EUROPEAN COMMUNITY (MEMBERSHIP)

HC Deb 07 April 1975 vol 889 cc821-961

3.32 p.m.

The Prime Minister (Mr. Harold Wilson)>

I beg to move, That this House approves the recommendation of Her Majesty's Government to continue Britain's Membership of the Community as set out in the White Paper on the Membership of the European Community (Command No. 5999). In this debate the House is called upon to assess the outcome of the renegotiations of the terms of British entry into the European Community and the wider issues involved in the decision whether to remain in the Community or to leave it. After the debate ends on Wednesday the issue rests with the country in a free vote through the ballot box.

Of course, for many hon. Members, as for millions outside the House, the issue is not limited to an assessment of the outcome of the renegotiations. Many here, and still more outside, have already made up their minds on what are to them still more fundamental issues. Many made up their minds years ago, when the EEC first became an issue in the House, in the abortive 1961–63 negotiations. Some had firmly fixed apparently irrevocable views as far back as the Messina Conference and the negotiation of the Treaty of Rome in the 1950s. There are hon. Members and others who regret that Britain was not involved at the time of Messina.

There will be a substantial body of opinion here and outside who believe on almost doctrinal grounds that Britain should be in the Community for the greater economic good of Britain in a changing world and for the assertion of a greater economic and, indeed, political power for Europe in a deeply divided world. For some the political arguments transcend even the most important economic considerations of industry, trade and unemployment.

Equally there is a substantial body of opinion which is fundamentally opposed to British membership and which holds that no possible renegotiations could have changed the nature of the Community sufficiently to enable it to support British participation. And for it, too, the issues are both economic and political, not least in those areas of our national life where it feels that power affecting industry and employment has passed to and will remain with a multinational organisation whose very decisions seem to it fatally to abrogate the control of this House on our own destinies and to subvert the independence of the British legal and judicial system.

Mr. Roy Hughes (Newport) rose—

The Prime Minister

Perhaps a little later my hon. Friend may have a point to make. At the moment I am expressing —I hope I am doing so fairly—the views that are held strongly by two groups of opinion. All the arguments that I have mentioned will be heard in this debate and in the wider debate in the country, for in taking up this position hon. Members reflect a widespread feeling throughout Britain, a feeling which cuts across parties and across existing industrial, social, political and even religious loyalties.

There is also a large body of opinion which is less doctrinally committed and which will assess the case for or against remaining in the Market by the result of the renegotiations, summarised in the House in my statement of 18th March and issued as a White Paper, Command 5999, and in the full White Paper, the Report on Renegotiation, Command 6003, which sets out in detail the outcome of the renegotiations and the broader issues which caused the Government to reach the decision which I announced three weeks ago.

This less committed group will seek to assess how far the renegotiations have fulfilled the objectives set out in the manifesto put before the electorate in the election of February 1974, and again submitted to the people in the October election—how far in those areas where, as I made clear on 18th March, we have not secured the objectives we there set out—I am being perfectly fair about this —for example in the fundamental alterations we called for in CAP—but how far also the changes that have been secured are adequate to meet the purpose of the manifesto objectives.

Even for this relatively uncommitted group there are other considerations which must be taken into account. First, how far has the Market itself changed? How far has it changed partly as a result of the renegotiations? Some changes in the working, though not in the statutory form, of the Community were already occurring before my right hon. Friend opened the renegotiations last April. Changes there undoubtedly would have been had there been no negotiations.

Had Britain never entered the Community, or had Britain been able to accept the terms negotiated in 1971, I believe that other members would still by this time have been calling, as, for example, the Federal German Chancellor has so forcefully called, for a fundamental stocktaking of the working of the CAP in the light of recent experience—for example, the ludicrous piling up of beef and butter mountains and the national budget burdens involved in paying for the cost of agriculture in the Community. That, I think, would have happened. But certainly in this case, as in other areas of the Community's activities, change has been significantly furthered by the fact of renegotiation.

My right hon. Friend and I can claim that the renegotiation process has been not only a catalyst of change—and basically change in the right direction—but also an initiator, a creator of a process of fundamental change. The past year's negotiations have involved, and not only for us in these islands, an occasion for fundamental reassessment of Britain's position in relation to the Community. They have started a scarcely less fundamental process of re-examination by other member Governments, particularly the six founding members, of their own individual national position in relation to the Community and in relation to the present posture and future direction of development of the Community itself.

I do not think it could be said that that was true of the negotiations of 196163 which were ended by President de Gaulle's veto, nor, though important new areas of discussion were opened up by us, in the attempts to start entry negotiations between 1967 and 1970, such as the right to import Commonwealth agriculture produce, nor can it be said with any truth that these were successfully pressed in the 1970–72 negotiations. Basically, the Community, on the day of British entry on January 1973, was hardly different from what it had been as a Community three years earlier apart from the consequential changes of widening the membership—for example, the appointment of new national Commissioners and such measures as the negotiation of the treaty with those EFTA countries which remained outside.

Many hon. Members, and the wider electorate, will ask themselves whether we should judge the issue on the form and statutory basis of the Community, as set out in the founding treaties, together with all the machinery and the supranational entrenched powers of the Commission, which they can fairly argue have not been changed by the renegotiations. For this reason, in the Foreign Secretary's statement to the Community last April, published as a White Paper, it was made clear that we were not seeking changes in the founding treaties or the Treaty of Accession. That decision was explained to the House and to the country well before the last election—an election in which our renegotiation programme was endorsed. We did, however, reserve the right to propose treaty changes if that became necessary, and we have given notice of the need in certain circumstances to do so on certain issues of importance to us.

That is one approach—namely, to set the undoubted treaty-created powers and constitution as the main criterion for judging the Community and Britain's relations with it. The other approach is to judge the Community as an organic practical working institution where month by month decisions are taken by national representatives in the Council of Ministers and in the now regular Heads of Government summit meetings to give weight to the reality of a procedure where national interests are more powerfully asserted and the spirit of give and take governs the discussions and inspires clear decisions and directives.

In recent months—three weeks ago in the House I referred to the importance of President Giscard d'Estaing's institution of regular routine summits—we have seen this process increasingly at work, not only on renegotiation issues but also in the continuing—or what it is now fashionable to call, I am sorry to say, the "ongoing"—work of the Community at its different levels. This is an extremely important consideration in forming a proper judgment.

Before I come to the outcome of the negotiations, there is one general point which I must make. The world in which we live has been transformed in the past two years—by the energy crisis, by the oil surcharge on our costs and prices structure and by the resulting imbalance in world monetary flows and stocks. Committed pro-Marketeers, committed anti-Marketeers, but no less the large body of uncommitted middle opinion, will all be relating their Market assessment now to this central fact of the world in which we live—the grave national economic situation, and the equally grave storms which have hit the world economy.

Whatever our approach, the House and country will be ready to acknowledge that the words of the manifesto—and those exact words were first approved by the Labour Party conference in 1972 —are relevant—indeed prophetically relevant—to the world economic situation. In an important reference to the EMU, the proposed Economic and Monetary Union to which I shall refer later, we said as long ago as 1972, The monetary problems of the European countries can be resolved only in a world-wide framework. That is precisely what we are seeking to do.

The House has had reports from my right hon. Friends the Chancellor of the Exchequer, the Foreign and Commonwealth Secretary and the Secretary of State for Energy on their missions abroad —in the European context certainly, but mainly in a world-wide setting, with the IMF facility having been renewed on the initiative of the Chancellor of the Exchequer, and now with the OECD financial support fund—the so-called Kissinger trust fund—due to be formally established on Wednesday, when the signing takes place.

On energy matters, we have had discussions within the Nine but all have agreed as our world trading partners have agreed—that these problems, oil particularly, must similarly be approached on a wide international scale. This also relates to commodities, where the Lomé Convention was part of a remarkable achievement. We have created a commodity earnings stabilisation scheme, mainly for developing countries. We shall build further on that action when the Commonwealth Heads of Government meeting takes place in Jamaica later this month. We shall discuss our initiative —the Government's initiative—which we have already discussed with the United States, Canada and the Community. Our proposals were set out in my Leeds speech, on which I have answered Questions in this House.

Against that background—a European, a national and a world background—I come briefly to the achievements of the renegotiations. I say "briefly" because I made a fairly full statement to the House last month, and because the White Paper, Command 6003, sets out the outcome in very great detail.

On the first objective set out in the manifesto—major changes in the common agricultural policy so that it ceases to be a threat to world trade in food products, and so that low-cost producers outside Europe can continue to have access to the British food market—I have already reminded the House of the statement made by my right hon. Friend the Minister of Agriculture giving precision to these changes in his statement to the Council of Ministers on 18th June last year, on which he reported to the House the following day.

That statement set out six points against which in this debate hon. Members will be able to assess the degree of success which he achieved. These points included firm criteria on pricing policy; a greater flexibility for dealing with special situations in different countries; measures to discourage surpluses and to give priority to Community consumers in the dispersal of any surpluses arising; improvements in market projections, for example with a view to avoiding surpluses; better financial control, and better access to important foodstuffs from outside the Community, with particular regard to the interests of Commonwealth producers and of the consumer.

These were the objectives which we set ourselves. I do not need to go over the outcome of all these issues as they were set out inHansardin columns 1457–59 in my statement on 18th March. We have not got all we wanted—

Mr. Michael English (Nottingham. West) rose—

The Prime Minister

I am making my hon. Friend's point for him. We have not changed the fundamental character of the CAP but, as I have said, following the initiative by the German Federal Chancellor, which, we strongly supported, a root and branch stocktaking of the CAP is now taking place.

More than that, we have secured far-reaching changes, not in the doctrine or theology of the CAP, but in its practical operation to meet the requirements of our own agriculture and of Commonwealth food exports. We have secured a new beef régime; a more realistic pricing policy; action to deter the build up of surpluses; action already taken to ensure that where surpluses have developed the food should be sold as far as possible to our own peoples, at below cost prices, rather than exported to Russia or third countries; the Commonwealth sugar deal; the Lomé Convention opening up privileged Market access to 46 countries, 22 of them Commonwealth countries; the commodity earnings stabilisation scheme I have just mentioned, to help developing countries, and the agreement on New Zealand butter, together with the reopening of the New Zealand cheese import option. These are, in my view, significant achievements which make a reality of the manifesto objective.

On the objective relating to the Community budget, again we have not secured a fundamental change in the "own resources" system of the Community— [HON. MEMBERS: "What about the money?"] I shall be coming to the money. The corrective mechanism proposals which I reported to the House are up to £125 million. Those proposals are set out in greater detail in the Command Paper and, in the Government's view they meet, though by another route, the objective set out in our manifesto.

I come to the third objective.

Mr. Teddy Taylor (Glasgow, Cathcart)

The Prime Minister has referred repeatedly to the £125 million rebate. Could he give any idea of estimates which he or the Government have made of the contribution which Britain would have to make to trigger off a rebate of that amount?

The Prime Minister

It is on the basis of the 1971 agreement—an agreement which I appreciate the hon. Gentleman at that time did not support. On that basis there are certain payments to make in respect of the 1 per cent. VAT contribution in regard to duties and levies. That is offset to the tune of £125 million —[Interruption.] I spelt it all out inHansardin my statement. It is too complicated to bring into my remarks at this stage. That is the basis on which the figure is calculated, and I am sure hon. Members will find time to study the statement.

On the third objective—the rejection of any kind of international agreement compelling us in regard to EMU to accept increased unemployment for the sake of maintaining a fixed parity and our commitment that monetary problems should be resolved in a world-wide framework—I believe that in practical terms we have secured the objective we had in mind.

Economic and monetary union—EMU —is not a feasible proposition for as many years ahead as we can see. I have quotedThe Economistwhich said that while it is not as extinct as the dodo, it is now an endangered species. What we feared, when we expressed those anxieties in the manifesto about Britain being required to maintain a fixed exchange parity which would threaten increased unemployment, is not on.

To proceed to another manifesto objective, serious debate will undoubtedly take place in this debate and throughout the campaign on that area of renegotiation which related to control over regional policies, and industrial policies, particularly those concerning steel. Everyone can form his own judgment on this. Many people on both sides formed their judgment on this matter long before the terms were known. But we have secured a fundamental renegotiation on our right, and that of other countries to pursue the regional policies best suited to national requirements.

Quite apart from the Common Market regional fund, which will be of benefit to Britain, particularly Scotland and Wales, we have secured arrangements which will enable us to go on operating our own system of national aids as seems best to us. We have also secured arrangements which will enable us to take quick emergency action when employment is threatened. Our criteria, which have been accepted by the Commission, lay down that action designed to deal with migration from an area enjoys as high a priority as action to prevent a sudden increase in unemployment. Our assertion has been accepted—it is our view, and it has been accepted—that in these matters national Governments are the best judges of what is right for their own countries.

There is a problem about steel, which has been highlighted in the case of the Newport mini-mill. The fact is that there are no powers to control private investment in the steel industry. If, as part of economic management and control over national resources, the Government—any Government in this country—are to hold back the level of new investment in the public steel sector, it is of course unacceptable that the private sector should be free to expand where it wants and by as much as it wants. [HON. MEMBERS: "Why?"] I will tell hon. Members why. If we hold back the public steel sector through lack of resources, this will not only add to the inflationary pressure on resources but be provocative in the local and regional setting at a time when production plants have been closed because of technological change.

Mr. Roy Hughes

The Prime Minister referred to Newport. In view of the conflicting opinions on this vital issue of Common Market membership, which he illustrated in the early part if his speech, will the Prime Minister tell the House whether the dissenting Cabinet Ministers will be allowed to participate in this debate?

The Prime Minister

I gave way to my hon. Friend the Member for Newport (Mr. Hughes) because when I referred to his constituency I thought that he would be concerned about his constituents.

The fact is that there are no powers to control private investment in the steel industry. Powers of control existed under Section 15 of the Steel Act. Unfortunately, that section was repealed after the 1971 negotiations by the previous Government. There is, therefore, no control, even, for example, in the case of the Newport mill which, when the issue blew up a few weeks ago, did not involve a British firm or even a firm owned by nationals of Community countries. We had no power to control it because of the repeal of the Section 15.

Nor has the Community any power in this matter. This is a vacuum. Clearly, powers are needed. I referred to this matter earlier. It was in this context that my right hon. Friend at the March Council of Ministers meeting gave contingent notice of a proposal for treaty revision.

This is a problem facing a number of Community countries. They have been able to deal with this and associated questions by administrative means, without having to ask for an amendment to the treaty. I told the other Heads of Government in Dublin that we would carefully study the various methods used in other member countries. I said that by informal controls, planning controls, IDC controls, or other means, including such measures as they are using, we intended to have the powers that are needed in this matter. Failing this, it would be a question of treaty revision.

But I repeat that there is nothing in the founding treaties, or in practices or policies under the treaties, which precludes us, or could preclude us, from extending nationalisation of the present private sector in the steel industry—or, indeed, would prevent us from taking the whole of the residual private sector into public ownership if the Government and the House thought that that was right.

There is a proper anxiety, reflected in the manifesto, and underlying our approach in the renegotiations, about what is regarded as the danger of Community interference in matters of economic management. I have referred to the outcome of the renegotiations on regional policy, industrial policy, steel, and the inherent right, under the treaty, of this or any other member country to extend the borders of public ownership in industry. My right hon. Friend's negotiations have clarified and improved the position as to the rights and freedom to which we can lay claim in our national actions under the authority of Parliament.

But of course on these issues—industrial, regional, steel and the rest—there is not, as I have sometimes seen suggested, a soft and easy option outside the Community. Our friends, our former EFTA partners who have remained outside the Community but in association with it, have found that the EFTA-EEC agreements have required their assent, as a condition of those EFTA-EEC agreements, to precisely similar requirements, as a condition of trade agreements, as are in force within the Community itself, namely, and principally, measures to prevent the frustration of international competition by regional subsidies or other means. And of course it is self-evident that while Britain, within the Community, has the ability to negotiate changes in these requirements—and we have negotiated derogations from them so far as we are concerned—the EFTA countries have no part, nolocus,in such negotiations.

Indeed, it is right to remind the House that in the 1960s, as I remember, and as the House will remember, our own EFTA membership then was attended by rigid limitations on our industrial and commercial system wherever our partners felt that our own national policies frustrated competition within EFTA, for example by subsidies, open or disguised, as they would have put it. The House will not, I think, forget the problems we faced and, indeed, the almost fatal rift which developed in EFFTA over the Labour Government's decision to establish the three aluminium smelters in England, Wales and Scotland, on the basis of what other EFTA countries regarded as subsidisation through investment grants. We were tied then, and tied very rigidly indeed. Nor for that matter will the House forget—I certainly shall not—the strong reaction from EFTA when we imposed import surcharges in 1964 and import deposits in 1968, policies which I know some of my hon. Friends are calling on us to use today.

The financial objectives in the manifesto went on to call for No harmonisation of Value Added Tax which would require us to tax necessities. Even the proposals which are now being discussed in the Community about a uniform assessment base for VAT provide for our system of zero rating. Should there be any proposals whatsoever which are unacceptable to us, we shall be able to resist them. Contrary to the situation three years ago, when the manifesto objectives were first drafted, in 1972, the VAT harmonisation threat which we then feared is no longer a real one. Indeed, so far from harmonising, a number of countries are insisting on increasing the number and diversification of VAT rates in their own domestic tax structures. So I tell the House that there is no danger here to our freedom at all.

Mr. Ronald Bell (Beaconsfield)

Can the Prime Minister assure the House that his right hon. Friend the Chancellor of the Exchequer will not harmonise on VAT in his Budget?

The Prime Minister

I cannot anticipate my right hon. Friend's Budget Statement, but I have said that we do not regard as serious the pressure for harmonisation and if there is anything unacceptable to us in the forthcoming or any other Community Budget, none of which I should care to make any forecast about, we shall have the power to resist and to stand up for what we feel is right.

I conclude my report of a year of renegotiations with this assessment: in the Government's view, we have substantially achieved the objectives set out first in 1972 and endorsed by the Labour Party in successive years since then up to and including the publication of the 1974 manifestos.

Secondly, the nature of the Community has changed, is changing and will change further. It is changing in a way which has greatly reduced at any rate my own anxieties about the power of supranational institutions established by the treaty and not responsible to political control by Ministers representing national interests. More and more the Council of Ministers and the Heads of Government conferences are dealing specifically with problems on the basis of the highest common interest, and my experience, and what I have seen, as has my right hon. Friend, has been a total readiness of the Commission to come into line with political realities as expressed at the Council of Ministers and Heads of Government conferences.

I know there is a feeling, which is very widely shared, that the Commission is over-large, over-bureaucratic, over-staffed and over-expensive. This is not just the view of the opponents of the European Common Market idea, in this or other countries. It is a view which has become articulate at the highest level in ministerial and particularly Heads of Government discussions. A number of us have made these charges. Changes may follow the CAP stocktaking. I hope they will. One suggestion which I feel should be seriously considered—and indeed this has been raised—is that those four larger countries which are entitled to nominate two commissioners, against one commissioner nominated by each of the others, should each be content with a single commissioner and not have two. While paying tribute to the dedication of commissioners appointed by the member countries, there is a widespread feeling in the Community that there are too many commissioners for the work that has to be done and that this naturally leads to a certain degree of proliferation, duplication and the creation of work for its own sake. In the words of Abraham Lincoln, "Too many horses, not enough oats".

Another conclusion, to which I briefly referred on 18th March, relates to the Commonwealth. I said then that in the whole period that I have been in this House my loyalties have always been much more to the Commonwealth concept than to any European concept. For that reason, I and others who share these loyalties must take account of the fact that now practically the whole Commonwealth—and I have not heard of any dissentients—wants Britain to stay in, in their own national interest.

We cannot ignore that the Commonwealth is now largely self-governing. There will be 34 Heads of Government of independent sovereign countries meeting in Jamaica later this month. So it is a largly self-governing Commonwealth which wants us in. We may regret—I certainly did—that the terms agreed in 1971 virtually constituted an instruction to the Commonwealth to go to seek other markets, and this they have done. They were entitled to do so and they were wise to do so in the circumstances. In many cases, during this period—perhaps this was not widely foreseen by any of us—they have been seeking markets for commodities which suddenly last summer became in extremely short supply and we in Britain, the British consumers, have paid the price for that.

But it is not only their trade relations which have been changed and diversified. Some of our oldest and closest Commonwealth partners—Australia and New Zealand in particular—are now following a course of political reorientation directed much more than in the past to the countries and regions closer to them. In addition, Canada and other Commonwealth countries are seeking closer, indeed formal, relationships with the Community.

In world political terms, I would no more support a little Europe policy than I would support a little England policy. To those of my hon. Friends who fear that in the conditions of 1975 and beyond, membership of the Community means economic autarky and an inward-looking political stance for Europe, who are anxious lest our ties with America or the rest of Europe or the Commonwealth will be weakened, I have this to say: I can claim that our relations with the wider world are better and more constructive today than for some years past. United States leaders have said that our mutual relations are as high as at any time in living memory. The Soviet leadership proclaimed the degree of understanding between us as a result of our February meetings as historic.

I believe that the Commonwealth Conference will show that in the rapidly changing world of the 1970s our relations will be closer than for some years past, not least because of my right hon. Friend's dialogue with African countries at the turn of the year, because of his approach to the Rhodesian problem, and because of our attitude to developments in Chile and in Portugal.

But there is another thought that I want to put before the House.

Mr. Neil Marten (Banbury)

Before the Prime Minister concludes his peroration and leaves the question of the Commonwealth, perhaps he will allow me to raise one matter with him. He said that the Commonwealth Governments do not want us to leave the Community. Does he mean Governments, or does he mean individuals such as Mr. Whitlam who gave his personal view and not the view of that Commonwealth Government? Can the Prime Minister clear that up?

The Prime Minister

I mean Governments. I have had representations from members of Governments on behalf of their Governments—not just by Ministers but by Ministers responsible for specialised subjects, Foreign Ministers, and so on. I give the hon. Gentleman the undertaking that if in Jamaica we find that Heads of Governments are not speaking for their Governments I shall make that clear to him.

I am sorry to disappoint the hon. Gentleman, but I was not on my peroration. I just wanted to say that before I embarked upon it.

Mr. Hamish Watt (Banff)

Can the right hon. Gentleman say why he neglected to renegotiate the common fisheries policy when he was in Dublin? Will he tell the people of Scotland whether he is prepared to allow EEC people to keep on coming in with their boats and scooping up all the fish in our waters?

Hon. Members

Norway?

The Prime Minister

The hon. Gentleman, who has shown that his knowledge of geography is a little deficient, in that he thinks that the Shetlands are nearer to Aberdeen than to Norway, will be aware that the basis of his question is quite false. The issue that worries him and us—

Mr. Watt

What about Belgian boats?

The Prime Minister

One cannot be selective. The hon. Gentleman should go out and look at the boats to see where they come from. I am sure he knows that the issue is a question not of the Market, or anything else, but of the Law of the Sea conference. The problem to which he referred covers a considerable number of countries, some of which are in the EEC and some of which are not. Norway has been mentioned. I am sure the hon. Gentleman will be delighted at the great success of my hon. Friend the Under-Secretary of State for Scotland last week. He will be reporting to the House on these matters tomorrow, and no doubt the hon. Gentleman will wish to pursue my hon. Friend more fully on that occasion, but before that I hope he will study an atlas and get a list of EEC members to fit him for it.

The debate this week and the referendum in a few weeks' time revolve around a single issue—whether Britain should remain a member of the Community, or pull out. That is the issue we are debating. Quite apart from what has been achieved in the negotiations, which I have briefly summarised, quite apart from what those of us who have been dealing with the Community at close quarters have felt to be a real change in its nature and operations, the magnitude of the change in world economic conditions since 1971, inevitably unforeseen by most if not all of us, underlines the difference—and there is a difference—between a decision not to enter an organisation when one still has one's traditional ties and contacts, which is what we argued about in 1971, and a decision some years afterwards—whatever some of us thought about the original decision—to pull out. Those are two different decisions.

Like it or not, praise or criticise the 1971 terms—I have never pulled any punches about them—there have been two, three or four years in which history has not stood still. Like the history or not, this is the fact, and I should have had to be a great deal more dissatisfied with the terms which we have secured to be able to ignore that fact of history. Clearly none of us can approach these questions without a full awareness of what the decision will mean for Britain's own economic future. Spokesmen on both sides here may be in danger of making exaggerated claims. There will be those who will record Britain as economically finished if we are not in. There will be those who will predict an equal disaster if we are in.

What I hope is that all campaigners, in what I am sure will be a good-tempered campaign, can avoid exaggerated claims. I hope that during the great national debate no one will be so carried away as to forget for one moment that, in or out of the Community, Britain survives and prospers in direct correlation to our own efforts here in this country, to our domestic policies—good or bad—to the degree of restraint all sections of the community show, particularly in relation to incomes, earned or unearned, which are sought and won, when they are not yet paid for by the gold backing of effort and economic performance. Britain will survive and prosper, too, by a greater degree of industrial harmony and reconciliation and co-operation, by a willingness to accept not only sacrifices in material terms but, what is infinitely harder, the sacrifice of past practices, policies, prejudices and partial affections.

Our problems, in common with those of other countries, developing or advanced, have been vastly aggravated by the world oil crisis. In recent months—I know the Opposition will be delighted at this—our non-oil deficit has been reduced to a fraction of what it was a year or more ago. We need all our resources of national effort and determination to maintain that trend until we are in balance. But we have said, many times, that for the past few months and for the months ahead, the short-term challenge of inflation means dealing with incomes, recognising, as we must, that our long-term vulnerability to this whole problems stems from the failure, under successive Governments, of both parties, to secure industrial investment on a scale anything like adequate to maintain and improve our competitive position in world markets.

To be in the Market does not of itself solve any of these problems. Nor would a policy of withdrawing from the Market. Indeed, in my view, some would be harder to solve outside. Basically, the fault—and therefore the solution—lies not in or outside Europe; what we face is a challenge to Britain, to the British people. Anyone who, in the excitement of the debate here in Parliament or outside, seeks to persuade our fellow countrymen that there is inside or outside the Community, any other way, apart from our own efforts and restraint, is debasing the argument and misleading those whose elected representatives and servants we are.

So my judgment, on an assessment of all that has been achieved and all that has changed, is that to remain in the Community is best for Britain, for Europe, for the Commonwealth, for the Third World and the wider world. All of us, whatever our approach, recognise that this debate and the decision to be taken in June is of a unique and historic character. But during this period, whatever may divide us on Europe, we shall all of us in the House be false to all we believe in if for one moment we fail to proclaim that our survival, our standard of living, the future of our children, the future of our country and its influence in the world all depend in the last resort, on how we respond as a nation to a challenge which is part external, part internal—the challenge to the resolve and resource of the people of Britain.

4.16 p.m.

Mr. William Whitelaw (Penrith and the Border)

I am sure that we would all wish to agree with the Prime Minister on two points that he made towards the end of his speech. The first was that this debate should be conducted sensibly and fairly and not with bogus and unfair points or with malice on any side. That is surely what we all owe this country, and I should have thought that it was something that all of us would agree to be important. The second point that the right hon. Gentleman made is that our future is bound to depend upon our own efforts. I hope that he will accept that many of us feel that to withdraw from Europe at this stage would be a self-inflicted wound which would make the attainment of the objectives which he has set out much more difficult and in many cases very hard indeed. That having been said, of course in the end we depend upon our own efforts.

The Prime Minister has decided today to make a detailed and somewhat low-key opening to this debate. He would be the first to agree that one has to take his speech today in conjunction with the White Paper and, as he fairly said, with his full statement on 18th March. It is clear, if one takes all these things together, that, as one, they present a powerful case for Britain staying in Europe. They also make clear in the starkest terms the grave disadvantages to the United Kingdom, to Western Europe and to the world of our withdrawal from the EEC at this time.

