EUROPEAN COMMUNITIES

HC Deb 22 February 1972 vol 831 cc1137-236

5.6 p.m.

The Financial Secretary to the Treasury (Mr. Patrick Jenkin)

I beg to move, That any Act of the present Session to make provision in connection with the enlargement of the European Communities to include the United Kingdom, together with (for certain purposes) the Channel Islands, the Isle of Man and Gibraltar, may include provision—

1. (a) for giving effect to any charge to taxation of those Communities, and for the imposition and alteration of customs duties by order of the Treasury;
2. (b) for the payment into the Consolidated Fund or National Loans Fund of sums received by any Minister of the Crown or government department.

I understand it is convenient to debate with it the related Money Resolution: That for the purposes of any Act of the present Session to make provision in connection with the enlargement of the European Communities to include the United Kingdom, together with (for certain purposes) the Channel Islands, the Isle of Man and Gibraltar, it is expedient to authorise—

1. (a) the charge on the Consolidated Fund or National Loans Fund of such sums as may be specified in the Act, being sums required to meet payments to any of the Communities or to Member States or to the European Investment Bank (or to redeem notes or obligations issued or created in respect of obligations to make such payments); and
2. (b) the payment out of moneys provided by Parliament of expenses not so charged of any Minister of the Crown or government department, being expenses incurred under or by virtue of the Act or the treaties therein referred to.

The Ways and Means Resolution is necessary because the European Com munities Bill proposes certain charges upon the people. The Money Resolution is similarly necessary because the Bill proposes charges on public funds. Both Resolutions are therefore enabling in that they are essential prerequisites to the consideration of this most important Bill in Committee. Both are limiting also in that they fix an upper limit to the charges that the Bill may impose on the people or on public funds, as the case may be. Thus, I am advised that if the House accepts the Resolutions it will be in order to discuss in Committee or on Report any Amendment to the financial Clauses of the Bill which does not actually increase the charges on the people or on public funds at present appearing in those Clauses.

It is important that I should make this point at the outset. I recognise that some right hon. and hon. Gentlemen on both sides of the House object to the financial provisions of the Bill. Nothing in the Resolutions will prevent them from making those objections or moving Amendments to remove, curtail or impose conditions or restrictions upon these provisions at the appropriate stages of the Bill's progress through Parliament.

I now come to the purpose of the Resolutions, and I take first the Ways and Means Resolution. This founds the Clauses of the Bill authorising the levying of certain taxes, including customs duties from United Kingdom firms and individuals. Under the Treaty of Rome, as amended by later treaties, and by virtue of various regulations of the Communities, a variety of agricultural levies, coal and steel levies and customs duties must he raised and paid over to the Communities by member countries. It is therefore necessary for the House, in order to implement its decision to join the Communities, to provide by Act of Parliament for the raising of these levies and duties in this country.

The relevant Clauses are Clause 2(1) and subsections (1), (2) and (5) of Clause 5. Clause 2(1), as was repeatedly noted last week in the debate, covers among other things, directly applicable liabilities and obligations. These comprise agricultural levies under the common agricultural policy and the coal and steel levies due under Article 49 of the European Coal and Steel Community Treaty. Community legislation covering these charges applies directly in member countries. Clause 2(1) makes the Community legislation enforceable in the United Kingdom.

Clause 5(1) covers, first, customs duties payable under the common customs tariff after the end of the transitional period and, second, customs duties for certain goods which are covered neither by the common customs tariff nor by any other directly applicable provision. This is intended to provide for the tariff on coal and steel products.

Clause 5(2) confers on the Treasury a power to make orders to cover imports where the Community has authorised a duty different from that in the common customs tariff or where a duty is allowed between member countries. Clause 5(5) contains an order-making power to cover duties chargeable during the transitional period. Those are the only taxing powers existing today to which the Bill and therefore the Resolution apply.

Of course, Clause 2(1)—this is what the right hon. Member for Stepney (Mr. Shore) may have had in mind when he murmured a moment ago—covers …liabilities, obligations and restrictions from time to time created or arising… It is in the nature of the Communities that they are developing organisations. For instance, within the ambit of the common agricultural policy new commodities may well come up for inclusion within the levy system, and for the existing commodities the levy rates are regularly changed. Therefore, it is necessary to make provision for such new levies and for such changes to be directly applicable in this country.

But it is right to go on to make two further points. Firstly, there are no express provisions in the treaty which contemplate levies and duties in other areas. Secondly, no new charges could be applied for the benefit of the Communities without the express approval of Parliament. In other words, charges producing own resources must be ratified by member countries before they can become applicable, and ratification would be by Order in Council under Clause 1(3).

Sir Robin Turton (Thirsk and Malton)

Does that ignore, after 1978, the rate of value-added tax throughout the Community?

Mr. Jenkin

I am grateful to my right hon. Friend for raising that. I shall deal with it in some detail in a few minutes.

As I have said, the charges comprising own resources, charges applied for the benefit of the Communities, would require ratification by the House under the Order in Council procedure under Clause 1(3). Entirely new charges not forming part of the own resources are always possible, but they could be made applicable only after the Community procedures had been followed. Before such a charge reached the stage of being a Community decision, the Government would have played a full part in the Council of Ministers. Parliament, too, would have had an opportunity to comment under the proposed arrangements for apprising members of draft regulations and directives proposed to the Council before they are adopted.

Mr. Eric Deakins (Walthamstow, West)

Would Parliament have a power of veto over any new taxation not specified in the Bill?

Mr. Jenkin

It is necessary to draw a distinction between what I have described and new taxation. We are talking about taxation directly charged upon the people, to use the time-hallowed phrase, which could be applied towards the Community's own resources. That would be subject to the Order in Council procedure. If the House does not accept a decision of the Communities in that form, that would throw into question the whole continuing membership of the Communities. So far as we are dealing with taxes which would not be own resources, but which would accrue to the Government of this country, it is possible for such taxes in the nature of the agricultural policy levies and the coal and steel levies—there are not others in contemplation in any of the treaties—to be applied directly by virtue of Clause 2(1).

Mr. Douglas Jay (Battersea, North)

If one of the existing levies—say, an agricultural levy—was raised in amount but was not a new levy in itself, would that require an Order in Council?

Mr. Jenkin

No. I understand that if it were, as the agricultural levies are, directly applicable, it is intended that Clause 2(1) should cover it. These are part of the inescapable conditions of membership of the Community and adherence to the agricultural policy.

Mr. Jay

It would not then come before this House at all.

Mr. Jenkin

Except in so far as the preliminary Community procedures and the procedures under the Select Committee so provided.

But it is right to recognise just how narrow this direct taxing power is. Here I come to the point made by my right hon. Friend. Neither Clause 2(1) nor the Ways and Means Resolution covers, for instance, the value-added tax. By the Community decision of 21st April, 1970, the Communities' own resources will, by 1st January, 1975, comprise three items—the common agricultural policy levies, the common customs duties and the proceeds of a value-added tax at a rate not exceeding 1 per cent. I can give an assurance that the Ways and Means Resolution is not concerned with the last named of those.

My right hon. Friend the Chancellor of the Exchequer will be introducing a value-added tax in his Budget this year, and the House will be able to debate the Finance Bill in the usual way. The charge on the United Kingdom taxpayer will arise under that Bill and not under the Resolution.

Mr. Eric S. Heffer (Liverpool, Walton)

Is not that a temporary measure in the sense that ultimately there will be harmonisation between the Community and ourselves, if we are part of it, on the question of the levels of value-added tax? At that stage the discussions and arguments will take place as to the precise level. What happens then if we do not accept the levels agreed by the rest of the Community?

Mr. Jenkin

The hon. Gentleman is right when he talks about harmonisation, though that is not the phrase used in the decision of 21st April, 1970, which refers to its being assessed in a uniform manner. [Laughter.] This is important, because it is recognised, although discussion is going on on the subject in the Commission, that there may well be differences in the taxes as they apply in the different countries. I certainly do not envisage that it would ever be possible for a value-added tax to be a directly applicable tax. I envisage—here I can only give the House the best possible view we can express at the time—that any subsequent changes to the tax as accepted by the House, if indeed it is accepted when the Finance Bill becomes law this year, changes to comply with a decision to harmonise the tax, would themselves require further legislation. They could not be made under the Bill.

Mr. John Mendelson (Penistone)

Apart from any future changes to which my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) referred, what about the position the Financial Secretary has now announced, well in advance of the Budget, that his right hon. Friend the Chancellor of the Exchequer will introduce the value-added tax? What if the House came to the conclusion by a majority that it did not want to accept that proposal? Would it be able to change that? If not, do we still need a Chancellor of the Exchequer? Would not a Second Under-Secretary be able to introduce a Budget?

Mr. Jenkin

A value-added tax imposing a charge on the citizens of this country can only be introduced if the appropriate legislation—not the Bill, not the Resolution—is passed by the House. The hon. Gentleman is posing a hypothetical question. Perhaps it is not necessary for me to answer at this stage.

Mr. Mendelson

Yes it is.

Mr. Jenkin

If the hon. Gentleman presses me on this, the answer is that, as with other Community obligations, if Parliament is not prepared to accept the obligations inherent in the decision it took in principle last October, it calls into question the continuance of the application and of the Communities as a whole, should we by then be a member. This, as has been stated and made perfectly clear, is the substance of the matter.

Perhaps I can reinforce my point. As I said, there can be no question of extending the system for handing over the proceeds of taxation to the Community without a fresh agreement between member States, that is to say, a treaty. An agreement between member States was needed to set up the present own resources system. Although the terms of the agreement are embodied in what is described as a Council decision, that of 21st April, 1970, Article 201 of the original Rome Treaty, in pursuance of which the Council was acting, required that the Council's proposals be recommended to the member States for their adoption and, correspondingly, any extension of this financing system will be subject to the same procedure as is recognised in the terms of the existing decision. This means not only that the United Kingdom Government would have to consent but also that affirmative Resolutions would be needed from Parliament under Clause 1(3) of the Bill, as otherwise the Government would have no authority to hand over the necessary funds to the Community. Until the affirmative resolutions had been obtained under Clause 1(3), a new arrangement could not constitute a Community obligation for the purpose of Clause 2(3) and could not, therefore, be implemented by the Government.

Mr. Michael English (Nottingham, West)

I entirely accept the hon. Gentleman's point, but surely he would agree that to be able to tax the British people by possibly a completely new tax by the mere agreement of the Council of Ministers followed by an Order in Council and one Resolution of the House is very different from our previous procedures whereby, for example, we study the Finance Bill in great detail when it imposes a tax over a period of months in any given year.

Mr. Jenkin

As the 1967 White Paper recognised, there are constitutional innovations. That was recognised.

Mr. English

The hon. Gentleman means that there is no scope for amendment.

Mr. Jenkin

But it must be recognised—I have tried to make this point—that in the treaties as they now stand there are no proposals covering commodities othen than agricultural and coal and steel commodities for levies corresponding to those which would now be directly applicable under Clause 2(1). That would only arise under an extension of the treaties, which would require the procedures of the House to become effective.

I emphasise what I have been saying because it is essential to recognise just how limited is the extent to which, by the Bill and by this Ways and Means Resolution, the Community can impose taxation directly on citizens of the United Kingdom. Let me also emphasise that no one who supported the application to join can reasonably cavil at these consequences. It has been part of the Community system from the earliest years to have Community duties and levies—custom duties, agricultural levies and coal and steel levies.

Article 201 of the original Rome Treaty provides that The Commission shall examine the conditions under which the financial contributions of Member States provided for in Article 200 could be replaced by the Community's own resources, in particular by revenue accruing from the common customs tariff when it has been finally produced. It clearly contemplated that in due course the Community would have its own resources, in particular, revenue accruing from the common customs tariff, when in force, and that these own resources should replace the member State contributions provided for elsewhere in the Treaty. The Article required the Commission to submit proposals to that end.

Then we had Regulation 25 of 1962, which established the principle that at the single market stage the agricultural levies should belong to the Communities. Next: In May, 1966…the Council agreed…that from July, 1967, to December, 1969, Member States will hand over to the Guarantee Section"— of the guidance and guarantee fund— sums equal to 90 per cent. of the proceeds of levies on agricultural imports. That quotation is from the previous Government's White Paper of 4th May, 1967, on the basis of which the House voted on 10th May, 1967, to approve the Government's statement of intention to apply for membership.

On 22nd December, 1969, the Community reached agreement on the new system of Community financing envisaged by Article 201. This is the system of own resources which is now in force. It is described briefly in paragraph 8 and more fully in paragraph 18 of the previous Government's White Paper of February, 1970, Cmnd. 4280, "Britain and the European Communities. An Economic Assessment." It is clearly there stated that levies on agricultural imports and customs duties would be handed over to the Community. Clearly Britain would be bound by the regulation from the end of the transitional period, for as paragraph 43 says In the negotiations it will be necessary not only to settle our starting contribution to the Fund, but also to settle the transitional arrangements under which we approach paying our full share of the recently agreed Community financing arrangements. It is abundantly clear, therefore, that the House knew, before applying for Membership, that joining the Community entailed accepting a system whereby Community duties are imposed on United Kingdom citizens and firms and handed over to the Community. That is what Clauses 2(1) and 5(1), (2) and (5) achieve.

Mr. John Mendelson

On that point, as the hon. Gentleman said that everyone knew, did the Prime Minister include that clear statement in the Conservative Party election manifesto in 1970?

Mr. Jenkin

With respect, I am not sure whether that was a particularly relevant intervention.

Mr. Mendelson

Give the answer—"Yes" or "No".

Mr. Jenkin

The hon. Gentleman knows that there has been a vast amount of literature—I have some of it with me—on the subject of our application to join. Perhaps it is a little unrealistic to suggest that all the details would have been spelt out in the manifesto.

It is perfectly clear that everyone in the House who professed to understand this matter knew all about it. Anyone who voted for the application was to have been taken to have known all about it, unless his vote was to be regarded as a frivolous nonsense. Anyone who voted in favour of the application in 1967 or 1970 cannot cavil at these terms on this ground, now that the necessary statutory provisions are before the House.

I turn now to the Money Resolution. As I explained, this is needed because the Bill provides for certain payments from public funds to the Communities and to Community institutions. These include, first, most of the levies and customs duties about which I have been speaking. They will eventually be paid over in full but a refund of 10 per cent. to cover the costs of collection will be made to member countries. Then—and here the Money Resolution goes a little wider than the Ways and Means Resolution—the Money Resolution will cover the payment by the United Kingdom of the V.A.T. proceeds up to a 1 per cent. rate. As the House knows, all that we have so far is a Community directive of 1967 that member countries will introduce a V.A.T. system, and the decision of 21st April, 1970, that up to a 1 per cent. yield of such a V.A.T. assessed on a uniform basis, will constitute part of the Communities' own resources. As yet there are no common rules of coverage, no common rules of assessment and no common rates. In Articles 99 and 100 of the Rome Treaty, these would have to be agreed unanimously, and we shall be a full participating member by then. But when these are agreed and when the Communities issue a directive, and when the House has accepted separate legislation, the United Kingdom will be under an obligation to pay over to the Communities the proceeds of our V.A.T. up to a rate of 1 per cent., and this will replace the member State contributions provided for in the transitional period.

The Money Resolution goes wider than these payments which constitute the Community's own resources. It covers, in addition, the member State contribution, which is the residual element of the original revenue system, due to be phased out when the value-added tax provisions become effective.

Then there are various capital payments and loans due under Clause 2(3) of the Bill. They come under four heads: contributions to capital and reserves of the European Investment Bank, a contribution to the reserves of the Coal and Steel Community, loans to member States under the medium-term assistance scheme, and loans to the European Investment Bank. As my hon. Friend the Minister of State explained on Tuesday, the European Investment Bank raises almost all its funds in the Market. However, there is provision in its Articles for member States to lend to it and, accordingly, provision must be made in the Bill.

Here, I think, we come to the point raised in the Amendment. The Money Resolution provides that all these charges on public funds shall be charged directly on the Consolidated Fund, or alternatively, by Treasury direction, on the National Loans Fund. Last week's debate indicated that perhaps this did not meet with universal approval. It has been argued that the sums or some part of them, perhaps, should be voted annually. Therefore, I put briefly the case for charging them on the Consolidated Fund. I say "briefly" because this is a matter which, as the Resolution stands, will be fully open to debate when the Bill reaches Committee.

The most important, in money terms, of our Community obligations is that to pay over our share of the budget. By virtue of the decision of 21st April, 1970, and the implementing Regulation of 2nd January, 1971, the levies and customs duties must be handed over within two months from the end of the month during which the levy or duty accrued due. In other words, these funds never really belong to the United Kingdom. By a continuous process throughout the year, they flow through the Consolidated Fund to the Community budget. The Community's entitlement to the money is absolute from the moment that a claim on the importer for the levy or the duty is established.

Mr. English

Is not the hon. Gentleman aware that, while what he is saying must be true philosophically and while it would be wrong to refuse the money, the regulation that he has quoted says that it should be done by the constitutional procedures of each member State? Therefore, I suggest that, since it will in fact be done, presumably, by the Comptroller and Auditor General releasing from the Consolidated Fund or something of that character under the authority of the Bill, which is one constitutional procedure, it could be done equally well by the Comptroller and Auditor General releasing sums under the authority of Bills passed annually.

Mr. Jenkin

I have no doubt that the hon. Gentleman will develop that point if he succeeds in catching your eye, Mr. Deputy Speaker. I accept what he says about the constitutional authority. My point is that, bearing in mind the reality and the nature of these payments of levies and duties and the fact that they flow through the Consolidated Fund, I suggest that voting them annually would be wholly inappropriate.

Mr. Michael Foot (Ebbw Vale)

The hon. Gentleman has said that this Money Resolution went considerably wider in that, in some respects, it covered the value-added tax, or will cover it. Will these processes of flow applying to the levies without this House having any possibility of intervening also apply to the value-added tax when it is fully constituted as part of the own resources"? Secondly, why would not it be just as convenient not to have this Money Resolution covering the V.A.T. but to deal with it when we deal with the substantive legislation dealing with the V.A.T., by which time everyone may have had a chance to examine what the tax means?

Mr. Jenkin

The hon. Gentleman will recognise that his first question is one which does not admit of an answer. The necessary Community decisions have not been taken. The only decision is that there should be a value-added tax in member countries, the decision that eventually up to a one per cent. rate would be applied to "own resources". How this will be done, what would be the procedures and how the uniform rate would be worked out is not a matter on which a decision has been reached.

Mr. Foot

I want to get this quite clear. Does that mean that the decision about how the money to be collected by means of the V.A.T. is to be handed over to the Community and whether there is to be any subsequent intervention by this House depends not upon a decision of this House but upon the Council of Ministers?

Mr. Jenkin

With respect, it is bound to depend on the decision of this House. The necessary changes in any value-added tax needed to take account of any subsequent decision of the Communities to make the decision of 21st April, 1970, effective would be bound to come before this House, otherwise we should simply not have the machinery to do it.

Mr. Foot

I am sorry to be tedious—

Mr. Jenkin

Perhaps the hon. Gentleman will seek an opportunity to develop his point later, otherwise my speech will go on indefinitely.

My point in relation to the agricultural levies and the duties is that, as has been recognised ever since the necessary Community Regulations were passed, these do not in reality belong to member countries but flow through, in our case, the Consolidated Fund to the Communities. I suggest that an annual Vote in these circumstances would be wholly inappropriate. It would not recognise the reality of our obligation. Such an obligation can be properly reflected only by charging the payments directly on the Consolidated Fund. Anything else would be incompatible with the decision and the Regulation. Similar considerations might be expected to apply to the V.A.T. contribution as and when it started to flow.

Then I come to the member State contribution. This could, it is true, be voted like other international contributions and subscriptions. But, given the inevitable treatment of the levies, duties and perhaps the V.A.T. share, would not putting the member State contribution on a Vote be somewhat unreal? Bearing in mind that it is due to be phased out, it seems reasonable and sensible to treat it in the same way as the first group of payments.

Then there are the capital contributions. Those to the Investment Bank and the Coal and Steel Community reserves are initial subscriptions and part of the inevitable price of joining. Parliament could not refuse to vote them while still claiming accession to the Communities. Therefore these, too, are properly charged on the Consolidated Fund.

Finally, there are the loans to the Investment Bank and to member States under the medium-term assistance scheme. Clearly these would be appropriately charged on the National Loans Fund, as indicated by my hon. Friend the Minister of State last week. They, too, represent firm obligations under the Treaties, and one is doing no more than recognising that fact by charging them direct on the National Loans Fund. After all, this is the procedure used by Governments of both parties for the very similar loans to the International Monetary Fund where similar considerations apply.

What is the main reason put up in the debate last week for objecting to this procedure? It is said that Parliament's control of public expenditure thereby will be weakened. I believe that argument to be somewhat unreal.

First, it is recognised increasingly that our long-established procedure of Estimates, Votes, Appropriations and the rest, while essential to ensure proper accounting for expenditure, offers Parlia ment at best only theoretical control. The form is there. We all know the reality has long since departed. Those hon. Members who sat on the Procedure Committee which determined that we needed a much better system of Parliamentary control making use of the five-year Public Expenditure White Paper and involving eventually the Select Committee on Expenditure, will know that this is regarded as necessary because the established Statutory procedures have become really only the shadow and not the substance of control by this House.

