise that for every 2½ per cent. fall in our trade with the Commonwealth, the sterling area and the rest of the world, a 10 per cent. rise in our trade with the Community, will be required to compensate for it, because of that four-to-one ratio. I have been waiting for the Board of Trade to bring out its estimate of what will happen. I was not very satisfied with the very sketchy pattern the Prime Minister gave today.

The Times has gone into this aspect in very great detail, and says that we can expect, if we go in, to get a loss of 5 per cent. in our trading with the rest of the world. What is its estimate of the gain through the E.E.C.? If we are to balance, that gain should be 20 per cent.; in fact, The Times estimates a gain of only 7 per cent. The view of The Times, therefore, is that we shall lose very considerably on our exports by this change. Imports will cost a great deal more—the estimate commonly given is of an increased cost of £150 million.

What about invisibles? The Chancellor of the Exchequer told me at the end of January that 14 per cent. of our invisible trading is with the countries of the Six. Therefore, 86 per cent. of our invisibles relates to the Commonwealth, the sterling area and the rest of the world. It is by our invisibles that we balance our trade. The Times makes out that here there will be a loss to the country of £500 million on current account. Professor Becker-man, of Oxford, thinks that figure too low, and puts it at £800 million. That is one reason why I think that we should not make this change.

Let me deal shortly with what the Prime Minister said of sterling as a reserve currency. There are in London at present net balances from the Commonwealth and sterling area of £2,367 million. The net balances deposited from Europe come to £157 million. In every previous sterling crisis we have had it has been the Commonwealth countries that have stood by us and have not moved their deposits. If we put on a common external tariff against our Commonwealth partners, and encourage them to diversify their trade away from Britain, those deposits will not remain here. I do not see how, if the Prime Minister gets his way, the sterling area can survive in its present form as an international trading currency.

Mr. Robert Maxwell (Buckingham)

Is the right hon. Gentleman aware that the sterling balances retained by the sterling area countries relate to the debts they owe to this country, and that this is one of the reasons why they are here? Secondly, would he not agree that the kind of speech he is making is for the old and the out of date? How does he think that this sort of attitude will appeal to the idealism of our youth?

Mr. Turton

I am addressing my remarks to those people in England who are worried about this proposal, and who know that if this change comes about their food will cost more, that there will be more unemployment and that this country will not be in the proud position she is today.

As for the hon. Member's first remark, I would remind him that what I referred to was the liabilities of the countries, less their claims; that is, a figure of £2,850 million deposited by the Commonwealth and sterling area and £483 million claims, making a net figure of approximately £2,367 million.

I believe that it is wrong at this time to make greater difficulties for sterling as a reserve currency, because it is sterling that provides the network for international financing throughout the world. If we break sterling at the present time, we shall throw a very much greater difficulty on the dollar and stop the achievement of the greater liquidity we are hoping to get.

I do not believe that, if the Prime Minister is really trying to preserve Commonwealth and British interests he can succeed if he stands out for these provisions for which we have been asking, but if he surrenders them he is breaking the word he gave at the election and also the pledge he gave the House on 12th May.

What is happening to the Kennedy Round? To me, the most deplorable part of this venture this month is that just at the moment when the Kennedy Round has some chance of success, when we are trying to get a reduction of tariffs across the board, this venture will mean that we are, presumably, intending to side with the Six against the American views, thereby stopping the Kennedy Round from succeeding.

I believe that, as the Prime Minister himself admitted, there is an alternative course for Britain to pursue. Our advantage has always lain in free and preferential trading. We could pursue a policy of expanding E.F.T.A. so as to include the Commonwealth—and, possibly, Canada and North America, also. I believe that in such a combination there would be no loss of sovereignty, which I dislike in the present arrangement, and that it would fit in with our present pattern of trading. This may be a vision of the future. I regret to say that, contrary to the advice of my party leaders, I cannot vote for this Motion, and have, therefore, sought to amend it. I believe that acceptance of the Motion would lead to a betrayal of the principle of the Queen in Parliament, would be disloyal to our Commonwealth members, and would put unendurable burdens on the British people.

5.50 p.m.

Mr. Michael Foot (Ebbw Vale)

If I cannot follow the right hon. Member for Thirsk and Malton (Mr. Turton) in his other qualities, I shall seek to do so in his brevity and consistency. He has been completely consistent in his attitude to this matter on all the occasions when the House has debated it.

Naturally enough, there has been some discussion about the question of converts in this debate. The right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home) referred to converts. I am not sure whether he was the best person to do so, not because of the "dead duck" speech, but he spoke for part of his time on European matters, and I am not sure whether the last surviving man of Munich in this House should instruct us about the unity of Europe. [HON. MEMBERS: "Oh."] That is perfectly relevant to the debate. One of the reasons why Munich inflicted such damage on Europe was that those concerned sought to make a settlement about Europe leaving out the Soviet Union. That was also one cause of the failures of Locarno and Versailles. I believe that it is on the errors of the policy now being adopted.

I know that there will be further discussion about converts, no doubt. I do not propose to rake up any of the previous speeches of the Prime Minister on this matter. I think that people in this House and outside are perfectly entitled to change their views on these great questions, and I think that the Prime Minister has obviously done so. I only wish he would not be so dithyrambic about some of the prospects on which he was so gloomy before. It was said by the great Lord Halifax some centuries ago in his book, "The Character of a Trimmer" that the impudence of a bawd is as nothing to that of a convert. The Prime Minister, I must say, has become very enthusiastic about the details of the European Economic Community which previously did not arouse any such relish in his mind. That is all that I wish to say on that question.

I should like to add up swiftly—this is one of the advantages of this debate—what is the price that we have to pay, according to the Prime Minister himself. I am glad that it is being admitted that the price is very heavy. If one read some of the newspapers and listened to some of the debate in the country one would almost think that we did not have to reckon the cost. Some newspapers talk as if this is a completely one-sided argu- ment. Nobody can say that after the speech of the Prime Minister.

We have not yet been told what are the undertakings that still have to be carried out to the E.F.T.A. countries. Is the pledge previously made to E.F.T.A. waived altogether? What is the position of the minority countries, perhaps, in E.F.T.A. who do not wish to go into the Common Market? Do we have to preserve special terms for them? The first price that we have to pay is an injury to our relationships with some of the E.F.T.A. countries.

Take agriculture. Nobody in the House in the debate about agriculture has attempted to argue, as far as I know, that the European system and structure of agriculture is better than ours. Indeed, the Prime Minister could not because he once described the European system as a monstrosity. We are now to accept the monstrosity because it in an integral part of the system.

We did not hear much about East-West trade today, although we should have done. It is true that the European Economic Community countries trade extensively with Eastern Europe, but it is also true that countries like Poland, Yugoslavia, Rumania and many others that send goods to us will have a tariff imposed against them. I think that we should be told what that position is. That is also part of the price that we have to pay, an injury to the incipient growth of trade with Eastern Europe.

As to the Commonwealth, even if the Prime Minister carries out the obligations which he said today are our bounden duty—as I understand it, that refers to New Zealand and the Commonwealth Sugar Agreement; and by the use of the term "bounden duty" I understand that if we do not get the terms the negotiations are broken off; that is the only meaning of the words "bounden duty"—and even if we get those terms, nobody can deny that the injury that will be done to the Commonwealth will be considerable. I do not say "disastrous"; I say "considerable" It will encourage still further the decline in our proportionate trade with Commonwealth countries. I do not think anybody will deny that. It will injure a system which has served us very well for the last 20 or 30 years with the Commonwealth. No one can deny that. Some people do not care and do not seem to mind what happens to the Commonwealth now that it is a generally free institution. But some people still do care. It will be a melancholy affair for this country if a Labour Government are to be responsible for inflicting such damaging blows on the existence of the Commonwealth, and I think that that may be the case.

If we take the planning regulations, one of the Prime Minister's main objections in 1962 was the anti-planning philosophy of the Treaty of Rome. He now tells us that we are going to sign the Treaty of Rome as one of the preliminary arrangements, that we agree that we should do it, and that the only changes are those which are consequential upon a new member joining.

It is strange what we are told about this now. We are told two things. First, we are told that we must be prepared to sign the Treaty of Rome to prove our good faith. But if we look at individual items in the Treaty, the Common Marketeers say "You can throw away all that. You do not have to look at the details in the contract". The right hon. Gentleman said that he looked at these matters pragmatically. So they do in Europe. We are all pragmatists now. Unhappily, we cannot say, as Sir William Harcourt said long ago, that we are all Socialists now.

The Prime Minister and all of those of the Labour Party who now sit on the Government Front Bench claimed in 1962 that one of their objections to the Treaty of Rome was that it prevented the kind of planning in which they believed. We want a detailed account of why they consider that position has changed.

We should like some further statement from the Prime Minister about the regional arrangements. He says, that he has examined the matter carefully and is confident that the regional arrangements are changed. I am not so confident. Most of us who come from development areas, from Wales, Scotland and elsewhere, and who have followed the matter with some care over the years agreed with the proposition, certainly after 1945 when in Wales we had the biggest development of new factories going in—nobody could deny it—that the main agency for getting new factories and industry into the old development areas was the arrangement which prevented development in the South East and other industrialised areas.

But it is precisely that part of our regional planning arrangements which is to be undermined, even on the testimony of the Prime Minister himself today. I say to all those who come from development areas that I do not believe that we have had a satisfactory explanation of that point. It is another part of the price that we should have to pay—a further injury to the prospects of building up the development areas. It will not be possible for a Government which goes into Europe to decree that our own industrialists, or less still, industrialists from elsewhere, shall go to those development areas. We can give the inducement but we shall not be able to maintain the negative procedures in future. That is a fierce blow at the whole of the regional development plans.

There is also the question of the democratic institutions. I am not denying that we should still exercise great power in Europe, but the Prime Minister has admitted today—which he could not help admitting—that we should have to accept the decrees of the Community on a whole vast range of matters covering our economic affairs. Hon. Member may argue that we should accept this for other reasons. I am merely tabulating the price which the Prime Minister acknowledges that we should have to pay. There may be reasons for paying it, and I will come to them in a moment. But part of the price—no one can deny it—is a diminution in the power of this House of Commons to control our own economic affairs.

When we get into Europe we may try to improve the Community institutions. I hope that we shall. If we get there I hope that we shall try to introduce some democracy into the whole apparatus. But there is precious little democracy in their set-up at present. Some of my hon. Member Friends say—and I well understand the argument—that the only way to make it democratic is to go to the full federal solution. That is a logical argument. Then there would be a European Parliament, with Members from Wales and elsewhere. I understand from the calculations that there would be one Member from Wales. I am not speculating who he would be, but he would have to be very vocal to persuade all the countries in Europe to do better for Wales than we have done already.

I come to the biggest debit of all, which has been quite rightly analysed by the right hon. Gentleman—the balance of payments. We have been plagued by this balance-of-payments problem ever since the end of the war. It has been the curse of this country and our economic affairs. It has prevented both parties from embarking on the expansion that we require. Whatever we think about the methods which we have used to achieve it, we all hope that the balance of payments will be in surplus this year and that we shall be able to sustain that surplus. But under arrangements with the Common Market, what we are proposing to do is to undertake what is indisputably a heavy, fresh, extra strain on our balance of payments.

Whatever may be the figures—whether it is the £500 million quoted by my right hon. Friend from The Times article, or the higher figures which have been quoted, or the lower figures calculated by the Prime Minister—there will be a heavy extra strain. I thought that this part of the Prime Minister argument was the weakest part of his speech. I wish that he could wave away our real balance-of-payments problem as easily as he waved away this future problem. I wish that the magic wand would work as well with our present balance-of-payments deficit. How did he do it? He said, "It is only about £100 million a year, and that is only 10 per cent. of the extra growth which we shall get when we get into the Common Market. It is 10 per cent. of £1,000 million a year". If ever an uncaught hare was served up with sauce and gravy, that was it.

What some of us will do, and what I am sure the country will do, in the coming weeks is to examine the facts and figures. I am not adding up the prices, for I do not wish to depart from the addition sum done by the Prime Minister. I am dealing with the burden which the Prime Minister admitted that we should have to carry. But it is my opinion that if Britain goes into the Common Market, if she succeeds in getting in, we shall be adding a heavy strain on our balance of payments for the next 10 years.

I hope that all my hon. Friends who speak so eagerly for going into the Com- mon Market will not squeal when Ministers—the Chancellor of the Exchequer and others—say, "We are very sorry, but we have to sustain a deflationary policy, we have to sustain a wage freeze, we must go cautiously about providing for children and making other social provisions because, unfortunately, over and above the other difficulties we have with our balance of payments, we have to deal with an extra burden of £200 million, £300 million, £400 million, £500 million, or £600 million which we have undertaken as a result of our entry into the Common Market". That is the price that we shall have to pay. It is a very heavy price and it ought to be truthfully stated and truthfully argued before the country.

Of course, there are conceivable advantages in going into the Common Market. Anyone who said that there was not a balance of argument, or that there was no argument, would be a fool. I do not propose to attempt to answer the argument about technological scale, which is the principal economic argument used. It is a purely speculative argument. I am not saying that it is not a good argument. Perhaps it is quite valid. But, as the Prime Minister said and as others say, it is one which cannot be quantified. In other words, it is a gigantic guess.

Over and above all that, the principal reason for the Prime Minister's conversion is a political reason. That is what he said when he addressed some hon. Members in another place and what he said today. I am sure that that is the honest reason why he has changed his mind. I must admit that I have never seen the Prime Minister as a romantic type, but he has been converted to some rather romantic notions. I never expected him to career around Europe like Don Quixote, although I recognised his Sancho Panza.

It is not the case that if we do not get into Europe we are robbed of our political influence. All diplomacy does not end if we are not able to get into Europe. This country will still be able to exercise its power in the affairs of the world. In my opinion, if we could keep the Commonwealth together, and if we could keep E.F.T.A. together—which I should like to see; and I believe that we could do it—and if we could strengthen the Commonwealth, although there have been precious few propositions for doing that recently, then we could greatly enhance our influence in Europe, too.

When the Prime Minister tells us that his primary reason for getting into Europe is political, I wonder how he attempts to exclude from the discussions all matters of defence and of foreign policy. It is impossible for the Prime Minister to argue to the House and the country that nuclear defence matters will not figure in the eventual negotiations about our entry into Europe. The Prime Minister was one of the chief people who said—and I believe rightly—that one reason President de Gaulle took the attitude which he took in 1962–63 was the Nassau Agreement which, after all, had something to do with defence.

