BRITAIN AND THE COMMON MARKET

HL Deb 01 August 1962 vol 243 cc352-400

Debate resumed.

8.2 p.m.

LORD COHEN OF BIRKENHEAD

My Lords, my theme when we adjourned was the mutual recognition of medical and other para-medical qualifications, and I was expressing my anxiety at their acceptance for practice in this country, irrespective of merit or needs, which is envisaged in Article 57 of the Treaty of Rome, for in this field we cannot rely on the qualified majority decision which is there needed; and such mutual recognition is not, either by history or by precedent, a necessary part of even a political federation. The United States of America constitutes a political and economic union much closer than anything now existing in Western Europe. Nevertheless, each individual State retains its control of licences to practise medicine in that State. With a New Yank licence you cannot practise in California, and vice versa; and the same is true of the Provinces of Canada and of Australia. Each State and each Province, too, has its own disciplinary arrangements. My plea is that if there is to be any substitute for present procedures in this country it should seek to maintain the safeguards which they provide.

My Lords, I fear I have spoken at too great length, and I have not touched on how, in my view, the situation might even now be righted. This is a matter for further consultation with other bodies, which I hope will take place as soon as possible. Yet I make no apology for having dealt with a topic which might appear to your Lordships to be negligible and even expendable, in relation to the vast canvas of our national scene. For I hope that in our negotiations for entry into the European Community our Ministers will never forget that this is a matter of vital importance to tens of thousands of the citizens of this country who believe, with deep conviction, that the evolution of our standards of medical education and practice, of our unique standards of entry into the medical profession, and of professional conduct, reflect the peculiar genius of our people to pattern a way of life according to the needs of our nation as a whole. Since I cannot emulate the sparkling and persuasive oratory of the noble and learned Viscount the Leader of the House, I can, at least, plagiarise him. May I, substituting medicine for law in some words which he uttered only a fortnight ago in welcoming the noble and learned Lord on the Woolsack, remind the House that the practice and ethos of medicine in this country is not something that you study; it is something more than knowledge; it is something that has given to this country much that makes it itself.

8.5 p.m.

LORD COUTANCHE

My Lords, I feel that I should crave your Lordships' indulgence if I speak briefly upon the interest of the Channel Islands in the present negotiations rather than upon the much larger field that has been covered in the debate up to this moment. The export of the produce of the Islands is of vital importance to their economy. Those exports we in the Islands call agricultural, but in fact I think scientifically they are horticultural. I know that at the present time the position of horticultural exports in the whole Common Market scene is most uncertain—not uncertain in the sense that those who are negotiating do not know exactly where they are going, but in the sense that many people who are affected by those negotiations are not yet fully informed as to what will happen.

I should like to point out that in accordance with the Charters which we in the Channel Islands are privileged to possess, we are entitled to export into this country goods of the growth and manufacture of our Islands free of any customs duties. I remember some time ago the noble Viscount, Lord Alexander of Hillsborough, who leads the Opposition, raised in a previous discussion the question of the Channel Islands, and I felt that it would be right that I should come here to-day, on his Motion, to express exactly, as I understand it, the position of the Channel Islands in these negotiations. In virtue of our—may I call them charter "privileges", rather than "rights", we are entitled to export into the United Kingdom the goods of the growth and manufacture of all the Islands, free of all duties and customs. These rights flow from historical reasons. They are of great antiquity. The greatest of all the Charters is the Charter of Queen Elizabeth I; but it was only one in a long line of Charters, the first of which began with King John and was granted ten years before Magna Charta. So that there is at least antiquity in our claim.

What is the effect at the present time of that position, secured to us by innumerable Charters and always observed by Her Majesty's Government in this country? For a long period of time the existence of these Charters, whilst always known and respected, was not of any great practical importance; but suddenly, in the year 1932, this Parliament passed the Horticultural Products (Emergency Customs Duties) Act and a large number of horticultural products became overnight liable to duty. The position of the Channel Islands was at once accepted, thanks to the kindly intervention of the Home Office, by the Board of Customs, and little, if any, difficulty arose. The Islands responded—and I had the honour to be in a position of trust at the time—in a way which I think was very right and proper. We passed laws, which were confirmed by His Majesty in Council, which imposed upon the import into the Channel Islands of similar goods exactly similar duties, so that any encouragement to use the Islands as a "back door" into this country was obviated. At the same time, and in token of the same spirit, the Islands declared their desire to increase the import into the Islands of goods of what we then proudly called Empire origin; and we passed the necessary laws to impose duties upon foreign goods on their introduction into the Channel Islands. These were exactly similar to the duties charged in this country upon similar goods of the same class and description from the same place of origin.

From 1932 onwards a period of great prosperity for the Islands has resulted. The United Kingdom is our only market. Our goods, owing to a happy climatic situation, are early and hardly enter at all into competition with United Kingdom-grown goods. But the authorities of this country—and I say this with great thankfulness—have always so operated the import duties and, when there are such things, quotas (and may I say, with great thanks, that the National Farmers' Union have always helped us) that the administrative and fiscal arrangements arrived at, while not hurting in any way the agriculture or horticulture of the United Kingdom, have been of immense help to the Channel Islands. For that we are exceedingly grateful.

My Lords, that is the present position. I am old enough to remember that it was not always so. I am not going to weary your Lordships with a tale of woe, but before 1932, when we were in intense competition with the neighbouring coast of France, where exactly the same goods were grown under conditions exactly similar to our own, many a year was for us a time of great agricultural adversity. The position I have outlined was the position when the United Kingdom started to think of negotiating on the question of entering the Common Market. I had the honour at that time to be still Bailiff of Jersey and ex-officio President of the Tariff Council entrusted by the States, or Parliament of Jersey with the conduct of these negotiations. I was closely concerned with them from the very beginning.

In this context I should like to express the thanks of the Islands for the wonderful help that we have received from the Home Office and the Ministry of Agriculture in all these consultations. These consultations have continued right up to the present time. Indeed, not many weeks ago my noble friend Lord Waldegrave was in the Island giving us what help he could. I am quite sure that in those who have followed him we shall have some good friends. May I particularly welcome my noble friend, Lord St. Oswald, who will help us in future, if for no other reason than that he counts among his forbears a distinguished Jersey ancestor.

That is the position, a very favourable position. The United Kingdom is our only market. I was in the Islands until this morning, and I made such inquiries as I could in order to bring my knowledge up to date. My Lords, it is quite firmly the view of the Islands that we have no option whatever but to follow the lead of the United Kingdom in this way. I wanted to say to-day that Parliament and Her Majesty's Government, in the negotiations which they are conducting, are conducting them not only on behalf of those Who live in this country, but also on behalf of those of us Who are proud to live in what is the most ancient possession of the Crown of England. We are full of absolute and complete faith in the fact that our interests will be watched and safeguarded as Closely as those of Her Majesty's subjects in this country.

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, I am very interested in the noble Lord's speech. Could the noble Lord tall us whether the inquiries he has made show any signs of anxiety among the growers of the Channel Islands as to what will be the effect on their exports to us of the free entry eventually of goods from the Six?

LORD COUTANCHE

Indeed, I can say there is great anxiety, but, as I have said, for reasons which are well known we are so closely associated with the economy of the United Kingdom that it would be impossible for us to take another course. There is, as I say, anxiety, and I am grateful for the fact that the consultations which we are continuing to have are helping to alleviate that anxiety to some extent. In that connection, it is my earnest prayer to Her Majesty's Government at this moment——

LORD MORRISON OF LAMBETH

My Lords, I am sorry to interrupt. As the noble Lord knows, as a former Home Secretary I took a strong interest in the wellbeing of the Channel Islands. Would the noble Lord be good enough to say whether, if Her Majesty's Government were disposed to bring in legislation to establish the Channel Islands as part of the United Kingdom, it would be likely that the Channel Islands would object? If this happened, it might help in this situation. I hope the noble Lord will be able to say whether he feels the Channel Islands would, or would not, like it.

LORD COUTANCHE

I think the answer to that question is this. I had the great privilege of working with the noble Lord when he was at the Home Office. I think the position of the Channel Islands in this matter is beyond dispute. A political friend of mine in Jersey used to say, with great truth, that constitutionally it must be remembered we were "on the winning side in 1066". We are content to stand upon that position, and, so long as Her Majesty's Government are good enough from time to time to spare distinguished members of their ranks to come to talk to us and help us and reassure us, we have no fears. But I think that to follow the course suggested by the noble Lord, Lord Morrison of Lambeth, might present very great difficulties. I am glad of these interventions, because I ask that these consultations shall continue.

Having said that on behalf of the Islands, may I just express a personal opinion? I live in a place in the Islands (as my noble friend Lord St. Oswald knows, from his own sight quite recently) from where I look out of my window on to the neighbouring coast of France practically every morning of my life. I have lived all my official life, in fact nearly all my life, in very close contact with the Continent. My official work has taken me on missions to many countries of Europe and I think, with great humility, I may claim to know something of the conditions as they exist on the Continent. For myself, I believe that it is to the long-term advantage of this country to join the Six in the European Economic Community. In saying that, I should be failing in my duty if I did not say that I believe there will be a difficult period of adjustment, which may be long, but I like to think that in the long term it will be worth it. But I cannot believe, if reasonable terms and conditions can be worked out, that it can be anything but to the lasting good of this country and also, therefore, necessarily of the Islands, that we should be part of the Community.

