Commons Sitting of 27 November 1973

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS

  CLYDE PORT AUTHORITY (HUNTERSTON ORE TERMINAL) ORDER CONFIRMATION BILL (By Order)
  Order for Second Reading read.
  To be read a Second time upon Tuesday next.

ORAL ANSWERS TO QUESTIONS
  EMPLOYMENT

    Industrial Relations Act
    Mr. McBrideasked the Secretary of State for Employment if he is satisfied with the operation of the Industrial Relations Act.
    Mr. Cohenasked the Secretary of State for Employment which parts of the Industrial Relations Act he is prepared to repeal or amend.
    Mr. Bidwellasked the Secretary of State for Employment if he now intends to bring in amendments to the Industrial Relations Act, in the light of the Government's experience of its working.
    The Secretary of State for Employment (Mr. Maurice Macmillan): The Government have no proposals at present for changes in the Industrial Relations Act. As I explained in answer to a Question from the hon. Member for Liverpool, Exchange (Mr. Parry) on 19th November.—[Vol. 864, c. 333–4.]—I am satisfied that the Act has brought important benefits. I propose, after consultation, to reduce the qualifying period for unfair dismissals from two years to one ; I am about to start consultations on the disclosure of information under Sections 56 and 57 of the Act ; and I am prepared to consider
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    constructive suggestions for its further improvement.
    Mr. McBride: Has the right hon. Gentleman considered the failure of the Act to deal with Con-Mech Engineering Limited, a rogue employer whose refusal to accord recognition to the Amalgamated Union of Engineering Workers to act on behalf of its members employed by the firm has exacerbated industrial relations? Does the right hon. Gentleman not agree that the inoperability and the politically biased legal rigidity of the Act are shown clearly in the pathetic and unprecedented explanation offered yesterday for his court's decision by Sir John Donaldson, the President of the Industrial Relations Court? Is not there one law for the rogue employer and absolution for him, and fines for trade unions?
    Mr. Macmillan: The only reason for any difference of treatment between the employer and the employees in the Con-Mech case is that the union refused to go to the court.
    Mr. Cohen: Is the right hon. Gentleman aware of the statement by the President of the Industrial Relations Court recently, when he said :
    "Some parts of this Act are ill-conceived "—
    Mr. Speaker: Order. I am afraid that one of the rules is that hon. Members may not quote at Question Time.
    Mr. Cohen: I apologise, Mr. Speaker. Does the right hon. Gentleman recollect that when the Industrial Relations Bill was passing through this House we were told by Ministers of his Government that this legislation would reduce the number of strikes and the periods lost through strikes? Is the right hon. Gentleman aware that this has not proved to be the case and that if one studies the record it is clear that the situation has deteriorated? In view of this, is not it now time that the Government took the initiative and came forward with constructive proposals to amend the Act in order to try to relieve the present situation?
    Mr. Macmillan: I do not accept that any recent increase in strikes has been due to the Industrial Relations Act. The recent strikes have been entirely on matters of pay. I do not accept that we have taken a difficult attitude over the Act. My colleagues and I have made it clear that

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    we are prepared to consider any constructive suggestion at any time, as soon as the unions are ready to talk to us.
    Mr. Marten: Will my right hon. Friend say how many employees have benefited from the unfair dismissal provision in the Act?
    Mr. Macmillan: Over 15,000.
    Mr. Bidwell: Is not it the case that, by and large, the unfair dismissals part of the Act is acceptable to the trade union movement but that generally and overwhelmingly the Act is poison to industrial relations? Does the right hon. Gentleman recall the time of the railway-men's compulsory ballot, when he said that he was learning? What the right hon. Gentleman has just said does not indicate that he has learned very much. Is that not because he is unable to apply his independent mind to the substance of the situation, because a stubborn Prime Minister is responsible for the retention of the whole of the Act?
    Mr. Macmillan: There is no difference between my right hon. Friend the Prime Minister and me about the retention of the Act. Like my right hon. Friend, I do not accept that there is any element of stubbornness. The Act is in operation. A large number of cases have been dealt with by the National Industrial Relations Court. Some have been settled by conciliation outside the court's auspices, some have been settled out of court, and some have been settled following a CIR reference and report. I am happy to say that many unions have appeared before the court in this respect, with the exception of the engineering union.
    Mr. Adam Butler: Does my right hon. Friend accept that although some small changes in the Act may be necessary it would be wrong to debate this subject in a political and emotive atmosphere?
    Mr. Macmillan: I fully accept my hon. Friend's suggestion that there are small alterations which could and should be made to the Act. As I have made plain to the House and the trade union movement, we are prepared to discuss these and other matters at any time. I agree that this debate should be conducted in an atmosphere of calm and good sense.
    Mr. Prentice: Referring to the Con-Mech case, is the Secretary of State aware that we are sick and tired of the
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    way he uses the controversy about AUEW policy as a smoke screen for the Government's responsibilities. Will not he acknowledge that something grossly improper from the constitutional point of view has recently occurred, in that moneys from separate, voluntary, political levies, paid into a fund which is protected by law from being used for anything other than political purposes, have been seized? Is that not one more urgent reason, in addition to all the other reasons, for the repeal of this legislation?
    Mr. Macmillan: It certainly is not a good reason for the repeal of this legislation. The Act specifies that these funds should not be used in compensation. If the union would apply to the court it could object. I do not accept that the refusal of the Amalgamated Union of Engineering Workers—practically alone among the unions—to use the court is a smoke screen for Government policy.

    Working Days Lost
    Mr. Ashtonasked the Secretary of State for Employment what estimate he has made of the number of working days lost in strikes on 5th and 12th November 1973.
    The Minister of State, Department of Employment (Mr. R. Chichester-Clark): My Department has estimated that approximately 264,000 and 59,000 working days were lost on 5th and 12th November, respectively, as the result of protest stoppages called on those days.
    Mr. Ashton: Is the Minister aware that the National Industrial Relations Court is costing trade unions thousands of pounds and industry millions of pounds? Will he send a message to the president of the court to tell him that his job is supposed to be to settle disputes rather than to make them worse? When will the Minister take action instead of sticking his head in the sand?
    Mr. Chichester-Clark: The cost of these stoppages is reflected in the wages of those affected and the production of the country. As more than three-quarters of the AUEW members did not strike, it could be said that they consider their union's policy of not defending itself before the court is the wrong policy.
    Mr. Tebbit: Will my hon. Friend remind the House of the advice given by

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    leading Opposition spokesmen on defiance of a legal High Court order?
    Mr. Chichester-Clark: As my hon. Friend will understand, there has been some confusion in these matters. The right hon. Member for East Ham, North (Mr. Prentice) said that the law should be obeyed, whereas the right hon. Member for Bristol, South-East (Mr. Benn) said that he would support the engineers in defending the basic rights of trade unionism. [HON. MEMBERS : "Reading."] I am not reading. The Deputy Leader of the Opposition said that it was not the job of the Labour Party to go round advising people to obey the law. That leaves the Leader of the Opposition in an uncomfortable dilemma, of the sort he found himself in when he abstained during the vote in his National Executive on the question whether the Labour Party should support the May Day strike.
    Mr. Prentice: Is not that a perfect example of Ministers using the controversy on the AUEW action as a smoke screen for their own responsibility?

    Hotels and Entertainment (Work Permits)
    3. Mr. Thomas Coxasked the Secretary of State for Employment if, in the allocation of work permits for the hotel and entertainment industries, he will take account of the level of wages paid to permit holders in those industries.
    The Under-Secretary of State for Employment (Mr. Dudley Smith): This is done in all cases. Before a work permit is issued my Department must be satisfied that the overseas worker will receive the same level of wages as do British workers in the district doing the same job.
    Mr. Cox: In spite of that reply, is not the hon. Gentleman aware that there is ample evidence to prove that many people who are allowed into the country are working extremely long hours for extremely low rates of pay? Unfortunately, many of them are frightened to do anything about it because of their status as immigrants. They are told that if they complain they will be sacked and deported. Is it not time that the Minister ensured that people coming into the country to work in catering, entertainment
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    and other industries received trade union rates for the job?
    Mr. Smith: We give all the guidance we can to those who come into the country. Our impression is that overseas workers are well informed about rates of pay and conditions, and we rarely get complaints. If the hon. Gentleman or anyone else has specific examples I shall be happy to look into them.
    Mr. Gurden: Will the Minister not be led into a short-term solution by increasing the number of Commonwealth immigrants to satisfy the need for more workers?
    Mr. Smith: I think that my hon. Friend knows that for hotel and catering workers there is a limit of 5,000. We have offered to look at the reallocation of permits in view of representations we have received from the trade.
    Mr. Driberg: Does the hon. Gentleman know anything about the conditions of non-English-speaking workers from Hong Kong, many of whom are employed in Chinese restaurants in London? Is he aware that in some cases their pay and hours of work are appalling? As they do not speak English, they do not know what is the situation here and what are their rights.
    Mr. Smith: I have given individual attention to the so-called sweat shops and, as the hon. Member for Ealing, North (Mr. Molloy) knows, I have received deputations about them. I am not aware of allegations about Chinese restaurants, but if the hon. Gentleman will either see me or send evidence, I guarantee to look into the matter.

    Training Services Agency
    Mr. Leslie Huckfieldasked the Secretary of State for Employment whether he will make a statement about progress in setting up the Training Services Agency.
    Mr. Chichester-Clark: The aim is for the Training Services Agency to come into existence as a body corporate working under the direction of the Manpower Services Commission on 1st April 1974. The agency is now being set up within my Department and good progress is being made.
    Mr. Huckfield: Will the hon. Gentleman comment on the current consultations between the Training Services Agency and the industrial training boards? On what basis will the TSA make grants to the individual training boards?
    Mr. Chichester-Clark: Progress between the boards and my officials varies in different cases. In most cases progress is well advanced and all is going well.
    Mr. William Clark: Where will the offices of the TSA be located? Does my hon. Friend envisage regional TSA offices?
    Mr. Chichester-Clark: The plan is that the head office should be located for the time being in London. There will be seven regional offices and it is likely that up to 20 district offices will be set up during 1974 in the larger conurbations.

    Dyslexia
    Mr. Carter-Jonesasked the Secretary of State for Employment if he will give directions to disablement rehabilitation officers to continue monitoring the employment prospects of persons who have received training for overcoming dyslexia ; and if he will make a statement.
    Mr. Dudley Smith: When my Department's services are sought by someone known to have been trained to overcome this disorder, affecting reading or writing ability, he gets the special assistance of a disablement resettlement officer who keeps in touch with him after he starts work, when it is appropriate to do so. No special directions to disablement resettlement officers are necessary in this matter.
    Mr. Carter-Jones: I thank the Minister for that reply, although it is unsatisfactory. What instructions do disablement rehabilitation officers receive about getting in touch with people suffering from dyslexia and making sure that they receive training? Is he aware that it is estimated that about 5 per cent. of the population suffer from this complaint and that those who are elderly or middle-aged have no chance of getting a job? Will he give funds to the British Council for the Rehabilitation
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    of the Disabled—the only body which makes provision for these people?
    Mr. Smith: I am advised that there are difficulties in diagnosing this disorder with any certainty and it is, therefore, difficult to estimate the number of sufferers. The British Council for the Rehabilitation of the Disabled has a remedial and diagnostic centre for adults, and our disablement resettlement officers refer to that centre suitable people for guidance and training. Next year the council hopes to bring out a report which should give valuable guidance to further thought in this sphere and which will be acted on by my Department.
    Mr. Holland: Will my hon. Friend indicate the size of the problem as it affects people who are seeking employment? To what extent can dyslexia be overcome by suitable training?
    Mr. Smith: It can be overcome, I think, by suitable training, and certainly by expert medical guidance. It often affects people with good intellectual abilities in other respects. The problem should not be over-emphasised. Fortunately, it is relatively small, but even a few people deserve the right kind of guidance.

    Newspaper Industry (Dispute)
    Mr. David Clarkasked the Secretary of State for Employment what plans he has to offer his services in the dispute between the National Union of Journalists and the Newspaper Society ; and if he will make a statement.
    Mr. Frank Allaunasked the Secretary of State for Employment if he will make a statement about the dispute between the Newspaper Society and the National Union of Journalists.
    Mr. Chichester-Clark: The Newspaper Society and the National Union of Journalists have so far been unable to agree on the conditions under which they should continue negotiations on a new pay settlement to replace the present national agreement expiring on 31st December 1973. The union has so far insisted that an existing clause preventing claims for new house agreements should first be cancelled. This has not been acceptable to the society. The two sides

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    are meeting to-day for further discussions with a view to the resumption of negotiations.
    Mr. Clark: Will the Minister reassure us that he will use his good offices to do all he can to get this dispute settled? Will he bear in mind that many provincial journalists, who are very hard-working, feel particularly aggrieved about their remuneration at a time when provincial newspapers are generally so profitable?
    Mr. Chichester-Clark: Of course I give the assurance that we shall keep closely in touch with the situation, but there is a procedural point at issue. When the parties are in negotiation, as they are today, the question of conciliation does not arise.
    Mr. Allaun: Does the Minister accept the reasonable union position that there should be a resumption of its freedom to negotiate at plant or company level, particularly since the union has called off certain indiscriminate strikes in order to obtain the resumption of the talks which are going on today?
    Mr. Chichester-Clark: I have made the present position perfectly plain. I have said that the parties are meeting today. I should not be helping either side—nor would I wish to do so in that sort of way—if I were to add to what I have already said.
    Mr. Harold Walker: Is the Minister aware that in Sheffield, during this dispute, the car of a picketing journalist was severely damaged by being repeatedly rammed by a motor vehicle delivering newsprint and driven by Mr. Tony Bilton, who earned some notoriety during the recent Chrysler dispute by organising what he described as "professional strike-busters "? Will the Minister condemn violence when used by strikebusters in this way with at least as much vigour as the Government use when talking about the violence of pickets?
    Mr. Chichester-Clark: As the hon. Gentleman knows, the answer is that the Government condemn violence of all kinds in that respect.

    Manpower Services Commission
    Mr. Redmondasked the Secretary of State for Employment if he will now
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    announce the location of the offices of the Manpower Services Commission.
    Miss Joan Hallasked the Secretary of State for Employment if he will announce the site for the new premises of the Manpower Services Commission.
    Mr. Maurice Macmillan: The Government are still considering the recommendations of the Hardman Report on dispersal of Government work from London, and we hope to make an announcement fairly soon. In the immediate future the offices of the commission will be in Stratton House, London W1.
    Mr. Redmond: Will my right hon. Friend make sure that in the meantime the offices do not take root in London? Will he bear in mind that the biggest industrial conurbation in this country is in Lancashire? Would not that be the most suitable place to put the offices of the Manpower Services Commission, bearing in mind also that Bolton is in the middle of Lancashire?
    Mr. Macmillan: I am always prepared to bear in mind what my hon. Friend says about the amenities in his constituency, and his suggestions for improvement, but we are awaiting the outcome of the Hardman Report. As I said, in the immediate future the offices will be in London, but I hope that we shall be able to come to some agreement to disperse them in due course.

    Unemployed Persons
    Mr. Wingfield Digbyasked the Secretary of State for Employment how many unemployed there are now in West Dorset ; and how many of these are non-industrials.
    Mr. Dudley Smith: Based on the provisional figures for 12th November, there were 560 people unemployed in the area covered by the Bridport, Dorchester and Sherborne employment offices. Of these, 463 were last employed in industries outside the manufacturing sector.
    Mr. Dighy: Is my hon. Friend aware of the need that there is for office jobs for all age groups in this part of the world? Would he make representations to his right hon. Friends to move more branches of Government

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    Departments to this area, which has excellent facilities for them?
    Mr. Smith: I know my hon. Friend's keen concern on behalf of his constituents. That area will be considered together with many others which have made representations that they should be considered in respect of dispersal. We have to remember the need for operational efficiency and general regional policy. One of the difficulties in my hon. Friend's constituency is that many of those registered as unemployed and who were hitherto white-collar workers have moved into the area on retirement between 55 and 60 years of age and, alas, employers are often reluctant to take them on.
    13. Mr. Tebbitasked the Secretary of State for Employment how many people are registered as unemployed in the Harlow, Epping and Chingford areas.
    Mr. Dudley Smith: The provisional figures for 12th November show that 471 people were unemployed in the area covered by the Harlow employment office, 92 in the Epping area, and 1,479 in Leyton and Walthamstow, which includes Chingford.
    Mr. Tebbit: Will my hon. Friend confirm the impression of most of my constituents that unemployment is now lower than it was in June 1970, that job vacancies are higher and that, in all respects, the employment and job opportunity position is a darned sight better now than it was three and a half years ago?
    Mr. Smith: Yes, Sir. My hon. Friend is absolutely right. [Interruption.] However much the Opposition may not like it, it is true. The current unemployment rate in my hon. Friend's area is about half the national average, and notified vacancies for November in the three areas taken together were one quarter higher than they were in November last year. The position continues to improve.
    Mr. Heffer: Will the hon. Gentleman confirm that, while the unemployment rate may well be dropping in Epping, in areas such as Merseyside unemployment is still very high? Over 40,000 workers are unemployed in the Merseyside area. Is the hon. Gentleman aware that because of the lowering of the rate of house building, particularly in the private sector, there is now a further increase in unemployment
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    among building operatives on Merseyside?
    Mr. Smith: No one would deny that there are still pockets of difficulty, including the hon. Gentleman's area, but I am sure that he would be the first to agree that the Government have done an excellent job in reducing the rate of unemployment in this country.

    Training (Yorkshire and Humberside)
    Mr. Duffyasked the Secretary of State for Employment if he is satisfied with the present provision for industrial training in the Yorkshire and Humberside region.
    Mr. Chichester-Clark: No, Sir. Although 2,100 places are now available for training under the Training Opportunities Scheme compared with fewer than 900 in 1970, I plan a continued and steady increase in future.
    Mr. Duffy: Is the Minister aware that perhaps the most grievous—because it has happened before—of the capacity limitations on economic growth in the Yorkshire region arises now from the shortage of certain categories of skilled workers? Will he reconsider the present number and distribution of training centres in the region, to ensure that this does not happen again?
    Mr. Chichester-Clark: Although, as I said, I am not satisfied with the situation, I am bound to admit that there is a slight improvement—namely, an improvement of 136 per cent.—on the places figures for 1970. I take some little satisfaction from that. But the introduction of the Training Opportunities Scheme has considerably increased the quantity and range of courses available by using capacity in colleges and employers' establishments. The four existing GTCs have been expanded, with annexes opened this year at Sheffield and Leeds, giving about 300 extra places in all, and there are plans in the pipeline.
    Mr. Wilkinson: Will my hon. Friend see to an extension of the admirable scheme now in operation at Bradford College of Art and Technology, under which people coming into the engineering industry are offered by the Department a 12-weeks' introductory course in the basic skills of that industry—a very

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    useful foundation for people entering it for the first time?
    Mr. Chichester-Clark: I will certainly bear in mind what my hon. Friend says. I have been very much encouraged by the improvement in the training of women. The percentage of women to men has increased twelvefold since 1970—from 3·2 to 37·2.

    Price and Pay Code
    Mr. Goldingasked the Secretary of State for Employment if he will establish an independent committee of inquiry into the working of the Price and Pay Code.
    Mr. Maurice Macmillan: No. Sir.
    Mr. Golding: Is the right hon. Gentleman aware that the Post Office has been told that the £50 special allowance to Irish Post Office employees, which the Post Office wants to pay because of the hazardous conditions under which they have been working, has to be met from the 1 per cent. flexibility allowance for other workers, which means that the English, Welsh and Scottish Post Office workers will be paying this allowance? Is this not scandalous? How many other injustices of this sort have been discovered under the code?
    Mr. Macmillan: I had a long discussion about this problem with the unions concerned. I have great sympathy for their position. There are other negotiating groups and other jobs in Northern Ireland in a similar position.
    Mr. Dykes: Does my right hon. Friend not agree that the public saw the merits, the value and the relative success of phases 1 and 2, despite the problem of overseas price rises, and that they now expect the Government to pursue phase 3 with equal energy?
    Mr. Macmillan: I think that that is correct, and I am happy to say that so far, under stage 3, there have been 74 settlements, covering 1¼ million workers, which have been notified to the Pay Board.
    Mr. Arthur Lewis: Is the right hon. Gentleman aware that I have sent to him and his Department, to the Prime Minister and to other Ministers details of dozens of cases of company directors deliberately breaking phases 1 and 2 over the
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    whole period and getting thousands of pounds in increased salaries? Does he agree that the Prime Minister and he have refused to take any action—as have the Pay Board and the Price Commission? Does this not show that the present situation is completely unfair, especially when the hon. Member keeps viciously attacking the AUEW?
    Mr. Macmillan: The Pay Board investigates any case that is brought to its attention—
    Mr. Lewis: It has refused.
    Mr. Macmillan:—of a breach of the pay code. It also carries out spot checks in order to check on such abuses.
    Mr. Lewis: On a point of order, Mr. Speaker. In view of the fact that the information that the Minister has is wrong, I beg to give notice that I shall seek an early opportunity of raising the matter on the Adjournment.

    Retail Price Index
    Mr. David Stoddartasked the Secretary of State for Employment what changes he proposes to make in the compilation and weighting of the retail price index.
    Mr. Maurice Macmillan: Each January the weights used in the index are revised, using the results of the Family Expenditure Survey. Additional items are included among the indicators when necessary. I have asked the Retail Prices Index Advisory Committee to reexamine the treatment of housing costs in the index. It will also consider both the possibility of rebasing it and certain technical points on the method used to construct the index. The Retail Prices Index Advisory Committee has in fact already met.
    Mr. Stoddart: I am glad to hear that the Minister is considering this matter. Is he aware that a realistic retail price index is vital to his Department at present? Will he have a particular look at the question of housing? Did he read the Sunday Times last weekend, wherein it was made obvious that the 12½ per cent. weighting given at present is totally unrealistic, as the average salary that a person has to earn to be able to buy a £10,000 house is now over £4,300 and person has to pay more than 33⅓ per cent. of his income in mortgage charges?
    Mr. Macmillan: There is a good deal of controversy about the weighting in the index. In a recent issue of the Economist, for example, the probable increase from that source was estimated at about ½ per cent. That is exactly what the advisory committee is examining.
    Mr. Sydney Chapman: Has my right hon. Friend made any estimate of the effect on the retail price index of increased fuel costs? If there is a shortage of fuel this winter, ought not that commodity to be lightened on the average retail price index?
    Mr. Macmillan: I do not think that the index can be altered frequently or from time to time on a very short range of matters. It is important, as has been suggested in a supplementary question, that we have the best index possible. That is why successive Governments have not sought to alter it without consulting the advisory committee, on which trade unionists, industrialists and others, including academics, are represented.

    Basingstoke
    Mr. David Mitchellasked the Secretary of State for Employment what are the latest figures of unemployment and of unfilled vacancies notified to his Department for Basingstoke and its surrounding area.
    Mr. Dudley Smith: The provisional figures for 12th November show that there were 402 people unemployed and 1,072 notified unfilled vacancies in the area covered by the Basingstoke employment office.
    Mr. Mitchell: Will my hon. Friend indicate the trend on unfilled vacancies over recent years? Will he estimate the proportion of vacancies which are notified to his Department, and how that number compares with the number of unemployed which he has just indicated?
    Mr. Smith: Yes, Sir. This is always a difficult figure to estimate well. But the number of notified vacancies that we receive is about 25 per cent. of all unfilled vacancies. A large number do not reach the Department, but we are keen that more should. The number of notified unfilled vacancies in Basingstoke has risen by about 70 per cent. over the past year. The number of vacancies has
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    risen in my hon. Friend's area, as it has in most parts of the country.
    Mr. Fernyhough: Although the Minister is taking great pride in the reduction in unemployment and the figure for vacancies, particularly during the last 12 months, will he look ahead and give us a guarantee that in June next year, having regard to the June figures which have been quoted, the figure will not exceed what it was under the present Government in June 1971?
    Mr. Smith: The right hon. Gentleman knows that one cannot answer a hypothetical question of that sort. All that I can say to him—he knows this from his vast experience in my Department—is that one of the best tests of a good trend of employment is the notification of unfilled vacancies. These have been rising consistently over the past year and they continue to rise.
    Mr. Gurden: Is my hon. Friend aware of the serious deterrent to mobility in labour—to people moving from one area to another—of council house tenants not being able to move and to get a house in another area?
    Mr. Smith: Yes, Sir. That is another question. It is recognised and is being examined in all the questions that we have under consideration concerning mobility.
    Mr. Robert C. Brown: If the Minister is going in for this type of planted Question, will he ask his PPS to be a little more selective and next time to plant one from his hon. Friends the Members for Tynemouth (Dame Irene Ward) and Newcastle-upon-Tyne, North (Mr. R. W. Elliott), when he would get different figures?
    Mr. Smith: The hon. Gentleman is wrong. I had nothing whatever to do with the putting down of the Question. It so happens that my hon. Friend the Minister of State and I do not have a PPS at present.
    Mr. Mitchell: On a point of order, Mr. Speaker. Is it in order for an hon. Member to suggest that a Question was planted when it was not planted?
    Mr. Speaker: Nothing out of order has been said. The hon. Gentleman might

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    consider the report of the Select Committee on this matter. However, let us move on.

    Redundancy Payments Act
    Mr. Meacherasked the Secretary of State for Employment what proposals he has for amending the Redundancy Payments Act.
    Mr. Dudley Smith: The statutory redundancy payments scheme is under review and my right hon. Friend will be inviting views on the proposals which emerge from it.
    Mr. Meacher: Is it not a gross anomaly that a man who is required by his employer to work overtime for 17 hours a week, as a constituent of mine was required to do—a requirement that was not written into his employment contract—cannot obtain redundancy payment under the Act even if it is compulsory overtime? Should not an employer who requires overtime be prevented from escaping his redundancy payments responsibilities by not writing compulsory overtime into the contract?
    Mr. Smith: I know of the hon. Gentleman's concern on this issue. It is one which ought to be taken into account in the review. There is some pressure for average earnings over the previous 12 months to be used as the basis of calculations. There is some merit in that, but it would be administratively very complicated to operate and could also prove to be unfair to employees who were on short time before the redundancy occurred. These are matters which must be considered by the review.
    Mr. Simeons: Will my hon. Friend consider the effect of redundancy payments on small businesses when this matter is being reviewed?
    Mr. Smith: Yes, all these matters will be taken into account. I have no doubt that the present scheme has many advantages, but the extent to which it achieves its objectives and the question whether changes are necessary are matters for detailed consideration.

    Distributive Industry Training Board
    20. Mr. Robert Taylorasked the Secretary of State for Employment whether he is satisfied with the proposals of the
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    Distributive Industry Training Board for the basis of excluding certain firms from the levy/grant system in accordance with the Employment and Training Act 1973.
    Mr. Chichester-Clark: The board is consulting its industry about plans for future operations under the Employment and Training Act 1973 which will cover both the issue of exemption certificates and the exclusion of small firms from levy. Its substantive proposals have not yet been submitted for consideration.
    Mr. Taylor: Does my hon. Friend agree that the initial proposals from that board are completely inflexible, and that it appears that these proposals will not achieve what we in the Committee examining the Bill endeavoured to achieve, namely, that small firms which have been unable to take advantage of the facilities of the industrial training board should be excluded from the payment of levy?
    Mr. Chichester-Clark: As I told my hon. Friend, the board's planning after the passing of the 1973 Act is at an early stage. It is consulting extensively with the industry, and it will probably be some time before substantive proposals are put to the Manpower Services Commission. I know that my hon. Friend has in mind the removal of as much bureaucracy, red tape and form-filling as is commensurate with maintaining pressure for good training in this industry, as in others ; and I support him in that.

    English and Overseas Hotels Limited
    Mr. Dormandasked the Secretary of State for Employment if he will offer to conciliate in the disputes concerning certain persons employed by English and Overseas Hotels Limited.
    Mr. Chichester-Clark: My Department successfully conciliated during the past week in a dispute involving an employee of English and Overseas Hotels Limited.
    Mr. Dormand: May I thank the Minister's officials for the valuable work which they did in the case in question? Is he aware of the unsavoury practices carried out by this firm, such as offering council houses with advertised vacancies when it has no authority to do so from the local authority? Is he further aware of the disgraceful treatment which one of

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    my constituents has had from this firm? He was given three different reasons for his dismissal, but none of them appears to have any foundation. Finally, does the Minister know that the chairman of this firm is greatly lacking in courtesy in not replying to a Member's letters, and in simply referring them to a solicitor whose replies are so brief as to be rude? What can he do about a firm like this?
    Mr. Chichester-Clark: The hon. Gentleman is normally a model of courtesy, but I am quite sure that he is able to stand on his own feet and deal with discourtesy as he meets it. As regards the offer of council houses, I think the hon. Gentleman knows that the company denies having made a promise about council house accommodation. As regards compensation, I understand that the settlement was made by way of an ex gratia payment without any acceptance of liability by the company, and was acceptable to the constituent concerned. I think that I have answered most of the questions of the hon. Gentleman, who managed to get a great many into one supplementary.

    Schoolchildren
    Mr. Charles R. Morrisasked the Secretary of State for Employment whether he will establish a working party to inquire into the rates of remuneration earned by schoolchildren undertaking casual and part-time employment.
    Mr. Dudley Smith: I have no evidence of need for such an inquiry.
    Mr. Morris: Is the Minister aware that, apart from the case of my 15-year-old constituent, who received the sum of £2·50 for over 20 hours' work, there is a widespread problem associated with youngsters who are understandably seeking pocket money from part-time employment and receiving rates of pay which bear little or no relationship to the rates of pay received by adult workers doing precisely the same job?
    Mr. Smith: I do not think that the position should be exaggerated. I shall be happy to look up the case in question if the hon. Gentleman will give me particulars. Where employment is within the scope of wages councils—that is, in most shops, cafés, and so on—minimum rates
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    of pay are laid down and enforced wherever possible. A lot of young people are very keen. The word gets around about the right price for the job and they get it. But there may well be examples of exploitation, and if the hon. Gentleman has particulars of other cases I shall be pleased to see them.
    Mr. Kenneth Lewis: Is the Minister aware that many young people want to do jobs, such as newspaper rounds, in their holidays or in the early mornings and that nothing should be done to disturb this situation?
    Mr. Smith: I agree with my hon. Friend. A lot of young people get satisfaction out of doing a job and, as has been said, get pocket money as well. It is important that that situation should be allowed to continue, but it is equally important that there should not be exploitation.
    Mr. Kinnock: Does the Minister realise that it is impossible to avoid exploitation in these circumstances, when many of the children can get pocket money only by getting up at half-past five or six o'clock in the morning to do jobs which nobody else will do? Also, will he reconsider his answer to my hon. Friend, in view of the vast number of young schoolchildren assisting parents in doing outwork for various small assembly firms, who are losing school time because of that and getting nothing for it?
    Mr. Smith: I am not aware of that difficulty, but I shall look into it if the hon. Member will let me have particulars. But the periodic shortages of newspaper delivery workers indicate that the young people who do these jobs know what is the right price, and they are not slow to reject any offer which is below the rate.
    Mr. Marten: Does my hon. Friend know the attitude of the Post Office Union towards the employment of juvenile labour at Christmastime?
    Mr. Smith: I am speaking entirely off the cuff, but I believe that the union is not in favour of it.

  CHINA (OFFICIAL VISIT)
  Mr. Dykesasked the Prime Minister if he will make a statement on his

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  proposed New Year visit to the People's Republic of China.
  The Prime Minister (Mr. Edward Heath): I have accepted an invitation from the Government of the People's Republic of China to pay an official visit to China from 4th to 12th January. I look forward to having discussions with Prime Minister Chou En-lai on a wide range of subjects of common concern.
  Mr. Dykes: Does my right hon. Friend agree that his visit will coincide with an emergent era of very cordial relations between the two countries, that private transactions are always concluded on fair terms to both sides, and that the opportunities for British businessmen in China—which is the largest market in the world—are now literally monumental?
  The Prime Minister: Yes, Sir. I am glad to say that we have very good, friendly relations with The People's Republic of China. As the House knows, we now have full diplomatic relations, and trade with China is running at record levels. For the first 10 months of this year, our exports were worth £64 million compared with £20 million during the same period last year, and imports were worth £38 million compared with £28 million last year. I think that is encouraging.
  Mr. Stonehouse: What steps will the Prime Minister be taking during his visit to promote exports of British aircraft and British computers, in particular? Also, will he endeavour to ensure that such exports are not frustrated by unnecessary COCOM rules?
  The Prime Minister: I am sure that the items which the right hon. Gentleman has mentioned will form part of the discussions that I shall have with Prime Minister Chou En-Lai about trade. The Chinese have already contracted to buy 20 Tridents and we are naturally hopeful that they may decide to buy more. I think that many in this House know of Chinese interest in other aircraft as well. When we take decisions which are affected by COCOM, we take into account strategic and military matters, as well as discussing them with our allies.
  Dame Joan Vickers: Will my right hon. Friend take this opportunity of thanking the Prime Minister and the
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  Institute of Foreign Affairs for the hospitality generously given to the recent delegation to China? Also, will he arrange for a reciprocal deputation to come to this country in the near future?
  The Prime Minister: Some of the Members of this House who made that journey have discussed it with me, and I shall certainly express their thanks to Mr. Chou En-Lai and the Foreign Minister. I am not certain that it is my responsibility to invite a reciprocal delegation of parliamentarians, but I shall certainly examine the matter.

  SMALL FIRMS
  Mr. Redmondasked the Prime Minister if, when he next meets the Confederation of British Industry, he will also invite representatives of the Smaller Businesses Association.
  The Prime Minister: I do not plan to do so at present. The Smaller Businesses Association is always free to make representations to the Government and it was able to discuss the proposals for stage 3 at the Treasury on 18th October, along with the Association of British Chambers of Commerce.
  Mr. Redmond: Will my right hon. Friend bear in mind that small private businesses and limited companies are very different animals from the big corporations? Does he recognise that there is some anxiety on the part of smaller businesses about possible legislation in the Companies Bill? Will he consider making special provision for small companies in that Bill?
  The Prime Minister: My right hon. Friend the Secretary of State and the other Ministers at the Department of Trade and Industry will certainly consider that point, but I understand that the Under-Secretary of State for Industrial Development, who has special responsibility for small firms, and the Under-Secretary of State for Trade have both had meetings with the Smaller Businesses Association. They will also be meeting the Association on Thursday, and on Friday the Under-Secretary for Trade is meeting the Association of British Chambers of Commerce. So I think that these bodies have every opportunity of putting their views on commercial matters to the

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  Ministers at the Department, including their views on the future Companies Bill.
  Mr. Horam: When the Prime Minister next meets representatives of the CBI will he also invite members not of the Smaller Businesses Association but of the larger property companies? Will he tell them that it is their patriotic duty, as a contribution to phase 3, to accept a sensibly conceived tax on commercial property, since the rewards which they receive for making what are largely tasteless additions to the urban landscape are too great in relation to the rewards received by those in industry—particularly those who work in the bowels of the earth?
  The Prime Minister: I do not think this is a matter with which the CBI will deal. [Interruption.] No, indeed, because matters of taxation are the responsibility of the Government and of this House and not of the CBI.

  CHANCELLOR OF THE DUCHY OF LANCASTER
  Dr. Marshallasked the Prime Minister what special duties he has assigned to the Chancellor of the Duchy of Lancaster.
  The Prime Minister: My right hon. Friend is responsible for the co-ordination of Government policies in relation to the European Communities. He is also responsible for the co-ordination of policy on research and development issues.
  Dr. Marshall: Is the Prime Minister aware that since he appointed the right hon. Gentleman, on 5th November 1972, at an annual salary of £13,000 the Chancellor of the Duchy has made five statements and three speeches and answered only 20 oral Questions? Is the country getting value for money, or will the Prime Minister give the right hon. Gentleman more work to do?
  The Prime Minister: The responsibilities of the Chancellor of the Duchy include many things other than those mentioned by the hon. Member. His attendance is required at the meetings of the European Council of Ministers, along with my right hon. Friend the Foreign Secretary, and on many other occasions in Europe.

  NEW ZEALAND
  Mr. Dalyellasked the Prime Minister if he will seek to make an official visit to New Zealand.
  The Prime Minister: I have no plans to visit New Zealand in the immediate future but look forward to doing so when a suitable opportunity occurs.
  Mr. Dalyell: Is the Prime Minister in a position to convince the New Zealand Government that he is doing everything possible to dissuade the French from continuing their nuclear testing programme in the Pacific?
  The Prime Minister: I did so when I spoke to the Prime Minister in Ottawa.
  Mr. Driberg: Does the Prime Minister recall the great concern shown by a former Prime Minister—Mr. Macmillan—when his attention was drawn to the forecasts by Edinburgh geneticists of the number of babies likely to be born blind or deformed as a result of tests up to that date? Will he say whether any similar research is being done officially here, or in conjunction with scientists in New Zealand and Australia?
  The Prime Minister: I cannot give the hon. Member the information for which he asks. Of course, we monitor, as I have told the House before, all the explosions in the Pacific for any radio-active effects, and we make that information available to New Zealand and Australian scientists to use if they should wish to make further investigations. I shall inquire into the point raised by the hon. Member to see whether figures can be given to supplement those given to Mr. Macmillan.

