European Community

HC Deb 21 May 1984 vol 60 cc690-734 3.44 pm

Mr. Jim Spicer (Dorset, West)

I beg to move, That this House, recognising the vital role that a closely knit European Community could and should play in world affairs, congratulates both the Prime Minister and Her Majesty's Government on their continuing efforts to ensure a strong voice in Europe for Britain and that all necessary changes are made within the Community to sustain respect for that institution and to enhance its authority both internally and externally.

Mr. Speaker

I should tell the House that I have not selected the amendment.

Mr. Spicer

We stand on the threshold of the second set of elections to the European Parliament, which take place on 14 June. It may not be necessary to remind hon. Members of that fact, but for the public it cannot be said too often. All the projections, and all the pundits who take an interest in such matters, point to a low turnout and an almost complete lack of interest among the general public in most matters relating to the European Community, and above all in the voting intentions of the general public on 14 June. I hope that that will turn out to be a false prediction and that we shall have a good turnout to reflect the interest of the general public on that occasion. I stress that our membership of the European Community is a vital British interest which must be protected and enlarged upon at all costs.

The starting point for and the need of a European Community was clearly established in the early post-war days, and nothing has happened since those days to diminish the need for such a community. In fact, precisely the opposite is the case and there is a greater need than ever for a strong, united European voice on the world stage. I was reminded by his grandson only last week of a comment made at a press conference in Yorkshire by Lord Stockton, formerly Mr. Harold Macmillan, at the time of the 1979 general election. He was asked by a member of the press why he believed there was any purpose or point in there being a European Community. He replied: I was almost killed in the first world war. My son, Maurice, was almost killed in the second world war. My belief in a European community is based upon the fact that my grandson will not be killed in a third world war started in Europe. That remains the main feature of a European community. That is why many people in the House and outside it are still staunch Europeans, and that should not be forgotten.

I became a European on either 2 May or 3 May 1945, when I was about 18 years of age. I had come up through France, Belgium and Holland and I finished the war in that once great city of Hamburg. As I looked upon the desolation that had been created by a second world war and thought about the misery and death that had been occasioned during that war, I became a European. I have held staunchly to that view ever since. It made me determined to play my part in bringing together a European community of nation states—I emphasise the words "nation states"—which could play a major part in preventing such a catastrophe again. During the last 20 years I have played what little part I could to help to bring about a community which could live up to those early ideals.

There are many other important roles for a European Community, and no hon. Member should forget them. It should continually work to abolish intolerable trade barriers, which still exist in the community. One does not need to be reminded of the events of six weeks ago when, up and down the Community, lorries were held up and protests mounted because of the burdens placed on trade. That cost lorry drivers much time, and placed extra burdens and costs on moving goods between the member states.

The Community should co-operate strongly in research and development. There is much that we can and should be proud of in that sphere. We set an example to the rest of the world on the nuclear side. I hope that we shall soon see the first benefits of European co-operation.

The Community should become involved in all areas of economic and social activity, which can best be dealt with at that level. Throughout my speech I shall say which matters should be dealt with at Community level because that is the best way to deal with them.

Mr. Nicholas Budgen (Wolverhampton, South-West)

I am worried about my hon. Friend's terminology. The last part of the motion enjoins the House to vote for a motion on the Community to enhance its authority both internally and externally. Earlier, my hon. Friend spoke of a Europe of nation states. I hope that he will explain to the House how he resolves that contradiction and will put forward some principles so that we can understand which programmes are best dealt with at national level and which at EC level.

Mr. Spicer

I expected my hon. Friend to use his usual probing authority to question a word here and there. As I continue, he will understand where I think that that authority should rest with the Community and where it should not. I shall do my best, but if he is not satisfied perhaps he will intervene again.

The Community should consider research and development in defence procurement. The present duplication and cost of research and development are appalling. It may only be a pipe dream, but we should try to arrive at the day when, instead of a British battle tank, a German battle tank and a French battle tank competing for one market in the 1990s, the Community produces one battle tank. That would mark a major step forward and would save a great deal of money.

Finally, and of prime importance, the Community has a decisive role to play in the Third world. During the last century there was never a time when the Third world faced the possibility of famine on the scale which we must now expect.

Mr. Ron Leighton (Newham, North-East)

Before the hon. Gentleman raised his point about developing battle tanks, he suggested that the establishment of the Community was a guarantee against another war in Europe. Where will these battle tanks be used? Presumably they will be available for use in Europe. Is it not true that there is a danger of war not between us and our western European neighbours—that has nothing to do with the Community—but between east and west Europe? We are stoking up the arms race with battle tanks in the West, of which the hon. Gentleman is so fond, with battle tanks in the East, and with the deployment of ever more nuclear missiles in Europe. Will the hon. Gentleman tell us in what way the European Community will diminish the danger of war between East and West—which is the real danger—rather than considering what happened in a previous generation in western Europe?

Mr. Spicer

How quickly we move from the main point. I strongly disagree with the hon. Gentleman. The European Community has contributed to peace, and when I sit, as I do until 14 June, in the European Parliament with my French and German colleagues I find it inconceivable that there could be another war between France and Germany. That stems from the EC. As to the hon. Gentleman's point about research and development and battle tanks, if we are faced with four times as many Russian tanks as Western tanks, the West must get the maximum output for the minimum cost to arm our defensive forces.

Mr. Leighton

That is what NATO does.

Mr. Spicer

NATO uses those tanks on the fields of battle, but nothing in the treaty prohibits research and development in that area. The European Parliament has already made great progress in this matter, and I hope that it will continue to do so in the years ahead.

The Third world must be of prime importance to us all. In 1984 the African famine will probably be the worst this century and all the predictions are that it will continue for some time. If ever there was an area in which the EC should play a major part, it is in the relief of that famine.

I pay tribute to the work of the Conservative group in the European Parliament, which, during the past five years, has given a lead in all those areas and has been in the forefront of pressing for more action in the Community. I hope that many of those Conservatives will be returned, augmented by new Members.

Mr. Budgen

My hon. Friend promised that he would explain the principles by which he would recommend European action as opposed to action on a national level. Will he explain why it is impossible for the British taxpayer, through our national institutions, to relieve that famine, if we decide to do so, and why it is so much better to do it on a European basis?

Mr. Spicer

I am perfectly happy to follow that line. At Question Time today we discussed what we should do unilaterally, but in this area we need co-operation and co-ordination. How can we inform French territories or Portuguese territories such as Angola and Mozambique that we shall contribute our share unilaterally? The aid must be co-ordinated, and the right body to do that is the EC. I said that I would try to answer my hon. Friend's point towards the end of my speech.

All the areas that I have mentioned are ones where a sensible person can subscribe to the idea of a community. The Community's most important function is in foreign affairs. Every six months the Heads of Government meet, and their meetings are augmented by successive meetings of the Council of Ministers and by Foreign Ministers meeting in political co-operation. At all those meetings a host of vital decisions could and should be made both by the Foreign Ministers meeting in political co-operation and by the Heads of Government.

Let me give three or four examples. Could we as a Community not do more to resolve the conflict in Cyprus, which is damaging not just to the people of Cyprus—we should remember that it is an associate member state of the Community—and bringing misery to them, but to Greek-Turkish relations and to the Greeks and Turks in NATO, thus diminishing NATO's role?

Secondly, are we prepared to take account of the recent changes in southern Africa? All those changes, which have come about only in the past two or three months, offer hope to the unhappy people of Mozambigue, Angola and all the other front-line states, which slowly but surely have seen the infrastructure of their countries destroyed, whether by outside influence or their own inability to keep the infrastructure in good order.

Are we going to play a much greater role in restoring the economies and infrastructure of those countries? Are we prepared to grasp the nettle and say that anything that happens in those front-line states will be done in conjunction with South Africa, and are we prepared to co-operate with South Africa and the front-line states in rebuildng the economies of those countries? That is a question that I ask Opposition right hon. and hon. Gentlemen. I am sorry that the leader of the Liberal party is not present, because I am sure that he would be the first to say, "Certainly not. We do not even wish to see the Prime Minister of South Africa coming to this country when matters such as this will be discussed."

I believe that such matters should be discussed. If one wants to know why, one need not go further than the speech by President Machel at the meeting between Prime Minister Botha and himself.

Sir John Biggs-Davison (Epping Forrest)

Does my hon. Friend recall that in 1947 the late Ernest Bevin, among others, when discussing early plans for European unity, saw as a concomitant of that unity co-operation amongst powers with African responsibilities for development in that continent? He included South Africa in his thinking.

Mr. Spicer

I am grateful to my hon. Friend for making that point. I was not around in 1947.

Mr. David Penhaligon (Truro)

Hamburg 1945 and 1947 were after 1945.

Mr. Spicer

That was 1945. It was not 1947. In 1947 I was on my way to Kenya.

My hon. Friend's point is well made. I shall return to President Machel and paraphrase what he said at that meeting. He said, "We are all Africans, be we black or white. For too long we have destroyed and fought over our continent and as a result our people have suffered. Let us now come together and let us work together in friendship and in hope for the future, doing the best we can for our own people." I give that message to the Opposition, and I hope that when my hon. Friend the Minister replies he will say something about it.

My third question is: have we hammered out a positive European policy in relation to the Gulf war? It is important that there should be a European voice on that.

Mr. Budgen

Why?

Mr. Spicer

I know that my hon. Friend will continue like this throughout the debate. It is because the Gulf states want to hear a European voice. They are sensitive about the role of the United States, because they know that in election year it is playing both horses. It is looking to the Israelis, and having to rely on the Arabs. In that context, our friendship and alliance with the Gulf states is of prime importance.

My final point on foreign affairs is whether we are as one in our resolve to see an end of the terrorism so frequently exported by countries such as Libya. What a major plus it would have been for the European Community if, in the days following the savage murder of Woman Police Constable Fletcher in St. James's square, there had been a firm announcement from all 10 member states of the European Community saying, "Enough is enough. We outlaw Libya and any other country that intends to behave as Libya has behaved." That is what could and should be done. I know that it may seem to be pie in the sky.

Mr. Donald Stewart (Western Isles)

Why could not those steps be taken by international co-operation, without any reference to the European Economic Community?

Mr. Spicer

The main forum for international co-operation is the United Nations. I hazard a guess that had such a matter gone to the United Nations it would still be discussing it with all the power blocs moving. The European Community is meant to be of European origin and we have a definitive European role. If we cannot agree on such matters, it is a pretty poor outlook for the world. Those four matters should be talked about in the Council of Ministers, whether it be by the Heads of State or the Foreign Ministers.

Mr. Tam Dalyell (Linlithgow)

The hon. Gentleman and I were parliamentary colleagues in the European Parliament when it was indirectly elected. At that time we were worried about arms and about our relations with Latin America. We were members of the European Parliament Latin American group. Has he any views on the end-user certificates in relation to arms, particularly the export to Argentina by West Germany of submarines, Meko 360 and Meko 140 frigates, and other sophisticated arms from the French? Should not the Community do something about that?

Mr. Spicer

The hon. Gentleman raises an interesting point, but it is easy to point the finger at the West German Government, who were at that time a Social Democratic Government, and at France, which had a Socialist or a Gaullist Government. If one wanted to extend the matter, one could point the finger at the previous Labour Government, because they were instrumental in providing the Argentine fleet with a large part of its surface vessels. I shall leave the matter there. If we wish to pursue it further, we can.

Mr. Dalyell

There are Rolls-Royce engines, David Brown gear boxes and Decca navigation equipment, all made by us, in the formidable weaponry. [Laughter.] Does that not raise serious questions—it is far from a laughing matter—about the export of arms. Whatever view one takes of the Falklands, our troops are involved and are therefore in danger from highly sophisticated weapons provided by ourselves and our European partners. Should not there be European co-operation on such matters?

Mr. Spicer

That can be achieved only by a total embargo on the export of arms, otherwise the end user, wherever he may be, will always manage to get his hands on them. However, that is moving somewhat away from the main thrust of this discussion.

An agenda including the points that I have raised would be welcomed by my right hon. Friend the Prime Minister and my right hon. and learned Friend the Foreign Secretary, because it is to provide a European resolve and European view on such matters that the Community was first founded. Instead, time after time these vital matters which we should be discussing within the Community are pushed to one side to allow room for a further "cobbling together" of short-term solutions on budgetary and agricultural matters.

We all know that the Prime Minister wants to see longterm solutions of these internal problems and also an end to the fudging of issues on a year-to-year basis. What sense can there he in Ministers and Heads of Government gathering around a table and proceeding to argue about milk, butter or budgetary matters? We need a long-term solution. It is for that that my right hon. Friend the Prime Minister has been working over the years. My right hon. Friend wishes to clear the decks, to find long-term solutions to these matters and then to concentrate Community activity in the areas in which it is most important.

If we are in the business of clearing the decks, it is probably high time that we spent a little time considering and reassessing the roles of the various Community institutions. After all, the Community of Six was formed in 1958. It is now a Community of Ten, soon to be Twelve. What was right for the Six in 1958 is not necessarily right today. Let us start from the central proposition, which will please many of my hon. Friends, that Community institutions should assume only those responsibilities which are best discharged at Community level. That is the key point and a broad statement of the way in which I believe that the Community as a whole should work.

I do not wish to spend too long on the Council of Ministers, but if it is asked to carry out additional tasks it must have a tougher, harder and possibly larger secretariat that will spend more time considering the problems that will face the community in the future. My hon. Friend the Minister may disagree, but a forward plan is clearly needed to consider situations in which immediate decisions will be desirable. That capacity for rapid decision making is the main change that I would make in the operation of the Council of Ministers.

As for the European Commission, I must admit that I sometimes find it a most puzzling body, and the views handed down from it at times make very little sense. In my view, it is time that the Commission took a long hard look at article 100 of the treaty of Rome. At the moment far too much of what emanates from the Commission is contentious and does not really lie within the competence of the Community or within the treaty of Rome. A much stronger line should be taken on that. My view can be summed up in the simple phrase, "No harmonisation for the sake of harmonisation." That was the watchword of many nominated Members of the European Parliament and I hope that the new Members, especially Conservatives, will strictly follow that line.

Thirdly, as regards the European Parliament, five years is but a day in politics, but all Conservatives standing for the second time on 14 June know that in the next five years a great deal of progress must be made towards more sensible use of the time of the European Parliament. My worry is over the gradual drift into a time schedule that often becomes chaotic. I wish that every Member of the European Parliament could see what happens at 2.29 pm in this Parliament and how its work is ordered and structured in a way that is sadly lacking in the European Parliament.