I had put down a Question to the Prime Minister tomorrow to ask whether he had concluded his re-negotiation of the Nassau Agreement. I thought that it was a topical question. He has referred it to the Foreign Secretary who, unless we make him do so, will not have to answer it until this debate is over. It is a very serious question. I am glad that the Prime Minister made a statement that he is absolutely opposed to making the British nuclear weapon a contribution to the European nuclear deterrent. I am very glad that he gives that undertaking.

But I say to him—and I may be completely wrong—that I think that it will cause some difficulties, at any rate, in negotiations, because President de Gaulle, strangely enough, is quite interested in these matters of defence and is also much interested in matters of foreign policy and the relationship between this country and the United States. I do not wish to debate matters which we debate on other occasions, but I say clearly that every time the Foreign Secretary or any other Member of the Government makes a speech in full support of American policy in Vietnam—100 per cent. support according to Vice-President Humphrey—he drives another nail into the coffin of his European enterprise.

The French will not agree to a proposition that we should go into Europe and sustain the kind of relationship which the present Government has sustained with the United States of America. That is what de Gaulle inferred in his Press conference in 1963. Anyone who reads it will see that it was the American attitude over Cuba, the belief of President de Gaulle and the French Government that their interests, European interests as they saw them, were in conflict with American interests, which prevented our entry then, or very largely did so.

I may be wrong, but I believe that President de Gaulle and the French Government will take very much the same view now and, therefore, in my belief we shall not get into the Common Market. That is one of the reasons why I do not think that we should have made an attempt now. It would have been much more sensible and better for European unity and increasing our political influence in Europe if we had first established this country's economic independence beyond any doubt and challenge, and in the meantime said to de Gaulle that having examined all the facts about the Common Market again, as we are entitled to do, we think that in Britain's interests it is more advisable for us to stay out but we wish to have the closest relations with President de Gaulle and with France, our oldest ally and most indispensable friend. We could have said that, and if we had relaxed our pressure to get into the Common Market we could have got closer relations with de Gaulle and the French Government.

We are entitled to form our views on this, and I take the advice of my right hon. Friend the Prime Minister and try to weigh up the cost, and what I believe will not only be a loss of economic advantages to this country but will be a serious political setback. I think that in two years' time, because of what I think will be the French response, we shall be debating the consequences of failure, and shall have to start then from where we should have been starting, or from where some of us said we should have been starting some time ago—to achieve the economic independence of this country, which can be achieved.

I acknowledge that the Prime Minister said that it was foolish to say that there was no alternative, and I hope that no hon. Member in the debate will say that there is none. The Government know the alternative. They have it in the pigeonholes, and may be they will publish it in two years. It would be better if they published it now, so that the whole country could judge the calculations of what this country could be if we applied our minds to building up our strength, building it up in a wider world than Western Europe.

I now come to the vote that takes place, the old-fashioned custom that takes place in this House of Commons, and which will, I hope, survive in the days to come. I am not talking about the right hon. Gentleman's Amendment, which he moved so well, but if the Government's Motion approving the White Paper were to go through without any opposition, merely with some hon. Members saying that if there were a vote they would abstain, but as there was not a vote they were unable to register their views, that would be a farce. There would be a unanimous approval in the House for the White Paper, and I hope that I have indicated that the approval is not unanimous. I think that the best way for us to say that, to avoid the farce of having the failure to represent opinion in the country about the subject, the failure to represent properly to the people in Europe the feeling that exists, is to have a vote. That is what I propose.

If anybody will join with me on the Government's Motion, I propose to vote against it. [HON. MEMBERS: "Hear, hear."] There was some argument in days gone by as to the posture in which we should go into Europe. Some say that we should go in with heads high; some say that we must not crawl in; and some say that we must not stumble in. I say that we must not be "whipped" into the Common Market. I certainly do not propose to be.

6.16 p.m.

Mr. Duncan Sandys (Streatham)

I disagree with almost everything the hon. Member for Ebbw Vale (Mr. Michael Foot) has just said, but, in common with the whole House, I enjoyed every moment of his speech.

Out of deference to the many other hon. Members who wish to speak I intend to be very brief. I think that the House knows where I stand on this question. For over 20 years I have been campaigning for the creation of a united Europe. I believe that there is no objective of British foreign policy which is more important or more urgent. Therefore, in my opinion, it was a monumental understatement when the Prime Minister said last week that any of the other alternatives would be a second best. If, for whatever reason, our efforts to join the Community fail again, it will indeed be a black day for Britain and for Europe.

We recognise that our entry into the Common Market would raise quite serious difficulties for certain sections of our industry and agriculture. The Prime Minister said a good deal about that this afternoon. But I have no doubt whatsoever that the balance of economic advantage is overwhelmingly in favour of going in. It is not only we who would benefit. We have as much to offer Europe as Europe has to offer us.

But this is not exclusively an economic-issue. I have always attached even more importance to the political advantages of European unity. In this age of super-States, Britain by herself is no longer in a position to exercise any really effective influence in international affairs, and it is as well to recognise that. Neither can Europe without us claim a seat at the top table. But together, we could be one of the giants.

The crucial negotiations which will take place in the coming months will determine whether Europe, which has so long led the world, is still to play a decisive part in human affairs, or whether we are to be content to fade out and to leave America, Russia and China to shape the course of history.

That, and nothing less, is the issue.

6.18 p.m.

Mr. James Griffiths (Llanelly)

I join the right hon. Member for Streatham (Mr. Sandys) in saying that I listened to my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) with intense pleasure. I always listen to him with intense pleasure, but this evening I shall disagree with him, for when the time comes I shall vote for the Motion moved by my right hon. Friend the Prime Minister for what I regard are the basic reasons submitted by him as to why the Government have come to this decision.

It is an important decision. It will mean a break with the past for us, and it is quite clear from our constituents as well as our own feelings that for an old country like ours a break with the past invokes nostalgic regrets and doubts. References have been made to some of my hon. Friends as "ancient Britons". Perhaps I am one of the few here who can claim to belong to the real ancient Britons of this country who, in the years gone by, have survived the invasions of Europeans and others.

I understand those who have a feeling that we are venturing into the unknown, the consequences of which none of us can predict with any certainty. What is certain is that we shall be entering into new associations, new alignments and new policies which are bound to bring changes and to mean adjustments and in consequence will bring pains as well as opportunities. But I have lived all my public life in a part of the country which has gone through such changes. We have witnessed the disintegration of an old industrial system and the long and painful task of building a new one in Wales. I believe and am confident that a new one is emerging and in what I have to say I shall include something about the implications of change for Wales, for my own people and for my own old industry, coal mining.

I want to tell the House why I have come to the conclusion that I should vote for the Government and why I believe that the Government are right in seeking, on the terms and safeguards of the White Paper, membership of the E.E.C. I do not profess any expert knowledge. I can only talk on my experience—31 years in this House and as a member of two Labour Governments. I shall state the position as bluntly and as frankly as I see it.

Ever since the end of the Second World War, which was not very long after the First World War and which came after 20 years of depression had laid foul hands on every country in Europe, we have made painful efforts—I shall not distinguish between one side or the other in this—to achieve and to maintain economic growth and viability. We have not succeeded.

I remember 1945 well and the task which faced the Labour Government which came into office then. I remember the problems we had to struggle with and I say to my right hon. and hon. Friends that, unless this country can promote economic growth at a continuous rate, we are not going to achieve the objectives we were sent here to achieve. It is essential to all we want. I remember how, after the war, we were driven to devaluation. I recall the consequences. I remember the Herculean efforts, then and since, to try and win economic viability and solvency for our country and to promote economic growth so that we might achieve the objectives we all desire. We have not succeeded.

I therefore accept what my right hon. Friend the Prime Minister said in his statement last week. He told us that the Government had made their decision on broad economic grounds. He asked all of us to make the assessment for ourselves of the economic consequences of not entering the Community and of seeking to establish economic viability outside it.

My own view is that, as we enter this new technological age, this age in which industrial units grow ever larger, as industry becomes ever more capital intensive, as more and more of our industries require wider markets, our country has to find a place in a wider community, otherwise we shall not get the viability or economic growth that we need. All the devices and all the policies we have all tried since 1945 have failed to give us economic viability and growth and so many of the policies that we want to operate have not been able to be achieved.

I am in the autumn of my career and I do not want this country to go on living in this kind of economic twilight where the things that we all want to achieve and do for our people—the social progress we want—are brought up short all the time because we find ourselves in difficulties with the balance of payments and in other difficulties. Now we have this great opportunity. Of course there are risks, and my right hon. Friend the Prime Minister—and I greatly appreciated his speech today—has spelt them out. If he has not done so to the satisfaction of every hon. Member, he has gone, as he promised to do, through the whole list—the implications involved and the price we have to pay. He has made the situation clear and we ourselves will all have to face questions from our constituents about it.

We ought to enter the Community. By joining this wider market we shall have an opportunity of making our contribution. I do not want to go in begging. Why should we? Sometimes I get wild with those who ask me and others to be "good" Europeans. If it were not for this country there would not even be a Europe to discuss today. So we can go forward with our head high. We have a great deal to contribute. We have much to give. Europe will be stronger industrially and economically and more mature and powerful politically and democratically for our presence.

At the same time, of course, we are entitled to raise questions about our negotiations. So far, for example, nothing has been said about the fact that, in addition to joining the Community, we should be joining the Euratom and the Coal and Steel Community as well. I hope that the Government will say something about this aspect because we understand that, subject to what may happen at the summit conference of the Six at the end of this month, these communities will be merged into the E.E.C. I hope that my right hon. Friend the Minister of Power will make a statement about what he feels are the implications and opportunities for our fuel and power industries within the wider Community.

I understand that my right hon. Friend the Minister of Power is engaged in a survey and assessment of the fuel and energy needs of the country for some years ahead and of how our fuel and power industries, both the old ones and the new ones, such as the North Sea gas discoveries, are to be fitted into that pattern. He and his advisers are working on a fuel and power policy for the future, something which we have wanted for a long time.

I hope that my right hon. Friend will take the opportunity to make a statement to us indicating how he sees the work he has been doing on a fuel and power policy fitting into the pattern of the Community if we enter it. Meantime, there is one bit of cheer for an old industry going through a difficulty time. I understand from my old friend Lord Robens and from the National Coal Board that one of the possibilities and opportunities they are determined to seize is to make at any rate a modest increase in coal exports to Europe. Perhaps my right hon. Friend sees an opportunity for steel as well.

Now I want to express the genuine anxieties that are being felt about Wales. There is the anxiety about agricultural policy and its effect upon Welsh agriculture and the farming pattern, particularly on the small farmers and the hill farmers. I look forward to hearing my right hon. Friend the Minister of Agriculture, Fisheries and Food on this matter. Not only because of the changes which may come with entry but because Welsh farming is going through changes now.

None of us should have any illusions about agriculture. It will not go on without any change at all. Let me state what the change means in Wales over the last 18 years. Year by year the number of people employed in agriculture there has gone down. We have lost four or five communities every year. Because we belong to a different country, a different race, with a different language, agriculture in Wales is not only a way of livelihood; it is a way of life.

It evokes not only economic and industrial concern; it evokes very deep emotions. I hope that something will be said in the course of this debate about agriculture. I am sure that my right hon. Friend the Minister of Agriculture will have something to say. I have been reassured by the Prime Minister's speech, and there is just one point, to which my hon. Friend the Member for Ebbw Vale has referred, upon which I would seek further reassurance. I have read in the newspapers and in documents, how all the countries within the Community are confronted with the same kind of regional problems as we are. They are all confronted with the consequences of this modern industrial society, with its tendency for industry to become more and more concentrated in conurbations, and for wide areas of the country to be denuded of industry and population.

This is most interesting because always in these matters we think about France and the General. One of the interesting things that I read recently was in the Daily Sketch, about the new steps being taken by France to deal with her regional problems. The country has been divided into separate regions for development purposes, and development officers have been appointed. Incentives have been provided, very much on the pattern of our development policy. The other thing in which I was interested was to learn how the French Government in its development and regional policy, realises that one of the essentials of a successful regional policy is to take steps to provide a counter-attraction to the pull of Paris.

We must have a counter-attraction to the South-East. This has reassured me, because if other countries can adopt policies of regional development of this kind, what can prevent us? It is absolutely essential that the full powers of the I.D.C. shall be kept. My own view is that without these powers no regional policy can succeed. It will be understood how vital this is to my country, because so much of the concern there is due to the fact that if we enter the European Market we shall be at the end of the line, the furthest away.

There will be the pull of the South-East, and, if we enter the Community and if in X years we have a Channel Tunnel, this will exercise an increasing pull towards the South-East, away from the West. These anxieties are felt very deeply. The Prime Minister has reassured me to some extent, but I want to be reassured again that our policy of I.D.C.s and the other policies, will not only be kept, but that the)' will be expanded and developed to meet our needs.

I should like to say a word about social policies and national insurance. When I was Minister of National Insurance, we negotiated an agreement with France. Then, in 1945–46 we led Europe, but now Europe, in many ways, leads us. I have no fear that when we come to harmonisation of social policies in Europe, on the basis of our existing relationship through the reciprocal agreements, we shall be able to harmonise social policies in Europe which will be better than any in those countries at present.

Mr. Will Griffiths (Manchester, Exchange)

My right hon. Friend will recall that there is nothing in any of the Western European countries like our National Health Service.

Mr. James Griffiths

I agree. We were not able to sign a reciprocal agreement on the National Health Service. We found very great difficulty in getting a reciprocal agreement on some of our social services. We have been discussing one quite recently, family allowances, and because ours was so meagre compared with the others we did not reach agreement. We have adjustments to make to harmonise our social policies.

From the beginning, for me the attraction of entering the European Community has been political more than economic. I have never been too much in love with economic policies pursued in Europe. In my view, we must find wider economic markets, and there is no alternative at the moment. There is no reason why we should go on asking for safeguards for our Commonwealth. We are all equally responsible in this. We are all old imperial powers—France, Germany, Holland and the others. I hope that we shall put this question of the Commonwealth on a basis common to all, on the basis that we all have an obligation to the countries which in the past were conquered, acquired and colonised, and, let us admit it, exploited by us.

Let us be frank about this. Our standard of living has been built, in part, upon their poverty. In moving from empire to independence we had made as good a job of it as any other country in Europe, but we all owe a duty and a responsibility to these countries. We should put this on the basis that our Commonwealth, and all the other countries associated with us, and Europe, have a moral responsibility. All the European countries, when we come to negotiate, should be ready to do our plain honest duty to those for whom we have great responsibilities, and who in the past have contributed richly towards our standard of life.

One of the things which have cheered me on my visits to Europe in recent years has been the determination among the young Frenchmen, the Germans and the Belgians, and the young people from other countries to build a new Europe. Europe and ourselves have paid a terrifying price for our divisions, our nationalisms. I was greatly moved by the idealism of the young people, who were determined to build a new Europe, not a Europe which would be shut out from the world, but one that would contribute to the world.

