HC Deb 29 October 1970 vol 805 cc439-54
The Chancellor of the Duchy of Lancaster (Mr. Geoffrey Rippon)

With your permission, Mr. Speaker, and that of the House, I should like to make a brief statement on the progress of the negotiations for British membership of the European Communities since my right hon. Friend the Chancellor of the Exchequer made his report as Chancellor of the Duchy of Lancaster on 23rd July.

During the period since I assumed my present office, I have had contacts with many Commonwealth Governments on the subject of the negotiations, which I believe to have been of great mutual benefit. I thought it right to visit Hong Kong, Australia and New Zealand during September in order to see for myself, on the spot, the nature of the problems which might arise; and I was able to have extensive discussions with representatives of all three Governments. I have also had the pleasure of meeting Ministers of Canada, Fiji and Commonwealth Caribbean Governments in London. In addition, I am in the course of making visits to all Community capitals. I have already been able to meet several of my Community colleagues, including the president of the European Commission.

I turn now to the progress of the negotiating conference. As my right hon. Friend explained in his statement on 23rd July, fact-finding work was instituted on a broad range of subjects by the Ministerial meeting on 21st July. As has been recognised by the Six themselves, this phase is now over.

Four useful meetings have taken place at the deputies' level in the meantime, largely concerned with preparing the ground for the Ministerial meeting which I attended this week.

I am happy to report that, as a result of this preliminary work, it was possible to record on 27th October the first agreements of the negotiations.

At previous meetings, we expressed some concern whether the Communities' existing arrangements would be adequate, in the circumstances of the enlarged Community, to ensure stability in the markets for pig meat and eggs and to allow adequate supplies of liquid milk. On 27th October, the Community recorded its agreement with our understanding of the possibilities that will be open to us and which would ensure the provision of adequate supplies of liquid milk to meet consumer demand throughout the country and throughout the year; they accepted our views on the importance and characteristics of the bacon market in an enlarged Community and the need for keeping the situation under careful review during the transitional period and thereafter; and they recognised the desirability of stability for pig meat and eggs. We concluded, therefore, that no further points need be raised on these items during the negotiations, except in the general context of transitional arrangements.

We were able also to reach agreement on procedures for an annual review of the economic conditions and prospects of the agricultural industry in the enlarged Community. The Commission will draw up this review for the Council of Ministers on the basis of all the relevant information and after contacts with the agricultural organisations. These arrangements will ensure effective contacts with producers.

The Community confirmed that, in principle, they saw no objection to British dependencies being associated with the enlarged Communities under Part IV of the Treaty of Rome and that Gibraltar would be covered by Article 227(4) of the Treaty, which covers European territories of member states. On the other hand, they indicated that they did not regard the case of Hong Kong as comparable with other dependencies and that it posed special problems which would have to be examined in greater depth. In reply, I stressed the importance of providing for Hong Kong's interests. The question of Hong Kong will, therefore, need further discussion with the Six.

Finally, in response to a suggestion from the Community side, I confirmed that, as a member of the Community, we would accept the common commercial policy, subject to the development of that policy, and that we should be prepared to make every effort in the meantime to harmonise our policies. We agreed that a mutual exchange of information in this field would be of value to both sides.

These, then, are the results achieved at the meeting on 27th October. They indicate that the negotiations have got off to a serious and positive start. They represent an achievement reached by both sides working together towards a common objective. The political will to make the negotiations a success was evident. It was clear that all realised that a successful outcome is a major interest for Europe as a whole. This was shown not only by the agreements I have outlined but by the desire expressed by both the Community and ourselves to step up the pace. We have, in fact, agreed to tackle all the major issues before the end of this year and to continue to discuss them urgently in the coming months.

