HC Deb 28 July 1972 vol 841 cc2327-40

Question again proposed. That the Clause be read a Second time.

Mr. Chataway

The Industry Bill will be subject to our treaty obligations as many other Acts of Parliament will be so subject. That is understood by every hon. Member. Therefore, to write in new Clause 2 would be at variance with the European Communities Bill which the House has just passed. Similarly, new Clause 3 would clearly be inconsistent with the spirit of the European Communities Bill and with the procedures which have been agreed by Parliament. It would be inconsistent to dig out simply one Act of Parliament—the Industry Bill—when it is passed—and say that if it were amended as a result of any action taken as a result of our treaty obligations it should be done by an affirmative Resolution. It might well be, as those who followed the debates in the House on Clause 2 and Schedule 2 of the European Communities Bill will know, that any Amendment might well be by affirmative Resolution, but clearly I could not recommend to the House that in this Bill there should be a requirement on the Government to proceed by affirmative Resolution.

I can give a firm assurance that it will be the intention of the Secretary of State to include in the annual report the kind of material which is envisaged in Amendment No. 42, but it would not be sensible in such an Amendment to stipulate just one of the important matters which must be a part of the Secretary of State's Report.

The debate has been concerned with wider matters. One or two hon. Members returned to the subject of the inquiry of the Commission by the German Government. Not much was made of that today and I can understand why, although the hon. Member for Penistone (Mr. John Mendelson) and the hon. Member for Glasgow, Craigton (Mr. Millan) referred to it. Probably the right hon. Member for Bristol, South-East (Mr. Benn) recognises that there is not much to be gained from jumping in in the way he did the other day and suggesting that it was clear proof of how regional policy was going to be destroyed by membership of the Common Market. As the German Gov- ernment have made clear, it was an inquiry and not a complaint.

As a number of hon. Members on both sides of the House have made clear, if we want to have common rules and to be a member of the Common Market, we must recognise that such inquiries will take place. There will be arguments on occasions. As the right hon. Member for Birkenhead (Mr. Dell) rightly said, the same applies to membership of EFTA. It was a storm in a teacup and I doubt if any hon. Member was seriously suggesting that there was anything in it to cause alarm.

Underlying a number of some of the serious inquiries during the debate were questions, for example, from my hon. Friend the Member for Oswestry (Mr. Biffen) about the discussions which have taken place with the Commission in the course of presenting the Bill to Parliament. Both the White Paper and the Industry Bill were drawn to the attention of the Commission. Officials have explained the provisions of the White Paper and the Bill to the Commission. We do not believe, as we have explained on a number of occasions, that there is any conflict between our regional measures and the obligations of membership of the Community. That belief is 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.

It was open to the Commission and to the Community under the interim period consultation arrangements, which are described on page 128 of the Treaty of Accession, to ask for consultations. There have been no requests for consultations on the matter.

Mr. Biffen

Was the Industry Bill made available and shown to the Commission before it was printed and laid before the House?

Mr. Chataway

I do not wish to give a categorical answer to my hon. Friend on that matter. I do not see that there is vast significance in that question. [Interruption.] I have said that the White Paper was shown to the Commission after it was printed. My belief is that after the publication of the Bill the Commission saw it. It was drawn to the attention of the Commission, but whether the Commission saw it immediately before or after publication—and I believe it was after publication—the point is that under the procedures of the Treaty of Accession, there have been no requests for consultation.

We are convinced—and we are reinforced by the discussions which we have had over a long period with the Commission and members of the Community about regional policy—that there are none of the measures we are proposing in the Bill is inconsistent with membership. That is not to say—this point was made by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) and by other hon. Members—that there are no actions which could be taken under the Bill which would not be inconsistent with membership. Clearly, it would be possible to use the powers under the Bill, as it would be to use the powers under a large number of other Acts, in a way which would be totally inconsistent with our Treaty obligations.

My hon. Friend the Member for Cirencester and Tewkesbury rightly and accurately described the way in which Community policy has worked over the years. My hon. Friend drew attention to the fact that there were what he described as "savers" for regional and social policies, and he said that these had been working well.

