BRITAIN AND THE EUROPEAN COMMUNITIES

HL Deb 18 March 1970 vol 308 cc1160-216

3.55 p.m.

Debate resumed.

THE LORD BISHOP OF SOUTHWARK

My Lords, like most of your Lordships who have declared themselves I, too, am a keen supporter of the idea that Britain should go into Europe, and that is why I am glad that in many of the speeches, both here and in another place, the point has been made that the White Paper cannot be treated in isolation. Inevitably it must come within the context of European policy as a whole. Indeed, were this discussion to be confined to the figures given in the White Paper the debate could well have been conducted by economists and statisticians only.

We cannot separate the economics of the European Community from the concept of some sort of political union. Yet some leaders, both in England and abroad, seem reluctant to admit that we may have to accept some limitation of our sovereignty if we are to take our place in a United States of Europe. It is true that Herr Brandt said earlier this month that we must move towards a political co-operation which is less than supranational but much more than the conventional type of inter-Governmental relationship. But I wish he would be more specific. Our own Prime Minister is even less specific. At a European dinner in the Guildhall last July, he quoted Hugh Gaitskell to the effect that: Whatever the future may hold, the creation of supra-national and federal political or defence institutions is not a reality in ten or twenty years. Perhaps so—perhaps not. My belief is that the speed of modern events will overtake us, and if we do not go into the Market we shall find ourselves in a situation that compels decisions which presuppose a European political structure. The sort of decisions I have in mind affect the future, among other things, of agriculture and industry.

Let us look at agriculture first. As I see it, unless there is some sort of political union, some sort of supranational planning authority, we shall fail to solve Europe's agricultural problems. The alternative is grim. If Britain does succeed in entering the Common Market as it stands and no steps are taken towards greater political union, then the already serious problem of huge food surpluses in Europe may get progressively worse. Your Lordships know that representatives of the Common Market countries have been trying to solve this problem within the complex of existing Common Market arrangements, but they have not been particularly successful.

Surely the problem should be lifted to a new level. Instead of six separate Governments haggling with each other from their respective national standpoints, a common government in Europe should see how, having fed themselves, it can best deal with large agricultural surpluses to feed the hungry of the world. But such a food disposal scheme would need to be financed on a common European basis, requiring a common budget; and this of course presupposes a common government. Yet this is precisely what our Prime Minister and Herr Brandt say should be left over for twenty years to the next generation. If they are right, if we confine ourselves to the Common Market apart from the structure of a United Europe, what then will happen to agriculture? I think there are two possibilities, both of which are alarming. First, surpluses could be liquidated through the Mansholt Plan, which envisages a big reduction in the acreage devoted to agricultural production. There would be a ten-year programme removing 10 million acres from production—an area roughly the size of Belgium—and some 5 million farmers and workers would leave the land as a result. Of course, the scheme would reduce the surpluses, but at what a price! And it would restrict food production at a time when the hungry of the world are crying out for food. It would also drive into the factories and towns thousands of small farmers and other producers whose whole life has been spent on the land. Indeed, it would be a repetition of the less agreeable features of our own Industrial Revolution.

A second method would be to reduce the surpluses by a vast reduction in farm prices. This would discourage production and there would be a smaller output from the existing acreage. This would lead to poverty and hunger. When we have poverty and hunger it is not long before we find ourselves in a revolutionary situation. How much better to encourage full production throughout the whole of Europe, including Britain, through good price arrangements and an assured market. The assured market would consist of some 350 million Western Europeans, all on a rising standard of life secured by wage/price leadership in the hands of a common European Government. There would still be huge food surpluses, of course, but an organised marketing system could dispose of them to the underdeveloped countries.

Indeed, far from finding surpluses a disadvantage, they would become a necessary part of the process of production, and machinery could be established to dispose of them regularly. By disposing of them to Pakistan and India and the underdeveloped countries, an act of charity would become practical politics. It would also be a strong instrument of real policy, as when the hungry are fed and standards are raised the basic cause for political upheaval and revolution is removed. To finance the whole scheme the European Government would have to carry the project on a common European budget, and the burden would have to be fairly shared by all Europeans. But in helping others we should also be helping ourselves. The British farmer would benefit, because no longer would he find the French or Belgian fanner obliged to cut his throat by dumping surpluses on the British market. All food surpluses in Europe would go to relieve the starving.

If this seems starry eyed, may I remind your Lordships that the United States of America were able to feed a devastated Europe after the war in addition to maintaining a high standard of life for its own people. From 1944 to 1952 American aid to Europe in grants and loans under UNRRA and Marshall Aid totalled millions of dollars. Not only has Europe greater resources and more people at work than America, to say nothing of the improvements in methods of production and technology in the quarter century since the war, indeed Europe should be able to help India and Pakistan and other underdeveloped countries elsewhere even more than America was able to help Europe a quarter of a century ago. We have to think in bold and imaginative terms, but these bold and imaginative terms will never be realised without some sort of common Government, which, alas! the Prime Minister and Herr Brandt declared could be left for another twenty years.

I said that there were two decisions at least which required a common Government. The first was agriculture, at which we have just looked, and the second is industry. This second problem just cannot be solved without a common European Government either. It is what I might call the problem of super-capitalism; and when I speak of super-capitalism I am thinking of the great industrial groupings now taking shape in Europe and spanning national frontiers and outgrowing their original national bases. Unilever has long been an example of this tendency. The oil companies and the motorcar industry are others. Even the Co-ops are coming together on a European basis with their inter-Co-op organisation, which will link up their manufacturing and bulk buying operations. And the tendency will continue as this decade proceeds. Indeed, it is inevitable, and made doubly so by the growing competition of the Americans and the Japanese.

These developments will make obsolete the economic and industrial legislation of small national States, and if there is to be no political union in Europe and no European Government to guide the development of these giants and to curb their excesses, we shall have a situation in which the individual countries will have little control of or influence on their affairs. All political Parties in this country accept the need, to a greater or lesser extent, of some Government intervention in the British national economy, and it is all the more surprising therefore that a number of our statesmen do not seem to appreciate the need for a measure of intervention by a central political authority in a European supra-national authority.

My Lords, before I sit down may I say a very few words about what I envisage when I speak of European Government or a central political authority, as I know that the concept itself can conjure up a bogey of centralism and bureaucracy that is worse even than the Kremlin, a bogey that destroys national freedom and inherited values. In fact nothing could be further from my mind. May I give your Lordships an illustration from our life here in London itself. My job takes me to most of the boroughs South of the river. Each of those boroughs has its distinctive life, its peculiarities, its way of doing things—in fact its character. Greenwich is different from Lewisham and both are different from Southwark and Wandsworth. Again all four are different from Merton and Richmond. Yet all of them on certain matters take counsel together in the G.L.C. and abide by their common decisions.

What I want to see established is a G.E.C., a Greater European Council, which will be a genuine and democratically elected Parliament for Europe with the power to make decisions that will be binding on each of the constituent members. Let us learn from history so that we may avoid repeating our worst mistakes. Forty years ago the Government of Ramsay MacDonald, because it refused to act in time, because it was timid and lacked foresight, hastened the slump conditions of the 'thirties and brought disaster to our country. It would be tragic if another Labour Government, or a Government of any sort, by failing to read the signs of the times plunged Britain into an even greater disaster. The days of the nation-State are over and the next step towards world community is, for us in the West, a united Europe which, while retaining all those valuable diversities of national cultures and traditions that constitute their originality, will give sense and direction to our common social and economic interests. To turn the vision of this larger Europe into a reality is one that we shall cast aside at our peril.

4.9 p.m.

VISCOUNT CHANDOS

My Lords, I do not propose to go in any detail into the economic subjects. I shall, of course, endeavour to follow the right reverend Prelate, so far as I can, not in the hope of rewards in this particular life but as an insurance in the next. But I want to keep as closely as I can to the subject and the proper issues. It is quite clear, I think, that on economic grounds alone we are not to-day in possession of the facts upon which we could build the cloud-capped towers of the Community: or, for that matter, to pull them down.

But the White Paper has given me one great piece of satisfaction. It has given birth to a philosophical aphorism from the Foreign Secretary which I hope has tickled the fancy of your Lordships as much as it has mine. Here it is: The more one attempts to give a truthful picture, the less precise necessarily one must be. This sentence is perhaps a fitting pendant to Sir Winston's famous phrase: My views are a harmonious process which keeps them in relation to the current movement of events". By which he meant, and it was something of a joke, "I have changed my mind." The Foreign Secretary's phrase is serious and means "We haven't a clue!". One or other of these two quotations will serve right honourable gentlemen who are Ministers in good stead when they come to answer supplementary questions on almost any subject from almost any quarter.

I personally cannot attempt to judge the economic issues. I am not that presumptuous, in face of what has been said in another place, besides what I have already quoted. In a felicitous phrase Mr. Thorpe said: The White Paper makes the Delphic Oracle seem decisive."—[OFFICIAL REPORT, Commons, 24/2/70, col. 1033.] Then, of course, there is the famous spread, between fine weather and dirty weather, of £100 million and £1,100 million. So I think it is obvious that negotiations must bring—indeed, must be made to bring—the figures more into focus. With that we shall all agree, I think. If they do not, then we should be taking in the dark the most momentous peace-time decision since the Reform Bill. Speaking of negotiations, we can, I believe, make one prophecy with some certainty that it will be fulfilled. If the negotiations succeed, and we are admitted, the Opposition Leader, whoever he may be, and the Leader of the Liberal Party will harmoniously declare that the Government have sold the British birthright for a mess of Continental pottage. That I think we may take to be certain in our Parliamentary system.

Having spent all my life in negotiations of one kind or another, I am inclined to believe that a sensible bargain, or bargains, can be struck by negotiations on the economics. Certainly such negotiations will be long and complex. It is probable that they will be out of the reach of someone like myself who, at my age, has become somewhat weary of statistics and White Papers; and perhaps the general public sometimes share my views.

Behind the White Paper, however (and several noble Lords have referred to this), there loom the political questions which appear to me to be primary and which, even in this House, have been largely put into the background. The noble Lord, Lord Gladwyn, whose powers of persuasion seldom fall short of his powers of perseverance—which are very high—seems in a recent article to have put his finger on this very spot. He said: We should stick out"— not his most elegant phrase, my Lords— in common with the vast majority of public opinion on the Continent and indeed, as it now appears, in France itself, for a minimum of supra-nationality. I am very much with the noble Lord when he talks about the political matters being very primary, but I lose him entirely when he talks about "a minimum of supra-nationality". Yesterday, again, he said: I do not think we can avoid discussion of these great problems"— he was referring to the political problems— with our prospective partners during the negotiations..".—[OFFICIAL REPORT, 17/3/70; col. 1026.] I agree wholeheartedly about the need to bring the political aspects more into the foreground, and I have departed a little from my noble friend Lord Watkinson, who concentrated entirely upon the Common Market increasing the income and the prosperity of its inhabitants. We have also to think about what the effect is going to be on our Government; and I think that phrases like "a minimum of supra-nationality" require analysis and much further explanation.

Let me put my difficulties by way of a wholly imaginary example. Country A, a member of the Community, pursues an over-extravagant policy with regard to social services; or, if noble Lords opposite prefer, pursues an overxtravagant policy regarding defence and armaments. This extravagance, pardonable though it may appear to the political Party advocating it, appears to the rest of the world as inflationary, and this leads to a fall in the relative value of the currency of the extravagant country—relative, that is, to the currencies of other countries who are members of the Community. If this relative value is allowed to continue to fall, then the prohibition of tariffs, or the quantitative regulation of imports, becomes something of a fraud, because devaluation has the effect upon imports of a tariff, by making them dearer, and on exports of a subsidy, by making them cheaper, both of which concepts, of course, are against the whole basis of the Community.

