HL Deb 18 March 1975 vol 358 cc631-45

"We have not met with any serious difficulties from the EEC in the conduct of industrial policy during the past year. We have reported aids given under Articles 7 and 8 of the Industry Act 1972. Article 222 of the Treaty of Rome specificaly permits nationalisation; and Government participation in the equity of a firm does not in itself raise problems under the Treaty. The Commission have accepted that in urgent cases we will provide aid with-out first giving them an opportunity to comment. In such rescue cases a solution might be that when we prepare a plan to restore the firm concerned to viability we should discuss it with them within the following six months. This would not be an onerous requirement.

"The Commission have not yet commented on the Industry Bill. The pro- posals for the National Enterprise Board and for Planning Agreements have much in common with arrangements in other member-States; they are in no way incompatible with the Treaty, provided that the Government's powers are not exercised so as to damage the competitive position of undertakings in other member-States— a principle which we accept, as we have in the case of regional policy.

"I should add that as regards State Aids we had just as stringent an injunction on us as members of EFTA, and non-Market EFTA countries who have agreements with the EEC have accepted obligations just like the EEC obligations without having any part in EEC decisions in these fields.

"I believe that this meets our objective. Steel is more difficult, partly for inherent reasons, partly because of action taken by the previous Government when they repealed Section 15 of the Iron and Steel Act.

"I am satisfied that potential problems over prices can be resolved by the close contact between the Government and the Steel Board, and possible difficulties about mergers are also capable of a solution.

"There is nothing in the Treaties of Rome or Paris or in practices or policies under the Treaties which precludes us from extending nationalisation of the present private sector, even total nationalisation.

"On the control of private investment there were, until the repeal of Section 15, powers to prevent investment by non-British non-Community country steelmasters—and the much publicised mini-mill proposal at Newport could have been dealt with if Section 15 was still in force.

"My right honourable friend the Foreign and Commonwealth Secretary gave notice at the Council of Ministers on 3rd March that it might be necessary to ask for Treaty revision, if there is no other way of solving this problem. If, as part of the control of the economy, the Government, any Government, have to hold back the level of new investment in the public steel sector, it is unacceptable that the private sector should be free to expand where it wants, and by as much as it wants, thus adding to the inflationary pressure on resources—quite part from the location and regional problems, for example, in areas where steelmen have been made redundant by technological change.

"Since it is well known that other member countries have met with those and similar problems, and have found administrative means of dealing with it, I told the other Heads of Government in Dublin that we would study the methods they have used, whether by environmental controls, planning controls, industrial development certificate controls, or other means.

"Were this to fail, we could still have recourse to extending public ownership, or to proposing Treaty revision. The reference in the Manifesto Objective to fiscal policies has not proved difficult. There are proposals for certain measures to harmonise the structure of some indirect taxes but any which were objectionable to us would require our agreement. I will come to this again on VAT.

"Objective Five.

Capital movements.

The Manifesto commitment says: 'Equally we need an agreement on capital movements which protects our balance of payments and full employment policies.'

"We have made use of the relevant Articles of the Treaty of Rome to revert to broadly the same exchange control régime as applied before entry. We can continue to take action under those Articles to protect our balance of payments.

"Objective Six.

The Commonwealth and developing countries.

The Manifesto said: 'The economic interests of the Commonwealth and the developing countries must be safeguarded. This involves securing continued access to the British market and, more generally, the adoption by an enlarged Community of trade and aid policies designed to benefit not just "associated overseas territories" in Africa but developing countries throughout the world '.

"I have referred to Commonwealth sugar, and New Zealand dairy products.

"Another major achievement was the Lomé Convention.

"What was achieved, and a great tribute is due here to the work of my right honourable friend the Minister for Overseas Development, is the transformation of a paternalistic arrangement with a restricted range of mainly ex-French and Belgian Colonies or Territories, in which they had to offer the Community reciprocal trade benefits, into a relationship based on co-operation with 46 countries in Africa, the Caribbean and Pacific (22 from the Commonwealth). The new Convention governs access, without requiring reciprocity, a completely new scheme for stabilisation for commodity earnings, and much increased aid. It has rightly been described as historic. For this and other reasons, almost all Commonwealth countries, advanced and developing, have expressed their hope that Britain will stay in the Community.