  INDUSTRIAL RELATIONS ACT
  Mr. Bidwellasked the Prime Minister if he intends to consult the TUC and CBI on alterations to the Industrial Relations Act.
  The Prime Minister: As I told the hon. Gentleman on 22nd November, I am ready to discuss the Industrial Relations Act with the TUC and CBI on any appropriate occasion.—[Vol. 864, c. 1550.]
  Mr. Bidwell: May I remind the Prime Minister that he and the Secretary of State for Employment made it clear that the main pillars of the Industrial Relations Act were not negotiable with the TUC? In view of that, is not the Prime Minister mainly responsible for the united opposition to discussions with the Government? Is he further aware that the public are exceedingly worried about the state of industrial relations, and see the use of the emergency powers legislation as an alternative to decent industrial relations procedure? Does he realise that they are beginning to think the Prime Minister is pig-headed, bordering on wooden-headed?
  The Prime Minister: The hon. Member will not expect me to accept any of those allegations, and certainly not the last. As for the structure of the Act, when I became Prime Minister I invited the co-operation of the TUC on working out the proposals for the consultative document. We then asked for its cooperation on the consultative document, and at any time during the passage of the Bill there could have been consultations, but it was not the wish of the TUC to carry them through. Since the Bill has become an Act I have consistently said, in the many meetings that I have held jointly or separately with the TUC or CBI, that we shall consider any specific amendments which are put to us, but I have also asked that the Act should be given a reasonable opportunity of being worked. [Interruption.] I do not believe that those who refuse to work the Act, who are becoming more and more limited in number, are in a position to point out any weaknesses they believe it may have.
  Mr. Adley: Is my right hon. Friend aware that most people will be glad that my right hon. Friend in no way seeks to be an apologist for the Act. [Interruption.] Apart from those who are obliged to register their vocal protests at it, most people, including millions of trade unionists, recognise already that the Act is doing its best to bring labour relations into the twentieth century.
  The Prime Minister: Yes, and as I have constantly said in the House, more than 15,000 individual trade unionists have used the Act because they considered it right to do so, and many of them did so for their own benefit.
  Mr. Orme: When the Act passed through Parliament, did the Prime Minister envisage the President of the National Industrial Relations Court, at a subsequent date, making public statements about judgments that he passed in the court? What has the Prime Minister to say about Sir John Donaldson's speech last night? Is it to become normal practice that High Court judges go outside their court and criticise decisions that are still open to appeal?
  The Prime Minister: As Prime Minister I cannot be responsible for the utterances of Her Majesty's judges, whether inside or outside the High Court. They must take responsibility for that.
  Mr. Russell Kerr: Tory stooge.
  The Prime Minister: I understand that the judge made a factual statement in order that there should be no misunderstanding about the sequence of actions which followed his judgment.
  Mr. Holland: Can my right hon. Friend the Prime Minister recall any particular benefit derived by the last Government when they accepted the advice of the TUC and abandoned their own industrial relations legislation?
  The Prime Minister: I have often expressed my view about that. If the last administration had carried their legislation through to the statute book the whole attitude towards industrial relations would have been different.
  Mr. Prentice: Will the Prime Minister address himself to an aspect of this case which was ducked by the Secretary of State for Employment earlier today, namely, the gross impropriety of the seizure of part of the political fund of the AUEW in the recent case? Will he acknowledge that this money was subscribed separately by political levies—which are distinct from subscriptions—by ordinary trade union members and was intended for political purposes only? The levies are paid by those members who choose to subscribe them. Is this not a serious constitutional development on which we should hear something from the Government Front Bench?
  The Prime Minister: I am not prepared to make the statement for which the right hon. Gentleman is asking. The court lays down a clear procedure for

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  such cases and it is the court's responsibility to see that it is followed. It is not the responsibility of Her Majesty's administration.
  Mr. McCrindle: I understand my right hon. Friend's position, but if he is to strengthen the hand of moderate trade union leaders would it not be wise for the Government to give some thought at least to outlining which parts of the Industrial Relations Act are negotiable and which are not?
  The Prime Minister: I have done more than my hon. Friend asks, because when this matter has been raised in the talks either by the CBI or the TUC I have said that we are prepared to consider any amendment put forward by them on any part of the Act. I cannot make a fairer offer than that.
  Mr. Loughlin: May I revert to the point put by my right hon. Friend the Member for East Ham, North (Mr. Prentice)? Will the Prime Minister recognise that a serious constitutional issue is involved here? The money that has been sequestered by the National Industrial Relations Court could not lawfully have been used for other than political purposes. Is the Prime Minister saying that the National Industrial Relations Court is a political court and therefore is entitled to sequester £100,000, or is he saying that Sir John Donaldson is above the law?
  The Prime Minister: I am not saying either of those things, as the hon Gentleman knows perfectly well.
  Mr. Loughlin: You are.
  The Prime Minister: I am saying nothing of the sort. It is not a political court, and neither are the judges above the law. What the judge was explaining yesterday was that it was for the commissioners named in the writ of sequestration to determine, at their discretion, the assets to be taken in payment of the fine imposed by the court. That is not the Government's responsibility.
  Mr. Harold Wilson: Since it has been a long-standing constitutional convention over many centuries—indeed, it is enshrined in the Bill of Rights—that proceedings in this House cannot be called
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  into question in any court, how can it be justified that the president of a court, acting and speaking in his capacity as president, should seek to call in question and answer statements made by my hon. Friends which were proceedings in Parliament?
  The Prime Minister: Again, that is not a matter for which the Government are responsible. [Interruption.] I emphasise that. Indeed, right hon. and learned Members opposite have constantly emphasised, quite rightly, that a Government should not interfere with the course of law. As a Government should not interfere with the course of law, they cannot be responsible for Her Majesty's judges, for what they do in a court of law or for what they say in their speeches afterwards. If action is required by Parliament, the procedure is constitutionally laid down.
  Mr. Wilson: Has the right hon. Gentleman, as Prime Minister, no concern for long-standing conventions which have protected this Parliament from outside interference? If he will not give an answer today, will he consider the matter, take advice on it and inform the House of his findings?
  The Prime Minister: Of course I am prepared to consider the matter and ask for further advice about it, but I maintain that if Parliament wishes to take action in these matters the procedure has long been laid down. It is a constitutional procedure, and not one for the Government.

BILL PRESENTED
  INTERNATIONAL ORGANISATIONS (LAND)
  Mr. Secretary Rippon, supported by Mr. John Davies, Mr. Paul Channon, Mr. Julian Amery, Mr. Patrick Jenkin and Mr. Reginald Eyre, presented a Bill to enable the Secretary of State and the Ministry of Finance for Northern Ireland to acquire land for the service in the United Kingdom of international organisations and institutions, and their offices and agencies ; and the same was read the First time ; and ordered to be read a Second time tomorrow and to be printed. [Bill 17.]

  EUROPEAN COMMUNITY AFFAIRS
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Pym.]
  Mr. Speaker: Before I call the Chancellor of the Duchy of Lancaster, I would tell the House that more than 30 right hon. and hon. Members wish to speak in the debate. I hope that those who catch my eye will have some regard for that fact.
  3.32 p.m.
  The Chancellor of the Duchy of Lancaster (Mr. John Davies): I am glad to have this opportunity of a substantial debate on Community matters. The time is well chosen. A vast amount of preparatory work has gone on within the Community to pave the way for many decisions which will have to be taken on Community issues in the near future. I have always held the view that the House has it in its power vitally to affect those decisions.
  We have all read with great interest the report produced by the Select Committee as a result of its painstaking and conscientious study of these questions. My right hon. Friend the Leader of the House has promised that time for debate will be found after a careful review of the proposals, and the Government will then wish to make a positive response to the views of the Select Committee.
  Sir Derek Walker-Smith: Is my right hon. Friend aware that we have not yet had the second volume of the Foster Report, the minutes of evidence? Will he kindly ask my right hon. Friend the Leader of the House to expedite production of that volume so that we have it in good time before any debate, the value of which depends to some extent upon its availability?
  Mr. Davies: I know that my right hon. Friend the Leader of the House has taken careful note of what my right hon. and learned Friend said.
  Today's debate is to cover the whole spectrum of Community activities since we became a member. I know that the House has a particular interest in dealing with questions of regional policy today.
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  I intend to deal generally with the broader policy aspects, and I look forward to hearing my right hon. Friend the Minister for Industrial Development go over the ground in greater detail when he winds up the debate, as well as deal with issues that arise during the debate.
  It is right to outline in broad terms the many major issues now in discussion within the Community. I shall do so under four heads. The first is the internal economic structure of the Community, where the whole question of the common agricultural policy and its future, and regional, social, industrial, scientific and technological, energy, environmental and transport policies are all under constant and urgent consideration ; and where in a wider framework progress towards economic and monetary union is deeply considered. Linked with all those matters are the budgetary impacts of the adoption of those policies within the various fields to which I have referred.
  Secondly, there is the external economic relationship of the Community with the world outside, with both developed and less developed countries, with the so-called State-trading countries and, of course, particularly with countries with which there are special and long-standing links.
  Thirdly, there is political co-operation, the establishment of a European identity in this context and its relationship with the terms of the understandings and relationships between the United States and Europe, its relationships with the whole question of détente, particularly in the light of the Conference on Security and Co-operation in Europe, and, most recently, its relationship with the Middle East.
  Fourthly, there is the evolution of the Community institutions—the Council of Ministers, the Commission, the Economic and Social Committee and the European Parliament. There is now also the place of Summit meetings within the framework of the development of the Community.
  The House will appreciate that to cover in depth all of that enormously wide range of matters within a speech of reasonable length is not practicable. Therefore, I shall concentrate on what seem, to me at least, to be the central issues.
  First, I have an observation to make. If the rate of progress in the Community

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  were attained in the development of policies in a single, old-stablished nation State, it would be reasonable to evince some disappointment. But in a new community of nine sovereign States, with all their deeply ingrained habits and attitudes, and in circumstances in which change can be attained only through consensus between them, the progress is little short of astonishing. Obviously, I speak particularly of the period since we became a member. We must constantly bear in mind that even a detailed technical issue such as the classification of wine applies to a population of more than 200 million and seeks to achieve a unified approach after, in many cases, centuries of fragmentation between the individual countries.
  I shall speak first of the common agricultural policy. It is common ground between both sides of the House that it was not devised to meet our particular needs. Nevertheless, both parties in their respective applications for membership recognised that acceptance of the fundamental provisions of the policy constituted a sine qua non of membership. In fact, helpful provisions have been made this year to meet the problems we have had with a floating pound, for instance. There have been payments from Community funds to safeguard the consumer against at least some of the effects of rising import prices.
  There have been other helpful steps within the framework of the common agricultural policy, such as the butter subsidy. Despite all the fears, despite all that was said last year, butter is substantially cheaper today than it was a year ago, as far as prices generally are concerned—
  Mr. Eric Deakins: What about meat?
  Mr. Davies: I will deal with meat and other foodstuffs.
  Devastating as has been the effect of world prices upon our living cost, the fault does not lie with the common agricultural policy. On the contrary, the world market generally has seen a vertiginous price rise which we should obviously not have escaped had we not joined the Community. Our original estimate was that adapting to the CAP over six years would involve us in increases in
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  food prices of about 2 per cent. per annum. I see no reason to change that estimate. It is worth noting that since we joined the Community the increase arising from our adapting to the CAP has been only half of that.
  We have under review proposals from the Commission for alterations in the CAP to tackle some of its less satisfactory features—to avoid, for instance, the creation of senseless surpluses, to limit the cost of the CAP and to provide tighter checks on disbursements of Community money, and to take the consumers' interest more and more into account. The Commission's proposals to those ends will want a great deal of study but they are pointed in the right direction. We shall seek to ensure that this should not be a once-and-for-all effort but the first of a series of careful and sensible reappraisals.
  Mr. Neil Marten: Can my right hon. Friend tell the House—this is important—why the Government are to put an 8 per cent. tax on imported lamb on 1st January? Will he say what the Government are doing to try to avoid imposing that tax?
  Mr. Davies: The Government are anxious to ensure that the effect of any measures which they may be led to take will not worsen the food prices situation. I know that my hon. Friend the Member for Banbury (Mr. Marten) has already raised the matter with my right hon. Friend the Minister of Agriculture, Fisheries and Food and that he has had his reply.
  I now turn to regional policy. We must remember that the Community treaty specifically enjoined members to take steps to rectify regional disparities. The Summit meeting of last year took that a great step forward in setting down precise objectives to an exacting timetable. That is a timetable which has been respected exactly. We are therefore looking forward with confidence to the creation of a regional development fund by the end of the year of a substantial size with inbuilt regular growth. I must be right in assuming that on both sides of the House there is a deep wish that such a fund should be instituted. I hope that that will be so. It would surprise me if it were not.
  The details of the Commission's proposals have already been made available.

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  I am sure that hon. Members know what they are.
  Mr. George Cunningham: Will the right hon. Gentleman give us some indication of the net amount by which Britain could expect to benefit from a regional fund—namely, what we might expect to receive in excess of what we contribute to balance the reverse flow from agriculture?
  Mr. Davies: I very much hope that I shall be able to give the hon. Gentleman a clearer reply to that matter in six weeks' time when the matter has been negotiated. At the moment he asks me to make an assessment of something on which there has not been substantial negotiation and discussion within the Council. I am, clearly, not able to reply to the question. I have no doubt that it will be substantial.
  Mr. Michael Foot: Will the right hon. Gentleman tell us when he will tell the House the proposals of Her Majesty's Government and precisely what Her Majesty's Government will ask for in the discussions on regional policy?
  Mr. Davies: Perhaps the hon. Member for Ebbw Vale (Mr. Foot) will allow me to get on. He may hear some of the things which we hope to be able to say. It may be that we shall wish to see a fund which is larger in total size and greater in growth than that proposed by the Commission. It may well be that we shall be asking for changes in the definition of areas to be helped and in the form and extent of individual project assistance. However that may turn out, it would be entirely ridiculous to suggest that what we have in front of us now is an insubstantial proposition framed on unrealistic criteria. We may want changes, but that does not imply that the proposals which the Commission has already made are ineffective or superficial.
  Mr. John Wilkinson: My right hon. Friend has referred to the size of the Commission's proposals. Will he ensure that Her Majesty's Government argue that there shall be Community assistance for all the existing intermediate areas and, in particular, Yorkshire and Humberside?
  Mr. Davies: The exact criteria by which the individual areas will be defined
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  is a matter about which the Government will have something to say. It is more the general criteria rather than the specific selection of individual localities with which the Government will be concerned.
  In another domain of regional policy, we must, I feel sure, be well satisfied with the position which we have reached on the Community control of national aids. A large part of our country and population has already been recognised as being in need of regional support. Given the fact that our national wealth has not risen as fast as our neighbours', we have an obvious interest in seeing that we are not consistently outbid in the search for investment. A valid form of Community control of such outbidding is clearly important to us. We now have the assurance that the Commission will table by the end of next year a new scheme which will take account of the problems of new Members. That is highly satisfactory. No less satisfactory is the fact that until the scheme has been agreed we are free to maintain our existing far-reaching and ever more effective national regional policies.
  I now turn to social policy. Before we joined there were already schemes devised both by the Economic Community and by the Coal and Steel Community to assist members in the retraining and resettlement of workers who became redundant. We have secured an increase this year in the budgetary provision made for these purposes and there will be a greater increase for next year. We have put forward our claims against the funds, and there have been helpful reactions.
  Britain's share of the coal and steel funds should amount to about £7 million over the next five years. That is not a staggering sum, but a real contribution. It is directed to specific people and projects. It is not a contribution of a blanket or general kind. Only this weekend the Commission approved grants in favour of those affected by the closure of Round Oak Steelworks Ltd., for the workers at Colsterworth Iron Ore Quarries and for the families of victims of the mining disaster at Markham mine in Duckmanton, Derbyshire on 30th July. Those are specific and direct grants.
  We have made a claim of £31 million on the Economic Community's fund. Of that, more than £19 million has been

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  recommended as a first priority, which means that we shall get it in total. Of the remainder, which includes our bid for help for handicapped people, we seem likely to get a substantial part. Proposals of a more general nature have now been put forward in the area of social policy for the adoption of common practices throughout the Community for handling acute problems at the place of work—for example, problems of safety and health and discrimination against women. We are taking a close look at the proposals which the Commission has put to us. The matter will come up for discussion on 10th and 11th December at a meeting of Ministers.
  I turn now to industrial policy. In its widest sense industrial policy involves the thousand and one steps necessary to turn a customs union into a common market. For example, there is the elimination of obstacles to trade, be they of a technical or administrative kind, the harmonisation of commercial law and practice to allow unfettered operations to all Community-based concerns, the assistance of particular industries playing a vital part in the Community's productive life but faced with special problems or immense development costs, such as the aircraft industry or computers, and the freeing and encouragement of the Community capital markets. This is a vast and complex field of work which hitherto has defied both the Community's will and its ingenuity. But now we have before us the framework of a programme of an orderly and, I believe, attainable kind to cope with this Herculean task, and it is expected to come before the Council of Ministers next week.
  As for the customs union itself, we have seen some tariff reductions already. There will be more on 1st January next, and the tariffs will be abolished in three more stages over the next three and a half years. I know that the common tariff is not generally very high, but some of its individual rates are. I will instance one or two rates which will be abated over this transitional period. There is a 24 per cent. tariff against British carpets ; 22 per cent. against commercial vehicles ; between 17 and 23 per cent. on pharmaceuticals ; 18 per cent. on tractors ; about the same on organic chemical and plastics ; and 16 per cent. on toys. In all these cases, abatement of the tariffs will
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  be of vital importance to our industries concerned.
  Mr. Arthur Lewis: It has not worked so far.
  Mr. Davies: It is a matter of fact that our exports to the Community this year have been at an all-time high and greatly in excess of our exports to the rest of the world.
  Mr. Peter Shore: If the right hon. Gentleman is to make that kind of point, he must say what the imports are from the Six, otherwise it does not make sense.
  Mr. Davies: I was responding to the exclamation of disbelief from the hon. Member for West Ham, North (Mr. Arthur Lewis). I instanced the fact that he happened to be wrong.
  Mr. Douglas Jay Mr. Douglas Jay (Battersea, North)rose—
  Mr. Davies: If the right hon. Gentleman will excuse me, I will get on. You, Mr. Speaker, have made the point that many hon. Members wish to speak.
  Our share of the market in the Six is a small share of a very big market, despite the excellent export figures to which I have just referred. We still supply only one-third as much as Germany of the total imports of the Community and only half as much as France. There is now real opportunity to increase our share very substantially as these tariffs get abated and as the non-tariff barriers are eliminated.
  In this work, there is no question of harmonisation for harmonisation's sake. The Commission and every member State have universally made their position abundantly clear about that.
  Mrs. Barbara Castle Mrs. Barbara Castle (Blackburn) rose—
  Mr. Davies: Will the right hon. Lady please allow me to get on? There is little time and, inevitably, I have rather a long speech to make. I am sure that she will have a virtually certain chance of catching your eye, Mr. Speaker, and that she will make an admirable speech on the subject.
  Where some valid purpose of a major kind is at stake in reducing or unifying procedures in the Community, every effort will be made to find a solution, but there

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  can be no question of pursuing harmonisation for its own sake. The concept of Euro-beer or Euro-bread is not going to be pushed down the European throat on a "like it or lump it" basis. A Community in which everything is either obligatory or forbidden is neither our aim nor our desire. Nor, in this context, is it right to consider the Commission as a kind of bureaucratic giant. It is, on the whole, a remarkably small group of people to undertake the work that it does, its understanding of the realities of the problems it faces is exceedingly deep and the work it puts in front of the Council and the Parliament is of an exceedingly well-reasoned kind.
  Mrs. Castle: Will the right hon. Gentleman give way now?
  Mr. Davies: If the right hon. Lady insists.
  Mrs. Castle: I am obliged. This is our only opportunity to try to establish detailed points. How does the right hon. Gentleman reconcile what he has said about there being no harmonisation for harmonisation's sake with the Common Market directive designed to change the conditions in which we sell poultry on our own home market?
  Mr. Davies: That directive was instituted before we became members. Secondly, it is directed towards a purpose which perhaps has some basis of sense, ensuring that there is health in the food we eat.
  Mrs. Castle Mrs. Castle indicated dissent.
  Mr. Davies: If the right hon. Lady is so anxious to raise this point, she has a means of doing so. I have answered the issue as it is.
  If there were time—and you, Mr. Speaker, have said that there is so little—I should have liked to discuss many other aspects of Community life in terms of its own internal economic structure, but many hon. Members wish to speak and I do not want to take up too much time. I should, however, like to say something about energy policy, which plays a rôle of ever-increasing importance in our lives.
  The scene here is changing so rapidly and with such unpredictable effect as to
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  make the adoption of common policies extremely difficult. The Commission has presented us with proposals on both the concerting of policies within the Nine in general and on the handling of the kind of emergency situation which has so suddenly and recently developed. Events outside the Community are of a kind to make both aspects uncertain. The will, however, is certainly there to find common objectives and common methods of attaining them, and this is perhaps the most encouraging factor in what is otherwise a very dark and perplexing scene.
  It is more and more accepted that the pace of achievement of what is called economic and monetary union, which was firmly projected for 1980 at last year's summit meeting, is conditioned by the progress achieved in the many other economic fields to which I have already referred. The institution of a relevant and effective regional policy, the progress towards greater social unity, the completion to time of the varied and critical changes in industrial policy, all have a very direct bearing on the movement forward to economic and monetary union.
  At the same time, there are obviously facets of that objective which require specific measures to be adopted by the Community. Means for the better assessment and correlation of the individual economies of the Nine, methods of inter-Community support, both economic and monetary—these and others need to be recognised and provided for if the aim is to be realised.
  Nor are the various measures themselves necessarily to be implemented in any strict sequence. We for our part are very sure that a second package of measures towards economic and monetary union needs to be added to the one already existing when we joined the Community. We believe firmly that yet another and probably still more elaborate package will need to be prepared by the end of 1975, when the summit meeting requires that we should take a new major step leading directly to economic and monetary union by 1980.
  As far as we can see, the Commission and the other member States more and more view the problem in the same light as we do. It seems likely that by the year end we shall have taken a further

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  step in this very complex matter, and a step closely in harmony with our own views.
  Finally, in this area of the internal development of the Community, I want to say something about the budget as it affects us. The net result for 1973 looks like being a cost of about £90 million, greater than the £65 million estimate at 1972 prices in last year's White Paper on Public Expenditure, but less than the original 1971 estimate. In 1974, the figure looks like turning out somewhat less, if anything, in net terms than in 1973.
  Beyond that we move into periods where the figures are bound to be less certain. The fact that there is a net cost at all can come as no surprise to hon. Members on either side of the House. Both the Opposition and the Government, at the time of their respective applications, fully realised and accepted that, apart from the major issues of the added political weight and security which membership might give us, the primary economic objectives were ones of obtaining through membership larger markets, increased production and higher investment and thereby greater national prosperity.
  All of these factors are present in our economy. [Interruption.] The right hon. Member for Stepney (Mr. Shore) says "Huh." [Laughter.] That was the best way in which I could render the extraordinary noise which came across from the Front Bench opposite. We have larger markets, we have increased production, we have higher investment and we are getting greater national prosperity. I do not know how he can say otherwise. I am not suggesting to the right hon. Gentleman that Community membership is responsible for all of those. What I am clear about is that without Community membership and the opportunities it offers the constant movement in this direction would certainly not be present.
  The Commission has forecast that Britain's growth this year will be the highest of any country in the enlarged Community.
  Mr. Arthur Lewis: What about the cost of living?
  Mr. Davies: The hon. Member mentions the cost of living. He is on
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  dangerous ground. The OECD figures do not show Britain to be in a bad posture in relation to its continental neighbours. Far from it.
  Mr. Arthur Lewis: Tell the housewives that.
  Mr. Davies: I am telling the hon. Gentleman that. Our exports to the Community are rising even more sharply than to the rest of the world. The CBI trend survey published on 1st November said that our expectations about export deliveries are the highest since those surveys began. Manufacturing investment is expected to rise by about 6 per cent. this year and 15 per cent. in 1974.
  The position about inward investment is less clear because the Government do not receive all the details about it. What we do know is rather encouraging. We already know of decisions taken by 140 foreign-owned firms which have decided so far this year on new projects or the expansion of existing ones. These expansions entail the creation of about 25,000 jobs. These are real gains which will be progressive and cumulative. Perhaps I might develop this a little.
  Mr. Martin: A week ago we had the answer that 39 firms from the Common Market were involved in new projects or expansion. The figures my right hon. Friend has given obviously relate to countries throughout the world. What have they got to do with the Common Market?
  Mr. Davies: My hon. Friend has, clearly failed to take one of the central points, that the existence within the Common Market of this country makes it a great magnet for such development. I have simply to refer to the case in point which will satisfy my hon. Friend. There is good evidence of developments of this kind.
  I recently had the opportunity of making visits to a number of our developing areas. The messages I received—and I listened throughout these visits rather than talking—have been encouraging. In the North-East unemployment is still well above the national average but it is dropping fast and there are substantial orders for the three major shipbuilding firms. A total of 150 successful applications for selective assistance under the Industry Act have been made in the North-East,

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  amounting to about 12,500 jobs. Job vacancies are up from 8,000 to 20,000.
  On Merseyside, inquiries by prospective investors more than doubled this year. In Wales there is a positive queue of manufacturers waiting to build on reclaimed derelict land. To satisfy my hon. Friend, I instance the new Hoover project, which, together with correlated expansion in Scotland, entails 6,000 jobs.
  In Northern Ireland the number of inquiries from companies interested in locating or expanding is at a record level, with nine companies from Germany alone already in business there. In Scotland investment intentions are at an all-time high, and actual decisions to set up or expand in Scotland have been taken by 30 foreign firms in the first six months of this year, entailing 6,000 jobs.
  Mr. Leslie Spriggs: In view of the statement the right hon. Gentleman has made about the change in the balance of trade with our European partners, may I ask whether he is able to say what the balance of trade figures are in relation to those partners and what is the financial position?
  Mr. Davies: I am seeking to deal with investment. I am establishing the fact that against many of the doubters' feelings the trend of investment moving into this country from abroad is on a rapid up turn. This is extremely attractive. [Interruption.] I hear my hon. Friend the Member for Banbury talking about "peanuts ". I do not think that the creation of 25,000 jobs is peanuts.
  Mr. Marten Mr. Marten rose—
  Mr. Davies: No, I will not give way.
  Mr. Marten: My right hon. Friend has misrepresented what I said.
  Mr. Davies: I do not think so. I have not pretended, and I do not do so now, that all these improvements are the direct result of Common Market entry. A lot of them are. A lot of them are much encouraged by the prospect of this large market, access to which is every month and every year becoming easier and more fruitful. Some people say so quite clearly. I mentioned the Hoover project. Hoover make no secret of the fact that it would not have made the installations
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  in Wales and the correlated improvement in Scotland if Britain had not been a member of the Community.
  The second area of Community activity to which I wish now to turn is that concerned with economic relations with the rest of the world.
  Mr. Deakins: The right hon. Gentleman has said a great deal about exports to the Common Market and inward investment from the Common Market, Can he say a few words about imports from the Common Market and outward investment in the Common Market?
  Mr. Davies: I say, in response to the hon. Gentleman's inquiry, that this month the level of imports has been very high. The level of imports is not a matter for deep concern because the truth is that we are at the moment at that point in the industrial cycle when the draw-in of imports is high. That does not perturb me. What encourages me far more is seeing the obvious competitiveness of our own capacity to produce and the obvious ability to sell our goods in competition with anyone in Community markets. This seems by far the most important point.
  As for our investment in the Community, that too has moved forward faster. I can see no cause for dissatisfaction there. The truth is that our foreign investments have always constituted the great redeeming feature against our general negative balance on direct trade. It has been the pattern of this country for centuries. There is nothing surprising or disquieting about that.
  Mr. Jay: If the right hon. Gentleman wants to be taken seriously on this question of trade, will he tell the House honestly that this country's visible trade deficit with the EEC Six in the first nine months of this year was about £750 million?
  Mr. Davies: I have just admitted freely that our level of imports from the Community is very high. I do not find that disquieting. I find it entirely normal in our present circumstances.
  I want to talk now about our economic relations with the rest of the world. As for the major trade negotiations within the framework of GATT, which opened in Tokyo in September, the facts are that

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  the Nine did reach, despite many doubts, a common opening stance which was certainly not a negative one. It proved possible to agree a universal approach to these problems with our trading partners, and work has started in Geneva on the arduous business of establishing the machinery upon which the actual negotiations will take place.
  Of course I am concerned to see President Nixon's Trade Bill delayed in its passage through Congress but I am hopeful that it will be enacted by the time that the machinery to which I have referred has been set up and that there will not be any delay in getting down to negotiations.
  Without indulging in any self-approbation for this country, I think it is fair to say that without British membership of the Community we should not have got as far as we have in this sphere. Moreover, a failure to make progress would have been intensely damaging to our national interests, particularly as a non-member. I said something on these lines to the right hon. Member for Battersea, North (Mr. Jay) only last week, and I can only repeat that it is correct.
  As to the Community's dealings with the developing world, it will be remembered that the Summit put a particularly clear target before us. I believe that we are in the course of attaining it.
  We are in active negotiations for an all-embracing agreement of association to give real benefit to the countries of Africa, the Caribbean and the Pacific where we all feel that we have deep-seated and long-standing responsibilities.
  Our British objective has been as far as possible to bring in all the Commonwealth countries concerned and to ensure that a single basis of association is acceptable to all.
  We now have more than 40 countries involved, covering vast disparities of population, national wealth, economic development and, of course, location. They are all speaking to the Community with a single voice and are, clearly, bent upon reaching a single basic agreement. Nothing could be nearer to our hopes and endeavours in this sphere.
  A special and, to us, dominating issue in this series of discussions—I come to the question raised by the hon. Member for West Ham, North—is that relating to
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  sugar. We have given our word that a home for 1·4 million tons a year of raw cane sugar will be found in the Community, and to that word we adhere. This is the figure that Commonwealth producers see as vital to their livelihoods, and we are confident that our partners in the Community accept that that is so.
  Allied to it, of course, is the major question of maintaining a supply on terms which are reasonable for our port refiners. We believe that the confirmation of our undertaking to the developing Commonwealth takes us a long way in assuring a future for the port refining industry. I know that that industry must face changes.
  Sir Robin Turton: Will my right hon. Friend make clear that the Government will fight for adequate refining margins on cane sugar so that the 1·4 million tons can be refined here?
  Mr. Davies: Yes. My right hon. Friend the Minister of Agriculture has already proved his determination to achieve this end. My right hon. Friend will doubtless have seen proposals made by the Commission which go a long way towards ensuring what he seeks.
  Mr. Arthur Lewis: I am grateful to the right hon. Gentleman for dealing with this matter, because it affects my constituents. We all hope and appreciate that the Government and the Minister of Agriculture are putting up a fight. But, if the Government and the Minister fail and there is any breakdown, do we have the right to veto and will the Government give a pledge that they will use the veto?
  Mr. Davies: In the words of Lady Macbeth, the hon. Gentleman says "Should we fail." We shall not fail.
  Mr. Arthur Lewis: In the event, will the Government give that pledge?
  Mr. Davies: The question is purely hypothetical. I do not propose to reply to it.
  The sugar industry is undoubtedly facing, and would in any event have faced, major changes. It is up to the industry to create the new organisation that it needs to meet those changes. My right hon. Friend the Minister of Agriculture has already made clear that the

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  Government are ready to assist in all ways they can to try to bring about effective reorganisation.
  In still wider terms the Community's relationships with the developing world are being actively pushed forward. The framework of a wider aid policy is being hammered out. An important agreement with India is on hand. Another will follow shortly with Brazil, and one with Bangladesh is not far behind.
  Proposals for a revised generalised preferences scheme for the Community represent a step forward by the Nine to facilitate exports from developing countries to the Community. We shall be pressing even more strongly next year for further liberalisation, particularly relating to Hong Kong.
  New agreements and arrangements are also in train for the Community's relations with our Mediterranean neighbours and the State-trading countries of the East.
  In any review of Community activity, political co-operation is an essential and crucial element. The very concept was little more than in embryo at the time of our accession. Today, 10 months later, the change is indeed startling. We are not only well along the road to agreeing and defining the basis of our European identity, but we are in the course of establishing a clear declaration, in the light of that identity, of a new understanding of our relationships on a transatlantic basis. It is neither easy nor comfortable to achieve such a rearrangement or restatement. But what major advance in international relationships is?
  The description of the basis of our European identity will not only prove a powerful foundation in discussions with our American friends and allies, but will be of equally great value in our dealings with, for instance, Japan and in the whole sphere of détente. It has already proved of great value in terms of the establishment of a joint Community position among the Nine at the Conference on Security and Co-operation in Europe.
  What of the Middle East? The fortunes of Europe are inextricably bound up with those of the Middle East. Faced once more with an onset of war and bloodshed, the Community tried to find a common purpose in the teeth of an ancillary problem of extreme seriousness
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  —the use of the oil weapon. The fact is that the Nine did find a common purpose and, despite everything that has been said, have stuck to it. That purpose is to work in whatever way they can to secure a fair and durable peace. There is no doubt that the Nine are working well together to this important end. Despite anything to be read in the Press or elsewhere, I assure the House that I detect no tendency for the Community to crack up on this issue.
  Mr. Dick Taverne: I appreciate what the right hon. Gentleman and his colleagues are trying to do. How does he reconcile his remarks and aims with the purely national attitude adopted by the Government over the pooling of oil reserves? Secondly, how does he reconcile what he said about political unity with promoting a conference of Finance Ministers which has not included, and, indeed, has not been notified to, the other Community partners and which apparently has been considerably resented?
  Mr. Davies: On the first question the hon. and learned Gentleman is wrong. It was understood and accepted within the Nine, after major discussions on the subject, that the handling of the oil problem should be carried out in the most discreet way possible, that it should not be dealt by any major statement on pooling, and so on, which was not necessary. Therefore, he is not correct in what he said.
  As to the Finance Ministers' meeting over last weekend, I would simply recall to the hon. and learned Gentleman that the whole sphere of international monetary revision, which was the subject of the meeting, is being dealt with by individual countries. The Community as such is not as yet the spokesman for the Nine. Therefore, it is not abnormal for the five countries, which are very much in the forefront of the discussion, to meet and discuss the problem.
  Mr. Neville Sandelson: Will the right hon. Gentleman be more specific about what the Eight are prepared to do for Holland if that country should be denied oil directly by the Arab States?
  Mr. Arthur Lewis: We must wait to hear what the Arabs say.
  Mr. Davies: The Nine made it abundantly clear that they plan to keep in close consultation with one another. Beyond that they are not prepared to try to develop long discussions in public about subjects which as yet are simply not practical.
  Lastly, I should like to speak about institutional developments in the Community to meet the challenge of these many new and wider tasks.
  Little more than two weeks from now the Heads of State and Government will meet in Copenhagen for a Summit meeting, but of a totally new kind. This will be the first of more regular new meetings to give Community affairs the impetus, in both the political and the economic spheres, that only the Heads of State can give.
  The Council of Ministers is in some respects an international negotiating body where agreement is painfully hammered out from contrasting views and interests. The Summit meeting will try to see the enterprise as a whole and seek to give it direction and form. In the short time that we have been members the need for such direction and impulse has become more and more manifest. The Council and the Commission have already improved their working methods, and will continue to do so. But there is a need for this continuing impulse from the people who carry the primary responsibility in the States concerned.
  Both the Council and the Commission have agreed with the European Parliament on improvements in their relationship and methods of work. As for the Parliament itself, it is proposed that it should achieve additional budgetary powers next year to reinforce those that it will attain by previous agreement in 1975. Its progressive accumulation of real power is generally seen by the Community countries, and certainly by ourselves, as the right way forward. The Community treaty demands that the Parliament should in due course be directly elected—and this will come. But it will come the sooner if the Parliament is seen to have wide powers and to exercise them wisely.
  The Community of which we are members is moving steadily forward. It may seem ponderous at times, but who is to wonder at that? It has a population of the size of the United States of
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  America or of the Soviet Union. It produces a quarter of the world's gross national product, and it holds substantially more than a third of the world's current reserves. It is by far the largest trading unit in the world, handling 40 per cent. of global trade. It is moving upwards towards the United States as a granter of aid, and absorbs twice as much of the developing world's goods as does the United States. It is an enormous enterprise, and one in which we play a vital and important rôle. We should play that rôle with pride.
  4.22 p.m.
  Mr. Peter Shore: We have had a number of debates on particular Common Market policies, the most recent of which dealt with sugar. This debate is the first we have had on the broader issues of the Common Market since the Paris summit in October 1972. It is also the first we have had since the Labour Party Conference overwhelmingly reaffirmed its policies of fundamental renegotiation and of referring the whole issue of membership to the British electorate.
  Today's wide debate has opened in a pretty depressing way. The right hon. Gentleman the Chancellor of the Duchy of Lancaster made a speech which I can only describe as complacent and almost completely unconvincing. The truth is that this debate is taking place against an exceedingly sombre background, a background of manifest crisis here in Britain and against a background of crisis both inside the Community and in the Community's own relations with the outside world. This debate takes place—and this is why it has a certain degree of urgency—immediately preceding a whole series of important and possibly decisive meetings of Common Market Ministers beginning on 3rd December and culminating in the Heads of State Summit in Copenhagen on 14th December.
  Although it is right that the House should have an opportunity for a general debate at this time—and the width of matters covered by the right hon. Gentleman in his speech suggests that this is so—so that we can examine and discuss the broad direction of Government policy and make our own suggestions for the future, it is an unsatisfactory situation that no time has been found for a debate on the many specific matters,

