EUROPEAN COMMUNITIES BILL

HL Deb 10 August 1972 vol 334 cc1278-358

3.0 p.m.

THE LORD PRIVY SEAL (EARL JELLICOE)

My Lords, I beg to move that the House do again resolve itself into Committee on this Bill.

Moved, That the House do again resolve itself into Committee.—[Earl Jellicoe]

On Question, Motion agreed to.

House in Committee accordingly.

[The EARL OF LISTOWEL in the Chair.]

LORD GREENWOOD OF ROSSENDALE moved Amendment No. 45: After Clause 2 insert the following clause:

Regional policy of the European

Community

". For the purpose of reaching agreement within any of the Communities on all rights, powers, liabilties, obligations and restrictions from time to time created or arising by or under the Treaties, and on all remedies and procedures from time to time provided for by or under the Treaties, any Minister of the Crown shall be guided by the following general principles concerning the regional policies of the Communities—

1. (a) the principle of redressing the social and economic imbalance between the regions of the Community;
2. (b) the principle of ensuring that the Communities' regional policies pay full regard to the problems of the declining industrial areas;
3. (c) the principle of making the fullest use of the Communities' institutions and in particular the European Investment Bank and the European Social Fund for the purposes aforesaid; and
4. (d) the principle of the proper co-ordination of Community and national policies for the purposes aforesaid."

The noble Lord said: I beg to move Amendment No. 45 on the Fourth Marshalled List. My noble friends and I have tabled this Amendment because it is clear that since 1967, at the time of the Wilson Government White Paper, the publication of the European Economic Community have tightened up considerably and seem likely to tighten up still further. In the view of many of us developments inside the Community on, for example, coal, steel and transport policy appear to threaten not merely our regional policies but also our whole freedom to plan the national economy of our country. To me there are three basic dangers in the E.E.C. concept. The first is that we shall have to make what amount to penal payments across the exchanges and, at the same time, lose big overseas earnings because Commonwealth preferences will disappear.

The second danger—and I think this is a generally admitted one—is that there will be a very strong pull attracting industrial development to the Rhine basin which will make the regional problems of peripheral areas like Northern Ireland, the North-East, South Wales and parts of Lancashire even more difficult than they are at present. The third danger is that British manufacturers will look more and more towards investing on the Continent. I do not think one can complain of that in the context of the new Community. Indeed, if directors were not now considering the possibility of investment on the Continent I think they would be failing the shareholders who have put their confidence in them. The problem I see is that the amount of capital which is available for investment is, unfortunately, limited, and if we step up the amount we invest in Europe there will be a correspondingly less amount to invest in those areas of our country which really need modernisation and bringing up to standards which are competitive and which the country will require them to achieve.

The question therefore arises, as I think many of your Lordships will agree, how far shall we be free to help areas of the country that need our help, and how far shall we be committed to propose solutions? We know from the Guardian and the Financial Times of yesterday, and from the Financial Times of July 31, that the Community at the moment are thinking out their industrial policies and will, in the fairly near future, be preparing a statement of commonly accepted policy about them. In the course of those discussions they will be defining the rules as to what can be done to help both the peripheral areas and to have effect over a wider range.

When the noble Lord, Lord Drumalbyn, replied to the debate on Friday morning on the Industry Bill I listened with particular interest to the concluding part of his speech, because he was courteous enough to discuss the point as to whether the Industry Bill itself was compatible with our obligations inside the European Community. The noble Lord told us that Article 92 was being interpreted by the Council of Ministers and that central and peripheral areas would be defined, apparently early next year. Indeed, he said: It will be during the course of the first six months of 1973 that what is meant by central and peripheral areas will be settled in our case. Then, as I think significantly, he went on to say: The importance of the maximum use of the Bill during the period of transition will not have escaped your Lordships' attention. Clause 8 brings this into relief by limiting the powers under that clause to the end of 1977."—[OFFICIAL REPORT, 4/8/72; col. 674.] So it is clear that Her Majesty's Government anticipate that there will be some reduction in our present power to help more depressed parts of Great Britain.

We know, of course, that Lord Drumalbyn's speech to the House last Friday really stems from the fact that the German Government had raised with the Community and with the Commission whether our Industry Bill was compatible with membership of the Community. Of course, the fact that Germany has raised this matter does, I think, raise somewhat disturbing questions in one's mind as to the extent to which the Government of another country can question the extent to which we are in a position to do what we believe to be right to help citizens in our own country. The attitude of the German Government—which I appreciate was a purely tentative approach, and they were entirely within their rights to raise this matter—only reflects what has happened in the Community from time to time. The Belgian Government, for example, passed certain measures through the Belgian Parliament and then found itself deprived of the freedom to implement them by the Commission, which threatened to take the Belgian Government to the court at Luxembourg if it did not rescind its plans. The Italian Government, too, has been treated in much the same way in respect of proposals it made to help the area of Trieste. As I drew your Lordships' attention during my Second Reading speech, France, too, has been ordered by the Commission to adjust regional policies because the Commission does not believe they are compatible with the general overall policy of the European Economic Community.

We find, too, if we look at the Guardian of a few weeks ago—indeed less than a week ago: August 4—that a report from Brussels says: The Common Market has agreed to a new directive, which will apply to Britain next year, limiting State aids to shipbuilding. We find there that the Commission will graciously allow us to subsidise shipbuilding within prescribed ceilings for vessels of 100 tons and fishing boats of 50 tons. It appears that if we want to give help on a more massive scale it will not be compatible with our obligations under the Treaty of Rome, obligations which many of your Lordships are only too happy to accept.

I think another way in which membership of the Community may well impair the development areas and the policy that so far we have been able to adopt results from the changes which are going to be made in our quota and tariff policies. I want for a moment to refer to Lancashire. I am bound to say that my mind goes back to my early days as a Lancashire Member, when my noble friends Lord Rhodes and Lord Shackle-ton and I toured the County Palatine studying the cotton textile industry. Following upon that we saw the gradual draining away of the lifeblood of East Lancashire and the other textile areas. It was a painful dilemma that the country was in; it was a painful dilemma that the people of Lancashire were in. We had on the one hand to do what we could to help the developing countries; and the exports of textile manufactures and yarns from the developing countries is of course one of the easiest ways in which they can achieve some small measure of viability. On the other hand, we wanted to resist a situation in which we saw one of the greatest industries of the country dying a slow death, while at the same time seeing the slow decline of the whole social fabric of the textile areas.

I have always felt, looking back, that the people of Lancashire were remark- ably magnanimous in their attitude to this dilemma. In a way they repeated once again what I think was one of their most glorious times, when they refused to work at the time of the Civil War because they were not prepared to work with cotton which had been grown and picked by slave labour. The people of Lancashire have never been narrow in that respect. They were prepared to pay a price to help the developing world, but what they could never understand was why other countries in the world, particularly the countries of Western Europe, were not prepared to share some of the burden with ourselves. It took literally years of work inside Parliament, inside Lancashire, inside the Labour Party, for us to reach a position in which the last Government really did something to help the textile areas, and now I think that that whole structure is going to be demolished.

I hope that my noble friend Lord Rhodes will speak on this matter, because I always speak with hesitation on textile problems when my noble friend is at hand. One finds now that pressure groups have been formed in Lancashire. The Financial Times. for example, talks about one which has been formed around the Oldham and District Employers Association: To stop a flood of imports next April, when the U.K. will be a full member of the E.E.C. It finishes up in this, I think, very pessimistic way: The British Government is in a tight corner. It would like to see Asian textile imports spread more evenly throughout the enlarged Community, but it knows the chances of that happening are slim. The present E.E.C. practice on cotton yarn imports makes it probable that the U.K. will become even more Asia's target market for textiles. It is a gloomy future for a county and an industry which has suffered so much in the past, that a responsible paper like the Financial Times should be able to make such sad prognostications about what is going to happen in the future.

I am sorry that the noble and learned Lord who sits on the Woolsack is not on the Government Front Bench this afternoon, because on Tuesday night my noble friend Lord Beswick advanced the arguments upon which democratic socialists have always relied. They have been the arguments that we have in this country something as nearly approaching the perfect democracy as I think we are likely to achieve, and that so long as democratic methods are available to people with grievances, well, then, democratic methods must be used. My noble friend Lord Beswick, in speaking of what we believe is the erosion of the sovereignty of Parliament under this Bill, said that the only people who would benefit would be the "Bernie Steers'. The noble and learned Lord who sits on the Woolsack said that he was wholly unable to understand what Bernie Steer had to do with Clause 2. If I may say so, that is the whole trouble with the noble and learned Lord who sits on the Woolack, and it is the whole trouble with noble Lords who sit on the Government Benches in your Lordships' House. It was the trouble with Lord North. Lord North could not understand what Burke and Fox were saying; the noble and learned Lord the Lord Chancellor cannot understand what my noble friend Lord Beswick is saying. Throughout history Conservative Governments have failed to meet the criticisms that have been made by moderate and reasonable men in time to avoid having to capitulate at a later stage to extremists. This has happened in the field of industry; it happened in the Commonwealth as a whole; and I believe that this is one of the great dangers of the situation into which we are heading.

LORD ROBBINS

I wonder whether the noble Lord would be good enough to explain to your Lordships a little further the analogy between Mr. Steer and Charles James Fox and Edmund Burke.

LORD GREENWOOD OF ROSSENDALE

I am sorry that so eminent and distinguished an academic as the noble Lord, Lord Robbins, should have also failed, like the noble and learned Lord the Lord Chancellor, to understand the point that my noble friend Lord Beswick and I are making; that is, that if we destroy the confidence of the people in Parliament, and if they come to realise that this is a Parliament which no longer has the power in its hands to solve the problems that are affecting them, we believe that their confidence in Parliament and their confidence in democracy will be correspondingly reduced. If that happens, it is not going to be noble Lords in this House who are going to benefit; the only people who are going to benefit are those political Parties in this country which preach extremist methods. If noble Lords deny to their fellow citizens the possibility of remedying their grievances by democratic methods, I shudder to think what the long-term result is going to be. The cavalier treatment of a Constitution which our people have come to regard as the very bulwark of their freedom and the basis of their political thinking, combined with the scant consideration which can be given, once this Bill goes through, to our problem areas, means that we are giving a handsome gift to those who preach totalitarian solutions to the problems for which we are asking democratic and properly taken remedies at the present time. I beg to move.

3.19 p.m.

EARL JELLICOE

I wonder whether I could come in at this stage, if my noble friend would permit me, because I have a feeling that we may be debating this Amendment for some little time. When I read through this Amendment I found myself assenting in turn to each one of the principles set out in paragraphs (a) to (d) of the new clause. I know that noble Lords opposite have been concerned about circumstances which have arisen recently concerning particular questions of regional aid within the Community, and the noble Lord, Lord Greenwood of Rossendale, mentioned the Italian case, the French case, and so on. In their Amendment the noble Lords who have put their names to it have rightly focused on policies and principles, and I welcome the opportunity at the outset of the discussion to confirm the Government's very firm adherence to the policies and principles embodied in the Amendment. We shall be glad to listen to the views on those policies and on those principles of noble Lords who wish to take part in the discussion on this Amendment, to which my noble friend Lord Drumalbyn will reply. I would go further than that. I hope, at least, to demonstrate that not only the Government but also the Community itself subscribes to the principles of the Amendment, as indeed the provisions of the Treaty of Rome demonstrate.

I find it difficult, however, to believe that the movers of this Amendment are really serious in suggesting that the senti- ments embodied in it, admirable though they may be, should be incorporated into this Bill. Our responsibility as legislators is, I submit, to confer powers, to lay down obligations, and to provide for rights and remedies in as clear and precise a fashion as we are able to do. However admirable the sentiments qua sentiments which we express in our debates may be, we have a firm tradition of embodying sentiments qua sentiments only in the pages of Hansard and we stop short of writing them into Statute. Indeed, if we were to include all our aspirations, the sort of aspirations which are laid down in this Amendment, one might reasonably ask why the Bill should pot favour other matters, why other general provisions should not be written into it, why we should not declare ourselves in favour of economic growth, or social justice, or removal of barriers to trade, or high employment, or the enhancement of the quality of the environment—a matter to which the Community is, quite rightly, paying increasing attention or—political toleration—

LORD BESWICK

May I—

EARL JELLICOE

May I finish my sentence? It is rather a good one, I think—or racial equality, or equality before the law, or equality between the sexes and so on. I am now very glad to give way to the noble Lord, Lord Beswick.

LORD BESWICK

I was simply going to caution the noble Earl. If he goes on with that lengthy list, we shall be very much inclined to write them down in Amendments for Report stage.

EARL JELLICOE

I am looking forward to Report stage, at least because it is in September. More seriously, I think we would endorse—certainly, I would endorse—the principles embodied in this Amendment, but I suggest to your Lordships that they are totally unfitted to be incorporated into Statute and, in particular, into this Bill.

When I spoke about regional policy on Second Reading, I made two points. The first was the general point that I believe that joining the Community will bring economic benefits to the regions. Secondly, I expressed confidence that the common rules of the Community would not inhibit the measures we are currently taking to intensify regional aid; measures which are embodied in the Industry Bill which has just passed through your Lordships' House. Returning to the first point, I must ask those noble Lords opposite who oppose entry at this time and possibly at any time, and yet who also express great concern about the future of the regions in the Community, what they really imagine the future of those regions to be outside the Community. We cannot bury our heads in the sand and pretend that at this point in history and in the development of industrial technology, long runs and all the rest of it, we are quite free as a nation to play the role we played in the 19th century. We all know how very strong is the fear of change in the human heart, not least I believe in the human heart which beats is these Islands. That is what I really believe underlies many of the fears which have been expressed about the impact of the Community on regional policy.

It remains my conviction, however, that unless we take the major positive step forward of joining the Community there is a very real danger that we shall fossilise our economy, and fossilise it not least in the regions. I cannot see how not joining will assist the regions. It was, I think, President Truman who coined the phrase, "If you can't stand the heat get into the kitchen." I want this country to get into the kitchen and I am not yet ready for us to be packed off to the attic. I think there has been a tendency on the part of some speakers, both here and in another place, to create the impression that the Community is hostile to regional policies. Nothing could be further from the truth. Let me turn to each of the four heads of the Amendment and demonstrate why the Government and the Community are already fully committed in the sense underlying paragraphs (a), (b), (c) and (d) of the Amendment.

First, paragraph (a), the principle of redressing the social and economic imbalance between the regions of the Community". As the noble Lords, Lord Gore-Booth and Lord Chalfont, pointed out on Second Reading, the very Preamble to the E.E.C. Treaty records the Community's commitment to reducing the differences existing among the various regions and the backwardness of the less-favoured regions. Paragraph (b) asks for full regard to be paid "to the problems of the declining industrial areas". The Government entirely accept that this is the major regional problem facing us. The Community, for their part, have the express provision in Article 92 of the E.E.C. Treaty, that aid to particular industries or areas with genuine economic or social problems is not subject to the usual restrictions which inhibit the unfair distortion of competition. Does any noble Lord suggest that these Articles have prevented the French and Italians, for example, from pursuing a wide range of vigorous regional measures? Can any noble Lord really claim that membership of the Community and acceptance of the obligations of membership have prevented the French, for example, from pursuing vigorous and effective policies of regional reinvigoration, of regional regeneration in, say, Brittany, or the South-West? A glance at Toulouse provides the answer. Can anyone claim that it has prevented the Italians from deploying a whole complex of measures to bring what was once one of the most neglected regions of Europe—the Mezzogiorno—into the main stream of Italian industrial and economic activity? I think one has only to ask the questions to know the answers.

Paragraph (c) of the Amendment puts the principle to the test by calling for the fullest use of the Communities' institutions and facilities. I would submit that that test has been passed by the Community. The European Coal and Steel Community, for example, has helped to retrain no fewer than 400,000 ex-miners and ex-steelworkers and has lent over 1,000 million dollars to modernise the coal and steel industries. I happen to have seen something of the Borinage, the old coal and steel area of Belgium, just after the War. That particular region has received a great deal of this type of assistance from the Community and it has managed—and, God knows!, it has its problems—as a result of Community policies, and as a result of the ability of the Belgian Government itself to operate its own policies within the Community, to achieve an extraordinary transformation without the attendant social and industrial problems which one might have thought would be there. Again, the European Investment Bank during the last year alone allocated 500 million dollars for projects of which no less than four-fifths were for regional development, and the European Social Fund has helped to retrain and resettle over 1,300,000 workers within the Community.

