HC Deb 21 June 1972 vol 839 cc479-628

3.56 p.m.

The Chairman

Before calling the first Amendment, I must tell the Committee that I received this morning strong representations from the right hon. Member for Stepney (Mr. Shore) to reverse my ruling about Amendment No. 452, in page 6, line 33 after 'provision', insert 'or if in the opinion of the Secretary of State such Community customs duty is inimical to the expansion of world trade and the general reduction of tariffs'. As hon. Members know, so far as I can I try to meet their wishes, and I have given this matter careful consideration. Whereas I can help hon. Members on selection and grouping, there is absolutely nothing I can do if I cannot find an Amendment in order.

After much careful consideration I have to inform the right hon. Gentleman that, reluctantly and sorrowfully, I cannot meet his request. I hope he will accept that I have done my best.

Mr. Peter Shore (Stepney)

Naturally, I accept your ruling on the matter, Sir Robert, and I am grateful to you for considering it so carefully, as I know you have done. I make the minor plea that you might consider the debate on Amendment No. 365 in as broad a context as possible, as I am sure it would not be the wish of either side of the Committee to exclude consideration of the broader effects of a customs union on world trade, which is one of the matters we seek to discuss.

The Chairman

I am quite prepared to help the right hon. Gentleman as far as I can. I go further and say that if the Committee reaches the Question "That the Clause stand part of the Bill", it will be in order for the subject of the Amendment to be discussed. But I know that the right hon. Gentleman thinks, as I do, that that is somewhat unlikely.

Mr. John Mendelson (Penistone)

On a point of order, Sir Robert. I wish to raise, with your permission, a matter which has become urgent in the light of our discussions in the House earlier this afternoon.

Next week the Committee will have a single opportunity to discuss the future of the British steel industry. In the light of that, and because I do not want Government spokesmen to be able to say that they did not have notice of this question, I ask the Government, through you Sir Robert, before the debate next week, to provide all the documents, written statements and correspondence that have been exchanged between the Government and the European Coal and Steel Community and any relevant correspondence with Common Market countries and the Commission in Brussels concerning the future of the British steel industry. Unless these documents are available the debate cannot properly take place.

The Chairman

I am sorry, but I cannot entertain that point of order. The points made by the hon. Gentleman should properly be addressed to Mr. Speaker and not to me as Chairman of Ways and Means. No doubt what the hon. Gentleman said has been noted. I think we should proceed—

Mr. Mendelson

Further to that point of order—

The Chairman

The hon. Gentleman must help me. I cannot take a point of order when I am on my feet.

Mr. Mendelson

But, Sir Robert—

The Chairman

I cannot take points of order on subjects with which I am not competent to deal in this lower Chair. No one knows better than the hon. Gentleman the procedure of the House, and I am sure that he will accept that. We must proceed with the business.

Mr. Mendelson

I am very glad to accept it. It means that we are to ask Mr. Speaker for documents to be provided for the Committee. That is what I wanted to put on record and verify. I accept it.

The Chairman

The hon. Gentleman has it on record now. There is nothing I can do about it.

4.0 p.m.

Sir Ronald Russell (Wembley, South)

I beg to move Amendment No. 365, in page 6, line 40, at end insert: 'and on and after which the Community customs duty has been rescheduled to obtain the average of the duties of the member States of the enlarged community'. I am greatly indebted to my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) for drafting this Amendment. It is accepted as an obligation under Article 24 of the GATT that when a customs union is formed its primary purpose should be to facilitate trade between the constituent countries and not to raise barriers between the customs union and the countries which are not members of it.

The wording of the GATT in this matter lays down in Article 24(5) that the … duties and other regulations of commerce imposed by such a union shall not on the whole be higher or more restrictive than the general incidence of the duties and regulations of commerce applicable in the constituent territories prior to the formation of such union. The Committee might like to know that the GATT celebrates its silver jubilee this year, and that, whereas orginally when the agreement was signed there were 23 contracting parties, there are now over 80. Therefore, the GATT has increased in status over the 25 years.

The damage caused by the GATT to our Commonwealth preference system was merely trifling compared with the complete write-off of the whole system so far as it applies to our imports which will be caused by the Bill, and particularly by Clause 5, if it comes into operation, because it substitutes a Community preference for the Commonwealth preference system that now exists.

What does the Treaty of Rome—a treaty which has been in operation for only 15 years compared with the GATT's 25 years—lay down on this subject? Article 19(1) of the Treaty of Rome states: Subject to the conditions and within the limits provided for hereinafter, duties in the common customs tariff shall be at the level of the arithmetical average of the duties applied in the four customs territories comprising the Community … —the four territories then being France, Germany, Italy and Benelux. It seems to be completely logical that with the enlargement of the Community it is as necessary to recalculate the average of the customs duty as it is to adapt the provisions relating to membership of the institutions, the voting rights in them and the size of the Parliament. For instance, the number of Commissioners will be increased from nine to 14; the number of Members of the European Parliament will rise from 142 to 208; and there are other alterations in voting rights too numerous to mention.

The Amendment seeks to repair an extraordinary omission in the negotiations. If this omission is not rectified, it could result in a serious dislocation of our trade with our traditional trading partners outside the Community.

In 1971 our imports from preference area countries, which will not be eligible for association with the EEC, amounted to £1,800 million, or 20 per cent. of our total imports. Those countries are, of course, Canada, Australia, New Zealand, India, Pakistan, Ceylon, Malaysia, Singapore, Hong Kong and South Africa. More than half the volume of these imports enjoyed Commonwealth preference and most of that consisted of free entry. If the underlying spirit of the GATT is to be our guide, account should be taken of this large proportion of our imports which now enjoys Commonwealth preference and free entry. The simple MFN—most favoured nation—rate should not be applied under those qualifications when our tariff level is stated.

I should like to give a specific example. Our tariff on the £50 million-worth of canned fruit we import annually works out at about 10 to 12 per cent., the figure varies on different items and one cannot lay down a definite percentage. Three-quarters of that canned fruit comes in under preference and enters the country free of duty—except for sugar duty. Therefore, the true level of our tariff over the whole field of imports of canned fruit is not 10 to 12 per cent. but about 2½ to 3 per cent., whereas the Community's common customs tariff on canned fruit is 24 per cent. If there is no recalculation, our tariff against non-Community countries will be ten times as high after we join the Community as it is now. This seems to be monstrously unjust.

Furthermore, of the Ten we are by far the major importer of canned fruit and of many other foodstuffs as well. Our tariff pattern should dominate the Community much more than should that of any other member of it. In the three years 1968 to 1970 we took 47½ per cent, of the total imports of canned fruit by the Ten countries of the enlarged Community. The other nine countries took the other 52½ per cent. Nor can it be argued that the exorbitant 24 per cent, tariff on canned fruit can be justified by the Community on protectionist grounds. Production of canned fruit in the enlarged Community represents only 30 per cent. of its total consumption of canned fruit. I know that the transitional arrangements starting for these horticultural products in January, 1974, will cushion the blow, but the full impact is bound to come after the five years are ended just the same. Clause 5(1) provides that the common customs tariff shall apply after the end of the transitional arrangements.

I raised this problem briefly in a 15-minute discussion on a Private Member's Motion four weeks ago. I have since then received a letter from my hon. Friend the Under-Secretary of State for Aerospace, saying that this is a matter entirely for the GATT. My hon. Friend pointed out that a GATT working party has been set up to examine the enlargement of the EEC and he suggested that the matter should be left to the working party. I should like to know which countries are represented on that working party and whether they include all those Commonwealth countries whose names were mentioned a moment ago, and South Africa, whose trade will be so vitally affected by this provision.

I understand that the same procedure was followed as laid down by paragraph 7(b) of Article 24 when the EEC was formed and that the non-EEC contracting parties to the GATT had their ideas about how the duties of the five customs territories should be averaged and that the EEC had another idea. However, I understand that the EEC just went ahead and did what it wanted to do and ignored the wishes of the other members of the GATT. So we see the common customs tariff as it now is. This seems to me to be an unsure way of proceeding. Before we accede to the treaty on 1st January, 1973—if we decide to do so—surely this matter should be negotiated between the members of the enlarged Community and should not be left to the GATT.

Mr. Neil Marten (Banbury)

Is this not a perfect case for saying that the Third Reading of the Bill should be postponed until we receive a totally satisfactory answer on this point from the Common Market?

Sir R. Russell

Yes, I quite agree with my hon. Friend.

Mr. Douglas Jay (Battersea, North)

The hon. Member for Wembley, South (Sir R. Russell) has moved a most valuable Amendment which would limit, in accordance with the GATT, the extent to which this country would be rigidly bound by the EEC's present trading policies. It would help ensure that the United Kingdom was not compelled by Common Market regulations to erect new barriers to world trade and to damage the opportunity which will be offered next year when new international trade negotiations are due to start between the United States, Japan, the EEC and ourselves for freer world trade generally.

As it stands at present, the Government's existing settlement with the Common Market and also the Treaty of Accession involve a large-scale imposition of new tariffs and trade barriers by this country and, therefore, a major blow to the cause of world freer trade. The trade on which we should be compelled to raise tariffs would be far larger than that on which we could reduce them. Those who ignore this have not understood the nature or the arithmetic of the operation, and I am afraid that that includes the Prime Minister whose obstinacy in action is equalled only by his indifference to fact—as, for example, when he told us last week that his aim in the EEC settlement was to remove barriers between nations. In fact, by this settlement, on balance, we should be overwhelmingly erecting new barriers rather than removing them.

First, we should be forced to impose agricultural levies on the vast proportion of our food and feedingstuff imports, not merely from the Commonwealth preference area but from the United States and all over the world outside the EEC countries. Our total food and feedingstuff imports from the world outside the EEC in 1971 were as much as £1,750 million worth of trade. In addition to this, on non-food trade we should be compelled with the arrangement as it stands to impose the Common Market's industrial external tariff on the entire range of our manufactured imports from the great part of the Commonwealth preference area. These two major retreats into protectionism by this country, which is still the world's largest food importer and one of the two or three largest importers of all goods, would be a major blow to the expansion of world trade.

Britain's trade with the Commonwealth preference area today still stands at close to 30 per cent. of our total trade each way, and our trade with the Common Market still at only about 21 per cent. All sorts of propaganda attempts have been made to conceal this fact by juggling with figures, by using figures for the Commonwealth rather than the Commonwealth preference area, and so on. The real fact is that British exports to the Commonwealth preference area in 1969 were still 30 per cent. of our total exports compared with 34 per cent. as long ago as 1938, which is not very different in spite of all that has been talked about this.

Since 1969 the proportion of our exports going to the Commonwealth preference area has been tending to rise whereas that to the Common Market has tended actually to stagnate. The percentage of our exports going to the Commonwealth preference area rose from 30.4 per cent. in 1969 to 31.8 per cent. in 1971. The Common Market figure stood still at almost exactly 21 per cent. What has really happened to Commonwealth trade in these years is that the proportion of our trade with the preference area rose exceptionally, for obvious reasons, during the war and the immediate post-war period. It has now reverted to normal and is again gradually rising.

The Clause says: … there shall be charged, levied, collected and paid on goods imported into the United Kingdom such Community customs duty … as is for the time being applicable …". That means, clearly, that we are forced to impose the common external tariff on manufactured imports from virtually the whole of the developed Commonwealth and from those developing countries where no special arrangements exist. It means imposing a new industrial tariff on manufacturers from Canada, Australia, New Zealand and South Africa. Perhaps the Minister will make clear whether, as the hon. Member for Wembley, South suggested, it also means new tariffs on manufactures from India, Pakistan, Hong Kong, Ceylon, Malaysia and the West Indies, to mention only a few. Even with some exceptions, clearly that would mean a heavy blow at the Commonwealth, a new power to discriminate in trade between different Commonwealth countries under Clause 5(5), and, because of the magnitude of the trade, a heavy blow at world trade as a whole.

4.15 p.m.

At present, the United Kingdom accepts 90 per cent. or more of all exports from the Commonwealth preference area entirely duty-free. In return, the developed Commonwealth accepts about 60 per cent. of our exports duty-free into its markets, most of them with a preference at the same time. In effect, the preference area at present is a quasi free trade area on a world scale. All this would be abolished by the Government's present proposals.

The liquidation of this Commonwealth world-wide free trade area, which incidentally is linked with a number of local free trade areas such as CARIFTA in the Caribbean, the Australia-New Zealand free trade area and our own free trade area with Ireland, would be as damaging to the United Kingdom as to the rest of the Commonwealth. If we have to impose both food levies and the common external tariff on Commonwealth goods these countries must be expected to abolish the free entry or preference, or both, which they now give to British industrial exports.

I ask this specific question of the Minister. Have the Government had any assurance from Canada, Australia, New Zealand, India, Pakistan, Hong Kong and South Africa that they will not impose their ordinary most favoured nation tariffs on our exports if we penalise theirs? That has not been made clear, and I think that we should be told.

This is extremely important for the future of British exports. Not only are these Commonwealth markets growing. Several are the largest of all our present export markets, notably Canada and South Africa, which, after the United States, come within the first few British export markets at the present time. If all those countries and others in the preference area impose new tariffs on British goods our exports are bound to suffer severely.

The loss of British export markets throughout the world as a result of these policies would on the evidence markedly exceed the gain of markets in the EEC. Our trade balance would worsen. We should lose exports throughout the Commonwealth preference area. We should lose our present preference over the EEC in EFTA markets. We should suffer a large increase in imports from the Six which is bound to exceed our rise in exports to the Six because of our higher industrial costs. Owing to our higher living costs, we should suffer a marked rise compared with our competitors in the labour costs of producing exports to the whole outside world. Against all that, the only gain would be our rise in exports to the EEC.

Mr. J. T. Price (Westhoughton)

To illuminate my right hon. Friend's point, will he agree more specifically that the application of this provision would mean that massive exports of high-quality porcelain from the Potteries district of Staffordshire or of high-quality textiles from my own county of Lancashire would have to carry an external tariff of 24 per cent.?

Mr. Jay

It would mean that the great range of British manufactured goods would have to meet new and higher barriers in the markets throughout the developed Commonwealth and, very likely, still higher ones throughout the rest of the Commonwealth preference area.

Every authority which has seriously calculated the gains and losses to this country on non-food trade alone has come to the conclusion that there is a material loss on balance to our trade in the world as a whole.

I quote only three authorities. First, the Chancellor of the Duchy of Lancaster said in the House on 16th December, 1970, that the net loss would be between £200 million and £300 million a year. Secondly, the Labour Government's White Paper of February, 1970, gave a middle figure of £200 million.

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

Mr. Jay

I will just finish this point.

Thirdly, the CBI Report on EEC entry calculated that the loss of exports to the preference area alone would about cancel the gains to the EEC without allowing for the other losses.

Mr. Rippon

I should make it clear that I was referring simply to the Community Budget, not to the final outcome.

Mr. Jay

The right hon. and learned Gentleman is thinking of another quotation. His statement on 16th December, 1970, referred to visible trade in non-food items, not to the Community Budget. He rightly and reliably gave a figure of between£200 million and £300 million net loss.

Therefore, the consequence for the United Kingdom of accepting the Clause without the Amendment would be to reduce British exports on balance and to narrow our markets throughout the world. That is additional to the huge losses that we shall sustain to the balance of payments for higher food prices and the proposed £500 million payment to the Brussels farm relief fund, to which the right hon. and learned Gentleman referred in his intervention. Far from the world market for British industry being widened by the operation, it would be narrowed in the short and long term, and the whole fiction of the wider market, for the sake of which the British public is asked to give up all the parliamentary and democratic rights which we have been discussing, is just a statistical illusion.

It is a measure of the intellectual bankruptcy of some hon. Members who fall into this fallacy, including some Ministers, that they can give no answer to these arguments in terms of figures, but take refuge in flippant clichés and misleading platitudes instead of facts and figures.

There are two reasons why the Government cannot much longer treat the economic prospect before us with the degree of flippancy that we have heard in the last few days. First, the immediate balance of payments outlook and the position of sterling are not strong enough to bear the extra burden of £1,000 million a year on our balance of payments, which everyone in Europe, except the Chancellor of the Duchy, knows will be the consequence of the joining the EEC on these terms. Indeed, to rush into that situation and at the same time accept a régime of a more rigidly fixed exchange rate is a policy of economic madness.

Secondly, the Government will in any case be forced, however reluctant they may be, to widen their outlook a little and consider what world trading policy is to follow a second Kennedy Round. In February this year the United States, Japan, the EEC, and, I suppose, ourselves, agreed that a new round of international trade negotiations should start in 1973. An international committee in the OECD has been doing work in preparation for this.

What is our policy going to be in these negotiations? Briefly, it seems there are two broad alternatives before us. Either we can confine all our policies within the straitjacket of the protectionist EEC policies, at present largely dictated by France, or we can ally ourselves with the free trade forces throughout the world and work positively for an expanding world economy and more flexible exchange rates together with everyone who will ally themselves with those policies.

Perhaps we can consider those alternatives. If we take the narrow road and allow our policies to be "cabin'd … confin'd"by the narrow EEC obsession and nothing else, we shall cripple the British economy and sterling, irreparably injure the Commonwealth, set back the whole cause of freer world trade, lose our power to conduct a British commercial policy, and be in danger of becoming aligned against the United States and on the side of the protectionism of the Common Agricultural Policy.

If we followed the wider road—world trade negotiations are in any case due for 1973—we could, if we tried, seize a major opportunity for achieving a far more liberal world trading régime and a freer exchange rate system. We should also have the freedom to pursue our own commercial policy and not be bound to some artificial and remarkable com- promise to be called the common commercial policy of the EEC.

Two possibilities offer themselves for an outward-looking policy, both of them perfectly practical. One would be a second Kennedy Round, in which industrial tariffs could be further reduced overall, and a first attack made on the high protectionism of the CAP. The other would be to extend the free trade area principle of zero industrial tariffs for all countries willing to join, which already exist throughout EFTA, much of the Commonwealth and between ourselves and the Irish Republic. In either case, it would be perfectly practical to offer something approaching general free entry into all the developed countries from the developing countries. That would be a far more valuable concession to the developing countries than the largely fraudulent generalised preference scheme of the EEC, which is nullified by quotas which limit free enterprise.

If we follow the wider road, the whole world could take a major step towards more rapidly expanding world trade; the poorer countries would be increasingly benefited; no new trade barriers would be raised against anyone; an unnecessary and crippling burden on our economy would be wholly avoided; the Commonwealth would not be broken up; and an incipient trade war between the United States and the EEC could be averted. Can there be any doubt in the mind of any sane person whether the wider or narrower policy would be in the best interests of this country and the rest of the world?

Mr. John H. Osborn (Sheffield, Hallam)

Before the right hon. Gentleman sits down—

The Chairman

Order. The right hon. Gentleman has sat down.

Mr. Jay

I am quite willing to get up again.

Mr. Osbom

I should like to follow the right hon. Gentleman's argument, which he has deployed in other places, and to which I have listened on other occasions with the greatest interest. However, I fail to see what his argument has to do with the Amendment. He has given us an interesting dissertation on Commonwealth-European trade. Obviously, I do not agree with his appreciation of the situation. How does he fit it in with the Amendment which deals with the average of the duties of the member States of the enlarged community."? I do not relate the two.

Mr. Jay

If the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) had listened to his hon. Friend the Member for Wembley, South, who moved the Amendment, he would have appreciated that the hon. Gentleman was arguing that the Amendment would limit the damage done by our having to accept the Common External Tariff and would enable a more liberal system to prevail between us, the Commonwealth and the outside world. That was his argument which I took at face value.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

The Amendment seeks to raise British tariffs, which would mitigate against free trade. That must be in direct conflict with what the right hon. Gentleman has been suggesting.

Mr. Jay

The hon. Member for Wembley, South spoke of the British tariff on canned fruit imported from Australia. The hon. Gentleman wanted it to be lower, not higher. I wholly agree with him, and that was part of my argument.

4.30 p.m.

Mr. T. H. H. Skeet (Bedford)

The right hon. Member for Battersea, North (Mr. Jay), seems to have boxed the compass on a number of points, including exchange rates. The Amendment covers a narrow point, and I think that the right hon. Gentleman is precluded from raising the case that he in fact raised because of the Labour Government's White Paper, Command 3345 of July, 1967, which said in paragraph 42: So far as tariffs are concerned we shall be prepared to accept the Common External Tariff as it will stand after the Kennedy Round reductions have been made. If the right hon. Gentleman is suggesting that there should be other modifications in which considerations of canned fruit can be considered, I interpolate that it is possible to select canned fruit as one of those examples in which a benefit might be derived, but that if the mass of examples is taken it would not naturally result in any benefit being secured.

If we consider an average of duties, how will this work out in practice? It will mean that one has first to determine the terminal date when it will be secured. Will that be 1st January, 1973, or would it be advisable to wait until 1977 to take an average? If it is to be 1973, it will mean disruption of the present system in Europe, because the common Customs tariff would have to be suspended while the evaluation was being made, and it would be difficult to make an arithmetical evaluation.

If one says that certain commodities will have to be taken into account it will be necessary to have a system of weightage. Does one take the duties of Germany, Luxembourg and the United Kingdom as being equal, or does one say that because Western Germany is more important than Luxembourg one must give a certain weightage to its tariff? It is difficult to calculate what the precise result would be. If one works it out the other way and says that one takes an average of tariffs by 1977, which may be more realistic, the result will be zero, because they are all to be reduced to nil by 1st July, 1977.

The Opposition are, therefore, in the dilemma that they have not proposed any terminal dates. They have not proposed how it will influence the various countries concerned, whether it be those in the Six, or the additional countries, and if it is to be a deferred date one has to take into account the countries beyond the three now securing entry.

Mr. J. T. Price

As I understand it, the Amendment is not about internal tariffs being reduced to zero in 1977. We are talking, not about internal tariffs, but about the external tariff, and the hon. Gentleman must not try these debating tricks and hope to get away with them.

Mr. Skeet

I am talking about the common external tariff and about the imprecise nature of the Amendment. Everybody has been making wide-ranging speeches around the point. I am trying, in my brief intervention, to find out precisely what is meant by the Amendment, how the terminal date will be worked out, how it will be calculated, and whether it will mean that there will be a disruption of the tariff arrangements in Europe.

Sir R. Russell

Perhaps my hon. Friend would take into consideration how the terminal dates were worked out when the Treaty of Rome was prepared.

Mr. Skeet

One has to take into account that our terminal date will be 1977. If one takes it then as the average tariff, one finds that they are all reduced to zero. I have the figures here. The common external tariff will be reduced by 1st July, 1977, between the United Kingdom, the EEC and the World to nil. It will be falling at a percentage rate of 15, 13, 12, 11 and 10 over the years.

Sir R. Russell

The Amendment refers not to the common external tariff between the Community and ourselves but to the common external tariff between the enlarged Community and the rest of the world.

Mr. Skeet

I appreciate that, but we are concerned with two things—the arrangement between ourselves and the Community, and the arrangement between ourselves and the world. We have to fall into line. We have to harmonise our tariffs with the rest of the Community vis-à-vis the rest of the world, and that is the point that I am making.

What will be the terminal date? How will it be calculated? What will be the effect on new entrants and on the original members of the Six if this is implemented? I say that it is unworkable, and therefore, it is no good recommending to the Government that they should accept something that will not work.

Sir Derek Walker-Smith (Hertfordshire, East)

Does my hon. Friend appreciate that the definition of "relevant date" in the Clause to which the Amendment is addressed would be affected by the same process of re-scheduling as was the case in the Treaty of Rome for the original re-scheduling, the averaging, when the Community came into being? There is no difficulty about it. The same mechanism could be incorporated of an examination by GATT if necessary, possibly, if what my hon. Friend has said is correct, and I am sure that it is, with greater attention to the finding of the committee.

Mr. Skeet

I am grateful to my right hon. and learned Friend for his intervention. While all this re-scheduling is being done, what will happen to the common external tariff? I should have thought that it would have to be done overnight or fair time given for consideration between all the parties concerned in order to decide what is to be done. In other words, during this period there will be a moratorium or a period of great confusion or disruption. I dare say that we shall learn from subsequent speeches precisely how this will be worked out. The purpose of my intervention is to get elucidation on the Amendment.

Mr. Ridley

I thought that the right hon. Member for Battersea, North (Mr. Jay) had two principles in his speech which he got a little confused. I think that most people share his principle of wanting freer trade and wanting this country to have the strongest possible balance of payments that it can have.

Sometimes in his arguments against joining the EEC the right hon. Gentleman relied upon one of these principles, and sometimes he relied upon the other to justify his arguments, but the two principles themselves can often be in conflict. For instance, in supporting the Amendment he seemed to be entirely in favour of zero or low tariffs on food imports and canned food, but the effect would be adverse to our balance of payments.

When it comes to Commonwealth preference, the right hon. Gentleman suggested that it was a good thing for us to have Commonwealth preference because it increases our share of the market, but in fact it is not a free trade device. Looking at the Commonwealth scene, I should have said that it was not possible to claim that our relatively high share of Commonwealth or preference area markets was due to Commonwealth preference. Quite often one finds that Germany, Japan, America and other countries which have no preference at all in Commonwealth markets have done very much better than we have, not so much in terms of share of the market as in growth in the share of the market. The picture that one finds in many industrial goods in Commonwealth markets is that the British share is declining and that industrialised countries which have no preference are increasing their share in those markets.

Mr. Jay

I am sure the hon. Gentleman will agree, because it is only commonsense, that if we lose our present free entry and preference we shall do worse in future than if we keep it.

Mr. Ridley

I am coming to that, because it is at the crux of the answer to the right hon. Gentleman's argument.

It does not appear that through Commonwealth preference we have done remarkably well in Commonwealth markets. I believe that that is because the nature of world trade is changing. It is no longer a question of selling manufactures, the best and the cheapest, into the market, and in return buying the products of other countries which are better and cheaper than our own. The simple theory of trade has never existed truly, and exists less now than ever before.

First, there are the non-tariff barriers to trade. We all know that the French, for instance, are experts at having an apparently open market but not importing, and the Japanese are the same. As a country, we are probably one of the worst at this sort of dodge. I am glad that we are, because I happen to be a believer in free trade.

A much more important reason why trade and opportunity do not follow is that investment in a territory is very often far more important than trade within it. I believe that multi-national trading companies produce more abroad at their main centres or headquarters than the total of world trade. In other words, subsidiaries manufacturing in foreign countries are now a more important form of production or exchange of goods than straightforward trade.

This type of consideration made the right hon. Gentleman's calculations about flows of trade and losses of markets meaningless. If we approach the future in a sensible way we can do far more good for our balance of payments if we both invest abroad—I am coming to another very important point—and get them to pull down non-tariff barriers to trade than we can by clinging to Commonwealth preferences. The point where the right hon. Gentleman was a little too ingenious was when he represented Commonwealth preferences as if we had free entry for our exports to the Commonwealth. In many cases, it is only 2½ per cent. One might have an Australian tariff of 20 per cent, or 25 per cent., with a preference of 2½ per cent., so that we get only a minute advantage. Two and a half per cent, on a tariff on an item which may be worth many thousands of pounds is such a tiny price advantage. It is always the quality, delivery, reputation and efficiency of goods which sells them.

Mr. Arthur Lewis (West Ham, North)

In our reputable Press such as the Daily Telegraph, and all the Conservative newspapers, we read almost every week of housewives coming from all of the EEC countries to buy in Britain our imported Commonwealth foods to take them back to Common Market countries. They come here because our food is so cheap. Even the 2½ per cent. must mean that goods are much cheaper, because people can afford to come here every week-end, load-up and return to the Common Market countries.

Mr. Ridley

I am delighted to hear which newspapers the hon. Gentleman regards as reputable. I look forward to him learning from the journals he will read in the future. I was talking not about food but about manufactured products. It is true that we have a food régime which hitherto has carried no tax or import duties, and therefore food is cheaper than in other parts of Europe. I do not know whether that is such a wise thing. I have never been certain that it is to our advantage to have the price of a major commodity, such as food, out of context with other prices nearby. That is arguable, but it does not arise on the Amendment and I should not like to stray too far.

Captain Walter Elliot (Carshalton)

Would my hon. Friend agree that our food production is subsidised by the British taxpayer to some hundreds of millions of £s and that if a foreigner comes here to buy it he is subsidised by our taxpayers, and that this will go?

Mr. Ridley

It was only that I did not want to stray too far from the argument. I do not know whether the hon. Member for West Ham, North (Mr. Arthur Lewis) likes paying taxes which go to reduce the price of food so that the benefit can be given to the French, German and Dutch, who already have far higher wages than those paid in this country. But this is a complicated argument.

4.45 p.m.

Mr. Marten

May I bring back my hon. Friend to his point about industrial goods? As far as I recall, he said that a 2½ per cent. or 3 per cent. tariff was very small and almost insignificant, and did not have much effect on trade. But surely the whole argument for entering the EEC is that tariffs will be reduced and stimulate trade. Is my hon. Friend aware that over each year of the five-year transitional period, whereas the present average tariff on industrial goods is 7 per cent., it will be reduced by an average of only 1⅓ per cent. a year? For the first two or three years, anyhow, there will be an insignificant effect upon our exports to Common Market countries, following the logic of my hon. Friend's arguments.

Mr. Ridley

I am grateful to my hon. Friend for bringing me back to my last point. I do not believe that a point or two of percentage off the tariffs of Europe will have a dramatic effect on trade, just as I do not believe that a point or two on the tariffs with certain Commonwealth countries will have a dramatic effect the other way. These are very small percentages when taken on the total price of the goods concerned.

On the whole, our tariffs on industrial goods are higher than those of the EEC and most industrial countries. The right hon. Gentleman was saying that we should be entering into a sort of protectionist era if we join the EEC. That is not true in relation to industrial goods because, by small amounts, most of our industrial tariffs will descend to the EEC level. The effect of this internally and on the enlarged Community's trade with the rest of the world can be grossly exaggerated and is not dramatic.

I come to the reason why I do not believe that this is relevant. Trade in the old-fashioned sense, determined by the heights of tariffs, is not what the future of successful trading will be about. Much more important will be investment overseas, as it has been in the past; and more important still will be the ability to design, research into and make those things which every other country in the world cannot make.

The dominance of the United States throughout the 1950s and 1960s was be- cause she had for sale goods which other countries did not make, such as complicated plant, aeroplanes, rockets, aerospace products, every sort of electronic device and computers, in which she had a completely dominant position. This is how the United States managed, before others competed with her, to dominate the world markets.

We cannot survive as a country unless we, too, can make some if not all of these things. It does no help us one jot or tittle to have 2½ per cent. off a Canadian or South African tariff in making such things. If we can make aeroplanes in competition with the Americans and sell them against American competition throughout the world, that is of far greater value than any tariff, up or down, can be.

Tariffs are not important. The future of world trade will be determined entirely by our ability to make the sophisticated goods which the world needs in the future. It is why we should join the Common Market.

Mr. Jay

If the hon. Gentleman considers that tariffs do not matter, does he not realise that he has destroyed the one argument for our entering the EEC?

Mr. Ridley

I do not think that tariffs matter. The argument for our entering into the EEC is that we shall be able to get together with them because of the general psychological wish of Europe to unite. It will not come automatically. It will not come from the spirit which is evinced by the right hon. Gentleman and by some of my right hon. Friends and hon. Friends who are opposed to our entry.