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  and on firm proposals to approve or disapprove of them, which are now reaching the point of decision in Brussels.
  It is the Government's wish, and it is part of the Community's timetable, to agree this month, in time for 1st January, matters so large and various as a common regional policy, the outlines of proposed changes in the CAP the new generalised preference scheme which we are to adopt in our trading with the third world, the new taxes and tariffs on imported foodstuffs which, failing the most vigorous opposition by the British Government, will come into effect on New Year's Day, and, in addition, the whole complex of measures which fall under the provisions of economic and monetary union, the second stage of which is due to begin on 1st January.
  Mr. John Davies: I would ask the right hon. Gentleman, in fairness, to include in that catalogue the abatement of tariffs between ourselves and Community countries, since that abatement will have a profound effect upon our welfare.
  Mr. Shore: I willingly add the scheduled reduction of the internal tariff between Britain and the EEC which is part of the continuing process over the five-year period. Although we should have liked to concentrate on regional policy—and I understand that the right hon. Gentleman the Minister for Industrial Development will give particular attention to that matter when he replies to the debate, and I shall have a number of things to say about regional policy—it seems to me that it would be wrong in face of the massive developments which I have just described even to attempt to limit the debate as the Government first wanted to do. That was why my right hon. Friends and I have tabled an Early Day motion which, although we appreciate that we cannot vote upon it, will give the House a clear-cut indication of our common direction and thinking in relation to these issues. It will be seen that that motion emphasises that our membership of the EEC lacks the consent of the British people, notes the need for a fundamental renegotiation of terms of accession and calls or the Government not to agree any further steps for the establishment of an economic and monetary union in Western Europe.
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  I have referred to the manifest crisis which is now being experienced by the British economy—a crisis which is directly linked to our membership of the EEC. Just how serious and adverse the impact has been is not, I believe, fully grasped on either side of the House or by the public outside. I shall not on this occasion refer to the inflationary impact on Britain's whole food and other goods price structure which has followed from our membership of the EEC ; nor shall I deal with the net effects of flows of money and capital investment—though I hope that my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) will deal with this topic later in the debate—which have been grievously disadvantageous to this country, entirely contrary to what the right hon. Gentleman said.
  In terms of trade, the effects have been little short of disastrous. In the first 10 months of this year—and let us get the facts right—our crude trade deficit with the EEC totalled £942 million. On the basis of the first 10 months of trading, it will not be much less than £1,200 million by the end of this year. This compares with a deficit of £499 million in 1972 when industrialists on both sides of the Channel were making their special anticipatory effort in advance of the first reduction of the tariff between Britain and the Six. This compares with a 1971 deficit of £180 million, and with a 1970 deficit of £18 milion. Our experience of the first two years of the Treaty of Accession, signed on January 1972, has been a visible trade deterioration of almost exactly a thousand million pounds. I cannot understand how the Chancellor of the Duchy of Lancaster can be so complacent when he examines the commodity input in terms of that deficit. He waves it away as though it were a matter of no importance, and his attitude is beyond belief. It is not even a matter of world prices—for these happen to be European prices.
  I do not overlook the disastrous mishandling of the economy by the Government, and in particular by the Chancellor of the Exchequer. There has been a general import-led boom into Britain, but no one can argue now, at any rate, that we can take for granted the benefit of an enlarged home market of 250 million consumers or that this can be a solution to all our problems. In any event, Lord

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  Stokes does not think so any more. Those who recall his full-page advertisement in the national Press almost two years ago urging Members of Parliament—and their constituents to support them—to vote "Yes" to the Common Market so that British Leyland could enjoy unimpeded growth in the larger domestic market there will have been struck by the very different message which he has put out in the past month or so. Now, apparently, British Leyland is strangled by Commission red tape. Now British Leyland needs a breathing space with import restrictions so that it can fight off the fierce competition which it is meeting. Certainly it is no coincidence that Britain's first year of membership is also the year in which we have become net importers of motor cars for the first time in our history.
  I have stressed the trade figures because it is only if Britain's trade benefits by European Community membership that we can even contemplate the growing cost of imported Continental food and the heavy burden of our contribution to the EEC agricultural budget which we are pledged to make under the Treaty of Accession. The Government know this as well as I do, and the near collapse of our trading position with the EEC must be to them, as it is to the Opposition and to the whole House, a source of dismay.
  Mr. Marten: Sometimes it is said that invisibles tend to lessen the trading deficit. In the case of the Common Market, when last the invisibles into the Community were broken down, our deficit in 1971 with invisibles was £286 million. Presumably something has to be added to the figure of £1,000 million-odd.
  Mr. Shore: I should like to see the whole position with invisibles separated from visibles, and the full official figures on net capital movements as well. But I do not think that we shall find other than the grave picture which has emerged and a trend of developments which is extremely worrying.
  It is the fact and the extent of this deterioration which add a special urgency to the common regional policy which I gather is again to be discussed on 3rd December and to the possibilities of changing the common agricultural policy, discussions on which are to be resumed on 10th and 11th December.
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  In the past whenever we have drawn attention to what we believe to be the appalling terms of the Treaty of Accession the Government have claimed that once we were in the Community we should be able to persuade our EEC partners both to make major changes in the CAP and to institute a generous regional policy, the effects of which would be largely to counter in our interests the admitted adverse effects of Common Market ownership. I always believed that this was largely wishful thinking, and I believe that the moment of truth is rapidly approaching.
  I deal first with agriculture and the reform of the common agricultural policy. The moment for changing the CAP arose when the negotiations were opened at the GATT and the Community had to draw up its joint negotiating position for these very important talks. Here I read from the Community's document which was agreed in May of this year that it was agreed that the Community
  "… faithful to the guidelines laid down for its own development and to its own responsibilities, will take part in these negotiations on the basis that those elements basic to its unity, that is, the customs union, and its common policies, in particular, the CAP, cannot be called in question."
  We know, because it has been reiterated, that neither the coverage of the CAP nor the mechanisms by which it is supported—especially the levies and intervention within—are up for negotiation with the United States and other nations with whom we shall share a common interest in the forthcoming GATT talks.
  I refer now to the statement which the Minister of Agriculture, Fisheries and Food made to this House as recently as Thursday of last week. I must say that the internal review of the CAP which the Common Market has embarked upon does not give one a great deal about which to be hopeful. I have no doubt that the right hon. Gentleman will do his best within the limitations of the terms of reference of the study which has already been initiated. Unhappily the terms of reference of that study do not allow any more than in the external relations in GATT for any major or fundamental reform of the CAP.
  The House will recall that I asked the right hon. Gentleman whether he

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  had thought it right to suggest that certain commodities covered by the CAP might be withdrawn from that protection. I had in mind especially tropical commodities such as rice and sugar where there is an overwhelming case for withdrawing the protection of the CAP, in the interests not merely of this country but of countries far less advantaged than ourselves. The right hon. Gentleman admitted that he had not thought it right to raise the subject. It is fair to say that the right hon. Gentleman told the House that it was not in his view a possibility because our partners in the EEC would not accept it. I respect the right hon. Gentleman's judgment in this matter. However, it is clear now that no far-reaching changes of the CAP can be envisaged by negotiation from within, and that is the major factor of which we have to take account and to consider in relation to the appalling trade deficit which has emerged.
  The Minister for Agriculture, Fisheries and Food (Mr. Joseph Godber): I am grateful for what the right hon. Gentleman said. But the objective of both sides of the House naturally would be to keep down the cost of the common agricultural policy, and the right hon. Gentleman will readily appreciate that the commodities which are mostly concerned here—milk, cereals and olive oil—are all covered in the reform of the CAP. Those are the three most expensive items, and they are all covered by the terms that we are undertaking.
  Mr. Shore: I understand that. I have before me Mr. Lardinois' statement after he put forward his proposals for reform. Although he was anticipating what could be a major reduction in the forward expenditure of the CAP, he was not envisaging any reduction in farm income or any reduction in the actual size of the CAP as it is now.
  I remind the House that this year it has reached the figure of more than 4,000 million units of account. That is the size of the CAP as it now is. That compares with a CAP costing just over 1,000 million dollars five or six years ago.
  I turn to the common regional policy and in the same perspective. Those who study the vast flow of documents on regional policy will know that the point
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  at issue as of now is not so much the eligibility of our development areas for aid, although there appear to be some curious omissions from the maps that I have seen. However, I accept what the right hon. Gentleman says about these matters having yet to be finally decided. The point at issue now is the fact that the criterion for aid has been drawn so excessively broadly. The criterion of eligibility for assistance includes 35 per cent. of the population of the United Kingdom, 12 per cent. of the population of Germany, 15 per cent. of the population of the Netherlands, 17 per cent. of the population of Belgium, 32 per cent. of the population of Denmark, incredibly to me, 33 per cent. of the population of France, not incredibly 51 per cent. of the population of Italy, and 100 per cent. of the population of Ireland, North and South. No doubt such a broad approach helps to ensure the acceptability of a common regional policy by so many States, but it does little to ensure any real advantage from it for Britain.
  Even if the Common Market were able to agree a policy so that those with the more severe regional problems received above-average aid—and the Nine have not agreed to this—it is still unlikely that we would have been significantly any better off. If poverty is the real criterion for regional assistance, half of Italy and the whole of Ireland will have, and will deserve to have, the first claim. But, taking the proposals as they are, how much would we benefit from a common regional fund? I echo the question put by my hon. and right hon. Friends a little earlier.
  Mr. S. James A. Hill: Does the right hon. Gentleman know the three criteria? Would he exclude heavy dependence on agricultural employment, heavy dependence on employment in declining industrial activities or a persistently high rate of unemployment and net outward migration? Which one would he alter so that the maps may be altered to suit his views?
  Mr. Shore: I am willing to debate the proper criteria for a common regional policy or for a British regional policy, but the point I am making now which it is important to distinguish is this : I am not necessarily saying that the criteria are wrong, but I am pointing out the absurdity of the misleading hops of so many hon. Members on both sides of the House

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  that there is waiting for Britain a great net reverse flow coming from a common regional policy. That is what I am seeking to establish. Do the Government yet know how much they expect to get? How is the common regional fund to be financed? That question has been omitted from our discussion of the common regional policy.
  Surely the fund will be financed - and I ask the Minister to confirm this—on the same basis as are all other Community expenditures, and from the yield of the three taxes—the food levies, the Customs duties and the VAT, which comprise the Community's so-called "own resources" and which weigh so onerously on Britain of all the member States of the EEC.
  The Government have never said what proportion of the EEC budget Britain will have to bear once we reach the end of the transitional period in 1977. At that point we know that we shall be paying 19 per cent. of the total expenditure. That is the reduced amount. Thereafter it will rise to the full amount which between 1977 and 1980 will be between 23 per cent. and 27 per cent. If the Government's first submission to the Community when negotiations first began was right, our contribution would be as much as 31 per cent., but I have put it deliberately at a lower point.
  Even if we were to receive from the regional fund our precise contribution equal to the percentage of the United Kingdom population in the total population inside the aided areas of the Community, we should be entitled only to 25 per cent. of the proceeds. We could expect at the end of the transitional period receipts up to 25 per cent. against contributions of between 23 per cent. and 27 per cent. The net benefit clearly could not be large. In addition, as the right hon. Gentleman confirmed, we should have to accept the new disciplines of our own regional policy that the Community's new regional committee, the Commission and Articles 92 to 94 of the Rome Treaty would combine to impose. Let us dismiss the idea so sedulously but misleadingly propagated that the common regional policy can make a serious difference to the balance of advantage to Britain of membership of the EEC.
  I turn to another and still more serious obstacle which has to be overcome before the Community's regional plan can even
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  begin to operate. Far from regional policy being seen in the EEC as a possible balancing factor to help Britain, disadvantaged as we are by the CAP, it has always been linked in continental minds with an entirely different objective, namely, progress towards economic and monetary union. Anyone who is in doubt about this should look again at the Summit communiqué of October 1972, at the preface to Mr. Commissioner Thomson's regional report and, indeed, at any other Community document dealing with regional policy. The precise linkage is there. I do not think that anyone on the Government Front Bench will rise to challenge that.
  To the member States of the EEC, regional policy is not a device for solving regional problems as they now exist but one for helping to counteract the new and much more serious regional problems that they believe will arise when national Governments lose progressively the power of economic intervention and when free market forces on a continental scale seriously begin to operate. That is where the common regional policy is designed to come forward to meet the situation.
  When we discussed earlier this year the Commission's powers over United Kingdom regional policies I recall the speech of my hon. Friend the Member for Ash-field (Mr. Marquand) who, while he takes a different view from me, has closely studied regional policy. He argued that a successful regional policy would need about 7,000 million dollars a year to counteract the dynamic centralising force of a continental Common Market once it had proceeded into the full programmes of economic and monetary union. It is against that background that both the purpose of the Common Market regional policy and its budget should be judged.
  We have heard nothing about the size of the regional policy budget. We know what the Commission proposes, but am I right in thinking that the scale is being changed as the result of recent discussions? Am I right in thinking that although a fund may be set up it will be like an empty purse on 1st January 1974 and that nothing will be put into it until the other conditions of economic and monetary union have been fulfilled by this country? That is the real question, as the right hon. Gentleman knows. We

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  shall gain virtually nothing unless and until we agree to go forward with the whole range of policies that comprise the second stage of economic and monetary union.
  Those measures were set out again by the Commission on 20th November in the communication to the Council of Ministers. It contains proposals for a Council resolution, two Council decisions, a directive and a regulation, all of which could be approved—before they come to the House—by mid-December. They include a massive strengthening of the European Monetary Co-operation Fund, with the proposal that 10 per cent. of the reserves of all the member countries be pooled for the general purpose of defending existing exchange rates and parities. It includes provision for a further reduction of the narrow band, the width of the snake, around the Community currencies. It confirms that the elimination of the spread and the attainment of fixed parities constitutes the final objectives to be reached by 1980. In other words, we have to end our float and end it pretty soon. It pledges a common position in the IMF and elsewhere to be conveyed through a single European spokesman, whoever he may be.
  It seeks the further removal of barriers, in particular legal and tax barriers to the free movement of goods, and it calls for the effective opening up of public contracts. Public purchasing power is to be Europeanised throughout the Community. In fiscal matters the Council undertakes to give a final decision as quickly as possible on all the proposals for directives, so far presented on VAT—the harmonisation of its coverage, whether it be on food or books or beyond, and the rate. Directives on common excise duties on tobacco, beer, wine and so on are in draft and in the pipeline of the Community. Further, it calls for the removal of tax frontiers affecting the movement of persons and capital before the end of 1976. That is the goal—the second stage—and it embraces proposals for far-reaching convergence—I must use the correct word—of the economic policies of the member States.
  If Governments depart from new quantitative guidelines defined by the Council in economic, monetary or budgetary policies, they must satisfy the Commission
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  on what they are doing. Failing that, the Commission may request that an examination be held within the Council, that it should meet within a fortnight and take any decisions on any proposal that the Commission may submit.
  These are far-reaching proposals. They add up to what the grandfather of them all, M. Werner, described in his report as a second Rome Treaty. We are getting this treaty even before the first has been put to our own people here in Britain. I do not believe that these proposals for economic and monetary union are in the interests of this country. Nor do I believe that they can all be achieved within the timetables laid down. But there can be no doubt that these are the objectives to which the Prime Minister and the other eight Heads of Government solemnly subscribed at the Paris meeting in October 1972. Indeed, the communiqué, after the meeting, went even further. It stated in the final paragraph that the Heads of State have
  " set themselves the major objective of transforming, before the end of the present decade and with the fullest respect for the Treaties already signed, the whole complex of the relations of Member States into an European Union ".
  That goes far beyond economic and monetary union. Whether it means a full European Government, a federal government as Chancellor Brandt recently urged, or whether it means a kind of informal non-parliamentary European cabinet meeting which would have cosy fireside chats for President Pompidou and the other leaders of the eight, I do not know. Nor, I suspect, do the Government know.
  However, it appears to embrace the pursuit, among other things, almost regardless of the cost to our own interest and wider interests in the Western world, of the goal of a common European foreign policy—
  Mr. Taverne: Would the right hon. Gentleman make clear a point of utmost significance? Is it now Labour Party policy to oppose any further steps towards economic and monetary union, and will the Labour Party make this part of its conditions on renegotiation of the terms?
  Mr. Shore: I can give the hon. and learned Gentleman the categorical assurance, in the words of the Early Day

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  Motion which we have on the Order Paper but which unhappily we cannot, for technical reasons, move :
  " That this House, recalling that Great Britain's membership of the European Economic Community lacks the consent of the British people, and noting the essential need for a fundamental re-negotiation of the terms of the Treaty of Accession, calls upon Her Majesty's Ministers not to agree to any further steps for the establishment of an economic and monetary union in Western Europe."
  Let there be no doubt where the Labour Party stands on these matters.
  Mr. George Lawson: I am obliged to my right hon. Friend for reading the motion. I thought we were debating the Adjournment motion but since he has made so plain what we are voting on I can assure him that I, and I hope a considerable number of my right hon. and hon. Friends, will not be in the Lobby tonight.
  Mr. Shore: These are matters which Members of Parliament must decide for themselves. I do not believe that outside this House anything more than a tiny minority, whether they vote Tory, Labour or Liberal, wish this country to go forward without the nation's consent to economic and monetary union. That is the position.
  I turn now to the movement towards a common European foreign policy, not only in the direction of foreign diplomatic relations, which is one aspect of foreign policy, but in external economic affairs, in the IMF, in GATT and elsewhere. If I understood the Foreign Secretary's speech yesterday correctly, for him, at least, the achievement of a common foreign policy is the main purpose of joining the EEC. I noticed what I took to be a sceptical look on his face when he heard his right hon. Friend talk about economic benefits. I regret that the right hon. Gentleman has now left the Chamber. It has for him always been the big political prospect to which he has been attracted.
  The Foreign Secretary points in defence of this position to such dubious successes as the common position of the Nine, reached at Helsinki earlier this summer, of the common response to the United States Government's call for a new American-European relationship and, almost incredibly, he points to the
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  common declaration recently made by the Nine on the Middle East.
  I do not share the Foreign Secretary's view about these so-called successes. Indeed, the treatment of Holland by the partner nations of the EEC ; their failure to pledge oil support in the face of the Arab boycott of Holland ; their arm-twisting pressure to prevent the Dutch from making even a formal request for assistance ; the clear one-sidedness of their Middle East posture, all adds up not to a common policy of which Europe can be proud but to a collective grovel for which we can all feel deeply ashamed.
  Chancellor Brandt is surely right on at least this matter—that the Community is not worth very much if the members are not prepared to assist each other in a matter which is so crucial to the welfare and prosperity of their members—when he says :
  " In accepting the weakening of one country we would in reality be weakening the Community itself and thus each of its members."
  Oddly enough, I agree with Herr Brandt, but I would substitute the word "Community" with the word "alliance" or "ally ", or for that matter any reasonable free democratic State which is contributing to the world, as the Dutch have done, and they would most certainly have my support, as would any other country threatened with a collective boycott of this kind.
  It is a terrible pity that the Foreign Secretary should feel moved to claim as a success what I cannot help believing was a singular failure. It is ironical that the so-called achievement in European foreign policy should involve a clear legal breach of the most basic rule of the Rome Treaty, namely the rule of the freedom of movement of goods, which is a basic rule even in a free trade area. How can it be possible in a customs union, where goods are guaranteed free movement, for one part of that union to be denied supplies which freely arrive in the ports of the other eight? The Arab boycott of Holland can be made effective only if the Community re-erects oil frontiers within its whole territory against the people of Holland.
  That is not the only achievement of the new European foreign policy. The other is to strain the relationships between

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  Western Europe and America, Australasia, and the other trading nations in the most damaging and unnecessary way. I am not referring simply to differences of view on the Middle East. I do not think that any serious observer of affairs can fail to note the increasing tensions in trade and monetary matters between Europe and America, tensions that have been deliberately fostered and which, if they are not soon relieved, could rapidly undermine our prosperity and even our security.
  I must close this speech, which has been lengthier than I intended, by dealing with the position of my party. We shall be voting tonight—I hope that many of my right hon. and hon. Friends when they consider our case and proposition, will join us in the Lobby—against the European policies of this Government. Our position, our alternative approach, is now coming to be better known and far more widely accepted. We are of course prepared for free trade, for continued close friendship and co-operation with our Continental neighbours. But the next Labour Government will not accept the existing arrangements enshrined in the Treaty of Accession.
  We shall insist on major changes in the CAP. We do not agree that imported food in Britain should be made subject to tax. We reject the method of financing the EEC budget and the balance of expenditure that that budget finances. We do not wish to go forward towards economic and monetary union. We have no intention of immersing ourselves in the still deeper waters of European union by 1980. We believe that parliamentary power is in Westminster and should stay there, and not be transferred to the Council or Commission in Brussels or to the sham assembly in Strasbourg.
  We insist that the people of this country and their Parliament must retain the right to make their own laws and decide the policies of this country. Last, we insist that the British people shall have the right themselves to decide the whole question, whether or not we stay in or depart from the EEC.
  Mr. Deputy Speaker (Sir Robert Grant-Ferris): Mr. Peter Kirk.
  Mr. Arthur Lewis: On a point of order. Is it not the usual custom that, when hon. Members have a vested interest in a subject under discussion, they should declare it? As we do not know what these people get, but it is rumoured that they get £40 a day tax-free and that their secretaries are to get £1,500 a year tax-free, can it be revealed to the House what these paid stooges get?
  Mr. Deputy Speaker: That has nothing to do with the Chair.
  5.2 p.m.
  Mr. Peter Kirk: Since the hon. Member for West Ham, North (Mr. Arthur Lewis) always shows a touching desire to know about other people's financial affairs, I may say that everything we receive has to be justified to the Inland Revenue.
  Mr. Arthur Lewis: How much do you get?
  Mr. Kirk: As I say, everything that we receive has to be justified to the Inland Revenue—
  Mr. Lewis: How much?
  Mr. Kirk: I do not know whether it is the desire of the House to conduct a debate on European matters or on the financial implications of certain Members' expenses.
  Since your predecessor in the Chair, Mr. Deputy Speaker, asked for short speeches, mine will be short—not that I blame the right hon. Member for Stepney (Mr. Shore) for ranging wide, as did my right hon. Friend the Chancellor of the Duchy of Lancaster. I can agree with one thing at least that the right hon. Gentleman said—that this debate was necessary and that it is so wide that one has to select—[Interruption.]
  Mr. Deputy Speaker: Order. I hope that hon. Members will allow the hon. Gentleman to be heard. I want to hear him, too.
  Mr. Kirk: It is so wide that one has had to select which topics one wants to discuss. The House will not be surprised to learn that my topic is the one so eloquently referred to by the right hon. Member for Stepney as a "sham assembly" and which was referred to by my right hon. Friend as the progress

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  being made by the European Parliament in the direction of control over the executive in the last 10½ months.
  When the right hon. Member for Stepney made that remark, I reflected that it was sad that that sham assembly could not hear the eloquence and wit of the right hon. Gentleman but that that pleasure should be limited to the Council of Europe Consultative Assembly, a body whose powers we all know to be so much greater and more important that the right hon. Gentleman is prepared to devote a great deal of his time to its affairs—though not, I notice, on the occasion when the Council of Europe Consultative Assembly had a joint meeting with the European Parliament, for fear no doubt that he will get some frightfully contagious disease.
  When those of us who were appointed to the European Parliament last December, and the very welcome additions that we have had since—I refer not only to my hon. and noble Friends but to the hon. Member for Inverness (Mr. Russell Johnston) and the hon. and learned Member for Lincoln (Mr. Taverne)—went there, what we had at the back of our minds was the urgent necessity for making progress with the democratisation of the Community. The element of control over the Community—
  Mr. Dennis Skinner (Bolsover): How much do you get?
  Mr. Kirk: I get £25 a day and my travel expenses, and they have to be justified to the Inland Revenue. I do not know how often we have to tell the hon. Gentleman that before it gets into his head—
  Mr. Arthur Lewis: And you support the incomes policy?
  Mr. Kirk: Yes I do.
  I thought that our major problem was to get some control over the executive of the Community, particularly the Commission. My hon. and learned Friend the Member for Northwich (Sir J. Foster) and his Committee, in an interesting report that I hope we shall be able to debate fairly soon, have presented some ideas on how that control might be executed through this House—rather more
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  over the Council of Ministers than over the Commission, which seems to me an eminently sane balance. But effective control over the Commission in its executive rôle, and indeed in its pre-legislative rôle when the Commissioners come to the committees of Parliament to discuss individual matters, can be achieved only through the European Parliament. Therefore, it is a matter of concern that we should make it as effective as we possibly can.
  This is not to say that it was not effective before. The Parliament of the Six had been going for a long time and had managed to achieve considerable progress, but it had only one "nuclear weapon" in its hands. That was the motion of censure on the Commission, which has been moved only once—last December—and which was then with-drawn in the light of certain undertakings given by the Commission. What all of us have been looking for are more effective ways of controlling the executive, not only in regard to legislation but perhaps more particularly in' this initial stage in regard to budgetary matters.
  As my right hon. Friend pointed out, not only do certain budgetary powers fall to Parliament automatically under the 1970 agreement, but also, from 1st January 1975, the Community will be financed out of its own resources and therefore it needs even more urgently some effective measure of parliamentary control.
  I will not weary the House with a description of the introduction of various small procedural matters such as Question Time, which on the whole is going fairly well for the Members. A tendency to prolixity on the part of the Commissioners suggests that they might with benefit serve an apprenticeship in this House before they answer questions—as some of them have done, of course.
  It is important to realise that budgetary control becomes a matter of real importance. Although I understand that my right hon. Friend the Minister for Industrial Development will be concentrating mainly on regional policy when he winds up the debate, if he has anything further to add on this matter it will be of great interest. He and the Government at any rate will be aware of the considerable difference of opinion which has now arisen among the three institutions on this

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  matter and the need for a fairly early resolution of it.
  We have general agreement on the accounting side. The setting up of a public accounts committee has now been broadly agreed. The setting up of a court of auditors, with roughly the same powers as the Exchequer and Audit Department, has been broadly agreed. The details remain to be worked out and I hope that they will be worked out fairly swiftly. But in the general relationship between Council and Parliament over budgetary matters and, indeed, over legislative matters as a whole, progress has been slow.
  We have had only one major step forward. That was the statement of the Chairman of the Council on 17th October, which undertook two things. It undertook, first, that commercial agreements made with third countries would be made in such a way that Parliament could express an opinion on them before they were ratified. That was a step which was welcomed by everyone, particularly by my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith), who has worked hard for that since he has been a member of the European Parliament. It undertook, secondly, and perhaps more importantly—this is a matter which brings up to date a paragraph in the Foster Report, which was quite accurate when drafted but is accurate no longer—not to embark upon any legislative procedure or directive received from the Commission until Parliament had finished with it.
  In other words there is clear understanding that the procedure whereby the Council began its work in parallel will now cease and the Council will not start work until it has the opinion of Parliament on the directive. It can still pay no attention to the opinion of Parliament when it gets it. I shall return to that point later. Nevertheless it will get that opinion before it starts work, which may conceivably have an effect.
  Mr. Deakins: Does that mean that in future any supplementary budget submitted by the Commission to the Council will not be able to go through, as it did this year, in 24 hours flat, but would have to wait, however, urgent, until the European Assembly had given its views on the matter?
  Mr. Kirk: There is a saving clause in the statement which says "Save in exceptional circumstances ". Certain supplementary budgets could be conceived of as "exceptional circumstances". But the general rule would be that supplementary budgets would wait, in all normal circumstances, as all directives and regulations would wait, until Parliament has finished its consideration. That is the new rule, which is now beginning to work.
  When we come to general consideration of the budget outside the administrative budget, that is, control of the operational budget, we have at present reached deadlock. I hope that we can break that deadlock by the proposal for tripartite discussions between the institutions at the earliest possible moment. What we are proposing basically is a form of co-decision which would not give a veto to Parliament over Council, or vice versa, but which would require them both to reach agreement on essential matters of budgetary policy. When I say "we ", that is the opinion of the Conservative group, but I think that is shared by the hon. Member for Inverness and by a large part of the Liberal group in the European Parliament.
  There is, however, a strong body of opinion in the European Parliament which believes that the last word should rest with the European Parliament itself and that it should have the right, in certain circumstances and with a qualified majority, to over-rule the Council. That is unrealistic at this stage and certainly so long as the unanimity rule remains within the Council. The Commission felt unable to accept this in its final proposals to the Council, although it has agreed to the idea of a conciliation conference between the Parliament and Council, which would meet on this matter. I hope that this will be extended eventually to all legislative disagreement.
  Nevertheless, the right of the Council in the last analysis has been maintained, after this type of discussion, to have the final say. The Commission has sided rather more with the original Vedel proposals which provide for a kind of suspensory veto. It is on that matter that the difficulty has arisen, and it may well lead to a motion of censure and the dismissal of the present Commission

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  early in the New Year if it is not prepared to change its views or persuade the Council to change its views. That would create an unhappy situation.
  It is for that reason that I want to impress upon my right hon. Friend the Chancellor of the Duchy that this is not a matter which can be swept aside. It is regarded by the members of the European Parliament as of crucial importance to the future proceedings and to the access of Parliament to power. If my right hon. Friend says, as he has done, that there is a general agreement that Parliament should acquire more power in budgetary matters, the minimum that Parliament should be expected to accept is a right of co-decision. Without that right there will undoubtedly be a crisis in the Community early in the New Year over constitutional matters.
  The creation of new bodies, such as the conciliation committee and the public accounts committee, the additional volume of work flowing out of the Commission and the fact that the Council will not embark upon legislation until the Parliament has finished with it, will place new work and strain on those members who come from this House and from another place, and the eight other Parliaments within the Community. All of us who have been sent by this House to perform this task have enjoyed to a great extent the work which we have had to do, onerous though undoubtedly it has been. But it will become more onerous next year and the year after.
  It is time that the Governments, particularly Her Majesty's Government, devoted some serious thought to the way in which they want the institutions to run in the future. Certainly as far as the European Parliament is concerned, it could be in grave danger of breakdown. The obvious solution would be direct elections. I am ideologically committed to direct elections, but I am committed to them very much more at present for sheer practical reasons. Attention must be paid to separating the membership of national Parliaments from that of the European Parliament. That can be done only through a democratic mandate, and obviously that will take time.
  I was not attracted by the argument that my right hon. Friend was prepared to use, the argument of the chicken and
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  the egg that one cannot have direct elections until one has more powers. The reverse of the argument is true, too. One cannot have more powers until there are direct elections. This is the surest recipe for doing nothing. Some thought should be given to this matter by the Government and by the House. I realise that the thinking of the House on these matters is complicated by internal factors but there is urgent need to discuss the machinery of direct elections, the type of electoral system which would be needed and, indeed, the party structure which would be required if they are to be effective, aiming towards a date such as 1980, when we shall have European union and when this could be done efficaciously.
  One thing that the present Government could do to make the life of everyone much easier is to stop the pantomime of moving people from place to place and to settle everyone down in one place, including the Parliament and the Council of Ministers. In particular, there is the very ludicrous situation that the one period in the year when the Commission and the Council of Ministers move to Luxembourg is the period when the Parliament moves from Luxembourg to Strasbourg and does not return. That practice should have been stopped a long time ago. My right hon. Friend shakes his head, but he must realise that feeling about this matter is very strong. The strain involved in the constant travelling from place to place is something to which Governments must pay attention.
  I realise that my speech has appeared in the form of a progress report. I make no apology for that. The members of the European Parliament were appointed by unanimous vote of this House, and we owe an explanation to the House of what we are doing. I have referred to the things which need to be done. On the other hand, all of us, who are members of the European Parliament, regardless of party, can take some satisfaction in the work of the last 10 months.
  5.17 p.m.
  Sir Geoffrey de Freitas: I agree with the hon. Member for Saffron Walden (Mr. Kirk) on the need for studying the mechanics of direct elections. I was interested in his reference earlier to the Select Committee which reported on

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  certain aspects of the procedures for the scrutiny of proposals for secondary legislation. I should like the Government to consider tying together those two matters. The report is most interesting, and I look forward to hearing it debated.
  The time has been reached when we should have a Select Committee to study the various ideas put forward for reform of the powers and constitution of the European Parliament, with particular attention to the part to be played by the British electorate. I regard that as crucial. The last Select Committee, the report of which we have, was considering a procedural matter and was constituted, as indeed such committees should be, to reflect the different views about the European Parliament in this House. I see no reason why there should not be an equally strong and important Select Committee to consider this matter. I was particularly concerned that we have not given enough attention to this problem when I heard the Chancellor of the Duchy referring to the evolution of the European Parliament, in passing, and then to its gradually increasing powers. Without getting into the chicken and egg argument, we should recognise these facts.
  I do not often find myself in agreement with the editor of The Times but I was impressed by a speech which he made to some Dutch newspapermen in September in The Hague. He said that if the European Parliament is to be given more powers, as is argued in Strasbourg and elsewhere, then these increased powers should not be given to a Parliament which is made up of members who have been appointed and not directly elected to that Parliament. In other words, the democratic basis of the institution is of fundamental importance.
  I, too, believe that if the European Parliament is to have more power, then it must be made into a body which reflects the democracy of our countries ; in other words, there must be direct elections. This country is in a strange position in that eight out of our 22 delegates are Members of the House of Lords, who have never at any time been elected to Parliament. Also, it is unfortunate, although a lot of my colleagues do not agree, that one of the two major parties in the State is not there.
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  However, as long ago as April 1969, the British Government jointly with the Italian Government made a public declaration in favour of direct elections to the European Parliament. So far the Prime Minister has not been converted to the need for direct European elections, but I thought I detected an unspoken message in the speech of the hon. Member for Saffron Walden. The last 11 months have shown, apart from the undesirability of an appointed Parliament, that it is extremely difficult for an hon. Member to do justice both to this House and to the European Parliament in Strasbourg or Luxembourg. Certainly, the few facts which we have seem to indicate that this must be so. After all, we in this House meet an average of 165 days a year. Unfortunately, whatever happens, even if it is accepted by this Government, as it was in 1969, that there should be direct elections, there is no agreement at all and very little work is being done on the form—the word "mechanics" has just been used—and certainly there is no agreement about size. This is something which is fundamental.
  If the Parliament remains at its present size and we had single-Member constituencies, then each of our European Members of Parliament would have a constituency of about 1½ million inhabitants. We are not accustomed to constituencies of that size. But if there were a larger Parliament, and if throughout the Community we had constituencies of about 500,000 inhabitants, then our constituencies in the European Parliament would be roughly the size of six of our constituencies put together. By chance, France, Germany and Italy have about the same population as we have, and therefore a reformed Parliament could start with the same number of Members of Parliament—say 100—from each of the four big countries. How that would change would depend upon how their populations changed as the years went by.
  What is most important is that we on these benches and our colleagues on the Continent have some experience of an international party As The Times has recognised, there has been an international Socialist movement for a long time and in certain circumstances—here I do not think there will be great disagreement

