UNITED KINGDOM AND THE EUROPEAN COMMUNITIES

HL Deb 27 July 1971 vol 323 cc258-395

5.48 p.m.

Debate resumed.

THE LORD BISHOP OF SOUTHWARK

My Lords, as the first member of the Episcopal Bench who has spoken during this debate, it is my privilege to express congratulations, first, to the noble Lord, Lord Robens of Woldingham. I gladly do that, for two reasons: first, because Woldingham happens to be a village in my diocese, and, secondly, because I always think of Lord Robens whenever in the Psalter once a month I am called upon to say "Who shall deliver us from this wicked pit?" Secondly, I should like to extend congratulations to the noble Lord, Lord Blake. I was a humble student of history when I was at the other place, but I am a graduate of Christ's College, Cambridge, and I think perhaps it is fitting that I should be one of the first to extend congratulations to such a distinguished member of Christ Church, Oxford.

The White Paper deals mainly with the political and economic arguments involved. These are, of course, of very great importance, but I doubt whether a member of this Bench has much right to express his opinions upon them, or to claim any knowledge superior to that of anyone else in the country—perhaps that goes for a great many of us, too. So far as I see it, there are four points which those who have addressed this Chamber with specialised knowledge have put forward in advocating entry into the Common Market. They say, first, there is to be an enlarged free market for our goods; secondly, that there is to be an increase of our competitive ability vis-à-vis the United States, Japan and the U.S.S.R.; thirdly, that there is to be a rising standard of living for Britons with increased power in the money market and in international finance. Then, fourthly, they say that at a time when the Commonwealth countries are forming their own regional arrangements, independently of us, to their own advantage, and when we are now exporting to the Commonwealth 23 per cent., compared to 42 per cent. in 1960, we have an opportunity to continue to develop our economic relationships with the E.E.C. I find our exports to the E.E.C. an interesting figure, for they have jumped from 15 to 22 per cent. between 1960 and 1970. There has been a comparable decrease with the Commonwealth.

Those are four points that have been put to us both here and in another place. As a layman in these matters, I think they should be very seriously considered. While I thought the noble Lord, Lord Shinwell, made a most amusing, rumbustuous and pantomine speech, he did nothing whatever to bring me to think that I should attach less importance to those four matters which have been stressed so seriously by speakers from all parts of this House. If I had a vote, if I were not a Member of: this House, I should be inclined to vote in favour of joining the Common Market, and of supporting the present Government, and indeed the last Government when they were trying to take us into the Common Market some years ago.

But there are issues other than those four economic ones which ought to be considered. The British Council of Churches, which represents Christians of all points of view in this country, has put forward a document which I welcome and which deserves the most serious consideration. To summarise the reasons which the Council puts before its readers for joining the Common Market, they come under three headings. The first is the reconciliation of European enmities or, putting it another way, that we now have an opportunity of turning Europe into a family instead of a group of warring communities. The second is that here is an opportunity for Europe, as Europe, to consider responsibly the stewardship of its resources; and the third is that here is an opportunity for Europe to enrich the rest of mankind.

Let us look briefly at those three points. I do not mean to detain your Lordships long, as I know how many speakers there are to follow. I suppose there are few of us who have not suffered as a result of one or other of the two world wars. I lost my father in the First World War and other relatives both in that war and in the Second World War. In this I am no different from most of your Lordships. One of the things that most of us who have been through these experiences are determined about is that a situation in which many thousands of people were killed in what was almost a fraternal war shall not occur again. It is no good thinking that we in England are outside Europe. Those two wars have taught us that we are inseparably bound up with Europe, and it is necessary to recognise this fact and appreciate its implications. Whatever happens we must ask ourselves this question: will the opportunity given to us now help or hinder a situation in which a third world war between European States is made more difficult? I am sure that the noble Lord, Lord Blake, will know much more history than I do, yet I wonder whether he will agree with me when I say that, with France and Germany in the E.E.C., the chances of war between those two countries are infinitely less than they were before. And praise God for that!

Secondly, the old European disunity and insistence upon nationalism has shown itself to be disastrous, not merely politically and militarily, but also economically. Perhaps one who sits on these Benches may be permitted to say that, whatever may have been the immediate causes of the Reformation, and however justified we may or may not have been in taking the steps that we did in the Tudor period, there were certain losses; and one of the losses was that we broke away from European Christendom. That was a great disaster, because Christendom is much more than ecumenical relationships between Churches: it is a whole culture. I hope that, as a result of going into Europe, we may be able to share together our common European inheritance. We must think of ourselves first as Europeans and not as Frenchmen or Britishers.

Thirdly, entry into Europe should facilitate our sharing in the complete reorganisation of world trade. We simply cannot afford poverty in any part of the world, and to deal with this agreements are necessary with regard to sugar, oil, seeds, vegetable fats, and a great many other items, with the less favoured countries. We must come to an agreement with the underdeveloped areas, whether they are in South Europe, North Africa or elsewhere in the world. We can do this as a European unit better than we can do it on a national basis.

I know that there are doubts; there are doubts in my mind. As the White Paper says, this is an act of faith, and the future depends upon the people who are going to lead us. There could be disastrous mistakes. If this experiment were handled wrongly, Europe could become a large factory. There is one way of reading the White Paper which suggests that the European Community can become a rich man's club. We are not going into Europe as though we were entering the bargain basement of a supermarket dedicated to Green Shield stamps. Nor are we going into Europe in order that we may beat American competition by being better at the game than they are. As a country, when we go into Europe we must seize the opportunity to re-structure industry and commerce upon the basis of general wellbeing and to build up company law so that it reflects the contribution to production made by all the partners in it—workers, managers, providers of capital and con- sumers. If we do not do this, then the strains and stresses produced by this neglect may lead to bigger and more disastrous strikes and industrial unrest.

Those are some of my doubts—and by "doubts", I mean things which the Government must look at and on which they must reassure us. When we enter Europe it will demand that all countries give attention to those lesser and more local loyalties which are an integral part of rich personal and social life. This will require fresh thinking about the international system to enable it to enhance local grouping while fulfilling the needs for large-scale operation. Perhaps this needs building up from the smaller units to the centre, rather than concentrating power at the centre and making it the source of instructions to localities. Unless we do that, Europe can become just another power bloc and we may all find ourselves in the tentacles of myriad suffocating bureaucracies. Those are just some of the difficulties, but they should not in any way suggest that I am anything but enthusiastic about our entry into the Common Market.

My Lords, although I speak without any Whip on the Bishops' Bench, it is known to many of your Lordships that I have for thirty-five years or so been an ardent supporter of the Labour Party and have given a good deal of my life to fighting the battles which seem to me to be precious on behalf of the less privileged people and the working classes of this country. Therefore, perhaps speaking at rather a distance now and outside the turmoil, from these Benches, may I just say this before I sit down. It is a great sadness to me that this great Party to which I have the privilege to belong should be at sixes and sevens and failing to give the lead to this country, or to be associated with the lead, which is required at this moment.

As I understand it, there are four difficulties so far as the Labour Party is concerned. There are those who say: "Well, yes. We believe we should go into Europe, but not under this Government. We just can't trust the Tories." A Bishop is always sitting on the Government side, but I hope my good friends on the Government side will not misunderstand me when I say that I am not a supporter of the Government and there are many things in the policies of this present Government with which I profoundly disagree. But I am wholeheartedly in support of the Prime Minister in the splendid lead he has given us at this time, and I admire him so greatly for having stuck so resolutely to his guns and for never having wavered. To those who say, "We just cannot support this Government", I would say: "I remember that that was the argument which was advanced when I first became interested in politics thirty-five years ago when I was a student at Cambridge: ' We can't rearm because we don't trust the leaders of the Government'." That was the argument—and what a disastrous argument it was! If the Labour Party in the 1930s had managed to rise above Party and to think about the wellbeing of the nation as a whole, we might very well not have suffered the disasters vis-à-vis Hitler that we did. I hope we shall not be so idiotic as to make the same mistake to-day.

Then, the second argument which is put up is: "We must have a referendum". This suggestion was put forward by my good friend Mr. Anthony Wedgwood Benn, who was the Member for my constituency in Bristol where I was a priest, he having succeeded Sir Stafford Cripps. I very much wonder whether his predecessor would have said that. After all, if we always sought the advice of the people we should still have cockfighting and capital punishment. If I may say so to my good friends in the Labour Party, many of the causes which they and I have supported and which our predecessors have supported, and which were opposed by members of the Government, would never have gone through if the Labour leaders had not had the courage of their convictions and fought for the things they believed in, knowing that if the question had gone to a referendum they would have lost. Therefore, I would say to members of our Party: "Don't, don't be influenced by the Luddites and the Little Englanders". There are always those who will say we do not want any change. That will always be. When I am asked to preach at trade union meeting services there is always one thing in the service which rings a bell. That is at the end of the Gloria and the Canticles when it is said: As it was in the beginning, is now and ever shall be, world without end. Amen. As for the Little Englanders, they exist in both Parties. We know them all. There are those who cut their sandwiches in Dover and fill them with bullybeef because they are terrified about what will happen to their stomachs if they dared to eat the food provided for them in Calais.

Then there is a third argument: "No, we can't go into the Common Market because if we did wt should find ourselves in a capitalist community which would put an end to Socialism not merely in Europe but in Britain." Is this really true? It is a curious argument when one remembers the extent to which Socialists in Europe have expressed their wish for Britain to come in. Willy Brandt, himself a Socialist, has expressed this hope. In fact, it is no secret that when he came to London recently Willy Brandt felt troubled about the apparent weakening towards the European cause shown by the Labour Party. Doctor Mansholdt, a lifelong Socialist of the Netherlands, said this: Socialism cannot offer much if the Socialist Parties do not become European. His object in coming to Britain was to remind the Labour Party that Socialism is an international movement; to ask whether anyone thought that in present times it can be promoted through national action alone. We Socialists in Europe", he said, need the British Labour Party. President Saragat spoke out last week in favour of British entry. The President's intervention was followed by others.

The final point I would make is this. It is said that the Labour Party must be held together; that if any lead at all is given about Europe the Party will divide. This is the sort of argument the Church has very often put forward—we must always think about the Church and we must never do anything which might possibly cause disunity in the Church. My answer always to that is this: "The Church is an agency for the Kingdom of God and our job in the Church is to think about the Kingdom of God and not about the Church. The moment we take our eyes off the Kingdom of God and think about ourselves we end up in the ditch." That is true of a political Party. The Labour Party exists to further Socialism, the community and the brotherhood of man, and I believe that by going into Europe it will do that. The moment it takes its eyes off the goal and thinks about itself, then it will end up in the ditch. We must do what is right because it is right, irrespective of what may happen to us.

I believe that what Mr. Harold Wilson, when he was Prime Minister, said and wished about Europe was right. This was taken up by our present Prime Minister, Mr. Heath. I support them both, no matter what that may do to the Party to which I belong, because I believe it is right; and I believe that if I take my eye off that goal I shall end up in the ditch. Really, what worries me at the moment is that from the Labour Party there is not coming that leadership which Britain demands. What is the signature tune of the Labour Party today? I can only hope it is not the signature tune which too often has characterised the Bench from which I am speaking, of which you will remember the chorus: This is the law, I will maintain, Unto my dying day, Sir, That whatsoever King shall reign, I will be the Vicar of Bray, Sir. I am not interested in remaining the Vicar of Bray. I hope that the Labour Party is not interested in just remaining the Labour Party, or the Tory Party in remaining the Tory Party. What really matters is the goal. Just as the barriers between city States broke down some centuries ago, and the barrier between Scotland and England broke down later, so we now in our generation must break down the barrier which exists between us and Europe. I would say to my friends in the Labour Party, as indeed I would say to people in any Party—and it may be appropriate from these Benches—from the Epistle to the Corinthians, and I say this very seriously, For if the trumpet give an uncertain sound, who shall prepare himself to the battle?

6.10 p.m.

THE EARL OF LONGFORD

My Lords, I know we have all listened with great attention to the right reverend Prelate, and the remarks which he directed at my Party and his Party. I am sure they will be carefully noted; I only hope they will not imperil his position as a kind of unofficial chaplain, which he occupies in the hearts of many of us, along with the noble Lord, Lord Soper, and the noble Lord, Lord Sorensen. I hope that in his heart he will find it possible to sympathise a little with some of the difficulties of his Party colleagues. I am sure he will not mind if I commit the impertinence of offering him a little pseudo-moral advice.

I have never in my life made a speech at the end of which anybody said to me, "It's a pity you did not speak longer". I do not know whether any noble Lord has been more fortunate than I have been, but I hope to achieve this result to-day. Of course, I may be too sanguine in that hope. I expect to be shorter than anyone who has actually spoken—not, of course, that any noble Lord spoke for too long, but I hope to be shorter still. In these few remarks I should like to pay a sincere tribute to the two maiden speakers, the noble Lord, Lord Robens of Woldingham—and I shall come back to him before I finish—and my old friend and colleague, the noble Lord, Lord Blake, who succeeded me as politics tutor in a famous Oxford college. I know the noble Lord, Lord Conesford, will expect me to drop into Latin when referring to an ancient college, so I can only say De matres palchre filiae pulchria which of course all Members of the House will pick up very rapidly, even in an imperfect accent.

LORD SHACKLETON

My Lords, may I interrupt the noble Earl just to say that he once used that remark about me.

THE EARL OF LONGFORD

My Lords, that bears out the implication of the noble Lord that I know only one Latin quotation. I have to drop into this particular phraseology—

LORD ARCHIBALD

My Lords, may I interrupt the noble Earl and ask him whether he will translate the quotation for the benefit of those of us who have not had his good fortune in education?

THE EARL OF LONGFORD

My Lords, it means that I was followed at Oxford years ago by the noble Lord, Lord Blake, and as Leader of this House by the noble Lord, Lord Shackleton, and, roughly speaking, they are now to be looked upon as, spiritually speaking, twins. Does that explain what I was trying to convey?

We are extremely grateful for the arrangements that have brought the noble Lord, Lord Blake, here. I think we have not got an official historian among all these rival experts in the House, except the noble Lord, Lord Blake. He gave us some impression of what Sir Robert Peel would have done about the Common Market. He did not mention the fact that he has written two of the greatest political biographies of the time—the life of Mr. Bonar Law and the life of Mr. Disraeli, later Lord Beaconsfield, and he did not tell us what either of those would have said. At any rate the noble Lord, Lord Blake, expressed the spirit of Mr. Bonar Law, who once said: This is, after all, a great country and of Disraeli, who said: Man is a being born to believe". In other words, the noble Lord breathed a spirit of optimism and good cheer along with other more intellectual values, and I know we shall all look forward to his contributions with exceptional interest in the future.

People come up to me in these latter days and say to me, as to someone dredged out of the Ark, "I cannot remember whether you ever said anything about the Common Market". Indeed, people may be forgiven for not remembering anything I have said about the Common Market, but I once said something vehement about it in 1962, when in fact I supported it strongly. One noble Lord came up to me about half an hour ago and said that he remembered my being against it last year. I think he must have misunderstood me. In my own eyes I have never weakened on this issue, and certainly when I was in the Government I supported it to the best of my humble power on that point of the attitude of Mr. Wilson's Cabinet. I am talking of the earlier proceedings, before I disappeared from the scene. But in talking of 1967 I have absolutely no doubt in my mind (although nothing can be proved about something that did not come to pass) that in fact the terms now available would have been accepted by the Labour Government in 1967. I can- not prove it; there is not a document that I can quote, but I am just quite sure that that would have been so. The noble Lord, Lord George-Brown, knew much more about it than I did, because he was much more closely associated with Mr. Wilson, and I am quite sure that when he said the terms would have been acceptable to the Labour Government he was absolutely correct.

However, I did not rise to say that. I rose for a slightly different purpose and I am afraid I may now break an axiom—one of the few axioms in Parliamentary speaking—which is that one should address one's remarks to the whole assembly. I am going to address mine to some of my more anxious colleagues, while of course I have no means of stopping others from listening in. I ask my colleagues, particularly the more idealistic section of my colleagues—I can see from their blushes which ones recognise this account of themselves—the ones who pride themselves, as I have in my time prided myself, on standing for some vision higher than that of the ordinary citizens, what at bottom has been the international idea for which the Labour Party has stood, at any rate since the end of the First World War? It has passed under different names: the League of Nations, the United Nations, and in recent times the idea of World Government.

Let us just stick to that phrase for a moment, which in fact was employed in that fine speech made by the noble Lord, Lord Walston. I am not saying that this is a monopoly of ours, hut, surely, if we in the Labour Party have prided ourselves on anything in international affairs it is that we have stood for the vision of an international society which was quite different from the present one—not just an improvement and not just a more cunning arrangement of our diplomatic effects, but a new kind of society altogether, a society which would be based on the idea of the limitation of national sovereignty, the end of international anarchy and the establishment of world institutions, including a world police force. In that way, and in that way only, we believed that permanent peace could be established. That surely has been something which has united all members of the Labour Party, whether they were pacifists or non-pacifists, in whatever controversies, edifying or less edifying, we have found ourselves involved in at different times. Are we, as a Party, still pursuing that ideal or have we just scrapped it? I have not heard much about it. The noble Lord, Lord Walston, made a reference to it and the noble Lord, Lord Soper, dealt with it. Unfortunately I did not hear his speech but I have read it. I would regard it as horrifying if, at this time, we had three days of debate and World Government or some new world order seemed to have disappeared from the Labour philosophy.

I would say that the greatest disappointment—and this was not something for which we were in any way to blame—of the six years of Mr. Wilson's Government was the failure to make any progress at all towards World Government. That was through no conceivable fault of ours. We were represented as well as any country could be represented abroad by the noble Lord, Lord Caradon, for example, and there was never any moment when we should not have been ready for progress on this front if it had been at all possible. But for reasons we are all aware of—the attitude of the Soviet Union, but not only of the Soviet Union—no progress was made, and I think it is only right to submit that it is not in the least likely that any progress in a direct universal sense through the United Nations is likely to be made in the next few years towards this vision of a higher world society with institutions of world government.

Is there any alternative method of procedure? Noble Lords may have their own suggestions, but I see one and one only of any importance at the present time. I would submit that it is only through regional arrangements, of which the European opportunity before us is much the most outstanding, that one can begin to move away from the world of national sovereignty and move towards a system which makes possible the hope of lasting peace.

I am not going to get involved in the constitutional questions, which were dealt with so thoroughly earlier by the noble and learned Lord the Lord Chancellor. Some people are trying to prove, I suppose, that we retain our sovereignty under these arrangements, which I myself entirely favour. I will leave that to the constitutional lawyers and to semantic settlement. But in fact, as we all know, if we move towards world government we do not lose our freedom but we pool our freedom and sovereignty in a higher possibility of freedom, and in the hope of peace and prosperity for the whole world.

So that is simply what I want to put before the House, and particularly my noble friends: if the Labour Party still stands for anything at all distinctive in international affairs, if it has not just chucked its hand in when it comes to international idealism, it is for this aim of world government, and I submit respectfully but firmly that progress along that line is only possible if we take the opportunity before us now.

Before I close may I come back to something that was said by the noble and learned Viscount the Lord Chancellor and referred to also by the noble Lord, Lord Robens, in his powerful speech. They both dealt with the Schumann Plan at its inception and the attitude of our Government at the time. May I say in a friendly and respectful spirit to the noble and learned Viscount the Lord Chancellor, that I do not think any Party can obtain any advantage from arguing that they have been more wise in their attitude towards Europe over the whole 25 years than others. Both Parties made mistakes. The noble and learned Viscount made references to his previous speeches. Perhaps I might suggest that if any noble Lord quotes at length from his former speeches then his opponents should be allowed to quote some passages from his less prudent remarks. That would be a salutary experience. I am sure what the noble and learned Viscount said was extraordinarily good, but it is just possible at the same time that other remarks were less convincing. I submit that as a possible rule as we pass along.

THE LORD CHANCELLOR

My Lords, I would say two things to the noble Earl. I am not a Viscount, first of all. Let that be clearly understood; I am a Life Baron. Secondly, the noble Earl can choose any passages from any of my speeches he likes and quote them at length so far as I am concerned, but I suspect he would be howled down.

THE EARL OF LONGFORD

My Lords, I am very sorry about the Viscountcy. I am not exactly one to talk, but the noble Lord has changed his style and title so often that I hope we understand them before we are very much older. However, he found some wise words of his own which he delivered about 20 years ago, and the noble Lord, Lord Robens, also dealt with the same period. I will end with one recollection of mine from that time or thereabouts. Just after the publication of the Schumann Plan I happened to visit Dr. Adenauer, the German Chancellor. I had been Minister for the British Zone of Germany, but at the time I was Minister of Civil Aviation. He treated me as a good deal more important than the facts required, and urged me when I returned to England to beg the Government of the day—Mr. Atlee, as he was, Mr. Bevin and others—to seize this opportunity, showing a fervour and an emotion which I never saw him reveal on other occasions. He begged me urgently to see if I could bring this about. You can imagine what happens when a Minister of Civil Aviation returns with this kind of message. He eventually obtains an audience of someone, a Private Secretary probably; but at any rate this particular approach led precisely nowhere. We must take it that at that time the Government were not ready to seize the opportunity at all.

It was not, I think, a Minister, but an official—I will not name him; he may be a Member of this House by this time; although I cannot see him, looking round—who coined the phrase. "We must not tie ourselves to a corpse"; that referred to the Europe of the 1950s. I do not know whether that is going to go into his autobiography; people are sometimes quite selective when it comes to autobiography. At any rate, that expressed the ministerial spirit at the time. How wrong can you be! As Lord Robens said, everybody makes mistakes; at least, I think that is what he was seeking to say. The noble Lord's Party made mistakes as soon as they got the chance. As soon as they got in power they went back on a great deal of what they had said on Europe. This is common knowledge. Do not let us suppose that one Party has been right and one wrong.

Now at least in this House, and I would think in both Houses, we can con clued that there will be an overwhelming opinion in favour of entering Europe. But I just implore my own Party colleagues in particular not to sink any opinion that they may have—they are certainly not likely to do it at my request—but to ponder whether there is not perhaps some force in what I have tried to place before them: the thought that if a Labour Government is going to mean anything constructive or visionary in the future then world government must remain our objective, and the progress to world government must come through entry into Europe.

6.28 p.m.

LORD CROWTHER

My Lords, it is a pleasant, but not an easy, task to follow the noble Earl who has just resumed his seat, who under whatever style or title he may address the House—and he himself has changed quite a bit—will always be listened to with respect and affection, and who himself has played a leading role in your Lordships' House for so long that some of his quotations are coming round for the second time.

It is impossible in a debate of this sort to avoid repetition, and I do not know that one should try too much to do so. The purpose of this debate is not to pile up votes in favour; piling up votes in your Lordships' House on this issue would perhaps not matter very much. The purpose of this debate is to express the weight of opinion, and that cannot be done without a fair amount of repetition. But what we can do is try to be selective in our arguments, and that I propose to do. I intend to concentrate only on that small segment of the general argument which seems to me to be more likely than others to have some impact upon the waverers in public opinion.

I feel that I ought to apologise to your Lordships for not breaking the monotony of this long string of speeches in favour of our joining the Common Market, but I have been a believer in the closest possible association of Europe ever since the idea first came to life at the end of the war. Unlike some people who now claim that status—not in your Lordships' House—I am on record week by week in that sense in the early years of this great argument. It has always seemed to me that the really compelling arguments for our joining with Europe are the long term, positive ones—the great issues to which the noble Lord, Lord Blake, referred. May I say, in passing, what satisfaction it gave to me, who am a passionate amateur of history, to know that in future I shall be able to hear him as well as to read him. I have always thought that those long-term issues are the compelling ones.

They are, broadly speaking, the arguments for England as against the Anglo-Saxon heptarchy. None of the swelling chronicle of our national history would have been written if the arguments for the heptarchial separatists—which no doubt sounded very respectable in their day—had been listened to 1200 years ago. I am not putting those arguments aside; They have been expressed very eloquently by quite a number of noble Lords. I intend to concentrate on a narrower issue which has formed part of many speeches made by noble Lords, but has not yet been the main thread of any, unless it was one of those few speeches that I have neither been able to hear nor to read in Hansard. That is, what would happen if we do not join in the European Economic Community.

One has not heard very much in public in the last few years of these arguments. I do not think that they are being given in the country nearly the weight that they should have. The reasons why they have not been heard are fairly obvious. No one with any responsibility for the negotiations in Brussels, be it in the last Government or in this Government, would wish to say anything that could he taken as spoiling his case by dwelling on the compelling necessities of our accepting an agreement if he was trying to get, as was his duty, the best bargain that he could. Moreover, there has been a strong tendency, and a natural tendency in this country, not to underline what I believe is the very weak economic posture in which we find ourselves. I am not speaking just of this month of July, 1971 when, for the moment, our economy, in some respects though not in others, seems to be stronger than it has been at other junctures in recent years. I am speaking of the whole period since the War, in which we are still living, and in which we have been wrestling with our economic problems with so little success, and in which it can be said that the only way in which we have discovered it possible to balance our books—and then temporarily—is by devaluing our currency.

Nobody likes to say how weak the economy is. No Government would ever say so, because they would be simply giving a handle to their opponents. If the Opposition say so, then the public shrugs its shoulders and says "It is pretty Fanny's way. That is what they are paid to say, that everything is going to the dogs". But the fact is that, by every economic index you can apply, this country is weak, and getting weaker; be it the growth rate; be it the development of productivity; be it our share in world exports; be it, to take an example of a particular industry, shipping and shipbuilding. At the time of Queen Victoria's Diamond Jubilee, which is only one long life ago, over half the shipping in the world flew the Red Ensign, and a thousand ships a year were launched from the shipyards of this country; and to what a sad state have those two industries been reduced.

Moreover, it is not only these quantifiable measures, there is something in the air that has gone wrong. I move about the world a fair amount, and I find now wherever I go a growing conviction that this is the country where things go wrong. If it is not strikes it is taxes; if it is not taxes it is management blunders; and if it is not any of those, it is devaluation. "The English disease" is a phrase that you hear more and more; and more and more people, including our friends, are shaking their heads over our inability to get rid of it.

In my opinion it is no good looking for quantifiable mechanistic explanations of this state of affairs. There is no switch in the Treasury, no thermostat that can be turned up to a 4 per cent. growth rate, that produces the result that we want. These weaknesses have persisted under all Governments, and with all policies that have been tried for a generation past. I believe that the explanation is to be found in the collective psychology of the British community; in the spirit of the times within this country. There are, after all, no economic problems that are not political, and there are no political problems that are not psychological. It is in psychology, collective psychology, that I believe we have to find the explanation. As a nation we have lost interest, lost sufficient interest in the wealth creating process. We are suffering from a bad state, a low state of economic morale. Lest I suffer the awful fate of being put on Lord Shinwell's list of denigrators, let me say that I recognise that sweeping generalisations of this sort always have their objection. We have some of the finest scientists in the world; we have great inventors, great developers. I have no doubt that we have many superlative business managers; and our trade unions are inspired, so we are repeatedly assured—and I accept it—by a sense of responsibility. All these things are right. Many of the components are excellent, but still there is something badly wrong with the running of the machine.

No country in the world puts higher demands upon its economy than we do to sustain, and constantly to increase, the welfare of our people. Few of the great nations pay so little attention to the process of creating the wealth which alone can discharge those expectations. In the United States, whenever I go there—and that is the only country other than this I can claim to know at all well—I always have the feeling that the ordinary man on the shop floor, or behind the counter, however awkward he may be from time to time, knows in the marrow of his bones that his income, his standard of living, depends upon the economic efficiency of the enterprise with which he is concerned. That is not so in this country. The connection between output and effort and the individual reward has been broken. One sometimes feels that, in many chaps', minds, work—and I am thinking not only of manual work but work of all kinds, the production of wealth—has come to be regarded almost as a conventional necessity, as an old-fashioned routine that an unreformed establishment requires a man to perform before he can draw his rightful share of the national dividend. It is not a bit of good telling the average Englishman that it is simply impossible to work less and eat better, because, for a variety of accidental reasons, that is exactly what he has been doing for a generation past.

