HC Deb 10 January 1977 vol 923 cc1069-159

4.27 p.m.

The Minister of State, Foreign and Commonwealth Office (Dr. David Owen)

I beg to move, That this House takes note of the Report on Developments in the European Communities, May-November 1976 (Command Paper No. 6695). The White Paper, Cmnd. 6695, published in December, covers developments in the European Community from May to November. It has been a period of considerable activity with achievements as well as setbacks. The most significant from a constitutional point of view was the signature on 20th September of the agreement on direct elections. A Select Committee has considered this matter, the Government are looking at the Committee's recommendations, and the Queen's Speech promised legislation.

I do not intend superficially to cover all the various aspects of the White Paper or, indeed, to look into the future development of the European Community. As I have already told the House, my right hon. Friend will be making a wide-ranging speech in Luxembourg, and a copy of his speech will be available in the Vote Office. I intend to make a more detailed speech and to single out three sectors of major importance where, over the past six months, there has been some disagreement and which are likely to remain subjects of major concern in the Council of Ministers—namely, fishing policy, agricultural policy and energy policy.

The common fisheries policy is rightly causing great concern in Britain. It will continue to do so, in my view, throughout 1977 and maybe beyond, for I see no quick or easy solution for resolving the deep national differences that exist on this subject.

The common fisheries policy was agreed in 1970 on the same day as Britain's formal negotiations for entry began. It would have been far better for the Community of the Nine if this basic issue had been dealt with as part of the enlargement negotiations. It is a simple fact that it suits the interests of the original Six much better than those of the new members, particularly Britain and Ireland, and its existence was a powerful factor in the Norwegian referendum decision to reject entry.

Yet, despite this unfortunate history, the common fisheries policy is part of Community law and our Community obligations. The then Government accepted it in 1972, in full knowledge of its implications, at the time we joined. We felt in 1974 that it could not be renegotiated in isolation prior to a decision being taken about 200-mile limits, and Britain cannot now act as though it does not exist or can be torn up with impunity, as some recent comments seem to advocate. We have to seek its reform as intelligently, firmly and ably as we can, and this we are doing. It must be reformed in the spirit of achieving a Community solution.

In some British criticism, there is a tendency to forget that the other eight countries also have legitimate interests and concerns which have to be squared, too. National posturing will not achieve anything. The overriding issue for the Community is to protect and conserve fish, for failure to do so will ensure that stocks are decimated and the future of the whole industry put at risk. Within this general priority, a Community fishing policy must have regard to the livelihood of those men and women in Community countries who over the years have developed fishing as the very basis of their coastal existence.

The common fisheries policy contains provision for equal access by the boats of all member States, but we need to be clear about what it should entail. Taken literally, it involves an equality of treatment such as is imposed on no other Community activity. No other Community resource is subject to a régime of equal access in the way provided for fish. The Community does not require German coal or French farm land or our own North Sea oil and gas to be open territory for anyone in the Community. Though there are provisions in the Treaty of Accession which reserve areas between six and 12 miles around our coasts for our own fishermen, these derogations lapse at the end of 1982, and all Community fishermen would then be able to fish up to our shores unless the provisions were renewed.

Furthermore, I do not think that anybody believes in absolute equality or freedom of access as the basis for a rational modern fisheries policy. The whole history of international fisheries relations over the past 20 years is the history of successive restrictions, dictated by force of circumstances and the imperatives of conservation, on the right of all comers to fish freely wherever they liked.

The requirements of conservation, and rational economic and social development are the principles upon which a new Community fisheries policy should be based. Even since 1970 we have seen all over the world these principles applied with greater force as fears have grown about over-fishing. This is what lies behind the new dimension to fishing policy which the common fisheries policy must now reflect—namely, the extension of fishing limits to 200 miles.

The special position of the coastal State must now be recognised within the common fisheries policy. The coastal State has not only a unique interest in the successful conservation and management of the fish stocks around its shores but it has geared a substantial part of its industry to fishing close to its own ports. This is reflected in ship size, design, manning and fishing practice. It is wrong for a coastal fishing community to have its own industry destroyed by large vessels, sometimes using industrial fishing methods, coming in from other parts of the Community. It causes problems enough when vessels come in from other regions of one's own country. Most countries have over the years adopted informal and formal agreements between their own fishing communities about over-fishing around their own coastline.

A revised common fisheries policy must also take account of the fact that Britain is contributing over half of the stocks of fish within the area of sea covered by the extension of the 200-mile limit of the Community coastal States, and has furthermore had to suffer a major cut-back in its fishing in third country waters, particularly off Iceland.

Britain and Ireland seek, as part of a revised common fisheries policy, the establishment of coastal bands around the coasts of all member States. We have made this clear in the Community, and in the discussions over interim arrangements we are not prepared for our position to be prejudiced on this point. We need the belts to give us the fish. Coastal belts also offer a more certain system of stock management. We shall need quotas, too, and a proper system for recording and reporting catches. We cannot afford a system of quotas alone, which as history has shown in the NEAFC, depend essentially upon voluntary compliance.

We believe that a quota system must involve licensing of ships for specific days in the fishing grounds and the systematic recording of catches. This would offer some prospect of better control, and we are prepared to co-operate fully in any such scheme. So it is not a question of coastal belts or quotas. We feel that both are necessary and will need to be backed up with a proper enforcement system.

A Community conservation system must furthermore provide the minimum opportunity for the objective recommendations of the scientists to be evaded or ignored. Conservation regulations must not deal in "paper fish", must be capable of sensible enforcement and be designed so that they cannot be broken with impunity, and that means that they must allow for decisions to be taken swiftly when necessary.

Our own conservation record is good, and we are determined that this should not put us at a disadvantage in relation to others who have been less conscientious. The effective control of third country fishing within our fisheries limits again means that we must have a conservation and enforcement policy which can be made to stick not just with our Community partners but with countries which may not have the same interest as the Community in fully respecting quota levels.

Over the past six months, progress has been made to adapt the common fisheries policy to the new situation. All member countries have extended or will shortly extend their fisheries limits in the North Atlantic and North Sea. The Community has opened fisheries negotiations with a number of third countries, including Norway and the Faroes, which are particularly important to us. In the case of the Eastern European States, whose fishing was at a level well above that justified by reciprocity or which could be tolerated by the fish stocks, the Community has agreed a substantial reduction in some fishing, such as for mackerel off our coasts, over the next few months.

Here, with the Community acting as one, we are more likely to achieve success than would Britain acting alone. As yet, sadly, the Community negotiations with Iceland have not achieved anything for Britain, and I do not believe that anyone in the Commission or the Community is in any doubt that no agreement with Iceland at the end of the month will pose very serious problems.

Over the next few months we shall be working both in the Community and within the framework of the new Fishery Limits Act to forge agreements over both external and internal fishing regimes and, with the powers in the Fishery Limits Act, to bring about effective control of third country fishing in our waters. We are determined to make progress, but in a way that does not put our fishing industry at risk. We do not seek a national solution, because that will be only a recipe for conflict. We recognise the virtue of the Community showing a united front in the negotiations which lie ahead with the Soviet Union and others.

Interim arrangements for the internal regime—to replace the one-month "standstill" agreed at the Council in December—are only a step towards a long-term Community regime. Negotiating a settled long-term Community fishing policy may take time, and it would be wrong to become prematurely committed to a scheme which may not work. We shall press ahead, trying to reach agreement as fast as possible. But we have to be certain that it will be fair to our fishermen, fair to the Community's fishermen, and ensure that we can all continue to rely on a fish as a basic food. That is the broad outline of our policy over the next few months.

Mr. Douglas Jay (Battersea, North)

Is it still the Government's firm intention, as we have so often been assured, to insist on at least a 50-mile exclusive zone for the British fishing industry?

Dr. Owen

That is our position, but we have entered into negotiations, as we have done patiently hitherto, wishing to hear other people's points of view. As I have argued, it is our view that one cannot protect fishing or conserve fish and carry out the necessary enforcement without a coastal belt regime. My right hon. Friend is an old and experienced negotiator in international negotiations, and he knows that if one enters into negotiations on the basis that one does not intend even to listen to the other person's argument and that one will not change one's view one jot, one will not secure agreement. That is not the position which we are trying to adopt.

Mr. Jay

Would not my right hon. Friend also agree that it is not a good form of negotiation to give away one's requirements before the negotiation begins?

Dr. Owen

We have certainly not given way at all. The last time that I addressed the House I was attacked for accepting a situation which I agreed was less than satisfactory—a short-term arrangement for one month—but that was purely and simply because I was not prepared to put my name and that of the Government to an interim regime which I thought would have prejudiced the future and been unsatisfactory.

I think that we are in for long and difficult negotiations. It would be absurd to pretend that we shall come away with a satisfactory settlement in the next few months. What is at issue here is a long-term settled Community fishing policy—a matter of great seriousness. If we take steps and accept aspects of the regime at this stage without having actually seen the practical consequences of some of these things, we shall be storing up trouble for the future.

That is not to say that we shall not have to accept things in the interim that are less than satisfactory. That is what we shall probably have to do. So long as it does not prejudice the long term and our right to introduce conservation measures on a non-discriminatory basis, we must enter these negotiations in a spirit of trying to forge an agreement in the Community.

Mr. James Johnson (Kingston upon Hull, West)

Does the Minister accept that one headache, which is causing intense anxiety among fishermen, particularly skippers, is that we are not actually negotiating for ourselves, that there is a third party? I understand how this has come about and we have faith in Mr. Gundelach, but it is a talking point and is bothering the fishing community that we are not speaking for ourselves.

Dr. Owen

I agree with and can understand what my hon. Friend says. This is a new situation to some extent in which people have to accept that negotiations are being conducted on behalf of nine countries and not bilaterally. But, more than most, my hon. Friend has seen the consequences of pursuing a fishing policy on a purely bilateral basis. Whatever one may think of the history of the last year or so of negotiations with Iceland on a purely bilateral basis, they have not been strikingly successful.

I know that there is a difficult problem with Iceland but there are considerable problems in negotiating a fishing reduction with other third party countries. A substantial reduction is now being sought by the Community. I have no hesitation in saying that I think that it will be far easier to achieve that substantial reduction of fishing if we are negotiating on behalf of nine countries with the full force and strength of the Common Market behind us.

Mr. Bryan Gould (Southampton, Test)

Would my right hon. Friend not agree that the Icelanders and the Norwegians, who are not encumbered with Common Market membership, have found it easier than we have to arrive at a satisfactory settlement?

Dr. Owen

There are problems which they still have to settle. The Norwegians have a strong interest in reciprocity arrangements with the Community, so detailed negotiations are still going on. They have something to offer us; equally, we have something to offer them. As for the Icelanders, I think that there is a reciprocal arrangement with the Community which is worth while for them, both as regards fish but also as to the extent of their overall arrangements.

However, I recognise the concern. I try to put the issues squarely before the House. I must give a warning against thinking that we shall reach a long-term agreement on fishing policy quickly. If we are to introduce a new system of quotas, for instance, we want to be certain that it will work and we want to see some of these quota figures for fish established historically by producing fish. We have already seen some considerable technical arguments about the level of quotas fixed by the Community. Doubts have been expressed on those, particularly by the Norwegians.

Mr. Leslie Spriggs (St. Helens)

There appears to have been a lack of consultation with those who know the industry and the various fishing grounds around our shores and the shores of other countries. Has the Minister of State negotiated with or consulted the fishermen, particularly the skippers, who have the necessary knowledge and expertise, before concluding any agreement with our Common Market partners?

Dr. Owen

I can assure my hon. Friend that the Government have been in the closest possible contact with the industry. The Minister of Agriculture has had many discussions and has a close relationship with the industry. Because of his own constituency, my right hon. Friend the Foreign Secretary has a detailed knowledge of the fishing industry and has made sure that there are close contacts. My hon. Friend the Under-Secretary of State has had contacts also with the industry. I myself represent a constituency with a fairly sizeable interest in the fishing industry.

I should now like to turn to the other questions. The second of these is agricultural policy.

Over the period covered by the White Paper, a good deal of attention has focused on the level of the green pound and indeed on the whole green currency system. As this is a question which is likely to recur over the next few months, I thought it would be helpful if I devoted a little time to setting the issues briefly in their historical context and explaining the Government's views on them.

If market rates of exchange were used for converting CAP support prices, expressed in units of account, into the currencies of member States, these support prices would float up and down as the value of currencies on the foreign exchange markets changed. That is clearly unsatisfactory, and to prevent it, fixed rates of exchange known as green rates were introduced for the conversion of common prices.

Because the green rates differ from market rates, the real level of common support prices varies from member State to member State. It is therefore necessary to apply "monetary compensatory amounts" as import subsidies and export levies for depreciating currencies like ours, and as export subsidies and import levies for appreciating currencies in order to prevent agricultural products from being attracted to the countries with higher support prices. British consumers gain because we are large food importers through import subsidies and therefore lower prices because of the fall of sterling whereas German exports—German farmers—gain from export subsidies because of the increased value of the deutschemark.

It should be stressed that Britain is gaining wholly legitimately from this aspect of the CAP. Britain entered the Community knowing that it would lose on the CAP in many areas. We did this with our eyes open but I find something bizarre to say the least in the attitude of those who argue that we should throw away this legitimate advantage either because of a misplaced sense of guilt, feeling that this is somehow unfair on other members of the Community, or because they have failed to appreciate how valuable as a counter-inflation measure this import subsidy is for a country like ours whose currency fell very rapidly.

It is open to the Government to devalue the green pound and in October we were under strong pressure to do so. Quite rightly, we resisted. As my right hon. Friend the Minister of Agriculture, Fisheries and Food has argued with his colleagues in Brussels, the best thing for the Community would be the continuing improvement in sterling which would in itself reduce MCA expenditure. To a certain extent this has already begun to happen. Sterling reached its lowest rate against the unit of account on 28th October at 1.18. At this rate the application of MCAs would have given us a 47.5 per cent. import subsidy but in fact the level never rose above 45 per cent. Sterling since then has strengthened and is now fairly stable at about 1.25ua giving a current application of MCA at 38.5 per cent.

In deciding on the right level for the green pound, the Government have naturally to take into account overally policy considerations. It would be tragic to prejudice our counter-inflation policy by an adjustment of the green pound which raised consumer prices in a way that affected wage claims and added to inflation. A steady or appreciating pound in turn helps to contain or reduce sterling MCAs. Premature devaluation of the green pound would be counter-productive both for the counter-inflation policy and for the value of sterling. This cannot be in the Community's interests, and it certainly is not in ours. At present therefore the Government conclude that the balance of interests comes down against any change in the rate.

In taking this view, we do not however ignore the vital economic rôle that agriculture plays within the United Kingdom economy.

Mr. Russell Johnston (Inverness)

The Minister referred to a misplaced sense of guilt. If the rôles of Britain and Germany were reversed and we were subsidising the Germans to the extent that they are now subsidising us, is he saying that the Government would regard that situation with complacency?

Mr. Nigel Spearing (Newham, South)

With a £2,000 million deficit, yes.

Dr. Owen

When there is a national interest that can legitimately be pressed it is our responsibility to do so. I have a record of commitment to the European Community that I think cannot be questioned, but I do not see it as my job—both as a proponent and a strong advocate of Britain's full membership of the Community—to give up a national advantage which has been legitimately negotiated.

There are many aspects of the common agricultural policy that I have to defend, but on the specific point raised by the hon. Gentleman, German farmers who export farm products to the rest of the Community do quite well because of the appreciation of the deutschemark. They gain as well through a different mechanism of MCAs.

It is a question of swings and roundabouts. We lose on one thing and gain on another. Some of my hon. Friends are always taking time to expose that part on which we lose, but my view is that when we have a legitimate gain we should hold on to it.

I was going on to explain that there are aspects of the green pound rate that if held on to could damage our agriculture. There is a balance of interest which I shall go on to describe. I think it will help the House if I put the other aspect as well.

We cannot ignore the vital economic rôle that agriculture plays within the United Kingdom economy. It contributes directly to growth in the gross domestic product, provides employment and makes a crucial contribution to the balance of payments and the expansion projected in the Government's White Paper "Food From Our Own Resources" which will save imports worth about £750 million. This expansion programme continues to be the basis of our agricultural policy.

I do not believe that there is contradiction here between resisting any change in the green pound and being concerned about the level of returns and profitability in British agriculture. As far as the farmer is concerned, devaluation of the green pound is only one of a large number of factors affecting his returns this year. For example, they will be affected by the level of CAP support prices generally, the level of market prices, and two further transitional steps this year.

Equally, we must get the green pound and MCAs into perspective when looking at the CAP as a whole. Those who claim—as the hon. Gentleman seemed to imply—that we are unfairly burdening the Community budget overlook the fact that at present levels MCA expenditure is far less than the expenditure on milk. If the CAP really kept the balance of supply and demand right and did not allow for surpluses year in, year out, there might be more in the criticism of the green pound rate. I realise that we cannot prevent some surpluses, but the size of some of the surpluses and the increasing price of surplus commodities arc extremely hard to justify.

Moreover, United Kingdom MCAs are not just subsidies for British consumers—a point which is often forgotten. They are paid to Community exporters and they help the Community generally by holding up the level of total Community consumption thereby reducing the cost of surplus disposal.

A fall of consumption as a result of revaluation of the green pound could mean an increase in the Community's surpluses of some agricultural products, with consequent costs to FEOGA which could off-set to a significant extent any savings of MCAs. It is not in the interests of the Community as a whole to save money on one account merely to spend it on another. I am asking for a balance in this argument. It is a difficult question of judgment.

Because of the chain effect of a devaluation of the green pound, it is closely linked with the whole question of agricultural support prices. If these prices can be restrained and reduced in real terms, this could achieve very significant savings for the Community budget as well as helping all countries to hold down inflation. It would moreover make it much easier for the United Kingdom to consider changing the green rate.

