HC Deb 22 November 1977 vol 939 cc1304-10
Q1. Mr Jay

asked the Prime Minister whether he will publish in theOfficial Report his letter of 30th September to the Secretary of the Labour Party on the Government's attitude to the EEC; and whether he will make a statement.

The Prime Minister (Mr. James Callaghan)


Mr. Jay

In view of this interesting letter, may I ask whether the Government will be bringing forward at an early date specific proposals for greater control by this Parliament over EEC legislation and for drastic changes in the common agricultural policy and the common fisheries policy?

The Prime Minister

The letter is designed to promote public discussion, which it has done, and to indicate the Government's long-term views and objectives on the matter. I do not think that the issues my right hon. Friend raises are likely to be resolved within a short period of time, but this shows what the Government are working towards. As for legislation within the control of this Parliament, it would need new legislation to give the European Assembly any further powers and the Government have no intention of introducing any of that.

Mr. David Steel

Is the right hon. Gentleman aware that some of my right hon. and hon. Friends and I attended a meeting in Brussels last weekend of European Liberal and Democratic Parties which was attended by two of the Foreign Ministers of the Nine? Is he further aware that great concern was expressed to the effect that this House ought to support the European Assembly Elections Bill in the form presented to the House, both so that we have the elections in time and so that the British delegation may contribute proportionately to the political groupings in the Assembly as do other member States?

The Prime Minister

I am aware that both M. Thorn and Herr Genscher hold this view strongly. I fear that in other countries there are other views on the matter. I would not wish to intrude on the Liberal Assembly in that way.

Mr. Roper

Would my right hon. Friend agree that he is in no way isolating himself within the Community in relation to the views he has put forward in his letter because the Danish Prime Minister has made it clear that he holds almost identical views?

The Prime Minister

What the letter represents, together with my speech at the Lord Mayor's Banquet, is a coherent policy which this country should follow. The policy that is set out in respect of the Community will, in my view, provide advantages for this country without the disadvantages which some have foreseen.

Following is the letter:

30 September 1977.

Dear Ron

I am writing to you about the statement and background paper on the European Community which the National Executive Com mittee has prepared. The Government has never seen the Community as a static organisation and, as you know, we have been examining the workings of the Community in order to form a long-term perspective on the areas where reform and change are required in the Community. Such a perspective would provide the framework for future policy.

I begin by saying that the real long-term effects of Community membership cannot be properly measured because this period has coincided with a five-fold increase in oil prices and the worst world recession in 40 years. I do not think that enough weight is given to this coincidence, when we measure the dissatisfaction felt in Britain about the effect of membership. But equally I am in no doubt that there are aspects of present Community policies which do not work in our interests or may work counter to our concepts of how Britain and Europe should develop.

Let me say straightaway that the solution to these problems would not lie in Britain's withdrawal from the European Community and I welcome the fact that the NEC statement does not propose this. Such a policy would be too facile because it would ignore both the contribution which the Community has made to healing old divisions and also the immense political and economic effect of such a drastic step on the future of Britain. Withdrawal would cause a profound upheaval in our relations with Europe but also more widely—and particularly in our relations with the United States.

There could be serious consequences on the policies of important Allies such as, for example, the Federal Republic of Germany, which has long made membership of the Community, with Britain as a full member, one of the cornerstones of German foreign policies. There would be a risk of increasing tensions in East/West relations. It might well have adverse impact on the development of the new democracies in Portugal, Spain and Greece, all of whose Governments are seeking to strengthen their democratic commitment through membership of the Community. We are pledged to do all in our power to help sustain the new found freedoms of these countries and I do not doubt that disarray in the Community would weaken seriously the forces of democracy there.

Political co-operation between the Nine, closely linked with their Community activity, has recently made considerable progress. The Nine are working together to influence South Africa to abandon apartheid, including a new code of conduct covering such issues as trade union representation, wage levels and conditions of work for the employees of European companies operating in South Africa. The policy of the Nine towards Southern Africa is also being co-ordinated in the UN, particularly over Namibia and Rhodesia. The Community is moving towards a common line over human rights, and in other important areas such as, for example, over Cyprus, the Middle East, Yugoslavia and the Belgrade Conference, the Nine are increasingly speaking with one voice. In this way the Community is exerting a stronger political influence than it would do if its members were speaking individually.

So the best way forward for us is to define the essential elements of a distinctive policy that will meet the legitimate concerns and interests of the British people and will strengthen unity and democracy in Europe. In the words of the National Executive Committee document: "We must avoid a purely negative posture".

Despite the written constitution of the European Community, it is an organic and evolving body, and it is our responsibility to work for reform of the Community's policies and the manner in which its institutions operate where this is necessary. The renegotiation of 1974–75 showed that it was possible both to be critical of the present structure and yet work within the Community to improve it. Indeed, in certain key areas renegotiation was not simply a matter of improving the terms for Britain, it also helped to create a better Community—the Lomé Convention dealing with Third World States being an example of such a development.

The task now before the Government and the Party is to produce a long term perspective for reform and change within the Community. It should be possible for us to agree on the areas in which improvements and reforms are needed and to work out in some detail the specific objectives we should set.

For such a policy to succeed we shall also need to convince eight other Governments, all with their own perceptions of the future of Europe and with their own national interests to defend.

I suggest that we must avoid the political nationalism which would disregard the ideas and experience of other European Democratic Socialist Parties or would treat their experience as some inferior brand—not to be confused with the genuine British article. Nor should we be party to attempts to make the EEC a scapegoat for all our national ills. It is certain that we would not carry conviction for a programme of reform among other members of the Community if we begin by blaming the EEC for all or most of our inflation, our level of unemployment, our low productivity and investment or the structural weakness in the British economy. Some of these problems pre-date our membership and will need a continued national effort to overcome them. We must put our own house in order, and in doing so, we should ensure that we are not hindered by our membership.

