Clause 2

HC Deb 08 June 1972 vol 838 cc714-855

GENERAL IMPLEMENTATION OF TREATIES

3.55 p.m.

Mr. Peter Shore (Stepney)

I beg to move Amendment No. 229, in page 3, line 16, leave out subsection (3).

Today we are discussing in this and other Amendments which have provisionally been selected what is for many of us the most damaging and unacceptable part of what is a thoroughly odious Bill. Formally, subsection (3) which we seek to delete authorises the Government to hand over to the European Communities the amounts required, in the words of the subsection to meet any Community obligation to make payments to any of the Communities or member States". In reality, the subsection embodies one of the principal failures of the entry negotiations. It sanctions both the payment by this country of ruinous sums to Europe and the abandonment of part of the essential democratic power of this House.

The payments covered by the subsection fall into two separate and, indeed, contrasting groups. There are those contributions to the European Investment Bank and the mutual support scheme which are limited and definite in amount, reasonably fair in relation to our national income and broadly uncontroversial as to their purpose. I shall say nothing more about them except to point out that, unhappily, they comprise only a tiny part of the total contribution that we have to make and, indeed, of the total Community budget.

It is the second group of payments, the annual contributions that we are to make to the Communities' expenditures, about which the country and this Committee are rightly concerned. These sums, in contrast to the first group, are large and open-ended, unrelated to our capacity to pay, unfair in their incidence and earmarked for purposes—mainly agricultural protection—which no serious person in Britain, or, indeed, in Europe, wishes to justify. It is these payments and the taxes on which they are based that will imperil our national prosperity, increase the food bills of every family in the land, make a mockery of parliamentary control and force upon us the profoundly unacceptable principle of taxation without representation.

The subsection itself tells us nothing about amounts, and the Explanatory Memorandum, like the White Paper of last July, discreetly lowers the curtain at the end of year five, 1977. Even so, up to that date, as we know, we are to pay no less than £725 million across the balance of payments to the European Communities, and I emphasise that that is a net figure. The gross figure will be just over £1,000 million, and one of these days somebody on the Government Front Bench will, I hope, try to tell us in some detail all elements of payments which this country is expecting from the Community which will bring down the gross figure even to this pretty appalling net figure of £725 million.' We simply have not had any serious explanation of all the kinds of payment and what the relationship of the receipts will be to the contributions over the period of time that is involved.

4.0 p.m.

At the end of the five years, the amount will of course dramatically increase. The £725 million is only the beginning. Instead of paying the reduced entry fee, which is all that we are obliged to do up to 1977, we shall have to pay by 1980 the full amount—an amount based not on our capacity to pay but upon the new rules laid down in Luxembourg in April, 1970, the so-called "own resources" rules of the Community.

So there will be a yield from three taxes. The first is the levies on food imported into Britain from outside Europe, principally on our food imports from Australia, New Zealand, Latin America, Canada, the United States and elsewhere. This will be a tax on food that has given to British families for so long a low-cost, high-quality diet.

The second tax is the yield on our customs duties imposed on goods coming from the rest of the world, apart from Europe. The third—because the first two taxes and their yields will not be enough in the Community's budget—is an up to 1 per cent, value added tax, which the Government have been obliged to introduce in the Budget this year.

What will this mean to us? The Government say that they cannot even assess the cost. That is very convenient for them. What we do know, however, is that, first, our contribution will increase well beyond the 1977 level. That will not be denied. So much so that two further years are allowed for adjustment upwards to whatever new level under the own resources system our payments will then have to reach. The Committee should be reminded that the low 1977 level of net contribution from which we shall go up is not less than £200 million. That is the starting point.

Second, the Government's own estimate, presented to the Six in Brussels at the start of their negotiations in July, 1970, was for a gross contribution of £570 million a year or a net contribution of £470 million. That was their own estimate, and we have heard nothing since in correction of it.

The third thing we know is that we shall pay more than any other member country, not only absolutely but per capita as well. One of the things that have amazed me is the Government's failure to produce any estimate of the relevant contributions which will be made under not only the first five years' contribution but the permanent own resources contribution system, not only by ourselves but in relation to all the other member countries. This is a deficiency which I hope they will take an early occasion to remedy.

The last thing that we know is that we shall receive in return a smaller amount than anyone else in relation to our own contribution. Whatever the precise figures may be—I have always understood the difficulty of giving more than arranged—they will clearly amount to a vast and damaging payment imposed upon this country.

Of course, the reason for all this, the reason why we have this great difficulty with this Clause and with the payments to the Community that it sanctions, is that here there has been, and was throughout the negotiations, a real failure by the Government.

They failed in the first place to get a permanent exemption from the Community's own resources system. The Chancellor of the Duchy and the Chancellor of the Exchequer who preceded him have both rigidly sought this. His predecessor, in his negotiating rôle, went so far as to say that no British Government could contemplate joining unless we got a satisfactory waiver from it.

Second, they failed to get a review clause, which was their fall back position, and which would, if the sums involved were too much, have given us an automatic right to take the matter up. They were refused a review clause, so all that they were left with was a mere mention in the White Paper of last July, quoting from some communiquéissued in the course of the negotiations by the Council of Ministers, to the effect that it would be awful for the Community if Britain could not pay. That is what it amounts to. That was the second substitute for a safeguard.

The Government failed in the third instance because they could not get accepted what I think was a reasonable alternative strategy—to get the Community to agree, in exchange for our acceptance of the common agricultural policy, to a common industrial or regional policy, of which it was hoped that Britain might be the main beneficiary.

Mr. Anthony Fell (Yarmouth)

The right hon. Gentleman has asked a number of specific questions about finance, affecting the people of this country in a very big way indeed. As these questions may be lost during this debate by the time the Minister answers, I wonder whether he would be willing to give way to someone on the Treasury Bench if they were willing to try to answer one or two of these very special questions.

Mr. Shore

I would be very willing. This is a difficulty that we all have in this closured and guillotined debate. It would be very helpful if we could have the ordinary exchanges, but I shall always be very willing to give way for serious contributions and information. But I hope that the Minister will be able to answer us later on.

My last point was on the failure to get a regional and technological counter-contribution in the form of a common policy. It was a reasonable thing to go for, but what does the July White Paper tell us about it? At the end of it all, all that it can say—and it sounded very helpful—is on page 42: As the Community develops, there will be other purposes for which Community funds will be spent, such as technological, industrial and regional policies, from which, unlike agriculture, Britain could expect to receive back money commensurate with her contribution to the Community's budget. So I believe that I made my point fairly enough—this was part of the Government's strategy. The only trouble is that it appears in a White Paper and not as anything to do with an obligation entered into by the Community or in any way as part of the treaties of accession. This is a very serious problem.

In other words, these words express not agreements reached but hopes entertained. So, while we have the reality of substantial and continuing British payments for the farmer of Europe, we have nothing except the weak words of the White Paper about community policies for industry in the regions which might benefit Britain. So now our Prime Minister has to importune President Pompidou to put these matters on the agenda of the October summit meeting. If he is not careful, President Pompidou may not have a summit meeting at all. I should have thought that everyone here would agree that the right course was to have insisted that these policies should be agreed before the treaties were ever signed.

The payments here are large and open-ended, in more senses than one. Under Clause 2(3) we shall assume obligations to contribute to the costs of the Community. That is clear; but these costs are changing year by year. Only a few months ago, as the Committee will recall, Community food prices were increased by just under 7 per cent., and they will increase again by roughly the same amount in 1973.

Surely the Government can give some revised figures of the total Community budget and of our share in it in the years immediately ahead. After all, we are sanctioning in the Clause our payments to the Community, though we do not have the faintest idea what they will be.

I questioned the Minister of Agriculture, Fisheries and Food on 17th May about the current and forward estimates, of the Community's common agricultural budget. Remember, this is 90 per cent. of the total budget. To my surprise, I received the information that these estimates did not extend beyond 1972. I was genuinely surprised—[Interruption.] One can be more or less surprised, but in this case I assure the Committee that I was very surprised indeed. After all, in the Council decision of 21st April, 1970, Article 1 provides: that the Commission draw up the financial forecast for the three subsequent financial years. What has happened? This is a proper question to ask, and I am glad to see the Chief Secretary in his place, because he has access to the Treasury and will no doubt be able to supply the answer. The figures should be available to the Committee, at least of the size of the Community budget in estimate, for 1973, 1974 and 1975. Indeed, the Government have a duty to supply this information.

I have every reason to believe that these figures will show a marked increase yet again in the size of the Community's total budget. In the White Paper of July, 1971, the Government's estimates were based on an assumed Community budget of £1,400 million in 1973 and £1,600 million in 1977. I have done the translation into pounds sterling and allowed to the best of my ability for the changes since that date, and I now quote the figure which I believe is comparable. If I am wrong, I trust that a Government spokesman will correct me.

According to the latest report of the European Communities, the figure for 1972—that is, the budget figure for this year—is over 4,000 million dollars or units of account. When translated back to what I believe to be the equivalent in £s, this in terms of the Government's White Paper is £1,600 million, which is the figure the Government estimated for 1977.

Sir Robin Turton (Thirsk and Malton)

Is the right hon. Gentleman aware that the figure given in the Community budget is not 4,000 million dollars but 4,100 million, which is equivalent to £1,708 million, converted into units of account?

Mr. Shore

The right hon. Gentleman is more accurate than I am in these matters. Frankly, on these occasions I am happy with orders of magnitude, though I agree that it would be useful if we could establish precise figures. In any event, the point is well made and I trust that it will be well taken by the Government.

Mr. Arthur Lewis (West Ham, North)

I was staggered to hear the figure given by my right hon. Friend. I am still wondering whether I heard him correctly. Would he mind repeating it?

Mr. Shore

I have a further point to make which will help to reinforce it. Perhaps no one should be surprised to find the White Paper figures out of date. When we look back over the past decade we see that the growth in the Community's budget has been staggering. It was negligible at the time of Mr. Macmillan's application. It had reached £600 million a year when the 1967 non-negotiation, as it were, did not start. It had climbed to over £1,000 million by 1970, and now—this will interest my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis)—it is £1,600 million, the figure which Her Majesty's Government thought the budget would reach by 1977. In other words, the 1977 figure has been exceeded in 1972.

Mr. Raymond Gower (Barry)

The right hon. Gentleman is making a lot of play with figures. Has he borne in mind that even in our domestic Parliament since the war British Chancellors of the Exchequer have been grotesquely wide in their budgetary estimating? Why should the right hon. Gentleman assume that it is so easy for estimates of this kind affecting a great deal of Europe to be made?

4.15 p.m.

Mr. Shore

I appreciate the difficulties involved in making estimates of this kind. I am simply trying to establish what the position is at present. After all, we are discussing this matter as responsible people. We must consider whether or not we should abandon control over the payment of moneys from this country to Europe. I cannot understand why anyone should not wish to probe to the utmost to find out precisely what is involved and to satisfy himself, whatever view he holds about membership of the EEC, that we are doing the right thing.

Captain Walter Elliot (Carshalton) rose—

Mr. Shore

I would dearly love to give way to the hon. and gallant Gentleman, but as we are working under the shadow of the guillotine I fear that I must disappoint him.

Having explained that the budget has already reached the 1977 estimate, I am anxious to explain what in my view has been the main reason for this. It is not just the difficulty of making estimates. There is an underlying problem. It is the inefficient method of support for European agriculture and the spread of the common agricultural policy to embrace increasingly all the major foodstuffs. I see no reason why these costs should not continue to escalate.

We have talked before about the so-called or alleged national veto. It certainly exists on farm prices. They can be lowered only if there is a unanimous decision to do so, and one will not get such a decision from many of the Governments of Continental Europe in view of the importance of the farm vote to them.

Not only will prices not be reduced, but I am afraid that the myth which Ministers opposite tried so hard to spread last summer—"Do not worry because world prices will rise"—has proved groundless. After all, that was the only possible alternative; if world prices rose it would not matter if Community prices remained at an intolerably high level.

However, I must inform the Government that the evidence is against them. Despite the exceptional events that affected the supply of butter in New Zealand and what happened to other commodities, there is no evidence to show that the gap is closing. Indeed, the evidence is to the contrary, so that the full burden and cost of the common agricultural policy will have to be borne. It is also possible that the CAP will be extended to some other commodities and that the whole costly protectionist machinery will be extended into new areas.

We know that just before the negotiations with Britain began the Commission was working on proposals to bring mut- ton and lamb within the CAP. I believe that there was a draft regulation to that effect. There is hardly any mutton and lamb in Western Europe, but, provided that the levies and support prices are high enough, I have no doubt that the supply of these foodstuffs could be increased and sheep breeding made sufficiently profitable; and everyone will be happy except our housewives and the exporters of New Zealand.

Mr. Arthur Lewis

While we know that the Minister of Agriculture, Fisheries and Food knows nothing about beef, perhaps he knows something about mutton and lamb. Does my right hon. Friend agree that the Minister might have shown the Committee the courtesy of being present when an important subject like this is being debated? He might have been able to answer my right hon. Friend's questions. Certainly the Solicitor-General will not be able to answer them.

Mr. Shore

My hon. Friend has a point, but on the occasions when the right hon. Gentleman has been present we have not found him the most helpful of those who have been dealing with these matters. Such an extension of the CAP—it is perfectly possible that it will be extended to mutton and lamb—would increase the size of the budget and the contribution that we have to make.

Perhaps I may put another specific question to the right hon. and learned Gentleman. In view of the possible proposal for a regulation to bring mutton and lamb within the ambit of the common agricultural policy and its protectionist levies, is it Government policy to consider any such regulation as raising a matter of major national interest on which we would exercise the alleged veto and refuse to agree to such an extention of the CAP and such levies being imposed? We and every housewife in Britain would be grateful to have an answer to that question before the end of the day.

There is another reason why we have to worry about the Clause. It gives no adequate parliamentary restraint or control upon the growth of the Community's budget or upon our contribution to it. I will give an example from the way the food levies operate. Once the system is adopted, these have to be adjusted frequently to reflect variations in world prices. If a downward trend in world prices should emerge, automatically the size of the levies has to increase. That emerged clearly from the reply that the Chief Secretary to the Treasury gave in column 1140 on 22nd February when he confirmed to my right hon. Friend the Member for Battersea, North (Mr. Jay) that if an existing levy was raised to take account of changes in Community and world prices, no further Order in Council, if there was an Order in Council already, would be required to authorise it. That point was well established.

Further, the Chief Secretary on the same occasion explicitly envisaged the widening of the CAP to embrace new commodities. He said: it is necessary to make provision for such new levies and for such changes to be directly applicable in this country."—[Official Report, 22nd February, 1972; Vol. 831, c. 1139.] The only comfort we got from this—

The Chief Secretary to the Treasury (Mr. Patrick Jenkin) rose—

Mr. Shore

—I think I can anticipate the hon. Gentleman's answer—was his assurance that the Government would require first that any Community agreement that was reached, to which we were a party, to broaden the scope of the CAP would have to come before the House under the affirmative procedure of Clause 1(3).

Mr. Jenkin

I am looking through the passage the right hon. Gentleman has quoted. My recollection is quite clear that I also said that there was at present nothing in the wind about extending the policy. I recall that I said there were no proposals to extend the common agricultural policy to new products.

Mr. Shore

I am grateful to the hon. Gentleman. I hope that the Minister of Agriculture and his colleagues on the Council of Ministers in Europe will be able to confirm his statement.

But even that does not finish the matter. Both the Chief Secretary on 22nd February and the Financial Secretary on 15th February made it all too clear that it was their understanding that under the "own resources" formula the Communities had an absolute right to the yield of both customs duties and food levies in Britain.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

Surely the amount the present agricultural system in this country costs us is determined by market forces, and the levels of the deficiency payments are never brought before Parliament. Will the right hon. Gentleman explain the difference between the Community system in relation to the powers of this House and the present system?

Mr. Shore

The hon. Gentleman is being a little naïve. I am sure he understands the matter perfectly well. One of the major differences is between an internal transfer cost and a balance of payments cost. That is an important distinction, and by no means the only one, between the two.

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

Surely the right hon. Gentleman would agree that these sums under our domestic policy have to be voted, appear in Estimates, and go through the whole parliamentary procedure on the control of money.

Mr. Shore

The right hon. Gentleman has made the second—indeed, he may think the first—important distinction between the two forms of payment, but I think we have established that. This is particularly worrying when we view all this and our inability to take control over the open-ended nature of these payments and look not only at the reality of the situation but at the whole philosophy of the Community and the Government's acceptance of it as expressed by the Chief Secretary on 22nd February. His words will be familiar to us all. Referring to the levies which will be imposed and our own customs duties, the hon. Gentleman said: these do not in reality belong to member countries but flow through, in our case, the Consolidated Fund to the Communities."—[Official Report, 22nd February, 1972; Vol. 831, c. 1148–9.] They just flow through. At the time we were all arrested by the image of money flowing through the British people directly to their new tax masters in Europe. [Hon. Members: "Oh!"] I am afraid this is so. It flows through under self-enacting regulations and tax powers which hon. Members, if they do not wake up in time to resist, will see.

Mr. Douglas Jay (Battersea, North)

They will never wake up.

Mr. Shore

I turn to the second point made by the hon. Gentleman. Because it flowed and was no longer the property or under the control of the British Parliament and people, he said: I suggest that an annual Vote in these circumstances would be wholly inappropriate. It would not recognise the reality of our obligation."—Official Report, 22nd February, 1972; Vol. 831, c. 1148–9.] That is the whole point. The hon. Gentleman expressed the matter fairly, and I congratulated him at the time on doing so. But let us have no doubt that the control over these sums is virtually negligible and that the amounts involved are completely open-ended.

The situation is that we are dealing with expenditures whose size we do not and, according to the Government, cannot know or control with the necessity to make a contribution to it which can be altered in both amount and composition by agencies over which we have little and, in some instances, no control. All we can do in the end is to mount a toothless post-mortem on decisions of which we shall have become little more than a spectator.

All this is intolerable, first because we are assuming a burden which this nation cannot carry. I spoke earlier of the £725 million which the Government admit to be the size of our reduced contribution in the first five years. They know, although they will not admit it, that in the following five years the figure will be much bigger, at least double, and far more likely to be of the order of £2,000 million—a rate of £400 million a year for the next five years. In other words, by our own decision we shall have inflicted upon ourselves the obligation to pay to the continent of Europe over the next decade a sum equal to the whole of our outstanding official sterling balances which the Committee will realise is the accumulation of debts which we sustained in our effort to fight the Second World War. When one considers the magnitude of this burden, it is such an act of folly that I cannot find words adequate to describe it.

The second reason why it is intolerable is that, if it was possible for us to contribute across the balance of payments something like £2,500 million, adding the two together, in the next 10 years, there are many other purposes upon which sums should be spent than to increase the prosperity of already prosperous nations of the Continent of Europe. When I note that about 90 per cent. of all Community expenditure is on the support of agriculture and when I further note that more than half of all the money involved has been given to European farming as compensation for sales in third markets at dumped prices—when I reflect upon that, the whole system appears to be, as it is, not only grotesque but immoral. It is utterly wrong that this country should join with Europe in paying farmers, under the CAP, to over-produce rice in Europe which is then dumped, to the tune of 60 million dollars a year, on third markets, in competition with the poor rice-exporting countries of Asia and elsewhere. It is immoral; that was the word I used.

4.30 p.m.

In conclusion, we are seriously contemplating paying, as I said, across the balance of payments, what will be by the end of this decade a sum greater than our contribution to the developing world, the public expenditure component of the 1 per cent. of GNP. We shall be paying a bigger sum to Western Europe than to all the developing nations of the world. I find it absolutely intolerable as a proposition that we should do this, on the broadest ground of our own interests as well as the interests of the peoples for whom we still have some responsibility.

I turn now to my third reason why these arrangements are intolerable. They are intolerable—I have no doubt that others will speak more to this than I—because no British Parliament has the right to transfer to others the power to tax the British people. Only a Parliament that had lost its self-respect could, in the light of British history, consent to a tame transfer, not just to an executive but to non-elected institutions in Europe, if the power which is fundamental to the freedom of this country and to its practice of democracy.

If I appear to labour these points, it is because on this matter, at any rate, we have to address not only the Chancellor of the Duchy, the Solicitor-General and the Chief Secretary but the President of France and the governments of the other countries involved. Let them have no doubt about this matter. We have never consented to these arrangements. We do not accept these arrangements. We shall not abide by these arrangements. We have no illusions about the difficulties that we shall face.

Sir Anthony Meyer (Flint, West)

Will the right hon. Gentleman give way?

Mr. Shore

We know very well that the reason why these disadvantageous terms—

Sir A. Meyer rose—

Hon. Members

Sit down.

Sir A. Meyer

On a point of order, Sir Robert. Is it not a gross discourtesy to the Committee, when my right hon. and learned Friend invariably gives way—

The Chairman

Order. The hon. Gentleman is seeking a wrong way in which to raise a point of order. He must not do it like that, and he knows that.

Mr. Shore

I think that it is well understood in the Committee by those who have regularly attended it that since the guillotine was imposed we have had to discipline the number of occasions on which we give way, particularly to those who voted for the guillotine.

I have said that we know very well that the reason why these disadvantageous terms have been imposed is not simply the weakness of the present Government's negotiations but the fact that they took place under the threat of a third French veto. That is the truth of the matter.

French Ministers have recently confirmed, in their referendum campaign on the issue whether Britain should be allowed to join, which they took to the people of France, that the main reason, as they put it, why they lifted their objection to our entry was precisely the willingness of the present British Government to accept total French demands. If we had any doubt about the matter, we learned only yesterday from M. de Lipkowski at the Western European Assembly of their toughness about this and how much they attach to the agricultural policy. He said: We must not relax our vigilance on the common agricultural policy. If we let it collpase, we should have lost the backbone of Europe. That is a classic example of the French identifying their own national interests with what they conceive to be the interests of Europe and of the world.

We know and recognise how toughly and strongly they are committed; but, equally, they should have no illusions about our resolve. In voting against the subsection today and for the Amendment to delete it we are issuing once again a serious and measured warning to the governments of Europe that Her Majesty's Opposition, on behalf of the British people, whose will and wish have yet to be tested, reject these burdens and will seek to remove them at the earliest moment.

Mr. Powell

When the Committee, during the limited time permitted to us, disposed of the previous two subsections of the Clause, we abrogated the legislative independence and supremacy of the House of Commons. By adding those two subsections to the Bill, at any rate provisionally, we gave up, over a wide area, the right to legislate in due form or, indeed, to legislate at all.

What we come to in this subsection is a matter of no inferior importance. Indeed, the control of the House of Commons over expenditure, over the expenditure and the borrowing of the Government of this country, is not subordinate to its legislative power; it is the historical matrix from which that legislative power grew. It was the power of the House of Commons to control expenditure, the necessity on the part of successive Governments to come to Parliament if they wanted to borrow and to spend, which enabled the House of Commons to build up over the centuries its legislative supremacy and its responsibility and right to speak for the people of this country.

In this subsection, therefore, we come to an issue which perhaps exceeds in its constitutional importance even those of legislation, which we have considered in connection with the previous two subsections. As we examine, as the Committee ought to do in detail, the provisions of this subsection, we shall find that with each successive phrase a constitutional principle is destroyed and sacrificed; a whole chapter of our constitutional rights and law is lost with each passage between commas in this subsection as it is printed in the Bill.

I ask the Committee to be patient enough to study these phrases separately and in succession. The first phrase refers to the making of payments to any of the Communities or member States and it enacts that "the amounts required" to do that shall be charged upon the Consolidated Fund. The plain meaning of that is that the expenditure which is necessary to make payments to the Communities or to member States is no longer to be dealt with as Government expenditure has been dealt with heretofore. It is not to be presented to the House of Commons in the form of Estimates. It is not to be debated by the House of Commons under the forms of Supply. It is not to be appropriated by the House of Commons. We are to be neither informed in the manner to which we have been accustomed; nor are we to be allowed to debate these sums; nor are we to be allowed to vote them.

The right hon. Member for Stepney (Mr. Shore) was complaining of the paucity and the doubtfulness of the estimates, which the Government had made, of the sums that would be paid in this way in the first financial year concerned and in subsequent years. It is all very well for the right hon. Gentleman to ask for estimates. But the purpose of this subsection is to ensure that the House of Commons is never given estimates. That is what it says in terms. We are never to be given estimates of the sums which are to be paid in this way; and I thought that my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) brought out very acidly a very important point when he elicited the contrast between these payments and our present internal agricultural arrangements, where, however difficult it may be for the Chancellor of the Exchequer to estimate what the cost of agricultural support is going to be, he has to put in an Estimate, and if he turns out to be wrong has to come back for a Supplementary Estimate, and stand the criticism of the House at every stage if the House wishes to criticise.

So, in the first element of this subsection we say that, not for a short period of time but for ever, these payments are not in form to be brought before the House of Commons at all. One can put it another way, and say that this is the last legislative Act the House of Commons is ever going to perform in relation to payments to be made by the Government to the member States and to the Communities.

I remember as a new Member of the House being taught, under the tuition of the learned Clerks, how many keys had to be turned in the locks before the money voted on behalf of the taxpayers could be paid out by the Government. This is the last turning of the last key for ever. After this subsection is in the Bill, there is not even a door—certainly none which the House of Commons can control.

I was fascinated by the quotation which the right hon. Gentleman made from the speech of my hon. Friend the Chief Secretary to the Treasury on 22nd February when my hon. Friend said that such and such a proposal was not "in the wind". But this subsection is not limited in time. I am not merely complaining that there is not an annual limitation, though annual vote and appropriation has been the basis of the financial control of this House hitherto. What I am bringing to the attention of the Committee is that there is no time limit whatever—that, whatever is "in the wind" at any time in future, no further legislative act is necessary to authorise the payments which it will require. Never will any future Government have to come back with an Estimate, for a Vote or, still less, for legislation.

Sir A. Meyer

With deference to my right hon. Friend's great knowledge, may I ask him whether he is maintaining that by passing this sub-section we are inhibiting the House of Commons in future from altering these arrangements if it so wishes?

Mr. Powell

We shall have opportunity at a later stage to debate how far we are, either in practice or in form, binding ourselves in this Bill for the future. But it is a poor argument for or against what is being done in a Bill to say. "But this can be changed if it is not satisfactory." I am saying that on the face of it it is not satisfactory; and I will add that year by year, as this remains in force, if it ever comes into force, it will appear more and more impracticable and impossible ever to revert to the constitutional forms which we are deliberately destroying in this subsection.

Now I come to the second phrase, which charges upon the Consolidated Fund any Community obligation in respect of contributions to the capital or reserves of the European Bank, and any loans to the bank. I must confess here that I think that my right hon. Friend the Member for Thirsk and Malton (Sir Robin Turton) perceived and expressed by his Amendment an important point; for it is true that constitutionally we have always regarded it as appropriate that loans and the service of loans should be charged upon the Consolidated Fund. So far at least as the service of loans is concerned, once the obligation has been accepted, then, of course, it follows as a matter of course that the consequence must be fulfilled. So, in a technical sense—and we shall have to express an opinion on it later this evening—my right hon. Friend was probably right to distinguish this element of the subsection from the others. Yet it is still grossly defective, and in this important respect—that never before has the House of Commons given to the Executive the power to advance capital sums without limit. Of course, there are dozens of Statutes on the Statute Book which contain the power to raise and to advance sums. The nationalised industries are financed on this principle; and, significantly, the best opportunities the House gets to debate the nationalised industries arise whenever it is necessary for the Administration to come back for more power to lend them money.

4.45 p.m.

[Mr. E. L. MALLALIEUin the Chair]

Let hon. Members realise that there will be none of that so far as these capital sums are concerned. There will be no question of an Administration having to explain, let alone justify, let alone quantify, the size of the capital sums which are to be advanced. Once this subsection is in the Bill, there will be none of that. It will be a matter in which the House is entirely short-circuited and bypassed. We shall no longer have the power, which we historically always have had, to control the lending of the Executive as well as the borrowing.

Indeed, it is the next phrase—and a very ominous one, too—which brings us from lending to borrowing. I ask the Committee to look narrowly at these next words: …the amounts required…to redeem any notes or obligations issued or created in respect of any such Community obligation… that is, of any Community obligation either to make payments to the Communities or Member States or to make capital contributions. What this is saying is that there is to be charged on the Consolidated Fund everything that is necessary to enable the Government to raise loans, to incur debts. It says that the Government can issue Government securities, short-term and long-term, floating and funded, without any limit specified in the Bill, provided that they are "in respect of" the Community obligations described in the earlier part of the subsection.

Hitherto, in examining this Clause it has been literally correct to say that we were being invited to go back beyond the 17th century, that we were being invited to undo all the principles of control over the Executive which were established in the struggles of the 17th century. But here we are going much further back, because the very germ of parliamentary control arose out of the consequences of borrowing by the Executive.

In what we are doing in this part of subsection (3), we are not merely going back beyond the 17th century; we are going back to the 13th and 14th centuries. Henry III and Edward III used to raise great loans and then, when they found they were unable to satisfy their creditors, they came to Parliament and said "You must get us out of this". The House of Commons soon realised that it was no good just controlling the current expenditure of the Government, but that unless it could also control the borrowing of the Government, it had lost control over the policies, the behaviour and the finances of the State. So it was in the very earliest stages of the evolution of the financial control of the House of Commons that the borrowing of the Executive was put firmly within the control of the House.

Until this moment all borrowing by the State is authorised specifically by Parliament. I realise that the operations on the floating debt are authorised by standing Statutes; but all the funded debt which is incurred by the Government hitherto can be carried back to specific statutory provisions which authorise them to borrow and tell us for what purpose they are authorised to do so. With this phrase, all that will be gone. With this phrase—and this is its purpose—the Government can issue notes and create obligations in respect of payments, capital and current, to be made to the Communities. These are to be charged on the Consolidated Fund and no more will be heard of the matter legislatively in the House after this Clause is passed. These are the three fundamental erosions of the very pillars of the control and the authority of the House of Commons.

