EUROPEAN COMMUNITY (MEMBERSHIP)

HC Deb 08 April 1975 vol 889 cc1151-89

Question again proposed.

Mr. Dell

In any case it should not be imagined that overseas investment by the United Kingdom began when we entered the EEC. My hon. Friend the Member for Bristol, North-West quoted, I believe correctly, figures for overseas investment by this country in 1973 and 1974. They represented very large sums and most of the money did not go to the European Community, although I accept that large amounts did go there in 1973.

As a country we have invested large sums abroad for a very long period and I believe that the real problem is that we have invested in the slow growth Commonwealth rather than in fast-growing Europe. In any case, overseas investment by British firms is now done by retained profits and by borrowing abroad, and these are processes which it would be very difficult for a British Government to control whether Britain was in the Community or not.

I know that there is a fear that the free movement of capital will lead to the centralisation of economic activity within the EEC. I doubt whether that will happen. I think that there are certain countervailing tendencies, including regional policies, which will prevent that. However, from that point of view I believe that we are better off within the EEC because the United Kingdom will be a more attractive place for both British and American firms to invest in if we are in the Community than if we are outside.

Mr. Ron Thomas

Will my right hon. Friend give any indication why over the last couple of years there has been a failure to bring about capital investment in Britain? We were told years ago that the great challenge of the Common Market would mean that capital investment would flow into Britain, yet the reverse happened. We have had a slump in capital investment at home and a massive movement of it overseas.

Mr. Dell

If my hon. Friend wishes to raise debating points with me I must tell him as a matter of fact that since we entered the European Community investment in this country has risen by 20 per cent. I do not happen to attribute that to our entry into the EEC. I believe that it will take time before the beneficial economic effects of membership of the EEC can be identified. Nevertheless, that is a fact if my hon. Friend wants the facts.

The last supposed advantage of removing ourselves from the European Community in favour of this other possible alternative is that an industrial free trade area would involve no risk to sovereignty. I do not underestimate the sovereignty argument, particularly as it may be used and abused during this campaign. It is obviously the prime duty of Governments to protect the interests of their citizens, and it is right that we should, as the manifesto said, reject any kind of international agreement which compelled us to accept increased unemployment for the sake of maintaining a fixed parity.

The problem of European monetary union has been raised by a number of hon. Members. I repeat what has been emphasised—that this is a very distant objective and that any progress towards it will be subject to veto in the Council of Ministers by a Government which will be responsible to this House of Commons. I am not a supporter of the federalistic conception of Europe. I believe that Europe is an association of sovereign States for certain common purposes, States which have agreed to pool their sovereignty in the interest of these common purposes. There is nothing in sovereignty which says that a Government should not combine with other Governments for common purposes. On the contrary, the concept of an economic alliance is not strange to this country. Indeed, one might say that this country invented it in the form of the Commonwealth. It broke down in the case of the Commonwealth, because the economic interests, especially, of the developed members, conflicted too greatly. Incidentally, we cannot expect the underdeveloped members to continue to supply us with cheap food.

As an economic alliance the European Community is far more suitable for this country. Power is as important in economic matters as it is in political and defence matters. There was no greater expression of that principle—one that has at any rate helped to influence me, although I had little doubt at the time, during the debate in 1971—than the decisions of President Nixon on 15th August 1971, which were the greatest expression of power in economic affairs since the war.

For this country an economic alliance is still useful in trade matters, in the convergence of economic policies which our membership of the European Community encourages and in the way in which we can discuss with other members the development of their policies—whether, for example, Germany and Holland should reflate in order to ease our balance of payments problems—as we do regularly in the Council of Finance Ministers.

Mr. Hooley rose—

Mr. Dell

I shall come to my hon. Friend, because he made a point in this context. He said that my right hon. Friend the Chancellor of the Exchequer achieved the continuation of the IMF oil facility as a representative of this country, and that the Community had no influence on that success. I am sure that my right hon. Friend would confirm that in developing those policies in Washington at the IMF he had the inestimable and valued unanimous backing of other members of the Economic Community.

Mr. Hooley

The point 1 was making was that when the oil crisis hit the European Community it was totally helpless to cope with it. It was only by a combination, through the IMF, of all the industrial countries of the world—the United States, Japan, Canada and the Europeans—in a genuine international forum that the problem was solved. It was not done in Brussels.

Mr. Dell

I accept that it took the European Community some time to confront the great new crisis which the world faced 18 months ago. However, the Community is now developing joint policies to face that situation, and it is exercising a European influence in the world.

Mr. Peter Kirk (Saffron Walden)

Does the right hon. Gentleman not agree that in the oil crisis the end product was that no member of the European Community went short of fuel, as a result of the decisions taken by Ministers within the Community, although they were unable to make them public at the time?

Mr. Dell

We had our own problems, but fortunately we have got over them.

I agree with those who say that the dangers of coming out are far more serious than the costs of not joining in the first place. Undoubtedly, there would be a grave shock to confidence within this country and outside, a grave shock to industrial confidence. It would increase the difficulties of financing our balance of payments deficit. We would engender uncertainty about where we expected to find our future. To come out would be a dangerous course for this country to take. I very much hope that the British people will vote "Yes".

Several Hon. Members rose—

Mr. Speaker

Order. We are now in extra time. There have been some intolerably long speeches, particularly when I have not been in the Chair. I hope that hon. Members who catch the eye of the Chair from now on will try to speak for no more than about 10 minutes.

10.10 p.m.

Mr. Peter Blaker (Blackpool, South)

The House will agree that in a powerful speech the Paymaster-General has poured a salutary douche of cold water over those right hon. and hon. Members who have suggested for months that there is an easy alternative to membership of the Community to be found in membership of a free trade area. His speech killed that argument stone dead.

I want to deal with three other anti-Market fallacies. I hope to make at least one new point. The first fallacy is that our membership of the Community is an aberration from our traditional foreign policies, which have required us, when we have had to choose, to give priority to the open seas, the Commonwealth and the Empire, over Europe. I do not accept that there is now any conflict between our interests in Europe and our interests in the Commonwealth. But it appears clear to me that historically we have always had to give first priority to the home base, by which I mean Europe, simply because it is geographically our next-door neighbour. In saying that, I do not intend in any way to belittle the importance of the Commonwealth. My Commonwealth credentials, by blood and upbringing, are strong.

I should like to give an example of our having given priority to the strength of our home base at the expense of the distant world. In the Napoleonic wars we gave Indonesia to the Dutch in order to secure their support against Napoleon. It is only recently that the myth has arisen that our natural priority is in the distant seas. The truth is that the main thrust of British foreign policy has always had to be that we should not allow a strong grouping of powers on the Continent unless we are a member of it. If we pull out of the Community, there will be such a strong grouping of which we are not a member, in which we shall have no voice in the formulation of policy. I am not suggesting that such a grouping would be hostile, but over the years its interests and ours would diverge.

The fact that we have had to have what the Government call a renegotiation is an illustration of that proposition. We have had to have a renegotiation because in the 12 years or so during which the Community existed, and we were outside, it adopted measures which we should not have adopted if we had been inside from the start. This grouping on the Continent, of which I assume we should not be a member if we left the EEC, would steadily grow stronger relative to us, and in due course would rival in strength the United States. It would move into new fields of activity which it has not yet touched.

It is already heavily involved in international trade. We have worked out with our partners a common stand for the GATT negotiations which are now beginning. If we stay in the Community when the negotiations reach their climax a year or two from now we shall be able to influence its decision when we come to the final bargain with the Americans and Japanese on the solution. If we are outside, the decision will be taken by the Japanese, the Americans and Europe, and we shall be swept on one side.

