HL Deb 06 December 1967 vol 287 cc667-8

2.33 p.m.


My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

[The Question was as follows:

To ask Her Majesty's Government how far the £600 million extra burden on our balance of payments due to joining the Common Market will now be increased in sterling as a result of devaluation.]


My Lords, in the spring of this year entry into the E.E.C. was estimated to call for a redeployment of our resources from present home use to exports, or to import substitution, of the order of about £100 million each year, over a period of perhaps five years after we have entered. The net effect of devaluation, on present information, is that no significant change in this estimate is called for.


My Lords, is the Minister aware that the Prime Minister estimates that, due to devaluation, £500 million will be saved on the balance of payments? Will not that be wiped out by joining the Common Market, where we know that it will be £600 million against us? And if we join the Common Market, may we not have to devalue again?


My Lords, the figures the noble Lord quotes are accurate, but not the assumptions he draws from them. As the Prime Minister has said, it would cost us £100 million a year for the next five years if we entered the European Economic Community. On the other hand, advantages would accrue at the same time, which would leave us in a better position to achieve the £500 million advantage which we expect from devaluation.


My Lords, is not the reference in the noble Lord's Question to a "burden" due to joining the Common Market a little premature?

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