HC Deb 03 May 1972 vol 836 cc395-551

3.48 p.m.

Sir Derek Walker-Smith (Hertfordshire, East)

On a point of order, Sir Robert. May I seek your guidance concerning the provisional selection of Amendments, including those which you helpfully indicated as being assigned for Divisions?

The prospects of dividing upon those Amendments are, presumably, contingent on the state of play reached when the guillotine falls. In any event, Amendment No. 7 does not figure on the list. Whether that is through inadvertence or through the pessimistic conclusion that it is unlikely that we shall get that far in the time allotted I am not sure. But I would respectfully suggest that the Amendment should be on the list just in case we reach it during the time allotted by the timetable Motion.

Mr. Edmund Dell (Birkenhead)

Further to that point of order, Sir Robert. I am grateful to the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) for the care with which he has attended to the Amendment in my name. As you know, Sir Robert. I intended to raise a point of order on this matter. It is not clear as a result of the timetable Motion where a Division on Amendment No. 7 would occur. I assume that it would occur on the third day. I should be grateful to you if you would indicate whether that is correct.

The Chairman

It is quite clear that it will not come in today's section. It may be reached if we get beyond the matters which have been allotted, but I cannot hold out high hopes of that. It is almost certain to come during the second allotted day, whenever that is.

Mr. Dell

Further to the point of order. You say, Sir Robert, that it is likely to come during the second allotted day. You will observe that Amendment No. 7 is in the form of a new subsection (3). I should therefore have thought that it would come within the classification on the third day, "Clause 2, Amendments before subsection (4)". rather than on the second day, "Amendments before subsection (3)".

The Chairman

No; I think that the right lion. Gentleman is incorrect. It will come during the second day.

Mr. Michael Foot (Ebbw Vale)

We certainly trust that there will be a Division on Amendment No. 7, and we understand that the Chair has made its position on the matter absolutely clear. We fully understand that if a Division on that Amendment is prevented, it will be because of the way in which the guillotine falls.

There are many other matters which are the subject of Amendments which ought to be subject to Divisions. We are concerned not only with the Amendment suggested by my right hon. Friend the Member for Birkenhead (Mr. Dell), which is extremely important, for there are other matters which will fall under the guillotine. One of the disadvantages of the guillotine procedure is that whether we are to have a Division rests not with the House or with the Opposition but solely with the Government, and I hope that there will be no misunderstanding about that.

We hope that there will be a Division on Amendment No. 7 and that the Chair will be able to give us that guarantee, and if the Chair cannot give that guarantee, it will be because of the ruthless operation by the Government of their attempt to prevent even pro-Marketeers from having a clear undertaking that they will be able to vote on these matters.

The Chairman

I understand the hon. Gentleman's anxiety about this issue, and to some extent it is not without foundation. If the Amendment is not reached by the time the directions of the Business Committee come into force, there will not be a Division, because the Business Motion expressly precludes that. It allows not only Government Amendments, of which there is none, and the Amendment already reached to be put to a Division.

Mr. Foot

I am grateful to you for what you have said, Sir Robert, because you have made it clear to the House and the country, if the country is interested in our proceedings, that if we are deprived of the opportunity to vote on Amendments such as that of my right hon. Friend, which is an Amendment suggested by a pro-Marketeer about the way in which the House of Commons should deal with these matters, it will be due to the action of the Government and to nothing else. That ought to be understood. I hope that even at this late date the Government will understand that the ruling that the Chair has just given means that many pro-Marketeer Members are to be denied the right to force their Amendments to a Division because of the operation of the guillotine. Let us have no misunderstanding about it.

The Chairman

I hesitate to join in argument with the hon. Gentleman, but there are many contingencies which may arise with other Amendments which are now cluttering the Notice Paper—and I use the expression respectfully—which may make reaching that Amendment difficult. There is no need for me to protect the Government, but in all fairness I do not think that the Government can say exactly where a Division will happen. Even if they go out of their way to make it happen, they have no way of guaranteeing when a Division will occur.

Mr. Foot

I am sorry to persist, and I am not arguing with you, Sir Robert, for after your ruling the matter should be clear. We shall now have to proceed to debate the Amendments on the Notice Paper in the best way we can. The Opposition will consider these matters in the light of the decision made in the House yesterday, and we will seek by our arrangements of the Amendments to provide the fullest opportunities for debate.

All I wished to establish beyond any possibility of doubt was that if hon. Members such as my right hon. Friend the Member for Birkenhead, or my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins), or my right hon. Friend the Member for Manchester, Cheetham (Mr. Harold Lever), were here and wished to move Amendments on these matters, they would be deprived of the right to do so by the operation of the guillotine. I want it to be absolutely plain to them that that is because of the Division in the House last night. I wish to make it particularly clear to the Liberal Benches, which are now totally empty, that if we are denied the right to vote on the matters which yesterday Liberal Members said they wished to vote on it will be because of the Government's decision and not because of any decision by the Opposition, or any decision by the Chair.

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

Further to that point of order, Sir Robert. I refer to your ruling immediately before the last intervention by the hon. Member for Ebbw Vale (Mr. Michael Foot). Would you not agree that it would have been possible, if so desired, within the terms of the Motion by which we are now governed to provide that the Question should be put on Amendments which the Chair had previously ruled were to be subject to a Division if required?

The Chairman

That may or may not be so, but it is nothing to do with me. It is a question for the Government to decide for themselves, and they are within the rules of order in doing so.

Sir Robin Turton (Thirsk and Malton)

Further to that point of order, Sir Robert. If the Government had accepted the second Amendment which I suggested yesterday, all the Amendments which the Chair has selected for a Division would have come within the guillotine. As they refused that Amendment, we are denied that opportunity which we had previously been promised.

The Chairman

That is not a matter for me.

Mr. John Mendelson (Penistone)

On a point of order, Sir Robert. As you have twice said that it is not for you, is it not high time, at the beginning of the procedure now governing us, that we should hear a Government reply to the comments from both sides of the House?

The Chairman

That, again, is not for me.

Sir Elwyn Jones (West Ham, South)

On a point of order, Sir Robert. Is not the position particularly deplorable, because we had full discussions about Amendment No. 7 when there were valuable contributions from both sides of the Committee? Is it not intolerable that the matter would be left in a state of suspense because of the operation of the guillotine?

The Chairman

That is not a matter for me. We are now becoming inclined to become a little disorderly. I have given a ruling, and I think that we should now continue to debate the Bill

Mr. Foot

I am sorry to persist, Sir Robert, but it so happens that the House of Commons should understand that we are starting these discussions in a complete shambles on these Amendments because of the way in which, following the Division last night, the Government have not been prepared even to comment on what has been said from both sides of the House about how we are to have an opportunity to divide under this extremely clumsy guillotine Motion and to vote on matters on which we have already had some discussion, matters which the Government themselves have described as important, but on which we are not to have Divisions because of the clumsy and indiscriminate and haphazard nature of the guillotine Motion for which the House of Commons so foolishly voted last night.

We now seem to be in the position that nobody in the House knows whether we are to have a chance to vote on these matters, least of all those in charge of the Bill. That adds to what has been said by the Father of the House about how these matters might have been better handled. It is a further illustration of how little the Government care about the way in which the House conducts its business.

The right hon. and learned Gentleman, who is supposed to be in charge of the Bill, should rise now and tell us whether he thinks, for example, that the House will have a chance of voting on Amendment No. 7, and, if he does, when that chance will occur, and when further opportunities to divide on similar Amendments will occur. That would be a start to attempting to deal with the matter properly, particularly as he has said that he wants an orderly discussion of these matters. The Government have not yet been able to tell us, although the Chair has been inciting the right hon. and learned Gentleman to say what he will do.

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

My difficulty is that I do not know how quickly the Committee will proceed to the discussion of the Amendments or how fast it will deal with them. You, Sir Robert, put it fairly when you said that it all depended on how the Committee proceeded; and, of course, I cannot order the business of the Committee

Several Hon. Members rose

The Chairman

Order. The Committee having made a considerable demonstration about this matter, I suggest that it might be as well to proceed to the next Amendment. I therefore call Mr. Hugh Jenkins.

4 p.m.

Mr. Hugh Jenkins (Putney)

I beg to move Amendment No. 211, in page 2, line 26, after ' Treaties ', insert: ' except such rights, powers, liabilities, obligations and restrictions as arise under the following regulations and notices dealing with the film industry, namely Directives 1/63, 2/63, 3/68, and 4/70; Regulations 15/61, 38/64, 221/64, 360/68, 1612/68, and 125/70; Directives 63/607, 65/264, 68/369, 70/451'. It was the intention of those whose names appear to this Amendment that we should at this stage have a major debate on the film industry, but in the situation in which we find ourselves it may turn out—as you rightly say, Sir Robert. one cannot forecast these things; none of us can control what the Committee decides in the circumstances—that we shall have a short debate on the industry now, with special reference to the relevant treaties and regulations, and perhaps a longer and more detailed discussion when we come to Clause 8.

I had intended to make a somewhat lengthy exposition of the situation. I shall reduce that to not more than 15 minutes, which means that my contribution to this preliminary examination will be brief, with I hope a fuller contribution later.

This is not to say that if the Minister's answer is not satisfactory we shall fail to divide the Committee. On the other hand, we do not expect a prolonged debate at this stage, for there are many other important Amendments which merit full discussion, on matters not necessarily more important than the one with which I am dealing, although they can be said to spread over a somewhat wider canvas.

It will be generally agreed that a purpose of Clause 2 is to apply the treaties and international agreements of the Six —past, present and future—to this country. My Amendment seeks to exclude the British film industry from the consequences of the Clause. That is its simple objective.

The directives and regulations mentioned in the Amendment are various and sometimes complex, but the reason for excluding the industry is simply that if it were included British film production would suffer a severe blow. After the treatment which the industry has already received at the hands of the present Government, it is in no condition to take further punishment.

All European film industries endeavour to protect their home markets. They all live in the shadow of the American film industry, which established itself as the world dominator as early as the first war. But in this country—this is precisely why what will do for the Six will not do for us—the Americans secured almost complete domination of the film industry between the wars simply because we speak dialects of the same language; we both speak a form of English. For this reason, the British industry is totally different from any of the film industries of the Six.

In an endeavour to protect at any rate some of our own screen time for our own production, a Conservative Government some years ago created a British quota system. This was designed to ensure that 30 per cent. of our time would be our own. It was also designed to keep a native film production industry in being, and in order to syphon money back into British production a levy was established, the money being taken from the box office. I speak of the well-known Eady Levy.

The effect of the treaties, agreements, directives and regulations which we seek to remove will be to make the British quota a quota for the Six, or the Ten as it will be. It will no longer be a British quota but a Community one.

At first glance there may seem to be little danger in this, for who, after all, will make French, British or German films for the British market? But the American industry not only still commands 70 per cent. of our screen time but also influences the British sector in that many, if not most, British quota films are made here with American capital.

It will be seen, therefore, that if the British quota becomes a Community quota, films for our market could be made in any European country and derive the benefit of the production quota, if not of the levy as well. There is no doubt that such films will get full access to the British quota, though there is some doubt about whether the levy will also be paid.

Will quota films be made abroad, and will they be as damaging as I suggest to the British film industry? Why not? After all, production costs are cheaper in Italy and Spain, and a co-production film made in two languages with American capital would sell in this country as British and get all the production advantages and, of course, more reliable location weather.

Unless the Bill is amended in the way we suggest, it is likely that the British film production industry will decline. That would be a pity because this industry has considerable achievements to its name, and not only artistic ones. It was an outstanding dollar earner at a time when we were sadly in need of dollars. All the big spectaculars were made here because we were cheaper than the United States. We undercut the American price. Now, by this Bill, we are preparing to cut our own throats.

There is a certain similarity between the Community and the present British Government. Both started out with a fanatical belief that what could not make a profit on its own feet must die. Both have since recognised that a country must have industries which have to be protected and assisted by the State in the national interest.

The economic difference between the parties seems now to be that the Tories are in favour of public money enriching private pockets while we prefer the people to have the benefits of their own taxation.

One might say that after the Tories have crippled the National Film Finance Corporation, have threatened the Film Fund and have introduced a wrecking Industrial Relations Act, our entry into the Common Market could do little more to damage an industry which the Government seem to regard as an opponent. If the Amendment is not carried, this Bill may administer thecoup de grace

The countries of the Six administer high admission taxes on the cinema. This is one reason why I have not wasted time trying to get VAT off the cinema but have concentrated on the theatre. In other respects, however, the Six have been laboriously moving towards the British system of protection for their film industries, but here we have the British Government appearing to be keen to dismantle ours.

British adhesion to the EEC could damage not only our film industry but the industries of the Six as well. No wonder the majority of the French seem to believe, with the majority of the British, that de Gaulle was right to keep us out, for it seems that by our adhesion we shall do them harm as well.

The Minister seems to believe that the Eady Levy will be permitted to continue on a Community basis. In the opinion of one expert, Dr. March Hunnings, that is a very doubtful proposition, and I think he is right, as I shall suggest when we come to Clause 8.

The European co-production film which may replace the old mid-Atlantic product which we had in the American co-production days is likely to be as culturally null and void as that was, located nowhere in particular with all the characters constantly in flight from one capital to another, probably being raped in flight and whipped upon landing.

Another possible consequence of the Europeanisation of the British film is that we shall have a constant diet of Rolf Harris and Engelbert Humperdinck, a fate which hon. Members may regard as worse than the alternative. Then also there are the people pushing large balls in strange competitions, which appears to be a main product of the European television industry.

The Community envisaged in its first film directive, which is among those we seek by this Amendment to escape, the establishment of the European film made by the European companies, and, I suspect, producing glossy rubbish for morons. The first European Economic Community firm directive of October, 1963, paved the way for the second directive of 1965 which added to the abolition of distribution quotas the abolition of import quotas; so far the rules provide for equal treatment of films of the six, but this means very unequal treatment of British films. These directives also provide for free circulation within the member States of co-production films; that is to say, it will be impossible to prevent —and this is important—an Italo-Spanish film made with American capital from being treated as British provided that the British quota regulations are otherwise observed. If that is not the case I shall be happy to hear it denied by the Minister when replying to the debate.

Indeed, it might be even worse than that, as I shall try to explain when we reach Clause 8, but it is a lunatic proposition, because it seeks to apply to this type of product something which might be defensible as applied to others but is certainly not in this field. By regulation 1612/68 and the fourth directive of 1970 we find that the Eady system of redistribution clearly is intended to become illegal, and no measures which seek to ensure that British films are British will be permissible.

Whatever one may say about the products of industry, the substitution in the cultural field of a non-existent Community nationality for the flavour and variety which make the sampling of the films of different countries an adventure is an appalling proposition, because artistic and cultural and even entertainment products are essentially national and to pretend that they are not is to run up the flag of the Philistines. It is to erect the international cartel into a principle and to call a narrow Western European continentalism by the name of that which it seeks to destroy—true internationalism under the United Nations.

Another commentator who advised British Equity on these matters points out not only that the labour provisions of the Treaty of Rome and its derivatives render it impossible for that body to distinguish between British actors and those from the Community nations, but that the Commission does not accept obligatory trade union membership. He argues, therefore, that Equity is helpless to reject Continental newcomers and non-actors as it is now prevented under the Industrial Relations Act from the enforcement of a pre-entry closed shop on British newcomers. Therefore, this ludicrously overcrowded profession of performers is to be open to a fresh influx of aspirants from the Six.

Dr. March Hunnings points out that under the regulations which this Amendment seeks to reject Americans are likely to count as British because the definition is a linguistic definition rather than a national one. I shall expand this, again, on Clause 8, but of course, it creates inescapable consequences for us, and it would virtually abolish the independent existence of the British film industry.

These regulations to which I have referred are some of those we seek by this Amendment to prevent from coming into effect. The commentators whom I have quoted foresaw the acceptance of the Treaty of Rome in principle, because, I think, they are people who basically accepted that the Market was to come, but they thought, and they were entitled to think, that there would be a long period of legislation, following acceptance in principle, a period in which the application of the regulations and directives could be discussed and the regulations and directives modified in detail. They did not anticipate, nobody anticipated—certainly none of those commentators did—this kind of Bill, a Bill by which at one fell stroke regulations and directives perhaps suitable for the Six and negotiated and discussed by the Six would be applied to us without alteration and without a long period of consideration. They did not anticipate they would be applied to an industry in this country quite different in character from that of the industry in the Six, and with different traditions and different relationships with the dominant American industry. These directives and regulations almost without exception are gravely harmful to the British film production industry and to those engaged in it, and thus also harmful to the cinema-going public. I have no hesitation in asking the Committee to reject them.

4.15 p.m.

Finally, this sad tale which I have only briefly outlined in this preliminary speech illustrates with abundant clarity a point that the Government and pro-Marketeers have been trying very hard to conceal. I speak here as someone who is against entry in principle, but a person faced with the consequences and recoiling from them and saying "No, if this is what it means we want no part of it" is honourable and sensible. Anyone connected with the film industry, even if he were in principle in favour of entry, would be entitled to say, on examining the consequences of entry—I for my own part would say—" If entry into the Community on these terms means seriously damaging the industry in which I am engaged, I must say, 'No, I want none of it '." If that is what it means it is honourable and sensible for hon. Members to adopt that attitude, whether they are leaders of either of the parties or back benchers. They ought not to be subjected to the calumny which has been heaped upon them, but are entitled to the congratulations which should be the lot of those who, on seeing the evidence, have the strength of will to change their minds.

Mr. J. Selwyn Gummer (Lewisham, West)

I must start by declaring an interest in the sense that I have made and do make films, largely for the juvenile market and for television. I have, therefore, a particular interest in this Amendment.

What worries me is the way in which it has been proposed, because I must say that there are many parts of the film industry which would not put the kind of case which has been put for the proposition in this Amendment. The speech of the hon. Member for Putney (Mr. Hugh Jenkins) reminds me of an earlier one which he made in this Session on the subject of the commercial radio Bill, a speech in which he proposed that we should attempt to stop Commonwealth radio programmes from coming into this country because they would provide unwelcome and unfair competition for those which were manufactured in this country. I opposed the hon. Gentleman on that occasion, and I think that the House opposed him on that occasion; he was unsuccessful in what he suggested.

The British film industry is in no such dire need of protection. It is necessary to state clearly that it is perfectly capable of doing what the film industries of the Six can do. It is difficult to make the case that it is entitled to be exempted from the perfectly reasonable regulations and directives referred to in this Amendment. We have to see whether there is a special case which can be presented for excluding the British film industry, as against the industry in any of the other countries, from the regulations and directives referred to in this Amendment. I believe the case has not been made out, and that it cannot be made out, and that in any case it would be unsatisfactory if it were to be made out.

There are three points. I speak from a position which is no more rigid than that of the hon. Gentleman. His proposition came from the point of view of somebody who has been continuously opposed in principle to our entering into the European Economic Community. I speak from the point of view of somebody who has been enthusiastically in favour of it over some long time and as one who believes that entry will be of benefit to the nation as a whole. If something of benefit to the nation as a whole were to be damaging to particular sections of our community protection should he given to them.

The first thing to point out is that in the negotiations which have been carried on between this country and the Six no suggestion was made by either the previous or the present Government that among the exceptions and areas which ought to have special consideration the film industry should be included. If it is true, as the hon. Member for Putney suggested, that the film industry is in so dire a position that it will collapse—his phrases were as serious as that—it is surprising that, under the many objections which have been raised after the redisconversion of the Leader of the Opposition the one which has not been raised is the film industry. We heard about a whole range of other industries, but not the film industry. That seems surprising if the position is as serious as was suggested.

Secondly, it seems surprising, if this suggestion is true, that there is still a French film industry. Why has that not been swamped by Italio-Spanish films produced with American money? I do not believe that this is a reasonable argument. It seems to be another scare tactic raised by the hon. Gentleman with the support of some elements in Equity in order to make people who might not in general be opposed to entry to the Common Market opposed for specific and narrow reasons.

In discussing the British film industry one must refer to the point mentioned by the hon. Gentleman, that the British film industry contributed greatly to the way that Britain after the war was able to gain dollars by manufacturing in this country very good quality spectacular films at cut prices. He said that this was the case. It is true that largely that was the case, but many of us would like to ask: why has the British film industry in many areas priced itself out of the market that it once had?

Those who are concerned with the British film industry take the view that this may have something to do with the fact that many companies find it impossible to produce a film in Britain at a reasonable price because of the restrictive practices which are and have been the bane of our industry for a long time.

I am in favour of protecting industries which are trying their best to compete properly on an international scale. I am one of those on this side of the House who are not ashamed to say that I believe in subsidising an industry when the subsidy will enable the industry to get over a bad patch, to meet unexpected competition, or to make itself efficient to enable it to meet such competition. However, I am not prepared to subsidise an industry when one of the reasons for its needing subsidising is that it has refused to compete internationally and has priced itself out of the international market because it is unwilling to meet its internal problems by dealing with the restrictive practices within the industry. For example, if a film crew is taken to make a film on location in Spain and it is necessary to put up one door during a fortnight's shooting, because of restrictive practices a carpenter must be taken for the fortnight as the company is not allowed to use local labour. That carpenter must then be on full pay for the fortnight, because that is one of the rules enforced on British film producers by the film industry trade unions.

Therefore, we must ask whether the Committee is being asked to exclude from the provisions of the Bill and the agreements, with our entry into the European Economic Community, an industry which, because of its nature, is unable to compete or has made itself uncompetitive for reasons which many might delienate as selfish. That question must be asked, and I do not believe that we have been given an answer. If there is an answer to that question, and if I have been unfair to the British film industry, I hope that that answer will be. given.

The hon. Gentleman suggested that we were on the verge of entering the European Economic Community and that it was perfectly reasonable to accept that there were a number of regulations and directives which, under the terms of the Bill, would be effective in Britain, but that there was something about the film industry, irrespective of its costs, staffing, or anything else, which made it special. The hon. Gentleman suggested that if we had a European film industry the very high quality of British films would be excluded and overtaken by films which would consist of either Englebert Humperdinck ad nauseam, which is not very difficult, or gentlemen pushing large balls up hills in television programmes such as the inter-cities competition. I do not know whether he has seen any British films recently but "On the Buses ", which does not seem to be on the highest level—" Les Doubledeckers "as it is called in France—is sold throughout the Common Market countries.

There is nothing innately beautiful or individual about the British film industry or innately nasty about the French, Dutch or Belgian film industries. That seems a curious, rather narrow and anti-foreign view similar to the suggestion that we should not have Australian or Canadian radio programmes when we discussed that particular matter. It seems the kind of narrow isolationism which we have heard so often from opponents of entry.

Mr. Eric Deakins (Walthamstow, West)

Rubbish.

Mr. Gummer

It is a rubbishy attitude to take, but it is one that has been taken throughout the debate.

Mr. Deakins

Juvenile.

Mr. Gummer

It may well be juvenile to put forward that proposition, but it has been put forward by the hon. Member for Putney and no doubt will be put forward by the hon. Gentleman who made that comment when we discuss agriculture.

The other countries of Europe are producing films of enormously high quality which we already have and welcome in this country. If anybody ought to be trying to get this kind of Amendment it should not be us on entry to the European Economic Community; it should be for the other countries on the mainland within the Community to make up their minds and say that they should have this protection against our film industry.

We have the inestimable advantage of making films in English, so we are more likely to sell a film in its present language condition rather than a co-production or dubbed-on track because many more people speak English than Dutch or French.

This is an extremely ill-advised proposal. It suggests that we should exclude from our arrangements the operation of certain parts of regulations and directives which no one taking any part in any negotiations has said we ought to protect ourselves against. They are a series of regulations which really cannot be objected to on the basis that there is anything about our film industry which puts it in a weaker position so that it needs the protection which is not afforded to the film industries of any of the Common Market countries.

Mr. Phillip Whitehead (Derby, North)

Would the hon. Gentleman care to comment on the position, which is very different by comparison with the French film industry, which has been discussed, with regard to the restrictive practices exercised by the monopoly distributors? It is their practices which aim precisely at the kind of lowest common denominator market that my hon. Friend was discussing.

Mr. Gummer

I know that it is possible, and we could swap anecdotes about the standard of the films currently on show in both France and Great Britain. However, there is no value position which says that, in general, the films on general release in France are worse than the films on general release in England. I cannot see that that can be reasonably put forward

If it is suggested that the monopoly position of the distributors in France has so affected the standard of the French film industry that we shall find they are in a different position from us, I do not think that that could be seriously upheld. What can be seriously put forward is that British actors would find themselves in competition with continental actors because there would be free movement of labour. This is part of a much larger subject.

If we are to have what has always been accepted—and not just by this side of the House but by the Labour Party when they were in power—the free movement of labour within the EEC as enlarged, then it must be absolutely accepted that British actors will have to compete in exactly the same way as the actors of any other member State of the EEC.

British actors would find themselves much more able to compete than many others, first because the original version of the film would be in the English language and, secondly, because we have a reputation, and this would give British actors the opportunity to appear in continental films.

Increasingly, international casts will be used for films produced in Europe. This British film industry should put itself into a proper position to compete with the American film industry, and it is much more likely to do that from a European base than if it believes that it is so weak, so poor and so unable to compete that it must have a special kind of protection which is denied to any other industry simply because it has put itself into that weak and poor position by its method of organisation and its refusal to compete on equal terms.

4.30 p.m.

The Lord Advocate (Mr. Norman Wylie)

The hon. Member for Putney (Mr. Hugh Jenkins) properly pointed out that a great deal of what he had to say bore more relevance to Clause 8 than to Clause 2(1). He has treated this debate as a preview of the discussion on the more significant provisions of Clause 8 which are directed specifically to the British film industry.

Clause 2(1) is concerned with self-enacting Community law which for these purposes means regulations and not directives. We are concerned, as the hon. Member for Putney emphasised, with regulation 1612 of 1968 and regulation 1251 of 1970. I think there is a misprint in the Amendment; it should be 1251 of 1970 and not 125. May I for the record point out that regulations 15 of 1961 and 38 of 1964 have been superseded by regulation 1612, so it is regulation 1612 about which we are concerned. Further for the record, may I mention that what the Amendment refers to as regulations 221 of 1964 and 360 of 1968 are directives and not regulations.

The fundamental provision in the Amendment is regulation 1612, and the hon. Gentleman is seeking to protect the British film industry from the provisions of the EEC relating to the free movement of labour. The hon. Gentleman's difficulty is that it is an absolutely cardinal principle. There is no getting away from that. Not only is it embodied in the regulation referred to in the Amendment, but it is enshrined in Article 48 of the Treaty of Rome. I am afraid that any attempt by an Amendment to modify or exclude the operation of the principle of the free movement of labour within the Community is a non-starter.

On the other hand, Community law already recognises that there is a desire within the member States of the EEC to protect their own film industries. Just as the British film industry has been protected by statute over the years—more recently by the 1960 to 1970 Film Acts —so within the EEC, Germany, France and, I think, Italy equally have had in the past a protective policy towards the film industry, and that has been recognised in Community regulations.

No doubt the hon. Member for Putney appreciates this, but it is advisable to get it on the record. Regulation 1612 has a provision in Article 4(2) which invokes directive 607 of 1963. The effect of that directive is to permit a film industry within a nation State to reserve key posts to its own nationals. The kind of key posts I have in mind and which are spelled out in directive 607 are director, principal performer, producer, director of photography, senior engineer and editor. A whole list of key posts can be reserved for British nationals without offending the spirit or the letter of Community law. To that extent the existing Community regulations, read along with the directive to which I have referred, go a long way to meet the point made by the hon. Member for Putney on the mobility of labour.

Although the four film directives which are referred to at the end of the Amendment properly fall to, be considered in the context of Clause 8, perhaps to short-circuit the discussion on Clause 8 I might deal with them very shortly.

Directive 607 has the important qualification to which I have just referred, and we certainly would not want to exclude it from operating in this country. Beyond that, 607 contains provisions for which there is no requirement for any amendment of our own law. For example, it deals among other things with the abolition of restrictions on the importation of films. We have no such restrictions. It deals with the definition of a film for the purposes of deciding what is a national film. Our existing legislation includes a definition which is broadly similar to that contained in 607. Again, there is no requirement to implement directive 607 by legislation in this country.

The next directive to which the Amendment refers is 264 of 1965. That deals with the removal of any restrictions with regard to the opening of specialist cinemas intended exclusively for the exhibition of foreign films in the language of the country of origin, and provision for that in this country is being made in Clause 8(4). The directive deals also with restrictions on a member State assisting a specialist cinema in the territory of another State and with the screen quota. ' That is covered in subsections (1), (2) and (3) of Clause 8. So perhaps the attack on that aspect might properly be reserved for our discussion on Clause 8.

The next directive to which the Amendment refers is 369 of 1968, which deals with freedom of establishment in respect of self-employed persons in film distribution. As there are no restrictions in this country in that connection there is no requirement to legislate on that directive.

The last one, No. 451, is concerned with freedom of establishment and freedom to provide services in respect of self-employed persons in film production. Once again, there are no restrictions in our films legislation inhibiting nationals of other member States coming to this country to work in a self-employed capacity on film production. There is a technical qualification about being a British registered company that will not in future be required, but that is a very technical matter.

In the light of the observations which I have made, especially those with regard to Regulation 1612, and having regard to the fact that the rest of the Amendment relates to directives with which Clause 2(1) is not concerned and which will be more properly raised in our discussions on Clause 8, I hope that the hon. Member for Putney will feel able to withdraw his Amendment.

Mr. Hugh Jenkins

I regret that I am unable to do that. The hon. and learned Gentleman has failed to deal with the main point of the argument, which is that the British quota becomes a Community quota and that, owing to the interpretation of what is called in the Frenchl' expression culturelle we are advised that this includes not only the white Commonwealth but India, Pakistan and also the United States of America. The hon. and learned Gentleman has not touched upon this point.

We shall certainly be able to develop it more fully when we consider Clause 8. But in view of the fact that the consequence of what is being done is virtually the destruction of what the hon. and learned Gentleman admits to be the essential protection of the British film industry, I shall ask my right hon. and hon. Friends to press the Amendment to a Division.