In my view, it will be for the Conservatives in the new European Parliament to give a lead. I had the great privilege of serving with the late Sir Peter Kirk and under the leadership of my right hon. and learned Friend the Member for Hexham (Mr. Rippon), and I know the part that the Conservatives played in bringing about more structured debates, introducing Question Time and generally improving the quality of the European Parliament. I know, I hope and I expect that the Conservatives to be elected will follow the same line, because if positive steps are not taken within the next five years I greatly fear for the future.

Although it does not often surface, I believe that there is a genuine feeling for the European Community among the people of this country and an understanding that if we go back to basics there is a reason for it. I believe that the electorate of this country want an effective European voice which will be heard and play a full part in world affairs.

I believe that there is also an awareness that the brand of Europeanism now being peddled by the Labour party really constitutes a hatchet job to destroy not just Britain's membership of the Community but the Community itself. The antics of Mrs. Barbara Castle and her Left-wing friends in the Socialist group of the European Parliament in the past five years have made that plain. One would expect the Centre and Centre-Right to be aware of such antics, but time and again I have seen horror writ large on the faces of Members of the Socialist group itself as the Left-wing element of the British Labour group hammers away at the Community and our membership of it, doing a great disservice to this country in the process.

If added proof is required—and how carefully this has been fudged over—one needs only to look at the list of candidates put forward by the Labour party. Putting it charitably, we do not see the same kind of mainstream candidates. In one constituency after another we see the hard Left coming forward every time. [Interruption.] Labour Members may protest, but the evidence shows that middle-of-the-road Socialists who showed their support for the European Community and its ideals have been hounded out of the strongest Labour seats. Two of the best members of the European Parliament of any party—Derek Enright and Brian Key—are just two of those who have been pushed aside to make way for the hard men of the Left. A pretty good hatchet job was certainly done on putting in the boot for those two good men who now will not return to serve the cause of genuine Socialism in the European Parliament.

Let us now consider the role of the Liberals and the SDP. I am sorry that so few of them are present—only two, I believe, and only five Members on the Labour Benches.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley)

We have more Members on the Front Bench than the Government.

Mr. Spicer

I believe that the common sense of our electorate will enable them quickly to see through the naive and trusting approach of the SDP and its Liberal partners, who have now made it clear that they are prepared to accept the Community in toto, warts and all. The Liberals have made their position quite clear. First and foremost, they wish to throw away the veto. I cannot say that loudly enough or often enough. If the people of this country do not realise what that means in terms of the wellbeing of this country, God help them and us!

Mr. Penhaligon

The only matter of any substance on which the veto has been used so far was when the Prime Minister, in her various shenanigans to try to get back the money which she so miserably failed to obtain, forced the rest of the Community to use the veto against Britain to secure what proved to be quite a sensible price arrangement for agriculture. I presume that the hon. Gentleman therefore opposes that.

Mr. Spicer

Oh no. I am delighted that the hon. Member for Truro (Mr. Penhaligon) is present, because he rightly takes a keen interest in agricultural matters. Had the discussions taken place in late March or early April without the threat of the veto, does the hon. Gentleman really believe that our Minister would have come back from Brussels with the retention of the beef premium and sheepmeat regime? It is easy to say, "Yes," but I am not so sure. Had the threat of that veto not existed, there would have been no beef premium or sheepmeat regime, and all of us, including those with dairy interests, would have suffered. Let there be no mistake that the alliance wants to see the end of the veto, whereas we Conservatives do not. We want to see its retention.

The Liberals and Social Democrats also want to give more power to the European Parliament to tax us. Their manifesto, which is in evidence in the Chamber, states: The powers of the Parliament over expenditure of the Community should be extended to the revenue side. What absolute drivel! This fledgling Parliament has been in existence for only five years. Time enough in 10 or 15 years, when it has proved its ability to deal with the present situation, to start talking about extending its powers.

The alliance manifesto also suggests that in the short term we should be happy with VAT as the revenue-raising arm of the Community, but that in the long term we should look for excise duty to go direct to the Community. I cannot wait for the hon. Member for Truro to go down to his part of the world, manifesto in hand, to tell his people, "End of the veto, more power and more revenue raising to the European Parliament." I cannot wait for the hon. Gentleman to go through the 48 or more points contained in the SDP manifesto.

Sir John Biggs-Davision

Is it not ironic that this document from the SDP-Liberal alliance should be covered in red, white and blue—our national colours—when within it are proposals utterly to abandon the sovereignty of Britain?

Mr. Spicer

I can only agree with my hon. Friend.

The alliance also wishes to increase the powers of the Commission. The Commission is a secretariat, and the power rests in the hands of the politicians rather than a secretariat, especially one that has not exactly covered itself with glory over the last 10 years.

Today has seen the launch of the Conservative manifesto for the European elections on 14 June. Within that manifesto is contained a genuine programme which is supportive of our membership of the European Community in every possible way. It does not support a continuation of the stalemate and drift which we have experienced for so long within the European Community.

That manifesto, and the support given to it by the Prime Minister and the Conservative party, points to the high road for Europe. Labour Members made it clear that they want to follow the low road, but we want to follow the high road. Of course we accept the imperfections, but we hold fast to the concept of a community of nation states, and above all we support the Prime Minister's total commitment to a real community playing a major role in helping our unhappy world to resolve at least some of its problems. Within such a community there is a vital role for a strong British voice. We must therefore remain in Europe, and I therefore beg the House to support my motion.

4.24 pm

Mr. Tam Dalyell (Linlithgow)

When I was a member of the indirectly-elected European Parliament, I was one of those who was less than enchanted by the whole concept of direct elections, and indeed by what was then the Patijn committee report. At the time, my friend Schelto Patijn was unable to persuade my constituency party about the value of direct elections. I wish that we could put the clock back, because, as an unreconstructed pro-European, I think that there is a strong case for individuals from the Folketing, the Bundestag, the House of Commons and other Parliaments being members of a European Assembly or Parliament on a rotary basis.

As one who benefited from an enormously expensive education of being in a European Assembly or Parliament, I believe that the indirectly-elected Parliament had a great deal to be said for it. In my case, and in many others, it would have been improper had we spent longer than four years in that Parliament, given that we were sent by the House of Commons. It was, however, an enormously valuable experience for which I shall always be grateful. I should like it to have been extended to many of our colleagues on a rotary basis.

I am aware that CERN is not the direct concern of the European Community as such, but, in view of what our European partners are doing on the financing of particle physics, is there not a case for financing extremely expensive scientific collaboration out of a Foreign Office Vote rather than the science budget? The fact that we must now contribute more to CERN than was estimated because of revaluation—which is creating mayhem with the science Vote—means that there is an overwhelming argument for Britain doing as other countries have done. We should therefore consider paying our contribution and subscription to CERN at Geneva out of a Foreign Office Vote rather than making a mess of the science Vote, much to the upset of many colleagues in less expensive scientific areas.

Of direct relevance to the Community is the financing of JET. I have been to Culham, and a remarkable experience it is with its 57ft-wide concrete walls and so on. I know that the hon. Member for Sheffield, Hallam (Sir J. Osborn) is interested in these matters, because he and I were members of the Energy Committee that fought so hard to have JET located in Britain rather than in Italy or at Garching in Germany. Are the Government satisfied with the way in which JET places its orders in the various countries of the Community? Should there not be greater ordering from British industry, which is capable of helping JET, as has happened in other European countries where institutions of a similar nature have been placed?

I am told that the British play much fairer cricket in relation to orders that go from JET to other members of the Community than they do when EEC institutions in their countries order in Britain. Therefore, I have asked a general question of some concern.

How do the Government view the progress of ESPRIT? There have been other debates, of a pending nature, in the House on that subject, but it is only fair, in a debate on the future of the Community, to ask for an assessment of how ESPRIT is going.

I realise that is a grey area, but I must ask the same question of the European Micro-Biology Organisation, of which Dr. Kendrew was the first director. Again, a good deal of Euro money is involved.

When talking about the future of the Community it is important to know whether the Government think that the British taxpayer's contribution is appropriate—[Interruption.] I do not know what the merriment is, but I am discussing important and concrete matters. I do not know why my hon. Friend the Member for Carrick, Cunmock and Doon Valley (Mr. Foulkes) is so merry. Many hon. Members will probably talk about the CAP, but my remarks are meant constructively, even if some of my hon. Friends are not particularly interested.

Mr Foulkes

I am interested.

Mr. Dalyell

I apologise to my hon. Friend, as I must have misinterpreted the cause of his merriment. Nevertheless, these are issues that concern many people.

Finally, I return to the subject that the hon. Member for Dorset, West (Mr. Spicer) raised in his opening speech, to end user certificates, and to the Community's future in the supply of arms not only to South America but to other countries where they may, in certain circumstances, be used against the forces of member states. It is a very wide question, and I shall remind the House of the history behind it. In the Falklands conflict, there can be no doubt that, for all the protestations of the Heads of Government in France, Aerospatiale and Dassault went merrily on supplying the most lethal weapons of war.

Although a great song and dance was made about the fact that a team from Aerospatiale and Dassault did not go from Bourges to to Bahia Blanca in Argentina, we now know just what did happen. A seven-hour telephone call was made, during which it was possible for the Aerospatiale and Dassault engineers to explain to their colleague, Mr. Hervé Colin—the facts are very detailed and can be proven—how to marry an Exocet to the wing of an aircraft. Engineers can explain such things when talking to one another, and there can be no question whatever that the French armaments manufacturers went through the procedure in considerable detail, much to the detriment of HMS Sheffield, HMS Coventry, the Atlantic Conveyor, the Ardent, the Antelope and other ships. What sort of co-operation was it that allowed that to happen? That incident is just one reason why we and our European partners must look into the whole question of the mutual control of armaments.

I am not parading my views on the Falklands in this debate, but I should like to consider one other aspect that relates not to the past, but to the future. During the past year, and indeed this year, the formidable weapons manufacturers Blohm and Voss have been making four Meko 360 frigates, powered by Rolls-Royce engines, with David Brown gear boxes and Decca navigation equipment, made by us. Those are formidable weapons. If we do not do something to negotiate with the infant and vulnerable civilian Government in Argentina, they could—not next year, but the year after, or the year after that—be used against us, Heaven help us, in a replay of uncertain outcome which would certainly involve more bloodshed. Given that Blohm and Voss are members of the Community, it must raise very serious questions if they go ahead and sell such weaponry as submarines to Argentina. It could be used against British forces. Those questions could be repeated over the sale of Oto—Melara mines—[Interruption.] Does my hon. Friend the Member for Livingston (Mr. Cook) wish to intervene?

Mr. Robin Cook (Livingston)

I was agreeing with my hon. Friend.

Mr. Dalyell

I am glad to have my hon. Friend's agreement on such an important point. I do not wish to labour it, but regardless of views and of anybody's hobby horse, obsession or anything of that kind, it behoves us all, when talking about the future of the Community, to ask ourselves whether we should have some common policy on arms sales for end user certificates. I welcome the opportunity afforded by the hon. Member for Dorset, West to air that point. I could go on, but other hon. Members wish to speak.

4.35 pm

Mr. George Gardiner (Reigate)

I congratulate my hon. Friend the Member for Dorset, West (Mr. Spicer) on raising this subject for debate today, which marks. at least for the major parties, the start of the campaign for elections to the European Parliament on 14 June.

Comment has already been made on the very sparse attendance of Opposition Members. I suppose that the Scottish National Party can claim to be very well represented, as one SNP Member is present. We note with interest that the alliance has managed to find just one hon. Member to contribute to the debate. However, I do not know what we are to make of the main Opposition party. I see that there are now four Labour Members in the Chamber, but throughout most of the speech of the hon. Member for Linlithgow (Mr. Dalyell) only three Labour Members were present. The fact that that has happened on the day when the Labour party has chosen to launch its European election manifesto is quite extraordinary. I can only conclude from the evidence that the Labour party wants to run a quiet low-key campaign. However, I very much hope that it fails in that objective.

Mr. Tony Baldry (Banbury)

Does it not appear that the parliamentary Labour party now seems to be working a three-day week? Labour Members are never here on Mondays or Fridays.

Mr. Gardiner

My hon. Friend has made an interesting point.

I said that I hoped that the Labour party's obvious endeavour to play down the whole thing would fail, for the simple reason that I believe it important that the issues involved in our membership of the EC should be discussed at regular intervals with, and before, the voters. There was very lively and deep public discussion in 1975, at the time of the referendum on Community membership. Of course, it resulted in a very convincing majority being recorded in favour of our continued membership. Since then, we have embarked on a pattern of regular elections to the European Parliament. Regardless of arguments over the precise merits of individual candidates—which are, of course very important—it is even more important that the British public should be involved, at periodic intervals—

Mr. Foulkes

The Tory Members are all leaving.

Mr. Gardiner

The hon. Gentleman may laugh at the fact that two of my hon. Friends are on their way out of the Chamber, but his energies would be better devoted to drumming up some Labour Members to attend the debate. [Interruption.] We shall have to see what he can to do to refill the Chamber when he speaks. So far, he has lamentably failed to fill it.

It is important to involve the British public in the argument about what kind of Community we want and are working towards. The majority of my hon. Friends regard the European Community as a community of nation states. I have never deviated from that view. We reject the federalist dreams held by some Members of the alliance and the dreams of those who look back to memories of an imperial past. We also reject the dreams of some of those who are so poorly represented in the Chamber today of a self-contained Socialist republic in Europe insulated from the realities of the world at large.

I make no apology for repeating what my hon. Friend the Member for Dorset, West said about all of us being in the European Community because it is in our interests. My hon. Friend stressed that it is a vital British interest that we should be in the Community and participating fully in it. It is comparable to our need and interest as full participating members of the North Atlantic Treaty Organisation.

I see no conflict between a commitment to the cause of European co-operation and fighting our own corner in the Community whenever British interests are at stake. That consistently has been the philosophy adopted by our Prime Minister and Government.

I have never been in any doubt that our driving purpose within the European Community has been and remains to seek its reform. The European Community, even as envisaged in the Treaty of Rome, cannot be static. Many circumstances change in Europe and outside. We must adapt ourselves, and strengthen ourselves collectively, to deal with the changes. When the Community was established it was obvious to all the original participants that great advantages were to be gained from the creation of a single market free of internal tariff barriers. The value of that was demonstrated early in the Community's existence. Since we have been a member, we have demonstrated that advantage within our shores.