But we can also work to shape the policies of the EEC so that in serving the interests of all its members they will also be complementary to the policies of a regenerated British industry and revitalised British economy. Our main purpose should be to define our aims and objectives so that the British people can see clearly that Labour's policy is best designed to promote their interests inside the Community and to strengthen the unity of the people of Europe within a democratic framework. Some elements of such a policy already exist and the Government has under consideration six key elements on which we are concentrating attention. These are:

  1. (a) maintenance of the authority of national governments and Parliaments;
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  3. (b) democratic control of Community business;
  4. (c) common policies must recognise the need for national governments to attain their economic, industrial and regional objectives;
  5. (d) reform of the Common Agricultural Policy;
  6. (e) the development of a Community energy policy compatible with national interests;
  7. (f) enlargement of the Community.

Maintenance of the Authority of National Governments and Parliament

The Government has never accepted that the Community should develop into a federation. It is our policy to continue to uphold the rights of national Governments and Parliaments. We do not envisage any significant increase in the powers of the European Parliament. Should any such increase in powers be contemplated it would need the unanimous consent of the Nine Member States and of the Parliaments. The United Kingdom should make it clear that in our case any change in the powers of the Assembly would require an Act of Parliament and not simply be introduced by an Affirmative Order under the European Communities Act.

Democratic Control of Community Business

We should try to define categories of Community legislation and develop greater Parliamentary control over those categories which we would otherwise have considered appropriate for Parliamentary legislation. We must also improve the flow of information about the Community to Parliament and to the public as part of the process of improving the scrutiny procedures which the Government have established. There is need for greater openness in Community procedures including the holding of some Council debates in public.

Attainment of Economic, Regional and Industrial Objectives

There is concern about how much freedom any individual government has within the Community Rules to plan its own industrial and regional strategy and intervene in industry to fulfil its industrial objectives. On the other hand, with the help of the Commission the experience of a number of governments, including our own in the matter of British Leyland, Chrysler, Meriden and Alfred Herbert, suggests that fears are exaggerated and we have of course benefited from things like the Social Fund. Nevertheless, there is need for constant vigilance on these matters and a need for discussion with other Socialist and like-minded parties as well as governments, on both industrial planning policy and the related problems of regional development and unemployment.

Reform of the Common Agricultural Policy

We should work to develop a four year structural plan to secure a substantial reduction in surpluses and to maintain restraint on prices so that they are held to the minimum necessary for efficient production to the benefit of our consumers. World prices must be taken more fully into consideration and greater scope given to competitive imports from abroad, especially from developing countries and from the more efficient temperate producers. United Kingdom agricultural production should be selectively expanded. Action on prices must be knitted into a co-ordinated programme of measures to tackle the problem of surplus production including, where appropriate, measures designed to improve general levels of efficiency and to ease the removal of backward producers from the land. Some responsibility for subsidising the incomes of inefficient producers should shift from the Community or the consumer to national governments. Special measures will be needed on the part of national governments or the Community to safeguard certain forms of agriculture for particular social or regional purposes.

The Development of a Community Energy Policy

Energy policy will be of fundamental importance to the UK and to the Community as a whole. There are a number of ways in which a common energy policy could be to our joint advantage and could also help Britain to put our resources to the best use, for instance in planning the future of our coal industry and in seeking collaboration on major research projects. We shall need to uphold British energy interests vigorously in the Community while taking full account of Europe's shortage of indigenous fuels.

Enlargement of the Community

The Government and the Party have always supported the concept of enlargement. We have a strong political commitment to the support of democracy in Greece, Portugal and Spain, and the Community should use its democratic political strength to buttress these new democracies. The dangers which some have seen of an over-centralised, over-bureaucratised and over-harmonised Community will be far less with twelve Member States than with nine.

These long-term objectives are by no means exhaustive either In total or content. For example, we are already making strenuous efforts to secure an acceptable Common Fisheries Policy. But the objectives I have set out above will indicate the general stance that the Labour Government would adopt within the Community. My aim is to conduct a policy of reform consistent with wholehearted membership which would enjoy a great deal of support from our people: namely a proper promotion of British interests combined with a positive direction in which the Community could move effectively. The knowledge that these are our objectives would be known to the other members of the Community and would guide the direction which our efforts within the Community will take and against which proposals for future policy would be considered. Provided we are ready to fulfil the obligations of membership we have undertaken, for example in the matter of Direct Elections, our general stance could bring no accusations of lack of co-operation.

The National Executive Committee has made an important contribution by producing its own analysis. Conference will I hope have the opportunity to express its views. Follow ing Conference I propose to invite the National Executive Committee to a discussion with members of the Cabinet with a view to drawing up an agreed statement which would be the basis of Labour's future policy towards the Community.

Without such an agreed long-term policy we will be unable effectively to champion a serious and substantial programme of reform. We will merely be reacting to events. With such an agreed policy we would be able, in the process of business within the Community, to work for a coherent programme of reform. We should seek to work with other Governments and like-minded parties inside the Community to get a policy of joint action on all or part of the reform programme. Such a course of action will enable a united Labour Movement to offer the British people a programme of radical reform within an evolving European Community. We would once again be the only major political party to offer the British people the prospect of changing those aspects of Community policies which cause dissatisfaction whilst at the same time working for the development of the Community and the growing unity of the people of Europe.

I put these proposals forward believing that they provide an opportunity for us to achieve a policy on which we can all agree.

Yours sincerely,