§ Q3. Mr. Kenneth Bakerasked the Prime Minister whether he will nominate a Treasury Minister to be a member of the British negotiating team which will enter into discussions with the Common Market countries.
§ The Prime MinisterIt is too early to make detailed arrangements for the handling of the negotiations, but all Ministers with relevant responsibilities are already, and will remain, in close touch with my right hon. Friends the Foreign and Commonwealth Secretary and the Chancellor of the Duchy of Lancaster on all matters affecting our entry into the E.E.C.
§ Mr. BakerDoes the right hon. Gentleman recall that in 1969 both he and the Chancellor made speeches supporting the Common Market and also speeches attacking agricultural levies and the value-added tax? In 1970, if he adopts the rather uncharacteristic pose of consistency, will he either abandon the Common Market or find virtues in agricultural levies and the value-added tax?
§ The Prime MinisterWhat I said and what my right hon. Friend has said, and what the Minister of Agriculture has said, is, of course, that if we secure entry to the Common Market we have to accept the burdens that go with entry. Both of these are burdens, and they would only be worth accepting if the advantages in trade and other matters corresponded with them—[HON. MEMBERS: "Oh."] This has always been our position. We are not enthusiastic about the common agricultural policy levies: I hope that no hon. Members are. What puzzles me is that the party opposite wants to harm the country by the increased cost of living represented by V.A.T. and by the levies, as an act 691 of government, without the corresponding advantages of European entry.
§ Mr. GrimondI appreciate that one of the senior Ministers on the negotiating team is a Scotsman, but he has not recently been in touch with Scottish affairs. Will the right hon. Gentleman ensure that there is some representative of the Scottish Office on this team?
§ The Prime MinisterOn agricultural matters and on all other matters affecting the negotiations in which the Scottish Office has a statutory responsibility, of course the Scottish Office is fully in the picture in relation to preparing the negotiations. But I cannot accept the innuendo that my right hon. Friend has not been in touch with Scottish affairs. He is just as much in touch with Scottish affairs as the right hon. Member for Orkney and Shetland (Mr. Grimond) is in touch with national British affairs.
§ Mr. Raphael TuckMy right hon. Friend has mentioned burdens on the economy. Has he anything further to say regarding opinions of authoritative sources that the burden on our balance of payments if we join the E.E.C. will be in the region of £1,000 million a year?
§ The Prime MinisterMy hon. Friend will, I think, be willing—I know that I have had to ask him and others to wait a considerable time, for reasons which I have explained—to wait for the Government's White Paper, which I hope will be published in the early part of next month, so that he can, from reading it, form his own assessment of the estimates which the Government have been able to make on the basis of what must be very imprecise assumptions about the results of the negotiations and other questions.
§ Mr. SpeakerMr. Heath.
§ Sir D. Walker SmithOn a point of order—
§ Mr. SpeakerOrder. The right hon. and learned Gentleman should not ask for it at the moment.
§ Mr. HeathThe Prime Minister has mentioned agriculture and the V.A.T. First, on agriculture, when will he address his mind to the real matter of this subject and recognise that a change to the levy system on prices, which need not be in 692 any way as high as those in the Common Market, will allow British agriculture to expand without continual Government expenditure, which his own present policy does not permit, and will provide the Treasury with the funds from subsidies and from levies to enable it to start reducing taxation and improving social service benefits? This is the real substance of the matter. Why does he not address his mind to it?
Second, is the right hon. Gentleman prepared to give an undertaking to the House that the present Government will, in no circumstances, introduce the V.A.T. unless we become a member of the Common Market?
§ The Prime MinisterOn the first—[An HON. MEMBER: "First?"] There are two questions and I will deal with the first first, if that is convenient to the hon. Gentleman.
On the first question, I have addressed my mind to the successive proposals on agriculture of the Conservative Party. The only thing which it is quite clear would expand from it would be an unnecessary increase in the cost of living and in retail prices: that has not been contested by anyone. But I am in some difficulty—perhaps this will be clarified in the debate which I understand may take place shortly—about the shifting basis of the Opposition's policy on agriculture, which, having been based first on the levies and having upset the farmers, has earned for the right hon. Gentleman the condemnation even of the loyal Spectator, in the strongest terms, for what he is saying.
With regard to the value-added tax—
§ Sir Knox CunninghamKeep going.
§ The Prime MinisterI might, if the hon. and learned Gentleman would listen.
With regard to the value-added tax, this was turned down first by the then Conservative Government, and at that time I thought that there was more value in it. We have re-examined it, after the Richardson Report, hopeful that it might be able to solve some of the fiscal problems which the country has faced for many years. We have turned it down and see no case, at any rate in present circumstances—[HON. MEMBERS: "Ah."] We see no case at all for doing it. We 693 believe also, as I have said to the House, that it would place an intolerable burden on Inland Revenue staff and Customs and Excise staff and would raise the cost of living. If it were part of joining Europe, it would be a different matter.
§ Mr. ShinwellOn a point of order, Mr. Speaker. Are we debating the merits or demerits of entering the Common Market? Are we to allow the right hon. Gentleman the Leader of the Opposition to initiate a debate at Question Time? Why not put a stop to this nonsense?
§ Mr. SpeakerThe right hon. Gentleman must leave the chairmanship to the Chair.
§ Mr. HeathIs the Prime Minister aware that, so far as V.A.T. is concerned, such burden as there is—in other words, the operation of V.A.T.—falls on Custom; and Excise, which is not overburdened at the moment? Second, will he now admit that he will not give the undertaking for which I asked him—that the Government will in no circumstances except entry into Europe introduce V.A.T.?
§ The Prime MinisterOn the first part of the question, both the Inland Revenue and Customs are involved. The House has been given the estimates of the number of staff. I note the enthusiasm with which the right hon. Gentleman always seeks to increase the size of the Civil Service, and at great cost to the taxpayer, by imposing a price-raising tax.
On the second part of the question, I have made the position clear but I will repeat it if he is not clear. We certainly do not intend to introduce the V.A.T. except in the special circumstances of entering the Common Market, when we have corresponding advantageous gains. I am delighted to see the right hon. Gentleman's recognition that we are going to be here during the whole of that period.