The Community is already working out policies in the International Monetary Fund. I am glad that the Paymaster-General put the record straight in reply to his hon. Friend the Member for Sheffield, Heeley (Mr. Hooley), about the important help which the Community gave to the Chancellor of the Exchequer in securing the arrangements for recycling petro-dollars.

The Community is working out policies vis-à-vis the developing world. It will move on in the coming years to work out policies towards Portugal, Spain, the Mediterranean, Africa and Eastern Europe. And the questions which it will ask itself will be, "what are the interests of our members? What interests do we have to protect?" It we are not a member of that group they will not be asking what our interests are. Indeed, our interests will be left on one side. If we are inside we can shape the policies of the Community. If we are outside we cannot. We have shown already how we can shape those policies in the preparations for the European Security Conference, in the Lomé Convention and in other ways. Inside we shall be partners: outside we should be pawns.

The second fallacy about which I want to speak is that if we leave we can somehow jump immediately back to the situation in 1972. We have seen from what the Paymaster-General has said that we could not do that in relation to trade. What he did not say was that our trading relations with some 80 countries are now governed by agreements which we have made through the EEC. It is not a question only of our relations with the Community itself, or indeed only of our relations with EFTA. Our trading relations with the Mediterranean countries, with the 46 Lomé countries, with other countries, are now governed by agreements made because we have been members of the Community, and the mind boggles at the complications which would result, were we to come out, when it came to the renegotiation of our trading relations with all those countries.

We could not jump back to 1972 for another reason—that we would have broken a treaty. My hon. Friend the Member for Banbury (Mr. Marten) pointed out that my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) said that we could break the Treaty by coming out, but nevertheless, if we did break the Treaty, our standing in the world would be very seriously affected. The United States, for example, would regard us from then on as a less-reliable ally. The United States would be less prepared to undertake serious negotiations with us in the future.

In addition, we could not go back to 1972 because our economic strength has been drastically reduced since 1972. It is now true, I understand, that one year's surplus of the OPEC countries could buy up the whole of British industry. That was not the situation in 1972, and that is the measure of the diminution of our economic importance in the world if we stand on our own.

I come to the third fallacy, and I think the most serious. It is claimed by hon. Members who want us to come out of the Community that because NATO is the main organ of Western defence, our departure from the Community would not hurt the security of the West or the prospects for peace. I believe that the greatest danger to peace at the present time is the disunity and the weakness of the Western world. I believe that the Western world is beginning to show signs of an illness of the will which has to be arrested, and arrested fast, because if there is one thing which could tempt the Soviet Union to abandon its policy, which it describes as détente, and to go in for an adventure, it is the thought that. because of the fragmentation, the weakening of the will, of the Western world, it could make a swift coup here or there in Western Europe. "The West is on its knees". Those are not my words. They are the words of Alexander Solzhenitsyn spoken only about two years ago—but spoken before the events in Greece and Turkey, spoken before the events in Portugal, spoken before the events in Vietnam and Cambodia, spoken before the present disarray in the United States. If he thought that the West was on its knees two years ago, what must he think now?

The psychological effect of our departure might deal a shattering blow at the solidarity and political will of the Western world. Our best chance of maintaining our security and, indeed, of achieving results from détente lie in the West being united, strong and firm, and that is why I hope that the House will on Wednesday decide by a massive majority in favour of our remaining in the Community.

10.20 p.m.

Mr. Doug Hoyle (Nelson and Colne)

I have listened intently to the debate, and it seems to me that we have been here before. Many of the speeches could have been taken from the debate of two years ago. I well understand why the Opposition are so enthusiastic about the principle of the Common Market. What I fail to understand is why so many of my hon. Friends are intent on being in a capitalist institution.

Listening to the debate, it has been difficult to realise that when hon. Members have referred to the Commission they have been speaking about a tight bureaucratic machine controlled by men who are not responsible to anyone in an electoral sense. It has been difficult to imagine that the common agricultural policy, which has created all the surpluses, is still with us. We have had butter and beef mountains and a wine lake, and the Community is steadily going in the same direction with dried milk. Very soon the warehouses in the Common Market will be bursting with wheat.

However, one would not have realised listening to this debate that that was so. One would have thought that everything in the garden was lovely. One would not have believed that we were engaged in possibly the most serious debate which has taken place in this House this century, and that we were talking about our right to self-government and the Government's right to carry through the programme on which they were elected without outside interference. One would not have believed that we were determining our right to impose taxes and the price which we should pay for food.

The whole debate has seemed so unreal. We have heard about the dynamic effect that staying in the Common Market will have on this country. Only a short time ago we heard about the dynamic effect that it would have if we joined and how it would lead to increased investment. What has been the result?

Mr. Churchill (Stretford)

The Labour Government.

Mr. Hoyle

Why do we have the Labour Government? It is because the Tories got themselves into trouble. But we shall not continue to have the Labour Government if we remain in Europe running up a deficit which in 1974 was over £2,000 million and is not getting better. Indeed, it is getting worse.

My hon. Friend the Member for Bristol, North-West (Mr. Thomas) referred to the question of regional policy. The hon. Member for Manchester, Withington (Mr. Silvester) and my hon. Friend the Member for Farnworth (Mr. Roper) have spoken about the benefits from membership of the EEC which have accrued to the textile industry. What has happened in the textile industry has happened in many other industries. The deficit on our balance of trade with Europe has increased from £4 million to £69 million. Far from helping us in relation to cheap imports into this country, membership of the EEC has added to our burdens because we have had to take cheap imports from the Mediterranean associates—so much so that the textile industry is on short-time working, and unless it is given help urgently there will be no textile industry in this country. Is that what hon. Members mean when they talk about the dynamic effect of being in the Common Market?

A short while ago some of us wrote to the Secretary of State for Industry about the effects of the Common Market upon the Industry Bill. We waited a long time for an answer to our letter. We then learned that the difficulty was due to the fact that the Industry Department's view was different from that of the Foreign and Commonwealth Office. Eventually, after a lot of wrangling and pressure, we got an answer—from the Foreign and Commonwealth Office. I should have liked an answer from the Secretary of State for Industry.

I am sorry that we shall not be hearing from those Ministers who have dissented. although I gather that perhaps one of them will make his voice heard before the debate ends so that we can hear the two sides in the argument. At present we have a "Tweedledum and Tweedledee" situation on the Front Benches. I should like to hear why certain Ministers have dissented. When we examine which Ministers in the Cabinet have dissented we find that they are the Ministers responsible for Trade, Industry, Employment and Energy. These are all key areas. There is a good reason why they do not find the terms acceptable.

Mr. Churchill

Why do they not resign?

Mr. Hoyle

We must wait and see. Why should they have to resign to make their voice heard?

Mr. Churchill

Collective responsibilities.

Mr. Hoyle

The hon. Gentleman knows all about collective responsibility. That is the way his party went down to defeat and condemned its leader afterwards.

I want to ask about the control we have over our own economy as long as we remain in the Common Market. What has not been denied is that the Commission can intervene in this country. If necessary it can overrule our laws, passed by this Parliament, by going to our courts. We could have the ludicrous situation when an appeal could go to the House of Lords and it could overrule the Commons.

At the moment there is a similar case in France where the wine growers are in a militant mood because of the import of Italian wine. The Commission believes that it has a justifiable case for taking the French Government to the courts. It believes that it would win. What is happening? There are other voices. Indeed, the President of the Commission has warned that it is a difficult time to take that kind of action. He has warned that if the Commission does so it might alarm the British public and could affect the way they will vote in the referendum. It is on such occasions that the cat is let out of the bag, if only briefly.