Mr. John Mendelson

The hon. Gentleman is now developing an important new constitutional doctrine beyond the immediate debate. Is he now saying that the only reason why Parliament has subjected any financial outlay to its own strict and direct approval was for accountancy purposes? Is he not ignoring the far more important reason, namely that we control policy as a result of the control of finance? Is he to overthrow in an afterthought centuries of constitutional doctrine?

Mr. Jenkin

I am doing nothing of the sort. I am dealing with the question of whether the importance of Parliament actually being able to vote on an individual matter of expenditure represents the reality of Parliament's control over the Executive. It is true that the whole of the form is there, is necessary, and will be preserved for expenditure on Votes. But I hope that hon. and right hon. Members in all parts of the House will recognise that when we are talking about the control of expenditure it is not the Estimate, Vote and Appropriation procedure that provides Parliament with the influence which it may have upon the control of public expenditure.

Mr. Jay

Is not the hon. Gentleman simply arguing that because in his view we now only have the form and not the substance therefore instead of restoring the substance we should throw away the form?

Mr. Jenkin

The right hon. Gentleman could have a good point, but unless he is proposing that we should seek to restore the procedures, the timing, the Motions, and all the rest that used to accompany the Estimates, Votes and Appropriations for the whole range of voted expenditure, his argument is a bit unreal.

Instead the House has recognised, and this was done under the previous Government, that we are now developing a new panoply of effective controls over public expenditure—five-year expenditure White Papers, the annual two-day debate, and most important—I make no excuse for saying this—the Select Committee on Expenditure. I can assure the House that all the money covered by this Money Resolution will be fully covered by that procedure. My hon. Friend the Member for Banbury (Mr. Marten) raised the point in last week's debate about the Select Committee on Expenditure being entitled to examine this. I answer him categorically by saying, "Yes". It will be open to the Committee to probe as deeply as it wishes into the expenditure.

Mr. Neil Marten (Banbury)

That would mean that the Expenditure Committee would go roaming throughout the Community to follow up the money that was being raised here, to see that it was properly spent?

Mr. Jenkin

That would be a matter for the Committee to decide in accordance with the normal conventions of the House.

The argument is that the payments voted are not adequately debatable. I am saying if they are charged directly it is true that they are not debatable on the Second Reading of the Consolidated Fund Bill but they can always be debated under the Supply procedure introduced in 1966 and on Motions tabled for Supply Days. These payments can be the subject of Parliamentary Questions, they can be raised in debates on the Adjournment. There will be ample opportunity to discuss, question and challenge these payments.

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

My hon. Friend said that these payments could be the subject of Parliamentary Questions. Does this mean that there will be Ministerial responsibility in this House for the expenditure of the "own resources" money?

Mr. Jenkin

My right hon. Friend knows the House of Commons well enough to know that it is not beyond the ingenuity of hon. Members to devise forms of questions which will allow the substance of the matter to be raised at Question Time. The only limitation imposed by putting these sums directly on the Consolidated Fund and not on the Votes is that they cannot, year by year, be voted down. I would ask the House to recall when the last occasion was that the House ever exercised its power to vote down an Estimate. Even my right hon. Friend the Father of the House, the Member for Thirsk and Malton (Sir Robin Turton) would be hard put to it to recall the occasion.

In 1919 the Committee on Supply threw out an Estimate for Lord Chancellor Haldane's bathroom which was costing £4,800. Subsequently one of my predecessors, Mr. Stanley Baldwin, had to come before the House and ask it to reinstate £2,000 of that money because it had already been spent. That was the last occasion on which Parliament used its power to reject even a single item in a Vote.

Mr. Michael Foot rose—

Mr. Jenkin

I really must get on.

Mr. Foot

Practically all of this time is provided by the Opposition so I hope that the hon. Gentleman will not complain about my putting questions to him dealing with matters of great importance. He says that the House of Commons has not exercised its right to reject Estimates. In this sense it may be that the House has not been successful in carrying it through but I can give him instance after instance when his own party in opposition thought it was the only way in which it could exercise its rights. I remember Sir Winston Churchill when he was Leader of the Opposition tabling Motions dealing with Supplementary Estimates on the Health Service. What the hon. Gentleman is laughing at, mocking, is one of the most elementary rights that we have in this House and he really cannot dismiss it in this manner.

Mr. Jenkin

With the greatest respect, I am doing no such thing. What I am saying is that this House when it really wants to exercise its influence on expenditure—

Mr. John Mendelson

Has used this method.

Mr. Jenkin

No, with respect it has not. It has followed other methods, including the Supply Day method. As recently as 1966 it has extended Supply Days so that matters which are standing charges on the Consolidated Fund come within Supply Day Motions. These are some of the opportunities which are available to the House. I can assure hon. Gentlemen that I am not mocking anyone. I am pointing to the fact that the last occasion on which this was done was in 1919.

Sir Robin Turton

My hon. Friend has referred to me in this respect and I can give him a concrete example of the value of this method, when the House questioned the groundnut scheme in East Africa on a Supply Day. As the Minister responsible was a member of the Government and they had a majority the Motion did not succeed, but the House discharged its responsibility of questioning a gross waste of expenditure. We want to be able to do exactly the same in future but we will not be able to under this Resolution.

Mr. Jenkin

I am happy to reassure my right hon. Friend, because that is exactly what he will be able to do if those payments are charged on the Consolidated Fund.

Mr. English

How?

Mr. Jenkin

By tabling a Motion for the Supply Day. That was the procedure recommended by the Procedure Committee when my right hon. Friend was a member in the 1965–66 Session. It recommended a change so that matters of this sort should be debateable.

Mr. Heffer

A simple point. Suppose the Motion was carried. What happens?

Mr. Jenkin

I have no doubt that if it were sufficiently serious to be treated as a matter of confidence the necessary consequences would follow, just as they would have followed in the procedure to which my right hon. Friend referred in relation to the groundnut scheme.

Mr. Jay

If it is true that we can debate this expenditure on a Supply Day just as much as if it was on the Consolidated Fund why does the right hon. Gentleman want to put it on the Consolidated Fund?

Mr. Jenkin

Because putting it directly on the Consolidated Fund recognises the reality of the obligations which the House and country are accepting in joining the Communities. These are not payments on which it is appropriate to vote automatically, year by year, and which if not so voted would not pass to the Communities. I would have thought that was an argument of considerable substance.

The payments will, of course, come within the ambit of the Exchequer and Audit Department, the Comptroller and Auditor General's Report and the P.A.C. The accounting officer—I am advised that this will be the Permanent Secretary to the Treasury—can be questioned on them. The reality of parliamentary scrutiny under these procedures is every bit as efficacious as it would be under the procedures of Estimate, Vote and Appropriation and I submit that these proposals are right. These two Resolutions are necessary to allow the Bill to proceed. I hope that I have explained their purpose and effect adequately.

5.50 p.m.

Mr. Peter Shore (Stepney)

We took the rather unusual step of seeking a separate and substantial debate on these two Resolutions so that we can focus the attention of the House and the country on what appear to be almost unique features of the European Communities Bill: I refer to the expenditure and taxation obligations which the Measure will impose. I am sure that we were right to do this. We are right because to us the principal defect in the negotiations, as revealed in the White Paper last July, in the Treaty of Accession and to some extent in the Bill itself, as they affect the prosperity of this country, is the heavy burden which we shall have to bear in meeting the financial obligations of membership.

It is also right for us to have this debate because these two Resolutions undoubtedly do great damage to the effective authority of Parliament. While the Money Resolution would deny us the opportunity of effectively scrutinising these large payments, the Ways and Means Resolution—the most extraordinary that has ever come before Parliament—actually cedes the power of taxation to the European Communities. If I had any doubt at all in my mind about the value of having such a debate, such doubt would have been completely dispelled in listening to the splendid exposition by the Financial Secretary, who put the matters to us as plainly, as brutally and as unacceptably as the matters deserve to be put. We are deeply grateful to him for doing so. We have learned a lot in the process of question and answer in which my right hon. and hon. Friends have engaged with the Financial Secretary. We have learned also from his exposition of what is involved.

Mr. Patrick Jenkin rose—

Mr. Shore

I have not finished paying my tribute.

Mr. Jenkin

I am grateful to the right hon. Gentleman, but I want to be spared my blushes. He said "as unacceptably", but I did not say anything in my speech of which he as a member of the last Government was unaware at the time when the 1970 White Paper was published.

Mr. Shore rose—

Hon. Members

Go on.

Mr. Shore

I shall deal with that. There is no need to worry. The Financial Secretary comes relatively new to these debates. There are veterans sitting behind him who will be well aware of the moves in this chess game. The Chancellor of the Duchy of Lancaster has made a whole series of moves which it is becoming very tedious to follow. I would rather not do so now but I have something deliberate to say about these things and I shall come to that.

I was saying that we welcomed what the Financial Secretary said and the clarity of his exposition, because there are matters here which we need to have explained to us. We have also taken aboard a number of matters—warnings for the future, perhaps—of which the House may not have been wholly aware. I refer to what the hon. Gentleman said about the Communities being developing institutions and, therefore, the possibility that future taxes might be added to the "own resources" package. My right hon. Friend the Member for Battersea, North (Mr. Jay) referred to the Communities being able to increase the existing levels of "own resources" taxes without such matters necessarily coming before this Parliament.

The Financial Secretary also told us a great deal about his attitude to what is involved in the extraordinary justification which he gave of the procedures concerned in the Money Resolution when he told us that in a sense it did not matter because we have already lost the reality of control over expenditure in this House. If people start the discussion and approach to these matters on the basis that we have already substantially lost control over expenditure and the proper use of the House of Commons, those who start with such propositions will be driven to quite appalling conclusions.

I shall say nothing on this occasion about the nature of the taxes which are involved in the package covered by the Resolutions. I shall defer comment on the effects of the taxing of our food and all the goods and services that will be covered by the value-added tax and the effect that those taxes will be bound to have on the cost of living, on our distribution of incomes and on the health of our economy. I shall confine myself to the total sums involved and the impact which these may have on our national prosperity. Clearly, substantial sums are involved; just how substantial, however, we do not know. As the Money Resolution asserts, there are to be such sums as may be specified in the Act, being sums required to meet payments to any of the Communities or to Member States or to the European Investment Bank", and so on.

Although we have every reason to believe that they are substantial, these sums are nowhere adequately described or defined. In the Treaty of Accession itself the financial provisions are briefly dealt with in Articles 127 to 132. There we find some account of the taxes which we are to pay and, in the transitional period, the reduced contribution we are to make, a distinction which hon. Members will recognise. Unfortunately, no figures of value are produced in the treaty itself. All that the treaty sees fit to expose is the rising percentage of our notional percentage payment to the Community budget in the years 1973, 1974, 1975, 1976, 1977 and then the further fractions which we are to pay in 1978–79. There is an empty space for 1980 when we commence payments under the Community "own resources" system—a complete void at that point.

The Explanatory and Financial Memorandum is a little more forthcoming. There we are reminded that The Government's estimate is that the net cost to the United Kingdom, taking into account estimates of possible receipts from the budget, might rise from about £100 million in 1973 to about £200 million in 1977". As the House will recall, this is simply a summary of the information in the July, 1971, White Paper in which we were told that our total net contribution for the five years 1973–77 was likely to be £725 million. Again, beyond 1977 the Bill, like the Treaty of Accession, gives us no guidance, and the Government have refused adamantly to go further themselves.

We understand the Government's embarrassment in this matter, but the best estimate that I and others have been able to make is that there will be very sharp increases indeed after 1977 beyond the £200 million net contribution that we shall make then. So far as we can judge, the net contribution by 1980, rising very steeply indeed, is likely to be about £470 million a year—the figure that the Government themselves presented to the Six in Brussels on 30th July, 1970. It will be recalled that this vast sum—we must establish it, because we are talking not of trivialities but of major sums—must be paid from whatever trade surplus we can earn and has to be handed over across the balance of payments as a direct cash payment to the Community.

The House will also recall that, apart from the last two years—when our surpluses have been swollen by appallingly high unemployment and by exchange rate changes of an unprecedented kind—this country, in the whole post-war period, has never once earned a surplus as large as the figure which by 1980 we are expected annually to pay. This is a very serious matter. Difficulties with our balance of payments have been a recurring theme in our post-war economy—the main reason why we have found it so difficult to attain a satisfactory rate of growth in the British economy and the reason why we have had intermittent bouts of high unemployment and periods of economic stop.

Because it is so serious, I regret the Government's refusal to discuss this matter frankly. Instead, as we all know, they have sought to avoid the issue, first by asserting that realistic estimates cannot be made, then by throwing dust in our eyes with the assertion—quite irrelevant to the issue itself and also untrue—that the Labour Government had accepted the same burden, and finally, as I reminded the House last week, by relying on that rather pathetic verbal formula that if unacceptable situations arose—in other words, if we could not pay—the Community would somehow have to find a solution.

That is the backcloth. But not only are we being asked to authorise a dangerously large and open-ended and uncosted amount—I must emphasise that it is uncosted, open-ended and very large—but we have every reason to believe that the burden which the Community financing system imposes will be disproportionately heavy upon ourselves, much heavier than on any other member of the Community.

It is extraordinary that in all our debates we have not had any comment from the Government as to the distribution of these tax burdens between the different members of the Community, either as it is now or as it would be if it were enlarged. The best estimate that we can make from outside is that the Community budget would cost Germany, with a considerably larger income than our own, about £130 million a year. Italy, with a smaller national income than our own, will come out virtually even. Belgium and Luxembourg expect to gain about £27 million a year, the Netherlands £180 million and France over £310 million a year.

I hope that those figures are lodged in the minds of hon. Members because it is against these figures that we have to view the minus of £470 million a year, which is the only estimate which has been made of Britain's contribution under the "own resources" formula. In short, as those hon. Members who can do these sums will already have discovered, we shall be financing ourselves by far the larger part of the Community's transfer payment.

How has this come about? During the earlier years of the Community, the Community budget was financed largely through national contributions based on the relative national income of the member States. A kind of key was established to try to be fair in assessing the contributions of the nation States according to their relative economic strength. This was supplemented, as we were reminded by the Financial Secretary, by levies on imported food. The exact mix was agreed for two- or three-year periods and was subject to considerable variations at different stages in the long initial transitional period.

It will be recalled—this is my first comment direct to the Financial Secretary—that it was precisely the levies on imported food which were the subject of the major reservation by my right hon. Friends on the eve of the "non-negotiation" of 1967. The then Foreign Secretary said in his speech at The Hague: I think it is recognised that the existing financial arrangements would be an inequitable burden on the United Kingdom". That was what he said in 1967, so it is no good pretending that this was accepted by us. That was said deliberately, and it could only have related to the levies, which were the only tax then in force.

The Foreign Secretary went on to say—this is the direct answer to that part of the Financial Secretary's charge— We shall look forward to taking part as a full member of the Community in the negotiation of the financial arrangements for the period after the end of 1969. In other words we would, under those arrangements, from the inside, have had that very right of veto over the development of permanent arrangements which could alone have preserved our position as an applicant State. This is a very important change indeed.

In April, 1970, at the end of the Community's original 12-year period, the Community of course agreed its new and now permanent financial system. It was only when that was agreed, as the Chancellor of the Duchy of Lancaster well knows, that France decided that she would be prepared to open the possibilities of negotiation.

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

As the right hon. Gentleman knows, although the formal agreement was in April, 1970, the nature of these arrangements was known in February, 1970, and taken into account in the Labour Government's own White Paper.

Mr. Shore

It was not, with respect. I remember all this very well. The February, 1970, debate—[Interruption.] This is where we get into the chess game about paragraphs 43 and 44. I do not want to go over all that ground again, but I have something slightly new to say to the right hon. and learned Gentleman. [An HON. MEMBER: "We do not have time."] We have time to elaborate these points. If hon. Members want a full reply on this matter, they can have it. They should not imagine that there are not replies to these rather jejune points, because there are.

Perhaps I can give the right hon. and learned Gentleman what he wants—one or two quotations. I will quote first from the February White Paper. I inform the House and the Chancellor of the Duchy of Lancaster that this is the last time I intend to do this, because it is just trivialising and boring for us to go over these matters when what really matters is whether it is the right decision—not who said what and when.

This is the last time, I think, that in response to this challenge I shall be bothered with this absurd exercise. I will now read what is said in paragraph 44 of the White Paper of February, 1970: The implementing decisions have not yet been taken"— that is, of the new, own-resources system. They have reached agreement in principle on arrangements for meeting the cost, but their application in a reasonable and equitable way to our situation must be a matter for negotiation, as has always been recognised. To make it absolutely plain and beyond further dispute I have now to call in aid the speech of my right hon. Friend the Member for Fulham (Mr. Michael Stewart), then Secretary of State for Foreign Affairs, when he spoke to this White Paper in the House in the debate on 24th February, 1970. My right hon. Friend said: The White Paper of which we are asked to take note reaffirms the policy of opening negotiations. It does not make announcements on policy. It reaffirms, rightly, that item of policy"— the reopening of negotiations: it goes no further. It is not a statement of policy but a response to the repeated and indeed justifiable requests for an economic assessment."—[OFFICIAL REPORT, 24th February, 1970; Vol. 796, c. 998.] How can that possibly be represented in all fairness and honesty as being an endorsement and acceptance by the Labour Government of 1970?

Mr. Russell Kerr (Feltham)

May I supplement what my right hon. Friend has just said? Is it not the fact that with the publication in the February, 1970, White Paper of the truly astronomical cost, making it known to Labour Members at any rate for the first time, there was a total swing of opinion within the then Government party which has resulted ever since in a very determined majority against these ridiculous proposals?

Mr. Shore

The White Paper had a very considerable effect. I do not think it was necessarily the only factor in the matter but I believe it is no coincidence that opinion in the country, and to some extent in the political parties, was influenced by that White Paper, as indeed it should have been.

Mr. Rippon

Will the right hon. Gentleman make clear that he has quoted only a very small part of paragraph 44 and left out paragraph 43? Will he not agree that paragraph 44 of that White Paper which he accepted went into very considerable detail on the net effect on our balance of payments burden? In 1967 it was thought that it would be between £175 million and £200 million and it was then thought it might be higher, so there was not a great deal of difference between us on the end of the negotiations except that ours have produced better results than the Labour Government expected.

Mr. Shore

The right hon. and learned Gentleman wanted earlier to establish the point that is so essential to him because he will not stand on his own two feet in the matter of argument. He wishes all the time to borrow and to lean upon the strength of what he pretends were specific commitments made by my right hon. Friends. Again, I can only say that one deplores this as a way of arguing these matters and I assure the right hon. and learned Gentleman, speaking as I do with some knowledge and authority, that he is wrong and that we did not accept or consent to these proposals.

Mr. Kerr

And we would not have been allowed to.

Mr. Shore

That is all I can say to the House. I give the House that assurance and the right hon. and learned Gentleman really has to accept it from me. There is very little I can say beyond that.

I was coming on to contrast the older systems with what was agreed in April, 1970. In the 1970 agreement the national contributions were to be abolished by 1975. The old figure relating these to the national income key is to be abolished in 1975 and replaced by the yield of the three taxes of which we have spoken—customs duties on goods imported from outside Europe, levies on food imported from outside Europe and the 1 per cent. value-added tax. Moreover, in so far as the yield of these taxes was needed for the expenditure of the Community they would cease, under the April, 1970 agreement, to be the revenue of member States and would become instead the Community's "own resources".

I must point out to the House how it is that this system discriminates so harshly against us and why these taxes particularly hurt us. First, with our century-old policy of agricultural free trade and close ties with the American and Australasian continents, we are the biggest food importers in the world. Whereas the Six are by and large self-supporting in food, we import 50 per cent. of our food. So, of course, a system of levies is bound to affect us most grievously.

The Government's own estimate in July, 1970, was that we would pay 45 per cent, of all the levies contributed to the Community. That was why my right hon. Friends, in the non-negotiation of 1967, made such a fuss and said we would not accept it, because they knew this was bound to be the case. Again, because we are world traders, because a much higher proportion of our imports comes from outside Europe than is the case with other members of the Common Market, we are bound to pay more customs levies than all the rest. Indeed we reckon, although we are one-fifth or less of an enlarged Community in terms of our national income that we would pay no less than one-third of the total customs duties to the Community.

It is true that the value-added tax may work a little more fairly between the member States but it should be noted that it will be collected only after the full yield of the levies and customs duties have been collected and then only to the extent that that value-added tax contribution is required. This is not all. While we pay this ludicrously high proportion of the total budget for the reasons I have described—deep historical reasons which go to the very structure of our economy—we are also certain to receive a disproportionately small part of its expenditure. The main spending, after all, is to prop up the numerous small farms of the Six and to subsidise the sale of the surplus farm products of the Community as a whole. While 15 per cent of the employed population of the Six work on farms, less than 3 per cent. of our population work in British agriculture. Thus we cannot expect to be a large-scale recipient of moneys that are meant to help reorganise small farms or to help to deal with the problem of any large surplus production of home-grown food. We would receive very little.

Mr. Patrick Jenkin

The right hon. Gentleman has made a great deal of the previous Government's objection to the agricultural levy system and the burden this would throw on our balance of payments after the transitional period, which he says is why his right hon. Friends made such a fuss about it.