Mr. Ridley

I do not quite see my right hon. Friend's argument, because we borrow, presumably, from the British public and the International Monetary Fund under some past Statutes which give authority so to do. I see no difference between those Statutes and this projected Statute in that, once they are all enacted, the Government are free in all cases to raise such sums as they so wish according to the Budget.

Mr. Powell

Once again my hon. Friend has really conceded the point, because he used the words "such sums". "Such sums" in the proposition which he is putting to us are the sums which Parliament by Statute has authorised the Government to raise. My hon. Friend also referred to sums being authorised in the Budget. But the Budget is the beginning of the cycle of parliamentary control of expenditure. The point of the words in the Bill is that they take borrowing for Community purposes out of the scope of these forms of financial control, which my hon. Friend, because he is so good a parliamentarian, cannot help mentioning because it is the only vocabulary in which he, like the rest of us, can talk about these matters.

I direct attention now to yet a fourth innovation which is taking place. I would carry the eyes of hon. Members to subparagraph (b) of subsection (3), which is concerned with the sums which, hopefully, are going to be paid into the Consolidated Fund, which are going to be "received under or by virtue of the Treaties". They are to be paid into the Consolidated Fund "save for", and I ask the Committee to look at this phrase: such sums as may be required for disbursements permitted by any other enactment". Not even "permitted or required for Community purposes" but "permitted by any other enactment." That means that it will be possible, in effect, to appropriate in aid sums received by the Treasury, by this country, "under or by virtue of the Treaties" and offset them against any other kind of Statutorily authorised expenditure whatever.

Here again we breach a most important principle, namely that the receipt of sums by Government is as jealously watched over by the House as the disbursement of sums; for, if a Government were able to disburse sums which we had not authorised to be received or raised, then to a large extent they would have escaped from that control of expenditure which it has always been our purpose to exercise. That is why a Ways and Means Resolution is as much required for a receipt as it is for a disbursement. That principle too is abrogated in paragraph (b) of this subsection.

Finally, I come to paragraph (a), which is the one exception. It is the one authorisation in due parliamentary, constitutional form and, it speaks of expenses which: may be paid out of moneys provided by Parliament. Those are the magic words which invoke all the panoply of parliamentary financial control. What are these "other expenses"? They are not any of the expenses set out above in the subsection. Obviously there will be incidental expenses, administrative expenses; but I believe that these "other expenses" go beyond that. There is no provision so far in this Clause for payments made "under or by virtue of the Treaties" to individuals or to firms, or indeed to anyone but the Communities, the member States and the institutions set out in the preceding lines. Yet there are many payments already, and there will be many more in future, which will fall to be made by the Government "under or by virtue of the treaties" to individuals and the rest.

I refer again briefly to the case reported in the week ending 19th May, the case of Signora Leonisio before the European Court: In its judgment the court declared that the Council regulation was directly applicable and that it created rights for individuals which the national judge was under obligation to uphold. Payments to creditors accruing from such regulations became due once the prerequisites laid down in the regulation had been complied with". Now, it may be that the particular payment would fall under Clause 6, as part of the common agricultural policy in the widest sense of the term—I think not; for I cannot in Clause 6 find anything which would cover this kind of payment—but what is quite certain is that under the further policies in which we have been told the Community will be encouraged to engage, large payments will have to be made from time to time—for example, in connection with a regional policy—to individuals and firms and to recipients other than the Communities, the institutions of the Communities and the member States. All these payments, therefore, whatever they are for—my hon. Friend the Chief Secretary may later inform the Committee what they consist of or may consist of—will be paid out of moneys provided by Parliament. Are my hon. and right hon. Friends going to say that this is all right because they are optional payments? I think not. They would be hard put to it to say that the payments which fall under paragraph (a) are a filigree, a luxury, an optional expenditure which is entirely within the control of our Government. They know perfectly well that the payments falling under paragraph (a) are just as much or as little a necessity "under or by virtue of the Treaties" as any other of the payments with which this subsection is concerned.

So the Government have given away their case for this subsection by paragraph (a). They have admitted that it is perfectly feasible to apply the normal parliamentary procedures of control to disbursements which have to be made "under or by virtue of the Treaties". We found this before. In discussing the provisions of the previous two subsections of this Clause we found that the Government had admitted by the drafting of their own Bill, as did the Prime Minister in the Second Reading debate, that the Bill could have been drawn otherwise, that it could have been drawn so as to preserve the parliamentary control of expenditure in form. That cannot be denied.

5.0 p.m.

But it is not only in form, and here I come to the last point; it is also in substance. The reply which we are accustomed to receive at this point from my right hon. and learned Friend is that since the treaty is binding upon us, either directly or in principle, it would merely be a formality if we nevertheless insisted upon the proper forms of parliamentary control. My right hon. Friends say "There is no real problem; for you will be told about all these things long before they happen. You will be shown accounts. Probably the Commission will produce accounts which could be obtained through the Vote Office by special arrangement and special courtesy. What is more, out of our superabundant generosity we will occasionally arrange a debate. Normally we will expect it to be in the Supply time of the Opposition; but now and again the Government might be generous enough actually to invite this House to debate some of the budgetary arrangements, some of the expenditures of the Community." Therefore, they ask, what is the difference?

There is a world of difference when the forms which have to be complied with require, first, a full statement in advance to this House of what is required; secondly, an explanation of what is required; and, thirdly, a vote of this House, which, even though it may realise that the vote is implicit in membership of the Community, nevertheless involves a reality of debate and a reality of examination which cannot be obtained in any other way. We are not this afternoon arguing about tradition and forms; we are arguing about the substance, and we are doing so all the more because of the nature of the bodies which will be taking these decisions, which will be incurring these expenditures, and to which we shall be making these payments. If at any time in the past, over these many hundreds of years, a Government had come forward with a Bill to do what subsection (3) does, they would have been received not with anger or mockery but with incredulity. It would not have entered the thoughts of any Government to deprive this House so comprehensively as this subsection does of our powers of financial control. Yet that would have been, in my imaginary case, the arrogation of powers to a British Government; it would be a shift as between this House and the Executive of this country.

Mr. Neil Marten (Banbury)

That is what they want.

Mr. Powell

That may well happen, too; but the essence of this subsection and of the form in which deliberately and intentionally it has been drawn is to transfer those powers not to the Executive here but to an Executive over which Her Majesty's Government will have no control and over which they will have only a varying degree of influence. How much more incredible, therefore, must it then be if we were to show ourselves willing to give up what our predecessors have gained over so long a period of time?

As so often, we find in these debates that in the end it is not really a debate between those who are for or against what is miscalled "Europe". This is a debate for or against Parliament, for or against the House of Commons. Parliamentarians on both sides of the Committee, those who are in favour of British membership or association and those who are opposed to it, will be just as much in support of these Amendments. I ask them, when they come to cast their vote on this, to remember that it is not form but substance about which we decide and that we do, demonstrably on the face of the Bill, have the choice both of form and of substance. We ought to exercise our choice as true parliamentarians.

Mr. Jay

I wholly agree with the right hon. Member for Wolverhampton, South-West (Mr. Powell) that this subsection strikes at the root and substance of parliamentary Government and as it stands it is a constitutional outrage which has been presented to the Committee. I also believe that the declaration which my right hon. Friend the Member for Stepney (Mr. Shore) has made, that no Labour Government would ever in any circumstances accept these arrangements, will be widely applauded throughout the country.

I want to supplement what my right hon. Friend said about the economic damage implicit in the Clause. This subsection would be responsible for the main economic injury which would be done in this country just as Clause 2 and the subsections we have already discussed would be responsible for a great deal of the political damage. If these subsections were allowed to go through in this form a crippling burden would be placed from 1973 onwards on the United Kingdom's balance of payments, which is already moving into the red, and which would inevitably deteriorate thereafter, year by year, as the financial burden steadily rose.

This is, therefore, an appropriate moment for the Committee and the country to abandon the complacency which is all we get from Ministers about the economic prospects implicit in the Bill and in these policies and to realise the economic dangers into which we are being led. This subsection, together with the Treaty of Accession, would extract by 1978, at the end of the transitional period an annual sum of about £500 million by way of indirect taxes, mainly food taxes, from the British consumer and channel it across the exchanges to the EEC budget. The figure I gave of £500 million is probably an under-estimate, even for 1978.

As long ago as February, 1970, and before food prices had risen very substantially, the Labour Government's White Paper put the figure at about £400 million prospectively for 1977. The Chancellor of the Duchy presented his own official estimate to the EEC in July, 1970, although he has never admitted doing so in this House. The subsequent negotiations have not materially affected the situation as it will be at the end of the transitional period, and he estimated that by the end of 1978 the United Kingdom would be paying 45 per cent. of the total food levy income of the enlarged EEC and 31 per cent. of the total of the whole EEC revenue. That is an outrageously unfair proportion for this country.

The right hon. and learned Gentleman also estimated the total net contribution of the United Kingdom after generous allowances for repayments, at $1,100 million or about £470 million. Since then food prices in the EEC have risen even further and no firm guarantees have been obtained from the Community about return payments for development areas or for any other purpose in this country on the scale hoped for by the right hon. and learned Gentleman. It is clear enough, therefore, that the right hon. and learned Gentleman's estimate of £470 million in 1978 must be regarded as an under-estimate, and even if we optimistically accept this outdated figure the economic burden on this country would be intolerably heavy.

Three main consequences follow if the subsection and the annual tribute are allowed to be enforced on this country. First, higher food prices would make it certain that the burden of entry would be paid mainly by the poorest sections of the community in this country. We have had an up-to-date estimate of this from Mr. T. E. Josling, who is, I believe a pro-marketeer. In his book "Burdens and Benefits of Farm Support Policies" he concludes that the reason why the costs of the CAP would in this country fall so heavily on the poor is because it would be felt largely that a rise in the price of food bulks particularly large in low income budgets. This process has already begun.

Mr. Eric Deakins (Walthamstow, West)

It does not require the attention of an economist in a book published recently to point out what has been obvious to most of us on the Labour benches; namely, that any rise in food prices as a result of the CAP would undoubtedly hit the poorest sections of the community.

Mr. Jay

Anyone should see that but it seems to need an expert to drive it into the heads of some hon. Members. The rise in food prices since the Government took office, already over 17 per cent., and the present beef prices, are very largely an effect of the Government's incipient Common Market policies—the levies already enforced and the remarkable decision by the Minister of Agriculture only last week, not to ban the export of beef from this country, which would have been an obvious short-term solution to the crisis. As food prices rise the public are beginning to learn what entry into the Common Market means for ordinary people.

In my judgment retail food prices are likely to be at least 50 per cent. higher by 1978, even if we do not accept these arrangements. We have just heard from an expert in the baking industry that a 40 per cent. to a 100 per cent. rise in bread prices is likely when these arrangements come fully into force. It is a fascinating fact that the £500 million or so a year tribute which has to be extracted from the British family by means of consumer taxes is only about half the annual sum officially estimated to be lost in France through evasion of income tax.

5.15 p.m.

The French National Institute of Statistics estimates that about £1,100 million, or one-third, of French income tax revenue is lost through evasion every year. So the truth is that if only half the tax revenue illegally evaded by the French ruling classes was honestly collected there would be no need for this annual payment by the United Kingdom. We have learned only recently the interesting fact that the French Prime Minister pays no income tax. The poorer British taxpayers are being asked to subsidise not merely inefficient continental agriculture but mass tax evasion in France and Italy as well. When this is properly understood I believe that most people in this country will regard it not only as ludicrous but as utterly indefensible.

The most serious consequence for this country, I believe, is the threatened burden which we are now incurring on our future balance of payments. The first consequence in balance of payments terms of joining on these conditions will be abudget payment across the exchanges starting at the end of the transition of about £500 million a year. But this is only the start and in itself it less than half the total burden which will be incurred. Next comes the loss to this country on visible trade for items other than food. The net trade loss resulting from higher industrial costs due to higher living costs, the loss of free entry or preference throughout the Commonwealth and EFTA, and the worsening of our trade balance with the EEC was estimated in the Labour Government's White Paper at about £200 million. Here again the Chancellor of the Duchy has made an estimate to help us. On 16th December, 1970, he estimated that this burden would be between £200 million and £300 million a year; that is, after allowing for higher exports to the EEC. I believe that is an under-estimate, but let us accept the right hon. and learned Gentleman's figures at, say, £250 million.

So far that is an extra burden on the balance of payments of over £700 millions a year after the transition period. In addition, there will be the higher import cost of food and feeding stuffs which will have to be bought from the EEC instead of from cheap and efficient producers in the rest of the world, and the much higher prices for the food we already buy from the EEC.

Since grain, sugar, meat and dairy produce prices in the EEC are now 30 per cent., 50 per cent. or even 100 per cent., higher than world prices, this item cannot be put realistically at less than a further £200 million a year. Even that allows for a forced reduction in food consumption by the British public as a result of the higher prices. The February, 1970, White Paper put that item at about £170 million before the widening of the gap between EEC and world grain prices which has occurred since.

On current balance of payment account alone, without allowing for capital exports, the prospective extra and unnecessary burden in the United Kingdom after the transitional period cannot with any semblance of honesty or realism be put at much less than £1,000 million a year. In addition, since all restrictions on capital exports to the EEC would also be removed, the total burden must be a good deal higher, and, since sterling would be weakened by the current account deficit, it would probably be very much higher as a result of capital movements.

Therefore, the Committee should realise what all this means and should not continue to blind itself to these facts, as the Government apparently are doing, and ignore the inevitable consequences of what we are being asked to undertake. If the Committee accepts this subsection and all it implies, these burdens would begin to be felt in 1973 and 1974.

It so happens that the National Institute for Economic and Social Research only this week published the fact that it expects the United Kingdom's current balance of payments surplus in 1973 to fall to a very small figure—a reduction from £950 million in 1971 to only £250 million in 1973—and that it expects a prospective larger deficit in 1974. If one adds that to the rising burdens in the EEC which I have described, the prospect after 1973 is for a mounting overall deficit which would gravely weaken sterling and bring economic growth in this country nearly, if not completely, to a stop. No British Government in those balance of payments circumstances would be able or willing to stimulate the sort of consumer boom needed to achieve rapid economic growth.

Some people lightheartedly try to escape these conclusions by blithely suggesting that if all this happened all that we would have to do would be to devalue sterling once again. But under these arrangements if we join the EEC food prices will be fixed in dollars or units of account, as they call them; and if we devalued in these circumstances in this strait-jacket we would automatically raise our internal food prices still further. This would give a further twist to the decline in living standards and to the rise in our industrial costs, indeed to the whole vicious spiral process in which we would be involved.

Secondly, if we try to devalue, we should be caught up in what is the EEC's worst folly of all—more rigidly fixed exchange rates, ending in complete monetary union. We should have lost the freedom to devalue without the permission of the Brussels authorities whose professional prejudice would be against allowing countries to do so. In those circumstances there would be no solution other than drastic deflation and the end of all prospects of economic growth for a long time ahead. The fact is that the whole package of economic policies involved in this settlement which is to be enforced in this subsection is a recipe for economic decline for this country, just because these policies were never designed with the interests of this country in mind.

It is time that the Committee realised that this is the sort of situation into which the policy of the Government and the provisions of the Bill are leading this country. What the Government are doing—the Committe can judge this from the speeches we have had from Ministers ever since these debates started—totally ignores all realistic estimates of the balance of payments prospects and they are taking refuge in a few soothing platitudes and pious hopes.

It is not good enough to assert that all the estimates made by my right hon. Friend are wrong and much to pessimistic. If Ministers want to be taken seriously they must advance serious arguments to show how, why, and by how much these estimates are wrong. So far they have entirely failed to do this and, in my view, are merely misleading the Committee and the country at large by irresponsibly refusing to apply their minds seriously to the problem.

If these policies are pursued, then I believe that when in 1973 and 1974 and thereafter the country wakes up to what is really happening there will be no kind feeling of forgiveness for Ministers who have led the country into that situation. Since the heart of the whole mischief is the EEC's outrageous common agricultural policy, which gets more costly with every year that passes, and since that policy is in turn enshrined in this subsection, far the best thing for the Committee to do in the interests of our national future is to reject this subsection.

Mr. J. Selwyn Gummer (Lewisham, West)

There have been certain similarities in the way in which these matters have been dealt with by the right hon. Member for Stepney (Mr. Shore) and the remarks of the right hon. Member for Battersea, North (Mr. Jay). The similarity does not arise in each sentence but in the cast of the argument. It is the difficulty of the double argument which has been shown so clearly in speeches by the two right hon. Gentlemen.

The righthon. Member for Stepney seeks to suggest, when speaking from the Opposition Front Bench, not that there is something wrong in the agreement to enter the EEC, but that there is something particularly wrong about the agreement which has been made. He finds the argument a little difficult and uses a technique which, if superficially heard, is extremely effective but which, in fact, is wrong. That technique is to suggest that what we are doing is coming to an agreement with some kind of foreign body with which we have no connection and that somehow or other—[Interruption.] If hon. Members will allow me to develop my argument, perhaps they themselves will be able to make speeches and disagree with what I have to say.

5.30 p.m.

The right hon. Member for Stepney spoke about our new taxing masters. He mentioned not our rôle as part of the Community but our being taxed by new taxing masters. The whole suggestion must be that the Committee and the country should voluntarily give up powers not to a community or to ourselves in association with others but to some kind of dangerous foreign organisation no doubt supported by the evil French or by the Italians, who were singled out by the right hon. Member for Battersea, North.

It is important for us to underline this factor because often the efficacy of statements derive more from the conditions in which they are made than from the statements themselves. The context is to build up in the minds of the British people something which is rather curious for an Opposition Member to do—namely, a kind of narrow nationalism of fearing the foreigner. [Hon. Members: "No."] Anybody who has sat through these debates as long as I have will agree that that is what is being done. This is a thoroughly reactionary and dangerous thing to do, particularly when the Labour Party has always set itself out to be an internationalist party.

The right hon. Member for Stepney expressed what he called genuine surprise. He has expressed surprise often in these debates, and whether on those occasions it was genuine we do not know, but on this occasion he expressed genuine surprise at the existence of this provision and at the fact that there should be reference to "own resources"—

Mr. Shore rose—

Mr. Gummer

It would be more sensible if I were to continue my remarks. I will give way to the right hon. Gentleman a little later.

The fact is that the "own resources", to which the right hon. Gentleman referred, was something which the present Government and the Labour Government originally did not want. The right hon. Gentleman referred to a waiver. I do not know upon what he bases that suggestion.

Mr. Eric S. Heffer (Liverpool, Walton)

Will the hon. Member for Lewisham, West (Mr. Selwyn Gummer) stop quoting my right hon. Friend the Member for Stepney (Mr. Shore) and then refusing to give way? There is a rule, which the hon. Member will know when he has been here as long as I have, that if in a speech a reference is made to an hon. Member and the Member concerned intervenes, he is allowed to make his comments. The hon. Member must not ignore my right hon. Friend.

Mr. Gummer

Although the hon. Member for Liverpool, Walton (Mr. Heffer) has been in this House longer than I have, he has not sat through these debates as long as I have. Had he done so he would know that his right hon. Friend the Member for Stepney has refused to give way to those he has directly attacked. However, when I have completed what I have to say on this point, I will gladly give way to the right hon. Gentleman.

The fact is that there has been no statement from the Government that we have wanted a waiver of the "own resources" provision. All the statement said was that we would work together to find a solution to the basic problems which arise through the financing of the EEC. I suggest that the "own resources" part of this proposal is an essential, important, vital and valuable factor.

If we are to join a Community which is to have no life of its own and is unable to make any of its own decisions, we are joining a Community which is not able to carry out the things which many of us believe it should carry out and the things which are essential and basic to the European ideal. If the Community is to have no resources of its own it will be permanently unable to create the kind of association in Europe which has so often been proposed by the Leader of the Opposition and by my right hon. Friend the Prime Minister. But if the Community is to have a life of its own, it has always been agreed that it should have some resources of its own.

The proposition has been advanced that we have no firm figures for the period after the ending of the transitional period—in other words, that there are no proper budgetary figures for 1980 and beyond.

Mr. Shore

I rose originally in order to save time and to remind the hon. Gentleman that what I said about being "particularly surprised" related to the lack of the three-year estimates on budget expenditures which the Commission had proposed to produce, reference to which was made in the Luxembourg decision of 21st April, 1970. The hon. Gentleman should be corrected on that point.

On the "own resources" argument, I think that there are great objections to "own resources", especially to the package of "own resources". Indeed, those objections were held just as strongly by the hon. Gentleman's Government when they opened the negotiations as undoubtedly they would have been by my party had we been in charge of negotiations at the time. But if the hon. Gentleman has any doubt about it, may I refer him to the statement by the Chancellor of the Exchequer in Luxembourg, in the course of which he said: We were not a party to your agreement of April, 1970. He said that if we had been the position would have been different. He went on: If I appear to labour the point, it is only because, unless a solution is found, the burden on the United Kingdom could not be sustained and no British Government could contemplate joining. That was the Chancellor's statement and not ours. The tragedy of these negotiations is that the right hon. Gentleman swallowed the words of the right hon. Gentleman who preceded him.

Mr. Gummer

If I may interrupt the interrupter, we now see why I drew attention to that very phrase. The right hon. Member for Stepney misquoted it. He used the word "waiver". That does not appear in the phrase. I submit that there is a difference between a demand for a waiver and a demand to find a solution together to this basic problem. I am sure that on reflection the right hon. Gentleman will agree that there is a difference between the two. The argument of my right hon. Friend the Chancellor of the Exchequer was that we had to come to an agreement which was satisfactory to both sides and which would mean, and has meant, a long transitional period.

It is true that we were not a party to these argreements. How sad it is that we were not. If it had not been for the opposition of right hon. and hon. Members on both sides of the House early on, we might have been. Having not been a party to those agreements—[Interruption.] I am addressing myself to the remarks in respect of which I gave way to the right hon. Member for Stepney. It was the hon. Member for Penistone (Mr. John Mendelson) among others who demanded that I should give way to the right hon. Gentleman.

The real argument is not against the fact that there will be "own resources" in the Common Market. It is not against the common agricultural policy. These were facts recognised and accepted on all sides for some time. It could be argued that there is something in the nature of the negotiated terms which makes the deal so enormously bad for us that we are unable to accept the terms—

Mr. Jay

Hear, hear.

Mr. Gummer

The right hon. Member for Battersea, North, says "Hear, hear". But that is not his argument. His argument is that the common agricultural policy is wrong and that no terms would be suitable. However, his own Front Bench say that the common agricultural policy is acceptable. I believe that the Leader of the Opposition has said as much. The Front Bench opposite argue that the deal that has been done is unacceptable. That is the distinction.

Even here, the argument falls down, because it ignores the fact that the common agricultural policy is admittedly the one area of complete common policy which so far has been carried out and that we shall be having similar areas of regional policy, for example. I believe that the right hon. Member for Stepney referred to this matter. He said that we should have negotiated that before coming to an agreement. I find that very odd. If it is wrong to have a common agricultural policy which ties this country to the payment for that policy and gives to a central authority powers which hitherto we have had exclusively to ourselves, it seems equally odd to get round that problem by having another common policy and doing the same. If it is constitutionally unacceptable to run a community in this way on a common agricultural policy, surely it is even more constitutionally unacceptable to run it in this way on two or three.

I believe that we should be better advised to remember that we are here giving an earnest of the fact that we are becoming part of a Community and that that Community will have resources partially chosen individually by each of the countries and partially "own resources" which will be used together for the benefit of the whole community. What is sad is that right hon. and hon. Members who are rightly concerned for the aid that this country gives to those who are less well off than ourselves always exclude those who are less well off in Italy and Southern France.

This subsection, far from being objectionable and far from being one that we should delete from the Bill, is the absolute kernel of our case for entry. What it does is to say that this country, having developed over the years a system and method of organising itself not as individual countries living totally separately but first as a Kingdom in Britain and then in Scotland, and having built up a system which works for us, will now move into a wider and more valuable association in which we shall be part of a community. This continual insistence that increasingly we shall be a spectator of something which will go on outside ourselves is to describe not the situation when we have entered the Common Market but the situation if we were not to enter.

The one way of ensuring that we have very few of our own resources and that increasingly we are a spectator is to make sure that we do not pass this subsection and do not take part in a growing community, not where we are ruled by "tax masters" but where we are in association with our neighbours not only using our own resources as a community for the creation of a better standard of living for the people of Britain and Europe as a whole but using that wealth which comes from this association for the real development which is necessary in this world, which is the development of the whole world. That development will come about only if we use our wealth and unity in Europe satisfactorily.

Mr. Raymond Fletcher (Ilkeston)

I am afraid that I cannot accept or follow any of the speech of the hon. Member for Lewisham, West (Mr. Selwyn Gummer). It was an excellent performance, thoroughly qualifying for membership of certain sections of these benches, but it had nothing to do with the Clause that we are discussing and the Amendment at present before the Committee.

What we are discussing, and what I intend to discuss, is one of the two major themes which have run through this debate like a broad red thread ever since the Committee began its deliberations. The first theme was stated, as usual, clearly by the right hon. Member for Wolverhampton, South-West (Mr. Powell). We are not discussing the price of lamb cutlets in Paris. We are discussing the future of this Parliament. We are also discussing another majestic theme, which is that of no taxation without representation.

I trust that I shall not trespass upon the patience of the Committee or transgress its rules if I state parts of that theme in the language used by those who first stated it in the 1750s and 1760s. It may make a change from the discourse to which we have just had the misfortune to listen.

What is running through the arguments of the pro-Marketeers on both sides of the Committee is that the European Economic Community is a benevolent institution. There is no need for me to challenge that assumption in order to proceed with my argument. In the history of this country there have been benevolent monarchs who had to be dealt with rather severely. I would not describe the late Charles I as the most malignant person to sit upon the throne of England, though I wish to refer to another monarch who had very good intentions and to whom I am said occasionally to bear a facial resemblance. I refer to George III.

George III has gone down in infamy because he committed his offences against a country which has the largest communications system in the world. But I remind the Committee that George III was a much more benevolent gentleman than some of the Eurocrats who sit in Brussels or some of the half-baked admirers of those bureaucrats who go on free trips to see them at work.

5.45 p.m.

In the celebrated proclamation of 7th October, 1763, which the entire Com- mittee has forgotten, George III referred specifically to what was happening in the then colonies of Northern America. He said that great frauds and abuses had been committed in purchasing the lands of the Indians, to the great prejudice of our interests and to the great dissatisfaction of the said Indians. He went on to say that many of the actions, whether taken or rejected, by the governments which ruled our North American colonies were benevolent in the extreme.

The colonists objected. At times they seemed almost as frowsty a lot as hon. Members on these benches, including myself. They were objecting to what in many cases were desirable measures. But the argument began when taxation was imposed to raise resources from these colonists, and one assembly after another asked why those resources were being raised. Were they to be used for the betterment of life in Massachusetts, Virginia or any of the 13 supposedly sovereign States which formed His Majesty's dominions at that time? No, they were not. They were intended to be used, as was made specific in the Townsend Acts of 1767, to create a colonial civil list which would have removed the Royal Governors away from any kind of control of the assemblies of the various States. To refer to these matters is to bring in the Boston Tea Party. But the imposition of the tea tax was by no means the most malevolent act inflicted by this Parliament on another.

That was the question to which the colonists of that time addressed themselves. It was not the right of the Crown through Parliament to impose taxation. What concerned them was the purpose for which that taxation was to be used. That was how the argument began, and it seemed a very narrow one when it first began in 1764 with the Revenue Act, when we had a lenient Government here who changed their minds from time to time much the same as the present Government, to whom lame ducks are now becoming flying eagles.

The Revenue Act, 1764, reduced the duties on molasses entering the American colonies from the foreign-dominated parts of the West Indies, as compared with the totally unenforceable Molasses Act, 1733. But this reduction in taxation, because of the way in which it was carried through, was not welcomed by the colonists. It was resented by them because they realised that it represented the derogation of a certain degree of power from the sovereign assemblies then in control of the 13 States to this House and the monarch who then, by bribery and corruption rather than oratory, controlled this House. That is what the argument was about, and it is most interesting to read such people as Mr. Otis on Revenue, and Mr. Otis generally profoundly regretted what he was writing about.

It is even more interesting to go through the account that was given by a French agent, the Chevalier d'Annemours. It was not certain that it was him, but this is a report by a French agent written in delightfully bad English. It is pointed out in this report of a debate which took place in an Assembly of Virginia on 30th May, 1765 that certain members objected to the Stamp Act. That was objected to equally violently in this country, as my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) is well aware. He was not, of course, present on that occasion. The Act was objected to by the representatives of the State of Virginia, one of whom was the celebrated Patrick Henry.

Certain Members said that the tax was wrong and they were accused of treasonable conduct. The Speaker stopped them from saying what he considered was wrong, and the whole affair was dropped, but on the following day, 31st May, 1765 the matter was raised again. These quotations illustrate a point, as I intend to demonstrate before I sit down. I am not trying to introduce an element of comedy into an otherwise boring and uninstructive debate. I am introducing these quotations for a definite purpose.

This French agent states that on the following day One of the resolves that these proposed"— and this was moved by Patrick Henry himself— 'was that any person that would offer to sustain that the Parlement of England had a right to impose or lay any tax or dutys whatsoever on the American colonys, without the consent of the inhabitants therof, should be looked upon as a traitor, and deemed an enemy to his country: there were some others to the same purpose, and the majority was for entring these resolves; upon which the Governor disolved the Assembly, which slightly hinderd their proceeding. In the eighteenth century they had sharper measures than the guillotine. Again I draw the attention of the Committee to the elegant prose in that report of the proceedings by a Frenchman. In those days Frenchmen learned English, and not the other way around. The resolves themselves could be tabled as Motions in this House and even the hon. Member for Lewisham, West would be compelled to vote for them because they contained certain essential principles.