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  between my right hon. Friend the Member for Stepney (Mr. Shore) on the Front Bench and myself—there is truly an international Socialist organisation ready to take its part in European affairs. But what has happened is that the Conservatives and the Liberals are not quite so far advanced. I cannot speak about them, but I can speak about what has happened in the Consultative Assembly at Strasbourg.
  In 1951, the Socialists were together in a group under the chairmanship of Guy Mollet and there was little in common between the French Socialists, who seemed to spend most of their time discussing anti-clerical matters, and members of our Labour delegation, which included Roman Catholics who could not understand at all what was going on. Today it is completely different. I have presided over the Socialist Group at the Western European Union Assembly, and on most issues there is a common view which cuts across national frontiers. I believe that this is the basis for any development that there will be in Europe. Only two weeks ago, The Times stressed this fact about the Socialists. Having made an analysis, it stressed the fact that the Socialist Party is the most prepared. There are dozens of other important points, and scores of less important points, which I want the Select Committee to consider. Early in the New Year, the European Parliament will be debating a report on the constitution of the European Parliament. I much regret that Labour Members will not be there to take part. It would seem appropriate if we set up this Select Committee that this report should be one of the first matters considered by it.
  I am much concerned with the European Community, as many hon. Members know, but I cannot for long continue to defend a European Parliament which is unreformed and made up of appointed members. It just does not make sense to me when we are trying to establish a European democracy. It must be democratically elected, or it will mean very little in the long run.
  5.26 p.m.
  Mr. J. Enoch Powell: It was certainly high time that this debate, the first general debate upon the European Economic Community since this House disposed of the European
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  Communities Bill, should take place. After all, it was nearly 14 months ago, on the morrow of the Royal Assent to that Bill, that a series of undertakings were made by the Prime Minister at the Summit conference in Paris in the name of this country, although they had not previously been in any way adumbrated before Parliament, let alone debated by Parliament or, still less, assented to by Parliament. There is only one of them to which I would wish to direct the attention of the House.
  The Member States there affirmed :
  "their intention to transform before the end of the present decade the whole complex of their relations into a European Union."
  The Heads of State, in pursuance of that, reaffirmed
  "the determination, irreversibly to achieve the economic and monetary union,"
  and took measures
  "with a view to its completion not later than 31st December 1980."
  Technically, of course, a communiqué from a meeting of the Heads of State and of Government of the EEC is not a Community instrument for the purposes of the principal Act ; but it is in every other sense a Community instrument. Indeed it is the most powerful and, in a sense, the most binding of all the Community instruments. The Select Committee of this House was not mistaken when, in the definition paragraph of its report, among the sources of what I think we miscall "secondary legislation "—because, of course the legislation of the European Council in our terms would be primary and not secondary legislation ; but the Committee was following the terms of the remit which had been given to it—it listed Summit meetings of Heads of State or of Government and the communiqués issued at them. Not only do those communiqués engage the entire authority and responsibility of the Heads of State and of Government themselves, and of the political parties which support them, but those meetings actually give instructions to the Council. On the following page of the communiqué to that from which I have quoted we read that "they "—that is, the Heads of State—" instructed their competent Ministers" what to do at the next meeting of the enlarged Council of the EEC. So there can be no question about the binding, and indeed the overriding, nature of the decision which was

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  taken very nearly 14 months ago on behalf of this country, without the cooperation of Parliament, at the Summit assembly in Paris in 1972.
  I was fascinated in reading the report on 14th November by the diplomatic correspondent of the Daily Telegraph of the speech of Herr Brandt to the European Assembly, to note that he referred to the decision of the Summit meeting in Paris last year as "agreed EEC policy ".
  He wrote :
  "Herr Brandt's plan for a European Government went well beyond present agreed EEC policy. This is to reach economic and monetary union by 1980, with political union taking shape in undefined form at some undefined date ".
  So it has already become, after a lapse of a year or so, accepted, in general thought and parlance, that this country is committed to the content of the Paris communiqué, committed to economic and monetary union by 1980.
  Herr Brandt, of course, went further. He envisaged by the same date "a European Government "which would not only be
  "in charge of economic and monetary matters "
  but also of
  "social and foreign affairs, and defence ",
  all of which would be "administered under European sovereignty". If my hon. Friend the Member for Saffron Walden (Mr. Kirk) was reported correctly, his view of that was that
  "Herr Brandt practically spoke like a member of our group ".
  Mr. Kirk: That was in direct reference to his proposals for reform of parliamentary and budgetary procedure.
  Mr. Powell: I am much obliged to my hon. Friend. That certainly was not clear from the report. Of course my hon. Friend—and this is in no way derogatory—is in this great difficulty—a point which the last two speakers have already canvassed—that he can in no real sense speak for this House, since this House has no means of mandating him, nor can he speak even for the majority party in this House, which in turn has no means of mandating him.
  Certainly my right hon. Friend the Prime Minister gave a fair wind to Herr
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  Brandt's speech, when on 15th November he said :
  "I have no doubt that much of it commanded the support of the members of the Community."—[OFFICIAL REPORT, 15th November 1973 ; Vol. 864, c. 660.]
  So we now have the position that economic and monetary union by 1980 is the officially accepted objective, officially accepted on behalf of this country and, presumably, of this Parliament by the Head of Government of this country, and that there is at any rate warm approval for the notion that even that does not go far enough, but that by 1980 other elements of common sovereignty should be included.
  Yet there is no shadow of argument—there can be no possible contention—that economic and monetary union and what it implies has ever seriously once been debated in this House. On no single occasion has any of my right hon. Friends been required to come to the Dispatch Box and evolve what is implicit in the economic and monetary union to which my right hon. Friends are nevertheless committed. Still less has this House had the opportunity—I do not say in legislative form but even in the form of a single motion or a single debate—to express its opinion upon the implications of economic and monetary union. There is a great contrast between what has happened since October 1972 and the atmosphere which prevailed during the long debates on the Bill in the earlier part of 1972. In the course of those debates rare indeed—and totally absent from the speeches of the Front Bench—were references to economic and monetary union as an imminent—and 1980 is imminent in historical terms—implication of Britain joining the Community.
  On the contrary, such matters were treated as of remote, contingent and purely academic interest. It was with some difficulty that the interest of the House and the attention of the country could be focused upon the fact that the European Communities Bill in itself already surrendered the essence and the reality of all aspects of the sovereignty of this House. But in the last 14 months, as, even at this early stage, the practical meaning has gradually begun to appear, there has been a sharp and astonished reaction inside and, even more,

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  outside the House. There was a remarkable speech some time ago by Mr. Justice Scarman, a former chairman of the Law Commission. Would that he had been with us the Session before last in this House. He
  "rejected the argument that because of its present limited range of activities the Community's impact on the law would be equally limited. This ignored ",
  he said,
  "the ambitions which lay below the surface of the Community and misunderstood the opportunities for expansion implicit in the treaties ".
  We have in the last 14 months learned something about what Mr. Justice Scarman was referring to in that speech. Only last week the public were startled to learn that an instrument has been presented by my right hon. Friend the Minister for Transport Industries—I suppose the most unlikely of my right hon. Friends ever to have even dreamed of doing such a thing—in pursuance of a 1972 EEC directive, belonging to the very early days of harmonisation : nothing of what my right hon. Friend the Chancellor of the Duchy calls harmonisation for harmonisation's sake about it. It deals with harmonisation of car insurance provisions within the Community, and it requires regulations which grossly affront and alter the constitutional position in this country over arrest by a constable without warrant, by making it lawful in circumstances where it is totally unknown to us and would be rejected with indignation if it were put forward on its merits.
  In a leading article, The Times commented upon the appearance of this portent. It was with some relish that I read the adjuration from the leader writer in The Times that
  "Parliament should not let this one through on the nod,"
  —[Laughter.] No, the best is to come—
  "not without making a certain amount of fuss first".
  In other words the leader writer knew perfectly well that, as the law which we made in the Session before last stands, we should have to let that provision, or substantially that provision, go through, because it is in a Community directive. But, says the leader writer of
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  this pro-European journal, with warmth and indignations we should make
  "a certain amount of fuss first,"
  before the inevitable happens.
  Those who write thus misunderstand what the House of Commons is about. No doubt we in this place from time to time make a great deal of fuss ; but we do not make a fuss in order, having made it, to go away with our feelings happily relieved and allow what was going to happen to happen anyhow. The significance of fuss made in this House is that, until 14 months ago, in the last resort the House said "Yea" or "Nay" to law, and was in a position to say "Yea" or "Nay" to the decisions of the Government.
  So when in the tiniest respect, as a consequence of a minuscule operation in the very modest and early stages of—I hesitate to use such a phrase—economic and monetary union, we find that a constitutional practice of great importance is to be subverted, and that we have no power to alter this, we are rightly shocked ; and those who did not know what was happening are astonished. In the light of that, Mr. Speaker, consider what it is that we say when we speak of economic and monetary union by 1980.
  Of course, the distinction between economic and monetary union on the one hand and political union on the other is largely unreal. What is 80 per cent. of politics about, if it is not economic and monetary policy? We are in fact talking of 80 per cent., at least, of political union as well by 1980.
  The country today is in the throes of a struggle over economic and monetary policy. It is in danger of being torn to pieces by the clash between two views of what should be the economic and monetary policy of this country, a clash which has brought into confrontation the State on one side and great masses of the citizens on the other. How can we seriously say at that very time that we contemplate within a matter of six years that the economic and monetary decisions—decisions about inflation, presumably, about how inflation is to be dealt with, about how prices and wages are to be managed, or controlled, or left free—what else is economic and monetary policy about?—are not to be taken by this House or by an authority responsible

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  to this House, not to be taken by the direct representatives of the electors of this country, but to be taken by an entirely different body? I am not quite clear what it is, not quite clear where it will be. What is certain about it is that it will not be this House, it will not be this electorate, and it will not be an administration responsible to this electorate, because that is totally foreign to the natural and inevitable meaning of economic and monetary union.
  Mr. Lawson Mr. Lawson rose—
  Mr. Powell: May I proceed? I will refer to the hon. Gentleman a little later.
  Can anyone imagine that this country could be governable, could be governed at all, if matters of policy such as those which I have mentioned, which turn upside down the lives of millions of ordinary men and women, were not—well, they might be made a fuss about—were not capable of being debated purposefully and decided in this House by the representatives of the electorate? It is unimaginable.
  If I had followed instead of preceded, I hope, the hon. Member for Motherwell (Mr. Lawson), I was going to pay him a compliment for showing again today a virtue which, if I may say so with respect, he has often shown in this House, that of great personal courage. It is an act of great personal courage to stand up publicly and say in the face of the House of Commons and of one's own constituents, "I believe that these matters should not be settled for the British people by the British people's representatives in the British Parliament, but should be settled elsewhere." For that is the meaning, the necessary meaning, of economic and monetary union.
  Mr. Lawson: If I catch your eye, Mr. Speaker, I may have an opportunity to develop the matter a little further and show where I stand on it. I wanted to put to the right hon. Gentleman a question that relates to it. Is he satisfied that we in this House, including the Government, quite apart from the European Community, can take decisions internally upon all the matters that he has been talking about? Are we sure that we can control what is happening industrially now?
  Mr. Powell: I confess I have never heard it suggested that in order to carry through a satisfactory prices and incomes policy, or whatever might be the alternative, we needed even the co-operation of the Governments of other independent countries, still less that we needed to be subordinate to, and become a subordinate and integral part of, a new economic unit. If the hon. Gentleman wishes to argue that, then indeed that shall be his case ; but it seems to me to be totally unimaginable that over the whole sphere of economic and monetary policy, of which we are witnessing the implications day by day, we could accept European sovereignty, which is what is meant, necessarily meant, by economic and monetary union, in replacement of the sovereignty of the electorate of this country and of this House.
  Sir Brandon Rhys Williams: I am sorry to break into the theatrical flow of my right hon. Friend's argument.
  Hon. Members: Sit down.
  Mr. Edward Taylor: Say you are sorry.
  Sir B. Rhys Williams: The House is entitled to know from my right hon. Friend whether he seriously thinks that economic and monetary disunion in 1980 would be in the interests of the British people. Does he believe that if progress towards monetary union continues on the Continent, and this country is left aside from it, anyone outside this country will know or care what this House then decides?
  Mr. Powell: Our experience in recent years has not been that the joint decisions—they were not sovereign, binding decisions, fortunately—of a large number of nations in this field were—I do not say to the advantage of this country, for they were manifestly to its disadvantage—but were even rational. Enlightened self-interest will induce any nation—and I should have thought ours above all—to seek every channel and means of communication and co-operation that there is with its neighbours ; but upon the fundamentals of policy each nation and its representatives are best placed to judge.
  My right hon. Friends are faced with an ugly dilemma. One alternative is to

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  say, or be forced to admit, that it is precisely that prospect which I earlier put before the House that they accept for this country, when they accept economic and monetary union by 1980 as the objective to which they are committed. That is the one alternative. The other is to say, perhaps behind the hand and in private rather than publicly : "Well, you know, my dear fellow, none of us really expects that it will happen that way. It will be a long time coming. Naturally, we had to go along. We had to write in the date of 1980. One must pay lip service to the cloudy verbalisms of our continental colleagues. But nobody need take this too seriously. It will be a long time, and there will be plenty of opportunities to put a spoke into the wheel ". I cannot believe that either of those stances is credible or right for a British Government.
  It is a dilemma out of which they have to find their way. The debate is taking place upon a technical motion. The Government have wished it so. The Government have not wished that the House should be in a position to take a substantive decision or to express a substantive opinion of any kind. Yet in the motion which the official Opposition have placed on the Order Paper, there are the elements of the answer to the Government's dilemma.
  There are three elements in it. First, that the plain, undoubted and full-hearted consent of the British people which has not yet been obtained or properly sought is necessary : we cannot ourselves decide these matters, and we debate them in a vacuum if we do so except in the light of the general will of the British people. Secondly, that the rights, the freedoms and the liberties of the British cannot be reconciled with our membership of the EEC unless there is a radical renegotiation of the terms in which our co-operation or membership, or call it what we will, is to be expressed. Thirdly, that until those two conditions are fulfilled—until the will of the people is known and a reconciliation is secured between the EEC and that for which the House exists, the sovereign independence of the British people through their elected representatives, we dare not take further steps towards economic and monetary union.
  5.52 p.m.
  Mr. Russell Johnston: No words of mine and no words of any hon. Member would deflect the right hon. Member for Wolverhampton, Southwest (Mr. Powell) from the views which he holds with the passion which he has just expressed. I do not want to embark upon such a course. It would be a matter of theological fundamentalism.
  I do not go into Europe feeling in any way subordinate. I do so with the feeling of a free partner in a great enterprise which I believe to be for the benefit of the British people, for the benefit of Europe and for the benefit of the world. I agree that such matters are not susceptible to easy proof one way or another.
  It seems that the Government hoped that regional policy would play a major part in the debate. It is with a certain amount of trepidation that I and many other hon. Members who represent the peripheral areas await the outcome of the vital meetings of the Council of Ministers on 3rd and 17th December. They will decide the size of the Community fund. It is with a certain amount of cautious optimism that I wait to see whether the Community will allow itself to be persuaded to make a commitment, as the Minister indicated, that the regional fund should be allowed to grow substantially from its starting point to a much higher figure at the end of the initial three years.
  Given the fact, and I believe that it will happen, that an adequate sum will be set aside by the Community to help bring the poorer regions of Europe up to or nearer the level of richer regions before the latter begin to race away again and benefit from the advantages which I believe will accrue from the development of economic and monetary union—I now express a fundamentalist belief—there will be required a tremendous amount of thought and care when considering the administration of the regional fund. Many of the decisions will be political rather than economic.
  Before turning to this, may I pay tribute to a political opponent, the hon. Member for Southampton, Test (Mr. S. James A. Hill), for the work he has done as chairman of the Regional Committee

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  of the European Parliament. I have witnessed his work. It has taken a great deal of his time and he has done very well.
  It would be a serious mistake to believe that regional policy, if it is to be successful, can be imposed from a regional centre. If it is to be successful it must receive the backing of the people in the regions concerned. The only way in which that can be achieved is by active participation in the decisions which go to make up the formulation of policy.
  I should like to know what sort of guarantee I can give to my constituents, and which other hon. Members can give to their constituencies in Scotland and Wales, about direct representation on the Council of Ministers' Regional Advisory Committee when it is set up. Equally, it will be interesting to know on a broader scale what sort of thinking there has been in general as to the representation of the constituent parts of the United Kingdom.
  It is basic, if regional policy is to succeed, that the Government must understand from the beginning that any regional aid must be regarded as an additional source of income. It must be regarded as a supplement to the national aid programme. It is not to compensate or replace national aid programmes. The Government must not get the impression that any Community aid will enable them to make cutbacks in their own schemes or that we must get back from regional policy what we lose with the CAP. If that view is adopted the regional policy will not succeed. Any concept of juste retour on contributions to the fund will be inimical to an effective policy. Aid must be given where needed without regard to national considerations. It is for that reason that I welcome the Commission's criteria as set out.
  In practice there will be extreme difficulties. Scotland, for example, clearly meets the criteria which have been set out, but within Scotland, and within development areas and regions of the United Kingdom, there are tremendous variations. Methods must be devised to concentrate on the areas within development areas and regions which most require assistance. It is a fact that in Britain's case, perhaps much more than in the case of Ireland or Italy, regional disparities are the hangover of the failure of national Governments and their
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  policies. That responsibility will soon become shared with the Community, and especially the Commission. Because that is so, the acceptability of Community institutions within the regions may eventually become dependent upon the capacity of the Community to devise solutions which at times may be in conflict with the views of national Governments.
  I now turn to wider matters. As has been mentioned by both Front Bench spokesmen, since the last occasion the House had a discussion on Europe a vital new factor has emerged. Europe's unity has been put to the test by the Arab boycott of oil to the Community. It is my opinion and the opinion of the Liberal Party that that above all else emphasises European vulnerability and the necessity for co-ordinated political action by Community member States. It is too easy to argue that, if the Community had a more developed energy policy, things might have been easier. It is easy to argue that, had there been more consultation regarding a foreign policy, the situation might not have arisen. The fact must be conceded that in neither of those areas was the Community adequately prepared at the time of the war to cope with the consequences of the war.
  Some consolation can be taken from the fact that the Council of Ministers met and agreed a formula. In spite of that, relations within the Community will inevitably be strained as the fuel crisis continues. There have already been calls for solidarity with the Dutch. The proviso must be accepted that, if the Community has not been consulted about national policy, it is not possible to guarantee solidarity. In such a situation our attitude is to some extent inevitably coloured by our attitude to the whole Middle East situation.
  The second point, of course—well taken by the right hon. Member for Stepney (Mr. Shore)—is that if we obey the Treaty of Rome we cannot deploy any oil embargo within the Community because we breach fundamental Treaty of Rome regulations if we do—indeed, the whole intent and purpose of the Community as well. Possibly more important in the long run is the fact that Europe's dependence on oil from politically-sensitive areas has in no uncertain fashion

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  been emphasised and that we must, therefore, devise some oil-sharing mechanism.
  The hon. Member for Glasgow, Govan (Mrs. MacDonald), who is not present, during her recent election campaign used the slogan, "Poor Britain or rich Scotland?" because of the North Sea oil situation. I do not blame her necessarily, but it was her party's policy. It is an interesting side of the broad question as it were. But it is not my approach to the use of natural resources, and it certainly should not be our attitude towards the Netherlands or any other country particularly under threat.
  The key question is the development of a long-term policy. The United States, for example, already has its long-term energy crisis provoked not by a war but by demand outstripping supply. Even without the war, a similar situation will eventually develop in Europe and we must develop effective mechanisms for dealing with it.
  However, I think that the basic question we have learnt and have had emphasised, in these last few weeks is that the political union of the Community to which, as the right hon. Member for Wolverhampton, South-West said, rightly or wrongly we are by the Council of Ministers' decision pledged by 1980, must be vigorously sought after. There are several paths that any such union might follow. I have no intention, in the limited time available, of embarking upon the constitutionalist's dream that this offers, but it would be a good thing to have some idea from the Government, even if only to promote public debate, which is absent, of whether they are set on federalism in the conventional sense or, in much less ambitious terms, on perhaps Ministers remaining the power centre, assisted by the Commission, and the European Parliament having, not constituent or sovereign powers, but negative powers of accepting or rejecting by qualified majorities what Ministers propose. We want to know what the Government are thinking, because it is important in itself and because in no other way can any consensus be developed.
  Reference has been made to the Select Committee which examined Community "secondary" legislation—and I take the point made here by the right hon. Member for Wolverhampton, South-West. It
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  recommended a special House of Commons scrutiny committee to examine important proposals and to be on the lookout for proposals which embody matters of importance so that they may be examined even before the stage where they have been formally transmitted from the Commission to the Council of Ministers. This, I think, in itself is a vitally necessary innovation at this stage because there is virtually no check on whatever decisions are made by the Council of Ministers. I accept the criticism on that ground.
  But I want to lay one thing fairly on the line from the Liberal point of view : that national Parliaments must resign themselves to a certain loss of their ultimate law-making authority if we are to remain within the Community. However many scrutiny committees we may care to establish, this can never compensate to such an extent as to ensure parliamentary control from this House over Community law-making comparable to parliamentary control as it now exists over domestic law-making unless the supranational nature of the Community itself is to be denied. The authority thus lost can only pass, in my opinion, to the executive arm of government until such time as there is established a Parliament representative of the people of Europe with full democratic powers.
  Mr. Deakins: Is the hon. Gentleman referring to the existing loss of sovereignty involved in membership of the Communities as at present, or to possible loss of sovereignty which the Liberal Party would fully support?
  Mr. Johnston: I am referring to both, although I regard them not as losses of sovereignty but as the sharing of greater sovereignty. But that is a question over which we could argue at great length. I do not want to pursue the question of how the European Parliament should be reformed. It has already been referred to by the right hon. Member for Kettering (Sir G. de Freitas), and the right hon. Member for Fulham (Mr. Michael Stewart) has put forward detailed proposals. But it is essential because these functions can only be 100 per cent. effective by means of such an institution.
  I have now served in the European Parliament for what has been a fascinating year, but I nevertheless accept what

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  The Times—much quoted today—had to say on 13th November. It said that there exists
  "no … Community Parliament, only the pale uncertain beginnings of one."
  I accept that. I do not, however, necessarily deprecate the value of being able to exert some influence at crucial stages in the development of policies. But it is nevertheless in the circumstances good and natural that the equivalent to a parliamentary Select Committee, whatever term one uses, should attempt, within the provisions of the Treaty of Rome, to defend the interests that its Members were elected by the people of this country to defend.
  It is also to be welcomed because it will enable more people to participate in Community affairs than has hitherto been the case. This, of course, is presuming that it is indeed the intention of the Government to carry out the recommendations of the Select Committee's report, and Ministers have already indicated that they will examine the recommendations most closely. In my view, however, none of this can be an effective substitute for the strengthening of the European Parliament.
  Earlier this month The Times published a poll which confirmed to quite a degree the view expressed by a number of hon. Members, particularly in the Labour Party, that after 10 months of membership the Community is not popular with the British public. According to the poll, only 29 per cent. of the electorate believed that our membership was beneficial as opposed to 44 per cent. who believed that entry was harmful. Equally dismaying was the fact that some 25 per cent. were "don't knows ", presumably as a result of lack of interest or through lack of information on which to form a judgment.
  There can only be one solution of this problem—that is to involve the people in the European process. It can only be achieved by involving them in elections on European issues which affect them. In addition, it would also have the function, albeit indirect, of educating the populace on the subject of Europe, giving arguments from right, left and centre, and asking the people to make a decision on the basis of what they have been exposed to. This is the thing we must do.
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  The Conservatives have declared themselves again today as being very much in support of what Herr Brandt said a week ago in the European Parliament—that we can and we will create a coherent Europe. Here I speak for the party which has espoused the European case officially for longer than any other party in this House when I say that we must, if we are indeed going to create Europe, develop within the public a greater response to our hopes than we have yet done, or we will fail.
  6.10 p.m.
  Mr. S. James A. Hill: In this general debate on European Community affairs I want to comment on the working document of the Commission of the European Communities, No. 152/73, mainly because the Committee on Regional Policy and Transport has been working on a series of documents for the past five months. Although the general debate has probably produced a good deal of information, my speech must of necessity be more technical than I would like.
  This document will be presented to the Council of Ministers. It contains three proposals. The first is to create a new committee for regional policy. The second is a financial regulation for the special provisions to be applied to the European Regional Development Fund. Finally there is a regulation establishing a regional development fund. This working document from the Commission was sent to the President of the European Parliament. It was forwarded to the European Parliamentary Committee on Regional Policy and Transport which appointed M. Delmotte as Rapporteur.
  M. Delmotte then drew up what is called the second report, which includes the opinions received from three other committees—the Economic and Monetary Affairs Committee, the Social Affairs and Employment Committee and the Committee on Budgets. Between these four committees several amendments were made to this Commission document. The Delmotte second report was approved by the European Parliament during the plenary session in Strasbourg at the beginning of this month.
  I want to concentrate first upon the creation of this new committee for regional policy. Its main task is the co-ordination of the regional policies of member States and to examine, at the

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  request of the Council or the Commission, or indeed on its own initiative, problems related to regional development. It is particularly asked to study the aims, means, methods and experiences of member States in the area of regional policy and to study on a continuing basis economic and social trends in the various regions.
  An important part of the committee's work will be the appraisal of development programmes or specific development objectives presented by member States. It will also discuss with those member States the financial resources which they and the Community propose to provide for regional development over the next few years.
  One of the interesting aspects of the committee's work will be a study of disincentive measures in regions of high concentration, such as London. There is even a mention that it should study the means of promoting better information services for both private and public investors in the whole range of regional developments. This committee must report to the Council and the Commission on the results of its work. One of the first amendments made by M. Delmotte was that the reporting procedure should also include the European Parliament. The composition of the committee will be on the basis that the member States and the Commission will each appoint two members, with the proviso that they can appoint substitutes.
  It is required by the Commission that the member States shall elect their members from among senior officials responsible for regional policy. Naturally the Commission will allow the members so appointed to be accompanied by experts in the many areas involved. As the European Investment Bank works so closely in a regional policy programme, it too is able to appoint observers to the committee.
  The second amendment that M. Delmotte has made is that the committee shall—instead of may—take evidence from interested parties in the regions and from trade unions and business organisations whenever a regional problem concerns it. This is in keeping with the feeling that there should be the fullest participation at an early stage at all levels when dealing with the regional development
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  plan. The committee will, of course, appoint its own chairman and vice-chairman for a period of two years. I am sure that we all wish this committee well in view of the enormity of the task before it.
  Secondly there are the proposed financial regulations relating to the special provisions to be applied to the fund. This was probably the most critical area of the document and at one stage there were 32 amendments tabled by the various interested groups, particularly the Southern Ireland delegation and the Italian Communist group.
  If the fund is to be effective, the Commission feels that it must meet three requirements. First, it should complement national regional policies. It should be flexibly managed, and investment should conform to development programmes or specific development objectives.
  Mr. Deakins: If the Commission is suggesting that the Community's regional policy should complement national policies, does that mean that there should be no interference with national regional policies?
  Mr. Hill: Yes. The Commission in no way wishes to interfere with already established regional plans and programmes which are going ahead.
  Mr, Edward Taylor: If that is the case, why did the Commission write to my hon. Friend and say that we could not grant aid to the Marathon Company of Clydebank along the lines we are doing, and why did my hon. Friend have to write back to ask the Commission to change its mind?
  Mr. Hill: The new regional development fund committee is not yet in operation. Obviously it could not have been the body which wrote to my hon. Friend's constituency. At the moment no regional development fund has been voted upon. No new regional development policy has yet been set up. We felt it to be necessary to bring these matters before the House in advance of decisions being made. That is the purpose of this debate.
  The underlying theme is that the Community's fund must complement rather than substitute for the actions of member States. This is borne out in the various articles giving the percentages that the

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  Community will lay down for what I would term a back-up service.
  The Community's assistance must be implemented flexibly and the flexibility must be expressed in the choice of investment eligible for assistance, in the speed of the procedures and in the level of assistance. Dealing with the choice of investment, the Commission and the European Parliament feel that Community aid should be available both in the areas where imbalances are agricultural in origin and where they are industrial in origin, with the proviso that strict account must be kept of the need to guide the development of infrastructure in co-ordination with common policies, in particular transport and energy.
  With regard to the speed of procedures, it was felt that it was necessary that companies must know what benefits they have a right to expect, depending on where they invest. Otherwise they may decide independently of any serious evaluation of the possible effects of their decisions. This highlights the fact that the Community's assistance must not have any effect of delaying decisions which member States take in their own regional policies. It should be possible therefore, subject to the necessary examination, for the Community's assistance to be able to take the form of the reimbursement of a particular regional objective.
  Turning to the level of assistance, the Commission felt that for both production investment and infrastructure the Community must not be tied to a uniform rate of contribution to each member State's expenditure but must take account of what interest each gives in its own regional context. In other words, a regional plan by a member State must be seen in the overall regional pattern of the Community.
  Having stressed the importance of regional development as one of the fundamental policies in the building of Europe, it would be wise to point out that this must be seen as a gradual process. The Commission therefore proposes to add a sum of 500 million units of account into the Community budget for 1974, 750 million units of account for 1975 and 1,000 million units of account for 1976.
  As regards the size of the fund, which some member States will consider too
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  large and others abysmally small for the task ahead, Mr. George Thomson, Regional Policy Commissioner, assured the European Parliament that the size of the fund that the Commission is proposing was big enough to make a real impact during the first years of operation but modest enough to be politically realistic. The vital point in Article 3 of the financial regulations was perhaps the cause of the most serious divergence of opinion between the Commission and the European Parliament. The Commission said that the Council shall, acting unanimously, adopt lists of regions and areas which may benefit from the fund and shall thereafter, acting by a qualified majority, amend the list as need arises. On a vote in the European Parliament—the Conservative group and some of the Liberals voted against—this was changed. The result was that the Council, acting as a qualified majority, should adopt a list of the regions and areas as well as amending the list.
  As the rapporteur and I pointed out, that would not be acceptable to the Council of Ministers. The Commission re-emphasised that it was not possible for the Council to accept the proposal and the Commission, therefore, would not be able to put it forward. Apart from that particularly political amendment, there was unanimity for most of the debate.
  The list of regions and areas to be accepted by the Council of Ministers works on a three-point criteria : heavy dependence on agricultural employment, heavy dependence on employment in declining industrial activities, and a persistently high rate of unemployment or net outward migration.
  Article 4, on the amendment made by M. Delmotte on infrastructure investment, was further enlarged to include the words "infrastructure investment" in the broad sense required for the development of a region within the framework of a regional development programme. The Commission's document has been improved in three areas, and if M. Delmotte's second report is accepted there will be very few loopholes.
  The first and perhaps most important and worrying aspect when setting up a

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  fund of any size is that there should be adequate budgetary control procedures. The Committee on Regional Policy was sufficiently concerned to put in Resolution 18, which included two points on this very matter. One was the proposal concerning possible inquiries or verifications on the spot by the Commission and, to save any time lag, the Commission's right of initiative in this context.
  The second area was in the parliamentary view that the Commission had rather neglected the human and social factors in regional planning. The explanatory statement of the report said that the protection of the environment, including rural and mountain areas and water conservancy schemes, as well as training or further training schemes, should be no less important in the infrastructure context than the construction of roads, railways or airports, and that the modern Community would not be content that legislation in the form of regional planning should concentrate only on creating or preserving jobs. In other words, there are human factors to be taken into account, and the environmental amenities of an area are almost of the same importance to those who go to work there as the desirability to provide employment.
  It was apparent to the European Parliament, especially after a delegation visited Sicily, that in some regions there was inadequate analysis and data from which to form even the embryo of a regional plan. Parts of the Community, through lack of progress over many years, have become disheartened and failed to spend sufficient on creating a national regional plan without which the new Regional Policy Committee cannot make decisions.
  The United Kingdom is in a very strong position here. We lead the Community in regional programming, and the studies that have been undertaken over the years will stand us in good stead when putting our proposals before the new Regional Policy Committee.
  I have one last point, which is perhaps a criticism of the Commission's document where is states that the lowest limit of help, whether in industrial or service industries which benefit from a national system of regional aids, must be of the order of 50,000 units of account and involve creating or maintaining jobs. It seems wrong that the Regional Development Fund should encourage only the
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  larger industrial giants. My view is that the smaller companies should be encouraged, especially as they may well create or maintain employment for a small community.
  The ideals of the Community's regional policy are indeed from the heart. To improve the standard of living of one's fellow man must be one of the highest ideals. While doing this, however, the Community must present a human face instead of the impression gained by so many people, including hon. Members of this side of the House, that the EEC is filled with faceless bureaucrats. Perhaps the Commission could alter its ruling on this matter. Time and again the Irish delegation made the point that 50,000 units of account might not be much in Western Germany but would support quite a large cottage industry in the backward regions where it is so vitally essential that employment is maintained and, indeed, created.
  Thank you, Mr. Deputy Speaker, for your indulgence. I hope that the House will support my right hon. Friend on regional policy when he replies.
  6.25 p.m.
  Mr. William Rodgers: In the eyes of some of my right hon. and hon. Friends, the Opposition's approach today has the merit of using the Government as a pretext to attack the Common Market and using the Common Market as a pretext to attack the Government. They will understand that I have more sympathy with the latter approach.
  I think that my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) will understand that I should find it debilitating to endorse every dot and comma of what was said today by my right hon. Friend the Member for Stepney (Mr. Shore). I intend my remarks to be a little tangential without being too oblique.
  I should have preferred the debate to have taken place in less of an atmosphere of confrontation, because I am far from sure that the country welcomes or benefits from the degree of confrontation that we sometimes choose to contrive. There are many issues on which there can be arguments without digging two trenches into which all right hon. and hon. Members on either side are then expected to

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  disappear. There is much to be said on the Common Market which comes into that category.
  I find, rather to my surprise, that I have made only three speeches on the Common Market in this House. I hope that my hon. Friend the Member for Ebbw Vale will regard that as a sign of good behaviour. The first was my maiden speech in 1962, the second was during our six-day marathon in October 1971 and the third is today. On the two previous occasions I advocated Britain's membership of the European Economic Community. I hope that it is not too provocative in these days to say that I have no wish to retract a word of what I then said. I believe that continued membership of the EEC is in Britain's best interests. I believe that the cost of coming out, in terms of both economic survival and national morale, would be intolerably high. But this does not preclude an approach to membership which is aggressive and reforming.
  There are many areas in which I simply do not trust the Government to show either strength or vision. In my view, a competent Government—one which is neither inflexible nor doctrinaire—could pursue Britain's interests in the Community with great tenacity and resolution without disrupting it. The real virtue of the Community is not in the Treaty of Rome or in what the Community now is, but in what it can become.
  There are real dangers in an approach to the Community which is sycophantic, but there are equal dangers in an approach which sees it as the root of all evil. In both instances judgment is distorted in order to prove a well-rehearsed case. Curiously, both sides can end up by talking of the same thing when it is not the most essential matter to discuss. There is a danger of this sort in relation to regional policy. I shall return to that in a moment.
  May I deal first with another pitfall—an obvious one, but tempting to both sides of the argument. It is to argue either that our present economic difficulties, including the rise in prices, are due to our membership of the EEC or that our membership provides the way out of them. This is the pitfall of escapism,
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  whichever way one looks at it. It is damaging to honest politics because, on the one hand, membership becomes a scapegoat and, on the other hand, it offers salvation. Either way we are escaping from responsibility.
  I refer only in passing to the rise in prices. I share the determination of my right hon. and hon. Friends to pin responsibility on the Government for making promises during the General Election which palpably they have been unable to fulfil. I also share their determination to show that a sliding pound has contributed massively to domestic inflation. It is for this reason that I welcome what I understood to be the reluctance of my right hon. Friend the Member for Stepney to put more blame than can be justified, and less than is sometimes suggested, on the Common Market.
  The reality on the economic side is that we in this country have failed through the inadequacy of our own efforts, both Governments and people. We shall succeed only in so far as we pull ourselves up by our own boot straps. The problems this year and next year do not result from membership of the Common Market. The ultimate solution to them does not spring from membership of it. We may argue—indeed we are arguing today—whether membership will impede or accelerate a solution, but there is no escape from self-help. Unless we come to grips with the all-too-familiar problems and find a solution to them, we shall be everyone's poor relation, whether in the Community or outside it.
  I have two points to make on regional policy. Neither of these points needs to be controversial, because I am looking less for controversy than perhaps are others on this matter. In the first place a Community regional policy msut not be regarded as a substitute for effective United Kingdom regional policy. In the second place, the existence of a European regional fund, much as it is to be welcomed, will not prove the existence of an effective Community regional policy. I add that I do not require from the Community that it should have a policy on every aspect of fife. I was a little puzzled by the Chancellor of the Duchy of Lancaster, who spent some time talking about Euro-wine and the problems of classification and then denied that Euro-

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  beer was under consideration. I would not welcome an initiative from Brussels which sought to put its stamp on many matters which are best left to separate members of the Nine to decide. This seems to be a proper area of pragmatism—
  Mr. Marten: Hear, hear.
  Mr. Rodgers: I am glad that I carry with me the hon. Member for Banbury (Mr. Marten). Pragmatism embraces the idea of deciding at any time what makes the best sense and not moving further and faster than that.
  There is a strong case for a Community regional policy, but it is far too soon to see it as a substitute for a continuing regional policy of our own. There is a possibility, however much it may be denied, that, once the regional development fund is established, the Treasury will seek to turn off the tap here as the cash flows from Brussels. That would be cynical in the extreme and unacceptable. I hope that the House will be vigilant in ensuring that it does not happen.
  It is also unacceptable to phase out the regional employment premium rather than to fight tenaciously to get its principle accepted in the Community as compatible with competition policy. The present position is quite extraordinary. There is no other aspect of regional policy where everyone—the TUC, the CBT, planning councils, academic experts—is out of step with the Government, which is the way the Government seem to see it. I accept that nobody has yet found a way of quantifying the number of jobs created or preserved since the introduction of REP, but the figure of 50,000 in the first three years seems likely to be near the mark.
  In those circumstances, and until a more complete analysis of jobs created and of real costs is available, REP should be retained. This is precisely the sort of area in which the continuity in regional policy essential to its success can be achieved. The Government should say that there is no question of phasing out REP before 1978 and no question of doing so afterwards if the benefits are shown to be sufficient. The Community must be told that the case against operational
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  subsidies must be qualified for the sake of regional development.
  My second regional point is that, despite what I have said about REP and the welcome I give to far more money being spent in the assisted areas, I believe that financial incentives are only one leg of regional policy. Quite as important is the stick element in the stick-and-carrot equation, by which I mean the whole industrial development certificate procedure. If I had to choose—if the Government had to choose—I would put IDC policy first among my priorities. I do not believe that, given particularly the lack of continuity in regional policy, financial incentives are the decisive factor determining investment in the regions, especially for larger firms. We all know the other factors. I refer to communications, the availability of labour and the overall environment ; all play their part. But in the end there is one brutal fact that persuades firms to go to assisted areas : they want to expand but are refused permission to do so elsewhere.
  Therefore, while I welcome the European regional fund and believe that it will represent valuable help, I should like to see Her Majesty's Government urging the case for a Community policy of disincentives. I put it in that way to embrace proposals for a congestion tax and other fiscal measures. But I am clear in my own mind that a Community IDC policy is what we want. I shall be looking to Brussels for progress on this matter.
  I believe that something else follows from what I have said. Regional policy in this country is largely taken for granted. There are arguments—no doubt my hon. Friends will be involved in them, if need be—about the refusal of an IDC in the Home Counties or in the Midlands. But there is a fundamental acceptance that the needs of the assisted areas come first and that we must redress the balance in favour of areas of high and persistent unemployment and of dereliction and decay. Perhaps we can learn something from the Community in seeing that there are other criteria which could be applied in Britain. For example, Hampshire does not seriously begrudge the special claims of County Durham ; Warwickshire is generally tolerant towards the claims of the Clyde.