Question put, That the Amendment be made:—

The Committee divided: Ayes 255, Noes 269

Division No. 161.] AYES [4.40 p.m.
Allaun, Frank (Salford,E.) Atkinson, Norman Bennett, James (Glasgow, Bridgeton)
Allen, Scholefield Bagier, Gordon A. T. Bidwell, Sydney
Archer, Peter (RowleyRegis) Barnett, Guy (Greenwich) Biffen, John
Armstrong, Ernest Barnett, Joel (Heywood and Royton) Bishop, E. S.
Ashley, Jack Bell, Ronald Blenkinsop, Arthur
Ashton, Joe Benn. Rt. Hn. Anthony Wedgwood Boardman. H. (Leigh)
Body, Richard Howell, Denis (Small Heath) Oswald, Thomas
Booth, Albert Huckfield, Leslie Owen, Dr. David (Plymouth, Sutton)
Bottomley, Rt. Hn. Arthur Hughes, Rt. Hn. Cledwyn (Anglesey) Padley,Walter
Boyden, James (Bishop Auckland) Hughes, Mark (Durham) Paget, R. T
Bradley, Tom Hughes, Robert (Aberdeen, N.) Palmer,Arthur
Brown, Hugh D. (G'gow, Provan) Hughes,Roy (Newport) Pannell, Rt, Hn, Charles
Brown, Ronald (Shoreditch & F'bury) Hunter, Adam Parry,Robert(Liverpool,Exchange)
Buchan, Norman Irvine,Rt.Hn.SirArthur(Edge Hill) Pavitt, Laurie
Buchanan, Richard (G'gow, Sp'burn) Janner, Greville Pendry, Tom
Butler, Mrs. Joyce (Wood Green) Jay, Rt. Hn. Douglas Pentland, Norman
Campbell, I. (Dunbartonshire, W.) Jeger, Mrs. Lena Perry, Ernest G
Cant, R. B. Jenkins, Hugh (Putney) Powell, Rt. Hn. J. Enoch
Carter,Ray (Birmingh'm, Northfield) Jenkins, Rt. Hn. Roy (Stechford) Prentice,Rt.Hn..Reg.
Carter-Jones, Lewis (Eccles) John, Brynmor Prescott, John
Clark, David(Colne Valley) Johnson, Carol (Lewisham, S.) Price, J. T. (Westhoughton)
Cocks, Michael (Bristol, S.) Johnson, James (K'ston-on-Hull, W.) Price, William (Rugby)
Cohen, Stanley Johnson, Walter (Derby, S.) Probert, Arthur
Concannon, J. D Jones, Barry (Flint, E.) Rankin, John
Conlan, Bernard Jones, Dan (Burnley) Reed, D.(Sedgefield)
Cox, Thomas (Wandsworth, C.) Jones,Rt.Hn.Sir Elwyn(W.Ham,S.) Rees, Merlyn (Leeds, S.)
Crawshaw, Richard Jones, Gwynoro (Carmarthen) Rhodes, Geoffrey
Cronin, John Jones, T. Alec (Rhondda, W.) Richard, Ivor
Crosland, Rt. Hn. Anthony Judd, Frank Roberts, Albert (Normanton)
Cunningham, G. (Islington, S.W.) Kaufman, Gerald Robertson, John (Paisley)
Cunningham, Dr. J. A. (Whitehaven) Kelley, Richard Roderick,Caerwyn E.(Br'c'n&R'dnor)
Dalyell, Tam Kerr, Russell Rodgers, William (Stockton-on-Tees)
Darling, Rt. Hn. George Kinnock,Neil Roper, John
Davidson, Arthur Lamble, David Ross, Ross, Rt. Hn. William (Kilmarnock)
Davies, Denzil (Llanelly) Lamond, James Rowlands, Edward
Davis, Clinton (Hackney, C.) Latham, Arthur Sandelson, Neville
Davis, Terry (Bromsgrove) Lee, Rt. Hn. Frederick Sheldon. Robert (Ashton-under-Lyne)
Deakins, Eric Leonard, Dick Shore, Rt. Hn. Peter (Stepney)
de Freitas, Rt. Hn. Sir Geoffrey Lestor, Miss Joan Short.Rt.Hn.Edward (N'c'tle-u-Tyne)
Dell, Rt. Hn. Edmund Lever, Rt. Hn. Harold Short, Mrs. Renée (W'hampton.N.E.)
Dempsey, James Lewis, Arthur (W. Ham, N.) Silkin, Rt. Hn. John (Deptford)
Doig, Peter Lewis, Ron(Carlisle) Silkin, Hn. S. C.(Dulwich)
Dormand, J. D. Lipton, Marcus Sillars, James
Douglas,Dick (Stirlingshire, E.) Lomas, Kenneth Silverman, Julius
Driberg, Tom Lyon, Alexander W.(York) Skinner, Dennis
Duffy, A. E. P Lyons, Edward(Bradford, E.) Small, William
Dunn, James A. Mabon, Dr. J. Dickson Smith, John (Lanarkshire, N.)
Dunnett, Jack McBride, Neil Spearing, Nigel
Eadie, Alex McCartney, Hugh Spriggs. Leslie
Edwards, Robert (Bilston) McElhone, Frank Stallard, A. W.
Edwards, William (Merioneth) McGuire, Michael Stewart, Rt. Hn. Michael (Fulham)
Ellis, Tom Mackenzie, Gregor Stoddart, David (Swindon)
English,Michael Mackie, John Stonehouse, Rt. Hn. John
Evans, Fred Mackintosh, John P Strang, Gavin
Ewing, Henry Maclennan, Robert Strauss, Rt. Hn. G. R
Faulds, Andrew McMillan, Tom (Glasgow, C.) Summerskill, Hn. Dr. Shirley
Fernyhough, Rt. Hn. E. Mahon, Simon (Bootle) Swain, Thomas
Fisher.Mrs.DorisfB'ham.Ladywood) Mallalieu, J. P. W. (Huddersfleld.E.) Taverne, Dick
Fitch, Alan (Wigan) Marks. Kenneth Thomas.Rt.Hn.George (Cardiff.W.)
Fletcher, Raymond (Ilkeston) Marquand, David Thomson, Rt. Hn. G. (Dundee, E.)
Fletcher, Ted (Darlington) Marsden, F. Tinn, James
Foley, Maurice Marshall, Dr. Edmund Tomney, Frank
Foot, Michael Marten, Neil Torney, Tom
Ford, Ben Mason, Rt. Hn. Roy Tuck, Raphael.
Forrester, John Mayhew, Christopher Turton, Rt. Hn. Sir Robin
Freeson,Reginald Meacher, Michael Urwin, T. W.
Garrett, W. E. Mellish, Rt. Hn. Robert Varley, Eric G.
Gilbert, Dr. John Mendelson, John Wainwright, Edwin
Ginsburg, David (Dewsbury) Mikardo, Ian Walker, Harold (Doncaster)
Golding, John Millan,Bruce Walker-Smith Rt. Hn. Sir Derek
Gordon Walker, Rt. Hn. P. C. Miller, Dr. M. S Wallace, George
Gourlay, Harry Milne, Edward Watkins, David
Grant, George (Morpeth) Mitchell, R. C.(S'hampton, Itchen) Wellbeloved, James
Grant, John D.(Islington, E.) Molloy,William White, James(Glassgow, Pollok)
Molyneaux, James Whitehead, Phillip
Hamilton, James (Bothwell) Morris, Alfred (Wythenshawe) Whitlock. William
Hamilton, William (Fife, W.) Morris, Charles R.(Openshaw) Willey Rt Hn Frederick
Hamling, William Moyle, Roland Williams Alan (Swansea, W)
Hardy, Peter Mulley, Rt. Hn. Frederick Wilson, Alexander (Hamilton)
Harrison, Walter (Wakeffeid) Murray, Ronald King Wilson, Rt. Hn. Harold (Huyton)
Hart, Rt. Hn. Judith Ogden, Eric Wilson William(Coventry, S)
Hattersley, Roy O'Halloran. Michael Woof, Robert
Healey, Rt. Hn. Denis O'Malley, Brian
Heffer, Eric S. Oram, Bert TELLERS FOR THE AYES:
Horam, John Orbach, Maurice Mr. Joseph Harper and
Houghton, Rt. Hn. Douglas Orme, Stanley Mr Donald Coleman.
NOES
Adley, Robert Gorst, John Monro, Hector
Alison, Michael (Barkston Ash) Gower, Raymond More, Jasper
Allason, James (Hemel Hempstead) Grant, Anthony (Harrow, C.) Morgan-Giles, Rear Adm.
Amery, Rt. Hn. Julian Gray, Hamish Morrison, Charles
Archer, Jeffrey (Louth) Green, Alan Mudd, David
Astor, John Grieve, Percy Murton, Oscar
Atkins, Humphrey Griffiths. Eldon (Bury St Edmunds) Nabarro, Sir Gerald
Baker, Kenneth (St. Marylebone) Grimond, Rt. Hn. J. Neave, Airey
Balniel, Lord Grylls, Michael Normanton, Tom
Barber, Rt. Hn. Anthony Gummer, Selwyn Nott, John
Batsford, Brian Gurden, Harold Onslow, Cranley
Beamish, Col. Sir Tufton Hall, Miss Joan (Keighley) Oppenheim, Mrs. Sally
Bennett, Dr. Reginald (Gosport) Hall, John (Wycombe) Osborn john
Berry, Hn. Anthony Hall Davis, A G F Owen, Idris (stockport, N.)
Biggs-Davison, John Hamilton, Michael (Salisbury) Page, Graham (Crosby)
Blaker, Peter Hannam, John (Exeter) Page, John(Crosby)
Boardman, Tom (Leicester, S.W.) Harrison, Brian (Maldon) Parkinson, Cecil
Boscawen, Robert Harrison, Col. Sir Harwood (Eye) Pool John
Bossom, Sir Clive Haselhurst, Alan Percival Ian
Bowden, Andrew Havers, Michael Peyton, Rt.Hn.John
Braine, Bernard Hawkins, Paul Peyton, Rt. Hn. John
Bray, Ronald Hay, John Pike, Miss Mervyn
Brinton, Sir Tatton Hayhoe, Barney Pounder, Rafton
Brocklebank-Fowler, Christopher Heath, Rt. Hn. Edward Price, David (Eastleigh)
Brown, Sir Edward (Bath) Heseltine, Michael Proudfoot, Wilfred
Bruce-Gardyne, J. Hicks, Robert Pym, Rt. Hn. Francis
Bryan, Paul Higgins, Terence L. Quennell Miss J M
Buchanan-Smith, Alick(Angus,N&M) Hiley, Joseph Raison, Timothy
Buck, Antony Hill, John E. B. (Norfolk, S.) Ramsden, Rt. Hn. James
Bullus, Sir Eric Hill, James (Southampton, Test) Rawlinson, Rt. Hn. Sir Peter
Burden, F. A. Holland Philin Redmond, Roberty
Butler, Adam (Bosworth) Holt, Miss Mary Reed, Laurance (Bolton, E.)
Campbell, Rt. Hn.G.(Moray&Nalrn) Hornby, Richard Rees, Peter (Dover)
Carlisle, Mark Hornsby-Smith.Rt.Hn.Dame Patricia Renton, Rt. Hn. Sir David
Carr, Rt. Hn. Robert Howe, Rt. Hn. Sir Geoffrey (Reigate) Rhys Williams Sir Brandon
Chapman, Sydney Howell, David (Guildford) Ridley, Hn. Nicholas
Churchill, W.S Howell, Ralph (Norfolk, N.) Ridsdale, Julian
Clark, William (Surrey, E.) Hunt, John Roberts, Michael (Cardiff, N.)
Clarke, Kenneth(Rushcliffe) Iremonger, T. L. Robert, Wyn (Conway)
Clegg, Walter James, David Roberts Sir John (Sevenoaks)
Cockeram, Eric Jenkin, Patrick (Woodford) Rodgers, Sir John (Sevenoaks)
Cooke, Robert Jessel, Toby Rost, Peter
Coombs, Derek Kaberry, Sir Donald Royle, Anthony
Cooper, A. E.
Cordle, John Kellett-Bowman, Mrs. Elaine Russell, Sir Ronald
Corfield, Rt. Hn. Frederick Kimball, Marcus St. John-Stevas, Norman
Costain, A. P. King, Evelyn (Dorset, S.) Sandys, Rt. Hn. D.
Critchley, Julian King, Tom (Bridgwater) Scott, Nicholas
Crouch, David Kinsey, J. R. Scott-Hopkins, James
Crowder, F. P. Kirk, Peter Sharpies, Richard
Davies, Rt. Hn. John (Knutsford) Knight, Mrs. Jill Shaw, Michael (Sc'b'gh & Whitby)
d'Avigdor-Goldsmid, Sir Henry Knox, David Shelton, William (Clapham)
d'Avlgdor-Goldsmid.Maj.-Gen.James Lambton, Lord Simeons, Charles
Deedes, Rt. Hn. W. F. Lane, David Sinclair, Sir George
Digby, Simon Wingfield Langford-Holt, Sir John Skeet, T. K H.
Dixon, Piers Legge-Bourke, Sir Harry Smith, Dudley (W'wick & L'mington)
Dodds-Parker, Douglas Le Merchant, Spencer Soref, Harold
Douglas-Home, Rt. Hn. Sir Alec Lewis, Kenneth (Rutland) Speed, Keith
Drayson, G. B. Lloyd, Ian (P'tsm'th, Langstone) Spence, John
du Cann, Rt. Hn. Edward Longden, Gilbert Sproat, lain
Dykes, Hugh Loveridge, John Stainton, Keith
Eden, Sir John Luce, R. N Stanbrook, Ivor
Edwards, Nicholas (Pembroke) MacArthur, Ian Steel, David
Elliot, Capt. Walter (Carshalton) McCrindle, R. A. Stewart-Smith, Geoffrey (Belper)
Elliott, R. W. (N'c'tle-upon-Tyne,N.) McLaren, Martin Stodart, Anthony (Edinburgh, W.)
Emery, Peter Maclean, Sir Fitzroy Stoddart-Scott, Col. Sir M.
Eyre, Reginald Macmillan, Maurice (Farnham) Stokes, John
Fenner, Mrs. Peggy McNair-Wilson, Michael Stuttaford, Dr. Tom
Finsberg, Geoffrey (Hampstead) McNair-Wilson, Patrick (NewForest) Tapsell, Peter
Fisher, Nigel (Surbiton) Maddan, Martin Taylor, Sir Charles (Eastbourne)
Fletcher-Cooke, Charles Madel, David Taylor,Edward M.(G'gow,Cathcart)
Fookes, Miss Janet Mather, Carol Taylor, Frank (Moss Side)
Fortescue, Tim Maude, Angus Taylor, Robert (Croydon, N.W.)
Foster, Sir John Maudling, Rt. Hn. Reginald Tebbit, Norman
Fowler. Norman Mawby, Ray Temple, John M.
Fry, Peter Maxwell-Hyslop, R. J. Thatcher, Rt. Hn. Mrs. Margaret
Galbraith, Hn. T. G Meyer, Sir Anthony Thomas, John Stradling (Monmouth)
Gardner, Edward Mills, Peter (Torrington) Thomas, Rt. Hn. Peter (Hendon, S.)
Gibson-Watt, David Mills, Stratton (Belfast, N.) Thompson, Sir Richard (Croydon, S.)
Gilmour, Ian (Norfolk, C.) Mitchell, Lt.-Col. C. (Aberdeenshlre, W.) Thorpe, Rt. Hn. Jeremy
Gilmour, Sir John (Fife, E.) Mitchell, David (Basingstoke) Tilney, John
Godber, Rt. Hn. J. B. Money, Ernie Trew, Peter
Goodhart. Philip Monks, Mrs. Connie Tugendhat, Christopher
van Straubenzee, W. R. Warren, Kenneth Woodnutt, Mark
Vaughan, Dr. Gerard Weatherill, Bernard Worsley, Marcus
Vickers, Dame Joan White, Roger (Gravesend) Wyie, Rt. Hn. N. R.
Waddington, David Wiggin, Jerry Younger, Hn. George
Walder, David (Clitheroe) Wilkinson, John
Walker, Rt. Hn. Peter (Worcester) Winterton, Nicholas TELLERS FOR THE NOES:
Wall, Patrick Wolrige-Gordon, Patrick Mr. Victor Goodhew and Mr. Mr. Michael Jopling
Walters, Dennis Wood, Rt. Hn. Richard
Ward, Dame Irene Woodhouse, Hn. Christopher

Amendment accordingly negatived

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

Amendment proposed: No. 244 in, page 1 line 26, after ' Treaties ', insert:' described in Part I of Schedule 1 to this Act which were in force in the Communities on

22nd January 1972 and which are listed in Schedule to this Act '.—[Mr. Michael Foot]

Question put, That the Amendment be made:—

The Committee divided: Ayes 260, Noes 269.

Division No. 162.] AYES [4.51 p.m.
Allaun, Frank (Salford, E.) Edwards, Robert (Bilston) Kaufman, Gerald
Archer, Peter (Rowley Regis) Edwards, William (Merioneth) Kelley, Richard
Armstrong, Ernest Ellis, Tom Kerr, Russell
Ashley, Jack English, Michael Kinnock, Neil
Ashton, Joe Evans, Fred Lambie, David
Atkinson. Norman Ewing, Henry Lamond, James
Bagier, Gordon A. T. Faulds, Andrew Latham, Arthur
Barnett, Guy (Greenwich) Fernyhough, Rt. Hn. E. Lee, Rt. Hn. Frederick
Barnett, Joel (Heywood and Royton) Fisher, Mrs. Doris (B'ham,Ladywood) Leonard, Dick
Baxter. William Fitch, Alan (Wigan) Lestor, Miss Joan
Bell, Ronald Fletcher, Raymond (Ilkeston) Lever, Rt. Hn. Harold
Benn, Rt. Hn. Anthony Wedgwood Fletcher, Ted (Darlington) Lewis, Arthur (W. Ham, N.)
Bennett, James (Glasgow, Bridgeton) Foley Maurice Lewis, Ron (Carlisle)
Bidwell, Sydney Foot, Michael Lipton, Marcus
Biffen, John Ford, Ben Lomas, Kenneth
Bishop, E. S. Forrester, John Lyon, Alexander W. (York)
Blenkinsop, Arthur Forrester, John Lyon, Alexander w. (York)
Boardman, H. (Leigh) Freeson, Reginald Lyons, Edward (Bradford, E.)
Body Richard Garrett, W. E Mabon, Dr. J. Dickson
Booth, Albert Gilbert, Dr. John McBride, Neil
Bottomley, Rt. Hn. Arthur Ginsburg, David (Dewsbury) McCartney, Hugh
Boyden, James (Bishop Auckland) Golding, John McElhone, Frank
Bradley, Tom Gordon Walker, Rt. Hn. P. C Mackenzie, Gregor
Brown, Hugh D. (G'gow, Provan) Gourlay, Harry Mackie, John
Brown, Ronald (Shoreditch & F'bury) Grant, George (Morpeth) Mackintosh, John P.
Buchan, Norman Grant, John D. (Islington, E.) Maclennan, Robert
Buchanan, Richard (G'gow, Sp'burn) Griffiths, Eddie (Brightside) McMillan, Tom (Glasgow, C.)
Butler, Mrs. Joyce (Wood Green) Hamilton, James (Bothwell) McNamara, J. Kevin
Campbell, I. (Dunbartonshire, W.) Hamilton, William (Fife, W.) Mahon, Simon (Bootle)
Cant, R. B. Hamling, William Mallalieu, J. P. W. (Huddersfield, E.)
Carter, Ray (Birmingh'm, Northfield) Hardy, Peter Marks, Kenneth
Carter-Jones, Lewis (Eccles) Harrison, Waller (Wakefield) Marquand, David
Castle, Rt. Hn. Barbara Hart, Rt. Hn. Judith Marsden, F.
Clark, David (Colne Valley) Hattersley, Roy Marshall, Dr. Edmund
Cocks, Michael (Bristol, S.) Healey, Rt. Hn. Denis Marten, Neil
Cohen, Stanley Heffer, Eric S. Mason, Rt. Hn. Roy
Concannon, J. D. Horam, John Mayhew, Christopher
Conlan. Bernard Houghton, Rt Hn Douglas Meacher Michael
Cox, Thomas (Wandsworth, C.) Howell, Denis (Small Heath) Mellish, Rt, Hn. Robert
Crawshaw, Richard Huckfield. Leslie Mendelson, John
Cronin, john Hughes, Rt. Hn. Cledwyn (Anglesey) Mikardo, Ian
Crosland, Rt. Hn. Anthony Hughes, Mark (Durham) Miltan, Bruce
Cunningham, G. (Islington, S.W.) Hughes, Robert (Aberdeen, N) Miller, Dr. M S
Cunningham, Dr. J. A. (Whitehaven) Hughes, Roy (Newport) Milne, Edward
Dalyell, Tarn Hunter, Adam Mitchell, R C (S'hampton, Itche)
Darling, Rt. Hn. George Hunter, Adam Mitchell, R. C. (S'hampton, Itchen)
Davidson, Arthur Irvine,Rt.Hn.SirArthur(Edge Hill) Moate, Roger
Davies, Denzil (Llanelly) Janner, Greville Molloy, William
Davis, Clinton (Hackney, C.) Jay, Rt. Hn. Douglas Molyneaux, James
Davis, Terry (Bromsgrove) Jeger, Mrs. Lena Morgan, Elystan (Cardiganshire)
Deakins, Eric Jenkins, Hugh (Putney) Morris, Alfred (Wythenshawe)
de Freitas, Rt. Hn. Sir Geoffrey Jenkins, Rt. Hn. Roy (Stechford) Morris, Charles R. (Openshaw)
Dell, Rt. Hn. Edmund John, Brynmor Moyle, Roland
Dempsey, James Johnson, Carol (Lewisham, S.) Mulley, Rt. Hn. Frederick
Doig, Peter Johnson, James (K'ston-on-Hull, W.) Murray, Ronald King
Dormand, J. D. Johnson, Walter (Derby, S.) Ogden, Eric
Douglas, Dick (Stirlingshire, E.) Jones, Barry (Flint, E.) O'Halloran, Michael
Driberg, Tom Jones, Dan (Burnley) O'Malley, Brian
Duffy, A. E. P Jones,Rt.Hn.Sir Elwyn(W.Ham,S.) Oram, Bert
Dunn, James A Jones, Gwynoro (Carmarthen) Orbach, Maurice
Dunnett, Jack Jones, T. Alec (Rhondda, W.) Orme, Stanley
Eadie, Alex Judd, Frank Oswald, Thomas
Owen, Dr. David (Plymouth, Sutton) Ross, Rt. Hn. William (Kilmarnock) Tomney, Frank
Padley, Walter Sandelson, Neville Torney, Tom
Paget, R. T. Sheldon, Robert (Ashton-under-Lyne) Tuck, Raphael
Palmer, Arthur Shore, Rt. Hn. Peter (Stepney) Turton, Rt. Hn. Sir Robin
Pannell, Rt. Hn. Charles Short.Rt.Hn.Edward (N'c'tle-u-Tyne) Urwin, T. W.
Parry, Robert (Liverpool, Exchange) Short, Mrs. Renée (W'hampton.N.E.) Varley, Eric G.
Pavitt, Laurie Silkin, Rt. Hn. John (Deptford) Wainwright, Edwin
Pendry, Tom Silkin, Hn. S. C. (Dulwich) Walker, Harold (Doncaster)
Pentland, Norman Sillars, James Walker-Smith, Rt. Hn. Sir Derek
Perry, Ernest G. Silverman, Julius Wallace, George
Powell, Rt. Hn. J. Enoch Skinner, Dennis Watkins, David
Prentice, Rt. Hn. Reg. Small, William Wellbeloved, James
Prescott, John Smith, John (Lanarkshire, N.) White James (Glasgow Pollok)
Price, J. T. (Westhoughton) Spearing, Nigel Whitehead, Phillip
Price, William (Rugby) Spriggs, Leslie Whitlock, William
Probert, Arthur Stallard, A. W. Willey, Rt. Hn. Frederick
Rankin, John Stewart, Rt. Hn. Michael (Fulham) Williams, Alan (Swansea, W.)
Reed, D. (Sedgefield) Stoddart, David (Swindon) Williams, Mrs Shirley (Hitchin)
Rees, Merlyn (Leeds, S.) Stonehouse, Rt. Hn. John Williams, W T (Warrington)
Rhodes Geoffrey Strang, Gavin Wilson, Alexander (Hamilton)
Roberts, Albert (Normanton) Strauss, Rt. Hn. G. R Wilson, Rt. Hn. Harold (Huyton)
Robertson, John (Paisley) Summerskill, Hn Dr Shirley Wilson, William (Coventry, S.)
Roderick, Caerwyn E.(Br'c'n&R'dnor) Swain, Thomas Wool, Robert
Rodgers, William (Stockton-on-Tees) Taverne, Dick
Roper, John Thomson, Rt. Hn. George. (Cardiff, W) TELLERS FOR THE AYES:
Rowlands. Edward Thomson, Rt. Hn. G. (Dundee, E.) Mr. Joeseph Harper and Mr. Donald Coleman.
Rose, Paul B. Tinn, James
NOES
Adley, Robert Deedes, Rt. Hn. W. F. Hayhoe, Barney
Alison, Michael (Barkston Ash) Digby, Simon Wingfield Heath, Rt. Hn. Edward
Allason. James (Hemel Hempstead) Dixon, Piers Heseltine, Michael
Amery, Rt. Hn. Julian Dodds-Parker, Douglas Hicks, Robert
Archer, Jeffrey (Louth) Douglas-Home, Rt. Hn Sir Alec Higgins, Terence L
Astor John Drayson, G.B Hiley, Joseph
Atkins, Humphrey du Cann, Rt. Hn. Edward Hill, John E. B. (Norfolk, S.)
Baker, Kenneth (St. Marylebone) Dykes, Hugh Hill, James (Southampton, Test)
Balniel, Lord Eden, Sir John Holland, Philip
Barber, Rt. Hn. Anthony Edwards, Nicholas (Pembroke) Holt miss Mary
Batsford, Brian Elliot, Capt. Walter (Carshalton) Hornby, Richard
Beamish, Col. Sir Tufton Elliott, R. W. (N'c'tle-upon-Tyne,N.) Hornsby-Smith.Rt.Hn.Dame Patricia
Bennett, Dr. Reginald (Gosport) Emery, Peter Howe, Hn. Sir Geoffrey (Reigate)
Berry, Hn. Anthony Eyre, Reginald Howell, David (Guildford)
Biggs-Davison, John Fenner, Mrs. Peggy Howell, Ralph (Norfolk, N.)
Blaker, Peter Finsberg, Geoffrey (Hampstead) Hunt, John
Boardman, Tom (Leicester, S.W.) Fisher, Nigel (Surbiton) Iremonger, T. L.
Boscawen, Robert Fletcher-Cooke, Charles James, David
Bossom, Sir Clive Fookes, Miss Janet Jenkin, Patrick (Woodford)
Bowden, Andrew Fortescue, Tim Jessel, Toby
Braine, Bernard Foster, Sir John Kaberry, Sir Donald
Bray, Ronald Fowler, Norman Kellett-Bowman, Mrs. Elaine
Brinton, Sir Tatton Fry, Peter Kimball, Marcus
Brocklebank-Fowler, Christopher Galbraith, Hn. T. G King, Evelyn (Dorset, S.)
Brown, Sir Edward (Bath) Gardner, Edward King, Tom (Bridgwater)
Bruce-Gardyne, J. Gibson-Watt, David Kinsey, J. R.
Bryan, Paul Gilmour, Ian (Norfolk, C.) Kirk, Peter
Buchanan-Smith, Alick(Angus.N&M) Gilmour, Sir John (Fife, E.) Knight, Mrs. Jill
Buck, Antony Godber, Rt. Hn. J. B. Knox, David
Bullus, Sir Eric Goodhart, Philip Lambton,.Lord
Burden, F. A. Gorst, John Lane, David
Butler, Adam (Bosworth) Gower, Raymond Langford-Holt, Sir John
Campbell, Rt.Hn.G.(Moray&Nairn) Grant, Anthony (Harrow, C.) Legge-Bourke, Sir Harry
Carlisle, Mark Gray, Hamish Le Marchant, Spencer
Carr, Rt Hn Robert Green, Alan Lewis, Kenneth (Rutland)
Chapman, Sydney Grieve, Percy Lloyd Ian (P'tsm'th, Langstone)
Chichester-Clark, R Griffiths, Eldon (Bury St. Edmunds) Longden, Gilbert
Churchill, W S Grimond, Rt. Hn. J Loveridge, John
Clark, William (Surrey, E) Grylls, Michael Luce, R N
Clarke, Kenneth (Rushcliffe) Gummer, Selwyn MacArthur, Ian
Clegg, Walter Gurden, Harold McCrindle, R. A.
Cockeram, Eric Hall, Miss Joan (Keighley) McLaren, Martin
Cooke, Robert Hall, John (Wycombe) Maclean, Sir Fitzroy
Coombs, Derek Hall-Davis, A. G. F. Macmillan, Maurice (Farnham)
Copper, A. E
Cordle, John Hamilton, Michael (Salisbury) McNair-Wilson, Michael
Corfield, Rt. Hn. Frederick Hannam, John (Exeter) McNair-Wilson, Patrick (New Forest)
Costain, A. P. Harrison, Brian (Maldon) Maddan, Martin
Critchley, Julian Harrison, Col. Sir Harwood (Eye) Madel, David
Crouch, David Haselhurst, Alan Mather, Carol
Crowder, F. P. Havers, Michael Maude, Angus
Davies. Rt. Hn. John (Knutsford) Hawkins, Paul Maudling, Rt. Hn. Reginald
d'Avigdor-Goldsmid, Sir Henry Hay, John Mawby, Ray
d'Avigdor-Goldsmid.Maj.-Gen. James
Maxwell-Hyslop, R. J Rees, Peter (Dover) Taylor, Frank (Moss Side)
Meyer, Sir Anthony Rees-Davies, W. R. Taylor, Robert (Croydon, N.W.)
Mills, Peter (Torrington) Renton, Rt. Hn. Sir David Tebbit, Norman
Mills, Stratton (Belfast, N.) Rhys Williams, Sir Brandon Temple, John M.
Mitchell, Lt. -Col. C.(Aberdeenshire.W) Ridley, Hn. Nicholas Thatcher, Rt. Hn. Mrs. Margaret
Mitchell, David (Basingstoke) Ridsdale, Julian Thomas, John Stradling(Monmouth)
Money, Ernie Roberts, Michael (Cardiff, N.) Thomas, Rt. Hn. Peter (Hendon, S.)
Monks, Mrs. Connie Roberts, Wyn (Conway) Thompson, Sir Richard (Croydon, S.)
Monro, Hector Rodgers, Sir John (Sevenoaks) Thorpe, Rt. Hn. Jeremy
More, Jasper Rossi, Hugh (Hornsey) Tilney, John
Morgan-Giles, Rear Ac... Rost, Peter Trew, Peter
Morrison, Charles Role, Anthony Tugendhat, Christopher
Mudd, David Russell, Sir Ronald van Straubenzee, W. R.
Murton, Oscar St. John-Stevas, Norman Vaughan, Dr. Gerard
Nabarro, Sir Geralo Sandys, Rt. Hn. D. Vickers, Dame Joan
Neave, Airey Scott, Nicholas Waddington, David
Normanton, Tom Scott-Hopkins, James Walder, David (Clitheroe)
Nott, John Sharpies, Richard Walker, Rt. Hn. Peter (Worcester)
Onslow, Cranley Shaw, Michael (Sc'b'gh & Whitby) Wall, Patrick
Oppenheim, Mrs. Sally Shelton, William (Clapham) Walters, Dennis
Osborn, John Simeons, Charles Ward, Dame Irene
Owen, Idris (Stockport, N.) Sinclair, Sir George Warren, Kenneth
Page, Graham (Crosby) Skeet, T. H. H. Weatherill, Bernard
Page, John (Harrow, W.) Smith, Dudley (W'wick & L'mington) White, Roger (Gravesend)
Parkinson, Cecil Soref, Harold Wiggin, Jerry
Peel, John Speed, Keith Wilkinson, John
Percival, Ian Spence, John Winterton, Nicholas
Peyton, Rt. Hn. joh Sproat, lain Wolrige-Gordon, Patrick
Pike, Miss Mervyn Stainton, Keith Wood, Rt. Hn. Richard
Pounder, Rafton Stanbrook, Ivor Woodhouse, Hn. Christopher
Price, David (Eastleigh) Steel, David Woodnutt, Mark
Proudfoot, Wilfred Stewart-Smith, Geoflrey (Belper) Worsley, Marcus
Pym, Rt. Hn. Francis Stoddart, Anthony (Edinbugh, W.I Wylie, Rt. Hn. N. R.
Quennell, Miss J. M. Stoddart-Scott, Col. Sir M. Younger, Hn. George
Raison. Timothy Stokes, John
Ramsden, Rt. Hn. James Stuttaford, Dr. Tom TELLERS FOR THE NOES
Rawlinson, Rt. Hn. Sir Peter Tapsell, Peter Mr. Victor Goodhew and Mr. Michael Jopling.
Redmond, Robert Taylor, Sir Charles (Eastbourne)
Reed, Laurance (Bolton, E.)

Amendment accordingly negatived

Mr. Peter Shore (Stepney)

I beg to move Amendment No. 296, in clause 2, page 2, line 26, after ' Treaties ', insert: except such rights, powers, liabilities, and restrictions as may arise under Directive of the European Economic Community of 15th May 1960 as amended by Directive 63/21 /EEC of 18th December 1962 in respect of the movement of capital between Member States'.

The Second Deputy Chairman

With this Amendment we can also discuss the following Amendments:

No. 297, in line 26. after Treaties '. insert: ' except such rights, powers, liabilities, and restrictions as may arise under Directive 63/474/EEC of 30th July 1963 liberalising transfers in respect of invisible transactions '.

No. 298, in line 26, after ' Treaties insert: ' except such rights, powers, liabilities, obligations and restrictions as may arise under Decisions 69/227/EEC and 71/4/EEC on the co-ordination of short term economic policy '.

No. 301, in line 26, after ' Treaties insert: 'except such rights, powers, liabilities and restrictions as may arise under Regulation 109/70 of the European Economic Community (19th December 1969) setting up a common system applicable to imports from State trading countries'.

No. 302, in line 26, after ' Treaties '. insert: 'except such rights, powers, liabilities, and restrictions as may arise under Regulation 1023/70 of the European Economic Community (25th May 1970) establishing a common administrative procedure for quantitative quotas'.

No. 303, in line 26. after ' Treaties ', insert: ' except such rights, powers, liabilities and restrictions as may arise under the Decision of the Council of 21st April 1970 (OJ No. L94) concerning financial and budgetary forecasting '

No. 304, in line 26, after ' Treaties ', insert: ' except such rights, powers, liabilities and restrictions as may arise under Regulation 2603/69 of the European Economic Community (20th December 1969) establishing a common system for exports'.

No. 305, in line 26, after ' Treaties ', insert: ' except such rights, powers, liabilities, obligations and restrictions as arise under Regulation 1025/70 of the European Economic Community (25th May 1970) (as amended by Regulation 1429/71 of 2nd July 1971) establishing a common system to be applied to imports from third countries'.

No. 306, in line 26, after ' Treaties '. insert: 'except such rights, powers, liabilities, obligations and restrictions as arise under the Decision of the European Economic Community of 25th December 1962 relating to a programme of action in matters of common commercial Policy '.

No. 307, in line 26, after Treaties insert: ' except such rights, powers, liabilities, obligations and restrictions as arise under the Directives of the Council of the European Economic Community concerning the adoption of a common credit insurance policy for medium and long term operations including public buyers and private buyers, namely, Directive No. 70/509 (OJ No. L 254–23rd November 1970) and Directive No. 70/510 (OJ No. L 254–23rd November 1970)'.

No. 308, in line 26, after ' Treaties ', insert: 'except such rights, powers, liabilities, obligations, and restrictions as arise under the Decision of the Commission of the European Communities (71/202/EEC) authorising Member States to take protective interim measures with regard to certain imports'.

No. 316, in line 26, after ' Treaties ', insert: 'except such rights, powers, liabilities, obligations and restrictions as may arise from the Decision of the Council of 9th October 1961 on the standardisation of the duration of trade agreements with third countries '.

No. 317, in line 26, after ' Treaties insert: ' except such rights, powers, liabilities, obligations and restrictions as may arise from the Decision 69/494 of 16th December 1969 of the Council on the progresive standardisation of agreements concerning commercial relations between member states and third countries and on the negotiation of Community agreements '.

No. 318, in line 26, after ' Treaties insert: 'except such rights, powers, liabilities and restrictions as may arise under Regulation (EEC) 459/68 of 5th April, 1968 of the Council regarding protection against dumping, premiums or subsidies practised by nonmember countries of the European Economic Community.'

No. 319, in line 26, after ' Treaties insert: 'except such rights, powers, liabilities and restrictions as may arise under Regulations (EEC) 2603/69 of 20th December, 1969 of the Council and (EEC) 2604/69 of 20th December, 1969 of the Council establishing a common system of exports'.

No. 320, in line 26, after ' Treaties ', inesrt: ' except such rights, powers, liabilities, obligations and restrictions created or arising by or under Regulation 1471/70 (EEC) of 20th July, 1970 establishing a common practice for the autonomous increase of imports into the Community of products subject to measures of voluntary restraint by exporting countries'

No. 321, in line 26, after ' Treaties ', insert: ' except such rights, powers, liabilities, obligations and restrictions as may arise under Regulation (EEC) 1429/71 of 2nd June, 1971 of the Council'

No. 328, in line 29, after ' Kingdom ', insert: ' except such rights, powers, liabilities and restrictions as may arise under Decision 70/552 of 16th December, 1970 of the Council on the rules applicable, in the matter of export guarantees and finance, to certain subcontracts for supply from the member states of the European Communities'.

No. 392, in line 29, after ' Kingdom ', insert: ' except such rights, powers, liabilities and restrictions, as may arise under Directive 71/86 of 1st February, 1971 of the Council concerning the harmonisation of essential provisions for the guaranteeing of short-term transactions (political risks) involving public buyers and private buyers'.

No. 374, in line 33, at end insert:

(2) Without prejudice to the generality of the foregoing subsection the said enforceable Community rights include those deriving from Articles 92 to 94 of the Treaty of Rome dealing with state aids and regional policy.

Mr. Shore

May I first express my appreciation to you, Mr. Mallalieu, for enabling us to take Amendment No. 374 along with the others. We are living in the shadow of last night's guillotine Motion. One of the first effects of this is to force us into making decisions and choices which are bound to be wholly unsatisfactory and almost ludicrous. The Committee will be aware that the Chair has selected provisionally the Amendments listed here for discussion but these represent a tiny fraction of the Amendments which I am certain were in order but which have not been chosen because there was no point in choosing them. They dealt with matters of considerable importance.

Nothing could be more absurd than for us to be faced with the fact that by the time we finish at 11 o'clock tonight we shall have lost any opportunity we might have had of discussing the implications of no less than 1,200 regulations which are part of the self-enacting Community law which we have to import. That is the meaning of the guillotine Motion. That is how it affects us in our discussions. I make this preliminary remark to justify the rather wide-ranging debate which must inevitably be attached to this Amendment.

Amendment No. 296 deals with one of the central features of the Common Market, the free movement of capital. Together with the associated provisions for the free movement of labour and establishments these constitute in terms of a market economy what might be described as the three freedoms. I put on one side the free movement of goods because that occurs in all arrangements for free trade in free trade areas which are not necessarily of the kind we are discussing here.

Of the three freedoms there is no doubt but that the free movement of capital is the most important. It exercises a decisive and shaping influence over the other factors of production and over the whole development of the European Community. It is obviously important enough to have been the subject of separate and prolonged debates and I intend devoting most of my remarks to it. Given the restrictions upon us we have felt compelled to take the other Amendments with this one simply because we can see no other opportunity of discussing them in the allotted time programmed with such precision by the Leader of the House.

Apart from Amendments 298 and 303 dealing with the Community's tentative exercises in economic forecasting, all the Amendments 301 to 308 and 316 to 321 are concerned with the commercial policy and practice of the Community and above all its relations with so-called third countries. This latter group of Amendments covers matters of particular interest to British exporters and importers. It includes such things as the common rules for exports, imports, quotas and dumping and credit insurance policies. These are matters of considerable interest and importance to British industry and I hope that others will have something to say.

Mr. Simon Wingfield Digby (Dorset, West)

Does the right hon. Gentleman not intend to mention Amendment No. 297 dealing with invisible trade?

Mr. Shore

Yes, certainly. The hon. Gentleman rightly rebukes me, but I think he will understand the difficulty. Even to describe the matters we are dealing with is difficult. Amendment 297 deals with the important matter of invisible transactions, embracing a large volume of regulations under Community law.

I shall hinge most of my remarks to capital movement. I want to give it the stress that I do because it is immensely important in its own right and because of the consequences that the free movement of capital may be expected to have on other aspects of economic policy. It is important in its own right because without restrictions imposed by national governments, capital will, in a free market, flow into those industries, firms and areas where the opportunities for profit are greatest and where the returns are already highest. That has been the experience in our single United Kingdom capital market, which embraces not only the regions but the nations of Britain. It is precisely because, in recent decades, the opportunities for profit have been greater in the London and Midland areas that these areas have boomed and that other areas at the periphery of the United Kingdom, remote from our centres of population and the major consumer markets, have been increasingly deprived of money and investment.

I am glad to see the Minister of State for the Treasury present. I welcome him to our debates. He knows a certain amount about this matter, because he has the great privilege of representing a constituency which lies at the furthermost south-west tip of these islands. It is a constituency which is very familiar with the problems to which I am about to allude.

The same problems have been experienced in other nations in Europe and now, increasingly, in the Common Market as a whole. Some areas, Western Germany and parts of France and Northern Italy, have rapidly expanded over the years, while other areas have fallen into decay. Clearly the consequences of the movement of capital are felt most keenly and sensitively by labour. People must work in order to live; at least, that is true of the great majority of mankind. If capital investment is located in the areas of prosperity, people are sucked in behind. One need only recall our experience in Britain, leading as it has to the swollen population of the South and all the problems that go with that, the social services and community services bursting at the seams, rising land prices, pressure on housing and so on. We are very famiiar with this. At the same time there are regional unemployment problemsf for a large part of the North. One has only to recall this to see how powerfully the free movement of capital and the freedom of location of industry can effect the lives of us all. In our nation this is mitigated by such strong, countering regional policies as we have been able to develop. I am not talking about the immediate situation, which is one in which the whole of the United Kingdom is virtually a depressed area. We hope that that will be, in spite of the folly and clumsiness of the Treasury Bench, something which even under their mismanagement will improve in the months and years ahead. Perhaps I am being optimistic, but I hope so.

5.15 p.m.

We have to contemplate the effect of free capital movement not just within Britain, no longer confined to Britain, but with Britain as part, certainly as the Treasury Bench see it, of an enlarged Community. We have had very scant information so far on this matter. But let us assume, for a moment at any rate, that the rate of growth at least for some years ahead remains somewhat higher in Western Europe than it has been in the United Kingdom. Let us assume, in other words, that the rate of return on capital will be higher on the Continent—as it has been—than it is in Britain.