If I were to attempt to sketch to your Lordships what I believe to be the reasons for this state of affairs, I should detain you for a very long time, so I will not do so. Undoubtedly it has something to do with the wars we have fought. This is the only country, the only large country in the world, which fought hard from the first day to the last of both the world wars without being defeated or occupied; the only one that had all the exhaustion, without the therapeutic effect of having the plough through our institutions and the old sod turned and fresh soil brought up. That undoubtedly has something to do with it. It is partly due to historical accidents, fortunate historical accidents. We have been fortunate in having capital to live on, and having the terms of trade swing in our favour; so that we have been encouraged to believe that the economic process is too easy.

LORD BESWICK

My Lords, since so much has been said to denigrate Australia, may I just ask: am I wrong in thinking that they too came in at the beginning of both world wars?

LORD CROWTHER

My Lords, I would not for a moment wish to deny that, and it was precisely for that reason that I qualified my original phrase and said the "only large country". Australia, which I greatly admire and hope will become a large country, was hardly in that classification in either of the wars.

I think that this phenomenon of the state of mind that we have got into is just as difficult for us to explain as historians have found it difficult to explain the opposite phenomenon, of the sudden burst into a golden age by different communities at times. But I have no doubt that we are at the opposite, or nearly towards the opposite, of a golden age. I am not, of course, taken in by the fact that just at the moment, for what I fear will be a brief period, our balance of payments—that great measure of success or failure—is showing some strength.

How does all this connect with the Common Market? It connects in two ways. First of all, I confess to being really apprehensive about what will happen in this country if we do not choose to enter the Common Market. The whole world is gradually forming into these areas that have free trade internally and are surrounded by high protective barriers. As an old free trader I abominate this, but one has to recognise that it is so. Have we any similarly large alternative markets to which we have access? I remember that at the time of the first application, and more faintly at the time of the second application, one heard a great deal about the Commonwealth as an alternative possibility. I notice that this is hardly mentioned at all to-day, because it must be clear that, however highly one may think of the political virtues of the Commonwealth, it simply does not provide a possibility of giving us a stable and assured market for sufficient quantities of our goods. Or at one time it became quite fashionable to advocate the North Atlantic free trade area, but that again, I think, is now quite clearly a non-starter. There is not the slightest chance of its happening, and I suspect that we should find it pretty disastrous if it did.

Is there any other alternative? Are ther any other of these large areas? I do not believe there are. I think the only alternative to joining the Common Market is to be left by ourselves, and in such a world only those nations which have supremely high economic morale will be able to stand by themselves; the Japanese, who are clearly on the crest of the wave, or the Swiss, who have always paid a 19th century respect to the economic virtues.

The dangers that we are running have not been very apparent in recent years, because we have been living in an uninterrupted sellers' market, where the demand for goods and services of all kinds has been tending to outrun supply, which is the same thing as a condition of inflation. But, sooner or later, and I sometimes think that it will be sooner rather than later, we shall revert to a world-wide buyers' market, and unless we have managed to secure membership in one of these areas we shall find that we are squeezed out everywhere.

What are those commodities that nowadays, in the 1970s, we in this country can produce and sell that are either so good or so cheap that they can sell in these great areas where our competitors are admitted freely, and where we shall have to climb over high tariff walls? In the 19th century, there was cotton and coal and endless varieties of machinery, but what is there to-day that we could hope to sell in the required quantities if we were shut out from all those associations that are joining together? Certainly, the prospect of my having any responsibility for the Government of this country at any time is very remote, but I should be horrified at the prospect of bearing even the outside share of responsibility for this country if, outside the Common Market, we landed in another world-wide trade slump.

I observe that in the process of attempting to reconcile intellectual honesty with political expediency, which is now exercising so many Members of another place, the argument has arisen that we are at the moment too weak to enter the Common Market; that we must wait until we are strong and then, if they will have us, go in. Good gracious, my Lords! If they think we are too weak to enter the Common Market, how on earth do they think we are going to survive outside it? That is why it seems to me that the arguments over the terms, whether the price of sugar is going to be high enough for the West Indies, and all the rest of the minutiæ, are really quite beside the point. It has always been clear, ever since we committed our biggest political mistake for 200 years by refusing to be one of the founder members of the Common Market, that we should have to pay a price to get in, and the price is very much lower than I expected it to be. But, in any case, you do not haggle over the subscription when you are invited to climb into a lifeboat. You scramble aboard while there is still a seat for you.

But there is a positive side, even to what I frankly confess is the negative argument that I am putting before your Lordships, because I sincerely believe that the Common Market may prove to be just what is needed to bring us to our economic senses. Your Lordships will remember Professor Toynbee's intriguing theory of challenge and response in seeking to explain the rise and fall of civilisations. He said that a civilisation rose when the challenge that had to be met was big enough to be stimulating and to require effort, but not so big as to be crushing and impossible. That, I believe, is exactly what Europe will be for us. We shall indeed have to change many of our habits if we are to keep up, but, if we do respond to that competition and change our bad habits of the past generation, then I believe there is absolutely no reason why we should not within fifteen or twenty years be leading the band.

If on the other hand, we are left in isolation, then we shall get more and more inbred, and I have no doubt that we shall go on telling ourselves every day how British is best, how good we are, and how the world looks to our leadership, as we wait in the queue for our daily bread ration. I believe that the Common Market will have very great and positive and long-lasting benefits for this country and for the world. Those I have not developed and have left aside, but I believe they are as nothing to the perils that we face if we stay out.

6.47 p.m.

LORD ALPORT

My Lords, during this debate we have listened to a series of most interesting, eloquent and striking speeches. I know there are many occasions when we in this House congratulate ourselves on the high standard of the contribution which we make to the controversies of the day; sometimes those congratulations are deserved and, perhaps, on other occasions are less deserved. But I am quite certain that your Lordships who have listened to this debate this afternoon will agree that the high standard which has been attained is very remarkable indeed. I therefore feel a very great sense of diffidence in addressing your Lordships on this occasion, because this is not a subject on which I normally trespass, or about which I am well informed, or on which I have any original comments or arguments to put forward to you. I am reassured in some degree by what the noble Lord, Lord Crowther, has said, that at this stage in any debate of this length repetition is inevitable. I am also reassured by what the noble Lord, Lord Robens of Woldingham, and the noble Lord, Lord George-Brown, said about it being our duty to stand up and be counted, to give our opinion rather than to argue, to say what we feel at this present time, speaking for ourselves individually, to be right for our country. I think we should be clear that this is not a Party matter. Views on this subject cut across Party and there is, and should be, no Party advantage to be gained from the way in which this great matter is handled here in Parliament. I am sure that the country at large will judge our handling on that sort of basis.

I do not believe for one moment, although I was greatly impressed and slightly frightened by what the noble Lord, Lord Crowther, said about our economic future if we do not get in, that the pros and cons of the economic consequences, at any rate in the short run, are directly relevant to the decision we should make. I do not believe that any White Paper, however able in its drafting and however detailed in its treatment, can assess the consequences of Britain's decision to join, for I believe that the Europe of the Six without Britain, cannot be, and will not be, anything like the same as the Europe of the Ten with Britain. We know, and I am sure that the French know, that the inclusion of this country in the E.E.C. will have unforeseeable consequences, not only for the Six but Europe in general, and the nature of them we can hardly at this time properly guess. All I know—and here I agree entirely with the noble Lord, Lord Crowther—is that I can see no acceptable alternative to joining the E.E.C. I know also that I would be a very anxious man—anxious for the future of myself and of my children—if we, in this year of 1971, failed to make the decision to join Europe on the terms which have been negotiated. Furthermore, I say quite frankly that, even though those terms had not been as good as they are, I would still have supported a decision to join; and, had the decision to join been made by the Government of another Party, by the Labour Government, I would have supported that Government in their decision.

My Lords, I cannot add to the wealth of information which your Lordships have had during the course of this debate. I can only bear witness as to things which have influenced me to change my mind from being someone who was opposed to, or at any rate uninterested to a large extent in, the project of joining the Common Market to someone who is a firm supporter of the proposition now. The first of these is, as the right reverend Prelate the Bishop of Southwark said, two world wars. We know that those wars originated in the historic antagonisms of European countries. Those wars would not have occurred had there been, and I hope will not occur in the event of there being, a European system established in which we as well as France and Germany and the other countries formed part. Politically, therefore, from that point of view, that is the most powerful argument. Secondly, the decline of the Commonwealth as a political force has made me realise that the hopes I once had, and which enabled me to see in the Commonwealth an alternative to Europe, no longer make sense in the present situation in which we find ourselves. The noble Lord, Lord Crowther, said, and quite rightly, that many of us had hoped that there would be an alternative through a Commonwealth system which had sufficient political and economic power. That is no longer the case, and we must not fool ourselves into believing that that alternative exists. As there is no longer that alternative, I am forced back on the prospect of joining Europe.

Thirdly, there are the great historic and cultural traditions of Europe of which we are, perhaps, more to-day than ever before, consciously part: not "ever before", but certainly over the last 200 years. Because we should not forget, and do not forget, that in the mediaeval period and the beginning of the formative period of our history we were essentially, and felt ourselves essentially to be, a part of Europe, and we are merely returning to the themes and traditions of the past which, when revived, will give us, I believe, a sense of satisfaction, a sense of fulfilment, which even to-day we do not fully realise. I must say, my Lords, that the thing that perhaps struck my imagination most during the whole of my adult life was the decision of Mr. Winston Churchill, as he then was, to offer common citizenship to the French at the time of the fall of France. It has seemed to me when one has thought about it that if that sense of unity between these two great peoples in the face of a common enemy could have been so significant in time of war, how much more significant is this sense of unity that we can create, not only with two great peoples, but also in partnership with the enemy of that time.

My Lords, the fourth reason for my change of mind is the deterioration, as I see it, in the capacity of the American people to exercise world leadership. It has become, to me at any rate, increasingly clear that for the time being—I hope not for long, but for the time being—it is not possible for us to rely, as we have for the last 20 years and more, upon the ability of the United States to maintain itself as a major influence (not as a super Power, for it will continue to be that, no doubt, but a major influence) in the preservation of the security of the Western world. We must therefore look to ourselves, and we should be foolish not to do so. Next, there is the need for size in relation to the resources which are necessary in a technological age. The noble Lord, Lord Crowther, has put that so much better than I could. But it is quite clear, and is becoming clearer, that small units, even a unit of the size of a national unit such as the United Kingdom, cannot take advantage of the development of technological skills and inventions unless the resources that are available are pooled and shared with other countries to give us the scope which is necessary to bring them to fulfilment.

Lastly, my Lords, the fact is that Britain's changed status as a world Power, and the fact that it has ceased to be a metropolitan country of a great political system, have left this country without a field of constructive political act ion which we require, and has deprived our younger people of that essential fulfilment of idealism which in the past the Commonwealth as an ideal has provided for them. I believe they will find that in Europe; I believe that they want to find it in Europe; and I believe that by joining Europe they will get the sort of satisfaction which, as an earlier generation, we got from our close association with and our feeling of achievement as represented by, the Empire in the first place and the Commonwealth in the second.

I have no fear about our ability to hold our own industrially in Europe. I have no fear about the ability of our farmers to hold their own agriculturally, for we have perhaps the most developed and efficient farming industry in the world. I have no doubt of our ability to hold our own politically in the realms of politics and statesmanship with the countries with whom we shall be associated, regardless of what their political complexion will be. I look forward to the day when this country can be one part of this great international experiment, and as such will provide for our people an increased measure of security in an uncertain world, an increasing standard of living and a spiritual fulfilment which we could never have if we remain on our own.

6.58 p.m.

LORD CHALFONT

My Lords, it seems to me that one of the disadvantages of intervening late in the day in a long debate of this kind is not so much that there are few arguments left to put but that there are so few people left to whom to put them. But let me, before I begin to speak to the Motion, say something, if I may with your Lordships' permission, for the Record. From something that was said in the debate yesterday by my noble friend Lord George-Brown I think noble Lords may possibly have gained a mistaken impression, and it might be worthwhile making it clear that the expression "soft shoe shuffle" which he used in his speech was in fact introduced into the television discussion to which he referred by a television interviewer and not by my right honourable friend the Leader of the Opposition.

My Lords, it has been made clear, I think, that those of us who speak from the Front Bench on this side of the House speak entirely for themselves: not for the Front Bench, not for our colleagues on this side of the House, and certainly not for the Labour Party. The fact is—and this has now become obvious beyond doubt—that on this question of British entry into the European Economic Communities it is possible to hold, with complete conviction and sincerity, views which cover the entire spectrum of attitudes towards the problem.

Here perhaps I may be permitted to make the only personal comment that I shall make in the course of my remarks. I am sorry that the noble and learned Lord is not sitting on the Woolsack at the moment, but perhaps he will have the opportunity to read these few brief comments of mine in the OFFICIAL REPORT. So far as I could discern it at all, it seemed to me that the purpose of the sometimes rather bizarre intervention of the noble and learned Lord was a double one; first to declare his support for British entry into the Common Market and, second, to score some debating points at the expense of the Labour Party. As a convinced European I regret to say that I do not think that his speech did very much to advance the Common Market cause. It is strange to find such an experienced Parliamentarian so completely misjudging the mood of your Lordships' House. I beg him, too, not to concern himself too deeply with the health of the Labour Party. Even if there were the, I think he called them internecine conflicts and bitternesses of the kind he conjured up with such vivid hyperbole, I can assure the House that nothing would be more calculated to remove it than the eccentric fulminations of the noble and learned Lord who sits on the Woolsack. A debate within a Party is as much a matter of conviction as a debate between Parties. I beg the noble and learned Lord not to fall into the practice of impugning the honour of those who venture to disagree with his views.

Having got that much off my chest, there is of course a wide spectrum of views about this. There are those who believe that we should not join the Common Market on any terms at all; on the other hand, there are those who believe that in order to get into the Communities we should be prepared to accept any terms, however seriously they may affect in the short term the interests and the economic prosperity of this country. My own view has remained unchanged since long before I was directly concerned, in 1967, with the preparation of negotiations which in the event did not take place because of a political decision by the President of France. My view is that the advantages to this country of joining the Economic Communities and of taking part in their further integration and development are overwhelming. It was, therefore, in my view, right to enter into negotiations with the Six to see whether this country could accede to the Treaty of Rome on terms which would not place an intolerable burden on our balance of payments, which would not adversely affect the prosperity and security of the people of this country and which would at the same time allow us to discharge honourably and effectively our commitments to friends and allies all over the world. So when the Government White Paper that we are now debating appeared and the terms were available to be analysed, the only problem so far as I was concerned was to decide whether these criteria had been satisfied.

I think that it would be appropriate to look first at the White Paper and to decide whether the terms are set out in a way that makes them clearly understandable and, if so, whether the terms are fair and acceptable. As regards the White Paper itself, I must confess that I found it a rather disappointing document. I should have hoped to see at this stage of the great national debate a clear, factual statement setting out the progress of negotiations and the terms which were achieved, together with the essential background information necessary to set these facts in their proper context. This was not, in my view, the place to argue the case for entry; nor was it an opportunity to deliver what I thought was sometimes a rather patronising lecture deploying such resounding phrases as, every historic choice involves challenge as well as opportunity". Such phrases may have an impressive ring of rhetoric about them, but I do not think they really throw much light on the arguments that will have to be resolved before Parliament and the people of this country can make up their minds about what is an historic and, for all practical purposes, an irrevocable step which they are now being asked to take.

Having said that, I should like to recall—it has been done before, but I think I must do it here again—that when the last application to join the Common Market was made in 1967, the Government of the day, then a Labour Government, outlined a number of major issues—indeed, the Prime Minister of the day outlined them himself in another place—which had to be settled if the terms for joining the Common Market were to be considered satisfactory. They were: a satisfactory transitional period to enable us to adjust to the financing of Community agriculture; safeguards for Commonwealth sugar-producing countries and for New Zealand; and acceptable arrangements to deal with capital movements and regional policies. These were the only areas on which it was considered necessary to obtain satisfactory terms. So far as I am aware, none of those requirements has changed since 1967; nor, in my view, has there been any change in the situation since 1967 which would require those conditions to be revised.

If we look at the White Paper, is it possible to conclude that the requirements set out by the Prime Minister of the day have been met? In my view they have been met. The transitional arrangements for industry as well as for agriculture and the method which has been found of enabling us gradually to adapt to the Community budget system over a period of years seem to me to be fair and equitable. It is, as the White Paper says, impossible to quantify accurately either our contribution to or our receipts from the Community budget in the 1980s. It is in this context that the Community has declared in the course of, the negotiations that if unacceptable situations should arise the very survival of the Community would demand that the institutions find equitable solutions". It is difficult for me to imagine that any negotiating team of whatever Party could have achieved more in this respect.

So far as the Commonwealth is concerned, it is clear that the agreement which was reached on New Zealand exports of dairy products is fully acceptable to the Government and to New Zealand. The Government of New Zealand have said so. It is difficult to see how anyone outside New Zealand can reasonably suggest that it is not. Similarly, the solution achieved in the negotiations over the problem of the Commonwealth Sugar Agreement was fully accepted by all the Governments concerned. If they are satisfied it would, in my view, be perverse for us to suggest that we are not. On the question of capital movements, the Government, according to the White Paper, are proposing to move by stages to full compliance with Common Market obligations on the freedom of capital movement with a transitional period of five years.

It seems to me clear beyond reasonable doubt that the terms and conditions which have been secured by the Government negotiators on the major problems outlined in 1967 are acceptable and fair. It seems to me entirely reasonable that Parliament should be asked in due course to ratify accession to the European Economic Communities on these terms. But I would also say that before this is done, there are a number of omissions from the White Paper which will have to be repaired. Unless I have misunderstood the document or misread it, it is not entirely clear, for example, how the value-added tax is to be applied. This is a matter which is going to have important social and economic implications for the people of this country.

On the question of fisheries, the best that the White Paper can do is to say: the Government are determined to secure arrangements which will be fair throughout the enlarged community and will satisfactorily safeguard the interests of British fishermen ". Obviously, such satisfactory arrangements should be a condition for entry, not something to be secured after the decisive step has been taken.

The three brief paragraphs on regional policies are more pious expressions of faith than statements of fact or achievement. Again, as I said at the beginning, one of the criteria for satisfactory terms should be that the interests of all our friends and allies to whom we have commitments all over the world should be secured. I must confess that I have considerable doubts about whether the brief paragraphs on EFTA in the White Paper make it sufficiently clear that the position of our partners in the European Free Trade Area, has been effectively and unequivocally secured. So it seems to me that there are some gaps in the Government's White Paper, and they are gaps which I believe the Government will have to fill if they expect to convince those who have genuine doubts about the wisdom of their policy.

But, my Lords, I repeat that for those like me who believe that entry into the Common Market is vital to Britain's political and economic future the terms set out in the White Paper are fair and acceptable, even if they are not perfect. At the same time I realise that nothing which the Government may say or do between now arid the autumn is likely to convince those many people, on both sides of this House and in another place, and indeed in the country, who believe passionately that we should not become members of the E.E.C. whatever the conditions and whatever the terms.

The arguments for and against have been rehearsed a thousand times, and a hundred times in your Lordships' House in the past two days. They have been deployed again to-day in this debate, and they will be in the many debates which will go on in the country and which will not stop even after we have joined the Common Market. For my part I have never made any secret of the fact that the crucial argument, virtually the only overriding argument, is the political one. I realise, of course, that it is not possible to distinguish, with any degree of significance at any rate, between economic and political factors. Indeed, I believe that enlargement of the E.E.C. with Britain as one of its members will in the long term bring increased prosperity to the people of this country and to the rest of Europe. The argument has been put forward that the higher rate of growth in the Six compared with that of the United Kingdom is not attributable to membership by the Six of the European Economic Community. But what of the other fact, which was not mentioned, that the growth rate of the Six is higher now than it was before they joined the European Economic Community? Surely that cannot be entirely coincidence.

I have never disputed, and I do not now, that there will be short-term economic disadvantages in entry to the Common Market, not least in the cost of living and particularly the cost of food. I do not regard these as unimportant minutiae in the negotiations. They are important and vital matters for the people of this country. It is therefore for everyone to decide for himself whether the long-term advantages outweigh the short-term difficulties. In my view they do, but I fully respect the views of those who think otherwise. The economic argument is for me, and has been since the day when we first applied to join the Common Market, a finely balanced one. But when we come to look at the political side of the coin there is, in my view, no doubt whatever where the overwhelming advantage lies. We can no longer as a comparatively small nation State, a middle Power, hope to have the influence on world affairs that we had when we were at the heart of a great empire. The same applies to the nation States of France, Germany and Italy, the Benelux countries, and indeed to any of the smaller countries in Eastern or Western Europe.

The world to-day is a world of super-Powers, the existing super-Powers of the Soviet Union and United States of America, and soon, perhaps, the third great super-Power growing up on the other side of the world, the People's Republic of China; and, who knows, before too long the Japanese might join the ranks of super-Powers, if we in Western Europe are content to remain indefinitely fragmented, a collection of small and medium-sized States clinging to our illusions of sovereignty and national aspirations without ally attempt to unify or harmonise their foreign policies and their approach to the great human and social problems of the world, we must not he surprised if the solutions to these great problems are found without us.

Let us not be in any doubt what those problems are, and their importance to the prosperity and happiness, and perhaps the survival, of the human race. They are the great problems of starvation and disease in a rapidly expanding world population, problems of pollution of the environment, the poisoning of the environment by technological development. They are the problems of weapons of mass destruction which still threaten our very lives and the problems of relations between the peoples of Eastern and Western Europe. As my noble Friend Lord Shepherd rightly pointed out yesterday, Europe does not stop at the River Elbe; Europe is the whole of Europe, not just the western half. It is these problems, my Lords, which will decide whether future generations are to suffer, as we and our fathers suffered, the constantly recurring insanity of war, or whether they are to live in happiness, peace and prosperity.

I want to be assured that the solutions to these problems are not always decided in Washington or in Moscow, or even in Pekin or Tokio. I want some of them to be settled here in Europe. I do not believe that the people of this great country will be content to turn their backs on the rest of the world and tend their own gardens. This is not to suggest that we should try to set up Europe as some kind of third force, or fourth force or fifth force, to compete in terms of real-politik with the great military super-Powers. It is here that I must confess I find myself in this one respect a little uneasy about the fact that it is a Conservative Government and not a Labour Government which seems likely to take this country into the European Com- munities. There has been a great deal of talk and a great deal of uninformed fantasy among certain members of the Party opposite about nuclear weapons in Europe.

I was glad to hear the noble Lord, Lord Carrington, being so forthright on this subject yesterday. I was not entirely reassured, because he, my Lords, is one of the more enlightened members of his Party, but others sometimes speak with different voices. We have heard talk about Britain "holding her nuclear weapons in trust for Europe". We have seen members of the Party opposite lobbying around the capitals of Europe for the establishment of some kind of European nuclear deterrent based on the pooling of French and British nuclear striking forces. I regard this as most appallingly dangerous nonsense. Quite apart from the fact that the so-called European nuclear deterrent would be no deterrent at all it would make no military sense, and the political effects would be disastrous. Even assuming that it could be established, can anyone imagine the difficulties in evolving a control system for it? Suppose it was possible to evolve an effective control system, does anyone believe that it would be possible to exclude from that control system the Federal Republic of Germany, militarily and economically one of the most powerful nations of Western Europe? if they were included in such a control system, can anyone imagine that the Federal Chancellor's imaginative and progressive policies of détente towards the countries of Eastern Europe would last one second beyond the moment when, in the inevitable terms of the Communist propagandists, a German finger was laid on the nuclear trigger?

When I was in Bonn at the end of last year talking with the Federal Chancellor he told me clearly and categorically that he wanted no part in such a European deterrent, and I hope that no one in this country would want any part in it either. Nuclear weapons are entirely irrelevant to the political unity of Europe. The greatness which I believe Europe can and will achieve when the Common Market is enlarged will lie in the genius for political organisation and technological skills, and on its ability to bring happiness and prosperity not only to its people but to those less fortunate in the rest of the world. The greatness of Europe will not lie in any attempt to ape the military policies of the super Powers, about which, indeed, they themselves are at last beginning to have their doubts.

This brings me to my last comment for the moment on the question of Britain's role in Europe and of Europe's role in the world. It is being said, and it has been said in your Lordships' House, perhaps with some truth, that there is a majority of people in this country at this moment who are for one reason or another against our entry into the Common Market. Whether this is true or not, I have no means of knowing. Certainly I would not place any faith in opinion polls. Recent experience has left traumatic marks in that respect. I certainly would not place any great weight on the omniscience of the Press. And even if it could be conclusively shown that public opinion lay that way now, I doubt very much whether it will still lie that way in six months' time. One thing is certain, at least in my own mind: if there is a majority in this country against an enlargement of the European Community with Britain as a member of it, it is a majority largely among people of our own generation. The young people of this country are of an entirely different and more visionary turn of mind.

Like some other Members of your Lordships' House, I spend a good deal of my time at schools and universities, debating and talking with young people about the great issues of the day, mainly (because they are my own preoccupation) about defence, disarmament and the Common Market. I also have a regular television programme in Wales with young people, who are brought into the studio at random to discuss the issues of the day. From all these contacts I have formed a very clear opinion that, whatever may be said here or in another place, the young people of this country are firmly and unequivocally in favour of our entry into the Common Market. They want to break down the national barriers that have divided Europe for too long and have often hurled it into dreadful and destructive wars. The young people of this country want to see an end to narrow nationalism and to policies of blind self-interest. They want to see a new Europe arising which can do something about the great problems which are going to beset the world in the last quarter of this century and in the beginning of the next.

I went only a few weeks ago to the University College of Wales in Cardiff to take part in a Union debate on the very simple motion, that Britain should join the Common Market—no terms, no conditions, a very simple motion. The debating hall was packed. I suppose that there were 400 to 500 young people present throughout the debate. They took part in it, as one might have expected, vividly, intelligently, articulately. They talked about world poverty, nuclear weapons, nationalism, regionalism, the price of food and the dangers of war. Their views, I suppose, were on the whole rather more radical than one would have found among an older audience debating the same subject or perhaps an audience outside Wales. Yet when the vote came to be taken, there was a clear and substantial majority in favour of Britain entering the Common Market. I believe that this is the reflection of the voice of the young people of this country and of other countries in Western Europe. Perhaps, following the example of my noble friend Lord Longford, I might address my last point more specifically to my own colleagues in the Labour Party than to anyone else. I believe that the voice of these young people is the voice of the future. I believe that if, through any deficiency of courage and of vision, we fail to listen to it now, we shall not easily be forgiven by a generation whose quality of life and perhaps whose very survival may depend on the decisions we shall take in the coming months.

7.25 p.m.

LORD STOKES

My Lords, I have listened with interest to the debate, with its emphasis on the balance of the broader political and economic aspects of entry to the E.E.C. With your Lordships' permission, I should like to contribute by dealing with the practical"nuts and bolts"aspect of entry as they will be faced by industry, speaking primarily of course for my own interest, which I must declare, the motor industry. If I may remind your Lordships, the motor industry accounts for over 10½ per cent. of total industrial production in Britain. It is responsible for the economic well-being of large parts of the country, notably the Midlands, Lancashire, and a substantial part of Essex, and in addition it plays an important role in many other areas—for instance, Swindon, South Wales and Scotland. Well over one million people are directly employed in its activities, some of them fairly vociferous, and its repercussions affect the whole industrial fabric of our country.

