§ The Prime Minister (Mr. Edward Heath)
I beg to move,That this House takes note of the White Paper entitled The United Kingdom and the European Communities (Command Paper No. 4715).The long debate on which we are now embarking and the White Paper of which the House is invited to take note is an important stage in a process which has been going on now for ten years. It began in 1961, when the Conservative Government first put in an application for membership to the European Communities. It was renewed in May, 1967, when the House by an overwhelming majority of 426 approved the Labour Government's decision to make their application and reopen negotiations.
It was continued when the last Government arranged to begin negotiations in June, 1970, and one of the first acts of the present Conservative Government on taking up office was to send their negotiator to Brussels to sit at the table with the representatives of the Six.
As the House knows, I handled the first negotiations in 1961. It was therefore with particular pride that a fortnight ago I was able to tell the House the present Government's conclusions. I said then :(1) The Government are convinced that our country will be more secure, our ability to maintain peace and promote development in the world greater, our economy stronger, and our industries and peoples more prosperious, if we join the European Communities than if we remain outside them ;(2) The Government are satisfied that the arrangements for our entry agreed in the negotions will enable us to adjust satisfactorily to our new position as a member of the Communities and thus to reap the full benefits of membership ;(3) The Government will therefore seek the approval of Parliament in the autumn for a decision of principle to take up full membership of the Communities on the basis of the arrangements which have been negotiated with them."—[OFFICIAL REPORT, 7th July, 1971 : Vol. 820, c. 1338–1339.]The House will understand that for me and perhaps for many others that statement was a realisation of a hope which I expressed to the Six on behalf of this country in 1961. At the opening of the negotiations, I told them :We desire to become full, wholehearted and active members of the European Community in its widest sense and to go forward with you in the building of a new Europe.1453 That is still my view. It was valid 10 years ago, just as it was valid 4½ years ago when the Leader of the Opposition and his Government declared their belief in a European policy because it was desirable and because it was good for the Western world as a whole that Europe should be developed, strengthened, and become more prosperous.
In the course of the last 10 years, there have been many debates on this question, in almost all of which I tave taken part. In those debates, a broad measure of agreement has evolved about the kind of Europe that most of us want to see and about Britain's place in that Europe.
I accept, of course, that there are some people in the country and on both sides of the House——
§ The Prime Minister
—who have always, in principle, believed that Britain's place lay elsewhere and that Britain's destiny lay outside Europe. This is a point of principle which I have always respected but which I personally have never been able to accept. It will be expressed in different forms on both sides of the House in the course of this debate. It is one which those of us who hold a contrary view will continue to respect.
Amongst those on both sides of the House who do not take that view there has, over the years, developed common ground on the basic principles which underlie the applications made by both Conservative and Labour Governments to become members of the European Community.
This is an exploratory debate. It was deliberately arranged as such at the general request of the House. Perhaps it might be helpful if, at the outset, we reminded ourselves of how much ground we have in common in these affairs. After that, I should like to analyse the differences that have emerged since the White Paper was published. If I may, I shall do this in broad outline. My colleagues who are to take part in these days' debates will deal in greater detail with particular aspects of these matters and endeavour to answer questions which 1454 will be raised by hon. Members from all parts of the House. My right hon. and learned Friend the Chancellor of the Duchy of Lancaster will deal with all points arising on the details of the negotiations themselves. The Secretary of State for Trade and Industry will deal particularly with regional policy and the coal and steel industries. The Foreign Secretary, the Minister of Agriculture, and the Chancellor of the Exchequer will cover those matters touching on their own responsibilities. The Home Secretary will wind up the whole debate.
The reasons that impelled the two Conservative Governments and a Labour one to make application to join the Community seem to us to be as valid today as when it was first made 10 years ago ; indeed, they are probably more valid.
There is the industrial and economic argument. I have always stressed the industrial and economic argument, though I must remind the House that when we first entered into negotiations we gave priority to the political considerations. The promise in the long run of a single market in Europe provides a foundation from which European industry and European science can grow to match the achievements of the United States and the Soviet Union. This is a point which the Leader of the Opposition quite rightly emphasised when he said :…all of us are aware of the long-term potential for Europe, and, therefore, for Britain, of the creation of a single market of approaching 300 million people, with all the scope and incentive which this will provide for British industry, and of the enormous possibilities which an integrated strategy for technology, on a truly Continental scale, can create."—[OFFICIAL REPORT, 2nd May, 1967 : Vol. 746, c. 313.]Nothing has changed in the last 10 years, except that the possibilities have increased, the scope and incentive have grown greater, and the Community has become more prosperous.
Of course, the economic argument has far wider implications. A Europe that is strong economically will be able to play its rightful rôle in world affairs. Again as I said in 1961 to the Community at the opening of negotiations :You have shown what can be done in a Community comprising a group of countries with a will to work closely together. Our wish is to take part with you in this bold and imaginative venture ; to unite our efforts with yours.1455 Nothing had changed six years later when the Leader of the Opposition declared :… 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."—[OFFICIAL REPORT, 8th May, 1967 ; Vol. 746, c. 1095.]I have always believed that this Community is not something to be feared :I have never seen a European policy as a policy of withdrawal into 'fortress Europe', either for ourselves or for other countries. I have always seen it as a means of enabling us with Europe to continue an influence which I believe to be beneficial in other parts of the world."—[OFFICIAL REPORT, 9th May, 1967 ; Vol. 746, c. 1296.]That was the way in which I welcomed the application of the then Government in 1967. A Europe which is uniting can be a new and more powerful force in the world.
Equally, the right hon. Gentleman refused to 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.Nothing has happened in the last 10 years except to show that a Britain outside Europe, and a Europe without Britain, has been unable to influence in great measure the events in the Middle East or the Far East, while we have watched a new power rise to a position of immense influence in all parts of the world.
Nor must we under-estimate the contribution that the unity of Western Europe can make to the cause of peace and the easing of tensions. I hope that the right hon. Gentleman will forgive me if I use what turned out to be prophetic words to underline this message. He said :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 1456 achieving this will be immeasurably greater."—[OFFICIAL REPORT, 8th May, 1967; Vol. 746, c. 1095.]The right hon. Gentleman has again welcomed that. I believe that those words were first spoken by him to Mr. Kosygin during his visit to London in January, 1967.
Again, nothing has changed since that time, nothing has changed since 1951, except that we now have a Social Democratic Chancellor in Western Germany, supported by the Social Democratic Party, who has made the boldest and most audacious effort so far to ease the tensions that divide his country and the world. That surely provides grounds for even greater suuport for the Community than was possible 10 years ago or 4 years ago. There is, then, considerable agreement about the kind of Europe with which we wish to become more closely linked.
After this, we have all had to decide whether this should be brought about by means of an enlarged European Community, whether the Community is the kind of community with which we want to be associated to achieve these purposes, and whether it has the kind of institutions to which the United Kingdom would wish to belong.
Again, there is a good deal of common ground here in the House. This is only natural, because the decision to negotiate, taken by three Administrations in three different Parliaments, involves an acceptance of the basic Community and its institutions. It meant that we accepted the Treaty of Rome, with any such adjustments as might be necessary as a result of new members acceding to it, such as the voting strengths which are set out in the White Paper, and provided that we received satisfaction on any point about which we might see difficulty in the course of the negotiations. The Conservative Government of 1961, the Labour Government of 1967, and the present Government of 1970 have all accepted it.
It meant accepting the common agricultural policy of the Community, whether it was approved by many in this House or not, with any such adjustments as were considered necessary and desirable for new members over a transitional period. [Interruption.] I am saying exactly the reverse. Perhaps I may elucidate. I am 1457 saying that to enter into negotiations meant accepting the common agricultural policy—[HON. MEMBERS : "No."]—with transitional arrangements whether or not individual members approved of that policy.
§ Mr. John Mendelson (Penistone)
Does the Prime Minister recall that both in this House and during the General Election what my right hon. Friend, the Leader of the Opposition now—[An HON. MEMBER : "Which one?"]—put to the House was the question of entering into negotiations? [Interruption.] This is a serious question. I hope that I shall be allowed to put it. All that my right hon. Friend the Leader of the Opposition put to the House was the question of the opening of negotiations. As Prime Minister he stressed that the House was agreed that negotiations should be entered into. Finally, does the right hon. Gentleman agree that in his election manifesto he never put to the British people acceptance of the common agricultural policy? He said that all we were committed to was to negotiate.
§ The Prime Minister
It has long been recognised that we could apply to enter into negotiations with the Community, but that unless we accepted the common agricultural policy negotiations would not begin. [Interruption.] I am trying to deal with the hon. Gentleman's point as to what was said in our election manifesto. It began by saying that if we could negotiate the right terms we believed that it would be in the long-term interests of the British people for Britain to join the European Economic Community.
I will now deal very briefly with the common agricultural policy. By 1961 that policy had not yet been fully formulated. Therefore, there would have been great advantage to us in becoming a member and helping in its formulation. By 1967 that policy was a fact of European life.
Finally, the negotiations meant accepting the other Community institutions as they developed before we became full members, and this the Governments of 1961, 1967 and 1970 have also fully accepted.
In the last 10 years neither the Community nor its institutions have changed, 1458 except that they have developed, matured, prospered and proved themselves. In my experience, I have found in meetings with the Commission and with the Community—and it has been shown in the recent negotiations—that they have an infinitely greater degree of flexibility of approach now than they had in 1961 when we were first negotiating with them.
This was the situation when we started negotiations in June of last year. The Community had developed in its own way. Successive British Governments had reached the conclusion that, provided satisfactory arrangements could be made on certain major issues, the security, influence and prosperity of Britain would be better served by joining the Community as it had developed than by staying outside.
What these major issues were had been defined by our predecessors. I do not think that there is any difference of view here. They defined the crucial issues, we accepted them as such, and we embarked on the negotiations.
The first set of issues all related to the interests of our existing trading partners, notably the Commonwealth. It was necessary to ensure that they were able to make as easily as possible whatever adjustments might be necessary to take account of the changes in our trading arrangements which would result from our joining the Communities.
The interests of the Commonwealth in these respects have been a major concern for everyone. All British dependent territories, except Hong Kong and Gibraltar, will be offered association under Part IV of the Treaty of Rome, which I think practically the whole world agrees offers them tremendous advantages. Indeed, much of the rest of the world is envious of it, and some are critical because the advantages are so great. All independent Commonwealth developing countries—Africa, the Caribbean and the Pacific—except those in Asia, will also have the choice of association with the Community under a renewed Yaounde Convention or of a separate trade agreement. The negotiations will begin in 1973 between all the existing and potential associates and the enlarged Community, of which we would be a member with our full rights.
1459 It is obvious that France and Britain have by far the greatest interest here, because the great majority of the States to be associated under the Convention have formerly been connected either with France or ourselves. It is apparent from my discussions with President Pompidou that here we have interests in common : to ensure that the position of these countries in particular as raw material producers is safeguarded.
The independent Asian Commonwealth countries will enjoy considerable benefits from the generalised preference scheme. We and the Community have said that it will be our continuing objective to expand and reinforce trading relations with these countries.
Concerning sugar, our contractual commitments to all participants in the Commonwealth Sugar Agreement will continue to the end of 1974 when the Agreement expires. Thereafter, the developing countries concerned have a clear assurance from the Community, to which we, as a member of the enlarged Community, would be a party, that the Community will have as its firm purpose the safeguarding of their interests. We and the Commonwealth countries concerned have said that we regard the Community's offer as a firm assurance of a secure and continuing market in the enlarged Community on fair terms for the quantities of sugar covered by the Commonwealth Sugar Agreement in respect of all its existing developing member countries. The Governments concerned have made it clear that they are satisfied with this assurance.
Special arrangements like those negotiated for developing countries would be inappropriate for Australia and Canada, and they have not sought them. But they will be given the space provided by the transitional periods to deal with the effects which our entry may have on their industrial exports to this country. They stand to benefit from the special arrangements made for duty-free entry of certain key industrial materials.
I am deeply sorry about some recent Australian criticism of the transitional arrangements which have been made. As the House knows, I have seen a great deal of Australia, both by land and by sea, and I have many friends and connections there. I have the greatest admiration for 1460 what Australia is achieving today. We have arranged that, instead of a phasing out period, there is the assurance that if there is any disruptive effect on its trade action will immediately be taken by the Community, of which we would be a member. We believe that this is a satisfactory safeguard for Australian trade. [Interruption.] It is for the British Government and Parliament to decide, having weighed the merits of the case.
For New Zealand dairy products we have made arrangements which will ensure—[Interruption.] If the constituents of the hon. Member for Bolsover (Mr. Skinner) do not feel that he is representing them, they had better make a change.
I want now to deal with what has been one of the most important parts of the negotiations—the arrangements for New Zealand. For New Zealand dairy products we have made arrangements which will ensure continuing access to the markets of the Community for five years. The Community have agreed to review the butter situation three years after our accession and to decide on suitable measures for ensuring beyond 1977 the continuation of special arrangements for New Zealand butter.
The Deputy Prime Minister of New Zealand has said that it is a major achievement which is very satisfactory for New Zealand. The White Paper records incorrectly that the New Zealand Government have described our arrangements on these matters as a whole as "highly satisfactory". They were described by Mr. Marshall as "very satisfactory". The phrase "highly satisfactory" was used by the New Zealand Prime Minister to describe the review procedure—the review after three years and the commitment to continuing special arrangements for butter after 1977. [Interruption.] Hon. Gentlemen below the Gangway have constantly asked for a long debate in which they could hear what has been happening in the negotiations. If they have any sense of responsibility they might perhaps listen to what has been happening.
§ Mr. Harold Wilson (Huyton)
May I support what the right hon. Gentleman has said. This is a serious debate, and it is right that the right hon. Gentleman should be heard, because he is expounding the White Paper which we are debating. Other right hon. and hon. Members will 1461 be speaking on the White Paper, and I support what the right hon. Gentleman has just said.
§ The Prime Minister
I am grateful to the right hon. Gentleman, and I ask my right hon. and hon. Friends to do the same for him.
§ Mr. Russell Kerr (Feltham)
Is the right hon. Gentleman aware of recent pronouncements by the Leader of the New Zealand Opposition, and is he further aware of the present state of great hostility on the part of the New Zealand people? Will the right hon. Gentleman stop pretending that Mr. Marshall and Sir Keith Holyoake speak for the New Zealand people on this issue?
§ The Prime Minister
It is the New Zealand Government with whom Her Majesty's Government deal. The Leader of the Labour Party wrote a letter to me, through the High Commissioner, raising certain points which he said caused him anxiety. I have sent him a reply to those points, and they have been published in the Press. There is therefore no need for me to go into detail over them. If the hon. Gentleman studies the New Zealand Press he will find that there has been very little support for the criticism of this agreement, and that there has been a determined attempt to keep New Zealand out of British politics.
I turn back to the question of the review. The review arrangement comes into effect after three years and provides a commitment to continuing the special arrangements for butter after 1977. I think that it is curious, but it may be one of the matters with which the Leader of the Opposition will deal, that this feature of the agreement which the New Zealand Government describe as highly satisfactory is one which the right hon. Gentleman has singled out as "selling New Zealand short". That is certainly not what the New Zealand Government think. It is not what the Community believes, and nor do we as a Government believe it either.
The Community is under an obligation to continue a satisfactory arrangement after 1977, and when this is described as a unique arrangement which New Zealand has for five years, that is so. I cannot recall, nor do I think that the right hon. Gentleman with his experience at the Board of Trade and as 1462 Prime Minister can recall, any trading agreement in the world which gives such undertakings as New Zealand gets under this arrangement.
§ The Prime Minister
Morocco's is a purely trading arrangement, in no way comparable to that of a major developed country. Morocco is a developing country. Its arrangements are on roughly the same basis as those which countries of Africa, the Caribbean and the Pacific would have in the enlarged Community.
The Prime Minister of New Zealand has stated in his Parliament that it is the best deal the British could possibly have got for New Zealand. They have specifically stated that they cannot endorse the pricing formula—naturally they would like the best possible prices for their products, and my right hon. and learned Friend endeavoured to get them—but they also stated that their disagreement on this should not be an impediment to our entry into the Community if the general settlement reached commends itself to the House of Commons for other and wider reasons.
I now turn to the E.F.T.A. countries which are not applying for membership, because this is our next concern. It is for them to negotiate direct with the Community what arrangement they want. But we want to avoid damage to our trading relationship with these countries. The Community shares that view and wishes to avoid the creation of new obstacles to intra-European trade.
The second set of issues for negotiation related to the arrangements that we need to make in order to ensure that our assumption of the costs inherent in accession to the Community is phased broadly in relation to our acquisition of the opportunities to benefit from it. If more needs to be said about E.F.T.A., my right hon. and learned Friend can say more tonight, but the position is straightforward. These countries are responsible for their own negotiations. What we and the Community are responsible for is giving them adequate time in which to continue their negotiations and to make the arrangements which they want to make so that fresh trade barriers do not have to be erected.
§ Mr. Douglas Jay (Battersea, North)
Would the right hon. Gentleman answer a simple question about the E.F.T.A. non-applicant countries? Are they to be offered industrial free trade area status with the Community or not?
§ The Prime Minister
They are to ask for what they want, and they are then to negotiate. It is a matter for them to decide. Some have decided that they want a normal form of association. I understand that Sweden has changed the view which she held at the beginning of these negotiations and now wants a different form of arrangement. It is not for us to tell these E.F.T.A. countries what they want, or what they are to have.
I now turn to the question of the costs inherent in our accession to the Community. These arrangements are described in some detail in the White Paper and I do not propose to go over the whole of that ground again now. I want to refer to two aspects of the matter.
The first is the impact on the cost of living of the higher prices which we shall have to pay for some of our food. We have made arrangements which will spread this impact over about six years. We have assumed that the present price relativities between world food prices and Community prices remain unchanged. This seems to us to be the right neutral assumption to make in a situation where it is at least as likely that the gap will be further reduced by rising world prices as it is that the gap will widen again. On this assumption the rise in the cost of living resulting from entry will be about half a new penny in the pound a year for six years.
§ The Prime Minister
If hon. Gentlemen opposite want to dispute the figures they can do so during the debate. Any increase in the cost of living is unwelcome, but when this is put in proportion to increases under any Administration during the last 15 years one can see that it is a comparatively small increase.
The other aspect of the impact on our own economy on which I want to touch is the question of the balance of payments cost. It is easy to identify the types of effects which entry will have on 1464 our balance of payments under their three broad headings—our payments to the Community budget, changes in the agricultural trade, changes in industrial trade, and influences on capital movements and on our invisible trade.
For the first two of those elements we have given estimates of the possible balance of payments cost over the first five years. These estimates depend on assumptions, about the size and shape of the Community budget, about the effects of adopting the common agricultural policy, and about the gap between world and Community prices, which are deliberately cautious—some, indeed, have said too cautious. But at any rate, given these assumptions, it is possible to provide some estimates.
For the other sets of estimates of effects, on the other hand, the effects on industrial trade, on invisible trade and on capital movements, we have taken the view expressed in the February, 1970, White Paper, which said :Not only are the areas of uncertainty very large, but the technical problems of making comprehensive and realistic estimates of the effects of membership are equally formidable …It is equally impracticable to make reliable estimates of the situation in which we should find ourselves in the later 1970s if this country were not to join the Community.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."—[OFFICIAL REPORT, 8th May, 1967; Vol. 746, c. 1081.]Those are not my words ; they are the words used in this House by the right hon. Gentleman the Leader of the Opposition when he was Prime Minister, in May, 1967.
I am therefore not going to give figures for these aspects because, quite simply, I believe it to be unrealistic to do so. There are too many and too large assumptions to be made, many of them about factors which are completely outside our control or are otherwise totally unpredictable. I do not propose to attempt estimates on which I could not invite the House or the public to place any serious degree of reliance.
We have quantified where we reasonably could. Where we could not, we have set out the basis on which a qualitative assessment has to be formulated, and we 1465 have made clear our own conclusion : that the advantages of joining the Community will more than outweigh the costs, provided that we seize the opportunities of the far wider home market that would be open to us.
I have talked of the transitional arrangements. Perhaps I may say a word about the long-term safeguards. These, too, are set out in the White Paper.
On our contribution to the Budget, the Community has declared that if unacceptable situations should arise, "the very survival of the Community would demand that the institutions find equitable solutions." On New Zealand, we have the review procedure and the promise of continuing special arrangements for butter. On sugar, we have the Community's assurance of its firm purpose to safeguard the interests of the countries concerned. On capital movements, we have the provisions of Articles 108 and 109 of the Treaty of Rome. These safeguards have already been, and are being, used by some of the present members of the Community.
On each of these aspects we have an assurance from the Community or a provision in the Treaty which defines the Community's obligations. The fundamental question for the House is really this : do we believe that the Community is now, and will be when we are in it, the kind of body that will approach these matters in a positive, constructive and reasonable manner? The answer must be—in my view—undeniably "Yes". [Interruption.] Because anybody who has watched the operations of the Community since its coming into existence knows that it operates in a positive, constructive and reasonable manner in order to deal with problems which arise in its member countries.
Joining the Community means joining a body which has the institutions and the means of adjusting to the problems of its members as and when they arise. It has demonstrated this over the 12 years of its life and it has shown that it is able and willing to use and develop the powers which it has got.
If we did not believe that—if we believed that the members of the Community would not act responsibly to each other and in international trading relationships—then, indeed, the question would not be whether the terms are 1466 right, or even whether we ought to join the Community ; the question would be whether we ought ever to have applied for membership at all.
It is because we believe that it is the kind of body to which we can reasonably and conscientiously belong—the kind of body that, having resolved differences of view, will act responsibly, with full regard to the vital interests of each of its members ; the kind of body that will carry out what it has undertaken to do—that we can regard the safeguards which we have negotiated on these matters, for others as well as for ourselves, as not just adequate but as fully satisfactory.
The right hon. Gentleman the Leader of the Opposition made essentially the same point in 1967, when he said :Many of the details, many of the consequential decisions—important though they may be—can best be settled on a continuing basis within the Community.With that, too, I thoroughly agree. What I and many in Europe have found most puzzling is the lack of understanding of how this Community works. We in this country—and perhaps in this House-having had 10 years of negotiating outside the Community, during which time we have twice been rebuffed, find it difficult to make the effort of imagination to visualise how we will operate being inside the Community, having our full powers in order to deal with the problems that arise for us and for other members.
In handling this subject, whether it be the negotiations themselves or the discussions in this House, it has always been difficult to strike the right balance between matters of principle and matters of detail. It has always seemed to me right that the Governments of the Six and this House should discuss a considerable number of detailed arrangements in advance of entry. This is the line which we ourselves have twice taken in the negotiations. It has been shown in the reports of my right hon. and learned Friend the Chancellor of the Duchy to this House, and it has been shown in the White Paper.
It is natural, too, that in this debate the House should concern itself with the detailed arrangements which have been set out. I have dealt with some, and ray colleagues will be prepared to deal with others, but for most Members of the 1467 House, now that the arrangements are known, the question is not one of detail but of principle. It seems to me right that, as Prime Minister, I should try to answer one question of principle which I know is uppermost in the minds of many right hon. and hon. Members. That question is : how can Britain continue to exert in the world a strong and constant influence—in defence of her own interests, certainly, but also in the interests of common sense and of humanity?
No one who has sat through these last Parliaments can doubt that this is a question of immense concern to the House. At different times we have all faced calls for action from different parts of the House—action by Britain on Vietnam, on Biafra, and on Bengal. One can think of many other instances in which the British Government have been called upon by Members in all parts of the House to exert their influence. [Interruption.] I do not know why hon. Members below the Gangway opposite should be querulous ; they are usually the people who call loudest for action by any British Government.
Whatever the rights and wrongs of any particular situation, there has been a clear desire that British influence should be felt, and there has been an impatience with the constraints under which British policy has sometimes been forced to operate.
The fact is—and I think that almost all of us would recognise it today—that neither our membership of the United Nations, nor our membership of the Commonwealth, nor our natural relationship with the United States, has provided us with that leverage in world affairs for which the instinct of this House continues to ask. The same is increasingly true of our power to influence international agreements covering world trade and payments, which are so important for our international trading position and so for our prosperity.
It is broadly true, also, of the contribution which Britain makes to the relief of world poverty and the promotion of of world development. Ministers in different Governments have come to this Box and said, quite justifiably, that we are doing all that we can. That is fair 1468 enough. But most of us know that we ought to do more, and that it is in the interests of our country as well as of other countries that we should do more.
Now we have the opportunity to join a Community which has a better aid record than ourselves. It is a Community with a lower average external tariff than ourselves. It is a Community which has provided special arrangements of a unique and remarkable kind for the countries which once formed part of the colonial empires of its members.
Thanks to the success of our negotiations, we have ensured that the vast majority of the countries associated with us in the Commonwealth can either share those special arrangements in the future or else work out trading arrangements of their own with the Community to suit their own particular needs. At the same time, through membership of the Community we have the opportunity to develop the resources out of which we can improve our own record in aid, in trade, and in overseas investment.
These could be substantial gains for Britain in the developing world. But there is another prospect which is perhaps even more important. We are now entering a phase of rapid movement in world affairs which provides opportunities for statesmanship which, if rightly taken, could break down many of the barriers which we have come to take for granted in our modern world. This is certainly the view of the President of France and the President of the United States. I believe that we in Britain will be far better placed to take our share of these opportunities once we are a member of the European Community.
Her Majesty's Government have often expressed support for the efforts of Chancellor Brandt and the West German Government to reach an understanding with the Soviet Union and with the other Communist countries of Eastern Europe. Here is a great opportunity for advance towards lasting peace in Europe, an opportunity which no Member of this House would wish to see thrown away.
The Federal Chancellor has always made it clear to me that his task in reaching an accommodation with his neighbours to the East will be much easier once there is a European Community enlarged to include Britain and pledged to work towards a common European 1469 foreign policy. He has always taken the view, which I endorse, that, so long as the countries of Western Europe are divided, there will always be some who are tempted to exploit those divisions. Once we have an enlarged Community and a common foreign policy then the prospects for understanding between the two halves of Europe will be that much greater.
But the argument runs beyond Europe. We are now seeing a dramatic and welcome renewal of contacts between the United States and China. At the same time, the United States and the Soviet Union are deep in conversations on nuclear matters which intimately affect the future of every citizen of this country and of Europe. We cannot be sure today about the outcome of either of these developments. What we can say is that they are, or should be, the concern of Europe.
So the decision which we are called upon to take on this great matter in the autumn is not simply a decision about our own prosperity. It is not simply a decision whether to join a Community which offers us a chance to do more in the developing world. It is also a decision whether we should join with others in working out a European policy which would give Europe an effective voice in these overhelming developments which vitally affect her future.
This is no longer a choice which can be postponed into the future. It is no longer a choice which is contingent on the decisions of others, because all the members of the Six now welcome us—that is the great change which has taken place since 1961 and 1967. It is a choice offered to Britain here and now in 1971. It is a choice which depends on our own courage and our own farsightedness.
The choice is clear, and the prize is a great one. As a nation we must show the wisdom and the energy to seize it and make the most of it.
§ 4.24 p.m.
§ Mr. Harold Wilson (Huyton)
This "take note" debate provides an occasion for right hon. and hon. Members, in advance of the continuing debate in the country, which will culminate in the parliamentary debate in October and Parliament's definitive decision then, to express their views this week both on the broad issues of principle and on the terms 1470 which have emerged from the negotiations of the past 12 months. At the same time, it provides all right hon. and hon. Members who are not privy to the negotiations with an opportunity to probe the terms more fully and to seek to elucidate the Government's estimates of the short-and long-term gains and costs more fully than they were set out in the White Paper.
The Prime Minister was, of course, totally justified today to explain to the House, in much fuller terms than he could employ in the brief statement that he made when he laid the White Paper, the position of the Government on the terms and on the broad issues of principle.