The question that comes to mind straightaway, if this is a reasonable picture of the future, is how Government policy will respond to it. It is a very important matter. In this country today one million are unemployed. That is an appallingly high number. There are some who are very optimistic. I recall the remarks of my right hon. Friend the Member for Dundee, East (Mr. George Thomson) who thought that the very fact that we had high unemployment might act as an attraction to European capital; that given the unused human resources in Britain and given a free capital market, capital would in a sense be attracted in to make full use of the skills and energies of these unemployed British people. My feeling about that is one of great scepticism. There has been nothing to prevent European capital coming into Britain for years past, when there has been nothing like that number of unemployed. But nevertheless, broadly speaking, there has been no difficulty about European capital coming into Britain. All that one can say, therefore, is that if it has not come in in any substantial amount in the past, presumably it is because there has been—

Mr. Selwyn Gummer

Will the right hon. Gentleman give way?

Mr. Shore

The hon. Gentleman has made many remarks already today. Let him wait for a moment. [HON. MEMBERS: "Give way."] I say straight away to the hon. Gentleman and to the Committee that my willingness to give way has changed somewhat since last night. I would have given way. It would not have occurred to me not to give way in any other circumstances. But when I have to weigh my words, when every word will come to an end at 11 p.m., the hon. Gentleman, with his pert and silly contributions—

Mr. Gummer

Will the right hon. Gentleman give way?

The Deputy Chairman

Order.

Mr. Gummer

That was a direct attack. If the right hon. Gentleman would address himself to the point, rather than spend 10 minutes explaining why he does not have time to say anything, perhaps he would be kind enough to explain this.

Surely there is a fundamental difference between the attraction of capital to a country which is within the European Economic Community and the attraction of capital to a county which is outside that Community, whatever the situation regarding unemployment.

Mr. Shore

That is not a good point. If the hon. Gentleman thinks about this hard enough, he may find that it may be the case—indeed, in principle it is more likely to be the case—that if we were outside the European Community and if there were real tariff barriers between Britain and Europe, there would be a greater temptation to invest in Britain than would be so if no tariff obstacles existed any more. I did not bother to make the point, because it seems to me that the level of tariffs in most cases, since the Kennedy Round negotiations, has come to the point where it is no longer a major factor influencing decisions.

If the attraction of a great number of skilled and unemployed people was strong, we should already have had—I do not see why we should, because we have lacked the evidence in the past—signs of a movement of capital into Britain. But I do not think that that is the case.

My right hon. Friend the Member for Dundee, East was worrying about the wrong problem or, rather, thinking in terms of the least likely solution. For there is another solution to the problem, that the unemployed labour, which, I regret to say, undoubtedly exists, does not simply wait for the arrival of money, of firms and of new jobs. It loses its patience. The new jobs do not materialise, and people begin to move. This is the story of Scotland. It has been the story of Ireland. To some extent, although always directed in the past to the countries of the Commonwealth, it has been the story of England, too.

But now we have to consider a somewhat different set of circumstances. How far do the Government see the problem of Britain's unemployment in future being solved not within the context of Britain's full employment policies but within the context of the Common Market as a whole?

At once, an important problem is raised. The information which we have had so far on the movement of British workers into Europe has been quite unsatisfactory. Quite unsatisfactory also has been the information we have been given on what is proposed, on what administrative arrangements are now being started to attract so-called surplus steel workers from Wales and so-called surplus shipyard workers from Scotland and the North.

What are these arrangements? We have heard a bit about them, but they have been kept discreetly in the background. It is one of the major doctrines of the Common Market that there should be free of movement of labour. All very convenient—capital moves to the place where the returns are greatest. and labour follows. Is it not marvellous? But is it, in truth, the right solution?

It might be the right solution if all we were considering was the best use of resources and the highest return on capital. But we are not. We are talking also, as we should, about human satisfaction, about where people want to work. I have no reason whatever to believe that the unemployed in Britain wish to find their solution outside this country. Indeed, most of them do not wish to find a solution to their job problems outside their own travel-to-work area, for reasons which we can all easily understand.

Why have the Government not begun to produce information on this aspect of the matter? They say that they do not collect figures, but I can tell the House that the numbers have been steadily growing. From figures collected by various Community countries, it is clear that, over the last three or four years, the number of British workers working in Germany, Holland and Belgium have risen fairly considerably year by year; and I have every reason to believe, on present indications, that the number will rise quite substantially in the years ahead.

There should be no misunderstanding about the movement of labour already taking place in the countries of the Six. About 1 million Italians have been unable to find work in Italy, in spite of the great movement from the south and the great expansion of Italian industry in the north, and they have gone to find jobs elsewhere in the Community, in France and in Germany. In addition, no fewer than 3 million foreign workers from outside the Community altogether, from Turkey, Yugoslavia, Greece, Spain and Morocco, have been sucked in to feed the great boom which has taken place.

Mr. Michael Grylls (Chertsey)

A sign of success.

Mr. Shore

"A sign of success ", says the hon. Gentleman. Where there is a tremendous boom, outstripping one's human resources, vast numbers of people are moved in to meet the demand for labour. The fact that they form what everyone in Europe, other than the hon. Gentleman, describes as a sub-proletariat without rights, people without status or rights at all, is, apparently, of no concern to him. But it should be of concern to us, and it is.

Mr. William Molloy (Ealing, North)

Is my right hon. Friend aware that the Health and Social Questions Commission of the Council of Europe discussed this grave problem a fortnight ago, a problem which is causing great consternation not only to the unfortunates who are working in Germany, France, Belgium and Holland but also to the indigenous populations themselves? An answer to this massive problem is still being sought. The countries of the Six have not solved it They only created it.

Mr. Shore

As my hon. Friend says, serious problems arise when large numbers of people are involved in relatively unplanned and unprovided for movements of labour to respond to purely economic forces. How do the Government now see the framework of their own economic and employment plans? Looking over the next four or five years, are they thinking in terms of the solution to Britain's unemployment problem, which in all conscience is big enough, through stimulation of the British economy, or are they thinking in terms of its being solved as part of the general employment policies of the Community, solved, that is, through a substantial movement of British people to the Continent of Europe—where jobs have in the past undoubtedly existed? That is one question we want answered tonight.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)rose

An Hon. Member

Did he vote for the guillotine?

Mr. Shore

A very good question. The hon. Gentleman voted for the guillotine last night, did he not? I am sorry. He has cut himself off. I should willingly give way to hon. Members opposite, those very hon. Members, who defied their Whips, but not to those who followed mulishly behind into the Lobbies.

Mr. David Steel (Roxburgh, Selkirk and Peebles)

What about giving way to me, then?

Mr. Shore

No. The hon. Member has no claim at all. We know his contributions.

Obviously, questions of general employment policy are affected by the opening up of the free movement of capital, but, leaving that matter aside and the question whether our employment policy is to be settled in future within a national framework or the Community framework, I wish to turn now to the implications of free capital movement on our regional problems in Britain.

The Committee is no stranger to this subject, but it is a regrettable fact that, although we have had occasional exchanges on the question of regional policy in past debates, we have not gone deeply into it. I want clear answers from Ministers to certain questions. There seem to me to be two problems in this connection to which we must address our minds.

First, there is the effect which our joining the Community will have on our own ability to develop and follow an effective regional policy. Here, we face the familiar worry that much of our policy depends upon the industrial development certificate system and the bargaining power which the Government havevis-á-visfirms which wish to establish or to enlarge their businesses. The Government are able to say to a firm," We will not issue an IDC for the area where you at present wish to go "—often, in the Midlands or the South-East—" We will issue an IDC only if you go to an intermediate area—a development area, or a special development area, as the case may be ".

That has been an important factor in the whole of our post-war regional development policy. It is not the only factor. In addition, as we know, one needs a substantial equipment of fiscal and direct encouragements to firms to go to development and other areas. However, the IDC system is very important.

5.30 p.m.

Clearly, if in the future a firm can tell the Government, "If you do not let us establish our new plant in the area of our choice there is a very useful site across the Channel which we should like to move to ", a major bargaining counter that we have used for many years will be lost to the Government. The whole influence of the Government on the location of firms is bound to be very much weakened as a result.

The second question about our policies is how far we shall still be masters in our own house in deciding measures for encouraging firms and stimulating them to locate themselves in development areas. We have had some very unsatisfactory replies on this. Ministers have tended to say on previous occasions, Don't worry. We have a veto on all major matters, and we shall use it to prevent any decision adverse to our regional policy being taken in the Council of Ministers ". That is an argument that many of us have not found very convincing. One reason is that under the Rome Treaty a great power over regional policy is vested not in the Council of Ministers but in the European Commission. This is one of the areas in which the Treaty gives a major role to the Comimssion. I refer in particular to Articles 92 and 93 of the Rome Treaty. Article 93 says that the Commission will look at the kind of State aid operated by member States, and goes on: If. after giving notice to the parties concerned to submit their comments, the Commission finds that aid granted by a State or through State resources is not compatible with the common market having regard to Article 92. or that such aid is being misused, it shall decide that the State concerned shall abolish or alter such aid within a period of time to be determined by the Commission. If the State concerned does not comply with this decision within the prescribed time. the Commission or any other interested State may, in derogation from the provisions of Articles 169 and 170, refer the matter to the Court of Justice direct. On application by a Member State,"— an aggrieved member State that wants to do something that the Commission does not allow— the Council may, acting unanimously,"— I emphasise that it must act unanimously— decide that aid which that State is granting or intends to grant shall be considered to be compatible with the common market …". Only by unanimity can the Council overthrow the Commission's recommendation that the State's aid is incompatible and that it should desist. That is a very serious point.

The Minister of State, with his fresh and questioning mind, will not be satisfied, I hope, with the kind of roly-poly complacencies that the Chancellor of the Duchy of Lancaster usually delivers at this stage of the argument, when the right hon. and learned Gentleman puts to us that the way in which the Community works is quite different from what the Treaty says, that over a cup of coffee and a glass of cognac these provisions are somehow dissolved or melt away. That is not the case. If anyone thinks it is, he should look atThe Guardian'sarticle on the matter only yesterday, which tells of the concrete case of the Belgian Government's operating State and regional aid in defiance of the views and wishes of the Commission. It says: If the British Government wants to know how the Commission operates, it need only consult the Belgian Prime Minister, M. Eyskens, during his visit to London. In an unprecedented move last week, the Commission told the Belgian Government to change its regional aid law--the Economic Expansion Act which classified the whole country, with the exception of Brussels, its suburbs. and Antwerp. as eligible for a wide range of generous investment aids. Here we have a very serious point. A national Government, on a matter of major importance affecting the prosperity of the people in a large part of Belgium, regions of the country which no doubt in the view of that Government are exposed to great pressures of economic change and problems that threaten unemployment, are told by the Commission that they must stop their regional aid. They have two remedies. They can go to the European Court, which will interpret the Treaty—not the cognac and coffee, but the treaty and what is said in it—or they can appeal to the Council, which will, if it acts unanimously, overthrow the Commission's ruling. That is a matter on which we require a very specific reply at a later stage. Let us get it sewn up and made certain before we go any further.

Mr. John Mendelson

The matter very much deserves a serious reply, but is it likely that there will be one in view of the absence of the Secretary of State for Trade and Industry and only the presence of so many untried, new Ministers, who have just arrived on the Treasury Bench?

Mr. Shore

I understand my hon. Friend's concern, but I must say, having had some of the senior Ministers present before in these debates, that I am very hopeful that the fresh talent on the Treasury Bench will prove more helpful than their more tired, more jaded col-leagues who occupy the senior positions.

I put forward what I believe are serious concerns for the future which follow from, and are directly linked with, there relaxation of control over capital movements, the establishment of a free movement of capital between these islands and the Continent. They link up with a further development of even greater importance. We have on many occasions raised the implications of an economic and monetary union, the treaty which is in the wings in Brussels, the treaty which, if it is passed, will impose upon this country fixed parities and the general objective of achieving a common European currency by the end of the decade.

I raise this matter for a reason which should be clear to all. I mention it now because the worries I have indicated about the effects of a free capital movement will be increased tenfold if we are locked into a permanent exchange rate. If, regardless of the differential rates of growth of the British economy and the countries of Western Europe, we could not adjust the situation by changing our parities, we should be ruined. We could be in the situation that Ireland was in, locked in with Britain as one single union, or as Scotland has been, locked in with Britain in the period of the Union, without anything like the massive regional policies which, because Scotland is part of Britain, we have attempted increasingly to organise from London in order to benefit that part of the United Kingdom. But there is no Community regional policy, even if one could imagine any regional policy of sufficient strength to counter-balance the inability to change our parities in the years ahead.

This matter is of major importance. It is, in many ways, the most serious matter which the Common Market poses for this country. It would be helpful if we had a clear statement on how Mini- sters visualise the obligations they have accepted in relation to an economic and monetary union. How far are they committed? We know that they are already beginning to narrow the margins in conformity with the first stage of the progress towards economic and monetary union. We want to know how they see the future and what guarantees and safeguards they have in mind to insist on for the benefit of this country.

That is not the end of the matter. The free movement of capital exerts strong pressure, not only on the location of industry, the movement of labour and the regional prosperity of the country, but on our tax policies. The point was very well put in a Community document called "Tax Harmonisation ", one of the many Community documents explaining what it has in mind for the future. It makes this point: Tax harmonisation is also important for the creation of a common capital market. … A free capital market means not only an end to discrimination against foreigners, but also free access to all sources of capital, freedom of investment and "— these are crucial words— no distortion in these conditions established by the state for competition on the capital market ". The document goes on to say: Harmonising taxes that affect the free movement of capital must therefore increase capital's freedom to move and promote more equal conditions of competition ". It was precisely this aim which the authors of the Treaty had in mind in framing the sections in the Treaty dealing with the free movement of capital. Clearly, they are right.

In Britain, we control capital movements administratively. We have exchange controls and other means of controlling capital. But it is logical for those who believe in the unimpeded free movement of capital to say that to remove those restrictions is not enough and that if we want capital to move freely in the area of the Common Market we must ensure that a whole series of taxes are brought into line because if taxes discriminate against capital through the policies of one nation State we will Destroy—

Mr. Harold Lever (Manchester, Cheetham)

Is my right hon. Friend saying that the description he has used of the encouragement to free capital movement at any point gives the right to any other authority than the British Treasury to decide the rate of, for example, company taxation in the United Kingdom?

Mr. Shore

My right hon. Friend, to whom I am always willing to give way, has anticipated my point. There is a great deal yet which we must explore concerning the meaning of free capital movements and the commitments which have gone into the Treaty and other agreements so to arrange tax policies that they do not interfere with those free movements.

5.45 p.m.

I come to some of the things we know and some we do not know. The Chancellor of the Exchequer told us that one of the reasons why he is adopting this year a system of corporation tax which favours distributed as opposed to retained profits is that this is the system being adopted in the European Communities. My right hon. Friend the Member for Manchester, Cheetham (Mr. Harold Lever) may be right in saying that there is no requirement concerning the rate, but the form of company tax or corporation tax is clearly already openly accepted as being influenced by the form of the tax in the Six.

Mr. Wingfield Digbyindicated dissent

Mr. Shore

The argument may not be wholly convincing to the hon. Gentleman, but it is the argument put forward by the Chancellor of the Exchequer.

Mr. Wingfield Digby

Is the right hon. Gentleman unaware of the tremendous discrepancies in the taxation systems of the Six? He has quoted cne respect in which they are alike. There are many other ways in which they differ.

Mr. Shore

There are great differences. The question is whether the trend and purpose is to eliminate the differences and to bring the taxation systems together. I should have thought that the point concerning corporation tax was obvious. It is obvious to the Chancellor of the Exchequer.

This year we have had a Green Paper foreshadowing major changes in the pattern and weight of estate duty. Death duties in Britain are much higher than they are in the Community. The Chancellor of the Exchequer clearly believes that it is his duty increasingly to harmonise with European countries. I wish to help the hon. Member for Dorset, West (Mr. Wingfield Digby) by quoting from the Green Paper" Taxation of Capital on Death: A possible Inheritance Tax in place of Estate Duty "dated March, 1972. Paragraph 29 reads: There is at present no requirement to harmonise our death duties with those charged in the other countries of the EEC. But in evaluating the case for a change there is the consideration that as the years go by it will become increasingly difficult to subject a man who dies in the United Kingdom to a significantly different death duty regime from a man who dies in another EEC country ".

Hon. Members

Hear, hear.

Mr. Shore

I did not write that. I assume that it was written with the authority of the Chancellor of the Exchequer.

The point is significant, because although we in this country tend to look on our death duties as a relatively light, almost voluntary, form of taxation, we tax people very much more heavily than do countries on the Continent.

I give a figure which may encourage some hon. Members who are concerned only to lift the weight of death duties but which will not encourage anyone else who considers this matter. In 1965, the last year for which there are complete figures available, the amount paid in death duties in the countries of the Six put together amounted to two-thirds of that paid by people in Britain. This is significant. There will be great pressure for this country to harmonise with the taxes of the Six. I am surprised that during these debates over the past year no one has sought to draw attention to facts which are of obvious significance.

We already know that the Government have claimed that they are introducing a major indirect tax, the value-added sales tax, as an act of free will, and perhaps they are. But whether they had chosen to do it or not, the value added tax is a requirement, a necessity, part of the price of entry into the European Communities. But even that does not end it.

I turn to the current number ofEuropean Community, although I could have quoted other documents. Under the heading: Plans for common excise taxes. it says: The Commission has approved a first series of proposals to harmonise excise duties. The move is part of the plan to create economic and monetary union. As the United Kingdom's duties on tobacco and spirits, in particular, are higher than the Community average, this could lead to a reduction of some United Kingdom duties. I agree, but it goes on: Excise duties which would be harmonised at Community level by January 1, 1974 would he those on tobacco, petroleum products, wine, spirits and beer. I am not sure how much fiscal freedom would remain to the Chancellor of the Exchequer once he has harmonised over such a wide area of taxes—on capital and goods and direct taxes of all kinds, as is clearly envisaged in the arrangements that I have described.

I hope to get Treasury Bench answers to one of two quite specific questions. As hon. Members can see, I am able to refer to matters which are published in all kinds of community documents, and I am able to draw on material which the Chancellor of the Exchequer himself has supplied to the House. I want to know simply what draft regulations and directives there are in the pipeline in Brussels affecting direct and indirect taxation in Britain. What do they cover? Should we not know before we go any further what new proposals affecting direct and indirect taxes and company and personal taxes in the Community are now in the pipeline, either with the Commission and approved by it, or gone as a first draft to the Council of Ministers, proposals which would affect us if we became part of the enlarged community?

Mr. Arthur Lewis (West Ham, North)

Would my right hon. Friend go a step further and ask that hon. Members should have copies of these proposals?

Mr, Shore

I entirely agree. My hon. Friend has frequently made this point with great force and with even more justice. It is astonishing that for the past six months directives and regulations and other laws have been made by the European Communities affecting this country and we have not been privileged even to see them. I do not make more of that now

. What I am coming to is the further outrage that the Government know, as they must know, that on many major matters affecting the people of this country there are laws in the making in Brussels, or with the Council of Ministers, which are being held back deliberately until it is thought that the critical stages of this debate are over. Let us hear all about them from the Treasury Bench.

Finally, what about the draft regulations or directives by the Commission or Council of Ministers making further changes and further proposals concerning the movement of capital? We know about two directives already published, but I should like to know about the new directives and, further, any affecting the regional policies of this country and throughout the Community.

I have taken some time. It was almost inevitable. How could it be otherwise when we are dealing with matters of such great importance? I hope that we shall have some answers, even though we cannot press the matter, as we should wish, beyond 11 o'clock.

Mr. Neil Marten (Banbury)

My first and pleasant duty is to welcome on behalf of the Conservative non-keen Marketeers the new Ministers on the Front Bench to these debates.

These Amendments are broad-ranging and I suppose that we could talk about almost anything, but I want shortly to discuss two matters. I am glad to see that a Treasury representative is present, because the first of these matters concerns the European Monetary Union.

In recent days, we have heard that Britain has accepted the new 2¼ per cent. range. By doing so, we are penalising ourselves as against the 4½ per cent. range vis-à-visthe non-EEC countries. It is a mistaken course and it will cause unnecessary problems for this country. One has to look ahead and see what is likely to happen, because it seems to many commentators that next year our balance of payments could begin to deteriorate—although I hope that it does not happen—while at the same time the Deutschmark may begin to strengthen.

In that situation it would be up to the United Kingdom to settle its debts with Germany in Deutschmarks—Germany would buy sterling and we should use the Deutschmarks to pay Germany. If the situation were due to a weakening balance of payments, sterling would continue to weaken and Germany would not wish to go on buying sterling. Germany would presumably turn to us in this hypothetical situation and ask us to deflate our economy.

It has always been one of my great objections to joining the EEC that those circumstances, when an increasing amount of money will have to be paid to the Community across the exchanges, will lead us to follow a deflationary policy. Under the European Monetary Union system, monthly bilateral settlements between central banks will have to be made in a mixture in the proportion in which we hold our reserve assets.

If in my hypothetical case we could not settle with Germany, we should have to make borrowings from the IMF and we all recall how much we had to borrow from the IMF in recent years. We still recall the teams that came to this country to examine our economy quarterly and to tell us what to do and what not to do. I should have thought that one of the things that the IMF would demand we did if we borrowed from it would be to control the outflow of capital. a subject which the right hon. Member for Stepney (Mr. Shore) mentioned. If it did, and it is one thing it would be bound to do, that would be right against the spirit of the Treaty of Rome.

I should like the benefit of Treasury advice on why we have accepted the 2¼ per cent. range when it would have been better to have stuck with the 4½ per cent. range which the rest of the non-EEC world has.

Secondly, I should like to mention GATT. Many of the Amendments are concerned with tariffs and so on, but I should like to examine how far our entry into the Common Market is against GATT, or anyhow against its spirit. I believe that the implication of tying ourselves to the common agricultural policy itself is against the spirit of GATT.

[Mr. JOHN BREWISin the Chair]

6.0 p.m.

Already the CAP has created gross distortion in world trade in food. In other words, more trade is done within the EEC and less with non-EEC countries. When, or if, the United Kingdom enters the Common Market this distortion of the world food trading pattern will increase, probably substantially.

New Zealand produces food efficiently and cheaply. It was Mr. John Strachey, the then Minister of Food in the post-war Labour Government, who went to New Zealand specifically to ask that country to arrange its production so that it would become the home farm, as it were, of Britain, and we gave long-term guarantees to buy the products of New Zealand farmers.

When I was in that country last year I was shown a copy of the letter which Mr. Strachey wrote giving that guarantee. I have no doubt that this is one of the major reasons why the New Zealanders developed their farming in the way they have.

New Zealand has been on notice for the last 10 years that we might enter the EEC. In that time the New Zealanders have been trying to diversify their trade in lamb, butter and cheese, but without much success, primarily because the competition they meet from heavily subsidised Common Market surpluses makes it uneconomic for them to sell in new markets.

It is clear that the CAP is putting at risk the livelihood of New Zealand farmers, many of whom left Britain to make a life for themselves in that country a generation or two ago. Our entry into the EEC will have a serious effect on the livelihood of people of British stock who for years have been providing us with good cheap food.

Mr. Molloy

Often in times of great stress.

Mr. Marten

And often under very strenuous circumstances.

The Treaty of Accession contains a reference to the veto and renegotiations in connection with New Zealand in 1975. The question of the veto remains unclear and it seems that if agreement on the future of trade with New Zealand is not reached, all the arrangements we have made covering New Zealand will count for nothing and we will be thrown back completely on the CAP.

My comments about New Zealand apply equally to Australia, where the fruit and dairy farmers and the sugar producers of Queensland are being sacrificed on the altar of the Common Market.

Mr. Arthur Lewis

I hope the hon. Gentleman will make it clear that he is speaking of people who were our friends rather than our enemies in the last war.

Mr. Marten

Yes, our friends and kinsmen, people with whom we have a common heritage. We do not have quite the same relationship with, for example, the Italians and others in the EEC. [Interruption] Some hon. Members may have a common heritage with certain Europeans, but my heritage lies more with those to whom I have been referring, even though I have French blood in my veins. Perhaps I can be said to have a common heritage with the French.

I have said enough to show that our entry into the EEC could mean an even greater distortion in the pattern of world trade in food. If the EEC means anything—the Treaty of Rome brings this out clearly—it means the economic integration of its members, with each buying from the other and looking inwards. It is typical of Europeans to look at things in that way. We in Britain have always looked to the open seas and to our friends and relations across the seas in the Commonwealth.

The net result of our joining the EEC will be a dramatic increase in agricultural trade between EEC countries and an equally dramatic decrease in imports from non-EEC nations. In other words, "I'm all right Jack" will sum up the position well, and there will be a sickening disregard for others.

People may argue that the Common Market countries give more aid than we do. That is marginally true, but it is conscience money. In any event, what really matters is trade rather than aid. That is what the people who are being given this aid primarily require.

I have a picture—having been to Brussels the picture is painted somewhat more vividly—of a rather large central European gentleman stuffing himself with rich food wondering how much better off he can get, giving little thought to those who live in Australia, New Zealand, Fiji and Mauritius. I have an awful fear that if we join the EEC we in Britain will start to take the same attitude; that those in Government and elsewhere will think only of themselves and not of those who live in countries outside the United Kingdom.

Price support as part of the CAP has created surpluses, which means that we shall be supporting inefficient producers against low-cost producers in other parts of the world. These surpluses are dumped on world markets, having been financed out of levies which in future will be paid for in part by the British housewife. In 1969 export subsidies in the EEC amounted to over 1 million dollars.

It is a horrifying thought that if the Bill is passed we shall be tied to and helping to finance all this rubbish. "Rubbish" is the only word to use; there will be no change in the CAP. President Pompidou has reassured the people of France that he will not tolerate any change in the policy.

This is where the question of unanimity comes in, for there is no question of our using the veto and therefore no help of changing the CAP. The simple fact is that if we do not take imports of food from, for example, Australia and New Zealand, they in turn will not be able to take manufactured goods from us.

Hon. Members will recall that it was in the 1947 GATT negotiations that we recognised that this might happen. Indeed, GATT was designed to prevent it from happening. All that is now being conveniently forgotten. It is clear, therefore, that our entry into the EEC will be against the spirit of GATT, and blatantly so.

The non-EEC countries will be entitled to assume, if we go in, that GATT has ceased to be effective as a protection for non-EEC members. Once that assumption is made there will be a danger of those countries putting up tariffs, and the world will again move towards the pre-1947 position.

The approach of the EEC is backward-looking and thoroughly old-fashioned, because the tendency in economic development throughout the world today is towards free trade. The British Government should get with it and recognise these facts of life. I want them to tell the Committee clearly whether, in their view, our entry into the Common Market would or would not be against the spirit of GATT in the way I have described.

Mr. Harold Lever

I hope I shall be forgiven if I do not cover every field which has been entered in this debate but try to keep myself to some general propositions which may be of assistance to the Committee.

First of all let me concede to my right hon. Friend the Member for Stepney (Mr. Shore) that as long as we have bad government in this country we are likely to have bad effects on the economic life of this country, and, either in or out of the Common Market, inadequate regional policies are likely to produce hardship and loss to the people of this country. If my right hon. Friend will forgive me for saying so, his speech was based on the assumption that we shall always have bad Governments. We have had bad Governments in respect of capital movements for quite a time and I shall deal with that in a moment.

Let us take the question of what the free movement of capital is about and how it relates to regional policies and to this country's prospects. First of all it has to be realised that the concept of free movement of capital in the Common Market was not invented to do injury to the people of Britain or indeed of any country of the Common Market. The concept of the free movement of capital was to produce the greatest wealth possible in the most intelligent way possible for those members of the grouping which hitherto has excluded ourselves but which, if the Government have their way, even on terms of which my party disapproves, will include us. The free movement of capital is certainly in itself acknowledged by everyone who thinks about this matter to be a desirable thing as long as we have any private enterprise sector at all, and if we have a public enterprise sector we need some equivalent to free movement to guide and steer capital in the best directions. Unless one commits oneself to the concept that Britain is not to have any private sector at all, as a general principle the free movement of capital is going to advantage her and the countries within which free movement occurs. Of course, there will be exceptions to this, with which I will deal in a moment, and there is the question of the regions with which I will also deal in a moment.

Here, again, there is confusion. We must not look at the movement of capital and say, "Oh, look, in the past the free movement of capital has resulted in disadvantage to some regions; therefore we will have no free movement of capital ". What one is entitled to say, as I would say, is that we cannot leave regional questions purely to free market forces. That does not mean maim and mutilate the free market forces which they operate. On the contrary, we have to work them with maximum efficiency so as to have the maximum resources to support regional policies. That is quite another matter, however, from seeking to maim movements of capital in the areas where it is desirable to have them in order to preserve the regions.

It had been assumed, wrongly, that if we leave regional policy to the free market forces all will be well in the end. We say that that is not the case. I would like people to bear in mind, in relation to the movement of capital and to economic monetary union and things of that kind, and how that will bear on the regions, that regional policy still depends for its success on the amount of resources, the amount of brains, put into correcting the imbalances which have been brought about. The amount of resources available will depend on the overall prosperity of the country, and the opportunities for having effective regional policies grow as the non-regional areas prosper. It is almost impossible to have a successful regional policy in a country, for example, in its present state of depression in the non-regions. There is no inconsistency in pursuing the objective of prosperity in non-depressed regions. It is not at the expense of the regions but makes available resources to help them. If we had started with the regional problems in today's political and economic climate we would never have allowed a century or so of neglect to go untouched.

A good deal of the anxiety which people feel about the Common Market and economic and monetary union is because they superimpose 19th century thinking on to 20th century situations; in other words, they are constantly going back to what happened in the past in many countries including our own. I think our own is the least likely to be the Northern Ireland of Europe, in any event. My right hon. Friend illustrated this misconception again today. It is inconceivable that such a partnership as the EEC will commit the same error that we made in our country a century or so ago in relation to Ireland or Northern Ireland, the error of assuming that there was little which one could do about their problems and that if it were left to market forces all would be well.

6.15 p.m.

On the question of fixed parities, the narrowness or otherwise of the bands at the present moment is of little consequence. What is important is this fear of being locked in. My hon. Friend the Member for Pontypool (Mr. Abse) is very good at these psychological considerations. I do not want to become involved in them, but there is a claustrophobic fear among many people, the idea of being locked in a parity from which they cannot escape and which will ruin us if we stay in it. I must tell my right hon. Friend with great bluntness—I hope he will forgive me—that it is a total fantasy, this idea that one can lock any sovereign nation into a parity and keep it there to its ruin. That is absolutely absurd. It cannot and will not happen. [Interruption] My hon. Friend the Member for Salford, West (Mr. Orme) says that I agreed to it as a member of the last Government. But I tell my hon. Friend this—and it goes back to the point I made at the beginning—that if we get bad Governments they can do all sorts of things—lock us into a ruinous parity, cause a million unemployed. They can do all sorts of things. We cannot give a guarantee that by entering the EEC we shall escape bad government. I hope that my hon. Friend and I will do our best to get good government. But let me destroy once and for all the fantasy of a locked in parity. We have not agreed to lock our parities permanently with one another in the EEC. In the EEC they have changed their parities several times—only very recently. Does the hon. Member wish to intervene?

Mr. David Madel (Bedfordshire, South)

I was just making the point that we might look at the turmoil which arose as a result of changes of parities in the Community.

Mr. Lever

Look at the turmoil which happened in our own country when we changed parity because of inflation. Whatever academics say, I am a reluctant adjuster of parities. I do not say that we ought never to adjust them, but we should not spring to adjust as though it were a thing we could do light-heartedly as a matter of no consequence.

The objective of reducing the number of parity changes is in itself a very good one. Locking into unrealistic parities is not only a bad thing but can be ruinous. This cannot happen, except by the choice of silly Governments. We should realise that all attempts at economic monetary union and the reduction of the number of parity changes—the EEC hones for permanent avoidance of them in the end—are among the most progressive objectives. It may not be possible to achieve them, but they are progressive objectives, because a commitment to fixed parities is a commitment to finding preferable alternatives to parity changes, and that means, among other things, a commitment to regional policies on a scale never seen before. One could not think it conceivable for the parities of European countries to stay for a very long period without change unless there were regional policies on a scale never before envisaged.

In fact the central problem of modern countries is that, whereas we have the talents, the techniques and the motivations which have led to remarkable changes of comparative productivity at unheard-of speed, we have not produced matching skills in restructuring industry to cope with the changes which the accelerated techniques of production within frontiers and across frontiers have brought about. That is what causes a great deal of the parity upset and the protectionist feeling that has been brought about in recent years by changes in comparative productivity within and across frontiers because of the lack of initiative and the skill required to do that restructuring and regional policy.

Mr. Marten

Would the right hon. Gentleman give way?

Mr. Lever

I cannot give way. I want to get on. If we had unlimited time I would gladly give way frequently to anybody but I do want to cover some ground which I will not again have the opportunity to do. I put it to my hon. Friends particularly my right hon. Friend the Member for Stepney not to take a pessimistic view about the effect that the freedom of capital movement will have on employment. The overall effect within the new Community will be beneficial. It is a reasonable inference that we shall be participating in that benefit.

In anticipation of entry there was an exchange of visits between Munich and Manchester of the business men and civic authorities. About two business men went from Manchester to Munich and 40 highly intelligent German business men came to Manchester. I do not know whether it hurts anybody's national pride but I can tell the Committee about engineers and skilled men at Manchester who have been put out of work in the Wythenshawe and Trafford Park area. They want employment by intelligent employers who will give them good wages and employ them where they live at the factories in which they used to work. These 40 highly intelligent German business men came to explore these factories and to look for some means of harnessing this pool of unused skilled labour which they cannot find in their own country. Why does my right hon. Friend think that happened? He says they could always have brought their money. If my right hon. Friend will reflect on this there is a psychology involved in business investment which is very important. These 40 men did not come before the Common Market entry was under consideration or was thought to be imminent. They came because within the Common Market rules a Manchester factory will be as much part of their organisation and free to sell its products anywhere within Europe as their German factories.

My right hon. Friend made a just case about tariffs but he ignored the psychological impetus entry gives to talented entrepreneurs who came over to this country. The whole point of freedom of choice of the entrepreneur is that looked at from the workman's point of view, he is not restricted to the often-lackadaisical management of the North-West. I do not say that it is all lackadaisical. He is getting the chance of employment and having his wages geared to the most keen and the highest bidder in Europe.

Mr. Marten

What is wrong with Manchester?

Mr. Lever

What the hon. Gentleman who intervened a moment ago and what my hon. Friends ignored is that we are widening the market for the sale of the services of skilled and unskilled workers in our country and in our regions. They will have a wider choice of possible employers. I can assure the Committee that the response of the working people of Manchester is that they are eager to have this opportunity.

Mr. Molloy

It is better than the dole.

Mr. Lever

That is right. We have no interest to run our capital markets on European inefficiency and our work-people have no interest in that. They have the chance of getting the highest wage and the best entrepreneurial use of their labour if they have the most employers competing for their work. German employers are thirsting for skilled labour.

Mr. Shore

Would my right hon. Friend think of the job opportunities available in this country. It is the net effect of capital movement which is important. It is possible that a number of European firms will invest more in Britain than they have done in the past, even though there has been nothing to stop them in years gone by. However, it will also be much easier for British firms to invest in Europe, and British firms have been restricted in the past. If my right hon. Friend would look at the figures for the last six years in terms of the direct investment by British firms in Europe, in the Six, and the investment of the Six in Britain, the ratio is three to one.

Mr. Lever

That is right, but my right hon. Friend is not right when he suggests that they were free to come here and that we were not free to invest there. British firms were not able to use sterling exchange for this purpose but they were entirely free to invest, and they have invested. Certainly they will do so in due time if not immediately. I will come to the point about the exchanges in due course.

This must not be looked at as a one-sided matter. I know of no economist of repute who could challenge the proposition that the free movement of capital maximises the opportunity of work creation within the area within which that free movement occurs. That is not to say that one can leave regional injury to free market forces. I have made it plain that the great scar on the modern world is that our thinking has been too puny in the concept of restructuring and regional matters. The bigger one's resources in the non-depressed areas the better opportunity an intelligent Government has to help.

On the question of exchanges it is true that we have had restrictions on the movement of currency into Europe although not into the sterling area. One of the things that has been missing ever since I can remember in Government policy in relation to balance of payments is an implicit strategy in which we are not told what is the test for our parity and what makes sense as parity, when it ought to be changed and when it ought to be financed through the ups and downs of trade. No Government has given us that. Again we come to our problem about good and bad Government. As long as one has Governments that allow our parity or our demand management to be shifted by capital movements, this country will have stop-go policies. One does not have to enter the Common Market to endure that. We have had stop-go policies for the last 20 years—brought about by reflex reactions of governments not to the current account on trade but to the sudden movement of capital mainly on short-term account which vastly exceed in their impact the longer-term effects of long-term direct capital investment. It is no good thinking that we shall get protection from the constraints on the balance of payments by staying outside the EEC. We are not going to get that either if we go into the EEC as long as the Government allow trade in this country to be constrained and affected by short-term monetary movements. That will happen whether we are in the EEC or not.