Mr. Dennis Skinner (Bolsover)

He is exaggerating already.

Mr. Whitelaw

No doubt the hon. Member, if he keeps reasonably quiet during other people's speeches, will have an opportunity later to make his own. But he might at least allow others to make their speeches until he makes his own.

Mr. Skinner

The only reason I felt it necessary to intervene from a sedentary position was that at the beginning of his speech the right hon. Gentleman went to great lengths to explain how we should stick to detail, facts and evidence in this debate and not exaggerate; yet within seconds of his issuing that edict he exaggerated the effects of Britain withdrawing from the Market, speaking of creating a "self-inflicted wound". How does he reconcile those two points of view?

Mr. Whitelaw

Because I do not happen to consider that I am exaggerating in what I am saying.

Mr. Skinner

That is a matter of opinion.

Mr. Whitelaw

Of course it is: the hon. Gentleman has stated his opinion and I have stated mine.

At the same time as one gets that clear indication from the White Paper and all the documents concerned, it is ironic that the very strength of the positive arguments provide a powerful justification for my right hon. Friend the Member for Sidcup (Mr. Heath) and the Conservative Government in negotiating Britain's entry in the first place. It also clearly endorses the decision of this House on 28th March 1971, when by a majority of 112 it approved in principle our entry into the EEC on the basis of the arrangements negotiated.

The Prime Minister

On 28th October.

Mr. Whitelaw

On 28th October 1971.

The more one listens to the right hon. Gentleman now or reads in paragraph 142 of the White Paper the extract from his statement in 1967, the more one is bound to question the whole manoeuvre of renegotiation and referendum.

If I may say so to the right hon. Gentleman, I thought that in referring to renegotiation as a catalyst of change he was, to use a golfing phrase which I am sure he will understand, pressing a bit—and I do not advise that. In doing so, I certainly would not want to underrate the achievements of the right hon. Gentleman the Foreign Secretary or indeed, in his field, the Minister of Agriculture. In fact, they have clearly negotiated skilfully, and, through the assistance and cooperation of our partners in the Community—as no doubt they would recognise—they have gained significant improvements in the Community arrangements from the United Kingdom's point of view. But they were able to do so only because Britain had entered the Community and was a member State.

Then, constantly throughout the White Paper we read of the Community's flexibility, as if this was some new discovery or a complete change of outlook on the part of the member countries. But again, this should have come as no surprise to the Prime Minister and his colleagues, because this attitude was constantly stressed by my right hon. Friend the Member for Sidcup and my right hon. and learned Friend the Member for Hexham (Mr. Rippon) at the time of our entry negotiations. They pointed out then that as a member State Britain would be able to exert her influence successfully in an atmosphere of real partnership. That, surely, is exactly what has been happening.

Perhaps now some of those who contested this view and argued against our membership because of the bureaucratic nature of the Community and its inward looking and restrictive mentality will recognise that my right hon. Friends were right then and that they were wrong.

Therefore, it is clear to me, as we on this side of the House have constantly stressed, that the undoubted improvements in Community arrangements from the United Kingdom's point of view could have been obtained in the course of the Community's normal development and without the whole business of renegotiation under threat of withdrawal. It may be argued that it would have been, or could have been, achieved more quickly by this means than otherwise. But is that possible gain worth all the damage and risks of our present position? When one looks at the other side of the balance sheet, one finds that it really cannot be. Let there be no doubt that the Prime Minister's whole manoeuvre has already damaged our country's reputation in Europe and for the future involves grave dangers for our nation.

The process of renegotiation and, still more, the reasons for it have inevitably cast doubts on Britain's political stability and reliability as a partner. This, in terms of our good name, could be a heavy cost. At best, we have exhausted some of the good will which will be necessary in future discussions, provided we stay in Europe. But that, in itself, is put into doubt with all the damaging uncertainty which follows, by the other part of the manoeuvre—the referendum.

Mr. Robin Corbett (Hemel Hempstead)

Would the right hon. Gentleman care to make clear to the House whether he is congratulating Her Majesty's Government on the achievement of the renegotiation or whether he is saying it was needless? He has been telling the House how flexible is the European Community, and it seems to me that he is having an each-way bet on the same horse.

Mr. Whitelaw

I do not think so. In the first instance, I said that through the renegotiations significant improvements had been gained in the Community's arrangements as far as Britain was concerned. I followed that by saying that I believed, as we on this side of the House have constantly stressed, that such improvement could have been gained in the normal development of the Community with Britain exerting her influence as a member State. I do not see that that is backing a horse both ways.— [Interruption] That was what the hon. Gentleman put to me. I do not mind backing a horse both ways provided it wins. The question is whether the horse that the Prime Minister is backing will win.

That brings me, very appropriately, to the next part of my speech, which concerns the referendum. As the Second Reading of the Referendum Bill is to be debated on Thursday, I shall only say that this innovation could easily cause lasting damage and difficulty in the future relationship of Parliament and people. However much talk there may be of this unique situation, I fear that the precedent will remain dangerous. Many of us in many different ways have had some experience of special cases and unique situations. Alas, they all have one thing in common: they do not remain special or unique for very long.

In this particular instance, the real risk lies in what would happen if the result were to go against the recommendation of the Prime Minister and his Government. In the White Paper they make it all too clear that they fear considerable damage to our country and its people in the event of a vote for withdrawal. Indeed, the arguments are stated so emphatically that few people would be able to understand how a Prime Minister holding such views could accept the disadvantages then imposed upon him and con- tinue as if nothing had happened. If he did, he would surely be forced to pursue policies which he knew to be second best. I should have thought that such a position was too degrading and humiliating to be tolerable.

But, of course, the right hon. Gentleman has gambled and trusts that that situation will not arise because the country will vote in favour of staying in Europe. As one who is proud to have been a member of the Cabinet which took Britain into Europe, I fervently hope that they will. As a result, one finds oneself doing everything in one's power to ensure that the Prime Minister's gamble comes off, even though one regards it as extremely reckless in the national interest and totally unjustifiable.

I would find this position irritating, if not to say intolerable, if it were not for one overriding consideration, which I recommend to my right hon. and hon. Friends and, indeed, others in the country who may feel like me. The long-term interests of our country must have precedence over any short-term party-political or personal feelings. I have no doubt in my mind that, judging on that basis, I must exert any influence I may have to the maximum in favour of Britain staying in Europe. I admit that I am one of those who have been committed to the importance of Britain taking her place in Europe from the time of the first negotiations. But I equally recognise that today, as the Prime Minister himself said, the argument in favour is rather different, and it is, to my mind, even more compelling.

Then, and indeed for the following 10 years, the question was: should we seek to join? Now we have to answer whether having joined, we should withdraw, even after arrangements within the Community have been improved to help us in the United Kingdom. I know that there are large numbers of people who doubted the wisdom of our entry, or even opposed it, but now are equally convinced that it would be a grave mistake to withdraw. So I think it is only sensible in this debate to give the reasons for one's own conviction, particularly in relation to the present situation. By doing so I hope to indicate how my commitment has become stronger as many of the original anxieties and fears expressed to me have been resolved by experience of the Community over the years.

Personally, I am influenced rather more on balance by the political than the economic arguments. Equally, like all my right hon. and hon. Friends, I naturally look at the immediate economic considerations, with which I shall deal first from the standpoint of my own particular constituency and my part of the country.

Mr. Robert Adley (Christchurch and Lymington)

Before we finally get away from the whole question of the referendum and its aftermath, may I ask my right hon. Friend whether he agrees that the fact that the Prime Minister may seek to bind himself to the result of the referendum does not mean that he or the Government can effectively bind Members of Parliament in what they do regardless of the result of the referendum?

Mr. Whitelaw

That is absolutely the correct position, and I think it has been consistently confirmed to be such.

Therefore, I look at this question as one who represents a large agricultural area in a difficult employment region in the north of England. I am concerned particularly about the provision of jobs, regional policy, and the farming industry, with its impact on food prices.

On agriculture, there was anxiety originally on the part of producers, perhaps particularly amongst farmers in the hills and marginal areas. They feared a loss of security and of the special assistance to the less favoured areas. In the event, farmers on the whole now advocate Britain's staying in Europe. This view was overwhelmingly endorsed by the National Farmers' Union Council in the last fortnight, and I find that the council's decision is emphatically supported by many farmers in my constituency.

Paragraphs 8 to 25 of the White Paper set out the improvements in the common agricultural policy recently negotiated by the Minister of Agriculture, Fisheries and Food. As I have indicated, I think that the right hon. Gentleman deserves congratulations, particularly on the beef arrangements. Both he and my right hon. Friend the Member for Grantham (Mr. Godber) before him have proved that our partners would not operate the CAP in the inflexible way that some critics feared.

Nor could I, who share with the Minister an area having a good number of hill farmers, fail to mention not only that we are entitled to pursue our own forms of assistance for such areas but that they are also likely to be helped by direct aid partly financed from Community funds. This is a considerable gain.

Mr. Watt

Does not the right hon. Gentleman agree that our so-called partners in France are operating unfairly against some of the farmers of whom he speaks—sheep producers—by refusing to allow British farmers to export sheep without their heads having been skinned, which is totally impossible for any sheep of the black-faced breed?

Mr. Whitelaw

I have a little experience of black-faced sheep, but it does not take me quite as far as that. It would be better if the hon. Gentleman were to make his own speech later and allow me to continue with my own, which is directed at present specifically to the question of assistance to hill farmers, which I think is important.

The White Paper also stresses the requirement to balance correctly the interests of consumer and producer. At one time the bogy of rocketing food prices was a major argument of the opponents of entry into the EEC. Although I fear that this argument is still used unscrupulously by those who are so bigoted as to blame the increase in world prices on the EEC or to disregard altogether the increase in world prices, the argument has been dropped from respectable discussion.

The reason is not far to seek. It has not worked in that way. Paragraph 30 of the White Paper puts the position in a fair and moderate manner when it says: World prices have risen sharply and food prices in the United Kingdom have recently been no higher on balance than they would have been if we had remained outside the Community. That is a fair statement and puts the matter in perspective, and I hope that it lays that bogy once and for all. So long as we are not to have exaggeration in this debate, I trust that that bogy will have been laid by that statement, because to do otherwise would be to exaggerate.

Mr. Norman Buchan (Renfrewshire, West)

Does not the right hon. Gentleman recognise that he is totally wrong about beef, lamb, butter and cheese, all of which are dearer inside the Market than they are outside, and on the two livestock feed commodities of wheat and maize? An import levy of nearly £18 is presently paid on wheat in the EEC. The right hon. Gentleman is ludicrously wrong.

Mr. Whitelaw

The hon. Gentleman must argue with his own Government's White Paper and with the policy of his own Secretary of State for Prices and Consumer Protection, for that is what they say, and I am prepared to stand by what they say in the White Paper. As what they say, with all the evidence and all the statistics they have behind them, seems to be in accordance with the facts, that is a perfectly reasonable way of proceeding.

As regards jobs, effective regional policy is of great importance to the remote and difficult employment areas of the country. Originally here, too, there was anxiety lest we should have to abandon the principle of regional incentives to industry. The White Paper makes it clear that the evolution in Community thinking on regional policy removes these fears, as the Community's plans now are much in line with what we do. In addition, the regions such as Scotland, Wales, the North of England and Northern Ireland, are likely to benefit directly from Community funds.

On the broader issue of employment generally, paragraph 147 expresses mildly a fear about the effect on jobs of our withdrawal from the Community now. Many firms employing large numbers of men and women in total are far more specific. They predict that if we were to withdraw now they, too, would suffer a loss of markets and a loss of trading opportunities, which would mean inevitably a loss of jobs.

There are, then, those overseas firms which invest in this country and which thereby help to improve plant and machinery and also, by their investment, to provide jobs. These firms make it perfectly clear that if we were to withdraw from the Community they would consider placing their investment elsewhere. If they were to do that, it would inevitably again lead to a loss of jobs.

We would all be very wise to regard those warnings carefully. We should disregard them at our peril. Clearly, our withdrawal at this time, as the White Paper makes clear and as many Indus- trialists will confirm, would put many jobs at risk. At a time when employment is already threatened seriously by inflation, such a deliberate act would surely be, to put it mildly, extremely unwise.

I want now to look further ahead at the political implications. I admit that I have always been deeply impressed by the wider considerations referred to in paragraphs 142–52 of the White Paper. For a start, I am not swayed by arguments about a loss of sovereignty or independence. In this modern world no nation, certainly not the United Kingdom, can afford to go it alone. Whether we are members of the EEC or not, our present partners will take decisions which are bound to affect us. If we are in the Community, we shall be able to influence those decisions. If we are outside on our own, naturally we shall have no say in them. Therefore, I believe that we should actually have less power over our own affairs by attempting to remain on our own in the modern world.

Nor should we by ourselves have the same influence in international affairs as a lone voice as we would have speaking with our partners in a strong Community. We have certainly found that in recent years in many of the troubles that have beset the world. Surely we should all want to see Britain in the future exerting her influence for good in Europe and in the world, as she certainly has in the past.

In Europe I believe that we have a vital role to play, for I certainly do not underestimate the effect of the European Economic Community in the pursuit of peace. Two world wars in one generation had their origins in the long-standing antagonism between France and Germany. Today these two countries work together as partners. By working with them we in Britain can do much to cement this new relationship. Reflecting on the sadness of personal loss and the horrors of those wars, I certainly would hate to throw away that opportunity, and so, I suspect, would many of our fellow citizens.

On Britain's influence in the world, I could not better the Prime Minister's statement of 2nd May 1967, quoted in paragraph 142 of the White Paper. I agree entirely with what the right hon. Gentleman said then, and it is reinforced today by the attitude of the Commonwealth countries whose position if we joined in Europe originally worried many people. The vast majority of those countries have made it clear that they believe that we should remain in Europe, and they clearly hope that we will do so.

We in Britain today have inherited a great nation with power and influence far in excess of what would normally be enjoyed by a comparatively small island with few natural resources. This position was built up because our ancestors abandoned all petty thoughts of isolationism and looked outwards from our shores. If we in our turn want to provide the same opportunities for future generations as those that we have had, we must now follow that example.

In the modern world, I am convinced that the only effective way of doing so is through our active participation in the European Economic Community. So, since we in this House are likely to be denied the normal opportunity to settle this issue, I hope that my right hon. and hon. Friends will take the only course open to us and unite with right hon. and hon. Members on both sides of the House, vote massively in favour of the White Paper, and so give a really powerful lead to the nation in support of Britain's staying in Europe.

4.41 p.m.

Mr. Jeremy Thorpe (Devon, North)

We are being asked to approve continued membership of the European Economic Community on the basis of the White Paper. I begin by assuming that the White Paper represents the view of the Government as a whole and is not merely the expression of opinion of two-thirds of the Cabinet.

I find that the constant references in the White Paper to the manifesto of 1974 almost suggest that the renegotiations were primarily for the benefit of the Labour Party and not for the country at large. If that is the basis on which the referendum will be campaigned in the country, in my view it is not a very wise approach.

The Government have three major achievements to their credit. I re-echo what the right hon. Member for Penrith and the Border (Mr. Whitelaw) said. I believe that those Ministers who have been in charge of these renegotiations have achieved considerable amendments not to the treaty but to the terms under which our membership could continue. They deserve unstinted credit on that account. However, I also take the view that much, if not all, of that could have been achieved without having to threaten withdrawal first.

Taking the Government's three major achievements, the Government themselves in paragraph 151 of the White Paper have said that the Community has shown itself to be flexible and ready to adapt to the changing circumstances of the world in response to the differing needs of member States. Some of us were aware of that before the renegotiations and did not need the renegotiations to prove it. If threatened withdrawal was necessary first, I hope that the Government are no longer taking the view that that is a course of action which will have to be followed in order to continue to get flexibility in the future.

Secondly, the Government tell us in paragraph 55 that industrial policies, regional development and State aids are permissible. That was also well known, because it was stated in Article 92 of the treaty, and, whether it be any comfort or not, I say to the Tribune Group of the Labour Party that membership will still permit us to indulge in "Bennery" of the wildest sort.

Clearly, there have been short-term gains. There has been a change in the beef régime. There have been agricultural subsidies to assist in the distribution of surpluses. We have the question of sugar, where about £37 million in subsidy is available to our consumers. About £13 million for veal and beef has gone to assist pensioners. There have been changes in budgetary contributions. There have been great developments in regard to the Third World. It is fair to say that there are some Government supporters who were previously doubting and have been won over by the changed terms. The Minister of Agriculture is one. I might paraphrase Rab Butler's great statement and say that the right hon. Gentleman is now one of the best Europeans that we have.

When the British people assess the arguments and note that there are Cabinet Ministers bitterly opposed, it is only fair to say that the majority of them were fundamentally hostile from the very beginning, long before renegotiations took place. if we consider the position of the Secretaries of State for Employment, for Social Services, for Industry and for Trade, can it be said that they were suspending judgment until the outcome of the renegotiations was known? I believe that they decided to postpone the moment of their announcement of fundamental opposition until after their colleagues had completed 12 months' hard slog in Brussels because the moment was then right in their view for thawing out and presenting their prepared views which had been deep-frozen long long ago.

There is no doubt that, in assessing the opposition from those members of the Cabinet who are hostile, the referendum is increasingly seen in the country to be a device to keep together the Labour Party, and, for some, the renegotiations have been an excuse to reserve judgment until 12 ministerial months have passed and two General Elections have been got over. In those circumstances, I would almost feel sorry for the Prime Minister if I did not realise that he was responsible for getting into this muddle. It was the Prime Minister who in the foreword to the 1974 manifesto said that the Common Market threatened us with still higher food prices and with a further loss of control over our own affairs. What one might think were the two major criticisms of the Community presented now by the anti-Marketeers were ones which the Prime Minister himself raised in 1974 and has now tried to lay to rest.

For those Ministers who dissent, therefore, I have no great respect. They were prepared to remain in a Cabinet on the basis of the myth that if the terms were right they would be very happy to continue loyally serving the Prime Minister of the day. We knew that they were opposed to the terms whatever they were, and it would have been better if they had not taken their daggers into the Cabinet Room and kept them in reserve for 12 months until their colleagues came back from Brussels after hard negotiations on behalf of the British people.

Mr. Nigel Spearing (Newham, South)

Is the right hon. Gentleman aware that the Prime Minister said in answer to a question from a Government supporter that some amendment of the European Communities Act was not beyond the bounds of possibility? If the notorious Section 2 of that Act had been amended as part of the renegotiations, would not what the right hon. Gentleman is saying have been true?

Mr. Thorpe

If the hon. Gentleman is saying that the real sticking point of the seven dissident Ministers is that Article 2 has not been renegotiated and that the treaty has not been fundamentally changed, it is extraordinary that not one of them raised that point in their moment of dissent.

I accept that there is a large body of opinion in the country still undecided. That is not surprising, because the issues are complicated. We are, after all, dealing with the first occasion in history on which the nations of a continent have decided to unite politically and economically through peace and without unity being achieved through a deliberate act of war. It is a totally new departure in the political evolution of the world.

I hope that the tests that the people will apply will be these. What will Britain's influence in the world be inside and outside the Community? What will be her ability to influence her own future, which, after all, is the only worthwhile type of sovereignty, inside and outside the Community? What will be the prospects for the economy inside and outside the Community? What will be the job prospects and real living standards inside and outside the Community?

I assert that the answer to all those questions is that not only is it vital that we remain full members of the Community but that those interests would be gravely undermined if we were to withdraw.

As I understand it, the view of the respectable anti-Marketeers—there are some not so respectable, as I am sure some of the anti-Marketeers will accept—is that we should be better off as a country making our own arrangements with the world at large, and we should thereby have a greater measure of sovereignty. I believe that to be their view, and that they draw the conclusion that Britain would be politically and economically stronger in these circumstances outside the Community rather than within it.

I should like to know what alternative the anti-Marketeers have in mind, and hope that we shall hear about that during the debate. Certainly, it cannot be the Commonwealth. The Commonwealth has either signed up or is signing up with Europe. It is not the 22 developing countries of the Commonwealth who signed the Lomé Convention, which will give them free entry for industrial products and almost entirely free entry for agricultural products, which has for the first time given them indexation of commodity agreements, and which will give them access to about £2,000 million over the next five years to improve the infrastructure of their economies.

Nor will it be the other Asian countries of the Commonwealth, which have discussed generalised preferences, which are now to have enlarged quotas, and which will continue those talks. Nor will it be New Zealand, which has better access. Nor will it be Australia. Nor will it be Canada.

There is no Commonwealth country which wants us out—and my answer to the hon. Member for Banbury (Mr. Marten), who asked our Prime Minister whether Prime Ministers Whitlam and Roling were speaking for their Governments, is that in this case we must assume that they are, because the doctrine of non-collective responsibility obtains only in this country.

Sir David Renton (Huntingdonshire)

One could reinforce that point by reminding ourselves that in an important matter of this kind there would be the usual consultations between Commonwealth Governments before any statement would be made by a Prime Minister in this House.

Mr. Thorpe

That is wholly correct, and I am grateful to the right hon. and learned Gentleman. Those of us who have been privileged to meet the Prime Ministers of Australia, New Zealand and Canada in recent times will, I believe, confirm everything which the Prime Minister said today about the Commonwealth.

The most extraordinary Minister in the whole of this dispute, in my view, is the right hon. Lady the Minister of Overseas Development. In October 1972, before that great October vote—if I have not got her words precisely right, I ask for her forgiveness, and I shall correct them—talking about the wish of some right hon. and hon. Members opposite to have a free vote, she said words to the effect that those who indulge their consciences will undermine the credibility of the party.

George Orwell, roll on!There is the right hon. Lady, who has negotiated a great agreement for the 46 developing countries, knowing full well that if Britain withdraws, all those obligations and treaties will be gravely imperilled —

Mr. Spearing

Why?

Mr. Thorpe

I shall tell the hon. Gentleman why. If he does not know, it is about time he found out. It was a balanced agreement between the Nine and the 46. In my view, all those negotiations would have to be gone through again because they depended upon a whole series of checks and balances. If the hon. Gentleman will read the communiqué in full, he will see precisely what I mean.

The right hon. Lady came back having achieved what she never thought it possible to achieve from the Common Market. It did not live up to all her prejudices, and they were shattered. But her loyalty to her old Tribune colleagues is such that she is now indulging her conscience—and, if I may say so, undermining her own credibility.

I do not believe, therefore, that the Commonwealth is the great alternative which many right hon. and hon. Members opposite would urge upon us. But I assume that they recognise that the Common Market is at least important as a trading organisation. It takes 35 per cent. of our exports, and 50 per cent. of our exports go to Western Europe. As a whole, moreover, the non-Common Market countries—the seven of EFTA, Greece, Portugal and Spain—are all increasingly finding that their trade, whether they like it or not, is becoming enmeshed with the EEC, the difference being that they have to accept European standards and European regulations without their having any political influence in drafting them.

We have to know from the anti-Marketeers, therefore, what chance they think our nation would have, having torn up the Treaty of Rome, in then going as a supplicant to ask for benefits. Are they satisfied with the experience of EFTA in negotiating alternative arrangements? Are they aware that the five EFTA countries which are steel producers have to register their steel prices and have to charge the same steel prices as the Community does in order to avoid unfair competition? There is no representation; it is mandatory if they want trading arrangements.

Are they aware of the tight rules of origin which could mean that as little as 3 per cent. of an electrical component if it came from a country with no trading arrangement would cause that component to be subject to the full tariff? Are they aware of the tariffs which are being retained against the EFTA countries on sensitive products—which in this country would mean textiles? Are they aware of the tight limitations placed on State aids, or of the safety regulations and harmonisations which are being achieved without any representations being accepted and without consultation? Some sovereignty outside the Common Market! Some independence!

Are the anti-Marketeers aware of how practically all the rules for our invisible exports in banking and insurance—as Switzerland is now discovering—are laid down by the Common Market? We are there as a party to discuss them. The outside world is not consulted. Again—some sovereignty, some independence! I ask those questions, of course, assuming that they wish to continue to trade and to have 35 per cent. of our exports going to the Common Market countries.

We have had the example of Norway put before us on many occasions, but I hope that we shall not hear much more of that. Norway is a country which exports metals, alloys and raw materials which are desperately needed in the Community, and, therefore, 35 per cent. of its exports go in tariff-free. But that is because Norway's economy is complementary to that of the Nine, whereas ours is, or would be, directly competitive with that of the Eight.

Moreover, 40 per cent. of Norway's export earnings comes from shipping, and we have not yet seen what restrictions and regulations regarding unfair competition, or even outside competition, the Common Market countries will decide upon.

In the circumstances, I am certain that Norway's future outside the Community will be very difficult. She may have 100 million tons of oil by 1980, and that will cushion her for some time, but the position of 3.9 million people in Norway with much higher costs for agriculture and, therefore, no great competitive threat to the Nine is totally different from that of 53 million people in Britain if we are to tear up the Treaty of Rome and ask for special terms.

Is it suggested that there would be some sort of North Atlantic arrangement? The last Kennedy Round has not yet been ratified. Are we to have some sort of free trade arrangement with Japan? That would be cosy! The last time a free trade arrangement was attempted, it was done by the right hon. Member for Chipping Barnet (Mr. Maudling), and, much as I have affection for the right hon. Gentleman, I still cannot regard that as the most conspicuously successful effort of his political career.

What about all the decisions which would be taken without our being consulted? What the anti-Marketeers wish to do is to gamble away the certainty of a market of 250 million on the possibility of getting benefits from the Community which they now urge us to leave.

I do not believe that the Community is a panacea for anything, but I am convinced that life would be very much more difficult outside it than within it. What are the problems which we face as a nation? What about the multinational corporations? Are not the multinational corporations more likely to be controlled and regulated by a multinational society than by a national one? What about regional development? Is it not right that Europe is collectively prepared to concentrate on the poorer areas so that there is no cut-throat competition over regional aid, and are not the poorer areas of Europe at present most of Italy and most of the United Kingdom, with the exception of London and the South-East? I am delighted that of the £540 million allocated for regional aid over the next three years £155 million, or 28 per cent., will come to the United Kingdom, and I may add that £5 million of it will come to Devon and Cornwall. I am an enthusiastic European on that ground alone. Is it said that we should get rid of all that?

What about the European social fund? Has the steel industry been wrong to take about £10 million as a half contribution towards the cost of retraining steel workers? Were we wrong in 1974 to take about £26 million for industrial retraining? Is it wrong or against our country's interest that the muscle power of Europe should be used for retraining, for industrial development and for the restructuring of industry? The Secretary of State for Industry is always telling us that we need all the investment that we can get. I suspect that it sticks in his gullet to take it from Europe.

What about the European Investment Bank, and the £113 million in 1973–74 at low interest rates for modernising and restructuring industry? When the right hon. Member for Deptford (Mr. Silkin), Minister for Planning and Local Government, goes to his constituency, or travels through the Dartford Tunnel, let him realise that the interest charges being saved on a loan from the European Investment Bank for that tunnel will save his constituents and the ratepayers of Kent as a whole £10 million, because they are getting the loan at 1 per cent. a year. This is the organisation that we are being asked to leave in the hope that the right hon. Gentlemen who are opposed to Europe will somehow get some new great trading arrangement, some new great co-operative economic movement; but that, of course, is sheer illusion.

I make no bones about it: I am just as interested, if not more interested, in the political significance of Europe. We are in fact co-operating with eight democracies in Western Europe, and it is significant that of the original Six and now Denmark and Ireland none has regretted its decision.

Mrs. Renée Short (Wolverhampton, North-East)

What about Denmark?

Mr. Thorpe

Denmark will stay in whatever the outcome of our referendum.

Mrs. Short

He knows better than the Danes.

Mr. Thorpe

I do not know better than the Danes, but if the hon. Lady wishes to know, sometimes one can talk to people in government and sometimes one can get a straight answer.