To that, my Lords, I would make two reservations and they are very solemn ones. I was brought up to believe in the greatness of the British Empire. I accustomed myself afterwards to believe in the greatness of the British Commonwealth, and I should be very loath to do anything, however advantageous it might be to this country or to the Islands, which could possibly weaken the Commonwealth in any way. Secondly, I was brought up to believe in the greatness of the British Constitution, and in the sovereignty of this Parliament. It is a long time since I studied Anson and Dicey and the great constitutional writers of this country, but whatever advantages there might be for this country and for the Islands, I should be very unhappy if I felt that any action we were taking could in any way detract in an essential part from the sovereignty of this Parliament.

8.22 p.m.

THE EARL OF HUNTINGDON

My Lords, it is refreshing to have a subject like this, which is not as yet a Party political issue; in other words, we can say and lead out our convictions and our prejudices, without any embarrassment to the Party Whips. But the thing I would stress more than anything else is that this is not only a matter of economics, and it would be a great mistake if we tried to decide it entirely on the price of butter. I very much appreciated the speech of the noble Earl the Foreign Secretary, which seemed to put the whole subject in perspective. I should like to say how much I agreed with him, and I would emphasise the point that it is not a choice between the Commonwealth and Europe: it is something quite different.

The second thing we should remember is that, so far as I know, there has never been any question whatsoever of a Common Market in the Commonwealth. There has never been a question of free trade.

LORD MORRISON OF LAMBETH

Quite right.

THE EARL OF HUNTINGDON

There has never been any proposal for an economic tie-up of any sort, kind or description. Therefore, we are really faced with the choice, while keeping the links with the Commonwealth, either of joining what one might call the new Europa, or of standing alone from the Continent, as has already been said in the debate, as an off-shore island. I yield to nobody in my admiration for the Commonwealth as a great institution. Indeed, one of the things of which we in this nation should be most proud is, I believe, the fact that we converted what was an Empire gained chiefly by force into a Commonwealth which has held together by voluntary ties, by friendliness and, to a certain extent, by mutual interest. I am very proud of that. But we should remember that these ties are fairly fragile, tenuous, loose ties, and recently we have lost one of the great Dominions. Who knows when we may lose another?

I think we should remember, too, that as time progresses these big countries will become increasingly industrialised—that is inevitable; and the more industrialised they become, the less will they want to buy our manufactured products; the less, also will there be a need for them to give us preferences. As has been said this afternoon, preferences will in any case, probably, ultimately wither down, and almost cease to exist. Those are the facts and the background we must remember, when we make, if we do make, our great decisions on these steps. But I suggest to your Lordships that, if we do join this Common Market, we should do so wholeheartedly.

As I understand it, because of the difficulties of the Commonwealth trade—and particularly, I think, New Zealand, which presents probably the most difficult problem of all, because of its exports of butter and other things—it is obvious that the nations of Europe must give us time to adapt. That we must ask for. Otherwise, we must not try to make too many exceptions. As I understand the scheme, which is complicated enough, goodness knows!, the idea behind it is that there is this unity of nations, which will ultimately abolish the Customs and frontiers between each other, will have free trade and so forth, and will have a uniform tariff around them. Their gigantic size gives them a very strong bargaining position in the world. But every time an exception is made, their bargaining position becomes less and less, and if too many exceptions are made there will be no advantage in this scheme at all. I believe that we must remember that, before we put too much emphasis on trying to press these European countries to give us concession after concession. We must accept the scheme, but, naturally, having regard to our own special interests, and to the necessity of having time to adapt the economies of ourselves and other countries.

As I said earlier, I do not think this matter which has been very thoroughly explored, is entirely an economic one. I think we are witnessing here the birth of a great new force, a great new power. It is a power which I think it was said if the United Kingdom joins in, will have 250 million people, which is an enormous number. It will be a force much more powerful than the United States, and possibly more powerful than the Soviet Union. It is a tremendous force, and I myself feel that it would be a great pity, a great tragedy, if we were left out; if England with all her knowledge, experience and political wisdom, did not take some hand in shaping this new development. It is, as the noble Earl the Foreign Secretary said, a great adventure, and I think that to be left out of this adventure would be not only economically disastrous but sad, from the cultural point of view, and from every other point of view that can be imagined. Therefore, again I give it my support.

Some people are agitated, I gather, because they are frightened of joining what are in some cases, perhaps, rather reactionary and difficult régimes. One hears people saying: "Do we really want to joint in, perhaps under the influence of de Gaulle, who has almost a dictatorship in France? Do we want to be under Adenauer, in Germany?" But, my Lords, those are very temporary; after all, we are all temporary inhabitants of this world. So the present set-up will not last for very long. We are building something for the future, not just considering the nature of the political set-up in each individual country at the moment. That will change, and I do not see why it should not change into unity on progressive lines.

My Lords, I was trying to remember—and I think that this is a wholesome thought—whether there was anywhere in history an instance in which a number of countries had joined together without achieving great benefit to themselves, in prosperity, security, power and influence. They have not always used the power to the best advantage of their neighbours; nevertheless, it has always been the case, I think, that they achieved it. We can think of England. What should we be like now if we had continued as a small country fighting Scotland and Wales? We should not have had the great events of our history of the last century or so. Then there was France with her dukedoms; and Italy with her little states; Germany divided, and so forth. Would any of those countries have become great if the smaller states within them had not united? Above all, there is the United States of America, which is one of the greatest.

That is why, as we have heard, the political talks are going on; and I think that in those political talks there is a tremendous opportunity for a tremendous future. We are in the position now of the inhabitants of some such State as Virginia or Massachusetts before they were united. We are frightened, as they were, of giving up sovereignty to a Federal Government. But, my Lords, if we look back on the years which have intervened, if those States could have foreseen the results of Union when they were fearful of it, would any of them have said, "We should like to remain small, isolated States "rather than join in the Union of the great continent of America? People naturally have very isolationist tendencies: they are frightened of giving up sovereignty, even a small amount. But I suggest that by giving up these little bits of sovereignty we really get a much larger sovereignty and a more important one.

I do not want to repeat what I said the other day in the debate on International Affairs, but I should like to remind your Lordships of the fact—it is a formidable fact—that we have here a great alliance between Germany and France, a gigantic coalition coming into being. I should have thought that this country would be very much safer as one of those working in that alliance than an island outside it, watching this huge force in Europe, growing and possibly coming into economic—and even military—conflict with us. That would be a disaster. Lastly, there is this great thing about the unity of Europe. In it we build up great strength able to face Russia. We know that the Russians are very much against the Common Market. They see in it a threat to them, and that it will curtail their arguments. I should have thought that that would be no argument against the Common Market. My Lords, I do not wish to keep you at this late hour, but I would say again that if we do not go into this, it would, in my view, be a tragedy, and our descendants, if there are any, would blame us for ever and ever.

8.33 p.m.

LORD MERRIVALE

My Lords, at the outset I should like to wish the Lord Privy Seal every success during these coming four days of difficult negotiations. I feel confident, however, that he will assert himself as an able negotiator in the same pleasant way that, according to certain French authoritative sources, he has become appreciated and esteemed on the Continent. I will assume, then, my Lords, that he will be able to negotiate equitable terms for this country, and I shall therefore took ahead in my consideration of this matter. As was said last week by the Chancellor of the Exchequer, our entry will bring a new surge of opportunity and a new wave of competition. It is, therefore, to that aspect of the problem that I shall direct my attention this evening, particularly with regard to the rationalisation and adaptation which will become necessary for smaller businesses.

Experience on the Continent has shown that joint action by grouping undertakings offers most advantages for the solution of problems which arose during this period of evolution. Some people in this country, as has been stated, have certain misgivings about our entering the Common Market, and that is why I feel that greater consideration might be given by Her Majesty's Government, and also by industry at large in this country, to this aspect of the matter. I feel that it is not too early for small and medium-sized undertakings to consider the rational planning which will be necessary and which will involve a process of adaptation. I do not propose to go into the question of large undertakings, because they have adequate economic potential, and shall confine my remarks to undertakings which employ, say, fewer than 500 persons.

I feel it may help—and I crave your Lordships' indulgence in this respect—if I mention what has been done in one member state of the Community— namely, France. I believe that similar action is being taken, or has been taken, in Germany and Belgium also, though I am mainly aware of what has been done in France. The French Government, recognising the need for the development of industry, trade and agriculture, and the need for their adaptation to the European Economic Community, felt that it should encourage and facilitate the grouping of smaller businesses—that is, principally smaller businesses—in order to improve productivity, on the one hand, and to lower their costs and prices, on the others. Therefore, the efforts to that end which have been made in France have been due to sponsoring by the Government or to initiatives taken by trade associations.

I would classify these under four headings. The first is co-operation between large groups and smaller firms. I understand that that form of activity has developed along the following lines; that is, the organisation of production, commercial expansion, management, human relations, and social problems. Secondly, there is Government initiative, which has taken the form of starting regional working parties of heads of firms, under the guidance of an experienced monitor, in which the discussion and solution of problems relating to management and increasing production have been aired. Thirdly, there are sub-contract exchanges. Such exchanges have been set up in various provincial cities for the mechanical and metallurgical industries, and these exchanges advise and assist with detailed information on production capacity available within the firms of their members. For instance, specialisation and co-operation between large groups and smaller businesses has been facilitated in that way.