I believe that our economic salvation lies with North Sea oil. Shall we be able to charge one price for the oil in this country and another price in Europe? As long as we remain in the Community there will have to be one price for ourselves and the rest of the Community. We shall lose control over a vital area of our economy. I imagine that that is why the Secretary of State for Energy does not find the White Paper acceptable.

The Government have got themselves into a remarkable situation. They are going along with their natural enemies, the whole of the Liberal Party and most of the Conservative Party. For the first time a Labour Government are allied not with the TUC but with the CBI. They are on the side of Fleet Street, not on the side of the common people. They are on the side of the privileged and not on the side of the under-privileged.

That is not why I am a member of the Labour Party. I am a member of the Labour Party because I believe in a Socialist society. As long as we remain in the Common Market the task of the Labour Party in creating a Socialist society will be made more difficult. That is why I hope that the people will reject the terms contained in the White Paper and will give a resounding "No" when their opinion is tested.

10.30 p.m.

Dr. Alan Glyn (Windsor and Maidenhead)

I wish to elaborate on the case for our staying in the European Economic Community. If we leave, our economic problems will not be solved, as was so well demonstrated by my right hon. Friend the Member for Stafford and Stone (Mr. Fraser).

It would be a disaster for us to leave the Common Market. To do so would be in breach of a solemn treaty, and that would result in a loss of confidence in us throughout the world. What nation, group of nations or association is likely to give us better terms? If we break one treaty, are we likely to be allowed to conclude another? We should lose all the economic advantages of membership not only for ourselves but for our Commonwealth partners and the undeveloped countries. Our Commonwealth partners have signified that they would be reluctant for us to leave the Community.

What is the alternative? The Paymaster-General is the only one to have made any serious alternative suggestions, and he said that those suggestions were not viable alternatives to our remaining within the Community.

From another angle, can this country go it alone and still afford to pay for its defence with or without United States help? The time has come for the European Community to share the cost of our defences because we in this island are unable to pay for them ourselves.

Those are my main reasons for believing that we should remain within the Community. I pay tribute to the Government for their renegotiations. They should not be disregarded, but we must remember that they have in no way altered the fabric of the treaty. They are negotiations which would normally have been conducted as a continuation of the terms of the treaty, but they have been conducted under the guise of renegotiations.

The holding of the referendum takes away the sovereignty of Parliament. This will not be the only referendum. There will be a series of referenda on other matters which can only detract from the sovereignty of Parliament.

We all want to see a more democratic European Community. The argument about loss of sovereignty is a myth. Joining any organisation, be it NATO or any other, means some loss of sovereignty. But the most important consideration is that there is no other solution. Out of Europe we should be isolated and alone. the strength of sterling would be weakened and we should be unable to find alternative markets. World confidence would be shattered by the breach of the treaty.

The answer to our problems is here on this island, and is in our own hands, but we cannot solve them alone. We shall be far better off if we remain in a forward-looking expanding Community which is capable of ensuring a better standard of living for future generations. Our duty is to remain in the Community, to strengthen it and to exert our influence in making sure that we continue to exert our traditional influence on world affairs, and we shall do that better inside the Community than isolated and alone.

10.35 p.m.

Mr. Ifor Davies (Gower)

I am glad to have the opportunity to endorse the opening remarks of the hon. Member for Windsor and Maidenhead (Dr. Glyn). The hon. Gentleman paid a tribute to my right hon. Friends for their achievements within the past 12 months as regards the EEC. They were confronted with a difficult task. The House should be generous enough, as the hon. Gentleman has been, to acknowledge the success of their efforts. I know that there have been various degrees of compliments paid. Of course, some say that there has been no success and some say that the success has been minute, but I think that the whole House should acknowledge that the efforts of my right hon. Friends were substantially successful.

There has been a growing tendency to move away from the argument on terms back to the argument on the principle of pro- or anti-Europe. Whether we like it or not, we are all Europeans. We cannot escape from that simple fact. There can be no difference of opinion when I say that the issues concerning Britain's entry are complex in their nature and most wide ranging in their scope. It is for that reason that many people are greatly perplexed and confused.

Whatever criticisms there may be of this Parliament, I am convinced that many people throughout the country are looking to the House this week for leadership. That is why I greatly welcome the positive wording of the White Paper and the clear leadership, if I may say so, that was given yesterday by my right hon. Friend the Prime Minister. I do not pretend that the EEC offers a magic wand with guaranteed solutions to all our problems. However, it offers a path along which solutions may be found. In the last resort the economic advantages may well be a matter of balance and will depend upon judgment. I have enough faith in parliamentary democracy to believe that the majority of the people, and all those who have been so deeply involved in the renegotiations, will accept the judgment of the Government.

I confess that the one issue which caused me some concern at the beginning was the possible effect of the EEC upon our regional policies. The fact is that more concern has been voiced in Wales about the effect of entry on regional policy than on any other issue. Some of my hon. Friends were so worried that they wrote pamphlets about it, but I understand that attitude because the greater part of Wales is designated as a development area.

Nothing therefore gives me greater pleasure tonight than to read the clear assurance contained in paragraph 53 of the White Paper on Regional Policy, which reads: New principles for the co-ordination of regional aids within the Community will allow the United Kingdom to continue to pursue effective regional policies adjusted to the particular needs of individual areas of the country. The Communication setting out these principles acknowledges that national governments are the best judges of what is required in their own countries… I accept that firm declaration. It places my mind at rest regarding the attitude of the EEC towards regional policy. Despite regional aids the best way to help the regions is to ensure the greater strength of Britain's economy as a whole. That in turn concerns the Principality of Wales. It is an inescapable fact that the Welsh economy is deeply and extensively involved in the overall British economy. I am sorry that the Plaid Cymru Members are not present. I wish to say to them that any attempt to quantify the effect of the Common Market in Wales in particular as distinctly separate from Britain is unreal and misleading. The present campaign in Wales by Plaid Cymru to set up EFTA as a real alternative to the Common Market has already been destroyed by the remarks of my right hon. Friend the Paymaster-General.

If it is considered that membership of the Common Market destroys some freedom of action which otherwise would be open to Britain, I remind the House that freedom for any nation to choose this or that course of action is not determined merely by willingness or refusal to sign treaties or to enter into international obligations, but by the strength and vigour of the nation. That was the message of the Prime Minister's speech yesterday. Every historic choice implies challenge as well as opportunity. To take advantage of the Common Market might mean accepting risks, but this is a characteristic of anything in human existence worth doing.

This is not the time to take a defeatists attitude. British industry can call on skilled manpower, management and technical ingenuity second to none. The place in which to exploit those gifts is within the Community, and we should not withdraw into deadly isolationism and blind and narrow nationalism.

Apart entirely from the economic argument, I should like to ask my hon. Friends what has happened to our vision and our commitment to internationalism. We often hear comments about what has been said at annual conferences. I vividly recall two conferences which passed with overwhelming majorities two remarkable declarations — declarations which I find most refreshing and most inspiring on the eve of another historic and critical decision. Other hon. Members quoted in this debate passages from annual conferences, and I do not apologise for quoting majestic phrases from conference declarations. The first Declaration is from the Labour Party conference in 1962, which I would ask my hon. Friends to note: The Labour Party regards the European Community as a great and imaginative conception. It believes that the coming together of the Six nations which have in the past so often been torn by war and economic rivalry, is in the context of Western Europe, a step of great significance. It is aware that the influence of this new Community on the world will grow and that it will be able to play… a far larger part in the shaping of events…than its individual member States could hope to play alone. It is these considerations, together with the influence that Britain as a member could exercise upon the Community—and not the uncertain balance of economic advantage—that constitute the real case for Britain's entry. Lastly, I quote from another declaration which was carried at the Labour Party Conference in Scarborough in 1967—again by an overwhelming majority: The Labour Party regards the enlargement of the EEC as a first step towards the creation of a wider and more unified continent. We believe that a major objection of an enlarged European Community must be to eradicate the tensions and mistrust which still keep East and West sharply divided. Britain, inside the Common Market, must remain faithful to her basic commitment to reduce East-West tensions, promote disarmament and seek the most effective means of assisting the development of the poorer countries.' We have already heard evidence of the measures which have been taken to achieve that end. The declaration continued: Together with her European partners, Britain must also forge a new will and new endeavour to overcome the poverty and disease which still afflict two-thirds of the people of the world. We said: The challenge is immense and the opportunity unique. Tomorrow night that same challenge confronts the House. I hope that my hon. Friends will not betray the faith of the early pioneers of this movement so admirably described in the 1962 and 1967 declarations.

