HL Deb 09 June 1971 vol 320 cc199-212

3.54 p.m.

THE PARLIAMENTARY UNDERSECRETARY OF STATE, FOREIGN AND COMMONWEALTH OFFICE (THE MARQUESS OF LOTHIAN)

My Lords, I should like, with your permission, to repeat a Statement made by my right honourable friend the Chancellor of the Duchy of Lancaster in another place on the Common Market negotiations. The Statement is as follows: " With your permission, Mr. Speaker, and that of the House, I should like to make a Statement about the meeting with the European Community which I attended in Luxembourg on the 7th of June.

" This meeting recorded agreement on three important matters, and made useful progress in discussion of a number of other outstanding questions.

" First, exports of sugar from the developing Commonwealth countries. The House will recall that when I reported on the previous Ministerial meeting with the European Community on the 17th of May, I said that the Community had made a proposal regarding the developing Commonwealth countries whose interests are at present covered by the Commonwealth Sugar Agreement. I made it clear then to the Community that Her Majesty's Government would need to consult with the other Commonwealth Governments concerned before replying to the Community's proposal. A meeting of the Commonwealth Governments concerned was held accordingly in London on the 2nd and 3rd of June. I was able to explain to them that the firm assurance which the Community had proposed met their anxieties and interests, and the meeting agreed on a communiqué, which, with permission, I will circulate in the OFFICIAL REPORT. On the basis of the statement included in the communiqué, the Commonwealth representatives agreed to accept the Community's proposal.

" I informed the Community accordingly in Luxembourg on the 7th of June. At the same time, the Community made clear its position regarding imports of sugar from India, which is a party to the Commonwealth Sugar Agreement, and whose interests will be covered under the arrangements agreed earlier for Commonwealth developing countries in Asia.

" These exchanges mean that the essential question of sugar from developing Commonwealth countries has been satisfactorily resolved. This represents a very substantial and satisfactory achievement.

" Secondly, the House will recall that I reported on the 17th of May that agreement had been reached on satisfactory arrangements for the continued import of certain important raw materials for British industry. The problem of alumina was the only one left outstanding. This has now been settled. With permission I will circulate the details in the OFFICIAL REPORT.

" The third question on which agreement was reached was monetary matters. The future of sterling is not strictly speaking an issue in the negotiations. The Six have, however, expressed interest in the problems which would arise from the inclusion of a major reserve currency in an enlarged Community progressing towards closer economic and monetary union. We on our side have made clear our readiness to envisage an orderly and gradual reduction of official sterling balances after our accession, but we have also made clear that three conditions would need to be satisfied:

  1. (1) any proposal would have to be acceptable to official holders of sterling, who would need an alternative reserve asset;
  2. (2) it should not impose an unacceptable burden on our own resources and balance of payments;
  3. (3) it should promote the stability of the international monetary system.
" In my statement in Luxembourg I reiterated that we were prepared to envisage an orderly and gradual rundown of official sterling balances after our accession. I undertook that after our accession we should be ready to discuss what measures might be appropriate to achieve a progressive alignment of the external characteristics of, and practices in relation to, sterling with those of other currencies in the Community in the context of progress towards economic and monetary union in the enlarged Community. I said that we were confident that official sterling could be handled in a way which would enable us to take our full part in that progress. I also said that in the meantime we should manage our policies with a view to stabilising the official balances in a way which would be consistent with these longer-term objectives.

" The Community took note of my statement with satisfaction and expressed their acceptance of our suggestions about the way in which this matter should be handled. It is therefore no longer an issue between us.

" In addition to these matters on which agreement was reached on the 7th June, I took the opportunity to explain to the Community the very great importance which we attached to a satisfactory agreement regarding fisheries. What we have asked for is a categoric statement that the present common fisheries policy would be modified after enlargement to meet the circumstances and needs of a Community of Ten. In addition we want a clear understanding from the start that there would be adequate protection for our inshore fishing grounds in particular. We have proposed that this could be secured by reserving exclusive fishing rights within six-mile limits—drawn from the base lines that were agreed at the 1964 European Fisheries Convention—together with an establishment clause which would be worked out to ensure that only vessels genuinely based on our ports and fishing from them could operate within these limits.

" We consider this to be a safe and reasonable approach, given our existing position and that of the Six, who already possess historic fishing rights of one sort or another round our coastline within the six to twelve mile zone. The really important thing to remember is the base lines agreed in 1964 from which the six mile limit would be drawn, as this means protection of such important areas as the Minches, Moray Firth, Clyde, Cardigan Bay, Morecambe Bay, Solway Firth and the Wash.