Mr. J. Enoch Powell (Down, South)

Before the right hon. Gentleman leaves the subject of green currencies will he refer to the special and illogical case where there is a different green pound with a variety of currency for other purposes, as between the Irish Republic and the United Kingdom, and where, in addition, there is a land frontier over which practical control is not possible? I realise that this is very much a matter for Her Majesty's Government in the United Kingdom. Will the right hon. Gentleman undertake that the measures which have hitherto been used to redress the local effect of that practice in Northern Ireland will be continued and adjusted to future variations between the two green pound rates?

Dr. Owen

I well understand the right hon. Gentleman's concern. This is a technical point, although it carries with it considerable social implications. It is a narrow point in the sense that it does not involve a large number of people and a large cost, but it is serious in its implications in Northern Ireland. My right hon. Friend the Secretary of State for Northern Ireland has constantly given this matter the closest attention. I think that the right hon. Gentleman is concerned about the future overall attitude to this aspect that will be taken by the Commission and the Community as a whole. We have explained the technical difficulties that arise for us and the need to take compensatory action in the way we have. I think it is fair to say that although there is criticism there is also some measure of understanding of the problem.

Over the next few months when these problems are discussed in the Agriculture Council I hope that we shall get a better acceptance of the difficulties on the whole question of agricultural policy. In general, given that there are problems with other members of the Community, the EEC has shown a high level of understanding of our difficulties with the green rate, and I hope that we shall be able to resolve any difficulties that are peculiar to Northern Ireland.

Another sector which is taking on an ever-increasing significance to which we attach great importance and where we have consistently sought to move the Community forward, is energy. This is a complex subject, involving vast investments and crucial national interests. We have only to look at the range of conflicting opinions and interests which exists within a single country when it tries to work out a coherent and balanced energy policy to see why those problems, when multiplied by nine, are bound to call for much patience and continuous effort. Yet occasionally events provide the sort of stimulus which can push groups and countries to see beyond their immediate interest to the benefits which can flow from acting together.

The climactic events of 1973–74 should have provided—and belatedly did provide—such a stimulus, but it was not until the Rome European Council in December 1975 that Heads of Government provided the clear instruction that was needed to translate the Community's acknowledged need to reduce its dependence on imported energy to some kind of action.

We welcomed the Commission's proposals made in January last year, which included one particular mechanism—the minimum safeguard price—which would work to protect and encourage investment in all forms of energy. It can be argued that we of all the Community countries least need common policies since the reduction of our dependence on imported energy is daily taking care of itself. Such an attitude would have been both shortsighted and lacking in Community spirit, and we took the first opportunity provided—at the meeting of the Energy Council in March—to state our view that the package prepared by the Commission was a good one. I deeply regret that not all our partners felt able to do the same.

The MSP for oil deserves a word of explanation. This device is a safety net set well below the height from which oil prices might fall. If it is never triggered, we should be neither surprised nor dismayed. But the fact that it is there would provide a confidence-building mechanism, likely to be cost free, which would enable the Community to show the same sort of mutual support in energy which it seemed willing enough to show in other sectors before our accession.

Because oil is the "balancing source" of fuel in which nations calculate their energy accounts, MSP would cover all sectors of energy—not just oil—and investors would know that, whatever happened to the world price of oil, their investments in the North Sea, in nuclear power, in coal wherever it was found, in renewable energy of any kind and in gas would not, within limits, be threatened by a sudden and unforeseeable collapse in the world price of oil.

We attach importance to MSP. Seven of our EEC partners are committed to it in the International Energy Agency. The Community as a whole should in our view be capable of this fairly undemanding gesture of common interest. If our partners are worried that they are being asked to underwrite investments without any assurance that they will have access to the fruits of that investment, I am puzzled by their concern.

We signed the treaties and we know and respect our obligations under them. We do not discriminate against our partners in the award of licences, contracts in the offshore industry or in any other way. If they are worried about access to North Sea oil, they have only to explain what their worries are and I feel confident that we can reassure them. But I would also remind them that the United Kingdom has made by far the greatest investment in energy within the Community—namely, 51 per cent. of the Community's investment in oil, 33 per cent. for coal, 26 per cent. for natural gas and 27 per cent. of the whole of the Community's energy investment. It does not seem unreasonable to look for Community underpinning for investments, which will go far towards reducing the dependence of the Community as a whole on imported energy.

Clearly 1976 has not been all stagnation. Among other things, there has been useful work done on a more rational use of energy. The Energy Council at its last meeting in December took a first decision, which we certainly welcome, on measures to be adopted in the event of supply difficulties. But some degree of disappointment is natural when progress is slow in an area where our own approach, we believe, is positive and constructive.

Our disappointment does not mean that we shall abandon our positive attitude. On the contrary: my right hon. Friend the Secretary of State for Energy has now taken over the presidency of the Energy Council and intends immediately to explore with his colleagues the best way forward. We realise that there are political and economic constraints which make energy a complex and controversial subject. It is precisely because of these difficulties and constraints that my right hon. Friend wishes to develop a proper and complete understanding of others' views in the hope that the next six months will produce some worthwhile progress in this vital sector.

There are many other aspects of Community work with which I could have dealt today, but time is short and others will wish to speak. Members will wish to raise many detailed issues in the debate and my hon. Friend the Under-Secretary will seek to answer them when he replies.

The presidency of the Council of Ministers over the next six months offers no golden key to the solution of the many difficult problems facing the Community, much less to those of particular concern to the United Kingdom. However, it offers us responsibilities, a great deal of work and a challenge that we shall do our best to meet.

One of my personal hopes is that the period of the United Kingdom presidency will stimulate a greater interest and understanding of the Community within this country. The build-up to the referendum in June 1975 saw a massive campaign, some of it very slanted, concerning the pros and cons of British membership. It was perhaps inevitable that it should develop into a polarised and somewhat simplistic debate between the two sides.

The development of the Community is the most complex and detailed political task that any of its nine countries in all their long history have ever attempted. We need, especially in Britain, a better understanding among public opinion at large about the real nature of the Community, of which we are now an indissoluble part.

Mr. Spearing

It is just coming through.

Dr. Owen

Some hon. Members may laugh and make that sort of comment. I have constantly stressed the complexities of the issues that are involved in every speech I have made on the Community in the House and outside during the 10 years that I have been a Member.

The period of the United Kingdom chairmanship of the Council of Ministers will see a considerable number of meetings involving the Community and the Nine at all levels taking place in the United Kingdom. United Kingdom Ministers will be involved more closely than ever before in the workings of the Community, speaking for the Council both within Community institutions and in negotiations with third countries. I hope that this experience will bring an understanding of the Community in which the British people have freely and firmly decided that their future lies.

5.4 p.m.

Mr. John Davies (Knutsford)

I think that the whole House welcomes the opportunity that is afforded by these debates to consider the general progress, or absence of it, that takes place in the Community institutions. We are grateful to the Government, who instituted the whole system of six-monthly reports and debates, for such occasions but it is a pity—the presence of so few Members today is a relevant commentary—that we should perforce be obliged to have the debate on an occasion when such a large number of those who are deeply involved in Community affairs are quite unable to be present. Their absence unfortunately emasculates the force of these debates. That is the result of the debate being taken at such a time. I hope that in future the Government will find means of ensuring on such occasions that there is a full turn-out of all those who take a deep interest in these matters.

It seems that this is an opportunity as much to consider future strategy as to look at past performance. We have before us Cmnd. Paper No. 6695, which outlines past performance but perhaps it is a launching platform for discussing the future. On this occasion it is undoubted that our consideration of the future is much coloured by the peculiar coincidences that from 1st January the presidencies of the Council and of a new Commission will be held by Britain. Further, we should not forget a former colleague of ours in the EEC—namely, Mr. Basil de Ferranti, who is now President of the Economic and Social Committee. All those factors give a somewhat higher line to our consideration of these matters.

I am sure that the Minister of State is correct in saying that there is no overwhelming national advantage in holding the presidencies. Indeed, there might at times appear to be some disadvantages. It appears that the period of presidency gives an opportunity to introduce something of a national flavour to the way in which the institutions are run. I remember that during the time that the Danish Minister was President of the Foreign Affairs Council it proved possible to improve considerably the handling of business, the production of agendas and related matters. I hope that during the course of our occupation of these appointments it will be possible for us to bring our own talents to bear on the expeditious handling of business and the endeavour to foreshorten some of the lengthy consideration that the Council gives to matters that often are not of a particularly contentious nature.

It would be impossible to conceal the fact that the Opposition are far from content with the way in which the Government have performed over past years in relation to the Community. We have been disappointed on many occasions with the way in which they have handled matters. My intention, however, will not be to dwell on a whole series of criticisms. I shall try to offer some con- structive proposals for the future handling of our problems.

The White Paper as it stands is inescapably a very bitty document. Perhaps that is the nature of the thing. It is largely an inconclusive document. That is the characteristic of a document that describes something which the Minister of State has characterised as a somewhat stagnant experience. I believe that the document speaks of that experience. Unfortunately, it can only reinforce the belief that the necessary drive has not been forthcoming either from the United Kingdom or from others to secure a more satisfactory out-turn. I do not ascribe all the blame for that to the United Kingdom. It is not my intention to do so, but I think that the United Kingdom has shown a lack of single-minded purpose. Such an approach would have driven things forward rather faster than has been the case.

I shall not try to comment paragraph by paragraph on all that is contained within Cmnd. Paper No. 6695. I shall try to select various matters for particular mention, especially the three selected by the Minister of State. Before doing so I shall talk about a matter that is at the beginning of the White Paper and that appears to be of great importance—namely, political co-operation.

If progress in other matters may have been disappointing, progress on political co-operation has been intensely so. All we have as a result of the work done to date are some vague generalisations appearing in the document about the outcome of various discussions. They seem to belie the capability of the Community to use its undoubted prestige and importance in world affairs to secure solutions to extremely difficult problems worldwide and to help its members to secure such solutions.

I have in mind, for example, Cyprus. It seems inconceivable that the only comment that can be made in a White Paper is that the Nine continue to support the United Nations Secretary General in his efforts to promote a peaceful solution in Cyprus. Surely a Community that has intimate relations with the three principal parties involved could have done more than merely intimate its support for the United Nations Secretary General. It has a considerable influence to bear and that influence has not been mobilised. I strongly press on the Government the need to try to use the political co-operation machinery to help in these solutions. After all, the Government have a responsibility in relation to Cyprus which many of us feel has not been exercised with the necessary effectiveness.

I come to the question of Rhodesia. Again, there is a vague comment in the White Paper that On 18 October the Foreign Ministers of the Nine issued a statement on Rhodesia welcoming Her Majesty's Government's convening of a conference", and so on. The interests of the Community are closely bound up with the future of southern Africa. It is not simply a question of giving a word of encouragement and help to a member country.

Western Europe has a deep-seated interest in the preservation in southern Africa of responsible forms of government which recognise their enormous strategic importance to many other parts of the world, not least to the European Community. The Minister of State talked about our energy position. The strategic importance of the Cape route is more critical to other Western European countries than it is to Britain. I do not believe that they can consider their future with any equanimity if a hostile force were to be in charge in southern Africa.

May I say in parenthesis that our own happy position in this regard can, to a large extent, be credited to the Conservative Government, who, despite a good deal of adverse comment then and subsequently, made it their first purpose to ensure that the potential riches of the North Sea were explored and brought into production. It is in some sense a bitter experience to note the almost window-dressing nature of the agreements entered into by the Government with the explorers and producers in the North Sea to maintain the claims they have made. I refer, for example, to the agreement with the Shell and Esso companies last week which, on the whole, smacks of nothing but window dressing.

In addition, there is the extraordinary importance to us and to other Western European countries of the essential minerals of Southern Africa. It is not just a question of making broad and vague statements of support. The specific interests of the Community are involved in these issues and the purpose of the political co-operation machinery is to mobilise the force of the Community to help. We feel that it has been poorly mobilised and we therefore strongly urge the Government to use much more effectively the political co-operation machinery to help to solve some of these intractable problems.

I need not mention the question of the Middle East because the situation is so well known to us all. Thank goodness, the situation seems more hopeful than it has seemed for some time and it appears that the climate is such that it might be possible, after all these years, to procure a settlement.

I believe that the procedure set up under the so-called Davignon arrangements is inadequate to match the purpose and capacity of the Community.

Mr. Spriggs

The right hon. Gentleman has said that the Cape route was more important to some of our Common Market partners than it was to us. If that is so, may I ask what part he played in Europe in this connection while he was in office?

Mr. Davies

The political co-operation machinery is reserved for Foreign Ministers. I was not a Foreign Minister, so I was not the person to play a part. I gave every possible support to the then Foreign Secretary to try to achieve something from the arrangements, but this is a preserve of the Foreign Ministers of the Community.

I repeat that more formal, organised and structured arrangements than the existing informal arrangements under the Davignon procedure are necessary if we are to make the political co-operation machinery effective. Therefore, I suggest to the Minister, in a purely constructive tone, that he and his right hon. Friend might give thought to what advice they could offer the Community about providing a more permanent, organised, administrative back-up to the political co-operation machinery than has been procured hitherto.

I turn to the question of agriculture. It was clear from what the Minister said that his primary concern—and I understand it—was to try to ensure that the mechanism of the Community supported the drive towards the restraint of inflation which the Government have undertaken in recent years. However, we believe that the purposes which the Government have been serving are not necessarily in our long-term interests. Despite what the Minister has said, we do not think that the aims and objectives embodied in the White Paper "Food from Our Own Resources" have been evidenced by the policies pursued in the Community.

It is not right, or even fair, to say that the green pound considerations are just one factor among many other factors which affect the agriculture industry. Of course, that is right. But it is the relationship between these factors which matters. The Minister is well aware of the immensely troubled situation through which the pig-meat industry is going clue entirely to adherence to the green pound situation. Therefore, it is not fair to talk in such a balanced way when the balances in certain parts of the industry are totally adverse.

It is not right for the Government to compound what has always seemed to me one abuse of the common agricultural policy provisions—excessive milk production—with another, which is to climb on the bandwagon of the MCAs, which, I assure the Minister, were not conceived for the purpose of maintaining price equality within the framework of the CAP at any price. The MCAs were devised to provide for what were considered likely to be marginal differences flowing from the green rate of exchange, not to accommodate differences of about 40 per cent. or more, as has been the case recently.

The utilisation of an abuse of a mechanism in this form in order to support the Government's policies on inflation has made it much more difficult to handle just as serious an abuse, namely, the use of the intervention mechanism by the dairy producers of the Community simply to enable dairy products to go directly into intervention without contemplating that they would ever reach the market. I draw the Minister's attention to the fact that today, despite all the agonising problems which have arisen in the last year on the subject of surplus dairy production, the stock of skimmed milk powder is at about the same level as it was at the worst time last year.

The Government have not handled the problem properly. To have shown a more reasonable attitude to the purposes of the MCA system would have allowed a more reasonable attitude to be adopted to the regulation of the dairy products arrangements throughout the Community. Therefore, the policy which has been followed has not been conducive to the best arrangements within the framework of the CAP. For a long time we have expressed in the House objections to the preservation of anomalies in the CAP which we would all like to see removed. The Government's method of handling the whole of the representative rate system in the CAP has, unfortunately, preserved rather than dispelled some of the anomalies.

Dr. Owen

I do not wish to disrupt the right hon. Gentleman's argument, but, accepting, which I do not, his argument that the MCA system is an anomaly—and certainly there are many other anomalies in the CAP—surely the worst way of getting the anomalies changed is to give up the one card which we have, which is the green card, before we have substantive discussions on some of the other major considerations of the CAP. I do not accept that we have not been able to get anything done about the other anomalies in the past six months or so. Even if we accept the right hon. Gentleman's argument as a basis for negotiation, the position is one of more substance than he has indicated.

Mr. Davies

I think that it is a question of the posture of the Government. I think that they put themselves in a hopeless position, in trying to bring effectively home the dangers involved in the pure abuse of the intervention system by others, by attaching themselves to a pure abuse of the currency system of the United Kingdom. I would add to that the fact that the effect is now specifically to damage the Government's own purpose as explained in the White Paper on the agricultural industry. The Minister of State spoke of an economy of £750 million in the import programme, but how little we have advanced to that objective since the publication of the White Paper. Many of my right hon. and hon. Friends feel, indeed, that we have specifically moved backwards from it. It is a most serious problem.

I turn now to the question of fisheries, with which the Minister dealt at some length. I was conscious of his feeling when he made his statement that my own reaction was provocative. I know him to be a reasonable and sincere supporter of the objectives in this matter, and I re-examined the whole question very carefully to see whether I was wrong in being as sharp as I felt at the time. But I do not withdraw anything.

Looking back, I do not welcome any more than he does the fact that the Community saw fit in 1970 to enter into an agreement which just ante-dated our application for membership, but when we were negotiating in 1971–72, the circumstances within the fishing industry which apply now—such as the whole question of a 200-mile exclusive zone—were hardly even considered. The problems of the fisheries were considered very much within the framework of the inshore areas.

I do not really believe that the provisions of Articles 100 to 103 of the Treaty of Accession were anything but a reasonable approach to the problems of fisheries, given that, not with our will, the common fisheries policy had been entered into by the Six. They provided just the things that the right hon. Gentleman has talked about—for a move by the Community into a proper conservation policy, and for derogation from the provisions of the fisheries policy over a period of 1982, provided that, before then, we could make a case and, if it were judged correct, for that derogation to be prolonged or amended. In the circumstances, I do not think that the kind of provisions embodied in the Treaty were either negligent or in any way inadmissible in the situation we were then in.

One must look at what happened afterwards. Subsequently, and since this Government came to power, there has been a rapid move to the concept of much larger exclusive zones, and there has also been the whole question of the Law of the Sea Conference itself. We were all disappointed by the results of that conference in that the move generally to a 200-mile limit is being done individually as pressure has increased for such action.