I hope that we are going into Europe with that determination. I am not afraid of surrendering sovereignty. All the Powers in the world will have to surrender their sovereignty, or we shall destroy the world. If we are not prepared to surrender some of our sovereignty, why did we join the United Nations? Why do we join any international organisation? I am not afraid of that. I am afraid of nations sticking to their narrow sovereignty. We have an opportunity here and I hope that we shall take it as a mature democracy in the economic field, the field of technology and expert knowledge and as a contribution which ordinary men can make.

Economically, I am not afraid of taking all these risks because in the end I believe the risks will be worth while. Our young people in these days need an ideal. If I am worried about anything in these days, it is about what I read of the growth of cynicism among young people. They realise that we must make a bold new venture to build a new Europe and a new world. Let us go into it with a deep resolve to play our part in creating a new Europe which can stand on its own feet and contribute to lessening the terrifying gap between the poor nations and the rich nations of the world. I do not want a Europe which will be a rich club, but I think we have an opportunity here. I wish my hon. and right hon. Friends all success in the great venture they have entered upon. I hope that we shall give them our vote and support on Wednesday night.

6.42 p.m.

Sir Ronald Russell (Wembley, South)

I support the Amendment moved by my right hon. Friend the Member for Thirsk and Malton (Mr. Turton) on which we hope to divide the House on Wednesday night. I agree with everything he said, but I want to concentrate mainly on Commonwealth trade because I happen for the moment to be Chairman of the Commonwealth Producers Organisation, which has as its members over 50 organisations of primary producers and marketing boards in all parts of the Commonwealth. Its members are anxious now, as they were five years ago, about where the policy of the British Government may lead them.

I know that some of my colleagues on the Council in London of the Commonwealth Producers Organisation will disagree with what I am about to say, but no doubt one or two of them may be able to take part later in the debate. So far all we have had from the Prime Minister about safeguarding the interests of the Commonwealth in the speech he made today and in the statement he made last week was about New Zealand and the Commonwealth Sugar Agreement. When he mentioned New Zealand in his speech today I understood him to say that it was the bounden duty of the Government to "seek the necessary safeguards". I did not hear him use the words "achieve the necessary safeguards", which is quite different. All that he thought the Government had to do was to seek them. What is to happen if we do not find them?

As the hon. Member for Ebbw Vale (Mr. Michael Foot) said, that would be an end to the negotiations. We cannot let down New Zealand which depends so much for its exports on markets in this country. I understand that in the last negotiations it was generally agreed by the Six at one time that the problems of New Zealand must be given special treatment. I also gathered that afterwards the French went back on that and said that they had not necessarily accepted it. I agree entirely with what has been said about the Commonwealth Sugar Agreement. It would be ruinous if it were phased out.

I noticed the other day that the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) asked that it should not be phased out as it would bring ruin to Jamaica, Barbados, Fiji, Mauritius and Guyana. They are all dependent entirely on sugar, as are the sugar-producing areas of Australia and South Africa. We should not forget that although South Africa is not now in the Commonwealth, it is in the sterling area and the Commonwealth Preference Area. It would be stupid to substitute high-cost European beet sugar for efficiently produced low-cost Commonwealth cane sugar.

The Prime Minister the other day dismissed all the other items of Commonwealth trade as a thousand different items of the lower groceries type."—[OFFICIAL REPORT, 2nd May, 1967; Vol. 746, c. 323.] I do not know what implication he meant to give to that expression, "lower groceries type". Presumably he was implying that we should hope for fair treatment of those commodities at the hands of the Six once we were inside the Community. But once we have signed the agreement and are inside the Community, and the Six refuses to come to agreement on all those items of "the lower groceries type", what redress shall we have? This is a poor way of looking at our obligations to the Commonwealth.

Our imports from the Commonwealth, including the major items of "the lower groceries type" cover 30 per cent. of our total imports, in round figures. That was the statement made by the President of the Board of Trade on 8th March in answer to a Question. Those imports are vital to large communities of primary producers of agricultural products throughout the Commonwealth and part of a reciprocal system which provides markets for 28 per cent. of our exports. That again is a figure which was given by the President of the Board of Trade on the same day.

So many inaccurate figures are given about Commonwealth trade that it is worth looking at some more figures given by the right hon. Gentleman on that occasion. In 1938 Commonwealth countries, excluding South Africa, took 30.5 per cent. of our total exports and in 1965 they took 28 per cent. In the same year they supplied 34.5 per cent. of our total imports and in 1965, 30 per cent. That small decline in imports is quite understandable because most of our imports from the Commonwealth are foodstuffs and our appetites, once satisfied, are constant, but, as the absolute level of our imports increases with the rising standard of living, the proportion represented by food naturally falls. That accounts for the falling off in the share of Commonwealth trade. On the other side of the question the market of 28 per cent. in exports is not to be dismissed lightly.

In parenthesis I ask why the champions of joining the European Economic Community tried to mislead us by talking about a new market of nearly 300 million people. Our manufacturers already enjoy free access to our own home market in the United Kingdom and will continue to do so unless and until we throw that market open to competition from the E.E.C. They also enjoy access to the market of E.F.T.A. except in one or two instances such as motor cars which cannot go free into Norway and a few other tariffs which still remain. The population of the remainder of the Community, as quoted by the Six themselves in some publications, is 178,500,000, not 300 million. So the figure of 300 million is completely misleading.

Mr. R. Gresham Cooke (Twickenham)

Is not the argument that if we add E.F.T.A. to ourselves the number comes to about 300 million?

Sir R. Russell

That is quite true, but the point I was making is that we have already a market of over 120 million which we enjoy without competition. Therefore, what we would gain is a market of 178 million, not 300 million. Europe is an auspicious market for our sophisticated manufactures. Our leading manufacturers have not so far failed to take advantage of that market by in many cases establishing themselves on the other side of the tariff wall. So it does not matter from that point of view whether we go in or not. But the mere 755 million population of the Commonwealth is supposed to offer a less valuable market because many of these people have less sophisticated tastes.

That argument defeats itself, because if they are really so far behind Europe—and we know that they are behind—they have a much greater growth potential for the future than has the market of the Six. Australia and New Zealand will not always get along without computers, nor even, perhaps, will Mauritius, Tonga or any of the smaller and less-developed countries of the Commonwealth.

Meanwhile, we should remember that in 1966 the people of New Zealand spent £47 per head on buying British goods; those of Australia spent £22 a head and the West Indians spent £21 per head. The people of the Six spent £5 a head and the United States, although it is our biggest customer, spent £3 a head. Those figures are not mine. They were given by the President of the Board of Trade in answer to a Question at col. 297 on 8th March.

Where, then, does our best economic interest lie? Eighty-five per cent. of our exports to Australia receive preferences averaging 12 per cent. The same proportion of our exports to New Zealand has preferences of about 20 per cent. Over the whole Commonwealth preference area, including South Africa and those countries which, because of historic treaties, do not give us any preference—like Kenya, Uganda, Tanganyika and Ghana—the total proportion of our exports which receives preference is 55 per cent., or just over one-half, and the average margin is 12 per cent.

To dismiss everything except New Zealand pastoral produce and sugar as a "thousand items of the lower groceries type" is, to my mind, of the utmost folly. It would be a stupid village grocer who, on his first courtesy call on somebody who came new to the manor house to live in the village and before he had a firm order from him, agreed to discontinue the cash discounts which he allowed to the faithful group of villagers who were buying 28 per cent. of the produce from his shelves. That, however, is what the Prime Minister seems to have in mind. I cannot help saying that I disagree most strongly with his policy. I hope we shall not go in, and I want to emphasise that there is an alternative.

My right hon. Friend the Member for Kinross and West Perthshire (Sir Alec Douglas-Home) referred to people who were not prepared to take a lead in this or to take a chance as stick-in-the muds. The largest piece of mud in which this country has got stuck in recent years is G.A.T.T., which was negotiated 20 years ago by, if not the Prime Minister, at least the late Sir Stafford Cripps. That has bogged us down and stopped us from expanding the system of Commonwealth preference on which the prosperity of this country and of the Commonwealth has been built up in the last three centuries.

That is an alternative policy. I know that G.A.T.T. is an obstruction. It prevents the extension of any existing preferences or the introduction of new ones. G.A.T.T. was foisted on the world largely by the Americans. We want to get out of being stuck in this piece of mud. The way is to get G.A.T.T. amended and to go forward on a Commonwealth policy, continuing what has been so successful in the years gone by.

6.53 p.m.

Mr. Alfred Morris (Manchester, Wythenshawe)

I much admire the fortitude of the hon. Member for Wembley, South (Sir R. Russell). In speaking in this House he overcomes a grievous physical handicap. I am sure that hon. Members, on both sides, will admire the strength of conviction which he injected into the speech which he has just delivered. [HON. MEMBERS: "Hear, hear."]

It is one of the duties of every right hon. and hon. Member who speaks in this House to try to reflect the views of the men and women whom he represents here. What has been impressed upon me day by day recently, and with more and more emphasis, is that the people have not been given all of the necessary facts on which to make a judgment about whether Britain should or should not seek to enter the European Economic Community.

Following the speech today of my right hon. Friend the Prime Minister, I am pleased it can now be said that many of the prejudices of hon. Members, on both sides in this debate, can be clothed with more facts than were previously available. I hope that as the debate proceeds and gathers pace, there will be no issue, great or small, about which the British people will not have the facts available on which to make a judgment.

The prospective increase in food prices, to which my right hon. Friend referred at length in his speech, has been a cause of particular and widespread concern in the country. There have been some exaggerated statements about the effect on food prices. Nevertheless, the anticipated increase of between 10 and 14 per cent. has been a source of deep anxiety to all of my constituents with whom I have discussed the problems of entry.

There is something faintly upper middle-class in implying, as some commentators have done, that this is simply a question of people digging deeper into their pockets, or rather purses, to find the extra money for a policy of dearer food. There are many working people in my constituency who put it to me that, if food increases sharply in price, there will be. no question of their finding the extra money. Their fear is that they will have to accept, at least ad interim, a reduction in either the quantity or the quality of the food which they eat. That is the approach of many working people to increases in food prices, and their viewpoint deserves to be put against what I would call a rather upper middle-class approach to prices and food.

There is also the point, which has been eloquently made by Professor J. K. Gal-braith, the distinguished American economist, that any increase in food prices cannot be considered in isolation. In a statement last December, Professor Gal-braith pointed out that export prices are more critical for this country than for any other country in the world. If food prices increase, as my right hon. Friend the Prime Minister noted this afternoon, wages and salaries must also increase. We only deceive ourselves if we think that it is possible to increase prices without increasing wages and salaries, at least over time. Moreover, as wages and salaries increase, industrial costs and export prices will increase. It has yet to be demonstrated that we can still export to many of the markets to which we are successfully exporting today if there is a drastic increase in our export prices.

The hon. Member for Wembley, South referred to Commonwealth trade. I have recently been to both Australia and New Zealand, from which I returned only some 10 days ago. It was pointed out to me in Australasia that Britain's total exports to the Commonwealth in 1966 were £1,305 million. It was also emphasised to me that our exports to the main Commonwealth countries per head of the population of those countries is larger than to almost any other group of countries in the world.

Some figures have already been given in this debate and need not be repeated, but a further point which was made to me most emphatically was that the importance to Britain of Commonwealth trade is even greater than the bare figures suggest, because of the nature of that trade. A very high proportion of our imports from the Commonwealth consists of the essential foodstuffs and materials which are basic to our economic future.

I was told by some New Zealanders to whom I spoke that those who speak of protecting New Zealand's interests in any negotiation ought to try to avoid condescension. I was told that New Zealand's interests are also Britain's interests; that Commonwealth trade is a matter of mutual interest. In New Zealand, as in some other countries I visited, I came across one name more often than any other. It was the name "Manchester". I have the honour to represent one of the Manchester constituencies and, almost wherever I saw a turbine or piece of heavy industrial equipment, I saw such names as "Metropolitan Vickers", "Mirlees" and "Mather and Platts". They are all firms in the Manchester area, where many of my constituents work and the security of many of the workpeople I represent is closely linked with the ability of these firms to export.

I warn anyone who speaks to an Australian, a New Zealander, or indeed people from other Commonwealth countries about protecting their interests, to try to avoid condescension, because people from those countries will say "Watch your own interests as well". They will be quick to point out that trade of the order that I have mentioned is of massive importance to the people of Great Britain.

It was also put to me by New Zealanders that they see this issue as a serious test of the willingness of the Community to adopt an attitude which looks outwards beyond the boundaries of Europe and takes account of the interests of those countries whose historical and economic development has been closely linked to that of Europe. The continuance of our trade with New Zealand, Australia and Canada is a very good test of the attitudes of those with whom Her Majesty's Government will be negotiating.

I have said elsewhere in this building that he who says that New Zealand is the main Commonwealth problem—and there are many who do—is showing a tinge of racialism. New Zealand is the main problem of the white Commonwealth countries. But an even more serious Commonwealth problem is that of the poorer, developing countries. Many of them are one-crop countries which rely for their exports on the Commonwealth Sugar Agreement. In Mauritius, sugar cane is cultivated on 215,000 acres or 92 per cent of the area of the country under crops. Ninety-seven per cent. of that country's exports are in sugar or sugar by-products.

It has been said today that it is our bounden duty to protect the interests of the poorer Commonwealth countries in any negotiations. I was extremely relieved, indeed, proud—to hear that pledge given. The fact is that, in places like Mauritius, this debate is not just a matter of academic interest. If there had been any question of the Commonwealth Sugar Agreement being phased out, it would have meant economic, social and political disaster for Mauritius. Her people are very poor. The standard of living of most of them is deplorably low. Twenty per cent. of her people are unemployed and women do not register as unemployed. Last year, there were 14,000 school leavers in Mauritius, only 900 of whom found jobs.

Now it must be emphasised that while this is an economic problem for Mauritius, it is a moral problem for this country, and I hope that hon. Members on both sides of the House, regardless of what they feel about the definitive question, will insist that the moral questions must be non-negotiable.

Fiji too is in a very similar position to Mauritius. Fiji relies almost completely upon her exports of sugar and copra. There has been little reference so far to copra, but I was in Suva during the past fortnight and met a number of experienced and representative people who argued that Fiji is almost as concerned about the export of copra as she is about the export of sugar. When this part of the debate comes to an end, I hope that we shall hear something about our protection of the interests of the Fijians in respect of this commodity.