" The Conference agreed on procedures for considering this question.

" Finally, I drew attention to the need to agree on machinery for the new member countries, if they were to join the Communities, to be closely associated with all aspects of Community development and activity in the period, which could cover a number of months, between the signature of an accession treaty and its entry into force. It is clear that all concerned have an interest in making satisfactory provision for this period, since both existing and prospective members of the Community will wish to ensure that the development of the Community's policies during this period will proceed in a manner acceptable to all.

" We confirmed that the next meeting with the Community at Ministerial level would take place on 2Ist-22nd June."

Following are the details of the Communiqué. and Alumina imports referred to in the Statement

Communiqué issued after Consultations with the Developing Member Countries of the Commonwealth Sugar Agreement, 2–3 June.

Representatives of the Governments of the United Kingdom, Antigua, Barbados, Fiji, Guyana, India, Jamaica. Kenya, Mauritius, Swaziland. Trinidad and Tobago, Uganda, St. Kitts-Nevis-Anguilla, British Honduras, and of the East Africa Community and the Caribbean Free Trade Association met at Lancaster House from June 2 to 3, 1971. In the light of consultations that took place, Commonwealth Ministers agreed on the following statement:—

" The Governments represented expressed their satisfaction at the Community's readiness to offer the Governments concerned a choice of forms of association or a trading agreement and also at the readiness to recognise the United Kingdom's contractual commitments to all the C.S.A. member countries up to the end of 1974.

" They noted that, in negotiations with the enlarged Community on association or trading agreements, it would be open to the Governments concerned to act individually or collectively. They further noted that the negotiations were due to be concluded by 1975, and that pending conclusion their existing patterns of trade with the United Kingdom would be maintained.

" There was a full discussion of the Community's offer made on sugar after 1974. The British Delegation assured other delegations that the Community's proposals constituted a specific and moral commitment by the enlarged Community, of which the United Kingdom would be a part. The British Government and other Commonwealth Governments participating regard this offer as a firm assurance of a secure and continuing market in the enlarged Community on fair terms for the quantities of sugar covered by the Commonwealth Sugar Agreement in respect of all its existing developing member countries. The developing Commonwealth countries will continue to plan their future on this basis."

On this basis, Commonwealth Ministers agreed to accept the Community's proposal and stated that they would proceed accordingly, it being further agreed that Mr. Rippon would so inform the Council of Ministers of the European Community at their forthcoming Ministerial meeting with the United Kingdom, and would communicate to the Community the text of the agreed statement.

In the course of the meeting, Mr. Rippon gave the assurance that it would be the firm policy of the British Government to ensure that the proposal of the Community would be implemented in accordance with the statement recorded above in the event of the United Kingdom joining the European Community.

While recognising that the present meeting was concerned with the arrangements to apply to the developing Commonwealth sugar producers after Britain's entry into an enlarged Community, the Government Representatives stressed the importance of a continuing and viable international sugar agreement to all sugar producing countries. They expressed the hope that the enlarged Community would participate actively to this end.

THE TARIFF TRFATMLNT OF ALUMINA

At the Ministerial meeting in Luxembourg on 7th June the Community agreed to the following arrangement on alumina. The Common External Tariff on alumina would be suspended from its current level of 8.8 per cent. to 5.5 per cent. Imports of alumina into the United Kingdom would be free of duty until 1st January, 1976, would as from that date pay half the suspended rate, and would from 1st July, 1977, pay the full 5.5 per cent. rate. But it has been recognised that in the particular circumstances of the aluminium industry we should be able at any time after entry to apply in advance for a duty free Community tariff quota for the period after 1st January, 1976.

4.3 p.m.

LORD CHALFONT

My Lords, I am grateful to the noble Marquess for repeating that Statement made by his right honourable friend in another place. Before I put one or two questions to him. perhaps I may simply comment that in my view the essence of negotiations is that there should be concessions on both sides, and I express the hope modestly that perhaps we might one day hear a Statement which contains news of some concessions made by the other side. Also with the very best of good will, perhaps I may offer a word of advice which I hope will not be taken amiss. It might be better if the noble Marquess's right honourable friend did not make such resounding statements at airport Press conferences about the timetable of important political decisions which have not yet been placed before the Houses of Parliament.