I am afraid that I cannot agree with the noble Lord, Lord Beswick, when he suggested that the headquarters of British industry would gravitate towards European centres. I think the reverse of this will happen. In fact in our own case, anticipating entry into the Common Market, we have moved our European Office back to London this month. The motor industry is a fundamental part of our economy and it is also vital to British exports. It accounts, I do not need to remind your Lordships, for some 14½ per cent. of United Kingdom visible exports, which is worth a total of £1,158 million. I think that it is a good indicator of our overall economic situation. What the European economic market means to the motor industry may therefore be of some significance and interest in this debate.

I am afraid that I can speak only for one half of the British motor industry, the British half. In some respects, but I do not think in any fundamental respect, the American half might have different views. As I see it from an industrial aspect, we have three things to look at. Although they have been admirably dealt with in many previous speeches, I hope that your Lordships will forgive me if I repeat them. First, can we compete? Secondly, do we need the large market? Thirdly, What alternatives are there? These are questions that every industry must face, and I think that our industry may perhaps be a mirror of what will happen in other industries.

First of all, are we competitive? People who look only at the United Kingdom market and note the rise in imports may conclude that we are not competitive. I think that too many people also seem to think that the United Kingdom motor industry has a unique degree of protection. What are the facts? As regards tariffs, the E.E.C. tariff on our cars is marginally higher than our tariff on theirs—13.2 against 13 per cent. Here again as re- gards our ability to compete even to-day under these approximately equal conditions, I feel that I must disagree with the noble Lord, Lord Beswick, because the facts are that in 1970 we exported 158,000 cars to Europe against only 130,000 coming into this country.

On commercial vehicles it is generally accepted that the United Kingdom industry is among the most competitive in Europe. For this reason commercial vehicles were excluded from the Kennedy Round reductions under French pressure and tariffs are still prohibitively high at 22 per cent. I think that the United Kingdom should therefore benefit more than any other European producer from the elimination of commercial vehicle tariffs between the United Kingdom and the Common Market countries. This would further enhance the export ratio of the United Kingdom motor industry, already, I would remind your Lordships, one of the highest in the world. The share of imports is increasing in every country in the world which does not impose quotas on trade. England, despite recent increases, still has its fair share of such imports. No major European country has less than 20 per cent. of its car market going to imports. I think that this move towards imports in an inevitable trend as tariff barriers come down and people become more opulent and therefore want more variety.

In our planning we have always assumed that the share of imports into the United Kingdom market would eventually rise to around the European average of 25 per cent. Consequently, our strategy has been to more than offset this by our penetration of the European market itself, which, I remind the House, is five times bigger than the United Kingdom home or domestic market at the present moment. In my own company, for instance, sales in Continental Europe this year will be nearly twice those of three years ago. We estimate that by 1975 the figure will double again, and that by the end of the 'seventies the Continental market itself should be just as important, if not more important, than what we call our domestic market to-day. In these circumstances, we must support entry into Europe; it is vital to us. We must regard Europe as essentially our home market, and this has been the basis of our thinking. It follows that we must welcome any measure which will help to turn Europe effectively into a single market and reduce the possibilities of tariffs or other barriers being erected between different European countries. I must emhasise that it is not only tariffs that we are worried about, but these other intangible barriers that can come up and so distort the normal trade.

Do we really need this large market? I think too many people fail to realise just how small in terms of requirements of large-scale industry the United Kingdom has become. The world motor industry is increasingly becoming concentrated into the hands of a dozen or less international manufacturers. The largest United Kingdom company comes about fifth or sixth in the world league; but it is the only one whose home base is in the United Kingdom. To-day the United Kingdom market takes only 50 per cent. of its production, with overseas sales of some £500 million going outside this country. But may I remind your Lordships that this country is the only car producing country of any significance whose home market has shown no net growth since 1964.

Until the Chancellor's recent measures our market was subject to Government-induced stagnation, which has greatly weakened our ability to compete effectively in world markets. Last year, the United Kingdom took only half as many new cars as West Germany—about one million here compared with two million in Germany alone. This gives any country such as Germany a tremendous manufacturing advantage. The situation of course looks much brighter now, as a result of Government measures which we warmly welcome. But if one projects forward to 1980, it seems very unlikely that the United Kingdom will be able to make up all the leeway lost over the last seven years. 'Therefore we believe that we have to increase our export percentage of production to much more than the 50 per cent. that we do now; and this means that we have to look to Europe as our biggest potential growth market.

I would remind your Lordships of the rate at which Europe is growing now. A doubling of United Kingdom car sales in Europe would in fact only mean increasing our overall share of the Continental market from 3 per cent. to 4.9 per cent. This demonstrates just how large the European car market is, and how fast it is growing. In fact, it has already overtaken North America as the world's largest car market, and it will increase during the 1970s.

The insecurity of our British base, in isolation from Europe, is not the only factor which must affect our thinking. Two others, in particular, menace our future outside Europe: first, the growing threat of Japanese competition, based on a hitherto heavily protected Japanese home market; and secondly, the possible danger of protectionism in the United States, which is our second biggest export market. Hitherto the United States has been a low tariff market, but we all know that there are pressures there for greater protection, and also strong pressures to impose conditions on safety, and so on, which can only too easily be used as concealed methods of protection against imports. Without access to Europe the possible effect of these factors on our trade is absolutely frightening.

LORD BESWICK

Perhaps the noble Lord will allow me to interrupt. I may say that I am not in any way trying to belittle what the motor car industry has already done, so far as exports are concerned. But the noble Lord has not answered either of the two points that I ventured to put to him. First, there is the point about the increased labour costs that will face the noble Lord when we go into the E.E.C., with all the increases on food prices and so on. How is that going to affect his entry into Europe? Secondly, what will be the effect on his other world markets of this switch from one preference system to another?

LORD STOKES

I thank the noble Lord for his intervention. First of all, on the question of costs we are quite confident that if we can get the added volume through access to the bigger European market we can readily absorb the costs, as we know them, that are likely to be included in our manufacturing element. The second point I was coming to under the alternatives that we have if we do not enter into the European market.

What alternatives have we if we do not enter the E.E.C.? EFTA has been very little help to our motor industry. Norway, Switzerland, Portugal and Finland still impose taxes on car imports from the United Kingdom, which are effectively tariffs. If we take the domestic car markets of the other three members of EFTA, Denmark, Austria and Sweden, since 1964 the combined market for new cars has shown no growth: in fact, it has actually fallen by nearly 4 per cent. In contrast, over the same period the E.E.C. domestic car market has grown by over 50 per cent. I think these figures speak for themselves, and they are reinforced when you remember that our own market in the United Kingdom has fallen by no less than 11½ per cent. during the same period.

The other important big potential market which historically used always to be in our minds is the Commonwealth. At one time it was of enormous importance to the United Kingdom motor industry. Over the last decade, however, the great majority of Commonwealth countries have recognised the power of the motor industry to generate wealth, and they have adopted policies to encourage local production. I think it is true to say that practically all Commonwealth countries, with the exception of Canada, now use import quotas or high tariffs, regardless of the country of origin, to protect or stimulate domestic production, and, in consequence. Commonwealth preferences are of very little real value to the United Kingdom motor industry. The Commonwealth markets account for only 13 per cent. of our overseas car sales, compared with 52 per cent. for Europe as a whole. We do not believe that the Commonwealth offers for us the same growth potential as Europe, and we have no reason to believe that entry into Europe will affect our exports to the Commonwealth one way or the other.

The other alternative that we have as a country is of course to go it alone. For us, as an industry, this is not a satisfactory proposition. I have already referred to the limitations of the United Kingdom market as a home base. Having this big home base and getting the volume will enable us to be competitive, despite the increased costs, which we do not think in any case will be higher than the costs German manufacturers or French manufacturers are currently having to bear through being inside the Common Market. I think there is plenty of evidence over the last few years, also, that United States firms with investments both here and on the Continent have been putting their money into their Continetal plants, thus intensifying our big problem in this country of under-investment. British entry into the E.E.C. should provide a boost for capital investment, particularly by American firms in this country, for whom the United Kingdom should be an excellent base from which to attack the main European market. The"going it alone"seems to have no advantages to offer, and to bring many problems.

There is of course the other alternative that has been mentioned here to-day, of a large American free trade area (NAFTA). I do not think this to us has any significant advantages. We have to live in a real world, dealing with what is possible, and I do not think this can be taken seriously from an industrial or commercial point of view.

My Lords, if I may now conclude, for my industry, anyway, entry into Europe offers the prospect of advantages which no feasible alternative can even approach. We know that we can only reap these advantages of entry provided that we can get our labour relations under control and, as the noble Lord mentioned, keep our costs competitive. I believe there is an unprecedented effort going on at the present moment to solve these problems in the motor industry. The C.B.I. initiative, and the latest Government reflation measures, offer an opportunity to consolidate this work and to put our house in order; and this must be done very quickly, before it is too late for ever. I believe that entry into the E.E.C. will be a great challenge. I am not competent to speak about the terms, but I think the stake is so high that we we should never haggle at the terms one way or another. I believe that if we do not accept this opportunity of entry we have no alternative but to go into a state of permanent industrial recession.

7.39 p.m.

LORD PARGITER

My Lords, I am glad to follow my noble friend Lord Stokes, and I hope shortly to offer one or two comments on what he has said. In the meantime, I wish to speak quite subjectively on the question of the Common Market on behalf of the generation to which I belong: that is, the generation which has endured the stresses of two world wars, the depression and unemployment of the inter-war years, and, more recently, enormous rises in the cost of living.

I recollect promises after the First World War, the homes to be built fit for heroes, the period after the Second World War when every capitalist nearly became a Socialist—and even The Times was referred to as the threepenny edition of the Daily Worker. All these are things in my memory and in the memory of other Members of your Lordships' House. But above all this. I am concerned about precisely what is there for the elderly people of this country? What is their future? What can they look forward to? Here I find myself at variance with the Government on the question of the Common Market. I know that in Britain and Europe there are airy promises about adjustments, and so on, to be made in pensions. Soma: of us are a bit old in the tooth—we have listened to that sort of talk for a long, long time—and we usually found that the event has long been overtaken, in so far as the benefit is concerned, by the cost. Take the example of the recent much vaunted increase in pensions. Before we get it it is already more than eroded by the increased cost of living; so that by the time we come to 1973 and then wait another two years, just what is going to happen? Perhaps I may say this to my noble friend Lord Chalfont: that is why the older people of this country are a little sceptical about the advantages of the Common Market, and why they and I want more cast-iron assurances given if we in this country are going to accept the Common Market and all that is involved, particularly in the early stages of our joining. This is the period which we shall be concerned with. Many an elderly person, unless something is done, will have as his epitaph"He died waiting for the benefits of the Common Market"and I want to see that the elderly do not of necessity have that epitaph. I do riot want any airy promise, I want a more concrete assurance.

For example, we have been told—and I have never really understood this—that there is an enormous administrative problem in altering the rate of pension and that the process takes nearly a couple of years. This is sheer nonsense. All you have to do is to make a £5 voucher worth £6 and you cash it to-morrow for £6, or as and from a certain date a figure of £5 becomes £6 or £7. There is no administrative problem of issuing a lot of new books and that sort of thing. But no Government want to do this; they would have to do it much too quickly. But I want to see it done quickly; I want it done in such a way that the older people of this country may not feel all the disadvantages which they do at the present time about the prospects of entry into the Common Market. These feelings are very real and very definite. What we want, above all, is to calculate the basic needs of elderly people—and they cannot afford much else—such as food, fuel and shelter; and by and large they have not much balance left after that.

We already know the position in regard to shelter. Fair rents are not going to have a very beneficial effect so far as elderly people are concerned. We know they can apply for a means test but many of them will not wish to do so if they can help it. We already know that the deliberate policy of the Government has pushed up food prices. They may deny it, but the fact is that the change from subsidies to import levies of necessity pushes up the price of food. That is a fact. I am not saying how great it is at the present time. Equally, we get the apology that because of the rise in world food prices the impact of going into the Common Market will not be quite so bad; but the impact of world food prices is being felt by elderly people now, and they will feel it more, whatever the increase is, when we go into the Common Market.

Equally on this question, while there is a possibility, indeed a probability, that world food prices will fall—they have done in the past; they have fluctuated up and down—the answer is that if we are going into the Common Market there will be no question of food prices falling; they will be maintained and the probability is that they will be increased. This is essentially so. The different E.E.C. target figures for most of the things we eat and need, so far as elderly people are concerned anyway, are much higher than the present figures guaranteed to our farmers. This means that the guaranteed figures will rise to the E.E.C. figures. Equally for food imports, we shall pay to the Common Market Agriculture Fund for the general benefit of agriculture, but not of British agriculture. The net effect is to increase the cost to people when they go to buy their weekly shopping. While this may be inevitable, we may have to accept it, at least we ought to recognise it, and recognise the responsibility we owe to a particular group of people who, because of their relatively low fixed incomes or pensions, will be greatly affected. We ought to do something about this matter.

There are omissions in the White Paper and in the short pamphlet Britain into Europe. For example, we have the British contribution and we are given the figures up to 1977. But the figures are available up to 1980. In 1980 it is anticipated that we shall get back from the Common Market £100 million, exactly the same as in 1977, but that our contribution will be about three times that amount. Virtually the whole increase in the Common Market contribution in 1980 will be met by Britain. I am not suggesting that this is a burden we cannot carry, but I suggest that it does not seem to be a good piece of bargaining if we are told that this is the best that can be done. I do not think it is the best that can be done by any means. The Community cost, the Community budget, is automatically increased; but if at the end of the day when our contribution is either 22½ per cent. or 25 per cent. according to the argument that goes on about it, if Britain is to be responsible for the whole of that increase and if we get nothing more back from the Community budget I cannot visualise this being a particularly good deal.

I should like to say a word or two about economic growth. It is true, of course, that economic growth in Europe is greater than the economic growth in this country, for all sorts of reasons. It depends what sort of level you start from, when you talk about economic growth—whether you start from zero or halfway up the ladder. These figures are important. It is equally true that in the second five years, that is from 1965 to 1970, economic growth was greater only in Italy than it was in the previous five years. In other words, in other parts of the Community, and in Britain, too, economic growth was less from 1965 to 1970 than it was from 1960 to 1965.

We have also been told, on what one might term reasonably independent authority, what is going to happen to us in the near future. Due to the very low rate of investment which we have suffered in this country we have to achieve a massive rate of reinvestment in British industry if we are to be competitive and not subject to an influx of goods against which we have no reply if we go into the Common Market. Where is the expansion coming from? Where is the money coming from? Who is going to do the investing? It is true the Government have said that they are doing something about the investment policy, but it is getting a little late in the day. You cannot invest to-day and see the result to-morrow. The most we can hope from investment now is that it might possibly show some result in a couple of years' time. It is not only a question of when you put the money in; there is also the question of when you get the machinery to produce in greater quantities and with more efficiency. Therefore, we have this question of the cost of expansion. We have of necessity to expand, but the expansion itself will throw a considerable burden on the balance of payments and it has been suggested from independent sources that before we go in, in order to get on to equal trading terms with the Community, it will be necessary to devalue. I know that the Government will deny any possibility of devaluation—all Governments do, right up to the eleventh hour, the 59th minute and the 59th second—but it is quite a distinct possibility. I should like to be sure that the Government have given some thought to the possibilities that might arise here.

Regarding the movement of capital, would disagree with the noble Lord, Lord Stokes. Movements of capital, so far as Britain is concerned, have always been outward and never inward: in fact various Governments have had to put restrictions on the movement of capital to avoid denuding Britain of the necessary capital for reinvestment in her own industries. So when we get our freedom in regard to Europe, while this may not affect the movement of capital to Commonwealth countries and so on, we shall find that the European countries are much more insular in this respect than we are in this country, who have always had an international outlook on capital investment. Therefore, as my noble friend Lord Beswick has said, I think the movement will centre itself more in Europe than in Britain, with all the consequences of employment which will flow with it to the Continent and from Britain.

I agree that this is quite contrary to the position expressed by the noble Lord, Lord Stokes, and I appreciate that British Leyland is a British-based company, of which we are all very proud. There can be no question of any likely movement of capital there, but there may be a restiction on the capital market on which they may want to draw because of these pressures from the Continent. I also recognise that, in spite of what the noble Lord has said about difficulties concerning the Commonwealth and other parts of the world, the company already have well-established bases, and although they will not be perhaps of direct value to the country they will be of indirect value, quite apart from the question of direct exports.

As regards exports in the car industry, I appreciate the noble Lord's concern about the low rate of growth in this country, but we must recognise that although we have to restrict expansion in this country because of the inflationary situation, that restriction has to be placed where it can do the least damage to the country's resources as a whole. Therefore, much as he may regret it, I think the noble Lord may be obliged to accept that this is not altogether unreasonable so far as the motor industry of this country is concerned. On the whole, I accept his view that the motor industry will undoubtedly prosper as a result of entry into Europe, but I am not at all sure that this will apply to many other industries with which we are vitally concerned. For instance, may I ask a question about fisheries. We gather that the question of fisheries remains to be settled and also that there is a divergence of opinion between Norway and the rest of the applicant countries and Europe as to what the probable fishing limits ought to be. Norway wants to retain the 12-mile limit, and we are prepared to settle for something less.

I understand that the Government have expressed the view that whatever may be agreed will apply equally to all countries. If Norway insists on a 12-mile limit as being conditional to her entry into the Community, what are we in Britain going to do about it. Do we back them up and say, "All right; if Norway does not get an agreement on fisheries and does not go in, we do not go in either"? Because that is what we ought to be committed to. Whether we are or not I do not know. We should have regard for the EFTA countries of which we have been very glad during the period when we tried to make up something instead of the Common Market but with perhaps not quite the degree of success that we might have wished for. So the EFTA countries are important, and it seems to me that before we say, "Yes", and sign on the dotted line, we ought to be satisfied that the terms that are arranged between the Common Market countries, the enlarged Common Market countries, and the remaining EFTA countries are satisfactory.

One of the things that we have not yet talked about a great deal is the effect of our entry into Europe on foreign and defence policies. Here I may find myself in some difficulty in what I want to express. Of course, we have had a grandiose Government expression about the retention of a presence East of Suez, and we have talked about the defence of our trade routes in the Indian Ocean and the other things that flow from that. Yet in the Mediterranean we were unable to send up a couple of fighter aircraft from Malta to protect a British aircraft, which presumably we could have done. We did not do so: I do not know why—perhaps they stop at five o'clock. However, it seems to me that British prestige and the protection of lives which have been committed to British care deserve something more than was done in this particular case.

This brings me to the question of Britain's role and prestige in the world. Sooner than see the spectacle, as I regard it, of a British Foreign Minister grovelling in the sand of the Libyan Desert, I would prefer that we entered into a United States of Europe, because at least we should remain reasonably identifiable. While I do not want to use this argument at all as regards the Common Market, I can see the ultimate advantage of Britain's going into a United States of Europe in order that British prestige, for what it is worth, may be better maintained than it is at the present time.

7.58 p.m.

LORD PLOWDEN

My Lords, it is a great pleasure to be able to congratulate the noble Lord, Lord Robens of Woldingham, and the noble Lord, Lord Blake, on their maiden speeches. It is sad that the application of the Addison Rules has prevented us from hearing the noble Lord, Lord Robens, earlier, and the quality of his speech makes one hope that he will speak often. The speech made by the noble Lord, Lord Blake, makes one hope that he will come often from Oxford to speak in your Lordships' House.

In a debate on the Common Market on August 3, 1961, I said that I was a convert to the view that we should join the Common Market. Since then I have remained firmly of the view that this is the right thing for this country to do. I support our entry into the European Economic Community basically for three reasons. The first concerns the economic advantages, as I see them—and by that one means that entry will increase the rate of growth of the British economy, because entry will give us an assured access to a mass market. The noble Lord, Lord Stokes, has spoken most eloquently of the advantages for the mass production industries, such as the motorcar industry, from such an assured access. I, as an industrialist, fully agree with him. Although there are obvious advantages for large firms, there are also real advantages for small specialised firms. Small firms will obviously gain from the improved economic climate in this country, but those specialising in high technology will, as a result of having access to far more customers, be able to develop their technology more easily than they are able to do in a smaller British market.

In a study made by Professor Winnacker, then Chairman of the German chemical firm, Hoechst, and me, for M. Monnet's Action Committee in 1969, we wrote: The size of market will also create an environment in which small but highly specialised technological firms can operate successfully. This we wrote both as a study of the European Market and also as a result of our study of the American market. I stress this particularly because people seem to think that the Common Market is really something only for the large firms and not for small firms. As the noble Lord, Lord Selsdon, pointed out last night, there will undoubtedly be opportunities for the City of London to increase invisible exports. We shall also, I believe, gain advantages from the phasing out of sterling as a world reserve currency, which has in my view placed an undue burden upon the economy of this country. A further result will be an increase of American investment in this country. There is no doubt that American firms, when given a choice, prefer the environment of this country—the common language, common law and so on.

My second reason is the disadvantages of being excluded from a large trading area. If we do not enter the Common Market there is no alternative large area which we can join. There are great attractions in the idea of a North Atlantic Free Trade Area, but anyone who knows Canada and the United States well knows that there is not the slightest interest in those countries in an organisation of that kind. The Commonwealth, whatever the political advantages, is certainly far too disparate to offer any possibility of an economic trading area.

As the noble Lord, Lord Crowther, pointed out, there is a real risk of protectionism growing in the world and reversing the trend towards freer world trade that has prevailed since the last War. This comes partly from the policies pursued in the Common Market, particularly the agricultural policy. It is an illusion to think that this country on its own, outside the Common Market, can do much to reverse this trend. As a member of the Common Market I feel sure we could influence the market towards freer trade and a more sensible agricultural policy. If we are excluded, and the world becomes more protectionist, and there is a depression—and one cannot say that that will never occur—as an industrialist I should be extremely frightened about the results for British industry in a world with tariff barriers round large blocs, and ourselves competing with the Japanese and selling in the underdeveloped markets of the world. As the noble Lord, Lord McFadzean, pointed out yesterday, the possibility of the economy of this country becoming a specialist economy, such as that of Sweden or Switzerland, is really impossible, except perhaps in the long term.

My third reason is what the White Paper calls the "broad political perspectives". I do not need to emphasise the merits of Western civilisation and the part that the United Kingdom has ployed in its development. Until 1914, when Europe started to tear itself to pieces, Western European civilisation was Western civilisation. But since the last war power and influence have gradually slipped away from super Powers, and I do not think that that is a good thing. Europe cannot equal in military power the super Powers, nor indeed should it try to do so, but with the growing isolationism on the part of the United States, Europe, within NATO, will have to contribute more to its own defence. In the world of ideas, political, technical and sociological, Europe still has a great deal to give and more to contribute than any other part of the world. This country has a major part to play in this. That part can be played to much greater effect, I submit, as a member of the Common Market, in conjunction with the Six, as a unity of Ten than on its own.

I find it difficult to understand the argument of those who say that they want to enter the Common Market but that the terms are not good enough. If they say that it will not be possible for us to compete within the Market because we are too weak, what do they think is going to happen to us if we are outside? We cannot opt out of competition; we cannot draw back on ourselves and be self-sufficient; we have to compete with the Common Market and other people, whether we are in or out. If we are outside we shall have the European tariffs against us. If they feel that the arrangements made with the sugar producing countries of the Commonwealth are bad, those countries have expressed themselves as satisfied with them. Why should we be more royalist than the king? If they feel that we have betrayed the underdeveloped Commonwealth countries, those countries have the opportunity of association or of special trade agree ments. If they feel that we have not done well by New Zealand, the Government of that country has expressed itself as satisfied. If they feel that we have gone against the interest of, or have treated unreasonably, Australia and Canada, as an industrialist I know that the Governments of those two countries look after their own interests whenever they think that they are threatened. When they think it is right they reduce imperial preferences, or increase tariffs. I make no complaint of that; they are looking after their own interests. We all recognise the great contribution that those two countries have made in two world wars. But in peace time their contribution to defence is proportionately far less than that of this country, with higher standards of living than this country. In 1969, as a percentage of gross national product our contribution towards defence was 5.1 per cent., Australia's 4 per cent. and Canada's 2.5 per cent. I am not complaining about that but am merely pointing out that when they think it is in their interests to take a certain line, they do so.

Far more able people than I have dealt with the question of sovereignty this afternoon. If there is a fear that the European Economic Community is too socialist or too capitalist, we have capitalists and socialists in this country. If they believe that by delay better terms will be obtained, this is pure speculation. There is a strong reason against delay, or against even hoping that we shall come back and negotiate again. This country and, in particular, British industry, has for over ten years been wondering whether it is going to enter the European Economic Community, and many decisions of vital importance have been held up because of that. I do not think that we should delay any longer.

It would be foolish to deny that there will not be difficulties on our entry, although I think that they are exaggerated. There will be an extra burden on the balance of payments, but, unlike the T.U.C., I do not believe one can foretell what that burden is likely to be way into 1980. Certainly when I was a Treasury official we were not very good at estimating burdens over the next 12 months, let alone the next 10 years. There will be an increase in the cost of food, but again not nearly as much as it would have been had we entered in 1961. And there will be adjustments to be made in British industry. In my own industrial group which consists of nearly 100 firms, large and small—some very small indeed—we have been studying the advantages and disadvantages of entering the Community, and we are quite sure that the advantages outweigh the disadvantages.

However, all change is uncomfortable. All people, and perhaps particularly the British people, dislike change and are reluctant to change. But progress comes from change; in fact, progress is about change. Like the noble Earl, Lord Longford, who has only one Latin quotation, I have only one historical reference—and the noble Lord, Lord Crowther, has used that already to-day. But I will repeat it. Professor Toynbee has said that all civilisations, all organisations, large and small, at some stage are challenged and upon the response they make to that challenge depends their future. I do not believe that the British people are decadent or in decline, as some commentators appear to believe. But since the war we have become inward-looking. We all know the reasons. We won the war; we have given up an Empire; and the reward for these things appears to be permanent difficulties. We have been under challenge, but perhaps we have not recognised that challenge. I believe that entry into Europe will make clear that challenge, and I am quite sure that the British people will respond to it.

Rather than the pessimists, I prefer to believe what a shop steward in one of our works said to me a fortnight ago. Having asked me what my views were about the Common Market, and having been told, he said that he had been thinking about it and he himself was against it. He did not like foreigners, although he told me he was going to Spain for his holiday. He thought he would have to pay more for his food, and that he might have to change his job or that something might happen to him in his employment."But ", he said,"having thought about it, I believe it will offer greater opportunities to my children, and for that reason I am prepared to back it and go along with it." That was an extremely mature judgment, and basically it is for that reason that I support the White Paper and our entry into the Common Market.

8.14 p.m.

LORD GRANTCHESTER

My Lords, I wonder whether we have appreciated sufficiently how much the economic progress in the Community is due to the inspiration of the liberal philosophy which moulded the thinking of its leaders. They were a small group of men drawn together to put into practice theories which at the time the last war ended were not very popular nor attracting a great deal of attention. Old theories which had been successful in the past were rediscovered and adapted to the present. In France they went back to Quesnoy, to the pysiocrats and to de Tocqueville; in Germany to the old Vienna School and the teaching of liberals like the late Professors Rappard and Röpke in Geneva and Professor von Mises. Without these influences there would have been no"Prosperity through competition"from Chancellor Erhardt, or new franc, or Economic Council in France under the direction of Jacques Rueff, now Chancellor of the Académie Francaise, or Italian President Einaudi. It is an astonishing picture of philosophical thinking influencing the development of the economy of the Continent. Despite many heated arguments, the scene has remained exciting and the decisions that have been made interesting.

