EUROPEAN COMMUNITIES BILL

HC Deb 15 February 1972 vol 831 cc264-377

Order for Second Reading read.

4.20 p.m.

The Chancellor of the Duchy of Lancaster (Mr. Geoffrey Rippon) rose—

Mr. J. Enoch Powell (Wolverhampton, South-West)

On a point of order, Mr. Speaker. I wish to raise with you a point of order of which I have given you previous notice. It is, I believe, a point of substantial, if not of constitutional, importance, but I shall try to put it to you and to the House as briefly as I possibly can, and I apologise to my right hon. and learned Friend for standing for a few moments between him and his defence of his Bill.

This Bill presents the difficulty that it contains a number of major proposals which impose a burden, a charge, upon the subject. There is, for example, the whole range of the Community tariffs and the consequential provisions. There are the levies under the common agricultural policy. There are the amounts which are raised for the use of the Sugar Board. In addition, there are the provisions which authorise the receipt by Ministers and the payment into the Consolidated Fund of sums which have not been raised in taxation.

All these are matters upon which the House cannot enter unless it has already passed a Ways and Means Resolution appropriate to them respectively. The Government have recognised this is tabling a Ways and Means Resolution. I happen to believe—and perhaps there will later be an opportunity to argue—that that Resolution is in itself defective. But the point that I wish to put to you, Mr. Speaker, is that these provisions which require Ways and Means Resolutions are not incidental, nor subsidiary, nor anciliary. They are the absolute essence of the Bill and the whole Bill, and the accession to the treaties would be quite impossible without them. It would, for example, not be thinkable that we could join the European Economic Community without participating in the Common Agricultural Policy and in the Common Tariff of the Community. That being so, I submit to you that this is of its nature a Bill which requires to be founded upon Ways and Means Resolutions and that it is contrary to the practice of this House to enter upon this Bill until the necessary Ways and Means Resolutions have previously been passed.

There are two further points which I would briefly ask your permission to make. The first is that, of course, a Bill founded upon Ways and Means Resolutions does not exclude money provisions which would not in themselves require such a Resolution. That would be the case in regard to this Bill, but that fact does not alter the necessity in a Bill of which the essence is that it lays charges upon the people of being founded upon Ways and Means Resolutions.

The second and final point is this. It is part of the rules of the House, of the practice of the House, that a Ways and Means Resolution is required wherever this House delegates the power of taxation. There is admittedly an exception to this rule, and that will be found set out in "Erskine May". It is where this House delegates the power of taxation to an external authority, such as, in former days, a colony. I submit that there is no analogy between that precedent of the House in former times enabling a colony to impose taxation for the purposes of that colony and what is happening in the case of this Bill, which is an unprecedented delegation—indeed, the word "delegation" is too slight; it is a surrender—of the taxing power of this House over the people of this country to an authority outside this country.

A fortiori, therefore, it appears that this is a Bill, if any Bill is, which needs to be in accordance with our practice and ought to be founded upon previous Ways and Means Resolutions. I submit to you, therefore, that it cannot be entered upon on Second Reading without such Resolutions being passed.

Mr. Michael Foot (Ebbw Vale)

Further to that point of order, Mr. Speaker. Some of us have been examining this legislation with some care, and some of us have reached the conclusion, although we have had a mountain of documents to deal with, that one of the apparently unique features of the Bill is the form of the Money Resolution and the form of the Ways and Means Resolution. Some of us, therefore, have sought, as may appear from the Order Paper, to deal with some of these questions, certainly the question which deals with part of the Money Resolution, by putting down an Amendment of a far-reaching character, which in itself is something of a novelty.

However, Mr. Speaker, I submit further to the point of order raised by the right hon. Member for Wolverhampton, South-West (Mr. Powell) that in many respects, although I have not had the time to consider the proposition which he has made so deeply as maybe you have done, he has made a most formidable case to the House. Therefore, in supporting the submission which he has made to you, Mr. Speaker, may I ask whether it is the case that the procedures which will be followed for seeking an opportunity to introduce this legislation into the House will be precisely those which are laid down by other forms of legislation and that, therefore, consideration should be given to the point which the right hon. Gentleman has made? Presumably, if that point were to be accepted, it would be necessary that the House should postpone consideration of the Second Reading of the Bill.

If that is not possible—because we understand that that would be a procedure which had not normally been followed, at any rate in the House—and if discussion on Second Reading were to be proceeded with today—would it still be in order for you to rule, Mr. Speaker, on the question whether the Ways and Means Resolutions are required, as the right hon. Gentleman suggested they should be required, before we have the Second Reading? Would it be in order for them to be laid—if, in fact, they were laid—before the House votes on the Second Reading of the Bill?

Certainly we from this side of the House ask that the most serious consideration should be given to these matters, which go to the root of the claims which this House has to exercise its control over the ways in which money is raised and over the way in which money is voted by this House of Commons.

Sir Harry Legge-Bourke (Isle of Ely)

Further to that point of order, Mr. Speaker. I was not, of course, aware of what my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) was going to say in putting his point of order. If I understood him aright, he suggested that because under the proposed Bill we were involving charges being made upon the British people by an authority outside the United Kingdom, this obliged us to consider the Ways and Means Resolution before we went on to the Bill.

I wonder whether, Mr. Speaker, through you I might ask for a clarification of my right hon. Friend's point and whether he makes any distinction between such charges which would be levied by an authority of which the United Kingdom is a member, as indeed the United Kingdom would be under this Bill, and, on the other hand, an authority of which the United Kingdom would not be a member, which does not in this case apply to this Bill?

Mr. Speaker

I am obliged to the right hon. Member for Wolverhampton, South-West (Mr. Powell) for having given me ample and full notice of his intention to raise this point because it has enabled me to take counsel with those who advise me upon, and are expert in, these matters, who, in fact, have already considered them; it has also enabled me to examine the precedents. I am not ruling in any way today upon the Ways and Means Resolution or the Money Resolution, which will have to be dealt with later, or on any amendment to them. I am simply ruling on the submission of the right hon. Gentleman.

My Ruling is that the purpose of the Bill as stated in the Explanatory Memorandum is to make the legislative changes which will enable the United Kingdom to comply with the obligations entailed by membership of the Communities. Taxation is not its main purpose, and, therefore, I rule that this is a Bill which does not need to be founded on a Ways and Means Resolution.

Mr. Powell

Further to that point of order, Mr. Speaker. I am grateful to you for the consideration which you have given to the points that I have put to you. I have no intention of endeavouring to carry on the argument—indeed, it would be improper—except to say that this is the first time, but I apprehend it will be by no means the last, in the course of the proceedings on this Bill when you and the House will find themselves faced with unprecedented questions, with propositions to which there is no previous parallel in parliamentary history. I hope that in that light you will do as your predecessors have done and not hesitate to make precedents in an unprecedented situation.

Mr. Speaker

I will certainly bear in mind what the right hon. Gentleman has said.

Mr. Michael Foot

Further to that point of order, Mr. Speaker. So that we may know exactly what is the Ruling that you have made, could you tell us whether in the examination of the precedents you have quoted there have been no comparable cases in which taxing has played a part similar to the part it plays within this Bill when there has been no Ways and Means Resolution laid beforehand? Are you saying there has been no Bill in which taxation has played a no larger part than in this Bill when the House has insisted that the Ways and Means Resolution should be presented first? If that were your Ruling we would wish to consider further whether there were such precedents. If we were able to submit such precedents to you, would it be open to you to reconsider the matter again because, as the right hon. Member for Wolverhampton, South-West (Mr. Powell) has said, although precedents are to be set my first question was whether we are to abide by the rules of the House previously had for considering these matters? We hope that those rules will be accepted until they are changed by order of the House.

Mr. Speaker

My duty upon receiving notice from the right hon. Gentleman of his point of order was to take advice and consider the precedents. I do not think it is necessary for me to state to the House all the arguments which were considered. All I can say is that I spent a considerable time carefully considering the arguments for and against the precedents. I have ruled, and I am afraid that my Ruling must stand.

Mr. Rippon

I beg to move, That the Bill be now read a Second time.

I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Bill, has consented to place Her interest and prerogative, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

I would like to begin by putting the Bill in its proper context representing as it does another stage in the series of parliamentary processes from 1967 onwards leading towards the accession of the United Kingdom to the European Communities.

The Bill arises from the Treaty of Accession which was signed on 22nd January and which—as the text of the treaty indicates—stems from the application of the United Kingdom; that is, the application made by the last Administration in accordance with the decision of the House on 10th May, 1967.

On 28th October last year the House approved the decision of principle to join the Communities on the basis of the arrangements negotiated, and on 20th January this year the House approved the procedure to be followed for signature of the treaty and its implementation. I then explained that the signature of the treaty was to be followed by the Government's proposals for legislation.

This Bill therefore is consequential on the provisions of the treaty and is a necessary preliminary to its subsequent ratification and coming into operation. This debate accordingly takes place against the background of the previous debates and decisions of the House about the principle of membership, the terms of accession and the procedure to be followed.

My duty today is to explain the Bill, its structure, the principles on which it has been drafted and the effect of its provisions. I think I can satisfy the House that these should occasion no surprise. The nature of the legislation that would be required was stated quite clearly and succinctly both by the right hon. Gentleman, now Leader of the Opposition, in the House, and the noble Lord, Lord Gardiner, in another place, on 8th May, 1967, before Parliament approved the making of our application. It would, of course, have been an application in bad faith if we did not accept subject to the terms negotiated, that we would accept the consequential legislation that would have to be adopted.

The position was elaborated in Command 3301: "Legal and Constitutional Implications of United Kingdom Membership of the European Communities" presented to Parliament in May, 1967.

As the then Prime Minister, now Leader of the Opposition, explained: Accession to the Treaties would involve the passing of United Kingdom legislation. This would be an exercise, of course, of Parliamentary sovereignty, and it is important to realise that Community law, existing and future, would derive its force as law in this country from that legislation passed by Parliament. The right hon. Gentleman went on to explain that restraints of this kind on our legislative freedom are by no means unprecedented. We had accepted them for example, in accepting the Charter of the United Nations, the North Atlantic Treaty, in our membership of the General Agreement on Tariffs and Trade and again in E.F.T.A. We needed therefore … to keep this aspect of membership in a due sense of proportion. The right hon. Gentleman further pointed out that: It is important to realise that Community law is mainly concerned with industrial and commercial activities, with corporate bodies rather than private individuals. By far the greater part of our domestic law would remain unchanged after entry."—[OFFICIAL REPORT, 8th May, 1967; Vol. 746, c. 1088–9.] The House as a whole may therefore be reassured that there is no question of this Bill making a thousand years of British law subservient to the Code Napoléon.

It is because the main effect of Community law on our existing law is in the realms of commerce, agriculture, customs, restrictive practices and the like that the legislation is much more concise than perhaps any of us originally envisaged. I do not propose to go over again the ground covered in the debate on 20th January on the constitutional proprieties. I then carefully explained that the consequential legislation would be concerned to make the changes in our domestic law needed to comply with our obligations under the treaty.

There is no necessary correlation between the length and detailed wording of a treaty and the length and detailed wording of the consequential legislation. Some treaties call for no change in our domestic law. In other treaties, as in this case, each provision has to be scrutinised to see what change in die law is needed, if any.

The object of the legislation is, therefore, to make changes which need to be made in our domestic law in order to comply with obligations deriving from membership of the Communities, and also to exercise the rights of membership.

The provisions setting out these obligations and rights are contained in the treaties and in the secondary instruments of the Communities. They have effect in two quite different ways, and the difference between them is fundamental to the structure and contents of the Bill.

First, there are the provisions which are to take direct effect in member States, the "directly applicable provisions". Secondly, there are "non-direct" provisions where the obligation rests on the member State to take the necessary action for implementation. I shall deal first with the concept of direct applicability, then with Parliament's rôle in respect of future provisions, and, finally, with the relationship of directly applicable provisions to our Statute Law.

The concept of direct applicability has been a fundamental feature of the Community treaties from the start, for a very simple reason. A common market depends on the elimination of trade barriers and of distortions of free and equal competition. This necessarily requires rules made centrally and operating in identical terms throughout the area of the market to secure fairness and consistency.

Directly applicable provisions are to be found both in the treaties themselves and in the regulations of the Communities, particularly in the implementation of the common agricultural policy. The essence of these provisions is that they apply as law within member States without further action on the part of the States themselves. Of themselves, they confer rights and impose obligations to which the national courts have to give effect.

Clause 2(1), of the Bill therefore embodies in our law this system of directly-applicable Community provisions. In describing its effect, I cannot do better than quote from paragraph 22 of the White Paper of May, 1967, Cmnd. 3301, which says: It would be necessary to pass legislation giving the force of law to those provisions of the Treaties and Community instruments which are intended to take direct internal effect within the Member States … The legislation would have to cover provisions in force when we join and those coming into force subsequently as a result of instruments issued by the Community institutions. Lord Gardiner, speaking as Lord Chancellor in the last Administration, almost drafted the terms of the necessary provisions when he said: This legislation"— that is the pre-accession Bill— would include an enactment applying as law in the United Kingdom so much of the provisions of the Treaties and of the instruments made under them as then had direct internal effect as law within the Member States and providing that future instruments similarly took effect as law here."—[OFFICIAL REPORT, House of Lords, 8th May, 1967: Vol. 282, c. 1202.] This is precisely what Clause 2(1) does. There is, or ought to be, nothing unexpected in it. All who have accepted the principle of Community membership, as the great majority of hon. Members have, irrespective of their views on the terms negotiated, have accepted the need for this provision from the outset of the making of the application. The right hon. Gentleman the Leader of the Opposition, as I have already indicated, has never been in any doubt about it.

When the Labour Government applied for membership, the then Foreign Secretary stated on their behalf that they would seek satisfaction on particular issues, which he listed—the same issues as were the subject of our negotiations in the last 18 months—but that subject to this, Her Majesty's Government accept without reserve all the aims and objectives of the three Treaties and will implement them. This was stated in paragraph 19 of Cmnd. 3345.

Against that background we have to consider a situation in which there are altogether about 1,500 Community instruments published in the consolidated English edition on 13th January which will apply when we join. There are 1,500 and not 2,500 as some people have suggested. That is because in the documents there is a good deal of cross-referencing. About 1,200 of these are E.E.C. regulations or E.C.S.C. decisions, which will be directly applicable in this country. The great majority of these 1,200 instruments—that is the exact number the Leader of the Opposition suggested would apply when he spoke in the House on 24th February, 1970, and told us not to be too concerned with the minutiae—actually about 1,000, are agricultural, part and parcel of the common agricultural policy dealing with the detailed operation of the intervention system, the price of rice, and so on. The rest principally affect trade and industry, for example, Customs matters and restrictive trade practices, and also transport. Some concern only the terms of service of community officers and employees and have no practical impact on our law.

Those directly applicable instruments will have effect subject to the changes and transitional arrangements which have been negotiated for their application to this country.

In addition there are special arrangements set out in the treaty; for example, the protocols on sugar and New Zealand dairy products will be given effect by Community regulations which will be directly applicable.

A number of regulations containing directly applicable provisions call for domestic legislation to supplement them and make them workable, and there are provision of this kind in Part II and Schedule 4 of the Bill, to which I shall turn in a moment—for example, the Agricultural Intervention Board.

Also, where necessary, the Bill repeals or amends existing statute law covering areas in which Community regimes will operate, for example, the repeal of parts of the Import Duties Act. The care that we have taken on this will be apparent from the repeals in Schedule 3 which affect provisions in 29 Acts totalling about 80 pages of the Statute Book. That is dealing with what is happening already, which we knew we should have to face at the end of successful negotiation.

From now on we shall of course play a full part in the formulation of future directly applicable Community instruments—as of Community instruments which do not have direct effect but require member States to implement them in their own ways.

Before a Community instrument is made, the consultative processes are thorough, lengthy and largely open. In addition to the full consultations which take place with member Governments through the system of management committees, publicity is given to all proposals of any significance so that those interested may know of them when they are still only proposals. The Economic and Social Committee and the European Parliament on which the United Kingdom will be represented have the right of consultation on all important proposals with powers to suggest amendments and changes which are then taken into account. Ultimately, as we know, the final responsibility for all measures rests between the Commission and the Council of Ministers.

A United Kingdom Minister will sit on the Council where it is recognised that decisions are not taken which may conflict with the vital national interests of a member State. Where there are conflicting interests to reconcile, the period between initial formulation of a draft proposal by the Commission and its eventual adoption by the Council may be long, stretching even in many cases to years. Formal publicity for draft instruments to be made by the Council is normally secured by their publication in the Official Journal. The Community procedures flow from the provisions of the original treaties, which have been accepted from the outset by successive Governments.

The Government are deeply concerned that Parliament, as well as United Kingdom Ministers, should play its full part when future Community policies are being formulated, and in particular that Parliament should be informed about and have an opportunity to consider at the formative stage those Community instruments which, when made by the Council, will be binding in this country.

Her Majesty's Ministers will at all times be responsible to Parliament for the action they take within the Community machine and the House will be able to bring its influence to bear by all the traditional parliamentary procedures, such as Questions, Adjournment debates and Supply Days. No Government would proceed on a matter of major policy in the Council unless they knew that they had the approval of the House.

Mr. William Baxter (West Stirlingshire)

On the question of the role of Parliament, if when the Minister reports back and a debate takes place, the decision of Parliament is against the decision of the Common Market Communities, how would we resolve that situation?

Mr. Rippon

That would be in breach of the treaty. When the Government come to Parliament with proposals they will have to carry them through the House. But in addition to the traditional procedures there is a need, in the Government's view, for the House to have special arrangements under which it would be apprised of draft regulations and directives before they go to the Council of Ministers for decision.

Mr. John Biffen (Oswestry) rose—

Mr. Rippon

I will give way in a moment. It is important that I conclude this part of my speech. This part is new and much of what I have already said is well known and has been said for four or five years. I would like to develop this point first. As I was saying, in addition to the traditional procedures the Government believe that there is a need for the House to have special arrangements, under which it would be apprised of draft regulations and directives before they go to the Council of Ministers for decision. These arrangements should cover the instruments which will be directly applicable and the non-direct instruments.

In order that the details might be worked out in a way which meets the interests of Parliament as a whole, we propose that an ad hoc committee of both Houses of Parliament should be set up forthwith to consider what would be the most suitable method of ensuring adequate parliamentary scrutiny of these draft regulations and directives. Discussions about the establishment of the committee will start immediately through the usual channels.

Mr. John P. Mackintosh (Berwick and East Lothian)

Why does not the right hon. and learned Gentleman consider putting this matter before the Select Committee on Procedure, which considered taking up this matter at the beginning and postponed it until events had taken their course? This is a matter which the Committee had in mind as falling within its ambit.

Mr. Rippon

I agree with the hon. Gentleman. The proposed committee I have been dealing with will be concerned with the arrangements needed at the stage when a Community instrument is in draft. The arrangements which should be made for parliamentary scrutiny and control of any subsequent subordinate legislation in this country will come within the review of delegated legislation which is at present being conducted by the Joint Select Committee under the chairmanship of Lord Brooke. I hope that by the combination of those procedures we can devise arrangements which will be satisfactory to the House as a whole and in the interests of all of us.

Mr. Peter Shore (Stepney)

Since this matter is of such importance to the House, does not the right hon. and learned Gentleman recognise that this should have been proposed some time ago. Now that it has been proposed, is it not sensible that we should have the report of that ad hoc committee before we proceed any further with the Bill?

Mr. Rippon

With great respect to the right hon. Gentleman, that is a ridiculous suggestion. We have proceeded with this matter since 1967 stage by stage in an orderly way and there will be plenty of time in the course of the proceedings for the committee to consider this matter. We have interim arrangements with the Community up to the date of our full entry into the Community on 1st January. 1973. Thereafter these procedures will have to apply.

Sir Elwyn Jones (West Ham, South)

Is it not the case that there is provision in the ratification laws in Germany and Holland for supervision of this kind of machinery by the Parliaments of those countries to be made a statutory duty? Why is it that those provisions are not contained in the Bill?

Mr. Rippon

There is a great deal of difference between the parliamentary arrangements of all the various countries. It is not always appreciated by right hon. and hon. Members opposite how different are the arrangements which Parliaments retain within the Community to conduct their own affairs. Although the procedures of other Parliaments are of interest, they are not directly applicable to us.

Mr. Douglas Jay (Battersea, North)

Would the special arrangements announced by the right hon. and learned Gentleman apply to Community instruments destined to go not merely before the Council but before the Commission? Do they apply in both cases?

Mr. Rippon

The committee could consider the matter widely, but I have suggested that the procedure should enable Parliament to be able to consider in the most appropriate way any decision or directive, whether directly applicable or non-directly applicable, which might affect this country. I think this takes it as wide as the right hon. Gentleman would wish.

Mr. Jay

Surely the right hon. and learned Gentleman must have considered this matter. Therefore, will he answer my question?

Mr. Rippon

I do not want to prejudge what the ad hoc committee may say about particular matters. What I have proposed is an ad hoc committee to consider arrangements which would ensure satisfactory consideration by the House of matters in draft as proposals before binding decisions can be taken by the Commission or the Council of Ministers.

Sir Harmar Nicholls (Peterborough)

This is an important matter and will affect the views of many of us. If the ad hoc committee can work on the lines my right hon. and learned Friend has in mind, it is not a fact that the Minister would have the power to use the veto on an instrument as distinct from making an expression of policy? In other words, would there be a Ministerial power of veto or merely a discussion with no power at the end of it?

Mr. Rippon

If it is a matter regarding the price of rice, it might not be fundamental and it might be difficult to insist that it was vital to the national interest. But assuming that a question arose on which there had been strong feelings in this House, prima facie it would be a matter in the national interest and a British Minister would have power to insist in the Council of Ministers that it was a matter of major national importance which required a unanimous decision and that he could not be part of that unanimous decision.

Before I leave the directly applicable Community provisions, I should like to mention one further feature of this concept. In order to ensure impartial administration and interpretation, it is inherent in the concept that in the last resort a single authority should determine questions about the interpretation and validity of the provisions. This is a function of the European Court, in respect of Community provisions, whether directly applicable or not.

Clause 3 subsection (1) provides for the acceptance of the jurisprudence of the European Court. As the 1967 White Paper (Cmnd. 3301) recognises, the directly applicable provisions of the Community are designed to take precedence over the domestic law of member States, in the sense that they prevail in cases of conflict.