I do not think that the right hon. Gentleman's argument that in 1975 it was not sufficiently clear what the situation would be to justify incorporating the fisheries question in the re-negotiations is very convincing. Rather it seems to have been the case that the Government were extraordinarily blind to the fisheries question as well as to the fact that the whole of the worldwide concept of the problem was advancing rapidly. I think that their reaction then was both tardy and inadequate, giving rise to the circumstances we saw in the latter months of 1976, when, in an extraordinarily hurried way, this major and complex problem was endeavoured to be regulated largely with partners in Europe who were not brought to the degree of urgency of mind that they should have been and that we were in ourselves. The result was a hurried scramble and a whole series of rather inexpert and ineffective arrangements.

I believe that the impression that the Government have given in this matter is one of unpreparedness and extemporisation. That is also evident in the wholly provisional arrangements entered into in what one might call a crisis in early 1977. Now the right hon. Gentleman speaks with a major degree of uncertainty about what form this provisional interim agreement will have to be modified into in the next month or two. He is right in his belief that we shall not settle the problem in the next few weeks.

Our concern is that the impression that the Government have given is one of dilatoriness to a point when we find ourselves confronted with a lot of crisis measures which do not seem to reflect the reality of the problem. We do not expect the right hon. Gentleman today to outline precisely his negotiating procedure with the Community—we know how difficult that would be—but we think that he needs to give us a much greater degree of reassurance that the Government have taken these issues properly on board and will really struggle for an adequate exclusive zone which allows both the issues of conservation and the issues of our own industry to be fully respected.

Another question dealt with by the right hon. Gentleman was energy. Here again I was not wholly content with his explanation. He said that the Government had sought to move the Community forward. I do not think that that is the impression that the Government have managed to give. Indeed, they have managed to give the impression that, having got themselves hooked on a prestige issue of their own making at the time of the ministerial North-South dialogue, they felt obliged to continue to attach themselves to it in spite of good reasons to the contrary.

The right hon. Gentleman made a point of the minimum selling price concept. Indeed, he said that it was likely to be cost-free, which seems to me to be another way of saying that it is absolutely useless. In present circumstances it is absolutely useless and should not have been used as a pretext by which we have held up progress towards an organised and effective energy policy in the Community in the last six months or so.

The issue is not minimum price. Let me assure the right hon. Gentleman that the floor price of oil is not the cogent issue. The cogent issue within the Community and more widely in the question of energy is that of the overwhelming demand for investment. It is an immense problem. It can be quantified if one looks at even the rather restrained estimates of investment in energy in the Community as a whole over the next decade, because we are then talking about 200 billion or more units of account in the energy industries at 1974 values. That is the size of investment that the Community has to contemplate.

This investment is, of course, very heavily weighted on the electricity generating and transmission side. The second great priority is in hydrocarbon development, but the first priority is generation and transmission, which hits us as much as the rest of the Community. It will demand a quarter of the total industrial investment in the Community in the next decade.

This is a very great problem. It occurs at a time when the natural apparatus of the industries concerned to finance themselves has greatly diminished. The traditional pattern of the hydrocarbon industry worldwide for many years lay in financing 90 per cent. of its own investment from its own retentions. The present position is that marginally less than 70 per cent. of operations in the Community can be financed from its own retentions.

The electricity industry is in an even less happy position. The ability of the electricity industry to finance its own investment amounts to a figure of 30 per cent. within the Community. The rest of the operations have to be financed externally. This is a key problem in the Community and we must devise methods to tackle the matter energetically. The money cannot all be procured by external borrowing on the financial markets. The size of figures involved can be generated only by industry working to profit and to high retentions. This issue must be subjected to the most intense consideration by the Community in the coming period. It is excessively unwise to become involved with minimum selling price and all it encompasses.

I turn to the subject of external trade, which is of great importance. I note the hope expressed in the White Paper that the Tokyo round will be concluded by the end of 1977. I doubt whether that is true, but one can only hope.

The key issue involves the safeguarding arrangements. In the way matters have developed in the last decade we have come to realise that Article 19 of GATT as originally envisaged does not provide safeguards for countries such as the United Kingdom and others in the West against the dangers of dumped imports. We are all conscious of the difficult negotiations now being conducted by the Community with Japan on certain topics. Two of the most difficult areas of negotiation at present relate to textiles and shipbuilding.

In regard to textiles the Multi-Fibre Arrangement within the framework of worldwide trade agreements contains an essential flaw. It assumes that the developed countries can accept a greater degree of imports on a regular basis irrespective of movements in the market. That is a fundamental error in approach. When markets are in grave recession, it is not possible to accept automatic increases in the extent of import trade. This must be handled by an orderly re-arrangement both of the Multi-Fibre Arrangement and of GATT.

I have a word of criticism for the Government on the subject of shipbuilding. I remember as long ago as July 1975 raising this matter with the Under-Secretary of State for Industry. I put to the Minister the distressing state of the industry, but on that occasion he virtually laughed off the whole matter. The reply I then received took no account of the serious issues involved. Therefore, I now ask the Minister of State urgently to pursue the problems involved.

The Opposition are profoundly concerned about the Government's attitude to the subject of direct elections. The Government have declared themselves firmly on the subject and have made clear that they propose to introduce legislation early in the Session. But when will that be? By the terms of the agreement of 20th September, the failure of the Government to bring forward legislation in good time may well vitiate the total system of direct elections throughout the Community. I can think of no other matter that will do greater damage to the Government's posture in the Community. Lack of action on this score will cause tremendous disappointment in many countries. I enjoin the Minister to use all his endeavours to prevent this matter going by default.

Mr. Hugh Dykes (Harrow, East)

Will not my right hon. Friend go further and say that the hint of the prospect given in today's Business Statement—namely, that because of the heavy legislative programme doubt may be cast on the introduction of a Bill to bring in direct elections—would be quite intolerable to the Opposition?

Mr. Davies

Such a concept would be disastrous to our position in the Community. My hon. Friend will know that the decision reached by the French constitutional council at the end of December further underlines the need for us not to be lacking in effort in this regard.

Mr. Neil Marten (Banbury)

Since my right hon. Friend is making his contribution from the Opposition Front Bench, I should like to put one important point to him. Since clearly direct elections will be very expensive, will he, on behalf of the Conservative Party, of which he and I are members, give an assurance that, as we refused money from the Government following the Houghton Committe proposals, we shall not now agree to take any State money—indeed, money from any State in the Community or indeed from anywhere else—for the purpose of forwarding direct elections? In other words, if we fight at all, we shall fight on our own.

Mr. Davies

I assure my hon. Friend, whose sincerity I respect, that if we can so arrange the system that these matters are dealt with in time, the funds to fight these elections will be available.

What I have said in these remarks has been intended to be helpful and creative. Since so many of the people who will chair Council meetings in the next six months will be people who have declared their total opposition to the Community as a concept, it will be even more necessary for the Government to use all their power to show that they mean to stand by their commitment to Europe. They must show that they mean to pursue the policies in which Europe is engaged to finality and to success.

5.38 p.m.

Mr. Bryan Gould (Southampton, Test)

A few days ago we celebrated, if that is the right word, four years of Common Market membership. At the time of this anniversary it can only be said that our perennial economic crisis seems worse than ever.

We all remember the remarkable unanimity at the time of the Common Market debates on the subject of our economic future following Common Market membership. We were told almost ad nauseam that our economic well being depended on our accession to the Community. However, nobody who then took the view that membership was the key to our economic survival now breathes a word about the impact of Common Market membership in terms of our economic difficulties. It is almost as though that aspect is regarded as unimportant.

Those weighty organs of opinion which proclaimed the enormous advantages of Common Market membership are now strangely silent. The irony is that the nearest thing we have had to an admission that things have not gone according to plan was made perhaps unwittingly by the right hon. Member for Sidcup (Mr. Heath), who led us down the road signposted "Common Market membership", and tells us when we are there that we have reached the end of the road.

There were those who warned that EEC membership might be an unequal bargain for us, that it was hard to imagine any arrangement more inimical to our interests. When those few muffled voices were heard—no doubt muffled by wads of pound notes and acres of news print—how easily dismissed they were as extremists by that self-defining establishment that simply labels as extremist any view not in accordance with its own.

Even we hardly dared forecast the economic disaster that has befallen us. Even we did not imagine that our trade deficit would be quite so horrific, or that the impact and damage to our economy as a whole and to our currency, investment and employment, would be quite so severe. One useful example of how far reality of Common Market membership has outstripped even pessimistic predictions is to be found in a very good speech made in Cardiff in 1971 by my right hon. Friend the Prime Minister. At that time he was an anti-Marketeer. He addressed himself to the view advanced by pro-Marketeers that Common Market membership would mean an increase in our exports of £300 million.

My right hon. Friend said "Ah, but that must be offset by the penetration of our own market by Common Market imports and also by the loss of our markets in the Commonwealth and EFTA." The Prime Minister said that far from having a £300 million surplus the surplus might well only be £50 million. That was the forecast given in 1971 by a self-confessed anti-Marketeer at that time. That modest prediction is absolutely dwarfed by the reality of the £2,300 million deficit last year.

There are those who play around with these statistics and say that other aspects of our trading deficit have increased by a greater proportion and so on, almost as though these are figures which mean very little and can be magicked away, or that they do not mean the draining away of the industrial life blood of this country.

By coincidence we happen to have had a report from the CBI in the past few days which called for increased production in exports of £2,500 million. It says that that would mean an additional 400,000 jobs. I believe that is an underestimate, but at least it gives us some idea of the dimension of the loss of investment and employment that we have suffered as a result of the trade deficit. We have suffered the deficit largely because of the distortion in our trade pattern. We pay more for our food—that is now quite incontestable. It can no longer be concealed even by the most fervent pro-Marketeer.

There is a very good summary in an excellent paper produced by the TUC with regard to the CAP which shows that virtually all major food stuffs are now more expensive within the Common Market than outside. Certainly it is overwhelmingly true of dairy products; it is very much true of meat products; and it is even now true of grain products as well.

There is always the ludicrous argument that the green pound is subsidising our food imports. The frequency with which that canard appears shows how ill-served we are by the Press on this sort of issue. By comparison with the increased prices that we have had to pay and the increased prices that we shall have to pay as we proceed through the transitional phase and as further price increases are agreed in Brussels, the subsidy that we receive from the green pound is rather in the nature of a 2p-off offer which no self-respecting housewife would fall for, and nor should we.

There are those who say that we ought to maintain the pristine purity of our Common Market faith and that in that interest we should suspend all critical judgment. Sir Henry Plumb, the President of the NFU, seems to be one of those people. He says that those who criticise the CAP must be disregarded for the very good reason that they do not like the CAP and actually want to reform it. Sir Henry Plumb seems to have this curious idea that simply by labelling people, one somehow discredits their motives and invalidates their views.

This very morning we had Press reports that the Dairy Trade Federation was urging that we should stop further imports of New Zealand butter and cheese. Presumably what it wants is a situation where, like beef, we are simply forbidden to import cheap products from abroad outside the Common Market.

Never mind that New Zealand produces at less than half the price. Never mind that as prices have moved up in Common Market terms so consumption has reduced. Never mind that this self-same increase in price has meant that Common Market countries have increased their exports to us from 35 per cent. of our imports in 1971 to 74 per cent. in 1975. Never mind that EEC levies have trebled the cost of New Zealand butter to £1,020 per ton of which the New Zealand producer gets only half.

Our trade deficit is not just a matter of higher payments for food. It is also accounted for by a staggering deficit on manufactured goods. The two items are related because higher food prices strip us of our one competitive advantage. They put up our industrial costs and reduce our competitiveness. These increased costs again go some way to explaining the staggering deficit on trade in manufactures with Germany of £930 million last year. The Department of Employment estimates that that represents 200,000 jobs in British manufacturing industry.

It is also worth making the point that the deficit which the EEC as a whole has suffered in its trade with Japan represents just 1 per cent. of the EEC total import bill. Yet that is thought to be sufficient justification for asking the Japanese voluntarily to restrict their imports to the EEC. Our deficit with the EEC, as a proportion of our total import bill, is 7 per cent.—proportionately seven times greater. Yet we are expected to accept that without protest and some people would say that we should not even notice it.

This has all happened even though we have had a forced devaluation of our currency of enormous proportions. How many of those optimists warned us that this would be necessary? We have had to devalue in order to maintain the competitiveness of our manufactures and even with that staggering deflation we have not succeeded in doing that. Our export prices for manufactures are less competitive now than they were in 1973, and, as opposed to most of our Common Market competitors, less competitive than in 1974 and 1975. Yet that very devaluation, which had been forced on us by industrial free trade, has at the same time made the price of the CAP an even more crippling one.

It is argued that only because of the fortuitous and humiliating green pound we have so far not suffered as much damage as we might have done. Let us have no illusions that the CAP is now so expensive, and so damaging to our interests, that we simply cannot afford it. If we were to allow prices to rise, as would be required by a devaluation of the green pound and by the completion of the transitional phase and all the expense of a further round of price increases, that would virtually bankrupt this country and certainly impoverish our people. The extraordinary thing about the humiliating and terrifying trap in which we find ourselves is that we continue to enmesh ourselves further with indifference, complacency and sometimes even a fair simulation of enjoyment.

The Foreign Secretary, writing in the Socialist Commentary, said that the economic effects of Common Market membership have been neutral. That was despite all the facts. By far the most fatuous example that I have recently seen of that sort of self-deception was a report in the Evening Standard on Wednesday. It contained an article trying to explain why we should not be too worried about the high level of car imports and reported the view that French, German and Italian car imports should not be counted as imports at all because we were all in the Common Market together. What a nice idea!

These imports put people out of work, close factories, reduce investment, unbalance our trade, slash our standard of living, devalue our currency and reduce us to the status of an international beggar. But these minor considerations must be disregarded and should not be allowed to disturb the warm glow of virtue and self-righteousness which so many people enjoy at the thought that at last we are members of the Common Market.

It is time that we faced the facts. In my view, our failure and unwillingness to do that are our greatest national failing at present. It is time that we recognised that the great British Establishment—all those moderate men from the political parties, The Times leader writers, the captains of industry, the leading academics and civil servants who all persuaded the British people that it was important that we should join the Common Market and who all congratulated each other on how right they were—were wrong.

The fact is that that great moderate British majority, on this issue as on others in the past, has been fundamentally, resoundingly and immoderately wrong. All those who did not bother to do their own thinking because they were confident that so many eminent people could not possibly be wrong, who did not bother to do their own sums and who did not look at the small print but simply felt in their bones that it was right to join the Common Market, should recognise that bones are not what we were provided to think with and that what we have joined is not some marvellous, idealistic, brave new world but a world of national cut-throat competition in which we have for too long been content to give up our best cards as part of the continuing price of joining the game.

The next six months during the term of our presidency will be crucial. We must at least set about the task of repairing the damage that we have suffered. I think that there are welcome signs that attitudes are changing. I think especially of the rôle played by my right hon. Friend the Minister of Agriculture, Fisheries and Food. But even amongst the media there are the first glimmerings of comprehension that perhaps our economic problems have something to do with this much-vaunted membership of the Common Market.

We must now appreciate that protestations that we are good Europeans will not in themselves protect our interests and that they can be protected only if we pursue them ourselves with resolution and determination. We must judge every proposal emanating from Brussels not according to whether it advances or retards some personal vision of the future of Europe, but according to how it affects the interests of those whom we are elected to represent.

5.53 p.m.

Mr. Neil Marten (Banbury)

We have just heard a very powerful speech from the hon. Member for Southampton, Test (Mr. Gould), and I disagree with practically no word of what he said. In a way, I propose to follow in much the same vein but also to try to look ahead to see how the situation can be improved.

It might be as well at the outset if I place on record that the total number of Back Benchers in the Chamber at the moment is nine, which is not really a great credit to the subject that we are debating.

It may be thought by some right hon. and hon. Members who have heard me speak before on this subject that I am biased about the Community. [Interruption.] I much enjoy the shouts of dissent from my colleagues. I am glad that they do not think I am biased about it.

Mr. John Davies

My hon. Friend is biased and prejudiced.

Mr. Marten

In that case, I shall take not my own views on the Community but those of others who are very pro-Market, who have lived in it and with it, and, to satisfy my right hon. Friend that it is not my own views that I am expressing let me express one or two of those other views in order to put matters in a fair, objective and unbiased perspective.

Before anyone suggests that we should be worse off outside the Community, may I remind my right hon. and hon. Friends that my right hon. Friend the Member for Sidcup (Mr. Heath) put his signature to our party's manifesto in 1970 in which he said that we can negotiate with the EEC … confident in the knowledge that we can stand on our own if the price is too high. The price is already too high, as the hon. Member for Test pointed out. Therefore, I turn to the first part of that sentence, and I am confident in the knowledge that we can stand on our own if we are not in the Community any longer.

But, for the critics, I call in aid first the President-in-office of the Council of Ministers from July to December. He has been more connected with the Community over the years than most people. In his opening speech he said: the motto 'completion, enlargement and strengthening' has been replaced by the motto 'stagnation, decline and illusion' … The Community apparatus … seems to he sterile and ineffectual. … These signs of disintegration are produced day by day … The realities which at one time were to have formed the basis for our European solidarity now seem to be the cause of differences, of our growing apart and the parting of our ways … the Community structure has reached an advanced stage of erosion, and one may well wonder how long it will be before the European Treaties and everything that has been achieved on the basis of them will simply be a valuable historical curiosity … the Community is suffering from a political anaemia clear for all to see. So, although my right hon. Friend the Member for Knutsford (Mr. Davies) may think that I am sometimes biased, all I say is that I agree with that great expert on the situation in the Community.

Then I turn to experts in this country. I have before me the publication called "Facts". It is published by the European Movement. Its view of the Community is as follows: Talk of economic and monetary union … is little more than a sick joke … no progress to reform the Common Agricultural Policy has yet been made. Neither do we appear to have learnt the lesson of the 1973 oil crisis, and still lack any coherent common energy policy. The Community has no common industrial or transport policies, whilst a common foreign policy, still outside Community competence, is little more than a dream … the Community has ground to a halt. Those are the views of British Marketeers.