This country has been largely outside the influence of these ideas. The noble Lord, Lord Robbins, made a gallant attempt with his treatise published in 1952, but there was no political Party to interpret the basic message, to adapt and apply it in a contemporary setting. This is why I think that all through our approach to the Common Market has been too much concerned with the smaller issues. The Prime Minister in his initiative seems to have caught the philosophical theme. The idea that anyone other than the Government has any responsibility for anything still strikes a note almost of incredulity. This will not be found to be so in the Community.

My Lords, I have always felt that, in their fundamental attitudes to the future of Europe, Britain and France were much nearer together than was generally recognised. Both have a history of which they are proud and traditions upon which they wish to continue to build. Both, I believe, are likely to be content that the executive power should remain firmly in the hands of the Council of Ministers, with the Commission in Brussels their Civil Service, and Specialists to advise, to secure harmonisation and to execute the policy decisions of the Council of Ministers. So long as the European Parliament remains a consultative Assembly no clash with national Parliaments need be feared. For this reason I think what the noble and learned Lord the Lord Chancellor said about sovereignty is quite clear. I do not think that in this set-up a European President is necessary, for in any external negotiations the chairman of the Council of Ministers is well qualified to speak for the Community, as he does on many occasions.

My Lords, it has perhaps not been made sufficiently clear that we are not proposing to adhere to the Treaty of Rome as it was signed by the Six members of the Community in 1957, but to a Treaty modified by agreements between the parties, particularly in 1966 and 1967. But to avoid confusion and possible controversy at a future date I should like to ask that those modifications should be more precisely defined. My request for clarification includes defining the circumstances in which the rule of unanimity in decisions of the Council of Ministers is to apply. Some commentators are talking as if we are entitled to object to anything we do not like. I do not think this is quite the intention of the modification which has been made to the Treaty, but for this reason I would like to see it set out as an addition to the White Paper.

President de Gaulle, when he was in power, insisted that the British attitude on certain matters of importance should be declared prior to our entry. It is a great tribute to the Prime Minister that the present President of France is satisfied that any unsettled questions should be worked out in the enlarged Community. In my view this is a demonstration of the confidence of the French President in our Prime Minister and his colleagues. But this decision makes it desirable that we should seek some clarification of the Government's ideas, and I should like to put one or two questions on points on which I should like to be made clear.

The first concerns the individual in the wider setting. The wider the setting in which an individual finds himself the more he is likely to be overlooked. We have been told that it will take a year for Parliament to approve measures necessary to conform to current Common Market practice. Side by side with this I think we need a general strengthening of the rights of the individual. Our citizens enjoy certain special rights in regard to arrest and the time within which anyone arrested has to be charged with an offence or released. This same protection is not available in some of the countries with which we shall be associated and in which our citizens will enjoy the right of free movement. The European Convention on Human Rights is an inadequate document, and it is this that I would ask the Government to consider. So far as I know it has not been ratified by France, for reasons which the French Government consider fundamental to their authority. But in any case it is not adequate on the point I have mentioned, and I would like to ask for an assurance that the Government will immediately seek an agreed and an acceptable revision of this Convention.

The second point I would like to raise is on the question of the levy. I do not want to go into the amount of the levy that we have to pay on imported food because this has been argued ad nauseam. I have a belief—and I do not know whether it is right or wrong, because there have been changes in the agricultural policy in the Community from time to time—but I have the idea that when the agricultural policy was negotiated between the members of the Six, Germany secured a maximum figure beyond which her contribution should not rise. If this is so I would like to ask whether a maximum figure would not be preferable to an argument under paragraph 96 of the White Paper. Such a solution might remove a lot of the fears of those who are opposing entry because of uncertainty on this matter.

The third question concerns our share of the Community budget. I do not want to argue about the calculation of our share, although I should have liked it to have been worked out a little differently. The contribution will be small at the present time, but I do not like paragraph 8 of Annexe A, which seems to me unnecessarily to open the door for a vast expansion of that budget, in which case our contribution could be a very considerable sum. We know how easily budgets in a similar category to the Community budget can escalate—to use a nasty word.

My last question is, can we take it for granted that there will be a European identity card securing free movement for holders of the card? I think it is important from the start that ordinary people should handle some symbol of their membership of this Community. Incidentally, relating to that question, who is dealing with the question of equivalence of professional qualifications, degrees and diplomas, which has been on the agenda of Ministers of Education for years but which I understand remains unsettled? I believe a list of difficulties has been complied, but no suggestions how to resolve them even, say, five years hence.

Finally, may I refer to the fact that much has been made of the influence that an enlarged Community speaking with one voice could have on matters of concern to the world. Here I should like to make a suggestion. The occasion of the coming into being of the enlarged Community in 1973 will be quite an event. Would not this be a good opportunity to make some declaration of the aims of the enlarged Community? Would not the preparation of such a declaration between now and 1973 be a useful exercise in spelling out what M. Couve de Murville calls the dream of a united Europe?

Perhaps I may be allowed to make a few suggestions on matters which might be thought about for inclusion in such a declaration. The first suggestion is that it should express the desire of the enlarged Community to put at the service of the world the experience enshrined in what we call our common cultural heritage, and to make clear that we would welcome discussions with representatives of any nations on problems with which they may at any time be confronted. Having extended the usefulness of the European convention, as I have suggested, the enlarged Community might use its influence to help associated and independent African countries, black and white, to bring into being an African equivalent.

Personally, I should like to see included some regret on the results of the Yalta decisions, and an expression of the Com- munity's readiness to enter into discussions with Russia to try to achieve a happier relationship in what will still be a divided Europe. I would suggest to your Lordships that the Congress of Vienna in 1815 did a much better job than the Conference at Yalta. Perhaps that was because it was left to the end of the war and did not take place in the middle of the war.

The last suggestion follows the reference to the difficulties of the older generation referred to by the noble Lord, Lord Pargiter. It would be a reference to the necessity for monetary reform in relation to the problem of inflation.

While on the problem of inflation, may I ask Her Majesty's Government whether the 60,000 million Euro-dollars of which Europe has had the benefit, and perhaps the disadvantage, over recent years is considered by the Government as one of the causes of the rapid rise in inflation in this country, as well as on the Continent? I have asked this question of a number of people who deal with Eurodollars, but, quite naturally, they are not anxious to answer it. But at a time when national Governments are trying to curb inflation by restricting credit, it could be that 60,000 million Euro-dollars may have some bearing upon the problem. In due course, if not to-day perhaps to-morrow, the Government might like to express a view on this matter.

One of the reasons why I think monetary reform is a"must"in any definition of aims is because Bretton Woods Agreement, which, after all, was intended to be an interim measure, has now completely broken down, being completely disregarded. This problem is worthy of very serious and prompt attention as one of the first aims of the enlarged Community. What seems to me to be necessary is a small sacrifice of sovereignty (the only sacrifice of sovereignty that I am advocating) to honesty in the acceptance of rules applicable to the issue and full convertibility of currencies for which national Governments are responsible. The declaration that I should like to see, while containing some practical proposals, would, above all, give expression to the idealism as well as to the usefulness which has always prompted the more inspired advocates of European unity.

8.50 p.m.

LORD BROCKWAY

My Lords, we have been listening to a thoughtful, forward-looking and, I think, physically courageous speech, and I am quite sure that when Members read it in the OFFICIAL REPORT they will find many suggestions in it worthy of consideration. I would say this to my noble friend Lord Grantchester. If that speech is read in twenty years' time it will be seen to be an anticipation of the necessary steps to bring about a liberalisation of Europe. I content myself with that comment at the moment, but I shall be referring to my noble friend's speech later in my remarks.

Ever since I listened in another place to the report which the present Prime Minister made of his negotiations about the Common Market I have felt urgently involved. As I shall indicate, my interest arose much earlier, but since that time, and indeed since the time of the premiership of Harold Macmillan, this issue has been perhaps the most momentous before Parliament. I have been in this difficulty, that I have found myself in sympathy with many of the approaches and many of the criticisms made on both sides of this controversy. For example, I am a European, but that does not mean that one is not an internationalist. One's concern for peoples of all the continents, and particularly for the underprivileged in other continents, remains.

Historically we are a part of Europe. We are the children of Greek and Roman cultures; we are the heirs to the ethical teachings of the Christian religion. That is an influence which has been exerted all over Europe. In addition, there are two other great influences which we sometimes do not recognise. The noble Lord, Lord Grantchester, has referred to liberal philosophers since the last war; but the character of this country, our sense of democracy and of freedom, have been tremendously influenced by the political philosophers of the last century, both in France and in this country. That is an attribute of Europe which is different, because of our acceptance of those principles to a great degree, compared to other continents of the world.

Noble Lords on the other side of the House will probably not accept my second suggestion of a formative influence on Europe's mind and spirit; it is the influence of Karl Marx and of the Socialist movement. One need not necessarily accept all the teachings of Karl Marx, but the Socialist movement which arose from the middle of the last century has had an influence on European politics which we can hardly exaggerate. I am aware of it every time I hear in this House the Oath-taking by a new Member. He is commanded to be present regularly in order to deal with grievances which may arise from three subjects. The first is the Monarchy; the second is the defence of this country; and the third is the Church. Those three subjects dominated Parliament before the Socialist movement of the last century, and its influence at the beginning of this century changed the whole character of Parliament not only in this country but in Europe. Noble Lords on the other Benches may decry that influence of Marx and the Socialist movement, but it has been profound in its influence in Europe.

The second subject about which I have differed from many who have opposed the Common Market has been on the issue of sovereignty. This has been discussed with great authority by the noble and learned Lord the Lord Chancellor. I would only say to-day that, in the small technical world in which we live, the nation State, as a political entity, is absolutely out of date; we must move towards wider associations. In that respect I would say two things: first, there is a danger, as illustrated in the present arrangements for the European Community, that as we advance to a wider sphere it may become distant and lose contact with the peoples and become undemocratic. The present political structure of the European Community, with its technological commission at Brussels, its meeting of Ministers (one Minister from each Government with the power of veto), and a Parliament which has no authority, cannot be a possible solution to the problem of democracy.

The other point I should like to make in relation to the problem of sovereignty and wider loyalty is this. While we are moving towards wider associations than the sovereign State, equally important is participation of the people at the very roots of their lives. We must find, as we advance towards a solution of these political problems, a combination of wider association with that individual personal participation in membership of the Community which is so eminently desirable.

The third issue on which I very often find myself differing from those among my fellow Socialists who are opposed to the European Market, is the indifference which they show to European Socialists. For many years, I served on the Executive of the Second Socialist International. I am probably the only man living now who had that intimate association with Socialist leaders of that time—Karl Kautsky, Emil Vandervelde, Camille Huysmons, and the great Otto Bauer from Austria. Even before then I was a friend of Liebknecht and Rosa Luxemburg from Germany, whose courageous opposition to the First World War was one of the greatest political heroisms of which I know. Rosa Luxemburg has always been my political heroine. If Lenin had listened to her, the whole story of the Soviet Union, and indeed of the world, might have been so different. I feel a little hurt when from fellow Socialists there has been some expression of isolation from our fellow Socialists in Europe.

My interest in this issue began when I was a founder member of the Movement for a United Socialist States of Europe. It arose after the world war in the radical sentiment of that time. It preceded the European Movement with which Winston Churchill, Mr. Duncan Sandys and—I think I am right about the name; perhaps my Liberal colleagues will correct me if necessary—Lady Rhys Williams—

LORD BYERS

And Lord Layton and Violet Bonham-Carter.

LORD BROCKWAY

Yes, and others were associated. The Movement for a United Socialist States of Europe became instead a Socialist movement for a United Europe and it associated itself with the wider European movement. At that moment I resigned. I was in favour of a United Socialist States of Europe; I was not in favour of a United Capitalist States of Europe. I believe that represents the fundamental issue which is now before us.

I suppose I could be described as an old-fashioned Socialist, because I believe in the social ownership of the economy, because I believe in industrial democracy through the control of industry by those who are employed in it, because I believe that the wealth of industry should be equitably distributed to end luxury in the presence of poverty, because I believe in the international brotherhood of all peoples and am against every kind of racial discrimination. While that was the Socialism at the beginning of this century, I am quite confident that it will also be the Socialism before we reach the end of the century. Everywhere throughout the world to-day new generations are throwing aside the values of our capitalist society, and are looking forward to the kind of fundamental changes which I have indicated.

But we have to acknowledge that despite Social Democratic Governments in Europe and Labour Governments in this country, capitalism to-day is materially stronger than it was 20 or 30 years ago. Its new strength lies in its centralisation and concentration, not only in the merging of firms into great combines, but in the financiers who are behind them. It is extraordinary that 40 per cent. of all United States' direct investment in Germany, France and Britain comes from three combinations—General Motors, Ford's and Standard Oil of New Jersey, or Esso. The concentration is even greater than those three firms, because behind them are financiers who have holdings in each.

This development has taken place mostly in America, and the Common Market is largely a reaction to American economic development in this respect. European bankers, directors of great firms and E.E.C. officials have all urged larger concentration in Europe to meet this American competition. UNICE, which is the Common Market employer's association, and the International Chamber of Commerce have both requested legislation to facilitate these combinations. European banking, insurance, chemical industries, electronics, synthetic textiles and civil aviation in Europe are all passing into the hands of these large capitalist dominations. The result, my Lords, has been that the Common Market has become a consortium of financiers and combines, and the support which is being given in Britain to the Common Market comes largely from the same sections of our community. Noble Lords who read the advertisement in The Times yesterday, in which the leading figures in the great capitalist combinations of this country were supported to a remarkable degree by the great financiers, the great bankers—those who are behind this development of capitalist concentration—will have seen that it is these interests in this country which are now supporting the Common Market proposals. I just remark that how a socialist can support this new combination of capitalist power passes my imagination.

It is suggested that we socialists should go into Europe in order that we should support our comrades there in their struggle against this capitalism. I have already indicated my sympathetic feeling towards them; but, my Lords, we have to recognise that, unfortunately, the Social Democratic Parties of Europe, and in the past our own Labour Party here, have given up the challenge against capitalism. Aneurin Bevan's phrase, that "the commanding heights of the economy" must be taken over by the community, we have nearly forgotten. But I am certain, as one of the older generation who is in association with the younger generation to-day—perhaps closer than many of those of middle age—that before the end of this century (indeed, I hope before Labour comes to power in this country again) there will be a dedication to those fundamental socialist purposes to which I have referred.

I want to say just two things more, very briefly indeed. There are two consequences of this powerful capitalist domination of Europe. We can probably say to-day that 300 families control the larger part of the economy in which 350 million people now live in Europe. But it is not only a domination of Europe: it is a domination of the rest of the world; it is a domination of the developing countries, a domination of the Third World. In 1958 the developing countries bought 27 per cent. of all the E.E.C. exports. In 1967 they bought only 14.7 per cent., and of that the privileged associated States had only 3.5 per cent. Anyone who knows the working of capitalist industry and of this powerful financial concentration in Europe, demanding foodstuffs and raw materials from the developing countries, knows that they, with their power, will get those things at the lowest price they possibly can; and the low price for the foodstuffs and the raw materials of the developing countries is largely responsible for the increasing poverty from which they are suffering.

The second point to which I want to refer is this. I am scared that a united and strengthened capitalism in Western Europe will endanger the peace of Europe. I am frightened that it may lead to an intensification of the difficulties between Western and Eastern Europe. It is relying on NATO Powers. Despite all the assurances given, I am sure that unless we make a breakthrough in nuclear arms the European Community will become armed with the nuclear deterrent—and that at a time when the hope is arising of some association between Western and Eastern Europe. I am hoping for a synthesis which will be possible when we have a socialist movement in Europe seeking to challenge the power of capitalism; a synthesis based upon the idea of the social ownership of the economy in Western Europe and the liberalisation of the Communist countries of Eastern Europe. Perhaps my deepest fear of present developments is that the European Community and the Common Market may lead to a barrier in that direction, which I believe is the hope of Europe and indeed, as it extends, the hope of the world.

9.8 p.m.

LORD GARNER

My Lords, I do not feel qualified to follow the noble Lord, Lord Brockway, in his survey of the evils of capitalism, but I will agree with him that anyone alive to the traditions and greatness of Britain must ponder seriously the consequences of our joining the Community. They will be many. There will be economic consequences about which I hope to say little, because I am not sure that I fully understand them—nor I think can even the experts really forecast the future with any meaningful accuracy. I would only say that I regard the cost of living argument as irrelevant as well as unworthy, but I am not enamoured of the artificial subsidisation of the Common Agricultural Policy, and one one must face the fact that a heavy price may be called for in terms of financial contribution and balance-of-payments burden.

The political consequences are even more difficult to foresee, but, despite the explanations we have had during this debate, there is legitimate concern on the question of sovereignty and on the fact that our signature to the Treaty, if and when it is made, will be irrevocable. Over a period there will undoubtedly be major changes in our relations with Commonwealth countries, both in patterns of trade and in political association. Finally, I suspect that if we succeed in our application there will ultimately be something of a social revolution; and here is one point of sympathy which I feel with something which the noble Lord, Lord Soper, said yesterday: that the development runs the risk of accelerating all those aspects of modern life, of this modern machine age, which I most dislike—bigness in organisation leading to anonymity of government, great conurbations, everything done in concrete for speed and efficiency, everything done for the mass and not for the individual.

But, having said that, perhaps I could now say how glad I am to follow the noble Lord, Lord Brockway, because unlike most of the other speakers in this debate my words can have a spurious air of novelty because I am, I must confess, an ardent supporter of the application and strongly hope that it will succeed. In the first place, to deal with the last point that I made, surely it is a phantasy to think that we can preserve the elegance of a past age just by standing still. There is, I believe, an alternative to joining the Community, but only one. I do not myself believe that we could hope for very long just to"go it alone ". I believe that the only real alternative to joining the Community is to become in effect, in one form or another a satellite of the United States. Great as is my affection for that country and strong as is my hope that we shall be able to preserve what the Prime Minister happily termed our natural relationship with that great country, this is an alternative that I, and many others, would not relish. Therefore I reach the conclusion that the Community offers the most favourable prospect of our being able to preserve what is best in our way of life.

As to the Commonwealth, I must state quite firmly that I would never have supported our joining the Community unless we had been able to achieve what I should regard as honourable agreements with New Zealand and with the sugar islands. Frankly—and I had a great deal to do with this at one time—I never dared hope that I should live to see the day when the New Zealand Government would positively welcome the arrangements that we have achieved. I do not think that many others had such a hope. But a miracle has occurred; we have lived to see the day. And so the most awkward problem on the economic side, that of relations with the Commonwealth countries, has been overcome. For the rest, what I had in mind to say was ably put by a former colleague of mine, Lord Radcliffe-Maud, and I need only say that I am satisfied that the Commonwealth as a whole stands to gain on balance, both in trading opportunities and in investment prospects (and this touches on a point made by the noble Lord, Lord Brockway, just now) for the developing world with the Community as a whole. It also stands to gain because Britain's increased strength and ability to help will be of enormous benefit to the Commonwealth. I agree with what the noble Lord, Lord McFadzean, said yesterday in his admirable maiden speech.

However, my Lords, there are two Commonwealth countries that will, or may, face some hardship, particularly in certain sensitive areas. They are Canada and Australia. It is regrettable that any difficulty of this sort should arise, but this was always foreseen and it has been discounted in advance over years. In any case, time has been given for adjustments and transitional periods have been arranged. Canada and Australia are both thriving countries with a thrusting economy and a growing industrial base. Both have already diverted a considerable amount of trade from Britain. I must say quite frankly, perhaps even brutally, to my many Canadian and Australian friends that in the end I think it is the economics of Canada and Australia which will have to take care of any affected pockets in their economies, and I am quite sure that their economies are well able to do so.

I have often discussed this subject with my many friends in both countries, and in general it is my impression that their imagination has been caught by the grandness of the design of Britain joining Europe. They recognise the value to them of increased British prosperity as a result. There has been ready acceptance throughout of this point. Certain initial excitement was expressed recently in Australia, but I do not judge that that has been seriously widely shared. I certainly see no reason why these minor problems should affect relations as a whole with those two great and friendly countries.

Approaching the political prospects, looking into the future, is like peering into a glass darkly. Whatever may have been said in this debate about federation or the Community not being a federation, I think it is clear that we are committing ourselves to an association which is bound in course of time to have ever closer political links, and to some extent we shall be shedding some further bits of sovereignty, if I may put it that way. But, my Lords, we live in an interdependent world. We shall be influenced by the Community, whether we join it or not, and the notion of a splendid isolation for Britain is no longer tenable. Moreover, we live in a rapidly changing world. Other things will not stay the same, even if we should like to do so—other things, including our relations with other countries.

This brings me to the Commonwealth point again. I would not personally have subscribed to our entry if I had felt that British membership of the European Community was in any way incompatible with British membership of the Commonwealth of Nations, but I emphatically do not. Indeed, I think the wealth of our Commonwealth experience is one of the very considerable assets that we shall take with us on joining the Community. No doubt in the decades ahead our membership is bound to affect in some degree the nature of our association with other Commonwealth countries, but that association has been evolving and no doubt will constantly evolve. It, too, will change and adapt in the decades ahead. What will be important will be to show imagination and warmth in strengthening our ties of friendship with other Commonwealth countries, in developing the close links at professional and other levels and in extending the area of communication on the lines sketched out in what I thought was a remarkably thoughtful and sen- sitive speech by the noble Lord, Lord Burgh, yesterday, which was touched on later by the noble Lord, Lord Orr-Ewing. I am sure that this is the positive line we should take concerning the Commonwealth.

My Lords, for me the decisive moment in these discussions was when agreement was reached on New Zealand and on the sugar islands, because, to me, that seemed to prove conclusively that the Six, as they now are, positively wanted us in; that they were ready to understand our difficulties and were prepared to go far to meet them. I took this as a guarantee for the future, that the Community would show understanding and would want to be helpful over membership, and that from now on we should think not of "them" but of "us", because we shall be part of them. I believe that our membership of the Community will release a new stimulus to our lagging industry, as many distinguished persons in industry have been saying, and provide a new experience in partnership which need not cut out our old friends and which would give us our best chance to play our role in Europe, alike in association with the Commonwealth and alliance with the United States, and especially help us over the problems of East-West and North-South relationships, which have been touched on in greater depth by other speakers. For all this, the financial contribution seems to me to be a very small price to pay.

I have listened to a good deal of this debate. Much of it has been fascinating and in our history it has ranged from Zeus to Charlemagne. I should like to put some historical considerations in another form and ask: suppose we had been there in A.D. 43 and were asked by a Gallup poll whether we were in favour of the Roman invasion, or, in 1066, whether we were in favour of the Norman Conquest in advance, or, in 1688, in favour of the arrival of a Dutch King. Yet these three events in turn brought us a great deal of our culture, State development and political democracy. We also have received our language and religion from the Continent. Scotland has been quoted, and that again seems to me a happy augury. For two and a half centuries the Scots have lost nothing in opportunity and nothing of their own special national genius. So may it be with Europe. May we both share its greatness and preserve our traditions.

There is one final thought I should like to put to your Lordships. I hope that when—and I say "when" because I think it is much more likely than "if", now—we enter Europe, we should do so with enthusiasm and as a result of the national will as a whole, without any sense of sordid commercial bargaining and without Party rancour. The other day I noticed a comment which Mr. George Bell reproduced in The Times under the heading of the agonies through which Britain was going. I think this is the wrong atmosphere. I do not see that there is any agony, that there should be any agony and that there need be any agony. I like to think that we are accepting a challenge. I am not at all happy about some of the other analogies that are being drawn—for example, of a drowning man clutching at a straw. For goodness sake!, if we are going to do it, let us do it because we believe it is right and because it will lead on to greatness. We are not doing it as a last desperate measure. I hope that we shall accept the challenge in comradeship with our new partners, with confidence and with cheerfulness.

9.25 p.m.

LORD MACPHERSON OF DRUMOCHTER

My Lords, I should like to declare that my business interests are the importation and distribution of food from Commonwealth countries. Naturally, I started my thinking from the anti-Common Market standpoint. During the past seven years I have visited, and led trade missions to, most of the Commonwealth and South Africa. I have seen the United Kingdom share in all these markets steadily declining, and the growing tendency of protection for local industries by tariffs and duties. This firsthand knowledge has made me think again. In the past, we had an Empire, followed by the formation of the Commonwealth. This worked satisfactorily under the umbrella of preferences. The United Kingdom imported raw materials and agricultural produce, and in return exported manufactured goods. But now most of the Commonwealth countries wish to manufacture their own goods, and we have been forced to find other markets. For instance, 20 years ago we sent to these countries nearly 40 per cent. of our total exports; now under 20 per cent. is shipped to the old Commonwealth. With respect to the noble Lord, Lord Beswick, the figure for the Commonwealth trade to-day is under 20 per cent., and not, as he stated, 30 per cent.

LORD BESWICK

If the noble Lord will allow me to interrupt, I should like to correct him. The figure for the Commonwealth preference area, to which I was referring, and which is the relevant area in this argument, is 30.8 per cent. this year as against 30.4 per cent. last year.

LORD MACPHERSON OF DRUMOCHTER

Knowing that the noble Lord would probably take me up on this point, I telephoned the Commonwealth Secretariat just before I came into the Chamber this afternoon, and I have had my figure confirmed, that the total exports to the Commonwealth are under 20 per cent. to-day.

LORD BESWICK

This is one of the tricks of the pro-Marketeers. They tend to compare Commonwealth trade to-day with Commonwealth trade years ago, when it included South Africa, Burma and Ireland. If you take the same area to-day—the Commonwealth preference area, which I was quoting—it is just over 30 per cent., and it has remained constant.

LORD MACPHERSON OF DRUMOCHTER

Time is getting on, my Lords, and it would not be right for me to pursue this further; but maybe we can talk about it at some other time. In order to survive as a great trading nation, we cannot sit idly by: we must find alternative markets for our exports, and to-day our biggest single outlet is the E.E.C. But each year the tariffs into Europe are being steadily increased, and we certainly cannot contemplate a further shrinking of our Commonwealth trade and, at the same time, being squeezed out of the European market.

The terms that we have secured for the sugar producing countries in the Caribbean—an area where I have many responsibilities—and for the dairy industry of New Zealand are both fair and realistic, and are considered so by the countries concerned. I have some 20 near relatives in New Zealand, and am deeply involved in its meat, wool and dairy produce. I assure your Lordships that I would not be party to any arrangement that was unrealistic for that fair land. To go further, I believe that New Zealand may in the long run even be better off once we have joined the E.E.C.

Great Britain can only hold her position in the world, and continue to prosper and fulfil her obligations overseas, provided she can trade successfully. After a careful study the commercial world, led by the London Chamber of Commerce and the C.B.I., have come firmly to the conclusion that our association with the E.E.C. is not only the only solution, but a great opportunity for us to move forward.

My Lords, it is difficult to make a contribution to this debate, but little has been said about food prices and the effect on the housewives' budget. The approximate rise in prices over the past 12 months has been more than 10 per cent.—and we are no; in the Common Market. This has been caused by increases in world market prices and by the wages explosion which burst into being at the close of the last Government's term of office. The most popular food commodity under scrutiny to-day is butter. The price of New Zealand bulk butter has risen from £300 per ton last December to £460 per ton to-day. This is nothing to do with the Conservative Government, and the New Zealand dairy producer must not be blamed. Over these months there has been a world shortage of butter. I tried to warn the House of the position in my Question on this subject on November 12 of last year. Unfortunately my concern was riot taken very seriously. It is said that if we join the E.E.C. butter will cost more. This is misleading. We have agreed with New Zealand, our main supplier, on a basis for prices and quantities over the next five years. The overall cost of our butter will depend on supply and demand, and this will be the case whether we join the E.E.C. or not.