I am reminded of a point which was made in The Times recently by Mr. Ian Trethowan, who is, of course, a very respected journalist among hon. Members on both sides of the House. He made a little joke to the effect that to many Europeans, arguments about West Indian sugar and New Zealand lamb resolve themselves into the question: "Do you want to join Europe or do you just want to run a counter in our supermarket?" I hope that readers of The Times who chuckled over that joke will reflect that the E.E.C. sugar regulations as now drafted are designed to support the production of beet sugar at the expense of cane, and so destroy the social and economic foundations of countries like Mauritius, Fiji, Swaziland and the West Indies which are dependent on their exports of cane sugar. It would be cynical beyond belief if anyone in Britain, in a bid to get richer, should be prepared, into the bargain, to sacrifice relatively poor and small countries most of whose societies and industries we created for our own ends.

I should now like to warn observers abroad, who will be looking carefully at the outcome of our debate on Wednesday evening, that there will be people supporting this Motion who do not believe in it. In a spirit of friendliness, I warn the present members of the European Economic Community that many right hon. and hon. Members will go into the Lobby to support this Motion who do not believe in it. One of them is the right hon. Gentleman the Leader of the Opposition, who said on 26th January: The Government must state absolutely, unequivocally, that it accepts the Community as it is today, the Treaty of Rome, the common external tariff, the abolition of the internal tariff, the common agricultural policy and the movement towards economic union. That speech was immediately called an outburst by many people who read it. The right hon. Gentleman spoke again in March to young Conservatives in Westminster and made an even more complete endorsement of the case for unconditional entry into the Common Market. Before he goes into the Division Lobby on Wednesday night, I would remind him that the White Paper speaks about the negotiations which must precede entry. As the Prime Minister's statement of 2nd May put it, It is in this spirit that the Government intend to embark on the negotiations which must precede entry."—[OFFICIAL REPORT, 2nd May, 1967; Vol. 746, c. 311.] I am satisfied that the Leader of the Opposition and others—there are even some on this side of the House—are people who believe that we should accede to the Treaty of Rome unconditionally and immediately. If that is still their view, they should have the honour to vote accordingly on Wednesday night. Alternatively, they should repudiate their own recent speeches.

Perhaps I might also warn some of my hon. Friends against the use of exaggerated language. If they would like to know why there are people on this side of the House and in the country who are incensed about their behaviour, it is because of the arrogance of the language used by such organisations as the Campaign for Europe. For my part, I was particularly concerned by the statement in the Campaign for Europe's Bulletin of January, 1967, when it said: The old idea that Britain could change the Common Market … has been rejected as meaningless, and impertinent, nonsense. This is the language of extremism. It may be said that I, and others with reservations, are speaking impertinent and meaningless nonsense. But at least we are reflecting the real anxieties of our constituents, about the cost of living and about acting honourably towards the Commonwealth who have been our partners and suppliers of essential foods, for so many years. There can thus be little wrong in speaking the Campaign for Europe's idea of impertinent and meaningless nonsense.

I now turn to the question of defence. In particular, I am very pleased that in reply to a Question which I put to my right hon. Friend last Tuesday I was given the categorical answer that nuclear sharing could not enter into these negotiations. He said: I am sure that the House itself would not wish this to be involved in any way or any commitments in that respect to be assumed from my statement. Defence was further referred to in reply to my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot), who followed up my question, when the Prime Minister said: It is possible, I believe, to get much greater political unity in Europe without either advancing towards a federal control of foreign policy or the creation of a European defence policy. Our view is that the right place for defence policies is within the Western Alliance and not by any means in the creation of a separate nuclear force in Europe."—[OFFICIAL REPORT, 2nd May, 1967; Vol. 746, cc. 323–26.] From the outset of these discussions on Britain's entry into the Common Market I have been anxious that we should not pay the price which some people say it will be necessary for us to pay to enter the Common Market, namely, the sharing of nuclear secrets with France. At the United Nations General Assembly it is pointed out by the non-nuclear countries that if we were to enter into nuclear sharing with France this could damage the hopes of concluding the non-proliferation treaty. As right hon. and hon. Members know, there is much concern among the non-nuclear countries because France refused to sign the partial test-ban agreement, and it is felt that if we agreed to nuclear sharing with France it would be a cynical sidestepping of the test-ban agreement. In his recent lectures at Harvard University the right hon. Gentleman the Leader of the Opposition made it clear that he was prepared to pay the price of nuclear sharing with France in order to enter the Common Market. I hope that hon. Members will repudiate those who say that there should be nuclear sharing to enable Britain to enter the Common Market.

Some of us who have reservations about entering the Common Market are told that we are not internationalists. At one time I was Chairman of the Control Commission of the Socialist Youth International. Many of the people with whom these negotiations will take place were my colleagues there, and are now Ministers in European Governments. If people question my internationalism, my reply is that I do not believe that internationalism resides behind high tariff walls. I do not believe that there is any internationalism in seeking self-sufficiency whether in sugar or in any other commodity, the result of which can hurt people in any developing country. I do not believe that there is any internationalism—and a very influential man in the Community did this—in refusing to sign the partial test ban agreement. If that is a mark of internationalism, I can only say that the people who do that fail my test.

Central to my internationalism is the belief that the greatest problem in the world today is that half the people of the world are learning how to diet and to get their weight down, while the other half are trying to get enough to eat by primitive methods of farming and by trying to cope with all kinds of difficulties. In my view, it is internationalist to ask oneself how every policy initiative of the developed countries contributes to a solution of this central problem facing mankind today. I hope that those who say that the E.E.C. will help to deal with this problem will put their case very fully to the House. This is the main question for any internationalist, and I hope that no one abroad will be deceived by the voting on Wednesday night, because many unconditionalists will be voting for a Motion which is about conditionalism.

7.16 p.m.

Mr. Gilbert Longden (Hertfordshire, South-West)

I cannot understand how the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) can proclaim himself an internationalist, and not want this country to go into Europe.

Mr. Shinwell

What does the hon. Gentleman know about internationalism.

Mr. Longden

Order, you ancient Briton.

Mr. Raphael Tuck (Watford)

On a point of order, Mr. Speaker. Is it in order for the hon. Member to address you as an ancient Briton?

Mr. Speaker

Order. We have had a serious debate so far, and a quiet one. Let it continue to be so.

Mr. Longden

I hope that the hon. Member for Wythenshawe will forgive me if I do not follow him in his speech. The Prime Minister was criticised for being too long, and too dull. I do not think that he was either. I think that it was absolutely necessary for him to state the case so that the country can understand what it is about, and if he had gone on for two hours I would not have felt that it was long enough.

The hon. Member for Ebbw Vale (Mr. Michael Foot)—I am sorry that he is no longer here—made a very entertaining speech, and I agreed with two things in it. First, I agreed wholeheartedly when he said that on Wednesday night there should be a free vote on both sides of the House. How much more convincing it would be to the country and to Europe if the House were able to express its view freely. I still believe that there would be a five-to-one majority in favour of the Government.

The other thing on which I agree with the hon. Member for Ebbw Vale is that this whole debate should be regarded in a much wider sphere than merely the unity of Europe. It seems a long time since that day in this House in July, 1961, when I welcomed Mr. Macmillan's statement that at long last the British Government intended to apply to go into Europe. I remember congratulating him on trying to drag such disparate people as the right hon. Members for Thirsk and Malton (Mr. Turton) and Easington (Mr. Shinwell) kicking and screaming into the second half of the 20th century. Since long before that day I have believed that this country should enter into the closest possible relationship with our neighbours and fellow Europeans.

Like every other choice in life, this is a question of the balance of advantage. On balance, economically, and, above all, politically, I believe that it would be to our advantage, to Europe's advantage, and to the advantage of the world if Great Britain and as many other European nations as possible were to join the E.E.C.

Some people ask, "What about patriotism?". Of course, we can still be patriotic and take a pride in our traditions, and what we have done for the world. Of course, we can still be glad that we were born in this country and not in any other. Of course, we can still put this country's interests first, as long as we understand that those interests mean that we collaborate with and join other nations, and do not try to pursue paths of our own.

Are the Scots or the Welsh, after centuries of union with this country, any less patriotic than previously? Have they lost any of their national characteristics? Alas, no. The Community is not a closed shop. Let me read to the House—because nobody has yet—two sentences from the Preamble of the Treaty of Rome: The signatories DETERMINED to establish the foundations of an ever closer union among the European peoples, RESOLVED to strengthen the safeguards of peace and liberty by establishing this combination of resources, and calling upon the other peoples of Europe who share their ideal to join in their efforts, HAVE DECIDED to create a European Economic Community … There is no question of a closed shop—or there should not be.

Economically, the Prime Minister has already referred to the powerful 24-man committee of the C.B.I. which last December published a report of its conclusions and recommendations in this matter, and which opened with these words: This Committee is firmly convinced that, from an industrial point of view

1. (i) there would be a clear and progressive balance of advantage to British industry from membership of an enlarged European Economic Community,
2. (ii) the Treaty of Rome and the Community's method of operation are acceptable given reasonable transitional arrangements, and
3. (iii) entry should be negotiated as soon as possible".

That opinion represented the attitude of 90 per cent. of those circulated. It has not been queried by any signifiant section of industry or commerce. Who am I to query it?

As for agriculture, I have it from the National Farmers' Union that it is not dogmatically opposed to our entry into Europe although, as is its duty, it has pointed out some results which are not always favourable to all its members. But, on balance, again, the fact that we shall have to produce as much as we can so as to reduce the amount of levy we shall have to pay must surely give a boost to British agriculture.

Nevertheless, for the satisfaction of millions of our fellow-citizens who are in honest doubt and in wholly justifiable ignorance, Her Majesty's Government must answer the devastatingly pessimistic prognostications of the special correspondent of The Times—who turns out, purely coincidentally, to be the son of the President of the Board of Trade—in an article in the Business Supplement on 1st May, when he says that you cannot have the "great debate", which the Prime Minister rightly called for, without knowledge.

Politically, it must be clear to everyone with any imagination who is not an ancient Briton or an ancient Frenchman that we cannot possibly hold our own on our own at the end of the century when America will have a population of 250 million, Russia a population of at least as many, and when the Common Market, joined in membership or in association by other European and Commonwealth nations, will command manpower and resources equal to, or greater than, either.

As Mr. George Ball, former American Under-Secretary of State, wrote in yesterday's Sunday Telegraph that the European peoples must command the resources of a continent, For this age of technology has created a new order of scale which means that a nation with a population of 50 or 60 million, no matter how rich or how gifted its people, can no longer play the world rôle that such history and gifts deserve. That sums it up, although it might be better if our American friends and well-wishers kept out of the argument for the time being. [HON. MEMBERS: "Well-wishers?"] Well-wishers? Of course, because it is only common sense and a natural instinct for self-preservation for Americans to want a strong Europe. Mr. Ball's dictum echoes the shorter one of my right hon. Friend the Member for Kinross and West Perthshire (Sir Alec Douglas-Home) that insularity is a luxury which this island can no longer afford. Indeed, insularity is a luxury which no country in the world, large or small—France any more than Britain—can any longer afford.

It is much to be welcomed that the tension between East and West is today greatly reduced. Long may that situation last For the Socialist States, too, are of the European family. But the intentions of the Communist leaders are ephemeral and may change overnight, as the Communist leaders themselves may change overnight. They may compromise on methods and on timing, and on other tactical measures; what they have so far not relinquished is their intention and belief that their ideology will triumph over ours and will extinguish all other faiths.

It is much better for statesmen to have regard to the military potential of potential enemies. Only last November Signor Brosio, the very wise Secretary-General of N.A.T.O., told the Atlantic Assembly—to which many of our colleagues in the House belong—that The Soviet Union is gaining ground in the steady, deliberate struggle she is waging against the cohesion and strength of Western Europe. Thus, I believe that politically as well as economically we have to get together to ensure the safeguarding of our way of life—

Sir Cyril Osborne (Louth)

Oh, no!

Mr. Longden

Is my hon. Friend in pain?

Sir C. Osborne

I am in pain at hearing such dangerous, arrant nonsense.

Mr. Longden

If my hon. Friend can somehow contain his pain and not groan as he has been doing—because it is very off-putting—I will proceed.

I believe that politically and economically we have to get together to ensure the safeguarding of our way of life, to hold our own in the East-West dialogue, to prevent Germany from ever again dominating Europe—for one of the first predictable results of Gaullism is the neo-Nazi resurrection, with West Germans saying, "If France can get away with it, why cannot we?"—and to be able more efficiently and effectively than hitherto to play our part in that North-South dialogue to which the Prime Minister referred, and close the gap, which is still widening, between the "have" and the "have-not" nations.

I have never been one who would enter the Common Market unconditionally. On 25th July, 1960, asking the then Government what they meant by such a phrase as the "integration of Europe" I said: What I am sure they do not mean is that we should sign the Treaty of Rome as it stands or enter the Common Market come what may."—[OFFICIAL REPORT, 25th July, 1960; Vol. 627, c. 1186.] On 6th April last I put a Question to the Prime Minister, beginning: While it is true that no one in this House wants to join the Common Market absolutely unconditionally".—[OFFICIAL REPORT, 6th April, 1967; Vol. 744, c. 455.] That was greeted with jeers from hon. Members opposite. It might have been a slight exaggeration. I said that nobody in the House wanted to join unconditionally when I should have said that very few on either side wanted to do so.

Article 237 of the Treaty says that any European State may apply to be a member of the Community, adding: The conditions of admission and the adjustments to this Treaty necessitated by it shall be the subject of an agreement between the Member States and the applicant State. Why should we not try to arrange our entry by agreement? We have a good deal to offer Europe, so why should we not negotiate honourable terms? The Prime Minister is right to concentrate on what he calls the major issues and to leave the lesser ones until after entry, but we must know what he considers to be lesser issues.

Among the major issues is Commonwealth protection, especially and essentially protection for New Zealand. We are nearing the end when consideration for New Zealand is described as racial discrimination—

Mr. Alfred Morris

My point was that those who described New Zealand as the main or only Commonwealth problem should say that it is the main white Commonwealth problem. There are some grave problems in coloured Commonwealth countries, so the hon. Gentleman should withdraw.

Mr. Longden

When I talk of the Commonwealth, I mean coloured or white. This is a Commonwealth problem.

The second major issue is the protection of our offshore Islands—the Channel Islands and the Isle of Man. I was in the Channel Islands a month ago and know that they have no idea of their fate. We must protect their interests.

Third is the interests of our E.F.T.A. partners. I agree with the hon. Gentleman—I think it was the hon. Member for Ebbw Vale—who said that we seemed to have treated them cavalierly. I hope that their lip service to our cause is genuine and sincere, but with the recent surcharge and this proposal we are treating them badly.