Fourthly, I would come to what I feel is a very important point: Government assistance. This is provided in the form of fiscal and financial advantages to associated firms who have subscribed to an agreement concluded between the State and themselves. To qualify for this form of fiscal and financial advantage, the aims or objects of these associated firms must be market research, sales promotion, the adaptation of one's products to the new market conditions, the granting of a warranty of quality and, finally, those improved managerial methods which correspond to these objectives. I would add that the basis of this joint action is that firms should retain their independence; and I feel that that is true, knowing Frenchmen fairly well and how individualistically-minded they can be—which is borne out if one remembers that around 50 groups of firms have entered into such agreements with the State. The essence of such measures is that they should be of a reasonably temporary nature, and that they should constitute the best means of coping with the phenomena of adaptation.

When the noble Lord, Lord Aldington, spoke on Monday he referred to competitiveness in private industry and said that this had not come about without some help and influence from the Government. However, he went on to say, further, that he would guess that there was much more (that could be done and would be done. In one respect I would agree with him; in another, I hope that Her Majesty's Government will consider carefully tile problems of small and medium-sized undertakings which will necessarily arise if, as I hope, we enter the Common Market. My Lords, I feel that this is an important aspect of the general problem. It is one which was considered this morning at a meeting of the Association of British Chambers of Commerce, a meeting which I attended, and it is one which they intend to look into very fully.

To end, my Lords, I should like to refer just for a few minutes to a matter which was not mentioned in the Lord Privy Seal's statement of October 10 last year but which was in the one he made at Luxembourg on July 17 this year. It is Cmnd. 1790, and is on the question of transport. Paragraph 7 of that Command Paper mentions the question of transport charges in relation to coal and steel and says that E.E.C. discussions may affect our transport policy as a whole. Therefore, with your Lordships' permission, I should like to refer to two recent decisions which would seem important in this context. First, the E.E.C. Commission has recently submitted to the Council of Ministers a fairly comprehensive action programme, divided up into seven chapters, for a common transport policy. That is not a decision; it is more of a statement: but what is a decision is a recent ruling by the Community's Court of Justice on the necessity of publication or communication of schedules, prices and tariff arrangements. This ruling of the High Court has made it possible, I understand, for the High Authority to take up their work again in the field of transport, because I understand that their work has been held up for the last three years on account of a difficulty in the interpretation of Article 70 of the Treaty of Paris—not the Treaty of Rome, but the Treaty of Paris.

The point I wish to make concerns the transport of coal and of other commodities or products by pipe-line. It is a fact, I believe, that a large number of gas or coal pipe-lines, and also pipelines for the carriage of petroleum products and so forth, are in operation, under construction or being projected in various parts of Europe. A few minutes ago the Pipe-lines Bill received the Royal Assent, and I therefore feel that the day cannot be too far distant when we shall be exporting commodities by pipe-line to E.E.C. countries. I know that, for one, the Coal Board (I think it is no secret) are keen on transporting coal by pipe-line, and it may well be that coal could be exported to the Continent by such a means. Therefore I should like to ask Her Majesty's Government whether they are now in a position to contribute to the formulation of a common transport policy regarding transport by pipe-line, or whether, till we join the three Communities, we can act only as observers.

As I understand the action programme to which I referred earlier, it proposes to tackle certain problems arising out of the extension of pipe-lines on the Continent. I presume, therefore, that this will be in Chapter V—I saw no mention of it under the various headings; pipelines are not specifically mentioned, but presumably it will be in Chapter V—on An approximation of operating conditions and structures as between different types of transport. In conclusion, on this point I would therefore sincerely hope that development on both sides of the Channel will proceed harmoniously, for it is essential that there should be intelligent planning and co-operation with regard to the development of pipe-lines.

8.48 p.m.

LORD ROBERTSON OF OAKRIDGE

My Lords, I feel that by this time of the night all the arguments for and against our joining or not joining the Common Market have been well paraded, and that the noble Lords who are still here will not wish me to parade them all over again. I feel that I must just state my point of view on the general question briefly, as a prelude to what I really want to say at the end of my remarks, which is something which I think has not been said already. I will state my point of view very bluntly and without much argument, but I hope that noble Lords will understand that I am doing it for brevity and not because I think that the problem is an easy one and that I know all the answers, Which I certainly do not. When everything has been said, it seems to me there remains one plain, cold fact, and that is that if we do not join the Common Market, the Economic Community, the Community will go ahead without us; it will succeed without us; and it will grow in exclusiveness, to our detriment, because our voice will not be heard in its councils. That is how it seems to me. Through the ages we have prided ourselves on our insularity. That has now virtually vanished before the advance of modern invention. The strength of our sea power has diminished in consequence for the same reason. Our Empire has gone, not to return, and the Commonwealth is not a substitute for it, as some people seem to think.

So it seems to me that in this modern world these Islands are too small to stand alone. I think the noble Viscount the Leader of the Opposition said it was a very fine thing to stand alone—and so it is; but if one stands on a burning deck too long the effect is inevitable. I feel that if we try it we shall just become an economic backwater and a political lightweight. I think that the noble Earl the Foreign Secretary said we shall just be an off-shore island, which is much the same thing only a more polite expression. Of course, as Foreign Secretary he has to be careful what he says when the Government are still at the negotiating table, whereas a humble Cross-Bencher like myself can scarcely do harm by saying it. It might even do a little good at a time when so many distinguished gentlemen—men for whom one has great respect, and in one case, at least, coming from my own erstwhile profession—are trying to frighten the daylight out of the Government and to push them in exactly the opposite direction.

Not only do I think that we have to enter Europe, but my own opinion is that we made a mistake in not accepting the invitation to go into Europe when it first came to us. In 1951, when the European Coal and Steel Community was set up, we were offered the leadership of Europe on a plate; I am sure of that. Germany had only just regained he sovereign independence and escaped from the clutches of the military governors; France was distraught. The other countries were openly saying that they would like Great Britain to join the Community and to take the lead. But no; we were too haughty. The leaders of industry and commerce in the country looked down their noses and said, "It will never work", and the great Departments of State shook their heads and said it was much too difficult; and our political chiefs, with great respect to them, were far too busy with two General Elections following swiftly one after another to pay much attention to this difficult problem. And so the offer was not accepted and the chance was not taken.

The offer that comes to us now is a very different one. We are not offered the leadership of Europe specifically—I repeat, specifically—but I will come back to that at the end of my remarks. Of course, as the noble Viscount the Leader of the Opposition said, we must not rush at it. Festina lente was another expression which was used. Certainly we must not rush at it; but if we wait another ten years the offer that we are likely to get will be a great deal less palatable, I think, than the one that we have in front of us now. That is how it seems to me.

Of course, we must not consider just our own interests. As the noble Lord, Lord Morrison of Lambeth, said, we are entitled to think of our own interests. Of course we are; but we must not think only of them. We must think also of our friends and their interests. Australia, New Zealand and Canada are the best friends we have in the world. We cannot possibly, of course, afford to lose them, and we must see that their legitimate interests are not gravely damaged. And it is very right that at this time there are very close negotiations going on over in Brussels, and in those negotiations we must be firm. Of course we must be firm and see to it that these interests are properly safeguarded. We must be firm, but not, I think, unreasonable. As the Daily Telegraph so rightly and timelily, I thought, said to us last week, we are, after all, negotiating not with enemies but with friends, and if we seek to have 100 per cent. guarantees for every interest in this country and in the Commonwealth there will, of course, be no agreement.

We are told that these negotiations may fail, and one accepts that; they may fail; but I feel and I submit that we must also accept that if they do fail it will be a calamity for this country. That is, at least, how I feel about it. I should like to join with the many others who have expressed good wishes to our negotiating team in Brussels and to say, as others have said, that I feel very happy that we have been able to field such a first-class team. I have the honour of knowing one or two of them, and I am sure that it is a first-class team under a first-class captain, which gives me hopes in other directions: possibly Ted is a good name for a captain.

But while all this is so, I do not myself feel that it is right to speak of these problems concerning the trading relations of this country with Australia, New Zealand and Canada as if they put the whole of the Commonwealth in peril. Surely it is not quite like that. The Commonwealth—and in this I share the view expressed by the noble Lord, Lord Citrine—at the present time is in the melting pot. It is very difficult to see what is going to happen in the future, and a lot of wise statesmanship will be required to guide it to a future of permanence and strength, and a lot of care is necessary at this critical time in our dealings with the Commonwealth. But whatever does happen to it or does not happen to it, it is not at this time, and is not likely to become, a rigid trading cartel—not even Mr. Diefenbaker says that—any more than it is likely to be a military alliance. It may be right to say, as Sir Winston Churchill said, that the Commonwealth is buttressed by our pattern of trade within it; but that is not to say that that pattern can never vary. It has varied from time to time in the past and it no doubt will vary in the future.

As to the question of sovereignty and its effect on the Commonwealth, I think that the noble Earl the Foreign Secretary has really dealt with that; but, for myself, I have always felt that anything that President de Gaulle is likely to accept for France is unlikely to cause us much indigestion, either in this country or in the Commonwealth. On the whole Commonwealth question I feel this: that the future of the Commonwealth, whatever it may be, is not likely to be enhanced by an altruistic sacrifice on the part of this country of the future prosperity and political influence of Great Britain.