What we need—I have not time to develop it now—is a strategy on the balance of payments. Without it we shall suffer the stop-go of the past whether we go in or not. We shall have more opportunities in the EEC, but even outside the EEC with a proper strategy of balance of payments we ought not to suffer stop-go. Therefore the question of free movement of capital or labour has nothing to do with this it is a question of the reaction of the government to capital movement in relation to parity and demand management.

6.30 p.m.

Turning to the free movement of labour, it is wrong to talk about the sub-proletariat of Germany as the kind of thing with which we are threatened in some way either as importers or as exporters of a sub-proletariat. It is well to remember when we consider these matters that, however lamentable conditions may be in Germany—I have not studied them—it is the choice of the people concerned [HON. MEMBERS: "Oh."] Yes, their choice. I put it to my hon. Friends —[Interruption] I wish that my hon. Friend the Member for Renfrew, West (Mr. Buchan) would listen and not interrupt until the sentence is completed before allowing his self-righteous indignation to burst forth. As between the lamentable conditions that they have at home and those in Germany, which I have not studied, they prefer those in Germany because they are better than the miserable poverty which is the alternative to going abroad. That may be shameful and—

Mr. Wingfield Digby

Is the right hon. Gentleman aware that workers from Morocco moving into Strasbourg are going straight into modern flats?

Mr. Lever

It would reflect badly upon Britain if, taking advantage of the misery and poverty of people in other parts of the world, when we have a decent Government and we need labour to come to this country, we sought to seek economic advantage by exploiting the miseries of poor people who would be prepared to come here to any conditions rather than remain unemployed and poverty-stricken where they are. We should bear in mind that nobody is enslaved to go there. They go there because the conditions are better than they would otherwise get.

No Englishman need leave England to take employment. My right hon. Friend the Member for Stepney said that our people want work in England. Of course they do. I should like non-gainful employment on a certain Committee. I should not be satisfied if Herr Brandt, assuming that he went into Opposition, invited me to take a place in his Shadow Cabinet. I should prefer to be at home, if this were possible. Other people may prefer to make the journey across to Germany if they were unable to obtain that non-gainful employment in England.

The same goes for gainful employment. It is a matter of choice. My right hon. Friend and I have no business to tell English people that they should not take advantage of opportunities abroad if they wish to do so. Therefore, our policy must be to seek to provide gainful opportunities at home so that they will have the free choice whether to work at home or, if they choose, abroad. Not everybody who goes abroad to work goes with a sense of some awful evil which has befallen him. Not everyone is driven abroad to work because he cannot make a good living at home. It may be that he can make an even better and more interesting living abroad.

Finally, I turn to taxation. The taxation powers of the EEC do not extend to personal tax. All the usual fiscal blood sports will be open to us, as I have said on more than one occasion, and I shall support them because I believe in progressive taxation. As long as it is done intelligently and shrewdly, I shall support it.

For example, it is ludicrous to have estate duty at its present level without matching it with a gift tax. It seems to me that a voluntary dispositions tax makes sense. Will the EEC stop it? No. What stops it is the present Government and the indolence of previous Governments, none of whom brought it in. I am in favour of it.

Mr. Shore

I do not think that my right hon. Friend has taken the point. If there is free movement of capital and a particular form of capital taxation which is high in one part of the Community, it is natural and logical that capital will move to areas where it is lower. Surely my right hon. Friend should address himself to that question.

Mr. Lever

Capital does not die; estate duty arises because individuals do. It is not the capital but the individual who moves to areas of lower estate duty. They do and are free to do so now. I hope that they always will be. None of the major countries outside the communist world stops its citizens emigrating if they desire to do so and, within a reasonable period, taking their capital with them. We certainly allow considerable freedom of movement to all people if they wish to leave the country. The interesting point is that, though this freedom has been maintained, it is exceptional for people to move out of this country to escape estate duty and die somewhere else. It does happen. However, on the whole, most people accept the taxation, however high, rather than leave their native land.

My right hon. Friend is mistaken if he supposes that more than a minor facilitation of capital movement will take place. It has not yet taken place. I believe that it will proceed with caution. We are not obliged to move too rapidly. It is the taxation of persons which is crucial.

Mr. R. T. Paget (Northampton)

If a man wants to dodge British taxation today, he has to move his domicile. If free movement of capital means what I think it means, a man can move his capital to a place where taxation is light without having to go there himself.

Mr. Lever

My hon. and learned Friend takes it to mean something wholly different from what it in fact does mean. The income on capital may be taxed more lightly in, say, France, Germany, or whatever it may be put, but when a man makes his tax return to Her Majesty's Inspector of Taxes he has to return the income, and his personal income will be taxed in accordance with British law at the rate decreed by a British Government. It does not matter whether the foreign country is kind enough to tax a man's capital at zero. It will not help him in terms of his total tax liability, because the Inspector of Taxes at this end gets the return of his income and taxes him on that basis.

The EEC is concerned not with personal but with corporate taxation. In Britain the level of corporate taxation has been lower than in other countries partly because we have sought to attract a flow of inward investment.

Countries of an advanced nature like our own should not compete with each other to drive down company taxation so as to attract capital. In fact, the harmonisation of corporate taxation brings an end to the downward competition on corporate taxes which exists as long as we are outside the EEC. If we wish to bring capital into Britain there is a strong temptation to make our corporation tax lower than in other parts of the world. Harmonisation does not act one way to drive down company taxation. On the contrary, it would tend to be agreed that we all keep company taxation at an equal level. However, there is no harm in that. It depends what the level is. There is no restriction on the British Government fixing their own level if they are not satisfied with the EEC level.

The free movement of capital should benefit all. The fact that other people will benefit should not make us think that it is at our expense. We have free movement of capital in Britain because overall we gain by it.

Free market forces alone will not take care of regional imbalances. However, that is no reason for multilating the other areas. It is a reason for strengthening policy and widening our horizon in terms of the regions.

There is no commitment to tie our parities for ever to Europe. Any such commitment would be meaningless and could not endure unless a preferable alternative to parity changes were made available if there were changes in comparative productivity. We should welcome the idea of advancing agreement in the area of both capital and labour movement provided that it is of free choice and there is no conscription, and the like. This will rebound to the advantage of the whole Community in which we, as a member, must be beneficiaries.

Mr. J. C. Jennings (Burton)

Before the right hon. Gentleman sits down. Is he trying to tell business men in this country that corporate tax, as he describes it, will tend to rise as we develop our economy in the Common Market?

Mr. Lever

That is a matter of free decision by a British Government.

Mr. Percy Grieve (Solihull)

I first want to pay tribute to the cogent arguments just advanced by the right hon. Member for Manchester, Cheetham (Mr. Harold Lever). Apart from a short passage on taxation, I found myself in almost complete agreement with everything he said, which shows the degree to which a recognition on both sides of the Committee of the advantages of adherence to the EEC overrides all party considerations. In the speech of the right hon. Member for Stepney (Mr. Shore) I thought I detected that adherence and devotion to the doctrines of State Socialism which I suspect to be at the bottom of a great deal of the opposition to our joining the Community which one has seen and heard in our debates so far.

To the extent that we may be influenced to modify the extremely penal levels of our estate duty, moderate its incidence and perhaps change from estate duty to inheritance tax by our adherence to the Community, I would welcome it. It has always seemed to me that the methods of imposing duties on inheritance which prevail, for instance, in France are very much more civilised and realistic than our own. In the recently published Green Paper those methods were canvassed as one of the alternatives where the rights of the widow, for instance, and the immediate children of the testator are recognised, as opposed to those of more remote kin and of those not related, and where the unity of the family and the obligation of a father to provide for his family are recognised. That, however, was merely one aspect of the matter.

The right hon. Member for Cheetham pointed out just now that there would be very little difference from what already prevails here with regard to the emigration of individuals who seek to take their capital with them. They are already perfectly free to do so, their capital following them after a decent interval of about five years. I do not think that we shall see a great exodus from this country to the Community countries of people wanting to go out there for tax reasons. Those who wished to do so have already done so. They have gone to the sterling area countries—to Malta, for instance, where until recently they benefited from very considerable tax advantages, some of which, I am sorry to say in respect of those who I know have gone there under that illusion, are now being eroded by the present Government in the island. What we may see is a few more people going to live in Community countries, but if our taxation and estate duty are modified, as I believe they will be modified, that incentive to go will disappear altogether.

What I suspect the right hon. Member for Stepney resents and regrets about the freedom of capital movement is not what can happen and may happen in present circumstances but the power which he thinks a Socialist Government might lose to stop altogether the emigration of individuals and their taking their capital with them. That is what I suspect is implicit in his objections. The right hon. Member for Cheetham shakes his head. The right hon. Member for Stepney is not now in his place, and since I agree entirely with the right hon. Member for Cheetham that there may be no substantial change in present circumstances. I look for what the right hon. Member for Stepney really dislikes and resents here. He is far too intelligent not to appreciate what was said by the right hon. Member for Cheetham, so I suspect that what he resents is the possible loss of power to impose restrictions on the emigration of individuals and restrictions on the emigration of capital.

6.45 p.m.

There was implicit in the speech of the right hon. Member for Stepney the argument that by adhering to the Community we should stultify our own ability in an emergency to control capital movements. That has always been implicit in the arguments about capital movements when we join the Community, but the Treaty specifically provides for the right of members States of the Community to look after their own interests in an emergency.

Mr. Marten

Temporarily.

Mr. Grieve

My hon. Friend says" temporarily ", but one hopes that a member State would not be in such a position as to have to impose permanent controls. I hear my hon. Friend say, "Wait until the next Socialist Government comes along," but perhaps we should leave that eventuality to the electorate.

I want to refer to Article 73 of the Treaty establishing the European Economic Community, which specifically gives this freedom to member States, and then to refer to some of the uses to which this provision has been put and the reliance that has been placed on it during the course of the history of the Community. Article 73 states: If movements of capital lead to disturbances in the functioning of the capital market in any Member State, the Commission shall, after consulting the Monetary Committee, authorise that State to take protective measures in the field of capital movements, the conditions and details of which the Commission shall determine.

The Council may, acting by a qualified majority, revoke this authorisation or amend the conditions or details thereof. I know that a number of hon. Members will say that that depends on the Commission, but paragraph 2 of the Article enables a State to act in an emergency on its own initiative. It reads: A Member State which is in difficulties may, however, on grounds of secrecy or urgency, take the measures mentioned above, where this proves necessary, on its own initiative. The Commission and the other Member States shall be informed of such measures by the date of their entry into force at the latest. In this event the Commission may, after consulting the Monetary Committee, decide that the State concerned shall amend or abolish the measures. My right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) says that that is just the point, but the fact is that if one pools one's resources and makes concessions for the purpose of very great advantages, one must make concessions in this regard as in other regards, because the ultimate gain to the State of adhering to the Community will be so great.

Article 73 has been used since the Community came into existence. I speak from memory, and therefore speak subject to correction, but in 1968 it was in reliance of Article 73 and, in particular, paragraph 2, that France imposed stringent exchange controls after the events of May which upset the French economy in the autumn of that year. There is, therefore, specific provision in the Treaty for member States in an emergency to look after their own interests. It is quite true that afterwards, when the measures have been taken, States must consult their fellow members of the Community as to the continuance of those measures, but it seems to me that in a civilised organisation established for mutual wellbeing this is a sufficient safeguard of the interests of any European member State.

Mr. Deakins

Is the hon. and learned Gentleman not aware that Article 73 merely gives legal protection against disturbances of the capital market? It says nothing about States having the right to protect themselves against the social consequences of alterations in the movement of capital, which is what concerns us.

Mr. Grieve

Social consequences are hardly likely to arise by way of an emergency. Social consequences are long term and are indicated by trends. There, the Ministers of each State are entitled to consult with their fellows on what changes should be made. Social consequences are long term, whereas what we and Article 73 are concerned with are short-term crises, and for short-term crises the interests of member States are protected.

I agree completely with the right hon. Member for Cheetham that freedom of capital movement in the Community is one of the roots of its prosperity. For these reasons I oppose the Amendment.

[Sir ROBERT GRANT-FERRIS in the Chair]

Mr. John Mendelson

The hon. and learned Member for Solihull (Mr. Grieve) four times in a relatively short speech declared his complete agreement with the contribution made by my right hon. Friend the Member for Manchester, Cheetham (Mr. Harold Lever). While I welcome and enjoy the speeches of my right hon. Friend, the hon. and learned Gentleman positively relies on my right hon. Friend. He would not have made a speech at all had he not been able to repeat and agree with what my right hon. Friend said. The hon. and learned Gentleman and others who share his view who rely wholly on my right hon. Friend should pay a small fee to him for providing a basis for their interventions.

I will confine my speech to the single point of the policy on economic aid to the difficult regions. It is not enough merely to say that it depends on the policy of the Government at home whether there is either general prosperity or prosperity in the difficult regions. The failure of succeeding Governments in the last 20 years to have a positive policy of economic aid to the difficult regions is common ground. According to current reports of the National Institute of Economic and Social Research, which has no political bias, this is agreed among all the economists.

We must go further than that. We are concerned with the attitudes within the EEC. I therefore wish to read into the record a large part of an important and revealing article that appeared in The Guardian yesterday morning. It deals not with the general propositions that have been debated in Committee but with concrete current evidence of the grave dangers facing the difficult regions if we join the Community under the present terms.

In recent weeks when we have been disentangling the legislation before us we have been in danger of our debates not receiving sufficient attention in the country. That is because we have not produced the concrete facts that would wake up the people in the regions to a realisation of the danger they are facing.

Mr. Richard Norton-Taylor tells us: British Ministers and public officials do not miss any opportunity these days to point out both the need for, and Britain's own national interest in, an effective Common Market regional policy which concentrates on declining industrial areas rather than poor agricultural ones. That is what Ministers talk about but they do not report to the Committee or to the House of Commons what is going on in the EEC. As everyone must now be well aware, during the first years after enlargement, Britain will be a net contributor to the Community budget and if the present structure of the budget does not change. Britain stands to be the largest single contributor in five years. Out of a total budget of close on £1,670 million, 88 per cent. goes on farm price support (a small fraction to help modernise farm holdings), £18'3 million goes on the ill-fated Euratom nuclear research organisation, and £375,000 goes to the European Social Fund to retrain Community workers. Community officials are beginning to wonder if Britain is going to place as much emphasis on the importance of a Community industrial and regional policy as France has (very effectively) put on the continuation of the present common agricultural policy. Here is the key section: At last week's ministerial meeting the French Foreign Minister, M. Maurice Schumann, avoided all mention of regional policy, insisting instead that the issue of the economic and monetary union agenda must be kept strictly to the point. There are several current reports about what the Community should turn to next. We know that in the secret discussions between the Prime Minister and President Pompidou in Paris, when President Pompidou finally removed the French veto, certain guidelines were laid down. We also know that when President Pompidou was over here recently those guidelines were confirmed, but it is here that the conflict arises. M. Schumann on behalf of President Pompidou does not wish discussion of the policies which would benefit British economic interests but insists on different issues being on the agenda. Luxembourg rather haphazardly threw up a proposal for a Community ' regional solidarity fund ', although Italy, perhaps resigned after the Community Finance Ministers failure last month to agree to set up a European regional development fund, kept silent. We come to the part that deals with what is to happen in the immediate future: The Commission has a job as adjudicator when it comes to regional State aids. For example, it will soon come out with guidelines for the shipbuilding and textile sectors and will, no doubt, look closely at the British Government's planned Industrial Development Bill. Some of the Commission members, notably Signor Spinelli in charge of industrial policy, and M. Borschette, responsible for regional and competition policies, have become well aware of the need for a sophisticated regional policy for industrial areas and, indeed, praised Britain's effort in this field. But some of the six member States have also shifted their attention to declining industrial regions and have a panoply of measures, including regulations along the lines

7.0 p.m.

Mr. Paget

On a point of order, Sir Robert. Is it in order for an hon. Members to read a long article from The Guardian?

The Chairman

If it is a quotation necessary for the making of the speech, it is usual to allow an hon. Member to read it.

Mr. Paget

But it has been going on for about 10 minutes.

Mr. Mendelson

I do not know what my hon. and learned Friend the Member for Northampton (Mr. Paget) is worried about. I always listen with great patience to him, and when he produces examples of what we should do in Northern Ireland our patience is tried a good deal more than it is by having to listen to an article in The Guardian, but we still listen to my hon. and learned Friend's interventions.

The article goes on: Last week the Commission asked the Italian Government for periodic reports on the application of its recent law designed to help industries, such as textiles, to adapt to new economic pressures by a means of temporary holdings by such semi-public organisations as the Institute of Industrial Reconstruction. The Brussels body has also said that Italy must limit credits to small and medium-sized industries to one year. What does that mean? It means that the Brussels Commission takes it upon itself now to dictate to the Government and Parliament of Italy the kind of industrial aid they are allowed to give anyone in Italy. We are facing very serious problems on this aspect of economic policy. We are awaiting eagerly a statement by the Secretary of State for Trade and Industry about the future of the British steel industry. This is why I regretted the absence earlier on of the Secretary of State for Trade and Industry. The statement is overdue and there are all sorts of rumours about how the Government have changed the plans that the British Steel Corporation had itself put forward originally about the future of the industry. I happen to represent a steel constituency, and I am greatly concerned with this aspect of our regional and economic policy.

Mr. Grylls

The hon. Gentleman has referred to Italy. Does he not agree that the fact that the Italian Government insist that 40 per cent. of the investment of their nationalised industries should be channelled into the Mezzo Giorno proves that the Italian Government are allowed to pursue whatever policies they think fit for their regions?

Mr. Mendelson

We are not dealing with generalisations of the kind that we have heard in debates in this House over the past 12 months. We are dealing with a concrete event which is occurring now—[Interruption.] It is no good the hon. and learned Member for Solihull laughing, because he does not know anything about economic matters. He blows into debates and repeats what my right hon. Friend the Member for Cheetham has said, pretending that he can take part in our debates. But he knows nothing about steel.

We are here discussing a report based on current practice in the Community, however uncomfortable it may be for some who blindly voted for this legislation and the curtailment of debate without knowing anything about and without studying these important matters. They voted for the curtailment of debate, and they make interventions now—

Mr. Grieve

Perhaps the hon. Gentleman will concede that I have been present throughout the debates on these matters and have been bored by a great number of the hon. Gentleman's speeches. That was a good reason for voting for the curtailment of debate.

Mr. Mendelson

That proves that the hon. and learned Gentleman has not been present. I have not spoken in the Committee for a long time. He does not know that, because he has not been here.

The Commission in Brussels is now telling the Government of Italy that large-scale industries in Italy may not be supported. We have a direct interest in seeing that in this country there should be an expansion of the steel industry in the future, with some large new works. It is highly likely that these new steel works will need a great deal of Government aid if they are to be built and made to work. Are we to accept the position where the Commission tells a future British Government that they cannot give such aid to the British Steel industry? Let us be told from the Treasury Bench whether right hon. and hon. Gentlemen opposite are prepared to accept such interference.

The article goes on: Many of the aspects of the Community's embryonic regional policy are essentially negative, dealing more with control than pumping Community money into its poorer areas. That is still the responsibility of the national Governments. There is no doubt, in the view of Community officials here, that Britain will have to fight pretty hard if it wants to swing Community expenditure away from its present concentration on agriculture. That is of very great importance to this country, though apparently it is of little concern to some right hon. and hon. Gentlemen opposite—

Mr. Arthur Lewes

And the Liberals.

Mr. Mendelson

I am not worried about the Liberals. They do not count any more. It is of very little importance to Government supporters because they have no intention of supporting policies of the kind that we are worried about for the future.

A certain unreality has been creeping into these debates. From time to time this matter has appeared to be a nonparty one. Although a great deal of argument has been advanced from right hon. and hon. Members on both sides of the Committee, I am convinced that it is precisely policies of a kind that a future Labour Government based upon the Socialist movement wanted to introduce that would be blocked by the arrangements and the philosophy inspiring the negative attitude of the Commission to the regions. Incidentally, the hon. and learned Member for Solihull does not frighten me by introducing the honourable term "Socialist". I look forward to a future Labour Government genuinely pursuing Socialist policies.

The Brussels policy is not one which positively negatives expansion. It is one which negatively controls, and that is one of my basic objections to it.

I look forward to a Labour Government forming the next Administration. The news is cheerful from Scotland. It will be equally cheerful when it comes in from English boroughs later this week. The present Government will not last very long, and obviously we have to think in terms of the next Government. which will be a Socialist Labour Government and will include all the talents cal these benches. That is when the expertise displayed by my right hon. Friend the Member for Cheetham will be greatly needed. The obstacles will be far more serious for such a Government than for any Administration formed by right hon. and hon. Members opposite.

There was nothing in the speech of my right hon. Friend the Member for Cheetham dealing with that problem. He made life easy for himself by concentrating only on some of the., points which have been made today. He did not address himself to what has become the kernel of these debates and explain how he would overcome the built-in anti-Socialist bias in the Commission's policy and its negative approach to the regions.

We have at our disposal only a short time in which to discuss matters of the greatest importance to the people in regions of high unemployment. We are here agreeing willy-nilly to an interfering policy which will prevent us from pursuing the urgently-needed expansionist economic policies which ought to be pursued in the interests of the people in the regions which are hard hit by unemployment. I warn the Committee that anybody who lightheartedly agrees to what the Government are putting forward without the most searching inquiry and without insisting on the most careful answers being given by the Government will fail the people in the regions. The Government have a duty to give detailed replies not only to the questions that have been asked about the terms of the treaty, but also to the questions that have been asked about their attitude to the policies that are referred to in this article which I have deliberately read into the record of the proceedings of the Committee.

The Minister of State, Treasury (Mr. John Nott):

It may help the Committee if I intervene now, but in doing so I do not wish in any way to bring the debate on the Amendment to a close.

In the short time that is available—and I realise that there are other Amendments to debate tonight—perhaps I can try to answer a few of the points that have been raised by the right hon. Member for Stepney (Mr. Shore), who I hope will shortly return to his place. In opening the, debate the right hon. Gentleman ranged extremely widely over many matters, and I think hon. Members will agree that, to a large extent, this has been a debate on general economic policy and on the principle of entry into the EEC. Nevertheless, I shall try to answer some of the points that have been made, but I think that it would be appropriate for me to address my remarks as far as possible to Clause 2(1), which is what we are debating.

I should have liked to have made a personal comment to the right hon. Member for Stepney but, as he is not here, I shall leave it until he returns.

The first matter on which I should comment is regional policy, to which the hon. Member for Penistone (Mr. John Mendelson) has addressed many of his comments, and about which the right hon. Member for Stepney was concerned. As the right hon. Gentleman knows—and I am sure that the hon. Gentleman knows it, too—the Community is still working out a common regional policy where problems arise at Community level. When we become a full member of the Community at the beginning of next year we shall be full participants in all these discussions and we shall be able to help in steering the regional policies of the Community in a way that will be of advantage to this country.

It is recognised that, basically, regional policy is the responsibility of member States, and I think that the right hon. Member for Manchester, Cheetham (Mr. Harold Lever) made this point on several occasions. I must say to the right hon. Member for Stepney, to the hon. Member for Penistone and to others who have spoken on this matter of regional policy that our system of regional aid, which is being substantially changed—our new policy was outlined in the recent White Paper on Industrial and Regional Development—and also our IDC system, are not contrary to the present ideas of the Community. Regional policy is the responsibility of member States and, as far as we are aware, it will remain so, but we shall be party to the discussions on a common regional policy, and surely that must be to the advantage of this country and to our regions.

Mr. Shore

I apologise to the hon. Gentleman for missing the first few moments of his speech. Have the Government had any serious discussions with the Commission about their existing regional policies? Have they had any discussions with the Commission about the development of the Commission's own policy between standard regions and others, which it put forward a few months ago?

Mr. Nott

The right hon. Gentleman cannot have it both ways. He is an opponent of our entry, and now he is concerned that we should be having continuing discussions with the Commission on this matter. The Commission is fully aware that we are about to introduce an industry Bill that will change our system of regional aids and development, and it has seen our White Paper as indeed has the right hon. Gentleman.

7.15 p.m.

Mr. Molloy

Is the hon. Gentleman saying that those who are opposed to the Bill should show no interest in what might happen if the House passes it? That is a remarkable new philosophy, even in the British constitution.

Mr. Nott

That is not what I was saying.

Mr. Molloy

That is what the hon. Gentleman seemed to be saying.

Mr. Nott

May I just deal with the subject-matter of the main Amendment.

Mr. Powell

The Minister has just told the Committee that in the Community regional policy is the responsibility of the member countries. Would he relate that to what has happened about Belgium, which has been ordered by the Commission to discontinue a regional policy which it thought fit to adopt? Is that what the Minister means by member countries being responsible for their own regional policies?

Mr. Nott

I was not going to mention the Belgian case because of the shortage of time but, as my right hon. Friend has raised it, I shall refer to the particular case that he raised.

The Belgian economic expansion law is in no way comparable with our system of regional aids. The Belgian law provides for aid to be granted to almost the whole of Belgium, and the Commission has carried out its responsibilities under Article 93. For a long time the Commission discussed the application of this law with the Belgian Government, and it has now given its ruling that aid should be limited to a smaller number of areas where aid to expansion can be justified.

The point that I wish to make in answer to my right hon. Friend is that this matter had been discussed between the Commission and the Belgian Government for a long time. So far as we are concerned, it must be to our advantage not to have a system of regional assistanch which covers the whole of a country.

Mr. Douglas Jay (Battersea, North)

Does not the Minister agree that that case establishes the point that the Commission can give a ruling in these matters which national Governments, if they accept the Treaty of Rome, are then compelled to follow?

Mr. Nott

As the right hon. Gentleman knows, the Community can survive only by a process of consultation, and the suggestion that the Commission is in a position to order one of the member States to pursue a policy which is wholly contrary to the wishes of that State does not bear any practical relationship to what happens.

Mr. John Mendelson rose—

Mr. Nott

I shall not give way.

Mr. Mendelson rose—

The Chairman

Order.

Mr. John Mendelson

On a point of order, Sir Robert. The Minister in the earlier part of his speech referred to me on three occasions and attacked what I had said. Is it not the custom in Committee that having been done, for the Minister to give way to the hon. Member concerned?

The Chairman

Customs are customs; order is order. What has happened is not out of order.

Mr. Nott

I wish to continue with my speech because there are still many hon. Members who wish to take part in the debate.

I propose to devote some remarks now to the main Amendment, No. 296, which concerns capital movements.

Mr. John Mendelson rose—

The Chairman

Order. Talking about customs, it is the custom of the House and, indeed, the rule, that if an hon. Member who has the Floor does not give way, an hon. Member who wishes to intervene must not persist in trying to make that hon. Member give way. The Minister has not given way, and however much the hon. Member wishes to intervene he may not do so until the Minister gives way. No one knows that better than does the hon. Gentleman.

Mr. Shore

On a point of order. Sir Robert. This is a serious matter. I do not address this remark wholly at the Minister who is clearly doing his best, but we are in great difficulty. We are living under a guillotine discussion. We do not get replies to serious matters. We tried again and again to find out whether there is a power in the Commission to deal with or prevent national Government doing things in regional policy. Minister after Minister has avoided this. Time is running out. Surely, when we have got to the heart of the matter and a particular case has been put to the Minister, we should be allowed to return to this and let the Minister give the best reply he can.

Mr. John Mendelson

Further to that point of order—

The Chairman

Order. I had not taken that to be a point of order. I took it that the Minister was giving way to the right hon. Gentleman and I think that now the Minister should be allowed to proceed and perhaps to answer the right hon. Gentleman's question if he wishes to do so.

Mr. Mendelson

Further to that point of order, Sir Robert. At one point when the Minister looked in my direction I deliberately pointed to the right hon. Member for Wolverhampton, South-West (Mr. Powell) because I thought that he wanted to give way to one hon. Member on each side. I raised the question of the Italian Government and the prohibition upon giving aid to large companies such as in the steel industry. I think that out of courtesy the Minister ought to allow me to put the same point to him now—

The Chairman

Order. The hon. Gentleman knows that that is not a point of order.

Mr. Nott

If I may I will give way to my hon. Friend the Member for Oswestry (Mr. Biffen). I have given way several times to hon. Gentlemen opposite.

Mr. John Biffen (Oswestry)

I am extremely grateful to my hon. Friend. Perhaps he will accept that this is an intervention intended to be not entirely unhelpful. Would it be a fair summary of what he has said to suggest that the Government view regional policy as primarily a matter of national concern within the Community in the sense that the financing of it rests with national Governments other than as it may be vetoed by the Commission on account of certain finances being too generous?

Mr. Nott

I must refer to what I said a moment ago. I said that it is recognised that, basically, regional policy is at present the responsibility of member States. I cannot commit myself to what may happen over the years. My hon. Friend would not wish me to say how regional policy will develop in the Community over the coming years and it is not possible for me to do so. At present regional policy is primarily the responsibility of the member States and there is nothing in our existing regional policies which conflicts with what the Commission requires or desires.

Mr. John Mendelson rose—

Mr. Nott

I will not give way to the hon. Gentleman. I have given way to him several times. He has made a speech.

Mr. Mendelson

On a point of order, Sir Robert. The hon. Gentleman has said that he has given way to me on several occasions. He has given way to me once.

The Chairman

Well, he is not giving way to the hon. Gentleman now.

Mr. Nott

I will give way to the hon. Gentleman, and then we can get on.

Mr. Mendelson

That is right. The Minister will recall that my example was not the Belgian example but was of the prohibition upon the Italian Government which meant that they must give economic aid only to small-scale firms. We are planning the expansion of the British steel industry. Will the Government accept the same prohibition for the United Kingdom?

Mr. Nott

If the hon. Gentleman would like to give me the full details of this case I shall be delighted to give him an answer. I cannot give an exact answer now, in the middle of the debate, to a specific question that he raised a few minutes ago. If he will give me the details, I will give him a full written answer.

I turn to Amendment No. 296—

Mr. Arthur Lewis

On a point of order, Sir Robert. We are operating under a guillotine and our debate is limited. Surely it is incumbent upon the Minister to come here prepared to answer all questions relevant to the debate? It is not his job to get up and waste the time of the Committee saying that he cannot answer the debate because he has not had the details. My hon. Friend has given him the details and it is up to the Minister to see that he gets the answers.

The Chairman

That is not a point of order. We want to get as much into the debate as possible and I hope that the Committee will allow the Minister to get on.

Mr. Nott

I want to deal now with the wider question of the liberalisation of capital movement which was at the heart of the speech by the right hon. Member for Stepney. The EEC directives are not directly applicable in member States and while they would normally be implemented by whatever consequential legislation might be needed, here the question does not arise since all the relevant restrictions can be imposed or removed by powers which we already have under the Exchange Control Act, 1947. I mention that because I shall be advising my hon. and right hon. Friends to vote against the Amendment if it is pressed to a Division.

I come to the substantive issues raised by the right hon. Gentleman. The whole question of capital movement has already been discussed exhaustively in the House. The right hon. Gentleman and the Committee know that freedom of capital flow is essential to the success of any common market. This principle has never been disputed as far as I am aware by the previous Administration of which the right hon. Member was a member. They were keen to have freedom of capital flow, subject to reasonable and adequate transitional arrangements.

As the right hon. Member for Cheetham says, as a general principle the free movement of capital is highly desirable. We accept that in certain circumstances it can throw up particular difficulties. This is something we must bear in mind. I am sure that hon. Members recognise that in making the necessary adjustments to our exchange control arrangements we shall have important safeguards. These were refererd to by my hon. Friend the Member for Banbury (Mr. Marten). We shall have the impact of any capital movement spread over the transitional period and we shalal have the provisions of the Treaty of Rome which allow member countries to take special measures if they are faced with serious balance of payment difficulties.

I should like to look at the positive side of the movement of labour and capital. Frankly, the right hon. Gentleman took a very negative and pessimistic attitude towards the whole subject. The freedom of capital movement can offer to our industry, and I believe it will, great opportunities for employment and incomes throughout the country.

Mr. Deakins

How?

Mr. Nott

I will show how. First of all our investment on the Continent is considerably greater than the investment of the Six in the United Kingdom. This was what the right hon. Gentleman was referring to in an earlier intervention. Moreover, the impending absence, as we move further, of tariff barriers will enable British factories to expand their facilities at home, thereby encouraging employment here which would otherwise, to overcome tariff barriers, necessarily have to be built abroad. I know of many examples—and I have been a member of the Government for only a few weeks—of this happening, the deferment of plans to build a plant on the Continent and the expansion of facilities within the United Kingdom because companies now know that they will not have to overcome a tariff barrier.

The more likely eventuality, rather than an outflow of direct investment to the Community, is surely a strong upsurge of EEC investment here which would provide considerable benefit to our balance of payments, our employment and our incomes. In this respect we should not forget American investment, which should be attracted here by our common language, comparable capital markets and legal system. It has tended over the years to drift towards the Community, to the larger market of the Six. There is every reason to expect that when we enter the Community there will be a reversal of this trend. I need not remind hon. Gentlemen of the valuable contribution provided by foreign-owned companies in bringing new employment to assisted areas and providing up to one quarter of our current exports.

7.30 p.m.

[Sir ALFRED BROUGHTON in the Chair]

The right hon. Gentleman referred briefly to the plans for economic and monetary union. He has often previously referred to this matter in the Committee. I do not want to touch upon it now more than to say that he implied that in some way common currency and unified decision making were somehow just around the corner. But, as the right hon. Gentleman knows, economic and monetary union is an objective which the Government share with the previous Administration, of which he was a member, but it is not, on any reckoning, a near prospect. As has so often been repeated, we shall be full members of the Community and we shall be participating in all discussions and decisions on this issue.

My hon. Friend the Member for Banbury referred to the narrowing of exchange margins. I hope that in considering this matter my hon. Friend will bear in mind that before December of last year the maximum permissible margin under IMF rules was 1 per cent. each side of parity. compared with the 2¼per cent. each side of the central rate now. We still have a wider band than was the case before December last year.

Mr. Marten

My point was that with the non-EEC countries vis-á-vis ourselves there is double that band, at 4½ per cent.

Mr. Nott

Yes, that is quite correct. I must briefly refer to the right hon. Gentleman's comments about taxation. I refer first to corporation tax. At present only France and Germany have the system of corporation tax which we are introducing. The Community has a long way to go in the harmonisation of taxation in this field, but if it moves further in harmonising corporation taxes, surely that is desirable. If we can agree on a common system of corporation taxes in the Community, it will be to the great benefit of trade. Broadly speaking, the EEC Treaty is not concerned with the harmonisation of personal direct taxation and there are no current discussions taking place on this matter. Regarding indirect taxation, this brings us to the subject of value added tax. I can refer only briefly to this. and in doing so I think that I can most appropriately set out the position on any future moves towards harmonisation by reference to the remarks made by my hon. Friend the Chief Secretary on Second Reading of the Finance Bill. First, under Article 99 of the Treaty of Rome decisions regarding the harmonisation of indirect tax must be unanimous, and so far no decision of any kind about coverage or about rates has been reached. Secondly, if any change is to take place in indirect tax, in our VAT, it will require further legislation in this House.

Mr. Shore

Will the hon. Gentleman help us with any information in reply to the specific questions I put about whether there are regulations or draft directives affecting other indirect taxes which have gone to the Council of Ministers in draft form, and whether these can be made available to the Committee?

Colonel Sir Tefton Beamish (Lewes)

The right hon. Gentleman ought to know.

Mr. Nott

I cannot answer that question at present, but I will certainly look into it and make sure that the right hon. Gentleman gets a full answer.

Mr. Powell

Perhaps the question I am asking is also one to which I ought to know the answer. I am sorry that I do not, and I hope that my hon. Friend will bear with me. He has pointed out that directives do not apply under Clause 2(1) but would fall to be implemented under Clause 2(2). In the other Amendments which are being discussed with this Amendment. there are references to regulations and decisions. I take it that the regulations fall to be implemented as self-enacting under Clause 2(1). Would my hon. Friend say what is the position regarding decisions? Do they fall to be implemented under Clause 2(1) or under Clause 2(2)?

Mr. Nott

No, these are decisions which are directed towards member States. They fall under Clause 2(2). I think that is the answer to my right hon. Friend's inquiry.

Mr. Powell

But if they are directed to individuals or corporations they fall under Clause 2(1)? Is that so?