Mr. Gower

I am jusure that the hon. Gentleman does not wish to mislead the Committee. He mentioned the purpose of the tax. He will recall that money was required to pay for the defensive war against French Canada and the French and Indians who had penetrated into New England at that time.

Mr. Fletcher

That was taken into account by Mr. Otis when he published his famous regrets. As we are debating the Bill under the guillotine, I am not permitted to take up too much time otherwise I should—

The Second Deputy Chairman

Order. I hope that the hon. Member will not penetrate too far into the forests of North America. It is all right to do so only as an illustration of what he is saying.

Mr. Fletcher

Thank you for your guidance, Mr. Mallalieu. The money was essential for the war with the French, but the colonies objected to the purposes for which the resources were to be applied, to the extent that the application of these resources lifted royal governors and others from popular control by popular elected assemblies. Their minds were concentrated upon these matters, as they realised that their whole colonial system was fitting into a system not unlike that of the Common Market, based on the ideas of merchantilism. It is interesting to read the full texts of the Acts of Trade and Navigation in force in February, 1769. One gets the same lists that we are getting, the same large volumes of regulations as my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) once brought into the Chamber and I believe was instructed to remove.

Mr. Arthur Lewis

No.

Mr. Fletcher

I beg my hon. Friend's pardon and I withdraw that remark.

There was then a plan of union presented by Mr. James Galloway in 1774 to avoid what everybody realised would be a fatal defeat and which eventually became a fatal and disastrous conflict. The point that I was trying to make before the Chair drew me back from the North American forests was simply that all the great arguments that have taken place in this House and in other popular assemblies have started with tiny points of law such as who controls whom, and for what purposes resources are going to be used.

The great American revolution which opened up an entire century of revolutions began in this way when lawyers—and they were mostly lawyers who were totally loyal to King George III and the Parliament which then sat in London—felt themselves compelled to ask certain questions. We are asking the same questions 200 years later, and our descendants, if Brussels does not abolish this place completely and turn it into a county council, will be asking the same questions too, because, as the right hon. Member for Wolverhampton, South-West has said time and again, it is of the essence of Parliament to talk about taxation, to discuss taxation, not by Statutory Instrument in a debate lasting an hour and a half, but in a debate lasting for a whole week on the Budget and then grinding through a whole Finance Bill for many more weeks.

That is not one of the fringe benefits of being a Member of Parliament. It is the essence of being a Member, and if we are to surrender any part of the powers which we now enjoy to even the best intentioned institutions in Europe, or anywhere else, we are flying in the face of history. I may not be a very clever politician, and I am certainly not a lawyer, but I know a thing or two about history. In the end the will of the people will not be denied. I hope that it will not take the form—it cannot take the same form—but public wrath transformed the argument about taxation in the American Colonies. The argument that was accepted as taking place inside this place, since people described themselves not as rebels and as monarchists, but as Whigs and Tories, was regarded there as an extension of the party struggle in this House of Commons.

It exploded into a revolution because the popular will was denied for too long far too vigorously. It is because I do not want to see that happen, in however modified and mild a form in this country, because I do not want to see the people of this country turning against this House in wrath and fury, because the powers of the House which we hold in trust for them have been transferred, and also because I do not want to see a repetition of history that I study it, and because I study history I support the Amendment.

Mr. Marten

This is the fourth occasion on which I have had the honour and privilege of following the hon. Member for Ilkeston (Mr. Raymond Fletcher) in these Common Market debates. On each occasion I have regretted doing so because I have known that my contribution would be far less knowledgeable than his. He has throughout the debates followed the projection of this matter through the eyes of history in which the hon. Gentleman is so well versed, but perhaps I may skip from the eighteenth century and bring the debate, back to the present day and concentrate on one fairly narrow issue which I regard as important.

Nearly every speaker today has dealt with the constitutional matters involved in the subsection, and some have dealt with economic matters. I wish to raise the issue of the money which, whether we like it or not, flows from this country, and how we examine that expenditure and attempt to exercise some control over it. These are vast sums—hundreds of millions of pounds a year—raised from the people of this country. Whether it as said in the Bill or whether it is the intention of the treaties that it belongs to the Communities, this is money from the pockets of the housewife in the shape of levies. We who oppose the Common Market regard this as a useless and absurd exercise when it is now emerging that we could have had this wider home market by going for a free trade area, without all this waste of money.

[Mr. JOHN BREWIS in the Chair.]

6.0 p.m.

Under the Bill, we have no effective control over the amount that goes to the Community. We need to ensure that, once it has flowed, our money is properly spent. I say this because of a statement by Professor Dahrendorf in a paper called Die Zeit in July last year, in which he said that the EEC has no public accountability and that whoever spends money accounts for it himself.

This, on my standard of authorising parliamentary expenditure, as one of many M.P.s, is merly a sick joke. We have our Expenditure Committee, which took the place of the Estimates Committee. On that Committee—I have the honour to be chairman of one of its subcommittees—we can examine how money is spent and how it is wasted. We can examine the future policy of spending and can call for persons and papers. At the end of it we issue our report, which is published in the Vote Office for the public and may, very occasionally, be debated here. We can question Ministers on it. This is a check on some of the absurdities which Governments of all parties get up to when they have too much unchecked power.

We also have the Public Accounts Committee, which goes into the expenditure of public money. One of its reports published last month discovered the absurdity of the refining of sugar partly by Tate and Lyle. That was a good investigation and a sensible recommendation. We also have Parliamentary Questions which we can put to responsible Ministers—

Mr. J. T. Price (Westhoughton)

And Supply Days.

Mr. Marten

Yes, indeed.

The Common Market has only the Audit Board, which is roughly the equivalent of our Auditor General. I should like confirmation that that is the only check on this expenditure, and that there is no parliamentary control of expenditure as we understand it.

Politicians in the Common Market are always saying that one of the reasons why they want Britain in—apart from our market, which the French farmers will grab—is that they want our parliamentary experience in Brussels. We should start here and now and give them this important advice, based on British experience, on the control and examination of expen- diture. This system has done a great deal to ensure the high standards of this country and its Civil Service. It has set a standard for the whole life of this country.

One hears alarming stories from the Common Market about how they cheat over there. We heard today about French taxation cheating and so on. If we are to go into this curious organisation, let us educate them in decent behaviour. We should write into the Bill that the Expenditure Committee would have the right to examine how our money is spent.

I questioned the previous Lord President about this on 1st March. I asked: …if he will list the powers under which Select Committees of this House will be able to send for persons, papers and records in investigating expenditure of British taxpayers' money in the European Economic Community". The answer that I got was: Select Committees have such power to send for any persons, papers and records as the House may expressly authorise."—[Official Report, 1st March, 1972; Vol. 832, c. 407.] That was the sort of answer that I got from the Finance Secretary during a previous debate just after the Second Reading of the Bill.

But that answer entirely misses the point. This House may authorise the Expenditure Committee to go to France and examine farming and the waste of money there and the well-known rackets in the Communities, particularly in food production and distribution. But, once there, what power has a British parliamentary Expenditure Committee to call for papers and to summon witnesses? None at all. The writ of this Parliament does not run in the countries of the Community.

As things stand, this Parliament can exercise no control or examination over the expenditure of British money. The Financial Secretary will probably say that there are similar cases, that, for instance, we pay money to the United Nations and that the Estimates Committee went over and did a report on how the money in our aid programme was being spent. But that is not on all fours. We voted that money through Parliament, and we could have voted a lesser sum; we could have controlled that money. So I hope that the Minister will not say that the Expenditure Committee can do this with other money that we pay out to international organisations.

Anyway, when the Estimates Committee went to India to examine our aid programme there it was only by courtesy that witnesses gave evidence. Our writ did not run there. If we are to go in, this should be fixed up beforehand.

I have a proposition for the Government. If, as they must, they admit that they share my view that we should exercise control over the expenditure of British taxpayers' money, then on Report I undertake to table a new Clause setting out three factors.

My new Clause will set out clearly the right of the British Parliament properly to examine Common Market expenditure. It will, next, contain a provision giving us the right to call for persons and papers in the Common Market; in other words, our writ would run there. It would, thirdly, say that this Measure would not become operative until the Common Market had so adjusted its laws that this House of Commons had power, through its Expenditure Committee, to go into Europe and call for persons and papers.

This is a case where the Government have every justification to stand up for British interests and illustrate to the EEC before we go in, if we go in, that we are determined to get this matter right. When doing that, the Government can surely count on the support of every pro-Marketeer because I challenge any pro-Marketeer to say that he does not want to examine the way our money is spent.

Mr. Fell

How does my hon. Friend propose to overcome the obstacle that the Government are foresworn to have no Report stage to this Bill?

Mr. Marten

I do not take that too seriously. I do not believe that my right hon. and hon. Friends are so keen to go grouse shooting that they are determined to get away by the midnight guillotine on 11th August. In any event, I do not think that the Ministers concerned with the Bill are grouse shooters. The image is changing.

Here is an example of the Government being able to stand up for the British Parliament and its right to examine the way in which our taxpayers' money is spent. This should be demanded whether or not one is in favour of joining Europe.

A number of important matters in connection with our joining the EEC remain unsettled. There is, for example, the question of the reform of the CAP. This policy is the classic sick joke in Europe these days. There is also the question of the harmonisation of VAT. Will it be imposed on food in this country?

Mr. Arthur Lewis

Of course it will.

Mr. Marten

We know that, but the Treasury Bench will never admit it. The rumour in Brussels is that VAT will be harmonised at 15 per cent. generally and 7½ per cent. on food. Then there is the important question of big Euro-lorries coming off the cross-Channel ferries and pounding through, for example, the delightful Cotswold villages I represent.

Mr. J. T. Price

I have been discussing this very problem this afternoon in another Committee upstairs. My information is that, against the general drift of policy in the Common Market, the Government are themselves sponsoring a Bill under which we shall be able to arrest some of these lorries when they come off the cross-Channel ferries and into our ports. This is being done in answer to strong criticism which I and others have been directing at the Government for the last couple of years. Something must be done in view of the danger to our people and the already congested conditions on British roads.

6.15 p.m.

The Temporary Chairman

Order. I hope that the hon. Gentleman will not answer that intervention in depth.

Mr. Marten

The trouble is that while the Bill to which the hon. Member for Westhoughton (Mr. J. T. Price) referred is going through this Parliament a regulation will be passed by the Commission and will be self-enacting so as to override our legislation. In other words, what we do will be irrelevant because it can be overridden by people miles from this country.

Mr. Arthur Lewis

Is the hon. Gentleman aware that, in addition to all the other costs which have been mentioned today in relation to our joining Europe, it will cost about £300 million a year to keep our roads and bridges in a strong enough condition to take these heavy lorries coming from Europe, leaving out of account the cost in terms of damage to historic and other buildings?

Mr. Marten

Before I am reprimanded by the Chair, I will refrain from answering that and stick to the Amendment.

Many other questions, such as the textile industry and regional policies, are fundamental to this issue. All should be settled before we join Europe. It is time for the Government to say clearly to the Six "Whether we have an October summit or whether President Pompidou says that we should not have one, we will not give this Bill a Third Reading until these outstanding matters are settled." These are not complicated issues. If the political will exists in Europe, which I doubt, they could be settled rapidly. Or are we to live with a procrastinating organisation which cannot settle anything in under 10 years?

Her Majesty's Government would be in a strong position at the summit meeting or whatever deliberations take place instead of it if they were to say "Unless you give us satisfaction on such issues as the axle weight of lorries and the future of textiles, it is highly doubtful whether this Measure will be given a Third Reading". If we said that, the Six would, if they really wanted us in, meet our demands. Why should they not? Let our slogan be "Stand up for Britain", and I urge the Government to use it.

When we debated the White Paper on 28th October we were told that the Americans were not interested in any sort of free trade area, and the vote was taken on that basis. Hon. Members who oppose the Common Market said that the Americans were interested, and it now transpires that they are and are moving towards a free trade area. There is, therefore, a second strong card that the Government could play in urging that we be given satisfaction before passing this Bill.

I urge the Government to be firm with the Common Market. They must get tough and move into the attack in the negotiations. Only then can we be sure of our ability to look after British interests and, above all, the British people.

I hope that in bringing my speech back to where I started the Minister will bear in mind the Expenditure Committee and will see that before we go into the EEC it is established that Parliament has the right to call for persons and papers in the Community, and that that writ shall run with every satisfaction of law.

Mr. Emlyn Hooson (Montgomery)

I am in favour of the Amendment but I differ greatly in my reasoning from that contained in some of the speeches delivered today. I have no doubt that when the House voted in principle for entering the Common Market on the basis of the Treaty and for the Second Reading of the Bill, all hon. Members who voted in favour were deluding themselves or being entirely hypocritical if they had not appreciated the consequences of their actions. They were taking a momentous decision and in so doing they were abrogating to a degree the sovereignty of this country and surrendering to a degree the control exercised by the House.

As I understand the argument—I have heard it many times from my own colleagues—the people who are for entry at present say that what we shall obtain by entry will be of such great value for the future of this country that they are prepared to pay a heavy price. They say that even if they are not prepared to defend some of the details of the deal, the package in the end is worthwhile.

I perfectly understand the people who take that viewpoint, although I disagree with them. I will make my reasons clear. There has been a danger in some of these debates that, on the one hand, we have a continual rehearsal of the arguments against the Common Market and on the other, we have a basic generalisation of the position in favour of entry with no attention to the details in the Bill.

It has been perfectly legitimate for the Government on many of the proposed Amendments to say, "We have the authority of the House to proceed with the Bill. We have to implement the Treaty. We cannot do so unless we adhere to the particular Clause or subsection in the Bill." That is a perfectly legitimate argument which any Government would take with the authority the Government have as a result of the votes in the House.

But I entirely agree with the right hon. Member for Wolverhampton, South-West (Mr. Powell) when he said at the conclusion of his remarks that basically the Amendment is not concerned with whether one is for or against the Common Market. It is concerned with whether one is for or against Parliament. It is not necessary for the implementation of the Treaty that the Government should adhere to subsection (3).

The way that Parliament provides the moneys necessary to carry out its obligations to the Common Market under the Treaty is a matter which can be decided in a number of ways internally. The Government have selected a particular way, namely, through the medium of the Consolidated Fund. The fact that the subsection by paragraph (a) provides for the voting of moneys in the ordinary way by Parliament shows that that way need not have been accepted. I was brought up firmly in the old principle of no taxation without representation.

Mr. J. T. Price

Without redress of grievances.

Mr. Hooson

That is an amendment which for the moment I will not accept as necessary for my argument. Unlike the right hon. Member for Wolverhampton, South-West, who believes that there should be no abrogation of parliamentary sovereignty, I would be prepared to see a reduction of that sovereignty if I were satisfied that in its place, through the evolution of a larger Community, there would be adequate parliamentary or democratic control and adequate parliamentary representation. But I do not think we shall have that. That is one of my principal doubts about the whole of the operation. That is why the House is making a great mistake when at times answers are given to detailed objections by way of generalisations about the desirability of the Common Market as a concept. One can be in favour of a much greater unity in Europe or even much greater political co-operation in Europe, and yet be much against joining the Common Market on these terms at the present time.

The Common Market has developed in a certain kind of way. There are few people who will defend the common agricultural policy in the privacy of the smoking room. They have to put a face on it. It is the price that France extracted from its European partners for the evolution of the European Economic Community. The argument that is put forward is that whether we are for or against it, we should accept it as a necessary evil on the basis that we are more likely to change or modify it if we are inside the Community. Therefore, we are told that we must not pay too much attention to these fine legal points of whether Parliament will have adequate control over expenditure.

The right hon. Member for Wolverhampton, South-West made a fascinating discussion of the various provisions of subsection (3). He allied to this an interesting historical analysis of the growth of parliamentary sovereignty through financial control. He showed how the strength of the House is rooted in its control over expenditure and how that control came about. I will not follow him save to say that, as the Government do not have to accept or insert subsection (3) to satisfy their obligations under the Treaty, and as this could be voted for every year, it could be a useful weapon in the plans of any Government who were trying to reform the Common Market from inside.

If the Common Market countries were aware that the Government of this country had to go back to the House every year for the approval of expenditure necessary under the Common Market budget, that would be an interesting prospect. The Government could say, for example, to their French allies in the Common Market, "You must modify this policy and appreciate the effect that it will have on us. You will realise that you now have the benefit of our industrial market for your agricultural produce, and we shall need to have some modification." It could be a useful weapon in the hands of a British Government.

The Government have not been sufficiently aware of the advantage of being able to say to its allies, "We have a tradition in our country of control over expenditure and it is necessary for us to go back to Parliament on this matter." That could be a most useful adjunct which might be required by the Government in future within the Common Market.

I am accepting for the moment, whatever my personal vote will be, that this country will enter the EEC. However, once we enter there will be much greater agreement on either side that we need to use a great deal of pressure—all the pressure we can—to modify, change and liberalise the Common Market in many respects. Any Government will be pushed to do so.

I believe that our influence outside the Common Market is greater than if we were inside. We shall find the French particularly intransigent. The great economic growth period of the Common Market is over. We shall see a contraction of world trade. There are four million or five million unemployed in the United States. We have an intractable unemployment problem at home. There has been an immense slowing-down within the most prosperous country in the Common Market, West Germany and this will not change when we get in. These problems will remain with us.

The Common Market could be a most stultifying experience for this country. Although I accept that it could be a most adventurous, expensive period in our history, I do not think that it will be so, for various reasons.

6.30 p.m.

I represent an agricultural constituency. Many farmers in my constituency are happy at the great increase in, for example, beef prices, but they are not such fools and so lacking in historical sense and perspective that they do not appreciate that, though agriculture prospered under the corn laws, when they were repealed some years later there was a devastating agricultural slump in this country.

Many people, whether for or against entry into the Common Market, would like to see a considerable element of our agricultural policy imported into it. We are not likely to see that happen unless the Government are much tougher with their partners in the Communities and retain, as far as they can, all possible weapons for argument in their own councils.

Representing an agricultural constituency I put to myself the question: is it in the interests of my constituents that on this Clause I should vote to pass out of the United Kingdom Parliament control over expenditure, which is of vital importance? I am not prepared to do so unless I am satisfied that there will be equal democratic control in the Common Market. It does not exist now. We should not delude ourselves. We might hope that one day it will exist, but it does not exist at present. Therefore, as the Clause is not necessary for the purpose, why should the Government adopt it?

Sir A. Meyer

The hon. and learned Member for Montgomery (Mr. Hooson) has at least brought the debate back to the point and touched on the heart of the subject. Speaking from the Liberal Benches, he has also aggravated the bad tendency in the debate to be totally and grossly unrepresentative. Because of the way the dice falls, some 90 hon. Gentlemen opposite who are strongly in favour of British membership of the Common Market are gagged by their Whips and forbidden to speak—[Hon. Members: "No."]—and on these benches 20 or so of my hon. Friends who are opposed to our entry suffer from an infelicitous combination of total recall and verbal diarrhoea. This represents a somewhat unrepresentative picture of the feeling in the Committee on this matter.

I am glad that the hon. and learned Member for Montgomery entered into the heart of the subject as I wish to speak from an opposite point of view on the topics which he raised. I believe that the business of "own resources", of moneys which automatically flow through to the Communities without interposition of the British Parliament, is an essential and indispensable element if the Common Market, with us in it, is to fulfil the high hopes which many of us place in it.

While on this point and while temporarily we have the right hon. Member for Stepney (Mr. Shore) with us, I should like to take the opportunity of putting to him the point which I wanted to raise when I sought in vain to intervene during his speech. I want to try to ascertain from the right hon. Gentleman whether what he said about a future Labour Government—should any such misfortune befall us—not accepting these provisions carries the full support of the Opposition for a firm commitment to renege on this obligation. Regardless of whether a future Labour Government decide to withdraw from the Community, have we had a firm commitment from the Opposition not to implement the provisions for "own resources" financing? I take it that this is a firm commitment on the part of the Opposition. It is good to know where we stand.

I return to the point about the essential importance of "own resources" financing for the Common Market if it is to fulfil the hopes which we place in it. The experience of jointly financed projects which have operated outside the Common Market—Concorde is a clear case in point—is that all such projects are at the mercy of periodic changes of will or economic crises in the countries which are party to those projects. This produces a discontinuity, an irregularity of rhythm, which to a large extent is responsible for the escalating costs of the Concorde project. This is merely one aspect.

The element of continuity, which can arise only if there is an automatic flow through of finance to the central institutions of the Community, is indispensable if a coherent policy of growth is to be pursued.

We have heard much about the drawbacks for the United Kingdom of the common agricultural policy. I would stick my neck out so far as to say that the concept of the common agricultural policy, though not necessarily its details, is one which, on the whole, I welcome. However, I do not wish to be drawn further into the subject of the CAP because I want to talk about certain other aspects of common financing.

It would be greatly to the benefit of this country, even seen only from a purely nationalist point of view, if the scope of the common budget of the Community were to be greatly enlarged to cover two further matters: first, the financing of research, development and procurement in advanced technology; and, secondly, the Community's regional aid policy. If the enlarged Community, with Britain in it, were to embark on ambitious projects in these two spheres this country would undoubtedly be a net gainer.

There is a third sphere of expenditure—[Interruption.] I do not think that any- body seriously contests that if there were to be an expanded regional policy—

Mr. J. T. Price

I realise the hon. Gentleman is putting forward a sincere argument, but merely to make dogmatic assertions of that kind without any effort to supply background evidence on which such conclusions can be based is not good enough for this Committee. Let us bring the matter down to basic facts rather than speculation. How would the hon. Gentleman decide as between the demands, for example, of the Orkney and Shetland Islands or the remote recesses of Northern Scotland and those of Taranto and the Strait of Messina in Sicily, two distressed areas by definition of low income, in any equitable manner in favour of the people of this country as against the rival claims of Continental people who are equal partners in the Common Market? These are purely theoretical, academic arguments which do not impress me at all.

Sir A. Meyer

I did not want to get drawn too far into the details of the regional development programme. However, I must point out that, once we are in the Community, there will be certain natural allies in this cause and that the United Kingdom, Italy, Ireland and Norway as peripheral countries will be concerned to combine their influence to secure precisely an expansion of the regional aid programme.

It may be that there is a case for altering the character of the programme within the Common Market. The programme is primarily one of aid to distressed rural areas. Our principal problem is one of aid to areas of declining industry. I am not sure whether there is not an advantage in a little cross-fertilisation. A little more emphasis on reviving rural areas in our peripheries as practised within the Community might be greatly to our advantage.

I return to the point that this element of continuity in financing is essential if the Common Market is to become anything more than merely a free trade area with a cumbrous mechanism of bureaucracy planted on top of it. Without some such element of continuity we shall not succeed in making the Common Market into anything more than a glorified free trade area.

It follows that the growth of democratic control within the Community for which all of us devoutly wish, is, in a curious way, dependent on the acquisition by the Community of its own resources. As long as the Community's resources are provided by national Governments and are subject to the control of national Parliaments, it is only realistic to expect that no European Parliament will acquire the habit of controlling finances. There is agreement on both sides that the control of finance is an essential element in organising proper democratic control.

It therefore seems that there is a indissoluble connection between "own resources"—Community financing—and the growth of effective European parliamentary institutions. This is another reason why I am anxious to see a growth of Community financing.

Mr. Evelyn King (Dorset, South)

This is a very interesting point. Is my hon. Friend saying that he would deny his constituents the power of inquisition into a country's contribution because he would rely on a European parliament to conduct its financial control? This is the essential part of the argument.

Sir A. Meyer

If my hon. Friend were talking about our constituents losing control over the great bulk of the revenues with which we are concerned, he would have a valid and powerful point. We are not concerned with the great bulk of the revenues. This is a very small proportion of the total revenue. It is not just an acceptable price; it is an indispensable price to pay to secure the element of continuity which will enable the Community to grow into something real, live and positive, and to enable the growth of effective democratic control of the Community's institutions.

I am one who believes in the Common Market, not just as a device for get-rich-quick on the part of the United Kingdom, but as a real contribution to the growth of a saner pattern of international relationships. It therefore saddens me to see the Labour Party renege on everything it has stood for about the Common Market. I used always to respect the Labour Party at least for its strong internationistic feeling, but it now seems to be animated by the idea that we are internationalists so long as that does not involve us and so long as the process does not start now.

I am proudly and unashamedly internationalist. I am very glad that it is my party which is to make a major contribution to a saner pattern of international relationships. I fully support the subsection and I shall without hesitation vote against the Amendment.

6.45 p.m.

Mr. Deakins

I am grateful to be called at this stage, Mr. Brewis, because the hon. Member for Flint, West (Sir A. Meyer) made a number of interesting comments, particularly about the growing move towards federalism. I must correct the hon. Member on one or two points.

Pro-Market Members on this side of the Committee have in no way been gagged. We who are anti-Market root and branch have been encouraging them to come here, because we believe that it would make for a more balanced debate if every point of view which is held on the back benches on both sides were to be expressed. A number of my right hon. and hon. Friends have made some fairly long, and sometimes very witty, speeches—this applies particularly to my right hon. Friend the Member for Manchester, Cheetham (Mr. Harold Lever)—to explain their points of view. My right hon. Friend the Member for Birkenhead (Mr. Dell) has on at least two occasions moved Amendments. Obviously the hon. Member for Flint, West could not have been present on those occasions.

The hon. Gentleman made great play of the argument that the Community needed its own resources because of continuity of financing. Continuity of financing in that context appears to mean no system of annual parliamentary control or any other form of control. On the basis of the hon. Gentleman's argument it could be argued that the United Kingdom has never had continuity of financing, because we have always had an annual Budget with Votes of Expenditure and it has always been open for this Parliament democratically to change the Government's economic and financial policies as the needs and interests of the British people have changed from year to year.

I do not think that the Community necessarily needs to have continuity in its own resources. They could be voted annually and the Community could well survive and prosper, if indeed that is what the hon. Gentleman wants, without the benefit of the measures in Clause 2(3).

I want first to examine the figures in detail. I apologise in advance for going into the figures in detail, but I have discovered in the two years that I have been in Parliament that the only opportunity an hon. Member gets to examine the Government's proposals in detail is in Committee—so this is what I propose to do.

The point in which Parliament and the British people are mainly interested, in terms of our contribution to the Community budget, is what is to be the position in 1980 when we start paying the full amount. However, the Government have made great play about the position in 1977. Therefore, it has made my job a little more difficult. What I must do, first, is to consider the Government's claims for 1977 and then go on to see what is likely to be the position in 1980.

Starting with the 1977 position, in Cmnd. 4715 the Government themselves stated that our net contribution to the Community budget would be £200 million a year, made up of a gross contribution of £300 million, minus receipts of £100 million. The Government have made the very interesting assumption that for every £3 Britain pays into the Community budget it will get back £1. They made an estimate in July, 1970, which was never given to the House but was published in Europe. It was as official as any estimate of that nature can be. Their estimate then was that we would make a gross contribution of 31 per cent, to the Community budget and that we would receive back 6 per cent.; consequently our net contribution would be a rather smaller proportion of the total amount we paid over.

I wonder why, in their latest estimate in the White Paper Cmnd. 4715, the Government have reached a more optimistic conclusion as to the receipts from the Community budget. We are told that we shall get £100 million. We have never had an explanation as to the breakdown of this figure—at least, not a full breakdown. As the Chief Secretary and Minister for the Department of Agriculture are present in the Chamber, I wonder whether we could have some breakdown of this £100 million in receipts.

It can be based only on two forms of reasoning—either on Community assurances or on wishful thinking. I suspect very strongly that it is the latter, if one examines the three possible ways in which this country could benefit under the existing Community argicultural budget, one sees straight away that the amounts paid out on surpluses which are subsidised and shipped to other countries—thereby distorting world trade—cannot possibly apply to this country. We are, and shall remain, even when we are a member of the Common Market, a net importer of food, whether from other overseas countries or from Common Market countries is irrelevant for the purposes of this argument. Therefore, no money will be coming to us from the Community budget to subsidise exports of food.

The second aspect of the Community budget by which we might possibly benefit is in structural reform payments. But, as our farm structure is so superior to that which exists in the Common Market at present—for example, our average-farm size is at least double, and they have about five times the proportion of working population engaged in agriculture—it is most unlikely that we shall benefit in any way from structural reform proposals, and the structural side of the FEOGA Fund. That leaves only one possibility and it is obviously on this that the Government are pinning their hopes of getting £100 million a year by 1977. That is the guarantee section, where the Community subsidises support buying, and one or two direct measures of deficiency payments in the case of one or two commodities, aid to private storage in times of glut, and so on.

When one looks at the Community budget for 1972 and the figures given by the Minister of Agriculture at column 468 of Hansard for 25th May, it becomes clear that out of the total of roughly 2,500 million dollars of the guarantee section of the FEOGA budget, no less than 1,159 million dollars went on export subsidies, as was pointed out by my right hon. Friend the Member for Stepney (Mr. Shore). We could benefit only from that part of the FEOGA budget, the guarantees section—dealing with the amounts paid out in support buying, deficiency payments and so on.

There are a number of commodities set out which we do not grow in this country. I shall not go through the complete list, but we do not grow tobacco, and a vast sum of money went in domestic intervention in the tobacco markets of the Six. Nor do we produce olive oil. A vast amount of domestic intervention in 1972 is scheduled for olive oil, quite a large amount for oil seeds, and a fairly large amount for wine. We produce very small amounts of wine and oil seeds. I cannot believe that we shall be getting £100 million a year for these two commodities. Obviously we shall not. The £100 million, therefore, must be on the commodities such as cereals, milk and milk products, where we ought to be able to benefit from intervention arrangements under the CAP.

Mr. John Farr (Harborough)

The hon. Gentleman may be interested to know that a considerable amount of tobacco is grown in this country and is smoked by many people.