10.46 p.m.

Mr. Maurice Macmillan (Farnham)

The hon. Member for Gower (Mr. Davies) referred to the tragic division of Europe by the Iron Curtain. The argument about what should be the relationship between the United Kingdom and the rest of Europe has continued for a long time. It is about 20 years since I made my maiden speech on this subject. We are still arguing about this matter. This was always a political as well as an economic question, contrary to one or two suggestions which have been put forward this evening. That is demonstrated by the fact that there has never been any question of allowing the neutral countries of Europe to become members of the European Community.

The United Kingdom is now a member of the EEC. However, today the long debate which has continued for some time has changed. This debate and that which will take place during the referendum campaign are different from that which led up to our joining the Community. For we are not debating, as we did 20 years ago, the question whether we should become engaged. That ended with the curiously illicit relationship with EFTA. Nor are we talking, as we did 10 years ago, of the terms of a marriage settlement. I now argue against taking the marriage through the divorce courts. This is the point at issue—not shall we join, but shall we renege on our treaty obligations and leave the Community'?

I do not think that the arguments put forward in the debate about the benefits or otherwise which we have gained in two and a half years are in the least relevant. I find it specious and disingenuous to seek to blame high unemployment, inflation, balance of payments problems and the rest of our difficulties on our membership of the Community, especially since the period of our membership has coincided with an unprecedented increase in world food prices and primary products and an energy crisis which has affected the whole of the civilised world. Any wounds to our economy and body politic, apart from those which have been self-inflicted, have not derived from our relationship with Europe. In any case all that was ever claimed for the Community in the economic sense was that it would give us an opportunity which was no longer available to us elsewhere. That is the point we must bear in mind with regard to economic considerations.

Any arrangements we may be able to make from outside the Community will not give the same opportunities as full membership. Nor will they match the advantages which we grew used to during the years of our great Empire, for it is an illusion commonly held in this country that the United Kingdom was always a successful manufacturer and seller of goods abroad. That is not true. We relied very heavily on our overseas investments, since 100 years ago the amount we invested abroad was about three times our gross domestic product. Now the figure is about one-third of our GDP, although I think that the yield has become higher than it used to be.

Because British insurance companies paid out on the San Francisco earthquake and the American companies did not, we got the great part of the reinsurance business of the United States, and now we have it of a great deal of the rest of the world. But if we were no longer in the Community, there would be people ready and willing to set themselves up to try to take over that small proportion of invisible exports from us.

We have not held our own in the open market. We used to have terms of trade always in our favour because we controlled the economies of the countries with which we traded. We forced them to sell cheap to us and to buy their goods dear from us. But even before the Second World War we never succeeded in covering more than 75 per cent of our import bill with physical exports but relied upon invisibles, which was far easier, first in the Empire and then in the Commonwealth. Then the advantages of the closed economy extended beyond the Commonwealth through the sterling area.

There is a new relationship now. We have to contend with a new balance of trade power between the primary producers and the manufacturing countries. That is a balance which is especially harsh to the United Kingdom because of our dependence on imports and because of the size of our population.

I do not think that we shall find it easy to deal with these problems in isolation. The difficulties of petro-dollars, the use of the Arab money, the dislocation that it could cause by movement across the exchanges, and all the problems of helping the developing countries are far more easily resolved with United Kingdom membership of the European Community. I agree with the hon. Member for Birmingham, Ladywood (Mr. Walden), who said in the course of his great speech that we should be facing very severe difficulties and so would many other parts of the world if at this stage we were to leave the Community.

The criticism has been made that Europe did not act in a united way over the energy crisis. My hon. Friend the Member for Banbury (Mr. Marten) quoted President Ortoli's strictures on Europeanism and on European united action. I agreed with those strictures. But that is no reason for deserting the Community. It is all the stronger argument for remaining in it. When in a lifeboat with its engine not working very well, there is a great deal to be said for mending the engine. There is damn all to be said for dropping it overboard, and still less for jumping into the sea and trying to swim home.

The arguments for remaining in are political as well as economic, including the great question of defence. The only contribution that we can make to Europe, to the Commonwealth and to the United States is as a member of the Community. We are little use to anyone else or to ourselves except as part of a greater grouping.

I think that the Community is developing much more on the lines of the old Commonwealth than on federal lines, with meetings of Heads of State much more like the old Commonwealth Prime Ministers' Conferences. I believe that that is the way it will go for some time.

Looking at the world, the Community is a small enough group, even with the United Kingdom. We have the Iron Curtain countries to the east. Now we have the Far Eastern countries being handed over to Communist control, with the United Kingdom withdrawing from her bases there. We have Russian influence developing in the Middle East. We have all the problems of the United States bases and the possible loss of the Azores. We have Communist penetration in Portugal and elsewhere in Europe.

If those difficulties are beginning to drive the United States into the start of a more restricted inward-looking policy—the first hints of isolationism—what value are we in the United Kingdom to the United States, to Western Europe and to the Commonwealth? Feebly armed, having abandoned our bases in the Middle and Far East, what can we do to help, except within the Community?

A great argument has been made that we can do little because we lose our sovereignty. But whether we are talking about nationalism or the supremacy of Parliament, the threat to sovereignty comes not from the European Community but from other places—as has been pointed out by right hon. and hon. Members on both sides of the House today—both outside the country and, alas, from within.

My hon. Friend the Member for Banbury, in talking about sovereignty, distinguished between sovereignty and power. Politics are about people and power. I am not willing to trade the semblance of sovereignty and, in doing so, to give up the chance of this country building up real strength, power and independence so that our people can remain free. There is a great danger that we seek the shadow and lose the substance. I am interested in the substance.

Whether we like it or not, our freedom as a country and as a people and our ability to maintain the rule of law, depend not on the technical shadow of sovereignty but on the reality of political power. In my view, that political power is available to the United Kingdom only as a full member of the European Community.

10.58 p.m.

Mr. Bruce Douglas-Mann (Mitcham and Morden)

The right hon. Member for Farnham (Mr. Macmillan) leaves me in some difficulty. I had intended to start my speech by saying that, having listened to and read the greater part of the debate, I found myself in substantial agreement with the majority of hon. Members who have spoken. However, I find myself in strong disagreement with the right hon. Gentleman, as will become apparent from my speech.

I think that to a considerable extent both sides in this dispute are right. I have been opposed to British membership of the European Economic Community for many years, and I still am. But I agree with the pro-Marketeers that we shall have to pay a very heavy economic price for withdrawal from the Community. I did not think so in 1971. At that time I thought that the balance of economic advantage lay outside the Community. I now accept that in the short term and, indeed, for quite a number of years we shall be relatively poorer outside rather than in the Community. Nevertheless, I believe that it is in our long-term interest to withdraw and that it is right for us to do so.