Fourth, we must negotiate a reasonable transitional period. Her Majesty's Government should make it clear now that they believe that the European Parliament, sooner rather than later, should be elected by universal suffrage. If there is to be only one member for Wales, it might be thought that it would serve the hon. Member for Ebbw Vale right if he were that member.

Although I have always advocated uniting Europe, I have regarded it as a means to the end of an Atlantic Community. I had the honour recently to succeed the right hon. Member for Kettering (Sir G. de Freitas) as Chairman of the British Atlantic Committee. He is now President. Our first aim is to advocate increasing interdependence within the existing Atlantic Alliance by practical association between partners in all matters of common interest and, at the same time, to work for the evolution of an Atlantic Community with common institutions. That is our first aim and my first aim.

It is folly for anyone in Europe to imagine that we could defend ourselves or our way of life without American aid and it is folly for anyone in America to believe that, if Europe fell to the ideological enemy, the North American Continent would be safe for long. I also believe that Europe can help the poorer countries infinitely more effectively in partnership with America.

Thus, I want a united Europe, nonexclusive, outward-looking, as the second pillar in an Atlantic partnership, equal in all respects with its transatlantic partners, until conflicting ideologies lose their aggressiveness and we can all follow our own ways in peace and security under an organisation of nations which is genuinely united.

7.35 p.m.

Mr. Eric S. Heffer (Liverpool, Walton)

If I follow the hon. Member for Hertfordshire, South-West (Mr. Longden), I would end in the Lobby with my right hon. Friend the Member for Easington (Mr. Shinwell). Any more speeches; like that will make the Government's majority very slim. The hon. Member's case was about the worst possible for entry of the European Economic Community. Therefore, while disagreeing with his case, I nevertheless stand with the Government on this issue.

I have listened carefully to the speeches, especially those of my hon. Friends the Members for Ebbw Vale (Mr. Michael Foot) and Manchester, Wythen-shawe (Mr. Alfred Morris). Both were extremely sincere and put a formidable case to answer, but they can be answered. Neither hon. Gentleman gave the true facts. We heard a number of prejudices and opinions which are not absolutely accurate.

For example, my hon. Friend the Member for Ebbw Vale is deeply concerned, as we all are, with regional development and, like myself—as I represent part of Merseyside—is concerned to know whether industry would be channelled into areas like Ebbw Vale, Merseyside and the North-East Coast—

Mr. Rankin

And Clydeside.

Mr. Heffer

And Clydeside. If I believed that our joining the Community would mean that industry was not channelled into the underdeveloped areas, I would be the first through the "No" Lobby on Wednesday.

But the facts are different. There is advanced regional planning in the E.E.C. countries, apart from Germany, which, nevertheless, although the least planned, has regional planning to an extent. In Italy regional planning is far more progressive than our own. I say that as a Socialist. Our policy is largely negative, with a carrot at the end of a stick to attract industrialists. The negative policy is based on the Industrial Development Certificates. We say to our industrialists, "You cannot go to that area. We will not give you a certificate unless you go to Merseyside or somewhere else".

The Italians have a system of publicly-owned industries which they build in these sort of areas. We all know the example of the Taranto Steelworks, which should have gone to Genoa but which went instead to the southern part of Italy precisely because it was necessary for that to be done in the interests of the development of the Italian economy. Certain lessons can be drawn from the planning arrangements of some of the E.E.C. countries.

Both France and Belgium have their under-developed areas. Even West Germany has this problem. The Ruhr, of all places, is to some extent an underdeveloped area because of the decline of certain industries. This and other countries in the E.E.C. have plans to deal with these specific problems. We must be realistic and honest in considering this matter.

We are told, "If we join the Community we will not be able to carry through our programme of the socialisation of certain industries". I have carefully read the document published in the latest issue of Tribune. If I believed that we could not nationalise and socialise our industries in the event of our joining the E.E.C, I would oppose our joining on that basis alone. However, I have with me a document setting out the policy of the Federation of the Left, the organisation which almost won the last election in France.

One of the main items in the Federation's programme is the adhesion of Britain to the E.E.C. The Federation of the Left does not say, "We cannot carry through our programme unless we leave the Community". It states quite the reverse. Yet its programme is for the extension of the nationalisation of the armaments industry, of space and of the merchant banks, in addition to which the Federation believes that the pharmaceutical industry should be nationalised.

I assure hon. Members that I have read a number of other documents. Indeed, I have with me one leaflet which states that if we join the Community we will be joining a Communist organisation. Another pamphlet states that we must protect Protestantism and, to do so, we must keep out. There are certainly some strange and weird arguments adduced about this matter. [HON. MEMBERS: "Hear, hear."] I wish that hon. Members would merely accept that the Federation of the Left in France believes that its radical programme—which was put forward at the last election in that country—is, in essence, far more radical than the programme which the Labour Party in this country put forward at the last General Election. [HON, MEMBERS: "We won."] An essential plank of the programme of the Federation of the Left is that Britain should be in the Community. Considering that some of my hon. Friends have said that if we join the E.E.C. we will not be able to carry out some of our Socialist policies, I should have thought that the first plank of the programme of the Federation of the Left would have been "We must leave the Community so that we can carry out these policies".

Anybody who knows anything about the position in the Community countries knows that it is possible to carry through a policy of socialisation within the terms of the Treaty of Rome. If that were not possible, why was it that three years ago the Italians nationalised the electricity supply industry? We know that the extent of social and public ownership in the E.E.C. countries is, to a large extent, greater than it is in Britain.

Some of my hon. Friends have been arguing for a programme of publicly-owned insurance for the motor car industry. Are they aware that that already exists in France; that almost half of the insurance companies in that country are under public ownership? We must get this into perspective. It is obviously not a question of being unable to socialise industries if one joins the E.E.C. One can join and socialise industries, and that is precisely what has been, and is being, done by E.E.C. countries now.

We are then told that if we join we will not be able to have an independent foreign policy. What is General de Gaulle doing? I had the vague feeling that his foreign policy was somewhat more independent than ours. I also have the terrible feeling that if we do not get into the Community our foreign policy will be even less independent than it is now. What alternatives face us? No hon. Member has presented the alternatives today.

We are told that we can carry on as we are, but can we? We are told that we must concern ourselves with E.F.T.A. and the Commonwealth countries. I would have liked to have seen E.F.T.A. join the Community as a whole. I have advocated that at the Council of Europe on many occasions. But it has not been possible for that to be done and we must, therefore, consider the reality of the situation.

If one examines the E.F.T.A. arrangements one finds that E.F.T.A. is, in any case, increasingly evolving towards a community type of organisation. One recent E.F.T.A. Article covering the question of trading for public utilities, implies that a certain amount of our sovereignty would be given up if we accepted that Article. Let us be realistic about this. I have never been one of those who have argued that, by going into the Community, we will solve all our problems. Of course we will not. However, the alternative would, in my view, mean our ultimately becoming—and I gather that some hon. Gentlemen opposite would be happy with this outcome—a satellite of the United States. I believe that that is the basic alternative.

If we are to control the position in regard to the growth of Western Germany in a military sense, our place is in Europe. If we are to get out of the clutches of the United States and ultimately have an independent foreign policy, then again our position must be towards Europe and not towards anywhere else.

Mrs. Anne Kerr (Rochester and Chatham)

Why does my hon. Friend think that we will get out of the clutches of the United States, as he correctly puts it, when the United States is kicking and shoving us into joining the Community?

Mr. Heffer

If my hon. Friend believes that the United States is kicking and shoving us to join the E.E.C., I suggest that she should not take the article in yesterday's Sunday Telegraph as being necessarily the views of the Administration of the United States. The writer is no longer in a position of responsibility. If hon. Members read the articles which are appearing in our Sunday Press and which are written by reputable correspondents in the United States, they will see that the Americans are alarmed by certain developments likely to occur in our so-called special relationship with the United States once we have joined the E.E.C.

Mrs. Renée Short (Wolverhampton, North-East)

Does my hon. Friend recollect that, in his presence at Strasbourg two weeks ago, I put this very point to Mr. Wayne Hays, President Johnson's peripatetic Congressman, and asked him what he felt about the position if Britain went into the Common Market, and that he made it clear that the American Administration was 100 per cent. behind our entry?

Mrs. Anne Kerr

Cheering silently.

Mrs. Short

How can the hon. Gentleman say that it is only a figment in the imagination of certain American correspondents?

Mr. Heffer

Mr. Wayne Hays is not a representative of the American Government. He happens to be a member of the American Senate, who attends the Council of Europe and whose opinions, in any case, I do not rate very high. I do not say that here and not tell him there, because last year at the Council of Europe I told him that I did not think that his opinions rated very high. So far as I am concerned, he knows the position quite clearly.

Mr. Russell Kerr (Feltham)

He knows it now, anyway.

Mr. Heffer

The alternatives before us are either to become a complete satellite of the United States—

Mrs. Anne Kerr

We are.

Mr. Heffer

—or to move towards Europe with a positive policy for the uniting of the whole of Europe based on the European Economic Community.

Mrs. Renée Short

And then have the Six and the Americans round our neck.^*

Mr. Heffer

If my hon. Friends have the opportunity to participate in this debate, I hope that they will make their case as forcefully as I am making mine.

A third alternative is to move in the direction of the Soviet Union and the Eastern European countries. We must inevitably bridge the gap between the Eastern European countries and Western Europe, but that does not mean that I want us to be in the relationship with the Eastern European countries which we now largely have with the United States. Here we have an opportunity to create a Europe which would become a major third force in the world and which would assist in the development of peace and security.

I cannot expect the Government to state in neon signs that they would regard the special relationship with the United States of America as dead once we became part of the E.E.C. We owe America too much money. But we know and the Americans know that once we are part of the Community, the special relationship will at least be somewhat changed, if not entirely dead. That is why I want us to go into the Community.

I also want us to go into the Community because I believe that a United States of Europe is absolutely essential, and I want to see a Socialist United States of Europe. That is the prospect. I believe that we can get a Socialist United States of Europe.

Mrs. Renée Short

My hon. Friend is frightening that lot over there.

Mr. Heffer

My hon. Friends who disagree with me in this respect are too pessimistic and tend to write off the European working class and trade union movement as though they do not exist. We know that in Europe there is a very powerful trade union and Socialist movement.

There is then the extent to which E.E.C. countries help the under-developed ^*[See OFFICIAL REPORT, 9th May, 1967; col. 1279.] countries. We are told that if we go in, it will not be possible to help the underdeveloped countries. I have some very interesting official figures from this year's O.E.C.D. Report. They give the total of official and private aid to underdeveloped countries between 1956 and 1965. In terms of millions of U.S. dollars, they are, for example, Belgium: 1963, 184.9; 1965, 238.7; France: 1963, 1,264.6; 1965, 1,318.6; United Kingdom: 1963, 694.6; 1965, 923.1. In other words, the percentage increase of aid from E.E.C. to under-developed countries has been greater than has been the increase in our aid. If we were in the Community we would have a larger market and if we had the growth necessary in a European economy, we should be able to help the under-developed countries of Asia and Africa much more than we can now. That is a very important reason for entering the Community.

There is one last argument. We are told that the Community is a rich man's club, that it is not a Socialist organisation, that it is capitalist-dominated, and that it is Catholic. That last does not worry me in the slightest, because I think that all men are brothers, irrespective of their religion. I want to deal with the issue of whether it is a rich man's club—and clearly it is—and a capitalistic society now largely dominated by capitalist politicians. I do not deny it, and it would be foolish to deny it, because it is true.

But what about E.F.T.A.? What about our partners in E.F.T.A.? Portugal is a very great "democratic" country dominated by Socialists! Certainly Sweden is a social democratic country. In the Commonwealth, we have Socialist Governments in New Zealand, in Australia, in Canada—[HON. MEMBERS: "No."] Of course not: we do not have a Labour Government in any of those countries. They are all dominated by capitalist politicians. And they are no doubt doing their best in the interests of private enterprise. There is therefore no question about it. The answer is not that we keep with our Socialist friends in E.F.T.A. and the Commonwealth but that by going into Europe we join a capitalist organisation. We shall, in fact, to some extent be transferring our allegiance from one capitalist group to another—and that is all.

But the important point is this. We have the opportunity within our grasp as a Labour and Socialist movement to influence the future of Europe for all time. At the Labour Party conference in 1948, Lord Brockway, then Fenner Brockway, moved a resolution calling upon the Labour Party to work with the Socialist parties of Europe to fight for a United Socialist States of Europe with a supranational organisation; with a subordination of the national interests of all those countries to this supranational organisation. That resolution was accepted by the National Executive but, somehow or other, it got lost on the way. I believe that we should resurrect it, and I believe that this is the time to do so.

The E.E.C. is not the whole of Europe; it is not Socialist; it is not the Socialist United States of Europe; but once we are in the E.E.C. we can work towards the building of a Socialist Europe. That is what I believe in. I am told that it is a pipe dream, but our whole Socialist movement was built on a dream, and I hope that no one will be derisory about that. When Keir Hardie entered this House of Commons with, eventually, a small group of Socialists around him, he and they had the dream of a Socialist society in this country. We have not got it yet.

But they also had the internationalist dream of building a Socialist Europe and, ultimately, a Socialist world. I believe that what I say, despite the derision of some of my hon. Friends, and certainly despite the derision of hon. Members opposite, is in line with the opinions, the ideas and the principles of the founders of the movement to which I belong. That is why I believe that by going into Europe we can build the sort of society that can transform the world. There is no point in being in this House, or in the European Parliament or anywhere else, unless we have that dream of transforming society in the interests of the mass of ordinary people.

That is why I shall support the Government. It is possible that the Government will not be as idealistic as I am on this score, and that is all right, but we have this opportunity. That is why I say to my hon. Friends who disagree with me on this question that they are missing the opportunity. They are, in fact, moving away, though not consciously, from the basic ideals from which this movement sprang. That, again, is why I feel that we must enter the Community. I am told by my hon. Friends that it is nonsense and muddled thought, and that may well be so. It may well be that I shall go down in history as a Socialist who spoke in the House of Commons of a muddled and confused idea about a Socialist United Nations of Europe.

That is O.K., but let those who feel that way remember this. Winston Churchill stood almost alone in this House and fought on the question of Munich, and so on. His opinion ultimately became the majority view—[Interruption.] Yes, he had a few friends but not many. He also believed in a United States of Europe, though not a Socialist United States of Europe. I believe in the United Socialist States of Europe and, as a first step towards it, I believe that we must get this country's adherence to the E.E.C. That is my case. That is what I believe. That is why I hope that Socialist supporters of the Government will vote for the Government on Wednesday night.

8.5 p.m.