Mr. Deakins

That is news to me—and, probably, to the Inland Revenue. I hope that it is not like Irish whiskey and things such as that—[Hon. Members: "Oh."] I am sure that it is all done very legitimately. I do not wish to upset the susceptibilities of hon. Members. However, the hon. Member for Harborough (Mr. Farr) would probably agree with me that the amount of tobacco grown is very small and that we are unlikely to benefit substantially—certainly not to the extent of £100 million a year.

That leaves us with cereals, milk and milk products, where we ought to benefit to some degree. But the total Community budget expenditure on these items is only 36 per cent. of the total amount. That means, therefore, that we reckon that we shall get, by 1977, about a quarter of all the Community aid which goes on those commodities that we grow in this country. That is never likely to be the case. First, we do not have that proportion of the cereals market in the Ten, or the milk and milk products market. Therefore, the Government's estimate of £100 million receipts by 1977 is wishful thinking. I should not like to put a figure on it, being without the resources of Govern- ment Departments. But the Government could well arrive at a more accurate figure if they were willing to break it down for us.

My second point follows that made by the hon. Member for Flint, West, namely, that we should benefit in the long term, if not under the agricultural parts of the Community budget, under a regional policy. I do not want to go over speeches that I have made previously in Committee about the absence of a regional policy in the Community and on the fact that if it should ever develop such a policy, it would not be a policy which, by and large, would benefit those depressed regions of this country which need outside assistance.

Mr. Neil McBride (Swansea, East)

Is my hon. Friend aware that the hon. Member for Flint, West (Sir A. Meyer) and myself, who represent Welsh constituencies, have never been furnished with one fact or figure from the Welsh Office to show us, as Welsh Members, how the Principality would be affected, making our task precisely as large today as when entry to the Common Market was first contemplated? This is enormously important to the Welsh people.

Sir A. Meyer

As the hon. Member mentioned my name, may I say that the Welsh Council has furnished an extremely valuable account of how entry to the EEC will affect Wales.

Mr. Deakins

I am grateful for those two observations. I should not like to intervene in this internecine strife between the Welsh. [Hon. Members: "Oh."] Although my hon. Friend the Member for Swansea, East (Mr. McBride) speaks with a rather strange accent, he represents a Welsh constituency. I should have said "between Welsh Members", and not "between the Welsh".

My point is that the Community, even if it develops a regional policy, is unlikely to develop one which will necessarily help the regions of this country. Even on the most optimistic assumption that certainly all pro-Marketeers are making, including some of my right hon. and hon. Friends, that the Community does develop a regional policy, they are assuming, as are the Government—I think wrongly—that the cost of that regional policy will come out of the existing Community budget, that we shall cut down on the amount going to agriculture and that we shall increase vastly the amount going on the sort of regional assistance which will assist our depressed areas. Is it not much more likely that, if and when the Community should develop a regional policy, and if it should be effective in this country and designed to help this country, that regional policy will be in addition to the existing agricultural policy of the Community and will, therefore, have to be financed additionally to the financial burdens on this country already in terms of the CAP? It may well be that we may contribute less to such a regional policy than we take out, but that cannot possibly be an argument to be used between now and 1977 for saying that we shall benefit rather more from the present Community budget than some of us suspect.

That brings me to my major point which is the position that will obtain in 1980. It was possible for the Labour Government, in their White Paper of February, 1970, to attempt some broad estimates of the position in 1980. The present Government have declined to do so. But we all know the facts about 1980 even if we do not know the details of the figures. We shall have to hand over 90 per cent. of our agricultural levies and customs duties. Whatever be the level of those agricultural levies in particular—this is doubtful because we do not know yet—one thing is absolutely certain: the payment of 90 per cent. of them to the Community will hit the United Kingdom harder than any other member of the Ten, because in 1980 we shall still be the largest net importer of food from third countries and, therefore, we shall be producing the vast bulk of the agricultural levies. Therefore, we shall be giving a disproportionate part of the total Community budget, even in 1980. That position will obtain even if, as I am sure we all hope in the House of Commons, we produce more at home or even if we get a bigger proportion of our imports from the Community rather than from third countries.

This leads me to the point that this makes it almost certain that in 1980 we shall have to hand over a full I per cent. of our value added tax under the Luxembourg agreement of April, 1970, as part of the "own resources" of the Community. What will that mean? Apart from the question of tens of millions of ponds—and no one can say what a 1 per cent. Value added tax will come to, except to suggest that it will be between £35 million and £80 million, depending on the coverage—we have to bear in mind that by the time 1980 comes along the VAT rates and coverage will have been harmonised. Undoubtedly, VAT will have been extended to food by that stage and this country will have had no option but to agree. Therefore, apart from the foreign exchange burdens of our contributions to the Community budget, the British housewife, in addition to having to pay higher food prices under the common agricultural policy, will have to pay at least some rate of VAT on food by 1980. That is something that ought not to be lost on the public.

[Sir ROBERT GRANT-FERRIS in the Chair]

7.0 p.m.

The Government made an estimate in July, 1970 of the position in 1978, two years short of the final position in the White Paper. They estimated that our net contribution would probably be about £400 million to £470 million. One has to make allowance for the fact that the Community budget is already getting near that level and that by 1980 therefore the budget will be even larger than was expected this time last year. If there is a larger budget, this country will obviously on the same proportion be paying a largernet contribtuion.

One wonders why the Government, having given an estimate in July, 1970 of £450 million for 1978 and a figure for 1977 in the White Paper of nearly £200 million, now refuse to give any estimate after 1977. Surely this can only mean that the Government are frightened to reveal the truth and tell Parliament and people that instead of its being a £200 million net contribution, as set out in the White Paper, it is likely, on the most optimistic of their assumptions, to be over £400 million, at least double what they have told the public for 1977.

Paragraph 96 of the Government White Paper refers to "unacceptable situations". We are comforted with the thought that if an unacceptable situation should arise we shall all put our heads together and something will no doubt be done about it. But what is meant by "unacceptable situation"? An unacceptable situation in 1980 to this country, paying our £400 million at least to the Community budget, will not be unacceptable to the rest of the Community. It will be perfectly acceptable to the other members because we shall be shouldering an even bigger burden of the common agricultural policy. If that is to be the case, what hope is there in this vague phrase in paragraph 96 that we shall sit down and talk about it? Surely even our 1977 contribution is likely to be unacceptable, let alone the full burden we have to bear in 1980.

My last point is slightly different. I have been talking about the details of the budget and our contributions and receipts. I want to conclude by referring to the wording of subsection (3) and its implications. Here I am not treading new ground because it has already been fully discussed by the Committee. But it seems to me that subsection (3) is basically a federalist provision. It could have been put into a Bill only by a Government bent on a federalist solution in Western Europe. Subsection (2) in particular, with other parts of the Bill, is designed to prepare the way. It deprives Parliament of rights which need not at this stage be lost to the Common Market. Yet we are giving them up. This, of course, is the path to political unity for Western Europe, and federation will be very much easier for the Government of the day because Parliament, by virtue of subsection (3), will be less able to protest effectively at the time since one of its financial weapons will have been taken out of its hands.

In this course, the Government are being aided by pro-marketeers on both sides of the Committee, more and more of whom are beginning to reveal themselves, if not in words but in the implications of what they say, as federalists. If one scratches most of the pro-Marketeers on both sides of the Committee, one finds that they will admit to being federalists. It is a very serious situation because this is something which has yet to be put to the British people, and I have no doubt what their reaction will be. It is therefore because, as I think, most of my right hon. and hon. Friends and, I hope, a majority of right hon. and hon. Members in the Committee feel that a federalist solution is absolutely wrong for this country that we should reject this federalist subsection.

Mr. Edward Gardner (South Fylde)

I cannot help feeling that this discussion of subsection (3) has been confused, and, one suspects, deliberately confused, by some superficial complexities. The subsection deals with the way in which our contributions to the European Communities will be paid, and the method chosen and set out is that the money representing our contributions shall be taken out of the Consolidated Fund or the National Loans Fund. As one understands it, those who oppose subsection (3) rest their opposition mainly on the ground that Parliament will not be able to refuse the contributions which are to be paid if we remain a member of the Community, will not be able or be allowed to reduce the amount of money paid by way of contributions.

The trouble when we discuss these matters is that we are creating by the very size of the units we are dealing with a quite artificial complexity. We are dealing with a large number of countries, each with a large population. We are dealing with large sums of money. It seems to me that all these things come together and make our appreciation of the essential simplicities of this important issue very difficult to understand. I ask the Committee to indulge me if I suggest that in place of the Community we consider for a moment by way of comparison a club, and instead of looking at this country we put in its place an individual about to join that club.

The question would arise of how much that individual will have to pay by way of contribution to the club. I hope the Committee will forgive me for reducing this to simple terms, but the first thing that is obvious is that the contribution he will have to pay will be the contribution that has been decided upon by the present members of the club, and if he does not want to pay that contribution the alternative is not to join the club. If, however, he does join, the question may well arise of what the contribution is to be in future. That decision about the contribution in the future will not be made by the individual as such but will be made collectively by the members of the club of which he will then himself be a member.

Mr. Fell

But surely the analogy falls to the ground, for that individual does not have to pay the contribution. He can leave the club and join another. Indeed, he can join another club at the same time as he is a member of the first club. There is no analogy.

Mr. Gardner

There is indeed, because this club—the European Community—is a club from which no member has made any move to resign nor has shown any signs of wanting to resign. They all show the greatest enthusiasm for remaining in the club for benefits which are apparent to many people but, it seems, not to some hon. Members of this Committee.

I well understand that some of my right hon. and hon. Friends have consistently over the years—some at a later stage, having taken a different view initially—opposed our entry into the Common Market. One respects what they say and frequently admires the way in which they say it. But I cannot help wondering, when one listens to the right hon. Member for Stepney (Mr. Shore) whether he is speaking with the inspiration of personal revelation and conviction or whether, as one assumes he must be, he is speaking on behalf of the Opposition.

This elementary and quite accurate view of the need to pay a contribution, and of the means of assessing the size of the contribution, is something which the Labour Government must have well understood and appreciated. They accepted the uncertainties—and there are uncertainties. This was part of their understanding of the Common Market which they were prepared to accept and upon which they were prepared to act. Today the right hon. Gentleman talks about our new tax masters in Europe. He spoke, in terms of some kind of financial nightmare, of the contributions this country will have to make towards Europe. He asked—and we should all like to know the answer, although we would have to have a good crystal ball to arrive at it—what the contribution will ultimately have to be.

We all know that the figures are very well rehearsed, but all know that they have no degree of decisiveness or certainty about them. The White Paper of July, 1971, put our contribution to the European budget for 1973 as £1,400 million. This was estimated to rise by equal amounts to £1,600 million by 1977. These are the figures with which the right hon. Member for Stepney has been dealing. If I may say so with respect, he said that this was a responsible Committee, having a responsible debate but he did not, as I understood him, deal with the other side of the coin, with the receipts that we can expect to flow into this country from Europe and which will affect the gross cost of our entry and our contribution once we are in the Community. These receipts, as they are estimated, will reduce the net cost in 1973 to £100 million.

Mr. Jay

No.

Mr. Gardner

I am not giving this authoritatively; I am quoting the figures and I ask the Chief Secretary to confirm them.

Mr. Jay

Has the hon. and learned Gentleman not grasped what has been made clear several times in the debate, that the estimate of July, 1970, gave the net contribution of this country, after allowing for the in-payments, as £470 million net in 1978?

7.15 p.m.

Mr. Gardner

I appreciate that. I am quoting the basic figures. I am sure that everyone in the Committee would like to have up-to-date comments on the figures. I am merely reminding the Committee that the net cost was estimated to be £100 million in 1973 and £200 million by 1977. The right hon. Member for Stepney said that he did not want to increase the prosperity of Europe, which was already prosperous, by adding our contributions. This is as I understood it, as I took it down. If he said that and meant it, then I submit that he exposes by those words the sophisticated fallacies in which he deals and his contempt for the obvious.

Mr. Shore

The hon. and learned Gentleman has, I am sure, genuinely misunderstood me. I was drawing a contrast, posing a choice, and saying that if we had that amount of money to contribute across the balance of payments there were other claims upon it. I mentioned specifically the developing countries, and I still think that they have a much greater claim.

Mr. Gardner

If that was the meaning which the right hon. Gentleman say she intended to give to his words, I accept that. What is glaringly clear is that when we enter Europe, if, as the right hon. Gentleman says, the countries of Europe are already prosperous and apparently increasing in prosperity, I believe, although I would not put it as the major reason for entering the Community, that we can hope with some degree of certainty that we, too, will be able to share much of the prosperity being experienced in Europe. The manner in which we are to pay these contributions, upon which we shall receive profits beyond all our dreams, is set out in the subsection. It is the right method, and it is the one for which I shall vote.

Mr. Nigel Spearing (Acton)

I am glad to follow the hon. and learned Member for South Fylde (Mr. Gardner) and I will immediately take up his closing remarks. He said that he hoped this country would share the prosperity of Europe. Of course it is something which we can have in many ways. The hon. and learned Gentleman would agree that the prosperity of a nation in its material and economic aspects can also be effected by the security of the inhabitants. "What profiteth it a man" as The Times asked not long ago, "if he earns a salary at the rate of £5,000 a year for one week and then finds himself on the dole the next?" The hon. and learned Member will agree that there are many other things besides the account book total, the gross national product or whatever. It is the fear of many people on this side of the Committee that the sort of problems which are not financial or tangible in an economic sense will be exacerbated by the Common Market.

The hon. and learned Member mentioned joining a club and spoke about the subscription. If he or I joined a club I think it would be on a fixed subscription basis. In this instance it is an open-ended levy, and, therefore, the analogy he drew is incorrect. Further, if he or I joined a club we would not be taking our family with us; at least that is not usual. If we did so we would surely consult them. If the family budget on which the club's subscription was based was raised by the wages of all the family it would only be right that we should get the consent of the family before joining. The hon. and learned Gentleman will probably agree that that has not been done by the Government or the Prime Minister, and, therefore, I fear that his analogy is wanting in many respects, not least in terms of consent and it is consent in financial terms to which I wish to draw the attention of the Committee.

Subsection (3) deals with the money, and, as we know only too well, money can be the source of a great deal of power. It is with consent and power that I wish to deal. My hon. Friend the Member for Ilkeston (Mr. Raymond Fletcher) drew attention to the past and to the fact that it is the power of the House to approve taxes which is the basis of its sovereignty. It is the means by which the House has achieved sovereignty over this country, by the consent of the people. I suggest, too, that the social nexus in which we find ourselves depends upon the consent of people in society.

It is only too clear that when there is a debate the hon. and learned Member and others of his thinking bring up the question of authority. It is not there, they say, there must be more discipline; people are not prepared to do what they used to do. Of course they are not, and it may be right. But that has also happened in the past when kings tried to impose taxes on people who had no representation over the way in which they were raised. This is the source of "no taxation without representation" which is not just a slogan, because it means that people will accept taxes and associated legislation only when they have some sort of say about how the taxes are to be imposed and how the legislation is to be formulated.

Mr. John Tilney (Liverpool, Wavertree)

I have some sympathy with what the hon. Gentleman says, but there is a lot of taxation without representation in this country. We have only to look at local government and what is paid by way of rates by local companies which have no representation at all.

Mr. Spearing

The hon. Gentleman knows that about half local government expenditure in this country is based upon an Exchequer grant of one sort or another. That may or may not be right. In terms of rating there are many other ways in which ordinary organisations can make their voice heard, as he will know from his constituency work. The big point which the hon. Member has missed is that any form of local government, large or small, is subject to the sovereignty of the House of Commons in respect of the financial arrangements it makes. Whereas he may object that businesses do not have a representative vote, there is no reason why, if the House thought fit, the legislation, which was changed some little time ago, should not be changed again. The hon. Gentleman may want that. I am suggesting that we are here talking about parliamentary sovereignty, and that is a different thing.

To return to my main point, the fact is that government in any country in the end operates only by consent. Whether it is discipline in schools, whether it is law and order in the criminal sense or whether it is a case of industrial relations, consent and confidence are absolutely vital. That is something which hon. and right hon. Gentlemen opposite, as a result of their background and experience, are learning only by slow degrees. That is why in the House of Commons taxation is only with the consent of the people on whom the taxes are levied. That is why there is also the ancient tradition of "grievance before supply". This is not just a slogan; it is part and parcel of the consent by which the sovereignty of the House is exercised.

If subsection (3) is passed, that goes completely because there will be taxation of a substantially new variety. The right hon. Member for Wolverhampton, South-West (Mr. Powell) explained this excellently earlier today. There will not be a comparable chance of accountability and representation. Some hon. Gentlemen opposite are happy for that to be the case for themselves. But they are all too often on the giving-out end. Many hon. Gentlemen opposite, by their background, have not been on the receiving end and do not know what it is like to live on a small income year after year. They have not looked upon Parliament and the Government as "they" and "them" in a way which is getting dangerous in this country. If they had had that sort of experience, which is the experience of perhaps 90 per cent. of the population, they would not be so glib about voting away the rights of the House over taxation.

That is the key to it. People will accept taxes and legislation only if they have some confidence that they have influence and can change things, can go to an hon. Member and say "We do not like that. Speak against it. Vote against it on our behalf." Parliamentary democracy and accountability is a social safety-valve of considerable significance. At least that is my view.

I come to the remarks of the hon. Member for Lewisham, West (Mr. Selwyn Gummer). He completely missed the point about representation. His speech was one of great facility, which I enjoyed but with which I thoroughly disagreed. If we had a federal European Parliament, as my hon. Friend the Member for Walthamstow, West (Mr. Deakins) suggests many hon. Gentlemen want; his speech might have been apposite. But we have not got that. All that we have is a Minister who occasionally sits on a Council of Ministers, who can act only on a suggestion from the Commission. That is not representation, and the hon. Member for Lewisham, West could not pretend that it was. I fear that his constituents certainly would not think so. The nub of his argument thus falls almost entirely to the ground.

As the hon. Member is here, I would like to put this point to him. He said that we are doing this for a European ideal, that we are to contribute to these "any other expenses" or the other open-ended capital or loan commitments, or whatever, to do good in the world, or words to that effect. He said that we will help to build a united world. Tell that at UNCTAD III! That is directly counter to the facts as we understand them. Consider sugar, which is an emotive word. There was 1 million tons of European sugar dumped on the world market, sugar which was subsidised by the housewives of the EEC, and if the situation were to arise again when we were in the Community it would be subsidised by the housewives and wage-earners of this country. That sugar was dumped on the world market, a market which was very sensitive, in a world in which certain countries depend upon their tropical production of sugar. Perhaps the hon. Member for Lewisham, West, if he says that this great ideal of the European Community is to achieve greater world unity, will explain this 1 million tons of sugar, and the fact that some of our open-ended payment will be to subsidise that sort of dumping on world markets, which is quite contrary to all we understand about proper trade and price relations between third world and ourselves. If the hon. Member wishes to answer the point I am wiling to give way

Mr. Selwyn Gummers

This is the hon. Member's speech and he would prefer to answer my questions, rather than have me answer his. But in view of his remarks would he explain why the EEC has recently made decisions about preferential trading agreements with the rest of the under-developed world which are more generous than any organisation has ever made before?

[Sir ALFRED BROUGHTONin the Chair]

7.30 p.m.

Mr. Spearing

I would question the statement that the arrangements were more generous. The whole point about relations between the EEC and the third world is not necessarily the conditions which the hon. Member has mentioned but the quotas, and we hope that at a suitable time, if the guillotine allows, we shall be able to take this matter up in more detail. I shall be glad to debate the point with the hon. Gentleman then. But the fact, which is uncontested by him, that the EEC dumped on the world market 1 million tons of sugar produced by European farmers places at least a question mark over the EEC's intentions in this respect.

The hon. and learned Member for South Fylde referred to the subscription, and he spoke about the price of entry solely in terms of subsection (3). But the right hon. Member for Wolverhampton, South-West showed us earlier that subsection (3) is a parliamentary bypass. He showed that the power of taxation and the power of granting supply is the power of control and if we give it away we give away our power completely. The subscription which the hon. and learned Member pointed out in his speech is not just the financing of the Bill but the surrender of parliamentary sovereignty as we have understood it in the last 200 or 300 years.

The hon. and learned Member is at liberty to say that he is happy to pay that price, and I see that many hon. Members on the Government side are apparently quite prepared to pay it, too. I hope they will tell their constituents they are prepared to see the accountability of the executive, which is going to have a very great power in this land, made independent of Parliament. Let them say that in their constituency, because that is what they are saying here in voting against the Amendment. They can say they are prepared to pay that price for some ideal or other which they believe in. I challenge any of them now to say that is not so. That is what the right hon. Member for Wolverhampton, South-West has argued, and that is what the Clause is all about.

Hon. Members opposite have every right to say so, but if they are prepared to do away with the accountability of the executive to this House they are destroying the whole process of confidence, the basis of consent on which the structure of our democratic life has been built for 200 or 300 years. The political stability of this country is the envy of the world. That is why we are the Mother of Parliaments.

I feel in speaking on this Amendment as though I am in a nightmare. Who would have thought 10 years ago that any hon. Member like myself or, perhaps my hon. Friend the Member for Walthamstow, West would ever have to take part in this sort of debate? If that accountability goes, if that confidence goes, the whole structure goes with it, and the power resides elsewhere. What are the people to do then? The people of this country are already starting to write off this place. I try to explain why they should not do so. If hon. Members vote against the Amendment tonight, as they will, how much worse will the situation become? People will demand more authority. The Solicitor-General will say that there must be more and better laws and that if what must be done cannot be done by consent people will have to be made to do it, as in the case of industrial relations. Look at the mess he has with the Industrial Relations Act.

That attitude will cause social chaos, and it may be that if the Bill and the Clause go through those of us left in this House will be fighting a rising tide of social unrest and political chaos for the rest of our political lives. The hon. and learned Gentleman can pay that price if he likes, but I beg hon. Members to consider this very carefully, because that is what the subsection and the Bill are about.

Mr. Ridley

The hon. Member for Acton (Mr. Spearing) exaggerated the case he was making, a case which my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) put with greater precision and greater moderation. It may be that the subsection takes away from Parliament the right to control Government expenditure, and it is that to which, very briefly, I should like to address myself.

The way that Parliament has come to control the expenditure of the executive has been, in the main, through agreeing a programme of expenditure and then allowing it to proceed over the years, keeping an eye on its cost. The sovereign decision, the decision involving this House, is the decision whether to start or terminate a programme of expenditure.

With a lending programme, or the borrowing by Governments to finance lending and sometimes other matters, Parliament, having approved a statute that the Government may lend to one group of citizens or to one type of organisation, exercises no further surveillance of that lending, other than the Budget itself. The same may be true if this subsection remains in the Bill because the Government will have power under the Clause to make loans to such organisations as the European Investment Bank and there will be no further approval by Parliament if the Act receives the Royal Assent. These loans will appear in the national accounts and will be part of the Budget and, therefore, I believe my right hon. Friend is wrong in alleging that the Bill changes the system on lending.

Mr. Powell

Perhaps I could point out the difference. In all other cases the amount is limited and the purpose is specified.

Mr. Ridley

The purpose is clearly specified in the Bill which is that loans should be in pursuance of the treaties we are joining. The amount is not specified and it would be difficult for it to be so.

Turning to expenditure grants, rather than loans, Parliament, in addition to giving statutory authority to a programme, has traditionally had Votes each year for the annual cost of that programme. But these have fallen into desuetude and on the Supply Days, when thousands of millions of pounds are voted through on the nod, the subject chosen for debate bears no relation to the financial costs of the programme. Parliament is not wrong to do this. It has done it for many years. Although it is a token form of control, Parliament finds it more convenient to settle programmes through the enactment of legislation and to settle costs through the control of the Budget. The only change which exists in relation to spending is that the annual presentation of an Estimate which will have to be passed by Parliament will not take place. Otherwise it involves the initiation of a new programme—a programme in which the European Communities will pay the costs and provide the loans attendant on that decision.

I believe it is right that there should be no ceiling on lending and that there should be no presentation of an Estimate to Parliament. It is right because by joining the Communities we have undertaken an obligation to make these payments. Having undertaking that obligation, it is ridiculous and silly to say that, although we have promised to do this, we wish every year to go through a ritual dance of pretending to pass things which we know we shall have to pass. The decision will be whether or not we should come out of the Community.

If the price is more than a country wishes to pay, there are two alternatives. One is that the country concerned should pay it; the other is that it should come out of the Communities. To remain in the Communities and to vote against the estimate in Brussels is the one course which makes no sense; and it would be totally unconstitutional because we would be voting against an obligation which we have undertaken. Therefore the Amendment is rubbish, and I intend to vote against it.

We are voluntarily undertaking to go into the Community to achieve certain objects. The symbol of that co-operative effort is that the budget of the Community is its own and is not granted by permission of the national Parliament.

The second point, which is entirely different, relates to the common agricultural policy. The vast bulk of the money will go to finance the CAP. This has been universally condemned by opponents of the Common Market and also by the majority of people who are in favour of joining Europe. The CAP was described by the right hon. Member for Stepney (Mr. Shore) in the following words: No serious person in Britain or Europe wishes to justify the CAP. I claim to be a serious person and I wish to justify the CAP. I wish to do so by saying that as a result of accident or mismanagement in the past there exists in France, Germany, in other countries to a lesser extent, and in the South of Italy perhaps to a greater extent, millions of farmers who practise farming in a peasant way and are far from efficient or mechanised. The result is that their prices of production are high and their standard of living is appalling low.

Those right hon. and hon. Members opposite who profess to be Socialists and put as their first priority the care of those in need and those who live in poverty have attacked the common agricultural policy, and in doing so they are attacking the poorest people in the land. They are attacking them, first, because they are agricultural instead of industrial—[Hon. Members: "No."]—and, secondly, because they are foreigners instead of nationals. I believe this to be a disreputable point of view. I personally believe that if one looks for a good cause in Europe the best cause one can find both in this country and in the Six is to rehabilitate European farming so that those working in it can get a decent living.

Mr. Deakins

I realise that the hon. Gentleman is not an agricultural expert and would not claim to be one, but does he not appreciate that those of us who are opposed to the CAP are arguing not against a common agricultural policy in principle but against this particular common agricultural policy which does not even succeed. This is why we have the Mansholt reform plan which seeks to give farmers an amount of money to enable them to have a decent standard ofliving—a standard of living which year by year falls below that of the rest of the population in Europe.

Mr. Ridley

I am grateful to the hon. Gentleman for reminding me of the Mansholt plan. It is an instrument which, however modified, will give these poor people, who number many millions, an opportunity to leave farming or obtain gainful employment in industry or to modernise and mechanise their farming operations so that they can earn a proper living. The funds which we shall contribute under this subsection will go to implement the Mansholt plan. I can think of nothing more honourable and worthy as an objective.

There has been a certain tongue-in-cheek attitude over this matter. Practically all the British, whether they are in favour of or against joining the Common Market, say "The common agricultural is ridiculous and we must stop spending so much money on feather-bedding European farmers". They say "Look at us in Britain. We have a desperate regional policy problem; we have unemployment and are experiencing a lack of industrial development in half of our country. Surely we should stop spending money on these farmers and spend more money on British regional development".

I am not against spending more money on British regional policy, but it does not sound convincing to a European. The European can see us coming a mile off. All we do is to go into every conference room and say "Abolish CAP and have a bigger and better regional policy". This is all too obvious. If we think that charity begins at home and that our first priority should lie in regional policy, equally we must acknowledge the case for CAP and for helping the European farmer to modernise and improve. This is as strong as, if not stronger than, the case for regional policy.

Mr. Marten

I know that my hon. Friend is concerned about the poorer farmers—for example, those in Southern Italy and also those in certain areas of France. However, on the question of sugar within the common agricultural policy, when it comes to renegotiation these people will be competing with Commonwealth sugar producers in the developing Commonwealth countries. Which, in my hon. Friend's view, will have priority, the Commonwealth developing countries or the poorer people in the industrial countries of Europe?

Mr. Ridley

These are questions which I hope we can work out in future with our European friends. I would remind my hon. Friend that 35 per cent. of sugar which comes in under the Commonwealth Sugar Agreement comes from Australia. We must get our priorities right.

I end by saying that those who wish to set right the problems involving sugar, exports from underdeveloped countries, surpluses and shortages, the beef problem and other agricultural problems have a glorious and golden opportunity to work towards a solution. If Europe has a bad policy, if the CAP is not perfect as an instrument, let us at least accept its objective and its ends and see whether we can improve its means. We know that we cannot do this without the centralised resources which will enable the necessary funds to be invested.

Let us pass this subsection unamended, because it gives an opportunity to put these things right. I cannot understand why there is such continuing opposition to the central theme, the ideological gem at the centre of the Common Market—opposition from those who fear domination, who are frightened of the future and who, like the hon. Member for Ilkeston (Mr. Raymond Fletcher), are looking only to the past.

7.45 p.m.

Mr. Farr

As the debate draws to a close it must be said that we have heard many speeches of quality. We have heard my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) warn us of what will happen if we pass subsection (3) and of the fact that we shall lose all control of the money to which reference is made in the subsection. One of my hon. Friends was suggesting that we should not mind too much that we should lose control of the money, but we must look at the matter as one of 10 nations. In other words, we must rejoice in the fact that we shall have a tenth of a say in the expenditure which will be sent to Brussels in the form of revenues which we shall be raising.

If subsection (3) is not the heart of the Bill—and I do not think the Bill has a heart—it must be said that it is the guts or the nuts and bolts of the Bill. Long before this debate began we must all have decided how we would behave in the Division Lobby tonight. The Bill without subsection (3) will be largely ineffective.

I should not detain the Committee long, but I wish to examine one point which has not been discussed. This relates to the manner in which the £400 or £500 million per annum net, which will be left in Brussels arising from the charges we shall make in this country, will be utilised in Brussels. Various estimates have been made and the most current is that made by my right hon. and learned Friend the Chancellor of the Duchy of Lancaster in July, 1970, who said that the net annual deficit will be about £470 million per annum.