That is my view, which I felt it necessary to state not because I think it very important but because it is a background for what I want to end with. I believe that the biggest difficulty in this matter, the biggest difficulty which we shall encounter if we enter the Common Market (as I believe we must), lies within ourselves and our national character. We have, as I have said, for years prided ourselves on our insularity. That is of much less consequence now, and, in parenthesis, will be of even less consequence when the Government comes off the fence about the Channel Tunnel—Lord Gladwyn is not here, I see! Geographical insularity has vanished in consequence, but the psychological insularity remains.

I give you as an example the behaviour of our troops, Army and Royal Air Force, in Germany at this moment. I am not thinking of the misdeeds of a few young men in the streets of Minden or elsewhere: I am thinking of the attitude of the officers and men of our forces in Germany. With very few exceptions, they hold themselves aloof from the people and life of the country in which they are serving. They imprison themselves in their own insularity and self-sufficiency. Your Lordships do not expect to hear me criticise the Armed Forces—I normally do not do so—but I give this as an example of what I believe is a national characteristic, almost a national philosophy. "I hate all ' wogs ', and they start at Calais "—that is at the back of it, and at the back, I think, of a little of the opposition in this country to the Common Market. I naturally wish it to be understood that I am not referring to anything said in this Chamber.

Moreover, we think that we understand the Europeans, but we do not; not nearly so well as they understand each other. We forget or ignore the fact that these countries have lived side by side through the centuries, with no Channel separating them and with common frontiers, frontiers which have ebbed and flowed, and it is only natural that they should understand each other very well indeed. This is what leads us into being greatly surprised when these countries suddenly come to an agreement with each other, almost, as it were, behind our backs, and when we never thought they would do it—and not only come to an agreement, but make that agreement work.

My Lords, I feel vary strongly on the subject. These things must change if we are really to make a success of ourselves when we enter the Common Market. I hope that the Government are thinking about these things and are prepared to give the country a lead. In these days we never do anything unless the Government give us a lead. I know that the Government are planning the consequential measures that it will be necessary fox various Ministries to take to implement our agreement to enter the Common Market. We are told that they are planning a campaign, when agreement is reached, to put the whole of the facts before the people and to get the people behind them. That is, of course, a very right and proper and necessary thing to do; but I hope that the Government will go further: I hope they will speak to the people in no equivocal voice, and will point out to them that this is a turning point in our history, and that we really have to reorientate our philosophy as a nation, if we are going to make a success of it and of ourselves.

Not only must the Government do this. The great political Parties will be having their meetings in a month or so, and by then it may well be that the basis of an agreement will have been reached. If they feel that that basis is satisfactory, I hope that they will say much the same things to their followers. Of even greater consequence is the T.U.C. I listened with great attention to what the noble Lord, Lord Citrine, had to say about the attitude of the workers to this matter. There is no doubt that there is much scepticism and a great deal of reserve among them. But I believe that if their own leaders, men like the noble Lord, Lord Citrine, will put the real facts to them, and tell them that this is a turning point in our history, the workers will readily accept the logic of the facts. That goes for my old friends, the railwaymen, who are among the most sceptical of the lot at the moment.

That is what I particularly desire to say to your Lordships to-night. To sum up, I feel that if we are going to join the Common Market, as I am sure we should, we shall have to learn to become good Europeans. We shall have to learn to speak as Europeans, not as "they" but as "we". If we do that, I feel very sure that there is before us a future of increasing prosperity and that politically there is a future before us of a leading position in Europe and in the Commonwealth.

9.5 p.m.

LORD PEDDIE

My Lords, my noble friend Lord Longford has asked me to take his place at this point in the debate, and this I gladly do. Many of your Lordships who have taken part in this debate have indicated the public confusion that exists to-day over the problem of the Common Market. No doubt confusion does exist. At one time there was a complete lack of information concerning the Common Market, but to-day we can almost complain that there is too much. But all the information that is circulated is intended to promote preconceived ideas. My own view is that, whatever may be the merits or demerits of Britain's joining the European Economic Community, the reasons for the nations of Europe joining that Community are not hard to find. For generations they have suffered from nationalism, trade barriers and distrust that left a legacy of hate that culminated in two great wars.

As the noble Lord, Lord Robertson of Oakridge, said a few moments ago, Britain had an opportunity of taking the leadership of Europe at the end of the war, when the nations of Europe not only felt the need but had the deep desire to get closer together. We did not accept that leadership. At that time many thought that the Common Market and the association of the European nations could not succeed. Well, so far they have given indications of success. I know that it is easy for us to job backwards, but we have to remember that the traditional attitude of Britain over the years, to prevent the emergence of any one, single dominant Power in Europe, must have had some influence upon our attitude at that time. Probably in the light of the circumstances at that time it might have been right for Britain not to jump into the Common Market.

As more than one speaker has indicated and as the noble Earl, Lord Home, made clear in his speech to-day, the economic and industrial conditions of this country have changed radically. We have now a highly industrialised economy geared to a larger population than that of the 50 million of these islands. In the days since the end of the war, recurring crises over our balance of payments have given clear indication of the need to widen the area for the sale of our goods. In close geographical proximity to Britain we have the European Economic Community, which offers a market of 170 million people. The attraction does not lie in the possibility of exports to those 170 million people, but in the fact that it provides the necessary wider basis for our own industrial economy.

I recognise that many of my friends who oppose the Common Market argue with some force that outside Europe there is a great potential of nations with great populations who need the goods that Britain can produce. I make particular reference to the emergent nations. According to the critics of the Common Market, they offer opportunities for the development of export trade greater, in the ultimate, than those of Europe.

We have all recognised, as has been expressed many times in this House, the need for providing assistance and aid to the under-developed countries. We recognise that such aid is in our long-term industrial interest. At this moment, however, those nations offer little or no opportunity for substantial development of trade with this nation. I have had the opportunity on many occasions over past years of visiting many of those countries, often in the hope of being able to stimulate and develop trade. Until it is possible to secure a substantial economic development of those nations, trade in any substantial quantity is not possible, because trade is a two-way operation. It depends upon what they can sell as well as upon what we can supply.

This House has, quite rightly, devoted considerable attention to what, to my mind, is the major problem in all this consideration of the Common Market, and that is the Commonwealth—the Commonwealth that is rooted in the British sense of things deeper than anything presented by trade and all its possibilities. We have to ask ourselves at this point in time whether the Commonwealth offers a ready-made alternative to the Common Market. Can we, indeed, describe the Commonwealth as an economic entity that would provide Britain with a basis for an expanding economy? If the answer is, "Yes", and then we should have seized the opportunity long ago.

From the figures of trade, which I shall not weary the House in presenting, we see that Commonwealth trade is, indeed, a substantial proportion of British export and import trade. There is, however, something that we must observe about these figures as compared with the figures of trade with countries within the European Economic Community. Unfortunately, the figures of trade with the Commonwealth have shown a steady decline over the past few years. The figures of trade, both import and export, in countries of the European Economic Community have shown a slow but steady increase. It is also clear, and we must recognse it, that entry into the Common Market would disturb the existing preferential trade system Which was created at Ottawa in 1932. But the Common Market apart, even if there were no consideration of the Common Market, it is doubtful whether this system has any great future. In the post-war period, the percentage of Commonwealth trade covered by preferences decreased steadily. In 1948, between 54 and 56 per cent. of our imports from the Commonwealth benefited from preferences. By 1957, the figure had fallen to 47 per cent.

Another aspect of the problem which we have to recognise, in consideration of the Whole question of Britain's entry into the Common Market, is the fact that both Canada and Australia, two members of the Commonwealth, will have need to develop their own manufacturing industries behind tariffs and that, at the same time, it will not be possible for Britain to absorb all the commodities that the Commonwealth can export. Even if we were able to develop a new concept of a tight entity of Commonwealth trade, to which some of your Lordships have referred, I am positive that it would not be, and could not be, acceptable to the Commonwealth. At the same time, lit is only right that this House should have clear recognition of the fact that it is indefensible to regard Commonwealth relationships solely on a trade basis. The links constitute a much deeper attachment and, to my way of thinking, are rooted more in a political than in a trade concept. The noble Earl, Lord Home, has referred to the danger of presenting to the country the alternative of Commonwealth or Europe. If by any mischance this problem was presented to the electorate as one of Commonwealth or Europe, there is no doubt whatever what the public answer would be.

In the consideration of all these matters, I wonder, frankly, whether our British negotiators—and I, too, have personal knowledge of at least one of them who is a capable economist, with whom I was associated many years ago and for whom I have the greatest respect—recognise to the full, and express it in powerful arguments to those with whom they are negotiating, that Britain has as much to give as to get from the Common Market. I often wonder, as I am sure many electors wonder, whether the negotiations have been bedevilled by the extraordinary anxiety and haste on the part of Her Majesty's Government to find both a carrot and a whip to solve our economic problems. I hope that that is not the case, but I am quite sure that there are many in industry to-day who believe, probably wrongly, that the Government are actuated by those considerations and would appear to demonstrate it by their extraordinary anxiety to bring the discussions to a rapid conclusion.

I recognise that, as many speakers have indicated, the Common Market is no automatic solution for our ills. Entry into the Common Market would merely intensify the changes that we would have to make industrially and economically in any event. I believe that many of the difficulties which have been expressed in newspapers and by speakers throughout the country over past months have been grossly exaggerated. I know that there are great problems. One outstanding home problem is that of agriculture—and I speak as one who is a director of an organisation which probably has the largest farming interests in Britain, farming no less than 34,000 acres. We are quite conscious of all the problems that will result from participation in the Common Market, but we believe that those problems can be solved, and solved satisfactorily.