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  This occurs because the whole country shares a political consciousness and the main political parties straddle both the more prosperous and the assisted areas.
  If I am right about the importance of a Community regional policy, it will come more quickly as the Community moves towards a political consciousness of its own and parties establish increasingly close links with their opposite numbers. It is in the interests of the assisted regions of Britain that there should be a growth of genuine political unity in Europe. I say "genuine" because, in line with most of my colleagues, I do not want to see Britain forced into a premature economic or monetary union. I do not believe that steps in this direction will turn out to be a condition of agreement to the establishment of a regional development fund when Ministers of the Nine meet next month. If it did, I would refuse to settle on such terms because a Community regional policy must stand on its own on merit.
  It is true that Britain's membership of the European Community still apparently lacks the full-hearted support of the British people. It is also true that there is much by way of renegotiation that a Labour Government should seek to achieve. If I may quote myself, as others so frequently quote themselves, I said in my maiden speech that it might require
  "an effort of pride and will ".—[OFFICIAL REPORT, 7th June 1962; Vol. 661 c. 711.]
  to take the plunge into the Common Market. It now requires a continuing effort of pride and will to ensure that the decision to do so was, as I still believe, in principle the right decision. Any vote I cast tonight will not be against the Common Market but against the Government.
  6.40 p.m.
  Mr. Ronald Bell: I found much to agree with in the speech of the hon. Member for Stockton-on-Tees (Mr. William Rodgers), though I disagreed with his conclusions. My only criticism of his remarks was that he used the Common Market to attack the Government and the Government to attack the Common Market. If I do not follow the hon. Gentleman into particularities, nor the hon. Member for Inverness (Mr. Russell Johnston)
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  nor my hon. Friend the Member for Southampton, Test (Mr. S. James A. Hill), it is because I think that we can drown in detail as a result of losing our grip of the substance.
  Procedural problems about the Common Market multiply upon us. What we need, however, as we approach the end of our first year of membership is a fundamental assessment in the light of accumulating evidence of whether the operation has been worth while or looks as though it might be worth while.
  I find no change in the nature of the main considerations. I see change only in the extent to which expectations have been fulfilled or disappointed. It was expected that the direct budgetary payments would be heavily to our disadvantage, and they have been. It was thought that a significant amount of what we paid would come back to us in various ways, and in that we have suffered disappointment.
  There are three groups of subjects which demand our main attention today. The first—not the most important, but the most tangible—is our economic experience. After all, this was floated originally upon economic arguments. That experience could not have been more disappointing.
  The generally acknowledged detriments and disadvantages were, in the argument for accession, to be compensated for and in some optimistic assessments dwarfed by what was called the dynamic effect of being in a large tariff area experiencing its competition and its opportunities. I never believed that those descriptive phrases stood up to any reasonably stringent analysis. As the seasons have passed, one has not needed the agonised yelps of Lord Stokes's second thoughts—not this time appearing in a full-page advertisement in The Times paid for by shareholders—to be alerted to how the dynamism was working.
  Reliance upon the cold douche effect of which we heard so much, if valid at all, must be combined with a deflationary condition in an economy. To attempt that cold douche effect during inflationary overheating was to ask for precisely those consequences which have followed.
  Reference has been made in passing to the deterioration of our balance of trade

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  with the Six. In 1970 we had a surplus of £64 million in our trade with the Six. In the first 10 months of this year we have a deficit—not on a strictly comparable basis, but roughly comparable—of £744 million. It is a form of dynamism, of course, but, if that is our dynamic effect, please may we not have one.
  The point which has not been mentioned but which is relevant in this context is that our balance with the Six has got worse appreciably more quickly than our balance with the rest of the world. What is more, our trade with the Six is more than two-thirds in manufactures whereas our trade with the rest of the world is only about half in manufactures and in quite large part in raw materials.
  My right hon. Friend the Chancellor of the Duchy of Lancaster could be right when he says that we are at that stage of the cycle where it is natural to suck in imports. However, the imports that normally it is hoped to suck in at that stage of the cycle are raw materials or semi-manufactures and possibly machines where we have lost the skill of making them. When we find ourselves sucking in washing machines and motor cars, I am not sure that that is in any sense an index of being in any specific stage of the trade cycle.
  My right hon. Friend consoled himself with the growth of our exports to the Common Market and said how competitive we were. But this is based upon depreciation of the pound. A country which depreciates its currency has for a time a competitive advantage, but I have always thought it to be a ruinous one. As the value of the currency sinks, so does the relative standard of life. It is being said all round the world that the more clever course of action is so to conduct the affairs of a country that it is in a position or is forced to revalue its currency upwards. A currency should float up and not down. It is those countries which do that which enjoy an advanced standard of living. It is no advantage to sell more and more physical products at lower and lower prices in order to buy at enhanced prices those products brought in from other parts of the world.
  As for the inward flow of investment, I do not welcome it. Perhaps I stand apart from many in that. But I do not see with
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  pleasure considerable parts of British industry being taken over by foreigners. However, the impetus for that comes from our depreciated currency. It is easier for people abroad owning currencies which are appreciating steadily in terms of ours to buy up our assets. That is the reason for the inward flow, and it is also the reason for the rather poor outward flow of investment.
  The second main area of anxiety concerns the future working of our relations with the Common Market. First there is the momentum of harmonisation, what Dr. Dahrendorf described in his memorable articles as "harmonisation for harmonisation's sake ". I did not think that I should have to quote those articles again today. For that reason, I do not have them with me. But Dr. Dahrendorf's description in illustrative detail of "harmonisation for harmonisation's sake" as carried through by the Commission was illuminating and amusing, and it has never been denied. In the established context of the Treaty of Rome there is no way of stopping it. It is not stopping, and it will not stop.
  My right hon. Friend illustrated it in a way. He said that we were developing a unified approach to wine after 200 years. Who wants a unified approach to wine? Whatever else has gone wrong in the past 200 years, the attitude to wine has been admirable, as have been the wines. I have the greatest reservations about any kind of Commission-approved wine. Somehow I do not think that we shall have an appellation controlée from Brussels which will ever appeal to the sophisticated market for wine.
  Then we have something called value added tax. I have heard it commended on its merits. I have heard it said that we did not have it because we were joining the Community, that we had it because it was so good that we could not miss it and that it is just a coincidence that it happened to be necessary for joining the Community. I have never known a more stupid and silly tax than value added tax. The very principle of it is lunatic. Why tax people for adding value to something? To tax them for detracting from its value would make a certain amount of sense. But apparently the theory is that, the more usefully anyone operates or the more he adds to the

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  value of a product, the more it must be taxed. The very concept is absurd.
  That, however, is not the real fault. The real fault is the absurd waste of human time and energy that every registered person is experiencing as part of the payment for this escapade. It is bad enough as it is, but we all know that harmonisation awaits us. There is a motion on the Order Paper about VAT on books and newspapers, we expect to be faced with VAT on food, and there is talk of VAT on new houses. Why? It is because we must harmonise.
  This sort of tax goes down fairly well in continental Europe. The people there are used to the labyrinthine burrowings of bureaucracy. They are used to politics which are either corrupt or sound like a grocery list. They have immensely complicated laws to which they conform—but not very much. Over here we have moderate and sensible laws, we have great respect for them and we conform to them strictly. That is why I have always thought that to try to construct the mechanics of a joint community between the Latin races and ourselves would be extremely difficult. I doubt whether it can ever work. Let us see how it has worked.
  We heard from the Committee under the chairmanship of the hon. and learned Member for Northwich (Sir J. Foster) that the volume of regulations coming out every year from the Council of Ministers and the Commission is 3,000. All those regulations are law. I agree with the analysis of the hon. Member for Inverness that we cannot physically scrutinise 3,000 laws and orders or take effective action about them. There are too many. Of those, 300 are regulations from the Council of Ministers and, therefore, of some importance. We have all our own regulations which almost swamp us. As the hon. Member for Inverness said, for us to have control over this delegated legislation would be to deny the supranational character of the Community. The hon. Gentleman's analysis was right but his conclusion was wrong. He said, in effect, that we must not try to exercise control. That must be done, if at all, in Strasbourg.
  Some of us have had experience of Strasbourg, simultaneous translation and all the rest. Any idea that an assembly
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  in Strasbourg, directly elected or not, with party meetings presided over or not by the right hon. Member for Kettering (Sir G. de Freitas), can exercise the day-to-day supervision and control over secondary legislation that this House manages with difficulty to exercise is ludicrous. My right hon. Friend cannot reasonably be asked, as he was asked today, to tell us what view the Government will put forward at the next Council of Ministers, what proposals they will put forward and what arguments they will press. To do so would weaken his bargaining position. But when the discussion is over, it is too late, it is done and we cannot do anything about it.
  My third and last area of anxiety is that of sovereignty, especially parliamentary sovereignty. We are talking today about monetary and economic union, but the staggering thing is that all this grew up after the Act was passed. Until then we were told that sovereignty was a red herring drawn across the trail by biased people like me, and, goodness me, I am biased on this subject. The proposal was for a Common Market, which was about economics. Political and monetary union were subjects which we should come to and decide in the fullness of time. The fullness of time was about minus three weeks before the Act came into force ; when there was a summit meeting and it was decided. I did not even know that it was being talked about, nor did most right hon. and hon. Members.
  Today my right hon. Friend says that the summit requires that we achieve this union by 1980. The summit was my right hon. Friend the Prime Minister and some other people from various parts of Europe who were talking about something that you and I, Mr. Deputy Speaker, did not know about, and they decided it among themselves. From then on it has been as though the summit was the top of Mount Sinai with 12 tablets of stone being handed down. That was all decided on the summit amid the clouds, and all we can do today is to fiddle around with the minor mechanics.
  This is staggering when we remember the basic assurance upon which our membership of the Community was pushed along. The White Paper said

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  that there would be no erosion of essential national sovereignty. But what national sovereignty is left if, before even starting the course in 1972, we are committed to economic and monetary union. Is not that an erosion of national sovereignty? It is no good talking about equal partners sharing in a wider sovereignty. That could be considered on its merits. This is certainly an erosion of national sovereignty. At the time when that phrase was used in the White Paper, a columnist in the Daily Telegraph described it as a cold, deliberate lie. Looking back, it seems to me to have been a little cynical.
  France is pushing forward monetary union, and for a good reason. France wants European monetary union to save the common agricultural policy which will be destroyed—over France's dead body—by constant confusion and changes in the value of monetary units. The dollar no longer being reliable in this respect, France wants monetary union for her own selfish national interest, and we are apparently foolish enough to go along with her on a cloud of idealism. We have not bothered to formulate this policy or to mention it to Parliament in such a way that Parliament can record its view.
  There is in the Vote Office a document of 800 pages containing tariff changes which will take effect on 1st January, none of which we can do anything about. I guess that hardly one hon. Member has read that document. There is to be an 8 per cent. duty on lamb. I am sure my right hon. Friend will agree that he was not able to give a very good answer on lamb to my hon. Friend the Member for Banbury (Mr. Marten). It is useless to deny that sovereignty is passing from the House, and the Chamber will stay empty so long as we are the helpless spectators of processes going on elsewhere which alter our national life and over which we have no control.
  The House and the country were deceived at all material times as to what was intended and what would follow, and that process is continuing. The attempt to commit us to economic and monetary union without first coming to the House with the proposal and debating it was monstrous. The Government should have obtained the authority of
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  Parliament on a free vote on that matter, which vitally affects the whole structural future of the nation. Because of that, and because of my protest against it, I shall stay out of the Lobby this evening, when it is difficult to vote in an intelligent way on a motion for the Adjournment. But in that way I will show my disapproval of the conduct of this matter at every stage from beginning to end.
  7.0 p.m.
  Mrs. Renée Short: The hon. and learned Member for Buckinghamshire. South (Mr. Ronald Bell) has indicated some of the ways in which the House and the country were pressurised to support Britain's entry to the Common Market at the time when we were debating it and voting on it. He indicated areas where the Government have a considerable responsibility for the way in which they misled the public and misled this House.
  There is one other fairy story that I frequently recall when we have constant battles with the Minister for Agriculture on his appearances on the Front Bench at Question Time. We ask the right hon. Gentleman from time to time what has happened to the rising cost of living since we entered the Common Market or since the last General Election. We question him about the number of items of basic foodstuffs that have risen in price, and about percentage increases. There is always a dramatic increase.
  One of the stories implied at the time Community negotiations were going on—I am sure my hon. Friend the Member for Stockton-on-Tees (Mr. William Rodgers) will recall it—was that the wage packet of Common Market workers contained £7 more than the wage packets of British workers. The implication was that if the United Kingdom entered the Common Market our workers would immediately receive £7 more a week. But that did not happen—they certainly need it today—and it has been one of the underlying factors of unrest among the trade unions, whether representing miners, hospital workers or ambulance drivers. Ordinary families simply cannot manage today because of the ever-increasing burdens that are thrust upon their shoulders.
  The Government are underestimating the damage that has been done to the ordinary families of this country by our

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  entry into the Common Market. Many of my right hon. and hon. Friends, who are unrepentant and ardent Marketeers, also underestimate the damage. The British people are now completely disenchanted with the whole Common Market idea. They are disgusted by the Government's refusal to listen to their views and criticisms and because at the last election the Government rode roughshod over them and over Parliament by not allowing any amendments to the Bill which was pushed through the House. They are completely disillusioned with the Government, who have been aided and abetted by many right hon. and hon. Members on the Opposition side. These two factors have made a deep impression on the electorate. We should not underestimate the damage that has been done to our democratic processes through the Government's actions in the way they have dealt with the Common Market legislation and by the support they received from some Opposition Members.
  My hon. Friend the Member for Stockton-on-Tees, who has now left the Chamber, said that there would be a row if we withdrew from the Common Market when the Labour Party's policy was implemented after the next General Election. But who will make the row? It is certainly not the British people.
  A recent public opinion poll was conducted simultaneously in Britain and in France and was reported widely in the Press. [Interruption.] If the hon. Member for Southampton, Test (Mr. S. James A. Hill) would listen, he would acquire some information to take back with him to that talking-shop. The opinion poll showed that only 29 per cent. of British people thought that we received any benefit from belonging to the Common Market. Other interesting figures are that 59 per cent. of Labour supporters felt that we were harmed by our membership and 42 per cent. of Liberal supporters thought we were being similarly harmed. Therefore, those voting Liberal who think that they are voting against the Common Market should think again. [An HON. MEMBER : "They will."]
  The forecasts of those who opposed entry to the Common Market are now coming true. That is understandable because people are being battered almost daily by rising prices and by the additional burdens they are being asked to
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  shoulder while the Government pursue their road to wage freeze, clobbering the wage and salary earners. They see decisions being made increasingly not in this Parliament but in Brussels or somewhere else.
  The Chancellor of the Duchy of Lancaster made a not very exciting speech when he opened the debate today. But on 25th July he came to the House and announced what his masters in Brussels had decided to inflict on us—the supplementary budget of £400 million, representing an increase in the total Commission budget of about 25 per cent., requiring an increased contribution by Britain over and above what was proposed in the last public expenditure White Paper. The figure mentioned in the White Paper was £125 million and I got the impression that the figure was increased to £160 million. I may have misunderstood the right hon. Gentleman when he said that it would add another £90 million. Much of this is due to the common agricultural policy.
  The Chancellor of the Duchy of Lancaster told us on 25th July—this is the point I wish to make about decisions being made elsewhere—that the supplementary budget had been only defined the day before. He said we need not worry, because part of the added cost included a small amount of subsidy for our butter prices. He repeated that today and said that we were lucky to be subsidised to some degree. This also includes the cost of the whole system, which is completely discredited, with dairy produce being offered for sale at prices people cannot afford and then stored because it cannot be sold. Millions of tons are stored in different countries, and then it is declared unfit for human consumption and fed back to the cows from whence it came. This is a fantastic, Gilbertian, crazy situation and it is why people are so utterly disgusted by what is going on in the Common Market, to which we have to make our financial contributions.
  Our contribution to the supplementary budget has paved the way to cut-price butter sales to the Soviet Union at a loss of over £100 million. That contribution also covers export subsidy frauds on a large scale. It is worth reflecting that, if we had not been members of the Community, we could have

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  bid for some of that surplus butter which was sold to Russia at 5p a lb.
  The British people are being led up the garden path and they are taking a beating. We have the position that Agricultural Ministers fix prices and Finance Ministers fix the level of costs to be made by each country. The figures are fixed one day and announced by the right hon. Gentleman in this Parliament the next day. What can we do about that kind of little package? Because we were hoping to cajole a little more money out of the Community's Social Fund, we took it rather meekly. This all adds to the growing deficit in our trade with Common Market countries.
  Again, we had all the rosy propaganda before we joined about the enormous market we would have for British goods, but British exports are not doing as well as exports from the Common Market countries to us. Over the period 1968 to 1972, United Kingdom imports from the EEC increased by 12 per cent., whereas our exports increased by only 10 per cent. But what is more serious surely for us, with all our Commonwealth tradition, is that our Commonwealth trade has declined to a greater degree than our Common Market trade has increased. That is a sad position which creates great difficulties for the economies of those Commonwealth countries.
  All this adds weekly and monthly to our balance of payments deficit. The Chancellor of the Duchy of Lancaster made the fantastic statement that he was not bothered about it. He must be the only member of the Government who is not. His Front Bench colleagues are very worried indeed. This adds to our balance of payments deficit, to inflation and to our general economic malaise. The working people are being expected to carry the main burden, even though they earn as little as £25 a week, as many workers now on reduction of overtime or working to rule are receiving.
  It is a pity that the Chancellor has lost that abrasiveness which he showed when he first appeared in the House and told us about all the broken-down old ducks he was going to aim at. There are many at which he could be directing his former abrasiveness, thereby bringing some benefit to the British people.
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  Only two or three days ago in this House his right hon. Friend the Minister of Agriculture, Fisheries and Food had to confess that the cost of food in this country had risen, only up to the middle of October, by 45 per cent. since the election. Of course, since 16th October the tame Price Commission has allowed many additional price rises. In the year ending October 1973—only one year—bacon, for example, rose in price by between 40 and 55 per cent., depending on the cut. Fresh fruit prices rose by 32 per cent., and taking 10 basic items the average housewife's grocery bill has risen from £3·42 to £5·50. The public see that it is entry to the Common Market that has brought about these increases in basic and important foodstuffs.
  Mr. John Davies Mr. John Davies indicated dissent.
  Mrs. Short: It is no good the right hon. Gentleman shaking his head. These increases have been listed from time to time in answers to Questions by his right hon. Friend. The Minister of State for Agriculture, Fisheries and Food admitted the other day that these prices were due to the common agricultural policy. It is not often that Government Front Bench Members are so honest, but the hon. Gentleman was. Meat has disappeared from many families' diets with increases in price of from 65 to 135 per cent.
  Reverting again to the theme of the hon. and learned Member for Buckinghamshire, South, the Government's White Paper on entry to the Common Market contained stories about food prices rising by only 2½ per cent. a year. They have been well overtaken and show that that White Paper was the most misleading document that any Government have ever published. Perhaps the right hon. Gentleman will tell us when he expects VAT to be added to food prices. Or is he saving that until after Christmas, along with petrol rationing? What about the milk tax which has been discussed?
  Mr. Arthur Lewis: And the house tax
  Mrs. Short: Yes, that too.
  Unless we get out of the Common Market, there will be no end to dear food for Britain. Prices will continue to escalate. The enormity of the Governments actions is shown in the import levies that we now have to pay on food

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  coming in from Commonwealth countries—£96 a ton on New Zealand cheese, £195 a ton on butter from outside the Common Market and £255 a ton on Cheddar-type cheese from Commonwealth count-tries other than New Zealand. And at the end of the transitional period these remaining sources will not be available to us.
  The Minister of State for Ministry of Agriculture, Fisheries and Food admitted on 22nd November that these rises were all part of the common agricultural policy. It was not world food prices any more or greedy trade unionists asking for more money, but the lousy system of which we are now part and which we will not be out of until after the next General Election, when the Labour Party is able to carry out its proposals.
  Commissioner Soames recently said that the increased cost of food due to joining the Common Market was 1 per cent., whereas Commissioner Thomson, who obviously had not been in touch with him, said that it was about 5 per cent.—that for every 10p increase, only p was due to our entry. It appears that the two Commissioners need more contact and possibly should use the same computers It is not surprising, therefore, that the Danish public opinion polls show that the Danes, if they had a chance to vote again, would vote overwhelmingly against entry. This is what would happen in this country, as the recent poll has shown.
  Mr. Arthur Lewis: We know that the Government tell some lies deliberately, but to be fair to them it must be said that they sometimes cannot tell the truth. For example, we have had to increase the price of steel and we will have to do so again. A number of steel objects, like machines and cans, are used in food manufacture. There is no way of quantifying the increase in food prices due to the steel price increase. Therefore, if the Government are telling lies, they sometimes could not tell the truth even if they wanted to.
  Mrs. Short: My hon. Friend is right. All these increases in the price of steel and so on will presumably be reflected in price rises for which food manufacturers will apply again to the Price Commission,
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  because of raw material price increases.
  The energy crisis has created an appalling situation in the Common Market. This band of brothers apparently were not prepared to get together and support their Dutch brother who had been deprived of oil through Arab blackmail. The Foreign Ministers of the EEC were not prepared to share and share alike. They have in fact made placating noises to the Arabs, whereas before many of them supported Israel. However, I understand that President Pompidou has now done a deal with the Dutch Foreign Minister and is prepared to supply the oil the Dutch need, providing that the Arab countries do not know too much about it. Who knows what price will be extracted from the Dutch by the French in future deliberations of the Council of Ministers?
  The energy crisis shows the inadequacy of the Common Market set-up. This is not a Community large enough, powerful enough, or even with the will, to deal with a major world crisis of this kind. This indicates that this kind of crisis needs to be dealt with on a worldwide scale by the United Nations or some organisation of that kind. The Common Market, which is only a part of Europe, is not adequate to deal with a major crisis when such a crisis confronts it.
  I endorse the remarks of hon. Members on both sides of the House who have said that only when this matter is debated at the next General Election and when the people are able to express their views—they were not able to do so at the last General Election—shall we be able to see the real opinion of the British people.
  The Opposition are committed to renegotiating not only the common agricultural policy but also other aspects of the Common Market treaty. We are committed to put these matters to the people by referendum or some kind of consultation with the people. If we do not get better terms and if the people say that they do not accept the terms, we shall withdraw. There will be no row. There will be a great sigh of relief throughout the length and breadth of the land. I hope that we shall soon have the opportunity to put this matter to the people of Britain.
  7.21 p.m.
  Sir Douglas Dodds-Parker: I do not think that the hon. Member for whichever part of Wolverhampton it is that she shares with my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell)—
  Mrs. Renée Short: Wolverhampton, North-East.
  Sir D. Dodds-Parker: I do not think that the hon. Member for Wolverhampton, North-East (Mrs. Renée Short) agrees with me about a number of things, one of which is the definition of democracy. In view of the recent by-elections, it is unlikely that her prognostication of a change of Government in the near future will be proved correct
  Mrs. Short: Wait and see.
  Sir D. Dodds-Parker: Equally, the hon. Lady's definition of democracy is not the same as mine. She maintains that a policy accepted by a broad body with all-party support is damaging to democracy. The decision in October 1971 to enter the Community was taken by a majority of well over 100 Members, from both sides of the House.
  Mr. Arthur Lewis: On a false prospectus.
  Mrs. Short: And divorced from public opinion.
  Sir D. Dodds-Parker: This is, however, the democratic system. If it is said that nationalisation after the war was done with the will of the British people as a whole, that is entirely contrary to the facts. However, I do not want to take up too much time.
  I support what was said by the hon. Member for Stockton-on-Tees (Mr. William Rodgers), who made a very good speech. Having said what he did, the only odd thing was his non sequitur in supporting the Opposition Front Bench in its extraordinary motion. I do not agree that one is either sycophantic or antagonistic if one supports the Community. I have supported it, informing the House, ad nauseam, because I believe that in uniting Europe we can prevent future wars. I have a memory going back to Doctor Brunning, a Liberal Chancellor, in 1929. I believe that his overthrow led to Hitler. I cannot prove that, but I
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  shall always believe it ; and we cannot have a united Europe without a united economic policy. That is why I and many hon. Members on both sides of the House support the work that we are doing in trying to unite Europe. I see no other way of carrying out that aim.
  I am fortunate enough to be a member of the European Parliament. It is a great honour—
  Mr. Lewis: How did the hon. Gentleman get elected to that?
  Sir D. Dodds-Parker:—to be a member of our first delegation to that Parliament. I support my hon. Friend the Member for Saffron Walden (Mr. Kirk) in his remarks that the sooner we have direct elections the better ; and the sooner that we have all the meetings in one place the better. The holding of direct elections, however, is probably a much more difficult matter than individuals realise. It is essential that members of the European Parliament should have a fairly firm base at Westminster when they go abroad to represent their enlarged constituencies. At least until we have the Channel Tunnel, which will help with the problems of travel, it will be difficult to do the job properly, who ever is elected and in whatever circumstances. But we must press on with those two aims.
  I am grateful that, in the meantime, the difficulties are accepted by all of our members of the European Parliament. We go there to carry out some of the most interesting and potentially constructive work which I have had the luck to be allowed to do in the course of the last 30 years.
  Listening to some speeches made to day, from both sides of the House, one finds it difficult to equate what is happening in the European Parliament and the Commission with the sort of things being said here, and the implications that there are people who are trying to do this country down. That applies particularly to the tediously repetitious speeches of the right hon. Member for Stepney (Mr. Shore). This afternoon, the right hon. Gentleman said that he was deeply ashamed. He often looked like that when he was a member of the Labour Government. He says that when an application was made to join the Community he did not leave the Cabinet. I am not sure where he stands on the matter, but

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  certainly the Labour Party was committed to seeking membership of the Corn-Community. Whatever twists and turns the Labour Party now takes, a substantial body of opinion was behind them then.
  Mr. Arthur Lewis: The present Government do U-turns every day.
  Sir D. Dodds-Parker: If these interruptions continue, Mr. Deputy Speaker, may I beg leave to move that breathalysers be brought into the Chamber?
  Mr. Deputy Speaker (Mr. Oscar Murton): That is not a matter for the Chair.
  Sir D. Dodds-Parker: Perhaps I can continue my speech without the interruptions.
  Mr. Lewis: This is not the assembly of Europe.
  Sir D. Dodds-Parker: When one goes to Europe one finds it difficult to explain what the British Labour Party is doing. No doubt Labour hon. Members will vote for the Adjournment on lines which they cannot prevent. Those of us who remember well Mr. Ernest Bevin, and all the other leaders of the Labour Party who helped social democracy to get going in Europe in the years after 1945 will find extraordinary what is happening in the Labour Party at present.
  Mr. E. Fernyhough (Jarrow): Between 1951 and 1955 the late Sir Winston Churchill was Prime Minister. If any man was the founder of what the hon. Gentleman calls the new Europe, it was Sir Winston Churchill. When he had the power to become associated, he ran away from it as though it were an explosive bomb.
  Sir D. Dodds-Parker: I agree in part with the right hon. Gentleman. I agree in part that all of us who had a chance after the war to press on and to write the rule book then, did not do so. I share in any blame that the right hon. Gentleman ascribes. I accept that criticism. But now that we have taken this decision, it is right to press on and do our best.
  I think that the right hon. Member for Stepney said, "I always back a country faced by an Arab oil boycott." Why did not the Labour Party back
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  Britain in 1956? I cannot help remembering that. Of all remarks to come from the right hon. Gentleman at this juncture, that was about the last thing, I would have expected from the Opposition Front Bench.
  I should like to add to what my right hon. Friend the Chancellor of the Duchy said about the Commission. My experience of all levels of members of the Commission and of the officials of the committees with whom I have been lucky enough to work in the last 10?? months is that they are dedicated men and women of great experience and extremely helpful to the new members. It is inconceivable that they should be what has been implied by some hon Members on both sides of the House—a gang of individuals trying to do this country down. On the contrary, they are trying to construct policies which will help regionally, socially and economically in practical ways. They work closely between the Commission and the Members of the Parliament to try to agree policies which are then put up for final decision by the Council of Ministers. This has been a very useful joint effort. Britain can contribute. I do not wish to appear arrogant as I do not claim to be an expert on procedure and other important things, but when one has had the advantage, for example, of starting and finishing on time, one finds that it is little things like that which matter. But we also have much to learn.
  I believe that committees are very useful institutions. They enable Members of all parties—and, in the case of the European Parliament, of all countries—to work out policies in some detail, and with the rapporteur who then puts forward an agreed resolution, get through a tremendous amount of work. My hon. and learned Friend the Member for Buckinghamshire, South (Mr. Ronald Bell) referred to the thousands of orders which go through this House and which are looked at by some committee or other but not usually by all Members of the House. I feel very strongly as a back-bencher that, by my work in the committees of the European Assembly, I have more chance of discussing a lot of subjects of interest to my constituents than I have here. The short general debates are of very considerable value, and enable me to do a lot to

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  inform myself and my constituents of some of the problems. The common agricultural policy is a method which in Europe is believed to be the way of feeding an ever-increasing population, as world supplies of low-cost food are being drawn in elsewhere.
  I do not have much time to go into policy matters, but for four months I was on the Public Health and Environment Committee, dealing with problems such as air and water pollution. I should like here to say how much I regret that Sir Gerald Nabarro will not be here to present another Private Member's Bill. His Clean Air Act of more than 10 years ago was a landmark in cleaning up pollution in this country, and in setting a standard which other countries can follow.
  With regard to the harmonisation of drugs, we do this not merely for the sake of harmonising but because it is necessary. As a Danish Social Democrat friend pointed out, it is necessary to watch very carefully the increase in drugs to make certain that they are properly harmonised if they are to be sold freely throughout the Community. Those are some of the points which are cropping up the whole time, about which one has a chance of talking.
  The second committee on which I sit is the Social Affairs and Employment Committee which deals, for example, with the problems of migrant workers. There are 10 million in the Community, and the United Nations estimate that by 1980 another 11 million will be needed. Where they are to come from, nobody quite seems to know. We have had a couple of million in the United Kingdom. There have been a million Commonwealth, a million Irish and several hundred thousand migrant Scots, many of whom have become sedentary over the last 300 years. They all get the vote and the system works well. Since 1945, we have also had a number of others such as Poles, and we have a policy towards migrants which is second to none.
  Mr. Deakins: How can Scottish people be immigrants within the United Kingdom?
  Sir D. Dodds-Parker: I am sorry. I should not have tried to make that kind of joke.
  Mr. Lawson: Will the hon. Gentleman agree that some Scottish people are trying to make themselves immigrants?
  Sir D. Dodds-Parker: The point I am trying to make is that we have quite a lot of experience in the United Kingdom. There are said to be 46,000 migrant British in North Germany, though I cannot believe that there are as many as that. This is a problem which we must watch, but it will not affect us so much as other countries in the Community because we already have a good policy, which deals with the problems that arise when people come here to work. We have our Commonwealth friends who come in and others who come from the Community, but there is also a third group who come from countries which are not in the Community, and our experience can be shared with the rest of the Community.
  We can get considerable help from the Community on retraining and disablement and this is a method of exchanging experience and information. The Committee studies worker participation as being most important ; and this subject is being studied in this country. I know how limited is my own experience. I regret that in these committees there are no hon. Members from the other side of the House, who could add their experience to the discussions taking place. However, I understand that the trade unions are sending representatitives and they will be able to add their experience and make practical suggestions in what is the most important area of policy for the immediate future. I do not mean that legislation will necessarily be required, but there should be general discussion leading to certain policies.
  In the Development and Co-operation Committee in which I make my main effort there are great new ideas, some of which are based on our experience here. The stabilisation of export earnings could give a stable income to a number of developing countries. In some ways, the idea is based on experience of the Commonwealth Sugar Agreement made under the Labour Government of some 25 years ago. This could be a very important way of giving developing countries security of income, and could also allow us security of supplies of raw materials which may well become harder to obtain in the future.

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  The associates and associables are at present negotiating, and it is very good that at this stage they should have come together to that extent. The Mediterranean is a very important area. Traditionally, it has been part of the European complex for 3,000 or 4,000 years, and what is happening in the eastern Mediterranean is of the greatest importance to Europe. That is why Europe should take a lead in underwriting any final settlement at the eastern end of the Mediterranean, after nearly 30 years of trouble.
  I have always been a great supporter of preferences. I do not want to be too controversial, but I cannot help thinking of the 1947 American loan which a number of us voted against because it froze Imperial Preference and insisted on convertibility. There was convertibility, but the whole lot ran out on the day after the summer recess of 1947 began. But there was a freezing of preferences under the GATT, which led to the disappearance of Imperial Preference. However, I believe that the system is now coming back and it could be of considerable help to the developing world beyond the associates in the new agreement, which I hope will be carried into effect by the end of 1974.
  On the proposals for General Specialised Preferences, details fill perhaps 150 pages. If we can press on with this purpose, we can draw in more semi-manufactured goods and primary products from outside the Community. We might even be able to reduce the number of workers which the United Nations say we shall need to bring inside the Community.
  The policy of developing countries with the Community appears to be trade rather than aid. So proposals such as those on stabilisation of export earnings can be much more valuable than some of the other suggestions. If we can give countries an assurance that they will sell their products to us, we must in return be assured that they will produce the raw materials, especially the fuel, which is so important to the whole world.
  I read with interest the Foster Committee's report which makes useful initial suggestions for consideration by this House. All of us who take part in the European Parliament are only too anxious that we should consult as far as possible
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  with individual Members and with party and all-party committees because we believe in parliamentary control. We are elected to exercise that control, to vote for Supply or against it, but not to govern the country, because that is done by the Government Front Bench, for better or for worse. In the European Parliament, as here, we must make even greater efforts to control the expenditure, and I believe the Foster Committee sets a very good first example of how this should be done. I hope from that beginning we shall proceed to even more effective control.
  7.42 p.m.
  Mr, Eric Deakins: The hon. Member for Cheltenham (Sir D. Dodds-Parker) showed his genuine and usual concern for the problems and work of the European Assembly. Hearing some of the speeches from the Conservative benches, I feel that the debate has assumed the form of a report-back session by those hon. Members who have been voted to go to the Assembly.
  We are not debating the European Assembly. We are debating the problems facing the British nation and its prospects as a member of the Community. I shall devote myself entirely to one prospect to which allusion has already been made by a number of hon. Members—the prospect of political union by 1980. It is a matter which had attracted very little attention in the House and in the country before tonight's debate. That is quite extraordinary in view of the clear and definite commitment given in paragraph 16 of the Summit communiqué of October 1972. Even if we did not recognise its importance at the time, the Prime Minister certainly did. In his report to the House he said :
  "The main decision of the summit conference was that the member States of the Community affirmed their intention to transform the whole complex of their relations into a European Union by the end of the decade."
  However, if the Prime Minister were aware of the importance of this commitment he was at pains to deny its implications, because later in the same statement he said :
  "Our concept of a European union is the same as this country has always had, which is that in developing institutions one develops them to meet the needs of the organisation concerned."—[OFFICIAL REPORT, 23rd October. 1972 ; Vol. 843. c. 792 and 796.]