To remind myself I have been reading the last three paragraphs of the White Paper on Agriculture (Cmnd. 3274) which sets out what the effect of that common agricultural policy would be. There are a number of factors which it spells out as determining the figure but it nowhere mentions that it had anything to do with the negotiations, because the right hon. Gentleman's Government knew perfectly well that if they joined they had to accept the common agricultural policy as it stood from the end of the transitional period.

Mr. Shore

The future of the common agricultural policy was not agreed in the spring of 1967, and still less the means of financing it. Anyone who does not understand that has just not been serious in doing the work that should be done to understand the Common Market.

When we consider the net effects of what we pay out and receive back, these arrangements are little short of a national disaster. No Government in their senses could have agreed to terms so clearly against and detrimental to our interests. It is difficult to imagine a system of taxation, a tax mix, that could impose a heavier and more disproportionate burden upon us than the particular tax mix that has emerged as the permanent tax system of the Community under the "own resources" rule. I do not say that was the Community's purpose, but they have been extremely blind in not recognising the grievous effect this is bound to have upon us. Indeed, I cannot recall another example in history of a free country, without compulsion from outside, entering upon an arrangement so damaging to itself.

Apart from being disastrous and unfair, these arrangements, as the Financial Secretary has made so abundantly clear, constitutes a direct challenge to the most important power of Parliament, our exclusive control over taxation. As the Ways and Means Resolution makes clear, we shall permit the Community to tax the British people. We are acceding not just to the Treaty of Rome but to the Treaty of Luxembourg of April, 1970, which specifically authorised the Community to have its own resources and to receive the yield of the three taxes to which I have referred.

That agreement was a major development in the Community and I found it extraordinary that, in our debate last week, neither the Solicitor-General nor the Prime Minister had anything to say about it. The Solicitor-General amused himself greatly by quoting from the 1967 White Paper on the legal and constitutional implications of Britain joining the Common Market but, in his efforts to show that the constitutional innovation of the Communities having directly applicable law in the United Kingdom was known in 1967, he totally, and to me surprisingly, omitted to mention the second and even greater constitutional innovation which occurred in 1970: the right of the Communities to tax directly the member States. This was not mentioned in the 1967 White Paper. Why should it be, when the system we now know was not then evolved and the Community had not the right or the express intention at that stage of acquiring it? For the Prime Minister to say, as he did last Thursday, that the constitutional position has not changed in any single respect since the negotiations of 1961, when it was fully discussed in the House time and again, is stretching the truth to the greatest possible extent.

This is a major development in the Communities, as a consequence of which there is a major intrusion into the sovereignty of Parliament. The strongest of all our constitutional principles is that Parliament, and in particular the House of Commons which represents the people of this country, alone has the right to levy taxation. That has been the basic constitutional doctrine. Because Parliament three centuries ago insisted on this right, we gradually brought the Crown and the Executive under the control of elected representatives. As we were reminded recently, Parliament made the supply of money to the Government conditional on the remedying of grievances. That was the way in which control by the House of Commons was brought about.

There should be no doubt about what is intended here. It is not proposed that we should make a contribution to the Communities which we can alter if we think it is too much or too little. It is not a contribution at all. The right to levy the three taxes which are specified is to be ceded to non-elected institutions of the Community without the further consent of Parliament or the British people.

As the Ways and Means Resolution puts it, we shall be giving effect to any charge to taxation of those Communities ''. That is quite unacceptable to us.

Further, as the Money Resolution makes clear, the moneys granted are to be charged on the Consolidated Fund or the National Loan Fund. The effect of the Money Resolution—and I am still unsatisfied by the Financial Secretary's explanation—is deliberately to place those sums outside the ordinary and annual scrutiny of this House. We have heard that it is possible for the House to discuss them, but my right hon. Friend made a major and salient point when he asked why the charges were put into the Standing Services of the Consoli dated Fund if it is just as easy to debate them there as it would be on ordinary Supply. The answer surely is that they are put there because it is more difficult. Why else should they be joining community with the Civil List, the servicing of the National Debt, Mr. Speaker's salary, judges' salaries and other matters which we do not think should normally be discussed year by year? I am always interested in what the Financial Secretary has to say, but his sophistry this afternoon was amazing.

As the House will recognise, the purpose of our Amendment is to defeat this intention of the Government and to ensure that if any moneys are to be paid they will at least be provided by Parliament on an annual basis. I believe that the Amendment will recommend itself to all quarters of the House.

While we shall seek support for our Amendment to the Money Resolution it is our intention to vote against the Ways and Means Resolution, thus expressing our resolute opposition both to the appalling bargain that the Government have struck in the negotiations and to the whole abominable principle that a non-elected institution outside this country should have the right to tax the British people.

6.27 p.m.

Mr. Edward Gardner (South Fylde)

Had the speech which the right hon. Member for Stepney (Mr. Shore) has just made been translated into French, German or Dutch and made 15 years ago in any one of the Parliaments of the member States of the Community, one could have listened to it with some respect and with some apprehension about the future. If one looks back at the reports of speeches made in the Parliaments of Europe 15 years ago one sees that that kind of speech was being made time and time again by people who did not know the future and did not know what they were going into. Today, no one on either side of the House has any excuse for saying that he does not know of the experiences of Europe during the last 15 years.

Mr. English

The hon. and learned Gentleman said, correctly, that there were many debates on this subject in many Parliaments, but is it not true that in the Bundestag it was decided that this matter should be discussed annually, which is exactly what we are saying?

Mr. Gardner

Yes, but that is not appropriate now. I will explain and develop that as a point when I come to it.

I am saying that there is nothing we know now that has not been known over certainly the last seven to 10 years. There is nothing that my hon. Friend the Financial Secretary to the Treasury has said to the House today that the Socialist Government did not know. Indeed, the point that was put to the right hon. Member for Stepney about whether this was so has not been answered. It cannot be answered except in this way: that the speech by my hon. Friend the Financial Secretary today cannot be regarded by anyone in the House as something that is new or contains any surprises. This has all been known for years. To suggest that the Government have in some way been concealing from the House or from the country the financial consequences of joining the Common Market is a travesty of the facts.

In these circumstances I should like to look at the fundamentals of the position. As we all know, up to 1970 the Community was to be financed by the member States from levies on agricultural imports of which the whole, with the exception of a 10 per cent. rebate for collection costs, was to be handed over to the Community. The remainder of the finance for the Community was to be collected from national contributions by member States. We all know this; it is elementary. We all know that from 2nd January this year that system is being progressively changed so that ultimately the Community will be relying upon its own resources, and those resources will be collections from agricultural levies and customs dues. There is nothing new in this. It was all anticipated; it was all presumably in the minds of those who were dealing with the question whether we should apply for membership of the European Economic Community when the Labour Government made their application.

What is required here? What is being asked of the Government? The only sure, practical way of financing the Community is to see that the finances that have to be raised for the Community budgets are there with certainty. If they are to depend upon an annual vote of individual Parliaments inside the Community, there will be no certainty. The funds have to be earmarked, there must be automatic payments. We cannot have the Community reduced to the financial condition of the United Nations, where contributions are made according to the whims of individual nations, can we? The Community cannot be run like that. It is quite out of the question.

That because of these conditions, of which we have known for years, we should not go into the Community may be the view that some hon. Members on the Opposition side of the House, and, let me add in all fairness, on this side of the House as well, hold and have expressed. But to suggest that until recently this has been in any way a party view, at least so far as the Opposition is concerned, is to look in a mirror that completely distorts the past, misleads the present and puts the future hopelessly out of focus.

What the Government are seeking to do now is plain common sense. I speak as one who has been an enthusiastic European for many years and who does not treat this as a party matter, because indeed I do not. If I felt convinced, as do some of my right hon. and hon. Friends, that the Community was not for this country, then indeed I would find myself in the position in which they have found themselves, and I like to think that I would have the political courage to do as they have done. But I do not, and I have not. I have spoken to them and they will agree with this. We have argued together, I hope in the best of good humour but none the less seriously, about the rights and wrongs of going into the Common Market. I have been convinced for many years. It would be wrong for me to detain the House—indeed I should be going outside the limits of this debate—to give my reasons for my conviction that this country ought, for its present and for its future, to go into the Common Market. But even as an enthusiastic European I am the last person in this House, I hope, who would wish to see the sovereignty of this House diminished.

If that seems to some to be a contradiction, I will just say this to clarify the matter. In my view, when one joins in an agreement or joins a community of this kind there must inevitably be some diminution of freedom. It cannot be otherwise; there is give and take. [An HON. MEMBER: "Too much give and not enough take."] There is much give and a lot of take in this.

In my anxiety over the powers of this House I am pleased to have heard from my hon. and learned Friend the Chancellor of the Duchy of Lancaster that this House, through a Committee, will be given the opportunity of reviewing and examining, and no doubt analysing in depth, the directives and regulations which ultimately this House will have to accept unless it is able to identify some particular regulation or directive which is so detrimental to the interests of this country that we shall have to persuade our colleagues in the Community that our views must prevail.

But these are matters which might be described as "old hat". We have known of them for years.

Mr. John Mendelson

The hon. and learned Gentleman is making a Second Reading speech.

Mr. Gardner

No, I am not. I am making, I hope, a contribution in all seriousness to persuading the House that what the Government are doing is the only thing that can be done to provide the funds the Community needs from this country. I only hope that the misunderstandings and misrepresentations, the way in which some Opposition Members are seeking to deceive the country about what is being done—

Mr. Shore

Deceiving themselves.

Mr. Gardner

Deceiving themselves as well indeed but, fortunately, not the whole House of Commons. I hope that this will not in any way confuse the issue. I for one support wholeheartedly the manner in which the Government seek to fulfil their obligations—obligations of which we have known for many years.

6.40 p.m.

Mr. Arthur Lewis (West Ham, North)

I listened in amazement to the hon. and learned Member for South Fylde (Mr. Gardner), who made a somewhat lengthy explanation to tell the House that, because he had always been in favour of Europe, that must of necessity be right. He may be right, but I have always been strongly against going into Europe and claim that I also have been right.

The hon. and learned Gentleman tried to denigrate some of my hon. Friends because they may or may not have changed their views since 1967. Since that time they may perhaps have become anti-Common Market, whereas formerly they were pro. However, it is not unusual for politicians on both sides of the House to change their views.

I remember in 1962 my right hon. Friend the Leader of the Opposition being violently anti-Common Market, and there are many quotations I could use in support of that argument. In those days no attack was made on him. In 1966 he changed his mind because he thought he would be able to negotiate favourable conditions. Many of us thought that he could not be able to do so, and subsequently we were proved right.

It is not unusual for issues to change. I remember many Conservatives being violently against the National Health Scheme, but when they found that it was becoming popular—[Interruption.] Yes. they voted on Second and Third Reading against the principle.

Sir Robin Turton

That is quite untrue. The Conservative Party tabled a reasoned Amendment drawing attention to some of the weaknesses in that scheme. The Conservative Party did not oppose the National Health Scheme which was embodied in a White Paper by Sir Winston Churchill in the middle of the war.

Mr. Lewis

The point is that right hon. and hon. Members on both sides of the House change their minds, but nobody now seems a castigate either the Leader of the Opposition or the Prime Minister for introducing charges for teeth and spectacles and other health charges. The argument has been that the economic siutation has changed and therefore circumstances have changed. It is always said that they are good reasons for acting in a certain way.

It may be that some of my right hon. and hon. Friends are now saying that circumstances in 1972 are different from those which obtained in 1967. At the moment the present Government do not seem even to be able to negotiate with the miners. My right hon. and hon. Friends have been able to prove on the facts and figures that the Conservative Government in this instance, as in most other things, have made a complete hash of things. In the Cockney vernacular they have made a mess of it. But having got this far and committed themselves, they have not the honesty and decency to admit they have made a mistake. It would he far better for them to say "We have now changed our minds". This is even more important when new evidence comes along, and there has indeed been some new evidence in the last few years.

I am amazed at some of my hon. Friends. I heard one on the radio programme "World at One" shedding crocodile tears that we were making him do something against his conscience. It is amazing the number of times I have had to do many things against my concience—[HON. MEMBERS: "Oh."] I am glad that hon. Members opposite have corrected me. [An HON. MEMBER: "Start again, Arthur."] They have tried to make me do things against my conscience and always—my record is there for all to see—I have not worried and have voted for what I believed. And often I voted against my own Government, as I have done consistently on this particular issue. I voted against my own Government because I believed they were wrong, as I believe the present Government are wrong. I voted consistently against health charges, and I have voted in support of my party's policy as laid down as its conferences.

The Liberals were the only people at the last election who said they, come what may, would go into the Common Market. The right hon. Gentleman the Prime Minister gave a solemn pledge, not once but dozens of times, that he would not go in unless he had the wholehearted consent of the people and of Parliament.

Mr. Marten

Full-hearted consent.

Mr. Lewis

I am grateful for the correction. Can anybody say that we have had the full-hearted, wholehearted or absolute consent of Parliament and the people on this issue? Of course, we cannot. Did any party, other than the Liberals, say they would go in on any condition? No, it was only the Liberals.

Mr. David Steel (Roxburgh, Selkirk and Peebles)

No, we did not.

Mr. Lewis

The Liberals know what happened to them. They lost a number of seats—[An HON. MEMBER: "So did Labour."] We lost a number of seats because we did not clearly say that we were wholeheartedly against entry. If we had been definite and said that we were wholeheartedly against entry, we would have gained more seats. I am sorry we did not do that.

We are now being asked in the Ways and Means Resolution to allow some bureaucratic organisation in Brussels, to which none of us will be elected—

Mr. Steel

We might be appointed.

Mr. Lewis

No, we will not. The usual supporters of bureaucracy will be appointed only if they are good yes-men. They will be appointed with no power to alter or amend. The hon. and learned Member for South Fylde, who seems to know all about parliamentary procedure, at least should have had the courtesy to wait to hear the speech of the hon. Member who followed him.

Mr. Robert Adley (Bristol, North-East)

On a point of order—

Mr. Lewis

It cannot be a point of order, because the hon. Member for Bristol, North-East (Mr. Adley) is about to explain the absence of his hon. Friend. No doubt the hon. Gentleman was about to excuse his hon. and learned Friend's absence by saying that he has gone to a Committee. For all I know he may be going to Europe on a Committee and will not be able to return to deal with the debate. He would be one of the permanent absentees to whom I referred earlier in regard to one of my hon. Friends, who is one of the permanent absentees in Europe. Those absentees will have no power to alter or amend any of the rules and regulations laid down by the Council of Ministers.

Indeed, I recollect bringing in a 3 ft. pile of rules and regulations on the secondary legislation. It took me about 12 months to get the Government to get them presented. It will take 12 months to look through them, let alone to study them to know them. I challenged the Minister then and I challenge him now. Will he give me an assurance—which he cannot and will not—that we can alter or amend any one full stop or comma in any one of those rules and regulations? Is it possible for this House to make any alteration or amendment in any way, shape or form in some 1,500 rules and regulations which affect the lives and well-being of every man, woman and child in this country?

No Member of this House, from the Prime Minister down, has discussed them. It was not until quite recently that we ever saw them. I spoke to a prominent Cabinet Minister when they were issued. I said, "I want to study these rules and regulations. Have you seen them?" He said, "Have I seen them—?" I will not use his non-Parliamentary language. I will say, "No, of course I have not seen them. The first time I saw them was when you got them." I said," So you do not know what is in them? He said, "I do not know what is in them. I have never seen them." So I said, "Then none of the Cabinet has seen them?" He said, "Of course we have not seen them." This is before we go into the Market. They are—

Mr. Nigel Spearing (Acton)

They are the law.

Mr. Lewis

That is right; they are the law. We cannot alter or amend any of them.

Now we have the Ways and Means Resolution. I agree with the right hon. Member for Wolverhampton, South-West (Mr. Powell) that it will not go through because the people of this country will start screaming on this matter. If the British people are not allowed to bring forward their views, as the Prime Minister said, to give their wholehearted consent, then there will be a scream and the Government will not get these matters through.

Even if the Bill goes through, what do we find? We find that money and taxation will be raised in Brussels by some bureaucrats. Some will come from Germany which, by the way, I suggest has not got the history of the greatest of democratic traditions over the years. [HON. MEMBERS: "Really."] Really, it is true. Italy is not the country of the greatest democratic traditions over the years. [HON. MEMBERS: "Oh dear."] More than "Oh dear". It is true. France, of course, has not got the greatest of historical democratic traditions.

Mr. Adley

That is a racialist argument.

Mr. Lewis

No, it is not. I am coming back to this point. I am speaking up for this House of Commons for which perhaps the Conservative Party has not much care, but I have. I am proud of the fact that I can and do get up here and attack and query and question Ministers. I can get up and make myself awkward, which I do. I can get up and say that I do not want to see this legislation go through. I may or may not succeed, but at least I have the opportunity.

If the Ways and Means Resolution goes through, what happens? I am then told, "You cannot do anything about this. This was agreed on 22nd February and it is now part of the Act." If some bureaucrat in Brussels decides that the 1 per cent. value-added tax shall go up to 5 per cent. and our Ministers. knowing how they give way under pressure, which they do, then agree, whether it is in the interests of Britain or not—I do not think that they often know what is in the interests of Britain—they then come back to this House and we are told. "We have agreed to a 5 per cent. value-added tax. You may discuss it, you may say just what you like, but you are not allowed to vote against it. You are not allowed to alter or amend it. because this has been agreed by the Council of Ministers in Brussels."

Mr. Patrick Jenkin

The hon. Gentleman, after about 20 minutes, has reached the Ways and Means Resolution. His first proposition on the Resolution is totally wrong. In those circumstances the House would indeed vote on it under the procedure which I have already explained in my speech.

Mr. Lewis

Yes, we can vote on it, but the vote would be non-effective because the Council of Ministers has agreed and we, through our Minister, would have agreed to it. We would have no power to upset a decision which had been arrived at by the Council of Ministers unless our Minister used the veto.

Mr. Patrick Jerkin

The hon. Gentleman is again quite wrong. That charge could not affect people in this country until this House had voted on it, and it would be ineffective regarding any obligation which we might have towards the Community. I must ask the hon. Gentleman to accept that, because that is the position.

Mr. Lewis

Perhaps the hon. Gentleman will discuss this matter with the Chancellor of the Duchy of Lancaster, because he has given me different information from that which I received from the right hon. and learned Gentleman. I asked the Chancellor of the Duchy whether the 1,500 rules and regulations which have already been agreed can be altered. He said that they could not be altered because, once the Council of Ministers has come to a decision, unless we, in our national interest, have said that we will not accept it and use the veto, it becomes the policy of the Council of Ministers and becomes a regulation laid down by Brussels. If it becomes a regulation it then becomes operative. If the hon. Gentleman is right—I hope that he is—it means that we can alter the 1,500 rules and regulations which have been agreed. Can we alter any of them?

Mr. Patrick Jenkin

I hesitate to intervene again in the hon. Gentleman's speech. However, he has chosen a matter to which I devoted a considerable part of my speech about "own resources", where a payment to the Community is to form part of the Community's own resources. That could only be altered from the position as it now stands under the decision of 21st April, 1970, by an amendment or a new decision which would require the Government to come back to this House and get an affirmative vote on it.

Mr. Lewis

That does not help at all. The Financial Secretary has not answered the straight question which I asked. Will he listen? He has interrupted me twice and I listened to him. I will ignore him. I will not trouble him. I am saying that he has not helped at all. Will he now listen and answer my straight question? Factually this is not in dispute. We have about 1,500, give or take 200 or 300, rules and regulations which have been agreed by the Council of Ministers in Brussels. Is that correct? We are not allowed to alter or amend in any way, shape or form those 1,500 rules and regulations. Is that true or not? I will give way to the hon. Gentleman. Is it true or not? Will he answer the question?

Mr. Patrick Jenkin

With respect, we are on the Ways and Means Resolution which talks about the particular kinds of—[Interruption.] To be fair, I think it is right that we should confine our attention to matters which are in order on the Resolution. I am not trying to dodge anything. The hon. Gentleman knows perfectly well that this position has been made abundantly clear time and again. The regulations which are in force at the time when this country accedes, except in so far as they have been derogated from the terms negotiated, which have been spelt out, will be binding on this country.

Mr. Lewis

It took the Financial Secretary about 20 or 30 words to say "Yes". I am right. They are not alterable or amendable in any way, shape or form. Therefore, the short answer is yes, we cannot alter or amend them.

The reason that we cannot alter or amend the rules and regulations is simple. The Council of Ministers has already agreed them in our absence because we were not members. My right hon. Friend will probably help me if the Minister will not. Will the hon. Gentleman help me by either agreeing or disagreeing that if, as can and will be the case, we join the Six become the Ten, and all the Ten within the Council of Ministers agree to some rule or regulation, whatever it may be, with their agreeing—when I say "their" I do not mean Parliament; I mean our Minister, whoever he may be at the time—that rule and regulation becomes legally binding then, as now, as in the future, on the national parliaments of the Ten? We can debate it but we cannot amend it.

If that is the proposition, if that is what the Ways and Means Resolution means, I and every other hon. Member will have to agree with a Minister, good or bad, from the Labour side or the Conservative—but never from the Liberal Party which is always absent. The Minister will come back to report to us and will say, "There it is boys and girls. You have had it. You can say what you like and do what you like and express your opinions, but at the end of the day it is agreed—signed, sealed and settled". That is not democracy and it is not securing the wholehearted and full-hearted consent of the people in the country and Parliament. I will not accept this because I believe I am speaking for the people of this country, irrespective of their political views. They rightly believe that if they want to question a Minister they can. If they want to raise an issue, or if they want their Member of Parliament to raise an issue and, by a democratic vote, they can persuade the House of Commons to support it, they can expect the Minister to accept it or to give a good reason why he does not. Eventually the will of the House will and does prevail.