How will that money be utilised by Brussels in 1973 and each year thereafter as it will probably increase? It seems certain from what we have heard from the Mansholt plan that this money will be used to modernise European farming. It will probably be spent on amalgamating farms and giving cash bonuses to those who allow their farms to be amalgamated. No doubt generous cash handouts will be given to farmers who retire early. These are laudable objects, but we must remember when we vote tonight that this will be done largely with money provided from this country. Not much will return to this country when those objectives are pursued.

What shall we get back from a policy of encouraging amalgamation of farms? It must be remembered that the average farm size in the Six is 20 or 21 acres; the average farm size in this country is about 100 acres. Not much of the money will be spent in this country on farm amalgamations. What shall we get from it in terms of the improvement of our own farming? On every count of efficiency, whether it be size of herd of cattle—incidentally, the average herd size here is three times that in Europe—yield of crops per acre, or any other count, farming in this country is far more efficient than it is in the Six.

No country in the Six has a record to equal that of British agriculture, with an annual increase in productivity of 6 per cent. Therefore, I have come to the reluctant conclusion that if subsection (3) remains in the Bill, European farmers will be given an opportunity to catch up to the level that British fanners enjoy today, while British farmers mark time for a decade or more. What is more, they will do it at our expense.

My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) recognised this. He seemed to accept it. I hope that he will be able to explain it in his constituency. It is not a view that I have heard expressed by any Government spokesman on the subject. Apparently, my hon. Friend accepts with equanimity the prospect of our contributions to Brussels helping to bring up the level of the standard of living of Italian peasants. I wish that my right hon. and learned Friend the Chancellor of the Duchy of Lancaster would make it clear in the country that that it is where our levies will go. That worthy object will be achieved at a price. The price is that British agriculture will stay where it is for a decade or so while European farmers catch up at our expense.

Mr. Tilney

Does not my hon. Friend agree that in recompense for that those engaged in industry will have the benefit of being able to catch up with the standard of living of the industrial countries of the Community, bearing in mind that we are 94 per cent, an industrial country?

Mr. Farr

The point that troubles me is that my right hon. and learned Friend has never made this clear to the National Farmers' Union and to British agriculturists. If he were to do so, I believe that there would be a considerable withdrawal of the present wholehearted support of British farmers for the Government's approach to Europe.

I look forward to hearing what my hon. Friend the Chief Secretary says, though I must be frank and say that, whatever he has to say, I shall not support him. I hope that the subsection will be deleted from the Bill.

Mr. Patrick Jenkin

I can agree with my hon. Friend the Member for Harborough (Mr. Farr) on one point, and that is when he said that we have had an extremely good debate with speeches of a very high quality.

I find it surprising that it is now 3½ months since I last took part in any proceedings on this legislation. It was as long ago as 22nd February that I moved, and the House accepted, the Money Resolution and the Ways and Means Resolution necessary to support the Bill. Despite the passage of time, I am sure that the Committee will have recognised many echoes of that debate, when we went over much of this ground, and I make no apology if in what I say there is some repetition of the points that I made to the House on that occasion.

I am glad to see the hon. Member for Ebbw Vale (Mr. Michael Foot) in his place, because I am entitled to say that the point that I made and that he was good enough to acknowldege that the two Financial Resolutions that we passed then would in no way restrict debate on this part of the Bill has been amply borne out by what has happened today.

Mr. Marten

Except the guillotine.

Mr. Jenkin

I was talking about the effect of the Financial Resolutions.

Before I come to the many interesting points and seek to answer some of the pertinent questions asked by the right hon. Member for Stepney (Mr. Shore), among others, I think that it might be helpful if I spelt out precisely what is entailed in the financial provisions contained in Clause 2(3). In the course of that, I shall be answering some of the questions asked from both sides of the Committee.

The subsection is needed in order to provide parliamentary authority for the expenditure which will be entailed as a consequence of our joining the Communities. The first part of the subsection, down to the semi-colon in line 24, contains the authority for our payments to the Communities, to member States and to the European Investment Bank; it also authorities the redemption of notes or obligations issued or created in respect of any of these payments.

The next Amendment we shall be coming to, Amendment No. 419 is directed to that part of the subsection which charges these payments to the Consolidated Fund. Although a number of hon. Members have raised points about the appropriateness of that procedure, I hope that I shall be forgiven if I leave that part of the argument to the debate on Amendment No. 419. It seems to me that that Amendment is directed specifically to that, and perhaps it will make for more orderly debating if I dealt with this matter, assuming that I caught your eye, Sir Alfred, during the course of the debate on the next Amendment.

Let me deal with the various payments in turn. I take first our payments to the Communities. These will consist, in the first place, of certain capital payments at the outset to the ECSC, and secondly, our contributions to the annual budget of the Communities. Taking first the Coal and Steel Community payments, the Committee will know that under Protocol 24 of the Treaty of Accession, we agreed to make a contribution amounting to some £24 million to the Coal and Steel Community's accumulated reserves. This is by way of an entrance fee in order to entitle us to have access to these reserves.

Perhaps I should explain that these reserve funds, which now amount to about £90 million, have been built up mainly as a result of the levies collected being in excess of expenditure in the early years of the Community's existence. The levies themselves are paid by the relevant industries at a current rate of about 0.3 per cent. per annum of the average value of the products concerned and are used to make grants for the retraining and re-settlement expenses of redundant coal and steel workers and also to make grants for coal and steel research.

The important point to note is that the United Kingdom confidently expects to be a net beneficiary in the levy arrangements, mainly because we are facing a continuing run-down of the labour force in our coal and steel industries in circumstances precisely appropriate to the purpose of the funds.

Mr. Marten

To what extent shall we benefit?

Mr. Jenkin

It is not possible at this stage to say, but we expect to be a beneficiary.

The accumulated reserves, however, to which our entrance fee will entitle us to access, are available for different purposes. They are mainly used for loans to coal and steel firms, for loans for housing for workers in the industries, for loans to new industries wishing to establish themselves in declining coal and steel areas, and for various other purposes. Thus I think the Committee will be satisfied that in return for our subscription of about £24 million we shall gain access to funds which could be of the greatest help to our coal and steel industries in the difficult years which they face.

Mr. Marten

My hon. Friend has just made that statement, but there must have been some discussion about the extent to which in broad terms we are expected to benefit. May we have some guidance?

Mr. Jenkin

I should like to help my hon. Friend the Member for Banbury (Mr. Marten), but I am afraid that I cannot at this stage. What I can say is that we expect to be net beneficiaries.

The second main item in the expenditure that falls under the subsection is our contribution to the Communities' budget. This arises by virtue of the Community Decision of 21st April, 1970, and the so-called Financing Regulation of 2nd January, 1971. These instruments provide that from 1st January, 1971, various payments should be made by member States to the Communities' budget and should constitute the Communities' own resources. These payments comprise, first, the agriculture levies, and second a gradually increasing proportion of Customs' duties, in each case less 10 per cent. collection costs.

An important point to note is that the effect of the instruments is that these sums are to belong automatically to the Communities, the member States acting as collecting agencies. On 1st January, 1975, the balance to meet the Community budget is due to be made up by a proportion of the proceeds of a harmonised VAT—up to a maximum of a 1 per cent. rate. Until unanimous agreement is reached on a harmonised VAT, that provision cannot apply. Until then, member States will make up the balance needed to finance the Communities' budget by making contributions based on GNP.

I have so far dealt with our payments to the ECSC and to the Communities budget, and they as it were constitute the first element.

The second element covered by the subsection consists of payments to member States. These may arise in two ways. The first, which is likely to be very minor, could arise as a result of the operation of the so-called correctives which are applied in calculating a member State's share of the Community budget. The second may arise under the Community scheme for medium-term support to member States who face balance of payments difficulties. The Committee will know that the purpose of this scheme is very similar to that of the IMF facilities and the United Kingdom has accepted a maximum lending obligation under the scheme of £250 million.

The third element consists of payments to the European Investment Bank. It is not perhaps necessary for me to describe the operations of the Bank at great length. The Committee will know that it has made a notable contribution to the development of the regions in the Community, and it will certainly be a useful additional source of finance in this country. We have agreed to a contribution to the paid-up capital of the Bank of £37.5 million, and in addition we shall be required to make a proportionate contribution to the reserves of the Bank as they will stand at the end of this year. We estimate that the sum will be roughly £20 million. These payments will be made in five equal instalments, the first in cash, and the rest in the form of non-interest bearing and non-negotiable promissory notes.

Here I should mention the point raised by my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), who sought to base an argument on the passage beginning in line 23 …or to redeem any notes or obligations issued… It is because the subscription to the EIB will, after the first one, take the form of non-negotiable promissory notes that these words are necessary in the provision to allow us to make the payments. However, the Bill says …issued or created in respect of any such Community obligation… Those words cannot be used to relate to obligations arising otherwise than under subsection (3).

Mr. Powell

Does my hon. Friend say that it is limited in practice to contributions to the Bank? In terms, the provision covers the whole of the preceding part of the Clause.

Mr. Jenkin

That is right in theory; any of the obligations in the preceding part of the Clause which are in the first place discharged by the issue of a note. That note subsequently could be redeemed. What is envisaged as a matter of practice is that it is only these payments to the EIB which will take the form of non-negotiable promissory notes.

I should perhaps also mention that member States could be required to make loans to the Bank for specific projects. However, the Bank's normal method of operating is that it raises the finance it needs on the capital markets; it has not so far found it necessary to invoke the power to raise loans from member States, and it is unlikely to do so in the future. Nevertheless we felt it right to make provision in the Bill for this remote eventuality, and that is the explanation of the words in line 22 or in respect of loans to the Bank". I have so far been dealing with the subsection down to line 24, and I must now turn to the rest of it.

Paragraph (a) deals with all the other expenses arising under the Treaties or the Bill and provides that these should be charged to Votes. Broadly they consist of domestic expenditure. The main element will be the expenditure involved in carrying out the price support system of the CAP; of course, this will be broadly matched by corresponding receipts into the Consolidated Fund from FEOGA. We shall also have to meet the domestic expenses of the Intervention Board, and there might well be payments made by the Department of Trade and Industry on schemes enabling us to take advantage of the ECSC grants. My right hon. Friend the Member for Wolverhampton, South-West pointed out the difference and asked why, if these payments could be made by Votes, all the rest could not be made in the same way. All I can tell him is that the nature of the payments is different from the main Community payments, but perhaps we can return to this argument on the next Amendment.

Mr. Powell

My hon. Friend confirms, does he, that there is as much obligation to make the payment in paragraph (a) as there is to make any of the other payments with which the subsection is concerned?

Mr. Jenkin

There is not the same automaticity. That is the key, but perhaps we can explore this on the next Amendment.

Paragraph (b) refers to receipts and provides that all receipts arising from the Treaties or the Bill must be paid into the Consolidated Fund or, if the Treasury so decides, into the National Loans Fund. Receipts fall into two groups—from the Communities, and from domestic sources. The main receipts from the Communities will be from FEOGA, though there will be some from the European Social Fund. There will also be some from the ECSC. Domestic receipts will be the agricultural levies and Customs duties which, subject to the transitional arrangements and the refund for collection costs, will be paid over eventually in full to the Communities under their own resources system.

I apologise to the Committee for having spelled this out again in detail. It is complicated, and I believe that the Committee would wish the position to be made clear. Perhaps more important, I hope that by what I have said in describing the nature of the payment and the nature of the obligations which we shall undertake on ratification of the Treaty it has become apparent to the Committee that the subsection is needed and is an essential part of the Bill, and that without it there would be no standing cover for the payments arising under the Treaties or under the Bill.

It would, I suppose, be possible in theory for all these payments to be included in annual Estimates presented in the normal way and be the subject of Votes without any such standing cover, but even if that were done it would be most unusual, not to say unconstitutional, for a Bill with financial consequences of the major kind which I have described to have no standing financial cover at all. Indeed, I suggest to the Committee that it would be a matter for serious criticism. It is for that reason that the Amendment cannot be accepted, and at the appropriate time I shall only be able to advise the Committee to reject it.

Mr. Deakins

Can the hon. Gentleman explain the meaning of the words in paragraph (b) save for such sums as may be required for disbursements permitted by any other enactment"?

8.15 p.m.

Mr. Jenkin

I was coming to that, but perhaps I can deal with it now because it is a point which merits an answer.

That phrase is linked primarily with Section 10 of the Exchequer and Audit Department Act, 1866. That Section provides that the Commissioners of Customs and Excise are able to deduct certain outgoings before paying over their gross revenues to the Consolidated Fund. The outgoings are mainly the clawback payments, the statutory repayments of duty on exported goods or goods used for specified purposes, and repayments where excess duty has been paid. If the saving words had not been included in paragraph (b) the Commissioners would have had to pay over all their revenues into the Consolidated Fund without having the power provided by the 1866 Act to make these necessary deductions.

If those saving words were not included, any contrary provision, including that in Section 10 of the 1866 Act, would have had to yield to the wording in paragraph (b), by virtue of the provisions of subsection (4) that any enactment passed or to be passed…shall be construed and have effect subject to the foregoing provisions of this section". In addition, the saving phrase in subsection (3)(b) covers the Treasury's powers under Section 2(2) and (3) of the Public Accounts and Charges Act, 1891, to specify that funds can be treated by Departments as appropriations in aid for their votes, and here I come to the point made by my right hon. Friend the Member for Wolverhampton, South-West who suggested that this represented a dangerous and unconstitutional increase of the power for receipts to be applied as appropriations in aid. I think that I can set my right hon. Friend's mind at rest. In every such case there has to be a Treasury direction before any receipt can be applied as an appropriation in aid, and Treasury Ministers will be as fully answerable to the House under this procedure as they are present.

Mr. Powell

Surely this goes very much further than the present practice? At present, appropriation in aid is permitted within a single Vote, whereas this would appear to permit—I do not think the expression is correct, but perhaps it is graphic—a virement of the appropriation in aid as between—not merely one vote and another—but between these receipts and the whole range of the ordinary Votes. This seems to go very much further than present practice.

Mr. Jenkin

I am not sure why my right hon. Friend makes that assumption. It seems to me that the Treasury, which has this general power, is most meticulous in making sure that appropriations in aid are expressly limited to the purposes for which the expenditure is incurred, and I have no reason to believe that things will be any different as a result of this subsection.

Mr. Powell rose—

Mr. Jenkin

I am sorry, but I must get on and deal with some of the other arguments which have been deployed during the debate.

One major theme running through the debate—it was deployed at some length by the right hon. Member for Battersea, North (Mr. Jay)—is that the burden represented by these obligations will constitute a threat to our balance of payments. Let me restate as simply as I can our assessment of the balance of payments effects of entry into the Communities.

No one has ever disputed that the costs which can be identified—the Budget contribution and the increased cost of food imports—are significant. Taken together they might amount to up to £250 million by 1977. But the additional burden on the balance of payments which we shall have to absorb will begin at a level of about £100 million a year in 1973. It will build up only gradually. Moreover, the figure needs to be kept in perspec- tive. In relation to the large aggregates which make up our balance of payments, the costs arising from EEC entry are not out of line with the kind of random and cylical swings which we expect to be able to handle without much difficulty in the ordinary course of events.

Last year we had a record balance of payments surplus on current account of nearly £1,000 million. This was due to a surplus on visible trade, where we normally and indeed almost invariably expect to incur a deficit, and it was due also to a further increase in our invisible surplus. As a result of the Government's expansionary measures to stimulate the economy we expect imports to rise faster this year.

So far this year export performance has been rather sluggish. This is partly a reflection of a general slackening in world trade as well as of special factors, such as the coal strike. But exports should recover once the expansionary policies being followed in most industrial countries lead to renewed growth in world trade. Visible earnings continue to be buoyant. The current account surplus will thus be lower than last year, but perfectly adequate for our needs. Moreover, our reserves are high, and we have repaid all outstanding official short- and medium-term debt.

Mr. Jay

Would the hon. Gentleman not give an estimate, as the Chancellor of the Duchy did even in July, 1970, of the net contribution which this country would have to make after the transitionary period is over?

Mr. Jenkin

We have heard a lot in previous debates of what has been referred to as the "numbers game". I will not be drawn into making what would be bound to be highly speculative and uncertain guesses where the margins of uncertainty are far greater than any possible advantage which could accrue from giving the figures.

I cannot accept that the balance of payments implications bear any resemblance to the extravagant dangers which have been enlarged upon by the right hon. Member for Battersea, North and his right hon. Friend the Member for Stepney.

Some pertinent questions have been asked by the right hon. Member for Stepney. He asked first about the forecasts for the Community budget in 1973 and 1974. These forecasts have been made by the Commission. The figures have been prepared and they have been forwarded, among others, to the European Parliament and other European institutions and they have been made available to member States. The United Kingdom Government has the figures and are making arrangements that they should be put in the Library in a suitable form.

But perhaps I can summarise the figures as they stand. I emphasise that they are at current prices, not on a constant price basis. In 1972, to give the base figure, the budget was 3,400 million units of account, approximately £1,400 million. In 1973, the figure will be 3,650 million units of account, equivalent to about £1,500 million. In 1974, it will be 3,900 million units, equivalent to about £1,600 million. Of course, these figures take into account the likely impact of inflation, but I would stress that they are provisional and that past experience has shown that they have been frequently revised, so I can only advise the Committee to treat them with caution.

One point worth making is that they make provision for rather higher expenditure, on, among other things, regional policy, than does the budget for the current year.

Mr. Shore

Do those figures refer to the total budget of the Community or to the agricultural budget?

Mr. Jenkin

I will come to this, because some of the figures that the right hon. Gentleman mentioned were on a different basis and I think that I can explain this.

I was also asked whether changes since the White Paper was published in July last year would lead us to make any change in the estimates in it. We see no reason at present to depart from the estimates which we then gave. In particular we see no reason to suppose that the agricultural price increases agreed in the Community in March, when taken together with the movement in world prices which has taken place, would significantily increase the size of the Community budget.

The Commission has not yet published its results of the revisions necessary as a result of the price changes, and there- fore we see at present no reason to make any adjustment for ourselves.

Sir Robin Turton

Could my hon. Friend explain exactly what he is telling us? I have here the figures submitted to the Council on 1st September 1971, which are, curiously enough, about 1,000 million more units of account than those which he has given.

Mr. Jenkin

This is the same question that the right hon. Member for Stepney asked and I think that I will be be able to answer it.

One or two hon. Members referred to any change of impact on food prices as a result of the price increases agreed. My right hon. Friend the Minister of Agriculture on 11th April gave a Written Answer to the hon. Member for West Ham, North (Mr. Arthur Lewis), of which the core was: …it is now estimated that the effect on retail food prices in the United Kingdom would be about 2 per cent. per year over the transitional period. —compared with the figure of 2½ per cent, which was in the White Paper. Similar considerations apply to the estimate of the effect on the Food Import Bill, and the combined effect of the EEC price increases and changes in world prices is to reduce somewhat the White Paper estimate."—[Official Report, 11th April, 1972; Vol. 834, c. 168.] I come to the rather complicated point raised by the right hon. Member for Stepney and to which my right hon. Friend the Member for Thirsk and Malton (Sir Robin Turton) has just referred. A substantial part of the right hon. Gentleman's speech was related to the future size of the Community budget. He sought to compare the figures in paragraph 93 of last year's White Paper with a figure which he quoted, and I suspect that these are the same figures which my right hon. Friend has—of 4,100 million units of account, or approximately £1,700 million for the current year, 1972.

The right hon. Gentleman drew the conclusion that, by comparing that figure with the figure in paragraph93, as he put it, one saw that already the Community budget was above the 1977 figure predicated in the White Paper. There are three points of substance to show that that conclusion simply does not begin to be justified.

The first is the obvious one, that the figures in the White Paper were expressed at constant prices and therefore make no allowance for inflation. Therefore, as inflation is already having some effect, this will obviously have to be taken into account.

But, more significant, the £1,700 million includes substantial sums attributable to earlier years. Under the guidance and guarantee arrangements of the Community, FEOGA expenditure accounts for earlier years are kept open for several years after the year to which they relate. Nevertheless, the sums which are likely to be disbursed in the later year are added to the current budget of that later year. They are, of course, kept separate and, by definition, they are not sums to which we as new applicants can be asked to make any contribution. So those sums are left out of account and then one comes back to the earlier figures that I quoted, which are the real figures.

8.30 p.m.

The third element is that the 4,100 million units of account include what are called the Mansholt reserves. It is generally recognised to be highly improbable that all or even any of the reserves will be called up, but the 1972 figure has to include them because in theory they could be a potential liability.

For these three reasons the figure of 4,100 million, from which the right hon. Member for Stepney drew certain conclusions, is not comparable with the figure in paragraph 93 of the White Paper or with the figures which I have quoted to the Committee. Naturally there is bound to be some variance between the figures, but the divergence is nothing like as great as the right hon. Member for Stepney seemed to think and I hope that what I have said will be some reassurance to him.

A number of other questions were asked, but I have sought to concentrate on those questions which have dwelt on the costs of entry. My hon. Friend the Member for Lewisham, West (Mr. Selwyn Gummer), my hon. Friend the Member for Flint, West (Sir A. Meyer) and my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) pointed out that the costs of entry were only part of the picture. With a favourable economic environment at home, which is what our policies are designed to create, membership of the EEC will undoubtedly help us to improve our economic performance.

It is in this connection that I will mention four ways by which this can be achieved. First, membership will provide greater opportunities for our exporters. An enlarged Community will be an enormous market, guaranteed—I stress the word "guaranteed"—permanently free from tariffs or quota control. This is an economic factor of enormous importance and if hon. Members cast their minds back to 15th August last year they will see what can happen to a major market overnight. They will appreciate what can happen when countries are enabled to put on tariffs, surcharges or other restrictions. We shall get a major advantage from joining the Community.

Second, access to this large and fast-growing market will allow British companies to take full advantage of specialisation and economies of scale, so enabling them to plan ahead with confidence.

Third, increased competition will improve efficiency in British industry.

Fourth, these improvements in opportunities, confidence and efficiency will raise both the quantity and quality of investment in British industry. None of these things will happen automatically—[Interruption.] Nobody has ever said that they would—but membership will create a framework within which it will be possible for a radical transformation to take place in our disappointing economic growth, under Governments of both parties, since the war.

I take great comfort from and confidence in the fact that the overwhelming majority of British industrialists—those who will have to take the action which will result in our reaping these benefits—are firmly convinced that what I have said is the case. I am talking about industrialists and firms who provide the employment, sell the goods and win the exports. They are full of confidence.

The main burden of the case made by hon. Gentlemen opposite has been that these financing arrangements represent an appalling burden which we cannot sustain. Again I make the point and I do so with great firmness, that there is nothing in this arrangement, barring the transitional arrangements negotiated by my right hon. Friend the Chancellor of the Duchy of Lancaster, which was not known to the Labour Government.

It was in December, 1969, that the members of the Community agreed in principle on a new system of financing the Communities, and this was referred to in considerable detail in the Labour Government's White Paper of February, 1970. In the debate on the Financial Resolutions I challenged the right hon. Member for Stepney to say what was new in the Bill or in the arrangements which I then described and which I have described again today. I asked him to say what was new or what was not known to the Government of which he was a member before the last General Election. I never received an answer. The Solicitor-General repeated the question at the end of that debate and he never received an answer—at least not one that would wash.

Any hon. Gentleman opposite who supported our application in 1970 or who was a member of the last Labour Government cannot now be heard to argue that these arrangements are intolerable or cannot be sustained. The right hon. Member for Stepney used some extravagant language in this context. They were known then and they were accepted then. These provisions simply give the necessary statutory authority for the 1970 arrangements, and I therefore ask the Committee to reject the Amendment.

Mr. Shore

I am sure that until the Chief Secretary's record got stuck in the groove of his last few sentences his general intention was to be helpful and to attempt to answer the pertinent questions which have been asked by hon. Members on both sides in discussing these important issues.

The hon. Gentleman's comments helped a little to elucidate the various categories of expenditure authorised by the Clause, and I was grateful for what he said about my remarks concerning the 1972 figures as they appeared in the annual report of the Communities as compared with the estimates which appeared in the Government's White Paper. I am grateful for his comments on that matter. I will look at the figures he has given at leisure and with even greater care.

My main object in dwelling on these figures was not so much to demonstrate a particular figure as being accurate or significant but to point to the trend of growth of the Community's budget not merely over the last year or two but back to the beginning. It has been a remarkable growth. If we lok at that growth against the commitments that are entered into by the Government under Clause 2(3) and the arrangements made in April, 1970, about which we shall have yet another boring word in a moment, the effect of these two things together is undoubtedly severe and heavy on our balance of payments and quite disproportionate in its effect on Britain.

The Chief Secretary did not attempt to answer the case put forward by my right hon. Friend the Member for Battersea, North (Mr. Jay). At least, the answer he gave on the total balance of payments aspect, which I did not touch upon, was extraordinarily complacent and not what one would have expected.

I understand that there must be a little euphoria left in the Treasury as it has been presiding for the last two years over the phenomenon not only of post-1967 devaluation but post-1969 currency realignments and 1971 currency realignments, a situation which has been favourable to Britain't trade. In addition, it has had such benefit, if one can call it benefit, arising from the recession which its own policies have imposed on a large part of the country, which has led to a falling off of imports.

But the balance of payments surplus that we had in 1970–71, against which the figures we have quoted at the present time do not look terribly menacing, are wholly unrepresentative. Within a year's time the picture will be different. The Chief Secretary made no attempt to describe the implications of his own estimate of at least £700 million net payment, in the first quinquennium in reference to our reduced contributions. After that I am sure he will agree that, however much he may wish not to give figures, there will be a substantial increase in the years that follow.

That is the burden which we undoubtedly face, against which there is no earthly reason to believe that the other arrangements of membership will balance. They will not. One must not be over-emphatic about this matter, but there is no evidence and no real reason to believe that we shall gain more by getting rid of our own tariffs and pulling out of the preference system to which we now belong.

There is not a great deal in it. Right hon. Gentlemen opposite have told us that it is their expectation that for a few years we shall be worse off as a result of the changes in trading effects in leaving two preference clubs and joining a third. That is their estimate. Certainly they are not entitled to argue now that we shall be better off and that one can offset the result of being better off against the burden that this system of Budgetary payments is bound to impose upon us.

Colonel Sir Tufton Beamish (Lewes)

Will the right hon. Gentleman give way?

Mr. Shore

No. The hon. and gallant Gentleman has taken little or no part in the debate, there is not much time, and there are other important matters to be discussed.

Underneath the argument about the size of our contributions there has been the very important worry, expressed by everyone, about what is involved in the loss of control under Clause 2(3). We shall no doubt hear more about the Chief Secretary's defence of this matter later.

It is not clear to me, taking account of the Chief Secretary's contribution on 22nd February and his contribution today, whether his main approach is that it is an essential part of the business of joining the EEC that we should relinquish control in this way, or whether, to use his word, it would be unconventional and strange if we did not supply a continuing cover to these payments. It is not the kind of point on which one can get men to go to the stake or, indeed into a particular Lobby. It would be a little odd not to supply a continuing cover.

I have a feeling that something more important is involved in the hon. Gentleman's mind. I think that what is involved is his own philosophy that we have lost control, that it is not our money any more, and that, as he once put it to us, it flows from the British people to their new tax authority. I take account of the objection which was taken earlier to my use of the phrase "tax master". I thought I used the expression "tax master" quite properly. We did not have any part in framing these taxes which we are to pay. We may become partners in or part-authors of future impositions if the Chief Secretary has his way, but we should not pretend that these are British taxes. They are not. They are imposed upon us as part of the conditions of entry which the Chancellor of the Duchy negotiated, and wrongly negotiated. That is the most important matter that we face. We are undoubtedly losing control. How much we shall hear more about in the debate that is to follow.

I do not believe that it is essential to a customs union to have a method of financing based upon so-called "own resources". My hon. Friend the Member for Walthamstow, West (Mr. Deakins) made a point of great force when he said that this was basically a federalist Measure. It is not crucial to the working of a customs union. It may be that a customs union needs revenue, but there is nothing to indicate that that revenue has to be obtained only by the ceding of the power of taxation in perpetuity by the member countries of that customs union to an authority which it has set up.

We on this side are accused by some very odd people of not being concerned about our fellows in Europe or of not showing sufficient international spirit. I must point out to those who make this silly accusation—I do not believe in throwing accusations of this kind about—that what should genuinely concern them is, in a sense, the counter-charge to which they are inevitably exposed: that they have insufficient concern for democracy itself. I do not pretend that there is not a genuine dilemma here: that in order to have a supra-national authority we have to destroy our own democracy. However, that puts the onus all the more strongly on those who advocate surrender of our democratic power to demonstrate that we are handing over to another democracy which is equally well founded in the people as is our own. It is their inability to do this which undermines wholly their case and undermines it in particular because they have not asked the British people first whether they are prepared to start on this process of ceding their own democratic powers.

It is with that in mind that I ask the Committee to consider our Amendment favourably and to vote for it.

Question put, That the Amendment be made: —

The Committee divided: Ayes 252, Noes 258.