"As to Asian countries such as India, Sri Lanka, Bangladesh and Pakistan, a good deal has been done for them already. They have benefited from EEC emergency aid to those countries most seriously affected by the oil price rises. India has an agreement with the EEC and the other three are negotiating them. The Generalised Scheme of Preferences has been much improved, and earlier this month the Council of Ministers agreed to work for continuing improvements to the Scheme, with particular emphasis on the interests of the poorest developing countries, including those of the Indian sub-Continent.

"But it cannot at this stage be claimed that all the problems so far as Asian countries are concerned have as yet been solved. In principle, Yes, but there is so far no commitment about financial provision.

"Objective Seven.

Value Added Tax (VAT).

The Manifesto commitment is: 'No harmonisation of Value Added Tax which would require us to tax necessities'.

"The proposals now being discussed in the Community are concerned with agreeing a uniform assessment base for VAT. They provide for our system of zero-rating. We will be able to resist any proposals which are un-acceptable to us.

"Contrary to the situation four years ago, this is no longer a real threat. So far from harmonising, a number of countries are insisting on increasing the number of VAT rates within their own tax systems and it seems there is no danger to our freedom here at all.

"To sum up, therefore, I believe that our renegotiation objectives have been substantially, though not completely, achieved.

"I have set out at some length the outcome of the negotiations on each objective mentioned in the Manifesto, including those where the passage of time has diminished or eliminated the threat we foresaw.

"What now falls to be decided is whether, on these terms, the renegotiated package as a whole, the best interests of Britain will be best served by staying in or coming out.

"It will be seen from what I have said that the Government cannot claim to have achieved in full all the objectives that were set in the Manifesto on which the Labour Party fought and won two Elections last year. Some we have achieved in full; on others we have made considerable progress, though in the time available to us it has not been possible to carry them to the point where we can argue that our aims have been completely realised.

"It is thus for the judgment now of the Government, shortly of Parliament, and in due course of the British people whether we should stay in the European Community on the basis of the terms as they have now been renegotiated.

"So, I do not believe that in taking this decision we are entering into a narrow regional grouping to the detriment of our worldwide relationships. My first regard, ever since I entered this House, has always been more to the Commonwealth than to Europe. We have to face the fact that practically the whole Commonwealth, deciding on the basis of their own interests, want Britain to stay in the Community. Many have diversified their trade away from Britain—in many cases they felt themselves forced to do so as a result of the 1971 decision and terms. But a number also, New Zealand for example, have entered on a radical reorientation of their political stance related to the region surrounding them.

"Again, I would not commend the Government's policy to this House if this meant in any way weakening our transatlantic relationships. Relations with the United States are closer and better than they have been at any time certainly in this generation and in some contrast to what they have been in very recent times. Nothing in today's decision will in any way weaken that relationship.

"Mr. Speaker, Her Majesty's Government have decided to recommend to the British people that they should vote in favour of staying in the Community on the terms which I have described. I have given the Cabinet's view.

"I have only this to say before I sit down.

"One, while perhaps some of these things might have been improved even if the Government had not entered into these tough negotiations—the renegotiations have themselves been more than a catalyst of change; they have been an initiator of change.

"The second thing is this. Many of us, including myself, have been half terrified by reading the legal jargon, the apparently fussy legalism and theology, not to mention some speeches and statements of enthusiastic supporters. The Foreign Secretary and I have found the Market much more flexible than I think either of us expected, both on individual questions and in what we have noted as a substantial shift of power over these past twelve months.

"Renegotiations, agricultural and financial crises, whatever it may have been, all have played their part in putting more power into the hands of national Ministers meeting in the Council of Ministers. Few would have thought, even a year ago, that we would have got agreement, through what the Minister of Agriculture negotiated on beef, to what in practice is freedom to return to the principles of Tom Williams' Agriculture Act of 1947 in the matter of deficiency payments, which had been specifically excluded as a means of farm price guarantees as a result of the 1971 negotiation package.

"A fundamental change not in the Treaty, but in the practice, has been brought about by the new system of Heads of Government Summits, started with that convened by President Giscard d'Estaing in Paris last September, and continued by the December meeting, and now the Dublin meeting. This system has, already, de facto reasserted a degree of political power at top level, not only over the month by month decisions, but over the general method of operation of the Market. This does not mean it has become a Europe des patries. It is a Community. But, as compared with even a year ago, vital interests of individual nations are now getting much more of a fair hearing, and the political power in asserting those interests has certainly increased more than appeared possible in the battles of 1971, 1972 and 1973—more, in my view, than even a year ago, when the result of the February Election made the Manifesto objectives for the first time no longer a domestic, political argument, but a Governmental man-date for renegotiation.

