§ 3.50 p.m.
§ THE LORD PRIVY SEAL (LORD SHACKLETON)
My Lords, with permission I should like to repeat a Statement on the White Paper, Britain and the European Communities: an Economic Assessment, which is being made by my right honourable friend the Prime Minister in another place. This White Paper will now be in the Printed Paper Office. The Statement is as follows:
"While this White Paper, as I have already told the House, deals exclusively with the economic assessment of the cost of British entry to the Communities, on a wide range of assumptions, honourable Members will no doubt wish to study it against the background of the four White Papers published in 1967, dealing with the decision of the 2nd of May to make application, and the basis of that application; the legal and constitutional issues; the matters relating to the Common Agricultural Policy; the fourth White Paper being the statement of the then Foreign Secretary at the meeting of the Council of Western European Union in July, 1967.
"The structure and content of to-day's White Paper follow the pattern I outlined at Brighton last autumn and announced to Parliament soon after. The estimates and assessments made in 1967 have been recalculated on the basis of more up-to-date information, 835 and they cover in particular agriculture, the balance of trade in industrial goods, invisibles and capital movements, and the consequences for each of these which entry into the Communities might have for us, and, in particular, for our balance of payments. The House will see that the White Paper also sets out the potential implications of membership for the development of our industry, and concludes with an overall economic assessment of the theoretical range of possible costs, in both balance of payments and resource terms, which membership of the Communities could involve.
"I have indicated to the House on a number of occasions the difficulties arising from the wide range of assumptions which must be made. Before saying a word about them I should make it clear that for reasons the House will understand the calculations do not allow for what we would hope to achieve in the course of the negotiations, whether in terms of quantities and costs, or in terms of periods for transition and adjustment.
"The assumptions that have been made relate in the first instance to the Common Agricultural Policy, and as far as possible reflect the most recent decisions of E.E.C. Ministers: in particular the Summit Meeting at the Hague on the 1st and 2nd of December last year, and the meeting of the Council of Ministers of the Communities ending on the 22nd of December. Even now we do not have a complete picture of the future shape of the Community's agricultural policy.
"Clearly we had to wait for the outcome of these meetings as I have told the House more than once, and this was why my earlier hope of being able to lay the White Paper before Christmas was not realised.
"But the House will recognise that this is a continuing process. The Ministers of the Six met last Thursday, Friday and Saturday when the White Paper was already in print, and there will be further meetings which may necessitate revision of the estimates.
"Even if this were not so, the House will understand that many of the estimates must be highly speculative. There 836 must, for example, be a wide margin of error arising from any calculations which may be made about the response of British agriculture and industry to changes in prices and tariff levels, whose effects cannot be fully felt for a number of years. Honourable Members will realise what margin of error this involves both in the calculations of the agricultural cost, and its wider implications in industrial, commercial and financial matters.
"Given the assumptions we have sought to present, within an inevitably wide range, as full and objective an account of the position on agriculture as is possible. We have, however, found it very difficult to present any meaningful estimates about invisible earnings and capital movements: still more difficult to make any about the long-term industrial consequences, described in the White Paper as the 'dynamic effect' of entry, though here many honourable members will have studied the report made by the Confederation of British Industry and published by them a few weeks ago. We have not found it possible to set out figures in quantifying these industrial consequences. It is right that those who are engaged in industry and trade, to whom would fall the responsibility of taking the thousands of day by day decisions which entry into the Communities would entail, should judge— as honourable Members will seek to judge—to what extent membership would give industry more opportunity for successful enterprise and expansion.
"The White Paper also makes no attempt to estimate the cost to Britain of remaining outside the Communities, if the final result of the negotiations were to produce terms and conditions which the Government, and Parliament, were to regard as unacceptable.
"Again the White Paper does not attempt to deal with the political arguments for entry into the Communities, beyond recalling what was said on this issue in the 1967 White Papers.
"The House will wish to study this document which I must say right away is lengthy, detailed and heavy going. I am sure, however, that most honourable Members, whatever their views on the issue of British entry, will accept that the figures have been calculated 837 in a completely objective and neutral way. My right honourable friend the Leader of the House"—
that is in another place—
"will be having talks through the usual channels for a full Parliamentary Debate"—
and no doubt, my Lords, if I may intervene personally, we shall, of course, be prepared to consider this in your Lordships' House.