The hon. Member for Test categorised a number of people who were in favour of the Common Market, including The Times. I notice that on 4th January, in an article entitled "Brussels backstage", Mr. Michael Hornsby wrote under the heading "Bout of depression": Small wonder then, that last month's summit meeting in The Hague should have ended on a note of helplessness and scepticism about the EEC's ability to provide any constructive, collective answers to the difficulties besetting its members. So we have the great authority of the correspondent of The Times.

Finally, I quote about the Council of the European Council and the shambles in which that operates. Speaking in the European Assembly, my hon. Friend the Member for Saffron Walden (Sir P. Kirk) said: We may have said harsh things about the Council of Ministers before, but we would much rather have them than a European Council which not only does nothing, but prevents anybody else from doing anything too. That is the view of the Leader of the Conservative delegation to the Assembly about the European Council—the so-called summit meeting. Without giving my own impressions of the Common Market, I think that I have produced enough evidence to show that it is not exactly in the best of health.

But one touching little incident happened in the Scrutiny Committee just before Christmas. We met on the Wednesday before Christmas and had a long list of documents that we had to consider. Suddenly there was whisked before us an additional document called "Trichinae in pigmeat imported from third countries". When we inquired what that word meant, we discovered that it meant ringworm. We asked why ringworm should be rushed in front of us like this when we had been told previously that there was no hurry for it as the instrument would not be coming in until later in 1977. A brief from our adviser said: This was explained to the Ministry of Agriculture, Fisheries and Food when it telephoned last week to inquire when the Committee were likely to consider the instrument. When asked why a matter which the Commission had had under study since 1972 had suddenly become much more urgent than had been forecast, the Ministry of Agriculture explanation was that the Dutch, who import a lot of pigmeat from outside the Community, 'wanted to get something out of their 6-months Presidency'. Weeping considerable tears, the Scrutiny Committee, after deep thought, said that Christmas was coming and pigmeat and ringworm were important, so in order that the Dutch could get something out of their six months' presidency this regulation should go through. So we let it through. I mention this because it illustrates the pathetic state of the six months of presidency of the Community by the Dutch.

I cannot see how or why there should be any improvement in the state of affairs in the Common Market. Is there any reason why it should not get worse? The Community has a tragic history in the past year in the way in which it has gone downhill.

There are some people, including the past President, Mr. van der Stoel, who believe that all the problems will be solved by direct elections to the European Parliament. I believe that people who think like that include a number of my right hon. and hon. Friends. They really believe that direct elections will make some difference. I do not agree. I think that they are merely clinging to direct elections like someone clings to a raft to save himself from drowning when he is in very rough seas. That is what direct elections are all about.

If one looks at it, one sees that, despite all the efforts of my colleagues who attend the European Parliament from time to time, it is an ineffective Assembly which has no power. It is a powerless body. If it is directly elected, will this increase its powers? If so, what powers will it have? If it is to have legislative powers—the Tindemans Report and the summit communique of 1974 referred to an increase in legislative powers—surely this Westminster Parliament will become inferior and the European Parliament will be superior. I do not think that that is at all acceptable to the people of this country, and it is certainly not acceptable to the French people. My right hon. Friend the Member for Knutsford referred to the judgment of the French constitutional council which made this position quite clear when it put out a warning that any move towards a federal Europe, or a loss of power by the French Parliament, would be opposed. Exactly the same would happen in this country. I know that my right hon. and hon. Friends on the Front Bench would oppose any move towards a federal Europe.

If the European Parliament is to have no extra powers—and this is the soft soap which is sold to us—why send 81 highly-paid people, complete with their researchers and secretaries, to sit on what is a toothless and powerless Assembly? Then there is the cost of it—the salaries, expenses and so forth. My concern is that my own party, which is so keen on direct elections, will spend a lot of money out of its hard-collected funds on direct elections because we rejected the idea of any public money being allocated for political activities as recommended by the Houghton Committee. Public money in this case includes money from the EEC, to which we have already contributed. Therefore, unless we as a party intend to operate double standards, we must accept that there will be no acceptance of any public money from the Community for direct elections if they ever come about.

I want now to look ahead. The problems of fishing have been mentioned, and I shall not go through that again. On the common agricultural policy I will make some comment, because both Front Benches have talked about reforming the CAP. In fact, nothing substantial has ben achieved at all in two or three years. The Prime Minister, in answering questions put by my right hon. Friend the Member for Down, South (Mr. Powell), said something to the effect that the CAP was the price we had to pay to get into the Common Market. Of course, my party said that once we got into the Common Market we could ensure that the CAP was changed. But the fact is that there have been only very insignificant, if any, worthwhile changes made. I asked the Prime Minister about this myself, and he told me that the difficulty was that there were so many vested interests that it was very hard to get any worthwhile change. He is quite right, and this is why we have the CAP as it stands. That is why I commend the Government for using this card of the green pound in order to get a change in the CAP.

The Financial Times in its second leading article today referred to the "grotesque defects" in the CAP, and it is my view, which I have expressed inside and outside this House, that the CAP is an absurd system. There is nothing to justify butter, which costs 45p a pound at present, going up to 72p a pound at the end of this year, except the system. There is no reason why it should go up except that this is the CAP system.

Skimmed milk is another example. We have had an awful mountain of skimmed milk, which the Intervention Board of the Common Market buys in at over £500 a tonne in this country and sells back to the farmers at £100 a tonne. This is an astonishing system. It is a system which builds up a surplus of this and that—of wine, butter and skimmed milk—and then sells it at cut prices to people outside the Common Market. If we were outside, we could buy all these surpluses cheaper than we can buy them inside. That demolishes the argument that by being in the Common Market we have security of supplies of food. If we were outside, the Common Market would be very willing to sell to us. The argument that the surpluses are there for security of supplies does not stand up to scrutiny.

The President of the National Farmers' Union, Sir Henry Plumb, said on 3rd January at an Oxford farmers' meeting that any attempt to scuttle the CAP would signal the break-up of the European Community. He said that those who attacked the CAP were well aware of the fact that without the CAP the EEC could not survive. Sir Henry added: Make no mistake that the end of the CAP will certainly mean the break-up of the Community. Does the Community really hang on a system which is as crazy as the CAP? It is a pathetic system and the sooner it is changed into something else the better.

Now is the time to consider the future, because clearly we cannot go on like this. The sooner the Common Market, its members and supporters recognise that the Community still consists of nine independent sovereign countries, the better. There will always be an attempt by people to move the Common Market into a federal State, to make it one unitary State. But within the Common Market there are certainly two countries which would always veto that move. One of them, I am proud to say, is my own country, and the second is my second country, France. Neither of those countries would accept any move toward a federal State.

We must, therefore, recognise that it will not come about, and, recognising that, we must accept that the Common Market will never make very much progress. The only way it could ever work would be as a federal State, and that it will never become. We must think, therefore, of how the Common Market will develop, because it cannot go on as it is. It must aim at achieving maximum co-operation with all countries, particularly in Europe—and I include Scandinavia in that—and even with countries outside Europe.

Its trading policy should move much more towards a free trade area concept rather than the concept of a closed circle sitting behind a tariff wall. We should stop the Common Market's supranational law-making machinery making farcical laws which only bring it into disrespect when it seeks to harmonise water, tachographs, honey and a list of much more peculiar items than that.

A very good example of what I mean is the attempt by the EEC to have a passport union. It would mean that all our passports from, I believe, 1978 would have "EEC" stamped on the front of them. I hope the Government realise that to put those letters on the front of all passports will be extremely offensive to the 8 million people who voted "No" in the referendum and who wanted nothing to do with the Community. I would not think that those who voted "Yes" in the referendum—I think that if it was held again their number would be a lot smaller—would object to not having "EEC" stamped on the front of their passports.

The Nordic Union has a passport union, but each country uses its own passport without stamping "Nordic Union" on the front. The Common Market could do the same, but the reason for this move is purely cosmetic. The Government should consider the offence it might cause to those who opposed entry.

Let me turn now to the Scrutiny Committee, of which I am a member, and the way in which it deals with Common Market matters. The Committee does a good job. Usually the tributes are paid to the chairman of the Committee, who is my right hon. Friend the Member for Bournemouth, West (Sir J. Eden). I gather that he has just got married and is having his wedding reception at about this moment. I express my congratulations and best wishes to him.

The Committee which my right hon. Friend chairs receives about 20 or 30 documents each week. We let a lot of them through because they are unimportant, but we recommend that many of them should be debated because they are important and because we think that the House of Commons should have the chance to express a view about them. At the last count, 77 of the documents that we had recommend for debate had not been debated. When we debate them our debates are usually a mere farce. They are held late at night and they are usually too short. There has been a tendency recently to hold them on Fridays, when hon. Members with country constituencies like to be away in them.

I raised the question of statements earlier today. In 1976 there were 54 meetings of the Council of Ministers. Ministers ought to make a statement to the House after these meetings to tell us what they have done and what is going on, but oral statements were made on only 11 occasions last year. I do not know whether Ministers are embarrassed by the failures of their meetings and, therefore, do not want the House to find out or to stand at the Dispatch Box and face the House. I hope that in the new year they will tell us more about their meetings.

Recently we had an interesting debate on the value added tax harmonisation structure. Many important points were raised and many of the answers that we were seeking were not given. The House expressed itself almost wholly against the exemption ceiling for VAT being pegged at £5,000. The Minister has since had the negotiations, but he has not told us what he has agreed or what is happening. I have tabled a Question for Written Answer for Wednesday, so I hope to get the information then. That is the wrong way to treat the House of Commons.

We are here handing over power to the Executive, and Parliament must always fight against that. Parliament must fight the Executive when it thinks that the Executive is doing wrong. The House should question from time to time the cost of all the regulations which pour out of Brussels. We should ask how many more bureaucrats are needed to administer the minutiae which the bureaucrats of Brussels have cooked up in order to keep the bureaucrats here in jobs.

I believe that the country is becoming more and more disillusioned about the Common Market. A Gallup poll was published last September, although I did not see it reported in the newspapers. It asked people whether, if they were told that the Common Market was to be scrapped, they would be very sorry, indifferent or relieved. The results were that of those asked 25 per cent. said that they would be very sorry and 65 per cent. said that they would be indifferent or relieved. That latter figure breaks down into 30 per cent. who would be indifferent or could not care less and 35 per cent. who would be relieved that the Common Market was to be scrapped. Only 11 per cent. of those asked did not know. I give those figures in support of the theme of my speech, which is that there is a general feeling of growing disillusionment in this country with the Common Market.

Let me summarise, therefore, by saying that Parliament must begin to think about what will happen. If the Common Market is to disintegrate, as the Dutch Foreign Minister and others, but not I, say it might, we should have a policy to cover such an eventuality. As the Government's pamphlet during the referendum stated, The British Parliament in Westminster retains the final right to repeal the Act which took us into the Market on January 1, 1973. Thus our continued membership will depend on the continuing assent of Parliament. That means that we always have the right to come out.

I am not suggesting that we do that at this moment, but we should take seriously the trend of events in the Common Market. As the hon. Member for Test said, we should not just brush it aside. The time has come for us to take the future of the Common Market very seriously, to consider where it is going and how we on both sides should approach the problem.

6.19 p.m.

Mr. Russell Johnston (Inverness)

As I think they say in psychic circles, I have a strong sense of déjàvu. I am not sure whether someone has by accident placed me on a magic carpet, put its gears in reverse and whisked me back to 1972 or perhaps to the referendum debate. Nothing appears to have changed. I do not intend to spend too much time rebutting the almost theological arguments which now come from Banbury and Southampton and which doubtless in due course will come from Battersea. It is not particularly fruitful to go over again and again the arguments which have been well rehearsed in the past.

Mr. Spearing

Can the hon. Gentleman explain why he says that nothing has changed when my hon. Friend the Member for Southampton, Test (Mr. Gould) has shown that there is a £2,000 million deficit? The big difference between debates in the past and those held now is that most of the arguments of the anti-Marketeers are shown to be correct while the prognostications of the pro-Marketeers are shown to be wrong.

Mr. Johnston

I entirely rebut that contention. I do not believe that the size of our deficit is due to our membership of the Community. The fact is that not only would it take too long to rebut all of those arguments but I know full well that even if I rebutted them with total lucidity it would have absolutely no effect upon those who propound them. It would be a wasted exercise.

I agree with the right hon. Member for Knutsford (Mr. Davies) that it is rather strange and regrettable that this House should be discussing developments in the EEC on the first day of the plenary session in Luxembourg, especially when we consider how much has been written and said about the need to have a connection between the European Parliament, or Assembly, and this place. It was an extraordinary decision on the part of the managers of Government business. Equally, I agree with the hon. Member for Banbury (Mr. Marten) that it is depressing that at the outset of the debate there were only 18 Members present, which figure has now dropped. This is, perhaps, a sad reflection on the degree of importance which hon. Members place on this question.

I shall be in Luxembourg tomorrow to hear the Foreign Secretary, who, we hear, is to make a wide-ranging speech. I earnestly hope that he will have something to say. I fear that he will be like the king in the Hans Christian Andersen story who, although he tried to pretend that he was richly apparelled turned out to be very naked indeed. We have been in the Community for four years. The nature of our behaviour as a country—and I speak both pre- and post-referendum—leads me to ask the question: Why did we join the Community?

I am not posing that question in the sense that it would be posed by the hon. Member for Banbury. Surely the purpose of joining the Community, the reason why people voted to do so, was that there was an acceptance by the majority that there were matters which could not be effectively dealt with on a national basis and, therefore, would be more appropriately and effectively dealt with on a wider basis within the Community.

Already one notices that the hon. Member for Kingston upon Hull, East (Mr. Prescott), who leads the Labour movement in the European Parliament, although a convinced anti-Marketeer, is using the Parliament in the proper way, to attack, for example, the power of multinational companies. This is something which cannot he done effectively on a national basis. It shows that, even though the hon. Member may theologically continue in his opposition, in practice he is using the machinery available to him to do what can be done.

I agree with the hon. Member for Banbury that the EEC must move towards supranationalism or it moves not at all. It is not right to suggest that supranationalism inevitably means federalism tomorrow, European union tomorrow or a commitment to any particular constitutional model. It means going out to tackle problems which are incapable of national solution and accepting that the Community is an effective vehicle for doing this. In other words, European union should be looked upon not as an end but as a means, a means of dealing with problems. We shall move towards it at the pace which the problems dictate.

It is sad that the Labour Party, which prides itself on being a party of reform, should so lack a vision of any kind about the sort of Community it wishes to see. When the Foreign Secretary speaks in Luxembourg tomorrow, he must give us a glimpse of a vision, of aims, hopes and ideals and of what is intended for the future. If he does not do so, the British presidency will be a grave disappointment.

One important question in terms of the Government's approach concerns their attitude to and relationship with the Commission and the kind of influence they exert on their partners in the Community with regard to the Commission. The Commission was established by the treaties as the source of initiative and change of harmonisation and administration in the Community. Yet it is most marked that in recent years the Commission has come under increasing pressure only to produce initiatives which have been agreed in advance. Consequently the individual member nations not only use the power of their veto in the Council but seek to pre-empt the Commission's capacity for initiative. It the Government stifle this, there is nothing left in terms of the motor to drive the Community forward. I hope that the Foreign Secretary will seek to change attitudes in this respect.

Before leaving the subject of the Commission, it would be only right to pay tribute to George Thomson and Sir Christopher Soames, who contributed greatly to the work of the Commission during the period they served on it.

I conclude what is of necessity a brief speech by referring to certain specific aspects of evolving policy. It has already been remarked that the Under-Secretary, in introducing the debate, made no reference to direct elections. I thought in passing strange that he did not do so. I share the concern of the right hon. Member for Knutsford about whether we can meet the deadline of May 1978. Again, it is extraordinary that the Labour Party should be dragging its feet over the democratisation of the Community. It would be appalling if we, alone of all the Nine, were the cause of delaying direct elections—we of whom so much was expected in terms of democratic input following our entry.

I shall not take this opportunity to dilate on the subject of proportional representation, much as I am tempted to do so. Apart from preventing bizarre and dangerous results, proportional representation would also obviate the prolonged Boundary Commission arguments into which we are likely to be plunged and which, even if the legislation is brought forward much more expeditiously than seems likely, will be the cause of delay.

The Minister made no reference to the interface, which I believe exists, between devolution on the one hand and the Community on the other. I suppose that this is basically because the Government pretend that there is no connection between these two things. However, there is and will be such a connection. When we establish Assemblies in Scotland and Wales we shall, in EEC parlance, be creating subordinate public bodies which have rights under the treaty. They even have the right to bring the British Government before the courts if they feel that the Government have transgressed the treaty in any way. Such subordinate public bodies have a right of audience with the Commission and the right to put their case. The Government have not given this matter sufficient attention so far.

Thirdly, the Minister made no reference to regional funds and regional policy and the fact that the whole subject is to be reviewed this year. I hope that the Government will reconsider their attitude on regional policy. If we are to have a genuine European regional policy, the intent of which is to shift resources from the richer to the poorer parts of the Community—which is the objective for which George Thomson worked so hard—it must be done on an EEC basis and not on a predetermined share-out by percentages or on the basis that only national Governments may approve where and on what the money may be spent.

What is the Government's attitude to what is referred to in the appalling jargon of the Community as global additionality—the question of ensuring that money from the regional fund is used as additional expenditure for regional purposes rather than as a substitute for money which we would otherwise have spent ourselves? We cannot have an effective social regional policy if Governments use regional funds as a means of balancing their budgets. What is the Government's attitude to the size of the fund in future? There are arguments for and against increasing it with the guidelines as they are.