Finally, I was particularly glad to see paragraph (d) of the Amendment, which refers to the proper co-ordination of Community and national policies for these very purposes. This is indeed the key to understanding the recent individual cases to which the noble Lord, Lord Greenwood of Rossendale, has quite properly drawn attention. Of course there must be co-ordination of Community and national policies. Of course this is what joining a community means. From now on I have no doubt that we shall see the progressive development of a more comprehensive common regional policy in the industrial sphere; the sphere which means so much to us as a country. We shall be playing a full part in that policy, which has not yet gone very far and has still to get going. We shall be playing our full part in the development of that policy in the formative stage. The Commission consultative document, mentioned in yesterday's Financial Times article, which was referred to by the noble Lord, Lord Greenwood, is an illustration of the thinking that is going on.

But co-ordination, my Lords, also means that one country should not unfairly steal a march on its partners in the Community. You cannot have common principles, co-ordination and rules without some procedures for checking centrally the application of these rules; in short to see that the partners in this game play the game according to the accepted rules, a point which my noble friend Lord Lauderdale—I do not think he is in the House at the moment—was pressing for a few days ago. That is what these common rules are about. All I say is that Her Majesty's Government are confident that these rules and checks as they stand at the present time are both necessary and fair. They are also confident that in this area, in which we have great experience, in which we have most to contribute to the Community thinking—and, goodness knows! where we stand to gain a great deal if we can get Community thinking going our way—we shall have a big part to play in the formative stage. It will indeed be in our interests, as tariff barriers come down, to see that these rules are observed, and once we are members we shall doubtless be asking the Commission about regional aids in other member-States. This is a fact of life about belonging to an Economic Community and I have no doubt that we shall quickly adjust to it.

Those are the reasons why I can confidently assert that the principles of the Amendment are embraced not only by Her Majesty's Government, but also by the Community itself. Those, then, are the answers to the points raised in the Amendment. But my answer does not stop there. It is my belief that it is Community membership itself which will help the regions most. In our detailed study of the Bill it is only too easy to overlook the general economic advantages of the Common Market; the general economic advantages which will flow from giving our industries unrestricted access to a market of 300 million people. When we consider these matters—very important matters for this country—I hope that we shall not be too pre-occupied with looking at the negative and restricted aspects of regional aid. We do not want to concentrate exclusively on ensuring that there are no restrictions on what we from the centre can do to help the regions. At the end of the day, as our post-Second World War history illustrates, what we must do is help to provide the general context in which the regions are best able to help themselves; and the general context is the opportunity of economic growth which our membership of the Community will bring.

I remember very well, I think it was before the 1964 General Election, when the then Leader of the Opposition, Mr. Harold Wilson, was asked how his Party, if they were returned to power, would pay for the social policies which they were advocating. He replied simply, no doubt sincerely and also, I think, quite properly, "By economic growth". If I am asked by noble Lords opposite what we can best do to strengthen the sinews of our regional growth, I would reply, equally sincerely, "with economic growth in the United Kingdom as a whole". It is my belief, and nothing that I have heard in our debates in these last ten years or so has shaken me in this belief, that access to this Market of nudging 300 million people gives us a chance of sustaining a rate of economic growth as a nation which hitherto has totally eluded us for the past fifty years or so.

I would add to this general argument one further important consideration. Looking back over the last 500 years or so I find it very difficult to assert categorically in one way or another whether our geographical position to which the noble Lord, Lord Greenwood, referred has helped to sustain us or been a factor inhibiting our economic performance as a nation. There may be those, especially perhaps those of us who come from regions rather remote from the industrial heartland of the Rhine or the Ruhr, who may fear that willy-nilly membership will magnetise economic expansion towards the heartland of Europe. This was the fear to which the noble Lord, Lord Greenwood, gave expression. I would submit that we cannot change the geographical facts of our life, but we can change the artificial barriers which we impose upon ourselves.

We have managed for a number of centuries now to live with the facts of our geography, but in the last decade or so we have seen a growing tendency on the part of some of our own indigenous industries to leapfrog into Europe—or at least for parts of them to project themselves into Europe in order to jump the tariff barriers. That has not been a geographical jump over the Channel, but a commercial jump over tariff barriers. We have also seen a tendency for what I think has been termed foot-loose international capital to establish itself within the tariff barriers of the Community rather than within the United Kingdom, to be within the Common economic tariff rather than outside it.

All is here for the winning, and I am quite certain that we shall be in a much stronger position investment-wise, be it investment by our own indigenous companies on our own soil or be it by, for example, investment by American or Japanese companies, to stimulate or attract that investment as the case may be, if on top of our possible geographical disadvantages we do not pile tariff barriers as well. That, if I may say so, is the general reassurance—and I am thinking of what the noble Lord, Lord Hale, said on Second Reading—which the Oldhams of this world are looking for. Certainly let the Oldhams be helped by specific measures. I know of none of our specific measures which will be inhibited by our membership of the Community, but would the noble Lord and other noble Lords, faced with the dilemma which the noble Lord, Lord Hale, posed to us on Second Reading, deny the fact that given the right economic circumstances and the precious capital assets of skilled manpower it would mean that the Oldhams of the world will not only be keen to help themselves but be able better to do so in the context of the extra opportunities and the added opportunities which membership of the Community will give us if only we are prepared to seize those opportunities?

I would not seek for a moment to contest the principles embodied in this Amendment. They are principles with which I happen to agree, but they are principles to which the Community subscribes, principles which are in no way incompatible with our membership of the Community but, I think, principles which it would be totally wrong for us to write into the context of the Statute law.

LORD LEATHERLAND

Before the noble Earl sits down I wonder whether he would clarify, probably for the benefit of history, a statement he made in the second part of his speech. He alluded to what an American President had said, and stated it as, "If you can't stand the heat, get into the kitchen." My recollection is that the American President said, "get out of the kitchen". In view of the confusion in the noble Earl's mind about the meaning of the word "in" and the meaning of the word "out", are we to assume that when the noble Earl tells us to go into the Market his subconscious is telling us to stay out?

EARL JELLICOE

For the benefit of history and of posterity, which I think we are talking about here, I can confirm that the noble Lord, Lord Leatherland, is right in saying that the American President said, "If you cannot stand the heat, get out of the kitchen." I believe that we can stand the heat, and that therefore we should get into the kitchen—in this case the kitchen of the Community.

3.40 p.m.

LORD BARNBY

In moving this Amendment the noble Lord, Lord Greenwood, seemed to challenge whether these provisions really could square with the requirements of our entry into the Community. The noble Earl has made a powerful reply which should suffice to meet those points, and it will be interesting to see whether succeeding speakers from the other side can raise arguments which challenge some part of what the noble Lord has said. The noble Lord also made other remarks of an economic character, on which I should like to make a few comments. First of all, he raised the point that there was doubt as to whether it was proper that we should contemplate a substantial or even massive investment of sterling in the Community, and that if we did it would possibly impair the volume of funds available for effective development and reconstruction in our own country. Now the Industry Bill, to which the noble Lord referred, was very fully explained to us and dealt with in Committee last Friday by my noble friend Lord Drumalbyn, and he of course told us what very large sums of money the Government have committed themselves to for development under the Bill.

The noble Lord, Lord Greenwood, referred to articles in the Financial Times and the Guardian. I did not read those in the Guardian but I did read the articles in the Financial Times, and it is interesting that only last week there was the expression of definite concern as to whether or not, since we had so large a volume of "hot money still remaining in this country, and since the money supply was being increased at such a rapid rate of flow (which inevitably, with increasing supply, must raise the prices of everything in this country), it might well be that the hope of returning to a fixed basis on the exchange before we enter would be dangerous because if the pull on the total volume had been so great before we entered there might well be too serious a drain after we got in, and the exchange might have been fixed and there would be peril in holding it. That seemed to raise an important point, with which no doubt succeeding speakers from the Government Bench will deal.

But, beyond that, the noble Lord also referred to the concern which was held about the flow of merchandise into this country, and he happened to refer to the textile industries. It is that which prompts me to intervene, mainly because there undoubtedly is, as he explained, great concern, certainly in the textile industries, and possibly also in others, as to what may be the effects on our industrial employment of a greater inflow of merchandise. For myself, I take it that we can rely upon the provisions that the Government have made with regard to entry adequately covering that point, but it is one which is quite sufficient to cause anxiety. I look at it from a succeeding point: that of an industry which is very much affected by the terms of the Industry Bill and these massive injections of Government money on so large a scale, such as in the case of the ship-constructing industry, quite apart from the ship-building industry, which is in a rather different category. Now we know that the textile industries have seen a massive disposal of employment. I do not know what the position is in cotton textiles, but I see that the noble Lord, Lord Rhodes, is here and I hope he is going to speak and perhaps make some comment on that; but recently in your Lordships' House I quoted the fact that the wool textile industry, with which I am more familiar, has already, in the last 12 years, I think, disposed of some 80,000 workers. That has to be considered in the light of all these arrangements with regard to the E.E.C. and the admission that vast subsidies for the shipbuilding industry are justified because our foreign competitors all over the world are doing the same thing. Such a massive disposal of labour as I have indicated is taking place largely as a result of the advance of science in all ways: a task once employing 100 operatives can now be done, because of the advance of science, with a very much smaller number.

What a curious thing it is that this country at the moment, in the eyes of the Continent as a whole and the rest of the E.E.C., should be under the influence of a demand from a section of the community, which is very small in number in comparison with the textile industries, and should be thrown into great economic chaos when again the cause is the advance of science—containerisation, and the inevitable development of it all over the world, as can be seen by anybody who goes to the new ports, quite apart from the old ports! For example, look at a port like Felixstowe, with vast acres covered by containers which may be emptied or filled very quickly. On a visit down to the West Country yesterday I passed a train loaded with these things. I do not know how many there were, but there was a great number of wagons with these 40-ft. containers on them; and one thinks that only two men are needed to move such a container. What an astonishing thing it is that the whole country can be disrupted by the charge that the same men who were employed before should be employed now, remembering that this reconstruction and the disposal of such vast numbers of people in the textile industries has been absorbed without the kind of disturbance that the present troubles are all about.

These are interesting points which the noble Lord has raised, and it is for that reason that I have intervened. I doubt not that there will be some reference by subsequent speakers for the Government to, anyhow, the financial investment side, because that angle, with regard to the exchange itself—the uncertainty of it as long as we float, which I do not challenge—is of course one thing which is causing a lot of anxiety.

3.50 p.m.

LORD RHODES

We have listened to a defensive homily from the Front Bench opposite directed to opponents of entry into the Common Market. Such a thing does not apply to me, because I want to go in. There have been enough remarks already to justify a few comments on some of them. The noble Lord who has just spoken said he presumed that the Government had made provision for the textile industry and its entry into the Common Market. I can assure the noble Lord that the Government have done nothing of the kind. I shall give the Minister the opportunity—and stay with him to-day as long as he likes—to answer the question which I raised on Second Reading and which I am going to raise again now. Whether the occupants of the Front Bench opposite are assiduous in their reading of the Bible I do not know, but I happened to go to church the other week and the 28th verse of the 14th Chapter of St. Luke was read. It said this: …which of you, intending to build a tower, sitteth not down first, and counteth the cost … ? I am doing a bit of cost estimating this afternoon, and I hope that by the end of what I have to say it will have sufficiently sunk in to prompt the Front Bench to go to the Box over there and get some answers for me.

It is true that we are the largest importers of textiles in the world. What is going on at the moment is more serious to our textile industry than when the President of the United States whacked on those massive quotas last year disrupting trade throughout the world. We know that to be true. In this country we know that we are hoping to go into an economic and customs union. As I explained before, the customs union of which we are members is a simple one. It is one which we have grown up to understand within the British Isles. We have come to accept the fact that goods can go over boundaries; we never notice it; it is not a problem with us.

Goods go over boundaries whether in Wales, Northern Ireland, Scotland or England. One would assume that a customs and economic union such as we are going to join would have a system whereby goods could also circulate freely from one country to another, but this is not the case. In his rhetoric at the end the noble Lord was saying that the Oldhams of the world will do this, that and t'other and that the Oldhams of the world will benefit from this and that. One Oldham that we know is asking the questions that I am going to address in a moment to the Front Bench and some answers are required. It is all right in a general way giving us the benefits of this, that and the other—we have heard all that ad nauseam. We want some facts and we want to be reassured.

The noble Lord who spoke at that Box talked about conferring benefits on our regions by joining. There will be no benefits to our regions by joining if some of the basic difficulties that we know of now are not resolved. I will give two examples why goods cannot go freely from one country to another. One is because of value added tax. As the matter stands it is necessary to repay value added tax to the exporter and to charge it to the importer in the receiving country. Another reason why goods cannot circulate is that there is no common textile policy throughout the union. Every country in the Common Market has its own set of rules, rules built up over the years to protect itself from the onslaughts that we have had to put up with from low-cost countries.

When I say that they have protected themselves and have their own rules, what is the situation when you have foreign goods going into Germany and they want to export them to France? If a German wants to export cotton goods to France, France will not have them. So there must be an agreed Common Market textile policy before we go in, if we are going to enjoy all these marvellous benefits. Any textiles which have entered the Common Market and paid the appropriate Common Market duty ought to be in a position to circulate freely right away through the length and breadth of the countries. What the Oldham of Lancashire wants to know—I cannot see the noble Lord; he keeps dodging behind the Clerk at the Table. I like to look at the chaps to whom I am talking. Let me ask first: how far have Her Majesty's Government got in the negotiations on our trade? Have they secured recognition by members of the Community of the fact that there is a real necessity for a viable textile industry within the Community itself? Secondly, how far have the Government progressed towards an understanding with the E.E.C. countries about the necessity for quota restrictions for hard-pressed sections of our industry and of their industry? Thirdly, if quantitative restrictions are in operation have they obtained acceptance of the principle of free circulation? If the principle of free circulation has not been accepted in the E.E.C. there will be grave difficulties for us in the textile industry in this country. Never mind all the high-falutin talk about benefits to the regions! If we "start wrong", we shall go on wrong.

My fourth question is this. What response is there to the proposal that there should be a new general agreement, similar to the long-term agreement for cotton but including man-made fibres? Has any attempt been made—and this is my fifth question—in the negotiations with the countries of the E.E.C. to persuade them, on the basis of averaging, to reach an appropriate level for imports to the Community as a whole? I will not say any more; I have said enough. I await the answers to those five ques- tions. Oldham awaits the answers to those five questions. The whole of Lancashire awaits the answers to those five questions. The whole of the textile trade, wherever it may be, needs the answers to those five questions.

I do not suppose that there is anybody in this Chamber who has not at some time in his life wanted to be associated with a cause led by bright-eyed visionaries to a promised land. I know that I have. I have wanted to throw my weight into various causes at various times in my life. I expected that to go into the Common Market would be such a cause. But instead of bright-eyed visionaries we have got glassy-eyed prevaricators. The Committee can amend that phrase and I will withdraw "glassy-eyed prevaricators" if noble Lords will come up this afternoon with the answers to my five questions.

4.2 p.m.

LORD CITRINE

I have not engaged frequently in the debates of this House in recent years, mainly because of a physical disability of which I know some noble Lords have knowledge. I have taken no part whatever in the debates that have taken place in regard to entry into the Common Market and I have many times asked myself about the fundamental principles behind such an action which is bound to affect the lives of our people for many years to come, no matter what may be thought about repeal and that sort of thing. I am, as most people know, a trade unionist. I have held important offices in that organisation. One of them was the Presidency of the International Federation of Trade Unions. I held that office for 18 years, until the dissolution of the Federation and its replacement by a World Federation. I therefore can claim that in the sphere of trade union collaboration with unions of all countries I have tried to prove myself a sincere internationalist.

I cannot in those circumstances find myself in hostile opposition to everything that this Government have done. But that does not mean for one moment that I have felt that they have handled this matter with the tact and diplomacy with which they could surely have secured a very strong approval from the public of this country for going into the Common Market. Neither does it mean that I approve the arguments that have been so often raised in the course of the debates on the part of the Opposition. It is perfectly clear to me, as it has been in my trade union life, that whenever an individual organisation in possession of complete autonomy in regard to its own affairs has been considering an amalgamation with some larger body there arises a fear of loss of sovereignty. I have seen this so many times that it has become almost a tradition. I have no doubt at all that the root of the Labour movement's opposition to going into the Common Market lies largely in that fear as to what may happen in the Market to lessen the pace either at which social and economic reform can take place in this country or, possibly, of the inauguration of measures to that end. Obviously, the risk of the loss of some political sovereignty is involved in joining any kind of European or world organisation, whether it be the United Nations or any other body. I consider that on broad principle it is wholly anomalous for the Labour movement to occupy a position of solid opposition to measures of this kind. This opposition is based on distrust of those who are advocating and organising the entry. I feel quite sure in my own mind that had the Government used the normal statesmanship that a Government should possess and had they consulted the people of this country, as was proposed by the Opposition, much of this misunderstanding and fear could have been removed.