I think that it would be agreed that right hon. and hon. Members fall, in the main, into three groups on this issue—groups which cut right across the two main parties, and in this they reflect the country as a whole.
First—I think that this group includes the Liberal Party as well as the two main parties—there are those in both the main parties who, on the issue of principle, feel that it is right that Britain should join the Common Market and its associated institutions, I will not say regardless of the terms, since even the most enthusiastic would draw the line at conditions which to them involve an intolerable burden, which in their view would be so onerous as to make it impossible for Britain's economy to put forth its full strength and meet the challenge of entering the Market.
But most hon. Members in this group, in all parties, have decided—the right hon. Gentleman has made it clear that this is true of the Government—that these terms are acceptable. Earlier statements of the right hon. Gentleman before the negotiations concluded, and no less of the Chancellor of the Duchy, made it clear that they had formed this view quite early in the negotiations. Even so, senior members of the Government, including the Home Secretary, up to a few weeks ago were rightly stating it in the House as their view that it was impossible to decide until the terms were fully known.
The second group are those, including the hard core of right hon. and hon. Members of both main parties, who voted against the 1967 decision to apply and who in principle are against joining the 1471 Market—who, for one reason or another, do not consider it in the best interests of Britain that we should become a member. But here again, I think, they would have taken this view regardless of what terms emerged from the negotiations.
The third group consists of those who see advantage—many, indeed, great advantage—for Britain to join the Community but only if the terms emerging from the negotiations provide—here I quote the words that the Labour Party has adopted from 1962 onwards and which were included in successive election manifestos—that the terms emerging from the negotiations "ensure that British and Commonwealth interests are safeguarded." These words were set out in the document approved by the Labour Party conference in 1962, in the 1964 and 1966 election manifestos and in resolutions passed by the Labour Party conference successively since the date of the application of the Labour Government in 1967.
I do not want to inflict too many quotations on the House today, but the right hon. Gentleman very flatteringly quoted many of my statements, so I hope that the House will bear with me if I follow his example and also quote a number of my statements. In the 1970 election manifesto, we said :These will be pressed with determination"—referring to the negotiations—with the purpose of joining an enlarged Community provided that British and essential Commonwealth interests can be safeguarded. This year, unlike 1961–1963, Britain will be negotiating from a position of economic strength"—[Laughter.] The right hon. Gentleman was claiming that at his Central Hall meeting last Wednesday, so hon. Members must not snigger at that one.Britain's strength means that we shall be able to meet the challenges and realise the opportunities of joining an enlarged Community. But it means, too, that, if satisfactory terms cannot be secured in the negotiations Britain will be able to stand on her own feet outside the Community.The Prime Minister has just quoted the Conservative manifesto of last year, of which, for greater accuracy, I have obtained a remaindered copy. Perhaps I might quote not just the selected piece that he quoted but a rather longer piece. We read on page 28 : 1472If we can negotiate the right terms, we believe that it would be in the long-term interest of the British people for Britain to join the European Economic Community, and that it would make a major contribution to both the prosperity and the security of our country. The opportunities are immense.[HON. MEMBERS : "Hear hear."]Economic growth and a higher standard of living"—[HON. MEMBERS : "Hear hear."]would result from having a larger market.[HON. MEMBERS : "Hear hear."]But we must also recognise the obstaclesNo cheers? [HON. MEMBERS : "Get on."] I am entitled to quote from the Conservative manifesto. The right hon. Gentleman quoted from it, and these are some relevant passages. It went on :There would be short-term disadvantages in Britain going into the European Economic Community which must be weighed against the long-term benefits. Obviously there is a price we would not be prepared to pay. Only when we negotiate will it be possible to determine whether the balance is a fair one, and in the interests of Britain".That section in the manifesto could have been taken from any one of my statements on the Common Market over the last four years, and probably was.
With complete and undeniable consistency, the document, "A Better Tomorrow". went on :Our sole commitment is to negotiate ; no more, no less".While we have strongly represented in the ranks of the Labour Party committed supporters of entry and committed opponents, both of them within the limits I have described, regardless of the terms. the official position of the party, since 1962, at the time of the application in 1967, and at all times since has been support for entry given the right terms, the necessary conditions and the essential safeguards on which we have insisted. [Interruption.]
Every statement we have made setting out the great advantages and opportunities open to us from joining the E.E.C. has been based on that necessary condition being satisfied. That has remained our position and, as for the right hon. Gentleman's most flattering quotations today from my previous comments, I do not think he quoted any in which I did not say, as I have always said, that the terms must be right and that we would judge by the terms. When the Prime 1473 Minister quoted my high hopes on technology, he must have recognised that they were pre-Rolls-Royce, pre-Upper Clyde and pre the abolition of the I.R.C.
§ Mr. Cranley Onslow (Woking)
I am grateful to the right hon. Gentleman for halting his helpful analysis of the situation to allow me to put it to him that he is hardly doing himself justice. He mentioned three groups. There is, in fact, a fourth—those who see short-term political advantage in opposing entry to the Market, of which he himself is claiming to be head.
§ Mr. Wilson
I thought this was going to be a serious debate. I regret having given way to the hon. Gentleman, who was only wasting the time of the House.
§ Mr. Wilson
If the hon. Gentleman is speaking for himself, he will no doubt be able to explain later precisely what he means. [Interruption.] Hon. Gentlemen opposite were seeking short-term advantage in 1969 when they thought they would get more votes by playing it cool on the Market. Perhaps that was the group about which the hon. Member for Woking (Mr. Onslow) was speaking. [Interruption.] I will be happy for the information to be made available to the House in the course of the debate, if that will help the Prime Minister. I have quoted it already and I have no doubt that the right hon. Gentleman knows to what I am referring.
§ The Prime Minister
I looked up the quotation to which the right hon. Gentleman referred. It was made in 1969. I said that any future application and failure would be disastrous, regardless of which party did it.
§ Mr. Wilson
I shall be happy to supply the right hon. Gentleman with the whole quotation. He also referred to our application of 1967 as being disastrous.
§ The Prime Minister indicated dissent.
§ Mr. Wilson
He was so reported and I wish that he had issued a denial at the time, though I do not think that that would have suited his book then.
I have referred to the right hon. Gentleman's question. I do not propose, for the benefit of the House, to go through the whole list of quotations that I could 1474 use. [HON. MEMBERS : "Good."] I have noticed in some anthologies a somewhat selective approach in that they have been confined to our hopes and the advantages we saw in entry on the right terms. No reference has been made to the necessary conditions and the achievement of acceptable terms.
This charge can be fairly made about the quotations in the White Paper from me and also in the Conservative Political Centre's devoted publication, which I note with interest is being distributed at a cost of 25p and is not being issued, like other Tory propaganda, free through the Post Office. [Interruption.]
Where the anthologies have been set out fairly and objectively—for example, in The Times last Friday—they have reached the conclusion thatThe importance of securing acceptable terms in any negotiations with the E.E.C. runs as a leit motif through his speeches and interviews.
§ Mr. Peter Tapsell (Horncastle) rose——
§ Mr. Wilson
I will not give way. I must get through as many quotations about me as the Prime Minister got through about me, and then I will stop.
I will try to confine myself to quoting the terms of the announcements of November, 1966, and May, 1967, which related to the application, and my last statement from the Government Front Bench on this subject when our White Paper of February, 1970, was published. On 10th November, 1966, when I announced the discussions that my right hon. Friend the then Foreign Secretary and I had decided to initiate with the Heads of Government of the Six, I said :my right hon. Friend the Foreign Secretary and I intend to engage in a series of discussions with each of the Heads of Government of the Six, for the purpose of establishing whether it appears likely that essential British and Comomnwealth interests could be safeguarded if Britain were to accept the Treaty of Rome and join the E.E.C."—[OFFICIAL REPORT, 10th November, 1966; Vol. 735, c. 1540.]That was our position when the European tour started and, after my right hon. Friend and I had reported to our Cabinet colleagues, I announced our application to the House in May, 1967. This was the result of the impressions we had gained from our discussions on the vital issues on which the right terms had to be 1475 obtained. Setting out some of the issues on which the Government would need to be satisfied. I said—and this is what the right hon. Gentleman did not explain this afternoon :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 cost and impose on our balance of payments an additional burden which we should not in fairness be asked to carry".—[OFFICIAL REPORT, 2nd May, 1967; Vol. 746, c. 312.]That was in the statement announcing the application to the House.
The last statement I made from the Government Front Bench in the 1966–70 Parliament can be clearly summarised in this quotationIf, when the decision is to be taken, the disadvantages for Britain appear excessive in relation to the benefits for Britain which would flow from British entry, the Government clearly would not propose to Parliament that we should enter the Communities. If, on the other hand, the costs, after negotiations, appear acceptable in relation to the benefits, the Government will recommend entry…. We have made clear"—[Interruption.] I trust that hon. Gentlemen opposite are bearing with me. I have still quoted far less of what I have said than the Prime Minister quoted of me. They must listen to what I am saying. They have spent enough party money falsifying it—[Interruption.] Now let them listen and take it.We have made clear"—I advise hon. Gentlemen opposite to listen to the next bit, because they will want to cheer it—that if the negotiations produce acceptable conditions for British entry we believe that this will be advantageous for Britain, for Europe, and for Europe's voice in the world. Equally, we have made clear that if the conditions which emerge from the negotiations are in the Government's view not acceptable, we can rely on our own strength outside the Communities".—[OFFICIAL REPORT, 10th February, 1970 ; Vol. 795, c. 1083–4.]It is on that basis that we approach—[Interruption.]—it is no good hon. Gentlemen opposite talking about my hon. Friends. Both sides of the House are divided on this issue and the sooner that is realised honestly by all hon. Members, as it is realised in the country, the better we will get on. As I was saying, it is on that basis that we approach 1476 the decision which all hon. Members will have to take in October. We have to judge the terms and what they mean in assessing the balance of cost and advantage in the widest sense, in international as well as economic terms of entry. That is what the right hon. Gentleman, fairly from his point of view, set out to do this afternoon.
But never have we said, and nor is a single word that we have said or that I have said capable of being construed as meaning, that we have to accept whatever terms emerge.
§ The Prime Minister indicated assent.
§ Mr. Wilson
The right hon. Gentleman seems to agree, but that is not what the Tory Press was saying, and nor was it what the Lord Chancellor was saying last week.
In the Labour Government's White Paper of 4th July, 1967, and in the Parliamentary debate on the application, we set out the conditions which we needed to see met. I am about to deal with these and my right hon. Friends will be concerned with certain others besides the four issues which I listed. One is fisheries. My right hon. Friend the Member for Workington (Mr. Peart) will want to probe, more fully than has been possible before, the implications of the E.E.C. policy and the unsatisfactory state in which this matter has been left. The second relates to problems arising from the operations and rules of the Iron and Steel Community on which my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) will have some questions requiring answers. The third concerns regional policy, with which the whole House is concerned.
There is growing concern about the regional implications. When I reported to the House in 1967 about my own discussions with the E.E.C. Heads of Government, I explained what we had been told in the Six capitals and suggested that, despite the apparently strict requirements of the Treaty of Rome, there was a considerable degree of laxity, permissiveness even, in respect of individual national programmes for regional development. That is what I told the House.
But recent developments have thrown some doubt on the optimistic impression which we had been given. One instance 1477 which we had been given of a tolerant attitude to the regional policies of individual E.E.C. members related to Belgium, but now, I understand, the Commission has brought Belgium to book for its regional policies. Is that because Belgium is part of the E.E.C. heartland, as it is called, and not, in Commission jargon, on the periphery? But if that is so, how far would the heartland extend in Britain ; how far north ; how far north-west ; how far west ; how far south-west?
There have been reports in the British Press this week about the new guide lines, or rules, or regulations, on national policies for regional development which the Commission is putting to the Council of Ministers for its meeting this week. I for one was surprised to read it reported that even the very limited and ineffective policies introduced by the present Government in Britain were scheduled for possible outlawry, although investment grants would be tolerated up to a certain limit. What of all the other measures introduced by the Labour Government—the regional employment premium, the wide range of new incentives in special development areas, the aid to shipbuilding?
How far would the E.C.S.C. rules prohibit the use of development area and other regional policies in the steel and coal industries? The House now knows—we had to press very hard to get this—that there could be no Government interference in matters affecting prices in steel, not even to sanction the continuation of the Iron and Steel Consumers' Council. We now know that there could be no writing off of capital by the Government, or even any failure on the part of the Government to exact a full target return on capital.
But would the British Government—I am sure that the Chancellor of the Duchy of Lancaster will be able to help us with this—be able to intervene in location policy with the steel industry, as the former Conservative Government did with Newport and Ravenscraig some years ago and as the previous Labour Government did? Let us suppose that a private or public enterprise, or an incoming European producer, sought to build close to an existing development area steel works, to build a new complex at Foulness——
§ Mr. Wilson
The hon. Gentleman cannot have in his constituency the unemployment figures which some other hon. Members have. However, if that were happening, with or without the consent of the hon. Gentleman, could the Government direct that the new works be built in an appropriate development area or location rather than where the firm wanted to build it?
Again, could the B.S.C. investment programme be assisted by investment grants, which under the Labour Government were running at £100 million a year? What calculations have the Government made of the effect of the Community's pricing system and of the ban on delivered price schemes, on those substantial and vital parts of the coal and steel industries which are located in the development areas of Scotland, Wales and the North, to say nothing of the intermediate areas? Would help such as that which was given by the Labour Government for the new aluminium smelters in Anglesey and in Northumberland and Invergordon be permitted? [Interruption.] I hope that hon. Members who do not have regional problems will recognise that many hon. Members on both sides of the House are concerned about regional questions and want answers to them. On what the Commission is proposing about what is called in this new jargon opaque aid, we should certainly not have been able to provide the incentives necessary to get the Leyland-National Bus Factory to Cumberland.
What will be the position of the Highlands and Islands Development Board. I recall that Board being described as Marxism by the right hon. Gentleman who was Secretary of State for Scotland and who in the present Government has occupied the positions of President of the Board of Trade and Minister for Trade. Are the Government satisfied that such Marxist manifestations—and I am referring of course to the Board's pre-foxhunting days—would be acceptable to the free market Eurocrats in Brussels? I hope that we shall have clear answers to these questions.
I hope that in answering them Ministers will be aware of a more general 1479 anxiety which is felt by right hon. and hon. Gentlemen from development areas and, indeed, from wider parts of the country, namely, that the very fact of joining the Market will exert an inexorable pull away from existing centres of industry in Britain to the areas close to the Channel and the ports serving the southern parts of the North Sea and that to meet that much stronger powers, much more uninhibited powers, to assist regional development will be needed, even than those which we have had in the past.
I turn to the main issues set out in the White Paper of July, 1967, issues on which we at all times stressed that we should need to be satisfied if, as the Government, we were to recommend entry—issues, I want the House to be in no doubt, any of which could have become a breaking point for us. These are the issues on which the House must finally judge.
The first is that in which we have asked the Government to set out the costs, the burden on the one hand, short-term and long-term, against the undoubted benefits on the other, benefits which some of us at any rate have always looked forward to as open to us, including what many of us have described as the unquantifiable, possible, hoped-for but not assured, dynamic results of entry. I have argued, not only recently but throughout, that the response of the Community to Britain's costs must be judged not only in statistical or cost-benefit terms. We have to judge what has come out of Brussels over the past few months as an indication of the type of Community which it is proposed we should join. We could not know that until the negotiations were completed.
I said this some time ago in a speech at the London Conference of the European Parliamentarians, asking them in effect whether the Community was a rule-ridden bureaucracy, whether in its motivation it was looking outwards to Europe-wide unity and a wider world unity, or was basically an agricultural welfare complex based on subsidies to high-cost producers, tariffs on imports of cheap produce, backed by expensive import subsidies to sell high-cost produce to the world at low-cost world prices. This was a question which, I said, we might be in a better position to answer when 1480 the negotiations were complete. Right hon. and hon. Gentlemen will form their answer in the light of the terms in respect of the contributions required of us under the Common Agricultural Fund and other financial aspects of the institutions, and in respect of Commonwealth sugar and our imports of New Zealand food.
Our first vital requirement, set out in the White Paper of July, 1967, relates to the balance of payments cost of entry. However strong our present balance of payments, no right hon. Gentleman would maintain that it can be fairly asked to sustain a burden across the exchanges, a burden which would threaten to plunge us once again into deficit, which endangers sterling or forces the Government, as successive Governments have been forced over the past 20 years, into unwelcome and costly restrictions on current production and, through investment, the means to future growth.
I do not under-estimate—and the right hon. Gentleman referred to this this afternoon—the difficulties of making the estimate on the balance of payments. They were, as he said, difficulties which we faced in our White Paper of February 1971, difficulties which as the right hon. Gentleman said last week, led us to produce a final figure which had to be made within a very wide range, dependent on a no less wide range of assumptions.
A large part of our difficulties in preparing that Paper were accounted for by three main factors. The first was uncertainty about decisions which were only then beginning to be taken about the future shape and cost of the common agricultural policy. Decisions taken since then have narrowed a great part of the area of uncertainty within which we had to estimate.
The second related to the actual terms which would be offered to us and on which the ultimate settlement would in great part depend. There was a third factor inhibiting our estimates. On the eve of the negotiations—this would have been true of any Government in this country—there were assumptions that we could not make, and in all prudence we would have been wrong to make, since it might weaken our bargaining position.
It is not too much to ask the Government to give us their best estimates, with whatever notes and qualifications they feel 1481 it right to make in respect of areas and assumptions still remaining uncertain. As the House knows, it is not that an estimate has not appeared. On 25th June a number of, clearly, serious reports appeared in different newspapers, all exactly the same in giving a figure for the estimated effects on the balance of payments costs—£500 million a year by 1978—and all of them, with similar unanimity, stating that this should be set against an estimated increase in the gross national product by the same date of £2,200 million a year. By a process of simple, accurate but highly question-begging subtraction, these papers concluded at the same time, on the same day, that there would be a net gain of £1,700 million.
These figures did not appear on the same day in all these papers with the same statistical accuracy just by a conspiracy of the newspapers concerned or as a result of a sheer coincidence of their statistical assumptions.
It is interesting that these figures do not appear in the White Paper. In their place is a new figure, reaching £1,100 million increase in the national income, without any explanation. This is supposed to be on a ½ per cent. increase. There is no explanation, and it is not a forecast but a hope.
Perhaps the House would agree that it is a fallacy to suggest that if, on certain assumptions, the national product increases by a given amount there is no need to worry about the balance of payments. If that were so, any Government could abstract from their balance of payments problems by going for expansion, for a consumer-led boom regardless. There is no automatic relationship between increased production and the overseas balances, and successive Governments, having gone for expansion, have had to cut back because of the balance of payments content. That is why we aimed, by interventionist policies, to ensure that within any given level of production the export-oriented and import-saving industries could show a more than proportionate expansion. These were the policies which the present Government have reversed.
I trust that during the debate Ministers will endeavour at least to give a clear estimate of the expected cost to our balance of payments and the measures they have in mind to mitigate its impact. 1482 Otherwise all experience—and this is especially true under the Government's present policies—points to restrictions on growth and a growing threat to the level of employment.
The figures required—and the right hon Gentleman set out some of the elements that would have to be taken into account—would include the budgetary contributions on which figures are given in the White Paper. Then there is the admittedly difficult estimate of the effect on trade.
There is a certain damage to some of our large traditional export markets which would be affected by our being required to adopt the Community's rules This damage will be the greater in Commonwealth markets because the Commonwealth preferences from which we now benefit will go and discrimination against the Commonwealth in buying from it may well limit its ability to buy from us.
The question really is how far this damage, which is regarded by everyone as likely if not certain, would be offset over the rest of the 1970s by any gain there would be in trade with the Market itself, provided that our exporters succeeded in increasing their sales in Market territories more than European exporters increase their sales in Britain. Here we have to look at the differential reductions that would be made in the C.E.T. compared with our own.
In the longer term I have always felt it is harder to forecast the outcome, because it is not easy to predict any gain from the dynamic effect on British industry of a wider market. As to the years ahead, the Secretary of State for Trade and Industry was reported in The Times as saying that in the short term there would be an appreciable "downturn" in Britain's external trade due to the acceptance of the common external tariff. While expressing confidence in the longer term, as many of us have, he said :It is likely to prove the case that the balance of disadvantage, created by the progressive adoption of the common external tariff will have a somewhat sharper and quicker effect on external trade than will be the expansionary effect of a progressive elimination of tariffs between us and the Community.It cannot be put fairer than that : it might be put clearer, but not fairer.
1483 There are the calculations of the effects of entry on our invisible earnings. An authoritative article in Monday's Guardian from a City source throws considerable doubt on the optimism which has been expressed about the net earning from invisibles, at any rate for a long period ahead.
I have expressed the hope that right hon. Gentlemen opposite in the course of this debate will give us the best estimate they can of the balance of payments costs, with whatever qualifications they feel it right to make about the assumptions on which it is made. Perhaps they may tell us a little more about the £500 million figure we saw quoted with such obvious authority—indeed the authority was stated to exist—about three or four weeks ago.
If they refuse to do this I have another suggestion. The House will have seen the Motion on the Order Paper, No. 650, calling for a Select Committee on these matters. I do not see how the Government can reject that proposal for these reasons. First, Parliament and the country have the right to know the facts before a decision is reached.
§ Mr. Wilson
Why not sit in August?
Second, in May of last year the right hon. Gentleman committed himself to this. I think he was in Paris when he said :It would not be in the interests of the Community that its enlargement should take place except with the full-hearted consent of the Parliaments and peoples of the new member countries.On "Election Forum" on 27th May, the right hon. Gentleman said :no British Government could possibly take this country into the Common Market against the wish of the British people.He has rejected, rightly in my view but not every hon. Member will agree, a referendum. He has rejected—for reasons which I understand but do not share—the idea of a General Election to test the country's feelings. He is leaving the choice to this Parliament, with the Whips on. On this basis I suggest that he cannot refuse the information that the House needs about the cost of entry. If he 1484 refuses to give it, the House at least ought to be able to discover for itself by the long-established machinery at its disposal—a Select Committee.
My third point is that the right hon. Gentleman may consider that a Select Committee will not be able to discover anything of value. If that turns out to be the case, let the Select Committee representing all of us come to that decision for itself. It is a fact that Governments of all parties consider that Select Committees cannot add to the corpus of knowledge and wisdom inherent in the Government machine. The experience of a considerable number of Select Committees in the last Parliament has totally disproved this élitist view. Take, for example, the Select Committee on Agriculture which investigated the Market question. I am not sure that that was very popular with the Departments or with the Government of the day. But it gained insight not available by any other means, and it made this information available to the House on an issue which the House could not obtain by any other means.
I propose therefore that if, as the Government claim, they have no more to tel us, and if they have nothing to hide—and there is the mysterious incident of the £500 million which suddenly stopped barking in the night—they should move for a Select Committee with power to send for persons and papers and make available all the information, statistical and other, that the Committee might require. It should also have power to sit in the recess and perhaps be asked to produce a report by 30th September.
In view of the very special importance of this question—and most hon. Members are taking this issue seriously—it might be worth considering that Mr. Speaker be invited to preside over the Select Committee or, failing him, some experienced—[Interruption.] If hon. Members opposide know the cost, let them get up and give it, or, if not, let other hon. Members have the facilities for finding out. Failing Mr. Speaker, perhaps some other experienced parliamentarian who is above the battle now raging might preside. I hope that the Prime Minister will consider this suggestion.
§ Sir Gerald Nabarro (Worcestershire, South)
As one who has signed the 1485 Motion on the question of a Select Committee, may I ask the right hon. Gentleman whether he would do me the honour of coupling his name with mine on the Order Paper?
§ Mr. Wilson
I should have to consider the company I might be getting into, but I think I have done more than that : I have given my full support across the Floor of the House to what the hon. Gentleman has supported by signing his name.
I hope that the Prime Minister will consider what I have put to him—I am not asking for an answer now—and will inform the House in due course, and fairly soon.
The second issue on which the Labour Government insisted throughout related to capital movements. This was a central theme of the discussions I had with the Prime Ministers of the Six. I have expressed my anxieties about this question, and no doubt the right hon. and learned Gentleman the Chancellor of the Duchy of Lancaster will be dealing with it tonight, as will be my right hon. Friends later in the debate.
The third issue which we put forward as a necessary condition related to the Commonwealth Sugar Agreement. This Agreement was introduced by the Labour Government over 20 years ago. It has provided the stability of a secure and assured market with guaranteed prices to producers over a wide area of the Commonwealth. The Labour Government, in 1967 and subsequently, maintained that the interests of the Commonwealth producers must be safeguarded. The terms brought back from Brussels carry no such safeguards for Commonwealth sugar producers so far as the Six are concerned. All we have to rely on is the right hon. and learned Gentleman's linguistic achievement in translating "aura ã coeur" into the phrase "it will be the firm purpose of". I do not regard this as a clear and unequivocal guarantee.
When the right hon. and learned Gentleman met the Commonwealth sugar-producing countries, he gave them the impression of an unequivocal pledge by the Government that in one way or another Her Majesty's Government would underwrite a continued market in the enlarged Community for the present 1486 quantities of sugar from the developing countries. The Commonwealth countries had no choice when he said this to them. They had to take it as a binding assurance on the part of the British Government. But instead of asking for guarantees from the Six, as he might well have done, that they agreed to such binding assurances on Commonwealth sugar, the right hon. and learned Gentleman asked for no more than the reading into the record of his statement. He did not ask the Six to say that they accepted what he had said to the Commonwealth.
In the House, when right hon. and hon. Members on both sides asked the right hon. and learned Gentleman about the matter—and I do not like using this word about him—he was a little evasive. We asked him whether the Community had accepted his statement to the Commonwealth. They, he said, had "received" It. If hon. Members are satisfied about a clear answer, perhaps they will explain in the debate what they think the right hon. and learned Gentleman meant. I asked him in the House if he would confirm that there was a bilateral British Government assurance, and whether he interpreted his deal, as I think our Commonwealth sugar producers did, as meaning that if the Six did not deliver, the British Government would insist by their own separate actions on maintaining the safeguards. The right hon. and learned Gentleman has not answered these questions in the House.
When I mentioned the Morocco Agreement to the Prime Minister this afternoon, he seemed a little surprised, but there is a certain parallelism here. On that occasion France received a clear assurance that she could continue her existing arrangement with Morocco to the end of time if there were no adequate acceptance by the Common Market as a whole of her Morocco commitments on the negotiation of which she would have a veto.
I come finally, of the four issues—[Interruption.] It seems that hon. Members do not want to hear about New Zealand. It is typical of some of them, but I am now coming, in the interests of hon. Members who are concerned about New Zealand—and the rest can go off and have the drink that they obviously so much need—to the question of New Zealand, which I believe to be a serious 1487 issue at this time for the whole House and for this country.
During the E.E.C. debates 10 years ago I told the House of the Labour Government's dealings with New Zealand after the war and of the New Zealand spirit of sacrifice in Britain's interests to keep us fed in a period of world famine after the war, even though it meant rationing themselves, and I referred to the New Zealand refusal to exploit the famine position by charging higher prices to Britain. I said :I submit to the House that we cannot consistently with the honour of this country take any action now that would betray friends such as those. All this and Europe, too—if you can get it …if there has to be a choice we are not entitled to sell our friends and kinsmen down the river for a problematical and marginal advantage in selling washing machines in Dusseldorf."—[OFFICIAL REPORT, 3rd August, 1961 ; Vol. 645, c. 1665.]I said that 10 years ago.
On Saturday I said that I would not have recommended the Labour candidate—I mean Cabinet—to make the application—[Interruption.] We had a conference at which Labour candidates were free to express their views. It was not a didactic teach—in on a predetermined line. On Saturday I said—and hon. Members had better listen—that I would not have recommended the Labour Cabinet to make the application for entry into the Market except on the basis of assured and continuing access into Britain of New Zealand produce. That was the position of the Labour Party and of the Labour Government. It is clearly not the position of the present Government.