I see my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot), the future Leader of the House, is present. I have worked with him on many occasions for many years. He will agree that we carried out a wonderful exercise on the reform of the House of Lords. There, both the Government and the Opposition agreed on what they wanted to do. But the House of Commons did not want it. The Government believed that everything was signed, sealed and settled and the noble Peers thought it was in the bag. But the House of Commons did not agree and they did not get away with it.

Another instance, which I relate against my own party, concerned the matter of industrial strife. Here both sides worked together to push a proposal through. But, by debate and argument in the House and by listening to the views of our supporters in the country, we found that the people and our party did not want this proposal to be passed. Of course, it was defeated.

The point I am seeking to make is that if we now agree to this Money Resolution we will not be able to exercise our right as we did on these previous occasions. The Financial Secretary has, by his interjection confirmed, as did my right hon. Friend the Member for Stepney (Mr. Shore), that we could argue until we were blue in the face and bring forward all the problems and difficulties of our constituents but without being able to change any decision. Hon. Members here with northern constituences have the problem of depressed areas and unemployment. At the moment they can argue and discuss these matters. But the Minister will be able to return from Brussels with an agreement on such matters which is not amendable.

There are defects even on the positive side. Suppose that eventually social security benefits were harmonised and there was harmonisation in payments to old-age pensioners and the sick and disabled, as could well happen. The Minister might return from the Council of Ministers with an agreement to pay old-age pensioners an extra £1 a week. I might not want to vote against that, but I might say that the figure ought to be £2 a week because the cost of living had risen so much as a result of joining the Common Market. I might want £3 a week and I might carry the support of a majority of hon. Members from both sides. But if we wanted to propose an Amendment the Table and the Speaker would say that we could not because the agreement was not amendable. That is not democracy, and it is not giving any opportunity to the people of this country to have their wishes carried out.

The Government are against a referendum on entry into the Common Market, as is the Labour Party. But let us suppose we had a referendum or a gallup poll that old-age pensioners should be paid perhaps £3 or even £5 a week more, or perhaps should be given a 25 per cent. increase like the miners. They could be given unanimous support in the country and hon. Members could be urged by their constituents to press for such an increase. But they would be unable to do so, because a Minister, not appointed by the House of Commons or the Prime Minister, had entered into a legally-binding agreement in Brussels for an increase of £1. This is not good enough and as long as I have breath in my body and the opportunity I shall consistently oppose any of these steps that are being taken to deprive the House of Commons of its historical right to criticise, question and vote against the Executive and the Ministers who represent it.

7.9 p.m.

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

The two Resolutions which are before the House are extremely remarkable and indeed unprecedented in their character. This unprecedented character corresponds with the unprecedented constitutional change which is—by common agreement, I think—implicit in the Bill which is necessary for the ratification of our accession to the Community. The implication of the Resolutions became even clearer as we listened to the very careful and clear exposition of my hon. Friend the Financial Secretary, who certainly did not endeavour to dodge any of the meanings.

I do not think the House would be worthy of itself if it were not to address itself to the Resolutions and what they mean without attempting to ride off on the basis that these matters should have been understood or foreseen when negotiations were begun in 1961, or in 1967, or when a White Paper was published or debated at some subsequent time. The fact is that it is only now that the House is being specifically asked to divest itself of exclusive powers which it has hitherto had. We cannot say "This is a triviality, because we all understood from a previous White Paper that this would be the consequence if we were to agree to the very legislation which is now before the House".

That would be an intolerable argument in a circle. It would be the more intolerable in view of the fact that accession to the Community on these terms and with these implications was not an issue which was placed before the country at the last General Election. It is true that the public were awakening in the last year or two before the General Election to the implications of British accession, if it should ever happen. That is no doubt the reason why many hon. Members at the Election—certainly in terms of the manifesto of my party—declined to treat membership of the Community as an issue, saying simply that the sole commitment was negotiation and whatever might he implicit in an agreement, if it ever occurred, and in legislation, if it was ever presented to the House, would emerge later. What no one can argue is that these propositions were put to the electorate or that their consent was obtained for them. It is really an insult—I was going to say to the House, but, I say, to ourselves—not to recognise that we are now required to address ourselves to these propositions as they stand, without regard to anything that may have gone before.

The right hon. Member for Stepney (Mr. Shore) was quite right to do a con siderable amount of research into what might be the quantitative significance of the taxation which the Resolutions would allow to be imposed. For one of the unique characteristics of the Resolutions is that they are entirely at large. Hitherto it has been a grave matter for complaint when a Ways and Means Resolution has been placed before the House without some limitation, either implicit or stated, upon the total amount of taxation which could be raised as a result of it.

I recall, for example, when the Labour Government introduced their ill-fated Bill setting up the Land Commission, over which I for one have shed no tears of mourning. When it had received its Second Reading the House proceeded to consider the Ways and Means Resolution, and I should like to recall what was said on that occasion by my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), who I think all will agree is one of the best authorities in the House upon our financial rules and procedures. He said: …the historic Committee of Ways and Means"— we were then, of course, under the old procedure, in Committee— has to decide whether the right hon. Gentleman should be allowed to go ahead with a further proposal for the taxation of the people. This goes back for centuries; that this Committee is not prepared to grant the right hon. Gentleman such authority unless he is prepared to give to this Committee his own best calculation of what that burden is to be… My right hon. Friend was not the only right hon. Gentleman who made that point in the course of that debate. On the then Opposition Front Bench it was no other than my right hon. and learned Friend the Member for Hexham (Mr. Rippon), now Chancellor of the Duchy of Lancaster, who was in charge of our handling of the Bill. He said—and I respectfully echo what he said: We…think it quite wrong that we should be asked to make provision of this kind for taxation of the subject with no limit at all."—[OFFICIAL REPORT, 12th May, 1966; Vol 728, c. 748–50.] That, in quantitative terms—I quite understand the qualitative qualifications which my hon. Friend the Financial Secretary explained—is exactly what we are asked to do once and for all, and never return to the matter again in terms of a Ways and Means Resolution: to make provision for taxation of the subject with no limit at all. Under the forms of taxation—and they are very wide—which this Resolution authorises, there is literally no limit, in amount of time, to the future taxation which can be raised. That in itself illustrates and proves how profoundly decisive a step the House is asked to take in this legislation, a step which is clarified and illuminated by the Resolution.

That future taxation will be raised without the normal parliamentary procedures. It will be raised without any further Ways and Means Resolutions, and it will be applied and spent without any of the procedures of vote or of appropriation. So, within this scope, the taxation of the people, without limit of amount, is taken out of the control of this House, except that, naturally, the House can register its views by Motion from time to time. There can be no doubt about that; but we have not evolved an elaborate procedure, and constantly improved it over the centuries, in order to be told: "It will be just as good if you have a Motion occasionally, should there be anything you wish to raise."

The fact of these procedures having to be gone through whenever there is an increase in the burden on the subject or whenever there is new expenditure, ensures that information is given to the House in due and proper form; it also ensures that the House not merely has an opportunity to go through a certain known series of motions but is obliged to do so. That is control in a true sense, in a sense quite different from the ghost of control which is the most that is implied by the permission to have a debate from time to time about how the Community is getting on and what sort of sums are going from this country to be expended by the Community.

The Resolution is also bad in form, and the form is very relevant to the content and to the heart of the matter. I believe it is bad in form in that it wraps up in one single sentence all the forms of taxation which it authorises. The House will realise that at the time of the Finance Bill, when new taxation is being introduced and when changes in taxation are made, it is necessary that every single separate change, increase or innovation in taxation shall be authorised by a Resolution. Nothing of this sort happens here. The whole thing is wrapped up in the single expression, "any charge to taxation of those Communities."

Once again my right hon. Friend the Member for Kingston-upon-Thames comes from the past—for he is nearly noble by now—to speak in the columns of HANSARD in my support. Even with a Measure so relatively simple as the Land Commission Bill, with the betterment levies, he believed that there was little or no precedent for a Bill imposing major taxation of this kind which was not based on a Ways and Means Resolution."—[OFFICIAL REPORT. 31st January, 1966; Vol. 723, c. 837.] I have no intention in any way of challenging the Ruling which the Chair gave on the 15th of this month. Nevertheless it is a remarkable fact that this kind of elaboration, increase and alteration in taxation, when we have had it in the past, has been authorised only as a result of a series of Resolutions, each of which the House could concentrate upon and take separately. So it is incumbent upon us to unravel as best we can what lies concealed in that omnibus—I almost said "ominous "—phrase," any charge to taxation of those Communities."

On referring to the Bill we ascertain, first, that we are dealing with the customs under Clause 5, with the levies under Clause 6, and with the amounts to be raised by analogy of levies for use of the Sugar Board under Clause 7. I hope I understood my hon. Friend the Financial Secretary rightly when he said that, so far as this Bill is concerned, those are all the "charges to taxation of those Communities" which are authorised by this Resolution. On the assumption that that is so, he then went on and made a very important communication to the House. He said that if there is in future to be an addition to the forms of direct Community taxation—for example, if there is to be an addition to what will become "own resources", in the jargon of the Community—it will be necessary for the House to act under Clause 1(3).

But if one looks at Clause 1(3) one finds not a financial procedure but simply the recognition that such and such a treaty is to be one of the treaties for the purpose of the Bill. So merely by recognising the fact that a new agreement, an additional agreement, has been made in Brussels, we shall automatically and without further financial procedures—unless we have to amend an existing Finance Act, as in the case of V.A.T. because of the quality of the tax is altered—apart from that exception, we shall find that automatically an addition has been made to the burden upon the subject, and that new taxation is in force without going through any of the valves which the House has established for that purpose.

Mr. English

The right hon. Gentleman will recollect that in the part of the Bill upon which he quoted the Financial Secretary, it does not even have to be a treaty of the Communities; it can be any treaty if Her Majesty, by Order in Council, declares it shall be regarded as such under that procedure; and that is conclusive in law.

Mr. Powell

Perhaps the hon. Member could have even gone further and pointed out that under the Bill what is not a treaty can be regarded as a treaty if an Order in Council so proposes and this House passes it. Thus any sort of agreement which is treated by Order in Council as a treaty for the purpose of the Bill can, unless a qualitative alteration in our existing tax law is requisite, automatically and without further financial proceedings increase taxation.

Then there is another aspect, which in this case is separately spelt out in paragraph (b) of the Ways and Means Resolution, which is not without its importance. It is one of the historic rules of this House that a Resolution is required not only for increasing the burden upon the subject but for permitting the receipt by Ministers of the Crown of sums which have not been raised in taxation, this being one of the methods by which this House has maintained a grip upon all the finance which was at the disposal of ministers. It has not been permissible, without specific resolution, for moneys to be received except by passing through the gateway of a Resolution.

Thus, in future, the taxation will take place without the customary procedures; the expenditure will take place without those procedures; and the appropriation in aid, if I may import that phrase, will take place without those procedures. We are abrogating, for the purposes of Community taxation and Community expenditure, the entire apparatus of financial control which the House has erected and maintained.

I was glad to hear from my hon. Friend the Financial Secretary that even if the Resolution is passed in its present form, it will nevertheless be possible for the House in Committee to consider, in detail and fully, whether the procedure for payments into and out of the Consolidated Fund should not nevertheless be altered and the normal procedure reinstated. I assume that my hon. Friend made that statement upon advice and after consultation with the Chair. It is certainly a matter of satisfaction to know that we are not this evening parting with this question of fundamental importance for the last time in our study of the Bill. Instead, this is the first occasion when this question is opened and we can follow it up when we come to the Bill's Clauses. Nevertheless it would be far better that the House should mark its view at this stage rather than accept Resolutions which in themselves represent the virtual supersession of our financial procedures and controls.

In this I appeal to my right hon. and hon. Friends, whatever may be their own view as to the advantage or otherwise of this country acceding to the Community, because I believe that we have before us a House of Commons matter which can be considered, and without prejudice, even by those who differ upon the main point; for I am sure that there is none of my right hon. or hon. Friends—although he is not present, my hon. and learned Friend the Member for South Fylde (Mr. Gardner) said this specifically—who would not wish the maximum scrutiny and control by this House, the maximum opportunity for debate, to be maintained.

Therefore, I ask my right hon. and hon. Friends not to view the decision upon these Resolutions as being a yea or nay to the Community but as being the first chance we shall have together, whatever is the ultimate outcome, to improve the opportunities of the House of Commons and to retain as much as possible of the control and scrutiny of the House of Commons over taxation and expenditure.

In that connection, I follow up, briefly, some interesting remarks of my hon. Friend the Financial Secretary. My hon. Friend mentioned that our Expenditure Committee, even though payments were made not upon Votes but out of the Consolidated Fund, would nevertheless be able to address itself to those payments as if they had been payments made upon Votes of this House.

I wonder if I might follow the implications of that statement a little further. When payments are made at present, whether by statutory authority out of the Consolidated Fund or, in the overwhelming majority of cases, by Vote and appropriation, the Committees of this House, from the Expenditure Committee right through to the Public Accounts Committee, are able to be seized of every aspect of the raising and spending of that money. Nothing is withdrawn from their power of control. They have power to send for persons and papers, and the Comptroller and Auditor General exercises a jealous audit over expenditures and reports accordingly.

Hon. Members will wish to be clear whether what my hon. Friend the Financial Secretary is saying is that this House will have the same opportunities of investigating and, as it were, auditing the expenditure of the moneys which are to be raised and charged on or paid into the Consolidated Fund under these Resolutions. I am sure that, if he can confirm that, he will relieve many anxieties. However, it raises a problem. For every expenditure which is now inquired into by any of the Committees of this House, there is a responsible Minister on the Treasury Bench who can be called to account. It is because of that that all these procedures exist and have their effectiveness. I find it difficult to understand as well as to imagine how a Minister on the Front Bench can take responsibility for the "own resources" of the Community and their expenditure in the way that Ministers have to take responsibility for the expenditures which this House has authorised hitherto. I find it difficult to understand and difficult to imagine how the procedures of audit and investigation which this House has extorted from the Executive and built up over the last three centuries can be applied to the European Economic Community.

When my hon. Friend was speaking, it seemed to me that nothing less than that would really satisfy hon. Members on both sides of this House, whatever their opinions might be about the advantages or disadvantages of membership of the Community—

Mr. Marten

Before my right hon. Friend leaves that point, there is one other aspect with regard to the Expenditure Committee. I asked my hon. Friend the Financial Secretary whether the Expenditure Committee could go over to Europe, and he said "Yes". That implies that the Committee could call for persons and papers. To what extent does our writ run in foreign countries to call for papers and persons?

Mr. Jenkin

So that there is no doubt about this, I stress to my hon. Friend the Member for Banbury (Mr. Marten) that I did not say that at all. I said that it was a matter for the Chairman of the Committee and for the House to decide at the time.

Mr. Marten rose—

Mr. Deputy Speaker (Sir Robert Grant-Ferris)

Order. We must not have too many interjections, one on top of another. I think that the right hon. Member for Wolverhampton, South-West (Mr. Powell) ought to be allowed to continue his speech.

Mr. Marten

But if the Chairman of a Committee or Sub-Committee decided to do that, what power would he have to go and what power would he have to call for persons and papers? The answer is, none at all.

Mr. Powell

Perhaps I could follow up the line of thought of my hon. Friend the Member for Banbury (Mr. Marten). I have the greatest respect for the powers and responsibilities of the Chairmen of Committees of this House. But the Chairman of a Committee cannot make a Minister on the Treasury Bench responsible for a matter over which Her Majesty's Government, though they may have a voice in it, do not have control, as they have control over all the financial matters which hitherto this House has investigated and over which this House has hitherto exercised control.

I end upon that word "control". My hon. Friend the Financial Secretary used two expressions which I want to isolate. He spoke of the "theoretical control" of this House over expenditure which our existing procedures give us. He went on to say that "the reality has long since departed" from those procedures. This debate will be amply worthwhile if the House can bring home to the Government the fact that there is a profound misconception behind those statements.

True, the forms of control are not used in the same way as they were 50 or 250 years ago. But the rights of control which are crystallised and enshrined in our financial procedures are still what gives this House the means, if and when it wishes, of calling the Executive to account; and calling to account runs the whole gamut from asking for an explanation to forcing the resignation of a Minister. Hon. Members who have been in this House any length of time can recall from their experience cases from one end of that spectrum to the other.

The financial rights of this House which will have to be abrogated if Britain joins the Community and which are being prejudiced, far more than is necessary even for that purpose, by these Resolutions and this Bill are not a matter of theory or custom. They are of the essence of Ministerial responsibility to this House and of the responsibility of this House to the country. It is that fact which gives a central importance to this debate and to the votes in which the debate will end. I repeat that they are votes essentially open to all, whatever view they take of the expediency of British membership.

7.38 p.m.

Mr. Douglas Jay (Battersea, North)

The right hon. Member for Wolverhampton, South-West (Mr. Powell) said that these were remarkable Resolutions. I agree with him. They are also unprecedented and, in my view, indefensible.

The Financial Secretary made a remarkable speech. He admitted with what Mr. Stanley Baldwin once called "appalling frankness" that, whatever these Resolutions did, they would give power to the authorities of the Community to increase the whole existing range of E.E.C. taxes on the British public without any authority from or reference to this House.

As the right hon. Gentleman has just shown, that is only one part of what we shall be doing if we pass these Resolutions. Equally remarkable were the arguments that the Financial Secretary advanced for making this sweeping surrender of parliamentary aunthority. The hon. Gentleman said that, if we were to join the Community, it was necessary for us to impair and damage the authority of Parliament in this way. In my view, that is a very strong argument for not joining the Community on these terms. Then he appeared to say that the forms of financial control by this House are all very well in theory but that they have lost all substance and practical effect. He inferred from that that we should not seek to re-establish the substance and reality but we should now get rid of the forms as being merely outworn relics of what this House used to do. That seems another incredible argument for giving away some of the essential authority of this Parliament.

Thirdly, he argued that because, in his language, the Community was entitled to certain forms of finance and resources, it would be wholly inappropriate for this House to have any authority to amend or reject a proposal. In his view it is inappropriate for the House to have control over such matters. It is extraordinary that the Financial Secretary of any Government should use such arguments. I never expected to hear them used here or anywhere else.

The right hon. Member for Wolverhampton, South-West has rightly said that by this Resolution we would be abrogating the major part of the financial powers of Parliament. What he did not go on to do was to ask to whom are we surrendering these powers to tax the British people? At this point my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis), in his most eloquent and convincing speech, fell into one error. It is a point on which a number of hon. Members are not wholly clear, even though the hon. Member for Blackpool, South (Mr. Blaker) tells us that we have all understood the subject in every particular for many years. I am not sure that even he understood this point.

My hon. Friend kept referring to the Council of Ministers and to the British Minister representing us on that Council as being the authority which takes decisions in all these cases involving taxation of the British people. It is much worse than that. It is not just the Council of Ministers which issues binding regulations and decisions imposing taxation on the subject. The Commission also has the power to do that. If hon. Members look through the famous 42 volumes, on which my right hon. Friend is an expert, they will find that a large number of these regulations and decisions are imposed not by the Council at all but by the Commission.

We had another valuable admission of appalling frankness from the Solicitor-General in the Second Reading debate when he agreed that I was correct in saying that the Commission has the power to issue regulations, directives and decisions which are binding without any authority from any Ministers. It is worth emphasising that this Commission is appointed, not in any way elected. It is not responsible to the Council of Ministers or to any particular Government. This is the body with which we are dealing, as I am sure the Liberal Party was aware before making the decision it did the other night.

This Commission has the power among other things, to impose taxation on all of us. The Financial Secretary said that it does not matter very much because it involved only a narrow area. He said twice that the area was so narrow that Parliament need not bother. As I understand, it includes all the agricultural levies—that is the imposition of food taxes on the population of Great Britain, which both the Liberal and Labour Parties have resisted for the last 100 years. That is a fairly wide area!

In addition, there is the imposition of levies in the coal and steel industry. We have all learned in recent weeks that the coal industry is not exactly a narrow section of our national economy. Let us consider some of these volumes. Part 20 refers to beef and veal. The regulations are binding in their entirety and directly applicable to us all. Regulation 1025/68 of the Commission imposes levies on beef and veal. Regulation 1072/68 of the Commission fixes components for calculating the levy on certain frozen beef and veal; Regulation 642/69 of the Commission again imposes in effect taxes on the meat which our public would have to eat. I could go on for some time with that volume alone which gives details of the regulations of the Commission.

Another volume deals with cereals and Regulation 156/67 of the Commission determines the prices and levies for cereals, flour and so on. That deals with bread which I would have thought was a fairly important element in the social and economic affairs of a modern community. Regulation 2574/67 determines refunds on cereals. It goes on with a whole series of regulations dealing with export subsidies and incidentally with what they call "the de-naturing of wheat", which means making it unfit for human consumption because there is too much to be sold at the exorbitant prices charged within the Commission. I could go on with this all evening. I turn next to the volume dealing with budgetary policy. Decision No. 2650/70 of the Commission determines the rate of the levies to be applied in the financial year 1971.