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  The two questions I should like to ask are, first, what is implied in political union and, secondly, what is the Government's authority for committing the country to it? When one seeks to find out what is implied, the Government try to avoid the issue by saying that the form of political union has not been decided, that union will evolve, that it will be a gradual process. In a debate on the Common Market the Foreign Secretary said in his peroration :
  "Unity is not an event, it is a process ".—[OFFICIAL REPORT, 17th October 1972; Vol. 843, c. 67.]
  That is a very British sentiment, but political unions do not evolve. Like marriages, they are a product of conscious and specific decision. It does not help to be told that the journey towards political union will be long, slow and gradual if one does not want to arrive at that particular destination. What must be implied in political union is some form of integration, otherwise the words have no meaning. That must mean the transfer of powers which are now held by the member States of the Common Market to some central body, whether democratically-controlled or not.
  The question is not, as some of my hon. and right hon. Friends who have different sentiments from me on the Common Market would have us believe, whether our powers should be transferred to a democratic or authoritarian body. Rather it is whether any such power should be transferred at all. Powers that must be transferred—and in transferring they will undoubtedly be lost—include the power to control the budget of this country which is at the very heart of parliamentary control of the executive. It does not matter that we shall be sharing our sovereignty. For example, we may desire public expenditure to grow at a certain rate but we shall be told by the other member States, after we have had an opportunity of expressing our views in the Council of Ministers, that it must grow at a different rate. That is not sharing Sovereignty. That is a loss of sovereignty because we should no longer be able to do what we want.
  We shall also lose control over the scope and rates of our indirect taxation which, goodness only knows, is considerably wider in its impact on people since the introduction of value added tax. We
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  shall lose the same powers over excise duties and we shall even lose the right of independent representation in international negotiations. The process has started already. Ultimately in a political union, if it is to be meaningful, we shall lose the right to be independently represented in international organisations, because that is the logic of political unity.
  Mr. Russell Johnston: Is the hon. Member saying that whatever renegotiation might be achieved in the future he is against the Community evolving into a political union for all time?
  Mr. Deakins: I go even further. I am not merely against Britain's membership of the Common Market. Even if we were not in, I should be against the Common Market's very existence for reasons I do not want to go into here.
  I turn to my second point and ask what authority the Government have to commit this country to political unity in the Common Market. I have tried to work out where the Government might conceivably have got some form of authority. I went back to the White Paper of 1967 Cmnd. 3301 on the Legal and Constitutional Implications of Joining the Common Market, the White Paper which has been frequently quoted in our Common Market debates as committing the Labour Government to all the implications and so on. There is not a word in that White Paper on the subject of political union within the Common Market.
  The second occasion on which perhaps the Government might claim to have obtained authority was the 1970 General Election. But surely it is still a matter of controversy whether the Government even received the mandate to take Britain into the Common Market. Surely it cannot be argued, therefore, whatever the verdict on that dispute, that they received a mandate to take us into a political union.
  The third occasion on which the Government might claim to have obtained some authority was in the 1971 White Paper Cmnd. 4715. But in it the Government were at pains to reassure the people about the federal and political union implications of membership. Paragraph 29 says :
  "The Community is no federation of provinces or counties. It constitutes a community

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  of great and established nations, each with its own personality and traditions. The practical working of the Community accordingly reflects the reality that sovereign Governments are represented round the table…There is no question of any erosion of essential national sovereignty ".
  Mr. Marten: Does the hon. Gentleman agree that that is a commitment against federalism?
  Mr. Deakins: Indeed. I was looking at it from rather a different point of view and saying that there was no authority in that White Paper of the present Government in 1971 to commit us to political union.
  I come to the Common Market debate, the great debate lasting six days in October 1971. Again we had the reassurance from no less a person than the Prime Minister on the last day that,
  "We are making a commitment to the Community as it exists tonight"—[OFFICIAL REPORT, 28th October 1971 ; Vol. 823, c. 2210.]
  There was no mention of political unity.
  We come to the debates on the Common Market Bill in 1972. We were reassured, again by no less a person than the Prime Minister, on Second Reading of the Bill on 17th February 1972 that
  "the constitutional position has not changed … since the last Government's White Paper of 1967."—[OFFICIAL REPORT, 17th February 1972; Vol. 831, c. 747.]
  The Second Reading of that Bill provided no authority for the Government to commit us to political union. Many extensive powers were committed to the Communities in the Bill, but the power to enter a political union was not one of them.
  Then we began to see a subtle change in Government policy. First there was the commitment at the October 1972 Summit to which I have referred, but a commitment in such mild, disarming language that one could be forgiven for thinking that it was just a sop to the few federalists in the country and in Europe. We were also told that in any event political union was just another proposal to be treated like any other Common Market proposal.
  I recently asked the Minister :
  "what is the next stage of EEC political union ; and if he will seek to ensure that this stage is not begun until Parliaments in the member States have been able to debate the matter."
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  In reply he referred me to the Summit communiqué and said :
  "The House will have the usual opportunities to discuss proposals in this, as in other fields, as and when they arise."—[OFFICIAL REPORT, 8th November 1973 ; Vol. 863, c. 227.]
  That is putting political union on a par with lorry weights. It is not good enough.
  Some of us began to become very suspicious and worried, and Questions were asked of the right hon. Gentleman whether he would publish a White Paper on the implications of political union. The answer was "No ". Naturally, the follow-up Question was "Why not?" That received the most astonishing answer I have ever seen or read in the 3½ years of my membership of the House. So astonishing that I took it to the Clerks at the Table Office. They said "The Minister's Department must have made a mistake. It has misunderstood your question. Do not ask a follow-up Question. Phone up the private office ". I did so, only to find that the correct answer was the one that had been given. My Question to the Minister was :
  "why he will not arrange for the publication of a document setting out the advantages and disadvantages of EEC political union."
  The Chancellor of the Duchy of Lancaster replied :
  "The political case for membership of the European Communities was set out in paragraphs 26–39 of the White Paper of July 1971 … (Command 4715)."—[OFFICIAL REPORT, 5th November 1973 ; Vol. 863, c. 59.]
  In fact, political union was being confused with the political advantages of membership.
  I then put another Question to the right hon. Gentleman, asking him which paragraph in the July 1971 White Paper talked about political unity. I have already quoted a paragraph which made it clear in a very reassuring way that there was no intention of any federal implication. The Minister replied :
  "The paragraphs to which I referred in my reply of 5th November … set out the case for closer political as well as economic unity in Europe."
  He added that the Summit communiqué
  " provides for action to realise the wider objectives of the Community reflected in the White Paper."—[OFFICIAL REPORT, 19th November 1973 ; Vol. 864, c. 335.]
  That means, if it means anything at all, that in the Government's opinion the issue

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  of political union in the Common Market was fully dealt with in the White Paper of 1971, before the Common Market had even decided on the matter. It would show a remarkable prescience by the Government and Parliament, if it had been true. But it was not true. Neither Parliament nor people were told anything other than that there would be no loss of essential national sovereignty. Now we are told a different story, that we can both retain our sovereignty and lose it.
  I apologise for the number of quotations I have given, but this is a rather important subject. My final quotation is from an answer by the Foreign and Commonwealth Secretary on 25th July, when I asked him a Question. The right hon. Gentleman replied to a supplementary question from the right hon. Member for Wolverhampton. South-West (Mr. Powell) :
  "Our objective of political union has been declared. For the foreseeable future it must be the nine countries working independently but achieving as great a consensus as they can."—[OFFICIAL REPORT, 25th July 1973 ; Vol. 860, c. 1607.]
  Mr. Marten: I happened to receive today from my right hon. Friend the Foreign and Commonwealth Secretary a letter, of which I will send the hon. Gentleman a copy, which deals with that point. I asked my right hon. Friend what he meant by political union, and he replied :
  "I will try to describe the situation as I see it. I would like to underline first that the issue under discussion is not ' political union ' with the European Community (although the phrase is occasionally used) but ' European Union ', a concept which has yet to be precisely defined by the Community."
  Mr. Deakins: I am grateful for that intervention, but it makes the position more muddled and confused rather than clarifying it.
  The fact is that the Government are committed to political union but lack the courage to argue and defend their commitment publicly. They even lack the courage to define what is involved. The people have not been consulted. Parliament has not voted on the issue. It has not even been consulted on it. But political union is as big an issue in its way as was British entry into the Common Market. It is an entirely separate issue, not to be confused, as the Government
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  were trying to confuse it, with the issue of our entry in the first place.
  In trying to confuse the issue, the Government are being evasive and inconsistent. On entry, the Government claimed that Parliament had to decide and that the vote on 28th October was the vital vote. Now we are told that a vote for entry was a vote in principle for political union. That will be a surprise to most hon. Members, and an even bigger surprise to the British people. How could Parliament have voted for union without knowing what was involved and in spite of express assurances to the contrary? It is absolute nonsense.
  We can only marvel at the effrontery of the Foreign Office and its Ministers. Do they think that political union in the Common Market will be achieved by stealth? Do they believe that it will be achieved without either Parliament or the British people having a say in the matter? Obviously they do. They are wrong. Even worse, they are obsessed. There have been times recently when I have feared for their mental health. They will not succeed in hoodwinking the British people. Our people do not want membership of the Common Market ; a fortiori they will not want membership of a Common Market political union.
  The vote tonight is a first attempt to regain for the people their right to decide these momentous issues for themselves. I hope that it will be seen in that light on both sides of the House.
  7.59 p.m.
  Sir Gilbert Longden: The hon. Member for Walthamstow, West (Mr. Deakins) is of course right when he says that the question of political union is quite different and separate from the question of economic union. We have had a mandate for entering the Community—that is, an economic union. We have not yet had a mandate for making it into a political union. I have always said when I have been talking about the matter that when that stage comes, as I have always hoped it will, it will be necessary to come back to the House to obtain a mandate.
  That will not be a mandate from the people, because a referendum is not our way of going on. I remind hon. Members that it is nearly five years ago when

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  in a State document in April 1969 there appeared the words :
  "In the firm belief … that only a united Europe can make a contribution to peace, prosperity and international co-operation … and that therefore no effort must be spared to give a new impetus to achieve European unity, Britain and Italy have agreed their European policy as follows : the economic and political integration of Europe are both essential … and … the common interests of our Continent, its security and prosperity, demand union."
  Those words appeared in the Declaration on Europe signed by the Italian Prime Minister and by the right hon. Gentleman the Leader of the Opposition who was then the British Prime Minister.
  At that time I did not hear any Labour hon. Members dissociate themselves from those aspirations. No Labour hon. Member rose in my hearing to lambast the then Prime Minster after the manner of the pungent criticism of my right hon. Friend the Member for Wolverhamption, South-West (Mr. Powell) in attacking his leader this afternoon. I wonder what happened to account for one of the most bare-faced tergiversations, if that is not mixing my metaphors, in parliamentary history.
  The declaration, part of which I have just read, expresses my beliefs. I believe that :
  "The European Community can achieve by joint action a real power and control over the forces which confront us in the world which we could never hope to do as separate sovereign countries."
  In other words, the European nations can do together what they could not do so well, or at all, individually.
  We can classify the "forces which confront us in the world" under three heads : ideological—the possibility of direct aggression, and the certainty of continual subversion ; sociological—poverty, disease and unconscionable inequality ; and economic—the obstacles in the way of fair trading and sound currency. I believe that we can attain the "joint action" which alone can efficiently control these forces only if those European nations which will conform to the democratic ideals of the Treaty of Rome—and the more the better because the Treaty says that it is open to any European State—will cede part of their individual sovereignty to a directly elected European Parliament.
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  I believe that my right hon. Friend the Member for Wolverhampton, South-West and my hon. and learned Friend the Member for Buckinghamshire, South (Mr. Ronald Bell) are, with great respect, intoxicated with the nineteenth century idea of national sovereignty. Sovereignty means the power to do things and to get our way. What is the good of sovereignty if we no longer have the power alone to get our way?
  The Summit communiqué of October 1972 aspired to many objectives and I would like to hear from the Government what progress is being made, especially in one or two of them, for example, improving political co-operation in accordance with the Luxembourg Report. We had such an essay last week. I must say with regret that there is widespread anxiety and unease about the manner in which we have apparently treated our Dutch partners, although there is great uncertainty and lack of knowledge about the matter. With that part of his speech, and with that part alone, I had some sympathy with the right hon. Member for Stepney (Mr. Shore). Another very important matter is that Europe should respond to the expectations of the developing countries. That is a matter about which I should like to hear a great deal more. I was glad to hear what my hon. Friend the Member for Cheltenham (Sir Douglas Dodds-Parker) said about that. I should like to hear something about that from the Government. It is of enormous importance to the success and the future of Europe that the Community should be seen to be aiding and trading with the under-developed countries.
  There are many other aspirations and objectives in the Summit communiqué of last October and I should like to hear how they are progressing. Of course, if we are to increase further the powers which, I must say, the British delegation has had remarkable success in increasing, it is essential that the European Parliament must be democratically elected. It must have the power to decide by a weighted majority vote all matters which transcend the interests which are peculiar to individual States. It has been agreed for the time being that decisions which affect the "vital interests" of individual members must be made unanimously.
  Mr. John Biffien: So that we can translate generalities to the kind of specifics which will be only too well understood by our constituents, will my hon. Friend indicate whether he is suggesting that it should be a qualified majority which will determine, for example, the scope and incidence of a harmonised VAT?
  Sir Gilbert Longden: For the moment my opinion, for what it is worth—I am flattered that my hon. Friend the Member for Oswestry (Mr. Biffen) should think that it is worth anything—is "Yes ". I will have more to say about that.
  To make the European Parliament more democratic cannot be achieved overnight, but many, many moons have waxed and waned since it was declared a major objective for the future of Europe. Although some progress is being made in the essential matter of increasing the powers of the European Parliament, there are few concrete proposals for its election by direct universal suffrage. We had in 1960 the Parliament's own draft convention for direct elections which remains unratified by the Council of Ministers ; and in 1972 we had the Vedel Report—which described the present Parliament as a "Colonial" Parliament, and a "shoddy foundation" for a united Europe. That report too seems to have been shelved.
  More recently still, in the communiqué issued after the summit conference of October 1972 we heard what the Heads of Government had to say. The communiqué said :
  "having set themselves the major objective of transforming, before the end of the present decade, … the whole complex of the relations of Member States into a European union, requested the institutions of the Community to draw up a report on this subject before the end of 1975 for submission to a summit conference."
  Here at home, the right hon. Member for Fulham (Mr. Michael Stewart) and my hon. and gallant Friend the Member for Lewes (Col. Sir T. Beamish) have formulated concrete and workable proposals for implementing Article 138(3) of the Treaty of Rome, but neither those nor any other proposals for implementing that article seem to be being considered by Her Majesty's Government or by any other Government.
  If public interest in the concept of a united Europe is not to be allowed to
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  flag further, immediate steps must be taken to ensure a directly elected European Parliament at least by 1980. I am convinced that those who believe, as I have done for 20 years, in the European concept must accept the responsibility of actively working to achieve a united and democratic Europe which functions for the benefit of the European peoples. We must help our fellow citizens to realise that the opportunities open to us within the Community do not exist outside it.
  As members of the Community we have and must seize the opportunity to plan concerted action for self-defence should that be necessary. There is the opportunity to increase our people's prosperity and to help the developing countries to increase their prosperity. It is sheer folly to cling to the right of unilateral decisions on every issue when we no longer have the power to implement many such decisions. As my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs said years ago, insularity is a luxury which this island can no longer afford.
  If we are to do that, we must go back to square one and start explaining all over again why this is so. We may have to repeat all the arguments that we used then—stale to us but still true and perhaps not yet heard by many. But we must not seek to win the consent of the electorate on a false prospectus. The Europe which is essential for our permanent security and prosperity is quite different from a free trade area or a loose collection of friendly sovereign States.
  The communiqué issued by the nine Heads of Government was quite specific. It said that the member States of the Community intend European union before the end of the present decade. Not federation, perhaps, because none of our peoples is yet ready for that, but certainly much more than a free trade area, much more than an old-fashioned alliance which has never yet prevented war, and certainly implying at least a democratically elected European Parliament to which each member State will cede certain sovereign powers and which will have full control over the Community budget.
  Our task is three-fold. The first is to rebut the allegations of the anti-Marketeers that all our present ills stem

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  from our membership of the EEC. Soaring food prices is a case in point. The effect of the EEC on these has, in fact, been minimal so far. But at a meeting organised by the Common Market Safeguards Campaign last Saturday, Sir John Winnfrith said :
  "The fact, as you know, is that since the Government has been in office and started the slide towards the EEC food system, the cost of food has gone up by over 37 per cent. ".
  Later, he said :
  "Nor am I asking you to believe that the whole of that appalling increase of 37 per cent. is the result of joining the EEC."
  As a matter of fact, very little of it is.
  Mr. Arthur Lewis: How does the hon. Gentleman know? He does not know.
  Sir Gilbert Longden: However, the Open Seas Forum, which, if I may say so with respect to my many hon. Friends who belong to it, is a more honest body, supports the Government—no, I am sorry.
  Mr. Biffen: That is the quickest U-turn ever
  Sir Gilbert Longden: The Open Seas Forum has issued three pamphlets and in a letter the secretary states :
  "They support the Government in showing that our entry into the Common Market is not the only reason why the price of cheese, beef and bacon has risen ; but they also explain that the indirect effect is considerable … the new levies on food have only caused a very-slight increase in prices (as the Government says) but the variable nature has made our market insecure for exporters to us."
  That is a fair enough statement. As I have told the Government several times before, these allegations and statements, if they are not true, must he officially rebutted.
  Mr. Arthur Lewis: They cannot be rebutted.
  Sir Gilbert Longden: Secondly, I warn the Government and our representatives in the Community of matters which, if allowed to happen or to continue indefinitely, will alienate even pro-Marketeers. One such is the common agricultural policy which was described by The Times as
  "… a costly and socially regressive failure…."
  to "tinker" with which will not be enough. I know that the CAP is a fundamental
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  policy of the EEC and I know that the Government have said that we must accept it. But they need not accept it in toto.
  Mr. Powell: Renegotiate?
  Sir Gilbert Longden: It is at this moment being renegotiated. [Laughter.] I can see nothing funny in that description of what is going on.
  Other matters would be if we were to ditch the Commonwealth over sugar, though we have no intention of doing so, or to be made to tax books, or to be required to move goods by road in juggernauts, or to bake our bread in a particular way or pickle our onions in a particular way. Such matters surely do not demand conformity.
  I agree with all of the speech made by the hon. Member for Stockton-on-Tees (Mr. William Rodgers) except for its termination, but I particularly agreed when he said that the role of the British in the European Parliament must be aggressive but not disruptive.
  Our third task is to proclaim the benefits of membership as they manifest themselves from time to time. [HON. MEMBERS : "Oh".] It is unfortunate that at this moment I should be surrounded solely by anti-Marketeers.
  Mr. James Scott-Hopkins: No.
  Sir Gilbert Longden: No. There is one on the Government Front Bench. I am being serious about this, however, although one might not think so with all these interruptions. As I have said, our task is threefold. It is one not only for the Government. We in our smaller way must help as well. The first is to rebut the allegations of the anti-Marketeers that all our present ills stem from membership of the EEC. The second is to warn the Government and our representatives in the Community of matters which, if allowed to happen or to continue indefinitely, will alienate even pro-Marketeers. The third is to proclaim the benefits of membership as they manifest themselves from time to time.
  8.16 p.m.
  Mr. George Lawson: I hope that the hon. Member for Hertfordshire, South-West (Sir Gilbert Longden) will forgive me if I do not take up his argument, although I was not wholly

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  against much of what he had to say. He was not entirely without friends, even in the Opposition. I want to confine myself largely to the view point expressed by the right hon. Member for Wolverhampton, South-West (Mr. Powell). He is distinguished in that he always goes to the root of the matter. Whether it is the right root or the wrong root, he gets right to to it. I agree that he is most powerful in his argument and very clear in his statements of his point of view, but in this matter as in others he is very wrong—and not only wrong, but dangerously wrong.
  I want to take up the question of sovereignty. When the right hon. Member for Wolverhampton, South-West spoke about the control we seemingly exercise here in this House over our economy, I asked whether he really thought that we could and did exercise the power, control or authority that he seemed to be speaking about. It is largely for this reason that I have been and continue to be in support of our entry into Europe.
  Many changes have been taking place in our society, and our thinking usually takes a long time to catch up with change. Basic technological changes have been taking place in society, not only here and on the Continent but in other countries as well, which make profound differences to the problem of democratic government and to the question of the sovereignty of a Parliament such as ours.
  We in Britain are experiencing industrial difficulties and we do not know whether we can get out of them. We have not got a solution. But not only do we not have a solution in the sense of having knowledge and understanding of how to deal with these difficulties ; we do not have the power. We are essentially a Government based upon consent. One might talk of this in terms of sovereignty, but if we are not based on consent there is not much we need to fight over.
  There are, however, sections in our society which at present have such powers and which, by using them, could render and may render government by consent impossible. Powerful groups occupy positions different from those which they occupied a little while ago. Not long ago there was what we called the sanction of the "sack ". That sanction was a powerful one. To a large extent it is
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  now inoperable. Groups of workers can take the nation by the throat and hold it to ransom. I will not use such an emotive word. They can insist on getting their way. This does not apply only to miners. There are the electricity engineers, transport workers, men in one area after another who possess power capable of being used in a way that destroys government by consent. It is not just a question of trade unions, In many cases they cannot exercise control over their own members. A situation arises when men simply put on their jackets and walk out.
  Because of the inter-relationship of industry, a dislocation in one small part causes widespread dislocation elsewhere. In some cases, rather than have expensive capital equipment standing idle, an owner might be prepared to do almost anything. The balance of power in society has altered. It has spread widely. At one time it was concentrated among a relatively small number of people. This spread of power is perhaps the most significant thing that is happening. It requires an answer if we are to operate and improve what we call government by consent.
  There must be more intelligent participation and a greater understanding that the important thing is the community interest, the general interest, and that secondary interests, important though they may be, must take second place to the community interest. This is a big thing to the men with the power. There is no sovereignty any longer in Parliament because we can no longer be sure that we will get our way. We spent hour after hour, night after night, day after day, arguing about the Industrial Relations Bill. That is now an Act, but we cannot be sure it will be properly implemented. We cannot be sure that we can still base government upon consent.
  It is more than ever necessary that men and women understand the kind of society that must now be built up. More than ever it has to be built upon consent, working together and pushing aside sectional interests, because the longer-term interest is more important. We are reaching a stage when society needs greatly to improve democracy, beyond any stage it has previously reached. In the past it has been a minority exercise in power. We have reached a stage when

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  we have to deal with the majority exercising power but not in a sectional way that gums up the works and brings things down. If that happens, we will get the answers that we can see elsewhere—the concentration camp, the mental asylum, the gun and the club. That is the result if we cannot find an answer here.
  Sovereignty as the right hon. Gentleman spoke of it is already disappearing. The problems we have to answer are much more complex. The problems on the Continent apply equally well here. The same answers will be called for. I am not worried whether Europe is politically united.
  I want to see Europe coming together. I can vividly recall the time in 1955–56 when I was a member of the Council of Europe. The citizens of Strasbourg were very concerned about whether France should sign the Treaty of Rome and enter the new European Community. Everyone to whom I spoke had no doubt that France did not stand a dog's chance economically against Germany. They thought that Germany would swallow her up. Yet the people of Strasbourg decided they were for entry to Europe. They recalled that they had fought two wars, when their families were divided, with part of the family fighting on the German side and another part on the French side. The city had for long been a French and German city and they wanted to get rid of that. The only way to do it was by joining the Community.
  Europe has torn itself apart. We have heard of civil war. There is another danger threatening Europe. Already there has been the Hungarian uprising and the trouble in Czechoslovakia. If Europe were to break up into bits and pieces of States, if it were to be Balkanised, what independence could it achieve in the face of the enormous might of Russia? It would not be necessary for Russia to send in the tanks. Our independence, such as it has been since the last war, has depended upon the United States remaining in Europe, not upon our own physical and military power. If the United States were to pull out of Europe, as it might well do, there is little prospect of independence for us. The Russians would not need tanks. We would have to do as we were told. That would be the basis of our independence.
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  I want sovereignty, for all the people of Europe. I want it not so that they can be aggressive or military but so that they may exist as independent people. It was many years since I went to Europe, but I went there at the weekend. I gave up my weekend at home. I would much rather spend the time there, but instead i went to Europe.
  I was greatly impressed by the bureaucrats and what they were doing. I asked a group of them whether they did not fear that they were too far ahead of the army—a cadre that was not in touch with the main body of people. The answer was "Yes, we are. We need effective parliamentary control. It is for you fellows to build that effective parliamentary control." We do not create this new organisation by passing it to a small group of people. We must become involved and work in it. It is our Europe.
  I should like to spend a couple of hours giving the reasons why I have persisted and will continue to persist in the position that I have taken tonight. Had this motion simply been "That this House do now adjourn" with nothing behind it, that would have been fair enough. But my right hon. Friend the Member for Stepney (Mr. Shore) has told the House that in effect what we are to vote upon, although it is not on the Order Paper in black and white, is :
  "That this House, recalling that Great Britain's membership of the European Economic Community lacks the consent of the British people, and noting the essential need for a fundamental re-negotiation of the terms of the Treaty of Accession, calls upon Her Majesty's Ministers not to agree to any further steps for the establishment of an economic and monetary union in Western Europe."
  I certainly cannot agree with that. As that is what we shall apparently be voting upon—not the motion "That this House do now adjourn "—I must tell my right hon. and hon. Friends and my very good friend the Scottish Whip that I shall not be in the Lobby with them tonight.
  8.31 p.m.
  Mr. Edward Taylor: The hon. Member for Motherwell (Mr. Lawson) has displayed a zeal for a united Europe which everyone accepts because of his consistency in arguing the point. However, I believe that even he will agree with the general view expressed

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  by hon. Members who attend the European Parliament that the decision to join the Common Market was to give carte blanche for a political unity involving one Government, one tax system and one army for Europe and all that goes with it. But that was not in the minds of those who voted on that occasion. The majority of the people of this country had no idea that that was the ultimate objective.
  In view of what has been said on this issue, I believe that the Government could reassure many of us if they accepted that the movement towards political unity was a second step—what I might call stage two of the Common Market enterprise—which would justify a separate decision in which the British people could participate.
  After 10 months of membership of the EEC, I think that my right hon. Friend the Minister for Industrial Development will accept that the results have not been entirely as might have been expected. The difficulty is to try to identify that part of the trends which have taken place following the decision to join. There is no doubt that, in all the spheres about which doubts were expressed, events have taken place along the lines of those trends. In 10 months we have accumulated a fantastic deficit. This cannot be attributed specifically or solely to joining the EEC, but my right hon. Friend must be aware that a major part is a trade deficit with the EEC. Unlike deficits with the rest of the world, where previously we could put on tariffs or quotas, we can do nothing to stop imports from the EEC. To that extent we have a serious balance of payments problem with fewer weapons with which to defend ourselves.
  Our currency is now at an all-time low. It is impossible to identify the extent to which the EEC is involved either positively or negatively, but it is a fact.
  My right hon. Friend could provide a service to the House by identifying the flow of investment to and from Europe. One of the basic fears put forward by opponents of the Market was that, while we might have a certain measure of investment in this country, which we have always had, the real danger was the inevitable flow of investment and the decision-making which goes with it
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  towards the centre of the Market. I believe that this has been happening. I wonder whether we might be given the figures.
  Mr. Marten: I can give my hon. Friend the figures from HANSARD. We were told that 39 firms were to invest in this country. My hon. Friend the Member for Petersfield (Miss Quennell), in a Written Question, asked
  "how many projects for investment in European Community countries have been approved since 1st January 1973."—[OFFICIAL REPORT, 25th October 1973 ; Vol. 861, c. 564.]
  In other words, the counterpart of the 39. The answer was 2,886. This was in the first 10 months of British membership of the Community.
  Mr. Taylor: I am grateful to my hon. Friend for bringing that fact to my attention. I asked for similar information and was unable to obtain it. This is a serious matter and we must find out the facts.
  What is the situation in terms of food prices? It is a fact that food prices have been rocketing. What measure of responsibility can we put upon the EEC? I hope that the Minister will look at a Question which I tabled on 20th November, at column 388, in which I asked a simple question—namely, what had happened to food prices in the EFTA countries which had joined the Common Market and what had happened to the EFTA countries which had not. The answer was revealing. United Kingdom food prices went up by 14 per cent. last year. In Denmark the figure was 13·7 per cent. and in the Irish Republic 19·9. In other words, in the three countries which had joined the figures were all over 13½ per cent. But if we look at Norway, Portugal, Sweden and Switzerland we find that in none of those countries was the rise of the order of as much as 8½ per cent.
  The fact is that there is a major difference between food price rises in Common Market countries and in non-Common Market countries. It is all very well for us to try to tell the housewives and the public that our joining Europe has had no effect on these matters, but the facts certainly require some explanation. I appreciate that the average figure would to some degree be offset by Iceland and its Communist coalition Government since

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  the Icelandic people suffered a greater rise in prices than was the situation in Europe.
  It must be said that on the information available it appears that, although world prices have been responsible for most of the increases, EEC policies will prevent prices from falling. It is a straight fact that in countries which have joined the Community food prices have risen by considerably more than those in countries which have remained outside the Community.
  We were told that the fact that we joined Europe would be a contribution to peace in the world. Let us examine this a little more closely. One matter that worries me is that in certain policies there has been a clear breach between ourselves and the United States, and this is a great danger to world peace. Furthermore, if the United States were to withdraw from Europe and if the ambitious plans for European unity, a European Government, a European army and a European nuclear deterrent were to come to fruition, this surely would not please the Russians. Indeed, this is an area of activity in which the Russians are terrified. I believe that the real threat to world peace would come from a unified Europe with the Germans taking some share in a major deterrent. The Russians are terrified of any move in this direction. I suggest that the 10 months of our membership have not by any means been 10 bright months. Therefore, we must be careful not to move too quickly towards an unfortunate situation of this nature.
  I should like to say something about the regional fund set out in Common Market draft Regulation 1170. Why should we have a Common Market regional fund at all? What is its objective and how will it help this country? Is it suggested that the objective of the fund is the co-ordination of differing Common Market regional policies? If that is the objective, the answer surely is that this is not necessary. This has already been set out in the summit communiqué in October, which lays down that from now on the Heads of State will undertake to co-ordinate regional policies. But we could co-ordinate matters without having a fund.
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  We have seen that the Commission has not been slow to show interest in regional affairs. After only a few months of Britain's membership, the Commission informed our Government that we were wrong to give to Clydebank the aid which we earmarked for it. There has been an exchange of letters on that topic, and Scottish Members will be very interested to see the outcome. I repeat that we could achieve co-ordination without a fund having to be set up.
  Perhaps the answer is to get back some of the cash which we are losing in respect of the agricultural fund. If this were to be the objective—I think that this would be a splendid idea—I should be in favour of a massive fund if this would give us back some cash. However, this does not appear to be the situation envisaged by the Government. The total fund invested in the Common Market starts at £250 million and rises to £500 million in 1976. In terms of a comparison, the CAP fund involves £2,000 million. Therefore, we are not talking in the same terms.
  The Minister has been helpful in splashing money all over the place since last year we passed the Industry Act with grants for regional development and selective regional assistance under the Act. The amount that the Minister himself will be paying out and will be gratefully received all over the country is £250 million. Therefore, the total sum of the Common Market regional fund envisaged in the draft directive is the same as the Minister is paying out under two sections of the Industry Act to British firms alone.
  The amount involved is not, perhaps, massive. Moreover, there is no indication in the draft directive that Britain will get a substantial slice of this money. At the end of the day, therefore, after transition, we shall probably get out of the fund no more than we are paying into it.
  Where is the cash to come from for the regional fund? We are told it will come from the funds of the Community. But just as our Government have no money of their own, so the Community has only the cash it gets from the member States. We know that it will have to get its cash either from levies or sources such as the value added tax. So far as it is mainly from levies,

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  obviously at the end of transition we shall be paying more than 25 per cent., I suggest, to the total Community budget. Unless we get 25 per cent. of the regional fund, which is only a small fund by Common Market standards, we shall be doing no better, even if we get anything at all, through the Commission or the regional committee or regional fund than we do already for ourselves ; it will mean that regional development will be no better than we already do it ourselves. I suggest that the three criteria set out in the draft directive, although interesting, would not fit in with Britain's own interests.
  What is more important is what we surrender, not only for taking some of this new fund to which we shall be contributing. Under the draft Directive No. 1171 the Common Market regional committee will be like the European Parliament, without any powers to do anything at all though probably some powers of debate. At the present time it will have power only to study, to examine and to take evidence. Even the right to make recommendations is not included in the directive.
  I ask the Minister, what precisely are we doing in regional policy? Once the fund is set up, the commitment to harmonise and to co-operate on regional policy means that all future items of regional policy will be agreed by the Council of Ministers.
  I am sorry to have spoken for 10 minutes—that is rather longer than I intended—but it will be very interesting to hear how we will get the cash from the new regional fund. It will be interesting to hear about the cash we are getting, but we have first to justify having the regional fund at all. Because all member States will contribute, presumably some or all will get something back, but what is the object of the exercise? If the object is co-ordination and harmonisation, we can have that without a fund.
  I would only support a Community regional fund if I could be assured that it would be a massive one and if Britain could be assured of getting a massive sum in cash which we could use as compensation for the common agricultural policy. I thought at one time that this was the objective, but now it seems that it is not.
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  I suggest that if we are spending money on regional policy, which I fully support, we could surely do the job better ourselves, if need be along lines agreed by the Common Market countries.
  8.43 p.m.
  Mr. Donald Stewart: I trust that the hon. Member for Glasgow, Cathcart (Mr. Edward Taylor) will forgive me if I do not follow him in his remarks. I am substantially in agreement with what he said, and so to that extent no debate between us is necessary.
  The benefits which we were led to believe would accrue from joining the Common Market have proved illusory. The Chancellor of the Duchy of Lancaster, opening the debate, made the best of a very poor case, but it turns out that the benefits are still in the future. It is still jam tomorrow.
  1 was very pleased to hear the hon. Member for Glasgow, Cathcart confirm the facts that are becoming known. The price increases are confined to the countries in the Common Market. They have not been experienced in the countries outside it. That bears out entirely the fears of those of us who oppose the Market. It is becoming clear that to a great extent the price increases are due to Britain's having joined the Market.
  The Chancellor of the Duchy of Lancaster suggested that the increase in food prices had other causes. All the time the Government seek to avoid laying any of the blame on the Common Market. One certainty about our entry was that when we joined the United Kingdom's policy of cheap food had to come to an end. Many of us had reservations about our cheap food policy, about the way that our food was produced and about the prices paid to its producers. However, there was no doubt that in an industrialised and over-populated country, thinking mainly of England, it was a rational policy. That has gone for good. On 17th October the Prime Minister said that so much of our food was imported that prices were outside our control. That meant that a cheap food policy had gone for ever as a result of our joining the Common Market. This has damaged the British economy and the economies of our partners in what was the British Commonwealth.