"My right honourable friend the Leader of the House will announce our proposals for a two-day debate immediately after the Easter Recess. What I have said this afternoon, including the announcement of the Government's decision, means that, for that Parliamentary debate, the case now rests, and thereafter, following the Referendum campaign, the case will then rest for the people to decide."

My Lords, that is the end of the Statement. In regard to a debate in your Lordships' House, this is clearly a matter which we can discuss through the usual channels.

4.22 p.m.


My Lords, may I congratulate the noble Lord the Leader of the House on that mammoth performance. It says much for his ability and his capacity that he not only sounded as if he understood what was being said— because, of course, he did—but he also sounded as if he had written it, which is even more remarkable, since he had not even seen the Statement. I wonder, though, whether I could beg him to see whether or not the machinery regarding Statements could be improved. If the Prime Minister can get up in another place at half past three with a copy of this Statement, it cannot be beyond the wit of man to produce a Statement for the noble Lord the Leader of the House to read at twenty-five minutes to four. Perhaps he could do something about it.

This afternoon I do not intend to comment in detail upon what the noble Lord the Leader of the House has said. I could hardly agree with some of the points which have been made in the Statement. One or two of the statements, like the passage about the Anglo-American relationship, are rather tendentious and rather unnecessary to have inserted in the Statement. However, I do not intend now to go into that matter; nor do I intend—though, Lord knows! there is scope for it—to make any gibes about the situation into which noble Lords opposite have placed themselves, or about the events which have led up to this Statement, or, indeed, more seriously, about the position into which the Government have put the country over the Referendum. I shall leave that aside, and probably I shall not make another joke about it until after the Referendum. After the Referendum, I hope to goodness that it will not be necessary or relevant to make a joke about it.

All I shall say is that I think that the outcome of this Statement is wholly desirable. I congratulate the Government upon it and welcome their decision to support this country remaining in the Common Market. I think that the most significant matter in this Statement is that on two occasions the Prime Minister has said that Her Majesty's Government have decided to recommend to the British people that they should vote to stay in the Community. Her Majesty's Government have decided this—not just a section of Her Majesty's Government, or a section of the Cabinet, but Her Majesty's Government. May I ask the noble Lord the Leader of the House to give us an assurance that, because he has used that phrase, the Prime Minister, with his colleagues, will do everything he can to ensure that the right solution, the right answer, is found to the Referendum.

4.26 p.m.


My Lords, I can say only that the decision of Her Majesty's Government, contained in the mammoth Statement which we are so much obliged to the noble Lord, Lord Shepherd, for reading out is—I think I am right in saying—without a single exception, very welcome to noble Lords on these Benches. We are indeed glad that the Labour Government have at last returned to the conclusion that they arrived at in 1967 and again in 1970; namely, that Britain should be a member of the European Economic Community. Also, for our part we agree with the various concessions which the Government have induced our partners to make. Concessions to legitimate British points of view are very welcome, even though they could probably have been obtained by the usual process of discussion and negotiation through the ordinary Brussels machinery, without any implicit or explicit threats of withdrawal from the Community.

The only specific comment which I should like to make in advance of the promised debate which we shall have after Easter concerns the renegotiated terms. The Prime Minister, rather contemptuously, says in the Statement that the achievement of a European Monetary Union is about as likely as the achievement of the ideal of general and complete disarmament. I believe that, on the contrary, in a few years' time—we do not know how many years—this project will be discussed once again. Nor do I believe that, if properly negotiated, after the achievement of some common industrial policy it will be in any way a menace but, rather, a great help to our national integrity and, indeed, to our national well-being.

In conclusion, all I would say is that we must now hope most sincerely that the Prime Minister will put his full weight and full backing behind a campaign to convince the British people that their future lies in gradually constructing some democratic entity of a new type which will abolish international tensions in at least a very large area and thus set an example to the rest of the world.


My Lords, the noble Lord, Lord Carrington, has already expressed apologies that he has another engagement. I apologise to him for having kept him from it. However, may I say to him that I am very grateful for the way in which he has responded to the Statement. There always arises a degree of argument, but that is what politics and your Lordships' House are about.