The secret of making this great venture succeed is for our people, the French people, the German people, and the people of all the other Common Market countries, to wish to come together to make combined products and for them to understand why there should be no impediments to their doing so. It is an operation of collective willpower which will yield far greater benefits than any tariff, either up or down, in the way that the right hon. Gentleman has talked about, possibly could.

Mr. Eric Deakins (Walthamstow, West)

I shall not detain the House for long, because we have some rather more important Amendments to discuss later. However, I have been half provoked by the intervention of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). I do not think that in all the proceedings in the Committee I have heard in such a short space of time such a confused and confusing speech on any topic of the many that we have debated.

There were a number of internal contradictions within the hon. Gentleman's speech, ending with the biggest contradiction of all from one who supports entry to the Common Market, which is supposed—by lower tariff barriers—to give a great fillip to British industry. We are told by the hon. Gentleman that this does not matter.

The hon. Gentleman also suggested that we should put our faith in sophisticated goods. I could argue about that, but it is not strictly relevant to the Amendment, which is concerned with the future level of the common external tariff. It is not just a matter of canned fruit from countries like Australia. There are a number of developing Commonwealth countries about whose interests we should—on today of all days, with Amendment No. 447 coming up for debate after this—be primarily concerned.

It is not just Australia, for example, which is the one big Commonwealth country to send us canned fruit, taking canned fruit as an illustration of the argument used by the hon. Member for Wembley, South (Sir R. Russell). Swaziland is developing, slowly but efficiently, a canned pineapple industry. Obviously we would hope to take exports from that country in future of that type of goods at the present level of tariff, namely, Commonwealth preference. There is also a very fast-growing canned fruit industry—an export industry—from Malaysia to Britain and other advanced countries. Anything we do to increase the common external tariff compared with the present tariff and duty on these goods is wrong and immoral and should not be supported.

However, a wider issue is that the future level of common external tariffs, particularly on agricultural imports, will have a harmful effect on the future development of world trade, and particularly on our being able to persuade the other developing countries to offer commodity agreements and to be much more generous than they have been since the Second World War in their approach to agricultural trading on an international basis.

There is no doubt that when the General Agreement on Tariffs and Trade was started in the early post-war years it gave exemption from the rules of GATT to customs unions. No one at that time could have foreseen the growth of the great trading blocs such as the Common Market. The only customs union in 1947–48 was Benelux. That would hardly represent any real threat to world trade either then or now.

It is the growth of the Common Market and the protective network of preferential trading agreements, many of them with developing countries in Africa, which is the biggest threat to the future freedom and liberalisation of world trade. Larger and larger economic blocs—this would be a very large economic bloc indeed—generate most of their growth by increasingly trading with each other. There are statistics which I could quote, but with which I will not bore the Committee, to show this. For example, between 1965 and 1969 the Common Market traded with itself far more in agricultural commodities—live animals and meat, milk and milk products, cereals—and this could only be at the expense of trade with third countries.

That is not good enough. That is one of the reasons why many of us are opposed to the whole of this exercise root and branch. Therefore, it ill-becomes any hon. Member who is a supporter of the general principles of free trade—the hon. Member for Cirencester and Tewkesbury confessed that he was a supporter of free trade—to argue that we should also be joining the Common Market; because the two are incompatible. We shall be trading more and more within what will increasingly become a tightly-knit trading bloc in Western Europe which I think will eventually end up in a federation.

Mr. Ridley

The hon. Gentleman must address himself to the point. He believes in the efficacy of tariffs. We have higher tariffs than the CET. How can he say that this will bring us into a more protective climate when the opposite is true?

Mr. Deakins

I am all in favour of getting rid of tariffs on industrial goods. Where world trade has been hampered since the Second Word War is in the development of world agricultural trade. Until the Conservative Government came to power, subject to certain restrictions on dumping, we gave virtually free access to agricultural commodities from all over the world. We shall now have to adopt the Community system of levies and duties which come to the same thing as tariffs, with the rather worse consequence than tariffs that levies are not negotiable in GATT whereas tariffs are.

When we talk about eventually reducing the Community's common external tariff on industrial goods in the multilateral free trade negotiations which take place next year we shall all be able to throw our hats in the air and give two cheers, but not three cheers, because we shall not have succeeded in covering that part of world trade—agricultural trade—where the Common Market, whether enlarged or not, represents a real threat to the full liberalisation of world trade.

Mr. Tom Normanton (Cheadle

I am concerned as is the hon. Gentleman about the development and promotion of trade with countries in the category to which he has referred—for instance, Malaya and Singapore. Has he studied the facts of life as they exist not in a textbook but in the actual trading pattern as is known by industrial undertakings in Britain? The answer clearly is that the trade of these areas has been expanding—expanding, regrettably, not with Britain but with the very grouping of countries which we want to join. Therefore, the policy of the Common Market has not been restrictive in practice, regardless of the so-called growth of trade inside Common Market countries. The Common Market is expansionist and is developing its trade with the countries to which the hon. Gentleman has referred. The Common Market is not in conflict with those countries. It is in support of their further advancement.

Mr. Deakins

I am provoked—I regret this, Miss Harvie Anderson—into giving facts and figures, not from a textbook, but from trading statistics on the subject of international agricultural trade in the Common Market itself. The common agricultural policy was in formulation between about 1959 and 1964–65. Taking 1965 as the base year, the share of total imports by EEC countries from each other, in comparison with their total imports both from each other and from the rest of the world, rose for virtually every agricultural commodity one can care to mention. I will give a few select examples. In 1965 the Common Market countries' trade with each other in fresh meat—this is as compared with their total trade—was 40.4 per cent. It had risen to 55.8 per cent. in 1969. For milk and cream, the figure of 60.8 per cent. in 1965 had risen to 96.8 per cent. in 1969. This means that in 1969 Common Market countries were importing hardly any milk, cream, butter and cheese from any other country outside that trading bloc. This must be to the detriment of world agricultural trade.

Mr. Normanton

I fully appreciate the hon. Gentleman's concern about the desirability of promoting trade. Trade is not concentrated exclusively in agricultural products. It is a matter of the totality of trade. Surely the hon. Gentleman is not trying to convince the Committee that the best interests of the countries to which he has referred is served by their exclusive concentration on producing agricultural products. We all want to see the expansion of the economies of these countries as a whole—a balanced expansion, including an expansion in manufactured goods. This is precisely what the Common Market countries' trade pattern has promoted.

Mr. Deakins

The Common Market's trade with developing countries is on much the same basis as our own. It tends to import raw materials, some agricultural goods and perhaps some manufacturing products from them, but with the emphasis very much on the first category. I am concerned about agricultural goods. If the hon. Member for Cheadle (Mr. Normanton) is advancing the argument that developing countries should expand their production and then their exports of manufactured goods to the rich countries, I would support him. But I am not sure that he would support the move in that direction.

I do not want to see Britain as part of a very much inward-looking protectionist trading bloc, and the figures show that the Common Market, in relation to agricultural products, has been an inward-looking protectionist trading bloc which has hindered the development of world agricultural trade in the past ten years. It is likely to go on doing so if we become members simply because we shall give a big fillip to the development and continuation of the common agricultural policy in its present form. It is for that reason that, although I do not believe that the Amendment goes far enough, I feel that it is worthy of support.

5.0 p.m.

Mr. A. G. F. Hall-Davis (Morecambe and Lonsdale)

I have listened with care and interest to my hon. Friend the Member for Wembley, South (Sir R. Russell). It seems that his Amendment would bring us lower tariffs on some goods and commodities. No doubt many of us would wish for that as well as securing free access into the EEC. But it would overturn the whole basis of the negotiations and agreements reached so far.

We have spent a great deal of time in the past year or so following the course of negotiations in Brussels and listening to the reports that my right hon. and learned Friend the Chancellor of the Duchy has brought back to the House. We have considered very carefully whether the outcome of the negotiations justifies the acceptance of the terms as a whole and our entry into the European Community. The terms include special arrangements in many cases for developing countries, special arrangements for New Zealand dairy products, and offers of association to Commonwealth countries which, incidentally, I believe would give them increased access on better terms to the EEC as well as preserving their access to the British market.

But I think that my hon. Friend is saying that we should negotiate on one basis and implement on another. The negotiations were conducted, and were understood to be conducted, by those who were negotiating with us on the basis that we would accept the common external tariff. To seek to implement an agreement on the basis of a new external tariff weighted in favour of the pattern of Britain's trade, which is a product of the Commonwealth preference system of which my hon. Friend has been such a stout defender, would be a breach of agreements reached.

Sir R. Russell

Would my hon. Friend not agree that the Amendment seeks only to do what the Six did among themselves when they originally formed the Common Market; namely, to make an arithmetical average of their own tariffs at the time?

Mr. Hall-Davis

That may be so, but that was, clearly, not the basis on which the negotiations were conducted. It was, clearly, not the basis on which the EEC negotiators agreed to the special arrangements for certain countries. Some of the arrangements are generally held to be specially favourable for the expansion of trade prospects.

If my hon. Friend believes that this part of the treaty is sufficiently wrong that it justifies the treaty being rejected by the House, it would be more realistic for him to vote against the Question "That the Clause stand part of the Bill" than to press the Amendment, which I believe is seeking to invalidate the whole negotiations. If he feels that there is a possibility or a desirability of accepting the treaty but that there is a very strong case also for accepting his suggestion he would do better to adopt the approach of the official Opposition and seek to renegotiate the terms after entry.

I cannot support the Amendment because it is seeking to alter fundamentally an agreement which has already been made.

Mr. Normanton

I hesitate to launch into this debate along the lines of so many contributions we have heard during our discussions on the Bill. I am sure you would not agree that should be done, Miss Harvie Anderson, because it would probably mean going over the same old ground once more. I will concentrate my remarks briefly on the Amendment. I do so by taking up the point which my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) made, but which he did not make quite enough of, concerning the non-tariff barriers. The Committee must face the facts not as they stand in the Bill, not as they stand in the Treaty of Rome, but as they actually operate inside the Common Market.

The biggest obstacles to Britain developing her trade throughout the world are not purely tariff barriers, but the non-tariff barriers. That applies just as much within the Ottawa Agreement, and the Commonwealth agreements, which have operated throughout the world and which the right hon. Member for Battersea, North (Mr. Jay) regarded as constituting a quasi-world free trade area. They certainly do not constitute a quasi-world free trade area by any stretch of the imagination. According to the text books that situation applies, but in practice the realities are very different.

It is the non-tariff barriers, the administrative devices and the internal practices which dominate the scene to a far greater extent than do tariffs. I would certainly feel that my hon. Friend the Member for Wembley, South (Sir R. Russell) in tabling his Amendment, has not put into true perspective the importance of tariffs as opposed to non-tariffs. The argument might therefore be used that we are underestimating the effect of tariff barriers and over-rating the effect of non-tariff barriers. The answer is that the only way in which to dismantle non-tariff barriers is from within and not from outside. We can enter into all sorts of negotiations on tariff rates and other international agreements, but the only way in practice to dismantle or reduce the levels and effectiveness of non-tariff barriers is from within the Common Market.

Mr. Marten

I welcome my hon. Friend to these debates. We have not heard much from him. If the only way to deal with the demolition of non-tariff barriers in the Six or the enlarged Community is to go into the Common Market, what on earth does the GATT think it is doing, setting up an organisation to demolish non-tariff barriers throughout as much of the world as possible?

Mr. Normanton

I am grateful for that intervention, and particularly for my hon. Friend's hearty welcome to the debate, if "debate" is the correct term to describe much of what has been going on. There has consistently and persistently been an attempt not to contribute constructively to the debate but to destroy the Bill, and that is not what I was elected to do.

Mr. Anthony Fell (Yarmouth)

On a point of order. Is not it going a little far, to suggest that the whole debate has been aimed at destroying the Bill?

The First Deputy Chairman

That is not a point of order but a matter of opinion.

Mr. Normanton

I shall not make a blanket accusation that the whole of what has taken place has been with that one object in mind. It has been attempted so much by those who oppose the Bill that I question whether it is correct to use the word "debate". But there comes a time when a particular point requires to be dealt with, and that is why I am speaking on the Amendment.

The non-tariff barriers can and will be demolished. They will be demolished from within the Commission, from within the many institutions which have been operating increasingly effectively inside the EEC. I am concerned that those barrers should be dismantled, but it will not be done from outside, from across the Channel.

Mr. Ridley

Does my hon. Friend regard origin marking as a non-tariff barrier?

Mr. Normanton

I am tempted to say that we may have arrived at a point where a debate is just about to begin, but I will not enter into a debate on that point with my hon. Friend.

The fact is that there are hidden barriers I do not refer to those enshrined in legislation. I am referring particularly to the administrative devices, the agreements which operate in industries for regulating and directing, which conflict with some of the declared objectives of treaties and the like. But they can be demolished only from within. Therefore I feel that the Amendment concentrates on the wrong issue and will be of little or no consequence to British trade when we are in the Common Market.

Mr. J. T. Price

I am fascinated by the hon. Gentleman's line of argument. I have never heard him speak in one of these debates before, and I join in the welcome that has been extended to him. Presumably the hon. Gentleman is advancing his argument as a substantial industrialist in the north of England, my part of the country. If there is any truth in the argument that to get rid of all the nefarious practices, the dodging of GATT regulations, and so on, with which he is charging our European prospective allies, the same argument will apply with even greater force for economic union with Japan. We are at the receiving end of Japanese practices even more than we are the receiving end of some of the European practices to which the hon. Gentleman objects. I wish he would be more forthright and honest with the Committee, because he has a great deal of inside knowledge of these matters.

5.15 p.m.

Mr. Normanton

I will not labour the point excessively, but I note what the hon. Gentleman has said. The facts about the non-tariff barriers are as I have stated them. How else can we dismantle them effectively, other than from within, around the table?—[HON. MEMBERS: "The GATT."] The GATT has a broad general objective which this country and the member States of the EEC fully support. We deceive ourselves if we try to give the impression that we are unique in what we seek to do to expand world trade. We are not unique in the world. Other countries, including certainly one or two inside the Six, are far more expansionist-minded and non-restrictive-minded in terms of world trade than Britain is. I deplore that, but the last thing I would do is to deceive myself as to the facts. That is why I earnestly hope the Amendment will not be supported if there is a Division. It is virtually irrelevant in the context of the overall objective, which must be in the interests of British industry, for British industry to be involved in the areas for discussion and resolving the problems. They will not be resolved by the Amendment.

Many people believe that the Ottawa Agreement operates as a full and free trade area. The right hon. Member for Battersea, North is deceiving himself. He is not present now, unfortunately, so perhaps I should not pursue that matter too strongly.

But, and here I come to a matter in which the hon. Member for West-houghton (Mr. J. T. Price) knows I have an interest and in which he has a deep interest as well. The textile industry of the north west of England has consistently claimed that it is not the Ottawa Agreement that has been our problem but the way in which it is administered. There was free entry of manufactured goods into this country until the decision was taken that at least the textile sector should be excluded from the Ottawa provisions. The decision was implemented under the present Government, but it was declared publicly by the previous Administration. There are many outlets for British textiles under treaties and tariff arrangements, but they are all consistently being circumvented by non-tariff barriers—the need to obtain a licence, currency, permits and authorities, and to prove that the goods concerned cannot be made in the country to which they are being shipped. All sorts of devices are being brought to bear, and they are the real obstacle in the path of export promotion. In that sense I fully support all that my hon. Friend the Member for Cirencester and Tewkesbury said.

Mr. Michael Grylls (Chertsey)

This perhaps rather dry Amendment we are discussing has caused what is to many hon. Members a surprisingly sparkling debate. If the main argument has been between hon. Members on this side of the Committee, that does not matter. I want to comment briefly on the exchanges between my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) and my hon. Friend the Member for Banbury (Mr. Marten), when we really got to the nub of the matter of our entry into the EEC in relation to the value we will get out of it. It was sought to suggest that there was really not much in it. That is not a very unusual line for my hon. Friend the Member for Banbury to follow. We have come to know it very well indeed in its recurring theme throughout these debates.

It is, of course, easy to refer to the average common external tariff and say that it is some 8 per cent. or 9 per cent. and therefore is not very much, so why need we worry? But averages can be and are misleading. For example, the Community tariff on commercial vehicles is 22 per cent. That is no mean tariff to get over. The tariff for organic chemicals is 18 per cent., on plastics it is 16 to 18 per cent., on tractors it is 16 per cent., and on diesel engines it is 14 per cent. These are not minor tariffs which we now have to get over in order to sell within the Community. Therefore, a progressive reduction of the tariffs is surely something from which the whole of British industry could expect to benefit, and benefit quickly. It is right to point these things out when talking of averages.

Mr. Marten

I did talk about averages. Of course the industries which my hon. Friend has mentioned will benefit the most, but to get the average of 7 per cent. there must be, as a counter-balance, a substantial number of our industries which now face a tariff of less than 7 per cent. and which will hardly benefit at all.

Mr. Grylls

But this is the whole point of an average. What my hon. Friend says is true, but I can only remind him that very substantial British interests are selling in Europe. For example, we are making sales of commercial vehicles despite the 22 per cent. tariff. It is surely logical to expect that if these rates are progressively reduced after the first three years by some 80 per cent. we must surely gain enormously. That is the simple point I want to make.

Mr. Deakins

Surely the hon. Gentleman's remarks in this connection, which I fully support, are being misdirected to the hon. Member for Banbury (Mr. Marten). They should be directed to the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) and the hon. Member for Cheadle (Mr. Normanton), both of whom, for different reasons, said that tariff barriers as such were not important.

Mr. Grylls

I was simply trying to answer the point—which I think the hon. Gentleman missed—made earlier in the debate that we had very little to gain, that there might well be hurdles to get over. I have been trying, successfully I believe, to illustrate that there are substantial hurdles against our exporters at the moment but that once inside the EEC we shall benefit. Whatever our views about entry, surely a central point which must be accepted is that at least we are going to gain very substantially. After the transitional period, there will be complete freedom of movement.

A point which is not often made in these debates is that we shall also have access to the associated territories. This in itself proves that the Community is an outward looking body—it is looking to the world and to the expansion of world trade. Of course, it would have been even better if we could have had a community of the whole world, but we must proceed step by step, and to increase the Community of Six to a community of ten, with a population of 300 million, and with over 100 million people in associated countries like Turkey, Greece and North African countries, must be of substantial advantage to us as well as being of advantage to these associated countries.

It is quite wrong, in view of the plain facts, to suggest that the EEC has been inward looking with regard to the developing world. We can all quote lists and statistics, but we should try to avoid doing so because we probably all know them. However, the overseas trade and investment by the EEC has been very substantial and we should welcome it, whatever our views of entry. I will quote only one or two figures. The EEC's trade outside the Community from the period 1958 to 1970 increased by 290 per cent.

Mr. Dennis Skinner (Bolsover)

In average?

Mr. Grylls

There is no average in that at all. On the other hand, the volume of all world trade increased by only 189 per cent. in that same period. I believe that these figures also prove that we are about to enter a Community which is already outward looking, and we, with our Commonwealth associations, will make sure that it is even more outward looking in expanding trade throughout the developing countries.

Finally, I turn to the question of industrial raw materials, the sort of materials, which are so important to developing countries. Some 90 per cent. of our own industrial raw materials which we at present import from countries outside the Community will continue to enter duty-free. That is important to those countries. To suggest that once inside the EEC we shall put up massive barriers against these other countries whose only exports are such raw materials is far from the truth. One of the Chancellor of the Duchy of Lancaster's most successful negotiations with the EEC was to continue the entry of this 90 per cent. of our industrial raw materials duty-free. That is a vital aspect and the House of Commons would have looked with a much more jaundiced eye if he had not succeeded in achieving that.

Mr. Deakins

Does not the hon. Gentleman appreciate that the EEC policies have all along been directed to trying to grow all the produce in Europe that can possibly be produced, including rice, which one would have thought an outward looking Community would want to continue to import from the developing world? Had it been possible to produce raw materials within the Six, they would have done so. It is because the members of the Six cannot possibly produce raw materials which do not exist in Western Europe that they continue to import them and therefore import them duty-free.

Mr. Grylls

If that is true, the developing countries will hardly suffer because I do not see much opportunity for producing bauxite, rubber and other things in Europe. There is no danger there to the developing countries. But in any case that is not the attitude of the EEC. I understand that there is a shortage of rice in many parts of the world, so to grow it in Europe is actually a contribution to world supplies. The point made by the hon. Gentleman does not help his argument. I stand firmly on the figures, which are indisputable, showing that from 1958 to 1970 the EEC's trade with the outside world rose 290 per cent. while world trade as a whole rose 189 per cent. These figures clearly prove that the Community is outward looking, and we will make it even more outward looking once we join.

5.30 p.m.

Mr. Richard Body (Holland with Boston)

The hon. Member for Chertsey (Mr. Grylls) began by taking my hon. Friend the Member for Banbury (Mr. Marten) to task for arguing only about average tariffs which exist against us in the EEC, and he listed a number of items of the higher tariffs, going up to 22 per cent. in the case of certain heavy lorries. I want to pursue that point further because it is relevant to the Amendment.

I hope that we shall be told by the Government whether countries like Canada, Australia and the United States have given any hint of whether they will retaliate once Clause 5 is enacted and we impose against them the common external tariff. In Canada, we have the advantage of duty-free access for our motor vehicles.

The tariff for other countries is 17 per cent. In a letter to me British Leyland assured me that it will not worry about the 17 per cent. duty imposed upon it, that its lorries and particularly its cars will still have the same access to Canada as now. It may be right, although it seems strangely naive that it should think so. It seems odd that it should shrug its shoulders over that kind of tariff yet worry about the comparatively puny one that exists just across the Channel now. Those of us who attend trade exhibitions in the Common Market know, when we go to the stands occupied by agents of British Leyland or any of our motor manufacturers, that the complaint is made about their inability to obtain supplies for the market, with the result that in many cases they are selling fewer cars across the Channel now than they were some years ago when the tariff was higher.

If we do not amend Clause 5 and find ourselves obliged to impose a common external tariff against our existing trading partners we will be inviting retaliation. There cannot be any real argument about that. We have been warned by a number of people about that, perhaps in the strongest terms by President Nixon's Commission on International Trade. This report was published last September and had woefully little attention in newspapers here. This is one of the conclusions reached by the Commission: The next few years will determine whether the world will drift down the road of economic nationalism and regional blocs or will pursue the goal of an open world economy. The report goes on to emphasise, with ample statistics and argument to support its contention, that our entry to the Community and the enlargement of it by the membership of other countries will do nothing to liberalise world trade but will have the contrary effect. It uses exactly the same arguments as the hon. Member for Walthamstow, West (Mr. Deakins) and others have used so often, that there can be no true liberalisation of trade unless we tackle the problem of agricultural protection. We have largely won the battle of tariffs and in that respect I agree with my hon. Friend the Member for Cheadle (Mr. Normanton). The real barriers from now on are the non-tariff barriers with industrial goods and agricultural protection for food, particularly as far as this concerns the developing countries.

This report also gave the answer to the point raised by my hon. Friend the Membr for Cheadle. It dismisses the idea of the Community being a means of liberalising trade among its own members. All of us know of the large number of non-tariff barriers that exist between member countries. We have only to talk to some of the Dutch horticulturists to hear how they try to penetrate the German or French markets and the difficulties they have. There is an endless variety of non-tariff barriers interrupting the free flow of trade within the Community.

I give one more quotation from the report because it answers the argument adduced by my hon. Friend the Member for Cheadle who argues that we shall only be able to break down these non-tariff barriers if we join the Community—[An HON. MEMBER: "Rubbish."]—yes, which is rubbish. The report says: The Commission believe that the time has come to begin anew a major series of international negotiations to prepare the way for the elimination of all barriers to international trade and capital movements in 25 years. Here was an invitation from the United States to other countries to play a part in liberalising world trade, in dealing not just with tariffs but with non-tariff barriers That invitation met with no response from this country. Those of us who want to liberalise trade, who believe that that should be the objective of this country, regretted enormously that we have done nothing to respond to this invitation to liberalise trade on a world-wide basis in a way which this Commission and many others around the world believe to be the most satisfactory approach.

My hon. Friend the Member for Chertsey insisted that the Community was outward-looking and expansionist and that the outside world would not be endangered by the erection of this common external tariff under Clause 5. Might I with respect remind him of those four questions put by M. Pompidou to my right hon. Friend the Prime Minister just over a year ago? Those of us who have read the transcript of the broadcast made by M. Pompidou to the French people are well aware of what they are. The fourth question made it very plain how we would have to behave towards the outside world if we were to be admitted into membership. I quote M. Pompidou from the translation prepared by the French Embassy, so I take it that it is the authentic translation. M. Pompidou said: The fourth question which, was probably the most important of all I asked the British Prime Minister, was what he thought of Europe, in other words whether Britain was really determined to become European, whether Britain, which is an island, was determined to tie herself to the Continent and whether she was prepared consequently to loosen her ties with the open seas towards which she had always looked.

Mr. Grylls

That may well be a true report of what he said, but the facts speak louder than that quotation. The official and private aid from the Community to the underdeveloped world in 1969 was exactly 1,000 million dollars larger than the aid given by the United States to the rest of the world. That does not show in inward-looking Community.

Mr. Marten

Might I intervene before we have a reply—

The First Deputy Chairman

Order. Mr. Body.

Mr. Body

I will gladly reply to that point in the next debate, which I think will be more appropriate. It will be made abundantly plain that much of what the Community has done is akin to a fraud on the developing countries. Some of the figures are shown to be absolutely bogus.

That was the question put by M. Pompidou. We know what the answer was. That gives the lie to the statement that the Community, even when enlarged, will be outward-looking. That is why I believe that President Nixon's Commission, when it said that the question for the world now is whether we are to divide into regional, economic and nationalistic blocs or whether we are to pursue an open world economy, posed the question in the right way. If this Clause is not amended in the way suggested we will be putting up barriers to trade against our existing trading partners in a way which will be inviting retaliation. We shall regret it. More important, it will constrict the growth of world trade.

Mr. Wilfred Proud foot (Brighouse and Spenborough)

I think the right hon. Member for Battersea, North (Mr. Jay) put his finger on the kind of Committee which this has become when he said that my right hon. and learned Friend the Member for Hexham (Mr. Rippon) was giving the wrong quote. In other words, this Committee has become a trading of quotes. There are no tariffs on those.

If I had my way in this world, it would be a total free trade area. I would opt for that. There are three kinds of Tories: the gunboat Tory—I am not one of them; the protectionist Tory—I am not one of those; and the low-tariff Tory, as I am, because it is absolutely impossible to be a free trade Tory in this day's world. So I would say that all the emotions about Commonwealth preference and so on must be put on one side and that we should look straight at the future of our country. If we are to succeed in our lifetime and in our children's lifetime we have got to get into the Common Market, and this is partly a matter of tariffs.

I would take the right hon. Member for Battersea, North to task. He was at the Board of Trade for a time. It is incredible that he did not learn any thing about trade while he was there. He talked as though trade stands still. It never stands still. It is changing all the time. The hon. Member for Walthamstow, West (Mr. Deakins) has a similar type of syndrome. He thinks things are stationary. They are not. They are moving all the time. He was talking about world agricultural production—

Mr. Deakins

World trade.

Mr. Proud foot

He was talking of world trade and food production, and in an interruption he specifically mentioned agricultural production and food. If he looks at the figures he will see that world agricultural production is rising. There has been a green revolution in India. In the next three years India, of all countries, hopes to be exporting food, and the Indians expect a white revolution in the next few years in India. So world production of food is going up, and it has not been hurt by these tariffs and what the hon. Member and others have called the Common Market's restrictive practices.

When we look at tariffs so much depends on which end of the telescope one is looking at them from. My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) said that tariffs do not matter. He could have a point. I do not think they do matter when you are a vigorous industrial country, but if Tom Mboya—someone like that—in a country in Africa, for instance, puts up tariffs against our goods it is because he wants to achieve an industrial society. Those countries do that because they want to improve the standard of living of their own peoples, and so far nobody has proved them wrong. They put up tariff barriers when they become independent because they believe that that is the way to achieve what they want.

Of course, if we all believed that it would be possible to have a world of free traders I do not think a single Member of this Committee would want to be anything but a free trader, but we have to look at things straight and with things as they are our best opportunity is to go into Europe.

The right hon. Member for Battersea, North seems to believe that Commonwealth preference is the only way of improving our country's lot but he must know of the most favoured nation causes—and there are 190 most favoured nations with only about four which are not favoured in the whole world. We should stop hurling quotes across the Floor at one another and look at the matter as a serious proposition.

Many hon. Members have tried to prove that Europe is inward-looking. Again, they produce selective quotes. It is just as easy to quote statistics the other way, and I will have a go at exactly that.

5.45 p.m.

If we look at aid not trade we see that in 1969, the latest year for which figures are available, the total from Great Britain was 1,145 million dollars. The total going out from the whole of Europe was 5,261 million dollars. That is something like four to five times greater than our aid going to other countries. [Interruption.] In that case, I will quote Germany. Germany was providing 1,501 million dollars. That was privately. The official was 544 million dollars. The total figure was higher than ours in Britain.

Mr. Deakins

Does the hon. Gentleman know the relationship between the German gross national product and ours, and that the German gross national product has gone up 20 per cent. to 30 per cent, and that that would be reflected in the aid figure?

Mr. Proudfoot

The better we do in this country, the better products we turn out, the better we do, the better our trade, the better we can help backward countries. If the Germans have a greater gross national product than ours we should aim to get a better one as well.

Mr. Marten

I tried before to get in on this subject, and I am grateful to my hon. Friend for giving way. Is he aware that in percentage terms the EEC market accounted for by imports from developing countries in the last 10 years has dropped and that Mr. Arnold, the Commonwealth Secretary-General, has given figures to show a drop of 22 per cent. to 15.9 per cent. and that my right hon. Friend the Secretary of State for Trade and Industry has confirmed this drop very recently, though in slightly different figures?

Mr. Proudfoot

I think my hon. Friend is juggling with the figures. I will juggle figures with him every day. I tell him one simple thing as a business man. He cannot bank a percentage. He is talking about percentages and percentage differentials, and that is the simplest political trick in the book. I will not swallow that one, but I will check what he said later.

Again, when we talk about the EEC countries being inward-looking, there is association with 30 other countries, 10 seeking trade arrangements which they will no doubt get, 12 other European countries which will no doubt get some trade agreements, 20 African countries and 13 other countries elsewhere.

The Common Market is negotiating with other countries all round the world, which would like to trade—

Mr. Deakins

Economic imperialism.

Mr. Proudfoot

Economic imperialism, the hon. Member says. No matter how we look at it, that trade will help the backward countries, and those countries are trying to get a deal with Europe.

Mr. Deakins

Does the hon. Member realise that these preferential trading agreements—incidentally, they break two of the rules of GATT, though that would not worry him—are with a very small percentage of the world population in the developing countries? These small countries, either Mediterranean or African countries, have comparatively small populations. The total population of Africa is less than the population of Japan. Has he compared that with the populations of India, Pakistan, Bangladesh, Malaysia, Indonesia and those other countries?

Mr. Proudfoot

Then it is far better that those smaller countries should be connected with Europe, because there is a market of 250 million people which is a better market for their products than that in this tiny island with 50 million people. These arrangements are still in the interests of those people.

The hon. Member says that I would break all the rules of GATT. I think I am the only member of the Committee who still gets all the amendments to the tariffs. In the former time when I was a Member of Parliament I put down a series of Questions about them. Does the hon. Member know that there is still a 20 per cent. tariff on airships into this country? Let him try to negotiate himself out of that one. All these negotiations, the Kennedy Round and the great movements to free trade, have not succeeded in getting rid of tariffs on airships. That is why I want to take the opportunity to go into Europe.