My hon. Friend the Member for Hastings (Mr. Warren) drew attention to the support which is given by the French and German Governments to their computer industries. We all know that in the Community assistance such as that to be given under Clause 8 is given by member states to their industries in order to support ventures in high technology for example ventures for which the market cannot provide. Provisions in the Treaty, for example in Article 92, could rule out some uses of Clause 8 because the Clause gives very wide-ranging powers. Therefore, ultimately the basic question before hon. Members, and it was one which dominated the debate, is whether or not it is an advantage to have common rules in any of these areas. That is the division between hon. Members but it is not a division between the two sides, because probably as many as half of those who have spoken from the Opposition side have argued in favour of such common rules and recognise that it is in the interests of the regions of this country as much in the interests of the regions of any other.

Mr. Millan

Can the right hon. Gentleman give us some examples of the uses of Clause 8 which will be incompatible even with our Treaty obligations at the moment when no common regional policy has been adopted?

Mr. Chataway

I refer the hon. Member to the provisions of Article 92 of the EEC Treaty. As he knows these were interpreted by a Resolution of the Council of Ministers in October, 1971. Under that the Community is divided into central and peripheral regions and there is a limit on regional aid.

Mr. Millan

That has nothing to do with the Clause.

Mr. Chataway

It is precisely to do with Clause 8 because it is to do with the central areas of the country. There is a limit on regional aid of 20 per cent. of the project cost in the central areas in order to prevent bidding up for mobile projects. The provisions would impose limits upon the amount of aid which could be given in the central areas but they would not apply in the peripheral areas. We have to exercise our powers under Clause 8 in the same way that we have to exercise our powers under many other Acts of Parliament in a way which is consistent with our treaty obligations.

Mr. Dan Jones

Is the Minister telling us that if the EEC took exception to all the provisions in Clause 8 the Government would brush aside those objections and that the provisions of the Clause would therefore be brought into operation.

Mr. Chataway

The hon. Member will know because he was a consistent attender at the Committee proceedings that the Government have substantial powers to assist industry in the regions. As members of the Community we shall have to exercise our powers in a way that is consistent with our treaty obligations. The hon. Member for Craigton asked me for an example of a Community regulation which would limit the assistance which could be given under Clause 8 and I gave him one.

4.15 p.m.

Mr. Millan

May I pursue the example a little further? Suppose that assistance to ICL was given under Clause 8—I know that was the Government's original intention but for reasons which have not been adequately explained they will now give it under another Act of Parliament—how is the 20 per cent. to be calculated, because in that case the help related to the particular expenditure being assisted is 100 per cent.?

Mr. Chataway

The 20 per cent. limitation on assistance in the central areas is imposed across the board upon the generalised grant system. Nothing in that provision would prevent us from giving the assistance to ICL under Clause 8. I can assure the hon. Member that the decision to give that assistance, which was for research and development support, under the Science and Technology Act, 1965 was taken for administrative reasons and not because of the Common Market. The reason is that we believe it will be more convenient to continue to give assistance for research and development under the Act and that as the general principle we should confine the Bill to those areas in which we do not already have powers. Similarly, as my hon. Friend the Under-Secretary said earlier, we shall be using the Tourism Act to support the tourist industry.

I recognise that there are deeply-held differences of opinion on the matter. Those who take the view that it is not in our interest to have a common policy on regional matters, to have common rules among our European partners, will be opposed to entry into the Common Market and will support the new Clauses which are clearly inconsistent with the European Communities Bill.

I believe that a number of hon. Members who have spoken, including the right hon. Member for Birkenhead, the hon. Member for East Stirlingshire (Mr. Douglas), my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne), and my hon. Friends the Members for Hastings and Cirencester and Tewkesbury, have made an extremely strong case for believing that it must be in our national interest and in the interests of any other European country to have such common policies and such common rules.

If there is unlimited bidding up between European countries it cannot be in the interests of any of us. It is not only the bidding up for mobile industries which would cause concern, although, as my hon. Friend the Member for South Angus said, that could be damaging to any region. If unlimited subsidies are given by competing regions in Europe it could damage the effectiveness of the assistance that we give. I do not believe therefore that the balance of argument this afternoon has gone in favour of those who have taken the nationalist line on these matters. Some may argue that they wish for total independence and suggest that they are appalled by the thought that we might have to co-ordinate our regional policies. I hope that, recognising that there is a fundamental difference of opinion on these matters, a difference of opinion which has been reflected in the course of the European Communities Bill, the House will reject these two new Clauses.