I would now like to turn to bread. As with most foods, it is difficult to compare United Kingdom retail prices with those ruling on the Continent, as generally speaking the quality of our manufactured bread is not as high as most Continental breads, but to give your Lordships some ideas on bread prices I quote: U.K. white manufactured bread 7 new pence per pound; Germany, white, 12½ new pence per pound, brown, 10¾ new pence per pound; France, Paris 7½ new pence, in the country 7 new pence; both Holland and Italy 6½ new pence. To sum up, the United Kingdom price is approximately the same as that on the Continent. Milk is not now subject to the Government's support price scheme and our entry should not adversely affect the retail price. In the Netherlands, a large producer, the price is 68 cents per litre, equal to 4½ new pence per pint, as against the United Kingdom price of 5 new pence.

LORD BESWICK

As the noble Lord is such an expert and has given the comparative price of milk and bread in the Continental countries, would he be good enough to give the price of butter in France and Germany?

LORD MACPHERSON OF DRUMOCHTER

Yes, my Lords, the price of butter is around 8s. per pound in Paris to-day, and I am sorry to predict that within the next 12 months the price of butter in this country will I think he something similar. As the noble Lord knows, we have got very advantageous terms for the supply of our butter from New Zealand but these prices, as I have already explained, have risen by 50 per cent. from last December.

LORD BESWICK

Would the noble Lord make it quite clear that we are now going to take only 70 per cent. instead of the 100 per cent. of what is offering from New Zealand; and although the price has gone up this year, which is an exceptional year, it still remains true that £460 per ton for New Zealand butter compares with over £700 for German butter?

LORD MACPHERSON or DRUMOCHTER

My Lords, it is 71 per cent., if I remember correctly. The tonnage works out at something like 128,000 tons against this year's importation of 156,000 tons.

Returning now, if I may, to milk, this is very much bound up with the future of the Milk Marketing Board—which has not so far been resolved—when we join the Community. On entry into Europe egg prices in this country should drop, as we shall have the benefit of supplies from the Continent in times of shortage without the encumbrance of to-day's levies.

The position with regard to meat is not easy to summarise, but I will set it out as follows. Lamb: there is no Common Market sheep meat policy at present, but it is more or less accepted that there will be a tariff of 20 per cent. at the end of the transitional period. At this time it will mean an increase of 10 per cent. as the present levy system (which will go) accounts for the other 10 per cent. It does not necessarily follow that the prices will be increased at this stage by the 10 per cent., or one new penny. For instance, the levy of one old penny, with stage increases which commenced on July 1 this year has been absorbed, and to-day the Market prices are below those at June 30. The price is governed by the demand.

With pork we are virtually self-sufficient because of the steady increase in our production. I do not foresee any substantial increase in prices after we join the Community. Last week loins of pork were definitely cheaper in London than in Paris. Home production of beef is steadily increasing. Because of different cuts it is difficult to give comparisons, but boneless sirloin in Paris retailed last week at around 88p per pound, against a current average price for English sirloin of about 82½p per pound. It must be borne in mind that there are great variants between shops, and to obtain these prices I have averaged them from 10 butchers' shops in London and the same number in Paris, and converted beef on bone to boneless.

In bacon, there will be no change with our main suppliers, Denmark and Ireland, who should continue to ship as at present. Holland will no longer have to pay the current 10 per cent. duty, and will undoubtedly recommence supplying Wiltshire sides. On the other hand, no one knows the attitude of Poland, a large supplier, who will most probably have to pay an increased duty. However, as I understand the position, no duty rate has been fixed for non-E.E.C. suppliers. On balance, my view is that there should not be a very great swing one way or the other in bacon prices. I believe it is common knowledge that fruit and vegetables are cheaper in the E.E.C., and will be so for the United Kingdom housewife after we join.

The retail prices shown in the 1970 Command Paper 4289, Table 7, are already out of date, with a considerable narrowing of the differences. As previously stated, it is difficult to compare United Kingdom food prices with those in Europe, as our eating habits are different. For instance, we are the only outlet for bacon. We use different meat cuts, and our qualities are, in some cases, not the same. But with butter, bread, milk, eggs, meat, bacon, fruit and vegetables—which is a fair selection of the British diet—most will not be materially affected by our joining the Market based on today's price levels and trends.

I therefore urge you, my Lords, not to be misled by wild statements about food prices. This is a problem that we are having to face to-day, regardless of our entry. I have tried to tackle some of the arguments against joining the E.E.C., and sincerely hope that every one of your Lordships will think most carefully about this issue and not allow sentiment, or political motives, to sway your judgment.

9.42 p.m.

LORD SAINSBURY

My Lords, as someone who has spent all his business life in retailing may I, too, be allowed to say a few words about the standard of living, food prices, and our proposed entry into the European Economic Community? I have always attached the greatest importance to keeping the cost of our food as low as possible, and to taking full advantage of world market prices. That is why I have always supported our system of deficiency payments, and why I consider the E.E.C.'s agricultural policy, which insulates the domestic market and raises the cost of the food to the consumer, as one of the Common Market's least attractive features. However, it is important to look at this matter in perspective.

It is of no great benefit to the consumer to have low food prices if, at the same time, wages and earnings are also low. Unfortunately, it is a fact that over the past ten years or so our average real earnings have grown relatively slowly, with the result that they are now considerably below those in five of the six E.E.C. countries. I am not suggesting that entry into the Common Market would automatically lead to a much faster growth in earnings than in the past. However, in common with the majority of industry, I believe that a rapidly growing and highly competitive domestic market of over 250 million people will provide us with greater opportunities for growth than one of 55 million people. The experience of the E.E.C. countries shows that they have derived considerable benefits in the field of exports, investment efficiency, et cetera, from the formation of the Common Market, and since there is no conclusive evidence to the contrary I do not accept that the so-called dynamic effects of our entry can be discounted.

So far as the consumer is concerned, an acceleration in the rate of our economic growth could lead to a faster increase in the standard of living than in the past, in spite of the inevitable rise in food prices. As in so many areas of economics, the exact figures are difficult, if not impossible, to calculate. However, even if the Government's estimate of a 2½ per cent. annual rise in food prices turns out to be over-optimistic, the overall effect on the cost of living is unlikely to be above 1 per cent. a year, especially in view of the fact that as industrial tariffs are reduced the price of many imported products should see a decline. Even if one could not expect a faster rate of increase in earnings, a rise of less than 1 per cent. in the cost of living is relatively insignificant when set against the inflation we have experienced in the last five years.

Therefore, in my opinion it would not be a strong enough reason to reject entry. But—and this is in my view the important point—there are good reasons for expecting a faster growth in earnings, and even a relative small improvement in this field would be sufficient more than to offset the adverse price effects of our entry. This is why I find it hard to understand the argument that joining the E.E.C. would be tantamount to an attack on our living standards. As a Socialist, I care about the living standards of our people, as I hope all do in this House; and I believe that membership of the Common Market will be beneficial in the long term. But when talking about food prices, it is also important to consider future trends in the world markets. I accept that as a development of high-yield strains, or the Green Revolution, as it has come to be called, grain supplies are likely to become more plentiful and prices are likely to weaken. This could widen the gap between world and E.E.C. grain prices, unless of course the enlarged Community, in which we will have a considerable influence, decides to revise its prices downwards.

However, some well-known anti-Marketeers seem to forget that one cannot generalise about food prices, and what is true of grain is not necessarily true of other basic commodities. Certainly so far as dairy products and meat are concerned, the indications are that the era of low prices is over. There are several reasons for this. In New Zealand and Denmark dairy farmers are switching to beef; and as we all know, in the Common Market the butter surplus has virtually melted away. In view of this, prices are expected to remain firm, as the noble Lord, Lord Macpherson of Drumochter, has already indicated, and the gap between E.E.C. prices and world prices is likely to narrow even further.

This is also true of meat. A rise in living standards has pushed up meat consumption, as a result of which there is now a world shortage of meat. Again, there are no grounds for expecting that the position will change significantly in the foreseeable future, and it may not be very long before home meat prices reach Common Market levels. Therefore, the argument that we shall probably have to pay more for many of our basic foods, whether we enter Europe or not, is a strong one. It is not just good enough to dismiss it as the invention of the so-called "Euro-fanatics", simply on the basis of what is happening to grain. So on balance I do not think there is very much in the anti-Marketeers' arguments about prices and living standards.

What about the other major considerations, such as the overall balance of payments and the position of New Zealand and the sugar producing countries? I accept the assertion contained in the White Paper that the net effect on our payments balance cannot be calculated with any degree of accuracy, and I believe that any attempt to do so might prove fairly misleading. I also believe that the terms negotiated for New Zealand and the sugar producers are fair, and even the most ardent anti-Marketeers find it difficult to argue otherwise, since they have been accepted as such by the Government of New Zealand and the great majority of the sugar producing countries.

But some people claim that, even if the terms are acceptable, we cannot go in as long as our economy is as weak as it is to-day. One answer to that objection that has been frequently mentioned during the course of our debate is that if the present opportunity of joining is not taken up it will probably not recur again for a very long time. Secondly, in my view it is a mistake to attach too great an importance to our current economic situation, since the full effect of our membership will not be felt before the end of the transitional period in 1977.

So far I have concentrated on some of the economic aspects of the great debate, and in conclusion I should like to say a few words about the political implications. I believe that the White Paper is very convincing on this score, and I accept that, although economic considerations are of the greatest importance, the decision to enter or to stay outside the Community must, in the final analysis, be taken on political grounds. The Six have shown that in spite of their inevitable differences it is possible for European countries to work together in constructive co-operation, something that was unthinkable in 1939. The Six believe that Britain has an important role to play in this historic development, and by saying, "No", we should not only damage the unity and prospects of Western Europe, but would subject ourselves to a continuing loss of influence and decline in our relative prosperity.

9.55 p.m.

LORD BOURNE

My Lords, if ever a decision ought to be taken on bipartisan grounds, I think this is it. I do not propose to deal with the terms themselves, because they have been covered by experts who have described them in great detail. The noble Lord, Lord Sainsbury, himself, having described the terms in some detail, then went on to say that the political considerations in the end ought to be overriding, and it is those with which I want to deal. After all, the terms are really the price we pay and as the noble Lord, Lord Crowther, said, they do not matter terribly. Relatively they do not matter. In five or six years they will be over and we shall be full members of the Treaty of Rome.

I wanted to raise three points, quite quickly, about first of all the political side, then sovereignty, and lastly defence. On the political side, I remember so well Sir Cecil Weir, who was Economic Commissioner in Germany to the noble Lord, Lord Robertson of Oakridge, saying that we ought to have been in the Treaty of Rome right from the start and this discussion should not be taking place. Although I was not able to be here yesterday, I thought the noble Lord the Secretary of State for Defence put it very well when he said: We in Britain, I believe, can add political stability to the partnership of our European friends", and he went on to say that he thought that we in this country could add an outward looking approach. I find it very difficult to believe that members of the Council or members of the Commission, who meet regularly and frequently in Brussels, coupled with the many international civil servants who work with them, can argue about tariffs and the price of this or that and then go outside and fight each other. I cannot help feeling that the European Economic Community is a marvellous safeguard to ensure that there is no more war in Western Europe. The noble Lord, Lord Blake, in his maiden speech said much the same thing, and he was quoting from his historical experience when he said that Britain ought to enhance the stabilising influences in Europe. That is exactly the point I am making. It is so much more important, to my mind, than the price of butter or meat.

Again, the noble Lord, Lord Chalfont, who was intimately connected with these negotiations, said that the real advantage was political, and that the alternative, if we do not join, will be a continuation of fragmented European States clinging to their illusions of grandeur. I do not personally think we ought to be included in those. So I feel the political arguments are very strong. I would say a word about sovereignty. As the noble Lord, Lord George-Brown, said yesterday, this never was a runner. Every time we sign a treaty we sign away a piece of our sovereignty in exchange for a position of advantage with our allies. We have done that in the United Nations and in NATO and in the Treaty of Vienna. We have done it many times. We always give up a piece of our sovereignty. I was not, unfortunately, able to hear the noble and learned Lord on the Woolsack explain this in legal detail, but that is the way I look at it. I look forward to the day when Europe becomes more a political whole. It is a long way off. I am afraid it is a very long business to get there, but I hope that we eventually achieve it.

Lastly, defence. Although the noble Lord, Lord Carrington, said yesterday that there would be no immediate impact on defence—and I am sure he is right when he says "immediate"—in the long term the Six, and we perhaps hope that they will become Ten, if successful will provide a stronger base for their security. In other words, if they prosper they will be able to afford more defence. Seeing that the United States is likely to pull out conventional forces from Europe before very long, Europe must inevitably provide more forces, and this will cost more. I cannot help feeling that the European Economic Community should be better able to afford it, if it is successful. We now live in a world of big units, whether we like it or not. As the noble Lord Lord Gladwyn, said, isolation in the modern age makes absolutely no sense. I am sure he is right. For these reasons, I welcome our application for entry to the E.E.C., and I sincerely hope that we do not miss this historic opportunity.

10.2 p.m.

LORD BELHAVEN AND STENTON

My Lords, I am intervening very briefly in this debate, because in one of the many pamphlets and broadsheets and other pieces of paper which have been distributed round the country in the last two or three weeks on the subject of the E.E.C. a speech of one of my predecessors—I have to call him that because he was not an ancestor, but it is too complicated for me to explain to your Lordships now—was mentioned. This particular pamphlet was issued by the Conservative Party, so perhaps noble Lords on the other side of the House do not know what was said in it. However, I did feel that I could not let it pass even after having read the speech of my noble friend Lord Polwarth, who spoke yesterday roughly on the lines on which I am going to speak to-day.

Some 264 years ago this predecessor of mine was one of the principal opponents in the Scottish Parliament of the Union with England. After the Union in 1707 he did a year's "stretch" in the Tower for his pains. Times change, and I feel that the noble Lord, Lord Wynne-Jones, and the noble Lord, Lord Shin-well, will not do a similar "stretch" in the Bastille, or wherever it is the French put the gentlemen who do not agree with the E.E.C. terms being accepted. The point I wish to make in relation to the Union of Scotland and England is that that treaty, unlike the Treaty of Rome, did involve a total abdication of sovereignty for the smaller country. Even the provisions of the treaty itself could be negatived by the Parliament of Great Britain and some subsequently were. This act by Scotland 264 years ago was a far greater act of faith than anything that Great Britain is proposing to do to-day.

I feel that my predecessor was, in many ways, justified in his opposition to this Union; but I think that if, by some magic, he were brought to life again to-day, from what I have read of him he was a big enough man to be able to admit that he had been wrong. I think he would have done that, because I do not myself doubt that the results of the Treaty of Union have been beneficial. I also do not doubt that, had our predecessors failed to unite this Island, our history over the last 264 years would have been very grim indeed. As a Scotsman, I feel I can say in this Parliament that if Great Britain does not take up a small part of the challenge that Scotland took up 260 years ago, I shall be very disappointed.

In 1707, this Island was too small to hold two Kingdoms and, to pursue this parallel, it is quite clear that in 1971 this Island is too small to go on alone. Many noble Lords, including the noble and learned Lord the Lord Chancellor, have said that the sovereignty argument is really a non-issue, and so I believe it to be. For even in the case of the incorporating Union between Scotland and England, I do not think it is in any doubt that, if the majority of the people in either country decided that they wished to end the arrangement, which would be a most unfortunate decision, then in this democratic age no obstacle would be put in their way.

I trust that your Lordships will bear with me for another two minutes if I follow the parallel of the Union of 1707 and the present Market treaties a little further. The parallel is not exact, but then no historical parallels are. I would further suggest, going back to 1707, that this Union, this marriage as one might call it, between the two nations was by no means a love match. Centuries of war had divided the two peoples. It is difficult to-day to realise the bitter ancestral hatred which the two nations then had for each other. The population of Scotland, at any rate, was by an enormous majority opposed to the Union which they saw as a surrender to the"old enemy ", which is what they called England. How much the position has changed in 260 years! A similar antipathy to the Scots existed in England. It was a marriage of convenience if ever there was one.

In the matter of the E.E.C., I see no reason why there should be any question of love entering into the arrangement. We do not have to love the Germans or the French to realise that it might be better if we worked together, rather than that we should go on as we did in the past and start another orgy of mutual slaughter in a few years' time. I feel that some of the people—I do not say noble Lords—who have opposed this move must be thinking along those lines, and would really like another orgy of mutual slaughter in a few years' time to give them a bit of excitement. But I think we can possibly get our excitement in some other way.

10.3 p.m.

THE EARL OF BUCKINGHAMSHIRE

My Lords, having listened to the speeches of many noble Lords during the two days of this most important debate, I shall endeavour to give my candid and personal views on the White Paper and will be as brief as possible. There is no more information in it than there was in the last White Paper of 1970. My attention was drawn to a sentence which stated that the effect on our trade cannot be quantified. Therefore the economic advantages, if there are any, cannot be shown in a balance sheet or in a profit and loss account. I therefore wonder whether this is a shot in the dark. The White Paper states that the possible benefit could be substantial, but does not come forth with any credible evidence to prove it. It also states that the Six have done better than we have, and that by joining them we shall therefore do better. With this I cannot agree. Some of the main reasons why they have done better than we have will not apply in our case if we join.

We shall not have the driving force of post-war reconstruction as they had, nor shall we have the great surplus of agricultural labour to push into industry which so increased their growth rate. We have no spare farm workers. Another reason why they have done better is that the Six had high tariffs between themselves when they started, and by reducing those tariffs to nil they have stimulated trade and growth between themselves. But the tariffs between Britain and the Common Market are low, so their abolition will not have the same stimulating effect. Therefore, if we do not get the hoped for growth rate we shall be in very serious trouble, with large payments to be made every year for the privilege of belonging to the Common Market, which payments will, I suppose, go mainly to subsidising inefficient peasant farmers in the Common Market. We shall be condemned to a rise of 16 per cent. or more in food prices in five or six years, and that is on top of the ordinary rises. What about the value-added tax if we move over to the Common Market? As I see it, this tax will probably be placed on food because we shall have to harmonise in this respect with the Common Market countries. The result will be an additional burden on the family budget, and more so on the poorer sections of the community. The Government promise to make this up by increasing benefits, but I have yet to see any Government of any Party which ever gives enough. This increase in food prices is certain to have a dynamic effect on prices and wages, and ultimately, of course, on the price at which we sell our exports.

THE EARL OF PERTH

My Lords, I do not want to interrupt the noble Earl except on one point. He said that a value-added tax would probably be levied on food. I think I am right in saying that this is specifically excluded.

THE EARL OF BUCKINGHAMSHIRE

I thank the noble Earl. As I was saying, this increase in food prices is certain to have a dynamic effect on prices and wages, and ultimately, of course, on the price at which we sell our exports. There is only one conclusion to come to, in my view and in that of many others in this country, as a result of our negotiations and of the White Paper, and that is that the real issue is not an economic one but is political. Noble Lords who are pro-Marketeers (and that certainly does not include myself, as your Lordships will have gathered, at any rate, from my speech) wish to see a united Europe with one voice to rival America and Russia as an economic Power, which it can only do if, like them, it has one Government—and I accept this as a long-term aim of the Europeans. There would be one European Government with European Ministers, and a democratically elected European Parliament to control the Government, presided over by a European President who will be assisted by a European civil service—and this already exists. That, my Lords, is the logic of it all.

What would be the outcome of all this? Britain would then be a State or a province in a federal country called Europe. Power over a great range of affairs would ultimately be shifted from Westminster to Europe—foreign affairs, monetary and economic matters, taxation, agriculture, defence, social services and so on. All the things I have mentioned are so vital for the future of our country that if we sign the Treaty of Rome and the process of integration starts there will be no looking back. So my personal view is that the vital question of where we are going politically should be settled before we join. My Lords, we are the most stable nation in Western Europe. Should we be jubilant and happy to merge our sovereignty with the countries of the Six? To this question I would say,"No ". Take Italy, for example. The second largest Party is the Communist Party, and now the Fascist Party is back in the running. If either of these Parties wins it will be a nightmare having to integrate with such doctrines.

The White Paper, referring to defence, says that Europe must look after itself more than it does to-day. When the noble Baroness winds up perhaps she will state whether this is a signal for the withdrawal of Americans from Europe, which in my view would lead to a highly dangerous military situation and consequently an even greater expenditure by Britain on its Armed Forces. Would this mean conscription such as the Common Market countries have? I cannot agree with the safeguards given to Australia and New Zealand in the White Paper. This has been dealt with by other expert noble Lords so I will not enlarge on it except to say that this is a case of "Take it or leave it". The plain answer is that they will leave us and will trade elsewhere. Men of the Anzacs did not give their lives by the hundred thousand for the price of bread, the amount of the pay packet, the ratios of sugar or butter, fishing limits, the role of sterling or any of the matters that have been the subject of these negotiations. Finally, I endorse and support those who advocate a referendum—which has been brushed aside by the Government. This seems to me to show a complete lack of confidence in the people of this country, who must not be beguiled and caused to betray their past and to obliterate their future.

10.16 p.m.

THE EARL OF LAUDERDALE

My Lords, nobody can have the good fortune to follow a "dinkum Aussie" such as is the noble Earl, Lord Buckinghamshire, without being immediately stimulated to some degree by the flair of Anzac zest which he spreads about him. I find it a lonely matter to be more in tune with the minority in this House than with what is obviously the overwhelming feeling; but amid all the power of words which have surged about this Chamber and after a public relations exercise well code-named, in some quarters, "Operation over-kill", I cannot help recalling Ibsen's words, "Never put on your best trousers when you go out to fight for freedom".

The case may be, and has been, well stated to be one of accession to the European consort. It can be stated as an example of an opportunity for Britain to exercise her traditional expertise in the balance of power. It may also be presented as a case of our country becoming so obsessed with Continental power blocs and balances as to incline us to turn our backs on the maritime outlook and become landlubbers rather than seafarers. It can be presented as one of inviting Britain to commit her destiny to a new sort of institutional imperialism bereft of Parliamentary control and governed by a Council which equates Britain with three nation-states of which two have a State and Parliamentary experience one-tenth of our own. The accountability of power is surely one of the most important questions posed by the technological society.

I accept that, diplomatically and politically, it would be difficult now to withdraw without loss of credibility; although with great respect to my noble and learned friend the Lord Chancellor I am bound to say that I do not follow the argument as unfolded by him this afternoon that assent to the negotiations must in honour mean assent to their results.

THE LORD CHANCELLOR

My Lords, I never said that. I said that nobody who had assented to the negotiations could say with the smallest hope of credibility now that he was opposed in principle to accession. I also said that the results of the negotiations were accept- able. But I did not say that one followed from the other. I only said that both propositions were true.

THE EARL OF LAUDERDALE

My Lords, I am much obliged to my noble and learned friend for repeating what he said in language which I have now got more clearly than at the time when he spoke. I apologise for misrepresenting him and I am much obliged to him for instructing us.

I accept that there is a Common Market case in terms of economics. The very fact that E.E.C. intra-trade has multiplied not by four but by six over ten years or so speaks for itself, and again that the E.E.C. investment growth rate from 1958 to 1969 was several percentage points higher than our own. But in the circumstances I beg leave to take an interrogative stance, because I wonder whether noble Lords are fully aware that the Common Market itself only just balances its overseas trade and payments and only just has a favourable balance. I am quoting figures widely known, whether from Board of Trade sources or the O.E.C.D.

It is perhaps not widely known to noble Lords that the E.E.C. external trade grew only two and a half times during the period in question, while ours with them grew twice. The Common Market share of world manufactures shrank—and I am quoting Board of Trade figures—and the E.E.C. investment growth rate has actually been slowing down. I quote a Parliamentary Reply printed in Hansard of another place on June 29, Written Answers, col. 74. This slowing down cannot be attributed just to relative satiety in the E.E.C. after several years of sensational advance, because over the decade, the graph is pretty similar to that for the United Kingdom. It may not be generally known that it is countries outside the E.E.C.,"other O.E.C.D. Europe ", as it is sometimes designated, whose investment growth rate is actually accelerating at the present time, while the E.E.C. investment growth rate is slowing down as I have just said. My Lords, these are figures and percentages which have some bearing on the extensive argument that has been used.

Then we have the argument about the enormous new home market that is to be at our disposal, this being the consequence of a reduction of tariffs. I take leave to quote the Financial Times of July 23: …the rise in the prices of British exports during the past 12 months alone has, on average, increased their cost to E.E.C. buyers in greater degree than the complete elimination by one stroke of present tariffs would reduce it. The Financial Times goes on: …the net liberalisation of British trade achieved by moving into the E.E.C. would be very small beer indeed by comparison with that which has resulted in the past ten to twenty years from the extensive dismantling of tariffs, quota restrictions, exchange controls and other non-tariff barriers that has been taking place on a world-wide scale. I draw attention to that quotation because it surely throws into slightly different relief the commonly accepted argument that we now have the choice for or against a vast new home market.

This leads me to the inhibitions which are imposed by inflation and the narrowness and recent uncertainty of our balance of payments position. Since our inflation rate is already above the E.E.C. average, exchange rate rigidity could have a dampening effect on the demand for British goods, and so we could find ourselves paying our entry costs by further deflation and even unemployment. In turn this could mean emigration, of both brawn and brain, of our people attracted to West Germany and the Netherlands joining the flow of unemployed Greeks, Yugoslavs, Spaniards and Italians like geese flying South. We might have to make a choice either to resort to some exchange adjustment or we could face the sort of consequences which followed our return to the gold standard in 1925.

I took care before this debate began to write to my noble friend the Leader of the House to give him a list of some questions I wanted to ask on the Floor of the House in the hope that one could have a public answer to them. The first is to ask whether we are bound by any assurance to any of the Six that the sterling exchange rate will not be allowed to move from its present parity save within very narrow limits. Are we bound by any specific assurance on that to any of the Six?

I come to the question, following the balance of payments, of our Budget subscription. The White Paper, which was described as "obscure" by a former Chairman of the Tory Party speaking in another place, assumes that our net contribution by 1977 will not exceed £200 million a year provided the budget does not rise meantime more than £50 million per annum. So I come to my second question, of which I have given advance notice. What measures of control exist lb safeguard us against the Council of Ministers approving any undue rise in the E.E.C. budget? Is this a point worthy of our exercise of the veto?

Now we come to the statement in paragraph 29 of the White Paper that there is to be no erosion in essential sovereignty. Here I am sure the noble and learned Lord the Lord Chancellor will correct me if I misquote him in the three quotations I took down during this afternoon. First of all: "the instruments of power rest in the hands of the members"; secondly: "power is the reality of sovereignty"; thirdly: "coercive powers are in the member States". I will immediately give way if the noble and learned Lord wishes, but in the light of those statements, may I put forward this question, of which I have also given advance notice. Would the British Parliament continue to enjoy unrestricted power to refuse to vote Supply, notably for onward transmission as Britain's contribution to the E.E.C. budget? It will be common knowledge that Parliament's right to withhold Supply has proved to be the key to Parliament's sovereign independence. Should we be forced to pay so many millions of pounds sterling per annum, without the possibility of question and without the possibility of refusing to vote it, what begins as a subscription would end up as a tribute.