Having said that, may I ask him a number of specific questions about the Statement which has been made to-day? First, can he clarify what is meant by, our suggestions about the way in which this matter should be handled"? That occurs early in the Statement, when the noble Marquess said: The Community took note of my statement with satisfaction and expressed their acceptance of our suggestions about the way in which this matter should be handled. We are not told what those suggestions were, and I wonder whether we may have some clarification of that. Then there is a reference in the Statement to, an orderly and gradual run-down of official sterling balances after our accession". May I ask the noble Marquess whether this means that we have undertaken to reduce our sterling balances by instalments? Is that the significance of the remark? If so, how does it square with the condition that it should not impose an unacceptable burden on our own resources and balance of payments? On the face of it, there seems to be a contradiction, and I wonder whether the noble Marquess can explain it.

Finally, may I make a comment on the reference in the Statement to the fisheries problem? We note, of course, that this is only an interim statement. No final solution has been arrived at. I am sure that Her Majesty's Government realise that this is a matter of considerable importance and concern to the fisheries industry in this country, and I am confident that they will bear that in mind in future negotiations.

LORD GLADWYN

My Lords, once again we on these Benches welcome wholeheartedly the progress in the negotiations recorded by Mr. Rippon, and extend to him and to his brilliant and devoted staff our sincerest congratulations on his success. It seems to us, if I may respectfully say so, with regard to what the noble Lord, Lord Chalfont, has just said, that the Six have in fact made very important concessions from our point of view, notably as regards sugar and sterling, on which points they have completely abandoned their previous position. If that is not a concession, I do not know what is.

From what we hear, it now looks as if there is a very good chance of an agreement before long on the other main outstanding points; certainly there should be if the Six accept Mr. Rippon's fishery proposals, and if our contribution to the Central Agriculture Fund is within the limits which have been rumoured in the Press. Even New Zealand now seems to present a much less formidable obstacle than it did. If an agreement satisfactory to us all on these points is shortly forthcoming it will be clear that the only real opposition, if I may say so, to our entry will come from those who oppose it on grounds of principle; namely, those who believe that it would in some way prejudice our national personality and integrity. Well, they are entitled to their view, which is often sincerely and passionately held, though how they can reconcile it with the fact that the proud French nation in no way shares it so far as they are concerned—or the Dutch, either, for that matter—is rather difficult to understand.

But, my Lords, there can he no doubt that this great issue does divide all the political Parties. So what we feel is that it cannot be decided on a purely Party basis but solely on the interests of the nation. We would therefore ask the Government to bear this consideration in mind when it comes, as no doubt it may shortly come, to getting at any rate the provisional agreement of Parliament to the arrangements for our entry which will have been reached after nearly a year's intensive negotiations.

LORD DAVIES OF LEEK

My Lords, we are all grateful to the noble Marquess for repeating the Statement, but having listened to it carefully it appears that all that is agreed upon in regard to fishing, for Cardigan Bay and elsewhere, is procedures for discussion. Secondly, if the noble Marquess will look at Le Monde for this morning, a copy of which is in the Library, he will find that there is not this wonderful solution of the sterling problem—far from it. And Le Monde is a paper of whose remarks most of us know the value. It points out the possibility.

I respect the ability and the thoughts of the noble Lord, Lord Gladwyn, who has had vast experience as one of our most excellent ambassadors in a number of countries abroad. Therefore, I hope that he will not think that I am in no position to talk in a deprecating manner about the point of view that the noble Lord, Lord Gladwyn, has taken. Nevertheless, I want to put forward a point of view which must be put to this nation. Parliament has no right to rush this through in this emotional manner—

SEVERAL NOBLE LORDS: Oh!

LORD DAVIES OF LEEK

I can put up with that quite easily, my Lords, because what I say is the truth. The people who are in favour of it are rushing it through just as emotionally as we who are against it are trying to stop it. That is all I mean, and it is quite logical. I want to make this clear: because 90 per cent. of this Parliament believes that a referendum may reveal an alternative point of view—

SEVERAL NOBLE LORDS: Order! Speech.

LORD JELLICOE

My Lords, if the noble Lord could ask a question it would be more in accordance with our usual procedure.

LORD DAVIES OF LEEK

Yes, my Lords—those were just my introductory remarks. I want to appeal to noble Lords. I have already been frustrated once and stopped from making a speech because of the long answer made by the noble Lord on the Industrial Relations Bill, so I will finish with this. I hope that there will be some opportunity for a serious discussion about the possibility —I do not want to upset the noble Earl opposite—of some form of referendum before either House of Parliament comes to a firm decision.

4.8 p.m.