That is what we would normally call taxation and it would be achieved by a Finance Bill. I could quote another 10 Resolutions of the Commission affecting levies on coal and steel. When the regulations are studied it will be seen that if we were members of the Community and we had received a report like the Wilberforce Report of last week it would, so far as I can see—and the Solicitor-General can tell me if I am wrong—have been quite impossible for the Government to accept and apply it. The levies on coal would be determined by the Commission. If the National Coal Board is not allowed to raise the price of coal and the Government are not allowed to pay a subsidy, I should like to know how the Wilberforce recommendations could have been applied.

The same is true with sugar dealt with in No. 39 of the volumes. Regulation 537/68 of the Commission determines the levies on sugar. Another, 578/69, also determines levies on sugar and molasses with the obvious effect that that will have on the price of sugar. The same is true of the taxation of tobacco and various levies and premiums relating to tobacco.

In addition to all the other criticisms, it is therefore vital to realise that what we are being asked to do on the evidence on the volumes which have been circulated and the statements made by the Financial Secretary is to hand over the powers of this House for taxing the British people and financial control over the expenditure of funds to a major extent not even to a Council of Ministers who are in some indirect sense responsible to this Parliament but to a Commission of officials who are in no way responsible to us or to the British electorate and in no real sense responsible to anyone. It seems almost incredible that any of us should wish to do this and even more incredible that we could be convinced by the arguments of the Financial Secretary this afternoon. I should be very surprised if the Government find anyone tonight sincerely voting for these Resolutions if they really understand what they mean.

7.50 p.m.

Sir Robin Turton (Thirsk and Malton)

I think the House knows my views on this matter. Perhaps I am wrong, but I think that most of the issues which have been discussed, such as those discussed by the hon. Member for West Ham, North (Mr. Arthur Lewis), can be discussed again in Committee. I want to confine myself rather to what I call procedural points in the hope that, however much we may differ about going into or not going into the Community, the Government may think over what is the best way of putting these problems to the House.

The Way and Means Resolution, as the right hon. Member for Battersea, North (Mr. Jay) said, is a complete innovation. The idea that the people of this country can be taxed and this House have no remedy at all nor any opportunity to put its view about a tax, whether it is an agricultural levy which reflects on the price of food or a Customs duty which may affect our relations with a country overseas, is quite foreign to this House. My right hon. Friends in the Government have to think how they can work this with the least breach of precedent.

The Financial Secretary said that this happens to Customs duties and agricultural levies, but he gave me an assurance that it does not happen with V.A.T. I am sure that when he gave me that assurance he thought that he was giving me a correct answer, but I should like whoever winds up the debate to check whether it is absolutely right. I appreciate that in the next Budget and the next Finance Bill we shall deal with the imposition of V.A.T. I also know that in Brussels at the moment they are proceeding towards harmonisation of V.A.T. by a certain date. Whether in 1975 or 1978, it will be the law throughout the Community so that all members of the Community who have different coverage provisions will have to alter them. I want to know whether that particular part of V.A.T. will come under what I call the automatic procedure and not the procedure by Order.

It strikes me that one of the strengths of the case made by the Financial Secretary when he was dealing with expenditure was in his answer to my hon. Friend the Member for Banbury (Mr. Marten). The Financial Secretary said that that can be dealt with by the Committee on expenditure. There is however, no Committee of this House that can deal with this taxation problem. In the 1970–71 Session the Select Committee on Procedure looked at this very great weakness in our present procedures. Very much on the strength of the evidence given by the right hon. and learned Gentleman who is at present Mr. Speaker, it recommended that there should be a Select Committee, or a select sub-committee, on taxation so that these matters could be inquired into.

I remind the Government of that recommendation. Nothing has been done about it. It seems that if we are to have this complete innovation—which is a travesty of parliamentary proceedings—and taxes are to be imposed on the subject completely automatically, the Government ought at least to consider whether that recommendation should be adopted and that there should be a Select Committee on Taxation which would always be inquiring into changes being made or suggested and which would report to the House.

Mr. Arthur Lewis

Will the right hon. Gentleman go a step further? Will he ask, should the Government agree to his suggestion to set up a committee, if under the Rome Treaty and present E.E.C. rulings, we could have such a committee?

Sir Robin Turton

The hon. Member has made a contribution to the debate. Now he has made another which I am sure that the Government will answer. I may deal with that point at the end of my observations.

On the question of expenditure I can see the point that contributions to the European Investment Bank and that type of expenditure should come under the Consolidated Fund statutory procedure, just as at the moment the Civil List, salaries of judges and interest on the National Debt do, because that is the kind of expenditure we would not normally expect to be subject to debate. In the old days in Supply debates we did not expect that kind of question to be raised. But I should have thought that the agricultural contribution was expenditure of an entirely different nature about which the House should have complete information and power by vote to control.

I was greatly encouraged by what the Financial Secretary said about how these matters could all be taken up and improved upon at a later stage. It would appear that if one were to alter the arrangement proposed in Clause 2 one could take out the agricultural contribution and have it dealt with by the time-honoured methods by which we normally authorise expenditure. My hon. Friend the Financial Secretary said that this contribution is expenditure which the Committee on Expenditure would be able to look at. The House will realise that that Committee has to examine the five-year forward look. I hope that whoever winds up the debate will inform us whether into the five-year forward look the Treasury expects to put our obligations under the E.E.C. It is very important, if the House is to have proper knowledge and control of this expenditure, that it should be put quite clearly so that the House can understand it.

On the point made by the hon. Member for West Ham, North, the weakness of the Treaty of Accession is that, unlike nearly every other member of the Six, in our treaty we did not make special provision for parliamentary proceedings. I have with me Mr. Michael Niblock's book on "National Parliaments in Community Decision-making". He says that all these countries put in special provisions for dealing with their Parliaments, particularly in Germany, where the Bundestag had a special protocol for this purpose. Germany went in for a rather fruitless attempt to control the E.E.C. by the "Council of Elders for Integration", which, unfortunately for a council of elders, had a very short life.

In his book Mr. Niblock said: Those responsible for the initiative in this matter appear to have two prime concerns in mind: first, they were anxious about the clearly adverse consequences which the process of integration was having on the system of democratic government in West Germany as in other Community countries. If anything, he is a pro-Marketeer. This is his considered opinion. The second thing he mentioned was that they sought greater co-ordination between the various actions and initiatives which were being taken in the Bundestag in relation to Community affairs. Sad to relate, the Council of Elders died a natural death.

But the Bundestag has argued and debated with and controlled the Commission on the variable cereal levies. For two years, it fought that and by its committees it stopped it. Some of the Parliaments have attacked the gross extravagance of the Agricultural Fund. Whatever view one takes—whether one is against joining or, like some of my hon. Friends, all in favour—one must demand that this Parliament should have as much control as, perhaps even greater control than, those other members of the Community.

Therefore, I beg my right hon. and learned Friend, who has as much love and respect for Parliament as I have, to take this to heart and, in the weeks before we reach that part of the Bill, think how we can ensure proper parliamentary control. It must be something rather greater than the pre-legislation committee which was thrown at us last week. Of course it is a good thing to see draft regulations, but this Chamber must have the power to try to say, "No".

As with my illustration of the ground-nuts debate, one can try to reduce a Vote because one believes that there has been mismanagement and extravagance. This is what we are here for. It is because I believe that this is not achieved by these Resolutions that I cannot support them in the Lobby tonight, although I can at least wait and see what will happen.

8.05 p.m.

Mr. Michael English (Nottingham, West)

Before coming to my Amendment, which Mr. Speaker has been kind enough to call, I cannot refrain from a comment upon the remarks of the Financial Secretary. He went into the great technicalities of the difference between the Consolidated Fund and the annual Vote and said that, because the direct procedures of the House were unsatisfactory, in his view, an Expenditure Committee system had been created.

That was one of the reasons for the creation of the Expenditure Committee, but the hon. Gentleman never mentioned that that Committee does not discuss expenditure out of the Consolidated Fund. The basic simple difference between the Consolidated Fund expenditure and the annual Vote expenditure is whether we discuss it. We do not annually discuss the Queen's expenditure, for instance.

If the hon. Gentleman is now enunciating the theory that the Expenditure Committee should discuss expenditure from the Consolidated Fund, I will be most pleased to tell my hon. Friend the Member for Fife, West (Mr. William Hamilton), who I am sure will be fascinated to realise that he has found yet another channel for discussing the Civil List. He was on the Estimates Committee and the Expenditure Committee for many years and came off only recently. I am sure he would immediately go back on once this news was given to him, and I should be glad to offer him the seat which he used to have and which I now have. But we do not discuss expenditure out of the Consolidated Fund. We do not discuss the Queen and the Civil List or the judges and their activities annually. There are things that we do not discuss and there are things that we do discuss.

We discuss education, defence, agriculture and a host of other things. No one says that we will end subsidies to agriculture, stop paying for defence or stop educating children merely because we discuss a matter annually. There is nothing anti-European in saying that we should discuss this matter annually as well.

The German Bundestag not only discusses these matters annually but requires its Government to report on them annually and, just in case the report is inaccurate, it arranges to have an observer from its upper house, the Bundesrat, present in the Council of Ministers of the E.E.C.—a right which, I am glad to note, the Chancellor of the Duchy of Lancaster felt it was not necessary to gain for Britain. He obviously thought that we should have fewer rights than the Germans.

It is primarily some matters of the law that I wish to discuss today. I must make it clear to many hon. Members who are making the assumption that they are discussing matters which will be dealt with in the usual ways of English law that they are not. It is often said that the Continental system is a Roman law system. It has been equally often said by hon. Gentlemen who are in favour of our joining the Common Market that there is very little difficulty in reconciling the Roman law systems with the English law system.

I agree, so long as one is speaking of what is called the civil law. But there is one feature of a Roman law system which is quite different: that is, in the Roman law description, a system of public law. It does not make the assumption that any person can enforce any piece of the law against any other person or the assumption, which is made in English law, that any person can enforce the law by going to court.

Let me give two examples of what can be done in English law. There is the famous case in law of Bowles v. The Bank of England early in this century when an individual said "A mere Resolutiton of the House of Commons has caused me to suffer taxation. This is illegal." He produced cases to prove that the House of Commons alone could not by such a Resolution impose taxation. As a result, Parliament had to pass an Act to allow this House to do so for a very short period of six months when we pass a Budget. Another example is that of A. P. Herbert, who prosecuted the House of Commons for a breach of the licensing laws because he wanted to prove that the House was in breach of those laws.

Any individual can do this but one cannot necessarily do it in a European State, because it is not 1,000 years of British history but 2,000 years of Roman law which includes the history of several authoritarian empires—the Roman, German and French empires and the Russian empire too, for that matter. That is exactly what has, as a result, impinged into this treaty.

We have all been deeply concerned because by these treaties and the Bill implementing them there is to be imposed upon us a system of law which, as the Solicitor-General said, is self-executing. It certainly is. Not only is it self-executing but there is a body there to execute it. The Commission is given legal personality and may impose upon any individual citizen any item of this law; but the reverse is not true and that is the difference, because we have here a system in which not all the law is enforceable by everyone. This will be extremely important.

I shall go into the details during the Committee stage but there are four reasons why proceedings may not be brought by anyone. Generally speaking, proceedings cannot be brought by individuals unless it is a matter of individual and direct concern to them. Secondly, proceedings may not be brought against anyone. One cannot, for example, bring any proceedings at all against the Assembly of the Community. Thirdly, the court of the Community does not always have jurisdiction to deal with particular types of case. Fourthly, that court finally, even if it has jurisdiction, may not always be able to enforce its decision. For example, it may decide till the cows come home that France, Germany or some other member was in breach of the law but it would have no means of enforcement in theory or in practice, unlike the Supreme Court of the United States which can enforce the law even against a State of the United States. It is, therefore, a strange and very theoretical system of law. One should bear that in mind when discussing this or any other subject.

One is literally saying that if the Community acts unlawfully, if it creates a tax which is unlawful under the organisation of the Community, it is not necessarily true that an individual can say, as Bowles once said—although a member State could—"I am sorry, you are trying to take taxation from me which is contrary to your own system of law 'There is no means by which that can be done because one would be proving that the State was acting illegally, which in English law one can do.

I beg to move, as an Amendment to the Motion, at end add: Provided that nothing in this Resolution shall authorise any charge unless it has also been approved by the Assembly of those Communities. In moving my Amendment I am afraid I wish to make a very substantial criticism of the Leader of the House. I warned him that I might be doing this. He has said he believes that this House has all the necessary documents for it to proceed to a Second Reading of the Bill next week."—[OFFICIAL REPORT, 10th February, 1972; Vol. 830, c. 1583.] That may or may not be true. It is certainly not true that the House has all the necessary documents to proceed to this Motion or the Committee stage. I will explain why.

The right hon. Member for Thirsk and Malton (Sir R. Turton) quoted from Mr. Niblock's book, "The E.E.C. National Parliaments and Community Decision-making". Many of us are forced to do so. I wish to refer to what has been the principal argument between the Council and the Assembly in the whole history of the European Communities. Nowhere has that argument been translated into English for us, yet it is highly relevant to this subject.

If in the rest of these discussions I quote from an unofficial publication, it is for the simple reason that the Assembly resolutions relevant to the topic have not been translated by the Foreign Office and made available to us. I realise the difficulties of translating all these documents and the time that would take, but the Government should have realised that that would take a long time. To quote from Mr. Niblock's book, in October, 1969, the European Commission made various proposals for budgetary procedures to deal with these very subjects with which we are dealing. The proposals were not greatly liked then by the Assembly because they largely left the Assembly of the European Community out of the problem. They said "No. Basically this is a matter for the Council of Ministers", and the Commission revised its proposal accordingly. It agreed that the Assembly should have a power such as we have.

The whole object of my Amendment is that if we are to give powers away from this House, from this elected legislative assembly, let us at least give them to another assembly of elected legislators rather than simply to a Council of Ministers, a council of members of the Executives of various States. The Council in December, 1969, agreed to give the Assembly powers from 1st January, 1975, but then excluded 95 per cent, of the total expenditure of the Community from its jurisdiction. All that the Council allowed it to do was roughly to decide its own expenditure, the expenditure as it were of its own officers—and the French disagreed even to that.

In February, 1970, the Assembly threatened to recommend to every Parliament that it should not even ratify the treaty laws and decisions which have been quoted today. The Assembly said that If the fundamental decisions defined on 10th December, 1969, were not accepted by the Council, finding itself thus unable to advise national Parliaments to ratify the proposals which are submitted to them, it would use all means at its disposal to make sure that those decisions are respected. In February, 1970, the Council of Ministers limited the Assembly. It arrived at a very complex formula. It even limited the power of the Assembly over the 5 per cent. that it had been left power to discuss and approve, and it started to compile that famous document, the Treaty of Luxembourg. From March, 1970, however, when it was still discussing it, the Council still refused to interpret what the system, by then an almost complete document, meant. The President of the Council gave an interpretation, personally as he put it, that the Council of Ministers finally decided the budget. In April, 1970, the Luxembourg Treaty was signed and in May, 1970, the Assembly arrived at a resolution which is the basis of my Amendment. The Council invited the national Parliaments that were about to ratify the Treaty of Luxembourg to take account of the attitude formulated by the European Parliament…and defend the need to guarantee real Parliamentary control over the common resources. That is precisely the point of my Amendment.

Let me say why the issue is a somewhat confusing one. Let me take Article 203 of the Treaty of Rome as amended by the Treaty of Luxembourg. I hope that the Minister who is assiduously taking notes will realise that I am not referring to the temporary procedure of Article 203a. I am aware of that but, for the sake of simplicity and the time of the House, I am talking of the permanent procedure which is due to start on 1st January, 1975.

The first paragraph of Article 203 states that the financial year is the calendar year. That is highly sensible. The second paragraph says that Each institution of the Community shall before 1st July draw up its estimates of expenditure and that the Commission shall consolidate those estimates into a preliminary draft budget and shall attach thereto an opinion which may contain different estimates. By the third paragraph the Commission is to …place the preliminary draft budget before the Council not later than 1st September.…The Council shall…establish the draft budget and forward it to the Assembly. Then we come to the fourth paragraph where the confusion begins. It says: The draft budget shall be placed before the Assembly not later than 5th October of the year preceding that in which the budget is to be implemented. The Assembly shall have the right to amend the draft budget, acting by a majority of its members, and to propose to the Council, acting by an absolute majority of the votes cast, modifications to the draft budget relating to expenditure necessarily resulting from this Treaty or from acts adopted in accordance therewith. If, within 45 days of the draft budget being placed before it…the Assembly has adopted amendments or proposed modifications, the draft budget together with the amendments or proposed modifications shall be forwarded to the Council. Hon. Members will note that for some reason there is a difference between amendments and proposed modifications. It is not entirely clear what that difference is.

The fifth paragraph is a little clearer. It states: The Council may…modify any of the amendments adopted by the Assembly and shall pronounce…on the modifications proposed by the latter. Again, there is the same distinction. Now the Council can modify amendments and pronounce upon modifications. If, within fifteen days…the Council has modified one or more of the amendments adopted by the Assembly or has not accepted the modifications proposed by the latter, the draft budget shall again be forwarded to the Assembly. The real obscurity comes in paragraph 6: Within fifteen days of the draft budget being placed before it, the Assembly, which shall have been notified of the action taken on its proposed modifications"— not its amendments, although hitherto there has been a distinction between modifications and amendments— shall act, by a majority of its members and three-fifths of the votes cast, on the modifications to its amendments made by the Council and shall adopt the budget accordingly. If within this period the Assembly has not acted the budget shall be deemed to be finally adopted. The paragraph ends by stating that when the procedure provided for has been completed, the President of the Assembly shall declare that the budget has been finally adopted.

If hon. Members find themselves a little confused by all that, I assure them that they are not unique. I assure them also that the Assembly's interpretation is that the final authority that is to adopt the budget is the Assembly. The Commission of the European Communities agrees with the Assembly. When I say that the Assembly says that, I mean the Assembly unanimously. I do not mean the Socialist group only. I mean as well the Liberal group, the Christian Democrats who might be described as the Conservative group and, finally, the most Conservative of all, the Gaullists in the Assembly. But the Council of Ministers does not agree with the Assembly, not because five of them do not but merely because one of them does not, namely, France. The Council of Ministers officially, therefore, in so far as it has made a statement through M. Harmel, who was then its President, believes it is the final authority to adopt the budget. For that reason, the Assembly recommended that parliamentarians throughout Europe should, in ratifying the Treaty of Luxembourg, make the matter clear beyond doubt.

What I am asking the Government by the Amendment is whether they agree with every party in Europe as represented in the Assembly, and five out of six members of the Community's Governments, that that is the correct interpretation, or do they agree with the French goods on a substantial scale.

It is extremely important to ascertain whether we are handing over these powers to a group of executive politicians or to a group of legislative politicians in Europe. If we are to hand over the powers, most people who are pro-European, as well as those against entry into Europe, would prefer the latter. This matter is extremely important and, in relation to the technical modification I have mentioned about the period from now to 1975, I suggest that the Government could accept my Amendment at least in principle, because that is what is believed by the overwhelming majority of Europeans in Europe as well as the overwhelming majority of pro-Europeans in this House and also by those who do not wish Britain to go into the Common Market. If we do go in, let us go in as democrats and not put ourselves into an authoritarian position.

I explained earlier in reference to the enforceability of parts of the Treaty of Rome the situation which arises from the nature of the Bill. If the Government want not merely to bind this Parliament hand and foot but also to shackle it, at least let us keep the key to the shackles and not throw it away.

8.27 p.m.

Mr. John Loveridge (Hornchurch)

The hon. Member for Nottingham, West (Mr. English) has said that in his opinion if we are to give away powers from this House or pass money out of our control we should do so to an assembly of politicians rather than to a group of executors. Few of us will quarrel with that view. Surely the immediate and present purpose for which we are here today is merely to provide the means for the funds which have been promised to be given in a regular manner. There is not any reason why in the long-term future development of Europe we may not consider a more powerful Assembly.

Mr. English

Would not the hon. Member agree that once one has got into a prison and the door is locked against one it is not easy, and that it would be better to ensure the door is not locked in the first place, if one wants to get out?

Mr. Loveridge

That may be so with a prison, but that is not what we are entering. We are entering a large, viable market which will enable us to sell our Government that it is not?

The hon. Member spoke about possible modifications in the Assembly, but the question really is, first of all, what are we doing now? It is not good enough to say that we hope we are not getting into a sort of prison. What we are doing now is necessary for the Government to meet the pledges which have been given. If we are to look far ahead into the future, it is up to us, from our experience and practice in this House, to make the efforts which we can to bring to the whole of the European business, which we are looking forward to entering upon, a more democratic procedure. Immediately, at the present time, we are newly joining a club, and surely the basis of joining a club must be trust between its members. The Europeans must see now that they will get the funds they have been promised and that they will get them in a regular manner.

The Amendment has cut across the undertakings given.

Mr. English

No. Let me make it quite clear. I will not have that. This is in no way an anti-European Amendment. I made the point that there might he a slight technical objection to the Amendment for the next two years, and I am sure that the Financial Secretary could amend that if he wished, but apart from that slight technical matter there is nothing whatsoever anti-European in the Amendment. I will not have that accusation made against me.

Mr. Loveridge

I am not trying to say that the hon. Member is not—

Mr. English

The Amendment would not stop up from going into Europe.

