HC Deb 18 July 1972 vol 841 cc395-402
Mr. Benn

(by Private Notice) asked the Secretary of State for Trade and Industry whether, in the light of the representation of the West German Government, he will make a statement on the assurances he has received from the Brussels Com- mission that the regional policies of Her Majesty's Government embodied in legislation now before Parliament are acceptable to the Commission.

The Minister for Industrial Development (Mr. Christopher Chataway)

We have been in close touch with the development of Community regional policy and thinking over a considerable period of time. As a result, we have no reason to believe that there is any conflict between our new regional measures and the obligations of membership of the Community, a belief borne out by the fact that our new measures have been public knowledge for four months without attracting criticism from the Commission or any member State.

As I understand recent developments, the German Government has asked for information from the Commission about three aspects of our new policies; free depreciation for plant and machinery, depreciation allowance for industrial buildings, and regional development grants. I further understand that the Commission has already told the German Government that the depreciation provisions in the Finance Bill are not regarded by it as regional measures and are, therefore, irrelevant to Article 92 of the Treaty of Rome. The position on regional development grants turns on the discussions still to be held under Article 154 of the Treaty of Accession. Again, we are quite confident that a perfectly satisfactory outcome will emerge from these discussions.

Mr. Benn

That answer is completely unsatisfactory. Can the right hon. Gentleman explain why the German memorandum, which was sent in on 11th July, was not revealed to the House on the Third Reading of the European Communities Bill, which took place two days later? Is it not clear that the assurance which the right hon. Gentleman has given and the assurances given by the Secretary of State on Second Reading of the Industry Bill and by the Chancellor of the Duchy of Lancaster on the European Communties Bill are entirely valueless in that the decision in this matter does not rest with the Government but, under Articles 92 and 93 of the Treaty, any State may appeal to the Commission, the Commission has to decide, and, unless the Ministers unanimously override the Commission, that decision prevails and the Commission or any member State may proceed through the courts against the United Kingdom over the head of the British Government and the British Parliament?

Is it not clearly laid down in the treaty, therefore, that key areas of economic and financial policy are removed from the control of Parliament and the electorate, and will the right hon. Gentleman take it that this is wholly unacceptable and will not bind future Parliaments? Will he note that we shall debate the matter today in the debate on unemployment in the North-West, we shall debate this matter tomorrow on the Finance Bill and we shall debate it later when the Industry Bill comes back?

Does the right hon. Gentleman realise that nothing that he has been able to say today can lift from the House the anxiety which arises from the fact that after 1st January these powers will be taken from the British Parliament, and that a ministerial assurance has no value whatever?

Mr. Chataway

The right hon. Gentleman's continued attempts to raise anxiety in the regions about entry into the Common Market lack a great deal of credibility. He and his party, I understand, are in favour, in prinicple, of entry into the Common Market. It would be a strange posture indeed to be in favour of entry in prinicple but opposed to any common rules and co-operation about regional policy. It would be a nonsense. This is only a part of the shabby manoeuvring which has gone on to heal the divisions, or attempt to heal the divisions, within the Labour Party.

The right hon. Gentleman asked me about a memorandum from the German Government dated early July. What has happened is that the German Government have made an inquiry of the Commission. They have asked for information, and the Commission has given them some information. I imagine that even the right hon. Gentleman will have great difficulty in making of that anything which will arouse anxieties in the regions.

Sir Gilbert Longden

Would it not be as well if Her Majesty's Government were at once to inform our future partners that, when we are in the Community, if our joint endeavours can devise some better means of helping our regions, well and good, but, if not, their welfare must remain a vital national interest which we will protect at all costs?

Mr. Chataway

The agreements which we have reached under Article 154 of the Treaty of Accession safeguard the position of our regional policy. I agree with my hon. Friend. I agree with the right hon. Gentleman the Leader of the Opposition when, a few years ago, he said that he was entirely convinced that, the Community are as clear as we are that the welfare of the whole cannot be ensured without an effective attack on the problems of the less developed regions".—[Official Report, 8th May, 1967; Vol. 746, c. 1075–6.] That was the Community's attitude, and it remains its attitude.

Mr. Rhodes

Does not the right hon. Gentleman realise that his statement that the Commission is merely giving information and being asked questions is a gross distortion of what has happened, since the Commission has agreed to discuss with the German delegation whether legislation now passing through this House is valid in terms of the Treaty of Rome and whether, therefore, after 1st January it will be invalidated? Is that not a statement of the position, and would it not be better to come clean with the House and say so?

Mr. Chataway

That is not the position. The position is precisely as I have described it, and as my right hon. Friend the Secretary of State for Trade and Industry made clear when he was asked similar questions in March. The White Paper and the Industry Bill were shown to the Commission as soon as they were available, and the Commission made no request for consultation on either document.

Mr. John E. B. Hill

Is it not clear that the main interest of the Commission is to evolve a satisfactory European regional policy, and a necessary ingredient of that is to find out what the various member countries and prospective member countries are doing, to find out what is worth having and what is worth adopting?

Mr. Chataway

I entirely agree with my hon. Friend. It is just as much in our interest as in the interest of any other region in the Common Market that there should be common rules and an avoidance of bidding up of incentives throughout Europe.