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  I come, then, to oil. I represent a large and growing body of opinion in Scotland which believes that the oil in the Scottish sector of the North Sea is Scottish oil. Some hon. Members claim that it is British oil. However, now the situation is developing where the Common Market is claiming that it is a Common Market resource and that it wants all the benefits of it. It is bad enough for us in Scotland to realise that we might be cheated out of this oil by London. But it is a policy which is even more indefensible if the oil is then to be diverted to Brussels.
  If that proved to be the case it could not even be said to have been spread among a happy band of brothers. We have seen what has happened to the Dutch in the Common Market. In this great unity of Europe the other eight members are prepared to let the Dutch go down the sink rather than stand together with them in their courageous action following what has happened in the Middle East.
  As for the Common Market's regional policy, we have had assurances time and time again about the existence of a policy for the poorer regions in the countries of the Community. It turns out now that nothing has been put together. As the hon. Member for Cathcart said, we shall get benefits only commensurate with what we pay out. It is like the wife who says to her husband, "Give me a fiver and I will buy you a birthday present." Those are the terms on which the EEC will dish out money to the United Kingdom.
  At one time we heard a great deal about the tremendous markets in Europe which would be opening up to us. However, hon. Members who supported British entry closed their eyes completely to the market here for European products. I was one of those hon. Members who replied to the letter which Lord Stokes sent to every Member of this House. I told him that my view was that although his heavy vehicle section might prosper, his family saloon car section would be beaten into the ground. Now I see that Lord Stokes has an entirely new view of what the British car industry can or cannot achieve in the Common Market.
  The fact is that the Government have no mandate for going into the Common
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  Market. The Prime Minister spoke of "Parliament and people ". Then he pretended that that phrase meant simply "Parliament ". That is an unusual view of the English language. It certainly does not apply to Scotland because the majority of the Scottish Members of all parties except the Liberal Party voted against entry. We shall remedy that when he have our own Government, as we shall presently.
  The Government have no mandate even in British terms still less for Wales and Scotland. The people are opposed to membership of the Common Market. The United Kingdom has many problems which can be solved only on the basis of sovereignty and making our own decisions. The difficulties are compounded by membership of the Common Market, and the quickest way of overcoming these difficulties is to negotiate to get out of it.
  8.50 p.m.
  Mr. Neil Marten: I am grateful to the hon. Member for Western Isles (Mr. Donald Stewart) for being so brief and thus allowing me a few minutes. I will concertina what I intended to say into those few minutes.
  After almost one year of membership we should look to see how the Common Market is doing, in view of the promises held out and the forecasts and judgments made by those who encouraged us to join. By any standard, the judgment made by the pro-Marketeers, be they Government or the European Movement, have been proved largely false judgments. The most important judgment is that which concerns the growth rate. The argument was that the only way we could increase our growth rate was by joining the Common Market. When in 1972 we had achieved a growth rate of 5 per cent. I congratulated the Chancellor of the Exchequer :
  "May I congratulate my right hon. Friend on achieving a 5 per cent. growth rate … without going into the Common Market? "
  The Chancellor of the Exchequer replied :
  "I take the point but, of course, one of the objects of joining the EEC is that we shall do even better."—[OFFICIAL REPORT, 24th October 1972; Vol. 843, c. 967.]
  Two months ago our growth rate was forecast to go down to 3½ per cent. I do not think that the Chancellor of the Exchequer was misleading the House, but

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  it was clearly a bad judgment by the Government that we were bound to get a better growth rate in the Common Market.
  The trade deficit has been mentioned today, so has harmonisation and Lord Stokes's speech. If, as he said, the motor car industry will be strangled unless we get out of the Common Market, that will be very serious for our economy.
  1 dealt in my interventions with investment. It is clear that the judgment that investment would come to this country has not been borne out. Investment, as we always thought it would, has gone into the Common Market. I admit that one day we shall get a return, but it is jobs that we want and we are getting only peanuts—5,000 or 6,000 jobs. I say "peanuts" because in 1971 the unemployment figure was almost 1 million. Since then the Government have reduced it by various ways to about half that figure. About 500,000 jobs have been created in the last 18 months. In relation to that figure 6,000 jobs for one year is peanuts.
  It sounds as though we might, with luck, get about £50 million in regional aid, and we shall have to put in that amount before getting it back. Last week the Secretary of State for Trade and Industry told me in reply to a Question that the Government's aid to industry in the past 12 months was £1,000 million. Again, £50 million in comparison with that is just another peanut.
  The benefits that we are being inundated with in these Euro-points are not very fairly presented. I will, if I may, write to my right hon. Friend pointing out how the Government are misleading us in attempting to prove that the Common Market is worth while and that we are getting a lot out of it. I am afraid that the Euro-points are damaging the Government because the credibility of some points that have been raised will not stand up to honest appreciation of the situation.
  There is the question of our loss of influence since joining the Community. There was a view that we would greatly increase our influence by joining, but there have since been many examples in which we have had no influence at all. One concerned the French nuclear tests, which affected New Zealand, Australia and our own dependancies in the Pacific. We did
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  not hear one effective squeak from the Government. If there was a squeak from them it had no effect, and Britain had no influence on that question.
  Another example was the International Sugar Agreement negotiations. Someone who was at the negotiations said that it was shaming to see the British delegates sitting there, without a brief, saying nothing, whereas at previous negotiations on this important matter our representatives played the greatest part in the negotiations because of our skill and knowledge of the subject. It is shaming that this country has had its voice absolutely muted by joining the Common Market.
  On the common agricultural policy we were told that we should first join the Community and then we should alter the policy, but we are merely tinkering with the margins and fringes of the policy.
  I have another example concerning our influence. Some hon. Members may not agree with this, but it is an example. We have each year to pass an order to continue the sanctions against Rhodesia. During a debate we had on the matter I asked the Foreign Secretary whether he had ever raised in the Council of Ministers the question of sanction busting by Germany, France and Italy. I was told that since we have been a member of the Community he has never raised the matter, yet in this House we are asked to impose 100 per cent. sanctions. We dare not use our influence or say "boo" to the Common Market. I wonder what influence, if any, we shall ever have in the Common Market.
  The Middle East crisis has been mentioned many times during the debate. The communiqué from the Common Market on this matter, delayed as it was, was the lowest common denominator which could be found amongst nine countries. I described that communiqué as wet. What worries me more is that the Russians, in Moscow, can only conclude, in relation to the oil situation, Holland and the Middle East, that on that major issue of an East-West confrontation NATO was divided right down the middle. Is that not a dangerous situation, and one which goes back to the wetness of the Common Market over the Middle East issue?
  Many hon. Members have said during the debate that they do not want the Common Market and Britain to develop

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  into the Federal United States of Europe. That is the basis of what many people have been saying. Some of us were displeased with the remarks of Chancellor Brandt at Strasbourg on the 12th November. He said that the aim must be to have an EEC sovereign European Government, which implied a European president, a European Cabinet and a directly-elected European Parliament. That is the fear of most people in this country.
  This question has been raised in past debates. The Under-Secretary of State for Foreign and Commonwealth Affairs gave an answer on the matter saying :
  "There is no reference to federalism in the Treaty of Rome. We want to work more closely together to achieve Europe's aims, but it is not our intention to draw up a blueprint for a federal Europe."—[OFFICIAL RFPORT, 2nd December, 1970 ; Vol. 807, c. 426.]
  Admittedly one can wriggle out of that if one wishes, but the spirit of that undertaking to those who were then going to vote, was that we were not heading towards a federal Europe.
  Then there is the broadsheet put out by the European Movement, Mr. Wistrich's outfit, which says that all individual members of the European Movement now belong to the Union of European Federalistis. All the indications are that this is where we are heading.
  There is an election coming and I am certain that this will be one of the issues. Where do the Conservative Government stand? If they are returned, will they allow this country to move towards a federal Europe? They will have to answer that question at the election so I should like them to come clean tonight. They must have thought it out. They are not unintelligent about these matters. They must know where we are going if we have leadership in Europe. Will they come clean and say whether this Government will be, not necessarily anti-federalist, but resist any movement towards federalism? They would then have a good deal of support in the country.
  9.0 p.m.
  Mr. Michael Foot: I will return to the subject with which the hon. Member for Banbury (Mr. Marten) concluded, because that is the subject that has dominated the debate and to which I want to devote most of my remarks.
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  But I should like first to comment on some other questions which have arisen.
  Everyone who has listened to the debate will agree that it was essential that we should have it, but also that this is an unsatisfactory way of conducting our scrutiny and observation of Common Market affairs and the Government's attitude towards them. The more that I have listened to the debate, and right from the beginning when the Chancellor of the Duchy of Lancaster tabulated the long list of major matters which he rightly felt it necessary to touch upon, the more I have been persuaded of something that I have felt for a long time—I am not criticising only the Government, although I am criticising them as well : that the way in which the House of Commons has dealt with the Common Market is a parliamentary scandal of the first order.
  We have not grappled with this matter in any proper way. We should have realised much better when the European Communities Bill was proceeding—or even earlier—the task facing the House of Commons. We have not discharged that task properly. The chaos of this debate, if that is not too strong a term—the chaos of so many major subjects having to be compressed into a single debate, about which at the end there will be no specific vote—is something to which the House must direct its attention as we have not done satisfactorily yet.
  I know that a Committee has reported—I have been a member of that Committee—and has made recommendations to the House to deal with these questions, which we trust will be dealt with very soon. We hope that the Government will accept the major recommendations of that report next week and that they will be in operation very soon. But even so—this debate has illustrated it further—none of us, certainly on this side, would claim that those recommendations are anything like a remedy for this full disease. It will be only a slight mitigation of the offence if those recommendations are adopted, particularly if some of the recommendations made by some of my hon. Friends and turned down by the Committee are rejected.
  The way in which the Government have refused to accept our motion as a matter for discussion in the debate further illustrates the difficulties. We

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  believe that that motion deals with matters of major consequence. No one copld possibly deny that. Therefore, we put it down in those terms precisely because we believed that the Government, going into fresh negotiations on these very matters in the next few weeks, should have the guidance of the House upon them. But the Government's insistence that we should not have that motion as a matter for debate today has deprived the House of specifically voting upon that question, even though many hon. Members on both sides will in fact be voting on it tonight. However, I shall return to that major matter shortly.
  I must comment, briefly unfortunately, because of the circumstances—though some may think that it is fortunate—on some of the other questions, for example on regional policy. The question whether it is advantageous for this country to have a European regional policy in which we join at all depends on the facts and figures, which we have not yet had. If the Minister for Industrial Development gives them to us in detail and tells us exactly what the Government will propose when they go into the discussions, we shall be grateful to him, although we shall be surprised.
  What we should much prefer, and what the House of Commons should require on a matter of such importance as regional policy, is to have a specific debate devoted to it, with the Government telling us in advance what they would propose when they went to the Council of Ministers, enabling the House of Commons to give its views about that in advance. As the hon. Member for Banbury has pointed out on a number of occasions, if we do not make our views known in advance the Government will come back later saying that it is too late because the decisions have been taken. That is one of the problems arising from the nature of the new form of legislation in Europe. They can make decisions by which we are bound and we have no means of unlocking them later.
  However, the Minister may seek to turn the question of regional policy not solely on the question of what is to be decided in Europe. He may seek to do what the Prime Minister has done on one occasion. Confronted with the charge that British entry to the Common Market has been of so little use to us, the Government
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  have tried to tabulate—at the beginning of the debate the Chancellor of the Duchy of Lancaster did something of the sort—a list of the industries which have come to this country or the new factories which have been opened or are projected because of our entry to the Common Market. The Government can produce such a list. We are hoping that a certain industry will come to my constituency as a result of investment from Germany. It may be in the neighbouring constituency. It is said—although it is not so easy to prove ; it may be so—that Hoover is making its considerable extension for that reason, too. I understand that there is such a list.
  I am sure, however, that if the Minister, who comes so well prepared for the debate, is to give us the list of factories and so on which have gone to Wales, Scotland and elsewhere, he will not engage in such a process without telling us exactly what is the detailed list of investments which Britain has made in Western Europe over this period, telling us the particular forms of industry and how much money is involved, with the totals of the capital outflow from this country to Western Europe, so that we can compare the two matters.
  Others have given us those figures. Hon. Members may have seen the article which appeared in the Sunday Times entitled "Make or break in the £3,000 million Monopoly game ". That confirmed my observation when I went to Brussels a few months ago. I saw some horrific new buildings in Brussels. They looked very much like the horrific new buildings which have been built by some of the developers in this country. Lo and behold, I discovered that they are the same developers. The article said that 75 per cent. of those buildings in Brussels were in the hands of British developers. It went on to give a figure.
  Leaving out the pejorative adjectives which the Sunday Times employs, because I would not think of using them, the article continues :
  "for Britain itself, because the frenetic spending spree in Europe has been backed by guarantees from Britain worth, according to my estimates, over £1,000 million."
  This is not all in Brussels. Some is in Paris and the other centres. We should like to know exactly what is the scale of that investment and how many new industries in Ebbw Vale or Merthyr, or

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  in Scotland or Wales, could have been provided with that £1,000 million which has been used to build those horrific buildings in Brussels. I am sure that the Minister would not have dreamed of coming to this House to discuss regional policy today without all the facts and figures about the outflow.
  Another major matter which has entered into our debate, which I fear we can discuss only briefly today but which we must certainly discuss much more fully on a very early occasion, is the whole question of food prices and the risible claim that the increase in food prices has practically nothing to do with entry into the Common Market. The members of the Government must be pretty well the only people in the world who accept that proposition. They will find it all the more difficult to convince us about the future than about the past, because at some stage before 1st January the House of Commons has to examine a certain little document, the Import Duties (General) (No. 8) Order. It does not deal with all the future imposts, but included in it are one or two of them. I presume that the Government will provide at least a full day to debate this order.
  Included in that order is an interesting little item about lamb from New Zealand. Again I turn to the Sunday Times in order that nobody should think me at all prejudiced in these matters. The Sunday Times stated :
  "A large proportion of Britains shortfall "—
  that is, of lamb—
  "was imported from New Zealand.
  Supplies from that source over the coming year are likely to diminish. The New Zealand lamb crop is 6 per cent. down due to droughts "—
  loud cheers from the Government benches—
  "earlier this year and a campaign to diversify markets means that more of the available lamb will go to countries like Japan next year."
  It is going to Japan but, I ask the House to note, not because of droughts, so there is something different there. The lamb that was produced was not due to droughts. The article goes on to say :
  "But even without this restriction in January Britain will be forced to apply an 8 per cent. duty on New Zealand lamb "—
  so far as I can understand, this is all in the order, though I have looked at it only today—
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  "as we start, one year late, to phase up towards the full EEC 20% tariff. All these factors will increase lamb and mutton prices in our high streets."
  Therefore, we should be very happy to have a full debate, not only about import duties but about food prices generally. We can then discuss whether this country's ending the century-old policy of seeking to buy clean food wherever we can buy it has had any influence on the prices in the shops.
  Some of us hold to the startling proposition that, if we enter the highest protectionist group in the world so far as food goes, it is bound to have an effect upon our prices and is bound to have an effect by cutting off the possibility of increasing supplies from countries such as New Zealand, Australia and the West Indies, which have produced these foods more cheaply and more efficiently than anywhere else in the world. If we cut off our links and force them to diversify, of course that will have an effect on the prices which housewives have to pay in the shops. But we should be very happy if the Government would provide the time to debate all these matters.
  I am sorry for the Chancellor of the Duchy of Lancaster, who had to deal with these very awkward matters in his speech earlier today. But we shall not shed too many tears for him because we remember that he made his reputation in this House as the ruthless butcher of the lame ducks. However, it is rather ironic that at the end of this part of his political career he should be left with the roost to which the chickens come home. He has been left in charge of the roost to which the chickens will come home, particularly since the Government have managed to produce these embarrassing birds by battery methods.
  Therefore the unfortunate right hon. Gentleman is left defending a regional policy that has not come into operation, a food policy that is pushing up prices and all the other remnants of the economic policy that we have had to deal with in these respects. We are therefore sorry for him. However, much more important even than his grievous errors of the past is what is to happen in the future.
  I have a proposition to put to the House but I do not mean to advance

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  it in an argumentative way. What I seek to illustrate is the immensity of the choice that still rests with us should we seek to exert it. I refer to the speech by Chancellor Brandt. Everyone in the Houses recognises the stature and authority of the German Chancellor, and therefore we must treat his speech to the European Assembly as a matter of major political significance. He said, and this is one of the reasons why we put down our motion :
  "My Government hopes that by the end of this year a new and clear step forward will be taken along the road to European Government. This is what is required of us if we are to respect the decisions of the Paris conference of October 1972."
  A little earlier he said :
  "It is, as I have put it from time to time, a sensibly organised European Government which in the fields of common policies will be able to take the necessary decisions ".
  A little later he said :
  "We are now at the end of 1973, and that means that time is pressing. You know this as well as I do, which is why I ask you to concentrate your efforts on this Report. Allow me to outline the main elements of a European ad hoc programme which brooks no delay."
  That was the German Chancellor describing how he wishes to move towards a sovereign European Government holding immense powers. He hopes and trusts that the next steps towards monetary and economic union as laid down in the Paris decision of October 1972 will point the way in that direction. That is the way he wants to go, and he says so openly. I recognise perfectly well that what the Chancellor says is in one sense the inspiration of the whole European movement. It has an impressive logic on its side and in one sense this is the way in which most of the strongest advocates of British entry wish things to develop.
  My hon. Friend the Member for Motherwell (Mr. Lawson), who spoke with his usual eloquence and courage today, believes that. I respect his opinion and judgment as we obviously respect the opinion and judgment of Chancellor Brandt. That is how he wants the whole thing to develop, but he is not saying merely that. He is saying that before the end of this year we shall be taking decisive steps in that direction, if he gets his way. Let me put another aspect of the matter. I am not arguing now
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  the whole case against such a European Government, although I oppose it. However, let me illustrate why we think that the argument and the choice that has to be made are so momentous. In establishing a European Government as described by Herr Brandt we should be creating a super-State, and I do not wish to be a member of such a super-State.
  I believe also that if we do that we shall be destroying the British parliamentary system, because it would mean taking from this Parliament so many effective powers and transferring them elsewhere. Even if it were to a European Parliament such as Chancellor Brandt wants, that transfer would be on a scale that would erode the British parliamentary system to an extent that I do not believe people have yet imagined or conceived or would be prepared to accept.
  Moreover, I believe—I believe it more perhaps as a Socialist ; I do not expect sympathy from hon. Members on all these matters—that the fulfilment of Chancellor Brandt's aim and ideal would mean the permanent entry of this country, and in particular of the party of which I belong, into continental coalition politics. I use the word "continental" not in a denunciatory way but to describe the way in which they conduct their business, the way in which Chancellor Brandt conducts his business in Germany or the Social Democrats conduct theirs in France. Theirs is a system of more or less permanent coalition politics. That is how most European institutions operate as well. They all have the system of coalition arrangements for devising their legislation in advance. That is the system they wish to see established on a more permanent scale.
  I am not arguing the whole case. I am trying to illustrate the fact that, for all the various reasons I have given, to go along the road which Chancellor Brandt describes—he is saying that economic and monetary union is already one milestone along that road and that he wants to pass another before the end of the year—is a choice which has never yet been presented clearly to the British people.
  My main question to the Prime Minister and the Government is this. Do the Government think that the British people,

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  either through an election or by some other means, though an election is the most traditional method in this country, have a right to have the question submitted to them at any time? If so, when? Or do the Government claim that the decision was made in 1970? That appears to be the inference that the Prime Minister drew last year when he went to the Paris summit meeting and agreed to the economic and monetary union proposals which carried the Common Market much further than had previously been conceived. Now, on the authority of Chancellor Brandt, we are told that there is to be a further major attempt to get us to move along that road.
  Do the Government think that the establishment of a European Government, with all the resultant hopes, or evils as I would describe them, is a proper matter for the British people to settle at the polls? We on this side of the House think so. That is why we have said it in our motion, why we have argued so strongly on the matter before and why we have sought to secure support from other hon. Members for the proposition. We had hoped at one stage that the Liberal Party would give us some assistance in this respect, but the Liberals have been the most forward of all in saying that we should proceed along this road without the British people having any chance to express their opinion.
  That is why we say at our conferences and in the House, have sought to say in the motion, will continue to say, and will say it at the next election, that the issue must be kept open and that the British people must be allowed to decide it. That is why we say also that before that date, despite the Government's refusal to debate our motion now, it will have to be debated time and time again.
  Therefore, let no one who respects the way in which British politics can be conducted imagine that the issue has been closed by the way in which the Government have dealt with it. They have to make up their mind whether they think it is a proper issue for the British people to decide or whether they agree that it is proper for us to proceed along this
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  road without the British people having any chance to give their verdict.
  We have had many references in the debate to the manner in which people are surprised by some of the developments which have taken place in the way in which the Common Market has worked in the past year. Most remarkable of all—this ties up with the matter I am discussing—is the article in The Times of 13th November. It publishes so many articles. When it does not have articles on the Common Market saying that the British people should not be consulted, it has other articles saying that it is monstrous for British workers to do something without the consent of the British public.
  I have picked out what The Times said when we presented our little report—I do not say that it is more than that—about how Parliament might recapture some small part of the authority and power which we wantonly threw away in the European Communities Act. It said :
  "The magnitude of the constitutional innovations entailed by Britain's membership of the European Economic Community—something which Parliament was reluctant to admit during the passage of the legislation making way for membership…"
  Those few hon. Members on both sides of the House who attended the debates will recall that many, myself included, were afraid that we would be had up for tedious repetition. We said throughout, as a major part of our case, that not merely did the Common Market process mean that we were surrendering effective powers over food prices, over the size of lorries, over taxation policy and over legislation to institutions in Europe which were not democratic, but that in the process we would engage in the biggest surrender of parliamentary power to the executive here that this Parliament had ever seen. Now we have the proof—
  Mr. Marten: Hear, hear.
  Mr. Foot:—not only in the individual cases but because of what the Government now say by implication, partly by refusing our motion, partly from the way they have talked and partly from the conduct—this is the principal charge—of the Prime Minister at the last Summit meeting and the way he is preparing for the next Summit meeting. What the Government are saying to Parliament and

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  the country is that they have the right to decide whether we shall proceed along this road of economic and monetary union without even having the consent of Parliament to each stage in the process.
  If indeed the Government persist in refusing not merely to the people but to Parliament as well the power to settle these matters, they will poison not only parliamentary politics in this country but democratic politics as well. The Government are playing with something far bigger than themselves—Heaven knows, we never saw such pygmies in charge of our affairs!—and it is high time they remembered their responsibility to the democracy which planted them there and which will throw them out at the earliest opportunity.
  9.28 p.m.
  The Minister for Industrial Development (Mr. Christopher Chataway): I have had the honour, if that is how it should be described, of following the hon. Member for Ebbw Vale (Mr. Michael Foot) only on one occasion before. I do so in exactly the same spirit, confident that I have a great deal of the truth, none too convinced of many of the arguments he deployed, but equally none too confident after listening to his rolling oratory that it is within my capacity to begin to match it, and indeed I shall not try.
  The hon. Gentleman, as have many other hon. Members in the debate, looked beyond some of the immediate questions with which we are concerned. He touched only lightly on the regional policies and the regional development fund, which was the original reason for the debate. I will deal with those in a little greater detail.
  The Government accept the importance of the matters raised by the Select Committee, and my right hon. Friend the Leader of the House has already undertaken that they will be carefully studied and a Government statement made. We have had an extremely eloquent and persuasive speech from my right hon. Friend the Member for Wolverhampton, Southwest (Mr. Powell) on the subject of economic and monetary union, which provoked a speech from the hon. Member for Motherwell (Mr. Lawson) who took an opposite view.
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  In listening to my right hon. Friend I was reminded of some of the first occasions on which I can remember discussing with him questions of economic and monetary union. That was in the "One Nation Group" which was engaged in 1965 in producing a pamphlet called "One Europe ". As I remember it, my right hon. Friend played an important part in working on that campaign, as did my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley). My right hon. Friend did not in the end sign the document, because, as I remember, he was a member of the Shadow Cabinet. I got the pamphlet from the Library because it seemed that in arguing as we did in 1965 for progress towards economic and monetary union, we spelled out a good many of the arguments that still hold water. One paragraph seems to summarise it. We said :
  "We have already lost our ability to pursue an independent economic policy. The economic crisis at the end of 1964 has emphasised our dependence upon Europe. No country can be an economic island today. We depend upon Europe to guarantee the strength of sterling as a world currency. We cannot act alone-only in unison."
  That was the line of the argument we deployed then and I believe, with the hon. Member for Motherwell, that it is an illusion to argue, as my right hon. Friend seemed to be arguing today, that we are giving up our sovereignty by seeking, with others, a fuller control over our destiny.
  We know very well that there are many great problems, particularly inflation and prices, which, whatever view one takes, lie outside the control of any one nation State. I argue as strongly today as we argued then that it is right to make progress in these directions. There is a stark contrast between the arguments deployed by my right hon. Friend and the hon. Member for Ebbw Vale and those of the right hon. Member for Stepney (Mr. Shore). On the one hand a picture is conjured up of a Community in a headlong rush towards federalism, as if it is likely to arrive tomorrow. On the other hand, hon. and right hon. Gentlemen argue, and it is argued powerfully in this pamphlet, that progress is pathetically slow, that it is difficult to see that sufficient progress is being made.
  The truth is, as my right hon. Friend said in opening the debate, that we have to proceed on the basis of consensus.

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  If progress within the Community appears to be slow it is because no individual country is overruled in a major matter. Many hon. Members have spoken about the European Parliament. On the question of the European Parliament, all of them argued in favour of direct elections. They believe that direct elections were necessary if the European Parliament were to develop the powers which they wished to see it have if it was to develop the ability to control the Executive.
  The Government take the view that direct elections will be the right answer at some time in the future. I can well appreciate the argument which was deployed after 10 months in the European Parliament, that the Parliament imposes a great strain upon those who seek to combine membership of it with membership of the House of Commons. The Government believe that some further progress towards strengthening the powers of the European Parliament would be right before direct elections are further considered.
  I now turn to a matter which was raised by my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward Taylor) and by a number of other hon. Members, including the right hon. Member for Stepney—namely, regional policy and coordination in the Community. It has been suggested by some hon. Members that the Community's attempt at coordination puts us in some kind of strait-jacket. On accession to the Community we agreed to accept the principles of co-ordination that had already been formulated by the Six, provided they were suitably modified to take account of our situation. In practice the most important rule was that aid in the areas designated as central should not exceed 20 per cent. of the total investment. There are a number of other regulations but that is the most important. Such common rules are just as much in our interest as they are in the interest of the rest of the Community. They are an essential part of any regional policy.
  If there is no limitation on the aid that may be given in the more prosperous areas of the Community, it becomes more expensive and more difficult to promote effectively the interests of the poorer regions. Such limitations must surely be sensible. In the discussions which we
  344
  had with the Commission earlier this year about Article 154, we had two objectives. Our first objective was to ensure that there was no material change in the incentives that we pay in the regions under the Industry Act. We believe that they were well designed for the job. Second, we wanted to try to ensure that there was an effective limitation upon the incentives that Governments could give in the more prosperous areas. It will be appreciated that at the moment the limit is set very high and that it is a limitation which bites only occasionally.
  Some right hon. and hon. Members embarked on a considerable scare campaign. They sought in the regions to argue that entry into the Community would mean the end of regional policy. Even as late as our last debate on 26th June the right hon. Member for Stepney was making some horrific predictions. The right hon. Gentleman has made many more such predictions since. It is only right for the House to consider the way in which his last set of predictions have run. Let us consider the track record. On 26th June the right hon. Gentleman was saying :
  ' in five days' time, on 1st July, the British Government will cease to be self-determining in regional policy and can conduct only such regional policies as the Commission in Brussels is prepared to allow."
  The right hon. Gentleman later said :
  "That debate—and we shall have it—will probably turn out to be one of great embarrassment for the Government—one as embarrassing as any that their supporters have had to endure."—[OFFICIAL REPORT, 26th June 1973 ; Vol. 939, c. 1332.]
  Of course it did not turn out like that.
  Mr. Shore Mr. Shore rose—
  Mr. Chataway: Under the arrangements proposed by the Commission, there was no change in the incentives that we give in our assisted areas. That must have been a great relief to many of the right hon. Gentleman's hon. Friends who believed what he said.
  The Commission also proposed, and very much welcomed, a thorough-going review of the co-ordination rules in the Community as a whole by the end of 1974. The Commission recognised, as we had urged, that the simple central and peripheral classifications were not necessarily suited to the regional problems of

  345
  the enlarged Community. Therefore, there is the prospect of a more sophisticated and effective set of rules being developed before the end of next year.
  The right hon. Member for Stepney, having failed in that set of predictions, the next time that the matter comes up will not doubt say that we shall see disaster following. I believe that those who have been disappointed by his last set of predictions will not take much more notice of the next set.
  Mr. Shore: I think that the right hon. Gentleman will agree that the control of Britain's regional policy by agencies outside this country is a matter of profound importance. He will also recall that under Article 154 of the Treaty of Accession it was left to the Commission to determine by 1st July what were the central and peripheral areas of Britain. This House, on a motion by Her Majesty's Opposition, created a tremendous resistance to that proposal. As a result, the Commission changed the date to the end of 1974. It has yet to rule what are peripheral and central areas. The right hon. Gentleman must face the facts.
  Mr. Chafaway: The right hon. Gentleman may have amused some hon. Members by that intervention. We said throughout that there would be no changes in our regional policy, and it became abundantly clear that that was the situation. I must also tell the right hon. Gentleman that Article 154 provides a mechanism whereby there can be some limitation against over-bidding. That is a matter that we have always supported and that anybody in his right mind would want.
  The hon. Member for Stockton-on-Tees (Mr. William Rodgers), in his interesting speech, suggested a proposal that would go a good deal further. Mr. George Thompson and the Commission have given support to the idea of a kind of European IDC policy which would not only set a limit in the central areas on the aid that the Government might give but would try to operate within the Community the same sort of limitation upon expansion in the more prosperous areas. That is an extension of an idea embodied in Article 154 which is sensible and to which we are prepared to give careful study.
  Mr. Gavin Strang: What about the money?
  Mr. Chataway: The hon. Gentleman asks about the money. I come now to the regional development fund. Indeed, my hon. Friend the Member for Cathcart asked why there should be a fund. The ideal of balanced growth—the ideal of achieving not only material progress but a fairer distribution of wealth and opportunities throughout the regions in Europe—has always been an ideal of the Community. Since its inception some progress has been made with the Social Fund and the reconversion aids of the Coal and Steel Community. The constituents of the hon. Member for Ebbw Vale will, I hope, gain substantially from both funds. As a nation we shall be making considerable use of them.
  Again, there is the European Investment Bank from which small firms in the regions in Britain, through ICFC and the British Steel Corporation, are beginning to benefit. The British Steel Corporation recently secured a loan of £14·7 million for a development on Teesside.
  I turn to the decision at last year's Summit to set up a regional development fund.
  Mr. Marten: My right hon. Friend said that we had received £14 million from the Investment Bank. He did not say that we had already put in £45 million and are due to put in £225 million.
  Mr. Chataway: I believe that we shall secure a very good return from the European Investment Bank. There is not much doubt that in terms of the European Investment Bank—and I shall be happy to discuss the matter in further detail with my hon. Friend the Member for Banbury (Mr. Marten), although I must admit that this is not the most important of the Community's regional institutions—we shall be the gainer.
  I turn now to the more important issue of the Regional Development Fund. The decision to set up that fund taken at the Summit last year was a decision in which this country and my right hon. Friend the Prime Minister played a major part. It marked the first attempt to provide within the Community an instrument strong enough to tackle the great regional disparities that now exist. It was decided to set it up by the end of this year. It

  347
  involved a timetable and a great deal of intensive work for Mr. George Thomson, for the Commission and for its officials. It involved a number of countries in the collection of statistics and all the rest. It was no mean achievement in terms of the preparatory work carried out within the timetable set.
  We are now at the point where negotiations between member States can begin in earnest. They will be much helped by the work done by my hon. Friend the Member for Southampton, Test (Mr. S. James A. Hill) and his colleagues on the relevant committee of the European Parliament. The House will recognise from his speech that my hon. Friend has a detailed grasp of these issues, and the report which his committee prepared will help the Council of Ministers and the Commission a great deal.
  It must be a source of enormous perplexity to constituents of many Labour Members that their representatives are not allowed to go to the European Parliament to discuss these issues. Whether they are in favour of the Community or not, whether they hate all foreigners or not, one would have thought that it only makes sense that they should do their duty as elected Members by going to the European Parliament and trying to exert some influence there by discussing proposals which will be of major importance to their constituents.
  I wish to comment briefly on some of the strengths and weaknesses of the Commission's proposals as I see them. We welcome the fact that the Commission wants regional areas to be chosen according to certain objective criteria. The Summit communiqué said that these should identify the problems of agriculture, the predominance of industrial change, and structural under employment. The Commission has suggested that a variety of specific measures should be used covering aspects of regional imbalance, such as high unemployment, outward migration, dependence on declining economic activity and low income per head. It is a general requirement for eligibility of an area that its income per head should be below the Community average. These criteria are not the same as we use in our assisted areas, but the coverage given the United Kingdom is for most part much the same.
  348
  Scotland, Northern Ireland and Wales are included, as are nearly all the special development and development areas of England. In addition, a good part of the intermediate areas is covered.
  There are some changes we should like to see, but I know that the whole House would agree that that coverage ties in reasonably well with our own priorities. This applies in general also to our partners. The main areas covered are Ireland, Southern Italy and South-West France. That gives on the whole a commonsense coverage of the Community, even if the situation is not perfect. According to the Commission about 35 per cent. of the qualifying population is in Italy, 25 per cent. in the United Kingdom and 21 per cent. in France. Only 4 per cent. is in Ireland, but with the small size of total national population taken into account, Ireland's share is the largest of all.
  Mr. John Biggs-Davison: It is a semantic but important point, but when my right hon. Friend says" Ireland" does he mean both Northern Ireland and the Republic?
  Mr. Chataway: I mean Eire.
  The Commission's proposals certainly are not perfect. In our view they are somewhat too restrictive towards industrial change when compared with agricultural predominance. For example, to qualify under the industrial change criterion an area has to have a certain level of unemployment, apart from having a concentration of unemployment in coal and textiles. There is no comparable unemployment hurdle in the case of agriculture. We believe that a better balance is needed and we would seek to secure it in negotiation. Again, we would look at some aspects of the administration of the fund to ensure that it is not bureaucratic and that there are not delays.
  A number of hon. Members asked whether it is worth it. By that I assume they mean two things. Will it be of value to the poorer regions of Europe? Will it be of value to this country? All one can say at this stage is that, as the Commission's proposals will have made perfectly clear, it is intended that under the Commission's proposals this country should receive some 25 per cent. of the fund. It will be known that the average

  349
  contribution of the United Kingdom in the first three years—the fund is dealing with the first three years ; it is open to negotiation thereafter—is some 13½ per cent.
  The right hon. Gentleman, I believe, says, "All right, you may find that there will be a substantial gain in the early years ". He has also said that the United Kingdom is bound to be a larger contributor in years to come. One detects a certain contradiction in some of the arguments he uses. He accepts that these proposals are designed on an objective basis to help some of those regions in Europe which are less well off. That is why they are there. He then predicts that if we stay in Europe we shall go on to total penury, but, surprisingly, he also argues that, despite these two things, come the late 1970s we shall be net payers-out. He cannot have it both ways. This is a fund designed, and, I believe, accurately designed—and nobody in the debate has thrown doubt on that—to help the regions of Europe that need help, and if we make faster progress than is expected then we shall gain less ; but if we were by comparison, as the right hon. Gentleman fears, in the last 1970s in relative poverty, we should be major beneficiaries.
  Mr. Shore Mr. Shore rose—
  Mr. Chataway: Would the right hon. Gentleman allow me to go on? I have given way to him for a long intervention. I must come to a matter raised by the hon. Member for Ebbw Vale who asked me about inward investment and outward investment.
  The hon. Member took the view, as I understood him, that outward investment is bad for a country and inward investment is good for a country. He said to me, "Do not tell me about the new investment coming to Ebbw Vale—somebody going to Europe would otherwise have arrived in Ebbw Vale.". For a few months yet there will not be figures of capital movements of inward and outward investment for the United Kingdom. But I do not believe, and I do not think that any Government believe, that the United States, for example, is impoverished by the investment that it makes in this country ; and I do not think that the United Kingdom is impoverished by the investment made by British firms in Europe, especially since the majority of that
  350
  investment is made with funds raised locally.
  The article that the hon. Gentleman quoted from the Sunday Times makes the point that virtually all that money is raised in Europe and therefore contributes to our invisible earnings. But squirm as he may, the hon. Gentleman cannot get away from the fact—perhaps he would not wish to—that enormous benefits are coming to his constituency as a result of Britain's entry into the Community.
  On the last occasion on which I spoke after the hon. Gentleman, he made an impressive and impassioned speech on behalf of his constituents because 4,600 jobs were to be lost in Ebbw Vale as a result of steel reorganisation. Since that speech, as the hon. Gentleman has admitted, as a result of our entry into the Common Market, we have had expansion planned by Hoover. It is the largest that the company has made, and it will bring 3,000 jobs to neighbouring Merthyr Tydvil. We have also had a decision by a German company with 600 jobs coming to Ebbw Vale. I believe that that is by no means the end. It is ironic that the hon. Gentleman should be inveigling against the Europeans at a time when his constituents will be making friends rapidly with those European countries and benefiting from our entry into the Community.
  Mr. Michael Foot: I had already put the position in its proper perspective. However, I asked the right hon. Gentleman to give the figures. He has not given them.
  Mr. Chataway: As I have explained, the figures for which the hon. Gentleman was asking are not collected. In the only major investigation done on this subject that I know of, Professor Reddaway demonstrated that outward investment does not have any effect on the level of inward investment.
  Perhaps the most remarkable feature of the debate for those who have listened to it throughout is that, in theory at least, the two Opposition Front Bench spokesmen have been arguing in favour of renegotiation. I do not believe that many who listened to the right hon. Member for Stepney or to the hon. Member for Ebbw Vale would have recognised that what they were asking apparently was not that we should pull out of the Community. They are not opposed in

  351
  principle to the Common Market. They are in favour of entry on the right terms.
  This has begun to be a charade. Recently the right hon. Member for Stepney published a pamphlet with the exciting title "Europe : the way back." In it he set out the means by which renegotiation will take place. First, if a Labour Government come back, all or most of the European Communities Act will be repealed. Secondly, under the Immigration Act of 1971 immigration controls will be imposed upon workers from Europe, a good many of them probably fellow Socialists. After that the Europeans will be allowed to say
  whether at our injunction they are prepared to turn the Common Market into some kind of loose free trade area.
  I imagine that, under the new dispensation and the new arrangements made at Transport House, arguments of that kind will not pass as a weekend speech if the party is committed to renegotiation.
  I ask my right hon. and hon. Friends to support the Government in the Division Lobby.
  Question put, That this House do now adjourn :
  The House divided : Ayes 248, Noes 285.