Mr. Nott

If they are directed to individuals, I think I am right in saying that they are not directly applicable. But I will certainly check on this for my right hon. Friend and let him know. I am referring now to decisions directed to individuals. My understanding of the position is that these are not directly applicable without further action by member States.

Mr. Powell

I am greatly obliged to my hon. Friend, and I hope that he is right, because the answer he has given me is opposite to an indication given by my hon. and learned Friend the Solicitor-General. But it appears to me to be more in accordance with the Treaty.

Mr. Nott

I must give a correction to my right hon. Friend. I understand that the answer I gave is possibly not correct. If that is so, I apologise to him. But I will give him a firm answer to this point as soon as the debate is finished.

This has been a very wide-ranging debate which I must now draw to a close. Had the time been available, I should certainly have liked to refer more fully to the main Amendment, No. 296, but I have done my best in the short time available to cover as many of the points raised by the right hon. Member for Stepney as possible.

Mr. Paget

I am afraid that the Minister of State has had rather a rough ride on his first visit to the Dispatch Box. It has been rough because he has had a very difficult proposition to deal with. He has been cross-examined about the regions. I am not quite certain whether or not he eventually admitted that regional policies, whilst they may be the responsibility of the regional governments, could be altered by direction of Brussels, and, indeed have been on two occasions. The hon. Gentleman said, "After all, this is a matter of negotiation at Brussels". That is not what the Belgians or the Italians thought when they were ordered to reverse their policies. This is ordering, not negotiation.

The hon. Gentleman said further—I do not intend to go too far into this—that more American investment might come here if we were in the Market and they could serve the Market. I cannot quite see why the Americans should find Britain more attractive for serving the Market than its centre in the European industrial areas, particularly as they have found their relations with European organised labour a great deal more peaceful than their relations here. My impression is that the Americans are here not because they particularly like trying to apply their methods to British labour but because whilst there is an EFTA market to be served, it can be served only from here, and they are most likely to prefer to serve a Community market, when that comes into being and the EFTA market goes, from areas where labour relations tend to be better.

Mr. Harold Walker (Doncaster)

Will my hon. and learned Friend give way?

Mr. Paget

I am sorry, but I do not wish to give way, because other hon. Members wish to speak, and we have got the guillotine on us.

The hon. and learned Member for Solihull (Mr. Grieve) said that our objections to this, on this side of the Committee, were perhaps based on our attachment to State Socialism. As to that, I should be disposed to plead guilty. I believe that a movement towards Socialism is one of the things that ought to be available to a democracy. To make Socialism a creed available only to revolutionaries would not be to the ultimate benefit of our country.

A great deal of the argument in the book by the hon. and gallant Member for Lewes (Sir T. Beamish) was based upon the proposition that our membership of the Community would preserve us from Socialism. I accept that as factually right, but I disagree with the premise that it is desirable. I put my attitude to Socialism somewhat in these terms. I regard Socialism as a movement in the direction of equality—not, of course, to equality, for no perfectly equal society would be tolerable anyway—but a movement in the direction of equality rather than away from it. I regard it also as a movement which pays greater regard to social and environmental considerations in the distribution of capital rather than to mere market considerations, although both have to come into it. I consider this question, therefore, from the standpoint of whether Socialism in that broad sense is available to us under these terms.

First, as to equality. The capitalist free trading system which we have has an enormous tendency towards accumulation. Mere possession leads to more possession. Never during the course of capitalist history, I suppose, have the rich become rich more quickly than they have in the period since the war, merely by the process of possession. Within this range, in spite of our death duties, our taxation and our social legislation, we have scarcely moved the pattern of possession at all. We still have virtually what we had in the earliest days of this century, with something under 5 per cent. of the population owning well over 50 per cent. of the nation. In Europe since the war, the pattern has not stood still. The proportion of possessors has become smaller, and the largeness of their share has increased.

The Government themselves have said —I shall not go into too much argument with my right hon. Friend the Member for Manchester, Cheetham (Mr. Harold Lever) on this—that there must be a movement towards the harmonisation of death duties, and they have already started that movement in the present Budget. It means that the effect of death duties, which were our most substantial method for combating the accumulation tendency of the system, is to be reduced.

It is fairly generally acknowledged, I think, that free trade is an admirable method for making the rich richer and the poor poorer, and that this tendency —Karl Marx's principle of increasing misery whereby, as he put it, the workers would always he driven down to subsistence—has been resisted by social movement and political action impeding and reversing what would have been the natural economic rule.

7.45 p.m.

As regards income, certain spendable income, there has been a movement towards greater equalisation. But that has been as a result of direct taxation, what my right hon. Friend the Member for Cheetham called progressive taxation. I do not believe that we can continue in that direction within the Market. The whole direction in Europe is towards indirect taxes which are not progressive and away from direct taxation.

That is the principle which the countries of the Six have adopted, and I do not for a moment believe that we should be able to resist it, for what the Common Market does is to put the use of capital, which is production, in direct competition everywhere else. Capital will go where its use is most attractive to its possessor, in other words, where he will get the most money from his investment, namely, other things being equal, largely where he will pay the least taxation. Therefore, whether one wished to or not —and that is another matter—we could not increase our direct taxation or our company taxation without putting our production at a disadvantage vis-à-vis our competitors. Therefore, equalising taxation or redistributive taxation will just not be available to us.

I turn now from the equalising aspect of Socialism to the other aspect which is based on the belief that there should be a social and, perhaps, an environmental preference in the use or direction of capital rather than a mere market search for its maximum utility. Neither of those preferences, it seems to me, would be available to us.

We have had it said that unemployment may be attractive to capital, that capital may move towards areas of unemployment such as Scotland. But that goes contrary to all human experience. It has never been so. American industry did not move to Ireland. The emigrants move to America. When we united ourselves with Scotland, industry moved here from Scotland, and the population of Scotland was halved. Even in America one has seen the way the system works, with the impoverishment of the New England and southern States in favour of the centre to which capital has moved.

This seems to be a tendency within the system which all history demonstrates, and I just do not see how a regional policy, limited as it would seem to be, would combat that natural movement towards the centre, towards the South-East of England, towards the Ruhr and the Rhine.

We were told that 40 energetic Germans had gone to Manchester to see how they would get on employing Manchester workpeople. Fairly recently, a lot of Germans went to Ireland with the same sort of idea, and they made themselves so unpopular that the Irish Government had to throw them out. I suspect that we might well have the same kind of reaction here. This may be a criticism of us rather than of the Germans, but the way in which the Germans, or the Japanese for that matter, organise and enthuse in their attitude to their work-people is a little surprising. Employers who are used to a bidability of that kind which is not available to them here will not be able to do those things.

The price of land has rocketed since we passed our recent votes. I have seen the price of agricultural land—I own quite a bit of it—increase by over 25 per cent. in the past six months. That is the way it is going up. Why? Because the Germans are coming to buy it. What kind of trouble there will be in the countryside here, as in Ireland, when that begins to happen!

It is said that they are not a sub-proletariat, the Turks and Yugoslays who come into Europe and are probably preferred, because they have fewer rights, to the unemployed in Europe and here. There are a good many such foreign workers. Groups of such people are being geared into the regions of other countries under the free movement of labour, but they constitute labour that does not acquire any political or social rights in the area to which it moves. Apart from anything else, is that kind of movement good for the security of the nations into which the labour moves? That is perhaps another aspect of the views on immigration of the right hon. Member for Wolverhampton, South-West (Mr. Powell). I do not think it is a matter of colour. Such movements can be very difficult for our security.

However triumphant some Conservative Members may feel about having devised a system which excludes Socialism as a free choice, and thus confines it to a revolutionary party, to the Communist Party which has never previously been effective in this country, they should bear in mind that that is a deep risk to our social organisation.

Mr. Grylls

This group of Amendments strikes at the very roots of the principle of joining the Community. It shows an outright opposition rather than an opposition in detail or a searching for detailed facts. The Community has achievements to its credit in producing and moving towards policies of capital movement, harmonisation of VAT and harmonisation of general economic policy, to which it is openly committed, and anyone who wishes to join would like to see those policies develop. I believe that most people in this country, especially in view of the great problems we have to face today, would like to see a freer movement of capital in the Community as something that would be beneficial to all parts of the country. We should value a freer movement of capital from this country to countries overseas and of capital from abroad for investment here.

Our great industries, our technology, our inventions that are made all the time, will benefit greatly from investment by European countries and investment from the United States using Britain as a jumping-off ground for Europe. We should be confident about our own skilled labour being attractive to foreign investment. It is simple common sense that once we are inside the enlarged Community of 250 million people it is likely that considerably more investment will come here. If he is sincere in wishing to solve the problems of our regions and the present unemployment, surely the hon. Member for Penistone (Mr. John Mendelson). like so many of the rest of us, would believe that such investment would be helpful.

There has been a great deal of discussion about the regions. We must all ask ourselves whether Britain as a country with regional problems, like other European countries, would be better able to solve those worrying problems if we were inside or if we remained outside in isolation. It is common sense that if we restricted ourselves to our home market of 60 million people we should have less chance of solving those problems, which are shared by members of the Community—the South-West of France, the Mezzogiorno in Italy, parts of the border districts of West Germany, and Alsace. The members of the Community are trying to solve those problems in their own way.

It is true that the Community has not yet developed a sophisticated regional policy, but it would be unfair on the Community as a whole to say that it has done nothing and has stood back from the problem. The European Social Fund has contributed, for instance, to the training of 1,300,000 people in the existing Community of the Six, and that is no mean feat. A total of 400,000 people in the Community have been redeployed from the coal and steel industry, particularly the coal mining industry in Northern France, which has been contracting over the past few years. They have been successfully retrained and redeployed into modern industries. The money that the Community has generated through the European Investment Bank—1,500 million dollars in loans to regions in the Community—is also something that it would be wrong and unfair of any hon. Member, whatever his view about the Community, to ignore or sneer at. It surprises me that nobody has mentioned that, for example, if new jobs are brought to farm workers leaving the land the firms concerned receive 1,500 dollars per person in grant.

All those facts are proof enough that the Community is very conscious of the problems of the regions and wants to improve the lot of all those difficult areas. As I have said, it has not yet got a coherent policy, but my hon. Friend the Minister of State has said that when we are in the Community we can contribute to that and see that it is in the form we believe to be best for our own country. If we remained outside, we could see across the Channel a form of regional policy being established which would be very unattractive to this country and very disadvantageous to our own regions. With our experience of a very sophisticated regional policy, which the Government are improving along the lines of the White Paper that has just been issued, we shall have a great deal to contribute to seeing that the Community, when it has a whole, sophisticated regional policy, will be able to move along the right lines.

I should like to end by reading a brief extract from a speech made in Bristol last September by the Commissioner mentioned by the hon. Member for Penistone, Mr. Borschette, the Commissioner charged with responsibility for the regions. He said: In my view, it is only a question of time before we come to see Western Europe as a small continent, and that the development of Southern Italy or Norway or Scotland is just as logical and desirable as the development areas which have been more fortunate hitherto. I hope that countries are more and more conscious of the inter-dependence of the economies of all of them and that there cannot be pockets of poverty in an integrated Community. I believe those words from the Commissioner responsible for Community regional policy are proof that the Community means business about having a real regional policy. I also believe there is a strong desire in the Community that when we join we shall play a very active part in moving that policy in the direction we believe is best for this country.

8.0 p.m.

Mr. Jay

We were very anxious to welcome a fresh Minister to these debates if only because we had never been able to get any satisfactory answers from the previous Ministers. But, unhappily, to the first question which we addressed to the Minister of State, namely, whether the Commission had the power to overrule the regional policy of national Governments, he gave no answer; and to the second question, about decisions as opposed to directives, he gave an answer which contradicted the answer we had last week from the Solicitor-General. Therefore, the hon. Gentleman's start was not as good as we would have wished.

The Minister went on to argue about the great benefits to this country of the free movement of capital. If all that he said was true, why have we maintained exchange control over the last 20 years? There has been nothing to prevent us, if we so wished, from permitting the free export of capital to any country in Western Europe or Eastern Europe, but we have refrained from permitting it. So the hon. Gentleman will not convince anyone by his argument.

It is deplorable that we are compelled to discuss in three hours between 50 and 100 regulations, which are legislative acts of the Common Market. All we can reasonably do, as we have done, is to discuss some of the main themes. I should like, following the example of my hon. and learned Friend the Member for Northampton (Mr. Paget), to say something about the social effects in terms of greater equality or inequality, not merely of capital, but of incomes in this country, of pursuing the economic policies we have been discussing.

One important effect of accepting these policies is bound to be a major redistribution of income in this country back from the poorer to the richer sections of the population due to the higher food prices and the methods of financing which will be forced on us by the continental policies. This would be the most reactionary social step taken in this country for a very long time.

A recent expert recalculation of this shows how drastic the redistribution is likely to be. Calculations made by the statistician Mr. T. E. Josling, a pro-Marketeer I believe, in his book "Burdens and Benefits of Farm Support Policies", fully set out in the Financial Times of 13th April, give some idea of the effects. This analysis shows that the huge costs of the Common Market farm policy would be largely extracted from the poorer sections of the community in the United Kingdom. The Financial Times states: The total extra cost for families with four children earning between £18 and £23 a week —a railwayman, for instance—would amount to £51 a year". That is about the same as the amount which the Chancellor of the Exchequer boasts so loudly he has given in his Budget to every working member of the community. We cannot expect, for instance, railwaymen to be moderate in their wage claims when the Government are gratuitously laying an extra burden on them to that extent. At the same time—and the Prime Minister will no doubt note what the Financial Timessays here— bachelors with middle or large incomes would not suffer or would even gain from this redistribution. According to Mr. Josling, the cost of the switch from deficiency payments to the Common Market farm policy would amount, in the case of an old age pensioner couple, to between 50p and £1 a week—and those figures will not be found in the pamphlets which the Government published last summer, at public expense, about the effects of joining the Common Market.

The Financial Times added: The reason why this cost would in the absence of offsetting action fall so largely on the poor is because it would be felt largely through a rise in the price of food, which bulks particularly large in low income budgets". Mr. Josling then makes the calculation that by the time that the EEC policy was in full operation there would be a net transfer of £500 million a year away from households earning less than £1,850 a year—that is, all the lower half of the working population. He says that about half this sum would go to what he calls European—he means Common Market—farmers and about half would be an internal transfer within this country. He says: Most of the internal transfer would be to British farmers with above average incomes; and grain farming in particular would become highly profitable". One can understand why both the Prime Minister and the Minister of Agriculture are so keen on these policies.

But hon. Members opposite do not care about redistribution socially within this country, and it is no good saying, in view of the position of the old age pensioners, that the matter will be put right by huge rises in social benefits. Nobody believes that we should get those from the type of Government we have now. But, more fundamentally, since if we joined the EEC on these terms the whole country will be impoverished by the switch to dearer sources of food supply, and since the balance of payments burden will probably force devaluation on us, meaning still higher food prices, the poorer section of the nation could not be compensated for these higher food prices without a drastic cut in the standards of the rest of the people, which it is not realistic to expect. The argument that this can be offset by higher social payments is hypocritical and unrealistic. The economic consequences of dearer food imports and a huge payments burden manifestly makes it harder, not easier, to compensate pensioners and the large families for the effects of food price increases.

The other item we have discussed is the effect of the Commission's powers and the regional policies which we may be forced to follow. The fact which the Committee must face, and which the Minister failed to face in his perhaps understandably rather hurried remarks on this subject, is the effect of free capital movements out of this country on our own development areas and on the whole of the north and west of these islands. It is not facing the problem to talk about regional policies in the EEC and to appoint a regional Minister here when, by accepting the free movement of capital, which is so beloved in the City, the Government are undermining the whole of our development area policy.

The foundation of that policy has always been the industrial development certificate. Regional grants are useful frills, but they are only frills on top of that basic instrument. There are no industrial development certificates in the EEC, except in some rather small parts of France. At present, and ever since 1945, if the Board of Trade, or the Department of Trade and Industry, refused a firm an IDC in the South-East of England the firm could not, and cannot, threaten to expand in Holland or Belgium, or wherever it may be, because our capital controls would prevent it from exporting the financial capital necessary. This is the fundamental point which hon. Members opposite evade. But under Articles 3 and 67 to 73 and others of the Treaty, these regulations are bound to be swept away except in perhaps rare emergencies.

If we join on those terms, any firm can say to the Government that unless it gets the industrial development certificate it wants where it wants it in the South-East of England it will put its expansion on the other side of the Channel, and it may very well mean it. We shall, thereby put Scotland, Wales, the North and South-West of England in an even weaker position for attracting new industry than Northern Ireland has been in over the last 25 years, because at least we have had an IDC system which has been of some help to Northern Ireland.

Simultaneously, what will happen is that we will generate a pressure for both British and American firms to expand in what will be the new Midlands of the Common Market—Belgium, Holland and the whole of the lower Rhineland area—while striking out of the hands of the British Government their one instrument to restrain that pressure. At the same time, by steeply raising grain prices, we will be subsidising agriculture in East and South-East England and damaging the dairy and sheep farming, which uses feedingstuffs on a large scale, in the North-West.

Indeed, it would be hard to imagine any group of policies more certain to strike a blow at the expansion of employment in all the weakest regions of these islands. To imagine that these forces may be controlled by juggling with some small regional grants is simply to ignore all the experience of the last 25 years. As my hon. Friend the Member for Penistone (Mr. John Mendelson) has pointed out, the latest experience within the EEC has been fiat opposition by the French Government to any extension, even of regional grants, at the expense of the agricultural policy, which is so much in the interests of the French Government and the French population. As a result of that, if we are to carry out all these policies and if we are to accept, as we are bound to accept, as one Minister has pointed out today, the free export of capital under the Treaty of Rome, we shall greatly and irretrievably undermine our development area policy.

Many other economic policies are involved in the regulations, which we ought to be discussing in Parliament, but which we are prevented from discussing by the timetable Motion, but I hope that we shall return to some of them, and one to which we must return is the decision to have fixed exchange rates and fixed parities, which the acceptance of these policies is bound to inflict upon us. I should like to make one comment about that in reply to my right hon. Friend the Member for Manchester, Cheetham (Mr. Harold Lever).

He said that we need not worry and that we should be able to alter exchange rates and to devalue as we pleased even if we joined the EEC. What he forgot was that the EEC was not merely adopting a present policy of a narrow band of exchange rates, but moving towards monetary union and a common currency. We shall not be able to alter parities and exchange rates with a common currency, because there will not be any parities or exchange rates to alter. Yet the Government have accepted a common currency as an objective, and that to me is one of the most forbidding and alarming prospects even apart from regional policy to arise out of the regulations and economic policies which are being thrust on an unwilling country.

Mr. Biffen

The right hon. Member for Battersea, North (Mr. Jay) concluded with some remarks about monetary union and I should like to refer to that in a moment. However, as the debate has proceeded, what has been most arresting has been the discussion of regional policy, and I should therefore like to make one or two comments about that. Whatever our views about Community membership, one of the advantages of the Committee stage of the Bill—and this is why I personally regret that it should have been curtailed—is that as the debate has seriously continued, a number of considerations have emerged which initially were not held to be particularly important or relevant at this time or for the immediately foreseeable future.

The arguments about Community regional policy underline the dilemma confronting the Committee. On the one hand, there is a strong disposition to argue that regional policy should be maintained as much as possible within the ambit of national government. I would say that that fairly represents the attitude of the right hon. Member for Stepney (Mr. Shore) and, I suspect, the attitude of many of my hon. Friends who voted for Community membership on 28th October. On the other hand, the consequence of that view is that the financing of regional policies will be left largely to national governments and they will merely submit to a rough and ready discipline, which will be exercised by the Commission just to see that there are not "over-generous" aids to regional policy by any member State.

8.15 p.m.

The argument of the right hon. Member for Manchester, Cheetham (Mr. Harold Lever) about the virtues of a harmonised corporation tax policy was that it would stop a bidding up of tax concessions to corporations to attract outside investment. The same logic would apply—that the Commission would be asked to stop individual countries from bidding up their regional policies to the disadvantage of other sister Community countries. My hunch is that that is what will happen, because I do not believe that the Community regional policy will proceed on the belief that sister European countries will make substantial budgetary contributions to us under the guise of a regional policy.

Both in respect of regional policies and the development of advanced technology we might hope to persuade our sister European countries that their taxpayers should make some compensating payment to enable us to be re-compensed for the levy system that operates to the disadvantage of British taxpayers and consumers and the advantage of Continental agriculture. But I doubt whether, with the veto arrangements, the French and Germans will feel so disposed. I think that we shall therefore be driven back to regional policies being largely the responsibility of national governments with the Commission in a watchdog rôle to see that there is no excessive over-bidding between various forms of national regional subvention.

But that is not the main issue that I want to discuss in the few remarks I wish to make. I should like to concentrate on Amendment No. 296, which is concerned with the movement of capital between member States within the Community. Clearly, the free movement of capital is just one aspect of the wider issue of economic union the consequences of which are infinitely greater than anything that has happened hitherto in the evolution of the Community and considerably greater than anything considered by the business and financial communities in this country when they were addressing themselves to the great debate that supposedly took place before October.

Today, in the Committee stage of the Bill in the House of Commons, we have to start looking over the brow of this hill, and it has been made topical by one Government decision even in the last few weeks. I do not think that one can think of an economic union merely in the terms of the free movement of capital. Quite properly, hon. Members have reflected upon the problems of fiscal harmonisation and the interlocking of exchange rates. I should like to discuss fiscal harmonisation.

Hon. Membeds will see my broad-mindedness in approaching this subject when I say that I absolutely agreed with my hon. Friend the Member for Dorset, West (Mr. Wingfield Digby). I do not know whether the OFFICIAL REPORT will record it, but I distinctly heard my hon. Friend point out—if he were in his place I am sure he would confirm this—the wide variation in the fiscal experience and practice of Continental European countries. I am speaking not of individual personal taxation but of excise duties and indirect taxes of various sorts which bear on the corporate sector.

It is clear that, having pointed out this wide variation, my hon. Friend thought that any realistic assessment suggested that these variations would persist.

On Sunday we shall have the Italian general election in which there may be a shift to both extremes from the centre. I expect that, and I do not think I shall be called a wild and reckless forecaster if I say that the MSI will considerably strengthen its position while the rôle of the Communists is unlikely to be weakened. Thus, the Parliamentary situation in Italy will not improve from the point of view of stable government.

Therefore, the early expectation of an Italian VAT is receding with time. This merely underlines the scepticism of my hon. Friend the Member for Dorset, West. The prospect we have is of a Europe in which there is little likelihood of a move towards fiscal harmonisation.

The same cannot be said for the harmonisation of monetary policy, for the narrowing of exchange bands and for the eventual locking together of exchange rates. Indeed, this has been the case even these last 10 days. We have a situation in which we are developing community economic policy, in which monetary union will proceed, in which there will be the free movement of capital but in which there will be no corresponding harmonisation of domestic tax conditions.

This halfway house arrangement is about the worst that one could conceive for an economic and monetary policy for the Community. To have committed ourselves in a supranational direction as far as monetary union is concerned, way in advance of anything that is likely to derive from the harmonisation of European fiscal arrangements, is to travel just about the most undesirable course.

This is not the view of a perverse and last-ditch anti-Marketeer because even the Economist has upbraided the Government for narrowing exchange rates in relation to our sister European countries. No organ of the Press has been more spaniel-like in the cause of British membership.

If we have the benefit of the dissent and scepticism of the Economist, the least we can do as a constructive gesture is to pass Amendment No. 296 so that the Government may have a chance to reconsider the exact form in which they wish to move forward on the economic front with a view to harmonising and effecting full economic and monetary union, because the decision that will be taken as a result of policies in this sphere will far transcend any decision taken hitherto in the EEC.

Mr. Molloy

I apologise to the Committee and the Minister for leaving the Chamber just before the right hon. Gentleman completed his remarks. I had to leave because I was being lobbied by a number of my constituents who are gravely apprehensive about the consequences of our joining the EEC. Like me, they are particularly concerned over the possibility that by adopting the 100-odd lines of this Clause, we shall be selling the sovereignty of this nation and placing our whole future in grave jeopardy.

The hon. and learned Member for Solihull (Mr. Grieve) does not seem to understand the argument which is being adduced by hon. Members on both sides when apprehension is expressed about our joining the Community. As we have examined the Bill and relevant matters, we have been confirmed in our view that we should not join.

The hon. and learned Gentleman seemed to think, as he chastised my right hon. Friend the Member for Stepney (Mr. Shore), that my hon. Friends are concerned only because membership might strike a blow, as the hon. and learned Gentleman put it, against democratic socialism. If that were the case, I am sure that he would be sun ported in that view by, for example, his right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) and his hon. Friend the Member for Oswestry (Mr. Biffen).

That the hon. and learned Gentleman is wrong is clear from the fact that both his colleagues and many others support the case advanced against our membership by my right hon. Friend the Member for Stepney, simply because we want the right to argue our case to the British people and to allow them to decide the future of the nation.

Much has been said about the regional policies and programmes of the Community. My hon. Friend the Member for Penistone (Mr. John Mendelson) made some interesting remarks from his deep experience of the coal and steel industries. I was born in an area that thrived on these industries, which declined only after a Tory Government failed to appreciate their importance and ran them down.

The only contribution, an accidental one, that the Continent made to unemployment in South Wales was when it threw up that ugly phenomenon, Hitler. Suddenly all the craftsmen and workers of this area and of Britain generally who had not been wanted for a decade or more were badly needed.

While I appreciate the importance of the coal and steel arguments adduced by my hon. Friend the Member for Penistone, I assure the House that the same factors apply to my constituents in North Ealing. The area I represent contains a great many light engineering industries and these depend on the basic industries to which my hon. Friend the Member for Penistone referred. One can see that this is not merely a regional problem but rather a national problem.

I support the poignant remarks which were made by the hon. Member for Banbury about New Zealand. This, too, has given me very much concern. I despise those who charge me with being emotional about the rôle which the New Zealanders and people from the other great Commonwealth countries filled when this country of ours required assistance in the very desperate times of the last war. That has to be said. The fact of the matter is that if it had not been for the activities of the British peoples of the Commonwealth, like the New Zealanders, we would not now be having an argument about the EEC because there would not be an EEC to argue about, and possibly there would not even he a House of Commons in which to argue about it. Let us have that clearly on the record.

8.30 p.m.

I come to the point which I made earlier in an intervention in the speech of my right hon. Friend the Member for Stepney. I know full well that the Under-Secretary of State for Trade and Industry will appreciate this. A fortnight ago in that committee of the Council of Europe concerned with health and social security questions we were discussing a grave problem which afflicts the French, the Germans, the Italians and the Dutch. There is no need for anyone to show himself a genius by pointing out that their countries are all in the Common Market. They have immense bureaucratic difficulties. They are difficulties which confront non-indigenous workers in a country—workers who go to one country from another, when, for example, an Italian miner is working in the Ruhr, or a Dutch farm worker is working in Belgium. They suffer agonies when they suddenly discover that what the British people have been led to believe is the case is not the case at all, when they discover that the wonderful social benefits they thought they would get irrespective of which country they worked in and which country they went from. It simply is not true that those wonderful social benefits exist.

They are there in theory, but by the time the bureaucratic machine grinds out what the worker and his family are entitled to have, they are lucky still to be alive. In that committee we discovered that there was not unanimity in practice. If, for example, one were an Italian artisan working in the Ruhr one would not get the same social services as one would if one were a German. There is a world of difference. There is even a world of difference brought about because of the part of Italy from which a worker goes. It is possible for an Italian worker working in one part of Germany, because he went from a certain part of Italy, and is working in a certain part of Germany, to have a different standard, a different form of application, and ultimately a different level of social security. This is because of the federal system in Germany.

So it is quite wrong for people to advance the argument that Britain by joining the EEC would enter a wonderful world of social security where everything is easy and nationality is ignored, and so on.

The Solicitor-General (Sir Geoffrey Howe)

I should like the Committee to be clear about this point. There may well be—I am sure there is—some validity in all the points the hon. Member is making, but I should like to know in which direction, to what kind of society and what kind of Europe he would have us move. Does he take the view that anything which contributes to greater mobility of the people of Europe within Europe is to be deplored as dangerous and unattractive, or will he join with us in trying to remove the obstacles of which he has been speaking and to move towards a more effective economic community?

Mr. Molloy

I can give the answer to that quite easily. It is sheer hypocrisy for any Tory to come to that Box and talk of social security when the most wonderful piece of legislation placed on our Statute Book or the statute book of any country in the world, namely, that setting up the National Health Service, was opposed by the Tory Party. No Tory can talk to us on this side of the Committee about those sorts of things. I can tell the hon. and learned Gentleman what I want us to move towards.

Mr. Thomas Swain (Derbyshire, North-East)

I agree with my hon. Friend's argument. He is following it very logically. In West Germany, of which I know something, there has been created, since the establishment of the Common Market, a ghetto system of foreign workers. Foreign workers are banded together in ghettos strictly in accordance with what part of a country they have come or the class of society from which they originated in that other country.

Mr. Molloy

That is the point I was trying to make. Let me take it a little further to answer the hon. and learned Gentleman, and let me tell him this, that when the Labour Government between 1945 and 1950 established the National Health Service, we set an example to Europe, and for my part I wanted us all on the road to sanity. We wanted reciprocity between this country and those countries. We have seen some extension of reciprocity. The EEC certainly has based some of its ideals on that principle of reciprocity, but the ideal was born in this House of Commons, not in any Common Market. I applaud that ideal, and also the ideal of full opportunity for employment.

However, the fact is that the standard of reciprocity in the Scandinavian countries which are not in the Common Market is higher than that in the Common Market countries. These are facts which the British people ought to know. I appreciate that the Minister will not be able to give an immediate answer to my questions but it is right that this House and the people of this country should know the situation about some of the points I have been making in fairly challenging the social services in the Common Market countries.

Under the Health and Social Questions Committee of the Council of Europe there is a sub-committee, of which I am the chairman, which is examining the code of social security standards. The Committee is looking at each of the European nations which will sign the social security code to see how much they have implemented it, and how much they are shy about implementing it. When we made this examination only a fortnight ago, the Scandinavian countries and the United Kingdom had the least amount of criticism. It is only when we came within the Common Market countries that we found that the code of social security had not been implemented to the full.

These are matters which we should thoroughly examine so that the people can make up their minds. It is a great shame that we could not develop all these matters so that the people who have followed the arguments could make up their minds about who has the better argument on this issue and who has submitted the better case.

We are still prepared to do that but the Government have funked the challenge by introducing the guillotine Motion. Hon. Gentlemen who support Britain's entry into the Common Market know in their hearts that, as on previous occasions, there has been no filibustering and no tedious repetition in debating the Clause and Amendments.

Some of the facts of life that will become apparent when we join the Common Market will surprise even the Government. The British people will start to understand what a grave and damaging issue this can be for our country. But in spite of that, we have the guillotine Motion.

I hope that the Government, even at this stage, will introduce another Measure, avoiding this wicked Motion which cuts down discussion on one of the most serious issues this country has ever faced.

Mr. Tom Normanton (Cheadle)

Having sat in this Chamber and listened to the debate this afternoon for virtually five hours with but few interruptions, I confess to a deep sense of forboding and anxiety. It seems from a remark which was made by the hon. Member for Penistone (Mr. John Mendelson) that he feared that a certain amount of unreality was creeping into this debate. If ever words needed underlining, those are the words. There is unreality and a total inability—I nearly said unwillingness—to understand what the entry of Britain into Europe means. It is not whether we are to accept the Treaty of Rome as a Bible and immediately to look up a book of rules and to make our judgment according to what the book says. It is surely a commitment to look in a certain direction and to influence our thinking in all aspects of our public life in a general direction, which I would question whether even the most bitter critics of our entry could condemn.

We are debating one Amendment and referring to the freedom of movement— [HON. MEMBERS: "No."] We are debating whether the freedom of movement of capital should be included in or excluded from the Bill. But every Amendment which has so far been proposed, were it to be accepted, would in effect be a means not of making the Bill better, but of killing it. This is completely in contrast with the realities of the way in which the European Economic Community works.

I will quote only one example, as I realise that time is advancing and views are sought from the Front Bench in summing up the debate, about which I can speak with first-hand knowledge and experience.

The hon. Member for Penistone referred to the Spinelli document. He said that Signor Spinelli, one of the Commissioners, was in fact drafting and preparing policy decisions on certain areas of industry, one of which was textiles. The hon. Gentleman added that this would be the dictated policy to the whole of Europe. Nothing could be further from the truth. This again highlights the complete inability of right hon. and hon. Members to understand what and how things work in Brussels.

Mr. John Mendelson

I do not think that the hon. Gentleman, if he looks at HANSARD tomorrow, will find that I said that this would then be dictated to the whole of Europe. I do not want to be aggressive towards him. However, he will find that I went on quoting from The Guardian. That particular comment is part of his own imagination.

Mr. Normanton

The word "dictated" may not have been used, but there was no doubt in the minds of most hon. Members who heard the hon. Gentleman that the consequence of the formulation of the policy was that it would be directed towards and imposed on the whole of the industries of the Common Market, including textiles, to be accepted and implemented. That is certainly not so.

The Commission works by having discussions with and taking soundings and seeking comments from all sectors of industry, commerce and finance. It does not make its decisions from ivory towers or political dogma. It makes them only after the most extensive, exhaustive and comprehensive soundings have been taken. It is also extremely important to recognise, when Britain is, so to speak, poised for entry into the Common Market, the extent to which Signor Spinelli and his officials are already taking most discreet, extremely cautious soundings from applicant countries. The Commission recognises that it cannot impose its decisions upon Germany, France, Italy or Britain; it can get its policies accepted only if, at the end of the day, the most exhaustive of inquiries and investigations have brought a consensus view applicable to the decision which it is considering. This applies as much to textiles as to many other sectors.

We are already being consulted as individuals, not as Governments, on the kind of structure that different industries should have. The Commission has to be cautious, for the very good reason that it cannot logically presume, until the Bill is enacted, that we shall automatically become a member of the Common Market.

There has been a concentrated effort this afternoon to deal with the financial aspects contained in the Amendment within the context of regional development and regional policies.

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

8.45 p.m.

Listening, as I am sure the House listened with considerable interest, to what the right hon. Member for Battersea, North (Mr. Jay) said on the subject, some of us might almost be forgiven were we to think that the regional policies of the last 10 or 20 years, when we were certainly not in the Common Market, produced the most magnificent, wonderful, halycon conditions in the development areas of Britain. It just is not true.

It is also justifiable to read into eulogies of the systems and taxation techniques introduced by the previous Government and by the Conservative Government before them that those were the only techniques which will be successful for the future. They are not. The keynote for succesfully solving economic and monetary problems which are not peculiar to us were highlighted by the right hon. Member for Manchester, Cheetham (Mr. Harold Lever), who said with profound wisdom and judgment that no problem can be solved in isolation, or other than in the context of the general level of economic prosperity. This view the House must accept, because the experience of the past has shown our growing inability to solve these problems in isolation from major policy decision taking inside Europe.

I have only one brief comment to make on regional employment. If one were to listen to, and perhaps later read, the comments made about the system which is operating inside Europe, one might be forgiven for feeling depressed on leaving the Chamber, but the realities of what is happening in the context of regional policies are not in tune with what is being described by far too many hon. and right hon. Members.

I go back to where I started by saying that we have been indulging, and continue to indulge, in a total inability to recognise the facts, the realities, which exist in Europe. Once we recognise them, I challenge anyone to deny that the Bill represents the way, and I think the only way, in which we can get the British economy as a whole on to the right lines.

Mr. Shore

It would be no pleasure of mine in normal circumstances even to suggest that this very important debate on the regions and on capital movement should be brought to an end, but clearly we are up against a very rigid time limit and there are many other matters to which sooner or later we must give some attention. It is also clear to me, at any rate, that we shall have no additions to the very inadequate replies we have so far had from the Treasury Bench. I suggest that we should now put the matter to the vote.

Several Hon. Members rose

The Second Deputy Chairman

Mr. Harold Walker.

Mr. Harold Walker

I protest, Mr. Mallalieu. We have spent hundreds of hours on this extremely important issue of Britain's entry into Europe, and in that whole period I have not once been given an opportunity to speak. I protest if I am now to be gagged when I want to speak on behalf of constituents who will be immediately affected by the Government's decision on entry.

Several Hon. Members rose

The Second Deputy Chairman

Mr. Denzil Davies.

Mr. Denzil Davies (Llanelly)

Some of us have sat right through the debate, but not one hon. Member for Wales or Scotland has been called on the important subject of regional development.

Several Hon. Members rose

The Second Deputy Chairman

Order. I called on Mr. Harold Walker to make his speech, but he has not done so.