What I said on Saturday has been called in question, and certain newspapers, perhaps concerned more with their political allegiance or proprietorial or editorial commitment to the Common Market case, regardless of the terms, have since flatly queried my statement. I am therefore entitled to set out the facts about the extent of the Labour's Government's commitment to New Zealand and the exact terms concerning New Zealand on which the Labour Government were prepared to consider entry to the Common Market. Not only that, but on what we said to the Heads of Government of the Six, when we discussed this matter in the six capitals, before I recommended 1488 the Cabinet to agree on the application of May, 1967, and also on what the reaction of the Six was. In so doing, I rely on my own clear memory of what occurred.
§ Mr. Wilson
Indeed, I have refreshed my memory in the manner in which any former Minister is entitled. I have consulted the records, and in what I am about to say I have consulted the conventions, precedents and proprieties. My studies on this subject do not relate to New Zealand alone, but it will suffice for this purpose and the House's purpose to confine what I have to say to New Zealand.
In the early months of 1967 my noble Friend Lord George-Brown and I had intensive talks, lasting many days, with each of the Heads of Government of the Six. Following that, we reported on each of those discussions, in full detail, to our Cabinet colleagues. My noble Friend and I went further. We made a joint recommendation to our colleagues that we should make an application under Article 237 of the Treaty of Rome for entry into the European Communities. All this was public knowledge at the time.
So far as New Zealand was concerned I would not have been prepared to recommend entry—nor, I believe, would the Cabinet have been prepared to agree to entry—except on the basis of the joint recommendation which my noble Friend and I put to the Cabinet, repeating what we had told the Six, namely, thatfor New Zealand a transitional period would not be enough unless it were for a generation, e.g., that arrangements would need to be, if not permanent, at least equal in effect to a permanent change.That, I think, justifies the statement I made on Saturday, and which I repeated today. I think it rules out of court subsequent Press and other statements.
In opposing the Government's New Zealand terms I have taken exactly the line I took, and, let me say, the Cabinet took, in 1967. It is, of course, a fact that neither my noble Friend nor I could in honesty have made the recommendation to the Cabinet in those terms unless we had clearly stated in each of our discussions with the Six what our attitude 1489 was and unless we had received clear assurance in those discussions that it would be worth while applying after we had made clear what our view was.
Since, therefore, the record of our discussions was circulated to hundreds of people all over Western Europe—and our New Zealand friends were kept in the picture at all stages of our discussions ; and since I am satisfied that in what I am going to report to the House there is no breach of established proprieties—I have checked on this ; since, I believe, in view of all the partial and inaccurate information which has been printed, the House has the right to have the facts as they were known to the Prime Minister of the day ; and since, above all, the decision we have to take is so fundamental that the House should not be asked to take it except in full knowledge of the facts, I intend now to give those facts.
I begin with the discussions in Rome. In accordance with a pre-agreed division of work in the negotiations, my noble Friend dealt in the main with agricultural and food questions at some length, and this was his conclusion. He said :New Zealand would continue to present the gravest obstacle, which probably could not be surmounted by transitional arrangements alone.After we left Rome we went to Paris, on 25th January, 1967. Again this was expressed at considerable length :All these problems would have to be resolved when making arrangements for the United Kingdom to join the Community…. It seemed that a derogation"—from the Treaty—would be necessary to give New Zealand reasonable access to the market on which she was so dependent…. He would emphasise what had been said earlier in the discussions : soyez gentils a la Nouvelle Zélande.'Now I turn to Brussels. The date was 1st February, 1967. Again, my noble Friend, after a very long exposition of these questions, said this :The problems raised by our membership of the Commonwealth were difficult ; but it had been generally accepted that they could all be overcome through transitional arrangements with the exception of our trade with New Zealand, for which some form of permanent arrangement would almost certainly be required.Later :New Zealand was, he thought, the only real and continuing difficulty in this field".1490 That is, Commonwealth trade.He thought all members of the Community would need to face the fact …that a permanent and continuing arrangement might be necessary in order to assure New Zealand of continued outlets for her agricultural produce.Also :We had not consulted New Zealand at this stage …there were, however, a number of ways in which the New Zealand problem could be overcome—perhaps by a Morocco-type protocol, perhaps by an association agreement with an enlarged Community under Article 238. perhaps by levy free or reduced levy quotas …he felt sure that it was possible to produce a satisfactory result which would in practice permanently take care of the New Zealand problem. … It was not necessary to use the word 'permanent' to describe whatever was done. He felt sure, however, that it was possible to produce a satisfactory result which would in practice permanently take care"—permanently take care—of the New Zealand problem without prejudice to the Community's Common Agricultural Policy".After Brussels, Bonn. What my noble Friend said there was thatbecause of the extent to which New Zealand's export income and agricultural products depended on access to the British market, the problem of New Zealand would have to be resolved by a more permanent arrangement such as a Morocco-type protocol, or by a form of association, or by a derogation providing special access for New Zealand to the Common Market.The next Prime Ministerial discussions were in The Hague. Again my noble Friend said this :There would be very serious effects indeed on the New Zealand economy and it was difficult to see how transitional periods could overcome this problem, unless they were of such length that they would in effect be equivalent to a material change in the existing arrangements. Various ways had been suggested of overcoming this difficulty, among them, special guarantees of access to traditional markets, and association with the Community. The problem could certainly be solved, but it was a formidable one.Finally, I come to the discussions in Luxembourg, where my noble Friend said thatsome special arrangement would have to be made for New Zealand. Even here, however, a very long transitional arrangement, possibly of more than 20 years, might suffice.The next 20 years, he said. He went on to explain :The real problem arose over supplies of agricultural produce from New Zealand. (Supplies from Australia and Canada would present difficulties but they should not represent insuperable difficulties.) New Zealand 1491 depended on her export of temperate foodstuffs to the British market. This meant that provision would have to be made to ensure access for the agricultural products of New Zealand to Britain and the Common Market on no less generous a basis than she enjoyed at present. The method of arranging this would have to be discussed if negotiations were begun. Something more than a transitional arrangement would be necessary : a Morocco-type protocol might be a possibility or some arrangement which guaranteed access for New Zealand products to the Community Market. Britain could not let New Zealand down in this respect.Those are the facts of what the Labour Government did—Rome, Paris, Brussels, Bonn, the Hague, Luxembourg. That was what was said on behalf of the Government. And the message was the same. In no case when we went to those six capitals was there any comeback, any disagreement, any query. There was no demur. Indeed, after we had stated our case in those terms all except France pressed us to put in our application. So there was no misunderstanding. My noble Friend and I were, therefore, thoroughly justified in recommending to our Cabinet colleagues an application to join the E.E.C. on the basis which I have quoted and which I repeat, thatfor New Zealand a transitional period would not be enough unless it were for a generation, e.g., that arrangements would need to be, if not permanent, at least equal in effect to a permanent change".On that basis, and no other, we recommended to our colleagues that the application of May, 1967, be made. On that basis, and no other, the Cabinet agreed to the application. These talks—and if we had received any objection in any of the capitals of the Six my noble Friend and I could not have reported or recommended to the Cabinet as we did—governed the basis of the Cabinet's decision to apply for entry. Labour's terms were either a permanent derogation or association agreement, or Morocco-type treaty or, if the issue were to be based on a transitional agreement, that transition must cover a generation. Those were Labour's terms on the last occasion when the terms were collectively considered by the Labour Government.
§ Mr. Daniel Awdry (Chippenham) rose——
§ Mr. Wilson
I will give way in a moment. The hon. Gentleman has been very patient. Because of my faith in 1492 the desire of all British newspapers and other commentators, regardless of their political allegiance, to print the facts when they are available to them, and having regard to much recent comment, I express my confidence—and I have the right to do so—that what I have said now about what the Labour Government's decision was will receive as much space in each of them as has been devoted in the absence of these facts to proving the opposite. I have the same confidence that right hon. Gentlemen opposite who have made assertions contrary to the facts as I have revealed them, will take appropriate and early steps to put the record right.
§ Mr. Awdry
Will the right hon. Gentleman answer this point? The very right hon. Gentleman who would have led negotiations for his party, had that party won the election, has publicly stated that he would have recommended to the Labour Government the terms which we have secured, and that they would have been accepted by the Labour Party. Will the right hon. Gentleman comment on that?
§ Mr. Wilson
Obviously, the hon. Gentleman was not listening, because I said, and I repeat—I do not want to weary the House by going through the quotations several times—that the arrangements for New Zealand products must be permanent if we were to use the transitional—[HON. MEMBERS : "Answer."]—I thought that the hon. Gentleman said that the Conservative Government had got the terms I asked for——
§ Mr. Awdry
The point I make is that the very right hon. Gentleman who would have led the negotiations had the Labour Party won the General Election publicly this week on television said that the terms we have secured would have been acceptable to that right hon. Gentleman and to the Labour Party. Will the right hon. Gentleman comment on that?
§ Mr. Wilson
I think my right hon. Friend was announced as Labour's negotiator for the Common Market. Of course, we did not start the negotiations ; they did not occur until the present Government came into power. To answer the hon. Gentleman's question, my right hon. Friend was not a member of the Cabinet at the material time. He is entitled to 1493 express a personal view, and that is all he did express, but his negotiating brief and all that had been agreed by the Cabinet were as I have read out this afternoon.
§ Mr. Sandys (Streatham) rose——
§ Mr. Wilson
I have now given way more times than the Prime Minister gave way, but I will do so for the last time.
§ Mr. Sandys
The right hon. Gentleman has spoken at some length about his concern for New Zealand and the other terms which he considers right and necessary. He referred earlier to his speech at the recent Labour Party conference. Did he not make it unashamedly clear that New Zealand and all the other terms—and in fact the whole European issue—were of purely secondary importance to him compared with the Labour Party's position? Did not the right hon. Gentleman in his final peroration say that the Labour Party's "main objective" was to beat the Tories and get themselves back into office?
§ Mr. Wilson
While that laudable aim is certainly our view on this side of the House, the right hon. Gentleman is totally misrepresenting what I said. When I gave way to the right hon. Gentleman I did so—[HON. MEMBERS : "Answer."]—I will answer, but I will also say on what basis I gave way. I gave way to him having known him and been on very friendly terms with him for many years, because I have always believed that the right hon. Gentleman's sincerity on this European question, going back for many years, cannot be questioned. I hope that he will not question my commitment over just as long a period to New Zealand and the Commonwealth countries.
§ The Chancellor of the Duchy of Lancaster (Mr. Geoffrey Rippon)
The right hon. Gentleman will be aware that we have obtained for New Zealand a continuing arrangement subject to review, and that I made it perfectly clear to the Community that a 20-year transitional period would not be sufficient.
§ Mr. Wilson
The right hon. and learned Gentleman has got nothing but a commitment to reconsider after three years. That is all he has got, and it is interesting to see how President Pom 1494 pidou interprets these discussions with the right hon. and learned Gentleman. I noticed the right hon. and learned Gentleman nodding his head earlier when I said that this problem must be solved for a generation. He was nodding his head as though that was what he had got. I was talking about a generation of human beings, not of hamsters. Hamsters have a rather shorter life than human beings.
I have shown that the only commitment made by the Labour Government in our application to enter Europe was to negotiate—and that is what the Tories said in their election manifesto—with a real purpose to achieve entry if that could be achieved on acceptable terms, and the clearly announced decision of our Government that we should decide in favour of entry only when the terms were available, and only if they were acceptable in accordance with the criteria we had laid down which I have just read to the House. I have proved in the last few minutes that the terms produced by Her Majesty's Government on this important issue of New Zealand——
§ Mr. Wilson
Accepted in terms far less than enthusiastic by the New Zealand Prime Minister. They have been rejected by the New Zealand Opposition. If the hon. Gentleman will study this morning's report from New Zealand, including the letter from Mr. Norman Kirk, he will find under the heading "New Zealand's euphoria ends" a statement by one trade interest after another in New Zealand Conservative newspapers giving the lie to the hon. Gentleman.
What I have said destroys the claim in paragraph 22 of the White Paper, that "They"—the present Government :…picked up the hand which their predecessors had prepared for the negotiating table.This is not the case. I have read suggestions that a negotiating position had been prepared and approved by the Labour Government before June, 1970 and that this was "picked up" by the present Government. This is not the case. Of course a great deal of work had been done by officials, but nothing had come before the Cabinet, nothing had been seen by my colleagues or myself, and the statement in the White Paper and 1495 Press comment based on it are, therefore, untrue. With the £600,000 which the Government are spending on propaganda, it would now be right for them to spare a few hundred pounds to printing an erratum, and giving the facts the same publicity.
So much for the terms. Finally, a word about the White Paper as a whole. The Government have rightly called for a great debate, but have started it off with a White Paper which is a party political manifesto. They must not be surprised if some of the statements in that manifesto are greeted with a disbelief engendered by the false manifesto on which the Government were elected last year, when all our economic problems were going to be solved by a stroke of his wand.
At no stage in that election did he campaign on the proposition that Britain's problems were insoluble, except on the basis of joining the Market on whatever terms we could get. His manifesto itself is eloquent tribute to that. His one talisman for solving all the nation's problems, real or electorally falsified, was not the Common Market. It was the law of the market in Britain. That is what he fought the election on. He never mentioned the Common Market as a means of solving our problems.
Last year's prescription has failed. He now seeks to assert that only in the Market and on these terms can Britain succeed. He will find not only a great many hon. Members but many millions outside who reject this defeatist view, which seems to run through every pronouncement of his since the White Paper was published, and who assert that given the right policies by the Government of this country, Britain is likely to be at least as strong, as vigorous, as prosperous, as influential outside the Market as it would be if we were to enter the Market on the wrong terms.
§ 5.32 p.m.
§ Mr. Jeremy Thorpe (Devon, North)
The Leader of the Opposition suggested that it was wholly wrong to say that it was expected of a Labour Government or the Labour Party that they had to accept whatever terms might emerge. That certainly has never been any suggestion I have made, and it is certainly 1496 a suggestion I have never heard made from any other quarter. In fairness to the record of the Labour Government, the right hon. Gentleman is wrong to say that the commitment of the Labour Government was to negotiate and no more. It was a little more—and what he omitted was what I felt was sadly lacking in his own speech. It was not merely to negotiate, butto pursue our application for membership with all the vigour and determination at our command."—[OFFICIAL REPORT, 2nd May, 1967; Vol. 746, c. 314.]Therefore, we are not only interested in the terms, important though they be, but in the warmth of approach and attitude towards Europe itself. In regard to the suggestion of a Select Committee, if it would help any right hon. and hon. Member out of difficulty I would have no objection to supporting it and I would persuade one of my colleagues to serve on it!
With regard to New Zealand, I hope I may return to that in a moment because I believe that it would be the wish of the Labour Party to assert that what they said in public in negotiations was not manifestly different from what they negotiated in private. By that test, some of the right hon. Gentleman's remarks were not perhaps as weighty as we first might have thought.
There is no difference between us as to the great historic importance of the question we are debating. I believe that the opponents of entry are divided into two categories. There are those who, for a variety of reasons, have never supported the concept of Britain joining the European Economic Community ; and, although I disagree, I respect their view which has been wholly consistent from the beginning of the debate. I must confess that my respect is somewhat tempered by curiosity in regard to that small minority in that category who sat in different Cabinets and who have been opposed to entry but not opposed to making application for entry.
I would regard them as the fundamentalists. In fairness to them, the view they hold today was the view which, up to 1967, was the official predominant view of the Labour Party and which up to 1961 was the predominant majority view of the Tory Party. I hope that we shall see no great heresy hunting as far 1497 as the fundamentalists are concerned. It is for them as much as for the pro-Marketeers that I personally would like to see this matter decided on a free vote. This would enable the conscience of every Member to be made manifest.
I hope that the Tory Party will not be too harsh on their fundamentalists. One of the first votes I cast in this House, was on 14th December, 1959, when the present Home Secretary conceded to my hon. Friend, now the noble Lord, Lord Wade, that the Free Trade Area was his first love but that it was dead ; E.F.T.A. was his second love, and the European Economic Community was a third best. We had tabled an Amendment calling on this country to become part of the Community—which was nothing very new for us since we had advocated such a concept in 1948.
I remember the Home Secretary, then President of the Board of Trade, saidIf the Liberals are prepared to go into the lobby tonight to support the proposition that this country ought to join the European Economic Community, let them realise the consequences to British agriculture, British trade and Commonwealth connections inevitably inherent in the proposition which they are supporting.—[OFFICIAL REPORT, 14th December, 1959; Vol. 615. c. 1168.]This we did. We divided the House -185 Tories, three Liberals, with the Labour Party in total abstention—or perhaps one should rephrase it, leaving their options open. There was a suitable opportunity for a further debate on 25th July, 1960, when again we divided the House on the proposition that we should be part of the European Economic Community. Although our vote went up to four, the Tory vote went up to 215, because the Tory Government had the advantage in their Lobbies of the support of the present Leader of the Opposition. I understand that nowadays to be seen voting on European matters in a Tory Lobby is regarded as a criminal offence. In those years many have changed in their opinions but some have changed more often than others.
There is then the second category who on their record are totally committed to the European concept, subject to reservations on the terms which, I concede, if not acceptable could be a cause for veto I think that the commitment of all three Governments and the extent of that commitment 1498 is best summarised in the W.E.U. statement by the then Mr. George Brown at The Hague on 4th July, 1967. May I remind the House, because it came up in interruptions on the common agricultural policy and other matters, that in paragraph 19 Mr. George Brown, on behalf of the then Government, said :We accept all three Treaties, subject only to the adjustments which are required to provide for the accession of a new member, for example, our participation and voting in the Community's institutions and our contribution to its financial expenditure.Again, in paragraph 44 they went further :In all other fields we accept, as I have already made clear, the obligations of the Treaty establishing the European Economic Community and the regulations, directives and other decisions taken under it, subject only to a transitional period and, of course, to developments in the Community in the mean time.I suggest that the Labour Party——
§ Mr. Thorpe
I am asked why debate the position of the Labour Party—because this is a great national issue and this is one political party of this country that has not expressed an opinion. I will tell the House what the advantages are, but I think that we are entitled to know from the Opposition where they stand on this great issue—[Interruption.] The shouting is not quite as loud as it used to be back in 1950. It used to come from both sides of the House ; now it comes only from one side.
Paragraph 44 clearly accepted the common agricultural policy of Europe So this idea that one can go round nitpicking about the common external tariff, the value-added tax, President Nixon visiting Peking, and all this affecting the whole concept of our approach to Europe, is fundamentally dishonest intellectually on the basis of the Labour Government's admission on 4th July. 1967.
§ Mr. Deputy Speaker (Miss Harvie Anderson)
Order. I am sorry to interrupt the right hon. Gentleman. It will not help the very many Members who hope to take part in the debate if there are constant interruptions.
§ Mr. Thorpe
I must pursue the point that Lord George-Brown was sent on the negotiations in order to succeed, and he was not sent to Europe as a ruse of the then Prime Minister to keep him out of Britain. Therefore, for me it is a very great cause for sadness to read the speech which the right hon. Gentleman the Leader of the Opposition quoted, from The Times on Monday, 19th July, 1971, reporting the conference on Saturday :The negotiations would show whether the Community was a rule-ridden bureaucracy ; whether in its motivation it was looking outwards to a Europe-wide unity, or whether it was basically an agricultural welfare complex based on subsidies to high-cost producers …If the right hon. Gentleman had all those reservations about those strange foreigners why did he ever go and negotiate with them in the first place? That is what we are entitled to ask.
The stance of certain people during the great debate is extraordinary. It is rather like a man who stands at the Pearly Gates and says to St. Peter that whilst he professed his consistent support for the Christian religion and deplored the manifestations of paganism among his opponents, he would like time to study the terms before deciding whether to enter, and so in the meantime he would preserve strict neutrality until the end of the month.
There are, however, certain criticisms which are made and on which we are entitled to more information. First, the White Paper is very thin on the question of regionalism, indeed, it does less than justice to the regional development which has taken place within the Six. I am thinking particularly of areas like Southern Italy and others where there has been very dramatic increase of employment and an increase in wage earning opportunities.
Similarly, reference was made to the balance of payments. I regard the present White Paper and the figures set out as going very much further than we have ever been able to go before, and I think particularly of Table 2, page 24, largely of course because the negotiations were further advanced than at the time of the previous Labour Government's White Paper. But one must realise that then we were told that the food bill might be reduced by £85 mill ion or might rise by as much as £255 million, and that the cost to the balance of payments was 1500 between £100 million and £1,000 million. We are entitled to ask for the £500 million point to be cleared up one way or the other.
I am certain that no British Government would have persisted with negotiations to join unless they were confident that, in terms of economic growth, the cost to our balance of payments would be more than sufficiently covered by the growth in our economy in the initial stages. That must be self-evident—unless successive Governments have indulged in a form of economic masochism, which I doubt. The Government are in some difficulty about quantifying the cost to the balance of payments. I would prefer it if there were no figure, rather than wild figures. The then Prime Minister, on 10th February, 1970, said :… the House will understand that many of the estimates must be highly speculative. There must, for example, be a wide margin of error arising from any calculations which may be made about the response of British agriculture and industry to changes in prices and tariff levels whose effects cannot be fully felt for a number of years. Hon. Members will realise what margin of error this involves both in the calculations of the agricultural cost, and its wider implications in industrial, commercial and financial matters."—[OFFICIAL REPORT, 10th February, 1970; Vol. 795, c. 1081.]Turning to New Zealand, it is germane to point out two very significant things. First, the New Zealand Government have actually accepted the proposals put forward. Second, one of the persons referred to, namely, Lord George-Brown, has expressed his opinion that those terms would have been recommended to and accepted by a Labour Government. Naturally, I respect the judgment of the right hon. Gentleman the Leader of the Opposition on this issue, that he has implied that those would not be terms that he, as Prime Minister, would have recommended. I accept that if that is his position. But it is not without significance—because these are matters of opinion—that of the four persons basically involved in the negotiations during the time of the Labour Government, three of them have expressed their opinion that those terms would have been accepted, including the right hon. Member for Fulham (Mr. Michael Stewart), the right hon. Member for Dundee, East (Mr. George Thomson) and Lord George-Brown.
§ Mr. Rippon
The right hon. Gentleman did not take the opportunity of 1501 listening to "The World at One", when he would have heard that Lord Chalfont expressed the same view. So it is all four now.
§ Mr. Thorpe
On New Zealand, if one looks at paragraph 34, while one naturally accepts the figure of 20 years, which the right hon. Gentleman mentioned, it is interesting that Lord George-Brown saidI am confident that in discussions together we can find a constructive and realistic solution. Community farmers have a strong interest with New Zealand in wishing to see the level of butter consumption maintained in Europe.Then he talked about other problems. But never at any stage was there a public commitment to the 20-year period as being a condition for entry.
In conclusion, I ask what sort of Europe do we want? I want this country to go into a Europe which is outward-looking in her trading policies and which is using her wealth to help the developing world. I therefore applaud the decision taken by the Council of Ministers on 31st March, 1971, in which they have been the first major trading unit in the world to lift their barriers against trade with many of the developing countries. This was wholly in accord with the U.N.C.T.A.D. resolution of 1968, and it will affect imports worth £416 million from 91 different countries. It will also, incidentally, lose them some £40 million in Customs revenue. It is not without significance that it has been welcomed by U Thant as a major breakthrough—not, I should have thought, the action of a narrow, inward-looking Community.
Similarly, if one considers the European Development Fund and the financing of projects from 1958 to 1963 to the 18 independent African countries which are associated, one sees a figure of about 600 million dollars invested in those countries, and from 1964 to 1969 further aid of well over 800 million dollars for industrialisation, diversification of agriculture and aid to exports. From 1960 to 1964, the overseas aid of the Six has risen by 50 per cent. whereas that of the United Kingdom has risen by only 6 per cent.
1502 If one considers paragraph 117 of the White Paper, whereby 20 independent countries and 19 dependent territories will be offered some form of association which will assist them in freer trade and will entitled them to benefit from assistance under the European Development Fund, one will see that again this is the sort of Community which is outward-looking and which we ought to join if we want to play our part in the third world.
I want to see the Community as a low-tariff area. At the moment tariffs are only marginally lower, but they are lower. Philosophically, the view of the Six is far less protectionist than opinion in this country, as was indicated and made manifest by the howls which went up from both sides of this House when the Secretary of State for Trade and Industry suggested that the motor car industry might benefit if it were subjected to a little more competition.
I do not share the vision of Europe of the Prime Minister and the President of France. I think that it is too narrow at the moment. I want to see Europe evolve politically, rather along the lines of paragraph 20 of the Labour Party's pronouncement at the W.E.U., which sums up my own feeling. That said :We believe Europe can emerge as a Community expressing its own point of view and exercising influence in world affairs not only in the commercial and economic but also in the political and defence fields. We shall play our full part in this process.That is the kind of political evolution that I want to see.
§ Mr. Thorpe
It was 4th July, 1967, and it was the speech of Mr. George Brown, on behalf of Her Majesty's Government, to the W.E.U.
I want to see direct elections to a European Parliament. I believe that one effect of the British joining the Community is that we shall become, if not the most, certainly one of the most, politically conscious members, in terms of elections and the need for democratic control over the civil servants working in the Community.
I want to see direct monetary union by 1980. I want to see a new world currency created, which will mean rewriting the 1503 Bretton Woods Agreement, or, alternatively, creating a European reserve currency. Already, Europe is beginning to tackle matters like pollution on a European level. I want to see us play our part in that regard.
I believe that history will give short shrift to those who, on this issue, put party unity before taking the right decision. I believe that the terms are right. They are better than we have been able to expect ever since the first application in 1961.
I want to see this country working with progressive Socialists like Willy Brandt and with progressive Liberals like Walter Scheel, in their policy of Ostpolitik. I want to see us working with people prominent in politics, who, despite the chauvinism of the last few days, stood by us, worked with the Resistance, and were part of the Free European Movement which today we applaud.
I have always wanted to get into Europe on the right terms. I wanted to get into Europe when both major parties opposed it. I still wanted to get into Europe when a Tory Government applied to join. I wanted to when a Labour Government began negotiations. I want to today, whether or not the Labour Party opposes it.
Entry will provide a tremendous stimulus for the country. It is not only right for Britain and Europe. It is not only right for the developing world. It is right for the world as a whole. That is why I hope that we shall soon become full members. If we do, the generation which takes us in can claim to have played a significant part in history.
§ 5.54 p.m.
§ Mr. Neil Marten (Banbury)
As we have been asked to compress our speeches, I shall not deal point by point with the speech of the right hon. Member for Devon, North (Mr. Thorpe), which I much enjoyed. He ended up on precisely the political view of Europe that I understand, and he spoke as a true European. It is for that reason that I do not wish to join, and I am quite clear about it. Unfortunately, hon. Members in many parts of the House are not clear about it, simply because they are not true Europeans.
1504 I wish to follow up what the right hon. Gentleman said about the state of this debate and the possibility of a free vote. Our Prime Minister, in his broadcast to the nation on 8th July, said :It's a big decision, and it's one that goes far beyond party politics.That is the Prime Minister's view. It is my view. I believe that it should be the view of every hon. Member. However, on 13th July, about a week following, I was discussing this matter on a B.B.C. programme called "It's Your Line", and the same question was raised. My right hon. Friend the Home Secretary, who was also appearing, said "No. It will be a vote of confidence in the Conservative Party's policy." From the moment that my right hon. Friend said that, it ceased to be a national debate and became a party political debate.