  Division No. 13.]

  AYES

  [9.59 p.m.

  Abse, Leo

  Driberg, Tom

  John, Brynmor

  Allaun, Frank (Salford, E.)

  Duffy, A. E. P.

  Johnson, James (K'ston-on-Hull, W.)

  Archer, Peter (Rowley Regis)

  Dunn, James A.

  Johnson, Walter (Derby, S.)

  Armstrong, Ernest

  Dunnett, Jack

  Jones, Barry (Flint, E.)

  Ashley, Jack

  Eadie, Alex

  Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)

  Ashton, Joe

  Edelman, Maurice

  Jones, Gwynoro (Carmarthen)

  Atkinson, Norman

  Edwards, Robert (Bilston)

  Jones, T. Alec (Rhondda, W.)

  Bagier, Gordon A. T.

  Edwards, William (Merioneth)

  Judd, Frank

  Barnett, Guy (Greenwich)

  Ellis, Tom

  Kaufman, Gerald

  Barnett, Joel (Heywood and Royton)

  English, Michael

  Kelley, Richard

  Baxter, William

  Evans, Fred

  Kinnock,Neil

  Beaney, Alan

  Ewing, Harry

  Lambie, David

  Benn, Rt. Hn. Anthony Wedgwood

  Faulds, Andrew

  Lamborn, Harry

  Bidwell, Sydney

  Fernyhough, Rt. Hn. E.

  Latham, Arthur

  Bishop, E. S.

  Filch, Alan (Wigan)

  Leadbitter, Ted

  Boardman, H. (Leigh)

  Fletcher, Ted (Darlington)

  Lee, Rt. Hn. Frederick

  Booth, Albert

  Foot, Michael

  Leonard, Dick

  Boothroyd, Miss Betty

  Ford, Ben

  Lestor, Miss Joan

  Bottomley, Rt. Hn. Arthur

  Forrester, John

  Lewis, Arthur (W. Ham, N.)

  Boyden, James (Bishop Auckland)

  Fraser, John (Norwood)

  Lewis, Ron (Carlisle)

  Bradley, Tom

  Freeson, Reginald

  Lipton, Marcus

  Brown, Robert C. (N'c'tle-u-Tyne, W.)

  Galpern, Sir Myer

  Lomas, Kenneth

  Brown, Hugh D. (G'gow, Provan)

  Garrett, W. E.

  Loughlin, Charles

  Brown, Ronald (Shoreditch & F'bury)

  Gilbert, Dr. John

  Mabon, Dr. J. Dickson

  Buchanan, Richard (G'gow, Sp'burn)

  Ginsburg, David (Dewsbury)

  McBride, Neil

  Butler, Mrs. Joyce (Wood Green)

  Golding, John

  MacDonald. Mrs. Margo

  Campbell, I. (Dunbartonshire, W.)

  Gordon Walker, Rt. Hn. P. C

  McElhone, Frank

  Cant, R. B.

  Gourlay, Harry

  McGuire, Michael

  Carter, Ray (Birmingh'm, Northfield)

  Grant, George (Morpeth)

  Machin, George

  Carter-Jones, Lewis (Eccles)

  Grant John D. (Islington, E.)

  Mackenzie, Gregor

  Castle, Rt. Hn. Barbara

  Griffiths, Eddie (Brightside)

  Maclennan, Robert

  Clark, David (Colne Valley)

  Hamilton, James (Bothwell)

  McMillan, Tom (Glasgow, C.)

  Cocks, Michael (Bristol, S.)

  Hamilton, William (Fife, W.)

  McNamara, J. Kevin

  Cohen, Stanley

  Hamling, William

  Mahon, Simon (Bootle)

  Concannon, J. D.

  Hannan, William (G'gow, Maryhill)

  Mallalieu, J. P. W. (Huddersfield, E.)

  Conlan, Bernard

  Hardy, Peter

  Marks, Kenneth

  Corbet, Mrs. Freda

  Harrison, Walter (Wakefield)

  Marquand, David

  Cox, Thomas (Wandsworth, C)

  Hart, Rt. Hn. Judith

  Marsden, F.

  Cronin, John

  Hattersley, Roy

  Marshall, Dr. Edmund

  Crosland, Rt. Hn. Anthony

  Hatton, F.

  Meacher, Michael

  Crossman, Rt. Hn. Richard

  Healey, Rt. Hn. Denis

  Mellish, Rt. Hn. Robert

  Cunningham, G. (Islington, S. W.)

  Heffer, Eric S.

  Mendelson, John

  Cunningham, Dr. J. A. (Whitehaven)

  Hilton, W. S.

  Mikardo, Ian

  Darling, Rt. Hn. George

  Horam, John

  Millan, Bruce

  Davidson, Arthur

  Houghton, Rt. Hn. Douglas

  Miller, Dr. M. S.

  Davies, Denzil (Lianelly)

  Howell, Denis (Small Heath)

  Milne, Edward

  Davies, G. Elfed (Rhondda, E.)

  Huckfield, Leslie

  Mitchell, R. C. (S'hampton, ltchen)

  Davis, Clinton (Hackney, C.)

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Molloy, William

  Davis, Terry (Bromsgrove)

  Hughes, Mark (Durham)

  Morgan, Elystan (Cardiganshire)

  Deakins, Eric

  Hughes, Robert (Aberdeen, N.)

  Morris, Alfred (Wythenshawe)

  de Freitas, Rt. Hn. Sir Geoffrey

  Hughes, Roy (Newport)

  Morris, Charles R. (Openshaw)

  Delargy, Hugh

  Hunter, Adam

  Morris, Rt. Hn. John (Aberavon)

  Dempsey, James

  Irvine, Rt. Hn. Sir Arthur (Edge Hill)

  Moyle, Roland

  Doig, Peter

  Janner, Greville

  Murray, Ronald King

  Dormand, J. D.

  Jay, Rt. Hn. Douglas

  Oakes, Gordon

  Douglas, Dick (Stirlingshire, E.)

  Jeger, Mrs. Lena

  O'Halloran, Michael

  Douglas-Mann, Bruce

  Jenkins, Hugh (Putney)

  O'Malley, Brian

  Oram, Bert

  Ross, Rt. Hn. William (Kilmarnock)

  Tinn, James

  Orme, Stanley

  Rowlands, Ted

  Tomney, Frank

  Oswald, Thomas

  Sandelson, Neville

  Torney, Tom

  Owen, Dr. David (Plymouth, Sutton)

  Sheldon, Robert (Ashton-under-Lyne)

  Tuck, Raphael

  Paget, R. T.

  Shore, Rt. Hn. Peter (Stepney)

  Urwin, T. W.

  Palmer, Arthur

  Short, Rt. Hn. Edward (N'c'tle-u-Tyne)

  Varley, Eric G.

  Pannell, Rt. Hn. Charles

  Short, Mrs. Renée (W'hampton, N. E.)

  Wainwright, Edwin

  Parker, John (Dagenham)

  Silkin, Rt. Hn. John (Deptford)

  Walden, Brian (B'm'ham, All Saints)

  Pavitt, Laurie

  Silkin, Hn. S. C. (Dulwich)

  Walker, Harold (Doncaster)

  Peart, Rt. Hn. Fred

  Sillars, James

  Wallace, George

  Pendry, Tom

  Silverman, Julius

  Watkins, David

  Perry, Ernest G.

  Skinner, Dennis

  Weitzman, David

  Prentice, Rt. Hn. Reg.

  Smith, John (Lanarkshire, N.)

  Wellbeloved, James

  Prescott, John

  Spearing, Nigel

  Whitehead, Phillip

  Price, William (Rugby)

  Spriggs, Leslie

  Whitlock, William

  Probert, Arthur

  Stallard, A. W.

  Willey, Rt. Hn. Frederick

  Radice, Giles

  Stewart, Donald (Western Isles)

  Williams, Alan (Swansea, W.)

  Reed, D. (Sedgefield)

  Stewart, Rt. Hn. Michael (Fulham)

  Williams, Mrs. Shirley (Hitchin)

  Rees, Merlyn (Leeds, S.)

  Stoddart, David (Swindon)

  Williams, W. T. (Warrington)

  Rhodes, Geoffrey

  Stonehouse, Rt. Hn. John

  Wilson, Alexander (Hamilton)

  Richard, Ivor

  Stott, Roger

  Wilson, Rt. Hn. Harold (Huyton)

  Roberts, Rt. Hn. Goronwy (Caernarvon)

  Strang, Gavin

  Wilson, William (Coventry, S.)

  Robertson, John (Paisley)

  Strauss, Rt. Hn. G. R.

  Woof, Robert

  Roderick, Caerwyn E. (Brc'n&R'dnor)

  Summerskill, Hn. Dr. Shirley

  TELLERS FOR THE AYES :

  Rodgers, William (Stockton-on-Tees)

  Swain, Thomas

  Mr. Joseph Harper and

  Roper, John

  Thomas, Rt. Hn. George (Cardiff, W.)

  Mr. Donald Coleman.

  Rose, Paul B.

  Thomas, Jeffrey (Abertillery)

  NOES

  Adley, Robert

  Critchley, Julian

  Harvie Anderson, Miss

  Alison, Michael (Barkston Ash)

  Crowder, F. P.

  Haselhurst, Alan

  Allason, James (Hemel Hempstead)

  Davies, Rt. Hn. John (Knutsford)

  Havers, Sir Michael

  Amery, Rt. Hn. Julian

  d'Avigdor-Goldsmid, Sir Henry

  Hay, John

  Archer, Jeffrey (Louth)

  d'Avigdor-Goldsmid. Maj -Gen. Jack

  Hayhoe, Barney

  Astor, John

  Dean, Paul

  Heath, Rt. Hn. Edward

  Atkins, Humphrey

  Digby, Simon Wingfield

  Heseltine, Michael

  Austick, David

  Dodds-Parker, Sir Douglas

  Hicks, Robert

  Awdry, Daniel

  Douglas-Home, Rt. Hn. Sir Alec

  Higgins, Terence L.

  Baker, Kenneth (St. Marylebone)

  Drayson, Burnaby

  Hiley, Joseph

  Baker, W. H. K. (Banff)

  Dykes, Hugh

  Hill, John E. B. (Norfolk, S.)

  Balniel, Rt. Hn. Lord

  Eden, Rt. Hn. Sir John

  Hill, S. James A. (Southampton, Test)

  Barber, Rt. Hn. Anthony

  Edwards, Nicholas (Pembroke)

  Holland, Philip

  Batsford, Brian

  Elliot, Capt. Walter (Carshalton)

  Holt, Miss Mary

  Beamish, Col. Sir Tufton

  Elliott, R. W. (N'c'tle-upon-Tyne. N.)

  Hooson, Emlyn

  Beith, A. J.

  Emery, Peter

  Hordern, Peter

  Bennett, Sir Frederick (Torquay)

  Eyre, Reginald

  Hornby, Richard

  Bennett, Dr. Reginald (Gosport)

  Farr, John

  Hornsby-Smith, Rt. Hn. Dame Patricia

  Benyon, W.

  Fenner, Mrs. Peggy

  Howe, Rt. Hn. Sir Geoffrey (Reigate)

  Biggs-Davison, John

  Fidler, Michael

  Howell, David (Guildford)

  Blaker, Peter

  Finsberg, Geoffrey (Hampstead)

  Howell, Ralph (Norfolk, N.)

  Boardman, Tom (Leicester, S. W.)

  Fisher, Nigel (Surbiton)

  Hunt, John

  Boscawen, Hn. Robert

  Fletcher, Alexander (Edinburgh, N.)

  Hutchison, Michael Clark

  Bowden, Andrew

  Fletcher-Cooke, Charles

  Iremonger, T. L.

  Braine, Sir Bernard

  Fookes, Miss Janet

  Irvine, Bryant Godman (Rye)

  Bray, Ronald

  Fortescue, Tim

  James, David

  Brewis, John

  Foster, Sir John

  Jenkin, Rt. Hn. P. (W'st'd & W'df'd)

  Brinton, Sir Tatton

  Fowler, Norman

  Jessel, Toby

  Brocklebank-Fowler, Christopher

  Fox, Marcus

  Johnson Smith, G. (E. Grinstead)

  Brown, Sir Edward (Bath)

  Fry, Peter

  Johnston, Russell (Inverness)

  Bruce-Gardyne, J.

  Galbraith, Hn. T. G. D.

  Jones, Arthur (Northants, S.)

  Bryan, Sir Paul

  Gardner, Edward

  Jopling, Michael

  Buchanan-Smith, Alick (Angus, N&M)

  Gibson-Watt, David

  Joseph, Rt. Hn. Sir Keith

  Buck, Antony

  Gilmour, Ian (Norfolk, C.)

  Kaberry, Sir Donald

  Bullus, Sir Eric

  Gilmour, Sir John (Fife, E.)

  Kellett-Bowman, Mrs. Elaine

  Burden, F. A.

  Glyn, Dr. Alan

  Kershaw, Anthony

  Butler, Adam (Bosworth)

  Godber, Rt. Hn. J. B.

  Kimball, Marcus

  Campbell, Rt. Hn. G.(Moray & Nairn)

  Goodhart, Philip

  King, Evelyn (Dorset, S.)

  Carlisle, Mark

  Goodhew, Victor

  King, Tom (Bridgwater)

  Carr, Rt. Hn. Robert

  Gorst, John

  Kinsey, J. R.

  Cary, Sir Robert

  Gower, Raymond

  Kirk, Peter

  Channon, Paul

  Grant, Anthony (Harrow, C.)

  Kitson, Timothy

  Chapman, Sydney

  Gray, Hamish

  Knight, Mrs. Jill

  Chataway, Rt. Hn. Christopher

  Green, Alan

  Knox, David

  Chichester-Clark, R.

  Grieve, Percy

  Lamont, Norman

  Churchill, W. S.

  Griffiths, Eldon (Bury St. Edmunds)

  Lane, David

  Clark, William (Surrey, E.)

  Grimond, Rt. Hn. J.

  Langford-Holt, Sir John

  Clarke, Kenneth (Rushcliffe)

  Grylls, Michael

  Le Marchant, Spencer

  Cockeram, Eric

  Gummer, J. Selwyn

  Lewis, Kenneth (Rutland)

  Cooke, Robert

  Gurden, Harold

  Lloyd, Rt. Hn. Geoffrey (Sut'nC'field)

  Cooper, A. E.

  Hall, Sir John (Wycombe)

  Lloyd, Ian (P'tsm'th, Langstone)

  Cordle, John

  Hall-Davis, A. G. F.

  Longden, Sir Gilbert

  Corfield, Rt. Hn. Sir Frederick

  Hamilton, Michael (Salisbury)

  Loveridge, John

  Cormack, Patrick

  Hannam, John (Exeter)

  McAdden, Sir Stephen

  Costain, A. P.

  Harrison, Col. Sir Harwood (Eye)

  MacArthur, Ian

  354

  355

  McCrindle, R. A.

  Price, David (Eastleigh)

  Stewart-Smith, Geoffrey (Belper)

  McMaster, Stanley

  Prior, Rt. Hn. J. M. L.

  Stodart, Anthony (Edinburgh, W.)

  Macmillan. Rt. Hn. Maurice (Farnham)

  Proudfoot, Wilfred

  Stuttaford, Dr. Tom

  McNair-Wilson, Michael

  Pym, Rt. Hn. Francis

  Sutcliffe, John

  McNair-Wilson, Patrick (New Forest)

  Quennell, Miss J. M.

  Tapsell, Peter

  Madel, David

  Raison, Timothy

  Taverne, Dick

  Maginnis, John E.

  Ramsden, Rt. Hn. James

  Taylor, Edward M.(G'gow, Cathcart)

  Marples, Rt. Hn. Ernest

  Rawlinson, Rt. Hn. Sir Peter

  Taylor, Frank (Moss Side)

  Mather, Carol

  Redmond, Robert

  Taylor, Robert (Croydon, N. W.)

  Maude, Angus

  Reed, Laurance (Bolton, E.)

  Tebbit, Norman

  Maudling, Rt. Hn. Reginald

  Rees, Peter (Dover)

  Temple, John M.

  Mawby, Ray

  Rees-Davies, W. R.

  Thatcher, Rt. Hn. Mrs. Margaret

  Maxwell-Hyslop, R. J.

  Renton, Rt. Hn. Sir David

  Thomas, John Stradling (Monmouth)

  Meyer, Sir Anthony

  Rhys Williams, Sir Brandon

  Thomas, Rt. Hn. Peter (Hendon, S.)

  Mills, Peter (Torrington)

  Ridley, Hn. Nicholas

  Thompson, Sir Richard (Croydon, S.)

  Miscampbell, Norman

  Ridsdale, Julian

  Thorpe, Rt. Hn. Jeremy

  Mitchell, Lt. -Col. C.( Aberdeenshire, W)

  Rippon, Rt. Hn. Geoffrey

  Tilney, Sir John

  Mitchell, David (Basingstoke)

  Roberts, Wyn (Conway)

  Trafford, Dr. Anthony

  Monks, Mrs. Connie

  Rodgers, Sir John (Sevenoaks)

  Trew, Peter

  Monro, Hector

  Rossi, Hugh (Hornsey)

  Tugendhat, Christopher

  Montgomery, Fergus

  Rost, Peter

  Turton, Rt. Hn. Sir Robin

  More, Jasper

  Royle, Anthony

  Vaughan, Dr. Gerard

  Morgan-Giles, Rear-Adm.

  Russell, Sir Ronald

  Vickers, Dame Joan

  Morrison, Charles

  St. John-Stevas, Norman

  Waddington, David

  Mudd, David

  Sainsbury, Tim

  Walder, David (Clitheroe)

  Neave, Airey

  Scott, Nicholas

  Walker-Smith, Rt. Hn. Sir Derek

  Nicholls, Sir Harmar

  Scott-Hopkins, James

  Wall, Patrick

  Noble, Rt. Hn. Michael

  Shaw, Michael (Sc'b'gh & Whitby)

  Walters, Dennis

  Normanton, Tom

  Shelton, William (Clapham)

  Ward, Dame Irene

  Nott, John

  Shersby, Michael

  Weatherill, Bernard

  Onslow, Cranley

  Simeons, Charles

  Wells, John (Maidstone)

  Oppenheim, Mrs. Sally

  Sinclair, Sir George

  White, Roger (Gravesend)

  Page, Rt. Hn. Graham (Crosby)

  Skeet, T. H. H.

  Wiggin, Jerry

  Pardoe, John

  Smith, Cyril (Rochdale)

  Wilkinson, John

  Parkinson, Cecil

  Smith, Dudley (W'wick & L'mington)

  Wolrige-Gordon, Patrick

  Peel, Sir John

  Soref, Harold

  Woodhouse, Hn. Christopher

  Percival, Ian

  Speed, Keith

  Wylie, Rt. Hn. N. R.

  Peyton, Rt. Hn. John

  Spence, John

  Younger, Hn. George

  Pike, Miss Mervyn

  Sproat, lain

  TELLERS FOR THE NOES :

  Pink, R. Bonner

  Stainton, Keith

  Mr. Walter Clegg and

  Pounder, Rafton

  Stanbrook, Ivor

  Mr. Paul Hawkins

  Question accordingly negatived.

  EUROPEAN COMMUNITY AFFAIRS
    ADJOURNMENT
    Motion made, and Question proposed, That this House do now adjourn.—[Mr. Gray.]

  LONDON COMMODITY MARKETS
  10.13 p.m.
  Mr. Ray Carter: The subject of this debate is the need for an immediate inquiry into the affairs of the London commodity markets. All hon. Members who are interested in the rising prices of commodities will have immediate sympathy with the intention behind this debate. Like me, they will have seen the soaring prices on the food and metal commodity markets which have gone to all-time highs. This is due to speculation of a kind that we have never seen before. Already there has been one quite disastrous fatality—Rowntree's, which lost about £20 million in the cocoa market. However, for everyone who has lost in the commodity markets—admittedly, so far, there has been no one else in that particular category—there are probably a hundred or more who have gained.
  It is no good for the apologists to say that speculation makes no difference. I expect the Minister to be an apologist for the markets ; or, for that matter, any other hon. Member who intervenes in the debate. But on the contrary, from what I have been able to gather from experts in these matters, it seems that speculation is a prime mover in the whole question of inflation. Indeed, in the United States people are languishing in gaol precisely because of the part they played in various aspects of the spectacular rises which have occurred in the commodity markets there. Investigations are afoot into the way in which the United States commodity markets are operating.
  I ought to make it clear that I have no intention of attacking the traditional operations of the commodity markets. That is not the object of the exercise. Already today I have met two representatives of the commodity markets. I made it quite plain to them that, as far
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  as I and most reasonable people are concerned, the markets when operating in their traditional manner do a valuable service. In times of great currency difficulties of the kind that we have today, however, it seems that the traditional system of operation is to a large extent irrelevant.
  Mr. William Clark: Rubbish.
  Mr. Carter: Perhaps the hon. Gentleman will go to his constituency this weekend and have a word with one or two ordinary people about the prices of various commodities, and then relate to them the way in which the commodity markets have operated over the past few years and the kind of fortunes that have been made out of speculation. If the hon. Gentleman listened to ordinary people, he would not return with a retort such as "Rubbish ".
  It is no good for the Prime Minister to criticise world prices alone as the sole contributor towards rising prices. It is my contention that speculation of a quite immoral and unjustified kind has led to many unjustified price increases. What we ought to do is to look at the root causes rather more than we do. That is why I sought this Adjournment debate. Speculation is greatly to blame for the runaway indexes on the commodity market, and they fire the whole process of runaway commodity prices.
  I do not claim to be an expert in these matters—
  Mr. Clark: That is obvious.
  Mr. Carter:—unlike hon. Members on the Government back benches would claim to be. But they have a finger in the pie. This is their particular field. They would seek to justify almost any of the quite outrageous operations that have taken place in the commodity markets over the past three or four years.
  If we look at the future's markets, we see quite the worst aspects of these affairs. A small deposit can lay claim to some future supply of a commodity, be it food or material. Having made that small deposit, the paper money that the transaction now represents can be traded time and again, and fortunes can be made out

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  of that trading with no practical end result and absolutely no benefit to anyone save the speculator. It is indeed a speculators' paradise. The gentlemen I saw this afternoon, who represent the commodity markets, have very serious doubts about the way in which this aspect of the market operates, and I would rather listen to them than to Conservative Members who would merely seek to defend rather than examine it in in a clear and impartial way.
  1 should like to quote from the Economist of July this year. It stated :
  "Little of the turnover on London's commodity exchanges is ending in actual deliveries. Cocoa, which has surged £200 a ton in three weeks, provides an example of what is happening. In one day this week 100,000 tons of cocoa were turned over in London but a mere 400 tons of actual cocoa beans were purchased in Ghana during the whole of the previous week."
  Hon. Members cannot say "Rubbish" to that. It is quite outrageous and simply should not have happened. One might add that, as a result of that speculation, the price of cocoa soared to unparalleled heights. The article went on to state that
  "The markets have become unreal."
  The net result of all this activity is a quite staggering increase in final prices, principally because at a time of great monetary uncertainty people have been putting their resources, their spare liquid cash, into tangible things such as commodities.
  We ought to look at the way in which the indices for commodities have moved over the past three years. The Economist All-Items Commodity Index stood in June 1970 at 123·8 ; by June 1973 it had risen to 230·6. If we take food, in which the Minister will be interested, in June 1970 the index stood at 132·3 ; in June 1973 it had risen to 250·5. To take fibres, wool and cotton, in June 1970 the index stood at 79·7 ; in June 1973 it stood at 270·3. Changes of that kind simply cannot be put down to alterations in supply and demand. There has not been a dramatic change in either supply or demand. What is most ludicrous—
  Mr. Cecil Parkinson: Here is someone who knows nothing whatever.
  Mr. Carter: It is nearly 25 minutes past 10. I should have thought that even if Members who clearly do not know very much at all about the subject wish to defend what has happened they could sit back for a moment and listen to what someone who cares about these matters has to say. I admitted that I am not an expert.
  Mr. Norman Lamen Mr. Norman Lamen (Kingston-upon-Thames) rose—
  Mr. Carter: I will not give way because there is not time. What is quite ridiculous is that small changes on either side of the supply/demand equation can lead to quite dramatic changes in the final price situation.
  There are other aspects of the goings-on in the commodity markets which we should clearly look at. There is the whole question of monopoly. It was suggested in the same article in the Economist that a monopoly wave may well be developing once again in the pepper market. It stated that
  "someone seems out to corner that old favourite, the pepper market ".
  Prices have risen 28 per cent. this month to £900 a ton. Then, again, there is the overstocking of materials by major manufacturers and industries. Should not this question be looked at? After all, quite unjustified overstocking, if done on a sufficiently large scale, can have a quite disastrous effect upon overall prices.
  There is also the question of what happens to the profits that are made by individuals. I wonder whether the Inland Revenue knows enough about profits which are being made and have been made in the commodity markets over the last few years. Has it sufficient information? I sincerely hope so. There was a well-known legal case some years ago. Precisely what part of the profits made in these activities is taken into account for tax? I sincerely hope that the Inland Revenue is not losing sight of the people who are making hundreds of thousands if not millions of pounds in this way.
  It would be a scandal if at the time of wage restraint those individuals were able to make profits which did not attract the kind of taxation they so obviously deserve. I believe that the markets themselves would welcome an inquiry.

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  The conversations I have had so far today have led me to believe that to be so, in spite of the shouts by Conservative Members. The people I have spoken to have grave doubts about the way some forms of speculation have been occurring over the last three and a half years and I am sure that if the Government wished to carry out an inquiry they would receive the support and co-operation of the market.
  If an inquiry is established—I do not hold out a lot of hope—it should examine the extent and level of speculation of the last few years. It should also examine what the Government themselves can do to try to stabilise and control situations of the kind we have had over the last three and a half or four years when, because of monetary uncertainty, people have rushed to put their finance into tangible things like commodities in order at least to keep pace with inflation and, if possible, to get ahead of it.
  There are other matters that I have already mentioned like possible monopoly situations, and we know from the past that these are not imaginary happenings ; they actually exist. There is the other question of overstocking. Should not firms be told, in the interest of maintaining the lowest possible prices, that overstocking will not be tolerated and. what is more, that Governments will intervene to ensure that that does not happen?
  There is then the question of tax avoidance. The commodity markets are a speculator's paradise, and unless the Inland Revenue is diligent many people will be making money undetected. I sincerely hope, although the appropriate Treasury Minister is not with us, that that Department will ensure that no one is avoiding tax.
  I have highlighted the principal problems. We should remember that there is great agitation in this country about the way prices have risen to unprecedented levels. It is a pity that we in this Chamber have never looked at the root causes of these price rises—such as the commodity markets—but instead have just passed them off. I believe that speculation of a most outrageous kind has been responsible for some of the price increases of the past few years. This is not conjecture on my part.
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  In the United States people are in gaol because of speculation. Massive inquiries are afoot there because of the way speculation has run amok.
  Mr. William Clark: They do not have the same rules as we have in the commodity market.
  Mr. Carter: That is true, but on the periphery it is exactly the same and what has happened in the United States can happen here. It is true that the way in which the market traditionally operates does not leave room for that kind of thing, but in the free market, I am assured by people in a position to know, there is opportunity for people to speculate in a way that enables them to make unjustified profits and in doing so to force up prices to unreasonable levels.
  Mr. Dennis Skinner: I endorse my hon. Friend's arguments. He talks about people in the City informing him of their problems and dilemmas over the massive speculation taking place in the commodity market. A City editor rang me last week on the same subject. There was no doubt in his mind that the speculation was about 30 per cent. above what would be expected at this time.
  When my hon. Friend talks about the impact that speculation has on food and many other prices, he is beginning to hit the nail on the head. But there is another point. When speculation takes place and there is a cash outflow from this country, it is something the Government cannot control. They have some control in a monetary sense over the way in which paper money—
  Mr. Deputy Speaker (Mr. E. L. Mallalieu): Order. The hon. Gentleman's intervention is becoming a speech.
  Mr. Skinner: There is no control by the Government in respect of speculation in commodities. I agree with my hon. Friend that the subject is most important and one on which we must concentrate to a greater extent.
  Mr. Carter: My hon. Friend has, as usual, understated the case. He is right to say that there is an enormous amount of unjustified speculation.

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  I return briefly to my point that there is a clear need for an investigation. I do not make it in a narrow political sense. All Governments have an interest in ensuring, for the benefit of the economy and social well-being of the nation, that prices do not rise to unreasonable levels. Some of the activities in the commodity markets over the past three and a half to four years have in part been responsible for unjustified price increases. I have not much optimism, but I sincerely hope that the Government will give the question of an investigation serious consideration.
  10.33 p.m.
  Mr. R. A. McCrindle: I first declare my interest. I am associated with a commodity firm in the City.
  Predictably, the hon. Member for Birmingham, Northfield (Mr. Carter) has turned his attention to the effect on food prices of speculators' activities. He might also have mentioned the prices of metals, which are basic to British industry.
  Although the hon. Gentleman will find it hard to believe the effect of speculators' activities is to make markets less volatile than they otherwise would be. He has overlooked that with a strong speculative interest there is a broad and continuous market. There is always a speculator to buy from the producer when the user is out of the market and to sell to the user when the producer is out of the market. That produces stability in a market and controls rather than exacerbates what would otherwise be a wide fluctuation of prices. I remind the hon. Gentleman that futures markets were started by merchants, producers and consumers for the very reason that they protected them against wild and violent price movements.
  Certainly speculation has intensified over the past few years as stock markets have tended to turn sour, and the hon. Gentleman is right to say that large gains can be made. But he moved quickly over the fact that large losses can also be made. The critics have overlooked the fact that the law of demand and supply has a much greater effect on the movement of commodity prices than have the activities of speculators, upon which the hon. Gentleman has concentrated. It is a fact that the increased
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  standard of living in underdeveloped countries, as a result of which they now consume products they previously exported, has created shortages. Added to that, there have been famines in different parts of the world. That is at least as much the reason for the movement of which the hon. Gentleman complains as the activities of speculators.
  I will prove my point with facts and figures. The hon. Gentleman bandied around the facts and figures from his point of view. Palm oil, in which there is no futures market and, therefore, no speculation, has moved from £90 a ton in February to £230 a ton in September and back to £175. Aluminium, again with no speculative development, tells the same story.
  I question what the hon. Gentleman has put forward concerning the violent movement in prices which has affected consumers. He is not justified in putting the responsibility wholly at the door of the speculators.
  10.36 p.m.
  The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Peggy Fenner): I am glad of the opportunity this debate has provided to clear the air over the allegations that have been made both in the Press and in the House about the operation of the London commodity markets dealing in food. The hon. Member for Birmingham, Northfield (Mr. Carter) has in recent weeks made unsubstantiated remarks about speculation in these markets, and this evening he has gone into rather more detail. But he has fallen some way short of demonstrating that anything untoward has been happening.
  By raising the subject tonight the hon. Member has stimulated the expert opinion of my hon. Friend the Member for Billericay (Mr. McCrindle), who has just enlightened the House. The hon. Gentleman must take account of my hon. Friend's comment about palm oil if he is to substantiate his argument. My hon. Friend has done most of my job for me, but I shall draw attention to some of the main points as I see them.
  The commodity markets with which we are mainly concerned tonight are the futures markets for grains, cocoa and sugar although, as the House will appreciate, there are also markets in coffee

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  and vegetable oils and, of course, important markets for a number of raw materials other than foodstuffs. The procedures and mechanisms of the markets are respected the world over. They provide an invaluable centre for the buying and selling of some of our basic foods. They facilitate the flow of international trade and, in addition to the profits and commissions earned by the markets direct, they make a significant contribution to the balance of payments through the banking, insurance and shipping services which they bring into play, since these commercial and financial services associated with the trading on these markets tend to be provided in this country.
  Where commodities are bought forward, covering commitments some months into the future, there is, as the hon. Gentleman will realise, always the risk that prices may move against the buyer or seller in the period before the physical delivery is made. Some mechanism to limit these risks is, therefore, essential if the smooth operation of international trade is not to be hampered.
  For commodities, this useful function is provided through the medium of dealing in futures. By entering into a futures contract, a trader is effectively reducing the risks he faces from an adverse movement in market prices. But the benefits of this insurance can only be obtained if there is an active market—that is to say, a substantial number of traders willing to do business on this basis.
  That brings me to the element of speculation, to which the hon. Gentleman has referred at length. To my mind a degree of speculation is inherent in the effective work of these markets. The speculator may not be interested in reducing any risk in his physical trading in the commodity. He is backing his own judgment of the way the market will move. If there were not sufficient people willing to back their judgment in this way, the futures market could very well be too thin to function properly.
  The essential rôle of the speculator—and his value to the market—lies in the way he maintains the flow of business by being willing to take the risks that the other traders are concerned to avoid.
  Mr. Skinner Mr. Skinner rose—
  Mrs. Fenner: Speculation, therefore, in this sense is very far from being a dirty word, although it is too readily thought of in that way by Labour Members. It should be recognised for what it is—namely, a vital part of the market mechanism.
  That is not to say, of course, that unbridled or uninformed speculation works to the advantage of the markets or of trading in the commodity as a whole. Clearly this is not so. But the rules and procedures of the markets themselves are designed to impose a necessary check on the speculative element. These rules, which command international respect, provide, for example, for the payment of deposits on each transaction and involve the liability to pay additional margins to maintain the relative value of the deposit when prices move against the trader. There is also provision for further safeguards, such as breaks in trading, but these have not so far been found necessary in the food markets. The hon. Gentleman referred to cocoa. In fact, such deposits for cocoa were doubled earlier this year.
  The hon. Gentleman has suggested that the Government should inquire into the operation of these markets. I have two comments on this. First, I have heard no convincing evidence that the market associations' own procedures are ineffective. Secondly, the Bank of England itself maintains an overall watch on the operation of commodity markets. Both these mechanisms enable speculation to be kept within reasonable bounds.
  Quite apart from that, however, speculation by its very nature involves the risk of losses as well as the possibility of profits. Indeed, knowledgeable people involved in these markets often tend to take the view that speculators inevitably make a loss in the end. Moreover, it must not be forgotten that, to realise a gain, a speculator must sell the commodities he has bought forward. It is not possible, therefore, for him to hold up market prices against the trend dictated by the balance of supply and demand.
  Mr. Skinner: Will the hon. Lady give way?
  Mrs. Fenner: No. I was left with very little time.

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  It has been alleged that speculation has nevertheless operated to the detriment of consumers' interests by exaggerating the reaction to news affecting the market. It is argued that it has pushed prices to a higher level than the supply and demand factors themselves would justify. If this were true, it would follow that similar exaggerated reactions to news of bumper crops, or a cutback in demand, would lead to a greater slump in prices than the market would think reasonable. These things work both ways.
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  The truth is, however, that the futures market is only one factor affecting commodity prices. Futures may follow the general pattern of commodity prices—
  The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at seventeen minutes to Eleven o'clock.