Mr. Harold Lever

We all welcome, I am sure, that the right hon. and learned Gentleman feels able to report a constructive atmosphere in these important negotiations. We have noted, too, his arduous and extensive travels. While I should by no means underestimate the fortitude with which my hon. Friends will bear the absence of Ministers, individual or collective, however protracted, I think that they would wish me to express appreciation for the considerable personal effort which the right hon. and learned Gentleman has made to make contact with Commonwealth interests in the way he has. However, although these consultations before negotiation are important, will he assure the House that consultations during the negotiations are regarded by himself and his colleagues as of equal importance, and, in particular, will the right hon. and learned Gentleman tell the House whether he or the Chancellor of the Exchequer consulted the Commonwealth countries in relation to the recent statement about agricultural support, which appears to have caused considerable anxiety and concern, and, indeed, protests from Australian and Commonwealth interests?

May we have an assurance that the Chancellor of the Duchy will not attempt to put these matters into water-tight compartments by some artificial argument, since, clearly, matters like the agricultural support policy are related with our proposed entry into Europe and are of great concern to Commonwealth interests?

As regards the dependencies, I am sure that my hon. Friends will welcome that the Community has accepted that, in principle, there is no objection to their association. May I take it that this has been accepted as regards the Caribbean dependencies as well as others? I hope that the right hon. and learned Gentleman has made plain the Government's position as regards the protection of Hong Kong's interests.

Finally, on this question may we have an assurance that no negotiations will be undertaken by the Government on behalf of Rhodesia so long as the state of U.D.I. is maintained?

Mr. Rippon

I thank the right hon. Gentleman for the way he received my statement. I assure him that there will be close and continuous consultation throughout the negotiations not only between ourselves and the Commonwealth countries affected but with other countries and our E.F.T.A. partners also.

As regards the changes in the agricultural support system, naturally, the Commonwealth and other countries concerned were informed of the position. I took the opportunity when I was in Australia and New Zealand to say that this was a change of policy which the Government had in mind whether or not we were successful in our negotiations to join the Communities. I assure the right hon. Gentleman that we shall not consider all these matters in water-tight compartments. They are part and parcel of our whole trading and future policy towards Europe and the rest of the world.

As regards the dependencies, subject to the point which I made about Hong Kong and a matter which has to be cleared up about free port facilities in Gibraltar, I think that no difficulties should arise. In so far as we have to consider in the future the position of the independent developing members of the Commonwealth, I assure the right hon. Gentleman and the House that we shall have regard to their interests. The position of Rhodesia is a little complicated constitutionally in so far as a territory in rebellion raises certain problems, but there would be no difficulty, if an opportunity should arise, in putting forward the case of Rhodesia for special treatment.

Mr. Thorpe

There will be great satisfaction at the progress which has been made, and I extend to the right hon. and learned Gentleman good wishes for further advances.

First, when will the next full Ministerial meeting take place? Second, as regards Commonwealth countries which face special problems, is it the present feeling of Her Majesty's Government that they should seek an extended transitional period for free entry, or quota-free entry limited to certain quantities, or a combination of both?

Mr. Rippon

We have not taken up fixed positions on these matters. We shall be putting forward more detailed proposals regarding our views, with reference, in particular, to the dairy products of New Zealand and the sugar producing developing territories of the Commonwealth. For these, I feel that it may not be found adequate to have simply transitional arrangements. We may have to have continuing arrangements, subject to review, or adopt a formula of that kind, and I shall certainly take the opportunity to make clear to the Community that regard must be had to the need to strike a proper balance in respect of quantities as well as prices.

Mr. Turton

My right hon. Friend did not make any mention of the length of period of the transitional arrangements for agriculture. Did he make it quite clear to those with whom he was negotiating that any reduction in the six-year period would put an undue burden on the housewives of Britain and be quite intolerable in this country?

Mr. Rippon

What we have done is to put forward a suggestion for six years, which as we now see it, seems a very reasonable period for agriculture, just as we have suggested three years, which seems reasonable to us, for industry, and one year for the Coal and Steel Community and Euratom. We have not yet had the views of the Community. Our proposals in these matters are for negotiation.

I think I should have added in reply to the right hon. Gentleman the Leader of the Liberal Party that the next Ministerial meeting will be on 8th December.