Division No. 212]	AYES	[8.46 p.m.
Abse, Leo	Fletcher, Ted (Darlington)	McNamara, J. Kevin
Allaun, Frank (Salford, E.)	Foot, Michael	Mahon, Simon (Bootle)
Archer, Peter (Rowley Regis)	Ford, Ben	Mallalieu J. p. W. (Huddersflild, E.)
Armstrong, Ernest	Forrester, John	Marks, Kenneth
Ashley, Jack	Fraser, John (Norwood)	Marsden, F.
Ashton, Joe	Freeson, Reginald	Marshall, Dr. Edmund
Atkinson, Norman	Garrett, W. E.	Marten, Neil
Bagier, Gordon A. T.	Gilbert, Dr. John	Mason, Rt. Hn. Roy
Barnett, Guy (Greenwich)	Ginsburg, David (Dewsbury)	Meacher, Michael
Barnett, Joel (Heywood and Royton)	Gourlay, Harry	Mellish, Rt. Hn. Robert
Baxter, William	Grant, George (Morpeth)	Mendelson, John
Benn, Rt. Hn. Anthony Wedgwood	Grant, John D. (Islington, E.)	Mikardo, Ian
Bennett, James (Glasgow, Bridgeton)	Griffiths, Eddie (Brightside)	Millan, Bruce
Bidwell, Sydney	Griffiths, Will (Exchange)	Miller, Dr. M. S.
Biffen, John	Hamilton, William (Fife, W.)	Milne, Edward
Bishop, E. S.	Hamling, William	Mitchell. R. C. (S'hampton, Itchen)
Blenkinsop, Arthur	Hannan, William (G'gow, Maryhill)	Moate, Roger
Boardman, H. (Leigh)	Hardy, Peter	Morgan, Elystan (Cardiganshire)
Body, Richard	Harper, Joseph	Morris, Alfred (Wythenshawe)
Booth, Albert	Harrison, Walter (Wakefield)	Morris, Charles R. (Openshaw)
Bottomley, Rt. Hn. Arthur	Hart, Rt. Hn. Judith	Morris, Rt. Hn. John (Aberavon)
Bradley, Tom	Hattersley, Roy	Moyle, Roland
Brown, Bob (N'c'tle-upon-Tyne,W.)	Heffer, Eric S.	Murray, Ronald King
Brown, Hugh D. (G'gow, Provan)	Hooson, Emlyn	Oakes, Gordon
Brown, Ronald (Shoreditch & F'bury)	Horam, John	Ogden, Eric
Buchan, Norman	Houghton, Rt. Hn. Douglas	O'Halloran, Michael
Buchanan, Richard (G'gow, Sp'burn)	Howell, Denis (Small Heath)	Oram, Bert
Butler, Mrs. Joyce (Wood Green)	Huckfield, Leslie	Orbach, Maurice
Callaghan, Rt. Hn. James	Hughes, Rt. Hn. Cledwyn (Anglesey)	Orme, Stanley
Campbell, I. (Dunbartonshire, W.)	Hughes, Mark (Durham)	Oswald, Thomas
Cant, R. B.	Hughes, Robert (Aberdeen, N.)	Owen, Dr. David (Plymouth, Sutton)
Carmichael, Neil	Hughes, Roy (Newport)	Padley, Walter
Carter, Ray (Birmingh'm, Northfleid)	Hunter, Adam	Paget, R. T.
Carter-Jones, Lewis (Eccles)	Hutchison, Michael Clark	Palmer, Arthur
Castle, Rt. Hn. Barbara	Irvine, Rt. Hn. Sir Arthur (Edge Hill)	Pannell, Rt. Hn. Charles
Clark, David (Colne Valley)	Janner, Greville	Pardoe, John
Cocks, Michael (Bristol, S.)	Jay, Rt. Hn. Douglas	Parker, John (Dagenham)
Cohen, Stanley	Jeger, Mrs. Lena	Parry, Robert (Liverpool, Exchange)
Concannon, J. D.	Jenkins, Hugh (Putney)	Pavitt, Laurie
Conlan, Bernard	Jenkins, Rt. Hn. Roy (Stechford)	Pendry, Tom
Cox, Thomas (Wandsworth, C.)	John, Brynmor	Pentland, Norman
Crawshaw, Richard	Johnson, Walter (Derby. S.)	Powell, Rt. Hn. J. Enoch
Crosland, Rt. Hn. Anthony	Jones, Dan (Burnley)	Prentice, Rt. Hn. Reg.
Cunningham, G. (Islington, S.W.)	Jones,Rt.Hn.Sir Elwyn(W.Ham,S.)	Prescott, John
Cunningham, Dr. J. A. (Whitehaven)	Jones, Gwynoro (Carmarthen)	Price, J. T. (Westhoughton)
Dalyell, Tam	Jones, T. Alec (Rhondda, W.)	Price, William (Rugby)
Davies, Denzil (Llanelly)	Kaufman, Gerald	Probert, Arthur
Davies, Ifor (Gower)	Kelley, Richard	Rankin, John
Davis, Clinton (Hackney, C.)	Kerr, Russell	Reed, D. (Sedgefield)
Davis, Terry (Bromsgrove)	Kinnock, Neil	Rees, Merlyn, Leeds, L,
Deakins, Eric	Lambie, David	Rhodes, Geoffrey
de Freitas, Rt. Hn. Sir Geoffrey	Lamborn, Harry	Richard, Ivor
Dell, Rt. Hn. Edmund	Lamond, Jamas	Roberts, Albert (Normanton)
Dempsey, James	Latham, Arthur	Robertson, John (Paisley)
Doig, Peter	Leadbitter, Ted	Roderick, Caerwyn E.(Br'c'n&R'dnor)
Dormand, J. D.	Lee, Rt. Hn. Frederick	Rodgers, William (Stockton-on-Tees)
Douglas, Dick (Stirlingshire. E.)	Lever, Rt. Hn. Harold	Roper, John
Douglas-Mann, Bruce	Lewis, Arthur (W. Ham, N.)	Rose, Paul B.
Driberg, Tom	Lewis, Ron (Carlisle)	Ross, Rt. Hn. William (Kilmarnock)
Duffy, A. E. P.	Lomas, Kenneth	Rowlands, Edward
Eadie, Alex	Loughlin, Charles	Sandelson, Neville
Edwards, Robert (Bilston)	Lyon, Alexander W. (York)	Sheldon, Robert (Ashton-under-Lyne)
Edwards, William (Merioneth)	Lyons, Edward (Bradford, E.)	Shore, Rt. Hn. Peter (Stepney)
Ellis, Tom	Mabon, Dr. J. Dickson	Short,Rt.Hn.Edward(N'c'tle-n-Tyne)
English, Michael	McBride, Neil	Short, Mrs. Renée (W'hampton, N.E.)
Evans, Fred	McCartney, Hugh	Silkin, Rt. Hn. John (Deptford)
Ewing, Harry	McElhone, Frank	Silkin, Hn. S. C. (Dulwich)
Farr, John	McGuire, Michael	Sillars, James
Faulds, Andrew	Mackenzie, Gregor	Silverman, Julius
Fell, Anthony	Mackie, John	Skinner, Dennis
Fitch, Alan (Wigan)	Maclennan, Robert	Smith, John (Lanarkshire, N.)
Fitt, Gerard (Belfast, W.)	McMaster, Stanley	Spearing, Nigel
Fletcher, Raymond (Ilkeston)	McMillan, Tom (Glasgow, C.)	Spriggs, Leslie
		Stallard, A. W.
Stoddart, David (Swindon)	Varley, Eric G.	Whitlock, William
Stonehouse, Rt. Hn. John	Wainwright, Edwin	Willey, Rt. Hn. Frederick
Strang, Gavin	Walden, Brian (B'm' ham, All Saints)	Williams, Alan (Swansea, W.)
Summerskill, Hn. Dr. Shirley	Walker, Harold (Clitheroe)	Williams, W. T. (Warrington)
Swain, Thomas	Walker-Smith, Rt. Hn. Sir Derek	Wilson, Alexander (Hamilton)
Taverne, Dick	Wallace, George	Wilson, Rt. Hn. Harold (Huyton)
Thomas, Rt.Hn.George (Cardiff,W.)	Watkins, David	Wilson, William (Coventry, S.)
Thomas, Jeffrey (Abertillery)	Weitzman, David	Woof, Robert
Tinn, James	Wellbeloved, James
Torney, Tom	Wells, William (Walsall, N.)	TELLERS FOR THE AYES
Turton, Rt. Hn. Sir Robin	White, James (Glasgow, Pollok)	Mr. James A. Dunn and Mr. James Hamilton
Urwin, T. W.	Whitehead, Philip
NOES
Adley, Robert	Fenner, Mrs. Peggy	Langford-Holt, Sir John
Alison, Michael (Barkston Ash)	Fidler, Michael	Legge-Bourke, Sir Harry
Allason, James (Hemel Hempstead)	Finsberg, Geoffrey (Hampstead)	Le Marchant, Spencer
Amery, Rt. Hn. Julian	Fisher, Nigel (Surbiton)	Lewis, Kenneth (Rutland)
Archer, Jeffrey (Louth)	Fletcher-Cooke, Charles	Longden, Sir Gilbert
Astor, John	Fookes, Miss Janet	Loveridge, John
Atkins, Humphrey	Fortescue, Tim	Luce, R. N.
Awdry, Daniel	Fowler, Norman	McAdden, Sir Stephen
Baker, Kenneth (St. Marylebone)	Fox, Marcus	MacArthur, Ian
Balniel, Rt. Hn. Lord	Fry, Peter	McCrindle, R. A.
Barber, Rt. Hn. Anthony	Galbraith, Hn. T. G.	McLaren, Martin
Batsford, Brian	Gardner, Edward	Maclean, Sir Fitzroy
Beamish, Col. Sir Tufton	Gibson-Watt, David	McNair-Wilson, Michael
Bennett, Sir Frederic (Torquay)	Gilmour, Ian (Norfolk, C.)	McNair-Wilson, Patrick (New Forest)
Bennett, Dr. Reginald (Gosport)	Gilmour, Sir John (Fife, E.)	Maddan, Martin
Benyon, W.	Glyn, Dr. Alan	Madel, David
Berry, Hn. Anthony	Godber, Rt. Hn. J. B.	Mather, Carol
Blaker, Peter	Goodhart, Philip	Maude, Angus
Boardman, Tom (Leicester, S.W.)	Goodhew, Victor	Maudling, Rt. Hn. Reginald
Boscawen, Hn. Robert	Gorst, John	Mawby, Ray
Bossom, Sir Clive	Gower, Raymond	Maxwell-Hyslop, R. J.
Bowden, Andrew	Grant, Anthony (Harrow, C.)	Meyer, Sir Anthony
Braine, Sir Bernard	Gray, Hamish	Mills, Peter (Torrington)
Bray, Ronald	Green, Alan	Miscampbell, Norman
Brinton, Sir Tatton	Griffiths, Eldon (Bury St. Edmunds)	Mitchell,Lt. Col.C. (Aberdeenshire,W)
Brocklebank-Fowler, Christopher	Grylls Michael	Mitchell, David (Basingstoke)
Brown, Sir Edward (Bath)	Gummer, J. Selwyn	Money, Ernle
Bruce-Gardyne, J.	Gurden, Harold	Monks, Mrs. Connie
Bryan, Paul	Hall Miss Joan (Keighley)	Monro, Hector
Buchanan-Smith, Alick(Angus,N&M)	Hall, John (Wycombe)	Montgomery, Fergus
Buck, Antony	Hall-Davies, A. G. F.	More, Jasper
Burden, F. A.	Hamilton, Michael (Salisbury)	Morgan, Geraint (Denbigh)
Butler, Adam (Bosworth)	Hannam, John (Exeter)	Morgan-Giles, Rear-Adm.
Campbell, Rt.Hn.G.(Moray&Nairn)	Harrison, Col. Sir Harwood (Eye)	Morrison, Charles
Carlisle, Mark	Haselhurst Alan	Mudd, David
Carr, Rt. Hn. Robert	Havers, Michael	Murton, Oscar
Channon, Paul	Hawkins Paul	Neave, Airey
Chapman, Sydney	Hayhoe, Barney	Normanton, Tom
Chataway, Rt. Hn. Christopher	Higgins, Terence L.	Nott, John
Chichester-Clark, R.	Hiley, Joseph	Onslow, Cranley
Churchill, W. S.	Hill James (Southampton Test)	Owen, Idris (stockport, N.)
Clark, William (Surrey, E.)	Holland, Philip	Page, Graham (Crosby)
Clegg, Walter	Holt, Miss Mary	Page, John (Harrow, W.)
Cockeram, Eric	Holt, Miss Mary	Parkinson, Cecil
Cooke, Robert	Hornby, Richard	Percival, Ian
Coombs, Derek	Hornsby-Smith Rt Hn Dame Patricia	Peyton, Rt. Hn. John
Cooper, A. E.	Howe, Hn. Sir Geoffrey (Reigate)	Pike, Miss Mervyn
Cordle, John	Howell, David (Guildford)	Pink, R. Bonner
Corfield, Rt. Hn. Frederick	Howell, Ralph (Norfolk, N.)	Price, David (Eastleigh)
Cormack, Patrick	Hunt, John	Prior, Rt. Hn. J. M. L.
Costain, A. P.	Iremonger, T. L.	Proudfoot, Wilfred
Crouch, David	James, David	Pym, Rt. Hn. Francis
Crowder, F. P.	Jenkin, Patrick (Woodford)	Quennell, Miss J. M.
Davies, Rt. Hn. John (Knutsford)	Jessel, Toby	Raison, Timothy
d'Avigdor-Goldsmid, Sir Henry	Johnson Smith, G. (E. Grinstead)	Ramsden, Rt. Hn. James
d'Avigdor-Goldsmid,Maj.-Gen.James	Joseph, Rt. Hn. Sir Keith	Rawlinson, Rt. Hn. Sir Peter
Dean, Paul	Kellett-Bowman, Mrs. Elaine	Redmond, Robert
Deedes, Rt. Hn. W. F.	Kimball, Marcus	Reed, Laurance (Bolton, E.)
Dixon, Piers	King, Evelyn (Dorset, S.)	Rees, Peter (Dover)
Drayson, G. B.	King, Tom (Bridgwater)	Renton, Rt. Hn. Sir David
du Cann, Rt. Hn. Edward	Kinsey, J. R.	Ridley, Hn. Nicholas
Dykes, Hugh	Kirk, Peter	Ridsdale, Julian
Eden, Sir John	Kitson, Timothy	Rippon, Rt. Hn. Geoffrey
Edwards, Nicholas (Pembroke)	Knight, Mrs. Jill	Roberts, Michael (Cardiff, N.)
Elliot, Capt. Walter (Carshalton)	Knox, David	Roberts, Wyn (Conway)
Elliott, R. W. (N'c'tle-upon-Tyne, N.)	Lambton, Lord	Rost, Peter
Emery, Peter	Lamont, Norman	Royle, Anthony
Eyre, Reginald	Lane, David	St. John-Stevas, Norman

Scott, Nicholas	Tapsell, peter	Ward, Dame Irene
Sharples, Richard	Taylor, Sir Charles (Eastbourne)	Warren, Kenneth
Shaw, Michael (Sc'b'gh & Whitby)	Taylor, Frank (Moss Side)	Weatherill, Bernard
Shelton, William (Clapham)	Taylor, Robert (Croydon, N.W.)	Wells, John (Maidstone)
Simeons, Charles	Tebbit, Norman	White, Roger (Gravesend)
Sinclair, Sir George	Temple, John M.	Wiggin, Jerry
Skeet, T. H. H.	Thatcher, Rt. Hn. Mrs. Margaret	Wilkinson, John
Smith, Dudley (W'wick & L'mington)	Thomas, John Stradling (Monmouth)	Winterton, Nicholas
Soref, Harold	Thomas, Rt. Hn. Peter (Hendon, S.)	Wolrige-Gordon, Patrick
Speed, Keith	Thompson, Sir Richard (Croydon, S.)	Wood, Rt. Hn. Richard
Spence, John	Tilney, John	Woodhouse, Hn. Christopher
Sproat, Iain	Trafford, Dr. Anthony	Woodnutt, Mark
Stainton, Keith	Trew, Peter	Worsley, Marcus
Stanbrook, Ivor	Tugendhat, Christopher	Wylie, Rt. Hn. N. R.
Stewart-Smith, Geoffrey (Belper)	van Straubenzee, w. R.	Younger, Hn. George
Stodart, Anthony (Edinburgh, W.)	Vaughan, Dr. Gerard
Stoddart-Scott, Col. Sir M.	Waddington, David	TELLERS FOR THE NOES:
Stokes, John	Walker, Rt. Hn. Peter (Worcester)	Mr. Michael Jopling and Mr. Kenneth Clarke.
Stuttaford, Dr. Tom	Wall, Patrick

Question accordingly negatived.

[Mr. E. L. MALLALIEU in the Chair]

Mr. Ronald King Murray (Edinburgh, Leith)

I beg to move Amendment No. 419, in page 3, line 16, leave out from beginning to 'the' in line 18 and insert: There may be paid out of moneys to be provided by Parliament.

The Second Deputy Chairman

With this it would be convenient to discuss Amendment No. 53, in page 3, line 18, leave out from 'meet' to 'any' in line 20, standing in the name of the right hon. Member for Thirsk and Malton (Sir Robin Turton).

Mr. Murray

Clause 2 contains two subsections of paramount importance. The first is subsection (1) and the second is subsection (3). By subsection (1) the writ of Brussels runs unhindered through this land, its charge underwritten in advance by the House. By subsection (3) a blank cheque is permanently signed in advance—a blank cheque without limit which subjects us permanently to heavy financial commitments, commitments which could indeed be crushing without the parliamentary control on which the power of Parliament now rests.

The sovereignty of Parliament has twin sources—the power of legislation and the power of financial control. The eggs of sovereignty once scrambled can hardly be restored to their shells. If that is true of legislation it is doubly true of financial control. The object of Amendment No. 419 is to retain the maximum of parliamentary control consistent with meeting the financial burdens of membership of the Communities, the maximum parliamentary scrutiny over Britain's budgetary contributions.

What is the measure of that parliamentary control as it now stands? It is set out in classic terms on page 676 of Erskine May and summarised in the centre of the passage, where it says: Thus the Crown demands money, the Commons grant it, and the Lords assent to the grant; On page 677, Erskine May deals with the cycle of financial business, to which reference has already been made, and stresses the importance of the principle of annuality, the annual control of the finance of this country by Parliament. It is a procedure by Estimate, Vote and appropriation, a well-worn path whereby annual scrutiny and control ensure to Parliament power over the national purse strings.

9.0 p.m.

Does this subsection put that power at risk? The answer must be an unqualified "Yes". I quote what the Chief Secretary to the Treasury said on this subject on 22nd February when dealing with the contributions with which we are concerned under this subsection: In other words these funds"— the funds in question— never really belong to the United Kingdom. By a coninuous 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. Later he said: 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. The subsection thus attaches to this country a permanent drain, one which remains permanently open beyond our control and through which our economic lifeblood can continually drain, and indeed, judging by the figures quoted in the last debate by my right hon. Friend the Member for Stepney (Mr. Shore), the acute imbalance of our budgetary contribution would appear to make this probable. But we could do nothing directly about it.

There are, of course, two kinds of public expenditure at present, permanent Consolidated Fund expenditure—the current expenditure—and annual expenditure, and, of course, it is said by the Government today that there is some faint analogy there for the provisions brought out in subsection (3), but the balance is entirely different. The vast bulk of expenditure is at present for the public services in respect of supply services paid on an annual basis—the moneys provided by Parliament, to use the words of the Amendment, echoing the Treasury terminology. The effect of the Amendment would be to ensure this kind of regular annual parliamentary scrutiny and control over our budgetary inter-relations with the Community.

In the view of the Opposition, nothing less will ensure that we reserve our ultimate financial sovereignty as well as our formal legislative sovereignty. At least it would enable us to plug the drain once a year, rather as the owner of a private access may physically close it once a year to prevent the creation of a public right of way. The case seems overwhelming for parliamentary scrutiny and for doing it in this way.

What is the case against? This was stated by the Chief Secretary on 22nd February when he said: 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. The argument is pivoted on appropriateness, but we treasure not appropriateness but the liberties and powers of Parliament. These are not to be weighed in the same scale. He goes on: 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. Any- thing else would be incompatible with the decision and the Reaulation."—[Official Report, 22nd February, 1972; Vol. 831, c. 1147–9.] He is referring to the decision under which this Regulation was imposed.

The argument when examined rests on bald assertion and the drafting of paragraph (b), as has been pointed out, belies this because it provides for annual supply. We must ask: why has this been done? Is there a sinister reason? Is it because some Brussels bureaucrat has vetted the Bill and dictated what must be provided in it?

We want a clear answer to that because our suspicions are growing. To what extent has the Bill in draft been shown to the Commission and the controllers in Brussels and to what extent have they approved its terms? To what extent are our rules of order being dictated from Brussels?

The financial control of Parliament rests on two historic pillars, the Standing Orders of this House, starting with Standing Order No. 89, which dates in substance from 1713, and the Bill of rights of 1688. In case any of my Scottish colleagues should think that I am guilty of dereliction of duty, there is also the corresponding Claim of Rights for Scotland. It stands on these twin foundations. Let us see what Standing Order No. 89 says. It says: This House will receive no petition for any sum relating to public service or proceed upon any motion for a grant or charge upon the public revenue, whether payable out of the Consolidated Fund or the National Loans Fund or out of money to be provided by Parliament or for releasing or compounding any sum of money owing to the Crown, unless recommended from the Crown. There is nothing there about Brussels. This historic Standing Order and those that go with it are in peril, in jeopardy and must be changed. That is one of the twin pillars gone.

What about the other pillar? I turn to the Bill of Rights. Historically this takes us back to Hampden and the case of ship money in 1637. It required Parliament to reverse that inequitable decision of the Court of Exchequer Chambers. In the fourth declaration of the ancient liberties and rights of Parliament, enshrined in the Bill of Rights of 1688, we find this: A levying of Money for or to the Use of the Crown, by Pretence or Prerogative without grant of Parliament for longer time or in other manner then the same is or shall be granted is illegal. Again, for my Scottish colleagues there is a corresponding declaration, the seventh, in the Claim of Rights for Scotland. I ask the Committee to note those words without grant of Parliament for longer time or in other manner". How can it be said that a permanent alienation of these rights is within the meaning of the Bill of Rights? That is the other pillar of our ancient liberties gone. I cannot help feeling that the Government benches are intoxicated by this vision they have of Europe.

Mr. Fell

Some of them.

Mr. Murray

We have a few representatives. I begin to wonder how it is that there is this strange preoccupation, this strange fascination. Another curiosity is the odd preoccupation that Europe seems to have had with bulls and beef, ever since the White Bull of Jupiter carried Europa off to Crete, borne aloft no doubt by the rising spiral of beef prices. The ancient liberties of Parliament are to be set against dreams of this kind, dreams which we feel to be illusions. Instead of arguments we find bald assertions. We feel that the ancient pillars of parliamentary power are not merely historic, they are part of its very substance, and for those reasons we invite the maximum support for this Amendment.

Sir Robin Turton

With this Amendment we are discussing Amendment No. 53, which stands in my name and the names of my hon. and right hon. Friends, and which is different from and narrower than that moved by the hon. and learned Member for Edinburgh, Leith (Mr. Ronald King Murray).

There are always two considerations. There are those people who believe that it is in the country's interest to join the Community and there are those who take the opposite view. But, quite apart from that division of opinion, there is the other dominating fact that all hon. Members should be considering, and that is how, if we are to accept the Bill, we can secure proper parliamentary control. In Amendment No. 53 I have proposed what I believe to be an improvement which will secure adequate parliamentary control.

First, I want to consider exactly what the change would be if the Amendment were adopted. Any sum required to meet any Community obligation to make payments to any of the Communities or member States would come under the normal system of Votes and not the Consolidated Fund Standing Services. On the previous Amendment we were told that such a proposal would be highly unusual. But why? Is it because this is, to a certain extent, an automatic payment? If it is, let us consider exactly what is involved. By taking it out of this part of the Clause we shall put it in under subsection (3)(a), where it will be met by moneys provided by Parliament.

What will come under paragraph (a)? I stand to be corrected if I itemise rather more fully than did my hon. Friend what is already coming under the paragraph as the Bill stands. This will include payments by the Government pursuant to directly applicable Community regulations and payment by the Government pursuant to Community directives. These are automatic obligations, and yet they will be voted under subsection (3)(a). Also included are incidental expenses incurred by Departments and payments pursued under order of Clause 6(2) by way of remuneration to the intervention board for agricultural produce and the payment to the sugar board under Clause 7(2).

Nobody can say that the acceptance of the Amendment would revolutionise the Bill. But if we do not accept it, what is the position if we put the money directly on the Consolidated Fund Bill? The hon. and learned Member for Leith quoted Erskine May; I find, therefore, no need to quote large extracts from Erskine May. We can find out exactly what is involved without that. Any payment in the Civil List at the moment comes under the Consolidated Fund Standing Services. Payments for the National Debt, the salary of Mr. Speaker and the salary of the Comptroller and Auditor General and that part of the taxation of Northern Ireland, the reserve taxes, form the whole of the Consolidated Fund Standing Services.

We were told by my hon. Friend that it would be unusual for these Community contributions not to be under the Consolidated Fund Standing Services. But in fact, it would be a very grave exception. Why is it that Mr. Speaker's salary comes under the Consolidated Fund Standing Services? It is because it is inconvenient for Parliament to have an inquisition on it. That is the dominating factor in all the Consolidated Fund Standing Services.

9.15 p.m.

I suggest that we should reconsider this point. What is the difference between an expenditure which comes under a Vote and one which comes under a Consolidated Fund Standing Service? If it comes under a Vote, the House has to have details of the amount that our electors will pay towards the object concerned. That is the whole point. In other words, there is an opportunity for the redress of grievance before supply. That is the whole basis on which the financial structure of this House has been built.

If the Government make a mistake, they have to come to this House to ask for more and to justify the increase. It was my hon. Friend the Member for Barry (Mr. Gower) who pointed out earlier that Governments always make bad estimates. That was giving the case for this Amendment. I appreciate that it is right for any Minister to say that he cannot say how much something will cost us in 1980. No one can work out what the cost of entry will be in 1980. However, this matter of is great interest to our constituents, and we want to be able to bring it back to this Chamber so that it may be discussed and investigated. That means by the system of Estimates and Supplementary Estimates which we are sacrificing by the device that the Government have adopted in this Bill.

Thirdly, there is the annual inquest on accounts. There is no provision for the Comptroller and Auditor General or the Public Accounts Committee to deal with Consolidated Funds Standing Services. The whole of the House of Commons machinery of inquest will be removed from this contribution.

When we discussed this matter on 22nd February, my hon. Friend the Chief Secretary tried to deal with the point that I had made on Second Reading in asking why it was not to be in the Estimates, and he said that we did not often vote down an Estimate. He reminded us that the last time that we had done it was in the case of Lord Haldane's bath.

Mr. Patrick Jenkin

Perhaps I might take this opportunity to correct a mistake that I made on that occasion. It was not Lord Haldane but Lord Birkenhead whose bathroom was voted down.

Sir Robin Turtson

I am grateful to my hon. Friend. I had not that correction. I was referring to an uncorrected version of the Official Report. It was Lord Birkenhead's bathroom, and my hon. Friend pointed out that that occurred as long ago as 1919. However, it is not a question of voting down an Estimate. The question is for this House to have an inquest on the Estimate.

I remember saying, when my hon. Friend spoke of the wrong Peer's bathing facilities, that he should think of the debate that we had on the groundnuts scheme. We could not vote down Mr. Strachey's scheme, but we had an extremely good debate on it. We were outnumbered by the Government of the day, who defended the expenditure on the groundnuts scheme. However, as a result of the debate the scheme was abandoned. To me, that is the purpose of our procedure. The House must have an inquest on expenditure, and that is not provided for in this subsection.

I have been a member of the Select Committee on Procedure which has been responsible for recommending that on these Supply days it is possible to have the Supply taken formally and use the time as an Opposition day. But that does not remove the right of the Opposition or, for that matter, of any hon. Member to treat a Supply day as a Supply day. Though I admit the contribution can be raised by the Opposition, we have cut down the number of opportunities.

I am trying to give a balanced point of view and to show the parliamentary opportunities. Now that we have done away with the Estimates Committee, it may be said that this contribution can be looked at by the Select Committee on Expenditure. However, here there is a difficulty. The Community's financial year is different from our own. Therefore, in the Financial Statement and Budget Report there will not be the full amount of our annual contribution for any one year. It will not be possible for the Select Committee to examine our contribution properly. This is a matter which the Government must reconsider. The fact that we shall have two different financial years operating makes matters extremely difficult. In my view, it would be far better to get this expenditure on to the proper Vote system, as the Government are doing for the other matters that I itemised at the beginning of my remarks.

I turn to consider the need for the House to have an inquest on the expenditure on the contribution. I was alarmed when I heard the attitude of some of my hon. Friends as to whether this House should inquire into expenditure. For example, my hon. Friend the Member for Flint, West (Sir A. Meyer) said that he thought that the money should flow, and that it would be wrong for his constituents to take any interest in the flow of money, which ought to be automatic. I interrupted him to ask whether he thought his constituents would have an interest in this contribution. He gave the impression that once we decided to go into Europe, our constituents would not need to be bothered by the matter.

My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) said that this was a wonderful project and that his constituents would be delighted that money should flow from them to the poor people of Southern Italy. But this is not our function in Parliament. Our job here is to see that the money which is extorted or extracted from our constituents in taxation for definite objects shall have proper House of Commons investigation before it is voted.

This is particularly true when we come to the vexed question of contributions. I gained a great deal of new knowledge from what my hon. Friend the Chief Secretary said in explanation of the White Paper. He gave me an entirely new outlook on the subject. He said that the figures in paragraph 93 of the White Paper were agreed in negotiation and that the key percentage which the British taxpayers would have to pay was based on constant prices. Apparently, although we have been discussing this Bill for a very long time, all our figures have been wrong. We have heard Ministers say that in 1977 the gross contribution will be only £300 million and that the net contribution will be £200 million. The Chief Secretary has said that it is all wrong and that the figure will be far more because account has not been taken of the effect of inflation.

This is why I got my figures entirely wrong. I was working on the official Community budget figures, which show an expenditure in 1972 of 4,100 million units of account, and the new March agricultural figures brought the figure up by an extra 6½ per cent. He said that did not matter. But it has to be paid for and we have to pay our share. It may be that the Community can get some of this sum out of reserves, but there comes a time when it has to bring in a supplementary estimate to justify the expenditure, but it cannot always go on getting money out of reserves.