I shall not, because of the lack of time, refer to foreign policy, but I agree basically with what the right hon. Member for Knutsford said about Cyprus and Southern Africa.

The Minister referred to energy policy, the green pound and fishing. Clearly it is not possible for me to deal with those subjects in the same detail, but it surely must have required enormous gall for the Minister blandly to say that the Government have consistently sought to move the Community forward on a common energy policy. This Government alone endeavoured to scuttle the possibility of tackling the energy crisis on a Community basis and neglected the exposed position of the Netherlands.

The Minister referred to the green pound. Although I agree that there is an element of swings and roundabouts, with advantages here and debits there, throughout the Community, the variations are now so wide that, as Commissioner Lardinois emphasised before he gave up his responsibility for agriculture, the CAP is at risk.

On fishing, I still believe that it is possible to achieve within the Community an exclusive zone, maybe on the basis of what is being referred to as the "Prescott compromise"—the interesting proposals worked out by the Labour Group in the European Parliament. The arguments must be based not on nationalism but on fairness to fishermen and protection of stocks. Both arguments are soundly based. The interests of the country off whose shores fish breed in their protection is obviously far greater than the interests of any group of countries.

Nationalism continues to bedevil the Community. If our presidency, brief as it is, can demonstrate that we are beginning to turn away from nationalism and to think in Community terms with a clear sense of a future within the Community, that will be a great advance. Sadly, the Community needs a stimulus. We could provide it, and I very much hope that we shall.

6.34 p.m.

Mr. James Johnson (Kingston upon Hull, West)

I was pleasantly surprised when the Minister of State started his speech by referring to fisheries rather than to foreign policy or to other aspects of the Community. I do not know what significance can be attached to that fact, but it shows that the subject is obviously in the minds of the Minister, his colleagues and the Government.

The Minister spoke with his usual courtesy, and I believe that he will show fundamental common sense in this matter. I could find little with which to quibble in the substance of what he said or in how he said it.

However, the right hon. Member for Knutsford (Mr. Davies) made a fair point when he referred to the uncertainty in the fishing industry. After questions today, I spoke about a miasma of doubt, suspicion and uncertainty which is bedevilling not only the deep water fleet in my constituency but the inshore men as well.

The Minister referred to banding. How wide will these coastal bands be? This is the $64,000 question which is worrying people both north of the Tweed, where we take well over 50 per cent. of our total catch—basically by the inshore men, because there are now only four deep sea vessels in Aberdeen—and south of the river. The uncertainty, doubt and suspicion are justified when one bears in mind the third party negotiations.

We are a maritime nation whose fleets have kept order all over the world in the past. Now we are having our future settled by a third party. It taxes the imagination and boggles the minds of many of my constituents to think that their future may be decided by Mr. Gundelach. The Danes may be eminently able and thoughtful people, they may be knowledgeable about Icelandic affairs, being so close to Iceland and administering the waters around Greenland, but it is difficult for people who are less sophisticated than hon. Members to accept that a Dane may decide the future of this country's industry.

No one should call fishermen who react in this way chauvinists. This is a new situation for them, and we must sympathise with men who are so baffled and bewildered that they talk about taking boats across to the Continent and blocking European fishing ports.

We must end the uncertainty which surrounds our fishing industry. The Minister used impeccable arguments about the protection and conservation of fish. No one objects to that, but it is sensible to ask who is entitled to catch the fish which are conserved. It is certainly not the Soviet Union, which can bring a 4,000-ton vessel off our North-East Coast and suck up hundreds of tons of fish. This will be the position until 1982 unless we change it.

The most important point made today was that no other aspect of EEC policy demands open access. No Belgian fisherman can farm in East Yorkshire just for the say-so. Open access to our waters puzzles many of my constituents. They think that that is just not on.

We all accept that the coastal State is in a special position. I suggest that Britain is in a unique position. The Chairman of the White Fish Authority, Charles Meek, is also of that opinion. The United Kingdom has at least 60 per cent. of the total wealth of fish in EEC waters round its shores. The United Kingdom is the biggest fishing State west of the Soviet Union. We must have recognition—it is not a monopoly—of our unique position. People in coastal villages throughout the islands of Scotland and elsewhere—this includes Ireland—have a 100 per cent. stake in catching fish and living on the proceeds.

The argument put to me, as a Member of Parliament representing a constituency with fishing interests, is that we must pay attention to Iceland because it is so dependent on its catch. But many parts of the United Kingdom have a harvest of the sea and a hinterland which is bare, whether glaciated or scoriaceous lava, such as in Iceland or Norway, and which provides no living. I do not accept the argument that Iceland deserves all this sympathy and our people do not.

No one has denied that we pay more attention than any other fishing nation to the conservation of stocks. In that sense we are disciplined. The Danes, for example, catch well over 100,000 tons of herring in the North Sea, and the Soviet Union catches well over 600,000 tons of fish in our waters each year. If one asks who is entitled to the lion's share, it is the United Kingdom. In that sense our fishermen must be looked upon as special. If Iceland can put forward that argument, so can we.

I come back to the question of coastal bands. In December we said that coastal bands were vital. The Fishing News, on 17th December, consequent upon what was said in this Chamber by the Secretary of State for Foreign Affairs, stated: As Common Market Foreign Ministers this week seemed to be failing to agree even temporary rules for operating inside the Community's 200 miles, Foreign Secretary Anthony Crosland threatened that Britain would impose her own system of control. This statement was also backed by Ireland's Foreign Minister, Dr. Garret Fitzgerald. Both Britain and Ireland rejected EEC proposals on fish catch quotas. These did nothing to take into account the special needs of fishing communities in Scotland and the north-east of England, said Mr. Crosland. Is that still the position? Is our position as it was in the third week in December still the same in the second week in the new year? This is an important matter, because upon all this hinges or depends an enforcement policy. It is useless to talk about banding and a 50-mile exclusive zone, quotas or licences, unless we can enforce them. To be fair, the Minister said that he would wish and intended to "make it stick." Can we do that? We have begun well with our 200-mile limit. The Fish Trader, formerly the Fish Trades Gazette, in its 8th January edition, carried the headline Britain shows its 200 mile muscle power. To be fair to the Government and to do justice to the Royal Navy, there is no doubt that the limit is being observed by fishing nations. I am not sure whether there have been any offences of poaching within that limit.

Enforcement is important, but we must have third country agreements. It is vital that we settle the Icelandic situation. Apparently they work so hard in the Icelandic Parliament that they are on holiday until the 24th of this month. Therefore, they will not even begin thinking or talking about the situation until after the 24th. We should do our best. I think that we may get agreement on 30,000 or 40,000 tons. Our people in Hull—this applies equally to the Grimsby and Fleetwood distant-water fleets—will require an agreement with Norway for at least 95,000 tons. We should get an agreement for 30,000 or 40,000 tons with the USSR in the White Sea. We should get a generous quota within Greenland's waters where the Icelanders have been fishing. The Icelanders must be told that, not being an EEC State, they must keep out. We should have a generous quota because Denmark, being a sister State in the EEC, administers those waters.

It is not impossible to get a long-term Community policy on fishing in the waters which I have mentioned. If our fishermen are not to be allowed to fish in those waters, it is hypocritical for Ministers to say that we are being fair to our fishermen.

If we take too long in achieving a Community policy on this matter, the patient—the fishing industry—could die. Unless we get something settled regarding distant water fishing within the next few weeks, the patient will slowly fade away. That is the terrible thought, miasma, suspicion, doubt and uncertainty which is plaguing the minds of people on Humberside.

6.49 p.m.

Sir Brandon Rhys Williams (Kensington)

I should like to join in the tributes paid by the hon. Member for Inverness (Mr. Johnston) to the two outgoing British members of the European Commission. Sir Christopher Soames in external relations and George Thompson in his achievements on regional policy made notable contributions to the work of the Community during their term of office. They have provided us with a foundation on which we have a duty to build for the future. I hope that we shall do so. I am sure too that hon. Members on both sides will wish to send messages of good will to our two former colleagues in this House who have gone out to take their places and are just starting their tour of duty.

There is so much in the White Paper that the Minister cannot be blamed for failing to touch on all the subjects it refers to, but I am sorry that he gave us nothing of the Government's thinking on economic and monetary co-operation, which indeed is only touched on in three paragraphs of the White Paper. But surely this is the most significant unresolved problem now facing the nine member States.

This afternoon we have heard economic and monetary union referred to as a sick joke. The failure of the Werner initiative certainly created difficulties for the Community which some people feel are almost insurmountable; but I believe that the seven months from May to November last year, which are the subject of the White Paper, may in retrospect be seen to have been the turning point on this important topic. The period included the dramatic change in the exchange rate of the pound in relation to the principal world currencies. It also saw the recommendations from the Dutch Finance Minister, Mr. Duisenberg, which were a ray of hope in this field and which must be taken extremely seriously, even though the Dutch tour of duty has now come to an end.

In the European Parliament I have the perhaps unenviable duty of acting as rapporteur on the subject of economic and monetary union. It has proved a rather unrewarding function since we joined the Community in 1973, but I hope that I may be known for my persistence and optimism, which I am trying to apply in this field as in others.

In order to clarify our minds on whether we want economic and monetary union, perhaps we should ask ourselves the simple question: Have we, as a great trading nation, anything to gain from economic and monetary disunion? It must be obvious that, if we could make some progress towards the harmony and order which existed in the great days of British economic expansion up to 1913, it would give the British people a great new opportunity. Nothing is to be gained from the uncertainty and dislocation of the currency markets that we have seen in recent months.

One of the reasons for the failure of initiatives in the direction of economic and monetary union is the preoccupation of central bankers with exchange rates. Of course, it is very disturbing for trade and day-to-day banking when there are sudden movements in exchange rates, for whatever reason; but if we are really concerned about bringing together the Western European economies we must not think only of exchange rate movements from day to day. We have to tackle a much wider and in some ways much more significant and difficult range of comparisons, including, for instance, interest rates. The fact that a German manufacturer can raise money in Frankfurt at perhaps one-third of the rate that a British manufacturer has to pay if he raises money in London for an equivalent project must create serious difficulties for British industry, quite apart from comparisons between the pound and the deutschemark in the markets from day to day.

We need to look also at the impact of taxation. Tax rates on companies and individuals engaged in industry and commerce have a tremendous influence. It is no good imagining that we shall be able to work fruitfully towards economic and monetary union while there is no progress at all on the harmonisation of tax rates.

Wage rates are important, too. We have recently read of the British Government saying, almost with satisfaction, it seems, that British wage rates are the lowest, or among the lowest, in the Community. I do not take any pride in that, but the fact that there are these sharp differences in wage costs between one Community country and another shows that economic monetary union has still a long way to go.

We have much to gain if we can increase the rate of activity in the parts of the Community which are not as active as they could be or should be; so perhaps I should add activity rates to the list of different rates on which we have to try to make progress in coming years.

The gamble which has failed, and had obviously failed by the end of last year, was the idea of monetary union by quiet agreement and backstairs pressure from national central banks. We have all read about the clandestine meetings of central bankers in Basle and the way they exchange secret confidences from day to day or even minute to minute through the telephone and Telex in order to make their beneficent influence felt in the money markets. But, as I have said, the central bankers are preoccupied with day-to-day movements in exchange rates, some of them, unfortunately, do not take a longer view of the whole economic prospect or the economic effects of the agreements which they reach behind closed doors.

In 1973, at the time of Britain's entry, agreement was reached on the setting up of a European Fund for Monetary Co-operation. I felt that this was a serious and useful initiative but it posed a threat to the national central banks—the threat of a gradual emergence of a Community central bank with powers which might in some respects be overriding. This was something on which the central bankers could unite. They did not like it. So no progress has been made on the setting up of the European fund in spite of the unanimous agreement of the Governments involved. It has no funds. It has no staff. As far as I know it has no premises, apart from a back room in the Bank for International Settlements in Basle, which, of course, is not even in the Community.

If the bankers are now ready to recognise that their attempts to achieve clandestine monetary union have failed, perhaps they might be humble enough to agree to some progress being made in the direction on which we began in 1973. I particularly commend to the Government and to the House a recommendation, which I hope also to be able to advocate in my capacity as rapporteur in the European Parliament, namely, that we should work towards a new European monetary constitution.

I do not want anything too alarming or too formal in the first instance, but there are two ways in which we could make useful progress. First, we could establish a set of workable rules and guidelines for member States and close trading partners outside the Community, such as Switzerland, Sweden, Norway and Austria, extending perhaps to the countries which are seeking accession and possibly even to countries in Eastern Europe and the Middle East. These workable rules might well be on lines similar to the guidelines for floating which have been worked out by experts in the International Monetary Fund. I welcome the idea of target zones for exchange rates provided that they do not impose unmanageable or unacceptable restraints on the development of national economies.

Second, we need to move towards the setting up of an institution with limited but real powers. Looking back to the success of the European Payments Union, we must recognise that it depended on the setting up of a central institution which worked more or less automatically but certainly to the benefit of all concerned for a number of years. It did not dictate to Governments. It simply operated a clearing house in a way which had been agreed beforehand and which member States of the union could take into account in their predictions and calculations.

I believe that the European Fund for Monetary Co-operation could do much the same. Of course the circumstances are different and in many ways more difficult, but the need for co-operation is as great as it was, or greater. I hope we shall find that where there is a will there is a way. It is disappointing that the British Government seem to be resting on the basis that the Werner proposals have been abandoned and that it would not be worth while restarting such an initiative.

There have indeed been great changes since the late 1960s which gave rise to the Werner plan. At that time Bretton Woods was still in existence, and the gold exchange standard did not appear likely to be shaken in the foreseeable future. We had no inkling of the coming Nixon shock; the American economy seemed to be setting a responsible or relatively acceptable guideline for all the other Western economies and progress to economic and monetary union was not inconceivable on the lines proposed by Mr. Werner.

I have had the benefit of long discussions with Mr. Werner in recent weeks. He himself now recognises that circumstances have changed so much that to try to revive anything on the lines of his report would be futile and unlikely to achieve any success. But there is room for new approaches to economic and monetary union. The Duisenberg recommendations to the Council of Ministers seem an admirable point of departure.

At the beginning of this year the British have a particular responsibility in this field in the Community. We can look back with satisfaction to the part played by Britain in the setting up of the International Monetary Fund at the end of the war. On a world scale, Lord Keynes and the British delegation were able by their thinking and their knowledge of the world economic picture to make the fundamental recommendations which led to the setting up of the IMF as a thoroughly useful and lasting world organisation.

Although London has had its vicissitudes as a financial centre since then, we still have a tremendous corpus of experts in the Bank of England, the Treasury and the City who can make a conclusive contribution to fresh thinking on the way in which the European Community countries and their closest trading allies could set up a civilised framework for handling their economic and monetary affairs, from day to day, from month to month and from year to year. I hope that the opportunity will not be lost, while we have a new British President of the Commission and British Chairmen of the Councils of Ministers dealing with financial and monetary matters, of reviving and redirecting the concept of the approach to economic and monetary co-operation.

This country has so much to gain from the establishment of an orderly European monetary constitution that the opportunity must not be lost. I trust that the Chancellor, when he acts as President of the Council, and Mr. Jenkins, in his continuing responsibilities as head of the new Commission, will realise what responsibilities they have and what opportunities lie ahead—and that they will rise to them.

7.4 p.m.

Mr. Nigel Spearing (Newham, South)

I shall refer in a few minutes to what the hon. Member for Kensington (Sir B. Rhys Williams) has said about economic and monetary union. I think he will agree that there is a difference of substance and not just of degree between an inter- national organisation like the IMF and a movement towards an economic and monetary union within the EEC.

The hon. Member for Inverness (Mr. Johnston) talked about the Labour Party spurning democracy in respect of direct elections to the EEC. He and his party should pay greater attention to the essence of democracy, apart from the vote. Democracy is not just the ability to vote for someone. Its quality depends greatly on the relationship between an Executive and its citizens. Relations between them, in terms of accountability, information and control, are as much a matter of democracy as voting is.

The point that the hon. Gentleman forgets is that with direct elections to a European Assembly, whatever its powers now or in future, there is a great risk of a European Executive emerging. Many of us would not think that that was necessarily a very democratic move, in the best sense of that word.

There is, therefore, a great distinction between the British Executive, Her Majesty's Government, which this House supports or not and which it creates or destroys at its will, and an Executive which is accountable to a European Assembly, or Parliament as they call it, which is itself accountable to the people of this country, irrespective of what may happen in this House and what Her Majesty's Government may say or do.

I agree with the hon. Gentleman that there is a feeling that many things cannot be dealt with nationally but require international co-operation. He claimed that the EEC was an effective vehicle for such an international approach. He instanced some of the work being done in that respect by my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott).

However, the EEC is not an effective vehicle for that sort of procedure, as has already been demonstrated. For instance, its internal constitution relies, to use the hon. Member's own phrase, on a "supranational" Commission for its motor power. The hon. Gentleman complained that in the last few months of the reign of the last Commission, before "King" Jenkins takes over, it did not initiate enough and was becoming a mere handmaiden of the Council of Ministers, working out the details of what the Council had agreed.

The hon. Gentleman deplored that trend, but I would think that it was a wholly worthwhile activity and that the more the Commission engaged in it the more it would be a truly international organisation rather than a supranational one, with which many of us disagree but for which the hon. Member for Inverness and nearly every other Opposition hon. Member voted at the time of the referendum.

At that time, there was a financial imbalance between the two sides of the argument of about 12 to one. The hon. Member for Banbury (Mr. Marten) led the campaign against our membership, and I think he did very well. We do not want to go over old ground, but it is important to note that when the hon. Member for Banbury asked the right hon. Member for Knutsford (Mr. Davies) whether the Conservative Party would provide funds for possible direct elections from its own resources and not get State funds, either in this country or in the EEC, his right hon. Friend did not give a specific answer. He merely said that the funds would be found.

