EUROPEAN ECONOMIC COMMUNITY (Hansard, 18 March 1971)

§ The Chancellor of the Duchy of Lancaster (Mr. Geoffrey Rippon)
With your permission, Mr. Speaker, and that of the House, I should like to make a statement on the meeting with the European Economic Community which I attended in Brussels on 16th March.
We noted the progress that continues to be made in meetings at the level of the Deputies, and in discussions with the Commission, on a number of questions such as capital movements, fiscal harmonisation, the modalities of British participation in the European Investment Bank, the method of agricultural transition—

§ Mr. Marten
On a point of order. I apologise for interrupting my right hon. and learned Friend, but we cannot hear what he is saying. Could he please start again?

§ Mr. Rippon
If that is the wish of the House, I will start again.
With your permission, Mr. Speaker, and that of the House, I should like to make a statement on the meeting with the European Economic Community which I attended in Brussels on 16th March.
We noted the progress that continues to be made in meetings at the level of the Deputies, and in discussions with the Commission, on a number of questions such as capital movements, fiscal harmonisation, the modalities of British participation in the European Investment Bank, the method of agricultural transition, and the question of tariff quotas on certain commodities of importance to British industry. We noted also that exploratory contacts on the Community's common fisheries policy, which are without prejudice to our position generally on this issue, would continue between the Commission and the British Delegation.
I reiterated to the meeting the importance of the problems of New Zealand and of sugar from the developing Commonwealth. On the latter I recalled the extent of the dependence of these countries on sugar; the impossibility of their being able to diversify their production in the foreseeable future; the fact that this is not only an economic 1660 but a human problem with alternative employment to that in the sugar industry difficult to find; the need for certainty about future markets in order to assure the necessary financial credits; and the need to ensure the economic and political stability of the countries concerned.
On New Zealand I stressed that, as with sugar, we were not seeking special economic benefits for the United Kingdom but provisions for reasonable access by New Zealand for dairy products to the enlarged Community as a whole. Nor were we seeking permanent arrangements for New Zealand's dairy produce, but continuing arrangements subject to review. I emphasised the efficiency of the New Zealand industry, the extent of her dependence on those exports, and the difficulty in the way of diversification either of products or of markets.
I felt certain that on both these questions an acceptable and equitable solution was essential, not least in the interest of the enlarged Community's relationships with the outside world.
M. Schumann, speaking on behalf of the Community, said that it was accepted in principle that special arrangements needed to be made to deal with each of these problems.
I noted that the Community had proposed for agricultural transition a period of somewhat over four years proceeding in five steps. I recalled that we had said we needed a full five years for this process. We shall have to revert to this question.
I reminded the Community that we were still waiting for its proposals on the question of our contribution to the Community's budget.
I suggested that it was entirely reasonable and possible that we should reach agreement on the main issues at or shortly after the next Ministerial meeting. It was agreed that the Ministerial meeting already scheduled for 11th May should be extended to include also the afternoon of 12th May; and that a further Ministerial meeting might be arranged for later in May. Meetings of Deputies will in the meantime take place regularly to prepare the ground for these Ministerial meetings.
It was certainly disappointing that, in the absence of any proposals from the 1661 Community, it was not possible to make progress at Tuesday's meeting. But I think that the agreement that Ministers should meet for a longer period in May reflects the feeling of the Conference that real progress should be possible in that month, not only on the sort of issues I mentioned at the outset of this statement but on the major decisions which are crucial to the success of the negotiations.
The House will know that earlier this month I visited Ottawa and Washington for discussions with the Canadian and United States Governments, both of which have a close interest in our negotiations for entry into the Community.

§ Mr. Orme
When will the right hon. and learned Gentleman tell us something?

