HC Deb 14 June 1971 vol 819 cc14-8
17. Mr. Moate

asked the Secretary of State for Trade and Industry what is his latest estimate of the short-term adverse effects on the United Kingdom balance of visible trade if Great Britain should join the European Economic Community.

22. Mr. Marten

asked the Secretary of State for Trade and Industry what quantitative estimate he has made of the appreciable down-turn in the United Kingdom's external trading relationships he expects during the first years of membership of the Common Market.

Mr. John Davies

I cannot add anything to the estimate given by my right hon. Friend, the Chancellor of the Duchy of Lancaster, on 16th December last. Two separate sets of forces will be at work: on the one hand the impact of changes in tariffs and costs, and on the other the beneficial effects of integration into a wider market. All these effects will build up gradually, over a number of years, and I am sure that in the outcome the gains will greatly predominate.

Mr. Moate

I thank my right hon. Friend for the candour with which he recently admitted that in the short term there would be an appreciable down-turn in trade. Can he say how, if we have to carry this extra burden, he is able to forecast that the Government expect a rate of growth of 4 to 4½ per cent. during the transitional period of four years?

Mr. Davies

As I said in response to the Question, the dynamic effects will not only emerge much later in the game but will certainly start pretty early. I am convinced that the impact of membership can be counted upon from a relatively early stage to have a dynamic, stimulating effect on the economy generally.

Mr. Marten

Does my right hon. Friend realise that, if any terms are finally presented to the House, the remarks he has made about being sure that there will be a dynamic effect will be totally unacceptable, and that the Government in their White Paper must give a balance sheet and state the pros and cons, so that they can be properly analysed by economists all over the country?

Mr. Davies

My hon. Friend is being as dogmatic as he reproaches me for being. The truth is that there will be dynamic effects, whether he likes it or not. His judgment of the balance of them is, of course, his own affair.

Mr. Heffer

Does the right hon. Gentleman think that the upper limit figure of £670 million in the White Paper issued by the Labour Government is now a realistic figure, or should it be higher or lower? Will he give the House information on what the actual cost is likely to be?

Mr. Davies

As yet it is impossible to give an alternative figure. An alternative figure will be put forward, I feel sure, at the appropriate time. The evidence, such as it is up to date, indicates that the estimates made at that time give an unfavourable situation as compared with those that might be made today.

Sir D. Walker-Smith

With regard to the so-called dynamic effects, will my right hon. Friend repeat in this House and to this country what he said with such admirable candour in his Press conference in Stockholm to the effect that these so-called dynamic effects were not capable of assessment or measurement?

Mr. Davies

I have never failed to say so. It is clear at this time that they are not capable of accurate forward assessment; but that they are powerful and will predominate, I have no doubt.

Mr. Paget

Will the right hon. Gentleman tell us why the process of penalising our world trade for the benefit of a close Western Europe bloc should be described as widening our market?

Mr. Davies

I do not think that it is so described. What is described as widening our market is abating existing barriers between ourselves and this great, growing market across the Channel.

Mr. Michael Foot

Will the right hon. Gentleman say which are the factors which have led him to say at the Dispatch Box today that the figures he believes would be accurate are different from those that were earlier presented?

Mr. Davies

One factor, which the hon. Gentleman will himself have in mind, is the time scale. The years in which the February, 1970, White Paper was cast were quite different from those which are now within the transitional arrangements.

Sir G. Nabarro

If my right hon. Friend persists in his reply that the economic effects of entry are incalculable, how does he arrive at the conclusion that there will be this dynamic upsurge in the economy?

Mr. Davies

It is a matter of taking all the factors into account and making the best judgment that can be made. That is my judgment.

Mr. Biffen

On a point of order. In view of the unsatisfactory nature of that reply, I beg to give notice that I shall raise this matter on the Adjournment at the earliest opportunity.

23. Mr. Arthur Lewis

asked the Secretary of State for Trade and Industry whether he will publish in the OFFICIAL REPORT a detailed statement giving particulars in tonnage, sterling or description in goods of the estimate of the improvement or worsening of the United Kingdom's trade with each of the East European countries if Great Britain enters the European Economic Community on the terms known and available for entry on Friday, 21st May, 1971.

Mr. Noble

No such detailed estimates are available.

Mr. Lewis

Is it not strange that the right hon. Gentleman cannot answer such Questions as No. 17 or No. 22 or my own, or indeed any question which asks for facts and figures on how entry will improve our trade? Is it not obvious that the Government are trying to sell the people of this country a pig in a poke over the Common Market?

Mr. Noble

Whether it is possible to give figures in reply to any question must depend upon the question. If the hon. Gentleman would like to know, the present figures for the European Economic Community's trade with Eastern Europe are six times greater than our figures—

Mr. Lewis

That is not my question.

Mr. Noble

As to the annual rate of growth of trade with Eastern Europe, on both imports and exports the Common Market countries have been growing very much faster than we have.

Mr. Lewis

The Minister has failed to give an answer to my original Question and then he starts answering a question which he puts to himself and which is not relevant to my Question. Are we not now used to this from the Government, trying to kid and bluff and lie to the people?

Mr. Noble

The hon. Gentleman put down a Question which anyone who studies it for a second would realise had no sensible answer. I know perfectly well the hon. Gentleman's continuing interest in trading with Eastern Europe, and therefore I gave him the facts about the greatly increased trade between the E.E.C. and Eastern Europe compared with what we have been able to do in the past because I thought that that might help him in his argument.

Mr. Biggs-Davison

Is my right hon. Friend aware that some of us are concerned at the adverse balance of trade with Eastern European countries? Can my right hon. Friend say whether the Government's prospective partners in the European Community are doing better or worse than us in achieving a reasonable balance of trade with Eastern Europe?

Mr. Noble

At the moment there is a balance in favour of Eastern Europe largely because of considerable quantities of diamonds and other things from Russia. I have not exact figures for the Eastern European countries, but the E.E.C. are trading at a higher level and are, I believe, in better balance than ourselves.