THE MARQUESS OF LOTHIAN

My Lords, I should like to thank the noble Lords who have so far spoken. I thought the remarks made by the noble Lord, Lord Chalfont, were rather qualified but I took it that he was still basically in favour of joining the Common Market. I think the noble Lord, Lord Gladwyn, really answered his point about concessions being made on both sides. I believe this last meeting has shown, very properly, how far the Community has gone to help us.

LORD PARGITER

My Lords, does not the noble Lord really mean how far France has gone?

THE MARQUESS OF LOTHIAN

My Lords, I said the Community: it is Community negotiation. The noble Lord, Lord Gladwyn, asked me one specific question about the passage on page 4 of the Statement in regard to the way in which this matter should be handled. This does not refer to any detailed matters. This sentence refers to the paragraph above in general terms. Obviously these matters of sterling, when they come to be discussed after our accession, will be matters of great complexity. Indeed, they are really the province of my right honourable friend the Chancellor of the Exchequer, and I should prefer to leave it at that for the time being. I am very grateful to the noble Lord, Lord Gladwyn, for what he had to say, and I will certainly see that his remarks are passed on to my right honourable friend. I do not intend to get emotional, any more than the noble Lord, Lord Davies, but I confess I have not read Le Monde this morning; perhaps he will translate it for me on some other occasion. But, of course, I cannot speak for my right honourable friends regarding the matters that he raised, concerning rushing or referenda and that type of thing. I have no doubt that they will listen to his remarks.

LORD ROYLE

My Lords, may I ask the noble Marquess two very short questions. First of all, will the official agreements on sugar and alumina be published in the OFFICIAL REPORT in this House as well as the OFFICIAL REPORT of the other place? My second question concerns sterling balances and sterling as a reserve currency. May we hope that one day money will cease to be a commodity for purchase and sale?

THE MARQUESS OF LOTHIAN

My Lords, I hope not. I do not think so. As to the noble Lord's first remarks concerning the two agreements mentioned, I will certainly look into this point and make sure that the agreements are placed in the Library.

LORD BALFOUR OF INCHRYE

My Lords, on the matter of fishing, may I ask one question on the timetable? As I understand it, the Statement says that the Minister has asked for a categorical assurance that the present Six proposals are scrapped, and that he has put forward certain broad outlines for settlement. May we have an assurance that this matter will be settled as Her Majesty's Government consider satisfactorily, that it will be reported to Parliament as a specific proposal before the proposals are put forward as a complete entity, and that it is not left to subsequent negotiation in its final stages?

THE MARQUESS OF LOTHIAN

My Lords, we do not want to leave this matter over until the final stages, Obviously, I cannot give the noble Lord a categorical assurance that the Six will be ready at the next meeting with their answer to our proposals. My right honourable friend has pressed them pretty hard about this, and indeed he hopes that they will be; but I cannot really say more than that.

LORD BLYTON

My Lords, is the Minister aware, in spite of congratulations from the Liberal Bench, that many of us think it is easy to get agreement if you are prepared to sacrifice every British and Commonwealth interest to the Common Market? Is he aware of the Press statement that it only took four minutes to settle the sterling problem, a huge problem to this country? Is he further aware that there was a King of England who received subsidies from the French to do their bidding, and that now this Government are doing the French bidding to make us a vassal State?

THE MARQUESS OF LOTHIAN

My Lords, I do not think the noble Lord expects me to agree with any of those observations.

THE EARL OF LAUDERDALE

My Lords, may I ask two questions on the sterling agreement. First of all, are we to understand that the agreement, in the event of our entry into the Common Market, is that the sterling balances rundown would take place in advance of substitute arrangements for sterling balance holders in the primary producing countries of the developing world? My second question is this. Are we to understand from the communiqué that we are committed, in the event of our entry into the Community, to the target of progress to an economic and monetary union—this in advance of agreement on the defence of the countries so united?

THE MARQUESS OF LOTHIAN

My Lords, I think that progress towards an ultimate total monetary system for the E.E.C. will be extremely slow, and I should not think that the danger that the noble Earl has in mind would come to pass; but at this stage of time it is very difficult to prophesy exactly what the position will be. Regarding the question of the run-down of sterling balances, as was said in the Statement, obviously any proposals that may be made will have to be agreed with the current holders of sterling. That is really the most important part, that we cannot make any alteration in the system as it is without full consultation and agreement with other sterling countries.