Mr. Benn

The Minister and his colleagues would have simplified proceedings if he and his colleagues had been a little more candid at the outset about the implications of the European Communities Bill for the Industry Bill. The plain truth is that by a series of questions in Committee and in the House and by the new Clauses we have drawn from Ministers, steadily but reluctantly, a full account of what has really happened.

The fact is that the Government had reached the arrangement with the Commission that Bills would be submitted to the Commission. Now the Minister—and I understand a man in this difficult position—not knowing exactly whether it was discussed with the Commission be fore it was published, or after it was published—and if he wants me to give way so that he can give the answer I will do so—

Mr. Chataway

I was anxious that I should not inadvertently mislead the House on even a minor detail, but I can now confirm that neither the White Paper nor the Industry Bill was discussed with the Commission before publication.

Mr. Benn

Not discussed before publication.

Mr. Chataway

Or submitted.

Mr. Benn

The fact is that if there had not been this cross-examination of Ministers on this matter, the House would never have been aware that a parallel and almost certainly earlier form of consultation was taking place with the Commission before the parliamentary examination.

If we are suspicious, it is because for this Parliament it is the first time in its history that a Minister has come to the House armed with the views of an international body, views which have to be taken seriously, unlike those of EFTA, because, unlike EFTA, which may be disregarded and to which we can just break our word, to use the expression of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), when we are dealing with the Commission, we are dealing with our masters, and that is why we have to take the Commission seriously.

Mr. Bruce-Gardyne

In view of what the right hon. Gentleman has just said, what was he doing when Mr. Richard Good used to discuss with the Labour Government what they could and could not do?

Mr. Benn

If the hon. Gentleman will allow me, I will come to that.

The key to the matter is that Ministers traditionally consult interests, national and international, but the decision is taken by Parliament. What has happened as a result of the Industry Bill, in conjunction with the European Communities Bill, is that the Government consult Parliament, but the decision is taken elsewhere.

Mr. Chataway

No, no.

Mr. Benn

It is no good the right hon. Gentleman saying "No, no"; he has just told the House that the decisions of the Commission will be binding on this country. That is what it is all about. If that were not what it was all about there would be nothing for him to boast about in harmonisation and internationalism and so on. That is the issue.

When he rejected new Clause 1, which was designed for the avoidance of doubt—not that we had much doubt—and the other new Clause, to lay down in respect of the defence of our regional policy that there should be a special procedure, when all that is brushed aside, we know what the truth is, and the truth is that the Minister and his colleagues have agreed that the final decisions will not be taken by him.

The reason that his assurances are valueless to us is that his own legislation removes his own rô1e as the ultimate decision maker in regional policy. It is not a discourtesy to him or to his right hon. Friend to say that their assurances are valueless. Their assurances are valueless, because they are promoting legislation which will mean that they will require the assurance of the Commission. All they are doing is making highly informed and no doubt genuinely helpful attempts to comment on what might happen.

Raising the German case as I did the other day was enormously worthwhile. First, it drew to the attention of the House the fact that inquiries were already going on with the Commission and that the British Government had not been told about them. I asked the Minister why he had not told the House before Third Reading of the European Communities Bill that the Germans had communicated with the Commission, and there was a simple answer—he did not know:he said so in answer to a supplementary question that I put to him.

Now, in a desire to be helpful, which is always their characteristic, the Germans have put our statements saying for the first time Bills are now being discussed with the Commission, but the Government have never told us. That was the second benefit.

Finally, the Germans have told us not to worry, because they would not expect a statement before the recess anyway. They say: A detailed reply from the Commission could hardly be expected before the Summer Recess. The Germans are thus still awaiting a reply from the Commission and whatever the Minister may say about his own expectations of his own marvellous legislation, and every Minister is allowed that, it will not be he who will decide whether the Act is compatible with the Treaty. Neither will he decide whether it may be used in certain cases.

He has told us that the Science and Technology Act, which was designed for some other purpose, is to be the instrument by which the computer industry is to be supported. We have had the Minister's own statement of his intentions and—

Mr. Dan Jones

Will my right hon. Friend give way?

Mr. Benn

I am thinking about the time of the House.

Mr. Jones

I should like my right hon. Friend simply to distinguish between science and technology and real assistance to the regions.