§ Mr. Rippon
On 5th March I met Canadian Ministers, including the Secretary of State for External Affairs and the Minister of Industry and Trade and Commerce, and discussed with them the specific aspects of the negotiations which relate to Canada. In particular we discussed the problems of the Caribbean. I emphasised our belief that an enlarged Community would be in the interest of all the members of the Commonwealth, and our desire to work for liberal trading policies towards third countries.
We also discussed agricultural questions, linked with the introduction of the interim levy scheme about which my right hon. Friend the Minister of Agriculture, Fisheries and Food made a statement to the House yesterday.
On 8th March I met members of the United States Administration, including the Secretary of State, the Secretary of Agriculture and the Secretary of Commerce; and, at the White House, Dr. Kissinger and Mr. Peterson. In Washington my talks covered much the same ground as in Ottawa.
I emphasised the need for satisfactory arrangements for the Commonwealth Caribbean countries in the event of our entry into the Community. I said that it seemed to me that association of these countries with an enlarged Community would be the best means of securing their interests, but that they should not, as I told the House on 22nd February, be obliged to choose in any way between Europe and the United States. The 1662 Americans are of course concerned about their trade with these countries, and I hope that I succeeded in allaying some of their anxieties.
As in Ottawa, I discussed with the United States' Administration the Government's interim levy scheme. For the longer term we also discussed the possible commercial effects on the United States, particularly in the agricultural field, of the enlargement of the Community.
In Canada and the United States I found that both Governments reaffirmed their traditional support for our efforts to join the Community.

§ Mr. Milne
On a point of order. As the right hon. and learned Gentleman has treated the House with such scant respect with his statement, may we appeal to you, Mr. Speaker, to have a debate on the issues raised by him before negotiations take place during May?

§ Mr. Speaker
Order. The hon. Gentleman has raised a point of order, and the Chair must be very careful about sticking its neck out, if that is what a Chair does. It might be considered whether a statement such as we have just heard could be made in a different way, or at a different time.

§ Mr. Orme
It was absolutely disgraceful.

§ Mr. Speaker
Order. I have no doubt that if the right hon. and learned Gentleman had not made a statement he would have been subject to criticism, but there are difficulties on a day like this. Perhaps it would be better if other methods could be found of giving such information, because we have a very busy day's business ahead and very many hon. Members want to speak. Therefore, I hope that I shall be interpreting the will of the House correctly if I am pretty tough on supplementary questions.

§ Mr. Harold Lever
I shall be brief. Will the right hon. and learned Gentleman bear in mind that we on this side of the House welcome the firm position taken up on the questions of New Zealand and sugar. But will he keep in mind that what we shall judge the matter upon is not firm interim statements but firm actual deals done on these subjects which satisfactorily protect the interests 1663 of New Zealand and the Caribbean countries?
While I welcome the orientation of the latter part of his statement, emphasising the need for Europe to play its full part in world relationships and world trade, again will he bear in mind that the criteria which we shall apply will be what is actually achieved in this direction rather than statements, however brief, in the meantime?

§ Mr. Rippon
I shall certainly bear those criteria in mind. As you and the House will know, Mr. Speaker, the criterion I have borne in mind is the insistence of the House that I should make a statement as soon as I returned from Brussels, and this I have done.

§ Mr. Turton
Are we to understand from my right hon. and learned Friend's statement that on only two subjects, New Zealand lamb and butter and sugar from the developing countries, are we asking for more than transitional relief? Is he aware that the vast majority of his fellow countrymen believe that too much of the negotiating position has already been surrendered?

§ Mr. Rippon
I followed very much the negotiating procedure and the matters which were raised by the former Government. There has been no departure from our arrangements in this matter.

§ Mr. Oram
In the early part of his statement, the right hon. and learned Gentleman referred to progress in fiscal harmonisation. Did discussions on that matter include the question of value-added tax? What progress has been made in that respect? What estimate has he made of the increased cost of living as a result of the progress he has made?

§ Mr. Rippon
We have asked for a five-year transitional period. There is no harmonisation within the Community on a value-added tax. The effect on the cost of living would depend on the rate of tax and the commodities on which it was levied.

§ Sir T. Beamish
Is it understood in Paris that trying to drive too hard a bargain could be just as effective a veto as a straight "No"?