Mr. Harold Walker

I beg your pardon, Mr. Mallalieu, I thought you were calling me to give me an opportunity to register my protest at not being called. I assure you, and my anxious Friends on the Front Bench, that I shall be very brief. I wish to make a brief contribution because my constituents are feeling the chill of the cold wind that will blow through the regions with even more severity than in recent years.

The hon. Member for Cheadle (Mr. Normanton) said that sucecssive Governments had grappled with the problems of the regions for many years with varying degrees of unsuccess. He said that regional problems are by no means unique to this country, and with that I am in agreement. Our regional imbalance follows the pattern of regional imbalance in European countries in that in the areas furthest away from the centre the conditions are worst—the higher the level of unemployment, and the lower the level of earnings. Scotland, Wales, Northern Ireland and the development areas are the far flung areas. Nearer to the centre are the grey areas and in the centre prosperity is concentrated.

My hon. and learned Friend the Member for Northampton (Mr. Paget) spoke of the gravitational flow of investment into the centre, and said that the centre of gravity of EFTA is not the centre of gravity within the enlarged Community. He is absolutely right. We must recognise, as does the Commission, that the pattern of regional development in the Community reflects our own pattern. Prosperity is concentrated in the rich heartland while the areas on the periphery suffer from severe problems. We shall be on the geographic periphery of the enlarged Community.

My hon. Friend the Member for Ealing, North (Mr. Molloy) reflected the concern of his constituents, and I want to do the same. I hope that the Committee has noted the Motion No. 310 tabled by me and my hon. Friends which appeared on the Notice Paper today—I hope that some hon. Members will go further and append their names to it. It is concerned with my constituency and with the constituencies of my hon. Friends in which are located plants of the giant Ford Motor Co. The Motion refers to jobs being transferred from the Ford Motor Co. in this country to Germany and to the German Ford Motor Co. advertising for labour in precisely those categories that have been made redundant in this country.

The Motion refers to the Ford tool factory at Doncaster being entirely closed down as a consequence of this transfer of work. Doncaster is an area where

unemployment is currently running at 7 per cent. and male unemployment at 10 per cent. Only 12 months ago the company posted notices to the effect that it had undertaken to purchase 16 acres of land for a massive expansion in my constituency.

What has happened in the meantime to cause this sudden reversal of policy? The answer is that this House has taken the decision to enter Europe, and the Ford Company is responding to the gravitational pull which was described so well by my hon. and learned Friend the Member for Northampton. The company sees now that its centre will not be, as hitherto, in the United Kingdom but in the geographical centre of the enlarged Community where it will have direct acccess to the markets of the Community Apparently, we are powerless to prevent that, despite the categorical assurances given by the company when control was shifting from the ownership vested in this country to the American parent company and, furthermore, the assurances given by the Government at the time.

I think that I have an obligation to my constituents to draw attention to the immediate consequences, even before we have experienced this gravitational pull of investment towards the centre, which is the reverse of what was described by an hon. Member opposite. I believe that my constituents are beginning to feel the chill wind and that Ford workers throughout factories in Britain are beginning to sense this wind blowing in their direction. I believe that it will spread to other industries and that this is an example of a pattern which will become more widely established before we enter the Community and which will gain pace swiftly after we enter.

Question put, That the Amendment be made: —

The Committee divided: Ayes 265, Noes 269.

Division No. 163.] AYES [8.56 p.m.
Abse, Leo Benn, Rt. Hn. Anthony Wedgwood Bradley, Tom
Allaun, Frank, (Salford, E.) Bennett, James (Glasgow,Bridgeton) Brown, Hugh D. (G'gow, Provan)
Archer, Peter (Rowley Regis) Bidwell, Sydney Brown, Ronald (Shoreditch & F'bury)
Armstrong, Ernest Biffen, John Buchan, Norman
Ashley, Jack Bishop, E. S. Buchanan, Richard (G'gow, Sp'burn)
Ashton, Joe Blenkinsop, Arthur Butler, Mrs. Joyce (Wood Green)
Atkinson, Norman Boardman, H. (Leigh) Campbell, I. (Dunbartonshire, W.)
Bagier, Gordon A. T. Body, Richard Cant, R. B.
Barnett, Guy (Greenwich) Booth, Albert Carter, Ray (Birmingh'm, Northfield)
Barnett, Joel (Heywood and Royton) Bottomley, Rt. Hn. Arthur Carter-Jones, Lewis (Eccles)
Baxter. William Boyden, James (Bishop Auckland) Castle, Rt. Hn. Barbara
Clark, David (Colne Valley) Irvine, Rt.Hn.SirArthur(Edge Hill) Padley, Walter
Cocks, Michael (Bristol, S.) Janner, Greville Paget, R. T.
Cohen, Stanley Jay, Rt. Hn. Douglas Palmer, Arthur
Coleman, Donald Jeger, Mrs. Lena Pannell, Rt. Hn. Charles
Concannon, J. D. Jenkins, Hugh (Putney) Parry, Robert (Liverpool, Exchange)
Conlan, Bernard John, Brynmor Pavitt, Laurie
Cox, Thomas (Wandsworth, C.) Johnson, James (K'ston-on-Hull, W.) Pendry, Tom
Crawshaw, Richard Johnson, Walter (Derby, S.) Pentland, Norman
Crosland, Rt. Hn. Anthony Jones, Barry (Flint, E.) Perry, Ernest G.
Crossman, Rt. Hn. Richard Jones, Dan (Burnley) Powell, Rt. Hn. J. Enoch
Cunningham, G. (Islington, S.W.) Jones,Rt.Hn.SirElwyn(W.Ham,S.) Prentice, Rt. Hn. Reg.
Cunningham, Dr. J. A. (Whitehaven) Jones, Gwynoro (Carmarthen) Prescott, John
Dalyell, Tam Jones, T. Alec (Rhondda, W.) Price, J. T. (Westhoughton)
Darling, Rt. Hn. George Judd, Frank Price, William (Rugby)
Davidson, Arthur Kaufman, Gerald Probert, Arthur
Davies, Denzil (Llanelly) Kelley, Richard Rankin, John
Davies, Ifor (Gower) Kerr, Russell Reed, D. (Sedgefield)
Davis, Clinton (Hackney, C.) Kinnock, Neil Rees, Merlyn (Leeds, S.)
Davis, Terry (Bromsgrove) Lambie, David Rhodes, Geoffrey
Deakins, Eric Lamond, James Richard, Ivor
de Freitas, Rt. Hn. Sir Geoffrey Latham, Arthur Roberts, Albert (Normanton)
Dell, Rt. Hn. Edmund Leadbitter, Ted Robertson, John (Paisley)
Dempsey, James Lee, Rt. Hn. Frederick Roderick,Caerwyn E. (Br'c'n&R'dnor)
Doig, Peter Leonard, Dick Rodgers, William (Stockton-on-Tees)
Dormand, J. D. Lestor, Miss Joan Roper, John
Douglas, Dick (Stirlingshire, E.) Lever, Rt. Hn. Harold Rose, Paul B.
Driberg Tom Lewis, Arthur (W. Ham, N.) Ross, Rt. Hn. William (Kilmarnock)
Duffy, A. E. P. Lewis, Ron (Carlisle) Rowlands, Edward
Dunn James A. Lipton, Marcus Sandelson, Neville
Dunnett, Jack Lomas, Kenneth Sheldon, Robert (Ashton-under-Lyne)
Eadie, Alex Lyon, Alexander W. (York) Shore, Rt. Hn. Peter (Stepney)
Edwards, Robert (Bilston) Lyons, Edward (Bradford, E.) Short,Rt.Hn.Edward(N'c1tle-u-Tyne)
Edwards, William (Merioneth) Mabon. Dr. J. Dickson Short, Mrs. Renée (W'hampton, N.E.)
Ellis, Tom McBride, Neil Silkin, Rt. Hn. John (Deptford)
English, Michael McCartney, Hugh Sillars, James
Evans, Fred McElhone, Frank Silverman, Julius
Ewing, Harry McGuire, Michael Skinner, Dennis
Faulds Andrew Mackenzie, Gregor Small, William
Fernyhough, Rt. Hn. E. Mackie, John Smith, John (Lanarkshire, N.)
Fisher, Mrs. Doris(B'ham,Ladywood) Mackintosh John P Spearing, Nigel
Fitch, Alan (Wigan) Maclennan, Robert Spriggs, Leslie
Fletcher, Raymond (Ilkeston) McMillan Tom (Glasgow, C) Stallard, A. W.
Fletcher, Ted (Darlington) McNamara, J. Kevin Stewart, Rt. Hn. Michael (Fulham)
Foley, Maurice Mahon, Simon (Bootle) Stoddart, David (Swindon)
Foot, Michael Mallalieu, J. P. W. (Huddersfield, E.) Stonehouse, Rt. Hn. John
Ford, Ben Marquand, Davin Straues, Rt. Hn. G. R.
Forrester, John Marsden, F. Summerskill, Hn. Dr. Shirley
Fraser, John (Norwood) Marshall, Dr. Edmund Swain, Thomas
Freeson, Reginald Marten, Neil Taverne, Dick
Garrett, W. E. Mason, Rt. Hn. Roy Thomas.Rt.Hn.George (Cardiff,W.)
Gilbert, Dr. John Mayhew, Christopher Tinn, James
Ginsburg, David (Dewsbury) Meacher, Michael Tomney, Frank
Golding, John Mellish, Rt. Hn. Robert Torney, Tom
Gordon Walker, Rt. Hn. P. C. Mendelson, John Tuck, Raphael
Gourlay, Harry Mikardo, Ian Turton, Rt. Hn. Sir Robin
Grant, George (Morpeth) Millan, Bruce Urwin, T. W.
Grant, John D. (Islington, E.) Miller, Dr. M. S. Varley, Eric G.
Griffiths, Eddie (Brightside) Milne, Edward Wainwright, Edwin
Hamilton, James (Bothwell) Mitchell, R. C. (S'hampton, Itchen) Walker, Harold (Doncaster)
Hamilton, William (Fife, W.) Moate, Roger Walker-Smith, Rt. Hn. Sir Derek
Hamling, William Molloy, William Wallace, George
Hardy, Peter Molyneaux, James Watkins, David
Harrison, Walter (Wakefield) Morgan, Elystan (Cardiganshire) Wells, William (Walsall, N.)
Hart, Rt. Hn. Judith Morris, Alfred (Wythenshawe) White, James (Glasgow, Pollok)
Hattersley, Roy Morris, Charles R. (Openshaw) Whitehead, Phillip
Healey, Rt. Hn. Denis Morris, Rt. Hn. John (Aberavon) Whitlock, William
Heffer, Eric S. Moyle, Roland Willey, Rt. Hn. Frederick
Hooson, Emlyn Mulley, Rt. Hn. Frederick Williams, Alan (Swansea, W.)
Horam, John Murray, Ronald King Williams, W. T. (Warrington)
Houghton, Rt. Hn. Douglas Oakes, Gordon Wilson, Alexander (Hamilton)
Howell, Denis (Small Heath) Ogden, Eric Wilson, Rt. Hn. Harold (Huyton)
Huckfield, Leslie O'Halloran, Michael Wilson, William (Coventry, S.)
Hughes, Rt. Hn. Cledwyn (Anglesey) O'Malley, Brian Woof, Robert
Hughes, Mark (Durham) Oram, Bert
Hughes, Robert (Aberdeen, N.) Orbach, Maurice TELLERS FOR THE AYES:
Hughes, Roy (Newport) Orme, Stanley Mr. Joseph Harper and
Hunter, Adam Oswald, Thomas Mr. James Wellbeloved.
Hutchison, Michael Clark Owen, Dr. David (Plymouth, Sutton)
NOES
Adley, Robert Gibson-Watt, David Mawby, Ray
Alison, Michael (Barkston Ash) Gilmour, Ian (Norfolk, C.) Maxwell-Hyslop, R. J.
Allason, James (Hemel Hempstead) Gilmour, Sir John (Fife, E.) Meyer, Sir Anthony
Amery, Rt. Hn. Julian Godber, Rt. Hn. J. B. Mills, Peter (Torrington)
Archer, Jeffrey (Louth) Goodhart, Philip Mitchell,Lt-Col.C.(Aberdeenshire,W)
Astor, John Gorst, John Mitchell, David (Basingstoke)
Atkins, Humphrey Gower, Raymond Money, Ernie
Awdry, Daniel Grant, Anthony (Harrow, C.) Monks, Mrs. Connie
Baker, Kenneth (St. Marylebone) Gray, Hamish Monro, Hector
Baker, W. H. K. (Banff) Green, Alan More, Jasper
Balniel, Rt. Hn. Lord Grieve, Percy Morrison, Charles
Barber, Rt. Hn. Anthony Griffiths, Eldon (Bury St. Edmunds) Murton, Oscar
Batstord, Brian Grylls, Michael Nabarro, Sir Gerald
Beamish, Col. Sir Tufton Gummer, J. Selwyn Neave, Alrey
Bennett, Sir Frederic (Torquay) Gurden, Harold Normanton, Tom
Bennett, Dr. Reginald (Gosport) Hall, Miss Joan (Keighley) Nott, John
Berry, Hn. Anthony Hall, John (Wycombe) Onslow, Cranley
Biggs-Davison, John Hall-Davis, A. G. F. Oppenhelm, Mrs. Sally
Blaker, Peter Hamilton, Michael (Salisbury) Osborn, John
Boardman, Tom (Leicester, S.W.) Hannam, John (Exeter) Owen, Idris (Stockport, N.)
Boscawen, Robert Harrison Brian (Maldon) Page, Graham (Crosby)
Bossom, Sir Clive Harrison, Col. Sir Harwood (Eye) Page, John (Harrow, W.)
Bowden, Andrew Haselhurst, Alan Peel, John
Bray, Ronald Hastings, Stephen Percival, Ian
Brinton, Sir Tatton Havers, Michael Peyton, Rt. Hn. John
Brocklebank-Fowler, Christopher Hay, John Pike, Miss Mervyn
Brown, Sir Edward (Bath) Hayhoe, Barney Pounder, Rafton
Bruce-Gardyne, J. Heath, Rt. Hn. Edward Pounder, Rafton
Bryan, Paul Heseltins, Terence L. Price, David (Eastleigh)
Buchanan-Smith, Allck(Angus,N&M) Hicks, Robert Proudfoot, Wilfred
Buck, Antony Higgins, Terence L. Pym, Rt. Hn. Francis
Bullus, Sir Eric Hiley, Joseph Quennell, Miss J. M.
Burden, F. A. Hill, John E. B. (Norfolk, S.) Raison, Timothy
Campbell, Rt.Hn.G.(Moray&Nairn) Hill, James (Southampton, Test) Ramsden, Rt. Hn. James
Carlisle, Mark Holland, Philip Rawlinson, Rt. Hn. Sir Peter
Carr, Rt. Hn. Robert Holt, Miss Mary Redmond, Robert
Chapman, Sydney Hordern, Peter Reed, Laurance (Bolton, E.)
Chataway, Rt. Hn. Christopher Hornby, Richard Rees, Peter(Dover)
Chichester-Clark, R. Hornsby-Smiih.Rt.Hn.Dame Patricia Rees-Davies, W. R.
Clark, William (Surrey, E.) Howe, Hn. Sir Geoffrey (Reigale) Renton, Rt. Hn. Sir David
Clarke, Kenneth (Rushcliffe) Howell, Ralph (Norfolk, N.) Rhys Williams, Sir Brandon
Clegg, Walter Hunt, John Ridley, Hn. Nicholas
Cockeram, Eric Iremonger, T. L. Ridsdale, Julian
Cooke, Robert Jamas, David Roberts, Michael (Cardiff, N.)
Coombs, Derek Jenkin, Patrick (Woodford) Roberts, Wyn (Conway)
Cooper, A. E. Jessel, Toby Rodgers, Sir John (Sevenoaks)
Cordle, John Johnson Smith, G. (E. Grinstead) Rossi, Hugh (Hornsey)
Corfield, Rt. Hn. Frederick Jopling, Michael Rost, Peter
Critchley, Julian Joseph, Rt. Hn. Sir Keith Royle, Anthony
Crouch, David Kellett-Bowman, Mrs. Elaine St. John-Stevas, Norman
Crowder, F. P. Kershaw, Anthony Scott, Nicholas
Davies, Rt. Hn. John (Knutstord) Kimball, Marcus Scott-Hopkins, James
d'Avigdor-Goldsmid, Sir Henry King, Evelyn (Dorset, S.) Sharpless, Richard
d'Avigdor-Goldsmid.Maj.-Gen.James King, Tom (Bridgwater) Shaw, Michael (Sc'b'gh & Whitby)
Deedes, Rt. Hn. W. F. Kinsey, J. R. Shelton, William (Clapham)
Digby, Simon Wingfield Kirk, Peter Sinclair, Sir George
Dixon, Piers Knox, David Skeet, T. H. H.
Dodds-Parker, Douglas Lambton, Lord Smith, Dudley (W' wick & L' mington)
Drayson G B Lane, David Soref, Harold
du Cann, Rt. Hn. Edward Langford-Holt, Sir John Speed, Keith
Dykes, Hugh Legge-Bourke, Sir Harry Spence, John
Eden, Sir John Le Merchant, Spencer Sproat, Iain
Edwards, Nicholas (Pembroke) Lloyd, Ian (P'tsm'th, Langstone) Stainton, Keith
Elliot, Capt. Walter (Carshalton) Longden, Sir Gilbert Stewart-Smith, Geoffrey (Belper)
Elliott, R. W. (N'c'tle-upon-Tyne,N.) Loveridge, John Stodart, Anthony (Edinburg, W.)
Emery, Peter Luce, R. N. Stoddart-Scott, Col. Sir M.
Eyre, Reginald McAdden, Sir Stephen Stokes, John
Fenner, Mrs. Peggy MacArthur, Ian Stuttaford, Dr. Tom
Finsberg, Geoffrey (HampMead) McCrindle, R. A. Tapsell, Peter
Fisher, Nigel (Surbiton) McLaren, Martin Taylor, Sir Charles (Eastbourne)
Fletcher-Cooke, Charles Maclean, Sir Fltzroy Taylor,Edward M.(G'gow,Cathcart)
Fookes, Miss Janet Macmillan.Rt.Hn.Maurice (Farnham) Taylor, Frank (Moss Side)
Fortescue, Tim McNair-Wilson, Michael Taylor, Robert (Croydon, N.W.)
Foster, Sir John McNair-Wilson, Patrick (NewForest) Tebbit, Norman
Fowler, Norman Madden, Martin Temple, John M.
Fox, Marcus Madel, David Thatcher, Rt. Hn. Mrs. Margaret
Fry, Peter Mather, Carol Thomas, John Stradling (Monmouth)
Galbraith, Hn. T. G. Maude, Angus Thomas, Rt. Hn. Peter (Hendon, S.)
Gardner, Edward Maudling, Rt. Hn. Reginald Thompson, Sir Richard (Croydon, S.)
Tilney, John.
Trafford, Dr. Anthony Walters, Dennis Woodhouse, Hn. Christopher
Trew, Peter Ward, Dame Irene Woodnutt, Mark
Tugendhat, Christopher Warren, Kenneth Worsley, Marcus
van Straubenzee, W. R. Wells, John (Maidstone) Wylie, Rt. Hn. N. R.
Vaughan, Dr. Gerard White, Roger (Gravesend) Younger, Hn. George
Vickers, Dame Joan Wiggin, Jerry
Waddington, David Wilkinson, John TELLERS FOR THE NOES:
Walder, David (Clitheroe) Winterton, Nicholas Mr. Victor Goodhew and
Walker, Rt. Hn. Peter (Worcester) Wolrige-Gordon, Patrick Mr. Paul Hawkins
Wall. Patrick Wood. Rt. Hn. Richard

Amendment accordingly negatived.

The Second Deputy Chairman

Mr. Shore, to move Amendment No. 357, in page 2, line 26, after 'Treaties', insert: 'except such rights, powers, liabilities, obligations and restrictions as may arise under Directive 68/414/EEC and Decisions 68/416/ EEC and 3 /171/ECSC concerning energy Policy'.

Mr. Shore

The figures we have seen in the last Division not only indicate the true feelings of the Committee on this matter but demonstrate the great value of our being able to continue the serious debates on these matters which are of great importance.

The difficulty we are in is that the Chair has selected six separate debates for today. So far, at just after nine o'clock, we have been able to deal with

only two. I now face the prospect of dealing with this important Amendment. It is under great protest and in the face of this savage guillotine that I am forced to say that I cannot move Amendment No. 357. We will seek to table it at a later stage when we hope to give it some consideration.

Amendment proposed: No. 216, in page 2, line 29, after 'shall', insert: 'provided that the first draft of each and every instrument introducing after the date of entry any rights, powers, liabilities, obligations, restrictions, remedies or procedures shall have been approved by resolution of each House of Parliament'.—[Mr. Michael Foot.]

Question put, That the Amendment be made:

The Committee divided: Ayes, 264, Noes, 270.

Division No. 164.] AYES [9.8 p.m.
Abse, Leo Crosland, Rt. Hn. Anthony Garrett, W. E.
Allaun, Frank (Salford, E.) Crossman, Rt. Hn. Richard Gilbert, Dr. John
Archar, Peter (Rowley Regis) Cunningham, G. (Islington, S.W.) Ginsburg, David (Dewsbury)
Armstrong, Ernest Cunningham, Dr. J. A. (Whitehaven) Golding, John
Ashley, Jack Dalyell, Tam Gordon Walker, Rt. Hn. P. C.
Ashton, Joe Darling, Rt. Hn. George Gorlay, Harry
Atkinson, Norman Davidson, Arthur Grant, George (Morpeth)
Bagier, Gordon A. T. Davies, Denzil (Llanelly) Grant, John D. (Islington, E.)
Barnett, Guy (Greenwich) Davies, Ifor (Gower) Griffiths, Eddie (Brightside)
Barneet, Joel (Heywood and Royton) Davis, Clinton, (Hackney, C.) Hamilton, James (Bothwell)
Baxter, William Davis, Terry (Bromsgrove) Hamilton, William (Fife, W.)
Benn, Rt. Hn. Anthony Wedgwood Deakins, Eric Hamling. William
Bennett, James (Glasgow, Bridgeton) de Freitas, Rt. Hn. Sir Geoffrey Hardy, Peter
Bidwell, Sydney Dell, Rt. Hn. Edmund Harrison, Walter (Wakefield)
Biffen, John Dempsey, James Hart, Rt. Hn. Judith
Bishop, E. S. Doig, Peter Hattersley, Roy
Blenkinsop, Arthur Dormand, J. D. Healey, Rt. Hn. Edward
Boardman, H. (Leigh) Douglas, Dick (Stirlingshire, E.) Heffer, Eric S.
Body, Richard Driberg, Tom Hooson, Emlyn
Booth, Albert Duffy, A. E. P. Horam John
Bottomley, Rt. Hn. Arthur Dunn, James A. Houghton, Rt. Hn. Douglass
Boyden, James (Bishop Auckland) Dunnett, Jack Howell, Denis (Small Health)
Bradley, Tom Eadie, Alex Huckfield, Leslie
Brown, Hugh D. (G'gow, Provan) Edwards, Robert (Bilston) Huges, Rt. Hn. Cledwyn (Anglessey)
Brown, Ronald (Shoreditch & F'bury) Edwards, William (Merioneth) Hughes, Mark (Durham)
Buchan, Noman Ellis, Tom Hughes, Robert (Aberdeen, N.)
Buchanan, Richard (G'gow, Sp'burn) English, Michael Huges, Roy (Newport)
Butler, Mrs. Joyce (Wood Green) Evans, Fred Hunter, Adam
Campbell, I. (Dunbartonshire, W.) Ewing, Henry Hutchison, Michael Clark
Cant, R. B. Faulds, Andrew Irvine, Rt. Hn.SirArthur(Edge Hlll)
Carter, Ray (Birmingh'm, Northfield) Fernhhough, Rt. Hn. E. Janner, Greville
Carter-Jones, Lewis (Eccles) Fisher, Mrs. Dorls(B'ham,Ladywood) Jay, Rt. Hn. Douglas
Castle, Rt. Hn. Barbara Fitch, Alan (Wigan) Jegger, Mrs. Lena
Clark, David (Colne Valley) Fletcher, Raymond (Ilkeston) Jenkins, Hugh (Putney)
Cocks, Michael (Bristol, S.) Fletcher, Ted (Darlington) John, Brynmor
Cohen, Stanley Foley, Maurice Johnson, James (K' ston-on-Hull, W.)
Coleman, Donald Foot, Michael Jhonson, Walter (Derby, S.)
Concannon, J. D. Ford, Ben Johnson, Walter (Derby, S.)
Conlan, Bernard Forrester, John Jones, Barry (Flint, E.)
Cox, Thomas (Wandsworth, C.) Fraser, John (Norwood) Jones, Dan (Burnley)
Crawshaw, Richard Freeson, Reginald Jones,Rt.Hn.Sir Elwyn (W.Ham.S.)
Jones, Gwynoro (Carmarthen) Mitchell, R. C. (S'hnmpton, Itchen) Sheldon, Robert (Ashton-under-Lyne)
Jones, T. Alec (Rhondda, W.) Moate, Roger Shore, Rt. Hn. Peter (Stepney)
Judd, Frank Molloy, William Short,Rt.Hn.Edward (N'c'tle-u-Tyne)
Kaufman, Gerald Molyneaux, James Short, Mrs. Renée (W'hampton,N.E.)
Kelley, Richard Morgan, Elystan (Cardiganshire) Silkin, Rt. Hn. John (Deptford)
Kerr, Russell Morris, Alfred (Wythenshawe) Sillars, James
Kinnock, Neil Morris, Charles R. (Openshaw) Silverman, Julius
Lambie, David Morris, Rt. Hn. John (Aberavon) Skinner, Dennis
Lamond, James Moyle, Roland Small, William
Latham, Arthur Mulley, Rt. Hn. Frederick Smith, John (Lanarkshire, N.)
Leadbitter, Ted Murray, Ronald King Spearing, Nigel
Lee, Rt. Hn. Frederick Oakes, Gordon Spriggs, Leslie
Leonard, Dick Ogden, Eric Stallard, A. W.
Lestor, Miss Joan O'Halloran, Michael Stewart, Rt. Hn. Michael (Fulham)
Lever, Rt. Hn. Harold O'Malley, Brian Stoddart, David (Swindon)
Lewis, Arthur (W. Ham, N.) Oram, Bert Stonehouse, Rt. Hn. John
Lewis, Ron (Carlisle) Orbach, Maurice Strang, Gavin
Lipton, Marcus Orme, Stanley Strauss, Rt. Hn. G. R.
Lomas, Kenneth Oswald, Thomas Summerskill, Hn. Dr. Shirley
Lyon, Alexander W. (York) Owen, Dr. David (Plymouth, Sutton) Swain, Thomas
Lyons, Edward (Bradford, E.) Padley, Walter Taverne, Dick
Mabon, Dr. J. Dlckson Paget, R. T. Thomas,Rt.Hn.George (Cardiff.W.)
McBride, Neil Palmer, Arthur Tinn, James
McCartney, Hugh Panell, Rt. Hn. Charles Tomney, Frank
McElhone, Frank Parry, Robert (Liverpool, Exchange) Torney, Tom
McGuire, Michael Pavitt, Laurie Tuck, Raphael
Mackenzie, Gregor Pendry, Tom Turton, Rt. Hn. Sir Robin
Mackie, John Pentland, Norman Urwin, T. W.
Mackintosh, John P. Perry, Ernest G. Varley, Eric G.
Maclennan, Robert Powell, Rt. Hn. J. Enoch Wainwright, Edwin
McMillan, Tom (Glasgow, C.) Prentice, Rt. Hn. flog Walker, Harold (Doncaster)
McNamara, J. Keith Prescott, John Walker-Smith, tot. Hn. Sir Derek
Mahon, Simon (Bootle) Price, J. T. (Westhoughton) Wallace, George
Mallalieu, J. p. w. (Huddersfield. E.) Price, William (Rugby) Watkins, David
Marks, Kenneth Probert, Arthur Wells, William (Walsall, N.)
Marquand, David Rankin, John White, James (Glasgow. Pollok)
Marsden, F. Reed, D. (Sedgefield) Whitehead, Phillip
Marshall, Dr. Edmund Rees, Merlyn (Leeds, S.) Whitlock, William
Marten, Neil Rhodes, Geoffrey Willey, Rt. Hn. Frederick
Mason, Rt. Hn. Roy Richard, Ivor Williams, Alan (Swansea. W.)
Mayhew, Christopher Roberts, Albert (Normanton) Williams, W. T. (Warrington)
Meacher, Michael Robertson, John (Paisley) Wilson, Alexander (Hamilton)
Mellish, Rt.. Hn. Robert Roderick, Caerwyn E.(Br'c'n&R'dnor) Wilson, Rt. Hn. Harold (Huyton)
Mendelson, John Rodgerts, William (Stockton-on-Tees) Wilson, William (Coventry, S.)
Meyer, Sir Anthony Roper, John Woof, Robert
Millan, Bruce Rose, Paul B.
Miller, Dr. M. S. Ross, Rt. Hn. William (Kilmarnock) TELLERS FOR THE AYES:
Milne. Edward Rowlands, Edward Mr. Joseph Harper and
Sandelson, Neville Mr. James Wellbeloved.
NOES
Adley, Robert Campbell, Rt.Hn.G.(Moray&Nairn) Elliot, Capt. Walter (Carshalton)
Alison, Michael (Barkston Ash) Carlisle, Mark Elliott.R. W. (N'c'tle-upon-Tyne.N.)
Allason, James (Hemel Hempstead) Carr, Rt. Hn. Robert Emery, Peter
Amery, Rt. Hn. Julian Chapman, Sydney Eyre, Reginald
Archer, Jeffrey (Louth) Chataway, Rt. Hn. Christopher Fenner, Mrs. Peggy
Astor, John Chichester-Clark, R. Finsberg. Geoffrey (Hampstead)
Atkins, Humphrey Churchill, W. S. Fisher, Nigel (Surbiton)
Awdry, Daniel Clark, William (Surrey, E.) Fletcher-Cooke, Charles
Baker, Kenneth (St. Marylebone) Clarke, Kenneth (Rushcliffe) Fookes, Miss Janet
Baker, W. H. K. (Banff) Clegg, Walter Fortescue, Tim
Balniel, Rt. Hn. Lord Cockeram, Eric Foster, Sir John
Barber, Rt. Hn. Anthony Cooke, Robert Fowler, Norman
Batsford, Brian Coombs, Derek Fox, Marcus
Beamish. Col. Sir Tufton Cooper, A. E. Fry, Peter
Bennett, Sir Frederic (Torquay) Cordle, John Galbraith, Hn. T. G.
Bennett. Dr. Reginald (Gosport) Corfield, Rt. Hn. Frederick Gardner, Edward
Berry, Hn. Anthony Costain, A. P. Gibson-Watt, David
Biggs-Davison, John Critchley, Julian Gilmour, Ian (Norfolk, C.)
Blaker, Peter Crouch, David Gilmour, Sir John (Fife, E.)
Boardman, Tom (Leicester, S.W.) Crowder, F. P. Godber, Rt. Hn. J. B.
Boscawen. Robert Davies, Rt. Hn. John (Knutsford) Goodhart, Philip
Bowden, Andrew d'Avlgdor-Goldsmid, Sir Henry Goodhew, Victor
Bray, Ronald d'Avigdor-Goldsmid, MaJ.-Gen.James Gorst, John
Brinton, Sir Tatton Deedes, Rt. Hn. W. F. Gower, Raymond
Brocklebank-Fowler, Christopher Digby, Simon Wingfleld Grant, Anthony (Harrow, C.)
Brown, Sir Edward (Bath) Dixon, Piers Gray, Hamish
Bruce-Gardyne, J. Dodds-Parker. Douglas Green, Alan
Bryan, Paul Drayson, G. B. Grieve, Percy
Buchanan-Smilh, Alick(Angus,N&M) du Cann, Rt. Hn. Edward Griffiths, Eldon (Bury St. Edmunds)
Buck, Antony Dykes, Hugh Gryils, Michael
Bullus, Sir Eric Eden, Sir John Gummer, J. Selwyn
Burden. F. A. Edwards, Nicholas (Pembroke) Gurden, Harold
Hall, Miss Joan (Keighley) Macmillan.Rt.Hn.Maurice (Farnham) Sharpies, Richard
Hall, John (Wycombe) McNair-Wilson, Michael Shaw, Michael (Sc'b'gh & Whitby)
Hall-Davis, A. G. F. McNair-Wilson, Patrick (NewForest) Shelton, William (Clapham)
Hamilton, Michael (Salisbury) Maddan, Martin Simeons, Charles
Hannam, Jonn (Exeter) Madel, David Sinclair, Sir George
Harrison, Brian (Maldon) Mather, Carol Skeet, T. H. H.
Harrison, Col. Sir Harwood (Eye) Maude, Angus Smith, Dudley (W'wick & L'mington)
Haselhurst, Alan Maudling, Rt. Hn. Reginald Soref, Harold
Hastings, Stephen Mawby, Ray Speed, Keith
Havers, Michael Maxwell-Hyslop, R. J. Spence, John
Hay, John Meyer, Sir Anthony Sproat, Iain
Hayhoe, Barney Mills, Peter (Torrington) Stainton, Keith
Heath, Rt. Hn. Edward Mitchell,Ll.-Col.C.(Aberdeenshire.W) Stanbrook, Ivor
Heseltine, Michael Mitchell, David (Basingstoke) Steel, David
Hicks, Robert Money, Ernie Stewart-Smith, Geoffrey (Belper)
Higgins, Terence L Monks, Mrs. Connie Stodart, Anthony (Edinburgh, W.)
Hiley, Joseph Monro, Hector Stoddart-Scott, Col. Sir M.
Hill, John E. B. (Norfolk, S.) More, Jasper Stokes, John
Hill, James (Southampton, Test) Morrison, Charles Stuttaford, Dr. Tom
Holt, Miss Mary Nabarro, Sir Gerald Tapsell, Peter
Hordern, Peter Neave, Airey Taylor, Sir Charles (Eastbourne)
Hornby, Richard Normanton, Tom Taylor, Edward M. (G'gow.Cathcart)
Hornsby-Smith,Rt.Hn.DamePatricia Nott, John Taylor, Frank (Moss Side)
Howe, Hn. Sir Geoffrey (Reigate) Onslow, Cranley Taylor, Robert (Croydon, N.W.)
Howell, David (Guildford) Oppenheim, Mrs. Selly Tebbit, Norman
Howell Ralph (Norfolk N) Osborn John Temple, John M.
Hunt, John Owen, Idris (Stockport, N.) Thatcher, Rt. Hn. Mrs. Margaret
Iremonger, T. L. Page, Graham (Crosby) Thomas, Rt. Hn. Peter (Hendon, S.)
James, David Page, John (Harrow, W.) Thompson, Sir Richard (Croydon. S.)
Jenkin, Patrick (Woodford) Parkinson, Cecil Tilney, John
Jessel, Toby Peel, John Trafford, Dr. Anthony
Johnson Smith, G. (E. Grinstead) Percival, Ian Trew, Peter
Jopling, Michael Peyton, Rt. Hn. John Tugendhat, Christopher
Joseph, Rt. Hn. Sir Keith Pike, Miss Mervyn van Straubenzee, W. R.
Kaberry, Sir Donald Pounder, Rafton Vaughan, Dr. Gerard
Kellett-Bowman, Mrs. Elaine Price, David (Eastleigh) Vickers, Dame Joan
Kershaw, Anthony Proudfoot, Wilfred Waddington, David
Kimball, Marcus Pym, Rt. Hn. Francis Walder, David (Clitheroe)
King, Evelyn (Dorset, S.) Quennell, Miss J M Walker, Rt. Hn. Peter (Worcester)
King. Tom (Bridgwater) Raison, Timothy Wall, Patrick
Kinsey, J. R. Ramsden, Rt. Hn. James Walters, Dennis
Kirk, Peter Rawlinson, Rt. Hn. Sir Peter Ward, Dame Irene
Knight, Mrs. Jill Redmond, Robert Warren, Kenneth
Knox, David Reed, Laurance (Bolton, E.) Wells, John (Maidstone)
Lambton, Lord Rees, Peter (Dover) White, Roger (Gravesend)
Lane, David Rees-Davies, W. R. Wiggin, Jerry
Langford-Holt Sir John Renton, Rt. Hn. Sir David Wilkinson, John
Legge-Bourke, Sir Harry Rhys Williams, Sir Brandon Winterton, Nicholas
Le Marchant, Spencer Ridley, Hn. Nicholas Wolrige-Gordon, Patrick
Lewis, Kenneth (Rutland) Ridsdale, Julian Wood, Rt. Hn. Richard
Lloyd, lan (P'tsm'th, Langstone) Roberts, Michael (Cardiff, N.) Woodhouse, Hn. Christopher
Longden, Sir Gilbert Roberts, Wyn (Conway) Woodnutt, Mark
Loveridge, John Rodgers, Sir John (Sevenoaks) Worsley, Marcus
Loveridge, John Rossi, Hugh (Hornsey) Wylie, Rt. Hn. N. R.
Luce, R. N. Rost, Peter Younger, Hn. George
McAdden, Sir Stephen Royle, Anthony
MacArthur, lan St. John-Stevas, Norman TELLERS FOR THE NOES:
McCrindle, R. A. Scott, Nicholas Mr. Paul Hawkins and
McLaren, Martin Scott-Hopkins, James Mr Oscar Murton
Maclean, Sir Fitzroy

Question accordingly negatived.