Mr. Cledwyn Hughes

I am very concerned about that part of the statement where the right hon. Gentleman said that no further point need be raised on bacon, pig meat, milk, eggs during the next negotiations. I would ask him to clarify three points. First of all, will he say that the principle of the bacon market sharing understanding which we negotiated, namely, that the United Kingdom producers will have a growing share of the home market, will be maintained? On milk, will he say whether milk includes milk products—that is to say, cheese and butter—which are of primary importance to the British producer? Will he say whether milk powder is included and that there will be some control of imports of milk powder from the European Economic Community into this country? On the part where he referred to the Annual Review, lest there be any misunderstanding in the farming community in this country, will he make it quite clear that he is not referring to the possibility of no annual Price Review if and when we enter the Common Market?

Mr. Rippon

On the bacon market sharing understanding, of course we shall have to have further discussions on all these matters within the context of the transitional period. There is no doubt about that. As for milk, we were dealing with liquid milk and not with dairy products. We have put in papers about dairy products not only in relation to ourselves but also to New Zealand, and that we shall have to discuss in detail, I hope very shortly. As for the agricultural review, we shall of course be able to have our own Agricultural Review while participating fully in the arrangements which the Community have developed and will continue to develop.

Mr. Cledwyn Hughes

The right hon. Gentleman said that there would be an Annual Review. This is very important in relation to the agricultural community. Is he saying clearly that there will be, if and when we enter the Common Market, an annual Price Review on the same terms and conditions as it is held now, and also an annual review held so far as the European Economic Community is concerned?

Mr. Rippon

There will be an Annual Review held in the way in which the Community and ourselves have now agreed, which will enable contact to be made with the producer organisations. We shall also have, too, if we wish to have, our own Annual Review at national level with producer organisations.

Mr. St. John-Stevas

While congratulaing my right hon. Friend on the skill with which he is conducting negotiations in Brussels about which we have all read in today's Times, may I ask him whether he can assure the House that his position is flexible on the transitional periods and that his words on the three years and the six years are his first words and not his last words?

Mr. Rippon

Of course these are first words. What I have made clear is that, so far as we are concerned, there is no doctrinal merit in absolute parallelism, adequate parallelism, or no parallelism at all. What we are concerned to do is to work out with our friends and allies arrangements which ensure that we enter the Community on terms which are fair and reasonable for all parties, for the existing members of the Community and for ourselves.

Mr. Maclennan

While welcoming the negotiations taken so far, may I ask the right hon. Gentleman whether he can say what, in his view, will be the effect of these negotiations upon the preliminary discussions which are taking place among the Six on aspects of Community policy as, for example, fisheries, and whether he foresees as yet how these problems will be dealt with?

Mr. Rippon

I think we have now reached agreement between ourselves that it is most useful to the pace of these negotiations that all parties refrain from any activities which might make their successful conclusion more difficult.

Sir D. Walker-Smith

Would my right hon. Friend clarify his reference to the acceptance of the commercial code subject to its future development, and say specifically whether this carries any commitment, expressed or implied, to the acceptance of a system of financial or economic integration in whatever forms they may eventually assume within the Six?

Mr. Rippon

My right hon. and learned Friend can be satisfied that questions of economic and monetary integration or future co-operation are outside the framework of the common commercial policy as it now stands. The reservation is put in because we are mainly concerned with any development which takes place during the negotiating period.

Mr. Peart

I wonder whether the right hon. Gentleman would clarify the point raised by my right hon. Friend the Member for Anglesey (Mr. Cledwyn Hughes) about the Price Review? The right hon. Gentleman gave the impression that there will be still an annual Price Review here deciding prices in the normal way, and he added that when we entered the European Community he would hold a Review as far as European prices are concerned. Can these two be adjusted in the way he thinks? Or is he under some misapprehension?

Mr. Rippon

The position is that we are free to have our own Annual Review if we so require it and if we feel we need it. That is a separate question from the Price Review which will take place within the enlarged Community.

Sir F. Bennett

My right hon. Friend was good enough to mention Gibraltar, whose interests are obviously very much affected. I wonder if he could say a word about some other smaller territories in Europe, the Channel Islands and the Isle of Man, and clarify what is causing considerable anxiety, and that is, whether they come in—willingly—or whether there is a special position for them or not?