The question of sovereignty, which has been raised, is one that I simply cannot understand, because I see nothing new in restricted sovereignty. Indeed, I recognise that this country cannot pursue any independent trade policy, particularly in consequence of its obligations under G.A.T.T. Similarly with regard to defence, communications, currency and fisheries—all are restricted under treaty obligations. That is my non-legal approach to that problem.

There is, however, one aspect which deserves the attention of our negotiators. That is, how far we can be sure that the decisions that are made by the supranational authorities are truly democratic. We, at least on this side of the House, are particularly concerned with that aspect of the problem. That leads me to what I regard as an important point. How far does the Common Market offer benefits, as it obviously should to be successful, in terms of a higher standard of living for the ordinary people? How far does it offer protection for the consumer that ensures that the consumer secures the benefits that can be created by closer association with the European countries? The evidence is that in the European Economic Community, consumer interests have gone by default.

Over recent months, I have had close association with German co-operatives, and I have learned much of their reaction in that regard, to which, with your Lordships permission, I will presently refer. But at a time when Her Majesty's Government are declaring an increasing interest in the consumer I think it would be as well to have some declaration of protection of the consumer under our association with the Common Market. I make particular reference to the Molony Report, which states: The biggest question-mark hanging over consumer affairs is the possibility of the United Kingdom entering the European Common Market. Quite recently in the issue of June 23, from which I quote, a German Co-operative publication, Der Verbraucher, has this to say in making reference to the fact that agricultural marketing regulations under the Common Market are being drafted in such a way as to cause price rises in bread, bakery goods, eggs, poultry and pigmeat. A fortnight earlier the same journal had drawn attention to the probability of substantial increases in the price of rice. In many cases, so it stated, prices of rice are expected to go up by at least 10 to 20 per cent. The German consumer may face a 35 to 40 per cent. price increase, if not more. I quote: Clearly, these regulations reflect the voice of the European Economic Community farmers' organisations rather than that of the consumers! If I have, to give added weight to that—and I do so not in opposition to the suggestion of entry into the Common Market but because of the need for protection of consumer rights—I quote from a speech made but a few months ago by Dr. Mansholt, the Vice-President of the E.E.C. Commission, When addressing the first conference of consumers' organisations. It is exceedingly interesting to read his speech. This is what he said: … the consumers "— that is, the European consumers— were not well organised, as far as their representation within the Community was concerned. Consequently, they were not in a position to defend themselves against endeavours which were contrary to their interests. Dr. Mansholt went on to state that in the first three years since the Treaty had been signed the consumers had hardly enjoyed the advantages of the Common Market, in price reductions, which should have resulted from the decrease of duties, abolition of quotas, and rationalisation. On the other hand, he said, the producers did not miss any opportunity to attempt to make their influence felt by means of price agreements, cartels and monopolistic ties. My Lords, that is the position in Europe to-day; an indication that monopoly interests are becoming dominant. Yet, in spite of that, it is only fair for me to say that the German Co-operative Movement, recognising all these dangers, recognising the necessity for those in their organisation to fight against these interests, would welcome the association of Britain and the support of the British Co-operative Movement in urging our own country's entry into the Common Market; because, in spite of difficulties that exist at the moment, the possibilities are great.

I mention this merely to indicate the dangers that we feel are apparent in the present organisation of the Common Market, and I would hope that Britain herself, in the negotiations, and after the negotiations, would be quite conscious of the inherent dangers that can lie in organisations of that kind. I sincerely hope that Her Majesty's Government would not be associated with a Common Market created solely for the interests of monopolies. Speaking personally, I welcome any move that will break down trade barriers and create a closer unification of Europe. I recognise, too, that Britain cannot live alone; and neither can the Commonwealth. But we must not consider the Common Market as a funk-hole for a beaten and perplexed Government. I believe (that we should approach it rather in the larger sense, with recognition that it does offer opportunities of greater expansion and development of our own community.

I believe there are two fundamentals that must influence the attitude of our negotiators. The first is that Britain can give as much as she can get; and, secondly, I believe, and I should hope, that in all these negotiations, trade conditions and considerations apart, Britain will recognise the emotional basis of our attachment to the Commonwealth The concept of co-operation with Europe is in keeping with my philosophy, and I believe that a Britain associated with the Commonwealth, and retaining her Commonwealth links, could make a far greater contribution to the European Economic Community than a Britain bereft of such links. As more than one of your Lordships have stated, Britain cannot opt out of the mainstream of European development, and I believe that this is our opportunity. Let us make sure that, in seizing that opportunity, we make our true contribution in the sense of our recognition of democratic responsibilities in our association with the Market.

9.26 p.m.

THE EARL OF LYTTON

My Lords, before I start off on filling one or two holes, I should like to say something which, to my surprise, has mot been said before. Many of us have lost some of our greatest friends and our relations in two world wars, As Omar Khayyam says: Lo! some we loved, the loveliest and best I think if the dead could rise again now and see that Teuton and Frank have buried the hatchet they would say. "We have not died in vain". It is a remark able change on the European landscape.

I speak as a farmer and a retired economist, though perhaps I ought to say, as so many real economists are here, that I only taught the subject. The farming of this country has been transformed since 1947. Previously to that it was in decline for well over a hundred years. It is interesting to me that in 1846 a Conservative Government repealed the tax on imported corn, and it was not until 1947, apart from periods of crisis and war, that a Government under the Labour Party began the rehabilitation of British agriculture from top to bottom; and I think great credit is due to the Government of which the noble Earl, Lord Attlee, who is here to-night, was Leader, that that initiative was taken in that particular way, because it was not a way which is peculiarly a Socialist way. It was supported by all Parties and the Conservative Party have continued, extended and improved the measures in support of British agriculture.

I can still, however, point to land which has not been ploughed since the Crimean War and still other bits which have not been ploughed since Napoleon. The naglect was very great and it was largely in favour of the creaming of virgin lands in a way which would be regarded in this country now as arrant bad husbandry. The United States, as I understand, have mismanaged their land in such a way that an area one-and-a-half times the size of England has been eroded and made useless. That is dust bowl husbandry.

I personally have never thought that it was prudent even in our own interests to encourage that form of husbandry which plunders the earth. As we have reached such an advanced stage of rehabilitation of the farms of this land, it is a puzzle to me why people are afraid of joining a Community in which French farmers predominate as the farming community, because the French have protected their farmers from the time of Napoleon to this day. Why farmers should fear to come under the auspices of the French, when I think they would be 20 per cent. in the Community instead of 4 per cent., is a very great mystery to me.

Moreover, I do not understand what the National Farmers' Union is objecting to in general terms. It seems to me that if we let the French have their way—that is, if our negotiators let the French have their way—they will get a higher price level (that is what all the propaganda and argument is about) than we think proper. They may even make the Community largely self-sufficient in agricultural products. I understand that has been stated as the fear. Why should we English farmers object? There may be all sorts of objectors, but I cannot see why the farmers should be among them. I hope that this effort to stop the Community from being self-sufficient in agriculture will not be carried to a point Which brings us below the rewards to agriculture which we have had in ten years or more—fifteen years—of Labour and Conservative Governments. I do not think that any decision could possibly be based on what is best for British agriculture, but I merely put the point that I have been unable to see why representatives of British farmers should be anxious at joining a farming community which is largely French, with all that long history of protection.

It is quite obvious from what has been said in this House to-night, and what has been said elsewhere, that much of the particular form of help which the farmers get in this country it is politically impossible to continue for ever, even if it is necessary to keep up the price. Nobody minds if there is a threat to set an ad valorem duty on a Volkswagen that comes into this country, but here we have to go cap in hand for deficiency payments and grants every year, and every year it is a political issue; and the tradition of this country is cheap food. Therefore, I foresee (and I think it was clearly implied in what was said by the noble Earl, Lord Home) that we are not going to get this continued help if we are not in the Common Market. Therefore, I hope it is perfectly clear to all farmers in this country where their bread and butter lies.

I have just said that what happens to our farmers in this country cannot be a decisive factor. We are 96 per cent. an industrial country. Therefore it is a question of what is good for the rest. So much has been said that all I would do is to call attention to two points. Our industrial prosperity seems to me to depend more than almost any other country's on what is called the balance of payments, equating our exports and imports. To the best of my belief, we have been in recurring difficulties on the subject since the end of the First World War. There was that business of reparations, then there were the return to the gold standard in 1925, the "economic consequences "of Mr. Churchill, the gambling, the excessive optimism, the abandoning of the gold standard in 1931, the system of free imports without free trade put to an end in 1932, the traditions of a century abandoned. We have been in chronic difficulties over this because we have not a large, stable home market. That seems to me the basis of the trouble.

But I wish to reinforce and support what the noble Lord, Lord Citrine, said. I happened to be teaching economics between 1931 and 1936, and I did my best. It was the worst possible period of our industrial history in modern times. I came to the conclusion that the evil of mass, prolonged, urban unemployment was greater than the evil of war. We have had two terrible wars, but that was a period where a man might not get a job, when he was 25, 26 or 27 years of age and had never had a job, and that was true of many whole communities; one has seen them propping up lamp posts. I have often thought, after that, that this is the worst scourge in this country. We have avoided famine; we are not poor or hungry; but we have suffered some of the consequences of war and we have suffered the devastating, soul-destroying periods of mass unemployment. That seems to me the factor which should determine our going in—is it advantageous for the equitable management of regular employment?

