HL Deb 18 June 1974 vol 352 cc793-5

2.37 p.m.

LORD O'HAGAN

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government how much of Britain's balance of payments deficit is the result of British membership of the E.E.C.

LORD JACQUES

My Lords, membership of the European Communities has probably affected the United Kingdom balance of payments in a number of different ways. It is impossible to quantify all of these, or to separate their impact from that of a number of other factors. But our visible trade deficit with the other countries of the E.E.C. increased to £1,119 million in 1973, compared with £510 million in 1972. This followed increases in the deficit in both the previous two years.

LORD O'HAGAN

My Lords, I thank the noble Lord for that reply, but may I ask him whether he is aware that he has not really answered my Question? Could he link up the first part of his Answer, which seemed to be, "We do not know", and the second part, which seemed to be, "Well, it looks not too good", and give us the Government's view as to whether or not the deficit is due to our Membership of the Community?

LORD JACQUES

My Lords, interpretation of the impact of membership on the other areas of the balance of payments—such as, for example, other components in the invisible balance or direct investment—is made even more difficult by the absence of statistics. But considerable efforts are being made to improve the situation in this respect.

LORD BLYTON

My Lords, is the Minister aware that on joining the Common Market we were promised that we would have an El Dorado, and that those of us who said that the effect on the balance of payments would amount to £1,000 million were derided? Is the Minister also aware that, as result of joining the Common Market, our balance of payments deficit this year is running at the rate of £1,600 million?

LORD JACQUES

My Lords, I think we should bear in mind that the deficit with the original Six, expressed as a percentage of the United Kingdom's total trade with those countries, increased at very much the same rate as the deficit with our former EFTA partners.

LORD SHINWELL

My Lords, may I ask my noble friend to tell us of any other benefits which we have received from our entry to the Common Market, apart from this substantial increase in the balance of payments deficit?

LORD JACQUES

My Lords, I should have thought that that was another question.

LORD DERWENT

My Lords, would it not have saved time if the noble Lord had said, quite frankly, "We do not know"?

LORD DAVIES OF LEEK

My Lords, I think we agree that there is an absence of statistics. Is my noble friend aware that the boondogglers who tried to rush us into the Common Market spent thousands of pounds advertising that the wages of the British worker would be worth £10 a week more when we joined? On what statistics was that piece of imagination based?

LORD JACQUES

I certainly could not answer that question, my Lords.

LORD ST. HELENS

My Lords, if the Government have answered this Question with the reply, "We do not know", how can they be so definite in their desire to take Britain out of the Common Market?

LORD JACQUES

My Lords, I believe there is one point that should be made. It appears that the main reason for the increase in our deficit with the E.E.C. countries is the marked deterioration in the terms of trade, due to depreciation of the pound sterling in relation to E.E.C. currencies, particularly the deutschmark. In fact, the effective depreciation of the pound sterling in 1973 in relation to other E.E.C. currencies was as high as 13 per cent.

LORD SHINWELL

My Lords, is my noble friend aware that those who pushed us into the Common Market also did not know what was going to happen? Therefore, was it wise to push us in without having all the available facts?

LORD GORE-BOOTH

My Lords, may I ask the Minister whether, if these figures are prima facie correct, the fault may be not so much in the Market as in ourselves?

LORD JACQUES

My Lords, it is certainly partly within ourselves.

LORD DAVIES OF LEEK

My Lords, that is sheer Celtic imagination.