Given the changing patterns of trade in the world, and the new emerging industries and technologies, that argument has even more force. Our purpose is strengthened by seeking to extend the free trade concept and to remove non-tariff barriers within the Community.

How can anyone imagine that there would be any future for the sunrise industries—for electronics and information technology—if we were aside from the remainder of the Community or, indeed, if the whole of Western Europe were divided within itself? Our sunrise industries have to face competition from the vast markets of the United States and Japan.

Mr. Leighton

How do smaller countries such as Norway, Austria and Switzerland seem to do rather better than we do without being members of the Community?

Mr. Gardiner

I do not know by what test the hon. Member for Newham, North-East (Mr. Leighton) claims that such countries "do rather better than" us. They do not stand a strong chance of attracting international investment or even national investment while they are outside the Market, which provides a large home base for industrial and commercial activity.

Our continuing cause in Europe must be reform. We have heard at length and regularly in the House of our attempts to secure reform of the budgetary contributions mechanism. We have heard a great deal about attempts to secure reform of the common agricultural policy, which is painfully slow in coming. I shall not dwell on those matters today because so much time has already been devoted to them in the House and elsewhere.

However, other reforms are as important as those that I have mentioned, though they receive less public attention. I hope that the European election campaign, upon which we are embarking today, will redirect attention to the need for such reforms. We want not only a Common Market in terms of a Community without internal tariff barriers, but a genuinely and completely free trading community. We do not accept the need for delays that have occurred at frontiers over recent years. We do not accept that it is necessary to endure the mass and tangles of red tape involved in moving goods and sometimes people across frontiers in the Community. It is not acceptable that the invisible barriers erected by member states to restrict public purchasing to their own nationally-based firms should be continued. It is not acceptable that the movement of individual citizens across the countries of western Europe should remain as difficult and costly as it is

Industry in Britain still does not derive the full potential benefit from European Community membership that it has a right to demand. Our financial and commercial institutions are still not enjoying anything like the free market throughout Europe that they have a right to expect. British insurance, for example, must be freely available throughout the Community. Surely we have a right to demand that and we must work for it.

Individual citizens still have many additional benefits to gain from the Community beyond the employment prospects created for them by the availability of that large home market. I am glad to see the Government endeavouring to bring down air fares across western Europe. The present cartel arrangements should have no place in the European Community of 1984 and beyond.

Such reforms must rank high in our priorities. They should rank as high as budgetary reform and the continuing curtailment and control of CAP spending. I am glad to note that the Conservative party manifesto launched today makes a number of specific and important commitments in that direction. I hope that the reform campaign will gain impetus through the forthcoming elections to the European Parliament. A great deal has been achieved in western Europe and within the Community in recent years, but, heaven knows, there is still so much to be done.

I urge the Government to present with the fullest vigour their programme for furthering those reforms.

4.50 pm

Mr. Donald Stewart (Western Isles)

The hon. Member for Dorset, West (Mr. Spicer) was enthusiastic about the Common Market. However, as he developed his speech he made some caveats. It was interesting to note that those caveats were repeated on an even greater scale by the hon. Member for Reigate (Mr. Gardiner). As he said, heaven knows, there is so much still waiting to be changed or improved.

It is encouraging that both hon. Members strongly suggested that the EC is a community of nation states. It shows that both of them—and no doubt many of their hon. Friends—are beginning to realise that the United Kingdom's position would be difficult, to put it mildly, if we were merged into the one super-state that some of the more enthusiastic Community supporters were proposing a year or two ago.

As I have believed from the beginning, United Kingdom membership of the Community has resulted in an erosion of the sovereignty of this House. All the evidence shows that that has happened on a large scale.

Mr. Jim Spicer

The right hon. Gentleman says that a few years ago some hon. Members were advocating a closer federal state. Does he accept that at least two parties in the House are strong advocates of a federal Europe, with more power to the centre? Will he enlarge upon that and say which two parties are involved?

Mr. Stewart

I accept the hon. Gentleman's suggestion that I should fight on more than one front at one time. I agree that a number of members of the SDP and Liberal parties—if not all—are enthusiastic advocates of a super-state. Unfortunately, those parties are led by Euro-fanatics whose enthusiasm is greater even than that of the hon. Member for Dorset, West. It would be disastrous to proceed down that road, and any suggestion that we should do so must be repudiated.

I do not wish to go into the details of what we have paid in and what we have received from the EC, despite all the fantastic forecasts about how good the benefits would be. A number of hon. Members threaten that if Britain withdraws from the EC the effects on employment would be disastrous. However, those threats are coming from the very same people who said that we had to become a member of the Community or our employment prospects would suffer. I cannot agree with their arguments, which they have failed to prove.

The hon. Member for Dorset, West said that membership of the EC would keep the peace. I strongly reject that argument. The position would have been no different if the EEC had not been formed. There are no grounds for believing that the Germans would have gone to war with their European neighbours during the years since 1945. In any case, the protection of Europe is a matter for NATO.

It has been claimed that the British people are still enthusiastic about the EEC, but I see not the slightest evidence to support that. In fact, the polls show clearly that the people are wholly disillusioned, that they have no enthusiasm for the Community and, indeed, that they never had any enthusiasm.

Membership of the EEC has resulted in interference in the rights of sovereign states. Hon. Members claim that we now have a common fisheries policy, and that that is a great advance. We have a 12-mile limit—although it is only six miles around my constituency. Two years ago, some Conservative Members were saying that if we did not get a 50-mile limit that would be a sell-out for Britain's fishermen. Yet now they are content with a 12-mile limit. If we were outside the EEC, we would have a 200-mile limit as of right under international law.

Reference has been made to the CAP. Everyone deplores that policy. Every hon. Member who speaks about the Common Market, however dedicated to it, says that the CAP must be reformed. I have heard that said since Britain first entered the Community. When will the reform begin? It will never begin because the French will not allow that. The day reform begins, the French will be out of the EEC. I do not think that there is any prospect of real change in the CAP — a policy that has no relevance to the United Kingdom.

Mr. Baldry

The hon. Gentleman said that all hon. Members deplore the CAP. With respect, that is not true. The CAP has ensured access to secure supplies of food. What we deplore is over-production and the waste involved in that. There is a need to control surpluses.

Mr. Stewart

I shall rephrase my comments. Everyone deplores the excesses of the CAP—but over-production is part of that policy. If we were outside the EEC, we could buy food far more cheaply than we can within the Community. The EEC is responsible for the higher cost of living for United Kingdom consumers. There can be no argument about that. I agree that that can vary year by year, but the whole thrust of my argument is that, while we have been a member of the EEC, we could have bought food in the world market far more cheaply than from within the EC.

The hon. Member for Dorset, West spoke about what has been done for the Third world. That has nothing to do with the EC. Even this stingy, cheese-paring Government are contributing to the Third world. We do not need the EEC to help us in our charitable aims if the Government have it in their heart to give help. Conservative Members should be concerned that while many countries are facing famine and the inhabitants of many nations do not know what it is to have full bellies, the EEC is responsible for over-production and the waste of food. It sells its surpluses to the Russians at give-away prices—goods that many of our old-age pensioners cannot afford to buy.

The hon. Member for Newham, North-East (Mr. Leighton) said that countries outside the EC, such as Norway, Sweden and Austria, are doing far better than Britain. The hon. Member for Reigate asked how that was measured. It is measured by unemployment. Unemployment in those countries is far lower than in the United Kingdom and many Common Market countries.

Mr. Foulkes

I do not disagree with much of what the right hon. Gentleman is saying, but would he care to reconcile his criticism of the CAP and his attacks on the Community with what Mrs. Ewing, who is desperately fighting to remain as a Member of the European Parliament, said recently while I was with her on television? She strongly defended the CAP and said that Scotland was getting a great deal more out of the Community than it puts into it.

Mr. Stewart

I knew that the hon. Gentleman was waiting to get that one across because I heard what he said earlier. I did not hear the broadcast to which he refers, but I stand by everything that I have said, regardless of what anybody else is saying about the EEC and the CAP. The Labour party has enough internal problems without trying to stir them up in any other party. The hon. Gentleman might not have to move off the Front Bench to stir up trouble in his party, as there are only three Labour Members present. However, I might be prepared to stir up trouble in the Conservative party.

The Minister of State, Foreign and Commonwealth Office (Mr. Malcolm Rifkind)

This is an interesting point. The right hon. Gentleman will be aware that, after the last general election, the Scottish National party and its leader changed their previous policy of withdrawal from the Community and now support Scotland, and the rest of the United Kingdom, remaining within the Community. Does the right hon. Gentleman now hold that view?

Mr. Stewart

We are all obliged to go by the policies of our parties. However, I was completely opposed to the EEC at its conception, I am still opposed, and I see no arguments that will make me change my mind.

5.2 pm

Sir John Osborn (Sheffield, Hallam)

This is a valuable debate. The European scene has always had its parallel with a small urban community anywhere in Britain. It makes sense to have a working relationship with one's neighbours in the same street and the same area—in European terms with the countries such as France, Germany and Italy. We must also recognise that in small communities, particularly in Britain, there are children, cousins, nephews and nieces who have dispersed far and wide — in British terms to Australia, New Zealand, Canada and the United States. The feature there is that people born of different cultures have found a way of getting together much more readily than has been possible in Europe, because of its traditions. The impact of time and distance means that those who have left the home countries of Europe find their family links far stretched. Therefore, it is necessary to develop relations with neighbours in a different economic world from that which existed 50 to 100 years ago.

I congratulate my hon. Friend the Member for Dorset, West (Mr. Spicer) on the way in which he presented the motion. Some 40 years ago I was in the services and I remember the Normandy landings, because I obtained my commission about that time. Since then I have become a more convinced European, although I must confess that, as at times I find it a little difficult to get on with my neighbours in my community, so at times it is a little difficult to get on with one's neighbours in the European Economic Community.

This is an important day, because today the parties launch their manifestos for the European elections. I have been impressed by some of the advertisements saying that what has happened in the past—such as world war I in which my father fought—should not happen again. I was also impressed this weekend when I went round the bunker from which Churchill conducted world war 2. Only last week, on my way back from Strasbourg, I drove through battlefields which brought home to me how important it is that we should live with our neighbours in peace if at all possible. I accept that there are economic challenges from the United States of America and other challenges from the East, from the Soviet Union. It is necessary to meet these challenges, but I prefer to meet them working together with my neighbours, rather than in isolation.

I remember Churchill's Zurich speech, because I was demobbed at about that time. I remember the setting up of the Council of Europe, the European Coal and Steel Community and Euratom. Like my hon. Friend the Member for Dorset, West, for 10 or 12 years in industry and then in politics, I have lived with the growth of these entities which are bringing the citizens of Europe together. In 1973 I joined the Council of Europe. From 1975, as the hon. Member for Linlithgow (Mr. Dalyell) and my hon. Friend the Member for Dorset, West knows, we were in the European Parliament together until 1979. My background is that of energy policy, industry, regional and overseas development. I was able to see that working together on these issues meant that MEPs could identify targets and work together more effectively. Long may that continue in the European institutions, which I have spoken about.

After the Treaty of Rome and in the early 1960s, I visited Bonn and the other capitals of Europe, meeting the equivalents of the CBI, the chambers of commerce and other businesses, and working out, as a result of that initiative, how better the British people could work with their European neighbours. In the late 1970s my hon. Friend the Member for Dorset, West and I had long debates about what shape direct elections should take in Britain. If his idea of regional representation had worked, I might have been able to spend the last four or five years meeting the hon. Member for Linlithgow's point about doing the dual mandate, as my hon. Friend the Member for Dorset, West has. However, as there is a constituency, or Euro constituency, basis for the elections in Great Britain, the dual mandate has been made almost impossible. I share my hon. Friend's view that it is necessary to develop a closer dialogue with the newly elected Members of the European Parliament because the role of a national Parliament is just like that of the separate states in the United States of America, and is all important.

As I go round the countries of Europe, I see that the forces of protectionism and nationalism are greater. That is all the more reason why I should back responsible representation from this country to the European Parliament, and not representation by those who want to pull it apart. I do not want to see a repetition of 1939.

Therefore, my view of the future must be based on the past. I had some sympathy with the concept of European confederalism, when it came to direct elections. There is no doubt that Members of the European Parliament became sensitive to the relationship of separate states to the Federal Government in Washington, or the central Government in Canada or Australia. The independent state Parliaments in these nations have a separate entity, and there is some parallel in the possible growth of Europe on a similar basis. However, people in European countries have a tradition of different languages, history and cultures, and to bring the peoples together rapidly is impossible.

The Council of Europe was created in the early 1950s and some countries are still in the European Free Trade Association. As a member of the Economics Committee of the Council of Europe, I still have regular dialogues with the EFTA countries. I have seen the Community grow from six to 10 in number and I hope that it will grow to 12 in a short period of time.

I hope to be visiting Switzerland, where I have many friends. Through the Council of Europe I frequently meet my opposite numbers in other Parliaments, for example those of Sweden and Austria. When Britain came into the Community, I gave the Council of Europe 25 years, perhaps, and the Western European Union 15 years. The Swiss hang on to their independence, but value dialogue with the Community, although the size of the Community will increase. Therefore, Europe is a mixture of different institutions, but today we are talking about the future of the Common Market, which I want to grow stronger and to expand.

I could deal with many issues. The common agricultural policy has taken up far too much of the European budget. I welcome the positive initiatives by the Prime Minister. I regret the lack of an energy policy. When Britain first discovered North sea gas and oil and were not aware that Norway would have some, too many kept on saying, "It is our gas and our oil." I remember that the right hon. Member for Chesterfield (Mr. Benn) and his predecessor drove fellow European partners to look to Siberia and elsewhere for supplies, when they could have been encouraged to buy them in this country.

There is an amendment on own resources. The hon. Member for Linlithgow referred to the work that has been done on energy policy at Culham. I hope that my hon. Friend the Minister will refer to that when he winds up the debate. Those are costly ventures, in which it is much better to pool resources and work together. Culham, like CERN, is one such example, if the project is justified.

My hon. Friend the Member for Dorset, West referred to the market in the Community. I recently had talks with the CBI and others. Business men value the increased trade in the Community. About 2 million to 2.5 million jobs in this country depend on trade with the Common Market. Let us remember that it is better to trade with our neighbours. I have had experience of selling to "our" cousins who have gone to distant lands, and they have found ways, with better resources and raw materials, of making some of the things which I, for one, used to sell to them.