It certainly does not look as if those funds will come from Houghton money in this country, but I hope that at some future date both the Conservative Party and the Liberal Party will make it clear that such money will not come from sources within the EEC but outside this country. I hope that at some stage the parties which want direct elections will make that clear.

I found the approach of the right hon. Member for Knutsford disappointing. He deplored the fact that the EEC had said nothing about Rhodesia and the problem that faces us there. It is, of course, an international matter for which the United Nations is the right forum. I have no doubt that the EEC supports us in the United Nations on these matters—I certainly hope that France does. This is not a question with which the EEC should tamper.

The right hon. Gentleman is thinking of the EEC as an authoritative body that overrides individual national sovereignty in a way that many of us do not accept. We are all for co-operation, but we do not wish to see the uniformity of foreign policy that the right hon. Gentleman would wish to see because that would give rise to the fear of a nation super-State which is so often denied on the one hand and which on the other hand the European Movement wishes on us.

I shall not comment on fishery matters except to remark on the attitude of the right hon. Gentleman. He attempted to justify his support of the fisheries policy at the time of the original negotiation by the Government of which he was a member by saying that at the time it looked all right and that it was the other aspects that came afterwards that made it difficult. Perhaps he does not realise what he is saying. If he believes that, he is saying that what may be agreed within the EEC as perfectly reasonable one year may within the space of three years become almost intolerable through change of circumstance about which we can do little.

That is typical of the nature of the EEC. If, after entering into an agreement of that sort, outside world circumstances change, we find ourselves in a virtually intolerable position, as happened with fisheries. That happened because of the nature of the EEC. Perhaps our Foreign Office did not notice when it made the agreement. Perhaps it could not see ahead to the Law of the Sea Conference out of which arose the 200-mile limit complication. By pooling our sovereignty in the greatest pool of sovereignty—the seas around our coast—if outside circumstances change we find ourselves in this intolerable position. If that can happen with fisheries, it can happen with other matters on which we think we are all right but later find that we are not. Many of us foresaw these difficulties arising. We were not against the EEC because we were not internationalists or because we were not idealists. We were against the EEC because we foresaw some of these problems.

The hon. Member for Kensington hitched his wagon to the economic and monetary union star. He said that we were not getting there very fast. I gathered from his tone of voice that he thought it a pity we were not getting there more quickly. Some of us were against economic and monetary union—and we still are—because it assumes so much about the welfare of mankind. It assumes that the bigger the market area, the greater the uniformity of terms for the borrowing of capital—a point the hon. Gentleman very properly made. It assumes that the more uniform the conditions, the greater the heartbeat of economic activity and, therefore, the better for all the people within that particular economic unit.

That is the theory behind economic and monetary union, but things do not always happen like that. By speeding up the economic metabolism so that there is free competition and free movement of labour, capital and goods, economnc and social changes come quickly, and the part of the economy that operates at greater efficiency begins to knock out the parts that are less efficient. That is the essence of the system, and that is why what my hon. Friend the Member for Southampton, Test (Mr. Gould) said about our £2,000 million annual deficit with the EEC is so important.

I hope and pray that the industrial imbalance is a passing phase, but I fear that it is not. Given the present economic arrangements, if a product can be produced more efficiently and at less cost in Germany or France those countries have every right to export it here. That is the pass into which the Conservatives voted us. From next summer we shall not even be able to determine our own anti-dumping legislation.

To follow the logic of the argument of the hon. Member for Kensington in advocating economic and monetary union, if British industry cannot compete, British industry will begin to disappear, as it is already disappearing. At the end of last week Sir Frank Catherwood said that with great investment in British industry we should do as well in industry in the Common Market as we do in agriculture. He was referring to the efficiency of British agriculture in comparison with that of other members of the EEC. I should like to think he was right, but I see no evidence of it. All the evidence I see is the other way. The nature of the EEC is such that we shall have to import more and more manufactured goods from the EEC—from Germany in particular—and we shall be in a continually decreasing competitive position.

I agree that there are other reasons which make us more susceptible to that, apart from going into the EEC. I do not understand why the Foreign Secretary, writing in Socialist Commentary, says that his guess is that the arguments for and against going into the EEC are now economically neutral. I hope that the Minister in replying to the debate will say whether that is also the Government's view. If so, they must justify—as the hon. Member for Inverness said he could, although he did not—the other reasons for this sudden change in the economic balance of trade with our co-called partners. I say "so-called partners" because I wish to see partnership between nations, but the EEC method of partnership is not partnership. It says "If you are economically weak, stand there. We shall bash you between the eyes and give you a bloody nose and a black eye. With the regional fund we shall help you up, and then we shall knock you down again".

Sir B. Rhys Williams

Perhaps I should have made clear that in my concept of economic and monetary union we cannot hurry at once to the adoption of a single currency. What we have to do is operate a multi-currency system in a civilised way. That would be possible and, I hope, fruitful. Will the hon. Gentleman consider the comparison between the standard of living of the people of North America—which is, broadly speaking, an economic and monetary union—and South America, which is balkanised and broken up, with autonomous Governments each pursuing its own way of inflation and despair?

Mr. Spearing

I am glad that the hon. Gentleman has explained his position. He has vividly illustrated two schools of thought. Many people believe that the economic rate of exploitation of the earth's resources and the economic systems of man depend largely on mechanistic economic structures.

There are many other reasons for the prosperity of North America compared with South America. It is not merely a matter of a customs union, one currency, one banking system, one system of credit and perhaps one language. There are many other reasons, of which historical, social and human factors are perhaps more important than economic reasons. Surely it is a good example of the way in which certain economic theories have overridden many other things that are so important in social life and in politics.

My right hon. Friend the Minister of State talked about the understanding of the British people. He did not like the way in which my hon. Friends and I laughed when, towards the end of his speech, he said that the British public are now just about understanding what the EEC is about. He said something of that sort and we laughed. My right hon. Friend took exception to that. He says that it is a complex and technical matter and that the British people are just beginning to understand it.

Certainly it is complex and technical. The reason why many of these debates are not particularly well attended is that very often, in dealing with documents like that with which we shall be presented within an hour or so, it is necessary to go into them deeply, examining the technicalities in detail, or not at all. They can be dealt with in a detailed manner or in great generality. It is one of the great difficulties in dealing with the EEC. We deal with EEC documents either with a broad brush or in technical detail.

I am sorry that my right hon. Friend does not do more about promoting understanding. In the past two or three months I have been asking him about the access that the British public have to EEC documents. It is difficult enough for Members. We know that complaints have been made in debate after debate on EEC matters. I have been asking my right hon. Friend whether the British public have the sort of access to documents that Members have through the yellow parliamentary slips. It is clear from his replies and from his letter sent to me today that they have not. We now have ministerial help in saying that citizens of this country and organisations which have a proper economic interest—for example, employers' associations, manufacturing associations, trade unions, trade councils and chambers of commerce—do not have the access or ease of indexing EEC documents that is available to Members.

I asked my right hon. Friend why the yellow EEC slips that are available to Members are not available on a wider basis. He replied that the yellow slip lists all EEC documents whether received from the Government or any other source (e.g. the European Parliament whose papers are received direct). It is obviously not suitable for wider publication in its present form. Why not? Surely an admirable way of proceeding would be through the London Gazette, by supplement to the London Gazette or in some other form, letting any interested party know that an EEC proposal, regulation, report, document or minute is in existence. I am not asking for them to be reprinted, but surely the public should know that they are in existence. I believe that the legal term is "on guard". Unless such a document exists and is properly published at regular intervals, there is no other way that anyone other than a Member may know what is happening.

My right hon. Friend then wrote: so the real questions seem to be:

  1. (a) should a similar sort of index of EEC documents available to the public be published?
  2. (b) are there adequate arrangements for the public to have access to the documents listed on the House of Commons form?"
My right hon. Friend suggests that in his view there are more or less adequate arrangements for the public to have access to the documents, although that is qualified. He writes: The second question is the more important, so I will concentrate on that. Although he asks the question Should a similar sort of index of EEC documents available to the public be published? he never answers it.

I hope that in replying tonight my hon. Friend the Under-Secretary of State will give some indication. I hope he will return to this subject at some other time. Her Majesty's Government should make it plain that a similar sort of index of EEC documents should be available to the public if the parliamentary yellow sheet is not to be available.

My hon. Friend knows that the Government are devoted to open government. My right hon. Friend said that he wants the British public to understand what the EEC is about. If that is so, let us at least know what documents are in existence. For four years now the country has not known of the documents that have been coming from Brussels. As I understand it, no list has been published. My right hon. Friend has said that he will not publish a list from now on. That is not good enough. That is the type of reply that we have had from Tory Governments in the past. It is not the reply that we expect from a Labour Government. It is something that reflects badly on the attitude of the Executive as well as badly on the EEC itself.

7.25 p.m.

Mr. Michael Marshall (Arundel)

One of the problems of those who have sat through the debate, as the hon. Member for Inverness (Mr. Johnston) said, is the déjà vu nature of many of the contributions, as typified by what we have heard from the hon. Member for Newham, South (Mr. Spearing). A number of the arguments that he is using are based on the "I told you so" theme. Perhaps some of the pro-Marketeers whose arguments are based on the fact that they are tending to be dissatisfied with progress and the inability to use the machinery effectively, find themselves slightly uneasy bed-fellows when joining in some of the criticisms advanced by the hon. Member for Newham, South.

It is important that we consider these matters in perspective. I am rather unhappy when I hear speeches such as the one made by the hon. Member for Southampton, Test (Mr. Gould). In a powerful speech he put forward what I consider to be a thoroughly slanted case. The point that he touched on so much, namely, the loss of jobs arising from the trade imbalance, would have been considered in a much more sensible light had he spoken about the money that Britain is now able to draw from loans within the Common Market.

As is said in paragraph 64, in terms of loans from the European Investment Bank and ECSC loans, the steel industry alone received £300 million in 1976. That is the sum that the British Steel Corporation received. Let us consider that sort of funding, much of it directed towards retraining, housing schemes and many of the implications of problems that have arisen from the closure review and redundancies within the BSC. If that had been brought into the argument, we should have had a more balanced debate.

As matters stand we are prone to hear, from a number of Labour Members the arguments that we always hear from them, except that they are being brought up to date. There are blemishes, which they are undoubtedly right to draw to our attention, but I plead for some balance. That is why I support my right hon. Friend the Member for Knutsford (Mr. Davies). I believe that my right hon. Friend gave a thoroughly constructive view of the way in which the Government should tackle matters in future. Even my hon. Friend the Member for Banbury (Mr. Marten), whose views I do not entirely share, showed some restraint in that he did not go so far as to argue in favour of coming out of the Market. He seemed to be addressing his mind to the problems.

I am glad to see that the hon. Member for Inverness is in his place. I largely support the thesis that he was putting forward, namely, that we are in the Common Market and that we must try to find a common way of tackling the problems. That brings me to the argument that I wish to advance, which I hope is constructive. I seek to urge on the Government various ways in which they should use the industrial side of the Common Market more effectively. In a brief speech I shall single out three main areas where I think the Government have not gone as far as they should.

I know that the Under-Secretary of State takes a keen interest in industrial matters. I hope that he will address his mind to these considerations. If he cannot answer now, perhaps he will undertake to reply at a later date.

The first aspect that I stress is that there seems at present to be a grey area in respect of the way in which legislation, especially as it affects industry, is coming before the European Parliament and, in effect, before the House. I refer to the rôle of the consultative committees. My right hon. Friend the Member for Knutsford referred earlier to the work of the Economic and Social Committee. I join with him in saluting the work of Basil de Ferranti and others on that widely based body. It consists of people from trade unions such as David Basnett and Jack Jones, as well as people from the Consumers Association. It is a body which has weight, yet I believe that the work it does and the way in which it affects legislation is not well known in the House. That is what I understand from my friends in industry. Surely its work should be more widely known.

It is the Government who appoint people to the committee, as they appoint people to the Coal and Steel Consultative Committee. I should like to know the Government's thinking about the work of the consultative committees and the way in which they approach the question of replacements, strengthening committees, and so on. In passing, I pay tribute to those hon. Members who consider EEC legislation, because it is all part and parcel of the same package, but I single out these committees, because by the time that we in the House hear about matters the die is cast and it is too late. Therefore, the pre-screening activities are important and we should hear more about them.

Secondly, I should like a clear indicafrom the Government of the overall policies they are evolving on such matters as loans. I mentioned earlier the work which the European Investment Bank and the ECSC had done in providing over £300 million for the BSC. A good part of that money originally was borrowed without coverage on exchange risk, and I understand that funds currently drawn are covered by the Treasury for exchange risk. However, this highlights our difficulty arising from the fact that Government thinking has never been clear.

Those of us who have worked in Committee on Bills proposing increased borrowing powers for the BSC are only too well aware that it is impossible to get an answer from the Government on whether they have a policy on these matters. If we are to go on borrowing substantial sums of money from the European Coal and Steel Community, it is important that we understand whether we are allowing slippage into our own national books to the extent that we have to cover for exchange risk. That is one aspect with which I hope the Minister will deal.

The third and final point about industry and the way to make the EEC a more effective industrial co-operative concerns the need for co-ordination in Government thinking to bring together the various streams of thought which are crucial to industry. I have in mind the work on anti-dumping which is going on in the Department of Trade. The Minister will know of the work being done on the question, in particular, of special steels. Earlier today I raised the matter during questions on the statement on EEC business.

There seems a hiatus which the Government must consider carefully. As we move from a period in which we have been responsible for our own anti-dumping applications to harmonisation of these matters, it is crucial that we do not lose the advantage that we have gained. There must be close co-ordination among the related Departments. The Department of Industry has a clear rôle here.

Paragraph 57 of the White Paper shows that one of the most important matters which the Commission has considered is the proposals designed to alleviate the effects of future recessions in the steel industry". The work which is going on in this area is crucial and must be considered in relation to such matters as anti-dumping. This is a facet which the hon. Member for Test would have done well to consider in dealing with the problem of redundancies. If we can achieve a concerted approach to the problem, substantial advantages are to be gained for Western industrial countries such as our own.

The three streams in which co-ordination is important are trade, the Department of Industry and loans. The Government's attitude and the thinking of the Department of Industry are crucial to our industrial drawing down, so to speak, from the EEC. Those are the areas of worry. There are many others, but I intend to be brief. I want to get a feeling from the Government that they are making an attempt to bring the various interests together. Many of us feel that there is no clear-cut co-ordination. The fact that we missed the energy bus so badly does not auger well for those of us who take a particular interest in industrial matters.

I hope that the Under-Secretary of State, with his industrial background, who has come relatively recently to his new responsibilities, will show that he is taking a keen interest in these matters. I look forward to what he has to say. I hope that my hon. Friend the Member for Derbyshire, West (Mr. Scott-Hopkins), with his experience of the European Parliament, will add weight, as I am sure he will, to the arguments on matters which worry people in industry who feel that we are by no means utilising the positive benefits open to us through membership of the EEC.

7.36 p.m.

Dr. Alan Glyn (Windsor and Maidenhead)

As the last Back-Bench speaker, I should like to add my congratulations to the two Commissioners and to say a word about our fellow Members of Parliament who have worked very hard in Europe and, at the same time, have been called upon to perform their duties in the House and in their constituencies. A word of tribute to them is well deserved.

I congratulate the Government on the White Paper. It is brief and sets out most of the things that we want to know. I was interested to note that the first paragraph made it clear that it covered not only the EEC but the European Coal and Steel Community and the European Atomic Energy Community. Is it not time that we gave careful consideration to what extent, if any, of these independent organisations could be streamlined into the one organisation? I appreciate that with an organisation such as the Western European Union or NATO that is impossible because the member States are not identical, but there is a case for a certain degree of harmonisation between these international organisations. At present there is an overlapping of work and of cost of administration.

Paragraph 39 of the White Paper deals with animal health. Most of us continually receive complaints in our constituencies about the transit of animals at home and overseas. I believe that the reason for the complaints is the lack of supervision on this side and on the other side of the Channel. If the supervision could be improved, the causes of many of the complaints would be removed. I am prejudiced because I am against the export of any livestock on the hoof except for the purposes of breeding, racing or for other prescribed purposes.

My hon. Friend the Member for Kensington (Sir B. Rhys Williams) went into great detail about the possibility of monetary union. There is a large pool of resources in the Community and I hope that in the long run it will be of benefit to the pound. Plainly it is in the interests of most of our partners to ensure that we do not allow our currency to deterioriate too much.

Paragraph 67 of the White Paper refers to transport. This is a thorny problem and I am glad that the Government have been able to achieve a deferment on the question of drivers' hours and conditions of work. However, the Council of Ministers will have to consider carefully the rules and regulations as they apply to this country, because our traditions are not the same as those of other European countries. There is a great deal of work to be done in ensuring that the directives are practical for the roads of this country.

On the question of social affairs, reciprocal arrangements for medical treatment between ourselves and our partners in Europe are an excellent principle. I have been considering this question recently. There are difficulties involving responsibility for treatment under the National Health Service and the problems arising from the fact that other countries in Europe do not have the same rules and regulations. For example, in West Germany there is no free treatment for the self-employed. There is here a great area in which we shall have to thrash out some form of common policy. In particular, it will be difficult to create equality of payment in the reciprocal arrangements. I have always pressed for reciprocity in health treatment, but I know that it will take a great deal of work to formulate the details.

All of us want to see some pushing forward of a European energy policy, so long as the situation never arises in which this country's interests could be jeopardised by actions in other countries. However, I foresee the day when, with our North Sea oil fully developed, we shall be more donors than recipients.

I feel strongly on the subject of direct elections to the European Parliament. It is important that the European Parliament should not be completely cut off from our Parliament here. I do not know that it would not be better for Members of the European Parliament to be able to have a voice either in this House or in another place, perhaps with limited voting rights as well as speaking rights. I do not want to see the European Parliament completely divorced from this Parliament, because the result of that could be that we became a subservient and secondary form of legislative chamber.