Mr. Benn

They all come under the provisions of various Acts, but my hon. Friend will divert me into other channels if he pursues me on that matter.

The computer industry had been supported under the Industrial Expansion Act which in all relevant provisions is the same as the Industry Bill. It was necessary to use Clause 8 because it was general selective assistance not connected with the regions. Clause 8 has had to be timed to expire with the end of the transitional period. The Government were afraid that if they launched on a course of supporting ICL under an expiring Clause in a questionable part of the Bill, they might get into difficulties. I venture to tell the House that in my opinion the change to the Science and Technology Act was made for that reason.

It was astonishing that a Minister should announce £14 million assistance under one Act and then write to the man who had asked the question and say, "I ought to let you know that we have changed the Act under which we are giving support". If that was not connected with the application to join the European Community, I should be very surprised.

It is not a matter of raising fears, but a matter of defending our national rights to control these matters. It is a question of whether regional policy is to be under the control of a Minister accountable to Parliament. The reason why the CBI is not at all worried is that the CBI has an office in Brussels. The CBI does not bother to go to the Minister for it can go to the Commission direct or to the Council of Ministers. As the Secretary of State knows, the NFU has an office in Brussels. Plainly, the CBI will bring pressure to bear on individual Members. as will its counterpart in France, but the real power is to be in Brussels and that is where the CBI and other pressure groups will make their influence felt. This has been brought out very clearly in the statements made by Aims of Industry and others.

Mr. Chataway

It may be of interest to the right hon. Gentleman if I tell him that I am told that the staff of the CBI office in Brussels is one girl.

Mr. Benn

The right hon. Gentleman should not laugh too soon. He knows very well that the NFU has already joined the international organisation of farmers in Brussels. He knows very well that Aims of Industry has announced that it will not be necessary to go to national Ministers, because decisions will be taken elsewhere.

In the course of this week, we have had a major debate about the need to obey the law. When we approach a new law promoted by Parliament, before we assent to it, we had better know how that law is made. If the Government come to the House with a Bill which has been through all its stages—Second Reading, Committee and now Report—and which is to be the law of the land, is that law, which Ministers will say the British people should obey, to be modified by the Commission afterwards without any shred of parliamentary examination?

The whole basis of the social contract upon which our system of government rests is that when we say to somebody "You must obey the law", that statement contains within it the provision that by democratic action he may change the law. If the Government now say that in respect of regional policy—which touches the lives, jobs and prospects of millions of our people—they may not be able to relieve the anxieties of our people because the Commission does not permit it, they are changing by that one process the whole basis of the social contract.

Regional policy has not traditionally been thought up by kind and generous Ministers. Although Ministers of all parties are human, and are concerned with human suffering, regional policy is a product of pressure from people who find themselves oppressed by unemployment; and that pressure produces a Government response. Why did the right hon. Gentleman change his "lame duck" policy? It was because the pressure from the people afflicted by it was so great that in the end the right hon. Gentleman's Cabinet colleagues said "We shall never win another election, Mr. Secretary of State, if you go on with Upper Clyde and all those policies."

Why does the House think that the Jones-Aldington Report has been produced on the dot? It was because the pressure of the people affected by unemployment produced a change of policy. I go further. Why does the House think that the Labour Government changed their minds on many matters, other than because they tried to learn from their own mistakes? [Laughter.] I warn the House not to giggle at the idea that we in this place are subject to pressure to which we try to respond in the development of our policy. If the House laughs at the idea that Ministers may listen to their constituents—[Interruption.] That is what the House is laughing at. The House is laughing at the idea that any Cabinet might change its mind because of public pressure. Yet time and time again Governments have produced policies to meet problems of unempioyment in the regions in connection with the docks, the railways, the mines and everywhere else. That is what the democratic process is about.

If we introduce into that cycle of pressure and response a wholly undemocratic element—an unelected element—in the shape of the Commission, we are fundamentally changing the relationship between Parliament and the people, and when the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) says that the straight and narrow path of competition must be preserved, and we had better have it done by somebody outside if the British Parliament is too weak to

keep us on it, he is saying that he would rather have rigid competition policies than democratic control of our affairs.

That is how the hon. Member for Oswestry (Mr. Biffen) resolved the conflict in his own position. He does not like intervention, but if he has to have intervention he wants it approved by Parliament, and he would rather preserve the right to intervene within our society—knowing that some Ministers may be weak and agree—than have the whole process taken away and given to a commission in Europe, where no discretion would be left to us.