Mr. Jenkin

My hon. Friend has mentioned a figure of 4,100 million units of account. I must stress that that includes substantial sums from earlier years from which there is no question of our making any contribution at all.

Sir Robin Turton

I am reading from the Fifth General Report of Activities in the Community in 1971: The first draft of the Communities' general budget for the financial year 1972 was submitted to the Council…This first draft, which used a new budgetary nomenclature, was based on a total of 4,100 million units of account…". The figures in the White Paper relate to 1973. Therefore, whatever figure we start with, if I am right the figure is 4,100 million units of account, and if the Chief Secretary is right and it is a lower figure we have to upgrade for 1973–74 and for the years to 1977.

Budget figures have been given for the years following 1972. If we look at paragraph 559 of the document "Financing of Community Activities" issued by the Community we see that in 1973 the increase will be 6.65 per cent. over 1972, and in 1974 6.94 per cent. over 1973. This shows an increase in the Community budget which it has agreed without any supplementary estimate. It has had to have an increase of over 6 per cent. It is interesting to look at paragraph 93 of the White Paper and see that there is an increased amount in four years to a total of 14 per cent.; in other words. an average increase over the four-year period for 1973 to 1977 of 3 per cent. when already there will have been increases of 6.65 per cent. and 6.94 per cent. This illustrates why it is important for the House to find some device for controlling expenditure and for becoming acquainted with the increases in our contribution as the years go by and sometimes in the course of the financial year.

I ask my hon. Friend to consider how the problem of parliamentary control of expenditure which is directed to the Community will be dealt with. I do not say this as one who is opposed to the Community, but as one who has attached great importance to the position of Parliament in the world and to what we have done in terms of financial control.

9.30 p.m.

As I see it, if the Bill is to be passed in this form Parliament is not even being a rubber stamp. It is rubber, but it does not have the stamping device. It is all automatic. If the Government do not use the Votes I beg them not to use the Consolidated Fund Standing Services, which is a device used for something entirely different.

Whether because of the need to maintain discretion, or whether out of shame, we do not at present debate these issues in Parliament. There must be some form of dealing with the expenditure of the Community and our contribution to it. This is something in which the country will be vitally interested, and there must occasionally be great debates on our Community expenditure, rather on the lines of the forward-looking debate in the autumn. That is the kind of picture that I see.

At the moment Parliament has not begun to attack the problem of how it will keep itself informed of what is happening in the Community. Reports should be given to Parliament by our representatives on the Council of Ministers, but there is no provision for that. On the legislative side, there is not even a Committee looking into the matter. There should be an inquiry by a Select Committee into the whole question of financial control. The best way is to put it on the Votes, and I hope, therefore, that the Government and the Committee will accept Amendment No. 53.

Mr. Martin Maddan (Hove)

I listened to my right hon. Friend the Member for Thirsk and Malton (Sir Robin Turton) with the attention that is due to a Member who has not only served for so long but has served with such distinction. Nevertheless, when one considers the issues that we are debating, I hope that my right hon. Friend will forgive someone who is very junior to himself for questioning some of his assumptions and for suggesting that there are superior ways and proceedings to those which he suggested.

My right hon. Friend seemed to think that any disbursement of funds from the Consolidated Fund was a kind of hole-in-the-corner business. That was one of the assumptions on which he rested his argument. If it is a hole-in-the-corner business—I do not for a moment agree that it is—that is something to which Parliament should address itself not in the context of the European Communities Bill, but in a far more wide-ranging context of its whole control over the executive and its expenditure of money.

The fact that my right hon. Friend does not like the method of using the Consolidated Fund—he does not seem to think that it has any appropriate part to play at all in the procedure of public finance—is not a reason for rejecting its use for the purposes of the Bill.

Sir Robin Turton

My hon. Friend has referred to the Consolidated Fund. That is not the point. The point is whether this comes directly out of the Consolidated Fund. If he looks at Erskine May, he will see that some things come out of the Consolidated Fund as Votes and some come out as Consolidated Fund Standing Services. It is this device which is being used, and it is normally used for the Civil List, Mr. Speaker's salary and the National Debt.

Mr. Maddan

The words that my right hon. Friend used included the phrase "some hole and corner business of which we are rather ashamed". I am not ashamed of the uses to which the Consolidated Fund is put when they are the purposes that he instanced. Nor would I be ashamed of it being used for the purposes of this Bill—for two reasons.

First, in joining the Communities, we have to recognise that we are doing something fundamental. In doing something fundamental, to which the House assented on Second Reading, we must not be surprised if it makes some differences to our habitual way of doing things. If my right hon. Friend is saying that he does not like the purposes of the Bill and is using this subsection as a peg on which to hang his dislike, that is something that he is entitled to do. But he supported the Amendment not on grounds of opposition to the Bill but on grounds of his wish to adhere to parliamentary practice and financial control.

My second reason concerns whether Parliament will find itself unable to question anything which goes on in the Community and leads to the need for the finance and perhaps increase in the finance to which my right hon. Friend referred. Although we have had a mammoth amount of time debating this subject this Session, from 1st January next year, when we are members of those Communities, I am certain that we shall still spend a lot of time debating those matters—

Mr. Arthur Lewis

We cannot amend them.

Mr. Maddsan

I am not talking about amending but about debating the affairs of the Community

Mr. Lewis

Just talking.

Mr. Maddan

Is talking control? Do Ministers take notice of what is said? Yes, they do. So we shall have many debates on the affairs of the Communities and we shall, through Ministers, have an effective leverage point which will influence them, although perhaps not control them—but that is in the nature of being a member of the EEC.

Mr. Lewis

The hon. Member will agree, I hope, that over the years both parties have had revolts which have forced the executive to do things that the executive did not want to do. Examples are Suez and some of the things that our people have done. Under this proposed procedure, we shall be able to debate, but after the Council of Ministers has reached a decision, our representative will report back to the House without our being able to amend that decision or do anything about it. We must either like it or lump it. Is that good democracy?

Mr. Maddan

In addition to accepting it and lumping it the hon. Gentleman might have referred to liking it because I am sure that he will like it when it happens.

The hon. Gentleman considers that a change came over events in Suez because of a debate in Parliament. I take it that he means that that debate stopped the advance of British troops along the Suez Canal. In my view it was pressure from the American Government and not any debate in this Parliament which resulted in that course. That example brings us close to realising the advantages this country will have from being a member of the EEC.

As part of a greater whole, we are bound to have influence over many aspects that concern us vitally. We shall certainly have more control over them than we have today. If I am asked whether we shall have total control, I must answer "No", save that in matters which Her Majesty's Government consider to be in our vital interest we shall have at least negative control rather than being forced into adopting policies or postures.

Mr. William Baxter (West Stirlingshire)

The hon. Gentleman seems to be unaware of the fact that many excellent reasoned Amendments have been movingly proposed but have been rejected by the Government. Where lies the power of this assembly if we have been unable to persuade the executive to accept-even one such Amendment?

Mr. Maddan

The hon. Gentleman condemns himself. He is saying that we have no power now to persuade the Government. What is the difference? He is fighting a paper battle.

Nor do I agree that many of the Amendments which have been tabled and rejected have been proposed so convincingly. Those who table Amendments are frequently certain of the case for their proposal, but mere conviction does not necessarily mean that one's case is right in the eyes of the majority. In many respects, therefore, there is no difference between what is happening in our deliberations on this Measure and our deliberations on many others, though I agree that this one is vitally important.

The European Communities are bound to change in many respects and some of these changes will be welcome. I agree that membership will result in changes taking place in this country and in many of our institutions. Becoming a member of a larger whole makes that inevitable. There is no greater touchstone than on the financial side, and that is why we are discussing an important part of the Bill.

Shall we have such adequate control and such benefits, in return for the money spent as we have from the way we do things now? When one is listening to this debate one sometimes has the impression that the United Kingdom of 1972, in the eyes of hon. Members opposite and many of my right hon. and hon. Friends, is "Paradise Regained". It was not so good when we were discussing other matters such as the Rents Bill or some Clauses in the Finance Bill. But suddenly, when we discuss this Bill, we start at the point of having regained paradise; everything is perfect and any change must be for the worse.

Mr. Fell

A load of rubbish.

Mr. Maddan

I think my hon. Friend said that it was rubbish.

Mr. John Hall (Wycombe)

"A load of rubbish".

9.45 p.m.

Mr. Maddan

He will have his opportunity to expose the rubbish he believes I am talking. He will have the opportunity to say that the circumstances of today, when we are not in the Community, are far from ideal. What we have to compare are the circumstances of human life, which are never ideal, which we enjoy today with our circumstances as members of the Community, which also will not be ideal.

The point I want to make to my right hon. Friend is that there are weaknesses in the control which Parliament will have over these funds under the European Economic Community. However, are they worse than the weaknesses that exist now? I do not agree for a moment that they will be worse in any way as this country will have the advantages of being a member of a wider community. Such membership will perhaps enable us not to suffer from outside sources of pressure such as the United States at the time of Suez, to which felitous reference has been made.

Mr. Lewis

The hon. Member for Hove (Mr. Maddan) is making the point for me. What he is saying—and I agree with him—is that the EEC will decide and, their having decided, we shall not be able to do a thing about it. When considering the Finance Bill, the Housing Bill or any of the other Bills, we can, if we get both sides agreeing in a majority, get Amendments through and force the Government to take action. But when we get into the Common Market the Government will tell us that the EEC and the Council of Ministers have agreed on X Y Z and we must accept it in to to and cannot alter or amend their decision in any way. Hon. Members have seen my pile of 1,750 regulations. Not one of them is debatableor amendable. Not one was prepared or made available to hon. Members until nine months after the event. There have been 144 pages of amendments and corrections. Today I received a letter from the Minister of Agriculture apologising for the fact that one of the amendments to the correction of an amendment is incorrect and that he has had to issue a statement to say that he has made a mistake and wants to correct that correction.

Mr. Maddan

I do not want to comment on the correspondence between the hon. Member for West Ham, North and my right hon. Friend the Minister of Agriculture. However, the hon. Gentle man did indeed point out in his previous intervention that by the time we debate these matters it will be too late. The hon. Gentleman is like somebody who goes into a sleazy cinema where the film is shown in—

Mr. Lewis

In Paris.

Mr. Maddan

I should inform the hon. Gentleman that, regrettably, he does not need to go as far as Paris. I do not suppose he knows that, but it is true. I do not wish to give any undue publicity to these matters. Perhaps I should suggest a cinema showing an educational film as a continuous performance, which means that as soon as it is ended it starts again. The hon. Gentleman seems to have the impression that if one comes in at that time, that is when the process started. That is not so. One point which has come out of the debate as prominently as the 1,001 orders, or whatever it was that the hon. Gentleman brought into the Chamber, is that in practice there is more prior discussion about any matter that is likely to be of concern to right hon. and hon. Members than is typical of orders issued by our own Government.

Coming back to the question of "Paradise Regained", in which apparently we are living, I wonder how we have done in examining Statutory Instruments issued by the Government under our own authority during the last six months.

Mr. Lewis

We are debating the European Communities Bill.

Mr. Maddan

The hon. Gentleman does not like what I say and now asks me to talk about something else. What I say is in response to the hon. Gentleman's intervention.

I am coming to a conclusion—

Mr. Lewis

Hear, hear.

Mr. Maddan

—and I have had every help and assistance from hon. Gentlemen opposite, which I welcome.

If any hon. Member, professor of political science or any political commentator wants to expose weaknesses in control over financial expenditure exercised in any circumstances by this or any other Parliament, he can make a marvellous job of it because the public domain and public affairs today involve expenditure, on so many different objects that no legislature or democratic assembly can keep track of and examine them all. It is the fact of life with which we live in the United Kingdom in June, 1972. There will, of course, be changes. However my contention and the reason I oppose the Amendment and support the provisions of the Bill is that in practice and in effect as a Member of the Community we shall have every bit as much, if not more, control and influence over the amounts—

Mr. Lewis

Even the Government do not believe that.

Mr. Maddan

We shall hear what they say in due time. I doubt that they will confirm the hon. Gentleman's opinion.

Mr. Lewis

They have all the time the hon. Gentleman has been in Brussels.

Mr. Maddan

I hope the hon. Gentleman will have an opportunity of making a speech.

Hon. Members

No.

Mr. A. E. Cooper (Ilford, South)

Spare us that.

Mr. Maddan

I am sure the hon. Gentleman will not be discouraged by my hon. Friends.

I want to emphasise again that as a member of the Community in practice and in effect we shall have as much opportunity to influence expenditure of moneys by the European Communities for purposes in which we are interested as we have at present within the confines and context of the United Kingdom. At the same time we shall gain influence over what is happening in neighbouring countries. If we do not have such influence, things may happen substantially to our disadvantage.

The experience of member States of the Community so far has been not that they have given up something and gained something in return, but that they have given up nothing—

Mr. Norman Buchan (Renfrew, West)

On a point of order, Mr. Mallalieu. Is it in order for an hon. Gentleman who voted for the guillotine to filibuster in this disgusting fashion?

The Second Deputy Chairman

I have heard nothing out of order.

Mr. Michael Foot (Ebbw Vale)

Yes, you have, Mr. Mallalieu—tedious repetition.

Mr. Maddan

Mr. Mallalieu, my speech has been rather longer than I intended, but I have had the most able assistance from hon. Members opposite and I did not wish to be discourteous to them by not taking up the points they made and developing them as fully as I could. As one who voted for the guillotine I can exonerate myself from the charge levelled at me by the hon. Member for Renfrew, West (Mr. Buchan) by pointing to the very few column inches in the Official Report which I have taken up compared with those occupied by many hon. Members opposite.

The Second Deputy Chairman

Order. The hon. Gentleman should speak to the Amendment, not to the point of order.

Mr. Maddan

I shall be glad to do that, Mr. Mallalieu. I have been, with the greatest difficulty, trying to come to the end of my speech. The experience of the Member States of the Community has been that they have given up nothing but gained a lot; and that will be our experience, too.

Mr. William Hamling (Woolwich, West)

This is only the second time that I have intervened in our debates on the Common Market. The last time I spoke was in the debate leading up to the decision on 28th October. In that debate I was concerned with the economic terms, which I regarded then as deplorable. Today I regard them as doubly deplorable.

The Amendment concerns the powers of the House of Commons and of Parliament. In October's debate there was not the understanding and perception of the political implications of entry into the Community that there is today. We had not been brought face to face with the limitations on our parliamentary sovereignty that have been brought home in debate after debate from this side and by some right hon. and hon. Members opposite, to their great credit.

To dismiss the destruction of parliamentary democracy by saying, as did the hon. Member for Hove (Mr. Maddan), that we have not a complete parliamentary democracy at the moment is no argument. The power to control the Executive in the House of Commons lies with back benchers now. There is this to be said about Ministers who may, in the words of the supporters of the present Government, exercise dictatorial control and be not answerable to parliamentary control: they are still amenable to re-election and are still answerable to the people of this country.

Mr. Harold Lever (Manchester, Cheetham)

And to the House of Commons.

10.0 p.m.

Mr. Hamling

They are, I agree. For once, a Daniel comes to judgment. They are answerable to the House of Commons. That is a complete reply by one of their fellow supporters of the EEC. Ministers are still answerable to the people, and Ministers have been known to be defeated when they have faced the electorate. The Government will face defeat when they challenge the electorate again. I am quite confident of that.

The significance of the Amendment is that in the Bill we are handing over powers that we have fought for, sustained and maintained in this Parliament for hundreds of years, without any real debate or objection from the vast battalions who support the Government, to a handful of people who are not answerable to any Parliament, let alone this one.

It comes as a shock to me that in 1972, after centuries of parliamentary democracy, we should be discussing these momentous matters, the destruction of British parliamentary democracy—indeed, not its destruction but its abandonment by the present Government—with an attendance which is a mockery and with an attention to the argument which is an abuse of intelligence. That is what we are reduced to. It will go down in history as an example of betrayal that we should be so supine in our defence of the principles of British democracy.

The control of taxation and supply is one of the integral parts of British parliamentary democracy. In a couple of lines in the Bill we are betraying that and ending it for all time. We are giving it up. One thinks of the would-be conquerors of this country who would have invaded these shores in order to destroy this parliamentary democracy. Yet here the situation is that people of our own country are giving away the very things that they have fought for over the years. That is what the Bill and this Amendment are about.

In the Amendment we are saying that these are powers that we have no right to give up. We were not sent to Parliament to betray it. We were not sent to the House of Commons by the British people to betray everything that the House of Commons stands for, and to betray it in the supine fashion one sees throughout these debates. We were sent here by the people of this country to defend British democracy. That is what the Amendment is about.

This is only the second occasion on which I have spoken in these debates on the EEC. With all the vehemence and power at my command, I say that I was not sent here to betray British democracy. I shall go into the Lobby tonight to fight for parliamentary control, control by the elected representatives of the British people, over the interests of the British people.

[Sir ROBERT GRANT-FERRIS in the Chair]

Mr. Michael Grylls (Chertsey)

I am delighted to follow the hon. Member for Woolwich, West (Mr. Hamling), for whom I have great respect quite apart from his being a fellow Royal Marine.

Mr. Maddan

Is it not an interesting point worthy of comment that the last three speakers have been Royal Marines?

Mr. Grylls

The concern which the hon. Member for Woolwich, West expressed about the dilution of the power of the House of Commons was, I am sure, sincere, but I believe that he was wrong. It was clearly accepted in the Labour Government's White Paper, as it was in our White Paper, that the Community's system of finance is the central pillar of the Community and that we cannot in honesty talk about joining the Community on the one hand while on the other hand say that we do not approve of the system of Community finance. I believe, therefore, that in a sense the debate has been somewhat Alice in Wonderland-like, because some hon. Members opposite have said that they do not approve of the Community having its own budget. But I believe that the automaticity of the system of the Community having its own budget, with its own control over that budget, is one of the most vital things about the Community.

The point is to guarantee to the Community a steady flow of funds so that the funds cannot be turned off and on by national Governments from time to time. The very continuity of its funds surely means that the Community can live and be virile. We all know how other international organisations, as it were, hang from day to day because they cannot get enough money. The United Nations itself is in a permanent state of semi-bankruptcy, having to pass round the hat the whole time. That is not my idea of an organisation that is virile and is likely to make a real impact.

The hon. Member for Woolwich, West referred to funds from this country almost being" pinched"—he did not use the word but that was the implication—and passed over to Brussels, to the Community. He said that these were funds over which we previously had control. But the funds we are talking about as our contribution to the Community budget are very special moneys levied for the Community itself. If one is to join this organisation, it is surely fair that these funds should be controlled jointly by the Community and should not be under the sole control of this Parliament.

Mr. Marten

These are the funds which flow automatically, but the money does come from the British people. What some of us want is for it to be followed and vetted as to how it is spent. Would my hon. Friend agree that the Select Committee on Expenditure should have the power to go to Europe and examine how our money is spent?

Mr. Grylls

I will come shortly to the question of parliamentary control because it has been the centre piece of the debate. I believe that it is important first to look at what we are likely to gain from the Community. The right hon. Member for Stepney (Mr. Shore), who is not present, made a violent but not very successful attempt to fix attention only on the debit side of the Community budget—the expense side rather than the advantage side. A good accountant does not do that sort of thing. We must be fair, whatever our views on the Community as a whole. There are two sides to the budget—what we put in and what we hope or expect to get out of it in the future.

Britain can expect to gain substantially in a financial way from such things as the European Investment Bank, the investment funds and regional policy, as well as from the retraining of men in new technologies and the starting of new technological projects. These are the things which the country can expect, and from which, I believe, we shall gain very substantially.

But to be fair, and as the Government's White Paper made clear in paragraph 96, it is not possible to put an accurate figure on either side of the balance sheet. This is the difficulty we face. It was acknowledged in the Labour Government's White Paper as well. If it is not possible to get an absolutely accurate figure in forecasting our contribution, it is equally difficult to forecast with absolute accuracy what our receipts will be. The case has been fairly presented in the White Paper by the Government as a balance between the two in considering the overall net cost to the country.

I want to come to the question of parliamentary control. This has clearly been the main concern in the debate. Frankly, I think that we are going to have a dilution of the control of the House over these funds, and we must accept this because it is part of joining the Community. If we do not accept it, then we do not want to join the Community. I believe that we must see a greater amount of control through the European Parliament. When I was there last year, many of the present members wanted to see greater control by the European Parliament of the Community budget. In 1975 there will be the first tentative steps in this direction, and I believe that Britain, with her long parliamentary history and experi- ence, would wish to see this process speeded up considerably. I should like to think that the British Government would press the Community, once inside, to move forward more quickly towards control by the European Parliament of the overall budget so that we could directly influence the way these funds are used.

I hope that the Chief Secretary will tell us something about this. It is something which this Parliament would like to see changed once we are in the Community and it is also something which the majority of the Community members would like to see changed. It is vital that we should reject this Amendment. Those who seek to excise this part of subsection (3) from the Bill are trying to cut out the life blood of the Community. The funds that the Community has are the things that will make it big. To be able to have its own budget and security of funds is something that will make it a modern and progressive Community, able to do the things for this country and the other countries in Europe that we want to see done.

10.15 p.m.

Mr. Geoffrey Finsberg (Hampstead)

Unlike the hon. Member for Woolwich, West (Mr. Hamling), I can claim that this is the first time that I have intervened in these debates. I have not listened to many of them but I have carefully read the daily Hansard, column by column, page by page. Sometimes it has saved me from listening to the sedentary interventions of one or two hon. Gentlemen opposite.

I am coming to the conclusion that much of the opposition is very much overdone. Each Amendment seems to be taken up by the Opposition and claimed as being fundamental if we are to remain a free and independent country with a free and independent Parliament. It reminds me very much of a Pearl White serial—the credibility becomes less each time the argument is adduced, certainly by the hon. and learned Member for Edinburgh, Leith (Mr. RonaldKing Murray). One does not have to be a Privy Councillor, a lawyer or a Front Bench Opposition spokesman to be the sole judge of what is democratic. I do not impugn the sincerity of those hon. Members, but let them reciprocate instead of always putting their arguments in such a way as to suggest that those who believe the Bill is right and the Amendment wrong are in the wrong. This is a line they are always taking, and I am getting a little tired of it. [Interruption.] If the hon. Member for West Ham, North (Mr. Arthur Lewis) wishes to intervene I will allow him.

Mr. Arthur Lewis

All I am saying is that perhaps we should do what they do in the Common Market and agree without question with what the hon. Member says.

Mr. Finsberg

I am sure that that has shed a lot of light on the debate. I yield to no one in my desire to be a free man in a free Parliament, but I do not see Amendment No. 419 or Amendment No. 53 as destroying the citadel of freedom or the citadel of liberty.

I have looked carefully at the effect of this Amendment and the others that we are discussing with it. I have listened carefully to the hon. and learned Member for Leith and to my right hon. Friend the Member for Thirsk and Malton (Sir Robin Turton). [Interruption.] I hear someone saying" Haven't we all?" The analogy of what I have understood hon. Members to say is that if I want to join a club and bind myself to accept its rules and subscriptions I am somehow wrong because I am not giving myself a chance in advance of saying that the way the contribution is levied does not suit me or of saying that if I am asked to sign a banker's order to guarantee my subscriptions it is wrong and that I should want the opportunity each year of questioning the club. If I want to join an organisation I believe that I must conform, and if that organisation wants me, for good or ill, to bind myself in advance to payment of subscriptions I see nothing wrong with that.

Mr. Ernle Money (Ipswich)

My hon. Friend is on an important point because when he joins a club he becomes a member and has control over what that club does.

Mr. Finsberg

I was coming to that point about power.

Mr. Marten

Power?

Mr. Finsberg

Yes, power, as my hon. Friend the Member for Banbury (Mr. Neil Marten) may learn in a moment. [Laughter.] I meant that courteously, and I apologise if I sounded discourteous. I was about to say that I thought that the comment of my hon. Friend the Member for Chertsey (Mr. Grylls) was most germane when he pointed to what is happening in the United Nations. If it had the power to bind its members to pay their subscriptions we would not have Russia and others welshing over and over again on their obligations.

Mr. Edward Taylor (Glasgow, Cathcart)

I wonder whether my hon. Friend has ever joined a club which says, like the common agricultural policy, that the subscription can be changed only by unanimous decision of all the members?

Mr. Finsberg

I cannot without a lot of research say" Yes", or" No" to that. I will certainly look into it, and if I find that I have a suitable answer I will take an opportunity, perhaps on the Question" That the Clause stand part of the Bill" to intervene and reply to that point.

I want to join this club in the same way as the country and the House want to join it.

Mr. Spearing

Rubbish.

Mr. Finsberg

With very few exceptions, most hon. Members including, if my research is right, the hon. Member for Woolwich, West voted for entry in 1967, so that if they supported entry now they would be consistent.

If I take the decision to join 1 must abide by the rules and everything that those rules stand for—here I agree with my hon. Friend the Member for Ban-bury—until I have joined and become a full member and have the powers to persuade my fellow members to see my point of view. Having done that, I can then seek to alter the method of contribution and the amount of subscription. I see nothing in the Bill that makes that impossible. I see nothing in the assurances and speeches I have heard from my right hon. Friends to give me cause to doubt that what I have said is right.

My right hon. Friend, the Member for Thirsk and Malton referred in a passing remark to the Select Committee on Expenditure. That was an important comment. As a member of that Select Committee I do not accept fully that we would be unable to examine our contributions. My hon. Friend the Member for Banbury said something about being able to go to Brussels to examine the documents and call witnesses. I am not certain from the terms of reference of the Select Committee whether we are debarred from so doing.

Mr. Marten

I thank my hon. Friend for giving way because I know that my hon. Friend the Chief Secretary wants to wind up. If my hon. Friend would care to read the speech I made earlier, he will find all the arguments on this point.

Mr. Finsberg

While I have great friendship for my hon. Friend the Member for Banbury and for the Chief Secretary, I believe that back benchers occasionally have the right to make speeches. Comparing the number of column inches that my speeches have occupied with the column inches occupied by the speeches of my hon. Friends, it shows that I am entitled to make my speech.

I am coming to the end of what I wanted to say. I do not believe that the Select Committee would be debarred from carrying out that very important task. I hope this is something to which the Defence and Foreign Affairs Sub-Committee will give its early attention.

I certainly need to be convinced far more than I have been by the argument put forward by my right hon. Friend the Member for Thirsk and Malton before I am prepared to think otherwise. He said that the House might wish to find some device to carry out the task, and that that device might be a Select Committee. The only difference I can see between Amendment No. 419 and Amendment No. 53 is that the latter allows the European Investment Bank moneys to be charged solely to the Consolidated Fund. For the life of me, I cannot see the reason for this hair splitting unless the object is to have two separate Amendments to try to separate certain arguments and certain hon. Members. I find this illogical.

However well argued the Amendments have been, however persuasive the speeches, they do not convince me and 1 doubt whether they will convince the Committee. It should not be assumed by any set of hon. Members that because they have put up a good argument that is the sole argument to be considered. I do not believe that the arguments in favour of these Amendments are right, and I hope that Committee will not accept either of them

Mr. Richard Hornby (Tonbridge)

I want to intervene briefly at this point, having made a speech in the main debate last November—

Hon. Members

Let us have a Division!

Mr. Hornby

Amendment No. 419 has been advanced as a protection of the rights of Parliament at a time when it is being suggested by the opponents of this Measure that our rights are being eroded by the Bill. I believe this to be a total misunderstanding of the situation. The House took a major decision on this matter last year. That decision having been taken, the problem now before us is how best to see that the Measure which we have decided should go forward can go forward with the best possible efficiency and in good working order.

The suggestion in the Amendment is that various moneys should be provided only out of individual Votes of the House and, indeed, through the nine other Parliaments which would be represented in the Community. The decision of intent having been taken, it is important that the machinery which will enable the association to go forward should not be too torn to pieces by individual distractions of one kind or another. The machinery is there to scrutinise expenditure and to check on the decisions of the Council of Ministers to which the Commission in Brussels must report.

What is involved here is that we are ensuring that, the decision of intent having been taken, inadequate power should not be left at the centre to go forward with the decisions which have been taken. It is with this issue and on no other that this Amendment is concerned, and it seeks to wreck the adequacy of power at the centre. Having taken the decision of intent, I believe we must take care to ensure that the machinery of, and exchanges in, the Community should not be wrecked by too many requirements in relation to any powers in the Community.

Mr. Patrick Jenkin

1 appreciate that there are still one or two of my hon. Friends who are anxious to participate in this debate, but, since I have the impression that the Committee is anxious to come to a decision on these Amendments, I thought it right to intervene at this stage. [Interruption.] The last debate was dominated by speakers who were in favour of the Amendments and against the Bill.

The issue raised in these two Amendments is a narrow one, but I agree with those who have spoken in the debate, particularly the hon. and learned Member for Edinburgh, Leith (Mr. Ronald King Murray) and my hon. Friend the Member for Thirsk and Malton (Sir Robin Turton), that the issue is very important in the context of our joining the Communities.

Briefly, the question is what parliamentary machinery we should adopt for making the payments which the Committee agreed at the end of the last debate should be made. The Bill provides that the payments should be charged directly on the Consolidated Fund, or, as the Treasury may direct, on the National Loans Fund. Amendment No. 419 would have the result that all the payments arising under the treaties and under the Bill would be charged to Votes. Amendment No. 53 would charge our contributions to the E.I.B. on the National Loans Fund, but for the rest would make them subject to annual Votes.

10.30 p.m.

As I have said, this is an issue of some significance, and, while we gave it a brief airing during the debate on the financial Resolutions last February, it is wholly right and proper that the arguments either way should be fully spelt out during the Committee stage.