Captain L. P. S. Orr (Down, South)

A curious phenomenon appears to be developing in this debate. The hon. Member for Liverpool, Walton (Mr. Heffer) suggested that my hon. Friend the Member for Hertfordshire, South-West (Mr. Longden) had gone some way to convincing doubters in a sense opposite to that which he had wished. I may tell the hon. Gentleman that, after his very engaging and passionate speech, had I had any doubts about voting at the end of the debate against going into the E.E.C. he has resolved them for me.

The hon. Member cannot possibly have thought that an argument for bringing about a Socialist United States of Europe was likely to appeal to any doubters on this side. Nor could it possibly be suggested that, if one represented a development area, one's fears about the removal of I.D.C.'s could be resolved by suggesting that we would have nationalised publicly-owned factories erected. If one had any doubts at all, such arguments could only convince one of the necessity of opposing the Government's Motion.

Ever since I came into the House in 1950 the argument about the future relationship of this country with Europe has been steadily developing. The beginning of that argument was about the Schumann plan, which led to the European Coal and Steel Community. Throughout all that time, while the argument has gone on ad nauseam in the country, with a great amount of pamphleteering on one side or the other, it is a very strange commentary on Parliament that the occasions on which the House has had a chance of developing the argument in any sort of depth have been very few.

It is probably true that we have now reached a point where it is almost impossible in debate in this House to produce any original argument at all. Every argument to which we shall listen—except, occasionally, when an hon. Member can produce some specialised knowledge of his own—has already been deployed. I therefore think that the right thing to do for anyone taking part in the debate is merely to state, as briefly and as succinctly as possible, where he stands, and why.

I was one of those who, at the time when my right hon. Friend the Leader of the Opposition began his negotiations in Brussels, thought that there was a reasonable chance of reasonable terms being obtained for this country's entry into some kind of relationship with Europe. I was perhaps naive enough to think that we could negotiate changes in the Treaty of Rome itself. But as my right hon. Friend produced his massive and lucid statements during the course of the negotiations, it became fairly apparent to me that the kind of terms upon which our entry into the E.E.C. could be negotiated were such that I could not possibly accept them. I was saved from making the agonising decision of voting against my own Government at that time by the action of President de Gaulle.

Sir Cyril Osborne (Louth)

He will save hon. Gentlemen opposite again.

Captain Orr

As my hon. Friend says, he will undoubtedly come to the rescue of hon. Members opposite in exactly the same way in due course. I think that the situation has now deteriorated considerably and that the chances of success are now very remote.

I take the view now that if ever one is to express an opinion this is the time to do so, and that if ever one is to produce a vote upon this issue, this is the occasion upon which to do so. It will be an extraordinary thing for me to find myself in the same Lobby as the hon. Member for Ebbw Vale (Mr. Michael Foot), but I can tell him that if he is there I shall be. I think that it would be dishonest to delude oneself or one's constituents by saying, "Let us see what kind of terms will be negotiated in the end before we express an opinion." It is already perfectly plain that in respect of essentials there can be no issue that is not fairly clear now.

The proposed negotiations can only affect the issue marginally, and very marginally at that. Therefore, I agree with one of my hon. Friends and with other hon. Members who have suggested that we should have a free vote of the House. I think that anything other than a free vote of the House will produce a situation where, as one hon. Member said, people will try to judge afterwards and will make false judgments about what is the real opinion of the House of Commons. It may be that many hon. Members may delude themselves into thinking that they can reserve their judgment till later in this argument. Their vote will be taken as a vote for signing the Treaty of Rome. It will be taken as a vote for accepting everything that this means in the future. Later will be too late.

I think that I can sum up my own opposition to this on three grounds. First, on the industrial and economic position, what, after all, are we dealing with? On the economic side we are dealing, in effect, with less than 20 per cent. of our import and less than 20 per cent, of our export trade. The effects of joining the Community upon this 20 per cent, of our trade is likely at best to be only marginal. The Prime Minister said that he could not quantify it. In other words, I agree with the hon. Member for Ebbw Vale that all that is involved in this is a guess.

The Prime Minister agreed with an intervention that it was all supposition. Supposition it is, and it is supposition concerning a marginal effect upon 20 per cent. of our trade; and for that we are proposing to accept what is, to my mind, an unacceptable loss of sovereignty. What is different about this loss of sovereignty from other losses is that this is an irrevocable loss. It is a loss of sovereignty which can never be regained. Once we sign the Treaty and are in, every kind of sanction could be used against us, and would be used against us, if we sought to abrogate it.

Agriculture is the second matter that I come to. I represent an agricultural constituency of largely small farmers. I will guarantee that nobody in the House could talk to my small farmers and convince them that going into the E.E.C. could possibly be to their advantage. The Prime Minister was very straight this afternoon. For once, he was absolutely clear and did not mitigate in any way the effects that there are likely to be upon agriculture. The rise in the price of cereal feeding-stuffs that is likely under the E.E.C. arrangements amounts to about £10 per ton.

Think of the effect upon a small mixed farmer! It would be adding 10s.per live hundredweight to the cost of beef production. Farmers would be losing 30s.per cwt. production grants for certified cattle. Think of the increase in cereal costs on the production of milk, adding 3d.or 4d. a gallon to the costs, and of the additional cost of pigmeat production, adding 10s.per score deadweight! For egg producers the price would fall by 1s.per doz.; and what would happen to potato prices nobody knows!

Does anyone think that a small farmer in the remoter parts of the country can possibly survive this? Does anyone think that even if any kind of arrangement could be made, even if one were granted a very long-term interim period of adjustment, say, 10 years, any small farmer could possibly stand this? It is all very well to say that farmers have to go over to cereal production, but, in a small farm of 35 acres, how does one go over into cereal production?

Mr. Martin Maddan (Hove)

On the Continent the number of small farms is much greater than in this country. How do those farmers earn a living?

Captain Orr

This argument was used before. I member it very well. The suggestion was that if our small farmers went into the Common Market they could compete with the small farmers in France. But that argument does not hold water.

In this country we have, for very good and sound social reasons, built up a system of agricultural support and subsidy which has maintained our small farmers, and this would go by the board altogether if we went into the E.E.C.

Mr. Donald Anderson (Monmouth)

On what ground does the hon. and gallant Gentleman suggest that our system of agricultural support would go by the board altogether if we were to go into the E.E.C? The National Farmers' Unions do not accept it, and only certain of the grants would be vulnerable.

Captain Orr

The hon. Member may be very sanguine about it, but I do not share his optimism at all. It is all very well for the Government to say, "We shall negotiate a system of annual price review within the" I doubt very much whether the E.E.C. will agree to it. I doubt whether there will be anything as flexible as this. It is very doubtful whether a great many of our production subsidies will continue within the E.E.C. I have grave doubts about it. I am sure that the hazards that are facing small farmers are too big a price to pay for the very doubtful advantages to industry of going into the E.E.C.

I have only one thing further to say about sovereignty, except that I agree with those who say that the inroads upon our sovereignty would be unacceptable. The argument has been used by my right hon. Friend and others that Europe has torn herself apart by great wars in the past and that only in organic unity of this sort lies the hope of avoiding future conflicts. One of the greatest and bloodiest wars in history was fought inside a Union—the American Civil War. If anybody thinks that we shall guarantee the peace of Europe by going into E.E.C. he is mistaken. The tensions which could arise within a forced union could be just as dangerous as the tensions which could arise by our being reasonably inflexible and independent without.

People say to me, "That is all very well, but are you advocating isolation? Are you advocating that the country should remain an offshore island totally cut off from everywhere?" I do not believe that to be the true alternative. The European Free Trade Association has had a remarkable development. It has nor resulted in British domination of it. It has not resulted in loss of sovereignty by some of its smaller members. It has been a very great trading success, more successful than the E.E.C.

We should go on developing E.F.T.A. and developing our trade with the Commonwealth. If we developed along these lines, feeling our way gradually towards an Atlantic free trade area, we should retain our flexibility and our independence, and I do not believe that in the end we should be dominated by the United States. It may be said that the Americans will not support that view and that they want us to join the Common Market. But if we said to the Americans, "We shall not go into the Common Market at any price", we should find a very different attitude in the United States towards an Atlantic free trade area.

This is the ultimate future. I do not wish to see this country taking a decision to join Europe in a moment of panic, under the depression which was so evident in the speech of the right hon. Member for Llanelly (Mr. James Griffiths), whom I greatly respect. I do not wish to see the nation, in a moment of despair, feeling that there is no other future for the country then to run headlong behind the barriers of Europe and eventually close ourselves off from the rest of the world. I certainly do not believe that that is what the nation ought to do, and I shall vote against the Motion.

8.23 p.m.

Mr. Trevor Park (Derbyshire, South-East)

It is usual for hon. Members, in making their speeches on the Common Market, to make preliminary reference to their position on the issue during the 1962 discussions before going on to describe their position today. In my case, this is rendered a little complicated by the fact that I confess that I have had not a single but a double conversion. The second part of that conversion has brought me to a position closer to my 1962 position than to the position which I held at the end of 1966.

In 1962, it was my view that the changes which would be required in the Treaty of Rome to make it compatible with the protection of our interests—the interests which were spelled out by Hugh Gaitskell at the Labour Party conference at Brighton—would be of such a nature that they would involve a fundamental revision of the text of the Treaty, both in the spirit and in the letter. Since I did not believe that the members of the community would be prepared to consider such a radical revision, involving a total reversal of their course, I opposed the Conservative Party when it attempted to secure our entry into the Common Market.

I did not, however, oppose the present Government's decision, last November, to conduct a probe with the purpose of finding out whether, in the changed circumstances of 1966, a basis for renewed discussion existed. I assumed at the time that the purpose of the probe was to discover whether the safeguards could possibly be subjected to successful negotiation, and I expected to be told, when the probe was concluded, what the prospects of a successful application would be.

After all the reports which the Prime Minister and the Foreign Secretary have given the House, after all the speeches that have been made to the Parliamentary Labour Party and to the public, after the White Papers which were issued last week, after the Prime Minister's speech today, I am still awaiting a clear and definitive answer. Perhaps we have no answer because there is no answer. If that is the situation, then the probe itself has been a waste of time. Perhaps there is an answer, but, to preserve their negotiating position, my right hon. Friends are keeping it to themselves. In that case, the entire debate on the question has been and will continue to be a "phoney". What we are being asked to accept is merely a gigantic gamble, a Ministerial hunch, which the House is expected tamely to follow.

Perhaps the answer exists and can be revealed, but has so many conflicting interpretations and meanings that it has to be obscured by such a generality of tone that it does not easily identify itself. In that case, why do not the Government admit the fact openly and leave the matter to a free vote of the House? I have studied the White Paper most carefully, and what alarms me about it is that the essential safeguards, the terms and conditions on which the Labour Party have always insisted in the past, appear quietly but decisively to have been relegated in importance.

Consider the Treaty of Rome itself. No longer are we to seek basic changes. We are now merely talking in terms of necessary adjustments and modifications. Consider the Community's agricultural policy, with all its possible consequences for the farmer, the housewife, and the cost of British industrial exports. Again, we are not now seeking a fundamental alteration but merely adjustments and a transitional period. Consider the interests of the Commonwealth, which were held to be so important only a few months ago. All that we have in the present White Paper is a vague mention of safeguards and no indication of what the Government's attitude will be if the safeguards are not forthcoming.

What of the freedom of a British Government to plan our own economy? All we now obtain is a reassuring soporific about regional policies. My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) attempted to show a few minutes ago that membership of the Common Market would not preclude the possibility of a Labour Government being able to institute measures of public ownership or economic planning. But, of course, it is not merely the institution of public ownership or the adoption of economic planning that is important. Equally important are the purposes for which the public ownership and economic planning exist.

Here the facts of the matter are rather different from those given by my hon. Friend. My right hon. Friend the Prime Minister explained it clearly in 1962, when he said: The plain fact is that the whole conception of the Treaty of Rome is anti-planning, at any rate anti-national planning in the sense that either hon. Members on this side of the House or the Government understand it.… The title and chapter headings of Part I of the Treaty and the whole philosophy of the relevant articles show a dedication to one principle, and that is the principle of competition."—[OFFICIAL REPORT, 7th June, 1962; Vol. 661, c. 679.] My hon. Friend the Member for Walton knows as well as I do what the effects of free, unrestricted and unbridled competition have been on some parts of the country. If we are now to enter an institution whose basic economic objective is to encourage competition, which uses planning mechanisms for the sole purpose of creating an environment in which competition can thrive, we shall have cause in the future to fear the results of the actions we have taken.

In the White Paper the Government have given us no satisfaction on the question of regional planning, or indeed, of economic planning in general. We are confronted in the Government's present approach not with an answer to the questions that are in our minds, but with an apology which takes the form of sweeping away all the economic objections and seeking to dwarf them by a vision of political unity. It is to that aspect of the question that I now wish to turn.

Before I do so I want to make it clear that if we are to be expected to pay the economic price which must be exacted, the political benefits of joining the Common Market must be shown to be very great. If we are to pay rising food prices, about which hon. Members on both sides have spoken; if we are to accept the balance of payments loss and the rise in industrial costs which would result; if we are to take with equanimity the possible consequences on our trade with the Commonwealth, Eastern Europe and other parts of the world of joining the Market, I want to know what kind of a political bargain we shall get in return.

I have studied the nature of the community's institions with great care. I find that they are dominated by a commission of international civil servants who are in no way effectively controlled by an elected Parliament. They will have the power to issue binding regulations and ordinances without any of the mechanisms of political control and accountability which are built into our Parliamentary system. The Commission operates on the basis of theories of cut-throat, unrestricted competition which I, as a Socialist, find utterly abhorrent.

In its attitudes to those outside it, the Community adopts the position of an exclusive high tariff bloc concerned at all costs to preserve and develop its own self-sufficiency no matter what the effects might be on those excluded from it. The whole direction of the Community effort is not towards the destruction of barriers between the nations of the world, but towards the creation of new ones.

I believe that the future of world peace depends on a solution being found to two major international problems. The Prime Minister referred to both in his speech this afternoon. First, there is the conflict between the Communist and non-Communist powers. Secondly, and perhaps even more important in the long term, is the conflict between the richer nations and the poor. Is there anything in the attitude of the Common Market which makes for a positive solution to either problem? If there is, why do neutral countries such as Sweden, Switzerland or Austria feel that the political price of joining the Community would be too high?

If there is, why has the West German Government, an important member of the Community, always sought to prevent a settlement of the problems of European security by placing the veto on proposals for disengagement and the creation of a nuclear-free zone in Central Europe? If there is why do the French Government, also an important member of the Community, champion the idea of the creation of a European nuclear force? If there is anything positive in the approach of the Community States to these questions, why the opposition to the non-proliferation treaty which Russia, the United States and Britain are attempting to secure?