We have got the debate into a frightful mess. It is sunk. Look at the Labour Party. We all know from the Press that right hon. and hon. Gentlemen opposite are in difficulties. We on this side are not yet in that sort of difficulty. But these things happen. I remind hon. Members on both sides that as we approach October and the time of decision we shall all be having our party conferences and we shall all be televised to the nation. If I know the Labour Party and the Conservative Party—and the Liberals—there will be dreadful rows over the Common Market at all the conferences.
§ Mr. Marten
Yes, probably at union conferences as well. Listening to comments in the House today, sotto voce and not so sotto voce, clearly some of them are extremely hurtful to people. On this side of the House there are a number of Conservatives—I was glad to hear the Leader of the Liberal Party say "with integrity"—who are against entry, and, despite their long held views, despite their statements at the General Election, often written into their election addresses, and despite the statement by the present Prime Minister at the election—…in the Conservative Party we fully recognise that there are some members who hold an opposite point of view to the European policy, very often on grounds of principle, they take the view that they would not wish to become a member of the European Economic Community. Now of course these 1505 people would be absolutely free to vote in the way they so decide. This is always the case in our party"—do not share the view of the Government but are now being invited or told to vote for the Common Market simply not to bring down the Government. That makes it a party political issue.
On the Labour side, the pro-Marketeers are told not to vote with the Conservatives. This has got the debate into the murky mire of party politics, when we have been asked by the Prime Minister to make it a great national debate. The Leader of the Liberal Party has said as much, and I ask the Leader of the Opposition and my right hon. Friend the Prime Minister to deplore the sort of behaviour and arm-twisting that is going on throughout the country. The people need to be given a lead.
As the right hon. Member for Devon, North said, a free vote would greatly enhance the standing of Parliament on this great issue. I cannot understand why it is necessary to have a three-line Whip on for the final vote. Why cannot this matter get the full-hearted support of the British Parliament without it? Is not the case good enough? Is it so weak that it cannot be got through without a three-line Whip? I do not think the country wants us to have a three-line Whip. I hope that in the end the main party leaders will give the House a free vote. They would gain in respect, as would Parliament as a whole.
I am all in favour of the appointment of a Select Committee, because I believe that quite a lot of us would like to press a great deal more than we can on the Floor of the House and in Question and Answer. I shall be happy to serve on such a Committee if I am asked.
The economics of the case are arguable. I am one of those who have always believed that the country prospers when we maximise free trade, which is not what we are doing if we enter the Common Market. I believe that the White Paper makes out a very good case for maximising free trade—for a free trade area. But to those who say that if we do not go in we have had it, I suggest that next year we shall have a growth rate of 4½ per cent. That is greater than the forecast of the growth rate for the same period in the Common Market. Our exports have never been so high, sterling 1506 has never been so sound on the exchanges, and the balance of payments has never been so good. So who can turn round and say that if we do not go in we shall virtually perish or not prosper? It is nonsense to say that.
I recall that in 1961 some of my hon. Friends, who are in the House now, quite seriously said that if we did not join the Common Market by 1970 we should merely be an offshore island of the commercial status of Portugal. Were they right then? [HON. MEMBERS : "Yes."] Of course they were not. With such a strong balance of payments and high exports they were not right. Yet those are the people who are advising us to go in.
§ Mr. Marten
I think it is probably better that I should not give way as we have been asked to compress our speeches. I will see my hon. Friend outside.
§ Mr. Marten
I hope that you, Mr. Deputy Speaker, will regard these interruptions as injury time.
I believe that the most important point is not anything to do with the White Paper, because it has not come into the negotiations, but something which follows from what the Leader of the Liberal Party said about his belief that Europe must be united and ultimately become one country. That has always been my main objection.
§ Mr. Marten
A confederation. A United State of Europe. Whatever we call it, it has to have one Government. This is what we put to Willy Brandt, the Chancellor of Germany. When he was over here I asked him the direct question "At the end of the day, do you see that the Common Market must have one Government?", and his straight answer was "Yes". That is right. It is the only answer. If Europe is to speak with one voice, as we have been told time and again, it can only speak through one Parliament, and if Europe is to be an economic Power to rival America 1507 and Russia surely it can only be such an economic Power if it has one Government. That is the logic of the whole thing.
The Leader of the Liberal Party said that we shall have a strengthened European Parliament. The Anglo-Italian Declaration of 1969, which the Government have honoured, made that absolutely clear :Europe must be firmly based on democratic institutions, and the European Communities should be sustained by an elected Parliament, as provided for in the Treaty of Rome.That is the way that it is obviously going.
The Prime Minister, speaking in the Guildhall on 29th July, said :I have always believed that once Britain is a member of the European Community the British will be the first to press for democratic and parliamentary control of the Community's operations.Yes, indeed. Three people—Chancellor Brandt, the Prime Minister and Dr. Luns—say that we must get a European Parliament. I am saying that we shall also get a European Government.
I should like to refer to a publication called "Uniting Europe", which says :The processes of economic and political unity are the two sides of the same coin…. the Community is a political entity through its institutions, which are not only already taking political decisions, but which are also organised in such way as to form the basis for a system of government. This constitutional mechanism is still imperfect and incomplete, but it is federal in form.That, to my mind, is the logical development.
We shall have a President of Europe to appoint the Ministers in the Government. We shall have a President, a democratically-elected Parliament, and obviously, a Government which will carry out the decisions of that Parliament, when matters have been debated and voted upon. Otherwise, why have a Parliament? A Government must have Ministers and civil servants. We have European civil servants in the Commission now. This is the logic of it all. Why go into the Community if we are not to have something like a federation? I admire those who want it and stand up and speak for it. I do not have the same respect for those who want to sweep it under the carpet.
1508 Finally, I turn to the question of sovereignty. People say that we shall not lose our sovereignty. Indeed, the White Paper says that there is no question of any erosion of essential national sovereignty. That depends on what is meant by "essential national sovereignty". But let us trot through the list of powers which we shall have to transfer from this Parliament to Europe. On signature, we transfer the right to make trade agreements with third countries. We transfer our policy over agriculture. By 1973 the value-added tax has to be harmonised at the European level, whatever it is. By 1980 we shall have monetary union and probably a common currency with a federal reserve bank in Europe.
We are told that we must go in for defence reasons ; in other words, to relieve the Americans of some of their burden, presumably, of conventional weapons in Europe. We shall have to take over part of that burden. If we do that the sensible thing is to integrate the European armies under one European commander. [Interruption.] We have N.A.T.O. aleady with the Americans in it. I do not see, if it is to be just N.A.T.O., how there will be any improvement in the security of Europe. Clearly, something more will happen.
Once we get a major matter like defence debated in a European Parliament with a European Government taking decisions, foreign affairs will be brought in and people will say that they want unity in foreign policy. It seems that all the major aspects of our life will at the end of the day be transferred to the European Parliament and the European Government. This is what the debate ought to be about. These matters ought to have been discussed in the negotiations so that the British people know where they are being led.
I am not an anti-European. I have a great love for Europe. I have tried in my way to do what I can to help Europe. Nor am I a Little Englander. I believe in the open seas, not in the limitations of Europe. I was brought up to think of the open seas, the Commonwealth, and so on, and alliance with America and Europe. But, to my mind, going into Europe cuts us off from what I call the basic philosophy of the open seas. I believe that Britain wants to 1509 remain free of total involvement in Europe. We should have the maximum co-operation, wherever possible, and offer all the help that we can if Europe wants it, and I am certainly not in favour of paying for it at the rate which is being asked. I believe that as a country we should keep our freedom of manoeuvre in the way that we have in the past. I believe that in that way we can best use our influence in the world for peace. I believe that is also the instinct of the British people.
§ 6.9 p.m.
§ Mr. Arthur Bottomley (Middlesbrough, East)
Unlike the hon. Member for Banbury (Mr. Marten) I believe that Britain's best interests lie in association with Europe.
During the last war I was a Deputy Regional Commissioner for South-East England, an area known as "Hell fire corner". More bombs, shells, flying bombs and rockets fell on that part of the country than any other. I resolved then that I would do everything I could to make sure that that never happened again. I believe that I am doing that by hoping to build a United Europe.
It was my privilege, also, to be associated with the late Ernie Bevin who brought into being the Brussels Treaty Organisation and the Marshall Plan. Without that co-operation in Europe none of us, in whatever part of Western Europe we live, could have ben as prosperous as we are today. That was a practical example of European united co-operation.
Let us remind ourselves that Europe is the cradle of our modern civilisation, our art, our literature, our scientific and technical knowledge, but we are losing out in science and technology because we do not have the large-scale organisation to back research and carry out the development that is required. The most dramatic thing that has ever happened is probably getting a man to the moon. Could that man have got to the moon without European skill and initiative? It was the Germans who invented the rocket, and the British, radar, but, because we did not have the technical, scientific and financial resources to back it, the United States and the Russians got there instead of Europeans. I believe that in many other fields of scientific and technical development 1510 we shall lose out unless we go into Europe.
It is known that I am first and foremost a very strong supporter of the Commonwealth. I confess that if the choice was between the Commonwealth and Europe I should choose the Commonwealth. It is because I think they are complementary that I want to go into Europe. I do not want to take up much of the time of the House, so I shall say what I want to say in shorthand.
The one thing that the Commonwealth wants today, above all else, is investment. At one time Britain could provide it. We cannot do so today, and I believe that if we are a member of this giant Common Market, with the scientific, technical and financial resources that will be available, such investment can take place. I know that somebody will say that the European countries will make sure that the investment goes not just to the Commonwealth but to the world as a whole. I accept that, but let us remind ourselves that the largest part of the developing world is the Commonwealth, and therefore the Commonwealth must benefit more than other parts of the world.
§ Sir Robin Turton (Thirsk and Malton)
Earlier today the Leader of the Opposition stated quite clearly that the Government of which the right hon. Gentleman was a member said that they would not enter the Common Market unless there were provision for New Zealand for a generation. Does the right hon. Gentleman agree with that? Why is he now taking a different view?
§ Mr. Bottomley
I agree with that. Apparently the right hon. and learned Gentleman who is responsible for the negotiations on behalf of the Government says the same thing, so I accept it, and I am surprised that the right hon. Gentleman does not do so as well.
We are all nervous of what could happen in the world. We are living in an age in which if war came again nobody could tell what the consequences would be. Many people are saying that war is not likely in Europe. I believe that to be partly true, and I think that it will be more certain if Britain goes into the Common Market.
The reason for my saying that is that West Germany at the moment is ruled 1511 by the most liberal-minded leaders, and I believe that they have the strength to remain there as long as they get support from like-minded people. But what is going to happen if Britain does not go in is that Germany, by peaceful means, will do what she failed to do by two world wars, dominate and control the economic and social facilities in Europe, and once she has those, without Britain in, other wild elements could rise in Germany and, with the strength that she has, demand to take back Eastern Germany. I believe that to be the real danger, and it astonishes me when I hear some people who are sympathetic to so-called Left causes cannot see the danger of that happening.
I see in a united Europe the possibility of ending for ever the conflicts which have damaged us and the Continent for so long. Together, the countries of Western Europe will be able to play a part in the world's affairs which will match their knowledge, their skill and their resources. The workers of all the countries will be better able to combine to improve their standards of living and their working conditions, and to ensure that they get their rightful share of the results of a Common Market which will develop and prosper. A rise in general living standards will be achieved by abolishing outdated economic strictures, and by pooling resources we shall be able to build up technological progress and achieve greater efficiency.
But perhaps the most important aspect of the E.E.C. is that of being able to help those who are less fortunate than ourselves. It is my belief that the struggle in the world today is not so much one of ideology as one between the haves and the have-nots. I believe that we must do everything posible to build up the standards of those people, and that can be done only by prosperous regions anxious to do it. Europe in fragmentation can play its part, and we heard today that some European countries are giving more aid than we are, but a combined Europe can make this great and substantial contribution and play no small part in making what I think is possible, a settlement of the greatest problem that confronts humanity today. The E.E.C. could play no small part in this great task of making one world.
1512 It is my hope that when the vote is finally taken this country will decide that its best interests lie in association with Europe.
§ 6.17 p.m.
§ Mr. Douglas Dodds-Parker (Cheltenham)
As I was fortunate enough to be able to take part in the debate in January, and to put my views in some detail on that occasion, I shall not take up more than a few moments of the time of the House on this occasion.
I said then that I had been a supporter of uniting Europe since the meeting with M. Spaak in June, 1941, and that I supported the negotiations with one reservation, that one hoped and believed that the terms which would be obtained would be reasonable. In my opinion the White Paper creates for the United Kingdom such a closer association with the Continent on reasonable terms. It could, and I believe will, be of benefit to all concerned, not only in this country, and in the present Community, but far beyond it in ways that have been mentioned by the right hon. Member for Middlesbrough, East (Mr. Bottomley) and the right hon. Member for Devon, North (Mr. Thorpe). I have never believed that this should be, or was, a matter of party politics. In my experience, members of all parties have laboured since 1945 to bring about a closer association, on differing terms at different times, with the countries of the Continent.
I recall Ernest Bevin saying something about going to Victoria Station to buy a ticket to anywhere. We may not have achieved that, but we have made a substantial move towards it, and so I give the fullest support to the White Paper and congratulate my right hon. and learned Friend on bringing the negotiations to the point that he has done. I salute, too, the work done by previous negotiators, the right hon. Member for Dundee, East (Mr. George Thomson) and the Foreign Secretaries of both parties who have laboured in this cause. Whatever the right hon. Gentleman the Leader of the Opposition may have said this afternoon, I still salute those who have worked so hard for 10 years.
There are just two quick points that I should like to make. The first is on the Commonwealth. I happened to pick 1513 up a book in the Library on British colonial policy from 1945 to 1961. It reminded me of the continuous efforts made by members of both parties in the 10 years after 1945, and particularly the right hon. Member for Leyton (Mr. Gordon-Walker), the right hon. Member for Middlesbrough, East, and my right hon. Friend the Member for Thirsk and Malton (Sir R. Turton), to create a mutually supporting Commonwealth, economically, politically and from the point of view of defence. Our efforts fell short of our ideals, and yet today there remains a great deal of bilateral co-operation, although there is none that embraces all the 32 members of the Commonwealth. They all felt that it was in their long-term interests to develop in other directions. So we in the United Kingdom, step by step, came to accept this, although often it was to our detriment. I remember vividly in 1955 when the Australian Government decided to cut Imperial Preference from 15 per cent. to 7½ per cent. The United Kingdom accepted that, as it was in Australia's long-term interests.
Many economic links can be continued from within the enlarged Community, when the United Kingdom is stronger and better able to help by trade and aid our Commonwealth friends in the way described by the Leader of the Liberal Party.
I believe that looking back from 1980. or later, future generations will regard this White Paper as an upward-turning point in this country's history. I take a different view from that of some hon. Members who mistrust those on the Continent who have been working so hard in the last 10 years to bring this country into closer association with them. I refer particularly to Chancellor Brandt who, although differing from me on domestic politics, I believe is aiming at the same long-term interests as I have been aiming at. Even today some people, strangely, say that the Community is more inward-look than is the United Kingdom. Those who have been fortunate enough to attend the Council of Europe and the joint meetings with the European Parliament are often impressed by what we hear there, and by the interest shown in and the help given to the world beyond the Community. The hon. Member for West Ham, North (Mr. Arthur Lewis) laughs. 1514 He may like to study what the Leader of the Liberal Party had to say about U.N.C.T.A.D. and what the Community has done.
§ Mr. Dodds-Parker
That may one day come about. In the meantime, it is a start. A lot of work has been done, whatever the hon. Member may think about it. It is very important that we should look at what is being done at Strasbourg and elsewhere. Those who have been there come back and find that this country is increasingly concerned with domestic issues. No doubt they are vitally important to the future of this country, but compared with the situation that existed 10 or 20 years ago we have far fewer responsibilities—and we also have far fewer debates in the House on matters outside the United Kingdom. Among members of the Council of Europe there is great interest in New Zealand, Australia and Canada, to which countries many continentals have gone in the 25 years since the end of the war. They have set up close links with the Continent. I am not a Little Englander—a term referred to by my right hon. Friend the Member for Banbury (Mr. Marten). I believe that this country has as great a contribution to make today as at any time since 1775 and the loss of the American colonies.
Mr. Speaker, you were present in Westminister Hall last week at the meeting of the American Bar Association, which reminded many of us of one major contribution that has been made throughout history by the United Kingdom—the establishment of political institutions to maintain freedom under the law. Such institutions, flexible and developing, are created not only by Parliamentarians but by the Chair and Table Office—who have done so much work at Strasbourg—and by civil servants. I suggest that my hon. Friend should study some of these things. It does not just mean—as one or two Americans sitting next to me commented—that we are lucky not to have a written constitution. Many of us have learned a lot from the last 200 years. I have—although I have not been present all that time! I am certain that a great deal is to be learned from the experience of the American Constitution. This country can 1515 contribute to working out the next phase of future institutions, in which I believe parliamentary control must be established over the Executive.
The E.F.T.A. set-up is one to which this country has contributed a great deal. It is a different institution from that of the Commission, but I believe that that sort of comparison can help in the period ahead.
So I believe—I hope without arrogance—listening to my friends in all parties on the Continent—leaving aside the Communists—that our acceptance of the White Paper can give us a new lease of creative endeavour to bring about a stronger Community. In the first place it will consist of the 10 countries and others who may wish to join or associate with the Community as time goes on ; from there it can look in friendship towards the great European countries to the East, as mentioned by the right hon. Member for Middlesbrough, East—from the Atlantic to the Urals—helping other countries—many in Africa are already associated with the Community—with far greater effectiveness than in any of the ways that we have tried in the last 25 years.
§ 6.25 p.m.
§ Mrs. Renée Short (Wolverhampton, North-East)
The Prime Minister's opening performance today was just part of the continuing attempt to brainwash people into accepting the idea that we must go into the Common Market—that there is no alternative, and that we shall be confounded unless we do. I do not take that point of view. I have never been a supporter of the idea of entering the Common Market on the set-up that we see before us.
When I first came into Parliament, for four years I was a member of the Council of Europe and had the opportunity of seeing other Parliamentarians from European countries at work. I realised in those days that the entrenched reaction among them was very strong. Basically the situation has not changed very much since then.
I know that Willy Brandt is in West Germany, with a tenuous majority, rather like the Labour Party had in 1964. He is there only by courtesy of the F.D.P.—and if a few more of that party rat, 1516 as some already have done, he is lost. It is interesting to see how many pro-Marketeers are praying in aid Willy Brandt's Ostpolitik as a reason for going into the Common Market. We never heard it from them before, but now it is said to be one of the compelling reasons why we should go in. I do not remember those who are now supporting the Ostpolitik supporting those of us in the 1964 Parliament who were urging recognition of the Oder-Neisse line and the G.D.R., and the giving up of all claims to what the C.D.U. in West Germany called "the lost territories"—which is what the Ostpolitik is all about. I am delighted that so many have been converted.
I am concerned about the way in which the Press is dealing with this debate, in Parliament and outside. There has been a disgraceful attempt at character assassination of the Leader of the Labour Party. The reports of his speech on Saturday were quite disgraceful, as have been the interviews that have taken place on the radio and television since then. Those people who talk about a free Press in Britain are way off the mark. Journalists on all but two newspapers have been told to support entry into the Common Market and to do their damnedest to see that people are bludgeoned into believing that there has been a shift of opinion, and that it is inevitable that we should go in. The Prime Minister's attempt to paint a marvellously rosy picture will boomerang on him. I do not believe that our people will believe his "pie-in-the-sky" promises. Why should they? They have been taken in before, and most of them understand that they are likely to be taken in again.
Many problems face us, but going into the Common Market will not help us to solve them. They will be solved only by ourselves, with our own resources, if we are prepared to change our attitude and our system. We have tried the old system for too long. Successive Governments have failed. Only by changing the system shall we be able to resolve the problems facing us today.
What the Chancellor did the other day—putting a little more "go" in place of the 13 months' "stop" since the last election—will not alter anything. We have had 13 years of that. "Stop-go" 1517 does not solve anything. Of course, once the Government imagine that they have public opinion on their side by a bit more relaxation in the economy, it will not be very long before we shall be going through the same process as we did in the last Government, the same process as we did in the years from 1951 to 1964 ; when the economy gets over-heated and Ministers have to start cutting back again. This does not make progress or deal with any of our problems.
The Prime Minister tells us how little it will cost us to get into the Common Market. I forget his basic figure—half a new penny a year or something fantastic like that—but the White Paper says that we shall see an increase in food prices over six years, during the transitional period and then onwards, of about 2½ per cent. per annum. Over that six-year period there will be at least a 16 per cent. increase in food prices due specifically to the increase because of our entry of the Common Market ; and that 16 per cent. will be over and above whatever inflation goes on from now to the end of the transitional period. It is not instead of it ; it is as well as it. It is also over and above the increases which we are now paying because of the change in the method of financing agriculture—from support costs to import levies. These increases must be taken into account when calculating the overall cost of food, the increase in the cost of living and, therefore, the cost of entry of the Common Market.
The Labour Government's White Paper forecast an increase in food prices of between 18 and 26 per cent. Sir John Winnifrith said in the precincts of the House yesterday that the increase in food prices will be about 50 per cent. He is a very experienced civil servant and there is no reason to believe that his estimate is worse than the Government's.
Hidden away in paragraph 43 of the White Paper, we are told, in effect, that, whatever the increase in the cost of living is likely to be, that will not be a reason for demanding higher wages :The influence on wage movements of the increase in the cost of living is not expected to have any significant effect on the costs of industry. …If that means anything at all, it means that the Government are expecting the working people of this country to continue 1518 to carry the additional burden of the rising cost of living attached to entry of the Common Market. It is not surprising, therefore, that almost all the trade unions have now come out against entry.
It looks rather at odds with the propaganda of the Marketeers, who say that, as soon as we go in, working people will find £7 a week more in their wage packets, and that all sorts of things will be much better—holidays and social security benefits, for instance, will all come out of the air, just like that. But, if what paragraph 43 says is so, it means a severe reduction in the standard of living of the people of this country.
This 2½ per cent. increase in the cost of food means in money terms that at least another £150 million a year will have to be found by the British housewife on our present imported food bill. Over six years, that is £900 million that the housewives will have to find. The White Paper had the grace to admit that butter, cheese and beef will become much more expensive, that many more food prices will rise. Of course, immediately after we sign the Treaty of Rome, these increases will have to be borne by our housewives.
In the lower wage rates, that means that, to feed a family where a housewife is now spending £8.60p, this will immediately be increased to a minimum of £10 a week. If the Government say that this will be done without having any effect on wages, they will be in for a very big surprise.
The other leg on which they base their case—that we shall not lose a significant amount of trade in other parts of the world—will also collapse. It means that if these increased costs are to be retrieved by increased wages and salaries, our industrial costs will become that much more expensive, that our exports will become less competitive in other markets outside the Six and that, therefore, our balance of trade will suffer a severe blow through increased imports and falling exports.
Of course, we are to have the value-added tax. The White Paper admits that we have to pay part of the proceeds of the value-added tax, that 1 per cent. has to be handed over to the Community. But it makes no attempt to assess the size of this contribution, the burden that 1519 it will be on the people of this country. But I dare say that it will be a minimum of at least £200 million a year added to additional food costs.
Then we come to what has been regarded as a part of the Chancellor of the Duchy's package deal—the contribution to the Common Market budget : the "entry fee". Hon. Members will remember that when the right hon. and learned Gentleman started his negotiations he suggested a figure of 3 per cent. So far as I know, when our application was made there was no suggestion at all of what our contribution would be. Therefore, for any hon. Member on this side to say that he would have accepted the deal is very curious.
When the right hon. and learned Gentleman suggested 3 per cent. the French said that it was a derisory offer and regarded it as an example of Anglo-Saxon humour. He was invited to think again, and he thought aloud on a television programme soon after his return from that visit to Brussels. He said casually that if the French did not like it we should have to make another offer. He has now agreed that the initial contribution shall be no less than 8.64 per cent.—almost three times what he originally offered—and we are supposed to regard this as a jolly good bargain. It is to rise to 19 per cent. by the fifth year, so the original French demand, which we were told was 20 or 21 per cent., appears to have won the day.
This is an open-ended commitment, because this contribution will rise each year as the gross national product of the Six expands. This could mean anything, from another £200 million a year to £450 million. The White Paper does not tell us : perhaps the right hon. and learned Gentleman will be able to clear this up.
So this means that, in additional financial burdens directly paid by the people of this country, we shall have to fork out between £550 million and £800 million per annum. If the right hon. and learned Gentleman does not agree with that, I shall be pleased to hear his thesis.
§ Mr. Wilfred Proudfoot (Brighouse and Spenborough)
Even if we paid 50 per cent. ultimately, does not the hon. Lady think that that must mean that our G.D.P. 1520 had risen massively and that the standard of living had been improved? Some taxpayers are even glad to pay more taxes, because it means that they are doing well.
§ Mrs. Short
I will come to the question of how we shall find the money if the hon. Gentleman will allow me to make my speech in my own way.
The other part of this package deal which is not described at all in the White Paper is that once we are in the Common Market, if we go in, we are committed irrevocably to the high prices which obtain because of the acceptance of the common agricultural policy. We can do nothing about that. Common agricultural prices have no relation whatever to world prices. They are simply designed to bolster up incompetent, inefficient and foolish agricultural systems and a whole lot of inefficient farmers.
It is obvious that if we join the E.E.C. we shall pay the high prices that result from these common agricultural policies. We shall not, therefore, be in a position to gain any benefit from falling world prices. I absolutely disagree with what the Prime Minister said on this score. All the signs are—leading economists are agreed on this—that food prices are likely to fall in the near future.
If we join we shall not be able to take advantage of that fall because we shall be prevented from buying from the Commonwealth. We shall lose Commonwealth preference, something which has been our mainstay for a century. Speaking in Bristol in 1966, my right hon. Friend the Leader of the Opposition said :We have bought in the cheap Commonwealth market for 100 years".If we have anything to do with it, we shall continue to buy that way because it has brought enormous benefit to the British people, in times of both peace and war.
The present position means, in effect, that the Government have swallowed the bitter pill of the loss of British sovereignty. However much they try to deny it, they have taken on board the whole of the C.A.P. We shall be told where to buy our food, we shall have to accept the method of financing the Community budget and, having been dictated to, we shall have to pay over 90 per cent. 1521 of levies on our imported food, over 90 per cent. of Customs on manufactured goods, plus a percentage of the proceeds from V.A.T.
Above all, we shall have to abide by the whole of the Treaty of Rome—its rules, regulations and directives, and 15,000 of them have been passed since the Treaty was signed in 1957. Let us have no more of the Prime Minister talking about the Dutch being no less Dutch and the French being no less French since it was signed. That is an utterly irrelevant argument.
One of the most appalling aspects of the signing of the Treaty of Rome and our entry into the E.E.C. will be the effect it will have not only on New Zealand and Australia, with which I will not deal because other hon. Members have done that, but on the under-developed countries, and particularly India. It is a sad reflection that no one has been willing to put forward the case for this enormous Continent that relies on us in great measure and looks to us for help, encouragement and succour.
At present we are doing only about £100 million worth of import trade with India, and that is disgraceful. If we enter the E.E.C. many of the products that India sends to us will be in direct conflict with goods produced in some of the Common Market countries or with natural products that the E.E.C. now gets from some of the countries associated with it.
I need only mention tobacco, coir matting, rugs and rice for hon. Members to understand that India's economy is likely to suffer considerably if we join the E.E.C. Representations to this effect have been made by the Government of India and by the Indian High Commission ever since Britain first made application to join. In other words, India is likely to suffer the same fate as the African States that now enjoy, if that is the correct verb to use, associate status with the Common Market.
Like them, India will be forced to become an exporter of primary products and there will be no interest in her indus-rial goods. If India is fated to provide cheap raw materials and cheap tropical fruit and nuts and so on, and if her industrial goods are to be kept out of the more sophisticated markets of the Six, 1522 then only one phrase can be used to describe that state of affairs—brutal colonialism.