I am often mistaken for a Yorkshire man. I have lived there for 40 years, and I want to bring to the attention of the Committee a recently published document which deals with the effect of the Common Market on the Yorkshire and Humberside region. It was mentioned in passing in our debate on Monday. According to this document, each industry in Yorkshire was asked about its attitude towards the Common Market. Obviously, tariffs were the first things that hit the industrialists. Our tariffs are higher than the tariffs in Europe. How people can say that Europe is inward-looking when our tariffs are higher than theirs is beyond me.

Many hon. Members who have taken part in the Committee proceedings since the beginning are suffering from self-hypnosis. They have hypnotised themselves into looking at this question narrowly. I invite them to look outward, as Europe is doing. If they do that their arguments will fall to the ground.

I want to advance an argument which I and my hon. Friends should find attractive. It is in a pamphlet called "Wages and Prices in a Mixed Economy". I quote from what Professor Meade says. It surprises me that sometimes even professors have common sense: But far and away the most effective way of promoting competition and curbing monopolistic powers would be to admit the free import of goods from all foreign sources; and this would also make producers who had to face foreign competition more willing to resist wage claims". What could be more apt today than that quotation? To be fair, the professor would prefer world free trade, but he believes that our next opportunity is to go into Europe.

Mr. Body

Will my hon. Friend take it from me that Professor Meade has written a pamphlet denying that contention and saying that as a free trader—andI sit humbly at his feet—he believes our entry into the European Community would restrict the growth of world trade and be a barrier to the liberalisation of trade?

Mr. Proudfoot

I make a contribution to the Institute of Economic Affairs, as I believe in competition, and that pamphlet was written for the IEA. I have read the pamphlet by Professor Meade which has been referred to by my hon. Friend, and I reckon that Professor Meade came down firmly on the fence in his attitude towards Europe. One reason why he may do so is that the IEA is a voluntary organisation receiving contributions from anyone who wants to give it money, and industrialists who give it money are interested in a free competitive economy. Anyone who has studied the Common Market and tariffs knows that many industrialists want to go into Europe.

I know that is so in my constituency. As soon as I was elected I sent round a questionnaire to the 440 factories in my constituency. About 300 industrialists responded, 80 per cent. of whom wanted to go into Europe. That is good enough for me. Europe is the place where our country should go. I am convinced that tariff barriers must go, worldwide. Our first step is to get into Europe because there we know that the tariff barriers will go in seven years' time.

The Minister for Trade (Mr. Michael Noble)

We have had an interesting debate on the Amendment finishing with a robust speech by my hon. Friend, the Member for Brighouse and Spenborough (Mr. Proudfoot). While I am grateful to my hon. Friend the Member for Wembley, South (Sir R. Russell) for introducing the Amendment, I must tell him before I start that I cannot possibly accept it. Before trying to answer some of the wider questions which have been asked, I will bring the Committee back to the purpose of the Amendment.

It may be helpful to the Committee for me to deal briefly with the purpose of Clause 5(1). It is to create a clear legal charge to the Customs duties fixed by the Community, there being no charging provisions in the relevant Community instruments. This charge takes effect from the relevant date. The relevant date is the date on which any duty ceases, under the treaties, to be affected by any temporary provisions, that is to say, the end of the transitional period for the particular goods as enacted in the Treaty of Accession. The Amendment makes the arrival of the relevant date, and thus the power to charge Community Customs duties, conditional on the modification of those duties.

I remind my hon. and right hon. Friends that both the present Government and their predecessors made it clear from the outset that the United Kingdom accepted the Common Customs tariff as it would stand at 1st January, 1972 on completion of the Kennedy Round. This has long been known to the House of Commons and approved by it. It is, therefore, unrealistic now to seek, as the Amendment does, to frustrate the Government's ability to give proper effect both to their obligations and to the expressed will of the House of Commons.

Perhaps my hon. Friend the Member for Wembley, South, was being a little naïve when he said that, because the Community went through this process twelve years ago when it started, it is right to go through it all over again now more members are joining. Both this Government and the one before assured the Community that this would not take place. We have accepted it, and to say that what happened 12 years ago should now be done again is to ignore what has happened since.

Even if the Amendment were acceptable on other grounds, it cannot be interpreted precisely, but I do not want to dwell at length on technicalities. There is no generally agreed method of calculating "average duties", and the results can differ considerably according to the method used.

The Amendment would commit the United Kingdom to a procedure which is not compatible with our international obligations and the legitimate expectations of many of our overseas suppliers. The Amendment envisages the CCT being adjusted a priori rather than in response to the diversity of actual commercial interests affected by enlargement of the Community. Moreover, perilous though such calculations can be, the arithmetic average level of the acceding countries' tariffs is somewhat above the average level of the CCT, and rescheduling the CCT in the way proposed could well increase it according to the method of calculation used.

The better course—indeed the only practicable course—is to follow the principles and procedures laid down in the General Agreement on Tariffs and Trade, which requires no amendment to the Bill. GATT lays down that the duties and other regulations of commerce imposed at the institution of a Customs union shall not on the whole be higher or more restrictive than the general incidence of the duties and regulations previously applied. It goes on to provide that compensating adjustments should be negotiated where earlier tariff concessions are modified. This constitutes an obligation of the enlarged Community under the GATT, and the necessary procedures and discussions, in which we participate in formulating the Community's position, have now been started. I cannot at this early stage say what will be the outcome. Nor can I discuss the detail of what will be long, complex and confidential negotiations between the many Governments concerned.

It has to be borne in mind that, while various countries may have rights to compensation where duties are increased, this will often be offset by reductions in duties. I put it to my hon. Friends that this process, which enables overseas suppliers affected by enlargement to pursue their own particular interests, is much more likely to yield satisfactory results than simply striking an arbitrary mathematical balance. It is certainly the only course which would be acceptable to them consistent with the international obligations of both the United Kingdom and the enlarged Community of which we shall be a member.

6.0 p.m.

I turn to some of the broader issues of world trade raised during the debate. I think I can assure the House that the Government attach no less importance to the expansion of world trade than they do to the general reduction of tariffs and other barriers. The fact is that we shall be fully able to pursue these objectives within the compass of our Community obligations through our participation in all decisions affecting Community duties—indeed we shall be better able to do so. The facts simply do not support the notion that the Community and the CCT may be obstacles to the expansion of world trade. In 1971 the EEC's imports from the rest of the world amounted to nearly 100,000 million dollars, almost double their level five years earlier. In the Kennedy Round the average level of the CCT was reduced by about 35 per cent. and is now about 8 per cent.—slightly below our own, which is distinctly modest by international standards. We do not lose by merging our tariff autonomy into the enlarged EEC.

In regard to trade policy and negotiations, EEC membership will confer on us added strength and added responsibilities. Our membership of the Community comes near the beginning of a decade of important activity in international trade policy. It would be nice to think that the liberal characteristics of trade policy pursued by successive British Governments were principles which today can be taken for granted. But this, alas, is not the case and one of our tasks in the Community will be essentially a negative but still vital one, namely to act in concert with our partners in the EEC to preserve the multilateral framework against which trade and trade negotiations are conducted and to use our influence to combat protectionists forces wherever they appear in the developed world.

Mr. Shore

Before the right hon. Gentleman develops his thoughts about the multilateral trade strategy that he wishes Britain to pursue, may I ask him to make one point clear? It relates to our formal position in relation to proposals either to raise or lower the CET in the years ahead. We all understand that the Commission undertakes negotiations on behalf of Community members, but would particular tariff proposals made by the Commission have to be agreed by all the member countries?

Mr. Noble

I am not certain I can give the right hon. Gentleman a clear answer off the cuff; I was in the middle of a sentence and thinking about something else. I think he is correct to say that the Commission will be advised on the level of tariffs and we shall be discussing these matters with the Commission and giving our advice. But I cannot answer off the cuff whether the advice will be accepted with or without unanimity.

Mr. Shore

I put the point to the hon. Gentleman for a reason that I know he will appreciate; namely, that this affects the influence which we may have within an enlarged Community and the actual power which would affect any decision it might make.

Mr. Noble

Yes, but we are joining a Community—we do not need to go into this matter in great detail because it has been pursued down a large number of different courses—theessential element of which is the GATT agreement. This is what we shall try to achieve.

I return to what I was saying. Just as we expect the enlarged Community to use its negotiating strength to preserve what has already been achieved as a responsible member of the world trading community we expect that our accession to the EEC will enable us to pursue individual trading interests more effectively.

The previous Government recognised this element in their White Paper in which they said … since the formation of the EEC, the United Kingdom's position in international trade negotiations has been weakened because a country's bargaining power depends largely on the size of its market, and ours is now relatively small compared with the Community and the United States. We might find ourselves in the position of seeing arrangements governing international trade negotiated in the main by others—in particular the EEC and the United States. On the other hand, as a member of the enlarged Community, we should share in the bargaining strength of the biggest trading bloc in the world and have an important voice in determining how that strength was used. I quote this passage, because it is appropriate to consider this aspect of our prospective membership at present in the light of the joint EEC-USA declaration to which we have subscribed calling for a new round of multilateral trade negotiations. In this declaration the United States and the Community undertake to initiate and actively support multilateral and comprehensive negotiations in the framework of the GATT with a view to the expansion and even greater liberalisation of world trade. If we were to remain outside the Community, who can pretend that our influence in these projected negotiations when set alongside that of the United States, the EEC and Japan could be as great as it will be when we are members.

The enlarged EEC will account for about 40 per cent. of world trade. This places tremendous responsibilities upon it and the vigour and humanity with which it exercises this power is of immense importance to the remainder of the world. We intend to do our best to see that the enlarged Community's trade policy is commensurate with these responsibilities. I believe it is asking a little too much for so many hon. Members to say that the EEC is not interested in anything except its own self-interest.

Mr. Fell

My right hon. Friend has asked the question, "Who can predict what will happen if we do not join the EEC?" Since the whole direction of Government over the last ten years has been concentrated almost solely on Britain moving into Europe, is this not a stupid prediction to try to make since there has been no thought of anything else?

Mr. Noble

I am not quite certain what my hon. Friend is expecting me to predict or not to predict, but if he is making the general point that crystal balls are as difficult to look into in Europe as well as outside, I would perhaps agree with him.

I shall attempt to answer one or two specific points which have been put to me. The right hon. Member for Battersea, North, asked whether there would be new duties in regard to Asia and the Caribbean. I suspect he knows the answer to that question as well as I do since I know that he follows these debates assiduously. The position of the Caribbean countries will depend on the form of negotiation they undertook—whether it be Yaonde or Arusha, it is for them to decide. The right hon. Gentleman also knows about the safeguards given in the White Paper in regard to the outlook for Asian countries. Therefore, he asked a question to which I am certain he knew the answer.

Secondly, he asked whether the Government had received any assurances from Canada, Australia, India and one or two others that they will not impose MFN rates of duty against us. The answer is that the Government have had no such assurances. I have spoken personally to Ministers in many of the countries mentioned by the right hon. Gentleman and I can say that they have no intention of making any assessment of what they will do until they see the final position.

Mr. Jay

Then the position is that we have had no such assurance from any of the countries that I mentioned.

Mr. Noble

That is so. None of those countries has guaranteed that it will not put up tariffs against us if it feels it right to do so in the circumstances prevailing at the time.

The right hon. Gentleman said that we are bound to have to accept more imports from the European Community than we can send it exports. That is his personal view. It is not one that is shared by me, and it certainly is not shared by industry.

Mr. Jay

In view of the fact that our labour costs will be forced up by the higher cost of living whereas the labour costs of the Six will not be, and as tariffs come down to zero, does not the right hon. Gentleman agree that it is inevitable that that will happen?

Mr. Noble

There are many assumptions, the inevitability of which I do not accept. I found it a little odd to be thought to be allied with a protectionist EEC against a free trading USA. I shall not go further into the point than that.

My hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) spoke very sensibly, though he was very quickly picked up on a fairly narrow point about the future of trading. My hon. Friend is basically right. Over the next period of years, tariffs can be important, and certainly high levels of tariffs can be very important for certain countries. But, by and large, the world is moving into a state where, for good or bad, the highly sophisticated manufacturing countries will be developing most of their exports in those types of goods, because the developing countries, rightly in many cases, are putting up very high protective duties against the ordinary commodities which Britain used to export in large quantities. The picture is changing, and I believe that we should take note of it.

The hon. Member for Walthamstow, West (Mr. Deakins) was trying from time to time to paint a broad canvas, coming back always to what he really meant, which was agriculture and not world trade. I did not agree with many of his comments, though they may have been true in the narrow sense of agricultural production. I have no doubt that the hon. Gentleman will wish to make these points more forcibly when we discuss the next Clause.

My hon. Friend the Member for Cheadle (Mr. Normanton) was greeted with a certain amount of laughter, some of it ill-conceived, when he said that it would be much easier to get rid of non-tariff barriers if we were in the EEC. That is certainly true. My hon. Friend may have over-stated it slightly by saying that the only way that we could get rid of them was from inside the EEC. But there is no doubt that if a country is negotiating with other countries for the removal of non-tariff barriers, the stronger its bargaining power the better.

I agree entirely with many hon. Members on both sides of the Committee who have said that non-tariff barriers in a large number of cases are even more important to world trade than tariffs. That is why the GATT is looking at them with great care at the moment. It is also why they were made a main feature of the consideration of the next world liberalisation talks beginning in 1973. They are extremely important. To that extent, we shall find it easier to negotiate for the removal of these non-tariff barriers from inside the EEC than outside it.

I think that I have covered the main questions that I was asked. I conclude my remarks by recommending the Committee not to accept this Amendment.

[SIR MYER GALPERNin the Chair]

6.15 p.m.

Mr. Shore

We are all pleased to have with us the Minister for Trade. We fully understand that the matters covered in our discussions on this Bill go well beyond the range of knowledge which it is reasonable to demand of the Chancellor of the Duchy and his devoted colleague—able, industrious and knowledgeable as they are. We are glad to have this infusion of expertise on a matter of very great importance, because what we are discussing is the customs union itself.

I am one of many who think that the European Community above all is a common agricultural policy which should be abolished and a common external tariff which should be demolished. Those are my two basic descriptions of the European Community. But whether my view of the Community is shared by others, and whether others believe that there are additional factors, no one will deny that the outward and visible sign of whatever it is that lies within the European Community so far has been the achievement of a customs union and a common external tariff around it, and it is our adjustment to the common external tariff and the impact of it on the rest of the world—above all, the developed world—that we should look at with great care.

With his inevitably somewhat narrow Amendment, the hon. Member for Wembley, South (Sir R. Russell) opened up the major debate that has ensued, and I make two comments about it.

If we were to adopt the proposals in the hon. Gentleman's Amendment in preference to the proposal negotiated and agreed in the Treaty of Accession that over a five-year period we should simply adopt the existing common external tariff of the EEC, the effects would be difficult to predict. It is true that overall there is a slightly higher tariff in this country at the moment than there is in the EEC. However, my hon. Friend the Member for Walthamstow, West (Mr. Deakins) pointed out that if we brought in food we should get a very different picture about the overall protectionism of the Community compared with the position in this country. There, the protectionism is extraordinary, and it is reflected not only in those commodities which come under the common agricultural policy and not the common external tariff, but in those food supplies which are subject to tariff under the common external tariff. In addition to that, the incidence of tariffs is very different as between different commodities and products in the Six as compared with the position here. For that reason alone the differences involved in adopting the method proposed by the hon. Member for Wembley, South would be quite important.

However, as I understood it the hon. Gentleman raised a more important point. He was trying to say that what was involved in the method that he proposed was far more consistent with the spirit of the GATT than the method adopted by the Government. The underlying philosophy of the GATT, after all, is that a signatory should accord to all nations the same kind of treatment in its trade relations; in other words, it should not go in for preferential arrangements. The effect of averaging out the common external tariff with the tariffs of the applicant countries would be to reduce the amount of discrimination which otherwise would be involved against those countries in terms of the new tariffs barriers that we should have to adopt.

I put aside the technical aspects, as other hon. Members have, because they are not really at the heart of the debate. The real concern is how we see the future and the trading relations between the developed countries of the world; whether we see the purposes of expansion of world trade served or not served by Britain joining with others in forming an enlarged customs union in the Continent of Europe.

The real problem which so many of us worry about with good cause, is that there is a danger of the world lapsing into regional blocks and regional trade protectionism. That is a serious concern which it is right we should have.

Do not let us forget that under the régime of GATT we have enjoyed since the war not only in this country, not only in Western Europe but throughout the developed world, and to some extent, although not adequately, in the developing world, the incredible boon of the advance of production and trade, and, in a large part of the developed world, continuing full employment or a high level of employment.

That has been the greatest single achievement of our generation in politics. It did not happen naturally. It was not the experience of people who were in Government positions or Members of Parliament before the last war or the First World War. Their experience was utterly different. They had experience of a world economy which was basically a protectionist economy, which did not expand sufficiently and which denied to so many countries and peoples the opportunities of work, prosperity and trade growth.

Let us not forget the immense benefits which we have all derived, whether we are outside or inside the Common Market, in the Continent of Europe or in other Continents, from the liberalising influence of GATT, and also the lubricating work on reserves and currency which the IMF has provided. The growth of the use of the dollar as a reserve currency has also played an immensely important rôle in these developments.

The formation of the EEC in 1958 and EFTA in the following year was bound to have some adverse effect on the broader world trade system because they inevitably discriminated, contrary to GATT, in trading matters in favour of their own member States.

Until recently the effects of this development were relatively slight. The achievement of free trade in EFTA and of the customs union in the EEC was gradual, and these moves were accompanied by continuing tariff reductions affecting the whole of the trading world. The Kennedy Round, which came fully into effect only last year, nearly halved the tariff barriers between the customs union and free trade areas in Europe, and the trading countries of North America, Australasia and elsewhere. The two processes were going on at the same time.

However, as we all know, serious problems have been developing, particularly during the last year. The United States' payments deficit has proved chronic, and excessive and unwanted dollar balances have built up in Europe and elsewhere. The United States, in its efforts to combat unemployment at home and to balance its transactions with the rest of the world, was forced last summer to take drastic measures to achieve a change in parities of leading currencies, and devalued the dollar, thus making American goods cheaper and more competitive.

We know what happened after that. Welcome as the Smithsonian agreement in December was, everyone knows that important matters affecting trade, investment, overseas defence expenditure, and the accumulation of dollar balances are in urgent need of settlement. Apart from Japan, whose policies I shall not touch upon today, the two principal groups of countries which should be involved in settling these serious international problems are EFTA and the EEC.

However, if entry by this country is achieved, EFTA will be substantially destroyed and the enlarged European Community, as the right hon. Gentleman the Minister for Trade and other hon. Members observed, will be the dominant trading group in the world. Therefore, the policies of the enlarged Community towards the other trading nations will be decisive in solving, or not solving, the economic problems of the world.

As I have said, the fear that many of us have is that the European Community is already pursuing dangerously unhelpful policies in world trade, and that the enlarged Community is, I regret to say, likely to make things worse. Hardly a day elapses, for those who really study the financial Press, without some new warning from the United States, OECD or GATT about the effects of existing Common Market policies in promoting protectionism not merely in its own trading area, but promoting and encouraging protectionism in the United States as well.

There are objective reasons why these fears should be respected and examined. The first is the obvious reason, which hon. Members have spoken about already, that the European Community in its quest for, and achievement of, substantial self-sufficiency in agriculture, dealt a serious blow to world trade in agricultural products. There should be no doubt about that. Not only does this affect the United States, but also the great food growing countries of the Commonwealth, New Zealand, Australia and Canada. They are bound to be more grievously affected in the years ahead when Britain, the one great market for their food, is denied them, as we act out our rôle as a second stomach for France and eat up the surpluses of their agriculture.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. Peter Mills)indicated dissent.

Mr. Shore

I do not know why the Parliamentary Secretary shakes his head. That is precisely what will happen. That is one of the reasons why the possibilities of getting rid of the more burdensome features of the CAP are remote, because the great surpluses which it has a natural tendency to generate and produce will at last find a stomach to absorb them. That is the consequence when Britain joins. The effect of this on Commonwealth countries is serious.

There is another factor. The Six has not been content, as we know, to establish a customs union among themselves. They have sought to bring within a new preferential trade system not only the African associated countries, about which perhaps we will have an opportunity to debate later, but all the countries that border the Mediterranean. If Britain and the other applicant EFTA countries join as well, there will be a vast trading bloc, a preferential trade system, covering not only Western Europe, but virtually the whole of Africa and the Mediterranean countries.

That poses a serious problem for those countries which lie outside, which face the reality of trade discrimination against their goods. That discrimination is not yet, if my judgment is correct, too severe, but it is nevertheless noticeable. The threat of this discrimination may increase in the years ahead.

The Minister was unable to answer an important question of mine to which I know he will want to find the answer. It is important because it is not good enough to say that it is sufficient to express one's viewpoint at the Council of Ministers and hope that all will be well.

If proposals come forward which have the effect of raising tariffs—protectionism in Western Europe—I should certainly like to be in a position to say yea or nay to any such proposal. It would not be good enough for it to be settled by a majority decision in which we were simply swept along.

More important than the serious problems that the formation of an enlarged Community will undoubtedly present is the underlying attitude and spirit which appears to motivate at least some of its members concerning the outside world.

I am fully aware that there are different attitudes, forces and viewpoints within the Communities—Ido not suggest that all of them take the restrictionist point of view—but nobody who has looked at these matters seriously can doubt that from the start of the present régime in France the EEC has been used as far as possible by the French Government as a means of countering and checking American and British interests and of unpicking, as far as they could, the settlements and arrangements that have been dominant in the post-war world. There is no evidence that the policies pursued by General de Gaulle himself have been pursued with any less energy by his successor President Pompidou.

This is an important matter which relates directly to what the Minister for Trade said about the EEC and the United States declaration concerning future negotiations for trade in the framework of GATT in the year ahead. One of the most important negotiations in the post-war period is on the agenda for 1973 when the new American Administration comes in.

What is the attitude of the Community to these negotiations? I will put certain points to the Committee on which I should like the Government to give me some assurances.

First, the pressure for an economic and monetary union in Europe, for which a quite extraordinary degree of diplomacy has been mobilised, particularly by France, is not aimed at any objective benefit and achievement within Western Europe; it is almost wholly external, because it is aimed against the United States. It is aimed against the dollar and at reducing the general influence which the United States may have. That is its purpose. Let no one be in any doubt about it. The Minister may disagree. If so, he must tell us his view. However, no one who has examined the matter will dispute that this is the major impulse behind the efforts by France to establish an economic and monetary union.

Secondly, there is a new thrust behind the development of these Mediterranean trading and other agreements. This has not been finished by any means. It was only in 1968 that a number of the Mediterranean trade agreements began. We know that if the EEC goes on spreading trade agreements country by country all over the Mediterranean—it is also reaching out into Latin America—then not only the United States, but the countries of the Commonwealth and other developed countries will be shut out from or placed at a disadvantage is not only the expanding European Economic Community, but the associated preferential trade system that is being built up.

Thirdly—I put this point seriously—I think we all remember the Prime Minister's winding up speech on 28th October when he finally commended to the House the proposition of entering the European Economic Communities. Virtually the whole of his argument consisted of his fear—the other way round from what I am expressing—that there would be a collapse of the world trading system into regional blocs and of his determination to get inside on in what I think was the mistaken belief that we would be safeguarded and protected there.

I do not believe that the solution to the problem of expanding world trade lies within any preference system. The solution has to be global. If there were a failure of the world economic trading and monetary system, we could no more protect ourselves against the forces of depression and unemployment which would spread than the United States in the 1930s could make itself safe within its large and enclosed market, as it largely was, from the general recession which then affected the world's economy. So the Prime Minister's attitude and approach is wholly wrong. It is also extremely worrying that that should be one of his main thoughts and should be used as one of the main justifications for recommending entry.

I have already mentioned, and the Minister for Trade has confirmed, the importance of this world trade negotiation that must take place in 1973. I should much prefer it to take place with Britain outside the Common Market. It would take place just as well if we were outside. The EFTA, the EEC, the United States and the other countries could negotiate just as well whether we were to participate as part of the Common Market team or not. Nevertheless, the important matter for the moment is the negotiation. I do not know whether the Minister has any information. However, he must have seen the report in The Times of 30th May, 1972, referring to the failure of the countries concerned even to agree an agenda. This is very important indeed. The failure to get together and agree even an agenda and a way of approaching the double problem of trade under GATT and monetary reform under the IMF failed, according to The Times editorial, because the western European countries, led by an implacable France and assisted by a vacillating Britain, were determined that nothing which the Americans wanted should be accepted. I am not saying this. I am quoting a newspaper reasonably favourable to the Common Market point of view—in its editorial about the state of these very negotiations which offer the possibility either of disaster in world trade in future or the much brighter prospect of getting rid of the remaining barriers to world trade that still exist.

I recommend my right hon. and hon. Friends to support the Amendment, not only for what it says but for the wider connotations which go with it.

Question put, That the Amendment be made: —

The Committee divided: Ayes 196, Noes 209.