Mr. Rippon

I have had some discussion with representatives of the Channel Islands, but we have not dealt with their position yet.

Mr. Jay

Has the right hon. Gentleman accepted on behalf of this country the whole substance of the common agricultural policy of the E.E.C. with all its consequences for this country and without any authority from this House?

Mr. Rippon

I have said we have accepted the common agricultural policy subject to points which we wish to raise during negotiations.

Mr. Peter Mills

While congratulating my right hon. Friend on the progress made as regards agriculture, may I ask him, while bearing in mind that many of us in agriculture feel we shall do very well in the Common Market, to allay one serious fear, that we could carry out the rules and regulations from Brussels when other countries tend not to sometimes?

Mr. Rippon

I am sure that we shall behave properly and I am sure that our new partners will do so, also. I concur with what my hon. Friend said about the likely benefits to agricultural producers in this country.

Mr. Mackintosh

While I think everybody who supports, and even those who are opposed to, entry to the Common Market will appreciate the pace and momentum which the right hon. Gentleman has set up, and we all want a speedy conclusion one way or the other, I wonder if he would consider publishing, through his office, some sort of news sheet or briefing sheet which would let us know about how he is progressing and what stages are reached, month by month, because we have to address meetings all over the country on these questions, and regular information of this kind, including the positional papers, would be extremely useful.

Mr. Rippon

Normally, I would be answerable to this House and would make statements in this House, but there are certain circumstances in which it might be proper for the Government to issue, in one form or another, other information, and I do not see why anybody should lack knowledge of what is happening. I would certainly be prepared at any time to answer questions put to me by hon. Members in this House or in letters.

Mr. Jopling

To what extent has my right hon. Friend made progress, in offsetting any trend in our balance of payments, in finding new ways in which the Community could help us with projects for regional development?

Mr. Rippon

The Community is very concerned about matters of regional development. We have not got down in detail to discussions of the contribution which we can make to the Community's budget or the way in which those matters will be dealt with. Certainly we all envisage that within the framework of the Community there are great possibilities for improving regional development policies.

Mr. Barnes

Can my right hon. and learned Friend say something about the attitude of the Community towards British estimates of the cost of entry? Is it not the case that while our estimates may represent a good bargaining position they are definitely on the high side?

Mr. Rippon

When it comes to matters of estimates as to what will happen in 1978 there is certainly room for some discussion. We have put forward what appeared to be, in terms of the White Paper produced by the previous Government, a fair assessment of what might happen, on certain assumptions. The Commission is now considering that and, I believe, preparing papers which it is putting to the Council of Ministers. We shall see its observations and at the end of the day we will have to find a solution which represents a fair balance between the Community and the new applicants.

Mr. Emery

While wishing my right hon. and learned Friend fair speed, may I ask, following a question from the other side of the House about negotiations going on inside the Community, for information about the work of the committees? Fisheries was mentioned but there are four or five committees working. Have any steps been taken to enable us to participate in these negotiations, perhaps only as observers, so that we can travel in parallel with what the Community is negotiating?

Mr. Rippon

Sometimes we play about with whether or not we ought to have consultation or discussions, or be informed. In practice there is now developing the good habit of communicating with one another in the appropriate ways so that we know what is happening. As I said, the important thing is that neither party should prejudice the success of the negotiations by taking unnecessary action in the negotiating period. I hope that we will keep the negotiating period as short as possible so as to remove these uncertainties altogether.

Mr. Barnett

Could the Minister say on this question of fairness, whether during the course of negotiations, after the end of the Common Market's own transitional period in 1977, he is hoping to change our contribution to the fund?

Mr. Rippon

We shall have to see how our discussions go on what is a fair contribution to make to the various funds of the Community.

Mr. Adley

Would the Minister accept that some of us on this side who are basically pro-European are a little perturbed that some countries would seek to judge us as good Europeans by our willingness or otherwise to accept their conditions as to which aircraft consortia should proceed and which should not while they at the same time refrain from membership of N.A.T.O. and still manage to call themselves good Europeans?