I say that I have been an internationalist and I remain one. But that does not mean for a minute that I am anything like what used to be described as a "little Englander" or anything of that kind. Indeed, I think it natural (and it certainly happened to me that when I was abroad) to feel prouder of one's own country and its institutions than perhaps is the case when one is at home. That did not mean that I was blind to the excellence of much that I saw, both in the political and economic spheres, of other people and other countries. Neither was I blind to the friendliness which, in this age of competition between nations in the economic sphere, international organisations alone can bring.

I find it extremely difficult to take up any position in opposition of entry into the Common Market. I say that for two reasons: not only the basic one that I have already stated but because—and I have stated this on more than one occasion in this House during the life of the Labour Government—I do not think that a non-elected Chamber such as this has, on any question of major principle, the right to reject the will of the Commons, and I preserve that principle with regard to this matter. I listened with the greatest attention to the admirably phrased and reasoned speech of the noble Earl, Lord Jellicoe. He is always very logical and equable and friendly, and that adds materially to the difficulties of those who want to oppose the views that he states. I was very agreeably surprised when he announced in broad terms—and in some cases in specific terms—his broad acceptance of the major principles in the Amendment. At one stage I wondered whether he would accept the Amendment, with which it is perfectly obvious he has no fundamental disagreement. His case was built up entirely upon administrative considerations—I beg the noble Earl's pardon; I notice that he shakes his head, so I must have said something with which he disagrees.

EARL JELLICOE

I hesitate to intervene, but it was more than administrative inconvenience. I think there are many precedents for not importing this type of general principle into a Bill specifically designed to enable us to discharge the obligations of accession.

LORD CITRINE

That is merely a misinterpretation of my use of the word "administrative". I understood fully the position which the noble Earl was postulating. I had hoped that he would have made—how shall I say?—some announcement of Government acceptance. True, he referred to the Government broadly agreeing with the principle but, if I may say so without offence, it is one thing for the Government to declare by a Resolution of the House and another thing to have to pick it out of the speech of a Minister.

If this Amendment is voted down it will mean in the minds of a great many people that the Government have adopted an extraordinary position. It will not be realised, even on the Continent of Europe, by millions of people that there are—how can I say?—no reasons of material difference between what the Resolution says and its acceptance. What is going to be the fate of the Amendment? I know quite well. I have seen it happen in this Chamber too many times. This is an non-elected House. Your Lordships' House may always be put in the position of an organised Conservative majority voting down any measure with which it disagrees. I have no doubt that that sort of thing will take place this afternoon. It is not the merits so much that count in matters of this kind. I have seen attending your Lordships' House people whom I have never seen before but who have been brought in. I suppose they could be put in the category of the "backwoodsmen" of whom we heard a generation or two ago.

I wish the Government could find it possible to make a declaration of these principles in some form of resolution that is tangible and which could be read easily and publicised. With respect, that would get a much wider circulation than the speech of the noble Earl the Leader of the House. So I am in this dilemma. I believe in these principles; the Leader of the House believes in them: the Opposition believes in them; yet, apparently, we are going to vote them down. Why, in the name of goodness? For these are instructions to our own representatives. I am not a prophet, but I have seen that happen so often and therefore I am very much concerned that on matters such as this there should be agreement. These are going into our own Bill. They are not an instruction to the Community generally; they are an instruction to the people who will represent the British Government in the Community and to other representatives. I regret very much that in a measure of this high importance we are in danger of fighting a sham fight; that is all it comes to. I am sorry that my inadequacy—I did not intend to engage in this debate—has prevented me from developing this case in the way in which I should have liked.

4.15 p.m.

LORD BESWICK

I am sure that we should all wish to welcome back my noble friend Lord Citrine and to say what a great pleasure it is to hear him speak again with all his old vigour. I agreed absolutely with what the noble Lord said about the fact that if the Government had gone about this business in a rather different way and had consulted the people rather more fully, the position to-day would have been different. I think the position to-day would have been very different indeed, had the Government really endeavoured to tell the people what was involved in the matter before us.

I also agree with my noble friend about the admirable phrases used by the noble Earl, Lord Jellicoe, in his speech. The noble Earl made a great speech. It was not quite so great as one I heard many years ago from Mr. Fiorello La Guardia, then the Director General of UNRRA. Speaking before the United Nations Economic and Social Committee and appealing for the extension of UNRRA, which I suppose was, after all, a form of regional aid, in the greatest speech I think I have ever heard in my life, La Guardia said he would not be with us much longer and that he hoped the resolution he moved would be accepted. But, he said, there are as many ways of killing a resolution as there are of killing a cat, and one of them is by agreeing with it in principle. That is what the noble Earl has done to-day. He has agreed with every principle we have put forward but he says he cannot accept the Amendment.

The noble Earl advanced the two classic arguments against those of us who try to suggest that regional aid will be more difficult after we go into the Market. The first point he made was that there is nothing we can do now which we shall not be able to do after joining. He made the point, quite rightly, that Italy, like us, has done a lot, as a member of the Community, by way of regional aid in the southern part of Italy; although Italy, like us, still has a serious regional problem. But the noble Earl advanced the theory that there were no techniques which we could apply now that we could not apply in the future.

The second point which those who oppose us on this put forward is that in any case it is possible to do far more for the weak regions if we have a strong centre. It is those two points with which I should like to deal. I accept absolutely that it is impossible to be dogmatic about what machinery we shall be able to use on entry. It is impossible to be dogmatic because, for one reason, the machinery is not yet decided. As I understand it, in the Treaty of Accession we are given until July of next year to work out and discuss and negotiate the machinery by which we shall implement Articles 92 and 93 of the Treaty of Rome. Therefore one cannot be dogmatic one way or the other as to what will be possible by way of regional aid. But the overriding fact is that no matter what agreement is reached before July of next year, no matter what machinery may exist, we shall not have the essential power to operate it. We shall not have the essential central power here to operate machinery to help our regions. When we lose the power to control the movement of capital we lose the power to help the regions of our country.

I will not go into the arguments about the I.D.C. again, but everyone will know—I referred to the argument in earlier debates—that it used to be possible to say to an industrial company in this country, "You cannot set up a new business in the place you propose. You will get a certificate only if you agree to go to one of the regions." That used to be a very potent instrument, but it will be useless if the company can say, "If you do not want me to set up an extension in the South-East I will go to Belgium, France or Germany. "We cannot stop them. Once one has free movement of capital it is quite impossible to control the location of industry and it will therefore be quite impossible to implement any serious machinery to assist the regions.

My noble friend referred to the centrifugal forces, as he called them (I think the noble Earl referred to the "magnetic forces"), of the industrial centres, which will of course be the centres of markets on the Continent. If we have this attempt to restrict growth in the South-East of England because we want to see development in the North-East or the North-West, industries will move to the Continent, partly because they cannot go to the South-East but also partly because the greater part of this 300 million people market about which the noble Earl is talking is on the other side of the Channel. There will then be this great incentive to go and expand there.

The House may recall the exchanges that I had on this point with the noble Lord, Lord Stokes, in an earlier debate. At that time I tried to make the point that as food prices here go up (and they have gone up tremendously since we had that debate six months ago) and as wage claims come in—as they inevitably will as a result of increasing food prices—the cost of production will also go up. When that happens the temptation to open factories near the centre of the European Continental market will be tremendous. Having had the pleasure of getting to know the noble Lord, Lord Stokes, a little better since that exchange, I do not believe there is a more patriotic industrialist in the country than he.

But it is interesting to read what has been happening in the motor car industry. In an article in the Financial Times on August 7 of this year there was a very penetrating study of that industry. It was pointed Out that: Ford of Great Britain, when still a partly independent company, built up these markets, and thus it was British Anglias and Cortinas rather than German Taunus which were sold. But with the establishment of Ford of Europe, British or common designs were adopted by both German and British operations. So German Capris and Escorts replaced the British cars. With the introduction of the Consul/Granada, the pendulum has swung right over. British output, running at 1,000 cars per week, is destined for the British and a few minor export markets. German output, at 1,000 cars per day—five times the British level—is exported to all the major Continental markets. The estate and coupé versions of the Granada are being built only in Germany. Then take General Motors, the other great concern in this country. The same article says: General Motors already had a much more successful German subsidiary, in Opel, than Ford. In the past few years, as the German car market has raced upwards and Opel has pushed ahead in the French, Dutch and Swiss markets, the disparity in scale between GM's German and British operation has become marked.…The German company alone is permitted to export to the valuable U.S. market, while Vauxhall is allotted Canada instead. As for Leyland, the article continues: GM and Ford have favoured Germany either consciously or automatically. British Leyland, too, has been forced to balance its extensive European sales with investments in Continental production. It has now bought Innocenti in Milan and a half-share in Authi in Pamplona, which builds Minis for the Italian and Spanish markets. The plant at Seneffe, built by the enterprising Belgian concessionaire has been bought and significantly expanded. These three operations will build 300.000 cars by 1974–75, or roughly one-third of British Leyland's total. There we have the position in the largest single exporting industry in this country where the inevitable pull is towards the centre of the market. That process is going to be more accentuated when we have the free movement of capital.

The situation will of course become even more aggravated when we have a common currency. During our earlier debates on the White Paper nothing was said about the Werner Plan. I will guarantee that not a single noble Lord on the Back Benches opposite has even read that Plan. I doubt whether there are more than a dozen people in the whole House who really understand the significance of a common currency. There may be some—and the noble Lord, Lord Gladwyn, is undoubtedly one of them—who understand it and who say that it is a good thing. That I respect. It is a matter for discussion; one can say that it is a good thing or a bad thing for the economy of Europe as a whole. What one cannot say—and I beg noble Lords to face up to this fact—is, "I am going to have a common currency and I am going to control my economy in Britain separately from the rest of Europe". That just cannot be done; it is a contradiction in terms. Any attempt to control the regions is absolutely out of the question.

Again the Financial Times has something to say about this. In passing, I would say that although the editor of the Financial Times is one of the most assiduous troopers through the Lobbies in support of the Government, all of the facts which his staff produce controvert the fact which he uses to support the Government. This is what the European editor said on June 26: Before the crisis, it seemed possible that the Summit would have to be postponed because of a dispute between the French and the Benelux countries over the creation of a new political secretariat, and over the democratic evolution of the Community's institutions. If to-day the chances of a postponement seem greater than ever, it is for the more serious reason that the Six embarked upon their plan for economic and monetary integration with totally inadequate forethought… The reasons for this state of affairs are familiar, obvious and regrettable. The Germans don't trust the French, and the French don't trust anybody. As we keep saying, Her Majesty's Government are proposing to hand over economic control without trying seriously to set up an adequate form of political authority.

LORD GLADWYN

Does the noble Lord maintain that a common monetary policy is totally incompatible with a sensible regional policy?

LORD BESWICK

I am simply saying that once there is a common currency we in this country will lose any chance of controlling our economy. There will be a laissez faire economy and we will no longer have a nationally planned economy. Eventually there may be in Brussels an economy controlled by the economists which will be more advanced in the way of an economically controlled economy than anything thought of so far. Indeed, in ten years' time one may have in Europe a Communist form of economy, but one will not have in this country, for the benefit of the people of this country, a democratically established form of control. It is a contradiction in terms.

LORD HANKEY

If the noble Lord is so sure about that, may I ask him to explain how it is possible for Her Majesty's Government to operate a type of regional policy with only one type of currency in the United Kingdom?

LORD BESWICK

Because we have in Westminster a democratically elected Parliament which governs these matters. They do not have in Brussels a democratically elected Parliament to control the economy of Europe. That is what I have been trying to say all along and I am sorry if I have not made myself clear. I do not say that this Amendment would put all these matters right. It would, however, go some way to meet the points made by my noble friend Lord Citrine. It would represent what the lawyers call when justifying other Parts of the Bill "an evidential clause". It would be some indication that we are serious in our desire to do what is possible in this context. This is one occasion when the noble Earl, Lord Jellicoe, could say to his Government colleagues, "We are doing absolutely no harm by accepting this Amendment because we agree with everything it says. Let us accept the will of the Committee in this one particular and write this into the Bill."

4.32 p.m.

BARONESS ELLES

I intervene to comment briefly on the question of regional policy in general. There seems to be among your Lordships a great desire to quote from our favourite "pink paper", the Financial Times. In to-day's edition of that newspaper is an article concerning regional policy. It states: The European Communities' Executive Commission have proposed a new kind of help to retrain workers leaving both the agriculture and textile industries to the tune of 60 million dollars this year, and the fund will reach 540 million dollars by 1975. This is relevant to the discussion we are having and I should like to add that quotation to the many that have been given. I have never had the privilege of being a trade unionist or an employer but I have seen the effects of low earnings on many families and the effects of young people leaving school and having to queue up for jobs which are not there. I have also travelled widely in Europe over the last twenty years. I therefore speak from personal observation and knowledge of the rapid and remarkable changes that have hapened in the economies of the six Community countries. One can only deduce from this that they must have something that we do not have.

Much has been said about Italy and their regional policies. I listened with interest to one noble Lord referring to the magnetism of money going to the centre of the Community, but the whole purpose of Italian regional policy is to draw money away from the centre. When populations from Sicily and elsewhere were going to Turin and Genoa, crowding out towns which did not have the infrastructures to meet a vast influx of people, it was clear that a new policy had to be found. The E.E.C. regional policy is based on bringing wealth to the regions rather than drawing capital to the middle of the Community. The whole point of their regional policy is to encourage investment and capital to go to the regions.

I do not claim to be a capitalist, but I understand that people with capital invest their money in areas where they will get the most return; and this is the basis of the regional policy in terms of capital investment. Anyone who has been to Brussels and the European Commission can only have been impressed by the real intellectual integrity of the people working in the Commission. They are seeking to achieve regional policies which will solve the problems not only of the Six in the Community. When we ask, "What do you think about Britain's entering the E.E.C.?", they reply, " We are waiting for you to come in. We are not a Community of Six any more. On January 1, 1973, we shall be a Community of Ten." This puts a completely different light on the problem.

I conclude with what I thought was a touching remark made to me by an old age pensioner. I have no doubt that some of your Lordships are also old age pensioners, though not living on supplementary benefit. This pensioner said, "I realise that in my lifetime I shall probably not see the benefit of our country joining the Community, but I want you to go in for the sake of my grandchildren. If you do not, with your Government, go into Europe you will be betraying the youth of this country."

LORD SHINWELL

Having listened to several speeches of a Second Reading character, I will address my remarks to the Amendment. To comprehend fully what the debate is about I feel it necessary to repeat a little of what the noble Earl, the Leader of the House, said in support of the Government's case. It was natural and inevitable that he should have taken some time to argue the case on behalf of the Government, but in my view that case can be stated in a sentence or two. It is that the Government regard the principles embodied in the Amendment as impeccable and to those principles they offer no objection. The noble Earl's objection is based on the fact that it would be unwise to incorporate those principles in the Bill.

Much of the argument adduced by the noble Earl was of a Second Reading character. A good deal of it was the pocket fluff, so to speak, which one is bound to get when arguing the sort of case the noble Lord had to adduce. If what I have described in a sentence is the case which the Government have against the Amendment—as my interpretation of what the noble Earl said has not so far been challenged I take it that I am correct—then I go on to ask the noble Lord a simple question. If he objects to the principles of the Amendment being embodied in the Bill, may I ask him what view he takes of the principles which are already contained in the Bill?

It might be helpful if I were first to try to define the word "principle". There will be varying views of what a principle embodies, but I think the Committee will find acceptable my theory that a principle is an idea, a somewhat amorphous idea, lacking detail, but a notion which is suggestive. It is possible to embody a principle in a variety of detail and it is something of a philosophical character. If your Lordships accept that as a reasonable definition of a principle, then the Committee must accept that quite a number of principles are already embodied in the Bill. I will direct your Lordships' attention to a few of them. First, early on in the Bill we find a reference to the duty imposed on the Commission, or whoever will be responsible for implementing the Statute, to impose customs duties. There is the principle relating to the imposition of customs duties. That is a principle with nothing in detail as to whether it should be based on this statistic, that statistic, or percentages of varying kinds. The duty is laid on the Commission, or whoever is responsible, and is embodied in the Bill now before your Lordships' House, to impose customs duties.