A great deal of work has to be done now before the direct election system can reach the statute book. There are many possibilities. For example, perhaps members of the European Parliament could be titular members of the other place and allowed to speak in this Chamber also. All these matters could affect us here very considerably. More important, they could affect the powers of this, our own Parliament. We shall have to examine this situation very carefully and ensure that when the final draft is put forward we have some compromise whereby the link between Europe and this Parliament is not severed and—far more important—our responsibility here is not severed.

We all want to see the powers of the Commission reduced and the powers of members of the European Parliament increased. That means that we must have a powerful European Parliament. I have consistently advocated membership of the Common Market and a European Parliament.

Let us make sure that we continue to play our part in Europe, as I am sure we have done already, at the same time ensuring that we do not allow this Parliament to become divorced from Europe under two sets of rules and two sets of standards. Let us try a typical British compromise in order to ensure that, in the links between this Parliament and the European Parliament, we here are not subservient to a European Parliament.

7.44 p.m.

Mr. Ronald Bell (Beaconsfield)

I share the anxiety of my hon. Friend the Member for Windsor and Maidenhead (Dr. Glyn) that this Parliament should not become subsidiary to the European Parliament. But perhaps that is a matter that we may debate more fully if we ever reach the issue of direct elections to the European Parliament. I appreciate that my hon. Friend is in no way out of place in referring to the matter today, but we shall have a lot of time, when and if we come to the legislation, to deal with the subject.

I shall be brief, as becomes one who has not been present during most of the debate. But in a way that leads in exactly to what I want to say. I had assumed, wrongly, that this debate would run right up to 10 o'clock. Whilst I regretted that I should miss the early part of the debate, I thought that I should be here for most of it. But that is not so. Both sides of the Chamber are virtually empty. Nor is that unique. It happens over and over again when we debate these European matters, and it is all very relevant to the arguments that have been exchanged today.

The Select Committee on European Secondary Legislation, of which I am a member, examines and reports on about 800 of these instruments every year. The procedure is not perhaps useless, but it is certainly nugatory in result. This debate has not attracted any considerable attendance in the Chamber. When we report that an instrument requires X debate in the House, eventually it is put on for debate—unfortunately, in the middle of the night as a rule. But whether it be in the middle of the night or in the middle that is to say, nothing.

of the day, the result is much the same;

We act here rather like the Public Accounts Committee does in relation to financial matters: we are looking at things restrospectively. One of my reasons for opposing entry into the EEC was that I could not envisage any way in which we could have effective parliamentary control over what the EEC did. My hon. Friend the Member for Windsor and Maidenhead is worried about the possible future predominance of the European Assembly, and it is a proper worry. But I do not see any sign of such predominance at the moment.

The European Assembly is a useless body. Indeed—and I say this with all respect to my hon. Friend, who is a member of it—it is worse than useless. The whole purpose of a Parliament is to find out what the Executive intends to do and to stop it. The European Assembly, having found out how much the Commission or the Council of Ministers proposes should be spent, sets about increasing it. As far as I know, the only effect that it has exercised upon the Community budget in the last two years has been to propose increases in expenditure, not reductions. What is the good of a brake that acts as an accelerator?

A constant complaint that we have voiced as a Select Committee—I am sure that my right hon. Friend the Member for Knutsford (Mr. Davies) will have mentioned it—is about the absurd proliferation of detail in the legislation that comes from Brussels. That proliferation of detail continues quite unchecked by anyone. I do not know whether the changes mentioned in the White Paper, which may fructify in the new Commission and the new presidency of the Council of Ministers, will have the dampening effect which Ministers usually promise us when they give evidence. I do not think that we have heard a Minister giving evidence before the Select Committee who has not agreed with us about the fussiness of Community legislation. But we have been in the Community for three years now and I notice no decline in the fussiness or in the volume of legislation from the Community and no increase in our control over it.

We visited some of the other member-States of the Community to see how they control what the Community does. We found that the only country which exercise any parliamentary control over the activities of the Community is Denmark. Denmark is able to act in that way because it has had a minority Government. Parliament says to the Danish Government "Either you do what we say, or we shall not support you". That systems appears to work—to such an extent that even the Danish Minister in Brussels has to telephone in the middle of the night to the chairman of a parliamentary committee to obtain an extension of his ministerial remit. That is the only country in which there is parliamentary control over what happens in Brussels.

Mr. Russell Johnston

Is it not more accurate to say that the scrutiny committee in Denmark exercises control because that Parliament is elected proportionally rather than that these things happen because of the current accident of a minority Government?

Mr. Bell

I would not grudge the hon. Gentleman his commercial. However, it has not much relevance. The only relevance I can see is that when one employs a system of proportional representation, one has the election of minority Governments and one has to cope with the kind of deal that is found in Denmark. However, that is an almost accidental effect. Indeed, if the Labour Government in the United Kingdom loses any more by-elections, we may find a similar situation occurring here. We, too, may face the prospect of a Minister having to telephone from Brussels to obtain instructions from the British Parliament.

I apologise for coming in at this stage of the debate, but I had no idea that it was so near its conclusion. I may have started some new thoughts, but I wanted to emphasise the dominant theme, namely, that we have no effective control whatever in these matters. We discuss these matters with Ministers in this country, but when they go away to Brussels we lose sight of the objective. We are given assurances that drafts will come before us but again that process is not satisfactory.

We as Members of Parliament intervene at a particular point in the consideration of these matters and we express a point of view in the House, but the House has no machinery for adopting our point of view. Therefore, we have these debates, the House moves on to the next business, and things go on just as before. The fears that we expressed before we joined the Community have come to pass.

Unless my hon. Friend the Member for Derbyshire, West (Mr. Scott-Hopkins) is able to reassure me otherwise, I must still maintain that the British Parliament has no effective control over what happens in these EEC matters. I hope that my hon. Friend will not try to argue that all these matters can be handled in Strasbourg or Luxembourg, because I assure him that that will not happen for a very long time. In the meantime a whole corpus of law and regulations is being built up in Britain with no parliamentary control whatever.

7.53 p.m.

Mr. James Scott-Hopkins (Derbyshire, West)

It is normally one's happy task at the conclusion of a debate to express the view that the debate has been worth while and has truly justified the giving of Government time. I cannot say that about this debate. It has been one of the worst debates I have ever had the misfortune to sit through. There have been excellent individual speeches from both sides of the House, and I do not detract from their merit, but there has been little in the way of theme and no coherence of thought by the Government.

It was not a good idea to have this debate on the day the House returned from the Chistmas Recess. I appreciate, as was emphasised by my hon. and learned Friend the Member for Beaconsfield (Mr. Bell), that the EEC is not an exciting subject. I hoped to see a great deal more in the way of attendance at this debate considering that we had a whole day's debate before us. These are matters which hon. Members are always crying out to debate. They instance the iniquities of the EEC and advance individual issues that they wish to deal with, and then when the occasion arises we see the present sparse attendance.

It is the Government's fault. We all know that 30 British Members of Parliament are now in Luxembourg, and many of them would otherwise have taken part in this debate. They are torn between their duties at the European Parliament and the possibility of being present for this debate. I hope that the Government will not repeat this process, although they constantly do so. It is not a new thing that Her Majesty's Government have chosen to debate EEC matters at a time when the European Parliament is sitting, and it is most inconvenient for hon. Members who have duties in both Parliaments.

I wish to mention the main issue mentioned by the Minister of State when opening the debate—namely, the situation in regard to fishing in Community waters. Reference has been made to this matter by hon. Members on both sides of the House. I should like the Minister to give the House his own timetable for the conclusion of negotiations within the European pool as well as outside it. An error was made by the hon. Member for Kingston upon Hull, West (Mr. Johnson) in talking about foreign trawlers fishing within Community waters as from 1st January. I understand that most third country fishermen—this certainly applies to the East Germans and Poles—were excluded as from that date and that the operations of Russian trawlers within the 200-mile limit have also been reduced until the end of January. I gather that if the negotiations are not successful with the European Commission those fishermen eventually will be excluded from those waters. We surely must get clear exactly who is allowed to fish within the Community pool.

I know that many fishermen in the United Kingdom are disturbed about the fact that fishermen from Community countries will be able to fish without discrimination within the United Kingdom's 200-mile band and will be able to use the same catch quotas as operated over the last years. If that is the case, the situation is most unsatisfactory.

The Minister said that his first objective was to conserve fish, and nobody will quarrel with that aim. However, there is a second equally important objective—that is, to preserve as large a part of our fishing fleet as is reasonable so as to give a good level of income to the men who are engaged in fishing, whether they be inshore or deep-sea fishermen. Within the bounds of equity, we must ensure that our fishermen enjoy the best possible standard of living in undertaking their difficult and arduous task.

The hon. Member for Kingston upon Hull, West mentioned the difficulties of supervision and enforcement of the eventual band. I understood the Minister to say that he intended to go for a 50-mile band, but whether he will succeed in that aim is arguable. One cannot properly supervise or enforce a pure quota system no matter how hard one tries, even if one operates with a large number of ships that are able to stop trawlers and examine catches.

Even if we had a mass of ships that were able to stop and examine various trawlers and freezer trawlers, I do not believe that we could do it properly with a quota system. We must introduce a licensing system for boats, skippers and the gear that the trawlermen use, as well as licensing of the areas and the time within which the foreign fishermen are allowed to go into those areas. That is what has to be done if one is to have an efficient agreement that will work to any effect.

This is not the time to go into the details of the problems that exist with respect to industrial fishing and herring fishing. I would stress that it is essential for our industry that we should have a reciprocal arrangement with Norway and with our Danish friends.

One wishes Mr. Gundelach the best of good fortune in his new post and in the negotiations that he will be conducting on our behalf with Iceland. I hope that he can get some trawlers back into Icelandic waters as well as get a catch of a reasonable size permitted and agreed between Iceland, the Community and ourselves.

My right hon. Friend the Member for Knutsford (Mr. Davies) mentioned the importance of political co-operation between the Community countries. There is no doubt that the past six months have seen an improvement in this regard, although a much smaller and slower one than was hoped for. Quite clearly, one of the reasons why things have gone slowly has been the attitude of the Government. They have been represented at the European summit meetings as well as the Council of the Foreign Ministers and all the other Councils. Particularly with regard to the Foreign Ministers, I do not believe that sufficient progress has been made which should have been made if the Government and Labour Members had been prepared to put more will and determination into getting the Communities to work together in the political sphere. There is a huge mess of important issues that I shall not go over now because time does not allow.

My right hon. Friend the Member for Knutsford was quite right in asking that the Community should indeed take a stand concerning Rhodesia. One hopes that it will take a stand. I do not agree with the hon. Member for Newham, South (Mr. Spearing). It is something which should be done by the Community. A Community view would give greater strength to the negotiations that we are trying to carry out with the parties concerned in the Rhodesian problem. That is exactly what we asked for, and what happened with regard to the dispute over Cyprus and the issue of Greece and Turkey.

I ask the Minister to say something further about the negotiations with the Greek Ministers for the entry of Greece into the Community. Are they advancing at all? What timetable does the Minister have in mind?

Presumably during the six months when the Foreign Secretary will have the chair- manship of the Council, he will be taking the initiative to get the negotiations going or to keep them going perhaps even at an accelerated rate. But the House should be given an idea of what is in the Minister's mind.

While talking about Greece, one must also mention that there is a great danger that with the various agreements and association agreements we have made and are making in the Mediterranean, our other associate member there—Turkey—is feeling hard done by. I hope that during the chairmanship of the Council in the next six months the Foreign Secretary will take especial pains to see that our Turkish friends do not feel that they are receiving, as they have been, a bad deal compared with that being given to their neighbours. It is an extremely sensitive area and I do not want to enter into the internal policies now. This is a great task to which I believe that the Foreign Secretary should turn his mind. If he succeeds—there is no reason why he should not—it would benefit not only this country but also the whole of the Community.

I was interested in the extremely destructive speech made by the hon. Member for Southampton, Test (Mr. Gould). There was not a word in it of any constructive value. I never thought there would be. Nor was there in the speeches of my hon. Friend the Member for Banbury (Mr. Marten) and the hon. Member for Newham, South. I have heard it all before. [Interruption.] I am not disputing that the hon. Member for Newham, South has a right to say what he did.

Mr. Spearing

I hope that I concluded on a constructive note when I asked my right hon. Friend to publish the full documentation of the EEC so that the British people should know. I would have hoped that the hon. Gentleman would join me at least in that matter.

Mr. Scott-Hopkins

I would certainly withdraw my comment that there was nothing constructive, but what is constructive in asking for publication of documents that most people interested in them already have and are able to get hold of?

Mr. Marten

I hope that my hon. Friend will exonerate me. I made a very constructive speech. But I had to preface it with quotations from those who know far better than myself about these things. I had to lay the foundation for why the Community was disintegrating and why we ought to look ahead to see where the future of the Community was going. That was my constructive point, but perhaps my hon. Friend was out of the Chamber at the time.

Mr. Scott-Hopkins

I was not out of the Chamber at the time.

Mr. Gould


Mr. Scott-Hopkins

Two hon. Gentlemen have already intervened. When I have answered them I shall be delighted to give way to the hon. Gentleman. I listened to what my hon. Friend said. It had a certain kind of déjà vu which was mentioned by the hon. Member for Inverness (Mr. Johnston). I am not sure what was constructive in my hon. Friend's speech, but I shall read it with interest tomorrow morning and we shall undoubtedly compare notes tomorrow afternoon when I have had time to digest it.

Mr. Deputy Speaker (Sir Myer Galpern)

It is unfair that hon. Gentlemen should try to assess the value of their contributions to the debate. We should leave that to posterity.

Mr. Gould

I am reluctant to intervene in that case, Mr. Deputy Speaker, but I do not wish that silence should be held to imply acceptance of guilt. In fact, I pressed members of the Government to protect our own national interests with much more vigour than they have done. I believe that that is a constructive suggestion.

Mr. Scott-Hopkins

We are rapidly becoming involved in semantics. I very much doubt whether one could say it was constructive to press the Government to do something which they ought to be doing anyway. What was interesting was that the hon. Gentleman blamed the Community for our balance of payments deficit and said that it was the fault of the Community that we as a country were doing so badly both industrially and agriculturally. The hon. Gentleman ignored all the help that we have got from the EEC in the form of loans, as mentioned by my hon. Friend the Mem- ber for Arundel (Mr. Marshall), such as the £375 million loan from the Coal and Steel Community in the past six months. All that was ignored.

The hon. Gentleman also ignored the appalling record of his own Government over the past six months. In agriculture they have not fulfilled the promise made in their statement contained in the document "Food from Our Own Resources". There has been little increase in production. They have done nothing to help the farmers. It is a sad and sorry story.

With regard to industrial investment, can the hon. Gentleman really put his hand on his heart with pride and say that his colleagues on the Front Bench have done everything they should to encourage industrial investment by their policies over the past six months? No, of course he cannot. It is fair to say that 99.9 per cent. of the difficulties which he mentioned are due to the Treasury Bench and their policies over the past two and a half years.

My hon. Friend the Member for Banbury referred in his interesting speech to a topic about which we did not hear a great deal in the debate when he spoke of direct elections to the European Parliament. It seems to me that, for reasons best known to themselves, the Government are dragging their feet in this respect. Whether they are frightened about what might happen in the Labour Party when they publish the necessary Bill, I do not know. But I remember asking the Minister of State the week before we rose for the Christmas Recess why he was being so coy about announcing when the Bill was to be printed and published. So far, we have had no further news about it. The right hon. Gentleman said that the Government would fulfil their commitment. I presume that he meant their commitment to use their best endeavours to see that the necessary action was taken by May or June of next year. However, the right hon. Gentleman knows that, unless the Bill is printed and laid on the Table by the second week of February and receives its Second Reading during February, there is very little chance of the necessary machinery being put into effect to achieve the desired timetable.

This Government have paid lip service to the idea of Europe, and Ministers have given an undertaking. It would be monstrous if they continued deliberately to drag their feet, thereby encouraging the dissidents on both sides of the House, with the result that we were the only country to delay this legislation. As my hon. Friend the Member for Knutsford pointed out, it would need only one country to fail to carry out its pledge for the whole idea to be vitiated. Then we should have to start again and no one knows exactly what the procedure or result would be.

There is no reason why this legislation should be delayed. For months now, the Leader of the House has known exactly what is needed. I am certain that the parliamentary draftsmen have already drafted the legislation and that it has been in existence for weeks if not months. There is no reason why it should not be lying on the Table in a short time, and I hope that the Minister will tell us that that is what is to happen.

It would be wrong if I did not mention some of the fears which a number of my hon. Friends have about the European Parliament. My hon. Friend the Member for Banbury seems to be terrified lest it should get additional powers. By that, I presume that he means powers to initiate legislation. Those powers may come in due course, but there is no question of that happening in the immediate future. However, the European Parliament must accrue to itself some increased ability to supervise what the Commission and the Council do. It is the Council and the Commission that the European Parliament can supervise and examine in detail before the Council gets its hands on proposed legislation and the Commission's proposals in draft form. I should have thought that every hon. Member would accept that and want to see that power improved.

Government supporters talk about being democratically elected, and I should have thought that proposals along these lines would appeal to them especially. It would result in scrutiny by a directly-elected Parliament. It would closely scrutinise proposed legislation before it went into Cabinet or Cabinet committee as it does here, and it would scrutinise it again when it came back from Ministers. That is what is needed, and it is what the European Parliament inevitably will have to do, especially when it is directly elected.

Mr. Marten

My hon. Friend said that the directly-elected European Parliament would supervise the Commission and the Council of Ministers. I do not think that people will object if it supervises the Commission, but it is highly dangerous if it is proposed that the directly-elected Parliament should begin to supervise the Council of Ministers. Did he really mean that? If he did not, will he explain exactly what he meant?