Mr. Michael Foot

On a point of order, Mr. Mallalieu. It is very rarely that the Prime Minister has dared to show his face during these debates. We issued invitations to the Prime Minister to come here earlier in our discussions, in particular on the guillotine Motion, but he ran away from that debate, and I presume that it is only by accident that he has dared to come here now. It would have been very strange—[Interruption.] We know that the Prime Minister becomes especially testy and incoherent when anybody—

The Second Deputy Chairman

Order. Would the hon. Gentleman say that he is about to come to a point of order?

Mr. Foot

I am on a point of order, Mr. Mallalieu. I will not be shouted down by a full-hearted Prime Minister who cannot even come here and defend his own position. If the Prime Minister wishes to intervene in my remarks, I am sure he will agree that he should have the courage to stand on his own feet. What I am asking is this: as the majorities in the last two Divisions of six and four—[An HON. MEMBER: "Perfectly adequate."] —proved to the country that here is no true-hearted support for the Bill, would it not be in order to ask this singularly ill-tempered Prime Minister, who dare not state his case properly, to pluck up his courage, stand on his own two feet and say what the intentions of his Government are, as the Bill, even under a Guillotine, has no majority in the Committee?

The Second Deputy Chairman

That is not a point of order.

Mr. Harold Gurden (Birmingham, Selly Oak) rose—

Mr. Foot rose—

The Second Deputy Chairman

Is the hon. Gentleman raising another point of order?

Mr. Foot

I am sure that the Prime Minister will recall—[Interruption.] My point of order is that, as I am sure the Prime Minister will recall, when there were very narrow Divisions on the Resale Prices Bill some years ago the right hon. Gentleman always had the courage to defend his Measure and to declare the Government's intentions. I submit that it is a normal point of order in the House of Commons that when a Government have been subjected to such a humiliating defeat as that to which this Government have been subjected, previous Prime Ministers have had the courage▀×

The Second Deputy Chairman

Order. That is not a point of order.

Mr. Eric S. Heller (Liverpool, Walton)

On a point of order. I apologise for delaying the Committee, and I am sorry that the Prime Minister has left. On an earlier occasion Mr. Speaker had cause to inform me that it was not the practice for hon. Members to make injections from a seated position. Throughout the time that my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) was raising his point of order the Prime Minister sat in his seat bawling and shouting like someone on a street corner. Is there one rule for Prime Ministers, especially Tory Prime Ministers, and another rule for back bench Members on this side of the Committee? May we be assured that in future our proceedings will be conducted in an orderly fashion, whether or not the Prime Minister or anybody else makes statements from a seated position?

Mr. Dennis Skinner (Bolsover)

Further to that point of order. Is it in order for the Prime Minister to make "injections" at any time?

The Second Deputy Chairman

The Chair has not heard a good deal of what has happened in the last few minutes. It is certainly to be deprecated when hon. Members make interjections in the debate from a seated position.

Mr. Swain

Further to the point of order. Is it in order for the Prime Minister to make "injections" from the back or from the front?

Mr. Gurden

On a point of order. Although it is for you, Mr. Mallalieu, to decide points of order, will you make it clear that it is obvious to many of us that hon. Members opposite are raising points of order which they know to be bogus and completely false? Would you, Sir, be kind enough to rule more clearly on what is or is not a point of order?

The Second Deputy Chairman

It would be better if we got on with the business.

Mr. Ronald King Murray (Edinburgh, Leith)

I beg to move Amendment No. 159, in page 2, line 30, leave out 'accordingly' and insert: 'in each part of the United Kingdom in accordance with the law and practice of that part of the United Kingdom'.

The Second Deputy Chairman

It will be convenient also to discuss the following Amendments:

No. 4, page 2, line 26, after first 'and', insert: 'subject to subsection (I A) following'.

No. 252, page 2, line 26, after 'procedures', insert: 'except such remedies or procedures as shall have any effect on the rights of a citizen of the United Kingdom to apply for a writ of habeas corpus or in Scotland for a petition for liberation'.

No. 215, page 2, line 27, after 'Treaties', insert: 'except for any provision creating any criminal offence'.

No. 165, page 2, line 30, after 'accordingly', insert: 'except that no alteration can he made to the provisions of Article XVIII of the Treaty of Union;'.

No. 6, page 2, line 33, at end insert: (IA) Provided that no remedies or precedures mentioned in subsection (1) of this section shall preclude any person from enforcing under this Act in the courts of the United Kingdom and colonies all rights and remedies that he would have had but for any other provision of this Act.

9.30 p.m.

Mr. Murray

Amendment No. 159, the leading Amendment, seeks to ensure that enforceable rights brought within the portmanteau of Clause 2(1) shall be applied in each part of the United Kingdom in accordance with the domestic law and practice of that part of the United Kingdom. Amendment No. 4 is a paving Amendment for Amendment No. 6. Amendment No. 252 seeks to save the remedy of habeas corpus in England, Wales and Northern Ireland and the Scottish counterpart in Scotland.

Amendment No. 215 seeks to exclude from the enforceable Community law package any provision creating a new criminal offence. Amendment No. 165 seeks to save the provisions of Article XVIII of the Treaty of Union between Scotland and England. Amendment No. 6, which is paved by No. 4, seeks to ensure the continuation of the individual's rights according to our law to seek remedies against any authority in our ordinary courts.

Under the shadow of the guillotine, when dealing with this group of Amendments the Committee may seek to pursue only some of the profound implications of Clause 2(1) for our law and constitution. Some of these are less profound than the direct surrender of part of the substantial sovereignty of Parliament with which we have already been concerned while dealing with this subsection, but the matters with which the amendments deal are nevertheless far-reaching in implication.

No. 159, for example, deals with the problem of properly articulating our domestic law to the bundle of rights, powers, liabilities, obligations, remedies and procedures which are mentioned at the outset of subsection (1). These are rights and so on of directly applicable Community law which are applied in this subsection in a wild sweep of blind generalisation which is without precedence in our statute law. The guillotine forestalled us before we could unlock this sinister legal deed box which lurks in the recesses of this infamous package.

For example, we do not know what specifically is meant by any of these terms—what is covered by "rights"; how they differ from "powers"; what is involved in "liabilities"; what are "obligations"; and what are the remedies which there are to be and what procedures we shall use to get them. Not only do we not know what is included under each heading, but one question immediately arises and it is where there is the normal companion of rights to which we are accustomed in this country—duties. What is meant by these terms? The guillotine has come before we could probe to find out.

This is not a matter of moving destructive Amendments. I deprecate the remark of one hon. Member opposite who suggested in the last debate that our Amendments had been destructive. That is quite untrue. There are many constructive Amendments on the Order Paper, not the least of which has been that foreshadowed by the right hon. Member for Wolverhampton, South-West (Mr. Powell) dealing with whether "without further enactment" was a phrase which should be replaced by the phrase "directly applicable" reflecting the words of the treaty. We have not even had from the Government examples of legal procedures, legal rights and legal obligations under these heads. We have not been allowed to go beyond the limited licence which we enjoy, thanks to the Chair, of dealing with regulations —these obscene progeny of Article 189 of the Treaty. We have not been allowed to go beyond them to the fons et origo of Article 189 and the other articles of the Treaty of Rome which introduce themselves as self-enacting, self-executing Community law into this country.

The Solicitor-General

I find it difficult to follow how the hon. and learned Member is speaking in a debate of this kind on this issue apparently on behalf of a party which still accepts the desirability of entry into the Community in principle and is challenging only the terms, and how he can thus refer to regulations which flow from Article 189 of the Treaty of Rome, and have been known for years and years to flow from that Article, known throughout all the applications made by his Government. How can he, with responsibility or sanity, refer to such things, inevitable parts of the application made by his Government, as obscene progeny? Is not that a demonstration of the irresponsibility to which the Opposition have now sunk?

Mr. Murray

I appreciate that the Solicitor-General is not himself tonight, with the narrow majorities the Government are having in Divisions. If he reads what I said he will realise that I am directing my attention entirely and exclusively to the provisions of the Bill and its implications.

I may have used a colourful phrase and perhaps I should withdraw it—[HON. MEMBERS: "Hear, hear."]—but I had in mind the vast volumes which we have not been allowed to touch. With desperate guile and stratagem we have had limited debates on the contents of the regulations, and it was in this sense that I used that phrase. Nevertheless, the point will stand even if the word "obscene" should perhaps appropriately be withdrawn.

Mr. Powell

Was the hon. and learned Gentleman perhaps bearing in mind the fact that the Prime Minister on Second Reading expressly held out the alternative that all this law might be embodied in a different way from the Bill in the law of this country?

Mr. Murray

I am grateful to the right hon. Gentleman for that helpful intervention. Any obscenity that might lie here is in the Bill and the methods the Government have adopted for trying to forge the link between this country and Europe.

We have been precluded from examining in detail the incoherencies and conflicts between domestic and Community law which will certainly be the legitimate progeny of the shotgun marriage being arranged in Clause 2(1). Even if we do not know what they are, perhaps we can discover how they will work. This is surely a modest request to make.

Are these directly enforceable Community rights to arrive in this country fully garbed in the shining armour of the jurisprudence of Brussels, fully armed and ready to do instant, directly applicable legal battle, or will they arrive in civilian clothes as peaceful traders and workers bringing gifts of European good will and ready to use the speech and idiom of our law to translate their trading purposes into a joint enterprise with us?

Are our courts to use their own legal idiom—English, Scottish or Northern Irish—to interpret and complement these legal packages, or are these alien packages to bring translations of their own with them? If there is to be a translation, when will it arrive? When shall we be allowed to see it?

We get no guidance on all these matters from the Bill, though this is a matter with which we can deal when we come to Clause 3. There is minimal guidance to the courts; just that they are to apply European jurisprudence in certain fields, whatever that may mean. We have no guidance from the Bill, none from the Treaty of Accession and very little from the Treaty of Rome. The only mention of guidance in this context is in Article 192, which dealing with decisions of the Council or Commission in imposing enforceable pecuniary obligations, states: Enforcement shall be governed by the rules of civil procedure in force in the State in the territory of which it is carried out. Obviously the word "of" is a mistake. I imagine that the passage is meant to read "in which it is carried out". Here we have an authentic text of the Treaty of Rome. It is not good English and it therefore does not bode well for the idiomatic connection between Community law and the law of England and Scotland.

The civil procedure does not carry one far. Even in civil procedure here we have many differences between the law of England, Scotland and Northern Ireland and there are differences of substantive law. How will European jurisprudence assimilate these? How are we to interpret European concepts for these separate jurisdictions in this country? How, for example, will European jurisprudence start to apprehend the unusual and unique standing of the Scottish legal jurisdiction? Here is a jurisdiction complete in itself, but with no Parliament because Parliament in Westminster deals with Scottish matters equally with matters relating to England and Wales.

I should have thought that the Lord Advocate and his colleagues in the Government would have already come up against substantial difficulties at Brussels in trying to explain to the Europeans, with their clear civil law concepts, how one can have a single Parliament and a single Executive and yet two totally separate judicatures and two totally separate legal jurisdictions.

Mr. William Baxter (West Stirlingshire)

May I draw my hon. and learned Friend's attention to one aspect of this matter? It is not in the Amendment but it is, I think, very important. It is in Article 19 of the Treaty of Union. It lays down specifically certain rights concerning the Judiciary and the laws appertaining to the Kingdom of Scotland and the maintenance of its laws. It seems to me that, reading that in conjunction with the proposed new legal system, the enforcement of certain of these regulations is bound to be difficult, and that they differ from this part of the Act of Union.

Mr. Murray

I am grateful to my hon. Friend for raising that point. I hope to touch for a moment or two on the Treaty of Union and perhaps I may give an answer to him at that point.

Mr. Robert Maclennan (Caithness and Sutherland)

Will my hon. and learned Friend allow me to intervene very briefly? He has made much of the difficulty of interpreting the rules of the Community in our own courts, as I understand it, but would he not agree that within our own domestic legal system it is necessary in the whole field of private international law to interpret and to apply foreign rules of law and that this is a matter which happens regularly and daily in the courts of our country in which he himself has practised?

Mr. Murray

My hon. Friend has certainly raised a point from which I would not dissent. I agree with him that the courts do from time to time at the moment interpret and construe conflicts of national law and that they do it successfully. The point I am getting at and the point which I want to stress is the problem of articulating these alien concepts—domesticating them, if I may put it that way—to our law. That is an entirely different question. It is a question of a unique kind which the courts have never had to face, and they have got no guidance from this Bill. The criticism which I level at the Government is that they get no guidance from the Bill how to do it.

I shall give only one illustration, because under the guillotine one illustration is all that I can make. My complaint is that we have not got the material, that we have not had access to the material, that we have not had opportunity to delve into the possibilities and difficulties of this package. In the time available I can give only one illustration showing how one problem could emerge from Article 189 of the Treaty of Rome. It provides that In order to carry out their task and in accordance with the provisions of this Treaty, the Council and the Commission shall make regulations and issue directives, take decisions, make recommendations or give opinions. Now, it is not without interest to look through some of the vast and continually proliferating mass of regulations which are the progeny of Article 189. It is not without interest to do so, and when one does so, one finds that many of these regulations are attributed to the Commission, many of them are attributed to the Council of Ministers. Here at once I should have thought that a British lawyer, whatever his jurisdiction, is faced with a difficulty of interpretation, and this difficulty arises out of the words used in the opening part of Article 189: In order to carry out their task…the Council and the Commission shall make regulations". I do not think that any lawyer in this Committee would dissent from the view that according to our law there is a distinction between "and" and "or". If these words appeared in a British Statute we should understand that in order to make these regulations the Council and the Commission together had to operate and that they together had to enact these regulations. When one looks through the regulations one sees that we have had no apology or explanation about this from the Government. We have asked them repeated and probing questions, which are still outstanding, on the meaning of Article 189, and what decisions made by the Commission are directly binding upon or applicable to people including legal persons in this jurisdiction.

9.45 p.m.

I press the point. According to our rules of statutory interpretation, which I should have thought would go without challenge in Committee and which a court of this country would apply and follow, where the words of the enactment provide that to carry out their task the Council and the Commission shall make regulations, then neither alone can make regulations.

It may be said in reply that there are provisions in the treaty—for example, in Articles 43, 49, 87 and 94—where a form of words is used which reflects this concept. The formula that is there used is that the Council may, on a proposal from the Commission, make regulations. That could be regarded as an instance in which the Council and the Commission together make regulations.

It seems clear on such perusal of these regulations as I have been able to make —I do not claim to have made an exhaustive perusal—that many of them are attributed to the Commission on its own and others are attributed to the Council of Ministers on its own.

I use that illustration not to bash the treaties but to illustrate a genuine point of difficulty which will be faced by our courts: namely, how to construe directly enforceable legislation from the Community if they are given no guidance by the Bill and if it is in conflict with our own rules of statutory interpretation?

Mr. Deakins

Is there not another possible conflict of interpretation? Article 189 provides that regulations shall be directly enforceable in all member States. It is a matter of fact that some of the 1,200 regulations are not directly applicable in all member States because they allow derogations to particular countries and areas. Could not the validity of the regulations, even under Article 189, be challenged in our courts and be a source of inconvenience and embarrassment?

Mr. Murray

My hon. Friend has raised an important point. I do not want to follow it as I cannot give an answer off the cuff.

As the debate is in some sense the swan song of British sovereignty because the guillotine decapitates our further discussion on Clause 2(1), may I make some remarks about the Treaty of Union which is the subject of Amendment No. 165 standing in the name of some of my hon. Friends? I have resisted the temptation offered to me by earlier invitations to comment on this provision. Without particularly committing the Opposition to support Amendment No. 165, perhaps I might indicate the ambit of the Article. It raises some points of some quite general and significant importance going far beyond the limited safeguard which is written into the Treaty for the benefit of the people of Scotland. Article 18 falls into three parts. The first provides: That the laws concerning regulation of trade customs and such excises…be the same in Scotland from and after the union as in England". That assimilated the trade and customs laws of the two countries. It is significant that it did not do it by self-enacting superior law, but by means of the statutory law of this country which continues in many cases to be enacted separately for the two countries. Sometimes it is done by a British Act. At other times it is done by a Scottish Act with a separate Act for England and Wales.

The second part of Article 18 of the Treaty of Union provides: that all other laws"— other than those creating the British Common Market— in use within the kingdom of Scotland do after the union and notwithstanding thereof remain in the same force as before…but alterable by the Parliament of Great Britain". That has resulted in a situation which we still have today: that in some sense the Kingdom of Scotland and its counterpart, the Kingdom of England, still subsist because the public law of the two countries has not been wholly assimilated. It depends on legislation by the Parliament of Great Britain whether alterations or assimilation may be made.

I do not want to come down on one side or the other, but there is no doubt that if one says in an Article of constitutional importance, of constitutional safeguard, specifically that public law is alterable by the Parliament of Great Britain and in no other way, this seems repugnant to the suggestion that public law could be altered by Brussels, which plainly is not the Parliament of Great Britain. That is one side of the question.

The other side of the question—no doubt the side which would attract the Government more—is the concept which has repeatedly been put forward from the Treasury Bench: that the formal legal sovereignty of Parliament is not sacrificed and, therefore, all that is done in the Community, with the various links which are being forged through the Bill, is done in the name of the Parliament of Great Britain.

Whether that is a satisfactory answer or not, the fact remains that this type of difficulty is not unique to this country. Similar difficulties of repugnancy between constitutional guarantees and the directly applicable law of the Community have arisen, for example, in the Netherlands, which changed its constitution to avoid such repugnancy on entering the Community, and in Luxembourg which adopted the same course.

The same difficulty arose with Article 24 of the Bonn Constitution, the Constitution of West Germany. That particular repugnance is still unresolved because, under Article 24 of the Bonn Constitution, basic rights are written into the basic law. There can be no executive authority in West Germany except under the limitations of the basic law. On the face of it, that is repugnant to the concept that the executive at Brussels can have direct rights and authority in Germany not limited by the basic law. If the basic law is a limitation upon the authority and executive power of Brussels, that is inconsistent with the directly enforceable, directly applicable, self-executing provisions of the Treaty of Rome.

Mr. Ian MacArthur (Perth and East Perthshire)

I have been following the point made by the hon. and learned Gentleman. I hope that he is not tacitly or indirectly giving support to any argument that the Bill is contrary to the Act of Union with Scotland? It certainly is not in terms of Article 18 of the Act of Union. That Article clearly sets out that law can be alterable by the Parliament of Great Britain. It further states that alterations in laws which concern private rights may be changed by the Parliament of Great Britain where that change is for the evident utility of the subjects within Scotland. No doubt the hon. and learned Gentleman will accept that many hon. Members on this side and I suggest on the other side of the Committee believe that this change in the law is for the evident utility of the people of Scotland.

Mr. Murray

With respect, the hon. Gentleman did not pick up what I was saying. I was endeavouring to draw attention to the fact that the constitutional guarantee of Article 18 of the Treaty of Union does not stand on its own. It can be paralleled by corresponding difficulties which have been overcome in the Netherlands and Luxembourg, but not in West Germany. I do not say that it is a catastrophic state of affairs, but simply point to the paradox. We have here an opportunity to resolve such paradox but it is an opportunity which so far the Government decline—

Mr. Dick Douglas (Clackmannan and East Stirlingshire)

Can my hon. and learned Friend tell me how we, on this side, when we were the Government and anxious to enter the Community, given acceptable terms, would have resolved the conflict he hypothetically raises, given that we do not have a written constitution?

Mr. Murray

My hon. Friend is entitled to an answer, and my answer is to refer him to the White Paper published by the Labour Government in 1967 on the legal and constitutional effects of entry. He will find there a very detailed and careful examination of the problems. It does not deal specifically with this problem, but foreshadows the sort of careful legislative process which the Labour Government had in mind. That White Paper has been mentioned from both sides of the Committee, and it is a matter of regret that we have not had occasion on which more time could have been spent on that very valuable White Paper.

The Lord Advocate

The hon. and learned Gentleman must be aware, although he was not here at that time, that the Secretary of State for Scotland in the last Administration made it perfectly clear on more than one occasion, in response to questions put by the then Opposition, that in his view, and on the advice of the Scottish Law Officers, there was no conflict between an Act of Accession and the Treaty of Union.

Mr. Murray

That is an expression of opinion, and the right hon. and learned Lord Advocate would put it no further. All I say is that the facts and documents speak for themselves. We are, after all, joining a Community wider than just these islands. This is not a unique problem, but a problem which has been faced and resolved by the Netherlands and by Luxembourg, which still remains unresolved by West Germany, and which will have to be faced and resolved by at least one candidate country, Eire, which may be required to change its constitution. One opinion has been expressed, I am not taking a view on either side, but it is right that both views should be expressed, understood and entertained. They are there, and we must take our choice.

The third aspect of Article 18 is reflected in Amendment No. 165. Having dealt with public law and said that that can be made the same by the Parliament of Great Britain, the Article goes on: …with this difference betwixt the laws concerning publick right/policy and civil government and those which concern private right [that the laws which concern publick right]…may be made the same throughout the whole United Kingdom But that no alteration be made in laws which concern private right except for evident utility of the subjects within Scotland. That statement clearly guarantees that the domestic law of Scotland will not be altered for any other purpose except the evident utility of the subjects within Scotland. Time prevents me from following this line of thought as far as I would wish, but there can be no doubt that many provisions of the Articles of the Treaty—for instance, Articles 85 and 86, which deal with competition—are bound to encroach on matters such as freedom of contract which would in 1707 have been—and, would be, indeed, today—regarded as matters of private rather than of public law.

Therefore, there again appears to he a repugnance between the provisions of the Treaty of Rome and the provisions of that earlier common market treaty, the Treaty of Union of 1707. We may agree, I hope, that two Common Markets are set up under these two Treaties and there is no particular reason, on the face of it, why one should have superiority over the other.

It may well be that the Lord Advocate will tell us that nothing in the provision need be encroached upon by the Treaty of Rome. He would be wrong to say that, but I hope that the Government will at least undertake to give anxious attention to this guarantee and not write it off, as they have written off so many of the forms and procedures of this Parliament by virtue of the Bill. I hope at least they will agree that it is a living guarantee to the people of Scotland and that they will honour it as well as they can if and when this country enters the Community.

10.0 p.m.

In their handling of this guillotined Bill the Government stand convicted of attempting to bundle Parliament into the Community without ceremony, blindfold, bound and gagged. That is incontrovertible as the debate on the guillotine Motion yesterday made clear. Not only have they shown a fatal constitutional insensitivity in framing the Bill—it may indeed be better to put it more bluntly and say that what they have done is a fraud upon the British constitution—they have abandoned without apparently any pang of conscience part of the substantial sovereignty of Parliament. The substance of that sovereignty is that it is the sole and ultimate safeguard of the constitutional liberties of the British people. The Government have thrown out the substance and have not even bothered to conserve the forms—which might have been thought to be dear to Conservative hearts.

The Government have resisted every constructive Amendment. I appeal to them to accept the modest Amendment No. 159. At worst, the Government might say that it is unnecessary, but if they reject it we shall want to know why. Perhaps they will reject it through fear, as fear must have prevented them from considering any of the constructive Amendments. Perhaps they are afraid that their chosen European vessel is so unseaworthy that any shifting of the cargo may capsize it.

[Sir ROBERT GRANT-FERRIS in the Chair]

Mr. Powell

We shall be obliged in less than an hour to take our final leave of Clause 2(1), a provision entirely novel and unique in the law of this country. I wish briefly to record that we are doing so in circumstances wholly unsatisfactory, because no sufficient justification for it has been offered to the Committee in the course of these proceedings.

The ground upon which we are asked to agree to the subsection is that it is alleged to be imperatively required by the Treaty of Rome, and in particular by Article 189 of the Treaty of Rome. Yet upon that assertion there is open disagreement amongst the members of the Government. It is not disputed—it is repeatedly on the record—that both the Prime Minister and my right hon. and learned Friend the Chancellor of the Duchy of Lancaster—presumably, the two people who should know best what is or is not required under the Treaty—have openly stated that there are alternative ways, not—at least formally—inconsistent with our methods of legislation, by which effect could be given to Article 189.

My right hon. and learned Friend the Chancellor of the Duchy conceded this when he said that Clause 2(1) was the best way of giving effect to it, and he repeated that several times: that he did so was admitted by my hon. and learned Friend the Solicitor-General. My right hon. Friend the Prime Minister, in a long passage in winding up on the Second Reading of the Bill, discussed an alternative to Clause 2(1), perfectly explicitly. Therefore there is disagreement On the Treasury Bench as to whether we are or are not obliged to do this.

The more time we have to consider, in the light of Clause 2(1), the articles of the treaty which are said to be involved, the more doubt arises. The hon. and learned Member for Edinburgh, Leith (Mr. Ronald King Murray) has drawn attention to some of the unsatisfactory aspects of the drafting of these articles from the point of view of the methods of interpretation to which we are used. I direct attention to one which is directly significant for the major point at issue. Article 191 says: Directives and decisions shall be notified to those to whom they are addressed "— and then follow the words— and shall take effect upon such notification. Now, it is admitted that directives are to be implemented by the national Parliaments. That is what Clause 2(2) of the Bill does. Therefore it follows that a directive cannot take effect in the law of this country unless and until the procedure laid down in Clause 2(2) has been gone through to give effect to the directive. Yet the treaty says that directives…shall take effect upon notification…to those to whom they are addressed. There is no doubt what the treaty is stating: when a directive is addressed to a member State, then, according to the wording of the treaty, it "takes effect upon notification", whereas the Bill says that directives are to be given effect in the law of this country by the procedure under Clause 2(2). It may be that the regulations, etcetera, will be retrospective as to the date of operation of their requirements. But clearly this treaty speaks of Community law "taking effect" in circumstances in which the Bill says that it is only to do so by way of legislation in this country.

It seems to me that we are bound to take that into account in construing the expression in regard to regulations: A regulation shall be binding in its entirety and directly applicable in all member States. Upon those words alone, occurring in this, to us, so loosely drafted part of the Treaty of Rome, is based, by one of the two divided counsels of the Government, the sole case for the constitutionally unique innovation in Clause 2(1). Therefore there is no sufficient reason as yet before the Committee why we should assent to Clause 2(1). Let that be on the record before we are forced to assent to it unwillingly, without even the possibility of a Division on the Question, That subsection (1) stand part of the Bill.

I shall take the time of the Committee only for a few moments more to refer to the Act of Union with Scotland, for I submit that an English Member has a good a right to do so as a Scottish Member, since presumably the honour of England is at least equally involved with the traditions and the rights of Scotland.

It seems to me that in two respects at least this unnecessary Clause 2(1) breaches that Treaty. I cannot believe that, upon any reasonable interpretation, an alteration in the law of Scotland effected by directly applicable Community law under the provisions of Clause 2(1) can be regarded as made "by the Parliament of Great Britain", in the sense in which that was meant by those who passed that Act and signed that Treaty.

There is a simple test. Let us suppose that in 1707 those who made the treaty, the Commissioners, had been asked whether they meant to include the making of law by the European Commission in Brussels through regulations which would be self-enacting in the United Kingdom. That is the question which is before the Committee. Let us suppose that they had been asked "Is that what you mean by enactment ' by the Parliament of Great Britain? ' "Of course they would have rejected any such proposition as ludicrous. Therefore, if we allow this to happen, we are knowingly breaking both the letter and certainly the spirit of an Act of Parliament which enshrined a freely made treaty.

The second breach—and here I come to the point that was taken by my hon. Friend the Member for Perth and East Perthshire (Mr. MacArthur)—is the alteration of the laws in Scotland which "concern private right". The treaty and the Act lay down that that can be done only "for the evident utility of the subjects within Scotland". My hon. Friend, in all good faith, said that, as he sincerely and conscientiously believes that the Community regulations will be beneficial to the inhabitants of Scotland amongst others, therefore subsection (1) is not in breach of the treaty.

I ask my hon. Friend, and I ask the Committee, to look at that provision of the Act in its context. In its context it is perfectly clear that the expression "the evident utility of the subjects within Scotland" is opposed to "the United Kingdom of Great Britain as a whole". That is the only sense which those words have in the context. It does not say For the evident utility of the subjects ". After all, those making the treaty and passing the Act were not so silly as to say that laws shall not be made which are not for the evident utility of the subjects to whom they are to apply. They were not wasting words. They meant, and clearly meant, by that provision something by which the people in Scotland especially would benefit, and in a way separate from the inhabitants of the rest of the United Kingdom, not to mention from the rest of the inhabitants of the EEC.

It was in short—and this is the logic of it—only for the sake of the people of Scotland that their enjoyment of the law of private right which they had in 1707 was to be altered. Therefore, unless a regulation which is self-enacting under subsection (1) is specifically and specially beneficial to Scotland in its alteration of private law, I claim that it, too, is a breach of the treaty and is, in effect, a repeal of the Act.

That brings me to my last point, because we are here dealing with an Act of Parliament which implements a treaty—with precisely such a Bill as we have before us, a Bill as to which we have been solemnly told, both from the Chair and from the Front Bench, that we may do nothing in it which interferes with the treaty.

My right hon. Friend and the Government are trapped by their own reasoning. The Act of Union which gave effect in the law of Great Britain to a Treaty is sacrosanct in the same way as it is claimed that an Act of Parliament, when it is passed to give effect to this treaty, is sacrosanct. We ought, therefore, to realise that by subsection (1) not only are we doing something which is unparelleled in our legislative history, something which it is not necessary for us to do in order to carry out the treaty, but that we are doing it in such a way that we unnecessarily breach the solemn compact upon which this United Kingdom itself is founded.

10.15 p.m.

Mr. James Sillars (South Ayrshire)

I want to refer briefly to Amendment No. 165 and then to deal at some length with Amendment No. 159. I am concerned with a technical point on a question of law, and here I must confess to being only a layman. Therefore, my questions to the Lord Advocate will be on the basis of a simpleton's approach to the law contained within Article 18 of the treaty.

When I look at the time and appreciate that the guillotine will fall at eleven o'clock, it seems that what should be a major constitutional debate has been reduced to the status—I do not mean this in a derogatory way—of an Adjournment debate. We may at eleven o'clock be forced to ask in a polite way whether the Lord Advocate will answer our questions by writing to us—the traditional way in which Ministers deal with problems which they cannot cover in the 10 minutes allocated to them in an Adjournment debate.

Is it true that some of the laws that we shall have to accept affect what Article 18 describes as "private right"? How many of the laws that we shall have to accept will affect it, and what are the qualitative changes to be effected in Scots law by the importation of certain Community laws? This needs to be answered in some detail. Again on a simpleton's approach, I find that the wording of Article 18 leaves no room for doubt about the legal position. One important condition has to be satisfied if changes are to be made in Scots law as it affects private right without breaching the obligations of the treaty, and that important condition is that a change in private right law must be conclusively proved to be for the evident utility of the subjects within Scotland.

I read "evident utility" to mean the obvious utility of the people in Scotland. It seems that each change must be examined on its merits and that the changes cannot be taken as a whole. I address this remark particularly to the hon. Member for Perth and East Perthshire (Mr. MacArthur), because we are talking about not the law but several laws as they apply in this sector of the application of general law. A decision to impose a new law on any sector within the Scots context of private right must be consciously made in each specific case by the British Parliament. If this is not done there is a clear breach of the obligations placed upon this Parliament under Article 18 of the Treaty of Union.

It is true that this country has only certain moral obligations to countries such as New Zealand and Australia and the sugar-producing areas but it has definite constitutional and legal obligations to the people within Scotland through Article 18, and the Lord Advocate should give us detailed replies to our questions.

I turn now to deal with the opportunity presented by Amendment No. 159 to have a general discussion on the problems facing Scotland and the future of Scotland's relations with the rest of the United Kingdom. It is a tragedy that we have to do this within a period of 45 minutes. The time may come when people in all quarters of the Committee, especially those who voted for the guillotine, will very much regret that we did not take time to examine what will be, whether it takes 10 or 15 years to manifest itself, an acute problem for all the people of the United Kingdom.

I am reminded of a speech in the early stages of this Parliament by my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot), who warned the Government that the course of their policies would have serious effects on the constitutional unity of the United Kingdom insofar as the people of Scotland and Wales reacted to them. It is helpful to recall how the United Kingdom came into being. England sought unity for political and military reasons; then, as now, somewhat concerned about France. Scotland sought unity in the Union for economic and trading reasons. It would he wonderful to be able to say, looking back after 265 years, that the Union was formed because of great feelings of brotherly love and feelings about human brotherhood affecting all men. But it would be false to say that because that was not so.

In a very recently published book by Charles Hendry Dand, "The Mighty Affair—how Scotland lost her Parliament", the author is very sympathetic to the whole question of Union in the first place. Chapter 11 is headed "A Successful Experiment". But he says: The men who united the kingdoms and the parliaments have remained unhonoured and unsung&The explanation is obvious from the story here told. The circumstances of the birth of the United Kingdom were shabby. That could be said about the circumstances of the birth of the enlarged Community as well. Louis XIV forced the wedding and the couple had no joy in each other or in the child. That is an objective comment from someone sympathetic to the Union.

I notice the laughter—it could properly be described as derisive laughter—by my hon. Friend the Member for East Stirling-shire (Mr. Douglas). But I have to say to him that in all the books written about the Union of the United Kingdom, no one has ever suggested that it was not done for the reasons I have just outlined, or those described by Charles Hendry Dand in his book.

We were drawn together because of geography and political need and the need for England to safeguard her military back, and for the Scots to extricate themselves from an economic dilemma. As I look around the Chamber, I notice a few wry smiles, but I hope to wipe them away as I proceed with my argument.

All the factors combined to join us reluctantly together. Ever since 1707 there has been an unease deep in Scottish bones about the Union. It should be recorded that the decision about union was taken not by my ancestors but by the forebears of the present Conservatives in Scotland. Indeed, the mob—that was my people they were talking about; they were referred to as "the mob"—was vehemently opposed to the Union. There was an attempt at repeal in 1713, which failed. But it did not extinguish the desire among all Scotsmen for a distinct Scottish expression. It has never been submerged at any time.

An Hon. Member

It never will be.

Mr. Sillars

It lay dormant for a long time and then began to manifest itself. In 1885 a Scottish Secretary was appointed, that post being converted to Secretary of State in 1926. In 1886 the Scottish Home Rule Association was formed. A Scottish Nationalist Party, or Scottish National Party, whatever it called itself, was formed in 1928. The Scottish Office was moved progressively to Edinburgh between 1928 and 1939. A Scottish Grand Committee was established. A Scottish Convention arose in 1947.

Then we went through the latest period of this feeling of unease, in the Winnie Ewing period during the Hamilton by-election and the immediate situation thereafter, which so drove the Prime Minister to panic that he made a promise at Perth from which his hon. Friends in the Scottish Tory Party have been trying to retreat ever since. I shall not suggest that the latest phase that we have seen, the post-Hamilton period, has passed. I am well aware that we are speaking within 24 hours of one of the most wonderful municipal election victories ever scored by the Labour Party in Scotland, and after witnessing the annihilation of the Scottish National Party—no friends of mine, I may say.

But we should make a grave mistake if we thought that the annihilation of the Scottish National Party meant the elimination of nationalism as a significant force in Scotland. The SNP relies entirely on nationalism for its existence, but nationalism does not rely upon the SNP for its existence. We should mislead ourselves if we thought that we had seen an end to the problems which beset us in the period 1968–72.

The demise of the Nationalists can be traced to several factors. One was that they made a fundamental error in trying to convert a mass movement based on one large concept into a political party in pursuit of political power. They fell prey to the ambition to which most politicians fall prey, seeking the levers of powers. That brought them down into municipal politics, and, with the best will in the world, one cannot relate nationalism to sewers and drainage and make it meaningful to ordinary people.

Lack of calibre, misjudgment and an inability to understand the nature of politics led the Nationalists astray, and finally led them to effective annihilation last night in the municipal elections.

But what concerns me is that, in my view—it is only my view—nationalism in Scotland—with a small "n"—is a much more mature and potent force today than ever it was in 1968. Then, I believe, the bubble was fairly easy to burst, although some of my hon. Friends did not think so at that time.