Mr. Loveridge

I am not attempting to state that the hon. Member is anti-European or not in favour of Europe. All I am trying to say is that this is a perfectly natural method of providing the system with finance.

The other European countries will pay their contributions, and they will pay them within two months of their falling due. The same must apply to us. We would be in great difficulties in meeting our obligation to pay within two months of our obligation falling due if the matter had to be the subject of discussion here on an annual Vote. Indeed, one begins to wonder how we could fairly say to our European colleagues, whom we are about to join, "We will think out every year what we want to pay" or "We will think out whether our subscription or the promised proportion we have offered will rise or fall". We could not do that. Of course, there may well be considerable advantages to us in this method of payment, quite apart from its enabling us to meet our obligations. The value-added tax, as we know, can greatly help our exports and thus our balance of payments.

It was about the balance of payments that the right hon. Member for Stepney (Mr. Shore) spoke with such concern. He spoke of vast sums possibly being paid across the boundaries. What sum did he arrive at in his estimate? He spoke of £470 million. Even this figure is under £10 per head of population. In what he said he ignored the great advantages to our advanced industries which are poised ready for entry on a substantial scale, on the basis of the largest stock market in Europe being available to them. That stock market can be quickly adaptable to raise money for the enterprises required to gain advantage from the vast new market we are about to enter.

The right hon. Member for Stepney went on to compare the differences of what might be paid between the countries. There was a possible deficit from Germany to the Community budget of £130 million, a possible gain to France of £310 million; Belgium was to gain £27 million and Holland £180 million. The figure of £470 million possible deficit for us—the right hon. Gentleman's own estimate—surely is not high for those advantages which our industries may obtain, and it is reasonable therefore to think that we should contribute in some way towards the resettlement of European agriculture. In the last 10 years many have left the land in Europe. In the next 10 years many more will. When that process is through it will not be a question, as the right hon. Gentleman said, of propping up their farms. The question instead will be the propping up of our regions. If this is so, the whole system of payments about which we are speaking will surely benefit Britain.

The right hon. Member for Stepney was right to say that in the past we had suffered from balance of payments problems. He went on to say that this would be particularly true in the future because the levies would affect us more than any other nation. Those levies are to be treated as customs duties for collection purposes. At first sight what the right hon. Member said may be plausible. We import a great deal of food from abroad; we always have. In the 70s and 80s of the last century it was an advantage to this country to import food cheaply, but the situation has changed. The destruction of our farms is no longer the great asset to us that it was. It was never an advantage to the farmers, but it may be said to have provided a base for industrial growth and for cheap food for the community.

What has happened to change this? Why do I say that the situation is different? It is because, by importing cheaply through decade after decade, we placed not only our agricultural enterprises but also our industrial enterprises at a severe disadvantage. For this reason the year after year of successive drain by importing foodstuffs that we could well have produced ourselves at home prevented our ever building up any kind of substantial reserve to meet temporary balance or payments difficulties caused by industrial expansion [An HON. MEMBER: "Before the war".] Yes, also before the war. Whenever our industry expanded rapidly, the Government were forced, because of balance of payments problems, to reduce imports and to cut off the benefits of that expansion. Every boom had the profitable and best head cut off it.

This situation is peculiar to Britain alone, because we import half our food. No other nation is in this situation. Therefore, we are at greater peril than any other country on account of the balance of payments, and always have been. The levies, in fact, will help us; they will help to push up home output of farming produce, and our own sales of farm machinery to Europeans will surely help also in curing any balance of payments problem there may be to come. [An HON. MEMBER: "It is a two-way traffic though."] It is a two-way traffic, but our agricultural machinery manufacturers are extraordinarily well placed. They have already exported considerably and their chance of exporting to Europe even more substantially over the next decade in order to help them reform their farms is substantial.

However, in spite of what I have said, I accept that a serious balance of payments problem may arise after we join Europe. I hope the Government will look at the possible solutions I put forward in the debate last week for curing this balance of payments problem. I spoke about the boundaries of the new European group. If Britain is not to suffer any more from adverse balance of payments problems across the borders of the exchanges within Europe itself, then there needs to be a boundary for balance of payments adjustments, for currency adjustments, round the whole territory of the new nations. I hope the Government will consider early negotiations with the Europeans in order to achieve this.

The right hon. Member for Stepney was critical about the loss of control and lack of knowledge by this House over the expenditure which we hope to agree this evening and the arrangements which are made. However, I remember not so long ago substantial debts being run up by the Labour Government of which the right hon. Gentleman was a member. Much information about those debts was kept secret between the international bankers, and not everything was brought to the attention of this House. Some of the old debts dated back to the days of our big borrowing after the war from the United States; some of them run on for as long as 50 years. We are still paying off the interest on the capital. A period of 50 years is a very long time for an obligation which does not have to come before the House in the ordinary way. That is as much of a derogation of the powers of this House as is anything which is suggested in this Resolution—which is no more than a wish to meet our proper obligations to the Europeans. I hope the Government will resist this Amendment and that this Resolution will go through in the interests of our country.

8.41 p.m.

Mr. Mark Hughes (Durham)

I listened with interest to the speech of the hon. Member for Hornchurch (Mr. Loveridge). After 15 years spent in a university trying to teach the economic history of this country over the last 70 years, I found the hon. Gentleman's exposition of the disadvantages of cheap food curious, to say the least. His argument that a continual drain on our balance of payments and our ability to build up gold reserves was the natural and inevitable consequence of importing, cheap food is without any support by any academic economist, with one exception whom the hon. Gentleman well knows. With that one exception, the hon. Gentleman is alone in that argument. The argument that it is the need to import cheap food which presents a cut-off point on the 19th century booms in the economy has little sustained evidence to back it.

Mr. Loveridge

Does not the hon. Gentleman accept that various reports have suggested that it is practicable for British farming to save up to £250 million a year on food imports, and is not that a very substantial sum if taken over a number of years?

Mr. Hughes

I do not question that for a moment. I am arguing that the hon. Gentleman's economic analysis of the past effects of cheap food is erroneous in detail and fallacious in whole. Therefore, on that basis it is a somewhat precarious activity to place much trust in the hon. Gentleman's arguments elsewhere. He suggested at one point that an obligation for 50 years was something this House did not acknowledge. I would remind him that Consols taken out in 1754 are still paid under the Consolidated Fund legislation in this House and are still controlled by it.

There are three elements in this Amendment which are fundamental to our British history and important to the future stability of society. One fundamental is that there should be no taxation without representation. It is in this light that my own sub-Amendment, which I regret has not been called, sought to provide that if we are to have within the Assembly control of the taxation of the British people, then at least that Assembly shall be directly elected. We are not allowing the taxation of British people to be in the hands, however benign, of Whips of Government and Opposition parties together to determine who shall attend the Assembly in Europe. Whatever my respect for the usual channels, this is not the usual channel to determine who my representative and the represen tative of every one of my constituents shall be in a democratic assembly. Therefore, when we ask for an assembly to vet taxation, we also must needs ask for a democratically elected European assembly.

In this we see the fundamental democratic problem between whether we are concerned with parliamentary democracy or with what is sometimes called assembly democracy, which is the division of powers between the legislature and the Executive. Alone of the members of either the current or the enlarged Community France retains a curious hybrid wherein the assembly is to a large extent the creature of the Executive. Under the proposals contained in the Money Resolution we become more than ever the creature of the Executive. In that way we move into a concept of democracy which may be democratic, but which is democratic in terms of the code Napoleon, not in terms of British common law. That is an enormous difference, as was suggested by my hon. Friend the Member for Nottingham, West (Mr. English).

This is not to be anti-European, but to recognise that there are different forms of democracy and that the Money Resolution introduces into the British form a type which is virtually unknown. When we tried to introduce this type of democracy into the American colonies in the 1760s and 1770s we brought upon our heads the American War of Independence. The American colonists went to war on precisely the sort of power of taxation which we are prepared to grant in perpetuity to the Council of Ministers of the E.E.C. without even requiring a democratic check. It is there that we press the Government, as good Europeans, to accept the need for the assembly to vet and for that assembly to be democratically elected.

It is well accepted on both sides of the House that Parliament and its institutions are at the moment held in very low esteem by many people in this country, perhaps deservedly so, because the gap between the governed and the Government, in Dunning's phrase, has increased, is increasing, and ought to be diminished. In those conditions the Government are again wantonly wishing to increase the gap yet further. However remote we in this House and the Treasury knights in Whitehall may be to the ordinary constituent, the Council of Ministers and the Commission are even more remote. They appear to my constituents and to those of many, if not all, hon. Members, to be less accountable, less responsive and less responsible to the English electorate than our present masters.

When we acknowledge that already our parliamentary institutions are in some ways breaking up under the pressures, as the Financial Secretary said earlier this afternoon the powers of control over expenditure are now vestigial by means of the Estimates and Votes on Estimates. I found that an interesting constitutional theory which has not been propounded in quite such bald terms before. However, it is precisely this divorce from what people think we are doing to what the Financial Secretary told us we are not doing which gives the feeling among the electorate of having no control. To pass the Money Resolution unamended with no attempt to provide real democratic control would be yet further to press this fear on the British electorate.

In the case of the agricultural levies under the common agricultural policy I gather from the Financial Secretary that the rôle of the Government and of the House is to act merely as agents, farmers-general to the European Commission. It is a long time since any Minister of the Crown accepted the rôle of tax-farmer on behalf of an external authority. Yet under the Money Resolution this appears to be the rôle that the Financial Secretary is undertaking, recalling the days of Caesar Augustus—all the world shall be enrolled and the Financial Secretary to the Treasury will go out and tax the people on behalf of some distant emperor. If that is what we are doing, let us be clear about it. I have some doubts. If we insert a check, a balance, to prevent it happening by making all such taxation subject to the approval of the Assembly and making such an Assembly directly, democratically elected, most of though by no means all the fears, about the lack of safeguards for the ordinary British people would be removed. The people would at least begin to feel that they were not buying not merely a pig in a poke but a pig in a poke without the means to cut the poke open.

This fear is strong, and in the Amendment we are trying to break it down. It is not an anti-European Amendment. It is pro-democracy, and pro-parliamentary institutions, whether of the French form or the British. It is an Amendment favoured by every parliamentarian and every Parliament from Oslo to Rome, except one. Are the Government so to tie themselves to the Quai d'Orsay that they will find their only ally in Paris, or will they accept the Amendment, at least in spirit if not the precise wording, and permit money to be taxed from the British people only by a democratically-elected Assembly.

8.54 p.m.

Mr. Robert Adley (Bristol, North-East)

The hon. Member for Durham (Mr. Mark Hughes) said that he thought Parliament was held in low esteem at the moment. Might not the behaviour of certain hon. Members in their relationship towards the European legislation have contributed towards this? The hon. Member will know what I mean, and I certainly do not aim these remarks at him. But on the benches opposite are people who have long held the view that they were not interested in joining the E.E.C. Yet I now look in vain for anyone who both in 1967 and in October, 1971 voted in favour of the principle of entry because all the Labour Marketeers are absent. That may be one reason why Parliament is perhaps not held in the esteem many of us would wish.

I return to the words spoken by the right hon. Member for Stepney (Mr. Shore). I do so with some temerity, for he rebuked my hon. Friend the Financial Secretary as being a new boy. Therefore, it is with the greatest diffidence that I say anything at all on the subject of the European Economic Community. The right hon. Gentleman, with many of his right hon. and hon. Friends, was hard at work this afternoon trying to re-write history. I am sorry to say these things in his absence, but what amazes me about him is his total pessimism on the entire subject of Europe. I am optimistic about the prospects for this country if we join the E.E.C. What depresses me is that the anti-Marketeers are so sure of everything being absolutely awful. I wish I could be as sure of anything as they seem to be so sure of everything in relation to the E.E.C.

Mr. Mark Hughes

Wrong quote.

Mr. Adley

I was not quoting anybody.

The analogy of warfare has been drawn once or twice in the debate. There is only one significant relationship between warfare and the Resolution and the whole question of the E.E.C. It is a relationship of difference. Warfare is generally a reaction of a country faced with a sudden situation. Entry into the E.E.C. will in its way be as significant as, if not more significant than, any war we have fought in our history. But we are doing it carefully, well-prepared and with our eyes open. I do not believe that the dismal Jimmies on the Opposition benches will he proved right.

When the time comes, all the remarks about burdens of payments made by the right hon. Member for Stepney could be seen in a different light. If we use the word "investment" instead of "burden", if we regard the monies we shall spend as an investment for the future, we are far more likely correctly to assess the effect that joining the E.E.C. will have on this country in 20 years' time.

I now turn to the Resolutions. It is my understanding of the own-resources system that it is basic to the character and political purpose of the Community. That is what differentiates the Common Market and a simple customs union. Therefore, I fail to see how anybody who has supported entry into the Community over the years can tonight vote against the Resolutions we are supposed to be discussing.

We have also heard about payments to the Consolidated Fund, as expressed in the Money Resolution, being wholly exceptional, in that the House cannot comment upon the way in which the money is spent. I do not claim to be an expert in these matters, but is not the servicing of the National Debt a function with many historic similarities which prove that what we are doing tonight is not something the House has has never done before? For instance, are not the payments we make to the Civil List or the salaries and pensions we pay to judges one of the numerous items—if one dug deeply one could find other examples—on which the Government are taking action in expenditures of money which do not require day-to-day scrutiny by the House? But even if we should be taking a step which is new, which the House has never before taken, I am bound to refer to a letter published in the Bristol Evening Post two days ago, which simply said: I have up until recently been an anti-Marketeer, but having observed the activities of the last few weeks if I am now faced with a choice between control from the E.E.C. or the T.U.C. I shall no longer be an anti-Marketeer. That is a feeling which many people in this country have gained in the last two or three weeks.

In the last 50 years we may have slowly but inevitably been losing a certain amount of control over our day-to-day activities, but I would rather have a small share in a big decision, as we are likely to have in our future in Europe, than a full share in no decision at all, which is what we are faced with otherwise as regards our future in the world.

Anyone who has even half studied what the Economic Community is all about over the years must have known that in due course, if a British Government were able satisfactorily to negotiate terms which they could present to Parliament, this would require implementing legislation. The world, our country, and this House know that we shall enter the E.E.C. That being so, we surely must give the Government the ways and means with which to implement the legislation.

9.3 p.m.

Mr. Eric Deakins (Walthamstow, West)

I hope that the hon. Member for Bristol, North-East (Mr. Adley) will forgive me, for I shall not follow his remarks. Time is pressing and we need to finish the debate in good time. But I agree with him that this is an unprecedented step. That was not an original statement, because it was a point made by a number of right hon. and hon. Gentlemen. As many hon. Members have pointed out today and last week, the fact is that Parliament's sole reason for existence is taxation against redress of grievances. We are told that we shall lose a little of our power of taxation, but only a little bit. Those were the words of the hon. Gentleman the Financial Secretary. But that was what the nursemaid said of her illegitimate baby—"It is only a little one."

Once one has started on this road of giving up taxation powers, there is no end to the powers that may be given up thereafter. In addition, we shall have no power of redress of grievances at Community level, a point about which some of us would be concerned. We are told by the Financial Secretary that we shall be able to debate these matters on Supply. That is very nice of him. I understand that Supply is mainly Opposition time and not Government time. We are told also that the Expenditure Committee will be able to look into these matters. But in both cases, to what effect, if ultimately, after all discussions, investigations and visits to Europe, this Parliament will have no power to say nay to charges on the Consolidated Fund?

We are told that a value-added tax, because of the way we shall introduce it in the Finance Bill this year, will be subject to parliamentary approval should there be any future changes required of us for the purposes of providing the own resources in the Commmunity budget? But there will be no need for the Community to suggest changes in the form of the value-added tax. All that it need do is to say that it wants a bigger rate of the value-added tax than it is currently levying. As I understand it, that would not be subject to the full approval, investigation and scrutiny of this House.

What about the control of the Community's "own resources" expenditure? We have not been told very much about that so far, but I think that we shall have to be. I see two dangers. The first is that, instead of hon. Members saying that this Parliament needs more power, there will be an increasing number of hon. Members on both sides, especially the federalists among us, who will say that we need more powers for a European Parliament. But, once one starts on that very easy slippery path towards giving more powers to a European Parliament, one creates all sorts of complications in the relationships between this Parliament and its powers and the powers of a European Parliament.

It is for that reason that I am not in favour of the Amendment tabled by my hon. Friend the Member for Nottingham, West (Mr. English) My hon. Friend has not fully thought out all the implications and consequences which would flow from a decision on the part of this House to cede its sovereignty to another legislative assembly. That could create complications in the future.

The second danger that I see lies in the process of harmonisation which the Financial Secretary tended to dismiss by saying simply, "But that is what is intended". What is the position if one Government of this country agree to a harmonisation of taxation which then, presumably, becomes binding on successive Governments? Is not that a breach of our constitutional principle which says that no Parliament can bind its successor? Surely the only alternative facing a future Government who disagreed with that harmonisation policy would be to withdraw from the E.E.C.

I said that I could see two dangers. However, there is a third. Harmonisation is a self-generating process. The more that is achieved, the more it will be desired to achieve, once the federalists in this House and in other legislative assemblies in Western Europe get the bit between their teeth. We see a process whereby more and more of the powers and sovereignty of this House are ceded to the Community, and not only in matters of indirect taxation. If it is possible to harmonise indirect taxation, as we are supposed to be doing, there is no reason why direct taxation should not be harmonised, and I believe that this will come eventually.

I believe that it behoves everyone who can see a decade or two ahead to point out these dangers now, even if at the end of the day people say that they accept them and feel that the future of this Parliament in relation to the European Parliament will be very much like the relationship between one of our present county councils and this House. If that is the view of right hon. and hon. Members opposite, they are entitled to hold it, of course. But it is not one which is shared by many hon. Members on this side of the House.

9.9 p.m.

Mr. Michael Foot (Ebbw Vale)

My hon. Friend the Member for Waltham-stow, West (Mr. Deakins), like many other hon. Members who have taken part in the debate, illustrated how essential it was that we should have this extended debate on the Ways and Means Resolution and on the Money Resolution. If it had been left to the Government to order these affairs, these debates would have taken place last Thursday evening and some of them would have been compressed into a very short space of time. However, it was thought by the Opposition that we should ask for the best part of a full day in order to discuss these matters. We believed that both the Ways and Means Resolution and the Money Resolution were unprecedented and, therefore, that we needed more time to discuss them. Everyone who has listened to the debate will agree that it is right that the House should have had more time, whatever our views may be about entry to the Community. It is necessary for the House to know what is being done and to be able to explain to the people what we are doing.

Some hon. Members have suggested that everything is clear and simple, needing no explanation. The Financial Secretary put his case very courteously and the suggestion now is that if we do not understand it we must be simple. In the debate the other day the Minister who was most emphatic in saying that everything was plainer than any pikestaff was the Secretary of State for Trade and Industry, which in a way seems to be the exception that proves the rule. I do not believe that any Minister is well advised in suggesting that the Bill is easily understandable. It has to be examined most carefully and the more we examine it the more I believe that we will discover we will have to amend and scrutinise it.

It is a pity that we have not had any assistance today from the Liberal Party. I hope that it is not contracting out of the Committee stage and the general proceedings on the Bill altogether.

Mr. Russell Johnston (Inverness)

indicated dissent.

Mr. Foot

I am glad to see the hon. Member for Inverness (Mr. Russell Johnston), who is the sole representative of the Liberal Party tonight, disagreeing, because it is deplorable that no Member from the Liberal Party has sought to participate in this debate. We are discussing something for which Liberals have fought hard—the whole question of the rights of Parliament and its taxing rights. We are discussing principles of first importance for the future of parliamentary institutions and it is remarkable that there should have been such a debate with no Member from the Liberal Party attempting to make a contribution. We will simply have to carry on without any assistance from them.

We are grateful for one statement made by the Financial Secretary which underlines what was said by the Solicitor-General during the debate on the Treaty of Accession: that the Bill is amendable in every Clause and subsection, in every particular. The whole thing is wide open for the Amendments which all hon. Members may wish to table, we are told, We are grateful for that undertaking because it was possible for people to read the Money Resolution or the Ways and Means Resolution in a way which might be considered restrictive. Indeed, there were some parts of these Resolutions which were not easily understandable unless conceivably they had that purpose. We are glad to have the hon. Gentleman's assurance that nothing of the sort is intended and that nothing of the sort can happen.

One of the things that has emerged which is of special interest in view of the differences of opinion on this subject, and which I repeat for the benefit of those who may not have heard the whole debate, is that it has been emphasised from both sides, from those in favour of entry and those against, that there are different ways of carrying out what may be the intention of the Government. That is what the Minister means when he says that we can amend every Clause. It casts some slight reflection on and requires some slight modification of what was said by the Solicitor-General. The hon. and learned Gentleman rather gave the impression when he spoke on Second Reading that the Bill was perfectly drafted and that anyone who thought he could see any improvement to be made in any part of it would be in for a very fierce parliamentary lesson. We now have it from the wiser Financial Secretary that of course no one on the Government benches is so foolish as to think that.

We have had illustrations in the debates of what I should describe as the "beyond the call of duty" Clauses or subsections. There are several portions of the Bill in which the Government have gone much further than is required even for entry. There are several parts of which it is said that other Parliaments in the Six have provisions for scrutiny over matters which are eventually to be submitted to the Council of Ministers. We do not find such provisions in this have gone much further than is required Bill. Therefore, in the set of Amendments—and there may be a large number—there are some which can appeal as much to those who wish to see us enter the Community as to those who wish us to stay out.