This leads me to another question, of which I have likewise given advance notice. The monetary mechanism of the world certainly needs more cylinders. I have always thought that the crux of Britain's post-Commonwealth opportunity and role, and the best hope of bridging the gap between the Northern and Southern hemispheres, rests in the adaptation of the Sterling Area. I found a passage from that expert on the sterling area, Mr. Paul Einzig, of some interest in this regard. He wrote in February, 1967: Foreseeing the time when the U.S.A. can no longer bolster sterling, Britain is anxious to ensure its future support from Europe". He goes on to say: Overseas deposits in sterling—even if they do cause risk of short-term drain and strain—give support to the £, and the demand for sterling which inflow has generated has helped Britain considerably in expanding credit and exporting capital. It would be one thing to aim at a kind of neo-sterling E.E.C. area, in which the resources of all were pooled to back a reserve currency emanating from a power grouping that does perhaps half of the world's trade, operated by mutual exchange equalisation support of one another's currencies, somewhat in the fashion in which the dollar and franc and sterling supported one another mutually in the days before the last war. Such an area could make sense as a new source of liquidity. It could provide a cushion for developing countries against the huge variations in commodity prices of the past 10 years, like the 700 per cent. in sugar, 360 per cent. in cocoa, 270 per cent. in copper, 20 per cent. in lead and in rubber.

So I come to my next question, of which again I have given advance notice. What is our policy towards a substitute for the sterling area? What kind of substitute do we envisage? The noble and learned Lord's powerful presentation this afternoon, as I understood it, denied any real prospect of federation and seemed to put the case as if it were no more than a customs union plus decorative ornaments. If that indeed is the package we are offered, I would say "Well and good", and accept it almost wholeheartedly. But the White Paper, in paragraph 127, says that we are ready to play our full part in progress toward economic and monetary union. So I come to the next question, of which I have also given notice: Do we in our approach to the possibility of a monetary union of Europe envisage the creation of a common central bank of issue, and central supranational decisions regarding our money supply, the levels of employment, deflation and reflation, prices and incomes, national Budget and taxation? For these surely are the very stuff of Parliamentary life in a sovereign country. My Lords, to go for that kind of measure, if that is what is intended, could land our country in grave complications unless we enter such arrangements with countries that are ad idem with us on defence and hence on foreign policy.

So my sixth question, of which I have also given advance notice, is this: should we be prepared to go into a monetary union in advance of full agreement on defence and foreign policy? I ask that when we are considering this entry into Europe, on the back, as it were, of Herr Willy Brandt's ost-politik, which raises many eyebrows, and on the back of France's de facto withdrawal from co-operation with NATO.

My Lords, I admit that the Europe of E.E.C. wants us in. I admit that Eastern Europe, under the counter, wants us in. I admit that United States policy has been to push us in. I believe that we may be able to help the Commonwealth and the sterling area by going in. I believe that the geography of Continental growth would either push or suck us in. But I say: never let it be found that the language of Parliament has ceased to be the idiom of the public. And this is a step into the heart of a continent which can only be made viable if backed by the wholehearted resolution of the people at large.

This is not an end in itself but a beginning. Unless in approaching it we develop and press right policies about exchange parities, about what I should choose to call a neo-sterling area, to say nothing of developing our own port and transport infrastructure at home and bringing positive ideas for the development of E.E.C. policies on transport, fuel and energy and regional policy and allowing differential taxation; unless we do these things, I believe we could find ourselves puzzled and at a loss, once we are admitted to the new political liturgies of this temple of Continental power. No mere mechanism can do for our problems what we lack the will and vision to do for ourselves, to release and stir again the sap of the British oak. To re-quote the Financial Times of the same date, July 23, may I draw your Lordships' attention to this passage: If we are going to rely on entry into the E.E.C. to eliminate the problems that have resulted in our falling further and further behind in the economic advancement race, we are in for another unpleasant surprise. My Lords, the E.E.C. is no padded cell.

10.34 p.m.

LORD MACLEOD OF FUINARY

My Lords, I confess that I cannot honestly follow so many of your Lordships in regretting my incursion into this debate. So remarkably few people have spoken against the Common Market—I think the figure is still about ten to one—that it behoves those of us who are robustly against it not to hesitate to speak. I would declare an interest—well, not exactly an interest, but I would say, possibly for your interest, that the General Assembly of the Church of Scotland, which some people say is now the Parliament of Scotland, in May of this year had a remarkable debate about the Common Market, and out of 500 ministers and elders there was a majority of 73 who voted against our entry. I am bound to confess that since then the mood has somewhat changed in the country—or is it that the mood of the mass media which directs the thinking of the country has changed?—and there seem to be a remarkable number of noble Lords in this House who have changed also in this reiteration of the real reason why we may be going in: summarised, that how regrettable it all is, but Britain must enter or perish. My Lords, this is no basis on which a nation, if it has any greatness left, should decide the biggest issue presented to its people in the last 200 years.

There are still viable alternatives, but I am suggesting that if there were not viable alternatives, if we are still Great Britain, the decision simply to say" No "would be no more foolhardy than our great decision in 1939 to enter the last war sans Army, sans Allies, sans everything—and that was supposed to be a great hour. If I were to choose a text of what I am saying it might be chosen from the book of Sir Winston Churchill. He said, in another connection: Every time we must choose between Europe and the open sea we will choose the open sea". My purpose is to tell you what I find ordinary people everywhere seem to be saying. What is the anti-Market position among ordinary people—it is my duty to move among them all the time—and what are its chances? Its big chance is in the growing capacity of the generality of folk to know what is happening. In 1947 in a pamphlet called Design for Europe, of which the then Peter Thorneycroft was the principal author, now the noble Lord who addressed us yesterday, there was written: No Government depending on a democratic vote could possibly agree in advance to the sacrifices which any adequate plan must involve. The people must be led slowly and unconsciously into the abandonment of their traditional economic defences". Thanks to higher education, the majority of our people since 1947 are not now unconscious pawns. Despite the propaganda they are not yet impressed.

New Zealand has had comparably too much publicity. Perhaps because much time was given to it it became a show piece, but most are inclined to agree that we are seeing what the French Foreign Minister prophesied when he said: If Britain enters the Common Market with the Commonwealth the Common Market is finished; if Britain enters without the Commonwealth the Commonwealth is finished. After all, and over all, we cannot expect our former Colonies to get more favoured treatment than, say, France's former Colonies, known in the Treaty as "Associated States". We are grateful to the noble Lord, Lord Brockway, for what he said in this regard. There is plenty of evidence—if you want it, see the book The Pillage of the Third World—that the Association is simply a "neo-imperialist contract", the "have nots"continuing to supply the raw materials at cheap prices for industrialised processing by the "haves", for ever deepening the financial indebtedness of the Associated States and laying the foundations, it might be, for an ultimate race war.

Again, are the Market countries really being so successful? We were grateful to the noble Lord, Lord Walston, with his great agricultural knowledge and his intricate figures, which seem to show that success was everywhere. They were rather intricate, and when talking of the ordinary people of our land they are more likely to be affected by the kind of headings they see. I want to give some headings that appeared in The Times, the Financial Times and the Economist and in no other—that is papers of the Right—during the past few months. Here are the headlines that people read:

"E.E.C. declining rate of growth"; "German business" views; "State of the economy", with little confidence; "West Germany fears surge of bankruptcies"; "Italy enters period of stagnation"; "In France, rich get richer, poor get poorer"; "E.E.C. policy not helping farmers"; "Market's trade deteriorating"; "France wincing from inflation"; and "Chaos in Italy". These are headings that have appeared this year in such papers as I have mentioned.

I was glad when the noble Lord, Lord Annan, so honestly and charmingly reminded us that there are few economists who are as enthusiastic as many of the speeches we have heard here to-day. These are the headings which people read. Or, more fundamentally, it is worth perhaps looking up the December, 1970, report of the National Institue of Economic and Social Research, a very responsible body, on a much wider front. Reference to that shows that it is just not true that Britain's economy would grow more quickly if we went in. This report shows also that the Community's share in world trade is not a pace-setter, that the Community's share has been falling rather than going up. It shows that specialisation has not been increasing in the E.E.C. These are documents issued by a very responsible economic group.

Agriculturally, coming down to what the people talk about, what is to be made of the riots of the farmers in France and Belgium? Mr. Rippon refers to consistently high growth rates, but the growth rate includes the millions of tons of grain and sugar that are still bulging the stores to bursting point—and that includes the vast quantities of vegetables which have been ploughed back into the ground. These are part of the high growth rate. The Press reported last week, on July 23, that the Common Market Commission had announced quotas to stop the member countries being flooded with 200,000 tons of tomato products. These are the inefficient but politically powerful farmers on whose behalf we are being asked to pay out hundreds of millions of pounds from British resources. The people are not impressed.

Nor are they impressed by corruption. A Frankfurt periodical claims that:— Only fifty per cent. of all grain transactions are concluded because of actual requirements. The other fifty per cent. are fictitious paper transactions. For six months or more grain barges criss-cross European countries without discharging their cargoes, for no other purpose than to enable the exporters to collect export subsidies. The Customs authorities have discovered 140 loopholes in a maze of 3,000 Market regulations, which we are going to have to accept without debate. An increasing number of companies are employing "loophole spotters", who are euphemistically called "market researchers". They detect loopholes in the regulations from which the companies profit. It is not surprising, as a result, that the Common Market Agricultural Fund needed £250 million in the year 1966–67 but by June 1970 £1,500 million had already been drawn for that year. A Dutch weekly, Panorama, describes the situation in the Common Market as The greatest store shed and the most expensive centre in the world for the consumer. It adds: this hunt for subsidies has changed the Common Market into a madhouse of world commerce. We are not impressed. Nor can anyone be impressed by the enormous question mark over what it would all cost us, leaving out corruption, in justified dues. The quickest way is to confine this to a simple equation.

A British university lecturer has a friend who is a lecturer in the Sorbonne. It so happens that each has a similar-sized family, a similar-sized salary and a private income from private investments of similar size. The French lecturer asked his British friend "What proportion of your income goes in taxation?" And the Britisher replied, "Between a third and a half of my income goes in taxation. And what proportion of your income goes in taxation? "The Frenchman replied" About one-twelfth."Of course, we must remember that the Frenchman pays value added tax, but then we are going to pay value added tax as well. Is our income tax going to be adjusted, and will it be adjusted in our favour to anything like a similar proportion? If it is, are the British Government going to be advised to say so loud and clear? It would be the best news of the year.

We have dealt with what is not impressing these people. Let us now telegraphically record why we are filled with gloom. If we do not go in, we are told that "gloom awaits the future of our land." But the question can surely be asked in reply, "If we do go in, does not a worse gloom await our land?"

Major gloom number one: the end of our democratic liberty. Say what they like, it will be the end of our sovereignty, as most understand sovereignty. Articles 100, 101, and 189 make clear that by a qualified majority vote the Council can dictate absolutely to the British Government in certain fields. Will anyone deny that the moment we are in there will be written into our laws some 2,000 directives that already govern the Six in economic policy, without our Parliament being able to discuss a single one of them? Is that not a brake on democratic freedom? Or, if anyone wants it further spelt out, the official bulletin of the E.E.C. in April of this year reported that the Common Market Court of Justice in Brussels—the final court—ruled to: Uphold the Rome treaty provision that negotiations with non-member countries involving Community rules should be conducted by the Commission and concluded by the Council of Ministers". The Common Market Court of Justice decreed on March 31 this year that: Every time the Community adopted Common rules, in whatever form these might be, the member States were no longer entitled individually or collectively to contract obligations with non-member countries which affected these rules". So much for the easy phrase: "We can sign the Treaty first and negotiate afterwards". After Britain has agreed to the Treaty we shall be powerless to negotiate on sugar imports, New Zealand produce, or the decisions of the Court of Justice. We can argue, but the bureaucrats will decide.

Gloom number two: the end of our freedom in decisions about peace and war. Despite the Government's assertion that the Treaty of Rome is not concerned with defence, the White Paper of July carries these words in paragraph 7: The Government are convinced…that membership of the Communities will enhance the security of Western Europe". Again, in paragraph 11 it says: The countries of Western Europe felt the need for closer co-operation among themselves to re-establish collective defence arrangements against threats from outside. To be more specific, if I understand the Press correctly, at Sutton Coldfield on June 7 this year, the noble Lord, Lord Carrington, Britain's Defence Minister, stated: Britain's Common Market military alliance with Europe would be just as successful as her role in NATO for 22 years…in a few years it will be taken just as much for granted. I always assumed that NATO had to do with defence. Who is there who doubts that if we go in it will be taken just as much for granted that the present Prime Minister's Godkin Lecture at Harvard in 1967 has found fruition? The lecture was about the proposed establishment of a European group to exercise control over a "pooled Anglo-French nuclear strike force". If West Germany has access to this nuclear strike force it is not only the New Statesman that prophesies the danger of starting a new cold war and the end of the non-proliferation treaty. Willy Brandt has done wonders for the peace of Europe, but his majority is exceedingly small. If the previous German Coalition Government came to power, and Herr Strauss had his place in it, who will deny the danger of Dr. Adenauer being quoted again? Dr. Adenauer said: The creation of a Europe which is politically and economically strong is the only path leading to the recovery of Germany's eastern frontiers, which remains one of the essential goals of our activities. Incidentally, all 'the others in the Six have conscription. How far in the light of this, my second "looming gloom", should we be masters in our own House?

Finally—and your Lordships will be glad to hear "finally"—gloom number three is financial. We are grateful to the noble Lord, Lord Brockway for dealing with the financial situation with a wisdom and ability that I cannot command. Increasingly the impression is being given that the Common Market will be a viable unit in an economic and a monetary sense. It is only those who know most who know what nonsense this is. Economically and monetarily we are suffering a world sickness and not a European sickness. It was never summed up better than by Sir Winston Churchill: Who would have thought"— he asked— that it would be easier to produce the most necessary commodities than it is to find consumers for them? Who would have thought that cheap and abundant supplies of all the basic commodities should find the science and civilisation of the world unable to utilise them? He asked: Have all our triumphs of research and organisation bequeathed us only a new punishment, the curse of plenty? To solve that one"— Sir Winston Churchill went on— many attempts have been made from the extremes of Communism to the extremes of capitalism. All have failed. There is our malaise, and adding Britain's problems to those of Europe will ultimately not lessen but increase the burden of mankind. Anyway, it is sheer nonsense to give to the Electorate the vague impression that we are even attempting a monetary bastion.

How is it that in Brussels to-day there are permanently 20,000 American businessmen? Because we are all being run by an inexplicable monetary monopoly of world international financiers and bankers. Again I am indebted to the noble Lord, Lord Brockway. Perhaps Napoleon got out of his bed on the wrong side when he said what I now quote: When a Government is dependent for money upon bankers, the bankers, and not the leaders of the Government, control the situation. Money has no motherland. Financiers are without patriotism. Their sole object is gain. I agree with you that that is a little fierce. But will your Lordships agree with me that if Napoleon said that at the beginning of the 19th century, he might have been entitled to be"even more explicit"as of the present date? If anyone feels outraged by a quotation of that kind, let him have this final quotation by the Chairman of Barclays Bank D.C.O., who is Vice-Chairman of Barclays Bank, who said in 1970, in reply to a protest by a youth about financial integrity in connection with Cabora Bassa: It is time people realised that the trade of this world is so entwined that if you were to cut yourself off for matters of principle there would be no world trade. So here we are, in complete ethical chaos. Here is the real permissive society to which we belong, of which the permissive society in its more popular understanding is simply derivative. Complete ethical chaos. The Common Market will deepen the confusion, not alleviate it. If we go in the deepest danger of all looms up. It was our present Foreign Secretary, when he was Prime Minister, who said: I believe the greatest danger ahead of us is that the world might be divided on racial lines. I see no other danger, not even the nuclear bomb, which could be so catastrophic as that. The Common Market will do nothing to alleviate that danger, but there are many things about it that might well enhance it. Britain must think again, and think big, and think new. To quote Winston Churchill again, and to conclude: Every time we must choose between Europe and the open sea, we will choose the open sea.

10.54 p.m.

LORD HASTINGS

My Lords, in the early years of the war, and again immediately after it, I was engaged in correspondence by means of circular letter with 100 Americans scattered all over the United States, and in one of the last of those letters—I believe it must have been early in the year 1946—I wrote: And I hope to see some form of union between the British Commonwealth and Empire and Western Europe. At that time, after the devastation of two World Wars, it seemed so obvious and so logical a conclusion. Nothing that has happened in the intervening 25 years has caused me to change my mind. Indeed, everything that has happened has only confirmed me in my original view.

Many noble Lords will know the depth of my attachment to the Commonwealth and my involvement in it. I would not, to use a phrase coined by a noble Lord speaking late last night, willingly turn my back upon the Commonwealth. But in the course of this debate we have heard that the New Zealand Government are more than satisfied with the terms set out in the White Paper. We have heard that the sugar producing countries are also content with the agreement reached.

But I was very interested to hear something—and I hoped I would hear something—about the smaller independent countries and developing countries of the Commonwealth, and thanks to the noble Earl, Lord Selkirk, who raised this point at the end of yesterday's debate, the noble Marquess, Lord Lothian, replied that it was considered that those developing countries would benefit more from their entry into the Common Market than they do at present by their special arrangements with the United Kingdom. I would have wished for some evidence of this optimism, but I think my desire was answered very adequately to-day by the noble Lord, Lord Walston, who cited some most interesting figures showing that the developing countries, and the ex-colonies of France, and so on, associated with the Common Market have in fact benefited considerably, not only in overseas aid given in cash and in technical co-operation but also in the quantity and value of their exports to the Common Market. Therefore I am satisfied that we are not leaving any part of the Commonwealth in the lurch.

Again, I think it is perhaps rather surprising that the only speech that we have heard about agriculture and the effects of our entering the Common Market on this country—the only speech in depth—was that made by the noble Lord, Lord Walston, and as a farmer I can hardly refrain from referring to it. I agree with the noble Lord that, generally speaking, the farmers in this country will be considerably better off. What will happen, of course, is that the consumers of this country will have to face up to realities which have been hidden from them for the past 24 years. In other words, subsidies that have been received by farmers have been subsidies in aid to support a cheap food policy, and that now will cease. Therefore I think it would be very welcome if the noble Baroness who is to reply to-night could dwell at some little length on the increase in food prices that is to be expected, and how we are to deal with them. In doing so she will be answering some criticisms made by the noble Earl, Lord Buckinghamshire, about how these prices may be cushioned in respect of old age pensioners and the poorer sections of our community, and also to what extent we may expect that this increase in prices may be met by a rising standard of living as a result of our entering the European Economic Community.

There is another aspect of the agricultural policy, and that is the much criticised aspect of the very heavy levies we shall have to pay to the E.E.C. I believe the figure of £600 million has been mentioned, and this will be paid mainly to so-called inefficient French farmers. But surely this is not going to be for ever? It may not even go very far beyond the transitional period of five years. I assume—and I hope I am right—that increasingly the budget of the E.E.C. will be spent in other directions, and not only on industry and technology but in regional development and social welfare. We have been told that the standards of social benefits and social welfare generally are now higher on the Continent of Europe than they are in this country; and one would hope to see a great deal of the E.E.C. budget spent to raise the social welfare levels in this country, and the levels of regional areas which are experiencing some depression at the moment—a point very ably dealt with by the noble Lord, Lord Polwarth, yesterday. I hope again here that more can be said by the Government, not only now but in the future, to allay the anxieties of the people on this score.

It was left to two noble Baronesses yesterday to bring out for the first time the vital contribution that we can make to Europe rather than what we can get out of it. If I may say so, I thought this was a typically and essentially feminine approach, and one which I welcome very much. The noble Baroness, Lady Birk, and the noble Baroness, Lady Emmet of Amberley, yesterday referred not only to our past contributions but to our future contributions. I believe that one of the most important reasons for us going into Europe is the contribution we can make to the future of Europe, and I think this is one of the main reasons why the Six countries now have invited us to join them.

There was another matter, first mentioned, albeit briefly, by the noble Lord, Lord Gladwyn. He said he thought this idea would appeal to the younger generation, and this was enlarged upon by the noble Baroness, Lady Birk. I am sure they are right. I have a sizeable family whose ages spread over a period of 20 years from the eldest to the youngest, and I know very well that even to-day the young recognise no barriers of nationality or language, irrespective of whether they speak the language; there is the language of youth which crosses the frontiers. They are all profoundly anti-war, and I am quite sure that in future this network of communications, referred to in a most original maiden speech yesterday by the noble Lord, Lord Burgh, will be very much their thing, as they would say, and I am sure if we decide to join the Community this is the thing they will follow, and manage admirably, imaginatively and responsibly. This again is a very important feature of the problem we are called upon to decide in the near future. It was confirmed not only by the noble Lord, Lord Burgh, but by the noble Lord, Lord Bethell, both speaking for the younger generation.

I would say to the critics of our proposed entry into the Common Market that they are not only dwelling too much on the risks involved, and upon the fears, perhaps natural to many of our people, but they are dwelling too much also on what we can get out of it rather than what we can put into it, and not dwelling sufficiently on the adventurous spirit and the way in which the people of this country adapt themselves to new challenges. I think they are too full of suspicion and hostility. This is a partnership of friends, we are going into, not enemies, a partnership where mutual trust is not only essential but entirely rational to presuppose, where friendship and reason must, and does, and will prevail. Of this I am sure, and this is the spirit in which we should go in. Let us finish with this antiquated talk of not trusting the foreigner. Why should they trust us, as the noble and learned Lord on the Woolsack asked in his opening speech to-day, if we should back down at the last minute. It is a question of mutual trust, and there is no reason to suppose that trust is lacking in any quarter of the E.E.C.

It was the noble Lord, Lord Shinwell, with a traditional ultra-conservative speech, who was left almost single-handed manning the ramparts of Durham Castle. But he was very surprised, and asked why the aristocrats in this House should not join him. My ancestors came from Europe more than 1,000 years ago; I believe they were a cross between a Viking and a Saxon. Since then my ancestors have manned the ramparts of Europe in the fourteenth and fifteenth centuries, and my family crest of five feathers was gained on the field of Crecy. And since then another ancestor well known to historians, Jacob Astley, manned the ramparts in the Lowlands and Germany, and I see no reason why I and my son should not continue to man the ramparts, this time assisting rather than fighting the Europeans. That is my answer to the noble Lord, Lord Shinwell.

LORD SHACKLETON

My Lords, may I inform the noble Lord that one of my ancestors lost all his baggage in the Wash?

LORD HASTINGS

And I lost mine at the end of the war in Yugoslavia hijacked over the border from Trieste, but that is a different story.

Finally, to sum up, on the practical aspect I would only say that I am convinced that no Government would recommend terms unacceptable to the mass of this people, injurious to the interests of this nation, and incapable of fulfilment, whether it be Conservative, Labour or Liberal. I am utterly convinced of that. As for the ideological and idealistic aspect, surely this is our new role, suited to the younger generation who, after all, in the not too distant future will be taking over from us. Above all, I believe it is the Christian way, the civilised way, and the peaceful way, through friendship and strength, for a better world for all Europe and mankind.

11.6 p.m.

LORD TAYLOR OF GRYFE

My Lords, I want to return to the theme of one of the earlier speeches in this debate. I refer to the speech of the noble Lord, Lord Polwarth, when he discussed the question of regional policies in relation to the Community. Before doing so, I am tempted to say a word about the very interesting speech of the noble Lord, Lord MacLeod of Fuinary. I have frequently looked for guidance from the noble Lord, Lord MacLeod. I share his spiritual faith, and acknowledge a great debt to the noble Lord for his bringing religious values to bear on some of the great social problems that confront our people. Having said that, I must confess that I find it difficult to be so certain about the issue which confronts us as the noble Lord. He seems to prophesy gloom with an assurance that I am afraid I cannot command. He seems to interpret the move to Europe as some kind of capitalist conspiracy, designed to destroy the liberties of the individual and our democratic institutions. I am probably the only Member of this House who was a member of a European socialist party. I was a member of the Social Democratic Party of Germany, the S.P.D., and I can assure the noble Lord, Lord MacLeod of Fuinary, that the German socialists cherish their democratic institutions, having lost them in their lifetime, and are as concerned about democratic freedom and liberty as the noble Lord.

I am impressed by the fact that, despite all that is said concerning the dangers to world peace in this kind of alliance, it was on the initiative of Willy Brandt, the leader of the German Social Democratic Party, that a determined effort is being made to secure a rapprochement between East and West. I think we are quite wrong if we interpret this development in these kind of conspiratorial terms. If anything, with a very substantial Communist Party in France, a very substantial Communist influence in Italy, and a Social Democratic Party in power in Germany, probably the capitalists have as much to fear from this alliance with a Social Democratic Party from the United Kingdom joining that group.

However, I have been diverted from my main concern by the noble Lord, Lord MacLeod of Fuinary. My concern is really with regional policy, and I am sure that anyone who lives, as I do, in Scotland, cannot but pose the question: how will this affect economic policy in the regions? The unemployment rate in Scotland is running at the moment at about twice the national average. The male rate of unemployment in Scotland is over 8 per cent. On Clydeside unemployment is almost reaching 10 per cent. Young graduates are leaving our educational institutions skilled and trained with no immediate prospect of employment. Those of us who are concerned about these matters must ask the question: are the principles in regard to regional development, to which the last Government and this Government have subscribed, protected in the new arrangements?

It is important that we establish one or two facts in regard to regional development, and the first is this. There can be no prosperity in the regions outside of national prosperity. The decline in investment nationally simply hits the regions more fiercely. So our concern with regional development is not an isolated concern. It is a concern for national growth. I am not suggesting for a moment that joining the E.E.C. inevitably guarantees growth. Growth and national prosperity in our economy will depend on marshalling our skills and resources to take the opportunities which will now be open to us. But I must say that, having heard the debate and having pondered this very big question, we have to face the fact that the prospects for economic growth appear to be greater by association with the Community, than in the restricted market potential of an off-shore island in Europe. So that our concern for the regions must, first of all be a concern for national growth and national prosperity, and on that score I suggest that joining the Market appears more likely—although not guaranteed—to assure some degree of prosperity in the regions.

In talking about the regions, I can perhaps speak more specifically of Scotland which has been fortunate in the post-war years. It has attracted 20 per cent. of all new American investment in this country, and 10 per cent. to 12 per cent. of the gross national product of Scotland is from these new American firms which have moved into the region. This has been a beneficial development. I am interested in the fact that some of my Socialist colleagues seem to have the attitude that we should be hostile to the entry of international trading organisations into our country. Whatever we may decide on the E.E.C. issue, these great international concerns will still be there, and I think that all of us who have seen the operation of some of them in the economy of Scotland will agree that their contribution has been beneficial in a number of directions.

First, they have helped to bring new diversity into industry. Secondly, they have introduced new and refreshing ideas into management and labour relations. Consequently, the intervention of the multi-national company in Scotland and the regions is something that we have sought and encouraged. Having said that, I think the possibilities of attracting further development of that kind will be restricted if we can offer only the British market. In the very nature of modern technology, large concerns require European markets, and consequently Antwerp will in these circumstances always be more attractive than East Kilbride or Cumbernauld.

In the last few months I have been engaged, at the request of the Scottish Council and with the support of the Government, in trying to attract European investment to Scotland. I have visited the Continent, I have met the banks and the institutions, and I have talked to the chambers of commerce with a view to stimulating their interest in investment in Scotland. I believe that such investment will be encouraged if we enter the E.E.C. I think psychologically it will be more attractive, as well as offering the prospect of a larger market. So for these reasons, in terms of regional development, entry into the E.E.C. is an attractive proposition. But it is said by some people that entry into the Common Market will restrict our incentives; that it will limit the opportunities that we can offer. This is hardly true. While in the Treaty of Rome there is no specific reference to a common regional policy, the preamble to the Treaty refers to the need for member States to strengthen the unity of their economies and to ensure their harmonious development by diminishing both the disparities between the various regions and the backwardness of the less favoured regions. In Italy at the moment they are passing legislation to restrict economic development in their golden triangle—the area of Milan, Turin and Genoa. They are taxing industries in these areas in order to find resources to assist and invest in the less developed areas of their country.