It would be foolish to blind ourselves to the economic effects of withdrawal. Not only have our trading patterns of the past been disrupted, but we are now over our ears in debt, and a great deal is on seven-day withdrawal. We cannot meet those debts. If our creditors lose confidence in us—there is a great deal of evidence that a decision to withdraw from the Common Market would certainly result in a massive loss of confidence—we shall face a collapsing pound. Then, only massive help from the IMF, inevitably on terms of great cuts in public expenditure, the elimination of the Budget deficit and, probably, of budgeting for a surplus which would involve cutting sharply into consumption and employment, would enable us to go on trading at all.

Nevertheless, and despite the very distasteful immediate future I am foreseeing, I believe that it is right for us to come out, because continued membership will strengthen those tendencies of our economy and the economies of the rest of the developed countries which will ultimately lead to far greater disasters than those I am now envisaging.

My opposition to our membership has been based on a number of grounds. The first is that the fundamental purpose of the Treaty of Rome—this was illustrated by the right hon. Member for Farnham when he referred to compelling countries to sell to us cheap and buy from us dear, although admittedly he was talking of the past—remains the fundamental purpose of the EEC today. The right hon. Lady the Leader of the Opposition certainly confirmed that when she spoke about bargaining for raw materials as a Community. Exactly. One of the fundamental and original purposes of the formation of the EEC was to ensure that the terms of trade upon which rich Europe traded with the relatively poor parts of the world were advantageous to the rich parts and disadvantageous to the remainder.

In the short term that may seem very attractive to us, but in the long term I am quite sure that it is not. I am sure that, apart from the fact that we now live in a world where nuclear weapons are cheap, where it is easy to disrupt and easy for a small and economically relatively unpowerful country to cause immense damage to a rich country, we live in a world in which we are far more economically interdependent than ever previously. We have had the illustration of the action of the OPEC countries, but we have had many other less dramatic illustrations where a small change in one part of the world or a stoppage in one part of the economic machine, can cause the entire machine if not to halt completely at least to run very unevenly and very unsatisfactorily.

We cannot really suppose that indefinitely into the future the poorer parts of the world will tolerate the increasing division between the rich parts and themselves. I do not believe that it is in our interests, let alone those of the rest of the world, for these economic divisions to be perpetuated.

It is one of the fundamental purposes of Europe, although it is certainly not expressed as such, to ensure that Europe trades advantageously with the rest of the world and at the expense of the rest of the world. I accept, of course, that the Lomé Convention has indicated a greater degree of willingness on the part of Europe to trade more advantageously with selected poorer countries. But basically the position of Europe is that of a rich man who maintains "I must get richer so that I can go on giving something to charity".

My second and closely associated objection to British membership and the effects of membership is that membership will inevitably tilt still further the dependence of the economy towards manufactured goods and away from the provision of public and private services. I do not believe that the world's resources —energy, minerals the ingredients of plastics, chemical fertilisers or any of the other supplies—will be sufficient to enable us to continue the dependence of the economies of the developed countries on the consumption of manufactured goods to the extent that they do at present. We have an economy which depends, as does that of every developed country, on our consuming 2 per cent. or 3 per cent. more each year in order to maintain full employment. We have had many benefits from this system. As long as the world's resources seemed unlimited, that was fine. But our world's resources are finite. The world's population is growing and the demand on those resources is growing. With a rising population and fixed world resources we cannot indefinitely continue to consume 2 or 3 per cent. more per head per year and it is an inevitable feature of membership of the Common Market that the advantage in the economy will lie in manufactured goods rather than in the provision of services.

The only argument I have heard advanced against the proposition that we cannot continue to consume more indefinitely, was advanced by Professor Beckerman who asked why we should make sacrifices for the sake of future generations. That viewpoint is held by some, but few who seriously consider the matter can dispute that we are on the way to inevitable disaster, when the resources of the world will no longer sustain the expenditure and extravagance of the present time.

Membership of Europe will inevitably make it more difficult for us to change direction. The main economic advantage at present lies in the existence of a large market for mass-produced goods, and there is consequently an inevitable relative disadvantage for the provision of services, whether they are private services —ranging from the repair of shoes to motor cars—or public services like housing and public transport.

We can continue to have full employment, growth in the gross national product and steadily improving public services in spite of the problems of resource and energy supply, but it requires a deliberate shift in the emphasis of the economy towards forms of consumption that use less resources and more labour-intensive means of production. EEC membership is tilting us the other way. Irrespective of membership of the Community we have to take some drastic steps to correct the alarming state of our economy. We are living at 105 per cent. of our real national income. If we compare the situation from 1968–71 with that of 1974 we find that in the earlier period we were spending 11 per cent. of our real national income on private investment, 26 per cent. on public expenditure and 62 per cent. on private consumption—a total of 99 per cent. In 1974 we spent 11 per cent. on private investment, 27 per cent. on public expenditure and 66.8 per cent.—an increase of nearly 5 per cent.—on private consumption—a total of 105 per cent. I am taking my figures from the Review of Britain's Economic Prospects published by the University of Cambridge.

Perhaps if we stay in the Market we can go on borrowing enough to finance that deficit until North Sea oil comes to our rescue, although by then we shall be owing so much that we may have been forced to sell so many of our assets that the oil will come too late to rescue our economy. I accept the argument that the only safe and tolerable way to overcome our economic difficulties lies in some form of selective import controls coupled with increases in taxation to finance improved public services. That, however, would not be practicable within the EEC.

We can live tolerably within our income, reduce our demands on the world resources that the developing countries need much more than we do, maintain full employment and improve the public services which have been starved for so long. But we cannot do that within the Community—or, indeed, outside—unless we are prepared to accept some measure of austerity.

I do not relish the prospect of austerity. I am as self-indulgent as the next man, perhaps more so. However, I feel that it is our duty to recognise that even a relatively bleak immediate short-term future is preferable to continuing on a course which leaves a large part of the world hungry and in which we ourselves face ultimate disaster through using up the resources on which we all ultimately depend. We should therefore withdraw from the Common Market.

11.10 p.m.

Mr. Churchill (Stretford)

The hon. Member for Mitcham and Morden (Mr. Douglas-Mann) will not expect me to support his recipe of not only withdrawing from the European Economic Community but, it would appear, declaring war on the GATT countries by setting up import restrictions once outside EEC.

In opening the debate, the Prime Minister was at pains to square the renegotiated terms with the Labour Party's manifesto. In case he is under any misapprehension on that score, he should be told that the nation does not give a fig for the Labour Party manifesto. What concerns the British people is whether the terms are in the national interest. It is on that issue that they will decide their vote in the forthcoming referendum.

None the less, recalling the days of the Prime Minister's former enthusiasm for Europe, those brave days of 1967 when "We shall not take no for an answer" was his catch phrase, we on this side of the House welcome his re-conversion to the European cause. The right hon. Gentleman now avows his belief and the Government's belief—or most of the Government's belief—that Britain's future lies in playing its full part in Europe. Yet at the same time he says that the Government will be bound by a "No vote in the referendum, even by a small majority on a low poll. How can any responsible political party, let alone the Prime Minister of Britain, knowing full well where Britain's economic, industrial, political and defence interests lie, accept such a proposition? It is not a referendum that we are being put to. It is a lottery. The Labour Government are gambling with the nation's future. If the result is our pulling out of the EEC, they will have a grave and abiding responsibility for the consequences.

The British people are being asked to breach an international treaty solemnly entered into, approved by Parliament by the overwhelming majority of 112, and likely to be endorsed by an even larger majority at the end of the debate tomorrow night. As a believer in parliamentary democracy, I believe that it is tomorrow night's vote that is of consequence, and certainly the only one that can bind this House.