It will be said that this will not happen; that it cannot be allowed to happen if the concept of the Market is to remain intact. But, my Lords, what will happen? The alternative is that the Central Bank—and there obviously must be one—will say, "We cannot buy or support your currency unless your policies are reversed, and unless a much more austere budgetary control is imposed." I should be interested to hear (and I am not asking a rhetorical ques- tion, but genuinely asking for information and clarification on these vital points) how this is reconcilable with the subject of "a minimum of supranationality". I do not understand it, and I should like to be instructed.

I am not frequently in agreement on political matters with Mr. Michael Foot, but I sympathise with what he said in another place when pleading for "the fullest possible discussion about what those institutions will be". Later on, he said: These are matters on which we should not surrender our parliamentary and democratic rights unless these matters are made much clearer than they are now."—[OFFICIAL REPORT, Commons, 24/2/70; col. 1046.] I think they must be. Even the Motion on the Order Paper refers only to the White Paper and not, unfortunately, to the still wider issue. I earnestly beg the Government to address themselves—I do not say necessarily this afternoon but before very much more time has passed— to these questions. The instrument of government in this country is, after all, financial, and I want to understand how it is to be reconciled with the kind of action that would be necessary in the imaginary example which I have given.

Again there is some opinion of the extreme Right which supports our entry into the Community because it would curtail the powers of the trade unions. That is not my thought at all. It is, of course, quite true that if you enlarge the pool of labour, whether skilled or un-skilled, you will pro tanto reduce the shortages which the trade unions have been able to exploit; they are bound to be reduced. I want to see the trade unions in this country strengthened, but only, of course, if their leaders are democratically elected and some new rules are formulated.

Finally, I wholeheartedly agree that the entry of Britain, if it can be sensibly arranged, will have far more important results than mere economics. Several noble Lords have eloquently drawn attention to the need for the European genius and tradition to make itself more felt in the councils of the world. The late Lord Attlee, if I remember aright, was very apprehensive about our mature democracy, with its manifest faults and failures, becoming a partner in a semi or largely federal system in which the three largest partners have had either a short or a tempestuous history—and in some cases both—of democratic government. However, there is another side to this, with which I wish to close. Is it not clear, looking at the world, and perhaps in particular to the United States, that this European point of view should have a greater weight in reshaping the institutions and policies of the Free World? And in this task, participation by the United Kingdom is considered to be little short of essential if the European contribution is to have the weight which it deserves. We in this country have developed the most sophisticated form of democratic government, and it would be a tragedy if our experience was not put to work in the wider context of Europe.

4.20 p.m.

LORD FRANCIS-WILLIAMS

My Lords, I find myself on this occasion on the contrary side to the Church, to most of big business and indeed to what appears to be a majority of my own Front Bench. It is not a position which disturbs me very much, and I feel sure I shall survive it, because, try as I will, I have, on the whole, found it impossible to accept the view held by many of those whose judgment on such matters I normally endorse that it would be a good thing in the short-term, the medium-term, or the long-term for us to go into the European Common Market. The impact effect of entry has been talked about a good deal, and clearly there is no doubt on either side, whether one is for it or against it, that it means a rise in our cost of living and fresh difficulties in our balance of payments.

For the whole lifetime of the present Government we have been seeking to get incomes and prices in balance, and fighting to improve the position in our balance of trade. If we now go into the Common Market the immediate result will be "Back to the drawing board"—or perhaps for most of our people "Back to the treadmill", because we shall have to ask the people of this country again to put up with sacrifices which in the past they have, on the whole, borne with considerable cheerfulness, in order to right the economic condition of this country. There is not much evidence either way that that belief will ultimately turn out all right. It has been said that although prices will rise, wages will follow suit. In the light of past experience one asks oneself whether they will do so, or whether there will not be the same battle to try to prevent them from doing so. One knows for an absolute surety that the income of the old-age pensioners and of those who live on fixed incomes will not go up at the necessary rate to keep pace with this rise in the cost of living, however temporary we are assured its effect will be.

Many of your Lordships have already dealt with considerable force with the impact effects of this decision, notably in the brilliant speech from a former president of the National Farmers Union, in the speech of my noble friend Lord Moyle and in other speeches, and I am sure they will be dealt with with equal force when my noble friend Lord Blyton rises to his feet. Therefore it is not simply the impact consequences—to use that favourite but not very explanatory term—that I am concerned with, but with the long-term view. What I ask myself is what are we doing if we join the Common Market? We are paying very heavily, in the first instance, to join what is a closed-in community, an exclusive club with a strong tendency, as we know from our own past experience, to black ball those who would like to join it. When we talk of all these increasing markets, this benefit from partnership in a great Community, we must make no mistake in realising that it is a closed community.

The extent to which its policies so far have made that clear is perhaps shown by the change of attitude of many people in the United States who were originally all in favour of our getting into the European Common Market, and of every-body else doing so, too. There was only recently strong criticism by the United States Ambassador to the E.E.C. itself about the extent to which the policies of the E.E.C. were undermining the General Agreement on Tariffs and Trade. The attack on the E.E.C. as an instrument which was closing, not opening, the doors of world trade was renewed by the official United States spokesman at the annual GATT Assembly. He and others have warned that it is a matter which we may expect to see reflected in the attitudes of Congress not only to European economic policies but also to European defence policies.

I would recommend to your Lordships a remarkable book, as I think, produced by a number of eminent economists under the editorship of Professor Harry G. Johnson and entitled New Trade Strategy for the World Economy. This book, in a series of articles, endeavours to show— and to my mind shows undeniably—that Britain's best economic future lies not in the European Economic Community but in seeking to develop a free trade area, at first round the North Atlantic but, unlike E.E.C., open-ended and available for others to join—not a closed Community, but one seeking to liberalise all world trade and not sectionalise it.

One of the arguments in an extremely interesting speech by the noble Lord, Lord Harlech, yesterday was that one of the reasons why we should join the European Market was that it would help to avoid the commercial domination of European industry by American interests, which would be bad both for Europe and for America. But I would have your Lordships note that one of the strong arguments of the White Paper itself, set out on page 32, is that if the United Kingdom entered the European Common Market it is likely that we should attract substantially more American investment in this country than if the United Kingdom remained outside. They say, remarking on the amount of American investment in 1968, that "the stakes are high"; and indeed they are.

I remember that I wrote a book some eight years ago which I called The American Invasion, in which I noted that on the basis of estimates by the United States Department of Commerce, the United States investments in British industry already totalled £1,250 million, and that it was increasing by more than 13½ per cent. every year. What is interesting is that, contrary to the experience when Britain was a great capital provider and lender to the world, that money was not going into capital industries to build new permanent works, but primarily into the consumer market industries. Indeed, it is the case that increasingly the British kitchen, the British dining room, the British lounge, the British bedroom, the British bathroom and the British garage are dominated by United States-controlled products. It is also the case that more than half of the English feminine complexion, of which we are all so proud, comes out of American bottles. It is surely the case, as the White Paper states, that if American investment is going to flow into this country at a greater rate than ever, and this is one of the attractions of joining the European Market, we might as well apply for State membership right away.

I ask your Lordships, as I ask myself thinking on this matter for a long time, what would be the ultimate end for Europe if the idea of the Common Market were to succeed, as fortunately I myself think it cannot hope to succeed? The noble Viscount, Lord Watkinson, said that the judgments must be made largely on a business basis, but I am concerned not only with business, as we all must be, but with the quality of life, and I ask myself how this search for a common market affects the quality of life. I begin to fear that if it is the common market, the large identical market, for consumer goods that is going to dominate our lives, then we are headed for a sort of American waste of identical supermarkets and deep freeze foods. Because I think that nobody who over the years, as I have done, has regularly visited America can help but be disturbed by the extent to which, even in the quarter-century since the war, all the idiosyncracies and delights and changes and varieties of American life are becoming ironed out because of the need to accept the values of an enormous con sumer market where the value of being a good American becomes increasingly that of eating, dressing, behaving and thinking like all other Americans.

One need not be a Marxist to recognise that the primary economic mood of a community closely affects and patterns its whole social life, and if we are to tie ourselves to this belief that what ought to dominate our economic and even our political thinking is this building of a great consumer market which will buy more and more of the same things, then I think we should accept the fact that in the process of doing so we shall throw aside much of what we have long regarded as the true quality of civilised life. I do not believe that, if we become more like the French, or more like the Italians, and buy the same things as they do, and eventually pro- duce the same kind of mongrel political constitution which will take in bits from all of us, we shall be bigger than we are now. I think that in all essential things we shall be smaller and so will they.

Goethe once said that the great quality of the British was that they had the courage to be that which nature made them. Nature made us the inhabitants of an island with our eyes turned outward to the whole world, partners in a world-wide Commonwealth of every colour, race and creed. I believe that at this moment in time, when one of the greatest problems of the future is to bridge the gap between the rich nations and the white nations, and the poor nations and the coloured nations, Britain, above all countries, should not seem in any way to be turning its back on that wider world, to seek membership of a white man's club which hopes to be rich, and in the relative terms of the world is, and which is primarily dedicated to seeing that it remains rich whatever may happen elsewhere.

I believe that if we are to be true to what nature made us, we should remember the value of variety and differences among peoples. We should not seek to enclose ourselves within one continent, but should seek rather to develop the markets of the world and assist the un-developed countries, which in the long-term present, even in economic terms, by far the greatest opportunities and markets that lie ahead. Of course we cannot, and must not, turn our back on Europe, but let us not seek to think in European terms alone or primarily. To my mind, because of these considerations both in the short-term, the medium-term and the long-term, the price for entry into this club is altogether too high.

4.38 p.m.

LORD WILBERFORCE

My Lords, I join in this debate, only very briefly as a non-economist, because I believe that figures, whether they are good or bad, statistics whether they are useful or misleading, and economic arguments, whether they are sophisticated or fallacious (and there are plenty of all those categories in the White Paper) have not very much meaning apart from the institutions and the men who have to work them. I should like for a few minutes to address my remarks to the institutions which compose the Economic Com- munity, following in spirit the speech of the noble Viscount, Lord Chandos. Let me recall a few prosaic details, which I venture to do because over the last seven years or so I have personally had an opportunity of making acquaintance with the Community's institutions and with a considerable number of the personalities who are at the head of various branches of them.

The main treaty which we have to sign, the Treaty of Rome, is a document of some 250 Articles in four languages, soon to become five languages, with Annexes longer than the Treaty itself. There are of course a number of other treaties as well. In addition, there is a mass of subsidiary legislation which puts this Community together. There are directives, decisions, recommendations and, most important, regulations which have the force of law. These regulations, some of which are now long and elaborate documents of economic control, are now running at the rate of over 1,000 per year. On all of these documents, the Treaty and the subsidiary documents, there are numerous decisions, of a lengthy character, of the courts in Europe—the European Court at Luxembourg, and the Superior Courts of the member States.

All of these together make up the structure which composes the Community; and when we join the Community it is not a question simply of jumping over a wall and finding our-selves inside a garden of paradise in which we can pluck the now forbidden fruits. What we have to do is to enter this enormously elaborate network, subject to any transitional arrangements that may be made. The members have had ten years to adjust themselves to legislation as it comes through. We have at one blow, subject to what we can negotiate, and subject to any transitional period, to swallow the whole lot. After we have entered, we have to play this game according to its rules, its very elaborate rules.