Moreover, on page 6 there is another reference to what I regard as a principle; namely, the imposition of tax relief. It does not specify the nature or volume of tax relief but there is a principle contained in that part of the Bill. There are other principles of an even more fundamental character. Take, for example, the agricultural policy on page 9; perhaps Members of your Lordships' House might direct their attention to it. The principle of a Common Agricultural Policy is clearly embodied in the Bill. Again, there are no statistics associated with it. There are no facts or figures, it is simply a statement of a principle. I find principles scattered all over the Bill.

Perhaps I had better read one of them It is on page 10. This ought to be read because if this is not a principle then I do not know what is a principle. Subsection (5) states: Except as otherwise provided by or under any enactment, agricultural levies of the Economic Community, so far as they are charged on goods imported into the United Kingdom, shall be levied, collected and paid, and the proceeds shall be dealt with, as if they were Community customs duties, and in relation to those levies the following enactments shall apply as they would apply in relation to Community customs duties, and so on. There is nothing there about figures, statistics, volumes or percentages. That is a declaration of principle which has to be clothed in a variety of ways. Without the clothing there can be no implementation, but the principle is embodied in the Bill.

There is much more so far as principles are concerned. There is one on page 11 about the Sugar Board and the duties that are to be imposed on it. But I shall leave that out because I am not quite sure that that embodies a principle, except that on page 12 the reference to sugar beet is in the nature of a principle. I had better read it so that noble Lords can chew it and digest it. It states: If as regards the home-grown beet crop for the year 1973 or any subsequent year it is made to appear to the Ministers by the processors of home-grown beet or by a body which is in their opinion substantially representative of the growers of home-grown beet that the processors and that body are unable to agree on the prices and other terms…"— I had better not read any more because it is quite clear that that is a principle. I do not want to weary your Lordships but if ever there was a principle that is one. There is a principle on films. In the reference in the Bill to films in Clause 8 there is no suggestion about the kind of films and whether they should be of the "X" or "blue" quality—what-ever they call them. I am not an authority on that subject so I leave it alone, but there is a definite directive to the European Community in connection with the production and distribution of films. That is a principle. Again, it is not a question of finance or anything of that sort; it is a principle embodied in the Bill.

I shall now see if there is anything else in the nature of principles in the Bill. Yes, what I am about to direct to the attention of your Lordships is really a principle. It is on page 14 in relation to contracts and I had better read it. Subsection (2) states: Where a contract purports to be made by a company, or by a person as agent for a company, at a time when the company has not been formed, then subject to any agree ment to the contrary the contract shall have effect as a contract entered into by the person purporting to act for the company or as agent for it, and he shall be personally liable on the contract accordingly. That surely is a statement of principle. It does not relate to the kind of contract nor to the terms of the contract; it relates solely and exclusively to the principle upon which the details of implementation are to be applied.

Having interpreted what the noble Earl the Leader of the House has argued, I want to say that as for the rest it was an excellent speech, remarkably well delivered and impeccable in that respect. I am glad to see my noble friend Lord Citrine here and I wish he came more often. I have had a long and very friendly association with him. As he said, "You have the backwoodsmen here." They do not hear the debates but just appear when the vote is taken. The assumption is that they know all about it by intuition and that they understand everything that is going on. Again I put it to them that the Government case is simply that, these principles stated in the Amendment are excellent. Every right-thinking person would accept them. Indeed, that is what the noble Earl said, and he said it with such eloquence that no one can take exception to the way he put it. He said that you cannot incorporate these excellent principles into the Bill. Yet consider the principles that are embodied.

There is one further point. In the course of the negotiations for which Mr. Rippon was responsible on behalf of Her Majesty's Government, what happened? He discussed all kinds of principles with the other countries of the Six—the agricultural policy, fishing rights and even regional policy; all these matters that have been referred to by my noble friends on the Opposition Front Bench. But I think it will be conceded that there were many principles which were never discussed at all, that if they were discussed they were only considered in part and that there was no definite action taken on any of them. It must be conceded that there exists a whole host, a great variety of principles that at some time or other in the future will have to be considered by those responsible for administration and which were not fully discussed. Indeed some of them were not discussed at all. Surely in those circumstances if it is suggested that certain principles which are regarded as unexceptionable are contained in an Amendment in your Lordships' House there should be no objection to them unless the noble Lord will now say that all the other principles contained in the Bill will be excised. Then we understand where we are; then we go forward into the Community, with a lot of principles but nothing alongside that. That I understand; but for heaven's sake! let us be logical about this. I repeat, unless the noble Lord is ready to challenge what I have said; and to say that none of these references in the Bill has anything at all to do with principles, then I cannot understand for the life of me why he does not do one of two things. On the one hand, he could say that the Government, while they cannot accept the Amendment, will reconsider the position and, perhaps consistent with the proposal made by my noble friend Lord Citrine, introduce some declaration and publicise it. He could let the people of this country understand where we are going and what is likely to happen; he could state principles of that kind, make them public, even if they are not incorporated into the Bill. He could give a declaration on behalf of the Government that they accept these principles and are prepared to treat them as guidelines for those who will be responsible for entering into discussions and further negotiations with the countries of the Six. He could do that, or, as I venture to suggest, he could excise all the principles embodied in the Bill and depend merely on the good will of those with whom we are asked to associate in the future.

THE EARL OF BALFOUR

I rise to ask two questions. The noble Lord, Lord Greenwood of Rossendale, talking about years of working inside the United Kingdom, particularly in Lancashire, to help developing countries in the textile trades, said that if we went into Europe our imports of raw materials would be taxed. Is this correct? I do not think it is. I am sure that the imports of raw materials, such as cotton, sisal and jute, would not be taxed. Where we could gain by going into Europe is that we should cease to have a high import duty placed on our products when they are exported in their final manufactured state; that is, as jumpers or jerseys, or linoleum, or whatever it might be. My second question concerns the use of the word "principle". I cannot remember reading any Act in which the word "principle" was actually incorporated in the Act. I well remember reading the word "principle" last year, when we debated the Code of Industrial Relations Practice, but I cannot remember reading anywhere the sort of drafting adopted with this Amendment which uses the word principle ". But I may be wrong.

LORD HANKEY

I should like, if I may, to bring the discussion back to this Amendment, in spite of the very interesting debate we have had on regional policies. After holding a number of diplomatic posts over the years where I have been mixed up in economic negotiations, I must say that I should regard it as a tremendous embarrassment if my instructions were enshrined in an Act of Parliament so that they could not be altered by our Secretary of State without Parliament being consulted. I think it would be a very great embarrassment. I do not think that wording such as this, which would constitute guidance for our diplomatic representatives as to the way they handle our own applications for regional assistance and our own atitudes towards the proposals of other countries for regional assistance, are usefully embodied in an Act of Parliament. Therefore I greatly hope that this Amendment will not be accepted, although I personally agree with everything it contains.

LORD GLADWYN

Not having been present at the beginning of this debate, perhaps I ought not to intervene at all, more especially as I unfortunately did not hear what I understand was the very brilliant speech of the noble Earl the Leader of the House opposing this Amendment. But I understand from him that the point I am going to make, if I may, very briefly, was not fully developed by him, although it may have been touched upon. With the permission of the Committee, I should therefore like to say a word in regard to it. I have been rather puzzled by what I have heard so far in this debate about the necessity of this House's passing an Amendment which, if passed in another place would result in laying down certain principles which must be accepted by any Government of this country before we actually join the European Economic Community. If we are pursuing that line, there are all kinds of principles which we ought to elaborate and therefore to lay down, and, I imagine, assume that our partners in the Common Market are likewise going to agree to, before we sign. That seems to me a rather odd procedure if we are going to abide by a Treaty which we have already signed, and which we certainly should not have signed unless we had thought that it embodied the very principles which are now recommended by the Opposition for incorporation in the Treaty itself, by, as it were, unilateral act.

As regards these particular principles—and no doubt as such they are very good; I would not dispute that—you have only to read the Preamble to the Treaty of Rome, the fifth paragraph of which reads as follows: Anxious to strengthen the unity of their economies and to ensure their harmonious development by reducing the differences existing between the various regions and the backwardness of the less favoured regions. That is surely a broad way of saying exactly what is contained in this particular Amendment in the way of principles, and it was presumably because it embodied these particular principles that we signed the Treaty.

When we hear the noble Lord, Lord Beswick, say that this is all very well, but, for instance, the Common Monetary Policy is incompatible with any regional policy unless (I understood him to say) there is a directly elected Parliament which can take decisions in this regard, I approve of his apparent wish that there should one day be a directly elected Parliament. But even before then the Ministers, when they take these decisions on the advice of the impartial Commission, are nevertheless bound by the principles which have been elaborated and which we all signed in the Treaty of Rome. Therefore, even in the continued absence of a directly elected Parliament they are bound to—and there is no particular reason to suppose that they would not—develop a sensible regional policy; and indeed up to now they have been fairly successfully applying one. Therefore I do not understand what the fuss is about; why it is necessary to pass this Amendment to salve our conscience in respect of eventual help for the regions in this country which may or may not be slightly underdeveloped in the future. For those reasons, I shall unhesitatingly oppose this Amendment.

4.58 p.m.

LORD DRUMALBYN

As we have drawn towards the close of what has been an extremely interesting debate, we have got back to the core of the problem we have to deal with; that is to say, what action we are going to take on this particular Amendment. The noble Lord, Lord Shinwell, asked us to be logical about this, and the logic of the present situation is surely this. As the noble Lord, Lord Gladwyn, has just said, the principle here to be followed is already contained in the Preamble to the Treaty. Perhaps I might add in parentheses that if we had a Preamble to this Act it might perhaps be useful to incorporate in it some principles in the same way. But it is many years since we ceased to have Preambles to our Acts of Parliament, for the very good reason that they are not effective in the law. They are general guides to conduct and general guides to indicate the reason why particular legislative measures are being taken. The principles here, as my noble friend has said, are accepted. They are in the Treaty of Rome, either explicitly or by implication. They are accepted by the present member States and they must be accepted by us in the same way if we are to enter, and if noble Lords want a general statement they have one already, in the White Paper. The White Paper reads as follows: Because of the new opportunities for the economy as a whole, we shall be able as members of the Community to deal more effectively with our problems of regional development. All our experience over the years is that measures to stimulate such development work best within a wider framework of expanding trade and investment. The Community recognise that regional policy has a vital and continuing role to play in economic development. and so on.

So this is the general situation. I hope the noble Lord will not intervene because I should like to develop my argument in my own way. This is the general situation: the principles are accepted. They are explicitly or implicitly in the Treaty of Rome and these are obviously the principles on which we shall have to work if we are to play our part as a member State. There are no sections, it is true, or Articles in the Treaty which deal specifically and exclusively with the subject of regional policy, but Article 92, section 3, recognises its importance and provides for aid to particular industries and areas with genuine economic and social problems. It is not subject to the usual restrictions which prevent unfair distortion of competition. Articles 92 and 93 together establish the machinery for examining such aid. We cannot complain that there should be machinery for examining what separate member States do if we are aiming at a real Common Market. The only way in which we can achieve it is by some system of ensuring that member States are acting generally on the same basis.

The Commission has, therefore, powers to decide that aids are not compatible with the Community's policy, but there is also recourse to the Council. As my noble friend said in opening—and I do not think that sufficient notice has been taken of this; there has been a certain dilemma that noble Lords opposite have not always accepted—the fact is that the Articles have not prevented the member States from pursuing a wide variety of vigorous regional measures. The Government, like the previous Administration, take the view that we shall be able to do the same and such contacts as we have had with member States and the Commission have reinforced this view. On the other side of the dilemma, undoubtedly, is that a particular member State may pursue a policy with vigour which carries it a little past the rules. That is what has happened in one or two cases, and no one can complain when they are reminded that they have gone beyond what the rules provide. The Community sees regional policy as primarily a matter for individual Governments. What I think some of the noble Lords who have spoken have not sufficiently realised is that the Community policy on regional matters has been building up relatively slowly. A major step forward was taken in the communication of October 20, 1971, from the Commission of the Council—a programme which was adopted by the Council and the Governments of the member States in February. This sets out to emphasise the need to put an end to outbidding in regional aid and to achieve co-ordination of these systems of aid at Community level.

There is one paragraph I should like to quote. It says: Aid with regional purposes, when it is adequately and judiciously applied, forms one of the essential instruments of regional development and enables the member States to follow a regional policy aimed at a more balanced growth between the various regions of the same country ", and of course also within the various regions of the Community as a whole. One of the first questions this communication seeks to deal with is the definition between central and peripheral areas, and what this particular communication did was to define "central" areas as "the most highly industrialised regions of the Community" and to place a 20 per cent. limit on regional aid given in those areas. It is necessary of course to define the difference between central and peripheral areas, and this is a matter we shall be discussing with the Community before July 1, 1973.

I have been asked a number of questions. I was asked about my previous reference on August 4 during the debate on the Industry Bill to the maximum use of the Industry Act during the transitional period. My reference here was intended to highlight the need for the modernisation of our industry as we go into the Common Market—that was the purpose of it—and to ensure the maximum use of the facilities in what is now the Industry Act, in view of the fact that investment is not going as fast at present as we should like. It is also a fact that what is now Section 8 of the Act comes to an end at the end of 1977, so it is important; we have only a relatively short time to make the most of this and we should get on and do so in order that we may take our place to our own maximum advantage within the Common Market.

I was asked a number of questions by the noble Lord, Lord Rhodes, and I hope I have the material with which to answer him. He asked, first of all, whether we have got acceptance on a textile policy. The member States of the Community recognise the need for keeping—I think he called it—an indigenous textile industry, and they do so for exactly the reasons that the noble Lord indicated, and, if I may say so, indicated with such force. The restrictions on imports he referred to bear this out with no doubt at all. The second question he asked was about the need for quota restrictions for hard-pressed sectors of our industry. Quota restrictions are exercised by member States of the Community, though these are effected by commercial policy negotiations of the Community. Negotiations on the adaptations of commercial relations between the Community and third countries that will include such adaptations have not yet been concluded. The interests to which the noble Lord referred are being taken into account in these matters. In saying this, I can assure him that it is not a matter of glassy-eyed prevarication but rather stony-eyed national self-interest that make it difficult to say a great deal about this at the present stage. I am sure he will understand what I mean.

Thirdly, he asked about the need for acceptance of the principle of free circulation; and with this, I think, goes the fifth question about the averaging of imports. Her Majesty's Government have taken an initiative with the Community, and also with its present and acceding member States. I cannot go into the details, though I think none of them would surprise noble Lords. Obviously, I cannot disclose what might be called our negotiating position in this matter. I think it will take a considerable time to make progress on this. The noble Lord's fourth question concerned the need for a long-term agreement for cotton, including man-made fibres. There will have to be some settlement of the terms of the long-term agreement on cotton textiles, and I am sure that our ability to get all our interests, including our regional interests, looked after in the negotiations will become far greater when we become a member of the Community. I do not think that the noble Lord will expect me at the present time to go further than I have done on that point.

We had a very interesting speech from the noble Lord, Lord Citrine, to whom for many years I have always listened with very great pleasure. He spoke of the merits of the Amendment. He said that it is the merits of the Amendment that count. I hope he will accept from us that we believe, as my noble and learned friend on the Woolsack said, that it is very important here that the Bill should do all, but not more than all, that is necessary to be done in order to make possible our entry into the European Community. The noble Lord, Lord Shinwell, talked about principles in Bills. There is a clear distinction between principles that are set out in a Bill for the guidance of the actions of Ministers in the course of negotiating or reaching agreement with the Community, and the actual words setting out all rights, powers, and liabilities, and so forth, and the provisions in a Bill which may enshrine or apply certain principles and are directed towards achieving certain executive action. This is what we have in the Bill itself: legislative and executive action placing duties in law upon a number of people and bodies and the like. This is what legislation is all about.

LORD SHINWELL

That is precisely part of the language of the Amendment. There are guidelines laid down in the Amendment. May I make quite clear that I was not arguing so much for the Amendment? I was merely pointing out that the noble Earl the Leader of the House had argued very succinctly—apart from a great deal of other words contained in his speech—that one could not incorporate these principles in a Statute. All I was arguing was that there are any number of other principles contained in the Bill, so why not accept these. That was quite clear.

LORD DRUMALBYN

All I was trying to argue was that there are principles and principles. There are principles which in legal form impose legal obligations, rights and the rest, and there are principles intended only as guidance to Ministers in carrying out their duties towards reaching agreements, and so forth. I should have thought that these are totally different matters, and that the Committee would accept that that was so.