If the Labour Government are so keen to consult the British people on their opinion through the ballot box, they have available the traditional constitutional method: let them call a General Election. The people are being asked to divorce themselves from a market of 260 million people, accounting for 40 per cent. of world trade, and to go out into the cold—and it is very cold outside. One has only to see the pressure that is already being put on Lancashire textiles, even within the EEC, by imports from Hong Kong, Taiwan and Japan. Outside we should face colossal pressures not only in the textile industries but in the radio, television, motor cycle and motor car industries. We should face ruthless competition, which we are far better placed to withstand within EEC, the largest economic unit in the world.

In addition, in the North-West region alone some 300,000 jobs are directly or indirectly dependent on exports to the EEC. Inevitably the prospects for them would be bleak if we were once again to interpose a tariff barrier between us and our single most important export market.

More important than the economic aspect of Britain's membership has been, and always will be, the political aspect. What is at stake is nothing less than the survival of democracy in Britain as we know it. This was the theme of the powerful and evocative speech of the hon. Member for Birmingham, Ladywood (Mr. Walden). It is no coincidence that of all the national parties, of the United Kingdom only the Communist Party and the National Front are opposing British membership. On the other side are ranged the three major democratic parties, the social-democratic Labour Party, the Conservative Party and the Liberal Party.

Mr. Richard Body (Holland with Boston)

Are not the Maoists and half the Trotskyists in that category too?

Mr. Churchill

It depends on what my hon. Friend means by Maoists. Certainly Premier Chou En Lai a couple of years ago in Peking told me: "Please on no account assume that the so-called Maoists in Britain bear any relationship to our form of Maoism". The Chinese Communists are strong in support of our membership of the Community, because they fear the expansionism of the Soviet Union.

Why does the Communist Party in Britain so strongly oppose Britain's membership? There is one reason only: it believes that if Britain remains in the Community it will strengthen free enterprise, it will make the British people more prosperous and it will strengthen democracy—all of which will make the possibility of a Communist take-over in Britain more remote.

But why, one may ask, does the Trades Union Congress line itself up against the Labour Government, and against the basic interests of the British working people? That is a rather stranger and sadder state of affairs. The TUC knows the benefits that have accrued to the working people of the EEC countries with their higher living standards. Yet it wants for the British working people the poor living standards of the Comecon countries, rather than the prosperity of the EEC countries.

There are others for whose view I have the greatest respect although I do not share it, who fear a supposed loss of sovereignty to Brussels for more respectable reasons than some of their bedfellows in this anti-Europe campaign. They are rightly jealous of the powers of this Parliament. But I feel sure my hon. Friend the Member for Banbury (Mr. Marten) will not take it amiss if I say that their case would be even more respectable if they did not at the same time support the anti-parliamentary device of a referendum, which is infinitely more subversive of the sovereignty of Parliament than anything contained in the Treaty of Rome.

Where is the sovereignty of Britain today? The hon. Member for Mitcham and Morden pointed out that the Finance Minister of any one of four Arab countries could, with a single telephone call, bankrupt the British banking system overnight and collapse sterling. Is that sovereignty? We see the Soviets building as many tanks every two and a half months as Britain deploys altogether. How long can we maintain our sovereignty in the face of that military build-up?

The choice, as my right hon. Friend the Member for Farnham put it so well, is between the shadow or the substance of sovereignty; of the two it is the latter that is important. Not only is the economic hurricane upon us, but now we have the political hurricane. The Western democracies are being relentlessly challenged by the advance of Communist forces—backed by the Soviet Union—in South-East Asia and more gravely, in a NATO country, Portugal. We see powerful antidemocratic forces even within our own shores. At the same time we are witnessing the retreat of the United States from her world rôle and her commitments to her allies.

Can we not see the writing on the wall? Can we not see that if the democracies of Western Europe do not speedily come together to forge a far greater union than has been achieved so far, our countries will not long survive as independent democratic States? Valuable time has already been wasted. I am convinced that the interests of the British people demand a resounding "Yes" vote in the referendum, so that, with the other eight democracies within the EEC, we can get on with the task of building not only a powerful economic base for the prosperity and welfare of our people but a bastion of democracy and a bulwark of freedom —a moral, spiritual and real force in the world dedicated to securing the prosperity, the freedom and the peace not only of the peoples of Western Europe but of mankind.

11.21 p.m.

Mrs. Millie Miller (Ilford, North)

The hon. Member for Stretford (Mr. Churchill), in a highly emotive speech, displayed a remarkable knowledge of extremist parties both in this country and abroad, and gave the impression that the only democratic societies in Europe are the Nine, as if there were no other democratic States within Europe with whom we have other kinds of allegiance and with whom we carry out, as we did for years before we entered the EEC, a wide variety of treaties.

I start from a different standpoint—surprisingly, perhaps, that of the Leader of the Opposition, who reminded us at the end of the Prime Minister's statement a couple of weeks ago that not a dot or comma of the Treaty of Rome had been changed in the renegotiation. Much as I have welcomed the Government's efforts in this direction, there can be no doubt that for those of us who are concerned about certain aspects of the original treaty—not least the common agricultural policy—that it is a stumbling block which is difficult to overcome.

When I intervened many hours ago in the remarkable speech of my hon. Friend the Member for Birmingham, Ladywood (Mr. Walden), I referred to the condition of Italy. My hon. Friend may have thought that I was going to refer to the wine lake. But I was not going to quote from Il Tempo of Rome, which on Sunday this week talked of Europe drowning in a lake of wine. I was not going to say that the lake was so extensive that every citizen of the Community, down to babes in arms, could have 123 pints before it was exhausted. I was not going to say that the worst affected area of Italy in this connection is Sicily, which is already the poorest area of the poorest State of the EEC. I was not going to quote that article at all.

I intend to talk about another article, in Il Messagero di Roma which last week said that a knockout blow by the EEC vas being made against Italy. It was in connection with two entirely different aspects of EEC policy.

This is a middle-of-the-road journal. It is nowhere near as extreme as the Communist Party or the National Front, with which hon. Members opposite are so conversant. The journal said that a double body blow is being prepared in Brussels for Italian agriculture already hit in its one key product— to which I have referred, namely, wine— and for Italy's industry.

For months past the frontiers of the EEC have been closed to livestock imports from third countries. This may sound highly desirable in view of the mountains of beef which are building up in the refrigerated stores of some EEC countries. The action of closing frontiers is likely to have a devastating effect on Italy's industry. Italy depends on importing livestock from non-EEC countries and is able to exchange its agricultural products for them.

The journal makes the point that, since the policy of not allowing livestock imports was implemented, many countries outside the Community— Yugoslavia, Poland, the South American States— have been pressing their claim for the doors to be opened again. The difficulty is that, because Italy is not able to import livestock, it is unable to increase its herds and so is being deprived of an agricultural market which in its turn can provide it with an export market for its industrial goods.

The sales of frozen meat to destinations outside the Community would be financed by a Community fund to which Italy itself is contributing. So Italy is contributing to the destruction of its own agriculture and other industry.

The article says that the effect of the turning of the knife would be twofold— on one side, no industrial-agricultural exchanges by Italy with extra-Community countries and, on the other side, the collapse of prices of domestic livestock and the last rites for Italy's livestock industry. So certain— the article says— is the feeling within the other EEC countries that this torpedo will be launched that some of the major Italian companies have been approached by powerful French and German middlemen offering to sell them future beef import rights against the payment of large sums. About 20p per pound has been suggested.

The frightening thing about this is that, although we have been told time and time again that no decisions are taken in the EEC except with the consent of Ministers, this is a decision which can be taken within the Agriculture Commission by a simple majority vote and it will never be put to the Ministers.