By accepting the directly applicable law in Clause 2(1) and accepting the jurisprudence of the European Court in Clause 3(1) the Bill provides the necessary precedence. In relation to statute law, this means that the directly applicable provisions ought to prevail over future Acts of Parliament in so far as they might be inconsistent with them. In practice, this means that—again quoting the Leader of the Opposition— It would be implicit in our acceptance of the Treaties that the United Kingdom would, in future, refrain from enacting legisation inconsistent with Community law."—[OFFICIAL REPORT, 8th May, 1967; Vol. 746, c. 1089.] Clause 2(4) accordingly provides that present and future enactments shall be construed and have effect subject to Clause 2.

I do not want to pretend that this process of Community law-making involves no constitutional innovation whatever. [Interruption.] It does, but only to the extent clearly set out in the 1967 White Paper "Legal and Constitutional Implications of United Kingdom Membership of the European Communities".

Of course nothing in this Bill abridges the ultimate sovereignty of Parliament. As Lord Gardiner said in another place when he was Lord Chancellor, The United Kingdom legislation would be an exercise of Parliamentary sovereignty and Community law existing and future would derive its force as law in this country from it. The Community law so applied would override our national law so far as it was inconsistent with it. Under the British constitutional doctrine of Parliamentary sovereignty no Parliament can preclude its successors from changing the law."—[OFFICIAL REPORT, House of Lords, 8th May, 1967; Vol. 282; c. 1202.] As Lord Gardiner said, it is unlikely that Parliament in these circumstances would wish to proceed with matters inconsistent with treaty obligations.

I now turn to the implementation of those treaty provisions and Community instruments which do not have direct applicability and therefore require action by member States. I shall first explain why certain categories do not require legislation in this Bill, secondly how the Bill deals with other provisions and finally the need for the powers in Clause 2(2) to make subordinate legislation.

I include in this category the domestic law which I mentioned earlier as sometimes being needed to supplement a directly applicable provision in order to make it operate in the manner most suitable for us; for example, to provide the machinery to conduct support-buying under the common agricultural policy. In the area of non-direct provisions, the Bill can deal expressly only with existing Community provisions, and not all of those require a change in our law; for example, the directives on capital movements can be implemented by action under the Exchange Control Act, 1947.

Secondly, some Community provisions, particularly in the treaties, call for no change in domestic law at all because they operate purely at the international level; for example, the provisions about the composition of Community institutions.

Thirdly some obligations can be met by using existing powers to make subordinate legislation which would be laid before Parliament in the ordinary course; for example, the provisions in the treaty dealing with fishing rights will be given effect by statutory instrument under existing legislation. It will be necessary to make an order under the Disabled Persons (Employment) Act, 1944, to extend the scope of that Act to nationals of member States in this country. Some 15 or so instruments will be needed this year in this category.

Fourthly there is the special case of value added tax which is to be embodied in separate provisions in the forthcoming Finance Bill.

Fifthly there are the Community requirements, for which we have negotiated delays so that they will not operate until sometime after accession.

Express legislation on this sort of provision at this stage is not necessary or perhaps desirable, because in some cases the Community policy might change before the end of our transitional period or there might be changes in our related domestic arrangements which called for a wider approach. I include in this category the implementation of Community regulations about the age of road transport goods drivers, where the Community regulations are not intended to operate for domestic journeys until 1976, and we should need to fit these changes in with the issuing of drivers' licences for life which would itself require domestic legislation.

For the remaining obligations, the Bill has made the necessary provisions. In Part I, Clause 2(3), will be found the financial provisions. Under these provisions the contributions to the Community budget and all expenditure arising from the treaties or the Bill will be met. Subsection (3) distinguishes the payments required to meet our Community obligations by making these a direct charge on the Consolidated Fund, thereby recognising the special nature of the commitment to make these payments. My hon. Friend the Minister of State, Treasury, will have more to say about that if he catches Mr. Speaker's eye later tonight.

The other provisions to implement obligations are contained in Part II of the Bill and in Schedules 3 and 4, and the Bill has followed normal practice in the nature of the provisions expressly laid before the House.

Clause 9, for example, deals with the changes required in company law in order to conform with an existing Community directive, and incidentally some of these changes are in line with the recommendations of the Jenkins Committee; for example, the provisions for ultra vires contracts and pre-incorporation contracts. Following the practice of company law legislation, all the necessary details, which are numerous although sometimes minor, are included in the Clause.

Schedule 4 contains a number of amendments to existing statutory codes, chiefly of a regulatory character in agriculture or horticulture; for example, concerned with the control of potato wart disease or the grading of fruit and vegetables. In these cases the Bill follows existing practice in the matters left to subordinate legislation; for example, in the Food and Drugs Act.

In general the Bill seeks to meet Community obligations by modifying or extending an existing regulatory code, rather than by laying down a separate set of provisions. In this way, those affected by the obligations will find that they are working within the framework of a familiar statutory code, containing the enforcement machinery and other ancillary provisions to which they are accustomed.

We anticipate that some 25 instruments will be made in 1972 under powers conferred or amended by Part II and Schedule 4; for example, to permit deferred payment of import duties, which might be quite popular.

Some people have thought it somewhat incongruous that a Bill of this importance should contain express and detailed provisions about the letterheads used by business firms, but the Government have thought it right to deal expressly and comprehensively in the Bill with the matters requiring legislation at or shortly after accession and involving specific amendments of existing Acts of Parliament. That is the principle on which Part II and Schedules 3 and 4 have been constructed.

Finally, there remains a miscellany of minor matters which are not included in the Bill but for which some legal provision is needed by accession or shortly afterwards. The provisions are generally in new fields for legislation and regulate such minor and, I hope, uncontroversial matters as textile appellations and the markings on wood in the rough. These matters are appropriate for subordinate legislation. It is necessary to take a general power in order to deal with them, as the theme which unites them is that they are needed in order to implement Community obligations or to exercise the rights of membership.

A general power to make subordinate legislation for these purposes is contained in Clause 2(2) in terms of the obligations and rights under the treaties as defined in Clause 1. This was contemplated by the 1967 White Paper on legal and constitutional implications which referred to delegated legislation issued under Parliamentary authority which could cover future as well as present Community instruments. I fully appreciate the concern of the House at any new general power to make subordinate legislation, but I should like to reassure hon. Members about the prospect. On the basis of existing Community instruments, we foresee a need for not more than four instruments under Clause 2(2) in 1972 and about another 12 in 1973. This compares with an annual number of about 1,000 general Statutory Instruments on all matters laid before Parliament.

As for the future, our obligations will result in a continuing need to change the law to comply with non-direct provisions, and to supplement directly applicable provisions, and it is not possible in advance to specify the subjects which will have to be covered. In particular, Article 100 of the E.E.C. Treaty contains a general power for the Council to issue directives for the approximation of laws directly affecting the establishment or functioning of the Common Market. My earlier examples of instruments about wood in the rough and textile appellations come from directives under this Article.

There will be other obligations to be met of varying degrees of importance. The 13 years' backlog of Community instruments which the Bill deals with expressly will be matched by a continuing need to respond to non-direct provisions and, just as we are taking the existing obligations and are dealing with them in the various ways open to us—administrative action, the use of existing powers, separate legislation, express provisions and subordinate legislation under the Bill—so these different approaches will be used to meet future obligations.

As I have said, the Bill deals comprehensively with changes in the law needed now which require amendment by Act of Parliament. In future it will be possible to make many changes or to anticipate them in the ordinary programme of departmental legislation, for the same reasons that the Government decided that provisions now in Part II of the Bill ought to be dealt with there expressly rather than Clause 2(2).

Sir Elwyn Jones

On subordinate legislation, can the right hon. and learned Gentleman explain Clause 2(4), which I confess that I and other lawyers whom I have consulted find totally incomprehensible? Is it a rule of construction, or is it a piece of substantive law and, if so, what is its effect?

Mr. Rippon

I think that is more a Committee point, is it not? If the right hon. and learned Gentleman looks at it carefully he will see that Clause 2(4) provides: The provision that may be made under subsection (2) above includes, subject to Schedule 2 to this Act, any such provision (of any such extent) as might be made by Act of Parliament"— then there is a break— and any enactment passed or to be passed, other than one contained in this Part of this Act, shall be construed and have effect subject to the foregoing provisions of this section; but"— this is important— except as may be provided by any Act passed after this Act, Schedule 2 shall have effect in connection with the powers conferred by this and the following sections of this Act to make Orders in Council and regulations. This reinforces the view that Community law takes precedence under Clause 2(1). I think that that is clear enough.

Mr. Powell

Still on that subsection, which raises a matter of principle, may I ask my right hon. and learned Friend to refer to the words, except as may be provided by any Act passed after this Act"? Why is there any doubt that has to be removed by those words that Parliament can subsequently alter what it has already passed?

Mr. Rippon

I will deal with that particular point in a moment. We have to make some provision of that kind. That may be a point more readily gone into in Committee.

The Government hope that Part II and Schedules 3 and 4 will commend themselves to the House on the basis which 1 have set out and as an earnest of their intention that the use of Clause 2(2) will continue to be confined to appropriate cases. But the volume and miscellaneous character of Community provisions make it necessary to use the general power in Clause 2(2) for a variety of minor matters. Because of the complexity of the possibilities of the future we have had to provide in Clause 2(4) that instruments under Clause 2 may make any provision which might be made by Act of Parliament and that they can therefore amend statutory provisions.

Mr. Shore

Gobbledygook.

Mr. Rippon

It is necessary to provide under Clause 2(4) that instruments under Clause 2 may make any provision which might be made by Act of Parliament and that they can therefore amend statutory provisions. This arises because of the need to make perhaps excessive provision for matters which may arise in future which require that kind of action. What I am trying to say is that, as an earnest of the way in which we think any Government would approach these matters, we have put in express statutory provisions for major amendments now required, and we have strictly limited the use of Clause 2(2) by the overriding restrictions in Schedule 2.

For instance, paragraph 1 of Schedule 2 specifically prohibits the use of Clause 2(2), which would include Clause 2(4), to impose or increase taxation, to legislate retrospectively, to delegate Clause 2(2) powers any further, or to create an offence carrying substantial penalties. In addition, there is the parliamentary procedure prescribed in paragraph 2(2) of Schedule 2.

Mr. Michael Foot

Will the right hon. and learned Gentleman tell us whether this part, which he has elaborated partly in response to the question by his right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), was covered in the White Paper of 1967, to which he has made such frequent reference? In which paragraph was this matter spelt out?

Mr. Rippon

I cannot say in which paragraph it was spelt out, but the White Paper dealt with the whole general problem of how to deal with existing and future laws. I appreciate that this is a complex piece of drafting. It has had to be put in for the reasons which I have given. It is impossible to anticipate exactly what requirements we will agree in future, what may be the exact form of regulation or directive, and in what way Parliament will wish to deal with it. Therefore, it may be appropriate on some occasion to use that power, in effect, to amend an Act of Parliament.

I am saying that, as an earnest of the Government's intentions, we have taken care to bring before the House the major matters which require amendment in an Act of Parliament. We have also carefully limited the circumstances in which in any event the powers contained in Clause 2(2) could be used. I do not know that I can go any further now. If the hon. Gentleman reads what I have said, he will realise that it is perfectly clear. As I conceive it, the power afforded by Clause 2(4) would be used only in exceptional circumstances and subject to the other overriding restrictions in Schedule 2, plus the fact that in an Act of Parliament we have dealt with all the major matters.

Mr. Albert Booth (Barrow-in-Furness)

In order to help the House, will the right hon. and learned Gentleman tell us whether what he has just explained regarding the effect of Clause 2(2) and (4) means that if the Bill becomes an Act delegated legislation may be used to amend primary legislation? If so, why is there no provision in the Bill whereby this delegated legislation, which will amend primary legislation, is not subject to amendment and debate, as is other primary legislation?

Mr. Rippon

We are dealing with the future. In certain circumstances, subject to the provisions of the Schedule, Clause 2(4) expressly limits the power to deal with these matters in the four instances which I have set out. In addition, we have the parliamentary procedure prescribed in paragraph 2(2) of Schedule 2.

As to the use here of the affirmative or negative procedure, the Bill is drafted to ensure flexibility, pending the report of the Joint Committee of both Houses which is at present considering the whole question of the procedures and practices by which the control of Parliament over delegated legislation is exercised and how they might be improved.

Sir Elwyn Jones

Does the use of the word "flexibility" mean that it is left to the discretion of the Minister whether the subordinate legislation is to be dealt with by the affirmative or the negative procedure, or might it be required to be laid and therefore merely brought to the attention of the House?

Mr. Rippon

The flexibility in the Bill, as drafted, is so that we may have the opportunity to consider the matter in connection with the report of the Joint Committee of both Houses which is at present considering the whole question of the procedures and practices by which the control of Parliament over delegated legislation is exercised and how they might be improved. I appreciate that we shall have to go in some detail, which is not perhaps wholly appropriate on Second Reading, into how these matters should operate. I have tried to explain as clearly as I can the extent to which we have had to make provision in the Bill for unforeseen future circumstances. I have no doubt that the Joint Committee will look specifically at the arrangements for the scrutiny of subordinate legislation arising from our obligations as members of the Communities.

In describing the structure and contents of the Bill I have necessarily been concerned primarily with Community obligations and with continuing obligations, because it is obligations which require a change in the law. But in ex-planning the nature of these obligations and the way that the Bill deals with them I have throughout been conscious that we are shouldering these obligations as a consequence of membership in the interests of the security and prosperity of our people.

I hope that when discussing the Bill, particularly at this stage, we shall not forget that its ultimate purpose is to enable us to play our proper part in the construction of a united Europe as a full member of the European Communities. We know that there are many issues which genuinely divide this House, but most of us know in our hearts that the principle and purpose of the Bill is not one of them.

5.19 p.m.

Mr. Peter Shore (Stepney)

I hope that the Chancellor of the Duchy of Lancaster will realise that he has addressed that last shaft to the wrong target. If I may begin with what he has said, it was very odd that he should leave his very few remarks about the ultimate purpose of the whole thing right to the end of his speech, when, of course, it should provide—as it certainly will in my case—at least some introduction to remarks about the Bill and the treaties that it seeks to enact.

Second, the right hon. and learned Gentleman went out of his way to be as disarming as he knows how to be. Perhaps in his efforts to be disarming he was at times disingenuous, but he also managed to reveal to us, by the very proposal that there should now be set up a new ad hoc Joint Select Committee, how little thought the Government have given to the serious matters which are under discussion here. I say this not from the position that I take on these matters, because I took a very different position about the merits and desirability of entering the Community, but the House owes it to itself, its traditions and its history to make the most careful and rigorous examination of what is involved in a close relationship with the European Communities and the institutions that they have set up.

It is a great pity that this matter has not been opened up before. It is not good enough to say that there was a White Paper in 1967. Yes, there was, and, of course, that possibility of negotiation was aborted in the autumn of that year, and the issue did not reappear on the political scene until the beginning of 1970. But the right hon. and learned Gentleman and his colleagues have now had over 18 months of very serious, in their case obviously most devoted, effort to enter the Common Market, yet they have only now begun seriously to consider this most important of all the issues which in the end are involved—the effect upon the Parliament and democracy of this country.

Very big issues are indeed involved. I do not think that the Minister should have left right until the end of his speech some mention at least of the fact that what we are talking about is a Bill which will so greatly change many of the matters which affect the lives of people in this country and the prospects for our nation. It will certainly affect the prosperity of the nation. It will affect our living standards, our chances of employment, as well as the future of great industries and many regions of this country. It will also affect, as we have just heard, the democracy of the country, the extent to which we continue to rule ourselves, and our freedom to use the State power for those purposes that we think right.

Last, and by no means least—I am speaking, as one inevitably must on a Bill of this kind, in broad terms—it will affect our relationships with other countries, in particular whether we should forge a new and special relationship—that is what it is: a community—with the neighbouring countries of Western Europe, rather than maintain the relationships and associations in the Commonwealth, E.F.T.A. and elsewhere which we have enjoyed for so long and which we enjoy today.

These are all matters, very big matters, with which we have to deal in considering this Bill and the vast amount of subordinate matter which lies beneath it. The Minister said that the Bill was concise. Of course it is, because so much of what it will do is no part of the Bill.

There is nothing concise about those volumes with which on previous occasions hon. Members have staggered into the Chamber. The Community has produced 43 volumes of regulations and law over the past 12 years. Also, there is nothing concise about the treaties which the Communities have themselves entered into with one another and with other agencies and which we were privileged to see just a week ago.

Therefore, I have to begin by trying to clear the mind of the House on what we are discussing. First, the Bill is about accession not just to the Treaty of Rome, the Treaty of Paris, the Euratom Treaty—the major founding treaties of the Communities. Nor, of course, are we concerned with accession simply to the treaties which are listed in Schedule 1. What we are acceding to is that very large number of additional treaties to which I have referred.

I hope that that is the complete number. Perhaps the right hon. and learned Gentleman can help me on this. I believe that we are acceding to the 10 volumes of additional treaties and sub-treaties which were published last week, along with the original listed treaties. That point is at least established.

The extent, the manner, the timetable, of our accession to these treaties is, of course, set out in the two volumes of the Treaty of Accession. Here, among other things, will be found the terms which the right hon. and learned Gentleman and his Government have negotiated. These matters, which the Government would wish us not to see or speak of, are to be found there—buried in a kind of shallow grave of protocols and annexes, but for all that, one can discover them there.

Part of our task in this debate and others will be to disinter these bodies and bring them before the gaze of the House. I will not say much now about what is there, but I should draw attention to at least one or two matters on which I may invite the Minister's comment—and if not his, that of his right hon. Friends.

First, the House will be aware that there has been a crucial change in the wording of the New Zealand Protocol which is attached to the Treaty of Accession, a change of wording which, according to Mr. Marshall—he used these words in the New Zealand House of Commons—would have been a breach of faith or a betrayal if we had used them. But we have, and what we want to know is what happened, and why.

Mr. Rippon

The right hon. Member for Battersea, North (Mr. Jay) raised this matter some time ago in the House. I explained to him that there was a misapprehension about this. There is no breach of faith of the sort that Mr. Marshall feared. That would have arisen if the Community had attempted to reinsert in the protocol the provision of unanimity on the principle of continuity. They have not tried to do that. The only question which arises is that it is made clear in the protocol that voting would be unanimous on the form of the continuing arrangements, as I explained to the House on 24th June.

Mr. Shore

I will come in a moment to the further point of how the alleged veto works. We will rest for the moment on that point.

Then, there is the Commonwealth Sugar Agreement. What happened, amid all these declarations, unilateral and multilateral, among all the protocols and annexes which litter these documents, to the Lancaster House communiqué, which was the one serious statement addressed by this Government to the Commonwealth sugar producers which gave them some assurance for the future other than the rather nebulous aura à coeur" which is what the Community itself was prepared verbally to offer? I hope that, at some stage, we shall have the answer to that.

Among these matters, some things are missing. There is no mention in the treaties of the very large contribution which this country will have to make in the form of its "membership fee". The only mention of sums of money is in the Bill itself, in the Financial Memorandum, where, of course, the figures stop discreetly at the net £200 million in 1977. The most serious matters of all, in a sense—they are very serious—the assessment and the judgment about how all this would affect our future prosperity, are not mentioned. Fortunately for the Government, they do not have to mention them either in a treaty or, indeed, in a Bill of this kind. But the House must be aware that these effects will be very serious.

What inevitably will follow from the new systems of taxation which are being proposed and what will happen as a result of the very large and additional burdens on our balance of payments is that we shall endanger the possibilities of our continuing growth and prosperity in the years ahead. It will also have very retrograde effects upon the distribution of income in this country, particularly as it affects people with small incomes or below average earnings.

There is serious and genuine concern. Heavens!—there should be, with one million unemployed today and with the British economy, in comparison with the economies of the Six, having shown a considerable difficulty in achieving a satisfactory rate of growth now over a number of years. There is real worry that in relation to this large and more dynamic market in Western Europe Britain could become as Northrn Ireland has been to the United Kingdom. But there is this very important difference: whereas we today recycle very large sums of money towards Ulster and towards our other development areas in order to attempt to offset the very serious effects of the compulsive pull of stronger parts of our country, the South-East and the Midlands —it was the Midlands, perhaps I should say—and in order to counteract these things we pump large sums of money into the weaker areas. But in relation to the Common Market, what is being proposed is the very opposite. It is that we who are in relation to the Six, I regret to say, economically weak, certainly in terms of our growth, should make a substantial contribution across the balance of payments to their economies, without limit in time or in amount under the formulae of the Communities' taxation that have been agreed. So one cannot help but have the most serious worry and concern about this.

I regret very much that the right hon. and learned Gentleman rejected the very serious proposal that there should be a Select Committee on the terms of entry, which would have allowed us to explore these matters as they deserve to be explored.

Before I leave the question of the terms of entry buried or missing in the Treaty of Accession I return to the point about the veto, on which the right hon. and learned Gentleman and I have faced each other at 4 o'clock in the morning and on another occasion at 5 o'clock in the afternoon and are facing each other today for the third time. Throughout our debates, as he will know, it has been an important part of the Government's case that they have a fall-back position, that we need not worry too much about a particular set of inadequate terms in the negotiations because when and if we become a member and when particular matters needed to be renegotiated we should be able to get our way by insisting that the matter in question was of vital national interest to us and the other members would then have to accept our view.

I am sure that that rings a bell with the right hon. Gentleman the Secretary of State for Trade and Industry, because he used precisely this point—incorrectly, I think—when trying to defend himself against charges that membership would damage our regional policies. It would be wrong to single out the right hon. and learned Gentleman because other Ministers have made precisely the same point. I do not believe this claim. I want to get this finally clear today. The fact is that in the matters with which we are all familiar, whether they be fishing, Com- monwealth sugar, New Zealand butter, or any of the other matters, the Government have negotiated a time-limited waiver from the Community rules. The House would probably agree with that description. When the time expires, those waivers can be extended only if the community agrees to it. All that we can say is that it is extremely unlikely that we should be able to get more than a small part of what we want when the agreements for Commonwealth sugar, New Zealand butter and fisheries come up for renewal, respectively, in 1974, 1977 and 1982. Why we should find it difficult to persuade the majority or the whole of the Community to support us in these matters is obvious: it is because our interests in these areas clash very much with theirs.

One area of the negotiations in which Ministers have not claimed that there will be either a review in the future or a British veto is, significantly, the area in which we can expect to incur the greatest damage to ourselves. I refer to the cash contribution we shall have to make to the Community under the "own resources" rule. Every other area of negotiation has been referred to during previous debates in relation to a national interest veto, but not this one. The omission is significant.