This great European vision which we are supposed to embrace and of which my hon. Friend the Member for Walton spoke so eloquently, is a highly prejudiced and in some cases downright dangerous mixture of all the old nationalisms writ large, and this is so at the time when the future of mankind depends on their abandonment.

Finally let us assume for a moment that, in spite of all the cogent arguments which some of us have been and will be putting forward in the debate, the Government go ahead with their intention to join the Community? How do they view the prospects of success? Do they believe that our application will be accepted? Here is a Community of six nations which have built up their cohesion and their joint approach hesitatingly and painstakingly over a period of 15 years, if one includes the period of preparation of the Treaty. Are they likely to place those achievements in jeopardy if they cannot agree on the terms on which to admit a new member?

I believe that, in the last resort, if any member of the Community objects to British entry, the rest of them will accept the objection. What will happen? We could be faced with a French veto at the outset of the discussions and in that case the negotiations would end at once. We would be humiliated, but otherwise no great harm might be done. It might even be a blessing in disguise, because the Government might then be induced to think more seriously and in more detail about the alternatives whose existence they already readily admit.

I do not think that an outright rejection is likely. It is much more on the cards that we shall be subjected to a protracted period of detailed negotiations, lasting for months and possibly for years, and that, during that period, our bargaining position will grow weaker the whole time. At the end of the day, two equally unpalatable alternatives will, I believe, confront us. Either we shall have to go into the Community on the most abject and humiliating of terms, involving the abandonment of all the safeguards we are now endeavouring to obtain, or we shall have to call off the entire venture only to find that the openings for alternative policies which now exist have in the meantime become closed to us.

Either way, the outlook would be desperate and not one which would commend itself either to those who favour entry or to those who oppose it. I beg the Government, even at this late hour, to examine the alternatives to entry which exist and to look seriously at the possibilities of building up the authority of the United Nations Economic Commission for Europe as a link between the Community, E.F.T.A. and the Eastern European countries as the basis around which a really wider Europe can be built.

It is through such an organisation alone that the trade barriers which now exist, the rivalries of the economic blocs now competing with each other, can finally be removed. The advantages of building up the E.C.E. in this way would not be confined to economic affairs, but would extend to political questions as well as it would offer better opportunities for a real agreement on European political security than have existed for many years.

I reject the charge, sometimes made against those who hold my point of view, that we are "Little Englanders". We are not "Little Englanders", and we are not "Little Europeans", either. I am an international Socialist, and as such I want to see a genuinely wider Europe play its constructive part in a permanently more peaceful world. I have still to be convinced that entry into the Common Market would advance that cause.

8.40 p.m.

Mr. Norman St. John-Stevas (Chelmsford)

I hope that the hon. Member for Derbyshire, South-East (Mr. Park) will forgive me if I do not follow him through the labyrinth of the development of his opinions on the Common Market, which he described to us in the early part of his speech in a manner worthy of John Henry Newman, except that he seems to be still enveloped in gloom.

The first point that I wish to make is that I welcome, without reservation, the Prime Minister's initiative in taking the decision for Britain to apply to join the Common Market. I have exactly the same view on this point—sometimes I think that it is the only point of view that we have in common—as my right hon. Friend the Member for Streatham (Mr. Sandys), who, like myself, has expressed his strong support for the application. We have both been members of the European movement since 1947.

In a question involving the historic interests and the future of the nation, it would be falling below the level of great events to indulge in party political points, but there are two points concerning the Conservative Party, which ought to be said and which I intend saying. First of all, the Prime Minister and others appear to be seeking to convey the impression that the last application for Britain to join the Common Market, made in August, 1961, failed because the discussions to protect Commonwealth and agricultural interests were too detailed.

I must say, with all the strength that I have, that in the context of the position in Britain, and the position in the Commonwealth at that time, there was no other course which those negotiators could have taken. If it is true that the Prime Minister has greater freedom of manœuvre today, then he owes it to the fact that an educative process was begun by the Tory Party at that time, of which he is the residua] beneficiary.

Mr. S. C. Silkin (Dulwich)

Surely the hon. Gentleman is not doing my right hon. Friend the justice that he ought to do. The position is that my right hon. Friend has not, for one moment, suggested that the reason for the breakdown was the course of negotiations. What he has said is that those negotiations taught us a lesson, which ought to be followed, and will be followed on this occasion. Would not the hon. Gentleman agree that that is the right course?

Mr. St. John-Stevas

I will not venture to compete with the hon. and learned Gentleman in interpreting the vagaries of the Prime Minister's mind, or his motives, or what he means. I am merely stating something which needs to be stated.

The second point I want to make is that if the British application has a greater chance of success this time, then one of the reasons is because the Prime Minister enjoys, on this occasion, the official support of the Opposition, and the support of the vast majority of the members of the Parliamentary party on this side of the House. When we talk about this as being historic, what is historic is not the application, because this has its precedent, but the unprecedented degree of Parliamentary and national unity on this important subject.

I hope that the Prime Minister will take full advantage of the situation in which he finds himself and use his freedom to manoeuvre to the full. I hope that he will do two things. First, I hope that he will negotiate only on the most basic problems and that he will reduce the number of issues which have to be negotiated to a minimum. I think that he has indicated that in a phrase saying that he did not intend to negotiate about "the lower groceries." That has never been defined. I do not know what a "lower grocery" is any more than I know what a "higher grocery" is. All it suggests to me is that there is some kind of class distinction even in a supermarket.

The approach which should inform all our negotiations is that we should not try to solve all the problems in advance, but we should say we will make our problems Community problems and we shall expect the members of the Community to support us in solving those problems equitably when we are members of the Community There must be some exceptions to this—New Zealand is one—but I hope that that will be the whole approach of the negotiators during the vital period which lies ahead.

Secondly, I hope that the Minister of State for Foreign Affairs will forgive me if I venture to offer him some advice. I hope that he will press ahead with all possible speed to bring the negotiations to a successful conclusion. This will need political skill and subtlety of a high order but the Minister of State has that and, whatever reservations one might have about the Prime Minister, one has never doubted that he possessed those qualities as well.

I turn to the broader aspects. I hope that the Prime Minister will forgive me if I do not follow him into the technological and economic arguments which he deployed this afternoon. I imagine that he will manage to do that without a great deal of difficulty. I accept fully the arguments which he used.

I welcome, in particular, the clarification we had from the Prime Minister this afternoon on the question of immigration. He made it quite clear that we shall continue to control immigration to this country from the Commonwealth and, what is even more important, that the right of movement of British citizens within the European Economic Community will depend upon the possession of that citizenship and not upon their race or their colour, or whether they were born in this country or not. That is a point on which the House rightly needed to be reassured.

I hope, also, that the Prime Minister will be positive in his approach to the Community and stress continually the contribution which Britain can make. We have heard earlier in the debate about the technological contribution which can be expected from this country, but there are others besides. One particularly important contribution we have to make is that we can provide the Community with the financial centre which it needs for its full development. Neither Paris nor Brussels nor Rome, much less Bonn, can do what the City of London can do, namely, provide a capital market for the whole of Europe.

Most important of all, I hope that the Prime Minister will continue to stress, as my right hon. Friend the Member for Kinross and West Perthshire (Sir Alec Douglas-Home), in one of his typically brilliant tours d'horizon stressed earlier today, the importance of the political contribution which Britain has to make. That is the principal reason why the Five, at any rate, want to have us in the Community. We are fortunate in having developed over the centuries institutions which work and a tradition of political stability which rests on the national character itself. This is precisely what we have to contribute to the union of Europe. Our duty is to strengthen the European political framework, not to stand aloof. While it may be true that the letter of the Treaty of Rome is economic the spirit of that Treaty is profoundly political.

We are right not to commit ourselves to a particular form of political union. The Six themselves have not done that. What we must not do, however, is to set preconceived limits to the political development that can be expected in the future. We must show that we are ready and willing to play our part in forming the political union of the future.

During the course of the debate there have been a number of references to the divisions of Europe between East and West. Nobody who claims to be a good European can possibly rest content with the present divisions on the Continent. None of us can rest from our labours until the whole of the European Continent is united from Poland in the East to Ireland in the West—although I suppose, we might make an exception for the enclave of South Down. We must have that wider vision always in our minds.

Like the hon. Member for Liverpool, Walton (Mr. Heffer) and the hon. Member for Wolverhampton, North-East (Mrs. Renee Short), I certainly look forward eagerly to the eventual reunion with ourselves of the ancient Christian countries of Eastern Europe. I hope equally strongly for the necessary political developments to take place in the Iberian Peninsula so that those great European nations can take their rightful part in the political system of the united Europe of the future.

I appeal to the Prime Minister and the Foreign Secretary, and to the Commonwealth Secretary, the Minister of State for Foreign Affairs and any Minister who speaks during these debates or plays a part in the course of the negotiations, to stress again and again the British commitment and enthusiasm for the European ideal. For many Members of the House, and for many people in the country, European union is a worthwhile end in itself.

We see European union as a vital step and necessary stage in the advance of mankind away from the destructive nationalism of the past towards a higher form of social and political organisation. We regard it as a necessary preliminary to the emergence of a fully-fledged international society.

We see this not as a commercial venture, although British commercial interests are important, not even as a political venture alone, although I have stressed the importance of that. We see European union as a means of preserving and advancing a civilisation which, with all its shortcomings, is, I think we can claim, the best that mankind has yet seen. If, therefore, Britain today asks for the gates of the new Europe to be thrown open to her, she asks that not in her name alone, but in that of the ideal of European unity and of European civilisation.

8.53 p.m.

Mr. Stanley Henig (Lancaster)

There has been a tendency in this debate to throw from one side to the other various kinds of economic consideration. My right hon. Friend the Prime Minister was, however, right in his suggestion that it is difficult to quantify many of the kinds of things which we have been trying to talk about. All that one can do is to look at certain trends. It seems to me that there is a flood in the affairs of the world which for this country is leading almost irresistibly towards the European Economic Community.

First, trade. When the argument opened a decade ago, our trade was predominantly with the Commonwealth. Now, it is not. The E.E.C. is our single biggest customer. By July next year, our single biggest customer will be run by a single commercial policy. Decisions taken in Brussels will be more crucial than ever before for our prosperity.

We have heard figures of the total size of our exports to the Commonwealth. What was not mentioned by my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris) was that our total exports to the Commonwealth last year were less than they were in 1956 and that, as a percentage of all our exports, those to the Commonwealth had declined catastrophically.

One of my hon. Friends complained earlier about what this country has been able to achieve and what it has not. We have heard mention of whether or not the E.E.C. is sufficiently outward looking, what it will do for developing countries, and so on. While one does not want to have too many statistics, it is important to know that the developing countries now export nearly three times as many goods to the E.E.C. as they do to this country. Moreover, their exports to the E.E.C. are growing at a much faster rate. I do not mean to argue that the E.E.C. policies are as liberal or as correct towards those countries as they should be, but the E.E.C. market over the last decade has been the most quickly growing in the world, and it is on the prosperity of the E.E.C. that the prosperity and advance of the developing countries will depend.

It is possible for us to stand here and preach, but that does not help the countries in whose interests we are supposed to be preaching. The E.E.C. gives more aid per head of the population than this country. France alone gives double the amount that we do. We can pontificate. They have the wealth. One of the things which we have to do is not to ask what we can do for Europe or what Europe can do for us, but what we Europeans can do together to help those countries.

There is a related set of arguments, because this theme of pontification is a relevant one for us all. We have had long debates recently about what we think ought to be happening in Rhodesia and in Vietnam. There have been Motions about what we think should be happening in Greece. We have opinions on everything, and I have a suspicion that, round the world, people are a little fed up with the way we stand here pontificating, saying what should be done all the time, but not having the wherewithal to do it ourselves—[Interruption] Before hon. Members opposite are too enthusiastic with their "Hear, hears" they might like to remember their own past in this respect. They tried an independent venture 11 years ago and, whatever else happened, it was not blessed with success.

We have to make a basic decision. It is all very well saying that, in 20 years' time, there may be an Atlantic free trade area. If we are frightened to expose our agriculture and industry to competition from Europe, how we can say with equanimity that we are not afraid of American competition is beyond my comprehension. It is not an alternative. Neither is it an alternative to suggest that we lead the developing countries—the third world. They spent most of their lives getting free from British leadership, and certainly they do not want any more of it.

The alternative is very simple. Either we go into Europe and, together with our new partners and allies, choose the things which we wish to do politically and economically in the world and try to do them—sometimes they will agree with us and sometimes they will not, but we will be operating within a context in which policies can be organised effectively—or we stand aloof on our own. Economically, the latter would not be catastrophic, but politically over the years it would lead to the end of British influence in a wider world.

I cannot fathom the arguments of my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) when he says that Britain alone can play a vital political rôle in the world. I know what his views are, and I agree with many of them. I can see, for example, the reasons why people in this country might say that we must oppose what the Americans are doing in Vietnam and give our opinions of their actions. I sometimes fail to see why they think that the Americans should take any notice of us. Inside Europe they might. A European military force east of Suez is a possibility. I am not saying that it is desirable. After another five years it will become a complete impossibility for us alone for both financial and other considerations.

It seems to me that the question we should be asking in this debate is not "How much is Europe?", because one does not go into a shop and ask how much something costs unless one wants to buy it. The question is, do we want to go into Europe? I have answered this in the affirmative, and the delated question is: why do we want to go into Europe? What do we want to get from Europe? What ideas do we have about the future organisation of Europe? It seems to me that instead of worrying about whether E.E.C. policy will affect the issue of I.D.C.s and how this will affect existing regional policy, we should be asking what, given a larger E.E.C., with Britain and the E.F.T.A. countries coming in, we want the policy of the E.E.C. to develop into.

I believe that it would be possible for a new regional policy to be evolved which would give more help than the Italian policy has given in the south, and certainly more help than our existing policies give to the development areas of this country. These are the things that we ought to be asking ourselves in this debate, not what the price of individual commodities will be and whether they will go up by a halfpenny, or whether 6d. or 4¼ d. will be added to the balance of payments.

9.1 p.m.

The Secretary of State for Commonwealth Affairs (Mr. Herbert Bowden)

Many people, in the House and outside, have argued that our membership of the Common Market means turning our backs on the Commonwealth and letting down our friends. I do not accept this argument. The economic interests of many Commonwealth countries would be seriously affected if the whole of the Treaty of Rome and the common agricultural policy were applied at once without any amendment or transition, and for this reason we have repeatedly undertaken to safeguard essential Commonwealth interests. We have been, and will continue to be, in close consultation with the Commonwealth about how this can best be done.