May I say to both of the noble Lords that, as we said in our Manifesto, the Government went into the renegotiation to obtain new terms that were satisfactory to us, with the objective of remaining within the European Economic Community. We have taken the view that these terms are such that we can com-mend them to the country. Therefore, I can give the noble Lord, Lord Carrington, the noble Lord, Lord Gladwyn, and the House the assurance that it is now the determination of Her Majesty's Government to ensure that the British people are made aware of the importance of this decision and that we get the right answer.


My Lords, is my noble friend aware that, speaking for myself, for many Members in another place and for a large number of people in the United Kingdom, I regard the terms which the Government have accepted as totally unacceptable, and completely inconsistent with the repeated declarations made by a large majority at Labour Party Conferences in the past few years, and indeed as a betrayal—and I emphasise the word "betrayal"—of decisions previously made by prominent Members of Her Majesty's Government? My noble friend may also be aware that, like the noble Lord, Lord Carrington, it is not my intention to enter into detail, except to mention that I take my stand on the article which appeared in The Times newspaper the other day under the name of its economic editor, Peter Jay, who declared that there had been no fundamental change as a result of the alleged concessions the Government claim to have received.

Is my noble friend also aware that it is my intention, even with my very modest influence, along with many others with greater influence, to carry the fight into the country, without any arrogance and certainly with no malice intended? It is simply a matter of wrong ideas on the other side of the political fence, and in some quarters of the Labour Party. It is my intention to carry the fight in the sternest, most relentless, resolute and determined fashion in order to prevent this country rushing into disaster—a disaster which I predicted many years ago when Harold Macmillan made the first pronouncement in the House of Commons of the intention of the Government of the day to enter into negotiations. Is he further aware that those of us who take the stand which I have ventured to indicate in these few remarks, do so not because we are opposed to the best interests of this country but because, on the contrary, we are concerned with its fundamental interest, taking a long-term view. Let it be clearly understood that what I am now saying will be carried out with the utmost resolution, irrespective of the consequences.


My Lords, my noble friend is one in your Lordships' House, in another place and in the country, who has consistently opposed Britain's entry into the EEC. May I say to him that my respect for him and those who hold his view would be very much less if he did not take the line that he has indicated this afternoon. I hope that we will have a good debate on the Referendum because flowing from that I believe we shall then have a sizeable vote at the Referendum. The decision in itself can then be decisive and this country will know where its future lies.


My Lords, is the noble Lord, Lord Shepherd, aware that while circumstances have perhaps made it inevitable that we should remain a member of the Community, even at first hearing the people who have played a detailed part in the last ten to twelve years on this important issue will recognise this Statement for what it is —a bucketful of camouflage? It produces no fundamental change; the principle that exists now after that Statement is almost precisely the same as existed before, and I think it ought to be clearly on the Record that a Government that gains election on any anti-Common Market vote as a consequence of their statements was elected under false pretences and, whatever may be the out-come of the discussions upon this matter, it is a cynical manoeuvre which I believe is a betrayal of our Parliamentary system.


My Lords, the noble Lord is a newcomer to your Lord-ships' House and I am sure that our debates will be enlivened by his joining us. This Government were elected on a Manifesto which said that we would seek to renegotiate the terms, and there it was quite clearly said "with the intention of remaining within the EEC". I do not think that is open to question, even by those on my side of the House who may take a different view from the Government and myself. This is a matter which no doubt we shall continue to debate. I hope we shall have a good debate and I am looking forward to it very much indeed.


My Lords, can my noble friend further inform the House on this statement which the noble Lord, Lord Carrington, was careful to underline? The phrase was "His Majesty's Government recommend—"

Several Noble Lords: Her Majesty's Government.


My Lords, consequently we were given to understand that, despite the fact that the phrase, "Her Majesty's Government" may be used, members of the Cabinet who take a different point of view may be able to campaign against entry into the Common Market. Is that statement still to hold, or must members of the Cabinet who voted against the principle of entry now accept the full statement of support?


My Lords, the Cabinet met this morning and after a long debate and full assessment of the renegotiated terms they came to a decision, and that is the decision of the Cabinet and the decision of the Government. It is the decision that the Government will put to the country. But, as my noble friend is aware, because of the unique character of the negotiations, those members of the Government who declare their dissent from this view—and we all know their views— are being allowed to speak to the country, explaining their views and making their case. I have no doubt that the Referendum will be better as a consequence of that decision.

4.37 p.m.