I welcome the debate and the initiative taken by the Conservative Government and Ministers to stay in Europe and make Europe work better for the members of the Community as well as residents in our own countries. Therefore, I shall support candidates with that point of view. My hon. Friend the Member for Dorset, West, referred to Brian Key. Let us bear it in mind that my successor in Sheffield is now the hon. Member for Sheffield, Central (Mr. Caborn). He tried to help the Sheffield steel industry, while at the same time pulling down the Community. He created more enemies than friends. Hostility to the Community did my city a bad rather than a good turn. However, the hon. Gentleman was in the European Parliament at the time, when I was not, and he could better substantiate what I have said.

I shall support the Conservative candidate in my area, knowing full well that he and many other Conservative candidates will want to go on building a more powerful and better Europe so that the standards of living of all of us are raised.

5.14 pm

Mr. David Penhaligon (Truro)

Bar a few months, I have been a Member of the House for 10 years. I have listened, as all of us have done, even if not collectively, to the various debates on the European Community. There has been a common thread in those debates. The various posturings of the two Front Benches, are best summed up by the expression "moan, groan and whinge". For a decade the House has listened to the Front Benches compete to see who can be the most aggressive, awkward and demanding.

Two great ploys have dominated the issue since I have been in the House. There was a renegotiation while the Labour party was in power, and now the Prime Minister is demanding our money back. I sometimes wonder which of those two ploys has been least successful—there have been successes in neither case. If anything, the Labour Government just had it in terms of lack of success.

The manifestos have all been issued. The other two parties have a slight advantage over me because they issued theirs today, so I have not had a chance to read them. We issued our manifesto a fortnight ago, so the other two parties have had a chance to read ours. I thought that bringing ours out early was a brilliant first strike, but I am beginning to reflect on that in depth. However, I shall leave that matter aside.

In effect, the European election campaign started today. I presume that that was part of the motive—although not dishonourable—of the hon. Member for Dorset, West (Mr. Spicer) in tabling the motion for debate. He referred to my party's posture on Europe. I hope that what he said does not become the norm in the election campaign. If I said that his comments were not exactly near the truth, that would be an understatement. The hon. Gentleman said that we wished to abolish the veto. I have a copy of our manifesto, and if the hon. Gentleman would like one I could obtain one for him. It says: The use of the veto in the Council must be severely restricted". That is vastly different from saying that the veto should be abolished. The hon. Gentleman also said that we wanted to give vast new powers to the Commission. The document actually says: The authority and accountability of the Commission must also be strengthened. We can argue about the merits of the hon. Gentleman's posture and of our posture, but let us argue the case from where we are, not from where we should like to think the other organisation is in regard to the Common Market. When someone who claims to be pro-Common Market attacks, by distortion, another group that is pro-Common Market that is nearly unforgiveable. Those of us who are pro-Common Market have enough problems without such asinine and peculiar arguments being put forward in the House.

Mr. Jim Spicer

Will the hon. Gentleman explain why he should be so defensive about his party's policy? The problem with the alliance's policy is that I can walk into 50 Euro constituencies today and hear in each one a different voice on every subject from every Euro candidate representing the alliance. For example, is it official party policy to support the entry of Spain and Portugal into the Community? Only last week, the hon. Gentleman's colleague, the hon. Member for Yeovil (Mr. Ashdown), said that he did not support that. It is of vital importance to the future of our Community. The hon. Gentleman might say that we are carping and criticising when we talk about his party's policy and ask what it is, but where do we begin to have a proper debate in the election?

Mr. Penhaligon

I recommend that the hon. Gentleman sticks to interventions because he delivers them with much more aggression and conviction than his speeches. We all know that the alliance's official policy is that Spain and Portugal should be members of the Common Market. The hon. Gentleman said that he could walk into 50 different constituencies and find 50 different policies. I assume that that means that 28 are in solid agreement, so that puts us in a stronger position than any other party.

The hon. Gentleman's third criticism was that we would like the European Parliament to be responsible for raising at least some of its own finance. I accept that that is a difference between us. I should like the European Parliament to be responsible for raising some of the money that it spends. If it did, the election on 14 June would be a more meaningful operation than it is. The people who were seeking a mandate from the electorate would be those who were asking for money to spend on projects. The election next month will not be satisfactory in many ways. We all know that candidates can put forward various schemes—with which we may or may not agree—but they are not the same people who are responsible for raising the funds. If there is disagreement, so be it; that is not something of which I am ashamed.

The most obvious issue facing Europe has hardly been touched on in the debate. Thirteen million people in the European Community are unemployed. There must be many countries in the United Nations with a population of fewer than 13 million. One thing that we have learnt in the past decade is that there is not now a European country with enough economic muscle to solve its unemployment problem in splendid isolation. The efforts of the Labour Government between 1974 and 1979 manifestly did not work, and the efforts of M. Mitterrand in France have been no more successful.

However, a study of trading patterns within Europe clearly demonstrates that although—because of imports — each separate country is vulnerable if it goes for growth, Europe collectively is not as vulnerable. I regret the fact that the suggestion by the European Trade Union Confederation that European countries should aim for a modest 1 per cent. reflation was rejected out of hand. Such a policy within Europe could begin to help the 13 million unemployed.

Mr. Teddy Taylor (Southend, East)

If the hon. Gentleman believes that only huge and powerful state organisations can provide full employment, why is there high unemployment in the Common Market and less than 3 per cent. unemployment in Austria, Norway and Sweden, which have not joined it?

Mr. Penhaligon

I do not recall saying that only powerful economies can maintain low unemployment. I said that there is not an economy in Europe that is currently strong enough to reflate within its own boundaries without being overrun by the automatic repercussions of reflation which are associated with our dependence on other countries in terms of imports and exports.

Those who are pro-Market and those who are antiMarket—and, indeed, everybody else—agree that the CAP needs reforming. So it does. However, it is worthwhile to reflect on how it came to be in such need. My view—I am not adamant about it, and would be willing to discuss it—is that the downfall of the CAP was caused not so much by the original concept as by the enormous effect of technology on agricultural production during the period of the implementation of the policy. The amount of corn or milk that can be produced on an acre or a hectare has increased massively. The CAP is under threat today not because of a failure of the original concept but because it has been overwhelmed by its own success. However, whatever the causes may be, I accept that there is a need for substantial reform.

Mr. Robin Cook

I am fascinated by the hon. Gentleman's explanation of the problems of the CAP. If the problem is the massive increase in the amount of grain that can be grown on a piece of ground, why has there been no reduction in price? During the period of that massive increase, there has been a massive increase in the price of grain and the creation of massive surpluses that have to be paid for by the EEC taxpayer.

Mr. Penhaligon

I always like to hear the pure meat of the capitalist system from Opposition Front Bench spokesmen, who have no faith in it. As the hon. Gentleman knows, the cause of the massive increase in the production of grain is that farmers have been farming against a constant price. They have not been farming in a free market. Does the hon. Gentleman suggest that the agricultural community of this country should re-enter a free market in grain?

I suspect that the hon. Gentleman and I are agreed that over the past few years we have not seen the gradual reduction in the grain price that manifestly should have taken place. I am talking not about a dramatic sea change — a reduction of 20 or 30 per cent. overnight— but about a gradual reduction in real terms. In the past two or three years a downward trend has been discernible, but it has not been of the substance that is required.

The Government would claim that they have made great progress in the reduction of the milk surplus within Europe. The milk surplus within Europe had become so large that something had to be done about it. I do not deny that, and I have never told my farming community in the far south-west anything else. However, I would not have expected the Minister of Agriculture, Fisheries and Food to return to this House to try to justify a near-surrender. We could not have achieved a worse agreement on milk if we had corresponded by telex. Indeed, telexes might have been checked before being posted and might therefore have been somewhat more specific.

I cannot understand how the Government managed to agree that the British milk farmer must reduce his output by twice as much as the French milk farmer when, at best, we are more or less self-sufficient in milk production. That is beyond me. I have asked that question twice, and received the same answer on both occasions.

The Minister claims a triumph for his abilities to negotiate, on the ground that—I forget the exact words — he has persuaded the French to include within the European milk agreement off-farm sales from French farms and the milk produced by farms with fewer than nine cows. That is the remarkable achievement of which the Minister is so proud, and that is why we are reducing our milk figure by twice as much as the French. What sort of agreement would it have been if all the farms with fewer than nine cows had not been counted, and all the off-farm sales had been allowed? Reform of the CAP will not be achieved by surrender, and I tell the Minister of State that the Government have been precious close to surrender.

I am sorry that the right hon. Member for Western Isles (Mr. Stewart) has left the Chamber, because he will not hear me say that one of the Community's great positive achievements has been in fishing. However, as my hon. Friend the Member for Orkney and Shetland (Mr. Wallace) is still here, I shall be careful about what I say.

The European Community has made significant progress towards a sensible fishing policy for Europe. The process has not been easy, and the Community's decisions so far have not been overwhelmingly popular. But progress has been made, and the House should welcome that progress if it wishes this country's fishing industry to prosper.

All the accusations levelled against the Community can be made with reference to fishing, and the fishing context demonstrates what nonsense most of them are. People talk about the sovereignty of this House and about holding and maintaining our own resources. The main fish in my region is, or used to be, the mackerel. During the past decade, the mackerel has been severely overfished. Most of the overfishing has been done by Scottish fishermen —not by fishermen from France, Belgium, Germany or any other Community country.

Those who try to argue the case for the sovereignty of this House refuse to recognise one point. Mackerel are delightful fish but they have one annoying trait. At the moment when they are born, they do not know whether they are French, Cornish, English or indeed German. They have a tendency to swim around. When small, they prefer the coast of France, and when larger they prefer the coast of Cornwall. It is obvious that my fishermen would prefer to have exclusive rights for the catching of adult mackerel. If that were the case, however, the French would say that if they are not allowed to catch any adult mackerel they will be forced to catch the tiddlers. Only a European Community that works together can begin to face such problems and get the agreements necessary to maintain stocks.

Enforcement of such a policy should be carried out to a far greater extent by the communities that are affected by it. Responsibility for enforcing fish conservation rules must be given to those who rely on the fish for their livelihoods. They are the only people who will demonstrate the necessary interest and determination.

The next month will be interesting. Right hon. and hon. Members know that we are occasionally pushed not to answer a question quite as clearly or concisely as the person asking the question desires. Like other right hon. and hon. Members, I would deny that that happens, but we all know that questions are sometimes embarrassing. It will be fascinating to see whether the Labour party can fight the entire election campaign on detailed policy—we know how much research the hon. Member for Livingston (Mr. Cook) has put in—without answering whether the Labour party wants Britain to be a member of the Common Market. That is a key question. I see that the hon. Member for Livingston shakes his head — he obviously does not agree that that issue is key to the election.

Mr. Foulkes

It is just a twitch.

Mr. Penhaligon

Oh. The hon. Member for Livingston has merely developed a twitch so I withdraw my statement. Perhaps I was beginning to strike a nerve. If the Labour party manages to go for an entire month without answering that question, it might yet achieve office again. I hope that it will be screwed down and that people will ask that question repeatedly because without an answer all the detailed policy is so much bunkum and nonsense, and the hon. Member for Livingston is quite intelligent enough to know it.

5.32 pm

Mr. Teddy Taylor (Southend, East)

Everyone has congratulated my hon. Friend the Member for Dorset, West (Mr. Spicer) on the dramatic timing of this import ant debate—just before these crucial elections. It is sad that only one Labour Back Bencher and not one Social Democratic Member is present. It is not just a case of the laziness of Opposition Members, as most of the general public would not notice much difference if the European Parliament or Assembly disappeared tomorrow.

The Labour party is in difficulties because it is having to argue for capitalism if it argues against the CAP, and some of my right hon. and hon. Friends are in difficulty, in arguing for the Common Market, in using arguments which are much the same as those adduced for the retention of the Greater London council. If they understand it, most voters will reject outright the Eurofanaticism of the Social Democratic-Liberal alliance. I believe that they will vote against Labour because the Labour party has admitted that it has not achieved anything in the Common Market through renegotiations. I believe that the public will be inclined to vote Conservative because we give the impression that we know something about these complicated issues and because the Prime Minister has undoubtedly achieved a great deal over the rebate.

In the election campaign I hope that all of us, especially alliance Members and even some of my hon. Friends, will stop kidding ourselves that success exists when it does not. For example, we have heard much about how the Common Market prevents Britain from going to war with Germany. Most of us realise that the peace of Europe is maintained, not by the French army or the German navy or the Italian air force, but by the NATO Alliance and America's nuclear umbrella. That is the key to our defence and I fear that it is being undermined by disputes between the EEC and the United States about, for example, food dumping. That might undermine the American commitment to Europe.

Sir Anthony Meyer (Clywd, North-West)

My hon. Friend is right in saying that the Common Market has not prevented war with Germany, but he must be aware of the threat that could arise if Germany were not tied into a community in which it found some fulfilment. If it were not so tied in, it might seek an alliance with the Soviet Union to secure reunification, which might be the objective of any German Government. It is in that respect that the EC contributes to the unity of Europe.

Mr. Taylor

We are all hearing new ideas. I should have thought that West Germany's participation in NATO was greater security against that country trying to rejoin East Germany. I shall think about my hon. Friend's point, as is always the case with his most interesting arguments.

Foreign policy has been given as a major reason for the bonus that we have. I am always astonished at the utter lack of achievement in foreign policy. After the problem over Afghanistan I awaited with bated breath a common statement from the Common Market. When, after four days, it came out, it was less solid than that made the previous day by the Italian Communist party.

We should stop kidding ourselves about trade. We constantly hear of the great increase in and bonus of trade with the Common Market. It is obvious, however, that the erection of a protective tariff wall around a group of nations will result in more trade within that group. We cannot avoid the simple fact that we always used to have a profit in trade in manufactured goods with the Common Market, but now have a horrendous loss of £8 billion. In a nutshell, for every £3 worth of goods that the Common Market sends us, we send it £2 worth.

Using similar calculations to those employed by the Foreign Office in regard to Japanese trade, our trade with the Common Market has meant a loss of about 800,000 jobs. I am not suggesting that the dramatic change has been caused by the Common Market's economic policies. Part of the reason is that we have become peripheral, and another is that ours is the only petrocurrency in a protected market. It is silly to argue that we have achieved a miracle in trade when in fact we have had a disaster. The sad fact is that our share of the EEC's market in manufactured goods is now less than it was before we joined. Whereas before we joined it was 6.3 per cent. it is now 6.1 per cent.