LORD SHINWELL

My Lords, does not the noble Marquess realise that all that his right honourable friend the Chancellor of the Duchy has accepted from the Community, but in principle from the French, is a series of assurances and promises and compromises, for which Her Majesty's Government have no mandate whatever, either in the other place or in your Lordships' House? In those circumstances, would he not regard it as treachery to the British democracy and to the Westminster Parliament that the Government should rush this matter unduly without careful and meticulous consideration, without giving the electors of this country an opportunity of coming to a decision, upon which mandate the Government can act?

THE MARQUESS OF LOTHIAN

My Lords, I should have thought that this Government had a mandate to negotiate to see whether we can find terms satisfactory to enter the E.E.C. In fact this, I thought, was really following the policy of the late Government in this matter. I do not really think we can be accused of rushing matters. This has been going on for four or five years, if not more. I think talk of treachery really is not right.

LORD SHINWELL

My Lords, is the noble Marquess aware that I have taken part in every single debate on the proposed British entry? Perhaps it is just as well for your Lordships to know exactly what has happened. I took part in every single debate in another place on the proposed British entry into the E.E.C., ever since the first announcement was made by Mr. Harold Macmillan, and on no single occasion was a mandate given by the other place which would justify our entry into the Common Market. Is it not a fact—I am dealing with facts, and there is no emotion about this—that the only acceptance by the other place in all the debates that have occurred was in respect of whether the Government were entitled to proceed with negotiations, to engage in probing, but that no mandate whatever was ever granted by the other place to accept the assurances that the Chancellor of the Duchy now presents, not to the country but to the Press, and only in a very modified fashion to the other place?

THE MARQUESS OF LOTHIAN

My Lords, I do not really think I can add to what I said before. We have a mandate to negotiate and that is what we are doing.

LORD SHINWELL

Why do you not answer the question instead of running away from it?

SEVERAL NOBLE LORDS: Order!

LORD SHINWELL

My Lords, I am asking the noble Marquess why he does not answer my question; namely, did the other place ever grant Her Majesty's Government a mandate to proceed any further than negotiations?

THE MARQUESS OF LOTHIAN

My Lords, that is what we are doing. We have not proceeded any further than negotiations.

LORD CHALFONT

My Lords, may I put another question to the noble Marquess? I do not necessarily want an answer now, but perhaps we might take it up at a later date. Do I understand that the sugar agreement, as interpreted by the Commonwealth countries, has been positively accepted by the Six and not just negatively accepted, so to speak, by default'? I do not need an answer to that question now, but perhaps we might be enlightened on that at a later date.

I was surprised to hear the noble Lord, Lord Gladwvn, who, from his intervention, seems to be basically in favour of our entry into the Common Market, say that the Six had abandoned their position on sterling. This does not seem to me to be the position, but perhaps there is more than one way of looking at it. On the question of the translation of the article in Le Monde, if my noble friend Lord Davies of Leek is not available to assist with the translation, perhaps the noble Marquess might apply to his right honourable friend the Prime Minister.

May I make my own position and that of my colleagues on the Front Bench here quite clear, as the noble Marquess said that my remarks seemed to indicate that I was basically in favour of entry into the Common Market. The position simply is that if the negotiations produce acceptable conditions for British entry, then we believe it would be advantageous for this country and for Europe. We are not yet clear what those conditions are. When those conditions are clear, then we shall be able to arrive at a clear position.

THE MARQUESS OF LOTHIAN

My Lords, I entirely accept the noble Lord's point.

LORD FERRIER

My Lords, having recently visited the Orkney Islands and discussed the fishing problem with a prominent figure, may I ask whether the noble Marquess can confirm the report in the Press that the fishing industry interests and the Secretary of State for Scotland are going to meet, to confer again about the anxieties which exist over the importance of the 12 mile limit?

THE MARQUESS OF LOTHIAN

My Lords, I am afraid I have not seen that report, so I cannot confirm or deny it. I think it is more than probable.

LORD BARNBY

My Lords, can the noble Marquess indicate how soon it is hoped that a common unit of currency will be introduced? Much has been said about sterling balances. Because of the size of the sterling balances at the time, our recent devaluation cost those who had left their sterling with this country an enormous sum of money. That was brought about by variations in the balance of trade. Surely, until you get a common unit of currency, on the final unit, there must be economic imbalances between the different parties? Therefore, how can you avoid the likelihood of fluctuations in the value of the different currencies until you get a common unit of currency?

THE MARQUESS OF LOTHIAN

My Lords, I cannot give an answer to the noble Lord at the moment. I do not anticipate that we shall get anywhere near common units of currency for some considerable time.