Mr. Jay

Is it not another sad reflection on the good faith of Ministers that this deplorable business was concealed from Parliament until after Third Reading?

Mr. Chataway

Nothing was concealed from Parliament. The position is exactly as I have described it, that an inquiry was made—[Interruption.]—if hon. Gentlemen will stop shouting, I shall answer the question—an inquiry was made by the German Government, of which we heard yesterday—[Hon. Members: "Oh."]—for information from the Commission. I cannot believe that hon. Members opposite are succeeding in their intention of arousing anxiety in the regions by pursuing this line of questioning.

Mr. Edward Taylor

Does my right hon. Friend recall that the White Paper stated specifically that the Government's intention was to continue these incentives until 1978 to give industry the confidence which it required to invest? Does he agree that uncertainty in this regard could cause difficulties? Although I am sure that people in the regions will be glad to have the Minister's assurance that, in his view and in the Government's view, this is not inconsistent, could he tell us when we are likely as a nation to know whether the Commission accepts these incentives?

Mr. Chataway

I have made clear the dealings we have had with the Commission over the White Paper and the Industry Bill to date, and I have told the House about the Commission's reaction. The measures that we are proposing are entirely consistent with our obligations. As my hon. Friend knows, the negotiations which will take place on the working out of Article 154 of the Treaty of Accession will be conducted in the middle of next year.

Mr. Russell Johnston

Is it not in the nature of the Community that there will be challenges of this kind from time to time from individual members of the Community, one day probably including ourselves? In the nature of things, politicians being what they are, are not these challenges more likely in the prelude to elections?

Mr. Chataway

I do not know about the hon. Gentleman's last remark, but of course he is absolutely right to say that in working out a common policy in any direction there are bound to be challenges. I do not know that this amounts to one.

Mr. Selwyn Gummer

Would not my right hon. Friend agree that precisely the same situation would have occurred during the time when the Labour Government applied to join the Common Market? Would he not agree that it is an odd kind of internationalism which refuses to allow anybody to ask any questions about a Community matter?

Mr. Chataway

I think that we should all conclude that it is a very odd kind of internationalism that prevails on the Opposition side anyway.

Mr. Alfred Morris

When does the right hon. Gentleman expect to know the outcome of the Commission's consideration of what he has called "the German inquiry"?

Mr. Chataway

I have told the House of the reply that the Commission has given to that inquiry. So we know the answer now, for I have given it.

Mr. Biffen

Is it not quite clear that all the aids to regional development policy about which the Germans have some reservations were contained in paragraphs 8 to 33 inclusive of the White Paper, "Industrial and Regional Development", which was thoroughly discussed with the Commission, and that if there had been any ambiguities about them, that was the time when one would have expected the Government and the House to be so informed? Is not the reality behind all this that it is well known that we hope to trade off our contribution to the common agricultural policy, which in a sense is a regional policy, by getting in return a Continental contribution to the financing of our industrial policy? Is not this a flexing of the muscles on the part of a supposedly friendly country within the Community and merely an indication of what we can expect to come from the French?

Mr. Chataway

I think that the majority of those concerned with regional policy would want to see a common European regional policy worked out. As for our dealings with the Commission, I have explained that the documents, the White Paper and the Industry Bill, were shown to the Commission after their publication, and that the Commission lodged no objection against them.

Mr. Elystan Morgan

Does the right hon. Gentleman recollect that a few weeks ago his right hon. and learned Friend the Chancellor of the Duchy of Lancaster informed me in the House that there was no inhibition whatever on the pursuit of regional policies now being considered by Her Majesty's Government in the event of our entering Europe, and that he stated that that opinion was given on the basis of the conversations that the Government had had with the Governments of the Six? Is it a case of the German Government's now ratting on an agreement solemnly entered into, or is it a case of the Government seeking to deceive the House of Commons?

Mr. Chataway

It is astonishing that hon. Members should make a charge of that kind against friendly Governments on the sort of evidence that is available. I have made it clear that we have had discussions over a long period about regional policy with members of the Community and with the Commission, and we are perfectly satisfied on the basis of all that has been discussed that what we are proposing is entirely consistent with the treaty. I have made it clear and my right hon. and learned Friend the Chancellor of the Duchy of Lancaster has made it clear on many occasions that of course we want to see a common approach and we are, therefore, anxious to work it out.

Mr. Dennis Walters

Does not my right hon. Friend regard it as strange that Labour Members, who are always pressing for better regional policies, should find it so objectionable that in Europe one should have to plan to make regional policies for Europe and for us more effective?

Mr. Chataway

I agree with my hon. Friend.

Mr. Edward Short

If the Commission decides that some parts of this legislation are incompatible with Community rules, would the right hon. Gentleman confirm that it will become invalid on 1st January whether it has been passed by the House or not?

Mr. Chataway

No, that is not the position. The position is that under the Treaty of Accession we are committed to discussions about Article 154 of the Treaty of Rome to be concluded by 1st July, 1973. As I have made clear, the policies we have put forward are consistent with the treaty and with Community policies.