We are told that the Commission is a faceless dictatorial body; but all the Commission can do is to carry out the policies that have been decided by the Council of Ministers. There will be no agreement by the Council of Ministers unless it is unanimous, because each country has a veto, and no Minister will go to the Council of Ministers to put forward policies that he cannot carry in his own Parliament, for otherwise he will be toppled. If anyone has any doubts about that, there are many right hon. Gentlemen on the Front Benches who will be able to bear out what I say.

What I want to ask the anti-Marketeers is what sort of sovereignty they are prepared to surrender. Any? Was it wrong to surrender it to the IMF in order to prevent violent fluctuations in the world money supply? That was a great intrusion into our sovereignty. Was it wrong to surrender it to the OECD on many matters of economic co-operation? Was it wrong to surrender it to EFTA, which had very great powers of control over our external tariffs?

Was it wrong to surrender it to the United Nations? There used to be Labour Members who were in favour of world government. Here is an opportunity to build up government on a European scale. I make no bones about it—I want to see a united Europe in which we play a full part.

The best case for joining Europe was made in 1947 by the Keep Left Group of the Labour Party, which was not the daddy but the grandfather of the Tribune Group. Under the heading "We are Europeans now", among other things it stated: France and Britain are now partners in a common fate … in times past we both used to fight major wars from our own resources; now we are both unable to do so. The Channel has ceased to matter, and strategically we British have become Europeans whose prosperity and security depend on that of the rest of Europe. Working together, we are still strong enough to hold the balance of world power … but if we permit ourselves to be separated from France, and so from the rest of Europe … we shall not only destroy our own and Europe's chances of recovery, but also make a third world war inevitable … if we could work towards an economic union of European States, we should once again be able to stand up to an American slump … A United Europe strong enough to deter an aggressor, but voluntarily renouncing the most deadly offensive weapon of modern warfare would be the best guarantor of world peace … the greatest obstacle to European unity is, of course, British Initiative. To be effective, this initiative must be primarily concerned with European unity … the German problem is insoluble as long as Europe remains divided. The three authors of that were the late Dick Crossman, the right hon. Member for Ebbw Vale (Mr. Foot), now, in the theological terms, a dissenting Minister, and the hon. Member for Bethnal Green and Bow (Mr. Mikardo). That was the motley army that the hon. Member was leading in 1947.

I believe that exclusion from Europe would be bleak. I believe that there is every probability that we should face a high tariff wall around continental Europe. There would mean less trade, less investment. There would be a threat to political stability both here and in Europe.

I want to work towards a united Europe that is outward looking and with a low external tariff and with liberal trading policies. I want to share power in order to get what the Prime Minister referred to in May 1967 as the "benefits of interdependence". I want direct elections to a European Parliament by 1978. I want political parties in this country co-operating with their sister political parties in Europe, fighting on a common platform, and certainly during the referendum campaign I hope to have on our political platforms many leading Europeans campaigning with us.

Europe disunited plunged the world into war twice this century, but Europe in its heyday produced the philosophy, culture and teaching of Rome, London, Paris and Athens. Politically and economically it could give the world an undreamt-of dynamic force.

This country has been in retreat ever since the Second World War, retreat from its overseas possessions, retreat from its overseas commitments, retreat from many of the responsibilities abroad that it had accepted. There are some who wish that retreat to go still further and who would turn this country into one of a siege economy. I believe that the time has come to end that retreat. It is time to reverse it and to advance into Europe.

That is why I hope that the British people will vote in the referendum that that is what we should do.

5.7 p.m.

Mr. Douglas Jay (Battersea, North)

The debate has been no exception to the rule that when the spokesmen of all three parties agree the House is wise to be rather sceptical about what they are saying. Therefore, I intend to do what the Prime Minister suggested and what the right hon. Member for Devon, North (Mr. Thorpe) certainly did not do—assess the actual results of the renegotiation.

The overriding fact emerging is that renegotiation has changed almost nothing, and almost every Member knows in his heart of hearts that that is true. The attempt in the White Paper to turn molehills into mountains is no more convincing than that of the 1971 White Paper, although the special pleading in this is a little less untruthful than that of 1971. All this is not the fault of our negotiators, apart from their failure to attempt to get either of the treaties amended. It is inherent in the nature of the Common Market.

First, renegotiation has not in any way altered the constitutional position, the Treaty of Rome, or the system of authoritarian legislation from Brussels. Secondly, there is no alteration in the Treaty of Accession, which forces on this country a series of food taxes on almost every major foodstuff and lays down the actual increases in the prices of those foodstuffs that we have to accept over a four-year period much of which is still to come. The right hon. Gentleman did not mention that, and there is no mention of it in the White Paper. Thirdly, there is no fundamental renegotiation of the common agricultural policy.

Fourthly, even on New Zealand, a subject on which the Prime Minister has always claimed that there had to he a major improvement, there is at best virtually no change and at worst a worsening of the situation from the United Kingdom's point of view. The import duty on New Zealand mutton and lamb still has to go to 20 per cent. All our cheese imports from New Zealand have to come virtually to a stop from 1978 onwards, and there is no change except for a pious form of words that can mean anything or nothing.

Even for New Zealand butter the 1972 Treaty of Accession said that continued special arrangements after 31st December 1977 would be determined by the Council, and no date was fixed by which those arrangements should end. However, according to the Prime Minister, the new Dublin agreement says: Thus for the period up to 1980 these annual quantities … could remain close to effective deliveries under Protocol 18 in 1974 …"—[Official Report,12th March 1975; Vol.888, c. 521.] At best, that means that a short-term compromise has been reached after which everything remains open and subject to veto. But, at worst, the words could be taken to mean that the whole special arrangement is now to end in 1980, although before renegotiation it was to extend indefinitely. It is thus arguable whether the New Zealand part of the agreement has made the situation a little better or a little worse.

I turn to the question of the budget contribution, which is important, although not, in my view, anything like the major part of the economic burden of membership. On closer examination, it is not certain whether the new agreement is better or worse for us than the Commission's proposals of last January. A whole series of conditions still have to be satisfied before we get any refund. The balance of payments criterion is not wholly omitted. The system of "own resources", which the Labour Party manifesto said was unacceptable, is accepted, and after three years of refunds our economy has to be supervised by the Commission in any case.

According to theEconomistof 29th March, the arithmetic of what we have to pay is as follows: The deal finally struck in Dublin by the Prime Minister was not as good as the plan the EEC Commission proposed in January. TheEconomistgoes on to say that if, for example, the budget in 1980 is 8,000 million units of account and if our own Treasury estimates of GNP and budget share are correct, Britain would qualify for a refund of about 345 million units of account under the Commission's scheme, but only 250 million under the Summit agreement. Alternatively, if the budget tops 10,000 million units of account, Britain would have qualified for 422 million units of account under the Commission's scheme and only 300 million under the Dublin agreement. Therefore, when the agreements are looked at, unless theEconomist'sfigures are wrong, they arc clearly not as attractive or as convincing as has been made out. I should like to know from Ministers whether those figures are correct, because the budget renegotiation was supposed to be one of the major achievements of the Government in the renegotiation.

I turn next to the Regional Fund, which, I gather from the Leader of the Liberal Party, was enough to convince him of the necessity of staying in the EEC. We are now offered net, according to the Foreign Secretary, £20 million a year for the whole of the United Kingdom. That is less than one-tenth of our expenditure on assisted areas and it is one-hundredth of our trade deficit with the EEC. Although it is intended as a contribution to the whole of the United Kingdom, the Leader of the Liberal Party may like to know that it would pay for approximately three-quarters of a mile of the proposed motorways for inner London. I mention that so that the right hon. Gentleman can estimate the magnitude of what has convinced him in this matter. Indeed, it is such a molehill that the White Paper—which seems to understand this point better than the Leader of the Liberal Party—does not even attempt to make it into a mountain.

After this further, well-meaning effort in renegotiation, what are we left with when we strip away all the verbiage? We are left with an authoritarian system of legislation, taxation and government which is already sapping away not just the sovereignty of this country as an independent self-governing nation but the democratic control of our people over the laws and powers of government. To my mind, that is more important than what is normally called sovereignty.

Does the House realise that in 1974 of the 3,936 legislative Acts adopted, as they call it, by the EEC which claim legal force in this country, over 3,000 were adopted by the unelected Commission and not by the Council and 2,980 of those were Commission regulations—in effect, legislation in secret by officials, automatically binding on the courts of this country? If it is said that they were all fairly trivial, they should not be legislation. If they were not trivial, they should not be enacted in this manner.

To accept this type of authoritarian rule is to go back on a democratic principle which has been taken for granted in this country for nearly three centuries; namely, that legislation must be approved by representatives of the people. The right hon. Member for Penrith and the Border (Mr. Whitelaw) spoke today about the two world wars in this century. Some of us who lived through those two wars —I had always supposed all of us—believed that we were fighting, amongst other things, for the preservation of government by the people for the people in these islands. That is not just my view. The present Prime Minister put this very justly in a speech as recently as 31st January 1973 when he said: In 93 legislative words the safeguards gained after centuries of constitutional struggle and even bloody civil wars were swept away by a provision that said simply that hereafter any. thing enacted by the EEC automatically became law, annulling any laws which were inconsistent without debate. That is still true. There has been no change. The Treaty of Rome and the European Communities Act remain unamended by the renegotiation.

Mr. John P. Mackintosh (Berwick and East Lothian)

I am interested in my right hon. Friend's deep concern that every statutory instrument and every piece of legislation should receive the scrutiny and assent of the House. Has he given thought to how the House might consider the three volumes of statutory instruments issued each year by Whitehall which have legal force and which have no consideration here whatever?

Mr. Jay

My hon. Friend knows perfectly well that it is open to the House, if it wishes, to examine any of the statutory instruments laid before it by the Government. If my hon. Friend's view is that our system is not democratic enough, I am in favour of making it more democratic and not less democratic.

If it is suggested that we should have a Common Market Parliament, that is to advocate outright federation and the end of the independence of this country, which the British people, on all the evidence available to us, certainly will not willingly accept. However, I believe they should understand that this will be advocated by a lot of people if the electorate vote in the referendum for staying in the EEC. The Leader of the Liberal Party candidly made that point today.

Secondly, we are left after renegotiation with the heavy economic burdens of membership virtually unchanged. In my view, a country's political strength in the modern world depends largely on its economic strength. This country can prosper economically only if we stick to three policies. First, we must buy our essential imports as cheaply as possible. Secondly, we must keep our markets open for our industrial exports. Thirdly, we must refrain from importing too many manufactured consumer goods. It was by those policies that we built up our great trading strength in the last century, and it is because we have departed from them in recent years that we are now in chronic deficit, even apart from oil.

The greatest folly of all is artificially raising the prices of our food imports. It is no good hon. Members opposite saying that the common agricultural policy has not raised our food prices. The hard fact is that even in 1974, when world food prices were exceptionally high, beef, veal, mutton, lamb, butter and cheese, and many secondary foods, could have been imported more cheaply if this country had been outside the Common Market.

However, world food prices have been falling for six months. Wheat and maize —the two most important commodities—are cheaper outside the EEC, and the EEC has reimposed import levies on them. Virtually every food import crucial to this country could now be obtained more cheaply outside the Common Market if we were not members. Indeed, if this were not so, why all these import levies, bans and intervention buying? What are they for?

Under the Treaty of Accession, unaltered as it is, our main food prices must be artificially raised year by year above the present level. I give two examples. We are paying a tax of £300 a ton on butter in order to raise our internal price to £600 or rather more, and under the treaty, by 1978, that £600 must be artificially raised to over £1,000 a ton. Secondly, there has been an almost total ban on beef imports into the EEC since May last year. The world price is 30 per cent. or so below the EEC price and the beef mountain has risen to well over 300,000 tons. EEC beef is again being sold at a huge discount to Soviet Russia and other countries lucky enough to be outside the Common Market. If hon. Members doubt that, they have only to look at theFinancial Timesof as recently as 3rd April.

The White Paper never mentions the beef import ban when telling us proudly that the Government have obtained one very welcome agricultural concession in substituting deficiency payments for beef intervention buying. But why only for beef? Also, in the words of paragraph 22 of the White Paper, the concession is "initially for a year", after which none of us knows what will happen.

What I find most remarkable in the renegotiation story is that there has been no fundamental renegotiation of the common agricultural policy. Indeed, the Prime Minister, in a candid moment, virtually admitted that this afternoon. The Commission's paper entitled "Stocktaking of the Common Agricultural Policy" remains just a piece of paper. It was not even discussed, let alone approved, at the Dublin summit meeting.

Accordingly, it is pure nonsense to say that cheaper food is not available outside the EEC and that membership has not raised our food prices. If hon. Members want to measure accurately the effect on food prices here of the whole operation, they will do well to note that from 1971 to 1974 food prices in Norway and Sweden rose by 20 per cent. and in this country and Ireland they rose by 40 per cent. That is the fairest measure of what has happened.

The vital issue, however, for this nation's long-term future is not whether a particular foodstuff costs more or less at a particular date but whether we are to be free in future to buy any major import from the most efficient low-cost producers in the world. As nobody knows the future of world prices, it is undeniable that we must, in the long run, be better off if we have that precious freedom to import than if we have not. Artificially raising the price of one of our main imports such as food not merely raises living costs and turns the terms of trade against us but artificially raises the labour costs of producing our manufactured exports and thereby damages our competitive position all over the world.

That is why unquestionably we should be far better off in a genuinely European industrial free trade area. It is also the reason—and again this has not been mentioned by any of the party spokesmen today—why we have incurred such a staggering non-oil trade deficit with the EEC in the last two years.Hansardfor 24th March shows that the visible trade deficit with the EEC Eight in 1974 was £2,035 million on a balance of payments basis and is now running—these are the secondary dynamic effects of which we have heard so much—at £2,600 million. The deficit is getting worse.

The remarkable fact is that even the non-oil deficit with the EEC—about £1,600 million—is equal to the whole of our non-oil trade deficit with the rest of the world. Who is right, the anti-Marketeers, who predicted a deficit, or the 1971 White Paper—and I see the right hon. Member for Sidcup (Mr. Heath) present—which predicted a "positive and substantial surplus"? This is a test of fact and not of argument.

In addition to this disastrous deficit another basic change in the situation has occurred. As the Prime Minister said, history has not stood still. The free trade area agreement between the EFTA and EEC countries for full industrial free trade is now an accomplished fact. We used to be told that it could never be created. In fact Norway and Sweden and the other EFTA countries will soon be enjoying nil tariff trade both ways in the combined group of 16 EEC and EFTA countries without suffering any of the burdens of the common agricultural policy or authoritarian rule from Brussels.

The very people who told the Norwegian public that they would suffer catastrophe if they stayed out of the EEC are now telling us that we should suffer catastrophe if we withdrew and rejoined Norway and the other EFTA countries. That is the purest nonsense. I ask the House briefly to consider these facts. By the end of this year, all the EFTA and EEC countries will be approaching complete industrial free trade with one another. I agree that there are a few exceptions, as is always the case with such agreements.

If we were to withdraw from the EEC and proposed to continue this all-round European industrial free trade, we should not be proposing a new tariff agreement. We should be advocating thestatus quoin industrial trade, and anyone wishing to disturb it would have to take the initiative in proposing to raise tariffs against the United Kingdom alone. That is a fact which hon. Members, whether deliberately or not, ignore in much of their argument.

Who would be likely to make such a proposal? Certainly no EFTA country would do so. It would also clearly be contrary to the interests of EEC countries, as well as being inherently absurd, because those countries are selling far more in our markets than we are selling in theirs. A legal form for the new arrangement would have to be devised, but in terms of industrial and trading realities we should simply be proposing to maintain the status quo.

The House should also note this. The EEC's industrial common external tariff averages only about 7½per cent., which is low by international standards and lower than ours. The White Paper rightly points out that in this year's Tokyo round of world trade talks the EEC has now agreed to negotiate a substantial reduction in industrial tariffs. Therefore, even in the highly unlikely event of the common external tariff being raised against us by the EEC, it would average less than 7 per cent., and, since ours is higher, our trade balance would improve as a result of the change. In any case, in spite of what the Leader of the Liberal Party said, there would certainly be some special arrangement with Ireland. It is doubtful whether Denmark would come out with us or remain in the EEC, but, whatever happened there, the tariff against British goods would be very low.

Mr. Christopher Tugendhat (City of London and Westminster, South)

Does not the right hon. Gentleman agree that in the modern world the level of tariffs is not the principal deterrent to international trade but that the setting of standards, whether environmental or technical, can play a great part, as we have seen in our trade with Japan? Does not the right hon. Gentleman agree that if we are not in the Common Market and are not able to participate in the setting of standards many of our industrial goods will be competing at a disadvantage, as the Swedish steel industry has found?

Mr. Jay

The great burden of the case of the pro-Marketeers has been that the raising of this tariff barrier against us would cause all these catastrophes and unemployment. I agree with the hon. Gentleman that there is little substance in that. There are agreements on standards in EFTA and in all other common markets and trading areas, and I have not the slightest doubt that we should in many cases follow the standards which would be agreed between EFTA and EEC countries. That is not a major factor in the situation.

Therefore, given only a moderate degree of resolution and skill, I am convinced that in those circumstances we could soon achieve an arrangement as beneficial to us as that of Norway. Sweden, Switzerland and the rest—indeed, in some ways more beneficial, because our food prices would be lower than theirs because they follow a more protectionist agricultural policy. As the Leader of the Liberal Party acknowledges, we should remain full and active members of the United Nations, its agencies, NATO the OECD, the Council of Europe and all the rest. Nobody disputes that.

Mr. Thorpe

There has been no suggestion by anyone that we should withdraw from those organisations. What I was trying to find out was where the anti-Marketeers are prepared to give up sovereignty and where they are not. There must be a limitation or delimitation which it would be valuable to know.

Mr. Jay

Surely the right hon. Gentleman must have discovered by now that none of the international institutions which I have prescribed presumes to legislate directly on the internal affairs of this country. He must have grasped that. That is fundamental to some of us, if not to the right hon. Gentleman.

Therefore, renegotiation has not altered the basic fact that this country is being asked by the Euro-enthusiasts at the same time to sacrifice a large measure both of its political liberty and of its economic future. Faced with that choice, I cannot believe that the country will come to the wrong decision.

Mr. Julian Amery (Brighton, Pavilion)

I can well understand that right hon. and hon. Gentlemen who belong to or sympathise with the Tribune Group should be opposed to the motion. Those who would rather substitute an Anglo-Saxon form of people's democracy for a Western democracy based on a mixed economy must naturally be opposed to joining a system which could well produce a vigorous revival of the free enterprise system. By the same token, those who feel a closer affinity, instinctive or intellectual, with Moscow rather than with the West will also naturally be opposed to joining a system to which the Soviets are unalterably opposed.

For my own part, I should have thought —although I am not qualified to judge—that a good Marxist case could be made for Britain's joining the Community. The Romanian, Yugoslav and Chinese Governments all wish us to stay in, and I have heard that case powerfully put by the hon. Members for Wolverhampton, South-East (Mr. Edwards) and Ogmore (Mr. Padley), who can hardly be termed Right-wing members of the Labour Party. But I must leave it to those who are better qualified than I am, those who share the assumptions of the Tribunte Group, to try to convince the waverers in that group.

I wish to address myself to hon. Members on both sides of the House who believe in the mixed economy, the Western alliance and the Western pattern of democracy, including the right hon. Member for Battersea, North (Mr. Jay), who—if I may say so with respect to the dissentient Ministers—is by far the most distinguished and informed critic of the European Community on either side of the House. I will deal, if I may, with the two main arguments he put forward—the economic and the political.

The right hon. Gentleman oversimplified the economic case by suggesting that the strength and pre-eminence of Britain and the British economy had been built up on cheap food. If I read history aright, we began to get cheap food only in the 1870s, at the very time when the Americans and Germans began to overtake us in industrial know-how and marketing.

Mr. Ronald Bell

My right hon. Friend surely is not arguing that America and Germany overtook us because they were paying more for their food?

Mr. Amery

I do not want to revive the arguments of generations ago. But a main argument of the free traders was that the Germans and the Americans had to pay more for their food than we did.

In fact, many factors contributed to our pre-eminence. There was our technological supremacy and our naval preeminence. But the foundation of our industrial and financial success was that we were not an island country but since the beginning of the eighteenth century had been a member of a large trade and payment area—the Empire, later the Commonwealth. It was thanks to this that we became a great industrial Power, it was thanks to this that the City built up its financial pre-eminence, and it was thanks to this that we avoided violent social revolution for 300 years. The Commonwealth was a great trading area in the sense that it represented a vast extension of the home market. It was a great payments area in the sense that the resources of the whole area backed our currency.

In the latest stage it was institutionalised shortly before the war in 1931 and 1932 by the formation of the sterling area and the Ottawa Agreements. There will be no doubt on either side of the House that membership of this great trade and payments area enabled us to get out of the great depression more quickly than other industrial countries like the United States and the Western European countries. It helped us to finance the war effort before lend-lease, and it saw us through the aftermath of the war.

The lesson is clear, that 50 million people could not live in this island on the standard of living they expected and in the free society that they had enjoyed or exercise any measurable influence in the world unless Britain was part of a wider area.

It was our clear interest in the immediate post-war period to try to maintain and develop that Commonwealth trade and payments area, but there were great difficulties in the way. We were not a big enough market to absorb all the exports which the Commonwealth countries wanted to sell. We could not provide them with all the capital equipment they wanted. We could not provide all the investment finance they needed, let alone the aid.

Inevitably, Commonwealth countries began to turn to the United States, a United States which was implacably opposed to the continuation of the Commonwealth trading area and which was determined to make the dollar the only reserve currency. Any chance that there might have been of maintaining the Commonwealth as an effective trade and payments area was undermined by the Washington Loan Agreement concluded by Mr. Attlee's Government and the Geneva and Havana Charters ratified subsequently.

Mr. Jay

The right hon. Member for Brighton, Pavilion (Mr. Amery) knows quite well that in the original GATT negotiations the United States accepted the continued existence of existing preferential trade agreements. That meant that we were at liberty to continue the Commonwealth trading system if we wished.

Mr. Amery

We could continue the existing agreements but we were committed to phasing them out. We could not change them from their present rate to a proportional rate, increase them or introduce new ones.

Recently the Prime Minister said: My first regard, ever since I entered this House, has always been more to the Commonwealth than to Europe.—[Official Report, 18th March 1975; Vol. 888, c. 1465.] The Prime Minister and, I think, the right hon. Gentleman were members of the Government that accepted the Washington Loan Agreement. The Prime Minister was a member of the Cabinet which accepted the Geneva and Havana charters. The consequences followed inexorably—they flowed on unavoidably. The preferential system was eroded and the sterling payment system was virtually dissolved after the devaluation in 1968.

We were left alone in a world dominated by the United States, the biggest industrial Power, by the Community of the Six, the world's biggest market, and by the Sovietbloc, a closed economy. We were alone, competing with Japan for world markets. The only trade and payments area we could join—and unless we joined one we would have been in an extremely uncomfortable position—was the European Economic Community, a community with vast bargaining power, able to influence, if not to dictate, the price it pays for many of its imports. It is a Community with great resources of technology and brain power, with great political influence, a community well worth joining.

But to me joining the Community was not an end in itself, important though that was. It was also the only way of maintaining and reviving our links with the Commonwealth. The Prime Minister has said that he has always had more regard for the Commonwealth than for Europe. He began to think about Europe only in 1966. I was invited by Sir Winston Churchill to take part in the preparatory moves towards forming the European movement in 1946 and was directed to help ensure that the political initiatives being taken conformed with Commonwealth interests. One thing was clear to me from the start. Europe is a rocky outcrop of the Asian mainland. It can never attain the standard of living that its people desire without having close links with overseas countries and access to their markets and materials. This has been true throughout history. It happened with the Roman Empire, with the Crusades and in the colonial era.

Another thing was equally clear. Only if we in Britain—and the French and the Dutch—could broaden our industrial and financial base to something like an American scale could we hope to provide our former overseas associates with the level of investment and aid they needed, offer them the kind of money which alone would preserve or revive the links, economic and political, which had been established with them in the past. The French and the Dutch saw this sooner than we did. We have begun to see it. So have the overseas countries themselves. The Yaoundé Convention, the Lomé Convention and the association agreements between overseas countries and the Community are all examples of this. They value access to the European market and to Europe as an alternative source of investment to that which the Americans can provide.

Membership of Europe is not just a condition of our economic growth—perhaps even the maintenance of a liberal system in this country. It is the condition of putting reality back into the concept of the Commonwealth.

I turn to the political argument developed by the right hon. Member for Battersea, North. He said that nothing in the renegotiation arrangements had changed the fact that the Treaty of Rome remained basically a treaty, committing us to a federation and putting this Parliament under the authority of Brussels.

Mr. Jay

I said that nothing in the renegotiations had altered the system by which the Commission and Council can legislate for this country. I then said that if we try to make that democratic by giving those powers to Common Market Parliaments, we are committed to a federation.

Mr. Amery

I am glad that the right hon. Gentleman has corrected my oversimplification of his remarks. He has said that today it is not even democratic, but that if it were to be made democratic, it would commit us to a federation. I invite him to look back at history. When the so-called Imperial revival took place at the end of the last century the prophets of that revival—Dilke, Chamberlain and Milner—all aspired to an imperial federation. They wanted an imperial Cabinet of the self-governing Dominions and ourselves—an imperial Parliament. They had a vision of a federation.

The Commonwealth grew into a union which was a politically effective great Power from 1900 until the 1950s, but it did not develop on federal lines. It developed by a system of continuous consultation between Heads of Government, Foreign Offices, central banks, general staffs and even parliamentarians. It worked. There is a lot to be said for inter-governmental co-operation. It is possible that in the Commonwealth system we worked out something more applicable to the twentieth century than the essentially eighteenth-century concept of a federation. The European Economic Community may need, because of the diversity of its peoples, stronger institutions than did the Commonwealth. But over the last 17 years, and particularly over the last three or four years, the European Economic Community has, perhaps surprisingly, developed on Commonwealth lines. The reports of summit conferences of Heads of Governments, which the Prime Minister and previously my right hon. Friend the Member for Sidcup (Mr. Heath) attended, as circulated to Ministers, read more like the old Commonwealth conferences before the expansion of the Commonwealth than like any federal or supranational organisation. It may well be that the sterling area, with its system of independent central banks banking their reserves voluntarily with one of their number, will be the next stage in a European monetary union. The European Economic Community is already 17 years old. If anything, it shows signs of evolving on Commonwealth lines rather than on federal lines.

But the vote on Wednesday has a more immediate significance than the fundamental problems we have been discussing. When Sir Winston Churchill made his speech at Zurich in 1946 calling for a union of Europe, he wanted to see Europe come together in self-defence against possible Soviet aggression. This was at a time when no American troops were left in Europe.

The immediate urgency for union in self-defence was overtaken by the creation of NATO and the readiness of the Americans to take upon themselves a large part of the burden of protecting Europe. But the Western Alliance, on which we rely for our very safety as we sit here this afternoon, is now in crisis and the policy of détente is shaken to its foundations, if not in ruins. What has happened in the Far East has underlined one of the basic foundations on which détente rested. The domino theory is now more fashionable than it was some time ago. Even the death of our old wartime ally, General Chiang Kai-shek is symbolic of vast changes in the area which must have repercussions on Japan. But the problem is not regional. Confidence in American credibility is now shaken and we see the Israelis unwilling to make concessions because they are unable to rely on the undertakings of the American administration when it and Congress are in conflict. All of this has repercussions for us in Europe, particularly at a time when the American administration is in conflict with Congress over its policy towards Turkey and when Portugal seems to be on the point of defection from NATO.

We have to ask ourselves in these conditions whether we can rely on the United States standing by its European allies, whether we can rely not on the good will of the administration but on the ability of the administration to deliver. Certainly the public opinion polls and the Congressional pressures are disquieting. But two things can be said with some certainty.