So there is no conflict between a vigorous I.D.C. policy in the United Kingdom and our obligations under the Treaty of Rome. In fact, there will be an attempt in the Market to harmonise some of the investment incentives. Anyone who has been engaged in this business of attracting industry will appreciate that in Europe to-day there is a great outbidding of countries in offering incentives. This is an undesirable thing, and it has some advantages for us if we get some uniformity in the kind of incentives which are offered. I am quite sure that because of the other benefits which we can offer in terms of skills and resources—the skilled labour that is available, the quality of our life, the way we live in this country—these kinds of incentives will then count.

Like other noble Lords from Scotland who have spoken, I am much concerned about the welfare of Scotland, and I hope that we shall get all the assurances that we require concerning the Government's commitment to regional policies from the noble Baroness who is winding up the debate to-night. The social costs of the concentration of people in a small part of this country are tremendously high—the costs in roads and rail subsidies, and so on. The fact that in this country we have had a tendency to concentrate people and resources in a small area, with its inflationary impact, while other areas have vast under-utilised assets, is bad social planning.

So I hope that, despite our enthusiasm for the larger unit, there will be a continued commitment to regional development. I hope that, in our enthusiasm for Europe, we shall weigh up schemes like the Channel Tunnel and ask ourselves whether in fact this might not encourage and promote a further concentration of people and resources in the South-East corner of England, while there is an adequate transport system spread throughout the ports of this country from Aberdeen to Southampton.

So I welcome the White Paper even with its limited assurances regarding regional policies, and I am satisfied that the acceptance of the White Paper will not limit regional development. I would welcome assurances accordingly from the noble Baroness who is to wind up.

11.20 p.m.

THE LORD BISHOP OF CHICHESTER

My Lords, the decision for which Parliament is preparing itself is one that it must make for a country which is extremely confused and bewildered about this issue. That is not surprising in view of the complexities of the issue, but I think it is true to say that a great many of the main policy movements of this country have taken place without a specific decision. We moved into colonialism and the imperialist sphere in the past without any definite declaration of policy. We have become a multi-racial society in the last few years, again not by a declaration of policy. Even our great involvements in Europe and elsewhere through wars have come under such pressures that the decision seemed almost inevitable.

When it comes to the debates on the European Economic Community, which have been going on for a number of years, these have always in the past been under certain conditions: namely a recognition that whatever we were saying at that point, however ready or otherwise we were, was conditional upon what terms that could later be made and on the reaction of other countries, and one notably in particular. It is only during this year that this country has become faced with the "crunch" of an actual decision. It is not surprising that there are a number of different reactions. Some of them as voiced here powerfully and recently by the noble Lord, Lord McLeod of Fuinary, are very positively against such a decision to go forward, either on grounds of principle or on the grounds that the kind of terms we have or that we might reasonably have been expected to obtain, were not such as to justify taking such a step.

I am more concerned by what seems partly to be a mood of indecision in this country, a mood perhaps of lethargy and tiredness about it all, a kind of sluggish fearfulness about taking a step involving any upheaval in our national life, and a lack of confidence in our own abilities. It would be disastrous if that mood were in any sense to influence the kind of decision we make. Decisions must be dynamic things. Even a decision to say, "No" is equally a decision. But where a decision to say, "Yes", to go forward, has something of creative imagination about it or an act of will, a decision to say, "No" when it means simply remaining where you are does not require the same output of energy or response. If a decision to say"No"was based on conscious and deliberate alternative policies, that is one thing; if it were based on a kind of fearfulness of the unknown, on a clinging to the security of the present or a holding on to the past, that would be a decision from weakness and not strength. It would be disastrous for the morale of this land. I go over the Border for one quotation: He either fears his fate too much, Or his deserts are small, That dares not put it to the touch To gain or lose it all. The kind of decision we have to make is a Parliamentary decision, and must not be taken away from Parliament. It will be making such a choice on behalf of the people, but as that body to which the important decisions of the nation have always been entrusted. One of the main criticisms of Parliamentary democracy as a form of government, as opposed to more autocratic forms, is that it finds it more difficult, in the multiplicity of freedoms freely expressed and pressures freely exercised to take decisive action. Hence the way we handle this kind of decision will be a measure of our own political health. I hope that we shall therefore act resolutely. The right decision is not only a balancing of the alternative possibilities; a right decision implies the right moment, that there is a tide in the affairs of men, and so on. The tide may go out if we do not take it at that moment.

Therefore the considerations of the moment are also very important. But I think a right decision also is not just a"here and now, once and for all"thing. Decisions become right or wrong rather more according to the way in which we follow them out. The test comes afterwards in the kind of response which a decision is able to evoke in the people who have made it. It will be of cardinal importance that, although there will be opposing views and already they are forcibly expressed, and minorities, larger or smaller, engaged in it, when Parliament does make a decision of this nature it should be accepted as a national decision. There are problems of immense importance to be worked out, and working them out will require a great output of national energy and will. The question is whether we are up to this. We shall be making a declaration of policy, almost a declaration of peace, which commits us as much as a declaration of war would. If, after making the decision, we were to drag our feet or to fall out with one another in bickerings of Party and otherwise, or even encourage the divisions there are in this country, we should be bringing the whole experiment into hazard and I think we should do irreparable damage to our own national wellbeing.

For this reason a "Yes", and in my heart I hope it will be "Yes", means a positive act. It is the courage to accept something, not just as an economic step but as a creative venture which will affect our destiny. At the moment, no doubt, there are the immediate consequences, the immediate problems to be worked out and there will be people on whom the burden falls more heavily than on others for whom we must be responsible; but I take it that the real beneficiaries who will be the most affected will be our descendants. What are we wanting for them? Beyond all the economic and even political questions it may be said that it is something of an act of faith. What does that mean? An act of faith in what? An act of faith in our own people and their future and their energy? An act of faith in Europe and its role in the New World? Yes; but when we speak of Europe, and we have spoken of it in this debate, we have spoken in different terms from what other people think of Europe. To other parts of the world Europe has been a source of exploitation, domination, aggrandisement, ideological war and the source itself of wars which not only have been fought between us on its soil but have involved them. That is part of the appearance of Europe to the rest of the world. Surely what we are desiring is a Europe which looks different from that and presents a different kind of face, not only in its heritage but also in the fact of what it can contribute in its potentialities for the future.

We know that this need not be, but it could be a kind of factory or supermarket or bureaucratic machine, a power bloc. It could be that, but it need not be that. Surely one of the things we shall try to bequeath to our descendants if we take this step is something more of a vision for their future than the economic promises. If we stood aside from something which really held out prospects for them, or appeared to enter into it because we thought it not a vision but a mirage, we might be considered by them to have shut a door which they would have dearly liked to keep open and which would have given them a chance of getting out of some of the nationalistic straitjackets which I think they would deplore more than we do. Whether this can be done in the great world as a whole unity, without the individual steps that make for it, I very much doubt. I am very much with the noble Earl, Lord Longford, in feeling that this step towards Europe is a step towards that. Anyhow, I would throw my weight from this Bench with those who have spoken on behalf of this, not indeed as a golden promise but in terms of great potentiality.

In conclusion, it would be only fair to say that, even though this is a Parliamentary decision, it is ultimately a national decision, one that the people have to work out. We have a great deal of the attitude of isolationism in this land, which has to be worked out of our system before we can achieve a different kind of approach. From these Benches we must, in sackcloth, admit that we have contributed to this attitude. Many of the religious divisions in the world have emanated from the Churches of Europe, and the Churches have not always helped people of different races and traditions to live side by side. Obviously, there is a part which the Christian Churches in Europe must play, not only in the integration of Western Europe but also in the approach to something more. In the last fifteen years there has been growing up a strong body of Christian opinion among the Churches of Europe, East and West, a growing sense of European unity in their desire to make peace a possibility for the Continent. Again and again those Churches have looked to the Churches of this country for their share in this, not for any special wealth we can give to them but because we have our own experience, and political experience, which others lack. I take that as a good augury for the fact that in other ways we can make our particular contribution, which I hope we shall have the courage and faith to make.

11.32 p.m.

LORD LLOYD OF HAMPSTEAD

My Lords, on such an occasion as this, my first and perhaps only duty is to declare where I stand. I am unrepentantly a supporter of our joining the Common Market. I do not pretend to be able to evaluate the economic pros and cons, whether in the short term or the long term. In any event, it seems to me, with all humility, that the fundamental case for joining is political and cultural rather than economic. But this does not mean in any sense that it should be a Party issue. Having said that, at this very late hour, perhaps one's next duty ought to be to sit down. I resist that temptation but I will try to make amends for so doing by being as brief as possible.

I propose to confine myself to one specific issue, and that is the argument that adherence to the Rome Treaty would in some way involve an infringement of our sovereignty. The term "sovereignty" is one not very much used by the man in the street but rather by lawyers, political scientists and journalists. If we take this term in any sense other than as a mere political slogan, I think that it needs to be appreciated that it bears two fairly precise meanings. First of all, it describes the legal power within a State to pass laws, subject to any limitations imposed by the constitution. In the second place, it is used to denote the legal freedom of action of a State vis-à-vis other States in the international community, subject to international law and any treaty obligations. Of course, all civilised States consider themselves bound by international law and thus any treaty obligations which are accepted by this country will be binding on us in international law. If, however, a treaty involves a change in our domestic law, this will have to be embodied in a Statute, if it is to be given effect to by our courts. It is now established beyond controversy that no treaty, whether it is a far-reaching treaty like the United Nations Charter or the Rome Treaty, or a more limited treaty, such as a copyright or postal convention, involves a breach of State sovereignty as such. Indeed, far from being a limitation on sovereignty, the right of entry into binding international obligations is itself regarded as an attribute of sovereignty. This view has been reiterated on many occasions in many weighty judgments both of international and State courts, including the Supreme Court of the United States.

But, it is argued, the Rome Treaty is in some way different from all other treaties. Why is this? The main point seems to be that it is a perpetual treaty, or at least it is presumed to be perpetual because there is no provision for termination. In fact, many treaties contain no provision for revision or termination. This applies especially to commercial treaties, but also to a good many political treaties as well, such as, for example, the United Nations Charter. Admittedly, international law is comparatively undeveloped as to the position regarding such treaties. For example, it is doubtful whether it is possible in such a treaty to imply a term as to its possible termination, or whether the doctrine of frustration in contract would apply where there has been a substantial unforeseen change of circumstances. These are all matters which are discussed in the authoritative textbooks and I do not wish to detain your Lordships on them.

The simple point remains that, even if the Treaty is a perpetual treaty, this is in no way inconsistent with our sovereignty. Some people, and particularly perhaps journalists and politicians, when they talk about sovereignty have in mind rather different matters. What they seem to have in mind is either actual power or political freedom of action. I venture to suggest here that the article in The Times last Friday by Sir Derek Walker-Smith tended, to some extent, to confuse these concepts with the more precise meanings to which I have just referred.

The power that can be exercised in the world is obviously the result of many factors, such as the size, economic strength, political skill, military forces and so forth, of any particular country. It seems scarcely arguable, however, that our role in power politics can be significantly weakened by adhesion to the E.E.C. The chances are, one would have thought, that it would be increased. As to political freedom of action, by which I suppose is meant control over our own affairs, adherence to any treaty whatever must restrict this to some extent; and, of course, such limitations are more far-reaching in the case of our joining a wide-ranging association such as E.E.C.

This brings me to three unusual features of the Rome Treaty which I think call for comment. The first is the role of the Court of Justice in interpreting the Treaty under Article 117. This is an important matter, since the Treaty constitutes an overriding Community law for the member States. It is obviously vital, however, that interpretation of this Treaty should be uniform. It would be quite absurd if the courts of each member State could arrive at different decisions on the meaning of provisions in the Treaty. Accordingly, the Court of Justice of the Community, and not the House of Lords or any other supreme court of any member State, is to be the binding tribunal for deciding questions of interpretation. This will undoubtedly impose an unprecedented limitation on our judicial system. But surely there is nothing invidious in our courts deferring to the Court of Justice on these issues; the arrangement is really a sensible one in order to achieve uniformity of interpretation.

Your Lordships should bear in mind that the range and scope of Community law will affect only relatively limited fields in our law—for example, labour law, transport, monopolies and restrictive practices, company law and patents. In particular, and I think this is of great significance and is often overlooked, it will not affect any fields of our domestic law such as criminal law, matrimonial, property, contract, tort or other general fields of law. Nor, apart from Article 177, which I mentioned, will it affect our court system or procedure, whether civil or criminal. The impact of Common Market law, while important, should not be exaggerated or misunderstood.

Secondly, there is the law-making power of certain organs of the E.E.C. This extra-legislative power is certainly unusual, but it should be pointed out that its scope is of a limited character, tied to particular purposes as set out in specific Articles of the Treaty. Under our law, moreover, any E.E.C. directives will have to be given effect to by our own Parliamentary action.

Thirdly, there are enforcement procedures which are provided for in particular cases which are to be operated by organs of the E.E.C., including the imposition of penalties and the power in certain instances to authorise entry into premises, inspection of books and so forth. Although these powers operate only in restricted spheres, they are fairly far-reaching in principle and are capable of arousing some anxiety. In this connection, therefore, I think two points need to be made. The first is this: important safeguards are provided in the Treaty, and in the directives and regulations issued thereunder, such as the need for a party to be heard before a penalty is imposed, and also for rights of appeal. As regards penalties, I should point out that the penalties are not in any event in the nature of criminal penalties but are civil penalties.

As for the use of compulsion, where entry or inspection is involved, the member State on whose territory the power is exercised can insist on its own officials co-operating. Secondly, the previous Labour Government in their White Paper on the legal and constitutional implications of United Kingdom membership of the European Community, issued as long ago as May 1967, clearly satisfied themselves after close scrutiny that there is nothing objectionable from our point of view in these provisions; and I am not aware that English lawyers with specialist knowledge of these matters have expressed any serious concern.

Lastly, my Lords, there is the argument that E.E.C. will involve us sooner or later in a true federation, a United States of Europe analogous to the United States of America. This certainly would involve a transference of sovereignty, but there is nothing in the Rome Treaty which requires this. It would involve a total volte face on the present policy, a complete restructuring of the present Common Market, and in any event we should have a right of veto. Sooner or later a trend in the direction of federation may, of course, emerge, but surely this will be a problem for the next generation to tackle.

By signing the Rome Treaty we are in no way pre-empting the position, or in no way committing our descendants to an advance in this direction. In any event, may we not ask: what is there so frightening about such an ultimate outcome, especially, I venture to suggest, for internationally-minded Socialists who have long inveighed against the evils of national sovereignty? The point is, for the time being at any rate, academic, and I will not dwell on it further. My Lords, I conclude that there is really no substance in the argument that our sovereignty will be abandoned or infringed by our joining the Common Market. Further emphasis on this non-issue can only serve to confuse rather than enlighten the nation's judgment on whether we should or should not adhere to the Rome Treaty.

LORD GLADWYN

My Lords, before the noble Lord sits down might I just ask him one question? Supposing that we enter into a monetary union, which is the declared object, as I understand it, of the Government, should we be sacrificing any sovereignty or not?

LORD LLOYD OF HAMPSTEAD

I am obliged to the noble Lord for raising that. I should think clearly not. This is no different from joining, say, a postal union which forces us to accept certain legal obligations. The legal obligations may be more far-reaching in one case as against another, but certainly it would tot infringe our sovereignty—Parliament would still remain sovereign—and it would simply be an international obligation under the Treaty.

LORD GLADWYN

If we have a monetary union, it would be run by some Authority of, say, ten States, in which there would be a unanimity rule, and I imagine therefore that they would arrive at some decision on the bank rate, or whatever it may be, by means of a unanimous vote—which would mean placing a veto on everybody. Is that right?

LORD LLOYD OF HAMPSTEAD

This would depend on the terms of the monetary union; and can we really talk about a monetary union in these very generalised terms?

11.47 p.m.

LORD TREVELYAN

My Lords, I am speaking to-night in order to add my name to the roll of those who are in favour of joining the Community. The difficulty in speaking about this question is to find the happy mean between the grandiose and the grocer's shop. I speak from the rather narrow point of view of one who has dealt all his life with the foreign relations of this country. It has been conclusively proved in your Lordships' House to-day that we shall be ruined if we go into the Community and ruined if we do not—a dismal prospect. I am not so ambitious as to propose to prove or disprove either; but I propose only to say very briefly, in simple and almost elementary terms, how I see the underlying political argument.

As we got rid of our Empire and watched the Commonwealth grow away from us, as the balance of power in the world changed radically to our disadvantage, we found it difficult to take in the rapid changes in the world environment and in our position in it. We have sometimes been like Kipling's village which voted that the earth was flat, and we have sometimes been bemused by sentimental recollections of a vanished past. We now have to find our right place in the new environment, the right framework in which the qualities of our country can be most profitably employed. We have always adapted our political and historical traditions to changing circumstances, which is merely common sense, and that is what we have to do again now.

We are now a European State of medium power, dependent, as we always have been, on our alliances for our security and on world-wide free trade for our prosperity, facing two super-Powers who are prone from time to time to think that all major decisions on international questions should be in their hands. Our old European allies are coming together because they believe that this is the way to assure their political and economic future. It is the way in which we can best assure our future too. If we join them in the Community we shall strengthen them and help to ensure that Europe does not disintegrate politically, which would be a disaster for Europe and ourselves. We can share in and influence the decisions which will be made by them and us together and which, if we stay outside, will be made by them alone, and which will, in either case, vitally affect our future. With them we can have a real say in shaping the kind of world in which we want to live. In the Community we shall be better placed to press for the conditions which are necessary if we are to achieve a détente with Eastern Europe which will not compromise our security and political independence.

If Europe, with us as a part of it, gives promise of strength and stability, we shall be far more likely to be able to ensure the continued commitment of the United States to European security. We shall be able to provide the political backing which our defensive alliance requires. From within the Community we shall be in a better position to ensure that it is outward looking and that we have the world-wide trading conditions on which the health of our economy depends.

If, however, we decide to plough a lonely furrow on the edge of Europe, we shall have little say in shaping the world of the future. Europe without us will be more likely to fall into political disarray, and the American commitment to European defence will be far less sure. If we turn away from Europe we are likely to face strong American revulsion against our blindness to our own and the general good. I have personally had a warning of this from a distinguished American politician recently. We shall be more likely to face a world-wide tariff war which will seriously damage our interests, and of which there is now a real danger. We shall inevitably fall back in the world, in terms of economics and politics, because we shall be in the wrong place. I believe, like many others who have spoken in these terms, that we have the talent, resourcefulness and flexibility which will enable us to prosper in the Community. Those who want to reject this opportunity, who talk about an inward-looking community, are looking inward themselves. The economic calculations are more and more being seen to favour our entry, at least in the long-term. But our decision must still to some extent be an act of faith, faith that the qualities of our countrymen are such that we can accept the challenge with confidence and thus find our proper place in the radically changed world of the late twentieth century.

LORD GREENWOOD OF ROSSENDALE

My Lords, before the noble Lord sits down, he used the phrase that we have"got rid of"our Empire. I am sure that, on reflection, he will appreciate that that was an unfortunate choice of words and will no doubt wish to correct the Record.

LORD TREVELYAN

Would the noble Lord like to explain his remark a little more fully?

LORD GREENWOOD OF ROSSENDALE

My Lords, returning to dependent territories the independence to which they are entitled must not be des- cribed in terms as if we were disengaging ourselves from an onerous obligation. It was giving justice to people who needed it.

LORD TREVELYAN

This is a matter on which it is hardly necessary to go into to-day to try to get the exact terms for a process which led to our no longer having the Empire that we had before.

11.54 p.m.

VISCOUNT CALDECOTE

My Lords, like the noble Lord, Lord Plowden, I am a convert to our joining the Common Market, although a much later convert than he. I must confess that when the last two rounds of negotiations failed I was rather pleased. I realise now that that was to take much too short-term an outlook, for this issue, of all issues, is one for our children and our grandchildren, and not so much for us. Also, in travelling around Europe I have met so many European businessmen and others who show such great enthusiasm for the Common Market, and one sees so few voices raised against the Treaty of Rome, or against the new arrangements under which they now exist. One feels that this country cannot be so different from the other six who have joined the Common Market as to make it wrong for us to join it, too. But there are three great difficulties in considering the the pros and cons of our joining the Common Market.

First of all, the full effects of our joining will be delayed for many years, perhaps for a whole generation; so that accurate estimation of the balance of advantage is virtually impossible. Secondly, such calculations as can be made must inevitably be based on assumptions of how people will react to new conditions, and that introduces another major factor of uncertainty. And, thirdly, the effects on different industries in this country will vary very greatly. So I conclude that we can obtain only very limited help from figures. Of course, we must use figures and calculations to the greatest possible extent to limit the area of judgment; we must use them where accurate calculation is possible to indicate degrees of uncertainly or sensitivity to varying assumptions. But ultimately there is bound to be a wide incalculable area which can be covered only by responsible judgment. I therefore reject utterly the idea that, because we do not have accurate figures, or because of some alleged idea that the Government are trying to hide figures which they have, this is a reason for opposing our entry into the Common Market. Surely this is merely a groping for support of an opinion which has been taken for other reasons, good or bad.

How, then, can we exercise judgment responsibly in this great issue? It is a type of situation that is well known in the business world: the need to take a decision on information which is wholly inadequate, which means that one has to find what facts one can and use them, and use logic and judgment beyond those facts. Of course, the easiest thing in the world to do is to accept that the information is inadequate; that it is all too difficult, and so we had better stay as we are. Certainly there are many genuine arguments against our joining the Common Market, but that would he the worst one of all: that we simply threw it out because we found it all too difficult.

So I suggest that we must observe and take note of what facts there are: such facts as the higher growth rate in the Common Market countries, and their higher rate of investment since it was formed; the very few voices that are raised against the Common Market among the members; that 15 years ago half our exports went to the Commonwealth and about a quarter to Europe, and to-day those figures are almost exactly reversed. And there are many other factors. Then we must look for logical deductions. The bigger the market, the greater the opportunities that our joining the Common Market will give us—opportunities for specialisation, for cost reduction and for an expansion of our sales. In this connection, I cannot help being greatly saddened by the attitude of our great trade unions and the Trades Union Congress. In this country at the moment, great hardship is being caused by mergers, resulting in closing of factories because in many industries there is too great capacity. There is too great capacity in many industries because there is inadequate demand for the products of those industries, and the only way in which we can get away from this situation is to have an expanding market for our products. I cannot understand how our great trade unions can believe that a stick-in-the-mud attitude, a staying out of Europe, can benefit their members. It seems to me that it is all in their, interest to have this wider market so that we can move from closures to investment and expansion.

It can also be argued that the Common Market will produce a larger base on which to spread the development costs of high technology. That certainly is true in the long term. But at present, in the short term, we must ask ourselves why it is that the French do not buy power stations from other countries of the Common Market, or why they do not buy power stations or computers or aircraft from England. The reasons are not because of some tariff barrier but because of nationalism. That nationalism, I believe, will decline as the Common Market develops; and surely it is of the utmost importance that we should be there to help those developments in the Common Market to go along the lines which will be in our interests. Perhaps, my Lords, this is the greatest issue of all, which has been mentioned by many speakers in this debate already: that we must be in the Common Market to influence the decisions, to influence the way things are going over the next ten, twenty or fifty years, which will have such an enormous effect on our children and our grandchildren.

My Lords, I accept that it is perfectly logical to argue that we must not go into the Common Market—not now, not ever—because it is fundamentally wrong; that independence is of paramount importance, and that we can have greater influence in the world if we stay outside the Common Market. That I know is a sincerely held view by many, and I respect it. But it is absurd, it is misleading, ridiculous, to suggest that we should go in—not now but perhaps later: because if we take that attitude then we are forgetting that the Common Market, like so many other things in life, is developing all the time. And if it develops without our influence in it the chances are that it will develop along lines which will be disadvantagous to us; and if we try to apply for entry again next year, or in five years' time, or in ten years' time, the conditions we shall have to accept will be much more onerous than those which we have achieved now. Therefore I believe that it is now or never. Can we really believe that it is in our interests to remain outside, with our huge dependence on trade to keep this island, with its crowded population and with so few natural resources, prosperous? Is it really sensible to become progessively more isolated alongside a Europe which is becoming closer together economically and politically? Surely we cannot afford to remain aloof and impotent to influence the developments which are going to take place so close to us.

But, of course, there are problems of honour, which have been mentioned many times already in this debate yesterday and to-day: problems of honour to our old and trusted friends in the Commonwealth; and I believe that old ties of blood and kinship, of gratitude for unselfish and unhesitating support in the past, are important and are relevant. I think that we have in the past paid too little regard to these, but I believe that honour has been satisfied; that our friends in New Zealand, in Australia and elsewhere in the Commonwealth have a fair deal, and that they know, they believe, they accept, that it is in their interests that Britain should be strong, and that she can best be strong by joining the European Community of nations. I wish deeply that I could go along with the noble Lord, Lord Beswick, in his very sincere speech in which he advised that we should keep out of the Common Market and, as I understood it, go along with the Commonwealth. I wish I could believe that that was a practical alternative. I believed this for a very long time, but I have come to believe, and indeed to be quite sure, that such a course is not practicable. Perhaps it was practicable fifteen years ago, but it is not practicable now.

As I have said, there are many honestly held views as to why we should stay out of the Common Market. But I believe that too many of the reasons given for staying out are based on fear: fear of more competition, fear of others grasping their new opportunities more effectively than we shall do ourselves; fear of not being able to hold our own in a wider circle; fear of change itself. I do not believe—and here I agree wholeheartedly with the noble Lord, Lord Robens of Woldingham, in his excellent maiden speech—that we have any need to fear competition, to fear what is going to happen if we join the Common Market. But, anyway, fear is a bad motive for any action, and we should be guided by other, higher principles than that.

My Lords, every great venture involves risk and faith. Both are essential ingredients to any new challenge. Britain has stagnated for far too long between a glorious Imperial past and a search for a new role in the future—a new role which will capture the imagination of all our people, just as the Commonwealth and Empire caught the imagination of everyone in days gone by in different circumstances. I challenge the opponents of our entry into the Common Market to suggest any alternative which will provide this need, this challenge, more effectively than our entering the Common Market. So, because I believe that we can enter Europe honourably, that we shall have more influence in the world, that there will be more opportunities, if we take them, risks and all, for a brighter future for succeeding generations—because of all that, I strongly support the Government's application to join the Common Market and I hope that it succeeds.

12.5 a.m.

LORD DONALDSON OF KINGS-BRIDGE

My Lords, after two days debate, knowing that one is to speak towards the end, one formulates in one's mind a number of seemingly brilliant comments on what previous speakers have said, and if this were at an earlier hour I have no doubt I could hold your Lordships' attention by making them; but as this is almost a captive audience I think it would be more to everybody's satisfaction if I did not. It is a disappointment to me. I was hoping to compare those two spiritual gad-flies, the noble Lord, Lord Soper and the noble Earl, Lord Longford, and the way they came to diametrically opposed conclusions from the same facts. I was hoping to compare, too, the gloomy, but very carefully and sincerely stated prognostications of the noble Lord, Lord Beswick, with the cheerful but equally carefully stated prognostications of the noble Lord, Lord Crowther. I was hoping to pursue with the noble Lord, Lord MacLeod of Fuinary the question of a banker's ramp, which I always had a suspicion had something in it, and clearly we shall have to look at this again. I was hoping to make some lighthearted, I hope not offensive, remarks about the fantastic and irresistible ability of the noble and learned Lord who sits on the Woolsack to fan the embers of political controversy into a happy flame, but I shall refrain.

I think it is the business at this stage of Back Benchers like myself to leave general arguments to my betters. I will state my position clearly tout court, if I may break into what may later on become the vernacular, in the words so well said by my right honourable friend Mr. Roy Jenkins in the other place. I have nothing to add to his speech. It was complemented by my right honourable friend Mr. Harold Lever and my noble friend Lord George-Brown. I stand on those three speeches, and I wish to add nothing. But I do want to take up one rather boring and technical subject, and I hope I can keep your Lordships, captive as you are, with me until I have finished. I refer to the Common Agricultural Policy.