There is another category of Amendments by which Ministers in carrying out duties under this Measure would be called upon to take account of the expression of opinion by the Council of Ministers or the Brussels Commission. There is a category arising partly from the discussion today. It has been made clear by hon. Members in all parts of the House who are opposed to entry—the right hon. Member for Wolverhampton, South-West (Mr. Powell), for example, who has made proposals which presumably will appear in the form of Amendments in Committee—that Parliament, instead of being deprived of its powers of control in the crude, reckless and comprehensive manner stated in the Bill, could act by some different arrangements. Those arrangements from the point of view of some of us may not be satisfactory, but they would be better for the maintenance of proper control by Parliament. For any hon. Member who has missed this part of the debate, that opens up a whole special field of Amendments.

There are other Amendments which might be moved by those who wish to alter some of the terms which have been agreed. There are other Amendments which we hope would establish that Parliament will not surrender even those powers which the pro-Europeans think are absolutely essential. We can argue about these. There can be a whole variety of Amendments. I hope that none of my hon. Friends will imagine that debates in Committee will be only on Amendments moved by those who want to alter some of these provisions. There will be Amendments to mitigate the disaster. My hon. Friend the Member for Nottingham, West (Mr. English) has moved today an extremely important one. It says that we should not surrender the powers of control over taxation as proposed in the Ways and Means and Money Resolutions unless there is to be reference of those matters to a European Assembly.

The reason why I would not wish to support my hon. Friend's Amendment at this stage is that I realise it has two major drawbacks. One is that if we secured the arrangements whereby these matters had to be referred to the European Assembly, and greater powers were given to that Assembly in many respects, that would further deprive this Parliament of some of those powers. So we have to watch that aspect of the matter most carefully.

If it were finally concluded—I trust we never reach that stage—that this Bill was going to go through without any peradventure or any possibility of checking it, if we had reached that appalling and calamitous situation, it might be argued that we should see whether we could have this safety net of a democratic verdict in Europe. But we have not reached that stage yet.

Therefore, although I understand why my hon. Friend put down his Amendment, I would ask him to consider withdrawing it and reintroducing it at a later stage if the Bill proceeds and if we do not secure all the other safeguards which we hope that the other Amendments will secure.

I hope that what we do tonight will be to vote on the two propositions: first, to vote against the unprecedented Ways and Means Resolution and, secondly, to vote for the Amendment which we have put forward officially from this side on the Money Resolution, which would secure the first step in ensuring that the House retains some of the powers which the Government wish, quite unnecessarily in our view, to throw away.

The Financial Secretary talked as though the powers of taxation involved would not be considerable. He did not conceal the fact that we are surrendering some powers of taxation in these two categories—under Clause 2(1) the self-executing powers or the regulations, and also some powers with some parliamentary control remaining, although not as effective a control as the full legislative process. What we should be considering is whether that is really necessary, even from the point of view of entering the Community.

Many safeguards can be achieved. I do not think it. is an especially good one, but there is the one which the Chancellor of the Duchy of Lancaster tried to introduce on Second Reading—the ad hoc committee to examine Statutory Instruments and the processes by which we can consider what are the proposals made from the Commission to the Council and how this Parliament may be able to examine them in between.

I understand where the Minister proposes to insert his committee, but of course it will have no powers. It will merely make recommendations to the House as to how we will be able to comment. The right to comment was what the Financial Secretary called it. British parliamentary history has not been centred around this clarion call of the "right to comment". Even the parish councils, under the proposed local government reform, are complaining because they have only the right to comment. The right to comment is all that the ad hoc body would be able to recommend or the House to do.

Mr. Rippon

indicated dissent.

Mr. Foot

The right hon. and learned Gentleman keeps shaking his head about it. The point of the operation is that he wants some parliamentary surveillance, some proposition that he can present to Parliament to say that these proposals which the Council of Ministers is to consider can be looked at by the House of Commons. But again I say the right to look at it—that is not the foundation of the British Parliament.

Mr. Rippon

Does the right hon. Gentleman understand that even after the process of scrutiny, which I hope he would realise is worth while, there is always the right to vote?

Mr. Foot

A right to vote? It depends on the proposal. There will not be a right to vote on proposals going from the Commission to the Council. There will be a right to vote having no effect, that is a right to vote as a comment on what they think is the proposal being made by the Government to the Council of Ministers. The vote would not be saying, "Here, you cannot push through that piece of taxation. You cannot go forward with that imposition on the people of this country". The vote would say, "We do not like what the Council of Ministers is proposing to do, but if it does it we cannot stop it.

All these matters we will put in proper regulations and in proper amendments and we will have them debated and see how that can be done. But I hope the right hon. Gentleman will not, like some of his hon. Friends come and tell me—which is another argument which really contradicts what he says in his next breath—"We have given away so many of these powers already that we should not worry about giving away several more. We have so much trouble with Statutory Instruments as it is that it does not matter if we have a whole host more".

That is a curious argument. It is like saying that because we have an occasional hangover we might as well all become confirmed alcoholics. That is an argument which would have special appeal to the right hon. Gentleman. He ought to understand the distinction very well.

That is the kind of argument we have had from hon. Gentlemen opposite. We have had certainly, from back benchers speaking earlier, the argument that we have given away so many powers of control over various forms of taxation and various forms of international arrangement that we should not be too alarmed if we give away several more. We are alarmed because we believe the more we have seen the powers of the Executive increase the more we have seen the resort to Statutory Instruments on a scale which was never conceived to be right or desirable way back, some 10 or 15 years ago. The more we have seen that the more necessary it is that we should strengthen and sustain all the protections and shields which we have in this country and in this Parliament against the abuse of the rights of the people.

I must say I thought the hon. Gentleman the Financial Secretary fortified this case greatly by his remarks about value-added tax, even before we have had the proposal for a V.A.T. presented to the House—we have had a Green Paper, a general document, but nothing like the details—that this is a new form of tax which is to be introduced into this country. I think all my hon. Friends at the last election made their opposition clear. We sometimes talk of what people said at the last election but on V.A.T. there is no doubt about it whatever. All of us said we were opposed to this value-added tax and that we did not like the principle of it.

I understand why many of my hon. Friends think that. It is because it is in most respects a regressive tax. One might ask casually, in passing, how is it that such a regressive tax comes from what is supposed to be such a progressive institution? We are proposing in this Session to introduce an entirely new form of taxation, of a kind bitterly detested by this side of the House, a new form of direct taxation; and here in this Money Resolution, we are asked to give sanction to it. We are giving some approval to it in general form because the hon. Gentleman drew a sharp distinction in his speech between the Ways and Means Resolution which did not refer to value-added tax and the Money Resolution, which does.

The hon. Gentleman used this argument for saying that all the other matters that are dealt with by the Money Resolution should not be subject to proper votes in Parliament and to the full panoply of scrutiny, investigation and votes, which is the normal procedure. In other words, he says that the argument which he uses for saying that we should put these matters in the same category as judges' salaries and the Civil List, which are not subject to such parliamentary control, should apply also to value-added tax because, he says, there must be a flow of money from this country.

Let us get it straight what is happening to the money. It is going from this country to the coffers of Europe. At the beginning of the debate my right hon. Friend said how extensive those sums were. They are not reckoned in a few pounds, shillings and pence; they are reckoned in hundreds of millions of pounds. Value-added tax will be a big sum, but the hon. Gentleman says that we must not interfere with the flow of the money from this country to Europe because it would not be convenient for the people in Europe, or it would not be convenient for the Treasury—

Mr. Patrick Jenkin

I have not interrupted the hon. Gentleman because I know he has a lot to say, but I did not use the word "convenient". What I said was that it would not be consistent with the obligations which the country undertook when my right hon and learned Friend signed the Treaty of Accession on 22nd January.

Mr. Foot

I apologise at once to the hon. Gentleman if what I said was misleading. For one thing, he has made it very much worse. Apparently the Chancellor of the Duchy of Lancaster made an undertaking with the Community that we should apply the process of the Consolidated Fund arrangement for the value-added tax flow into Europe without the Government coming to the House of Commons and saying that the House of Commons was to be deprived of its rights of Votes on Account or straight votes on V.A.T. He should have listened to his hon. Friend, who clearly stated that it would not be consistent with providing the money in the way that had been agreed if we interfered with the flow. We have every right to interfere with the flow and the House of Commons has the right to choose which way it will vote the money.

I say to my hon. Friends on this side of the House who are pro-European—and I am as pro-European as they are—that—this is a question of how the House of Commons will contribute the money. The money can be contributed in at least two ways, either in the way the Government have laid down in the Money Resolution or in the way which is laid down in our Amendment. The House of Commons is still free to make that choice.

If we choose our Amendment, the right hon. and learned Gentleman will have to go back to Brussels to renegotiate, and he will have to do that time and time again during the Committee stage. If he does not have to do that we are confronted with a fait accompli, with a situation in which we cannot make any substantial Amendments. Of course we know that that cannot be the situation because it would expose the Solicitor-General as a man who had misled the House in the discussion on the Treaty of Accession and, even more serious, it would expose the Financial Secretary who opened the debate today.

The House is perfectly free to vote for our Amendment. It will mean that we shall have insisted on one protection for this House's surveillance of the money that is voted, one protection which the Government have given away, which they have no right to give away and which we as a House of Commons are now recovering. To recover it fully, we shall have to effect various other Amendments during our proceedings.

What we have sought to do in this debate is to make sure that the Ways and Means Resolution and the Money Resolution will not go through in a way which would deprive the House of Commons of its rights. This is simply the beginning of the struggle. We are not prepared to see the Bill go through on the basis of accepting what the occupants of the Treasury Bench have to say on these matters. All too soon in our discussions they have shown how little regard they have for the protections of this House. All too soon in our debates they have shown that they have not even provided the kind of protections which were freely available to them. All too soon in our debates they have shown that they have not even written into the Bill what is written into Acts of Parliament in some of the other countries of the Six.

Therefore, we are inspired all the more to promise the Government, but, even more importantly than the Government, the country, that we shall expose the real nature of the Bill, expose what are the rights which are being taken away from our people if we allow such a Bill to go through. We will do it all the more because we know that this Government have never had the courage to put this issue to the people, and we are determined that it is the people of this country who shall eventually decide this issue.

9.36 p.m.

The Solicitor-General (Sir Geoffrey Howe)

The hon. Member for Ebbw Vale (Mr. Michael Foot) has closed on a classic and important note, and I would not for one moment quarrel with him when he says, as has been said many times in this series of debates, and will be said again, that this is an important debate. I would quarrel with him in suggesting that the people of this country, confronted with the realities of the questions we are now considering by all three major political parties for a decade, must be regarded as wholly in ignorance of what we are about. It is simply because of the importance of the subject that our entire approach as a Parliament, as a House of Commons, as a democracy, has itself been without precedent.

The subject has been on the agenda of the nation for a decade. It was brought back firmly on to the agenda of the nation five years ago. It has been debated in this House I should say on 17 or 18 full days up to this time, and it has been the subject of a succession of White Papers and statements from successive Governments.

Mr. Russell Kerr

The facts have been known only for a year.

The Solicitor-General

I come to that point immediately. My right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) joined with the right hon. Member for Stepney (Mr. Shore) and others in saying it was not available to this Government at this point in time to say that these matters ought to have been understood. I can understand, of course, hon. Members on both sides of the House advancing that argument about the terms which have been negotiated. I can understand if they like to advance the argument about the shape of the Bill. But I cannot understand the argument advanced in this form, that we are disentitled from saying that to a large extent this matter ought to be understood, when in matters which are being argued and have been argued for a number of years it is at the heart of our debate.

Of course it is open to hon. Members, particularly the minority who have always opposed any application to join the Communities, to say, "This is something we will not buy at any price"; but to those who have entered the bidding, who supported the initial approach and throughout, and on more than one occasion, have said, "This is something which, if we get the terms right, we would like to buy on behalf of the British people", it is not entirely open, if they are to maintain intellectual consistency, to say "None of these matters has been so far understood". This is an important point one is entitled to make and it has been running right throughout these debates.

My hon. Friend the Financial Secretary to the Treasury outlined, as indeed was outlined last week, the extent to which it simply cannot be contended that the idea of taxation flowing to the Communities—to pick up a phrase which has been used—is a novel idea. It has been a part of the Community system from the initial signature of the Coal and Steel Treaty, from April, 1951, that the levies on coal and steel have themselves been part of the "own resources" of the Community organisation. Article 201 of the European Economic Community Treaty made it plain that in due course the Community would have its "own resources", in particular revenues accruing from the common customs tariff when it was introduced, and it was visualised that those resources should replace the member State contributions.

I cannot easily believe that these central concepts have wholly escaped the notice of hon. Members on either side of the House who seem to suggest that they have. From 1962 onwards it was laid down that the Market agricultural levies should belong to the Communities and we know the extent to which, from the agreement of principle in November. 1969, through to the repetition by right hon. Gentlemen opposite in February, 1970, and thereafter, the change to own resources "financing was part of the arrangement in respect of which the Labour Government were renewing the application. I do not wish to scrutinise texts with the right hon. and hon. Members opposite but the matter is beyond doubt and I simply cannot begin to understand how the right hon. Member for Stepney, along with others, can here declare his resolute opposition, as he put it, to the abominable prospect—

Mr. Stanley Orme (Salford, West)

Get back to the point.

The Solicitor-General

I am quoting directly from what the right hon. Member for Stepney said in order to answer the point. I cannot begin to understand how the right hon. Member for Stepney, having subscribed to what was published at that time and thereafter, can now declare his resolute opposition to what he describes as the abominable prospect of this change in taxing arrangements. I comment that he never answered the question put by my hon. Friend the Financial Secretary to the Treasury about the respect in which the essentials of the arrangements we are now considering are different from those that were considered at the time of the February, 1970, White Paper.

Mr. Shore

I think the essence of the difference is this. In 1967, as in earlier years in the Community until after the agreement of April, 1970, right up to that point, nothing was firm or settled in the European Community; all was a matter of transitional arrangements or, as in the case of the customs duties referred to in Article 201, dependent upon the unanimous agreement of the member countries, which had not been asked for or obtained.

The Solicitor-General

It simply will not begin to wash. The right hon. Member for Dundee, East (Mr. George Thomson) told the House on 2nd February, 1970, that the arrangement provisionally agreed presented no obstacle to a continued approach to the Communities. The right hon. Gentleman has left it singularly late to try to answer the question which was put to him. Came the decision of 21st and 22nd April, 1970, and following on that, which was precisely foreshadowed in the often cited paragraphs of the February, 1970, White Paper, the right hon. Gentleman's Government, the Government of which he was a member, indicated its intention to renew the application. It is on that foundation, in respect of that Community organised as it then was, that these negotiations have proceeded.

Mr. Shore

All that happened was that the Government agreed to negotiate, as did the present Government, but not with any disposition to accept any particular arrangement which had not been negotiated or considered by the Labour Government.

The Solicitor-General

Of course not, but the then Government agreed to negotiate—and the right hon. Gentleman knows this perfectly well—in respect of the institutions established by the 1967 Treaty and, indeed, by the agreement of 1970. That was the matter in respect of which the Labour Government made their bid, and there is no room for argument about the essential nature of it.

Mr. English rose—

The Solicitor-General

No, not now. I do not underrate the importance of many questions raised on particular points by right hon. and hon. Members on both sides of the House. The right hon. Member for Battersea, North (Mr. Jay) referred to one of the Commission regulations in respect of the fixing of levies on meat. It is right to say that regulations and directives emitting from the Commission are made only in the context of previous policy decisions by the Council of Ministers. For example, the Council of Ministers fixes the target price or fixed price in respect of the commodities to which the right hon. Gentleman refers. All that the Commission is doing is issuing regulations or directives by determining the level of levy to achieve a price in respect of which negotiations have been taking place in the Council of Ministers.

Mr. Jay

But the Solicitor-General will not deny that the Commission on its own has the power to increase the rate of levy—that is to say, to impose additional taxation without any reference to the Council of Ministers, let alone to this House.

The Solicitor-General

It does so in pursuit of policy agreements already arrived at by the Council of Ministers and it implements those in the same way as many agencies implement international agreements in this country and elsewhere by reference to foundations already agreed. It does not go to the heart of the matter. There are better points for the hon. Gentleman to make than that.

Mr. Jay rose—

The Solicitor-General

I am sorry, I cannot give way again.

I should like to turn to a different point raised by a number of hon. Members, including my right hon. Friend the Member for Thirsk and Malton (Sir Robin Turton). It would be wrong for anybody to assume that the levy of value-added tax on this country would not be subject to the full panoply of parliamentary discussion and debate. There is no question of Parliament imposing V.A.T. by these Ways and Means Resolution proposals, because that will he put forward in the Finance Bill. The E.E.C. countries are thereby committed only to the introduction of a value-added tax. They have not agreed on the harmonisation of rates and the coverage. That will be done only by means of directives in respect of which unanimity will be required. It means that in coming to the House of Commons Her Majesty's Government would have to take the steps by their own legislation if any changes were needed to enable V.A.T. to be introduced, or the shape of it to be varied to comply with a Community directive thereafter.

Mr. Michael Foot rose—

The Solicitor-General

No; I have very little time left and I want to try to deal with other points.

I come to the more central point which relates to the extent and nature of the changes effected in parliamentary control. My hon. Friend the Financial Secretary to the Treasury explained the three different natures of the funds with which we are here dealing. They are first put all in one package—those in the nature of loans, which my right hon. Friend the Member for Thirsk and Malton recognised were appropriate for handling through the Consolidated Fund or National Loans Fund. That is the first category. The second category is described as "own resources "—namely, at this stage the customs duties and agricultural levies—and at a later stage, when and if that point arrives, the percentage of V.A.T. when that has been harmonised.

The case for "own resources" contributions going on the Consolidated Fund procedure is very strong. It is of the essence of the organisation that this is money for the Communities to handle on behalf of the Communities in accordance with previously taken decisions. My hon. Friend the Member for Bristol, North-East (Mr. Adley) explained that this had always been foreshadowed. He explained that it emphasises the important aspect of the character of the Communities as something more than customs union which underpins their cohesion and minimises the risk of defaults which other international organisations face.

The final element is that which is necessary until any change is made in respect of V.A.T., namely, the member States' contribution. I readily acknowledge, as did the hon. Member for Ebbw Vale, the wisdom of my hon. Friend the Financial Secretary to the Treasury; but I will not acknowledge that there was any inconsistency between what he said and what I say. We have both said that the form of these Resolutions permits, and will permit hereafter, the widest possible debate about the legislative structure which gives effect to the intention of joining the Communities which is not restrictive on them in any way.

The right hon. Member for Battersea, North suggested that in discussing the reality and theory of parliamentary control, my hon. Friend was suggesting that the theory does not work exactly as described and therefore it is unimportant. The way in which he was presenting it was that the description of the theory does not in detail always equal the reality of practice. But neither he nor I, nor any member of the Government, would begin to quarrel with the proposition that it is important that the influence and control of this House should be maintained as effectively as it can be in the particular circumstances of what we are now engaged upon.

My right hon. Friend the Member for Wolverhampton, South-West said that the whole gamut of parliamentary control ranged from Questions, on the one hand, to the threat of withdrawal of support, on the other. In this context, as in any other, that is the ultimate reality. It is that range of sanctions which will ultimately be available in respect of parliamentary control.

It is possible—this is not the occasion—to visualise a rôle for the European Assembly. I do not wish to embark on that discussion now. It is more important at this point to consider the ways in which the influence of our Parliament and of this House should be brought to bear in this changed situation. My right hon. and learned Friend's ad hoc Committee is one of the instruments to consider this matter. The parliamentary Question, which will cover the entire range of Ministerial responsibility, will be another. The Expenditure Committee, to which a number of right hon. and hon. Members have referred, will also maintain a rôle in respect of these payments. These payments are part of public expenditure. In answer to my right hon. Friend who asked about the extent to which they were included in the five-year review, they are already included in last November's White Paper, Command 4829, as part of the forthcoming expenditure in the next four to five years. The Expenditure Committee can consider them in that context in the same way as any other expenditure there set out.

The Expenditure Committee can consider the policy underlying the Estimates. It can examine Ministers as well as officials in respect of the policy and handling of the resources referred to there. It would be perfectly open for the Expenditure Committee to do that. After all, it does so already in relation to expenditure on aid to developing countries and contributions to international organisations. The Minister concerned remains responsible to Parliament for all the payments out of the Exchequer. The Minister responsible could be questioned about any action and the Committee could report in the perfectly ordinary way. The rôle of the Public Accounts Committee could also remain, because the Comptroller and Auditor General audits the Consolidated Fund accounts each year and issues a report on them. If he had occasion to issue a substantial report he would do so, and the P.A.C. would consider that in the normal way.

I have two final points: the nature of this debate and the context of the series of debates. We are not tonight saying, as has been suggested yet again, yea or nay to Europe. Still less are we saying yea or nay to loss of parliamentary control. We are deciding tonight the question of yea or nay to a wide, unrestricted debate on the Clauses which form the substance of the Bill to which the House has already given a Second Reading. In that context we can consider all the suggestions from both sides about how the House should handle the matter.