I was wondering whether, in order to reassure the sensitiveness of the trade unions, the suggestion made by the noble Lord, Lord Citrine, might be adopted, that something should perhaps be added in Article 117 where it talks of assuring living and working conditions and equalisation in an upward direction. It mentions living and working, but it does not mention that scourge. I think that every legislator ought to have up in front of him, in letters of fire, an adaptation of Milton's famous line: "They do not serve who only stand and rot".

VISCOUNT ALEXANDER OF HILLSBOROUGH

My Lords, I am most interested in the noble Earl's speech and the period to which he refers. It must be remembered that from 1931 until the war broke out there was grave unemployment in this country and all these balance-of-payments difficulties occurred. Agriculture was left to rot then terribly, while the same kind of deflationary method that some people want to-day in this country was pursued. Might I also point out that since the war the Labour Government started a policy of full employment and an assisted agriculture, and the result has been that the balance of payments has been greatly helped to the extent of £400 million to £500 million a year by British agriculture production saving imports.

THE EARL OF IDDLESLEIGH

My Lords, I should like the noble Viscount to know that we who normally sit on the Cross Benches realise very fully the great work that was done by the Labour Government.

THE EARL OF LYTTON

I am extremely gratified that the noble Viscount has been pleased with anything I have said on this subject, as it was he, after ail, who opened the debate in a speech which was, to my mind, a tour de force of emotional vigour and which has really made this debate, because there are not so many others who have agreed with him, on the whole.

VISCOUNT ALEXANDER OF HILLSBOROUGH

I have got one beside me though.

THE EARL OF LYTTON

I am in support of the Common Market. There is one matter which I should like to mention with regard to the Dominions. I have noticed in most of the speeches in this House and in most of the Press that what people mean when they use the term "Commonwealth" is Canada, Australia and New Zealand: most of them do not think of anything else at all. I think that altogether there are 47 members, and the members they mention are the rich. They are the countries with the highest standard of life on this planet to-day. I am not against the rich. May the rich prosper! As a hill farmer I always say that my prosperity depends on the vale farmer being really prosperous. I am not against the rich; I like them. Nevertheless, I think that the time has come—and they also have been moving towards it with great deliberation, not thinking too much of us—when they will be independent.

I should like to read the inscription at the bottom of the Statue of Liberty, in New York Harbour: Give me your tired, your poor, your huddled masses yearning to breathe free; The wretched refuse of your teeming shores. Send these, the homeless, tempest tossed, to me. That is not particularly good poetry, but as a sentiment its magnificence resides in the fact that it has been fulfilled. That is what has made the greatness of the United States. I always think of the United States as the firstborn of our many beautiful daughters, and I rejoice accordingly in her strength and greatness. But it is through the open door that she has become prosperous. But take Canada, Australia, New Zealand and such countries as the Argentine and Brazil. What is their attitude to the man who comes to the door? He has to prove that he is rich and healthy, and has something behind him.

I do not think that any of these countries will follow and reach the destinies of which they are obviously capable unless they have a more liberal policy. Only one of them, so far as I know, is entirely free from race prejudice—I refer to Brazil, for which perhaps the greatest future of all lies. It is a country of 50 million, in the basin of the Amazon, which could perhaps accommodate a thousand million, so great are the possibilities. Nevertheless, unless this is done in Australia and Canada at a greater pace they will be left behind. It is not our affair, but I believe that they have reached the point of coming of age, and cannot be tied to our apron strings. There is another part of the Commonwealth which is extremely poor and of which one third, I suppose, goes to bed hungry every night.

I see the possibilities in the Community, and not in any other way, so far as we are concerned, of an expanding economy such as we had when we were the leaders in the 19th century of a continual expansion of exports over imports—and I know of no other way of helping people. The balance is then lent and is invested, by one organisation or another, so producing an investment in capital development—dams, and all those things which are necessary to get these new nations launched. They then become consumers and buy more. I see that Article 129 provides for a development fund which I think is intended for that sort of purpose. But what obviously is necessary is either some form of Marshall Plan or Point 4, which only the Americans are doing. But that is something we should do for the benefit of those we have launched on independence in Africa and Asia. We ought still to be their mother. They need it. I do not really think that the mature white Dominions do. They have gone their own way, and may they prosper! My Lords, it is getting late, and I will not continue.

9.45 p.m.

LORD KENNET

My Lords, to a certain extent this debate reminds me of the philosopher's cat. Your Lordships will remember the saying that the philosopher is like a blind man in a dark room, looking for a oat which is not there. I think that the Continental Powers of Europe are like blind men in a dark room looking for a cat which is not there yet, but which is expected. This is not surprising. When a lot of people are getting together to try to work out What is likely to happen in the future, and What can be made of the future, this is the natural situation. When you are building from nothing, all men are blind, all rooms are dark and all cats are absent. But when we in this country see a collection of our friends together in a dark room, looking for a cat Which is not there yet, I think that the least we can do is to go in and help them look for it.

I attended closely to and took fully the point of what the noble Earl the Foreign Secretary was saying about the distinction between the Treaty of Rome, which is there—anybody could read it; we know roughly what we are talking about—and the future developments towards political union, which are only beginning to be talked about, and we are not even in on the talks. If I interpreted the Foreign Secretary aright, in the first part he said that at the moment the negotiation's rested on the interpretation of the word "reasonable" Which is used in GATT and other economic international organisations. This is natural enough. It is the sort of thing that negotiations do rest on at any given day at 6 o'clock in the afternoon and it makes it difficult for one to debate too concretely on negotiations in progress. One can only say—at least, I can only say—that I think the Government is right to be doing this, and that when it makes its report to the nation the nation will decide in the usual way whether it thinks the terms are good enough to go in. I hope that they will be good enough for us to go in.

But I think it is clear to everybody in Europe Who has thought about this matter that the Treaty of Rome is only the first stone in an edifice which as yet has no shape. Something is going to be built in Western Europe. It is not as if there were no precedent. The history of the Western world is full of small units which fused to make bigger units. I think something can be learned from what has happened in those cases. One thinks at once of (the creation of the State of Germany, out of tiny princedoms. It was first a customs union, exactly as we have now; later there was the growth of the German Empire as we remember it, punctuated three times by war. Germany was forged in war. Again, Italy is a fusion of tiny princedoms, based on various attempts, less successful, at a customs union, but again born in war. The United States itself, the Federation of the American States, emerged out of a war. The precedents are hopeful, in that there are now living Federations on those places which had tiny units; but they are also depressing, as the normal midwife of a close political union is battle.

We have to think carefully about this. There are so many sorts of Western European union that we could have—a mere customs union; the twice yearly meetings of heads of Government, as General de Gaulle has proposed; a confederate structure, a federal structure, or even a super State with Pan West European parties, so you would have one Socialist Party for which you could vote in any constituency from Sicily to the Shetlands. I think myself that we shall probably have all of them in order, one after the other. It would not be a bad thing. It is a most attractive prospect.

But let us, before we do anything else, think of the Martian in his saucer. He has heard on the interplanetary news bulletins that there is talk of a unified Europe, and he comes closer to have a look. He sees Europe, which is a complicated feature sticking out between two seas—fertile, heavily populated, bristling with industry, with transport systems. He then thinks that these earth men are quite right; that this place is crying out for a bit of political unification; that they could well have done it before. There is ice in the North, in the South the sea, in the West a bigger sea, and in the East mountains and deserts. It is an obvious unit. Then, when he gets into a little closer communication on the local radio, he finds that this is not what we mean at all. We do not mean Europe up to those mountains and deserts in the East. We mean Western Europe, stopping half way at a medium-sized river called the Elbe, in the middle of a flat plain and south of that at some gently undulating wooded country in Central Germany.

I think the Martian goes home puzzled: "Why do they unite only up to there?" We know the answer well enough, of course. We have to live with the political and military facts of life as well as the geographical and economic ones. But, although Western Europe is a convenient political unit, it is not a natural unit at all; it is not a natural geographical unit; it is not a natural economic unit. It is simply a unit fortuitously defined by the line where two great military machines met each other in 1945.

We have to look rather far ahead on this one. What is our long-term hope and policy? Is it victory over Communism in war? Obviously not. Is it a perpetual stalemate, lasting for centuries and centuries, without any softening of the political struggle and without any reduction of the military threat? We hope not. What is left? Surely one thing only, and that is that the two sides in the cold war should simply get bored with the struggle between capitalism and Communism and go on to the next thing, whatever that may be. We do not know yet. It is another cat which has not arrived in the dark room. To our noble and Christian predecessors who began to sit in this House, it was intolerable to think that Jerusalem should be in the hands of the infidel. It still is, and many of your Lordships are still Christians; but we do not now worry about that any more. We have simply become interested in the next thing. And so it must be with this struggle between Communism and capitalism, if we are to survive. Everything we do now ought to be reconciled with this distant aim—and it is distant; and nothing we do now ought to make it more difficult for East and West to grow out of the present perilous deadlock, just as Christendom and Islam grew out of it 500 years ago.

How do the political and military potentialities of the European Community square up with this long-term overall need? A single Federal State of Western Europe, a United States of Western Europe, is a rather seductive idea to us, while to the Americans it is absolutely irresistible. If we were to adopt it in the long run, it would justify their whole history. They would be able to feel, "You see, we were right all along. Our way of doing things has been proved the best, even to the countries we ran away from in order to do it ". It would be like the boy whose father first of all disapproved of his wearing hipster pants, and who a year or two later, found the father himself wearing them.