Division No. 235.] AYES [6.38 p.m.
Allaun, Frank (Salford, E.) Harrison, Walter (Wakefield) O'Halloran, Michael
Allen, Scholefield Hart, Rt. Hn. Judith O'Malley, Brian
Ashley, Jack Healey, Rt. Hn. Denis Orbach, Maurice
Atkinson, Norman Heffer, Eric S. Orme, Stanley
Bagier, Gordon A. T. Horam, John Oswald, Thomas
Barnett, Guy (Greenwich) Houghton, Rt. Hn. Douglas Paisley, Rev. Ian
Barnett, Joel (Heywood and Royton) Hughes, Mark (Durham) Pannell, Rt. Hn. Charles
Benn, Rt. Hn. Anthony Wedgwood Hutchison, Michael Clark Parker, John (Dagenham)
Bidwell, Sydney Jay, Rt. Hon. Douglas Peart, Rt. Hn. Fred
Biffen, John Jeger, Mrs. Lena Pendry, Tom
Bishop, E. S. Jenkins, Hugh (Putney) Pentland, Norman
Blenkinsop, Arthur Jennings, J. C. (Burton) Powell, Rt. Hn. J. Enoch
Boardman, H. (Leigh) John, Brynmor Prentice, Rt. Hn. Reg.
Body, Richard Johnson, James (K'ston-on-Hull, W.) Prescott, John
Booth, Albert Johnson, Walter (Derby, S.) Price, J. T. (Westhoughton)
Bottomley, Rt. Hn. Arthur Jones, Barry (Flint, E.) Price, William (Rugby)
Brown, Hugh D. (G' gow, Provan) Jones, Dan (Burnley) Probert, Arthur
Brown, Ronald (Shoreditch & F'bury) Jones, Rt.Hn.Sir Elwyn (W.Ham,S.) Rankin, John
Buchan, Norman Jones, T. Alec (Rhondda, W.) Rees, Merlyn (Leeds, S.)
Campbell, I. (Dunbartonshire, W.) Judd, Frank Rhodes, Geoffrey
Carter, Ray (Birmingh'm, Northfield) Kaufman, Gerald Roberts, Rt.Hn.Goronwy (Caernarvon)
Clark, David (Colne Valley) Kinnock, Neil Robertson, John (Paisley)
Cocks, Michael (Bristol, S.) Lambie, David Roderick, Caerwyn E.(Br'c'n & R'dnor)
Cohen, Stanley Lamborn, Harry Roper, John
Coleman, Donald Lamond, James Ross, Rt. Hn. William (Kilmarnock)
Concannon, J. D. Latham, Arthur Rowlands, Edward
Crosland, Rt. Hn. Anthony Leadbitter, Ted Russell, Sir Ronald
Dalyell, Tam Lee, Rt. Hn. Frederick Sandelson, Neville
Davies, Denzil (Llanelly) Leonard, Dick Sheldon, Robert (Ashton-under-Lyne)
Davies, Ifor (Gower) Lestor, Miss Joan Shore, Rt. Hn. Peter (Stepney)
Davis, Clinton (Hackney, C.) Lewis, Arthur (W. Ham, N.) Short, Rt.Hn.Edward (N'C'tle-u-Tyne)
Davis, Terry (Bromsgrove) Lewis, Ron (Carlisle) Silkin, Hn. S. C. (Dulwich)
Deakins, Eric Lipton, Marcus Silverman, Julius
de Freitas, Rt. Hn. Sir Geoffrey Lomas, Kenneth Skinner, Dennis
Dell, Rt. Hn. Edmund Loughlin, Charles Smith, John (Lanarkshire, N.)
Dempsey, James Lyon, Alexander (Bradford, E.) Spearing, Nigel
Doig, Peter Lyons, Edward (Bradford, E.) Spriggs, Leslie
Dormand, J. D. McBride, Neil Stallard, A. W.
Douglas, Dick (Stirlingshire, E.) McElhone, Frank Stewart, Donald (Western Isles)
Duffy, A. E. P. Mackenzie, Gregor Stonehouse, Rt. Hn. John
Dunn, James A. Mackie, John Strang, Gavin
Dunnett, Jack McMillan, Tom (Glasgow, C.) Thomas, Jeffrey (Abertillery)
Eadie, Alex McNamara, J. Kevin Thomson, Rt. Hn. G. (Dundee, E.)
Edelman, Maurice Mahon, Simon (Bootle) Tinn, James
Ellis, Tom Marks, Kenneth Tomney, Frank
English, Michael Marquand, David Torney, Tom
Evans, Fred Marshall, Dr. Edmund Turton, Rt. Hn. Sir Robin
Ewing, Henry Marten, Neil Urwin, T. W.
Faulds, Andrew Mason, Rt. Hn. Roy Varley, Eric G.
Fell, Anthony Mayhew, Christopher Wainwright, Edwin
Fisher, Mrs. Doris (B'ham, Ladywood) Meacher, Michael Walden, Brian (B'ham, All Saints)
Fitch, Alan (Wigan) Mellish, Rt. Hn. Robert Walker, Harold (Doncaster)
Fletcher, Raymond (Ilkeston) Mendelson, John Walker-Smith, Rt. Hn. Sir Derek
Fletcher, Ted (Darlington) Millan, Bruce Weitzman, David
Foot, Michael Miller, Dr. M. S. Wellbeloved, James
Freeson, Reginald Milne, Edward Wells, William (Walsall, N.)
Gilbert, Dr. John Mitchell, R. C. (S'hapmton, Itchen) White, James (Glasgow, Pollok)
Ginsburg, David (Dewsbury) Moate, Roger Whitehead, Phillip
Golding, John Molyneaux, James Whitlock, William
Grant, George (Morpeth) Morgan, Elystan (Cardignashire) Wilson, Alexander (Hamilton)
Griffiths, Eddie (Brightside) Morris, Alfred (Wythenshawe) Wilson, William (Coventry, S.)
Griffiths, Will (Exchange) Morris, Charles R. (Openshaw) Woof, Robert
Hamilton, James (Bothwell) Morris, Rt. Hn. John (Aberavon)
Hamilton, William (Fife, W.) Mulley, Rt. Hn. Frederick TELLERS FOR THE AYES:
Hamling, William Murray, Ronald King Mr. Ernest Armstrong and
Hannan, William (G'gow, Maryhill) Oakes, Gordon Mr. Joseph Harper.
Hardy, Peter Ogden, Eric
Adley, Robert Baker, Kenneth (St. Marylebone) Boardman, Tom (Leicester, S.W.)
Alison, Michael (Barkston Ash) Balniel, Rt. Hn. Lord Boscawen, Robert
Allason, James (Hemel Hempstead) Beamish, Col. Sir Tufton Bossom, Sir Clive
Archer, Jeffrey (Louth) Benyon, W. Bowden, Andrew
Astor, John Berry, Hn. Anthony Bray, Ronald
Atkins, Humphrey Biggs-Davison, John Brinton, Sir Tatton
Awdry, Daniel Blaker, Peter Bruce-Gardyne, J.
Bryan, Sir Paul Hiley, Joseph Peel, John
Burden, F. A. Hill, James (Southampton, Test) Pounder, Rafton
Butler, Adam (Bosworth) Holland, Philip Price, David (Eastleigh)
Campbell, Rt.Hn.G. (Moray & Nairn) Holt, Miss Mary Prior, Rt. Hn. J. M. L.
Carlisle, Mark Hordern, Peter Proudfoot, Wilfred
Carr, Rt. Hn. Robert Hornsby-Smith, Rt.Hn.Dame Patricia Pym, Rt. Hn. Francis
Channon, Paul Howe, Hn. Sir Geoffrey (Reigate) Quennell, Miss J. M.
Chapman, Sydney Howell, Ralph (Norfolk, N.) Raison, Timothy
Chalaway, Rt. Hn. Christopher Iremonger, T. L. Ramsden, Rt. Hn. James
Churchill, W. S. Jenkin, Patrick (Woodford) Redmond, Robert
Clarke, Kenneth (Rushcliffe) Jessel, Toby Reed, Laurance (Bolton, E.)
Clegg, Walter Johnson Smith, G. (E. Grinstead) Rees, Peter (Dover)
Cockeram, Eric Johnston, Russell (Inverness) Renton, Rt. Hn. Sir David
Coombs, Derek Jopling, Michael Rhys Williams, Sir Brandon
Cooper, A. E. Kellett-Bowman, Mrs. Elaine Ridley, Hn. Nicholas
Cormack, Patrick Kershaw, Anthony Rippon, Rt. Hn. Geoffrey
Costain, A. P. Kimball, Marcus Roberts, Michael (Cardiff, N.)
Crowder, F. P. King, Evelyn (Dorset, S.) Roberts, Wyn (Conway)
d'Avigdor-Goldsmid, Maj.-Gen. James Kinsey, J. R. Rodgers, Sir John (Sevenoaks)
Dean, Paul Kirk, Peter Rossi, Hugh (Hornsey)
Deedes, Rt. Hn. W. F. Knight, Mrs. Jill Rost, Peter
Digby, Simon Wingfield Knox, David St. John-Stevas, Norman
Dodds-Parker, Douglas Lambton, Lord Sharples, Richard
Dykes, Hugh Lamont, Norman Shaw, Michael (Sc'b'gh & Whitby)
Eden, Sir John Legge-Bourke, Sir Harry Shelton, William (Clapham)
Elliot, Capt. Walter (Carshalton) Le Merchant, Spencer Simeons, Charles
Elliott, R. W. (N'c'tle-upon-Tyne,N.) Lloyd, Ian (P'tsm'th, Langstone) Sinclair, Sir George
Emery, Peter Longden, Sir Gilbert Skeet, T. H. H.
Eyre, Reginald Luce, R. N. Smith, Dudley (W'wick & L'mington)
Fenner, Mrs. Peggy MacArthur, Ian Soref, Harold
Fidler, Michael McGrindle, R. A. Speed, Keith
Finsberg, Geoffrey (Hampstead) McLaren, Martin Spence, John
Fisher, Nigel (Surbiton) Maclean, Sir Fitzroy Stanbrook, Ivor
Fletcher-Cooke, Charles Madel, David Steel, David
Fookes, Miss Janet Mather, Carol Stewart-Smith, Geoffrey (Belper)
Fortescue, Tim Maudling, Rt. Hn. Reginald Stodart, Anthony (Edinburgh, W.)
Foster, Sir John Mawby, Ray Stokes, John
Fowler, Norman Maxwell-Hyslop, R. J. Taylor, Sir Charles (Eastbourne)
Fox, Marcus Meyer, Sir Anthony Temple, John M.
Fry, Peter Mills, Peter (Torrington) Thatcher, Rt. Hn. Mrs. Margaret
Gardner, Edward Mills, Stratton (Belfast, N.) Thomas, John Stradling (Monmouth)
Glyn, Dr. Alan Miscampbell, Norman Thompson, Sir Richard (Croydon, S.)
Goodhew, Victor Mitchell, Lt.-Col.C. (Aberdeenshire,W) Thorpe, Rt. Hn. Jeremy
Gorst, John Mitchell, David (Basingstoke) Tilney, John
Gower, Raymond Money, Ernle Trafford, Dr. Anthony
Green, Alan Monks, Mrs. Connie Tugendhat, Christopher
Grieve, Percy Monro, Hector Waddington, David
Griffiths, Eldon (Bury St. Edmunds) Montgomery, Fergus Walker, Rt. Hn. Peter (Worcester)
Grimond, Rt. Hn. J. More, Jasper Wall, Patrick
Grylls, Michael Morgan, Geraint (Denbigh) Ward, Dame Irene
Gummer, J. Selwyn Morrison, Charles Warren, Kenneth
Hall, Miss Joan (Keighley) Mudd, David Weatherill, Bernard
Hall, John (Wycombe) Murton, Oscar Wells, John (Maidstone)
Hall-Davis, A. G. F. Nicholls, Sir Harmar White, Roger (Gravesend)
Hamilton, Michael (Salisbury) Noble, Rt. Hn. Michael Wilkinson, John
Hannam, John (Exeter) Normanton, Tom Winterton, Nicholas
Harrison, Brian (Maldon) Nott, John Woodhouse, Hn. Christopher
Harrison, Col. Sir Harwood (Eye) Onslow, Cranley Worsley, Marcus
Haselhurst, Alan Oppenheim, Mrs. Sally Wylie, Rt. Hn. N. R.
Hastings, Stephen Osborn, John Younger, Hn. George
Havers, Michael Owen, Idris (Stockport, N.)
Hayhoe, Barney Page, Rt. Hn. Graham (Crosby) TELLERS FOR THE NOES:
Hicks, Robert Pardoe, John Mr. Paul Hawkins and
Higgins, Terence L. Parkinson, Cecil Mr. Hamish Gray.

Question accordingly negatived.

Mrs. Judith Hart (Lanark)

I beg to move Amendment No. 447, in page 7, line 19, leave out from beginning to end of line 21 and insert: 'Sections 1 and 2 of the Import Duties Act 1958 shall remain in force and the said Act shall have effect with the addition of the following powers insofar as they are consistent with the provisions of the Import Duties (Developing Countries) Order 1971'. We come now to an area which has not been explored during our discussions, although we touched on it in the debate on the last Amendment. It is the general effect of British entry on the third world in general and on Commonwealth countries in the third world in particular. We have had a number of glib and facile generalisations without very much fact. Related to the Amendment and to the Clause is the whole background of provision in the Treaty and in the Bill, and I should like to put the Clause in its context, partly so that I may have some confirmation from the Minister that the somewhat elaborate network of provision in the Treaty and in the Bill is correctly understood.

Article 4 of the Treaty obliges us, in general terms, to acceed to all international agreements concluded by the Community and to take appropriate measures to adjust our own position to the rights and obligations arising from membership.

Protocol 23, which arises out of Article 4, allows us to defer until 1st January, 1974, the application of the Community's generalised preference scheme. Between now and then our own generalised preference scheme will continue, and presumably between now and then also there will be negotiations on the harmonisation of our generalised preference scheme with that of the Community.

Related to this is Protocol 22 which offers association to the independent Commonwealth countries in Africa and the Caribbean, but not to those in Asia. As to the Asian Commonwealth countries, there is the Community's joint declaration of intent which promises, in vague and unspecific phraseology, to examine the problems of the Asian Commonwealth countries with a view to seeking appropriate solutions". Then there is Article 24 which adds the British dependent territories and the Associated States in the Caribbean to the countries associated with the Community, and I wonder whether, in this connection, the Minister would be kind enough to tell the Committee—because we have not so far heard anything from the Government about this—under what circumstances, and within the context of which negotiations, we are agreeing that the Associated States in the Caribbean are to be treated like dependent territories. I ask that because, as a result of legislation which we passed in this House a few years ago, the Associated States in the Caribbean have entire responsibility for their own domestic affairs—which means, presumably, their own economic affairs—and the British Government remain responsible for their foreign and defence policy. The internal economies of the Associated States in the Caribbean will be profoundly affected, since they are being offered association with the Community, and we have had no indication of the extent to which they have been consulted, or the negotiations which they have had, and we should like to know the answer on these matters.

Then there is a whole series of Articles—Article 108 to 115—which relate to the generalised preference scheme. Except for the products covered until January, 1974, by our own generalised preference scheme, we must apply the EEC arrangements and rules to all imports from developing countries. After January, 1974,we must apply the Community's generalised preference scheme, or what ever modification of that has been agreed in the process of harmonisation between now and then, to those products now covered by our scheme. For other pro ducts we need not apply the Yaounde or Arusha arrangements until 31st January, 1975, by which time there will have been a renegotiation of those arrangements. Until then the EEC will apply its own rules to what the Treaty calls the Annex VI countries, those countries being offered association, and an Annex VI country which decides between now and 31st January, 1975, not to become associated will have normal third country rules applied to it by us as well as by the EEC.

The Clause and the subsection to which the Amendment relates enable the British Government to abandon the British generalised preference scheme which was made under the Import Duties Act 1958, together with the Finance Art 1971, the relevant sections of which are to be repealed by Schedule 3. The Amendment seeks to give the Government the opportunity to preserve the British generalised preference scheme in order to prevent entry into the Community from damaging the development prospects of the third world as a whole and of Asian countries in particular, and it is this to which I propose to devote some of my remarks.

A great deal of dutiful lip-service has been paid by the Government and by other people to the needs of the developing world. There is almost a statutory paragraph in any speech in favour of the Common Market paying lip-service to the third world. Indeed, the White Paper of a year ago—and this is, as it were, the philosophy which enables the Government to pay lip-service to the third world while proclaiming the virtues of entry to the Community—said: To provide new markets and aid for the less prosperous countries on a scale anything like adequate to their needs, Europe must be united, strong and wealthy. That is the philosophy. That is a familiar Conservative argument, the one that runs, "Make me a millionaire and I shall have more to give to the poor,". The White Paper went on to say: We in the United Kingdom think particularly of the countries of the Commonwealth. Which Commonwealth? Do the Government mean the sugar-producing countries? I shall not discuss them today. They are a separate subject for discussion. Is it that part of the Commonwealth with which the White Paper was concerned? Is it the great mass of the world's poor with which it was concerned? It is time, and the Amendment affords the opportunity, to examine the evidence and to look at the whole ethos and structure of the Community as it affects the third world.

It is true that some of the details of the rules of the EEC may be capable of negotiation. They may be capable of change from within. Indeed, this is a familiar argument from those who recognise that damage is likely to be done to the third world by entry. To protect themselves against the accusation that that will happen they say that if Britain is in the Community she can seek to change some of these matters. But the fundamentals of the Community's arrangements are not likely to be susceptible to change, negotiation or persuasion. These arrangements are concerned with trade, with aid and with people.

Let us look first at the figures of the people concerned here. One figure was quoted earlier. Affected by the Bill, either because they are included in some way by association, or because they are excluded from benefits which hitherto they have enjoyed, axe the following groups of people: the Francophone countries of Africa, amounting to 73 million people; the Commonwealth countries in Africa, amounting to 116 million people; the Commonwealth countries in the Caribbean, amounting to about 3 million people; and the Commonwealth countries in Asia, which account for up to 670 million people. Included in the various arrangements—or potentially included—are fewer than 200 million people. Excluded altogether are 670 million people, and they are the poorest of the world's population.

7.0 p.m.

This means that two out of three people in the third world—if one takes other figures into account—will be disadvantaged because they will derive, as I shall hope to show, loss and not benefit from the Clause. The loss occurs because their countries will be able to sell less of many of their products to Britain, and are already either precluded from or limited in what they may sell to Europe. The loss occurs also because some part of British aid must now be devoted to the European Fund Development which distributes its aid programme, as I shall try to show, with a greater emphasis towards Africa, particularly Francophone Africa, than towards Asia.

Coming to trade, we maintain—I hope to prove this—that they will be able to sell less because the EEC generalised preference scheme is meaner than the British scheme. For one thing, it applies not only tariffs but quotas, despite the fact that the United Nations' development strategy, the Pearson Report and every authoritative body of opinion on the question of assisting the trade of the developing world, has counselled against quotas.

The EEC scheme is based on quotas as well as tariffs. It is also meaner because it is more limited, especially in relation to semi-processed agricultural products, which are some of the most important things that the developing countries are trying to sell. Some claims were made in the White Paper of a year ago about the fact that the Community had been the first to introduce ageneralised preference scheme. But it introduced it just a year ago, last July, whereas our scheme was introduced in January. But, interestingly enough—I am sure that the right hon. Gentleman will forgive me quoting again from what he said in Committee on the Finance Bill—the House will want to know that this was a month or so before the Government's White Paper proclaimed the virtues of the earliness, the rapidity, with which the Community had introduced its generalised preference scheme. In that Committee, the right hon. Gentleman was saying that he preferred our preference scheme. He said: It is more liberal and more useful and, in view of the safeguards we have, it is much more valuable to the countries concerned."—[OFFICIAL REPORT, Standing Committee H, 24th May, 1971; c. 34.] So we have it from the right hon. Gentleman. I am certain that the experience of the first year of the Community's Scheme will not have persuaded him to change his mind. If we look at that experience, we have to be clear that what happens to the ability to sell goods to Europe is the essential deterrent of a developing country's ability to acquire resources and foreign exchange for its further development. This is entirely the essence of its foundation for future development.

In principle, all imports from third countries are subject to the common external tariff and the common agricultural policy. What occurs is that at present the EEC has special arrangements for the Associates, such as freedom from Customs duties. For the French overseas departments and dependencies, in some cases products are regarded as though they were produced inside the EEC; for the Department d'Outre Mer wholly so, and the Territoires d'Outre Mer are not exempt from CAP levies. In some cases the EEC arrangements involve reverse preferences, which have been strongly condemned in most quarters, most recently by the Secretary-General of the Commonwealth Secretariat, Arnold Smith.

One of the factors involving primary products is that the EEC is more self-sufficient than we are in a number of products, including wheat, feed grains, sugar, oils and fats, and fresh fruit, including bananas. Most of these come from Commonwealth sources, mostly potential Associates. But what will happen under Yaoundé to those countries which become Associates, or under Arusha? We do not know the answer.

It is blithely said, "Those countries in Africa and the Caribbean are all right because they are being offered associate membership." But we do not know what will happen under the renegotiations of Yaoundé and under the negotiations to admit them to Yaoundé or Arusha. What is often overlooked is the nature of the Yaoundé Convention itself. I quote Article 60: Any request for association with the Community made by a State whose economic structure and production are comparable with those of the Associated States, and which, after examination by the Community, has been referred by the latter to the Association Council, shall be the subject of consultations within the Association Council. The position about what happens on the arrangements for association is not a decision that is made solely by the Six. It is a decision in which the existing French Associates also take part. What is quite clear, again from Article 60, is that such accession, that is to say, the accession of a new Associate, shall not adversely affect the advantages accruing to the Associated States signatories to this Convention from the provisions relating to financial and technical co-operation. It has been made very clear—it was made clear by President Pompidou about a year ago—that the present Associates must be protected from competition from new Associates. There are loopholes. There is some uncertainty even about the position of the Commonwealth countries in Africa and the Caribbean.

As for countries which are not offered association in respect of primary products, the outstanding ones are India, Pakistan, Sri Lanka and Malaysia. I believe it to be true—perhaps the Minister will confirm this—that in the first six months of the Community generalised preference scheme, India used up her quotas, so that for the remaining half-year there were no quotas left under the preference scheme for products to come into Europe from India. This means that some of the problems—jute, coir, and vegetable oils—are profound. In the case of Sri Lanka, it means that not only do quotas get used up quickly but there are particularly important products which are not even covered by the EEC Scheme. For example, coconuts from Sri Lanka are not included, yet in 1969 coconuts represented 16 per cent, of Sri Lanka's exports. They are shut out totally from the generalised preference scheme of the Community—not shut out from ours, but to be shut out from ours as we harmonise with that of the EEC.

Turning to processed agricultural products, our scheme is based on zero tariffs. The EEC Scheme, in addition to quotas, is based on relatively small cuts in the full tariff rate. It leaves a substantial degree of protection, up to 34 per cent., for processing industries within the EEC and within countries that are Associates of the Community, which is a lot of protection. When people say," But the generalised preference scheme of the Community admits processed agricultural products", they do not point out that there is still this high degree of protection compared with that of our scheme. Again, it is Asia which suffers.

The Government's argument, for which hon. Members opposite indicated support a short while ago when I quoted from the White Paper, is that if we in Britain become wealthier and more prosperous, this will help the Third World. But on primary products and semi-processed agricultural products, the market is very inelastic. When one becomes a richer country, one does not necessarily eat more coconut products. When one is a richer country, one probably reduces one's consumption of oils and fats.

Mr. Grylls

Is it not also true that one imports more raw materials from developing countries, and that this is exactly what will happen?

Mrs. Hart

Not always, no. Many primary products are foodstuffs and agricultural products which are eaten or not eaten, as the case may be. The consumption of these does not increase as the standard of living increases. It is well established that one of the reasons why the prices of primary products from the developing countries have not risen over the last 10 or 15 years—many of them have fallen—is precisely that these are products for which demand is inelastic. Therefore, the Government's assumption, which we do not accept, that our entering Europe would mean greater prosperity, does not have any bearing on this aspect of third world trade. Eighty per cent. of the trade of non-associate countries—this is the answer to the question asked by the hon. Member for Chertsey (Mr. Grylls)—is in these items.

Manufactures are becoming increasingly important from the developing country point of view, because a Third World country which is just beginning to get off the ground, hopes to be able for the first time to sell some of its manu- factures to the rich world. To the extent that developing countries are limited, hindered, shut out from being able to do so, it is a tremendous block to their hopes of further rapid development.

It is not just the volume of imports which matters. It is their unit value. It is the potential for growth of imports. This is a field where demand is elastic. It is a field which matters more because this is so.

I will give one set of figures from the OECD Statistics of Foreign Trade for 1969. Taking manufactured goods, which includes textiles, and manufactured articles of all kind, machinery and transport equipment—these figures are expressed, as are most of the OECD ones, in millions of dollars—in 1969 we imported from the Commonwealth developing countries goods to the value of 888.7 million dollars. The Community imported from Commonwealth developing countries 792.8 million dollars worth. The EEC imported from the Yaoundé developing countries 565.1 million dollars worth. We imported from the Yaoundé developing countries 55.6 million dollars worth.

How will this square as we harmonise our generalised preference scheme and as we have to give special preference to the Yaoundé associates? It is clear that, particularly as most of our imports of manufactures came from Asia rather than from Africa and were more than the whole of the imports of the EEC from the Commonwealth, now that we must put up the CET barriers there will be very serious consequences indeed for the export of manufactures from the Asian countries of the Commonwealth to us. Therefore, they will suffer.

Mr. Normanton

Has the right hon. Lady taken into account the question of the decision to impose, or reintroduce, what might be termed barriers in the path of trade with our established contacts in the Far East as from 1st January? I refer to the fact that textiles from Asiatic sources are now open to a tariff which, incidentally, is higher than at the preferential rate that applies in the EEC. Has the right hon. Lady noted also the way in which the volume of flow of textiles from all sources is increasing inexorably into the existing EEC?

Mrs. Hart

When the hon. Gentleman studies the figures I have given he will see part of the answer to his question. He is wrong in saying that there is an increasing flow of textiles from the developing countries into the Community. This is not so. The quota system prevents it. India has already used up its quota on all its goods halfway through the year.

There has not been much intensive research work so far in this field. It is all new. The hon. Gentleman should study the figure I am about to give him, because this results, not from generalised wishful thinking, but from hard intensive work in depth.

7.15 p.m.

There has been a very interesting study conducted at the University of Yale by Richard Cooper of the Economic Growth Centre there. I will not bore the Committee with all the details, but Mr. Cooper works out in some detail what would have been the effect on Commonwealth developing countries if their exports during 1970—the latest date which could be taken—had been subject to the Community generalised preference quota scheme which the Clause will enable Britain to adopt. Mr. Cooper says that 83 per cent, of their exports to Britain would have hit the tariff-quota ceiling. That is extraordinary.

Mr. Cooper says this: At the crucial margin, Commonwealth products would be subject to duties that exceed those now prevailing in Britain, and for those products adoption of the Community scheme by Britain would actually discourage exportation and investment, the direct opposite of what is ostensibly intended. The stimulus to development will be negligible. … The scheme"— this is the EEC scheme— is most generous for those products in which the developing countries are least competitive, and the most generous quotas of all are for those products, such as jet aircraft and advanced computers, which the developing countries have little hope of exporting for many years, duties or not. Do the Government claim that India, Pakistan, Ceylon and Malaysia, are looking outward to Britain's seeking to assist them when it replaces a more generous generalised preference scheme by one which is generous to India and Pakistan in relation to jet aircraft and advanced computers?

I come to my last essential point. It may be argued that, despite all this, aid can compensate. Therefore, we must to some extent look at the two things together. Of course the Community's record on aid is a good one. So goes the argument. So, finally, let us look at the relationship between trade and aid as regards the Commonwealth countries, especially the Asian Commonwealth countries.

The record of bilateral aid—that is, not the aid of the European Development Fund—of France, Germany, Netherlands and Belgium is good. It is better than ours. Bilateral aid is independent of whatever happens in the European Economic Community. Our aid record will continue to be what we make it. What the EEC does is to bring in a new dimension to multilateral aid because, in addition to contributions to IDA, the World Bank and the United Nations, we shall now have to pay a compulsory contribution to the European Development Fund. What we do not quite know yet—perhaps the Minister will be able to take the opportunity to tell us a little more tonight—is just what the British contribution is likely to be. We have had an indication but not a very clear statement.

The amount of our contribution to the European Development Fund will lessen the amounts that we can freely spend where we want to. This would be so even in an enlarging British aid budget. To the extent that part of it is constrained for particular purposes on which we are not making the decisions, the freedom that we have to choose where we help and what we do will be limited.

It is argued that inside the Community we can press for more help to be given to Commonwealth countries, particularly those in Asia, perhaps to balance their losses on trade. Of course this is true. I do not think that the Committee has appreciated just how effective and extensive that pressure would have to be if there were to be a change in the habits of the European Development Fund sufficient to give any degree of extra help to India and Pakistan.

In the period between 1968 and 1970, according to figures from the Development Assistance Committee of OECD, aid from the European Development Fund reached a total of 184 million dollars. It was distributed as follows: the French Franc area countries received 108.4 million dollars, most of which went to the countries south of the Sahara, and 7 million dollars of which went to the French overseas territories and departments; 5.5 million dollars went to India and Pakistan; 0.6 million dollars went to other Commonwealth countries and the remainder—about 68 million dollars—went to other developing countries. Hon. Members should note that India and Pakistan, countries which will suffer so desperately from the trading arrangements we are about to undertake, and which have populations totalling 650 million of the poorest people receive 5.5 million dollars. The conclusion we must reach is that Community aid does not attempt to make any amends for the trading handicaps which it imposes on Asian Commonwealth countries.

Never has our aid been more badly needed than now. A week or so ago the Senate in Washington decided that it did not want to support any further aid to India and Pakistan. The decision is not confirmed but this is the way in which America is moving. Never has aid to India and Pakistan been more necessary, but our ability to help will be circumscribed to a certain extent by our EDF contribution.

It seems, therefore, in considering the Amendment, that we must conclude that British entry into the Community will have the consequence of seriously damaging both trade and aid with Commonwealth countries, countries which most need assistance. The Government's words of good intention and benevolence on this subject, which have not until now had the opportunity of full exploration and discussion, are no more than hypocrisy and deception.

The Clause ensures that one result of our entry will be disadvantage to the third world. The only protection we can offer is the Amendment which seeks to give us the power to retain our trading arrangements with the Third World and to protect the Asian commonwealth in particular from what we regard as the ravages of the Bill.

Mr. J. Selwyn Gummer (Lewisham, West)

I am sure the Committee has listened with great care and interest to the right hon. Member for Lanark (Mrs. Hart). On both sides of the Committee there are large numbers of hon. Members for whom the interest and concern in the Third World has been a primary one, and we all have a great deal in common in discussing the matter. Therefore, when we come to discuss it we are conscious that it is an issue which divides people who recognise and respect each other's attitudes to the developing countries. It is noticeable, for example, that those who have spoken on behalf of the developing countries are themselves very divided in their attitudes to our entry into the EEC. There are many who would put forward a case on behalf of the developing countries which was as strong and clear in favour of entry as that which the right hon. Lady has put forward in opposing entry.

Mr. Deakins

Never heard it.

Mr. Gummer

I hope that hon. Members who have not heard it will perhaps hear it now. A most effective case for entry is put forward in many propositions by those who work in connection with aid and who are concerned that it should increase to the developing countries.

I make no apology for having been one of those who was most highly critical not only of the very bad aid record of the previous Government but of the not much better record of the present Government. I therefore have an advantage through the general catholicity of my argument in discussing aid records. I was concerned that in her speech the right hon. Lady regularly managed to jump her time sequences. She was concerned always to forget the developing nature of the EEC and the way in which the Community's attitude to aid and trade has changed. It would be as well to begin any discussion on aid and trade and our entry into the EEC by considering what kind of Community the EEC is and in which ways its attitudes have changed.

She was on to a very poor point in suggesting that, because in the past most EEC aid went to countries with which it was associated, and because most of our aid went to countries with which we were associated, if Britain enters the EEC all the aid will go to countries with which the EEC is at present associated, and none will go to our former associates. Her time sequence is wrong. It is natural that the aid which the EEC gives at present goes largely to those countries with which it has been associated historically, and with which it has special arrangements. But we should consider that aid. In other words, are we joining a Community whose record on aid is worse than ours, better than ours, or is it getting better or worse?

Every country of the EEC has reached the UNCTAD target faster than Britain. We must consider whether the Community's record has been worse this year than last, or better last year than the year before. It is clear that every year the EEC has shown itself more concerned to improve its aid to the developing countries than this country has. I suggest that we consider the movement of aid during the period of the Labour Government and compare it with the development of aid in the EEC. The previous Government had a worse aid record one year than in the previous year. It was practically at a standstill in spite of a lot of mouthing by the Labour Government. At the same time the EEC significantly improved its performance every year and the question we now face is whether that trend is expected to continue.

The Common Market has shown itself capable of significantly changing the attitude of its members towards aid. Before the Community was established, and in some of its early years a number of the members had poor aid policies and did not do all they should have done in this direction. Now, both individually and jointly through the Community financing, they are improving year by year and are producing a generally better record on aid than this country.

A very sad attitude has appeared in many of our debates on a number of different issues and it came up again in the right hon. Lady's speech. There are many things in this country of which we should be supremely proud but not everything here is automatically better than what is found in neighbouring countries. It is odd that we should hear so often the bland assumption that what we do is automatically better than what other people do. On aid, it is true that we do less well than our neighbours in terms of amounts, but the right hon. Lady says that we spend it better.

7.30 p.m.

Mr. Frank Judd (Portsmouth, West)

Surely, when we examine the issue of aid and aid flows we see that what has been clearly established in this and the preceding debate is that it is fairly meaningless just to talk about generalised figures? We must address ourselves to the quality and type of aid, and it would be very helpful if the hon. Gentleman would begin to analyse in a bit more detail the types of aid which have been forthcoming from the Community and compare them with the types of aid and commitments in aid policy of this country.

Mr. Gummer

I said that the right hon. Lady had argued that even though the case does not stand on the amounts of aid it stands on the quality of aid, that we use our aid in a better way than the countries of the Common Market. The first criticism is that their aid goes very largely to countries with small populations in Africa. It is possible to believe that that will continue for ever. Indeed, if Britain did not join the Common Market it might well do so, because the reason why the aid goes to those countries is that they are the countries not only associated with the Common Market but historically tied to the members of the Common Market. It is no secret that those of us who support the concept of Commonwealth often do so because we believe our historic ties are of importance to remind our people of the duties and obligations we owe to the developing nations—[Interruption.] It is all very well for Labour right hon. and hon. Members to laugh at my comment on supporting the concept of Commonwealth, but it is odd that they who wish to make Britain poorer rather than richer think they are aiding the Commonwealth by so doing. It is time the gentle grins of the right hon. Member for Stepney (Mr. Shore) were removed, at least when people are trying to discuss seriously a matter which they care about as seriously as he does. Even if the right hon. Gentleman thinks that aid to developing countries is a matter to laugh at, many of us on this side do not.

We can only ensure that the developing countries receive aid of a quality as well as a quantity which more nearly meets their needs if Britain brings to the Common Market the dimensions which her Commonwealth has brought to Britain. The concept that we should stay outside the European Economic Community and then, laughing on the sidelines, complain that it aids the countries with which it is associated, is very odd, so odd that it is not surprising that the previous Government never made that point when discussing all the issues they would raise when they were negotiating on the matter.

But we must also face the fact that aid by itself is by no means the most important matter. The most important matter is neither the quality nor the quantity of aid but the openings to markets which any organisation, community or country gives. However much aid we give, however many new factories we help to build, however much more water we may pipe or electricity we may provide, ultimately someone must buy the products of the countries concerned. Therefore, I thought the right hon. Lady was on to the most important part of her argument when she discussed the whole nature of preference, generalised preference and the reciprocal preference arrangements not only of the European Economic Community but of ourselves.

Mr. Marten

I have been trying to catch my hon. Friend's eye for several paragraphs. Before he leaves the question of aid and moves on to trade, may I say that we probably share somewhat similar views on some of these matters. My hon. Friend showed how the Common Market contribution to aid had increased. That was looking backwards. It was rather like the growth rate argument, that because the growth rate has been good in the past it will automatically be good in the future.

Is my hon. Friend aware that this country has agreed to increase its aid to the developing countries by 7 per cent, a year for the next five years, and after that by 9 per cent? That is a very clear undertaking. What is the Common Market's undertaking in that regard?

Mr. Gummer

I agree that one is susspicious about dealing only with the past not the future. But if my hon. Friend took out a life insurance policy one of the first things he would do would be to see how the life office had dealt with its policy holders before. He would then ask himself, "How far is it likely to go on paying out a bonus on the same sort of basis as it has in the past?" The European Economic Community has not only done better every year than it said it would but intends to increase its development aid at the same rate as it has up to now, which would be better than our development aid. The only point my hon. Friend has is that we have made a public statement that that is what we shall do, and the EEC has not yet done so. But if I were concerned with aid in a developing country I would prefer to rely on something similar to an actuarially sound business than merely upon the promises of a British Government. The previous Government made many undertakings and promises and the present Government are making a number of undertakings over 15 years. There are occasions when the British people are silly enough not to elect a Conservative Government, and then aid to the developing countries always drops with a thump and words about the developing countries increase by the bushel-load. The great achievement of the EEC is that under both Socialist and semi-Conservative Governments they have managed to deliver what they said they would, and I prefer to depend on that.