The noble Lord, Lord Beswick, if I may say so, ranged far and wide on this matter, but he had something to say about the effect which he feared on the regions of our going into the Common Market through the common rules for the movement of capital. It is still true, as my noble friend said, that capital has moved freely within this country.

LORD BESWICK

Within the country?

LORD DRUMALBYN

Within this country. It has been free to move within this country. Regional encouragements and inducements have been applied to enable capital to go here and there; and this it has done in many cases.

LORD BESWICK

No, my Lords. Really!

LORD DRUMALBYN

No; if it can do so within this country, what reason at all is there why inducements and encouragement should not operate equally in the Community as a whole as it has been doing? As has been pointed out, for example in regard to the Mezzogiorno in Italy.

LORD BESWICK

The noble Lord really should not try to get away with that. If one wants to set up a factory in London and invest £1 million or £2 million, one could not do it without the permission of the Government.

LORD DRUMALBYN

Our industrial development controls will remain, that is quite true.

LORD BESWICK

Would the noble Lord accept my point when I said that, although they will still remain, they will be meaningless because the capital will just go to the Continent?

LORD DRUMALBYN

I do not accept that for one single instant. My noble friend dealt with this extremely adequately in his opening speech. The mere fact that the duties on the entry of our goods into the Common Market are going to be removed, coupled with the incentives that we give for American industry to come here, is likely to restore the position that existed some ten or fifteen years ago when American industry was coming here because it found that this was the best and most convenient place for it to operate from. I believe that this will happen again. The advantages of moving to the Continent will disappear from that point of view as the Community's tariffs disappear, whereas the attractiveness of the United Kingdom to foreign investors, both within and outside, will be increased.

I really cannot possibly accept the argument that the noble Lord, Lord Beswick, has put forward. I think I ought to tell the noble Lord that the assistance that is being given by the Community to regional development pro jects of one kind or another within the Community is very considerable. Up to the end of 1970 the European Investment Bank had lent out about 1,800 million dollars, of which about 1,100 million dollars was for regional development projects within the Community. Nobody can say that the Community is not interested in regional development. I would say that by entering the Community now we shall be enhancing the prospects of regional development in this country for the reasons that I have given, and because of the general encouragement, the general stimulus that our entry should give to our economic growth.

5.18 p.m.

LORD GREENWOOD OF ROSSENDALE

We have tabled a large number of Amendments to this Bill in order to try to make it more acceptable to what I believe are the vast silent majority of people in Britain who dislike the idea of the European Economic Community. Those of us who do not object in principle have tried to make it more acceptable and more effective in practice. I have never encountered so stiffnecked and obstinate a Government as the present Government appear to be. Not one of our nearly 100 Amendments has apparently been on the mark at all. Noble Lords opposite have got four answers, one of which they trot out in reply to every Amendment. The first is that they say that the Amendment deals with a technical point which is a wrong one, and they cannot accept it; secondly, they say that it involves a point of principle so they cannot accept it; thirdly, they say that it is incompatible with the Treaty so they cannot accept it; or, fourthly, they say that it is entirely covered by the Treaty, is wholly consistent with it, and therefore they cannot accept it. History has fallen into the habit of attributing various rather disparaging names to Parliaments at one time or another. In the hope that perhaps I can help to save this Parliament from going down in history as the "rubber stamp Parliament", I shall ask the Committee to divide.

5.20 p.m.

On Question, Whether the said Amendment (No. 45) shall be agreed to?

Their Lordships divided: Contents, 46; Not-Contents, 147.

CONTENTS
Ardwick, L.	Fiske, L.	Nunburnholme, L.
Arwyn, L.	Gaitskell, Bs.	Pargiter, L.
Bacon, Bs.	Garnsworthy, L. [Teller.]	Phillips. Bs. [Teller.]
Balogh, L.	Greenwood of Rossendale, L.	Rhodes, L.
Bernstein, L.	Hale, L.	Serota, Bs.
Beswick, L.	Hall, V.	Shackleton, L.
Blyton, L.	Heycock, L.	Shinwell, L.
Brockway, L.	Hughes, L.	Slater, L.
Buckinghamshire, E.	Lauderdale, E.	Stocks, Bs.
Champion, L.	Leatherland, L.	Summerskill, Bs.
Citrine, L.	Lloyd of Hampstead, L.	Taylor of Mansfield, L.
Collison, L.	McLeavy, L.	White, Bs.
Crook, L.	Maelor, L.	Willis, L.
Davies of Leek, L.	Mais, L.	Wootton of Abinger, Bs.
Douglass of Cleveland, L.	Moyle, L.	Wynne-Jones, L.
Evans of Hungershall, L.

NOT-CONTENTS
Aberdare, L.	Gage, V.	Perth, E.
Ailwyn, L.	Gladwyn, L.	Platt, L.
Airedale, L.	Goschen, V.	Polwarth, L.
Alport, L.	Greenway, L.	Rankeillour, L.
Amory, V.	Grenfell, L.	Rathcavan, L.
Ashbourne, L.	Gridley, L.	Reay, L.
Balfour, E.	Grimston of Westbury, L.	Reigate, L.
Barnby, L.	Hailes, L.	Rhyl, L.
Belhaven and Stenton, L.	Hailsham of Saint Marylebone, L. (L. Chancellor.)	Ridley, V.
Belstead, L.		Ritchie of Dundee, L.
Berkeley, Bs.	Hankey, L.	Robbins, L.
Bessborough, E.	Hastings, L.	Roberthall, L.
Blackford, L.	Hawke, L.	Rochdale, V.
Bourne, L.	Hemingford, L.	Rothermere, V.
Boyd of Merton, V.	Hewlett, L.	Rothes, E.
Brecon, L.	Hives, L.	Ruthven of Freeland, Ly.
Brentford, V.	Hood, V.	St. Just, L.
Brock, L.	Howard of Glossop, L.	Sandford, L.
Brooke of Cumnor, L.	Hunt, L.	Sandys, L.
Brooke of Ystradfellte, Bs.	Hurcomb, L.	Seear, Bs.
Burnham, L.	Hylton-Foster, Bs.	Selkirk, E.
Byers, L.	Ironside, L.	Sempill, Ly.
Camoys, L.	Jellicoe, E. (L. Privy Seal.)	Shaftesbury, E.
Clifford of Chudleigh, L.	Kemsley, V.	Sherfield, L.
Coleraine, L.	Kindersley, L.	Simon, V.
Colville of Culross, V.	Lansdowne, M.	Sinclair of Cleeve, L.
Cottesloe, L.	Limerick, E.	Somers, L.
Cowley, E.	Long, V.	Stamp, L.
Craigavon, V.	Lothian, M.	Stonehaven, V.
Cranbrook, E.	Lucas of Chilworth, L.	Stradbroke, E.
Crathorne, L.	Macleod of Borve, Bs.	Strathclyde, L.
Crawshaw, L.	Macpherson of Drumochter, L.	Stratheden and Campbell, L.
Croft, L.	Mar, E.	Suffield, L.
Daventry, V.	Masham of Ilton. Bs.	Swansea, L.
Davidson, V.	Massereene and Ferrard, V.	Swaythling, L.
Denham, L. [Teller.]	May, L.	Tanlaw, L.
Digby, L.	Merrivale, L.	Thomas, L.
Drumalbyn, L.	Meston, L.	Thorneycroft, L.
Dulverton, L.	Milverton, L.	Trevelyan, L.
Dundee, E.	Monck, V.	Tweedsmuir, L.
Ebbisham, L.	Mottistone, L.	Tweedsmuir of Belhelvie, Bs.
Eccles, V.	Mowbray and Stourton, L [Teller.]	Vernon, L.
Elles, Bs.		Vivian, L.
Elliot of Harwood, Bs.	Moyne, L.	Wakefield of Kendal, L.
Elworthy, L.	Napier and Ettrick, L.	Waldegrave, E.
Emmet of Amberley, Bs.	Netherthorpe, L.	Ward of Witley, V.
Falmouth, V.	Northchurch, Bs.	Windlesham, L.
Ferrers, E.	Nugent of Guildford, L.	Wolverton, L.
Foot, L.	Ogmore, L.	Young, Bs.
Forteseue, E.	Onslow, E.

Resolved in the negative, and Amendment disagreed to accordingly.

5.28 p.m.

BARONESS WHITE moved Amendment No. 46: After Clause 2, insert the following new clause:

Relations between the European Communities and the less developed --countries

. For the purpose of reaching agreement within any of the Communities on all rights, powers, liabilities, obligations and restrictions from time to time created or arising by or under the Treaties, and on all remedies and procedures from time to time provided for by or under the Treaties, any Minister of the Crown shall be guided by the following general principles concerning the relationship between the European Communities and all those countries accorded preferences under the Import Duties (Developing Countries) Order 1971–1971, No. 1882)—

1. (a) the principle of promoting a mutually beneficial division of labour with a view to enabling countries accorded preferences to increase their exports to the Communities of primary products and manufactures;
2. (b) the principle of reducing by stages the non-economic production within the Communities of agricultural products available from countries accorded preferences;
3. (c) the principle of increasing the scope of the generalised preference scheme by means of the progressive elimination of quotas on imports into the Communities from countries accorded preferences; and
4. (d) the principle of increasing aid, and in particular untied aid, by means of grants and loans free of interest."

The noble Baroness said: As one who objected to the suggestion once mooted that this House might sit into next week, and as one who would on the whole prefer not to sit all night to-night if that can be avoided, I hope to move this Amendment as briefly as possible. As I understand that the noble Baroness, Lady Young, is likely to reply on behalf of Her Majesty's Government, I am satisfied that I shall receive from her a succinct reply. I say that with the greater assurance, because we have traversed the ground covered by this Amendment in previous reasonably recent debates in your Lordships' House. We have had a debate on the Commonwealth and its relationship in these matters with the Common Market; we have had a debate on the UNCTAD Conference at Santiago; we have also had the Statutory Instrument which is referred to in the Amendment itself. Therefore it might be taking unnecessary time from other Amendments, important as I regard this one to be, if one went into it at too great length. Nor do I wish to traverse again the comments which were made by the noble Earl the Leader of the House and others on the form of the Amendment. We have already had a fairly good discussion on that, because the present Amendment takes a somewhat similar form to the one which we have just been debating. But we make no apology whatsoever for that. On some other occasion I might like to cross swords with noble Lords opposite on the remarks made both by the noble Earl the Leader of the House and by the noble Lord, Lord Drumalbyn.

The noble Earl said that aspirations were not appropriate to a Bill; that they should be embodied in Hansard. Of course we expect our own Ministers to read Hansard, or at least we expect their civil servants to digest it and mark it for them. But we hardly expect the Ministers of all our colleagues in the Six to read our Hansard. Therefore we are in some difficulty if we want to give an indication to our colleagues in the Community of the lines which we would expect our own Government to take. The noble Lord, Lord Drumalbyn, referred to the fact that Preambles to legislation have now fallen into disuse. Maybe in our new situation in the Community we shall have to resurrect the Preamble, as a way of indicating to the other nine members of the Community the kind of aspirations which we entertain in this country. It may not be possible to embody them in full legal form.

However, leaving those considerations for a moment on one side, I should like to put this Amendment into perspective. Whatever may be said in the Treaty of Rome, I do not think we have any ground whatever for being unduly complacent about relationships between the developed countries in Europe or elsewhere and the under-developed countries. We all know the difficulties that arose at Santiago. We are very glad that the noble Lady, rather towards the end of the conference, was able to make her way there. I wish that she had been there a little earlier when these important matters were discussed because the general effect of Santiago was to reinforce the belief of the under-developed countries that the developed countries were not prepared to make any real concessions to them. The psychological result of these difficulties which arose at Santiago—some of them substantial—might have a significant effect in the next few months when important consultations take place over the GATT and, of course, the negotiations, which are more germane to our debate to-day, between the E.E.C. and the countries—38 in number—which are associable and may have already entered into association, as well as other countries which are in the process of negotiation.

Of the countries to which association in some form or other with the E.E.C. is open, some 20 are within the Commonwealth. I think they would have our particular regard, but, as we know, there are other countries which are of very great concern to all of us, I would hope, to which the offer of association has not been extended. If I may again take the Commonwealth position, the 20 countries which may enter into some form of association if they so desire, and some have already done so, comprise a population of probably 120 million, but the great countries of Asia to whom such a relationship has not been offered, although they may have some trade agreement, have a population of probably 700 million. In our discussions it is very important that we should recognise that there are these two different groups of countries.

If your Lordships suppose that one need not worry too much because there have been general expressions in the Treaty and by members of the Community of good will towards the underdeveloped world I should perhaps point out that since the formation of the Community the level of trade between members of the Community has, of course, increased vastly—in very round terms four-fold in the last decade—but the total share of external trade of the E.E.C. countries with the less developed countries of the world has in fact fallen. Looking at the advantages of association for those who have become associated with the E.E.C., I would quote a passage from the speech made recently in London by the Secretary-General of the Commonwealth, Mr. Arnold Smith, in which he said: In practice trade statistics suggest that the developing countries have not gained as much in trade as they may have hoped from association agreements with the Six. Most of them have been given special orivileges as far as trade with Western Europe is concerned, but the expansion of their exports to Europe has been limited and in fact the exports of the present associated States with the rest has increased less than it has with other developing countries.

This is rather startling for those who are prepared to put their entire confidence into arrangements for association. I will not go into detail—I am not sure that I would be competent to do so because these are complicated matters—but it is a little startling when one reads statements of that kind supported by statistical evidence.

We have already of course in the United Kingdom adopted a system of generalised tariff preference, as has the E.E.C. under the general guidance of UNCTAD, but, as we said in an earlier debate on this subject, we shall have in 1974—unless we can persuade our colleagues in the Community otherwise—to adopt the Community pattern. We have the authority of the Minister of State, Mr. Michael Noble, at the Department of Trade and Industry for saying—as is evident if one examines the position—that our own system of tariff preferences adopted earlier this year is more generous in many respects than that adopted by the E.E.C. We therefore felt that we were entirely right to put on record in the Amendment which is before your Lordships some guidelines which we would hope might influence our representatives in this very important matter of deciding in a very brief period of time after our formal entry whether we should follow the precise lines of the E.E.C. agreement or should persuade our colleagues in the E.E.C. to adopt some more generous arrangements.

As I say, I do not wish to weary your Lordships by going into some of the details. If one looks at the tariff preference arrangements at first glance they may appear very generous. There is a considerable list of commodities in agriculture and even some manufactured ones, both in our list and in theirs, which would enter duty-free. One might suppose that this is fine. We have a very impressive list of our own. I was delighted to find, for example, in Chapter 96 that brooms, brushes, feather dusters and sieves would be admitted free. I find the definition of sieves after the other grouping rather odd, but it does not end there because there is the matter of ceilings, of maximum amounts of quotas, and those quotas are divided in the most complicated fashion. They are divided between the different countries: at the moment, of course, the Six. When it becomes the Ten, the arithmetic will have to be done again. But this allocation of tariff quotas between the members of the E.E.C. is all worked out at Community level.

There are also further restrictions. If you are trying to export from a developing country into the Community, you have to be sufficiently knowledgeable to know whether, for your particular product, the country to which you are hoping to export has or has not already had its tariff maximum for the period in question, because if it has then you are not going to get in tariff-free. You also have to work out some further sums as to the total of particular commodities, and you have to work them out by reference to what happened in 1968 plus an addition of 5 per cent. of the value of imports of those goods from all extra E.E.C. sources since 1968, and so on and so forth. In other words, it is going to be a very difficult matter, it seems to me, for the producers in many of these developing countries to understand the complexities of the E.E.C. arrangements as between the different member countries of the E.E.C. and the kind of tariff quotas which will be allocated to each of them, and also the cut-off point—where, if a certain quantity of that particular commodity has already been imported, further amounts cannot he imported tariff-free. The commodity can still be imported, but the full tariff duties will have to be paid.

As I say, I do not think it would be desirable on an occasion of this kind to go too far into all these details, even if I were able so to do. But I hope I have already said enough to show that the E.E.C. has adopted a very complicated scheme. I quote an economist far more learned in these matters than I am, who says: 'The schemes proposed by all the other participating developed countries "— that is to say, other than the E.E.C.— except Japan, are simpler. Japan's scheme is basically the same as the Community's except that it is more generous ". And he goes on to explan why. We, on the whole, have in the past had a relatively simple scheme of Commonwealth preference we have not gone in for all these complexities. We have had dutiable goods or non-dutiable goods, as the case may be, but generally speaking (there are some exceptions, I know, for agricultural products and one or two other matters) we have eschewed quotas, and we have not had these particular difficulties of limitations on tariff-free quotas.