Nor should we kid ourselves about jobs. Many of my right hon. and hon. Friends might have been interested to read in heavy and popular newspapers the dramatic story of firms such as Standard Telephones and Cables Ltd. and Hoover Ltd. which rushed to Britain when we joined the Common Market, and started to invest. Some of those firms have operated successfully in Britain since before the Boer war. We have had the sad story of steel. We have smashed our jobs and capacity, while others have made promises. We should stop the Eurononsense about, for example, investment. How many times have we read that amazing statement that 40 per cent. of Japan's investment in Europe comes to Britain? In fact, it does not. In 1980 the figure was 40 per cent. but we are not told that it was 80 per cent. in the year that we joined and that it is now just 12 per cent. There is a danger of our misleading ourselves about basic facts.

We are also misleading ourselves about the CAP. We talk about how we can reform the policy, but we know that at the Stuttgart conference everyone agreed that we would not even try to reform it; all that we will seek are modifications and adjustments. Alliance Members talk about wanting to reform the CAP, but I wish that they would tell us how they intend to do it. The plain fact is that, post-Stuttgart, there will be no reform, but merely modifications and adjustments.

We should also stop kidding ourselves about the EEC being a force for free trade. As a small trading nation, like Japan, we want free trade. I often wonder whether those who support the EEC think that it would help Japan to form a common market with China. We see the trade barriers evading the GATT and coming round through the back door. For example, we have made ridiculous agreements with Japan on curbing imports. We have said to the Japanese, "Please send us only the same number of videos as last year, but you must charge us at least £50 more for them." We repeatedly see the introduction of health and safety regulations which have no purpose other than keeping out Third world trade.

I wish that we would stop kidding ourselves and admit the simple fact that our experience since joining the Common Market has been a disappointment. We cannot blame the Common Market, because we cannot know what would have happened if we had stayed out, but we know that the ridiculous forecasts made by hon. Members of all parties that we would have more jobs, higher pensions and more investment have proved false.

I make an appeal for the future. No matter what we do about the Common Market and the CAP—and I very much doubt whether the policy will be reformed — I hope that we can all agree that we should stop dumping food on the world market. We make fun of some of the things that happen. The amount of food sent to the Soviet Union has soared since this Government came to power —up by 600 per cent. We send 146,000 tonnes of food to the Eastern bloc every week. We sell them wine at 7p a litre, butter at 53p a pound, flour at 5p a pound, sugar at 5p a pound and beef at 40p a pound.

I had lunch today with some Southend butchers, who said that they found it difficult to sell beef at £2.50 a pound because demand was going down. I am sure that demand would soar if we allowed our people to get the beef at the same price as the Russians. However, that is a minor issue.

If we care about the Third world—and we have all been handing round envelopes for Christian Aid to show our desire to help the Third world—we must abandon the policy of food dumping, which is causing distress, hardship, famine, hunger and death in the Third world. We are dumping food at knock-down prices while poor countries are struggling to get a decent price for their own food.

Mr. Richard Shepherd (Aldridge-Brownhills)

Last week was Christian Aid week, and we are all mindful of the damaging impact of the CAP on Third world economies. My hon. Friend is making a powerful analysis of Britain's position and the success or otherwise of the CAP and the Common Market. Can he explain why the problems are not perceived by the Government and why, certainly since 1979, we have not pursued some of the initiatives that he is outlining?

Has the long retreat into Europe vitiated British national policy? Rather than discussing how we came to be where we are, will my hon. Friend tell us how he sees the way out?

Mr. Taylor

I shall try to do that. There has been a strange parting of the ways, with the parties ending up on the wrong sides. Perhaps that explains the low attendance for the debate.

If I were a Socialist, I should fight tooth and nail for everything that the Common Market stands for, with its grand policies for European investment, boosting jobs and spending money all over the place on new bridges, tunnels and goodness knows what else. I can never understand why a true Socialist does not support all that. In the same way, I see a problem for Conservatives. We have ended up on the wrong side, as we did over devolution, and it will be some time before we get back into the proper frame of mind. When we do, everyone will be much happier and the Benches will be full again because we shall not be so embarrassed.

I believe passionately, and I hope that I shall have the agreement of even the most ardent supporter of CAP, that if we want our farms to produce far more food than we can consume and to pay them prices far higher than those on the world market, we can arrange that — that is our business—but we must stop kidding the economies of the Third world. If we have surpluses, by all means get rid of them by other means—we destroy cauliflowers—but we must not dump them on the world market at knockdown prices, because that is doing appalling damage to some of the poorest countries.

Could we not question whether we need all the ridiculous public expenditure involved in the Common Market's social fund, regional fund and the like? Surely there is no purpose in the Common Market undertaking such activity. Conservatives rightly question public expenditure and whether we should intervene for social reasons to spend public money. I do not understand why we should want to spend more on the Common Market, bearing in mind that every £1 that we get from the various funds costs us about £1.70. Even if we made a profit on them, why should we favour cutting public expenditure at home and extending it abroad?

I hope that we shall watch out for the danger of creating more CAPs. I appreciate, as I hope all realists appreciate, that it will be terribly difficult to get anything done about the CAP, because we need unanimous agreement to do anything about any policy. Somehow, we shall have to find ways of paying farmers for doing nothing, because that would appear to be a more effective way of dealing with the problem of surpluses.

However, whatever we do about that, surely we can all agree on the need to stop new CAPs. For example, we could solve the problems of the shipbuilding industry tomorrow by buying tankers at three times the current price, guaranteeing to take them all and deciding that if we cannot use them we will dump them in Hong Kong, Portugal or elsewhere. I am sure that there would be a rush of investment and jobs into shipbuilding, with small shipyards springing up all over the country and doing well. It would be nonsense and it would not be Conservatism, but it would reduce imports and create employment.

I fear that we are about to create another CAP in steel. I had the pleasure recently of going to see that remarkable chap Viscount Davignon, who speaks English very well and understands the problems of the steel industry. Apparently, he aims to stop all subsidies for the steel industry in Europe by the end of next year, so that we shall all be free to go our own way and compete in a free market. But if we achieve that aim, which we will not, it will not be a free market, because we will stop steel coming in from outside unless it is sold at the guide price. In other words, the countries of Europe will have a high-priced input into their manufactured goods and, because of surpluses, we shall eventually have to provide export rebates so that the steel can be dumped abroad. I am sure that Ministers and the Department of Trade and Industry will say that they do not want that to happen. but how can we avoid it if we are to have the protection that is planned within the guide price?

I believe that those who vote in the European elections will be inclined to vote Conservative. They will be right to do so, because we have achieved something, which others have not. However, on the more dramatic negotiations taking place between Prime Ministers, who are hoping to seek reforms, I hope that if it appears that there will be no agreement—as opposed to agreement being postponed until after the elections — I wonder whether my party and the Government will consider as a fall-back position the possibility of our rejoining EFTA. I can see enormous benefits flowing from that and very few losses.

Some may ask why the Common Market should give us the benefit of free trade in manufactures if we do not take on the burdens of contributing to the CAP and so on. If all the trade in Europe stopped tomorrow, Britain would not be the net loser because of the horrendous £8 billion deficit. At the end of the day such an arrangement would work out to our advantage. It would at least be a tolerable and useful fall-back position if the current negotiations on reform do not succeed.

I hope that we shall consider some of the real issues during the election campaign for the European Assembly. Having heard the dramatic, good and important speeches that have featured in the debate, I think that we shall have time for reflection. It seems that quite a few hon. Members are rather confused.

5.50 pm

Mr. Robin Cook (Livingston)

I congratulate the hon. Member for Dorset, West (Mr. Spicer)—I do not know whether I should refer to him as the hon. Member for Wessex as I am not quite sure in which capacity he wishes to be recognised—on having initiated the debate. When I read the Order Paper, I thought that I should begin by congratulating him on having arranged the debate. It was not immediately apparent to me on reading the Order Paper that from the Treasury Bench a Minister would congratulate the hon. Gentleman on having arranged the debate. It must be a historic occasion when an election campaign opens with the Government publishing their manifesto in the morning, only to find during an afternoon debate in the House that their Back Benchers are deeply divided over one of the major issues that the nation will be debating during the election campaign.

I congratulate the hon. Member for Dorset, West on having made a much better case for the European Community than is made out in the national advertisements in the name of the Conservative party. I, too, saw the advertisement to which the hon. Member for Southend, East (Mr. Taylor) referred. I was astonished to read a full page advertisement which opened with the statement that the 120 companies thereafter set out came here to be part of the world's largest trading market. Listed among the 120 companies are Hoover, Ford and Standard Telephones, which came here in 1919, 1921 and 1883, respectively. I read that one of the managers of Standard Telephones has written what he describes as "a snorter of a letter", to the chairman of the Conservative party complaining about his company being described as an "overseas company", after recently celebrating its centenary in Britain, and demanding a retraction. If the Government are inclined to publish a retraction in the nation's press and to pay for it, the rest of us will be well able to provide a long list of other examples of misleading Conservative propaganda which should also be covered by a general retraction in the nation's press.

I congratulate the hon. Member for Dorset, West on one other aspect of the debate which he brought out fully and clearly and which was confirmed by the hon. Member for Truro (Mr. Penhaligon). The hon. Member for Truro explained that if the alliance were successful in forming a majority in this place, or in Europe, this type of debate would no longer take place. Apparently it would be impossible for hon. Members to table an amendment of the sort that has been appended to the motion.

It is clear from the alliance's manifesto, as confirmed by the hon. Member for Truro, that decisions on own resources would be removed from the House and transferred to Strasbourg. That would apply to VAT decisions, about which the hon. Member for Truro was equally candid, and decisions on excise duties. The hon. Member for Truro and I have both served on Finance Bill Committees, and I have listened to a number of his speeches about sensitivity over higher petrol prices in rural areas such as Truro. I suggest that, before pressing further forward with the alliance's policy, he should take a straw sample of his constituents on how enthusiastic they might be about petrol duty being resolved in Strasbourg.

I have had to listen to a number of lectures from Liberal spokesmen and candidates on how Liberal philosophy causes them to seek to bring decision-making and power nearer to the people. I cannot imagine a more dramatic way of taking power further away from the people than transferring decisions that have an immediate effect on household expenditure to Strasbourg, outwith even the influence of the British Government.

The opening paragraph of the alliance's manifesto could have been written only by the alliance. I think that I carry others with me when I say that no other party represented in the Chamber would have the insufferable and smug arrogance to open its manifesto by stating that it is much more informed than other parties. That sentence has the characteristic ring of the right hon. Member for Plymouth, Devonport (Dr. Owen). One day that ineffable conceit will be his downfall.

Mr. Penhaligon

The hon. Gentleman has taken what might be described as one inch from my remarks and extended it to about 10 miles. He has done so without any real justification. The basis of his remarks about me was his claim that we have served as members of Finance Bill Committees. Unlike the hon. Gentleman, I have managed to demonstrate good sense by avoiding serving on such Committees.

Mr. Cook

I am happy to accept that correction for the record. However, I remember hearing speeches from the hon. Gentleman on petrol duty. Presumably he delivered them in Committee on the Floor of the House or on Report as previous Finance Bills have passed through the House. However, I cannot accept what he says in defence of the alliance's manifesto.

It is clear from page 25 of the manifesto that the alliance believes that the powers of the Parliament … should be extended to the revenue side. It is clear, in page 15, that it believes that the revenue side of the budget should be extended to include issues such as excise duties.

There has been no collusion between the hon. Member for Dorset, West and myself. On an objective reading of the alliance's manifesto we have come independently to precisely the same conclusions. They are the only conclusions that any independent, impartial and objective observer can reach on reading the alliance's manifesto. It is clear that the alliance means to give excise duty powers, including petrol duty, to the European Parliament, to be resolved in Strasbourg, not in the House.

Having gone so far with the hon. Member for Dorset, West, I am sure that I have created some anxiety on his part that I would go with him the whole way and therefore damage his reputation in the House. I must now, regrettably, leave the path of the hon. Gentleman. The motion invites us to applaud the strong voice in Europe of the present Government. The hon. Gentleman may not have been present for all our debates on Europe over the past three or four months. If he had been, he would be aware that on the two issues that the Government have isolated as the major issues for debate in the negotiations between Britain and the rest of the EC, they have failed. I agree with the hon. Gentleman that we have had a strident voice in Europe, but, as we have failed to achieve any of our major negotiating objectives, we cannot be said to have a "strong voice". As this may be the last debate on European issues before 14 June, I shall try for the last time, before the European elections, to draw from the Minister answers to the questions that we have been putting to him and his ministerial colleagues for the past two months.

It is clear that the hon. Member for Dorset, West wants to clear the decks on the British budget rebate. There are hon. Members on both sides of the House who would wish to see that happen. When will the decks be cleared? When do the Government expect to be paid the rebate for 1983? I am bound to say that discussion on the matter has reduced to vanishing point. When the last but one meeting of Foreign Ministers Council took place, we were treated to reports in the press that discussion of Britain's rebate had lasted between 20 minutes and an hour. When I pressed the Foreign Secretary to say how long the discussions had continued, he admitted that it was somewhere about the mid point of the two estimates.

The most recent meeting of the Foreign Ministers Council took place last week, but there was no statement following it. However, I was sent a courteous letter by the Foreign Secretary in which he indicated that there was no statement because the substance of the discussions was a little less substantial than usual". From that I divined that there was not even 20 minutes of discussion of the British budget rebate.

I am sorry to have to say to the hon. Member for Dorset, West that progress on the budget rebate must be one of the tests to determine whether the Government have a strong voice in Europe. It is the issue on which they chose to make their voice heard.

I have with me a splendid example of that strident voice —a transcript of the interview that the Prime Minister gave on ITN on 4 January. Sir Alastair Burnet asked her about the rebate for 1983, and she replied that if they default, then we will have to, in the famous phrase, and I think they all know exactly what it means, but some things are a little bit wrapped up—that we shall have to take steps to safeguard our position.

SIR ALASTAIR

That means you will take steps?

MRS. THATCHER

Oh indeed yes, we need the money. It's ours, it's due to us. It's promised. That is the authentic and characteristic strong voice of the Government in Europe. Five months have passed since that interview, and two months have passed since the deadline set by the Prime Minister in that interview. The House is entitled to ask what steps are being taken to secure payment of that rebate. The Prime Minister said then that the other countries in Europe knew exactly what was meant by the phrase, we shall have to take steps to safeguard our position. Since no steps have been taken, will the Minister tell the House, when he replies, precisely what the phrase meant and what steps may be proposed in future to lend strong weight to that strident voice?