It will be a blow to India. The African States are now suffering as a result of their associated status. Like them, India will be exploited by huge international monopolies such as those which are now exploiting them. She will receive lower prices for her natural products but have to pay ever-increasing prices for the industrial goods which she will import from the countries of the Six.
The President of Senegal recently said that his country, which is one of the associated States, was being slowly strangled. He pointed out that Senegal had increased her exports to the Six by 30 per cent. but, in return, was receiving only 3 per cent. more cash. When we appreciate the difficulties that some of these associated African States have to meet when exporting their basic raw materials to the Six, we begin to see just how difficult a situation they are facing. For example, in West Germany there is a 180 per cent. tax on green coffee coming from those countries. In Italy there is a 148 per cent. tax on cocoa coming from the associated African States.
To get those countries to accept association in the first place, the bribe of the so-called development fund was offered. This fund was supposed to be used to assist the economic growth of those countries. In the first five years, from 1958 to 1962, £200 million was allocated. Hon. Members will no doubt say that it was a generous allocation. From 1963 to 1967 £260 million was allocated. Those figures, spread over the 60 million people in the 18 associated States, work out at less than two-thirds of one old penny per person per day.
Hon. Members can imagine how much industrial or agricultural development can take place on that sort of money. For 1969–74 the amount allocated to the fund is £330 million, which I agree is a bit more, but £250 million of it is non-fund-able aid and the rest is in the form of loans on which interest will have to be paid.
The control of the use of this money is completely in the hands of the Six. Very little of it is allowed to be spent on developing new industries. The funds are, in fact, used to bolster up private enterprise and the influx of private 1523 western capital in those countries. No wonder the Observer said in June last :So far the experiences of the French-speaking African countries that have become associated States have been so disagreeable that, having begun as enthusiasts, they are now vociferously critical.The same will be true of the sugar-producing countries of the Commonwealth, which will be pushed into precisely the same position. The guarantees which the right hon. and learned Gentleman has brought back are not worth the paper on which they are written because he is not in a position to commit the Six in four or five years' time. He does not know how the position will change, so that the so-called guarantees mean nothing.
I give the example of Surinam, a country which was part of the Dutch empire in the Far East, which thought it would do well out of the Sugar Agreement with the Six. Surinam was sending between 7,000 and 8,000 tons of sugar per annum to Holland. This continued up to 1968, when the Sugar Agreement with the Six was made. By 1970 the whip had been cracked over Holland and the five other members threatened legal action if she continued importing sugar from Surinam on the earlier basis. As a result, Surinam's sugar exports have been halved, with the figure currently running at 4,000 tons per annum. The position is to be renegotiated in 1974 when the Agreement is due for re-examination. This does not augur well for the sugar islands of the Caribbean.
Looking at the Commonwealth countries as a whole, the developed and underdeveloped parts—and this is part of the whole package deal—I cannot understand how many of my pro-Common Market friends on this side of the House can accept this state of affairs. It will mean that any opportunity we may have to regenerate the Commonwealth will be lost.
The hard-headed bureaucrats in Brussels do not give a damn for the economies of the Commonwealth countries. M. Pompidou has made it clear that the whole deal is to enable French farmers to find other markets in our country—and 55 million more people provide a useful market for the French farmers, particularly considering their present conditions.
§ Mr. Onslow rose——
§ Mrs. Short
I will not give way. I have given way once.
The Common Marketeers always sneer at Commonwealth trade. I remind the House that about 22 per cent. of our export trade is with the Commonwealth—£1,695 million out of a total of £8,000 million. That is not something to be cast lightly aside. It would take a great deal of making up in other markets. We sell £1,754 million worth of goods to the Common Market, which is only a little more than we sell to the Commonwealth, and £1,286 million to E.F.T.A.
Certainly, the rate of growth with Commonwealth countries has been slower during the last 10 years than our rate of growth with the Common Market, but it is only because of our flirtation with the Common Market that the rate of growth of our Commonwealth trade has declined. One cannot blame the countries of the Commonwealth for seeking other markets when they have seen that we have all our attention on the countries of the Common Market.
§ Mr. Onslow
On a point of order. I am sorry to do it this way Mr. Speaker, but my purpose in intervening was to point out to the hon. Lady, as I now seek to point out to the House, that she has been speaking for 25 minutes. If that is compression, it is very difficult to recognise it.
§ Mr. Speaker
That has probably lengthened the proceedings. Perhaps, however, the hon. Lady will note what has been said.
§ Mrs. Short
If we may look now at the alleged dynamic effects on British industry and tie them in with the regional policies, which do not appear in the White Paper, I as a Member of Parliament for the West Midlands have been 1525 concerned for some time at the decline in West Midlands industry and the increase in unemployment there. As the Prime Minister knows, hardly a week goes by without our having indications in Wolverhampton and the West Midlands of firms which are closing down or sacking redundant workers. This situation has been going on for the last 13 or 14 months.
My opposition to the economic policies pursued by the Six was clinched when at the end of last summer one of the larger factories in my constituency closed down. It happened to be a branch of a large international firm with many branches in France, Italy and other parts of the Continent.
§ Mrs. Short
I refer to the closure of the Courtaulds factory in my constituency, which put 1,300 workers out of work. At the time Courtaulds was doing this, it was exporting capital from this country to increase its capability in Northern France and Italy. It was, therefore, cutting down on jobs in my constituency and providing additional jobs in France and Italy. If that is the sort of thing that is to go on if we enter the Common Market, with the free movement of capital that will be allowed, it is clear that many firms will prefer to close down. Scotland and the North-East are depressed areas. The Midlands is rapidly becoming one. All the pressure and the push will be to invest either in the South-East of this country, as my right hon. Friend has said, or in France, Italy or Germany. What sort of prospect does this hold for people in this country?
§ Mrs. Short
These are grounds for serious concern. They are problems that are not dealt with in the White Paper. They are problems that hon. Members, on this side at least, will need to examine carefully. They are problems that the people will certainly weigh in the balance when they decide whether to urge Members of Parliament to support entry into the Common Market.
§ 6.54 p.m.
§ Dame Patricia Hornsby-Smith (Chislehurst)
I hope that the hon. Lady the Member for Wolverhampton, North-East (Mrs. Renée Short) will forgive me if I do not comment on many of the points she made, but I hope to compress my speech as you, Mr. Speaker, have requested.
First, I support the view of my right hon. Friend the Prime Minister on the importance of our entry into the European Economic Community from the viewpoint of our joint strength and cooperation making a major contribution to peace as against the threat of war which has so frequently torn us asunder. I want particularly, however, to deal with the outlook and the dramatic changes which have taken place in Commonwealth trade.
To me, the saddest thing about so many of the criticisms I have heard about our entry is the outdated and outmoded pastoral vision which so many critics have today of our former dominions. I have had the opportunity of visiting Australia and New Zealand and I have endeavoured to export to Canada. Too many people still think of the Commonwealth, particularly the former dominions, in terms of the days of the Ottawa Agreements.
When those agreements were made in the 1930s, Australia and Canada were overwhelmingly agricultural countries. Today their joint agricultural output is not as large as the agricultural gross national product of the United Kingdom. They are now overwhelmingly successfully thrusting and industrially developing nations. As they develop, we are in many ways in competition with them.
In the pre-war days, their food and raw materials poured into this country substantially free of duty or with low commodity quotas. Those goods still pour in—80 per cent. of them from Canada and a vast percentage from Australia—free of duty or on very low quotas. Before the war our manufactured goods were bought in exchange and they entered those countries under marginal tariffs or on British preferential tariffs, which gave us substantial advantages in their markets—then, but not now. Australia and Canada have become highly and substantially industrialised. I rejoice in that industrialisation and in 1527 their growing strength, to which this country has contributed in very large measure by way of investments which have brought about the rapid industrial development, particularly of Australia.
United Kingdom companies opened subsidiaries in the Commonwealth. Those subsidiaries then export from their Commonwealth bases and challenge the markets in which the parent company in this country has hitherto operated. It is true that there may be a measure of profits and dividends, but the employment is local.
There is in my constituency a small industrial enclave which a former President of the Board of Trade told me had, for its size, one of the best export levels in this country. Because of the increasing tariffs imposed by our Commonwealth partners, Klinger's, Kolster-Brandes, Morphy-Richards and, from Kent, Wiggins Teape, because they could not ride the Commonwealth tariffs, have opened up subsidiaries in Australia. It would give little comfort to the 3,000 people who were declared redundant at Morphy-Richards some months ago to be told that they should take comfort because their company had opened a branch in New South Wales.
I am old-fashioned enough to think that my prime duty in this House is to consider to the best of my ability the future of my country and my constituents, because only if Britain is strong, only if we find new markets, as a result of which we can give aid to the 100 countries to which we give it, and as a result of which we can buy twice as much from Canada as she buys from us and we can buy twice as much from New Zealand as she buys from us—only if we find alternative markets as, rightly and justifiably, more avenues are closed to us by the increasing industrialisation of some of the Commonwealth countries, shall we be able to continue the aid and help which we all seek to give. This is not a priority exclusive to hon. Members opposite. I have been an Imperialist all my life, but I hope most sincerely that we will take note of the dramatic changes which have occurred and that we will face the new outlook and, as the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) put it, the hard trade 1528 bargaining of the new and great Commonwealth countries.
I want to draw attention to what is happening with Canadian tariffs, about which so many critics write, and about the advantages which we are alleged to have. By and large, there is a considerable percentage benefit between the Standard Canadian Tariffs and the British Preferential Tariff. But what very few people realise is that 97 nations have been given most-favoured nation rates by Canada and that they have whittled away, in some instances to nothing, our entire preference in Canada. Those 97 countries include the U.S.S.R., Japan, America, as one would expect as a next-door neighbour, all Latin America, all the E.E.C. and the U.A.R.
I mention three products affected by these tariffs. Our textile industry is our sixth largest exporting industry. Clothing, wearing apparel and the like, fashions, woollens and so on bear a general tariff of 55 per cent. and the British preferential tariff is 23 per cent. But 97 countries, including our competitors in Japan and Korea, another great textile country which is exporting a great deal, have had that 55 per cent. reduced to 25½ per cent., which makes a dramatic difference to our exports of textiles. With man-made fibres those 97 countries have a better deal than we have, because we have a 20 per cent. tariff, the Standard Tariff is 35 per cent., and the tariff for the M.F.N., Japan and the others, is 12½ per cent.
Let us come down to earth. I am not for a moment criticising the right of sovereign nations to do what they honestly believe to be in the best interests of their own people, their employment and their expanding industry. But our own people should wake up to the economic facts of life as they are in the flourishing countries of our competitors.
For those who are Scots and proud of that great export, whisky, I remind the House that only a few years ago there was a Standard Tariff of six dollars a gallon on whisky going into Canada, but for us it was only 50 cents, a wonderful tariff preference. Today, those among those 97 countries making what they presume to call whisky pay exactly the same tariff as do the Scottish distillers.
I could give 20 or 30 similar examples but I will not. I hope that it will be 1529 understood that many of us believe that, by going into the Common Market, we shall find new markets, expand our industries and create the greater employment opportunities which we require. From that strength we shall be in a better position to help other countries, and to continue to buy the surplus of goods which we buy overall from the Commonwealth, because otherwise we shall shrink in competition with the growing giants of the Commonwealth and be unable to play the part which all of us, from whatever party and whatever division there may be on this issue, sincerely hope we will play.
§ 7.5 p.m.
§ Mr. John P. Mackintosh (Berwick and East Lothian)
This debate and the debate in the country seem to be conducted at two levels, and that creates a certain confusion. There is a surface level which is concerned with the terms of the White Paper, the terms which many of us have been discussing, and the deeper level of underlying feelings and attitudes to the whole subject of connection with Europe. We must separate them a little and take each in turn.
Part of the confusion arises from the tendency of many anti-Marketeers to stick on terms, to stick first on sugar and then, when that problem is solved, to stick on New Zealand and, when that seems less urgent, to turn to regional policy and, when that has been explained to protest about the level of Britain's financial contribution. The anti-Marketeers go from one issue to the other as each seems most likely to support their underlying desire to have nothing to do with Europe. That is why the argument about terms is slightly unreal. But I doubt whether any person who is genuinely a European and who wants to join Europe, in the sense of liking the whole idea of the Common Market and a more united Europe, would in any way be deflected by the terms as set out in the White Paper.
To take these points in turn, it seems that we have got terms for the sugar islands, and their Ministers have said so, which are about as much as could be expected. It is asked whether the guarantees are bankable. A colleague of mine asked Barclays D.C.O., which provides the greater part of credit finance in the sugar islands about this. He was told 1530 the bank was now advancing credit for the planting of cane over a seven-year transitional period because it was confident that the terms as read into the record and accepted by the E.E.C. countries were as good as a signed agreement. It seems to me that if the E.E.C. ignores this, they would break even a written guarantee and we cannot proceed on that assumption. So in that sense the terms are bankable in the view of the major credit supplier to the sugar islands. This issue could not, I believe, be regarded as a major difficulty by someone who genuinely wanted to join.
Much has been said about New Zealand. I quote the words of Sir Keith Holyoake :Any impartial person would agree that this is a major achievement and one which is very satisfactory to New Zealand.That is what was said about the terms by the New Zealand Prime Minister. I am not surprised that the Leader of the New Zealand Opposition objects. If he had said that he accepted the terms, I should have been as surprised as if the Leader of the Opposition here agreed with the Government on a major political issue. I am not at all surprised by Mr. Kirk's view, but it is more reassuring when it is the Leader of the Government who accepts the terms.
§ Mr. Mackintosh
I apologise ; it was the Deputy Prime Minister who made that remark. When asked by Mr. Kirk what prompted him to accept the terms, Sir Keith Holyoake said :Because this is easily the best possible deal we could get.As I understand it, Britain will now be able in future to use its routine veto to block any proposals to diminish the amount of milk products which we import from New Zealand. We shall be able to veto any attempt to change it. This is the answer to the questions about the length of the transitional period.
I do not see why there is an objection to the fact that there is to be a review in three years. I should have been surprised if there had not been. There was a butter mountain in Europe a year ago and now there is a world butter scarcity. Prices have shot up and the situation is rapidly altering. It is in the interests of 1531 the producer countries that the position is reviewed. So again, it seems to me that if someone wants to enter Europe, the New Zealand terms would not constitute a genuine stumbling block.
§ Mr. Eric S. Heffer (Liverpool, Walton)
It is said to be "The best possible deal we can get". That is precisely the argument used by every shop steward and trade union negotiator who has been defeated in negotiations.
§ Mr. Mackintosh
I am not impressed by that point. I am looking at the actual merits of the terms. I wonder how many shop stewards come back with an 80 per cent. guarantee which gives the same export earnings to New Zealand over the five years as are earned now. I am looking at the merits and my hon. Friend is being too suspicious.
I now turn to the budgetary contribution. The point here is that I cannot see how anyone could regard this as an obstacle in itself if we have confidence in any element of the future of this country. The total balance of payments costs, even by the most frightening estimates which some people have given, is the equivalent of ½ of 1 per cent. of the growth rate in this country.
I cannot believe that by going in we will not get half of 1 per cent. more out of the British economy. I do not accept Professor Kaldor's view that British productive capacity is bound to diminish 1 per cent. per annum over the foreseeable future. This will require, according to him, a persistent series of devaluations. If that were the case, if Professor Kaldor were right, we would be finished, inside or outside the Market. The only thing I hope is that when we join the Common Market Professor Kaldor will be good enough to advise some of the countries of the Common Market about their economic prospects, and, if so, it will be the best possible thing for the British competitive position.
I turn to the fisheries position. I have a constituency with an inshore fishing fleet and again I believe this to be an entirely negotiable situation. The position over fisheries has to be clear. With the inshore fishing fleet, 70 per cent. of its catch is outside the 12 miles. Our problem is to safeguard the six to 12-mile area, where most E.E.C. countries 1532 already have traditional fishing rights. What we want to see is that they do not have increased rights in this area as compared with the present position.
§ Mr. Carol Mather (Esher)
The hon. Gentleman said that 70 per cent. of the inshore fishing fleet fishing was outside the area. I was out in the North Sea for two days last week with the fishery protection patrol and I was told by the British fishermen that 90 per cent. of their catch is inside the limit.
§ Mr. Mackintosh
This is the herring catch, which is confined in many cases to the inshore waters. I am talking about the total catch, demersal, pelagic and the lot, of which 70 per cent. is outside the limit. [Interruption.] Please excuse the technical phrases but I wish to show that I too have been out occasionally in a fishing boat. I cannot see, if one shifts round from sugar to New Zealand, to the budget, and to fisheries, that one comes to any point in the terms which are sufficient to make anyone who wants this type of larger economic and co-operative unity in Europe shy away.
So why do so many hon. Members, and I respect their views, object so deeply to the terms or to the whole prospect? There are two underlying reasons. One of them, to which hon. Members on this side of the House are ready to admit is the fear that somehow joining the Market is deeply inimical to the long-term philosophy and policy of the Labour Party. That is a genuine and deeply-held fear.
The other fear, which people are less willing to admit, is a general dislike and suspicion of foreigners.
§ Mr. Mackintosh
I should like to give some examples. Take the way in which hon. Members and people outside this House have talked about the common agricultural policy. I heard someone on Saturday describe it as a criminal agricultural policy. My hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris) once referred to it as an obscenity.
§ Mr. Mackintosh
I have heard other people talk about the whole object of this policy, as the hon. Lady said, being to subsidise inefficient French——
§ Mr. Mackintosh
—peasants is the usual phrase. Let me put it to the hon. Lady that the main object of the common agricultural policy is to keep floating 3 million marginal farmers who operate in extremely difficult, arid land conditions in the Massif Centrale, Sicily, Sardinia, Brittany and Bavaria. They are farmers with problems identical to those experienced by the crofters in the Highlands or the small farmers in North Wales. They are people who are inefficient only in the sense that their land is poor or their units are too small. The way in which the word "inefficient" is used, suggests that somehow they are idle, slovenly, miserable people.
I was engaged in a debate with one of my colleagues, who chose to use this phrase about the inefficient French peasants. I made the point about inefficiency and pointed out that it was not a crime to be born French and after all we had people working the same type of peasant-holding in this country. He leapt up and said. "No one in Britain is a peasant." This is the point I find so surprising.
Take the question of prejudice. Hon. Members are full of morality and I like to be full of morality too. Where is the morality in someone saying to the British negotiator, "Will you go to Brussels and insist that British marginal hill farmers get special treatment, that we are allowed to continue our production grants and subsidies, to keep our marginal, small agricultural producers floating, and at the same time will you get changes in the Common Market agricultural policy so as to ditch precisely the same group of people in Europe?"
§ Mr. R. T. Paget (Northampton)
Would it not be all right if we said, "May we help our marginal fanners and cannot the French help theirs."?
§ Mr. Mackintosh
I am grateful to my hon. and learned Friend. It is true that the Common Market agricultural policy is designed to keep marginal European 1534 farmers going, and we have fewer marginal farmers, due to a shocking policy in the nineteenth century by which we destroyed our countryside and so depopulated the land—not a thing of which we ned to be very produd. We did this, the European countries did not, and they have more of these marginal farms. But I have no objection, for some period of time during and after the transitional period to helping these people. I have no objection partly because of the general old-fashioned Socialist principle that if we join a large unit there should be no objection to sharing the burden. Secondly, on this point, it has to be remembered that this is, for practical purposes, a diminishing problem. The average age of these marginal farmers is 57. They are not pouring off the land, they are simply dying and not being replaced. On the Continent, as here, industrial wages are 30 per cent. higher than agricultural wages, and boys and girls will not stay on the land.
At the present rate of decline on these marginal farms, the European agricultural structure will not be much different from ours by 1980. What we are asked to do is to contribute to a farming policy which lets these elderly, weak, defenceless people down lightly in their last years. That is what it amounts to. What is the great merit of people, inside and outside the House, shouting the odds that this is criminal, obscene, immoral and disgusting?
§ Mrs. Short
I did. Does my hon. Friend not see something immoral in the over-production of enormous quantities of fruit and vegetables, quite apart from butter, which are then left to rot because the prices are so high that housewives cannot afford to buy them?
§ Mr. Mackintosh
No, I do not. Here again the hon. Lady misunderstands the policy. The point is that the E.E.C. is working a sufficiency system. It produces almost enough for the E.E.C. countries to eat—altogether. When there are such vast quantities involved a slight over- or under-calculation is not difficult. The margins of surplus are small in relation to the total production. The hon. Lady 1535 must realise that the butter mountain of last year has disappeared this year. There is no surplus in grain this year, there is a slight scarcity.
We must remember that we in our country subsidise inefficient industries other than agriculture. For example, at times we have had to stockpile coal. It does not look so bad because it does not have to be destroyed and it can be used up at a time of shortage. That is the same situation. I cannot see that this has the horrible overtones that the hon. Lady suggests.
§ Mr. Richard Body (Holland with Boston)
Would the hon. Gentleman not agree that 90 per cent. of F.E.O.G.A. indirectly or directly goes on subsidising exports?
§ Mr. Mackintosh
No, this is quite untrue. The vast majority has gone on support buying.
A more serious point about the Common Market agricultural policy is that while it keeps the marginal farmers floating and prevents them from reaching utter destitution, it also helps the rich farmers proportionately more. The difficulty is that the same is true of our own guaranteed price system. No one has as yet devised a system of agricultural support which, while keeping marginal farmers going, does not help the rich farmers. What we must do if we join the Common Market is so to develop the policy that prices are used as a method for regulating production while the social aspects of the policy are maintained by income guarantees.
I should add that I have no basic objection to an element of subsidy. We in the Labour Party set up the Highlands and Islands Development Board. We have done everything possible to subsidise life in the Highlands and Islands of Scotland and in the rural areas because we believe that there is value in rural life. A highly developed rich country should think about this matter. I agree with the Bavarian Minister of Agriculture, with whom I spoke recently, who said, "We shall always want an element of subsidy. What will it be like to visit the alpine valleys if not a person lives there?" The countryside of Europe, largely unspoiled compared with our spoiled, over-industrialised countryside, is a European heritage 1536 and asset which, in a combined Europe, we should be prepared to do something to support and maintain.
I have talked about the dislike of foreigners. I hope that I have illustrated to the hon. Lady the Member for Wolverhampton, North-East how people are not prepared to think about European policies. If something happens in India or Uganda, for example, we lean over backwards to think about it and we try to understand it. How different is the attitude to the common agricultural policy. We use abusive words about it instead of trying to understand, alter and adapt it.
I now wish to refer to the deep fear in my party that the objects of the Common Market are inimical to the Labour Party's philosophy and its desire for a classless, egalitarian society in Britain. There are two confusions about this matter. The first concerns the phrase "Common Market". The word "market" among my colleagues seems to convey the idea of despicable people buying and selling, bartering and haggling. But, in practice, the point about the Market is that it gives consumer sovereignty and enables the purchaser to look for the cheapest products wherever he can find them. This is an estimable and admirable fact. It does not detract in any way from one's control over production or the distribution of income.
I wished to say something about regional policy, but my time is running out. I end with a point which concerns the cheers which I heard on Saturday by members of my party when it was said, "It is good for the C.B.I. to go into Europe. They want to go in because they believe that British industry will expand. But if it is good for them, it is bad for us." A more ludicrous heap of nonsense I have never heard in my life. Is it possible to have profits without factories, without employment or without production? It is out of production that we get the goods which our people need. It is out of taxed profits and incomes that we build schools, roads and houses.
I do not know what many of my hon. Friends want as their long-term objective for our people, but I want a higher standard of living for them. My constituency is not in an affluent area. There are, for instance, still many old ladies in my constituency whose hands are 1537 doubled up with rheumatism and arthritis. If they had had dish-washing machines and clothes-washing machines it need never have happened. It need not now happen to their daughters. We can spread the benefit of these and other consumer durables but only with a prosperous industry. The idea that if industry is in difficulties, whether private or nationalised, it will do good to the people I represent is absolute rubbish.
I am fortified by the fact that industrialists, technocrats, managers of industry, both public and private, think that they will do better in Europe. I hope that by entry we shall achieve the internationalism which might even teach my hon. Friend the Member for Wolverhampton, North-East to be a little more kind about Europeans. We might achieve the sort of internationalism which teaches people to understand what is going on across the Channel. We might get, and I think that we would, the greater, extra prosperity which would allow us to achieve a higher standard of living and a greater degree of comfort for the hardworking people of this country, which is one of my main objectives in politics.
§ 7.24 p.m.
§ Mr. John Wells (Maidstone)
The hon. Member for Berwick and East Lothian (Mr. Mackintosh) has spoken most eloquently about the great panacea that far too many industrialists are aiming at as the solution which will put our nation right. I believe that joining the Common Market will not of itself get this nation out of its present problems. The need is for greater efficiency, harder work and greater willingness to continue work.
The hon. Lady the Member for Wolverhampton, North-East (Mrs. Renée Short) mentioned that 3,000 jobs in her constituency had vanished to a Cour-taulds factory in Europe. My right hon. Friend the Member for Chislehurst (Dame Patricia Hornsby-Smith) mentioned the moves away from her constituency. I believe that many industrialists move their work to other countries because they are dissatisfied with the quality of workmanship that they are getting here. Joining Europe will not put this right. Nor is the move towards increased size of itself necessarily a good point. It is noticeable that there will be far more civil servants, not only at Brussels 1538 but in the member nations, if we join.
Let us consider the effects of the common agricultural policy. It will be necessary to have more inspectors for grading of fruit and vegetables. Officials are necessary to operate the common agricultural policy. O.N.I.C. and the German counterpart have between them 1,500 public servants employed in France and Germany, whereas our cereals authority has, I believe, 50 employees. This is a very big difference. Therefore, if we join, more officials will be needed. The value-added tax involves the employment of a great many new officials. There will be large increases in the public service.
At the last General Election the Prime Minister gave a clear pledge that if the Conservative Party were elected it would, to use his phrase, get the Government off the backs of the people. If we join, not only will more officials be employed here, but there will be extra officials in Brussels. I hope that if we join our negotiating team will look most closely at the Government's previous stand on reducing officialdom.
§ Mr. John E. B. Hill (Norfolk, South) rose——
§ Mr. Wells
No. We have been asked to get on and I want to be brief.
We believe in a parliamentary democracy. But the Labour Government, and in particular the Leader of the Opposition, have in recent years done more than has ever been done before to weaken this Parliament. The performance of the Leader of the Opposition this afternoon was long-winded and tedious and amounted to almost nothing but a series of quotes from his previous utterances, which were welcomed or not welcomed depending on how one looked at them. One of my great fears if we join the Common Market is that our parliamentary system will be devalued. The Parliaments of Western Europe are not the same sorts of institutions as ours. The officials are far more numerous. Much greater authority is given to officials. This seems to me a move away from our fundamental system.
The Prime Minister, in answering interventions today, said that we were in no position to deal with the negotiations of the E.F.T.A. countries ; they must negotiate themselves. I wish to make 1539 a constituency point. The paper-making industry is the most important in my constituency. Paper makers there are extremely worried about the present state of their industry due to what they allege to be the unfair competition of E.F.T.A.
§ Mr. David Crouch (Canterbury) indicated dissent.
§ Mr. Wells
It is no good my hon. Friend shaking his head. This is what the paper makers tell us, and we must believe our constituents, to the best of our ability.
I hope that the Minister, when he deals with the E.F.T.A. position, will indicate where the paper industry stands, because this matter affects the whole of Kent, and particularly the North Kent coast. Hon. Members opposite who have spoken about development districts and the difficulties in their constituencies must bear in mind that the South-East is not a development district and could never be one. We, too, have our employment problems, and we must endeavour to solve them, but we look to the Government to give us a lead.