The member States, their enterprises, their companies and their businessmen are occupied a good deal of their time in scrutinising this legislation—the Treaty, the regulations and so on—to see whether they apply to their businesses; whether there is any legitimate way they can get round them; and whether the other fellow in another State is evading their provisions. That is a full-time and very expert job for a large number of people. That is why and where, my Lords, I believe it is very necessary that, if we are to estimate our chances of doing well or badly out of our entry into this Community, we must look to our expert and legal resources. Mr. Enoch Powell, who has a knack of hitting nails on the head, said the other day: On the whole, Europeans have sharper minds than we have", and I believe that to be true. It is certainly true that very many European politicians, administrators and diplomats have had a legal training. That, in this country, is an exception. Fortunately, the remarkable man who is going to lead our negotiations, Sir Con O'Neill, happens to be trained as a lawyer. That is very exceptional, however, and unless we are able to strengthen his team and the infrastructure of business lawyers in this country, we shall stand very little chance of engaging on equal terms in this work.

There have been formed, fortunately, in the last five years a number of associations of business lawyers training themselves and equipping themselves for precisely this job. I was present only last week at two meetings of different associations of such lawyers, attended by people from the Communities. Another interesting figure (I apologise if it has been given already, but I cannot find that it has) is that there are no fewer than 26 universities in this country which have courses of one kind or another on the European Economic Community, many of them including courses on business law. That is a very good thing; but I think it worth while, if I may, to try to encourage Her Majesty's Government to back, so far as they can, meetings of this kind; to encourage and support courses and seminars and interchanges. I know that on many occasions they do just that, but there is always more that can be done. I would also urge them to give good travel allowances to people who want to go and study these things outside this country; and to support, as I am sure it will become necessary to support, the setting up of a central research institution which will compile, bring together and give advice upon these extremely elaborate and technical matters. Whether that is done as an extension of Chatham House or the British Institute of International Law or both of them, I feel sure that something of that kind will have to be done and greatly expanded in the next year or so; and I therefore appeal to the Government to give whatever help they can.

The lawyers are doing what they can to improve and train themselves. Of course, lawyer-baiting is a popular pursuit nowadays, second in popularity, perhaps, only to the baiting of vicechancellors; but we do depend, and we shall depend very much, on these people, and our economic success or failure can be very largely influenced by their skill or otherwise. This does not come in only as to negotiations for entry, important though they are. It does not come in only as to such constitutional safeguards as we want to get in order to preserve the sovereignty of Parliament, and so on, important though they are, too. There are also a large number of constructive matters on which those who combine knowledge of business and law can help, some of which are already of concern and in development in Europe. Some have been mentioned already in this debate: the formation of European companies, overlapping national boundaries; the construction of a European patent law; the development of a consistent law as to concentrations and mergers. All of these are important enterprises which, if developed in the right way, can fertilise and stimulate economic activity. I believe that the widening of the horizon in this way is one of the items—the invisible, intangible items—which has to be brought in, together with the figures which we find in the White Paper, before we can properly assess what we are going to gain or lose by joining the Community.

I have spoken of the widening of horizons in a limited respect, and I must, if it is proper to do so, record my conviction that this technical, limited and economic widening of horizons in the respect which I have mentioned is, in my belief, only a part of a much larger and more general process of escaping from our present slough of parochialism, frustration and dissatisfaction with ourselves— a reason which alone would justify our joining the Community. But that is another story. I said that I wanted to confine my remarks to one particular aspect, and I will not enter into these very much broader and wider aspects.

4.49 p.m.

LORD BLYTON

My Lords, in this debate to-day we have heard Lord Watkinson and Lord Brown put the point of view of big business for joining the Common Market very impressively. Therefore, they need no help from me. But in the course of my speech I want to say something about what the working man and the man and the woman in the street are saying about this issue. Since the publication of the White Paper, Mr. Maudling has accused the Prime Minister of turning the Common Market issue into a political football. Apparently, the question of our entry into Europe must not be a political issue. But unfortunately for all those who want to go into the Market, it is a political issue already. It is a matter of such national and historical importance that the Prime Minister is right to highlight the Tory Party policy of adopting the Common Market principles of the value-added tax and the food import levies with all their implications. And he was right to ask what their terms of entry would be.

Whatever may be the attitude of the Government—and they keep their options open to go either way, either in or out— at least in my attitude I am voicing the views of the Labour Party Conference which is nearer to my views than those of my noble friends who wish to rush us into the Common Market. I say to the Prime Minister that he should fight the issue of entry itself. He was of my view for years; and I have seen nothing that has happened over the past few years to have changed his views over this. What I am certain of is that if he fought the issue of "no entry", now that the White Paper has spelled out the awesome cost, he would find the people of this land behind him, and he would unite the Labour Movement behind him if he took this line. There is no use in blinking the fact that the majority of people in Britain are against going into the Common Market. I know that the Prime Minister refuses to go that far; but if the Government persist, then I am sure when the Election comes they will go to the country as a Party bitterly divided. If he takes the line that I suggest, there will be unity against a Tory leadership in which they will have to set out their entry terms.

Of course, our opponents would cry "cynicism". It is not electoral opportunism now at work in the Labour move- ment; it is quite simply that Common Market entry, on what terms we can foresee, carries the greatest threat to our living standards since the 1930s. During the years since 1955, the proMarketeers have changed their ground many times. In 1955, we were told by Mr. Macmillan, the then Premier, on his application, that there were great prizes for us if we went in and dire perils if we stayed out. Then the Marketeers shifted their ground and said that in the short term it would be difficult, but that in the long term there would be an El Dorado with great benefits.

Now we are told that it is not so much the economic case for going in as the political case. In all this controversy we have never had spelt out to us what these great benefits on entry are. The alleged advantages are remote and unintelligible.

When the White Paper speaks of these supposed benefits, as my noble friend Lord Brown did to-day, it abandons facts and figures and hides behind meaningless words like "dynamic", "quantification", "specialisation", and other words that convey nothing at all. There has been one result since the White Paper was published. It is that the opinions that I hold are now held by over 60 per cent. of the people of Britain. No matter how the political Parties manoeuvre to prevent this becoming a political issue for the people to decide they will miserably fail.

In speaking on the White Paper I want to deal with the economic and also the political aspects. I am sure that I may be told that the White Paper does not deal with the political aspects, and I will accept that; but for all that the economics and politics in this issue are inseparable. The effect produced by the White Paper on the cost of going into the Market is, I think: "Pay more for a reduced standard of life". The housewives of Britain are in no doubt that their grocery bills are going to rise tremendously The White Paper admits that going into the E.E.C. will put prices up by as much as 26 per cent. But the White Paper then states that the food bill may be reduced a little, "allowing for changes in the pattern of consumption". This simply means that the poorer people will have to be content with a meaner diet. It will be margarine instead of butter; and with meat at 15s. 4d. a lb. (against 8s. 7d. here) they, like the Continental poor people I have seen, will be forced to eat horsemeat—which will be the likely portion of the British housewife.

It also means that our vast improvement in the standard of life over the last ten years will be thrown away in order to pay the housekeeping bills of the Europeans. The price of foodstuffs of the people is to go up on entry, whether the transitional stage be short or long. From reports from Brussels, we learn that it is likely to be short; and so far as France is concerned, we must pay the whole price. For what? Where are the advantages to compensate us for this huge sacrifice? The White Paper says: It has not been possible to quantify the beneficial effects of entry at all. This, in plain language, is to tell us that the Government are aware of the massive disadvantages in joining but have not the slightest idea of what good it is going to do us if we get in.

LORD GLADWYN

My Lords, does the noble Lord really think that if we go into the Common Market the people of this country will be reduced to a diet of horsemeat and margarine? If he does, does he think that any Government in this country would be likely to accept such terms?

LORD BLYTON

My Lords, all I would say to the noble Lord is that I went to Strasbourg years ago; I have been through this for twenty years. If you go to the working class areas of Paris and Brussels, you will see that the people eat horsemeat because they cannot afford to pay the price of other meat.

My Lords, since I came to your Lordships' House I have consistently said that a huge economic burden would be inflicted on Britain if we entered the Common Market. The White Paper has confirmed what I have said in this House over the last four years: that the damage would be great. It is not my intention to quote the prices of Common Market foodstuffs against our prices; they are in the White Paper for all to see. But they are exceedingly harsh and sharp for everybody with small incomes, and they are particularly hard on old and retired people who spend the highest proportion of their income on food, as do the large families in our country.

In the 1967 White Paper the rise in the cost of living was calculated at between 2½ per cent. and 3½ per cent. Now we are told that it will be from 4 per cent. to 5 per cent. because food prices in the Common Market have been going up. My experience over the last ten years has been that they never come down! The White Paper does not estimate what further addition there will be to the 4 per cent. or 5 per cent. rise if on entry we were forced, as we would be, to adopt the E.E.C. value-added tax. This value-added tax is a tax on consumers; and, in passing, I recommend your Lordships to read a pamphlet by Mr. Alfred Morris, M.P., on this important issue.

There are only five lines in the White Paper on this vitally important subject of entry into the Common Market. If you read the unpleasant story of the value-added tax, it shows that it could have an even more serious effect on the cost of living than the E.E.C. agricultural regime. In Holland, when this tax came in, prices rose immediately by 5 per cent. In other countries the increase was 7.9 per cent. Holland had to delay the second stage of the tax at a cost of 500 million florins to their Treasury. So I say to the country and to the housewives at large, "Be warned!, because this has got to go on top of the other 4 per cent. to 5 per cent. if we enter the Market."

Again, my Lords, we have the Confederation of British Industry saying that we shall have to adopt this tax and add 1½ per cent. to 2 per cent. on the cost of living. As I said, it goes on top of the 4 per cent. to 5 per cent. At the present time there are millions of workers requesting a rise in their wages to compensate them for existing inflation. What do your Lordships think will happen when this terrific burden is placed on them? Demands for increased wages will come in from everywhere, and where will be our competitiveness in world trade? The most gratifying cause of our increasing exports has been the keenness of British prices compared with those of other countries, and this in a large part has been due to low food costs in this country. That advantage will be thrown away. We have been told that the primary reason for entering the Common Market is to increase our industrial exports, but I think that the cost of admission will make that objective impossible.

My Lords, let there be no mistake about the outcome of entering the Common Market. Organised workers will fight bitterly against this planned attack on their standards of life. Already large unions have given notice of this. So has the Trades Union Congress. There will be a steep rise in wage and salary levels all along the line, and consequently a rise in the cost of manufacturing our exports. That will affect us alone and not any of our competitors; not the E.E.C., the Commonwealth or countries in the outside world, like Japan. It will be a huge kick at our competitive power in the export markets. At present we are doing very well in trade with the E.E.C., without the rigidities of the Treaty of Rome. We increased our exports to the Community by £230 million in 1969 compared with the figures for the previous year. Why do we want to change the present arrangements for a system fraught with such parlous problems under the Treaty of Rome?