§ Mr. Rippon
I am sure that after this last meeting it is well understood in 1664 France and elsewhere that we must make substantial progress fairly soon.

§ Mr. James Johnson
The right hon. and learned Gentleman's alleged statement was simply a calendar of his visits on both sides of the Atlantic. Even those of us who did not hurl abuse at him feel that he insulted the House by it. But I heard the word "fisheries". Is the right hon. and learned Gentleman honestly fighting the battle of our fishermen in the negotiations? Does he tell his colleagues in the negotiations that inshore fishing, particularly in Scotland, faces total disaster if we enter on the terms of the common fisheries policy? Does he say that? Does he honestly fight for us? We do not believe that he does.

§ Mr. Rippon
As to the nature of the statement, I was very much pressed by the House to follow the practice of my right hon. Friend the Prime Minister in earlier negotiations in the way in which I gave the statements. That is what I have done. I do not think it is very easy to complain now, but I shall try to make shorter statements in the future, if that is the wish of the House, or to delay them, if that is regarded as more satisfactory.
I have made it perfectly clear that the Government have reserved their position on the fisheries policies. I have had a great many representations on the subject, and I know the strength of feeling on it.

§ Sir D. Walker-Smith
When my right hon. and learned Friend expresses optimism about the solution of what he calls the main issues, would not he agree that whatever the previous Government did or failed to do the major issues lie beyond the transitional period, and that only if the scope of the negotiations is enlarged to include these can there be any possibility of allaying the concern of the British people about entry?

§ Mr. Rippon
Many wider issues must be borne in mind in determining our ultimate view on the matter, wider issues which go far beyond the immediate transitional difficulties which we are trying to sort out.

§ Dr. Gilbert
Does the right hon. and learned Gentleman accept that both the scope and even the direction of the 1665 alleged dynamic effects of our entry would depend very much on the state of our economy at the time of our contemplated entry? Has he taken this into account both as to the question of timing and as to the substance of the Government's decision? Can he tell us where the Government think the break-even point will come and below what level of economic activity in this country the dynamic effects in the end will go to the Germans and Italians and not to us?

§ Mr. Rippon
We shall be able to enjoy the dynamic effects provided we are able to negotiate fair transitional arrangements.

§ Mr. St. John-Stevas
Is my right hon. and learned Friend aware that many of us appreciate the comprehensive statement he has made and the patience and tenacity with which he has pursued these negotiations in difficult circumstances? I express the hope that he will concentrate on coffee rather than cognac and get these negotiations through to a successful conclusion as soon as possible.

§ Mr. Rippon
I am grateful to my hon. Friend. I am sure the House will believe me when I say that I try to make these statements in a form which I hope will be acceptable to the House, and I take note of any criticisms about their form and content. But I have been pressed very much in the past to make statements as soon as I return from Brussels. The occasion fell today and I have made a statement. I also agree that it is important now that we should make substantial progress pretty quickly.

§ Mr. Healey
Is the right hon. and learned Gentleman aware that many of us understand that his inability to give the House any news results in large part from the refusal of the French Government to allow the Six to adopt a negotiating position on the major issues, and that the behaviour of the French Government in paralysing these negotiations is leading many objective observers to the conclusion that they wish to prevent our application from succeeding for the third time? Will he make it clear to those with whom he is negotiating that if substantial progress is not made in the main negotiations the patience of 1666 this House, irrespective of the views of right hon. and hon. Members, will be exhausted?

§ Mr. Rippon
I never blame any particular member of the Community for the delays in putting forward their proposals. I have always acknowledged that France has a particular interest, like other countries, including ourselves, in many of the difficult and complex details. I would certainly rather the Community failed to reach conclusions quickly than that they reached wrong conclusions. But I believe that the right hon. Gentleman is right in saying that we are entitled now to expect the Community to put forward reasonable proposals on the main issues which have now been before it for some time.

§ Mr. Speaker
Order. I am sorry. I should tell the House that in the steel debate there are to be four Front Bench speeches and that over 20 hon. Members have asked to be called. We must get on.