In earlier debates all that Ministers could say about it was that if unacceptable situations arise, the very survival of the Community would demand that the institutions find an equitable solution. Perhaps it is not surprising that this flabby piece of prose is not reprinted in the Treaty of Accession. But the Prime Minister knows, as President Pompidou knows, that there is no possibility of either a renegotiation or a veto here in this matter. Probably no right hon. or hon. Gentleman will rise to challenge me about that.

All that the Prime Minister can offer the House, on this matter, is what he said on 21st July: The fundamental question for the House is really this: do we believe that the Community is now, aid will be when we are in it, the kind of body that will approach these matters"— that is, Britain's debt to it and our continued contribution— in a positive, constructive and reasonable manner?"—[OFFICIAL REPORT, 21st July, 1971 Vol. 821, c 1465.] I should have required a much stronger guarantee than that. I see nothing in the course of the negotiations, or the previous negotiations, that would permit me in clear conscience to put my country's fate and the vast sum of money that will be extracted from it year by year in such pawn and at such risk.

One last point about the veto is that, while it does not and cannot apply to the agreements and arrangements which have been already made by the Community and which the present Government have so disastrously accepted, none of the matters which I have mentioned, which have been already agreed by the Community, is subject to any British veto. The veto can be used—this is the source of confusion—on future Community policy specifically where the Rome Treaty allows it, when it says that decisions will be taken unanimously, but, less clearly, if major nations assert the need for unanimity. Whereas the treaty says that there should be qualified majority voting, President Pompidou has made it clear that on future Community policy he will insist on unanimous decisions where the treaty talks about qualified majority voting on future policy. The Prime Minister at his meeting at the Elysée, as we all know, has stated his full concurrence with the President of France.

But there is no joy for us in this, for while the Common Market agricultural policy and its financing impose disastrous burdens on us, and cannot be vetoed by us—the policy can be changed only by unanimous agreement or by heavily qualified majority voting—the only hope of mitigation of these burdens for us lies in the development of common industrial and regional policies which would reverse the cash flow in our favour. Yet it is precisely on those policies that the President of France will be free to exercise his veto. It is of great concern and potential damage to this country that there is no British veto of what has been agreed, and for the past 13 years what has been agreed in the Community is basically the self-interest of France. There is a power of veto on those matters which might conceivably be turned to the interests of this country. I hope that someone on the Government Front Bench will give a serious reply to this matter of the veto.

Sir Robert Cary (Manchester, Withington)

How can we possibly insist upon exercising a veto in a club to which we did not previously belong?

Mr. Shore

The hon. Gentleman has made the whole point for me, because it is precisely the negotiations about the terms of entry that decide how far what has already happened in the past 13 years will be imposed upon us. The awful truth about the whole negotiations is that every bit of what has happened has been accepted. Every last regulation has been accepted, not in an honest negotiation, putting our interests in one balance and the Community's in another, but imposed upon us. We have been forced to take it or leave it. Unhappily, we have taken it.

Mr. Rippon

Does not the right hon. Gentleman realise that all his speech so far is a reiteration of what some other right hon. and hon. Members opposite said during the debate which ended on 28th October, when there was a decisive majority in favour of entry into the Community on the terms negotiated?

Mr. Shore

I do not agree at all. To begin with, I do not think that the matter has been decided. The vote of 28th October was taken long before the negotiations were over, long before the 43 volumes were published and the other 10 volumes were published here last week, long before we saw the Treaties of Accession. The right hon. and learned Gentleman will have to think up something better than that.

I turn now to the Bill itself. It does not simply accede to all those treaties in the manner I have described and the way the Treaties of Accession lay down. It also, as Clause 2, with which the right hon. and learned Gentleman dealt at great length, makes abundantly clear, accepts rights, powers, liabilities, obligations and restrictions arising out of our membership. Clause 2 takes only two pages, and its related Schedule one page more. But it mounts a most serious attack on the power of Parliament, on our democracy and on the freedom of action of any Government in this country. It makes clear, first, that we accept as the law of the land all those rules and regulations that have been churned out during the past 13 years, without further enactment and only with such discussion as we can maintain during the passage of the Bill. About 1,500 regulations was the right hon. and learned Gentleman's figure. These are now to become law and enforced in our courts.

The Clause also makes clear in subsection (1) that further Community laws can and will be made without approval by Parliament, indeed, without reference to it, unless the proposals the right hon. and learned Gentleman has suddenly introduced today can intervene at this point. So, over a wide area of our affairs Parliament is inevitably doomed to become a spectator of legislative events. Unless the Select Committee can put before us new proposals, we shall be in the position of dealing with Community regulations which Parliament might be able to see, and perhaps even in the end discuss, but which it would be powerless to alter.

As the right hon. and learned Gentleman has made clear, our courts of law will be brought within the Community system, and the final arbiter of all the matters covered by the treaty will be the European Court.

I knew what the right hon. and learned Gentleman would say about all that. He said that the White Paper of 1967 described this situation. It did, but it certainly did not use that as an argument to commend or recommend entry to the House. The situation was what always made it extremely difficult to accept what was involved, and for most hon. Members the arrangements are bearable only if, first, the area in which such powers operate is most narrowly confined, and, secondly, the overall arrangements for entry are clearly to the advantage of this country. Neither of those conditions has been met.

The fact is that the area of Community law-making has widened greatly in the past five years. If we had joined in 1967, not only was the transitional period, when so much was still fluid, still to be concluded, but many of the matters that under the treaty then required unanimity to take effect might never have been agreed.

But that is not all. In 1970—and this relates very much to Clause 2(3)—the Community took what many regard as the most important step in its history. The member States agreed that the Community itself should have the power of taxation, that it should have its own resources. That is to be found in the separate Treaty of Luxembourg, of April, 1970.

It is a consequence of that decision that the power of taxation, the most jealously guarded of all the powers of Parliament, is in part to be handed over to the Community, which will be able to impose customs duties, agricultural levies and up to a 1 per cent. value-added tax on the people of this country. Along with its power to tax there will go the power to determine expenditure. These matters will be decided not as they have been in the past by the British Parliament but by the Council of Ministers and the Commission.

Mr. Sandys (Streatham) rose—

Mr. Shore

I should like to make one point before I give way. There is nothing in the 1967 White Paper about the Community being given the power of taxation. There was talk about the possibility of harmonising certain taxes where they distorted competition, but while the idea that the Community should emerge as a tax power in its own right may have been in the womb of the Community it certainly was not born, and there was no mention or discussion of it in the White Paper concerned.

Mr. Rippon

The right hon. Gentleman has always suggested that the 1967 White Paper has somehow been overtaken by events. He and the House should know that the then Prime Minister said on 17th February, 1970, that the general assessment in the White Paper still held good.

Mr. Shore

Which White Paper?

Mr. Rippon

The 1967 White Paper.

Mr. Shore

That will not do. Despite his great desire to score points, the right hon. and learned Gentleman must take this matter seriously. Things have changed. A great event occurred in the Community in 1970. I recognise that, and I am not a friend of it. In 1970 it became a great new body because it acquired this power of taxation. Why should the right hon. and learned Gentleman try to deny this or pretend that everything is as it was in 1967?

Mr. Rippon

I am not denying that things changed in 1970 but only that in February the then Government, knowing of the changes that were to take place, reaffirmed that their position was unchanged.

Mr. Shore

I know a bit more about that than does the right hon. and learned Gentleman, and I assure him that he is wrong. I could take him detail by detail through the 1970 White Paper and the debate of that year, but I will not weary the House.

In the light of what I have said, it is not only Clause 2(1), (2) and (3) of the Bill that we must consider. I cannot see how the Government can maintain that there will be, in the words of their White Paper, no loss of "essential national sovereignty." I do not understand how the right hon. and learned Gentleman only a few days ago could say in his Press Gallery speech, of which I have a copy: For Parliament, far from losing influence, it must gain in stature by Community membership. It may be the devout wish of us all that that should be so, but on the face of it it is so in conflict with reality and the facts that it is taking a liberty with language.

Another important matter is involved in the loss of decision-making by this Parliament, or in the extent to which our decision-making processes will be curtailed in relation to the Community. The proposal before us—I say this perhaps more to some of my hon. Friends than to hon. Gentlemen opposite—is not to transfer power from our Parliament and democracy—operating, as it must, on the national level—to a new Parliament and democracy of equal weight or stature in Europe.

There is surely one thing about which we can agree; namely, that of all the institutions of the Community, the weakest is the European Assembly. It has no power, it is not directly elected, it seldom meets and it is only a talking shop. I recall the words of Professor Dahrendorf a few months ago. He wrote: A democrat can only feel shame when he sees adult and, in their own countries, properly elected Members of Parliament playing out the farce that they have to perform ten times a year for a week at a time, in Strasbourg or Luxembourg. The transfer of power that is being contemplated is not to this talking shop—how could it be a transfer to such a body?—but to the non-elected institutions of the Community; the Brussels Commission, the Council of Ministers and that most important body, the Committee of Permanent Representatives, which the Rome Treaty does not even mention.

Mr. Sandys

Would the right hon. Gentleman feel differently if the European Parliament were directly elected and given more power, which is what many of us feel should, and probably will, happen before long?

Mr. Shore

I cannot and will not give a quick reply to that question—[HON. MEMBERS: "Answer."]—simply because I take the right hon. Gentleman's view on this matter seriously. It would be wrong for me to give a light reply.

I do not personally believe that democracies can be created just like that. Indeed, it is odd that hon. Gentlemen opposite should be putting a question of that sort to me when I thought that it was instinctive for Conservatives to believe that institutions grow and are not mechanically created.

The whole structure of government in Europe is based on a division and separation of powers, and this makes it difficult for us to envisage a similar institution to our Parliament operating on a European level. This opens up a wide area for debate which it would not be right for me to develop this afternoon.

I return to what I was saying about the institution which really matters; namely, the Committee of Permanent Representatives. Professor Dahrendorf, himself a Brussels Commissioner, said of this Committee: In the past ten years these ambassadors of the Member States in Brussels have themselves dealt with nine out of ten questions that have been put to them without their Ministers ever having heard about the matter … if there are technocrats in Brussels, then these are they. Thus, what is involved is not merely a transfer of sovereignty from London to Brussels or from Britain to Europe, but a serious loss of democratic decision-making for this country. That is what is greatly in danger now.

Even if the broad proposition in Clause 2 were accepted—and I have not said anything to suggest that it should be—and even if the terms had been utterly different from those that have been brought back, I believe that the actual form which this Measure has taken is for many people an outrage. Indeed, it is as though it had been designed to give this House a kind of salutary shock, to teach it that it will count for so much less in future. [Interruption.]

Let me illustrate this. I do not pretend to a vast expertise in these matters, which, in any event, will be pursued in later stages of the debate. The very fact that Clause 2(1) is to enact these 1,500 regulations "without further enactment"—[Interruption.] I want hon. Gentlemen opposite to note this. Even if we were quite powerless in the matter, it would surely be better if only to ensure that the House and the citizens of Britain knew what they contained if the more important of these Community regulations had been subject to special and separate enactment.

Is it not extraordinary, too, that the Government should think it right, as Clause 2(2) suggests, that future directives of the Community should be the subject of a Statutory Instrument with the possibility of one-and-a-half hours' debate?

There are many other facets of this matter which illustrate this point and which concern the doctrine of supremacy of Community law over British law. Need the Government have found it necessary to say, as Clause 3(3) says, that judicial notice must be taken by the British courts not just of decisions but even of "expressions of opinion" of the European Court? These are matters which I regard as offensive and unecessary and which must be changed.

I come to what I consider to be the gravest of all objections to the Bill. For the massive changes which the Bill involves, the Government have not obtained the full-hearted consent of either the British Parliament or the British people. There have been many occasions in the past when Measures have lacked public support, but the public have always known that such legislation could be, and often was, changed or amended by successor Governments. It is the clear intention of this Government—it is also the hope of the Six—that joining the Community should be for Britain a permanent commitment. Moreover, as what I have already said makes clear, accession, as we know, will affect fundamentally the power of Parliament. One may disagree a little on how much but surely nobody in his senses, having read subsections (1), (2) and (3) of Clause 2, could reject that proposition.

All countries have recognised that when major changes are to be made in their constitutions there has to be some special test of the nation's will. Other applicant countries—Norway, Ireland and Denmark—all have written constitutions, and it is part of their constitution that changes of the kind proposed should be subject to special procedures. As many of my hon. Friends will know, Norway requires a five-sixths' majority in Parliament, Denmark need a two-thirds' majority. In addition, all three countries will operate a referendum to make sure that the people understand, and if they so will it they consent to what is proposed.

We have no written constitution in Britain, but we have practices and conventions which are no less important. The last time our democratic rules were substantially changed—and that change was challenged by the Opposition party of the day—was in 1910, when proposals were made greatly to reduce the power, as it then was, of the House of Lords. A General Election was fought on that very issue; and it would have been considered a grave impropriety had the Government of the day attempted to carry out that reform without first seeking an electoral mandate.

What this Bill before us today proposes is far and away more radical than a change in the status of the House of Lords in relation to the House of Commons. For the first time in our history we are to have imposed upon us a written constitution, a constitution that we did not write or did not even help to write. That is the fact. Of course, the Government do not wish to put this matter to the test, and I do not blame them; but they do not need to do so now. Provided that they are ready to postpone the date of entry so that an election, or, if they wish it, some other serious test of opinion, can first be held, that is the basic minimum requirement for the people of this country, for the democracy of this country to continue, and for the people of this country who have faith in it.

I cannot emphasise too much how important I believe this matter of consent to be. When the people feel they are being made subject to laws in which they have played no part and taxes to which they have never consented, respect for both law and government is undermined. Our tradition for order and peaceful change is based not only on the character of our own people but on an enduring, if tacit, bargain between Government and governed that the former will play fair and will be scrupulous in how they deal with the people's rights. But if Governments do not play fair, if they behave in a way people consider to be in itself unconstitutional, there is evidence enough in British history to show we are not a docile people but a very determined and fierce one indeed.

Finally, I put to the Government a very practical reason why they must obtain the prior consent of the people before they proceed with this Measure. The right hon. Gentleman the Leader of the House confirmed to us only last week that no Parliament can bind its successor. What this Parliament has done successor Parliaments can undo—and it may need rather fewer than 12 Clauses to do it. So we must give notice now to the Government, to this nation and to the Six that we shall fight this Measure and we have high hopes and every intention of defeating it. But should the Government somehow get their way and should they succeed in placing this Measure on the Statute Book, then we warn them now that we intend to renegotiate and re-legislate. The argument will not end. No decision that they make can have more than an interim character until the people of this country have been able to vote upon it and themselves decide their own future.

6.5 p.m.

Mr. Douglas Dodds-Parker (Cheltenham)

We have listened to one of the most extraordinary speeches we have heard for a long time in this House. The right hon. Member for Stepney (Mr. Shore) would leave one with some suspicion, having listened to his speech, that he does not care for the European Economic Community, he does not care for its enlargement and he does not care for any economic co-operation at all.

What I find really disturbing, and I believe a number of hon. Members on both sides of the House will share this feeling, when one recalls, as I am able to do. the very major contribution made by the Labour Government of the postwar years, the 1945 Parliament, towards re-establishing social democracy on the Continent, is that this speech of the right hon. Gentleman will be read with the greatest sadness by all who still remember—I shall not name them all—Lord Attlee, Ernest Bevin and people of that nature who really were building up social democracy in those days.

By being put up as the keynote speaker on this occasion the right hon. Gentleman has done much to destroy all that. As we know in this House, the right hon. Gentleman has a painfully suspicious nature. I have noticed on several occasions during the time he has been in the House that he has taken an entirely unconstructive position. What really surprises us beyond anything. however, is how, if he really has felt like this about the events of the past five or six years, he could conceivably have remained a member of a Government which was attempting to negotiate just the kind of settlement which has been achieved by the present Government and which every negotiator on behalf of Labour, in this House or in another place, has said would have been regarded as reasonable and acceptable. How was the right hon. Gentleman able to accept office knowing how those negotiators were carrying on when what they were doing was, according to his speech today, entirely unacceptable?

The right hon. Gentleman spoke about Parliament being merely a future spectator of legislative proposals. He cannot have read what has been discussed over the period of the last few years and what my right hon. and learned Friend said from the Front Bench. It was a Socialist Government, under the Leader of the Opposition, who ran out just now, which set up the value-added tax and established a headquarters at Southend. This, as I understand it, was all in preparation for entry into the Community. This, as far as I know, has never been denied. It was certainly the last Government which did that. From what the right hon. Gentleman said towards the end of his speech, it is staggering that he has no personal idea of what is occurring on the Continent, at the Council of Europe or in the European Parliament. [Interruption.]

Mr. Michael Foot rose—

Mr. Dodds-Parker

No, I am dealing with the right hon. Member for Stepney. The hon. Member for Ebbw Vale (Mr. Michael Foot) has interrupted constantly during the last three or four days but with nothing constructive. I am dealing with a speech made by his right hon. Friend. I know that the hon. Member prefers talking to listening but for the moment I am dealing with his right hon. Friend. Clearly, he is entirely out of touch with anything that is going on on the Continent, as a number of his right hon. and hon. Friends on the back benches will tell him, and with what is being proposed by the European Parliament to establish some kind of control; and he does not reply to a direct point put by my right hon and learned Friend about election to and greater power for the European Parliament. Surely, when the right hon. Gentleman is speaking for the official Opposition he can give a personal view of those two points. He says he has not been given the time to do it, but this is one of the great issues which has been discussed in the European Parliament. If the right hon. Gentleman now wants to give an answer, he may do so.

Mr. Shore

Will the hon. Gentleman treat seriously what I said and my reply to his right hon. and learned Friend?

Mr. Dodds-Parker

That is exactly what I am doing, but when the right hon. Gentlemen is officially making a keynote speech on this occasion he cannot even say "Personally my view is this or that" on a matter which has been argued for years in the European Parliament, in the Council of Europe and in all-party groups in this House. That shows how completely out of touch he must be with future parliamentary thought.

I welcome the Bill and congratulate my right hon. Friends on the succinctness of it. It will clearly be a lawyers' delight, and I hope that in the course of time they will work out and regularise the intention of the House, expressed on 28th October by the overwhelming majority of 115—

Mr. Powell

One hundred and twelve.

Mr. Dodds-Parker

My right hon. Friend says that it was 112. It would have been much more than that if there had been a free vote among hon. Members on the Opposition side, as there was on this side of the House. Instead, they were subjected to a strict three-line Whip. The fact is that there was an overwhelming vote in favour of joining the enlarged E.E.C. Parliament having willed the end, as I understand it the Bill is the means to achieve that end.

I do not believe that any great new principle is involved but that an old principle has been extended, as my right hon. and learned Friend has pointed out. Let us recall the transfers of decision-making made under the N.A.T.O. Treaty by the Labour Government after the war and by our adherence to Western European Union and the International Monetary Fund. In all these, we pooled a fraction of sovereignty to facilitate decision-making by ourselves in conjunction with our friends and allies with whom we wished to have closer association. I believe that such pooling is necessary in the post-1945 circumstances, through the United Nations and other co-operation.

Clause 2 of the Bill deals with a special point and no doubt we will discuss it at considerable length. So far as it concerns the delegating of legislation, I remind hon. Members that a great deal has already been delegated by this House to Whitehall, and probably, as my right hon. and learned Friend has said, there will be need for some parliamentary method—Select Committees or some other set-up—to look into these instruments and proposed legislation.

The institutions of the E.E.C. are of a newer and more modern type. A lot of thought has gone into the establishment of the Commission and of the European Parliament. These are both organic and evolving and have, I believe, already got quite far beyond the Treaty of Rome and the 1958 concept. The consolidation of the European institutions, including the Coal and Steel Community and Euratom, is on the lines that you, Mr. Speaker, proposed in 1956 in another incarnation. I am delighted that the Bill now sets out to consolidate those institutions.

I believe that in all this, without arrogance, this country and all Members of both Houses of Parliament have very much to contribute. As the American Bar Association says when it meets from time to time in Westminster Hall, this country is supreme in establishing institutions to maintain freedom under the law. That is what I believe we are offering through the Bill. The 1930s proved the necessity for unity in Europe to my generation and I believe that this is a concept to which many people in all our political parties have contributed and to which they will contribute in future.

Those of us who attend the Council of Europe and other such assemblies find very great good will towards Britain among parliamentarians abroad as well as among officials. Like most of us, they have seen two great civil wars of Europe and are determined that the same thing shall not happen again. I believe that had the E.E.C. existed at the time, we would have avoided at least one of the last two world wars. I have instanced before in the House Dr. Bruening in 1929. I do not doubt that, if the E.E.C. had existed, we would have avoided the arrival of Hitler three or four years later. I believe that we in the United Kingdom must help to consolidate the progress made in the last 20 years and that this Bill is a method of taking part in the future development of Europe.

There are two points calling for early action. Once the Bill becomes law there will be a growing involvement of parliamentarians. We are already beginning to discuss privately with other parliamentarians and officials of the Council of Europe the future of the European Parliament. A delegation from this House went to the European Parliament some months ago and today we welcome a return visit. We have so many friends. Listening to the right hon. Member for Stepney, one would think we were among a lot of people trying to do Britain down. The right hon. Gentleman should really go out there, as an ordinary back bencher, and see the immense good will there is towards this country and the great desire to bring in our institutions and political parties in co-operation and the harmonising of policies.

About a month ago some of us were at the Council of Europe in Strasbourg and in three days we discussed the Ostpolitik, pollution, agriculture and the European monetary system. The day I arrived back, the House was discussing the Gas Bill and the Museums and Galleries Admission Charges Bill. Important as those Measures are, I wish we had more time to discuss the rather wider issues which are of prime importance to the future of the country.

Mr. Nigel Spearing (Acton)

I am glad that the hon. Gentleman has mentioned those discussions in Strasbourg. Does he realise, however, that I have been told, in answer to a Parliamentary Question, that there is no regulation under the Brussels Treaty for preventing the pollution of European rivers, including the Rhine? Can he tell us why this matter of major concern is not part of the E.E.C. legislation?

Mr. Dodds-Parker

That is the sort of thing we have to institute. That is what we will want to do in the European Parliament. That is why the Europeans want us in. They want us to introduce constructive ideas and policies. They want us to work with them to ensure that these things are done.