As I said, my Lords, organised workers will fight. But what about those who cannot fight? What about the pensioners and folks on fixed incomes, and those who are already struggling to keep going? There are hundreds of thousands of these people and they will be crushed. That is what entry means in human terms. The savage blow to our competitiveness will be only a beginning. We shall have to pay tremendous sums to the Common Market Agricultural Fund. That is a fund to bolster up inefficient farmers in Europe, especially in France. Do the Government think they will be able to reduce the price of agricultural goods by negotiation? I do not think for a moment that they will succeed; and after the agricultural policy of the Six is there any room for negotiation on that issue? The financial regulations governing payment to the E.E.C. Agricultural Fund were fixed at The Hague in December last. The French have pronounced them fixed and irreversible. In fact, no negotiation can start at all until those regulations, which will impose a huge burden on our Budget and balance of payments, have been ratified by all the Parliaments of the Six.

It is only three weeks ago that all attempts to reduce the price of a single commodity again failed, and the present policy is fixed until late in 1971. The Government are superoptimists if they think that the Six will change their attitude for us. It must also be remembered that the largest political Parties in Europe, and especially France, Italy and Germany, are still largely dependent on the agricultural vote. However, my Lords, as much as I am against being swallowed up in Europe, if the argument is that their food policies will be altered, the time to negotiate is after they are altered and not before. We cannot afford voluntarily to add a great weight on the already heavy burden that the British public is carrying. The agricultural payment means that the British taxpayers and housewives will have to pay for inefficient Continental farmers to save Continental taxpayers from having to meet the bill.

The White Paper estimates that this annual cost might be between £150 million and £670 million a year. I would put the figure at £500 million for this alone. Our balance of payments will have to bear a higher price for imported food. We should have to take food from inefficient Continental farmers at high prices instead of from the more efficient Commonwealth producers. The White Paper puts this at a figure of about £100 million, which I think is an under-estimation. But even at this figure it assumes that Britain will eat less.

The document frankly admits that, together with all this, we shall lose exports, for two reasons: first, the higher labour costs and export prices will lose us trade; secondly, our far-reaching preferences with the Commonwealth, South Africa and EFTA would disappear. The White Paper also suggests that, allowing for all the gains in exports within the Common Market, the trade balance would be between £125 million and £275 million worse off. The effect of entry, summarised in paragraph 76 of this White Paper, represents both a loss of preference over a wide area and a handicap to our exports over a world area; and I believe it must follow that the loss will be the higher figure, if not even more than that.

My Lords, that is a striking conclusion. I believe it to be the truth that if we stand to gain £250 million a year in exports within the Common Market, the White Paper must then be assuming that we shall suffer a loss of exports else-where and an increase in competitive imports of the order of £450 million. Surely this makes nonsense of all the talk that we have heard over the years about a wider market being opened to British industry if only we join the Common Market. On the admission in the White Paper we shall lose more exports to the Commonwealth, EFTA, South Africa and the rest of the world than we shall gain in the Common Market. British industry sales at home would also be lower than they would have been, due to the great increase in competitive manufactured imports caused by our higher costs.

Therefore, on balance, the market for British goods, far from being widened, would be narrowed. Exports would be smaller than they would have been, and our imports higher. The C.B.I. make a contribution on this subject and calculate what we gain in the E.E.C. and what we lose. They find that the loss in exports in the preference area would probably cancel out the gain in the E.E.C.— and this without counting in the loss of EFTA or the loss throughout the world due to the higher labour costs on cur exports. So we see that the C.B.I. and the White Paper arrive at the conclusion that joining the E.E.C. under their present policies would in the long term narrow and not widen the total world market open to British industry.

Both the White Paper and the C.B.I. report reveal that all this campaign about a wider market for us is just fiction, an illusion and the reverse of the truth. Both, having done these sums, say that it would be narrower. And all this talk of a market of 300 million and what it means to us is given a severe blow. All this damage would be permanent and would grow as our trade grew. The loss to our balance of payments, admitted by the White Paper, would be anything up to £1,100 million. Many of the economic articles I have read since the publication of this Paper regard it as imprudent not to expect an extra permanent burden of about £1,000 million a year, rising there-after year after year in proportion to our trade and national income. That does not include capital movements.

This must mean political weakness for us, as we become again a borrower and a debtor. And surely we have learned by now that this means freezes, squeezes, slow growth and stagnation. We have all experienced since 1947 up to 1969 that all Governments have imposed credit squeezes and deflation, not because they liked it but because they were compelled to try to correct the balance of payments.

Those on the Labour Benches know that we have been faced with political un-popularity in the last four years because of credit squeezes, wages restraint, increased prices and higher bank rate to get the balance of payments we have now. If we join the Common Market, are the people going to face all that over again, probably more stringently, with a burden of £1,000 million a year on our balance of payments? To inflict that burden needlessly on our country would open up a new, depressing prospect of deflation, slow growth and stagnation, as we struggle again over the years to get clear of the burden of chronic deficit.

The White Paper admits that defensive policies might be enforced on the United Kingdom Government to restore the balance-of-payments position at the cost of damaging the growth of industry's market in the United Kingdom. The worst effect of all of joining the Common Market on those terms must mean stagnation and technical backwardness in British industry. "And for what", the people are asking, "should we be asked to inflict these huge burdens upon ourselves?" There is no answer in the White Paper or elsewhere that I can find.

The disadvantages and sacrifices are immediate, certain and heavy; the alleged advantages are non-existent, for the White Paper, as I have said, uses words that are jargon. Anyone who reads the White Paper, let alone all the other evidence available elsewhere, must realise that joining the Common Market under the conditions of the Treaty of Rome would impose on us large and unnecessary sacrifices and give us nothing in return. It is often conveyed to the public that joining the E.E.C. would give us economic growth, as if the Treaty of Rome held some magic formula for us. I hope that we are not going to be deceived by that kind of thinking.

First, it must be remembered that the Six countries did not suffer at all under the adoption of agricultural protection, because they were already suffering from it. On the other hand, the effects on them were entirely different from what the effects would be on us. Then it must be remembered that the economic growth of the Six was greater in the years before the Treaty of Rome was signed than it has been since. From 1955 to 1960 the average rate of increase of the gross national product of the Six was 5.3 per cent.; after signing the Treaty it is down to 48 per cent. Again, between 1960 and 1968, since the Treaty was signed, the growth rate of the Six was 4.8 per cent., while the growth rats of the O.E.C.D. countries other than the Six was 5.1 per cent. The simple truth is, as the record makes clear, that the Treaty of Rome has little to do with growth rate, one way or another. Our slow growth rate in this country has been the result of exceptional balance-of-payments deficits. By arguing on growth rates one could prove that we should not join any country. The lesson of this is that, if we are to get out of the position of slow growth, Britain must avoid future payments deficits.

No matter how one analyses the White Paper and all the evidence available, joining the E.E.C. will certainly involve us in a heavy chronic deficit. Often one has to pay an economic price to maintain political freedom, but we are invited, in joining the Common Market, to pay a large and lasting economic price for the spectacle of giving away for ever a large part of our economic freedom, without even asking the people or without our Parliament having any control over the future. Therefore we cannot ignore the political implications that arise if we go into the Market.

I think that the Government might agree with the noble Viscount, Lord Chandos, that we ought at least to have a White Paper on the political implications, which would give us a clear under-standing of where they stand. We have the Foreign Secretary, talking abroad, accepting all the political implications of federalism or supra-nationalism while the Prime Minister tells us here that federalism has no place with him.

The Brussels Commission is not a democratic institution but a bureaucratic one. It makes its report to the Council of Ministers and is not responsible to a Parliament. It can make decisions affecting a nation's economy, and the nation must accept its views. The real question that we must all ask ourselves (I do not want to go too deeply to-day into the political issues) is this: are the people of Britain prepared to abrogate their sovereignty; to have defence and nuclear strategy, their economy, social services and commercial policies, all controlled by a Parliament in Europe, with no power resident in Britain? Or do they believe in supra-nationalism, as we have it under the Treaty of Rome?

Once we have entered under the Rome Treaty, a loss of sovereignty also takes place. Once we have ratified the Rome Treaty and surrendered legislative powers we can never recover them. Signing this Treaty is legally irrevocable, with no provision for denunciation or secession. Signing this Treaty would not only be unprecedented, it would be taking out of the hands of the British public for ever a major part of their power, which it has taken them centuries to secure, to legislate on their own affairs. It will destroy the Commonwealth that we have built up—and I know that many have no use for the Commonwealth to-day. It would be intolerable if a decision to go in were taken without gaining the approval of the electorate.

The whole concept of the Treaty of Rome is founded on the central belief that modern society ought really to be ruled by the expert, the bureaucrat, the technocrat, and the scientifically wise men who find all the answers to questions unaffected by the pressures of interests or politics. It is rooted in an essential distrust of the people, and that is why its constitution is illiberal and undemocratic, not merely in its legal form, but in its basic philosophy. That is why we should have a White Paper on the political issue, in which the Government set out fairly what the Rome Treaty really means to the people.

My Lords, if there is to be a great debate, then it is imperative that the people should have a say in this important decision, the most important in any of our lives. There is no plan that I know of to allow the public to speak the final word on one of the biggest constitutional issues ever to face our country. The Leaders of the three Parties are committed, in varying degrees, but the Labour Party outside is not; and our Conference is not. Are the direction of people's lives, their control over their own affairs, their standard of living, all to be taken out of their hands without a voice? This would be a shameful way to do it. I am hopeful that, whenever the Election comes, every candidate will have to declare where he or she stands.

It is well to remember that seven years ago Mr. Harold Wilson, our Prime Minister, wrote these words on the Common Market: This issue is beyond the power of a dying Government to determine. Before any irrevocable step is taken, the British people must have the final decision. I agreed with these sentiments then, and they hold as good to-day as when the Prime Minister wrote them seven years ago. Let us give the people the facts; let the debate prevail in the country, and let them decide whether we should go in or not. That is the democratic way. My Lords, it is their future that is involved, and it is they who should decide.

5.23 p.m.

LORD ST. OSWALD

My Lords, I should declare at the beginning that I find myself unable to follow the noble Lord, Lord Blyton, by so much as a footstep in his Jeremiad, addressed more to a dying Government than to your Lordships' House. As between Parties, though patently not between individuals, this has been one of the most harmonious debates that I can ever recall on a great issue in this House. The single ripple which I shall reactivate will not disturb the inter-Party placidity of this discussion, but it is something which I consider needs saying at least once again.

Together with many others, I have to admit myself perplexed as to why the White Paper was produced in this form. Those who compiled and set their seal of approval upon the White Paper before its printing are people, we know, who tread alertly and watchfully the paths of political life. They must have known in advance what its reception would be in Parliament and in the country. In the corridors and the meeting places of your Lordships' House on the day of publication there was a festive climate, a climate of jubilation, among the opponents of Britain's entry. I was myself told by one noble and jovial and defiantly insular Lord: "This as good as buries the whole question. It's all over bar the shouting." I am told that the same mistaken atmosphere existed at the other end of the building. This was inevitable, despite the cautious and anodyne ministerial statement with which the document was introduced in both Houses. It was inevitable once the text, and in particular the tables and the astounding span of statistics, had been studied.

It was certain—and it proved to be the case—that the upper bracket of estimated costs of entry would be seized upon and bandied about by the opponents of entry; but the proponents, I am pleased to say, have been too responsible to seize upon the lower bracket as if the eventual figure were bound to be in that close proximity. Even the noble and highly responsible Lord, Lord Silkin, speaking in favour of entry yesterday, suspected that it would be "in the order of £1,100 million or something less." Even such reasonable men have picked the higher and alarming figure as if it were the indicator, which I believe it certainly is not.