Mr. Rippon

These are not matters arising out of the negotiations which I am conducting. I hope that in all these matters we shall show ourselves to be good Europeans.

Mr. Alfred Morris

Dealing with the six-year transitional period for agriculture, did I understand the right hon. and learned Gentleman to say in answer to a previous question that he has no objection in principle to reducing that period? Moreover, would he suggest to the Leader of the House that it is now high time for a further test of opinion in this House on this vitally important matter?

Mr. Rippon

As to the period, we have put forward our propositions and we think they are fair and reasonable. In negotiations with friends and allies we must be willing to listen to their points of view. We hope that that will be the basis of our discussions in the months ahead.

Sir T. Beamish

Since such an encouraging start has been made and since my right hon. and learned Friend has said he would like to keep the negotiations as short as possible, may I ask whether it is too early to say whether he has any time scale in mind?

Mr. Rippon

I do not think we can have a fixed time scale when we are dealing with matters so vital to our interests and European interests. What I have indicated is that I believe, and I think my colleagues in the Community accept this, that we should break the back of the negotiations by the middle of next summer, leaving only a few odds and ends, like deciding where we shall sign the Treaty to be cleared up by the 1st January of the following year.

Hon. Members

Oh.

Mr. Rippon

That should be our objective. Clearly we all hope that these negotiations will be successful. That is the purpose of entering into them. I also think it is important that no one should have occasion to say that the negotiations were interminable.

Mr. Sheldon

Does the Minister consider that all the economic consequences of entry can be settled within the context of transitional arrangements alone?

Mr. Rippon

No. There are matters, and I spoke of them earlier in relation to New Zealand dairy produce and the sugar-producing territories, where transitional arrangements may not be sufficient and where we may have to look for other arrangements. In other cases the problems must be considered on their merits and not just dealt with by transitional arrangements, for example, whether and how we maintain free port facilities at Gibraltar.

Mr. Marten

My right hon. and learned Friend has said he has put forward fair and reasonable proposals. As these were in writing and as they are now historic because they have been studied by the other side, is there any reason why this House should not see those proposals? Secondly, in relation to the fact finding reports which have been taking place, as they deal with facts is there any reason why those too should not be seen by this House? Surely there is no secret in all this?

Mr. Rippon

There is no secret in the sense that my hon. Friend can put any questions he wants to me and I will do my best to answer them. What I do not think will be appropriate would be to make public all the documents involved in what are traditionally confidential negotiations.

Mr. Shore

Is the Minister aware that he has made an appalling, smug and at times even flippant statement? Has he not even mentioned the report of the Werner Committee and the very important matters covered by that report in his recent visit to Europe? If he has not done so, surely he plans to bring this within the ambit of entry discussions? If he does bring it within that ambit, I hope he will make clear that we have no intention at all of accepting permanent exchange rates at existing parities or any moves towards a common currency.

Mr. Rippon

In my statement today I could deal only with the matters about which I have been negotiating in the last few weeks and particularly the subjects dealt with at Luxembourg on Tuesday. Of course the issues raised by the Werner Report are of great importance to us. They are not directly matters for negotiation as such but certainly there will be discussions, and I would imagine discussions in depth, about the implications for the future. The matters which we raise in relation to economic and monetary integration are not for tomorrow, they are matters which will arise when we are members of the Community—[HON. MEMBERS: "No."]—and therefore in a position to express a view.

We have said, and I should make this clear, that we have no objection to the long term objectives which the Community has in mind. In these matters we are prepared to go as far and as fast as they are. All this will take a very long time and there may be great disagreements about the ultimate form and the steps by which we proceed to those objectives.

Mr. Pentland

On a point of order. The Minister has just made a very important statement and more or less changed the issue. This afternoon at Question Time the Prime Minister informed me that the political and constitutional issues involved in these negotiations were nonexistent because they were not being negotiated at present. Now the Minister is saying that he has given an indication in Europe that we are prepared to go all the way on these issues. Is it not a fact then that the political and constitutional issues are very much involved in the negotiations?