Mr. James Johnson (Kingston upon Hull, West)

All this is very interesting, but let us get away from what certain people in the United Kingdom did. We are talking about the EEC, which obviously includes the French and the Italians and their attitude and behaviour in the matter of aid to overseas dependent territories. Will the hon. Gentleman comment on the question of tied aid? What will a black man in Dacca feel about the way in which the export of his country's goods—nuts, or any other commodity—is tied to business and finance houses in Bordeaux and Marseilles? Let us hear a little more about the detail rather than airy-fairy stuff comparing past Administrations in London.

Mr. Gummer

It is not airy-fairy to compare facts. But let me take the hon. Gentleman's specific case. Many people in black African territories formerly administered by this country are not at all happy about the arrangements made through very similar houses worked from this country. But do we believe that by remaining outside the EEC we shall have more or less influence on the arrangements for aid in this area? Do we think that the relationship between France and her developing countries will have any effect on the relationship between us and our Commonwealth? Do we think that suddenly we shall have finance companies of that sort, changing the nature of our finance companies and our arrangements? I believe not, although the hon. Gentleman has a good point, which we should take up and press with the French Government. However, I do not believe it is a matter which can be altered by what we do in the Bill.

The point the right hon. Lady raised, the question of trade, is something which we can affect. That is the very serious argument. She rightly said that we were a country with a fairly generous trading history. I say "fairly" because in the manufacturing areas we have been less generous than we should have been, and perhaps we should have a bit of mea culpa about that. But certainly in primary products we have had a very generous trading history compared with the countries of the EEC. There is no doubt of that.

Again, however, we should look at the direction in which the Six have moved. What surprised me about the speech of the right hon. Lady was the scorn she poured upon the new arrangements which have been made for generalised preference. She did not say what they replaced. Listening to her, one would have thought that quotas had been placed by the EEC in order to reduce the amount of stuff coming into the EEC. She almost said so in answer to an interruption from my hon. Friend the Member for Cheedle (Mr. Normanton).

The remarkable fact about these generalised preference treaty arrangements is that by them the Six have made a giant step forward compared with what they were doing before. Of course, hon. Members opposite may say that they should have been doing a lot better. But the issue is that the EEC began as an association of countries with, on the whole, bad trading records with the developing countries, but has moved into a direction in which it is now next only to the United Kingdom in making the most generous trading arrangements in the world. That is a remarkable change of direction and a most important one for the future.

We therefore have to ask ourselves whether we are more likely to see that change of direction continued, the whole movement, so satisfactorily begun, developing, with the doors of the EEC being opened even more widely to the Asian members of our Commonwealth, if we are inside the Common Market, or whether, with us standing outside the Community, which is, even without us, one of the most important trading units in the world, it is more likely to trade with the developing countries, of Asia in particular. It is at this point that the right hon. Lady's argument falls down. She suggests that if we join the EEC on these terms, we will gain all the bad habits of our neighbours and that they will gain none of our good habits, that somehow or other we will fail to increase our aid to their level but will reduce our trading preference to their level. She is suggesting that we will have no influence on their policies towards trade and that they will have no influence on us in aid policy. The opposite is true.

Our duty is to see how far within the Community this enormous association will be able to continue along the road it has started upon and how much pressure we can bring to bear on it. If the Community had shown over the years reduction in aid and in opportunities offered for trade, I would be with the right hon. Lady on this point—and not just on this point but on the whole question of our entry.

I happen to believe that a crucial issue for the Western World as a whole is the nature of our relationships with the developing countries. I believe that it is the biggest single issue any of us can face. But if one believes that, one must say that aid and trade depend upon wealth. One cannot go on believing that there is a mystical method of aiding these countries without making any money. It is impossible to go on like that. The last Government proved it. They did not want to cut aid and not do what they promised. They were not dishonest about it. They simply could not do it because they had not the money to do so. That is the basic issue. During their six years of office, the Labour Government could not aid effectively and fulfil the promises they had made to the nation. Some promises they did not fulfil because they did not want to, but this promise they could not fulfil.

The right hon. Member for East Ham, North (Mr. Prentice) resigned from the Labour Government because they failed to fulfil their promise of increased aid. Their failure was not due to lack of intention or of lack of words. It was due to lack of money. When discussing this issue, we must look at the basic question of whether we are more likely to be able to aid and to be able to allow into our countries the kind of manufactured goods produced in the developing nations if we are inside or outside the Community. There is a cost to this nation of allowing manufactured goods in free. My hon. Friend, the Member for Cheadle knows it well, coming from an area where textiles are so important, because the policy is costly to our own textile industry, as it is to a whole range of other industries.


7.45 p.m.

If that is so, how best can we bear the cost? It is for this reason that I believe that the real issue is how Britain can put herself into a position satisfactory enough to enable her to aid developing countries, not on the mean level we have managed so far, nor even on the better level managed by the EEC, but on a still higher level. Asking that question, I have to come down on the side of so many people most concerned with aid to developing countries in saying that, if Britain is to do what she should do throughout the Commonwealth and other developing nations, she must put herself into a position which will enable her to grow more wealthy every year. I cannot believe that, standing outside the Community, we will be able to do anything more than what the last Government managed to do. I think that we will find it more and more difficult to aid, and that the pressures upon us by those in our nation who wish to protect their own industries against the industries of the developing countries will become almost impossible to resist.

It is for this reason, therefore, that I believe we ought to deny the Amendment. We know that the Amendment would destroy the basis we have negotiated with the Community. It avoids the main issue, which is that the EEC is every year more generous in aid and trade, although not as generous as we should like it to be with trade but more generous than we are with aid. On the other hand, Britain is more generous with trade but less generous and every year less able to be generous in either area. The right hon. Lady's view is that if we join the EEC everything will get worse and we will sink to the lowest common denominator. I take the view, shared by so many of us, that within the EEC we will see, as we have seen already in the Six, standards rising to the highest and not dropping to the lowest. Standards have risen every year within the Community, and we believe that within the Community we will be able to do for the developing countries and their peoples not just the little we have been able to do but a great deal more and thus really fulfil our biggest duty.

Mr. Judd

I am sure that I was not alone in finding the logic of the case of the hon. Member for Lewisham, West (Mr. Selwyn Gummer) rather difficult to follow. For example, he suggested that one Minister at least in the last Government resigned over the issue of the size of the aid programme they were operating. It is hardly feasible that he would have resigned if he had been convinced, as the hon. Gentleman seems to be convinced, that the last Government could not have had a better aid programme. Presumably he resigned because he felt that the Government would not have a larger aid programme although they could have done.

That is a view with which many of us on this side of the Committee would agree. I would not dissent from the view that the performance of the last Government's aid programme left a lot to be desired. The hon. Gentleman also went on, extending his argument, to suggest that the problems inhibiting the last Government were the economic difficulties with which they were confronted. I would put this question to the hon. Gentleman. How will we be in a strong position to do more on the aid front, even in a traditional way, when we have paid the price of entry laid upon us in the present proposals, when we have finished financing this highly expensive common agricultural policy of the Community? I ask the hon. Gentleman to examine the logic of his own position in that context.

All of us are deeply grateful to my right hon. Friend the Member for Lanark (Mrs. Hart) for the brilliant and succinct way she analysed so clearly the aid relationships and the flows from industrialised countries in the Community and from ourselves to the developing world. When we are examining aid programmes we have to ask ourselves what are the most important issues in the developing world, what are the greatest problems confronting the developing countries? Certainly if I was asked to pick the overwhelmingly most important issue which in the end will not only affect the developing countries politically but will also affect us politically, I would say that it is the employment crisis in those countries, the fact that in the developing world as a whole there are unemployment rates in urban areas exceeding 30 per cent., the fact that already people have been born which means that in the next 10 years the population of working age in the developing countries will increase by 225 million.

The argument with which we would all agree, whatever our position on the question of entry, and which we should be putting to people in Europe and the industrialised countries as a whole, is that this is a social and political crisis which we ignore at our peril because if anyone puts a match to this potentially explosive situation we in Britain particularly will not escape unscathed. What we have to ask ourselves is how far the form of aid relationships, the form of economic relationships between the Community and ourselves and the developing countries are designed to tackle effectively this employment crisis which, as my right hon. Friend so correctly emphasised, is predominantly present within Asia with which we traditionally have important links?

If we are to tackle this problem it is clear, and the hon. Gentleman referred to this, that trade will in the long run be infinitely more important than aid. We can find all sorts of authorities to back us in this. For example, the Pearson Commission came to the conclusion that the growth rates of individual developing countries since 1950 correlate better with their export performance than with any other single economic factor. Robert McNamara in his address to the World Bank last October said: The fact remains that the major portion of the increase in foreign exchange needed by the developing countries will have to come from increased export earnings. It seems a little strange that there has been so little reference in this debate or the one preceding it to the fact that in recent weeks and months we have seen the confrontation between the industrialised countries and the developing world at Santiago in UNCTAD. The developing countries in UNCTAD did not mince their words.

Look at what they had to say before they came to Santiago, in their preparatory conferences for that confrontation, when they spelled out in simple language the fact that they saw a trading bloc of the wealthy such as the EEC as a direct hindrance to their members to expand trade and to their own economic activities, drawing more people into employment. It will be seen that at Santiago they were spelling out the importance of multi-lateral aid relationships, and we know when we analyse the EEC programmein detail that it is not outstanding in this respect. They were also emphasising the importance of untied aid relationships, all in the cause of genuine economic development which would provide the employment opportunities that are so desperately important.

The hon. Gentleman referred to associate status and I should like to examine that point. I sometimes think that the almost final, moral accolade claimed by those who favour entry is the argument that some Commonwealth countries have been seeking associate status even before they were compelled to, even before we were in the Community, and this therefore proves that the Community must, from their standpoint, be a good thing. It proves nothing of the sort. All it proves is that they had no alternative but to form some sort of relationship with the Community.

When we talk off the record to political leaders and those with economic responsibility in developing countries already in relationship with the Community, let alone future relationships, then, as my hon. Friend the Member for Kingston upon Hull, West (Mr. James Johnson) said, they show that they have few illusions about this relationship. They see themselves tied as client States to a sophisticated market producing primary products and supplying them to this market on the terms laid down by it. They do not think that this is an ideal relationship but they see that it is one which they have to have rather than having no relationship.

I remember very clearly during one of my fairly recent visits to a certain Commonwealth country that the Head of State said to me when I asked him in conversation what he felt about this—and I know that hon. and right hon. Gentlemen opposite will not accept this point—but he said, "The crisis of the confrontation between the industrialised countries and the developing countries is so great, the gap is so severe and so much widened, that this problem can only be solved on the basis of international Socialist planning." [Interruption.] I did not expect hon. and right hon. Gentlemen to agree with that. He said, "How on earth we are to see our problems overcome by the existence of a capitalist club based on Europe I fail to understand."

To many of us this is self-evident. Lest hon. and right hon. Gentlemen do not want to accept the verdict of a Commonwealth Head of State in this context, I should like to take a much more interesting authority. I have quoted some of this before in aid debates in the House and it is important. Last year I had the responsibility of acting as Rapporteur for the Committee on Economic Affairs and Development of the Council of Europe. That Committee presented to the General Assembly a report on development issues. When that was considered by the General Assembly it was adopted virtually unanimously. It would, therefore, be interesting for us, in the context of this discussion, to look at what these European politicians had to say about the situation, what they said about the report for which they voted.

I should like to quote from the report because it is interesting to note how those already in the Community see the position when discussing development rather than as we see it, looking across the Channel. It was said then: Whatever theory we may generate on the appropriate policy as regards financial aid, the biggest test of the degree to which the industrialised countries genuinely wish to co-operate with the developing world is not the amount by which they are prepared to increase their financial and technical assistance—thoughthis is of course vital—but their willingness to agree to the reorganisation of world trade on the basis of greater justice for the less-developed countries. The report goes on, dealing with some of the complaints which the developing countries make in this respect: The second form of injustice about which the developing countries rightly complain concerns the variety of tariff and non-tariff barriers which at present restrict their access to the markets of the developed countries. As pointed out by UNCTAD, 'in the field of primary commodities the most restrictive trade barriers are to be encountered' "— and my right hon. Friend emphasised this— 'in the case of temperate zone products, e.g. wheat, meat, sugar, oil seeds, oils and fats. Trade barriers are usually reinforced by domestic support policies designed to maintain the size of the agricultural sector and reduce the import dependence of the developed countries. In some cases agricultural protectionism has resulted not only in complete self-sufficiency on the part of these countries, but also in the accumulation of exportable surpluses'. As a result, the developing countries find themselves prevented from obtaining a fair share of the market of the industrialised countries commensurate with their comparative advantage, while in the case of some products, they face the competition of subsidised agricultural exports from the developed world in general and from the EEC in particular. Last but by no means least, in the industrial sector—which represents a rapidly growing proportion of the developing countries' exports—the import régime of nearly all the developed countries is strongly biased against the so-called 'cheap labour' products—which are in general precisely those products in which the developing countries enjoy the greatest comparative advantage. 8.0 p.m.

I emphasise again that it is not only Members of this Committee who happen to be opposed to the concept of entry into the Community who have prepared this document; but that this is a report of politicians in the Six at present and a report which was adopted virtually by the whole Assembly at Strasbourg.

It goes on: The question is how far the industrialised countries are prepared to modify their present policies. As far as agriculture is concerned, there is no sign of any willingness on the part of the EEC to reconsider its protectionist agricultural policy, while the prospective enlargement of the Community threatens to deprive several developing countries of their traditional access to the British market. This was the point which my right hon. Friend pointed out in human terms—how many people that sentence covers as contrasted with the number of people involved at the moment in the associated States. The report goes on: As far as the industrial sector is concerned, agreement has at least been reached in UNCTAD on a general system of preferences in favour of the developing countries but it seems likely that some of the more labour-intensive items such as processed agriculture produce and textiles will either be excluded or strictly controlled. This will significantly reduce the impact of the scheme. Here are European politicians who are saying these things and how in the face of that hon. and right hon. Members opposite can say that entry into the European Economic Community is somehow self-evidently going to improve our security or our relationship with the developing countries, I fail to understand. I know the sincerity of hon. Members, particularly of the hon. Member for Lewisham, West, about all this, but I ask them to look at the reality of the situation and not to inject into the situation their own wishes and subjective interpretation of what is likely to happen.

There are just two points I should like to make about this situation. In considering our relationship with the developing world we have to consider the structure of the Community, because, after all, the Community is not an end in itself. The Community is a piece of political machinery for doing certain things which we may or may not want to do. Is this structure of the Community well adapted to meet the needs of the majority of humanity in the developing countries? I would say that there is one fundamental point about the Community which illustrates that it is not, and that is that one of the non-negotiable cornerstones is its pernicious reactionary common agricultural policy which is designed to protect relatively high-cost production in an uncompetitive European agriculture at the expense of the development of agriculture in the Third World and at the expense of export opportunities for the Third World. Therefore, I would say that one of the inherent cornerstones in the structure of the Community works directly against those needs about which, I know, the hon. Gentleman the Member for Lewisham, West is so very sincere.

The second point to be considered is despite the structure of the Community, despite its form, despite its constitution, what are the real intentions, and what has been happening over the past 10 years? The hon. Member for Banbury (Mr. Marten) again spelled out clearly in an intervention this evening the reality of the situation, and that is that over the past 10 years the share of the European Economic Community market for imports from developing countries as a whole has decreased from 22 per cent. to 15.9 per cent. It is no good saying that it does not matter, that there may have been an absolute improvement even if a relative drop proportionately.

If we take on board the real seriousness of the massive employment crisis of the third world, probably the most important political issue in the world as a whole, with which we are all confronted, we cannot escape it by that sort of analysis. We need to be concerned with how we are to expend the opportunities for the developing countries proportionately in our markets.

In that context I would refer to another part of the Council of Europe report, where it puts it very clearly: No programme of trade liberalisation can be expected to have a significant impact on employment in the developing countries unless it is matched by the adoption of conscious measures to restructure the economies of the industrialised countries so as to shift productive resources out of those branches of both industry and agriculture where the developing countries have a cost advantage because of their lower labour costs. So far this issue has been squarely faced by no government"— and this is significant— though the European countries have been prepared to envisage far greater economic adjustments as the result of trade liberalisation in the framework of either GATT or the EEC and EFTA.

Mr. Body

The hon. Member for Portsmouth, West (Mr. Judd) has delivered a devastating attack upon the common agricultural policy. I agree with almost everything he said though I recoil from that Socialist conclusion at which he hinted.

He was, I thought, rather more charitable than he needed to be about the way in which aid is distributed—certainly by the French in Africa. Those who have done their best to study that subject detect that the remarkable amount of aid seems to find its way to those erstwhile colonies of France where there seem to be numerous patriates from France and Algeria. We do not know precisely what share of that aid goes into their pockets.

My hon. Friend the Member for Lewisham, West (Mr. Selwyn Gummer) was right in saying that what the developing countries need is access to markets. This must depend on the terms of trade. If the terms of trade are deteriorating against the developing countries, they will be denied that access.

I would quote figures from the last 10 years to show how the terms of trade have changed between the OECD and the developing countries. Our exports—that is, exports from the OECD countries—to developing countries have risen in price by 16 per cent. Their exports of food and raw materials have fallen in price by 11 per cent. Therefore, the terms of trade have deteriorated by no less than 27 per cent. We realise at once that the major reason why our goods are more expensive is inflation, which has not been shared to the same degree by the developing countries. Their prices have fallen for a number of reasons, and one of them has been the remarkable progress they have made in increasing the production of agricultural crops.

I take one example of this change in the terms of trade which is one the Committee has heard about, it may have been from the hon. Member for Portsmouth, West, in an earlier debate on this subject, touching upon bananas. Ten years ago if a Jamaican wanted to buy a Morris car manufactured in Cowley, he had to pull down from the trees three tons of bananas to pay for it. At the beginning of last year he would have had to pull down 12 tons of bananas to pay for the same car. At the end of last year he would have had to pull down yet another ton of bananas to buy the same car. That illustrates, although it is rather an extreme case, how the terms of trade are deteriorating against the developing countries.

We know that last year there was a world surplus of two million tons of bananas, and that there are piling up surpluses of the kind of food we in Western Europe prefer to eat, and which we have bought in the past on a large scale from the developing countries. The prices of these commodities are depressed and in this context the EEC is guilty. The Amendment, if carried, will to some extent lessen the blow for the developing countries.

The EEC believes in self-sufficiency, and towards that end it has a high levy against imported food, which has enabled the member countries of the EEC to expand their production, so that this year they are likely to have a surplus of six million tons of wheat. Wheat is the key commodity in the world production of food. They are likely to have a surplus of nearly one million tons of sugar—again, one of the most important commodities in the developing countries. This year, as last year, there will be a surplus of hundreds of thousands of tons of fruit. These surpluses must go on to the world market, and they go on at depressed prices because they have to undercut the prices of the same commodities grown by the developing countries. They get on to the world market only because they are subsidised to the tune of millions of dollars.

Wheat, sugar and fruit are of enormous importance to the developing countries, as was borne out by the report from Strasbourg which the hon. Member for Portsmouth, West gave. Yet there seems to be no chance that developing countries will be able to gain any ground in exporting their food to this country or to any of the OECD countries while prices are as depressed as they are now. If they are to be able to buy our manufactured goods and to develop their standard of living—even to mark time—the terms of trade for them must get better. All the signs are that they will deteriorate year after year from now on. That deterioration will accelerate if we enter the Community and the common agricultural policy is not reformed.

One of the conditions of our application was that we would not press for reform of the common agricultural policy. If we enter we shall deal a severe and unkind blow not only to Commonwealth countries but to all the developing countries which have looked to us for an outlet for their produce. They have tried to find an outlet in the EEC and other markets but they have found it more difficult to do so each year for the last 10 years.

As I said, I recoil from the Socialist solution of the hon. Member for Portsmouth, West, but I am willing to be an interventionist in the short term and to advocate commodity agreements. It seems to be the only way by which in the short term we can assist the trade of developing countries. Again, we shall have little chance of doing that in the Community. One has only to look at the Community's record on sugar to see how unhelpful it has been to sugar-producing countries and how it caused at one time the world price of sugar to fall to £14 a ton, which is less than half the cost of production in the most efficient sugar-producing countries in the world, such as Fiji and Queens land. That has been the record of the European Community on sugar, a commodity which is of the utmost importance to the developing countries.

I am driven to the view that there is a case in the short term for commodity agreements. One of the many reasons why I cannot support the application for entry into the Common Market is that there will be little chance of commodity agreements that will be of any use to the developing countries if we are admitted. The Amendment goes at least some way towards helping the developing countries, and I hope the Committee will agree to it. It is not perhaps the best Amendment; one could think of other steps. But they would perhaps be out of order on the Bill. I support the Amendment.

8.15 p.m.

Miss Joan Lestor (Eton and Slough)

I am sorry that the hon. Member for Lewisham, West (Mr. Selwyn Gummer) is not in the Chamber as I want first to take up one or two points he made. He asked whether we and the EEC could not better help the developing world by ourselves becoming richer. His view was that by joining the EEC Britain would become richer, the EEC would become richer and more aid would be available for the developing world. The Committee is divided on the question whether Britain will become richer by joining the EEC. The fact of a country becoming richer does not necessarily benefit the countries with which it has had relations in the past. I have always been unhappy that questions of trade, aid, foreign invest- ment and so on have all been tied up in the case for Britain joining the EEC.

The hon. Member for Lewisham, West said that EEC countries had a far better record on aid to and trade with the developing world than had Britain and that if we became members we should be able to increase the aid we gave. Those who defend our entry into Europe on the grounds that it will help the developing world never face what is happening.

The country with the most flourishing economy in black Africa, perhaps the showpiece of French aid and of EEC relations with the Third World is the Ivory Coast. More than half the commercial and industrial enterprise of the Ivory Coast is in French hands and there is no restriction on the repatriation of funds to Paris. The number of French people in the Ivory Coast has multiplied several times since independence, yet unemployment among the indigenous population has doubled, and the vast majority of peasants have had no improvement in their living standards. My hon. Friend the Member for Portsmouth, West (Mr. Judd) gave examples of this problem. My example is an important one because we are often told to look at France and the Ivory Coast to see how much better France has done in aiding the developing world. Hon. Members are right in saying that what is important is not so much aid but trade.

I have never understood the argument that by joining a Community which contains all sorts of tariffs and restrictions and which means that we shall keep certain markets for ourselves and let in other countries only on sufferance or if it will not damage us too much, we shall automatically extend trading agreements and trade routes to the developing world. Surely the one is contradictory to the others. This is the reason that so much time at the UNCTAD conference in Chile was devoted to what was happening to the developing world in relation to Britain and the other countries seeking to join the EEC.

Mr. Normanton

When the hon. Lady speaks of the damage to the EEC, is she implying that policies should be pursued regardless of damage to a country's own industries and trade? Surely this does not make logical industrial sense since we must have regard to the damage which may flow from a particular trading relationship, otherwise all that one is doing is cutting one's own throat and the throats of those whom one is seeking to help.

Miss Lestor

I do not think anybody could relate what the hon. Gentleman said to the point I was making. I am not saying that Britain must hold back her own development to help developing countries, though that would not be a bad case to make out. However, I am not making such a case. I am questioning whether Britain by joining a protectionist organisation will help the developing world when part of that world is already excluded from participation in trading agreements. The argument in terms of how much we shall do for the developing world has only latterly come into the thinking of the EEC; some of the EEC countries are showing some sort of concern for the developing countries.

It has also been said that the developing countries' share of world trade has fallen dramatically in the last ten years or so and that the debt burden is becoming progressively heavier. In 1970 the developing world received £5.3 billion in aid and had to replay £2.3 billion in debt service charges. If this process continues, some of these countries will be paying more in service charges than they will be receiving in aid. In looking at what is happening in the EEC, we must examine the facts and not allow ourselves to be lulled into any sort of fantasy.

I have been alarmed and saddened by some of the arguments about private investment being of great benefit to the developing world. Sir Paul Chambers aptly described the whole purpose of this sort of philosophy as follows: It is no part of the duty of any private enterprise company to use the funds of stockholders to help the development of underdeveloped countries in such a way that the profits accruing to shareholders are less than if the funds were used in some other way. In other words, he was saying that investment in the developing world is for profit and is not primarily to help the developing world in terms of trade since, as we all know, much of the trade which follows investments is tied to the country which is investing.

I am also alarmed at the way in which it appears that arguments can shift when dealing with aid to the developing world. When British Petroleum invested in Alaska, we never thought of that investment as part of an aid programme to the United States, but when we invest in Mexico it is regarded as part of our aid programme. Why is it that such money is regarded as a business venture when applied to a developed country and as aid when applied to an undeveloped country?

I have asked two parliamentary Questions on the subject of reports in the South African press that South Africa is seeking to negotiate a trading agreement with the EEC. When Britain joins the EEC South Africa will lose the Commonwealth preference which she has enjoyed for so long. I believe it is quite disgusting that South Africa has enjoyed Commonwealth preference, but it is a fact that she has done so. I have been told in ministerial answers—and I am not suggesting that I have been misled—that the British Government have no knowledge of any discussions of this sort.

The facts are that in 1969 the Six decided in Brussels not to accept Botswana, Lesotho and Swaziland as associate members after British entry into the EEC because of their customs union with South Africa. The Six agreed that all African members of the Commonwealth could become Associate members, but this did not apply to those three countries since they were assumed to be in a special category. Officials said that if those three countries were to become members, South African goods would be able to enter the Common Market duty free. I am utterly opposed to any arrangements to provide for South African goods entering the EEC markets duty free, but bearing in mind the fact that Britain has given preference to South Africa for so long, it is hard that Botswana, Swaziland and Lesotho should be penalised because we have not been able to find a way of helping them in terms of associate membership of the EEC over the last few years. I am glad to see that those three countries have now been included in these provisions of this amendment, but we must look carefully at the situation to see what will happen in the future if it carried in relation to South Africa. Thus we have a position in which they have been excluded from associate status because of their relationship with South Africa and the access that South Africa might have to markets in EEC countries.

However, the matter becomes more complicated. Not very long ago the general manager of a firm which manufactures products under the trade name "Koo" and sells 60 per cent. of its canned fruit to Britain estimated that Britain's entry into the Common Market would mean a loss of sales worth over 8 million Rand a year. He suggested that South Africa should consider establishing manufacturing facilities in an African country with associate EEC status, and then exporting to Britain and Europe without being subject to the new tariffs.

If discussions are taking place without the knowledge of the British Government—and I accept that right hon. and hon. Gentlemen opposite have no knowledge of them—this is a matter which deserves close scrutiny. When we talk about wanting to assist the developing world, clearly this is a matter which goes very much against the sort of sympathy and assistance in terms of trade that we want to see given to the developing world but not to a country like South Africa.

I wish to make one other point about South Africa. In 1971 her Minister for Economic Affairs said in a radio broadcast that British entry into the Common Market would have far-reaching implications for South African exports to Britain of fresh, dried and canned fruits. The Minister flew to London at the beginning of June for discussions with the South African ambassadors in London and the member countries about possible methods of dealing with the problems expected when the detailed terms of British entry were determined. I do not know whether Britain has been a party to those discussions. However, I know that, together with many of my hon. Friends, I should view with great alarm and strong condemnation any suggestion that special arrangements should be made for South African goods.


8.30 p.m.

If this Amendment is accepted, we have to find ways of including those countries which have been excluded because of their relationship with South Africa. It is a relationship which has come about because of their geographical positions and other considerations from which they have been unable to extricate themselves. This is vitally important. For many of us the argument about Britain joining the EEC has not been simply about whether we join a trading agreement, whether we become part of a narrow part of Europe, or whether this will marginally improve the standard of living of our people. It is far wider than that and far more important. The argument has been based largely on what British entry means to the developing world and the way in which Britain and the EEC will be forced by their own agreements to lessen their trading links with the developing world. I for one have always been opposed to our joining Europe on those grounds alone.

I do not believe that the prophecies of the hon. Member for Lewisham, West will come true, however sincerely he may believe in them. If, sadly, we join Europe next year, I believe that in a few years we shall be discussing—assuming always that we are allowed to discuss it in this House—what has been happening to the developing world and how we missed the opportunity to influence it when we had it. If we join Europe, we shall miss the opportunity that we have now to stretch out a fraternal hand to the developing world and to say, "We want to include you." I do not believe that even the most ardent Marketeer could possibly turn his face against the Amendment.

Mr. Skeet

The hon. Member for Eton and Slough (Miss Lestor) made a very interesting speech, and I listened to every word. She spoke about one or two States on the west coast of Africa where money seems to filter into the sand. This is one of the great tragedies of history. It is not a matter of doing trade with a country or giving it money. The higher echelons always get it. It never goes to those who really deserve it.

The hon. Lady will be aware that the slaughter going on in a certain part of Africa today has not been caused by the Western world. It is a purely local matter, and extremely regrettable—

Mr. Body

But his point was the same as mine. Much of this aid goes back to France. It goes to the French expatriates.

Mr. Skeet

I think that I am straying a little far from the point. I do not intend to discuss that aspect very much more.

I come instead to my other point, which is to take up the hon. Lady's concern about the preference to South Africa. The hon. Lady is much more concerned about it than I am. I do not know whether she has read the Amendment. It begins by saying: Sections 1 and 2 of the Import Duties Act 1958 shall remain in force …". All the argument has been on the second limb which deals with the Import Duties (Developing Countries) Order 1971. The first limb of the Amendment refers to two Sections of the Import Duties Act, 1958, the first of which gives powers to charge protective duties, and the second of which deals with Commonwealth preferences. In that Act the hon. Lady will find a direct reference to the Union of South Africa and a provision about the maintenance of Commonwealth preference. The Amendment, which the hon. Member for Eton and Slough must support, provides that Sections 1 and 2 of the Import Duties Act, 1958, shall remain in force. Therefore, the hon. Lady would wish South Africa to have the full benefit of preferences. That will be impracticable should we enter Europe.

There is another reason why South Africa should have these advantages, that is simply because before we go into Europe the more assistance we can give to black Africans the more it will advance their prosperity. When we enter Europe the common external tariff will come into operation and other matters will apply.

Mrs. Hart

I am sure that the hon. Member for Bedford (Mr. Skeet) does not wish to misrepresent the Committee in any way. The essence of the Amendment relates to the Import Duties (Developing Countries) Order, 1971, which is made under the Import Duties Act. Of course, the Import Duties Act covers many other things, some of which have been replaced. The Commonwealth preference scheme has been replaced by the Import Duties (Developing Countries) Order and it does not come into the picture at all.

Mr. Skeet

There are two limbs of the contention which the right hon. Lady is putting forward in her Amendment which I have severed. I am coming to the Import Duties (Developing Countries) Order in a few moments. Before I do so, I will deal with the general points of trading with overseas territories. I regard it as important that the UNCTAD arrangements which we have negotiated are remarkably fair. I should like to see them form the basis for what Europe will do.

My right hon. Friend has already indicated that he regards these arrangements as a liberal interpretation of a Western democracy. Surely the right way to look at this matter is to say that if Europe is not as outward looking as we should like it to be, and if we have always been outward looking because we have had colonies and parts of the Commonwealth abroad, we should join this encampment so that we can persuade it from the Council of Ministers that the Third World is vital. If Santiago has not been a great success, perhaps in future years, with the earnest endeavours of the United Kingdom inside the Common Market, there will be a greater impact.