The difference between a direct charge on the Consolidated Fund and charging the payment on Votes has been referred to by many honorable Members on both sides during the debate, and perhaps I can summarise the position briefly. Payments charged on the Consolidated Fund—they are sometimes referred to as Consolidated Fund Standing Services—are payable in a sense, automatically, without further intervention by the House. On the other hand, payments that require to be made by Votes depend on the House passing each year the relevant Estimates and Consolidated Fund and Appropriation Acts. When I use the word" automatically", I must not be misunderstood; of course there is proper machinery within Government to make sure that any payments made out of the Consolidated Fund or out of the National Loans Fund are properly made. There are two clear safeguards. In the first place, the Treasury has to be satisfied that the payment is, in fact, due under the terms of the Act of Parliament authorising it, and secondly, the consent of the Comptroller and Auditor General must be secured. These are valuable safeguards, for the reality is that if the Treasury is not satisfied that sums due to the Communities are properly payable it can simply refuse to make the payment. Certainly payments could be delayed if, as a result of proceedings in this House, serious doubts were thrown upon the propriety of any claims or the amounts of the sums alleged to be due. Of course, this could give rise to serious difficulties with the Commission, but it is not right to say, as some hon. Members have suggested, that by charging these payments on the Consolidated Fund the United Kingdom is somehow surrendering all right or power to challenge or query payments claimed by the Community.

As the Committee well knows, Standing Charges on the Consolidated Fund are as a general practice reserved for those categories of payment which Parliament recognises as involving a high degree of commitment. My right hon. Friend the Member for Thirsk and Malton suggested they were payments where it would, in his view, be inconvenient to have regular inquisitions. I do not deny that that may be one of the factors which colour the decision. But the real question is the commitment, and, as my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) said earlier, interest on the National Debt or on a loan is properly charged to the Consolidated Fund because it is a commitment, and there is no gainsaying that. Indeed, the other payments charged on the Consolidated Fund are commitments. With respect to my right hon. Friend the Member for Thirsk and Malton, who has long experience in these matters, I do not think that the convenience or inconvenience of debating a matter is a dominant issue.

The payments to the Standing Services include payments in respect of the net cost of the National Debt, the repayment of post-war credits, the salaries and pensions of the judges, the salaries and pensions of a number of parliamentary officers, including Mr. Speaker, the Parliamentary Commissioner and the Comptroller and Auditor General. Indeed, my researches on this, somewhat to my surprise, led me to the interesting information that the salaries of the Leader of the Opposition and the Opposition Chief Whip are charged directly on the Consolidated Fund. I do not think that there is any question of the inconvenience of debating those. It is a question of commitment.

As I have said, the primary reason for making these payments in this way is that to do so recognises the reality of the commitment which is inherent in the very nature of the obligations—a commitment which would be incompatible with the right of Parliament to exercise a power of veto simply by rejecting in any year the relevant Estimate.

That being the nature of payments charged on the Consolidated Fund, I think that it is now incumbent upon me to explain to the Committee why the Government have felt it right that the payments to be made under the Bill fall into that category and not into the category of payments on Votes. Here 1 can answer the hon. and learned Member for Leith categorically by saying that there is no scintilla of evidence that pressure has been brought to bear either by our future partners or by the Commission that we should deal with the matter in this way. This is a decision of the Government, and it is right that it should be debated in the House as such.

Mr. Jay

It is the Government's responsibility.

Mr. Jenkin

I accept that it is the responsibility of the Government. The decision has been made, and I now come to the reasons why we have made that decision.

The nub of the case is that by virtue of the Rome Treaty and the relevant decisions and regulations made by the Communities by which we shall be bound on ratification of the Treaty of Accession, our obligation to make payments involves a degree of commitment which can be recognised only by charging them directly on the Consolidated Fund—or, where appropriate, the National Loans Fund.

Let me explain why this is so. Take first our obligation to contribute to the Communities' own resources. As I explained in the previous debate, this obligation, subject to the transitional arrangements, consists, under the decision of 21st April, 1970, and the implementing regulation, of various items including levies and customs duties. The decision describes the obligation—and I refer to Article 3—in the words that the relevant revenue shall be entered in the Budget of the Communities". This means, and can only mean, that the sums concerned, although collected in the first instance by member States, belong from the moment at which the payment arises to the Communities. To use the phrase which I have used on an earlier occasion and which has been quoted by the hon. and learned Member for Leith and the right hon. Member for Stepney (Mr. Shore), the payments" flow through the Exchequers of member States to the Community Budget." Of course, this is possible only if the definition of what is intended to be paid is clear, if the proportion to be handed over is clear and if the timing is clear. There is no doubt that all these requirements are satisfied by virtue of the decision and of the regulation to which I have referred.

In respect of these levies and duties it is not a question of the Government collecting sums due from traders and manufacturers and then from time to time separately paying a subscription due to the Communities, because that is not what the effect of the decision is. Our obligation is not satisfied by our simply making a payment from funds which first belonged to the United Kingdom Exchequer. The payments belong from the outset to the Communities, and it is merely for convenience that the actual collection is to be undertaken through the existing machinery in each member country. The Communities' entitlement to the money is absolute from the moment a claim on the importer for the levy or duty is established.

This is clear beyond a peradventure from Article 2 of the regulation of 2nd January, 1971, that a claim shall be established as soon as the corresponding debt has been duly accepted by the services or competent agency of the Member State". Article 9 provides for a period of 60 days before member States have actually to account to the Commission for the sums due.

This being the case, it must be evident that, unlike any other international subscription or contribution which the United Kingdom is obligated by treaty to make, almost all of which have hitherto been charged to Votes—there have been one or two exceptions—that procedure simply would not be compatible with the obligations that I have described. This has been said in an earlier debate. The hon. and learned Member for Leith said that it was a matter of assertion. I am not sure what else he expects it to be. An analysis of the situation and an analysis of the parliamentary procedure leads to a recognition that the one is incompatible with the other. That is a matter of argument on which one is entitled to rely. The Communities' own resources system is, clearly, incompatible with any arrangement which allows Parliament to intervene through a Vote procedure.

I recognise—I concede a point to the Opposition—that these arguments do not apply with quite the same force to certain other payments—for instance, a member State contribution, which has far more of the character of an annual subscription than the levies and duties to which I have been referring. A member State contribution is the surviving element of the original EEC revenue system, and, as I said in the last debate, it is due to be replaced in 1975 by part of the revenue of a uniform VAT.

It might be compatible with the obligation inherent in a member State contribution to charge such a payment on the annual Votes, but it is only a residual element of the own resources system. It would be a niggling refinement to have a different procedure for that part of the contribution. For these reasons, it has seemed right to the Government, and the simplest course, to charge these, too, on the Consolidated Fund.

In the last debate, my hon. Friend the Member for Banbury (Mr. Marten) referred to the obligation to pay up to a 1 per cent. yield on a value added tax. If and when the enlarged Community reaches agreement on harmonising VAT and activates that part of the April, 1970, decision, own resources will include the proceeds of that tax obtained, to quote Article 4, … by applying a rate not exceeding 1 pet cent. to an assessment base which is determined in a uniform manner for Member States according to Community Rules. It will be clear that, unlike the levies and customs duties, it would not be possible to identify a defined slice of the VAT revenue accruing to member States so as to argue that it belongs from the outset to the Communities. It is a matter not simply of convenience but of stark necessity that each country should manage its own VAT and raise its own revenue and only subsequently account to the Communities for the Communities' share.

Yet the nature of the obligation, as and when it arises, will be very much closer to that of the duties and levies than, for instance, to the member State contribution. Thus, the Government have felt it right to charge these payments, too, on the Consolidated Fund.

Perhaps the test can best be made the other way round by asking" Would it be compatible with the obligation embodied in the April, 1970, decision if Parliament could impose its own decision on whether or not to make the payment or as to the amount of the payment?" The answer could only be" No".

Finally, there are the capital payments. My right hon. Friend the Member for Thirsk and Malton has recognised that a direct charge on the Consolidated Fund is appropriate for dealing with our payments to the EIB. I suggest to him that our payments to the ECSC are on all fours, being a once-for-all entry fee, even though payable by instalments. Both involve a degree of commitment, no less than that involved in our participation in the Community budget. Finally there are our obligations under the medium-term assistance scheme, and loans, if any, to the EIB. These, too, are clearly appropriate either to the Consolidated Fund or to the National Loans Fund, and it is right that subsection (3) should recognise that.

Three main arguments challenging these propositions have been advanced during the debates. The first contention was that all this is incompatible with Parliament's basic and traditional right to control public expenditure. The second contention—this was made last February, and there have been references to it today—was that we have gone much further than existing members of the Community, who, it is said, have retained powers of veto which we would be surrendering. My right hon. Friend the Member for Thirsk and Malton quoted from Michael Niblock's book and made that assertion. Third, it is said that none of this is appropriate until the European Parliament is better equipped, and my hon. Friend the Member for Chertsey (Mr. Grylls) referred to this. I will deal with these in turn, and I start with the control of expenditure argument.

10.45 p.m.

Mr. Michael Foot

Does the hon. Gentleman realise what he is doing? He did this before. If he continues with his speech, the sole effect will be to prevent the Committee from voting on the Amendment moved by the Father of the House, who probably knows more about the procedure of the House of Commons than any other right hon. or hon. Member. In other words, with the assistance of some of his filibustering hon. Friends, the Chief Secretary is, by continuing to speak, preventing a Division on this important Amendment from taking place.

His behaviour is disgraceful and involves a breach of faith. If he insists on these tactics, he will be fought all the way. He must realise that if he continues with his speech he will continue to prevent hon. Members from reaching a decision in the Lobby on this issue.

Mr. Jenkin

I have said nothing that is not in direct answer to points raised in the debate and the hon. Gentleman has absolutely no right to make that sort of accusation. Every speaker has referred to this point and has described the Clause as an infringement which will curtail the rights of this Parliament to control expenditure. It cannot be right that I should be deprived of an opportunity to reply to that assertion, and that is what I intend to do.

Mr. Foot rose—

Mr. Jenkin

No, I will not give way.

The reality of the power of the House of Commons to control expenditure has long since ceased to reside in what has become a quite theoretical right to reject estimates.

When I advanced this proposition in February it was greeted with cries of horror from the radical traditionalists on the benches opposite. But, then, the rôle of the boy who points out that the emperor is not wearing any clothes has never been a popular one. I am certain that we do Parliament no service by seeking to pretend that that exists which has, in fact, long since ceased to exist. I say this in no spirit of mockery or iconoclasm, but simply as a realistic statement of the present position.

I recognise, of course, that if this stood alone it would indeed be a very sad day for Parliament to have to admit that the Estimates no longer constitute an effective method of controlling public expenditure, but that is not the position.

The right of Parliament to influence the pattern of public expenditure is, of course, central to Parliament's existence. Recent Administrations of both parties have recognised it and have vigorously set about creating machinery and institutions for making that much more effective.

The reality of Parliament's control rests in its power to scrutinise—I emphasise "scrutinise"—expenditure and to call Ministers to account for it. We all know that that is the reality. So far as the new machinery and institutions are concerned, I need only remind the House that it is now three years since the Labour Government instituted the new series of annual White Papers on public expenditure covering a five-year rolling programme, and each subsequent White Paper has shown this in greater detail and with more supporting narrative.

The payments made under the Clause are fully comprised within the public expenditure White Papers. They are subject to the control of the Expenditure Committees, of the Public Accounts Committee, and of the Comptroller and Auditor General.

My right hon. Friend the Member for Thirsk and Malton suggested that the Comptroller and Auditor General did not have access to payments from the Consolidated Fund. It is with hesitation that I correct him. I am told that the Comptroller and Auditor General audits the Consolidated Fund each year and issues a formal report on the payments. If he had occasion to issue a substantive report he would do so, and the Public Accounts Committee would consider it in the normal way. For the PAC the

consequences are the same, whether the payments are made from Votes or from the Consolidated Fund.

Other points were made in the debate, but, obviously, the Committee is anxious that I should sit down. We are taking on no more than is accepted by our fellow partners in the Community. We are certainly determined that the Community Parliament should become stronger. I remind the Committee of the Anglo-Italian Declaration of 28th April, 1969: The European Communities should be sustained by an elected Parliament as provided for in the Treaty of Rome. The rôle of the present European assemblies must be enhanced. We entirely agree with that. The Measures are in hand. The Vedel Report, which is lying in the House of Commons, has shown what needs to be done to strengthen the European Parliament and parliamentary control over the budget.

I suggest that, with that and the argument I have advanced about control over the Consolidated Fund payments, the Bill is entirely right, having regard to our obligation, and that the Amendments are misconceived and unnecessary. I hope, therefore, that the Committee will reject them.

Amendment negatived.

Amendment proposed: No. 53 in page 3, line 18, leave out from 'meet' to 'any' in line 20—[Sir Robin Turton.]

Question put, That the Amendment be made: —

The Committee divided: Ayes 254, Noes 264.

Division No. 213.]	AYES	[10.54 p.m.
Abse, Leo	Bradley, Tom	Crawshaw, Richard
Allaun, Frank (Salford, E.)	Brown, Bob (N'c'tle-upon-Tyne,W.)	Crosland, Rt. Hn. Anthony
Archer, Peter (Rowley Regis)	Brown, Hugh D. (G'gow, Provan)	Cunningham, G. (Islington, S.W.)
Ashley, Jack	Brown, Ronald (Shoreditch & F'bury)	Cunningham, Dr. J. A. (Whitehaven)
Ashton, Joe	Buchan, Norman	Dalyell, Tam
Atkinson, Norman	Buchanan, Richard (G'gow, Sp'burn)	Davies, Denzil (Llanelly)
Bagier, Gordon A. T.	Butler, Mrs. Joyce (Wood Green)	Davies, Ifor (Gower)
Barnett, Guy (Greenwich)	Callaghan, Rt. Hn. James	Davis, Clinton (Hackney, C.)
Barnett, Joel (Heywood and Royton)	Campbell, I. (Dunbartonshire, W.)	Davis, Terry (Bromsgrove)
Baxter, William	Cant, R. B.	Deakins, Eric
Benn, Rt. Hn. Anthony Wedgwood	Carmichael, Neil	de Freitas, Rt. Hn. Sir Geoffrey
Bennett, James (Glasgow, Bridgeton)	Carter, Ray (Birmingh'm, Northfield)	Dell, Rt. Hn. Edmund
Bidwell, Sydney	Carter-Jones, Lewis (Eccles)	Dempsey, James
Biffen, John	Castle, Rt. Hn. Barbara	Doig, Peter
Bishop, E. S.	Clark, David (Colne Valley)	Dormand, J. D.
Blenkinsop, Arthur	Cocks, Michael (Bristol, S.)	Douglas, Dick (Stirlingshire, E.)
Boardman, H. (Leigh)	Cohen, Stanley	Douglas-Mann, Bruce
Body, Richard	Concannon, J. D.	Driberg, Tom
Booth, Albert	Conlan, Bernard	Duffy, A. E. P.
Bottomley, Rt. Hn. Arthur	Cox, Thomas (Wandsworth, C.)	Dunn, James A.
Eadie, Alex	Leadbitter, Ted	Reed, D. (Sedgefield)
Edwards, Robert (Bilston)	Lee, Rt. Hn. Frederick	Rees, Merlyn (Leeds, S.)
Edwards, William (Merioneth)	Lestor, Miss Joan	Rhodes, Geoffrey
Ellis, Tom	Lever, Rt. Hn. Harold	Richard, Ivor
English, Michael	Lewis, Arthur (W. Ham, N.)	Roberts, Albert (Normanton)
Evans, Fred	Lewis, Ron (Carlisle)	Robertson, John (Paisley)
Ewing, Harry	Lomas, Kenneth	Roderick, Caerwyn E.(Br'c'n&R'dnor)
Faulds, Andrew	Loughlin, Charles	Rodgers, William (Stockton-on-Tees)
Fell, Anthony	Lyon, Alexander W. (York)	Roper, John
Fitch, Alan (Wigan)	Lyons, Edward (Bradford, E.)	Rose, Paul B.
Fitt, Gerard (Belfast, W.)	Mabon, Dr. J. Dickson	Ross, Rt. Hn. William (Kilmarnock)
Fletcher, Raymond (Ilkeston)	McBride, Neil	Rowlands, Ted
Fletcher, Ted (Darlington)	McCartney, Hugh	Sandelson, Neville
Foot, Michael	McElhone, Frank	Sheldon, Robert (Ashton-under-Lyne)
Ford, Ben	McGuire, Michael	Shore, Rt. Hn. Peter (Stepney)
Forrester, John	Mackenzie, Gregor	Short,Rt.Hn.Edward (N'c'tle-u-Tyne)
Fraser, John (Norwood)	Mackie, John	Short, Mrs. Renée (W'hampton, N.E.)
Freeson, Reginald	Mackintosh, John P.	Silkin, Rt. Hn. John (Deptford)
Garrett, W. E.	Maclennan, Robert	Silkin, Hn. S. C. (Dulwich)
Gilbert, Dr. John	McMillan, Tom (Glasgow, C.)	Sillars, James
Ginsburg, David (Dewsbury)	McNamara, J. Kevin	Silverman, Julius
Gourlay, Harry	Mahon, Simon (Bootle)	Skinner, Dennis
Grant, George (Morpeth)	Mallalieu, J. P. W. (Huddersfield, E.)	Smith, John (Lanarkshire, N.)
Grant, John D. (Islington, E.)	Marks, Kenneth	Spearing, Nigel
Griffiths, Eddie (Brightside)	Marsden, F.	Spriggs, Leslie
Griffiths, Will (Exchange)	Marshall, Dr. Edmund	Stallard, A. W.
Hamilton, James (Bothwell)	Marten, Neil	Stoddart, David (Swindon)
Hamilton, William (Fife, W.)	Mason, Rt. Hn. Roy	Stonehouse, Rt. Hn. John
Hamling, William	Meacher, Michael	Strang, Gavin
Hannan, William (G'gow, Maryhill)	Mellish. Rt. Hn. Robert	Strauss, Rt. Hn. G. R.
Hardy, Peter	Mendelson, John	Summerskill, Hn. Dr. Shirley
Harrison, Walter (Wakefield)	Mikardo, Ian	Swain, Thomas
Hart, Rt. Hn. Judith	Millan, Bruce	Taverne, Dick
Hattersley, Roy	Miller, Dr. M. S.	Thomas,Rt.Hn.George (Cardiff,W.)
Heffer, Eric S.	Milne, Edward	Thomas, Jeffrey (Abertillery)
Hooson, Emlyn	Mitchell, R. C. (S'hampton, Itchen)	Thomson, Rt. Hn. G. (Dundee, E.)
Horam, John	Moate, Roger	Tinn, James
Houghton, Rt. Hn. Douglas	Morgan, Elystan (Cardiganshire)	Torney, Tom
Howell, Denis (Small Heath)	Morris, Alfred (Wythenshawe)	Turton, Rt. Hn. Sir Robin
Huckfield, Leslie	Morris, Charles R. (Openshaw)	Urwin T. W.
Hughes, Rt. Hn. Cledwyn (Anglesey)	Morris, Rt. Hn. John (Aberavon)	Varley, Eric G.
Hughes, Mark (Durham)	Moyle, Roland	Wainwright, Edwin
Hughes, Robert (Aberdeen, N.)	Murray, Ronald King	Walden, Brian (B'ham, All Saints)
Hughes, Roy (Newport)	Oakes, Gordon	Walker Harold (Doncaster)
Hunter, Adam	Ogden, Eric	Walker-Smith, Rt. Hn. Sir Derek
Hutchison, Michael Clark	O'Halloran, Michael	Wallace, George
Irvine,Rt.Hn.SirArthur(Edge Hill)	Oram, Bert	Watkins David
Janner Greville	Orbach, Maurice	weitzman, David
Jay, Rt. Hn. Douglas	Orme, Stanley	Wellbeloved, James
Jeger, Mrs. Lena	Oswald, Thomas	Wells, William (Walsall, N.)
Jenkins, Hugh (Putney)	Owen, Dr. David (Plymouth, Sutton)	White, James (Glasgow, pollok)
Jenkins, Rt. Hn. Roy (Stechford)	Padley, Walter	Whitehead, Phillip
John, Brynmor	Paget, R. T.	Whitlock, William
Johnson, Walter (Derby, S.)	Palmer, Arthur	Willey, Rt. Hn. Frederick
Jones, Dan (Burnley)	Pannell, Rt. Hn. Charles	Williams, Alan (Swansea, W.)
Jones,Rt.Hn.Sir Elwyn(W.Ham,S.)	Parker, john (Dagenham)	Williams, Mrs. Shirley (Hitchin)
Jones, Gwynoro (Carmarthen)	Parry, Robert (Liverpool, Exchange)	Williams, W. T. (Warrington)
Jones, T. Alec (Rhondda, W.)	Pavitt, Laurie	Wilson, Alexander (Hamilton)
Kaufman, Gerald	Pendry, Tom	Wilson, Rt. Hn. Harold (Huyton)
Kelley, Richard	Pentland, Norman	Wilson, William (Coventry, S.)
Kerr, Russell	Powell, Rt. Hn. J. Enoch	Woof, Robert
Kinnock, Neil	Prentice, Rt. Hn. Reg.
Lambie, David	Prescott, John	TELLERS FOR THE AYES:
Lamborn, Harry	Price, J. T. (Westhoughton)	Mr. Joseph Harper and Mr. Ernest Armstrong.
Lamond, James	Price, William (Rugby)
Latham, Arthur	Probert, Arthur
	Rankin, John
NOES
Adley, Robert	Bennett, Sir Frederic (Torquay)	Brocklebank-Fowler, Christopher
Alison, Michael (Barkston Ash)	Bennett, Dr. Reginald (Gosport)	Brown, Sir Edward (Bath)
Allason, James (Hemel Hempstead)	Benyon, W.	Bruce-Gardyne, J.
Amery, Rt. Hn. Julian	Berry, Hn. Anthony	Bryan, Paul
Archer, Jeffrey (Louth)	Biggs-Davison, John	Buchanan-Smith, Alick(Angus,N&M)
Astor, John	Blaker, Peter	Buck, Antony
Atkins, Humphrey	Boardman, Tom (Leicester, S.W.)	Burden, F. A.
Awdry, Daniel	Boscawen, Hn. Robert	Butler, Adam (Bosworth)
Baker, Kenneth (St. Marylebone)	Bossom, Sir Clive	Campbell, Rt.Hn.G.(Moray & Nairn)
Balniel, Rt. Hn. Lord	Bowden, Andrew	Carlisle, Mark
Barber, Rt. Hn. Anthony	Braine, Sir Bernard	Carr, Rt. Hn. Robert
Batsford, Brian	Bray, Ronald	Channon, Paul
Beamish, Col. Sir Tufton	Brinton, Sir Tatton	Chapman, Sydney

Chataway, Rt. Hn. Christopher	Hornsby-Smith,Rt.Hn.Dame Patricia	Pym, Rt. Hn. Francis
Chichester-Clark, R.	Howe, Hn. Sir Geoffrey (Reigate)	Quennell, Miss J. M.
Churchill, W. S.	Howell, Ralph (Norfolk, N.)	Raison, Timothy
Clark, William (Surrey, E.)	Hunt, John	Ramsden, Rt. Hn. James
Clarke, Kenneth (Rushcliffe)	Iremonger, T. L.	Rawlinson Rt. Hn. Sir Peter
Clegg, Walter	James, David	Redmond, Robert
Cockeram, Eric	Jenkin, Patrick (Woodford)	Reed, Laurance (Bolton, E.)
Cooke, Robert	Jessel, Toby	Rees, Peter (Dover)
Coombs, Derek	Johnson Smith, G. (E. Grinstead)	Rees-Davies, W. R.
Cooper, A. E.	Jopling, Michael	Renton, Rt. Hn. Sir David
Cordle, John	Joseph, Rt. Hn. Sir Keith	Ridley, Hn. Nicholas
Corfield, Rt. Hn. Frederick	Kaberry, Sir Donald	Ridsdale, Julian
Cormack, Patrick	Kellett-Bowman, Mrs. Elaine	Rippon, Rt. Hn. Geoffrey
Costain, A. P.	Kershaw, Anthony	Roberts, Michael (Cardiff. N.)
Crouch, David	Kimball, Marcus	Roberts, Wyn (Conway)
Crowder, F. P.	King, Evelyn (Dorset, S.)	Rost, Peter
Davies, Rt. Hn. John (Knutsford)	King, Tom (Bridgwater)	Royle, Anthony
d'Avigdor-Goldsmid, Sir Henry	Kinsey, J. R.	St. John-Stevas, Norman
d'Avigdor-Goldsmid, Maj.-Gen. James	Kirk, Peter	Scott, Nicholas
Dean, Paul	Kitson, Timothy	Sharples, Richard
Deedes, Rt. Hn. W. F.	Knight, Mrs. Jill	Shaw, Michael (Sc'b'gh & Whitby)
Dixon, Piers	Knox, David	Shelton, William (Clapham)
Douglas-Home, Rt. Hn. Sir Alec	Lambton, Lord	Simeons, Charles
Drayson, G. B.	Lamont, Norman	Sinclair, Sir George
du Cann, Rt.Hn Edward	Lane, David	Skeet, T. H. H.
Dykes, Hugh	Langford-Holt, Sir John	Smith, Dudley (W'wick & L'mington)
Eden, Sir John	Legge-Bourke, Sir Harry	Soref, Harold
Edwards, Nicholas (Pembroke)	Le Merchant, Spencer	Speed, Keith
Elliot, Capt. Walter (Carshalton)	Lewis, Kenneth (Rutland)	Spence, John
Elliott, R. W. (N'c'tleupon-Tyne,N.,	Longden, Sir Gilbert	Sproat, Iain
Emery, Peter	Loveridge, John	Stainton, Keith
Eyre, Reginald	Luce, R. N.	Stanbrook, Ivor
Fenner, Mrs. Peggy	McAdden, Sir Stephen	Stewart-Smith, Geoffrey (Belper)
Fidler Michael	MacArthur, Ian	Stodart, Anthony (Edinburgh, W.)
Finsberg, Geoffrey (Hampstead)	McCrindle, R. A.	Stoddart-Scott, Col. Sir M.
Fisher, Nigel (Surbiton)	McLaren, Martin	Stokes, John
Fletcher-Cooke, Charles	Maclean, Sir Fitzroy	Stuttaford, Dr. Tom
Fookes, Miss Janet	McNair-Wilson, Michael	Tapsell, peter
Fowler, Norman	McNair-Wilson, Patrick (NewForest)	Taylor, Sir Charles (Eastbourne)
Fry, Peter	Maddan, Martin	Taylor,Edward M.(G'gow,Cathcart)
Galbraith Hn. T G.	Madel, David	Taylor, Frank (Moss Side)
Gardner, Edward	Mather, Carol	Taylor, Robert (Croydon, N.W.)
Gibson-Watt, David	Maude, Angus	Tebbit, Norman
Gilmour, Ian (Norfolk, C.)	Maudling. Rt. Hn. Reginald	Temple, John M.
Gilmour Sir John (Fife, E)	Mawby, Ray	Thatcher, Rt. Hn. Mrs. Margaret
Glyn, Dr. Alan	Maxwell-Hyslop, R. J.	Thomas, John Stradling (Monmouth)
Godber, Rt. Hn. J. B.	Meyer, Sir Anthony	Thomas, Rt. Hn. Peter (Hendon, S.)
Goodhart, Philip	Mills, Peter (Torrington)	Thompson, sir Richard (Croydon, S.)
Goodhew, Victor	Miscampbell, Norman	Tilney, John
Gorst, John	Mitchell, Lt.-Col.C.(Aberdeenshire,W)	Trafford, Dr. Anthony
Gower, Raymond	Mitchell, David (Basingstoke)	Trew, Peter
Grant, Anthony (Harrow, C.)	Money, Ernle	Tugendhat, Christopher
Gray, Hamish	Monks, Mrs. Connie	van Straubenzee, W. R.
Green, Alan	Monro, Hector	Vaughan, Dr. Gerard
Griffiths, Eldon (Bury St. Edmunds)	Montgomery, Fergus	Waddington, David
Grimond, Rt. Hn. J.	More, Jasper	Walker, Rt. Hn. Peter (Worcester)
Grylls, Michael	Morgan, Geraint (Denbigh)	Wall, Patrick
Gummer, J. Selwyn	Morgan-Giles, Rear-Adm.	Ward, Dame Irene
Gurden, Harold	Morrison, Charles	Warren, Kenneth
Hall, Miss Joan (Keighley)	Mudd, David	Weatherill, Bernard
Hall, Jonn (Wycombe)	Murton, Oscar	Wells, John (Maidstone)
Hall-Davis, a. G. F.	Neave, Airey	White, Roger (Gravesend)
Hamilton, Michael (Salisbury)	Noble, Rt. Hn. Michael	Wiggin, Jerry
Hannam, John (Exeter)	Normanton, Tom	Wilkinson John
Harrison, Col. Sir Harwood (Eye)	Nott, John	Winterton Nicholas
Haselhurst, Alan	Onslow, Cranley	Wolrige-Gordon, Patrick
Havers, Michael	Owen, Idris (Stockport, N.)	Wood, Rt. Hn. Richard
Hawkins, Paul	Page, Graham (Crosby)	Woodhouse, Hn. Christopher
Hayhoe, Barney	Page, John (Harrow, W.)	Woodnutt, Mark
Higgins, Terence L.	Parkinson, Cecil	Worsley, Marcus
Hiley, Joseph	Percival, Ian	Wylie, Rt. Hn. N. R.
Hill, James (Southampton, Test)	Peyton, Rt. Hn. John	Younger Hn. George
Holland, Phillip	Pike, Miss Mervyn
Holt, Miss Mary	Pink, R. Bonner	TELLERS FOR THE NOES:
Hordern, Peter	Price, David (Eastleigh)	Mr. Tim Fortescue and Mr. Marcus Fox.
Hornby, Richard	Prior, Rt. Hn. J. M. L.
	Proudfoot, Wilfred

Question accordingly negatived.

It being after Eleven o'clock, The CHAIRMANleft the Chair to report Pro- gress and ask leave to sit again, pursuant to the Order of 2nd May.

Committee report Progress; to sit again tomorrow.

ADJOURNMENT

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Goodhew.]