It is worth reminding ourselves, in the context of the important points made by the hon. Member for Ebbw Vale, exactly what parliamentary sovereignty and the nature of our procedures are meant to be about. They are meant to represent a means of expressing the control through Parliament, on behalf of the people, of the Executive and of the way in which decisions by Parliament and the Executive affect the conditions of life of our people. I find it difficult always to accept without some demur complaints from the Opposition, even from the hon. Member for Ebbw Vale, about extensions of the power of the Executive, because they have not been conspicuously concerned to prevent them in the past.

The essential point about parliamentary control is that if there is one constant thing about the way in which the House has conducted its business it is its infinite capacity for change. Over the centuries, through a series of different situations, as the rôle of Parliament in relation to the Crown has altered, as the colonies turned into the Commonwealth, as the Commonwealth went through the period symbolised by the Ottawa Agreement, all these changes were accompanied by real and substantial changes in the rôle of the House in fulfilling its tradition and functions. Sometimes the forms have remained the same and sometimes they have changed. But it is the substance which the House should be determined to preserve, and the Government believe that the substance of parliamentary control in this new situa

tion could be preserved. In the context of our accession to the European Community it should be our purpose to see that it can be preserved. It is one on which the Government is resolved and one on which I invite the House to support the Government in their approach to the matter tonight.

Mr. English

Before the hon. and learned Gentleman sits down, will he make plain whether he is accepting or rejecting the Amendment to which he was technically speaking?

The Solicitor-General

I invite the House to reject the Amendment.

Amendment negatived.

Main Question put:

The House divided: Ayes 306, Noes 276.

Division No. 62.]	AYES	[9.58 p.m.
Adley, Robert	Clegg, Walter	Gorst, John
Alison, Michael (Barkston Ash)	Cockeram, Eric	Gower, Raymond
Allason, James (Hemel Hempstead)	Cooke, Robert	Grant, Anthony (Harrow, C.)
Amery, Rt. Hn. Julian	Coombs, Derek	Gray, Hamish
Archer, Jeffrey (Louth)	Cooper, A. E.	Green, Alan
Astor, John	Cordle, John	Grieve, Percy
Atkins, Humphrey	Corfield, Rt. Hn. Frederick	Griffiths, Eldon (Bury St. Edmunds)
Awdry, Daniel	Cormack, Patrick	Grimond, Rt. Hn. J.
Baker, Kenneth (St. Marylebone)	Costain, A. P.	Grylls, Michael
Baker, W. H. K. (Banff)	Critchley, Julian	Gummer, Selwyn
Balniel, Rt. Hn. Lord	Crouch, David	Hall, Miss Joan (Keighley)
Barber, Rt. Hn. Anthony	Crowder, F. P.	Hall, John (Wycombe)
Batsford, Brian	Curran, Charles	Hall-Davis, A. G. F.
Beamish, Col. Sir Tufton	Dalkeith, Earl of	Hamilton, Michael (Salisbury)
Bell, Ronald	Davies, Rt. Hn. John (Knutsford)	Hannam, John (Exeter)
Bennett, Sir Frederic (Torquay)	d' Avigdor-Goldsmid, Sir Henry	Harrison, Brian (Maldon)
Bennett, Dr. Reginald (Gosport)	d' Avigdor-Goldsmid, Maj.-Gen. James	Harrison, Col. Sir Harwood (Eye)
Benyon, W.	Dean, Paul	Haselhurst, Alan
Berry, Hn. Anthony	Deedes, Rt. Hn. W. F.	Hastings, Stephen
Biggs-Davison, John	Digby, Simon Wingfield	Havers, Michael
Blaker, Peter	Dixon, Piers	Hawkins, Paul
Boardman, Tom (Leicetter, S.W.)	Dodds-Parker, Douglas	Hay, John
Boscawen, Robert	Douglas-Home, Rt. Hn. Sir Alec	Hayhoe, Barney
Bossom, Sir Clive	Drayson, G. B.	Heath, Rt. Hn. Edward
Bowden, Andrew	du Cann, Rt. Hn. Edward	Heseltine, Michael
Boyd-Carpenter, Rt. Hn. John	Dykes, Hugh	Hicks, Robert
Braine Sir Bernard	Eden, Sir John	Higgins, Terence L.
Bray, Ronald	Edwards, Nicholas (Pembroke)	Hiley, Joseph
Brewis, John	Elliott, Capt. Walter (Carshalton)	Hill, John E. B. (Norfolk, S.)
Brinton, Sir Tatton	Elliott, R. W. (Nc'tle-upon-Tyne, N.)	Hill, James (Southampton, Test)
Brocklebank-Fowler, Christopher	Emery, Peter	Holland, Philip
Brown, Sir Edward (Bath)	Fenner, Mrs. Peggy	Holt, Miss Mary
Bruce-Gardyne, J.	Fidler, Michael	Hordern, Peter
Bryan, Paul	Finsberg, Geoffrey (Hampstead)	Hornby, Richard
Buchanan-Smith, Alick (Angus, N & M)	Fisher, Nigel (Surbiton)	Hornsby-Smith, Rt. Hn. Dame Patricia
Buck, Antony	Fletcher-Cooke, Charles	Howe, Hn. Sir Geoffrey (Reigate)
Burden, F. A.	Fookes, Miss Janet	Howell, David (Guildford)
Butler, Adam (Bosworth)	Fortescue, Tim	Howell, Ralph (Norfolk, N.)
Campbell, Rt. Hn. G. (Moray & Nairn)	Foster, Sir John	Hunt, John
Carlisle, Mark	Fowler, Norman	Iremonger, T. L.
	Fox, Marcus	Irvine, Bryant Godman (Rye)
Carr, Rt. Hn. Robert	Fry, Peter	James, David
Cary, Sir Robert	Galbraith, Hn. T. G.	Jenkin, Patrick (Woodford)
Channon, Paul	Gardner, Edward	Jessel, Toby
Chapman, Sydney	Gibson-Watt, David	Johnson Smith, G. (E. Grinstead)
Chataway, Rt. Hn. Christopher	Gilmour, Ian (Norfolk. C.)	Johnston, Russell (Inverness)
Chichester-Clark, R.	Gilmour, Sir John (Fife, E.)	Jones, Arthur (Northants, S.)
Churchill, W. S.	Glyn, Dr. Alan	Jopling, Michael
Clark, William (Surrey, E.)	Goodhart, Philip	Joseph, Rt. Hn. Sir Keith
Clarke, Kenneth (Rushcliffe)	Goodhew, Victor	Kaberry, Sir Donald
Kellett-Bowman, Mrs. Elaine	Neave, Airey	Speed, Keith
Kershaw, Anthony	Nicholls Sir Harmar	Spence, John
Kimball, Marcus	Noble, Rt. Hn. Michael	Sproat, Iain
King, Evelyn (Dorset, S.)	Normanton, Tom	Stainton, Keith
King, Tom (Bridgwater)	Nott, John	Stanbrook, Ivor
Kinsey, J. R.	Onslow, Cranley	Steel, David
Kirk, Peter	Oppenheim, Mrs. Sally	Stewart-Smith, Geoffrey (Belper)
Kitson, Timothy	Orr, Capt. L. P. S.	Stodart, Anthony (Edinburgh, W.)
Knight, Mrs. Jill	Osborn, John	Stoddart-Scott, Col. Sir M.
Knox, David	Owen, Idris (Stockport, N.)	Stokes, John
Lambton, Lord	Page, Graham (Crosby)	Stuttaford, Dr. Tom
Lane, David	Page, John (Harrow, W.)	Tapsell, Peter
Langford-Holt, Sir John	Pardoe, John	Taylor, Sir Charles (Eastbourne)
Legge-Bourke, Sir Harry	Parkinson, Cecil	Taylor, Frank (Moss Side)
Le Marchant, Spencer	Percival, Ian	Taylor, Robert (Croydon, N.W.)
Lewis, Kenneth (Rutland)	Peyton, Rt. Hn. John	Tebbit, Norman
Lloyd, Rt. Hn. Geoffrey (Sut 'nC' dfield)	Pike, Miss Mervyn	Temple, John M.
Longden, Sir Gilbert	Pink, R. Bonner	Thatcher, Rt. Hn. Mrs. Margaret
Loveridge, John	Pounder, Rafton	Thomas, John Stradling (Monmouth)
Luce, R. N.	Price, David (Eastleigh)	Thomas, Rt. Hn. Peter (Hendon, S.)
McAdden, Sir Stephen	Prior, Rt. Hn. J. M. L.	Thompson, Sir Richard (Croydon, S.)
MacArthur, Ian	Proudfoot, Wilfred	Thorpe, Rt. Hn. Jeremy
McCrindle, R. A.	Pym, Rt. Hn. Francis	Tilney, John
McLaren, Martin	Quennell, Miss J. M.	Trafford, Dr. Anthony
Maclean, Sir Fitzroy	Raison, Timothy	Trew, Peter
McMaster, Stanley	Ramsden, Rt. Hn. James	Tugendhat, Christopher
Macmillan, Rt. Hn. Maurice (Farnham)	Rawlinson, Rt. Hn. Sir Peter	van Straubenzee, W. R.
McNair-Wilson, Michael	Redmond, Robert	Vaughan, Dr. Gerard
McNair-Wilson, Patrick (NewForest)	Reed, Laurance (Bolton, E.)	Vickers, Dame Joan
Maddan, Martin	Rees, Peter (Dover)	Waddington, David
Madel, David	Rees-Davies, W. R.	Walder, David (Clitheroe)
Marples, Rt. Hn. Ernest	Ronton, Rt. Hn. Sir David	Walker, Rt. Hn. Peter (Worcester)
Mather, Carol	Rhys Williams, Sir Brandon	Wall, Patrick
Maude, Angus	Ridley, Hn. Nicholas	Walters, Dennis
Maudling, Rt. Hn. Reginald	Ridsdale, Julian	Ward, Dame Irene
Mawby, Ray	Rippon, Rt. Hn. Geoffrey	Warren, Kenneth
Maxwell-Hyslop, R. J.	Roberts, Michael (Cardiff, N.)	Wells, John (Maidstone)
Meyer, Sir Anthony	Roberts, Wyn (Conway)	White, Roger (Gravesend)
Mills, Peter (Torrington)	Rodgers, Sir John (Sevenoaks)	Whitelaw, Rt. Hn. William
Mills, Stratton (Belfast, N.)	Rossi, Hugh (Hornsey)	Wiggin, Jerry
Miscampbell, Norman	Rost, Peter	Wilkinson, John
Mitchell, Lt.-Col. C.(Aberdeenshire, W)	Royle, Anthony	Winterton, Nicholas
Mitchell, David (Basingstoke)	St. John-Stevas, Norman	Wolrige-Gordon, Patrick
Money, Ernie	Sandys, Rt. Hn. D.	Wood, Rt. Hn. Richard
Monks, Mrs. Connie	Scott, Nicholas	Woodhouse, Hn. Christopher
Monro, Hector	Scott-Hopkins, James	Woodnutt, Mark
Montgomery, Fergus	Sharples, Richard	Worsley, Marcus
More, Jasper	Shaw, Michael (Sc'm'gh & Whitby)	Wylie, Rt. Hn. N. R.
Morgan, Geraint (Denbigh)	Shelton, William (Clapham)	Younger, Hn. George
Morgan-Giles, Rear-Adm.	Simeons, Charles
Morrison, Charles	Sinclair, Sir George	TELLERS FOR THE AYES:
Mudd, David	Skeet, T. H. H.	Mr. Reginald Eyre and
Murton, Oscar	Smith, Dudley (W'wick & L'mington)	Mr. Bernard Weatherill.
Nabarro, Sir Gerald	Soref, Harold
NOES
Abse, Leo	Buchan, Norman	Davies, Denzil (Llanelly)
Allaun, Frank (Salford, E.)	Buchanan, Richard (G'gow, Sp'burn)	Davies, Ifor (Gower)
Allen, Scholefield	Butler, Mrs. Joyce (Wood Green)	Davies, S. O. (Merthyr Tydvil)
Archer, Peter (Rowley Regis)	Callaghan, Rt. Hn. James	Davis, Clinton (Hackney, C.)
Ashley, Jack	Campbell, I. (Dunbartonshire, W.)	Davis, Terry (Bromsgrove)
Ashton, Joe	Cant, R. B.	Deakins, Eric
Atkinson, Norman	Carmichael, Neil	de Freitas, Rt. Hn. Sir Geoffrey
Bagier, Gordon A. T.	Carter, Ray (Birmingh'm, Northfield)	Delargy, H. J.
Barnett, Guy (Greenwich)	Carter-Jones, Lewis (Eccles)	Dell, Rt. Hn. Edmund
Barnett, Joel (Heywood and Royton)	Castle, Rt. Hn. Barbara	Dempsey, James
Baxter, William	Clark, David (Colne Valley)	Doig, Peter
Benn, Rt. Hn. Anthony Wedgwood	Cocks, Michael (Bristol, S.)	Dormand, J. D.
Bennett, James (Glasgow, Bridgeton)	Cohen, Stanley	Douglas, Dick (Stirlingshire, E.)
Bidwell, Sydney	Coleman, Donald	Douglas-Mann, Bruce
Bishop, E. S.	Concannon, J. D.	Driberg, Tom
Blenkinsop, Arthur	Conlan, Bernard	Duffy, A. E. P.
Boardman, H. (Leigh)	Cox, Thomas (Wandsworth, C.)	Dunn, James A.
Body, Richard	Crawshaw, Richard	Eadie, Alex
Booth, Albert	Cronin, John	Edelman, Maurice
Bottomley, Rt. Hn. Arthur	Crosland, Rt. Hn. Anthony	Edwards, Robert (Bilston)
Bradley, Tom	Cunningham, G. (Islington, S.W.)	Edwards, William (Merioneth)
Broughton, Sir Alfred	Cunningham, Dr. J. A. (Whitehaven)	Ellis, Tom
Brown, Bob (N'c'tle-upon-Tyne.W.)	Dalyell, Tam	English, Michael
Brown, Hugh D. (G'gow, Provan)	Darling, Rt. Hn. George	Evans, Fred
Brown, Ronald (Shoreditch & F'bury)	Davidson, Arthur	Ewing, Henry
		Faulds, Andrew
Fernyhough, Rt. Hn. E.	Lestor, Miss Joan	Price, William (Rugby)
Fisher, Mrs. Doris (B'ham, Ladywood)	Lever, Rt. Hn. Harold	Probert, Arthur
Fitch, Alan (Wigan)	Lewis, Arthur (W. Ham, N.)	Rankin, John
Fletcher, Raymond (Ilkeston)	Lewis, Ron (Carlisle)	Reed, D. (Sedgefield)
Fletcher, Ted (Darlington)	Lipton, Marcus	Rees, Merlyn (Leeds, S.)
Foley, Maurice	Lomas, Kenneth	Rhodes, Geoffrey
Foot, Michael	Loughlin, Charles	Richard, Ivor
Ford, Ben	Lyon, Alexander W. (York)	Roberts, Albert (Normanton)
Forrester, John	Lyons, Edward (Bradford, E.)	Roberts, Rt. Hn. Goronwy (Caernarvon)
Fraser, John (Norwood)	McBride, Neil	Robertson, John (Paisley)
Freeson, Reginald	McCann, John	Roderick, Caerwyn E.(Br'c'n & R'dnor)
Galpern, Sir Myer	McCartney, Hugh	Roper, John
Garrett, W. E.	McElhone, Frank	Rose, Paul B.
Gilbert, Dr. John	McGuire, Michael	Ross, Rt. Hn. William (Kilmarnock)
Ginsburg, David (Dewsbury)	Mackenzie, Gregor	Sandelson, Neville
Golding, John	Mackie, John	Sheldon, Robert (Ashton-under-Lyne)
Gordon Walker, Rt. Hn. P. C.	Mackintosh, John P.	Shore, Rt. Hn. Peter (Stepney)
Gourlay, Harry	Maclennan, Robert	Short, Rt. Hn. Edward (N'ctle-u-Tyne)
Grant, George (Morpeth)	McMillan, Tom (Glasgow, C.)	Short, Mrs. Renée (W'hampton.N.E.)
Grant, John D. (Islington, E.)	McNamara, J. Kevin	Silkin, Rt. Hn. John (Deptford)
Griffiths, Eddie (Brightside)	Mahon, Simon (Bootle)	Silkin, Hn. S. C. (Dulwich)
Griffiths, Will (Exchange)	Mallalieu, J. P. W. (Huddersfield, E.)	Sillars, James
Hamilton, James (Bothwell)	Marks, Kenneth	Silverman, Julius
Hamilton, William (Fife, W.)	Marquand, David	Skinner, Dennis
Hamling, William	Marsden, F.	Small, William
Hannan, William (G'gow, Maryhill)	Marshall, Dr. Edmund	Smith, John (Lanarkshire, N.)
Hardy, Peter	Mason, Rt. Hn. Roy	Spearing, Nigel
Harrison, Walter (Wakefield)	Meacher, Michael	Spriggs, Leslie
Hart, Rt. Hn. Judith	Mellish, Rt. Hn. Robert	Stallard, A. W.
Hattersley, Roy	Mendelson, John	Stewart, Donald (Western Isles)
Healey, Rt. Hn. Denis	Mikardo, Ian	Stewart, Rt. Hn. Michael (Fulham)
Heffer, Eric S.	Millan, Bruce	Stoddart, David (Swindon)
Hilton, W. S.	Miller, Dr. M. S.	Storehouse, Rt. Hn. John
Hooson, Emlyn	Milne, Edward	Strang, Gavin
Horam, John	Mitchell, R. C. (S'hampton, lichen)	Summerskill, Hn. Dr. Shirley
Houghton, Rt. Hn. Douglas	Molloy, William	Swain, Thomas
Howell, Denis (Small Heath)	Morgan, Elystan (Cardiganshire)	Taverne, Dick
Huckfield, Leslie	Morris, Alfred (Wythenshawe)	Thomas, Rt. Hn. George (Cardiff, W.)
Hughes, Rt. Hn. Cledwyn (Anglesey)	Morris, Charles R. (Openshaw)	Thomas, Jeffrey (Abertillery)
Hughes, Mark (Durham)	Morris, Rt. Hn. John (Aberavon)	Thomson, Rt. Hn. G. (Dundee, E.)
Hughes, Robert (Aberdeen, N.)	Moyle, Roland	Tinn, James
Hughes, Roy (Newport)	Mulley, Rt. Hn. Frederick	Tomney, Frank
Hunter, Adam	Murray, Ronald King	Torney, Tom
Irvine, Rt. Hn. Sir Arthur (Edge Hill)	Oakes, Gordon	Tuck, Raphael
Janner, Greville	Ogden, Eric	Urwin, T. W.
Jay, Rt. Hn. Douglas	O' Halloran, Michael	Varley, Eric G.
Jeger, Mrs. Lena	O'Malley, Brian	Wainwright, Edwin
Jenkins, Hugh (Putney)	Oram, Bert	Walden, Brian (B'm'ham, All Saints)
Jenkins, Rt. Hn. Roy (Stechford)	Orbach, Maurice	Walker, Harold (Doncaster)
Jennings, J. C. (Burton)	Orme, Stanley	Wallace, George
John, Brynmor	Oswald, Thomas	Watkins, David
Johnson, James (K'ston-on-Hull, W.)	Owen, Dr. David (Plymouth, Sutton)	Weitzman, David
Johnson, Walter (Derby, S.)	Padley, Walter	Wellbeloved, James
Jones, Barry (Flint, E.)	Paget, R. T.	White, James (Glasgow, Pollok)
Jones, Dan (Burnley)	Paisley, Rev. Ian	Whitehead, Phillip
Jones, Rt. Hn. Sir Elwyn (W.Ham, S.)	Palmer, Arthur	Willey, Rt. Hn. Frederick
Jones, Gwynoro (Carmarthen)	Pannell, Rt. Hn. Charles	Williams, Alan (Swansea, W.)
Jones, T. Alec (Rhondda, W.)	Parker, John (Dagenham)	Williams, Mrs. Shirley (Hitchin)
Judd, Frank	Parry, Robert (Liverpool, Exchange)	Williams, W. T. (Warrington)
Kaufman, Gerald	Pavitt, Laurie
Kelley, Richard	Peart, Rt. Hn. Fred	Wilson, Alexander (Hamilton)
Kerr, Russell	Pendry, Tom	Wilson, Rt. Hn. Harold (Huyton)
Kinnock, Neil	Pentland, Norman	Wilson, William (Coventry, S.)
Lambie, David		Woof, Robert
Lamond, James	Perry, Ernest G.
Latham, Arthur	Powell, Rt. Hn. J. Enoch	TELLERS FOR THE NOES:
Leadbitter, Ted	Prentice, Rt. Hn. Reg.	Mr. Ernest Armstrong and
Lee, Rt. Hn. Frederick	Prescott, John	Mr. Joseph Harper.
Leonard, Dick	Price, J. T. (Westhoughton)

Question accordingly agreed to.

Resolved,

That any Act of the present Session to make provision in connection with the enlargement of the European Communities to include the United Kingdom, together with (for certain purposes) the Channel Islands, the Isle of Man and Gibraltar, may include provision—

1. (a) for giving effect to any charge to taxation of those Communities, and for the imposition and alteration of customs duties by order of the Treasury;
2. (b) for the payment into the Consolidated Fund or National Loans Fund of sums received by any Minister of the Crown or government department.