The real question before us of course, as I tried to indicate earlier, is whether or not we shall be able to persuade our colleagues in the Six to adopt what are, on the whole, our more generous, simpler and more open attitudes. I say all this with the fullest consciousness that in certain sensitive areas we ourselves have in the past safeguarded our own interests—and no doubt will wish to do so again in the future. We have just been discussing this very matter, on the previous Amendment. It arises more particularly, of course, in the case of textiles, and also in footwear, where special arrangements have been made for each of them. There are other commodities of very great interest to some of the developing countries—jute, for example. Raw jute is tariff-free, but in the Community there are very tight quotas indeed on any type of manufactured jute. This is of great importance to some countries in South-East Asia. We do not wish to take on an undue burden, as to some extent we have been doing in textiles, as various noble Lords indicated in the earlier debate. That would not be fair or equitable. Therefore can we really use our influence and powers of persuasion to see that we are generous to the developing countries and also that we in Britain, take our fair share but are not expected to shoulder an undue burden? That is the gist of these Amendments that we have put down.

I believe it is absolutely right that, in discussing the legislation which will take us into the Community in full legal form, we should have some discussion on this matter. I do not, as I said at the outset, apologise for the form of this Amendment, although apparently it does not appeal very much to the Government. The alternative would have been to spell all this out in mandatory terms, which would have been better legislation but rather less satisfactory. In our Amendment, we have tried to set out the things which we feel matter most in this developing relationship. In the first place there is the matter that I have just touched upon: that we should like to work out "a mutually beneficial division of labour " between ourselves and the developing countries who are primary producers, and also, in some cases, manufacturers; and that we should do it in a way which would both benefit them and not be an unfair burden on this Kingdom as compared with other members of the Community. Again, on the whole in this country we have not used the kind of device which is used in the Community of reverse preferences, and various other methods by which the more developed countries make very certain that they get a very good quid pro quo for any concessions they may make to the developing world. The developing world is now, I think, seeing through some of these devices, and is resenting some of them. So again we hope very much that our representatives will bear this in mind, and will not go in for some of the elaborations that have been attempted in the past.

If I may refer again to Mr. Arnold Smith—who, after all, as the Secretary-General of the Commonwealth Secretariat, is in a position to know what are 'the feelings in the Commonwealth in general—he said this in his speech to the Federation of Chambers of Commerce of the Commonwealth a few weeks ago: At present, such reverse preferences do exist in practice to come extent within the Yaoundé and Arusha associations. I hope they will be eliminated. Commonwealth develop-in countries … should not be asked to undertake to discriminate against other developing countries

which would not be in association; for example, India, Singapore, Malaysia or Ceylon. Mr. Arnold Smith went on: Nor should the Commonwealth Caribbean he asked to discriminate against North America as a price of not losing its British market, nor Fiji, Tonga, and Samoa to discriminate against India, New Zealand, Australia and Japan.

Those of us who have had a very long interest in the Commonwealth will echo the hopes that Mr. Arnold Smith expressed in that speech. We hope very much again, therefore, that our representatives in Brussels will make sure that we do not endanger very longstanding Commonwealth relationships by accepting terms of reverse preferences from people who are not in association with the E.E.C. in such a way that such relationships would in fact be damaged.

Then our Amendment refers to: the principle of reducing by stages the non-economic production within the Communities of agricultural products available from countries accorded preferences.

I think we can all understand the relevance of this, and I do not wish to elaborate upon it. Paragraph (c) deals with the matter of quotas, and I have just been speaking of that.

The final matter is: the principle of increasing aid, and in particular untied aid.…

which we suggest should be by means of grants and interest-free loans. Again, we have had a number of debates in your Lordships' House on this matter. I think those of us interested in this subject are fully aware of the great and increasing problem of indebtedness in the developing world, and I know that the noble Baroness herself is well aware of this problem. On the whole, the aid from the Community to its associated countries and to other countries is by way of reasonably soft loans. But again one must be on the alert—and this is intended as a further warning, to our representatives—to make it clear that this is the attitude we hope they will adopt. I repeat that in my view it is entirely appropriate that in discussing the form of our entry into the European Community we should not forget our associations with our own Commonwealth partners and with other countries in the developing world, and that we should make that clear, as we do in the Amendment which I have the pleasure now to move.

5.50 p.m.

LORD GREENWOOD OF ROSSENDALE

My Lords, I had hoped that the serried ranks opposite would have been prompted to take part in this discussion, in view of their long association with the Commonwealth and the extent to which they had claimed an almost proprietary interest in the Empire at a time when we on this side of the Chamber were regarded as being hostile to the best interests of the Commonwealth and the Empire.—I should like briefly, in view of the silence on the other side of the Chamber, to support very strongly what my noble friend has said, putting I think, three points to the noble Baroness who is to reply and whose interest in the Commonwealth I do not for a moment impugn or question. I hope that she will be able to say something about the proposals which Mr. Arnold Smith has made. They seem to me to be perfectly reasonable principles to have enunciated, and I should like to feel that Her Majesty's Government, when they represent us at Brussels, will do everything in their power to ensure that the criteria laid down by Mr. Arnold Smith are met.

Secondly, my Lords. I should like to raise with the noble Baroness the question I put on Second Reading that is, that the achievement of associate status is of only limited usefulness to many of these countries because all agricultural products which are subject to a common organisation of their market in the Community are excluded from the terms of the Yaoundé Convention. That seems to me to minimise the help that these countries will get from the association which many of the African countries, and some of the eastern Caribbean countries, have already sought and, indeed, in many cases obtained.

The third point I would put to the noble Baroness is in respect of India, Pakistan. Sri Lanka, Malaysia and Singapore, because if I am right the enlarged Community's relations with those countries are to be arranged in accordance with the joint Declaration of Intent after Accession, and application of the generalised scheme of preferences of the Community is governed by Protocol 23. If my information is correct, that is not likely to bring any great comfort to the countries I have named. To give one example, I take India. I understand that a professor at Delhi University recently forecast that application of the generalised scheme of preference to India would increase her export earnings by 24 crores of rupees, but the abolition of Commonwealth Preference would involve the loss of 75 crores of rupees of export revenue. It looks as though the situation for India could be a serious one in the light of our accession to the Community, and I should like to have from Her Majesty's Government some assurance that they are aware of the serious problems that are going to be created for these vast areas of the Commonwealth. I hope that the Government will to-night give us some earnest of their determination to safeguard the Commonwealth interests involved.

5.54 p.m.

LORD GLADWYN

My Lords, speaking, I hope, for the serried ranks of Liberal Peers, I intend to oppose this Amendment for the same reason as I had the temerity to give in relation to the preceding Amendment; that is to say, that the announcement of principles governing our entry to be embodied in the actual Act is wrong, and wrong in principle. We cannot be at all certain that these principles, admirable as they may be, are literally shared by our colleagues with whom we are obliged and committed to work. The Treaty of Rome, in the sixth paragraph of the Preamble, says: Intending to confirm the solidarity which binds Europe and overseas countries and desiring to ensure the development of their prosperity, in accordance with the principles of the Charter of the United Nations. Then we come to the principles of the Treaty of Rome, and in Article 3 we read: For the purposes set out in Article 2, the activities of the Community shall include among other things: the association of overseas countries and territories with a view to increasing trade and to promoting jointly economic and social development. That is what the Treaty says, and that is the Treaty which we have signed and to which we are committed. It seems to me that those general principles are all that is necessary. How they are applied is a matter for ourselves and our colleagues to work out when we join. We have to do it when we enter and no doubt we shall do our best to apply the principles as we see them.

As regards the principles recommended for inclusion in the Act by the Labour Opposition, we find that the first one is: the principle of promoting a mutually beneficial division of labour with a view to enabling countries accorded preferences to increase their exports to the Communities of primary products and manufactures; That, I should have thought, was implicit in the general principle of which it forms part, of the Treaty we have signed. The second principle says: the principle of reducing by stages the non-economic production within the Communities of agricultural products available from countries accorded preferences; I am not sure how literally that is to be taken. If it is to be taken literally I suppose it means that we must progressively reduce our production of sugar beet in this country with a view eventually to eliminating it, because it is, presumably, uneconomic.

BARONESS WHITE

If I might interrupt the noble Lord, there is a case for suggesting that we might decrease our own sugar beet production because we can grow some things which sugar producing countries cannot.

LORD GLADWYN

That would be very good in principle, but I am not sure that the Labour Government, if it came to power, would reduce substantially the production of sugar beet in this country. That would be a brave thing to do, but I think it is rather rash to commit yourselves to these principles in advance. What is going to happen when you come to power? The third principle is that increasing the scope of the generalised preference scheme, of which the noble Lord, Lord Greenwood of Rossendale, has spoken, is an excellent thing in itself, but / do not see what is to be gained if we said that that was a principle we were going to abide by at this stage. I cannot see the advantage of proclaiming in advance exactly what we are going to do in the way of a principle in that regard.

Finally, the principle of increasing aid, and particularly untied aid, by means of grants and loans free of interest. If the Government of this country said that that was their principle it would be greeted with slightly hollow laughter by our colleagues in the Common Market, because if anything is clear (I have not the figures by me but I have seen them recently) it is that the amount of official and unofficial aid which we grant, expressed as a percentage of the G.N.P., is substantially less than that given by our Common Market colleagues, including not only the Six but the Ten. If we came out with a statement like that, it would be regarded by our colleagues as rather unfortunate to say the least. For all those reasons I cannot see the advantage of this Amendment. I see certain considerable disadvantages in it, and I shall certainly ask my colleagues to oppose it.

6.0 p.m.

THE MINISTER OF STATE FOREIGN AND COMMONWEALTH OFFICE (BARONESS TwEEDSMUIR OF BELHELVIE)

I am very glad indeed that the noble Baroness has moved this Amendment. I think it gives us an opportunity to consider for a while some of the major problems which will confront the associated territories overseas, or those who choose to have trade agreements, or those who choose to have an agreement on the lines of the Arusha Convention, and also what the attitude of the Community is to these particular problems.

I should like to say first that the noble Baroness, who always moves her Amendments with great clarity and ability, did accept, as did the noble Lord, Lord Gladwyn, that the Treaty of Rome already incorporates certain general principles. But she suggests to us that as well as the principles which are already incorporated both in the Treaty of Rome and in the Treaty of Accession, we should also incorporate the principles in Amendment No. 46 as guidelines to Ministers when they are considering how they should act in the negotiations with the Community. As was said by my noble friend the Leader of the House on a previous Amendment, this particular Bill, short as it is, is intended only to give effect to those changes that are really necessary in order to enable us as a country to accede to the terms which were negotiated under the Treaty of Accession.

This clause, although it is framed in terms of principles, is really more a declaration to be followed by Ministers on trade and aid for the developing countries. I would say to the Committee that I think it is out of context in this Bill. In any case, all the members of the enlarged Community—and this was referred to by Lord Gladwyn—are committed to helping the trade and development of developing countries. I would suggest to noble Lords that a general declaration of this nature in this Amendment does not distinguish between very different and very difficult problems affecting trade in primary commodities and in manufactures and in development aid. It is really for these main reasons that I would not recommend to the Committee that this Amendment should be incorporated in the Bill.

But I should like to refer to each principle and I will do so as briefly as did the noble Baroness and Lord Greenwood. Let us take the first principle, (a). I submit that it does not recognise the difficulties there are in trying to achieve a true balance between the need of developing countries to increase their export earnings and the interests of our own industry, not only in this country but in all those of the enlarged Community, and the great problem of employment. All the developed countries granting generalised preferences do have safeguard provisions to enable them to protect their own industries against injury which is too great. This was recognised by the noble Baroness when she spoke.

It is true that from the beginning of 1974 we shall have to switch from our present safeguard mechanism, which allows us to withdraw completely a preference at any time and for as long as we think fit and because we are acceding to the Community we shall instead have to apply the techniques of the Community. This guarantees a fixed amount of duty-free quotas each year even on manufactured goods in which the developing countries are competitive with us. But once the annual ceiling is reached the developing countries can of course continue to export to the Community but only on payment of the full rate of duty. A new duty-free ceiling is fixed at the beginning of next year. The Community scheme provides for automatic increases each year in the size of these tariff quotas. Most of their quotas in 1972 were considerably increased on those that were available when the scheme was introduced in 1971.

Let us look at the second principle, (b), in the Amendment. I think it is difficult to define what is non-economic; because agricultural support is recognised for all agriculture both in this country and under the C.A.P. I think it would be difficult to put a formula such as (b) into effect. But if it was in the minds of those who put forward this Amend ment that they wished particularly to refer, for example, to processed agricultural products and to tropical products available from developing countries, here the noble Lord, Lord Greenwood, was perfectly right; it is true that more of these have been included in our scheme of generalised preferences than in the Community's present scheme.

But, as is put in the third principle, (c), in the Amendment, we can all expect that an enlarged Community will be able to increase the scope of their scheme and have said that they would do so; but we still have to accept that generalised tariff preferences on these kind of products might be at the expense not only of domestic producers if they were temperate products but also of producers in the associated developing countries or in those Commonwealth countries which were offered association, if you consider certain manufacturers or semi-manufactures.

If you look at the fourth principle, (d), there are certain principles put forward on development aid which, if read, one would think unacceptable; but there are a great many difficulties in applying this particular principle (d) as it stands. I would say that it is put forward too soon; because, as everybody knows, we are not at this moment a member of the European Development Fund. In fact, we will not accede to it until 1975 when the third fund comes to an end. The extent of our Community obligations to which we should become a party when we accede is still under negotiation. I would also say that I think it is a little restricted; because it is surely too early to decide how much Community aid will be needed after 1975, particularly since most Commonwealth "associable" countries, as I believe they are called, have yet to decide what form their relations with the enlarged Community will take. I would suggest that it is unwise to try to put down absolutely detailed guidelines of this kind.

Lord Greenwood in particular asked about the Declaration of Intent on the Asian countries. I think one cannot go further than this Declaration of Intent as it is set out on page 117. I think it shows very great determination to try to meet the problems of Sri Lanka, India, Malaysia, Pakistan and Singapore. I do not think one could go further than that at the moment. I personally should say (and I do not want to try to influence the arrangements) that association of the three forms open was the best form for those countries who are considering whether to have an association agreement, which involves being able to have the advantage of the European Development Fund, whether it is a kind of Arusha Convention which has less reverse preferences (which I think was one of the problems which troubled Lord Greenwood) or a straight trade agreement which was offered to the Asian countries. I myself think that in the circumstances a form of association which brings together the French- and English-speaking African countries with access to the Development Fund but also access to our aid, too, might in the end be of the greatest benefit to them and might ensure that, because the Community as a whole would be so wide in its extent, it would in fact be very much less restricted than I think many of us might feel.

Opening this short debate the noble Baroness, Lady White, talked about the level of trade betwen the Community and the developing world. If you take the whole level of imports from the developing world, it increased in value to the Community by 45 per cent. between 1966 and 1970. The corresponding figure to the United Kingdom was 26 per cent. and I suggest that surely these figures imply that if we could get the right arrangements, and if those who still have to make up their minds by the middle of next year would, for example, choose association agreement, the levels of trade will continue to develop, which is part of the principles of the Treaty of Rome and part of the Treaty of Acession to which we hope shortly to accede.

In closing, I would only say that I entirely agree with the noble Baroness that we want as negotiating partners to try to achieve more open attitudes and to influence by our powers of persuasion so that those countries with which we are so much concerned shall have a valuable and continuing treaty arrangement.

6.11 p.m.

LORD SHACKLETON

I intervene because, for the second occasion, we have had arguments which strike me as entirely unsound from a Parliamentary point of view and I am getting a little tired of Parliamentary procedural and legislative arguments being used as principle reasons for preventing the insertion of material into the Bill. The noble Lord, Lord Drumalbyn, on the last occasion and the noble Baroness, Lady Tweedsmuir of Belhelvie, on this occasion—though with less detail—prayed in aid the argument that you do not put principles into legislation, and particularly not in this Bill.