§ Mr. Michael Jopling (Westmorland)
My hon. Friend has been talking about the paper industry. He may be interested to know that I had a letter only this morning from a large paper firm in my own constituency telling me that if this country were to join the Common Market that firm would prosper very much.
§ Mr. Wells
I am afraid that my hon. Friend cannot have listened to what I said. I was saying, or I sought to say, that we wanted some clarification of the E.F.T.A. position if we go into the Common Market, because if the E.F.T.A. people are to continue to get the full advantages which they are now getting our paper-making industry will continue to suffer as it is now. I honestly cannot imagine that there is a large paper mill in my hon. Friend's constituency. He may have there a business which employs a few hundreds of workers, but I was speaking of mills employing 5,000 and 6,000 people. In constituencies such as those of my hon. Friends the Members for Dartford (Mr. Trew) and Sevenoaks (Sir J. Rodgers) there are paper-making businesses employing large numbers of people.
1540 However, I want to turn away from this to horticulture, which, I am sure, will warm the heart of my hon. Friend the Member for Westmorland (Mr. Jopling). We must look for further assurances in the realms of horticulture. The hon. Member for Berwick and East Lothian did a very good service to the House when he pointed out that French peasants are perfectly reasonable people who are producing crops to the best of their ability in very difficult surroundings which are due to no fault of theirs, and that they are a declining number. He made good points on behalf of those people, the French peasants—and I use the word honourably, as the hon. Member for Berwick and East Lothian did. If we are to support them in their decline, in their rundown, and the hon. Member spoke of their average age as 53–—
§ Mr. Wells
Yes. If the average age of those peasants is 57, then I believe that the problem will not be with us for very many years, but if we are to support them I hope the Government will look truly sympathetically at the smaller British horticulturist who through lack of capital and similar problems cannot expand, who, perhaps, in the past has not had the desire to expand, but who is now caught by a grave dilemma and sees himself unable to buy more land and facing declining prices.
The hon. Lady the Member for Wolverhampton, North-East (Mrs. Renée Short) made an intervention saying that prices were too high ; she said fruit and vegetables were dumped because prices were too high. How wrong she is. Fruit and vegetables are dumped because of the structural surplus which there is in the European Community, and till the structural surplus is done away with our fruit growers have very little prospect of getting fair prices. I hope that our negotiating team will take very serious note indeed of the need to get rid of the structural surpluses which exist in Europe, particularly of apples and pears. Field vegetable crops have little to fear if we go in, but some of our glasshouse growers will face a very real problem.
My right hon. Friend the Member for Grantham (Mr. Godber), the Prime Minister and the present Minister of Agriculture have at various times over the 1541 past four years given a series of pledges that this party of ours will compensate agriculturists and particularly horticulturists who find that they cannot compete on fair terms if we go in. I hope that the pledge will be reiterated. One realises that it is very difficult for my right hon. and learned Friend the Chancellor of the Duchy to give such a pledge when he is negotiating, but at least some assurance should be given to this House that if we are to compensate the growers of Europe we should at least compensate the growers of our own country if we are to give them a good passage in the future.
A very important section of our horticulturists is the bulb section. We are producing in this country more bulbs already than are produced in Holland. I am told by one of my hon. Friends that we are producing more in Holland. Lincolnshire, than are produced in Holland, Europe. It is of great importance to this country that it should be heard in the formulation of any future bulb regulations, because the regulations which have been produced to date are not entirely satisfactory to us, and we hope that our Government will stand firm and not sign as accepting the existing regulations.
Grubbing-up grants offered so far for top fruit are acceptable enough, but we want to be assured this will not be the only compensation forthcoming. We want to know that the small traditional growers and the glasshouse growers and other sectors who may face difficulties are properly looked after.
Because of my horticultural interests, over the past few years I have got to know the Channel Islands fairly well, and I am very perturbed about the phraseology of paragraph 124 of the White Paper. While one accepts that my right hon. and learned Friend is doing his best to meet the desire of the Channel Islands negotiators, I very much dislike the word "might" which appears in paragraph 124, which states :We have proposed that a form of association under Article 238 of the Treaty of Rome might be an appropriate way of dealing with the question.My right hon. Friend will recollect that Article 238 says that unanimous agreement is required by all the member countries before such associated membership can be offered, and I would like to know whether my right hon. Friend has met 1542 yet any real signs whether Article 238 will be acceptable to all member countries at the moment.
§ Mr. Rippon
Perhaps I might answer that straight away. We are in negotiation about this. I cannot say more at the moment than that this might be a reasonable solution. All the matters of agreement in the negotiations have been unanimous.
§ Mr. Wells
I am very glad to hear that, and I am sure that my right hon. and learned Friend's words will give great comfort to many people in the Channel Islands who have been experiencing great anxiety in recent weeks.
The horticultural industry depends on a great deal of good faith in these promises which have been given by the Prime Minister and others, and those of us who represent horiticultural constituencies must pin our faith on the good faith, the good intent and the good will of the leader of our party, and we trust that our confidence in him will not be misplaced.
§ 7.38 p.m.
§ Mr. Alfred Morris (Manchester, Wythenshawe)
I am glad the debate has opened without excessive rancour. The British people expect a searching scrutiny of the White Paper and a debate which is not degraded by personal abuse. By common consent, the outcome of the debate on which we are now embarked will affect almost every aspect and detail of the lives of every man, woman and child in this country.
My hon. Friend the Member for Berwick and East Lothhian (Mr. Mackintosh) said my hon. Friend the Member for Wolverhampton, North-East (Mrs. Renée Short) dislikes foreigners. My hon. Friend the Member for Wolverhampton, North-East, is well able to look after herself, but I am sure she would reply that she does not restrict her liking for foreigners to those who live on our doorstep.
I accept the honour of hon. and right hon. Gentlemen on both sides of the argument. It is known that there is a very deep division between my hon. Friend the Member for Berwick and East Lothian and myself. In the debate in May 1967 I said I would not support the application. I did not support the application. Moreover, it was widely 1543 noticed during the General Election that I was a strong opponent of British entry to the Common Market on any terms likely to be negotiated. Like other hon. and right hon. Members, I feel strongly that we should all say with complete frankness exactly what we think on this great issue.
I am grateful to my right hon. Friend the Leader of the Opposition for drawing attention to the importance of my Motion calling for a Select Committee on the White Paper. The Motion says :That a Select Committee be appointed to examine the evidence upon which were founded the conclusions in the White Paper, United Kingdom and the European Communities ; that the Committee have power to send for persons, papers and records, to adjourn from place to place and to report from time to time, that the Committee have leave to sit notwithstanding any adjournment of the House ; and that it be an instruction to the Committee to report before the House is called upon to give its approval of the White Paper.That is a modest request for us to have made to the Prime Minister, right hon. Gentleman the Leader of the House and their colleagues, and it will be seen that the Motion has the support of hon. and right hon. Members on both sides of the House.
Many of us regard the White Paper as propagandist, disingenuous, crudely selective, at times emotional, tendentious and, above all, shifty and evasive. The shorter version is an even cruder attempt to persuade the people of this country of the wisdom of a deeply controversial policy. Whatever view is taken of the Common Market, I hope it will be agreed that it is utterly wrong that public money should be used to distribute what is a propagandist rather than a factual statement. It is well known that right hon. Gentlemen opposite have plans for hiving off part of the activities of our great public corporations. I am sure I speak for all my hon. and right hon. Friends when I say that this propaganda should be hived off from the Post Office at the earliest date.
The best text on this subject is a study of the information services published in 1965 by the Institute of Public Administration under the title "The Government Explains". This book, which was prepared by an all-party group of experts and included civil servants, stands as an authoritative text on this subject and the 1544 most reliable guide to legitimate practice. One of the key passages reads :Paid-for publicity material should surely be impartial. Facts about matters under political discussion can be given to the Press when they ask for it, but public money is not spent on producing paid publicity about a controversial subject still under consideration. There is a difference between spending only staff time on answering questions or supplying information for the Press and broadcasting and a deliberate spending of public moneys to produce an advertisement or book or pamphlet to advocate or even explain Government proposals. Comment in such publications should be conspicuous by its absence and arguments should be left to Parliament and the Press. Surely the information services could leave it to the Opposition to establish that there are two sides to a question.The shorter version of the White Paper is a document which, by the test of the rule I have quoted, should not have been distributed at public expense. We should all agree now that the spending of public money on distributing that document is a wrongful expenditure, especially since it is public expenditure which has not been authorised by Parliament.
I am not alone in saying that the White Paper is crudely selective. Even the Daily Telegraph has condemned its "skeletal economic arithmetic". The Guardian accuses the Government of distributing half truths. I would remind the House that half truths are also half lies. Miss Hella Pick of The Guardian had this to say :The unanswered questions range far and wide. The Government has not attempted to calculate the cost of membership beyond the first five years. It carefully avoids any attempt to measure the effect of membership on Britain's trade. It does not categorically assert that national income will grow as a consequence of membership.My assessment of the White Paper is that it offers few, if any, of the vital safeguards which were promised. The Government have already accepted the entire Rome Treaty, the multifarious rules and regulations made under it, the Common Market's dear food policy and a budget payment falling heavily and unfairly on Britain. No lasting safeguards have been obtained for Commonwealth countries, whether rich or poor. It is an extremely serious matter that the White Paper makes no attempt to estimate the total balance of payments cost of entry. It would be one of the first tasks of the Select Committee I have proposed to establish a figure for the balance of payments cost of entry.
1545 Many of us on this side of the House have said in previous debates how concerned we are about the heavy increase in food prices that will inevitably follow British entry to the Common Market. It is not just the common agricultural policy which threatens the standard of living of our working people. The value-added tax may be an even more serious threat. That form of indirect taxation will certainly be applied to necessities if we enter the Common Market. The White Paper says that food prices will increase but not industrial costs. If that is so, the standard of living of our working people will fall. I hope my right hon. Friend the Member for Manchester, Cheetham (Mr. Harold Lever) will agree that none of us on this side could accept a sharp rise in food prices without compensating increases in wages, salaries and social payments.
The right hon. Member for Streatham (Mr. Sandys) has made light of the inevitable increases in food prices. To elderly people, widows, disabled people and others on fixed incomes, the cost of food is a deadly serious matter, for people on fixed incomes, especially those on lower fixed incomes, spend a much higher proportion of their income on food than does the average wage earner. We on this side take an extremely anxious view of the anticipated increase in food prices. Nor are we certain that the Government have told the whole truth on this matter.
There are many of us who feel that the increase in food prices will be at least 20 per cent. That increase, combined with the effect of a value-added tax, would be a very deeply serious factor for millions of working people of this country. We should also remind ourselves that the increase in food prices would be an unnecessary increase. For more than a century, we have been supplied by the most efficient producers of food in the world. Now we are asked to opt for high-cost producers. It is my view that this will do great damage to many countries which have been the traditional friends of this country in good times and bad.
I do not divide the issue only into political questions and economic questions. Certainly there are important political and economic questions, but there are also important moral questions which 1546 all of us must face before we make our decision later this year. It would be a breach of honour to say to New Zealand that she is to be denied any lasting guarantees. My right hon. Friend the Member for Middlesbrough, East (Mr. Bottomley) infers from the White Paper that there is a guarantee to New Zealand that her interests will be protected for a generation. I know that the right hon. and learned Gentleman will want to address himself to that point. For my part, I can see no guarantee that will protect New Zealand for anything like a generation.
There are many important points of special concern in the area I represent in this House. There has been much talk recently of controlling multi-national companies. It has been argued that if we enter the Common Market we shall have more control of these companies. I do not accept that. Indeed, I would emphasise that we shall have less control over some of our most important industries in this country. A document from the Community says :… the Community delegation considers that the power held by the British Secretary of State for Trade and Industry (in whose province the British Steel Corporation and the National Coal Board fall) to give general directives to these bodies under the terms of the Coal Industry Nationalisation Act, 1946 and of the Iron and Steel Act, 1967 is inconsistent with the European Coal and Steel Community Treaty.That is not a statement we on this side of the House can accept. The power of right hon. and hon. Gentlemen in this House would be diminished were we to accept that expert definition of the E.C.S.C. Treaty.
There are also important questions of regional policy which affect the Northwest of England, just as they affect the North-East, Scotland, Wales and the South-West. I hope that the right hon. and learned Gentleman the Chancellor of the Duchy of Lancaster will accept that far too little is said in the White Paper about regional policy. He has incurred the suspicions of many Members of the House because of the paucity of official information on this very important matter.
There is also the important question of defence. Far too little has been said 1547 so far in the debate about the arrangements which may ensue in the field of defence from our adherence to the Treaty of Rome. The right hon. Gentleman the Prime Minister passionately believes that there should be an Anglo-French nuclear deterrent. In his Godkin lecture, delivered at Harvard University, he strongly emphasised that he wants to see Anglo-French nuclear sharing. On this side of the House there is no support whatever for Anglo-French nuclear sharing. I have pointed out elsewhere that, for us to accept the Prime Minister's thesis, would be to breach the non-proliferation treaty and would have other effects which would be very unfortunate for the reputation of this country. That is one reason why very few of us on this side can accept the Prime Minister's leadership on this issue. What is more, defence policy is an extremely important political issue.
Notwithstanding all that has been said about the phrase aura à coeur, the Brussels arrangement on sugar could be deeply unfortunate for many of the poorest countries in the Commonwealth. I refer to countries like Fiji, Mauritius, Jamaica, Barbados, Trinidad and Tobago, Guyana and Swaziland. It was Joseph Conrad who said of the people of Mauritius that :Sugar is their daily bread.I am not satisfied that the people of Mauritius have bankable assurances under the arrangement made in Brussels.
There is very deep concern in the countries I have mentioned about the vagueness of the Brussels arrangement. Its unilateralism has caused widespread concern in the developing Commonwealth countries. But I am also concerned about the position of Queensland, Australia. The Chancellor of the Duchy of Lancaster gave an important pledge in a speech he made in Canberra on 16th September, 1970. I was interested to see a statement on that speech by that distinguished Australian, Sir John Dunlop, who said recently :The White Paper, and enquiries in Europe, show that Mr. Rippon's promise has not been kept. Nor has the British Government's formal request to the Six been met. All the evidence suggests that in fact no serious effort was made by Britain to obtain what it initially sought.1548 That is the view of many representative people in Australia. It is, of course, a mistake to think that Australians are not concerned about the poorer countries of the Commonwealth. In fact, they know that if their sugar goes on the world market, this would have a most unfortunate effect on the world price of sugar. This in turn would mean great suffering for many of the poorer Commonwealth countries.
We talk a great deal both in this House and outside about participatory democracy. Yet there are many leading participants in this debate whose message to the British people is that they are going into the Common Market whether they like it or not and whether they agree or disagree. That is a profoundly serious statement for pro-Marketeers to have made. I also resent their defeatism. Their attitude seems to be summed up in the slogan : Europe or bust. The right hon. Gentleman the Prime Minister may not have said that, but that is how his approach is interpreted by wide sections of public opinion and by many Conservative newspapers.
Let us have an end of defeatism. Our responsibilities as representatives of the British people require more of us than the abject defeatism of which we have already heard far too much in the debate. There will be a massive Government campaign during the summer to convert public opinion.
§ Mr. Morris
At taxpayers' expense. The Government are determined to convert public opinion. They are as frenetic in their enthusiasm to convert public opinion as the Chinese Christian who decided to baptise his troops with a hosepipe. I warn the Prime Minister and his colleagues that the British people are in no mood to be hosepiped on this issue. There are those of us who will endeavour to see that the debate is evenly balanced. The White Paper contains a great deal of propaganda. Throughout the debate, we shall be endeavouring to ensure that the British people have the full facts on this issue. That is our task in the weeks and months ahead.
§ 8.1 p.m.
§ Sir Robert Cary (Manchester, Wellington)
I am aware that about 200 Members wish to participate in the debate, and I shall act accordingly.
I have the privilege to follow the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris). We share the same area of southern Manchester and have much the same electorate. Towards the end, his speech contained some rather gross exaggerations of accusation against those who he considers wish merely to rush into the Common Market whether the terms are good, bad or indifferent. That is not the mood which propels many Members on both sides of the House who look at the White Paper seriously. But I agree with the hon. Gentleman on one sentiment. This is a matter of deep concern not only to the people of our area but also to every individual in the country. This matter is something more than tariffs and taxes. It runs far deeper than that.
In the years I have known the hon. Member for Wythenshawe, he has always been absolutely consistent in his attitude about the Common Market. Originally he did not want to join, and he is no closer to joining now. In the end, whatever the terms, he would be opposed.
I do not know whether that would apply to his right hon. and distinguished Friend the Member for Workington (Mr. Peart), a former Minister of Agriculture and Leader of the House. But the hon. Member for Wythenshawe has been absolutely honourable and consistent in his views.
From the beginning, ten years ago, I have always been a little sceptical about entering the Common Market. I have never been happy with the thought of Great Britain becoming part of a great constellation of countries under the terms of a treaty of which it was not an architect. Therefore, over the last ten years, I accepted the "No" from General de Gaulle against our entry with some degree of confidence, as much as, in another context and on an earlier occasion, I welcomed something that my right hon. Friend the Foreign Secretary said in the House, that the Common Market was a "dead duck". I hope I do not misquote him.
§ The Secretary of State for Foreign and Commonwealth Affairs (Sir Alec Douglas-Home)
It was a dead duck, but only for a time.
§ Sir R. Cary
That is an adequate clarification. However, this is a matter that strikes deeply, beyond matters of trade, tariffs and taxes. There is something deep and fundamental in taking Britain into another constellation of countries under a treaty many parts of which it would like now to revise. This has led me to spend much of the past few years in what might be called sitting on the fence about the Common Market. With my constituents I have neither been pro nor anti on the issue. The debate gives me an opportunity to come off the fence. In spite of my original fears and objections, having read and digested the White Paper, I shall support entry on the terms offered.
My right hon. Friend the Foreign Secretary and a few others present will remember that able and distinguished Parliamentarian the late Lord Crook-shank, who was Leader of the House from 1951 until 1955. He was a deeply honourable and sincere man who loved Parliament and would do anything to protect it. That it should be devalued or invaded by taking it elsewhere was never in his thoughts. I hope that I am not betraying a trust to him when I say that when it was proposed that three Malta Members should be brought here to sit in this Parliament, if that had happened it would have led to him resigning from the Cabinet. It did not happen. That comment is not against the Maltese people. But to Lord Crook-shank the mere minor operation of bringing three Maltese to sit in this Parliament would have been a fracture of everything we did and of the United Kingdom Parliament. When I think of it in that way, I like to think of what might have been the attitude of those who have gone before us in the House about what we are discussing now.
Union is not unfamiliar to us. My right hon. Friend the Foreign Secretary will remember the views brought to us in 1938 from the United States asking for "union now". My right hon. Friend will recall the gesture made in Paris by 1551 Sir Winston Churchill, as Prime Minister, when he offered the French union with us if they would come and fight on. So the suggestion that we go elsewhere is not altogether new. But in the circumstances that have overtaken our country in the last ten years, we must seriously consider whether we can thrive and strive alone.
In addressing the House today, the right hon. Gentleman the Leader of the Opposition said that outside the Community—which will become stronger—we should thrive and prosper and devise a completely new platform for ourselves. I wonder just how true that is. Perhaps it may serve our interests if we were to go into the Common Market on the reasonable and fair terms offered by it.
As an ounce of fact is worth a ton of generalities, I come to the matter of regional policies, mentioned by the hon. Member for Wythenshaw and in a wider context, by the Leader of the Opposition. He talked of the Leyland bus factory, which is important in terms of regional policy. But I have no fears about that. There is, however, one item which fills me with foreboding if we are not careful to preserve the regional policies the authority for which should always belong to the House of Commons. I hope that my right hon. and learned Friend the Chancellor of the Duchy of Lancaster will say a word about it when he winds up this part of the debate. I am sure that the hon. Member for Wythenshawe will agree that unemployment in the Manchester area is approaching what might be described as an unapproachable level. We are threatened with the closing of the Irlam steel works, which will mean another 5,000 men unemployed in the Manchester area. The Leader of the Opposition talked of new authorities of the Common Market taking over regional dispositions, not only in the Market but perhaps in our own country. If that happened, the plans which we are now making to keep some of the Irlam steel workers in employment might be destroyed. I hope that my right hon. and learned Friend will give us a little more information than exists in the White Paper about the probable future of regional policy.
The hon. Member for Wythenshawe knows how strongly the people in the 1552 area that we both represent feel about a referendum, and that their voices should be heard through that agency. It so happened that the Leader of the Opposition expressed his own agreement with the idea. It arose out of a supplementary question which I put to my right hon. Friend the Prime Minister on the 8th July. I asked my right hon. Friend :If a referendum were held, would it not be almost impossible to compile a suitable questionnaire to put before the electors?My right hon. Friend replied :Those who have studied referenda, and especially the experience of certain other countries, have always come to the conclusion that one of the greatest disadvantages lies in the method of framing the questions. One has seen other countries in which this has quite obviously led to abuse. This has been one of the strongest arguments against the referendum."—[OFFICIAL REPORT, 8th July, 1971 ; Vol. 820, c. 1515.]On that occasion, the Leader of the Opposition agreed with my right hon. Friend. In view of that, it was rather pointless of him to raise the possibility of a referendum again.
§ Mr. Harold Lever
I am not quite clear. Is the hon. Gentleman saying that my right hon. Friend today raised the possibility of a referendum in the form of voicing his support for a referendum?
§ Sir R. Cary
I am saying that, when my right hon. Friend gave the answer to which I have just referred, the Leader of the Opposition nodded his agreement about the difficulty of framing the questions.
§ Sir R. Cary
I am glad to hear that. However, the right hon. Member for Manchester, Cheetham (Mr. Harold Lever) will know the area that I am discussing. What I had said applies just as much to Cheetham as it does to With-ington and Wythenshawe. There is a strong desire for a referendum.
§ Sir R. Cary
I had said that already.
1553 The Leader of the Opposition concluded his speech with his attitude to New Zealand. It was for that that we were all waiting. It is on the basis of the protection which will be given to New Zealand that I have come off the fence and decided to support entry.
If the Leader of the Opposition resents the terms for New Zealand, why is it that they are so welcome in New Zealand itself? They have been well received there. I have been in contact with New Zealand House, and I have been provided with an analysis of Press comment in New Zealand. The newspapers of that country have contained, amongst others, the following comments :The terms to new Zealand are good and present a great opportunity.The terras are exceptional for a third party country of its size.The agreement provides an incentive for the country to make every effort to develop new markets for dairy products, and to increase diversification of manufactured exports.Subject to agreement on final details, New Zealand has a basis for trade with Britain (as a member of the European Economic Community) which it has not had previously.The New Zealand Dairy Board has already been successful in diversifying exports away from the British market.In the year to last May. some 38 per cent. of dairy products were sold to markets outside Great Britain, compared with only 17 per cent. ten years ago.Those are important figures and averages which apply to New Zealand alone, but the terms negotiated for New Zealand have been generally welcomed and received favourably in that country. In view of that, the Leader of the Opposition is a little off beam.
I have heard it said that the strength of the Community as a result of Britain joining it will be so greatly improved that it will provide a further insulation against war and that the circumstances of 1914 and 1939 will never occur again, with these three great countries, Britain, France and Germany, fighting one another in two terrible world wars. I do not see any possibility of the countries of the Common Market repeating that history. But the world is a dangerous place, and there are other areas today with the capacity and capability of doing it. I cannot believe that any Common Market country would wish to return to those conditions.
1554 As a boy, in the school holidays, I was with that great crowd in Downing Street on 4th August, 1914. It was almost a day of festival. People cheered and thought that it was wonderful. Here was a conflict which would be over in six months. Everyone rushed to recruiting offices to enlist. I had the sad duty a year later of being released from an O.T.C. to become the youngest cadet at Sandhurst. Most of the sixth form of my school had been there. They had gone, half of them to die in some foul, stagnant ditch in Flanders. I cannot believe that history will repeat itself.
§ Sir R. Cary
It did, but the mood had changed completely. In 1939, there was an alert which made it necessary for it to take place again. However, I do not see that there is anything to be said in favour of the Common Market on the basis of its providing an insurance against a further world war. What it does is bring opportunities to this country in terms of what I think is the hinge clause. I refer to paragraph 55 of the White Paper, entitled, "Prospects for our economy". When one thinks of the benefits that have accrued to the Six members of the Common Market, to their institutions, to their prosperity and to their trade unions, there is every reason for us to enter the Community on the terms offered to the Government.
§ 8.19 p.m.
§ Mr. David Ginsburg (Dewsbury)
I agree with the hon. Member for Manchester, Withington (Sir R. Cary) that this is the supreme political issue of our time. On it, hon. Members must speak up and make their views clearly known.
Inevitably, however, there is a sense of sadness for me and for many of my colleagues in that we were deprived of a Labour Government and the chance to enter Europe under the leadership of my right hon. Friend the Member for Huy-ton (Mr. Harold Wilson). Many of the fears of the public about European price levels and many trade union reactions would have been met more easily by a Labour Government. People would have been more confident of the readiness of my right hon. and hon. Friends to make the easier transitional arrangements which are bound to be necessary in an exercise of such complexity and delicacy.
1555 In a sense we are holding a limited debate only on the terms. I remind the House that Parliament decided the issue of principle when we made our application in 1967. There was surely no point in looking for adequate terms if the basic idea of joining the Community was repugnant. Indeed, the fact that a number of hon. Members on both sides of the House opposed the initiative is proof of that. Inevitably a debate on the terms is bound to be overlaid by a debate on the principle. It is sufficient to say that the political and economic case for Britain and the other three nations joining the European Economic Community is overwhelming.
I find the terms acceptable. Indeed, for reasons which I shall give later, I doubt whether in 1967 better terms for this country were on. But, apart from examining the terms, it is our duty to be able to reassure our constituents and the public generally that going into the Common Market does not impose burdens which our economy could not bear. Concerning our contribution to the Community budget, our balance of payments position and even the cost of living, nothing significant emerges from the White Paper which was not already known and with which an expanding economy and satisfactory social service arrangements could not cope.
We should not imagine that all the burdens and risks are one way. If we do not join the Common Market we shall face unquantifiable pressures on our cost of living and on the balance of payments. There are risks in life whatever one does. If a hypochondriac takes to his bed, he is at risk even in such circumstances.
It is argued by some of my right hon. and hon. Friends that things have changed between 1967 and 1971 and that therefore we are justified in reconsidering our position. We are always justified in reconsiderating our position on any issue, especially an issue of such importance as this, but we owe it to ourselves to try to summarise some of the main changes which have taken place since that date.
We have had, for example, the United Kingdom devaluation, the French devaluation and the German revaluation. I submit that the cumulative effects of 1556 those three changes are significantly in favour of and make easier our entry into the E.E.C.
There was the death of General de Gaulle. Whatever his great contribution to history, no one would surely argue that General de Gaulle's departure from power in France made our application more difficult. Quite the contrary. His departure from the political scene immeasurably eased our negotiations to the stage which they have reached. Moreover, apart from the departure of General de Gaulle, we had the arrival on the scene of Willy Brandt. That, again, eased our position.
Over and above that—this is a factor of considerable importance—we have a substantial balance of payments surplus. Had we been successful in pursuing our application in 1967 we would have gone in in a position of much greater weakness. But today, with the balance of payments surplus which was built up under the Labour Government, we are in a stronger position to face the problems of the Common Market.
Only on the one issue of the agricultural regulations can we say that things have got a little more difficult than in 1967. Therefore, striking the balance at this point, I suggest that historically this is probably about the easiest chance that we are likely to get to enter Europe.
One argument which can be put against this, which right hon. and hon. Gentlemen opposite may not like, is that, as we have a Conservative Government, that is a reason for not going into the Common Market. But we can always make the point that they will not always be the Government. Indeed, for most of the transitional period we may hope to have a Labour Government.