In the hysterical period of "Nationalism" I once had to make a speech at the Scottish Labour Party Conference, the only speech I have ever made at the Scottish Labour Party Conference—though whether that is lucky or unlucky, and for whom, I do not know. I described the situation facing Scotland at that time as one in which we had to make a decision about whether the bonds which unite us to the rest of the United Kingdom are more significant than the things which divide us from the rest of the United Kingdom.

Within that phrase there is clear recognition of the difference between the Scots and the other peoples in the United Kingdom. There is no shame in saying that. Englishmen are proud of English things and of the English way of life. Welshmen feel the same about their homeland, and quite right, too. Scots feel the same. In parenthesis, I should say that I do not regret that we have had the Union. We have had a mixture of Scotsmen, Welshmen and Englishmen in the Labour movement. I have always thought that it would have been a great tragedy if the wonderful genius of Aneurin Bevan had been locked up, as it were, in a tiny separate Wales, and we had never had the benefit of his views and his philosophy in the mainstream of the British Socialist movement.

Mr. Jeremy Thorpe (Devon, North)

What about Willie Ross?

Mr. Sillars

I can tell the right hon. Gentleman—

Mr. Arthur Lewis

Just popped in.

Mr. Sillars

—who has just come in; this is the first time I have seen him here today—that my right hon. Friend the Member for Kilmarnock (Mr. Ross) is held in the highest esteem in every part of Scotland, and the Liberal Party is held in total odium for its support of the Government and their retention in power.

I have been sidetracked rather easily, and I am trying to be serious about a serious subject. I was about to say that the decision on the bonds which unite us and the things which divide us is one which we have constantly to make in changing circumstances. There is no evading that problem.

10.30 p.m.

One of the changing circumstances that we must take into account is the immense feeling now abroad in Scotland about Scottish nationhood. Many people may regret this, and I know that some do. But people will ignore it at their political peril. In the changing circumstances of today and tomorrow it will become much more difficult than it has ever been to hold the Union together. When Great Britain had an empire it was easy to divert national consciousness. After all, we were taking part in the conquering and management of an empire. I recall how difficult it was when I joined the Labour Party at the very end of the empire period, and was doing political canvassing, to get ordinary people on the doorstep to talk about domestic issues, such as pensions, poverty and housing. They wanted to talk about Archbishop Makarios and Cyprus and Malaysia or other foreign affairs. There has been a complete transformation of the situation, and there is now a tremendous concentration on domestic issues. The whole of Britain has turned in upon itself for an intense internal examination. That creates problems for us.

Another problem which cannot be evaded is that Scotland has in the past expressed, and will most certainly express in the future, a very distinct left-wing pro-Labour point of view. It will keep voting Labour. Let us think for a moment about what happens when a minority group in a large group continues to express a distinctive political point of view time after time and finds itself in the power of a minority Government. That is the position we are in now. Scotsmen can express as many political points of view as they like, but neither the hon. Member for Ayr (Mr. Younger) nor the Secretary of State for Scotland will pay any attention to them. They will continue as though they had a mandate to rule in Scotland. That creates distinct problems, and anyone who evades them is a fool.

I think the situation can be contained. It is one that calls for great delicacy, tact. understanding and ability to compromise with people within a large Union. This understanding and tact are not the qualities of the present Prime Minister. We are likely to see the intensification of the tensions now existing between Scotland and the rest of the United Kingdom. They will increase when we are taken into the Common Market against the wishes of the majority of the Scottish people. It is wrong to think that we shall come through this trauma of being dragged into Europe with things remaining exactly as they were before in a constitutional sense. We are living in a time when there is an explosion of expectation among ordinary people, a desire for job opportunity, a better standard of life. We are living in a period of diminishing opportunity, with unemployment rising, technology advancing and job opportunities diminishing rapidly.

Previously when we had high unemployment in Scotland there was a safety valve in emigration to England, Australia, Canada or New Zealand. One by one those safety valves are being not closed but turned down. When Birmingham has high unemployment, there are no jobs for Scotsmen to come to. As Australia, New Zealand and Canada experience employment problems, the avenues of escape for the Scottish unemployed are cut off. The "right to work" slogan born in the yards of the Upper Clyde Shipbuilders reflects the desperation felt by many Scottish working people north of the border. It is a period of great stress during which many people will have to make a fundamental reassessment of the position.

The Treaty of Union was made from the Scottish point of view, for economic reasons. The reason why we are here at Westminster is that this is where the major economic decisions are taken on the English economy which ultimately affects the Scottish economy, and the crafty Scotsman says to himself "If that is where the decisions are to be taken, that is where we shall locate ourselves." That is why we have a Secretary of State in the Cabinet. There is logic about the arguments concerning representation in the Cabinet. But if the European Communities pursue the Werner plan for economic and monetary union, the logic which brings us to Westminster may take us to Brussels, because certain Scottish interests which would be termed regional interests in the context of the United Kingdom would be converted to distinct national interests if Scotland were represented in Brussels.

Paragraph 29 of the White Paper, "The United Kingdom and the European Communities ", says: On a question where a government considers that vital national interests are involved, it is established that the decision should be unanimous". If we think about the implications of that and of a shift of the decision-making centre from Westminster to Brussels, we realise that there is some validity in the argument about some direct representation from the northern part of Britain. It may be to our distinct advantage. It is for the Government to prove that it is not.

I am well aware that some of the things I am saying could put a Nationalist tab right between my shoulder blades. This is not the easiest speech for me to make, and whether the Scottish National Party or anyone else pats me on the back is neither here nor there to me. I have certain responsibilities for Scottish people in the constituency which I represent, and, irrespective of my prejudices or attitudes in the past, if I have to fulfil my responsibilities by advocating a certain course of action I shall not hesitate for one moment in advocating it.

We speak about what unemployment does to people, and how it erodes their personality. We have all paid lip service to that. But what does it do to a nation to be permanently saddled with 150,000 unemployed with little prospect of full employment for them? Scottish people are sick to the teeth of being told that if unemployment can be reduced to 3.5 per cent. they should dance with glee in the streets of Glasgow. Those days are gone. We demand full employment, and if we can achieve full employment only by certain courses of action we have no alternative but to take them. As I have said, this is not the easiest speech that I have made or will ever make. Jimmy Gordon of Scottish Television has dubbed me "the hammer of the Scottish 'Nats'." It will be extremely surprising to someone who has given me that title to read what I have said this evening.

I wish to address my last remarks to hon. Members on this side of the Committee. Some of the difficulties I have tried to identify will not arise tomorrow morning, next week, next month or next year. They will arise when the next General Election is held. If the Conservative Party wins the next General Election, and if Scotland goes even more solidly Labour than before, we shall have a constitutional problem.

Mr. MacArthur

No.

Mr. Sillars

It is no good the hon. Gentleman saying "No". Four losses for the Tories in Perth last night should make even him feel shaky. If the Tories win the next General Election in Britain, having lost it in Scotland, there will be problems for all of us to face.

If the Labour Party wins the next General Election, as I think it will—[Laughter.] The laughter shows that hon. Members opposite think that there is a division within the Parliamentary Labour Party and that it is so significant that the people will not feel able to vote for the Labour Party when the General Election comes. They pay more attention—

Mr. W. Baxter

On a point of order, Sir Robert. While I appreciate that my hon. Friend's speech is interesting, a guillotine is in operation and it is only right that there should be some curtailment of speeches so that other hon. Members have a chance to express their view.

The Chairman

I sometimes wish that the Chair had that power, but, unfortunately, it has not.

Mr. Sillars

There is one thing that you must admit, Sir Robert, and the Whips of the Labour Party will confirm it. It is that during consideration of the Industrial Relations Act and on other occasions I have co-operated completely when the Chair has suggested speeches of five or seven minutes when guillotines have been operating or when voluntary timetables have been observed. But this is a debate on the Floor of the House of Commons, and I feel deeply enough about the subject which I have been discussing to speak at greater length than is my custom. I must apologise to my hon. Friends who are desperate to get into the debate, for I have encroached on their time. But they should remember that if an hon. Member opposite were to start speaking now, he would continue until 11 o'clock. [Interruption.] I shall finish what I intended to say no matter what the interruptions.

Hon. Members opposite believe that what motivates the leader writers of The Guardian and The Times are the divisions in the Parliamentary Labour Party, as a result of which, they believe, the party will not win the next General Election. But that is not the issue on which the people will decide. The issues on which the next General Election will be decided are a million unemployed, rents going up to a totally unacceptable level, prices increasing and trade unionists being held down, and on those issues the Government will be found guilty.

But the difficulty will arise immediately afterwards, because the Labour Party will have to deliver the goods north of the border next time. There can be no second chance after the next General Election. If we do not deliver the goods north of the border, the people of Scotland will not turn to the Tory Party and I do not think that they will turn to the Scottish Nationalist Party as we know it. But they may turn to some other form of political expression which is repugnant to every quarter of the House. With those words, on an indeterminate note, I end my remarks.

The Lord Advocate

I am sorry that I have had to get up at this stage, for I know that some hon. Members opposite wish to speak.

Mr. Alex Eadie (Midlothian)

There is no need to speak.

The Lord Advocate

I am genuinely sorry that I have had to get up now when other hon. Members wish to speak. However, there is a series of Amendment calling for a Government reply.

Mr. Eadie

On a point of order, Sir Robert. The right hon. and learned Gentleman has no need to get up and apologise to the Committee in this fashion.

The Chairman

Order. That is not a point of order and the hon. Member knows that it is not. I must ask him not to raise such matters as points of order.

Mr. Eadie

May I put the point, Sir Robert, because I think that it is a point of order? It is that the right hon. and learned Gentleman has come to the Treasury Bench to apologise when he should be apologising to the Committee not for rising when there is a guillotine on the debate, but—

The Chairman

Order. That is not a point of order. It is exactly the point that the hon. Member was putting before. It is not a point of order and he knows perfectly well that it is not.

10.45 p.m.

The Lord Advocate

This group of Amendments calls for a Government answer and I confess that I should have liked an opportunity to hear what several other hon. Gentlemen opposite, including the hon. Member for Midlothian (Mr. Eadie) had to say.

Mr. Arthur Lewis

That is a lie.

The Lord Advocate

I ignore the intemperate remarks from a seated position of the hon. Member for West Ham, North (Mr. Arthur Lewis).

The Chairman

Order. I thought I heard the hon. Gentleman say that what the Lord Advocate had said was a lie. If so, I must ask him to withdraw the remark.

Mr. Arthur Lewis

The right hon. and learned Gentleman said he would have liked time to hear and reply to further speeches. He would have had that time if he had not voted for the guillotine, so that that was a lie; but if you wish me to withdraw it, I willingly do so.

The Chairman

It is not in order for one hon. Member to accuse another of telling lies, and that is why I hoped the hon. Gentleman would withdraw it.

Mr. Arthur Lewis

Perhaps you did not hear me, Sir Robert. I said that the right hon. and learned Gentleman have had ample time if he had not voted for the guillotine. I went on to say that although, therefore, it was a lie to say that the Lord Advocate could not have sufficient time, I would, at your request, withdraw my use of the word.

Mr. Tom Driberg (Barking)

On a point of order. My hon. Friend need not have withdrawn. There are ample precedents of the upper Chair allowing the use of the word "lie", but not of the word "liar".

The Chairman

It depends on how the Chair interprets the use of the word at the time, and hon. Members have always given the Chair the right to decide whether or not a borderline case is such that there should be a withdrawal. The hon. Member for West Ham, North (Mr. Arthur Lewis) has courteously, as is his custom always, withdrawn, and I hope that the Lord Advocate may now continue.

The Lord Advocate

I did not take the hon. Gentleman's observation personally.

The reason why I am sorry that I have had to interrupt the debate at this stage is that several hon. Members still wish to contribute. If the hon. Member for South Ayrshire (Mr. Sillars) had spoken at a little less length, it might have been possible for others to have taken part.

This is a significant group of Amendments and, speaking for myself, I am grateful that they were tabled—

Sir Elwyn Jones

But not debated.

The Lord Advocate

—and debated, because it enables a Government spokesman to comment on them.

Sir Elwyn Jones

Really!

The Lord Advocate

The right hon. and learned Gentleman has not been here for much of the debate on these essentially Scottish Amendments. They have been fully debated.

Sir Elwyn Jones rose

The Lord Advocate

I have very little time in which to reply. I will not give way.

Hon. Members

Give way.

Sir Elwyn Jones

The right hon. and learned Gentelman knows perfectly well that we have not had an adequate debate of many of the Amendments in this group. It is a disgrace that important matters of this kind should be debated in this way.

The Lord Advocate

We have had an interesting debate, but I confess that it has not taken quite the course I had anticipated. As I read the Amendments I felt the genuine concern that exists—this is particularly true of Amendments Nos. 252 and 159—over our accession to the EEC from the point of view of the application of Community law to our traditional forms and processes and to the rights and privileges which the British people enjoy. The main question has been: are they liable to be prejudiced? In so far as this sort of concern lies behind the Amendments, I welcome this opportunity to dispel it.

During the earlier discussion on the EEC most hon. Members received, as I did, many letters from their constituents expressing real concern that the presumption of innocence and matters of fundamental importance to the ordinary British citizen might be prejudiced by British accession to the EEC, and Amendment No. 252, although it has not been spoken to—

Mr. Arthur Lewis

How could it be?

Sir Elwyn Jones

There was not time.

The Lord Advocate

There was quite a lot of time to deal with it if hon. Members had confined themselves more strictly to the Amendments to which they were speaking. [Interruption.]

Be that as it may, there never has been any doubt in the mind of successive Administrations who have been concerned with the application to enter the EEC that those basic liberties, and particularly those relating to the criminal law and the administration of justice, would not be prejudiced in any material sense. This was stated in this Government's White Paper, Cmnd. 4715, last year where it said—and I want to emphasise this— All the essential features of our law will remain, including the safeguards for individual freedom such as trial by jury and habeas corpus and the principle that a man is innocent until proved guilty… That, of course, echoed the expression of view in the previous Administration's White Paper of 1967, where it said: There is no reason to think that the impact of Community law would weaken or destroy any of the basic rights and liberties of individuals under the law of the United Kingdom. This is important. One cannot now go into instances in which basic constitu- tional principles of this kind might be prejudiced, but it is important that this should be put on record, and, if I may, I would repeat what the Leader of the Opposition said on this matter on 8th May, 1967. I know that parts of that passage have been quoted before, and I was going to omit those quoted before. Part of that passage connected with the effect on our law of our entry into the European Economic Community was: The constitutional rights and liberties of the individual such as habeas corpus and the presumption of innocence will, of course, not be affected, nor in any material sense will our criminal law."—[OFFICIAL REPORT, 8th May, 1967, Vol. 746, c. 1088.] That is the view which this Administration take, the view which the previous Administration took, and the reason for it is, of course, that the field of law with which the European Economic Community is concerned does not impinge upon the criminal law to any material extent. The Community has never sought to create criminal offences by directly applicable Community provisions, and it is exceedingly doubtful, in my view. whether there would be power under the treaties to do so.

Mr. W. Baxter

Does the right hon. and learned Gentleman recognise the fact that Article 19 of the Treaty of Union does not specifically state that it is only criminal law which should not be altered in Scotland, which is under the jurisdiction of the Scottish courts, and that it also embraces company law, and that by the Treaty of Rome the Commission has a right to come into Scotland or into England and enforce rules and regulations of the Commission under the law of the Community?

The Lord Advocate

As I am sure the hon. Gentleman will appreciate, I was not dealing specially with the Scottish point. Most of the Scottish argument tonight has turned on Amendment No. 165 dealing with the Scottish point. I can well understand those who have elaborated that at some length. There are several Amendments of some importance and I wanted to explain and place on record that in no material sense will Community law affect our criminal law, affect our judicial procedure, or affect this basic principle which the British people in all parts of the United Kingdom have come to take for granted over a period of several hundreds of years. I will give way, but I have little time.

Sir Elwyn Jones

Will the right hon. and learned Gentleman not agree that the provisions of this subsection deal not only with the present law of the Community but with future Community law, and would it not be an elementary protection of the liberties of our people to provide, if only as a matter of abundant caution, that there should be no interference with fundamental principles like habeas corpus and that there should be no right to make changes in our criminal law without Parliament taking a hand in it?

The Lord Advocate

That is anticipating that something would happen in the European Economic Community, of which we would be a part, which has never been anticipated so far, which is quite alien to the whole tradition of the Community.

Let us not forget that, with the exception of France, all the countries in the Common Market and those which are about to join are signatories to the European Convention on Human Rights. Habeas corpus is enshrined as part of that treaty provision no less effectively than it is enshrined in our law.

I should like now to refer to the arguments which have been adduced on the Treaty of Union with Scotland. I said to the hon. and learned Member for Edinburgh, Leith (Mr. Ronald King Murray), whose contributions to this and other debates we always enjoy, that the previous Administration made it clear that there was no doubt in their mind that there was nothing inconsistent between accession to Europe and the Act of Union of 1707.

On 21st June, 1967, the right hon. Member for Kilmarnock (Mr. William Ross), who was then Secretary of State for Scotland, was asked by Mr. James Davidson, the then Liberal Member for Aberdeenshire, West: Has the right hon. Gentleman examined the implications of Great Britain's proposed entry into the European Economic Community in relation to the Treaty of Union of 1707? The right hon. Gentleman replied: Yes, and I see no bar."—[OFFICIAL REPORT, 21st June, 1967; Vol. 748, c. 1717.] On another occasion—

Mr. Norman Buchan (Renfew, West) rose

The Lord Advocate

I will give way later, if there is time.

On another occasion the right hon. Member for Kilmarnock was asked by Mrs. Ewing, the then Member for Hamilton, to whom reference has been made, if, in view of the separate system of law applicable in Scotland, he will issue a White Paper on the legal aspects of Great Britain's application to join the European Economic Community in so far as the application affects Scots law and the rights of Scots citizens flowing therefrom. The right hon. Gentleman replied: No. The White Paper on the Legal and Constitutional Implications of United Kingdom Membership of the European Communities, which was presented to Parliament last May, was prepared in full consultation with the Scottish Law Officers."—[OFFICIAL REPORT, 18th January, 1968; Vol. 756, cc. 655–6] The previous Administration, rightly, in my view, saw nothing inconsistent between Britain's accession to the European Economic Community and the provisions of the Act of Union.

Mr. Michael Foot

Were not all those statements which the right hon. and learned Gentleman has quoted made to the House before the subsection, on which we are about to vote, had been devised? Why does he not apply his mind to the arguments which have been put forward on this subsection.

The Lord Advocate

I appreciate that there has been a long and detailed discussion about the effect of Clause 2 (1); but the argument which has been adduced in the context with which I am concerned, namely, its relationship to the Treaty of Union, is that we cannot do anything in this country, that we cannot —

Mr. W. Baxter

On a point of order. I am sorry to interrupt, but the debate cannot be justified if matters of great moment and importance are not being settled. The question is whether the Treaty of Union denies the right of this Parliament to commit Scotland to going into Europe or any other commitment which has not the full-hearted support of the people of Scotland. On that aspect of the question, I want to point out—

The Chairman

Order.

Mr. Baxter

I want to point out—

The Chairman

Order. I have got precisely the hon. Gentleman's point of order. There is no point of order of substance for me to consider. I hope that the hon. Gentleman will allow the Lord Advocate, in the few moments which are left, to terminate his speech.

The Lord Advocaterose

Mr. Baxter

On a point of order. I want to finish my point of order.

The Chairman

Order.

The Lord Advocate

This will be a British Act of Parliament, and it is not inconsistent—

Mr. Baxter

On a point of order.

The Lord Advocate

—with the Act of Union. As Lord Advocate I advise the Committee that there is nothing inconsistent between the Act of Union and British accession to the European Economic Community.

Mr. Baxter

On a point of order.

The Chairman

Order.

Question put, That the Amendment be made:—

The Committee divided: Ayes 265, Noes 273.

Division No. 165.] AYES [10.59 p.m.
Abae, Leo Doig, Peter Jenkins, Hugh (Putney)
Allaun, Frank (Salford, E.) Dormand, J. D. Jenkins, Rt. Hn. Roy (Stechford)
Archer, Peter (Rowley Regis) Douglas, Dick (Stirlingshire, E.) John, Brynmor
Armstrong, Ernest Driberg, Tom Johnson, James (K'ston-on-Hull, W.)
Ashley, Jack Duffy, A. E. P. Johnson, Walter (Derby, S.)
Ashton, Joe Dunn, James A. Jones, Barry (Flint, E.)
Atkinson, Norman Dunnett, Jack Jones, Dan (Burnley)
Bagier Gordon A T. Eadie, Alex Jones,Rt.Hn.Sir Elwyn(W.Ham,S.)
Barnett, Guy (Greenwich) Edwards, Robert (Bilston) Jones, Gwynoro (Carmarthen)
Barneet, Joel (Heywood and Royton) Edwards, William (Merioneth) Jones, T. Alec (Rhondda, W.)
Baxter, William Ellis, Tom Judd, Frank
Benn, Rt. Hn. Anthony Wedgwood English, Michael Kaufman, Gerald
Bennett, James (Glasgow, Bridgeton) Evans, Fred Kelley, Richard
Bidwell, Sydney Ewing, Harry Kerr, Russell
Biffen, John Faulds, Andrew Kinnock Neil
Bishop, E. S. Fernyhough, Rt. Hn. E. Lambie, David
Blenkinsop, Arthur Fisher,Mrs.Doris(B'ham,Uadywood) Lamond, James
Boardman H. (Leigh) Fitch, Alan (Wigan) Latham, Arthur
Body, Richard Fletcher, Raymond (Ilkeston) Leadbitter, Ted
Booth, Albert Fletcher, Ted (Darlington) Lee, Rt. Hn. Frederick
Bottomley, Rt. Hn. Arthur Foley, Maurice Leonard, Dick
Boyden, James (Bishop Auckland) Foot, Michael Lestor Miss Joan
Bradley, Tom Ford, Ben Lever, Rt. Hn. Harold
Brown, Hugh D. (G' gow, Provan) Forrester, John Lewis, Arthur (W. Ham, N.)
Brown Ronald (Shoreditch & F'bury) Fraser, John (Norwood) Lewis, Ron (Carlisle)
Buchan, Norman Freeson, Reginald Lipton, Marcus
Buchanan, Richard (G gow, Sp'burn) Garrett, W. E. Lomas, Kenneth
Butler, Mrs. Joyce (Wood Green) Gilbert, Dr. John Lyon, Alexander W. (York)
Campbell, I. (Dunbartonshire, W.) Ginsburg, David (Dewsbury) Lyons, Edward (Bradford, E.)
Cant, R. B. Gordon Walker, Rt. Hn. P. C. Mabon, Dr. J. Dickson
Carter, Ray (Birmingh'm, Northfield) Gourlay, Harry McBride, Neil
Carter-Jones, Lewis (Eccles) Grant, George (Morpeth) McCartney, Hugh
Castle, Rt. Hn. Barbara Grant. John D. (Islington, E.) McElhone, Frank
Clark, David (Colne Valley) Griffiths, Eddie (Brightside) McGuire, Michael
Cocks, Michael (Bristol, S.) Hamilton, James (Bothwell) Mackenzie, Gregor
Cohen, Stanley Hamilton, William (Fife, W.) Mackie, John
Coleman, Donald Hamling. William Mackintosh, John P.
Concannon, J. D. Hardy, Peter Maclennan, Robert
Conlan, Bernard Harrison, Walter (Wakefield) McMillan, Tom (Glasgow, C.)
Cox, Thomas (Wandsworth, C.) Kart, Rt. Hn. Judith McNamara, J. Kevin
Crawshaw, Richard Hattersley, Roy Mahon, Simon (Bootle)
Cronin, John Healey, Rt. Hn. Denis Mallalieu, J. P. W. (Huddersfield, E.)
Crosland, Rt. Hn. Anthony Heffer, Eric S. Marks, Kenneth
Crossman, Rt. Hn. Richard Hooson, Emlyn Marquand, David
Cunningham, G. (Islington, S.W.) Horam, John Marsden, F.
Cunningham, Dr. J. A. (Whitehaven) Houghton, Rt. Hn. Douglas Marshall, Dr. Edmund
Dalyell, Tam Howell, Denis (Small Heath) Marten, Neil
Darling, Rt. Hn. George Huckfield, Leslie Mason, Rt. Hn. Roy
Davidson, Arthur Hughes, Rt. Hn. Cledwyn (Anglesey) Mayhew, Christopher
Davies, Denzil (Lianelly) Hughes, Mark (Durham) Meacher, Michael
Davies, Ifor (Gower) Hughes, Robert (Aberdeen, N.) Mellish, Rt. Hn. Robert
Davis, Clinton (Hackney, C.) Hughes, Roy (Newport) Mendelson, John
Davis, Terry (Bromsgrove) Hunter, Adam Mikardo, Ian
Deakins, Eric Hutchison, Michael Clark Millan, Bruce
de Freitas, Rt. Hn. Sir Geoffrey Irvine,Rt.Hn.SirArthur(Edge Hill) Miller, Dr. M. S.
Dell, Rt. Hn. Edmund Janner, Greville Milne, Edward
Dempsey, James Jay, Rt. Hn. Douglas Mitchell, R. C. (S'hampton, Itchen)
Jeger, Mrs. Lena Moate, Roger
Molloy, William Rhodes, Geoffrey Taverne, Dick
Morgan, Elystan (Cardiganshire) Richard, Ivor Thomas,Rt.Hn.George (Cardiff,W.)
Morris, Alfred (Wythenshawe) Roberts, Albert (Normanton) Thomson, Rt. Hn. G. (Dundee, E.)
Morris, Charles R. (Openshaw) Robertson, John (Paisley) Tinn, James
Morris, Rt. Hn. John (Aberavon) Roderick,Caerwyn E.(Br'c'n&R'dnor) Tomney, Frank
Moyle, Roland Rodgers, William (Stockton-on-Tees) Torney, Tom
Mulley, Rt. Hn. Frederick Roper, John Tuck, Raphael
Murray, Ronald King Rose, Paul B. Turton, Rt. Hn. Sir Robin
Oakes, Gordon Ross, Rt. Hn. William (Kilmarnock) Urwin, T. W.
Ogden, Eric Rowlands, Edward Varley, Eric G.
O'Halloran, Michael Sandelson, Neville Wainwright, Edwin
O'Malley, Brian Sheldon, Robert (Ashton-under-Lyne) Walker, Harold (Doncaster)
Oram, Bert Shore, Rt. Hn. Peter (Stepney) Walker-Smith, Rt. Hn. Sir Derek
Orbach, Maurice Short,Rt.Hn.Edward (Nc'tle-u-Tyne) Wallace, George
Orme, Stanley Short, Mrs. Rénee (W'hampton, N.E.) Watkins, David
Oswald, Thomas Silkin, Rt. Hn. John (Deptford) Wellbeloved, James
Owen Dr. David (Plymouth, Sutton) Silkin, Hn. S. C. (Dulwich) Wells William (Walsall, N)
Padley, Walter Sillars, James White, James (Glasgow, Pollok)
Paget, R. T. Silverman, Julius Whitehead, Phillip
Palmer, Arthur Skinner, Dennis Whitlock, William
Pannell, Rt. Hn. Charles Small, William Willey, Rt. Hn. Frederick
Pavitt, Laurie Smith, John (Lanarkshire, N.) Williams, Alan (Swansea, W.)
Pendry, Tom Spearing, Nigel Williams, W. T. (Warrington)
Pentland, Norman Spriggs, Leslie Wilson, Alexander (Hamilton)
Perry, Ernest G. Stallard, A. W. Wilson, Rt. Hn. Harold (Huyton)
Powell, Rt. Hn. J. Enoch Stewart, Rt. Hn. Michael (Fulham) Wilson, William (Coventry, S.)
Prentice, Rt. Hn. Reg. Stoddart, David (Swindon) Woof, Robert
Prescott, John Stonehouse, Rt. Hn. John
Price, J. T. (Westhoughton) Strang, Gavin TELLERS FOR THE AYES:
Price, William (Rugby) Strauss, Rt. Hn. G. R. Mr. Joseph Harper and
Reed, D. (Sedgefield) Summerskill, Hn. Dr. Shirley Mr John Golding
Rees, Merlyn (Leeds, S.) Swain, Thomas
NOES
Adley, Robert Critchley, Julian Hall-Davis, A. G. F.
Alison, Michael (Barkston Ash) Crouch, David Hannam, John (Exeter)
Aliason, James (Hemel Hempstead) Crowder, F. P. Harrison, Brian (Maldon)
Amery, Rt. Hn. Julian Davies, Rt. Hn. John (Knutsford) Harrison, Col. Sir Harwood (Eye)
Archer, Jeffrey (Louth) d'Avigdor-Goldsmid, Sir Henry Haselhurst, Alan
Astor, John d'Avigdor-Goldsmld.Maj.-Gen. James Hastings, Stephen
Atkins, Humphrey Deedes, Rt. Hn. W. F. Havers, Michael
Awdry, Daniel Digby, Simon Wingfield Hawkins, Paul
Baker, Kenneth (St. Marylebone) Dixon, Piers Hay, John
Baker W. H. K. (Banff) Dodds-Parker, Douglas Hayhoe, Barney
Bainiel, Lord Douglas-Home, Rt. Hn. Sir Alec Heath, Rt. Hn. Edward
Barber, Rt. Hn. Anothony Drayson, G. B. Heseltine, Michael
Batsford, Brian du Cann, Rt. Hn. Edward Higgins, Terence L.
Beamish, Col. Sir Tuffon Dykes, Hugh Hiley, Joseph
Bennett Sir Frederic (Torquay) Eden, Sir John Hill, John E. B. (Norfolk, S.)
Bennett, Dr. Reginald (Gosport) Edwards, Nicholas (Pembroke) Hill, James (Southampton, Test)
Berry, Hn. Anthony Elliot, Capt. Walter (Carshalton) Holland, Phillip
Biggs-Davison, John Elliott, R. W. (N'c'tle-upon-Tyne.N.) Holt, Miss Mary
Blaker Peter Emery, Peter Horden, Peter
Boardman Tom (Leicester S W) Eyre, Reginald Hornby, Richard
Boscawen, Hn. Robert Fenner, Mrs. Peggy Hornsby-Smith,Rt.Hn.Dame Particia
Bossom, Sir Clive Finsberg, Geoffrey (Hampstead) Howe, Hn. Sir Geoffrey (Relgate)
Bowden, Andrew Fisher, Nigel (Surbiton) Howell, David (Guildford)
Bray, Ronald Fletcher-Cooke, Charles Howell, Ralph (Norfolk, N.)
Brinton, Sir Tatton Fookes, Miss Janet Hont, John
Brocklebank-Fowler, Christopher Foster, Sir John Iremonger, T. L.
Brown, Sir Edward (Bath) Fowler, Norman James, David
Bruce-Gardyne, J. Fox, Marcus Jenkin, Patrick (Woodford)
Bryan, Paul Fry, Peter Jessel, Toby
Buchanan-Smith,Alick (Angus, N&M) Galbraith, Hn. T. G. Johnson, Smith, G. (E. Grinstead)
Buck, Antony Gardner, Edward Jopling, Michael
Burden, F. A. Gibson-Watt, David Joseph, Rt. Hn. Sir Keith
Butler, Adam (Bosworth) Gilmour, Ian (Norfolk, C.) Kaberry, Sir Donald
Carlisle, Mark Gilmour, Sir John (Fife. E.) Kellett-Bowman, Mrs. Elaine
Carr, Rt. Hn. Robert Godber, Rt. Hn. J. B Kershaw, Anthony
Chapman, Sydney Goodhart, Philip Kimball, Marcus
Chataway, Rt. Hn. Christopher Goodhew, Victor King, Evelyn (Dorset, S.)
Chichester-Clark, R. Gorst, John King, Tom (Bridgwater)
Churchill, W. S. Gower, Raymond Kinsey, J. R.
Clark, William (Surrey, E.) Grant, Anthony (Harrow, C.) Kirk, Peter
Clegg, Walter Gray, Hamish Knight, Mrs. Jill
Cockeram, Eric Green, Alan Knox, David
Cooke, Robert Grieve, Percy Lambton, Lord
Coombs, Derek Griffiths, Eldon (Bury St. Edmunds) Lane, David
Cooper, A. E. Gryils, Michael Langford-Holt, Sir John
Cordle, John Gummer, Selwyn Legge-Bourke, Sir Harry
Corfield, Rt. Hn. Frederick Gurden, Harold Le Merchant, Spencer
Costain. A. P. Hall, Miss Joan (Kelghley) Lewis, Kenneth (Rutland)
Hall, John (Wycombe)
Lloyd, Ian (P'tsm'th, Langstone) Pike, Miss Mervyn Stokes, John
Longden, Sir Gilbert Price, David (Eastleigh) Stuttaford, Dr. Tom
Loveridge, John Proudfoot, Wilfred Tapsell, Peter
Luce, R. N. Pym, Rt. Hn. Francis Taylor, Sir Charles (Eastbourne)
MacArthur, Ian Quennell, Miss J. M. Taylor, Frank (Moss Side)
McCrindle, R. A. Raison, Timothy Taylor, Robert (Croydon, N.W.)
McLaren, Martin Ramsden, Rt. Hn. James Tebbit, Norman
Maclean, Sir Fitzroy Rawlinson, Rt. Hn. Sir Peter Temple, John M.
Macmillion.Rt.Hn.Maurice (Farnham) Redmond, Robert Thatcher, Rt. Hn. Mrs. Margaret
McNair-Wilson, Michael Reed, Laurance (Bolton, E.) Thomas, John Stradling (Monmouth)
McNair-Wilson, Patrick (New Forest) Rees, Peter (Dover) Thomas, Rt. Hn. Peter (Hendon, S.)
Maddan, Martin Rees-Davis, W. R. Thompson, Sir Richard (Croydon, S.)
Madel, David Renton, Rt. Hn. Sir David Thorpe, Rt. Hn. Jeremy
Marples, Rt. Hn. Ernest Rhys Williams, Sir Brandon Tilney, John
Mather, Carol Ridley, Hn. Nicholas Trafford, Dr. Anthony
Maude, Angus Ridsdale, Julian Trew Peter
Maudling, Rt. Hn. Reginald Roberts, Michael (Cardiff, N.) Tugendhat, Christopher
Mawby, Ray Roberts, Wyn (Conway) van Straubenzee, W. R.
Maxwell-Hyslop, R. J. Rodgers, Sir John (Sevenoaks) Vaughan, Dr. Gerard
Meyer, Sir Anthony Rossi, Hugh (Hornsey) Vickers Dame Joan
Mills, Peter (Torrington) Rost, Peter Waddington, David
Mills, Stratton (Belfast, N.) Royle, Anthony Walder, David (Clitheroe)
Mitchell, Lt. -Col. C.(Aberdeenshire,W) St. John-Stevas, Norman Walker, Rt. Hn. Peter (Worcester)
Mitchell, David (Basingstoke) Sandys, Rt. Hn. D. Wall, Patrick
Money, Ernie Scott-Nicholas Walters, Dennis
Monks, Mrs. Connie Scott-Hopkins, James Ward, Dame Irene
Monro, Hector Sharples, Richard Warren, Kenneth
More, Jasper Shaw, Michael (Sc'b'gh & Whitby) Weatherill, Bernard
Morgan-Giles, Rear-Adm. Shelton William (Clapham) Wells, John (Maidstone)
Morrison, Charles Simeons, Charles White, Roger (Gravesend)
Murton, Oscar Sinclair Sir George Wiggin, Jerry
Nabarro, Sir Gerald Skeet T. H. H. Wilkinson, John
Neave, Airey Smith, Dudley (W'wick & L'mington) Winterton, Nicholas
Normanton, Tom Soref, Harold Wolrige-Gordon, Patrick
Nott, John Speed, Keith Wood, Rt. Hn. Richard
Onslow, Cranley Spence, John Woodnutt, Mark
Oppenheim, Mrs. Sally Sproat, Iain Worsley, Marcus
Osborn, John Stainton, Keith Wylie, Rt. Hn. N. R.
Owen, Idris (Stockport, N.) Stanbrook, Ivor Younger, Hn. George
Page, Graham (Crosby) Steel, David
Page, John (Harrow, W.) Stewart-Smith, Geoffrey (Belper) TELLERS FOR THE NOES:
Parkinson, Cecil Stodart, Anthony (Edinburgh, W.) Mr. Tim Fortescue and
Peel, John Stoddart-Scott, Col. Sir M. Mr. Kenneth Clarke.
Percival, Ian
Peyton. Rt. Hn. John

Question accordingly negatived.

It being after Eleven o'clock, The CHAIRMAN left the Chair to report Progress, and ask leave to sit again, pursuant the Order yesterday.

Committee report Progress to sit again tomorrow.