First, the best chance of keeping the Americans with us is for us in Europe to prove not only that we have the will but that we have the ability to develop the economic means of making a major contribution to our own defence. That means Britain remaining in the Community.

Second, if we fail by this means to keep the Americans in Europe our only hope of survival is to be able by ourselves to build up a sufficient defence effort over the years remaining to us to be able to deter aggression. That means, even more, British participation in the Community. A "No vote in the referendum or on Wednesday would have catastrophic consequences in America. It would be seen as a sign of deep European divisions and could well begin a process whereby they would equate us in their minds with Vietnam and Cambodia.

Such a vote could also have catastrophic consequences for Europe, leading to a revival of Franco-German rivalry which our presence helps to avoid and overcome. A "No" vote on Wednesday or in the referendum, if and when that takes place, would be a bigger victory for Moscow than what is happening in Cambodia or Vietnam or Portugal.

We all know that this is a debate of vital importance. I believe myself that our future as a liberal society, the future of our mixed economy and our ability to maintain 55 million people at an adequate standard of living, depend upon our coming out categorically in support of the Government's recommendation. I believe, too, that unless we do so we stand in great danger of so weakening the Western Alliance as to undermine it.

But I go one step further. I can understand the tactical reasons which led the Prime Minister to speak in rather a low key and not try to overplay his hand or even to play the full strength of the cards he holds. However, as we come to talk about these things to the electorate I hope that those of us who believe in remaining in Europe will not hesitate to say, not only that it would be a pity if we came out, not only that it would be a tragedy for future survival and safety, but that membership of the Community offers a tremendous horizon in terms of growing prosperity for ourselves and of greatly increased influence for good in the rest of the world.

5.44 p.m.

Mr. John P. Mackintosh (Berwick and East Lothian)

I begin on one point of agreement with my right hon. Friend the Member for Battersea, North (Mr. Jay), who said that the renegotiation that has taken place has made no fundamental change in the structure of the European Community. I entirely accept this. Indeed, when those of us who are pro-European in the Labour Party saw the proposals for renegotiations, we accepted them, albeit with reluctance, because in every case they made a proposal that was possible under the treaty.

The renegotiation proposals made a suggestion, in the case of the budget, that would have been considered in two or three years' time had the burden of the budget been too heavy on any particular member. I regret that we forced the pace and insisted on considering all the potential weaknesses of Britain as a contributor to Europe in three years' time rather than waiting for the three years to pass, because we might have got better terms if the situation had been actual rather than hypothetical. Instead we have had this embarrassing performance of going round Europe protesting how poor and wretched we would be in three years' time.

If we consider the agreement on New Zealand, there was in the protocol an opportunity for renegotiation in 1977. All that we did was push it forward two years. There was no fundamental change. We simply asked the Community to make changes which might have happened, on the assumption that certain situations would occur.

I know that many of my hon. Friends, particularly those below the Gangway, accepted these renegotiation proposals on rather a different footing. They assumed an inflexibility in the Community which would make it impossible for it to accept these terms. It is like one side accepting the referendum because it thinks it will win and the other side accepting it for the same reason. The pro-Europeans accepted renegotiation because they knew that the Community would meet the terms if it had to hold together, and my hon. Friends below the Gangway accepted renegotiation because they thought that this miserable, inflexible body would snap. They have been wretchedly unhappy because that has not happened. However, that is their problem not ours.

The Community has met the renegotiation as we intended. It has done one great thing—it has demonstrated its flexibility. We now have the choice. Do we remain in the Community? This is why the original wording of the referendum question was correct in the sense that what has changed, compared with the endless arguments we had before 1973, is that we were then arguing about the merits of dismantling certain arrangements we had and joining the Community. We are now arguing about a different situation; namely, whether Britain should at this point tear up the treaty which it ratified and come out of the Community after two-and-a-half years of membership.

This is a different situation which I hope the House will recognise. One simple point which demonstrates this is that the Australians and New Zealanders. who definitely did not want us to join. and made this clear, now want us to stay in. It is a curious spectacle to see people like my right hon. Friend the Member for Battersea, North being more New Zealand than the New Zealanders, desperately knowing better what is in their trading interests than the New Zealand Government who have accepted the terms set out in the renegotiation agreement.

Mr. Jay

What my hon. Friend never seems to discover is that I am arguing from the point of view of the United Kingdom. It is in the interests of the United Kingdom that we should be able to buy efficiently and cheaply produced food from New Zealand.

Mr. Mackintosh

I am grateful to my right hon. Friend. He has recognised my point that the New Zealand Government do not share his views. So the argument that we should reject these terms for the sake of New Zealand is not on. My right hon. Friend's argument, and I am glad he makes it clear, depends on the availability of a vast quantity of cheap food from New Zealand and the developing countries. I hope that his argument will be listened to by my right hon. and hon. Friends whose hearts bleed for the Third World. This is the great protagonist of the Third World and the under-developed countries—who wants cheap food produced endlessly for Britain instead of our being charged the cost of production. [Interruption.] My hon. Friends below the Gangway cannot have it both ways. They cannot say that they are great world-wide Socialists, friends of people all over the world, and then say that they are asking for masses of cheap food from other countries indefinitely.

I very much doubt whether this pool of cheap food exists or will exist in years to come. This depends on the assumption that there will be a stock of cheap food, and recent years have demonstrated that this is not the case. We have had to buy food at a reasonable price.

I turn now to the political point. Why did the Australians, the New Zealanders and, for that matter, the Canadians and the United States wish us to remain in the Community rather than try to revamp some situation which existed before 1973? There are some practical points. In the first place we are useful to these countries inside the Community. That is clear. Second, they know that if Britain comes out of the Community they will be faced with some difficult choices since they want to trade with the whole Community, because it is such a valuable market. We should find, if we came out, that many of the ACP countries preferred their agreements with the Community to a re-arrangement of trading agreements with Britain alone.

There is an extra reason which is of importance and general interest to us. Other countries want Britain to remain in the Community because they realise that the Community is a force for stability in world relations at the moment and that the stronger the Community is, the less it breaks down, the better for world peace. This is important at a time when the United States is in a state of doubt and hesitation over its policies. At a time when the United States is worried and withdrawing, at a time when the whole détente policy in Europe is in question, the nine nations of the European Community standing together with common interests is a great factor which we should not lightly disturb or break up.

We must realise that the European nations have an identity of interest. For instance, in defence we have an identity of interest in maintaining stability and security for Europe and in not permitting an agreement over our heads or at our expense, between the United States and the Soviet Union.

We must realise that if Europe breaks up into bilateral arrangements we shall be in great danger of Germany and France—this applies particularly to Germany, which is now a fantastically powerful nation—making their own arrangements with the United States or, in the case of Germany, conceivably making its own arrangements with the Eastern Powers if that gave it more security in Europe. That would see us back in the quaking bog of the 1920s, when that kind of balancing and bargaining could happen in central Europe.

In fact, I am one of the strongest pro-Germans in the House. But we must recognise that one of the great virtues of the Community is that it ties Germany into Western Europe. It knits us together in co-operative effort. However, it also allows us to deal collectively with the United States. It causes that country to listen to our voices and to Britain's voice in Washington as part of the Community. We would not be listened to in Washington if we were on our own and outside the Community. We speak with authority in Washington because we are part of the Community.

One of the great virtues of the Community in European terms is that it enables us to prop up the weaker countries. For instance, it enables us to support Italy. The maintenance of Italian democracy is of importance to Europe and we do not want it to fail. The strength of the Community allows us to support Italy economically and politi- cally and to prevent its democracy crumbling. When I turn to the economic situation facing this country regret to say that the same argument applies. One of the most fundamental economic reasons for remaining part of the Community is that it bails this country out economically from the disasters that would face us if we pulled out immediately.

I put it clearly to the House that I am not thinking of long-term developments. I can turn later to the long-term arguments. If we had a "No" vote for the referendum, my fear is that the Arab and African States, which hold enough money in London to bankrupt Britain at seven days' notice, might, on the advice of their Finance Ministers, no longer feel that this country was a reliable place in which to invest. That might be their view if we decided to pull out of the Community. They could well take that view without disliking this country and without wishing to react in a hostile way to our policies. For their part, they need take no catastrophic decision; they could merely decide not to lend us what we need month by month to cover our deficit. If that happened we would have to cut our standard of living immediately by 5 per cent. or 6 per cent. We would then have to pay for imports on the basis of what we were earning across the exchanges by means of imports. We would have to go to the IMF for a loan, and then our sovereignty would be at stake. We would then have to take another look at our domestic economic policies.

It has been said that the various international agreements outlined by the Leader of the Liberal Party the right hon. Member for Devon, North (Mr. Thorpe), never had legislative effect inside this country. Oh, yes, they did. The Letter of Intent, which we had to accept with the 1967 IMF loan, laid down the framework of our economic policy. If we had a crash in the months ahead that is what would happen again. One of the conditions that would be included in the Letter of Intent from the IMF, or from any other fund, would be the cutting of wage inflation immediately. How would the Labour Party react to that infringement of our sovereignty? I fear that we would turn to import controls and a siege economy and that some of the problems raised by the right hon. Member for Brighton, Pavilion (Mr. Amery) would stare us in the face as economic choices. That would not be because of a great political conspiracy but because of the terrible tensions that would break out in this governing party if we had to adjust our standard of living to what we actually earned across the exchanges. That is the kind of danger that faces us if we have a "No" vote or if we pull out of Europe at this moment.

Mrs. Reneé Short

My hon. Friend is painting a black picture of what might happen. I bring him back to reality. The reality of the moment is that our present economic situation is very serious. We have an enormous balance of payments deficit,vis-à-visthe Common Market, of £2,600 million this year. Presumably that debt is being financed somehow or other. How does my hon. Friend think that we shall overcome that difficulty?

Mr. Mackintosh

I am grateful to my hon. Friend for bringing me back to reality. I always regard her as a large chunk of reality. In that way she puts forward her arguments forcefully.

I am looking at the economic fears which would produce a run on the pound. I suggested that money held in this country at short call by our major creditors might be withdrawn if they lost confidence in the future of Britain. That is a separate argument which, I believe, has reality. I hope that my hon. Friend will recognise that. My hon. Friend's argument on the trading deficit with Europe is a different and straightforward point. We must recognise that we have to trade with Europe in or out of the Market. I am interested in the argument of those who say that we have a tremendous trade deficit with Europe but that if we come out all will be well because we can have a free trade agreement with Europe. That is rather a joke. It seems that the one thing it is essential for us to keep is the trading pattern that causes the deficit. But, in reality, we cannot get ourselves into a situation in which we do not trade with Western Europe. We must overcome any competitive problems.

If we pulled out of the Community we might return to buying food outside Europe, which might be more expensive and which might add to our deficit. We have shifted to buying sugar, wheat and other food supplies from Europe because they are cheaper. That shift has saved us money, although it has added to the trading deficitx2014;

Mr. Teddy Taylorrose—

Mr. Mackintosh

I shall not give way, as I know that many other hon. Members wish to speak. I was concentrating on the future of this country if we pulled out and if we could not finance the deficit which we are now facing month by month. I put it to my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) that that is a serious matter. That would land us in having to meet borrowing conditions that would be a greater infringement of our sovereignty than any which has been made voluntarily within the Community.

I should like to take up many of the detailed points that were raised by my right hon. Friend the Member for Battersea, North, but I am conscious that many hon. Members wish to speak.

I turn to my right hon. Friend's general point about sovereignty. That is the issue on which most anti-Market speeches on this subject end. Discussion in this context is always concerned with national sovereignty. I have been in the Labour Party for only 28 years, but I think that I have read most of the original literature that was published before my day. When did the Left wing and the Socialists of this country talk about national sovereignty? When were we brought up to believe in national sovereignty? We were brought up to believe in internationalism.

Mr. Spearingrose—

Mr. Mackintosh

I am rather suspicious when "internationalists" clasp to their bosoms the workers of Chile but reject the workers of Germany and France. I am interested when I listen to them claiming that their hearts bleed for downtrodden workers in the underdeveloped countries, when at the same time they spurn the appeals of Chancellor Schmidt and perhaps the greatest social democratic organisation in the world to stand beside them and join in building a Socialist Europe. I suspect internationalists who love the world in general but not the people sitting next to them, whom they could work with in Europe. It is far more important that internationalism should begin with the countries close to us.

Mr. Frank Dooley (Sheffield, Heeley)

Why?

Mr. Mackintosh

Because it is tension in this area that has caused wars over the years. Where has the cockpit of disaster been for the world this century except in Western Europe? That is where we must work and live together. I repudiate the national aspect of the sovereignty argument. The only consistent person on that issue is the hon. Member for Western Isles (Mr. Stewart). The hon. Gentleman wants national sovereignty for Scotland. He believes that what happens in London does not concern Scotland. But Left-wingers have always said that it is vital that our representatives should be where the decisions are taken. We have said that we do not want national sovereignty for Scotland because decisions will still be taken in London affecting Scottish people, and that we should be here in the Parliament in London to participate. The same argument applies when we consider Europe. Decisions will be taken—

Mr. Spearingrose—

Mr. Mackintosh

It cannot be denied that if we leave the Market decisions will be taken in Brussels which will affect us. Why not be there to share in taking those decisions?

Mr. Spearing

My hon. Friend has taken the point. Of course decisions will be made in Brussels, but can he say whether we can read what our Ministers say in the Council, and whether we can have on record what happens in the Council of Ministers, as we have in this House—and, if not, why not?

Mr. Deputy Speaker (Mr. George Thomas)

I wish to emphasise to those who have already indicated their wish to participate in the debate that every time they intervene they take up debating time.

Mr. Mackintosh

I should like to give way on all occasions out of courtesy, but I appreciate the pressure of time. My hon. Friend the Member for Newham, South (Mr. Spearing) asks where he can read the decisions of the Council of Ministers. I reply by saying that that might happen when he can read the decisions that take place in the British Cabinet, which, in the present situation, may not be too far off. However, in the present arrangements we can at least make our points to Ministers before they go to Brussels to take decisions. We know what is coming up in the Council, but we do not know what is going on in our Cabinet before decisions are taken. The system of government which operates in Brussels is much more open than is the system practised in this country.

I come lastly to the points made about parliamentary sovereignty. My right hon. Friend the Member for Battersea, North went through the list of instruments made in Brussels which were applicable in this country. He reminded me of my teaching days. when I used to hold up the three volumes of statutory instruments passed every year dealing solely with Britain. That material came out of Whitehall, and this House has a Scrutiny Committee to draw our attention to any peculiarities. Exactly the same system applies to Brussels. We have a European Secondary Legislation Committee, which draws the attention of the House to any odd or unsatisfactory elements, and we can debate them on the Floor of the House—indeed, we can debate them before a decision is taken, which is a process that does not always happen with domestic legislation in this country.

I do not wish to push the point too hard, since I am not a great protagonist of national sovereignty. I am a protagonist of parliamentary democracy. I like the parliamentary system. I believe it should be reformed and improved in this country. I also want to see an effective European Parliament. I should like to say to those hon. Members who have been talking about parliamentary sovereignty that on Wednesday night they will find the vast majority in the House voting for a continuation of Britain's membership of the Community. Let them accept that in the name of parliamentary sovereignty—[Interruption] That is the first time anybody has suggested that a majority does not count in this House if it includes all the Opposition and half the governing party of the country. If parliamentary sovereignty is what hon. Members care about, let them abide by the decision which the House will take on Wednesday night.

6.13 p.m.

Mr. Donald Stewart (Western Isles)

Although I greatly enjoyed the speech made by the hon. Member for Berwick and East Lothian (Mr. Mackintosh), I agreed with only 1 per cent. of it.

I should like to deal with one or two points made by the hon. Gentleman, and first to question his curious argument, an argument not confined to the hon. Gentleman, that New Zealand, Germany and other countries want us to stay in the Common Market. No doubt the Germans want us in for their own self-interest, as they are properly entitled to do, but surely that is not an argument on which to take a decision. It reminds me of the cry "The water is shark infested. Come in and help."

On the question of sovereignty, I am very aware that Scotland is a country which has no sovereignty and which has not the ability to come to its own decisions. If the United Kingdom remains in the Common Market the English people for the first time will learn what it is like to be at the receiving end of decisions taken elsewhere. It is a situation which the Scottish people have faced for a long time. The fact that the United Kingdom will have a one-ninth say in decisions will not make all that difference. There were 71 Scottish Members in the House when the decision was taken on the Common Market the majority of whom voted against, but it did not make the slightest difference. That is the situation which the United Kingdom will face if we continue to stay in the EEC.

In this debate we hear the same prophecies that we have heard on many previous occasions. The right hon. Member for Battersea, North (Mr. Jay) said that so far it had been the prophecies of the anti-Marketeers which had been proved to be correct. Yet today we are being presented with the same fraudulent prospectus as before. We are told that we have a market in Europe, but is it Morris or Ford cars one sees in the cities of Europe, or indeed in our own cities? The answer is in the negative. It is foreign cars we see on our streets, and they obviously are enjoying a marvellous market in this country.

I should like to make the point to the right hon. Member for Devon, North (Mr. Thorpe), in his capacity as Leader of the Liberal Party. I believe that Britain's industry is not in a fit state to take on the Common Market and that, unless changes are made in that industry, it will be stamped into the ground.

What are the advantages of remaining in the EEC? Governments of both political complexions have been asked this question time and again, but we have never been told anything specific. We have always had the story of dynamic expansion of our economy, more influence in European affairs and all the rest of it. We have also been told that the Common Market will offer us great horizons. We are given that kind of waffle constantly, but we are told nothing specific.

The right hon. Gentleman the Prime Minister admitted in his speech this afternoon that the renegotiations had not changed the fundamental character of the common agricultural policy. Speaking as a Scot, I regard that as a disaster—although I am aware that England also has its agricultural industry. The fact that the CAP is to remain unchanged amounts to one of the most drastic objections to remaining in the EEC. At present the French have a levy of 17.1p per lb. on lamb. They are our partners, but because of the existence of that levy the market for lamb has dried up in the last month.

The Common Market is opposed to the small farm and that will have a drastic effect in my part of the world. Until the policy was changed by the negotiations carried out by the right hon. Gentleman the Minister for Agriculture, the EEC had laid down that old-age pensioners were not entitled to headage payments. Action which would have a severe effect on our economy is certainly a blow to many crofters in the Highlands and Islands.

The National Farmers' Union announced that it was in favour of our remaining in the EEC. That union is fully entitled to take that decision, but we have often been pestered by Press releases from the NFU and from farmers generally complaining about the fact that since 1971 Common Market edicts have gone against their interests. Complaints have fallen upon us like snowflakes when the farmers have not had Market levies. They cannot have it both ways. However, if they want to stay in, it is up to them.

The renegotiations were a complete charade. If the pro-Marketeers claim that what has been achieved could in the end have been gained in any case, there was no point in going through the whole renegotiation process. I believe that the charge of loss of sovereignty will stick at the end of the day.

We know that nothing has been negotiated on fisheries, which are a vital interest to Scotland. Nearly half the fish —a total of 48 per cent.—landed in Britain comes into Scottish ports. However, in the renegotiation exercise no action was taken on fisheries policy.

It is interesting that the hon. Member for Berwick and East Lothian received most of the barracking from his own side and conversely received support from the Opposition benches. I am surprised at support for the Market shown in any part of the Labour Party. If ever there was materialism writ large, it is in the EEC. a body which is dedicated to the achievement of the furtherance of gross national product. Labour Members are supposed to pay allegiance to the idea of international socialism. As Priestley said at the time of the last debate on this topic: … while all manner of outworn or bogus traditions are allowed to waste time, money and temper, real and valuable traditions—the cheap food policy, for example—may soon be in danger of being scrapped. We might find ourselves in a still more disagreeable country, irritated by all sorts of alien demands, perhaps tied to ruthless big-business types whose methods and values we despise, and forbidden to make any generous social experiments of our own. No doubt that has come to pass. The suggestion was made that we should be tied hand and foot by EFTA agreements. EFTA never made stipulations about the planting of early potatoes or dictated the exact composition of a sausage.

It is argued that the Community is a great force for world peace. Membership of the Community may prevent the Germans and the French from fighting each other, but because of its size it will gradually gather momentum and be beyond human control. It will start flexing its own muscles and possibly become a danger to world peace.

Scotland voted against entry. England did not enter the Common Market as the great adventure which some of its protagonists talk about. It entered the Common Market with the apathy of a very old-age pensioner entering an eventide home. The protagonists argue that we must remain in the Community to survive. That is the spirit with which England entered. I regret that the country lost its nerve to that extent. The majority of Scottish Members of Parliament and of the people of Scotland, as will be proved, are against the Common Market. We shall fight to ensure that in Scotland at least the answer to the question will be a resounding No".

6.22 p.m.

Mr. David Knox (Leek)

As a native-born Scot, though representing an English constituency, I found the speech of the hon. Member for the Western Isles (Mr. Stewart), the Leader of the Scottish National Party, inward-looking and totally foreign to the real nature of the Scottish people as I know them. No nation in the history of the world has been more outward looking than the Scots. No people have looked beyond the bounds of their own country more than the Scots. Yet all that the Leader of the Scottish National Party, who claims to speak for the Scottish people, was able to offer us this afternoon was a mean, narrow and pettifogging nationalism. For myself, the outward-looking nature and attitude of the hon. Member for Berwick and East Lothian (Mr. Mackintosh) far better represented what is best in Scotland and in the Scottish people.

I am grateful to you, Mr. Deputy Speaker, for calling me in this first major debate on the European Economic Community in this Parliament. Having caught your eye this afternoon, perhaps I may confess to having been similarly fortunate during the last Parliament, because I was then able to take part in the debate taking note of the original White Paper on the EEC in July 1971 and again in the debate on the Second Reading of the European Communities Bill in February 1972. I think that it is therefore incumbent on me this afternoon to be brief, especially as so many right hon. and hon. Members wish to take part in this debate.

Unless I am wrong, in this debate, as in the two earlier debates which I mentioned, and also the debate in October 1971, the House will be discussing mainly the advantages and disadvantages of our membership of the European Economic Community rather than examining the small print of the so-called renegotiations. From beginning to end those renegotiations were a sham. There seems to be fairly general agreement on both sides of the House, with one or two exceptions—the Prime Minister is one—that from beginning to end they were a sham, more concerned with the internal affairs of the Labour Party than with the interests of Britain or of the European Economic Community.

Although in this debate many of the arguments will be similar to those expressed in the debates of 1971 and 1972, there is one big difference between then and now. This point was made this afternoon by the Prime Minister, and by my right hon. Friend the Member for Penrith and The Border (Mr. Whitelaw). Then we were discussing whether Britain should join the EEC. Today we are discussing whether we should come out. There is a world of difference between those two propositions.

I was a strong supporter of our entry into the Community in 1971 and 1972, and nothing that has happened since then has convinced me that I was wrong. But even if I now thought that I had been wrong three years ago it would not necessarily follow that I should now be in favour of our withdrawal from the Community—my right hon. Friend the Member for Penrith and The Border made that point this afternoon—because for a number of reasons the decision which we must now take is different from that which we took three years ago.

First, if we withdraw from the Community now it will involve breaking a treaty entered into by the legitimate Government of this country with other friendly countries, acting in good faith. As Mr. Harold Macmillan is reported as having said in Hastings yesterday: I do not think everyone has quite realised that what the referendum is about has to do with something which I cannot find in our history—to denounce unilaterally a treaty we signed three years ago. We used to stand for good faith. That is the greatest strength of our commerce overseas and we are now being asked to tear up a treaty into which we solemnly entered. For myself, I cannot see that such a breach of faith will do other than great damage to Britain. Our friends in the world will be dismayed and some may no longer remain friendly. Our enemies will have strong evidence to support their worst prejudices about us. Both our friends and our enemies will be reluctant to make treaties and agreements with us in the future, and the phrase "perfidious Albion" will have a much stronger ring of truth than ever before.

Secondly, if we withdrew from the Community now, those who have taken economic and commercial decisions on the basis of our membership would think that the rug had been pulled from under their feet. There can be no doubt that our domestic economy would be substantially upset by our withdrawal, because many decisions have been taken by industry and commerce in the past two to three years on the basis of British membership of the Community. Firms have directed their activities on that basis. They have equipped for and geared themselves to a substantial increase in sales to Europe, which may no longer be possible if we withdraw from the Community.

It seems inevitable that if we withdrew from the Community, unemployment, which is already at a deplorably high level in this country, would rise further. It seems equally inevitable that investment, already at a deplorably low level, would fall further. In a word, our immediate economic prospect would be bleak.

I do not wish to overstate this. I do not believe that high unemployment and low investment would necessarily be permanent features of a Britain outside Europe, but I believe that they would be features in the short and medium term in a Britain which had withdrawn from the European Community.

The hon. Member for Berwick and East Lothian spoke of the dangers—if we were to withdraw from the Community—of Arab money being withdrawn from, or ceasing to flow into, London. That undoubtedly would have a serious immediate effect on our economy, on living standards and eventually upon employment.

My third reason for opposing our withdrawal from the Community is that, alone of the advanced industrialised countries, Britain would not have tariff-free access to a large market where uniform rules and standards obtained. That is indispensable if research and development into new technology is to be economic and if large-scale production is to enable economies of scale to be fully exploited. Nor would we have easy access to other markets. Any idea that the Commonwealth countries want to resume special trading relationships with Britain is a delusion. The proportion of our trade with them, which has been declining for a long time, has continued to decline since we joined the Community. For better or worse, the Commonwealth countries have rearranged their trading relationships. They will not surrender new and advantageous trading arrangements with other countries—in many cases with member countries of the EEC—merely to resume less advantageous trading arrangements with us.

My fourth reason for opposing our withdrawal from the EEC is that it would leave us politically isolated. Europe would certainly continue to develop without us. She would show little or no interest in us. We should have little or no influence on her, though we should undoubtedly be greatly influenced by how she developed and what she did. The Commonwealth countries would show little interest in us, and certainly it would be a declining interest. The United States would show little or no interest in us, because we should be a small, economically weak and politically insignificant country. We should have few real friends in the world, our breach of the treaty having lost us so many. We should have little influence in the world. We should be left to go it alone in a world where those who go it alone are in a straitjacket determined by others, but over which they have no influence.

In this view I am glad to say that 1 have, or at least I had, the support of the Secretary of State for Industry. As the right hon. Member for Bristol, South-East (Mr. Benn) said in a letter to his constituents dated 14th November 1970: Of course we can stay out and stand alone, hut we will still find out that European, American and Russian decisions will set the framework within which we would have to exercise our formal parliamentary sovereignty. So much for this great surrender of sovereignty in which our membership of the Community is supposed to result.

I could list many other reasons why I think that British withdrawal from the Community would be very much against our best interests, but time does not allow that to be done. Suffice it to say that however strong the reasons were for Britain's joining the Common Market three years ago it seems to me that the reasons for our continued membership today are very much greater.

I hope that I may be allowed to make one final point not directly connected with what I have been saying but concerning the European Parliament. I have two pleas to make in this respect. First, I hope that once this referendum is out of the way the Labour Party will start to send representatives to the European Parliament as a temporary measure. My second plea—and the more important one—is that we move quickly towards a directly elected European Parliament.

I know that that is really a matter for the European Parliament itself to decide. I hope that Britain's representatives there will push for it at all times, but they can be helped by the Government and by the Government's attitude. It seems to me important that we should have a directly elected European Parliament, and with pressure from the British Government, and with the assistance of British representatives at the European Parliament, there is no reason why we cannot in the fairly near future have directly elected representatives to that assembly. Apart from anything else, a directly elected European Parliament might provide some reassurance for some of the concern that has been expressed about loss of sovereignty through our membership of the Community.

6.33 p.m.