This thing has a very strong appeal to the Americans. The Americans want us to have a really close union in Western Europe for three bad reasons and one good one. The toad ones are: first, because they did it themselves; secondly, because it might finally put an end to the Franco-German wars in which they keep getting mixed up; and, thirdly, because it might strengthen NATO. My Lords, I say that these reasons are bad because the first refers to the eighteenth century, the second refers to the last war, and the third refers to the next. Whereas our political purpose should now be to find peaceful ways of living in the twentieth century.

LORD GLADWYN

My Lords, I am sorry to interrupt, but is the noble Lord in favour of not strengthening NATO?

LORD KENNET

It seems to me that the military capacity of NATO is, in most relevant fields, two to three times greater than that of the opposing bloc. I believe that we could rest easy for a moment on strengthening NATO absolutely.

The good American reason for wanting us to have a close union in Western Europe is that our British presence in a closely united Western Europe would act as a bridge between the United States and the Continent of Europe and would tend to prevent a polarisation in economic and political affairs between the Continent and the United States. This is obviously desirable. For this, and for various other reasons, I hope that in time we shall come into a very close union in Western Europe, even a Federation. I see no terrors in that. The Comet and the Caravelle, and Euro-vision, have already made it extremely difficult not to go in that direction.

But—and here I come to the point—let us leave hooks out for the Yugoslavs, and the Poles, and the Czechs, and the Russians. Let us remember that we have no right to talk of a European Community; only of a West European Community. I was very interested in what my noble Leader, Lord Alexander of Hillsborough, had to say about the German and French utterances in favour of a European Community stretching up to the Urals. I think he saw these utterances as a suggestion that in the course of time Communism might be rolled back to the Urals and you would get a capitalist democratic union from the Atlantic to the Urals. This idea is, of course, of almost unspeakable danger. But, equally, if we were to think of the world as it would be after disarmament and after a German settlement, such a Federation would, on the contrary, be a profoundly beneficent thing for the people concerned and for the rest of the world too.

Let us, above all, keep defence out of the Western Europe Community which we are about to build—and I believe that we are about to build it. We already have an alliance, and (with respect to the noble Lord, Lord Gladwyn) a very strong Alliance. Let us keep defence there where it belongs. There is no reason to suppose that our military affairs will be better conducted if we have a sort of two-tier system, as the French dream of at the moment, consisting of Germany, France and Italy and ourselves on top, and a sort of milling plebs of Norway and Turkey and the rest in the second tier. Such an arrangement would do nothing to reconcile the inherent contradictions of weapons of mass destruction in a small crowded Continent, about which I bored your Lordships last week. At its best, it could only infuriate the outsiders; at its worst, it might make much more difficult the German settlement and the disarmament settlement, which must be our first aim, as surely as getting to a doctor must be the first aim of a very sick man. In fact, military needs are already affecting the Common Market. I believe that the marked lack of interest shown by the American and British Governments in the proposals for a zone of disengagement in Central Europe, which the East have once again been making, may have something to do with securing German intercession with France for acceptable terms on which this country could enter the Common Market.

All that is necessary to keep defence out of a Western European Community, and to keep it in NATO, where it belongs, is a decision to do so. There is no law of politics which says that if a supra-national Community is to be built, even if a Federation is to be built, it must have a common defence staff, common armed forces, a common strategy, or a common defence policy. It will have what it is given, and it is quite possible simply not to give it those attributes. We in this country, especially, have experience of working Constitutions where defence is a reserved subject. It is difficult to see immediately why it is any easier to reserve defence upwards to the Colonial Government than it would be to reserve it, as it were, both downwards and upwards to the constituent States in a European Community and to a wider alignment of States than that Community—namely, NATO.

To buttress the peaceful nature of the Western European Community which I hope we shall build (because in these days weapons creep into everything, unless you stop them), I hope that we shall do all we can to bring EFTA neutrals, and other neutrals, into as close a relationship with Europe as France and Germany will permit. I say "France and Germany" because the Americans are as keen to keep the neutrals out as they are to get us in. I think this is a short-sighted part of American foreign policy—a hangover from the age of massive retaliation, when Dulles said "It is immoral to be neutral ". If Sweden, Austria and Switzerland (and it is good news indeed that they are making their first statements to the Community) can be brought close in, and Finland and Yugoslavia, too—and why not, because we do not have to ask the Russians' permission about this?—or nearly in, it will do a great deal to forestall the increased military rigidity which one may otherwise fear.

Let us have a strong and peaceful Western European Community, and let us leave the defence, as I say, in NATO, until the day when we can dismantle NATO and the Warsaw Pact, following on a disarmament agreement. At that time, let us make the Western European Community truly European. In the meantime, let us make this Community the embodiment of the Europe which builds the cathedrals and the bridges, not the Europe which knocks them down; of the Europe which studies man, not the Europe which burns him and gasses him; of the Europe which can fly a drug to a sick child in an hour, not the Europe which can fly 20 "Hiroshimas" to someone else's city in an hour.

I do not think we need worry unduly about the Commonwealth. Whatever butter we eat, and whoever eats their butter, the New Zealanders will still talk English. In 40 years' time I should like to see this country no longer the special consumer of the white Commonwealth's exports, but the special university of the whole Commonwealth, white, brown and black equally. The Britishness of the Commonwealth, which we all value, does not reside in tariff preferences, not even, I think, in law. It resides in the English language, which is an instrument of understanding. If we do not use our Britishness for that, we can have no pride in it; and if we do not use our Europeanness for building and healing, we can have no pride in that either.

10.2 p.m.

THE EARL OF LONGFORD

My Lords, the noble Lord who has just spoken has won in recent times a reputation as one of the most thoughtful Members of your Lordships' House, and I should like, if I may, respectfully to congratulate him on the speech he has just made. He said something which I did not quite follow, but I think perhaps that was because I misunderstood it. He said that many Members of the House of Lords were still Christians, but that we do not bother very much about that nowadays—though I may have that wrong.

LORD KENNET

My Lords, my point was that many Members of the House of Lords are still Christians, but they do not bother very much about Jerusalem still being in Moslem hands.

THE EARL OF LONGFORD

Perhaps I ought to be bothered more than I am about Jerusalem being in Moslem hands. But, to be candid, I do not bother about it; and I daresay that it does not keep other noble Lords awake. At any rate, I should like to congratulate the noble Lord on the Whole speech, now that I understand it perfectly. Of course, I should like to congratulate all speakers; and if I single out the noble Lord, Lord Gladwyn, it is merely because he is the leader of so many so-called European aspirations. I would take the unusual course, too, of congratulating all those who have stayed to listen. I think that really represents the highest art of all, the divine gift of perseverance.

I feel in a certain difficulty, because it would be impossible for me to pretend that I am (in total agreement, or even in partial agreement, with the speech of my noble Leader, whom I revere in a way which, through modesty, he would perhaps hardly recognise. But I cannot be said to be in total or even partial agreement with his speech. I sought inspiration, in trying to explain my point of view to him, from a book with which I know he is much more familiar than I am—namely, the book of Ecclesiasticus, which I think he knows by heart or, at any rate, a great deal better than I do. I think this sentiment from it might possibly help me in replying in advance to the noble Earl, Lord Attlee: Where older men than thou are met and wiser, take thou thy place and give thy whole heart to their teaching. Old tales of God's wonders thou shalt hear, and sayings of much renown. I have listened to some old tales which are not in all respects relevant to the problem with which we find ourselves confronted.

VISCOUNT ALEXANDER OF HILLSBOROUGH

One of the follies of youth.

THE EARL OF LONGFORD

I stand to be corrected, but, if I may, I ask the noble Viscount to take note of this sentence also, which comes in his favourite book: If a poor man would speak to thee, lend him thy ear without grudging. Give him his due and let him have patient and friendly answer. If the noble Viscount is precluded from answering me himself tonight, I have no doubt that the noble Earl, Lord Attlee, will take that up tomorrow. But I am consoled by the thought that other very senior noble Lords of my own Party have addressed us—the noble Lord, Lord Morrison of Lambeth, the noble Lord, Lord Citrine—and their speeches must be put, at any rate, against those of the noble Viscount and of the noble Earl, if he takes the line we expect of him tomorrow.

It seems to me, my Lords, that we have had an altogether friendly debate. I think Sir Winston Churchill once referred to a certain Election as a demure Election—not as a term of praise—and I suppose there has been very little disagreement today. I do not think anybody has, as it were, dragged the Roman Catholic Church into it. But I am glad of that, because at times there has been a fear among some Members of the House that the Treaty of Rome was especially associated with the Pope. I would gladly accept any amendment Which had the effect of turning it into the Treaty of Canterbury, but it is perhaps a little late in the day. However, I am perfectly ready for that. I know there is some feeling, which may be justified, that the Pope has had something to do with the appointment of the manager of the British team to Australia; that of course may be true. But I speak with an almost infallible knowledge, when I say that he has bad really nothing to do with the very complicated economic issues which have been explained to us so clearly by the noble Earl, Lord Home.

It seems to me, my Lords, that there are two main issues before us. One is an issue of principle, which was in fact before us last year, and noble Lords who have spoken will not think I am disparaging them if I say that many of (the speeches today have confirmed and developed (shall I say?) arguments that were, in fact, highly relevant last year and are relevant still. Obviously the whole question of whether this idea of the European Community is an elevated one, and whether we ought to desire to find an association with it, is in itself a major issue of principle. I will say a word, but only a word, about that at the very end of my speech.