Secondly, we must consolidate. I believe that there are five international assemblies at the moment. There are too many of them and there is too much overlapping. We have to reduce that number and also the number of committees, shorten the procedure and strengthen the European Parliament. We must strengthen the contacts of the European Parliament with the national Parliaments, because they will have to work very closely together. It will be difficult to do this if the European Parliament and the British Parliament both sit for 150 days in the year. The workload is very considerable and we must consider this question. The right hon. Member for Sheffield, Hillsborough (Mr. Darling), who is a great expert on this, will help, I hope, and certainly Mr. Speaker and the Table Office have a major contribution to make.

Mr. Neil Marten (Banbury)

This is an interesting point and one in which I have been extremely interested. Can my hon. Friend give his own views of how the European Parliament should operate? Does he envisage Members of this House becoming also Members of the European Parliament, or would they be separately elected? What are my hon. Friend's final views?

Mr. Dodds-Parker

I do not want to take up too much time as so many other hon. Members want to speak. There will obviously be a transitional period in which a number of hon. Members will have to attend the European Parliament as a number of them now attend the Council of Europe. That will be from 1st January, 1973. But sooner or later we will have to have direct elections to the European Parliament. This is one of the things which hon. Member on both sides will have to work out. But there will be a transitional period in which the British Members of the European Parliament will have to be Members also of this House, at the same time.

I believe that the procedure of the European Parliament can be shortened and the work of the committees and the Assembly given the sort of help which we have had from Mr. Speaker and the Table Office in this House in the past. I remember that the right hon. Member for Kettering (Sir G. de Freitas), when he was President of the Assembly of the Council of Europe, tried to get the Assembly to start on time and got himself into trouble by doing so. Nevertheless, punctuality in starting is one of the little things which can add considerably to the better working of institutions.

I hope that by these two practical suggestions one can do something to ensure the necessary and growing parliamentary support for the Council of Ministers and the Commission on whom, as the Bill adumbrates, the main responsibility at the moment rests. It is too early to sum up and probably one will never be able to do so, but my generation has seen the economic difficulties of the 1930s, the nearly-too-late reaction against the dictators, the Second World War and the change from Empire to Comonwealth pass into history. Through this Bill we have a great chance to put imagination, experience and energy, especially of the young, into a new endeavour to help ourselves and others in and beyond the European Economic Community in prosperity and freedom.

6.21 p.m.

Mr. Bert Oram (East Ham, South)

The hon. Member for Cheltenham (Mr. Dodds-Parker) suggested that this debate should be seen as a consequence of the debate we had in October when there was a very considerable majority in favour of the principle of this country entering Europe. I think he will find as this three-day debate proceeds that many of us will wish to see it conducted not in the way he suggested, but in a much wider context, particularly in the context of the Government's whole approach to the Treaty of Accession and its consequences and the way in which the Government have disregarded what we consider to be the proper rights of Parliament to examine the whole question of British entry.

Of course the hon. Gentleman, and, indeed, the Government and their supporters, would be delighted if on Thursday evening all who voted in the Aye Lobby in October were found in the Aye Lobby again; but that most certainly will not be the case. I speak as one who was in the Aye Lobby on that occasion. I make no apology to anyone for having taken the difficult decision to vote against my party, but I shall certainly be in the No Lobby on Thursday night, and I am glad to have this opportunity of explaining what admittedly is a contradiction of strict logic. In parliamentary affairs it is often the case, and I believe it must be the case in this complex issue of the Common Market and Britain's attitude to it, that strict logic cannot be pursued.

Throughout the debate over the last 10 or more years on this subject, it has always been very certain in my mind that this issue is one of the most complex, most difficult, public issues that this House or this country has ever had to face. Not only is the analysis of this problem extremely difficult, but I believe factors have changed over time. Frankly, 10 years ago I spoke in this House as an opponent of British entry into Europe but I believe that certain important factors have changed. It was for these reasons, and others, that I voted as I did in October, but it was only after careful weighing of the complex issues involved that a minority on this side of the House went into the Government Lobby on that occasion.

Not only is the issue complex. When I voted on that occasion I was more than ever conscious of something that I am sure all hon. Members on both sides of the House are often conscious of—the many conflicting loyalties that we have to try to serve when we vote and speak as Members of Parliament. It is no longer the simple case, as Burke once posed it, of, "Are we delegates of our constituents or are we representatives?" Parliamentary life today is much more complex than that. There are many pulls of loyalty that we have to try to reconcile. If I were to list those which I try to reconcile they would number six or seven. There were the views expressed by my party at its conference and at its meeting upstairs here. In my case there were the different decisions of the Cooperative Congress to which I owe no little loyalty. There were representations made to me from my constituents. There was my understanding of what was in the interests of my constituents, which was not by any means the same as the way in which they expressed their views to me.

In particular, there was my sense of commitment to the Labour Government's application to join Europe combined with my assessment of the negotiated terms which I believed, and still believe, to be not radically different from those which a Labour Government would have achieved and would have recommended to this House. If therefore one has in mind, as I think we must have, in the first place the complexity of the issue and in the second place the complexity of the loyalties which we have to try to serve, it is not surprising that there is a kind of contradiction which I frankly recognise in my case in voting Aye in October and No this week.

The reason is that in debating this Bill we have come to a very different issue from the issue of principle which we were deciding upon in October. This Bill provides powers in respect of entry to this Conservative Government. We cannot separate consideration of the powers that we are asked to confer from the question of who is to exercise those powers. In my view this Government have proved completely incapable of exercising the important powers and taking advantage of the important opportunities which British entry into Europe would provide.

I take four contributions, or advantages, which attach to British entry into Europe. In each case I believe the policies that this Government are pursuing and their lack of success in administering the affairs of this country make it sure that they are not a fit body of men to take Britain into Europe.

My first point, which was in mind when I voted in October, is that British industry, certainly in the long run, stands to benefit from having available to it a much larger, duty-free market in which to sell the goods which British technology is increasingly able to produce. But the integration of British industry with the industry of Europe and taking advantage of that wider market is an operation needing considerable skill and considerable expertise in the exercise of government influences in conjunction with industry.

I ask myself: can we trust this difficult operation to a Government with such a tragic record at home, a Government which have divided workers from management through the Industrial Relations Act, a Government which have allowed unemployment to reach the present tragic heights and which are now presiding with gross incompetence over one of the worst industrial crises in living memory? We are not entitled to confer the powers which this Bill proposes on a Government with that record.

Secondly, I believe that Britain in Europe could have an important contribution to make in terms of democracy. Here I agree with a great deal of what was said by the hon. Member for Cheltenham. Opponents of British entry point to the Community's bureaucracy. They rightly point to the democratic weaknesses of the institutions of the Community. They are right to do so. They seem to think that we have in Brussels an inflexible, unchanging situation, whereas I believe that Britain in Europe could bring an important and powerful influence to bear in improving the institutions of the Community. Here again, I do not believe that we can entrust this operation to a Government which in the process of taking Britain into Europe have shown such disdain for this Parliament.

The last time the House debated these things it was as a result of the signing of the Treaty of Accession by the Government before the House had had an opportunity to debate it. The Government rested their case on the fact that this is the usual procedure for the signature of treaties, not recognising as everyone surely recognised that this is a treaty with a difference. This involves the whole economic and social welfare of the British people, and it ought to have had a very special examination by Parliament.

The hon. Member for Cheltenham described the Bill as succinct. That struck me as a euphemistic expression for a Bill which is little more than a trick of legislation and a means of bypassing Parliament over many of the considerations involved with British entry. We welcome what the Chancellor of the Duchy told us about the setting up of an ad hoc Select Committee with certain powers to examine instruments. As he was announcing that, it occurred to me that it would have been well to have had some body representative of this House which could examine the vast volume of legislation already enacted in Brussels, which this Bill will make the law of the land. We ought to have had a special Select Committee to enable Parliament to examine that amount of legislation meticulously. These are massive defects in the Bill and the Government's presentation of it. We cannot entrust the important operation of improving democratic procedures to this Government.

Mr. Marten

Did the hon. Gentleman take that view on 28th October?

Mr. Oram

I pointed out in my opening sentences that I regard this as a highly complex situation. I do not take the simplist view that the hon. Gentleman takes on this question. I envy the simplicity of his approach, to be able to see the true light through all the complexities. The pros and cons have to be weighed. It is possible to go into a Lobby recognising that in the other Lobby are people with strong arguments and genuine opinions.

The third contribution that Britain could make to Europe is related to foreign policy. When I was an opponent of entering, Dr. Adenauer was in power in Germany. In my opinion, he and others wanted to use the E.E.C. simply as an economic base for anti-Soviet foreign policies. I believed this to be against the interests of world peace. That situation has changed, and Germany is now led by Herr Willy Brandt, who is conducting his Ostpolitik, which is one of the most hopeful and significant trends in international affairs. I would like to see a Britain in Europe led by a Government anxious to work side by side with Herr Willy Brandt's Government to establish better East-West relations. This Government with certain skeletons in their cupboard over East-West relations are not the kind of Government to which this kind of delicate diplomatic operation can be entrusted.

Another contribution I would like to see Britain making in Brussels involves relationships with developing countries over aid and trade. I do not accept the view sometimes put forward that Britain's membership of the Community is inevitably and necessarily detrimental to the interests of the developing countries. There is plenty of evidence if we look at the figures to show that it may be in the interests of the developing countries for Britain to join Europe. With our unique relationship with so many different members of the developing world, having been at the head of a Commonwealth of nations, we have a unique contribution to make in Brussels. When we see Britain led by a Government with the record that they have in Rhodesia we have to ask whether that is the kind of Government that can go to Brussels and dare to suggest that Britain under their leadership understands what is in the interests of the African people. For these reasons I shall be voting against the Bill, because I believe the Government are unworthy to exercise the powers in the Bill. I believe that this country should be in Europe but that this Government are unfitted to lead us in. It is the duty of the Opposition to oppose this Bill and the enabling legislation, but I hope that we shall not do it in a purely negative way.

There is a vast amount of positive and constructive work for us to do, and I hope that the movements from which we on this side of the House derive our strength will use the coming months not only politically to oppose the Government and all their works but also diplomatically. We can exercise diplomatic influence in Europe, forging links wherever possible with the Socialist Parties, the trade unions and the co-operative movements of Europe, working out practical proposals which we, by our united efforts, will seek to implement in the years that lie ahead.

That I believe to be the task of my party, not opposing for the sake of opposition, not being negative for the satisfaction of saying "No", but facing the future realistically and getting ready for the day when we on this side of the House will be speaking for the nation, and can best speak for our nation from within and not outside the larger European assembly of nations. That I believe to be our duty, and we shall move forward to it.

6.41 p.m.

Sir Derek Walker-Smith (Hertfordshire, East)

The hon. Member for East Ham, South (Mr. Oram) confessed that his action in voting for entry on 28th October and voting against the Bill was a contradiction. With all respect, I found that confession easily the most persuasive and convincing part of his speech, which, contained a few routine and pejorative attacks upon the Government and all their works, which were misconceived and unfounded.

The hon. Gentleman sought to base his proposition on a distinction between these two matters on the ground that one raised an issue of principle and the other not. He could not be more wrong. The argument is wholly unfounded and untenable. As I shall seek to show the House in the course of my argument, the Bill raises the question of principle in a direct and clear form. It is indissolubly linked with the proposition of entry, as I shall seek to show.

This is a short Bill, but it comes at the end of a long argument. Its provisions conclusively prove, as I and some others on these benches have maintained from the outset, that entry to the Community involves as an inescapable condition substantial and irrevocable sacrifice of the sovereignty of Parliament and the subordination of British to Community law over a wide and varied range of our economic and social life. It was for that reason that I told the Macmillan Government in 1961 that I could have neither part nor lot in the thing they sought to do.

The knowledge of what is involved in entry in these respects should not surprise even those who could not see the truth in 1961, because the subordination and the sacrifice were clear to see, despite perhaps some deprecatory glosses, in the White Paper of 1967 on the Legal and Constitutional Implications. For that reason, I, again with other of my right hon. and hon. Friends on these benches, opposed the proposition of entry. On that occasion I said: Parliament here would not be able to reject or vary the regulations. The collective laws of the Community would bind the individual British citizen, and Parliament and the courts alike would be powerless to intervene."—[OFFICIAL REPORT, 10th May, 1967; Vol. 746, c. 1618.] If the White Paper of 1967 shrouded the scaffold in deference to sensitive observers, the Bill displays the axe and the block for all to see, but it is doing only what the White Paper foresaw that the Treaty of Rome requires. If the Bill is harsh it is because the requirements of the treaty are harsh. If the Bill erodes the power and purpose of Parliament and makes deep and unprecedented inroads into our democratic institutions, it is because these things are a condition of entry.

On that account it may perhaps be an odious Bill, but at any rate it is an honest Bill. Clause 2 is drafted, and impeccably drafted, to give precise effect to Article 189 of the treaty. The key words of the article are that the regulations are to be directly applicable. If Britain were to seek to join the Community and failed to ensure that the regulations are directly applicable in this country, we should be in breach of our treaty obligation. The obligation goes with membership. If we accept the desirability of membership, we accept the necessity of the treaty obligations, and the simplest way of meeting these obligations is to enact as has been done in Clause 2. The Clause has the virtue of honesty. The obligation is clear, and effect is clearly given to it.

I am against Clause 2, but not because of its drafting. I am against it for the same reason as I am against Article 189. I am against it for the same reason as I was in 1961 and 1967. We cannot logically accept entry and reject its requirements. They are the obverse and reverse of the same medal; they are linked together like Siamese twins by their nature and subject matter. To dress up the obligation in a cloud of words and schedules would have been possible as an exercise in draftmanship, but to set out word for word and syllable for syllable what is in the Community regulations—and nothing less would meet our obligation under the treaty—could not lessen one jot or one tittle the surrender of sovereignity and the subordination of our law. It could, at most, conceal it. It might perhaps conceal the iron fist, not in a velvet glove, but in some shoddy, shabby, synthetic covering, behind which the iron fist of Article 189 would remain the harsh and inescapable reality.

Clause 2 is the heart of the matter. It gives effect to Article 189 by making Community regulations what are called "enforceable Community obligations". Perhaps coyly, the draftsman has not spelt out this unattractive phrase in the Clause. He has left it to be inferred from a delicate reference to "enforceable Community rights and similar expressions". The Clause makes the Community regulations ipso facto part of our national law to be enforced as such in the courts. If the Bill is passed that will happen without the right of Parliament to amend a single syllable of those regulations, without the right to uncross a single "t" or undot a single "i". That would happen even if every hon. Member wished in his heart to reject both the form and content of what is proposed to be done.

We can trace the course of the regulation. It would come from Brussels and immediately become law under the terms of Clause 2. It would be enforced in the courts merely on the production of a copy of the Brussels regulations certified by an official in Brussels of whose existence we are unaware. It would not be possible to query the regulation, either in the courts or in Parliament. Not only are the regulations directly applicable but they are also, in the words of Article 189, "binding in every respect".

If the citizen is in breach he presumably can be committed for contempt. That means he would be liable to imprisonment until he has purged his contempt, and this means until he has complied with the Community obligations—an obligation in the formulation of which he would have had even less say than Hampden in the formulation of ship money—and we know what Burke said about that. Twenty shillings would not have cost Hampden his fortune, but the payment on the principle on which it was demanded of half that sum would have made him a slave.

What of the future regulations? Under the Bill and in law the position of future regulations will be the same as the existing regulations. The wording of Clause 2 makes that clear All … obligations … from time to time created or arising by or under the Treaty …". This means that every future regulation emanating from Brussels will be incorporated into our law ipso facto, holus bolus, lock stock and barrel, hook line and sinker, just as in the case of regulations already existing.

It is suggested that in practice we would have some say in the future regulations. But how much say? And who is "we"? It is certainly not Parliament. The regulations will be made by the Council of Ministers on the proposal of the Commission in what primarily is a bureaucratic exercise between the Commission and the permanent representative in Brussels. The Council of Ministers may collectively have some say, but collectively they are not responsible to any national Parliament. Individual Ministers may be questioned in their own Parliaments, but the answer will always be the same. They will point to the Treaty of Rome and say, "What can I do? We are powerless in the face of the Commission and our colleagues on the Council."

The debate by Parliament of draft regulations referred to by my right hon. and learned Friend might prove to be an interesting exercise, but will be largely or even wholly academic. The formulation of the regulations is dealt with by the treaty. The treaty provides in Article 49 that, unless the Council of Ministers unanimously agrees, the Commission's proposals cannot be amended. The House will see that, the bigger the Community, the less the chance of the required unanimity; the bigger the Community, the bigger the power of the Commission. Ministers will shrug their shoulders and say, "It is annoying, but there is nothing we can do about it".

These are the realities of the matter, in law and in practice. The Commission will have a great say; the permanent representatives on the Council and the Ministers collectively will have considerable say; individual Ministers may have some say; but Parliament, to all intents and purposes, will have no say. Our Ministerial representative will be unable to secure amendment unless he can carry with him each and every one of his nine colleagues on the Council. Once the Commission's proposals take the form of regulations, then immediately we are bound by Article 189 and Clause 2. We would have to swallow them undiluted at a single gulp, no matter how bitter the draught may be.

Suppose we did not do so. Suppose the House were to reject its mute, inglorious rôle. Suppose it were not prepared to accept the eunuch's rôle of titular responsibility without real power. Suppose it felt that the rights of Parliament were not or should not be at an end. Suppose Parliament had the temerity to reject, or even to amend, a regulation. Suppose Parliament sought to pit its sovereignty against the overriding authority of the Community. Parliament would clearly be embarking on a lost cause. The treaty would decide decisively against it.

The treaty tells us that community law must prevail mid that the regulations are "directly applicable". Clearly, we should be in breach of our self-assumed obligation. The treaty provides remedies for such breaches. It can be seen from Articles 169 and 171 that this is a matter first, for the Commission and then for the Court of Justice. The Community Court would decide, and Westminster would yield to the wisdom of Luxembourg.

It may be said that this argument applies only to the regulations, that if the directives will have to be applied by statutory instrument, and, therefore, Parliament will have a say. This is true, but it will be only a limited say—a say as to the form, not the substance. In the elegant idiom of Article 189, we would only have a "competence as to forms and means". The "result to be achieved" by the directive will be binding on us, and so Parliament will have only a limited jurisdiction and only a narrow responsibility. Therefore, it is a small crumb of comfort—and it is getting smaller.

Some five years ago directives loomed large on the Community scene and regulations were more occasional. In 1966 there were 753 directives and decisions, and only 230 regulations. But by 1971 the directives had gone down to something over 400 and the regulations had gone up to 2,893. Therefore, the propor- tions have been dramatically reversed. The Community now legislates overwhelmingly by regulations—by that form of procedure in which Parliament would have no say at all.

This is the reality of the prospect before us—the total subordination of Parliament over this wide range of our economic and social life. Surely Mr. Leolin Price, Q.C., was right in writing to The Times: It is difficult to believe any Englishman, however entranced by magical dreams of future advantage from our membership, could view this prospect without fearful misgivings. It is because of the strength of these misgivings that so much is made of the so-called right of veto—a right which it is suggested we have under the Luxembourg agreement—or, more strictly the record of disagreements. Aided by constant and soothing reassurances, the "Luxembourg agreement" and the "right of veto" have assumed an almost magical significance in the eyes of the more credulous and euphoric advocates of entry. The suggestion is that we or any other member State could at will insist on unanimity even where the treaty prescribes a majority or qualified majority. These matters are presented as the universal elixir against all future ills, a universal escape mechanism from all unwelcome obligations, of almost Houdini-like efficacy and ingenuity.

I am sorry to have to shatter the illusion, but I see no substance in this—like the emperor's clothes in the fairy tale. How could it have substance? How could any organisation, least of all so tightly knit and rigidly centralised an organisation as the E.E.C., proceed on the basis that collective and binding decisions would be at the mercy of the unilateral veto of one member exercising his own judgment as to what constitutes a thrreat to his own country's national interest? The proposition has only to be stated for this absurdity to be apparent. A darts club could not be run on that basis, let alone the most centralised, most institutionalised, most bureaucratic and most multinational organisation ever moulded by the act of man.

One Minister could claim that a regulation without amendment would prejudice the vital national interests of his country. Another Minister would counter-claim that if the amendment were made it would prejudice the vital national interests of his country. What then, if the matter is not to be resolved by law, by the Court of Justice in the clear terms of the treaty, and if for these there are to be substituted the amorphous, imprecise and impracticable provisions of the Luxembourg record of disagreement? How will matters be decided? It can only be by the chaffering of the market place, by a trial of strength, by the law of the jungle. It reduces this noble concept to a free-for-all, catch-as-catch-can, devil take the hindmost operation, and the edifice of co-operation and idealism—the raison d'être of the Community—would quiver and crumble in the dust.

The Luxembourg arrangements will not protect us. No right of veto will save us from the rigours of the treaty or free us from the obligations that we are asked to assume. Let there be no illusion about this. I must say to right hon. and hon. Members who cherish any such illusion, in the words of Hamlet's exhortation to his mother, Lay not that flattering unction to thy soul. We have this position. The Treaty of Rome imposes severe obligations and constitutional sacrifices on all who seek membership. These obligations will be imposed on us and these sacrifices required of us are without mitigation or abatement.

But it is said that other countries have made these sacrifices and not found them unduly irksome. I cannot accept that as a parallel. In saying that, I mean no disrespect to the Six. I have never said, and I never will say, that our institutions are better than theirs, still less that they would suit their countries better. All that I have said, and all that I say now, is that they are different. In the context of parliamentary institutions and the sovereignty of Parliament, we are not comparing like with like.

Our parliamentary institutions are the product of a slow unfolding over the generations. Here where we sit today parliamentary democracy had its genesis, cradled in the care and fostered by the faith of our forefathers. The Six, by contrast, are mainly young in nationhood and younger still in parliamentary institutions. Of the Six, only two have histories as nation States of substantially over 100 years. Two practice, in substance or in form, a presidential system. Only the Bundestag has a Question Time on the British model, and the Bundestag sits on average only 45 days a year. In the Netherlands, Oral Questions average only 10 a year. It is true that there is a half-hour Question Time each sitting day in Belgium, but there are no supplementary questions. Clearly, there is no precise parallel. None of the Six has parliamentary institutions with the deep roots, extensive rôle and high regard obtaining here.

Let there be no mistake: we would be asked to make a sacrifice beyond that exacted from others. Our sacrifice would be greater because of our long and deep attachment to parliamentary institutions. It would be greater, too, because those other countries at least had a share in fashioning the laws to which they owe obedience, whereas we would be bound by laws in the making of which we had no hand.