I venture one other important argument which arises here, namely, the price level in this country. If we had been successful in going into the Common Market in 1967 this would still have been a comparatively cheap country with a level of prices significantly lower than in Europe. That would have meant very serious adjustment problems. But by 1971 our prices have risen considerably. [Interruption.] I point out to my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) that, for better 1557 or worse, we have already paid part of the entrance fee of going in. Therefore, it would be an act of political masochism to reject entry into Europe because we do not like the complexion of the Government and what they have done.
A much bigger question now arises : what would happen to this country and to Europe if we lost the opportunity of going in? If this negotiation were to sunder because Parliament rejected the terms? I take a gloomier view of the position than many hon. Members on both sides of the House. If, on 28th October, Parliament in its wisdom were to reject the White Paper and there were to be no signature on the Treaty of Rome, there would, to my mind, be an immediate loss of business confidence in this country and investment plans would suffer seriously. If Britain does not go into Europe, I believe that the investment of American companies will inexorably be shifted from these shores to the Continent. Our industries—for example, the wool textile industry in my constituency—would be denied the opportunity of expansion into Europe on which they are counting. We would be introducing an immediate deflationary element into the economy as serious as a major rise in taxation or in Bank Rate. The first casualty of such a decision by Parliament would be that employment would suffer.
There would also be effects on Europe. The economic impacts would be harmful and the institutions of Europe would coalesce without Britain. There would be no renegotiation, whatever the Government of the day, for many years. Much of what could happen we would deplore, but it would be our fault. We would have bolted the door on ourselves and history would never forgive us.
§ 8.28 p.m.
§ Mr. David Lane (Cambridge)
Apart from his speculation about the result of the next General Election, I warmed to nearly everything said by the hon. Member for Dewsbury (Mr. Ginsburg). I welcome the White Paper and the debate. This is a useful preliminatory opportunity to clear our minds before the debate in October. I think it is equally useful for a better understanding by the public if, as I hope, the debate is fully and fairly reported.
In three months' time we are to be asked to make the decision. I have little 1558 doubt that the decision by this House will be a positive and affirmative one. It is more uncertain what will be the state of public opinion at that time, and it seems to me that this is the most important single element in the three months which lie ahead of us, because without substantial public support any decision here in October will be a hollow one.
I am glad that the leaders of all three parties in the House have declared themselves against a referendum. Parliament has to take this responsibility, which we do not shirk and should not cloud ; but if we are to have no referendum, we owe to the constituents whom we represent the most thorough possible discussion of the issues and sounding of their opinion in the constituencies.
We are all aware of the public's anxieties, and most of us are trying to remove them through these discussions because we have the impression that much of the opposition is coming not from settled conviction against joining but from fear and uncertainty. I should like to mention four of the anxieties on which I hope my right hon. Friends will concentrate in their exposition of the Government's point of view during the crucial weeks ahead.
The first is the cost of living. I deplore the scare estimates put out by many of the opponents of entry. Of course there will be a rise. No one is seeking to disguise it, and the Government have made their best possible calculation. It may be right or it may be slightly wrong one way or the other, but let us keep a sense of proportion about this and remind people that, thanks to the negotiations, the transition is to be a gradual one and that the nightmarish fears which some people have over this are not going to materialise.
But there are real worries among pensioners—State and private occupational—of which we are all aware. There are anxieties, too, among older people still at work about what they will get out of this even if the next generation, as they admit, may well benefit. I believe that we have all to explain much more clearly to this very anxious section of the population how they will share in the general benefits of joining.
Second, there is the anxiety about democracy versus bureaucracy, this spectre of the Treaty of Rome which is 1559 hanging over so many people, often those who have not troubled to read it or find out what is really in it. We have to make it clear that the treaty covers a strictly limited area of our national life and, equally, that the decisions and activities of the Commission in Brussels, under the supervision of the democratic Council of Ministers, are very strictly circumscribed. Here again there is a need for much more reassurance among members of the public who are genuinely troubled.
Third, there is the problem of fisheries. I assure my right hon. Friend that this is causing anxiety, as I gathered again at a meeting only last weekend in my constituency, not only in the coastal areas but in many inland places, too. We must not under-estimate the worries of many of our fellow-citizens on behalf of fishermen, and I hope that the Government will insist, during the resumed negotiations after the summer holidays, on a fair deal for fishing for ourselves and the other applicant countries before there is any question of our signing the treaty.
The fourth particular anxiety is about the Commonwealth, and I think that there are two elements in this, sometimes overlapping. There is first the feeling of many that we are turning our backs on the older Commonwealth countries, particularly Australia, New Zealand and Canada. The other element is that we may be jeopardising the development of many of the newer Commonwealth countries in other continents, and that has been brought out in a number of speeches today, particularly from the other side of the House.
I suggest that we must make clearer than we have so far done, first, that our Commonwealth attachments will continue strong and meaningful, even if trading patterns go on changing over the years ahead as they have over the years past. We must not let our enthusiasm for Europe make us in any way neglect or minimise the common interests and benefits of the Commonwealth. Equally, we have to make clear that the Common Market is not simply a rich Western club but something out of which the third world will benefit, too, and benefit not only materially—because too much of the discussion perhaps has been in material terms—but in terms of peacemaking and developing a better understanding across the continents.
1560 I believe that the present links that we have with our British Commonwealth partners will be replaced by broader links between an enlarged Community and a greater number of overseas territories, including all the former dependencies of the member countries. Here, surely, is the answer to the worry that was put this afternoon by my hon. Friend the Member for Banbury (Mr. Marten), who says that he always prefers the open seas. The kind of development of the Community which I foresee, and which I should support, is one in which the Community will be looking outwards across open seas to all the continents to the East and to the West.
I have dwelt on the worries of the public, and the need to carry with us the maximum public support, because it is on this that most of us will be concentrating during the recess before we re-assemble.
If I may now make one personal appeal, it is that we should face this choice with more self-confidence and less apprehension and suspicion. If we consider the economic prospects, there is no doubt that there will be costs to pay. There is room for disagreement today and in future debates about how much the costs will be. The more the Government can tell us about the various alternative estimates the better. But the benefits, on which we spend far too little time, will depend on our taking advantage of the new opportunities that open up. I have faith in British Industry's ability to take those opportunities, not forgetting the much greater scope that there will be for our invisible exporters, mainly from the City of London. I missed most of what I gather was an inspiring speech from the hon. Member for Berwick and East Lothian (Mr. Mackintosh), but I came in to hear him making the point that industry is overwhelmingly confident of its ability to prosper more in the wider market. Surely, that should carry weight with public opinion.
Looking at the political prospect, let us raise our eyes from the "nicely-calculated less or more "of economic forecasting to see this choice in the perspective of history. How can Britain best play her rôle in the changing world in the decades ahead?
During the first half of this century the European nations were fighting 1561 against each other ; in the second half we should surely concentrate on working with each other. We now have a real chance to bury for ever these old animosities in Europe and reassert Europe's influence for good through unity rather than rivalry. Today, as much as it ever did, the world needs Europe, and the Common Market nations need Britain if their grand design is to be enlarged and strengthened. It will be tragic if Europe's great expectations are disappointed at this time because of any failure of will or vision on our part. It is surely the vision of Europe in the late twentieth century which will have a special appeal to our younger people, for whom frontiers and narrow nationalism are increasingly irrelevant. I hope that we shall not disappoint those younger people, as well as our friends across the Channel.
It is sad to see among the Labour Party a loss of what was an exciting vision as my hon. Friends and I watched the party only two or three years ago. Too many of its members are falling below the level of events and going against the tide of others in their fraternal parties on the continent of Europe. There have been exceptions in the debate—notably the right hon. Member for Middlesbrough, East (Mr. Bottomley). But what a contrast at the beginning of this afternoon between the well-balanced and wide-visioned speech of the Prime Minister and that which followed from the Leader of the Opposition, in which I could detect not a spark of inspiration and see not a gleam of vision! Adapting the words of Winston Churchill, it seems that the Leader of the Opposition wants to go down in history as the man who brought political credibility into disrepute. I regret that on this great issue so many hon. Members opposite seem to be sliding into political opportunism and personal manoeuvring. I hope that it is not too late—whatever form our vote in October may take—to appeal for the maximum bipartisan support for a policy which, in effect, has now been our national policy for a full decade.
Surely we can look at this choice not in a spirit of panic or defeatism, as the hon. Member for Manchester, Wythen-shawe (Mr. Alfred Morris) was saying. I do not believe that this is a choice in terms of "join or disaster" ; I believe 1562 that it is a question of "join or continuing decline". I see no other practical alternative for this country that is so promising. With or without us, Europe will go ahead growing in prosperity and in influence. It has always been our natural habit to move out and reach out from this island and not turn in on ourselves. We have always thrived on challenges. I believe that we shall also thrive on this one and so help to open up better prospects for Britain, Europe and the world in the remaining decades of this century.
§ Several Hon. Members rose——
§ Mr. Arthur Lewis
On a point of order. I know that it is difficult for the occupant of the Chair to answer this point at the moment, but perhaps it could be considered later. The last speaker was the eleventh in this debate apart from the Front Bench speakers. It is the usual custom of the Chair to be meticulous in calling supporters and opponents of the Motion alternatively. But of those 11, eight have been in favour and only three against.
I know your difficulty, Mr. Deputy Speaker, but perhaps you might suggest to the powers that be that, when we want a full and frank and honest debate, and if we want to show democracy at work to our Continental brothers, it is a bit annoying when there are opponents present to see a Member told that he will be called, give a long speech in favour and then walk out. In the succeeding days, could we try to even this out?
§ Mr. Deputy Speaker (Sir Robert Grant-Ferris)
The hon. Member knows that the House has, from time immemorial, entrusted the calling of speakers to Mr. Speaker. I carry out Mr. Speaker's wishes in this matter. He has been to immense trouble in this debate to ensure that all shades of opinion are heard. There are still three days to go so it is impossible to judge the matter yet. But the hon. Member may be sure that Mr. Speaker will carry out his duties as fairly as it is possible for them to be carried out.
§ 8.42 p.m.
§ Mr. Neil McBride (Swansea, East)
In this debate, which is of unique importance to our country, a barrage of propaganda unequalled in our history 1563 has been used by the Tory Government to try to sway the British people to support our accession to the Treaty of Rome, in spite of the fact that they have not been able to secure any amendments to the Treaty.
Every responsible commentator has observed the amazing imprecision in the White Paper, which has been succeeded in the shortened version by an even more deliberately vague statement, if that is possible. For a long time, the Government gave the British people little information, but they have now decided to woo the people.
In paragraphs 1 to 66 of the White Paper, they are almost lyrical, but in paragraph 45, dealing with a matter of supreme importance to Britain—the opportunities which we will have in the Common Market and the question of how industry will increase sales—the Government say that they do not believe :… that the overall response of British industry to membership can be quantified in terms of its effect on the balance of trade.The Government will not, or cannot, say what figures they have. This is the weakest link in the case.
The Prime Minister says that assumptions are made, but they are always made on some basis of reckonable cost. Nothing like this has been given to the House. The Government are in effect saying to the nation, "Trust us." I submit that the nation will not trust them in this respect ; the British people are overwhelmingly against entry.
Paragraph 1 says :The prime objective of any British Government must be to safeguard the security and prosperity of the United Kingdom and its peoples.But in the absence of any quantified statement of the benefits accruing to our country on accession, it is well to remember that trade between the E.E.C. and the United Kingdom is increasing and has increased two-and-a-half times in the last 10 years.
The Tory Government must have some idea of the extent to which the benefits, if any, will come to the United Kingdom. The Government must tell the people that they have agreed to sign without securing one amendment, thus completely surrendering our position.
1564 I have the honour to serve a constituency in South Wales and I regret that the White Paper does not say a word about Wales. Further, the Secretary of State for Wales is not in his place. I put it to the Chancellor of the Duchy of Lancaster that this is a studied insult to a nation to which I do not have the honour to belong by birth but in which I live and serve.
No facts and figures have been given to the Welsh people to enable them to form a judgment on this issue. As I told the Secretary of State for Wales on Monday, these facts should have been given, because officials of the Welsh Office went to Brussels and secured reports. Why have not these reports been presented to the Welsh nation?
It is undeniable that in the E.E.C. industry has gravitated towards the centre. We have heard a lot about the Italians benefiting from the regional policy of the Community, but it is clear that the industrial boom is dead. The people are moving north. There are no industrial development certificates or negative controls, so that if an industrialist cannot, for one reason or another, send a factory to one area, he will go to another E.E.C. country. Belgium has recently been hauled before the Commission for interfering with the Community's rules by passing its own laws relating to regional policy.
I am not making a doctrinaire assertion but stating fact when I say that under the Conservatives, Wales is finding it diffi-cut to secure employment. Closures are occurring with amazing frequency in the Principality. If, by mischance, we enter the E.E.C, the people of Wales will look to the future not with confidence but with a great deal of apprehension.
The position would be made even worse because we would have to subscribe to the Werner plan for a common currency. The organ of the Community, "European Community", makes it clear that member States, of which we would be one, are not able to control their regional policies, and the Chancellor of the Duchy knows that only too well.
§ Mr. McBride
It is not rubbish, though that is one subject in which the hon. Gentleman may be expert.
1565 Under the terms of Article 67, we would have no control over the outflow of capital and, as a result, Wales, being on the pheriphery of an enlarged Community, of which we would foe a member, would be in a disadvantageous position because industry would gravitate towards the centre, towards the Paris area, and, as investment would decrease in Wales, so industry would be attracted away from the Principality.
We in Wales have long memories, particularly of unemployment and the hardships it brings. If I am asked what I know about unemployment, I reply that I was one of the 3 million who suffered from it. This would be a great worry to the Principality. I do not want to see the country in which I live and work become like parts of Italy, without work or hope.
In another regard, Wales has a very real fear in the years immediately after entry. We are not unmindful of the words of the Secretary of State for Trade and Industry, who said—and this has been confirmed by a survey by one of the big banks—that there would be a serious downturn in trade. We believe that this could be harmful and the consequences in Wales serious. We should not be immune from them. We would suffer severely, and serious unemployment on top of the highest level of unemployment for 24 years would occur.
§ Mr. John Hall (Wycombe)
I am not sure how the hon. Member arrives at the conclusion that there is likely to be a serious downturn in trade when most of our major industries welcome the opportunity of going into the Market because they think that it will increase their trade.
§ Mr. McBride
A famous personage said yesterday, I think, that industry in Britain was creaking. More importantly, an article in the Financial Times questioned whether British industry was able to meet the sudden, severe and savage competition that would immediately follow our joining.
We in Wales have a right to ask what industries or sections of industries will have advantages conferred on them by entry into the Common Market. So far, we do not know. Perhaps the Chancellor of the Duchy can tell us how Wales will fare under the terms of the European 1566 Investment Bank, about which nothing has been said but which we shall have to finance with £187½ million and an initial contribution of £37½ million. Although the money may not leave this country, it will be under the complete control of the European Investment Bank, which provides loans for economic development, including finance for road construction and factory building.
The White Paper declares that after accession to the Treaty of Rome, development projects in the United Kingdom will be eligible for assistance from the Bank. To what extent will they be helped? What industries will benefit? How will this affect Wales? Perhaps we can be told. Wales is part of the United Kingdom and a development area. How will the Principality benefit?
I have spoken only about the effect upon the region in which my parliamentary constituency is located. I am conscious that generations of workers could be affected. We have not been told anything. Tonight, therefore, in no still, small voice for Wales, but in a voice of indignation because we have been denied the information, I ask that it be given to the people of Wales so that they can look at it, assess it and decide whether this is good or bad. In my view, it would be disadvantageous for the Principality if by any mischance we joined this inward-looking organisation.
§ 8.55 p.m.
§ Mr. Harold Lever (Manchester, Cheetham)
It might be very well if I began by saying that I am speaking from the Opposition Front Bench and I intend to express my personal views in this debate—[HON. MEMBERS : "Oh."] I will explain why this is in a minute. [HON. MEMBERS : "We know."] I am not speaking on behalf of former Cabinet colleagues, or about what they did, or were likely to do. I must confess that I envy those of my other colleagues who are able to make these confident assertions about the future behaviour of their colleagues. I must confess that I never found my Cabinet colleagues quite as predictable on all other matters as did some of my right hon. Friends.
I also want to say that my freedom to speak tonight from this Front Bench is the clearest evidence giving the lie to the complete nonsense that is being put 1567 around that the opposition within my party to entering the Common Market derives from a desire to exploit this subject for party political gain. If we had intended so to do, it would have been quite inconceivable that a committed pro-Marketeer like myself would have been invited and allowed with complete freedom to express his views from this Front Bench.
Admittedly, it is known that the party has a division of opinion, but it is even suspected that there is not total unanimity on the other side about this question. That is nothing to be ashamed of. On the contrary, I am exceedingly proud to have the right to speak from the Opposition Front Bench at the invitation of the Leader of the party who, it is alleged, is anxious to make party political gain out of the Market issue. It is hardly the right way to set about doing that to put up a pro-Market speaker from the Front Bench who necessarily by implication, without attacking him personally, will be expressing views which in some respects differ fundamentally from his own on this question.
It would be as well if I took the time of the House for a moment to say a word about this whole question, because we are going to discuss it at fair length before we are finished and we are to discuss it again in October. It is too bad that hon. Members who are experienced in politics and who know what the truth is in these matters should project to a public less sophisticated in these matters totally unfounded suggestions about what conduct and speeches in the House mean on particular occasions.
The first thing that is projected from many Conservative newspapers is that in some way, if there are some hon. Members who either keep silent on this issue rather than speak in favour of the Conservative Government's proposals, or who may at some time vote against the Conservative Government's proposals because of a desire to keep party unity, this necessarily means that they are humbugs or are in some way guilty of cynicism and a desire to gain party advantage, when we all know that the question of voting very much depends on each individual's particular commitment on a particular issue ; it depends on 1568 his conviction ; it depends on his commitment.
The maintenance of a party's unity is not as ignoble objective, least of all on the part of its leader. If we did not have some semblance of party unity, the House would not work and no Government could run the parliamentary democracy of which we boast so much. Rigid party discipline and a coercive discipline that prevented hon. Members when they had a deep conviction or a commitment on a subject from voting against the party Whip, or abstaining, would be intolerable, too. It is absurd that hon. Members opposite taunt some hon. Members on this side about their concern for party unity. I wonder what the right hon. Gentleman the Prime Minister would do if he could not count on party unity as a means of bringing into the Lobby on his behalf as supporters of the Common Market those whose convictions went the other way.
We have had enough of this kind of humbug. I hope that in the days before us we do not get engaged in rather pointless talk. On the whole this House works well because we each believe that these questions are best left to the individual conscience of each hon. Member. When that hon. Member has exercised his conscience most of us believe, however hard it is for us to take it if it does notsuit us, that he is acting on balance for what he in his conscience judges to be the national interest, which includes in some people's minds—although it seems amazing to some of us on this side of the House—keeping the Tory Government in existence.
I can understand that some hon. Gentlemen opposite and even, dare I whisper it, right hon. Gentlemen opposite in the Government itself, will vote against their conviction, in favour of the Market, because on balance they believe it to be in the public interest that they should support the Tory Government.
It is equally reasonable that some people on this side of the House, depending on the degree of their conviction and their comitment will decide that their party loyalty is greater than their conviction or ranks higher even than this great issue. That is a matter for each individual hon. Member in his conscience to decide, and no one ought to be free with taunts of insincerity, least of 1569 all to the party leader who has this not ignoble objective of keeping some sort of unity in the party on this great issue. No one should taunt my colleagues. I have already said that I do not believe that those who have spoken against, and will speak against, entry into the Market, unlike myself who am strongly and heavily committed to the idea of entering the Market, should be assumed to be some kind of "Little Englanders" such as those whose letters to the Press disfigure so much of this debate.
Some of my colleagues have a very real conviction, wrongly judged in my view, that their wider obligations are imperilled by entry into the Market. I take only one example. My right hon. Friend the Member for East Ham, North (Mr. Prentice) is unsympathetic to the Market, partly because he, wrongly, again in my view, feels that it is prejudicial to the duty we owe to the developing countries. We bring the House into disrepute if we talk about such people as my right hon. Friend as a "Little Englander" just because he does not support entry.
It disfigures and debases the level of our debate that we should so describe a man who passionately and sincerely holds those views. Although I speak with complete freedom as to my own views I can say with sincerity that those of my colleagues who come to an opposite view are as much entitled to hold it—and with the same passionate firmness—as I hold mine.
I hope that people will not resent it, but in the nature of this debate it would be unwise of me to attempt to cover the whole range of the White Paper. There will be others from this Front Bench who will deal with other aspects. I want to concentrate on one or two obvious and blatant omissions from the White Paper that cause me, and I am sure many of my colleagues, concern. The White Paper talks in general terms of the economic growth which will come to us to more than offset the balance of payments obligations.
I have made my position clear and in case there is any doubt I begin by saying that I believe that if the opportunities are seized, as we must seize them—the opportunities offered to us by entry into Europe—the extra burden on the balance of payments will be many times outweighed by 1570 the successes open to us. It is not enough in the White Paper or in the House to say that ½ per cent. more growth over five years will cover twice the cost to the balance of payments. This is economic balderdash on the basis of the strategy we have so far pursued. What we ought to be saying, if we intend to continue the kind of economic and financial strategies we have had in the past, is that ½ per cent. less production per annum than we might otherwise have had will cover the balance of payments costs. On past strategy, the balance of payments has been the constraint on growth, and it is approaching the scandalous, in view of the many debates and comments in the House about the balance of payments cost and the great growth we must have to pay for it, to leave it at that and not to tell us what strategy will be adopted to achieve the desired end.
If the right hon. Gentleman says that we shall cover the extra balance of payments cost by sustained economic growth, does that mean that entry to the Common Market is a commitment to a sustained growth policy? If it is not, the argument is a straight cheat. If the argument is that ½ per cent. extra growth will pay for it, if we do not ensure that we get it and, in fact, we do not get it, I say here and now who will pay for it—the people of this country through their standard of living. It is therefore of vital importance that the people of this country should be told not merely that the Government are pledged to sustained growth but how they will achieve it. We have never had it in the post-war period. We have never had a period of sustained growth taking up the productivity increase year by year, thus encouraging more investment and more confidence among businessmen to invest and to deploy their plant.
Therefore, if this argument has any meaning except a kind of fraudulent sales talk meaning, if it has any real meaning, which I give it, it means that we have, first, a commitment to sustained growth and, secondly, a commitment to abandon the economic and financial strategies of the past because without the balance of payments burden, which could be anything—£300, £400 or £500 million—the old economic and financial strategy did not give us sustained growth even with lesser balance of payments burden.
1571 I wish to hear from the Minister why he says that we shall have sustained growth in future to pay for the extra balance of payments cost and whether it means, as I suggest it must mean, that he has abandoned the old strategy. If he is keeping the old strategy, he cannot cheerfully say to the House, "We shall achieve growth because everybody will be smartened and sharpened up by going into the Common Market", because that will take a considerable time. He must tell us why he has abandoned the old strategy.
It is sinister that there has been complete silence on this matter. The real question is how we get from the position that we are now in to the position where we have a soaring gross national product out of which we readily shift the £500 million—which is not a lot once we have the growth—to covering the balance of payments cost. But before that is not a lot we must have the sustained growth, not halted by the balance of payments pressure. It is a question of getting from A to B. It is all right when we are there, but we must be told how we get there.
I have never heard from the Government—and it is not in their White Paper—how they propose to do it. I have no doubt that it can be done, but what troubles me is whether the Government have even given a thought to it. They have not given an iota of evidence that they realise the questions involved or that it means ending the old economic and financial strategy. It means saying, "We shall not again employ the financial strategy which allows the marginal balance of payments tail to wag the whole economic dog." A deficit of £200 million on current account is allowed and has been allowed to mutilate ongoing production of £35,000 million or more, or nearly 200 times the deficit and mutilated that production's ongoing growth, because of the balance of payments problem.
The Government must have thought about it and we ought to be told how we are to get from point A to point B. None of us here has much doubt that if we get rapid growth without a sharp halt as in the past through balance of payments problems it becomes relatively easy to shifting the required amount of goods to cover the balance of payments cost.
1572 What I want to ask the right hon. and learned Gentleman, if he has given any thought to this subject, and I am sure that he has, although neither he nor any of his right hon. Friends have given any public evidence of this, and if they have done good on this subject they have done it by such intense stealth that not even their most ardent supporters on the Common Market issue on either side of the House has heard the faintest whisper of what thought and effort have gone into the problem—what I want to ask is, are we going again to continue as in the past, if we meet with a temporary, a year or two, balance of payments deficit on current account, to tell the people of Britain that they have not been energetic enough, or something of that sort, and that we have to put the brakes on again? All I can say is that if that sort of process is applied after our entry into the Common Market the not inconsiderable difficulties with the balance of payments will be far worse than all the squeezes and stops of the past.
It is wholly unnecessary. The question then arises, if we are to have this new economic strategy, how will it work? The answer is very simple. Our partners are not going to allow an imbalance of trade to mutiliate the whole massive production of our country in the future at is has been mutilated in the past. We are the only country which can be called a land of stop-go, the only country which has done this every few years. Why have we done it? For two reasons. First, because of our antiquated external financial posture. The second is related to the sterling area system, unlimited capital investment in the sterling area or closely related to the working of the sterling area, and even with restrictions placed on that it is still virtually a free movement area. If there is a massive investment on capital account and our basic balance comes into deficit, the Government say to the people of this country, "You are living beyond your means."
It is not entirely obvious to the people of this country when a number of their institutional investors have placed money in large amounts in Australia that that is evidence that they have been living high on the hog. It is not immediately apparent to them. I am delighted that when the Prime Minister had his intimate tête-à-tête with M. Pompidou he seemed at last to have got down to this 1573 and agreed that our external financial posture should be in somewhat better order, so far as the sterling area is concerned, in the reasonably near future. But the idea ought to be broadened to make it quite clear that our strategy can never again accept stop-go. If it does the additional burden on the balance of payments will make our situation worse than ever it was before.
I believe that if the Government will show the imagination and courage required with the greater opportunity to solve the problem of ending stop-go they can maintain and sustain growth more surely than every before. Why do I say that? Because the basic balance of payments includes capital account. In the past capital account has been usually in deficit.
Many of my hon. Friends are disturbed about capital movements into Europe, but if the Government were slack on these matters their partners in the Common Market would call a halt to the movement and the Government would take under closer control the whole of the capital exit, so far as the sterling area is concerned, and, as far as Europe is concerned, they have got safety clauses which enable them to put the brake on capital investment when our balance of payments situation needs it. If we are, as we tend to be, in the British cycle of trade, in deficit for a year or two on current account, we can make the basic balance good, very likely, by attracting capital into this country In the years when we are in surplus on current account we can, of course, make good with a net outflow of capital.
I hope that none of my hon. Friends will remain in terror about the outflow of capital. Quite apart from the safety clauses, they are thinking in terms of 18th and early 19th century mercantilism. They imagine that if I write a cheque for £10 million to invest in Paris——
§ Mr. Lever
I am speaking very notionally. If one of the right hon. Gentlemen opposite writes a cheque for £10 million to invest in Paris, that remains a book entry until the Government decide to do something about it. When it comes home to roost and dollars, French francs or whatever it is are needed for it, if the Government, because the capital 1574 account is £10 million in deficit, start to squeeze the domestic economy, we pay for a capital outflow by deterioration in our industry and the capital available to it. But it need not be so. There is no reason why there should not be a vast flow to and fro to the benefit of all of us. One must realise that there is mutuality in these things. We must not just say that a capital investment going out is bad for us or bad for them because we are equipping their industries. The answer is in the free flow of capital and the way in which factors of production are organised to bring the richest reward to all of us ; and the freer that is, the better it is.