The other issue on which we must judge the Government's strength—they chose it—is how far they have achieved effective control over expenditure in Europe. They have been so unsuccessful in doing that that this year the European budget will be overspent by £1.5 billion.

It is instructive to note how the largest part of that over-expenditure in agriculture arises, because it goes to the heart of the lunacy of the common agricultural policy. Expenditure on agriculture this year will rise because world food prices are falling. Because world food prices are falling, it will be more expensive than before to provide subsidies to the exporters of food from Europe. Any advantage from falling world food prices should be transferred to the consumer. However, the consumer will not be given that advantage, and instead the taxpayer will pay for increased subsidies. The European Commission must be the only body in the world which is hoping for world food prices to rise during the year.

The Minister has hitherto taken the view that that over-expenditure need not require further finance and can be met by savings. I ask for the fourth time in four months: Where will these savings be made? Today I saw a letter from the office of Piet Dankerts, the President of the European Parliament, in which it is stated that the Council of Ministers has requested savings of £500 milion in nonagricultural expenditure. Will the Minister tell the House whether that is true? If it is, that sum will just about wipe out the entire expenditure of the social fund or the regional fund. Are the Government prepared to see those funds become victims to the juggernaut of agricultural expenditure? If not, how do they see the Commission muddling through this year when it has already such an overspent budget?

Finally, I urge the Minister to answer the pointed questions of my hon. Friend the Member for Linlithgow (Mr. Dalyell). If the Community is edging towards a common foreign policy, it must mean — if it means anything—that when the Government are garrisoning the Falklands the Germans should not be supplying submarines to the Argentines for potential use against ships supplying that garrison.

Mr. Dalyell

Two submarines have been built by Blohm and Voss, and six more are under licence from Blohm and Voss in Argentina. That amplifies the nature of my hon. Friend's question.

Mr. Cook

I am grateful to my hon. Friend for raising that point, because it reinforces the importance of his question.

The hon. Member for Truro, before his departure, treated us to another rendition of his mackerel speech. If I understand him correctly, he said that the House was treated to whining and whingeing speeches from both Dispatch Boxes, claiming each would have been more aggressive in negotiation. He then proceeded to whine and whinge about the milk settlement and suggested that an alliance Government would have negotiated that more aggressively. I put it to him — I hope that his hon. Friends will convey this to him — and to other hon. Members who made this point, that it is not sufficient to inveigh against the excesses of the CAP. We all know that there are excesses. The hon. Member for Southend, East did a service to the nation by highlighting the extent to which we supply cheap food to the Soviet Union and its satellite states. It causes great offence to European consumers, who are denied food at reasonable prices, that that food should be available at cheap prices to other nations' consumers.

There are many further examples. I noted last week that the expenditure on the milk fund is so enormous that a French headmaster is on a charge of fraud for having obtained a subsidy on milk supplied to 40,000 children who did not exist. No sane hon. Member will attempt to defend such excesses.

These excesses are not peripheral. They arise from the basic lunacy of the CAP. The system needs radical reform. If one adopts the price mechanism as a means of supplying income to small farmers, one will inevitably be driven to a high price settlement which provides a killing for large farmers, who in turn have an incentive to produce grotesque surpluses, which in turn require extraordinary expenditure to maintain and then to dump. Hon. Members must never forget that the bulk of the CAP expenditure benefits not the farmer, but goes to managing and disposing of the surpluses called forth by the high prices that the consumer must pay.

Mr. Ralph Howell (Norfolk, North)

Is the hon. Gentleman aware that we are spending only one fifth as much on agricultural support this year as we did in 1960? In 1960, at today's prices, we spent over £1,800 million. This year we are spending £599 million. In 1960 that represented 1.01 of GDP; this year it represents 0.2 per cent. of the GDP.

Mr. Cook

I am well aware of the hon. Gentleman's point. It is possible for him to make it only because, when we joined the CAP, it transferred the cost of subsidising farmers from explicit payments by the taxpayer to hidden subsidies from the consumer through high prices. The hon. Gentleman should examine the authoritative study on this point by the Institute of Fiscal Studies. It takes account of the hidden subsidies and the tax payments, and concludes that the CAP cost the British nation an additional £4,000 million a year to provide a total subsidy to the farming community of only £2,000 million a year.

If the hon. Gentleman is in any doubt about the nonsense that flows from the basic structure of the CAP, he should consider last week's decision of the Council of Ministers to increase even further the price of Mediterranean fruit and vegetables as a result of negotiations with Spain and Portugal. That was because Spain and Portugal, which are about to become members of the Community, produce cheap fruit and vegetables. If the consumer were to gain an advantage from the accession of Spain and Portugal to the Community, it should be to gain access to those sources of cheap fruit and vegetables. Not only will the consumer be cheated of that access to cheap fruit and vegetables, but every country's Mediterranean fruit and vegetables will go through a price hike.

Mr. Rifkind

The hon. Gentleman has made some interesting and powerful criticisms of the CAP. What I always want to hear when he speaks on this subject is what the Labour party would replace it with. Does it wish there to be no CAP within a European Community, of which it wishes to remain a member, or, if it wishes to replace it, what agricultural policy will it put to the electorate on 14 June?

Mr. Cook

The position that we have taken—the Minister knows this because we have discussed it several times—is that the time has come to shift the subsidy to the farmer from the consumer on to the taxpayer. We should return to the system of direct payments to the farmer that existed in Britain before 1972. If we cannot obtain that on a Common Market basis, we are prepared to contemplate having a British agricultural policy, which may be no bad thing. If the French wish to continue to maintain 2 million peasants on the land producing food uneconomically, that is a perfectly proper and legitimate social decision for the French to take; but there is no reason why they should expect the British consumer to pay for that policy through his or her bread basket.

It is not only the Labour party that puts forward such a proposal. Several hon. Members referred to the manifestos produced by the parties. One of the most stimulating manifestos produced so far is that of the Consumers in the European Communities group, which produced a valuable manifesto calling for a freeze on the prices of commodities in surplus, saying that no more commodities should be brought into the intervention system, and that the consumer should be given access to the world market for food. Those reforms are long overdue, as is the voice of the consumer in the debate on the CAP. It is high time that, as well as an agricultural policy, we sought to create a food policy that is fair to the consumer as well as to the farmer.

I was struck by the extent to which we have managed to debate this matter for the past two and half hours with very little reference to the economic problems that face Europe. It is an extraordinary indictment of the priorities of the Community that the Prime Ministers of the European nations have met in summit three times without once producing a proposal for the economic regeneration of Europe. There is an almost comic absurdity about the contrast between the bureaucrats in the Berlemont spewing out more directives and regulations to achieve greater transparency of the market and to ensure a free market of goods across Europe, and at the same time in each domestic capital of Europe the Governments of each nation carrying through policies of deflation deliberately designed to suppress imports from each other within that free market.

Mercifully, a growing number of voices has been raised against the waste of the lost output from those policies, which represent a forgone income greatly outweighing the short change in the budget which so much concerns the Government. In Brussels last week the Centre for European Policy Studies said that the forecast growth rates for Europe would not cut unemployment, and demanded that the Governments of Europe should carry through a stimulus to their economies to achieve faster growth for a period to reduce that unemployment. The European Trade Union Confederation met last month in Strasbourg. In its report, which was adopted at that meeting, it said that a 1 per cent. expansion in public investment by European Governments would stimulate a 3 per cent. growth in output across Europe. I should not expect the Minister to be aware of that conclusion, because the British Government were the only Government in Europe who were not represented at ministerial level at that meeting, thus showing their complete indifference to any attempt seriously to debate ways in which European countries could work together to pull themselves out of the slump.

The evidence of this morning's manifestos is that in Britain only the Labour party points the way out of the slump by demanding a co-ordinated reflation across Europe. A decade ago there were fewer than 2 million unemployed in Europe. There are now more than 13 million. If the Government could bring themselves to be honest about unemployment in Britain, registered unemployment in Europe would be not 13 million, but 14 million. The Labour party will take pride in putting the plight of those unemployed at the centre of its coming campaign, and it will urge Europe to face the prime economic challenge of our time. It will also take pleasure in exposing the abject failure of the Government and their indifference to any attempt to harness the institutions of Europe in a co-operative programme to create the jobs that Europe needs.

6.14 pm

The Minister of State, Foreign and Commonwealth Office (Mr. Malcolm Rifkind)

The deputy Leader of the Opposition, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), has gone on record as saying that he is worried that it might not be possible for the Labour party to persuade Labour voters to vote in the European elections on 14 June. Since the Labour Front Bench spokesmen have been able to persuade only two hon. Members of the parliamentary Labour party to attend this debate, it is an interesting example of the apathy, lack of interest and hostility of the entire Labour party and its supporters to the European Community.

I happily agree with the first comments of the hon. Member for Livingston (Mr. Cook), who congratulated my hon. Friend the Member for Dorset, West (Mr. Spicer) on his choice of subject and on the way in which he moved the motion. My hon. Friend is a distinguished member of the European Parliament and he and my hon. Friend the Member for Sheffield, Hallam (Sir J. Osborn) both said that the origins of the Community are to be found in the trauma of the two world wars of this century and the determination of many to avoid another such conflict.

My hon. Friend the Member for Southend, East (Mr. Taylor) and Opposition Members disputed the strength of the Community, but I remind them of the history of the Community. It was created by bringing together the steel and coal industries of some countries because they were identified by the founding fathers as the strategic industries of Europe. It was thought that if they could be brought under common control conflict among the countries of western Europe would become impossible. If, as some of my hon. Friends said, the main risk of conflict in Europe is now between NATO and the Warsaw pact countries, that in itself shows what benefits the EC and other such developments have achieved. Conflict in western Europe has become unthinkable, and, as my hon. Friend the Member for Dorset, West said, the Community can take credit for that.

Once again, this debate has been significant for the fact that the Foreign Secretary in the Labour Government, who is now the leader of the SDP, made no attempt to speak or to give us the benefit of his experience. However, we have heard his views on another platform. Last week he and the leader of the Liberal party announced to the waiting public the contents of their election manifesto.

The right hon. Member for Plymouth, Devonport (Dr. Owen) attacked my right hon. Friend the Prime Minister and suggested that her negotiating style had somehow damaged Britain's interests and had been the most important factor in preventing a successful outcome to the negotiations. The right hon. Gentleman should have been a little more cautious in his remarks, because he has a track record in this matter. After all, he was Foreign Secretary in the Labour Government who signally failed to make any progress either in financial matters or in any other aspect of the reform of the Community and who, despite tortuous renegotiation, did not obtain a single ecu of rebate for the British taxpayer.

Not only is the right hon. Member for Devonport a former failed Labour Foreign Secretary; he is a member of an alliance which has already said that it would have accepted what was on offer at the Brussels summit. If that is an example of his firm negotiating skill, it will not impress either the House or the country.

I remind the House of the remarks of Leo Tindemans, the Belgian Foreign Minister, recently on BBC radio, when he said that, in his view, my right hon. Friend the Prime Minister was the finest negotiator he had ever come across.

Mr. Foulkes

From his point of view.

Mr. Rifkind

No. In his view, she was the finest negotiator he had ever met, and he believed that the significant progress made by the United Kingdom in securing its objectives was largely due to her negotiating skills. There is solid evidence for that.

Mr. Foulkes

Where is the money?

Mr. Rifkind

The hon. Gentleman asks, "Where is the money?" Approximately £2 billion has already gone to the British taxpayer. They are the rebates to which the hon. Gentleman is referring. In addition, the Community accepts—it was not even considered some years ago—that the future burden of financing Community expenditure must take into account the relative prosperity of member states. That has been the cardinal objective of successive British Governments. The previous Labour Government failed to obtain acceptance of that principle. It is now accepted unanimously by all member states. I do not believe that anyone could seriously suggest that that would have been achieved without the negotiating patience and skill of the present Conservative Government.

In addition, we are seeing progress on the control of agricultural expenditure. Hon. Members are entitled to say that much remains to be done before control of agricultural expenditure will meet our requirements, but it is absurd to suggest that the attitude of the Community and of other member states to agricultural expenditure has not undergone a dramatic transformation over the past two or three years.

One of the principles that is now accepted by the Community, which was not previously accepted, is that revenue must determine expenditure, and not the other way round. That is a new development, and one that we can properly recognise.

Mr. Robin Cook

Will that principle be observed during the coming year?

Mr. Rifkind

It is because the previous arrangements to control agricultural expenditure were not and are not working that we have insisted that as part of the post-Stuttgart negotiations a new system of control must be written into the Community's budget procedures. I am pleased that the hon. Gentleman enabled me to say that.

I am well aware that the Community's existing policies have not brought controlled agricultural expenditure. The problem was described to me graphically and effectively as being similar to the remark Errol Flynn made about the problems of his own life, when he said he had always found that his difficulty was to reconcile net income with gross habits. That accurately reflects the problems facing the Community in recent years. However, I believe that the form of discipline which is now accepted by all member states is relevant to the Community's operations and represents significant and welcome progress.

Mr. Richard Shepherd

We still do not know what agriculture will cost at the end of this year, next year or any year. It is still not controlled by the amount that we raise. It determines what we spend. Is that not the criticism of the common agricultural policy?

Mr. Rifkind

My hon. Friend is correct to draw attention to that point as being the main objective of the present negotiations. It is now accepted that the Finance Ministers must be involved in the determination of agricultural expenditure and that when sums for agricultural expenditure have been determined the Community must achieve proper budgetary procedures to ensure that expenditure comes within those limits.

Mr. Teddy Taylor

Will my hon. Friend confirm that the Finance Ministers, who will determine this global sum, will not be operating under a majority agreement, but that countries, such as Britain, which feel strongly about controlling money will have the veto? That is the key point which my right hon. Friend might like to have. Under this new system and discipline, surely there will be no question of majority voting on the global sum.

Mr. Rikfind

The draft conclusions of the previous summit negotiations pointed in the direction that my hon. Friend and I would wish to see—that there should be effective control of agricultural expenditure, and the member states are studying the various detailed budget procedures that will bring about such a desired result. That is our objective, as I am sure it is my hon. Friend's objective.

Mr. Teddy Taylor

Not a majority vote.