Mr. Scott-Hopkins

I was, of course, saying that it would supervise legislation before it became law. As my hon. Friend knows, legislation comes from the Commission in draft form to the Parliament. The Parliament discusses it and looks at it in detail. It discusses in detail the proposed expenditure. The Parliament then sends it to the Council of Ministers. If there is a dispute and the Council of Ministers is not able to agree with the Commission's proposals and the Parliamentary's amendments, there is a consultation procedure. At the end of the day the Council of Ministers has the final word, but at least the Parliament has two opportunities to discuss proposed legislation, the last opportunity being to discuss it with the Ministers directly concerned.

I should have thought that that principle would be accepted by hon. Members on both sides of the House, whether they are for or against direct elections. Direct elections will improve the political viability of the Community. Certainly they will improve the democratic methods by which the Community is controlled. I hope that there will be no more dragging of feet in this respect and that the Government will do their utmost and lay the necessary legislation on the Table for Second Reading within the coming few weeks.

I turn now to the energy side of the report. As my right hon. Friend the Member for Knutsford said, it was the Government's fault entirely that negotiations about a common energy policy broke down, and it is odd that the Minister should say that best endeavours were being used and pretend that it was not entirely the fault of his own Government that the negotiations broke down.

I want to question the Minister further about the research centre at Culham. It seems to me essential that the groundwork should be done as quickly as possible on this research centre for JET. I accept that it is no good having another refusal. Therefore, the quicker that the diplomacy is started and pressed to a conclusion, the better. If there is further delay, the danger is that the teams will be dispersed, and even if a decision favourable to us is taken it will be too late. It would be tragic if that happened, and I hope that the Minister will do all that he can to expedite the matter.

This is perhaps a most unfortunately timed debate without a specific theme running through it. Everyone knows that there are problems in the Community. One hon. Member talked about the difficulties in agriculture. There are surpluses here and shortages there. MCAs bedevil the whole issue. Our farmers are not expanding as they should be. Competition against them in the pig industry especially is appalling. If something is not done quickly, we shall have no pig industry at all.

There are difficulties in the industrial sector as well. As my hon. Friend the Member for Arundel said, the consultation procedures need looking at again. This applies not only to the Economic and Social Committee and the fact that we should know more about how and where the Government appoint people, but to a mass of other consultative committees as well.

With all the drawbacks and partial failures of the EEC, there are enormous advantages as well. Now that we have the presidency for six months we must do everything within our power to galvanise the Community into taking the next step forward, as Roy Jenkins said. Nothing can stand still—it either withers or it goes forward. It is up to right hon. and hon. Gentlemen on the Government side to see that the Community, which is important to the welfare of our people, goes forward and does not die.

8.21 p.m.

The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. John Tomlinson)

I must say at the outset that I was surprised by the opening comments of the hon. Member for Derbyshire, West (Mr. Scott-Hopkins) about the quality of this debate. Inevitably, these six-monthly debates on the progress of the Community are lacking in cohesion and do not have a continuing theme because of the number of different issues covered. Nevertheless, it has been a very useful and informed debate on a wide range of subjects. Some contributions have been more informed and useful than others, but, despite the relatively small number of hon. Members participating, I think that it has been very useful indeed. I think that the clash with the plenary session of the European Parliament is unfortunate. Sometimes such clashes are inevitable, but I hope that the views expressed in the House today will be taken into account, and that in future such clashes may be minimised.

The right hon. Member for Knutsford (Mr. Davies), in opening for the Opposition, was excessively critical about what he regards as a lack of progress in political co-operation. He argued that there should be a more formal and structured back-up for the machinery of political co-operation. The question of a permanent political secretariat has been raised a number of times over the last few years. The British Government would prefer to have the experience of running the presidency in the next six months before deciding whether they think a permanent secretariat would help matters.

The right hon. Member for Knutsford raised specific points about Cyprus and Rhodesia. I assure the House that in the period of the British presidency the Government will take their responsibilities very seriously indeed. In political co-operation the Government will seek to develop and strengthen the process of political co-operation among the Nine, by which the nine member States increasingly speak with one voice on major foreign policy issues. The report stresses how important this has been in relation to members of the Community voting and speaking in the United Nations.

As the Heads of State and Government of the member States said after the European Council meeting in the Hague in November, this form of co-operation must lead to the search for a common external policy. Regular consultation will continue during the term of the United Kingdom presidency over a wide range of foreign policy issues, including those mentioned in Paragraphs 2 to 5 of the White Paper. I am confident that we shall register further progress during our presidency and successive presidencies.

Other points raised by the right hon. Member for Knutsford included the problems facing the textile industry arising out of the section of the report dealing with external trade. The Government are fully aware of the difficult situation of the British textile industry. The agreements concluded under the existing GATT Multi-Fibre Arrangement provided a considerable measure of protection for the industry, but the Government recognise that import penetration has continued to rise nevertheless. This factor has added to the industry's difficulties. The present arrangement expires at the end of this year and negotiations are already under way in the GATT Textiles Committee in Geneva for a successor agreement. The Community, and not the United Kingdom, is the signatory to the arrangement, and the British Government hope that the Community will secure changes in the agreement which will benefit our industry.

My hon. Friend the Member for Southampton, Test (Mr. Gould) made an entertaining rather than illuminating speech. It was entertaining because of its style of presentation, but it was not enlightening because I have heard it all before. It belaboured the question of the trade deficit which, it is alleged, our membership of the EEC has created. I do not accept the economic arguments which he put forward. Just as my hon. Friend portrayed these arguments as being a fact, other people present them in a totally different way, and I accept the alternative hypothesis.

My hon. Friend the Member for Test quoted a report in Socialist Commentary of a speech by the Secretary of State at a fringe meeting of the Labour Party Conference. In this speech my right hon. Friend said that it was not his exclusive opinion that the economic balance of the Community was neutral. Having consulted the opinions of a whole range of economists, he concluded that the economic balance was neutral, and I accept that.

A number of hon. Members, including the hon. Member for Banbury (Mr. Marten) discussed agriculture, and in particular the problems which we face in this respect. In relation to the CAP and the green pound I must state clearly what we want by way of reform. Our central aim is to secure the best use of resources so that the CAP provides effective support for the efficient producer without imposing excessive burdens on consumers or taxpayers.

Substantial progress has been made so far in improving the operation of the CAP, and progress is continuing. We obtained significant changes in the renegotiations and we have made further progress, for example, in restructuring the cereals support arrangements. The Council of Ministers has agreed on further work in other areas, including the dairy sector where proposals for restoring the balance of the market were considered last year, and they will be reviewed at further meetings of the Agriculture Ministers. On beef the Commission will submit a report on the respective merits of intervention and the premium system. Some progress has been made and there is no doubt of our serious intentions and the recognition by the Government of the need to protect our vital interests.

Mr. Marten

If one accepts that certain things have been done—earlier the Minister referred to fringe meetings and now I refer to fringe matters on the CAP—one is entitled to ask what the Government's intentions are in respect of further and fundamental amendments which will make a real difference to the CAP.

Mr. Tomlinson

I have said as clearly as I can what our objectives are and what the progress so far has been. I can assure the hon. Gentleman that progress that we make in the future will more than match the progress we have made in the past.

The hon. Gentleman was critical of the scrutiny procedures, and he was supported in this by the hon. and learned Member for Beaconsfield (Mr. Bell). The Government are aware of the concern which exists about the unsatisfactory nature of arrangements for debate on documents reported by the Committee. The problem is one of parliamentary time which, as we know, is not unlimited. I hope that greater use will be made in future of the procedure for taking debates in Standing Committee. This will in some ways relieve the pressure on the time of the House.

As for the making of statements after meetings of the Council of Ministers, the government have made it clear that where appropriate this will be done, but that it must depend on two factors. The first is the importance of the subject discussed in the Council. The second is the availability of parliamentary time.

The hon. Member for Banbury raised what he regarded as the offensive practice of stamping "EEC" on passports, which will be done if we come to some arrangement on uniform passports. The issue of passports in the uniform style is intended by member States to emphasise their own membership of the Communities and the fact that each bearer of the uniform passport is a national of a State belonging to the Communities. The possession of a uniform passport should heighten the awareness of the citizen of his status in belonging to the Communities.

Mr. Marten

Surely the Minister has now admitted that this is purely a cosmetic exercise. In the Nordic Union passports are not stamped "NU". Each State simply uses its own national passport. Does not the Minister agree that this is therefore a cosmetic exercise?

Mr. Tomlinson

The hon. Member is entitled to put his own interpretation on to this proposal.

My hon. Friend the Member for Kingston upon Hull, West (Mr. Johnson) made an interesting and informed speech, based on his experience as a representative of a fishing port, about the problems confronting the fishing industry. On the question of coastal belts, as has been made clear repeatedly in this House, the Government stand by the statement by my right hon. Friend who is now the Secretary of State for Prices and Consumer Protection on 4th May following the Council meeting.

The Commission's proposals are unacceptable in that they do not match up to the requirements set out in the 4th May statement. We have not altered our view in any way, and the stand-still arrangement for this month does not in any way compromise that objective. My hon. Friend called upon the Government to end the uncertainty. I wish that that was as easy to do as it is to say. We could end the uncertainty by coming to unsatisfactory arrangements, but it is the Government's responsibility to make sure that any agreement we reach recognises that this country contributes over half the fish stocks to the extended Community waters and that we have suffered a serious cutback in third country waters.

On Iceland, my hon. Friend the Minister of State, Foreign and Commonwealth Office told the House on 21st December that in reporting on the consultation with Iceland Mr. Gundelach had said that he deeply regretted that it had not been possible to reach agreement with the Icelandic Government but that he hoped for and would continue to try to secure a positive decision by Iceland. It is impossible to forecast whether the Icelanders will be prepared to agree to arrangements which will permit our fishing to resume, but the talks with Iceland have not broken down. They are to continue later this month in the hope that we shall reach an agreement.

There has been no question of the EEC letting us down over Iceland. The Icelanders have never been easy to negotiate with. We are confident that the Commission will be able to bring home to Iceland the consequences of failing to reach a reasonable understanding with the Community. Failure to achieve this so far has been disappointing, but I do not think the negotiations could have been handled more successfully in any other way or by any other person than the Commissioner now responsible.

I turn now to the interesting contribution of the hon. Member for Kensington (Sir B. Rhys Williams), who was particularly concerned to discuss economic and monetary union. It now seems to be accepted that the aim of economic and monetary union on the basis of fixed exchange rates by 1980 is quite unrealiseable. Progress on the economic front is clearly essential to progress in the Community generally. For this to be possible a substantial measure of economic convergence must be achieved.

The Dutch proposals, referred to in paragraph 51 of the White Paper, are still very much on the table. They are being closely examined here and in other Community countries and could well offer the most satisfactory way forward in the exchange rate area. Given the wide divergence of economic performance which still exists among Member States and all the difficult questions about how the arrangements Dr. Duisenberg proposes would operate, it would be unrealistic to look for rapid progress.

I say to my hon. Friend the Member for Newham, South (Mr. Spearing) that in my view the economic balance is neutral. He was picking out in his speech exactly the same point as did my hon. Friend the Member for Test.

I refer now to the question of the problem of public access to EEC documents. My hon. Friend the Member for Newham, South was being slightly unfair to my right hon. Friend when, talking about the letter he received from him, he said "All he says" and referred to a short part of what he later acknowledged to be a lengthy four-page letter. The existing arrangements for public access to EEC documents are not as foolproof as one would like them to be were money no object. However, they do not seem to work too badly in practice. Neither the European Communities Office nor the Foreign and Commonwealth Office has any evidence of any serious public dissatisfaction.

To embark on the publication of individual proposals in addition to the existing Community publications would be an expensive business, whoever bore the cost. I do not think that there is a case for establishing any new expensive commitments although there are one or two less ambitious ideas which we intend to pursue.

Mr. Spearing

My hon. Friend is putting up a suggestion which I did not make. I was not asking for additional printing. I was asking that the existing yellow slip system be made available to the public. My reference to the Minister of State's letter and to "All he says" referred to the fact that he dismissed that suggestion without saying why it was not possible or why he considered that it was undesirable.

Mr. Tomlinson

I am grateful to my hon. Friend for that clarification. I am sure that he will be pursuing that point directly after the debate.

The hon. Member for Arundel (Mr. Marshall), who has apologised for his in- ability be present to hear my reply, raised three areas where he said we had not gone as far as possible. The first two concerned the rôle of the consultative committees, the overall policy on loans and Government thinking on the question of exchange rate guarantees. I am sure that he will understand if I give an undertaking to reply to him in writing.

The hon. Member's third point concerned co-ordination in Government thinking. I can assure him that there is regular and systematic contact between Ministers and Government Departments engaged in the work of the European Community. This takes place as a matter of course.

In a wide-ranging speech the hon. Member for Windsor and Maidenhead (Dr. Glyn) raised a point about the link between European parliamentarians and Westminster. The Select Committee came to no firm conclusions on this matter and suggested that experience should dictate how far this relationship should develop. In a matter so closely concerning the House I am sure that this course of action is wise. In so far as legislation might be required, it will be principally a matter for my right hon. Friend the Home Secretary, who will certainly take note of the hon. Member's concern.

The hon. Member for Derbyshire, West referred to the question of designation in relation to fishing policy. The Government have designated a number of countries as being entitled to fish within the area by which British fishing limits have been extended. There will be no change in the arrangements which currently apply out to 12 miles.

The designated States are Community Member States and, for three months in the first instance, Norway, the Faroes, the USSR, Poland, East Germany, Finland, Sweden, Spain and Portugal. The designation of these countries, and the exclusion of all others, is in accordance with our Community obligations and the decisions taken by the Council. The common fisheries policy requires us to give other member States access to our waters beyond the six to 12-mile band which is reserved until 1982 for our fishermen under the Treaty of Accession.

The Council agreed with Norway and the Faroes that fishing by each side in the waters of the other should continue as in the past, for the next two or three months pending discussion of longer-term arrangements. For the other countries on the above list the Community has decided to grant for the first three months of 1977 an autonomous quota equivalent to their average catch between 1965 and 1974 minus 15 per cent. The quota will be reviewed at the end of this period in the light of progress in the negotiations with the countries concerned.

The Community has decided to eliminate fishing by Bulgaria, Cuba, Romania and Japan. Fishing by these countries was on a small scale and had started only recently.

The hon. Member for Derbyshire, West also asked about the Government's view on the Greek accession. We give our full support to the Greek application for Community membership and look forward to carrying the negotiations forward during the United Kingdom's tenure of the presidency.

Mr. Marten

My hon. Friend the Member for Derbyshire, West (Mr. Scott-Hopkins) mentioned Turkey, in which I am interested, and the need to ensure that the Turks are not disadvantaged. Will the Minister answer that point?

Mr. Tomlinson

At the EEC/Turkey Council of Association meeting on 20th December, we reached agreement with Turkey on a number of issues. The Community made clear that it is fully conscious of the interests of Turkey and the need to ensure that policy towards Turkey is as even-handed as possible.

Mr. Scott-Hopkins

The agreement signed at the last Council meeting does not cover the point on which there is disagreement. The Turks feel that they are being treated worse than countries such as Egypt and Israel on such matters as agriculture and the terms for industrial credit. The Turks feel that they have not been equal terms.

Mr. Tomlinson

We have had extensive discussions in the Community on problems relating to Turkey. There may be differences of view within the Community, but there can be no doubt that everyone is fully apprised of the interests of Turkey and conscious of the necessity of recognising those interests.

The hon. Member for Derbyshire, West also referred to the Joint European Torus. The Government's view has been made clear in the House on many occasions; we believe that it is essential that an early decision on the siting should be reached so that the JET can go ahead as a Community project. It is essential that the JET should be sited where it has the best chance of success and we believe the best site to be Culham. The team there designed the experiment and the necessary background and experience of fusion work exists there. We are continuing to press the claims of Culham, but I must make clear that we shall not block agreement if there is a strong consensus in support of another suitable site.

Under our presidency, consultations between the European countries which are anxious to provide a site for JET will continue. On 21st December my hon. Friend the Under-Secretary of State for Energy pointed out that we believe that the EEC will show the necessary determination and resolve to make sure that JET is established as soon as possible.

A number of hon. Members have referred to direct elections to the European Parliament, and they have had responses from Ministers on a number of occasions. The House is well aware that the direct elections instrument was signed by the Foreign Ministers of the Nine on 20th September last year. Member Governments are now in the course of preparing the necessary legislation to enable them to comply with their expressed intention of holding direct elections in May or June next year. The Queen's speech contained a commitment to the introduction of a Bill in this Session, but it is not possible at this stage, as has been explained, to state precisely when the Government will be able to introduce this legislation.

Many points have been made in the debate on a wide variety of topics and I have tried to reply to as many of them as possible. I think that these six-monthly debates should be taken very seriously by the House. There have been many interesting contributions, and the Government will bear in mind all that has been said. Needless to say, I cannot agree with all the views which have been expressed, however elegant the expression of those views might have been. My only regret is that these debates still produce evidence of a vocal minority who, having been in the forefront of demands for a referendum on the question of continued British membership of the EEC, still refuse to accept the clear and overwhelming verdict of the British people.

I have no doubt that from time to time it is useful for the House to have the chance to consider the whole range of British relations with the EEC. That is particularly true today as we embark on the six months of United Kingdom chairmanship of the Council of Ministers. Six months is not a very long time in the history of the Community, and we are not setting out with ideas of initiating radical changes; we should be bound for disappointment if we were. But we are determined to run the business of the Council as efficiently as we can and to help to establish an order of priorities in the many problems facing the Community.

Let us all hope that the events during our presidency—those for which we are responsible and those for which responsibility lies elsewhere—are such that our next debate, six months hence, can take place in a more certain international economic atmosphere and against a background of greater progress than we have experienced in the six months which we have reviewed today.

Question put and agreed to.

Resolved, That this House takes note of the Report on Developments in the European Communities, May-November 1976 (Command Paper No. 6695).