Mr. Roy Hughes (Newport)

As a small boy attending Sunday school in the valleys of South Wales I was told the Old Testament story about deceitfulness. I remember the words: The voice is Jacob's voice, but the hands are the hands of Esau. Likewise with the Government's White Paper. The name on the front is that of the Prime Minister, but the contents could well have come from the Labour Committee for Europe. It is no wonder that in a picture inThe Timeson 27th March one saw a smirk on the face of the Home Secretary as he sat behind a table with his friends on the other side of the House.

I am the first to admit that certain minor concessions have been made as a result of the renegotiations, but they have been turned into major triumphs. They are hardly the crock of gold about which the Foreign Secretary spoke so descriptively a few weeks ago. The function of the research department at Transport House is not to undermine Labour Cabinet Ministers, but there is no doubt about its opinion of the renegotiations.

I appreciate that we have had a sweetener with regard to sugar, but the beef concession is only temporary. The fact is that even in 1974, when world prices were abnormally high before the onset of world recession—and I confirm that to the right hon. Member for Penrith and The Border (Mr. Whitelaw)—butter, cheese, beef, mutton and lamb could all be bought more cheaply outside the Common Market. Early in 1975 the world price of maize, the most important animal feeding stuff, was no longer above the EEC price.

Likewise, as my right hon. Friend the Member for Battersea, North (Mr. Jay) said in his most lucid speech, the world price of some types of wheat fell below the EEC price and therefore levies were imposed. Even before that, in 1974, there was a ban on beef imports, because beef could be purchased more cheaply in world markets. Butter is a basic commodity in this country. If we remain in the Community the price that we shall have to maintain will increase from about £550 a ton now to nearly £1,000 towards the end of this decade. Similar figures could be quoted for cheese, mutton and lamb.

The essential point to bear in mind is that these levies and taxes are imposing a heavy burden on ordinary families. The right hon. Member for Brighton, Pavilion (Mr. Amery) was concerned about this. He spoke about cheap food, but the cheap food that we have enjoyed in this country for about 130 years has been of considerable benefit to ordinary families, and it is they whom the Labour Party is in business to serve. What is more, these extra food costs have the effect of increasing labour costs in this country and making our exports less competitive in world markets.

At the end of the renegotiations, the iniquity of the CAP remains. It is a system which bases the price of food on what it costs to produce it on the most inefficient farm in Europe. How can anyone justify the mountains of butter and beef and now the lakes of wine which have resulted from this policy? What about denaturing and colouring essential foodstuffs blue, and green, and so on, to make them unfit for human consumption and fit only for animals? This is what the CAP is all about. We have had the farce of thousands of tons of butter being sold to Russia at 7p a pound—and this by an organisation that was established to challenge Communism. Even today the CAP accounts for 75 per cent. of the EEC budget, and a Labour Government should not have agreed to its retention.

We have had three years of the Treaty of Rome, and the ordinary people of this country have fared badly as a result. Yet at the end of these renegotiations—this was confirmed by my hon. Friend the Member for Berwick and East Lothian (Mr. Mackintosh)—not a dot or comma of the Treaty of Rome has been altered.

People have been brainwashed by the media for a long time—told there is no future for us outside the Community—but they have been remarkably resilient, showing no enthusiasm for the Common Market. The people of Norway were told exactly the same—that the world would fall in on top of them if they did not join but since it took its referendum decision against membership Norway has not looked back. Its economy is booming like never before. Think, by comparison, of the vote in Denmark, and all the demonstrations in that country calling for a new referendum with a view to withdrawing from the Common Market. That is the essential difference.

Mr. Kenneth Lomas (Huddersfield, West)

Does my hon. Friend agree that if he is arguing for a referendum in Denmark to take that country out, he should also argue for a referendum in Norway leading to a reconsideration which would take Norway in?

Mr. Hughes

Not even the protagonists of Norway's entry will utter a word on that subject. They are resigned to the situation because the people know that Norway is doing so well outside—contrary to what they were previously told.

We need to be free to make whatever agreements we can with any country in the world. We have more coal and oil than the rest of the Common Market, and there is no guarantee even in the White Paper that we shall be allowed to sell our oil at different prices to the Common Market countries. We should no longer be free agents, even with this new-found wealth from the North Sea. Our membership is already draining away the life blood of our industry and commerce. The figures for January and February of this year given by the Secretary of State for Trade show that we now have a non-oil deficit with the other Common Market countries running at an annual rate of £260 million. Our whole trade pattern has been distorted.

I represent a steel constituency. I have read inSteel News, sent to me by the British Steel Corporation every month, that for every ton of steel that we export to Europe, Europe exports 17 tons to this country. In the great Llanwern steel works on the borders of my constituency there is talk of redundancies and short time. That is what the Common Market strategy has meant to the BSC, particularly to the steel workers in Newport. As for investment, there is a net outflow to Europe from this country of crisis proportions. Little is coming back in return. We badly need this investment in British industry.

Another interesting topic is that of value added tax—apparently the brain child of a French civil servant. I am getting a lot of petitions in Newport about multi-rate VAT. This, too, is very much part and parcel of the Common Market set-up. According to the recent study presented to the Strasbourg Parliament there could well be a new attack on small businesses in this country. The proposal is to make returns obligatory on a turnover of £1,600 instead of £5,000. It is also suggested that there be monthly instead of quarterly returns. This could ruin many small businesses. That is the reality of VAT—not the crocodile tears shed by the Shadow Chancellor.

We must withdraw. That would be a victory for Britain, not for Moscow, as the right hon. Member for Brighton, Pavilion said. We could make new trading arrangements for the removal of tariffs both with EFTA and with the Common Market, and with the latter we could reverse these new levies.

But first we must win the referendum. It is sheer hypocrisy for those in authority to pretend that it is being conducted fairly. For example, there is no plan to restrict expenditure, which means that there will be a tremendous advantage for the pro-Marketeers, who are supported by big business. Second, there are to be three pieces of literature sent to each elector, two of them putting the pro-Market case. Third, when it was suggested a week or so ago that the Labour Party machine should be used to support the anti-Market cause, this seemed to be regarded as the ultimate in sin. Yet we know that the Conservative Party machine has been used for years to put the pro-Market case. Then there is the full-scale prejudice of the Press in this matter.

The latest example came when I tried to intervene in the Prime Minister's speech today to ask about the gag on dissenting Cabinet Ministers. He refused to give me an answer, but I understand that a written reply has been circulated to the effect that they cannot take part in parliamentary proceedings in this matter.

Mr. Skinner

This is a very important point. Perhaps my hon. Friend has not been able to see that written reply, which, as usual, has been sent to the Press first, for it to read and digest. He will find that it makes it clear that it is suggested that Ministers will be prevented by the Prime Minister from speaking on this matter—the same matter on which he said that there would be freedom for everybody to say exactly what he liked. What is even worse is the fact that despite the devastating trade figures announced by the Secretary of State for Trade—£2,000 million for 1974—my right hon. Friend and others like him who are against the Common Market will be prevented from answering Questions from hon. Members on matters like this. They will be transferred to others in the Department, or to other Departments. That is an absolute disgrace. Does my hon. Friend agree—I am certain he does —that in this situation it would do a great service to this place and the anti-Market cause if some of those Ministers stood up in the House to make speeches on the matter and to answer Questions as well?

Mr. Hughes

That is an outstanding example of the hypocrisy to which I have referred. The two Ministers most intimately connected with these matters—the Secretaries of State for Trade and Industry—are both dissenting Cabinet Ministers. They are opposed to our continued membership.

The right hon. Member for Sidcup (Mr. Heath) had it right when he called for the full-hearted consent of the British people, but that was only theory; he never put it into practice. The people of this country, despite all the brainwashing to which they have been subjected, have no enthusiasm for this venture. We know that on Wednesday night the Prime Minister will win the vote in the House, but we shall win the vote in the country, despite the fact that we have our hands tied behind our backs.

6.50 p.m.

Mr. Teddy Taylor (Glasgow, Cathcart)

The Prime Minister struck a chord with the whole House—as did my right hon. Friend the Deputy Leader of the Opposition—when he said that the kind of decision we are having to make today is quite different from that which we made in 1971. That is absolutely true.

Firstly, there has been the passage of time. Who would have thought that the hon. Member for Berwick and East Lothian (Mr. Mackintosh) at that time would have been arguing for our continued membership of the Common Market in case the Arabs would take away their hot money from London? At that time there was no talk of crisis or of gold being taken away by the Arabs. The talk was of growth, of expansion, of industry going ahead, booming, and so on. It would have been astonishing if the hon. Gentleman had made in 1971 the speech that he made today.

Again, it was astonishing to hear reference made to the valuable Commonwealth preferences, which we can now no longer get. In 1971 we were told that the preferences were of little value, were irrelevant and were disappearing anyway. Now we are told that we must stay in the Common Market because we shall never get them back. So we have had the passage of time.

The second thing that we have had is the pledge by the Government to have a referendum and abide by the decision. The third major change, which is vital, is that the economic situation here has become much more serious. The fourth new factor is that we have had renegotiation. The fifth new factor, and an important factor, is that we are members, and not seeking to be members. It is right, therefore, to consider whether these factors in themselves justify our changing our mind and beginning the process of negotiating our way out.

I look first at the question of the passage of time. There has certainly been a dramatic change, because undoubtedly the bright promise of 1971 has not been fulfilled. I appreciate that it is impossible to apportion blame or to say how much of the deficit is due to our membership of the Common Market or how much worse it would have been had we not been a member, but what we can say and what we know is that the promises, pledges, estimates and assessments made in 1971 have not materialised.

First, we have the question of the balance of payments. We were assured that there would be a sustained and substantial improvement. As has been mentioned by several hon. Member today, we all know that the situation is infinitely worse. With Europe we have moved from a non-oil credit of £132 million in 1970 to a non-oil deficit of £1,800 million in 1974—a catastrophic reversal of the situation. This is a fact; it is not an assessment.

Secondly, we had the pledge, promise or assessment that membership of the Common Market would somehow revitalise industry. I can remember watching on the television screen one of the great barons of our great motor industry, of the British Leyland Motor Corporation, and hearing him saying that things were difficult because we were not a member of the Common Market, that we should join, and that then the situation would be revitalised and BLMC would be one of the greatest companies in Europe. Since then BLMC, unfortunately, has practically gone bust. There may be other reasons for that, and I am not wishing to apportion particular responsibility, but it is a fact that those business men who, with glowing promises and commitment, said that we must join Europe to encourage our industry and to revitalise investment and jobs, were wrong. This has not happened.

Thirdly, we were told that there would be little impact on food.

Mr. Adley

Has my hon. Friend actually heard that the oil crisis has not helped those who make motor cars?

Mr. Taylor

I accept that it has not helped those who make motor cars, but it was put to us that Britain was in a worse position than that of other countries because we were not a member of the Common Market and that if we joined our net relative position would improve. However, the facts show that our position has deteriorated to an alarming degree. People have not stopped buying cars. They have merely tended to buy different cars, and people abroad are tending to buy fewer and fewer of our products. I accept what my hon. Friend says. But we cannot say in any way that this is a direct result of membership of the EEC. All I would say is that we know that the assessments and hopes advanced by the Common Marketeers have not materialised.

Thirdly, we were told that there would be little impact on food. We know that prices have soared. World prices last year, over a particular period, were very high indeed. In addition to that, however, we know that world prices are declining sharply at present. Unfortunately, we cannot obtain an advantage from that. I notice that the hon. Member for Berwick and East Lothian and some of my right hon. and hon. Friends have been talking less about what the Common Market means in terms of food prices. But what precisely have we done in charging £51 million in levies on imported food? Do we need to charge £51 million if the price in Europe is the same as the world price?

When we find Ministers answering Questions—I received such an Answer on 24th March—saying that it is true that the figures show that world food prices have gone down but that, unfortunately, comparable information for the EEC is not available, at that moment we know what is happening. We find, therefore, that the bright promises of 1971 have not been fulfilled.

I am saying all this simply to suggest that we should treat with some reservation the idea that if we leave the Common Market we shall find major economic problems, massive unemployment and a sterling crisis. We should think very carefully before accepting that view.

Another new factor is the renegotiation. We have to consider that this factor has altered the position since 1971. Frankly, I think that everyone must accept that the Government, in their White Paper, have certainly vastly overstated the achievement. To me it is simply a propaganda document. Despite the assurance that a major change in the CAP would be vital if Britain were to remain in the Common Market, we have had no change whatsoever. We have had certain minor adjustments, which have been disadvantageous to the European agricultural community—I am sure that our farmers will be grateful—but the main concern of the Labour Party when in Opposition was the effect of the CAP on the consumer, and not its effect on farmers. On this matter we have had no major change whatsoever.

We have had the suggestion previously that the contribution system must be fundamentally changed, and the assurance in the White Paper from the Prime Minister that somehow in certain circumstances we could get a rebate of £125 million. I should not be greatly impressed if I saw 5p being taken off the price of a packet of washing powder if I had not the slightest idea of what the powder would cost. That is the situation in relation to our rebate. We have the assurance that somehow £125 million will come off. I have asked detailed Questions of the Chancellor of the Exchequer as to precisely what would be Britain's net contribution which would trigger a rebate of £125 million. I was told that this could not be calculated. Are the Government suggesting that they came to an arrangement or an understanding, or signed an agreement, with Europe to have in certain circumstances a rebate of £125 million without having the slightest idea of what kind of net contribution would trigger off that rebate?

This afternoon I again asked the Prime Minister whether he had any kind of assessment of the net contribution which would trigger this rebate, and we had the kind of reply which indicated that this was not a matter on which details could be given.

The Labour Party, when in Opposition, pledged that we had to have firm changes in the rules of the Community which would ensure that we had control of regional, fiscal and industrial policies in the United Kingdom. All that we have had in the renegotiation is an assurance that, having looked at the Community, the Government find that things are not so bad as was once thought, that the Community is flexible and that all will be well. However, I must say that I regard the renegotiation as a farce. It would be safer if we disregarded it for practical purposes in considering the question before us at present.

What we now have to consider is whether in all the circumstances it is better to remain in the Common Market or to start the lengthy process of negotiating our way out. I believe that we are deluding ourselves if we consider that this is anything other than a marginal decision in relation to the magnitude of the problems facing Britain. As the Prime Minister and the Deputy Leader of the Opposition said, if we cannot contain inflation, if we cannot be competitive, and if we cannot deliver the goods, we face disaster whether we are in or out. What we have to do is to consider whether, on balance, membership is likely to help us or to hinder us in facing our present grave economic situation.

There are several things that we must do to deal with the present economic crisis. In all of these there is a clear indication that we would be better not being a full member of the European Economic Community.

First, the balance of payments is crucial. We must reduce the total, and try to make ourselves more competitive internationally. Our contributions to the Common Market will undoubtedly have a marginal impact, but it will be an adverse one. It is all very well for hon. Members to talk about the advantage of loans and grants from the EEC, but all the documents show that net we will be paying in to the EEC.

A factor which is just as crucial is that we must minimise the cost of living in Britain. Wage inflation is our most terrifying problem. Nothing is more likely to add to inflationary pressures than high prices for food and essential commodities in Britain. Britain is about the largest net importer of food in the world. On the basis of what has happened in the past few months, and of levies we are charging on food, there seems little doubt that being a member of the EEC will add to our basic cost of living and have an effect on inflation.

I am very concerned about what will be the effect on prices of food here if we move towards metrication of our essential foodstuffs. The average housewife lays more of the blame for inflation at the door of decimalisation than most other factors. One of the basic rules of the Common Market is that, as from a certain time, a country must not discriminate in relation to metrication. This, with other factors, will undoubtedly have an impact on our cost of living.

We must make a success of our oil exploitation. Unless we can have economic and commercial success in exploiting oil we shall face a desperately serious situation. We have invested great sums in oil. We have borrowed countless millions on the strength of oil revenue. There is no guarantee that oil will be an economic success. It is vital that we take what steps we can to preserve what freedoms we can to ensure that oil will be a success. Unless we can agree a minimum price for oil with other nations a collapse of oil prices in the Middle East may result in our oil becoming virtually valueless. We could not reach such an agreement if we were to remain a member of the EEC. As I understand it, if we remain a member of the EEC it will not be possible for us to supply our oil cheaper to British industry than we supply it to Common Market States. I hope that the Government will make a clear statement on this issue, if there is any doubt about it.

In addition, it is important that we preserve the maximum freedom of action in regional and other policies. The Government have said—I believe them—that the Common Market is happy about what we are doing in relation to regional employment premium and investment grants. Surely the essential factor about our regional policy is that it must be changed dramatically from time to time to deal with a different situation.

For example, we are becoming overloaded with grants, loans and assistance in the development districts. Instead of preserving development districts in a cocoon of inefficiency, it would be more helpful if there were to be a tax concession in the development districts. If we decided that we wanted to move from a system of grants to a system of tax concessions, could the British Government make such a change without securing the agreement of the EEC?

It is vital for Britain that we maintain investment and decision making in Britain and not allow it to go elsewhere. For centuries we in Scotland have been fighting against the pull to the centre of the South. We have had effective weapons for doing so—IDCs, regional grants and aids, and the virtual direction of Government Departments to try to prevent unnatural economic movement. Within a united Europe the pull to the centre must be stronger, and the weapons we shall have to fight it will be less effective.

We should be considering this issue from the longer-term point of view. I believe that it will be bad for Britain and, more important, bad for the Common Market if long term we remain a member of the EEC. As a member of the EEC we shall be a festering sore within the Community, making it more difficult for it to go ahead with its development and progress as it would wish. The basic reason for this is that our long-term interests do not coincide with those of the nations of Europe.

I fully support the NATO organisation. It is a splendid organisation, which works well, because our interests coincide with those of Europe in that sense. We all have a common fear of Communist, Russian expansion. There are other areas in which we cannot have unity of purpose if our interests do not coincide. Surely it must be clear that long term the interests of Britain do not coincide with those of Europe.

Mr. David Crouch (Canterbury)

My hon. Friend has been weighing the advantages of staying in the Market against the catalogue of disadvantages which he has given. He seems to have overlooked the fact that Britain is a manufacturing nation selling manufactured goods abroad. What has he to say about the advantage to us of being in the Market and selling into Europe which is a market of 250 million people—a home market in a tariff-free situation? Will he comment on the disadvantage that would arise if we were to leave the EEC?

Mr. Taylor

Any disadvantage which would arise would depend entirely on the arrangements which were made for our trading with the EEC and other countries. The effect of the 7½per cent. average tariff imposed under the common external tariff has been more than doubly offset by the movements of sterling in relation to European currencies over the past six months. So I believe that this is an important but not an overwhelming factor.

Looking to the future, our interests do not coincide with those of Europe. Britain requires a minimum and relatively high price for its oil. The interests of Europe are against this. European countries require and want the lowest possible price for oil because they are net importers of oil. We shall be net exporters.

Mr. Nicholas Fairbairn (Kinross and West Perthshire)

In that case, to whom are we to sell our oil if we require a high price and the European countries want oil to be at a low price?

Mr. Taylor

As my hon. and learned Friend must be aware, international discussions are proceeding on whether we should have a minimum price for oil. If Britain takes part in those discussions in its own right, it will be in a stronger position than if the negotiations are carried out by a united Common Market in which we are one voice and our interests are very much in a minority of one. This is a crucial international issue, as we saw when Secretary Kissinger came here and went to Wales to meet the Secretary of State for Foreign Affairs and discussed the very question of how we could get a minimum price for oil.

If my hon. and learned Friend will not accept that I am sure he will accept, although he represents an agricultural area, that our interests on food prices do not coincide with those of the European countries. We require and would like to have the lowest possible price for our food. The interests of Europe are quite different, with the exception of one or two areas of one or two countries.

The third respect in which we are different is that, as my hon. and learned Friend and others will appreciate, before joining the Community the countries of the EEC essentially traded mostly with themselves, whereas we essentially have been a world trading country.

Fourthly and just as importantly in the harmony of interest is that we have a long-term historic tradition of democratic control and decision making, and although certain European countries follow the British pattern they do not have the long-term commitment to democratic control, nor is this seen in the institutions of Europe. Therefore, whether looked at for the short term or for the long term, such a common enterprise cannot succeed when the interests of Britain and those of the other member States are not identified.

The final consideration, as has been argued, is that by deciding to leave we are not just deciding to break a trading arrangement but we are breaking a treaty. This is important and must be carefully weighed. On the other hand, as members of a democratic party and representatives of the people we must remember the obligations we have to the electors who entrust sovereignty into our care. I believe that we are entitled to use that sovereignty as we wish, but not to surrender it, as was done, without the specific permission or specific agreement of the British people.

I prefer to look forward to a future in which we trade with Europe and have friendship and co-operation with Europe. I do not look forward to a future in which we are absorbed by the EEC in a united Europe.

7.10 p.m.

Mr. Kenneth Lomas (Huddersfield, West)

I am very glad to be called immediately following the speech of the hon. Member for Glasgow, Cathcart (Mr. Taylor), because it was a pleasure to hear him speaking about oil without once mentioning "Scottish oil", because the oil off our shores belongs to the whole of Britain.

On Wednesday I shall vote for Britain to stay in Europe, and I have already advised my constituents to do the same when the referendum is held in June.

It is not in the make-up of my right hon. Friend the Prime Minister to take "No" for an answer. I always believed that he would come back with the right terms at the right time. I remember saying on 25th October 1971 that I agreed that the terms were not ideal and that they could have been improved under a Labour Government. I believe that they have been improved. I do not claim that we have achieved everything that we set out to do in our February 1974 manifesto, but many of the objectives that we set out to achieve have been obtained in full, and we have made considerable progress on the others.

What has to be remembered, and what is sometimes ignored totally in this House by many of my right hon. and hon. Friends, is that the EEC is an evolving organisation. In the years that lie ahead, with Britain inside the Community we shall have opportunities to press for the fulfilment of our aims and desires.

My one regret in the course of the past two and a half years or so is that the Labour Party, of which I have been proud to be a member for more than 35 years, has not been represented at the European Assembly. If we had been represented there, I believe that we could have influenced the course of many decisions taken there.

As for the common agricultural policy, of course much remains to be done. No one believes that it is perfect. No one believes that it is quite right. My right hon. Friend the Minister of Agriculture, who at one time was an anti-Marketeer, has now come round, having seen the flexibility of the common agricultural policy. We have succeeded in keeping price increases below cost increases, and we have brought benefit to the consumer and the taxpayer.

On 18th December last year, my right hon. Friend the Foreign and Commonwealth Secretary said that Britain's trade deficit with the EEC was not a direct result of our membership of the Community. He went on: … the only deduction one can draw is that membership of the EEC has probably done very little to alter the balance one way or the other."—[Official Report, 18th December 1974; Vol. 883, c. 1570.] Earlier, he had pointed out that Britain's non-oil trade gap with the EEC increased five-fold between 1971 and 1973 but that during the same period it increased threefold with the EFTA countries, by 13 times with the Commonwealth and by 17 times with the United States of America.

In the renegotiations of the past 12 months, we have, thanks to the tremendous efforts of my right hon. Friend the Minister of Agriculture, been able to make the CAP more flexible, with special reference to beef, sugar and butter, and we have now received assurances that there will be guaranteed access for up to 1.4 million tons of sugar from developing countries. This is of tremendous importance to the Third World.

I challenge any of my hon. Friends to say that they disagree with me when I assert that from Canada to Australia and from India to New Zealand I do not know of one major Commonwealth country which believes that we should withdraw from the Common Market. That is a great tribute to my right hon. Friend the Minister of Overseas Development, who happens to be on the wrong side of the fence in this argument. It was her initiative that resulted in the agreements reached which benefited the Commonwealth countries. For that reason, I cannot see why she should be on the wrong side of the fence and why she should not be with those of us who support Britain's continued membership of the EEC.

I want now to take up one of the arguments of the hon. Member for Cathcart with reference to the financing of the Community budget. We as a Government have succeeded in obtaining for Britain a refund—

Mr. John Ovenden (Gravesend)

Under conditions.

Mr. Lomas

Under conditions, of course. But we have obtained a refund of £125 million. What is more, for all practical purposes the idea of economic and monetary union has been abandoned. Therefore, we have moved in that direction in line with our February 1974 manifesto.

I do not know how many of my hon. Friends came to this House only recently and perhaps did not hear the 1971 debates. But I wonder whether they recognise the progress that this Labour Government have made in 12 months in the renegotiations in which they have been engaged.

Mr. Ovenden

is my hon. Friend aware that any refund that we may obtain from the EEC is dependent on this country having a continued per capita gross domestic product of only 85 per cent. of the Community average? Is he implying that this country has to stay in a permanent state of relative poverty in order to avoid paying an unfair proportion of the Community budget? It follows from the agreement which has been reached that, should we achieve a reasonable state of prosperity vis-à-vis, our partners, there is no limit to the unfairness of the contribution that we shall be asked to shoulder.

Mr. Lomas

No, I do not think that that is right. I believe that our contribution to the Community is something that is to be negotiated and settled in that way.

Mr. Spearing rose—

Mr. Lomas

No, I shall not give way because I have given Mr. Speaker an assurance that I should take only 10 minutes.

In our renegotiations—this has come from the Council of Ministers, and it has been endorsed by the Prime Minister—we have been successful in ensuring the retention by the British Parliament of those powers over the British economy which are needed for the pursuit of effective regional, industrial and fiscal powers and policies. Moreover, we have succeeded, in accordance with the manifesto on which all of us on this side fought the elections of February and October 1974, in ensuring that there will be no harmonisation of value added tax.

As I have said, I acknowledge that it can be said in criticism that we have not achieved all that we might have wanted. However, when I read in theFinancial Timesof 13th March an article that we have been successful in obtaining about 80 per cent. of our renegotiation demands, I am pretty happy with the 80 per cent. If I could get that as a trade union negotiator, I should be happy and proud of achieving something worth while.

In my view, it would be wrong—some hon. Members on the Opposition side are nit-picking here—if we were to go against the EEC because of the small increase in food prices which has come to this country as a result of our membership of the Community, just as it would be wrong to assume that outside the Community we could stand alone in splendid isolation or that we could reach a further agreement with the EFTA countries which would be beneficial to us all.

It must be remembered that the EFTA has a market of only 40 million compared with the EEC market of about 200 million. In my constituency of Huddersfield, West, that is of vital importance for industries such as textiles, chemicals and engineering. [Interruption.] If I may, I shall ignore the mutterings coming from the lady who sits on the NEC, my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short), and I shall quote again from what I said on 25th October 1971: I represent Huddersfield, West, a constituency with a great number of textile workers within it. There can be no doubt and no argument that the trade union which represents the woollen textile workers m ray constituency is in favour of going into Europe and that the management of the woollen textile industry is in favour of going in. Both union and management recognise that if we can break through the tariff wall there is scope and opportunity to expand and develop our trade in quality goods. I believe that to be true now.

If we withdraw from the Community, after two and a quarter years of membership, the net result, I believe, will be higher unemployment, accelerating inflation and a loss of financial confidence in this country as such. But, more important, it will in the long term mean that Britain will become a declining influence in the affairs of the world.

My father fought in the First World War, and I fought in the Second World War. My object in life is the maintenance of peace. I believe that Britain inside Europe, having lost an empire and having lost the imperial power it once had, can be a force—a force for prosperity, a force for stability and a force for peace—and peace is my overriding concern.

On 25th October 1971—it is opportune on some occasions to quote one's own phrases because they are sometimes better than the phrases of others—I expressed the belief that the way to shape our destiny and the future of Europe is for us to be inside."— [Official Report, 25th October 1971; Vol. 823, c. 1392–4] For those reasons and convictions passionately held, devoutly held, I have said to my constituents—rightly or wrongly, whatever my party may decide locally or nationally—that in the interests of peace we should remain in Europe and we should vote "Yes".

I conclude on this note. When I spoke to Social Democrats—I am talking here not of extremists of either wing in Europe or elsewhere, but of those I know from my six years of service on the North Atlantic Assembly—they said to me "For God's sake, come in. We want you in because we believe that if we can have Britain in Europe we can begin the first step towards creating a united Socialist Europe".