My Lords, may a voice be heard from these Benches— though I cannot claim to represent anyone but myself—to express the relief and, indeed, enthusiasm felt by many people, after months of doubt, at the declaration that has been made this afternoon. We are used to historic moments in the history of our relations with Europe, and certainly this is one of the really important ones. I should like to make two comments. One is that, in some passages of the notable declaration and performance of the noble Lord the Leader of the House, we had a feeling that the noble Lord was addressing himself to a slightly different audience, but we respect and understand the reason why some of this Statement should have been phrased in such a manner.

I should like to put in one word of warning and then, if I may, add two notes of congratulation. The only note of warning is simply that there is always a slight suggestion that if our industrial performance does not improve the Community will still continue to owe us a living. This is a heresy which I have pointed out before, and I hope it is not to be interpreted in that way. In my view the first of the two welcome points is that the Government should with great honesty have confirmed in this Statement that the wish of the Common-wealth at large is that we should take this step. This is extremely important. The other point is that I greatly hope that the way in which the Statement concluded will at last dissipate some of the legends that the Community is simply a large bureaucratic machine.

It is clear that the Government have discovered—and I am sure that they knew it before—that, after all, the people from the other eight countries are human beings with whom one deals as human beings, and when one negotiates and discusses with them, while they are perhaps different from you and me they are not so different as all that because we are all human beings together, trying to solve a neighbourly problem.


My Lords, I am grateful to the noble Lord, Lord Gore-Booth. Of course, the Statement is writ-ten for another place and, by custom, we repeat it. I agree with the noble Lord that we cannot find salvation for this country within the European Economic Community. On the other hand, being within it, if we are to seize our opportunities, then life will be a little easier as a consequence.

My Lords, turning to the Common-wealth, there is no doubt at all about what the Commonwealth feel in this matter. As to the bureaucratic machine of the EEC in Brussels, I hope that one thing we may be able to do is to slow down on some of the harmonisation and on some of the unnecessary number of Orders which are being issued. I hope we may perhaps be able to devote greater concentration to some of the more fundamental matters. If I may here express a personal view—and it is something I should like to discuss with the leaders of the Parties and with other noble Lords— I believe that if we as a country decide to remain within the EEC, Parliament (that is, the other place and your Lord-ships' House) will need seriously to look at its procedures in order to be able to maximise the time available to us, the energies we have, so as to deal with the mass of legislation coming out of the EEC as well as our own domestic legislation. I personally do not believe that Parliament as it now is with its procedures which have gone on for very many years, if not centuries, is capable of dealing with the great challenges which will confront it if, as I hope, we remain within the EEC.

The Earl of ARRAN

My Lords, I am sorry to intervene, and I will try to be brief. In the event of the pro-Marketeers winning in a Referendum, may I take it that those who oppose it in Cabinet will resign?


My Lords, the position has been made perfectly clear by my right honourable friend the Prime Minister. The noble Earl, Lord Arran, is quite aware of it, since I believe he reads the newspapers from time to time.


My Lords, is my noble friend aware that the sentiments expressed by my noble friend Lord Shinwell will command support among millions of our fellow-countrymen? There are many of us in this House, in another place, and also outside these walls, who will do their very best to ensure that the sovereignty of the British people is restored to where it properly belongs—here in the Palace of Westminster.


My Lords, to my noble friend Lord Bruce of Donington I would only say that I have no doubt at all that sovereignty remains with the British people. Sovereignty is devolved to Parliament for a period of time, and reverts to the people when they make their decision at a General Election. I do not believe that remaining within the EEC, and the devolution by Parliament of certain of our sovereign responsibilities, in any way weakens the sovereignty or the overall responsibility of Parliament. May I say to my noble friend that Parliament can give and Parliament can always take back.


My Lords, before we come to the end of this discussion, may I ask the noble Lord the Leader of the House, with regard to what he said about the difficulty of dealing with a flood of legislation, whether the Government agree that the only sensible way of dealing with this is directly to elect Members of Parliament of Europe?


My Lords, that is something further away than I am prepared to contemplate at present. I would want to see first of all how we can win the Referendum on the advice given by Her Majesty's Government.


My Lords, would the noble Lord the Leader of the House agree that it is time we stopped making our Referendum speeches, and resumed the Business before the House?


My Lords, may I thank the noble and learned Lord, Lord Hailsham of Saint Marylebone, for that most helpful suggestion.