As a result, a great many people in this country have been shaken to the depths of their pockets. To the best of my knowledge, the Government have never answered the question as to why those significant and essential words in paragraph 44 were tucked away so in-conspicuously. The words are: But in the crucial area of our financial contribution to the Fund, there is just not sufficient basis, in advance of negotiations, for making reliable assumptions either about its cost or our share of it. I should have liked to see that statement so placed as to focus attention upon it, since it governs everything set out in paragraphs 12 to 44, which contain or cause the most obvious and pervasive anxiety. It would have been useful to see that passage in the opening words of the introduction to Chapter II, on Agriculture and Food. In fact, that introduction opens by saying that the chapter will examine the effect on our agriculture, food costs and balance of payments, whereas the closing paragraph contradicts that claim by saying that no forward-seeking examination can be made in advance of the negotiations themselves.

The noble Lord the Leader of the House did much yesterday, and with great skill, to interpret the White Paper. Unfortunately, from what I have seen from the Press this morning, his comforting interpretation has not been given the publicity received, so generously, by the misinterpretation, to which he himself caustically referred in his speech, as did my noble friend Lord Harlech. Last night I attended a dinner, for which I regretfully had to leave this debate, at which M. Théo Lefévre, former Prime Minister of Belgium and the present Minister of Technology of that country, made the principal speech. In the course of it no diplomatic stop was left unpulled. Nevertheless, he made it plain that the White Paper had been read within the Community as being an intended rebuff by Britain, which I am satisfied it was not. This accorded with what I had myself heard from the Continent, and is in some conflict with the reassuring remarks made yesterday by the noble Lord, Lord Caccia, whose opinion on such matters I normally take as something close to Holy Writ. I mention it not as anything grievously burdensome, but as a gratuitous additional weight with which the Government, however unwittingly, have saddled themselves. It will require an extra effort of diplomacy to free themselves of that needless handicap.

That is, I think, the only faintly critical note that I have to raise in a deliberately low-keyed and prosaic speech. I should like to comment that, although the noble Lord, Lord Brown, announced modestly an "earthy" speech, I personally found it positively uplifting from beginning to end. I believe that the prospects for entry are better than reasonably rosy. I believe that anyone who regards the concept of European unity as "a good thing" in the definitive phrase of 1066 and All That, will be in a sunny mood at the outcome, and that even the most anxious doubters will have ultimate cause to be well satisfied. I do not believe that the present Community will make an artificially low price, detrimental to their own existing progress. I am equally confident they will not make an artificially high price to our detriment.

In my thinking, which I do not wish to force on anyone else, the cost of food has been given an importance, an alarmist importance, out of all proportion to its danger or potential harm. I speak both as a farmer and, at times, an over-consumer. The negotiators for the Six are likely, it seems to me, to say to the applicants, though no doubt in more polished terms: "You wish to come in because you think that commercially and industrially you will benefit, as will we. Between us we must strike a balance so that this benefit will more than offset, and permanently offset, the temporary problems you will experience in the context of food and agriculture—that is, consumption and production." If they also have reason to say, "But you now declare yourselves unwilling to pay even a reasonable price on the roundabouts for that greater benefit which you expect on the swings", then I fear the negotiations may well founder. Logically, if crudely expressed, if more money is flowing into this country because of increased trade, and supposing that money will be equitably distributed, there will be more wealth to pay for dearer and better food.

Although the noble Lord, Lord Blyton, has now left the Chamber, I must say that his dismay about the idea of anyone in this country being forced to eat more inferior food is really romanticising, it seems to me, from the platforms of many years ago. Because if he had studied the figures given in his noble Leader's speech yesterday he would have had a more correct view. It is only, in my submission, if our negotiators were to insist upon the best of both worlds outstripping, by a private and artificial arrangement, opportunities enjoyed by other members of the present or enlarged Community, that in such a case our price would be declared too high. From what we heard in the opening speech of the noble Lord, Lord Shackleton, this is not the kind of clumsy or selfish or expensive error that his colleagues are likely to make. Equally, if we were to be excluded by terms too stiff to be tolerable, I believe that that would be widely regarded within the Community as a betrayal of Europe, and the Community as a whole would suffer from that internal as well as external injury. It would bear with it a stigma that no individual country would wish to inflict upon itself.

When Mr. Edward Heath and Mr. Christopher Soames were negotiating in 1961 to 1963 they approached each problem—and there were many—by seeking the best solution for the future Community as enlarged by the United Kingdom, not permitting British interests to eclipse the common interest. They threw nothing away in terms of true British interests. They won immense esteem among those they dealt with on the Community side. This I have heard from many of those engaged at the time, including, notably, M. Pisani, who was the French Minister of Agriculture during that time in the Government of General de Gaulle. I also know, from more recent visits to Brussels and Paris, that Mr. George Thomson is building up the same sort of valuable reputation in the six months since he was assigned to this task in advance of negotiations. There is also, needless to say, great satisfaction that Sir Con O'Neill is once more at work in the field he knows so well.

There is one way in which the next negotiations will be not more difficult but more circumscribed than those on the last occasion, and other ways, more decisive, in which they will be conducted under far more favourable augury. I think I must describe them together because they are interacting. The earlier talks were held in a period when the Community was still in a fairly fluid state—still settling upon its modus operandi. In this way, for example— and this is particularly appropriate this afternoon—and directly as a result of our negotiations, the British pattern of an annual agricultural review referred to yesterday by the noble Lord, Lord Walston, was introduced into the Community system. This could be done because the Six were still in their own transitional period. That 12 year period is now over for them, and the system is in working order, although, as we know, and as they admit, some very important and even drastic adjustments are needed to make it work perfectly. Therefore the new applicants, of which we shall be the first in order of presentation, cannot expect to negotiate the mechanics on which the E.E.C. will operate and is already operating. We shall have to fit into the system or not, as the case could conceivably and lamertably be.

What we have to recognise is that a European coalition—and a very powerful coalition—exists on the Continent. Others have existed in history. Britain has never taken up a posture of indifference towards them. Some we have joined, some we have aided in destroying. There is no question of the latter here. It would be totally at variance with our history, and unworthily so, willingly to stand outside a coalition which is in being and permanent beyond a peradventure. Others, in particular the Leader of the House and my noble friend Lord Harlech, have already put this more lyrically, but I believe it bears repetition, because it will be a fundamental factor in the minds of those who meet across the table in Brussels, or wherever the table may be located.

The negotiations will not, as I under-stand it, take the form they took between 1961 and 1963, for evident reasons. There will be three main divisions in the search for settlement. There will be the mechanics of the Economic Community as they stand, and questions as to how the applicant country will fit into these mechanics. Such discussion, as I understand, will most likely be handled by the Commission.

Secondly, there will be a range of decisions which still have to be taken by the Community, related, for instance, to Parliamentary control, nuclear energy, transport and the development of a monetary policy. In these, each of the applicant countries will rightly be accorded a voice and a share in decision-making from the moment negotiations begin, and the Council of Ministers of the E.E.C. will clearly have to be involved, perhaps together with the Commission. Finally, there will be purely institutional questions created by the act of enlargement, such as what representation each acceding country will have on the numerous existing bodies. This will logically be a matter for Ministers of the Six, reporting to their own Governments.

What will be different this time, and advantageously so, is that prior responsibility to negotiate and agree on the terms will be given to the Ministers representing the Council, and their word once given will be binding. This will be in contrast to the earlier process by which, whenever a point of issue rose, the Community team had to gather apart from our team to decide between themselves what their stand would be on that particular point. It was a frustrating, time-wasting formula, which has been wisely superseded. Here there are likely to be two or three Ministers, given agreed terms of reference by the Council, and power to make decisions within those terms of reference.

There is another circumstance of almost certain value which, it seemed to me, the noble Lord, Lord Gladwyn, tended to rather underestimate, perhaps for the wise sake of caution. Last time we should have been in but for the veto of General de Gaulle. This time, it is confidently agreed, there will be no French veto. The noble Lord assumed, however, that the "xenophobic element in the Government and especially in the Assembly" would be strong enough to "insist upon pretty severe terms". Well, I do not pretend to know the individuals as he does, but what impresses me is that we shall have three French Ministers most closely concerned in the negotiations, and all three of them are cordially and powerfully in favour of Britain's entry. They are, M. Schuman the Foreign Minister, M. Giscard d'Estaing, the Finance Minister, and M. Duhamel the Minister of Agriculture. We could not wish for a more friendly trio. Undoubtedly their views and intentions will have to be submitted to the Prime Minister and the President at least once a week when the Wednesday Cabinet meeting is presided over by the President himself. The Prime Minister, M. Chaban Delmas, is a convinced European, and M. Pompidou, to put it no more hopefully than that, is open to conviction in a way that his predecessor never was.

There is, of course, as the noble Lord has just reminded me, in the French Government M. Debré, the upright sentinel over the Lares et Penates of Gaullism. But, as Minister of Defence, he has little immediate influence over the course of economic negotiations. Moreover, I am told by those who know him that he is the reverse of antagonistic to Britain. He is, however, more doubtful than most of our sincerity. It will be the task of our negotiators to offset or dissipate or cure that genuine scepticism.

Last time the length of the transitional period for the "easing-in" of the new member was a matter for earnest discussion. That is also far more circumscribed now, since the meeting of the Foreign Ministers on the 6th of this month. There they decided that by the end of 1978 the Commission would have its own resources, its own permanent income as it were, and be no longer dependent on annual votes from member Governments. That revenue will consist of the whole customs duties received through member countries, collected at their ports or frontier posts, but passed directly to the Commission. This, plus 1 per cent, of the value-added tax, will be the source of income for the Commission and for its spending role in the Community. This means, self-evidently, that no ceiling can be fixed for the British contribution to the Agricultural Fund beyond 1978. If we enter in 1973, that would give a transitional period which could run to 1978 but not beyond—a period of five years for what I have called the "easing-in" process.

There is one final matter which I would automatically have left out of my speech had it been touched upon directly by any other speaker so far. The right reverend Prelate the Bishop of Southwark went plunging bravely through the general area, and at one moment I thought my noble friend Lord Chandos was going to deal with the present state of play, but neither did so. It must have a direct bearing on the economic negotiations. At the historic meeting of E.E.C. leaders at The Hague in December a very important task was allotted to the Foreign Ministers. They were told to prepare a report before the end of July upon the progress of political unity, in the prospect of an enlarged Community.

They met on March 6, a fortnight ago, when, by agreement, each instructed his Director of Political Affairs (a post which does not precisely exist in our own Foreign Office) to act as the Deputy of the Foreign Minister himself on this question. The Deputies were to put their ideas together and submit those ideas to the Foreign Ministers gathered in Rome immediately after the Nato Conference at the end of May. In one or two or three days, conveniently following upon the Nato Conference in 10 weeks' time, they will decide on what proposals will be put before a meeting in July, at which almost certainly Britain will be present.

Up to that point in July, the four present applicants will be kept informed of the thinking on this cardinal matter, and invited to make their comments. Once negotiations are opened, the applicant will take part in these discussions as an equal with the existing members.

LORD GLADWYN

My Lords, may I intervene for one moment? Does the noble Lord think that the other applicants will come into this, too?

LORD ST. OSWALD

My Lords, as I understand it, the agreement between the Foreign Ministers is that as applicants present themselves they will join as equals with the others in these discussions. The overriding significance of that is that if an applicant Government were to say that its country wanted no part whatever in an eventual concept of political unity and would take no part in the advance towards it, that would be sufficient to exclude the country itself from membership of the Economic Community. It is clear that no conceivable British Government will take such a line, but it seems worth appreciating that qualification, for membership hangs upon it. My Lords, for whatever little my personal blessing may be worth, let me say that any Government who can guide this country honourably and beneficially into Europe will have my blessing on that act, however that Government may be composed.