That is what I want. But above all else, in politics and in everything, what I am after is the bringing together of nations, the bringing together of people so that we shall never see war in Europe again, but shall see peace, stability and prosperity for all those of our fellow men who live in that part of the world.

7.27 p.m.

Sir Anthony Meyer (Flint, West)

I shall take up much of the theme with which the hon. Member for Huddersfield. West (Mr. Lomas) concluded his moving speech. I wish to speak rather quietly tonight, across the great divide, to those hon. Members on both sides who genuinely believe that to pull out of the EEC would benefit this country and its people. I shall address myself for the most part to the moderates on both sides —in particular, perhaps, to my hon. Friend the Member for Glasgow, Cathcart (Mr. Taylor), who made what I regard as outstandingly the most able speech on the anti-Market side in the debate so far.

I shall address myself to all those who pursue the same fundamental aims as are pursued by those of us who support our remaining within the EEC. I shall not attempt to persuade the doctrinaires on left or right who regard our membership as an obstacle to the accomplishment of their political aims. They are, of course, entitled to their view, but it is not really possible to have a worthwhile dialogue with them.

I believe that the great majority of hon. Members on both sides of the argument, as on both sides of the House, desire, as passionately as any of us do, that the British people should be enabled to raise their living standards, to improve their social services and their environment, and to exert an influence in affairs in order to play a worthy part in making this small world of ours a better place for all its inhabitants.

There was plenty of room for argument about whether we were more likely to achieve those aims by joining the EEC or by staying out. For my part, I have never had the slightest doubt where the balance of advantage lay. I have felt like this ever since 1952 when this country turned down the opportunity to take part in the European Defence Community. The arguments have changed a bit since 1952, of course, but the underlying issue remains the same. I believe that it comes through more strongly today than it did in 1952, 1957, 1962, 1967 or 1970, but it is the same argument. It is that Britain will be richer and stronger and safer as part of a fairly cohesive group than she will be as a freelance.

It is the old argument of collective security, which used to appeal so strongly to the Labour Party once upon a time. I remember, as a schoolboy pre-war, being very much influenced by publications of the Left Book Club and pamphlets poured out notably by the right hon. Member for Ebbw Vale (Mr. Foot) arguing passionately in favour of collective security. Those who reject this argument do so on the ground that Britain could do much better for herself by, as it were, shopping around—by seeking military security here, food supplies there and raw materials somewhere else, and a market for exports all over the world. I believe that that kind of bachelor existence is not a suitable policy for a country so little able to feed itself—a country whose dependence on trade leaves us so grimly narrow a margin of safety—nor yet for a country so reluctant to will the means for her own defence as Britain is today.

None the less, the idea of going it alone has great emotional appeal. It appeals to the folk memories of 1940 and to the fondly nurtured illusion that Britain, if not the head of a great empire, is still the centre of a world-wide Commonwealth. Against this "gut" feeling it has been an almost impossible task to bring the British people to accept their newly changed status and to go on from there to accept the need for a much closer and more systematic co-operation with Continental countries — Continental countries that had been either our brutal enemies or our unreliable allies in two world wars.

That almost impossible task, begun by Mr. Harold Macmillan, was carried through to success by my right hon. Friend the Member for Sidcup (Mr. Heath), perhaps the greatest constructive achievement of any British Prime Minister in this century. It was not made any easier—one has to say this—by the right hon. Gentleman the Prime Minister, who at every stage deliberately encouraged illusions about Britain's ability to go it alone and tried to whip up the always latent feelings of hatred that every self-respecting Briton feels towards the French and Germans.

Unfortunately, it is easier to get a lot of angry people together to smash something than it is to get a lot of enthusiastic people together to build something, and it takes longer to build than to smash. This is, alas, particularly true of Britain today, where we are all conscious of a sense of national failure, Swept with confused alarms of struggle and flight and casting around for someone to blame.

I beg those reasonable men and women who, because they were against going into the EEC in 1971, now want to take this opportunity of getting out, to pause for a moment and to reflect on the near impossibility of winning support for any constructive initiative in Britain today. In order to get us out of the EEC, they will have to combine with people who have only destruction in mind, and in their attempts to win popular support for leaving the European Community, they will have to appeal to all that is least constructive in the public mind, to illusions of British might, to hatred of all foreigners. In order to win support, these are the emotions to which they will have to appeal—and the conviction that the world owes us a living.

Do they really suppose that if, by calling up such dark forces, they can secure a "No" vote and get Britain out of the EEC, they will be able to win support both here in Parliament and in the country for an alternative constructive policy—always assuming that it will be possible to patch up an alternative with our former European partners, who will always have at the back of their minds the thought "Are the brutish British going to run out on this one, too?"?

I said that I had been a supporter of Britain in Europe since the time of the ill-fated European Defence Community in 1952. The European Defence Community, the European Army—by which those two inveterate enemies of one hundred years' standing, France and Germany, were to integrate their armed forces down to battalion level, as well as those of Italy and the Low Countries—would have been the biggest step of all away from Europe's bloody past towards a happier future. It would have made a European war impossible, because it would have been physically impracticable.

But it led nowhere, and that was for two reasons. First, we British, under, I am sorry to say, a Conservative Government, would not take part, though we could have gone in on any conditions we liked to name. The other reason for the failure of the EDC is even more relevant to my argument today.

The EDC treaty was signed by the French Government in 1952. It was never ratified by the French Parliament. It was not a question of the French going back on their word, for they did not ratify the treaty. There came into being against that treaty an unholy coalition of extreme Left and extreme Right, with a handful of backward-looking members of the Centre to exploit the fears and hatreds that lie latent in the heart of every self-respecting Frenchman—hon. Members will see that there are self-respecting Frenchmen as well as self-respecting Britons.

At that time, I was a junior member of the British Embassy in Paris and I watched fascinated and horrified as the most hopeful and constructive achievement in post-war European history was smashed to pieces by the carefully concerted joint action of two parties that agreed on nothing else—the Communists and the Gaullists—and—and perhaps this, too, is relevant—by the failure of the French Prime Minister of the time, M. Mendes France, for whom I had the greatest admiration, to throw his full weight into support of the treaty that was signed by his predecessor and by his failure, too, to dispel suspicions that he would not be too sorry to see it destroyed.

When that work of destruction was done, what a superhuman task it was to find an even half satisfactory alternative policy, and how much harder still it was in France to assemble a political majority to support that alternative! Indeed, the task cost M. Mendes France his political life. The effort to get the French Parliament to ratify the London and Paris agreements which replaced the EDC destroyed him. To this day, despite the subsequent great achievement of the EEC itself, it has proved quite impossible to take a constructive initiative in the organisation of European defence policy.

So I make this earnest plea to those hon. Members who, though they would like us out of the EEC, none the less want to achieve something constructive: "Consider how hard it has been to achieve the enlarged European Community; however little it may be to your taste, do you really believe, in your inmost heart, that once Britain has said 'No', it will be possible, first, to negotiate and then to get popular approval for an alternative policy that can possibly meet our needs; and, in the next-to-impossible search for such a policy and for such a popular majority to support it, what help will you get from those who are your allies today in seeking to wreck British membership of the European Community but who will be your implacable opponents tomorrow if you yourselves are trying to find a constructive alternative?".

All of us must have been chilled by the now evident inability of the United States to save its allies in South-East Asia from being overwhelmed by the Communists, and still more chilled by the opinion poll carried out in the United States the other day, showing that 60 per cent. of the American people would oppose the use of American forces even if Europe were overrun by the Soviets. This is no time to be wandering alone on the naked shingles of the world. At a time of disintegration, let us not risk the destruction of what we have so little hope of being able to replace.

7.40 p.m.

Mr. Nigel Spearing (Newham, South)

The hon. Member for Flint, West (Sir A. Meyer) has courteously put a popular case. At least I will give him that. However, he has rather unjustly ascribed motives or techniques to hon. Members who are not in favour of our continuing as members of the EEC which have yet to be demonstrated. I am sorry that his standard of courtesy dropped in that section of his speech.

Other points which the hon. Gentleman made have been echoed in many speeches made today and on previous occasions. Hon. Members have said "I have seen the Second World War. My father was in the First World War. We want to prevent a Third World War. Think of the children and of the future. Therefore, let us stay in the EEC." If there is a Third World War—and let us hope that there will not be—it is unlikely to start among the combatants of the First and Second World Wars. It is much more likely to start somewhere else in the world, such as the Middle East or the Far East. It is much more likely to start as a result of a clash between the Third World and developed world interests. It is much more likely to start as a clash between perhaps two interpretations of Marxism. It is much more likely to start as a result of bad calculations and mistakes, rather than the sort of things which we have seen in Europe up to now. That is why I am sorry to hear right hon. and hon. Gentlemen continually repeat this argument.

My opposition to our remaining a member of the EEC is that I am too concerned with world-wide issues and I do not believe that the EEC is. I am not a little Englander. I am not a little European. If anything, I hope to be a big worlder. Many people are against British membership of the EEC for those reasons, and I will come back to them later.

Some speakers have not been able to give us a wide sweep. The Prime Minister has said on many occasions that he does not see this issue in the wide perspective of history. That is a surprising statement. Perhaps the Prime Minister is more concerned with economic issues. Indeed, that is what the European Community is all about. It is an economic community. The word "Community" does not have the overtones that are generally associated with it when it is used on its own. It is an economic organisation. I do not deny that its founders had a vision and a purpose. I do not deny that it is perhaps a good economic arrangement for the original six members of the EEC. Good luck to them.

A major point that has been made—and I think the hon. Member for Glasgow, Cathcart (Mr. Taylor) made it —is that if we remain a member we shall almost certainly be an irritant, because the Community was founded upon the needs of the original members. If we try to graft on to the Community our history, traditions, interests and economic and social structure we shall be a continuing irritant. Perhaps our relationships with members of the EEC would be more wholesome and better if we were not members than if we were in constant argument with them as members.

The origin, idea and justification of the Common Market, because that is what it is, is presumably in tune with the macro-economists who say that a larger market has greater specialisation and a greater market output and, therefore, everybody is better off. That is a facile argument. I should have thought that by now many hon. Members would have realised that it was facile. Many of us do not believe that an increase in gross national product, if it can be measured, which I doubt, is necessarily a matter of progress. If one designs a bigger engine with a bigger brake horse-power or a bigger cubic capacity, as an economic engine, there may be need to redesign the bearings or to have a better lubrication system.

I am convinced that the problems of tomorrow, not only in this country but throughout the world, are not necessarily ones of production and exchange in the economic sense, but of getting people together to co-operate, to consent and to understand rather than be subject to coercion, compulsion and resentment. That is the key to proper economic progress and production. The right hon. Member for Sidcup (Mr. Heath) and his party found that out in terms of consent, style and judgment.

My argument against the EEC is that it represents yet another layer of authority, yet another macro-planning organisation the existence of which is based on false assumptions. With the public having to cope with yet another level of bureaucracy at times of ever-increasing political and social change. there will be greater resentments.

The threat to the House no longer comes from the knock on the door by Black Rod or from the direction of the Palace. There is a much greater threat from behind the Speaker's Chair, in the direction of Whitehall. The executive of the day—and those who sit cm the Opposition Front Bench might be the executive —is the threat to the way we work as a Parliament. It is the threat to consent. It represents the people who are likely to coerce and have a hierarchical attitude. That is the way in which the Commission and the Council of Ministers work. That is the way in which any decent civil service works. In a democratic community such organisations should be at the behest and will of the people. In the Common Market they are not. The Common Market executive in the Commission and in the Council is a supranational authority which is basically hierarchical in nature and in the end requires coercion rather than consent.

I believe that for all those reasons the hoped-for advantages, certainly as far as this country is concerned, will rot away because of the difficulty of communication and of getting the consent which we have been used to in this country.

The second point I wish to make about the Common Market as an organisation is that, clearly, it will, and must, superimpose common conditions throughout its area. In that sense legislation will bypass the House. Even if it does not bypass the House, hon. Members will not be able to influence it sufficiently in the sense of retaining the authority of Parliament. Indeed, it goes further than that, because we are getting and we shall get, whether we like it or not, constraints on the foreign policy of every future British Government if we remain a member. It is clear from the debates which we have had on energy that there will be a common European policy towards energy. It will be concerned not just with making sure that we cannot set the rate of electricity and gas consumption in this country and the amount we pay for it on our own, but with our bargaining in the Middle East.

I am glad that the Ministers of State for Foreign and Commonwealth Affairs are here tonight, and if I am wrong one of them will deny what I am saying when he winds up. Is it not true that a European policy towards energy and our relations with the oil-producing countries will evolve? Is it not true that there are meetings of the European Foreign Secretaries, apart from the Council of Ministers, where matters of foreign policy are evolved and discussed? Is it not true that any future British foreign policy towards power and oil resources will have to be placed within European constraints? Even if this is not formally in any agreement, will it not be the case? It is true in terms of raw materials. The Prime Minister this afternoon told us of his plans for relations with raw material suppliers. He said that this matter would be dealt with at the Commonwealth conference. That is an example of an alternative method of dealing with the question. Does he suggest that it will be dealt with only through the European Community? What part will the Community play in the negotiations? Plainly, there will be a European interest if the European Community remains as it is.

Therefore, it is a question not simply of policy in this country but of the extent to which this country will be able to adopt on any issue and on its merits a policy abroad which it thinks it best to pursue. We do this with individual world organisations. I am not against giving limited sovereignty to an international organisation as long as we can deal with the limits of that organisation on the merits. But if we transfer authority to the Council of Ministers, to a meeting of Heads of State, or to a commission, we are transferring it to another Government, and that is a quite different matter. Many hon. Members who talk about giving up sovereignty and maintaining world peace tend to forget that.

Clearly, if the present trends continue, the European Community will develop into another worldbloc. Perhaps hon. Members opposite like to think in terms of worldblocsand of running to mother hen, and so on. But the interests of world peace are not necessarily helped by countries moving into self-contained economicblocs. It is arguable that the existence of a European economic community based on competition—the capitalist system—makes the breaking out of a third world war more likely than if it was completely free of an economic system. But Article 3 of the Treaty of Rome firmly bases the Common Market on competition—a competition of labour and capital.

Whether hon. Members like it or not, the EEC is, to some extent, coloured pale blue. The hon. Member for Blackpool, South (Mr. Blaker) looks surprised. I should have thought that we had to accept that. Therefore, whatever the feeling of the Government or of this House, the ability of this country to put forward a specific attitude on world affairs will be coloured and influenced by membership of the Community.

I come to the question of the authority of this House. Even if it could be proved that there was an economic advantage in the Common Market, which I do not think there is, it would be a very doubtful advantage as against giving away some of the historic qualities of this House. I would defend that statement on a public platform. It is clear that the difficulties in the Community are primarily not economic but matters of consent.

Suppose we have to say to our constituents "We cannot deal with that because Section 2 of the European Communities Act applies and the House can do nothing"; or, if there are direct elections to the Assembly—as there may well be, because the last Paris communiqué makes it clear that if we stay in there will be direct elections before long—suppose I had to say to my constituents "If you want to make your influence felt, see your Member for Europe for North-East London". What will be the position of hon. Members and of this House?

Some people say that sovereignty has gone from this House already, that it has gone to Whitehall. If that is so, we should get it back. That is no argument for letting it go entirely to Brussels. But if we are in this position the power of the House has gone. It would go with economic and monetary union. Regulation 907/73 makes it clear that the European Monetary Co-operation Fund is moving towards the progressive harmonisation of the Member States' economic policies". Paragraph 14 of the Paris communiqué makes it clear. It states on the question of progress on the road to EMU that the Heads of Government affirm that in this field their will has not weakened and that their objective has not changed since the Paris Conference". That is in direct contravention of what my hon. Friend the Member for Huddersfield, West (Mr. Lomas) has said. Mr. Ortoli, the President of the Commission, said in a speech on 25th February that progress towards EMU was to be reinstated. If that is so, the House will no longer have power over the economy of this country. That is what economic and monetary union means. Therefore, whether or not there are direct elections, there will be economic and monetary union.

The power which this House has over Ministers in terms of domestic policy will be eroded and the authority of the House will be eroded irrevocably. The effects of that will be very great because when people say "Change your Government or change your Member of Parliament" that will not necessarily solve the problem. The basis of democracy is not only that there is the possibility of change, as there would not be if that occurred, but that one can ensure that one's view is put. If the powers of the House are truncated, and if its authority is destroyed, as it would be if we stayed in, all the economic gains, if there be any, would be set at nought by the social difficulties which would ensue. Those difficulties are already great because of the increasing speed of technical, financial and international change, and it will not slow down. The problems will become more difficult. If the House can no longer debate them and freely decide what it wants to do, there will be considerable difficulty in the Community.

I turn finally to the question of international affairs. When hon. Members say "What is the alternative?" they are assuming that we agree on the direction in which this country is going. The alternative which we choose depends on the objective of the journey. Some hon. Members believe that this country should reach its objectives inside Europe. But many hon. Members on this side of the House, and many people in the country, do not see the world in those terms. Britain, through its unique method of government and unique relationships with Europe and with many other parts of the world through language and history, can play a unique part in making a bridge between people of different traditions, of different languages and of different histories. If we remain members of a European Community in which our distinct contribution must be subsumed in a larger unit, a great deal of that will go.

The right hon. Member for Sidcup said that only through entering the Community could our voice be heard—as though we needed an amplifier on the world stage. I do not believe that that is true. Britain is not a country to which people will always pay attention. We may not have the old style and power, as the Foreign Secretary has made clear many times, but we still on occasion have influence. If we remain in the European Economic Community—which, whatever is said about the Lomé Convention, is largely a European club of relatively privileged nations which want to maintain their positions—we shall not be able to tread the world stage with the same degree of freedom as we shall if we are outside it.

The peace of the world will better be preserved with a Britain which can pursue an independent foreign policy, which can pursue its trading relationships without let or hindrance and which can pursue an interchange of political views with all countries irrespective of European entanglement. That is why we should vote against the White Paper on Wednesday and ask the people of Britain to vote "No", too.

Several Hon. Members

rose—

Mr. Deputy Speaker (Sir Myer Galpern):

Order. The Government winding-up speech is due to begin at 9.30 p.m. There are still 11 hon. Members patiently waiting to take part in the debate. Need I say more?

8.0 p.m.

Mr. Iain Sproat (Aberdeen, South)

When I spoke in the foreign affairs debate before Easter I finished my speech by saying that I believed that there was nothing in our foreign policy more important than for the Government to construct a strong, democratic and united Europe. I should like now to enlarge and elaborate on that belief.

I will first say something about the effects on Scotland of the United Kingdom's coming out of the EEC. That effect would be disastrous. The result could be quickly to deprive Scotland of 12,000 jobs which are heavily dependent on our trade with the EEC and of up to £80 million a year in grants and loans from EEC sources. Far too many people in Scotland do not realise the benefits we have already received after only two years of membership. I will mention some of the specific benefits for Scotland.

First, there are the benefits of the grants and loans that we have received from the European Investment Bank, the European Social Fund, the European Coal and Steel Community, the European Agricultural Fund and the Community budget under Article 226. Financial help to Scotland from these sources alone totals £65 million.

Secondly, in addition, there is Scotland's share of the £155 million that the United Kingdom as a whole will receive over the next three years from the EEC Regional Fund. Mr. George Thomson, as the Commissioner with responsibility for EEC regional policy, has estimated that Scotland's share of that will be between £50 million and £60 million.

Thirdly, there is the benefit of the spur to employment provided by direct access to the market of 253 million people in the Community. The EEC now provides 17 per cent. of our Scotch whisky market and 25 per cent. of the rest of all exports from Scotland—apart from whisky and fuels—making the EEC already a more important single market for those exports than is the United States or EFTA.

Fourthly, there is great benefit to Scotland in investment and employment terms of American companies which have come, and should increasingly come, to Scotland, as an English-speaking country with good regional incentives inside the Community. Were the United Kingdom to leave the EEC, American companies have already indicated that they would leave Scotland.

Fifthly, there is the potential benefit to Scotland of the geographic fact of the Clyde-Forth land bridge, which is ideally suited to the importation of raw materials from across the Atlantic into our West Coast ports to be processed in the central belt and then exported from East Coast ports across the North Sea to Europe.

Sixthly, there is the benefit to Scotland of wider opportunities, inside an increasingly powerful and cohesive Europe, for Scots men and women of ability to exercise their talents. Traditionally, in days past those talents made an unrivalled contribution to the running of Britain's overseas possessions, but those days are over. Now, after long years of contraction of opportunities, the European Community provides once again expanding opportunities and wider horizons for men and women of ability from Scotland.

Seventhly, there is the overwhelming economic benefit to Scotland of being an integral part of a strong United Kingdom economy, increasingly stimulated by the new market opportunities of the EEC. Long years of economic experience—often bitter economic experience—have shown that Scotland can, beyond reasonable dispute, enjoy prosperity only if the United Kingdom as a whole enjoys prosperity.

It is a dangerous fallacy to think that somehow a Scotland cut off from the United Kingdom and from the European Community can, by herself, float to prosperity on a mixture of whisky and offshore oil. Such hypothetical prosperity would be severely limited—limited in amount, limited in geographic extent inside Scotland, and limited in time by the relatively short number of years that our oil reserves will last. Such prosperity cannot remotely compare with the far greater prosperity that Scotland should know in the future as part of an integrated, powerful economic unit—part, that is, of a strong United Kingdom within the European Community.

I turn briefly from the specific benefits for Scotland to the fundamental economic reason why I believe it essential that the United Kingdom should remain in the EEC. That fundamental reason can be put very simply. It is that we are a nation that lives by trading and it must, therefore, be good for us as a nation to have tariff-free access to, and to have powers of economic policy making over, what is now the world's greatest trading bloc—a home market larger than that of either the United States or the Soviet Union. To be excluded from this vast, rich and expanding market would be very grave for our future prosperity, but to exclude ourselves through a referendum gone wrong would be national stupidity almost without parallel.

Next, I turn to some of the political reasons, in so far as they can be separated from the economic ones, why I believe it is essential for the United Kingdom to remain within the EEC. Again, the fundamental reason can be put very simply. It is that Britain can no longer standalone. We can no longer standalone and have any pretence of preserving, let alone increasing, our past standards of security, prosperity, and influence.

In a world that has seen the development of super-Powers like the United States and the Soviet Union, and the coming super-Power of China—a world that has seen the development of nuclear weapons alter absolutely past concepts of military effects, that has seen greater consciousness and bitterness by the poorer nations about their position, that has seen, more recently, the growing awareness of monopoly power wielded by the oil producing nations, for Britain unity with like-minded nations alone can mean strength.

Our natural resources, our trading ability outside the tariff walls of the Community, our population of 55 million people, are no longer by themselves a sufficient power base for this country. The tragic events of the last few weeks alone in Vietnam, Cambodia, the Middle East and Portugal have shown all too clearly the sad impotence of this country—and, indeed, of the other members of the European Community—to influence world affairs as we and they would wish. But inside the European Community, as a vital member of a new Power bloc, our position is quite different.

Inside, we can help to maintain the peace and stability of Europe. Inside, we as members of a new and growing Powerbloc, can help to forge a common European foreign policy and bring strong influence to bear on others in the cause of world peace. Inside, we can increase our own sovereignty, as I take sovereignty to mean control by oneself over that which affects oneself most importantly. Inside the European Community we shall have more control over what happens to us economically and politically—more control over our ability to defend ourselves and more ability to stand up to the demands of other nations—than we should have ultimately outside and alone. We are freely sharing with like-minded neighbour nations something of the illusion of sovereignty so that we may gain much more of the substance of sovereignty.

As well as gaining much from the European Community we also have much to give. I am referring not merely to our market of 55 million people or to our industrial and financial expertise—vitally important to Europe as these are. Whether we—or anyone else—like it or not, whether or not we continue as members, the European Community is already far down the road towards becoming—perhaps it already might be described as being—a new civilian super-Power. It is this by virtue of its collective economic strength as the world's Largest tradingbloc.

It is vital that cohesive, social and politicial form be given to that economic strength. No country is better suited than our own, by long and proven tradition, to help give stable and strong democratic form to the emerging European super-Power.

8.11 p.m.

Mr. Arthur Blenkinsop (South Shields)

I wish to take up some of the points my hon. Friend the Member for Newham, South (Mr. Spearing) raised. In many respects he has raised important issues, but he seems to be living in an unreal world.

Neither the pro- or anti-Market spokesmen have been very brilliant in their prophecies of the future, although I note that in the past many of those prophecies have been properly cautious in their terms—and no wonder. Many of the predictions which have been most confidently asserted by anti-Marketeers about the gross increase in food prices have proved to be untrue, just as the great expansion of our trade into the Common Market has not yet succeeded to the extent that we wish. Therefore, it is proper to be extremely cautious in our prophecies in this area.

In the immediate future I would rather face threats to employment and threats of inflation from within the Market than from outside it. The sovereignty which some hon. Members have mentioned sounds rather unreal. Those of us who have been Members of Parliament for some years have experienced how brittle and how ineffective that sovereignty can be under the pressure of harsh economic and financial realities. It is those factors which are the biggest limitation upon our sovereignty and which we must face.

The opportunities of maintaining the kind of economic stability and development in the future that we wish for our social objectives are more likely to arrive within the Common Market than outside.

I share the great concern of the hon. Member for Newham, South about the Third World and the danger of a possible clash between the developed world and the Third World. The experience of our relationship with the Commonwealth urges us to stay in the Common Market to reach more satisfactory solutions for the future developing world. The contributions we can make outside the European Community are extremely small, whatever our wish or desire might be. The contribution we can make inside the Common Market has, to some extent, been shown in the period of negotiation, or renegotiation—call it what you like.

I regret that we played no part in the establishment of the Common Market in the early days. That is the advantage of hindsight. At that time many of us strongly believed that there was a future in the development of the great economic and political influence and power of the Commonwealth. We had great ambitions. We wanted to see a great multi-racial Commonwealth, as it was and is, playing a powerful role and being a real force. However, long before negotiations for our entry to the Common Market developed, the major countries of the Commonwealth were beginning to make their own political and economic contact and arrangements with other major countries in their regions. This was natural and right. As the years went by we saw that reality more clearly. The actions taken by Canada, Australia and other members of the Commonwealth in the past have had a considerable influence on our trading position. It is not true that they were always willing to play a servile role to this country. Why should they? They are independent countries, although members of the Commonwealth. They are rightly asserting their interests and concerns.

More and more the concept of the Commonwealth has taken on a new regional meaning. This has been emphasised in recent years in practical ways, for example, in the setting up at political and economic level of advisory groups on a regional basis. Those of us who have had the opportunity of meeting representatives of the Commonwealth at Commonwealth Parliamentary Association Conferences realise how valuable those regional bodies have become. They have provided a Commonwealth base at regional level not an exclusive one—which has been used and found valuable in building up natural, wider regional links. I echo the words of the Prime Minister when he opened this debate. All the representatives of the Commonwealth countries I met last autumn declared that their interests were best served through Britain's continuing membership of the Common Market. They all quoted examples of new relationships and markets they were developing and new contacts they were making with the Common Market countries and with countries outside the Common Market.

It is pure illusion that we either can or should want to go back to the days when we saw Commonwealth countries as the providers of cheap food while they were the automatic recipients of high-cost manufactured goods from this country. I am sure that my hon. Friends would reject any suggestion that this was in their minds.

My right hon. Friend the Member for Battersea, North (Mr. Jay), who is usually clear headed in these matters, referred to a period which has long gone and which I have no wish to bring back. It has been part of any political contribution I have tried to make to see that period go and a new set of circumstances established. On that ground alone, and on the evidence of the declared wishes of our friends in the developing world, whom I know my hon. Friend is eager to support, I believe we can do more to help them by continuing in the Common Market. What would be more foolish than, having opened the door to a better and new relationship between the developing world and Western Europe, to neglect it, to wash our hands of it and to be unwilling to continue to play a part in ensuring that the agreements we have initiated are carried out?