Another reason why I consider it vastly important is that this inward trading bloc we are about to join will command something like 40 per cent. of international trade. That means that a great deal of power will be wielded by this part of the Western democracies. If we are in that bloc we will attempt to steer it in the right direction.

Mr. Julius Silverman (Birmingham, Aston)

What makes the hon. Gentleman so confident that we shall be able to steer it in the right direction?

Mr. Skeet

Once Europe gets going and the European Parliament is formulated with additional powers, British experience in running a parliamentary democracy should count.

Mr. Deakins


Mr. Skeet

The hon. Member is pessimistic. Of course he is, he has always been so.

Mr. Deakins

I said "Federalist".

Mr. Skeet

I am not suggesting it will be Federalistic. It could well have additional powers. We have been running a democracy for over 1,000 years, and we are the only people in Europe who can run it properly. We have something to confer on Europe. We have always run our democracy on the theme that we have to do a great deal for the third world because the Third World is of prime importance to us.

My next point is equally significant. Quite apart from 40 per cent. of the world trade being done by the Common Market countries, including ourselves, Norway and Denmark, London happens to be financial centre of Europe. It will be the greatest centre after the United States. It will be from this focal point not merely that the money from Western Europe but also from London and the other countries will be channelled through us into those territories which will want the benefit.

What everybody has overlooked today is the immense volume of Eurodollar funds from London which are channelled out to other countries which need them. The right hon. Member for Lanark (Mrs. Hart) was concerned about the subcontinent of India. Of course, we are concerned. There are 650 million people who must not be neglected. They require investment, and the more attractive they make it the more attractive it will be to invest in those areas. Surely if the United Kingdom is in the EEC and if London is the financial centre of Europe, it will be the more influential in future years in this connection.

I agree with my hon. Friend about commodity arrangements. I have been very concerned about the right way to help overseas territories. I am not concerned about the volume of money which is given, because much of it is wasted. I am concerned about the quality of aid. The more technical and technological advice which can be given and implemented by these territories, the more valuable it will be. The more commodity arrangements which can be formulated and used throughout the world, the more valuable they will be for the countries affected.

I should like to mention two important matters. I am against the Amendment because it will perpetuate Commonwealth preferences indefinitely. That would be contrary to our obligations under the CCT. It will also be inconsistent with two White Papers which have been issued which would preclude the Government and the Opposition from accepting it. The Command Paper of the Labour Government to which I referred earlier was No. 3345. The Amendment will also be contradictory to the agreement which we have just reached with Europe.

I think that we must keep up with the times. I have always felt that if Commonwealth preferences had gone on great things could have been achieved. GATT was brought into being and that led to erosion of preferences. Europe has a system of preferences which is being broadened still more. However, I have noted that many Commonwealth countries have reorientated their trade away from the Metropolis. A good illustration is Australia, which has now greater trade with Japan than with the United Kingdom. The value of Commonwealth preferences in that country has diminished.

Sir R. Russell

Does my hon. Friend agree that the cause of that switch in trade was that 10 years ago we told the Commonwealth countries that we wanted to join Europe and advised them to seek other outlets for their trade?

Mr. Skeet

I am not certain whether it is only that. Numerous factors come into the matter. We should recall that the Japanese made an onset on Australia and New Zealand many years ago. Australia has a number of primary commodities for sale on the international market—coal, wool and many other products—which the Japanese want. For example, the Japanese want to buy iron ore. Australia has iron ore. Therefore, the Australians find it convenient to market it in Japan. Flowing from that, if Japan is the number one trading partner, not us, Australia will give that country certain priorities. I instance the tariff on Australian malleable cast-iron fittings. The new rate of duty was 60 per cent. from 1st October, 1971. It is to be 50 per cent. from 1st January, 1973, and in 1976 it goes down to 40 per cent. It is not specifically to down the United Kingdom. Far from it. Australia is a generous and great nation. It is to give protection to her own producers and to deal with Japanese imports which are having success in Australia.

The point I am seeking to emphasise is that while we are trying to get into Europe to improve our trading position, Australia has not hesitated to go her own independent way for her own reasons. I agree with my hon. Friend the Member for Wembley, South (Sir R. Russell) that perhaps it was partly because 10 years of negotiations have convinced the Australians it is right to diversify their trade and to reorientate on other parts of the globe which are more proximate in the Pacific area. However, other factors have operated at the same time.

It is significant that apart from GATT, the Kennedy Round negotiations and the assembly of EFTA led to certain preferences being granted in Europe against our Commonwealth interests. Finally, there have been 10 years of negotiations in our attempts to move into Europe. I think that my right hon. and learned Friend the Chancellor of the Duchy of Lancaster has negotiated satisfactory arrangements when he has secured for the dependent territories association and for the developing countries in the Caribbean and Africa status quo until about 1975.

8.45 p.m

I am concerned to ensure that in the opening vista of the new world our friends are looking towards Britain. Perhaps I can instance two countries. New Zealand is perfectly satisfied with the arrangements. Mr. Marshall, who was the Deputy Prime Minister at the time, said in London that he was satisfied with what had been negotiated. With regard to Australia, while sugar has been penalised, only 7 per cent. of that country's exports have been affected. The rest of them do reasonably well. I should have thought that, in view of the opportunities which are opening up in Europe, there would be great advantages for the people of those countries if Britain were at the top table.

If the Amendment were accepted, it could seriously affect Section 7 of the Import Duties Act, 1958, which makes provision for exemption on imports intended for export and re-export. Plainly the negotiations will lead to the elimination of drawback under Section 9 and the abolition of the Process (Temporary Importation) Regulations of 1958. That will be followed by the adoption of a new system which has been outlined in Europe.

I can summarise my opposition to the Amendment in this way. It is inconsistent with the common customs tariff, the adjustment of rates and the formulation of new classifications of goods under appropriate headings which we have agreed with Europe. Also, if the Amendment were accepted, it would be essential to adopt the European system of quotas. We do not have quotas in the United Kingdom; we would have them in Europe. We must be free to adopt the concept of free circulation Community transit and the Community origin rules. Acceptance of the Amendment would be inconsistent with those matters.

Finally, I return to the question of the UNCTAD countries and our own Commonwealth. I am all in favour of assisting our colleagues abroad. I refuse to accept that the Commonwealth is dissolved. But I am realistic enough to say that, in this modern world, our best way of assisting them is not through preferences which have been largely eroded—they have been written down over the course of history—but for Britain to be on the top table and ensure that the Commonwealth is kept always at the forefront of European considerations. By that means we can have a progressive Commonwealth in the years ahead.

Mr. Julius Silverman

The pith of the argument of the hon. Member for Bedford (Mr. Skeet) was that we cannot accept the Amendment because it would be inconsistent with going into Europe. That begs the question. Entry to the Common Market will impose on us obligations which, in our view, will be harmful to us and to the Commonwealth and the developing countries. That is the point of our argument. The hon. Member says that if we are at the top table we shall be able to stress our view about the Commonwealth countries. Is that so?

This debate has shown that the importance of aid and trade to the developing countries is recognised on both sides of the Committee. Most hon. Members agree that the best way of proceeding is by trade rather than by what is generally loosely described as aid. Some of the countries in the Commonwealth, particularly India, are extremely sceptical about the question of aid. India has had the traumatic experience of the change in her relationship with America during the struggle over Bangladesh.

One reason why I am sceptical about aid is that very often money which goes to developing countries never reaches those for whom it is intended. When people talk about aid, they are often talking about profit-making concerns which have nothing to do with aid. If the inhabitants of a country receive any assistance or comfort from this aid, it is almost as an accidental by-product of what was intended, or there are loans to be repaid with interest. I sometimes wonder what aid means. I think most hon. Members agree that the best way to help is to promote trade, and that is what the Amendment is about.

Whatever views are held on this matter by the hon. Members for Lewisham, West (Mr. Selwyn Gummer) and Bedford, there is no doubt that the developing countries—India is a case in point—areapprehensive about what our entry into the Common Market will mean for their relationship and trade with this country, and they have said so, sometimes in muted terms because they do not want to have a row over this issue. But there is no doubt whatsoever where they stand. They are apprehensive about the effect on them of our entry into the Community.

Reference has been made to what has happened to certain developing countries in their association with the EEC following the Yaoundé Conference. It has been said that a large part of the trade done by the EEC with the developing countries is carried on under the terms of the Yaoundé Convention with the French ex-Colonies. A large part of that finds its way eventually into the pockets of French finance houses, French investors and French expatriates who live in the country. The same applies to aid, the greatest part of which goes to the French ex-Colonies.

This is not surprising because, in precisely the same way as the agricultural policy of the Community is tailor-made to suit French interests, so the policy of aid and trade with the French ex-Colonies is tailor-made to suit French interests. I know that there has been criticism of General de Gaulle because he looked after French interests in the negotiations, but I have never criticised him for doing that. Nevertheless, this is a fact which has to be appreciated, and anybody who believes that Britain will go to the top table and steer the Community on to its new course should ask himself how he proposes to do that in view of the possibility of a French veto—and not only a French veto but, as has been said, the veto of the countries involved in the Yaoundé Convention. They have been given a built-in veto, or at any rate the right to be consulted in order to prevent any steering of the kind suggested by the hon. Member for Bedford.

I assure the hon. Gentleman that once we are in the Community the French will say, "These are our interests, and we shall stick to them. You can talk as much as you like about steering the EEC in the direction you want. The voice of France will be the preponderant voice, as it always has been in the Community."

Mr. Skeet

It is a matter of reconciling interests. There are a number of French ex-Colonies, and France wishes to pursue her interests there, but we, too, have interests abroad, and there must be a compromise somewhere. We have friends in Europe who will back us. The argument is about assisting the third world, and public opinion will be behind us on this issue.

Mr. Silverman

Why should it be thought that France will compromise on these issues or sacrifice her financial interests and the interests of her ex-Colonies in favour of ours? In the same way, France will not compromise in her agricultural policies. She will not do it. She has threatened time and again that if her policies were not pursued and accepted, she would break up the Common Market. She has pursued persistently a policy which might be called blackmail for the purpose of preservation of her view of how Europe should be run, and her view is that it should be run in the interests of France.

When talking of compromise and of people coming to an agreement, one must bear in mind that France has all the instruments at her disposal. She can use her veto against an agreement. She has not only a veto but the vested interests of her Colonies and her investment in them, which has the backing of recognition. I cannot see that we shall get any real concession about these.

The hope that when we enter the EEC the interests of the British ex-Colonies of members of the Commonwealth will get at least the same consideration as the French is based merely upon an unreal optimism and a failure to accept the lesson of what has happened in the EEC since it has existed. That is why the Commonwealth countries are so apprehensive about what will happen to them.

The hon. Member for Lewisham, West evinced other arguments. He said that we shall become richer if we enter the EEC. This matter has been argued, but I very much doubt whether, with our contribution to Europe and to French agriculture, we shall become richer. We shall see. But even if the hon. Gentleman is right about that, the facts have also shown that even if we became richer, that would not of necessity help the developing countries. What has happened over the years has been that whilst the developed countries have become richer the developing countries, or the so-called underdeveloped countries, have become poorer, for various reasons which, have been well set out.

Something like the Amendment ought to be accepted by the Committee to give the Commonwealth countries, at any rate, the same rights and trading powers and to give us the right to give them the same preferences that we do at present. In the absence of that, I can safely forecast that within a short historical term, the Commonwealth will fall apart.

One cannot base the continuation of the Commonwealth simply upon history. There must be some other bond to retain it. There used to be one bond. A person from the Commonwealth had a right to come to the mother country. That has gone. I shall not argue tonight whether that is right or wrong. But that has gone completely. The only remaining bond, apart from the annual Commonwealth conference, is trade. If trade goes and if the preferences go, there will be no link whatever to keep the Commonwealth together. If we enter the EEC upon the terms proposed, without the benefit of an Amendment of this sort, there is little hope of the Commonwealth surviving for more than a very short historical term.

9.0 p.m.

Sir R. Russell

I intervene for only a few moments, largely because I have been provoked by my hon. Friend the Member for Bedford (Mr. Skeet). My hon. Friend tried to belittle the Commonwealth preference system and said—which is true—that only 11 per cent. of Australia's exports come to Britain. I beg my hon. Friend to remember that the sugar, the dairy produce, and the canned fruit in particular have vital markets in Britain which the Australians will find it difficult to replace. I do not know where else my hon. Friend thinks the Australians will find markets for that produce.

My hon. Friend said also that preferences have been largely eroded. That is true of specific preferences. Naturally they have been eroded by inflation. However, it is not true of those on and ad valorem basis. Most of our preferences are on an ad valorem basis and they still remain the same, unless they have been re-negotiated in trade agreements.

I know that it is often thought that Australia has cut her preferences on our exports to Australia. What happened in the 1957 trade agreement was that Australia took powers to reduce the preferences, but she has not implemented those powers. I think that most of the preferences are at the same rate as they were before that agreement came into force.

I hope that my hon. Friend will have a more charitable attitude towards Commonwealth preference, because it still plays a great part in furthering our trade with the other parts of the Commonwealth and I should hate to see it disappear, though I am afraid that this is what will happen as a result of the Bill.

I hope, too, that the hon. Member for Eton and Slough (Miss Lestor) will have a little more friendly attitude towards trade with South Africa, even if she is in disagreement with the system there; because South Africa gives us preferences as well as receiving them from us and we have a favourable trade balance with South Africa and have had for a number of years. If no help can be given to South Africa as a result of our joining the Community, I hope that it will be possible to do something for the former High Commission territories, despite the fact that they are within the South African customs union.

The hon. Lady did not like the thought of any negotiations going on under which South African industry might be transferred to a developing country to get produce imported into this country. I do not see anything wrong with that, because it gives employment in that developing country which might otherwise not be given and it also helps South Africa, and therefore the people of South Africa, and I should have thought that it would have been the object of all hon. Members to try to do that.

I beg hon. Members opposite who think the same as I do about the danger of our joining the Common Market to realise that, if we can help South Africa in any way, we should try to do so, because we would be helping the people of all races of South Africa at the same time. I support the Amendment.

Mr. Deakins

I hope that the hon. Member for Wembley, South (Sir R. Russell) will forgive me if I do not comment on his relatively brief remarks. I shall comment briefly on two speeches made by pro-Marketeers opposite.

The main relevant point made by the hon. Member for Bedford (Mr. Skeet) was that, if we go into Europe, our big and strong colonial tradition will help to make the Community outward-looking. The hon. Gentleman forgets that the French also in 1958 had a very long and honourable colonial tradition, but they did not help to make the Community outward-looking in the way that we want it made outward-looking.

The time for us to use the influence of our colonial tradition would have been in the entry negotiations and not afterwards. The fact that we signally failed to protect the interests of the developing countries in the entry negotiations does not augur well—in fact, it augurs badly—for our chances once we are in.

Mr. Skeet

There is a big difference between the French and ourselves. The French had not got colonies right throughout the world as we had, nor had they had them for the period we had had them for. The final factor is that our investment abroad is very much vaster than the French investment has ever been.

Mr. Deakins

I accept what the hon. Gentleman says. That merely makes it more imperative that we should do our best to protect the interests of the developing Commonwealth countries in the way that France succeeded in protecting the interests of its colonial territories. It did not succeed in making the Community outward-looking generally, which is what we are supposed to be aiming for.

I want to comment on the remarkable speech of the hon. Member for Lewisham, West (Mr. Selwyn Gummer). It was a moderate speech and coming from a pro-marketeer was very surprising since it showed the existence of a pro-marketeer with a social conscience about the developing world. But I recall Dr. Johnson's comment when his attention was drawn—and here I make no personal allusion—to a dog which was walking on its hind legs. He said: "Sir, it is like a woman preaching. It is not well done but we are surprised to find it done at all". That is the attitude I have towards the speech of the hon. Member for Lewisham West. It was a remarkable speech but I shall resist the temptation to praise it in that regard because it was a rather narrow speech and it omitted any mention of the iniquities of the common agricultural policy. The hon. Member said nothing about the dreadful and growing gap in living standards between the Western countries and the poor nations of the world.

I would like to follow up what my right hon. Friend, the Member for Lanark (Mrs. Hart) said about the Common Market's generalised preference scheme when she moved the Amendment. She criticised it on at least two grounds and I have two further criticisms. It is just as well that the Committee should be aware of the nature of the animal with which we shall have to deal once we join the EEC and with which we shall have to harmonise our generalised preference scheme.

First, the Community Preference Scheme has 1968 as its base year. The scheme was drawn up in 1970 so that the Community could have taken a much more up-to-date base year. Instead it chose a very bad base year and they have allowed the developing countries throughout the world a 5 per cent. increase in exports on that base year at a time when world trade generally has been growing at the rate of 15 per cent. a year. The generalised preference scheme does not even cover the whole of the existing trade of the developing countries with the Common Market as it was in 1969, let alone in 1972, 1973 and 1974, when we shall be seeking to harmonise our scheme with it.

The other pernicious feature of the Common Market scheme relates to its quotas where there is competitive tendering between different nations. There is the dreadful and unfortunate spectacle of two poor developing countries which want to sell the same commodity to the Common Market having to compete with each other for an appropriate share of the quota and that has led, is leading and will continue to lead to price-cutting between the two countries. Ultimately this will remove such advantages as the developing countries have gained by the reduction or elimination of tariffs. It is a dreadful scheme.

My right hon. Friend referred to the position of the Asian Commonwealth countries. When we questioned the Chancellor of the Duchy during the long year of the negotiations about why certain countries were not being offered associate status, we were told that such status would not be considered appropriate. Since these countries constitute about two-thirds of the population of the Commonwealth and about a quarter of the world population, it is absolutely appalling that we should not have made some more specific arrangements to look after their interests.

Vague assurances and a declaration of intent are no use to these countries. We start to search for the reasons why the Community should have excluded all the Asian Commonwealth countries. I do not believe there is any political implication here. I believe it was because it was frightened at the size of the problem and decided to postpone it to the Greek Kalends. The issue will not be satisfactorily dealt with as long as we remain members of the Community, which I hope will not be for long. In the light of this poor prospect for the Asian Commonwealth countries, it was perhaps the supreme failure of the negotiating team in the long year of negotiation that they achieved nothing concrete for them. There was no firm assurance about the future levels of their trade with the Community when the common external tariff is imposed.

The developing countries also have to fear the imposition of the common agricultural policy. I spoke for quite a long time about that on 26th April, and I do not intend even to try to summarise the many criticisms I made, which have been echoed by hon. Members on both sides in our Committee debates since. The common agricultural policy is to be condemned root and branch. No one, not even the most ardent pro-Marketeer, has put in a good word for it in our debates. The logical consequence of accepting it without any major amendment, which is what we have agreed to in the negotiations, is undoubtedly that the developing countries' agricultural exports and exports of semi-processed agricultural products will be adversely affected.

It is not enough for the hon. Member for Chertsey (Mr. Grylls), for example, to talk in a previous debate about there being no tariff on raw materials. The only reason for that, and why we are allowed to continue to import raw materials duty-free, is that they are the basic commodities needed to give that industrial growth which is, we are told, the main reason why we are going into the Common Market. If the Community could dig the raw materials out of the ground or produce the tropical products now being guaranteed duty-free entry, it would do so. Under the common agricultural policy it is doing absurd things, like expanding oil seed production, olive oil production and rice production, which is the biggest absurdity of all. Then it finds that it must spend money under the FEOGA budget on dumping rice, to the detriment of the interests of third countries which are dependent on rice exports for a much bigger proportion of their total trade than the Common Market countries are.

It is a pity that although the debate has gone on so long we have not heard a little more from people who are genuinely concerned about the interests of the developing countries and are not merely putting forward what is in essence just wishful thinking about our future influence in the Community.

Aid and trade cannot be seen as crumbs from the rich man's table. It is not logical, and it is immoral to claim that we can help the poor countries only by first making ourselves richer. The argument is doubly immoral, because if we should succeed in making ourselves richer we should be increasing the gap in living standards between ourselves in Western Europe and the poor countries of the world, and no amount of aid and trade thereafter would be able to make up the gap.

We must think increasingly of making sacrifices. I know that that is not politically popular, and will not be acceptable to all my right hon. and hon. Friends, but I believe that we must in the long term think in that way. As we have been unable in the negotiations, when it is supposed to have wanted us in, to make the Community make any sacrifices to help the developing countries, what chance have we once we are full members?

For those reasons I hope all hon. Members will support the Amendment.

Mr. Ian Lloyd (Portsmouth, Langstone)

I find myself drawn unexpectedly into this debate by the inherent interest of some of the arguments and aspects of the Amendment.

It is a pity that my colleague the hon. Member for Portsmouth, West (Mr. Judd), with whom I participated in the debate in Strasbourg to which he referred, is no longer in the Chamber. The report from which he quoted was strongly criticised in that debate of the Council of Europe Assembly, for very good reasons. The Committee may be interested in some of the reasons, the fallacies in the report and some of the arguments. I begin with the question of definition of aid and the rather arbitrary definition used to distinguish between what is known as official aid and private investment, and the attempt to draw from this distinction a fundamental conclusion about the economic impact of the flow of resources.

9.15 p.m.

It seems to me that the flows of resources created by capital investment, whether the capital is provided by the Government or by the private entrepreneur in the first instance, are, over a long period, exactly the same. I remem- ber, as many others must, being told with great pride of the enormous contribution made to the development of what was the then under-developed world of South America, the United States, Canada, India and Africa by the export of capital—private, very largely—from the London capital market. The most interesting aspect of this is that although substantial flows of dividends and therefore of real resources undoubtedly returned, particularly to the United Kingdom and, to a secondary extent, to Western Europe, nevertheless the railways are stillthere, the harbours are still there, the infrastructures created by the export of British capital are still there. If that argument is true of the export of private capital in the 19th century, it is no less true of the export of private capital in the second half of this century.

The conclusion to be drawn is that the important thing is to create in the countries using capital resources—which are, after all, the most significant thing on this earth in this day and age—an understanding of the fundamental importance of using them efficiently. This might be done successfully where these resources are made available, as it were, for free, where there is no obligation to return them or for interest to be paid on them, and the impression is created that capital is something conjured out of the hat by the developed world and made available. But it does not necessarily follow. Nor, obversely, does it necessarily follow, where private capital is made at world market rates of interest, that that is an indication of sacrifice that the peoples of the world have to make so that capital can be created and exported and made available to developing countries. This is of some importance. It is an indication of a scarcity which is a real scarcity, and no magic wand waving by any Government or international agency can eliminate it. The developing countries and those peoples in them who have the responsibility and the charge of using these scarce resources should be aware of the fact.

I come to the interesting point made by the right hon. Member for Lanark (Mrs. Hart)—the question of whether the developed countries are likely to be in a better or worse position to increase the flow of aid if, as has been widely argued. we should suddenly set a ceiling to the growth of real income in the developed world. This was one of the interesting arguments used in the Strasbourg debate. I had an interesting exchange with the President of the United Nations General Assembly on this matter. I am sure the Committee will be interested because we are all suffering from it.

Throughout the Western developed democracies, as I see it, Governments and the politicians supposed to control them are totally incapable of persuading those who elect them and those who support them in Parliament that the real incomes of their peoples are adequate. Indeed, the general inflationary phenomenon throughout the Western world is an indication of our incapacity to do this. It is a total failure. They all want more—more in real terms—faster than the developed economies can supply it.

The argument made—and in was used by the President of the United Nations General Assembly—is that this is a function of leadership, that it is up to the politicians to give a lead in saying that there should be an increased sacrifice of real resources from the developed countries so that aid and all that goes with it can be increased. But let us be realistic. What success are we likely to have? What symptoms are there that we are being successful in doing it?

Many distinguished commentators on world affairs are constantly saying that we should increase the flow of aid to the under-developed world. But in what ways does this find an effective application? There may be one or two conspicuous exceptions, but where throughout the developed world is aid standing at more than 1 per cent. of the gross national product?

Perhaps a more realistic question is: where throughout the developed world is it likely within the next decade to be raised significantly above the level of 1 per cent. of GNP? The answer is that it is not. If we are to be realistic in our discussions on these problems we should start from that level, from the level of the likely share of the resources of the developed world which will be made available within the political context in which we find ourselves—one of dramatic difficulty, in some ways of dramatic failure—and within that con- text we can perhaps talk a little more realistically.

Another subject of great concern raised by this Amendment is that of commodity agreements. So often it is found that because there has been partial success in some commodities with some types of agreement, it is possible to generalise this success and to apply it, as it were, to all raw materials, all major commodities particularly those which are exported by the under-developed countries. Here there is an inherent dilemma which we are reluctant to face. It is a dilemma inherent in the fact of scarce resources and the present system. The dilemma is that we may if we wish, by all sorts of arrangements, stabilise the output of a particular commodity in a developing country.

We may as an alternative, by other arrangements, stabilise the real income which is achieved by the producers of such an output. There is no possible device—at least if it exists I do not know of it—which will enable any commodity agreement to stabilise both the real income and the output, and so a fundamental choice must be made. This point has been brilliantly argued by Sir Sydney Caine, former principal of the London School of Economics, in a much-neglected pamphlet in which the dilemma is made absolutely clear and the failure of so many policy-makers to recognise this dilemma and to see that there is a choice which is inescapable, and therefore to approach the whole question of commodity agreements with just a little more caution, is pinpointed.

I can give a simple illustration. It would be desirable to stabilise the real income of cocoa producers on the West Coast of Africa. This could be done possibly by making available from Western Europe a supply of funds that was in some way unrelated to the price of cocoa. This would not necessarily stabilise the output. If both were to be done the requirement would be a cocoa overlord for Western Europe who could prescribe exactly how much cocoa we should drink, and who could prescribe that in the face of a changing pattern of tastes throughout Western Europe in relation to other beverages. This is a degree of control of the consumer which I am sure everyone in the Committee, and the most consumers, would find totally unacceptable.

Mr. Marten

Not Dr. Mansholt.

Mr. Lloyd

Possibly not. There is a more fundamental aspect of this which the Committee should not neglect, even though hon. Members may not agree with much of the analysis or many of the conclusions of the document to which I am about to refer. I suppose most hon. Members will have heard of the report of the Club of Rome which dealt with the implications of the MIT study of this basic question of whether there can be continuing growth of the major world economies.

Whatever one may think of the analysis or the conclusions which although drastically dealt with by some critics, have been perhaps unduly neglected, one conclusion is inescapably clear. We can take our own time dimension, but sooner or later the question must be faced: how do we maintain on the planet as a whole a sustainable gross national product? The whole question of aid and commodity agreements, the relationship between the under-developed and developed countries, must ultimately be considered in this context. How is the balance between the two to be maintained in such a way that we do not produce the total collapse predicted by this report?

I turn to the political pressures behind protectionism. I am no defender of the common agricultural policy. Basically my position is that of a free trader, as the Committee will have concluded. I believe that the merits of free trade on the whole largely outweigh those of any other system which has been devised. Nonetheless, we must, particularly in this Committee, recognise the realities of political pressures. Why is there a common agricultural policy? Why throughout the history of this country has agricultural protectionism exercised a profound influence on our political decision making—as it has? Why is it today exercising an equally powerful and, to some hon. Members on both sides, regrettable, influence on the decision making of the European Community? The answer is, of course, perfectly simple, and we all understand it. It is the pressure from powerful, entrenched agricultural interests with a political voice.

Therefore, if we are to say that this must disappear with a wave of a magic wand, and how fine it would be if we could develop an economic community without agricultural protectionism, or in which it would exercise a much less powerful influence on our decision making, then it seems to me that the obligation rests on all who say we must say how the political power of the agricultural interest can be reduced, if that is what we want.

Surely this applies equally to the, perhaps, more significant sector in Western Europe as a whole, and that is the industrial sector. Many hon. Members have argued that the underdeveloped countries must gain much freer access to the industrial markets of Western Europe. So they should, perhaps, by any criteria, but on those who say they should rests the very heavy obligation to say how we can deal with the political pressures—for example, of the shipbuilding unions in this country which are asked to accept the import of ships from Brazil, from Spain, and from what will undoubtedly be even less developed countries than those over the next two decades. Of course this will happen, and those political pressures will be generated and they will find their focus here in this Chamber. There is no doubt about that whatsoever.

All I am asking the Committee to do in considering the Amendment and its implications is to be a little more realistic and to see the world as we know it and as we find it, and, perhaps, to make a sensible decision.

Mr. Michael Meacher (Oldham, West)

The hon. Member for Portsmouth, Langstone (Mr. Ian Lloyd) went rather wide in making a tour d'horizon which took him round the world. I hope he will forgive me if I return to what was, I think, the main theme running through the arguments of those who oppose the Amendment.

It is the quite simple argument that if Britain were to go into the Common Market our capacity to assist the underdeveloped countries would grow. This is a very tantalising argument and one easy to put forward. It has been repeatedly used in this country in support of a growth policy which, it is alleged, would automatically lead to a greater degree of redistribution. The trouble is that there is no evidence at all this necessarily would be so.

It so happened that the British Government in 1886 decided for the first time to keep national statistics about the economy and the distribution of income. It is very interesting that if one looks at them one notes that today, at a time when the economy, I suppose, is about 300 per cent. or 400 per cent. above what it was at that time, the distribution of resources as between the various sections of the population, the bottom tenth, the upper quarter, or whatever it is, has virtually not changed at all. There is the most remarkable rigidity in the distribution of income and resources. There is no reason to suppose that if we were to enter an international community the international distribution of resources between the developed and developing countries would change. On this basis there is no evidence at all—unless there were specific policies brought into operation designed to achieve that distribution.

For that reason I believe that one must pay particular attention to what is at the heart of this argument. I accept what has been said that the crucial issue is access by the developing countries to various markets. It is important to emphasise right at the outset—though I shall be relatively brief at this hour—that the main question behind the Amendment is that the pattern of future trade between economic blocs and the developing world is not as altruistic as aid programmes are so often made out to be. Since our own growth prospects are inextricably bound up with the capacity of the developing countries to absorb an increasing proportion of our exports, it is just as much in our interests as in theirs to ensure the fullest and fastest development of their economy. This issue depends on the pre-existing trade relations between the developing world and either the United Kingdom or the EEC, and it depends even more on the relative merits of the alternative generalised schemes of preference.

9.30 p.m.

Over the last few years the developing countries' share of total external EEC trade has been falling and has represented a smaller proportion of total imports into the EEC than into this country. The main issue for the future is the relative advantage of the two alternative systems of trade preference.

The United Kingdom system offers the developing countries a range of goods on which tariffs will be reduced or eliminated without any restrictions on the basis of quota. The exports of developing countries are controlled by this country on the basis of the invocation of one of the safeguards or escape clauses of the United Kingdom Government. The EEC, on the other hand, bases its preference notoriously on tariff-free or tariff-reduced quotas.

It may not be immediately obvious which of these two systems offers the greater concessions to developing countries, since that depends upon on how often the escape clauses are invoked, but the United Kingdom Government have made it clear that the escape clauses will be invoked only exceptionally. If this promise is carried out, there can be little doubt that the system without quota ceilings is likely to offer far greater opportunities for extending trade in the developing countries.

The Community scheme suffers from three well-known disadvantages. First, there is the arbitrary nature of the fixing of the quota ceiling. Second, the quota stipulation sacrifices the widely accepted principle that competitive imports should be controlled only on the basis that they are causing or threatening to cause substantial damage to domestic industries. Third, the handling of quotas, as has been discovered by British Governments which have used this mechanism, is extremely cumbersome and is likely to lead to a great degree of bureaucratic proliferation, which is perhaps a curious preoccupation of the present Government.