I do not want to see this Bill on the Statute Book. I wish the Government well, of course. But I believe that the Government and the country would be better off without the Bill. If the Government do not get the Bill, it will mean that the Prime Minister's expressed condition of entry is not satisfied: there will be no full-hearted consent of Parliament. It will show that the vote of 28th October was not meaningful in that the purported majority for entry was based in large measure on shifting sands, on the votes of right hon. and hon. Gentlemen opposite who, having purported to will the end, refuse to will the means.

The vote on this Bill, in a more meaningful and practical sense, will be a vote on the principle of entry. I say with clear confidence that if the Bill is not carried Britain will never join the European Economic Community. For me, that would mean the end of a 12-year struggle, as it would for my right hon. Friend the Member for Thirsk and Malton (Sir R. Turton). But it would not only be an end. It could be a beginning. It could provide a new chance for the Government, if they will take it, to shake off the shackles of the Treaty of Rome, a chance for the Government to seek new forms of co-operation by way of association, not integration, a chance for Britain, in the Churchillian phrase, to be …linked but not comprised, interested and associated but not absorbed. It would give Britain a chance to seek new friendship with the Six, strong and sincere, close, cordial, and in full conformity with our traditions, our sovereignty, our institutions and our way of life.

7.5 p.m.

Mr. George Darling (Sheffield, Hillsborough)

The best I can do in following that powerful, lucid and extremely critical speech is to say that, even if I were enthusiastically in favour of Britain entering the European Economic Community, I should have very grave doubts about whether I ought to support the Bill until the criticisms and the questions had been dealt with properly.

I want to raise some rather narrower questions dealing with the procedures and the methods of working of the Community, especially in terms of the European Parliament, which is the question that was asked by the hon. Member for Banbury (Mr. Marten). However, before I do that, I want to express a critical view of an aspect of our discussions which I find extremely irritating.

Towards the end of his speech, the Chancellor of the Duchy of Lancaster said that the Bill would enable us to play our full part in helping to create a united Europe by our joining the Economic Community. My hon. Friend the Member for East Ham, South (Mr. Oram) said more than once that we were discussing an application to join Europe. Of course, it is utterly misleading to talk about our going into Europe or our helping to create a united Europe by joining the Economic Community. We are already in Europe, and we shall play our part in helping to create a united Europe regardless of whether we join the E.E.C.

It is well to point out that, even if the E.E.C. is enlarged to 10 members, it will still be only a part of Europe. There are 28 European sovereign countries, excluding Russia and places like Lichtenstein, Andorra and the Isle of Man. There are 18 which will be outside the Community. Some will apply for associate membership. But half of the European countries will still be outside the Community. What I find unacceptable in the statements that we hear from the Government is that we have no proposals before us for bridging the divisions which exist in Europe at present.

I was glad to hear the right hon. and learned Gentleman give his views about how he proposes that this Parliament should examine and approve or otherwise the Community's proposed instruments. Apparently we have to accept all that has gone before. We are now looking to the future. We need to know the extent to which our examination of those instruments will give us authority to amend them. This is a point which has been raised by a number of hon. Members before. We want to know whether the regulations, the directives and the decisions which will come from the Commission will be submitted here before they go to the Council of Ministers and what we can do with them.

I am very glad that we are to have an ad hoc committee of both Houses to examine the regulations, the instruments and the decisions. But I need to know a great deal more about the composition and authority of that committee. I assume that it will be a Select Committee. Will it bring forward proposals to this House on how we should deal with the regulations and whether we should accept, reject or amend them? If the committee brings forward its own proposals, will we have authority, before any decisions are taken by the Council of Ministers and by the Committee of permanent representatives which now seems to be the key organisation in the Community, to reject, to amend or to do anything more than merely express an opinion?

I suppose that we have to discuss and question the Bill on the assumption that it will be passed and that we become members of the Community. One decision which has to be taken if we pursue it in this way is how we would play our part as a member of the Community in making it more democratic.

The Minister will probably know—at least, he should know—of the proposals which have been put forward by the Socialist Group in the European Parliament. That is the largest single political group but, I regret, not the majority group. The Socialist Group is concerned, as all of us are, about the lack of democracy in this whole set-up and it has put forward some proposals. I will not go through the whole lot, but four of them are extremely important.

The first proposal is that the directives and recommendations from the Commission should be submitted to the European Parliament for approval before submission to the Council of Ministers. The second is that the European Parliament—at the moment it is only an advisory council; it has not authority to do anything—should have debates in which Ministers are compelled to take part, as they do in this House, to defend their views and decisions.

The third proposal is that the European Parliament should have authority to initiate regulations, directives and so on. The most undemocratic part of the Community is the fact that the Commission alone has authority to initiate anything. If the Commission does not initiate anything, the Council of Ministers is paralysed; it cannot do anything. The European Parliament is useless because in the treaty, as every hon. Member knows, the Commission alone has the authority not only to initiate all these laws, regulations, decisions and opinions, but the power to amend them. Nobody else can amend them. It may be true in practice that the views expressed by Ministers, by the national Parliaments and by the European Parliament influence the Commission to amend some of the proposals which it may bring forward, but it is well to know that the Commission alone has this authority. Therefore, the Socialist Group in the European Parliament has put forward these proposals to get a much greater degree of democracy.

The fourth proposal, which is perhaps the key to the whole situation, is that the European Parliament should have greater control of the budget, the financial arrangements and taxation systems of the Community.

The question I now ask the Government is whether, if we become members of the Community, our representatives at the European Parliment and our representatives on the Commission and on the Council of Ministers will all work together to support the Socialist Group's view on how to achieve greater democracy in the European Economic Community. If we have the assurance that they will generally support these propositions, that assurance should receive some indication in the Bill itself. I think that can be done. I have looked at Clause 2 and tried to understand what is to me an almost incomprehensible collection of words. Having used the word "procedures" in Clause 2(2), it should not be beyond our ability to put forward Amendments to extract the Government's views on the procedures.

I now come to the question which was asked by the hon. Member for Banbury. If we democratise the European Parliament and give it greater control in a democratic fashion over the Community's activities, it will have to meet more frequently. I think that there are now 10 Assemblies a year. That means that a member of the European Parliament is tied up in Strasbourg, Luxembourg, Brussels or wherever it may be for more than 100 days a year. I raised this matter in the previous debate and got no answer from the Government. How do the Government propose that a Member of this Parliament, with constituency obligations and the rest, shall spend 100 days or more in Strasbourg or Luxembourg? It just cannot be done.

Who will represent this Parliament in the European Parliament and play a full part in the work there? If the European Parliament has greater control over the Community, the work which will be done in Strasbourg will not be just sitting around and asking vague questions of the Ministers and the members of the Commission; it will be as active a part in that Parliament as we play in this Parliament.

How are the 36 Members to be elected or appointed? We cannot wait much longer. If the Bill goes through we shall be there as full Members next year. Obviously we ought to have Members going along as observers this year to get the feel of the place and to understand what goes on. My right hon. Friend the Member for Fulham (Mr. Michael Stewart) has an idea that we should divide the country into 36 constituencies and elect an extra Member at the next General Election for each of those larger constituencies, which would represent one-thirtysixth part of the country. I do not know whether that is feasible.

We do not want to end up with 36 Members of the House of Lords going to Strasbourg. That would be disastrous. We must also make sure that whoever goes, whether appointed or elected, has some association with the Select Committee which will examine all the legislation, the administration and the finances.

I am convinced that at the moment the Government have not the faintest idea how to deal with the situation. It is no use saying that this matter has only just been raised. I am not the only Member who, in the debates we have had over the last year or 18 months, has persistently asked the Government what they intend to do about representation in the European Parliament. The thoroughly undemocratic character of the E.E.C. is the part which needs to be amended by British initiative if we go in.

I want to offer some constructive suggestions about the division of Europe. If we want a peaceful, expanding and united Europe, we must seriously consider the relations between the E.E.C. and other European countries which are not members. We must make greater use of the institutions that already exist which can be used to bridge the divisions and to get common policies on a whole wide range of issues on which the members of the Community can play their part, but only as members.

The first, of course, is the Council of Europe. At the moment it is only a talking shop but it has produced a number of useful policies which Governments have put into operation. I suppose its greatest achievement is the European Convention of Human Rights. But there is a great deal to be done among the 17 democratic countries of Western Europe which belong to the Council in harmonising policies. Even more important, the 17 countries would include the 10, if the Community is enlarged to 10, as well as the associated countries and those which are not associated, to discuss common economic policies.

But this has to be taken further. There are many issues, not only in economic policy but in questions of environmental policy and of pollution, in which the Iron Curtain is complete nonsense. There must be co-operation between East and West.

One of the first institutions set up in Europe for co-ordination of policies, which is still in existence, is the United Nations Economic Commission for Europe. It still works, but not effectively, because we have paid far too much attention to the Economic Community, the Council of Europe and the Western European Union and not enough to this bridge between East and West. I hope that better use can be made of it.

We want to make sure, if we enter the Community, that it becomes more outward-looking than it is at the moment and that it is concerned about the countries outside, particularly the developing countries. This can be achieved by a proposition now being actively discussed within the Council of Europe that the Council should arrange one session each year at which a special O.E.C.D. report on European economic development will be discussed and the relations between the rich countries of Europe and the developing world will also be taken into consideration. This would mean that the Council of Europe would for the first time provide a parliamentary forum for the discussion of O.E.C.D. reports, which, I think hon. Members would agree, are generally the most constructive and best-informed reports on economic developments throughout the world.

But in order to have this outward-looking discussion, the democratic countries of the O.E.C.D.—I stress the word "democratic" because there must be parliamentary representatives involved—which are not in Europe would also be invited to attend these discussions on what would then be worldwide economic policy—the United States, Japan. Australia, Canada and New Zealand.

This is a very important proposal and I hope that it will come to fruition. But it should be reflected in the legislation which we are bringing forward This should not necessarily be done in precise terms, but the need for a reappraisal of European institutions if we enter the Common Market should be implicit in the discussions on this Bill and perhaps implicit in the Bill itself by, if it is possible to do so, putting forward constructive Amendments—perhaps to Clause 2 and Schedule 2—so that these proposals might be written into the Bill.

But, given the Bill as it is and given my views on making everything more democratic in Europe, I certainly could not vote for the Bill as it stands.

7.25 p.m.

Mr. Peter Hordern (Horsham)

I hope that the right hon. Member for Sheffield, Hillsborough (Mr. Darling) will forgive me if I do not follow his arguments. There must be at least 630 different ways of looking at the Bill, but in two days' time we have to come to a decision. I should say immediately that I am a supporter of the Bill. I have come a very long way since my original very ardent support for Europe soon after the war and in the 1950s, although I thought then that there were material advantages in joining Europe, and I still do. I thought then that we could exert more influence within a large and unified Europe than if we were to remain outside, and I still hold that view.

But Europe has changed in many respects since the Treaty of Rome was signed and that is now the Europe which we shall be joining. My attitude has always been and will always be to seek to do what will best serve British interests as one sees them. I am not swayed, as are some hon. Members, by the common welfare of Europe as a means of serving British interests best. I very much doubt that it would. I say this not because I have any philosophical or constitutional fear for our sovereignty but because there are certain proposals now within the Communities which do not accord with our best interests or, ultimately, with the interests of the Communities themselves and which I think we should do our best to see do not come about.

That is why I take very seriously my right hon. Friend the Prime Minister's assurance that no country's vital interests would be overruled by other members. I rely on this safeguard and on the practice in the Council of Ministers of the unanimity rule. I assume, of course, that we have vital national interests, since there would otherwise scarcely be any point in having a defence for them.

The vital national interests which occur to me are those which refer to the defence of our right to act in our own defence and to take our own actions in the service of our own economic interests. So I must declare at once that I do not regard the forced movement towards economic and monetary union to be in that category at all.

Ultimately, of course, I believe that monetary and economic union is desir- able, just as I believe that sunshine and rain, in appropriate quantities, are also desirable. It all depends on where one happens to be at the time. But the point is that both must be allowed to happen naturally.

There is no provision in the E.E.C. Treaty for economic and monetary union. Article 104 lays down that Each member state shall pursue the economic policy necessary to ensure the equilibrium of its overall balance of payments and to maintain confidence in its currency whilst taking care to ensure a high level of employment and stability of price levels. If that article means anything at all, it is an article in defence of a national view of a country's economic policy.

I therefore admit that I was not much moved by the Community declaration at The Hague in 1969 of its intention to move towards economic and monetary union, or by the Werner Report. When the German mark floated last May and the international monetary crisis occurred last August, any mild apprehensions I might have had that something might be done about economic and monetary union disappeared altogether when other currencies started to float.

Nor was I moved by the Washington agreement which meant that currencies returned to fixed rates though with much wider margins. This arrangement, though not as good as freely floating rates would have been, seemed to me as much as could reasonably be hoped for at the time, particularly if changes in the parities became more acceptable as time went on. But now it seems that those promising arrangements are on their way to being reversed. It looks as though President Pompidou and Chancellor Brandt have agreed to implement the Werner proposals concerning narrower margins and even to co-ordinate their economic policies. That is, after all, what economic and monetary union is all about.

The consequences of monetary union are very considerable, however, because it can result only in a loss of national political control of economic policy. If we are to have exchange rates which do not vary one from another, there must be a common rate of growth, and even of inflation. These rates of growth will not be settled by us or by the Government in power at the time. They will be settled by a body of bureaucrats who will probably, indeed almost certainly, not be responsible to our constituents. Regional policy, too, will be settled by them. Eventually, if the logic of monetary union is carried out, we shall not be able to decide to reduce taxation or to increase public expenditure as we may wish.

All these I take to be matters of vital interest to us. I am not in the least impressed by the idea that we could be Members of a European Parliament which could decide these matters, nor can a wider responsibility ever compensate for the total responsibility to our country that we bear as Members of this House. If we are to safeguard our vital interests, those interests lie in preserving our right to change the parity when we wish or, better still, to let it float. They lie in doing or not doing those things which are designed to improve the lot of our people, and our people alone. That may sound to some like an insular attitude. That is as may be, but I firmly believe that the cause of European unity, to which I am attached, is best served by the free movement of people, capital and goods between our countries. This is the process required to create that identity of interest which alone can bring about real and substantial European unity.

It seems that the force behind the movement towards a common currency is motivated more by a desire to act in concert against the dollar, especially against the Eurodollar, than to get monetary union for its own sake. I should have thought it would be possible to find other means to accomplish that objective. I hope that our entry into Europe will strengthen the competitive and liberal forces in a larger market, from which we have much to gain. When capital is allowed to move freely within the Community, sterling could become the currency of settlement and there would then be a natural demand for it to be the common currency of Europe. Let us not in the meantime be in any hurry to do anything which may limit our freedom to move in our best interests. That is, after all, what we were sent here to safeguard. Regarding economic and monetary union, it would be best to do very little very slowly and to preserve the right to say "No".

Mr. Marten

Have not the Government given a pledge on the question of economic and monetary union that they will move as far and as fast as the Six? Therefore, how can that be answered?

Mr. Hordern

My hon. Friend is right in mentioning that point. I have taken it most carefully into consideration. I hope that the Government will move as fast and as far the the Community will move in the direction of economic and monetary union, and I hope that the Six will not move at all in the direction of economic and monetary union. I believe that that will be the position.

But the Bill is, happily, not confined to economic and monetary union. I regard it as a passport to a wider community of nations in Europe. No one can tell with certainty how this Community may develop but I am certain that we should be part of it. That is why I support the Bill.

7.35 p.m.

Mr. Austen Albu (Edmonton)

It is a good thing that in the speeches of my right hon. Friend the Member for Sheffield, Hillsborough (Mr. Darling) and the hon. Member for Horsham (Mr. Hordern) we have been directing our attention to the future and not to the rather sterile arguments of the past. It is extremely important that during the debate we discuss the policies which the Government would pursue, or which the present Opposition would pursue if they were the Government, if the Bill is passed.

The hon. Member for Horsham made a speech very largely dealing with economic and monetary union, to which I also intend to refer. My remarks will be necessarily from the point of view of a Labour Member of Parliament and a Socialist, and not from the point of view of a Conservative as that of the hon. Member. There will be differences, therefore, and that is very important.

I have never underestimated either the dangers or the difficulties of joining the Community, but I happen to believe that the dangers or difficulties if we now exclude ourselves will be very much greater. I accept that there is bound to be some derogation of sovereignty although we may all argue as to how far we are prepared to go. Perhaps I am prepared to go further than the hon. Gentleman.

The speech made by the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) was based on the principle that he would not accept any derogation of sovereignty or any derogation of the powers of this Parliament. My right hon. Friend the Member for Stepney (Mr. Shore) believes that the Community is a monolithic and hostile body. I do not believe that. I believe that we are about to enter a body in which we shall find friends on some matters and other friends on other matters, but, in any case, a body and a series of institutions which will change over the course of years.

Those who talk about the long period of slow growth of parliamentary democracy in this country should remember that the pace of change at present is very much greater, and we cannot expect an institution in this country or our relationship to the rest of the world to remain static. The dangers and difficulties which undoubtedly will arise from our entry into the Common Market can be overcome only if the Government have a clear and well thought out policy of advance and reform for the Community. It is appropriate that this is what we should be discussing on the Second Reading of the Bill.

It is clear that the policies which would be advocated from these benches will be different from those advocated from the Government benches. We should expect also that the Socialist and Social Democratic Parties in Europe would support the policies that we put forward, and no doubt they would be opposed by the British Conservative Party and by its allies in Europe. But the political future of the Community depends upon developing the politics of social interests and upon those politics replacing the politics of national identity.

Therefore, I believe that we on these benches have a duty to formulate cur own policies because, whether or not the Bill is passed, it remains, as I understand it, our policy in principle to join the Community. No one believes that there will be any very rapid advance towards a federal Europe. In fact, very few people in Britain understand what federalism means, and the words "federalism" and "confederalism" are often used as though they had the same meaning when, of course, they do not. Therefore, I do not believe that the new Europe of the Community of 10, as it will be in the near future, will become, if it can ever become, a major world power. But if it is to make progress in both the economic and social spheres as well as at the level of international policies I believe that the central policy-making institutions will have to become stronger and not weaker.

I give as an example the common agricultural policy, about which there is general agreement that there must be substantial changes, both in the interests of the people of the member States—and not only in the interests of our people, because many of the other people in the countries of the Community would like to see those changes—and in the interests of international trade. It is unlikely that such changes in a direction of which we would approve—I do not mean the actual abolition of the common agricultural policy—will take place if the pressures of interest groups on individual national Governments forces them to use the veto, which the hon. Member for Horsham was so fond of.

Although major changes of policy must still for a considerable time, I suppose, be subject to the unanimity rule, I believe there must be a speedy enlargement of the areas of policy determined by the qualified majority. No doubt this must lead to substantial institutional changes in the Community, especially in the direction of greater democratic control along the lines which my right hon. Friend the Member for Sheffield, Hillsborough discussed.

While I am on the question of institutions, I should like to ask the Government some questions about staffing, both about the British members who will join the Commission and about the British delegation that represents British interests. I realise that the Diplomatic Service will see the advantages for its members of service in Brussels or Luxembourg, but there are disturbing rumours of the reluctance of other Departments to treat service there as a priority instead of a backwater.

This is an extremely important matter. The development of the central organs of the Community cannot depend on occasional pitched battles at the summit, but must depend on the day-to-day work of staff of the highest quality. If the Community is to develop as I should like to see it develop, as a really powerful world regional grouping, but also if British interests are to be properly protected, we want not only a staff of very high intelligence but a staff given a very high level of leadership, a staff very loyal to what they are doing. The representation of British interests is vital if the support of the British people for the Community is to be strengthened.

I hope to see the Commission move away from the trivia of regulations, which always create such hilarity in the House, and start developing policies to deal with the great economic problems facing the world. I have already mentioned the common agricultural policy, which is bound to change over the years ahead. Associated with that must be the negotiation of trading rules with the rest of the world to ensure an expansion of world trade and not a decline into economic nationalism which would hinder the growth of Community unity. The coordination of economic policies, which is bound to come and which I very much favour, will lead in the end to economic and monetary union, but it must precede it. We cannot have an economic and monetary union if we have not gone much further in the co-ordination of economic policies.

These developments must not be looked upon as ends in themselves or, as M. Pompidou seem sometimes to think, as means of establishing a sort of metaphysical European identity. Common economic policies and eventually monetary and economic union are worthwhile only if they are thought of as instruments for greater economic and social wellbeing. The Europe of the Community is not just an alliance of nation states; it is also an economic integration of disparate regions differing very much in natural resources and degrees of economic prosperity.

What proposals have the Government for a European regional policy? Are the Government sufficiently aware of the need to have such a policy agreed before there can be move towards more rigid European exchange rates? That, too, is an extremely important matter.

I turn to something, rather different, the question of the large international companies, a matter that must be of considerable interest to our trade unions, which I hope are developing European strategies with their European counterparts. If there is not a concerted European policy for the control of such companies, they will control us by playing off one country against another.

I turn next to Europe's rôle in world affairs. So far, in spite of many conferences and meetings, this has made little progress nor do I expect a great deal from the summit meeting this year. Presumably the Government do not believe, any more than I do, that European security is possible in the foreseeable future without the support of the United States. One reason is that it will be many years before the Community generates sufficient central authority to become a great power on its own, and maybe it never will. Meanwhile, its influence will depend on the degree of cohesion it can develop. This will depend not only on economic integration but also on the development of common international and defence policies Now that there are no disturbing personalities on the scene, this should be rather less difficult.

At the end of a long period of peace—we have already had in Europe 27 years—with growing world co-operation in trade and technology and such matters as pollution, Europe, protected by the nuclear peace of the great Powers. should be able to exercise a powerful influence in the world—not, as some people once thought and some may still claim, as an alternative to adequate military defence but as a result of its success. If this situation is recognised by the Soviet Union, it may be that for the first time in history Europe can look forward to permanent peace and civilised cooperation.

The increasing policy formation by the central organisations and the enlargement of the field of policy not subject to the unanimity rule imply a greater degree of parliamentary scrutiny and control. I am glad that a great deal of today's debate has been devoted to discussing how we can develop machinery of control by a European Parliament, the procedures for the direct election of its members, and their relations to our own Parliament.

It is essential also that we ensure—this will be a Government responsibility—adequate debate of matters within the competence of the Community organs if we are to maintain an informed public opinion and interest. We must not let this slip away into occasional debates of a rather boring character. Community affairs will play a substantial part in our lives, and it is important that we maintain an interest in them in this House.