I know that the noble Lord, Lord Drumalbyn, is a very busy and overworked Minister but the fact is that he was responsible for a measure which started off by laying down a number of principles of a kind analogous to these; namely, the Industrial Relations Act. If noble Lords compare the principles contained in this Amendment and previous Amendments, and the principles as set out in Section 1 of the Industrial Relations Act, they will find that the argument the Government are using against these Amendments could have been applied equally well to Section 1 of that Act. The section reads: The provisions of this Act shall have effect for the purpose of promoting good industrial relations in accordance with the following general principles, that is to say,—(a) the principle of collective bargaining freely conducted—"— et cetera— and with due regard to the general interests of the community—"— one of these inprecise phrases which the noble Baroness attacks in this Amendment. Then, (b) the principle of developing and maintaining orderly procedures in industry … (c) the principle of free association …"— and— (d) the principle of freedom and security for workers, protected by adequate safeguards against unfair industrial practices, whether on the part of employers or others. Because the Government are not able to accept Amendments or even to attempt to redraft them we ought not to have such arguments in this Committee to justify the rejection of Amendments moved by the opposition. I am bound to say that it does not do much credit to your Lordships' House and I do not like procedural arguments of this kind being used against Amendments. There may be other arguments; indeed, the noble Baroness gave them. I happen to be one who believes that the Community will do its duty in this respect; but equally, I see no reason why we should not put into an Act of Parliament guidelines to our own Ministers, because this is what this is; and I regret that we are having this sort of argument simply because the Government are not prepared to accept any Amendments.

BARONESS TWEEDSMUIR OF BELHELVIE

If I may speak again, I would say that I think the noble Lord, Lord Shackleton, is usually very fair. But I think he came into the Chamber about half way through the debate. He did pay me the honour of saying that I had sought to examine each of the four principles on their merits, which indeed I did. But before the noble Lord came into the Chamber I was in the process of arguing that, quite apart from the merits of the principles which I sought to examine in details, there are also certain principles already embodied in the Treaty to which we accede. For that reason I do not see why we should repeat them in a short Bill which is meant merely to carry out those matters which are necessary for our acceptance.

LORD SHACKLETON

I agree that I did not hear the whole of the debate, but I heard rather more than the noble Baroness thinks, as I was listening although I was not actually sitting in the Chamber. I have already said that I happen to believe in some of these principles as contained in the Community. What I am saying is that this is an instruction to Ministers and is a great deal more justifiable than the principles as set out in the Industrial Relations Act.

BARONESS WHITE

I entirely agree with my noble friend Lord Shackleton; frankly, I think that he has scored a bull point in reading from Section 1

of the Industrial Relations Act. That does precisely what the Leader of the House told us we ought never to do in legislation. Therefore I do not think that we can allow ourselves to be misled by the most eloquent speech of the Leader of the House on the earlier Amendment into refusing to accept the Amendment which is now before the Committee. After all, we are not the Senate of the United States; we do not have to ratify treaties; and it appears to me that it is entirely proper, in the circumstances in which we now find ourselves, that we should express in a Bill of this kind the kind of general principles which we would wish our representatives to follow in carrying out the purposes of this Bill.

There may be one or two points of detail which could be improved, and they could be redrafted if I had the slightest hope that the Government would be less than completely impervious to any kind of Amendment to this Bill. In other circumstances one might be disposed to say, "All right, we will withdraw this particular Amendment and have further consultations and bring it forward, somewhat revised, at a later stage." But what is the use? It has already been perfectly clearly indicated to us that nothing we say will have the slightest effect on this Bill. In those circumstances I do not think the normal procedures are applicable, I therefore have no intention of withdrawing the Amendment, and I propose to ask the Committee to divide on it.

On Question, Whether the said Amendment (No. 46) shall be agreed to?

Their Lordships divided: Contents, 32; Not-Contents, 148.

CONTENTS
Arwyn, L.	Faringdon, L.	Phillips, Bs. [Teller.]
Bernstein, L.	Gaitskell, Bs.	Serota, Bs.
Beswick, L.	Garnsworthy, L. [Teller.]	Shackleton, L.
Blyton, L.	Greenwood, of Rossendale, L.	Shinwell, L.
Brockway, L.	Hale, L.	Slater, L.
Buckinghamshire, E.	Heycock, L.	Taylor of Mansfield, L.
Champion, L.	Hirshfield, L.	White, Bs.
Collison, L.	Leatherland, L.	Willis, L.
Cowley, E.	Lloyd of Hampstead, L.	Wootton of Abinger, Bs.
Crook, L.	Maelor, L.	Wynne-Jones, L.
Davies of Leek, L.	Nunburnholme, L.
NOT-CONTENTS
Aberdare, L.	Gage, V.	Moyne, L.
Ailwyn, L.	Gainford, L.	Napier and Ettrick, L.
Alport, L.	Garner, L.	Netherthorpe, L.
Ashbourne, L.	Gladwyn, L.	Northchurch, Bs.
Balfour, E.	Glendevon, L.	Nugent of Guildford, L.
Barnby, L.	Goschen, V.	Onslow, E.
Beaumont, L.	Gowrie, E.	Orr-Ewing, L.
Belstead, L.	Greenway, L.	Perth, E.
Berkeley, Bs.	Gridley, L.	Platt, L.
Bessborough, E.	Grimston of Westbury, L.	Polwarth, L.
Boothby, L.	Hailes, L.	Rankeillour, L.
Bourne, L.	Hailsham of Saint Marylebone, L. (L. Chancellor.)	Rathcavan, L.
Brecon, L.		Reay, L.
Brentford, V.	Hankey, L.	Reigate, L.
Brooke of Cumnor, L.	Hanworth, V.	Rhyl, L.
Brooke of Ystradfellte, Bs.	Hastings, L.	Ridley, V.
Burnham, L.	Hawke, L.	Robbins, L.
Camoys, L.	Hemingford, L.	Roberthall, L.
Carrington, L.	Hewlett, L.	Rochdale. V
Chelmer, L.	Hives, L.	Rothermere, V.
Clifford of Chudleigh, L.	Hood, V.	Ruthven of Freeland, Lv.
Coleraine, L.	Howard of Glossop, L.	St. Just, L.
Colville of Culross, V.	Hurcomb, L.	Saint Oswald, L.
Colwyn, L.	Hylton, L.	Sandford, L.
Cork and Orrery, E.	Hylton-Foster, Bs.	Sandys, L.
Cottesloe, L.	Jellicoe, E. (L, Privy Seal.)	Selkirk, E.
Craigavon, V.	Kemsley, V.	Sempill, Ly.
Craigmyle, L.	Killearn, L.	Shaftesbury, E.
Cranbrook, E.	Kindersley, L.	Simon, V.
Crathorne, L.	Lansdowne, M.	Sinclair of Cleeve, L.
Crawshaw, L.	Latymer, L.	Somcrs, L.
Croft, L.	Limerick, E.	Stamp, L.
Cullen of Ashbourne, L.	Long, Bs.	Stonehaven, V.
Davidson, V.	Lothian, M.	Stradbroke, E.
Denham. L. [Teller.]	Lovat, L.	Strathclyde, L.
Digby, L.	Lucas of Chilworth, L.	Stratheden and Campbell, L.
Drumalbyn, L.	Luke, L.	Suffield, L.
Dulverton, L.	Lyell, L.	Swansea, L.
Dundee, E.	Macleod of Borve, Bs.	Swaythling, L.
Ebbisham, L.	Macpherson of Drumochter, L.	Thorneycroft, L.
Eccles, V.	Mancroft, L.	Trevelyan. L.
Ellenborough, L.	Mar, E.	Tweedsmuir, L.
Elles, Bs.	Massereene and Ferrard, V.	Tweedsmuir of Belhelvie, Bs.
Elliot of Harwood, Bs.	May, L.	Vivian, L.
Elworthy, L.	Merrivale, L.	Wakefield of Kendal, L.
Emmet of Amberley, Bs.	Milverton, L.	Ward of Witley V.
Falmouth, V.	Monck, V.	Windlesham, L.
Ferrers, E.	Mottistone, L.	Wolverton, L.
Foot, L.	Mowbray and Stourton, L. [Teller.]	Young, Bs.
Fortescue, E.

Moved accordingly and, on Question, Motion agreed to.

Clause 3 [Decisions on, and proof of, Treaties and Community instruments, etc.]:

LORD SHACKLETON had given Notice of an Amendment (No. 48): Page 4, line 45, after first ("copy") insert ("in the English language").

The noble Lord said: Because of the time factor and the way in which the equivalent of the guillotine is working we will not move this Amendment.

6.27 p.m.

LORD SHACKLETON moved Amendment No. 49: Page 5, line 22, at end insert— ("( ) Without prejudice to any other ground of jurisdiction, from the date of entry the High Court in England and Wales, the Court of Session in Scotland, and the High Court of Northern Ireland shall have jurisdiction to entertain actions against the Commission of the Communities as if the Commission had a place of business in each of the said countries; and service shall be sufficiently effected by registered letter at the office of the Commission in Brussels.")

The noble Lord said: I move this Amendment on behalf of my noble friends. It is self-explanatory and I should like to hear the Government's reply.

VISCOUNT COLVILLE or CULROSS

There is in fact an answer to this, and I hope that my brief remarks will satisfy the noble Lord. Under one of the Articles of the Treaty the Community is a legal body. This is a matter of directly applicable law, so it is a legal body for our purposes, as it is in every other State. There is a division of responsibility as to jurisdiction. Some of it goes to the European Court and some to the national courts. Of course if the actions in question referred to matters over which jurisdiction is reserved to the Luxembourg Court they would never have come before the British courts at all. On the other hand, there are a number of things for which the Commission could be sued—things like contracts in relation to proprietary rights or other interests; actions for the recovery of property, or to establish title to property; proceedings concerning land or involving trusts. The British courts could be involved in these proceedings and could sue the Commission, or the Commission could sue individuals in this country, and there would be a law suit here, or in Scotland, or in Northern Ireland.

The only question that arises on this Amendment is whether we could serve due process on the Commission. Under the existing law there is a variety of ways in which this could be done. In England the Rules of the Supreme Court lay down a number of circumstances in which one can serve writs and other documents on bodies whose headquarters are overseas. One can either get leave to serve the process directly on the body overseas or, in some cases, one can serve it on their agent in this country. There is absolutely no doubt that the existing Rules of the Supreme Court cover all possible circumstances which might arise where the Commission would be a party to a law suit. The law in Scotland is a little different, but they too have both substantive law and rules. In the brief that I was given there was a beautiful passage relating to the Scottish jurisdiction and how it is done, but perhaps for the sake of brevity I had better cut out even that choice passage. It is perfectly possible for writs and other docu ments, in relation to something which the Commission had done and which was not reserved for the European court, to be served if the law suit arose in Scotland as well. Therefore we have the powers under existing legislation and the Rules of the Supreme Court in England and the Acts of Sederunt in the Courts of Session in Scotland. This particular Amendment would not add anything to our law, because the whole substance is already covered, as it is indeed in the case of any other juridically recognised body with which you may have to deal and which is based overseas.

LORD BESWICK

I am grateful to the noble Viscount for that explanation. We shall want to consider what he has said, and in the meantime I beg leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

On Question, whether Clause 3 shall stand part of the Bill?

6.31 p.m.

LORD STOW HILL

I should like on the Question, That the clause stand part of the Bill, to put some questions to Ministers which are designed really to enable companies and individuals carrying on business in this country to ascertain how they stand in regard to the various clauses of the Bill. I think the Committee would agree that this is probably the appropriate clause upon which to put the questions. It is Clause 3, dealing with the interpretation of Community instruments and the question of the evidential method of bringing them before court. May I begin by saying that obviously in due course a comprehensive case law will be built up—in fact, it has already been in process of coming into being and there are already a number of volumes of the decisions of the European Court.

The first question I should like to ask is this. I was wondering how soon one can hope that the case law really will cover most of the types of questions which confront persons affected by this body of law. My reason for asking that question is this. The European Court, after all, is the supreme court; it is the court of highest authority within the region of the matters with which it has concern of a community of 300 million people. One would have anticipated in those circum stances that it might be loaded with an immense body of work with all the questions which will arise in the relationships within the field of the Treaty of Rome. This may result, one would have thought, in a very heavy burden devolving on the court.

If one takes the equivalent of our own Supreme Court, the House of Lords in its judicial capacity, one finds that questions of the greatest importance do not actually reach the House of Lords for perhaps years and years after they have first arisen and have been dealt with by the inferior courts, whose judgments have been followed in relation to those matters. If I may give a simple example, it is the famous case of Lloyd v. Gracesmith, dealing with the question of agency. That decision must have affected an enormous number of transactions of various sorts in this country. Yet it took years before the case arose which precisely resolved the question on agency to which the judgments in that case were directed. I was wondering whether the same sort of situation might not arise with regard to the European Court, having in mind, as I say, that it is the supreme court and it has to deal in the ultimate resort with juridical questions arising in this vast Community of some 300 million people.

If it were going to take a long time before one got a decision from the European Court, or a decision which by implication laid down principles which would give the answer to questions of that sort, one can foresee that a number of, I will not call them inconveniences, subsidiary questions would arise. What system of law should one, in the intervening period, follow in determining those questions? One would have thought that the domestic courts, not having the guidance, in the assumed circumstances, of the European Court, would have to follow their own jurisprudence and determine those questions accordingly. The ultimate result, when a case ultimately got before the European Court, might show that the view of the domestic courts was mistaken.

In those circumstances, I submit that it would be of great help to a large number of people if the noble and learned Lord the Lord Chancellor, who I think is going to reply, were able to give some approximate idea as to how long it takes now, in the existing circumstances, for a decision to be arrived at by the European Court, say, after a case which it is designed to bring before the European Court has first been initiated. If it is a matter of months, of course, that would be an answer which I am sure would give the greatest satisfaction to large numbers of people. But I wonder whether "months" is the right word, or whether it takes years. I just do not know and I should be grateful for any information that the noble and learned Lord might be able to furnish on that score.

My second question is this. Subsection (1) of the clause provides that Community instruments are to be determined in accordance with the European law. That is perfectly natural and intelligible. But it also contains this provision: that the validity of the instrument shall be "treated as a question of law". My question to the noble and learned Lord is: what is the intended results of those words? I apprehend—and I should be grateful if he would indicate whether I am right or wrong in so supposing—that the object of those words is to achieve in rather fuller form what we sought to achieve by Section 4 of the Civil Evidence Act that we passed earlier this year.

If I may expand on that a little, foreign law—and European law in that context would be qua the English courts foreign law—has always been regarded as a matter of fact and when a relevent question has arisen before an English court the English court hears evidence, if evidence is tendered, as to what is the effect under the foreign system of the foreign law in question. That has given rise to inconvenient consequences. You may get a court which, having certain evidence as to foreign law before it in one case, comes to an affirmative conclusion, and another court perhaps years later, not having that evidence but considering precisely the same foreign law, might theoretically at any rate—and I believe a case has actually arisen—come to a contrary conclusion.

It was that situation, as I know the noble and learned Lord would agree, that we were trying to put right by Section 4 of the Civil Evidence Act. If I am right in my interpretation of these words would the noble and learned Lord tell me whether they are designed to produce in a full sense precisely the same result in regard to European law? It is to be a question of law and not of fact. It is to be a question not of evidence but a question for the English courts to determine once and for all, and a court sitting ten years' hence could in those circumstances have regard to the view that a court took now as to what that European law meant, and would not have to ask for evidence to show that it meant precisely that. I think that is what the intention is but I should be grateful if the noble and learned Lord the Lord Chancellor would let me know.

The next set of questions really pertains to the position of the English company trading in this country which may have had the misfortune to conflict in its trading methods with a provision of the Treaty of Rome. My question would be: in what position does that English company find itself and what might happen to it as a result? I apologise for wearying the Committee again with a quotation, but I believe that your Lordships would agree with me that this is a matter of vital import to industrial and commercial concerns planning their operations over a period of years in the light of the fact that on January 1 of next year we shall be full members of the Community. On previous occasions I have taken as an example Article 85. Some of your Lordships may remember it. I did so because it seemed to be a very convenient Article for that purpose. This is the Article of the Rome Treaty which prohibits as incompatible with the Common Market, broadly speaking, trading practices which distort trading operations between member States.

In particular, one finds that paragraph 1(d) prohibits the application of unequal conditions to parties undertaking equivalent engagements in commercial transactions, thereby placing them at a competitive disadvantage. In other words, it is the Article which forbids discrimination against one customer in the terms which a company trading with that customer and other customers affords to its customers. If a company trading in this country has customers in Europe the effect of this Article is that it must offer to each of them, broadly speaking, the same terms of business. There is an encroachment on the prohibition if the company ill this country for some reason discriminates against one of those customers.