Apart from these more general questions, there are difficulties in the operation of a quota system. The main EEC formula in 1971, whereby the basic quota equals the 1968 exports of developing countries into the Community plus a 5 per cent. supplementary quota of imports from all the developed world into the Community of that product, is heavily weighted against the growth potential of developing countries. The reliance on past data, plus the rapid growth of manufactures which has been achieved by many developing countries in recent years, means that the Community's preference scheme gives small opportunity for trade expansion for those imports. The normal growth of developing countries in the manufacturing sector over recent years has exceeded the tariff-free quota. For particular products this depends on the developing country's share in the Community's imports in the base year of 1968.

If the share were as high as 20 per cent., assuming the average rate of growth of imports for that product in the EEC throughout the Six were maintained, it would take only 1½ years before the imports of that product exceeded the quota. If on the other hand the level were rather lower, say 10 per cent., it would take only three years; but even if it were as low as 5 per cent. it would take only seven years before imports of that product exceeded the quota. This is a strong disincentive to long-term investment in manufacturing growth in the developing countries, given the restrictions that a powerful trading bloc would exercise.

The situation is even more serious than this. It is precisely those commodities in which the developing countries have the greatest interest and export capacity which are likely to exceed the import quota quickest. For semi-finished manufactures the actual imports from developing countries overtook the tariff-free quota even in the first year of operation of this scheme. Only in the case of machinery and transportation equipment and in other advance sectors has there been much leeway available for expansion of trade by the developing countries. It is in this category of commodity that developing countries are not competitive and will not be competitive for a great many years.

The essential point about the general use of tariff quotas is that they offer no incentive to new exporters or to new investors in developing countries, which is the basic aim of generalised trade preference, unless the duty-free quota is sufficiently larger than the prevailing trade flows to warrant the extra resources going into investment.

The case against the Community's generalised scheme of preferences and for the Amendment is that this crucial condition is not met. It is true that Community officials argue that quotas will not automatically be applied except for "sensitive" items. But since the quotas are closely defined, no sensible investor in the developing countries can regard such informal assurances as a ground for confidence in building up new investment, particularly in semi-finished manufactures.

The position today is that the Commonwealth developing countries enjoy tariff preference and to a great degree duty-free exemption in the British market. But if the Amendment is not accepted and the EEC tariff-free quota system is adopted, the most favoured nation duties will be applied to those Commonwealth products which exceeded the tariff quotas. These will apply to a great many, and perhaps to even most, of the products of the greatest export capacity of the developing countries. At the crucial margin, Commonwealth products would become subject to most favoured nation treatment, not to the duty-free treatment they get in the British market.

A further important point is that Britain has proposed to extend the duty-free treatment to the import of manufactures—apart from textiles and other sensitive items—from all developing countries. If this were carried through, there could be no doubt that the British generalised preference scheme would give a much bigger incentive to investment in developing countries than the Community's scheme is ever likely to generate at present.

In my view, it is no use living on a hope and a prayer, as the hon. Member for Lewisham, West (Mr. Selwyn Gummer) was only too ready to do. One looks at the system as it exists without assuming that there is any reason why it should change. The present structure of benefits clearly is favouring the British generalised scheme of preferences with regard to the developing countries.

If the Amendment is not accepted, it is all too likely that an enlarged EEC will tend to be more inward looking at least in the medium term, during the period of assimilation. This has given rise to justifiable fears about the trading prospects of the poor countries. The rather limited EEC scheme of preferences may then be used as a justification for continuing protectionism and as a pretext for halting the present pattern of trade liberalisation. Instead of moving towards a freer and better planned worldwide pattern of trade, there is a danger of proliferating limited schemes of trade preferences in which major powers like the United States, Japan and an enlarged EEC will dominate their respective regimes of tied trade partners. Not only might this exclude some of the most populous countries among the poor like India and Pakistan and act against our own long-term growth prospects in trade; it might also undermine the essential vision—essential from our own point of view just as much as from theirs—of an integrated international economy.


Mr. Grylls

When we debate overseas aid, there is always a very wide degree of agreement in principle. As my hon. Friend the Member for Lewisham, West (Mr. Selwyn Gummer) pointed out in his moving speech, the vast majority of hon. Members believe passionately, as Members of the House have for perhaps more than 100 years, that this country should continue to give as high a proportion as she is able in order to help the less-developed countries. In that respect, there is common ground between the two sides of the Committee.

I listened carefully to the speech of the right hon. Member for Lanark (Mrs. Hart) and found myself in sympathy with much of what she said. However, many of us felt a certain degree of annoyance to put it no higher, when she began to chide this side of the Committee and the Community for a lack of activity. When one looks back to the year 1968 and compares the respective performances of the then Labour Government and of the Community, one sees that the percentage of our gross national product spent in overseas aid was 1.04, whereas that of the Community was 1.2. It is a little smug of those who are against joining the Community to suggest that all that we have done is better than other countries have done. In many ways it is. However, that is not the case in terms of overseas aid. From its very early days since it really got going, the Community has made a major contribution to increasing prosperity in the under-developed parts of the world, and we shall wish to participate once we are inside the Community.

The hon. Member for Walthamstow, West (Mr. Deakins) began by telling us that it was immoral to think that a country can give more overseas aid only if it is itself getting more prosperous. I understand the moral feeling behind the hon. Gentleman's remarks. However, it is one thing to have a moral feeling. It is another to deal with practical facts. A moral feeling in this Committee will not help the under-developed countries.

All that we can do is press the Government of the day to ensure that they do better than they are doing now—

Mr. Deakins

Does the hon. Gentleman agree that another task facing those who think that this is a moral issue is to educate the electorate?

9.45 p.m.

Mr. Grylls

The more that we can encourage the electorate to persuade and push us as individual Members in turn to persuade and push the Government the better. But members of all political parties know that there are some people in the country at large who are less enthusiastic about overseas aid. Therefore, we must give a firm and clear lead. It is absolutely obvious to anybody who thinks about the matter in practical terms that we have to get the country expanding and more prosperous, and then we will be able to give more overseas assistance.

Let me give one comparison. If one asked someone, "Are you likely to earn a higher wage in an industry making a profit than you are in an industry making a loss?" the answer would be obvious. It is surely common ground that unfortunately some of the nationalised industries, which for so long have made losses, pay the worst wages. It is in the expanding, prosperous industries that people can earn real wages, because there is more to give away. Exactly the same applies with overseas aid.

In 1969 Germany's aid was 40 per cent, higher than Britain's. Yet, as we have heard in this debate, we have a greater colonial tradition than any other European country. During the period 1967 to 1969, Germany sent overseas aid of 3,200 million dollars, a considerable part of which was private investment capital. In the period 1967 to 1969, aid from the EEC countries out of public funds increased by 50 per cent., whereas aid from other western countries increased by only 42 per cent. Those figures prove one thing, that the Community is absolutely dedicated to expanding its aid and assistance to the rest of the world.

The right hon. Member for Lanark referred to the fact that a lot of the Community aid has gone to former French-African colonies and too little has gone to India and Pakistan. None of us will disagree with that. That is generally true. It is a natural consequence when one has regard to the present membership of the Community. As Members we will bring our influence to bear to see that aid is given to the parts of the world with which we have long and traditional ties. We have a powerful part to play in ensuring that aid will go to those countries.

The report of the Select Committee on Overseas Aid—a Committee which I joined at a late stage following the General Election and of which I was a member, unfortunately, for only a short time—and the expertise that is available will be a useful contribution to ensuring that overseas aid and general assistance from the expanded Community will go to the countries with which we have ties.

There is no difference between us. We want to see more aid given to countries like India and Pakistan, and I am confident that we shall see that happen.

Later in the debate there were a number of critical remarks about the Government and the result of the negotiations concerning the Asian countries. When one looks at the facts of the matter, one must come to a different conclusion. It was said that nothing had been done for India and Pakistan. However, to give one example, they have been given great assistance in respect of what is for them an important commodity, namely, tea, which will continue to have a Community tariff. Her Majesty's Government were able to negotiate that assistance for India, Pakistan and Ceylon.

Later in our proceedings we shall be talking about the Caribbean and other sugar agreements which have been generally accepted by the sugar-producing countries. The Chancellor of the Duchy of Lancaster played a considerable part in obtaining those agreements. However, as is well known, the rest of the Asian Commonwealth countries are able to negotiate their own association agreements under Part 4 of the Treaty of Rome, and many are now doing so. It is not up to us to negotiate those agreements for them; the door is open, and many are going in.

Hong Kong particularly will be assisted within the scope of a generalised tariff agreement. It is not right to say that the Asian Commonwealth has been neglected. It is interesting to look back to the Singapore Commonwealth Conference which the British Prime Minister attended. It was quite clear that there was no criticism from any Commonwealth country. Not one Commonwealth country said to my right hon. Friend, "Please do not join. We do not want you to join. It will be very damaging to us." Some of them asked for special assistance, and this my right hon. and learned Friend the Chancellor of the Duchy of Lancaster was able to negotiate successfully.

I believe that as a result of our membership of the Community we shall see a further leap forward in the contribution that it can make and that the whole Committee sincerely wishes to see. As my hon. Friend the Member for Lewisham, West said, this is perhaps one of the most exciting prospects of membership of the Community.

I take the point made by the hon. Member for Walthamstow, West that to think only of our own prosperity as an individual country is not a matter of which to be proud. We believe that this is essential, too, because we represent our constituents. However, it is something of which to be proud to say that we are interested in doing something for the other half of the world which is so much less well off than ourselves. This is surely following the proud tradition we have maintained throughout the last century and this century in assisting those countries we want to help. I firmly believe that membership of the Community provides the best way for us to play a positive part in helping other countries.

Therefore, I ask the Committee to reject the Amendment.

Mr. Noble

I should like to start by referring to the detail of the Amendment and then, as before, answer some of the questions which have ranged rather wider.

I cannot recommend the Committee to accept the Amendment because it runs counter to the provision made in Schedule 3, Part I, for the eventual repeal of Sections 1 and 2 of the Import Duties Act, 1958. We shall continue to use these powers, as amended by the Bill, to establish and charge our transitional tariffs. But once this process is complete and customs union is achieved, there will be no effective scope for the independent exercise of a power to impose protective duties as envisaged in Section 1 or to afford preference to Commonwealth goods as envisaged in Section 2. The common customs tariff will then apply uniformly in the United Kingdom as in other member States. To this extent it will no longer be appropriate to retain Sections 1 and 2.

This is the essence of the position, which has long been known to everybody. Joining a customs union inevitably means pooling tariff autonomy, and the CCT as a whole was never a negotiating issue. It was made clear by both Governments before negotiations started that we accepted the CCT, and it has always been recognised by ourselves and the Commonwealth that our joining the EEC necessarily meant that we should have to phase out Commonwealth preference. However, we have negotiated transitional arrangements to ensure that all concerned will be able to adjust gradually to these consequences; and special arrangements, which are set out in detail in the Treaty of Accession, have also been negotiated which will help many of these countries.

Concerning UNCTAD preferences in the 1971 Order, our membership of the Community does not entail any basic change. We cannot maintain them in exactly their present form. That would be incompatible with our Treaty obligations which are to apply the enlarged Community's scheme from 1st January, 1974.

The details of the enlarged Community scheme remain to be settled, but in the discussions which will take place both we and the Community will be seeking scope for improving the benefits which developing countries can derive from these preferences, though in doing so it is necessary to maintain some balance between the needs of our own domestic industries and our desire to help the developing world.

I should now like to deal with some of the points raised in this interesting debate. The right hon. Lady the Member for Lanark (Mrs. Hart) asked what consultations we have had with our dependent territories in the West Indies about whether they want an association agreement. The answer is that, although we are responsible for their external relations, it is entirely up to them whether they want a Part IV relationship with the Community—that is, the equivalent for dependent territories of a Yaoundé type relationship for independent territories. I need hardly add that, although the decision will be entirely for them, we shall continue to make available to them any guidance or assistance we can in helping them to reach their decision.

Mrs. Hart

The right hon. Gentleman has not quite taken the point I put to him. I was not concerned with the dependent territories; one well understands their position. There is a confusion because of the use of the phrase "Associated States", like the Leeward and Windward Islands, which have a different relationship from that of the dependent territories about which we have never heard throughout the negotiations.

Mr. Noble

I beg the right hon. Lady's pardon if I missed the point she made. If I can get the answer to it before I finish, I will give the answer to her. If not, I will give it to her at the earliest possible moment.

Mr. Arthur Lewis

She will have to sing for it, like the rest of us.

Mr. Noble

If there is not an answer nobody can give it to the right hon. Lady.

The right hon. Lady said, in her usual way of working up to slight bitterness before she sat down, that the Government's good intentions were a lot of hypocrisy. So was some of her speech. She was trying to have a good many things both ways. I remember very well, when the UNCTAD conference was debated some weeks ago, that she complained strongly that the United Kingdom Government had been less forthcoming than the EEC Governments. She mentioned particularly the French proposals and said that what I had been saying and doing was infinitely inferior. Tonight she has been telling me how terribly badly the French were doing and how much better I am.

Mrs. Hart

On monetary matters.

Mr. Noble

Perhaps on monetary matters, but that was not clear from what she said. As on a number of previous occasions, the right hon. Lady wants to have the argument both ways. This is the prerogative of all ladies, and I do not want to deny it to her. [Interruption.] I should know, having more daughters than most Members.

I should like to take up some of the points the right hon. Lady made about duty quotas and the EEC preference scheme. She may not be aware that all the ceilings in the present scheme will be recalculated after our accession. The new ceilings will reflect the very large amounts of our existing trade with the countries of Asia, all the imports covered by these ceilings will be free of duty, and there will be an annual growth in all these ceilings.

I have now had, through the appropriate messenger, the answer to the question which the right hon. Lady raised earlier. The answer is exactly the same as that which I gave on dependent territories.

Mr. Julius Silverman

What was it?

Mr. Noble

I do not think that the hon. Gentleman wants me to read it out again. He will be able to read it in HANSARD tomorrow.

We had the privilege and pleasure of listening to an excellent speech by my hon. Friend the Member for Lewisham, West (Mr. Selwyn Gummer) about which there has been much favourable comment from both sides of the Committee. I am sorry that I missed part of it because it was essential that I should use some of my single, if not my double, stomach to get a little food during the debate. He made it clear that there has been a considerable and gratifying change on the part of the Community over the last number of years, and particularly over the last five or six years, in its attitude to helping the developing countries.

10.0 p.m.

I think that it was the hon. Member for Oldham, West (Mr. Meacher) who kept referring to a mystical date—I am not certain whether it was 1868 or 1886—and say that there had been no change since then. That may apply to certain things, but it does not apply to the attitude of the Community or of this country to providing aid to developing countries. There have been considerable changes, and I do not think that we should try to deny that they are there or to make things more difficult by being rude about the advances that are being made.

The hon. Member for Birmingham, Aston (Mr. Julius Silverman) got the point right, because he said that there was a high degree of agreement on both sides of the Committee that what we wanted to do was to give a great deal more aid to the developing countries. I think that that is true of almost the whole of the debate, and I am grateful to my hon. Friend the Member for Lewisham, West for what I thought was a good contribution.

The hon. Lady the Member for Eton and Slough (Miss Lestor) made a statement about Botswana, Lesotho and Swaziland. I am sorry to have to tell the hon. Lady that she got it entirely and absolutely wrong, because all three have been offered association under Protocol 22 of the Act of Accession, as has the remainder of Commonwealth Africa.

It is true that the Protocol refers to the need to find adequate solutions to the question of origin rules, but the reason for this is to achieve precisely what the hon. Lady wants, which is to ensure that South African goods are not diverted through these countries to get the benefit of preferential access to the EEC. That is the situation as it is today, not that which she described to the Committee.

The hon. Lady said—and I have heard the argument put forward on many occasions in other debates—that she had a strong feeling of worry, which is shared in varying degrees by hon. Members on both sides of the Committee, about the place of investment in attempts to help build up developing countries. The hon. Lady felt that the situation was unsatisfactory, and she quoted the late Chairman of ICI who was putting up a perfectly good and practical case that if it were a private company that was investing its shareholders' money abroad they should expect to get reasonable terms for the money that was invested. That is sensible and right.

My hon. Friend the Member for Portsmouth, Langstone (Mr. Ian Lloyd), who has a good deal of experience in this matter, made an excellent speech explaining the benefits which can come from investment, and very often do, if it is wisely done, and if it is done in the way that is wanted by a large number of developing countries, in consultation with their Governments in the spheres in which they want investment for one reason or the other.

It is, I think, doing a disservice to trying to help the development of many of these countries for someone to go round saying that all investment is wicked and it is particularly wicked if it makes a profit. It may be immoral, as the hon. Member for Walthamstow, West (Mr. Deakins) said, to have a feeling that one has to make money before one can give more to other countries, but at least he is safe. There will be no charge of immorality against any of his right hon. Friends for the period when they were running the country.

I think that I have answered the main points. I conclude by saying clearly and categorically, as I have on many other occasions, that we have every intention, and probably a great likelihood of success, of increasing our aid to the developing countries, sensibly and wisely, over the next few years. We have complete confidence. It is no use for any hon. Member on the Opposition benches saying, "Why do you have confidence? We do not." We have confidence that European countries are willing and ready to work with us to achieve this.

It is because the Amendment is at fault and because I believe that we shall be able in the EEC to achieve a greater help for the developing countries that I ask my colleagues to resist the Amendment.

Mr. Shore

My right hon. Friend the Member for Lanark (Mrs. Hart), with her great knowledge and concern on this subject, certainly launched us on a most valuable debate. Our regret is that it has been possible to have this debate only at this stage of our long discussions about entry, and then for only half a day. Our feelings of regret will be shared widely on all sides of the Committee, not least by the surprisingly large number of hon. Members who have participated in the debate. This matter is of very great concern. I shall say something rather less friendly shortly.

However, I would not wish to take issue with the general expressions of concern that have come from all quarters, except to say that they are certainly justified. This is the subject which I want to develop. I can best do that by referring to three connected matters which are of particular concern to us and which have come out in the debate.

The first matter is the central one affected by the Amendment, that is, the particular method of according preference that we shall pursue in relation to the developing countries if we join the European Communities. The operative words here are contained in Protocol No. 23 of the Treaty of Accession, at page 100. The first few words of this commendably brief protocol state: The new Member States are authorised to defer until 1 January 1974 the application of the generalised tariff preference scheme applied by the European Economic Community to products originating in the developing countries. The operative words there, obviously, are authorised to defer until 1 January 1974". It is against that background that the Committee must interpret the not altogether clear sentences of the Minister for Trade. I think that I am right in saying that he thinks that there may be some minor scope for talks and possibly minor changes in the Communities' preference scheme, including a recalculation of their quota system and the quotas that will apply. But I do not think that the right hon. Gentleman would dissent from the view that basically he is confirming to the Committee that Britain will be adopting the system, in essence, which is operating in the European Communities today.

Mr. Noble

As long as the right hon. Gentleman does not put into my mouth words saying that the only changes we are aiming for are very minor and small ones. We may, we hope, get some quite important ones.

Mr. Shore

I am glad to hear that. Perhaps at a later stage I shall say to the Minister for Trade, to make the most obvious point, that in his endeavours to change those parts of the European system of preference he dislikes, he may find an enormous help from this Amendment. He would be in a much more powerful position to get his way in the Six with the benefit of the Amendment.

I have only a few comments to make on the relative merits of the British system of generalised preference compared with the system now operating in the Six and which we have substantially to adopt. It appears to be the general view of those who have studied these matters that the British system is a more open one and a more generous one to the goods of developing countries than is the one in practice on the mainland of Europe. There may well be good reasons for this. They may be the reasons advanced by one hon. Member opposite—that, given the background of the Six and their less open relationship with developing countries in the past, this represents for them an important step forward. I do not seek to decry it on those grounds.

My point is that the consensus is that it is not as good a system as the one which we now operate and which it is proposed that we should abandon. I quote on this one voice which I know carries some weight, particularly with pro-Market Members. I refer to my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins), who in a speech made not long ago on the whole subject of relationships with the developing world said this of the EEC quota system: This came into effect last summer and is to last 10 years. It sets tariff-free quotas for each product. The quotas are set so low that they allow a rate of growth of imports less than that at which imports from poor countries have been growing, anyway. Such a scheme if it were applied by all the rich countries would be only a small improvement on the present situation. That is a fair and accurate statement of what is involved.

I hope that I have established that this in itself in a serious matter, because what we are talking about is the conscious adoption by Britain of a system of trade with the developing world which is known to be less generous than the system which we operate today. This is what has emerged from our discussions so far.

We must now take with this what appears to be a matter of hardly lesser importance. Although under the Treaty of Accession some arrangements are available to Africa and Caribbean countries, those arrangements are not available to any part of the Asian Commonwealth. Subject to negotiation, African and Caribbean countries, and I believe one or two other smaller territories elsewhere, could make various kinds of association agreements with an enlarged Community, whether they be of the Yaoundé type, the Arusha type or more straightforward trade agreements.

If they take the form of ordinary trade agreements, there would not even be an obligation to report to the House of Commons what the content of those trade treaties were. Only if they were treaties which Britain as a Member State signed along with other countries would they be treaties which would be put before the House of Commons in any form under Clause 1. However, that is a recollection from the past.

As to the agreements which are available to African and Caribbean countries, I said that they "could" become available. It is highly unlikely that all, or indeed even a majority, of the countries listed in Annex VI to which the offer is available will wish to avail themselves of the opportunities of concluding either a Yaoundé-type agreement or an Arusha-type agreement.

10.15 p.m.

They may well wish not to do so partly because of the much criticised reverse preference arrangements which have been referred to on both sides of the Committee, arrangements which have been much criticised all over the world. They would be bound to concede these arrangements to the Community but they also may not wish to be brought into what many of the African States certainly regard as a political and economic sphere of influence which the Community is developing. Nor is it certain that they would be welcome as new members in any Yaoundé- or Arusha-type agreement with the Six. In a sense it works both ways.

My right hon. Friend the Member for Lanark pointed out that there could be certain obstacles in the process of becoming an associated overseas territory, obstacles created by the existing member countries of the OAT convention which clearly have certain interests. Those interests are embodied in the Treaty of Accession, in Protocol No. 22, where it says: The accession of the new Member States to the Community and the possible extension of the policy of association should not be the source of any weakening in the Community's relations with the Associated African and Malagasy States which are parties to the Convention of Association signed on 29 July 1969. I am not raising this as a point to which we should strongly object. It is a very natural consideration. These countries are already in a preference arrangement and quite clearly if they felt the degree of access or the conditions that obtain would be diminished by the arrival of new members they would not be very anxious to have those new members in.

Mr. Rippon

The right hon. Gentleman will appreciate that the offer of either of the two forms of association or a trade agreement is quite firm. There is no question of anyone raising an objection on the Community's side. We do no complain about assurances to the existing members but any renegotiated agreement would apply equally to all the members.

Mr. Shore

I am not disputing the fact that it is on offer. But there would not necessarily be a very warm welcome from all the existing members. There are cerain problems which clearly have to be faced. Many of those to whom the offer is made have very serious reservations, as we know.

We have not been given much information about the thinking of African and Annex VI countries about their own future and about their views of the arrangements which are on offer. But, whatever may be said about the African Commonwealth countries, the countries of Asia are out in the cold. This is a matter of very great concern, and so it should be. In future they will face far more difficult trading problems than they already experience. No one should doubt just how important the British market is to the countries of Asia, and above all to the Asian Commonwealth. I do not think that every hon. Member is necessarily aware that Britain alone takes virtually twice as much by value of the exports of India as the whole of the Common Market put together. The same is true of Ceylon and Singapore, while in the case of Pakistan, Bangladesh and Hong Kong, the United Kingdom market is equal in terms of exports to the whole of the Six put together. Only Malaya sells more to the Community than she exports to Britain.

The whole of the Asian Commonwealth sells to Britain alone more than it sells to the 185 million people of the EEC. Therefore, it matters enormously to the Asian Commonwealth countries, containing as they do nearly 700 million people, more than three quarters of the whole Commonwealth, that their British market should be preserved. The British market is in many ways as important to the countries of the Asian Commonwealth as the British market in food is to the old Commonwealth countries of Canada, Australia and New Zealand.

In the light of the facts, that we are bound to adopt a less favourable, more restrictive policy on trade if we accept the general preference system of the Community, as we are pledged to do, and that we are a major market for the Asian countries, more important than the Six put together, we begin to see at least the possibility of an immense amount of damage being inflicted, by the arrangements we are entering into, upon millions of people with whom we have been in the closest connection, and to whom many hon. Members on both sides feel a great obligation.

Why is it that Britain can and does provide a more important market for the whole of the Asian Commonwealth than all the countries of the Common Market? We should not necessarily congratulate ourselves too much on the fact. It is partly a matter of history, but history has a great influence on all of us. Originally, when we built up our overseas empire in Asia, the market there was available above all for British goods, but over the course of time the reverse process of manufacture and selling back to the British market, the Imperial market as it then was, took place. The result is clear. Any Member for a constituency whose workers are involved in textiles need not be told about the two-way nature of the trade relationship that has been built up over the years between Asian countries and this country. About half the textiles used and worn by the people of this country are manufactured by Asians in Asia, whereas in France I doubt whether it is 1 per cent.

We need not allot blame and praise for the situation. It is a fact now built into the structure, habits and trade pattern of this country. It is that pattern, so beneficial to the Asian countries, which is to be disrupted or at least put into great threat by the arrangements we are deliberately, knowing what is involved, engaging in and approving in the Treaty of Accession and the Bill, which gives it form. I regard as one of the worst features of the Treaty the Government's failure to secure the interests of the Asian Commonwealth countries, or even to try to safeguard them. All that the Government got was a perfunctory, indeed, derisory, protocol. It was not even a protocol, in fact, but a joint declaration of intent of three clauses on page 117 of the Treaty.

Mr. Rippon

I am glad the right hon. Gentleman referred to that. It is one of a series of declarations of intent in the Final Act of the Treaty, and a very important one. So far from being perfunctory, it expressly declares the intention of the enlarged Community not merely to safeguard but to extend, as far as lies within our power, trade with the Asian Commonwealth and to examine immediately after accession any problems that may arise. This was reported to the House, and was accepted by the Asian Commonwealth.

Mr. Shore

I am always slightly encouraged by what the right hon. and learned Gentleman tells me but never persuaded. I am bound to listen in these matters to voices which, above all, come from Commonwealth Asian countries. We all recall the speeches made on behalf of India at Santiago recently and by responsible people in Delhi. On 26th May, The Times reported that the Indian Foreign Trade Ministry estimated that 42 per cent. of India's exports to Britain would be affected unless solutions were found before we accepted these arrangements. The Ministry made the point that it was concerned that there had been no mention in the current negotiations of the comprehensive trade arrangements which, in the 1961–62 negotiations, were very much a feature and were greatly emphasised.

Mr. Rippon

This is partly flowing from the hand we picked up. The right hon. Gentleman will recall that it was the present Leader of the Opposition who said that it was a mistake in the earlier negotiations to try to negotiate commodity by commodity and that we should concentrate the negotiations this time on a minimum of major matters. What we have sought is comprehensive security for the Asian Commonwealth so that these matters can be dealt with as necessary, commodity by commodity.

Mr. Shore

The trouble is that, like so many of the interests that need to be secured—including our own—these arrangements, if they are to be secured at all, will be secured after entry and not before.

I turn to the third and last of the concerns which have been expressed in the debate. This is that in trade, as in aid, the Community's arrangements are focused on African countries, in particular those historically connected with France. They virtually exclude, as does the Community's aid programme, the developing countries of Asia and elsewhere, which have much more numerous populations than the developing countries in Africa.

A central point of the debate has been the question of whether our aid contribution can be expected to increase or decrease or to stay the same if we enter the EEC. There is a simple and common sense approach to this, and I am surprised that it took many hon. Members so long to reach it. But the hon. Member for Lewisham, West (Mr. Selwyn Gummer) got there in the end. The record of the Six in terms of aid, although not in terms of trade, has been relatively good in recent years because most of them enjoyed a favourable period in terms of their balance of payments and trade surpluses.

Our own record has not been favourable in recent years because our trading surpluses for a great number of years have been virtually non-existent. I know that this is not wholly an excuse and that some of my hon. Friends would not accept that we should ever allow such a factor in our determination of aid. Thus the whole argument about how much money one can give in aid relates to how much one has.

The argument comes down to simple assertion and wish and hope—faith, hope and Community spirit!—that somehow or other we shall be richer if we join the EEC. But those who argue in that way must explain how we shall be able to pay out more in terms of a genuine overseas aid programme when we shall have to pay £750 million over the next five years. By the end of this decade, we shall certainly be paying out 1 per cent. of our gross national income—we shall reach that target—but we shall not be paying it to the developing countries. We shall be paying it under the treaties and agreements in order to meet the burdens of the Community.

10.30 p.m.

That is where the 1 per cent. will go and we have now to be convinced that

we can actually pay the annual contribution to Europe and pay more to the developing countries. I say that there is not a shred of evidence to suggest that we shall be in such a healthy position. I wish it were true, but it is no good saying to us that people can just assume that this will be so, particularly when it comes on top of the immense damage being deliberately inflicted upon the trade of many of the poorer Commonwealth countries in Asia and elsewhere.

The Government should accept this Amendment. We are always being told that once we are in there are so many things they will be able to do, agreements that will not be allowed to be cemented and matters that will be shaped by us, because they will report back before final decisions are made, so that we will be able to interpose the will of the Commons. I say that here is a splendid opportunity. It is not so difficult this time, because by voting for the Amendment they would do what they would no doubt like to be able to do after entry, that is to change what they know to be a bad system of trade for a better and a more generous system for the developing countries.

Question put, That the Amendment be made:

The Committee divided: Ayes 184, Noes 195.