There are three objections that farmers have always made to the Common Market. The first relates to milk products from New Zealand; the second to sugar, and the third to agricultural policy. I have always taken the view that the first two could be dealt with and in fact they have been, and anyone in favour of entry cannot possibly quibble. Obviously, if you were always against it you do what you can with these agreements, but it seems to me that honour is satisfied on those two very difficult issues.

The Common Agricultural Policy is quite a different problem. It does not really depend on the terms. If it did, I think the rather lukewarm acquiescence recently of the N.F.U. would satisfy me. The policy really depends on whether it is viable at all. It is difficult to discuss this complex question shortly, and I must at this stage of the debate sacrifice clear exposition to brevity. Put shortly, the problems of agriculture in the E.E.C. are basically exactly the same as they are here. The size of farm business has to increase. The number of farms, farmers and farm workers has to diminish, so that the proceeds of the sale of the available output, for which there is an inelastic demand, can be shared among fewer people so that their income may keep pace with the rising takings of expanding industry. This is a fearfully complicated sentence, but it is all there if you read it to-morrow. I think it stands up. It is what the economists have been telling us for years, but they usually take a page or two to do so.

We have been spectacularly successful in dealing with this problem here (more I think by luck than good management), but the fact remains that the number of farms, the number of farm workers and the number of farmers have all decreased notably, acreage has been transferred from smaller to larger farms, and our structure in the industry is well on the way to making sense. We have 60 per cent. of our farms under 20 hectares; the average in the Common Market is between 80 and 90. It is a very considerable advantage. All this has been done, not perhaps painlessly but with a minimum of hardship; with no more than average bankruptcies, about the same as builders, and serious protests have pretty well been confined to the rather bedraggled broiler which was presented to my right honourable friend Mr. Peart at his famous first Review in 1965, which he indignantly, and with great political insight, handed immediately to the R.S.P.C.A.

They have not been nearly so successful in the E.E.C. They have not travelled nearly as far along the road of rationalisation as we have, and they have incurred lethal riots on the way. They are now on the move. The indomitable Dr. Mansholt is making progress, and his famous and very radical Mansholt Plan is getting nearer to acceptance. Just in case your Lordships are not absolutely au fait with the Mansholt Plan, put very shortly it was designed to reduce the number of farmers from 10 million in 1971 to 5 million in 1980, and the proportion of the working population engaged on the land from 16 to 6 per cent. in the same period. It is a tremendously drastic plan.

If we go in, as I think and hope we shall, it is absolutely essential to our prosperity that we should join a viable agricultural economy and not, to put it in crude shorthand, a hopeless mess. What has worried me up to the events of this last year has been the undeniable fact that the Common Agricultural Policy was indeed a hopeless mess. Because of the political pressures of small farmers on all Governments, prices were fixed too high in nearly all commodities and surpluses began to build up. And not only began. In 1964, there was a surplus of butter in store of 57,000 tons. This rose steadily until it had quadrupled itself by 1969, to 170,000 tons, to be precise. In 1968, the Commission warned the Council that if nothing were done it would rise to 540,000 tons by 1972, and as they only had storage for 450,000 tons it was a little awkward.

This figure was intended to scare, and scare it did. Drastic action was taken at last, and, a very interesting and unusual thing occurred for the Common Market, who do not normally agree with this kind of interference: they introduced slaughter grants of 200 dollars per dairy cow slaughtered, payable to farmers owning from 3 to 5 cows, if they agreed to give up milking altogether. This resulted in the elimination of 3 per cent., and almost certainly the most worthless 3 per cent., of the entire dairy herd of the E.E.C. With a little bit of luck, they did it. To everyone's immense relief this nightmare butter mountain melted away, and with it the main argument against our entry. The fact that they could not have succeeded without the weather only underlined the basic unpredictability of farming as a way of life. Succeed they did, and now there remains in store something under 26,000 tons, which we would very much like to have had in this country, but unfortunately it had been sold forward at a lower price.

The noble Lord, Lord MacLeod of Fuinary, spoke of the bursting granaries. He is a little out of date on this. The figure I got this morning is that the cereal stocks declined from a peak of over 14 million metric tons in July, 1968, to 8.6 million tons in July, 1970. There is no significant surplus of other commodities, according to my information. Those are the latest figures. I think that the noble Lord's figures applied to an earlier stage.

In 1966, advocates of going into the Common Market had to admit that the price of butter there was about twice the price at which we could buy it from New Zealand. But the price of butter from New Zealand has risen while the price of butter in the Common Market has fallen, and they are now marginally the same. It is no longer a great worry. What is more, the E.E.C. will not produce this year any surplus of milk products over their own needs. This is a remarkable achievement. Of course the problem is not solved for all time; but they have demonstrated their ability, which we had very seriously begun to doubt, to deal in the end, and at astronomical cost, with the problems of surpluses. I think we may take it as absolutely certain that they will never make such a mess of any growing surplus as they did over butter. Incidentally, we can congratulate ourselves that we have not gone into the E.E.C. until the butter mountain has been disposed of at this great expense. The whole episode must greatly strengthen Dr. Mansholt's hand in persuading the member Governments to accept the elements of his famous Plan.

If and when we go in, let there be no doubt in our minds where we stand; that is, fair and square behind Dr. Mansholt. The prosperity of any agricultural community depends on bending to the economic wind, not legislating against it. The worst thing in the world for the housewife is to subsidise production on social or compassionate grounds. Solutions for areas which cannot compare, because of poor conditions, with more favourable neighbours lies in diversification, in amenities for tourism, in plans for conservation of wild life, in afforestation; not in producing at a loss something which next door can be produced at a profit. All this is in the Mansholt Plan and matches our own thinking. The Minister will have to reverse his initial mistakes—the abolition of the North Pennine Development Board, the filleting of the advisory services, the cutting of aid to the co-ops, and so on. But this should present no serious problem. One must not make too much of these sins of pride and over-confidence which most Governments commit when they first come to power. They are reversible and will, in fact, have to be reversed.

I believe that an efficient Common Agricultural Policy, with us as part of it, gives the British housewife the best prospect in the long term of cheap and healthy food that is available to us. The old idea of buying food wherever it was cheapest depended for its validity on its being available and on the country from whom we bought it being willing to take our manufactured goods in exchange, either directly or indirectly. They are eating more themselves and trading more and more with our rivals, so it really looks as if these conditions are not going to prevail indefinitely. My own view is that we shall be much wiser to make firm and long-term contracts with the Six, who will shortly become the Ten and may before long grow to higher numbers.

Before I sit down, I should like to say something about the dilemma which is confronting some of my friends and colleagues who feel less favourable to entry in opposition than they did when we were in Government. I am lucky here in that my views have not changed, but it would be intolerably self-righteous to criticise anyone who finds himself in honest doubt. I should here like to echo the point made by the right reverend Prelate, the Bishop of Southwark. My greatest political shame is that I supported the Labour Party when it refused to support re-armament against Hitler by the Chamberlain Government. My support then was even less important that it is now, but I have reproached myself ever since. There are some awkward similarities with the present case. The Chamberlain Government was certainly a very bad one, so we can see the analogy here. It was the last chance to re-arm before the outbreak of war, and we might well have lost the war if Labour policy had prevailed. I am afraid there is an analogy here. I will not take that point any further, but it makes me profoundly uncomfortable. I count myself lucky to be able to affirm with ever greater confidence what I affirmed in this House last March: that we would do well to accept entry as soon as possible into the Common Market.

12.20 a.m.

THE EARL OF PERTH

My Lords, it is nearly ten hours and 34 ordinary and 2 maiden speakers since we started our debate this afternoon. The maiden speeches, if I may say so, were both excellent, and we look forward to hearing more from both noble Lords. I think there are two speeches which stand out to-day, not necessarily because of their superior oratory or excellence compared to others, but from the point of view that they were of such immense importance to us all in that those who made them really knew what they were talking about. I refer to the speech of the noble Lord, Lord Robens of Woldingham, on coal, and the prospect that he gave us that there might be £100 million more coal exports to Europe; and to the speech of the noble Lord, Lord Stokes, who pointed out that motor car manufacture represents 10 per cent. of our economic activity and that what he wants is a chance to reach the great markets of Europe. I hope that those who did not have the opportunity to hear those speeches will read them, and that they will be widely reported throughout the country.

My Lords, I am a man of the Common Market both by upbringing and by conviction. I am by upbringing because my father was a great international civil servant and because I have enjoyed the friendship of Jean Monnet for over fifty years. I remember long ago talking and working with him on the ideal of one united Europe, and I remember well his absolute conviction that the one thing that was essential was that we should start on the economic side of unity and then all other things would follow. But when things went wrong, and we did not join in the Treaty of Rome, he did not despair; he went on unwaveringly in the belief that sooner or later we, a nation of realists, should join with others. Indeed, my Lords, we should have done some years ago, but for the phenomenon of General de Gaulle; and all during that time Jean Monnet and his Comité d'Action—a committee composed of many of the leading trade unions of Europe and some of their industrialists—worked unceasingly to try to bring us into Europe. I would ask our trade unionists to make contact once more with the trade unionists of Europe and to argue and debate with them before they come to the conclusion which is shortly to be reached when they hold their Congress. To-day we are on the threshold of entry, and I should like to take this opportunity to pay my tribute and express my thanks to Jean Monnet, who is one of the fathers of Europe.

Now, my Lords, my conviction. I will choose three reasons for my conviction: Scotland, the cost of living and Germany. Your Lordships will not be surprised that I talk briefly on Scotland—on how, for example, its fishing interests or its hill farming will be protected. On the fishing, we do not know the end of the tale. I feel very much as did Lord Boothby, Lord Polwarth and others who have spoken on the subject: that we have got to get this right. I am fairly hopeful that we shall get it right, not only because of the rightness of our own claim but also because others who are to join with us—that is to say, Norway and Ireland—are deeply involved. For hill farming, we have it on record that our special problems are recognised. While on the subject of agriculture, I recall that the Chairman of the Scottish National Farmers' Union, while wanting to sit on the fence, did say the other day in his speech that anyway for the short period the conditions were tolerable. If I understand correctly what "tolerable" means, it means that they are not so bad, or perhaps even very good.

It is true that we in Scotland are on the edge of Europe; but so are others. Scotland has a long history of special relationships with Europe, be it with France or be it with the nations of the Baltic. I am confident that they do not want us to suffer. Why should they? Indeed, very much the opposite. I am satisfied that the fact that we are on the outside should not worry us. Let us now turn to the positive side of Scotland. What I have in mind there is a geographical chance that we have of being, as it were, the bridge from the oceans of the world to Europe itself. Talking of bridges, I ask the Government at this time to devote special attention to what would make that a reality: that is, to the roads, to rail and, above all, to the ports. Over the last years the port of Leith has been tragically neglected, owing to the policy of Governments which excluded it from being a special development area. We must put that situation right. I believe that this is one of the vital things for Scotland, not only now but also for the future.

Let me turn, briefly, to the cost of living. Back in September, 1969, I forecast in this House that in the next year or two we should see a rise in the cost of living such as we had never previously imagined. I felt that this was due not only to such things as changes in agricultural policy, perhaps connected with the Common Market; not only to the great increase in wage demands (which was then already upon us) but, above all, to decimalisation to a wrong pound unit. I remember saying then that I expected that for this one reason we should see an increase in the cost of living of anything from 10 to 20 per cent. Levelling-up seemed to me a certainty. And so it has proved. So when we think—and many people are apt to say it—that it is going into the Common Market that has caused this rise in the cost of living, I can only say, though with no satisfaction, that eighteen months ago I felt this was going to happen; and not for that reason. But let us not forget that even if prices continue to rise—and they will rise slowly—there is another side to this coin. That is, that if things go well, we may fully and properly expect that our wages will rise. Ten years ago our wages—technically called, I think, the gross domestic product—were ahead of those of almost all the countries of the Six. To-day, we are at the bottom, or the bottom but one of the list. All that can change when we join the Market, and the fact that living costs may go up will surely be more than compensated for by our greater prosperity and greater earnings. In all this I prefer as my economist the noble Lord, Lord Roberthall, who spoke yesterday, rather than Mr. Kaldor, upon whom I think the noble Lord, Lord Beswick, seemed to rely.

My Lords, my third reason is Germany. Here I must walk delicately lest I be misunderstood: I am not anti-German. But I cannot forget that we have fought two wars against Germany. I cannot forget the ruin that followed, the ruin of the Russian domination, and the fact that we were saved by the American shield and American help. West Germany to-day has wrought wonders of recovery. It has shown its absolute determination to turn from its bad ways and its ideas of conquest and to help to build the unity of Western Europe. But, my Lords, in its very success and strength there lies danger, unless we also are a part of Europe and unless, when unity between Germany and Eastern Europe comes—as surely it will do; and one day we shall have to face this problem—Germany is concerned more with Europe, with the inexorable mixed economies of Europe and what she is helping to do, than with the unity of Germany. For that reason I believe it is of enormous importance, on political grounds, that we should join.

My Lords, I want to conclude with an appeal against boredom with The Common Market and against the attitude, "It is going to happen anyhow, so why should I care?" It may be true that it is going to happen, but this is an occasion when every individual in Britain, every man and woman, must care about what is happening and must take an active part in bringing about unity and the prospects and opportunities that arise from it. It is the chance of our lifetime, a chance to give reality to the dream of a thousand years, the unity of Europe by peaceful means rather than by those of conquest. If it is to be a reality, it is not only we in Parliament who must play our part, it is not only the men or the women of this country; it is, above all, the youth. Therefore I was vastly encouraged by what the noble Lord, Lord Chalfont, told us about the general feeling of the youth of this country in favour of the Market. Let us, my Lords, go forward with the youth and build a new Europe.

12.34 a.m.

THE MINISTER OF STATE, SCOTTISH OFFICE (BARONESS TWEEDSMUIR OF BELHELVIE)

My Lords, I feel it a very great responsibility to reply to what I think all will agree has been a great debate. I am glad to have some part in it because ever since that historic meeting at The Hague in 1948, which many noble Lords will vividly remember, I have always believed in a united Europe which Britain would help to shape. It was there that Sir Winston Churchill first tried to heal the deep divisions of a divided Europe. I must confess that the economic arguments took a long time to crystallise, but to me the political issue was always clear. That is why I feel it has been wonderfully heartening to-day to hear the powerful support that has been given from all parts of the House, from all political Parties, and including two notable maiden speeches, to Britain's entry into Europe.

I should like first to refer to the noble Lord, Lord Robens of Woldingham. When he spoke of the Schumann Plan he reminded me of those passionate de- Bates which we used to have on federalism or whether it was to be a natural alliance of European nations. I thought the noble Lord was impressive in the way he spoke with his personal authority and knowledge of the coal industry. I thought he spoke with courage and as one who has been for this country a great public servant. Then I was very intrigued to hear the speech of my noble friend Lord Blake because I have so often enjoyed his writings. He spoke to us just as we would expect, attacking the question historically. He said that we must not be diverted by the smaller problems but must attack the question on a large historical scale. He reminded us, when we talked about the problems of the cost of living and of food, of the time when this country first decided upon free trade, that 80 per cent. of the cost depended upon food, whereas to-day it is only 22 per cent. I hope that we shall often hear him speak to us again.

This has been a long debate, of nearly ten hours, and we have heard 34 speakers. Twenty-seven have been in favour of Britain's entry into Europe and two were converts—the noble Lord, Lord Plowden, and the noble Viscount, Lord Caldecote. We also had, I thought, five who were against it. I felt that the noble Lord, Lord Beswick, was against entry; the noble Lord, Lord Shinwell, certainly so. The noble Lord, Lord Brockway, certainly so; and the noble Earl, Lord Buckinghamshire. I had originally put my noble friend Lord Lauderdale as being against entry, but I felt towards the end of his speech that maybe there was some hope of conversion. Then I come to the noble Lord, Lord MacLeod of Fuinary, of whom I felt there was no hope of conversion. I had to put a question mark of indecision and doubt against the noble Lord, Lord Pargiter. It was extraordinarily interesting to find the right reverend Prelate the Bishop of Southwark and the noble Earl, Lord Longford, trying hard to persuade their colleagues who were against entry into Europe and doing so most persuasively, as also did the right reverend Prelate the Bishop of Chichester.

I think, therefore, that those who have spoken in favour of entry will forgive me if to-night I try to deal with some of the questions that have been raised in this House by those who still doubt the wisdom of Britain joining Continental Europe. It is perfectly true that this House at any rate is far ahead of public opinion on this issue; but I believe that public opinion is changing and that by the time we come to take the vote in Parliament in October, we may well find a majority in the country in favour of entry into Europe. There are some who feel that for Britain to join the E.E.C. is an unnatural alliance. This could not have been more clearly put than by the noble Lord, Lord Shinwell, who said,"Let us go it alone. Let us have the guts to do so." But one could put it the other way round:"Let us have the guts to enter Europe ". I thought that this point of view was brilliantly put by the noble Lord, Lord Stokes. I thought that his speech was devastating, and he was ably supported by the noble Lord, Lord Crowther, and by my noble friend Lord Alport. They believe that the problems of this country have been masked and that we need the wider opportunity for technological change, otherwise (in the words of the noble Lord, Lord Stokes) we should be in a permanent industrial recession.

There are also those of great experience in the Commonwealth who, understanding its changing character and needs, now accept the logic of Britain as a partner in Europe. Inevitably, I thought, the noble Lords, Lord Redcliffe-Maud and Lord Garner, and my noble friends Lord Macpherson of Drumochter, Lord Hastings and Lord Trevelyan, spoke in this sense, because they have come to believe, whatever their experience has been within the Commonwealth, that if Britain enters Europe, we shall become a source of greater strength to all English-speaking peoples. There are also some in this House, and many more outside, who, in the words of one noble Lord as he described himself to me, are anxious Marketeers: those whose reason supports Britain's entry, but who, now that the time for decision cannot be put off, find their judgment clouded by anxiety. I would put it to noble Lords that it is not the economic questions that really trouble them most, but the most fundamental political question of them all, which is: If we join the European Community shall we be in a better position to prevent another European war? This is for many, as was so clearly stated by the noble Lord, Lord Bourne, by far the most important reason for joining Europe.

Those of us who followed Sir Winston Churchill into the first European forums will never forget the force of feeling that bound together many men and women of different European stock, who wanted to try somehow to ensure that the terrible experiences of their generation would not be visited upon the next. For myself, at least, the memory of those days has not been dimmed by the economic problems that beset us on every hand. A major reason for founding the European Community was to achieve a lasting reconciliation between France and Germany, and to forge practical links between member States so that none would have an entirely separate economic base from which to start another war. Therefore, I submit to the House that an enlarged Community will make it even less likely that one single State could dominate the rest.

The second question that troubles many people poses almost a reversal of that situation. It is that Britain will tic herself into such a close alliance that she will be unable to take her own decisions. This, I thought, was particularly brought to our attention by the noble Lords, Lord Grantchester, Lord MacLeod of Fuinary and my noble friend Lord Lauderdale. I thought that the question of sovereignty was admirably dealt with by the noble Lord, Lord Lloyd of Hampstead. But my noble and learned friend the Lord Chancellor has given us a very clear account of the meaning of "sovereignty", and the extent of our powers to govern ourselves in the future; and when the Lord Chancellor speaks, that is where I fear to tread. Therefore I will leave the question of sovereignty to be read in Hansard to-morrow.

Many still question whether we shall still have the same power of decision in domestic affairs. Several noble Lords asked, in particular, whether I could deal with the subject of regional policies—notably the noble Lords, Lord Beswick, Lord Chalfont, Lord Taylor of Gryfe, and yesterday my noble friend Lord Polwarth. Of course, coming as I do from Scotland, this is of enormous importance to us. Many noble Lords have explained, I thought most clearly, why the Government expect the overall results of entry into the Community to give a real stimulus to the United Kingdom economy. Notable among those noble Lords, were the noble Lord, Lord Belhaven and Stenton, and my noble friends Lord Watkinson and Lord Caldecote. They said that a larger home market should lead to greater efficiency, higher real wages and a larger national product, and therefore we should obviously have far more resources to strengthen regional policies, provided of course we are all prepared to work.

Regional policy in the Common Market is regarded primarily as a matter for individual member States, although efforts are being made to try and evolve a common policy. As paragraph 76 of the White Paper explains, it was agreed during recent negotiations that between the signature of the Treaty of Accession and its entry into force, there will be consultation between ourselves and the Community about any decisions they take to ensure that our interests are taken into account.

Of course the nature of the regional problem must differ very much from one country to another, but all members attach as much importance to regional policy as the United Kingdom and have used many of the same measures to tackle them as we have ourselves. For example, two countries in the Six already employ policies similar to our industrial development policy. France uses them in the Paris and Lyons regions. Italy employs a type of I.D.C. policy for all public enterprise, and this month is considering extending such controls to private industry. We have tried to compare the value of various regional incentives from one countary to another, but so far have found this impossible. Yet it seems quite clear that the scale of British expenditure on regional policy is not out of line with any of the standards of the Six. Nor is the proportion of the country accorded development area status exceptional. There is no bar to carrying on a strong and effective regional policy for the United Kingdom.

My Lords, various noble Lords from Scotland spoke yesterday, and lastly today the noble Earl, Lord Perth. I hope the House will forgive me if I say something about Scotland, because it will be apparent how concerned we are about the situation North of the Border. We feel that Scotland may in some respects have more to gain from entry than the rest of the United Kingdom. This is already the view of the Scottish C.B.I. The real problem of the Scottish economy is that the level of investment has been too low both to employ those now out of work and to give an adequate rate of growth. Because of its industrial structure, Scotland really needs a higher ratio of investment than the national economy as a whole, and she has both the need and the capacity to grow at a more rapid pace than that which is set for the United Kingdom as a whole. This has been the main aim of regional policy, but it is possible that membership of the Common Market could be of great assistance allied to recent fiscal measures.

The more Scotland becomes involved in Europe, the more the climate for investment and expansion would be determined by European conditions rather than by what is happening in the rest of the United Kingdom. Scotland could be very attractive to foreign investors. For instance, Germany, which has a high level of investment and a great shortage of labour, might well be encouraged to export capital to Scotland, in the same way that German firms have moved into Flanders in the last ten years and provided an enormous stimulus for the Belgian economy; and as was recognised by the noble Lord, Lord Plowden, the effect of American investment could also make an appreciative difference. The big flow of American investment to Scotland in the late forties and early fifties occurred because at that time tariff barriers were very high, and Scotland was the right place for an American firm wishing to get inside the Commonwealth and sterling area system. This attraction, of course, is now much less; but membership of the E.E.C. will give Scotland advantages again, particularly as American industry seems to prefer to operate in an English-speaking environment.

I would agree with noble Lords who have said that many firms are at this moment hesitating about their investment until the final decision is taken. I only hope that management will take the responsibility now of preparing plans so that they are not left behind if and when we enter Europe. The noble Lord, Lord Beswick, asked me in particular about something which is of great concern to this House; namely, the question of food prices. I must say I thought he was answered far better than I could have answered by the noble Lord, Lord Walston, my noble friend Lord Macpherson of Drumochter and the noble Lord, Lord Sainsbury. This they did in great detail from their own personal experience.

I would just remind the House that paragraph 88 of the White Paper which estimates that the rise in the cost of food—and I only take food—for about six years which will amount in total to 15 per cent. is based on very careful calculations. People often try to compare prices for different types of food, but I suggest that this is misleading, as the noble Lords to whom I have referred have said so clearly. In the first place, this is because differences in the quality of the product, and event the definition not to speak of taste or the skill with which a household is managed, make real comparisons almost impossible. Secondly, it ignores the important effect on prices of different systems of marketing, processing and distribution—and I would claim that ours is one of the most efficient systems anywhere.

Thirdly, in most E.E.C. countries value added tax, at varying rates, is applied to food. The noble Lord, Lord Chalfont, asked me about V.A.T., as did the noble Earl, Lord Buckinghamshire; and we have stated that in the United Kingdom food will not be subject to V.A.T., except possibly for a few luxury items which are subject to purchase tax to-day. The 1970 White Paper estimated that food prices would rise by more than our estimate of 15 per cent. over six years: it stated that they would rise between 18 and 26 per cent. But since then, as noble Lords have pointed out, there have been rising world prices for a number of commodities, and this fact, allied to inflation, has reduced the gap between our retail prices and those of the E.E.C. In fact, the United Kingdom prices have risen in the last few years more than those within the Community. The noble Lord, Lord Sainsbury, in particular spoke of great business opportunities and prospects for growth which will result from entry, and this of course will have a profound effect upon purchasing power. The noble Lord, Lord Pargiter, asked, with I thought great feeling, about those who live on national pensions and related benefits; and I would just assure him once again that the Secretary of State for Social Services has made it absolutely clear that there will be regular reviews every two years.

Several noble Lords spoke about the Common Agricultural Policy, and the House will recall that both the last Government and this one had to accent that as part of the price of entry—it was not a negotiable subject. But the White Paper explains how we can enter into this arrangement with the minimum disruption; and the noble Lord, Lord Walston, drew our attention to the fact that the National Farmers' Union have concluded that entry to the E.E.C. on the terms given in this White Paper should provide farmers with a real chance to increase their production and their incomes. I understand that they consider that the agricultural community's position would inevitably be at risk if we did not join the Community. I think it is certainly true that we have one of the most efficient farming industries in Western Europe: it is fully competitive and well able to adjust itself to change. There are still some agricultural problems, but none that common sense cannot surmount. For instance, the European communities have problems of hill farming of their own. We have, too, and we have made them so well aware of cur own that it is known as "le problème Ecossais". Therefore, just as in regional policy, we shall he able to continue to support our hill farmers.

There are, of course, still problems that have not yet been settled, such as the future of our fisheries, which is of great importance to this country. But as that was dealt with in great detail last night by my noble friend Lord Lothian, I do not propose to go further into it now. There are some who say that because everything is not settled, and because exact figures of growth and cost are not set down in this White Paper, somehow the decision on entry must be postponed, or even rejected. But, my Lords, we cannot guarantee our rate of growth; or foresee how we shall all behave between now and the 1980s. We have had most valuable support from those of all Parties, and of some who believe that the terms negotiated to date are the best that any Government could hope to achieve.

There is one other doubt to which I should like to refer tonight. There are some who fear that Britain's interests will be limited to Europe and that our horizons will contract. But the Six have wide overseas connections, a generous record of aid to developing countries, and strong trade with the rest of the world. An enlarged Community will in fact become the world's largest trading area. There are 18 African States associated with the Community under the Yaoundé Agreement. If we join, 20 independent Commonwealth countries will have the offer of association or a trading agreement. So will all our dependent territories, except Gibraltar and Hong Kong. Other countries which have association agreements are Greece, Turkey, Spain, Israel, Tunisia, Morocco, Cyprus and Malta. Therefore I submit that membership of Western Europe will give us once again the power to shape events that the young will surely welcome.

My Lords, geography decrees that we are European. History proves that we can never be indifferent to events across the English Channel. As a small vulnerable island, over-populated, importing half our raw materials, and a third of our food, we have survived only because—perhaps more than any other people—we have lived in the wider world. This has been our strength, and must always be our strength. I submit that we have a great deal to give to Europe. We have a long political experience which can surely bring judgment to helping solve the immense problems that will always confront the talented, sophisticated, and volatile returns of the European Continent. In return, we believe that we shall receive not only the economic advantages of which so many speak, but, above all maybe, the lasting treasure—that of Europe at peace within herself.

LORD SHACKLETON

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

Moved accordingly, and, on Question, Motion agreed to.