5.46 p.m.

LORD JACQUES

My Lords, it would appear that the balance of opinion in the country is opposed to our joining the European Economic Community. I believe that the reasons fall under four headings. First, it is much easier to communicate the short-term costs than the long-term advantages, although estimates of the short-term costs are nothing more than informed guesses and lend themselves to exaggeration. Secondly, there is a tendency either to ignore or to underestimate the significance of changes that have been made and are being made at the present time. One of these changes is the gradual erosion of the captive colonial markets which we once had. Another change is the diversification of the economies of the countries of the white Commonwealth as a natural consequence of the increase of their population. Furthermore, they have far greater opportunities of trading more economically with countries nearby. And, as the White Paper points out, in the course of one decade the share of our exports taken by the Commonwealth fell from 38 to 23 per cent. Another change which is ignored is the greatly enhanced advantages of scale which flow from the sophisticated methods of manufacture that have developed in the last few years.

Thirdly, there is some misunderstanding as to the duties and responsibilities of the Commission within the Community. In our debate yesterday my noble friend Lord Moyle objected that the Commission were responsible only to the Council of Ministers. Surely, in practice, in this country the civil servants are responsible to Ministers, and it is the Ministers who are in turn responsible to Parliament. In so far as the responsibilities and the duties of the Commission are different from those normally given to civil servants, it is because the Commission have some additional functions. The representatives of the several countries within the Community represent fluctuating interests, and it is one of the duties and responsibilities of the Commission to conciliate and to reconcile these interests so that there is eventually agreement.

The fourth category of reasons why there is a balance of opinion against our joining the Community is perhaps the most regrettable. There has developed in the last few years, perhaps as a reaction to de Gaullism, a feeling of nationalism, in that there is a lack of willingness to give and take with our neighbours if that would involve the sacrifice of any part of our security—whether or not that give-and-take would be for the common good, and particularly for the benefit of this country. That is most regrettable, and the time has come when all those who are willing to give and take, because they believe it is in the interests not only of the common good but of this country, should speak up loudly and clearly.

All my life I have believed, and still believe, that the greatest advantage which the United States has is that it has free movement of labour, of capital, of goods and services over a very wide area—an area in which there is a substantial population, a variety of climate and other natural resources. It follows that with that free movement there are inevitably specialisation and benefits from large-scale production—benefits from large-scale production without the disadvantages of monopoly. In recent years the benefits which flow from scale have increased enormously, and success breeds success. Only those who have the scale can afford the research that is necessary in order to get the next advance and development.

Europe has only commenced the reorganisation of its market; it is at the initial stages. But in spite of that, as has been pointed out in our debate, both yesterday and to-day, every one of the countries within the Community, except Italy, already has a higher standard of living than we have in this country. The difference will continue to increase unless we get inside. Eighty five per cent, of our exports consist of manufactured goods; one-third of those exports go to the Continent of Europe. In the course of one decade our exports of manufactured goods to the Community declined from 10.6 per cent, of their total imports of those manufactured goods to 7.1 per cent. That decline will continue so long as we have the tariff barrier. We shall find it increasingly difficult to compete with the Continent, either on the Continent or elsewhere, so long as they have the benefit of the greater market and the greater possibilities of specialisation and large-scale production.

The White Paper has been criticised because it does not give more accurate estimates of the short-term costs. My Lords, there are two kinds of short-term costs. The first is the cost of the Common Agricultural Policy. We shall not know that cost until the negotiations have been completed. The second cost is what is known as the cost of the impact effects; that is to say, the cost arising from the changes in our level of costs and the changes in tariffs. This will not be known even when the negotiations are finished: we shall ascertain it only by experience. This is a commercial adventure in which it is not possible to forecast beforehand what the cost will be. It is like most other commercial ventures: one has to be prepared to take some risks, and this is one of the risks that we have to take.

The best estimate that can be given of these costs put together is that given at page 44 of the White Paper, where it is stated that the total cost is likely to be considerably less than 1 per cent. of our gross national product. I think that is as near as it is possible to get. We can swallow that cost, provided that we are given time for the development of the dynamic effects. We need a transition period of at least five years. I believe that our experience, so far as the dynamic effects are concerned, is likely to be similar to that of Belgium, where the increase in the gross national product per annum was previously a steady 3 per cent., as ours has been, but in the last few years within the Common Market has increased to 4½ per cent, per annum. I believe that those are likely to be the dynamic effects so far as we are concerned, and that would give us ample opportunity to swallow the short-term costs.

In conclusion, I would say that if we enter the Market we shall need all our ingenuity to deal with two internal problems. The first is the question of the cost of living. We ought not to allow the increase in food prices to affect the cost of living by more than 1 per cent, per annum. No doubt the trade unions will take care of their members, but there are many people with small incomes who do not have that protection. It will be the bounden duty of the Government of the day to see that those people get the protection to which they have a right. The second kind of internal change that we shall have to face is change in industrial structure even greater than the changes we have faced in the post-war period. Those changes will have to be handled with a sense of urgency, in order that the operation shall be as painless as possible, and so that we can make the best use of the talents of our people and of our capital resources, both social and private.

Let us, then, enter these negotiations in good faith, with a real desire to get in. If we were to fail, then I think that, in the words of the White Paper: … the world would have lost a contribution to its peace and prosperity that neither Britain nor the countries of the European Communities can make separately.

5.56 p.m.

LORD BOOTHBY

My Lords, I must apologise to your Lordships for not having given notice that I wished to speak to-day, but I can assure you that I shall intervene for only a matter of three or four minutes. My excuse is that I arrived back from Africa only yesterday, so I had no time to put my name down. But having heard most of the speeches to-day, I feel impelled to make a few remarks before the final speeches.

My experience of the last few weeks has convinced me personally that, apart from the effective defence of our trade in the Indian Ocean, round the Cape and across the Atlantic, the conception of a viable multi-racial Commonwealth is really a myth, both from a political and from a commercial point of view. It does not exist any more, and it will never exist in the form or shape that it did in the past. That does not mean that our relations will not be very cordial, but our trade with the Commonwealth is going down and is likely to go down a little further. Anyway, the whole political conception does not add up to anything any more, either in Asia or in Africa. We still talk about the "Commonwealth" as if it were a viable proposition: I do not believe that to be the case.

Where, then, my Lords, lies our future? Surely, as leader of what Churchill once described as "some kind of a United States of Europe"; the alternative being an off-shore island of no great importance. This was the idea and the appeal of the 1950s, when we could have had the leadership of Europe on our own terms and deliberately rejected it. When I first went to Strasbourg—and I was a member of the first delegation there and attended regularly for seven years—we had all sorts of high ideas and ideals in common. They were shared by both political Parties—a common foreign policy, a common defence policy, a coordinated investment policy including investment in the impoverished and underdeveloped countries overseas, specialised international industrial production, a common monetary policy (in view of what happened later, perhaps the most important thing of all), culminating in a single currency for Europe.

My Lords, in fact we turned everything down. Both Parties were responsible— this is not a Party issue at all. We turned down the Coal and Steel Community; we turned down the European Defence Community—although Churchill had demanded in the Council of Europe the creation of a single European army under a unified command—and we turned down the Strasbourg Plan, which would have associated some of our associated States overseas with the emergent Europe, and was the most ambitious plan of all. The British Treasury, not uncharacteristically, pole-axed that over-night. Finally, we turned down the Common Market—we did not even go to their negotiations—and we drove the Europeans (and I was there at Strasbourg, and saw us doing it) to what amouted to desperate action in selfdefence; we drove them to the policy of the Six, to the Common Market, in sheer desperation against our policy.

It has become the fashion to say that M. Spaak did not mind. He minded tremendously; he resigned from the Presidency of the Consultative Assembly of the Council of Europe because he was so upset by our refusal to take part in the E.E.C. He and M. Monnet, and De Gaspari and others, set about the formation of the Six, and they still asked us to send a delegate to Messina and Brussels when they were negotiating the Treaty for the Common Market. We refused. We sent an observer, who was politely shown the door. After that we became the envious spectators of an almost unprecedented Continental economic upsurge which took place in the 1960s and in which we played little or no part.

It is really a tragic and sad story; and I think that it is sadder still now that the level of argument has been reduced from those days practically to the level of the price of butter. I am no great critic of the White Paper, but I think the whole tone and level of the argument has been brought down, to an unnecessary extent, to details, especially as the details can only be wildly inaccurate, ranging, as they do, from £100 million to £1,000 million; these statistics are all guess-work, and as the noble Lord, Lord Jacques, has said, we can prove the effects only by the experience once we have negotiated our way in, which I hope we shall do.

The main thing I wanted to say, and this is all I want to add, is that we should get back to the larger ideals of the Strasbourg of 1950. If we are going into a purely commercial Community, inward-looking, not looking out overseas, not with the idea of becoming a World Power, then I agree with those noble Lords who say that it would be better not to join at all. If it is going to be an inward-looking, purely commercial, hard-graft concern, dealing in terms of £.s.d. and nothing else, it is not worth joining. But in Strasbourg in 1949 we wanted a Council of Ministers with limited functions, but with real powers, under the ultimate control of a Consultative Assembly appointed by the Parliaments concerned, and we passed a resolution to this effect. This, I think, is what we should be aiming at now: in short, a confederation, which I can best define by calling it an association of sovereign States for the purpose of exercising certain functions in common. I believe that the answer to many political problems lies in confederation. I believe that monetary policy is tremendously important. I believe that investment policy and defence policy are tremendously important. I believe that, so far as we can manage it, a common foreign policy is tremendously important.

But, my Lords, it is the future that matters. And this is not an issue of bread and butter; it is not an issue simply of the cost of living. It is a great political issue, one of the greatest political issues that has ever confronted this country. It seems to me, and it has seemed to me for the last twenty years, that the issue is: are we going to be part of, and possibly leader of, the most formidable international confederation since Rome; or are we to be doomed to political isolation and absolute economic domination, which we have now, by the United States of America?

6.4 p.m.

LORD WINDLESHAM

My Lords, no debate on Europe would be complete without a contribution from the noble Lord, Lord Boothby, and we are pleased that he has returned from his travels in time to take part. His has been the most constant voice in national politics arguing that Britain's future lies in a united Europe. When the history of the last twenty years, to which he has referred, comes to be written I believe it will be shown that he was as right about events since the war as he was about the events that led up to it.

This has been a long debate over two days and based, as it has been, on a White Paper containing the results of an economic assessment, there is obviously a risk of becoming over-whelmed by statistics. Of course the fullest possible statistical evidence should be made available, and it would be foolish to ignore its value. We should also remember that whereas many people arrive at their political opinions by talking to their friends or from tradition or inference, others do so by a process of reasoning, and this process is sometimes based on a study of statistics. For that reason, among others, I welcome the publication of this White Paper.

It is nearly three years since the present application for entry into the E.E.C. was debated in the House of Commons and the House of Lords. Now that it is going forward it seems right that up-to-date figures should be published and that there should be a major debate in both Houses of Parliament. With such a wide range of statistics having been published, the next step is to determine how to use them. Both the noble Lord the Leader of the House and my noble friend Lord Jellicoe. when they opened the debate yesterday, interpreted the relevance of the main categories of information in some detail and with considerable clarity, and I do not want to go over the same ground again.

