HL Deb 17 December 1970 vol 313 cc1519-26

3.3 p.m.


My Lords, I should like to repeat a Statement made by my right honourable friend the Chancellor of the Duchy of Lancaster in another place yesterday afternoon. This is the Statement:

"With your permission, Mr. Speaker, and with that of the House, I wish to make a Statement about certain proposals which I have to-day tabled in Brussels"—

that was yesterday—

"regarding United Kingdom participation in the European Economic Community's financial arrangements in the event of our accession.

"In brief Her Majesty's Government have proposed that over the first five years of our membership of the Community our contribution to the Community budget should build up by equal annual steps to a basic key which should lie in the range of 13 to 15 per cent. of total contributions. Thereafter, for a further three years, the year-to-year changes in our share of contributions should be subject to limitations on the lines of the correctives the Six have provided for themselves up to 1978.

"We have further proposed that there should be provision to review, if necessary, the operation of the financial arrangements in an enlarged Community.

"The House will expect me to explain the significance of these proposals for the United Kingdom. I must first emphasise that any estimates inevitably depend on a large number of assumptions which have to be made about the ways in which the enlarged Community would develop in the years after we and the other applicant countries had joined. To take just two of the most important factors: it is really very difficult to judge what the size of the Community's budget will be at the end of this decade, and what share of the total will be devoted on the one hand to schemes of agricultural support, from which we, with our relatively small and highly efficient agriculture, cannot expect to be major beneficiaries, and on the other to regional and industrial development and other programmes.

"It is because of these uncertainties that in the past the Six themselves have in practice reviewed their own arrangements whenever unforeseen developments have upset the balance which previous agreements were expected to produce. We have therefore proposed to the Six that a suitable review provision should be an essential part of any agreement.

"Having made clear to the House the inevitable limitations of any estimates, I can give some indication of what we expect the proposals we have put to the Community might involve. If we assume that the Community budget in 1977 was to be 4,500 million dollars, as we have suggested to the Community, then under the proposals we have now made, after making an estimate for receipts, our net contribution would build up gradually from about £30 million in 1973 to about £140 million to £180 million in 1977. If, however, the Community budget remained at its current level of about 3,000 million dollars then our net contribution would reach about £60 million to £85 million in 1977, on the same estimated basis of receipt.

"We have also to take account of the fact that in the short term membership of the Community will have certain other adverse effects on our balance of trade as a result of the increased cost of food imports and the loss of some of the trade preferences we enjoy in other markets. For this reason, it is important that we should move up gradually towards our ultimate contribution.

"Neither this Government nor our predecessors have ever attempted to disguise the fact that membership of the Community will involve a substantial net contribution to the Community budget and, at least in the early stages, other balance-of-payments costs. But again, like our predecessors, we believe that account must also be taken of the prospect of dynamic economic advantages of membership which would be substantial. As to these, one has to make a judgment about the likely response of British industry to the opportunities and challenges that would be presented by our entry into the Community. The Government's judgment—and it is shared by the over-whelming majority of our leading industrialists—is that the response would be vigorous and determined and that we could expect to achieve a significantly higher economic growth rate if we joined the Community than if we remained outside.

"The Government also consider that membership of an enlarged Community will provide considerable opportunities for British farmers. Without underestimating the problems that have to be faced in the early years of our membership, therefore, we hold firmly to the view that our entry into the Community on reasonable terms would be in the long-term economic interests of this country.

"We are also convinced that enlargement of the Community would be in the interests, political perhaps even more than economic, of the whole of Western Europe. It is with these considerations in mind that the Government have formulated the proposals which I have tabled in Brussels to-day."

My Lords, that is the Statement. I might also, for the convenience of your Lordships, add that it is envisaged that we should have a debate on this subject after the Recess and before the next Ministerial Meeting on February 2.

3.9 p.m.


My Lords, I am grateful, as I am sure we all are, to the noble Marquess for repeating that Statement. It is, as he has indicated, a matter that will need some careful debate, and I am glad to know that we are going to have an opportunity to debate it before the next meeting of the Council of Ministers. It is a very intricate matter, as I am only too well aware, and I do not intend to press the Minister to-day on any of the points he has made. I simply say that it seems to me at first glance, although I shall want to look at the Statement in greater detail, to be a reasonable opening position to put forward.

I should like to ask two questions. I shall understand if the noble Marquess cannot answer them to-day, but perhaps we can have them answered when we come to debate the issue more fully. My first question is this: are we to understand that this is 13 to 15 per cent. of the total contributions of the Community of ten, or is it a Community of seven, on the assumption that we alone will have acceded when these figures come into operation? Secondly, although it is clear that we are going to contribute 13 to 15 per cent. of the total budget of a Community of seven or ten—or whatever it may be—can the noble Marquess say how this compares, in terms of the percentage of our gross national product, with the percentage of the G.N.P. of the existing and potential members of the Community?