"To-day is not the time to attempt to draw conclusions in terms of policy from the White Paper. Britain's application for membership has been made and that is not in question. The Governments of the Six have made clear their intention that negotiations will begin in the summer. Until the outcome of those negotiations is known neither the Government nor Parliament will be in a position to take final decisions. The negotiations will take place aganst the background of Britain's economic progress, and particularly of the improvement in our balance of payments and in the strength of sterling. Not only this House but the world outside recognises the sharp contrast of our position to-day with our position both in 1967 and in the previous negotiations from 1961 to 1963. These facts create a situation in which Government and Parliament can take their decisions in full confidence that on fair terms we can stand and profit by the far more competitive situation that entry into the Market implies. But equally they create a situation which leaves no one in doubt that should the negotiations not lead to acceptable terms for entry, Britain is and will be strong enough to stand on her own feet outside. This was the target—a position of strength —I set for our economic policies when the House debated these matters in 1967.
"The question of entry, what I have called the final decision, does not arise on this White Paper, nor indeed for the debate which may follow. It is in the light of the negotiations which are due to begin in the near future that this decision must be taken. The Government and the House of course will recognise that political as well as economic factors are involved. If, when 838 the decision is to be taken, the disadvantages for Britain appear excessive in relation to the benefits for Britain which would flow from British entry, the Government clearly would not propose to Parliament that we should enter the Communities. If, on the other hand, the costs, after negotiations, appear acceptable in relation to the benefits, the Government will recommend entry.
"The Government will enter into negotiations resolutely, in good faith, mindful both of British interests and of the advantages of success in the negotiations to all the members of an enlarged community. We have made clear that if the negotiations produce acceptable conditions for British entry we believe that this will be advantageous for Britain, for Europe, and for Europe's voice in the world. Equally, we have made clear that if the conditions which emerge from the negotiations are in the Government's view not acceptable, we can rely on our own strength outside the Communities. But I repeat what I have said on a number of occasions in the House and outside that this outcome— a failure of the negotiations—would involve a cost for Britain, a cost for Europe, and a diminution of Europe's influence in world affairs."
§ 4.0 p.m.
§ THE MARQUESS OF LANSDOWNE
My Lords, we are grateful to the noble Lord the Leader of the House for having repeated to us the Statement made by the Prime Minister this afternoon in another place, a Statement which I think your Lordships in all parts of the House will agree is carefully worded and well-balanced. We on these Benches fully appreciate that this White Paper is bound to contain many assumptions, and we are not critical on this account at all. We perfectly appreciate that even now, as the Statement said, we have not a complete picture of the future shape of the Community's agricultural policy. That does not surprise us at all. We realise the difficulties involved and are sympathetic with Her Majesty's Government in dealing with them.
I was glad that the Statement referred to the report made by the Confederation of British Industry. I think it is a very valuable report and one which I feel your 839 Lordships should try to read in conjunction with this White Paper. We have been told that the White Paper is lengthy, detailed and heavy-going, and if the noble Lord the Leader of the House tells us that I should certainly conclude that it is no understatement. We shall all have to sit down and read this White Paper and refresh our memories with the other White Papers that have preceded it.
I consider that in this Statement there is something which can be gratifying to those of us on this side of the House who support Her Majesty's Government in their wish to participate in the European Economic Community—it is the indication of their determination to try their utmost to get in on proper terms; and Her Majesty's Government have the support, if not of all of us, of most of us on these Benches. I feel that Her Majesty's Government may be pleased that they have this support. Perhaps the situation was not quite the same in the earlier negotiations. We all appreciate that the question of entry does not go with this White Paper; it is the negotiations that count. We shall wait to see how these negotiations go. I am glad the noble Lord has suggested that it would be possible to debate the whole of this subject in your Lordships' House, for there may well be observations made then that will be helpful to Her Majesty's Government in the conduct of the negotiations.
§ LORD GLADWYN
My Lords, we must all have time to study this long and complicated document before we can express any definite opinion on it, and I was happy to hear that we shall apparently soon have an opportunity of exchanging views on it in this House. Perhaps I may be permitted now to make some short points of a general nature in relation to what is said in the Statement which I think reflect the general state of mind of my colleagues on these Benches. Obviously the economic cost to the country of joining the E.E.C. depends on the assumptions made, and these must, as we all know, vary enormously. It must be equally obvious that on any hypothesis the cost would be considerable. Whether the cost is acceptable or not can, as the Government I think rightly say, be determined only by negotiations.