The Prime Minister smiles. He thinks that I am writing a Conservative Central Office pamphlet. I do not like to wipe the smile off his face because he looks so well and happy these days, but what we really need is a Labour Government to take control of the social result of this investment of capital in production and see that it is properly directed not to withdrawing school milk from children under seven, not to the obsessional removal, helter-skelter, of so-called deformities in rents by exacting rents from people who are already hardly pushed by the inflationary situation in which we find ourselves but to using this greater wealth for the good of the community and with greater regard for social justice than we have ever seen before.
But we must first get more wealth, and while the Tories are in, even if we get more wealth, it will not go where we should like it to go. But that should not excuse the Labour Party from seeking the same target of greater wealth, greater production and a greater availability of resources to use for the purposes of social justice and social amelioration.
§ Mr. Lever
My hon. Friend does not believe in mixed economies. So much the worse for my hon. Friend, because the mixed economy exists, and will until the democratic political will to change 1575 it occurs. I hope it will develop and become more progressive. Until there is the political will to change it, that is what we have to work with. It is no good my hon. Friend saying he likes it or does not like it. It is there and we have to work with it.
§ Mr. Heffer
Is my right hon. Friend aware that that is a most pessimistic outlook from the Socialist point of view? There is another way which up to now this country has not tried. It is about time a Labour Government began to put into operation its fundamental principles and use the alternative methods that are available.
§ Mr. Lever
I am not opposed to that, but one starts from a mixed economy. That is what one has to develop and work upon in order to make changes, and one makes them with the assent of the electorate so that one is allowed to continue to make more changes.
The first thing that will gain the assent of the electorate is to make a success of the mixed economy. At the same time one must see that its products are not directed in the way adopted by the present Government with its weighted tax reliefs and so on, but directed to the poorer people and the working people of our land. [Interruption.] It is no good the Prime Minister saying, "Come off it" or whatever it was he said—or, as lawyers say, words to the like effect. The fact remains that the tax reliefs which have been granted—and I am all in favour of tax reliefs—have been granted without any regard at all to the low-paid workers and the worse-off section of our society.
The Government are pursuing the broad policy of looking after the very hard cases—the Government are not callous, and I am not suggesting they are—but the lower-paid workers, the people in the middle, get nothing out of tax reliefs. This is the point I want to make in relation to the Common Market.
When we enter the Common Market what are the Government going to do about the lower-paid workers in regard to the impact of rising prices and additional cost-of-living charges? The right hon. Gentleman the Prime Minister is entitled to say that he has pledged himself to look after the old-age pensioners, 1576 the unemployed, the sick and the like. I am sure he means that and will honour it. But that is not the end of the matter. This is a characteristic blind spot of the Government. They see the very poor and are prepared to help him ; they see the very rich and are prepared to help them, too. I do not dislike the benign smile the Prime Minister exchanges with me in this regard. But why do they have such a blind spot for all the people who, though not at poverty level at the very bottom of the scale in need of public assistance, are totally neglected and will have to meet the impact of rising prices when we enter the Common Market?
What are the Government going to do about those people? Are they going to say, "They had better become smarter, more talented, more energetic, more efficient", or are they going to leave such people in an extremely difficult situation, especially as increased rents bear upon them? If people earning £18, £19, £20 or £22 a week wish to earn an extra pound or two, they gain only a half to a fifth net of that sum because of the impact of the social security reliefs and the taxation system. The right hon. Gentleman ought to put this right. He should say that he will protect those people when we go into the Common Market. What is missing from the White Paper——
§ The Prime Minister
The right hon. Gentleman is making an important point which concerns all Governments, and which certainly concerned the previous Chancellor of the Exchequer. What he has said is that there are those who are in receipt of social service benefits, and they can be helped and the level at which they receive benefits can be raised. Similarly, he has referred to those who are having to pay taxation, and from this point of view that situation can be changed. Surely the problem which has faced both Conservative and Labour Governments is that there is a group of people just above the social security level who at the moment do not pay any sort of taxation. No Government up to the present have succeeded in finding a way of helping that particular group, but it does not need to be exaggerated as a group.
§ Mr. Lever
There is a more general problem than that. I was raising that problem as the sharpest point of the low-paid workers' anguish, if I may so put 1577 it. However, there is a much broader group of lower-paid workers who cannot stand the impact costs of going into the Common Market unless the Government do something about the situation. I should like to hear from the Government—if I may use economists' jargon, which I hate—about their macro-economic strategy which tells us what will be the new outlook which, despite the fact that we shall be bearing a heavier burden on balance of payments, will make us escape from the stop-go situations of the past when we had a lower balance of payments burden. Secondly, I want to hear about what economists call the micro-strategy. What is the right hon. Gentleman going to do about the lower-paid citizens who will have to meet the impact costs?
I conclude on a more general note. Some of my hon. Friends are troubled that by going into Europe we shall build up a third Power bloc—or a fourth Power bloc ; there are three in being at present. I prefer to call it a grouping rather than a bloc. "Bloc" has a sinister connotation. I always use words to give a meaning to the surrounding area that is consistent with my thoughts. That is why, when anyone talks about a referendum over the Common Market, I always talk about plebiscites. Of course, I am against them.—[Laughter.] I talk about groups, rather than blocs, because I mean power groups. "Blocs" gives the impression that they are out to have a go at each other. That is not what is likely to happen, as one finds if one studies the modern world.
My hon. Friends are worried about this aspect and I understand their anxieties. But there is a European grouping in existence, whether they like it or not. It will stay in existence and it will develop, whether or not they like it. I beg them to try to understand why it came into existence. It came into existence because the European countries of ancient history and tradition found themselves without a voice in the world, without any influence and without any means of organising co-operatively to defend their prosperity, welfare and safety. In effect, they were regaining their inability in a world of super Powers after the suicidal devastations of the war.
1578 That is why they formed this grouping. It has been very successful and it is developing. It is not the new Jerusalem. I do not suggest that we shall die of starvation if we do not join them. But cannot my hon. Friends who have this worry about grouping appreciate that this grouping will benefit if Britain enters? If they are worried about it being inward looking, is it likely to be more inward looking or more liberal if we go in, under this Government or, even more so, when the Labour Party return to power?
If we do not want this European grouping to be denied the influence of Britain and the benign impact of our ideas and sense of world responsibility and the like, we enter it ; otherwise, we stay out. But the group will still be there.
People sometimes think that going into this grouping is a gamble. I beg my hon. Friends to realise that sometimes it is a bigger gamble to stay as one is than to make the move which all history seems to be urging us towards, that is, to join this grouping, to seek to influence it, and to seek to underpin the welfare and prosperity developing within it with political ideas of which we are rightly proud, at the same time ensuring our welfare, our future safety and our right to have a voice in the world in the interests of the British people as well as the people of all Europe.
§ 9.28 p.m.
§ The Chancellor of the Duchy of Lancaster (Mr. Geoffrey Rippon)
The right hon. Member for Manchester, Cheetham (Mr. Harold Lever) has made a speech which was both cheerful and stimulating. As he will appreciate, much of what he had to say about questions of economic strategy will be best dealt with by my right hon. Friend the Chancellor of the Exchequer, who has done pretty well this week in that regard. I must deal primarily with the issues arising in the negotiations and the terms we have agreed.
I shall have to deal, perhaps at some length, with what the right hon. Gentleman the Leader of the Opposition had to say about the terms. He made an equally characteristic speech. He uses words to explain everything—except himself.
1579 On 10th May, 1967, as we know, the House approved by an overwhelming majority the statement of policy contained in the then Prime Minister's statement of 2nd May, published as a White Paper. We did not take a decision simply to negotiate. We approved that statement of policy, which contained not only the Government's decision to apply for membeship of the E.E.C., the European Coal and Steel Community and Euratom, but a declaration of the basis on which the Labour Government had reached what it rightly termed "an historic decision which could well determine the future of Britain, of Europe and indeed of the world for decades to come."
Above all, the statement made it clear that, whatever the economic argument,… the Government purpose derives above all from our recognition that Europe is now faced with an opportunity of a great move forward in political unity and that we can—and must—play our full part in it.As the then Prime Minister, now Leader of the Opposition, said on 17th May of that year,I doubt if any decision of Government or Parliament has been preceded by so thorough, so deep, so searching an investigation of the issues involved as the Government's decision of the 2nd of May.We all recognise that there are right hon. and hon. Members on both sides of the House who never supported that decision. One thing is certain. It does not lie in the mouths of members of the Labour Government in 1967 to say that they did not know what they were doing, or that there was no commitment in principle.
I turn now to the negotiations which had to precede entry. These were set out in the White Paper (Cmnd. 3345), which gave the text of the then Foreign Secretary's statement in the W.E.U. Council on 4th July, 1967. It is worth recording that as late as 19th February, 1970, the previous Government confirmed in this House that that remained their position.
The 1967 statement, reaffirmed explicitly in February 1970, made it clear that the then Government accepted, as we do, all three treaties, subject only to the adjustments required to provide for the accession of a new member ; for example, our participation and voting in the Community's institutions and our contribution to its financial expenditure.
1580 In the case of Euratom, nothing more was sought than a 12-month interim period. That we have negotiated.
In the case of the European Coal and Steel Community, only a limited period of transition was sought. It was stated expressly thatThereafter we are prepared fully to implement these two treaties and all the arrangements made under them.My right hon. Friend the Secretary of State for Trade and Industry can discuss these arrangements in fuller detail.
What I have negotiated is transitional arrangements on terms which I set out in my statement to the House on 24th June. This was not a difficult part of the negotiations. From the earliest days, both our nationalised industries have been associated closely with the European Coal and Steel Community. The understanding about that is clearly shown by the Community's confirmation that it has no intention of calling in question the size or legal position of the British Steel Corporation or of the National Coal Board. That was not part of the negotiations, but I was glad to get that statement confirmed because it caused doubts over here. It also agreed to defer discussion on pricing policies until after we were members.
The Leader of the Opposition, the Leader of the Liberal Party and others have referred to regional policies and to stories that the Community is proposing to adopt new regional policies which might cause difficulty for us. Those stories do not give an accurate impression. But my right hon. Friend the Secretary of State for Trade and Industry will deal with the detailed points which the Leader of the Opposition raised in regard to the specific problems which are causing anxiety.
The Government remain confident, as the last Government were, that membership will not prevent us from continuing to carry out a varied and effective regional policy on a national basis. As the enlarged Community develops the more elaborate regional policy on a Community scale, we shall be able to offer our expertise and experience to make sure that it is a sensible policy, beneficial to us as well as to our fellow members.
Already, as soon as we join, there will be access to E.C.S.C. funds and to the Economic and Social Fund, and there 1581 will be the possibility of help from the European Investment Bank, which I can assure the hon. Member for Swansea, East (Mr. McBride) will be available to Wales and to the other regions. We shall be represented fully on the board of the Bank. In the regional sphere, we shall find that we shall lose nothing and have the chance to gain much by membership.
The Leader of the Opposition has reiterated his belief that if we could get the right terms for entry, entry would be good for Britain and for Europe. But he has expressed dissatisfaction, as he is entitled to do, with the terms as he says he now understands them, notably as far as concerns the costs of joining, capital movements, sugar and New Zealand. I hope to be able to convince the House that his various anxieties, as he has expressed them, about the results of the negotiations are unjustified and that the terms negotiated are fair for us, fair for the Commonwealth and, be it added, fair for the existing members of the Community.
I will first deal with the agreement we have reached upon our contribution to the Community budget, which is central to the balance of payments issue. Here two things were clear from the outset and accepted by the Labour Government : namely, that it would not be possible to seek changes in the Community budget system any more than it would the common agricultural policy.
§ Mr. Peter Shore (Stepney)
Will the right hon. and learned Gentleman attempt to justify that last statement, which is an interesting assertion?
§ Mr. Rippon
The right hon. Gentleman will find in HANSARD of 8th May, 1967, c. 1066, a statement by the then Prime Minister :… we must be realistic in recognising that C.A.P. is an integral part of the Community… 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 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."—[OFFICIAL REPORT, 8th May, 1967 ; Vol. 746, c. 1066.]Then the White Paper of February 1970, paragraph 43, states :…in the negotiations it will be necessary, not only to settle our starting contribution to the Fund, but also to settle the transitional arrangements under which we approach paying 1582 our full share of the recently agreed Community financing arrangements which will be changing from year to year.
§ Mr. Shore
The right hon. and learned Gentleman will realise that the first quotation which he made was from the 1967 statement, which was about three and a half years before the Community agreed to the financial system about which I asked him. As regards that curious sentence which he quoted, or, should I say, plundered, from the White Paper of February, 1970, if he has it in front of him, will he read the last sentence of the following paragraph on the same page? He will find that it contradicts his own selected quotation.
§ Mr. Rippon
I am afraid that I have not got that with me. It is all on the record. I think that I have said quite enough to make it clear that the previous Government accepted the common agricultural policy and the Community budget system.
§ Mr. Shore
I have the 1970 White Paper here. The last sentence of paragraph 44 reads :They have reached agreement in principle on arrangements for meeting the cost"—that is the cost of the C.A.P.—but their application in a reasonable and equitable way to our situation must be a matter for negotiation, as has always been recognised.Will the right hon. and learned Gentleman now withdraw?
§ Mr. Rippon
The 1970 White Paper indicated what that system was. It must be remembered that that 1967 statement, which was the basis of the negotiations, was reprinted in 1970 and was expressly stated to be the basis of the negotiations at that time. That is plainly set out in HANSARD of 19th February, 1970.
§ Mr. Rippon
The objective, therefore, in the negotiations was to agree on reasonable transitional arrangements. The White Paper, in paragraphs 91 to 96, sets out what has been agreed. [Interruption.] Hon. Gentlemen may say that they do not think that the terms are as good as we asked for initially, but obviously in any negotiations there has to be give and take not only over each issue, but as between different issues. I have no doubt that if we had ignored 1583 the effect on, for example, the terms we wanted to achieve for New Zealand, we might have been able to get agreement to our initial contribution being reduced by some amount ; but I do not believe that the House would have wanted the Government to have acted in that way.
I think that in what we have negotiated with the Community as regards our arrangements during the transitional period, with full acceptance of the Community finance system, we have not done too badly. The terms envisage a possible net contribution to the Community budget of £100 million in 1973, rising gradually to a possible £200 million in 1977, after which there will be a further period of two years during which the size of our contribution will continue to be limited. Those are terms which meet our basic negotiating objective which we have stated from the outset, namely, to avoid too large a contribution at the beginning, when the dynamic effects of membership will not have had time to take full effect, and avoid, also, too abrupt a transition at the end. I think that they are about the best that any impartial observer expected us to get.
§ Mr. Harold Wilson
I do not really want to interrupt the right hon. and learned Gentleman, because I want him to have plenty of time to answer the questions that I put this afternoon, but would he tell the House what it was that the Chancellor of the Exchequer, when he was in this position, said it would be impossible for any Government to accept in this context and which he has now accepted?
§ Mr. Rippon
I do not recall anything of that kind. It has been perfectly clear from the outset what we would seek to negotiate. I set out the position of our negotiations on 16th December last year. I said what we hoped to get. I said it was fair and reasonable, that the Community might think it too fair and too reasonable, and that that was what negotiations were all about.
Of course the figures, especially for the later years, are speculative in the sense that the size and shape of the budget may change as a greater share is devoted to regional, industrial and social policies, but what is important is that the balance of payments cost in the early years is 1584 measurably tolerable, and thereafter, when other factors come into play, we can expect industry to be reaping the positive and substantial benefits of access to a permanent, assured and greatly enlarged market.
It is for my right hon. Friend the Chancellor of the Exchequer to deal in greater detail with the general effect on the balance of payments. It is, as the right hon. Member for Manchester, Cheetham said, a matter of seizing the opportunities. This is not a matter which I could negotiate but I believe, as the right hon. Gentleman the Leader of the Opposition used to say, that in the short-term, if those opportunities are seized, the effect on the balance of payments should not be negative, but exceeding positive. One cannot give mathematical precision to that. It is much better for the House and the country to accept the truth that the laws of economics are statements of tendencies expressed in the indicative mood, and not ethical precepts in the imperative.
If we are to consider costs, let us consider also the cost of staying out. As the Leader of the Opposition told the Parliamentary Assembly of the Council of Europe in Strasbourg on 23rd January, 1967 :If we fail—I want this to be understood—the fault will not lie at Britain's door. But the cost, and above all the cost of missed opportunities, will fall, and in increasing measure, on every one of us.The hon. Lady the Member for Wolverhampton, North-East (Mrs. Renée Short) is concerned about the cost of going in in relation to prices. Let her take comfort from what the Leader of the Opposition said in the Daily Record on 9th June, 1970 :Any higher prices which result from membership should be more than counterbalanced by better exports, more jobs, and higher wages.
§ Mr. Elysian Morgan (Cardigan) rose——
§ Mr. Rippon
I turn to the question of capital movements about which the right hon. Member for Huyton (Mr. Harold Wilson) has expressed some bloodcurdling and false assertions about my having negotiated away all the safeguards against all sorts of horrors. As far as capital movements are concerned, the Labour Government 1585 made it clear in the 1967 White Paper, reaffirmed on 19th February, 1970, in paragraph 40, that they fully accepted the obligations of membership in this field, subject only to a transitional period during which we would bring our policies into line with the Community.
On 14th July I reported to the House the transitional arrangements which we had agreed both with regard to direct investment and to portfolio investment, and the right hon. Member for Huyton acknowledged in his statement on 10th February, 1970, at column 1081, that it was very difficult to give any meaningful estimate about capital movements, but my right hon. Friend the Chancellor of the Exchequer will be able to deal more fully with the questions of the impact of prospective exchange control safeguards as a whole.
What I can say, without fear of contradiction, is that no safeguards have been negotiated away. They are in the Treaty, and as far as the portfolio investment is concerned the Labour Government accepted that the problem of possible leaks to third countries would be dealt with ourselves under the provisions of Article 70(2) of the Treaty of Rome. That is in paragraph 41 of the 1967 White Paper.
As far as capital movements generally are concerned the Treaty expressly provides protective measures in Articles 73 and 109, and these are even now being employed by France, so it is nonsense to talk of safeguards being negotiated away.
I now turn to the arrangements made for the Commonwealth. I shall not go into all the details which are covered in paragraphs 97 to 122, and which show that we have been able to reach agreement with the Community on a wide range of issues of particular importance to the Commonwealth, notably on New Zealand, sugar and the primary products of the developing Commonwealth, and on the safeguards in regard to our existing patterns of trade with third countries. The way in which the Community has dealt with these matters shows that it understands the need to protect our Commonwealth ties, and to safeguard the primary products of the world.
1586 I fully endorse what the right hon. Member for Middlesbrough, East (Mr. Bottomley) said, with all his experience as a former Commonwealth Secretary, that this is not really a choice between the Commonwealth and the Common Market ; it is a question of reconciliation, and that I believe we have achieved. There has been some misunderstanding about the position we took up with regard to Australia, to which the hon. Member for Manchester, Wythenshawe (Mr. Alfred Morris) referred. As far as Australia is concerned, there will be an effective five-year transition period after 1973 for agricultural products such as mutton and lamb, canned fruit and dried fruit, all of which are protected by tariff in the E.E.C., and not by levy. The British market for Australia's wool is totally unaffected, being duty-free and levy-free.
As far as agricultural products subject to levy are concerned, we have had a quite specific undertaking with regard to trade with third countries, which I reported to the House on 17th May—that if circumstances arose during the transitional period in which significant volumes of trade risked serious disruption the enlarged Community would deal with the position. As far as can be seen at present the actual cases where problems might arise would be confined to sugar after 1974, butter, and certain fruits and vegetables.
Nevertheless, our agreement with the Community is not limited to any particular commodity. I can only reiterate that we have not in any way broken any promises as far as Australia is concerned.
I now turn to New Zealand. From the outset it has been understood that New Zealand dairy products posed special problems for which a special solution would have to be found. Here there is no question that we achieved far more than anyone expected right up to a few hours of the result. The details of what we achieved are set out in paragraphs 102–110 of the White Paper. I will not go over them again. Our objective and that of New Zealand was one of continuing arrangements, subject to review. That is what we have. Not permanent—we could not ask for permanent arrangements ; we have made that clear to New Zealand from the outset—but not limited to any period of time.
1587 There has been some discussion about how far the arrangements can be considered satisfactory to New Zealand. The statement by the Prime Minister of New Zealand on the review and the statement by the Deputy Prime Minister on the general position are on the record and I will not repeat them. But, as I said in the House on 24th June, I thought that I could fairly say that at the end of two days' arduous negotiations there was only one matter remaining which was of real concern to New Zealand ; namely, the prices formula. I then set out in detail the consideration that has been taken into account in this respect, and why New Zealand has argued for a formula which would have greater regard to the high level of recent prices.
If the Leader of the Opposition says that we should have negotiated a higher minimum price level he must modify his cry—expressed in such ringing terms to the Labour Party Special Conference last Saturday—that :Cheap New Zealand food is an essential part of the standard of life of nearly every family in Britain.
§ Mr. Harold Wilson
The right hon. and learned Gentleman has misrepresented me. Let him tell the House when I used the phrase about higher prices. I have not said anything about higher prices. This afternoon he referred to the 20-year agreement. Will he say whether President Pompidou accepts that?
§ Mr. Rippon
The right hon. Gentleman may be thinking about cheese. In respect of cheese it will be recalled that we made arrangements. [Interruption.] The right hon. Gentleman asked about President Pompidou. If he is not complaining about price arrangements, that was the only thing that New Zealand has expressed doubts about. It makes the right hon. Gentleman's case even more absurd.
In respect of cheese it will be recalled that we made arrangements for guaranteed minimum quantity to be reduced gradually to 20 per cent. in the fifth year. We do not think that there will be any great difficulty about the demand for New Zealand cheese in the years ahead, and that was the view of the Labour Government, which asked for no special arrangements for cheese. The 1588 House may be interested to know that Mr. Marshall had this to say in the debate in the New Zealand Parliament at the beginning of this month :In 1967 the British Labour Government 'without reference to us and without our approval' limited its claim for a special case for New Zealand to butter. Fortunately that application did not succeed. New Zealand was then able to persuade the Conservative Government to include cheese in its statement of claim.I would not accept any limitation on the transitional period for butter. [Interruption] I said that for butter there would be a continuing arrangement, subject to review, and the guarantee for butter and the detailed criteria for the review are written into the agreement, and the Leader of the Opposition should not go on pretending that they are not. The review provisions, as the Prime Minister of New Zealand said, are highly satisfactory, and this is what the review clause says :During the third year after the United Kingdom's accession, the institutions of the enlarged Community will review the butter situation in the light of the supply and demand position and trends in the major producing and consuming countries of the world. particularly in the Community and in New Zealand.The following considerations, inter alia, will be taken into account during this examination :
- (a) Progress towards an effective world agreement on milk products to which the Community and the other important producing and consuming countries would be parties ;
- (b) The extent of New Zealand's progress towards diversification of its economy and exports.The Community will seek to pursue a trade policy which will not frustrate these efforts.In the light of this examination, the Council, on a proposal by the Commission, will decide on suitable measures for ensuring, beyond 31st December, 1977, the continuation of the derogation system for New Zealand, and for determining the details of this system".[Interruption.] The Leader of the Opposition keeps on saying "Not 20 years." Of course not. I said that I would not accept 20 years. I said that it was an unlimited period.
§ Mr. Russell Kerr (Feltham)
On a point of order. Some of us, as opposed to some hon. Gentlemen opposite, regard this as an extremely important matter. Are you aware, Mr. Speaker, that we do not approve of the right hon. and learned Gentleman mumbling through his speech at such a rate of knots, with the obvious 1589 idea of stopping us taking in the points he is making?
§ Mr. Speaker
I do not think that that is altogether the right hon. and learned Gentleman's fault. There has been a certain amount of noise.
§ Mr. Rippon
I come to the question of sugar. The offer of association to the developing Commonwealth countries in the Caribbean and the Indian and Pacific Oceans made the problem of sugar easier to solve, but was not in itself sufficient. We therefore obtained a specific assurance from the Community, that they would have as their firm purpose a safeguarding after 1974 of the interest of the countries concerned, particularly as regards their exports of sugar. I did not accept that at once, and I wanted to consult with the sugar countries concerned.
The House will recognise that the very fact that more than a dozen countries from different parts of the world could send representatives to get round the table quickly to discuss and decide a common attitude to such a complex matter with far-reaching implications is in itself a testimony to Commonwealth ties.
Our objective was to obtain a firm assurance of a secure and continuing market in the enlarged Community for the sugar exports of the developing countries, members of the C.S.A., and this we have obtained. The details and the text of the assurance and of the communiqué issued after the Lancaster House conference are set out fully in paragraphs 111 and 112 of the White Paper, and I reported to the negotiating conference, as I promised, the text of the communiqué.
The right hon. Gentleman has accused me of being evasive, but I have throughout reported to the House exactly what happened. What has happened is that we have obtained an agreement with the Community, we have consulted the developing Commonwealth countries concerned and we have written into the record of the conference the understanding of what that agreement means in practical terms. The Commonwealth sugar producers—[Interruption.] Yes they have—[Interruption.] What I am saying is that the Commonwealth sugar producers have expressed their satisfaction 1590 with the safeguard offered them as a result of the negotiations. We have reached an agreement with the Community, and I have written into the record what we accept as the practical meaning of the agreement that we have reached. That is in the record of the conference——
§ Mrs. Renée Short rose——
§ Mr. Speaker
Order. If the right hon. and learned Gentleman does not give way, the hon. Lady must resume her seat.
§ Mr. Rippon
It would be out of place for hon. Members to be over-zealous in the pursuit of the sugar producers' interests by pretending that they know better than the sovereign Governments concerned. Lord Campbell of Eskan, the Chairman of the Commonwealth Sugar Exporters, wrote to me the day after our conference with the developing countries at Lancaster House about the settlement that we had then reached with them. He said :Had it been up to me and not to Governments, I personally should have accepted the settlement as satisfactory and constructive for the developing countries.And I got his permission to quote that letter——
§ Mr. Rippon
Against that background of agreement, can the Leader of the Opposition or anyone else say that we must stay out of the Community because we cannot provide the Commonwealth, New Zealand, and the sugar producers with better terms than they have accepted?
§ Mr. Rippon
I certainly hope that, by 28th July, the Leader of the Opposition will somehow manage to rescue himself——
§ Mr. Harold Wilson rose——
§ Mr. Rippon
I hope that he will manage to rescue himself from the toilof dropping buckets in empty wellsand growing old in bringing nothing up.
§ Mr. Harold Wilson
Since the right hon. and learned Gentleman has quoted Lord Campbell, may I tell him that I had a phone call this morning from his office, saying—I quote—" If Rippon quotes that letter I wrote him the day after, he is not entitled to do it, because Rippon knows the real facts."
§ Mr. Rippon
I utterly, totally and completely repudiate what the right hon. Gentleman has said. I got his express permission. What is clear is that what Lord Campbell of Eskan agreed—I said this quite clearly—is the settlement that we reached in Lancaster House on the terms of the understanding we got.
§ Mr. Rippon
We must remember that the Community too have their legitimate anxieties and interests to protect, but we cannot complain in any way of the treatment which they have given the Commonwealth.
1592 But of course we shall be talking in this debate not only about the price to be paid but also about the contribution that we can make to peace and prosperity at home and beyond our shores. We are not seeking to join the Community out of weakness, nor simply for what we can get out of it.
The truth is that Western Europe will not regain her eminence or even retain her effective independence unless we work together, and we cannot work truly together unless we are all in the Community together, pooling our resources and policies. Joining the Community is not our only choice, but it is our best choice. It is the best way in which we can honour our past and make a future worthy of our children. We have been too long in the wings, and it is time that we got on stage.
§ Debate adjourned.—[Mr. Weatherill.]
§ Debate to be resumed tomorrow.