How can we be sure of this if we turn coward, as it were, and walk out? How can we help those whom we know have a great moral claim upon us, as well as having long historic ties, if we leave the Community after having so recently joined it?

Mr. Spearing

Does my hon. Friend not agree that the arrangements made have been made with the Community and not with this country? On the question of the generalised system of preferences, is he not aware that the improved terms offered by the Community are still inferior to those which we have had to give up, and, further, that countries like India and Pakistan are not eligible for association although they were eligible for Commonwealth preference?

Mr. Blenkinsop

I know that both the Indian Government and Indian representatives I have met have said that they have been able to open up a better chance of contact and of fruitful relationships, and that they want us to carry on as members of the Community to assist in this process. That is good enough for me. It is a good indication of what is of value. Coming from a disadvantaged area in the North of England, I realise their anxieties about the future.

I do not pretend that there are any easy answers. Any successes we achieve will have to be won by ourselves. There is no easy road out. We are not likely to win out without some co-operation with those nearest to us. I entirely disagree with the point of view put by the hon. Member for Glasgow, Cathcart (Mr. Taylor), who expressed the kind of narrow nationalism that I fear greatly among my colleagues and friends.

I do not believe that there is nothing that brings us together in Europe. We have a great deal in common through our background, tradition and history. Much that has been achieved in Western Europe in social and political terms could be of benefit to us. Equally there are many things on which we could advise and give our views. Who best to turn to for comments and advice than those who have common political objectives?

When I find that the Social Democrats in Western Europe, without exception, urge us to be with them, I cannot see why we should turn our backs on them, any more than I would wish to turn my back on the deprived countries in the developing world. It is with this very much in mind that I urge my hon. Friends and all throughout the country to vote overwhelmingly for us to remain in the Community.

8.25 p.m.

Mr. Robert Adley (Christchurch and Lymington)

I share with the hon. Member for South Shields (Mr. Blenkinsop) some of the fears he expressed so eloquently about what would happen to this country if we were to leave the Community. I share with him too, the fears of the thought processes of some of his hon. Friends. I do not want to be rude about this, but it worries me no end to contemplate where this road will lead us.

In all the talk about sovereignty, about which the anti-Marketeers have become so impassioned, I cannot help but notice the attendance and atmosphere in the Chamber. If sovereignty were to be measured by attendance here we would have lost it already. Notwithstanding that, I very much welcome the opportunity to take part in this debate, because I was not so fortunate during the six-day debate in the run-up to the vote during the 1970–74 Parliament.

There are three periods of this Common Market debate. They are the period of renegotiation, the referendum period, and the future. As for the renegotiation, the less said about it the better. I appreciate that no good is done by being rude about the Government's efforts. They have undoubtedly made a number of gains. Whether without the renegotiation they would have been made sooner or later is irrelevant. The hon. Member for South Shields put the thing in perspective when he used the phrase, "negotiation, renegotiation—call it what you like." That is the epithet I would give to the renegotiation period.

There is a divide between the Government and some of my hon. Friends over the referendum period. The Prime Minister seems to have become a voluntary Houdini, tying himself up with the referendum, determined, so he says, whatever happens, to push legislation through the House if that be necessary, should the result go against the Government's recommendation. I say with all due modesty that I prefer the role of Burke to that of Houdini in my relationship with my constituents. This referendum is rather like looking back to the 1972 Cup Final, deciding that the result was not suitable and, because there is a new Chairman of the Football Association, demanding that it should be replayed.

Life in this House is not like that. That is not why I was sent here. I was sent here to represent my constituents and to take decisions on their behalf in what I believe to be their long-term interests. The hon. Member for Berwick and East Lothian (Mr. Mackintosh), in his usual outstanding contribution, talked of the wars in Europe. These have always been my first motivation in my craving for closer links within Western Europe. We have seen two European civil wars this century. By joining and remaining in the Community we give ourselves the best possible chance of avoiding a third crazy tragedy of this nature.

Since our signature to the Treaty and our accession to it one of the most notable events has been the way in which British citizens have been taking part more and more in the life of Europe. Many of our people are now in the other eight EEC countries. They are living in them as of right and working in them without fear or favour. This afternoon I received a deputation from Britons living in Europe and 10,000 signatures from people who are British subjects who are presently debarred from voting in the referendum. In the normal circumstances of a General Election we have elections in 635 constituencies for 635 Members of Parliament. In the referendum we have one national test of opinion. Whether the votes are counted by constituencies, regionally, or nationally is irrelevant to the simple point that the end product will not result in anyone coming or not coming to this place The Government must take seriously the pleas of those people who are anxious to express their voice on this issue and who could possibly be better qualified to express them—

Mr. Deputy Speaker

Order. The matter to which the hon. Gentleman is referring would be more appropriate to the debate on the Referendum Bill on Thursday.

Mr. Adley

Paragraph 153 of the White Paper "Membership of the European Community" appears under the heading "The Decision". I was hoping that I would not incur your displeasure, Mr. Deputy Speaker, if I made these remarks. However, I bow to your ruling. I think that I have managed to cover the point that I wanted to make. The people to whom I refer have already noticed the changed pattern of life which our current membership of the Community has brought.

A number of Members have referred to the changing and developing relationship between the Commonwealth countries and the Community. Canada is already in the van in recognising the need for a new relationship between its Government and the Community. In diplomacy and commerce the Canadian Government now put their relations with the Community second only to their relations with the United States. It is these subtle but positive changes in world patterns of power of which we must take note, and which we ignore at our peril.

It has also been repeated time after time that remaining within the Community will somehow put us permanently in thrall to the Commission in Brussels. I must state clearly that my constituents do not accept that proposition for one moment. That applies particularly to those who recently had the pleasure of meeting the least faceless European of them all—Sir Christopher Soames. But if the choice were to be Brussels or Benn I know the sort of Britain that many of my constituents would wish to see built in future. That choice might well force them to select the former rather than the latter.

It is understandable that the Secretary of State for Industry wishes to see us not remain in the Community. The right hon. Gentleman is a man of vision. He has views which he does not hide. He sees a society which fundamentally frightens me to death. Perhaps the hon. Member for South Shields had that at the back of his mind. I see that he shakes his head in denial so I shall not pursue him on that matter. The Left in this country understandably does not want Britain to remain in Europe. The Left calls the Community a capitalist club. I do not know what the opposite to capitalism is—presumably it is Socialism, with a large capital S—the sort of Socialism which is so closely allied to Communism that in my view it is difficult to differentiate between the two.

I believe that those who seek such a fundamental change in the status and the way of life of this country recognise that their best ally is the collapse of our currency and our economy. Perhaps they are not far wrong in their thought-processes. which take them along the path of believing that to remove ourselves from the Community would be a further giant step towards self-debilitation—an exercise which would enable them all the more quickly to bring about those fundamental changes in our way of life which they seek, but which I do not believe meet with the wishes of the majority of the British people. When Mr. Jack Jones says that if we leave the EEC we shall be able to abolish VAT immediately he illustrates the sort of exaggeration which goes so far as to become distortion.

Mr. Sproat

It is ignorance.

Mr. Adley

Yes, ignorance. I had hoped that we would be able to avoid that sort of ignorance in this pre-referendum debate. I fear that it is not to be so, but unfortunately Mr. Jones gave the game away when he reminded us that his vision of history was of 1939, when Britain and Russia were allied against Fascism.

Mr. J. Enoch Powell (Down, South)

Hardly 1939.

Mr. Adley

I agree with the right hon. Gentleman that Mr. Jones was wrong. Mr. Jones was rewriting history to suit his own book, and he is one of the strongest opponents to this country's remaining within the Community. I believe that if, tomorrow, anti-Marketeers were offered on a plate France and Germany as British colonies, they would still find it unacceptable.

The right hon. Member for Battersea, North (Mr. Jay), in a speech which I may have heard before, appeared to pour scorn on the fact that the leaders of the Conservative, Labour and Liberal parties are in agreement on this great issue. Perhaps I am mistaken, but 1 find all too often in my constituency that our people are fed up with the continual squabbling of politicians. Surely once in a while, when the leaders of the three great political parties agree on what they see to be the overriding interests of our nation, it is a moment for rejoicing and not for regret. I am far happier to find myself in a campaign which contains my right hon. Friend the Leader of the Opposition, my right hon. Friend the Member for Penrith and The Border (Mr. Whitelaw), my right hon. Friend the Member for Sidcup (Mr. Heath), the right hon. Member for Devon, North (Mr. Thorpe), the hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel), the Prime Minister, the Home Secretary and the Secretary of State for Prices and Consumer Protection than I would be if I were to find myself in a camp which comprised the Secretary of State for Industry, Mr. Jack Jones, the IRA, the National Front and Radio Moscow.

Mr. Mike Thomas (Newcastle-upon-Tyne, East)

And the right hon. Member for Down, South (Mr. Powell).

Mr. Adley

I think I should resist sedentary interventions. If we wish to see the United Kingdom remain in Europe, what we must get across is the fact that we are seeking to build, not destroy; that we are in favour of a continuing marriage and are opposed to divorce. My hon. Friend the Member for Aberdeen, South (Mr. Sproat) spoke eloquently about the problems of Portugal and South Vietnam, both of which countries tried to stand alone and paid the price. I recall, some three years ago, in the discussions leading up to the decision whether to join the Community, that the arguments used against our going into the Community were emotional and emotive. I suspect that we shall hear a similar line of arguments again as the referendum date approaches. I recall that we were told that the Queen would have to abdicate, that the price of butter would scar, that we should have to speak French, and this country would experience an influx of Southern Italian workers. Some Labour Members may dissent, but that was the level of argument used when the issue was discussed in the market place on that occasion. It is not a level of argument to which anybody on either side should now seek to descend.

Finally, I wish to make one last political point about the situation in this House. It would be easy, but dishonest, for the Conservative Party to turn on the Government and say, "We shall not support you because if we suddenly decide not to support you, we can cause the defeat of the Government."

The Minister of State for Foreign and Commonwealth Affairs (Mr. Roy Hattersley)

May I now reply to the hon. Gentleman—because I do not propose to refer to him in my reply? He talked of the level of debate to which we should not descend. Does he regard what he said about the Communist connections of the anti-Marketeers as appropriate to the level of debate?

Mr. Adley

I thought I said that Socialism—with a capital "S"—is in many ways a short step from Communism. If I gave the impression that all anti-Marketeers were Communists, that would be ludicrous, and I retract it. I said that I feared that if the "No" faction in the Labour Party gained the ascendancy, this country would be set upon a rapid path towards the sort of Socialism which would be a short step from Communism. I hope it will be accepted that that is not an abusive point. Many of my constituents have that fear, which I believe is by no means unreal.

If the vote on Wednesday is "No", I believe that the losers will be the moderate faction in the Labour Party. Although for short-term party ends I am sure that the Conservative Party would refuse to support the Government on Wednesday, it will not do so, because the future of our nation in Europe is a far higher ambition even than the possible downfall of the present Labour Government. I am no great friend of the Government. However, that would be too high a price, even for me.

8.42 p.m.

Mrs. Renee Short (Wolverhampton, North-East)

While my hon. Friend the Member for South Shields (Mr. Blenkin-sop) was explaining why he was such an ardent pro-Marketeer—namely, because most of his Social Democratic friends in Europe say that they want him and us to remain in the EEC—I wondered what the hon. Member for Christchurch and Lymington (Mr. Adley) would put forward as the motivating force which made him a pro-Marketeer. That came half way through his speech when he indicated clearly that he regarded the Common Market as a bastion against Socialism.

That is my view. That is one of the reasons why I am an ardent anti-Marketeer, and always have been. I have not changed my views since the beginning of the discussion on the Common Market, long before I entered Parliament.

My hon. Friend mentioned that Mr. Jack Jones said that we could abolish VAT if we left the Common Market Of course, Mr. Jack Jones is right.

Mr. Adley

But Mr. Jack Jones intimated that we could simply abolish VAT if we left the Community.

Mrs. Short

That is for us to say. That is the whole point of the argument. Value added tax was introduced because it was a Common Market tax, and we had no option about its introduction. That is why small shopkeepers, pharmacists and other groups are now sending us petitions about VAT.

Mr. Adley

Mr. Jack Jones gave the impression—whether deliberately or otherwise I do not know—that we could abolish VAT and replace it with nothing. That was my point.

Mrs. Short

I am not sure what Mr. Jack Jones said. I base my remarks on what the hon. Member for Christchurch and Lymington said. The point is that we could abolish VAT. I hope we shall do so, since we shall then be in a position to decide our own taxation system and to levy taxes on those who can afford to pay. At present VAT is charged on people who cannot necessarily afford to pay it on services and goods.

Not very many hon. Members have said much about the White Paper. I cannot resist the temptation to mention it. I think it is wordy, turgid and repetitive. It is a diabolical document, typical of the stuff put out to confuse people and make it difficult for them to understand.

Six pages in the White Paper deal with the common agricultural policy, all of which could have been said in one page. The document repeats arguments made in preceding sections. Allow me to pick up one or two choice morsels for the delectation of the House: The interests of consumers have been given priority both in the disposal of surpluses and in overcoming scarcities. Which consumers have been given priority in the disposal of surpluses? I suppose it could refer to a few old-age pensioners having meat coupons for a limited period. The main beneficiaries of the disposal of surpluses have been people living in the Soviet Union, who have received cheap products as a result of Common Market over-production.

Again: There is increasing recognition of the need to foster food production in a hungry world. What examples have we of the EEC disposing of surplus food for the hungry world? This country has done more for the hungry world than any of the Market countries separately or together have ever done. This is part of our tradition. We have always placed great reliance on support for the countries of the Commonwealth in providing financial, physical and other forms of aid. The White Paper goes on to say that the Government ask that measures should be taken to discourage surplus production. What about the hungry world if we are to discourage production? The document is contradictory and extremely confusing.

As many right hon. and hon. Members have said today, as a result of the negotiations fundamentally nothing very much has changed. Community law remains the same as it was before the renegotiations, and our objections to that are as firm as they ever were. We have the binding regulations which are issued by the Council of Ministers and have the force of law in member States. We have directives which are binding on member States to which they are addressed, and we have the decisions which are binding on Governments, on enterprises and on individuals to whom they are addressed.

That is what we are concerned about when we talk about the loss of sovereignty. We are concerned that the whole body of Community law takes direct effect in the United Kingdom and cannot be repealed or amended by this Parliament. It has to take precedence and be adhered to. If we remain in the Common Market, this Parliament will no longer be the supreme law-making body, and we shall have to abide by the laws that are made by the Community for ever and a day, as long as we remain within the Common Market.

Let me remind the House that Lord Justice Searman had some words to say about the effect of Community law. He said: We may, without realising it, be on the brink of the most radical constitutional change since Parliament asserted its sovereignty in the seventeenth century. Lord Denning said: We have to learn a new system. When we come to matters with a European element, the Treaty of Rome is like an oncoming tide. It flows into the estuaries and up the rivers—it cannot be held back. When we come to the argument about being able to purchase cheaper food from Commonwealth countries or countries outside the Commonwealth, this is the situation that we shall have to meet. Indeed, we have already had to meet it. My hon. Friend the Member for Berwick and East Lothian (Mr. Mackintosh) made great play of this, but not very long ago, in September 1974, Australian sugar producers offered us a five-year agreement. They offered to supply us with 350,000 tons per annum at a price well below the then world price. That would have been good business for us and for the Australian sugar producers because they would have had their guaranteed price for five years. But M. Lardinois made it clear that we were no longer free to do as we liked, so we did not do as we liked and we did not make the agreement with the Australian sugar producers.

There looms over us, although it has not been implemented so far, the common transport policy. This again is something that is on the cards and will no doubt be brought up if the referendum gives a "Yes" in June. No doubt part of the common transport policy will involve the resurrection of the argument about the entry of juggernaut lorries into this country. If we decide to remain in, that certainly will be pressed. There will then be nothing that we can do about it.

Economic and monetary union is still very much the objective of the signatories of the Treaty of Rome. It may be, as the Prime Minister and the Foreign Secretary have said, that that is not active at the moment, that progress is slow. But it was reaffirmed at the Paris meeting in December at which the Foreign Secretary was present, so we are presumably a party to the possible implementation of economic and monetary union.

The renegotiations have been utterly unsatisfactory as regards the entry of goods from Commonwealth countries which used to come here free of duty. Now, they are subject to CET, while goods from the EEC which used to be charged import duties come in free. So in this respect we have swung away from helping former Commonwealth countries, like India, Pakistan and Sri Lanka, to help eight industrial countries which form part, and only a small part, of Western Europe.

The common agricultural policy discriminates first against food from our traditional suppliers. There has been no change in that. We all understood, when the renegotiation exercise—I will not be so brutal as one of my hon. Friends who used the word "charade"—began, that the policy could not be changed. It is basic to the treaty and there is no possibility of changing it. We can have little flexible arrangements about beef prices for a year but nothing fundamental. The yearly agreements will have to be renegotiated and argued about again when that period is ended.

We have also had to accept what I regard as the pernicious and absolutely un-Socialist policy of intervention. This has maintained, and will continue to maintain, high prices for the housewife and discrimination against cheaper food from outside the EEC. The recent fish dispute is a very good example of pressure against cheaper food from a country outside the Common Market. At present we import 46 per cent. of dairy produce from the EEC and 50 per cent. of cereals. Our food bill to the Common Market in 1974 was almost £900 million.

On top of that there is the appalling trade deficit in many manufactured goods from the EEC. This problem is not mentioned in the White Paper. I suppose that the figures which have been mentioned are terrifying. It is a larger deficit than we have ever had to meet before. This relates to manufactured goods like cars, washing machines and refrigerators and textile goods like made-up clothing. The problems of the Lancashire cotton industry have recently been brought to our attention. There has been reference today to the problems of the steel industry, yet we are still running down the steel works in Ebbw Vale while importing manufactured goods made of Common Market steel. That seems the economics of bedlam.

The result is growing redundancy and unemployment in this country. My constituency was an early sufferer in this respect when the Courtaulds factory in Wolverhampton closed, making many hundreds of men and women redundant —at a time when Courtaulds' profits for that year, about £42 million overall, were considerable. In the previous year the company had exported capital to expand its factories in France, Italy and Belgium, and continues to do so. There is nothing in the White Paper about dealing with that problem. The export of capital to provide more jobs in the Common Market countries is a matter of very great concern to all of us who represent industrial seats. The constituents of the hon. Member for Christchurch and Lymington and his Conservative association may be urging him to support our remaining in the Common Market, but I must tell him that that is not the view of many of the working people in the West Midlands. It is certainly not the view of the TUC and of the major trade unions of this country.

Mr. Hattersley rose—

Mrs. Short

Is my right hon. Friend anxious to intervene?

Mr. Hattersley

Only to express surprise at my hon. Friend allegedly speaking for all the West Midlands—having just heard quite the opposite sort of information from some of my hon. Friends. I am even more surprised at hearing her assertion that no major trade union in this country supports continued British membership of the EEC. My lion. Friend had better give us her definition of "major trade unions."

Mrs. Short

I did not say that. I said that the TUC and most of the major trade unions in this country did not support the view that we should remain in the EEC.

This is a very urgent problem that certainly needs to be dealt with, because this situation will continue. As long as we remain in the Common Market there will be this outflow of capital. The effect of that must inevitably be to create more redundancy and more unemployment in Britain.

At the same time, the other side of that coin is the continuing import of manufactured goods from the EEC countries to a much larger degree than we are exporting to them—hence the enormous deficit. We cannot impose import surcharges on a temporary basis. I am not arguing whether that is the right thing to do. We cannot do it. We did it under a previous Labour Government, but to do it now would be against the Treaty of Rome.

The Government have the support—welcome or otherwise—of most Conservative Members. I am not quite sure about the position on the Liberal bench and whether Liberal Members are united. [Interruption.] I hear that they are all united now. One never knows about the Liberals.

The Government also have the support of the CBI, which has very close connections with the Tory Party. The CBI is very happy that we should remain in the Common Market because it is very happy with the growth of large multinational companies. However, at the same time the CBI is not above asking for and accepting financial handouts from the Government while the Common Market process continues.

This indicates the lack of adventure and new ideas of British industry. It cannot see any alternative to remaining in the EEC because it thinks that this will make life very much easier for it. All the pioneering spirit which existed in British industry before the war seems to have evaporated. British industry is very happy to campaign against food subsidies. Incidentally, food subsidies will disappear, so that in due course the cost of living will rise and housewives will have an even bigger shock than they have had already on food prices. The CBI campaigns against food subsidies, against subsidies for housing for our people and against subsidies for the health of our people. Therefore, the CBI, too, is a little schizophrenic, just as is the Tory Party.

The majority of the Cabinet who support the Common Market are really not very anxious to challenge big business fundamentally. They are quite happy to see the continuation of the multinationals. If we are really to take over these citadels of power in Britain we need very much greater economic resources, which are apparently not forthcoming. The Secretary of State for Industry has said that very much greater financial resources are needed if this is to be done. The people of Britain are very unwilling to see economic power of this magnitude transferred permanently to the multinational groupings backed by the largest capitalist organisation in the world today—namely, the Common Market. That is what it is. Let us not mince our words about it. My right hon. Friend the Prime Minister was absolutely right when not long ago in some very choice words he described the Treaty of Rome as a Magna Carta for the barons of the multinational mega-corporations.

Of course we need to have international co-operation. I have urged that there should be international co-operation in many fields, notably in technology, engineering and building, so that we have real international standards, which are needed for all sorts of reasons, not the least of which is safety. We had a recent example where international standards were not enforced and it cost us a great deal to put the matter right. However, to achieve such co-operation we do not need to be members of the Common Market, with all the economic burdens that that entails. A great deal of international co-operation existed before we entered the Common Market.

The major problem facing us with our continuing membership of the Common Market is that the Council of Ministers exercises enormous power. There is no parliamentary control over its activities in Brussels. Parliament has no supervisory power over the Ministers once they go to Brussels. Parliament does not discuss what the Ministers will do when they go to Brussels. When the Ministers return, all that we can do is ask questions. We cannot overturn or change the decisions which are made at the Council of Ministers in Brussels.

It is said that we can get rid of a Minister if we are not satisfied with what he has done in Brussels. That is a difficult exercise. How can we get rid of a Minister without getting rid of a Government?

How can we get rid of a Government on such a basis?

Mr. Douglas Hurd (Mid-Oxon)

Has not the hon. Lady attended the many debates we have had in the House—admittedly often at a late hour—in which we have gone through documents produced by the Community before Ministers have gone to Brussels to make known the Government position?

Mrs. Short

Many of the late night debates, at which I have no doubt the hon. Gentleman has been a keen attender, have concerned documents which have been winkled out for us by the Scrutiny Committee but which have had no relationship to what the Ministers have done at the Council of Ministers. It is all secondary and tertiary legislation which it is important for us to discuss, but that is all we can do. We cannot throw it out or amend it. That is an example of the way in which the power of Parliament to decide what legislation is carried through the House is gradually eroded. This should be a matter of concern to all of us.

I ask my hon. Friends to visualise the situation if by some misfortune we were to have a Tory Government and Conservative Ministers were to go to the Council of Ministers and make decisions on future energy policy or future fishing policy or on whatever issue was important and urgent for Britain at the time. That would bring the matter home to us more closely. The decisions they made could not be overturned or changed.

The Treaty of Rome and the Council of Ministers represent an enormous increase in the legislative and judicial powers of the nine executives who form the Common Market. They give considerable powers to Governments to rule by decree. That is unacceptable to us and flies in face of all our traditions.

Britain is embarked upon a very dangerous and difficult course. If the result of the referendum is that we should remain in the Common Market, there will be little protection that the British Parliament can give to the British people. That is why I believe that the British people will vote "No" at the referendum in June.

9.5 p.m.

Mr. Fred Silvester (Manchester, Withington)

I shall not take up too many of the arguments advanced by the hon. Member for Wolverhampton, North-East (Mrs. Short). They contained a very large number of errors which I have no doubt will be exposed in the weeks to come.

In the few moments available to me, I propose to deal with three matters which appear, from the anti-Common Market case, to be the front runners. First, opponents of the Common Market talk continuously of a food tax. Secondly, they talk about the deficit on trade. Thirdly, they talk about sovereignty.

Another way of talking about a food tax and the common agricultural policy is to regard it as a means of protecting farming. If it is described in that way, it is a form of words which is much more acceptable to most hon. Members—[Interruption.] I remind the hon. Member for Newham, South (Mr. Spearing) that most countries have some form of protection for agriculture. The hon. Gentleman may not like the European method. but that is its purpose. That purpose will remain. The method will change over the years.

We see from the Government's forecasts for 1974–75 that of the money available this year for farming, £295 million comes from the national Exchequer and £192 million from CAP funds. Those proportions will vary over the years. Food prices in the world outside will decline in the current year, just as they were not nearly so high as was predicted when we went into the Common Market. Variations will continue over the years. That is undoubtedly true, and I am not in a position to forecast how they will occur. All that can be said is that there will have to be a continued form of protection for agriculture. The form currently in operation in Europe is already under change. There is nothing in the Treaty of Rome which requires it to be conducted by the precise method operated at present, and there is already a stocktaking document available which proposes substantial changes. That will be the subject of continuing negotiation. Therefore, to suggest that we are in a static situation is absurd and unfair to the British people.

It is put forward as a form of food tax because that is a highly emotive phrase, and one which has been used in our previous history. Whenever one wants to whip up support, one talks of taxes on foods.

There are other matters of equal importance. The hon. Member for Wolverhampton, North-East mentioned the textile debate of great importance to the North-West. There are already activities within the EEC which are of considerable benefit to the textile industry, such as the burden-sharing agreement. It is also the case that there is nothing within the EEC to prevent our taking crash action should we require to do so.

There are all sorts of ways in which industry in the North-West and in other parts of the country can and will benefit from Britain remaining a member of the Common Market. It is estimated that the North-West provides about £850 million worth of exports to the EEC. In rough terms, that represents 150,000 jobs, or a total of 300,000, taking into account the service industries. I do not suggest that those jobs will disappear if we leave the EEC, but that is some indication of the importance of that trade and all that goes with it to the area which I represent—and the position is duplicated in other parts of the country.

I come now to what is probably the most important question, which is fast becoming the front runner in the anti-Market campaign—the question of sovereignty. I sometimes doubt whether those who argue this case have attended some of our debates or understood the way in which the processes of legislation for the Common Market arc working. What can be said is that there is no reason why, in large areas of policy in which decisions arc yet to be taken, this House should not have its say and influence those decisions. If they are of major concern to this country, there is no reason why we should not prevent their being taken.

We are being asked to say that although the House may decide—or we ourselves, speaking to our constituents, may decide—that it is in our interest to take within the EEC joint economic decisions which are likely to improve the lot of our constituents, we must not do it because by so doing we may surrender some measure of sovereignty. I find it a strange sort of sovereignty which says that although we may conclude that something would do us good we ought not do it.

If our laws come together—I believe that some of them will, and that we shall harmonise to some extent—or if we decide, as the hon. Member for Newham, South suggested, to pursue a common energy policy, or to follow a common foreign policy, those things will happen because we want them. We shall be part of the decision-making process, and they will not happen unless we agree.

Is it to be said that we must not take these decisions, although we believe them to be in our interest, because we fear the surrender of some form of sovereignty? I wonder whether all the talk about sovereignty, about the mainstream of our history and the rest, has real historical truth. In fact, the situation is evolving and changing, and it seems to me that the greatest divide between the two sides of the argument lies in the aspect of the matter.

One side sees the EEC as static. The other sees it as dynamic, in an evolving situation. One side tries to make out that the Treaty of Rome is Holy Writ. Others see it as the beginning of a developing movement which will in time become so powerful that, no matter what anyone may think now, it will have a life of its own, and the Treaty of Rome will change. If there is the desire that it be changed, it will be changed— out of all recognition and beyond the present imagination of the House.