The House may wonder why I dwell on the Italian situation. I do so because Italy was one of the founder members of the EEC and if all the claims about the advantages of membership of the EEC had been justified, surly by now Italy's position would have been built up to such an extent that it would be on equal terms with its EEC partners. Alas, this is not so, and today politically Italy is on the brink. If hon. Members opposite are concerned about extremism, let them be concerned about the potential extremism in Italy, which to some extent arises as a result of the very actions of the EEC which are being commended to us.

We are told constantly of the benefits of EEC membership and that there are no acceptable alternatives to the EEC. I remember very clearly a few weeks ago when my right hon. Friend the Foreign Secretary returned from a visit to overseas countries he told us of the great prosperity being enjoyed in one country which which we have close links. He was referring to Nigeria which is benefiting tremendously from its oil market. A recent article inThe Timessaid that there were new opportunities for British firms to profit from Nigeria's oil bonanza, and these were the words used by my right hon. Friend. I believe that our future lies not in EEC partnerships, not in taking in one another's washing, not in selling one another's industrial goods, but in looking outwards and entering into wider and wider free trade relationships with developing and developed countries.

I want, finally, to mention briefly one other aspect of international affairs which has hardly been touched on in this or any other debate in the House, and that is the existence, which I discovered for the first time today, of the Economic Commission for Europe, which is part of ECOSOC, which is studying, helping and guiding not the Eight, not the Nine, not the Seven, not the smaller units of Europe, but no fewer than 33 different States, from the United States to Soviet Russia, and all the States in between except Switzerland, on almost all the subjects about which hon. Member have spoken today.

If we believe in internationalism— and I think that those who are opposed to the narrow concept of the Market believe in it far more than do those who are advocating this kind of relationship— let us look further afield. Let us find our internationalism across the borders, across the cold war. Let us stop looking for "Reds under the beds" at every opportunity. For each Red under the bed one can find a Black Power character in the cupboard. Fascists are no less a danger to the survival of democracy than are Communists, and Opposition Members should not forget that.

There are opportunities for this country to go ahead. We are going through hard times within or without the European Community, but let us not be misled into thinking that this rich man's club which does not even protect its own future is the answer all the world over or for other parts of Europe.

Several Hon. Membersrose—

Mr. Deputy Speaker (Mr. George Thomas)

Order. I am grateful for the way in which hon. Members have responded to Mr. Speaker's appeal. There are four or five Members who still wish to speak, and 26 minutes left for today's debate. If they could rush through their speeches in six or seven minutes that would help.

11.33 p.m.

Mr. Richard Body (Holland with Boston)

I thought that when the hon. Lady the Member for Ilford, North (Mrs. Miller) touched on Italy she would remind my hon. Friends behind me that in that country the Communist Party roots fervently for the Common Market, that one of the facts it tends to dwell upon is that the Communist Party is the party in the Common Market with the largest individual membership and that it looks forward to the day when there is a Communist EEC.

When the hon. Lady referred to Fascists, she might have reminded the House that in that catalogue of supporters of the EEC there is the Fascist Party of this country and the Mosleyite movement.

I am a frustrated European. I have always tried to bring myself to support the principle of the European Community, and I got as far as voting for our application to join in May 1967. It seems almost common sense that the countries of Europe should work together and, indeed, that neighbouring countries round the world have so much to do together.

One recognises— I think we all must— that the Governments of nation States find their actions limited, and there is a growing list of functions which they cannot adequately cope with by themselves. Finance is one example, and pollution is another, and when one comes to trade it seems only too obvious that the barriers to trade should be brought down. No one argues— certainly no anti-Marketeer that I know argues— that we should have some kind of fortress Britain pulling up the drawbridges against the rest of the world. I regret very much the suggestion by some, although I am glad to say that the Paymaster-General did not suggest it tonight, that this is any part of our case now.

Surely there should be no dispute about the need for neighbouring countries to work together. The argument should be about how they should cooperate. The Treaty of Rome sets out just one way towards international cooperation. Supporters of the EEC assert, by implication if not explicitly, that it is the only way forward to European unity. Yet the Treaty of Rome is essentially a federalist charter. The Paymaster-General may not like that, and he suggested tonight that he was not a federalist, but I am sure he would not quibble about the use of that word.

We are confronted in the Treaty of Rome with the setting up of supranational institutions, and an ever-growing number of our laws will be made by these institutions, the European Parliament eventually, at present the European Council of Ministers, and the Commission of the EEC itself, but also the European Court of Justice, because that is now the supreme court of this country. As long as we are members of the European Community, that court has the power to change our laws, because it acts quite differently from our own courts of law. Our own courts will interpret strictly the law as the European Court of Justice interprets the spirit of the law and in that way develops and changes the law of the Community.

None of us can have any doubt that the European Community will try to make itself more democratic but, try as it will, I do not believe that it can ever succeed. That is why I cannot bring myself to agree to membership of the European Community.

I believe that 250 million people in one political entity is too much for democracy to thrive. The form of democracy may come about, but democracy can exist only when the citizens feel that they can influence the decisions that affect their everyday lives. Once that feeling is lost, democracy cannot endure. It must break down. History is full of examples of when that has happened.

In a political entity of 250 million, a minority may consist of many millions. Their interests, values and habits of life can be swamped by the legitimate process of government. Yet can there be any true democracy when such interests as those of minorities cannot be safeguarded?

We have learnt in this country that totalitarianism is the concentration of power in the hands of a few and that democracy is the diffusion of power. Federalism will take away power from where we have now learnt to diffuse it in our own country and will place it instead in federal institutions, and over them the ordinary people will feel that they have less and less influence. Perhaps in every other respect we will have good government from the federal body, but even so I would prefer the words of John Stuart Mill: "A good government is no substitute for self-government".

It has been asserted in the debate that the onus of proof from now on is on those who are in favour of withdrawal. I would put it in another way. If we are concerned with democracy, the onus is on those who want us to stay in to prove that this new creation that must evolve if it is to progress towards a super-State will be democratic. It is because I feel convinced that it can never be democratic that I cannot support it, and for that reason I am a frustrated European.

11.40 p.m.

Mr. Peter Temple-Morris (Leominster)

My hon. Friend the Member for Boston with Holland (Mr. Body) knows how profoundly I disagree with his views on this issue, much as I respect them. We have different concepts of sovereignty and disagreement about what is true sovereignty. I contend that democracy can survive in Europe and that by combining with Europe we have a better chance of survival.

It is often said that rather than our form of democracy being the most potenitally long-standing and viable, that of the United States is at present the most valuable in the world, with its democratic base, its freedom base, and its 200 million people and all the compromises that involves. My hon. Friend will forgive me if I do not follow his arguments further.

I am profoundly sad that we are debating a decision which in essence stands parliamentary sovereignty on its head. It is a decision which the House took— although I was not here at the time— in October 1971 with a large majority based on both sides of the House. There followed a treaty and two years and some months of membership. Yet here we are talking about it again. We run all the fearful risks which the policies which have brought us to this unhappy state involve. However, there are redeeming features. I was pleased to hear the arguments which were so ably deployed by the Paymaster-General. The very conviction with which he deployed those arguments may tend to make people outside the House more perplexed about why we are talking about this subject.

What has brought us here is confusing not only to the British people but to people within Europe. They have been extremely charitable in the renegotiation. Even now, many of them are walking around muzzled and afraid to say anything, for example, about the cases that might go before the European Court for fear of upsetting the results of the British referendum, because they want us to stay in. They want us in now and have always wanted us in because they feel we have something to contribute to democracy. Italy, I would say to the hon. Member for Ilford, North (Mrs. Miller), has always supported us with that in mind throughout the various negotiations with the Common Market. Europe wants us in and is surprised to see what is going on. In a nutshell, we have lost a lot of political capital. If the referendum, happily, goes the right way and we stay within Europe it will be a long time before we again build up the political self-respect which we could have had if none of this had happened.