It seems to me that the most important figures in the White Paper are the indicative ones; that is, those that point to significant trends. So we can note that the economies of the Six member countries of the European Community are growing much faster now than the economy of the United Kingdom. Over a ten-year period, from 1958 to 1967, the increase in gross national product per head per annum in Europe was, on average, 4 per cent., as against 2½ per cent, in the United Kingdom. But the figures for G.N.P. overall in 1969, if we take one more statistic, was 7 per cent, on average in Europe, against just under 3 per cent, in the United Kingdom; so the gap is getting wider. It appears smaller than it is now by taking a ten-year period. We can also note that the external trade of the Community is growing substantially more rapidly than our own. This point was made in the debate by the noble Lord, Lord Brown, and others, and is shown in Tables 10 and 11 of the White Paper.

Again, industrial output in each of the categories listed in Table 15 has risen faster in the Community than in Britain.

It is impossible to explain these achievements without pointing to the benefits of larger markets, keener competition, greater specialisation and wider opportunities. And yet at the same time, as several noble Lords have pointed out (the noble Lord, Lord Roberthall, in his very authoritative speech last night, remarked on this), the standard of living has gone up steadily throughout Europe. It has gone up in the United Kingdom, too, but not so fast as in Europe. In the ten years since the E.E.C. was formed in 1958, real wages in Britain—that is to say, wages less the increase in the cost of living—increased by 34 per cent. But in France, the comparable figure is an increase of 43 per cent., in Italy 53 per cent., and in West Germany 69 per cent., all over the same ten-year period.

It is in this context, as so many noble Lords have argued in the course of the debate, that the higher level of food prices in Europe must be considered. I should like for a few minutes to re-interpret the White Paper statistics for the information of the noble Lord, Lord Blyton. Prices are artificial in a sense. What matters is what people need, what they can afford, what they buy—in short, what they consume. Here the statistics on food consumption in Europe, compared with the consumption of foodstuffs in Britain, make interesting reading. We have heard a great deal about the high price of meat in France. Does it surprise us to learn that the consumption of meat per head in France in the years 1965-66 was substantially higher than consumption of meat in the United Kingdom? The figures are 87 kilos per head in France, against 70 kilos per head in the United Kingdom.

The noble Lord, Lord Blyton, mentioned the consumption of horsemeat in Europe. I have checked up on this, in case the figures I have just quoted are distorted. The figure of consumption is very small. Horsemeat consumption in 1966–67 in France was only 2 kilogrammes per head per year. So, if you deduct that from the total of 87 kilos, we still have a net meat consumption per head in France of 85 kilos, as against 70 kilos in the United Kingdom. It could be said, though, that people prefer to spend more of their income on food in France, Germany and Belgium than we do here. The noble Lord, Lord Gladwyn, with all his experience of France, indicates this may be the case in France. But the published category, which includes drink and tobacco with foodstuffs (so it is these three taken together) shows that this is not so. In fact, 37 per cent, of total private expenditure in France goes on food, drink and tobacco, compared with 39 per cent, in the United Kingdom on the same category. If we include drink and tobacco with food, we find that the United Kingdom in 1966 spent 39 per cent., a rather higher proportion than the average figure for the Six, which is 37 per cent, for the same items over the same period. I do not want to give any more statistics, but I believe that the figures concerning the consumption of food are an important part of the public debate which has so far been mainly concerned with food prices.

In preparation for this debate, I made a short visit to Brussels at the beginning of this week, to visit the Commission and the United Kingdom Delegation to the European Communities. Anyone who has recently been in Brussels, or any other European capital, will probably agree that the progress made since the meeting of Heads of Government of the member States at The Hague, to which the noble Lord, Lord St. Oswald, referred in his speech, has been extremely rapid. The Community has now completed its first stage of development—the establishment of a Customs Union and a Common Agricultural Policy. These decisions need to be ratified by the Parliaments of the member States, and when this has been done, but not before, the Six will move on to decide the question of the enlargement of the Community.

To reach agreement on such far-reaching structural changes, even though few would deny that some of the policies are still a long way from being perfect, is an immense and historic achievement and one we should recognise as such. We cannot expect the Six to go back on what they have agreed over 12 years, and with much difficulty. To seek to do so would be unconstructive and incapable of being carried through. If we try to force a choice between the strengthening of the Community and its enlargement, there is no doubt the founder members will prefer to consolidate and deepen their own existing association, rather than risk its being Weakened by the accession of four new members. But there need be no conflict between the addition of new members and the rapid and determined pursuit of new objectives, particularly in the field of monetary policy and institutional developments. Both of these are now, rather suddenly, real and immediate possibilities. Indeed, the ideals and the opportunities facing an enlarged Community will be greater than if the Community remained limited to the present Six.

It is for reasons of this sort that, while taking proper note of the very real problems and difficulties contained in the White Paper and shown in public concern over this subject, we cannot afford to lose sight of where we are going in the future. If we are concerned with the standard of living, with industrial prosperity, with technological advance and with international security, we have an obligation to think out how these things can best be achieved. I am not going to embark on a discussion of any of them now, but I can say that, for the reasons which were so forcefully argued by the noble Lord, Lord Harlech, in his notable speech yesterday, I am convinced that Britain's future lies in Europe. A vision of the future and a desire to attain it in partnership with our European neighbours are pre-requisites for successful negotiations. Some of the enthusiasm and idealism which we have heard in this debate and in another place last month (particularly in the speeches of Mr. Heath and the Chancellor of the Exchequer), will I hope do something to offset the impact of opinion polls and newspaper stories which provoke doubt about our intentions in the minds of some of those in Europe who would most like to see the entry of Britain to an enlarged Community.

I was particularly struck by some remarks of the noble Lord, Lord Thorneycroft, in his excellent speech yesterday evening. He spoke about the tendency he has seen in business, in scientific and technical research, in banking and elsewhere for a coming together in Europe. Once events begin to run in a particular direction, as the noble Lord pointed out, they take on a power of their own, and politicians, if they are wise, do well to take them into account. The European tide of events is running strongly now. The noble Viscount, Lord Watkinson, when he resumed the debate to-day, and the noble Lord, Lord Nathan, last night, spoke about transnational links between like-minded companies. These are already making a reality of European integration, and it is no coincidence that some of the largest British companies are moving in this direction. They are doing so as equals, in the belief that agreement between technically competent and commercially strong organisations will lead to more effective competition on a world scale.

My Lords, the past is filled with examples of people who failed to detect the direction of events and to evolve policies to meet them. Like Lord Brown when he opened for the Government this afternoon, I should like to take the same perspective, to try to stand outside our current situation, with all its complexities and uncertainties, and ask: What will be the verdict of the next generation, 25 years from now, looking back on this period? By this standard I have no doubt: British policy should continue to move steadily closer to Europe. Not only should we join the Community, but we should set ourselves to work towards a more united Continent in which greater prosperity and security and contentment are the ends.

6.20 p.m.

LORD CHALFONT

My Lords, this has been a long debate. There have been a number of thoughtful speeches, and one or two speeches to which I would apply a less amiable adjective. But, generally speaking, I think we have covered most comprehensively the substance of the White Paper. I should like to mention the. speeches not only of what I might call the Front Bench speakers on both sides, but the notable contributions, on this side of the House, of Lord Silkin, and on the other side of Lord Harlech. and for me perhaps the most notable speech of the two days of this debate, the brief but unforgettable intervention of the noble Lord, Lord Boothby. I mention those not to create any distinctions but simply to make the point that those are the speeches that have, in my view, set the debate into its proper context.

I am not going to attempt in this winding-up speech to answer all the questions that have been put in the course of the last two days. Indeed, if I tried to do that, we should be here all night. In any case, it is perhaps unfortunate that many of the people who made the most rousing speeches are not here to have them replied to. Many have done me the courtesy of explaining why they are not here, and perhaps they will now accept my apologies if I do not answer their questions and take up the time of those who are here.

There are two speeches to which I should like to refer, however. The first is the speech of the noble Lord, Lord Gladwyn, because he specifically asked me to reply to two questions of his. Perhaps I may take up one of them now and come to the other at a later stage in my remarks. The noble Lord quoted the C.B.I, as saying that it was reasonably probable that the total cost of the common agricultural policy to the balance of payments might rise towards the end of this decade to about £400 million a year, and thereafter might decline to a level of £200 million to £300 million in the 1980s. The noble Lord asked whether the Government regarded this as a reasonable conjecture.

LORD GLADWYN

My Lords, I think I also quoted that the expected rise in the cost of living would range between 4½ per cent, and 2 per cent.

LORD CHALFONT

Yes, my Lords. I was not attempting to quote the noble Lord in extenso, but merely to refer to the question he asked. I would, in turn, draw his attention to the sentence immediately following the quotation, which says: It was recognised that these calculations are subject to a wide margin of possible error in either direction, and that there is no telling what might be the circumstances at the time of negotiation nor what terms the United Kingdom may be able to secure. If that qualification is taken in conjunction with the calculations of the C.B.I., then that is indeed the Government's position; namely, that all calculations of cost are inevitably subject to margins of error, and the actual cost can be determined only in the course of negotiations.

Perhaps I may turn now to another remarkable speech in the course of this debate—remarkable, to me, for an entirely different reason. I refer to the speech of my noble friend Lord Blyton. My noble friend's speech was a familiar rehearsal, albeit an extremely powerful one, of the anti-Common Market argument. It was indeed familiar, because the "Blyton Group" is a well known "pop" group, and its songs are familiar. Indeed, to me, they are in some cases rather like some well known pieces of popular music: they are familiar, exciting, and the sound is marvellous, but sometimes you do not get very much out of listening to the words. However, on this occasion I listened very carefully to the words of my noble friend. I am not going to rebut all his arguments in detail, for obvious reasons; they have been put, rebutted, and put again endless times in the last 10 or 15 years, not only in this debate in your Lordships' House.

I should like to say, however, that I found my noble friend's speech, like all similar statements of the anti-Common Market position—that is to say, the fundamentalist anti-Common Market position—based on at least three major fallacies, three false assumptions. The first is that the future world economic situation is a static one; that it will never move, and that it will never develop. The second is that if we stay out of the Community we shall continue to enjoy the rapid growth of exports that we have enjoyed over the last decade. The third —and I think this may be the most serious one—is that economic relations with the Commonwealth and with Efta will remain unchanged if we stay out-side the Common Market.

In the real world, as distinct from the rather unreal, static model constructed by my noble friend Lord Blyton, and those who think like he does, the Community, as we have heard over and over again in the course of the last two days, is steadily growing in economic power. One of the consequences of this, as anyone who studies these matters constantly will know, is that even the Commonwealth countries to which he and his friends are constantly making reference are now beginning to come to arrangements with the Common Market at our expense. In the real world, as opposed to this dream world, we have to make a choice between going into the Common Market or staying out indefinitely with all the risks, commercial, economic and political, which that entails.

There is one other point that emerges from what my noble friend Lord Blyton has said; that is, the constant emphasis nowadays by the people to whom I refer as "anti-Europeans" on the public opinion polls, and the state of opinion which they are supposed to show in this country. In fact, I should not be surprised at all if the people of this country, after two vetos and a long wait for the negotiations, were beginning to exhibit signs of frustration. But if in fact we look at some of these public opinion polls as closely as some of our critics have looked at our White Paper, we might find some doubtful propositions here, too. It is true that when the plain and simple question was asked: "Do you want to go into the Common Market or not?" a majority of people answered, "No". That is true, but of course a great deal depends upon exactly how the questions in these public opinion polls are framed.