For the moment, I want to stress one main point, namely that there is in principle no incompatibility between our membership of the E.E.C. and the Commonwealth. Those who argue the contrary misunderstand the nature not only of the Commonwealth today, but of the Commonwealth as it has been throughout the century. It has never been a political union, or a military alliance, or an economic union, though we have politi- cal ideas and institutions in common, we have defensive agreements with some countries, and we enjoy trade preferences.

We are basically an association with countries in every part of the globe. The Commonwealth strength lies in the fact that the different members can speak for the interests of each region, so that when we meet we have an authoritative view virtually of the whole world. The Commonwealth has never been restrictive, and has never been inward-looking. It cannot afford to be either, so some countries of the Commonwealth have joined other regional groups, such as O.A.U., O.A.S., and ANZUS, of which we are not members, and for many years we have been members of N.A.T.O., S.E.A.T.O. and CENTO, and there has never been the slightest difficulty amongst us about this. Indeed, I would remind the House that in the past we frequently concluded treaties in which Commonwealth countries were not concerned, but which, in their way, committed Britain's policy far more than membership of the E.E.C. will do.

However, even if we have the undoubted right to enter the E.E.C, we must ask ourselves whether it is wise and fair to the Commonwealth to do so. My right hon. Friend the Prime Minister has already spoken about the political and economic advantages, and I want only to emphasise a few points. First, there is no sign of the E.E.C. developing into that kind of supranational body which was the prospect that gave most concern to Mr. Nehru and others who were worried by our negotiations in 1962. Secondly, once we join the Community it will by that fact become something new—an enlarged Community—and we shall be in a position to influence its future development.

But more important, that which strengthens us helps to strengthen the Commonwealth in the end. First, politically, it may prove to be a considerable long-term advantage for the Commonwealth as a whole that a unified Europe, including Britain, should exert a powerful influence throughout the world and an influence that, because of Britain's membership, will automatically take account of their needs and interests. Secondly, on the economic side, it can only be of benefit to the Commonwealth as a whole if Britain herself is strong.

This is the broad judgment that Commonwealth statesmen have reached. Whereas, in 1962, there was criticism from at least some Commonwealth countries, we do not hear such criticism today. All Commonwealth Governments have taken the view that this is solely a matter for Britain to decide. They wish us well, and think that most of them hope that we will succeed, always provided that their essential interests are safeguarded.

We can determine what those essential interests are only after consultation with our Commonwealth partners. Since the statement made by my right hon. Friend the Prime Minister on 10th November, at the beginning of his visit, with the Foreign Secretary, to the Six, the Government have kept in close touch with other Commonwealth Governments and also with the Government of the Irish Republic. We sought the general views of Commonwealth Governments again immediately before reaching our decision to apply, and as the negotiations develop we intend to remain in close consultation with our Commonwealth partners.

But even without that we have a pretty good idea of the main areas of difficulty for the Commonwealth. When we look at the effect on our imports from the Commonwealth we have to face squarely the differences between our present: system and the Community system. Our system, which has operated since the Ottawa agreements in 1932 and is now governed by the Import Duties Act, 1958 is, broadly, this: first, that imports of basic food and raw materials come into this country duty-free from all sources, whether Commonwealth or foreign; secondly, that practically all other imports from the Commonwealth come in duty-free; and, thirdly, that those from foreign countries outside the preference area, with the exception of E.F.T.A. and the Irish Republic, pay our tariff.

There are some other exceptions. For instance, there are duties on some raw materials from foreign countries in order to give preference to Commonwealth suppliers. Some imports from the Commonwealth are subject to revenue duties—for instance, tobacco, wine and spirits. The E.E.C. is gradually working towards a common external tariff which is due to be achieved on 1st July, 1968, after which all trade within the Community will be exempt from internal tariffs and all imports from outside into the Community and its associates will be subject to the full impact of the common external tariff—

Mr. Roy Roebuck (Harrow, West)

I am trying to relate what my right hon. Friend says with the communiqué issued after the last Commonwealth Trade Ministers' meeting, which said: The meeting agreed that the formation of regional groupings among developed countries where this resulted in the creation of high protective barriers, gave cause for disquiet and could have serious adverse affects on the prospects for increased international trade and co-operation. How does he relate the two?

Mr. Bowden

The relation of that statement after the last Commonwealth Trade Ministers' meeting to what is happening at the moment is the subject of discussion in the Commonwealth.

If Britain joins, there will have to be an adequate transitional period, during which we would move over by degrees to the common external tariff and at the end of which, however long it was, we would benefit from the free movement of goods within the Community. But we should have to apply the tariff to imports outside. This would include goods from the Commonwealth, except that we expect to agree special arrangements during the negotiations.

I do not want to weary the House with figures, but I must quote some. In 1965, according to the Commonwealth Economic Committee's Report on Commonwealth Trade, our total imports from all sources were £5,700 million, of which £1,700 million—29 per cent.—came from the Commonwealth and about £1,000 million from the E.E.C. This does not mean that all our Commonwealth imports, which are now free of duty, would be subject to the duty, because most basic raw materials are duty-free within the Community, just as they are within our own system.

Some foodstuffs, like mutton and lamb, would be subject to the Community tariff. They do not come under the common agricultural policy. Others would be subject to that policy, which means subject to levies representing roughly the difference between the world price and the price under that policy. We cannot exactly foresee the effect on different commodities and different supplying countries. It would vary, perhaps considerably. All we can do is look at the comparative importance of Britain as a market for Commonwealth goods.

Using again the 1965 figures given by the Commonwealth Economic Committee, we find that we took 14 per cent. of Canada's exports and 18 per cent. of Australia's. But over a quarter of the latter was wool, which is duty-free. New Zealand is, of course, in a much more difficult position. She sells us 48 per cent., nearly half, of her total exports, of which wool accounts for 6 per cent. Even after that, however, more than 40 per cent. of New Zealand's exports come to Britain, consisting of dairy produce, mutton, lamb and other foodstuffs, all of which, under the existing E.E.C. system, would be subject to tariffs or levies.

That is why the Prime Minister and the Foreign Secretary drew particular attention to New Zealand's problems in the discussions in the European capitals. There was fairly widespread recognition among the Six that the problems for New Zealand if we enter the Community are unique. This uniqueness stems from the degree to which New Zealand is dependent on the British market.

Agriculture accounts for more than 90 per cent. of New Zealand's exports, and half of these come to Britain. In 1966, we took 86 per cent. of New Zealand's butter, 78 per cent. of its cheese and 92 per cent. of its lamb. These three items alone total 30 per cent. of New Zealand's exports to all countries. The hard fact is that should Britain enter the E.E.C, without derogation from the common agricultural policy as it now exists, we should be required to pay a very heavy levy on some of New Zealand's principal exports.

That is why we think that it is most important to agree with the Six on a special arrangement for New Zealand to prevent its economy from suffering unduly from our joining the Community. I am sure that, whatever divergent views may exist, all hon. Members share this view. The manner in which New Zealand's essential interests can be best safeguarded will require a good deal of careful consideration and full discussion with the New Zealand Government and with the Community itself.

Sir R. Russell

The right hon. Gentleman referred to a special arrangement to prevent New Zealand's economy from suffering unduly. Why should it suffer at all?

Mr. Bowden

The object of the negotiations will be to see that it does not suffer at all. [Interruption.] I will not go through all the figures for every Commonwealth country.

Mr. Turton

Before the right hon. Gentleman leaves the question of New Zealand, will he answer the specific question which I asked him: whether, in the negotiations, Her Majesty's Government will ask for permanent provisions for New Zealand and will not merely be satisfied with temporary relief?

Mr. Bowden

It has been made quite clear that a special arrangement for New Zealand is needed. One cannot be absolutely sure, until one gets into the negotiations, what that may mean. Speaking for myself, I could visualise a situation in which the transitional period could be so long that it would be permanent.

Mr. William Baxter (West Stirlingshire) rose—

Mr. Bowden

I am sorry that I cannot give way. I have much to say and only a few minutes remain in which to say it.

As I was saying, I will not go through all the figures for every Commonwealth country because, naturally, they vary. For example, Britain takes 18 per cent. of India's total exports, but if one takes away tea, which at present enters the Community duty-free, the percentage which would become subject to the Community tariff goes down to 11 per cent. Even that 11 per cent. may and could mean a great deal to producers and manufacturers who find their trade affected. These are precisely the things we have to discuss with the Commonwealth and with the Six.

I wish to make special mention of sugar because some Commonwealth countries, especially some in the Caribbean, and Fiji and Mauritius, depend so heavily on it for their export earnings. The whole economy—the very life of some Commonwealth countries and dependent territories—exists only on the sugar exports made possible by the Commonwealth Sugar Agreement. At present, they are protected by this agreement, which guarantees them a market here for a fixed quantity, a quota, of sugar each year at a price which covers their costs of production.

When the common agricultural policy comes into effect for sugar, the internal Community price for sugar will be about £80 a ton compared with the £47 that we pay at present. A price as high as that would provide a strong incentive to growers in the Community, which itself already has a surplus of sugar, to increase production still further, to the detriment of suppliers overseas. So it is highly important that we should agree with the Six on some arrangement to protect the interests of small Commonwealth countries and dependent territories which live almost exclusively on producing sugar.

I have been dealing with the effect on our imports from the Commonwealth if they become subject to Community tariffs and levies as they stand at present, but I remind the House that it is part of our policy to secure safeguards for all the essential Commonwealth interests.

Mr. Reginald Maudling (Barnet)

While dealing with these commodities, can the: right hon. Gentleman deal with the very important question of Canadian and Australian wheat and say whether he has a permanent or temporary solution in mind?

Mr. Bowden

It would be rather easier to answer that and to discuss the sort of negotiations which one would wish to enter about cereals from Australia and Canada if we knew the outcome of the Kennedy Round, which we do not yet know.

I hope that no one will think that because I have singled out just a few countries tonight they will be the only Commonwealth countries or interests which we shall have in mind. One or two hon. Members have drawn attention to other Commonwealth problems and interests and I can assure the House that these will not be overlooked. We shall be consulting all Commonwealth Governments about their special interests so that we may have complete information about all the matters to which they attach special importance.

I turn now to our exports to the Commonwealth. It has been argued that these are certain to be affected by our entry into E.E.C. because Commonwealth Governments will take away the preferences which they now give us. We recognise, of course, that joining the E.E.C. is bound to affect the preferential position which we have traditionally enjoyed within the Commonwealth. It must, however, be borne in mind that not all Commonwealth countries give us preferences. In 1965, our exports to other Commonwealth countries were worth £1,350 million. This was 28 per cent. of all our exports. Of this amount it was about £600 million which enjoyed some tariff preference and some of this was in countries where our ability to expand exports is limited by the exchange difficulties of the countries concerned.

Even if, in time, every one of these preferences disappeared, that would have to be set against the gain of duty-free entry for our exports to the Community, which in 1965, the same year, were worth nearly £1,000 million.

Mr. Maxwell

And we got paid for them.

Mr. Bowden

Tariff preferences in the Commonwealth have been and still are of immense benefit to our export trade, but I do not accept, and I am sure that British industry does not accept, that our export trade cannot compete without them. Our joining the E.E.C. should not and must not lessen our interest in the export opportunities which exist, and which in many cases are expanding, elsewhere in the Commonwealth.

We have also to recognise that our exports to other Commonwealth countries during the past decade have not been increasing as we would wish. We have been disappointed and sometimes a little hurt to see orders which could have come to us from our Commonwealth partners go to foreign competitors. We have been disappointed, in our trading position with some Commonwealth countries, to find our place in the league table slip to second and third place.

I have tried to sketch for the benefit of the House some of the main problems which our entry would present to Commonwealth countries. The list which I have given is by no means exhaustive. For instance, I have not dealt with the question of Commonwealth immigration since my right hon. Friend the Prime Minister covered it pretty fully at the opening of the debate. Nor would I detract for a moment from the difficulties of that problem. But despite the difficulties that we and the Commonwealth will have to overcome, I repeat that there is no incompatibility between membership of the Commonwealth and of the European Economic Community. I believe that our membership can bring many advantages to other Commonwealth countries, provided that in the negotiations we succeed in safeguarding, as we have promised to do, essential Commonwealth interests. If I did not believe this I would not be taking part in this debate. I could never be a party to turning our backs on the Commonwealth.

I am as aware as anyone of the criticisms levelled against the modern Commonwealth, but I think that they boil down to something like this: that politically and economically Commonwealth countries do not show us the favours we had hoped for—sometimes they tend to act as a pressure group on Britain—and that they are certainly no longer the soft market they were. There is some truth in both of these criticisms, but I do not think that we should ever get into the mood of thinking that everyone is out of step but us.

The fact remains that our trade with Commonwealth countries is still immensely important to us—I have quoted the actual figures; it amounts to one-third of our total trade—more than one half as much again as we are doing at the moment with the E.E.C. countries. This is no reason whatsoever why we should not endeavour, given the right terms, in our negotiations with the European Economic Community on behalf of the Commonwealth, to maintain, if not the whole, a very considerable amount of our Commonwealth trade, and we would hope to take our part in that very much larger market of Europe itself.

We have, of course, links, and very special links, with what are sometimes known as the "old" Commonwealth countries—peopled largely from our own stock, sharing our ideas and our traditions, and with ties that have been tested and have never been found wanting. Any Briton must thrill as I did recently at feeling, for the first time, the vitality—there is no other word that adequately describes it—of Australia, particularly Western Australia, where tremendous development is taking place; the perhaps rather quieter but dogged determination of New Zealand—and the feeling one gets in both of those places of being at home. I look forward very much to a similar excitement when I visit Canada for the Centennial Year and see the amazing Expo 67.

Towards the newer countries in the Commonwealth we have strong but different ties, and very different responsibilities. A strong Britain within the Community will be better able by aid and investment to assist in the development of those newer members of the Commonwealth. I could say much more about the Commonwealth, but it stands for one thing above all: it is a multiracial association, covering all races, every creed and all colours. It is a unique association, and has the opportunity to solve in partnership those tensions between the races which could become the world's greatest threat in the second half of the twentieth century.

Of course, we may fail in our negotiations with the Six. They may refuse to give us safeguards for ourselves. They may refuse to give us the safeguards for the Commonwealth that we seek. If that turns out to be the case, our rejection, or maybe withdrawal, will be honourable, and will, I believe, be understood and accepted by the Commonwealth and the people in this country alike.

Debate adjourned.—[Mr. Walter Harrison.]

Debate to be resumed Tomorrow.

Mr. Speaker

Order. Will hon. Members who wish to leave the Chamber do so quickly without having conversations on the way.

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