Mr. Rippon rose—

Mr. Speaker

Order. That was most ingenious, but it is not a point of order. The Minister may answer if he wishes.

Mr. Rippon

With respect, those are not matters for negotiation. What we are concerned with in the negotiations is how we deal with the problems that will arise on entry, that is the impact effects of our joining the Community. When we are full members of the Community we will have all the opportunities that other members—[HON. MEMBERS: "If".]—I said that I assumed the success of these negotiations. If they fail then these problems will not arise and that would be a pity for us all. But that is by the way. When, or if, we are whole members of the Community, we would have all the opportunities that other members have to express our points of view. Experience has shown that the Community does not move except when it is satisfied that the vital interests of all the member countries are safeguarded.

Mr. Biggs-Davison

In view of our consistently favourable trade balance and other important ties with Australia, will my right hon. and learned Friend, who has shown proper concern for the Commonwealth, tell the Community of the very deep concern here lest we should be compelled to turn preferential trading with Australia into discrimination against her? May I ask him not to give the impression that we will put up with anything?

Mr. Rippon

We have certainly made what the Community regard at the moment as quite a severe demand on it. We have certainly not confined ourselves to putting forward a defence of our interests. We have said that we are deeply concerned about the way in which changes of this character would affect, in the short term certainly, the interests of traditional suppliers, particularly in the Commonwealth. That is one of the main purposes of the transitional period and the transitional arrangements. We have also said that we would expect that an enlarged Community of 10 would be very outward-looking and liberal in its trading arrangements with the rest of the world.

Mr. Albu

While welcoming what the Minister has said about the arrangements he has been able to make for the dependent territories, would he confirm that associate status is available for the developing countries of the Commonwealth, particularly Africa?

Mr. Rippon

We have not dealt with that yet. The position of the developing countries and the newly independent countries will be considered separately. There is no reason to suppose that this will be unsympathetically considered by the Community. This is of particular importance in the case of the sugar producing countries but there are a lot of other problems to be considered in relation to other Commonwealth countries.

Mr. Wilkinson

In view of my right hon. and learned Friend's answer to my hon. Friend the Member for Bristol, North-East (Mr. Adley), could he give a categoric assurance that future British civil aviation projects will not, either covertly or overtly, become a bargaining counter in the current negotiations?

Mr. Rippon

I do not think that that is a matter which arises out of the statement I have made.

Mr. James Johnson

Would the Minister be a little more candid, I will not say more honest, in his statement about the discussions on fisheries? Is it not a fact that the Six met in Luxembourg a fortnight ago and fixed a Common Market fisheries policy to which we, Norway, Denmark and Ireland must adhere if there is a successful ending to these negotiations? What is he discussing about fisheries at the moment? How far has he committed us? Is the right hon. and learned Gentleman aware that this is causing enormous anxiety in our fishing ports, particularly in Hull?

Mr. Rippon

I appreciate that this is causing anxiety not only here but in Norway and we have made representations to the Community about it. I am sure that it is important, while these negotiations are going on, that proper regard should be had for the interests of applicant countries.

Mr. McBride

Is the Minister aware that the introduction of a system of import levies by this country is held by Australia and New Zealand to be an adaptation to meet the requirements of the common agricultural policy of the Community and is also held by those countries to be a stab in the back? Will he remember that in peace and war cheap food has always been available to us particularly from New Zealand but also from Australia? Will he give the House and country an assurance that nothing will be done or agreed to that will hinder the free flow of food imports from those countries? Does he not consider that any other course would be a deliberate act of sabotage directed towards the economies of those two countries?

Mr. Rippon

Trading patterns and trading agreements change all the time. When the changes are made, we must consider their impact on all concerned. That is a major matter of concern in these negotiations. We are conscious of the hon. Gentleman's points and of the anxieties, sometimes very great, which rightly or wrongly are felt within the Commonwealth. We made it clear in the course of our General Election campaign that we had in mind making changes in agricultural support policy, whether or not we joined the Common Market.

Several Hon. Members rose—

Mr. Speaker

Order. I must protect the debate on coal.