We cannot, in this Chamber today, envisage how events will run. We are talking here of nine great nations which have built themselves up and which will create for themselves what they wish to create. No bounds can be put to that.

In that context, what force is there in the perpetual talk about the bogy of sovereignty? What it comes to is that some hon. Members—those of us who are Conservatives ought to know better—argue that, the next generation may decide to take decisions with which we at this time are not in agreement and so they should not be given that power. We say we fear the loss of some measure of sovereignty.

I do not know what decisions the next generation will take. I do not know whether the right hon. Member for Down, South (Mr. Powell) is right when he says, as I think he did in a speech in Islington recently, that the British people will fight to regain their lost sovereignty. I do not know whether my hon. Friend the Member for Banbury (Mr. Marten) is right when he suggests, in an article in one of the Safeguards Campaign papers, that it would be better for everyone if we made a declaration against the federal State. I do not know whether my hon. Friend who spoke about a directly elected Parliament is right.

I do not know what will happen in the Common Market, and neither does any other hon. Member, but what I do know is that the decisions of the next generation will be made by the next generation and what we are arguing about now is whether we should give them the opportunity.

I do not believe that anyone doubts that there could be great opportunities for this country if we take full advantage of the Common Market. Without doubt, there are opportunities for greater growth by this country, and there are opportunities for us, in combination, to have a greater influence in the world.

Have we the will and the ability to that end? I believe that some of those who argue that we should come out of the EEC do so because of a fear that we do not have that will and ability. I do not share that fear. On the contrary, since the opportunities are there for us to take if we are ready and willing to take them, I am convinced that we should do a great disservice not only to ourselves and to our constituents but, as the years go by, to our children, too, if we deny ourselves and them those opportunities.

9.15 p.m.

Mr. Ronald Bell (Beaconsfield)

One of the difficulties that I have felt in this 14-year debate about the Common Market is that people speaking from different points of view are speaking about different things. My right hon. Friend the Member for Sidcup (Mr. Heath) is talking about political union and makes no concealment of the fact; indeed, he repeated it last weekend. He sought to commit the country to economic and monetary union by 1980, which in practical terms is the same as political union.

The ordinary supporter of staying in or coming out of the Common Market normally speaks of a European association and talks vaguely about being in or out of Europe as though this were a vast confrontation between those who are for Europe and those who are against Europe.

In fact, it is no such thing. I was one of the early British representatives at Strasbourg, and from the early 1950s I have always advocated a European connection. I imagine that most of my hon. Friends and hon. Members opposite who take the view that I take also favour a European connection. The question that arises is what sort of European connection is acceptable to us.

I see my right hon. Friend the Member for Chipping Barnet (Mr. Maudling) sitting very close to me across the Gangway. He knows how much I was persuaded by him in the years when he was the Conservative Minister seeking to negotiate the European Free Trade Area and when the Liberal Party, now sitting behind me—[HON. MEMBERS: "All one of them."] Are there more? The Liberal Party, now sitting behind me, tried to persuade the House to join in full membership of the Treaty of Rome. It was my right hon. Friend on behalf of the then Government, but also many others on the back benches. who explained, in ways that I found entirely convincing and still so find, how full membership of the Treaty of Rome could never be acceptable to the British people. I think that he was right.

Some hon. Members will remember that when this matter first arose in 1950 Mr. Attlee was Prime Minister and Mr. Churchill tried to persuade the then Government to take part in the negotiations about the Treaty of Rome. Mr. Attlee and Mr. Bevin would not agree to it because of its supranational element. We were defeated, and when in consequence the Treaty of Rome was fashioned upon supranational lines agreeable to the Continental nations with their bureaucratic traditions, Mr. Churchill and Mr. Eden in power would have nothing to do with that treaty, Mr. Churchill saying that if the British were ever faced with the choice between that and the open seas, they would always choose the open seas, and that we would not sink our nationhood in what he called a sludgy amalgam.

That remained the position of the Conservative Party all through the years until Harold Macmillan decided that persuading a universal adult suffrage electorate not to eat the seed corn was too dusty and tiresome for his style of politics and that it would be better to pass these awkward economic problems to some of these new institutions in Brussels which are better insulated from democratic pressures". That was a defeatism that I could not, and do not, accept though, I am sorry to say, my party, loyally if without knowledge of the motivation, did the appropriate about turn. That is why I am on this side of the controversy today. I am where all my colleagues were until Harold Macmillan lost heart and lost faith in the economic viability of a universal adult suffrage democracy. The cynic may turn out to have been right, but I believe it is our duty to try to prove him wrong.

We have heard a good deal in the debate about the renegotiations. I believe that they have been adequately categorised in general by previous speakers, but a few examples would not come amiss. One item was beef, to which the right hon. Member for Battersea, North (Mr. Jay) referred. There is an arrangement for one year.

Another item is cheese, about which the White Paper says: last week's statement has left the matter open"— that is absolutely accurate— and we have given notice that we shall pursue it in the Protocol 18 review. We shall press this urgently indeed". That is the renegotiation on cheese.

Another item is wheat, about which the White Paper says: We have requested levy-free quotas for hard wheat and flour". They have requested it, but they have not been given it. That is very important. They have done better with lamb. The White Paper says: We have … put on record that we shall at an early date seek elimination or reduction of the tariff on New Zealand lamb". Then we had the story of the subsidies and grants. I had a booklet from the European Movement about those as I expect other hon. Members did. It is astonishing to learn into what nooks and crannies of our lives these little subsidies have gone. All I can say is that I am prepared to offer anyone £1 million on the express condition that he has given me £2 million the week before. There is a certain amount of legerdemain, as the Common Market call it, in these things. It is easy to contrast our payments in with the payments, loans and promises out, but when one counts in the loans one has to count in the British share of the capital liability for the loans. When one does all the arithmetic properly one does not get a very encouraging result.

It seems to me that the renegotiation has fallen into three categories: where the Government obtained some concession for this year; where they got nothing; and where they thought that: the passage of time has diminished or eliminated the threat that we foresaw. That is it. As the Prime Minister said—it was kind of the Prime Minister to say it, but we knew it before—no alteration in the Rome Treaty or in the Treaty of British Accession was sought or obtained. Therefore, it is all the same. All the fast talk in Command Paper 5999 is just talk. It is oral and by word of mouth—" We said to the Commission and it did not demur"; "The Commission gave us to understand"; "We were reassured by the Commission". It is all between people on one side and the present Ministers on the other. They chat about how well they will get on in the future.

The treaty is absolutely unchanged. When different people meet and discuss the same thing in perhaps a year's time, entirely different results might follow. Indeed, I have a suspicion that after referendum day in June things will look very different when British Ministers chat to the Commission.

We must therefore judge the matter on the general merits. Some people have called coming out of the EEC breaking the treaty. The treaty was described as being made for an indefinite or perhaps unlimited time. That is not a very definite or limited expression. We were given specific and repeated assurances throughout the debates that we could come out without any breach of honour. My right hon. Friend the Member for Sidcup and my right hon. and learned Friend the Member for Hexham (Mr. Rippon) and all sorts of other people said that over and again. Therefore, it is very funny if they were wrong, though I concede that they were wrong about other matters in the same connection.

Supranationality is inevitably a main consideration, and it should not be mocked at or swept aside. The Prime Minister today said that he did not like it at all, but that, on the whole, he found it getting a bit more comfortable and that as we talked to them more we understood them better. But that economic and monetary union which my right hon. Friend the Member for Sidcup has so often preconised—economic and monetary union means the end of separate nationality. In the White Paper there is this interesting balanced phrase: As a long-term objective it was restated in the Paris communiqué, but for all practical purposes it has been tacitly abandoned. That is a funny way of going about things: one restates it and, at the same time, tacitly abandons it.

Mr. Frank Hooley (Sheffield, Heeley)

Is the hon. and learned Gentleman aware that, so far from tacitly abandoning the proposition of EMU, the President of the Commission has made a speech in which he said emphatically that it is the Commission's intention to press on with it?

Mr. Bell

I never had any doubt about that, but it was very unkind of the President of the Commission to do that before the vote on the referendum. However, the Prime Minister began to hedge his bets today, because he said that at present it was not feasible, which is rather different from saying that it has been tacitly abandoned.

When we have EMU, we have finished with Britain as a nation. That is why my right hon. Friend the Member for Sidcup wants it. He has said openly that he is an internationalist. He wants to press on to political union. But the Prime Minister knows that the British people do not want political union. They want Britain to continue, and so do most hon. Members. Therefore, the right hon. Gentleman says that EMU has been tacitly abandoned.

But the commissioners and other people in Europe know that the Treaty of Rome —its conception, shape and mechanism—is meaningless without economic and monetary union. It will be chaos, a shambles, without it. Therefore, it has been restated as an objective in the Paris communiqué. I am reminded of what Mr. Peter Thorneycroft, as he then was, said before 1950—that the British would never join a united Europe if they were fully told the implications because they never agreed to them. He said that in his book.

The question of law has been canvassed. I serve on the Scrutiny Committee. It can never work, and I shall explain in a sentence why we are always overtaken by the flood. We are instructed to report to the House on any proposal which we think the House should consider. We receive the proposal from the Council of Ministers. It is the first document in a procedure. The Council of Ministers meets and talks it over, one person insists on this and another on that. The Council of Ministers does some bargaining and horse-trading, and over a period of months something emerges. It has been made clear to us that that process of private bargaining is confidential and never will be divulged to us.

The law-making procedure of the European Community is a treaty-making procedure, and our sight of the first draft is useless. We are not present when the final draft is agreed, and it would not matter whether or not we reported it to the House, because at that instant it becomes the law.

The right hon. Member for Battersea, North dealt splendidly with the economic considerations. I am sure, as are others, that these are marginal to our problems. Economically it does not matter much whether we are inside or outside a 7 per cent. tariff which is about to be reduced by 35 per cent., because the economic tides in the world dwarf such a tariff into insignificance.

It is the problems from which our country suffers in relation to all other countries that matter, our internal problems of strikes, bad morale and so on. To me the question is, and I believe that for Britain the question should be: what will help us best to solve our own internal problems? The only thing that is strong enough and immediate enough to help us to do that is loyalty to the traditional historic nation State that is Britain. If we destroy that or bring it into question to the point of debilitating it, what we seek to put in its place—the prospect at some time of some new unity and a new focus of loyalty in Western Europe—will so baffle and confuse our contemporaries that we are lost before we start. That may happen at some time and in some way perhaps, but at the moment only something as narrow and strong as loyalty to the nation State will carry us home in the time that is available to us.

9.33 p.m.

The Minister of State for Foreign and Commonwealth Affairs (Mr. Roy Hattersiey)

Formally, today's debate is about the White Paper which describes the outcome of the renegotiations and recommends continued British membership of the EEC. A large majority of hon. Members have endorsed the view that on the new terms Britain should remain in the EEC and a rather smaller majority of hon. Members have taken the view that there has been progress during the renegotiation. Even the hon. and learned Member for Beaconsfield (Mr. Bell), in concluding what I am sure he regarded as a balanced and objective description of the renegotiations, conceded that there had been some concessions. My hon. Friend the Member for Newport (Mr. Hughes) spoke of minor concessions, and even my right hon. Friend the Member for Battersea, North (Mr. Jay) endorsed what he described as our good intentions. From him, that is praise indeed. Some of the praise has been grudging and some glad, but there has been general agreement that during the past year in a number of particulars things for Great Britain have improved within the EEC.

There will be arguments as to the extent of that improvement, but the origins of the renegotiation are clear. They are to be found in resolutions passed by Labour Party conferences, in the election manifestos on which the Labour Party fought two General Elections and in election manifestos which were twice endorsed by the British people. There has rarely been a more definite and positive example of a mandate, and I have no doubt that that mandate has been faithfully carried out.

I respect, although I do not share, the views of my hon. and right hon. Friends who believe that we should not have the Community at any price. They are entitled to that opinion, but that is not the policy of the Labour Party. Nor is the view advanced, if I may say so with respect, by my right hon. Friend the Member for Battersea, North, who will have the Community only at the price of the Community making so many changes that it is a Community no longer. That is not and has never been the policy of my party.

One other thing has to be said about the policy of renegotiation decided by the Labour Party and endorsed by the people. Inherent in that decision was and must be the belief that the Community could offer Britain substantial benefits. Had the Labour Party and the Government not accepted the potential advantages of Community membership, there would have been no point in attempting to revise the terms on which we joined. Had we not accepted that the Community had a great deal to offer Great Britain, our policy would have been not renegotiation but outright withdrawal.

Mr. E. Fernyhough (Jarrow)

The Minister will know that the argument he is now advancing, and which has been advanced since 1962, is that there has always been great potential advantage in membership. Can he give us some idea when we shall receive some of those benefits?

Mr. Hattersley

I hope to attempt to do that shortly. At the moment I want to emphasise the view, which I know my right hon. Friend shares, that the concept of Europe as an institution which has benefits to offer Great Britain, if we remain in membership, is the policy of the party which both he and I serve. It is enormously important that we should remember that. I remember it particularly because during the period of renegotiation we have all, by necessity, dealt more with the details of membership than with its overall merits. Now that the renegotiation is over, it is necessary to speak of the Community and the merits of the Community in positive terms. Doing that tonight ought in no way to diminish the achievement of renegotiation—an exercise, I fear, which has been attempted by two groups in the House today, namely, those who predicted that renegotiation would fail and those who hoped that it would fail.

Nothing I say about the general merit of our EEC membership ought to suggest that what we have done during the past year has not been substantial. In some ways it has been spectacular. We have reduced the cost of membership. We have radically altered the principle on which the Community's financing is based. We have helped to establish a new relationship between the EEC and the developed and developing Commonwealth—a relationship which has proved so rewarding that not one Commonwealth country now wishes Great Britain to leave the Community.

These are important changes. Tomorrow evening my right hon. Friend the Paymaster-General will deal with the financial implications in more detail. On Wednesday my right hon. Friend the Minister of Agriculture, Fisheries and Food will describe the great adjustments we have made to the common agricultural policy. All these changes and successes of renegotiation are only part of the total reason why the Government advocate continued membership.

The Community offers the United Kingdom specific and substantial advantages—advantages which we can now afford to enjoy because of the successful renegotiation. I mention two. The EEC provides our best prospect of long-term economic growth. It is not a certain prospect, but it is undoubtedly the best prospect we possess. It offers us that for two reasons. First, the Community is devoted to industrial progress and commercial expansion. Secondly, it is equally committed to what is called, in its jargon, "economic convergence". That is not the creation of identical economies within all the member States but is a parallel rate of economic growth and a common level of prosperity within all the member States. Looking at our economy and the economies of Belgium, France and Germany, I do not believe that we can afford to turn our back on those concepts. To put it simply and crudely in Commission jargon, I want to see the wages of the car workers in my constituency begin to converge with the wages of the car workers in Cologne.

Community membership and the Community offer us something more than the simple material benefits of membership. Inside the EEC Britain can speak with the strength and authority which we would not possess were we to remain alone. By working within the Community, as we have done during the preparation of its new aid policy, we have helped to change the very nature of the relationship between Western Europe and the developing world. The benefits which many Commonwealth countries will enjoy as a result of the Lomeé Convention could not have been provided by us alone. I do not believe that they would have been provided by the Community without us.

That is an overwhelming, spectacular example of Britain in the Community working for the benefit of the world. It is only one example of the enhanced world influence EEC membership provides as partners in that powerful grouping. What we have to say is certainly listened to more attentively all over the world, not least by the people in those Eastern European countries where I hope we can forge a new and increasingly fruitful partnership.

I know that those who oppose British membership will reject and attempt to refute that analysis. I know that as well as doing so they will try to enlist what they describe as the penalties of Britain's remaining within the EEC. Not surprisingly, those so-called penalties were most cogently and clearly argued this afternoon by my right hon. Friend the Member for Battersea, North. I am sure that I paraphrase him crudely, but I do my best to paraphrase him clearly. He listed three major objections to continued British membership.

The first was our deteriorating balance of trade with the EEC; the second was our inability to buy food in the cheapest world markets; the third was the necessity to accept decisions which we did not make as a sovereign State alone. Let me deal with each in turn. The first is the argument that EEC membership has occasioned a major deterioration in our balance of payments with the Community. Many detailed answers, written and oral, have been given in this House to questions on that subject. Commissioner Gundelach answered a similar general question on United Kingdom trade which was tabled in the European Assembly by the hon. Member for Derbyshire, West (Mr. Scott-Hopkins). Tonight is not the occasion for describing and arguing the detailed method of calculation, the assessment of cif and fob rates and the rest which result in the various figures quoted from time to time in this context.

There are three general facts which it is important to put on record. The first is a simple and tragic reality. The British trade balance has shown a general deterioration over the past three years, not simply with the EEC. Between 1971 and 1973 our non-oil trade gap with the EEC increased five-fold. That is bad enough, in all conscience. But the gap between us and the Commonwealth increased 13-fold. The trade gap between the United Kingdom and the United States was 17 times greater in 1973 than in 1971.

Second, there can be no dispute that between 1972, the last year before we entered the Community, and 1974, the last year for which figures are available, the EEC share of our total deficit and the EEC share of our total non-oil deficit declined rapidly. For the non-oil deficit it has declined from 104 per cent. to 68 per cent. That decline has come about despite the increase in our overall adverse balance of trade and despite the alterations in our trading pattern which have caused us to do more business with Europe and less with the rest of the world.

Mr. Jay

Does my right hon. Friend deny the figures given by the Department of Trade for 1974, which show that our non-oil deficit with the EEC in that year was equal to our whole non-oil deficit with the entire world?

Mr. Hattersley

No, of course I do not. It is because of those figures and the calculations that brought them about that I referred my right hon. Friend and the House to the careful calculations concerning fob rates and other matters which produce different results from different analyses. I hope that in the way that I am careful not to deny those figures my right hon. Friend will not deny the two contentions that I have just advanced. If they are accepted—I cannot believe that they are anything other than acceptable—there is a third conclusion which we must draw, namely, that the final conclusion, based on those undisputable facts, must be that were we not in the Community and not in membership and taking part in the normal pattern of Community trade, our total balance of payments deficit would certainly be greater than it is this year.

Mr. Ron Thomas (Bristol, North-West)

Does my right hon. Friend not agree that all economists, both pro and anti made it quite clear that if we remained in the Community there would be a trade diversion effect which would be detrimental to our balance of trade, but pro-Marketeers argued that this would he more than offset by the expansion of trade and the trade creation within the Community?

Mr. Hattersley

Yes, I agree. I think that a close analysis of the facts will convince my hon. Friend that something like that has happened. The reason for the EEC accounting for a declining proportion of our overall deficit is that although our imports from the EEC have increased our exports to the EEC have increased at a greater rate. There were many wrong predictions made, and I made some myself in 1971, but that prediction has turned out to be more or less correct.

I turn now to the second contention made not only by my right hon. Friend the Member for Battersea, North but in an intervention by my hon. Friend the Member for Renfrewshire, West (Mr. Buchan) and by the hon. Member for Glasgow, Cathcart (Mr. Taylor); namely, that membership of the EEC excludes us from the markets which have always produced cheap food and which may continue to do so on behalf of the British consumer.

Two arguments must be made clear about the availability of cheap food. I share the view which was expressed by the right hon. Member for Brighton, Pavilion (Mr. Amery), whose nineteenth century history I find much more acceptable than his nineteenth century philosophy, that perhaps 100 years ago Britain's industrial prospects were savagely prejudiced by an obsession with cheap food and by a determination to invest abroad in short-term profitable markets. That is a striking analysis that may be disputed, but what cannot be disputed is that cheap food, in the traditional sense of the term, is no longer available to the British consumer.

Like my hon. Friend the Member for South Shields (Mr. Blenkinsop), I happen to rejoice in that fact. It is a fact that comes about for a number of reasons. One reason is higher wages and improved living standards in the developing world and another is the economic as well as political independence of Commonwealth countries which were once colonies. However, putting those reasons aside, the fact is that some commodities within the EEC are more expensive than they would be were we able to buy them outside.

It is the easiest thing in the world to give lists of individual goods which happen to be in temporary surplus and which are more cheaply available from other sources, but on balance the conclusion must be that not only is stability and security for our supplies obtained by EEC membership but that over the past year we are not paying any more for our food than we would have paid had we not joined the Community.

Mr. Spearing

Will my right hon. Friend give way?

Mr. Hattersley

I think not. I shall give two examples. One example concerns the constituency of my hon. Friend the Member for Newham, South (Mr. Spearing). It is a matter that he will know about well. The recent Commonwealth Sugar Agreement broke down not entirely but largely because of the simple fact—[An HON. MEMBER: "It did not break down."] The reason it broke down was largely if not entirely for the simple reason that the agreement that we negotiated with our Commonwealth suppliers turned out to be unacceptable to them, because the world price of sugar rocketed to three, four or five times more than the agreement allowed them in terms of price. Fortunately, the European Community, by a sugar subsidy amounting to approximately £40 million a year, has relieved the situation during the difficult transitional period and has helped us to accept that cheap food no longer exists.

If my right hon. and hon. Friends want other examples, let me give them one from the temperate area of the world, namely, New Zealand. Hon. Members have spoken about access for New Zealand foodstuffs as if it were access for cheap food. I was privileged to take part in discussions between members of Her Majesty's Government and the Prime Minister and the Minister of Overseas Trade of New Zealand. They emphasised strongly and quite properly that they were interested not only in access for their products but in the price which their products would command once they got here. I do not complain about that. They talked not about "cheap food", but about "a fair price". I do not believe that a fair price would be anything other than a price very near to or possibly above that charged in the European markets by the producers of European products.

I turn to the third point made by my right hon. Friend the Member for Battersea, North—the contention that our sovereign rights to govern Great Britain are diminished by EEC membership. To that contention I make two objections. Let me deal first with the claim that we are accepting a diminution of our rights. Once we examine the areas of policy which it is alleged may in some ways be inhibited or prevented by EEC membership, we discover that what we may conceivably want to do, or, indeed, propose to do, can be done legitimately within the EEC. One obvious example is the extension of public ownership, which I, like many of my right hon. and hon. Friends, regard as a central aspect of the Government's industrial and economic policy.

Article 222 of the Treaty of Rome—much abused but rarely read—makes it absolutely clear that there is no prohibition on public ownership within the Community. Indeed, anybody who knows the Community and its countries understands that some aspects of public ownership—such as the control of or participation in manufacturing industry, which some of my hon. Friends are now advancing as if it were a new idea—have been practised with great success within Europe since the war.

Another example of policy which, we are sometimes told, membership of the Community would crucially inhibit, is our ability to carry out policies of choice, namely, in the area of regional aids. I wish to say two or three things about that subject, even though my hon. Friend the Member for Newham, South legitimately, and with my surprise and admiration, managed to prevent our discussing resolutions relating to it this afternoon. It is an area of activity mentioned in the White Paper, and some words need to be put on the record on that score. Article 92 of the Treaty of Rome calls for the co-ordination of regional aid within the Community. Article 93 makes the Commission the instrument of that co-ordination. But in reality there is nothing in either of those articles that is dangerous or sinister.

First, we have a national interest in the co-ordination of regional aids, making sure that our attempts to improve employment prospects in some hard-hit areas are not frustrated by more prosperous countries outbidding us for scarce investment resources. Let us look at the way in which those articles are implemented. First, they are implemented according to the statement of established policy. That statement is not an invention of the Commission; it has been discussed and agreed by member States. That document makes clear that all present forms of regional aid within the United Kingdom are acceptable. The document also makes clear that in principle no new form of aid is ruled out. Most important of all, the document makes clear that national Governments are the best judges of what is needed in their own countries. The document also makes clear, for reasons expressed by the hon. Member for Manchester, Withington (Mr. Silvester) with great force and clarity, that national Governments are free to decide in these matters, not simply because anything else would be intolerable but because anything else would be impossible. The state of the Community is not such that national Governments operating in it would tolerate limitations on freedom to apply regional policies and choice. My right hon. Friend the Foreign Minister made that clear in successive meetings of the Council of Ministers. His colleagues in Europe accepted that as the reality of the situation. So much for the reality of the diminished sovereignty about which some of my hon. Friends speak so widely.

There is a second point which must be made about diminished sovereignty. Although I do not for a moment contend that within the Community there will not be some pooling of sovereignty and responsibility, some meeting together to make corporate decisions, we should define what we mean by sovereignty and what we hope that a sovereign Parliament and people should do.

At the risk of offending traditionalists in the House, I must say that, to me, sovereignty is not the right of the House of Commons to pass ineffectual resolutions. I do not believe that when the people of Great Britain discuss sovereignty they are thinking of the rights and responsibilities of the House of Commons, whose literal and material powers have diminished as Great Britain has moved from the role of a world Power to the position of a medium-sized Power. Sovereignty is the right or the ability of the British Government to take what decisions seem right to them on behalf of the British people. Those decisions, and the ability to take them, are much more conditioned by economic power and our political influence in the world than by the procedures of this House.

We have done all we can to safeguard the procedures of this House. Having sat through many late night debates—as, I hope, has my hon. Friend the Member for Wolverhampton, North-East (Mrs. Short)—and having attended many meetings of the Scrutiny Committee, I find it difficult to believe that our attempt to offer the House a unique opportunity of discovering what the Government are about to do before the Government do it, while some hon. Members complain even before the Government have put their powers into operation, is not a substantial step towards ensuring that the rights of the House of Commons are preserved. However, that is only one aspect of the sovereignty issue.

During a previous debate I said that sovereignty did not seem to me to be the freedom and the right to have the lowest growth rate in Western Europe, and the freedom and the right to have all sorts of good ideas which we were too poor to put into operation. The sovereignty which I want to see for my constituents is not only the good intentions of my party and my Government to improve their pensions, to clear their slums, to build the schools they need and to provide minimum wage legislation, but the economic ability of this country and this Government to carry out those policies.

I have no doubt that that economic ability is more likely to be found in Europe than outside. For that reason, I continue to advocate permanent continued membership. I continue to do so in a way which I hope and trust follows those precepts of moderation which have been urged on all of us today and which will, I am sure, continually be urged on us in the weeks that spread ahead. I do so for a number of reasons. One is my feeling about the party of which I have been a member for 25 years. Another is that I believe that a debate on a subject of this importance is best conducted in a spirit of calm moderation. Thirdly, I do not believe that on referendum day the British people will be in a mood to vote for whoever makes extravagant claims and overstates either the potential advantages or the potential disadvantages of Community membership. The White Paper does not do that. As the hon. and learned Member for Beaconsfield was gracious enough to point out, the White Paper is specific in listing those areas where renegotiation has not gone as far as we would have hoped.

The construction of the White Paper was not an attempt to pretend that we have achieved all the objectives which the Foreign Secretary set himself on 1st April. It was an attempt—I believe a successful attempt—to describe a renegotiation which in many ways altered and improved the terms of our membership of the Community. Above all,. paragraph 150 contains an assertion of the Government's conclusion that, the terms being now what they are, it is in the interests of the British people that they should vote "Yes" in the forthcoming referendum.

I believe that we are now at a point at which we must advocate the advantages of British membership resolutely and boldly, not simply talk about the terms, important though they are, but triumphantly describe the advantages to Britain of EEC membership. I propose to continue doing so until referendum day, not because of my efforts but because of the efforts of others. I have no doubt what the outcome of that referendum will be.

Debate adjourned —[Mr. Pavitt.]

Debate to be resumed tomorrow.

Mr. Speaker

Seventeen back benchers have been called today. I already know of more than 30 hon. Members who wish to speak tomorrow. I understand that there will be a motion to suspend the rule for two hours tomorrow. Nevertheless I hope that hon. Members will consider between now and tomorrow how to shorten their speeches rather than to lengthen them.