On a slightly less friendly note to the Treasury Bench, I must make some remarks addressed to the Prime Minister. If our entry really is the greatest issue for this Parliament, as I suppose he believes, he has gone about it in the most extraordinary way. To go into Europe we needed the strength to defend our own interests and to help to develop Europe. We needed a united, confident nation. As my right hon. Friend the Member for East Ham, South (Mr. Oram) said, what we have had instead is unfair and divisive policies that have produced a nation which is, by common consent, more divided and dispirited than at any time since the war.

Entering the Community is not just a technical, legal or constitutional matter. With the right leadership, it could be the opportunity to play a great part in world developments which would bring the greatest benefits to our people, their children and their grandchildren.

7.48 p.m.

Mr. Charles Fletcher-Cooke (Darwen)

There has been a great deal of discussion about whether the vote we shall take on Thursday night is a vote of principle. To my mind, it clearly is. It is not a new principle. It is the same old principle—whether it is worth a curtailment of our powers of initiative in exchange for the economic benefits that entry will give. It is the same old principle that was debated at length in the last Parliament, has been debated in July and October in this Parliament and is now to be debated again. But there is no change in the factors.

The hon. Member for East Ham, South (Mr. Oram) tried to explain why he will vote differently on Thursday from the way he voted on 28th October. He did not suggest that there was any difference in the principles or that the Bill would not carry out a promise or threat, which- ever way one likes to look at it, given in previous White Papers. He said that the pressures of six or seven conflicting loyalties had been brought to bear and that he did not want to give the present Conservative Government great powers because since October they had shown themselves too unworthy to have them.

Taking the last point first, the complaint against the Bill is not that it gives us great powers but that it takes powers away. We are constantly told that powers will be going from London to Brussels. If the hon. Gentleman does not like the present Government, the more powers that are taken from us the more he should be delighted. It is clear that this is a question of principle. It is no good pretending otherwise. The principle is well known and it is the price we have to pay.

My right hon. and learned Friend the Chancellor of the Duchy of Lancaster said that there was nothing in the Bill that abridged the sovereignty of Parliament, and there is a case for that proposition. The question is not so much whether this Parliament can subsequently pass whatever legislation it likes or whether the Royal Prerogative is somewhat diminished by this Measure, as it clearly is by the words that were first uttered by my right hon. and learned Friend in introducing the Bill. For example, the right of veto is undoubtedly affected by the obligations that we are undertaking.

The real question is what the courts will do if a situation arises in which subsequent legislation of this Parliament appears to conflict with the regulations of the Council or decisions of the European Court.

I find in this Bill no guidance to the courts on that important point. There is nothing wrong with the Bill so far as it goes, but it does not go far enough in that it does not give the courts guidance in what will be the crucial matter, indeed in what has already been a crucial matter in the courts of the Six. There is nothing in the Bill which tells the High Court what it is to do if legislation subsequent to our entry into the Community or Statutory Instruments are passed which the courts think conflict with the regulations or the Treaty of the Six.

The courts should be given this guidance because the problem has vexed the courts of the existing Member States. The courts of the different countries have operated in different ways. It is not enough, therefore, to say—as I am sure the Government will say; perhaps the Solicitor-General will say it on Thursday—that we must see how we get along—solvitur ab ambulando. That sort of pragmatic approach which Governments are apt to adopt is not good enough in view of the way this problem has afflicted the courts of the Six.

For example, in Italy there has been the case of Costa. There was a dispute as to whether the manner in which the Italian Government had nationalised their electricity undertaking was or was not in breach of the treaty or a decision of the European Court. Although the constitutional court of Italy decided that Mr. Costa must pay his electricity bill and that the Measure which the Italian Government had passed was constitutional, nevertheless a puisne judge in Milan decided that it was not. This illustrates the need to give guidance to the courts rather than to insist on complete sovereignty for Parliament. Despite the decision of the constitutional court of Italy and of the Italian Government, Mr. Costa need not pay his electricity bill and he has never paid it. He therefore defied all the forces of the Italian State, judicial, executive and legislative, with success.

In Belguim the courts and all the organs of Government insisted on imposing a tax on the import of milk and that country's courts upheld the Belgian proposition, until that awful day when the European Court said that the tax was totally unconstitutional and in conflict with a decision of the Six. The Belgian Government have had to pay back billions of Belgian francs to those who had already paid the tax.

Then there was the case of Algerian semolina, to which I have referred before. The French insisted on allowing the free entry of this and other products from Algeria into France contrary to the rulings of the Commission and the European Court. Typically enough, the French courts upheld the national rather than the international decision, and there it rests.

We therefore have in bold relief three cases of such conflict. The courts of England should be given guidance in the Bill as to which way they are to behave if such a situation were to arise here. But I find no such guidance anywhere in the Measure. It is assumed that the legislature and Statutory Instruments will always continue in harmony with Brussels and Luxembourg. Even by inadvertence that may not occur, yet no guidance is given to the courts on that point.

Indeed, there are in some cases suspicions of the suggestion that this Parliament will still be able more or less to do what it likes. I am not taking an extreme position. Sometimes it is suggested that we shall be able to with, draw altogether and tear up the treaty. That is clearly within the competence of this Parliament, though in my view it would not be desirable to do anything of the sort. But that is not what I am now talking about. I am considering the situation where, although we seek to remain a member—or shall we say not daring to leave—legislation is passed which conflicts with European requirements, particularly in fiscal matters. Suspicions are aroused that although we are paying lip service to the price that we must pay, the Bill does not go as far as we are in duty bound to go.

For example, in the famous Clause 2(2) about which we have heard so much we find that when we are obliged to make provisions for implementing Community obligations the word "may" is used. We read: any designated Minister or department may by regulations do this, that and the other. In subsection 2(b) we read that the person entrusted with the power or duty may have regard to the objects of the Communities and to any such obligation or rights as aforesaid". There is no option. It is not "may" but "shall". The same is true of Clause 5(7). There are in such matters, for example, small indications in the repeal Schedules that repeals of the existing legislation shall take effect from such date as the Secretary of State "may" by order appoint. He has very little option in the matter. He must order such repeals to take effect on either 1st January, 1973, or such later date as the transitional provisions allow, otherwise we are in breach. Therefore, I am not persuaded in my own mind that the necessary comprehensiveness or clarity is to be found in the Bill as regards these directions to the courts.

There is another mater which causes some trouble to lawyers, and this after all is the lawyers' day. In July and October last we had the economists' beanfeast when they were telling us about the advantages or disadvantages of joining, but this is a legal matter and, therefore, we should examine the legal consequences and the legal gaps very seriously. My right hon. and learned Friend referred to Clause 3(2), by which Judicial notice shall be taken of the Treaties, of the Official Journal of the Communities and of any decision of, or expression of opinion by, the European Court…as aforesaid. That is the meaning of the treaty's regulations and directives—judicial notice shall be taken. My right hon. and learned Friend said that this imported the jurisprudence of Europe into the British legal system.

"Jurisprudence" is a big, grand, Oxford word not used at the university from which my right hon. and learned Friend and I came, and I do not know what, in its vagueness, it means in this connection. Does it mean, for example, that the courts of law in England do not use the system of interpretation of Statutes and Statutory Instruments they at present use when construing a European regulation? The method of construction of legislation in this country has grown up through the centuries. It is very large in volume and great learned works are written about it, and it has at present a certain artificial character.

For example, as hon. and learned Members, and perhaps others, may know, one may not look at the travaux preparatoires. One may not cite speeches made in the course of legislation. One may not, except with great exception, look at the White Paper which came before the Bill. One way not try to gather the intention of Parliament from what was said in Parliament at the time. This is a fairly rigid rule. Some object to it, others believe it means that litigation is much shorter than it would be if one were allowed to bring in this great mass of stuff. Whether that is right or wrong I do not know, and for the moment I do not care.

What I care about is whether in interpreting these many regulations and treaties the courts in England have to adopt the English method of interpreta- tion or to adopt a continental method of interpretation; that is to say, do they use a different instrument? Do they use the European instrument—because they are quite untrained to do so at present—for construing European documents? One would have thought they would have to do so since there is an appeal, although that is not quite the right word, to Luxembourg. There is a provision, and indeed a mandatory provision, in the case of courts of appeal by which in case of difficulty, or if the matter is raised by either of the parties before the court, the matter goes before the European Court. There, of course, the method of interpretation will be quite different from ours.

One would think, therefore, that the lower courts in this country would be bound to employ the European method of interpretation, which is quite different from ours and in which they have no training. This may sound a small point but to my mind it illustrates the lack of guidance which courts are to be given in future when they have actually to do the task which this House will be imposing upon them by passing the Bill. Therefore, although the Bill is a very neat and artistic job, to my mind it begs a very big question: the question of what the court is to do in the case of such conflict, that conflict being whether legislation subsequent to our entry into Europe, legislation from these Houses of Parliament, is to be preferred by the judge if he nevertheless believes that it conflicts with a European regulation. I hope I may be given some aid and comfort in my worry on that point.

It is a big matter, so big that one wonders whether quite enough attention has been made to the imminence of this. Again, one can only instance this from one's own small researches. As Members of this House may know, I am very interested in competition policy. I have with me one of the 42 volumes of secondary legislation, that on competition policy, and I have been reading the legislation on that because it is one of the things that comes into force in the law of England immediately. There is virtually no interim period. But if we are legislating for England in the course of the Bill, as we are, this must be up to date; and even in this volume, which is part IV of the European Communities secondary legislation, there is no copy, nor is any copy available, for example, of Regulation 2821/71 which was made two months ago. It is not possible to find an English text of it. There is a French text but no English text is available.

I know the enormous mechanical difficulty in doing what the Government seek to do but if it is to be translated into English law and applicable in England in a very short time we really must have up-to-date translations as these regulations are issued so that we know in what form we are altering the law of England.

Mr. W. Baxter

I am listening with great attention and interest to what the hon. and learned Gentleman has said. I wonder whether he would be prepared to give way so that we could have an immediate reply from the Front Bench to the very important point he has raised.

Mr. Fletcher-Cooke

I should be very grateful for this flattery from the hon. Member but I think it is rather a Greek gift. I believe I said in the course of my opening remarks that I hoped my hon. and learned Friend the Solicitor-General would reply to some of the things I have been saying because, as we know, he has been responsible for the brilliant condensation of the Bill which we all admire. I should have thought he, if anybody—even with the great respect I have for my hon. Friend the Minister of State, Treasury, whose brain in all fields is that of a polymath—might be a suitable respondent.

The Minister of State, Treasury (Mr. Terence Higgins)

I am grateful to my hon. and learned Friend. He said earlier that the economists' beanfeast was over last October. Therefore, I hesitate to intervene on a point of substance. I assure him that my hon. and learned Friend the Solicitor-General will have his attention drawn to my hon. and learned Friend's remarks.

Mr. Fletcher-Cooke

I am much obliged to my hon. Friend. I could go on with these details, which are important although they may sound very small.

The only final matter I should like to mention is that it seems to me that when we are putting into the law of England these 42 volumes—because that is what we are doing—the majority of them are very small but some of them are very big. Perhaps the biggest one, and the one that is hardly ever mentioned in these debates, is that relating to the right of establishment and residence of the nationals of the various member States of the Community. The word "national" appears throughout this legislation, for legislation it is, both in the treaty and in many following regulations. I instance the regulations of 25th February, 1964, and 22nd October, 1968, which provide, apparently in the widest terms, that all member States have to provide the right of establishment and residence for the nationals of other member States, not only for those who have already come and taken up occupations but for those who wish to provide services.

As is well known—I do not wish to tread on any toes—the word "national" is very difficult to give a meaning to in our nationality law because, owing to the peculiarities of British law, we have never really defined what is meant by "United Kingdom national". We know what it is not; it is not necessarily someone who has a United Kingdom passport. But what it is we do not know. Before we put this very severe legislation into the law of England, which is what the Bill will do, we must know the answer to that sort of point. What exactly is meant by a "national of the United Kingdom" when we are passing legislation which gives not only a United Kingdom national the right to go to France or Germany, set up business there, and, if he wishes to provide services, the rights of residents there, but also gives to nationals of other countries the right to come here? The former is, of course, much the harder of the two, for reasons of difficulty of definition which I have already given.

I hope that during this debate—or if not in this debate, during the Committee stage—the Government will devote a long time to explaining exactly not merely what obligations we are undertaking but what opportunities we may insist upon, and for whom, because unless this is done, much as I approve of the price we are paying—I think that we should pay it in general terms of entry into the Community—I do not think it has been sufficiently spelt out. Let there be no hypocrisy, no misunderstanding and no vagueness. Then, and only then, no one can subsequently allot blame.

8.13 p.m.

Sir Arthur Irvine (Liverpool, Edge Hill)

Vast changes are being proposed in our law by this Bill. I feel that the scale and extent of those changes are perhaps still not sufficiently recognised. The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) indicated that guidance was not given by the Bill as to what English courts would do and what English law would be in the event of there being a conflict between existing English law and the Community law. I think that on that point precisely the effect of the Bill is clear. I think the effect is that the Community law will prevail. That is how I interpret it.

I think that, in considering the Treaties of Accession and the decisions in principle that were made as to the relation which should exist between Britain and the Community, the better view was that the courts of law in this country would be very reluctant to proceed on the basis of drawing implications as to what was intended to be the state of the law in England as a consequence of the decision to accede to the treaties and to enter into arrangements with other Powers. Although I regard the Bill as having a great number of faults, I think it possesses undoubtedly a kind of ghastly clarity. My reading of it leads me to the conclusion that in the kind of conflict to which the hon. and learned Gentleman referred the effect of the Bill is that the Community law should prevail.

Mr. Fletcher-Cooke

That was not the conflict I posed. In conflict between existing English law and Community law, I have no doubt that our courts would prefer the Community law. I was concerned with future English legislation, made with all the knowledge of Community law, which therefore might be held to be deliberately against Community law. What would they do then?

Sir A. Irvine

My inclination is to think that the effect of the Bill, so far as it goes—and it goes pretty far—is to provide that in all instances of conflict the Community law shall prevail. Of course, the expectation may be that in future the English law will go out of its way not to conflict with the Community law. Be that as it may, the effect of the Bill seems to be to impose the supremacy of Community law. Of course, it is that which, for my part, I am inclined to dislike, and dislike very strongly, because I value so highly the great inheritance of legal principle and English law which we have.

I have said that I believe that the scale and extent of the changes proposed are perhaps not fully recognised. First, there are the provisions of the Community law which we bind ourselves under this Bill to make the law of the United Kingdom without further enactment. These are the directly-applicable Community provisions referred to by the Chancellor of the Duchy of Lancaster. I suggest to the House that we should ask what is the effect of these directly-applicable provisions upon our existing law? What encroachments do they make upon the common law? That is a matter of tremendous importance to the House. The answer is that no one knows. There may be someone somewhere who knows, but he is a rare and recondite personality because we have heard of 1,500 regulations—provisions galore—and it is almost unthinkable that they should not involve here and there very substantial inroads and encroachments upon the common law.

The fact is that the House does not know—and it is fair and accurate to say so—what is the scale of the encroachments upon the common law entailed in these directly applicable Community provisions which are to become part of the law of England without further enactment. It is obviously a strident innovation in our legislative method to treat the common law in this way. I say without hesitation that we can easily underestimate the scale of what is taking place.

In passing, I am sceptical about the whole concept of the directly applicable provisions. I should be interested if the Government could assure us that there is no overlap between the matters referred to in Schedule 2 of the Bill—taxation changes, the retrospective matters and changes in the criminal law—and the directly applicable provisions. The Minister of State, Treasury will appreciate the importance of that because the Schedule purports to say that under the headings that are set out in the Schedule the rights of the British Parliament by way of Act of Parliament and our ordinary legislative proposals are preserved, and indeed emphasised, whereas the effect of Clause 2 is to say that the Community law will prevail without further enactment in this Parliament. Quite clearly, an absurdly complex and unsatisfactory situation would arise if there were any overlap between the two, but I am rather inclined to think that there probably is. I believe the category of the directly applicable provision, as it has been described, is a rather contrived and artificial category.

I agree with the criticisms that have been levelled against the method that this Bill adopts to impose upon us this huge new body of inchoate, unidentified and not understood law. A curious feature of the matter is that Article 189 of the Treaty of Rome went out of its way, stringent though it is, to allow a certain latitude to each member State as to choice of form and methods whereby the directives of the Community's authorities were to be implemented. I appreciate that the treaty draws a distinction between directives on the one hand and regulations on the other. Even so, given this latitude which the Treaty of Rome affords us in the choice of the forms and method, this Bill resorts to the most authoritarian and dictatorial method imaginable because it provides at one fell swoop—quite unnecessarily, I think—in Clause 2 that all the rights, powers and liabilities, obligations and restrictions referred to in the Clause are to become part of the law of the United Kingdom.

In other words, it adopts a method of spurning the opportunity which Article 189 of the treaty afforded to choose a method which would give the House a reasonable opportunity for considering what the content of Community law is and what, by the same reasoning, is the new law that we are invited to adopt. Clause 2 could have provided—it does not, but it could—that within a given time of the date of any directive of the authorities of the Community the substance of that directive should be incorporated into English law by Act of Parliament or Order in Council or, in appropriate instances, by regulation. That would have made it possible for the directives to receive a much closer and more particular specific consideration than the present proposal offers. Instead, a sledgehammer treatment of the whole matter has been adopted. Whether this is because of the need to shorten the Bill for reasons of parliamentary convenience I know not, but there has been resort to a much more draconian and automatic pro- cess of application of community law than even the Treaty of Rome requires.

I still think that, although the matters I have referred to are important, the question that must be uppermost in the minds of most of us on what on any view is an historic occasion is what is to happen in the new dispensation to the common law of England. There are no safeguards for that; there is no safeguard in Schedule 2 or any other Schedule for the common law. Let the House, for Heaven's sake, recognise the solemn seriousness of that circumstance to which I have drawn attention. The plain truth is that the common law of England, as I understand this Bill, goes by the board the moment it is found to be in conflict with Community law. Will any Government spokesman deny that this is so, or confirm that this is so?

Of course, I know that it will be said that the common law broadly covers a different field from the field of concern of the law of the Community. That will be said; but if even a formal power is conferred upon some authority beyond our shores to impose restrictions upon the whole body of our common law, that I should have thought was the gravest possible matter for this House to consider. The common law is the very foundation of our liberties. The Royal Prerogative is that pre-eminence which the Sovereign enjoys over and above all other persons by virtue of the common law. The special dignities, the privileges and the powers of the Crown are allowed to it by the common law. It would be a gross betrayal of its responsibilities by this House if one of its own Bills conferred upon an authority such as the European Community the power to diminish the body of English common law.

It is true, of course, that the common law has in the minds of many people been eroded and encroached upon by a great mass of delegated legislation and by Government Departments already. That has been a subject of complaint over a long period of years. At least, however, these impositions and encroachments were effected by Parliament itself, and the powers Parliament gave in that connection Parliament could take away.

It is a most astonishing thing that the Conservative Party in 1972 should appear to be ready to regard with such restraint and acquiescence this formal abandonment of the common law and all that it has meant in our history. For us on this side of the House also the importance of the common law cannot possibly be overstated. Perhaps our main point of difference from hon. and right hon. Gentlemen opposite is the need which we feel, for the purposes of social justice and equality, better planning, and the rest, for a greater rather than a less degree of State interference in affairs. As a Socialist Member of the House I would readily acknowledge as a concomitant of that need that the common law should be carefully sustained and preserved as a defence against possible encroachments on liberty by the State. It is wholly consistent and compatible with our outlook on this side to say that we want more extensive State power and at the same time the bulwark of the common law to protect society from excess of power whether from the State or from anyone else.

So all of us, whatever our opinions may be on these matters, can surely join in a tribute to the common law and all it stands for, and I would suggest to the House that it should consider with the greatest gravity the provisions of a Bill which, as I understand it, would give to an authority outside the realm power and capacity to diminish that precious and invaluable heritage.

8.32 p.m.

Mr. John Loveridge (Hornchurch)

It is interesting to hear the right hon. and learned Gentleman the Member for Liverpool, Edge Hill (Sir A. Irvine) plead for the common law, but, as he himself has said, Governments have already eroded that common law by Statute and by codification. It is indeed possible to envisage that this House may well find methods for the examination of new proposals coming forward from Europe which would give us even better opportunities than we have had in the past to look at further possible erosions of the common law. My hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) mentioned the need for a citizenship Act, and I think many of us sympathise with his feelings about that.

Earlier, the hon. Member for Edmonton (Mr. Albu) spoke o[...] the vital importance of having a common international defence policy. Here, Britain is particularly fitted, in entering the Common Market, to bring together more closely America, Europe and the under-developed world, including the Commonwealth. There our influence can be for peace.

So I welcome today this European Communities Bill. It will change the history of nations. The history of Europe has been one of trade wars interrupted by wars of blood, but today we see the Six nations working together within the Common Market for their common good. The results of this have been that they have been able to sell more of their goods to one another. Their standards of life have risen, and their average earnings per head, formerly behind our own, are now well ahead of ours. They have caught up with and surpassed us in wealth per head. At the same time, they enjoy longer holidays and put away more money for their social services than we do.

We for our part have seen our trading pattern become increasingly more difficult. Old preferences for our goods have shrunk as Commonwealth countries have bargained for trade outlets in richer markets. Now the United States has felt forced to raise barriers against imports, and may do so yet again. Its golden hoard of money that for so long serviced the growth of world trade has run down. As a result, the Americans have been obliged to take action to save their balance of paymens and the remainder of that hoard. At the same time Japanese exports increasingly threaten ever more severe competition with our own.

We might manage alone, but how much easier it will be within the new grouping in Europe. There we can have a guaranteed market on a scale that will allow our manufacturing exporters longer production runs, and therefore more profitable runs. Thus, we shall even find it easier to trade with the whole world from the improved base of a larger home market.

A great deal has been said about the price of food. If we look a decade ahead we can see that European farm prices will be limited because of the gains in productivity that can be foreseen. They will move into an era of high output, and of mechanised farming, and we in Britain can take advantage of that as exporters of increasing quantities of farm machinery. We can help speed up the modern, cheap farming methods which Europe needs and at the same time brings profits to our own traders.