Mr. Rifkind

That is under consideration, so that we have effective budget procedures. My hon. Friend knows that the Government's cardinal objective is to bring agricultural expenditure under control. That has always been one of our objectives, and we should not accept a settlement to the negotiations that did not meet our requirement.

The hon. Member for Linlithgow (Mr. Dalyell) suggested that British companies were not receiving a fair deal under the award of contracts arising from the JET project. I am not sure from where he gets his information, but he could not be more wrong. United Kingdom firms have, up to 13 April, won over 45 per cent. of all contracts. In contrast, West German industry has won 25 per cent., France 8.5 per cent. and Italy 8 per cent. I am sure that that will be of great pleasure to the hon. Gentleman. He also asked about the financing of CERN. If one has a Department of Education and Science, it is logical for the financing of such scientific matters to be determined under the budget of that Department and no other.

Mr. Dalyell

I asked about arms control.

Mr. Rifkind

I am trying to limit my comments to specific matters that arise out of the European Community. With respect to the hon. Gentleman, I do not feel that that matter does. I know that he will find plenty of opportunities to pursue his interest.

The main problem that remains to be bridged in the Community negotiations is the gap in the British budget refund. We believe that, with flexibility throughout the Community, it should be possible for the gap to be bridged. Naturally, we should like to see a solution as early as possible, but I emphasise that if we have to wait a little longer to achieve an acceptable solution, that is something we are prepared to do. We are prepared to wait as long as may be necessary to ensure that the budget arrangements are fair to the people of the United Kingdom and to the European Community.

The policies of Her Majesty's Government are well understood, but a deep sense of confusion is felt by the British public about the policies and attitude of the Labour party. That is not surprising, because if we consider the Labour party's history on this subject, we realise that it is an extraordinary history of changed policies and confused positions.

From 1961 to 1966 the Labour party was hostile to Community membership. When the Labour Government served the country until 1970, they inquired into the prospects of Community membership. From 1970 to 1974 the Labour party was again hostile to Community membership. Between 1974 and 1979 we saw an extraordinary bout of internecine civil war, with members of the Labour Cabinet speaking and voting against one another during and after the referendum campaign. During the last election the Labour party came out hostile to membership, in a most uncontrolled fashion. Since then we have seen a further attempt to fudge the issue.

One is entitled to say now that the Labour party is as committed to the Europan Community as the Soviet Union is to participation in the Los Angeles Olympics. For its own internal purposes the Labour party has achieved a fudged cosmetic formula whereby the vast majority of its members who remain hostile to Community membership have agreed that withdrawal should not be insisted upon, in exchange for a commitment by the Labour leadership that it will make no serious reference to the detailed consequences of Community membership during its European negotiations and campaigning.

If the hon. Member for Livingston disagrees with me, we have the remark by the Leader of the Opposition in his article in New Socialist on a "New Messina", where he said that the Labour party would fight the European elections—

Mr. Foulkes

He wrote it last month.

Mr. Rifkind

Yes, I know, and it was a good work. The Leader of the Opposition said that the Labour party would fight the European elections but demand fundamental reforms in the Community. If they could not be achieved, we would reserve the right, like any other nation, to withdraw. Having put those unnegotiable objectives before the country, I remind the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) what the deputy leader of the Labour party said—

Mr. Foulkes

The hon. Gentleman told us last month.

Mr. Rifkind

No, I said last month what the deputy leader said in the Financial Times. I am now going to remind the hon. Gentleman of what the deputy leader said in The Guardian, which is a much more agreeable newspaper for the hon. Gentleman. On 8 August 1983 the deputy leader of the Opposition said: A threat that we will really leave the Common Market if we do not recreate it in our own image is a disastrous foundation on which to build our European election platform". Yet that is precisely the basis on which the Labour party is now campaigning.

The hon. Member for Livingston sought to suggest that the Labour party intended to fight the European election on the basis of policies relevant to the European Community. In this context, I read with great interest a supplement to the latest issue of the New Statesman, produced by the Labour party and headed: Four reasons for voting Labour in the European Elections". The reader is entitled to assume that the four reasons relate to the European Community, or at least to European issues, but one of them turns out to be the argument that The health service is one of the nation's greatest assets and it is vital that we stop the Tories dismantling it. I await with eager anticipation the hon. Gentleman's explanation of how a Labour vote in the European elections will help or hinder the National Health Service.

When I last referred to the Health Service as an argument advanced by the Labour party in its European campaign, the hon. Gentleman leapt to the Dispatch Box and claimed that he had been misquoted. I had quoted our own local paper in Edinburgh, which had quoted the hon. Gentleman to that effect. There is now an official Labour document saying exactly the same thing. I shall be happy to give way if he will explain how that is a relevant reason for voting Labour in the European election.

Mr. Foulkes

Read the others.

Mr. Rifkind

I shall happily read the rest. Another reason given for voting Labour is: Today when the 'ugly face of capitalism' is expressing itself through the policies of the present government, it is imperative that the Labour Party is strong and secure.

Mr. Foulkes

Quite right.

Mr. Rifkind

It is pathetic that a party seeking to suggest to the electorate that it is fighting the European elections on European issues should make no reference at all to European matters in two of the four main reasons given for voting Labour.

Mr. Norman Buchan (Paisley, South)

That is rubbish.

Mr. Rifkind

I quite agree.

Mr. Robin Cook

I shall be happy to supply the Minister with a copy of our manifesto, which we launched this morning, so that he can make equally copious reference to that document in the next debate on Europe, which I hope will be before 14 June. We shall fight the election on a platform of European policies of the kind which I have repeatedly described in the last five debates on these matters. As the hon. Gentleman knows, however, in casting their votes in the only national election before the next general election, the electorate are also entitled to pass judgment on the policies of the Government in office. I can see no finer reason for rejecting the Government now in office than their butchering of the Health Service.

Mr. Rifkind

We now have the true position of the Labour party. Clearly it wishes to fight the election on anything but European issues.

On other occasions the hon. Gentleman has said that the Labour party intends to fight the election in partnership with its Socialist allies for peace, using issues such as cruise missiles. When one examines the policies of other Socialist parties, and especially Socialist Governments, however, it seems that it will be difficult for the Labour party to find such allies. The most important Socialist Government in Europe — that of France — not only believe in the independent deterrent, but strongly favour the deployment of cruise missiles.

Writing in Sanity in April of this year, referring to various Socialist parties in the Community, the hon. Member for Livingston said: There are differences between us and the Italians and there are of course even more profound differences between us and the French Socialists. They adopt a position within the European Socialist movement which is eccentric". Hon. Members may laugh, but those are the natural allies which the Labour party will be calling upon for support in the European elections.

We recently heard that the present chairman of the Labour party, the hon. Member for Liverpool, Walton (Mr. Heffer) believes that the best way to encourage people to vote on 14 June is to produce a Socialist song for Europe. We had a prelude to that last night, when the Leader of the Opposition did a song and dance act of his own. I do not know what the Socialist song for Europe will be, but perhaps I may suggest some titles. If it is intended to refer to the state of the Labour party, what about "The party's over, it's time to call it a day"? If it is to refer to the Leader of the Opposition, "Will you still need me when I'm 64" might be appropriate. If it is to refer to the twisting and turning of the Labour party, especially since the last general election, which it fought on a policy of immediate withdrawal from the Community, nothing could be more appropriate than "Let's twist again like we did last summer."

I conclude by congratulating my hon. Friend the Member for Dorset, West on the excellent way in which he introduced the motion. I believe that he and my other hon. Friends who have spoken, especially my hon. Friend the Member for Reigate (Mr. Gardiner), who made a very powerful speech, have explained in the most eloquent possible way why only a vote for the Conservative party in the European elections can be in the national interest. I believe that strong support for the Government, even from those who do not usually vote Conservative, is the most important way to show our partners and allies in Europe the basic soundness of our negotiating position and our faith in the future of Europe, and in a fair and equitable conclusion to the present negotiations. I believe that that is in the interests not just of Britain but of the Community as a whole.

6.36 pm

Mr. Ron Leighton (Newham, North-East)

We have just been entertained with a knockabout attack on the Labour party from which we learnt very little about the Government's policies. Incidentally, I do not think that the Minister was quite accurate in suggesting that President Mitterrand was prepared to have cruise missiles on French soil on the same terms as the British Government.

I join in congratulating the hon. Member for Dorset, West (Mr. Spicer) on introducing the debate. Like the hon. Gentleman, I want peace to be maintained in Europe and the world, but he must not be like the old generals who, when they start a campaign, try to fight the last war all over again. The danger of war in Europe is between not Western countries, but East and West. I am not sure what an arrangement in one part of Europe can do to diminish that risk.

The hon. Member for Reigate (Mr. Gardiner) was right when he said that debates on the Common Market tended to empty the House. The obvious deduction from that is that there is no affection or love for the Common Market in this country or even in the House. He might care to consider why debates of this kind do not attract the right hon. Member for Old Bexley and Sidcup (Mr. Heath), the right hon. and learned Member for Hexham (Mr. Rippon) or the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) who held out such high hopes when they took us into the Common Market. Rather than attending these debates to extol the great achievements that have been made, they tend to keep a discreet distance, because no one—or only the incredibly naive, of whom very few remain, or fools—now expects to hear any good news from the Common Market. The benefits of membership are like flying saucers. Very few people have seen them, and one tends to have doubts about the mental balance of those who claim to have seen them. All rational people who take a dispassionate view of the matter long ago gave up hope of any good news.

All that, of course, was entirely predictable. Everyone knew that the farm policy was crazy and unsuited to British needs. We have always been the largest food importer, and we had the cheapest food of any industrial nation, which benefited our living standards and exporters. That policy had suited Britain since the repeal of the corn laws. Effectively, we have now reimposed the corn laws and have a savage and vicious system of agricultural protection as well as a high price regime.

It is clear why these high prices have come about. We need only look at the farmers' demonstrations on the continent to realise that they are designed to appease the agricultural lobby. In other words, this is the way in which the ruling parties on the continent bribe their farmers to vote for them. I do not mind that or object to it. If that is what they want to do, fine. But I object to their using our money to bribe their farmers.

Before we entered this arrangement, we used to subsidise British farmers to produce half our food. The other half was imported at world market prices. Consequently, we gave subsidies to British farmers to produce cheap food. We now pay subsidies to foreign farmers to maintain high food prices, and there is no sense in that.

Even British farmers were misled. I think that Sir Henry Plumb has been the worst leader that British farmers have ever had, and I look back with fond affection to the days of Lord Woolley. This policy is ruining our countryside. We are drenching it with chemicals and rooting out the hedgerows. We are brutalising and vandalising the countryside. Indeed, if one drives through East Anglia in the autumn, it is like driving through a battlefield.

High food prices have led to high land prices, and as a result the farmers' profit margin is small. Farmers have piled up huge debts and are mortgaged to the hilt. Would-be farmers cannot make a start. Most of our large farms are now owned by City institutions. Despite all that, the whole edifice is collapsing, like the South Sea bubble, because the policy is running out of money.

Certain controls and freezes have consequently been placed on prices, and that has led to squeals from the farmers. Despite those high prices, many farmers will now go bankrupt. Working farmers and farm workers have not benefited.

The hon. Member for Wells (Mr. Heathcoat-Amory), whose part of the country I know well, complained in a previous debate about the cut in milk production. He is right. Why should we cut our milk production when we have no surplus of dairy products? What does the hon. Gentleman say when his farmers ask, "Why should we cut production when we produce no surplus?" He must tell them, "It is no good coming to me because these decisions are not made in the British Parliament. They are made by alien institutions, not by the British House of Commons." Therefore, we have lost control over our agriculture and abandoned self-government in such matters.

What we lose on the swings we also lose on the roundabouts of the Community budget. The revenue of that budget is decided not on ability to pay, fairness or equity, but on three bizarre and grotesque taxes. First, there are import duties on manufactured goods from outside. As most of our trade still takes place outside the Common Market, we pay more in taxes on manufactured imports. Secondly, there are levies on food imports. Again, we import more food than other member states, and consequently pay more. We shall always do so. Thirdly, there is the percentage of VAT. When one turns the penny over, one finds that overwhelmingly the money is spent on agriculture. As Britain is not primarily an agricultural nation, it was always likely that we should have to pay in more and draw out less. That was predicted and has been mentioned many times in the House.

The full horror of all this was realised by the Prime Minister only in 1979 when the transitional period ended. When she went to Dublin, she discovered that Britain would have to pay £1 billion net, and she was horrified. She said that she wanted our money back and that she was not prepared to accept half a loaf. She was right. Why should Britain pay anything at all? After all, we are one of the poorest nations in the Community. Surely we should be one of the net beneficiaries. It is a strange club of 10 members when only two contribute. Why should we be one of the two?

In fact, the Prime Minister did settle for half a loaf, which temporarily depended on a permanent solution that was promised throughout the whole of the last Parliament. We were told that it was just around the corner. Initially, it was to be done during the British presidency, then at Stuttgart, then at Athens and then at Brussels, all of which were predictable fiascos.

Now we do not even have the half a loaf for last year that was promised at Stuttgart. What will be done about that? My hon. Friend the Member for Livingston (Mr. Cook) asked the Minister about that, but I did not hear a distinct reply. The Prime Minister makes a lot of noise, demands our money and "bats for Britain"— or does she? So far it has been all bluster and no action. If the right hon. Lady remains as a sounding brass or tinkling cymbal —all bluster and no action—the empress will be seen to have no clothes. I suspect that in the forthcoming elections the British electorate will perceive that.

In fact, the Prime Minister has the card to play which could solve the problem. Europe gets our money because we write the cheques. We could solve this problem this evening by resolving to stop signing the cheques which send our money across the exchanges. However, we are told that we cannot do that, because that would be illegal, and that what was promised us at Stuttgart was unconstitutional because there is no provision for summit conferences in the Treaty of Rome and that agreement at such conferences is meaningless. We are told that this is their money, not ours. That shows that this Parliament no longer has the sole power to decide the taxation of the British people.

We are now being taxed by methods and in amounts that are not decided by this Parliament. Alien institutions are taxing us and telling us what to do with our money. There is now a higher body than this Parliament. The House of Commons is being treated like a county council —as though it were the GLC, to be rate capped. There is no more graphic illustration of the loss of self-government that we have endured. Personally, I shall never be reconciled to that, nor will I ever recognise a higher authority outside this House. I am certain that we shall regain these rights. At the moment, we should withhold those payments. They should be paid into some frozen fund, and we should withhold what is justly ours.