I wish to refer to defence, which has been touched on by one or two hon. Members, but I will not go into it in detail. When I see what has happened in South-East Asia and the retreat which is taking place within America, with its own morale badly shattered by recent events, I am even more convinced that as the years go on Europe's defence will be conducted by Europe. I know that NATO has been advanced in this debate as being the automatic defence of Europe, but I believe that in future Europe's defence will increasingly be a matter for Europe. I believe that we shall have no say in that defence if we stay out of the Common Market.

Anyone who has any doubts about that must take note of a recent poll that was conducted within America. I do not know how substantive it was but it was conducted over all the states of America. It came out with the conclusion that the Americans would stand and fight only if Canada was invaded. Perhaps that is mirrored by the urgency with which the Foreign Secretary has requested a NATO meeting following what has happened as regards American policy in South-East Asia.

Next, I make a quick point about the Middle East and the oil-producing countries and the situation if the referendum goes the wrong way. The Paymaster-General knows very well that we are existing to no small extent upon foreign money that at present rests in this country. I wonder how long that money will remain here if the country does not vote for Europe in the referendum. I am talking about a part of the world that is expanding and which can use our technology and everything that we have to contribute to its expansion. It can use what we can contribute in a way which need not involve the hectic competition between the European countries that we are witnessing at present. Encouragement could be given to all the oil-producing countries by Common Market participation in a more unified way. Let us remember that, compete with each other as we may, America, with its unity and power, walks off with very much more in each and every instance.

That completes a rather abbreviated version of what I had to say. I urge the country very much to vote in favour of remaining in Europe when the referendum comes.

11.48 p.m.

Mr. Percy Grieve (Solihull)

I thank my hon. Friend the Member for Leominster (Mr. Temple-Morris) for abbreviating his speech. It is with no pleasure that I rise to support the motion. I am and always have been a convinced protagonist of our adhesion to the European Community. I believe that we have no future outside it. The economic arguments which have been deployed tonight— in particular by the Paymaster-General and the hon. Member for Birmingham, Ladywood (Mr. Walden)— have been utterly convincing. None the less, we should not be having this debate and the country should not be facing a referendum. The fact is that we are having the debate and we are facing a referendum to save the unity of the Labour Party and not for the good of the country.

It is a sad thing that this matter should have been revived in this way when Parliament and the Crown had acceded to a treaty which had been ratified by Parliament after prolonged negotiations Our friends in Europe believed that we were members of the Community, that we were there as their brothers and that we were to be treated as members of the Community, drawing the advantages of the Community. It is an astonishing tribute to the strength with which our friends in Europe believe that we should be in the Community that they have not turned against us. That attitude is a tribute to their desire that we should be with them.

Last week I was in Paris and Rome. I found that it was the clear desire of our friends in Europe that this referendum should turn out to be successful. But we should never have had a referendum. The Prime Minister has gambled with our country's future in Europe for the sake of the unity of his own party. In the process he has destroyed the doctrine of collective responsibility of Cabinet Government, and it is difficult to foresee the many ill effects which may flow from what has happened.

I shall campaign earnestly for success in the referendum that is upon us. One of the principal reasons why I shall do so —and why I believe the country will return a resounding "Yes" vote—lies in the fact that I believe the United Kingdom will be dishonoured if, after a treaty has been solemnly entered into, we resile from it and seek to find a way out. We shall face economic ruin, the Arabs will seek to withdraw their money from this country, and we shall be dishonoured. How in those circumstances will anybody trust us? Certainly nobody will trust us if we seek to enter into treaties anywhere else to get out of our economic difficulties. That is the bleak future which faces this country. It is on that future that the Prime Minister has gambled—and in the process it can hardly be said that he has saved the unity of the Labour Party.

I promised to be brief and I conclude by saying that these are the arguments which I shall put in the country and in my constituency in the referendum campaign.

11.51 p.m.

Mr. Michael Shersby (Uxbridge)

In the remaining nine minutes of debate, I shall seek to say a few words on the question of access to food supplies, which I believe to be one of the most crucial items in our membership of the EEC. Few of us in the House tonight will have thought of the possibility of shortages of some foods in Britain in peacetime—a situation unknown in a period of 150 years. That is what may happen if we leave the EEC, where we now have a prior claim to our share of the production of our partners. Only about 55 per cent. of the food eaten in the United Kingdom is home-produced. The importation of the balance has not until recent years presented a real problem since our growing wealth has more than kept pace with the increase in population and the expected improvement in living standards. Additionally, until the Second World War we had priority of access to food supplies from the Dominions and Colonies. Accordingly, we grew accustomed to shopping for the national larder with money in our pockets and to buying other people's surpluses in privileged conditions.

Circumstances today are very different. We have a continuing balance of payments deficit, our relationship with our former overseas territories has completely changed, and world food surpluses—which have never existed in a real sense since millions of people die of starvation and malnutrition each year—have disappeared. World reserves of wheat have been reduced to 6½ per cent. of production in 1974–75 compared with a figure of 23 per cent. in 1969–70. A series of bad harvests, rapidly increasing world population and growing food consumption in former exporting countries, have led to a position where there is little, if any, cheap food left in the world. We are now shopping with an overdrawn bank account, in a short-supply situation, and without priority access to our former suppliers, who as the recent sugar crisis so clearly demonstrated, now sell to the highest bidder.

In this new scene our membership of the Community has already been of great value in protecting us from abnormally high prices. A total of 59 per cent. of our meat and 53 per cent. of our cereals now come from the Community compared with 46 per cent. and 19 per cent. respectively in 1970. It is, however, to assure our food supplies in the future, both short-term and potentially long-term, that our continuing membership of the Community is essential.

In the 1975 price review the Government gave estimates of United Kingdom self-sufficiency in various major food products. If these are compared with the average of the latest figures available from the Community they show that the Community is over 90 per cent. self-sufficient in 15 out of 20 main commodities, whereas the United Kingdom reaches this figure for only six out of 20. There is not one product in respect of which our self-sufficiency rating is better than that of the Community, and only four—milk. oats, potatoes and eggs—in which it is level with that of the Community. It is therefore evident that staying in the Community will assure us of priority access to its food production, which will go a long way towards supplying our needs.

Outside the Community we shall be in a queue with the rest of the world and with no advantages or rights to priority for Community surpluses. There would therefore be no question of a return to the Commonwealth preference system. Our major Commonwealth partners have already stated that they wish us to stay in the Community. They are unlikely to help us if we leave. Let us not forget that 46 developing countries by their signature to the Lomé Convention in February, agreed to grant the Community most favoured nation treatment in return for a guarantee of free access to the Community for 94 per cent. of their exports of agricultural products, which will have preference over exports from third countries.

I am therefore certain that to maintain present levels of world food consumption, which are only too often tragically inadequate in some countries, food supplies must double by the end of the century. How can it possibly be advocated that the United Kingdom, with its high proportion of food imports, should deliberately exclude itself from a Community which can assure us that our needs will be supplied?

For those reasons, if for no other, I believe that it is in the intrests of our country to remain in the Community. For that reason I shall vote for the recommendation tomorrow night.

Mr. Deputy Speaker

I thank hon. Members who have co-operated so well to enable everyone who wished to speak to do so.

Debate adjourned.—[Mr. Walter Harrison.]

Debate to be resumed tomorrow.