The Six are substantial importers of food. Their long-term interests must be to keep down the price of these imports. Those interests are the same as ours. Europe needs us just as much as we need Europe. It wants a full share of the most advanced industries of the future. So do we. In the past we have been grateful for the outpouring of American capital. It is not though in our interests, nor in the interests of the European nations that the greatest and fastest-growing industries of the future should be dominated by one nation. The new large market will make it possible for us, with other Europeans, to finance these forward-looking industries.

This will bring us the benefit of enormous numbers of new jobs in the advanced industries and on the boundaries of those industries. New component industries will grow up. Where will the businesses grow? They will grow here, because with the present tariff barriers we can already see the temptation that many firms experience to put their capital in Europe so that they can operate in Europe behind the tariff wall. At the moment we have to sell goods there across this tariff barrier. How much easier until we enter, therefore, to move the capital into Europe.

Mr. W. Baxter

That point of view was put forth on a previous occasion when this country set up the E.F.T.A. Agreement. It was said that the arrangement would give us a market of over 50 million people and an opportunity to expand our industries to become competitive with the Common Market. That argument has not been proved; why should we believe it now?

Mr. Loveridge

One difficulty was that for six years the hon. Members right hon. Friend was in charge.

I will give a specific example from my own constituency of how this could come about. The Ford Foundry is able to sell substantial numbers of crankshafts to Germany across a price barrier and a tariff barrier. If the tariff is taken off, how much simpler it will be to sell at a higher profit and so benefit the nation?

Mr. Baxter

It is being argued in certain circles that we should go towards a free trade world. If that became a reality, would it nulify the hon. Member's desire to become a part of the Common Market?

Mr. Loveridge

No, Sir, it would not. We should be much better enabled to negotiate for what is described as a free trade world from within the greater strength of a larger regional grouping than we should on our own.

I turn now to how the financing can best be achieved. To service the growth of trade we need to encourage currency reform. The lack of a regional currency within Europe led to the growth of the Eurodollar. Europe has also used the dollar standard as its unit of account. As the dollar is no longer as secure as it was, that practice is becoming of doubtful advantage.

We need some safe alternative to the outpouring of American gold that has financed world trade. The dollar can never serve as safely in the future as it has in the past. We must, therefore, welcome the initiative towards new world reserves, but these may not quickly gain full world-wide acceptance because they are based essentially upon paper and not upon convertability into gold, and their credibility relies on trust between nations.

Will the Government consider whether, within the context of our joining Europe, there is room for a new monetary rôle? Much has been said in our debates about there being more "stop" than we like in the "stop-go" policy. We can all see the danger of the balance of payments becoming difficult if our growth is as we expect it to be. Trading patterns are hard to quantify in advance, but cannot we eliminate the danger of a severe strain in our balance of payments, caused by growth after we join Europe, by encouraging a common balance of payments boundary round the nations of the new market? Could we not at the same time consider a possible new reserve rôle for the strong currencies of Europe in association with the franc area and the sterling area? There is no need for this concept to cut across the growth and the building up of a world reserve. It could be complementary to it.

This is looking some way ahead, but we need to plan now if we are to develop investments, to create new jobs and to enable factories to take advantage of retraining programmes. All this may endanger our balance of payments if we do not come to some sort of terms with our European neighbours after we join.

To sum up, I have said that the old patterns of trade have become more difficult and that we should seize the chance of entering a large and secure market for our goods. Even now we should be looking beyond the immediate treaty. The currency question is one of the most vital British interests at which we should look in the future and should be the subject of further negotiations as soon as possible. It is second in importance only to the need to strengthen the alliance within N.A.T.O. itself. The opponents of entry offer us no great alternative. They would leave us trading on our own in a dangerous world. Greatness is not to be found in doubting fears, but it can be found in taking the opportunity to enter this new market in which we can sell our goods to the benefit of us all. We can also through the Common Market bring closer together the comity of nations. If we join Europe, I feel that we shall strengthen not only our economy but our safety in the world.

8.47 p.m.

Mr. David Clark (Colne Valley)

I find myself in almost complete disagreement with the hon. Member for Horn-church (Mr. Loveridge), except on one point when he indicated that in the near future our balance of payments might be weakened.

The hon. Gentleman has put the case for the Common Market in the way in which it has been put on platforms throughout the country. He believes in the way in which it is put and he put his case honestly. However, has he not read the report by M. Coppé, the commissioner in charge of social policy in the E.E.C.? Has he not read that unemployment in the Community has become worse than it has been for years? When the hon. Gentleman talks of a rosy future and of an economic boom, has he not read about the conditions set out in the Official Bulletin of the European Communities Volume 4, No. 2? Speaking of their own activities they say that the boom conditions which had prevailed in the Community in recent years had passed their peak. The growth of economic activity had lost momentum against the international business background of slower growth and a certain easing in international markets. But this tendency had not been reflected in the trend of costs and prices, whose rapid rise remained the most disturbing feature of the economic trend in the Community. Whenever one looks at economic reports today one finds that, as compared with the golden future which was forecast for the Community in the 1960s, the bubble has now burst. The argument put forward by the hon. Gentleman does not hold much water.

Mr. Loveridge

Does the hon. Gentleman think that smaller production lines with smaller markets would help to reduce prices?

Mr. Clark

I do not entirely accept the hon. Gentleman's point, and he links his point with the aspect of a larger market. He is falling into the fallacy that we shall have a larger duty-free access to other countries. What we are seeing in the E.E.C. is the erection of tariff walls against some of the third countries which in many cases comprise our great markets. I would not accept the hon. Gentleman's premise.

Mr. Hugh Dykes (Harrow, East)

Will the hon. Gentleman give way.

Mr. Clark

No. A number of hon. Members wish to speak. I should prefer to make my few points and then allow others to take part in the debate.

In opening the debate, the Chancellor of the Duchy of Lancaster took credit and praise for the fact that his Bill was a short, succinct and concise piece of legislation. That is a fairly true description of it. Indeed, I cannot visualise any other document having a greater effect on a nation being put forward in such a succint manner. The only document which bears any similarity to it is Machiavelli's "The Prince". From my reading of that, it appears that the right hon. and learned Gentleman has adopted many of the points advocated by Machiavelli in putting forward the Government's case for Britain's entry. However, perhaps we should not be surprised because it appears that, by using legal jargon and very clever legal wording, the right hon. and learned Gentleman has got himself off a parliamentary hook. In effect, it will be very difficult for those who have grave doubts about the Common Market to raise many of the important points of issue which should by right be raised in this Chamber.

That really is what this debate is about. By this legislation the Government are taking away some of the basic liberties and rights of the British people. The Bill is a short-cut Measure. In taking this short cut, the right hon. and learned Gentleman has weakened certain of the liberties which we could have maintained even within the Community rules. I find that very regrettable.

The present Government's handling of this issue has not only caused serious damage to our democratic institutions. It has damaged our democratic way of life. It was said by the right hon. and learned Gentleman earlier that democracy is not simply institutions but a feeling for institutions and a feeling that a system should work. There is a strong feeling in the country at the moment that the Government are ignoring the will of the people. I remember only yesterday, when we debated the emergency regulations, how a number of right hon. and hon. Gentlemen opposite made the point that public opinion would always win and how the Government were right to take those emergency powers since public opinion wanted such action. I wish that right hon. and hon. Gentlemen opposite would pay a little more attention to public opinion when it comes to the Common Market.

The right hon. and learned Gentleman has dealt himself and our democratic system a grave blow, not only by the way he has taken us into the Common Market but by the way he has presented his information and stifled the means by which we in Parliament might discuss what is probably the most paramount of all legislation to come before this House since the end of the war.

Perhaps I might take one point from the right hon. and learned Gentleman's speech. He believes—and he has maintained this position today—in our entry into the E.E.C. and that if the Bill is passed it does not mean that there will be any surrender of sovereignty.

Mr. Rippon

I said that there would be no essential surrender of sovereignty, and successive speakers on both sides of the House have agreed that there is no essential surrender of sovereignty. Indeed, the Leader of the Opposition is on record as putting it much better than I could, as is Lord Gardiner.

Mr. Clark

I take the point made by the right hon. and learned Gentleman. Perhaps I misquoted him. But even taking his words "no essential surrender of sovereignty", it seems to me that there is an essential surrender of sovereignty. The supremacy of Parliament has been waning for years. The power of the bureaucratic machine has caused that to happen. But the basic point about entry into the E.E.C. is that we shall be entering an even large bureaucratic machine and, even if the doctrine of the supremacy of Parliament once had some reality, it will apply no longer once we enter the E.E.C. It will be a great tragedy if that is so. As the right hon. and learned Gentleman said, Community law takes precedence.

Apart from my general condemnation, I should like to refer to two specific Clauses. Clause 2 is obviously the most powerful Clause in the Bill. It entails a great many obligations on this country. It may be, and obviously is, the opinion of certain right hon. and hon. Gentlemen that this is a fair price to pay, but others of us feel that the price is too great.

I should like to take this opportunity to pose some questions which arise on certain Clauses. As I read the Bill—this is stated in the Explanatory Memorandum—payments will have to be made across the frontiers for certain social security benefits. Will the Minister who is to reply to the debate point out that it is an obligation on this country to be responsible for the medical care of the dependants of workers from E.E.C. countries who are in this country? This is of paramount importance. It is not widely known in this country. I raise the point specifically because the logic behind this regulation is that industry should be responsible for social security.

I am particularly worried about certain of our institutions. For example, although the National Health Service is partly recompensed out of contributions, 90 per cent. of the cost comes from general taxation. If we enter the Common Market, will there be direct charges for medical services in this country? I pose this question in all sincerity because this view has been mooted generally of late by certain authoritative people.

Dr. Elston Grey-Turner, Deputy Secretary of the British Medical Association. Secretary of the B.M.A. Common Market Committee and official British observer to the Common Market Committee of General Practitioners, said in Luxembourg on 5th December, 1971, that our National Health Service would have to change as members States would harmonise their social security systems. If Britain enters the European Economic Community, it is likely that in the long-term the system by which we finance our National Health Service will move closer to the systems that you have in Europe, which may involve many direct charges for medical services and much less reliance upon taxation to pay for their cost. He was reported as going on to make the point that Fee-paying would be politically unpopular with the British public but, on his reading of the Treaty of Rome, the decision would conveniently be taken away from Westminster. This comes back to the theme which I am trying to develop: that the Bill will take out of the control of this House many of the basic rights which we cherish and which the general public appreciate highly. This will cause great consternation.

Clause 6 of the Bill provides for the setting up of an Intervention Board for Agricultural Produce so that we can operate the common agricultural policy. It will be no surprise to right hon. and hon. Gentlemen opposite that we on this side of the House generally abhor the C.A.P. Of late, however, there have been some developments in this sphere about which we have not been able to get facts. For example, we in this country have a very balanced system of hill farming. We have divided our hills among agriculture, recreation, forestry and grouse shooting. This is a careful and probably very good balance, but all this has changed.

The Mansholt Plan estimates that 12½ million acres within the Six must be taken out of agriculture if the C.A.P. is to operate efficiently, and that 10 million acres of that should be afforested. The Vedal Commission has recommended that in France alone 30 million acres must he taken out of acriculture and afforested. Obviously, if the regulations which we are adopting in the Bill were applied to Britain, the whole pattern of the landscape in our upland areas could change dramatically.

The upland areas of this country are generally also of outstanding natural beauty, much of which depends on the pattern of land use. Many of these areas are national parks. By our adopting the Bill, our farmers will be forced out, vast areas will be afforested and the balance for which we have fought for so long will disappear. Yet these decisions will be taken not by this House but elsewhere because Britain has agreed to the Bill. Because we believe that this is an essential surrender of sovereignty, we shall vote against the Bill.

9.2 p.m.

Mr. Hugh Dykes (Harrow, East)

It would be presumptuous of me, as a Member from the 1970 intake, to try to comment in more detail on some of the statements about the effect on Parliament, parliamentary procedures and behaviour, conventions and tradition, as a result of entry. Nor should I get too involved in the discussion during which hon. and learned Gentlemen brought us back closely to the language of the Bill, before which the debate had veered away from the Bill into a more general debate on arguments for and against entry.

I am one of those on this side—and on the other side of the House, although they have not yet stated their position—who welcome the Bill because it is logical—not in the sense that it will be easy for the Government to get it through the House, but because it performs its own logic in two respects. It completes the long-attenuated, long-drawn-out and often exhausting process—for the House and the country—of the ensemble debate on joining the Community, which began many years ago when the Labour Party was in Government and which has been consolidated and completed under this Government. It is logical in that sense and also because of its own brevity and concision.

I should like to add my congratulations to the Chancellor of the Duchy and his colleagues, especially his legal colleagues, for the way in which this Bill has been constructed and presented to the House. Despite the fact that there were obviously indications at one time or another, especially last year, that a fairly lengthy Bill could, for clear reasons, be expected, I always thought it was a figment of journalistic imagination, unfortunately encouraged by hon. Members opposite for their reasons, to suggest that we should have a truly mammoth Bill of massive proportions, of the 500 to 1,000 Clause variety, so often featured in headlines when the Common Market debate was being processed at various stages.

But it seems that in the Bill we balance the conflict and the considerations of having a Bill sufficiently detailed to appease and satisfy, dependent upon their views, those hon. Members on both sides of the House in considering the merits of the arguments underlying the Bill, with the need for the Bill to be expedited in an acceptable and logical way in the House. In other words, my contention is that this long and great debate has gone on for so long now that, with the decision in principle having been made last autumn in the House, and with the subsequent debate which took place last month on the Treaty of Accession and all the rest of it, there has been inculcated in the British public, irrespective of their central views on the merits of the Common Market and whether they are in favour of entry, a feeling that Parliament should now get on with the job of studying and processing—processing obviously if one is in favour of it—in a logical sense, and dealing with the Bill.

For hon. Members opposite to have suggested earlier that the brevity of the Bill will deprive them and, I suppose, some of my hon. Friends, of the chance of picking the Bill to pieces of they wish, which they have every right to do, is complete nonsense and a distortion of the powers, function and quality of Parliament. That is why when the Bill goes into Committee on the floor of the House for the line by line and word by word examination—particularly of Clause 2(4), which, unfortunately, is totally incomprehensible to me—an almost syllable by syllable analysis will be permitted to all hon. Members. That is an obligation which the Government have met fully.

Therefore, I do not share the arguments of the right hon. Member for Stepney (Mr. Shore), who complained in those terms. One of the tragedies of the whole Common Market issue has been the volte farce—with an "a" and an "r" rather than an "a" alone—of some members of the Opposition. I hasten to add that in this particular case I am refering not to the right hon. Member for Stepney but to some of his colleagues who have apparently not yet even adequately explained their change of mind on this issue. That is why my hon. Friends are entitled to logical and reasonable explanations of this change of view, or, failing that, perhaps, to ask for the support of some hon. Members opposite for the Bill as it is gradually processed through the House. At this stage that is not provocative or unreasonable. It flows from what was said earlier last year, more recently, and in the debate on the principle of entry which took place last Autumn.

I come briefly to the argument enunciated on several occasions about signing away the rights of this country and Parliament to the Community. It has to be recognised that there are a variety of Community instruments and there are generic differences between them. It should also be recognised that the Bill is perfectly reasonable. It is not exactly an enabling Bill; that would be the wrong use of the word. But it is a Bill with precedents on the signing of treaties by this Parliament and Governments representing the people. We shall be acceding to instruments of the Community and the treaties. At the same time we shall be subjecting this country to a range of different instruments, some of which are binding in a full legal sense, others of which are binding in a sense as far as the ends of the objectives can be determined, others of which are decisions which are selectively binding or directional, as so called, and others of which are recommendations or opinions which are not binding.

So the sum total of the process is far less sinister than many Labour hon. Members would suggest. They have tried to unnerve other hon. Members and the nation by the sinister implications of something the House should have been prepared to do anyway. The implications of our accession to the Treaty of Rome and the other treaties have long been recognised.

I shall welcome what will undoubtedly be a lengthy Committee stage. I also add my words to the welcome accorded earlier by one or two hon. Members to the proposal of my right hon. and learned Friend the Chancellor of the Duchy of Lancaster to set up the ad hoc Joint Committee. It will go a long way to remove what might have been the House's continuing unease about Community instruments and how they would be dealt with. It is a proposal that I believe will be satisfactory in the extreme.

I turn next to two points that move away from the Bill but are indirectly related to it. Bearing in mind arguments about a slowdown in the Community's economic performance, of which there are differing signs, there being more in Germany than in France, I feel that it is of cardinal importance that this country should enter the Community with an outstanding health relative to the maximum health it has experienced in the post-war period. It is moving slowly and painfully towards experiencing such growth. This country should not only logically be on the verge of a much faster rate of growth, but needs to be if the full benefits of our entry into Europe are to be achieved. Therefore, I should like the Government to spell out in a little more detail what they feel about our longer-term economic climate vis-à-vis our membership of the Community, though I realise that in the short term the approach of the Budget rules out any arguments on the narrower front.

I return to what my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) said about competition policy. I acknowledge his knowledge of the subject and depth of interest in it. I support what he says about the importance of the Community regulations. I hope that my hon. Friend the Minister of State, Treasury will say something on an important aspect of the matter. If the Government are now considering the competition policy, as has been suggested on a number of occasions, but more particularly Monopolies Commission policy, how is their consideration likely to relate to the Common Market directives and rules and regulations? Have they given a great deal of thought to the question? If so, is that perhaps the reason why the recasting of monopolies legislation and the proposals the Governments are apparently to produce in due course have been held up?

It is for the reasons I have given, and because I welcome the Bill in its present form and content, that I was glad to have the opportunity to catch the eye of the Chair tonight.

9.15 p.m.

Mr. Ronald King Murray (Edinburgh, Leith)

The Bill is legally ingenious but constitutionally wanting, the ingenuity being Machiavellian if not Mephistophelian. I shall dwell on the constitutional aspects, but first I wish to express substantial agreement with the remarks of the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) who made the cogent and forceful point about the need for greater guidance to be given to our courts as to how they are to reconcile the periphery and border of domestic and Common Market law.

I wish at the same time to adopt to some extent the sentiments expressed by my right hon. and learned Friend the Member for Liverpool, Edge Hill (Sir A. Irvine) who spoke with great feeling about the way in which the Bill will leech the common law of England away from this country. It would, of course, have the same effect on the law of Scotland, of which we are just as proud as English hon. Members are of their law. The law of Scotland stands in a somewhat better light in relation to this subject in view of the earlier common market which was created between Scotland and England and Wales.

I refer, of course, to 1707 and the Treaty of Union. For Scotland, and to a great extent for England, it was essentially the creation of a common market and common economic entity with political machinery to ensure its lasting future. In that treaty provision was made by Article XVIII to this end, and it is worth quoting: That the laws concerning regulation of trade customs and such excises to which Scotland is by virtue of this treaty to be liable be the same in Scotland from and after the union as in England and that all other laws in use within the kingdom of Scotland do after the union and notwithstanding thereof remain in the same force as before (except such as are contrary to or inconsistent with this treaty) but alterable by the Parliament of Great Britain with this difference betwixt the laws concerning publick right policy and civil government and those which concern private right that the laws which concern publick right policy and civil government may be made the same throughout the whole United Kingdom but that no alteration he made in laws which concern private right except for evident utility of the subjects within Scotland. There was a constitutional guarantee, however flimsy, that the people of Scotland were entitled to expect that nothing would be done, as for instance in this Bill, affecting the private rights and obligations of the people of Scotland except for their evident utility. It was equally made clear that if any change were made in the public law, such a change would be made openly and not by stealth and implication. That great constitutional article stands in marked contrast to this drab and uninteresting Bill.

Mr. Powell

Is it the hon. and learned Gentleman's opinion that the Bill is consistent with Article XVIII which he has cited, and is the alteration of the law of Scotland by Community regulation in line with the limitation on its alteration contained in that Article?

Mr. Murray

That is a problem on which I would not venture to give judgment. Indeed, it is a problem on which the courts may have to adjudicate in future. It is, however, doubtful whether one could reconcile this Bill with that important constitutional declaration.

The Bill is wanting in regard to aspects which have been mentioned by hon. Members on both sides and I do not want to repeat the criticisms which have been voiced. However, I wish to underline the criticism that has been put with great force about Clause 1(3) and Clause 2(1). These are the encroachments by stealth on the rights of the people of this country.

We should face the fact that what is being taken from us by stealth under these provisions are rights of vital political and constitutional importance which we at present enjoy. For example, under Clause 1(3) approval will be secured by Resolution of each House. In other words, it is by means of that formality that the Government can introduce some of the measures in the Treaty of Rome and the Treaty of Accession. This is a cursory and short procedure, an offhand way of extending the legal rules of this country. It does not compare in any way favourably with the normal procedure of legislation with which this House would normally handle such matters.

I cannot understand why the Bill should seek to derogate so far from the sovereignty of this Parliament that it is not to adopt its normal course of legislation by Act of Parliament in applying the provisions of the Community. I have to accept, of course, for the purpose of this argument that if the Bill is passed it will necessarily follow that we will be bound to apply the regulations of the Community, but why should we not do it by the traditional method by Act of Parliament?

We are aware of the need to conform to the treaty if we accede, but surely the good sense of Parliament is not to be set aside and procedures that we have adopted and found useful through the centuries are not to be so lightly set aside. I cannot understand that this is a time when one would be looking for new and original procedures, but surely this Parliament of ours, of which we are so proud, has been sufficiently adaptable in the past to be prepared to change its procedures—not to derogate or run away from its procedures, but to adapt them and the legislative process to fit a new and challenging situation.

In concluding that line of argument, may I draw attention to a point already touched upon: the fact that this House will be virtually robbed of its power to ask questions on Common Market matters, whether oral or written, because so far as I can see there is no mechanism contemplated in the Bill, and no other mechanism outside the treaty or elsewhere, which would allow this Parliament to press for factual information and to feel that it had a right to get it. This may be the most important aspect of the points I have mentioned—the procedures we use to apply Community law to this country—because although it is true that if we enter the Community the end product of our debates will inevitably be that we will have to legislate to marry our laws to those of the Community, we should in that process direct ourselves to obtaining the maximum possible information about why a regulation is thought necessary, how it has been conceived and what it implies. I should have thought we should fight strenuously in this House for that right of procedure so that we retain the substance if not the form of our present parliamentary privileges.