Division No. 236.] AYES [10.32 p.m
Allaun, Frank (Salford, E.) Dalyell, Tam Griffiths, Will (Exchange)
Archer, Peter (Rowley Regis) Davidson, Arthur Hamilton, James (Bothwell)
Armstrong, Ernest Davies, Denzil (Llanelly) Hamilton, William (Fife, W.)
Ashley, Jack Davies, Ifor (Gower) Hamling, William
Atkinson Norman Davis, Terry (Bromsgrove) Hannan, William (G'gow, Maryhill)
Bagier, Gordon A. T. Deakins, Eric Hardy, Peter
Barnett, Guy (Greenwich) Dell, Rt. Hn. Edmund Harper, Joseph
Barnett, Joel (Heywood and Royton) Dempsey, James Hart, Rt. Hn. Judith
Benn, Rt. Hn. Anthony Wedgwood Doig, Peter Horam, John
Bidwell, Sydney Dormand, J. D. Houghton, Rt. Hn. Douglas
Biffen, John Duffy, A. E. P. Hughes, Rt. Hn. Cledwyn (Anglesey)
Bishop, E. S. Dunn, James A. Hughes, Mark (Durham)
Blenkinsop, Arthur Dunnett, Jack Hutchison, Michael Clark
Boardman, H. (Leigh) Eadle, Alex Janner, Greville
Body, Richard Edelman, Maurice Jay, Rt. Hn. Douglas
Booth, Albert Ellis, Tom Jenkins, Hugh (Putney)
Brown, Hugh D. (G'gow, Provan) English, Michael John, Brynmor
Buchan, Norman Evans, Fred Johnson, James (K'ston-on-Hull, W.)
Butler, Mrs. Joyce (Wood Green) Ewing, Henry Johnson, Walter (Derby, S.)
Campbell, I. (Dunbartonshire, W.) Faulds, Andrew Jones, Barry (Flint, E.)
Carmichael, Neil Fisher, Mrs. Doris (B'ham, Ladywood) Jones, Dan (Burnley)
Carter, Ray (Birmingh'm, Northfield) Fitch, Alan (Wigan) Jones, Rt.Hn.Sir Elwyn (W.Ham,S.)
Clark, David (Colne Valley) Fletcher, Raymond (Ilkeston) Jones, Gwynoro (Carmarthen)
Cocks, Michael (Bristol, S.) Fletcher, Ted (Darlington) Jones, T. Alec (Rhondda, W.)
Cohen, Stanley Foot, Michael Judd, Frank
Coleman, Donald Freeson, Reginald Kaufman, Gerald
Concannon, J. D. Gilbert, Dr. John Kinnock, Neil
Crosland, Rt. Hn. Anthony Ginsburg, David (Dewsbury) Lambie, David
Crossman, Rt. Hn. Richard Grant, George (Morpeth) Lamborn, Harry
Cunningham, Dr. J. A. (Whitehaven) Griffiths, Eddie (Brightside)
Lamond, James Mulley, Rt. Hn. Frederick Sillars, James
Lee, Rt. Hn. Frederick Murray, Ronald King Silverman, Julius
Leonard, Dick Oakes, Gordon Skinner, Dennis
Lestor, Miss Joan Ogden, Eric Smith, John (Lanarkshire, N.)
Lewis, Arthur (W. Ham, N.) O'Halloran, Michael Spearing, Nigel
Lewis, Ron (Carlisle) O'Malley, Brian Spriggs, Leslie
Lipton, Marcus Orbach, Maurice Stallard, A. W.
Lomas, Kenneth Orme, Stanley Stewart, Donald (Western Isles)
Loughlin, Charles Oswald, Thomas Stonehouse, Rt. Hn. John
Lyon, Alexander W. (York) Paisley, Rev. Ian Strang, Gavin
Lyons, Edward (Bradford, E.) Parker, John (Dagenham) Taverne, Dick
Mabon, Dr. J. Dickson Peart, Rt. Hn. Fred Thomson, Rt. Hn. G. (Dundee, E.)
McBride, Neil Pendry, Tom Tinn, James
McElhone, Frank Pentland, Norman Torney, Tom
Mackenzie, Gregor Powell, Rt. Hn. J. Enoch Turton, Rt. Hn. Sir Robin
Mackie, John Prentice, Rt. Hn. Reg. Urwin, T. W.
McMillan, Tom (Glasgow, C.) Prescott, John Varley, Eric G.
McNamara, J. Kevin Price, J. T. (Westhoughton) Wainwright, Edwin
Mahon, Simon (Bootle) Probert, Arthur Walden, Brian (B'm'ham, All Saints)
Marks, Kenneth Rees, Merlyn (Leeds, S.) Walker, Harold (Doncaster)
Marquand, David Rhodes, Geoffrey Walker-Smith, Rt. Hn. Sir Derek
Marshall, Dr. Edmund Roberts, Rt.Hn.Goronwy (Caernarvon) Weitzman, David
Marten, Neil Roderick, CaerwynE. (Br'c'n & R'dnor) Wellbeloved, James
Meacher, Michael Roper, John Wells, William (Walsall, N.)
Mellish, Rt. Hn. Robert Ross, Rt. Hn. William (Kilmarnock) White, James (Glasgow, Pollok)
Mendelson, John Rowlands, Ted Whitlock, William
Millan, Bruce Russell, Sir Ronald Wilson, Alexander (Hamilton)
Milne, Edward Sandelson, Neville Wilson, William (Coventry, S.)
Mitchell, R. C. (S'hampton, Itchen) Sheldon, Robert (Ashton-under-Lyne) Woof, Robert
Moate, Roger Shore, Rt. Hn. Peter (Stepney)
Morgan, Elystan (Cardiganshire) Short, Rt.Hn.Edward (N'c'tle-u-Tyne) TELLERS FOR THE AYES:
Morris, Alfred (Wythenshawe) Silkin, Rt. Hn. John (Deptford) Mr. Walter Harrison and
Morris, Charles R. (Openshaw) Silkin, Hn. S. C. (Dulwich) Mr. John Golding.
Adley, Robert Finsberg, Geoffrey (Hampstead) King, Evelyn (Dorset, S.)
Alison, Michael (Barkston Ash) Fisher, Nigel (Surbiton) King, Tom (Bridgwater)
Allason, James (Hemel Hempstead) Fletcher-Cooke, Charles Kinsey, J. R.
Archer, Jeffrey (Louth) Fookes, Miss Janet Kirk, Peter
Astor, John Fortescue, Tim Knight, Mrs. Jill
Atkins, Humphrey Fowler, Norman Knox, David
Awdry, Daniel Fox, Marcus Lambton, Lord
Baker, Kenneth (St. Marylebone) Fry, Peter Lamont, Norman
Balniel, Rt. Hn. Lord Gibson-Watt, David Legge-Bourke, Sir Harry
Beamish, Col. Sir Tufton Glyn, Dr. Alan Le Marchant, Spencer
Bennett, Sir Frederick (Torquay) Goodhew, Victor Lloyd, Ian (P'tsm'th, Langstone)
Benyon, W. Gower, Raymond Longden, Sir Gilbert
Berry, Hn. Anthony Grant, Anthony (Harrow, C.) Luce, R. N.
Biggs-Davison, John Green, Alan MacArthur, Ian
Blaker, Peter Grieve, Percy McLaren, Martin
Boscawen, Robert Griffiths, Eldon (Bury St. Edmunds) Maclean, Sir Fitzroy
Bowden, Andrew Grylls, Michael Mather, Carol
Bray, Ronald Gummer, J. Selwyn Maudling, Rt. Hn. Reginald
Brinton, Sir Tatton Hall, Miss Joan (Keighley) Mawby, Ray
Burden, F. A. Hall, John (Wycombe) Maxwell-Hyslop, R. J.
Butler, Adam (Bosworth) Hall-Davis, A. G. F. Meyer, Sir Anthony
Carlisle, Mark Hamilton, Michael (Salisbury) Mills, Peter (Torrington)
Carr, Rt. Hn. Robert Hannan, John (Exeter) Mills, Stratton (Belfast, N.)
Channon, Paul Harrison, Col. Sir Harwood (Eye) Miscampbell, Norman
Chapman, Sydney Haselhurst, Alan Mitchell, Lt.-Col.C. (Aberdeenshire,W)
Chataway, Rt. Hn. Christopher Hastings, Stephen Mitchell, David (Basingstoke)
Churchill, W. S. Havers, Michael Money, Ernle
Clegg, Walter Monks, Mrs. Connie
Cockeram, Eric Hawkins, Paul Monro, Hector
Coombs Derek Higgins, Terence L
Cooper, A. E. Hiley, Joseph Montgomery, Fergus
Cormack, Patrick Hill, James (Southampton, Test) More, Jasper
Costain, A. P. Holland, Philip Morgan, Geraint (Denbigh)
Crowder, F. P. Holt, Miss Mary Morrison, Charles
d'Avigdor-Goldsmid, Maj.-Gen.James Hordern, Peter Mudd, David
Dean, Paul Hornsby-Smith, Rt.Hn.Dame Patricia Murton, Oscar
Deedes, Rt. Hn. W. F. Howe, Hn. Sir Geoffrey (Reigate) Neave, Airey
Digby, Simon Wingfield Howell, Ralph (Norfolk, N.) Noble, Rt. Hn. Michael
Dodds-Parker, Douglas Iremonger, T. L. Normanton, Tom
Dykes, Hugh Jessel, Toby Nott, John
Eden, Sir John Johnson Smith, G. (E. Grinstead) Oppenheim, Mrs. Sally
Edwards, Nicholas (Pembroke) Johnston, Russell (Inverness) Osborn, John
Elliot, Capt. Walter (Carshalton) Jopling, Michael Owen, Idris (Stockport, N.)
Elliott, R. W. (N'c'tle-upon-Tyne,N.) Kaberry, Sir Donald Page, Rt. Hn. Graham (Crosby)
Eyre, Reginald Kellett-Bowman, Mrs. Elaine Parkinson, Cecil
Fenner, Mrs. Peggy Kershaw, Anthony Peel, John
Fidler, Michael Kimball, Marcus Percival, Ian
Pike, Miss Mervyn Sandys, Rt. Hn. D. Thompson, Sir Richard (Croydon, S.)
Price, David (Eastleigh) Sharples, Richard Thorpe, Rt. Hn. Jeremy
Proudfoot, Wilfred Shaw, Michael (Sc'b'gh &' Whitby) Trafford, Dr. Anthony
Pym, Rt. Hn. Francis Shelton, William (Clapham) Tugendhat, Christopher
Quennell, Miss J. M. Simeons, Charles Waddington, David
Raison, Timothy Sinclair, Sir George Walker, Rt. Hn. Peter (Worcester)
Ramsden, Rt. Hn. James Skeet, T. H. H. Wall, Patrick
Redmond, Robert Smith, Dudley (W'wick & L'mington) Ward, Dame Irene
Reed, Laurance (Bolton, E.) Soref, Harold Warren, Kenneth
Rees, Peter (Dover) Speed, Keith Weatherill, Bernard
Renton, Rt. Hn. Sir David Spence, John White, Roger (Gravesend)
Rhys Williams, Sir Brandon Stainton, Keith Wilkinson, John
Ridley, Hn. Nicholas Stanbrook, Ivor Winterton, Nicholas
Rippon, Rt. Hn. Geoffrey Steel, David Worsley, Marcus
Roberts, Michael (Cardiff, N.) Stewart-Smith, Geoffrey (Beiper) Wylie, Rt. Hn. N. R.
Roberts, Wyn (Conway) Stodart, Anthony (Edinburgh, W.) Younger, Hn. George
Rodgers, Sir John (Sevenoaks) Stokes, John
Rossi, Hugh (Hornsey) Taylor, Sir Charles (Eastbourne) TELLERS FOR THE NOES:
Rost, Peter Temple, John M. Mr. Hamish Gray and
St. John-Stevas, Norman Thomas, John Stradling (Monmouth) Mr. Kenneth Clarke.

Question accordingly negatived.

Mr. Charles Fletcher-Cooke (Darwen)

I beg to move Amendment No. 190, in page 7, line 44, leave out from 'action' to 'and' in line 45.

The First Deputy Chairman

It will be for the convenience of the Committee to take with it the following Amendments: No. 191, in page 8, line 7, leave out 'may' and insert 'shall'.

No. 192, in page 8, line 10, leave out 'or practice'.

Mr. Fletcher-Cooke

The three Amendments are for the purpose of probing the drafting of the Bill, in particular of subsection (5) which deals with the dispensing power. Anyone with a sense of history will know that the dispensing power of the Government must be closely scrutinised.

Here, the Secretary of State is given a dispensing power to relieve from import duties in certain circumstances. I am questioning the circumstance in subsection (6), namely, whether the Secretary of State, that is to say the Executive, should be allowed to dispense from import duties— whether or not for conformity with Community obligations". My question is whether he should have this power of dispensation by regulation if it is not for conformity with Community obligations. I can understand if it is for conformity with Community obligations. Under the principle of the Bill, which I greatly support, he must be allowed this power; that is part of the bargain. But if it is not for conformity with Community obligations, why should he be allowed by mere regulation to dispense from import duties?

10.45 p.m.

That is not a purely theoretical question. As hon. Members who have been attending our night classes will know, the ordinary citizen has a right of access to the courts for breach of Community obligations. I instance, for example, the case of a manufacturer of some manufactured goods in the United Kingdom who finds that the Secretary of State has, by the exercise of dispensing power, not for conformity of obligations, lowered the tariff. He would therefore have a right of access to the courts. He could say that this was in conflict with Community obligations and the courts would be obliged, under the previous Clauses of the Bill, which we have discussed, to grant him relief.

They would say that this lowering of the tariffs was not for conformity of Community obligations, and so was in breach of Community obligations, and he, whose business was being jeopardised by the lowering of the tariffs against third nations, would have a right of action in the courts.

Therefore, I ask whether it is either necessary or desirable, or even in consonance with our Community obligations, which we have signed, to put the words whether or not for conformity with Community obligations in subsection (6).

I shall be very brief because these were probing Amendments, put down long before the timetable and before the matter became one of great principle, long before one realised that the Committee stage was quite what it has turned out to be.

The second Amendment is on subsection (7) which deals with the impact of Community law on our own law. As a loyal subscriber to the view that we should join the Community, the word "may" in line 7 of page 8 to me sticks out rather like a sore thumb because, as so often here, one feels, as a loyal subscriber, that it should be "shall" and that we should, rather than having a discretion in the matter, give effect as (7)(a) prescribes: in accordance with such arrangements as they may direct or by regulations prescribe, to any Community requirement … We should do it. We have no discretion, and I should like to know why "shall" is not there.

The force of this argument is somewhat diminished by the next words after "Community requirement" which are the subject of my third Amendment. It is not merely "Community requirement" but "or practice". I should like to ask my right hon. and learned Friend the Member for Hexham (Mr. Rippon) what "practice" means there. I can well understand that if it is a Community requirement, we have a duty to make arrangements, to give effect, in accordance with such arrangements as they may direct or by regulations prescribe, to any Community requirement", but when we come to "or practice" that word has not yet appeared in our discussions. This is an important word. It is not an Act, not a regulation, not a directive, not in those words we have hitherto discussed, but something beyond that.

If I move my second Amendment which requires us to do these things, I shall do so only on the understanding that "or practice" is removed because, as I have said over and over again, I do not believe in giving more than we have to give. I do not believe, particularly, in the House giving more to the executive than we have to give. The word "practice" raises my hackles and I wish to know what it comprises. If it comprises as much as I think, I should not like to move my second Amendment, which obliges the Government to embrace that practice.

Mr. Noble

I will try to help my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) on this group of Amendments. I hope to be able to show him that they are not necessary and that the words that he seeks to alter are not as dangerous as he fears.

Amendment No. 190 apparently seeks to place an undesirable limitation on our power to adjust the provisions for relieving United Kingdom trade and industry from the burden of customs duties. Member States have their various policies and procedures for reliefs from duty. Our own provisions are set out in Part II of the Import Duties Act. They include matters such as relief from duty on imported materials required by our exporters and relief on imports for non-commercial, educational and research purposes.

For a customs union to be an effective reality, there must clearly be a broad identity of policy and practice. The Community is engaged in the continuing development of harmonised policies, and we as members will participate in this process. But harmonisation is not yet complete and, as members, naturally we expect to gain further knowledge and experience of the policies and practices adopted and permitted elsewhere in the Community. We may well find that in areas where a measure of national discretion is permitted, we may need to adjust our own policies and practices if our own industries are not to be at a disadvantage compared with their competitors.

In the nature of the case, clearly I cannot now give precise examples of when and how this power should be used to match the practices of other members. But it is sensible to exercise prudent forethought now, giving ourselves elbow room to look after our own interests and to do so rapidly by a standing power to make regulations should the need arise.

The Amendment proposes to delete the words which make it clear that the practices in other member States of which we shall wish to take account are not confined to practices which other members have adopted in order to conform to a Community obligation. They may simply be practices which are not ruled out by the obligations of membership. Even if the Amendment were accepted, there would still be nothing in the subsection to prevent our taking account of such non-obligatory practices. It is in our interests to do so, and desirable that we retain these words which put the scope of the power beyond doubt.

If my hon. and learned Friend is concerned that the power should not be used to make regulations in conflict with Community obligations, there is no cause for the Amendment. Once there were any obligatory Community instruments on the subject, they would override any national arrangements or regulations.

Parliamentary control over regulations made under this power is the same as for other regulations made under the Bill, namely, negative procedure, unless a draft has been approved by Resolution of each House.

I come to Amendment No. 191. I understand my hon. and learned Friend's concern with the matters in this and similar Amendments that he has tabled. It was foreshadowed by the points which my hon. and learned Friend raised during the Second Reading debate, and which the Chancellor of the Duchy dealt with on 17th February at column 659. My hon. and learned Friend's intention is to seek to clarify, for the benefit of Parliament, the courts and the public, what he understands to be the nature of certain of our obligations as a member of the European Economic Community. I note that Amendment No. 192 appears to have a similar intention. I hope that I shall be able to show, however laudable the intention, that such an amendment to this part of Clause 5 is inappropriate and unnecessary.

Clause 5(7) empowers the Commissioners of Customs and Excise to give practical effect in the United Kingdom to certain of our obligations as a member of the Customs Union of the Community. It is a provision which is geared to the practical and administrative needs of membership of that Customs Union. The nature of our obligations is not in question: these are set out in the Treaties and in certain Community legislation, and by virtue of Part I of the Bill these obligations are recognised in United Kingdom law. The fact that "may" is used instead of "shall" in no way implies a derogation from those obligations.


Clause 5(7) is concerned principally with the manner in which certain of our customs obligations are to be met. The effect of accepting the Amendment would be akin to that described by the Chancellor of the Duchy when he touched on a similar point in connection with Clause 2(2) on 17th February, 1972, when he said: If we had included in Clause 2(2)—which enables delegated legislation to be made—the word 'shall', it would have had the effect of giving the Government of this country no discretion as to the manner in which they responded to an indirect Community obligation."—[OFFICIAL REPORT, 17th February, 1972; Vol. 830, c. 659.]

In the context of Clause 5(7)(a), the effect would be to require the Commissioners to implement certain of their obligations, for example, the Community Transit System, either by issuing directions or by making regulations. This would rule out administrative action under existing powers, principally the Customs and Excise Act, 1952.

Another effect would be to require the Commissioners to follow every Community practice, even if that practice were wholly inappropriate to the circumstances of this country and were not intended by the Community to be compulsory but to be an optional measure to be applied only where appropriate.

This, in the detailed practical sphere of Customs procedures and control, would be both unwise and inflexible. It should not be overlooked that the Act of 1952 is and will remain for the foreseeable future the main statutory basis for the basis for the action of the Commissioners, and that they should where appropriate be free to implement Community obligations in accordance with its provisions. If this Amendment were to be accepted, any action which the Commissioners could take would be limited in the way I have described. I therefore invite the Committee to reject the Amendment.

Amendment No. 192 is one of several Amendments tabled by my hon. and learned Friend the Member for Darwen to demonstrate the precise extent of our Community obligations. I can understand the reasons which have no doubt prompted my hon. and learned Friend the Member for Darwen to propose such an Amendment, but in this case I would ask the Committee to consider more carefully the nature of the Customs Union which we shall be joining as a member of the European Economic Community.

The Customs provisions in the Bill reflect the reality of joining that Customs union: they are truly the legal nuts and bolts. We are here concerned with the day-to-day practicalities of the working Customs Union, and Clause 5(7) is drafted to meet that situation.

There are certain Community practices—it should be clearly understood that "practice" here means a Community practice—which, while they are not laid down in detail in Community law, member States may none the less implement by—

It being Eleven o'clock The Chairman proceeded, pursuant to Order [2nd May], to put forthwith the Question necessary for the disposal of the business to be concluded at that hour.

Amendment negatived.

Question put, That the Clause stand part of the Bill: —

The Committee divided: Ayes 196, Noes 184.

Division No. 237.] AYES [11.0 p.m.
Adley, Robert Hall, John (Wycombe) Oppenheim, Mrs. Sally
Alison, Michael (Barkston Ash) Hall-Davis, A. G. F. Osborn, John
Allason, James (Hemel Hempstead) Hamilton, Michael (Salisbury) Owen, Idris (Stockport, N.)
Archer, Jeffrey (Louth) Hannam, John (Exeter) Page, Rt. Hn. Graham (Crosby)
Astor, John Harrison, Col. Sir Harwood (Eye) Pardoe, John
Atkins, Humphrey Haselhurst, Alan Parkinson, Cecil
Awdry, Daniel Hastings, Stephen Peel, John
Baker, Kenneth (St. Marylebone) Havers, Michael Percival, Ian
Balniel, Rt. Hn. Lord Hawkins, Paul Pike, Miss Mervyn
Beamish, Col. Sir Tufton Higgins, Terence L. Price, David (Eastleigh)
Bennett, Sir Frederic (Torquay) Hiley, Joseph Proudfoot, Wilfred
Benyon, W. Hill, James (Southampton, Test) Pym, Rt. Hn. Francis
Berry, Hn. Anthony Holland, Philip Quennell, Miss J. M.
Biggs-Davison, John Holt, Miss Mary Raison, Timothy
Blaker, Peter Hordern, Peter Ramsden, Rt. Hn. James
Boscawen, Hn. Robert Hornsby-Smith, Rt.Hn.Dame Patricia Redmond, Robert
Bowden, Andrew Howe, Hn. Sir Geoffrey (Reigate) Reed, Laurance (Bolton, E.)
Bray, Ronald Howell, Ralph (Norfolk, N.) Rees, Peter (Dover)
Brinton, Sir Tatton Iremonger, T. L. Renton, Rt. Hn. Sir David
Burden, F. A. Jessel, Toby Rhys Williams, Sir Brandon
Butler, Adam (Bosworth) Ridley, Hn. Nicholas
Carlisle, Mark Johnson Smith, G. (E. Grinstead) Rippon, Rt. Hn. Geoffrey
Carr, Rt. Hn. Robert Johnston, Russell (Inverness) Roberts, Michael (Cardiff, N.)
Channon, Paul Jopling, Michael Roberts, Wyn (Conway)
Chapman, Sydney Kaberry, Sir Donald Rodgers, Sir John (Sevenoaks)
Chataway, Rt. Hn. Christopher Kellett-Bowman, Mrs. Elaine Rossi, Hugh (Hornsey)
Churchill, W. S. Kershaw, Anthony Rost, peter
Clarke, Kenneth (Rushcliffe) Kimball, Marcus St. John-Stevas, Norman
Cockeram, Eric King, Evelyn (Dorset, S.) Sandys, Rt. Hn. D.
Coombs, Derek King, Tom (Bridgwater) Sharples, Richard
Cooper, A. E. Kinsey, J. R. Shaw, Michael (Sc'b'gh & Whitby)
Cormack, Patrick Kirk, Peter Shelton, William (Clapham)
Costain, A. P. Knight, Mrs. Jill Simeons, Charles
Crowder, F. P. Knox, David Sinclair, Sir George
d'Avigdor-Goldsmid, Maj.-Gen. James Lambton, Lord Skeet, T. H. H.
Dean, Paul Lamont, Norman Smith, Dudley (W'wick & L'mington)
Deedes, Rt. Hn. W. F. Legge-Bourke, Sir Harry Soref, Harold
Digby, Simon Wingfield Le Merchant, Spencer Speed, Keith
Dodds-Parker, Douglas Lloyd, Ian (P'tsm'th, Langstone) Spence, John
Dykes, Hugh Longden, Sir Gilbert Stainton, Keith
Eden, Sir John Luce, R. N. Stanbrook, Ivor
Edwards, Nicholas (Pembroke) McArthur, Ian Steel, David
Elliot, Capt. Walter (Carshalton) McLaren, Martin Stewart-Smith, Geoffrey (Belper)
Elliott, R.W. (N'c'lte-upon-Tyne,N.) Maclean, Sir Fitzroy Stodart, Anthony (Edinburgh, W.)
Eyre, Reginald Mather, Carol Stokes, John
Fenner, Mrs. Peggy Maudling, Rt. Hn. Reginald Taylor, Sir Charles (Eastbourne)
Fidler, Michael Mawby, Ray Temple, John M.
Finsberg, Geoffrey (Hampstead) Maxwell-Hyslop, R. J. Thomas, John (Stradling (Monmouth)
Fisher, Nigel (Surbiton) Meyer, Sir Anthony Thompson, Sir Richard (Croydon, S.)
Fletcher-Cooke, Charles Mills, Peter (Torrington) Thorpe, Rt. Hn. Jeremy
Fookes, Miss Janet Mills, Stratton (Belfast, N.) Traftord, Dr. Anthony
Fortescue, Tim Miscampbell, Norman Tugendhat, Christopher
Fowler, Norman Mitchell, Lt.-Col.C. (Aberdeenshire,W) Waddington, David
Fox, Marcus Mitchell, David (Basingstoke) Walker, Rt. Hn. Peter (Worcester)
Fry, Peter Money, Ernle Wall, Patrick
Gibson-Watt, David Monks, Mrs. Connie Ward, Dame Irene
Glyn, Dr. Alan Monro, Hector Warren, Kenneth
Goodhew, Victor Montgomery, Fergus White, Roger (Gravesend)
Gower, Raymond More, Jasper Wilkinson, John
Grant, Anthony (Harrow, C.) Morgan, Geraint (Denbigh) Winterton, Nicholas
Gray, Hamish Morrison, Charles Worsley, Marcus
Green, Alan Mudd, David Wylie, Rt. Hn. N. R.
Grieve, Percy Murton, Oscar Younger, Hn. George
Griffiths, Eldon (Bury St. Edmunds) Neave, Airey
Grylls, Michael Noble, Rt. Hn. Michael TELLERS FOR THE AYES:
Gummer, J. Selwyn Normanton, Tom Mr. Bernard Weatherill and
Hall, Miss Joan (Keighley) Nott, John Mr. Walter Clegg.
Allaun, Frank (Salford, E.) Blenkinsop, Arthur Coleman, Donald
Archer, Peter (Rowley Regis) Body, Richard Concannon, J. D.
Ashley, Jack Booth, Albert Crosland, Rt. Hn. Anthony
Atkinson, Norman Brown, Hugh D. (G'gow, Provan) Crossman, Rt. Hn. Richard
Bagier, Gordon A. T. Buchan, Norman Cunningham, Dr. J. A. (Whitehaven)
Barnett, Guy (Greenwich) Campbell, I. (Dunbartonshire, W.) Dalyell, Tam
Barnett, Joel (Heywood and Royton) Carmichael, Neil Davidson, Arthur
Benn, Rt. Hn. Anthony Wedgwood Carter, Ray (Birmingh'm, Northfield) Davies, Denzil (Llanelly)
Bidwell, Sydney Clark, David (Colne Valley) Davies, Ifor (Gower)
Bitten, John Cocks, Michael (Bristol, S.) Davis, Terry (Bromsgrove)
Bishop, E. S. Cohen, Stanley Deakins, Eric
Dell, Rt. Hn. Edmund Lambie, David Prentice, Rt. Hn. Reg.
Dempsey, James Lamborn, Harry Prescott, John
Doig, Peter Lamond, James Price, J. T. (Westhoughton)
Dorman, J. D. Lee, Rt. Hn. Frederick Probert, Arthur
Duffy, A. E. P. Leonard, Dick Rees, Merlyn (Leeds, S.)
Dunn, James A. Lestor, Miss Joan Rhodes, Geoffrey
Dunnett, Jack Lewis, Arthur (W. Ham, N.) Roberts, Rt.Hn.Goronwy (Caernarvon)
Eadie, Alex Lewis, Ron (Carlisle) Roderick, CaerwynE.(Br'c'n & R'dnor)
Edelman, Maurice Lipton, Marcus Roper, John
Ellis, Tom Lomas, Kenneth Ross, Rt. Hn. William (Kilmarnock)
English, Michael Loughlin, Charles Rowlands, Ted
Evans, Fred Lyon, Alexander W. (York) Russell, Sir Ronald
Ewing, Harry Lyons, Edward (Bradford, E.) Sandelson, Neville
Faulds, Andrew Mabon, Dr. J. Dickson Sheldon, Robert (Ashton-under-Lyne)
Fisher, Mrs. Doris(B'ham,Ladywood) McBride, Neil Shore, Rt. Hn. Peter (Stepney)
Fitch, Alan (Wigan) McElhone, Frank Short,Rt.Hn.Edward (N'c'tle-u-Tyne)
Fletcher, Raymond (Ilkeston) Mackenzie, Gregor Silkin, Rt. Hn. John (Deptford)
Fletcher, Ted (Darlington Mackie, John Silkin, Hn. S. C. (Dulwich)
Foot, Michael McMillan, Tom (Glasgow, C.) Sillars, James
Freeson, Reginald McNamara, J. Kevin Silverman, Julius
Gilbert, Dr. John Mahon, Simon (Bootle) Skinner, Dennis
Ginsburg, David (Dewsbury) Marks, Kenneth Smith, John (Lanarkshire, N.)
Grant, George (Morpeth) Marquand, David Spearing, Nigel
Griffiths, Eddie (Brightside) Marshall, Dr. Edmund Spriggs, Leslie
Griffiths, Will (Exchange) Marten, Neil Stallard, A. W.
Hamilton, James (Bothwell) Meacher, Michael Stewart, Donald (Western Isles)
Hamilton, William (Fife, W.) Mellish, Rt. Hn. Robert Stonehouse, Rt. Hn. John
Hamling, William Mendelson, John Strang, Gavin
Hannan, William (G'gow, Maryhill) Millan, Bruce Taverne, Dick
Hardy, Peter Milne, Edward Thomson, Rt. Hn. G. (Dundee, E.)
Harper, Joseph Mitchell, R. C. (S'hampton, Itchen) Tinn, James
Harrison, Walter (Wakefield) Moate, Roger Torney, Tom
Hart, Rt. Hn. Judith Molyneaux, James Turton, Rt. Hn. Sir Robin
Horam, John Morgan, Elystan (Cardiganshire) Urwin, T. W.
Houghton, Rt. Hn. Douglas Morris, Alfred (Wythenshawe) Varley, Eric G.
Hughes, Rt. Hn. Cledwyn (Anglesey) Morris, Charles R. (Openshaw) Wainwright, Edwin
Hughes, Mark (Durham) Mulley, Rt. Hn. Frederick Walden, Brian (B'm'ham, All Saints)
Hutchison, Michael Clark Murray, Ronald King Walker, Harold (Doncaster)
Janner, Greville Oakes, Gordon Walker-Smith, Rt. Hn. Sir Derek
Jay, Rt. Hn. Douglas Ogden, Eric Weitzman, David
John, Brynmor O'Halloran, Michael Wellbeloved, James
Johnson, James (K'ston-on-Hull, W.) O'Malley, Brian Wells, William (Walsall, N.)
Johnson, Walter (Derby, S.) Orbach, Maurice White, James (Glasgow, Pollok)
Jones, Barry (Flint, E.) Orme, Stanley Whitlock, William
Jones, Dan (Burnley) Oswald, Thomas Wilson, Alexander (Hamilton)
Jones,Rt.Hn.Sir Elwyn(W.Ham,S.) Paisley, Rev. Ian Wilson, William (Coventry, S.)
Jones, Gwynoro (Carmarthen) Parker, John (Dagenham) Woof, Robert
Jones, T. Alec (Rhondda, W.) Peart, Rt. Hn. Fred
Judd, Frank Pendry, Tom TELLERS FOR THE NOES:
Kaufman, Gerald Pentland, Norman Mr. Ernest Armstrong and
Kinnock, Neil Powell, Rt. Hn. J. Enoch Mr. John Golding

Clause 5 ordered to stand part of the Bill.

It being after Eleven o'clock The CHAIRMAN left the Chair to report Pro-

gress and ask leave to sit again, pursuant to Order [2nd May].

Committee report Progress; to sit again to-morrow.

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