I tell Government Ministers that this issue is not theoretical or academic; regional and industrial policies touch upon the prospect of jobs for millions of people, tip to now we have always been able to call Ministers to account; we have always been able to argue that Ministers can change their mind, and change legislation. From 1st January next that power will have been taken away from Parliament, from the electors and from the nation. That is a very big change.

I tell the right hon. Gentleman that to try to do this without obtaining the consent of the British public is itself to break the law of the land. The constitutional tradition and custom of this land is that we do not affect the powers of future Parliaments unless we have the explicit consent of the people. It follows that no moral obligation will be laid upon our people to obey the laws imposed upon us by the Commission as a result of the two Bills with which we are concerned. I very much hope that even late on a Friday the House will recognise the historic importance of what we are being asked to pronounce upon.

Question put, That the Clause be read a Second time:—

The House divided:Ayes 25, Noes 72

Division No. 330.] AYES [4.35 p.m.
Atkinson, Norman Jones, Dan (Burnley) Pavitt, Laurie
Benn, Rt. Hn. Anthony Wedgwood Kaufman, Gerald Sandelson, Neville
Cocks, Michael (Bristol, S.) Kerr, Russell Shore, Rt. Hn. Peter (Stepney)
Davis, Terry (Bromsgrove) McElhone, Frank Stoddart, David (Swindon)
Deakins, Eric Mellish, Rt. Hn. Robert Williams, Alan (Swansea, W.)
Dell, Rt. Hn. Edmund Mendelson, John TELLERS FOR THE AYES:
Dormand, J. D. Mikardo, Ian Mr. James A. Dunn and Mr. Tom Pendry.
English, Michael Millan, Bruce
Faulds, Andrew Miller, Dr. M. S.
Jenkins, Hugh (Putney) Orbach, Maurice
Alison, Michael (Barkston Ash) Haselhurst, Alan Peyton, Rt. Hn. John
Atkins, Humphrey Hawkins, Paul Pym, Rt. Hn. Francis
Baker, Kenneth (St. Marylebone) Higgins, Terence L. Redmond, Robert
Brown, Sir Edward (Bath) Hornsby-Smith, Rt. Hn. Dame Patricia Rhys Williams, Sir Brandon
Bruce-Gardyne, J. Howe, Hn. Sir Geoffrey (Reigate) Rossi, Hugh (Hornsey)
Butler, Adam (Bosworth) Jenkin, Patrick (Woodford) Royle, Anthony
Carlisle, Mark Jopling, Michael Scott-Hopkins, James
Chataway, Rt. Hn. Christopher Kershaw, Anthony Shaw, Michael (Sc'b'gh & Whitby)
Chichester-Clark, R. King, Tom (Bridgwater) Skeet, T. H. H.
Crouch, David Kirk, Peter Soref, Harold
Davies, Rt. Kn. John (Knutsford) Knox, David Stanbrook, Ivor
Dean, Paul Lambton, Lord Sutcliffe, John
Dixon, Piers Lamont. Norman Tebbit, Norman
Drayson, G. B. Lane, David Thomas, John Stradling (Monmouth)
Dykes, Hugh Langford-Holt, Sir John Thomas, Rt. Hn. Peter (Hendon, S.)
Eden, Rt. Hn. Sir John Legge-Bourke, Sir Harry van Straubenzee, W. R.
Finsberg, Geoffrey (Hampstead) Le Marchant, Spencer Ward, Dame Irene
Fortescue, Tim Mather, Carol Warren, Kenneth
Fox, Marcus Mills, Peter (Torrington) Weatherill, Bernard
Gibson-Watt, David Moate, Roger Wilkinson, John
Gilmour, Ian (Norfolk, C.) Monks, Mrs. Connie Wood, Rt. Hn. Richard
Godber, Rt. Hn. J. B. Murton, Oscar TELLERS FOR THE NOES:
Goodhew, Victor Noble, Rt. Hn. Michael Mr. Kenneth Clarke and
Grant, Anthony (Harrow, C.) Normanton, Tom Mr. Walter Clegg.
Grimond, Rt. Hn. J. Pardoe, John
Gummer, J. Selwyn

Question accordingly negatived.

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