However, the greatest damage is done not by the budget but by the trading deficit. Before we entered the Common Market, we had a surplus of £1 billion on our trade balance in manufactured goods. As the hon. Member for Southend, East (Mr. Taylor) explained, we are now over £8 billion in deficit. When we joined the EEC, our exports were 130 per cent. of our imports. That ratio has now fallen to 65 per cent. There has been a complete turn-round of about £10 billion. I know that the calculations are difficult, but if that works out at about £10,000 a job it means that that trade deficit is inflicting 1 million unemployed people on this country.

Mr. Richard Shepherd

rose—

Mr. Leighton

I shall not give way to the hon. Gentleman, as other hon. Members wish to speak.

I know of no other country that would tolerate such a haemorrhage in its balance of payments. We operate controls against Japan. Where are the free traders who say that we must have no management of our trade? We say that the Japanese can have only 12 per cent. of our motor car market. There is no free trade there. If we are ever to tackle our unemployment problems, we shall have to balance our trade with the Common Market as well, and we shall have to seek some equity.

We should change the basis of our relationship with the EEC. I hope that Labour candidates will campaign on a platform of reform. We want a looser arrangement of free, independent countries. I believe in internationalism. The world "inter" means between. Instead of supra-nationalism, I want to see a group of independent, self-governing countries co-operating together. I completely agreed with the splendid article by my right hon. Friend the Leader of the Opposition that the Minister read out, which suggested a new treaty that would provide a basis for better relations with our neighbours. Instead of haggling, quarrelling and fighting with them, we would have a much better relationship if we did precisely what my right hon. Friend has suggested.

6.51 pm

Mr. John Stokes (Halesowen and Stourbridge)

I congratulate my hon. Friend the Member for Dorset, West (Mr. Spicer) on moving this motion just before the EEC elections, which are being held at a time when the EEC is not popular in this country. English people still retain many insular prejudices, with which I have some sympathy. I have been present throughout the debate and have heard more criticism of than praise for the EEC. I am afraid that some of that criticism is well founded, but all the critical speeches have lacked any clear suggestion of an alternative to belonging to the EEC. The Labour party's whole stance on this matter is still an enigma wrapped in a mystery.

It would be unthinkable now for us to leave the Community. With all its imperfections, its failures and the tiresomeness of some of its members, it is still a tremendous bulwark for the West and an insurance that the nations of western Europe will never fight one another again. The question of a fair settlement of the budget lingers on, of course, like the pain in a nagging tooth, but, unlike some Opposition Members, most people will respect the determination of my right hon. Friend the Prime Minister to try to obtain a fair settlement of this difficult issue.

The motion asks us to look to the future of the EEC. I do not wish to see any increase whatever in the powers of the European Asembly. I cannot really see what that body does, or what it could or should do. I want a Cabinet Minister, who is responsible to this House, representing me in Europe. I cannot see how these new Members of the European Parliament fit into that picture. I hope that we can build the EEC into a strong alliance of friendly nation states and that we shall not look forward to any kind of federal Europe. I cannot see that day coming, at least for a very long time, and it would be most unwise and dangerous to press for it.

The EEC is supposed to have a political will. In the early days we were told, "Do not worry about the price of butter. It is the political will that will matter." I have always regarded that as very important. The EEC supported us in the Falklands war, and we must never forget that, but apart from that it has not done very much. Over the Libyan embassy outrage the silence was deafening. I cannot see why we cannot combine over matters such as terrorism.

I believe that the EEC has a part to play in improving the dreadful situation in the middle east, where, for example, its views on the need for a home for the Palestinians are so much more sensible and balanced than those of our American allies. I also hope that the EEC will support us if we have to intervene in the Gulf with our French and American allies.

In many ways, the political hope of the EEC having a voice in world affairs has been disappointed. It intervened over Northern Ireland, but that was quite out of order and a great mistake. I look upon the EEC fundamentally as a back-up to NATO, even though the EEC has no responsibility for defence. I believe that our statesmen there should exercise the same sort of influence in this congress of Europe as, for example, Castlereagh and Wellington did at the congress of Vienna in 1815.

We have heard a great deal today about the CAP and what a disaster it has turned out to be. As I have no farmers in my constituency, I can speak freely. I welcome the cut in milk production, which should have been made long ago. Surely intelligent milk producers must have known that the good times could not go on for ever. I only wish that there could be a similar cut in cereal production, wine, olive oil, butter and so on. It is certainly an affront to everyone in the West to see all those products sold at knockdown prices to our enemies behind the iron curtain.

I realise that these matters will not be solved easily or in the short-term. I sympathise enormously with my hon. Friend the Minister and my right hon. and learned Friend the Secretary of State, and all the other Foreign Office Ministers who have to spend such an unconscionable time on the minutiae of EEC business, instead of spending all their time looking after the greatness of our country. But we must be firm and patient. The continental mind works differently from ours—it has had much less parliamentary experience than we have had, and many of the countries are very new compared with ours. The continentals are too legalistic in their thinking, too dogmatic, too rigid and too logical—and sometimes very tiresome they can be.

Our French friends, in particular, are almost always a burden to us, and no doubt they sometimes find us a burden too. Nevertheless, we must get on together. Although I am strongly in favour of the American alliance, we and some European countries may have rather greater experience of world affairs than America has, and the EEC's voice may be good if the Americans occasionally go slightly awry.

The EEC also presents a challenge to the Warsaw pact powers. It is a beacon of freedom which cannot be hidden behind the Berlin wall. As we know, many on the other side of the iron curtain listen regularly to the free radio in western Europe. The EEC can also show the way to other countries, and particularly to those Third world countries which we wish to help, but which so often behave irresponsibly in the United Nations, and sometimes in a very hostile manner towards us.

I am disappointed with the EEC. I had great hopes of it, and still have hopes of it. We want to see some idealism there and we want to see that collection of the oldest nations in the world—the successors of Christendom—making their mark instead of spending their time on all those mundane, miserable day-to-day matters. Surely we in Europe are the most civilised, cultured and certainly the most Christian powers in the world. Cannot we make a better showing than at present?

Mr. Jim Spicer

rose in his place and claimed to move, That the Question be now put.

Question, That the Question be now put, put and agreed to.

Question put accordingly:—

The House divided: Ayes 219, Noes 17.

Division No. 308]	[7 pm
AYES
Alexander, Richard	Arnold, Tom
Amess, David	Atkins, Rt Hon Sir H.

Atkins, Robert (South Ribble)	Hayes, J.
Atkinson, David (B'm'th E)	Hayhoe, Barney
Baker, Nicholas (N Dorset)	Hayward, Robert
Baldry, Anthony	Heathcoat-Amory, David
Banks, Robert (Harrogate)	Henderson, Barry
Batiste, Spencer	Heseltine, Rt Hon Michael
Bellingham, Henry	Hickmet, Richard
Bendall, Vivian	Higgins, Rt Hon Terence L.
Berry, Sir Anthony	Hill, James
Best, Keith	Hind, Kenneth
Biggs-Davison, Sir John	Hogg, Hon Douglas (Gr'th'm)
Boscawen, Hon Robert	Holland, Sir Philip (Gedling)
Bottomley, Peter	Holt, Richard
Bottomley, Mrs Virginia	Hooson, Tom
Boyson, Dr Rhodes	Hordern, Peter
Braine, Sir Bernard	Howard, Michael
Brandon-Bravo, Martin	Howarth, Alan (Stratf'd-on-A)
Bright, Graham	Howarth, Gerald (Cannock)
Brinton, Tim	Howell, Rt Hon D. (G'ldford)
Brittan, Rt Hon Leon	Howell, Ralph (N Norfolk)
Brown, M. (Brigg & Cl'thpes)	Hubbard-Miles, Peter
Browne, John	Hunt, David (Wirral)
Bruinvels, Peter	Hunt, John (Ravensbourne)
Bryan, Sir Paul	Hunter, Andrew
Bulmer, Esmond	Johnson-Smith, Sir Geoffrey
Carlisle, John (N Luton)	Jones, Gwilym (Cardiff N)
Carlisle, Kenneth (Lincoln)	Key, Robert
Cash, William	Knight, Gregory (Derby N)
Chapman, Sydney	Knight, Mrs Jill (Edgbaston)
Chope, Christopher	Knox, David
Clark, Hon A. (Plym'th S'n)	Lang, Ian
Clark, Dr Michael (Rochford)	Latham, Michael
Clark, Sir W. (Croydon S)	Lawler, Geoffrey
Clarke, Rt Hon K. (Rushcliffe)	Lawrence, Ivan
Cockeram, Eric	Lee, John (Pendle)
Colvin, Michael	Leigh, Edward (Gainsbor'gh)
Coombs, Simon	Lennox-Boyd, Hon Mark
Cope, John	Lilley, Peter
Cormack, Patrick	Lloyd, Ian (Havant)
Couchman, James	Lloyd, Peter, (Fareham)
Cranborne, Viscount	Lord, Michael
Currie, Mrs Edwina	McCurley, Mrs Anna
Dorreil, Stephen	Major, John
Douglas-Hamilton, Lord J.	Mates, Michael
du Cann, Rt Hon Edward	Mather, Carol
Dunn, Robert	Mellor, David
Evennett, David	Meyer, Sir Anthony
Eyre, Sir Reginald	Miller, Hal (B'grove)
Fallon, Michael	Mills, Sir Peter (West Devon)
Farr, John	Miscampbell, Norman
Fenner, Mrs Peggy	Morris, M. (N'hampton, S)
Finsberg, Sir Geoffrey	Morrison, Hon C. (Devizes)
Fookes, Miss Janet	Nelson, Anthony
Forman, Nigel	Neubert, Michael
Forsyth, Michael (Stirling)	Newton, Tony
Franks, Cecil	Nicholls, Patrick
Fraser, Peter (Angus East)	Normanton, Tom
Freeman, Roger	Onslow, Cranley
Gale, Roger	Osborn, Sir John
Gardiner, George (Reigate)	Ottaway, Richard
Garel-Jones, Tristan	Page, Richard (Herts SW)
Glyn, Dr Alan	Parkinson, Rt Hon Cecil
Goodhart, Sir Philip	Parris, Matthew
Goodlad, Alastair	Patten, John (Oxford)
Gow, Ian	Pattie, Geoffrey
Gower, Sir Raymond	Porter, Barry
Greenway, Harry	Raffan, Keith
Griffiths, E. (B'y St Edm'ds)	Raison, Rt Hon Timothy
Griffiths, Peter (Portsm'th N)	Rathbone, Tim
Grist, Ian	Rhodes James, Robert
Ground, Patrick	Rifkind, Malcolm
Grylls, Michael	Rippon, Rt Hon Geoffrey
Hamilton, Hon A. (Epsom)	Roe, Mrs Marion
Hanley, Jeremy	Rossi, Sir Hugh
Hannam, John	Rost, Peter
Harvey, Robert	Rowe, Andrew
Haselhurst, Alan	Rumbold, Mrs Angela
Hawkins, C. (High Peak)	Sackville, Hon Thomas
Hawkins, Sir Paul (SW N'folk)	Sainsbury, Hon Timothy
Hawksley, Warren	Sayeed, Jonathan

Shaw, Sir Michael (Scarb')	Townend, John (Bridlington)
Shelton, William (Streatham)	Tracey, Richard
Shersby, Michael	Trippier, David
Silvester, Fred	van Straubenzee, Sir W.
Sims, Roger	Viggers, Peter
Skeet, T. H. H.	Wakeham, Rt Hon John
Smith, Sir Dudley (Warwick)	Walden, George
Smith, Tim (Beaconsfield)	Wall, Sir Patrick
Soames, Hon Nicholas	Waller, Gary
Speed, Keith	Walters, Dennis
Speller, Tony	Wardle, C. (Bexhill)
Spencer, Derek	Watts, John
Spicer, Michael (S Worcs)	Wells, Bowen (Hertford)
Squire, Robin	Wells, John (Maidstone)
Stanbrook, Ivor	Wheeler, John
Stern, Michael	Wiggin, Jerry
Stevens, Lewis (Nuneaton)	Wilkinson, John
Stevens, Martin (Fulham)	Winterton, Mrs Ann
Stewart, Allan (Eastwood)	Winterton, Nicholas
Stewart, Andrew (Sherwood)	Wolfson, Mark
Stradling Thomas, J.	Wood, Timothy
Sumberg, David	Woodcock, Michael
Tapsell, Peter	Yeo, Tim
Temple-Morris, Peter	Young, Sir George (Acton)
Terlezki, Stefan	Younger, Rt Hon George
Thompson, Donald (Calder V)
Thompson, Patrick (N'ich N)	Tellers for the Ayes:
Thorne, Neil (Ilford S)	Mr. Jim Spicer and
Thornton, Malcolm	Mr. John Stokes.
Thurnham, Peter

NOES
Alton, David	Sheldon, Rt Hon R.
Ashdown, Paddy	Skinner, Dennis
Hoyle, Douglas	Smyth, Rev W. M. (Belfast S)
Hughes, Simon (Southwark)	Steel, Rt Hon David
Kirkwood, Archibald	Thorne, Stan (Preston)
Madden, Max	Wainwright, R.
Maxton, John
Meadowcroft, Michael	Tellers for the Noes:
Penhaligon, David	Mr. A. J. Beith and
Powell, Rt Hon J. E. (S Down)	Mr. James Wallace.

Question accordingly agreed to.

Resolved, That this House, recognising the vital role that a closely knit European Community could and should play in world affairs, congratulates both the Prime Minister and Her Majesty's Government on their continuing efforts to ensure a strong voice in Europe for Britain and that all necessary changes are made within the Community to sustain respect for that institution and to enhance its authority both internally and externally.

Mr. Keith Best (Ynys Môn)

On a point of order, Mr. Speaker. I seek your guidance on the procedure of the House. We have just voted on a matter of considerable importance. The motion congratulates my right hon. Friend the Prime Minister and the Government on their continuing efforts to ensure that we have a strong voice in Europe. Only 17 Opposition Members voted. As I counted only a few more than 17 sitting on the Opposition Benches during the debate, I realise that the debate does not arouse the excitement of the Opposition. I am confused whether that means that the Opposition are unable to make up their mind about the matter, or—

Mr. Speaker

Order. I do not think that we want to have points of order on such matters.

Mr. John Golding (Newcastle-under-Lyme)

Further to that point of order, Mr. Speaker. Is it not a fact that the Opposition want to get on with the Third Reading of the Ordnance Factories and Military Services Bill?

Mr. Speaker

Indeed it is.