Turning to a point I made at the outset, I find the Bill to be constitutionally wanting. It is not a great constitutional Statute—and that is an understatement. There have been great Statutes in our history. The Statute of Westminster was such an Act of great constitutional importance. This Bill is one but nobody would call it a Statute comparable to the Statute of Westminster or great constitutional Statutes of the past. It fails. It has not lived up to the constitutional realities it implies; because there can be no doubt that its implications for the future are great. The portals of Brussels have been opened but instead of the British hon with a mane somewhat shorn entering, it is a constitutional mouse that has been sent to Brussels; and it is no good saying that the sovereignty which is being given up is not essential sovereignty. It is a significant part of the sovereignty of this country.

The hon. Member for Cheltenham (Mr. Dodds-Parker) sought to draw a parallel between our accession to N.A.T.O., the United Nations and so on, suggesting that some sovereignty was given up then. That is true but it was sovereignty in a peripheral sphere, the international periphery of our being which did not involve the heart of our domestic constitutional being as the Bill unquestionably does. We are surrendering a portion of the inner core of our sovereignty because we are dealing with two aspects of the constitution, first with an economic aspect and secondly with one which is more properly constitutional.

Certainly, we on this side of the House have always recognised that economic and political power are interdependent. We cannot have political freedom without economic power, and there can be no economic progress without political power. We separate these two at our peril. But Clause 2 makes it clear that this is precisely what the Bill does; it separates economic power from political power because the economic power is going to Brussels. Our destiny in economic terms will be based on Brussels; there can be no gainsaying that. But our political power to influence Europe is based here in Westminster. We are therefore separating economic and political power.

One can put it in a way that this side of the House can understand very well by saying that we as Socialists doubt whether social planning of a European economy is possible from Westminster. One doubts whether it is possible without something in the nature of a responsible European Parliament. But that is something on the horizon, far away. Many people say that it is far away and seem to regard that fact as an advantage. Advantage or not, it is clear to us that economic planning is not possible without a strategic centre of political power on which it can be based. Parliament then ceases to have control over our economic destiny and the erosion of its political power will increasingly follow and become evident. That is the economic aspect.

I turn now to the constitutional aspect. This country has enjoyed a flexible constitution—our so called unwritten constitution—in which the ultimate safeguard for the rights of the people has not been in any text, in any written guarantee, but has rested on the sovereignty of this Parliament, not for the sake of us as Members in order to enhance our status and reputation, but to protect the people. The protection of the sovereignty of Parliament is the only constitutional protection we have, and under the Bill we are surrendering the core of that, our power to control our economic destinies. For these reasons I reject the Bill and all it stands for.

9.27 p.m.

The Minister of State, Treasury (Mr. Terence Higgins)

In the long series of debates which the House has had on the Common Market, I am intervening for the first time at the conclusion of what one might describe as Act three, Scene one, because we had the two major debates in July and October extending over a number of days, we had a prelude to Act three in January, and we are now approaching the end of the first day of this three-day debate.

I am sure the House agrees that the debate has been as fascinating as it is important. It has covered a very wide range of subjects. I was a little unnerved by my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke), who said that the economists had had their beanfeast and that it was now time for the lawyers. Certainly, a number of extremely important legal points have been raised, and no doubt my hon. and learned Friend the Solicitor-General has taken due note of them. If he is fortunate enough to catch your eye, Mr. Deputy Speaker, he hopes to speak later in the debate.

Other matters have also been raised. For example, my hon. Friend the Member for Harrow, East (Mr. Dykes) spoke about monopolies legislation. This clearly comes within the area which my right hon. Friend the Secretary of State for Trade and Industry hopes to cover. The House has already spent a great deal of time debating this issue, and it is rather difficult to raise new points. As I see it, the task before us is somewhat on the lines outlined by my hon. Friend the Member for Harrow, East—to go into the matter in greater depth as a prelude to the Committee and Report stages of the Bill.

There are two particular parts of the Bill on which I would like to concentrate—first, Clause 2(3), which covers various financial arrangements required to meet our Community obligations, and, secondly, Clause 5, which concerns the question of customs duties. First of all, I want to say something about the financial provisions of the Bill, which are generally recognised to be of very great importance. These provisions are designed to cover both the transitional period and the longer-term arrangements.

During the debate the right hon. Member for Stepney (Mr. Shore) stated that these arrangements had been changed in 1970 and had not been taken into account when the last Administration made clear, in February, 1970, their intention to pursue the negotiations. I should point out that these long-term arrangements were also fully explained in the White Paper, "Britain and the European Communities", published in 1970 in paragraphs 41 to 43. Furthermore the arrangements were set out very clearly in the White Paper (Command 4715), which was published in July last year.

Perhaps I should refer to the relevant paragraphs, especially paragraphs 92 and 93 about the transitional arrangements and paragraph 95 concerning the longer-term arrangements. Paragraph 92 sets out clearly that: The solution which has been reached is as follows. A percentage or 'key' has been set, broadly corresponding to our present share of the total gross national product (GNP) of the 10 countries likely to form the enlarged Community. This will represent the proportion of the budget which we should nominally be expected to pay in the first year of membership. This key will then increase marginally in each of the four subsequent years, under simi- lar arrangements to those agreed by the Six for themselves. Paragraph 93 says: However, we shall pay only a proportion of our nominal contribution over these first five years. The proportion will increase in annual steps. As to longer-term arrangements, paragraph 95 says: In 1980 and subsequent years we shall be required to contribute 90 per cent. of our agricultural levy and customs duty receipts and such value added tax (VAT) (not exceeding the yield of a 1 per cent. VAT) as is necessary from each member country to close any gap between Community expenditure and Community revenues from levies and duties. I should like to relate these passages in the White Paper to the financial provisions in Clause 2(3) of the Bill.

These financial provisions charge payments to meet our Community obligations directly on the Consolidated Fund, but with the possibility of placing some payments on the National Loans Fund. For example, candidates for charging on the National Loans Fund could be any loans to any other member States under the Community's mutual support scheme. The provisions in Clause 2(3) recognise and are appropriate to the nature of the Community's financing system. Taking the most important point, our commitment to provide our share of the central budget, the making available of the Community's own resources—the customs duties and levies in the first instance—virtually demands a direct charge on the Consolidated Fund. The decision to join the Community involves a firm commitment from the outset to discharge our various obligations to the Community and the member States. Such commitments can be fully expressed only by a direct charge on the Consolidated Fund, and this is what the Bill provides.

Sir Robin Turton (Thirsk and Malton)

Will my hon. Friend make this clear? Will they be voted in Supply or Consolidated Fund standing services? If they are under the latter, of course they will not be debatable in the House of Commons on the Consolidated Fund Appropriation Bill.

Mr. Higgins

I will make it clear. There will be a direct charge on the Consolidated Fund, and this is what the Bill provides. The revenue is earmarked, so to speak, for the Communities from the moment it accrues. It would not be consistent with the nature of the Communities' system to interpose a vote procedure. If I may, I will come to the question of votes. I ask my right hon. Friend to wait until I have finished this passage.

Mr. J. T. Price (Westhoughton)

Before the hon. Gentleman leaves that point—

Mr. Higgins

I am not leaving this point but continuing. I should like to come to the question of Votes in a moment. I hope that my right hon. Friend will listen to what I have to say because we are all agreed that this is a matter of very great importance.

Essentially what are called the Community's "own resources" comprise customs duties, agricultural levies and, in principle, from 1st January, 1975, a proportion of V.A.T. up to a 1 per cent. rate. Until 31st December, 1974, the proportion of customs duties which member States have to hand over will gradually increase. From 1st January, 1975, onwards all customs duties and levies will be paid to the Community's budget. There will be a 10 per cent. rebate for costs of collection. Till the own resources system is completed by the payment of part of the V.A.T. revenue, any deficiency in the budget will be met by contributions from member States according to an agreed scale.

Mr. W. Baxter

Would the hon. Gentleman put that into £.s.d. and give us some indication of what it is going to cost in a pounds, shillings and pence?

Mr. Higgins

It depends on the size and shape of the budget. The hon. Member will, of course, be familiar with the package in the White Paper, going on from the part which I have just quoted. I will come in a moment to the point which he has raised. What I should like first of all to do is to complete the point I was dealing with a moment or two ago.

There is no different degree of obligation to make the other element of our contribution to the budget—that is to say, the member State contribution which I have just referred to—which will continue till it is replaced by part of the proceed[...] of V.A.T.—by a percentage of V.A.T. A direct charge on the Con- solidated Fund is, therefore, appropriate as far as that is concerned.

I should now explain to the House—and this is related to the point which my right hon. Friend the Member for Thirsk and Malton (Sir R. Turton) was asking a moment or two ago—what is covered by Clause 2(3)(a) and (b). Paragraph (a) provides for all other expenses incurred, other than the Community obligations to which I have just referred, to be paid out of Votes. This follows the normal procedures for Government expenditure.

Expenses under this head would comprise a number of categories, and I should like to give some examples, if I may. There would be payments involved in carrying out in the United Kingdom the price support system under the common agricultural policy. This expenditure would be matched by payments into the Consolidated Fund by the Communities Another example would be pay and pensions to members of the Intervention Board for Agricultural Produce and payments to the Sugar Board under Clause 7(2).

To take another example, there are the administrative and incidental expenses incurred by Departments in carrying out various requirements of the Bill and the treaties—for example, the administrative expenses of the Intervention Board for Agricultural Produce set up by Clause 6 of the Bill. Another example is payments by the Government in connection with any order made under Clause 2(2) of the Bill—for example, payments made by the Department of Trade and Industry providing for schemes which would enable us to take advantage of the right to E.C.S.C. grants.

Clause 2(3)(b) provides for the treatment of receipts. These would all be paid into the Consolidated Fund or into the National Loans Fund if they arose out of payments directed to be made from the National Loans Fund in the first place.

The main receipts from the Communities would be those from the budget. These would consist largely of the agricultural payments to the United Kingdom to which I referred just now. There would also be some receipts from the European Social Fund. Other possible receipts would be European Coal and Steel Community payments.

There are two other financial aspects of the Community's activity to which I should draw attention. The first concerns the European Investment Bank. As a member of the Communities we shall become a member of this. The changes to the bank's statute which enlargement makes necessary are set out in Protocol 1 of the Treaty of Accession, Cmnd. 4862, pages 77 to 81; and our obligations to the bank are covered in Clause 2(3) of the Bill.

The bank's purposes are set out in the original E.E.C. Treaty. Those purposes were to further regional development, industrial modernisation or conversion, projects of common interest to several member States. Its practice is to raise on the capital markets of the Community the money needed for its loan operations.

The bank has had a very impressive record. It has made a notable contribution to the Community, particularly to the development of the regions and to industrial conversion. Last year its loans and guarantees totalled more than £200 million spread over 52 operations.

The management committee of the bank has visited London and had talks with the Chancellor. I had the pleasure of having discussions with it, and I believe the talks were encouraging. There is every reason to suppose, remembering that its objectives include regional development, that the bank will have a useful rôle in the United Kingdom.

Secondly, I should briefly mention the E.E.C. Mutual Support Scheme—

Mr. Shore

The hon. Gentleman made it clear that the payments to the European Investment Bank would come out of the Consolidated Fund provisions of Clause 2(3). Would he not agree that it is rather an anomalous situation that long-term money of this kind should be paid out of the same fund which makes the annual payments to the Community? Does he not think that they ought to be differently dealt with under separate provisions?

Mr. Higgins

The right hon. Gentleman has somewhat misunderstood the position on the European Investment Bank. Its practice is to raise on the capital markets of the Community money which it needs for its loan operations. It is possible that provision could be made for public funds, in which case the more appropriate source would obviously be the National Loans Fund, not the Consolidated Fund because that would run into the kind of problems to which the right hon. Gentleman referred. The normal practice of the bank is to raise money independently, and it will not necessarily be involved in the kind of operation which the right hon. Gentleman appears to envisage.

I was saying a word about the E.E.C. Mutual Support Scheme, to which reference was made in the Explanatory and Financial Memorandum. The E.E.C. Treaty provides for mutual support between member States in the event of a member encountering balance of payments difficulties, and a detailed scheme for medium-term support has been drawn up should the need arise. The United Kingdom has accepted a maximum lending obligation under this scheme of £250 million; that is 600 million units of account or just over 21 per cent. of the total. As I mentioned, it is envisaged that any loans under this scheme would be charged on the National Loans Fund.

Our participation in this scheme seems to me entirely natural. It is hardly a new departure for us to be associated in a scheme of this kind since its purpose—within the Community—is very similar to the purpose of I.M.F. facilities on a wider basis. I should just add that participation in a particular support operation should the need arise is not obligatory. A member country can decline to take part, or can ask for refinancing or early repayment of a loan if it has balance of payments difficulties itself.

Mr. Powell

Has my hon. Friend yet reached the point at which he can confirm in reply to my right hon. Friend the Member for Thirsk and Malton (Sir R. Turton) that, apart from the payments in paragraph (a), the rest of the payments from this country to the Community will not be by way of Votes and consequently the parliamentary principle of grievance before supply will not apply?

Mr. Higgins

I hope I have made it clear that there are two separate aspects. The first is the obligations we owe to the Communities and the second is the various items which will be covered by the Votes for to which I have referred.

Mr. Marten

My hon. Friend has rather galloped through his brief and it was difficult to interrupt at the right point. I would like to make a point about V.A.T. He got the phraseology slightly wrong. I think he said, "1 per cent. of V.A.T." It is not that; it is V.A.T. up to 1 per cent., which is very important because there is a huge difference in how it is calculated. Secondly, as this is British taxpayers' money, can he say what arrangements are being made to establish an Expenditure Committee of this House to follow through the expenditure in the Community? Is he aware that Professor Dahrendorf said that there is no check and it is very wasteful?

Mr. Higgins

I am grateful to my hon. Friend for his intervention. If he reads HANSARD, he will find that I said "up to 1 per cent. of V.A.T."

Mr. Marten

V.A.T. up to 1 per cent.

Mr. Higgins

I would not wish there to be confusion on this point. As is well known, we are proposing to introduce in the Finance Bill a value-added tax. Decisions on the rate and coverage of that tax are not matters which I am able to discuss now because my right hon. Friend will deal with them in his Budget speech. I think it is quite clear from the Bill and from the White Paper what will be the position concerning the contribution to the Community's budget. I am sure my hon. Friend will find when he reads HANSARD tomorrow that there is no doubt about that.

On the particular point which he raised, and which I think was implicit in the intervention from below the Gangway on the Opposition side, about the actual size of the Community budget, this is also a matter of great importance. The size of the budget is determined by the Community's estimated expenditure for the year in question and not by the total amount of "own resources" available. As a member of the Community we shall have our full share in all Community decisions on the level and pattern of Community expenditure, but during the transitional period our contribution to the budget will be subject to maximum limits as set out in the White Paper.

Perhaps this can be most clearly seen in the table on page 24, which shows our starting liability at 8.6 per cent. rising over five years to a figure approaching 19 per cent. Further limits will apply to our share of the budget in 1978 and 1979, as explained on page 5 of the Explanatory and Financial Memorandum. From 1980 onwards, we shall of course apply the system in full. From accession we shall be able to influence the size and composition of the budget and, as my right hon. and learned Friend the Chancellor of the Duchy of Lancaster reminded the House in introducing the Bill, the process of formulating Community policies is a gradual one involving full consultation with member Governments.

Mr. Jay

As the hon. Gentleman has obviously considered these matters carefully, will he tell the House what it wants to know and has the right to know? What is his estimate of the net out-payment in budgetary terms from this country from 1980 onwards after the transitional period has ended?

Mr. Higgins

The right hon. Gentleman and the right hon. Member for Stepney have continued to pursue the question of the ultimate size of the Community budget after the end of the transitional period. The right hon. Member for Stepney continues to play this numbers game with undiminished zest. Quite apart from all the familiar hazards of economic prediction, which were well illustrated—if I may take up the point made by the hon. and learned Member for Edinburgh, Leith (Mr. Ronald King Murray) on economic planning—by the fate of the National Plan, it is clear that our entry into the Community will have a profound effect on our pattern of international trade which makes nonsense of quasi-scientific predictions of the likely size and share of the contribution to the central budget in the 1980s.

It is also right to stress the point made by the hon. Member for East Ham. South (Mr. Oram) that we need to take account of the likely shift from the present predominance of agriculture in the budget. One factor here will be the further shrinking of the Community's agricultural population.

During the 1960s, 5 million Community farmers left the land. Even if the rate of outflow in the 1970s is not rapid—and I do not underestimate the social and environmental problems involved—this process will continue, and regional and industrial developments will play an increasingly important part in Community policies and will no doubt take their share of Community expenditure.

Mr. Jay

If the hon. Gentleman has no idea quantitatively what the economic consequences will be, how is he so certain that it will be of advantage to this country?

Mr. Higgins

The two points are quite separate, as the right hon. Gentleman will surely recognise. On the one hand there is the actual contribution to the budget; the other question involves the benefit which we would derive. Clearly one needs to balance the one against the other. The right hon. Gentleman is all the time concentrating on costs and not on potential benefits.

Mr. Shore

I am sure that the hon. Gentleman wants to be fair to my right hon. Friend the Member for Battersea, North (Mr. Jay) and myself. He says it is impossible at this stage to quantify the benefits which might accrue. We do not know this. My right hon. Friend and I are in serious dispute with the hon. Gentleman and his right hon. and learned Friend on whether they have made their calculations of our contribution beyond the year 1977. We think that the result of the calculation is not a decrease in the amount we are to pay but virtually a doubling between 1977 and 1980. Why is it that the Irish Government have been able to do this calculation for 1980? Other Governments are able to do this and it is not due to any peculiar genius on their part. If other Governments can estimate up to that date, why are Her Majesty's Government unable to do so?

Mr. Higgins

This is ground which the House has covered many times. When one remembers that the right hon. Gentleman's Government, and particularly the Department with which he was associated, were so incredibly wrong within a matter of days, let alone weeks, in their economic forecasts five years ahead, it is extraordinary the faith he still has in economic predictions. He and I know something about the difficult technical matters which are involved, and it is not likely to be fruitful to continue to pursue this line of thought.

Mr. Leslie Spriggs (St. Helens)

Why does not the hon. Gentleman answer the question?

Mr. Higgins

I have many further points to make and I want to get on with them.

I turn to Clause 5 which is concerned with customs duties. Essentially what is planned is the elimination, step by step, of the tariffs between the Six and the new member States, tariffs between the Six having been eliminated in July, 1968; and secondly the gradual establishment of the common customs tariff around the enlarged Community.

The timing of these two processes is not the same. Whereas the elimination of the tariffs between the United Kingdom and the Six will be done in five equal stages starting three months after accession, it is intended that our move towards the common customs tariff should be carried out in four stages starting a year after accession.

The Treaty of Accession provides that we must progressively reduce and eventually abolish our existing customs duties on imports from the rest of the Community and align our duties on imports from other countries to those of the Community's common customs tariff. The first cut of 20 per cent. in the duties between us and our Community partners is due on 1st April, 1973. The next cut of 20 per cent. for both is due on 1st January, 1974, on which date the first move of 40 per cent. towards the common customs tariff is also to be made. The final instalments—complete abolition of protection within the E.E.C. and complete adoption of the C.C.T. against other countries—are due on 1st July, 1977. These moves towards abolition of inter-Community duties and adoption of the common customs tariff will be made by an order under United Kingdom legislation, the Import Duties Act 1958.

Therefore, since the duties to be charged will stem from the treaties, that Act needs to be amended varying the purposes for which orders imposing duties may be made and what they prescribe. Section 5(5) of the Bill therefore amends the Import Duties Act, 1958, so as to allow duties to be imposed with a view to securing compliance with Community obligations. Repeals of those parts of that Act which will become redundant are made in Part I of Schedule 3 to the Bill, and further amendments to the Import Duties Act are made in Part A(i) of Schedule 4 to the Bill.

After the traditional period—that is to say, by 1978 at the latest—the rates of duty applicable to most imports into the United Kingdom will be fixed by E.E.C. regulations giving the common tariff direct legal effect throughout the Community. The regulations will, of course, apply directly in the United Kingdom by virtue of Clause 2(1). The first part of Clause 5(1) puts beyond any doubt the liability to pay these duties, which must be clear and unambiguous. The second part of the subsection nevertheless maintains a Treasury power, subject to the recommendation of the Secretary of State, to impose duties on goods outside the common tariff and not subject to duties fixed by any directly-applicable Community instrument. For example, the tariff of the Coal and Steel Community is established by decisions of the member States, which though binding on members, have to be given effect by legislative action under member States' national powers.

So far, I have been talking mainly about the new common tariff and our movement towards it. The main components of these will, of course, be derived from the existing common tariff and the existing import duties of the United Kingdom and other new members. But there is one detailed point which I should make clear in the short time remaining to me.

The treaty provides for special treatment for customs duties of a fiscal nature. In the United Kingdom these are the customs revenue duties on hydrocarbon oil, tobacco, spirits, and so on. With the exception of that on hydrocarbon oil, each of these duties contains a protective element; that is, the relatively small amount by which the rate of customs duty exceeds the corresponding rate of excise duty.

The special treatment contemplated by the treaty is that the fiscal elements of these duties may be replaced by "internal taxes", chargeable equally on imports and domestic goods alike, in which event only the remaining protective element, chargeable solely on imports, would be subject to the provisions for phased abolition and alignment as for tariffs generally. This is a point which has not been generally appreciated, and it seems right and proper to spell it out.

There are a number of other points with regard to customs procedures which are of considerable importance but which probably may be dealt with more appropriately in Committee. Essentially what I have sought to do is to outline to the House the main financial provisions and also to comment briefly on the actual provisions of the Bill concerning customs duties.

The second aspect concerning customs duties is not only the creation of the common customs tariff but also the progressive and eventual complete elmination of the duties between the various members of the enlarged Community. I have no doubt that it is in this area we shall derive very great advantages.

I want, finally, to take up a point made by my hon. Friend the Member for Harrow, East. He suggested that it was very important in joining the Community that we could create the right overall economic climate. I believe that the measures which we have taken in terms of tax reform, the reform of personal and corporation tax, and the reform of our indirect tax system and our general fiscal policy, are such that we can look forward to joining the Community with confidence.

Moreover, we have over the last 18 months reduced taxation by more than £1,400 million in a full year, and, as my hon. Friend the Prime Minister made clear a few days ago, we are now entering upon a period of sustainable economic growth where industry may reasonably expect to see our domestic markets growing at a rate of some 4 or 5 per cent. Provided that price competiveness in international markets is maintained. this should provide a firm basis for our industry in domestic markets and. I believe, a springboard from which we can enter the Community and increase our overall economic prosperity.

It being Ten o'clock, the debate stood adjourned.

Debate to be resumed tomorrow.

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