There is also the question which has arisen during the last year, and especially during the last few weeks: the question of the precise stage that the negotiations have reached. Here, if I offer thoughts, they are my own thoughts and may have no especial validity, but I feel that those who believe as intensely as I do in the desirability of our entering the Common Market have a certain duty at this time to make plain where they stand in regard to what we understand to be the present state of negotiations. But on my general attitude, I have really very little to add to what I said last year, when I said that I was 100 per cent. in favour of our joining the Common Market—and one cannot, I suppose, be more than 100 per cent. in favour of joining something. If that were intellectually possible, I would adopt that stance but, at any rate, I stand in that matter Where I stood. But if we take the present state of negotiations, it is obviously not enough for us to say, "I am in favour of the Common Market," and then leave it to someone like the admirable Mr. Heath and hope for the best. He has, I think, earned the admiration of everybody by his labours, but I think it is only right to offer just a few thoughts about the present situation.

It seems to me, my Lords, that negotiations are obviously at a critical stage. I feel rather happier today than I did when I came here, because the noble Earl, Lord Home, did not allow any note of crisis to creep into his speech. Therefore, I think it is reasonable to assume that some of us, in reading the Press over the weekend, have perhaps overestimated the dangers of the situation. But, surely—and this was brought out in one way or another by various speakers: certainly by the noble Lord, Lord Gladwyn—nobody expected such a complex and varied operation to be carried through without a moment of crisis of some kind. It would be inconceivable, I suppose, that the whole thing could go smoothly through without any danger of anything that looked like a break at any time. Certainly the Six themselves, in their own negotiations, relating both to the Treaty in general and to the agricultural arrangements last winter, have been through such crises and have survived them. The noble Lord, Lord Gladwyn, will bear me out there.

It would be very feeble on our part automatically to assume that an approach of crisis indicated an approach of failure. At the same time, we must, I suppose, standing here, outside the intimate details, but listening and reading as we can, envisage the possibility that the terms which the Six are prepared to ofler for temperate foodstuffs might in our view be inadequate. They might not be sufficient, in our view, to enable us to discharge our obligations to the Commonwealth, and we must accept that possibility, if we are forced to break off negotiations for a time. I should like to say as strongly as possible that, in my opinion, if that were to happen it would be a tragedy. It is what I feel one must say at this stage. It is, of course, no good saying that we should accept anything presented to us, sign it on any terms. But that is not the situation; and if it is our conviction, as certainly it is mine, and the conviction of most Members of this House, I fancy, that it would be a tragedy——

VISCOUNT ALEXANDER OF HILLSBOROUGH

It may be to my noble friend a tragedy, but Mr. Gaitskell, in the broadcast to which I referred earlier today, said that if we found that we could not go into the Common Market it would not be a disaster.

THE EARL OF LONGFORD

I do not think everybody would agree, with exaggerated respect to my noble Leader——

VISCOUNT ALEXANDER OF HILLSBOROUGH

And Mr. Gaitskell.

THE EARL OF LONGFORD

—that would equate that view of Mr. Gaitskell with the view of my noble Leader, or would see any resemblance between the view of Mr. Gaitskell and that of my noble Leader. And if my noble Leader, with his great responsibilities, is prepared to divert in one direction, I may, perhaps, with my smaller responsibilities, be allowed to divert in the other. Mr. Gaitskell has said that, on balance, it would be a good thing to enter the Common Market. I cannot, therefore, equate my noble Leader's point of view with the statement of the Leader of my Party.

LORD GLADWYN

It might be a tragedy, but not a disaster. A tragedy and a disaster are different things.

THE EARL OF LONGFORD

I am grateful for that synthesis in this difficulty of reconciliation: the noble Lord, with his years of displomatic training, has come to the rescue of the Labour Party.

It would certainly be a great shock to business opinion if the negotiations were broken off. It would be a psychological shock to the whole country if they were broken off for any length of time. It would lead, as I would think, to a period of turning into ourselves. We should begin by blaming foreigners, assuming that all the fault was theirs, and priding ourselves on our innate wisdom. I personally should suppose (I do not know whether or not Mr. Gaitskell would agree with this) that the whole West would be facing a decade of mutual recrimination. We should blame the Six; some of the Six would blame us, and some of them would blame one another. To take the point made by the noble Lord, Lord Gladwyn, it would certainly be wonderful news for Mr. Khrushchev and to everybody who wished this country ill. The United States would probably also come in for their share of blame. We cannot tell what effect it would have on their policy, but it could not have a good effect in any way.

It is difficult to suppose that it would draw us closer towards the Commonwealth if, as a result of trying to meet the wishes of the Commonwealth, we felt compelled to destroy the chances of an agreement which was recognised as being to the advantage of this country. I can hardly believe that it would do anything but harm in the long run to our Commonwealth relations.

If we look at what has happened, particularly over temperate food, which is very much at the centre of our minds, we may reflect that Imperial Preference has existed only for thirty years— the noble Earl, Lord Home, put that in perspective very well it seemed to me—and during the whole of that time it has been steadily reduced at the wish of the outer Commonwealth countries themselves. The average Preference of British exports was 12½ per cent. in 1937 and is now down to 5 per cent., and in large parts of the new Commonwealth it does not exist at all. It seems to me at least likely that, even if the Community had never been heard of, Imperial Preference would have died of its own volition by 1975.

What is a matter of importance, of course, is the level of agricultural prices within the Community. If they are very high they obviously maintain a lot of inefficient producers—the Foreign Secretary set all that out with great clarity this afternoon—and though that would be to the advantage of British farming it would not for the unfortunate producers overseas, and would affect the level of food prices everywhere. The crucial thing, of course, is that the Commonwealth should develop a fairly low level of agricultural prices, and I see no reason why they should not he obtained; but I do say, speaking as one who yields to no one on the idea of our joining the Common Market, that clearly there are conditions which must be satisfied, and it cannot be certain as we stand here that they will be satisfied without any suspension of the talks. I hope they will, and I pray they will, but one cannot be certain they will. But it seems to me that, even if the negotiations have to be temporarily broken off, we cannot fail to achieve success this year if we are really determined on the objective.

I have paid, I hope, proper tributes to those who have achieved vastly more than I have for this country and for the Labour Party, particularly the noble Earl, Lord Attlee, and my noble Leader beside me, but I must point out that this is something desired by those much younger than they are or than I am. There are in the Labour Party today two very strong movements, one associated with the aim of nuclear disarmament—and I shall say nothing about that tonight as it has not at the moment, perhaps unfortunately, any champions here—and the other the Campaign for Democratic Socialism which has received the patronage of the noble Earl, Lord Attlee, and has done so much to establish among the young a firm and patriotic foreign policy supporting the defence of the West.

In conclusion, my Lords, I would quote one or two sentences, certainly not more, from the last document issued by the Campaign for Democratic Socialism, because it is, on the whole, representative of all that is best among young Socialists, if we leave out for the moment the nuclear disarmament movement. This is what the writers of this document say: From its inception the Campaign for Democratic Socialism has been firmly in favour of Britain joining the Common Market. They comment at the end of this particular manifesto: If we are socialists,"— this has reference to what was said by the noble Lord, Lord Morrison of Lambeth— we can hardly be deaf to the conviction of every Socialist Party in the Six that the Common Market is a spur to social progress, or to their unanimous desire to have us in. Note that, my Lords: the "unanimous desire" of European Socialists to have us in the Common Market. They go on: If we are internationalists, we can hardly believe that a fastidious determination not to soil our English hands with the dirt of the Continent is a suitable progressive posture for the end of the twentieth century. That is the point of view of young Socialists who have done more than any group in the Labour Party for Socialist aims in the Party in the last year or two.

I feel certain that those people who believe in world government, which must be the aim of all of us, will find it very difficult to disagree with what was said by the noble Lord, Lord McNair. He pointed out that if we really believe in the establishment of an international police force, and if we really believe in the establishment of an effective world authority, it is very difficult not to agree that the European Community is a step in that direction. I said this last year, and on the next day the noble Earl, Lord Attlee, replied, sweeping aside, if I may say so, these arguments. If the noble Earl, Lord Attlee, whose words are followed all over the world, is to speak to-morrow, I hope that he will reply, if not to me, at any rate to the noble Lord, Lord McNair. How can he really convince anybody who follows the argument that, if one believes in world government, one should reject the European Community? I recognise that there are many shades of emphasis, but in the last resort, faced with these complicated economic difficulties—and I am certainly not saying that we should accept everything we are offered—the question is: do we believe that this is a great ideal worth pursuing, or should we prefer to see the negotiations fail? This, in the last resort, is the only question which faces us.

I have no doubt that if we are determined, as I believe we are—and as, indeed, I believe the majorities of both the great political Parties in this country are—then, in the words of Sir Winston Churchill, we have only to persevere to conquer: but it will not be the conquest of any other human beings; it will be a conquest only in the sense that it will be the achievement of a partnership—a unique partnership of infinite value to this country and to Europe; and an untold promise to the Commonwealth and the whole world among generations yet unborn.

THE LORD CHANCELLOR (LORD DILHORNE)

My Lords, I beg to move that this debate be now adjourned.

Moved, That the debate be now adjourned.—(The Lord Chancellor)

On Question, Motion agreed to, and debate adjourned accordingly.

House adjourned at twenty-two minutes past ten o'clock.