It is perhaps interesting, and it ought to be pointed out, that although a large number of people said, "No", the largest group of people said that if we would be better off in the Common Market, then of course they would like to join. That is a very different matter altogether, and we shall only know whether or not we are going to be better off if we negotiate. What do people say when they are polled on the question of negotiations? A large majority are in favour of beginning negotiations. So if we look at these famous public opinion polls which are supposed to give such comfort to the anti-Common Marketeers, I think we shall find in them some very doubtful propositions indeed.

Perhaps before summing up in general, I could make one brief reference to the speech of the noble Lord, Lord St. Oswald. It is pleasant for me to congratulate him on an excellent speech, because this does not often happen in your Lordships' House. However, I am afraid that even so I have to put a little gall and wormwood into what I have to say because I really must, for the record, assure your Lordships' House that although the noble Lord's picture of how the negotiations might take place was an interesting one, in fact no procedure for negotiations has yet been fixed. The arrangement sketched rather authoritatively by the noble Lord is only one of many possible arrangements that could be used for negotiations, and I am afraid I have to say, from my experience, not even a very likely one. Having said that, may I nevertheless congratulate the noble Lord on an excellent and most helpful speech?

Perhaps we could now look at the arguments that have been adduced here, and try to put them into some kind of perspective. We have had the economic arguments at very great length, and I do not propose to develop them any further. I think they can best be summed up, as they have been summed up often before and at least twice in the course of this debate, by saying that in the short term the economic advantages are finely balanced; they can be argued either way, depending upon what set of statistics you use and from what point of departure you begin. The long term advantages are less easily quantifiable but, in my view, are comprehensively and persuasively arguable. I believe that in the long term there is great economic advantage to this country and Europe in the creation of an enlarged economic community.

But I should like to pass on from the economic argument to the political, because, after all, the only thing we are committed to at the moment is to negotiate. We are committed to no more than that. As has been said before— I am not now saying anything new—we shall not go into the Common Market unless the price is right; and we shall not know whether the price is right until we negotiate. So I think what we should be doing now is not to try to pre-judge, to pre-empt, these negotiations, but to look, as the noble Lord, Lord Boothby, suggested, at the whole of this subject in a slightly more imaginative and forward-looking way.

Let us try, as the noble Earl, Lord Jellicoe, put it at the beginning of this debate (and the noble Lord, Lord Harlech, followed him), to put the matter in its political context. Let us lift our eyes, if we can for a moment, from the dread spectacle conjured up by my noble friend Lord Blyton, of all these unfortunate European peasants eating horse-meat and margarine—not the Europe, I may say, that I know and love; but perhaps Lord Blyton knows them more recently than I do—and let us look, as the noble Earl, Lord Jellicoe, suggested, when he made his extremely interesting speech yesterday, at the kind of world into which we are all moving.

Let us look, first of all, at the great super-Powers, the United States and the Soviet Union, those vast agglomerations of industrial and military strength, with the power to destroy each other, and the rest of the world, if their strength should ever get out of hand, but, realising that, beginning to have an increasing dialogue with each other—a dialogue that may well be, unless we are careful, over the heads of the rest of us. They are beginning to realise their common interests in the world, and they are beginning to talk about those common interests. And one of the things that is going to be increasingly at stake in the kind of dialogue that these two giants are having, is the future of this Continent of ours. I think that we should bear in mind, first, that this is increasingly becoming a super-Power world, unless we are prepared to do something about that kind of eventuality.

Let us remember, too, the growth on the other side of the world of another super-Power, China—not all that far away. To-day, China has a population of 800 million; at the end of this century it will probably be between 1,200 million and 1,300 million, and by the middle of the next century—to continue the extra-polation—if the population curve continues as it is going now, one person in every three in the world will be Chinese. This is a power—you do not have to be a Marxist to correlate population and power—of immense potential.

It has already conducted, successfully, nine or ten nuclear tests. It will have within a very short time a nuclear capacity and a nuclear delivery system that will enable it to strike, if it wishes to, certainly at the Soviet Union and possibly at either of the two super-Powers. Its military strength is enormous. It has a standing army of 2,500,000, and an effective militia of 15 million; and on one authoritative calculation there are 250 million people in that country who have had some form of military training. Let us look at that Power growing up over the horizon, and remember that in a very short time it could change the whole strategic balance of the world.

Let us look at one or two other threads in this pattern. Let us look at the way in which it is possible that weapons of mass destruction may spread around the world. I am not talking now only of the spread of nuclear weapons. We have recently concluded a treaty to stop that: but unfortunately we have to admit that many of the significant countries in the nuclear equation have not yet signed the treaty. The danger of the spread of nuclear weapons, of chemical weapons and of biological weapons continues. The expenditure on arms continues to grow. In 1962 the total world expenditure on arms was something of the order of £50,000 million. In 1969, seven years later, it was £83,000 million, and the figure is going up monthly.

We have to combine with this the tremendous explosion in technology, particularly in the technology of communications. We have to remember the fact —and this is relevant to all that I am saying, and to all that I am going to say—that very soon we shall probably have a system of direct television broad-casting by satellite, which will bring pictures direct, in the measurable future, into the homes of people all over the world, or at least into the homes of anyone who can afford a simple domestic television set.

I say all this simply to point to what I think—and I know that many of your Lordships agree with me—is the real problem of the rest of this century and the beginning of the next. It is the familiar problem of the Third World: the fact that there is a growing gap between the rich and the poor. The rich are getting richer, while the poor look on and see the scientific, human and material resources of the world in the hands of a privileged few. And, as the noble Earl, Lord Jellicoe, pointed out, it is more than a coincidence that, by and large, the rich people of the world are white and the poor people of the world are coloured.

Your Lordships are probably already beginning to ask: what has all this to do with Europe? Well, my Lords, it has everything to do with Europe, if we know what we are talking about when we talk of the future of Europe. I am not talking now of Power politics. I am not talking of the politics of self-interest, the realpolitik of the 19th century: I am talking about what Europe is going to do in that kind of world. I do not see Europe—and here I agree fully with the noble Lord, Lord Boothby—or the Common Market as an inward-looking Community bent upon its own prosperity, concerned only with how many television sets it gets or how many pounds of steak it can eat in a day. If that were the kind of Europe that was growing up across the Channel, I should want no part of it at all. I believe that it is something greater than that, and I should like, for the last few minutes that I have, to tell your Lordships what I think this Europe can do in the kind of changing and hideously dangerous world that I have tried to describe.

There are possibilities—I think it is clear from what I have said, if my premises are acceptable—that we are on the fringe of a great confrontation, a great conflict of interests in the world: a conflict that may make the cold war of the last twenty-five years look like a very small and cosy affair indeed. It is the confrontation between the rich and the poor, and the racial confrontation that goes with it. It seems to me self-evident that the poor people of the world are not going to be prepared to stand by for ever and see the rich getting richer and the fat getting fatter, while they themselves die from starvation.

When they decide that they have had enough of this, let us remember the great super-Power growing up on the other side of the world that might provide the focus for this kind of revolution of rising expectations—or perhaps it is more accurate to call it a revolution of disappointed expectations. Let us remember, too, that in time some of those countries might have nuclear weapons, or even cheaper weapons of even greater destructive power. That is the kind of confrontation towards which I think we may move unless we are quick enough, wise enough, intelligent enough and imaginative enough to do something about it.

If we are going to guide the world in a different way, then there are many great decisions that will have to be taken in the course of the next 25 or 30 years. They are decisions about disarmament and arms control; decisions about aid to developing countries and how that can best be applied; decisions about solving the political problems of Europe which have remained obdurately insoluble since the end of the last war; problems of food and population; problems of disease and starvation; problems of how we preserve the environment and the quality of life— not only the quality of life in this country, upon which a good deal of this debate has seemed to me to concentrate, but the problems of life and the quality of life in Europe and in the developing world, where the quality of life is as yet something that is a matter not of debate but only of aspiration.

Again, perhaps your Lordships are saying, "Yes, very interesting. But what has it to do with Europe?" The question that I ask in answer to that is: "Where do we want all these great decisions to be taken? Do we want them all to be taken in Moscow and in Washington, or perhaps very soon in Peking?" For my part the answer is, "No: I should like many of those decisions to be taken here in Europe." What we must understand is that the voice of the small nation State is no longer heard in the councils of the world—I think perhaps rightly so.

Let us think now, for the last few minutes of what I have to say, of what our views are on all this. Most of us have had the greater part of our lives, and we see things perhaps in familiar, conventional ways. What about the young people, to whom we are going to hand all this over, whether it is a world fit to live in, or a mess? What do they think of it all? In my view, they are tired: tired of the world of super-Powers, tired of the realpolitik, tired of the Hobbesian concept of the sovereign nation State. I believe, and I know that many young people believe, that in as little as a hundred years' time people are going to look back on us and wonder whether we were not some kind of barbarians, who organised ourselves into nation States and, when we disagreed with each other's policies, went to war and killed each other with bigger and ever better weapons; and who spent nearly one-tenth of the world's resources on the means of destroying each other when two-thirds of the world's population had not enough to eat.

Young people simply do not understand this, my Lords, and they believe, as I do, that we shall be looked upon in the future as some kind of barbaric society. They will want us to move away from that. I believe that we can move from it; and this is what I believe is meant by the opportunity for Europe. I believe that, through a united and integrated Europe, we can move away from all the fissions and the frictions we have had in this great Continent in past years. We can apply our European values and our political traditions to establishing a really civilised world community, living in peace and devoting its resources to what my noble friend Lord Francis-Williams and others have called the quality of life. But let us, as I said before, not concern ourselves only with the quality of life of our people in this country, or even of our own people in Europe. We are members of a human and a global family, and we ought to be concerned about the quality of life of everyone.

Of course we have to come down to brass tacks. We have to get our feet on the ground. We have to take account of the economic factors which are contained in White Papers of this kind, and about which we have to negotiate when we go into the Common Market. To the people of this country the price of food is not a trivial matter. Indeed, to the poorer people of this country it is one of the most important matters in their lives, and I should be the last to diminish it. But it has been said before in this debate that it is not only the cost of living that counts; it is the standard of life and the quality of life—and I am convinced that even on the narrowest possible calculation this is bound to improve when we move into the Common Market and when we begin to help in transforming that Common Market into a united Europe. Indeed, if the negotiations show that this is not the case, if the terms turn out to be unacceptable even in this narrow context, then we shall have to think again. So it is of course in the interests of Europe as a whole that a fair and realistic agreement should be negotiated. Because if we fail to negotiate a fair and effective agreement on the basis of the kind of assessment that is made in this document, then a great opportunity will have been lost, not only to us but to the whole of Europe —and it is possibly, my Lords, an opportunity that may never come again.

This is, as I keep on saying, a matter for negotiations. Some of the speeches I have heard in the last two days and in the last two years seem to assume that there are not going to be any negotiations; that we are simply going to pay the price that is asked. This, of course, is not the case. We shall negotiate, and we shall negotiate hard. This is an economic problem, and we shall look at it as hard negotiators and hard bargainers. But the tragedy would be if in this country, or across on the mainland, insular nationalism or xenophobic prejudices of any kind, or tired politicians with outworn policies and outworn ideologies, were allowed once again to deprive us of one of the great political visions of the century.

On Question, Motion agreed to.