840 The decision regarding acceptability must be made in the light of the vast long-term economic and, more especially, political advantages of creating a new democratic entity in Western Europe that could eventually speak with one voice in the councils of the world. But—and this is the real point that I should like to make in relation to the Statement—such an entity simply cannot be formed unless this country genuinely accepts certain minimal supranational obligations, which have already been accepted by the Six, who incidentally have definitely now fixed their agricultural policy—not federal, in the old-fashioned sense, but sufficient to permit a common will to emerge as a result of the adoption of modern techniques worthy of the technological civilisation in which, whether we like it or not, we shall all have to pass the remainder of our time. Having said that, I can only say that negotiations seem now happily to be inevitable, and we wish the Government the best of luck in their endeavours to bring them to a successful conclusion.
§ LORD SHACKLETON
My Lords, I am grateful to noble Lords. I do not think there is anything I can usefully add until your Lordships have had a chance to read the White Paper. I wish you good luck in this. But I should like to stress that it is because this White Paper is a determined attempt to be objective within a wide range of possible assumptions that it is inevitably so highly qualified. I would echo what the noble Marquess said: that complementary to this White Paper is the C.B.I. report, which is a very valuable document and which I commend to your Lordships. We know the views of the noble Lord, Lord Gladwyn. I am grateful that he accepts that this is the right approach in the matter. I do not think that on a White Paper purely concerned with an economic assessment I ought to follow him into the discussion of some of the political aspects, which we could discuss at another time.
§ LORD BLYTON
My Lords, is the Minister aware that the White Paper states that the cost of living will go up from 18 to 26 per cent., and that the balance of payments (the figures are very cautious) will require from £100 million to £1,100 million more? Does he think that the country can bear that, in the 841 light of what we have had to go through in the last five years: wages restraints, rent increases and price increases, everything connected with a £500 million deficit in the balance of payments? Does he not think that though the three political Parties are all here to hear about this issue, the people of England ought to have something to say about a serious matter like this?
§ LORD SHACKLETON
My Lords, I am not sure whether some of my noble friend's remarks would not amount to arguments for pursuing vigorously entry into the Community. I think it is inevitable that this White Paper, which is a frank and honest attempt to describe all the factors, provides material for anyone who wishes to do so to pick a particular point out of its context. I am bound to say, with reference to the range in the effect of entry on the balance of payments, that the cost range from £100 million to about £1,100 million not only makes no allowance for the dynamic effect of entry but is far too wide a basis for judgment and is obviously misleading, in the sense that it is inconceivable that all the elements in the calculations will work in the same direction, whether favourable or unfavourable. Nor do I think that my noble friend is correct in his statement on the cost of living which, as I recollect, the White Paper suggested may go up by 4 to 5 per cent. over a period of years. I would say to your Lordships that we cannot look at this matter in isolation. The balance of advantage would depend also on the extent of the wealth which may be created by entry and which, if things work out favourably, could more than cancel out any rise in the cost of living. This is not the time to debate it, but my noble friend's question is a warning to us that we need to look at all the possible assumptions. If your Lordships wish to debate the matter further, no doubt arrangements can be made.
§ LORD BLYTON
My Lords, I must put my noble friend right. It says in the White Paper that retail food prices would be going up from the range of 18 to 26 per cent. which means 4 to 5 per cent. on the cost of living.
§ LORD SHACKLETON
My Lords, I think that my noble friend has changed his assumption again. I do not think that 842 he mentioned food prices last time, but said "the cost of living".
§ VISCOUNT ECCLES
My Lords, while I welcome very much the White Paper, which I am sure will give us a great deal to think about, I would point out that it is primarily economic, and I think we may fear, from the speech of the noble Lord, Lord Blyton, that it is just a quarry for people who want to pick out argument on the economic side. The real importance of the whole of this matter is political. I would ask the Government, if they are going to give all this ammunition to those who do not want to go into the Common Market, whether they stress the political side rather more than they have done hitherto.
§ LORD SHACKLETON
My Lords, the short answer is: "Not today". This is a very wide subject; it is not intended to deal with the political argument in the present context. This White Paper is to give what facts and assumptions are reasonably available for the purpose of debate. I happen to have considerable sympathy with what the noble Viscount has said in regard to some of the political arguments, but they do not arise in relation to the White Paper.