For the sake of my example may I call the company trading in England "the English company and the customer who claims to be disadvantaged the disgruntled customer"? Supposing a question does arise with regard to the company's operations as to whether it has in that sense discriminated against the disgruntled customer, what may happen to the English company? Regulation 17 was enacted by the Council in order to give effect to Articles 85 and 86 of the Treaty. Again, at the risk of wearying your Lordships I should like just to direct your Lordships' minds to one or two features in the Regulation. It begins with a number of recitals, and one recital is— Whereas in order to establish a system ensuring that competition shall not be distorted in the Common Market, it is necessary to provide, 'for the balanced application of Articles 85 and 86 in a uniform manner to member States. That is the recital in the preamble to the Regulation. Then there follow a very large number of paragraphs, with which I need not trouble your Lordships in any detail but which stipulate a policy which is procedure to enable any party which is affected by contraventions of Article 85 to be represented and for his case to be put and considered, and so on.

Article 16 of the Regulation provides for the imposing of penalties. It enables the Commission by decision "—a decision which your Lordships will remember is referred to in the terms of Article 189 of the Treaty, to impose on undertakings a penalty and periodic penalty payments of from 50 to 1,000 units of account per day calculated in accordance with a formula with which I need not go into now. Regulation 17 also enables the Commission to issue decisions to companies telling them that they must stop contravening the provisions of Article 85 by the method in which they carry on their business. So that the English company, a question having arisen, might find itself faced in the first place with a "decision" issued by the Commission under Regulation 17, which is designed to implement Article 85.

Of course it might or might not comply with the decision. It might think the decision was just or unjust. If it thought the decision was unjust and insisted on carrying on with its method of business then it might find itself with a penalty imposed upon it, a penalty perhaps first and then a continuing periodic payment. In those circumstances the company could appeal to the European Court under Article 173 of the Rome Treaty. The European Court might of course reverse the decision or affirm it. If it affirmed it this company would find that it had a monetary obligation to perform, and if one then looked to see how that could be enforced one goes back to Article 192 of the Rome Treaty. One finds that the penalty provision can be enforced by procedure in the domestic courts of the company. In other words, the company could be brought before an English court and the English court could have placed before it the decision for imposing the penalty, and the English court could be asked, in accordance with English procedure, to enforce that penalty.

That is one thing that could happen to the company. It is not clear from Article 192, nor is it clear from any provision of Regulation 17—or indeed from any other Article of the Rome Treaty that I have been able to discover—whether the disgruntled customer receives the penalty or whether it goes into some public coffer or treasury. I have looked at the financial provisions of the Rome Treaty and they do not contain, unless I have missed it, any provision to the effect that the penalties imposed from time to time for breach of provisions are to go into a public exchequer. Article 192 seems to provide in a contrary sense, because what it says in its third subparagraph is: The party concerned may proceed to enforcement by applying directly to the authority which is competent according to domestic law. If that language does have the result which at first sight it might seem to have, then the English company, in the circumstances I have assumed, would find that it had to pay the disgruntled customer the amount of the penalty and a continuing penalty payment which could be imposed under Regulation 17.

I should be most grateful if the noble and learned Lord could let me know whether I have correctly understood that situation or whether I have completely misunderstood it. In particular, I should like to ask him whether he is able to say if the penalty is in a true sense a penalty which goes into the public purse or whether it is really a form of compensation which is received by a disgruntled customer. It is an odd situation, because if one looks at the next Regulation, which deals with competition in transport, one finds also in that Regulation that there is a provision enabling a penalty to be imposed, but the provision contains odd wording—I will not trouble your Lordships with the exact words—to the effect that the procedure under which it is enforced is not to be regarded as a criminal procedure. That seems to suggest that in that case at any rate this is in the nature of a civil procedure giving rise probably to a claim for compensation.

That is one series of adventures with which the English company might find itself confronted, but would I not be right in thinking that the English company might also find itself with a writ issued against it in the English court? Article 85 becomes part of English law, and in using that language I have in mind the distinction that the noble and learned Lord drew between directly applicable European law becoming part of the English law and remaining in a sense a system of law outside it. For practical purposes the English company would have to say to itself, "The letter of Article 85 is as a result of Section 2 of this Act" (when the Bill is passed) "to be read as if it were part of the English law". If that is right that would give the disgruntled customer the right to issue a writ against the English company claiming damages and saying, "I have been disadvantaged by your discrimination against me. That has lasted for a number of years and I want a substantial sum in damages from you."

Suppose the customer said, "Your misbehaviour has lasted many years and I want compensation in respect of those years." Could the English company plead the English Statutes of Limitation so as to limit the amount of damages which could be awarded against an English company? I would have thought the answer was "Yes ". Once a writ is issued against the English company in respect of a breach of Article 85 the English company could say, "You cannot sue me in respect of any wrongdoing—if there was a wrongdoing—beyond the period of six years back from now ". I would have thought that the letter of Article 85 would be on the same footing as a statutory duty, and that just as an action can be brought for breach of a statutory duty, say a failure to take safety precautions in a factory, so on the same footing can an action be brought against the English company for breach of Article 85.

I should like to ask the following question. I am sure that this will be decided in due course by case law and it may be difficult at this stage to know with any certainty what the answer will be. Supposing the Commission has taken the view on a complaint by this disgruntled customer that the English company has transgressed Article 85 and has issued a decision against the English company. Supposing having achieved the result that it gets a penalty out of the English company, or that the public exchequer of Europe gets penalties out of the English company, as the case may be, the disgruntled customer then issues his writ in the English courts asking for damages. It is perfectly possible for the English court, looking at the terms of Article 85 and bearing in mind any implication which it thinks it is right to draw from any relevant decision of the European Court—or no decision may be available from the European Court—to take the view that Article 85 does not bear the meaning that the Commission put upon it, and that the English company have a perfectly good defence to any claim brought upon an assumed breach of Article 85.

I should be grateful if the noble and learned Lord would give me his prima facie reaction to this. I would have thought that the English court would have to decide in favour of the English company and dismiss the claim. The decision is not part of the directly applicable law in the sense in which one is looking at it in terms of Clause 2 of the Bill; it is only binding on the English company and nobody else. You might get a situation where there is a conflict of view between the Commission and the English court. Admittedly the Commission could not go to the European Court in that situation because there would be nothing for the European Court to decide. Equally there is a provision in the Rome Treaty that an English court must in certain circumstances refer questions to the European Court, but that is only in the case where there is no appeal from the English court. If one is thinking of the Queen's Bench Division that would not apply. The only English court which could be within that category would be your Lordships' House sitting in its judicial capacity.

I am afraid that that is a bundle of questions. If the noble and learned Lord says that the answers have to be worked out in due course I shall understand perfectly and not complain. But to the extent that he feels able to answer my questions I feel his answer would be of considerable value to large numbers of English companies who are now thinking how they should project their programming in the coming years in the light of the great change of situation into which they and all of us—I say happily—will be entering. Those are the questions that I should like to put.

6.55 p.m.

THE LORD CHANCELLOR (LORD HAILSHAM OF SAINT MARYLEBONE)

Before I am asked any more questions perhaps I had better deal with this examination paper as well as I can, which the noble and learned Lord, Lord Stow Hill, with his customary unflagging zeal and unfailing courtesy, has put to me. I must warn the Committee that instant law is very often bad law, and although I shall do my best to reassure the hypothetical English company, I advise them not to take my advice without consulting a solicitor.

The first question in the examination paper was factual: how long will it take to get an answer out of the European Court? The only answer I can give to that is also factual: at the moment it is taking about five months. I am referring to a Community of Six, with the judges appropriate to a Community of Six, and also with the regulations which at present exist. Obviously with a Community of Ten there will be more references; but equally there will be an appropriate increase in the number of judges. It is possible that with a Community of Ten there will be a number of new regulations. Therefore this is not a prediction, it is an answer of fact: at present it takes five months for a reference from a national court to get an answer out of the Luxembourg Court. This does not apply to the other kind of proceeding which can be brought before the Luxembourg Court where it has an original jurisdiction of its own, normally at the instance either of a member State, or of one of the institutions of the Community itself. My answer relates to references under Article 177.

The next question was a very interesting one about Clause 3(1). If I may summarise it, broadly speaking, it was: why have we said that a question under subsection (1) is to be treated as a question of law? The noble and learned Lord is, in substance, quite right. The reason is that in English law, foreign law is a question of fact, which means that it has to be proved. There is no presumption that an English court knows what foreign law is, although the burden of proof in these cases is that the English court, in the absence of evidence as to what foreign law is, will assume that it is identical with English law. This is not always a presumption that is borne out by experience. It is, none the less, a presumption which English courts are bound to apply. The reason why we have introduced this is exactly what the noble and learned Lord thought. I am not necessarily applying or accepting his analogy with the relevant section of the Civil Evidence Act, but the fact is that the object is to make the courts of this country take judicial notice, without further evidence, of what Community law is. They must read the Treaties, they must look at the regulations as published in the Community's official gazette and read the reports in Common Market Law Reports or other documents. They must treat it as if it were a question of the law to which they are accustomed and decide it accordingly. As a matter of fact it also affects the avenues of appeal, because there are statutes which give to parties before tribunals of particular jurisdictions in this country a right to appeal on a question of law, but not on a question of fact. Quite clearly, therefore, one of the effects of this subsection is that it will alter the avenues of appeal. It will also mean that in those cases—although I do not imagine there will be any—in which there is both a judge and a jury the judge will decide what the law is, as he does in questions of English law, and not the jury as if it were a question of fact.

Another subordinate result will be that if a bench of magistrates, for instance, have a question of Community law before them it will be appropriate for them to ask the advice of their qualified clerk as to what the law is and not treat it as a question of fact. It means also that the court can look at what law reports it likes for the purpose of ascertaining what the law is. It will affect, as the noble Lord divined, the question of precedent although one must bear in mind in this connection that the doctrine of precedent is less rigidly applied in European jurisdictions, and therefore also in Community law, than it is by our courts. We have a rather rigid doctrine of what we call Stare decisis, and European law on the whole does not follow that. I think I have answered question No. 2.

Question No. 3 was: who gets the money if the Commission, or thereafter the European Court, imposes a penalty? The answer is that the disgruntled customer, as the noble Lord called him, does not get a penny of it. I am told that the Commission gets it in its public purse.

The next question was about a writ issued in an English court. Here again I must be rather careful of giving instant opinions about law. It may be that the noble Lord has slightly misconceived what the effect of the two Regulations and Articles, to which he has referred, may be. I do not visualise a right of damages arising either under Article 85 or under the Article which deals with discriminatory transport practices.

One could argue at some length about this, but, broadly speaking, Article 85, in one of its subsections, or the following section (I forget which) provides that the result of a breach of the law is to make the contract void. It is therefore comparable to our own restrictive practices law. The noble Lord will want to look at Clause 10 of the Bill which seeks to harmonise our own restrictive practices law with Common Market restrictive practices law as covered by Article 85, but I do not visualise a right of compensation arising under it.

The same, broadly speaking, although for rather a different reason, would almost certainly be the result of the other Article about discriminatory transport practices. That gives rise to a penalty but not to a right of damages. It is conceivable that the English courts, extending the doctrine of Groves v. Lord Wimborne might invent a doctrine of their own. But I think that extremely improbable. In the absence of such an action by the English courts I do not see an action for damages arising in them. On the other hand, an action for a declaration or for an injunction might easily arise. What the result would be I should not like to predict. What I can predict with certainty is that the Limitation. Acts, which are procedural, will apply to proceedings in the English courts. I am told that in the European courts a regulation is currently under examination, but has not yet been promulgated, which will impose a different period of limitation but which will still impose a period of limitation.

I do not think it is likely that there can be a conflict between the English court and the European Court of quite the kind which the noble Lord visualised in his next and, I think, last question. The English court, at whatever level, may ask for a reference under Article 177 of the Treaty. It is only in the highest court, which must be the House of Lords, or in certain cases, certainly criminal cases, the Court of Appeal, that the Court is under an obligation to refer. For various reasons I think that until we get to the highest level—that is to say, the House of Lords or the Court of Appeal, as the case may be—an English court of first instance would be wise to try to tackle the question of European law itself, because that would still enable the parties to appeal direct to the Court of Appeal. There will probably be other issues, and it will probably be easier and more desirable for the Court of Appeal to make the reference, either within its discretion or in discharge of its duty, than for the court of first instance. But it will not be possible to deny the court of first instance the right under Article 177 and within its discretion to make the reference on its own; nor would I seek to do so.

When the reference is made, the European Court does not formally pronounce judgment on the proceedings. It simply gives an advisory opinion as to the interpretation of the Treaties and regulations. That advisory opinion must be followed by the English court, but there may be other issues of fact and other questions of law of a domestic kind, or even of a European kind, outside the ambit of the reference which would determine the actual result of the case. It would be left to the English court to apply the opinion, loyally accepting its interpretation.

The question of a fine or a monetary penalty imposed by the European Court is an anomalous animal, if I may so describe it, because it is a civil penalty and not a criminal penalty under Community law. It will be enforced under rules of court in this country, probably promulgated under Clause 2 of this Bill by the English courts, almost exactly the same as under the Foreign Judgments (Reciprocal Enforcement) Act 1933. At any rate, it is very close to that analogy.

In conclusion—I am afraid that I have been a little time on this series of questions—I should like to say that my own broad impression is that nobody who practises law in England will notice much difference after we have acceded to the Treaty. I do not think that in more than one case in very many a question of Euro-Law will arise. As the noble Lord has rightly divined, it can arise in relation to restrictive practices and monopolies and in relation to discriminatory practices in transport. More commonly, individual litigants will find, not that they have new and unexpected obligations, but that they will have additional and, to them at least, rather welcome rights. What will happen more often than the kind of case which the noble Lord has envisaged is that the customs and excise will seek to recover a sum levied by way of tariff and the ingenious lawyers on behalf of the subject will say that this is contrary to the Treaty and that the customs levy is irrecoverable. This, at any rate, has been very largely the experience in other countries where many of the cases relate to ingenious subjects not paying the customs dues on the basis that the levy by the national State was illegal, which will be good news to some people in the future.

There will of course be no difference at all in our criminal law procedure. This is governed entirely by our own procedure. I have seen some fantastic documents—not of course reproduced in your Lordships' House—which suggest that in some way we shall be interfering with the presumption of innocence, trial by jury, Magna Charta or habeas corpus. The noble and learned Lord has of course not given the smallest authority to that, but it is worth while repeating that none of this is affected at all. I think I am right also in saying that the way the thing works will be that the doctrine of res judicata, estoppel by record, will continue to apply between individual litigants in the English courts, whatever the subsequent decision of a European Court may be between different parties or even between the same parties. I think also, but with less confidence, that the more complicated doctrine of issue estoppel per rem judicatum will also apply as it does at the moment. But I hope I have done my best to answer that examination paper. Whether I shall get my answers right and get a degree in Euro-law will be seen as time goes on.

LORD STOW HILL

I rise to thank the noble and learned Lord very sincerely for his full and comprehensive answer, which I feel sure will be of great interest and value to many people in this country. The only slight question I would put on what he said is this. I realise that Article 85 produces the result that an agreement which offends is void. What slightly disturbed me, however, was the opening words: "The following practices shall be prohibited—". It is difficult to know what the answer is, but I wondered whether the words" shall be prohibited added a claim in damages in the event of the prohibition being contravened. I do not expect the noble and learned Lord to answer now.

THE LORD CHANCELLOR

It is a perfectly fair point and I think the answer is this. The Treaty and the regulations themselves apply the remedy in money which is the penalty, and therefore I should think, again without predicting what the English courts will do, that the English courts would be tempted to say that the true construction of the Treaty is that the remedy in money is provided in the form of the penalty which goes to the Commission and that the purpose of the Article is not to give a remedy to the individual.

LORD STOW HILL

I am extremely obliged. Again, I rise only to thank the noble and learned Lord very sincerely for what he has said.

Clause 3 agreed to.

Clause 4 agreed to.

LORD DENHAM

I beg to move that the House do resume for half an hour to take the Northern Ireland Order.

Moved, That the House do resume for half an hour.—(Lord Denham.)

LORD SHACKLETON

I thought the noble Lord had agreed that it was going to be only until 7.30 p.m. That is what he told me three minutes ago. I know that the Government change their policy every moment.

LORD DENHAM

I am afraid there is a slight misunderstanding again. I think the agreement through the usual channels was that, at whatever time the House resumed, there should be half an hour before we resumed consideration of this Bill again, and that half-hour should include the time taken on the Northern Ireland Order. I am sorry if I misled the noble Lord the Leader of the Opposition, but I did not do it intentionally.

LORD SHACKLETON

Obviously the brilliance of the recent exchange between my noble and learned friend and the noble and learned Lord the Lord Chancellor has so totally confused the Government Chief Whip that he has forgotten what he said to me five minutes before. But if he wishes to have half an hour, it is all right by us.

House resumed.

THE LORD CHANCELLOR

My Lords, I apologise to the House for having resumed the Woolsack prematurely.