My Lords, we on these Benches welcome the Statement, which at any rate shows that our very able negotiator, Mr. Geoffrey Rippon, is now getting down to the nub of the negotiations. With your Lordships permission, I should like to ask three questions. First, since nobody can predict with any accuracy the precise effect on our economy of the acceptance of the principle of financing of the Common Agricultural Policy of the Six would not the Government agree that perhaps the most important thing in all these negotiations is an adequate review clause enabling corrective action to be taken in the event of our subscription to the Central Agricultural Fund having an unduly onerous effect on our balance of payments? The second question: is would they not further agree that if we should ever achieve a European monetary union, the effect, positive or negative, on the individual balance of payments of any member of the Community would be quite immaterial? Thirdly, would they not, finally, agree that, pending any progress towards a monetary union, which of course could be achieved only with the consent of the British Parliament, there are real prospects under the Treaty of Rome of a common regional policy which might be of great benefit to some of our own less developed areas?


My Lords, I wonder whether I may briefly answer the first question put to me by the noble Lord, Lord Chalfont? I should require notice of his second question. My understanding is that this does refer to a Community of ten. It is hoped that that is what we shall achieve. His other question I should require notice of, and if I may be so bold I would ask the same indulgence of the noble Lord, Lord Gladwyn. I note his remarks and I should like to consider them and write to him.


My Lords, will the noble Marquess agree with me that the Statement he has read out, which is a repeat of what was reported in the other place yesterday, indicates with unquestionable clarity that if we join the E.E.C. we are to incur in the future financial liabilities of a most oppressive character, while on the other hand the benefits which are assumed are likely to be of a highly speculative character? If the noble Marquess does not agree with me, will he, with his usual courtesy, give me the reason why?


My Lords, I do not agree with the noble Lord. I do not know whether I can give him chapter and verse as to the reason why, but my feeling is, as with my right honourable friend, that the benefits that will ultimately be gained by joining the Community will far outweigh the disadvantages.


My Lords, if the noble Marquess is unable to agree with me, how are we going to advise the electors of this country on an important, vital fundamental issue of this kind, which may change the whole character and quality of the United Kingdom? Surely in the circumstances no decisive action should be taken until the electors have had a further opportunity of giving their decision.


My Lords, with reference to the last question, is the Minister aware that in another place yesterday afternoon reference was made to the White Paper which was issued by the previous Government in February of this year? Is he also aware that there is a wide divergence of speculation in the White Paper as to the high burdens or the low burdens which might be borne by the British people, and could he give us an assurance that once the negotiations are reasonably reaching a point of culmination a further White Paper will be issued to this country, so that the fears of many people, including the noble Lord, Lord Shinwell, may be assuaged?


My Lords, I will certainly take into account what my noble friend has said. I do not think he will expect me to give him a positive assurance to-day, but I can undertake to pass his remarks to my right honourable friend.


My Lords, would the noble Marquess please see, if it is at all within his capacity, that this House has copies of the Treaty of Rome available so that they can be read, and read thoroughly, before noble Lords are asked to take any vote whatsoever? Is he finally further aware that on the first famous occasion when this vital question reached the other place the Foreign Office had only one copy of the Treaty of Rome, and that was in French? Will he see that we are well-informed and know what we are doing when we are voting on that written document, which does not suit the British people because of its profound illogicality and lack of wisdom?


My Lords, I speak subject to correction on this matter, but I imagine that there are copies of the Treaty of Rome in the Library. If not, I will certainly undertake to see that copies are available there before our debate.


My Lords, while welcoming the indication of a full Parliamentary debate early in the New Year, and without going into the Statement repeated by the noble Marquess, may I ask whether he will address himself to another related need? Will he say how the British people are to be enabled to exercise their undoubted right to approve or disapprove any terms that may be offered for British membership of the Common Market; and is it proposed that the matter will be decided in this Parliament? If so, will it be by a free vote, or will it be at a General Election, or by a referendum? Will the noble Marquess please give a clear answer to this crucial point?


My Lords, I do not think the noble Lady really expects me to give a complete answer to that point on the Statement I have made this afternoon, but I shall naturally take note of what she said.


My Lords, can the noble Marquess not tell us what will be the intentions when the terms arrive—whether this Parliament will decide or whether the British people will have a voice in the decision? The economic argument now is fading into insignificance because of the argument that the political issue is greater. To me the political issue means the end of sovereignty and the abolition of the Commonwealth. Can the people not say something on this matter?


My Lords, are we really to assume that the noble Lord, Lord Blyton, thinks that the present Parliament does not represent the British people?


My Lords, the noble Lord, Lord Gladwyn, has actually taken the words out of my mouth. I know that the noble Lord, Lord Blyton, feels very strongly about this matter, but I think we should wait a little longer to see how we get on.


My Lords, perhaps the noble Marquess will agree with me that if we sign any treaty, be it the Treaty of Rome or any other, it will require ratification by Parliament.


Certainly, my Lords.


My Lords, in view of the fact that the Treaty of Rome contains no escape clause, will Her Majesty's Government consider the advisability of suggesting to the present members of the E.E.C. that in the event of this country adhering to the Treaty of Rome, provision should be made in the future, by mutual arrangement, that should any member of the E.E.C. find that for political, economic or social reasons their continued membership is deleterious to their national interest they should be able to withdraw, say, on the giving of five years' notice?


My Lords, this is a very wide question, but I will undertake to pass it on to my noble friend.


My Lords, may I ask the noble Marquess whether he is aware that these are matters that we shall discuss very fully in the debate? And is he aware that the views from the different ends of the House do not necessarily represent the views of the majority of your Lordships' House?